/NOT FOR DISTRIBUTION TO UNITED
STATES NEWSWIRE SERVICES OR FOR DISSEMINATION IN
THE UNITED STATES/
WINNIPEG, MB, Aug. 10,
2022 /CNW/ - Marwest Apartment Real Estate Investment
Trust ("Marwest Apartment REIT" or the "REIT") (TSXV:
MAR.UN) reported financial results for the three and six months
ended June 30, 2022. This press
release should be read in conjunction with the REIT's Condensed
Consolidated Interim Financial Statements and Management's
Discussion and Analysis ("MD&A") for the three and six
months ended June 30, 2022, which are available on the
REIT's website at www.marwestreit.com and
at www.sedar.com.
Mr. William Martens, Chief
Executive Officer and Trustee commented "We are excited to report
another increase to our Net Asset Value per unit ("NAV per unit")
in this quarters' results, with an increase of over 18% since
Dec. 31, 2021. In addition, we have
an exceptional mortgage profile with the majority of our mortgages
carrying low-risk CMHC insured debt, with an average term to
maturity of over six years."
Q2 2022 Highlights
- Increase in Net Asset Value per Unit ("NAV per unit") from
$1.27 at December 31, 2021 to $1.50 at June 30,
2022
- Generated net operating income ("NOI") of $954,939 and $1,865,540 for the three and six months ended
June 30, 2022
- Funds from operations ("FFO") of $0.0346 per unit for the six months ended
June 30, 2022
- Adjusted funds from operations ("AFFO") of $0.0299 per unit for the six months ended
June 30, 2022
- Occupancy rate of 95.47% reported for the first six months of
2022
- 164,000 Trust Units purchased and cancelled from the NCIB in Q2
2022 at an average price of $0.91
Operations Summary
Portfolio
Operational Information
|
|
|
As at June 30,
2022
|
Number of
properties
|
|
|
3
|
Number of
suites
|
|
|
363
|
Average Occupancy Rate
to date
|
|
|
95.47 %
|
Average rental rate to
date
|
|
|
$1,509
|
|
|
|
|
Financial
Summary
|
|
Three months
ended
June 30, 2022
|
Six months ended
June 30, 2022
|
Property
revenue
|
|
$
1,619,305
|
$
3,238,045
|
Net Operating
Income
|
|
954,939
|
1,865,540
|
Net income
|
|
3,148,015
|
5,026,738
|
FFO
|
|
350,486
|
679,016
|
FFO per unit
|
|
$
0.0179
|
$
0.0346
|
AFFO
|
|
306,731
|
587,565
|
AFFO per
unit
|
|
$
0.0157
|
$
0.0299
|
|
|
|
|
|
|
|
|
Debt
Metrics
|
|
|
As at June 30,
2022
|
Debt to total
assets
|
|
|
68.10 %
|
Weighted average
mortgage interest rate
|
|
|
2.82 %
|
Weighted average months
to debt maturity
|
|
|
76.5
|
Debt service coverage
ratio
|
|
|
1.18
|
Financial Summary
The REIT generated FFO and AFFO per unit of $0.0346 and $0.0299
during the six months ended June 30,
2022.
FFO and AFFO are defined in "Non-IFRS Measures" in the Q2 2022
Management's Discussion and Analysis.
Reconciliation of
Net Income to FFO and
AFFO
|
|
Three months
ended
June 30, 2022
|
|
Six months ended
June 30, 2022
|
Net income
|
|
$
3,148,015
|
|
$
5,026,738
|
Distribution on
Exchangeable Units
|
|
40,669
|
|
81,340
|
Fair value
adjustments
|
|
(2,838,198)
|
|
(4,429,062)
|
FFO
|
|
350,486
|
|
679,016
|
FFO per unit
|
|
$
0.0179
|
|
$
0.0346
|
Reconciliation of
FFO to AFFO
|
|
|
|
|
FFO
|
|
$
350,486
|
|
$
679,016
|
Capital
expenditures
|
|
(28,636)
|
|
(71,921)
|
Leasing
costs
|
|
(15,119)
|
|
(19,530)
|
AFFO
|
|
306,731
|
|
587,565
|
AFFO per
unit
|
|
$
0.0157
|
|
$
0.0299
|
NAV at June 30,
2022
|
|
Unitholders'
Equity
|
$
20,704,350
|
Exchangeable
Units
|
8,673,021
|
NAV
|
29,377,371
|
Trust Units at
June 30, 2022
|
8,667,564
|
Exchangeable
Units at June 30, 2022
|
10,841,274
|
Deferred units
at June 30, 2022
|
81,491
|
Total Units
outstanding
|
19,590,329
|
NAV per Unit
|
$
1.50
|
Outlook
Management is optimistic that with increased COVID-19
vaccination rates, lessening of COVID-19 restrictions, immigration
as well as inflation and increasing interest rates, demand for
multi-family rentals will continue to grow, as evidenced in the
2022 CBRE Canada Real Estate Market Outlook. Management is
focused on growing the portfolio and unitholder value through
increasing rental rates where the market allows, future acquisition
opportunities that will increase the overall size and performance
of the REIT, as well as maintaining a manageable debt
structure. The current debt of the REIT is all in fixed
terms with an average remaining mortgage term of over six
years. The majority of debt is CMHC insured. Upon
refinancing the REIT could have the potential to see more
favourable mortgage terms on the potential transitioning
conventional debt to CMHC insured debt. Management believes
the organic growth in NAV due to the paydown of debt over the
mortgage terms is a positive outcome of the higher leveraged
position of the these mortgages will reduce over time lowering the
debt to GBV and thereby increasing the NAV per unit.
