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TORONTO, May 08, 2025 (GLOBE NEWSWIRE) — Canadian Apartment Properties Real Estate Investment Trust (“CAPREIT”) (TSX: CAR.UN) announced today its operating and financial results for the three months ended March 31, 2025. Management will host a conference call to discuss the financial results on Friday, May 9, 2025 at 9:00 a.m. ET.
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HIGHLIGHTS
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| As at | March 31, 2025 | December 31, 2024 | March 31, 2024 | ||||||
| Total Portfolio Performance and Other Measures | |||||||||
| Number of suites and sites(1) | 47,197 | 48,696 | 64,151 | ||||||
| Investment properties fair value(2)(000s) | $ | 14,941,512 | $ | 14,868,362 | $ | 16,695,616 | |||
| Assets held for sale (000s) | $ | 12,500 | $ | 307,460 | $ | 33,000 | |||
| Occupied AMR(1)(3) | |||||||||
| Canadian Residential Portfolio(4) | $ | 1,677 | $ | 1,636 | $ | 1,552 | |||
| The Netherlands Residential Portfolio | € | 1,248 | € | 1,222 | € | 1,068 | |||
| Occupancy(1) | |||||||||
| Canadian Residential Portfolio(4) | 97.9 | % | 97.5 | % | 98.4 | % | |||
| The Netherlands Residential Portfolio | 93.6 | % | 94.6 | % | 98.5 | % | |||
| Total Portfolio(5) | 97.6 | % | 97.2 | % | 98.0 | % | |||
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| (1) | As at March 31, 2025, includes 357 sites classified as assets held for sale in Canada (December 31, 2024 – 1,803 suites and sites in Canada and Europe, March 31, 2024 – 79 suites in Canada), 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. |
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| For the Three Months Ended March 31, | 2025 | 2024 | ||||
| Financial Performance | ||||||
| Operating revenues (000s) | $ | 253,311 | $ | 275,816 | ||
| Net operating income (“NOI”) (000s) | $ | 158,019 | $ | 177,049 | ||
| NOI margin | 62.4 | % | 64.2 | % | ||
| Same property NOI (000s) | $ | 149,165 | $ | 145,330 | ||
| Same property NOI margin | 62.3 | % | 63.3 | % | ||
| Net income (000s) | $ | 7,985 | $ | 182,113 | ||
| Funds From Operations (“FFO”) per unit – diluted(1) | $ | 0.585 | $ | 0.609 | ||
| Distributions per unit | $ | 0.383 | $ | 0.362 | ||
| FFO payout ratio(1) | 65.4 | % | 59.5 | % | ||
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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. |
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| As at | March 31, 2025 | December 31, 2024 | March 31, 2024 | ||||||
| Financing Metrics and Liquidity | |||||||||
| Total debt to gross book value(1) | 37.7 | % | 38.4 | % | 41.8 | % | |||
| Weighted average mortgage effective interest rate(2) | 3.16 | % | 3.11 | % | 2.84 | % | |||
| Weighted average mortgage term (years)(2) | 4.7 | 4.8 | 4.7 | ||||||
| Debt service coverage ratio (times)(1)(3) | 1.9x | 1.9x | 1.8x | ||||||
| Interest coverage ratio (times)(1)(3) | 3.3x | 3.3x | 3.3x | ||||||
| Cash and cash equivalents (000s)(4) | $ | 118,989 | $ | 136,243 | $ | 58,495 | |||
| Available borrowing capacity – Acquisition and Operating Facility (000s)(5) | $ | 195,572 | $ | 500,292 | $ | 254,657 | |||
| Capital | |||||||||
| Unitholders’ equity (000s) | $ | 8,989,395 | $ | 9,027,312 | $ | 9,374,475 | |||
| Net asset value (“NAV”) (000s)(1) | $ | 9,032,079 | $ | 9,042,068 | $ | 9,287,633 | |||
| Total number of units – diluted (000s)(6) | 162,562 | 162,927 | 169,501 | ||||||
| NAV per unit – diluted(1) | $ | 55.56 | $ | 55.50 | $ | 54.79 | |||
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| (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 $106,521 and $12,468 in Canada and Europe, respectively (December 31, 2024 – $122,941 and $13,302, respectively, March 31, 2024 – $37,331 and $21,164, respectively). | |
| (5) | Excludes an accordion option of $400,000 (December 31, 2024 – $200,000, March 31, 2024 – $200,000). | |
| (6) | Consists of Trust Units, which are classified as Unitholders’ Equity, as well as Exchangeable LP Units, deferred units (“DUs”), restricted unit rights (“RURs”) and performance unit rights (“PURs”), which are classified as liabilities. | |
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“We’re off to a solid start in 2025 on our mission to simplify the platform and upgrade our core Canadian apartment portfolio,” commented Mark Kenney, President and Chief Executive Officer. “So far this year, we’ve closed on $400 million of strategic dispositions in Canada and Europe, at prices that are at, or above, previously reported IFRS fair values at the time of negotiation, and we’ve committed to approximately $522 million in additional divestment from the Netherlands, which we’re expecting to complete in the third quarter. We’re pleased to have reinvested $137 million of the net proceeds into the acquisition of high-quality, recently constructed mid-market rental properties at prices that are meaningfully below replacement cost. We’ve also spent a further $88 million on our NCIB program to buy back CAPREIT’s Trust Units at significant discounts to NAV, which we’ve been continuing to substantiate by selling our non-core properties at premium pricing. This all underscores ongoing strength and stamina in the execution of our capital allocation strategy.”
