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Interrent Reit Un (TSE:IIP.UN)
:IIP.UN
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InterRent REIT Un
(TSX:IIP.UN)
Rating:71Outperform
Price Target:
C$13.00
▼(-4.06%Downside)
Positive Factors
Acquisition
The acquisition of InterRent REIT by Carriage Hill Properties highlights the value of the apartment sector, with the transaction providing a fair bid value.
Revenue Optimization
Revenue growth was driven by an increase in average monthly rent and high occupancy rates, indicating effective revenue optimization.
Valuation
The offer for InterRent includes a premium to both Canaccord’s and consensus NAV estimates, indicating positive market sentiment towards the acquisition.
Negative Factors
Debt
The increase in net debt drives a higher debt-to-gross book value ratio, which could be a modest headwind to earnings growth.
Growth Moderation
Though still healthy, internal growth has moderated and was 3.1% in the quarter, compared to 7.6% in the previous quarter.
Interest Rates
REITs have been out of favor due to higher interest rates and wider credit spreads, resulting in less positive fund flows and reduced activity from private investors.
InterRent REIT Un (IIP.UN) vs. iShares MSCI Canada ETF (EWC)
Market Cap
C$1.91B
Dividend Yield2.84%
Average Volume (3M)812.26K
Price to Earnings (P/E)―
Beta (1Y)1.05
Revenue Growth2.52%
EPS Growth-573.45%
CountryCA
Employees482
SectorReal Estate
Sector Strength66
IndustryREIT - Residential
Share Statistics
EPS (TTM)0.07
Shares Outstanding140,792,250
10 Day Avg. Volume1,804,800
30 Day Avg. Volume812,260
Financial Highlights & Ratios
PEG Ratio0.02
Price to Book (P/B)0.69
Price to Sales (P/S)0.00
P/FCF Ratio24.46
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
C$13.76Price Target Upside1.55% Upside
Rating ConsensusHold
Number of Analyst Covering8
InterRent REIT Un Business Overview & Revenue Model
Company DescriptionInterRent 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.
How the Company Makes MoneyInterRent REIT makes money primarily through rental income generated from its portfolio of residential properties. The company invests in multi-residential properties, which it then leases to tenants. InterRent REIT generates revenue from the rental payments made by these tenants. The company also focuses on enhancing the value of its properties through strategic renovations and improvements, which can lead to increased rental rates and occupancy levels. Additionally, InterRent REIT may benefit from property value appreciation, which can enhance its overall portfolio value. The company's revenue model is supported by its ability to effectively manage its properties, maintain high occupancy rates, and optimize rental income. Strategic partnerships with property management firms and real estate professionals also contribute to its operational success and financial performance.
InterRent REIT Un Earnings Call Summary
Earnings Call Date:May 15, 2025
(Q1-2025)
| % Change Since: 19.49%|
Next Earnings Date:Aug 12, 2025
Earnings Call Sentiment Positive
The earnings call reflects a mostly positive sentiment with strong occupancy and revenue growth, strategic capital allocation, and successful disposition strategy. However, the increase in operating costs and external market pressures present challenges. The company seems well-positioned to navigate these issues with disciplined management and a focus on long-term growth.Q1-2025 Updates
Positive Updates
Stable Occupancy Levels
Occupancy held steady at 96.8% for the total portfolio and improved by 10 basis points to 96.9% for the same property portfolio.
AMR and Revenue Growth
Achieved a 6.2% year-over-year AMR growth for the total portfolio and 5% for the same properties, leading to total portfolio operating revenue growth of 1.7% year-over-year.
Strong Financial Position and Capital Allocation
Generated $39 million in net proceeds through three dispositions and repurchased 4.4% of outstanding units at a significant discount to IFRS NAV, boosting interest coverage ratio to 2.6 times and maintaining total debt-to-gross book value at 40.9%.
Proactive Marketing and Leasing Strategy
Executed 475 new leases during Q1, a 3% increase from the previous year, with outgoing rents growing at a compound annual rate of nearly 12% and in-place AMR increasing by about 7%.
Successful Disposition Strategy
Well on track with the disposition program, with $170 million in asset sales completed or pending, generating immediate accretion to unitholders.
Negative Updates
Increased Operating Costs
Higher operating costs due to increased utility, snow removal, and other weather-related expenses, with same property operating expenses up by 6.3% year-over-year.
Decline in Same Property NOI Margin
Same property NOI margin decreased by 110 basis points year-over-year to 64.1% due to higher operating expenses.
Impact of Colder Winter
Average heating degree days increased by 18% year-over-year, driving up utility costs by 18.1% per suite.
External Market Pressures
Challenges in certain markets, such as supply-based pressures in Vancouver, affecting asking rents and occupancy strategies.
