CT Real Estate Investment Trust (CRT-UN) Q2 2024 earnings summary

Executive summary

• Portfolio consists of 373 properties valued at ~$7.0B, with 30.6M sq. ft. of GLA and a 99.4% occupancy rate as of June 30, 2024.

• Weighted average lease term is 8.0 years, among the longest in the sector, with 96.3% of annualized base rent from investment grade tenants.

• NOI and AFFO per unit increased by 4.4% and 3.6% year-over-year, respectively, reflecting strong operational performance.

• Distributions have been raised 11 times since IPO, with a 4.1% CAGR over five years and a recent increase effective last month.

• Strong relationship with Canadian Tire Corporation provides growth and acquisition opportunities, with CTC representing 92.6% of total GLA.

Financial highlights

• Property revenue rose 4.8% year-over-year to $144.4 million; NOI increased 4.4% to $114.9 million.

• Diluted FFO per unit rose 2.1% to $0.337, and AFFO per unit increased 3.6% to $0.315 year-over-year.

• Q2 2024 YTD FFO per unit (diluted) is $0.668; AFFO per unit (diluted) is $0.623.

• AFFO payout ratio for Q2 was 71.4%, stable year-over-year; Q2 2024 YTD payout ratio is 72.1%.

• Cash distributions paid in Q2 rose 3.5% year-over-year, with a cumulative increase of 42.3% since IPO.

Outlook and guidance

• Development pipeline remains steady with 19 projects representing $283 million in committed investment and 715,000 sq. ft. of incremental GLA, 94% pre-leased.

• Focus on embedded organic growth, CTC acquisitions, development, intensifications, and third-party net lease opportunities.

• Canada Square mixed-use redevelopment in Toronto progressing, with updated rezoning application submitted.

• Expectation of modest impact from lower interest rates on same asset NOI growth in coming quarters.

• Anticipation that recent Bank of Canada rate cuts may spur more market activity, though current transaction volumes remain low.