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“Operationally, our Canadian residential occupancies improved since the previous quarter end, increasing to 97.9% as of March 31, 2025 on the total and same property portfolio,” added Stephen Co, Chief Financial Officer. “This was a result of CAPREIT’s vacancy mitigation strategies which we recalibrated in response to recent shifts in market dynamics, including refining and enhancing various marketing, incentive and retention initiatives, with a view to maintaining strong occupancies while optimizing revenue. Occupied AMR increased by 5.7% since the prior year period on a same property basis, which reflects the sizeable mark-to-market built into our long-standing, diversified portfolio, that protects our rent growth profile against the effects of shorter-term market swings.”
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“On the expense side, property operating costs were up due to elevated repairs and maintenance and utility costs, with higher weather-related expenses owing to a colder winter, primarily in Ontario and Québec,” continued Mr. Co. “We also had increased bad debt and advertising costs associated with changes in the rental marketplace, to which CAPREIT has been proactively responding. The net impact was a decrease in our same property NOI margin to 62.3% for the three months ended March 31, 2025. Our diluted FFO per unit was down by 3.9% to $0.585 for the current quarter, due to lower NOI predominantly from net disposition activity, partly offset by reduced interest expense and overhead costs, as well as accretive Trust Unit repurchases and cancellations under our NCIB program.”
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“Although the past few months have been subject to some turbulence, we’re ultimately operating within an industry that is inherently cyclical, and we’re well-equipped to proficiently handle this latest, transitory phase, as evidenced by our nearly 28-year track record,” added Mr. Kenney. “The pillars of our business remain strong, and the long-term fundamentals of the residential rental market in Canada are robust. With these healthy fundamentals in view, we continue to work towards improving our operational and financial results throughout the remainder of 2025.”
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SUMMARY OF Q1 2025 RESULTS OF OPERATIONS
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Strategic Initiatives Update
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- CAPREIT continues to invest in strategic opportunities that are accretive. For the three months ended March 31, 2025, CAPREIT acquired two properties with 281 suites in Canada for a total gross purchase price of $97.6 million (excluding transaction costs and other adjustments).
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- For the three months ended March 31, 2025, CAPREIT disposed of 1,190 suites, which were comprised of four non-core portfolios located in Canada; an MHC property with 176 sites located in Medicine Hat, Alberta; an office property located in Montréal, Québec; and 10 residential properties in the Netherlands with 415 suites. The gross sale price was $388.0 million, consisting of $252.6 million in Canada and $135.4 million in Europe (excluding transaction costs and other adjustments). CAPREIT is currently targeting the disposition of approximately $400 million of non-core Canadian properties in 2025.
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- In March 2025, CAPREIT received the TSX’s acceptance of its notice to proceed with a normal course issuer bid (“NCIB”), following expiry of the previous NCIB on March 24, 2025, (“2025-2026 NCIB”). During the three months ended March 31, 2025, CAPREIT purchased and cancelled approximately 0.6 million of Trust Units, under the NCIB program, at a weighted average purchase price of $42.79 per Trust Unit, for a total cost of $25.5 million (excluding the federal 2% tax on repurchases of Trust Units).
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- 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.
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Operating Results
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- On turnovers and renewals, monthly residential rents for the three months ended March 31, 2025 increased by 3.4% for the Canadian residential portfolio, compared to 4.1% for the three months ended March 31, 2024.
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- Same property Occupied AMR for the Canadian residential portfolio as at March 31, 2025 increased by 5.7% compared to March 31, 2024, while same property occupancy for the Canadian residential portfolio decreased to 97.9% (March 31, 2024 – 98.4%).
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- NOI for the same property portfolio increased by 2.6% for the three months ended March 31, 2025 compared to the same period last year. Additionally, NOI margin for the same property portfolio decreased to 62.3%, down 1.0%, for the three months ended March 31, 2025 compared to the same period last year.
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- Diluted FFO per unit was down 3.9% for the three months ended March 31, 2025, compared to the same period last year, primarily due to lost NOI from disposed properties, partially offset by additional NOI from acquired properties, lower interest expense on credit facilities, and lower trust expenses (excluding reorganization costs).
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Balance Sheet Highlights
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- As at March 31, 2025, CAPREIT’s financial position remains strong, with approximately $302.1 million of available Canadian liquidity, comprising $106.5 million of Canadian cash and cash equivalents and $195.6 million of available capacity on its Acquisition and Operating Facility, excluding the $400 million accordion option.
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- To date, CAPREIT completed financings totalling $68.7 million, with a weighted average term to maturity of 5.0 years and a weighted average interest rate of 3.58% per annum.
