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Published Feb 13, 2025 • 31 minute read
TORONTO, Feb. 13, 2025 (GLOBE NEWSWIRE) — Canadian Apartment Properties Real Estate Investment Trust (“CAPREIT”) (TSX: CAR.UN) announced today strong operating and financial results for the three months and year ended December 31, 2024. Management will host a conference call to discuss the financial results on Friday, February 14, 2025 at 9:00 a.m. ET.
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HIGHLIGHTS
| As at | December 31, 2024 | December 31, 2023 | ||||
| Total Portfolio Performance and Other Measures | ||||||
| Number of suites and sites(1) | 48,696 | 64,260 | ||||
| Investment properties fair value(2) (000s) | $ | 14,868,362 | $ | 16,532,096 | ||
| Assets held for sale (000s) | $ | 307,460 | $ | 45,850 | ||
| Occupied AMR(1)(3) | ||||||
| Canadian Residential Portfolio(4) | $ | 1,636 | $ | 1,516 | ||
| The Netherlands Portfolio | € | 1,222 | € | 1,063 | ||
| Occupancy(1) | ||||||
| Canadian Residential Portfolio(4) | 97.5 | % | 98.8 | % | ||
| The Netherlands Portfolio | 94.6 | % | 98.5 | % | ||
| Total Portfolio(5) | 97.2 | % | 98.2 | % | ||
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| (1) | As at December 31, 2024, includes 1,803 suites and sites classified as assets held for sale (December 31, 2023 – 272), but excludes commercial suites. |
| (2) | Investment properties exclude assets held for sale. |
| (3) | Occupied average monthly rent (“Occupied AMR”) is defined as actual residential rents divided by the total number of occupied suites or sites in the property, and does not include revenues from parking, laundry or other sources. |
| (4) | Excludes manufactured home communities (“MHC”) sites. |
| (5) | Includes MHC sites. |
| Three Months Ended | Year Ended | |||||||||||
| December 31, | December 31, | |||||||||||
| 2024 | 2023 | 2024 | 2023 | |||||||||
| Financial Performance | ||||||||||||
| Operating revenues (000s) | $ | 276,361 | $ | 272,195 | $ | 1,112,742 | $ | 1,065,317 | ||||
| Net operating income (“NOI”) (000s) | $ | 177,942 | $ | 176,711 | $ | 730,654 | $ | 692,786 | ||||
| NOI margin | 64.4 | % | 64.9 | % | 65.7 | % | 65.0 | % | ||||
| Same property NOI (000s) | $ | 147,783 | $ | 142,907 | $ | 594,600 | $ | 560,953 | ||||
| Same property NOI margin | 63.6 | % | 64.0 | % | 64.7 | % | 64.5 | % | ||||
| Net income (loss) (000s) | $ | (48,813 | ) | $ | 9,212 | $ | 292,742 | $ | (411,574 | ) | ||
| Funds From Operations (“FFO”) per unit – diluted(1) | $ | 0.622 | $ | 0.602 | $ | 2.534 | $ | 2.396 | ||||
| Distributions per unit | $ | 0.375 | $ | 0.363 | $ | 1.471 | $ | 1.450 | ||||
| FFO payout ratio(1) | 59.8 | % | 60.4 | % | 57.9 | % | 60.5 | % | ||||
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| (1) | These measures are not defined by International Financial Reporting Standards (“IFRS”), do not have standard meanings and may not be comparable with other industries or companies. Please refer to the cautionary statements under the heading “Non-IFRS Measures” and the reconciliations provided in this press release. |
| As at | December 31, 2024 | December 31, 2023 | ||||
| Financing Metrics and Liquidity | ||||||
| Total debt to gross book value(1) | 38.4 | % | 41.6 | % | ||
| Weighted average mortgage effective interest rate(2) | 3.11 | % | 2.80 | % | ||
| Weighted average mortgage term (years)(2) | 4.8 | 4.9 | ||||
| Debt service coverage (times)(1)(3) | 1.9x | 1.8x | ||||
| Interest coverage (times)(1)(3) | 3.3x | 3.3x | ||||
| Cash and cash equivalents (000s)(4) | $ | 136,243 | $ | 29,528 | ||
| Available borrowing capacity – Canadian Credit Facilities (000s)(5) | $ | 565,273 | $ | 340,059 | ||
| Capital | ||||||
| Unitholders’ equity (000s) | $ | 9,027,312 | $ | 9,278,595 | ||
| Net asset value (“NAV”) (000s)(1) | $ | 9,042,068 | $ | 9,212,594 | ||
| Total number of units – diluted (000s) | 162,927 | 169,868 | ||||
| NAV per unit – diluted(1) | $ | 55.50 | $ | 54.23 | ||
| (1) | These measures are not defined by IFRS, do not have standard meanings and may not be comparable with other industries or companies. Please refer to the cautionary statements under the heading “Non-IFRS Measures” and the reconciliations provided in this press release. |
| (2) | Excludes liabilities related to assets held for sale, as applicable. |
| (3) | Based on the trailing four quarters. |
| (4) | Consists of $122,941 and $13,302 in Canada and Europe, respectively (December 31, 2023 – $17,616 and $11,912, respectively). |
| (5) | Includes $500,292 available on the Canadian Acquisition and Operating Facility (December 31, 2023 – $340,059) and $64,981 available on the unsecured non-revolving construction and term credit facility to reduce greenhouse gas (“GHG”) emissions (“GHG Reduction Facility”) (December 31, 2023 – N/A). |
