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Allied Properties Real Estate Investment Trust (TSE:AP.UN)
TSX:AP.UN

Allied Properties Real Estate Investment Trust (AP.UN) AI Stock Analysis

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Allied Properties Real Estate Investment Trust

(TSX:AP.UN)

Rating:67Neutral
Price Target:
C$18.00
▲(8.50%Upside)
Allied Properties REIT scores a 67, driven by a strong focus on sustainability and strategic resilience amidst financial challenges. The earnings call and corporate events reflect positive strategic direction and commitment to ESG goals, while technical indicators provide moderate positive signals. However, the valuation is impacted by negative profitability, and financial performance remains a concern.
Positive Factors
Leasing Activity
Same-property NOI growth turns positive with a 1.5% increase, driven by leasing activity in Montreal.
Tenant Retention
The retention ratio improved to 75.1%, compared to 69.3% in the previous year, indicating better tenant retention.
Negative Factors
Debt and Interest Rates
FFO per unit drops 12% due to greater interest expense from refinancing debt at higher interest rates and dilution from the Westbank transaction.
Financial Flexibility
The REIT’s financial flexibility is limited with a large volume of debt maturities and no visibility on improvement in the office market.
Occupancy Challenges
Disruption to global trade is impacting leasing activity, making it difficult to achieve management's occupancy target for 2025 of 90%.

Allied Properties Real Estate Investment Trust (AP.UN) vs. iShares MSCI Canada ETF (EWC)

Allied Properties Real Estate Investment Trust Business Overview & Revenue Model

Company DescriptionAllied Properties Real Estate Investment Trust (AP.UN) is a leading Canadian REIT focused on owning, managing, and developing urban office environments in major Canadian cities. The company specializes in Class I office properties, which typically involve the conversion of light industrial structures into modern, creative workspaces. Allied Properties REIT aims to provide attractive, distinctive urban office environments that meet the needs of businesses and foster a sense of community in urban neighborhoods.
How the Company Makes MoneyAllied Properties REIT generates revenue primarily through the leasing of its office and retail properties to a diverse tenant base. The company earns rental income from long-term lease agreements, which provide a steady and predictable cash flow. Additionally, Allied Properties REIT may engage in strategic acquisitions and development projects that enhance its portfolio and contribute to rental income growth. The company also benefits from property appreciation over time, which can increase the value of its real estate holdings and provide opportunities for refinancing or selective asset sales. Allied Properties REIT's earnings are influenced by factors such as occupancy rates, rental rates, property management efficiencies, and general economic conditions in the Canadian real estate market.

Allied Properties Real Estate Investment Trust Earnings Call Summary

Earnings Call Date:Apr 30, 2025
(Q1-2025)
|
% Change Since: 9.17%|
Next Earnings Date:Jul 23, 2025
Earnings Call Sentiment Positive
The earnings call reflects a strong quarter with positive leasing activity, financial performance, and strategic progress in development and financing. Despite economic uncertainties and specific market challenges, the company demonstrates resilience and confidence in achieving its targets.
Q1-2025 Updates
Positive Updates
Leasing and Operational Resilience
Positive same-asset NOI, improved retention to 75%, and a stable leased area with a 10% increase in tour activity from the prior quarter.
Development and Upgrade Progress
Progress on development projects like M4 in Vancouver and King Toronto, with projects expected to complete by end of next year. Secured a long-term lease with a global retailer at King Toronto.
Strong Balance Sheet and Financing Achievements
Refinanced $850 million, resulting in negligible impact on annual interest expense. Improved debt profile, with a shift from short-term variable rate debt to longer-term fixed rate debt.
Financial Performance Highlights
Operating income grew by 3.5% and same asset NOI increased by 1.5% year-over-year. Average in-place net rent per occupied square foot increased by 5%.
Positive Leasing Activity
Completed 507,000 square feet of leasing activity with a 43% conversion rate. Leasing pipeline increased by 39% compared to the previous quarter.
Negative Updates
Economic Uncertainty Impact
Unclear short-term impact of economic uncertainty on demand for urban office space.
Challenges in Vancouver Market
Working to address vacancy in Vancouver, which was acquired last year, despite it being the strongest leasing market in Canada.
Rising Costs in Development Portfolio
Mention of cost increases in the development portfolio, though specifics were not detailed.
Company Guidance
During the Allied Properties First Quarter 2025 Conference Call, several key metrics were highlighted. The company achieved a 3.5% increase in operating income and a 1.5% rise in same-asset net operating income (NOI) compared to Q1 2024. The average in-place net rent per occupied square foot increased by 5% to $25.30, with a retention rate at a historical level of 75%. They completed $850 million in refinancing with negligible impact on annual interest expenses and maintained strong liquidity with over $700 million available. The balance sheet was strengthened by reducing net debt to EBITDA, targeting below 10x by the end of 2025. Leasing activity showed resilience with a 43% conversion rate from 507,000 square feet of completed leasing, and tour activity was up 10% from the previous quarter. Additionally, the company remained committed to its disposition program with $50 million in assets under contract, aimed at reducing debt further.

