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BTB REIT Un (TSE:BTB.UN)
TSX:BTB.UN
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BTB REIT
(TSX:BTB.UN)
Rating:78Outperform
Price Target:
C$4.00
▲(10.50%Upside)
Positive Factors
Analyst Recommendation
Analyst recommends BTB REIT a BUY, largely supported by a highly attractive distribution that is supported by existing cash flow.
Industrial Segment Performance
Healthy operating performance from the industrial segment drives growth.
Valuation
BTB’s units currently trade at an implied cap rate of 7.8% or a discount to NAV estimate of 13.3%, which compares favorably to the REIT’s peers.
Negative Factors
FFO Performance
FFO per unit drops 14% year-over-year.
Interest Expense
Greater interest expense and tenant bankruptcy negatively impacted interest expense.
Refinancing Impact
Refinancing mortgages over the past year at higher rates led to greater interest expense and the weighted average interest rate rose 41 bps year-over-year to 4.69%.
BTB REIT (BTB.UN) vs. iShares MSCI Canada ETF (EWC)
Market Cap
C$318.65M
Dividend Yield8.29%
Average Volume (3M)92.09K
Price to Earnings (P/E)8.2
Beta (1Y)0.86
Revenue Growth3.34%
EPS Growth10.20%
CountryCA
Employees81
SectorReal Estate
Sector Strength63
IndustryREIT - Diversified
Share Statistics
EPS (TTM)0.09
Shares Outstanding88,024,110
10 Day Avg. Volume113,179
30 Day Avg. Volume92,087
Financial Highlights & Ratios
PEG Ratio0.09
Price to Book (P/B)0.66
Price to Sales (P/S)0.00
P/FCF Ratio2.31
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
C$3.55Price Target Upside-1.93% Downside
Rating ConsensusHold
Number of Analyst Covering2
BTB REIT Business Overview & Revenue Model
Company DescriptionBTB is a real estate investment trust listed on the Toronto Stock Exchange. BTB is an important owner of properties in eastern Canada. As at November 10th, 2020, BTB owns 64 retail, office and industrial properties for a total leasable area of approximately 5.3 million square feet and an approximate total asset value as of September 30th, 2020 of approximately of $946M.
How the Company Makes MoneyBTB REIT generates revenue primarily through the leasing of its commercial properties. The company earns rental income from tenants who occupy its office, retail, and industrial spaces under long-term lease agreements. BTB REIT's revenue model is supported by the strategic acquisition of properties with high occupancy rates and favorable lease agreements, ensuring consistent cash flow. Additionally, the company may engage in property development or redevelopment projects to enhance the value of its portfolio, thus potentially increasing rental income. BTB REIT also benefits from economies of scale and operational efficiencies achieved through effective property management and cost control measures. Significant partnerships with real estate brokers, contractors, and property management firms also contribute to its earnings by enhancing the value and appeal of its assets.
BTB REIT Earnings Call Summary
Earnings Call Date:May 05, 2025
(Q1-2025)
| % Change Since: 8.38%|
Next Earnings Date:Aug 11, 2025
Earnings Call Sentiment Neutral
The earnings call highlighted strong rental revenue growth, increased net operating income, and positive leasing activity, alongside improvements in FFO and AFFO ratios and significant ESG achievements. However, challenges such as a decline in occupancy rates, debt refinancing difficulties, and softness in the industrial sector were also noted.Q1-2025 Updates
Positive Updates
Strong Rental Revenue Growth
Rental revenue for Q1 2025 stood at $34.4 million, marking a 5.4% increase compared to the same quarter last year.
Net Operating Income Increase
Net operating income totaled $19.8 million, an increase of 8% compared to the same quarter last year, driven by a $1 million cancellation payment among other factors.
Positive Leasing Activity
A total of 138,000 square feet was leased, including a significant 22,000 square foot transaction with the Government of Canada and a 30,352 square foot lease with Value Village.
Improved FFO and AFFO Ratios
FFO adjusted per unit increased by 8.8% to $0.111, while the AFFO payout ratio improved to 72.7% from 83.9% last year.
ESG Achievements
60% of suburban office and retail buildings have environmental certifications, and energy consumption data for 98% of buildings was compiled.
Negative Updates
Occupancy Rate Decline
The committed occupancy rate decreased by 200 basis points since Q1 2024, primarily due to a tenant bankruptcy in the industrial segment.
Debt Refinancing Challenges
Anticipated negative spread of 35 basis points for industrial segment refinancing and 180 basis points for a retail property with a low existing rate.
Industrial Sector Softness
The industrial segment experienced a slowdown, affecting leasing activity and requiring careful analysis for new investments.
