Q: One of your favourite REITs is DIR.UN.
What are the reasons with respect to a drop of 15% for DIR.UN vs. a more modest drop of 8% for the ZRE during the last week ?
Are there any specific issues arising from tariffs?
Do you still recommend it?
Thanks
What are the reasons with respect to a drop of 15% for DIR.UN vs. a more modest drop of 8% for the ZRE during the last week ?
Are there any specific issues arising from tariffs?
Do you still recommend it?
Thanks
5i Research Answer:
We still like DIR.UN; we would be cautious in comparing it to an ETF, as ZRE owns 23 separate REITs and is far more diversified. DIR is cheap at 9X cash flow, and decent growth (for a REIT) is expected over the next two years. Scotiabank lowered its target price from $16 to $14 last week but there has been no specific company-related news. Bloomberg notes it has no US business and tariffs should not be an issue here.