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PRO Real Estate Investment (TSE:PRV.UN)
TSX:PRV.UN
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PRO Real Estate Investment
(TSX:PRV.UN)
58Neutral
Positive Factors
Financial performance
For the full-year 2024, financial performance was healthy with FFO per unit up 8.4%.
Leasing spreads
Leasing spreads have been exceptionally strong, with the REIT signing renewals at an average leasing spread of 47.8% during the quarter.
Trading discount
PRO currently trades at an implied cap rate of 7.7%, or a 24.0% discount to the NAV estimate, which is favorable compared to its Canadian industrial REIT peers.
Negative Factors
Asset sales impact
The negative impact of asset sales and higher interest expense offset strong operating performance from growing NOI in its industrial portfolio.
FFO performance
FFO per unit down 10% in Q4/24, with the pace of organic growth having slowed, and results slightly below expectations.
Organic growth
Though operating performance remains healthy, the pace of organic growth has slowed, and PRO REIT reported results slightly below expectations.
PRO Real Estate Investment (PRV.UN) vs. S&P 500 (SPY)
Market Cap
C$304.99M
Dividend Yield8.95%
Average Volume (3M)62.47K
Price to Earnings (P/E)128.3
Beta (1Y)0.91
Revenue Growth-0.68%
EPS Growth-90.87%
CountryCA
Employees83
SectorReal Estate
Sector Strength70
IndustryREIT - Diversified
Share Statistics
EPS (TTM)0.04
Shares Outstanding59,437,134
10 Day Avg. Volume49,487
30 Day Avg. Volume62,466
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)3.03
Price to Cash Flow (P/CF)6.40
P/FCF Ratio6.80
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 Upside29.22% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering1
PRO Real Estate Investment Business Overview & Revenue Model
Company DescriptionPRO Real Estate Investment (PRV.UN) is a real estate investment trust (REIT) that focuses on acquiring, managing, and developing a diversified portfolio of income-generating properties. The company primarily invests in commercial real estate sectors, including office buildings, retail centers, industrial properties, and multi-family residential complexes. With a strategic approach to real estate investment, PRO Real Estate Investment aims to deliver stable and growing cash flows to its investors through active asset management and value-enhancing initiatives.
How the Company Makes MoneyPRO Real Estate Investment makes money through several key revenue streams. The primary source of income comes from rental income generated by leasing space in its portfolio of commercial properties to tenants. This includes long-term lease agreements with businesses in office buildings, retail spaces, and industrial facilities, as well as leases in multi-family residential units. Additionally, the company may engage in property development and redevelopment projects to create value and increase rental income over time. PRO Real Estate Investment also benefits from appreciation in property values, which can enhance the overall asset value of its portfolio. Furthermore, the company may form partnerships or joint ventures with other real estate developers or investors to leverage expertise and share risks, potentially contributing to its earnings growth.
PRO Real Estate Investment Financial Statement Overview
Summary
PRO Real Estate Investment shows a mixed financial profile with strong cash flow metrics providing stability despite challenges in revenue consistency and high leverage. The balance sheet's high debt-to-equity ratio poses risks, but a solid equity ratio and robust cash flow generation offset some concerns.Income Statement
The company shows a stable gross profit margin, indicating efficient cost management, but a low net profit margin highlights challenges in controlling additional expenses. Revenue growth has been inconsistent, with recent declines posing a risk to future profitability. The EBIT margin is unavailable, affecting the ability to gauge core operational efficiency, but the EBITDA margin remains healthy, reflecting good cash generation capability.55
Neutral
Balance Sheet
