NEWS RELEASE
MARWEST APARTMENT REIT ANNOUNCES Q3 RESULTS
WINNIPEG, MB – November 24, 2021 – Marwest Apartment Real Estate Investment Trust (“Marwest Apartment REIT” or the “REIT”) (TSXV: MAR.UN) reported financial results for the third quarter ended September 30, 2021.
The Condensed Consolidated Interim Financial Statements and Management’s Discussion and Analysis (“MD&A”) for Q3 2021 and the nine months ended September 30, 2021 are available on the REIT’s website at www.marwestreit.com and at www.sedar.com.
Q3 2021 Highlights
- Adjusted funds from operations (“AFFO”) of $0.04 per unit for the nine months ended September 30, 2021
- Generated net property operating income (“NOI”) of $1,206,553 since the acquisition of 251 units
(the “Qualifying Transaction”) on April 30, 2021
- NOI margin of 62.44% for the nine months ended September 30, 2021
- Occupancy rate of 98.77% since the Qualifying Transaction
- Average monthly rent per suite to September 30, 2021 of $1,512
Mr. William Martens, Chief Executive Officer and Trustee commented “We are very pleased to have completed our first full quarter of operations with our initial portfolio. Since Q3 we have completed the purchase of an additional 112 rental units with the closing of the Element acquisition on November 15, 2021.“
Operations Summary
| Portfolio Operational Information | As at September 30, 2021 |
| Number of properties | 2 |
| Number of suites | 251 |
| Average Occupancy Rate to date | 98.77% |
| Average rental rate to date | $1,512 |
| Financial Summary | Period ended September 30, 2021 |
| Property revenue | $ 1,932,200 |
| Net property operating income | 1,206,553 |
| Net income | 4,855,259 |
| FFO | 453,275 |
| FFO per unit | $ 0.05 |
| AFFO | 353,160 |
| AFFO per unit | $ 0.04 |
| Debt Metrics as at | As at September 30, 2021 |
| Debt to total assets | 66.65% |
| Weighted average mortgage interest rate | 2.78% |
| Weighted average months to debt maturity | 79.41 |
| Debt service coverage ratio | 1.35 |
Financial Summary
The REIT generated FFO and AFFO per unit of $0.05 and $0.04 respectively through Q3 2021. The reporting of FFO and AFFO was attributable to the recent acquisitions of the REIT’s two properties. As noted above, the REIT’s initial property acquisitions closed on April 30, 2021, thus the results for the 9 months ended September 30, 2021 substantively reflect only the five months that the REIT owned the properties.
FFO an AFFO are defined in “Non-IFRS Measures” in Q3 2021 Management’s Discussion and Analysis.
Period ended
September 30,
Reconciliation of Net Income to FFO 2021
| Net income | $ 4,855,259 | |||
| Fair value adjustments | (4,401,984) | |||
| FFO | 453,275 | |||
| FFO per unit Reconciliation of FFO to AFFO | $ 0.05 | |||
| FFO | $ 453,275 | |||
| Capital expenditures | (81,192) | |||
| Leasing costs | (18,923) | |||
| AFFO | 353,160 | |||
| AFFO per unit | $ 0.04 | |||
Operational Summary
Period ended
Turnovers and Renewals September 30, 2021
| Suite Turnovers | 68 units |
| Move ins | 78 Units |
| Lease Renewals | 117 units |
| Renewal rate | 63% |
Outlook
Management believes it will continue to see a stable rental market for rental apartments. With increased vaccination rates, provincial re-opening plans in effect, and the easing of border restrictions driving immigration, management believes the demand for multi-family rentals will increase.
The rising cost of home ownership has widened the affordability gap between renting and home ownership within the market that the REIT operates, which further fuels the demand for multi-family rentals. The REIT’s newer generation portfolio includes amenities such as clubhouses and gyms, further increasing demand.
Management believes it will close another transaction within the next twelve months, due to the strategic relationship that the Trust has with the Marwest Group and the ability to raise capital within the market.
Acquisition of Marwest (Element) Apartments L.P.
On November 15, 2021, the REIT closed the purchase of 100% of Marwest (Element) Apartments L.P. partnership units through its subsidiary MAR REIT L.P. Marwest (Element) Apartments L.P. own the multifamily properties located at 85 Fiorentino and 30 El Tassi Drive, Winnipeg, Manitoba. The aggregate purchase price of $2,367,194 reflects the value of the properties less the mortgages payable assumed by the REIT. The purchase price was satisfied by the issuance of 1,029,211 exchangeable limited partnership units in MAR REIT L.P. at $1.15 per Unit and $1,183,602 in cash.
Distributions
The Board of Trustees have adopted a monthly distribution policy pursuant to which the REIT will pay monthly distributions. The initial distribution will be to Unitholders of record on December 31, 2021 in the amount of $0.00125 per unit ($0.015 annualized) and will be paid on or about January 15, 2022. Distributions are subject to suspension, amendment or termination at any time.
REIT Contact
For further information, please contact Mr. William Martens, Chief Executive Officer, Telephone: (204) 9471200.
About Marwest Apartment REIT
The REIT is an unincorporated open-ended trust governed by the laws of the Province of Manitoba. The REIT was formed to provide Unitholders 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 forwardlooking statements. Forward‐looking statements in this news release include, but are not limited to, the implementation of a cash distribution policy. A number of factors could cause actual results to differ materially from these forward‐looking statements. 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 Trust 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.