Canadian Apartment Properties Real Estate Investment Trust (CAR-UN-T) has purchased four properties, three in Southwestern Ontario and a fourth in P.E.I., adding 595 apartments to its portfolio.
CAPREIT paid $68.8 million for the apartment complexes in London and Sarnia, as well as $7.2 million for a new apartment building in Charlottetown.
“We are pleased to be expanding our presence in Western Ontario, a highly stable market with continuing strong demand for quality rental accommodation,” said Mark Kenney, CAPREIT’s president and CEO, in a prepared statement. “We are also confident we can add significant value to these assets through our proven property management and capital investment programs.”
CAPREIT’s London, Sarnia acquisitions
The London and Sarnia properties comprise 553 suites, with occupancy at 98.7 per cent.
The two complexes in London consist of a mix of townhomes, and low-rise, high-rise and walk-up apartment buildings containing bachelor, one-, two- and three-bedroom suites.
Both properties are located close to schools, shopping, banks and transit. Amenities include on-site laundry, parking and a seasonal swimming pool at each property.
The Sarnia property is a multi-building complex of three- and six-storey apartments close to downtown and the international Bluewater Bridge to Detroit. Nearby services include shopping, schools, parks and other conveniences.
The buildings feature storage space for each suite, laundry facilities and outdoor parking.
The new properties will be managed by CAPREIT’s existing regional office, driving further economies of scale and cost efficiencies, the company says.
CAPREIT is funding the acquisition via its acquisition and operating credit facility, which it intends to partially repay through CMHC-insured mortgages.
Luxury apartments in Charlottetown
The Charlottetown purchase is a four-storey building containing 42 luxury suites, which is currently 100 per cent occupied.
The property is situated near the North River and close to downtown and the Trans-Canada highway. Each suite is designed with high ceilings, laminated floors and quartz counter tops and are equipped with washer/dryers and stainless-steel appliances.
“The Charlottetown purchase is another example of how we are modernizing our overall portfolio with the acquisition of new and recently built properties that meet the demands of today’s resident while reducing our future overall capital expenditures,” Kenney said in the statement.
CAPREIT also funded this property via its acquisition and operating credit facility.
Busy 2019 for CAPREIT
It has been a busy 2019 so far for CAPREIT. Through the first six months of 2019, the trust has expanded its portfolio with the acquisitions of 6,055 apartments for $572.2 million.
As part of its agreement to acquire a majority interest in the former European Commercial REIT (known as ERES), CAPREIT has sold 511 of those units located in the Netherlands to ERES.
It expects to sell a further tranche of Netherlands apartments to ERES once the firm is in a financial position to acquire them.
Through the first six months of the year, CAPREIT also made $88 million in capital investments in its properties, an increase of almost 25 per cent year-over-year from 2018.
In its Q2 2019 report, CAPREIT said it has experienced turnover rental increases averaging 14 per cent.
By year-end, the trust says it will have invested up to $221 million in such improvements (excluding development and intensification).
CAPREIT shares opened Tuesday trading at $53.55, near their 52-week high of $53.73.
As one of Canada’s largest residential landlords, CAPREIT is a growth-oriented investment trust managing 62,645 suites and sites across Canada, the Netherlands and Ireland.
It owns 59,023 residential units, comprising 47,346 residential suites, and 72 manufactured homes communities comprising 11,677 land-lease sites located in and near major urban centres across Canada and the Netherlands.