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Automotive Properties (TSE:APR.UN)
TSX:APR.UN
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Automotive Properties
(TSX:APR.UN)
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Rating:76Outperform
Price Target:
C$13.00
▲(15.86% Upside)
Overall score is driven primarily by strong cash flow and solid recent profitability, supported by positive earnings-call updates on acquisitions, AFFO growth, and a distribution increase. The main offsets are increased leverage versus 2024 and technicals that appear overbought, while valuation is helped by a high dividend yield with a moderate P/E.
Positive Factors
Free cash flow strength
Consistent, sizable operating and free cash flow (~$76M TTM; FCF up ~58%) provides durable internal funding for acquisitions, distributions and debt service. Strong cash conversion supports financial flexibility and lowers dependence on external capital over the medium term.
Acquisition-driven growth
Material, accretive acquisitions (~$151M) increase scale, geographic diversification and tenant base, driving rental revenue, NOI and AFFO. A disciplined acquisition program can sustainably boost recurring income and support modest distribution growth if integration and leasing assumptions hold.
Stable interest profile & liquidity
High proportion of fixed-rate debt (84%) and modest leverage measured by debt-to-GBV (~45%), plus available liquidity, reduce near-term interest rate sensitivity and refinancing pressure. This stability supports predictable interest costs and AFFO coverage over the medium term.
Negative Factors
Rising leverage
Leverage increased materially to ~0.94 debt/equity from ~0.76, raising balance-sheet risk. Higher indebtedness limits financial flexibility for opportunistic acquisitions, increases refinancing vulnerability, and magnifies distribution sensitivity if rates or cash flows weaken.
Tenant vacancy risk (Vaughan)
Loss of a branded dealership tenant (Audi at Vaughan) creates redeployment risk for a specialized auto retail asset. Prolonged vacancy or lower re-leasing yields can reduce rental income, raise capex and downtime, and test demand for niche dealership properties, pressuring cash flow durability.
Earnings volatility
Historical earnings volatility, despite recent strong gross and net margins, weakens predictability of AFFO and distributions. Cyclical auto retail dynamics and property-specific outcomes can drive swings, increasing forecast risk and reducing confidence in steady long-term payout coverage.
Automotive Properties (APR.UN) vs. iShares MSCI Canada ETF (EWC)
Market Cap
C$608.79M
Dividend Yield8.08%
Average Volume (3M)41.22K
Price to Earnings (P/E)13.2
Beta (1Y)0.50
Revenue Growth3.80%
EPS Growth-6.93%
CountryCA
EmployeesN/A
SectorReal Estate
Sector Strength53
IndustryREIT - Specialty
Share Statistics
EPS (TTM)0.18
Shares Outstanding54,259,403
10 Day Avg. Volume92,408
30 Day Avg. Volume41,215
Financial Highlights & Ratios
PEG Ratio0.18
Price to Book (P/B)0.81
Price to Sales (P/S)5.69
P/FCF Ratio7.04
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
C$12.50Price Target Upside11.41% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering4
EPS Forecast (FY)N/A
Revenue Forecast (FY)N/A
Automotive Properties Business Overview & Revenue Model
Company DescriptionAutomotive Properties REIT is an unincorporated, open-ended real estate investment trust focused on owning and acquiring primarily income-producing automotive dealership properties located in Canada. The REIT's portfolio currently consists of 64 income-producing commercial properties and one development property, representing approximately 2.5 million square feet of gross leasable area, in metropolitan markets across British Columbia, Alberta, Saskatchewan, Manitoba, Ontario and Québec. Automotive Properties REIT is the only public vehicle in Canada focused on consolidating automotive dealership real estate properties.
How the Company Makes MoneyAutomotive Properties generates revenue primarily through long-term lease agreements with automotive dealerships. The company earns rental income from these leases, which are typically structured as net leases where tenants are responsible for property-related expenses. This model provides predictable and stable cash flow. Key revenue streams include base rent and additional income from property management services. Significant partnerships with leading automotive brands enhance the company's portfolio quality and tenant stability, contributing to its earnings. Additionally, the REIT may benefit from property appreciation and strategic acquisitions that expand its asset base and revenue potential.