Company Guidance
During the BTB Real Estate Investment Trust 2025 First Quarter Results Conference Call, key financial metrics were discussed, highlighting the positive performance and strategic initiatives of the company. BTB reported a total asset value of $1.3 billion, with 6.1 million square feet of real estate across 75 properties. The portfolio's occupancy rate stood at 92.5%, with a committed occupancy rate of 92.5% as well. Rental revenue increased by 5.4% to $34.4 million, and net operating income rose by 8% to $19.8 million, driven by higher rents and cancellation payments. The AFFO adjusted payout ratio improved to 72.7% from 83.9% the previous year, reflecting increased net operating income. The company issued Series I convertible debentures with a 7.25% coupon, raising $40.25 million, and used the proceeds to redeem Series H debentures and reduce credit facility debt. BTB maintained its distribution to unitholders at $0.075 per unit, resulting in an annualized distribution of $0.30 per unit. The total debt ratio was 57.7%, and liquidity improved significantly to nearly $31 million. Leasing activity included securing new long-term tenants, such as the Government of Canada, and achieving a 5.1% lease renewal spread.BTB REIT Financial Statement Overview
Summary
BTB REIT showcases a strong financial profile with consistent revenue and profit growth, efficient operations, and a stable balance sheet. While the company demonstrates excellent margin performance and cash flow generation, the high debt level and recent free cash flow contraction warrant monitoring.Income Statement
BTB REIT has demonstrated strong financial performance with consistent revenue growth over the years, increasing from $92.97M in 2020 to $131.81M in TTM. The gross profit margin remains robust at approximately 58% for TTM, indicating efficient cost management. The net profit margin is healthy at around 29.74% TTM, reflecting solid profitability. EBIT and EBITDA margins are also strong at 51.31% and 58.04% TTM, respectively, showcasing operational efficiency.85
Very Positive
Balance Sheet
The balance sheet reflects a stable financial position with a debt-to-equity ratio of 1.49 in TTM, which is typical for a REIT. The company maintains a healthy return on equity (ROE) of 7.91% TTM, indicating efficient use of equity. The equity ratio stands at 39.21% TTM, which reflects a balanced capital structure, though the high debt level is a point of caution.75
Positive
Cash Flow
BTB REIT's cash flow is strong, with a solid operating cash flow to net income ratio of 1.35 TTM, indicating robust cash generation. The free cash flow to net income ratio matches this, further emphasizing cash efficiency. However, the free cash flow growth rate is negative at -19.78% from the previous year, indicating some volatility in cash generation.78
Positive
| Breakdown | |||||
| TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 131.81M | 130.03M | 127.83M | 119.50M | 100.34M | 92.97M | Gross Profit |
| 76.50M | 75.05M | 75.38M | 70.43M | 56.34M | 51.26M | EBIT |
| 67.63M | 63.86M | 75.38M | 70.43M | 56.34M | 51.26M | EBITDA |
| 76.50M | 75.84M | 71.30M | 63.12M | 49.58M | 44.61M | Net Income Common Stockholders |
| 39.20M | 38.74M | 36.60M | 38.15M | 17.36M | -22.60M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 5.45M | 2.47M | 912.00K | 2.40M | 7.19M | 9.06M | Total Assets |
| 1.26B | 1.26B | 1.23B | 1.18B | 1.13B | 926.67M | Total Debt |
| 736.96M | 735.24M | 724.23M | 692.15M | 687.72M | 552.49M | Net Debt |
| 731.51M | 732.77M | 723.32M | 689.75M | 680.52M | 543.42M | Total Liabilities |
| 768.52M | 761.72M | 749.99M | 717.27M | 725.48M | 584.60M | Stockholders Equity |
| 495.94M | 494.28M | 477.65M | 462.07M | 404.43M | 342.07M |
| Cash Flow | Free Cash Flow | ||||
| 52.93M | 66.00M | 70.80M | 131.95M | 56.34M | 45.97M | Operating Cash Flow |
| 52.93M | 66.00M | 70.85M | 66.24M | 56.54M | 46.15M | Investing Cash Flow |
| -23.41M | -19.58M | -46.38M | -65.71M | -71.73M | 12.13M | Financing Cash Flow |
| -25.85M | -44.87M | -25.96M | 19.48M | 13.32M | -51.02M |
BTB REIT Technical Analysis
Positive
3.62
Price Trends
3.40
Positive
3.34
Positive
3.34
Positive
Market Momentum
0.06
Positive
65.56
Neutral
70.82
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:BTB.UN, the sentiment is Positive. The current price of 3.62 is above the 20-day moving average (MA) of 3.56, above the 50-day MA of 3.40, and above the 200-day MA of 3.34, indicating a bullish trend. The MACD of 0.06 indicates Positive momentum. The RSI at 65.56 is Neutral, neither overbought nor oversold. The STOCH value of 70.82 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for TSE:BTB.UN.
BTB REIT Peers Comparison
Overall Rating
UnderperformOutperform
Sector (61)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
78 Outperform | C$318.65M | 8.17 | 8.03% | 8.29% | 3.34% | 10.20% | |
77 Outperform | C$222.29M | 7.82 | 9.43% | 8.63% | 5.06% | 43.11% | |
73 Outperform | C$111.85M | 6.97 | 11.99% | 6.35% | -0.90% | 9.33% | |
72 Outperform | C$340.16M | 12.66 | 5.68% | 8.02% | -1.07% | 684.07% | |
61 Neutral | $2.86B | 10.96 | 0.41% | 6.08% | 5.73% | -21.25% | |
59 Neutral | C$375.75M | ― | -3.77% | 4.14% | 0.18% | 68.25% | |
56 Neutral | $71.17M | ― | -16.65% | 0.73% | -2.12% | -287.56% |
* Real Estate Sector Average
Performance Comparison
TSE:BTB.UN
BTB REIT
3.62
0.72
24.83%
TSE:FCD.UN
Firm Capital Property
5.95
1.37
29.91%
TSE:NET.UN
Canadian Net Real Estate Investment Trust Trust Units
5.43
0.84
18.30%
TSE:MR.UN
Melcor REIT
5.49
2.82
105.62%
TSE:MRT.UN
Morguard Real Estate ate
5.76
0.60
11.63%
TSE:PRV.UN
PRO Real Estate Investment
5.56
0.95
20.61%
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.