CAPREIT Announces Strong First Quarter Results for 2012
Sustainable Growth in NFFO Continues
(firmenpresse) - TORONTO, ONTARIO -- (Marketwire) -- 05/09/12 -- Canadian Apartment Properties Real Estate Investment Trust ("CAPREIT") (TSX: CAR.UN) announced today strong operating and financial results for the three months ended March 31, 2012.
"The strong operating and financial performance demonstrated in 2011 continued in the first quarter, and we are confident we will generate another year of record results in 2012," commented Thomas Schwartz, President and Chief Executive Officer. "We are also continuing to strengthen and expand our property portfolio, and look for further accretive growth opportunities going forward."
Operating Revenues
For the three months ended March 31, 2012, total operating revenues increased by 10.3% compared to the same period last year primarily due to the contribution from 2011 acquisitions and increased average monthly rents. Ancillary revenues, such as parking, laundry and antenna income, rose by 1.1% for the three months ended March 31, 2012 as Management continued its focus on maximizing the revenue potential of its property portfolio.
CAPREIT's annualized net rental revenue run-rate based on the average monthly rents in place and CAPREIT's share of residential suites and sites as at March 31, 2012 increased to $362.6 million, up 11.4% from $325.5 million as of March 31, 2011. Net rental revenue net of dispositions for the twelve months ended March 31, 2012 was $350.4 million (2011 - $324.7 million).
Average monthly rents increased by 1.7% as at March 31, 2012, compared to the same period last year while occupancy remained strong at 98.3% due to ongoing successful sales and marketing strategies and continued strength in the residential rental sector in the majority of CAPREIT's regional markets.
The higher rate of growth in average monthly rents on lease renewals during the period is primarily due to the higher guideline increases for 2012 (Ontario - 3.1%, British Columbia - 4.3%), which compares more favourably to the permitted guideline increases in 2011 (Ontario - 0.7%, British Columbia - 2.3%) and above guideline increases ("AGI") applied. Management continues to pursue applications for AGIs where it believes increases are supported by market conditions above the annual guideline to raise average monthly rents on lease renewals.
Operating Expenses
For the three months ended March 31, 2012, operating expenses as a percentage of operating revenues improved to 44.6% compared to 46.1% for the same period last year. The improvement is primarily due to: (i) the diversification of the portfolio into regions with lower taxation rates, (ii) lower heating costs, and (iii) successful energy-saving initiatives and enhanced procurement strategies.
Net Operating Income
Overall NOI improved in the current quarter by $6.2 million or 13.3% and the NOI margin increased to 55.4% from 53.9% for the same period last year due to the combination of higher revenues and 2011 acquisitions, as well as lower operating expenses as a percentage of revenues.
As of March 31, 2012, CAPREIT has generated 25 consecutive quarters of stable or improved year-over-year NOI growth for stabilized properties demonstrating Management's strong operating and financing strategies. For the three months ended March 31, 2012, operating revenues for stabilized suites and sites increased 1.8% while operating costs decreased 2.8% compared to the same period last year. As a result, stabilized NOI increased by 5.7% for the three months ended March 31, 2012.
Financial Strength
Management believes CAPREIT's strong balance sheet and liquidity position will enable it to continue to take advantage of acquisition and property capital investment opportunities over the long term.
CAPREIT is achieving its financing goals as demonstrated by the following key indicators:
Property Capital Investment Plan
During the first three months of 2012 CAPREIT made property capital investments of $13.2 million as compared to $12.8 million for the same period last year.
Property capital investments include suite improvements, common areas and equipment, which generally tend to increase NOI more quickly. CAPREIT continues to invest in energy-saving initiatives, including boilers, energy-efficient lighting systems, and water-saving programs, which permit CAPREIT to mitigate potentially higher increases in utility and R&M costs and significantly improve overall portfolio NOI.
Subsequent Events
On April 26, 2012, CAPREIT announced it had agreed to sell 6,850,000 Units at $22.75 per Unit for aggregate gross proceeds of $155.8 million to a syndicate of underwriters on a bought-deal basis. CAPREIT has granted the underwriters an over-allotment option, exercisable in whole or in part up to 30 days after closing, to purchase up to an additional 900,000 Units. The closing of the Offering is expected to take place on or about May 17, 2012.
Also on April 26, 2012, CAPREIT announced it had entered into an agreement (the "Asset Purchase Agreements") with Starlight Investments Ltd. to acquire 3,562 apartment suites in 14 properties in the Greater Toronto Area, Southwestern Ontario, Montreal Region, Quebec City and Halifax for an aggregate purchase price of approximately $455.0 million upon the closing of an acquisition transaction between, inter alia, Starlight and Transglobe Apartment Real Estate Investment Trust ("TGA REIT") (the "Transglobe Transaction"). The Acquisition Properties are to be funded by: i) the assumption of approximately $183.7 million in mortgages, with an effective weighted average stated interest of 3.99% and weighted average term to maturity of 2.8 years; ii) approximately $148.7 million from the net proceeds of the Offering; and iii) the balance of approximately $122.6 million from the Acquisition and Operating Facility. The transaction is expected to close on or about June 29, 2012. Completion of the TransGlobe Transaction is subject to the satisfaction of certain closing conditions with Starlight and the Other Purchasers, including, but not limited to the requirement to obtain TGA REIT's unitholder approval and receive certain lenders' consents.
