Crombie Real Estate Investment Trust (CRR.UN) Q2 2024 earnings summary

Executive summary

• Achieved strong operational and financial results in Q2 2024, with same-asset NOI up 3.4% year-over-year and normalized FFO per unit increasing 6.7%.

• Committed occupancy remained high at 96.4%, with renewal spreads of 9.6% and strong leasing activity across the portfolio.

• Portfolio is focused on high-quality, necessity-based retail, retail-related industrial, and mixed-use residential properties, supporting stability and growth.

• Strategic partnerships, especially with Empire, continue to drive value through development, modernization, and new revenue streams.

• Prudent capital allocation and ongoing development initiatives, including acquisitions and dispositions, support value creation.

Financial highlights

• Property revenue increased by 3.1% to $116.4M, and net property income rose 4.8% to $74.9M compared to Q2 2023.

• Same asset property cash NOI grew by CAD 2.6 million, up 3.4% year-over-year.

• FFO per unit (basic) grew 23.1% to $0.32; AFFO per unit (basic) up 27.3% to $0.28; normalized FFO and AFFO per unit, excluding transition costs, increased 6.7% and 7.7% year-over-year.

• FFO payout ratio improved to 70.1% and AFFO payout ratio to 80.6% year-over-year.

• Available liquidity was $707 million as of Q2 2024, with a $2.7 billion unencumbered asset pool.

Outlook and guidance

• Maintaining annual same asset property cash NOI growth guidance of 2%-3% for 2024.

• Management anticipates continued NOI, AFFO, and NAV growth, with ongoing development activity and a focus on achieving a credit rating upgrade and Net Zero commitment.

• Development fee revenue for 2024 expected to be consistent with Q1 levels for the remainder of the year.

• Completion of The Marlstone major development in Halifax expected in H1 2026.

• Expecting healthy renewal spreads to continue, targeting mid- to high single-digit renewals.