Is BSR Real Estate Investment Trust (HOM.UN) halal?
BSR Real Estate Investment Trust (TSX: HOM.UN) owns and operates 26 multifamily garden-style residential rental properties across the U.S. Sunbelt — a clean business line, and interest-like income of ~US$0.96M is ~2.8% of Q2 revenue (under the ~5% ceiling). But interest-bearing debt of ~US$733.3M is ~187.8% of its ~US$390M market cap, far above the ~33% ceiling. Verdict: FAIL. Data from Q2 2026 results, screened September 30, 2026. (Note: on September 30, 2026 the REIT announced plans to dual-list on the NYSE under ticker BSRT — targeting mid-October 2026 — with the TSX ticker changing from HOM.UN to BSRT.UN.)
The two-gate Shariah screen
Every screener on this site runs the same two gates: first, the business must be halal (no conventional insurance, banking, alcohol, gambling, weapons manufacturing, and the like); second, the financial ratios must clear (debt under roughly 33% of market cap, non-compliant income under roughly 5%).
Gate one: the business — residential rental, passes
BSR is an internally managed, open-ended REIT whose “principal business … is to acquire and operate multi-family residential rental properties across the United States” (Q2 2026 financial statements, Note 1). At June 30, 2026: 26 multifamily garden-style properties in Texas, Arkansas and Oklahoma, with 89%+ of net operating income from Houston, Dallas and Austin. No alcohol, gambling, conventional finance or insurance, pork, weapons or defense, adult entertainment, or tobacco. The business gate passes.
Gate two: the ratios — debt gate fails
- Interest-bearing debt: about US$733.3M incl. leases at June 30, 2026 — “Loans and borrowings” US$731.320M (non-current) + US$0.855M (current), plus “Lease liability” US$1.064M + US$0.090M (Q2 2026 financial statements). Ex-leases: ~US$732.2M (matches the Q2 press release: “total loans and borrowings were $732.2 million”). Mortgage notes: US$379.0M at ~3.7%; weighted-average rate 4.1%; average term 3.4 years.
- Market cap: about US$390.4M (33,500,425 units × C$16.55, HOM.UN.TO, September 30, 2026).
- Debt ÷ market cap: US$733.3M ÷ US$390.4M = ~187.8% incl. leases (~187.5% excluding leases) — far above the ~33% AAOIFI ceiling (fails). For context, the REIT's own Debt to Gross Book Value is 51.7%.
- Interest-like income (Q2 2026 income statement): the line is “Finance income from interest rate derivatives and note receivable” — US$0.957M against revenue of US$34.207M = ~2.8% — under the ~5% AAOIFI ceiling (passes). Six months: US$2.123M vs US$68.030M = ~3.1%.
- Cash: cash and cash equivalents US$5.9M — about 1.5% of market cap, under the ~33% cash-plus-securities ceiling (passes).
REITs are structurally debt-heavy — but the screen applies the ~33% ceiling regardless of industry, and ~187.8% cannot clear it. Q2 2026 “Finance costs from operations” alone were US$9.0M.
What other screeners say
We found no public Zoya rating page, no Musaffa coverage, and no ShariaPortfolio coverage for BSR REIT as of September 30, 2026. Our screener reports its own figure-by-figure analysis above.
The bottom line
This screener gives BSR Real Estate Investment Trust (TSX: HOM.UN) a FAIL. The residential rental business is clean and the income ratio passes — but ~US$733.3M of interest-bearing debt is ~187.8% of the ~US$390M market cap, far above the ~33% ceiling. Watch the NYSE dual-listing (BSRT, targeting mid-October 2026) and any deleveraging. Snapshot dated September 30, 2026.
Sources
- BSR Real Estate Investment Trust, Condensed Consolidated Interim Financial Statements (unaudited), three and six months ended June 30, 2026 (approved August 12, 2026) — “Loans and borrowings” US$731,320K + US$855K; “Lease liability” US$1,064K + US$90K; “Cash and cash equivalents” US$5,876K; “Finance income from interest rate derivatives and note receivable” US$957K (Q2) / US$2,123K (6M); revenue US$34,207K (Q2) / US$68,030K (6M).
- BSR REIT Q2 2026 results press release (newswire.ca) — total loans and borrowings US$732.2M; mortgage notes US$379.0M at 3.7%; Debt to Gross Book Value 51.7%; liquidity US$39.7M; revised 2026 guidance (FFO US$0.73–0.77/unit).
- BSR REIT NYSE dual-listing press release (PRNewswire/newswire.ca, September 30, 2026) — NYSE ticker BSRT (target mid-October 2026); TSX HOM.UN → BSRT.UN; HOM.U delisted; Form 40-F filed with the SEC.
- Market data: HOM.UN.TO C$16.55, ~33,500,425 units — market cap ~C$554.4M (≈ US$390.4M) on September 30, 2026 (Finnhub; companiesmarketcap.com).
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Frequently asked questions
Is BSR REIT (HOM.UN) halal?
No. Our screener gives BSR Real Estate Investment Trust a FAIL screening result. The business — 26 multifamily garden-style residential properties in the U.S. Sunbelt (Texas, Arkansas, Oklahoma; 89%+ of NOI from Houston, Dallas and Austin) — is clean, and interest-like income of ~US$0.96M is ~2.8% of Q2 revenue (under the ~5% ceiling). But interest-bearing debt of ~US$733.3M is ~187.8% of its ~US$390M market cap — far above the ~33% ceiling. The company announced September 30, 2026 that it will dual-list on the NYSE under ticker BSRT (targeting mid-October 2026), with the TSX ticker changing from HOM.UN to BSRT.UN.
Why does BSR REIT fail the Shariah screen?
The debt gate. BSR's June 30, 2026 balance sheet shows “Loans and borrowings” of US$731.320M + US$0.855M plus lease liabilities of US$1.154M = ~US$733.3M of interest-bearing debt. Against a ~US$390M market cap (33,500,425 units × C$16.55 on September 30, 2026), that is ~187.8% — nearly six times the ~33% AAOIFI ceiling. This is structural REIT leverage, not a temporary spike: the REIT's own Debt to Gross Book Value is 51.7%, and Q2 2026 finance costs from operations alone were US$9.0M.
Isn't debt normal for a REIT?
Yes — REITs are structurally debt-heavy, and BSR's leverage is ordinary for the sector. But AAOIFI-style screening applies the ~33% debt-to-market-cap ceiling regardless of industry; a REIT's debt-heavy balance sheet is a legitimate FAIL under these rules, not a reason to adjust the threshold. Interest-bearing debt of ~US$733.3M against a ~US$390M market cap cannot clear the gate.
What do Zoya, Musaffa and ShariaPortfolio say about BSR REIT?
We found no public Zoya rating page, no Musaffa coverage, and no ShariaPortfolio coverage for BSR REIT (HOM.UN) as of September 30, 2026. Our screener reports its own figure-by-figure analysis above.
Could BSR REIT become compliant?
Only with a major deleveraging: debt would need to fall to roughly one-sixth of its current level relative to market cap (or the unit price would need to rise dramatically with debt flat). Re-screen after major asset sales, equity raises, or debt repayments — none of which are currently announced.