Investment Q&A

IIP has been weak, but we still like it overall. Growth is higher than many REITs, but it is also more expensive on a price/cash flow than many. The payout ratio is less than 50% on a 12-month basis, however. Cash flow is expected to grow 6% to 8% over the next few years, vs flat growth for much of the sector. Occupancy is good at 96.2%. Tax treatment can change by year, but last year 100% of distributions were return of capital. We would be OK slowing accumulating this over time. We see no rush, but lower rates help both its fundamentals and sentiment. CAR and KMP are among our favourites in the residential REIT sector, and we would be very comfortable owning them. They also should benefit from further rate cuts, up to a point where investors become more concerned about a possible recession (which could still be avoided or deferred).