Minto Apartment Real Estate Investment Trust (MI) Q1 2025 earnings summary

Executive summary

• Same property revenue grew 2.1% year-over-year, led by a 3.7% increase in unfurnished suite revenue, but offset by lower occupancy, reduced furnished suite revenue, and temporary retail vacancy at Minto Yorkville.

• Entered Metro Vancouver via a 50% acquisition of Lonsdale Square and sold a non-core Ottawa asset for $33.8 million.

• Purchased $15.4 million of units under NCIB in Q1 2025 at a discount to book value; $28.2 million since November 2024.

• Normalized FFO and AFFO per unit declined by 2.9% and 3.3% year-over-year, respectively.

Financial highlights

• Same property portfolio revenue reached $37.7 million, up 2.1% year-over-year; total portfolio revenue decreased 2.4% to $38.0 million.

• SPP NOI was flat at $23.2 million; total portfolio NOI declined 4.6% to $23.3 million.

• Average monthly rent for occupied unfurnished suites rose 5.3% to $2,021.

• Realized gain on lease was 5.4% in Q1, down from 11.2% in Q4 2024; gain-to-lease potential at Q1 end was 11.2% ($15.4 million annualized).

• Commercial lease revenue dropped 39.8% year-over-year due to temporary vacancy at Minto Yorkville; furnished suite revenue fell 21% as more suites were converted to unfurnished.

Outlook and guidance

• Low- to mid-single-digit same-store revenue growth expected for 2025, with headwinds from supply in Toronto and Calgary and temporary commercial vacancy.

• 2025 anticipated to be challenging, but 2026 expected to benefit from new commercial lease payments and carbon tax savings.

• Supply growth in Toronto and Calgary expected to decelerate after 2026, with more balanced conditions anticipated.

• Long-term fundamentals for Canadian urban rental housing remain strong due to housing shortages and rental affordability.

• Management notes near-term uncertainty due to elevated supply, tariffs, paused immigration, geopolitical risk, and high interest rates.