TORONTO, May 01, 2020 (GLOBE NEWSWIRE) — Canadian Apartment Properties Real Estate Investment Trust (âCAPREITâ) (TSX:CAR.UN) today provided an update on current key finance and operating metrics as impacted by the COVID-19 pandemic, and the preventative measures being taken to mitigate risk across our business. This update reflects the estimated impact of the pandemic on our business as of this date, and does not imply that business conditions will not change going forward. This update also refers only to our Canadian business, exclusive of our interests in the Netherlands or Ireland residential rental business.
First and foremost, we are prioritizing the safety and well-being of our residents, our team and our buildings. We wish to thank all of our frontline staff who are working diligently to continue to provide customer service in new and innovative ways as we navigate these challenging times, and to recognize our residents who are working with us as we adapt our communications and services to meet the needs of our communities and focus on the health and safety of all of our residents.
We are communicating regularly with our residents to ensure they are aware of the precautionary measures we have put in place to disinfect and maximize the cleanliness of our properties. We continue to update them with public education on COVID-19, including up-to-date recommendations for monitoring hygiene through educational posters on-site and by leveraging the increased utilization of our online Resident Portals. We are urging residents to contact their public health agency to receive assistance should they suspect that they are affected by COVID-19. We have refocused our maintenance and cleaning efforts on high traffic common areas like elevators, lobbies, laundry rooms, and other common spaces.
From an operational perspective, in addition to enhancing our cleaning and maintenance activities, we are working with our residents to collect monthly rents and provide residents with options to permit them to pay rent in a safe manner. We have enhanced our existing rent deferral program and have invited residents in need to discuss any issues they may have with meeting their monthly rent payments as we look to provide solutions on a case-by-case basis for those residents facing financial hardship due to COVID-19. We are also ensuring that residents experiencing financial challenges are aware of all the various government programs available to help them.
As of April 30, 2020:
- We have collected approximately 98% of April rents for the combined apartment and MHC portfolios. This is generally in line with the same period for our March, 2020 collections. We will closely monitor the May, 2020 collections.
- Residents approved for our rent deferral program remained well below 0.5% of residents.
- We have implemented a temporary moratorium on rent increases effective April 1, 2020.
- We have accelerated the launch of our on-line resident portal to enhance resident communications, such that the launch is complete, and the tenant portal is available to the full CAPREIT residential portfolio, with 53.7% of our residents currently registered with us.
- We are encouraging rent payments by various direct deposit methods and are experiencing increased acceptance of these direct payment methods by residents.
- We are investigating innovative methods to attract new residents, including various incentives and mobile and on-line property and suite tours.
- Occupancy remains strong at 98.2% for our apartment portfolio and 95.8% for our MHC properties.
CAPREITâs financial position and liquidity remain strong, providing us with the financial resources and flexibility to manage our way through these challenging times.
As of April 30, 2020:
- We entered 2020 with a highly conservative approximately 35% loan to value ratio.
- Liquidity as of April 03, 2020 amounted to $255 million, including approximately $145 million in cash or cash equivalents and $110 million of available borrowing capacity on our credit facility.
- We have approximately $800 million in unencumbered properties.
- We have closed or committed mortgage refinancing of $181 million for the year to date, including top-up financing of $92 million, with a weighted average term to maturity of 10 years and a weighted average interest rate of 2.01%.
- We expect to raise between $420 million and $470 million in total mortgage refinancing, with top-up financing of between $210 million to $260 million including operating leases purchased to date, and between $130 million and $160 million in new financings for closed acquisitions for the remainder of 2020.
- The current interest rate environment remains favourable with ten-year debt currently available at attractive rates between 1.60% and 2.1%. We most recently locked interest rates on a $45 million mortgage at 1.59% for a 10 year term which includes a top up of $39 million expected to close shortly.
- We have limited our capital expenditures, repairs and maintenance only to those required on an emergency basis or to protect the safety of our residents.
- We have delayed the start of construction on our development projects but continue to work on obtaining the appropriate permits and any other required municipal documentation.
âWhile we remain uncertain as to how the COVID-19 pandemic will evolve going forward and cannot rely on our April metrics as an indicator of things to come, we believe we have taken the necessary steps to mitigate the current impact of the pandemic on our people, our residents and our business,â commented Mark Kenney, President and CEO. âLooking ahead, we strongly believe our business, and the multi-family real estate sector in general, remains a highly defensive and counter-cyclical asset class that can bear the broad market swings we are experiencing. With the strongest balance sheet and financial position in our twenty-two-year history, we have the resources to weather this storm.â
âMost importantly, I want to thank our residents for their support and everyone at CAPREIT for their hard work and dedication over the past weeks. These are unprecedented times, and it is the experience and commitment of our people that will guide us through these issues. By working together, we will get through these challenges and emerge stronger than ever before,â Mr. Kenney concluded.
CAPREIT expects to update stakeholders as to the impact of the COVID-19 pandemic on its operating performance with its Q1-2020 results, scheduled to be released on May 15, 2020.
