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Canadian Net Real Estate Investment Trust Trust Units (TSE:NET.UN)
:NET.UN
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Canadian Net Real Estate Investment Trust Trust Units
(NET.UN)
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Select Model
Rating:75Outperform
Price Target:
C$6.00
▲(6.57% Upside)
The overall stock score is driven by strong financial performance and attractive valuation, supported by positive earnings call sentiment. Technical analysis indicates a neutral outlook, while the absence of notable corporate events keeps the focus on core financial metrics.
Positive Factors
Strong FFO Growth
The increase in FFO per unit indicates effective capital management and operational efficiency, supporting long-term financial stability and growth.
100% Occupancy Rate
Full occupancy reflects strong demand for properties and effective tenant management, ensuring stable and predictable rental income.
Low Payout Ratio
A low payout ratio provides flexibility for future distribution increases and preserves cash for reinvestment, enhancing financial resilience.
Negative Factors
Limited Acquisition Activity
A slow transaction market limits growth opportunities and may hinder the expansion of the property portfolio, affecting long-term revenue potential.
Flat Rent Increase for Some Leases
Flat rent increases can impact revenue growth and reduce the potential for higher returns, especially if inflationary pressures rise.
Increasing Debt Levels
While leverage management is prudent, reliance on debt can strain cash flow and limit financial flexibility, posing risks if interest rates rise.
Canadian Net Real Estate Investment Trust Trust Units (NET.UN) vs. iShares MSCI Canada ETF (EWC)
Market Cap
C$119.26M
Dividend Yield6.15%
Average Volume (3M)16.27K
Price to Earnings (P/E)8.9
Beta (1Y)0.17
Revenue Growth3.20%
EPS Growth39.37%
CountryCA
Employees4
SectorGeneral
Sector StrengthN/A
IndustryREIT - Diversified
Share Statistics
EPS (TTM)0.14
Shares Outstanding20,597,637
10 Day Avg. Volume16,190
30 Day Avg. Volume16,268
Financial Highlights & Ratios
PEG Ratio-0.24
Price to Book (P/B)0.79
Price to Sales (P/S)3.91
P/FCF Ratio9.59
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
C$6.50Price Target Upside15.45% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering1
EPS Forecast (FY)N/A
Revenue Forecast (FY)N/A
Canadian Net Real Estate Investment Trust Trust Units Business Overview & Revenue Model
Company DescriptionCanadian Net Real Estate Investment Trust is an open-ended trust that acquires and owns high quality triple net and management-free commercial real estate properties.
How the Company Makes MoneyNET.UN generates revenue primarily through rental income from its properties. The trust leases its commercial spaces to various tenants, including retailers, businesses, and organizations, which provides a consistent cash flow. Additionally, NET.UN may engage in property management and leasing services, further enhancing its revenue streams. The trust's income is bolstered by long-term leases with tenants, which provide stability and predictability in cash flow. Market demand for commercial real estate and the overall economic environment also play significant roles in the trust's earnings. The trust may benefit from partnerships with property management firms and real estate developers, which can enhance its operational efficiencies and investment opportunities.
Canadian Net Real Estate Investment Trust Trust Units Earnings Call Summary
Earnings Call Date:Aug 19, 2025
(Q2-2025)
| % Change Since: |
Next Earnings Date:Mar 25, 2026
Earnings Call Sentiment Positive
The earnings call reflects a strong financial performance with significant FFO growth, full occupancy, and successful lease renewals. However, the slow transaction market and flat rent increases for some leases present challenges. Overall, the sentiment is positive due to the outweighing highlights.Q2-2025 Updates
Positive Updates
Strong FFO Growth
FFO per unit increased by 8% year-over-year, reaching $0.33 for the 6-month period ended June 30, 2025. Total FFO increased to $6.8 million, up from $6.3 million for the same period last year.
100% Occupancy Rate Maintained
The company maintained a 100% occupancy rate in Q2 2025, driven by high demand and limited supply in the market.
Low Payout Ratio
The payout ratio remains conservative at 52%, one of the lowest in the Canadian REIT sector, providing room for distribution increases and cash preservation.
Successful Lease Renewals
Five out of six expiring leases in 2025 were renewed, accounting for 97% of expiring rents with an average rental spread of 6.8%. For 2026, 45% of expiring NOI has already been renewed with an average increase of 11.5%.
Steady Financial Position
Debt-to-gross asset ratio decreased to 56% from 58% the previous year, showing a prudent approach to leverage management.
Negative Updates
Limited Acquisition Activity
The transaction market is slow due to high interest rates, making it challenging to find accretive deals. The market slowdown may impact future growth opportunities.
Flat Rent Increase for Some Leases
Certain leases have limited rental increases, particularly one large property in 2026, which might reduce the overall average rental spread.