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“We’re thrilled with the significant progress we made on our vision of becoming a better-quality business in 2024, and we’re proud of the newer, simpler and stronger CAPREIT that we’ve been building for the future,” commented Mark Kenney, President and Chief Executive Officer. “CAPREIT was originally founded to provide safe, affordable and enjoyable rental apartments for Canadians, and we’re excited to be refocusing our time and resources on that initial, singular purpose. This past year, we’ve been divesting from fragmented business segments and other under-performing, non-core properties, and we’ve been reinvesting the net proceeds into our core, mid-market apartment portfolio in Canada. We’re doing this through the continued acquisition of newer purpose-built, prime-located rental properties, which we’re purchasing at substantial discounts to replacement cost, as well as through tactical, disciplined capital spending on the improved resilience and environmental sustainability of our high-quality, long-standing legacy portfolio.”
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“As much as we’ve been reiterating the merits of our strategy as well as substantiating the value of our Trust through our off-strategy asset sales, which we’ve been completing at premium pricing, we’re further demonstrating our conviction through accretively investing in our own portfolio via our value-enhancing NCIB program,” continued Mr. Kenney. “We’ve spent approximately $300 million in Trust unit buybacks in the fourth quarter alone at prices that were, on average, 20% below our year end NAV of approximately $56 per unit. Despite all the macroeconomic, political and capital market uncertainties impacting the sector, we believe this speaks to the confidence which we have in our business, our strategy, and the long-term fundamentals of the multi-residential rental industry in Canada. Our future outlook remains positive, and regardless of what lies ahead, we’ve never had a better team in place to continue creating value for all our key stakeholders in the many years to come.”
“Our operational results for this past year reflect an unprecedented level of strategic transformation, and we’re pleased with our all-around performance,” added Stephen Co, Chief Financial Officer. “With a view to strengthening revenue, we’ve been actively managing vacancies in balance with local market conditions, and in doing so, our same property occupancies in Canada were down slightly to 98% as of December 31, 2024. Across that, our average rent was $1,623 per month, which represents a solid 6% uplift as compared to the prior year end. This is the product of our diversified, pan-Canadian portfolio of predominantly regulated properties that typically have lower turnover and higher mark-to-market increases, combined with a smaller allocation toward more recently constructed, generally unregulated apartments which tend to have the inverse in turnover and rental uplift trends. These components together provide an optimal runway of long-term growth and stability in returns, positioning us well to withstand short-term swings in supply-demand dynamics and other headwinds.”
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“In addition, with the ability to realize consistently robust topline rent growth in recent years, we’ve been strategically scaling back on total expenditures, in order to further enhance our earnings, and we’ve never been closer to the generation of self-sustaining free cash flow,” continued Mr. Co. “Our annual FFO was up by 6% to $2.53 per unit for 2024, resulting in a payout ratio of 57.9%, down from 60.5% in the comparative period. This was inclusive of the 3% bump in our distribution to $1.50 per Trust unit annualized, effective for monthly distributions starting in August 2024. Further to that, we are announcing an additional 3% increase in our distribution to $1.55 per Trust unit annualized, effective for our next distribution declaration, which we believe demonstrates our ongoing confidence in the future. Although we do anticipate a slight uptick in opportunistic, discretionary capital spending as we navigate through yet another transitory cycle in the residential rental market, we remain committed to our stated capital allocation strategy, our proven asset management platform, and the programs we currently have in place to achieve our objectives. We’ll continue to leverage all these tools in tandem to keep making the best business decisions possible for our residents, our people and our Unitholders alike.”
