InterRent Real Estate Investment Trust

Q1 2025 total portfolio occupancy was 96.8%, and same-property occupancy was 96.9%. March AMR increased 6.2% for the total portfolio and 5% for same properties. Total portfolio operating revenue grew 1.7% year over year, while same-property revenue grew 4.7%; same-property NOI grew 3.1%, but same-property NOI margin declined 110 bps to 64.1%. FFO was $21.8 million, up 3.3% year over year, and FFO per unit was $0.15, up 4.2%. Financing costs were $14.6 million, or 23.2% of operating revenue, versus $15.2 million, or 24.5% a year ago. Average cap rates on total investment properties were 4.49%, unchanged from year-end 2024. Management said the disposition program is targeting $200 million to $250 million in asset sales and $125 million to $140 million in net equity proceeds; so far this year they have generated $39 million in net proceeds through three dispositions, and Brad later said more than $170 million in asset sales had been completed or paid for. They also said they repurchased 4.8 million units in Q1 and another 1.2% after quarter-end through end of April, for a 4.4% total reduction in unit count, with $236 million in available liquidity and debt-to-GBV at 40.9%.

Brad Cutsey said the quarter reflected resilient operating fundamentals despite macro uncertainty, colder weather, and higher operating costs. He emphasized disciplined capital recycling, saying dispositions are strengthening portfolio quality and enabling buybacks at a discount to IFRS NAV. He remained constructive on leasing conditions, calling the team “cautiously quite optimistic,” while noting Vancouver is softer and some Ontario nodes may require a more flexible vacancy approach.

Curt Millar highlighted that average cap rates stayed at 4.49%, unchanged from year-end 2024, and that recent dispositions continue to validate valuations. He said financing costs fell to $14.6 million from $15.2 million a year ago and the weighted average cost of mortgage debt declined to 3.31% from 3.37% three months earlier. He also noted debt-to-GBV was 40.9%, interest coverage was 2.6x, and that the removal of the consumer carbon tax is expected to save about $1 million for the remainder of 2025; on a proportionate basis, carbon tax expense was about $1.3 million in 2024 and about $1.6 million for 2025 as described on the call.

Analysts focused on vacancy strategy, leasing spreads, turnover, dispositions, NCIB intensity, and the impact of carbon tax savings on margins. Management said it is still early in the peak leasing season, but they remain comfortable operating in the lower end of their vacancy range and could be more flexible in places like Guelph, Other Ontario, and Vancouver. On rent growth and turnover, they said current trends look similar so far, with Mario Saric and Mike Markidis pressing on whether spreads and turnover would hold; Brad said same-property revenue growth of 5% to 6% for 2025 still looks reasonable and Dave said incentives are being used strategically but should not rise materially from here. They also said the disposition program remains on track, there has been no concern from market noise or tariff headlines, and they would not comment on the reported Anson Funds activist campaign.