/NOT FOR DISTRIBUTION TO
Fourth Quarter Highlights:
- Total and same-property portfolio occupancy rate of 97.0% for
December 2023 , an improvement of 180 bps fromSeptember 2023 , and 20 bps compared toDecember 2022 . - Average Monthly Rent ("AMR") growth of 7.9% for the total portfolio and 7.5% for the same property portfolio for
December 2023 , as compared toDecember 2022 . - For the three months ended
December 31, 2023 , same property proportionate Net Operating Income ("NOI") of$39.7 million , an increase of$3.8 million , or 10.5% year-over-year ("YoY"). Total portfolio proportionate NOI of$40.6 million , an increase of$4.0 million for the three months endedDecember 31, 2023 , or 11.1% YoY. - Same property NOI margin increased by 140 bps from
December 2022 to reach 65.6% for the three months endedDecember 31, 2023 . - Funds from Operations ("FFO") of
$20.8 million for the three months endedDecember 31, 2023 , an increase of 11.2% compared to the same period last year. FFO per unit (diluted) of$0.142 , an increase of 10.1% YoY. - Adjusted Funds from Operations ("AFFO") of
$18.1 million , reflecting an improvement of 13.1%. AFFO per unit (diluted) of$0.124 , up 12.7% YoY. - Lease-up at the REIT's first office conversion community, The Slayte, exceeded 90% by the end of
February 2024 . - Announced refreshed brand identity with new logo, brand message, and new website: irent.com.
- Sold five properties in Côte-
Saint-Luc, Quebec totalling 224 suites for$46.0 million , or approximately$205,000 per suite, above their IFRS values. The transaction generated net cash proceeds of approximately$22 million . Proceeds have been used to reduce variable rate debt exposure which is immediately accretive to the REIT. - Subsequent to the quarter, successfully financed
$183.5 million of maturing mortgages at an average rate of 4.25% (maturing mortgages of$144.9 million at an average rate of 6.06%).
2023 Fiscal Year Highlights:
- Same property proportionate NOI reached
$153.4 million for the 12 months endedDecember 31, 2023 , an increase of$16.2 million , or 11.8% from 2022. - For year ended
December 31, 2023 , total portfolio proportionate NOI of$156.3 million , an increase of$17.8 million , or 12.9% YoY. - Total portfolio and same property NOI margin of 65.6% for the year, an improvement of 160 bps and 170 bps respectively.
- FFO of
$80.6 million for the 12 months endedDecember 31, 2023 ($0.551 per Unit – diluted) is up 4.8%, or 3.6% on a per-unit basis compared to 2022. - AFFO of
$70.4 million for the 12 months endedDecember 31, 2023 ($0.482 per Unit – diluted) reflects a YoY increase of 4.5%, or 3.4% on a per-unit basis. - The REIT ended the year in a strong financial position, with
$252.2 million of available liquidity, and Debt-to-Gross Book Value ("GBV") of 38.1%, a 20 bps improvement compared toDecember 2022 of 38.3%. - Achieved building certification for 10,174 suites through the Certified Rental
Building Program (CRBP), representing 73.2% of total suites as ofDecember 2023 .
