Q2 2024 Slate Grocery REIT Earnings Call Transcript
Key Points
- Slate Grocery REIT (SRRTF) reported a strong second quarter with over 700,000 square feet of total leasing completed at attractive rental rate increases.
- Same property net operating income increased by $1.4 million or 3.5% year over year, indicating healthy growth.
- The REIT's average in-place rent of $12.56 per square foot is well below the market average of $23.38, providing potential for future rent increases.
- Over 94% of the REIT's total debt remains fixed with a weighted average interest rate of 4.5%, offering protection against interest rate fluctuations.
- The REIT closed the sale of a non-grocery anchored property at a premium to IFRS book value, validating its net asset value.
- The REIT unit continues to trade at a 42.8% discount to net asset value, which may concern some investors.
- High construction costs and elevated interest rates are keeping new retail supply near record lows, potentially limiting expansion opportunities.
- The cost of financing has increased due to higher base rates, impacting overall financial strategy.
- Despite strong performance, the REIT faces challenges in refinancing upcoming debt maturities, requiring active lender engagement.
- The REIT's unit price, despite being a top quartile performer, still reflects a significant discount compared to its net asset value.
Good morning, ladies and gentlemen, and welcome to the Slate Grocery REIT Q2 2024 financial results conference call. (Operator Instructions) This call is being recorded on Thursday, August 8, 2024.
And I would now like to turn the conference over to Shivi Agarwal, Manager of Finance. Please go ahead.
Thank you, operator, and good morning, everyone. Welcome to the Q2 2024 conference call for Slate Grocery REIT. I am joined this morning by Blair Welch, Chief Executive Officer; Joe Pleckaitis, Chief Financial Officer; Connor O'Brien, Managing Director; Allen Gordon, Senior Vice President; and Braden Lyons, Vice President.
Before I get started, I would like to remind participants that our discussion today may contain forward-looking statements, and therefore, we ask you to review the disclaimers regarding forward-looking statements as well as non-IFRS measures, both of which can be found in management's discussion and analysis. You can visit Slate Grocery REIT's website to access all of the
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