— Normalized FFO and AFFO per unit continues
to accelerate achieving growth of 4.4% and 5.3%, respectively.
Distribution increase of 3.1% —
OTTAWA,
ON, Nov. 7, 2023 /CNW/ - Minto Apartment Real
Estate Investment Trust (the "REIT") (TSX: MI.UN) today announced
its financial results for the third quarter and nine months ended
September 30, 2023 ("Q3 2023" and
"YTD 2023", respectively). The Condensed Consolidated Interim
Financial Statements and Management's Discussion and Analysis
("MD&A") for Q3 2023 and YTD 2023 are available on the REIT's
website at www.mintoapartmentreit.com and at
www.sedarplus.ca.1
"Minto Apartment REIT delivered strong operational performance
in the third quarter. We generated an average gain of 17.0% on new
leases, which was the highest quarterly level in the REIT's
history, which contributed to solid growth in Same Property
Portfolio revenue and NOI." said Jonathan
Li, President and Chief Executive Officer of the REIT. "We
continue to focus on improving our balance sheet and making
disciplined capital allocation decisions which position us well to
deliver FFO and AFFO per unit growth, even in the current high
interest rate environment, as evidenced by the quarter."
"Lastly, we are pleased to announce an increase to our monthly
distributions, something we have done every year since the REIT was
created. The increase highlights the confidence we have in our
business outlook for 2024 while also balancing prudent capital
management by further reducing our AFFO payout ratio. We expect
that industry fundamentals will continue to support robust demand
for rental housing for the foreseeable future, which should benefit
our high quality, urban rental portfolio."
Q3 2023 Highlights
- Average monthly rent was $1,837,
an increase of 7.2% compared to the third quarter ended
September 30, 2022 ("Q3 2022").
Average monthly rent for the Same Property Portfolio2
was $1,819, an increase of 6.7%
compared to Q3 2022;
- Closing occupancy of unfurnished suites increased to 97.8% at
September 30, 2023, compared to 97.3%
at September 30, 2022;
- Average occupancy of unfurnished suites increased to 96.9%,
compared to 96.2% in Q3 2022;
- The REIT executed 510 new leases, achieving an average rental
rate that was 17.0% higher than the expiring rents, representing
the highest quarterly gain-on-lease in the REIT's history. As
rental markets have continued to strengthen, the gain-to-lease
potential on sitting rents increased sequentially to 17.7% from
16.1% at the end of the second quarter of 2023 ("Q2 2023");
- Annualized turnover for the Same Property Portfolio was 26.0%,
in-line with historical seasonal norms;
- Revenue for the Same Property Portfolio was $37.0 million, an increase of 5.8% compared to Q3
2022; total revenue was $39.8
million, an increase of 5.3% compared to Q3 2022;
- Revenue for the Same Property Portfolio, excluding furnished
suites, was $34.8 million, an
increase of 7.8% compared to Q3 2022; total revenue, excluding
furnished suites, was $37.6 million,
an increase of 7.1% compared to Q3 2022;
- NOI for the Same Property Portfolio was $24.0 million, an increase of 6.9% compared to Q3
2022; total NOI was $25.8 million, an
increase of 6.6% compared to Q3 2022;
- NOI margin for the Same Property Portfolio increased to 64.8%,
an increase of 60 bps from Q3 2022; total NOI margin was 64.8%, an
increase of 80 bps from Q3 2022;
- Normalized Funds from Operations ("Normalized FFO") were
$15.7 million or $0.2390 per unit, an increase of 4.4%, compared
to $15.1 million, or $0.2290 per unit, in Q3 2022;
- Normalized Adjusted Funds from Operations ("Normalized AFFO")
were $14.0 million or $0.2139 per unit, an increase of 5.3%, compared
to $13.4 million, or $0.2031 per unit, in Q3 2022;
- Distributions per unit were $0.1225, an increase of 3.2% compared to Q3 2022
and representing an AFFO payout ratio of 57.3%;
- The REIT repositioned 33 suites across its portfolio in Q3
2023, generating an average annual unlevered return of 8.8%;
- The REIT reduced its variable rate debt exposure by upward
refinancing Term Debt of $44.9
million, generating incremental proceeds of $24.1 million that were used to pay down the
credit facility. Variable rate debt represented 10% of Total Debt
at quarter end;
- On September 18, 2023, the REIT
announced that the Toronto Stock Exchange accepted its notice to
make a normal course issuer bid ("NCIB") for a portion of its
Units. The NCIB is active until September
19, 2024 and enables the REIT to acquire up to 3,282,682
Units. The REIT's previous NCIB expired on July 20, 2023. The REIT did not purchase and
cancel any Units during the quarter.
