Minto Apartment Real Estate Investment Trust posted record highs in same property revenue, same property net operating income (NOI), normalized funds from operations (FFO) and adjusted funds from operations (AFFO) per unit in its fiscal year ended Dec. 31.

Same property revenue rose by 5.1 per cent to $156.32 million and same property NOI increased by 7.9 per cent to $100.17 million, while normalized FFO and AFFO per unit jumped by 12.9 per cent and 15 per cent respectively. The same property portfolio was comprised of 28 properties wholly and jointly owned by the REIT for equivalent periods in 2024 and 2023.

“We achieved strong operating performance from our high-quality portfolio while executing on strategic capital allocation decisions,” president and CEO Jonathan Li said to open a March 6 conference call to present the REIT’s results.

“We boosted our cash flow per unit, strengthened our balance sheet and returned capital to unitholders.”

Net income and liquidity improvements

Net income was $63.24 million after a net loss of $116.66 million in 2023.

The $86-million sale of non-core Ottawa assets in January 2024 resulted in net proceeds of $68 million that were used to partially pay down the REIT’s revolving credit facility.

Minto Apartment REIT had total outstanding debt of $1.1 billion, with a weighted average effective interest rate on term debt of 3.61 per cent and a weighted average term to maturity of 5.04 years.

Liquidity was up by 92 per cent year-over-year to $187.7 million.

“We are proud of achieving all these milestones despite challenging market conditions that have elevated the cost of capital for the entire Canadian REIT sector,” said Li, who anticipates revenue growth in the low to mid-single digits this year. 

Rent, occupancy and repositioning

Average monthly rent rose by six per cent to $1,990 while the occupancy rate fell by 30 basis points to 96.8 per cent.

Minto Apartment REIT generated organic growth through 297 new leases signed in Q4, achieving an average gain-on-lease of 11.2 per cent.

“We are using tactical promotion, marketing campaigns and a targeted renewal program across the portfolio to drive occupancy,” chief financial officer Eddie Fu explained.

Senior vice-president of property operations Paul Baron said he expects lease renewals to remain around the same level this year as in 2024. Baron was taking part in his final results call before moving on to become CFO of The Minto Group.

Baron’s position is being taken over by Michelle Calloway, the former VP of operations for Fitzrovia Real Estate.

The REIT repositioned 48 suites in 2024, generating an average annual unlevered return on investment of 9.2 per cent. Management expects to reposition between 35 and 70 suites this year.

“Our portfolio quality has improved significantly from where it was at the end of 2022,” Li noted. “The average property age has declined by two years. 

“Cap ex is down significantly since we swapped older assets for new and we have entered the attractive Metro Vancouver market while also balancing our geographic concentration and divesting our non-core Edmonton properties where we lacked scale.”

Management is in negotiations to re-lease vacant commercial space at Minto Yorkville in Toronto and anticipates payments beginning in 2026. It also leased a portion of the vacant retail space at The Carlisle in Ottawa, with payments expected to begin in mid-2025.

2025 activity

Minto Apartment REIT acquired a 50 per cent managing ownership interest in Lonsdale Square in North Vancouver on Jan. 15 for a discounted purchase price of $53 million. It was satisfied by the assumption of a $52.9-million Canada Mortgage and Housing Corporation-insured mortgage. 

Concurrently, the REIT received repayment of the $14-million convertible development loan associated with the property, which was used to repay a portion of the revolving credit facility.

“We entered the Metro Vancouver market at a discount to market value,” Li said.

“The purchase price was validated by an arm's length institutional partner. The transaction was accretive to cash flow per unit and, finally, we did not issue any equity to fund the transaction.”

The REIT sold the 242-unit Castleview in Ottawa on Jan. 22 for $69 million. That generated net proceeds of $33.8 million, a portion of which was used to repay the revolving credit facility and purchase units under the its normal-course issuer bid (NCIB) program.

The trust isn’t actively looking to sell any assets but Li said it would consider it if the right opportunity arose.

This year Minto Apartment REIT has purchased approximately $10.3 million of units under its NCIB at a weighted average purchase price of $13.19 per unit.

It has also amended the terms of its credit facility to reduce the commitment from $300 million to $200 million.

Purchase options and developments

The purchase option for The Hyland in Vancouver expired on Feb. 28 without the REIT acting on it. The trust also opted to waive on its right of first opportunity presented by the Minto Group for a development project in Ottawa on March 5.

Li said Minto Apartment REIT will consider potential acquisitions but will be “disciplined and exercise prudence.”

The 225-unit Richgrove Village development in Toronto is expected to stabilize and start contributing to revenue and NOI next year. The project is advanced enough that Li isn’t concerned with increased costs from tariffs impacting it.

Minto Apartment REIT also owns a 50 per cent share of the 192-unit York Mills and Leslie development in Toronto that’s anticipated to stabilize in Q1 2027. 

Li said Phase 2 at Richgrove could be affected by the tariff battle since lumber, steel, cladding and elevator systems still have to be purchased.