TORONTO, May 08, 2024 (GLOBE NEWSWIRE) -- Canadian Apartment Properties Real Estate Investment Trust ("CAPREIT") (TSX:CAR) announced today strong operating and financial results for the three months ended March 31, 2024. Management will host a conference call to discuss the financial results on Thursday, May 9, 2024 at 9:00 a.m. ET. HIGHLIGHTS As at March 31, 2024   December 31, 2023   March 31, 2023   Total Portfolio Performance and Other Measures       Number of suites and sites(1)   64,151     64,260     65,527   Investment properties fair value(2) (000s) $ 16,695,616   $ 16,532,096   $ 17,121,228   Occupied AMR(1)(3)       Canadian Residential Portfolio(4) $ 1,552   $ 1,516   $ 1,428   The Netherlands Portfolio € 1,068   €         1,063   €         1,002   Occupancy(1)       Canadian Residential Portfolio(4)   98.4 %   98.8 %   98.6 % The Netherlands Portfolio   98.5 %   98.5 %   98.7 % Total Portfolio(5)   98.0 %   98.2 %   98.1 % (1) Excludes commercial suites. (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.     For the Three Months Ended March 31,   2024     2023   Financial Performance     Operating revenues (000s) $ 275,816   $ 260,947   Net operating income ("NOI") (000s) $ 177,049   $ 163,858   NOI margin   64.2 %   62.8 % Same property NOI (000s) $ 172,719   $ 160,504   Same property NOI margin   64.1 %   63.4 % Net income (loss) (000s) $ 182,113   $ (103,227 ) Funds From Operations ("FFO") per unit – diluted(1) $ 0.609   $ 0.567   Distributions per unit $ 0.362   $ 0.362   FFO payout ratio(1)   59.5 %   63.6 % (1) These measures are not defined by International Financial Reporting Standards ("IFRS"), do not have standard meanings and may not be comparable with other industries or companies. Please refer to the cautionary statements under the heading "Non-IFRS Measures" and the reconciliations provided in this press release.              As at March 31, 2024   December 31, 2023   March 31, 2023   Financing Metrics and Liquidity       Total debt to gross book value(1)   41.8 %   41.6 %   40.1 % Weighted average mortgage effective interest rate(2)   2.84 %   2.80 %   2.61 % Weighted average mortgage term (years)(2)   4.7     4.9     5.2   Debt service coverage (times)(1)(3)   1.8 x   1.8 x   1.9 x Interest coverage (times)(1)(3)   3.3 x   3.3 x   3.6 x Cash and cash equivalents (000s)(4) $ 58,495   $ 29,528   $ 24,594   Available liquidity – Canadian Credit Facilities (000s)(5) $ 324,657   $ 340,059   $ 240,995   Capital       Unitholders' equity (000s) $ 9,374,475   $ 9,278,595   $ 9,774,480   Net asset value ("NAV") (000s)(1) $ 9,287,633   $ 9,212,594   $ 9,760,956   Total number of units – diluted (000s)   169,501     169,868     169,831   NAV per unit – diluted(1) $ 54.79   $ 54.23   $ 57.47   (1) These measures are not defined by IFRS, do not have standard meanings and may not be comparable with other industries or companies. Please refer to the cautionary statements under the heading "Non-IFRS Measures" and the reconciliations provided in this press release. (2) Excludes liabilities related to assets held for sale, as applicable. (3) Based on the trailing four quarters. (4) Consists of $44,564 and $13,931 in Canada and ERES, respectively (December 31, 2023 – $19,446 and $10,082, respectively, March 31, 2023 – $14,069 and $10,525, respectively). (5) Includes $254,657 available on the Canadian Acquisition and Operating Facility (December 31, 2023 –$340,059, March 31, 2023 – $240,995) and $70,000 available on the unsecured non-revolving construction and term credit facility to reduce greenhouse gas ("GHG") emissions ("GHG Reduction Facility") (December 31, 2023 and March 31, 2023 – N/A).     "We continued momentum on the execution of our strategy in 2024, and we're pleased to see that translate into another quarter of strong results," commented Mark Kenney, President and Chief Executive Officer. "I am especially excited about our recent disposition of two properties in Langley, which we sold to a non-profit organization that was funded by the BC Rental Protection Fund. This instrumental transaction will enable those suites to remain affordable in perpetuity, while we were able to free up capital to reinvest in new supply. We're eager to continue participating in productive public-private partnerships such as this, and we hope to see more of our non-core legacy buildings transfer to the hands of non-profit