Poesy with her cake, Poesy’s fifth birthday party, Amica, Toronto, Ontario, Canada (Photo credit: gruntzooki)
ACC : TSX : C$8.90
52-week price range: $8.50 – 10.01
Current dividend $ 0.42
Current yield: 4.7%
Shares o/s (M): 30.7
Float o/s (M): 25.6
Market capitalization ($M): $ 274
Float capitalization ($M): $ 228
Volume (000s): 38
Major shareholders: Manji brothers ~ 17%
FYE May 31 F2011A F2012A F2013E F2014E
FFO: $ 0.41 $ 0.34 $ 0.46 $ 0.66
P / FFO: 21.5x 26.4x 19.2x 13.6x
$ 0.53 $ 0.59
P / AFFO:
Amica Mature Lifestyles Inc. (ACC: TSX) is a premier brand manager and owner of luxury independent living retirement communities in major urban centres across Canada.
Amica reported FFO per diluted share of $0.12 in Q3/F13, up 15% from $0.10 in Q3/F12. The year-over-year growth reflects the impact of internal
consolidations completed over the past year as well as strong growth in MARPAS. AFFO per diluted share for Q3/F13 was $0.129, slightly below
$0.133 in the year-ago period, and below our estimate of $0.14. The variance to our forecast was due to higher than forecast interest expense as
well as the slower than expected pace of lease-up at Amica at Quinte Gardens.
Occupancy increased year-over-year. Occupancy for Amica’s mature portfolio improved materially year-over-year from 90.8% at the end of
Q3/F12 to 94.5% at the end of Q3/F13. Excluding Amica at Thornhill, which was newly classified as a mature property despite still being in the lease-up phase, occupancy for Amica’s mature properties was 95.9%, a level not seen since 2008.
Occupancy at lease-up properties continues to improve. At the end of Q3/F13, Amica had five properties in lease-up, with an average occupancy of
68.4%, up 670 bps from 61.7% at the end of F2012. Including 34 net pending move-ins, management expects occupancy at lease-up communities
to increase to nearly 73% over the next few months.
Highest MARPAS growth since 2004. In Q3/F13, same-property MARPAS increased by 6.8%, as compared to Q3/F12, as occupancy improved and
rental rates increased. We note that this is the strongest quarterly growth in MARPAS since 2004, and we expect the growth to continue as occupancy remains tight and Amica’s pricing power improves.
Maintaining BUY rating, and C$11.25 target. Despite slower than expected occupancy gains at Amica’s lease-up communities, we expect the company to post strong cash flow growth as its stabilized communities continue to post strong MARPAS growth. We remain of the view that Amica’s focus on best-in-class luxury seniors housing assets will continue to deliver exceptional value to shareholders.
We maintain our BUY rating and C$11.25 target price based on our sum-of-the-parts valuation ($10.74/share for ownership operations + $0.52/share for management operations).
Posted by jackbassteam on April 12, 2013
HR.UN : TSX : C$23.35
Pirate investing (Photo credit: RambergMediaImages)
H&R REIT is a diversified commercial real estate investment trust with a high quality portfolio of office properties, singletenant industrial properties, retail properties and development projects. Its strategy focuses on long-term leases with creditworthy tenants, matched with long-term fixed rate financing to provide stable and predictable income to unitholders.
H&R REIT completed the acquisition of Primaris Retail REIT on April 4, 2013, acquiring a portfolio of 27 properties (primarily enclosed shopping centres) located across Canada for $3.1 billion, equating to a going-in cap rate of 5.6%. Of note, one property acquired from Primaris is slated to be sold to RioCan REIT for $35 million. To fund the acquisition, H&R REIT issued ~62.1 million units to Primaris unitholders, assumed ~$1.4 billion of debt, and utilized cash on hand of ~$100 million. This transaction culminates several months of competing for control of Primaris.
We believe that the acquisition of a portfolio of high quality Canadian enclosed shopping mall assets is a positive development for H&R REIT,
particularly over the long term. Through the Primaris transaction, H&R has acquired a large portfolio of properties within an asset class that is highly sought after and almost impossible to duplicate; we note that Primaris owned the only sizable publicly traded portfolio of urban enclosed shopping malls in Canada.
While the integration of major acquisitions takes a significant investment of effort and time, we note that H&R is also acquiring Primaris’ operating platform, which should smooth the transition.
Maintaining BUY rating, but reducing target price to C$27.00 from C$28.00.
We are reducing the cap rate utilized to calculate our estimate of NAV for H&R REIT to account for the lower cap rate attributed to the newly acquired retail assets from Primaris; our utilized cap rate is now 6.00% (from 6.25%). Our estimate of NAV per unit declines slightly from $25.33 to $24.55, reflecting the increased unit count following the equity issued concurrent with the Primaris acquisition, as well as an increase in our adjustment for the mark-to-market of debt, as interest rates have declined since NAV was last calculated. Following the completion of the Primaris acquisition, we are reducing our target price for H&R REIT to C$27.00 (from C$28.00) to reflect the slight decline in our NAV per unit estimate.
Our target price is based on a 10% premium to our revised NAV estimate of $24.55 per unit. Combined with an annualized distribution of $1.35 per unit, our C$27.00 target price equates to a 12-month forecast total return of 21%. We continue to rate H&R REIT a BUY.