Management anticipates the demand for rental housing to continue
to grow in the coming quarters due to increasing immigration and
the affordability gap in rental vs. home ownership. With the
bank of Canada increasing interest
rates to control inflation, home ownership costs continue to rise,
widening the affordability gap between rentals and home
ownership. The increase in operating costs due to
inflation may be offset by increases in rental rates, where the
market allows, as 74 percent of the portfolio is not under rent
control.
About Marwest Apartment Real Estate Investment Trust
The REIT is an unincorporated open-ended trust governed by the
laws of the Province of Manitoba.
The REIT was formed to provide Unitholders with the opportunity to
invest in the Canadian multi-family rental sector through the
ownership of high-quality income-producing properties, with an
initial focus on stable markets throughout Western Canada.
Forward-looking Statements
The information in this news release includes certain
information and statements about management's views of future
events, expectations, plans and prospects that constitute
forward‐looking statements. These statements are based upon
assumptions that are subject to significant risks and
uncertainties. Because of these risks and uncertainties and
as a result of a variety of factors, the actual results,
expectations, achievements or performance may differ materially
from those anticipated and indicated by these forward‐looking
statements. A number of factors could cause actual results to
differ materially from these forward‐looking statements, including
the risks described in the REIT's latest annual information
return. The payment of cash distributions will be dependent
upon a number of factors, including but not limited to the
financial performance, financial condition and financial
requirements of the REIT. Although management of the REIT
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. Except as required by law, the REIT disclaims any
intention and assumes no obligation to update or revise any
forward‐looking statements to reflect actual results, whether as a
result of new information, future events, changes in assumptions,
changes in factors affecting such forward‐looking statements or
otherwise.
Neither the TSXV nor its Regulation Services Provider (as that
term is defined in the policies of the TSXV) accepts responsibility
for the adequacy or accuracy of this news release.
The Trust Units are not registered under the United States
Securities Act of 1933, as amended (the "U.S. Securities Act") and
may not be offered or sold within the
United States or to or for the account or benefit of U.S.
persons, except in certain transactions exempt from the
registration requirements of the U.S. Securities Act. This press
release does not constitute an offer to sell, or the solicitation
of an offer to buy, securities of the REIT in the United States or in any other
jurisdiction.
Notice with respect to Non-IFRS Measures Disclosure
The REIT's financial statements are prepared in accordance with
IFRS. In addition to IFRS measures, this news release and the
REIT's Q2 2022 MD&A disclose certain non-IFRS financial
measures that are commonly used by Canadian real estate investment
trusts as an indicator of performance. Non-IFRS measures and
ratios includes Net Operating Income ("NOI), Debt-Service Coverage
Ratio, FFO, AFFO, FFO per Unit, AFFO per Unit, and NAV per
Unit.
Management believes that these measures are helpful to investors
because they are widely recognized measures of the REIT's
performance and provide a relevant basis for comparison among real
estate entities. These non-IFRS financial measures are not
defined under IFRS and are not intended to represent financial
performance, financial position or cash flows for the period and
should not be viewed as an alternative to net income, cash flow
from operations or other measures of financial performance
calculated in accordance with IFRS.
The above measures are not standardized under the financial
reporting framework used to prepare the financial statements of the
REIT. Readers should be further cautioned that the above
measures as calculated by the REIT may not be comparable to similar
measures presented by other issuers. For further information,
refer to the sections entitled "Non-IFRS measures" and "Financial
Operations and Results" in the REIT's Q2 2022 MD&A, which is
incorporated by reference herein, for further information
(available on SEDAR at www.sedar.com or the REIT's website
www.marwestreit.com)
SOURCE Marwest Apartment Real Estate Investment Trust