Automotive Properties Earnings Call Summary
Earnings Call Date:Nov 13, 2025
(Q3-2025)
| % Change Since: |
Next Earnings Date:Mar 24, 2026
Earnings Call Sentiment Positive
The call highlighted strong acquisitions and financial performance, with significant growth in rental revenue, NOI, and AFFO. There were challenges in the M&A environment and an impending vacancy at a key site, but these were outweighed by positive financial indicators and strategic growth initiatives.Q3-2025 Updates
Positive Updates
Significant Acquisitions and Growth
Completed approximately $151 million of acquisitions, including 7 automotive properties in the Greater Montreal area and a Rivian tenanted property in Orlando, Florida. Additional 4 automotive properties acquired post-quarter for $57.3 million.
Increase in Rental Revenue and NOI
Rental revenue increased by 7.9% compared to Q3 last year. Cash NOI increased by 6.5% and same-property cash NOI increased by 2.3%.
AFFO and FFO Growth
AFFO per unit diluted increased to $0.252, up from $0.233. FFO and AFFO increased by 8.3% and 8.8%, respectively, reflecting higher rental revenue from acquisitions.
Distribution Increase
Board approved a 2.2% increase to unitholder distributions, raising annualized distribution per unit from $0.804 to $0.822.
Strong Financial Flexibility
Debt-to-GBV ratio at approximately 45%, with $7.5 million cash on hand and $9 million of undrawn capacity under credit facilities. 84% of debt fixed through interest rate swaps and mortgages.
Negative Updates
Increased G&A Expenses
G&A expenses rose to $1.7 million for the quarter, an increase of $0.3 million from Q3 last year.
Challenges in M&A Environment
Slight hesitation and pricing gap in M&A activities due to current economic conditions, particularly noted in the U.S. market.
Potential Vacancy at Vaughan Site
Audi has notified departure from Vaughan site, requiring exploration of future use options for the property.
Company Guidance
During the Automotive Properties REIT's 2025 Third Quarter Results Conference Call, management provided detailed guidance on several key performance metrics. The REIT completed approximately $151 million in acquisitions, including $93.6 million for seven automotive properties during the quarter, and an additional $57.3 million for four properties post-quarter end. These acquisitions are expected to drive growth in adjusted funds from operations (AFFO) per unit. Key financial metrics showed positive trends, with rental revenue increasing by 7.9% year-over-year, cash net operating income (NOI) up by 6.5%, and same-property cash NOI rising by 2.3%. The AFFO per unit diluted rose to $0.252, marking an 8.8% increase. The Board approved a 2.2% increase in unitholder distributions, raising the annualized distribution per unit from $0.804 to $0.822. Interest expenses decreased to $6.5 million due to lower floating rates, while general and administrative expenses were $1.7 million, reflecting a $0.3 million increase. The REIT maintained a cap rate of 6.7% and a debt-to-gross book value (GBV) ratio of approximately 45%, supported by a recent equity offering and private placement raising $57.1 million. The REIT's debt profile remains robust, with 84% fixed through interest rate swaps and mortgages at an average rate of 4.4%. The management anticipates continued growth and unitholder value driven by its expanding property portfolio and strategic acquisitions.Automotive Properties Financial Statement Overview
Summary
Strong cash generation (OCF and FCF both ~$76M TTM; FCF up ~58% and well-covered vs net income) supports the profile. Offsetting this are earnings volatility over time and a recent uptick in leverage (debt-to-equity ~0.94 vs ~0.76 in 2024), which raises balance-sheet risk if financing conditions tighten.Income Statement
