Morguard North American Residential REIT (MRG-UN) Q1 2025 earnings summary

Executive summary

• Net income for Q1 2025 was $38.3 million, up 54.7% from Q1 2024, driven by higher net fair value gains and lower deferred income tax.

• Total assets increased to $4.7 billion as of March 31, 2025, up from $4.6 billion at year-end 2024, supported by fair value gains on income-producing properties.

• The REIT repurchased 585,000 units under its NCIB at an average price of $17.34 per unit.

• Portfolio consists of 43 properties and 13,089 suites, focusing on high-quality multi-suite residential assets in Canada and the U.S.

Financial highlights

• IFRS net operating income (NOI) was $20.8 million for Q1 2025, a 1.1% increase year-over-year.

• Proportionate NOI rose 4.8% year-over-year, with Canadian NOI up 2.8% and U.S. NOI down 0.5%; foreign exchange contributed $1.8 million.

• Basic FFO was $23.2 million, up 3% year-over-year; FFO per unit increased to $0.44 from $0.41, a 7.3% rise.

• FFO payout ratio was 43.7%, supporting significant cash retention.

• Revenue from real estate properties was $90.3 million, up from $84.8 million in Q1 2024.

Outlook and guidance

• Management expects strong and stable market conditions in Canada due to persistent housing demand outpacing supply.

• U.S. rental growth is expected to normalize to pre-COVID levels of 3-5% depending on market, with aggressive rent pushes planned as occupancy stabilizes.

• Canadian AMR uplift is anticipated to remain between 15%-20%.

• Management emphasizes maximizing long-term unit value through active asset and property management.

• Portfolio appraised at approximately $4.3 billion as of March 31, 2025.