4 Small Canadian Real Estate Stocks Making Big Long-Term Gains

The TSX/TSXV-listed Canadian real estate stocks we’ve identified could be set to benefit from easing monetary conditions from central banks globally

SmallCapPower | January 27, 2020: As global central banks continue with monetary easing polices, real estate companies that borrow to fund acquisitions are set to benefit from lower rates. Decreasing mortgage rates will lead to lower costs of capital, and interest expense, and it is unlikely real estate companies will pass down the savings onto their tenants. Instead it is likely that they will take advantage of lower rates to fund development and acquisitions to expand their asset portfolios. The TSX/TSXV-listed Canadian real estate stocks our on list could continue to benefit from the trend of lower interest rates.

*Share price data as at January 23, 2020, data obtained from S&P Capital IQ

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Fronsac Real Estate Investment Trust (TSXV:FRO.UN) – $0.65
Real Estate

Fronsac Real Estate Investment Trust is Quebec’s only management-free commercial property REIT. Through its 47 Ontario, Quebec, and Nova Scotia-based properties, Fronsac collects stable cash flows from long-term commercial leases. Originally focused on convenience stores, fast food and gas station properties, more recently it has expanded into a broader array of single/dual tenant management-free properties leased to financially-stable tenants/national retailers. On November 12, 2019, Fronsac reported Q3/19 financial results, which were highlighted by funds from operations (FFO) of $1.2M, or $0.0102/unit, an increase of 38% over Q3/18, and the Company added three properties to its portfolio during the quarter. Fronsac pays a monthly distribution of $0.00213, or $0.0255 per annum (3.9% annual yield).

  • Market Cap: $76.4M
  • YTD-Return: -1.5%
  • 5-Year Return: +88%
  • 30-Day Average Trading Volume: 19,570
  • 90-Day Average Trading Volume: 18,290

ViveRE Communities Inc. (TSXV:VCOM) – $0.23
Real Estate

ViveRE is a real estate acquisition and ownership company, focused on recently built or recently refurbished, highly leased multi-residential properties in bedroom communities across Canada. The Company aims to satisfy the needs of the newly-emerging 55+ year old resident group. This demographic is changing the way residential rental apartments cater to their requirements. ViveRE believes that apartments are the next “home,” after years of owning the 55+ group is looking to the carefree lifestyle provided through renting in a community of their peers. ViveRE intends to consolidate this emerging market niche across the country. ViveRE’s existing property portfolio totalling 119 units continues to be fully leased and is performing to expectations. The Company plans to acquire in excess of 400 units in the coming 12 months. ViveRE’s most recent acquisition was 75 Emma Street in Oshawa Ontario, a newly constructed 20-unit building with a community centers, fitness rooms, and a library. The purchase price was $7.3M (5.25% cap rate), with rents projected to range from $1,850 to $2,450 per month.

  • Market Cap: $11.0M
  • YTD-Return: +0.0%
  • 5-Year Return: +360%
  • 30-Day Average Trading Volume: 31,670
  • 90-Day Average Trading Volume: 25,150

Canlan Ice Sports Corp. (TSX:ICE) – $5.50
Real Estate

Canlan Ice Sports engages in the acquisition, development, lease, and operation of multi-purpose recreation and entertainment facilities in North America. The Company operates through six segments: Ice and Field Sales, Food & Beverage, Sports Store, Sponsorship, Space Rental, and Management and Consulting Services. It rents ice or field-time on a contract basis and organizes leagues and tournaments, as well as provides lessons and youth camps; operates restaurants and concession outlets; and operates sports stores that sell hockey, skating, and soccer equipment and apparel. The Company currently operates 21 facilities in Canada and the United States with 60 ice surfaces; 5 indoor soccer fields; and 15 sport, volleyball, and basketball courts. Canlan Ice Sports pays a quarterly dividend of $0.02/share (1.5% annual yield).

  • Market Cap: $73.4M
  • YTD-Return: +7.8%
  • 5-Year Return: +77%
  • 30-Day Average Trading Volume: 650
  • 90-Day Average Trading Volume: 600

Urbanfund Corp. (TSXV:UFC) – $0.78
Real Estate

Urbanfund owns, develops, manages, and operates a real estate portfolio for residential and commercial properties in Canada. The Company also focuses on identifying, investing, and acquiring real estate and real estate related projects. Urbanfund assets are located in Toronto, Brampton, Belleville, Kitchener, and London, Ontario; Montreal and Quebec City, Quebec; and Dartmouth, Nova Scotia. On November 26, 2019, Urbanfund announced an investment of a 20% equity stake in a 145 Unit Residential Portfolio Located in Dartmouth, Nova Scotia. Urbanfund pays a quarterly dividend of 0.0075/share, representing $0.03/share on an annualized basis (3.85% annual yield).

  • Market Cap: $36.4M
  • YTD-Return: -3.8%
  • 5-Year Return: +208%
  • 30-Day Average Trading Volume: 3,740
  • 90-Day Average Trading Volume: 4,430

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