H&R REAL ESTATE INVESTMENT TRUST $23.16 (Toronto symbol HR.UN; Units outstanding: 157.3 million; Market cap: $3.6 billion; TSINetwork Rating: Extra Risk; Dividend yield: 4.8%; www.hr-reit.com) owns stakes in 39 office buildings, 117 industrial properties and 133 retail properties across Canada. H&R has a 98.9% occupancy rate.
In the three months ended September 30, 2011, the REIT’s revenue rose 11.0%, to $169.6 million from $152.8 million a year earlier. Cash flow per unit rose 5.7%, to $0.37 from $0.35.
H&R is nearly finished building The Bow, a $1.33-billion, two-million-square-foot office building in Calgary. Encana Corp. has already leased the entire building for 25 years.
The REIT recently made two major purchases in the U.S. In October 2011, it bought Two Gotham Center in New York City for $415.5 million U.S. The newly built, 22-storey tower is leased to the City of New York for 20 years.
In December 2011, H&R bought the Hess Tower in Houston for $442.5 million U.S. This 29-storey tower, which was completed in June 2011, is fully leased to the Hess Coporation. Two Gotham and the Hess Tower are H&R’s largest acquistions to date.
The REIT raised its yearly distribution by 4.8%, to $1.10, in January 2012. It will continue to raise its distributions every quarter until the annual rate reaches $1.25 in the fourth quarter of 2012.
H&R REIT is still a buy.
