H&R Real Estate Investment Trust (HR) Q2 2025 earnings summary

Executive summary

• Strategic repositioning has shifted the portfolio to 67% residential and industrial assets as of June 30, 2025, with over $2.5B in office and retail sales since June 2021 and ongoing development and rezoning initiatives.

• Sold or agreed to sell $121.6M in real estate assets in H1 2025, supporting portfolio simplification and long-term value creation.

• Same-property net operating income (NOI) (cash basis) grew 3.4% for H1 2025 year-over-year.

• Special Committee continues to evaluate value-maximizing alternatives after unsolicited interest, incurring $8.7M in related transaction costs.

• Strong operational performance with 93% occupancy and a simplified, growth-oriented asset base.

Financial highlights

• FFO per unit for Q2 2025 was $0.314, up 2.6% year-over-year; $0.61 per unit for H1 2025 vs. $0.60 last year.

• AFFO per unit for Q2 2025 was $0.262, up from $0.246 in Q2 2024.

• NAV per unit stood at $18.86 as of June 30, 2025.

• $437.4M in liquidity and $4.3B in unencumbered properties as of June 30, 2025.

• Net loss for Q2 2025 was $166.4M, compared to $272.7M in Q2 2024, mainly due to fair value adjustments.

Outlook and guidance

• Focus remains on growing Class A residential and industrial property exposure in high-growth U.S. markets, especially the Sunbelt and gateway cities.

• Ongoing rezoning of $250M in office assets to upscale residential, with several Toronto projects expected to receive final approvals in Q1 2026.

• Development pipeline includes multiple residential and industrial projects in the U.S. Sun Belt and Greater Toronto Area, with completions expected in late 2025 and mid-2026.

• Asset sales to continue as market conditions permit, with proceeds redeployed into core growth areas.

• Retail segment expected to remain stable due to strong grocer tenant base.