A spate of successful financings by Canadian real estate investment trusts bodes well for unit prices in the sector, according to Canaccord Adams analyst Shant Poladian.
Mr. Poladian said in a note to clients:
“Following what has been almost a 12-month deep freeze in capital markets for Canadian REITs, there were several recent announcements suggesting that signs of thawing are emerging in accessing debt and equity.”
The analyst pointed out that RioCan REIT (OTCPK:RIOCF) issued a five-year C$180 million senior unsecured debentures with an interest rate of 8.33% while H&R REIT last week was able to secure C$425-million in construction financing for The Bow — the new Calgary headquarters of EnCana Corp (NYSE:ECA).
Mr. Poladian said:
“To the extent that debt and equit markets continue to open up, we believe that REIT valuations could be poised for continued improvement, as fears regarding access to capital begin to dissipate.”