BSR Real Estate Investment Trust (HOM.UN) Q2 2024 earnings summary

Executive summary

• Q2 2024 delivered solid financial and operating results, with continued organic growth per unit and enhanced financial flexibility.

• Same-Community revenue and NOI both increased year-over-year, with occupancy stable at 95.3% and a blended rental rate increase of 0.3%.

• FFO and AFFO per unit increased 13% and 20%, respectively, with a focus on delivering total unitholder return.

• Board approved a 7.7% increase in monthly distribution, reflecting confidence in business outlook and cash flow growth.

• Resident satisfaction reached record levels, with a 33% increase in positive online reviews and a 4.5/5 Google score.

Financial highlights

• Same-Community revenue: $42.2M (+0.4% YoY); NOI: $24.1M (+4.6% YoY); average rent per unit: $1,507 (+$6 YoY).

• FFO per unit: $0.26 (+13% YoY); AFFO per unit: $0.24 (+20% YoY); AFFO payout ratio improved to 54.5% from 63.9%.

• Net loss for Q2 2024 was $39.2M, improved from $45.9M loss in Q2 2023, mainly due to non-cash fair value adjustments.

• NAV per unit as of June 30, 2024 was $16.87, down from $20.48 a year earlier, reflecting lower property values from cap rate expansion.

• Weighted average occupancy: 95.3%, stable YoY.

Outlook and guidance

• 2024 guidance midpoints for FFO per unit and AFFO per unit raised to $0.96 and $0.88, respectively, due to lower finance costs.

• Same-Community total revenue growth midpoint revised down to 1.0% for 2024; NOI growth midpoint unchanged at 2.0%.

• Property operating expenses and real estate taxes expected to decline 1%.

• Expect continued strong demand in Texas markets, with new supply absorption outpacing expectations.

• Anticipate new deliveries to drop over 40% by 2026, supporting future rent growth.