H&R REIT $21.86 (Toronto symbol HR.UN; Units outstanding: 272.4 million; Market cap: $6.0 billion; TSINetwork Rating: Extra Risk; Dividend yield: 6.2%; www.hr-reit.com) owns stakes in 41 office buildings, 112 industrial properties and 168 shopping malls across Canada.
In March 2013, H&R finished building the Bow, a $1.33-billion, two-million-square-foot office complex in Calgary. Encana Corp. has leased the entire building for 25 years.
In April 2013, H&R completed a $3.1-billion purchase of 27 properties from Primaris REIT. These assets include the 567,000-square-foot Dufferin Mall in Toronto’s west end.
H&R has now entered into a 50% partnership with U.S. real estate firm Tishman Speyer to develop an $875-million luxury residential rental development in Long Island City, New York. The site is located next to H&R’s 2 Gotham Center office property.
In the quarter ended June 30, 2014, H&R’s revenue rose 3.7%, to $304.9 million from $294.1 million a year earlier. Cash flow per unit gained 4.4%, to $0.47 from $0.45. The trust has a 97.9% occupancy rate.
The units trade at 11.8 times H&R’s forecast 2014 cash flow of $1.86 a unit. The trust pays a monthly distribution of $0.1125 a unit, for a 6.2% yield.
H&R REIT is a buy.
