CT Real Estate Investment Trust (CTRRF) Q3 2024 Earnings Call Highlights: Strong NOI Growth and ...

GuruFocus News
4 min read

In This Article:

  • NOI Growth: Increased by 3.4% in Q3.

  • AFFO per Unit: Increased by 2.3% to $0.38.

  • Same-Store NOI Growth: Increased by 1.2% or $1.3 million.

  • Same-Property NOI Growth: Increased by 1.8% or $2 million.

  • Occupancy Rate: Maintained at 99.4%.

  • Weighted Average Lease Term: 7.8 years.

  • G&A Expense as Percentage of Property Revenue: 2.2% in Q3.

  • Diluted FFO per Unit: Increased by 1.2% to $0.331.

  • AFFO Payout Ratio: 75.0% in Q3.

  • Interest Coverage Ratio: 3.52 times.

  • Indebtedness Ratio: 40.7%.

  • New Investments: $85 million, adding 283,000 square feet of GLA.

  • Cash on Hand: $5 million at the end of Q3.

  • Available Credit Facility: $291 million committed, $300 million uncommitted.

Release Date: November 06, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

  • CT Real Estate Investment Trust (CTRRF) reported a healthy and stable Q3 with strong growth metrics, including a 3.4% increase in NOI and a 2.3% increase in AFFO per unit.

  • The REIT announced $85 million in new investments this quarter, which will bolster their strong pipeline of projects, including over 0.5 million square feet of new development projects by the end of 2025.

  • The occupancy rate remains high at 99.4%, indicating a substantially fully leased portfolio and reflecting the quality and strength of their assets.

  • CT Real Estate Investment Trust (CTRRF) maintains a strong relationship with Canadian Tire, which continues to provide strategic growth opportunities and a stable development pipeline.

  • The REIT's balance sheet remains strong with an indebtedness ratio of 40.7% and significant liquidity available through committed and uncommitted credit facilities.

Negative Points

  • Transaction volumes remain low by historic standards, which could impact future growth opportunities.

  • Same-store NOI growth is tracking lower than previous years, primarily due to higher nonrecoverable property costs and reduced contributions from maintenance capital.

  • Interest coverage ratio decreased to 3.52 times from 3.71 times in the comparable quarter of 2023, driven by increased interest expenses.

  • The REIT faces challenges with the timing of debenture refinancing, with $200 million coming due in June 2025, amidst a fluctuating interest rate environment.

  • Development costs have increased on a per square foot basis, which could impact future project returns compared to acquisition yields.

Q & A Highlights

Q: Can you provide more details on the timing and value of the recent vend-in investments and how you plan to fund them? A: The Winnipeg property is a stand-alone Canadian Tire store, and the Mantra Black Quebec property is a newly built shopping center. Both are expected to close in Q4, with a combined value of approximately $70 million. These will be funded largely with cash and a small amount of Class B units. - Kevin Salsberg, CEO, and Jodi Shpigel, SVP Real Estate

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