TORONTO, May 11, 2023 (GLOBE NEWSWIRE) — Canadian Apartment Properties Real Estate Investment Trust (“CAPREIT”) (TSX:CAR.UN) announced today that it has completed the disposition of a non-core portfolio containing 180 residential suites and one commercial unit in Montréal, Québec. The properties were built approximately 50 years ago and were sold for an aggregate consideration of $27.8 million (excluding disposition costs). CAPREIT also discharged the $12.4 million mortgage principal outstanding on the portfolio, which had a remaining term to maturity of approximately one year and an interest rate of 3.6% per annum. Net cash proceeds are intended for near-term re-deployment into more strategically aligned, accretive opportunities.
CAPREIT further announced today that it has completed the acquisition of a newly constructed 89-suite residential building located in central Edmonton, Alberta. CAPREIT acquired the high-quality property for a purchase price of $27.2 million (excluding transaction costs), which was funded by $6.8 million in cash along with the assumption of the outstanding principal balance on the associated mortgage of $20.4 million. The mortgage carries interest at a rate of 2.6% per annum for a remaining term to maturity of approximately nine years.
“We continue to make good progress on our strategic repositioning program, with these two transactions modernizing CAPREIT’s portfolio, increasing the allocation toward our target new build asset class and enhancing geographical diversification,” commented Mark Kenney, President and Chief Executive Officer. “Alberta’s robust macroeconomic profile is supporting strong and sustainable growth prospects in one of Canada’s most affordable provinces, and we are excited to be acquiring a property in this attractive market.”
“We have divested at a sub-4% capitalization rate and have reinvested at a capitalization rate that is in excess of 4%,” added Julian Schonfeldt, Chief Investment Officer. “Not only did we purchase this new construction rental asset at an attractive price that is below replacement cost, but we also effectively replaced our one-year 3.6% interest rate mortgage with a higher value nine-year 2.6% interest rate mortgage.”
CAPREIT is Canada’s largest publicly traded provider of quality rental housing. As at December 31, 2022, CAPREIT owns or has interests in approximately 67,000 residential apartment suites, townhomes and manufactured home community sites well-located across Canada and the Netherlands, with approximately $17 billion of investment properties in Canada and Europe. For more information about CAPREIT, its business and its investment highlights, please visit our website at www.capreit.ca and our public disclosure which can be found under our profile at www.sedar.com.
CAUTIONARY STATEMENTS REGARDING FORWARD-LOOKING STATEMENTS
All statements in this press release that do not relate to historical facts constitute forward-looking statements. These statements represent CAPREIT’s intentions, plans, expectations and beliefs and are subject to certain risks and uncertainties that could result in actual results differing materially from these forward-looking statements. These risks and uncertainties are more fully described in regulatory filings that can be obtained on SEDAR at www.sedar.com.
For more information, please contact:
Mr. Mark Kenney
President & Chief Executive Officer
Mr. Stephen Co
Chief Financial Officer
Mr. Julian Schonfeldt
Chief Investment Officer