Q: I've been looking to REIT's with the intention of adding a level of potential inflation protection. CHP.UN seemed to me like a good REIT that would appear to have some resilience - even if Commercial Real Estate in general would take a hit. However it's the "shopping centers anchored by supermarkets" description that gives me pause. The "supermarket" part gives me a degree of comfort. The "shopping center part".....not sure.
Are you able to give me your always valued opinion please?
Are you able to give me your always valued opinion please?
5i Research Answer:
We think that CHP.UN is a good REIT. It pays a 5.56% yield, has a healthy payout ratio, and is backed by high quality customers. Its customers are primarily retailers with Loblaws being the largest, making up 57% of its tenancy. CHP.UN essentially owns the grocery store that a Loblaws, grocery, or other large retailers would operate out of. This is why we say it has high quality customers. We think it is a good quality REIT that will perform better as rates come down further.