CAPREIT remains solid through Q2
August 24, 2011
Canadian Apartment Properties Real Estate Investment Trust (CAPREIT) released the financial results for the second quarter of 2011, which were categorized as remaining ‘strong’.
The second quarter of 2011 saw operating revenues increase by 4.1 per cent on higher average monthly rents, increased occupancies and contributions from acquisitions. The average monthly rents also increased, by roughly 2.5 per cent from the same time period in 2010. Occupancy was shown to strengthen from 98 per cent to 98.4 per cent.
Thomas Schwartz, President and CEO of CAPREIT said, “Our proven and highly effective property management programs continue to generate record operating results, while our acquisitions are successfully and accretively deploying the capital raised at the end of 2010. Looking ahead, we continue to implement a number of programs to enhance operating efficiency and reduce costs, initiatives that we believe will only accelerate our NFFO growth in the quarter ahead.”
Some key indicators demonstrate CAPREIT is achieving its financial goals. The ratio of total debt to gross book value has improved from 56.93 per cent in 2010 to 54.32 per cent in 2011. CAPREIT has entered into a forward interest rate hedge on approximately $312 million of mortgages maturing between September 2011 and June 2010, which are anticipated to be refinanced on ten-year terms and to bear interest rates between three per cent and 3.62 per cent.
CAPREIT completed acquisitions of a total of 495 suites in Vancouver, British Columbia as well as an additional 849 suites in the Greater Toronto Area, totaling acquisition costs of $75 million and $113 million, respectively. On July 31, 2011, CAPREIT completed the acquisition of an 811-suite portfolio in Laval, Quebec. The final purchase price of the property was $70 million at a weighted average stated interest rate of 4.8 per cent.
In addition to these acquisitions, on July 21, 2011 CAPREIT announced plans to acquire a 229-suite property in Scarborough, Ontario at a purchase price of $16.8 million.
Mr. Schwartz says of the acquisitions, “So far this year we have acquired 16 properties, adding 2,467 suites to the portfolio for total acquisition costs of $284 million. While we have now exceeded our acquisition target for the year, we continue to leverage our strong liquidity position and evaluate addition acquisition opportunities that will further strengthen and diversify our portfolio.”
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