Allied Properties Real Estate Investment Trust Financial Statement Overview

Summary
Allied Properties REIT faces profitability challenges with negative net income and a deep negative net profit margin, despite slight revenue growth. The balance sheet is stable but leveraged, and cash flows remain robust, indicating operational efficiency.
Income Statement
55
Neutral
The income statement reflects a challenging period for Allied Properties REIT, with a negative net income for the TTM, indicating profitability issues. Revenue showed a modest growth of 1.2% in TTM compared to 2024, but the net profit margin is deeply negative at -72%, primarily due to significant net losses. The EBIT margin remains positive at 36.1%, suggesting some operational efficiency. However, the negative EBITDA margin indicates increased expenses or restructuring costs, impacting profitability.
Balance Sheet
65
Positive
The balance sheet presents a stable yet leveraged position with a debt-to-equity ratio of 0.83, reflecting moderate financial leverage. The equity ratio stands at 51.5%, indicating a balanced capital structure and decent asset backing. Return on equity is currently not favorable due to negative net income, but the company maintains a strong equity base, which offers potential for recovery.
Cash Flow
60
Neutral
The cash flow statement reveals stable operating cash flow, with the operating cash flow to net income ratio being positive despite net losses, indicating efficient cash generation from operations. Free cash flow is also stable, although growth has stagnated due to increased capital expenditures. The free cash flow to net income ratio is positive, reflecting solid cash management despite recent financial losses.
Breakdown
TTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income StatementTotal Revenue
599.10M592.04M563.98M519.47M568.89M560.50M
Gross Profit
330.86M328.47M317.03M295.21M329.39M319.01M
EBIT
216.51M302.47M-457.61M297.68M274.92M310.50M
EBITDA
-236.96M-227.84M-440.00M299.00M276.08M311.97M
Net Income Common Stockholders
-431.43M-342.53M-425.71M103.80M443.15M500.73M
Balance SheetCash, Cash Equivalents and Short-Term Investments
14.92M73.92M211.07M20.99M22.55M45.51M
Total Assets
10.48B10.60B10.61B11.91B10.38B9.40B
Total Debt
4.48B4.42B3.71B4.26B3.61B2.88B
Net Debt
4.47B4.34B3.50B4.24B3.59B2.84B
Total Liabilities
5.08B5.04B4.47B4.78B3.96B3.22B
Stockholders Equity
5.40B5.56B6.14B6.58B6.43B6.18B
Cash FlowFree Cash Flow
142.19M146.88M319.05M320.33M240.78M355.48M
Operating Cash Flow
143.05M147.84M320.89M321.19M241.11M356.26M
Investing Cash Flow
-311.17M-381.46M659.85M-654.35M-695.80M-960.68M
Financing Cash Flow
170.03M96.48M-790.66M331.60M431.72M441.02M

Allied Properties Real Estate Investment Trust Technical Analysis

Technical Analysis Sentiment
Positive
Last Price16.59
Price Trends
50DMA
15.21
Positive
100DMA
15.82
Positive
200DMA
16.53
Positive
Market Momentum
MACD
0.30
Negative
RSI
70.20
Negative
STOCH
90.11
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:AP.UN, the sentiment is Positive. The current price of 16.59 is above the 20-day moving average (MA) of 15.41, above the 50-day MA of 15.21, and above the 200-day MA of 16.53, indicating a bullish trend. The MACD of 0.30 indicates Negative momentum. The RSI at 70.20 is Negative, neither overbought nor oversold. The STOCH value of 90.11 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for TSE:AP.UN.

Allied Properties Real Estate Investment Trust Peers Comparison

Overall Rating
UnderperformOutperform
Sector (61)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
76
Outperform
C$1.55B27.092.99%5.51%22.60%-48.92%
76
Outperform
C$3.39B14.544.92%6.01%6.68%14.72%
69
Neutral
C$2.75B-0.49%6.00%6.96%85.15%
67
Neutral
$2.28B-7.48%10.88%5.28%-0.79%
61
Neutral
$2.83B10.980.41%8438.90%5.81%-21.06%
58
Neutral
C$2.81B-3.89%5.60%-6.43%-35204.55%
57
Neutral
C$722.34M-1.80%8.05%-13.42%86.55%
* Real Estate Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
TSE:AP.UN
Allied Properties Real Estate Investment Trust
16.59
1.73
11.68%
TSE:AX.UN
Artis Real Estate Investment
7.36
1.33
22.10%
TSE:CRR.UN
Crombie Real Estate ate
14.92
3.03
25.48%
TSE:HR.UN
H&R Real Estate ate Staple
10.77
2.27
26.71%
TSE:DIR.UN
Dream Industrl REIT
11.73
-0.13
-1.10%
TSE:PMZ.UN
Primaris Real Estate Investment Trust
15.44
2.90
23.13%

Allied Properties Real Estate Investment Trust Corporate Events

Business Operations and Strategy
Allied Properties Releases 2024 ESG Report, Showcasing Sustainability Achievements
Positive
Jun 9, 2025

Allied Properties Real Estate Investment Trust has released its 2024 Environmental, Social, and Governance (ESG) Report, highlighting its commitment to reducing greenhouse gas emissions in line with the Science Based Targets initiative. The company has increased its portfolio certification to LEED and BOMA BEST standards and improved its Net Promoter Score significantly. Allied’s efforts in Equity, Diversity, and Inclusion have been well-received, with high user satisfaction ratings. This report aligns with global standards and showcases Allied’s dedication to sustainability and operational excellence.

