TSX: MI.UN
2024
Annual Report
Pedestrian entrance at Lonsdale Square • North Vancouver
2024
Highlights
A leading real estate investment trust
that owns and operates a portfolio of
28 high-quality, urban multi-residential
properties in Canada's major cities
$1,990
Average monthly occupied
unfurnished rent(2)
95.8%
Closing unfurnished
occupancy(2)
15.0%
Normalized AFFO per
unit(2) Growth
7.9%
Normalized Same Property
Portfolio NOI(2,4) Growth
$187.7 million
Total liquidity(2)
(1) Geographic distribution is based on the proportionate share of the fair value of the REIT’s investment
properties.
(2) Non-IFRS financial measure. See “Non-IFRS and Other Financial Measures” in the Management’s
Discussion and Analysis included in this annual report.
(3) Distribution rates in effect as at December 31.
(4) The Same Property Portfolio comprises properties owned for equivalent periods in 2024 and 2023.
Annualized distributions per unit(3)
2021
$0.475
2022
$0.490
2023
$0.505
2024
$0.520
Normalized AFFO per unit(2)
2021
$0.6973
2022
$0.7176
2023
$0.7608
2024
$0.8749
Geographic Distribution(1)
Calgary
Montréal
Toronto
Ottawa
7,726
Suites
(100% Share)
37%
36%
8%
18%
This letter contains forward-looking statements and references to certain Non-IFRS Financial Measures. See “Forward-Looking Statements” and “Non-IFRS and Other Financial Measures” in the Management’s
Discussion and Analysis included in this annual report.
Letter from the President
and Chief Executive Officer
Dear Fellow Unitholders,
2024 was a year of significant accomplishments for Minto
Apartment REIT. While cost of capital continued to be
a challenge for the Canadian REIT sector, Management
built value for unitholders by generating strong operating
performance, improving its financial position, increasing
distributions and making prudent capital allocation decisions to
position the REIT for sustained long-term success.
I am pleased to report that the REIT generated Same Property
Portfolio Normalized Net Operating Income (“NOI”) of $100.2
million in 2024, an increase of 7.9% from the prior year. The
performance reflected unfurnished suite revenue growth of
6.5% in the Same Property Portfolio. Normalized Funds from
Operations (“FFO”) and Normalized Adjusted Funds from
Operations (“AFFO”) reached record levels of $0.9725 and
$0.8749 per unit respectively, representing increases of 12.9%
and 15.0%, respectively, compared to 2023. Growth in FFO
and AFFO per unit reflected higher NOI and accretive capital
allocation strategies, which supported a 12.1% reduction in
interest costs compared to 2023.
We undertook a number of initiatives during 2024 that were
designed to strengthen the REIT’s balance sheet and enhance
financial flexibility. These included successfully executing on
our capital recycling program, including by reducing variable-
rate debt and maintaining discipline with respect to capital
allocation decisions. I am especially proud of the team for
successfully executing on these strategies in the face of a very
challenging capital markets backdrop.
The capital recycling program is an important strategic lever
at our disposal allowing us to thoughtfully reallocate capital
from non-core assets into accretive initiatives. We remained
active with the program in the first quarter of 2024 through
the sale of Chesterton-Bowhill and Tanglewood in Ottawa,
which raised net proceeds of $68 million. We are very proud to
have worked with Ottawa Community Housing Corporation on
this sale, supporting the retention of much-needed affordable
rental supply in the Ottawa market. In early 2025, we sold
another Ottawa property, Castleview, for net proceeds of $34
million. Since the program’s inception, we have completed
approximately $200 million in total sales allowing us to
reduce leverage and enhance our liquidity position, while
simultaneously reducing the average age and future capital
requirements of the portfolio.
We successfully completed four upward financings during the
fourth quarter, resulting in incremental net proceeds of over
$90 million by financing three properties located in Ottawa -
Huron, Seneca, and Grenadier - while also adding financing to
our Leslie York Mills property in Toronto to support the ongoing
intensification work at that location.
We remained disciplined throughout 2024 in our capital
allocation decisions and received the full repayment of the
convertible development loans of $30 million associated with
Fifth + Bank in Ottawa in the first quarter of 2024 and $14
million associated with Lonsdale Square in North Vancouver in
early 2025.
$197 million
Proceeds from asset sales from
March 2023 to January 2025
16.7%
Total liquidity as a percentage
of Total Debt
64.1%
Normalized Same Property
Portfolio NOI Margin
( 1 ) Based on the proportionate share of the fair value of the REIT's investment properties at December 31, 2024, excluding Castleview in Ottawa which was sold on January 22, 2025, and Lonsdale
Square which was acquired on January 15, 2025.
