BMO Analyst is Cautious About Canadian Real Estate, Updates Top Picks

BMO Analyst is Cautious About Canadian Real Estate, Updates Top Picks

Daily research and analysis roundup from Scott Barlow, Market Analyst at Globe and Mail

BMO analyst Jenny Ma takes a more cautious view of the Canadian real estate sector,

“Canadian real estate: Shifting to a more conservative stance. Given the myriad new risks that have emerged, in our view, investors should take a bottom-up approach to investing in Canadian REITs in the second half of 2022. Characteristics to look out for About them are strong cash flow growth profiles (to outpace inflation in operating costs and higher interest expenses), weighted average of longer debt terms (to limit exposure to higher interest rates), discount valuations in the form of lower multiples and deeper net asset discounts (to reduce the downside) We are changing our preferences to reflect a more conservative view Our scrolling order of asset classes is: diversified commercial (to protect value and downside), multi-family (for current valuation that reflects a certain degree of cap rate expansion and regulatory risk, and a long robust growth profile term), retail (for moderate valuation but steady growth).Our top picks for individual REITs are H&R REIT (HR.UN-TSX; $13.77; OP), InterRent REIT (IIP.UN-TSX; $13.83; OP) ), Minto Apa rtment REIT (MI.UN-TSX; US$18.60; OP), Crombie REIT (CRR.UN-TSX; $17.26; OP) and RioCan REIT (REI.UN-TSX; $22.68; OP) … to date, Canadian REITs under coverage have recorded an average Simple total return of -5.6% while S&P/TSX REIT cap index is -9.2%. “

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Bank of America Securities analyst Ryan Greenwald reported on electric vehicle sales forecast research,

Wednesday morning, BNEF [Bloomberg New Energy Finance] They released their latest Long-Term Electric Vehicle Forecast in which they outline their updated forecast for how road transportation will evolve over the next 30 years. As has been consistent with each iteration, revisions in the 2022 report anticipate a much faster electrification transition than previously expected despite current NT supply challenges… In the US, BNEF now expects electric vehicles to be about 16.4% of electric vehicles. New passengers sold in 2025 and 43.6% in 2030 (versus 11.3% and 34.3% recently). Although there has been a significant year-over-year upward revision, this is still particularly shy of the 50% share of electric vehicle sales target set by the Biden administration by the end of the decade. Although electric vehicle penetration was only 1% of the total US passenger fleet in 2021, the revised sales forecast is expected to translate to 4.1% by 2025 (versus 2.9% previously). Even with near-term vehicle availability bottlenecks, passenger fleet penetration forecasts now reflect 1.5% and 2.1% for 2022-2023 (versus 1.2% and 1.7% previously). In Europe, sales penetration forecast is 39.1% by 2025 and 59.8% by 2035″

There are clear positive effects here for lithium, copper and nickel producers as well as select rare earth material suppliers.

BofA: “In the US, BNEF now expects electric vehicles to be about 16.4% of new passenger vehicles sold in 2025 and 43.6% in 2030” – (extract from research) Twitter

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Also from BMO, Economist Eric Johnson noted that US office vacancies remain low even though most of the country has returned to near-normal activity levels,

“With yards filling up, airports getting busier, and restaurants buzzing with activity, you would think that most other in-person activities would also return to pre-pandemic levels. However, that’s not the case when it comes to office occupancy in the United States. According to data from Kastle, the average ​​The 10 cities are only 43% for the same week in 2019 as of May 25. The data is not nationally representative, so take the exact level with a pinch of salt, but the trend speaks volumes for the impact of hybrid work on occupancy rather than rising above levels Pre-Omicron, occupancy has stabilized in the past few months.It is clear that hybrid business is not just about health concerns, it is a permanent preference on the part of workers.The result is that commercial properties may face a long-term adjustment process as leases come up for renewal in the coming years. “

Today, of course, I will be looking for the equivalent Canadian data.

BMO: The new standard for office occupancy? – (extract from research) Twitter

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the news: “These 10 Timeless Investment Rules Offer Guidelines for Today’s Markets” – Globe Investor

Transformation: “Man’s Eczema Was Actually Caterpillar Hair” – Gizmodo

Today’s tweet:

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2022-06-03 12:14:30

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