Riocan (Symbol-REI.UN)

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Re: Riocan (Symbol-REI.UN)

Post by petfiora »

Will riocan reduce dividend??
Is it now a buy.
It's been pretty dam good to me over the years.
Any opinions//
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Re: Riocan (Symbol-REI.UN)

Post by Shakespeare »

Any opinions//
Tough year takes toll on RioCan
Results mean that RioCan has a distribution payout ratio of 144 per cent of funds from operations, calculated Shant Poladian, an analyst with Canaccord Adams Inc., who rates the trust a "hold."

"Will the distribution be cut? We do not expect so given that the shortfall is small when taken in the context of the overall value of the REIT's portfolio," Heather Kirk, an analyst with National Bank Financial, wrote in a research note.
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ThinkDividends
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Re: Riocan (Symbol-REI.UN)

Post by ThinkDividends »

Neil Downey @ RBC forecasts that it will take more than two years for RioCan to grow into its distribution.

I posted his chart on my blog: http://www.thinkdividendsblog.com/2010/ ... ution.html
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2 yen
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Re: Riocan (Symbol-REI.UN)

Post by 2 yen »

So why should one continue to hold this stock as part of an income producing portfolio? Seems to me that the high payout ratio, that has continued for some time now, is a massive red flag. No?
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Re: Riocan (Symbol-REI.UN)

Post by 2 yen »

Is there a deafening silence surrounding the recent poor results from Riocan or have investors simply justified the high payout ratio by saying, well, the underlying portfolio is so huge that paying out more than 100% of income is ok for the time being?
I don't get it.
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Re: Riocan (Symbol-REI.UN)

Post by MaxFax »

I made an analysis of the Riocan fundamentals available on this spreadsheet.
I owned and held this company for about 20 years before selling a few years ago. What you owned in the past was completely different from what you own now.
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Re: Riocan (Symbol-REI.UN)

Post by angelocardoc »

I'm anxiously waiting to read other peoples insight into this REIT.

It seems that nobody is commenting because,
it's such a boring company or people aren't quite sure where they stand on REI.UN

Maybe we could do a 'yay or nay' comparison of some other real estates

REI.UN EPS 0.50 Dividend / yr. $ 1.38
CWT.UN EPS 0.29 Dividend / yr. $ 1.548
REF.UN EPS 1.44 Dividend / yr. $ 1.38
MRT.UN EPS 0.51 Dividend / yr. $ 0.90
HR.UN EPS 0.21 Dividend / yr. $ 0.72

I don't know enough, so I rely on the vast knowledge that you all bring forward.
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Re: Riocan (Symbol-REI.UN)

Post by ThinkDividends »

angelocardoc wrote:
REI.UN EPS 0.50 Dividend / yr. $ 1.38
CWT.UN EPS 0.29 Dividend / yr. $ 1.548
REF.UN EPS 1.44 Dividend / yr. $ 1.38
MRT.UN EPS 0.51 Dividend / yr. $ 0.90
HR.UN EPS 0.21 Dividend / yr. $ 0.72

I don't know enough, so I rely on the vast knowledge that you all bring forward.

EPS and PE Ratios are MEANINGLESS for REITs... It is all about AFFO (Adjusted Funds From Operations) that is where your distribution (dividend) comes from. AFFO is measure of Cash Flow for Real Estate companies.

EPS means nothing.... REITs are have lots of depreciation on their Income Statements.... Depreciation is a non-cash charge... EPS is not a true measure of a REIT's health. Capex is part of AFFO.

http://www.thinkdividendsblog.com/2010/ ... ution.html
Last edited by ThinkDividends on 18 Feb 2010 18:08, edited 1 time in total.
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active
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Re: Riocan (Symbol-REI.UN)

Post by active »

[quote]Depreciation is a non-cash charge[/quote]

Yes.

But it isn't a charge that the good lord sent from above to reduce taxes, just for the fun of it. There is an underlying expense at one time and a replacement expense at another time.

Short term this is a valid view, long term even a REIT should live within its means.