Jonathan Li
President and Chief Executive Officer,
Minto Apartment REIT
The net proceeds generated from the sales and other activities
referenced above were primarily used to 1) pay down the
variable-rate revolving credit facility which is currently an
expensive source of capital and 2) support the accretive
normal course issuer bid ("NCIB") program which allows us
to purchase units in the market at a significant discount to
intrinsic value.
In fact, as a direct result of our capital allocation strategies,
during 2024 we reduced the outstanding balance on our
variable-rate revolving credit facility from $140.2 million to
$24.5 million and, subsequent to year end, we repaid the entire
outstanding balance on the facility. This significant reduction
has allowed us to reduce our annual interest expense which
positions us well for future cash flow growth.
The NCIB represents an important part of the REIT's capital
allocation strategy and, given current market dynamics, we
have been active with the program. Since November 2024,
we have purchased $15 million of Units at an average price
of $13.44. Given the current trading price of the REIT’s Units,
the NCIB represents an attractive return on investment for
unitholders relative to other capital allocation alternatives.
I am incredibly proud of the milestone achievement of entering
the Metro Vancouver market through our acquisition of
Lonsdale Square in January 2025, achieving our objective of
expanding the REIT’s geographic exposure in Canada's key
urban centres. We purchased a 50% managing ownership
interest in the property at a discount to market value. Lonsdale
Square is a premium purpose-built rental building consisting
of 113 suites and ground floor retail highlighted by an upscale
brewpub and a pharmacy. We funded our share of the
purchase price of $53 million through the assumption of a
$53 million CMHC-insured mortgage on the property and
therefore did not require the issuance of new equity. This was
an innovative transaction, and highlights the benefits of our
strategic partnership with The Minto Group. More importantly,
the transaction is expected to be accretive to FFO and AFFO
per unit.
Environmental, Social and Governance (“ESG”) is another
important aspect of our strategy; employee incentive pay
continues to be linked, in part, to ESG performance targets
and ESG-related needs and considerations are incorporated
into the REIT’s capital and operating budgets. We have had
outstanding results within our three ESG pillars, as outlined
in our latest ESG Report which was released in September
2024. We have reduced rental property energy consumption
and carbon emissions by 17% and 16%, respectively, since
2019. Over the past five years, we have invested $7.4 million in
environmental improvements across the portfolio.
In November, the Board of Trustees approved a 3.0% increase
to the REIT's annual distribution to $0.52 per unit. The increase
reflects our confidence in the business outlook and maintains
the REIT’s track record of increasing distributions every year
following its inception in 2018.
Looking ahead, I am confident about our business prospects
and outlook for 2025 and beyond. The long-term industry
fundamentals remain intact to support revenue growth. The
primary tailwinds include Canada’s structural housing supply
shortage, long-term population growth and the significant
affordability gap between owning and renting a home.
Additionally, we are focused on continuously adapting to
market changes given current economic, regulatory and
political uncertainty that must be navigated.
Supported by these fundamentals, we will continue to drive
organic growth by realizing the gain-to-lease potential in
our high-quality urban portfolio while effectively managing
controllable operating expenses. We will evaluate future
acquisition opportunities strategically while remaining
committed to making prudent capital allocation decisions with
particular consideration for future FFO per unit growth, while
balancing long-term value creation and growth objectives.
I want to highlight the outstanding performance of the Minto
Apartment REIT team, including senior management, our asset
and property management group, our finance and accounting
teams and everyone who works in and around our portfolio
buildings. It is through their hard work, ingenuity and teamwork
that we achieve success.
Finally, on behalf of the Board of Trustees and our management
team, thank you to our unitholders for your continued support,
trust and confidence.