The most recent analyst rating on ($TSE:AP.UN) stock is a Buy with a C$21.00 price target. To see the full list of analyst forecasts on Allied Properties Real Estate Investment Trust stock, see the TSE:AP.UN Stock Forecast page.

Business Operations and Strategy
Allied Properties Commits to Net-Zero Emissions by 2050
Positive
May 22, 2025

Allied Properties Real Estate Investment Trust has announced that its greenhouse gas emissions reduction targets have been validated by the Science Based Targets initiative. The company aims to achieve net-zero emissions across its value chain by 2050, with significant reductions in scope 1, 2, and 3 emissions by 2030 and 2050. This commitment aligns with a 1.5°C decarbonization pathway and reflects Allied’s dedication to sustainability and environmental responsibility, potentially enhancing its industry positioning and stakeholder relations.

The most recent analyst rating on ($TSE:AP.UN) stock is a Buy with a C$21.00 price target. To see the full list of analyst forecasts on Allied Properties Real Estate Investment Trust stock, see the TSE:AP.UN Stock Forecast page.

Dividends
Allied Properties REIT Declares May 2025 Distribution
Positive
May 15, 2025

Allied Properties REIT has declared a distribution of $0.15 per unit for May 2025, amounting to $1.80 per unit on an annualized basis. This announcement reflects Allied’s ongoing commitment to providing value to its unitholders and underscores its stable financial performance in the real estate investment sector.

The most recent analyst rating on ($TSE:AP.UN) stock is a Buy with a C$21.00 price target. To see the full list of analyst forecasts on Allied Properties Real Estate Investment Trust stock, see the TSE:AP.UN Stock Forecast page.

Shareholder MeetingsBusiness Operations and Strategy
Allied Properties REIT Announces 2025 Meeting Results
Positive
May 6, 2025

Allied Properties Real Estate Investment Trust announced the results of its 2025 Annual and Special Meeting of Unitholders, where all trustee nominees were elected, Deloitte LLP was appointed as the auditor, and the unitholder rights plan was reconfirmed. Additionally, the ‘Say-on-Pay’ advisory vote on executive compensation was approved, reflecting strong support for the company’s governance and operational strategies.

Business Operations and StrategyFinancial Disclosures
Allied Properties Reports Strong Q1 2025 Performance and Strategic Portfolio Moves
Positive
Apr 30, 2025

Allied Properties Real Estate Investment Trust reported strong operational performance in the first quarter of 2025, with stable occupancy and lease rates across its portfolio, except in Vancouver. The company renewed 75% of its maturing leases and leased over 500,000 square feet of space, indicating robust demand. Allied also finalized a significant lease transaction at KING Toronto, enhancing the commercial appeal of the area. The company continues to optimize its portfolio by selling non-core properties to fund strategic acquisitions, expecting to sell additional properties worth at least $300 million this year to strengthen its financial metrics.

Private Placements and FinancingBusiness Operations and Strategy
Allied Properties Completes $400 Million Debenture Offering
Neutral
Apr 7, 2025

Allied Properties Real Estate Investment Trust has successfully completed a $400 million private placement offering of senior unsecured debentures in Canada. The proceeds from this offering will be used to prepay an existing $400 million unsecured term loan maturing in October 2025. The debentures, rated ‘BBB’ with a negative trend by Morningstar DBRS, were issued in two series and are part of Allied’s strategy to manage its debt obligations effectively.

Financial Disclosures
Allied Properties to Discuss Q1 2025 Financial Results in Upcoming Conference Call
Neutral
Apr 2, 2025

Allied Properties Real Estate Investment Trust announced it will hold a conference call and live audio webcast on May 1, 2025, to discuss its first-quarter financial results for the period ending March 31, 2025. The financial results will be released on April 30, 2025, after market close, providing stakeholders an opportunity to gain insights into the company’s performance and strategic direction.

Private Placements and Financing
Allied Properties Announces $400 Million Debenture Offering
Neutral
Mar 26, 2025

Allied Properties Real Estate Investment Trust announced a $400 million private placement offering of senior unsecured debentures in Canada. The proceeds from this offering will be used to prepay an existing $400 million unsecured term loan. The debentures are expected to be rated ‘BBB’ with a negative trend by Morningstar DBRS and will rank equally with other unsecured indebtedness of the company.

DividendsFinancial Disclosures
Allied Properties REIT Declares March 2025 Distribution
Positive
Mar 17, 2025

Allied Properties REIT has declared a distribution of $0.15 per unit for March 2025, translating to an annualized distribution of $1.80 per unit. This announcement underscores Allied’s commitment to delivering consistent returns to its unitholders and reflects its stable financial performance in the competitive urban real estate market.

Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.