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- For the three months ended March 31, 2025 the overall carrying value of investment properties (excluding assets held for sale) increased by $73.2 million primarily due to acquisitions of $99.0 million, foreign currency translation adjustment of $46.7 million, and property capital investments of $43.6 million, which were partially offset by dispositions of $91.5 million and fair value loss of $24.6 million.
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- Diluted NAV per unit as at March 31, 2025 increased slightly to $55.56 from $55.50 as at December 31, 2024, primarily reflecting a decrease in the number of diluted units and stable NAV during Q1 2025.
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Subsequent Events
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- On April 2, 2025, CAPREIT announced that a subsidiary of ERES has entered into an agreement to sell entities owning 1,446 residential suites in the Netherlands for gross proceeds, net of estimated adjustments, of approximately $522.0 million. The proceeds will be paid in cash, with a portion to be used to repay associated mortgage principal outstanding and amounts outstanding on the ERES Credit Facility. Remaining net proceeds will be used for the payment of a special cash distribution of an estimated €0.80 per ERES Unit and ERES Class B LP Unit. Subject to the receipt of any regulatory approvals and satisfaction of closing conditions, the announced disposition is anticipated to close between early August and mid-September 2025.
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- Furthermore, ERES is currently working with its financial and real estate advisors in connection with the launch of a bid process for the balance of the ERES portfolio, whether in part or in full. Proposals are expected to be received in the third quarter of 2025, and the ERES Board, with assistance from its advisors, will determine which proposal(s), if any, achieve the objective of uncovering the maximum value of ERES’s remaining portfolio, and distributing the proceeds, net of wind-up costs, to ERES’s unitholders.
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- Subsequent to March 31, 2025, up to and including May 8, 2025, CAPREIT purchased and cancelled 1.5 million Trust Units under the 2025-2026 NCIB, at a weighted average purchase price of $41.35 per Trust Unit, for a total cost of $62.0 million (excluding the federal 2% tax on repurchases of Trust Units). These purchases were funded by cash on hand as at March 31, 2025.
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- On April 11, 2025, CAPREIT acquired an additional 102 suites in Montréal, Québec for a total gross purchase price of $39.7 million (excluding transaction costs and other adjustments).
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- On April 15, 2025, CAPREIT disposed of an additional 357 MHC sites in Moncton, New Brunswick for a total gross sale price of $12.5 million (excluding transaction costs and other adjustments). This disposition represents the last MHC property that was previously owned by CAPREIT and that was classified as assets held for sale as at March 31, 2025.
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OPERATIONAL AND FINANCIAL RESULTS
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Portfolio Occupied Average Monthly Rents
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| Total Portfolio | Same Property Portfolio(1) | ||||||||||||
| As at March 31, | 2025 | 2024 | 2025 | 2024 | |||||||||
| Occupied AMR | Occ. % | Occupied AMR | Occ. % | Occupied AMR | Occ. % | Occupied AMR | Occ. % | ||||||
| Total Canadian residential suites | $ | 1,677 | 97.9 | $ | 1,552 | 98.4 | $ | 1,656 | 97.9 | $ | 1,566 | 98.4 | |
| The Netherlands residential portfolio | € | 1,248 | 93.6 | € | 1,068 | 98.5 | € | 1,248 | 93.6 | € | 1,175 | 99.0 | |
| Total portfolio | 97.6 | 98.0 | 97.7 | 98.5 | |||||||||
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| (1) | Same property Occupied AMR and occupancy include all properties held as at March 31, 2024, but exclude properties disposed of or held for sale as at March 31, 2025. | |
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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.
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Occupancy for the total portfolio as at March 31, 2025 decreased by 0.4% to 97.6% compared to March 31, 2024. Occupancy for the total Canadian residential portfolio as at March 31, 2025 decreased by 0.5% to 97.9% compared to March 31, 2024. CAPREIT views this as a transitory vacancy trend influenced by a shift in the residential market dynamics. 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 total portfolio as at March 31, 2025 decreased by 4.9% to 93.6% compared to March 31, 2024, predominantly related to suites held vacant for dispositions.
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The weighted average gross rent per square foot for total Canadian residential suites was approximately $1.99 as at March 31, 2025, increased from $1.83 as at March 31, 2024.
