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Interrent Reit Un (TSE:IIP.UN)
:IIP.UN
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InterRent REIT Un
(TSX:IIP.UN)
70Outperform
Positive Factors
Financial Performance
InterRent REIT reported funds from operations per unit of $0.16, up 9.9% year-over-year and in line with expectations.
Valuation
InterRent’s units currently trade at an implied cap rate of 5.43%, representing a 13.7% discount to the NAV estimate, reflecting an attractive valuation.
Negative Factors
Investment Properties
InterRent recorded a $143.6 million write-down on investment properties during the quarter as the IFRS cap rate rose 15 bps q/q to 4.49%.
Unit Price
The unit price has been under pressure and has declined 12% since Q2/24 results, suggesting market challenges.
InterRent REIT Un (IIP.UN) vs. S&P 500 (SPY)
Market Cap
C$1.67B
Dividend Yield3.42%
Average Volume (3M)602.94K
Price to Earnings (P/E)―
Beta (1Y)0.94
Revenue Growth3.85%
EPS Growth-266.02%
CountryCA
Employees482
SectorReal Estate
Sector Strength74
IndustryREIT - Residential
Share Statistics
EPS (TTM)-1.05
Shares Outstanding147,503,400
10 Day Avg. Volume682,113
30 Day Avg. Volume602,941
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)6.61
Price to Cash Flow (P/CF)12.60
P/FCF Ratio8.80
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
C$12.92Price Target Upside14.13% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering6
InterRent REIT Un Business Overview & Revenue Model
Company DescriptionInterRent REIT (IIP.UN) is a publicly traded real estate investment trust based in Canada, specializing in the acquisition, ownership, and management of multi-residential properties. Operating predominantly within the Canadian real estate sector, InterRent focuses on providing value to its unitholders through strategic property investments and enhancements, ensuring high-quality rental accommodations and superior tenant services.
How the Company Makes MoneyInterRent REIT makes money primarily through the rental income generated from its portfolio of multi-residential properties. The company owns and manages a diversified array of apartment communities, from which it collects monthly rent payments from tenants. Key revenue streams include rental income, which is the core of its business model, and ancillary services provided to tenants, such as parking and laundry facilities. InterRent also benefits from property appreciation and strategic acquisitions, which enhance the overall value and income potential of its asset portfolio. Additionally, the REIT may engage in property redevelopment and improvement projects to increase rental rates and occupancy levels, thereby maximizing revenue. The company's earnings are further supported by maintaining high occupancy rates and implementing cost-efficient property management practices.
InterRent REIT Un Financial Statement Overview
Summary
InterRent REIT's financial performance shows growth in revenue and a stable debt position. However, the recent negative net income and declining cash flow metrics highlight potential risks. The company needs to address efficiency and profitability challenges to sustain its growth trajectory.Income Statement
InterRent REIT has shown consistent revenue growth over the years, with a notable increase from 2020 to 2024. However, the net profit margin has turned negative in 2024 due to a significant drop in net income. The EBIT margin remains strong, but the negative EBITDA in 2024 raises concerns about operational efficiency.70
Positive
Balance Sheet
The company's debt-to-equity ratio is stable, indicating manageable leverage. However, the equity ratio shows a slight decline, reflecting an increase in liabilities. Return on equity has fluctuated, with a recent downturn due to negative net income in 2024.65
Positive
Cash Flow
Free cash flow growth has been inconsistent, and the operating cash flow to net income ratio is unfavorable in 2024 due to negative net income. While operating cash flow remains positive, the declining trend in free cash flow growth is a concern.60