Company Guidance
During Canadian Net REIT's 2025 Second Quarter Earnings Conference Call, management highlighted several key metrics reflecting the company's robust financial performance and strategic direction. The REIT reported an 8% growth in FFO per unit for the year-to-date, driven by capital recycling and accretive reinvestments. The portfolio maintained a 100% occupancy rate, with a conservative payout ratio of 52%. Leasing activity was strong, with 97% of 2025 expiring leases renewed at an average rental spread of 6.8%, and early renewals for 2026 showing an 11.5% increase. The REIT completed a development at Sainte-Sophie with a 7% yield on cost, generating approximately $70,000 in annual NOI. The company maintained a debt-to-gross asset ratio of 54% excluding convertible debentures, and NOI increased by 4% to $10 million for the six-month period ending June 30, 2025. Despite a slower transactional market, the REIT remains focused on sourcing accretive opportunities, with expectations for potential rate cuts to stimulate future acquisitions.Canadian Net Real Estate Investment Trust Trust Units Financial Statement Overview
Summary
The company shows consistent revenue growth and robust cash flow management. However, increasing debt levels and the absence of EBIT data in the latest period require attention. Overall, financial health is stable with opportunities for enhancing operational efficiency.Income Statement
The company has shown consistent revenue growth over the years, albeit with a slight dip in the most recent year. Gross profit margins are healthy, and net profit margins have improved significantly. However, the absence of EBIT data for the latest year raises questions about operational efficiency.Balance Sheet
The balance sheet reflects a moderate debt-to-equity ratio, indicating a balanced approach to leveraging. However, the equity ratio has been declining, suggesting increased reliance on debt over time. Return on equity shows positive trends, but the slight decrease in stockholders' equity warrants attention.Cash Flow
The company demonstrates strong cash flow health with positive free cash flow and operating cash flow metrics. Cash flow from operations consistently covers net income, indicating efficient cash management. Despite fluctuations, free cash flow growth remains robust.| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 27.44M | 26.12M | 26.55M | 24.73M | 18.95M | 12.99M |
| Gross Profit | 19.81M | 18.92M | 19.43M | 18.37M | 14.32M | 9.87M |
| EBITDA | 20.77M | 14.33M | 18.08M | 16.75M | 29.91M | 12.88M |
| Net Income | 13.48M | 7.10M | 18.22M | -6.49M | 25.09M | 9.62M |
Balance Sheet | ||||||
| Total Assets | 316.82M | 301.32M | 308.35M | 303.06M | 278.17M | 209.71M |
| Cash, Cash Equivalents and Short-Term Investments | 1.37M | 1.57M | 987.72K | 2.20M | 1.78M | 5.54M |
| Total Debt | 175.96M | 167.51M | 174.71M | 180.10M | 144.71M | 115.79M |
| Total Liabilities | 180.83M | 171.88M | 178.86M | 184.37M | 148.35M | 119.50M |
| Stockholders Equity | 135.99M | 129.44M | 129.49M | 118.69M | 129.81M | 90.21M |
Cash Flow | ||||||
| Free Cash Flow | 12.19M | 10.65M | 11.25M | 56.02M | 9.26M | 78.94M |
| Operating Cash Flow | 12.19M | 10.65M | 11.25M | 11.33M | 9.26M | 6.19M |
| Investing Cash Flow | -20.93M | 3.72M | 2.71M | -41.56M | -55.79M | -73.82M |
| Financing Cash Flow | 8.65M | -14.48M | -13.18M | 29.83M | 42.68M | 71.79M |
Canadian Net Real Estate Investment Trust Trust Units Technical Analysis
Positive
5.63
Price Trends
5.51
Positive
5.47
Positive
5.33
Positive
Market Momentum
0.07
Negative
67.01
Neutral
72.50
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:NET.UN, the sentiment is Positive. The current price of 5.63 is below the 20-day moving average (MA) of 5.64, above the 50-day MA of 5.51, and above the 200-day MA of 5.33, indicating a bullish trend. The MACD of 0.07 indicates Negative momentum. The RSI at 67.01 is Neutral, neither overbought nor oversold. The STOCH value of 72.50 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for TSE:NET.UN.
Canadian Net Real Estate Investment Trust Trust Units Peers Comparison
UnderperformOutperform
Sector (55)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
78 Outperform | C$364.55M | 8.76 | 8.60% | 7.37% | 0.92% | 92.93% | |
75 Outperform | C$119.26M | 8.91 | 10.16% | 6.15% | 3.20% | 39.37% | |
75 Outperform | C$227.46M | 11.82 | 6.20% | 8.65% | 2.69% | -45.80% | |
69 Neutral | C$169.44M | 9.34 | 8.49% | ― | 70.08% | -20.96% | |
55 Neutral | $6.65B | 3.83 | -15.92% | 6.20% | 10.91% | 7.18% | |
55 Neutral | C$269.58M | -1.67 | -40.17% | 269.20% | -33.76% | -125.67% | |
53 Neutral | C$125.53M | -4.11 | -7.68% | 5.79% | -5.17% | -187.42% |
* General Sector Average
TSE:NET.UN
Canadian Net Real Estate Investment Trust Trust Units
5.79
1.01
21.13%
TSE:BTB.UN
BTB REIT
4.13
1.10
36.30%
TSE:ERE.UN
European Residential Real Estate ate Investment Trust
1.16
0.28
31.82%
TSE:FCD.UN
Firm Capital Property
6.16
0.96
18.46%
TSE:HMT
Halmont Properties
1.10
0.19
21.67%
TSE:TNT.UN
True NthCommercial
8.98
-0.23
-2.50%
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.