H&R Real Estate Investment Trust (HR) Q3 2025 earnings summary

Executive summary

• Asset sales totaling approximately $2.6 billion are under negotiation, with significant property sales and a major retail spinout since June 2021, shifting the portfolio to 69% residential and industrial assets and 71% of assets by value in the U.S.

• Same-property net operating income (NOI) on a cash basis grew 2.1% for the nine months ended September 30, 2025, year-over-year, with portfolio occupancy at 93.4%.

• FFO per unit was CAD 0.90 for the nine months ended September 30, 2025, unchanged from the prior year, and NAV per unit was $17.74 as of September 30, 2025.

• Strategic review concluded with no acceptable en bloc offers; Board now oversees execution of asset sales.

• Q3 2025 net loss was $322.9 million, driven by fair value write-downs, with cash distributions per unit unchanged year-over-year.

Financial highlights

• Fair value of real estate assets as of September 30, 2025: $8.4 billion, with $4.1B residential, $1.5B office, $1.5B industrial, and $1.3B retail.

• Debt to total assets at proportionate share was 47.3%, and debt to EBITDA was 9.3x as of September 30, 2025.

• FFO payout ratio was 50% and AFFO payout ratio was 61.3% for the nine months ended September 30, 2025.

• Unencumbered property pool totaled approximately $4.1 billion, with $345.6 million available under lines of credit.

• Weighted average interest rate on debt was 4.0%.

Outlook and guidance

• Management anticipates entering binding agreements for asset sales by year-end, with no scenario foreseen where current distributions would be unsustainable.

• Focus remains on growing residential and industrial segments, with ongoing development in U.S. Sun Belt and Canadian industrial markets.

• Expects gradual re-acceleration in revenue growth through 2026 and beyond, supported by strong demand and affordability advantages in multifamily housing.