The debt-to-equity ratio is high, suggesting significant leverage, which could pose risks in adverse economic conditions. However, the company maintains a solid equity ratio, indicating a strong asset base relative to liabilities. Return on equity shows potential for shareholder value creation, although it has been inconsistent over the years.63
Positive
Cash Flow
The company demonstrates strong free cash flow generation, with a positive growth trend, reinforcing financial flexibility. Operating cash flow to net income ratio indicates efficient conversion of earnings into cash, while the free cash flow to net income ratio suggests good cash retention, despite occasional fluctuations in net income.68
Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 99.21M | 99.89M | 97.21M | 77.67M | 69.81M | Gross Profit |
| 58.52M | 57.94M | 57.74M | 46.28M | 40.53M | EBIT |
| 0.00 | 51.19M | 51.20M | 35.82M | 39.77M | EBITDA |
| 24.95M | 47.93M | 51.99M | 36.55M | 40.45M | Net Income Common Stockholders |
| 2.38M | 25.91M | 136.75M | 81.84M | 1.86M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 9.07M | 13.26M | 7.53M | 5.94M | 6.26M | Total Assets |
| 997.76M | 1.03B | 1.04B | 989.96M | 634.48M | Total Debt |
| 498.57M | 515.26M | 514.33M | 522.78M | 364.73M | Net Debt |
| 489.50M | 502.00M | 506.79M | 516.84M | 358.48M | Total Liabilities |
| 533.12M | 546.56M | 548.24M | 560.27M | 391.28M | Stockholders Equity |
| 464.65M | 488.03M | 487.69M | 429.69M | 243.20M |
| Cash Flow | Free Cash Flow | |||
| 29.87M | 30.84M | 27.80M | 29.00M | 23.08M | Operating Cash Flow |
| 31.10M | 31.70M | 28.23M | 29.28M | 23.41M | Investing Cash Flow |
| 9.89M | 4.34M | 11.93M | -281.61M | -5.64M | Financing Cash Flow |
| -45.17M | -30.32M | -38.58M | 252.01M | -16.81M |
PRO Real Estate Investment Technical Analysis
Neutral
5.03
Price Trends
5.13
Negative
5.21
Negative
5.16
Negative
Market Momentum
-0.04
Negative
47.61
Neutral
21.05
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:PRV.UN, the sentiment is Neutral. The current price of 5.03 is above the 20-day moving average (MA) of 5.02, below the 50-day MA of 5.13, and below the 200-day MA of 5.16, indicating a neutral trend. The MACD of -0.04 indicates Negative momentum. The RSI at 47.61 is Neutral, neither overbought nor oversold. The STOCH value of 21.05 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for TSE:PRV.UN.
PRO Real Estate Investment 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$4.30B | 19.01 | 4.50% | 7.32% | 9.46% | -42.77% | |
72 Outperform | C$7.01B | 24.84 | 3.20% | 3.41% | 4.45% | ― | |
68 Neutral | $5.11B | 10.92 | 6.34% | 6.79% | 11.62% | 1120.60% | |
63 Neutral | C$2.64B | ― | -2.29% | 5.97% | -6.92% | -310.05% | |
61 Neutral | $4.72B | 17.64 | -3.07% | 10.89% | 5.99% | -21.86% | |
58 Neutral | C$304.99M | 128.32 | 0.50% | 8.95% | -0.68% | -90.87% | |
58 Neutral | $2.29B | ― | -5.79% | 11.49% | 4.98% | 19.54% |
* Real Estate Sector Average
Performance Comparison
TSE:PRV.UN
PRO Real Estate Investment
5.03
-0.02
-0.40%
TSE:REI.UN
RioCan Real Estate Investment
17.27
0.04
0.24%
TSE:AP.UN
Allied Properties Real Estate Investment Trust
16.75
1.54
10.15%
TSE:SRU.UN
SmartCentres Real Estate Investment Trust
25.50
4.28
20.17%
TSE:HR.UN
H&R Real Estate ate Staple
10.14
1.77
21.15%
TSE:CAR.UN
Canadian Apartment
42.74
-0.85
-1.95%
PRO Real Estate Investment Earnings Call Summary
Earnings Call Date: Mar 12, 2025 | % Change Since: 1.00% | Next Earnings Date: May 7, 2025
Earnings Call Sentiment Neutral
The call reflected a strategic emphasis on expanding the industrial property segment, achieving consistent same-property NOI growth, and maintaining financial stability through debt reduction. However, challenges such as decreased occupancy rates, flat financial metrics, and a difficult transaction market were significant concerns.Highlights
Strategic Shift to Industrial Properties
Continued progress towards becoming a pure-play industrial REIT with industrial segment accounting for 85.6% of GLA, up from 81.3% last year.
Same-Property NOI Growth
Achieved an 8.1% increase in same-property NOI for the third quarter, marking 15 consecutive quarters of growth with an average annual rate over 3%.