Company Guidance
During the Q1 2025 earnings call for InterRent REIT, management provided detailed guidance on several key metrics. The total portfolio occupancy was reported at a stable 96.8%, with an improvement of 10 basis points to 96.9% for the same property portfolio. Year-over-year average monthly rent (AMR) growth was 6.2% for the total portfolio and 5% for the same properties. The total portfolio operating revenues increased by 1.7% year-over-year, with same property revenue growth at 4.7%. Despite higher operating costs due to increased utility and weather-related expenses, same property NOI growth was 3.1%, with a margin of 64.1%, down 110 basis points from the previous year. The REIT achieved funds from operations (FFO) of $21.8 million, marking a 3.3% year-over-year improvement, translating to $0.15 per unit, a 4.2% increase. The company executed a value-enhancing disposition strategy, generating $39 million in net proceeds from three dispositions and repurchasing 4.4% of its units. The balance sheet was further strengthened with an interest coverage ratio of 2.6 times, total debt-to-gross book value at 40.9%, and $236 million in available liquidity, supporting ongoing capital allocation strategies.InterRent REIT Un Financial Statement Overview
Summary
InterRent REIT has shown consistent revenue growth, but recent financial challenges include negative net income and declining cash flow. The stable debt position and strong historical financial performance provide some support.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
13.55
Price Trends
11.46
Positive
10.72
Positive
10.98
Positive
Market Momentum
0.71
Negative
75.69
Negative
65.82
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 13.55 is above the 20-day moving average (MA) of 12.47, above the 50-day MA of 11.46, and above the 200-day MA of 10.98, indicating a bullish trend. The MACD of 0.71 indicates Negative momentum. The RSI at 75.69 is Negative, neither overbought nor oversold. The STOCH value of 65.82 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 |
|---|---|---|---|---|---|---|---|
81 Outperform | C$2.35B | 3.67 | 22.26% | 3.64% | 5.77% | 108.23% | |
76 Outperform | C$7.12B | 63.29 | 1.29% | 3.36% | 0.93% | ― | |
75 Outperform | C$968.14M | 8.68 | 5.83% | 4.07% | 3.85% | -31.81% | |
75 Outperform | $3.74B | 8.45 | 8.71% | 2.04% | 9.53% | -46.06% | |
71 Outperform | C$544.09M | 5.97 | 9.03% | 3.56% | -0.29% | ― | |
71 Outperform | C$1.91B | ― | -7.00% | 2.84% | 2.52% | -573.45% | |
61 Neutral | $2.82B | 10.88 | 0.42% | 8438.92% | 5.74% | -20.95% |
* Real Estate Sector Average
Performance Comparison
TSE:IIP.UN
InterRent REIT Un
13.55
1.95
16.81%
TSE:BEI.UN
Boardwalk REIT
70.37
1.73
2.52%
TSE:KMP.UN
Killam Apartment REIT Un
19.47
2.74
16.38%
TSE:CAR.UN
Canadian Apartment
44.32
1.71
4.01%
TSE:MRG.UN
Morguard NA REIT UN
18.42
3.40
22.64%
TSE:MI.UN
Minto Apartment Real Estate Investment Trust
14.37
-0.37
-2.51%
InterRent REIT Un Corporate Events
M&A TransactionsBusiness Operations and Strategy
InterRent REIT to be Acquired in $4 Billion All-Cash Deal
Positive
May 27, 2025
InterRent REIT has announced an agreement to be acquired by CLV Group and GIC in a $4 billion all-cash transaction, offering a 35% premium to its unaffected closing unit price. This strategic move, endorsed by InterRent’s Board, includes a 40-day go-shop period to explore superior proposals, potentially impacting its market positioning and offering significant value to its stakeholders.
The most recent analyst rating on ($TSE:IIP.UN) stock is a Buy with a C$15.00 price target. To see the full list of analyst forecasts on InterRent REIT Un stock, see the TSE:IIP.UN Stock Forecast page.
DividendsBusiness Operations and Strategy
InterRent REIT Declares May 2025 Distribution
Positive
May 16, 2025
InterRent REIT has declared a distribution of $0.033075 per Trust unit for May 2025, equating to $0.3969 annually, with payment scheduled for June 16, 2025. This announcement underscores InterRent’s commitment to providing consistent returns to its unitholders and reflects its strategic focus on maintaining a conservative payout ratio while expanding its portfolio in stable markets.
The most recent analyst rating on ($TSE:IIP.UN) stock is a Buy with a C$15.00 price target. To see the full list of analyst forecasts on InterRent REIT Un stock, see the TSE:IIP.UN Stock Forecast page.
Stock BuybackBusiness Operations and StrategyFinancial Disclosures
InterRent REIT Reports Strong Q1 2025 Results and Strategic Dispositions
Positive
May 15, 2025
InterRent REIT reported solid financial results for Q1 2025, with a notable increase in same-property portfolio occupancy and average monthly rent. The company’s net operating income saw moderate growth, while funds from operations increased by 3.3% year-over-year. The REIT continued its capital recycling program by disposing of several properties at prices above their market values, enhancing shareholder value through unit repurchases. Despite a slight decrease in adjusted funds from operations, InterRent remains focused on long-term growth and maintaining balance sheet flexibility.
The most recent analyst rating on ($TSE:IIP.UN) stock is a Buy with a C$14.50 price target. To see the full list of analyst forecasts on InterRent REIT Un stock, see the TSE:IIP.UN Stock Forecast page.
Business Operations and StrategyFinancial Disclosures
InterRent REIT to Announce Q1 2025 Financial Results
Neutral
Apr 29, 2025
InterRent REIT announced it will release its first quarter 2025 financial results on May 15, 2025, followed by a conference call and webcast on May 16, 2025. This announcement is part of InterRent’s ongoing strategy to maintain transparency with stakeholders and support its objectives of providing sustainable cash distributions and maintaining a conservative financial structure.
DividendsBusiness Operations and Strategy
InterRent REIT Declares April 2025 Distribution
Positive
Apr 16, 2025
InterRent REIT has announced a distribution of $0.033075 per Trust unit for April 2025, payable on May 15, 2025, to unitholders of record as of April 30, 2025. This announcement reflects InterRent’s commitment to providing consistent returns to its investors, aligning with its strategy of sustainable growth and efficient portfolio management in the multi-residential property sector.
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.
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.