ACCESS Newswire
10 Aug 2020, 17:35 GMT+10
NOT FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES
OTTAWA, ON / ACCESSWIRE / August 10, 2020 / InterRent Real Estate Investment Trust (TSX-IIP.UN) ('InterRent' or the 'REIT') today reported financial results for the second quarter ended June 30, 2020.
Quarter Highlights
Financial Highlights
Gross rental revenue for the quarter was $39.3 million, an increase of $5.0 million, or 14.4%, compared to Q2 2019. Operating revenue for the quarter was up $4.3 million to $39.0 million, or 12.3% compared to Q2 2019. The average monthly rent across the portfolio for June 2020 increased to $1,291 per suite from $1,227 (June 2019), an increase of 5.2% and from $1,260 (December 2019), an increase of 2.5%. The June 2020 vacancy rate across the entire portfolio was 7.0%, an increase from 4.7% recorded in June 2019.
On a same property portfolio basis (same properties are income properties owned by the REIT throughout the comparative periods), the average monthly rent per suite increased from $1,236 (June 2019) to $1,318 (June 2020), an increase of 6.6%. Management expects to continue to grow revenues organically, as well as continuing to drive other ancillary revenue streams.
NOI for the quarter, which included approximately $0.9 million in COVID-19 related operating expenses, was $24.8 million, or 63.7% of operating revenue, compared to $23.0 million, or 66.3% of operating revenue, for the three months ended June 30, 2019. NOI from the same property portfolio increased to $22.8 million for Q2 2020, an increase of $0.4 million, or 1.8%, over Q2 2019. Same property NOI margin for the quarter was 64.8%. Net income for the quarter was $22.7 million, compared to $36.8 million for Q2 2019. The decrease of $14.1 million was partly attributed to higher non-cash fair value losses on unit-based liabilities and Class B unit liability compared to non-cash fair value gains realized in Q2 2019.
Operational Update
On March 11, 2020, the World Health Organization declared the outbreak of the novel strain of coronavirus 'COVID-19' a global pandemic. The outbreak has resulted in the federal and provincial governments enacting emergency measures to combat the spread of the virus. These measures, which include the implementation of travel bans, self-imposed quarantine periods and social distancing, have caused material disruption to businesses globally resulting in an economic slowdown.
The health and safety of residents and team members remains the Trust's top priority. InterRent REIT took quick action at the beginning of the COVID-19 crisis by introducing several new building protocols and procedures designed to ensure the wellbeing of all our communities. The Trust has also placed a high priority on maintaining strong, ongoing communication with our residents through multiple channels. The Trust recognizes that the pandemic has created significant hardship for many residents. Accordingly, the Trust is working to support residents experiencing financial difficulties through various means. The Trust has been extremely encouraged by the goodwill, positive sentiment, and community spirit that our residents have shown in the face of the pandemic and in response to the Trust's actions.
'While the public offering that closed in June will have a short term negative impact on per unit numbers, it has positioned the REIT in good standing to navigate the waters in these uncertain times with a best in class balance sheet that will allow the REIT to capitalize on potential acquisitions and create long term value for Unitholders,' said Mike McGahan, CEO
The following information provides an operating update on the REIT's portfolio and liquidity position:
'InterRent has invested extensively in its portfolio to ensure it is best in class in its operating nodes. This has allowed the REIT to achieve industry leading rental growth while also ensuring that the portfolio has minimal deferred maintenance and thus providing the REIT with a very defensive portfolio. We are very fortunate to have such a strong team, many of which are Unitholders, who support each other and work tirelessly to provide clean and safe homes for our residents,' said Mike McGahan, CEO
About InterRent
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 August 10, 2020, which should be read in conjunction with this press release. Since Gross Rental Revenue, NOI, Same Property results, Repositioned Property results, FFO, AFFO, ACFO and EBITDA are not determined by GAAP, they may not be comparable to similar measures reported by other issuers. InterRent has presented such non-GAAP measures as Management believes these measures are relevant measures of the ability of InterRent to earn and distribute cash returns to Unitholders and to evaluate InterRent's performance. These non-GAAP measures should not be construed as alternatives to net income (loss) or cash flow from operating activities determined in accordance with GAAP as an indicator of InterRent's performance.
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 Toronto Stock Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this release.
For further information about InterRent please contact:
web site: www.interrentreit.com
SOURCE: InterRent Real Estate Investment Trust
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