H&R Real Estate Investment Trust (HR) Q4 2025 earnings summary

Executive summary

• Achieved 1.6% growth in same property net operating income (NOI) on a cash basis for 2025, despite multifamily supply concerns and economic headwinds.

• Over $2.6B in non-strategic office and retail asset sales since June 2021, with residential and industrial assets now comprising 84% of the portfolio, up from 34% in 2021.

• Completed spin-off of 27 shopping centres and major property sales, including Primaris REIT spinout and interests in 69 properties totaling $5.4B.

• Strong operational performance with 93.1% portfolio occupancy as of December 31, 2025.

• U.S. portfolio share increased from 45% to 68% since June 2021.

Financial highlights

• FFO for 2025 was $339.3M ($1.212 per unit), up from $334.4M ($1.195 per unit) in 2024; AFFO for 2025 was $278.6M ($0.995 per unit), up from $267.0M ($0.954 per unit) in 2024.

• $7.4B fair value of real estate assets as of December 31, 2025: $4.4B residential, $1.8B industrial, $0.9B office, $0.3B retail.

• Net income loss of ($791.6M) for 2025, compared to ($119.7M) in 2024, driven by significant fair value adjustments.

• $16.09 NAV per unit; $3.9B in unencumbered properties; $368.9M in liquidity.

• Cash distributions totaled $0.60 per unit in 2025, with a payout ratio of 60.3% of AFFO.

Outlook and guidance

• Management expects further asset sales in 2026, with potential disposition value ranging from $500M to over $1B, and continued focus on residential and industrial growth.

• Office vacancy expected to increase in 2026 due to a major lease expiry; negotiations ongoing for new tenants.

• Multifamily supply is forecast to decline 36% in 2026, expected to stabilize fundamentals.

• Anticipates new lease commencements and ongoing development completions in 2026.

• Ongoing focus on increasing exposure to high-growth residential and industrial segments.