Neutral
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 246.25M | 237.13M | 216.40M | 185.15M | 159.96M | Gross Profit |
| 181.79M | 173.63M | 157.39M | 132.44M | 114.00M | EBIT |
| 164.94M | 141.33M | 139.22M | 117.66M | 102.14M | EBITDA |
| -96.41M | 142.31M | 144.11M | 88.14M | 103.31M | Net Income Common Stockholders |
| -155.65M | 92.24M | 103.96M | 369.69M | 150.65M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 4.52M | 2.55M | 4.27M | 2.06M | 51.64M | Total Assets |
| 4.20B | 4.44B | 4.32B | 4.12B | 3.21B | Total Debt |
| 1.69B | 1.69B | 1.66B | 1.51B | 999.60M | Net Debt |
| 1.69B | 1.69B | 1.65B | 1.51B | 947.95M | Total Liabilities |
| 1.80B | 1.86B | 1.82B | 1.70B | 1.15B | Stockholders Equity |
| 2.39B | 2.57B | 2.50B | 2.42B | 2.07B |
| Cash Flow | Free Cash Flow | |||
| 67.48M | 89.62M | 91.18M | 96.02M | 61.94M | Operating Cash Flow |
| 67.48M | 89.62M | 91.18M | 96.02M | 61.94M | Investing Cash Flow |
| 14.45M | -111.86M | -197.55M | -605.72M | -290.71M | Financing Cash Flow |
| -79.96M | 20.52M | 108.57M | 460.12M | 279.65M |
InterRent REIT Un Technical Analysis
Positive
11.32
Price Trends
10.22
Positive
10.24
Positive
11.15
Positive
Market Momentum
0.37
Negative
72.54
Negative
74.17
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:IIP.UN, the sentiment is Positive. The current price of 11.32 is above the 20-day moving average (MA) of 10.85, above the 50-day MA of 10.22, and above the 200-day MA of 11.15, indicating a bullish trend. The MACD of 0.37 indicates Negative momentum. The RSI at 72.54 is Negative, neither overbought nor oversold. The STOCH value of 74.17 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for TSE:IIP.UN.
InterRent REIT Un Peers Comparison
Overall Rating
UnderperformOutperform
Sector (61)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
78 Outperform | $1.29B | 4.98 | 6.46% | 0.60% | -7.92% | 256.12% | |
77 Outperform | $3.55B | 5.60 | 13.02% | 2.21% | 10.56% | -15.69% | |
72 Outperform | C$2.10B | 3.22 | 23.97% | 4.05% | 5.04% | 151.14% | |
72 Outperform | C$6.94B | 24.61 | 3.20% | 3.52% | 4.45% | ― | |
70 Outperform | C$1.67B | ― | -6.27% | 3.42% | 3.85% | -266.02% | |
61 Neutral | $4.72B | 17.64 | -3.07% | 10.89% | 5.99% | -21.86% |
* Real Estate Sector Average
Performance Comparison
TSE:IIP.UN
InterRent REIT Un
11.29
-0.95
-7.76%
TSE:MRC
Morguard (OTC)
121.47
8.92
7.93%
TSE:BEI.UN
Boardwalk REIT
66.51
-4.77
-6.70%
TSE:KMP.UN
Killam Apartment REIT Un
17.31
0.42
2.49%
TSE:CAR.UN
Canadian Apartment
42.38
-0.27
-0.63%
InterRent REIT Un Earnings Call Summary
Earnings Call Date: Feb 25, 2025 | % Change Since: 17.55% | Next Earnings Date: May 13, 2025
Earnings Call Sentiment Neutral
The earnings call highlighted significant achievements in operational performance, including strong revenue growth, record occupancy rates, and improved financial metrics. However, challenges such as the fair value loss on properties, and regional occupancy declines particularly in Ottawa and Vancouver, were also noted. While the highlights indicate a strong overall performance, the presence of notable challenges suggests a need for cautious optimism going forward.Highlights
Strong Same-Property Revenue Growth
InterRent REIT experienced a 5.1% year-over-year same-property revenue growth for Q4 and 7.2% for the full year 2024.
Increased Occupancy Rates
The total portfolio occupancy rate improved by 60 basis points quarter-over-quarter, reaching 97%.
Record NOI Margins
Annual NOI margins for the same-property and total portfolio reached 67.1% and 67%, respectively, marking the highest levels in the REIT’s history.
Growth in Average Monthly Rent
Average monthly rent for the total portfolio increased by 6.6% year-over-year to $1,702 as of December 2024.
Reduced Financing Costs
Financing costs were reduced by $1.2 million or 7.7% in Q4 compared to the previous year.
Improved Debt Metrics
Debt service coverage improved to 1.7 times from 1.5 times the previous year.
Positive FFO and AFFO Growth
A 9.9% increase in FFO per unit for Q4 and 11.1% for the full year, along with a 12.1% increase in AFFO per unit.
