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Boardwalk REIT Reports Strong Results for Q1 2025 with Resilient Demand for Quality Affordable Housing

Harrison BrooksWednesday, May 7, 2025 4:46 am ET
2min read

Boardwalk Real Estate Investment Trust (TSX: BEI.UN) has delivered a robust quarter, proving that demand for affordable housing remains a cornerstone of real estate resilience. In Q1 2025, the Trust achieved 11.6% year-over-year FFO growth to $1.06 per Unit, while maintaining occupancy near 98%—a testament to its strategic focus on middle-income housing in growth-oriented markets. This performance underscores the enduring appeal of affordable housing in Canada, where Boardwalk’s portfolio has become a barometer for demographic and economic trends.

Ask Aime: "Boardwalk Real Estate Investment Trust's Q1 2025 performance showcases its resilience in the affordable housing market."

Financial Fortitude Amid a Balanced Market

Boardwalk’s Q1 results highlight operational discipline and pricing power. Same-property NOI rose 10.3% to $96.5 million, driven by higher average rents ($1,538 per unit, up 8.5% year-over-year) and cost containment. Despite a slight dip in occupancy to 97.8% from 98.8% in Q1 2024, the Trust’s preliminary May occupancy of 98.0% signals stability as spring leasing season begins.

This growth aligns with its revised 2025 guidance, narrowing the FFO range to $4.35–$4.60 per Unit—a reflection of confidence in its ability to sustain revenue momentum.

Regional Strengths and Strategic Capital Allocation

Boardwalk’s regional diversification has paid dividends. In Edmonton, its largest market, 13% Same-property NOI growth was fueled by lower incentives and rising rents. Saskatchewan outperformed with 15.9% growth, while Ontario and British Columbia contributed steadily, with 8.4% and 6.4% increases, respectively. Even in Quebec, where heating and maintenance costs rose, the Trust managed 1.7% NOI growth through rent hikes.

Ask Aime: How is Boardwalk's Q1 FFO growth impacting its share price?

The Trust’s capital strategy further reinforces its growth thesis. In Q1, it sold three Edmonton communities for $80 million, using proceeds to repurchase $30 million of its units via its NCIB program. Acquisitions, such as the Elbow 5 Eight community in Calgary ($93 million) and a $37.4 million joint venture stake, position Boardwalk to capitalize on undervalued assets.

Balance Sheet: Flexibility Meets Prudence

With $272.8 million in liquidity, Boardwalk’s debt metrics improved, including a debt-to-EBITDA ratio of 9.99x—down from 10.08x at year-end—and 96% of mortgages CMHC-insured, shielding it from interest rate volatility. CEO Sam Kolias emphasized that $505 million of 2025 debt renewals will be locked in at rates between 3.50%–4.05%, with $148.6 million already renewed at 3.80%. This conservative approach ensures financial stability amid rising costs.

The Affordable Housing Imperative

Boardwalk’s success hinges on its focus on quality affordable housing, a sector that has defied broader market softness. The Trust’s 73% portfolio renewal rate since 2017—through common area upgrades—has enhanced tenant retention, a key factor in maintaining occupancy. ESG initiatives, including its upcoming sixth annual sustainability report, further bolster its long-term appeal to socially conscious investors.

Risks and the Road Ahead

While Boardwalk navigates a balanced market, risks persist. New supply in Calgary may pressure rents in certain submarkets, though the Trust’s 6.0% cap rate on trailing NOI and $192,000 per-suite implied value suggest it remains competitively positioned.

Conclusion: A Compelling Play on Housing Resilience

Boardwalk REIT’s Q1 results affirm its status as a leader in affordable housing, with 10.3% NOI growth and $96.07 per-unit NAV signaling undervaluation relative to its peers. Its disciplined capital recycling, cost management, and focus on high-demand markets position it to capitalize on Canada’s persistent housing affordability gap. With updated guidance tightening its FFO range and Same-property NOI growth outlook, investors can anticipate compounding returns through both dividends ($1.62 annualized) and NAV growth.

The Trust’s 35.3% payout ratio leaves ample room to invest in accretive acquisitions and buybacks, while its 96% CMHC-insured mortgages provide a shield against interest rate risks. In a sector where affordability is non-negotiable, Boardwalk’s execution in Q1 2025 sets a high bar for 2025’s full-year performance.

With 98% occupancy and a portfolio aligned to core demographic needs, Boardwalk remains a compelling investment for those betting on the enduring demand for quality affordable housing.

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Disclaimer: the above is a summary showing certain market information. AInvest is not responsible for any data errors, omissions or other information that may be displayed incorrectly as the data is derived from a third party source. Communications displaying market prices, data and other information available in this post are meant for informational purposes only and are not intended as an offer or solicitation for the purchase or sale of any security. Please do your own research when investing. All investments involve risk and the past performance of a security, or financial product does not guarantee future results or returns. Keep in mind that while diversification may help spread risk, it does not assure a profit, or protect against loss in a down market.
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