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Smartcentres Real Estate Investment Trust (TSE:SRU.UN)
:SRU.UN
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SmartCentres Real Estate Investment Trust
(TSX:SRU.UN)
Rating:78Outperform
Price Target:
C$30.00
▲(15.87%Upside)
Positive Factors
Mixed-Use Development
SRU's retail portfolio is performing well, and the contribution from mixed-use development is becoming more visible.
Retail Portfolio Performance
The value-oriented retail portfolio continues to perform well, with SP-NOI growth tracking well against the >3% target.
Tenant Demand
Retailers are looking for more space, and SRU executed new leasing on existing vacant built space, indicating demand for their properties.
Negative Factors
Debt Levels
Debt is elevated compared to certain peers, and interest rate headwinds are expected to temper earnings growth.
Interest Rate Impact
Interest rate headwinds are expected to temper earnings growth, particularly in 2026.
SmartCentres Real Estate Investment Trust (SRU.UN) vs. iShares MSCI Canada ETF (EWC)
Market Cap
C$4.39B
Dividend Yield7.14%
Average Volume (3M)262.93K
Price to Earnings (P/E)18.6
Beta (1Y)0.87
Revenue Growth10.06%
EPS Growth-19.26%
CountryCA
Employees342
SectorReal Estate
Sector Strength64
IndustryREIT - Retail
Share Statistics
EPS (TTM)-0.05
Shares Outstanding144,687,640
10 Day Avg. Volume232,553
30 Day Avg. Volume262,928
Financial Highlights & Ratios
PEG Ratio4.92
Price to Book (P/B)0.86
Price to Sales (P/S)0.00
P/FCF Ratio9.39
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
C$28.33Price Target Upside9.42% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering3
SmartCentres Real Estate Investment Trust Business Overview & Revenue Model
Company DescriptionSmartCentres Real Estate Investment Trust (SRU.UN) is a Canadian real estate investment trust that specializes in the development and management of retail and mixed-use properties. The company focuses primarily on shopping centers anchored by leading national retailers, as well as residential, office, and self-storage developments. SmartCentres is known for its strategic locations across Canada, offering accessible and convenient shopping experiences to consumers.
How the Company Makes MoneySmartCentres Real Estate Investment Trust makes money by leasing retail and commercial spaces to tenants, which include major national retailers and various businesses. The rental income from these leases forms the backbone of its revenue model. Additionally, the company is increasingly involved in mixed-use developments, which can include residential, office, and self-storage components, providing diversified income streams. SmartCentres also engages in property development and management activities, generating revenue through the sale of developed properties and property management fees. Strategic partnerships with other real estate players and retailers can enhance its property portfolio's value, further contributing to its earnings.
SmartCentres Real Estate Investment Trust Earnings Call Summary
Earnings Call Date:May 07, 2025
(Q1-2025)
| % Change Since: 1.81%|
Next Earnings Date:Aug 07, 2025
Earnings Call Sentiment Positive
The earnings call highlighted strong operational performance with significant growth in Same Property NOI, high occupancy and cash collection rates, and successful leasing activities. Notable partnerships with major retailers like Walmart and Costco were secured, and development projects are progressing well. However, there were concerns about a fair value loss on investment properties and a slight decline in occupancy rates. Overall, the positive highlights significantly outweigh the lowlights.Q1-2025 Updates
Positive Updates
Strong Same Property NOI Growth
The company reported a Same Property NOI growth of 4.1% overall and 6.7% excluding Anchors, demonstrating strong performance in their core retail business.
High Occupancy and Cash Collections
SmartCentres maintained a high occupancy rate of 98.4% with cash collections exceeding 99% during the quarter.
Successful Leasing and Expansion
The company successfully extended 68.4% of its 2025 lease maturities with positive leasing spreads of 6.3% all-in or 8.4% excluding Anchors.
Major Retailer Partnerships
SmartCentres secured significant partnerships with Walmart and Costco, both taking possession of new locations with 20-year initial lease terms.
FFO Per Unit Increase
FFO per fully diluted unit increased to $0.56 from $0.48 in the same quarter last year, driven by higher NOI and changes in fair value adjustments.
Development Projects Progress
The company is actively moving forward with several development projects, including the 340-unit ArtWalk Condo project and the 458-unit Millway apartments, now 96.5% leased.
Negative Updates
Fair Value Loss on Investment Properties
The company recorded a fair value loss of $80.1 million on its investment properties portfolio, mainly due to delays in development activities for certain properties.
Occupancy Rate Slight Decline
The occupancy rate slightly declined from the previous quarter, attributed to seasonal variations and minor increases in vacancy.
