Q: Could you compare DIR.UN and NXR.UN?
5i Research Answer:
Both REITs focus mainly on industrial properties.
DIR.UN is trading at 0.8x Price/Book, net debt is around $2.8B, and net debt/EBITDA is approximately 10.6x, the current yield is around 5.25%.
NXR.UN is trading at 0.8x Price/Book, and net debt of $1.2B, net debt/EBITDA is around 12.6x, the current yield is around 8.3%.
We still prefer DIR.UN, the company is better run with a stronger balance sheet, and we like the fact that DIR.UN stops issuing units to acquire properties as the unit price drops while NXR.UN continues to do so, which dilutes shareholders. NXR is cheaper, but DIR has dramatically outperformed it over the past couple of years and YTD. We just see it (DIR) as a better-managed company.