Today, I want to focus on a real estate investment trust (REIT) that offers exposure to the manufactured housing space. What is manufactured housing? These are often alternatively called mobile homes and are a type of prefabricated housing that are assembled in factories and then transported to designated sites for use.
Flagship Communities REIT (TSX:MHC.U) is a Toronto-based REIT that possesses a portfolio of U.S.-based manufactured housing communities. Shares of this REIT have dipped 1.5% month-over-month as of close on Wednesday, August 30. Moreover, the REIT has increased 1.5% so far in 2023. This sector is also remarkably profitable for owners of manufactured housing utilized space.
Investors should be eager to get in on this space in 2023 and beyond. Indeed, manufactured housing is on the rise south of the border. Allied Market Research recently valued the global manufactured housing market at US$27.1 billion in 2019. The same report projected that this market would reach a valuation of US$38.8 billion by 2027. That would represent a compound annual growth rate (CAGR) of 6.5% over the forecast period.
This REIT unveiled its second quarter (Q2) fiscal 2023 earnings on August 8. The REIT reported rental revenue growth of 21% to $17.4 million. Meanwhile, adjusted funds from operations (AFFO) per unit climbed 8.3% year-over-year to $0.26. Shares of this REIT are trading in favourable value territory compared to its industry peers at the time of this writing. Meanwhile, this REIT offers a monthly distribution of $0.047 per share. That represents a 3.5% yield.