organizations in the future." "We redeployed capital from our strategic sales into the acquisition of two new build, concrete rental apartment properties in London, which we purchased at a steep discount to replacement cost, and at a cap rate that exceeds the weighted average cap rate on our first quarter dispositions," said Julian Schonfeldt, Chief Investment Officer. "In addition, so far this year, we've reduced our ownership in Irish Residential Properties REIT plc from 18.7% to 9.7% through the sale of $70.6 million worth of equity. We used part of the proceeds to accretively repurchase $27 million worth of CAPREIT's units at a discount to NAV, with the remainder of our capital inflow reallocated into paying down higher interest debt. We're excited about the progress we've made with this capital recycling so far in 2024, and we remain increasingly focused on our objective of increasing the quality of our core apartment portfolio in Canada, while simultaneously increasing our earnings per unit." "Robust rent growth and ongoing high occupancy trends continued throughout the quarter, and we achieved a solid same property NOI margin of 64.1% for the three months ended March 31, 2024," added Stephen Co, Chief Financial Officer. "This is up by 70 basis points versus the comparative period, largely due to lower utility costs resulting from milder winter weather experienced across the country. Organic growth contributed to the 7.4% increase in diluted FFO per unit, which we realized on top of elevated interest costs we're incurring on our mortgage portfolio and credit facilities. Our balance sheet in Canada is strong with approximately $369 million in available liquidity, and this will continue to fuel our ability to execute on our capital allocation strategy moving forward." SUMMARY OF Q1 2024 RESULTS OF OPERATIONS Strategic Initiatives Update CAPREIT continues to invest in strategic opportunities that are accretive. For the three months ended March 31, 2024, CAPREIT acquired a property comprised of 291 suites located in London, Ontario for a total purchase price of $130 million (excluding transaction costs and other adjustments). For the three months ended March 31, 2024, CAPREIT disposed of 380 suites which were comprised of four non-core properties located in British Columbia and Québec and 24 single residential suites located in the Netherlands for $94.7 million (excluding transaction costs and other adjustments). In March 2024, CAPREIT received the TSX's acceptance of its notice to proceed with an NCIB, following expiry of the previous NCIB on March 23, 2024. During the three months ended March 31, 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. On February 22, 2024, CAPREIT filed a prospectus supplement to establish an at-the-market program ("ATM Program") that allows CAPREIT, at its sole discretion, to issue Trust Units up to an aggregate sale price of $400 million from treasury to the public from time to time, directly on the TSX or on other marketplaces on which the Trust Units are listed or quoted in Canada or where the Trust Units are traded in Canada, at prevailing market prices. During the three months ended March 31, 2024, no Trust Units were issued under the ATM Program. During the three months ended March 31, 2024, CAPREIT transacted on the sale of Irish Residential Properties REIT plc ("IRES") shares totalling $57.9 million, of which $43.7 million settled during the three months ended March 31, 2024 with the balance settling after March 31, 2024. Subsequent to March 31, 2024, CAPREIT settled on the disposition of additional IRES shares totalling $12.7 million, bringing CAPREIT's ownership interest from 18.7% as at December 31, 2023 to 9.7% as at May 8, 2024. 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. CAPREIT is currently targeting the disposition of over $400 million of non-core Canadian properties during 2024. Operating Results On turnovers and renewals, monthly residential rents for the three months ended March 31, 2024 increased by 4.1% for the Canadian residential portfolio, compared to 3.7% for the three months ended March 31, 2023. Same property Occupied AMR for the Canadian residential portfolio as at March 31, 2024 increased by 6.5% compared to March 31, 2023, while same property occupancy for the Canadian residential portfolio remained relatively stable at 98.5% (March 31, 2023 - 98.6%). NOI