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Choice Properties Reit (OTC) (TSE:CHP.UN)
:CHP.UN
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Choice Properties Real Estate Investment
(OTC:CHP.UN)
Rating:68Neutral
Price Target:
C$15.50
▲(8.70% Upside)
Positive Factors
Earnings Outlook
Raising target price on strong second half outlook.
Financial Performance
Choice Properties REIT reported solid results, slightly ahead of expectations as operating performance has been solid, in spite of an increase in vacancy in the industrial portfolio.
Leasing Activity
Healthy leasing activity indicates strong demand for retail space, with leases renewed totalling 1.5 million sf and new leases signed for 574,000 sf, resulting in net absorption of 118,000 sf and occupancy improved to 97.8%.
Negative Factors
Interest Expense
Interest expense increased from refinancing maturing debt at higher interest rates over the past year, as the weighted average interest rate rose from 4.12% to 4.23%.
Stock Recommendation
Downgrading to HOLD following recent share price rally.
Choice Properties Real Estate Investment (CHP.UN) vs. iShares MSCI Canada ETF (EWC)
Market Cap
C$10.32B
Dividend Yield5.52%
Average Volume (3M)340.15K
Price to Earnings (P/E)19.7
Beta (1Y)0.72
Revenue Growth1.46%
EPS Growth-118.83%
CountryCA
Employees285
SectorReal Estate
Sector Strength53
IndustryREIT - Retail
Share Statistics
EPS (TTM)-0.21
Shares Outstanding328,024,260
10 Day Avg. Volume371,782
30 Day Avg. Volume340,153
Financial Highlights & Ratios
PEG Ratio-6.77
Price to Book (P/B)1.97
Price to Sales (P/S)7.06
P/FCF Ratio13.33
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
C$15.95Price Target Upside11.86% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering6
Choice Properties Real Estate Investment Business Overview & Revenue Model
Company DescriptionChoice Properties Real Estate Investment Trust (CHP.UN) is a leading Canadian real estate investment trust focused on owning, managing, and developing a high-quality portfolio of retail, industrial, and office properties across Canada. The company primarily leases its properties to Loblaw Companies Limited, Canada's largest retailer, as well as other retail tenants, offering a stable and diversified income stream. With a strategic emphasis on value creation, Choice Properties actively engages in property development and redevelopment to enhance its asset base and drive growth.
How the Company Makes MoneyChoice Properties Real Estate Investment Trust generates revenue primarily through leasing its diversified portfolio of real estate properties. The company's key revenue stream is rental income from long-term leases with tenants, predominantly from Loblaw Companies Limited, which provides a reliable and consistent income source due to the strong credit profile of the tenant. Additionally, Choice Properties engages in property development and redevelopment projects that contribute to its earnings by enhancing property values and increasing rental income potential. Strategic partnerships and joint ventures in development projects also play a role in expanding its asset base and delivering additional revenue streams.
Choice Properties Real Estate Investment Earnings Call Summary
Earnings Call Date:Jul 18, 2025
(Q2-2025)
| % Change Since: -2.75%|
Next Earnings Date:Nov 05, 2025
Earnings Call Sentiment Positive
The earnings call reflects strong operational and financial performance with robust occupancy, leasing spreads, and successful transaction activity. Challenges such as market softening in the residential sector and strategic lease terminations were noted but did not significantly impact overall positive performance.Q2-2025 Updates
Positive Updates
Strong Occupancy and Leasing Spreads
Near full occupancy at 97.8%, with exceptional leasing spreads of 24%, reflecting robust demand for grocery-anchored retail and industrial assets.
Successful Capital Recycling Program
Completed approximately $427 million in total real estate transactions, including $351 million of acquisitions and $76 million of noncore asset dispositions.
Resilient Financial Performance
Reported FFO increased by 3.9% to $191.6 million, or $0.265 per unit, driven by higher Same-Asset cash NOI and strong leasing activity.
Industrial Portfolio Growth
Occupancy increased to 98%, with an average lease renewal spread of 38.9%, indicating strong performance in the industrial sector.
Positive NAV Growth
IFRS NAV increased by 1.5% over the last quarter, driven by a fair value gain on investment properties and investment in Allied Properties.
Negative Updates
Mixed-Use & Residential Market Softening
Observed some softening in residential markets as new supply comes online, though assets maintained solid occupancy.
Strategic Lease Terminations
Tenant retention in the retail sector was impacted by strategic lease terminations, affecting retention rates.
