CAPREIT announced it has completed the disposition of its 50 per cent non-managing interest in three jointly owned Ottawa rental properties. Described by CAPREIT as “off-strategy, value-add assets,” the three buildings totalling 1,150 suites were constructed between 1969 and 1981 and would require ongoing capital expenditure to support their current growth profiles.
“CAPREIT’s disposition of its non-managing share in these three mature properties provides the means to act on more accretive, strategically-aligned opportunities that will maximize value for our Unitholders,” said Mark Kenney, President and CEO. “We are selling at a strong capitalization rate in the mid 3 per cent range, while also progressing on our asset and market repositioning objectives.”
CAPREIT’s 50 per cent share in the three Ottawa rental properties was sold for $136.25 million (excluding disposition costs) in addition to its share of the combined balance of $38.7 million remaining on the mortgage. Net cash proceeds for the sale will be redeployed toward accretive new-build opportunities as well as CAPREIT’s “value-enhancing” NCIB program.
“We continue to make active strides on CAPREIT’s capital refresh and asset management initiatives, comprised of selling non-strategic properties at or above IFRS fair values, and redirecting proceeds toward the acquisition of our Trust Units at significant discounts to IFRS fair value,” added Julian Schonfeldt, Chief Investment Officer. “In 2022, we invested $245 million in our NCIB program at an attractive weighted average purchase price of $45 per Trust Unit, crystallizing the meaningful disconnect between our disposition values and our Trust Unit prices, that we will continue to arbitrage for as long as it remains accretive to net asset value.”
CAPREIT currently owns or has interests in approximately 65,000 residential apartment suites, townhomes and manufactured housing community sites across Canada and the Netherlands, with approximately $17 billion of assets under management globally.
For more information visit www.capreit.ca