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Canadian Residential Portfolio
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| For the Three Months Ended March 31, | 2025 | 2024 | ||
| Change in Monthly Rent | Turnovers and Renewals(1) | Change in Monthly Rent | Turnovers and Renewals(1) | |
| % | % | % | % | |
| Suite turnovers | 7.2 | 3.9 | 23.2 | 2.4 |
| Lease renewals | 2.9 | 41.8 | 3.0 | 45.0 |
| Weighted average of turnovers and renewals | 3.4 | 4.1 | ||
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| (1) | Percentage of suites turned over or renewed during the period is based on the total weighted average number of residential suites (excluding MHC sites) held during the period. |
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The Netherlands Residential Portfolio
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| For the Three Months Ended March 31, | 2025 | 2024 | ||
| Change in Monthly Rent | Turnovers and Renewals(1) | Change in Monthly Rent | Turnovers and Renewals(1) | |
| % | % | % | % | |
| Suite turnovers(2) | 19.5 | 1.3 | 15.6 | 3.1 |
| Lease renewals | — | — | — | — |
| Weighted average of turnovers and renewals | 19.5 | 15.6 | ||
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| (1) | Percentage of suites turned over during the period is based on the total weighted average number of the Netherlands residential suites held during the period. | |
| (2) | On turnover, rents increased by 19.5% on 1.4% of the Netherlands same property residential portfolio for the three months ended March 31, 2025 compared to an increase of 17.6% on 3.7% of the Netherlands same property residential portfolio for the three months ended March 31, 2024. Same property residential portfolio for turnover purposes includes all properties continuously owned since December 31, 2023, and excludes properties and suites disposed of as at March 31, 2025. |
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As the Netherlands lease renewals occur once a year in July, there were no changes in lease renewals for the three months ended March 31, 2025 and March 31, 2024. For rent renewal increases due to indexation beginning on July 1, 2025, ERES served tenant notices to 85% of the residential portfolio, across which the average rental increase due to indexation and household income adjustment is 4.0%. In the prior year period, ERES renewed leases for 94% of the residential portfolio, across which the average rental increase due to indexation and household income adjustment was 5.5%.
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Net Operating Income
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Same properties for the three months ended March 31, 2025 are defined as all properties owned by CAPREIT continuously since December 31, 2023, and therefore do not take into account the impact on performance of acquisitions or dispositions completed during 2024 or 2025, or properties that are classified as held for sale as at March 31, 2025.
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| ($ Thousands) | Total NOI | Same Property NOI | ||||||||||||||||
| For the Three Months Ended March 31, | 2025 | 2024 | %(1) | 2025 | 2024 | %(1) | ||||||||||||
| Operating Revenues | ||||||||||||||||||
| Rental revenues | $ | 240,803 | $ | 262,457 | (8.3 | ) | $ | 227,685 | $ | 218,066 | 4.4 | |||||||
| Other(2) | 12,508 | 13,359 | (6.4 | ) | 11,833 | 11,538 | 2.6 | |||||||||||
| Total operating revenues | $ | 253,311 | $ | 275,816 | (8.2 | ) | $ | 239,518 | $ | 229,604 | 4.3 | |||||||
| Operating expenses | ||||||||||||||||||
| Realty taxes | $ | (24,804 | ) | $ | (24,819 | ) | (0.1 | ) | $ | (23,356 | ) | $ | (22,155 | ) | 5.4 | |||
| Utilities | (23,561 | ) | (23,161 | ) | 1.7 | (22,687 | ) | (20,382 | ) | 11.3 | ||||||||
| Other(3) | (46,927 | ) | (50,787 | ) | (7.6 | ) | (44,310 | ) | (41,737 | ) | 6.2 | |||||||
| Total operating expenses(4) | $ | (95,292 | ) | $ | (98,767 | ) | (3.5 | ) | $ | (90,353 | ) | $ | (84,274 | ) | 7.2 | |||
| NOI | $ | 158,019 | $ | 177,049 | (10.7 | ) | $ | 149,165 | $ | 145,330 | 2.6 | |||||||
| NOI margin | 62.4 | % | 64.2 | % | 62.3 | % | 63.3 | % | ||||||||||
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| (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 (decreased) by approximately (3.7)% and 7.0%, 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 ended March 31, 2025 and March 31, 2024:
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| ($ Thousands) | ||||||
| For the Three Months Ended March 31, | 2025 | 2024 | ||||
| Same property NOI | $ | 149,165 | $ | 145,330 | ||
| NOI from acquisitions | 7,350 | 224 | ||||
| NOI from dispositions and assets held for sale | 1,504 | 31,495 | ||||
| Total NOI | $ | 158,019 | $ | 177,049 | ||
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Operating Revenues
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For the three months ended March 31, 2025, same property operating revenues increased by $9.9 million, primarily driven by increases in monthly rents on turnovers and renewals, partially offset by a decrease in occupancy. Total operating revenues decreased by $22.5 million during the same period, mainly due to lost revenue from dispositions totalling $43.0 million, primarily due to the MHC and ERES portfolio dispositions in 2024, partially offset by revenue generated from acquisitions totalling $10.6 million and operational growth of $9.9 million, primarily on the same property operating portfolio as at March 31, 2025.
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Operating Expenses
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For the three months ended March 31, 2025, realty taxes for same property portfolio increased compared to the same period last year, primarily due to increases in realty tax rates in Ontario and British Columbia.
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For the three months ended March 31, 2025, electricity and natural gas costs increased year-over-year, mainly due to increased consumption driven by colder weather in Ontario and Québec during the first quarter of 2025. In addition, natural gas expenses increased year-over-year, primarily due to higher rates in Ontario and Québec. Furthermore, total property portfolio water costs decreased year-over-year, mainly due to the disposition of the majority of the MHC portfolio in 2024.
