How a trust is adapting to economic pressures
Canadian Net Real Estate Investment Trust (CNET REIT) has announced its financial results for the fourth quarter of 2024, highlighting capital recycling initiatives and portfolio stability. The trust also confirmed cash distributions for April, May, and June 2025.
For Q4 2024, CNET reported funds from operations (FFO) of $3.25 million, or $0.158 per unit, compared to $3.34 million, or $0.162 per unit, in Q4 2023. Rental income decreased by 6.4% year-over-year to $6.8 million, while net operating income (NOI) declined by 2.8% to $4.8 million. Net income attributable to unitholders fell to $1.8 million, down from $4.3 million in the same quarter last year.
Over the full 12-month period of 2024, FFO totaled $12.36 million ($0.601 per unit), compared to $13.06 million ($0.635 per unit) in 2023. Rental income stood at $26.1 million, down 1.6%, and NOI reached $18.9 million, marking a 2.6% decrease from the previous year. Net income attributable to unitholders was $7.1 million, compared to $18.2 million in 2023.
The declines in FFO and NOI were primarily attributed to higher interest costs on mortgage renewals and a reduction in rental income due to property dispositions under the trust’s capital recycling strategy. These were partially offset by lower interest expenses on credit facilities and increased rental income from newly acquired properties.
Strategic initiatives and outlook
Kevin Henley, president and CEO of the REIT, described 2024 as a “pivot year” for CNET, emphasizing the successful reinvestment of proceeds from the sale of five gas station properties.
“We are very pleased with the achievements we made with our capital recycling initiatives during the year, which will materialize in 2025,” said Henley. “The proceeds from the sale of five gas station properties in 2024 were successfully reinvested into four high-quality, necessity-based retail properties leased to national triple-A tenants. Three of these acquisitions were completed shortly after year-end, and all are immediately accretive to FFO per unit while enhancing the quality and resilience of our portfolio. As we move into 2025, our portfolio remains at 100% occupancy and is well positioned to weather today’s macroeconomic environment.”
Distributions
CNET declared monthly cash distributions of $0.02875 per unit ($0.345 per unit annually) for April, May, and June 2025. These distributions will be paid on April 30, May 29, and June 30 to unitholders of record as of April 15, May 15, and June 15, respectively.
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