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News Release

InterRent REIT Results for the Second Quarter of 2013


Ottawa, Ontario(August 12, 2013) – InterRent Real Estate Investment Trust (TSX-IIP.UN) (InterRent or the “REIT”) today reported financial results for the second quarter ended June 30, 2013. 


  • Operating revenue for the quarter increased by $4 million, or 34.2%, to $15.5 million compared to Q2 2012. 
  • The average monthly rent across the portfolio for June 2013 increased to $909 per suite from $850 for June 2012, an increase of 6.9%.  For stabilized properties, the average monthly rents increased from $865 to $896, or 3.6%, for June 2013 compared to June 2012.
  • Economic Vacancy increased from 3.4% in June 2012 to 4.0% in June 2013 as management pushed rents.
  • Net Operating Income (NOI) increased by $2.5 million, or 36.0%, for the quarter compared to Q2 2012.  NOI for the quarter was 61.6% of operating revenues compared to 60.8% of operating revenue, for Q2 2012.
  • Net Operating Income (NOI) from stabilized properties increased by $0.3 million, or 4.9%, for the quarter compared to Q2 2012.  NOI from stabilized operations for the quarter was $5.8 million, or 61.1% of operating revenues compared to $5.5 million, or 60.2% of operating revenue, for Q2 2012.
  • Funds From Operations (FFO) for the quarter increased by $1.6 million, or 44.5%, to $5.1 million (or $0.09 per unit) compared to $3.5 million (or $0.08 per unit) for Q2 2012.
  • Adjusted Funds From Operations (AFFO) for the quarter increased by $1.4 million, or 47.0%, to $4.4 million (or $0.08 per unit) compared to $3.0 million (or $0.07 per unit) for Q2 2012. 
  • Distributable Income (DI) for the quarter increased by $2.1 million, or 71.0%, to $5.0 million (or $0.09 per unit) compared to $2.9 million (or $0.07 per unit) for Q2 2012.   

·         The weighted average interest rate for the REIT’s mortgages was down 14 basis points to 3.37% at the end of the quarter as compared to 3.51% at the end of Q1 2013.

·         Fair Market Value of investment properties has increased to $734.3 million at the end of Q2 2013 from $600.3 million at the end of Q1 2013.  The increase comes as a result of continued NOI improvements within the portfolio as well as the addition of 1,020 suites.

·         For the year to date, InterRent has closed on the acquisition of 1,341 suites within three core markets that have been targeted for growth, an increase in suite count of 28.6%. 


Financial Highlights

Selected Consolidated Information
In $000’s, except per Unit amounts
and other non-financial data

3 Months Ended

June 30, 2013

3 Months Ended

June 30, 2012

Total suites



Occupancy rate (June)



Average rent per suite (June)



Operating revenues



Net operating income (NOI)






NOI per weighted average unit - basic



NOI per weighted average unit - diluted



Funds from operations (FFO)



FFO per weighted average unit - basic



FFO per weighted average unit - diluted



Adjusted funds from operations (AFFO)



AFFO per weighted average unit - basic



AFFO per weighted average unit - diluted



Distributable income (DI)



DI per weighted average unit - basic



DI per weighted average unit - diluted



Cash distributions per unit



AFFO payout ratio



Stabilized average rent per suite



Stabilized NOI %



Interest coverage (rolling 12 months)



Debt service coverage (rolling 12 months)



Debt to GBV





Results for the Quarter

Operating revenue for the quarter increased by $4.0 million, an increase of 34.2%, to $15.5 million compared to the same quarter last year.  The REIT had 6,040 suites at the end of the current quarter compared to 4,652 at the end of Q2 2012, a net increase of 1,388 suites, or 29.8%.  The average monthly rent across the entire portfolio for June 2013 increased to $909 per suite from $850 (June 2012), an increase of 6.9%.  On a stabilized portfolio basis (stabilized properties are those owned by the REIT continuously for 24 months), the average monthly rent per suite increased from $865 to $896 over the same period, an increase of 3.6%. Management expects to continue to grow revenues organically through moving to market rent on suite turnovers, guideline increases, continued roll-out of AGIs as well as continuing to drive other ancillary revenue streams.

Management believes in trying to optimize the balance of supply and demand by pushing rents and monitoring vacancy within acceptable levels in order to strike the right balance and maximize revenue.  The June 2013 vacancy rate of 4.0% across the entire portfolio is at the high end of the range that management believes is required in order to maximize operating revenues.  “We continuously monitor rents and try and find the optimal time to push them in order to drive value for our unitholders,” said Mike McGahan, CEO.  

The decrease in operating expenses as a percentage of operating revenues from 39.2% in Q2 2012 to 38.4% in Q2 2013 was driven by operating efficiencies (as the number of suites have increased); by reduced operating costs (as a result of the previous capital expenditures); and, improvement to the overall quality of portfolio (as a result of the acquisitions, dispositions and capital expenditures).  Property operating costs as a percentage of operating revenue were 16.0% for the quarter compared to 16.8% for Q2 2012.    “We grew our suite count by just over 20% in the quarter and we could not have done so without the continued effort and dedication of our team.  Everyone is focused on continuing to find savings and eliminate inefficiencies in the existing portfolio as well as our new properties.  We continue to believe that our current staffing levels are adequate to address not only the current requirements but also the increasing portfolio and positions us well for the future,” said Mike McGahan, CEO.

