The following is a summary of the H&R Real Estate Investment Trust (HRUFF) Q4 2023 Earnings Call Transcript:

Financial Performance:

• H&R reduced their debt from $6.1 billion to $3.7 billion at year-end of 2023, improving their debt to total assets to 44%.

• The same property net operating income increased by 10.3% compared to the previous year.

• FFO for the year ended 2023 was $1.33 per unit, showing an increase from the previous year's $1.17 per unit.

• Cash distributions per unit saw a rise from $0.59 in 2022 to $0.70 per unit in 2023.

• 2023's year-end debt to adjusted EBITDA improved to 8.5 times from 9.6 times at the end of 2022.

• The net asset value per unit decreased slightly to $20.75 per unit at the end of 2023 from $21.80 at the end of 2022.

• Q4 2023 saw a downward fair value adjustment of $197.6 million.

Business Progress:

• H&R accomplished sustainable investment on 45 properties, totalling $2.4 billion, and is expecting more sales later this year.

• They successfully completed the spin-off of Primaris REIT valued at $2.4 billion and repurchased 27 million units of $340 million.

• H&R executed its strategic plans to reposition as a more simplified and growth-oriented REIT. As part of this strategy, office exposure was reduced to 17%, with 7% properties advancing through rezoning.

• Turnover at two new industrial developments in Mississauga took place with rent payments beginning in Q2.

• There are two assets worth nearly $300 million up for sale, with H&R intending to conduct asset disposals on the same level as 2022.

• Despite some slowdown due to fresh supplies in the Sunbelt region, occupancy rates are projected to improve by the end of 2024, achieving a new normal by 2025.

• The company continues to focus on expanding NOI margins through centralizing efforts and value-add opportunities.

More details: H&R REAL ESTATE INVESTMENT TRUST IR

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