InterRent Real Estate Investment Trust (IIP-UN) Q1 2025 earnings summary

Executive summary

• Portfolio occupancy remained high at 96.8%, with same property occupancy improving to 96.9% year-over-year, reflecting proactive leasing strategies.

• Average monthly rent (AMR) grew 6.2% for the total portfolio and 5% for same properties, supporting solid revenue growth.

• FFO rose 3.3% year-over-year to CAD 21.8 million, with FFO per unit up 4.2% to CAD 0.15; AFFO per unit grew 0.8% to CAD 0.127.

• Dispositions generated CAD 39 million in net proceeds in Q1, with over CAD 170 million in asset sales year-to-date, and proceeds used for significant unit buybacks at a discount to IFRS NAV.

• Strategic capital recycling and disciplined allocation included repurchasing up to 4.4% of outstanding units by end of April 2025.

Financial highlights

• Total portfolio operating revenues increased 1.7% year-over-year, with same property revenue up 4.7%.

• NOI margin was 64.1% due to higher operating costs, but same property NOI grew 3.1% year-over-year.

• Net income declined 63.2% year-over-year to $9.8 million, reflecting the impact of property sales and other factors.

• Utility costs per suite increased 18.1% to CAD 521, driven by colder weather and higher rates.

• Distributions per unit increased 5.0% year-over-year to $0.0992.

Outlook and guidance

• Management maintains a 5%-6% same property revenue growth expectation for 2025, with Q1 results in line with this range.

• NOI margins are expected to benefit from the removal of the carbon tax, with estimated savings of CAD 1 million for the remainder of 2025.

• High-quality portfolio and favorable market fundamentals are expected to support stable top-line and FFO/unit growth.

• Disciplined execution of the disposition pipeline will fund value-enhancing unit repurchases and preserve balance sheet flexibility.

• Leasing spreads and occupancy trends are expected to remain stable, with cautious optimism for the peak leasing season.