Canada's H&R REIT Q2 net loss narrows

Overview

• H&R REIT Q2 net loss narrows to C$166.4 mln from loss of C$272.7 mln year ago

• FFO rises to C$87.8 mln, AFFO increases to C$73.4 mln

• Same-property NOI (cash basis) grows 3.4% yr/yr, driven by retail

Outlook

• H&R REIT plans to sell office and retail properties as market conditions allow

• Company aims to grow residential and industrial segments in Toronto and U.S. cities

• Economic conditions impacting property valuations and development plans

• No specific financial guidance provided

Result Drivers

• ASSET SALES - H&R REIT completed or entered agreements to sell $121.6 mln of real estate assets in H1 2025, part of its strategy to simplify the portfolio and enhance long-term value, per CEO Tom Hofstedter

• SAME-PROPERTY NOI - Same-property net operating income increased by 3.4% in H1 2025, attributed to a rise in retail segment income by 8.2%

• VALUATION REDUCTION - Management reduced valuations on downtown Toronto office properties due to softening economic conditions and halted high-rise residential projects

Key Details

Analyst Coverage

• The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 4 "strong buy" or "buy", 3 "hold" and no "sell" or "strong sell"

• The average consensus recommendation for the diversified reits peer group is "buy"

• Wall Street's median 12-month price target for H&R Real Estate Investment Trust is C$13.00, about 10.1% above its August 12 closing price of C$11.69

• The stock recently traded at 11 times the next 12-month earnings vs. a P/E of 8 three months ago

Press Release: ID:nCNWMKX70a