TSX:IIP.UN - Post by User
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retiredcfon May 10, 2022 11:04am
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Post# 34670390
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InterRent REIT
(IIP.UN-T) C$12.35
Q1/22 First Look: Results In Line; SP NOI +12.1%
Event
Q1/22 results. Conference call today at 10:00 AM (1-888-440-6928).
Impact: NEUTRAL
Q1/22 FFO/unit of $0.133 was +17% versus Q1/21, slightly below consensus of $0.14 but right in line with our $0.133 estimate (Exhibit). AFFO/unit of $0.115 was also in line with our $0.116 estimate.
Q1 results were in line with expectations. Demand fundamentals continued to improve in the quarter, with occupancy just 10bps lower q/q to 95.5% (+420bps y/ y) despite the typical seasonal weakness in Q1. Consistent with the other Canadian apartment REITs, InterRent saw utility costs increase (+19.1% on a sp basis) on the back of higher commodity prices and a more severe winter season. That said, strong revenue growth resulted in a decline (as a % of revenue) of property taxes (-100bps) and operating costs (-100bps) more than offsetting the higher utilities and resulting in 120bps of margin expansion y/y.
Operational Highlights
Q1 SPNOI was +12.1%. SP revenues were +10.0%, driven by a 480bps increase in same-property occupancy to 96.4% (Ottawa/Gatineau: +480ps; GTHA: +430bps; Montreal: +820bps) and a 5.3% increase in AMR to $1,391.
Acquisitions
Acquired two properties (aggregating 57 suites at 100% share) in Vancouver via its JV with Crestpoint for $25.6mm ($12.8mm at the REIT's interest). Management intends to reposition the suites at the two properties as units turnover.
Balance Sheet
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Q1 IFRS FV gain of $65.8mm, or $0.46/unit, largely on a 4bps q/q cap rate decline to 3.82% (-24bps y/y). Liquidity increased to ~$132.2mm from $83.6mm in Q4/21. D/GBV was 30bps lower q/q to 36.4%.
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During Q1 the REIT added four new mortgages for $31.7mm and up-financed 11 mortgages for $77.6mm that increased the weighted average term of mortgage debt to 4.5 years from 3.6 years q/q. In line with the recent rise in rates, the REIT's weighted average cost of debt increased by 13bps q/q to 2.51%.
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Announced the appointment of Brad Cutsey to President and CEO, effective May 1, 2022 (link).