Choice Properties Real Estate Investment Trust (CHP.UN) Q4 2023 earnings summary

Executive summary

• FY2023 FFO was $1.003/unit, up 4.0%; same-asset NOI grew 4.6% and occupancy reached 98.0%.

• Strong performance was supported by grocery-anchored, necessity-based retail and demand for well-located industrial assets.

• Development deliveries added 1.8M sq. ft. of commercial space on a proportionate-share basis; priorities include portfolio quality, operational excellence and development.

Financial highlights

• FY2023 rental revenue was $1.309B, up from $1.265B; GAAP net income was $796.7M, versus $744.3M in FY2022.

• Q4 FFO was $0.255/unit, up 5.8% YoY; AFFO was $0.176/unit, up 0.6%, and same-asset NOI, cash basis, was $236.9M, up 4.2%.

• FY2023 FFO was $726.1M, or $1.003/diluted unit, up 4.0%; AFFO was $598.4M, or $0.827/diluted unit, up 2.9%.

• FY2023 same-asset NOI, cash basis, was $932.1M, up 4.6%; the diluted AFFO payout ratio improved to 90.5% from 92.0%.

• FY2023 distribution was $0.75/unit; total annualized return since the 2013 IPO was 9.1%, versus 5.6% for retail REIT peers and 5.7% for the TSX REIT Index.

Outlook and guidance

• FY2024 guidance: same-asset NOI growth of 2.5%–3.0%, diluted FFO of $1.02–$1.03/unit and distribution of $0.76/unit; stable occupancy targeted.

• Adjusted debt to EBITDAFV target is slightly below 7.5x; priorities include essential retail and industrial, residential growth and the development pipeline.

• Positive leasing momentum and confidence in completing 2024 lease renewals; near-term development focus remains commercial projects.

• FY2023 actuals met stated outlook: same-asset NOI growth was 4.6% versus 4%–5% guidance, FFO was $1.003/unit versus $0.99–$1.00, and adjusted debt to EBITDAFV was 7.2x versus 7.5x.