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Choice Properties Real Estate Investment Trust (TSE:CHP.UN)
TSX:CHP.UN
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Choice Properties Real Estate Investment
(TSX:CHP.UN)
72Outperform
Positive Factors
Dividend Increase
The REIT announced an increase of distributions to $0.77 per unit, up from $0.76 previously, marking an increase of 1.3%.
Financial Performance
Choice Properties REIT reported financial results that were in line with expectations, highlighted by strong operating performance from its industrial portfolio and improving metrics from the retail portfolio.
Growth Opportunities
CHP has cited a deal pipeline of ~$350M, including significant industrial opportunities, indicating potential for external growth.
Negative Factors
Interest Expenses
Greater interest expense from refinancing maturing debt at higher interest rates impacts results.
Occupancy Rates
Total occupancy ended Q424 at 97.6%, which was a decline compared to the previous quarter and year.
Choice Properties Real Estate Investment (CHP.UN) vs. S&P 500 (SPY)
Market Cap
$10.10B
Dividend Yield5.73%
Average Volume (3M)455.55K
Price to Earnings (P/E)12.9
Beta (1Y)0.91
Revenue Growth2.51%
EPS Growth-1.55%
CountryCA
Employees285
SectorReal Estate
Sector Strength67
IndustryREIT - Retail
Share Statistics
EPS (TTM)1.08
Shares Outstanding328,024,260
10 Day Avg. Volume397,306
30 Day Avg. Volume455,546
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)3.34
Price to Cash Flow (P/CF)4.70
P/FCF Ratio1.90
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
C$15.50Price Target Upside11.05% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering6
Choice Properties Real Estate Investment Business Overview & Revenue Model
Company DescriptionChoice Properties Real Estate Investment Trust (CHP.UN) is a Canadian real estate investment trust focused on owning, managing, and developing a high-quality portfolio of commercial properties. The company's portfolio includes retail properties, industrial properties, and residential developments, with a significant portion leased to Loblaw Companies Limited, providing a stable income stream. As one of Canada's largest REITs, Choice Properties prioritizes creating long-term value through strategic asset management and development initiatives.
How the Company Makes MoneyChoice Properties makes money primarily through rental income from its extensive portfolio of commercial real estate properties. The key revenue streams include lease agreements with tenants, with a substantial portion of rental income coming from long-term leases with Loblaw Companies Limited, a leading Canadian retailer. Additionally, the company generates revenue through property development projects, where it develops new properties or redevelops existing ones to enhance value and attract new tenants. Strategic partnerships and joint ventures also contribute to its earnings, allowing the company to leverage expertise and resources to optimize property management and expansion efforts. The trust's focus on high-quality assets and strong tenant relationships underpins its financial performance and growth prospects.
Choice Properties Real Estate Investment Financial Statement Overview
Summary
Choice Properties Real Estate Investment demonstrates a solid financial position with strong cash flow and decent profitability metrics. There is significant leverage, but the company manages its debt well. Variability in certain income statement metrics and reliance on debt should be monitored. Overall, the company is financially stable with room for improvement in profitability consistency.Income Statement
The company has demonstrated stable revenue with fluctuations over the years. The gross profit margin is healthy, but recent net profit margins have shown some variability. The EBIT margin was not calculated for the latest year, possibly affecting profitability assessment. However, EBITDA margin remains strong, indicating good operational performance.70
Positive
Balance Sheet
The company maintains a solid equity base relative to its assets, with an equity ratio indicating reasonable leverage. However, the debt-to-equity ratio suggests a significant reliance on debt, which could be a risk if interest rates rise. Return on equity has improved, suggesting better utilization of shareholder funds.68
Positive
Cash Flow
Operating cash flows are robust, and the free cash flow has shown growth in recent periods, indicating strong cash generation capabilities. The operating cash flow to net income ratio is favorable, suggesting that earnings are well-supported by cash flows.75
Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 1.37B | 1.43B | 1.26B | 1.29B | 1.27B | Gross Profit |
| 978.57M | 1.04B | 900.64M | 912.01M | 886.60M | EBIT |
| 0.00 | 976.39M | 1.23B | 954.61M | 852.96M | EBITDA |
| 1.37B | 1.14B | 1.28B | 956.90M | 981.61M | Net Income Common Stockholders |
| 784.44M | 796.69M | 744.25M | 23.01M | 450.69M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 63.39M | 252.42M | 64.74M | 84.30M | 207.22M | Total Assets |
| 17.56B | 17.31B | 16.82B | 16.17B | 15.65B | Total Debt |
| 6.68B | 6.70B | 6.55B | 6.23B | 6.49B | Net Debt |
| 6.62B | 6.44B | 6.49B | 6.15B | 6.41B | Total Liabilities |
| 12.66B | 12.94B | 13.00B | 12.86B | 12.12B | Stockholders Equity |
| 4.90B | 4.37B | 3.82B | 3.31B | 3.51B |
| Cash Flow | Free Cash Flow | |||
| 724.73M | 641.97M | 1.01B | 773.41M | 507.76M | Operating Cash Flow |
| 724.73M | 641.97M | 633.15M | 669.43M | 621.18M | Investing Cash Flow |
| -584.21M | -361.35M | -616.73M | -64.12M | 155.19M | Financing Cash Flow |
| -329.56M | -92.94M | -35.99M | -728.22M | -611.15M |
Choice Properties Real Estate Investment Technical Analysis
Positive
13.96
Price Trends
13.48
Positive
13.48
Positive
13.60
Positive
Market Momentum
0.07
Positive
51.95
Neutral
24.51
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:CHP.UN, the sentiment is Positive. The current price of 13.96 is above the 20-day moving average (MA) of 13.91, above the 50-day MA of 13.48, and above the 200-day MA of 13.60, indicating a neutral trend. The MACD of 0.07 indicates Positive momentum. The RSI at 51.95 is Neutral, neither overbought nor oversold. The STOCH value of 24.51 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for TSE:CHP.UN.