Posted by jackbassteam on April 8, 2013
Property Taxes Icon (Photo credit: danielmoyle)
AIF : TSX : C$8.50
Altus Group is a national provider of real estate consulting and advisory services in Canada. Services include property tax appeals, property valuation for acquisitions and public reporting purposes, provision of cost estimates for major development projects, and land surveying.
We are reiterating our BUY rating on Altus shares but lowering our target price to C$11.00 from C$11.25 following the Q4/12 print. In our view, Altus provides investors with not only an attractive 7.1% dividend yield, but also the opportunity for significant capital appreciation. We
believe Altus’ 27% equity stake in Real Matters (RM) contains potential hidden value, while ARGUS represents upside risk potential to our
financial forecast. Last, the recovering US economy and desire for independent real estate advice should provide Altus with numerous
Net revenue was $73.9 million, a 2% decrease y/y and slightly below our $74.7 million estimate. Gross margin was 58 bps lower than expected
while SG&A was in line, bringing EBITDA to $11.4 million (15.4% margin), slightly below our $12.1million (16.3% margin) estimate. EPS was ($0.94) and included a $22.5 million or $0.98 per share impairment charge against the carrying value of ARGUS Software. Notwithstanding
this, we remain confident about the future prospects of ARGUS.
Management expects restructuring charges totaling $1.1 million in Q1/13 mostly related to employee severance costs.
We expect 10% EBITDA growth in 2013. RVA should build on the 19% EBITDA growth posted in 2012 thanks to a full year of the CalPERS and
PRIM contracts. Tax should benefit from the opening of tax assessment cycles in ON and QC. Management sounded confident in ARGUS’ prospects. Geomatics should be flat, but pipeline work represents upside risk potential, while we see flat Cost results. We have adjusted our estimates for the quarter, leading to a 25 cent target price decrease to C$11.00.
Posted by jackbassteam on March 14, 2013
Brookfield Place, as viewed from the east, Toronto, Canada. (Photo credit: Wikipedia)
Brookfield Office Properties
(BPO : TSX : $17.11)
Brookfield Office Properties*
(BPO : NYSE : US$17.13)
I’m In A New York State of Mind.
Brookfield Office Properties rallied to its highest level since last July after posting strong Q4/12 growth and more importantly a promising lease update for its World Financial Center in New York. For the quarter, FFO per diluted share was $0.30, up 15% from $0.26 in the year-ago period.
The strong YoY growth in FFO per diluted share was driven primarily by healthy internal growth of 5.3%, the positive contribution from acquisitions and development completed over the past 12 months, and higher interest and other income, partly offset by asset dispositions.
Same-property NOI increased by a robust 5.3% on a YoY basis in the fourth quarter. The increase was largely a result of renewing expiring leases and executing new leases at materially higher market rates over the past year, a slight uptick in same-property occupancy. While this was all good, the key highlight of BPO’s Q4/12 earnings release was that there are two Letters of Intent currently being negotiated for 1.5 million sf of the 3.0 million sf BoA/ML (BAC) lease at Brookfield Place New York (the former ‘World Financial Center’) set to expire in September 2013.
While the Letters of Intent do not necessarily translate into signed leases, Canaccord understands that this is quite far in the leasing process with financial and other leasing terms being discussed, and there should be a decent probability that one or both should result in a signed lease.
However, management was reticent to comment on the timing of occupancy should these leases get signed, although it would likely not occur until sometime in 2014. Ma is bullish on the stock, noting that within the North American REIT space, very few REITs boast a portfolio of assets of similar quality to that of BPO, yet BPO trades at only 15.2x 2013E FFO per share, the lowest multiple among its peers.
Posted by jackbassteam on February 6, 2013
Single-family home (Photo credit: Wikipedia)
Tricon Capital Group Inc.
TCN : TSX : C$5.65 BUY Target: C$6.20
San Francisco Bay Area investment highlights. U.S. Housing Recovery
Investor day and property tour hosted by Tricon, which provided attendees with exposure to certain developments within Tricon’s US funds and properties recently acquired as part of the company’s new single-family home rental strategy.
Most importantly, we gained significant insight into one of Tricon’s newest initiatives – investment in single-family homes. Management believes that the current state of the US housing market presents a ‘once-in-a-generation’ opportunity to profit in a very meaningful way from investing in single-family homes as the housing market recovers from trough levels. Overall, we have a positive view of Tricon’s single family home rental strategy, which we believe is a compelling opportunity that utilizes the capabilities of knowledgeable and experienced local partners to execute on its strategy.
We do note, however, that with competition for single-family home investments elevating, we believe the ‘window of opportunity’ to acquire distressed homes at Tricon’s target metrics may have started to narrow. We therefore expect that Tricon will likely have to enter into new markets and/or modestly adjust its return expectation in order to continue its growth in its single-family home rental strategy. That said, Tricon’s strong track record and solid investment strategy give us confidence that its single-family rental investments should, in the end, be successful. Reiterating BUY rating and C$6.20 target price.
Tricon very capable and experienced real estate investor/fund manager with a solid track record of achieving attractive returns on its investments for investors in its funds. Our target price of C$6.20 is based on a 5% discount to our sum-of-the-parts value of $6.54 per share (unchanged).
Combined with an annual dividend of $0.24 per share, our forecast total return is 14.0%. We maintain our BUY rating for Tricon.
Posted by jackbassteam on October 29, 2012