Retail vacancy is still rising. Percentage rent stops at minimum rent level. Retailers go broke. A prudent management allows for that in a recession and if needed cuts back the distribution. Pretending everything is just fine does not help the REIT long term.
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Re: Riocan (Symbol-REI.UN)

Post by Arby »

active wrote: Retail vacancy is still rising. Percentage rent stops at minimum rent level.
Your statements don't agree with Riocan's latest quarterly report. According to Riocan's report, their vacancy rate dropped in 2009 as compared to 2008, and rents increased in 2009 compared to 2008.
...The portfolio committed occupancy rate was approximately 97.4% compared to 96.9% as at December 31, 2008
....For the year ended 2009, approximately 2.7 million square feet were renewed at an average rent increase of approximately 7% ..
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Re: Riocan (Symbol-REI.UN)

Post by MaxFax »

ThinkDividends wrote:EPS and PE Ratios are MEANINGLESS ....EPS means nothing.... EPS is not a true measure of a REIT's health.
The metrics are not meaningless. They measure exactly what they measure. You are perfectly free to make whatever adjustments to the reported numbers you think appropriate. Personally I think the 'true' depreciation is about half the currently required rate....so I make that adjustment.

Cash flow and profitability are two different issues. You cannot use a measure of one to come to any conclusion about the other.

No one should tell you to "ignore' one. Since you are picking stocks you are matching your wits against the other market players. Know that a lot of investors DO ignore profitability measures, and make sure you incorporate their behaviour in your own evaluation of both the company and the stock price. Doing what everyone else does will only result in your coming to the same conclusions as theirs --- following the market. You might as well buy an index ETF.
active wrote: Retail vacancy is still rising.
IMO these kinds of metrics can be very misleading. Better to measure revenues directly from the Income Statement on a 'per square foot' basis. And then separately track the 'square foot per share' metric. Both have been terrible over time for Riocan.
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Re: Riocan (Symbol-REI.UN)

Post by GemInite »

Can someone explain how REIT's work or link me to another site where I can read about them?

I'm interested in XRE but I have noticed the higher MER% as well others have stated REI.UN is about 40% of XRE so it might be better if I purchased just a few REIT's instead.

I found this thread but it's quite dated

http://www.financialwisdomforum.org/for ... re#p176706

Basically, I'm wondering, how do they make profit? E.g. is it just from rent? So does that mean in theory if rents are down then the etf will not do as well?

What if there is a housing crash in Canada again how would REIT's be affected?

Anything else I should look for while I research?
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Re: Riocan (Symbol-REI.UN)

Post by AltaRed »

If you do a Search on REIT, you will find multiple threads, including some generic stuff.

REITs make money from leasing revenue AND capital gains from buying/selling. One can assume leasing revenue can go down when/if rent renewals are lower, and/or there is increased vacancy. However, you have to first determine which kind of REIT you are interested in, e.g. residential leasing, commercial (hotel, retail, office, industrial, etc.), government, etc. They could move in different directions.
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Re: Riocan (Symbol-REI.UN)

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"Can someone explain how REIT's work" They work much the same way you would understand it if you personally bought (say) a rental apartment building. There are operating costs to be paid for out of monthly rents giving you net operating profits. The rents usually rise slowly over time. The costs can change quicker (eg) when heating oil prices rise.

A lot of the returns from real estate come the high leverage, just like when you buy you own home. Compare the operating profits (as percent of cost) against the interest rate % of their debt. The closer the two rates, the more risky the returns and more likely leverage will start to work AGAINST profits. The specter of rising interest rates doing just that is what making REITs a very speculative purchase right now.

Profits from capital gains on the price appreciation of real estate is what has driven up the stock prices recently. But realize that may not continue, and that unrealized capital gains don't help anyone until the ppty is actually sold.
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Re: Riocan (Symbol-REI.UN)

Post by angelocardoc »

RioCan Real Estate Investment Trust (“RioCan”) (TSX:REI.UN) announced today that it has reached an agreement with a syndicate of underwriters co-led by RBC Capital Markets, TD Securities Inc. and BMO Capital Markets to issue to the public, subject to regulatory approval, 6,000,000 trust units (the “Units”) for $20.75 per Unit for gross proceeds of $124,500,000. RioCan has also granted the underwriters an option, exercisable at any time up to 48 hours prior to the closing of the offering, to purchase a further 1,200,000 units at the issue price which, if fully exercised, would result in additional gross proceeds of $24,900,000.
RioCan will use the proceeds from this equity offering to enhance its liquidity for property acquisitions, to fund development and for general trust purposes.
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Re: Riocan (Symbol-REI.UN)

Post by Peculiar_Investor »

According to Target to close all 133 Canadian stores, gets CCAA protection - Business - CBC News
CBC wrote:A large number of Target's locations are owned by Toronto-based RioCan Investment Trust.
RioCan's stock price took a hit this morning. To try and understand the potential impact, I googled and found RioCan’s Real Estate Property Facts which indicates that as of March 31, 2014, Target was their 7th largest source of revenue and represents 2.1% of their annualized rental revenue.

