Canadian Apartment Properties Real Estate Investment Trust (CAR-UN) Q2 2025 earnings summary

Executive summary

• Achieved CAD 274 million in Canadian non-core asset sales and CAD 743 million in European dispositions, reinvesting proceeds into high-performing Canadian properties and NCIB buybacks.

• Increased Canadian same-property occupancy to 98.3% and average monthly rent by 5.2% year-over-year as of June 30, 2025.

• Strategic acquisitions in Canada totaled CAD 165 million, while CAD 187 million was allocated to trust unit repurchases via the NCIB program at a 24% discount to NAV.

• Focused on operational excellence, cost containment, and portfolio high-grading, with a strategic shift toward a pure-play Canadian apartment REIT.

• Enhanced operational performance through rent optimization and expense control, driving higher occupancy and NOI margin.

Financial highlights

• Same-property NOI margin expanded by 40 bps to 66.3% for Q2 2025, with same property NOI rising 4.9% to CAD 154.1 million.

• Diluted FFO per unit rose 2.6% to CAD 0.661 for Q2 2025; for the six months ended June 30, 2025, diluted FFO per unit was CAD 1.246.

• Operating costs as a percentage of revenues decreased in Q2 2025 versus Q2 2024, aided by the elimination of the federal carbon tax and improved procurement.

• Net Asset Value per unit (diluted) reached CAD 56.14 as of June 30, 2025.

• Total debt-to-gross book value ratio improved to 38.5% from 41.5% year-over-year.

Outlook and guidance

• Management expects continued stability in occupancy and rents, with a focus on internal optimization and cost control.

• Targeting CAD 400 million in Canadian dispositions for the remainder of 2025, with plans to match proceeds with acquisitions, especially as European capital is repatriated.

• Ongoing NCIB activity is expected to generate further accretion, with CAD 187 million invested in unit repurchases year-to-date.

• COVID lease turnover expected to bleed out over the next 12–18 months, after which embedded mark-to-market rent growth should become more visible.

• ERES expects to declare a special distribution to unitholders, subject to completion of pending European asset sales.