InterRent REIT posts gains in key financial metrics as occupancy rate hits ‘optimal’ 97%

Slayte exterior
InterRent REIT says its first office-to-residential conversion property, The Slayte at 473 Albert St., is more than 90 per cent occupied. File photo

InterRent REIT reported gains in most key financial metrics in the fourth quarter of 2023 as the occupancy rate in its buildings hit the “optimal level” of 97 per cent, the company said Thursday.

In financial filings for the three-month period ending Dec. 31, the Ottawa-based real estate investment trust said its funds from operations rose 11 per cent compared with the previous year to $20.8 million. 

For the year, InterRent’s funds from operations increased 4.8 per cent from 2022 to $80.8 million.

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Proportionate operating revenues were up 8.8 per cent in the fourth quarter to $61.9 million. Total proportionate operating revenues for 2023 rose 10 per cent year-over-year to $238.1 million. 

InterRent reported net income of $27.3 million for the quarter, compared with a net loss of $101 million the year before. The company said the turnaround was primarily due to a modest fair value gain on investment properties driven by stabilized cap rates, compared with a $107.7-million fair value loss in the same period in 2022.

The company’s net income for fiscal 2023 was $92.2 million, down 11.3 per cent from a year earlier.

The REIT’s units had an occupancy rate of 97 per cent at the end of December, up from 96.8 per cent the previous year. Average rents were $1,596 per suite, an increase of 7.9 per cent from December 2022.

InterRent now owns 12,756 suites, up from 12,610 the previous year. 

The REIT reached an agreement last quarter to sell five properties in the Greater Montreal Area containing 224 suites. The $46-million deal closed earlier this month. 

In a statement on Thursday, InterRent said proceeds from the sale will be used to “reduce the REIT’s exposure to variable rate debt.”

The company also said the 11-storey Slayte rental complex at 473 Albert St., its first office-to-residential conversion project, is more than 90 per cent leased.

“Progressing with our disposition program, we are further enhancing our financial flexibility and are strategically positioned to pursue external growth opportunities that complement our robust organic growth,” InterRent president and CEO Brad Cutsey said in a statement.

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