Canada's CAPREIT Q3 revenue misses estimates, FFO per unit down 1.7%

By Reuters News


Overview

  • Canada rental housing REIT's Q3 revenue declined year-over-year

  • Q3 FFO per unit fell 1.7% yr/yr due to property sales and higher interest costs

  • Company repurchased C$29 mln in units during the quarter


Outlook

  • Company expects next few quarters to remain challenging due to new supply and slower population growth

  • Higher mortgage refinancing costs expected to put additional pressure on earnings

  • Company sees signs of stabilization in leasing, with rental growth on suite turnovers turning positive


Result Drivers

  • HIGHER COSTS - Amortization of tenant inducements and increased maintenance costs weighed on Canadian same property NOI

  • DISPOSITIONS AND INTEREST - Lower FFO per unit was mainly due to lost NOI from property sales and higher interest expense

  • LEASING STABILIZATION - Rental growth on suite turnovers turned positive and new inducements declined, per CFO


Company press release:


Key Details

Metric

Beat/Miss

Actual

Consensus Estimate

Q3 Revenue

Slight Miss*

C$246.62 mln

C$248.10 mln (1 Analyst)

Q3 NOI

C$162.99 mln

Q3 NOI Margin

66.10%

*Applies to a deviation of less than 1%; not applicable for per-share numbers.


Analyst Coverage

  • The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 10 "strong buy" or "buy", 3 "hold" and no "sell" or "strong sell"

  • The average consensus recommendation for the residential reits peer group is "buy"

  • Wall Street's median 12-month price target for Canadian Apartment Properties Real Estate Investment Trust is C$40.00, about 27.4% above its November 3 closing price of C$31.40

  • The stock recently traded at 19 times the next 12-month earnings vs. a P/E of 19 three months ago


Reuters Recommended Reads

  • Nov 3 - Canada's Boardwalk REIT Q3 FFO per unit falls; tightens 2026 guidance

  • Nov 2 - Canada's RioCan Q3 core FFO per unit up 5.1% on retail occupancy strength

  • Nov 2 - Canada's First Capital REIT Q3 operating FFO per unit rises on higher net operating income


For questions concerning the data in this report, contact Estimates.Support@lseg.com. For any other questions or feedback, contact reuters.support@thomsonreuters.com.


(This story was created using Reuters automation and AI based on LSEG and company data. It was checked and edited by a Reuters journalist prior to publication.)

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