Canaccord Genuity analyst Mark Rothschild assigned a Buy rating on Canadian Apartment (CAR.UN – Research Report) today and set a price target of C$53.50.
Mark Rothschild has given his Buy rating due to a combination of factors concerning Canadian Apartment Properties REIT’s strategic business moves and fundamental market conditions. The REIT’s decision to divest its manufactured housing communities portfolio at a premium price demonstrates a tactical shift towards focusing on the rental apartment sector in Canada. Rothschild identifies this shift as a positive one, especially given the strong fundamentals for rental apartments in the country, driven by significant immigration and a shortage of affordable housing options.
Moreover, the proceeds from the sale are set to be utilized effectively by paying down high-interest debt and investing in rental properties that show promising income growth potential. The rental apartment portfolio has exhibited robust growth, with notable same-property net operating income (NOI) increases, signaling a healthy financial outlook. Additionally, Rothschild sees the limited path for new development as an advantage for existing properties to capitalize on the demand, further underpinning his Buy rating and the anticipation of continued value appreciation for the REIT’s stakeholders.
According to TipRanks, Rothschild is a 5-star analyst with an average return of 8.6% and a 66.74% success rate. Rothschild covers the Real Estate sector, focusing on stocks such as Dream Office Real Estate Investment, Choice Properties Real Estate Investment, and RioCan Real Estate Investment.
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Canadian Apartment (CAR.UN) Company Description:
Canadian Apartment Properties Real Estate Investment Trust, or CAPREIT, is a real estate investment trust primarily engaged in the acquisition and leasing of multiunit residential rental properties located near major urban centers across Canada. The company’s real estate portfolio is mainly composed of apartments and townhouses situated near public amenities. Most of CAPREIT’s holdings are aimed towards the midtier and luxury markets in terms of demographic segments. The company derives nearly all of its income in the form of rental revenue from leasing its properties to tenants. The majority of this revenue comes from assets located in the Greater Toronto and Greater Montreal regions. The buildings in these areas also contain the majority of CAPREIT’s total housing units.