______________________________
|
1 This
news release contains certain non-IFRS and other financial
measures. Refer to "Non-IFRS and Other Financial Measures" in this
news release for a complete list of these measures and their
meaning.
2 Same Property Portfolio consists of 29
multi-residential properties both wholly and jointly owned by the
REIT for comparable periods in 2023 and 2022.
|
Financial Summary
($000's except per
unit and per suite amounts)
|
Three months ended
September 30,
|
|
Nine months
ended September 30,
|
2023
|
2022
|
Variance
|
|
2023
|
2022
|
Variance
|
Revenue from investment
properties
|
$ 39,835
|
$ 37,838
|
5.3 %
|
|
$
117,639
|
$
105,874
|
11.1 %
|
Property operating
costs
|
7,438
|
7,233
|
(2.8) %
|
|
22,932
|
20,973
|
(9.3) %
|
Property
taxes
|
4,090
|
3,870
|
(5.7) %
|
|
12,015
|
11,244
|
(6.9) %
|
Utilities
|
2,479
|
2,511
|
1.3 %
|
|
9,556
|
8,808
|
(8.5) %
|
NOI
|
$ 25,828
|
$ 24,224
|
6.6 %
|
|
$ 73,136
|
$ 64,849
|
12.8 %
|
NOI margin
(%)
|
64.8 %
|
64.0 %
|
80 bps
|
|
62.2 %
|
61.3 %
|
90 bps
|
Revenue - Same Property
Portfolio
|
$ 37,047
|
$ 35,008
|
5.8 %
|
|
$
109,497
|
$
100,928
|
8.5 %
|
NOI - Same Property
Portfolio
|
24,022
|
22,461
|
6.9 %
|
|
68,226
|
61,748
|
10.5 %
|
NOI margin (%) - Same
Property Portfolio
|
64.8 %
|
64.2 %
|
60 bps
|
|
62.3 %
|
61.2 %
|
110 bps
|
Interest
costs
|
$ 10,420
|
$
8,865
|
(17.5) %
|
|
$ 31,798
|
$ 22,586
|
(40.8) %
|
Net income (loss) and
comprehensive income (loss)
|
$ 27,815
|
$ 39,655
|
(29.9) %
|
|
$
(39,421)
|
$
257,832
|
|
FFO
|
15,692
|
15,654
|
0.2 %
|
|
$ 39,246
|
$ 41,313
|
(5.0) %
|
FFO per unit
|
0.2390
|
0.2380
|
0.4 %
|
|
$ 0.5978
|
$ 0.6394
|
(6.5) %
|
AFFO
|
14,041
|
13,952
|
0.6 %
|
|
$ 34,162
|
$ 36,283
|
(5.8) %
|
AFFO per
unit
|
0.2139
|
0.2121
|
0.8 %
|
|
$ 0.5204
|
$ 0.5616
|
(7.3) %
|
Distribution per
unit
|
0.1225
|
0.1187
|
3.2 %
|
|
$ 0.3675
|
$ 0.3561
|
3.2 %
|
AFFO payout
ratio
|
57.3 %
|
55.9 %
|
(140) bps
|
|
70.6 %
|
63.6 %
|
(700) bps
|
Normalized
FFO
|
15,692
|
15,060
|
4.2 %
|
|
41,353
|
40,719
|
1.6 %
|
Normalized FFO per
unit
|
0.2390
|
0.2290
|
4.4 %
|
|
0.6299
|
0.6302
|
0.0 %
|
Normalized
AFFO
|
14,041
|
13,358
|
5.1 %
|
|
36,269
|
35,689
|
1.6 %
|
Normalized AFFO per
unit
|
0.2139
|
0.2031
|
5.3 %
|
|
0.5525
|
0.5524
|
0.0 %
|
Normalized AFFO payout
ratio
|
57.3 %
|
58.4 %
|
110 bps
|
|
66.5 %
|
64.7 %
|
(180) bps
|
