Morguard North American Residential REIT (MRG-UN) Q3 2024 earnings summary

Executive summary

• Total assets reached $4.4 billion at Q3 2024, up from $4.1 billion at year-end 2023, driven by fair value gains, FX, and higher cash balances.

• Net loss of CAD 18.8 million in Q3 2024, compared to net income of CAD 39.2 million in Q3 2023, mainly due to non-cash fair value losses and higher deferred taxes.

• Annual cash distribution increased by CAD 0.02 per unit (2.7%), now CAD 0.76 per unit annualized, effective November 2024.

Financial highlights

• IFRS net operating income was CAD 52 million, down 0.7% year-over-year.

• Basic FFO was CAD 21.9 million, down 0.4% year-over-year; FFO per unit remained at CAD 0.40.

• FFO payout ratio was 45.9%, up slightly from 45.5% in Q3 2023.

• Revenue from real estate properties for Q3 2024 was $85.8 million, up from $83.6 million in Q3 2023.

• NOI margin (IFRS) for Q3 2024 was 60.7%, down from 62.7% in Q3 2023.

Outlook and guidance

• U.S. rent growth expected to normalize to 3–5% annually in 2025, down from recent double-digit growth.

• Canadian rents expected to plateau at current high levels, with some incentives offered in select cases.

• Capital deployment will remain disciplined, with continued focus on NCIB and selective acquisitions.

• The REIT expects to close a CMHC-insured refinancing of two Mississauga properties in Q4 2024, providing up to $109.3 million in gross proceeds.