Additional Information
More detailed information and analysis is included in CAPREIT's unaudited consolidated interim financial statements and MD&A for the three months ended March 31, 2012, which have been filed on SEDAR and can be viewed at under CAPREIT's profile or on CAPREIT's website on the investor relations page at .
Conference Call
A conference call hosted by Thomas Schwartz, President and CEO and Scott Cryer, Chief Financial Officer, will be held Thursday, May 10, 2012 at 10.00 am EST. The telephone numbers for the conference call are: Local/International: (416) 340-2218, North American Toll Free: (877) 240-9772.
A slide presentation to accompany Management's comments during the conference call will be available one hour and a half prior to the conference call. To view the slides, access the CAPREIT website at , click on "Investor Relations" and follow the link at the top of the page. Please log on at least 15 minutes before the call commences.
The telephone numbers to listen to the call after it is completed (Instant Replay) are local/international (905) 694-9451 or North American toll free (800) 408-3053. The Passcode for the Instant Replay is 9025605#. The Instant Replay will be available until midnight, May 17, 2012. The call and accompanying slides will also be archived on the CAPREIT website at . For more information about CAPREIT, its business and its investment highlights, please refer to our website at .
About CAPREIT
CAPREIT owns interests in multi-unit residential rental properties, including apartments, townhomes and manufactured home communities located in and near major urban centres across Canada. At March 31, 2012, CAPREIT had owning interests in 30,878 residential units, comprised of 29,545 residential suites and two Ontario manufactured home communities ("MHC") comprising 1,333 land lease sites. For more information about CAPREIT, its business and its investment highlights, please refer to our website at and our public disclosure which can be found under our profile at .
Non-IFRS Financial Measures
CAPREIT prepares and releases unaudited quarterly and audited consolidated annual financial statements prepared 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 also discloses and discusses certain non-IFRS financial measures, including Net Rental Revenue Run-Rate, NOI, FFO, NFFO and applicable per Unit amounts and payout ratios. These non-IFRS measures are further defined and discussed in the MD&A released on May 9, 2012, which should be read in conjunction with this press release. Since Net Rental Revenue Run-Rate, NOI, FFO and NFFO are not determined by IFRS, they may not be comparable to similar measures reported by other issuers. CAPREIT has presented such non-IFRS measures as Management believes these non-IFRS measures are relevant measures of the ability of CAPREIT to earn and distribute cash returns to Unitholders and to evaluate CAPREIT's performance. A reconciliation of Net Income and such non-IFRS measures including Adjusted Funds From Operations ("AFFO") is included in this press release. These non-IFRS measures should not be construed as alternatives to net income (loss) or cash flow from operating activities determined in accordance with IFRS as an indicator of CAPREIT's performance.
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 CAPREIT's future outlook and anticipated events or results and may include statements regarding the future financial position, business strategy, budgets, litigation, projected costs, capital investments, 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 and capital investment strategy 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", "should", "expect", "plan", "anticipate", "believe", "intend", "estimate", "predict", "potential", "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 economy will generally experience growth, however, may be adversely impacted by the global economy; that inflation will remain low; that interest rates will remain low in the medium term; 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 conditions within the real estate market, including competition for acquisitions, will become more favourable; 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 will grow at levels similar to the rate of inflation on renewal; that rental rates on turnovers will remain stable; 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, Management believes they are reasonable as of the date hereof, there can be no assurance actual results will be consistent with these forward-looking statements; 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 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: reporting investment properties at fair value, real property ownership, leasehold interests, co-ownerships, investment restrictions, operating risk, energy costs and hedging, environmental matters, insurance, capital investments, indebtedness, interest rate hedging, taxation, harmonization of federal goods and services tax and provincial sales tax, government regulations, controls over financial accounting, legal and regulatory concerns, the nature of units of CAPREIT ("Trust Units") and of CAPREIT's subsidiary, CAPREIT Limited Partnership ("Exchangeable Units") (collectively, the "Units"), unitholder liability, liquidity and price fluctuation of Units, dilution, distributions, participation in CAPREIT's distribution reinvestment plan, potential conflicts of interest, dependence on key personnel, general economic conditions, competition for residents, competition for real property investments, continued growth and risks related to acquisitions. There can be no assurance 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 , under CAPREIT's profile, as well as under Risks and Uncertainties section of the MD&A released on May 9, 2012. The information in this press release is based on information available to Management as of May 9, 2012. Subject to applicable law, CAPREIT does not undertake any obligation to publicly update or revise any forward-looking information.
SOURCE: Canadian Apartment Properties Real Estate Investment Trust
Contacts:
CAPREIT
Mr. Michael Stein
Chairman
(416) 861-5788
CAPREIT
Mr. Thomas Schwartz
President & CEO
(416) 861-9404
CAPREIT
Mr. Scott Cryer
Chief Financial Officer
(416) 861-5771
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Datum: 09.05.2012 - 15:05 Uhr
Sprache: Deutsch
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