Boardwalk REIT Earnings Call Highlights Strong Growth

Boardwalk Real Estate Investment Trust (($TSE:BEI.UN)) has held its Q3 earnings call. Read on for the main highlights of the call.

Boardwalk REIT’s recent earnings call paints a generally positive picture, highlighting strong financial performance, high occupancy rates, and effective capital recycling. Despite some challenges, such as anticipated increases in property taxes and moderated leasing spreads, the overall sentiment remains optimistic with significant highlights outweighing the lowlights.

Strong Financial Performance

Boardwalk REIT reported a robust financial performance with a 5.1% increase in same-property rental revenue and an 8.6% rise in same-property net operating income. The operating margin improved by 220 basis points, and funds from operation per unit saw a notable increase of 10.8%, underscoring the company’s financial health and operational efficiency.

High Occupancy Rates

The company maintained high occupancy rates, just below 98%, which were supported by strategic rebranding and repositioning efforts. This high occupancy is a testament to Boardwalk’s effective management and market positioning.

Successful Capital Recycling

Boardwalk completed $733 million in real estate transactions, including $221 million in dispositions and $512 million in acquisitions. This indicates effective capital recycling, allowing the company to optimize its portfolio and invest in growth opportunities.

Positive Guidance Update

Boardwalk has increased its FFO per unit outlook to between $4.58 and $4.65, with anticipated same-property NOI growth guidance of 8.5% to 10%. This positive guidance reflects confidence in the company’s future performance and strategic direction.

ESG Improvement

The company’s GRESB score increased by 7.5% compared to the previous year, highlighting Boardwalk’s ongoing commitment to ESG initiatives and its efforts to enhance sustainability and corporate responsibility.

Increased Property Taxes Expected

Boardwalk anticipates higher property taxes next year due to increased assessments in multifamily apartments. This is a challenge the company is preparing to address as part of its financial planning.

Slight Negative New Lease Spreads in Calgary

In Calgary, new lease spreads were slightly negative, attributed to the company’s strategy of prioritizing occupancy in more competitive, higher-priced segments. This approach aims to maintain high occupancy rates despite market challenges.

Moderation in Leasing Spreads

Year-over-year, leasing spreads have moderated, reflecting a more balanced supply-demand environment. This moderation is due to increased supply in select portfolio markets, which Boardwalk is navigating strategically.

Forward-Looking Guidance

Boardwalk REIT’s forward-looking guidance remains optimistic, with key metrics such as a 5.1% increase in same-property rental revenue and an 8.6% surge in same-property net operating income. The company continues to focus on maintaining high occupancy and resident retention, supported by strong leasing spreads, particularly in Alberta. The estimated fair value of investment properties has increased significantly, driven by new acquisitions and rental rate growth.

In summary, Boardwalk REIT’s earnings call reflects a positive outlook with strong financial performance and strategic initiatives driving growth. Despite some challenges, the company’s effective management and strategic planning position it well for future success.