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

Alternate Symbol(s): CDPYF

Canadian Apartment Properties Real Estate Investment Trust is a Canada-based provider of rental housing. The Company owns and manages interests in multiunit residential rental properties, including apartments, townhomes and manufactured home communities (MHC), principally located in and near urban centers across Canada. The Company owns approximately 64,200 residential apartment suites, town homes and manufactured home community sites located across Canada and the Netherlands, with approximately $16.7 billion of investment properties in Canada and Europe. The Company’s objectives are to maintain a focus on maximizing occupancy and responsibly growing occupied average monthly rent (Occupied AMR) in accordance with local conditions in each of its markets; grow FFO per unit, sustainable distributions and NAV per unit by actively managing its properties; invest capital within the property portfolio and adopt edge technologies and solutions; and maintain financial management.

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Post by retiredcfon Feb 24, 2022 9:38am

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Post# 34457492

TD

Currently have a $72.00 target. GLTA

Canadian Apartment Properties REIT

(CAR.UN-T) C$54.65

Q4/21 First Look: Results Miss As Operating Expenses Tick Up Event

Q4/21 results. Conference call today at 9:00 a.m. ET (1-844-200-6205; passcode: 914949).

Impact: SLIGHTLY NEGATIVE

NFFO/unit (f.d.) was $0.57, -1% vs. Q4/20, and below our estimate of $0.60 (consensus: $0.61). AFFO/unit (our calculation) was $0.49 (TDS: $0.52). The miss was driven by higher-than-expected operating costs (Exhibit).

Q4/21 saw continued improvement in occupancy and rents. However, Canadian Residential SPNOI growth declined 2.1% y/y (2021: +0.6%) owing to a 9.0% increase in operating costs. This represented its first negative quarter of SPNOI since Q4/13. The increase in operating costs was attributed to R&M (timing related as fewer restrictions in Q4/21), as well as higher utilities. We note that 2021 SP operating expenses were only up 2.1% y/y. We will be looking for more colour from management on its outlook for operating costs in 2022.

Despite the Q4/21 result, we believe that CAPREIT is still well-positioned to generate low-to-mid single-digit SPNOI growth in 2022, partly due to the removal of 0% rent caps in Ontario and B.C., and improving demand fundamentals.

Operating Highlights

Ontario SPNOI (58% of Canadian residential SPNOI) was -0.1%, Quebec (18%) was -7.0%, B.C. (15%) was -4.7%, and Alberta (4%) was -4.7%. MHC SPNOI (7%) was -2.6%. Total portfolio SPNOI, including Europe (ERES Q4/21 results here) was -2.0%..
Canadian Residential Suite SP revenues were +1.9% in Q4/21 owing to an 80bps y/y occupancy increase to 98.7% and 2.8% AMR growth to $1,316. Rental uplifts averaged 4.2% in Q4/21 (2021: +3.0%), including 8.6% on new leases. This compares favourably to the 6.0% lifts on turnover reported in Q3/21, reflecting the ongoing strengthening of market fundamentals, in our view.

Acquisition/Disposition Activity

2021 Canadian acquisition activity totalled $804.5mm across 3,245 suites and MHC sites. Post-Q4, acquired a 59-suite property in Kelowna, B.C., for $29.5mm ($500,000/suite).

Balance Sheet

Q4/21 IFRS property-level FV increase of $568.3mm (2021: $1.1bln), or $3.24/ unit, as the cap rate declined 5bps to 3.68%. IFRS book value was +4.1% q/ q to $59.17.
CAPREIT had $457.9mm of liquidity ($73.4mm cash; $384.5mm available on credit lines) vs. $381.7mm in Q3/21.
Leverage (Debt/GBV) was -110bps q/q at 36.1%