Choice Properties Real Estate Investment Trust (CHP.UN) Q3 2024 earnings summary

Executive summary

• Reported a net loss of $663.0 million for Q3 2024, primarily due to unfavorable fair value adjustments to Exchangeable Units, compared to net income of $435.9 million in Q3 2023.

• FFO per unit diluted increased 3.2% year-over-year to $0.258; AFFO per unit diluted rose 21.2% to $0.229.

• Portfolio occupancy remained high at 97.7%, with retail at 97.6%, industrial at 98.1%, and mixed-use & residential at 94.7%.

• Completed $172.1 million in real estate transactions, including a major joint venture acquisition with Crestpoint and strategic dispositions.

• Announced CFO succession, with Erin Johnstone to succeed Mario Barrafato in March 2025.

Financial highlights

• Q3 2024 funds from operations (FFO) were $186.7 million, or $0.258 per unit, up 3.2% year-over-year; AFFO was $165.9 million, up 21.2% year-over-year.

• Same-asset cash NOI grew by $7 million (3%) year-over-year, with industrial segment up 11.7%.

• IFRS NAV per unit rose to $14.04, a 1.8% increase over last quarter, driven by operational gains and fair value adjustments.

• Rental revenue for Q3 2024 was $339.9 million, up $14.8 million from Q3 2023.

• Distribution declared per unit was $0.190, with a payout ratio of 73.7% for FFO and 82.9% for AFFO.

Outlook and guidance

• Expecting to deliver at the higher end of 2.5%-3% same-asset NOI growth guidance for 2024.

• Annual FFO per unit diluted guidance set at $1.02-$1.03, reflecting 2.0%-3.0% year-over-year growth.

• G&A expected to normalize to $13 million per quarter for FFO purposes in 2025 after outsourcing costs phase out.

• Anticipate continued strong leasing spreads and stable occupancy, with industrial occupancy expected to improve in 2025.