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SUMMARY OF Q4 AND YEAR-END 2024 RESULTS OF OPERATIONS
Strategic Initiatives Update
- On December 16, 2024, CAPREIT disposed of substantially all of the MHC portfolio for a gross sale price of $715 million. Excluding transaction costs, the disposition was satisfied through $575 million in cash and the issuance of a vendor takeback (“VTB”) mortgage receivable with a principal amount of $140 million. Subsequent to December 31, 2024, an MHC property with 176 sites was disposed of for a gross sale price of $12.5 million and the sale of the remaining MHC property with 357 sites is expected to be completed in the first half of 2025 for a gross sale price of $12.5 million, to be satisfied in cash.
- On December 2, 2024 and December 16, 2024, certain subsidiaries of ERES closed on two separate agreements to sell a total of 3,179 residential suites in the Netherlands for gross proceeds totalling approximately $1.1 billion. The gross sale price was settled in cash, with net proceeds used in part for payment of a special cash distribution by ERES (“ERES Special Distribution”).
- In addition to the above dispositions, for the three months ended December 31, 2024, CAPREIT disposed of 110 suites in a non-core property located in Newmarket, Ontario; and multiple residential properties in the Netherlands with 88 suites, for a total gross sale price of $61.2 million (excluding transaction costs and other adjustments).
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- Including the above dispositions, for the year ended December 31, 2024, CAPREIT disposed of 16,859 suites and sites for a total gross sale price of $2.5 billion (excluding transaction costs and other adjustments) of non-core properties. CAPREIT is currently targeting the disposition of approximately $400 million of non-core Canadian properties in 2025.
- CAPREIT continues to invest in strategic opportunities that are accretive. For the three months ended December 31, 2024, CAPREIT acquired three properties with 314 suites in Canada for a total gross purchase price of $152.3 million (excluding transaction costs and other adjustments). For the year ended December 31, 2024, CAPREIT acquired 10 properties with 1,286 suites in Canada for a total gross purchase price of $669.7 million (excluding transaction costs and other adjustments).
- During the three months ended December 31, 2024, CAPREIT purchased and cancelled approximately 6.8 million Trust Units, under the Normal Course Issuer Bid (“NCIB”) program, at a weighted average purchase price of $44.37 per Trust Unit, for a total cost of $300.1 million. During the year ended December 31, 2024, CAPREIT purchased and cancelled approximately 7.3 million Trust Units, under the NCIB program, at a weighted average purchase price of $44.66 per Trust Unit, for a total cost of $327.1 million.
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- On August 7, 2024, the Board of Trustees approved an increase in monthly distributions from $0.1208 to $0.125 per Trust Unit, or from $1.45 to $1.50 per Trust Unit on an annualized basis. The increase was effective with the August 2024 distribution paid on September 16, 2024 to Unitholders of record as at August 30, 2024.
- On December 16, 2024, CAPREIT declared a special non-cash distribution of $1.18 per Trust Unit, payable in Trust Units on December 31, 2024 to Unitholders of record on December 31, 2024 (the “CAPREIT Special Distribution”).The CAPREIT Special Distribution was made to distribute to Unitholders a portion of the net capital gain realized by CAPREIT from transactions completed during the year ended December 31, 2024. Immediately following the issuance of these Trust Units, the Trust Units were consolidated such that each Unitholder held the same number of Trust Units after the consolidation of the Trust Units as each Unitholder held prior to the Special Distribution.
Operating Results
- On turnovers and renewals, monthly residential rents for the three months and year ended December 31, 2024 remained strong at 6.2% and 5.8%, respectively, for the Canadian residential portfolio, compared to 8.5% and 5.8%, respectively, for the three months and year ended December 31, 2023.
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- Same property Occupied AMR for the Canadian residential portfolio as at December 31, 2024 increased by 6.0% compared to December 31, 2023, while same property occupancy for the Canadian residential portfolio decreased to 97.5% (December 31, 2023 – 98.8%).
