H&R REIT Reports First Quarter 2025 Results

In This Article:

TORONTO, May 14, 2025 /CNW/ - H&R Real Estate Investment Trust ("H&R" or "the REIT") (TSX: HR.UN) is pleased to announce its financial results for the three months ended March 31, 2025.

Tom Hofstedter, Executive Chair and Chief Executive Officer said "During 2024, we sold $429.0 million of real estate assets and sold a further $59.9 million during the first quarter of 2025. While we would like to see more transaction volume, we are very pleased with our first quarter's operating results for 2025. Overall occupancy was at 95.6%, total Same-Property net operating income (cash basis) grew by 4.4% and FFO was $0.30 per unit."

Real Estate Assets (Fair Value by Segment)(1) (CNW Group/H&R Real Estate Investment Trust)
Real Estate Assets (Fair Value by Segment)(1) (CNW Group/H&R Real Estate Investment Trust)
Real Estate Assets (Fair Value by Segment)(1) (CNW Group/H&R Real Estate Investment Trust)
Real Estate Assets (Fair Value by Segment)(1) (CNW Group/H&R Real Estate Investment Trust)
Real Estate Assets (Fair Value by Region)(1) (CNW Group/H&R Real Estate Investment Trust)
Real Estate Assets (Fair Value by Region)(1) (CNW Group/H&R Real Estate Investment Trust)
Real Estate Assets (Fair Value by Region)(1) (CNW Group/H&R Real Estate Investment Trust)
Real Estate Assets (Fair Value by Region)(1) (CNW Group/H&R Real Estate Investment Trust)

(1)               

At the REIT's proportionate share. Refer to the "Non-GAAP Measures" section of this news release.

(2)               

June 30, 2021 has been used as a benchmark since H&R's Strategic Repositioning Plan was announced prior to the release of H&R's Q3 2021 results.

(3)               

Excludes the Bow and 100 Wynford, which were legally sold in October 2021 and August 2022, respectively.

(4)               

Includes four office properties advancing through the process of rezoning into residential properties

FINANCIAL HIGHLIGHTS


March 31  

December 31  

December 31  


2025

2024

2023

Total assets (in thousands)

$10,460,327

$10,620,487

$10,777,643

Debt to total assets per the REIT's Financial Statements(1)

33.8 %

33.4 %

34.2 %

Debt to total assets at the REIT's proportionate share(1)(2)

44.1 %

43.7 %

44.0 %

Debt to Adjusted EBITDA at the REIT's proportionate share(1)(2)(3)

9.3x

9.4x

8.5x

Unitholders' equity (in thousands)

$5,192,448

$5,278,743

$5,192,375

Units outstanding (in thousands)

262,566

262,016

261,868

Exchangeable units outstanding (in thousands)

17,424

17,974

17,974

Unitholders' equity per Unit

$19.78

$20.15

$19.83

Net Asset Value ("NAV") per Unit(2)(4)

$20.62

$20.92

$20.75

 


Three months ended March 31

(in thousands except for per Unit amounts)

2025

2024

Rentals from investment properties

$205,639

$209,521

Net operating income

$82,963

$94,187

Same-Property net operating income (cash basis)(5)

$126,469

$121,183

Net income (loss) from equity accounted investments

($10,082)

$12,550

Fair value adjustment on real estate assets

($52,698)

($44,167)

Net income (loss)

($52,018)

$31,792

Funds from Operations ("FFO")(5)

$83,098

$83,066

Adjusted Funds from Operations ("AFFO")(5)

$68,013

$68,787

Weighted average number of Units and exchangeable units

279,990

279,847

FFO per basic and diluted Unit(2)

$0.297

$0.297

AFFO per basic and diluted Unit(2)

$0.243

$0.246

Cash distributions per Unit

$0.150

$0.150

Payout ratio as a % of FFO(2)

50.5 %

50.5 %

Payout ratio as a % of AFFO(2)

61.7 %

61.0 %

(1)               

Debt includes mortgages payable, debentures payable, unsecured term loans, lines of credit and liabilities classified as held for sale.

(2)               

These are non-GAAP ratios. Refer to the "Non-GAAP Measures" section of this news release.

(3)               

Adjusted EBITDA is based on the trailing 12 months and is defined in the "Debt" section of this news release.

(4)               

See page 9 of this news release for a detailed calculation of NAV per Unit.

(5)               

These are non-GAAP measures. Refer to the "Non-GAAP Measures" section of this news release.

SUMMARY OF SIGNIFICANT Q1 2025 ACTIVITY

2025 Net Operating Income Highlights


Three months ended March 31

(in thousands of Canadian dollars)

2025

2024

% Change

Operating Segment:




Same-Property net operating income (cash basis) - Residential(1)

$44,483

$42,340

5.1 %

Same-Property net operating income (cash basis) - Industrial(1)

17,181

16,435

4.5 %

Same-Property net operating income (cash basis) - Office(1)

39,358

38,883

1.2 %

Same-Property net operating income (cash basis) - Retail(1)

25,447

23,525

8.2 %

Same-Property net operating income (cash basis)(1)

126,469

121,183

4.4 %

Net operating income (cash basis) from Transactions at the REIT's proportionate share(1)(2)

28,874

36,645

(21.2) %

Realty taxes in accordance with IFRIC 21 at the REIT's proportionate share(1)(3)

(49,194)

(43,821)

12.3 %

Straight-lining of contractual rent at the REIT's proportionate share(1)

3,658

4,976

(26.5) %

Net operating income from equity accounted investments(1)

(26,844)

(24,796)

8.3 %

Net operating income per the REIT's Financial Statements

$82,963

$94,187

(11.9) %

(1)               

These are non-generally accepted accounting principles ("GAAP") measures. Refer to the "Non-GAAP Measures" section of this news release.

(2)               

Transactions includes acquisitions, dispositions, and transfers of investment properties to or from properties under development during the 15-month period ended March 31, 2025. 

(3)               

Realty taxes in accordance with IFRS Interpretations Committee Interpretation 21, Levies ("IFRIC 21") relates to the timing of the liability recognition for U.S. realty taxes. By excluding the impact of IFRIC 21, U.S. realty tax expenses are evenly matched with realty tax recoveries received from tenants throughout the period.

Transaction Highlights

Property Dispositions