InterRent REIT sees signs of market turnaround as revenues rise in Q2

LIV apartments
InterRent REIT owns the LIV Apartment complex on Bell Street in Ottawa. (Google Street View image)

A string of property acquisitions helped fuel another strong quarter for InterRent REIT, with the company projecting further gains in the second half of 2021 as universities resume in-class learning and businesses bring employees back to the office.

In financial filings for the three-month period ending June 30, the Ottawa-based real estate investment trust said its funds from operations – a key cash-flow metric – grew 16.5 per cent compared with the second quarter of 2020 to $17.8 million. 

Much of that growth was propelled by acquisitions. As of the end of June, the firm owned 11,850 suites, up nearly 16 per cent from a year earlier. InterRent’s balance sheet was also bolstered by rising rents, which jumped from an average of $1,290 per suite in June 2020 to $1,339 in the same properties this year.

While the same-property occupancy rate of its suites fell nearly a full percentage point year-over-year to 92.2 per cent in June, InterRent noted that was a slight gain from 92.1 per cent in March. 

The company said it believes the COVID-driven downturn in rental occupancy will be “temporary in nature,” adding it expects to see an influx of tenants throughout the rest of this year and into 2022 “as Canada’s vaccination rollout reaches critical mass, borders reopen to fully vaccinated travellers, schools reopen for in-person learning and offices welcome back employees.”

InterRent also announced it closed a $30.1-million deal in late July to buy 94 suites in Mississauga in a joint partnership with Crestpoint Real Estate Investments. The firm also acquired more than 400 suites in the second quarter, including a handful in Ottawa, worth a total of $133.7 million.

“There is a lot of positivity out there, and we have seen increased leasing traffic going into the third quarter as young professionals and domestic students come back to the city to enjoy social engagement,” CEO Mike McGahan said in a statement.

InterRent’s local holdings include the LIV Apartment towers on Bell Street in west Centretown. The company also owns a 47.5 per cent interest in Trinity Development Group’s proposed three-tower project at 900 Albert St. near Bayview Station after adding to its one-third stake in the development last year.

The REIT’s shares ended the day down 31 cents to $17.42 on the Toronto Stock Exchange.