ALLIED PROPERTIES REAL ESTATE INVESTMENT TRUST $34.30 (Toronto symbol AP.UN; Units outstanding: 77.9 million; Market cap: $2.7 billion; TSINetwork Rating: Extra Risk; Dividend yield: 4.3%; www.alliedreit.com) owns 146 office buildings, mostly in major Canadian cities. These mainly Class I properties contain over 10.5 million square feet of leasable area. Class I refers to 19th- and early-20th-century industrial buildings that have been converted to retail space. They usually feature exposed beams, interior brick and hardwood floors.
Allied spent $400 million acquiring properties in 2012, $182.4 million in 2013 and $234.9 million in 2014. In the first half of 2015, it added three more for $136.1 million.
The new buildings helped raise the trust’s revenue by 13.0% in the quarter ended June 30, 2015, to $91.1 million from $80.6 million a year earlier. Cash flow rose 19.0%, to $42.0 million from $35.3 million. Cash flow per unit gained 5.9%, to $0.54 from $0.51, on more units outstanding.
The units trade at 15.3 times Allied’s forecast 2015 cash flow of $2.24 a unit. They yield 4.3%.
Allied Properties REIT is a buy.
