/NOT FOR DISTRIBUTION TO UNITED
STATES NEWSWIRE SERVICES OR FOR DISSEMINATION IN
THE UNITED STATES/
WINNIPEG, MB, March 23,
2023 /CNW/ - Marwest Apartment Real Estate Investment
Trust (the "REIT") (TSXV: MAR.UN) reported financial results
for the year ended December 31, 2022.
This press release should be read in conjunction with the
REIT's Consolidated Financial Statements and Management's
Discussion and Analysis ("2022 Annual MD&A") for
the year ended December 31, 2022, which are available on the
REIT's website at www.marwestreit.com and
at www.sedar.com.
Mr. William Martens, Chief
Executive Officer and Trustee commented "We completed 2022 by
acquiring another property to add to our portfolio. The
continued demand from immigration and support by the federal
government will have a positive impact on the demand for
multi-family rentals. In addition, with the Bank of
Canada having raised interest
rates, home ownership costs have increased over the past year."
2022 Annual Highlights
- Reported funds from operations ("FFO") of $0.0796 per Unit for 2022, compared to
$0.0682 for 2021
- Reported adjusted funds from operations ("AFFO") of
$0.0694 per Unit for 2022, compared
to $0.0582 for 2021
- Reported Net Asset Value per Unit ("NAV") of
$1.44 at December 31, 2022 compared to $1.27 at December 31,
2021
- Same Property Net Operating Income ("NOI") (as defined
below) increased by 6.79% in 2022 compared to 2021
- Occupancy rate of 97.23% reported for the year ended
December 31, 2022
- Implemented a normal course issuer bid ("NCIB") on
March 31, 2022, whereby 164,000 Trust
Units ("Units") of the REIT were repurchased and cancelled
during 2022
- Acquisition of Prairie View Pointe, a 153 unit property located
in Winnipeg, Manitoba on
October 31, 2022, increasing unit
count to 516 units from 363 at December 31,
2021
- Weighted average months to debt maturity of 80.27 months
- Paid out the first monthly distribution on January 15, 2022, declared on December 31, 2021
Operations Summary
|
|
|
Year ended
December
31, 2022
|
Year ended
December
31, 2021
|
|
Portfolio
Operational Information
|
|
|
Number of
properties
|
|
4
|
3
|
|
Number of
suites
|
|
516
|
363
|
|
Average Occupancy Rate
to date
|
|
97.23 %
|
98.49 %
|
|
Average rental rate to
date
|
|
$1,511
|
$1,510
|
|
|
|
|
|
|
Same property Net
Operating Income
|
|
$
730,204
|
$
683,797
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months
ended
|
|
Year
ended
|
|
|
Financial
Summary
|
|
December 31,
2022
|
December 31,
2021
|
|
December 31,
2022
|
December 31,
2021
|
|
|
Property
revenue
|
|
$
2,253,104
|
$
1,407,646
|
|
$
7,170,916
|
$
3,339,846
|
|
|
Net Operating
Income
|
|
1,396,583
|
816,423
|
|
4,304,812
|
2,022,976
|
|
|
Net
income(loss)
|
|
(2,862,894)
|
4,359,805
|
|
3,401,418
|
9,215,064
|
|
|
FFO
|
|
391,997
|
370,730
|
|
1,558,117
|
824,005
|
|
|
FFO per unit
|
|
$
0.0201
|
$
0.0194
|
|
$
0.0796
|
$
0.0682
|
|
|
AFFO
|
|
325,927
|
314,040
|
|
1,358,089
|
704,205
|
|
|
AFFO per
unit
|
|
$
0.0167
|
$
0.0164
|
|
$
0.0694
|
$
0.0582
|
|
|
|
|
|
|
|
|
|
|
|
Debt
Metrics
|
|
|
As at December 31,
2022
|
|
|
As at December 31,
2021
|
|
|
Debt to Gross Book
Value
|
|
|
77.47 %
|
|
|
71.70 %
|
|
|
Weighted average
mortgage interest rate
|
3.01 %
|
|
|
2.82 %
|
|
|
Weighted average months
to debt maturity
|
80.27
|
|
|
82.47
|
|
|
Debt service coverage
ratio
|
|
|
1.25
|
|
|
1.35
|
|
Financial Summary
The REIT generated FFO and AFFO per Unit of $0.0796 and $0.0694
during the year ended December 31,
2022.
FFO and AFFO are defined in "Non-IFRS Measures" in the 2022
Annual MD&A.
