Canadian REIT Valuations 5/16/25

Tariffs, Hudson's Bay, Immigration, Valuation Tables, 1Q25 Results and Commentary

Investment Advice from Kensington Market

Uncertainty its high, but investors are overlooking potentially better than expected outcomes. Key updates:

• Immigration: REIT managements are hopeful for easing of restrictions

• Tariffs: REIT managements have seen very limited impact so far, but uncertainty may have delayed tenant decisions, especially for Industrial property

• Hudson’s Bay: REITs have very limited exposure and will benefit from releasing of vacant spaces at higher rates.

Key ideas:

• H&R offers the best balance of potential return vs risk. A segregation of Core vs Transition assets shows how much progress has been achieved in the Repositioning plan and provides a framework for reviewing what remains to be done.

• Retail properties have the best fundamental strength

• Dream Industrial has multiple initiatives to build value over the next year and the unit price has been temporarily depressed by sale of a block by Dream Office

• Dream Office has delivered two of the catalysts I expected in 1H25 (asset sale and leasing), but Artis may have stepped back from unit purchases or initiatives to force value realization.