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Q1 2024 Highlights:
- Total portfolio occupancy rate of 96.8%, consistent with
March 2023 and a normal seasonal decrease of 20 basis points fromDecember 2023 . - Same-property portfolio occupancy rate of 96.8% in March, an increase of 10 basis points from
March 2023 , and a decrease of 20 basis points when compared toDecember 2023 . - Average Monthly Rent ("AMR") growth of 7.8% for the total portfolio and 7.1% for the same property portfolio for
March 2024 , as compared toMarch 2023 . - Executed 461 new leases, achieving an average gain-on-lease of 20.3% compared to expiring rents.
- For the three months ended
March 31, 2024 , same property proportionate Net Operating Income ("NOI") of$38.7 million , an increase of$4.0 million , or 11.7% year-over-year ("YoY"). - Total portfolio proportionate NOI of
$40.4 million , an increase of$4.1 million for the three months endedMarch 31, 2023 , or 11.2% YoY. - Same property NOI margin increased by 230 bps from
March 2023 to reach 65.2% for the three months endedMarch 31, 2024 . Total portfolio NOI margin of 65.0%, an increase of 210 bps YoY. - Funds from Operations ("FFO") of
$21.1 million for the three months endedMarch 31, 2024 , an increase of 11.7% compared to the same period last year. FFO per unit (diluted) of$0.144 , an increase of 10.8% YoY. - Adjusted Funds from Operations ("AFFO") of
$18.5 million , reflecting an improvement of 12.8%. AFFO per unit (diluted) of$0.126 , up 10.8% YoY. - Committed to sell non-core properties totalling 497 suites in the
National Capital Region for$92.0 million , or approximately$185,000 per suite, above their IFRS values. Proceeds, net of the mortgages associated with the properties and disposition costs, of approximately$66.5 million will be used to fund operating and investment priorities, consistent with the REIT's capital allocation strategy. The transaction is anticipated to close in Q2 2024.
"We delivered another quarter of significant growth in Revenue, Net Operating Income, and Funds from Operations per Unit. We anticipate that sustained strength in rental market fundamentals across all our markets will continue to underpin organic growth and performance in the years to come. We are also pleased to have further advanced our strategic disposition program and achieved premium pricing above IFRS fair values. So far in 2024, net proceeds from our two strategic dispositions have provided us with sufficient capital to fund our capital allocation priorities. With variable debt exposure already reduced to below 1%, we are now well positioned to pursue internal and external growth opportunities as well as NCIB. We will prudently execute our capital allocation strategy to drive long-term value for stakeholders."
Financial Highlights:
Selected Consolidated Information | 3 Months Ended | 3 Months Ended | Change |
Total suites | 12,544(1) | 12,689(1) | -1.1 % |
Average rent per suite (March) | $ 1,622 | $ 1,504 | +7.8 % |
Occupancy rate (March) | 96.8 % | 96.8 % | no change |
Proportionate operating revenues | $ 62,104 | $ 57,740 | +7.6 % |
Proportionate net operating income (NOI) | $ 40,396 | $ 36,321 | +11.2 % |
NOI % | 65.0 % | 62.9 % | +210 bps |
Same Property average rent per suite (March) | $ 1,635 | $ 1,526 | +7.1 % |
Same Property occupancy rate (March) | 96.8 % | 96.7 % | +10 bps |
Same Property proportionate operating revenues | $ 59,409 | $ 55,125 | +7.8 % |
Same Property proportionate NOI | $ 38,717 | $ 34,669 | +11.7 % |
Same Property NOI % | 65.2 % | 62.9 % | +230 bps |
Net Income (Loss) | $ 26,699 | $ 82,761 | -67.7 % |
Funds from Operations (FFO) | $ 21,128 | $ 18,910 | +11.7 % |
FFO per weighted average unit - diluted | $ 0.144 | $ 0.130 | +10.8 %
|
Adjusted Funds from Operations (AFFO) | $ 18,534 | $ 16,430 | +12.8 % |
AFFO per weighted average unit - diluted | $ 0.126 | $ 0.113 | +11.5 % |
Distributions per unit | $ 0.0945 | $ 0.0900 | +5.0 % |
Adjusted Cash Flow from Operations (ACFO) | $ 15,202 | $ 8,194 | +85.5 % |
Debt-to-GBV | 37.5 % | 38.0 % | -50 bps |
Interest coverage (rolling 12 months) | 2.31x | 2.52x | -0.21x |
Debt service coverage (rolling 12 months) | 1.55x | 1.59x | -0.04x |
(1) | Represents 11,876 (2023 - 12,021) suites fully owned by the REIT, 1,214 (2023 - 1,214) suites owned 50% by the REIT, and 605 (2023 - 605) suites owned 10% by the REIT. |
Fundamentals Underpin Sustained Top-Line Growth
Including properties that the REIT owns in its joint ventures, InterRent owned or managed 13,695 suites at
Momentum in AMR growth continued during the quarter, reaching 7.8% in
Rent growth is robust across all regional markets, with the most significant increases in GVA and Other Ontario, each exceeding 8% in total and same property AMR growth.