Top-line growth is modest but improving: revenue is up ~2.0% in TTM (Trailing-Twelve-Months) after low single-digit growth in 2024. Profitability is strong in TTM with a ~84% gross margin and ~43% net margin, but earnings have been volatile across the period (notably unusually high net margins in 2021–2022 and much lower in 2020), which reduces confidence in consistency despite solid recent results.74
Positive
Balance Sheet
Leverage looks manageable for a REIT, with debt-to-equity at ~0.94 in TTM (Trailing-Twelve-Months), though it has moved higher versus 2024 (~0.76) and remains a key risk if rates or refinancing conditions tighten. Equity is substantial (~$663M) against ~$1.33B in assets, and return on equity is positive but has moderated to ~6.3% in TTM from higher levels in prior years.67
Positive
Cash Flow
Cash generation is a clear strength: operating cash flow and free cash flow are both ~$76M in TTM (Trailing-Twelve-Months), with free cash flow up ~58% versus the prior period shown. Cash flow quality is solid, with free cash flow matching net income (1.0x) and operating cash flow running well above net income (coverage ~6.7x), supporting financial flexibility.84
Very Positive
| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 97.31M | 93.88M | 92.48M | 82.86M | 78.22M | 75.12M |
| Gross Profit | 81.97M | 79.33M | 78.41M | 70.58M | 67.08M | 64.02M |
| EBITDA | 66.15M | 96.78M | 75.47M | 77.61M | 101.00M | 66.21M |
| Net Income | 41.70M | 72.00M | 50.99M | 119.67M | 122.38M | 4.82M |
Balance Sheet | ||||||
| Total Assets | 1.33B | 1.19B | 1.19B | 1.09B | 1.05B | 936.35M |
| Cash, Cash Equivalents and Short-Term Investments | 636.00K | 336.00K | 298.00K | 396.00K | 474.00K | 308.00K |
| Total Debt | 626.01M | 502.24M | 535.08M | 434.89M | 420.58M | 403.02M |
| Total Liabilities | 664.43M | 527.33M | 653.91M | 572.87M | 591.28M | 545.10M |
| Stockholders Equity | 663.22M | 663.40M | 539.99M | 520.94M | 460.37M | 391.25M |
Cash Flow | ||||||
| Free Cash Flow | 76.44M | 75.91M | 74.27M | 64.55M | 62.21M | 57.17M |
| Operating Cash Flow | 76.44M | 75.91M | 74.27M | 64.55M | 62.21M | 57.17M |
| Investing Cash Flow | -107.01M | 21.38M | -110.42M | -24.74M | -24.87M | -45.78M |
| Financing Cash Flow | 31.00M | -97.26M | 36.06M | -39.88M | -37.18M | -56.35M |
Automotive Properties Technical Analysis
Positive
11.22
Price Trends
10.98
Positive
10.93
Positive
10.77
Positive
Market Momentum
0.08
Positive
55.81
Neutral
17.14
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:APR.UN, the sentiment is Positive. The current price of 11.22 is below the 20-day moving average (MA) of 11.24, above the 50-day MA of 10.98, and above the 200-day MA of 10.77, indicating a neutral trend. The MACD of 0.08 indicates Positive momentum. The RSI at 55.81 is Neutral, neither overbought nor oversold. The STOCH value of 17.14 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for TSE:APR.UN.
Automotive Properties Peers Comparison
UnderperformOutperform
Sector (65)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
76 Outperform | C$608.79M | 13.21 | 5.17% | 8.08% | 3.80% | -6.93% | |
70 Outperform | C$638.15M | 8.53 | 7.26% | 3.87% | -1.21% | ― | |
67 Neutral | C$469.35M | 12.21 | 7.14% | 6.56% | 4.53% | 197.86% | |
65 Neutral | $2.17B | 12.19 | 3.79% | 4.94% | 3.15% | 1.96% | |
63 Neutral | C$856.02M | -10.04 | -4.93% | 7.28% | -20.06% | 19.27% | |
62 Neutral | C$763.56M | 9.43 | 7.32% | 8.07% | 0.41% | 78.32% | |
58 Neutral | C$824.06M | 10.07 | 5.70% | 3.50% | -17.89% | ― |
* Real Estate Sector Average
TSE:APR.UN
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Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
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.