Analyst Mark Rothschild from Canaccord Genuity maintained a Hold rating on Dream Office Real Estate Investment (DRETF – Research Report) and keeping the price target at C$20.00.
Mark Rothschild has given his Hold rating due to a combination of factors influencing Dream Office Real Estate Investment. The company’s funds from operations (FFO) per unit showed a decline of 4% year-over-year in the fourth quarter of 2024, although it surpassed both the analyst’s estimate and the consensus. This performance was primarily driven by year-end cash adjustments and income from sold properties, with normalized FFO aligning closely with expectations.
Despite some positive indicators, such as a 3.5% increase in full-year FFO per unit and same-property net operating income (NOI) growth, challenges remain. The same-property occupancy saw a decline, offsetting rent growth, particularly in the ‘other markets’ portfolio, which experienced a notable vacancy increase. Additionally, the REIT’s units trade at a significant discount to the net asset value (NAV) estimate, and its cash flow multiple is higher than the average for its peers, supporting the Hold recommendation.