Opinions Andrew Moffs
Canadian Apartment PropertiesCAR.UN.TOHOLDSep 27, 2023
Andrew MoffsStock price when the opinion was issued
As of Jun 22, 2026. Market Open.
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Rental market in Canada is tight with new immigration and challenged supply. Housing market remains less affordable, so people are more inclined to rent. Interest rate headwind, but starting to stabilize. Selling mature properties to reduce rent control caps. Well positioned.
Christine Poole
It has pulled back with interest and bond yields.The apartment rental space is tight and demand is high. Since it is very difficult to buy a home now, there is less incentive for people to stop renewing so they are not getting double digit rent increases. However there are still good fundamentals in the Canadian market with the huge immigration flow into Canada. It hasn't been increasing its dividend for a while but is buying back stock.
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Premium contentOur PAST TOP PICK with CAR.UN has triggered its stop at $47. To remain disciplined, we recommend covering the position at this time. This will result in a net investment gain of 11%, when combined with our previous recommendations.
Rents are rising like crazy. CAR.UN holds a blend of rent-controlled and not-controlled apartments. They can also build units. He expects city governments will face enough pressure to chance zoning laws and allow apartment buildings. Pays a decent dividend and run by superb managers.
David BaskinPremium contentLast August, the housing market was probably going to correct as rates rose. The housing market corrected and is now stabilizing. Now, there's an immigration boom into Canadian, so rent growth and demand will remain strong. He sees growth ahead.
Andrew PyleBought this a year ago. There's a chronic undersupply of Canadian housing that will benefit CAP REIT. Shares pulled back last year due to rising interest rates. Also, Ottawa wants to boost immigration by 500,000 over the next few years that will drive demand. CPA REIT is selling older properties and buying luxury apartment buildings that don't have rent control. The dividend is around 3%. Good long-term growth.
(Analysts’ price target is $56.36)Christine PooleYou won't go wrong with either. Thinks highly of management for both. Both are concentrated in Ontario. IIP.UN is smaller, more nimble, with a focus on Toronto-Ottawa-Montreal and a growing presence into Vancouver. CAR.UN gives exposure to GTA and across Canada. If he had to choose, he'd pick IIP.UN with its 25% discount to private market value, lots of value in the portfolio.
Premium contentPremium contentCAP REIT pays 3.4% dividend yield at a safe, low 50% payout ratio, and last month the REIT also paid a special distribution. It trades at 14.84x earnings, a premium over Killam Apartment REIT (9.04x). Casting a shadow over residential REITs is the pledge of Prime Minister Trudeau, made in August 2021 during that election campaign to impose rent controls to solve the country's housing affordability crisis. So far, Ottawa has only threatened to review the tax treatment of REITs and actually hasn't done anything.
Premium contentDavid Baskin
Both are quality. Likes both sectors. Likes both, but if he had to choose, he'd pick GRT.UN.
In Quebec and BC, but CAR.UN is mainly a play on Toronto, a fantastic multi-family market, but there is rent control. Great supply/demand fundamentals, but hard to get the cashflow. Outperformed peers, so pullback is understandable.
Industrial warehouse sector continues to do quite well. GRT.UN focuses on Canada, US, and Europe, trading at a nice discount to NAV. Underperformed, not warranted. Concern about oversupply in US, but he thinks they're in a good position.