/NOT FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR FOR
DISSEMINATION IN THE UNITED
STATES/
OTTAWA, July 30, 2019 /CNW/ - InterRent Real Estate
Investment Trust (TSX: IIP.UN) ("InterRent" or the
"REIT") today reported financial results for the second
quarter ended June 30, 2019.
Highlights
- Operating revenues for the quarter increased by $3.8 million, or 12.4%, over Q2 2018.
Operating revenues for the same property portfolio increased by
$2.9 million, or 10.0%, over Q2
2018.
- Average monthly rent per suite for the entire portfolio
increased to $1,227 (June 2019) from $1,148 (June 2018),
an increase of 6.9%. The same property portfolio increased to
$1,249 (June
2019) from $1,162
(June 2018), an increase of
7.5%.
- Occupancy for the overall portfolio was 95.3%, an increase of
130 basis points (June 2019 compared
to June 2018). Occupancy for the same property portfolio was
96.2%, an increase of 210 basis points (June
2019 compared to June
2018).
- Net Operating Income (NOI) for the quarter was $23.0 million, an increase of $3.0 million, or 15.2%, over Q2 2018. NOI
margin for the quarter was 66.3%, up 160 basis points over Q2
2018.
- Same property NOI for the quarter was $21.2 million, an increase of $2.5 million, or 13.1%, over Q2 2018. Same
property NOI margin for the quarter was 66.7%, up 180 basis points
over Q2 2018.
- Repositioned properties had an average monthly rent per suite
of $1,280 and occupancy of 97.4% for
June 2019 and an NOI margin for the
quarter of 68.0%.
- Fair value gain on investment properties in the quarter of
$18.4 million was driven primarily by
property level operating improvements.
- Net income for the quarter was $36.8
million, a decrease of $19.8
million compared to Q2 2018. This difference was due
primarily to a lower fair value gain on investment properties in Q2
2019 as compared to Q2 2018.
- Funds from Operations (FFO) increased by $2.5 million, or 22.9%, for the quarter. Fully
diluted FFO per unit increased by 9.0% from $0.111 per unit to $0.121 per unit.
- Adjusted Funds from Operations (AFFO) increased by $2.8 million, or 29.9%, for the quarter. Fully
diluted AFFO per unit increased by 16.8% from $0.095 per unit to $0.111 per unit.
- Adjusted Cash Flow from Operations (ACFO) increased by
$6.7 million, or 79.0%, to
$15.0 million for the
quarter.
- Debt to GBV at quarter end was 40.0%, an increase of 110 basis
points from December 2018.
- Purchased 121 suites in Montreal for $38.4
million, 74 suites in St.
Catharines for $11.2 million
and a vacated office building in downtown Ottawa for development at a purchase price of
$21.8 million
- As part of settling the joint venture ownership of the
Burlington GO Lands, InterRent received $41.1 million in cash and a 25% equity interest
in the joint venture for its land holding of 2243 Fairview.
- Subsequent to the quarter end, on July
9, 2019, the REIT completed a public offering of 14,375,000
trust units from treasury, at a price of $14.00 per Unit for gross proceeds of
$201.2 million.
Financial
Highlights
|
Selected
Consolidated Information In $000's, except per Unit
amounts
and other non-financial data
|
3 Months
Ended June 30,
2019
|
3 Months
Ended June 30,
2018
|
Change
|
Total
suites
|
9,398
|
9,021
|
+4.2%
|
Average rent per
suite (June)
|
$1,227
|
$1,148
|
+6.9%
|
Occupancy rate
(June)
|
95.3%
|
94.0%
|
+130bps
|
Operating
revenues
|
$34,742
|
$30,914
|
+12.4%
|
Net operating income
(NOI)
|
$23,042
|
$19,994
|
+15.2%
|
NOI %
|
66.3%
|
64.7%
|
+160bps
|
Same property average
rent per suite (June)
|
$1,249
|
$1,162
|
+7.5%
|
Same property
occupancy rate (June)
|
96.2%
|
94.1%
|
+210bps
|
Same property
NOI
|
$21,204
|
$18,747
|
+13.1%
|
Same property NOI
%
|
66.7%
|
64.9%
|
+180bps
|
Net Income
|
$36,795
|
$56,612
|
-35.0%
|
Funds from Operations
(FFO)
|
$13,413
|
$10,917
|
+22.9%
|
FFO per weighted
average unit – diluted
|
$0.121
|
$0.111
|
+9.0%
|
Adjusted Funds from
Operations (AFFO)
|
$12,219
|
$9,406
|
+29.9%
|
AFFO per weighted
average unit – diluted
|
$0.111
|
$0.095
|
+16.8%
|
Distributions per
unit
|
$0.0725
|
$0.0675
|
+7.4%
|
Adjusted Cash Flow
from Operations (ACFO)
|
$15,032
|
$8,396
|
+79.0%
|
Debt to
GBV
|
40.0%
|
43.5%
|
-350bps
|
Interest coverage
(rolling 12 months)
|
2.99x
|
2.81x
|
+0.18x
|
Debt service coverage
(rolling 12 months)
|
1.81x
|
1.80x
|
+0.01x
|
Gross rental revenue for the quarter was 34.3 million, an
increase of $3.4 million, or 10.9%,
compared to Q2 2018. Operating revenue for the quarter was up
$3.8 million to $34.7 million, or 12.4% compared to Q2
2018. The average monthly rent across the portfolio for
June 2019 increased to $1,227 per suite from $1,148 (June 2018),
an increase of 6.9% and from $1,190
(December 2018), an increase of
3.1%. The June 2019 vacancy rate
across the entire portfolio was 4.7%, a decrease from 6.0% recorded
in June 2018. "Strong demand in our high growth markets of
Ontario and Quebec continued to drive rental growth and
significant improvements to operating performance," said
Mike McGahan, CEO.
