Canada's largest publicly traded apartment landlord said it has made $172 million in deals aimed at updating the portfolio of Canadian Apartment Properties Real Estate Investment Trust.
The Toronto-based REIT, which manages and owns about 46,000 rental suites across Canada, has sold $406 million in properties year-to-date in Canada.
"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," said Mark Kenney, president and chief executive officer of CAPREIT, in a statement.
"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," Kenney said. "Ultimately, we're trading quantity for quality in order to generate enhanced, sustainable returns for our unitholders.”
The REIT said it has closed on six non-core dispositions in Canada and agreed to sell an additional non-core property for a combined $121.4 million. CAPREIT also said it paid $51 million for a newly constructed rental property.
Younger Portfolio
The deals come as Canadian Apartment Properties has emphasized adding younger properties to its portfolio with about 10% of its Canadian holdings now in new buildings compared with just 1% in 2017 and 6% in 2021.
"We're continuously improving the quality of our portfolio by selling our older, non-core properties and buying new purpose-built rental properties in Canada's fastest growing and highest density cities," Kenney told analysts on a call last month.
The latest sales saw CAPREIT dispose of a manufactured home project in Windsor comprising 217 sites for $8.3 million. In Montreal, the REIT sold a 73-suite unit property built in 1974 for $12.6 million and a 180-suite building constructed in 1977 for $32.5 million.
It closed three deals in August in Charlottetown, Prince Edward Island, comprising 132 residential suites for $14.2 million.
CAPREIT also said it has agreed to sell an unencumbered 263-suite property, built in 1978 in Calgary, for $53.9 million. The buyer has waived conditions, and the deal is expected to close in the fourth quarter.
On the purchase side, the REIT said it had completed a deal to buy a 92-suite building at 5335 200A St. in the Vancouver suburb of Langley in a $51 million deal.
“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," said Julian Schonfeldt, chief investment officer of the REIT, in a statement.
CAPREIT continues to buy its units back through a normal course issuer bid and has spent $101 million on the program. The landlord said it is buying its units at a "significant" discount to its International Financial Reporting Standards' net asset value.