CAPREIT expands presence in London

Photo: 924 Wonderland Road South is part of a seven-building London portfolio acquired by CAPREIT

The acquisition of seven apartment buildings by CAPREIT signals confidence in city’s residential rental sector

CANADIAN APARTMENT PROPERTIES Real Estate Investment Trust (CAPREIT) announced today that it has completed the acquisition of a portfolio of seven apartment buildings aggregating 548 residential suites in London.

The properties are located at 740, 914, 916 and 924 Wonderland Road South, 435 Grey Street and 1 and 3 Frontenac Road.

In addition to the London properties, CAPREIT also added a portfolio of six apartment buildings aggregating 335 residential suites in and near downtown Victoria, B.C.

CAPREIT paid approximately $214.5 million for the 13 properties, funded by CAPREIT’s Acquisition and Operating Facility and the assumption of approximately $8.4 million in mortgages with a blended interest rate of 1.33 per cent.

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According to CAPREIT, the London portfolio of properties contains a mix of studios, one-, two- and three-bedroom suites, and all the have undergone exterior, common area and suite upgrades and renovations over the past five years.

In a release announcing the acquisition, CAPREIT says there is a significant opportunity to improve the London portfolio’s environmental footprint by decreasing utility consumption through water fixture retrofits and the modernization of heating boilers. Additionally, on turnover, suites can be self-metered for hydro.

“We continue to grow our value-add residential portfolio with these accretive acquisitions,” says Mark Kenney, CAPREIT president and CEO. “Both portfolios are in strong and stable suburban markets, offering residents quality suites with more space, at affordable rental rates, characteristics that are in high demand today. These acquisitions are in-line with our successful asset allocation strategy of acquiring mid-tier properties, where we can add significant value through our proven property management and investment initiatives.”

CAPREIT is Canada’s largest publicly traded provider of rental housing, and currently owns or has interests in approximately 69,200 residential apartment suites, townhomes and manufactured housing community sites across Canada, in the Netherlands and Ireland.

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In Canada, the real estate investment trust sector appears to be staging a comeback from a Covid-19 hit. Offering investors an affordable and passive way to investing in a particular real estate asset class, they have lagged somewhat since the pandemic’s start amid doubts over the future of downtown core areas as desirable living areas as many workers retreated to suburban and small-centre homes.

But with rental relief measures in many provinces coming to an end as vaccination numbers improve in Canada, so too are eviction bans and rental freezes. In addition, Canadian universities are also expected to return to in-person classes, at least partially, which would see the return of a number of international students and drive up demand for rental units.

Ottawa is also looking to increase immigration levels to 400,000 over the next three years, which will emerge as a major rental demand driver.