Canadian Apartment Properties Real Estate Investment Trust
(“CAPREIT”) (TSX:CAR.UN) announced today that it has closed on four
non-core Canadian dispositions for combined consideration of $83.5
million, and has entered into an agreement to dispose of an
additional parcel of unused land for $2.0 million. CAPREIT has also
completed the acquisition of two strategically aligned, newly
constructed purpose-built rental properties in Canada for $130.0
million. All amounts disclosed herein exclude transaction costs.
A Media Snippet accompanying this announcement is
available by clicking on this link.
This week, CAPREIT closed on the sale of two
rental properties located in Langley, British Columbia, to New
Vista Society, a local non-profit organization that provides
affordable housing to seniors and families. New Vista Society is
receiving funding from British Columbia’s Rental Protection Fund
(the “BC RPF”). The buildings were both constructed in 1978 and
contain 108 residential suites in total. Combined gross proceeds of
$35.0 million were used in part to repay $6.5 million in aggregate
mortgage principal outstanding.
In addition, earlier in March, CAPREIT completed
the disposition of a non-core, 240-suite property built in 1962 in
Québec City, Québec, for $36.3 million in gross consideration, with
the buyer having assumed the $21.4 million in mortgage principal
outstanding. In January, CAPREIT also sold 32 residential suites
built in 1969 in Victoria, British Columbia, for $12.3 million,
with proceeds used in part to repay the outstanding $2.9 million
mortgage.
CAPREIT also announced that it has entered into
an agreement to dispose of a 0.3 acre parcel of unused land in
Halifax to a neighbouring developer for $2.0 million. CAPREIT has
secured a Right of First Offer on the neighbouring site, once the
apartment is constructed. The buyer of the land has waived
conditions, and closing is anticipated in the second quarter of
2024.
CAPREIT also announced that this month, it
acquired two stabilized, concrete, rental apartment properties, one
16-storey and the other 17-storey, primely located in a
sought-after community in London, Ontario. The high-quality
buildings were constructed in 2019 and 2021, and contain an
aggregate 291 spacious residential suites with a large average size
of 1,160 square feet. The on-strategy, purpose-built rental
apartments were acquired for $130.0 million, representing a
significant discount to what it would cost to build today. CAPREIT
additionally assumed the two existing below-market mortgages, which
have a combined $80.9 million in principal outstanding, a weighted
average term to maturity of 2 years, and carry an attractive 2.3%
blended interest rate. The residual $49.1 million purchase price
was funded by cash sourced from previously announced
dispositions.
“We’re very pleased with the progress we’ve made
on the execution of our strategy in the first quarter of 2024,
including our initiatives surrounding the resolution of the
Canadian housing supply and affordability crises,” commented Mark
Kenney, President and CEO. “These transactions exemplify all facets
of that strategy in action. We are proud to have sold two
properties to a non-profit organization that will be able to
preserve the long-term affordability of those suites, which are
situated in one of Canada’s least affordable markets. We are very
happy to have been able to work with the BC RPF on these important
transactions. Simultaneously, we are supporting the supply of new
housing for Canadians by investing in purpose-built rental
apartments, such as the buildings we’ve just acquired in an
attractive and growing region in southwestern Ontario. In turn,
this is encouraging incremental residential development in key
metropolitan areas throughout Canada.”
“Preservation of our existing housing stock is
one of the most effective strategies to address the affordability
crisis in British Columbia and across Canada,” shared Katie
Maslechko, CEO of the Rental Protection Fund. “It is a
transformative model that is already delivering results and
protecting renters, and this transaction between CAPREIT and New
Vista Society is an excellent example with the potential to be
replicated across Canada. With the support of the Rental Protection
Fund, this acquisition will ensure these homes remain affordable in
perpetuity, while growing the capacity of the Community Housing
sector, and freeing up capital that can be redeployed into new
supply.”
“We were able to purchase these well-located
concrete new build properties for only $385 per leasable square
foot, representing a steep discount to replacement cost, with
favourable in-place debt financing. The mid-4% cap rate for these
luxury towers exceeds the weighted average cap rate on our first
quarter dispositions, which were sold at a premium to their
previously reported IFRS fair values,” continued Julian Schonfeldt,
Chief Investment Officer. “Additionally, in Q1, we’ve so far sold
$58 million of equity in Irish Residential Properties REIT plc,
reducing CAPREIT’s ownership from 18.7% to 11.3%. We’ve used the
proceeds to accretively repurchase $27 million of CAPREIT units, at
a discount to NAV, with the remainder of the proceeds used to repay
debt. We’re excited about the ground we’ve covered on our strategic
priorities to start 2024, and going forward, we remain focused on
newly constructed Canadian rental apartments and the ongoing
creation of value for our Unitholders.”
ABOUT CAPREITCAPREIT is
Canada’s largest publicly traded provider of quality rental
housing. As at December 31, 2023, CAPREIT owns approximately 64,300
residential apartment suites, townhomes and manufactured home
community sites well-located across Canada and the Netherlands,
with approximately $16.5 billion of investment properties in Canada
and Europe. For more information about CAPREIT, its business and
its investment highlights, please visit our website at
www.capreit.ca and our public disclosure which can be found under
our profile at www.sedarplus.ca.
CAUTIONARY STATEMENTS REGARDING
FORWARD-LOOKING STATEMENTSCertain statements contained in
this press release constitute forward-looking statements within the
meaning of applicable Canadian securities laws which reflect
CAPREIT’s current expectations and projections about future
results. Forward-looking statements generally can be identified by
the use of forward-looking terminology such as “outlook”,
“objective”, “may”, “will”, “expect”, “intent”, “estimate”,
“anticipate”, “believe”, “consider”, “should”, “plans”, “predict”,
“estimate”, “forward”, “potential”, “could”, “likely”,
“approximately”, “scheduled”, “forecast”, “variation” or
“continue”, or similar expressions suggesting future outcomes or
events. The forward-looking statements made in this press release
relate only to events or information as of the date on which the
statements are made in this press release. Actual results and
developments are likely to differ, and may differ materially, from
those expressed or implied by the forward-looking statements
contained in this press release. Any number of factors could cause
actual results to differ materially from these forward-looking
statements. Although CAPREIT believes that the expectations
reflected in forward-looking statements are reasonable, it can give
no assurances that the expectations of any forward-looking
statements will prove to be correct. Such forward-looking
statements are based on a number of assumptions that may prove to
be incorrect. Accordingly, readers should not place undue reliance
on forward-looking statements.
Forward looking statements in this press release
are subject to certain risks and uncertainties that could result in
actual results differing materially from these forward-looking
statements. These risks and uncertainties are more fully described
in regulatory filings that can be obtained on SEDAR+ at
www.sedarplus.ca.
Except as specifically required by applicable
Canadian securities law, CAPREIT does not undertake any obligation
to update or revise publicly any forward-looking statements,
whether as a result of new information, future events or otherwise,
after the date on which the statements are made or to reflect the
occurrence of unanticipated events. These forward-looking
statements should not be relied upon as representing CAPREIT’s
views as of any date subsequent to the date of this press
release.
For more information, please
contact:
CAPREIT |
CAPREIT |
CAPREIT |
Mr. Mark Kenney |
Mr. Stephen Co |
Mr. Julian Schonfeldt |
President & Chief Executive Officer |
Chief Financial Officer |
Chief Investment Officer |
(416) 861-9404 |
(416) 306-3009 |
(647) 535-2544 |
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