- NOI for the same property portfolio increased by 3.4% and 6.0%, respectively, for the three months and year ended December 31, 2024, compared to the same periods last year. Additionally, NOI margin for the same property portfolio decreased to 63.6%, down 0.4%, for the three months ended December 31, 2024, and increased to 64.7%, up 0.2%, for the year ended December 31, 2024, compared to the same periods last year.
- Diluted FFO per unit was up 3.3% and 5.8%, respectively, for the three months and year ended December 31, 2024, compared to the same periods last year, primarily due to contributions from acquisitions and higher same property NOI, partially offset by dispositions.
Balance Sheet Highlights
- CAPREIT’s financial position remains strong, with approximately $688.2 million of available Canadian liquidity, comprising $122.9 million of Canadian cash and cash equivalents, $500.3 million of available capacity on its Acquisition and Operating Facility and $65.0 million on its GHG Reduction Facility.
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- For the year ended December 31, 2024, CAPREIT has completed mortgage financings totalling $539.9 million, with a weighted average term to maturity of 7.4 years and a weighted average interest rate of 4.33%.
- For the year ended December 31, 2024, $2.4 billion of investment properties from ERES, the MHC portfolio and Canadian properties in CAPREIT have been transferred to assets held for sale, of which $2.1 billion was subsequently disposed of in 2024. In addition, $281.7 million of investment properties from the Canadian portfolio and ERES have been disposed of. The impact of the transfer and dispositions on the carrying value of investment property was partially offset by acquisitions of $665.0 million; property capital investments of $237.1 million; fair value gains of $66.2 million; and foreign exchange translation and other for $57.3 million. The overall carrying value of investment properties (excluding assets held for sale) as at December 31, 2024 was $14.9 billion compared to $16.5 billion as at December 31, 2023.
- Diluted NAV per unit as at December 31, 2024 increased to $55.50 from $54.23 as at December 31, 2023, primarily due to the effects of accretive purchases of Trust Units for cancellation through the NCIB program and fair value gains on investment properties.
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Subsequent Events
- Subsequent to year-end, CAPREIT disposed of an additional 1,273 suites and sites in Canada for a total gross sale price of $213.1 million (excluding transaction costs and other adjustments), including an MHC property with 176 sites for $12.5 million. In addition, CAPREIT disposed of an additional 279 suites in the Netherlands for a total gross sale price of $83.3 million (excluding transaction costs and other adjustments).
- Subsequent to year-end, CAPREIT acquired an additional 281 suites in Canada for a total gross purchase price of $97.6 million (excluding transaction costs and other adjustments).
- On February 13, 2025, the Board of Trustees approved an increase in monthly distributions from $0.125 to $0.1292 per Trust Unit, or from $1.50 to $1.55 per Trust Unit on an annualized basis. The increase is effective with the February 2025 distribution payable on March 17, 2025 to Unitholders of record as at February 28, 2025.
OPERATIONAL AND FINANCIAL RESULTS
Portfolio Occupied Average Monthly Rents
| Total Portfolio | Same Property Portfolio(1) | |||||||||||||||||||
| As at December 31, | 2024 | 2023 | 2024 | 2023 | ||||||||||||||||
| Occupied AMR | Occ. % | Occupied AMR | Occ. % | Occupied AMR | Occ. % | Occupied AMR | Occ. % | |||||||||||||
| Total Canadian residential suites | $ | 1,636 | 97.5 | $ | 1,516 | 98.8 | $ | 1,623 | 97.5 | $ | 1,531 | 98.8 | ||||||||
| The Netherlands portfolio | € | 1,222 | 94.6 | € | 1,063 | 98.5 | € | 1,245 | 94.9 | € | 1,166 | 99.2 | ||||||||
| Total portfolio | 97.2 | 98.2 | 97.4 | 98.8 | ||||||||||||||||
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| (1) | Same property Occupied AMR and occupancy include all properties held as at December 31, 2023, but exclude properties disposed of or held for sale as at December 31, 2024. |
The rate of growth in total portfolio Occupied AMR has been primarily driven by (i) new acquisitions completed over the past 12 months; and (ii) same property operational growth. The rate of growth in same property Occupied AMR has been primarily due to (i) rental increases on turnover in the rental markets of most provinces across the Canadian portfolio; and (ii) rental increases on renewals.
