With higher interest rates on the horizon, you will likely see the TSX real estate stocks on our list experience net asset values decreases, current liabilities increases
SmallCapPower | November 21, 2016: As the banks begin to one-by-one raise their mortgage rates, real estate companies that borrow will start to feel the pinch. Increasing mortgage rates will ultimately lead to larger current liabilities for real estate companies, and they’ll have to balance how much they pass down onto their tenants. If the real estate brokers tack on higher rental payments to cover their margins it may just push the small business owners out of the property. The TSX real estate stocks our on list today could both benefit and suffer from increased interest rates; those that provide brokerage and lending services may see their returns increase; however, the ones on the development side who use financing for their operations will certainly experience the downside of rate hikes.
Colliers International Group Inc. (TSE:CIGI) – $47.11Real Estate Services
Colliers International Group Inc. is engaged in the provision of commercial real estate services. The Company’s primary services are outsourcing and advisory services, lease brokerage and sales brokerage. It provides services for sales, leases and mortgages in various areas, such as landlord representation, tenant representation, and capital markets and investment services. The Company’s Outsourcing and Advisory Services Division provides corporate and workplace solutions; appraisal and valuation services; facility, property and asset management services; project management services, and research for commercial real estate clients.
- Market Cap: $1,756.43(mm)
- Net Asset Value – Actual (FY0, Millions, CAD): $207.99
- Total Current Liabilities (FQ0, CAD, Millions): $567.38
FirstService Corp. (TSE:FSV) – $55.49
Real Estate Services
FirstService Corporation is a provider of residential property management and other essential property services to residential and commercial customers. The Company’s operations are conducted in two segments: FirstService Residential and FirstService Brands. FirstService Residential is a property manager and provides a range of ancillary services primarily in various areas, including on-site staffing, including building engineering and maintenance, full-service amenity management, security, concierge and front desk personnel, and landscaping; banking and insurance products, and energy conservation and management solutions. FirstService Brands provides a range of property services through franchise networks and Company-owned locations.
- Market Cap: $1,997.59(mm)
- Net Asset Value – Actual (FY0, Millions, CAD): $232.55
- Total Current Liabilities (FQ0, CAD, Millions): $227.87
Mainstreet Equity Corp. (TSE:MEQ) – $33.00
Real Estate Rental, Development & Operations
Mainstreet Equity Corp. is a Canada-based real estate company that is focused on the acquisition, redevelopment, repositioning and management of mid-market rental apartment buildings in four Canadian markets: Vancouver/Lower Mainland, Calgary, Edmonton and Saskatoon. The Company’s wholly-owned subsidiary is Mainstreet Equity USA Corp.
- Market Cap: $294.85(mm)
- Net Asset Value – Actual (FY0, Millions, CAD): $620.41
- Total Current Liabilities (FQ0, CAD, Millions): $62.14
Tricon Capital Group Inc. (TSE:TCN) – $9.09
Real Estate Services
Tricon Capital Group Inc. is an asset manager and principal investor focused on the residential real estate industry. The Company operates through five segments. Through Tricon Housing Partners, its land and homebuilding investment vertical, it invests or co-invests in private commingled funds, separate accounts and sidecars. Tricon American Homes, its single-family rental home investment vertical, has an integrated platform responsible for the acquisition, renovation, leasing and property management of single family rental homes. Tricon Lifestyle Communities is focused on acquiring and managing existing three- to four-star manufactured housing communities. Tricon Luxury Residences, a multi-family build to core investment vertical, is focused on developing and managing a portfolio of Class A purpose-built rental apartments. Its Private Funds and Advisory business manages and originates investments through private commingled funds, separate accounts, side-cars or syndicated investments.
- Market Cap: $1,023.24(mm)
- Net Asset Value – Actual (FY0, Millions, CAD): $924.78
- Total Current Liabilities (FQ0, CAD, Millions): $301.79
