CAPREIT Capital Allocation Update – $172MM in Strategic Transactions
TORONTO, Sept. 05, 2023 (GLOBE NEWSWIRE) — Canadian Apartment Properties Real Estate Investment Trust (“CAPREIT”) (TSX:CAR.UN) announced today that, since its last transaction press release on June 8, 2023, it has closed on six non-core dispositions in Canada, and has entered into an agreement to dispose of an additional non-core property, for combined consideration of $121.4 million. CAPREIT also acquired a strategically aligned, newly constructed rental property for $51.0 million. All amounts disclosed herein exclude transaction costs.
In June, CAPREIT completed the disposition of a manufactured home community containing 217 sites in Windsor, Ontario, for $8.3 million, with proceeds allocated toward the repayment of principal outstanding on the mortgage of $7.7 million. The property was the primary driver of interim maintenance costs being incurred on the operation and remediation of septic systems.
In August, CAPREIT further disposed of one 73-suite residential property, built in 1974, for $12.6 million, and another 180-suite residential property, built in 1977, for $32.5 million, both located in Montréal, Québec. Proceeds from the sales were in part used to repay mortgage principal outstanding on the properties of an aggregate $13.6 million.
CAPREIT additionally closed on three separate dispositions in August in Charlottetown, Prince Edward Island. The dispositions represent 132 residential suites sold for gross consideration of $14.2 million, and all properties were unencumbered.
CAPREIT also announced that it has entered into an agreement to dispose of an unencumbered 263-suite property, built in 1978 and located in Calgary, Alberta, for $53.9 million. The buyer has waived conditions, and closing is anticipated in the fourth quarter of 2023.
Furthermore, CAPREIT announced that in June, it completed the on-strategy acquisition of a high-quality, amenity-rich building located in Langley, British Columbia, for $51.0 million. The 92-suite rental property was constructed in 2022 and is located directly adjacent to two of CAPREIT’s other recently built properties in the growing neighbourhood, providing for operational efficiencies. The purchase was funded using cash from net disposition proceeds; however, an estimated $38 million in mortgage financing, using the CMHC MLI Select energy-efficiency program, is expected to close in the near-term.
“We continue to act on our strategic repositioning program, and we’re excited to see these latest transactions further modernize our portfolio and strengthen its operational metrics,” commented Mark Kenney, President and Chief Executive Officer. “In this new era of operating in the Canadian real estate market, we’re strategically refreshing our capital, our assets, and our geographical allocation to move toward a new CAPREIT 2.0. Ultimately, we’re trading quantity for quality in order to generate enhanced, sustainable returns for our Unitholders.”
“In aggregate, we’ve executed on $406 million of dispositions in Canada year-to-date, sold at a premium to IFRS NAV, while concurrently increasing overall portfolio quality,” added Julian Schonfeldt, Chief Investment Officer. “We’ve reinvested a cumulative $213 million into new build rental properties located in targeted Canadian markets, which have strong fundamentals that support the improved risk-return profile of our portfolio in the long-term. We’ve also reinvested $101 million in our NCIB program year-to-date, at unit prices that represent a significant discount to IFRS NAV.”
CAPREIT is Canada’s largest publicly traded provider of quality rental housing. As at June 30, 2023, CAPREIT owns approximately 65,000 residential apartment suites, townhomes and manufactured home community sites well-located across Canada and the Netherlands, with approximately $17 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 STATEMENTS
All statements in this press release that do not relate to historical facts constitute forward-looking statements. These statements represent CAPREIT’s intentions, plans, expectations and beliefs and 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.
For more information, please contact:
Mr. Mark Kenney
President & Chief Executive Officer
Mr. Stephen Co
Chief Financial Officer
Mr. Julian Schonfeldt
Chief Investment Officer