InterRent REIT sees occupancy, revenues rise in Q2 compared with previous year

Slayte exterior InterRent
CLV Group has converted a former government building at 473 Albert St. into a new apartment complex called The Slayte. File photo

InterRent REIT said the occupancy rate in its buildings fell slightly in the second quarter compared with the first three months of 2023 but was up from the same period a year ago as the firm saw gains in most of its key financial metrics.

In financial filings for the three-month period ending June 30, the Ottawa-based real estate investment trust said its properties were 95.4 per cent occupied, up from 95.1 per cent the year before but a decrease from 96.8 per cent at the end of March.

InterRent said the quarter-over-quarter decline was due to “seasonal fluctuations” and remains “in line with the long-term average for June.”

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Average rents were $1,531 per suite at the end of the second quarter, up nearly seven per cent from $1,433 the previous year.

Brad Cutsey, the REIT’s president and chief executive, said average monthly rental growth “remained steady” across the firm’s core markets, benefiting from “robust industry fundamentals that are showing no signs of slowing down.”

InterRent said its funds from operations rose 3.7 per cent from the second quarter of 2022 to $19.6 million.

Meanwhile, same-property operating revenues rose 9.7 per cent to $57.8 million, a jump the REIT attributed in part to record-setting immigration that is driving demand for the company’s suites.

Overall operating revenues were up 11.6 per cent year over year to $59 million. InterRent’s net income fell to $36.8 million from $77.6 million a year earlier, a 53 per cent drop the firm said was primarily due to a $20.4-million difference in fair value adjustments of investment properties.

The company now owns 12,709 suites, up from 12,573 at the end of June 2022.

InterRent said it’s reached a deal in principle to sell a 54-suite property in Ottawa for $11.5 million. Cutsey said the firm continues to look for opportunities to divest more of its existing inventory in a bid to strengthen its balance sheet and fund future growth.

“We continue to explore capital recycling opportunities and have identified various assets that could potentially provide net proceeds of over $75 million,” he said in a statement. 

InterRent also said its 11-storey Slayte rental complex at 473 Albert St., the firm’s first office conversion project, has “reached the final stages of its interior construction.” The company said the property is more than 60 per cent leased, adding it is “optimistic that the leasing momentum will continue throughout the rest of the leasing season.”

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