TORONTO, Nov. 07, 2024 (GLOBE NEWSWIRE) -- Canadian Apartment Properties Real Estate Investment Trust ("CAPREIT") (TSX: CAR.UN) announced today strong operating and financial results for the three and nine months ended September 30, 2024. Management will host a conference call to discuss the financial results on Friday, November 8, 2024 at 9:00 a.m. ET.
HIGHLIGHTS
| As at | September 30, 2024 | December 31, 2023 | September 30, 2023 | ||||||
| Total Portfolio Performance and Other Measures | |||||||||
| Number of suites and sites(1) | 63,359 | 64,260 | 64,461 | ||||||
| Investment properties fair value(2) (000s) | $ | 15,055,125 | $ | 16,532,096 | $ | 16,482,890 | |||
| Assets held for sale (000s) | $ | 1,877,123 | $ | 45,850 | $ | 55,530 | |||
| Occupied AMR(1)(3) | |||||||||
| Canadian Residential Portfolio(4) | $ | 1,617 | $ | 1,516 | $ | 1,490 | |||
| The Netherlands Portfolio | € | 1,141 | € | 1,063 | € | 1,053 | |||
| Occupancy(1) | |||||||||
| Canadian Residential Portfolio(4) | 98.0 | % | 98.8 | % | 98.9 | % | |||
| The Netherlands Portfolio | 95.1 | % | 98.5 | % | 98.7 | % | |||
| Total Portfolio(5) | 97.3 | % | 98.2 | % | 98.4 | % | |||
(2) Investment properties exclude assets held for sale, as applicable.
(3) Occupied average monthly rent ("Occupied AMR") is defined as actual residential rents divided by the total number of occupied suites or sites in the property, and does not include revenues from parking, laundry or other sources.
(4) Excludes MHC sites.
(5) Includes MHC sites.
| Three Months Ended | Nine Months Ended | |||||||||||
| September 30, | September 30, | |||||||||||
| 2024 | 2023 | 2024 | 2023 | |||||||||
| Financial Performance | ||||||||||||
| Operating revenues (000s) | $ | 282,439 | $ | 268,377 | $ | 836,381 | $ | 793,122 | ||||
| Net operating income ("NOI") (000s) | $ | 189,382 | $ | 178,432 | $ | 552,712 | $ | 516,075 | ||||
| NOI margin | 67.1 | % | 66.5 | % | 66.1 | % | 65.1 | % | ||||
| Same property NOI (000s) | $ | 156,430 | $ | 147,569 | $ | 456,894 | $ | 427,650 | ||||
| Same property NOI margin | 66.1 | % | 65.8 | % | 65.1 | % | 64.6 | % | ||||
| Net income (loss) (000s) | $ | 47,370 | $ | (357,542 | ) | $ | 341,555 | $ | (420,786 | ) | ||
| Funds From Operations ("FFO") per unit - diluted(1) | $ | 0.659 | $ | 0.638 | $ | 1.912 | $ | 1.795 | ||||
| Distributions per unit | $ | 0.371 | $ | 0.362 | $ | 1.096 | $ | 1.087 | ||||
| FFO payout ratio(1) | 56.2 | % | 56.8 | % | 57.3 | % | 60.5 | % | ||||
| As at | September 30, 2024 | December 31, 2023 | September 30, 2023 | ||||||
| Financing Metrics and Liquidity | |||||||||
| Total debt to gross book value(1) | 40.9 | % | 41.6 | % | 41.4 | % | |||
| Weighted average mortgage effective interest rate(2) | 2.97 | % | 2.80 | % | 2.73 | % | |||
| Weighted average mortgage term (years)(2) | 4.7 | 4.9 | 5.0 | ||||||
| Debt service coverage (times)(1)(3) | 1.9x | 1.8x | 1.8x | ||||||
| Interest coverage (times)(1)(3) | 3.3x | 3.3x | 3.5x | ||||||
| Cash and cash equivalents (000s)(4) | $ | 23,365 | $ | 29,528 | $ | 48,266 | |||
| Available borrowing capacity - Canadian Credit Facilities (000s)(5) | $ | 294,999 | $ | 340,059 | $ | 257,875 | |||
| Capital | |||||||||
| Unitholders' equity (000s) | $ | 9,449,650 | $ | 9,278,595 | $ | 9,304,029 | |||
| Net asset value ("NAV") (000s)(1) | $ | 9,461,781 | $ | 9,212,594 | $ | 9,228,233 | |||
| Total number of units - diluted (000s) | 169,638 | 169,868 | 169,777 | ||||||
| NAV per unit - diluted(1) | $ | 55.78 | $ | 54.23 | $ | 54.36 | |||
(2) Excludes liabilities related to assets held for sale, as applicable.
