InterRent REIT's Q1 2025 Results: A Catalyst for Multifamily Sector Dominance

In a market where rising interest rates and shifting tenant preferences have tested the resilience of even the most established real estate players, InterRent REIT has delivered a performance that underscores its position as a leader in North America’s multifamily sector. The REIT’s Q1 2025 results reveal a strategic blend of operational discipline, geographic focus, and balance sheet strength, positioning it to capitalize on enduring demand for high-quality rental housing. For income investors seeking stability and growth, this is a signal to act.

Same-Store Rental Growth: Anchored in High-Barrier Markets

At the core of InterRent’s Q1 performance is a 5.0% year-over-year (YoY) increase in average monthly rent (AMR) across its same-property portfolio, reaching $1,722 in March 2025. This growth is no accident—it reflects the REIT’s deliberate focus on high-barrier-to-entry markets such as the Greater Montreal and Vancouver areas, where rent growth exceeded 6% YoY, outpacing broader regional averages. These markets are characterized by constrained supply, strong population growth, and limited land availability, creating a structural tailwind for rental pricing.

While rising utility costs (up 16.6% YoY) and colder weather temporarily compressed NOI margins, InterRent’s ability to raise rents in key markets demonstrates its pricing power. Even in Vancouver, where occupancy dipped slightly due to new supply, the REIT stabilized performance by the end of Q1, achieving a 95.0% occupancy rate—a testament to its tenant retention strategies and asset quality.

Occupancy: A Barometer of Demand Resilience

InterRent’s 96.9% same-property occupancy rate—up 10 basis points YoY—speaks to the consistency of demand in its markets. The 96.8% total portfolio occupancy remains near historic highs, even as the REIT proactively reduced its suite count by 3.3% YoY through strategic dispositions. This disciplined approach to portfolio management ensures capital is reallocated to higher-return assets, a move that has already yielded results: dispositions in Ottawa, Montreal, and Hamilton sold at premiums to fair market value, with proceeds funneled into $69.6 million in unit buybacks (Jan–Apr 2025).

The occupancy trends in “Other Ontario” markets (up 90 bps YoY) highlight the breadth of InterRent’s geographic diversification. By avoiding overexposure to any single market, the REIT mitigates regional risk while capitalizing on emerging growth corridors.

Balance Sheet Fortification: A Shield Against Rate Volatility

With central banks still navigating an uncertain interest rate environment, InterRent’s financial health is a critical differentiator. Its debt-to-GBV ratio rose to 40.9% YoY, but this increase is offset by $236 million in liquidity and a 91% CMHC-insured mortgage portfolio, a historical high. The 2.59x interest coverage ratio and 1.69x debt service coverage ratio further signal a fortress balance sheet capable of withstanding stress.

The REIT’s conservative leverage and insured debt structure insulate it from sudden rate hikes, while its variable-rate exposure remains limited to just 4% of total debt. This combination of low risk and ample liquidity positions InterRent to outpace peers in both defensive and growth scenarios.

Dividend Sustainability: A Foundation for Income Investors

For income-focused investors, the 5.0% YoY increase in distributions to $0.0992 per unit is a clear win. Annualized, this translates to a $0.3968 dividend per unit, supported by an AFFO payout ratio of 78%—comfortably within safe parameters. At the Q1 repurchase price of $10.23 per unit, this yields an estimated 3.88% dividend yield, a compelling return in an era of low bond yields.

The REIT’s buyback program further amplifies this appeal: canceling 4.4% of the public float year-to-date has reduced dilution and narrowed the gap between intrinsic value and trading price. With $236 million in liquidity, InterRent retains flexibility to continue repurchases even amid market volatility.

Why Act Now?

InterRent’s Q1 results are not just a snapshot of current performance but a roadmap to future dominance. The REIT’s high-barrier market focus, disciplined capital recycling, and fortified balance sheet create a moat against competitors. For income investors, the 3.88% dividend yield paired with low-risk exposure offers a rare combination of safety and growth.

As the multifamily sector continues to evolve, InterRent’s execution in both rising and falling markets positions it to outperform. This is a buy for investors seeking steady dividends and capital appreciation in an uncertain interest rate environment.

Act now—before the gap between InterRent’s intrinsic value and its trading price narrows further.