CAPREIT has published its 2019 Environmental, Social and Governance (ESG) report, which is available on its website. The report describes CAPREITâs commitment to creating and maintaining sustainable communities and highlights its work on these ESG matters.
CAPREIT is one of Canadaâs largest real estate investment trusts. CAPREIT owns approximately 56,800 suites, including townhomes and manufacturing housing sites, in Canada and, indirectly through its investment in ERES, approximately 5,600 suites in the Netherlands. CAPREIT manages approximately 60,900 of its own suites in Canada and Netherlands, and additionally, approximately 3,700 suites in Ireland. Since its Initial Public Offering in May 1997, CAPREIT has grown monthly cash distributions per Unit by 93%. For more information about CAPREIT, its business and its investment highlights, please refer to our website at www.caprent.com or www.capreit.net and our public disclosure at www.sedar.com.
CAUTIONARY STATEMENTS REGARDING FORWARD-LOOKING STATEMENTS
Certain statements contained, or contained in documents incorporated by reference, in this press release constitute forward-looking information within the meaning of securities laws. Forward-looking information may relate to CAPREITâs future outlook and anticipated events or results and may include statements regarding the future financial position, business strategy, budgets, litigation, occupancy rates, rental rates, productivity, projected costs, capital investments, financial results, taxes, plans and objectives of, or involving, CAPREIT. Particularly, statements regarding CAPREITâs future results, performance, achievements, prospects, costs, opportunities and financial outlook, including those relating to acquisition and capital investment strategies, and the real estate industry generally, are forward-looking statements. In some cases, forward-looking information can be identified by terms such as âmayâ, âwillâ, âshouldâ, âexpectâ, âplanâ, âanticipateâ, âbelieveâ, âintendâ, âestimateâ, âpredictâ, âpotentialâ, âcontinueâ or the negative thereof, or other similar expressions concerning matters that are not historical facts. Forward-looking statements are based on certain factors and assumptions regarding expected growth, results of operations, performance and business prospects and opportunities. In addition, certain specific assumptions were made in preparing forward-looking information, including that the Canadian, Irish and Dutch economies will generally experience growth, which, however, may be adversely impacted by the global economy and the ongoing health crisis related to the coronavirus (COVID-19) pandemic; that inflation will remain low; that interest rates will remain low in the medium term; that Canada Mortgage and Housing Corporation (âCMHCâ) mortgage insurance will continue to be available and that a sufficient number of lenders will participate in the CMHC-insured mortgage program to ensure competitive rates; that the Canadian capital markets will continue to provide CAPREIT with access to equity and/or debt at reasonable rates; that vacancy rates for CAPREIT properties will be consistent with historical norms; that rental rates on renewals will grow at levels similar to the rate of inflation; that rental rates on turnovers will grow; that the difference between in-place and market-based rents will be reduced upon such turnovers and renewals; that CAPREIT will be able to enforce its leases unrestricted by additional government regulations related to the ongoing coronavirus (COVID-19) pandemic; that CAPREIT will effectively manage price pressures relating to its energy usage; and, with respect to CAPREITâs financial outlook regarding capital investments, assumptions respecting projected costs of construction and materials, availability of trades, the cost and availability of financing, CAPREITâs investment priorities, the properties in which investments will be made, the composition of the property portfolio and the projected return on investment in respect of specific capital investments. Although the forward-looking statements contained in this press release are based on assumptions, CAPREITâs management believes they are reasonable as of the date hereof; however, there can be no assurance actual results will be consistent with these forward-looking statements, and they may prove to be incorrect. Forward-looking statements necessarily involve known and unknown risks and uncertainties, many of which are beyond CAPREITâs control, that may cause CAPREITâs or the industryâs actual results, performance, achievements, prospects and opportunities in future periods to differ materially from those expressed or implied by such forward-looking statements. These risks and uncertainties include, among other things, risks related to: public health crises, disease outbreaks, reporting investment properties at fair value, real property ownership, investment restrictions, operating risk, energy costs, environmental matters, catastrophic events, insurance, capital investments, indebtedness, taxation-related risks, government regulations, controls over financial reporting, other legal and regulatory risks, the nature of units of CAPREIT (âTrust Unitsâ), unitholder liability, liquidity and price fluctuation of Trust Units, dilution, distributions, participation in CAPREITâs distribution reinvestment plan, potential conflicts of interest, dependence on key personnel, general economic conditions, competition for residents, competition for real property investments, risks related to acquisitions, cyber security risk and foreign operation and currency risks. There can be no assurance that the expectations of CAPREITâs Management will prove to be correct. These risks and uncertainties are more fully described in regulatory filings, including CAPREITâs Annual Information Form released on March 27, 2020, which can be obtained on SEDAR at www.sedar.com, under CAPREITâs profile, as well as under the Risks and Uncertainties section of the MD&A released on February 26, 2020. The information in this press release is based on information available to management as of April 30, 2020. Subject to applicable law, CAPREIT does not undertake any obligation to publicly update or revise any forward-looking information.
For more information, please contact:
Mr. Michael Stein
Mr. Mark Kenney
President & CEO
Mr. Scott Cryer
Chief Financial Officer