Average monthly
rent
|
$
1,837
|
$
1,714
|
7.2 %
|
|
$
1,837
|
$
1,714
|
7.2 %
|
Average monthly rent -
Same Property Portfolio
|
$
1,819
|
$
1,704
|
6.7 %
|
|
$
1,819
|
$
1,704
|
6.7 %
|
Closing
occupancy
|
97.8 %
|
97.3 %
|
50 bps
|
|
97.8 %
|
97.3 %
|
50 bps
|
Closing occupancy -
Same Property Portfolio
|
97.8 %
|
97.3 %
|
50 bps
|
|
97.8 %
|
97.3 %
|
50 bps
|
Average
occupancy
|
96.9 %
|
96.2 %
|
70 bps
|
|
97.0 %
|
95.1 %
|
190 bps
|
Average occupancy -
Same Property Portfolio
|
96.9 %
|
96.2 %
|
70 bps
|
|
97.1 %
|
95.1 %
|
200 bps
|
Normalized FFO and AFFO Reconciliation
The following is a reconciliation of the non-IFRS measures
Normalized FFO and AFFO:
($000's except unit
and per unit amounts)
|
Three months ended
September 30,
|
|
Nine months
ended September 30,
|
2023
|
2022
|
|
2023
|
2022
|
FFO
|
$
15,692
|
$
15,654
|
|
$
39,246
|
$
41,313
|
AFFO
|
14,041
|
13,952
|
|
34,162
|
36,283
|
Normalizing
items
|
—
|
(594)
|
|
2,107
|
(594)
|
Normalized
FFO
|
$
15,692
|
$
15,060
|
|
$
41,353
|
$
40,719
|
Normalized FFO per
unit
|
$
0.2390
|
$
0.2290
|
|
$
0.6299
|
$
0.6302
|
Normalized
AFFO
|
14,041
|
13,358
|
|
36,269
|
35,689
|
Normalized AFFO per
unit
|
$
0.2139
|
$
0.2031
|
|
$
0.5525
|
$
0.5524
|
Normalized AFFO
payout ratio
|
57.3 %
|
58.4 %
|
|
66.5 %
|
64.7 %
|
Q3 2023 Operating Results
Revenue in Q3 2023 totalled $39.8
million, an increase of 5.3% from $37.8 million in Q3 2022. The increased revenue
in Q3 2023 primarily reflected higher average monthly rents
and improved occupancy. Same Property Portfolio revenue was
$37.0 million, an increase of 5.8%
from Q3 2022, reflecting the higher average monthly rent, improved
occupancy, and reduced promotion amortization. Revenue, excluding
furnished suites, was $37.6 million,
an increase of 7.1% from $35.1
million in Q3 2022. Same Property Portfolio revenue,
excluding furnished suites, was $34.8
million, an increase of 7.8% from $32.3 million in Q3 2022.
Average monthly rent at the end of Q3 2023 was $1,837, an increase of 7.2% compared to the end
of Q3 2022. Average monthly rent for the Same Property Portfolio
was $1,819 at the end of Q3 2023,
representing a year-over-year increase of 6.7%.
Average occupancy increased to 96.9% in Q3 2023, compared to
96.2% in Q3 2022. Closing occupancy finished strong at 97.8% as at
September 30, 2023, compared to 97.3%
at September 30, 2022.