for the same property portfolio increased by 7.6% for the three months ended March 31, 2024 compared to the same period last year. Additionally, NOI margin for the same property portfolio increased to 64.1%, up 0.7% compared to the same period last year. Diluted FFO per unit was up 7.4%, including an approximately 0.9% decrease in the weighted average number of units outstanding, for the three months ended March 31, 2024 compared to the same period last year, primarily due to contributions from acquisitions, higher same property NOI and accretive NCIB purchases, partially offset by lower other income and higher interest expense on credit facilities payable and mortgages payable. Balance Sheet Highlights CAPREIT's financial position remains strong, with approximately $369.3 million of available Canadian liquidity, comprising $44.6 million of Canadian cash and cash equivalents, $254.7 million of available capacity on its Canadian Acquisition and Operating Facility and $70.0 million on its GHG Reduction Facility. To date, CAPREIT completed or committed mortgage financings totalling $143.2 million, with a weighted average term to maturity of 8.7 years and a weighted average interest rate of 4.64%. For the three months ended March 31, 2024 the overall carrying value of investment properties (excluding assets held for sale) increased by $163.5 million primarily due to net acquisitions of $83.2 million, fair value gains of $71.7 million, property capital investments of $42.4 million, which were partially offset by transfers to assets held for sale of $33.0 million. Diluted NAV per unit as at March 31, 2024 increased to $54.79 from $54.23 as at December 31, 2023, reflecting an increase in investment property values in CAPREIT's Canadian portfolio, supplemented by the effects of accretive purchases of Trust Units for cancellation through the NCIB program. OPERATIONAL AND FINANCIAL RESULTS Portfolio Occupied Average Monthly Rents   Total Portfolio Same Property Portfolio(1) As at March 31, 2024 2023 2024 2023   Occupied AMR Occ. % Occupied AMR Occ. % Occupied AMR Occ. % Occupied AMR Occ. % Total Canadian residential suites $ 1,552 98.4 $ 1,428 98.6 $ 1,539 98.5 $ 1,445 98.6 Total MHC sites $ 447 95.9 $ 433 95.8 $ 447 95.9 $ 433 95.7 The Netherlands portfolio € 1,068 98.5 € 1,002 98.7 € 1,068 98.5 € 1,001 98.7 (1) Same property Occupied AMR and occupancy include all properties held as at March 31, 2023, but exclude properties disposed of or held for sale as at March 31, 2024.     The rate of growth in total portfolio Occupied AMR has been primarily driven by (i) new acquisitions completed over the past 12 months and (ii) same property operational growth. The rate of growth in same property Occupied AMR has been primarily due to (i) rental increases on turnover in the rental markets of most provinces across the Canadian portfolio and (ii) rental increases on renewals. The weighted average gross rent per square foot for total Canadian residential suites was approximately $1.85 as at March 31, 2024, increased from $1.75 as at March 31, 2023. Canadian Portfolio For the Three Months Ended March 31, 2024 2023   Change in Monthly Rent Turnovers and Renewals(1) Change in Monthly Rent Turnovers and Renewals(1)   % % % % Suite turnovers 23.2 2.4 26.7 2.6 Lease renewals 3.0 45.0 2.4 45.4 Weighted average of turnovers and renewals 4.1   3.7   (1) Percentage of suites turned over or renewed during the period is based on the total weighted average number of residential suites (excluding co-ownerships and MHC sites) held during the period.     The Netherlands Portfolio For the Three Months Ended March 31, 2024 2023   Change in Monthly Rent Turnovers and Renewals(1) Change in Monthly Rent Turnovers and Renewals(1)   % % % % Suite turnovers 15.6 3.1 19.9 3.9 Lease renewals — — — — Weighted average of turnovers and renewals 15.6   19.9   (1) Percentage of suites turned over or renewed during the period is based on the total weighted average number of Dutch residential suites held during the period.     As the Netherlands lease renewals occur once a year in July, there were no changes in lease renewals for the three months ended March 31, 2024 and March 31, 2023. For rent renewal increases due to indexation beginning on July 1, 2024, ERES served tenant notices to 6,572 suites, representing 96% of the residential portfolio, across which the average ...