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Desjardins Securities analyst Jeff Roberts doesn’t believe in real estate these days but says if you must buy some Calloway Real Estate Investment Trust (OTC:CWYUF) is a good bet.

Mr. Roberts said in a note to clients:

Calloway REIT’s units represent the best value in the segment. We believe that its largely new-format, Wal-Mart (WMT) anchored shopping centres should weather this deep recession better than almost all its peers, and that its financing obligations are manageable.”

The analyst said the company’s fourth quarter results were better than expected but he still lowered his net asset value for Calloway because of falling real estate prices.

He also lowered his 12-month target price from C$13.75 to C$13 but said the REIT’s units are still trading at 29% discount to NAV.

Mr. Roberts said Calloway’s “finances are tight” but can be managed. “The cushion of the REIT’s free cash flow above its current distribution will shrink, but its distribution should be safe through 2010,” he said.

Source: Calloway REIT the Best Bet in Real Estate - Desjardins