Automotive Properties Real Estate Investment Trust (APR-UN) Q3 2024 earnings summary

Executive summary

• Achieved solid financial performance in Q3 2024, driven by contractual rent increases, CPI-linked escalations, and prior year acquisitions.

• Entered new industry verticals and geographies, including heavy equipment dealerships in Greater Montreal and an EV-focused property in Tampa, Florida.

• Closed the sale of Kennedy Lands for CAD 54 million, a 79% premium to IFRS value, unlocking significant value and repaying revolving credit facilities.

• Proceeds from asset sales were redeployed into accretive growth opportunities, supporting future AFFO growth.

Financial highlights

• Property rental revenue rose 0.7% year-over-year to CAD 23.5 million in Q3; YTD up 1.8% to CAD 70.5 million.

• Cash NOI increased 2.4% and same-property cash NOI rose 2.2% compared to Q3 last year.

• AFFO per unit (diluted) increased to CAD 0.233 from CAD 0.23 year-over-year; AFFO payout ratio improved to 86.3% from 87.4%.

• Net income was CAD 1.8 million, down from CAD 28.3 million in Q3 2023, mainly due to non-cash fair value adjustments.

• FFO per unit (diluted) was CAD 0.237, down slightly from CAD 0.239; FFO payout ratio at 84.8%.

Outlook and guidance

• Expect ongoing growth in unitholder distributions, supported by essential retail/service properties and embedded rental growth.

• Acquisitions expected to close in Q4 2024 and Q1 2025, anticipated to be accretive to AFFO per unit and enhance diversification.

• Special distribution to be declared in December, primarily in units, due to taxable income from Kennedy Lands sale.

• REIT expects continued industry consolidation and plans to grow its portfolio in Canada and the U.S.

• Inflation, interest rates, and capital availability remain key risks but may present buying opportunities.