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

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

*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

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(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.)