BTB Real Estate Investment Trust (BTB) has reported its financial outcomes for the third quarter of 2024, which ended on September 30. Despite a setback regarding an industrial property due to a tenant's bankruptcy, resulting in a decreased occupancy rate of 92.3%, BTB has demonstrated resilience and strategic growth. This progress is highlighted by improvements across rental revenue and net operating income. Rental income from the same property portfolio increased by 1.5%, with a significant 4.8% rise in operating income.
Notably, BTB's financial health remains stable, with debt ratios showing minor changes and a total debt ratio of 58.3%. Strategic initiatives have been instrumental, especially in mortgage refinancing, allowing BTB to optimize interest rate management. Following the quarter, BTB also successfully redeemed the Series G debenture using funds from mortgage financings. BTB continues to uphold its strategic objectives, with a keen focus on property management and acquisitions, aimed at boosting long-term value for stakeholders. The trust has identified portfolio expansion and improved lease renewal rates as fundamental contributors to its strong financial performance in this quarter.
For the current quarter, rental revenue improved to $32.5 million, portraying a 3.9% increase year-on-year. Overall, for the nine-month period, the rental revenue amounted to $97.4 million, marking a slight 1.5% year-on-year increase. When adjusting for a prior one-time revenue adjustment, rental revenue increased by 3.1% from the same period last year. Net operating income (NOI) reached $18.8 million this quarter, reflecting a 3.8% rise in comparison to the previous year, driven by redevelopment and leasing activities. Despite challenges, including tenant bankruptcies, the industrial sector's robust recovery and increased rental spreads facilitated this growth.
Comparing the cumulative nine months, the NOI slightly decreased by 0.3%, primarily due to a prior year's one-time adjustment; however, underlying growth remained at 2.3%. Net income experienced a decline to $5.5 million, primarily impacted by non-cash adjustments and fair value decreases in financial instruments and properties. Subsequent analysis of the quarter indicates an improvement, mainly due to strong lease renewal rates in key segments. BTB's debt ratios, a critical component of their financial strategy, have been carefully managed. The total debt ratio stands at 58.3%, supported by robust asset management.
The mortgage debt ratio was recorded at 52.5%, a minimal increase signifying effective control over financial obligations, despite fluctuating interest rates. Further bolstering its financial strategy, BTB enhanced its credit facility capabilities post-quarter with an additional line of credit, bringing available credits to $31.3 million. The strategic redemption of Series G debentures at maturity reflects BTB's methodical approach in using mortgage loan proceeds to manage existing debts prudently. BTB holds a portfolio of 75 properties, encompassing a leasable area of approximately 6.1 million square feet with a market capitalization of $316.8 million as of September 30, 2024.
The strategic management principles at BTB remain aligned with solidifying its foothold across the retail, industrial, and suburban office sectors in Canada, ensuring sustained enhancements in its service offerings and asset profitability.
