07:47 AM EDT, 09/04/2024 (MT Newswires) -- Cap rates in the Canadian real estate sector may begin to decline, TD Securities said on Wednesday.

"Having come through nearly two years of cap rate expansion, we believe cap rates could now start to edge lower," analyst Sam Damiani said in a note to clients.

"At a minimum we see little risk of further meaningful cap rate expansion - which should allow NAV estimates to begin increasing as NOI continues to grow," Damiani said. "Any cap rate compression would add to this growth."

The analyst said he raised his target prices 6% on average for the Canadian REIT and real estate group (26 stocks) as a result of this improved outlook.

Damiani's target on RioCan REIT (REI-UN.TO) (Buy) increased to $22 from $21, Granite REIT (GRT-UN.TO) (Buy) to $91 from $87, Canadian Apartment Properties REIT (CAR-UN.TO) (Buy) to $62 from $60, Chartwell Retirement Residences (CSH-UN.TO) (Buy) $18 from $14.50, and H&R REIT (HR-UN.TO) (Buy) to $12 from $11.

(MT Newswires covers equity, commodity and economic research from major banks and research firms in North America, Asia and Europe. Research providers may contact us here: https://www.mtnewswires.com/contact-us)