October 8, 2019

Oct 09 23:10 2019 Print This Article

Here’s a sign of the times:

The latest property owner to attempt an initial public offering is aiming to pay an annual yield around 2 per cent, an uncommonly low rate that illustrates the heavy demand for Canadian apartment buildings.

Late last week, Toronto-based Continuum Residential Real Estate Investment Trust filed the paperwork for its IPO. According to two people familiar with the offering, the issuer is looking to raise $300-million and would pay investors 2 per cent annually if its units are priced at the mid-point of their marketing range.…Amid such heavy demand, Minto Apartment REIT was able to go public in 2018 at a 2.8-per-cent yield and, 16 months later, Continuum is targeting an even lower level.…Continuum’s bet reflects the conditions of the current market. Canadian Apartment Properties REIT, the country’s largest publicly traded rental-unit owner, now trades at a 2.4-per-cent yield, and Minto’s units have performed so well since the REIT’s IPO that they now yield 1.9 per cent.

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PrefBlog

PrefBlog is presented as a public service by Hymas Investment Management Inc., Manager / Trustee of Malachite Aggressive Preferred Fundand publisher of PrefLetter, a monthly newsletter directed towards long term buy-and-hold retail investors. James Hymas, president of Hymas Investment Management Inc, with years of experience designing quantitative investment technology and applying this technology to conservative portfolios, seeks to provide institutions and retail investors with the information and advice necessary to produce top quartile returns in the preferred share market without the assumption of excess risk.

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