The year-over-year growth in average monthly rent and occupancy
reflected continued strong rental demand in the REIT's markets.
Operating expenses were 2.9% higher (3.8% higher for the Same
Property Portfolio) in Q3 2023 compared to Q3 2022, reflecting
growth in salaries, repair and maintenance costs, and property
taxes. Management continues to explore strategies to contain
controllable expenses through new property technology innovations
and other efficiencies.
NOI for Q3 2023 totalled $25.8
million, representing 64.8% of revenue, an increase of 6.6%
compared to $24.2 million, or 64.0%
of revenue, in Q3 2022. Same Property Portfolio NOI for Q3 2023 was
$24.0 million, representing 64.8% of
revenue, an increase of 6.9% compared to $22.5 million, or 64.2% of revenue, in Q3 2022.
The increases in NOI and Same Property Portfolio NOI in Q3 2023
reflected higher revenue from unfurnished suites, which outpaced
increased operating expenses.
Funds from Operations ("FFO") in Q3 2023 were $15.7 million, or $0.2390 per unit, compared to $15.7 million, or $0.2380 per unit, in Q3 2022. Adjusted Funds from
Operations ("AFFO") in Q3 2023 were $14.0
million, or $0.2139 per unit,
compared to $14.0 million, or
$0.2121 per unit, in Q3 2022. During
Q3 2022, FFO and AFFO were positively impacted by non-recurring
insurance recoveries totalling $0.6
million. Excluding this impact, Normalized FFO per unit
and Normalized AFFO per unit for Q3 2023 increased by 4.4% and
5.3%, respectively, compared to Q3 2022.
The REIT reported net income and comprehensive income of
$27.8 million in Q3 2023, compared to
$39.7 million in Q3 2022. The
variance was primarily attributable to a larger non-cash, fair
value loss on investment properties in Q3 2023 compared to Q3 2022,
and a smaller non-cash fair value gain on Class B LP Units in Q3
2023 compared to Q3 2022. The fair value loss on investment
properties of $21.2 million in Q3
2023 reflected higher capitalization rates within certain
geographies in the residential portfolio. The fair value gain on
Class B LP Units of $35.8 million in
Q3 2023 reflected the decrease in the REIT's Unit price during the
quarter.
The REIT paid cash distributions of $0.1225 per unit for Q3 2023, an annual increase
of 3.2% compared to Q3 2022 and representing an AFFO payout ratio
of 57.3%. Cash distributions of $0.1187 per unit were paid in Q3 2022,
representing an AFFO payout ratio of 55.9%, or 58.4% on a
normalized basis.
Gain-on-Lease, Gain-to-Lease Potential and
Repositioning
The REIT signed 510 new leases in Q3 2023, realizing an average
gain-on-lease of 17.0%. This was the highest quarterly
gain-on-lease in the REIT's history, and the fourth consecutive
quarter in which realized gain-on-lease exceeded 16%. It resulted
in an annualized incremental revenue gain in the quarter of
approximately $1.5 million. By
comparison, the REIT realized gains on new leases of 14.5% in Q3
2022 and 16.2% in Q2 2023. The REIT realized significant
double-digit gain-on-lease in all markets during Q3 2023, supported
by strong Canadian urban rental market conditions.
Same Property Portfolio annualized suite turnover of 26% was
more in-line with historical seasonal norms compared to the first
two quarters of 2023. This was led by annualized turnover of 41% in
Alberta, where availability of
affordable homes in the province and tenant departures arising from
the loss of promotions granted in the past allowed tenants to
consider other housing options. Annualized turnover in Ottawa and Montreal was 29% and 22%, respectively. This
was driven by new supply in downtown Ottawa while Montreal was driven by the movement of the
student population. Toronto
experienced reduced annualized turnover of 16% as tenants opted to
stay in place due to rising market rents. Despite higher turnover,
the REIT maintained consistent occupancy as move-ins kept pace with
move-outs, facilitating gain-on-lease, and resulting in Same
Property Portfolio closing occupancy of 97.8% at September 30, 2023. Despite the robust leasing
activity in Q3 2023, Management expects turnover to slow relative
to historical seasonal norms in the colder quarters of Q4 2023 and
Q1 2024.
Management estimates that the REIT held embedded gain-to-lease
potential in its unfurnished suite portfolio of 17.7% as at
September 30, 2023, representing
future annualized embedded potential revenue of approximately
$24.9 million. That compares to
embedded gain-to-lease potential of 12.1% and an estimated
annualized revenue growth opportunity of $16.0 million as at September 30, 2022, and 16.1% or $22.1 million as at June
30, 2023. Gain-to-lease potential grew by 160 bps over Q2
2023, driven by increased market rents in all geographies, largely
led by Toronto. Management expects
that the REIT will be able to realize a significant portion of the
gain-to-lease potential over a period of four to six years.
The REIT repositioned a total of 33 suites across its portfolio
in Q3 2023, generating an average annual unlevered return on
investment of 8.8%. The REIT has a total of 1,885 suites remaining
to be repositioned under its current program. Due to the continued
strength in the Canadian rental market, combined with decreasing
vacancy and turnover in certain markets, Management currently
expects to reposition a total of 110 to 120 suites in 2023, a
reduction from 259 in 2022.
Balance Sheet and Debt Refinancing Initiatives
During Q3 2023, the REIT continued to execute on its strategy to
reduce variable rate debt. In August
2023, the REIT upward financed $44.9 million of Term Debt secured by an
Ottawa property, generating
$24.1 million of incremental
proceeds that were used to further repay the credit facility. As a
result of efforts to reduce variable rate debt during YTD 2023, the
REIT's variable rate debt exposure as at September 30, 2023 was limited to the credit
facility and represented 10% of Total Debt, compared to 26% at the
end of Q1 2023.
Management is also continuing to explore upward refinancing for
three properties with mortgages maturing in early 2024 that have
the potential to generate $55 million
to $65 million of incremental
proceeds. Management will carefully evaluate the impact that
each potential financing has on FFO per unit by considering a
variety of factors.
As of September 30, 2023, the REIT
had Total Debt outstanding of $1.16
billion, with a weighted average effective interest rate on
Term Debt of 3.38% and a weighted average term to maturity on Term
Debt of 6.16 years.
The Debt-to-Gross Book Value ("GBV") ratio as at September 30, 2023 was 42.8%.
The REIT's net asset value ("NAV") per unit as at September 30, 2023 was $23.01, a decline from $23.21 as at June 30,
2023, primarily reflecting a fair value loss on investment
properties of $21.2 million in Q3
2023. The fair value loss reflected increases in capitalization
rates in certain geographies and increased capital expenditure
reserve, partially offset by increased forecast NOI.
The REIT continues to maintain a strong financial position.
Total liquidity was approximately $138.3
million as at September 30,
2023, with a liquidity ratio (Total liquidity/Total Debt) of
11.9%.
Capital Recycling Update
The REIT continues with the sale of its two remaining
Edmonton assets, which remains
subject to financing assumption approvals by the Canada Mortgage
and Housing Corporation and the lender. Capital recycling is an
attractive source of capital for the REIT, and Management continues
to opportunistically pursue additional select asset sales, however
there can be no assurance that a definitive agreement will be
executed.
Increase to Monthly Distributions
The REIT is pleased to announce that the Board of Trustees
approved a $0.015 or 3.1% increase to
the REIT's annual distribution from $0.4900 per unit to $0.5050 per unit. The monthly distribution will
be $0.04208 per unit, up from
$0.04083 per unit. The increase will
be effective for the REIT's November
2023 cash distribution, to be paid on December 15, 2023.
This represents the fifth consecutive year in which the REIT has
increased distributions. The increase underscores the positive
outlook for the REIT's business that is shared by Management and
the Board of Trustees. While steadily increasing distributions is a
key element of the REIT's strategy, the REIT expects to continue
maintaining a conservative AFFO payout ratio, allowing for the
reinvestment of capital to fund growth.
Conference Call
Management will host a conference call for analysts and
investors on Wednesday, November 8,
2023 at 10:00 am ET. To join
the conference call without operator assistance, participants can
register and enter their phone number at
https://emportal.ink/45faoZo to receive an instant automated call
back. Alternatively, they can dial 416-764-8688 or 1-888-390-0546
to reach a live operator who will join them into the call.
In addition, the call will be webcast live at:
Minto Apartment REIT Q3 2023 Earnings Webcast
A replay of the call will be available until Wednesday, November 15, 2023. To access the
replay, dial 416-764-8677 or 888-390-0541 (Passcode: 082182 #). A
transcript of the call will be archived on the REIT's website.
About Minto Apartment Real Estate Investment Trust
Minto Apartment Real Estate Investment Trust is an
unincorporated, open-ended real estate investment trust established
pursuant to a declaration of trust under the laws of the Province
of Ontario to own, develop, and
operate income-producing multi-residential properties located in
urban markets in Canada. The REIT
owns a portfolio of high-quality income-producing multi-residential
rental properties located in Toronto, Montreal, Ottawa and Calgary. For more information on Minto
Apartment REIT, please visit the REIT's website at:
www.mintoapartmentreit.com.
Forward-Looking Information
This news release may contain forward-looking information within
the meaning of applicable securities legislation, which reflects
the REIT's current expectations regarding future events and in some
cases can be identified by such terms as "will" and "expects".
Forward-looking information is based on a number of assumptions and
is subject to a number of risks and uncertainties, many of which
are beyond the REIT's control that could cause actual results and
events to differ materially from those that are disclosed in or
implied by such forward-looking information. Such risks and
uncertainties include, but are not limited to, the factors
discussed under "Risk Factors" in the REIT's Annual Information
Form dated March 8, 2023, which is
available on SEDAR+ (www.sedarplus.ca). The REIT does not undertake
any obligation to update such forward-looking information, whether
as a result of new information, future events or otherwise, except
as expressly required by applicable law. This forward-looking
information speaks only as of the date of this news release.
Non-IFRS and Other Financial Measures
This news release contains certain non-IFRS and other financial
measures which are measures commonly used by publicly traded
entities in the real estate industry. Management believes that
these metrics are useful for measuring different aspects of
performance and assessing the underlying operating and financial
performance on a consistent basis. However, these measures do not
have a standardized meaning prescribed by International Financial
Reporting Standards ("IFRS") and are not necessarily comparable to
similar measures presented by other publicly traded entities. These
measures should strictly be considered supplemental in nature and
not a substitute for financial information prepared in accordance
with IFRS. The REIT has adopted the guidance under NI 52-112
Non-GAAP and Other Financial Measures Disclosure for the purpose of
this news release. These non-IFRS and other financial measures are
defined below:
- "AFFO" is defined as FFO adjusted for items such as maintenance
capital expenditures and straight-line rental revenue differences.
AFFO should not be construed as an alternative to net income or
cash flows provided by or used in operating activities determined
in accordance with IFRS. The REIT's method of calculating AFFO may
differ from other issuers' methods and, accordingly, may not be
comparable to AFFO reported by other issuers. The REIT also uses
AFFO in assessing its capacity to make distributions.
- "AFFO per unit" is calculated as AFFO divided by the weighted
average number of Units of the REIT and Class B limited partnership
units of Minto Apartment Limited Partnership outstanding over the
period. The REIT regards AFFO per unit as a key measure of
operating performance.
- "AFFO payout ratio" is the proportion of the total
distributions on Units of the REIT and Class B limited partnership
units of Minto Apartment Limited Partnership to AFFO. The REIT uses
AFFO payout ratio in assessing its capacity to make
distributions.
- "annualized turnover" is calculated as the number of move-outs
for the period divided by total number of unfurnished suites in the
portfolio. This percentage is extrapolated to determine an annual
rate.
- "average annual unlevered return" refers to the return on
repositioning activities, and is calculated by dividing the average
annual rental increase per suite after repositioning by the average
repositioning cost per suite, excluding the impact of financing
costs.
- "average monthly rent" represents the average monthly rent per
suite for occupied unfurnished suites at the end of the
period.
- "average occupancy" is defined as the ratio of occupied
unfurnished suites to the total unfurnished suites in the portfolio
for the period.
- "Debt-to-GBV ratio" is calculated by dividing total
interest-bearing debt consisting of fixed and variable rate
mortgages, credit facilities, construction loans and Class C
limited partnership units of Minto Apartment Limited Partnership by
Gross Book Value and is used as the REIT's primary measure of its
leverage.
- "FFO" is defined as IFRS consolidated net income adjusted for
items such as unrealized changes in the fair value of investment
properties, effects of puttable instruments classified as financial
liabilities and changes in fair value of financial instruments and
derivatives. FFO should not be construed as an alternative to net
income or cash flows provided by or used in operating activities
determined in accordance with IFRS. The REIT's method of
calculating FFO may differ from other issuers' methods and,
accordingly, may not be comparable to FFO reported by other
issuers.
- "FFO per unit" is calculated as FFO divided by the weighted
average number of Units of the REIT and Class B limited partnership
units of Minto Apartment Limited Partnership outstanding over the
period. The REIT regards FFO per unit as a key measure of operating
performance.
- "gain-on-lease" refers to the gap between rents achieved on new
leases of unfurnished suites as compared to the expiring
leases.
- "gain-to-lease potential" refers to the gap between
Management's estimate of monthly market rent and average monthly
in-place rent per occupied unfurnished suite.
- "Gross Book Value" is defined as the total assets of the REIT
as at the balance sheet date.
- "interest costs" are calculated as the sum of costs incurred on
mortgages, credit facility, and Class C limited partnership units
of Minto Apartment Limited Partnership and excludes debt retirement
costs.
- "NAV" is calculated as the sum of the value of REIT
Unitholders' equity and Class B limited partnership units of Minto
Apartment Limited Partnership as at the balance sheet date.
- "NAV per unit" is calculated by dividing NAV by the number of
Units of the REIT and Class B limited partnership units of Minto
Apartment Limited Partnership outstanding as at the balance sheet
date.
- "NOI" is defined as revenue from investment properties less
property operating costs, property taxes and utilities
(collectively referred to as "property operating expenses")
prepared in accordance with IFRS. NOI should not be construed as an
alternative to net income determined in accordance with IFRS. The
REIT's method of calculating NOI may differ from other issuers'
methods and, accordingly, may not be comparable to NOI reported by
other issuers. It is a key input in determining the value of the
REIT's properties.
- "NOI margin" is defined as NOI divided by revenue from
investment properties.
- "Normalized FFO" is calculated as FFO net of nonrecurring items
that occurred during the period which are not indicative of the
REIT's typical operating results.
- "Normalized FFO per unit" is calculated as Normalized FFO
divided by the weighted average number of Units of the REIT and
Class B limited partnership units of Minto Apartment Limited
Partnership outstanding over the period.
- "Normalized AFFO" is calculated as AFFO net of nonrecurring
items that occurred during the period which are not indicative of
the REIT's typical operating results.
- "Normalized AFFO per unit" is calculated as Normalized AFFO
divided by the weighted average number of Units of the REIT and
Class B limited partnership units of Minto Apartment Limited
Partnership outstanding over the period.
- "Normalized AFFO payout ratio" is the proportion of the total
distributions on Units of the REIT and Class B limited partnership
units of Minto Apartment Limited Partnership to Normalized
AFFO.
- "Term Debt" is calculated as the sum of value of fixed rate
mortgages, a variable rate mortgage fixed through an interest rate
swap and Class C limited partnership units of Minto Apartment
Limited Partnership.
- "Total Debt" is calculated as the sum of value of
interest-bearing debt consisting of mortgages, credit facilities,
construction loans and Class C limited partnership units of Minto
Apartment Limited Partnership.
- "Total liquidity" is calculated as the sum of the undrawn
balance under the revolving credit facility and cash.
- "Weighted average term to maturity on Term Debt" is calculated
as the weighted average of the term to maturity on the outstanding
fixed rate mortgages, a variable rate mortgage fixed through an
interest rate swap and Class C limited partnership units of Minto
Apartment Limited Partnership.
- "Weighted average effective interest rate on Term Debt" is
calculated as the weighted average of the effective interest rates
on the outstanding balances of fixed rate mortgages, a variable
rate mortgage fixed through an interest rate swap and Class C
limited partnership units of Minto Apartment Limited
Partnership.
Reconciliations of Non-IFRS Financial Measures and
Ratios
FFO and AFFO
($000's except unit
and per unit amounts)
|
Three months ended
September 30,
|
|
Nine months
ended September 30,
|
2023
|
2022
|
|
2023
|
2022
|
Net income (loss) and
comprehensive income (loss)
|
$
27,815
|
$
39,655
|
|
$
(39,421)
|
$
257,832
|
Distributions on Class
B LP Units
|
3,155
|
3,058
|
|
9,464
|
8,820
|
Issuance costs on Class
B LP Units
|
—
|
—
|
|
—
|
175
|
Disposition costs on
investment property
|
—
|
—
|
|
348
|
—
|
Fair value loss (gain)
on:
|
|
|
|
|
|
Investment
properties
|
21,216
|
18,689
|
|
80,419
|
6,619
|
Class B LP
Units
|
(35,799)
|
(44,813)
|
|
(10,817)
|
(227,148)
|
Interest rate
swap
|
(73)
|
(302)
|
|
(319)
|
(2,385)
|
Unit-based
compensation
|
(622)
|
(633)
|
|
(428)
|
(2,600)
|
Funds from
operations (FFO)
|
15,692
|
15,654
|
|
39,246
|
41,313
|
Maintenance capital
expenditure reserve
|
(1,510)
|
(1,524)
|
|
(4,540)
|
(4,466)
|
Amortization of
mark-to-market adjustments
|
(141)
|
(178)
|
|
(544)
|
(564)
|
Adjusted funds from
operations (AFFO)
|
14,041
|
13,952
|
|
34,162
|
36,283
|
Distributions on Class
B LP Units
|
3,155
|
3,058
|
|
9,464
|
8,820
|
Distributions on
Units
|
4,887
|
4,746
|
|
14,659
|
14,262
|
|
$
8,042
|
$
7,804
|
|
$
24,123
|
$
23,082
|
AFFO payout
ratio
|
57.3 %
|
55.9 %
|
|
70.6 %
|
63.6 %
|
Weighted average number
of Units and Class B LP Units issued and outstanding
|
65,651,608
|
65,769,904
|
|
65,645,663
|
64,611,757
|
FFO per
unit
|
$
0.2390
|
$
0.2380
|
|
$
0.5978
|
$
0.6394
|
AFFO per
unit
|
$
0.2139
|
$
0.2121
|
|
$
0.5204
|
$
0.5616
|
NAV and NAV per unit
($000's except unit
and per unit amounts)
|
As at
|
September 30,
2023
|
June 30,
2023
|
December 31,
2022
|
Net assets
(Unitholders' equity)
|
$
1,159,605
|
$
1,136,529
|
$
1,213,537
|
Add: Class B LP
Units
|
351,041
|
386,840
|
361,858
|
NAV
|
$
1,510,646
|
$
1,523,369
|
$
1,575,395
|
Number of Units and
Class B LP Units
|
65,653,641
|
65,642,641
|
65,642,641
|
NAV per
unit
|
$
23.01
|
$
23.21
|
$
24.00
|
SOURCE Minto Apartment Real Estate Income Trust