Utility costs for the quarter amounted to $1.4 million or 9.2% of operating revenue compared to $1.1 million or 9.6% for Q2 2012.  As a percentage of operating revenues and on a per suite basis, utility costs have decreased slightly over the same quarter last year as a result of energy savings initiatives, the expiry of retail natural gas contracts, and from our hydro sub-metering initiative.  Our hydro sub-metering initiative reduced our utility costs by 12.6% for the quarter. Management expects this initiative to continue to contribute to stabilized and non-stabilized NOI growth over the next 2-3 years. 

NOI for the quarter saw continued improvement over prior comparative period.  NOI for the portfolio was $9.6 million for the quarter, or 61.6% of operating revenue, compared to $7.0 million, or 60.8% of operating revenue, for Q2 2012.  Overall NOI was up 36.0% for the quarter compared to Q2 2012.  Stabilized property NOI for the first quarter was up $0.3 million, or 4.9% over the same period last year.  “We continue to strive to improve the NOI quarter over comparative quarter both in our stabilized properties as well as within our acquisitions.  The ability to drive NOI in order to create value is one of the key factors we evaluate when looking at an acquisition,” said Mike McGahan, CEO.

Given the significant amount of capital required to acquire and maintain properties, being able to access mortgage debt and the interest rate thereon is crucial for the long term success of the REIT.  Over the last year, the REIT has lowered the weighted average interest rate by 57 basis points from 3.94% at Q2 2012 to 3.37% at Q2 2013 and extended the average life to maturity from 3.0 years to 4.3 years.  The REIT will continue to review the mortgages and maturities in order to capitalize on the availability of long term funds at the historically low rates that are currently available. 

In keeping with management’s strategy of maximizing returns for unitholders and focusing on clusters of buildings within geographical proximity to each other (in order to build operational efficiencies and attract focused, professional staff) properties are reviewed on a regular basis to determine if they should be kept or disposed.  Over the course of the quarter, four properties were purchased (1,016 suites) in addition to the three properties (325 suites) that were acquired in Q1 2013.  “The 1,341 suites that we have acquired so far this year are all within three core markets that we have targeted for growth.  We believe that these are all strong rental markets; provide opportunities to build on existing scale; and in the case of the Montreal acquisitions, provide a new platform for future growth.  In the case of the most recently announced acquisition on Bell Street in Ottawa, the property is our most ambitious repositioning to date however, our proven team with their many years of experience managing these types of projects are looking forward to transforming this building and the area as a whole.  We expect repositioning efforts at Bell Street will take to the second half of 2014 to complete and that the property will become a strong contributor to our bottom line going forward,” said Mike McGahan, CEO. 

About InterRent

InterRent REIT is a growth-oriented real estate investment trust engaged in increasing Unitholder value and creating a growing and sustainable distribution through the acquisition and ownership of multi-residential properties.  

InterRent's strategy is to expand its portfolio primarily within markets that have exhibited stable market vacancies, sufficient suites available to attain the critical mass necessary to implement an efficient portfolio management structure and, offer opportunities for accretive acquisitions.

InterRent's primary objective is to use the proven industry experience of the Trustees, Management and Operational Team to: (i) provide Unitholders with stable and growing cash distributions from investments in a diversified portfolio of multi-residential properties; (ii) enhance the value of the assets and maximize long-term Unit value through the active management of such assets; and (iii) expand the asset base and increase Distributable Income through accretive acquisitions. 

*Non-GAAP Measures

InterRent prepares and releases unaudited quarterly and audited consolidated annual financial statements prepared in accordance with IFRS (GAAP). In this and other earnings releases, as a complement to results provided in accordance with GAAP, InterRent also discloses and discusses certain non-GAAP financial measures, including NOI, FFO, AFFO, and DI. These non-GAAP measures are further defined and discussed in the MD&A released on May 13, 2013, which should be read in conjunction with this press release. Since NOI, FFO, AFFO and DI are not determined by GAAP, they may not be comparable to similar measures reported by other issuers. InterRent has presented such non-GAAP measures as Management believes these measures are relevant measures of the ability of InterRent to earn and distribute cash returns to Unitholders and to evaluate InterRent's performance.  These non-GAAP measures should not be construed as alternatives to net income (loss) or cash flow from operating activities determined in accordance with GAAP as an indicator of InterRent's performance.

Cautionary Statements

The comments and highlights herein should be read in conjunction with the most recently filed annual information form as well as our consolidated financial statements and management’s discussion and analysis for the same period.  InterRent’s publicly filed information is located at

This news release contains “forward-looking statements” within the meaning applicable to Canadian securities legislation.  Generally, these forward-looking statements can be identified by the use of forward-looking terminology such as “plans”, “anticipated”, “expects” or “does not expect”, “is expected”, “budget”, “scheduled”, “estimates”, “forecasts”, “intends”, “anticipates” or “does not anticipate”, or “believes”, or variations of such words and phrases or state that certain actions, events or results “may”, “could”, “would”, “might” or “will be taken”, “occur” or “be achieved”. InterRent is subject to significant risks and uncertainties which may cause the actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward looking statements contained in this release. A full description of these risk factors can be found in InterRent’s most recently publicly filed information located at  InterRent cannot assure investors that actual results will be consistent with these forward looking statements and InterRent assumes no obligation to update or revise the forward looking statements contained in this release to reflect actual events or new circumstances.


The Toronto Stock Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this release.  


For further information about InterRent please contact:

Mike McGahan

Curt Millar, CA

Chief Executive Officer

Chief Financial Officer

Tel: (613) 569-5699 Ext 244

Tel: (613) 569-5699 Ext 233

Fax: (613) 569-5698

Fax:(613) 569-5698


web site: