Two real estate investment trusts (REITs) are in the newly announced Venture 50, recognizing the top performers last year on the TSX Venture Exchange for emerging companies. European Residential REIT ranked fourth and Nexus REIT ranked seventh in the diversified industries category — one of five industry sectors, along with clean technology/life sciences, energy, mining and technology, in which top-10 companies are identified.
Venture 50 accolades are awarded based on three equally weighted criteria for one-year gains in share price, trading volume and market capitalization. To qualify, companies had to be listed on the Venture Exchange (TSXV) for at least a year previous to and including December 31, 2019; record a closing share price of at least $0.10 on December 31, 2018 and at least $0.25 on December 31, 2019; and boast a market capitalization of at least $5 million on December 31, 2019. Top performers were named from 349 companies meeting that threshold and a total of 1,681 TSXV listed companies at year-end.
“We are especially proud to recognize this year’s Venture 50 winners, a diverse cross-section of visionary, early-stage companies that have performed well during challenging market conditions,” says Brady Fletcher, TSXV managing director.
As the name indicates, Toronto-headquartered European Residential (ERES) REIT is focused on building a portfolio of multifamily properties in key European markets. Currently, that’s concentrated in the Netherlands, with key pieces acquired from CAPREIT’s Dutch holdings.
CAPREIT serves as asset manager and property manager for ERES REIT’s 122 multifamily assets, encompassing more than 5,100 suites, while CAPREIT chief financial officer Scott Cryer additionally fills that role for ERES REIT. The portfolio also includes three commercial buildings, located in Belgium and Germany, managed by Maple Knoll Capital.
“We expect to see a meaningful increase in fee revenue as we provide property and asset management services to the growing ERES portfolio while also providing our unit-holders with the ability to participate through our increased ownership position in ERES as they prosper going forward,” CAPREIT president and chief executive officer Mark Kenney remarked upon the closing of last September’s €170.5 million (CAD $243.8 million) deal for an 18-building, 942-unit portfolio in the Netherlands.
Unit-holders enjoyed a 24 per cent increase in share price last year, as it rose from $3.75 to $4.65 over the 12 months ending December 31, 2019. The market cap grew 341 per cent — from $60.77 million to nearly $268 million —
in the same period, with approximately 57.6 million outstanding shares at year-end.
Nexus REIT saw a 15 per cent increase in share price, from $1.80 to $2.17, over the course of 2019. The market cap gained 26 per cent, from $175.2 million to $221.6 million, ending the year with more than 102 million outstanding shares. The company now owns and manages a 72-property portfolio of office, industrial and retail buildings with a combined total of 4 million square feet of rentable space.
“We are extremely proud to have earned 2020 TSX Venture 50 ranking,” says Nexus REIT chief executive officer Kelly Hanczyk. “We believe there is significant value creation potential in our portfolio, which we plan to begin executing this year. We are looking at graduating to the TSX in the near future.”
The top performer in the diversified industries category, British Columbia-based Well Health Technologies Corp., already made that move in January 2020 — the sole company in the Venture 50 to have done so thus far this year. Meanwhile, another real estate based company, StorageVault Canada Inc., ranked second among diversified industries and is unique among the Venture 50 for finishing the year with a market cap in excess of $1 billion. StorageVault saw a 57 per cent increase in share price, from $2.37 to $3.71, and 60 per cent growth in market capitalization, from $843 million to $1.3 billion, during 2019.
Clean technology player, dynaCERT Inc., claimed the title as last year’s top-performer in the TSX Venture Exchange, registering a 248 per cent increase in share price. It jumped from $0.19 to $0.71, while the market cap grew from $49.3 million to $229 million, or by 384 per cent.
“We celebrate these compelling success stories and many more across TSXV, the foundation of the world’s premier two-tiered capital formation ecosystem and an engine of opportunity for issuers and investors alike,” Fletcher asserts.