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For the three months ended March 31, 2025, other operating expenses for the total property portfolio decreased by $3.9 million, or 7.6%, when compared to the same period last year, primarily due to the disposition of the majority of the MHC portfolio in 2024.
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For the three months ended March 31, 2025, other operating expenses for the same property portfolio increased by $2.6 million, or 6.2%, when compared to the same period last year, primarily due to the following reasons:
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- higher R&M costs in Québec and Ontario of $0.7 million and $0.5 million, respectively, primarily driven by weather-related maintenance costs and higher in-suite and common area maintenance needs. In addition, there were higher snow removal costs in Ontario of $0.2 million due to the more severe winter weather compared to the prior period;
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- higher expected credit losses of $0.5 million due to delays in regulatory processes in Ontario, as well as factors such as the rising cost of living and elevated past due balances not being cleared by prior tenants across most Canadian regions; and
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- higher advertising costs of $0.3 million across most Canadian regions to combat the increase in vacancy due to general rental market conditions.
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SUBSEQUENT EVENTS
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The table below summarizes the acquisition of an investment property completed subsequent to March 31, 2025:
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| ($ Thousands) | |||||
| Acquisition Date | Suite Count | Region | Gross Purchase Price(1) | ||
| April 11, 2025 | 102 | Montréal, QC | $ | 39,725 | |
| Total | 102 | $ | 39,725 | ||
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| (1) | Gross purchase price is the amount stated in the purchase and sale agreement and excludes transaction costs and other adjustments. |
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The table below summarizes the disposition of an investment property completed subsequent to March 31, 2025:
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| ($ Thousands) | |||||
| Disposition Date | Site Count | Region | Gross Sale Price(1) | ||
| April 15, 2025(2) | 357 | Moncton, NB | $ | 12,500 | |
| Total | 357 | $ | 12,500 | ||
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| (1) | Gross sale price is the amount stated in the purchase and sale agreement and excludes transaction costs and other adjustments. | |
| (2) | Relates to the remaining MHC property that was classified as assets held for sale as at March 31, 2025. |
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ADDITIONAL INFORMATION
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More detailed information and analysis is included in CAPREIT’s condensed consolidated interim financial statements and MD&A for the three months ended March 31, 2025, which have been filed on SEDAR+ and can be viewed at www.sedarplus.ca under CAPREIT’s profile or on CAPREIT’s website on the investor relations page at www.capreit.ca.
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Conference Call
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A conference call, hosted by CAPREIT’s senior management team, will be held on Friday, May 9, 2025 at 9:00 am ET. The telephone numbers for the conference call are: Canadian Toll Free: +1 (833) 950-0062, International: +1 (929) 526-1599. The conference call access code is 506253.
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The call will also be webcast live and accessible through the CAPREIT website at www.capreit.ca – click on “For Investors” and follow the link at the top of the page. A replay of the webcast will be available for one year after the webcast at the same link.
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The slide presentation to accompany management’s comments during the conference call will be available on the CAPREIT website an hour and a half prior to the conference call.
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About CAPREIT
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CAPREIT is Canada’s largest publicly traded provider of quality rental housing. As at March 31, 2025, CAPREIT owns approximately 46,800 residential apartment suites and townhomes that are well-located across Canada and the Netherlands, with a total fair value of approximately $14.9 billion. For more information about CAPREIT, its business and its investment highlights, please visit our website at www.capreit.ca and our public disclosures which can be found under our profile at www.sedarplus.ca.
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Non-IFRS Measures
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CAPREIT prepares and releases unaudited condensed consolidated interim financial statements and audited consolidated annual financial statements in accordance with IFRS. In this and other earnings releases and investor conference calls, as a complement to results provided in accordance with IFRS, CAPREIT discloses measures not recognized under IFRS which do not have standard meanings prescribed by IFRS. These include FFO, NAV, Total Debt, Gross Book Value, and Adjusted Earnings Before Interest, Tax, Depreciation, Amortization and Fair Value (“Adjusted EBITDAFV”) (the “Non-IFRS Financial Measures”), as well as diluted FFO per unit, diluted NAV per unit, FFO payout ratio, Total Debt to Gross Book Value, Debt Service Coverage Ratio and Interest Coverage Ratio (the “Non-IFRS Ratios” and together with the Non-IFRS Financial Measures, the “Non-IFRS Measures”). These Non-IFRS Measures are further defined and discussed in the MD&A released on May 8, 2025, which should be read in conjunction with this press release. Since these measures and related per unit amounts are not recognized under IFRS, they may not be comparable to similar measures reported by other issuers. CAPREIT presents Non-IFRS Measures because management believes Non-IFRS Measures are relevant measures of the ability of CAPREIT to earn revenue and to evaluate its performance, financial condition and cash flows. These Non-IFRS Measures have been assessed for compliance with National Instrument 52-112 and a reconciliation of these Non-IFRS Measures is included in this press release below. The Non-IFRS Measures should not be construed as alternatives to net income or cash flows from operating activities determined in accordance with IFRS as indicators of CAPREIT’s performance or the sustainability of CAPREIT’s distributions.
