Canadian Apartment Properties Real Estate Investment Trust T.CAR.UN

TD

[retiredcf]

CAR.UN remains on their Action Buy list with a $63.00 target. GLTA

Canadian Apartment Properties REIT

(CAR.UN-T) C$49.91

Q4/20 First Look: Results in Line; SPNOI +3.2% Event

Q4/20 results. Conference call today at 9:00 a.m. ET (1-833-714-0874; passcode: 2638019).

Impact: NEUTRAL

NFFO/unit (f.d.) was $0.58, +7% vs. Q4/19, and in line with our estimate/consensus. AFFO/unit (our calculation) of $0.50 was also in line.

Q4/20 Operating Highlights

• Canadian Residential Suite SPNOI growth was +2.4% (2020: +3.7%) on a 1.7% increase in revenue and a 1.0% decline in operating expenses. SPNOI margins were +100bps y/y to 65.5%. Ontario (58% of SPNOI) was +1.7%, Quebec (20%) was +6.5%, and B.C. (14%) was +9.0%. MHC SPNOI was +4.6% (2020: +3.1%). Total portfolio SPNOI including Europe (ERES Q4 results here) was +3.2% (2020 +3.9%)..

• Canadian residential suite same-property occupancy was -120bps y/y to 97.8%. Stabilized residential net AMR increased 2.0% y/y to $1,286. Ontario was +3.8%, Quebec +0.3%, and B.C. +1.5%.

• Canadian Portfolio generated 5.9% AMR growth on suite turnover (5.4% of suites), down from 13.1% in Q4/19 (4.3% of suites). 2020 increase in turn was 7.9%. The REIT's weighted-average rent/sf is ~$1.60, unchanged q/q.

  Acquisition/Disposition Activity

• During Q4, acquired two Ottawa assets aggregating 380 suites for $95.5mm (~ $251,300/suite) [link]. Also acquired a four-building, 147-suite property (Queen Anne Apartments) in Maple Ridge, B.C., just outside of Vancouver, for $29.2mm (~$198,640/suite). Finally, acquired a 38-suite newly-built apartment property in Bedford, Nova Scotia, for $11.9mm (~$313,160/suite).

• Acquired Ontario MHC parks totalling 169 sites for $9.9mm ($58,580/site).

• During 2020, completed the buyout of 10 of 13 Toronto operating leases for $158.6mm.

  Balance Sheet

• Q4 IFRS property-level FV increase of $398.4mm ($2.31/unit), largely driven by an 8bps q/q decline in the average cap rate to 3.91% (2020: $749.9mm, or 7% of asset value). IFRS NAV is +5% q/q to $54.06.

• CAPREIT had $749.7mm of liquidity ($121.7mm cash; $628.0mm available on credit lines), up significantly from $372.2mm at Q3/20. The REIT has unencumbered assets valued at $976.7mm (Q3: $817.2mm).

• Leverage (Debt/GBV) was -40bps q/q to 35.6%. During Q4, refinanced $213.9mm of maturing mortgages for total proceeds of $881.3mm, including $667.5mm of up-financing (WAIR: 1.8%; WADM: 10.5 years)