RioCan is scheduled to release its financial results for the three months and year-ended December 31, 2014 prior to the market open on Friday, February 13, 2015, when I'd expect more information about the impact will be revealed.
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Re: Riocan (Symbol-REI.UN)

Post by Arby »

Peculiar_Investor wrote:... Target was their 7th largest source of revenue and represents 2.1% of their annualized rental revenue.
The figure of 2.1% is Riocan's combined exposure in Canada and USA. Riocan's exposure to Target stores in Canada may be lower, as some of the stores might be located in Riocan malls in the USA.
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Re: Riocan (Symbol-REI.UN)

Post by Bylo Selhi »

Peculiar_Investor wrote:Target was their 7th largest source of revenue and represents 2.1% of their annualized rental revenue.
REI.UN is down about 3%. That suggests the market believes (a) there's no obvious retailer in the wings to take over the leases and (b) these properties could be unrented for years to come.
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Re: Riocan (Symbol-REI.UN)

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I agree with the suggestion that (a) there's no obvious retailer in the wings to take over the leases and (b) these properties could be unrented for years to come. Riocan was able to recover nicely from the closure of Zellers back in 2011, but I think it will be more difficult to recover from the departure of Target. In 2011, Zellers continued to operate and pay rent until their leases were taken over by Target, or until the lease expired. Target is filing for creditor protection, so I'm not sure if they will honour their leases. Walmart may take over a few of Target's leases, but I think Walmart already picked up the locations they were interested in from Zellers back in 2011.

Even with today's price decrease, Riocan is still near it's 52 week high, so I decided to take my profits and sell Riocan. I'm afraid the price will drop even lower once the analyst's reports come out tomorrow. I still like Riocan's long term prospects, and will probably buy back in when the full impact of the Target departure has been factored into Riocan's share price.
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Re: Riocan (Symbol-REI.UN)

Post by AltaRed »

I have been a long time holder, about 15 years I believe, and will continue to hold. No reason to worry about blips. Whatever space cannot be re-leased will be re-purposed, perhaps even condos, or suites above bay retail.
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Re: Riocan (Symbol-REI.UN)

Post by Shakespeare »

Old folk's homes - to take a trip to the mall you just go out the side door. :rofl:
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Re: Riocan (Symbol-REI.UN)

Post by Arby »

From Riocan's press release this afternoon:
RioCan has twenty-six locations that are currently leased by Target representing 1.9% of total annualized rental revenue at an average lease rate of $6.62 per square foot with an average remaining lease term of approximately 12.7 years. These leases are guaranteed by Target Canada Corporation's US parent, generally for the remaining terms of the leases.
Maybe it won't be as bad as I thought.
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Re: Riocan (Symbol-REI.UN)

Post by mrPPincer »

I sold @28.5, being slightly overweight in reits & cdn equity according to my current allocations, seemed a reasonable place to exit, & rebuy later, we'll see how this plays out, probably just another dumb mistake, it is a solid stock, & maybe shoulda left it alone, time will tell.

Did a little more rebalancing in the process, switched some tdb907 & tdb902 for tdb900, would have done the same with some tdb906, but missed the 3pm EST deadline for the TDIS mutual fund acct.

Will be interesting to see what happens over the next few business days with REI.UN.
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Re: Riocan (Symbol-REI.UN)

Post by Bylo Selhi »

Shakespeare wrote:Old folk's homes - to take a trip to the mall you just go out the side door. :rofl:
I can beat that. On the main drag here (King St S between William and Allen) there are, in order, a Chartwell REIT retirement home, a funeral home and a craft brewery with a special events lounge. So when a resident of the retirement home dies their remains don't have to be moved very far and later after the funeral the assembled multitude can head next door for the wake.
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Re: Riocan (Symbol-REI.UN)

Post by jaguar »

What retailer would want to rent space in a mall without an anchor tenant where the last two anchor tenants failed?
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