Can you also comment on their strategy? It seems given their focus on upscaling their building portfolio (ie recycling out older buildings and using their cash to buy newer properties), tail winds from housing shortages & immigration coupled with their focus on affordable housing (eg. mobile homes) could be good opportunities in the future.
CAR.UN operates as a REIT focusing on residential properties and is now trading at 0.8x its price/book multiple. Over the last few years, the company funded its growth mainly by issuing debt to acquire new properties. The balance sheet is highly leveraged, with a net debt of $7B and net debt/EBITDA currently around 11.3x. The company has been repurchasing shares recently, indicating that management believes shares are undervalued. The company could experience meaningful upside if rates peak and REIT assets become more valuable. CAR.UN is one of the stronger REITs, and while it is in the middle of some headwinds currently, it pays a decent yield and has been pivoting its strategy wisely.
Its strategic capital deployment opportunities include disposing of its non-core properties, some at a premium pricing, reinvesting in NCIB at significant discounts to NAV, and allocating excess funding toward repaying higher interest debt. It is also focusing on new construction apartments, in large, strong, and growing urban markets. We feel this is a smart move in the current environment, and is reflective of its solid management team.