Canadian Apartment Properties Real Estate Investment Trust (CAR-UN) Q2 2024 earnings summary

Executive summary

• Achieved high occupancy of 98.2% as of June 30, 2024, with average rent at CAD 1,577 per month, driving a 5.4% year-over-year increase in operating revenues for Q2 2024.

• NOI rose 7.2% year-over-year, with margin expanding by 110 basis points to 67% in Q2 2024.

• Diluted FFO per unit increased 9.2% to CAD 0.644 in Q2 2024; six-month FFO per unit up 8.3%.

• Strategic focus on acquiring recently built Canadian properties and disposing of non-core assets, including full exit from IRES and announced sale of MHC portfolio for CAD 740 million.

• Increased annualized distribution to CAD 1.50 per unit, effective August 2024.

Financial highlights

• Operating revenues rose 5.4% to $278.1M and NOI increased 7.2% to $186.3M compared to Q2 2023.

• Net income for Q2 2024 was $112.1M, up from $40.0M in Q2 2023.

• Diluted FFO per unit up 9.2% to $0.644 for Q2 2024; FFO payout ratio improved to 56.2%.

• Net asset value per unit (diluted) reported at $55.05 as of June 30, 2024.

• Six-month same property occupancy at 98.3%, AMR growth at 6.5%.

Outlook and guidance

• Expect continued robust operational performance, with focus on high-quality acquisitions and further simplification of the business.

• Sale of MHC portfolio expected to close in Q4 2024, with proceeds to be redeployed into strategic opportunities.

• On track to meet or exceed $400M non-core Canadian property disposition target for 2024.

• Anticipate interesting market adjustments over the next 24 months due to supply fluctuations, with a robust long-term outlook.

• Ongoing integration of financial and non-financial risk-return parameters in investment strategy.