Interrent Real Estate Investment Trust

Latest Results (20.08.2024):

Operating Strength Continues in Q2

InterRent Real Estate Investment Trust achieved sustained momentum in rent growth, with total portfolio AMR for June 2024 reaching $1,660 per suite, an increase of 8.4% from the same period last year. Same property AMR for June was $1,658, an increase of 6.8% year-over-year. Rent growth was robust across all regional markets. Occupancy rates remained steady and in line with the REIT’s strategic target for optimal levels. Total-portfolio and same-property occupancy rates for the month of June 2024 of 96.2% reflect year-over-year improvements of 80 basis points and 70 basis points, respectively, from the same period last year.

Solid Revenue Growth with Healthy NOI Margin

Driven by strong AMR growth and leasing demand, InterRent Real Estate Investment Trust achieved same-property proportionate operating revenues of $60.0 million, an increase of 7.6% year over year. Operating expenses increased in Q2 from the same quarter last year. However, property operating costs, property taxes and utility costs as a percentage of revenue decreased year-over-year, resulting in margin expansion of 130 basis points for the same property portfolio reaching 67.7% during the quarter. Proportionate NOI for the same-property portfolio was $40.6 million, a 9.7% increase and total-portfolio NOI increased 6.8% to reach $41.7 million.

Disciplined Capital Recycling Strategies in Action

During the quarter, InterRent Real Estate Investment Trust successfully completed the previously announced strategic disposition of a non-core community located in Aylmer, Quebec for a total sale price of $92.0 million, or $185,000 per suite. Additionally, the REIT has sold one community comprising 27 suites in Ottawa, Ontario for $5.5 million, or $204,000 per suite. Both dispositions achieved prices above the properties’ IFRS values. Including properties that the REIT owns in its joint ventures, InterRent owned or managed 13,175 suites at June 30, 2024. Proceeds from the dispositions were partially used to repurchase units under the NCIB.

Delivered Outsized FFO and AFFO Growth

InterRent Real Estate Investment Trust achieved a 17.9% increase in FFO and a 17.2% increase in FFO per unit. AFFO growth was 20.9% and 19.0% on a per unit basis. This growth in FFO and AFFO was driven by increased NOI and reduced financing costs, and partially offset by dispositions which negatively impacted FFO per unit by $0.003 in Q2. Financing costs amounted to $14.2 million on a proportionate basis, or 23.0% of operating revenue, compared to $15.0 million, or 25.5% of operating revenue for the same period last year.

Strong and Flexible Financial Position

InterRent Real Estate Investment Trust has kept its variable rate exposure, including credit facilities, at below 1%, compared to 8.4% as of June 2023. At June 30, 2024, approximately 90% of InterRent’s mortgage debt was backed by CMHC insurance, unchanged from March 2024. Average term to maturity of the mortgage debt was approximately 4.8 years, compared to 5.1 years at the end of March. InterRent’s current credit facilities totaling $225.0 million were undrawn as of June 30, 2024. The REIT has approximately $142.1 million in unencumbered properties and approximately $320 million in available liquidity as of July 31, 2024.