# Interest Rates and CHP.UN



## newfoundlander61 (Feb 6, 2011)

CHP.UN is held in a TFSA account and as expected its share price does not move up much which I expected. Going forward will this specific reit be effected negatively by increasing interest rates once they begin. I do expect rates if they go up to do so slowly over time. Thanks for any opinions on this.


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## Beaver101 (Nov 14, 2011)

I don't hold CHP.UN but do hold other REITS such as one PLZ.UN (since early year 2013) with the purpose of self-sustainance (aka on DRIPs) in 2 registered accounts. I thought the beginning of a "pandemic" would have wiped it out but apparently not. In fact, its current price is higher than my ACB as just checked so no complaint here.​​If you're concerned with "higher" interest rates impacting your REIT, then yours would not be the only one. IMO, the only concerning type of REITs (for the long term) are those that are heavily invested in office towers/commercial buildings with the protracting pandemic.​


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## AltaRed (Jun 8, 2009)

Most REITs have been busy over the last few years re-financing and extending mortgage durations to mitigate interest rate hikes. One would need to look into individual MD&A Discussions to see where a particular REIT is at in this regard. I suspect given the trend by REITs to extend durations, the actual impact of hikes on cash flow won't be as significant as investors might be assuming.


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## james4beach (Nov 15, 2012)

How do you know interest rates are going up? What if they go down?

And if interest rates are certain to go up, wouldn't the pricing already reflect this expectation? Everyone else would already know about it.


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## AltaRed (Jun 8, 2009)

FWIW, the yield curve has already gone up some.


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## londoncalling (Sep 17, 2011)

james4beach said:


> How do you know interest rates are going up? What if they go down?
> 
> And if interest rates are certain to go up, wouldn't the pricing already reflect this expectation? Everyone else would already know about it.


I guess the problem lies in that nobody knows for certain or at which pace rates or the market will move. Active investors try to leverage this to their advantage. I don't know what will happen for sure just like I don't know if it will snow tomorrow even if the forecast says it will. What I do know is that it is more likely to snow this month than say August. Most people would agree with that statement as well but nobody know exactly when or how much it will snow. In the short term it's about betting on the probabilities. in the long run it's about selecting good companies and monitoring their performance along with a million other factors. 

hold CHP.UN and continue to hold. The properties they own are well located and their tenants are primarily grocery and pharma. There is the possibility of disruption due to the likes of Amazon. Walmart was once a threat to the Loblaw's brand and they seemed to overcome that. I would say this is a greater concern with the long term performance of CHP.UN than interest rate movements. Every company will be impacted by change in interest rate policy. Some will benefit. Others will not. This is dependent on debt load and mortgage renewals as @AltaRed has noted upthread. If there is a dip in the market I would consider adding based on current information.


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