Company Guidance
During the SmartCentres REIT Q1 2025 Conference Call, the company reported a strong performance, with several key metrics highlighted. Same Property Net Operating Income (NOI) grew by 4.1% overall, and 6.7% excluding Anchors. The company achieved positive leasing spreads of 6.3% all-in or 8.4% excluding Anchors, with 98.4% occupancy for in-place and executed deals. Cash collections were above 99%. Approximately 70% of the 2025 lease maturities had already been extended by the end of the quarter. Financial highlights included a 5.5% increase in net operating income, with Funds From Operations (FFO) per fully diluted unit rising to $0.56, compared to $0.48 in the same quarter last year. The company's unencumbered asset pool increased to $9.6 billion. Additionally, major tenant movements included Walmart and Costco taking possession of new spaces with planned openings later in the year, contributing to the continued expansion and dominance of the company's retail offerings.SmartCentres Real Estate Investment Trust Financial Statement Overview
Summary
SmartCentres Real Estate Investment Trust demonstrates strong financial performance with high profitability, particularly reflected in its gross profit and net profit margins. The cash flow is robust with effective cash conversion rates. The balance sheet is stable, though leverage should be monitored to maintain financial stability.Income Statement
The income statement shows a healthy gross profit margin of 59.49% and a net profit margin of 26.46% for the TTM, indicating strong profitability. The revenue growth rate for the TTM is 1.32%, showing modest growth. EBIT and EBITDA margins are strong at 56.46% and 48.86%, respectively, signaling efficient operations. However, the revenue growth has slowed compared to previous years, which could be a concern if the trend continues.75
Positive
Balance Sheet
The balance sheet reflects a stable financial structure with a debt-to-equity ratio of 0.98, indicating a balanced approach to leveraging. The return on equity (ROE) is 4.76% for the TTM, showing reasonable returns for equity holders. The equity ratio is 43.35%, suggesting a solid equity base compared to total assets. While the overall leverage is manageable, any increase in debt levels could pose a risk to financial stability.70
Positive
Cash Flow
Cash flow analysis highlights a strong free cash flow growth rate of 6.98% for the TTM, demonstrating effective cash generation. The operating cash flow to net income ratio is 1.63, indicating solid cash flow relative to net earnings. The free cash flow to net income ratio is notable at 1.62, underscoring efficient conversion of profits into cash. Overall, cash flows are robust, supporting operational and financial needs.80
Positive
| Breakdown | |||||
| TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 930.46M | 918.36M | 929.40M | 804.60M | 780.76M | 781.25M | Gross Profit |
| 553.57M | 547.51M | 608.38M | 521.16M | 501.24M | 474.66M | EBIT |
| 525.26M | 509.84M | 577.57M | 488.42M | 674.38M | 505.97M | EBITDA |
| 454.63M | 478.63M | 681.02M | 498.73M | 686.84M | 520.44M | Net Income Common Stockholders |
| 246.17M | 236.75M | 413.70M | 811.11M | 475.28M | -143.46M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 28.63M | 37.69M | 34.74M | 35.26M | 62.23M | 794.59M | Total Assets |
| 11.92B | 11.94B | 11.91B | 11.70B | 11.29B | 10.72B | Total Debt |
| 5.09B | 5.05B | 5.00B | 4.98B | 4.85B | 5.21B | Net Debt |
| 5.06B | 5.01B | 4.96B | 4.95B | 4.79B | 4.42B | Total Liabilities |
| 5.67B | 5.60B | 5.55B | 5.54B | 5.45B | 5.56B | Stockholders Equity |
| 5.17B | 5.24B | 5.27B | 5.13B | 4.88B | 4.32B |
| Cash Flow | Free Cash Flow | ||||
| 399.76M | 373.66M | 328.95M | 369.17M | 371.27M | 428.94M | Operating Cash Flow |
| 400.32M | 374.21M | 330.85M | 370.76M | 371.62M | 295.98M | Investing Cash Flow |
| -173.31M | -155.53M | 1.52M | -121.39M | -413.17M | -157.38M | Financing Cash Flow |
| -245.59M | -215.73M | -332.89M | -276.35M | -690.81M | 600.62M |
SmartCentres Real Estate Investment Trust Technical Analysis
Positive
25.89
Price Trends
25.14
Positive
24.84
Positive
24.64
Positive
Market Momentum
0.18
Positive
55.30
Neutral
39.99
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:SRU.UN, the sentiment is Positive. The current price of 25.89 is above the 20-day moving average (MA) of 25.60, above the 50-day MA of 25.14, and above the 200-day MA of 24.64, indicating a bullish trend. The MACD of 0.18 indicates Positive momentum. The RSI at 55.30 is Neutral, neither overbought nor oversold. The STOCH value of 39.99 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for TSE:SRU.UN.
SmartCentres 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 |
|---|---|---|---|---|---|---|---|
82 Outperform | C$3.86B | 8.69 | 11.23% | 5.63% | 4.54% | 68.32% | |
78 Outperform | C$4.39B | 18.62 | 4.75% | 7.14% | 10.06% | -19.26% | |
76 Outperform | C$1.57B | 27.30 | 2.99% | 5.48% | 22.60% | -48.92% | |
76 Outperform | C$3.74B | 17.41 | 5.40% | 4.91% | 3.11% | ― | |
74 Outperform | C$430.11M | 17.42 | 4.57% | 7.20% | 6.36% | 13.91% | |
69 Neutral | $5.26B | 20.48 | 3.61% | 6.24% | 13.66% | 426.86% | |
61 Neutral | $2.85B | 10.96 | 0.41% | 8438.88% | 5.73% | -21.25% |
* Real Estate Sector Average
Performance Comparison
TSE:SRU.UN
SmartCentres Real Estate Investment Trust
25.73
5.17
25.15%
TSE:REI.UN
RioCan Real Estate Investment
17.72
1.92
12.14%
TSE:FCR.UN
First Capital Realty
17.59
3.53
25.11%
TSE:PLZ.UN
Plaza Retail REIT
3.90
0.62
18.90%
TSE:CRT.UN
CT Real Estate Investment
16.18
3.38
26.41%
TSE:PMZ.UN
Primaris Real Estate Investment Trust
15.47
2.74
21.52%
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.