New developments set to spur cash flow

Article Excerpt

ALLIED PROPERTIES REAL ESTATE INVESTMENT TRUST $47.57 (Toronto symbol AP.UN; Units outstanding: 103.9 million; Market cap: $5.0 billion; TSINetwork Rating: Extra Risk; Dividend yield: 3.4%; owns 151 office buildings, mainly in major Canadian cities. Most of those are classified as Class I buildings. Together, they comprise over 11.2 million square feet of leasable area. The REIT’s occupancy rate is 96.7%. Class I refers to 19th- and early-20th-century industrial buildings that are now used as office space. They often have exposed beams and brick walls, and hardwood floors. Allied continues to grow steadily by acquisition. In 2017, it spent $122.7 million on six properties. In 2018, it spent $143.4 million on 11 more buildings. Altogether, new properties helped raise the trust’s revenue by 4.1% for the quarter ended December 31, 2018, to $112.9 million from $107.7 million a year earlier. Cash flow per unit rose 6.1%, to $0.43 from $0.41. The REIT now aims to expand mostly by developing new properties and intensifying existing ones. It…

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