Canada's Allied Properties REIT Q2 net loss widens on property fair value hit

Overview

• Canada office property REIT's Q2 rental revenue fell 3.1% yr/yr

• Q2 FFO per unit and AFFO per unit declined sharply from prior year

• Leasing and occupancy rates exceeded expectations; disposition program remains on track

Outlook

• Company revises 2026 Same Asset NOI outlook to decline of 8.0% to 9.0%

• Allied Properties REIT maintains 2026 year-end occupied area guidance at 84% to 86%

• Company expects 2026 property dispositions to total about C$500 mln in gross proceeds

Result Drivers

• LEASE-UP ACTIVITY - Higher-than-expected occupancy and leasing rates driven by earlier lease-up and strong demand from existing tenants for expansion space

• PROPERTY TAX ASSESSMENT - Same Asset NOI fell due to a non-recurring retroactive property tax assessment

• DISPOSITION PROGRAM - Proceeds from property sales supported deleveraging and were on track with targets

Company press release: ID:nGNX2SgTVK

Key Details

Analyst Coverage

• The current average analyst rating on the shares is "hold" and the breakdown of recommendations is no "strong buy" or "buy", 8 "hold" and 1 "sell" or "strong sell"

• The average consensus recommendation for the commercial reits peer group is "hold"

• Wall Street's median 12-month price target for Allied Properties Real Estate Investment Trust is C$10.00, about 3.6% below its July 27 closing price of C$10.37

• The stock recently traded at 31 times the next 12-month earnings vs. a P/E of 12 three months ago

Reuters Recommended Reads

• July 28 - BXP Q2 profit beats expectations on higher occupancy, raises FY outlook

• July 27 - Kilroy Realty Q2 revenue falls on lower portfolio occupancy rates

• July 27 - Singapore's CapitaLand Ascott Trust H1 revenue falls on property closures, divestments

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(This story was created using Reuters automation and AI based on LSEG and company data. It was checked and edited by a Reuters journalist prior to publication.)