(3) Based on the trailing four quarters.
(4) Consists of $9,264 and $14,101 in Canada and Europe, respectively (December 31, 2023 - $17,616 and $11,912, respectively, September 30, 2023 - $31,015 and $17,251, respectively).
(5) Includes $228,674 available on the Canadian Acquisition and Operating Facility (December 31, 2023 - $340,059, September 30, 2023 - $257,875) and $66,325 available on the unsecured non-revolving construction and term credit facility to reduce greenhouse gas ("GHG") emissions ("GHG Reduction Facility") (December 31, 2023 and September 30, 2023 - N/A).
"We're currently in one of the most transformational periods in CAPREIT's history, and we're pleased with the ground we've been covering on the execution of our strategy," commented Mark Kenney, President and Chief Executive Officer. "So far this year, we've completed over $1 billion worth of strategic transactions across Canada and Europe, and we've announced nearly $2 billion in additional non-core dispositions that are expected to close by early 2025. This activity is unprecedented for CAPREIT, but it speaks to our commitment to repositioning our diversified portfolio and our focus on high quality Canadian apartment properties. We're excited to be optimizing and evolving into an even better place to live, work and invest, and we're looking forward to CAPREIT's next chapter."
"Our Canadian apartment portfolio operationally performed well again this third quarter, with same property average monthly rent increasing by 6.4% versus the comparative period end, and our same property NOI margin expanding by 30 basis points to 66.1% for the current quarter," added Stephen Co, Chief Financial Officer. "This healthy organic growth was partly offset by higher interest costs, and our diluted FFO per Unit increased by 3.3% to $0.659 for the three months ended September 30, 2024. Our leverage remained low at 40.9% as of period end, and we continue to have ample access to capital, which puts us in a prime spot to execute quickly on strategic transactions. With the upcoming closing of announced ancillary dispositions, this competitive financial position is expected to further strengthen, thus supporting ongoing progress on our modernization strategy."
SUMMARY OF Q3 2024 RESULTS OF OPERATIONS
Strategic Initiatives Update
- CAPREIT continues to invest in strategic opportunities that are accretive. For the three months ended September 30, 2024, CAPREIT acquired four properties with 435 suites in Canada for a total gross purchase price of $278.7 million (excluding transaction costs and other adjustments). For the nine months ended September 30, 2024, CAPREIT acquired seven properties with 972 suites in Canada for a total gross purchase price of $517.5 million (excluding transaction costs and other adjustments).
- For the three months ended September 30, 2024, CAPREIT disposed of 764 suites which were comprised of four non-core properties located in Canada; land adjacent to an existing residential building owned by CAPREIT; multiple residential properties in the Netherlands with 464 suites; three single residential suites located in the Netherlands; one office building in the Netherlands and one commercial building in Germany, for a total gross sale price of $382.4 million (excluding transaction costs and other adjustments). For the nine months ended September 30, 2024, CAPREIT disposed of 1,877 suites for a total gross sale price of $570.3 million (excluding transaction costs and other adjustments) of non-core property dispositions. Subsequent to quarter-end, CAPREIT disposed of an additional 110 suites in Canada for a total gross sale price of $33.5 million (excluding transaction costs and other adjustments).