On a same property portfolio basis (same properties are income
properties owned by the REIT throughout the comparative periods),
the average monthly rent per suite increased from $1,162 (June 2018)
to $1,249 (June 2019), an increase of 7.5%. Management
expects to continue to grow revenues organically through moving to
market rent on suite turnovers, guideline increases, continued
roll-out of AGIs, as well as continuing to drive other ancillary
revenue streams.
NOI for the quarter was $23.0
million, or 66.3% of operating revenue, compared to
$20.0 million, or 64.7% of operating
revenue, for the three months ended June 30,
2018. NOI from the same property portfolio increased to
$21.2 million for Q2 2019, an
increase of $2.5 million, or 13.1%,
over Q2 2018. Same property NOI margin for the quarter was
66.7%.
Net income for the quarter was $36.8
million, compared to $56.6
million for Q2 2018. The decrease of $19.8 million was partly attributed to the lower
fair value adjustment on investment properties compared to Q2
2018.
About InterRent
InterRent REIT is a
growth-oriented real estate investment trust engaged in increasing
Unitholder value and creating a growing and sustainable
distribution through the acquisition and ownership of
multi-residential properties.
InterRent's strategy is to expand its portfolio primarily
within markets that have exhibited stable market
vacancies, sufficient suites available to attain the critical
mass necessary to implement an efficient portfolio management
structure and, offer opportunities for accretive
acquisitions.
InterRent's primary objectives are to use the proven industry
experience of the Trustees, Management and Operational Team
to: (i) to grow both funds from operations per Unit and net
asset value per Unit through investments in a diversified portfolio
of multi-residential properties; (ii) to provide Unitholders
with sustainable and growing cash distributions, payable monthly;
and (iii) to maintain a conservative payout ratio and balance
sheet.
*Non-GAAP Measures
InterRent prepares and releases
unaudited quarterly and audited consolidated annual financial
statements prepared in accordance with IFRS (GAAP). In this and
other earnings releases, as a complement to results provided in
accordance with GAAP, InterRent also discloses and discusses
certain non-GAAP financial measures, including Gross Rental
Revenue, NOI, Same Property results, Repositioned Property results,
FFO, AFFO, ACFO and EBITDA. These non-GAAP measures are further
defined and discussed in the MD&A dated July 30, 2019, which should be read in
conjunction with this press release. Since Gross Rental Revenue,
NOI, Same Property results, Repositioned Property results, FFO,
AFFO, ACFO and EBITDA are not determined by GAAP, they may not be
comparable to similar measures reported by other issuers. InterRent
has presented such non-GAAP measures as Management believes these
measures are relevant measures of the ability of InterRent to earn
and distribute cash returns to Unitholders and to evaluate
InterRent's performance. These non-GAAP measures should not be
construed as alternatives to net income (loss) or cash flow from
operating activities determined in accordance with GAAP as an
indicator of InterRent's performance.
Cautionary Statements
The comments and highlights herein should be read in conjunction
with the most recently filed annual information form as well as our
consolidated financial statements and management's discussion and
analysis for the same period. InterRent's publicly filed
information is located at www.sedar.com.
This news release contains "forward-looking statements" within
the meaning applicable to Canadian securities legislation.
Generally, these forward-looking statements can be identified by
the use of forward-looking terminology such as "plans",
"anticipated", "expects" or "does not expect", "is expected",
"budget", "scheduled", "estimates", "forecasts", "intends",
"anticipates" or "does not anticipate", or "believes", or
variations of such words and phrases or state that certain actions,
events or results "may", "could", "would", "might" or "will be
taken", "occur" or "be achieved". InterRent is subject to
significant risks and uncertainties which may cause the actual
results, performance or achievements to be materially different
from any future results, performance or achievements expressed or
implied by the forward looking statements contained in this
release. A full description of these risk factors can be found in
InterRent's most recently publicly filed information located at
www.sedar.com. InterRent cannot assure investors that actual
results will be consistent with these forward looking statements
and InterRent assumes no obligation to update or revise the forward
looking statements contained in this release to reflect actual
events or new circumstances.
The Toronto Stock Exchange has not reviewed and does not accept
responsibility for the adequacy or accuracy of this
release.
web site: www.interrentreit.com
SOURCE InterRent Real Estate Investment Trust