Q: Is there any news on Granite REIT or is it falling due mostly due to expectations of rising interest rates? It appears to have dropped below any recent support levels. Being down 15% in my holding, is now the time to add more or perhaps move out of REITs all together towards another sector (which) or another REIT (say DIR.un)?
5i Research Answer:
GRT hasn't really had any recent material news. It did a bond offering recently, and a couple of brokers lowered their target prices. At 12x cash flow it remains attractive on valuation. Down 8% this year, it has frankly held up better than most in 2023. Its key tenant, Magna, is expected to see a recovery in 2024. We think the sector will do better now that rates do indeed seem to be peaking. We like DIR.UN, but would see no compelling reason to bail on GRT today.