BMO Equity Research IN Tune

Brian G. Belski, Chief Investment Strategist.There is no denying that headlines, fear and rhetoric surrounding the coronavirus (COVID-19 virus) have become the primary driver of investment performance the past several weeks. While the duration and volume of COVID-19 virus-related news is yet to be determined, we continue to counsel investors to control what they can control. Investors should be mindful that perspective matters, to remain poised and patient in their decision making, and to trust their investment process.BMO clients can view recent Strategy reports by visiting: https://researchglobal0.bmocapitalmarkets.com/strategy/reports/To access our full disclosures, please visit: https://researchglobal0.bmocapitalmarkets.com/public-disclosure/

Jenny Ma, Canadian Real Estate Analyst, and Gaurav Mathur, Real Estate/REITs Special Projects Analyst.Development and intensification activities have become increasingly important for Canadian retail REITs as they look for new avenues to drive growth amid ongoing challenges facing bricks-and-mortar retail. Development is a relatively new component of REIT strategies, however, with a number of projects at or near completion, combined with improved disclosures on individual projects, costs, and returns, it’s time to start giving credit for development activities. We created a proprietary framework which allows us to use a consistent methodology to value individual REIT development projects, which in many cases is incremental to NAV. We expect the development theme to remain topical as many Canadian REITs look for value-add opportunities to unlock growth.BMO clients can view our report, “Time to Value Development”, by visiting: https://researchglobal0.bmocapitalmarkets.com/research/910777bc-8f02-4af0-8029-4d777977242f/To access our full disclosures, please visit: https://researchglobal0.bmocapitalmarkets.com/public-disclosure/

Fadi Chamoun, Transportation Analyst & John Stephenson, Special Projects Contributor.Rising e-commerce volumes are increasingly becoming the dominant share of small package delivery volumes, pressuring operating margins and ROICs for related companies. The biggest driver of profitability for the industry is drop density, which is significantly lower for residential deliveries than for business deliveries, and we see no reasonable path toward improving B2C (business-to-consumer) drop density. Incumbent delivery companies are further challenged by Amazon, as its strong buying power and logistics capabilities have allowed it to set service standards and pricing for B2C deliveries.BMO clients can view our report, “Delivery Dilemma: How E-Commerce Is Disrupting Last Mile Logistics”, by visiting: https://researchglobal0.bmocapitalmarkets.com/research/d42a28f4-66c1-48fc-a1f2-4fc55ca335a7/To access our full disclosures, please visit: https://researchglobal0.bmocapitalmarkets.com/public-disclosure/