Occupancy for the total portfolio as at December 31, 2024 decreased by 1.0% to 97.2% compared to December 31, 2023. Occupancy for the total Canadian residential portfolio as at December 31, 2024 decreased by 1.3% to 97.5% compared to December 31, 2023. CAPREIT views this as a transitory vacancy trend influenced by market conditions. As part of CAPREIT’s strategic approach, CAPREIT aims to manage vacancies in high-demand and high-velocity markets in order to grow Occupied AMR to align with prevailing market conditions. Occupancy for the Netherlands portfolio as at December 31, 2024 decreased by 3.9% to 94.6% compared to December 31, 2023, primarily due to suites intentionally held vacant to maximize value for property and unit dispositions.
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The weighted average gross rent per square foot for total Canadian residential suites was approximately $1.98 as at December 31, 2024, increased from $1.81 as at December 31, 2023.
Canadian Portfolio
| For the Three Months Ended December 31, | 2024 | 2023 | ||
| Change in Monthly Rent | Turnovers and Renewals(1) | Change in Monthly Rent | Turnovers and Renewals(1) | |
| % | % | % | % | |
| Suite turnovers | 13.6 | 3.3 | 29.9 | 2.9 |
| Lease renewals | 4.0 | 12.0 | 3.2 | 11.6 |
| Weighted average of turnovers and renewals | 6.2 | 8.5 | ||
| (1) | Percentage of suites turned over or renewed during the year based on the total weighted average number of residential suites (excluding MHC sites) held during the year. |
| For the Year Ended December 31, | 2024 | 2023 | ||
| Change in Monthly Rent | Turnovers and Renewals(1) | Change in Monthly Rent | Turnovers and Renewals(1) | |
| % | % | % | % | |
| Suite turnovers | 18.8 | 13.6 | 27.7 | 12.9 |
| Lease renewals | 3.6 | 90.5 | 2.7 | 90.1 |
| Weighted average of turnovers and renewals | 5.8 | 5.8 | ||
| (1) | Percentage of suites turned over or renewed during the year is based on the total weighted average number of residential suites (excluding MHC sites) held during the year. |
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The Netherlands Portfolio
| For the Three Months Ended December 31, | 2024 | 2023 | ||
| Change in Monthly Rent | Turnovers and Renewals(1) | Change in Monthly Rent | Turnovers and Renewals(1) | |
| % | % | % | % | |
| Suite turnovers(2) | 8.9 | 1.3 | 20.3 | 3.4 |
| Lease renewals | — | — | — | — |
| Weighted average of turnovers and renewals | 8.9 | 20.3 | ||
| (1) | Percentage of suites turned over during the year based on the total weighted average number of the Netherlands residential suites held during the period. Percentage of suites renewed during the period is based on the number of the Netherlands residential suites on July 1, as lease renewals due to indexation occur only once a year. |
| (2) | On turnover, rents increased by 8.9% on 2.7% of the Netherlands same property residential portfolio for the three months ended December 31, 2024 compared to an increase of 21.2% on 5.0% of the Netherlands same property residential portfolio for the three months ended December 31, 2023. Same property residential portfolio for turnover purposes includes all properties continuously owned since December 31, 2022, and excludes properties disposed of or held for sale as at December 31, 2024. |
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| For the Year Ended December 31, | 2024 | 2023 | ||
| Change in Monthly Rent | Turnovers and Renewals(1) | Change in Monthly Rent | Turnovers and Renewals(1) | |
| % | % | % | % | |
| Suite turnovers(2) | 14.9 | 7.7 | 20.4 | 13.8 |
| Lease renewals | 5.5 | 94.0 | 4.0 | 96.6 |
| Weighted average of turnovers and renewals | 6.2 | 6.1 | ||
| (1) | Percentage of suites turned over during the year is based on the total weighted average number of the Netherlands residential suites held during the year. Percentage of suites renewed during the period is based on the number of the Netherlands residential suites on July 1, as lease renewals due to indexation occur only once a year. |
| (2) | On turnover, rents increased by 15.2% on 12.4% of the Netherlands same property residential portfolio for the year ended December 31, 2024 compared to an increase of 21.5% on 17.4% of the Netherlands same property residential portfolio for the year ended December 31, 2023. Same property residential portfolio for turnover purposes includes all properties continuously owned since December 31, 2022, and excludes properties disposed of or held for sale as at December 31, 2024. |
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Net Operating Income
Same properties for the three months and year ended December 31, 2024 are defined as all properties owned by CAPREIT continuously since December 31, 2022, and therefore do not take into account the impact on performance of acquisitions or dispositions completed during 2024 and 2023, or properties that are classified as held for sale as at December 31, 2024.
