Q: The REIT has made an offer to purchase 12,500,000 units at 15.50 dollars per unit. It represents about 25% of the total REIT issued units. Since the price offered is much lower then my purchased price and the stock is held in a register account I do not feel too compelled to sell it. You have indicated in the past that the REIT is a valuable asset and likely with time it will recover.Is this still the opinion you hold ? Is the dividend would remain to be paid after such transaction by the REIT?
Thank you
Thank you
5i Research Answer:
Yes. While occupancy is low (80%) and investors do not like office exposure right now, this is largely reflected in the low valuation of 9X cash flow. D.UN is selling units of DIR.UN to pay for the offer, and is buying below asset value. D.UN also declared a $4.55 special distribution. No change in the distribution is planned following the offer While its small size and real estate exposure are of course risks, we think HOLDing is the best strategy today.