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Cautionary Statements Regarding Forward-Looking Statements
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Certain statements contained in this press release constitute forward-looking information within the meaning of applicable securities laws. Forward-looking information may relate to CAPREIT’s 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, development and development opportunities, financial results, taxes, plans and objectives of, or involving, CAPREIT. Particularly, statements regarding CAPREIT’s future results, performance, achievements, prospects, costs, opportunities and financial outlook, including those relating to acquisition, disposition 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 “may”, “will”, “would”, “should”, “could”, “likely”, “expect”, “plan”, “anticipate”, “believe”, “intend”, “estimate”, “forecast”, “predict”, “potential”, “project”, “budget”, “continue” 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 and Dutch economies will generally experience growth, which, however, may be adversely impacted by the geopolitical risks, global economy, inflation and elevated interest rates, potential health crises and their direct or indirect impacts on the business of CAPREIT, including CAPREIT’s ability to enforce leases, perform capital expenditure work, increase rents and apply for above guideline increases (“AGIs”), obtain financings at favourable interest rates; that Canada Mortgage and Housing Corporation (“CMHC”) 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; 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 effectively manage price pressures relating to its energy usage; and, with respect to CAPREIT’s financial outlook regarding capital investments, assumptions respecting projected costs of construction and materials, availability of trades, the cost and availability of financing, CAPREIT’s 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 and information that is currently available to management, which are subject to change, management believes these statements have been prepared on a reasonable basis, reflecting CAPREIT’s best estimates and judgements. However, there can be no assurance actual results, terms or timing 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 CAPREIT’s control, that may cause CAPREIT’s or the industry’s 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: rent control and residential tenancy regulations, general economic conditions, privacy, cyber security and data governance risks, availability and cost of debt, acquisitions and dispositions, leasing risk, valuation risk, liquidity and price volatility of units of CAPREIT (“Trust Units”), catastrophic events, climate change, taxation-related risks, energy costs, environmental matters, vendor management and third-party service providers, operating risk, talent management and human resources shortages, public health crises, other regulatory compliance risks, litigation risk, CAPREIT’s investment in European Residential Real Estate Investment Trust (“ERES”), potential conflicts of interest, investment restrictions, lack of diversification of investment assets, geographic concentration, illiquidity of real property, capital investments, dependence on key personnel, property development, adequacy of insurance and captive insurance, competition for residents, controls over disclosures and financial reporting, the nature of Trust Units, dilution, distributions and foreign operation and currency risks. There can be no assurance that the expectations of CAPREIT’s management will prove to be correct. These risks and uncertainties are more fully described in regulatory filings, including CAPREIT’s Annual Information Form, which can be obtained on SEDAR+ at www.sedarplus.ca, under CAPREIT’s profile, as well as under the “Risks and Uncertainties” section of the MD&A released on May 8, 2025. The information in this press release is based on information available to management as of May 8, 2025. Subject to applicable law, CAPREIT does not undertake any obligation to publicly update or revise any forward-looking information.
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SOURCE: Canadian Apartment Properties Real Estate Investment Trust
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| CAPREIT Mr. Mark Kenney President & Chief Executive Officer (416) 861-9404 | CAPREIT Mr. Stephen Co Chief Financial Officer (416) 306-3009 | CAPREIT Mr. Julian Schonfeldt Chief Investment Officer (647) 535-2544 |
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SELECTED NON-IFRS MEASURES
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A reconciliation of net income to FFO is as follows:
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| ($ Thousands, except per unit amounts) | ||||||
| For the Three Months Ended March 31, | 2025 | 2024 | ||||
| Net income | $ | 7,985 | $ | 182,113 | ||
| Adjustments: | ||||||
| Fair value adjustments of investment properties | 24,787 | (71,319 | ) | |||
| Fair value adjustments of financial instruments | 13,006 | 573 | ||||
| Interest expense on Exchangeable LP Units | 554 | 603 | ||||
