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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