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

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.

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.

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.