Overview

* Canada's Allied Properties Q3 operating income down 3% YoY

* The urban office REIT faces slower lease finalization, impacting occupancy targets

* Elevated interest expenses put pressure on Q3 results

Outlook

* Allied expects year-end occupied and leased area to match Q3 levels

* Same asset NOI projected to decrease by 1% for 2025

* Diluted FFO and AFFO per unit expected to contract by 10% in 2025

* Company will not achieve its targeted occupancy of 90% by year-end

Result Drivers

* LEASE FINALIZATION - Slower lease finalization affected occupancy targets and pressured Q3 results

* VACANT SPACE LEASED - Co leased more vacant space in Montreal and Vancouver, but overall occupancy targets remain unmet

* ELEVATED INTEREST EXPENSE - Interest expenses increased 13.2% YoY to C$35.5 mln due to delayed non-core property sales

Key Details

Metric Beat/Mis Actual Consensu

s s

Estimate

Q3 C$147.9

Rental mln

Revenue

Analyst Coverage

* The current average analyst rating on the shares is "hold" and the breakdown of recommendations is 4 "strong buy" or "buy", 2 "hold" and 3 "sell" or "strong sell"

* The average consensus recommendation for the commercial REIT's peer group is "hold"

* Wall Street's median 12-month price target for Allied Properties Real Estate Investment Trust is C$18.75, about 1.8% below its October 29 closing price of C$18.42

* The stock recently traded at 19 times the next 12-month earnings vs. a P/E of 16 three months ago

Press Release:

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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.)