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Boardwalk Real Estate Investment Trust reported an 11.2% year-on-year increase in adjusted funds from operations (FFO) for the third quarter, supported by an 8.1% rise in net operating income. The trust has also raised its 2025 FFO guidance to between CAD 4.58 and CAD 4.65 per unit, anticipating 8.5-10% growth in same-property NOI. Strong demand for affordable multi-family housing is expected to continue next year, with high occupancy levels and strategic capital allocation driving performance.
Boardwalk Real Estate Investment Trust (REIT) announced earlier this week that its adjusted funds from operations rose by 11.2% year-on-year during the third quarter, with funds from operations per unit up by 10.8%. The company recorded an 8.1% increase in net operating income, supported by consistent rental demand and efficient property management. Advertisement
For 2025, the trust has revised its FFO guidance to between CAD 4.58 and CAD 4.65 per unit, projecting same-property net operating income growth of around 8.5% to 10%. Management expects sustained demand for affordable multi-family housing through the coming year, particularly across Alberta and Saskatchewan, where rental markets remain strong.
The company attributed its improved results to rental revenue growth, with same-property rental income rising by 5.1% year-on-year. This was driven by higher in-place occupied rents and reduced rental incentives. Boardwalk also maintained a high occupancy rate of 97.7%, achieved through resident retention and strategic lease renewals.
In addition, the REIT continued its disciplined approach to capital management, closing acquisitions and dispositions worth CAD 419.5 million and CAD 141.2 million, respectively, as part of its capital upcycling strategy. For the quarter, rental revenue stood at CAD 160.8 million, adjusted FFO at CAD 57.4 million, total FFO at CAD 65.9 million, and operating income at CAD 108.3 million.
Analysts currently maintain a favourable outlook on the company, with the average rating categorised as 'buy'. Out of ten analysts, seven have issued 'strong buy' or 'buy' recommendations, while three have rated the stock as 'hold'. The residential REITs peer group, by comparison, holds an average recommendation of 'hold'.
According to Wall Street estimates, the median 12-month price target for Boardwalk REIT stands at CAD 85.00, representing an upside of roughly 25% from its recent closing price of CAD 63.87. The company's shares were recently trading at nine times expected 12-month earnings, compared with a price-to-earnings ratio of 11 around three months ago.
Boardwalk REIT's third-quarter performance reflects robust operational execution, aided by rental income growth, strong occupancy, and effective capital allocation. With upgraded guidance for 2025 and a positive industry outlook, the trust remains well-positioned to benefit from continued demand for affordable multi-family housing across Western Canada. Analysts' optimism and upward price projections further highlight investor confidence in the company's long-term growth prospects.
Source - Reuters
5th Jun, 2025
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