1 Sneaky E-Commerce Play Poised for Growth
The Motley Fool
Published Jun 13, 2021 13:45
Updated Jun 13, 2021 14:15
1 Sneaky E-Commerce Play Poised for Growth
Of course, just like any other sector, the real estate sector has suffered due to the pandemic. Indeed, commercial REITs were met with uncertainty about how Canadians may shop and work in future.
In such a situation, when REIT executives and investors are hoping for the market to return to normal, one sneaky play seems to be well positioned for growth.
Granite REIT (TSX:GRT.UN), a REIT based in Canada, has successfully tapped the surging e-commerce demand for large distribution centres.
Accordingly, here’s why I think this REIT play has ample room for growth .
Robust portfolio of high-quality assets Granite is a popular name in the REIT sector and is recognized as an owner of industrial and warehouses properties in North America and Europe.
In this past year, and mostly due to pandemic, businesses witnessed a surge in e-commerce activity. This has led to a burgeoning demand for large-scale distribution centres.
Indeed, the supply of these distribution centres is still relatively low when compared to the need for industrial property. With its robust portfolio in tow, Granite is focusing on filling the gap between demand and supply of commercial spaces as much as possible.
Accordingly, such a trend is very bullish for the potential for income growth on the horizon. The ability for Granite to raise rents considerably over time is something investors shouldn’t underestimate. In the real estate business, income generation is everything. And, in my opinion, Granite is well positioned to tap into these rapidly developing trends.
This REIT is involved in acquisition, development, and management and ownership of warehouse, logistics, and industrial properties. On the acquisition front, the company has been busy in recent years. Granite has amassed a portfolio of 108 properties including roughly 45.3 million sq ft. of leasable area. This gives Granite an upper hand when aligning its business model to the current supply and demand dynamics in the market.
Bottom line Granite REIT is well known for owning a large number of properties and distribution hubs near city centres and major transportation hubs. Indeed, this makes Granite a viable option for its many blue-chip clients.
I think industrial real estate, particularly of the quality in Granite’s portfolio, is undervalued. Additionally, I think this REIT has a tremendous amount of upside potential related to rental increases over time.
Accordingly, Granite REIT remains one of my top ideas in the real estate space today. Those looking to diversify into alternative assets can’t do much better than this stock right now.
The post 1 Sneaky E-Commerce Play Poised for Growth appeared first on The Motley Fool Canada.
Get The App
Fool contributor Chris MacDonald has no position in any stocks mentioned in this article. The Motley Fool recommends GRANITE REAL ESTATE INVESTMENT TRUST.
This Article Was First Published on The Motley Fool
Written By: The Motley Fool
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.