H&R Real Estate Investment Trust (HR) Q2 2026 earnings summary

Executive summary

• Announced a $6.7 billion transaction involving the sale and restructuring of the portfolio, with unitholders receiving CAD 4.28 per unit in cash and a 66.9% majority stake in a new combined residential REIT platform, valuing each unit at $12.01; transaction expected to close in Q4 2026.

• Over $2.6B in non-strategic office and retail assets sold from June 2021 to December 2025, including a $1.5B sale in Q1 2026 and a $2.4B spinout of 27 properties to Primaris REIT.

• Residential and industrial segments now comprise 86% of the portfolio by June 2026, up from 34% in June 2021.

• The process was led by independent trustees and external advisors, resulting in a unanimous board recommendation.

• The CEO and related parties will not participate in the new REIT, with their units redeemed and non-core assets acquired separately.

Financial highlights

• Q2 2026 FFO was $69.1 million ($0.247/unit), down from $87.8 million ($0.314/unit) in Q2 2025, mainly due to lower NOI from property dispositions; AFFO per unit was $0.263.

• Debt to total assets was 41.8%, and debt to adjusted EBITDA was 7.1x as of June 30, 2026.

• NAV per unit was $16.23 at June 30, 2026, up from $16.09 at December 31, 2025.

• 91.2% occupancy and $106.9M same-property NOI (cash basis) in Q2 2026.

• Received a CAD 15.7 million lease termination payment from Bell Canada, with a further CAD 56.1 million payment expected in Q3.

Outlook and guidance

• Management expects further improvement in occupancy, leasing activity, and pricing trends in the residential portfolio through the second half of 2026.

• Q3 2026 expected to benefit from a $56.1 million lease termination payment at 200 Bouchard, with significant positive impact on same-property NOI and FFO.

• Continued focus on high-growth residential and industrial assets, with ongoing development pipeline in U.S. Sun Belt states.

• Management targets further acceleration of same-property NOI growth and value creation through rezoning.