Occupancy rates in
Driven by AMR growth and leasing demand, the REIT achieved strong gross rental revenue of
Delivered Double-Digit FFO and AFFO Growth
InterRent achieved a 11.7% increase in Funds from Operations and a 10.8% increase in FFO per unit. AFFO growth was 12.8% and 11.5% on a per unit basis. This growth in FFO and AFFO was attributable to increased NOI and was partially offset by higher interest expenses. Financing costs in Q1 amounted to
Net income for the quarter was
Disciplined Capital Allocation Strengthens Balance Sheet
During the quarter, InterRent successfully executed refinancing activities that reduced the weighted average cost of mortgage debt to 3.37% from 3.50% and increased overall term to maturity to 5.1 years from 4.7 years at the end of 2023. As of
Strategic Dispositions of Non-Core Assets in NCR
During Q1 2024, InterRent committed to the sale of non-core properties, totalling 497 suites in the
The combined net proceeds from this disposition, along with the one in the
Sustainability Progress
InterRent remains committed to advancing sustainability initiatives to enhance efficiency, reduce carbon footprints, and build resilience against climate change impacts. During the quarter, the REIT invested approximately
InterRent provided energy training sessions to operations, construction, and asset management teams across three regional markets to enhance awareness and empower its team members to actively contribute to energy conservation efforts.
The REIT is set to release its sustainability report in the upcoming weeks to provide stakeholders with updates on the REIT's sustainability initiatives, progress made, and future sustainability goals.
Conference Call & Webcast
Management will host a webcast and conference call to discuss these results and current business initiatives on
ABOUT INTERRENT
InterRent REIT is a growth-oriented real estate investment trust engaged in increasing Unitholder value and creating a growing and sustainable distribution through the acquisition and ownership of multi-residential properties.
InterRent's strategy is to expand its portfolio primarily within markets that have exhibited stable market vacancies, sufficient suites available to attain the critical mass necessary to implement an efficient portfolio management structure, and offer opportunities for accretive acquisitions.
InterRent's primary objectives are to use the proven industry experience of the Trustees, Management and Operational Team to: (i) to grow both funds from operations per Unit and net asset value per Unit through investments in a diversified portfolio of multi-residential properties; (ii) to provide Unitholders with sustainable and growing cash distributions, payable monthly; and (iii) to maintain a conservative payout ratio and balance sheet.
*Non-GAAP Measures
InterRent prepares and releases unaudited quarterly and audited consolidated annual financial statements prepared in accordance with IFRS (GAAP). In this and other earnings releases, as a complement to results provided in accordance with GAAP, InterRent also discloses and discusses certain non-GAAP financial measures, including Gross Rental Revenue, NOI, Same Property results, Repositioned Property results, FFO, AFFO, ACFO and EBITDA. These non-GAAP measures are further defined and discussed in the MD&A dated
Cautionary Statements
The comments and highlights herein should be read in conjunction with the most recently filed annual information form as well as our consolidated financial statements and management's discussion and analysis for the same period. InterRent's publicly filed information is located at www.sedarplus.com.
This news release contains "forward-looking statements" within the meaning applicable to Canadian securities legislation. Generally, these forward-looking statements can be identified by the use of forward-looking terminology such as "plans", "anticipated", "expects" or "does not expect", "is expected", "budget", "scheduled", "estimates", "forecasts", "intends", "anticipates" or "does not anticipate", or "believes", or variations of such words and phrases or state that certain actions, events or results "may", "could", "would", "might" or "will be taken", "occur" or "be achieved". InterRent is subject to significant risks and uncertainties which may cause the actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward looking statements contained in this release. A full description of these risk factors can be found in InterRent's most recently publicly filed information located at www.sedar.com. InterRent cannot assure investors that actual results will be consistent with these forward looking statements and InterRent assumes no obligation to update or revise the forward looking statements contained in this release to reflect actual events or new circumstances.
The
SOURCE
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