| ($ Thousands) | Total NOI | Same Property NOI | ||||||||||||||
| For the Three Months Ended December 31, | 2024 | 2023 | %(1) | 2024 | 2023 | %(1) | ||||||||||
| Operating revenues | ||||||||||||||||
| Rental revenues | $ | 263,267 | $ | 258,954 | 1.7 | $ | 221,180 | $ | 212,296 | 4.2 | ||||||
| Other(2) | 13,094 | 13,241 | (1.1 | ) | 11,335 | 11,134 | 1.8 | |||||||||
| Total operating revenues | $ | 276,361 | $ | 272,195 | 1.5 | $ | 232,515 | $ | 223,430 | 4.1 | ||||||
| Operating expenses | ||||||||||||||||
| Realty taxes | $ | (25,320 | ) | $ | (23,933 | ) | 5.8 | $ | (22,276 | ) | $ | (21,193 | ) | 5.1 | ||
| Utilities | (18,210 | ) | (19,569 | ) | (6.9 | ) | (16,224 | ) | (16,859 | ) | (3.8 | ) | ||||
| Other(3) | (54,889 | ) | (51,982 | ) | 5.6 | (46,232 | ) | (42,471 | ) | 8.9 | ||||||
| Total operating expenses(4) | $ | (98,419 | ) | $ | (95,484 | ) | 3.1 | $ | (84,732 | ) | $ | (80,523 | ) | 5.2 | ||
| NOI | $ | 177,942 | $ | 176,711 | 0.7 | $ | 147,783 | $ | 142,907 | 3.4 | ||||||
| NOI margin | 64.4 | % | 64.9 | % | 63.6 | % | 64.0 | % | ||||||||
| (1) | Represents the year-over-year percentage change. |
| (2) | Comprises parking and other ancillary income such as laundry and antenna revenue. |
| (3) | Comprises repairs and maintenance (“R&M”), wages, insurance, advertising, legal costs and expected credit losses. |
| (4) | Total operating expenses, on a constant currency basis, increased by approximately 3.0% and 5.1%, respectively, for the total and same property portfolio compared to the same periods last year. |
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| ($ Thousands) | Total NOI | Same Property NOI | ||||||||||||||
| For the Year Ended December 31, | 2024 | 2023 | %(1) | 2024 | 2023 | %(1) | ||||||||||
| Operating Revenues | ||||||||||||||||
| Rental revenues | $ | 1,059,382 | $ | 1,015,677 | 4.3 | $ | 873,410 | $ | 828,003 | 5.5 | ||||||
| Other(2) | 53,360 | 49,640 | 7.5 | 45,362 | 41,956 | 8.1 | ||||||||||
| Total operating revenues | $ | 1,112,742 | $ | 1,065,317 | 4.5 | $ | 918,772 | $ | 869,959 | 5.6 | ||||||
| Operating expenses | ||||||||||||||||
| Realty taxes | $ | (100,657 | ) | $ | (96,408 | ) | 4.4 | $ | (88,412 | ) | $ | (84,726 | ) | 4.4 | ||
| Utilities | (72,340 | ) | (77,365 | ) | (6.5 | ) | (62,746 | ) | (65,666 | ) | (4.4 | ) | ||||
| Other(3) | (209,091 | ) | (198,758 | ) | 5.2 | (173,014 | ) | (158,614 | ) | 9.1 | ||||||
| Total operating expenses(4) | $ | (382,088 | ) | $ | (372,531 | ) | 2.6 | $ | (324,172 | ) | $ | (309,006 | ) | 4.9 | ||
| NOI | $ | 730,654 | $ | 692,786 | 5.5 | $ | 594,600 | $ | 560,953 | 6.0 | ||||||
| NOI margin | 65.7 | % | 65.0 | % | 64.7 | % | 64.5 | % | ||||||||
| (1) | Represents the year-over-year percentage change. |
| (2) | Comprises parking and other ancillary income such as laundry and antenna revenue. |
| (3) | Comprises R&M, wages, insurance, advertising, legal costs and expected credit losses. |
| (4) | Total operating expenses, on a constant currency basis, increased by approximately 2.4% and 4.8%, respectively, for the total and same property portfolio compared to the same period last year. |
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The following table reconciles same property NOI and NOI from acquisitions, dispositions and assets held for sale to total NOI, for the three months and years ended December 31, 2024 and December 31, 2023:
| ($ Thousands) | Three Months Ended | Year Ended | ||||||||||
| December 31, | December 31, | |||||||||||
| 2024 | 2023 | 2024 | 2023 | |||||||||
| Same property NOI | $ | 147,783 | $ | 142,907 | $ | 594,600 | $ | 560,953 | ||||
| NOI from acquisitions | 8,955 | 2,444 | 25,145 | 6,237 | ||||||||
| NOI from dispositions and assets held for sale | 21,204 | 31,360 | 110,909 | 125,596 | ||||||||
| Total NOI | $ | 177,942 | $ | 176,711 | $ | 730,654 | $ | 692,786 | ||||
Operating Revenues
