The Facts (as of March 15, 2012)

Share price: $37.12. Book value per share: $22.13. Market cap: $2.93 billion (large). Distribution: $0.18333 per month or $2.20 per year. Current yield: 5.9%. Debt/equity ratio:0.609. Payout ratio 63.8%.

The Story

Dundee’s portfolio comprises office and industrial properties located across Canada. As of December 31, 2011, its total gross leasable area was 18.9 million square feet. As of December 31, 2011, its ownership interests included 118 office properties (134 buildings) comprising 15.3 million square feet located in Vancouver, Calgary, Edmonton, Yellowknife, Saskatoon, Regina, Toronto, Kitchener-Waterloo, Ottawa, Montreal and Halifax. As of December 31, 2011, its industrial portfolio included 54 prime suburban industrial properties (57 buildings).

Dundee REIT just purchased Whiterock REIT. For me, as a unitholder of Whiterock, this is good news.

Pros

Dundee is a large company with liquid shares. They have a reasonable debt-to-equity ratio, a relatively low payout ratio and an attractive yield of almost 6%.

Cons

A recent $200 million equity offering. This will dilute current shareholders and increase the price-to-equity and price-to-book values.

Impression

I will hold the Dundee units that I receive in exchange for my Whiterock units, especially because of the ability to postpone realising capital gains. I will continue to evaluate alternatives, especially if there is an alternative with a higher yield.

Dundee REIT D.U

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