| Loss (gain) on non-controlling interest | 19,121 | (9,640 | ) | |||
| FFO impact attributable to ERES units held by non-controlling unitholders(1) | (2,227 | ) | (4,716 | ) | ||
| Deferred income tax expense (recovery) | 3,781 | (664 | ) | |||
| Loss on foreign currency translation | 2,681 | 5,970 | ||||
| Transaction costs and other activities(2) | 11,904 | 4,681 | ||||
| Net loss (gain) on derecognition of debt | 3,553 | (2,279 | ) | |||
| Tax related to ERES dispositions and tax authority reassessments(3) | 5,720 | 643 | ||||
| Lease principal repayments | (335 | ) | (311 | ) | ||
| Reorganization, senior management termination, and retirement costs(4) | 4,847 | — | ||||
| Unit-based compensation amortization recovery relating to ERES Unit Option Plan (“UOP”) forfeitures upon senior management termination(5) | — | (2,284 | ) | |||
| FFO | $ | 95,377 | $ | 103,370 | ||
| Weighted average number of units (000s) – diluted | 162,981 | 169,796 | ||||
| Total distributions declared | $ | 62,400 | $ | 61,523 | ||
| FFO per unit – diluted(6) | $ | 0.585 | $ | 0.609 | ||
| FFO payout ratio(7) | 65.4 | % | 59.5 | % | ||
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| (1) | The adjustment is based on applying the 35% weighted average ownership held by ERES non-controlling unitholders (March 31, 2024 – 35%). | |
| (2) | Primarily includes transaction costs and other adjustments on dispositions and amortization of property, plant and equipment (“PP&E”), right-of-use asset and enterprise resource planning implementation costs. | |
| (3) | Included in current income tax expense. | |
| (4) | For the three months ended March 31, 2025, includes $157 of accelerated vesting of previously granted CAPREIT unit-based compensation (for the three months ended March 31, 2024 ‑ $nil) and $603 of accelerated vesting of ERES RURs that vested on January 7, 2025 (for the three months ended March 31, 2024 ‑ $nil). | |
| (5) | During the three months ended March 31, 2024, three million ERES unit options were forfeited upon senior management termination totalling $2,284. | |
| (6) | FFO per unit – diluted is calculated using FFO during the period divided by weighted average number of units – diluted. | |
| (7) | FFO payout ratio is calculated using total distributions declared during the period divided by FFO. |
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Reconciliation of Total Debt and Total Debt Ratios:
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| ($ Thousands) | |||||||||
| As at | March 31, 2025 | December 31, 2024 | March 31, 2024 | ||||||
| Mortgages payable – non-current | $ | 5,243,972 | $ | 5,343,549 | $ | 5,832,546 | |||
| Mortgages payable – current | 530,187 | 644,320 | 845,178 | ||||||
| Mortgages payable related to assets held for sale | — | — | 7,842 | ||||||
| Total mortgages payable | $ | 5,774,159 | $ | 5,987,869 | $ | 6,685,566 | |||
| Credit facilities payable – non-current | 25,469 | 4,145 | 483,238 | ||||||
| Total Debt | $ | 5,799,628 | $ | 5,992,014 | $ | 7,168,804 | |||
| Total Assets | $ | 15,323,496 | $ | 15,576,093 | $ | 17,111,296 | |||
| Add: Accumulated amortization of PP&E | 44,712 | 43,164 | 46,569 | ||||||
| Gross Book Value(1) | $ | 15,368,208 | $ | 15,619,257 | $ | 17,157,865 | |||
| Total Debt to Gross Book Value(2) | 37.7 | % | 38.4 | % | 41.8 | % | |||
| Total Mortgages Payable to Gross Book Value(3) | 37.6 | % | 38.3 | % | 39.0 | % | |||
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| (1) | Gross Book Value (“GBV”) is defined by CAPREIT’s Declaration of Trust. | |
| (2) | Total Debt to Gross Book Value is calculated using total debt divided by gross book value. | |
| (3) | Total Mortgages Payable to Gross Book Value is calculated using total mortgages payable divided by gross book value. |
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Reconciliation of Net Income (Loss) to Adjusted EBITDAFV:
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| ($ Thousands) | |||||||||
| For the Trailing 12 Months Ended | March 31, 2025 | December 31, 2024 | March 31, 2024 | ||||||
| Net income (loss) | $ | 118,614 | $ | 292,742 | $ | (126,234 | ) | ||
| Adjustments: | |||||||||
| Interest and other financing costs | 213,424 | 220,162 | 215,678 | ||||||
| Interest on Exchangeable LP Units | 2,380 | 2,429 | 2,388 | ||||||
| Total current income tax expense and deferred income tax expense (recovery), net | 48,371 | 39,439 | (29,088 | ) | |||||
| Amortization of PP&E and right-of-use asset | 6,382 | 6,363 | 6,138 | ||||||
| Total unit-based compensation amortization expense, net | 9,985 | 6,306 | 5,570 | ||||||
| EUPP unit-based compensation expense | (496 | ) | (523 | ) | (548 | ) | |||
| Fair value adjustments of investment properties | 37,620 | (58,486 | ) | 657,880 | |||||
| Fair value adjustments of financial instruments | 18,427 | 5,994 | (13,249 | ) | |||||
| Net gain on derecognition of debt | 2,820 | (3,012 | ) | (2,215 | ) | ||||
| Loss (gain) on non-controlling interest | 147,287 | 118,526 | (75,959 | ) | |||||
| Loss on foreign currency translation | 23,493 | 26,782 | 5,649 | ||||||
