November 12, 2010 / 2:03 PM / 7 years ago

CORRECTED - CORRECTED-UPDATE 1-InnVest REIT Q3 FFO down 13 pct

(Corrects paragraph 8 to clarify that hotel expenses rose 3 percent to C$122.2 million, not C$50.8 million.)

* Q3 FFO C$0.33 vs C$0.46 last year

* Average daily rate down 3 pct to C$117.2 mln

* Hotel oper. income down 6 pct to C$50.8 mln

Nov 12 (Reuters) - InnVest Real Estate Investment Trust INN_u.TO posted a 13 percent fall in its quarterly funds from operations (FFO), hurt by lower hotel operating income and higher expenses.

“The lodging recovery in Canada has been muted with softer group demand in key markets and moderating economic trends,” Chief Executive Kenneth Gibson said in a statement.

FFO -- a property measure that strips out the distorting effects of depreciation and other factors from earnings -- for the hotel REIT in the July-September quarter was C$32.2 million, or 33 Canadian cents per unit.

That compares with FFO of C$36.8 million, or 46 Canadian cents a unit, last year.

Analysts on average had expected InnVest, which operates full-service and limited service hotels, to post FFO of 40 Canadian cents a unit, according to Thomson Reuters I/B/E/S.

Hotel operating income fell 6 percent to C$50.8 million. However, revenue per available room (RevPAR) rose 2 percent to C$82.9 million. The REIT, which posted third-quarter occupancy rate of 70.7 percent, up 3 percent, said it expects the trend to continue with firming occupancies leading to improvements in average daily rate in mid 2011.

Average daily rate for the quarter fell 2 percent to C$117.2 million. Hotel expenses rose 3 percent to C$122.2 million.

The Toronto, Ontario-based REIT’s units, which have gained 9 percent in value in the past three months, closed at C$6.65 on Thursday on the Toronto Stock Exchange. (Reporting by Arnika Thakur in Bangalore; Editing by Unnikrishnan Nair)

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