- On July 15, 2024, CAPREIT announced that it has entered into an agreement to sell its MHC portfolio for a gross sale price of $740 million (excluding transaction costs and other adjustments). The gross sale price will be satisfied in part through an interest-only vendor takeback ("VTB") mortgage of $140 million, bearing interest at a rate of 3.0% per annum for a five-year term, with the remaining $600 million to be satisfied in cash. The transaction is subject to compliance with the Competition Act (Canada) and other closing conditions customary in transactions of this nature. Subject to the receipt of all regulatory approvals and satisfaction of customary closing conditions, closing is anticipated in the fourth quarter of 2024.
- On September 16, 2024, CAPREIT announced that certain subsidiaries of ERES have entered into two separate agreements to sell a total of 3,179 residential suites in the Netherlands for gross proceeds (net of estimated adjustments) totalling approximately $1.1 billion. The gross sale price is expected to be settled in cash, with net proceeds expected to be used in part to repay approximately $635 million in associated mortgages outstanding. Remaining net proceeds are intended to be used for the repayment of amounts on the ERES Credit Facility, the prepayment of certain mortgages maturing in the near term and the payment of a special cash distribution by ERES. Subject to the satisfaction of closing conditions, closings are anticipated by early Q1 2025.
- During the three months ended September 30, 2024, no Trust Units were purchased for cancellation under the Normal Course Issuer Bid ("NCIB") program. During the nine months ended September 30, 2024, CAPREIT purchased and cancelled approximately 0.6 million Trust Units, under the NCIB program, at a weighted average purchase price of $48.19 per Trust Unit, for a total cost of $27.1 million.
- CAPREIT's strategy to upgrade the quality and diversification of the property portfolio through repositioning and capital recycling initiatives to grow earnings and cash flow potential continues for 2024. In light of dispositions that closed to date and the announced dispositions expected to close later this year, CAPREIT is on track to meet or exceed the disposition target of over $400 million of non-core Canadian properties during 2024 and will continue to look for opportunities to recycle non-core Canadian properties during the remainder of the year.
- On August 7, 2024, the Board of Trustees approved an increase in monthly distributions from $0.1208 to $0.125 per Trust Unit, or from $1.45 to $1.50 per Trust Unit on an annualized basis. The increase was effective with the August 2024 distribution paid on September 16, 2024 to Unitholders of record as at August 30, 2024.
- On turnovers and renewals, monthly residential rents for the three and nine months ended September 30, 2024 increased by 7.4% and 5.7%, respectively, for the Canadian residential portfolio, compared to 7.4% and 5.3%, respectively, for the three and nine months ended September 30, 2023.
- Same property Occupied AMR for the Canadian residential portfolio as at September 30, 2024 increased by 6.4% compared to September 30, 2023, while same property occupancy for the Canadian residential portfolio decreased to 98.1% (September 30, 2023 - 98.9%).
- NOI for the same property portfolio increased by 6.0% and 6.8%, respectively, for the three and nine months ended September 30, 2024, compared to the same periods last year. Additionally, NOI margin for the same property portfolio increased to 66.1%, up 0.3%, for the three months ended September 30, 2024, and increased to 65.1%, up 0.5%, for the nine months ended September 30, 2024, compared to the same periods last year.
- Diluted FFO per unit was up 3.3% and 6.5%, respectively, for the three and nine months ended September 30, 2024, compared to the same period last year, primarily due to contributions from acquisitions and higher same property NOI, partially offset by dispositions, lower other income and higher interest expense on credit facilities payable and mortgages payable.
- CAPREIT's financial position remains strong, with approximately $304.3 million of available Canadian liquidity, comprising $9.3 million of Canadian cash and cash equivalents, $228.7 million of available capacity on its Canadian Acquisition and Operating Facility and $66.3 million on its GHG Reduction Facility.
- To date, CAPREIT completed or committed mortgage financings totalling $539.9 million, with a weighted average term to maturity of 7.4 years and a weighted average interest rate of 4.33%.
- For the nine months ended September 30, 2024, $2.1 billion of investment properties from ERES and the MHC portfolio have been transferred to assets held for sale. The impact of the transfer on the carrying value of investment property was partially offset by net acquisitions of $255.4 million; property capital investments of $164.4 million; fair value gains of $156.7 million; and foreign exchange translation and other for $71.7 million. The overall carrying value of investment properties (excluding assets held for sale) as at September 30, 2024 was $15.1 billion compared to $16.5 billion as at December 31, 2023.