Choice Properties Real Estate Investment Peers Comparison
Overall Rating
UnderperformOutperform
Sector (61)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
76 Outperform | C$4.30B | 19.01 | 4.50% | 7.33% | 9.46% | -42.77% | |
72 Outperform | $10.10B | 12.88 | 16.69% | 5.73% | 2.51% | -1.55% | |
68 Neutral | $5.11B | 10.92 | 6.34% | 6.72% | 11.62% | 1120.60% | |
64 Neutral | $8.73B | 39.06 | 14.89% | 0.25% | 13.08% | 146.40% | |
63 Neutral | C$2.63B | ― | -2.29% | 5.99% | -6.92% | -310.05% | |
61 Neutral | $4.71B | 17.90 | -2.95% | 11.43% | 5.98% | -21.59% | |
53 Neutral | $2.34B | ― | -5.79% | 11.30% | 4.98% | 19.54% |
* Real Estate Sector Average
Performance Comparison
TSE:CHP.UN
Choice Properties Real Estate Investment
13.96
1.06
8.19%
TSE:REI.UN
RioCan Real Estate Investment
17.20
-0.25
-1.43%
TSE:CIGI
Colliers International Group
172.45
10.64
6.58%
TSE:AP.UN
Allied Properties Real Estate Investment Trust
16.61
0.80
5.07%
TSE:SRU.UN
SmartCentres Real Estate Investment Trust
25.26
3.81
17.76%
TSE:HR.UN
H&R Real Estate ate Staple
9.99
1.54
18.22%
Choice Properties Real Estate Investment Earnings Call Summary
Earnings Call Date: Feb 12, 2025 | % Change Since: 5.53% | Next Earnings Date: Apr 23, 2025
Earnings Call Sentiment Positive
The earnings call highlighted strong financial and operational performance with stable occupancy rates, successful real estate transactions, and significant developments. However, challenges were noted in specific projects such as the Golden Mile redevelopment and potential impacts from tariff concerns. Overall, the positive aspects significantly outweigh the challenges.Highlights
Strong Financial Performance
Choice Properties Real Estate Investment Trust reported funds from operations (FFO) for the fourth quarter of $188.2 million or $0.26 per unit, reflecting a 2% increase from the fourth quarter of 2023.
High Occupancy Rates
The portfolio maintained stable occupancy at 97.6% for the fourth quarter, with strong tenant retention and leasing activity across asset classes.
Successful Real Estate Transactions
Completed approximately $425 million in real estate transactions for the year, including $260 million of acquisitions and $165 million of dispositions.
Retail and Industrial Growth
Retail same-asset NOI increased by 2.3% and industrial same-asset NOI increased by 6.4%, driven by higher base rents and leasing activity.
Positive Development Pipeline Progress
Added approximately $300 million of high-quality real estate to the portfolio, with significant developments in retail and industrial sectors.
Distribution Increase
The Board of Trustees has approved the third consecutive annual distribution increase effective March 2025, demonstrating commitment to growth sharing with unitholders.
Lowlights
Golden Mile Redevelopment Project Paused
The Golden Mile redevelopment project was paused due to increased site servicing costs and a partner's decision not to proceed, presenting challenges in project viability.
Negative Absorption in Leasing
Experienced negative absorption of 105,000 square feet in leases during the quarter, attributed to vacancies in the Ontario retail and Atlantic industrial portfolios.
Potential Tariff Impacts on Industrial Portfolio
Concerns about potential tariffs affecting the industrial portfolio, though no immediate significant impact is expected.
Company Guidance
During the Choice Properties Real Estate Investment Trust's Q4 2024 earnings call, the company provided several key metrics and guidance for the upcoming year. Choice Properties reported a stable portfolio occupancy rate of 97.6% and achieved a tenant retention rate of 77% with an average rent spread of 21.6% on renewals. The company completed $425 million in real estate transactions throughout the year, including $260 million in acquisitions and $165 million in dispositions. For 2025, Choice Properties anticipates 2% to 3% year-over-year growth in same-asset cash NOI and FFO per unit growth of $1.05 to $1.06. The company expects to maintain a debt-to-EBITDA ratio below 7.5x and plans to focus on advancing its industrial development at Choice Caledon Business Park and its retail intensification program.Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.