"2023 has been a year of building strength for InterRent. We witnessed four consecutive quarters of double-digit NOI growth and consistent NOI margin expansion. We ended the year with occupancy reaching the optimal level at 97%, and annual FFO hitting
Financial Highlights:
Selected Consolidated Information | 3 Months Ended
| 3 Months Ended
| Change | 12 Months
| 12 Months
| Change |
Total suites | 12,756(1) | 12,610(1) | +1.2 % | |||
Average rent per suite (December) | $ 1,596 | $ 1,479 | +7.9 % | |||
Occupancy rate (December) | 97.0 % | 96.8 % | +20 bps | |||
Proportionate operating revenues | $ 61,881 | $ 56,866 | +8.8 % | $ 238,180 | $ 216,454 | +10.0 % |
Proportionate net operating income (NOI) | $ 40,580 | $ 36,539 | +11.1 % | $ 156,260 | $ 138,463 | +12.9 % |
NOI % | 65.6 % | 64.3 % | +130 bps | 65.6 % | 64.0 % | +160 bps |
Same Property average rent per suite | $ 1,585 | $ 1,474 | +7.5 % | |||
Same Property occupancy rate (December) | 97.0 % | 96.8 % | +20 bps | |||
Same Property proportionate operating | $ 60,608 | $ 56,037 | +8.2 % | $ 233,809 | $ 214,576 | +9.0 % |
Same Property proportionate NOI | $ 39,748 | $ 35,962 | +10.5 % | $ 153,399 | $ 137,183 | +11.8 % |
Same Property NOI % | 65.6 % | 64.2 % | +140 bps | 65.6 % | 63.9 % | +170 bps |
Net Income (Loss) | $ 27,253 | $ (100,950) | -127.0 % | $ 92,240 | $ 103,959 | -11.3 % |
Funds from Operations (FFO) | $ 20,773 | $ 18,677 | +11.2 % | $ 80,602 | $ 76,933 | +4.8 % |
FFO per weighted average unit - diluted | $ 0.142 | $ 0.129 | +10.1 %
| $ 0.551 | $ 0.532 | +3.6 %
|
Adjusted Funds from Operations (AFFO) | $ 18,132 | $ 16,031 | +13.1 % | $ 70,396 | $ 67,366 | +4.5 % |
AFFO per weighted average unit-diluted | $ 0.124 | $ 0.110 | +12.7 % | $ 0.482 | $ 0.466 | +3.4 % |
Distributions per unit | $ 0.0930 | $ 0.0885 | +5.1 % | $ 0.3630 | $ 0.3450 | +5.2 % |
Adjusted Cash Flow from Operations | $ 30,617 | $ 24,872 | +23.1 % | $ 76,853 | $ 78,446 | -2.0 % |
Debt-to-GBV | 38.1 % | 38.3 % | -20 bps | |||
Interest coverage (rolling 12 months) | 2.29x | 2.70x | -0.41x | |||
Debt service coverage (rolling 12 months) | 1.54x | 1.65x | -0.11x |
(1) | Represents 12,088 (2022 - 12,003) suites fully owned by the REIT, 1,214 (2022 - 1,214) suites owned 50% by the REIT, and 605 (2022 - nil) suites owned 10% by the REIT. |
Robust top-line growth with occupancy at optimal level
Including properties that the REIT owns in its joint ventures, InterRent owned or managed 13,907 suites at
AMR growth across the total portfolio gained further momentum to reach 7.9% as compared to
The strong AMR growth and leasing demand have resulted in an increase to total portfolio proportionate revenue of 10.0% year over year and 9.0% for the proportionate same property portfolio during the year. On an annual basis, NOI margin for the same property and total portfolio improved by 170 bps and 160 bps respectively to reach 65.6%. Proportionate Net Operating Income for fiscal year 2023 reached
Strong operating results drive bottom-line expansion
InterRent achieved FFO per Unit of
Net income for the fourth quarter was
Fortified financial position with increased financial flexibility
Financing costs in Q4 amounted to
Weighted average cost of mortgage debt increased marginally from
Debt-to-GBV ratio decreased 20 bps year over year and 50 bps quarter over quarter and ended the year at 38.1%. With Debt-to-GBV remaining at a healthy level and
Following the end of FY 2023, the REIT successfully completed financing activities totalling
Strategic dispositions of five non-core assets
During Q4 2023, InterRent committed to the sale of five non-core properties, totalling 224 suites in Côte-Saint-Luc of the
Making meaningful progress with
InterRent continued to expand its building certification program during the quarter. Following the successful pilot program, where six communities were certified with the Certified Rental
The building certification achievement represents a major milestone for InterRent, with certification now attained for 100% of its
As of the end of
Explore InterRent's 2023 interactive Annual Report
InterRent released its interactive 2023 Annual Report and encourages investors to explore it to gain a deeper understanding of the REIT's operations and financial performance, and commitment to sustainable growth. The interactive annual report can be accessed from the REIT's investor relations website.
Conference Call & Webcast
Management will host a webcast and conference call to discuss these results and current business initiatives on
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
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
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