For the three months ended December 31, 2024, same property operating revenues increased by $9.1 million, primarily driven by increases in monthly rents on turnovers and renewals, partially offset by a decrease in occupancy. Total operating revenues increased by $4.2 million during the same period, due to $9.2 million of operational growth, primarily on the same property operating portfolio and to a lesser extent on assets held for sale as at December 31, 2024 and a $9.5 million increase from acquisitions, partially offset by $14.5 million lower revenues due to dispositions.
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For the year ended December 31, 2024, same property operating revenues increased by $48.8 million, primarily driven by increases in monthly rents on turnovers and renewals, partially offset by a decrease in occupancy. Total operating revenues increased by $47.4 million during the same period, due to $49.7 million of operational growth, primarily on the same property operating portfolio and to a lesser extent on assets held for sale as at December 31, 2024 and a $26.3 million increase from acquisitions, partially offset by $28.6 million lower revenues due to dispositions.
Operating Expenses
Operating expenses for the total and same property portfolio for the three months and year ended December 31, 2024 increased compared to the same period last year, primarily due to increases in other operating expenses.
For the three months ended December 31, 2024, other operating expenses for the total and same property portfolio increased compared to the same period last year, primarily due to the following reasons:
- higher accelerated R&M costs in Québec of approximately $0.9 million to bring certain properties back to optimal CAPREIT standards,
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- higher R&M costs in the Greater Toronto Area of approximately $1.1 million primarily relating to higher-than-normal maintenance requests and security enhancements at legacy properties,
- higher advertising and legal costs of approximately $0.5 million, primarily in Ontario and Québec, to combat the increase in vacancy due to general rental market conditions, as well as to collect overdue rents,
- higher wages of $0.5 million relating to incremental compensation for operational site employees, and
- higher expected credit losses of $0.5 million across most Canadian regions due to factors such as the rising cost of living, elevated past due balances not being cleared by prior tenants (including a terminated corporate tenant in Québec), and to a lesser extent, certain non-permanent residents leaving Canada without settling their outstanding receivable balances.
Similarly to the detailed explanations provided above, other operating expenses for the total and same property portfolio for the year ended December 31, 2024 increased compared to the same period last year, primarily due to higher R&M costs of $5.2 million within the Greater Toronto Area and $2.7 million within Québec, and higher expected credit losses of $1.4 million.
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Higher R&M costs of $12.2 million for the year ended December 31, 2024 are due to the reasons mentioned above, as well as higher maintenance costs that correspond with a year-over-year reduction in suite and common area capital improvements of $31.1 million (December 31, 2023 – $32.9 million) resulting in significant annual interest cost savings, reflecting CAPREIT’s strategic reallocation of capital.
SUBSEQUENT EVENTS
The table below summarizes the acquisition of investment properties completed subsequent to December 31, 2024:
| ($ Thousands) | ||||||
| Acquisition Date | Suite Count | Region | Gross Purchase Price(1) | |||
| January 28, 2025 | 41 | Vancouver, BC | $ | 18,226 | ||
| February 4, 2025 | 240 | Edmonton, AB | 79,400 | |||
| Total | 281 | $ | 97,626 |
| (1) | Gross purchase price excludes transaction costs and other adjustments. |
The table below summarizes the disposition of investment properties completed subsequent to December 31, 2024:
