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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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Rating:79Outperform
Price Target:
C$6.50
▲(17.75% Upside)
The stock's strong financial performance and attractive valuation are the most significant factors driving the score. Positive technical indicators and a favorable earnings call further support the stock's potential, despite some market challenges.
Canadian Net Real Estate Investment Trust Trust Units (NET.UN) vs. iShares MSCI Canada ETF (EWC)
Market Cap
C$113.70M
Dividend Yield6.27%
Average Volume (3M)10.12K
Price to Earnings (P/E)4.8
Beta (1Y)0.25
Revenue Growth-0.21%
EPS GrowthN/A
CountryCA
Employees4
SectorReal Estate
Sector Strength53
IndustryREIT - Diversified
Share Statistics
EPS (TTM)-0.07
Shares Outstanding20,597,637
10 Day Avg. Volume12,759
30 Day Avg. Volume10,119
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)N/A
P/FCF RatioN/A
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 Upside17.75% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering2
Canadian Net Real Estate Investment Trust Trust Units Business Overview & Revenue Model
Company DescriptionCanadian Net Real Estate Investment Trust Trust Units (NET.UN) is a publicly traded real estate investment trust focused on owning and managing income-producing properties primarily in Canada. The company invests in a diverse portfolio of commercial real estate assets, including retail, industrial, and office properties, aiming to provide steady income and long-term capital appreciation for its unitholders.
How the Company Makes MoneyCanadian Net Real Estate Investment Trust generates revenue primarily through rental income from its portfolio of commercial properties. The trust enters into long-term lease agreements with tenants across various sectors, ensuring a stable cash flow. Additionally, the trust may engage in the acquisition and disposition of properties to optimize its portfolio and enhance returns. Strategic partnerships with property managers and real estate developers can further contribute to its earnings by improving property management efficiency and identifying lucrative investment opportunities. The trust's revenue model focuses on maintaining high occupancy rates and increasing rental rates in line with market conditions to maximize profitability.
Canadian Net Real Estate Investment Trust Trust Units Earnings Call Summary
Earnings Call Date:Aug 19, 2025
(Q2-2025)
| % Change Since: |
Next Earnings Date:Nov 19, 2025
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 exhibits strong financial health with consistent revenue growth and robust cash flow management. Profitability metrics are improving, but increasing debt levels and missing EBIT data in the latest period require attention.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.75
Positive
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.70
Positive
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.80
Positive
| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 26.73M | 26.12M | 26.55M | 24.73M | 18.95M | 12.99M |
| Gross Profit | 19.31M | 18.92M | 19.43M | 18.37M | 14.32M | 9.87M |
| EBITDA | 30.72M | 14.33M | 18.08M | 16.75M | 29.91M | 12.88M |
| Net Income | 23.59M | 7.10M | 18.22M | -6.49M | 25.09M | 9.62M |
Balance Sheet | ||||||
| Total Assets | 316.84M | 301.32M | 308.35M | 303.06M | 278.17M | 209.71M |
| Cash, Cash Equivalents and Short-Term Investments | 1.84M | 1.57M | 987.72K | 2.20M | 1.78M | 5.54M |
| Total Debt | 176.99M | 167.51M | 174.71M | 180.10M | 144.71M | 115.79M |
| Total Liabilities | 181.91M | 171.88M | 178.86M | 184.37M | 148.35M | 119.50M |
| Stockholders Equity | 134.93M | 129.44M | 129.49M | 118.69M | 129.81M | 90.21M |
Cash Flow | ||||||
| Free Cash Flow | 11.88M | 10.65M | 11.25M | 56.02M | 9.26M | 78.94M |
| Operating Cash Flow | 11.88M | 10.65M | 11.25M | 11.33M | 9.26M | 6.19M |
| Investing Cash Flow | -10.10M | 3.72M | 2.71M | -41.56M | -55.79M | -73.82M |
| Financing Cash Flow | -1.79M | -14.48M | -13.18M | 29.83M | 42.68M | 71.79M |
Canadian Net Real Estate Investment Trust Trust Units Technical Analysis
Neutral
5.52
Price Trends
5.50
Positive
5.39
Positive
5.22
Positive
Market Momentum
0.01
Positive
47.83
Neutral
31.17
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:NET.UN, the sentiment is Neutral. The current price of 5.52 is below the 20-day moving average (MA) of 5.56, above the 50-day MA of 5.50, and above the 200-day MA of 5.22, indicating a neutral trend. The MACD of 0.01 indicates Positive momentum. The RSI at 47.83 is Neutral, neither overbought nor oversold. The STOCH value of 31.17 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for TSE:NET.UN.
Canadian Net Real Estate Investment Trust Trust Units Peers Comparison
Overall Rating
UnderperformOutperform
Sector (65)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
79 Outperform | C$113.70M | 4.81 | 18.62% | 6.27% | -0.21% | ― | |
79 Outperform | 223.77M | 9.34 | 11.06% | 8.84% | 3.24% | 3.36% | |
79 Outperform | 393.13M | 13.96 | 5.16% | 7.68% | -0.28% | 206.65% | |
76 Outperform | 332.77M | 8.77 | 7.69% | 8.21% | 1.59% | 19.74% | |
41 Neutral | 34.06M | -0.94 | -9.49% | ― | -28.04% | 18.47% | |
65 Neutral | $2.17B | 12.19 | 3.79% | 4.94% | 3.15% | 1.96% |
* Real Estate Sector Average
Performance Comparison
TSE:NET.UN
Canadian Net Real Estate Investment Trust Trust Units
5.52
0.40
7.81%
TSE:BTB.UN
BTB REIT
3.77
0.51
15.64%
TSE:MPCT.UN
Dream Impact Trust
1.85
-2.26
-54.99%
TSE:FCD.UN
Firm Capital Property
6.06
0.82
15.65%
TSE:PRV.UN
PRO Real Estate Investment
5.86
0.64
12.26%
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.