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Introduction
Automotive Properties REIT (TSX:APR.UN:CA) focuses on owning automotive dealership properties across Canada. The REIT obtained its listing in 2015 when Dilawri decided to list the commercial properties. The REIT listed with 26 assets, of which 24 were occupied by the Dilawri Group which still is the REIT’s largest shareholder and the largest tenant (leasing almost 60% of the Gross Lettable Area owned by the REIT) as 36 of the 72 properties owned by the REIT are leased to a Dilawri company. While these ties may sometimes be seen as a negative, it looks like Dilawri has been paying a fair rent and the strong relationship between the REIT and the Dilawri Group may actually be a positive here, as the REIT has a right of first refusal on real estate assets the Dilawri Group would want to divest.
Data by YCharts
Automotive Properties REIT has its main listing in Canada where it’s trading with APR (or APR.UN or APR-UN depending on your broker). The average daily volume is approximately 30,000 shares for just under half a million Canadian Dollar. There are currently about 49 million units outstanding (39.7M common units and 9.3M Class B units), resulting in a market capitalization of just under C$640M if you would assume the Class B units will be converted into common units.
Long-term lease contracts provide excellent earnings visibility
One of the elements I like about Automotive Properties is not just the strong relationship with the Dilawri Group, but the long-term leases on the assets. The REIT has zero (!) lease expiries before 2026 and in excess of 50% of the base rent of the existing leases expires from the second half of 2033 on. This means the visibility is excellent.
APR Investor Relations
Additionally, the REIT is not