Riocan RealEstate continues to impress investors with solid returns and operational results. http://www.marketwatch.com/story/riocan-real-estate-investment-trust-announces-results-for-the-second-quarter-ended-june-30-2010-2010-07-29?reflink=MW_news_stmp
Though I have held it for a number of years, Riocan will remain one of my core holdings for a number of key reasons:
When analysing a real estate investment trust, FFO, or FFO per unit is a key measure of how cash-flow rich the business really is. Remember, real estate operations have significant amounts of depreciation etc. from their buildings, so "income" is not always the best indicator of financial health.
-- Funds from operations ("FFO") increased by 37% to $92.8 million in the second quarter of 2010 compared to $67.9 million in the second quarter of 2009. On a per unit basis FFO increased 26% to $0.38 per unit from $0.30 per unit in the same period of 2009.
Net operating income increased as well, by a healthy margin.
-- Second quarter net operating income ("NOI") increased 17% or $20.4 million versus the second quarter of 2009 and increased 17% or $39.4 million for the first six months of 2010 versus the same period in 2009.
And last but not least, the company continues to maintain a strong occupancy rate both in Canada and the United States, with no tenant contributing more than 5 percent to revenue!
-- Maintained strong occupancy rate of 97.0%; and had cash on hand of $65.3 million at quarter end.
It is clear that RioCan remains strong and healthy, and with a distribution of 12 cents per month for each unit, this business actually pays you to invest, unlike many other businesses these days.