Bullboard - Stock Discussion Forum Boardwalk Real Estate Investment Trust T.BEI.UN

Alternate Symbol(s): BOWFF

Boardwalk Real Estate Investment Trust (Trust) is a Canada-based open-ended real estate investment trust, which owns/operates multi-family rental communities. It provides homes in more than 200 communities, with over 33,000 residential suites totaling over 29 million net rentable square feet. Its brands include Boardwalk Living, Boardwalk Communities, and Boardwalk Lifestyle. Its three-tiered... see more

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TSX:BEI.UN - Post Discussion

Boardwalk Real Estate Investment Trust > TD

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Post by retiredcf on Aug 11, 2023 12:25pm

TD

Currently have a $77.00 target. GLTA

Boardwalk REIT

(BEI.UN-T) C$64.65

Q2/23 First Look: Results In Line, Guidance Raised Again Event

Q2/23 Results. Conference call 1:00 PM ET; dial-in: 1-888-664-6383; passcode: 07558807 (slides).

Impact: POSITIVE

Our Take: Boardwalk delivered a strong quarter, highlighted by +12.5% SPNOI growth (despite now self-managing both uplifts and renewals) and a +3% bump to FFO/unit guidance. With limited new supply deliveries, elevated occupancies in the 98%-range and robust rental demand, we expect Boardwalk's fundamentals will remain robust going forward.

FFO/unit (f.d.) of $0.89 was +11% y/y, and largely in line with our estimate/ consensus at $0.88. AFFO/unit (our calculation) of $0.69 was +2% versus our estimate.

2023 Guidance update. Management increased both its FFO/unit and SPNOIG guidance (for the second consecutive quarter) on robust revenue growth and improved visibility on non-controllable expenses (property tax and insurance). SPNOI growth was increased to 11.5%-14% from 9.5%-13.0%, while the FFO/ unit range was increased/tightened to $3.42-$3.54 from $3.30-$3.46 (+3% at the mid-point). Given current consensus of $3.43, we expect to see upward estimate revisions for both 2023/24.

Operating Highlights

Portfolio new lease spread growth on a month-by-month basis slowed from April (+13.8%) to July (+11.6%) as Boardwalk implemented a strategic moderation of new lease uplifts in non-price controlled markets (targeting 10%-to-15%) in an effort to lower turnover and lengthen the runway for growth. Renewals averaged 8.6% in Q2/23 (management targeting 7-9%).
Q2 SPNOIG moderated slightly from Q1's pace (+13.7%) to a still very strong +12.5%. Gains were driven by +8.6% revenue growth, while SP expenses increased just +2.7%. By market, Alberta led with +16.5% (Edmonton: +18.1% and Calgary: +13.5%), followed by Saskatchewan (+7.5%), Quebec (+6.5%), and Ontario (+4.7%). SP operating margin was +230bps y/y to 62.5%.
Average incentives decreased to $108/month (-11% q/q) and were -28% y/y. SP occupancy remained elevated in the mid-98% range from April to August.
Occupied rents were +2.6% q/q to $1,326, while average market rents were +3.5% q/q to $1,495.

Balance Sheet

Recorded a $223mm FV gain (3% of Q1/23 investment properties) on higher market rents and lower cap rates (-2bps q/q to 4.90%). IFRS NAV was +6.7% q/q at $80.98. D/GBV was -100bps q/q to ~44%. Boardwalk has ~$239mm of liquidity (Q1/23: ~$244mm).