- Diluted NAV per unit as at September 30, 2024 increased to $55.78 from $55.05 as at June 30, 2024, and from $54.23 as at December 31, 2023, primarily reflecting an increase in investment property values in CAPREIT's Canadian and European portfolio.
Portfolio Occupied Average Monthly Rents
| Total Portfolio | Same Property Portfolio(1) | |||||||||||
| As at September 30, | 2024 | 2023 | 2024 | 2023 | ||||||||
| Occupied AMR | Occ. % | Occupied AMR | Occ. % | Occupied AMR | Occ. % | Occupied AMR | Occ. % | |||||
| Total Canadian residential suites | $ | 1,617 | 98.0 | $ | 1,490 | 98.9 | $ | 1,593 | 98.1 | $ | 1,497 | 98.9 |
| Total MHC sites | $ | 455 | 95.7 | $ | 437 | 96.0 | $ | - | - | $ | - | - |
| The Netherlands portfolio | € | ()[\]\\.,;:\s@\"]+)*)|(\".+\"))@((\[[0-9]{1,3}\.[0-9]{1,3}\.[0-9]{1,3}\.[0-9]{1,3}\])|(([a-zA-Z\-0-9]+\.)+[a-zA-Z]{2,}))$/;return b.test(a)}$(document).ready(function(){if(performance.navigation.type==2){location.reload(true)}$("iframe[data-lazy-src]").each(function(b){$(this).attr("src",$(this).attr("data-lazy-src"))});if($(".owl-article-body-images").length){$(".owl-article-body-images").owlCarousel({items:1,loop:true,center:false,dots:false,autoPlay:true,mouseDrag:false,touchDrag:false,pullDrag:false,nav:true})}var a=$("#display_full_text").val();if(a==0){$.ajax({url:"/ajax/set-article-cookie",type:"POST",data:{cmsArticleId:$("#cms_article_id").val()},dataType:"json",success:function(b){},error:function(b,d,c){}})}$(".read-full-article").on("click",function(d){d.preventDefault();var b=$(this).attr("data-cmsArticleId");var c=$(this).attr("data-productId");var f=$(this).attr("data-href");dataLayer.push({event:"paywall_click",paywall_name:"the_manila_times_premium",paywall_id:"paywall_article_"+b});$.ajax({url:"/ajax/set-article-cookie",type:"POST",data:{cmsArticleId:b,productId:c},dataType:"json",success:function(e){window.location.href=$("#BASE_URL").val()+f},error:function(e,h,g){}})});$(".article-embedded-newsletter-form .close-btn").on("click",function(){$(".article-embedded-newsletter-form").fadeOut(1000)})});$(document).on("click",".article-embedded-newsletter-form .newsletter-button",function(){var b=$(".article-embedded-newsletter-form .newsletter_email").val();var d=$("#ga_user_id").val();var c=$("#ga_user_yob").val();var a=$("#ga_user_gender").val();var e=$("#ga_user_country").val();if(validateEmail(b)){$.ajax({url:"/ajax/sendynewsletter",type:"POST",data:{email:b},success:function(f){$(".article-embedded-newsletter-form .nf-message").html(f);$(".article-embedded-newsletter-form .nf-message").addClass("show");setTimeout(function(){$(".article-embedded-newsletter-form .nf-message").removeClass("show");$(".article-embedded-newsletter-form .nf-message").html("")},6000);dataLayer.push({event:"newsletter_sub",user_id:d,product_name:"newsletter",gender:a,yob:c,country:e})},error:function(f,h,g){}})}else{$(".article-embedded-newsletter-form .nf-message").html("Please enter a valid email address.");$(".article-embedded-newsletter-form .nf-message").addClass("show");setTimeout(function(){$(".article-embedded-newsletter-form .nf-message").removeClass("show");$(".article-embedded-newsletter-form .nf-message").html("")},6000)}});$(document).on("click",".article-embedded-newsletter-form .nf-message",function(){$(this).removeClass("show");$(this).html("")});
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