|
Reconciliation of
Net Income to
FFO and AFFO
|
|
Three months
ended
December 31, 2022
|
Three months
ended
December 31, 2021
|
|
Year ended
December
31, 2022
|
Year ended
December
31, 2021
|
|
Net income
(loss)
|
|
$
(2,862,894)
|
$
4,359,805
|
|
$
3,401,418
|
$
9,215,064
|
|
Distribution on
Exchangeable Units
|
|
40,607
|
13,557
|
|
162,617
|
13,557
|
|
Fair value
adjustments
|
|
3,214,284
|
(4,002,632)
|
|
(2,005,918)
|
(8,404,616)
|
|
FFO
|
|
391,997
|
370,730
|
|
1,558,117
|
824,005
|
|
FFO per unit
|
|
$
0.0201
|
$
0.0194
|
|
$
0.0796
|
$
0.0682
|
|
Reconciliation of
FFO to AFFO
|
|
|
|
|
|
|
|
FFO
|
|
$
391,997
|
$
370,730
|
|
$
1,558,117
|
$
824,005
|
|
Capital
expenditures
|
|
(65,702)
|
(52,911)
|
|
(167,845)
|
(96,466)
|
|
Leasing
costs
|
|
(368)
|
(3,779)
|
|
(32,183)
|
(23,334)
|
|
AFFO
|
|
325,927
|
314,040
|
|
1,358,089
|
704,205
|
|
AFFO per
unit
|
|
$
0.0167
|
$
0.0164
|
|
$
0.0694
|
$
0.0582
|
|
|
|
|
|
|
|
|
|
NAV
|
December 31,
2022
|
December 31,
2021
|
|
Unitholders'
Equity
|
$
19,014,023
|
$
15,893,174
|
|
Exchangeable
Units
|
9,215,083
|
9,106,671
|
|
NAV
|
28,229,106
|
24,999,845
|
|
Trust
Units
|
8,667,564
|
8,831,564
|
|
Exchangeable
Units
|
10,841,274
|
10,841,274
|
|
Deferred
units
|
110,036
|
53,595
|
|
Total Units
outstanding
|
19,618,874
|
19,726,433
|
|
NAV per Unit
|
$
1.44
|
$
1.27
|
|
|
|
|
The overall increase in NAV from $1.27 at December 31,
2021 to $1.44 at December 31, 2022, was due to the implementation
of the NCIB, increase in market value of the Class B limited
partnership unit of MAR REIT LP, exchangeable on a one-for-one
basis (subject to customary anti-dilution adjustments) for a Unit,
accompanied by the increase in the valuation of the Element
property compared to 2021 and market conditions throughout all
properties.
Outlook
Management is focused on growing the portfolio and unitholder
value through increasing rental rates where the market allows,
future acquisition opportunities that will increase the overall
size and performance of the REIT, as well as maintaining a
manageable debt structure. The current debt of the REIT is
all fixed rates with an average remaining mortgage term of over six
years. The majority of the REIT's debt is CMHC insured.
Management believes the organic growth in NAV due to paydown of
debt over the mortgage terms is a positive outcome of the higher
leveraged position as well as lowering the REIT's debt to GBV ratio
and thereby increasing the NAV per Unit over time.
Management anticipates the demand for rental housing to continue
to grow in the coming quarters due to increasing immigration and
the affordability gap in rental vs. home ownership. With the
Bank of Canada increasing interest
rates, home ownership costs are continuing to rise. The
increase in the portfolio's operating costs due to inflation may be
offset by increases in rental rates, where the market allows, as 56
percent of the portfolio at December 31,
2022 is not under rent control.
About Marwest Apartment Real Estate Investment Trust
The REIT is an unincorporated open-ended trust governed by the
laws of the Province of Manitoba.
The REIT was formed to provide holders of Units with the
opportunity to invest in the Canadian multi-family rental sector
through the ownership of high-quality income-producing properties,
with an initial focus on stable markets throughout Western Canada.
Forward-looking Statements
The information in this news release includes certain
information and statements about management's views of future
events, expectations, plans and prospects that constitute
forward–looking statements. These statements are based upon
assumptions that are subject to significant risks and
uncertainties. Because of these risks and uncertainties and
as a result of a variety of factors, the actual results,
expectations, achievements or performance may differ materially
from those anticipated and indicated by these forward–looking
statements. A number of factors could cause actual results to
differ materially from these forward–looking statements, including
the risks described in the REIT's latest annual information form
and management's discussion and analysis. The payment of cash
distributions will be dependent upon a number of factors, including
but not limited to the financial performance, financial condition
and financial requirements of the REIT. Although management
of the REIT believes that the expectations reflected in
forward–looking statements are reasonable, it can give no
assurances that the expectations of any forward–looking statements
will prove to be correct. Except as required by law, the REIT
disclaims any intention and assumes no obligation to update or
revise any forward–looking statements to reflect actual results,
whether as a result of new information, future events, changes in
assumptions, changes in factors affecting such forward–looking
statements or otherwise.
Neither the TSXV nor its Regulation Services Provider (as that
term is defined in the policies of the TSXV) accepts responsibility
for the adequacy or accuracy of this news release.
The Units are not registered under the United States Securities
Act of 1933, as amended (the "U.S. Securities Act") and may not be
offered or sold within the United
States or to or for the account or benefit of U.S. persons,
except in certain transactions exempt from the registration
requirements of the U.S. Securities Act. This press release does
not constitute an offer to sell, or the solicitation of an offer to
buy, securities of the REIT in the United
States or in any other jurisdiction.
Notice with respect to Non-IFRS Measures Disclosure
The REIT's financial statements are prepared in accordance with
IFRS. In addition to IFRS measures, this news release and the
REIT's 2022 Annual MD&A disclose certain non-IFRS financial
measures that are commonly used by Canadian real estate investment
trusts as an indicator of performance. Non-IFRS measures and
ratios includes Net Operating Income ("NOI"),
Debt-Service Coverage Ratio, FFO, AFFO, FFO per Unit, AFFO per
Unit, and NAV per Unit.
Management believes that these measures are helpful to investors
because they are widely recognized measures of the REIT's
performance and provide a relevant basis for comparison among real
estate entities. These non-IFRS financial measures are not
defined under IFRS and are not intended to represent financial
performance, financial position or cash flows for the period and
should not be viewed as an alternative to net income, cash flow
from operations or other measures of financial performance
calculated in accordance with IFRS.
The above measures are not standardized under the financial
reporting framework used to prepare the financial statements of the
REIT. Readers should be further cautioned that the above
measures as calculated by the REIT may not be comparable to similar
measures presented by other issuers. For further information,
refer to the sections entitled "Non-IFRS measures" and "Financial
Operations and Results" in the REIT's 2022 Annual MD&A, which
is incorporated by reference herein, for further information
(available on SEDAR at www.sedar.com or the REIT's website
www.marwestreit.com).
SOURCE Marwest Apartment Real Estate Investment Trust