Successful Lease Renewals
Renewed or replaced 83.6% of GLA maturing in 2024 with a robust 50.4% positive spread for industrial properties.
Financial Prudence
Reduced total debt by $18 million compared to last year, maintaining a debt to gross book value target of approximately 50%.
Lowlights
Decreased Portfolio Occupancy
Occupancy rate decreased to 97.2% from 98.2% last year, mainly due to transitional vacancies in three industrial spaces.
Flat Financial Performance
Property revenue remained flat at $24 million compared to last year, and FFO was relatively flat year-over-year.
Higher AFFO Payout Ratio
Basic AFFO payout ratio increased to 97.7% from 96.9% last year, due to increased stabilized leasing costs.
Challenging Transaction Market
The transaction market remains choppy with uncertainty in interest rates, affecting acquisition and disposition activities.
Company Guidance
During the Q3 2024 earnings call for PROREIT, management provided extensive guidance and performance metrics. The company reported a strategic focus on becoming a pure-play industrial REIT, having increased their industrial segment to 85.6% of their gross leasable area (GLA) from 81.3% a year ago. They achieved an 8.1% increase in same-property net operating income (NOI) and maintained a robust portfolio occupancy rate of 97.2%, despite a slight decrease from 98.2% the previous year. PROREIT completed the sale of two office properties and acquired an industrial property near Montreal International Airport, resulting in a total of 116 properties in their portfolio, down from 126 last year. Financial results showed property revenue at $24.0 million and funds from operations (FFO) at $6.5 million for the quarter. The company maintained a debt-to-gross book value ratio of approximately 50%, with a weighted average interest rate on mortgage debt at 3.87%. They also reported a basic adjusted funds from operations (AFFO) payout ratio of 97.7%. Looking forward, PROREIT aims to achieve 90% industrial base rent and continues to explore capital recycling opportunities to maintain their financial health and strategic growth.PRO Real Estate Investment Corporate Events
Dividends
PROREIT Announces March 2025 Cash Distribution
Positive
Mar 20, 2025
PRO Real Estate Investment Trust announced a cash distribution of $0.0375 per trust unit for March 2025, payable on April 15, 2025, to unitholders of record as of March 31, 2025. This announcement reflects PROREIT’s ongoing commitment to providing returns to its investors and may enhance its attractiveness to stakeholders in the competitive real estate investment market.
Business Operations and StrategyFinancial Disclosures
PROREIT Reports Stable Income and Strategic Growth in Fiscal 2024
Positive
Mar 12, 2025
PROREIT reported stable net operating income for the fourth quarter and fiscal year 2024, despite owning fewer properties. The company achieved a 7.7% year-over-year growth in Same Property NOI, driven by strong leasing performance and rent escalations. PROREIT’s strategic property sales and acquisitions, along with effective debt management, highlight its ability to navigate a high-interest-rate environment, maintaining a high occupancy rate of 97.8% and reducing total debt by $16.7 million.
Dividends
PROREIT Declares February 2025 Distribution to Unitholders
Positive
Feb 20, 2025
PRO Real Estate Investment Trust announced a cash distribution of $0.0375 per trust unit for February 2025, equating to an annualized rate of $0.45 per unit. This move underscores PROREIT’s ongoing commitment to providing consistent returns to its unitholders and reinforces its stable financial position in the Canadian real estate sector.
Financial Disclosures
PROREIT Sets Release Date for 2024 Financial Results and Conference Call
Neutral
Feb 19, 2025
PROREIT has announced the release date for its 2024 fiscal year and fourth-quarter financial results, which will be available on March 12, 2025, after markets close. The following day, the management team will host a conference call to discuss the results with financial analysts, with media and interested individuals invited to listen via a live audio webcast. This release is significant as it provides stakeholders with insights into PROREIT’s financial health and operational performance, potentially impacting investment decisions and market positioning.
Dividends
PROREIT Announces January 2025 Cash Distribution
Positive
Jan 21, 2025
PRO Real Estate Investment Trust has announced a cash distribution of $0.0375 per trust unit for January 2025, with payment scheduled for February 18, 2025. This distribution reflects the company’s ongoing commitment to providing returns to its unitholders and demonstrates its stable financial position within the Canadian commercial real estate sector.
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.