Company Guidance
During the Choice Properties Real Estate Investment Trust Second Quarter 2025 Earnings Call, several key metrics were highlighted demonstrating the company's robust performance. The occupancy rate was near full at 97.8%, while the industrial portfolio saw a slight increase to 98%. The company achieved a 3.9% growth in Funds From Operations (FFO) per unit, with leasing spreads reaching 24%. Same-Asset Net Operating Income (NOI) growth was healthy, and the retail portfolio achieved a renewal spread of 13.2%. The call also noted industrial lease renewals averaging 38.9% above expiry rates. Furthermore, the company completed approximately $427 million in real estate transactions, which included $351 million in acquisitions and $76 million in noncore asset dispositions. The strategic relationship with Loblaw was underscored by a notable transaction involving a $183 million industrial distribution asset acquisition. The company continues to maintain a strong balance sheet, with a debt-to-EBITDA ratio of 7.2x and $1.3 billion of available credit.Choice Properties Real Estate Investment Financial Statement Overview
Summary
Choice Properties Real Estate Investment exhibits robust financial health with strong profitability and cash flow generation. The income statement highlights efficient operations and cost management, while the balance sheet shows moderate leverage and strong equity returns. Cash flow metrics indicate solid cash generation but suggest areas for improvement in cash flow growth.Income Statement
The company exhibits a strong financial performance with a solid Gross Profit Margin of 75.07% and a healthy Net Profit Margin of 39.35% for the TTM. Revenue growth has been relatively stable, with a slight decline in the current TTM compared to previous periods. The EBIT and EBITDA margins are robust at 33.24% and 75.32%, respectively, indicating efficient cost management.82
Very Positive
Balance Sheet
Choice Properties maintains a moderate Debt-to-Equity Ratio of 1.40, indicating a balanced use of debt financing. The Return on Equity (ROE) is strong at 11.52%, reflecting effective use of equity to generate profits. The Equity Ratio stands at 27.40%, showing a stable asset base supported by equity.78
Positive
Cash Flow
The company demonstrates strong cash flow generation with a Free Cash Flow to Net Income Ratio of 1.29, indicating efficient conversion of income into cash. The Operating Cash Flow to Net Income Ratio of 1.29 reflects good cash operational efficiency. However, Free Cash Flow Growth Rate is slightly negative, signaling potential areas for improvement in cash flow management.75
Positive
| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 1.38B | 1.37B | 1.43B | 1.26B | 1.29B | 1.27B |
| Gross Profit | 991.90M | 978.57M | 1.04B | 900.64M | 912.01M | 886.60M |
| EBITDA | 467.26M | 1.37B | 1.14B | 1.28B | 956.90M | 981.61M |
| Net Income | -121.55M | 784.44M | 796.69M | 744.25M | 23.01M | 450.69M |
Balance Sheet | ||||||
| Total Assets | 17.72B | 17.56B | 17.31B | 16.82B | 16.17B | 15.65B |
| Cash, Cash Equivalents and Short-Term Investments | 25.36M | 63.39M | 252.42M | 64.74M | 84.30M | 207.22M |
| Total Debt | 6.82B | 6.68B | 6.70B | 6.55B | 6.23B | 6.49B |
| Total Liabilities | 13.20B | 12.66B | 12.94B | 13.00B | 12.86B | 12.12B |
| Stockholders Equity | 4.52B | 4.90B | 4.37B | 3.82B | 3.31B | 3.51B |
Cash Flow | ||||||
| Free Cash Flow | 726.49M | 724.73M | 641.97M | 1.01B | 773.41M | 507.76M |
| Operating Cash Flow | 726.49M | 724.73M | 641.97M | 633.15M | 669.43M | 621.18M |
| Investing Cash Flow | -716.84M | -584.21M | -361.35M | -616.73M | -64.12M | 155.19M |
| Financing Cash Flow | -603.88M | -329.56M | -92.94M | -35.99M | -728.22M | -611.15M |
Choice Properties Real Estate Investment Technical Analysis
Neutral
14.26
Price Trends
14.59
Negative
14.35
Negative
13.78
Positive
Market Momentum
-0.11
Positive
41.08
Neutral
14.63
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:CHP.UN, the sentiment is Neutral. The current price of 14.26 is below the 20-day moving average (MA) of 14.50, below the 50-day MA of 14.59, and above the 200-day MA of 13.78, indicating a neutral trend. The MACD of -0.11 indicates Positive momentum. The RSI at 41.08 is Neutral, neither overbought nor oversold. The STOCH value of 14.63 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for TSE:CHP.UN.
Choice Properties Real Estate Investment Peers Comparison
Overall Rating
UnderperformOutperform
Sector (53)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
81 Outperform | C$3.72B | 8.40 | 11.08% | 6.15% | 4.26% | 72.02% | |
78 Outperform | C$4.36B | 18.52 | 4.75% | 7.23% | 10.06% | -19.26% | |
73 Outperform | C$4.01B | 15.36 | 6.58% | 4.87% | 2.53% | ― | |
70 Outperform | C$1.59B | 25.45 | 3.26% | 5.77% | 23.01% | -50.29% | |
69 Neutral | C$5.22B | 20.48 | 3.61% | 6.40% | 13.66% | 426.86% | |
68 Neutral | C$10.32B | 19.74 | -2.85% | 5.52% | 1.46% | -118.83% | |
53 Neutral | $1.19B | 3.49 | -2.19% | 6.01% | -2.24% | -167.40% |
* Real Estate Sector Average
Performance Comparison
TSE:CHP.UN
Choice Properties Real Estate Investment
14.26
0.93
6.97%
TSE:REI.UN
RioCan Real Estate Investment
17.72
1.30
7.92%
TSE:FCR.UN
First Capital Realty
18.88
3.33
21.41%
TSE:SRU.UN
SmartCentres Real Estate Investment Trust
25.59
3.39
15.27%
TSE:CRT.UN
CT Real Estate Investment
15.58
1.96
14.39%
TSE:PMZ.UN
Primaris Real Estate Investment Trust
14.81
1.82
14.01%
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.