Allied Properties Real Estate Investment Trust (AP) Q1 2025 earnings summary

Executive summary

• Achieved positive same-asset NOI growth, improved retention to 75%, and maintained stable leased area with strong tour activity, despite economic headwinds.

• Q1 2025 operations were strong with stable occupancy and leasing across most urban submarkets, except Vancouver, where occupancy lagged slightly.

• Progressed on development and upgrade projects, including leasing milestones at M4 Vancouver, Toronto House, and King Toronto.

• Strengthened balance sheet through CAD 850 million in refinancing, with proceeds allocated to debt reduction and improved debt profile.

• Disposition program of non-core assets is on track, with three assets under contract for CAD 50 million and a target of CAD 300 million in dispositions for the year.

Financial highlights

• Rental revenue rose 4.9% year-over-year to $150.6M; operating income increased 3.5% to $81.2M.

• Net loss widened to $107.7M from $18.8M, mainly due to a $164.1M fair value loss on investment properties.

• Same-asset NOI increased by 2.0% year-over-year.

• Average in-place net rent per occupied sq ft rose 5% to CAD 25.30 compared to the prior year.

• Retention rate returned to historical level of 75%.

Outlook and guidance

• Management expects Same Asset NOI growth of ~2% in 2025, but FFO and AFFO per unit to contract by ~4% due to higher interest costs from 2024 acquisitions.

• Year-end 2025 goals: occupancy/leased area ≥90%, $300M+ in non-core property sales, monetization of a loan receivable, and net debt/EBITDA below 10x.

• No change to the outlook despite limited instances of delayed tenant decision-making; pipeline visibility and leasing activity support confidence in targets.

• Ongoing global trade disruptions may delay achievement of these goals.