OTTAWA, ONTARIO--(Marketwired - May 8, 2017) -
NOT FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES
InterRent Real Estate Investment Trust (TSX:IIP.UN) ("InterRent" or the "REIT") today reported financial results for the first quarter ended March 31, 2017.
Highlights
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Gross rental revenue for the quarter increased by $1.1 million, or 4.4%, over Q1 2016.
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Gross rental revenue for the quarter from the stabilized portfolio increased by $0.7 million, or 4.0%, over Q1 2016.
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Average monthly rent per suite for the entire portfolio increased to $1,061 (March 2017) from $1,004 (March 2016), an increase of 5.7%. The stabilized portfolio increased to $1,077 (March 2017) from $1,036 (March 2016), an increase of 4.0%.
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Occupancy for the overall portfolio was 95.2%, an increase of 60 basis points (March 2017 compared to March 2016). Occupancy from stabilized operations was 97.0%, an increase of 60 basis points (March 2017 compared to March 2016).
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Net Operating Income (NOI) for the quarter was $14.3 million, an increase of $1.3 million, or 10.2% over Q1 2016. NOI margin for the quarter was 56.9%, up 260 basis points over Q1 2016.
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Stabilized NOI for the quarter was $10.4 million, an increase of $0.8 million, or 8.2%, over Q1 2016. Stabilized NOI margin for the quarter was 59.6%, up 160 basis points over Q1 2016.
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For the quarter, FFO per unit increased by 11.0%, from $0.082 per unit to $0.091 per unit.
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For the quarter, AFFO per unit increased by 9.9% from $0.071 per unit to $0.078 per unit.
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Debt to GBV at quarter end was 50.7%, a decrease of 460 basis points from December 2016.
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Closed on the purchase of a 224 suite property in Montreal at a going in capitalization rate of approximately 5.3%. This is one of the core markets that has been targeted for growth by InterRent.
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Completed a public offering of 10,425,000 trust units from treasury, at a price of $7.68 per Unit for gross proceeds of $80.1 million.
Financial Highlights
| Selected Consolidated Information | 3 Months Ended | 3 Months Ended | |||||||||
| In $000's, except per Unit amounts | Change | ||||||||||
| and other non-financial data | March 31, 2017 | March 31, 2016 | |||||||||
| Total suites | 8,283 | 8,362 | -0.9 | % | |||||||
| Average rent per suite (March) | $ | 1,061 | $ | 1,004 | +5.7 | % | |||||
| Occupancy rate (March) | 95.2 | % | 94.6 | % | +60bps | ||||||
| Operating revenues | $ | 25,133 | $ | 23,903 | +5.1 | % | |||||
| Net operating income (NOI) | $ | 14,306 | $ | 12,978 | +10.2 | % | |||||
| NOI % | 56.9 | % | 54.3 | % | +260bps | ||||||
| Stabilized average rent per suite (March) | $ | 1,077 | $ | 1,036 | +4.0 | % | |||||
| Stabilized occupancy rate (March) | 97.0 | % | 96.4 | % | +0.6 | % | |||||
| Stabilized NOI | $ | 10,427 | $ | 9,640 | +8.2 | % | |||||
| Stabilized NOI % | 59.6 | % | 58.0 | % | +160bps | ||||||
| Funds from Operations (FFO) | $ | 6,782 | $ | 5,842 | +16.1 | % | |||||
| FFO per weighted average unit - basic | $ | 0.091 | $ | 0.082 | +11.0 | % | |||||
| FFO per weighted average unit - diluted | $ | 0.091 | $ | 0.081 | +12.3 | % | |||||
| Adjusted Funds from Operations (AFFO) | $ | 5,811 | $ | 5,101 | +13.9 | % | |||||
| AFFO per weighted average unit - basic | $ | 0.078 | $ | 0.071 | +9.9 | % | |||||
| AFFO per weighted average unit - diluted | $ | 0.078 | $ | 0.071 | +9.9 | % | |||||
| Cash distributions per unit | $ | 0.0608 | $ | 0.0578 | +5.2 | % | |||||
| AFFO payout ratio | 78 | % | 81 | % | -300bps | ||||||
| Debt to GBV | 50.7 | % | 55.0 | % | -430bps | ||||||
| Interest coverage (rolling 12 months) | 2.53x | 2.61x | -0.08x | ||||||||
| Debt service coverage (rolling 12 months) | 1.58x | 1.52x | +0.06x | ||||||||
Gross rental revenue for the quarter was $25.5 million, an increase of $1.1 million, or 4.4%, compared to Q1 2016. Operating revenue for the quarter was up $1.2 million to $25.1 million, or 5.1% compared to Q1 2016. The average monthly rent across the portfolio for March 2017 increased to $1,061 per suite from $1,004 (March 2016), an increase of 5.7%. The March 2017 vacancy rate across the entire portfolio was 4.8%, a decrease from 5.4% recorded in March 2016. The 4.8% was comprised of 3.0% for stabilized properties and 8.5% for un-stabilized. "We continue to work through our repositioning program for our recently acquired properties as we know from our experience that this will continue to drive strong rental growth and NOI growth," said Mike McGahan, CEO.