| Transaction costs and other adjustments on dispositions and other | 29,373 | 22,169 | 10,663 | ||||||
| Adjusted EBITDAFV | $ | 657,680 | $ | 678,891 | $ | 656,673 | |||
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Debt Service Coverage Ratio
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| ($ Thousands) | |||||||||
| For the Trailing 12 Months Ended | March 31, 2025 | December 31, 2024 | March 31, 2024 | ||||||
| Contractual interest on mortgages payable(1)(2) | $ | 171,652 | $ | 171,254 | $ | 163,950 | |||
| Amortization of deferred financing costs, fair value adjustments and OCI hedge interest on mortgages payable(1) | 9,204 | 8,025 | 6,129 | ||||||
| Contractual interest on credit facilities payable, net(2) | 18,702 | 25,049 | 28,008 | ||||||
| Amortization of deferred financing costs on credit facilities payable | 641 | 731 | 906 | ||||||
| Mortgage principal repayments(1) | 151,385 | 153,237 | 157,046 | ||||||
| Debt service payments | $ | 351,584 | $ | 358,296 | $ | 356,039 | |||
| Adjusted EBITDAFV | $ | 657,680 | $ | 678,891 | $ | 656,673 | |||
| Debt service coverage ratio (times) | 1.9x | 1.9x | 1.8x | ||||||
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| (1) | Includes mortgages payable related to assets held for sale, as applicable. | |
| (2) | Includes net cross-currency interest rate (“CCIR”) and interest rate (“IR”) swap interest, offsetting contractual interest. |
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Interest Coverage Ratio
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| ($ Thousands) | |||||||||
| For the Trailing 12 Months Ended | March 31, 2025 | December 31, 2024 | March 31, 2024 | ||||||
| Contractual interest on mortgages payable(1)(2) | $ | 171,652 | $ | 171,254 | $ | 163,950 | |||
| Amortization of deferred financing costs, fair value adjustments and OCI hedge interest on mortgages payable(1) | 9,204 | 8,025 | 6,129 | ||||||
| Contractual interest on credit facilities payable, net(2) | 18,702 | 25,049 | 28,008 | ||||||
| Amortization of deferred financing costs on credit facilities payable | 641 | 731 | 906 | ||||||
| Interest Expense | $ | 200,199 | $ | 205,059 | $ | 198,993 | |||
| Adjusted EBITDAFV | $ | 657,680 | $ | 678,891 | $ | 656,673 | |||
| Interest coverage ratio (times) | 3.3x | 3.3x | 3.3x | ||||||
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| (1) | Includes mortgages payable related to assets held for sale, as applicable. | |
| (2) | Includes net CCIR and IR swap interest, offsetting contractual interest. |
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Reconciliation of Unitholders’ Equity to NAV:
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| ($ Thousands, except per unit amounts) | |||||||||
| As at | March 31, 2025 | December 31, 2024 | March 31, 2024 | ||||||
| Unitholders’ equity | $ | 8,989,395 | $ | 9,027,312 | $ | 9,374,475 | |||
| Adjustments: | |||||||||
| Exchangeable LP Units | 62,329 | 70,220 | 76,578 | ||||||
| Unit-based compensation financial liabilities excluding ERES’s Restricted Unit Plan and ERES’s UOP | 24,067 | 23,701 | 22,926 | ||||||
| Deferred income tax liability | 24,981 | 32,076 | 50,114 | ||||||
| Deferred income tax asset | (86 | ) | (11,793 | ) | (20,837 | ) | |||
| Derivative assets – non-current | (7,500 | ) | (8,813 | ) | (36,441 | ) | |||
| Derivative assets – current | (450 | ) | (10,263 | ) | (8,167 | ) | |||
| Derivative liabilities – current | 3,639 | 3,684 | 1,227 | ||||||
| Adjustment to ERES non-controlling interest(1) | (64,296 | ) | (84,056 | ) | (172,242 | ) | |||
| NAV | $ | 9,032,079 | $ | 9,042,068 | $ | 9,287,633 | |||
| Diluted number of units | 162,562 | 162,927 | 169,501 | ||||||
| NAV per unit – diluted(2) | $ | 55.56 | $ | 55.50 | $ | 54.79 | |||
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| (1) | CAPREIT accounts for the non-controlling interest in ERES as a liability, measured at the redemption amount, as defined by the ERES Declaration of Trust, of ERES’s units not owned by CAPREIT. The adjustment is made so that the non-controlling interest in ERES is measured at ERES’s disclosed NAV, rather than the redemption amount. The table below summarizes the calculation of adjustment to ERES non-controlling interest as at March 31, 2025, December 31, 2024 and March 31, 2024. |
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| ($ Thousands) | |||||||||
| As at | March 31, 2025 | December 31, 2024 | March 31, 2024 | ||||||
| ERES’s NAV | € | 462,904 | € | 486,259 | € | 676,778 | |||
| Ownership by ERES non-controlling interest | 35 | % | 35 | % | 35 | % | |||
| Closing foreign exchange rate | 1.55329 | 1.49288 | 1.46162 | ||||||
| Impact to NAV due to ERES’s non-controlling unitholders | $ | 251,658 | $ | 254,074 | $ | 346,217 | |||
| Less: ERES units held by non-controlling unitholders | (187,362 | ) | (170,018 | ) | (173,975 | ) | |||
| Adjustment to ERES non-controlling interest | $ | 64,296 | $ | 84,056 | $ | 172,242 | |||
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| (2) | NAV per unit – diluted is calculated using NAV as at period end divided by diluted number of units. |
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