MARWEST APARTMENT REAL ESTATE INVESTMENT TRUST ANNOUNCES 2024 Q1 RESULTS
Canada NewsWire
WINNIPEG, MB, May 16, 2024
/NOT FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES/
WINNIPEG, MB, May 16, 2024 /CNW/ - Marwest Apartment Real Estate Investment Trust (the "REIT") (TSXV: MAR.UN) reported financial results for the three months ended March 31, 2024. This press release should be read in conjunction with the REIT's Unaudited Condensed Consolidated Interim Financial Statements and Management's Discussion and Analysis ("Q1 2024 MD&A") for the three months ended March 31, 2024, which are available on the REIT's website at www.marwestreit.com and at www.sedarplus.ca(1) .
Mr. William Martens, Chief Executive Officer and Trustee commented, "Q1 operations provided the REIT with a 14.51% increase in Same Property NOI(1) compared to Q1 2023. Continued stable occupancy levels due to the current rental market in Winnipeg, has allowed management to increase rental rates across the portfolio. Management expects similar demand and low vacancy rates to continue throughout 2024."
Q1 2024 Quarterly Highlights
-- Reported Net Asset Value per Unit ("NAV") of $1.93 at March 31, 2024
compared to $1.90 at December 31, 2023
-- Same Property Net Operating Income1 ("Same Property NOI") increased by
14.51% in Q1 2024 compared to Q1 2023
-- Reported funds from operations ("FFO") per Unit of $0.0272 for the three
months ended March 31, 2024, compared to $0.0171 for the three months
ended March 31, 2023
-- Reported adjusted funds from operations ("AFFO") per Unit of $0.0264 for
the three months ended March 31, 2024, compared to $0.0165 for the three
months ended March 31, 2023
-- Refinancing of the Element Phase I Property with a Canada Mortgage and
Housing Corporation ("CMHC") insured mortgage has been completed
-- Average occupancy rate of 99.01% reported for the three months ended
March 31, 2024
Operations Summary
Portfolio Operational Information Three months ended Three months ended
March 31, 2024 March 31, 2023
Number of properties 4 4
Number of suites 516 516
Average occupancy rate 99.01 % 98.30 %
Average rental rate $1,564 $1,528
Same Property NOI $ 1,656,566 $ 1,446,655
Three months ended
March 31
Reconciliation of Same Property NOI(2) to IFRS 2024 2023
Revenue from investment properties $ 2,540,498 $ 2,454,405
Expenses:
Property operating expenses 653,557 775,215
Realty taxes 230,375 232,535
Total property operating expenses 883,932 1,007,750
Same Property NOI(2) $ 1,656,566 $ 1,446,655
(1) This news release contains certain non-IFRS and
other financial measures. Refer to "Notice with respect
to Non-IFRS Measures" in this news release for a complete
list of measures and their meaning.
(2) Same Property Portfolio consists of the entire
multi-residential properties portfolio owned by the
REIT for comparable periods in Q1 2024 and Q1 2023
-- See "Notice with respect to Non-IFRS Measures"
below.
Reconciliation of Debt-to-Gross Book Value ratio
Total interest-bearing debt $102,634,154
Total assets on balance sheet 142,140,695
Debt-to-Gross Book Value ratio 72.21 %
Reconciliation of Debt Service Coverage ratio
NOI for the three months ended March 31, 2024 $ 1,656,566
Mortgage payments for the three months ended March
31, 2024 1,226,690
Debt Service Coverage ratio 1.35
Weighted average term to maturity on fixed rate debt 72.54 months
Weighted average interest rate on fixed debt 3.09 %
Financial Summary
The REIT generated FFO and AFFO per Unit of $0.0272 and $0.0264, respectively, during the three months ended March 31, 2024. FFO per Unit increased by 59.06% over the same period last year and AFFO per Unit increased by 60.00% over the same period last year.
Reconciliation of Net Income and Comprehensive Three months ended
Income
to FFO and AFFO
March 31
2024 2023
Revenue from investment properties $2,540,498 $2,454,405
Property operating expenses (653,557) (775,215)
Realty taxes (230,375) (232,535)
Net Operating Income 1,656,566 1,446,655
NOI Margin 65.21 % 58.94 %
General and administrative (189,091) (201,632)
Finance costs (978,196) (952,084)
Fair value gain on:
Investment properties 128,630 280,861
Unit-based compensation 115 41,853
Exchangeable Units - 2,601,906
Net income and
comprehensive income $ 618,024 $3,217,559
Three months ended
March 31
Reconciliation of FFO 2024 2023
Net income and comprehensive income 618,024 3,217,559
Distributions on Exchangeable Units 41,467 40,650
Fair value gain on investment properties (128,630) (280,861)
Fair value gain on unit-based compensation (115) (41,853)
Fair value gain on Exchangeable Units - (2,601,906)
FFO 530,746 333,589
Weighted average number of Units 19,498,838 19,508,707
FFO/unit $ 0.0272 $ 0.0171
Reconciliation of AFFO
FFO $ 530,746 $ 333,589
Capital expenditures (14,348) (9,937)
Leasing costs (2,022) (1,653)
AFFO 514,376 321,999
Weighted average number of Units 19,498,838 19,508,707
AFFO/unit $ 0.0264 $ 0.0165
AFFO payout ratio 14.50 % 22.72 %
NAV and NAV per Unit At March 31, 2024 At December 31, 2023
Reconciliation
Unitholders' Equity $ 28,163,240 $ 27,578,331
Exchangeable Units 9,757,146 9,757,146
NAV 37,920,386 37,335,477
Trust Units 8,657,564 8,657,564
Exchangeable Units 10,841,274 10,841,274
Deferred Units 167,841 167,265
Total Units oustanding 19,666,679 19,666,103
NAV per unit $ 1.93 $ 1.90
The overall increase in NAV from $1.90 at December 31, 2023 to $1.93 at March 31, 2024 was due to improved market conditions throughout all properties and net operating income less finance costs and general and administrative expenses exceeding distributions.
Outlook
Management is focused on growing the portfolio and unitholder value through increasing rental rates where the market allows, future acquisition opportunities that will increase the overall size and performance of the REIT, as well as maintaining a manageable debt structure. The current debt of the REIT is all at fixed rates with an average remaining mortgage term of over six years. The majority of the REIT's debt is CMHC insured.
Management believes the organic growth in NAV due to paydown of debt over the mortgage terms is a positive outcome of the higher leveraged position as well as lowering the REIT's Debt-to-Gross Book Value ratio and thereby increasing the NAV per Unit over time.
Management anticipates the demand for rental housing to continue to grow in the coming quarters due to increasing immigration and the affordability gap in rental vs. home ownership. As interest rates maintain their current levels, the cost of home ownership remains elevated.
The increase in the portfolio's operating costs due to inflation may be offset by increases in rental rates, where the market allows, as 56 percent of the portfolio at March 31, 2024 is not under rent control or restrictive financing agreements.
About Marwest Apartment Real Estate Investment Trust
The REIT is an unincorporated open-ended trust governed by the laws of the Province of Manitoba. The REIT was formed to provide holders of Units with the opportunity to invest in the Canadian multi-family rental sector through the ownership of high-quality income-producing properties, with an initial focus on stable markets throughout Western Canada.
Forward-looking Statements
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