Lowlights
Fair Value Loss in Investment Properties
A fair value loss of $143.6 million for the quarter was reported due to adjustments in cap rates, reflecting an expansion of 67 basis points since March 2022.
Decreased Same-Property Occupancy in Ottawa
Same-property occupancy rate in Ottawa decreased by 120 basis points year-over-year to 96.6%.
Challenges in Greater Vancouver Area
Quarter-over-quarter occupancy in Vancouver decreased by 240 basis points due to BC's short-term rental regulations and affordability challenges.
Moderation in Market Rent Growth
Canada’s revised population outlook and macroeconomic uncertainties have contributed to a moderation in market rent growth.
Company Guidance
During the Q4 2024 earnings call, InterRent REIT provided several key performance metrics and operational insights. The company reported a year-over-year same-property revenue growth of 7.2% and a total portfolio revenue increase of 4% for 2024. Occupancy rates remained strong, with the total portfolio at 97% and same-property occupancy at 97.1%, marking a 10 basis point increase from the previous year. The average monthly rent for the total portfolio grew by 6.6% year-over-year, reaching $1,702 in December. The REIT achieved a 9.4% increase in same-property NOI for the year, with NOI margins reaching 67.1% for same-property and 67% for the total portfolio, the highest levels in the REIT's history. Financing costs were reduced by 2.3% for the year, contributing to an 11.2% increase in FFO for Q4, with FFO per unit up 11.1% year-over-year. Additionally, AFFO increased by 12.1% to $20.6 million for Q4, and the total debt-to-gross book value stood at 40.3% with a weighted average interest rate of 3.4%. The company also highlighted its strategic asset sales, resulting in $93.3 million in net proceeds, and its ongoing NCIB program, repurchasing 2 million units at an average cost of $10.01 per unit by the end of January 2025.InterRent REIT Un Corporate Events
Dividends
InterRent REIT Declares March 2025 Distribution
Positive
Mar 18, 2025
InterRent REIT has announced a distribution of $0.033075 per Trust unit for March 2025, equating to $0.3969 annually, payable on April 15, 2025, to unitholders of record by March 31, 2025. This announcement reflects InterRent’s ongoing commitment to delivering sustainable and growing cash distributions to its stakeholders, reinforcing its position in the real estate investment sector.
Stock BuybackBusiness Operations and StrategyFinancial Disclosures
InterRent REIT Achieves Record Annual NOI Margins in 2024
Positive
Feb 25, 2025
InterRent REIT reported strong financial results for Q4 and the full year ending December 31, 2024, with record annual NOI margins. Key highlights include a same-property portfolio occupancy rate of 97.1%, AMR growth of 5.0% for the same-property portfolio, and a 6.6% increase for the total portfolio. The REIT achieved a same-property proportionate NOI increase of 7.6% YoY, with a total portfolio proportionate NOI of $42.0 million, reflecting a 3.6% increase YoY. Additionally, the company repurchased units under the NCIB and AUPP, representing 2.3% of issued and outstanding trust units as of December 31, 2023. These results underscore InterRent’s strong operational performance and strategic focus on enhancing shareholder value.
DividendsBusiness Operations and Strategy
InterRent REIT Declares February 2025 Distribution
Positive
Feb 19, 2025
InterRent REIT announced a February 2025 distribution of $0.033075 per Trust unit, equivalent to $0.3969 annually. This distribution reflects the company’s ongoing commitment to provide sustainable and growing cash returns to its unitholders while reinforcing its strategic focus on portfolio expansion and efficient management in stable markets.
InterRent REIT Schedules Q4 2024 Results Release and Conference Call
Jan 16, 2025
InterRent REIT announced that it will release its fourth quarter 2024 financial results on February 24, 2025, followed by a conference call on February 25, 2025. This announcement is part of InterRent’s strategic focus on transparent communication with stakeholders, aligning with its objectives to grow funds from operations and provide stable returns to Unitholders.
InterRent REIT Declares January 2025 Distribution
Jan 16, 2025
InterRent REIT announced a distribution of $0.033075 per Trust unit for January 2025, which annualizes to $0.3969 per unit. This announcement underscores the company’s strategy of delivering stable and growing returns to its investors, aligning with its objectives of maintaining a conservative payout ratio and enhancing portfolio value.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.