7,598
Suites
(100% Share)
34%
37%
8%
19%
2%
Vancouver
Calgary
Montréal
Toronto
Ottawa
Proforma Geographic Distribution(1)
Table of Contents
Management's Discussion and Analysis
1
Section I - Overview
1
Business Overview
1
Business Strategy and Objectives
1
Declaration of Trust
2
Basis of Presentation
2
Forward-Looking Statements
2
Use of Estimates
2
Financial and Operating Highlights
3
Outlook
11
Section II - Financial Highlights and Performance
15
Key Performance Indicators
15
Review of Financial Performance
16
Summary of Quarterly Results
26
Summary of Annual Results
27
Section III - Assessment of Financial Position
28
Investment Properties
28
Class B LP Units
29
Class C LP Units
30
Mortgages and Loan
30
Credit Facility
30
Units
31
Distributions
31
Section IV - Liquidity, Capital Resources and Contractual Commitments
32
Liquidity and Capital Resources
32
Cash Flows
34
Reconciliation of Non-IFRS Financial Measures and Ratios
36
Section V - Accounting Estimates and Policies, Controls and Procedures and Risk Analysis
41
Critical Judgments in Applying Accounting Policies
41
Critical Accounting Estimates and Assumptions
41
Risks and Uncertainties
42
Financial Risk Management
48
Related Party Transactions
50
Contingencies and Commitments
52
Adoption of New Standards, Amendments and Interpretations
53
Future Changes in Accounting Standards
53
Subsequent Events
53
Disclosure Controls and Internal Controls Over Financial Reporting
54
Section VI - Supplemental Information
55
Property Portfolio
55
Average Rent Per Square Foot
56
Non-IFRS and Other Financial Measures
56
Consolidated Financial Statements
60
60
65
66
67
68
Independent Auditors' Report
Consolidated Balance Sheets
Consolidated Statements of Net Income (Loss) and Comprehensive Income (Loss)
Consolidated Statements of Changes in Unitholders' Equity
Consolidated Statements of Cash Flows
Notes to the Consolidated Financial Statements
69
Unitholder Information
99
Section I - Overview
Business Overview
Minto Apartment Real Estate Investment Trust (the "REIT") is an unincorporated, open-ended real estate investment trust
established pursuant to a Declaration of Trust dated April 24, 2018, which was amended and restated on June 27, 2018 and has
been further amended from time to time. The REIT owns, develops and operates a portfolio of income-producing multi-
residential rental properties located in Canada. The REIT was established under the laws of the Province of Ontario. The
principal and registered office of the REIT is 200-180 Kent Street, Ottawa, Ontario.
The REIT's portfolio, referred to herein as the "Total Portfolio", consists of 28 (December 31, 2023 - 29) multi-residential rental
properties located in urban locations: Ottawa, Toronto, Montreal, and Calgary. The "Same Property Portfolio" consists of 28
multi-residential properties owned for equivalent periods in 2024 and 2023 and represents 100% (December 31, 2023 - 96%) of
the REIT's Total Portfolio suite count. The properties excluded from the Same Property Portfolio results are: Hi-Level Place in
Edmonton sold in Q1 2023, York House and The Lancaster House in Edmonton sold in Q4 2023, and Tanglewood and a selection
of suites at Parkwood Hills ("Chesterton/Bowhill") in Ottawa sold in Q1 2024. Unless otherwise noted, analysis and figures
presented in this Management's Discussion and Analysis are on a Total Portfolio basis. The ownership distribution of suites is
shown in the table below and unless otherwise noted, all references to suite count, including co-owned properties, are at 100%
ownership rather than the REIT's proportionate effective ownership:
As at December 31,
Same Property Portfolio Suites
Total Portfolio Suites
2024
2023
2024
2023
Wholly-owned
5,062
5,062
5,062
5,373
50% co-owned
1,413
1,413
1,413
1,413
40% co-owned
750
750
750
750
28.35% co-owned
501
501
501
501
Total suites
7,726
7,726
7,726
8,037
Total suites at effective ownership
6,211
6,211
6,211
6,522
Business Strategy and Objectives
The REIT's objectives are to:
• provide Unitholders an opportunity to invest in high-quality income-producing multi-residential rental properties
strategically located across urban centres in Canada;
• enhance the value of the REIT's assets and maximize long-term Unitholder value through value-enhancing capital
investment programs and active asset and property management of the REIT's properties;
• provide Unitholders with predictable and sustainable distributions; and
• expand the REIT's asset base in its key markets through intensification programs, acquisitions and developments.
Management believes it can accomplish these objectives given that it operates a high quality portfolio in an attractive asset
class with compelling supply and demand characteristics.
The REIT has a thoughtful and prudent approach to managing its capital by balancing the allocation among available
alternatives. These alternatives include the repayment of variable-rate debt, convertible development loan ("CDL") programs,
increasing suite count through its current developments, maintenance capital expenditures, distributions, repositioning
programs, deleveraging, strategic acquisitions and unit buybacks. Key criteria impacting capital allocation decisions include
project returns, liquidity, leverage levels, net asset value ("NAV") per unit and cash flow growth per unit over time. The REIT
also evaluates dispositions that meet its divestiture criteria as part of its capital management.
Minto Apartment Real Estate Investment Trust | Management's Discussion and Analysis - 2024
(in thousands of Canadian dollars, except Unit and per Unit amounts, per suite amounts and other non-financial data)
|
Minto Apartment REIT
2024 Annual Report
1
Declaration of Trust
The investment guidelines and operating policies of the REIT are outlined in the REIT’s Amended and Restated Declaration of
Trust dated June 27, 2018, as amended from time to time (collectively, the "DOT"). A copy of the DOT is available on SEDAR+ at
www.sedarplus.ca.
As of March 5, 2025, the REIT was in compliance with its investment guidelines and operating policies as set out in the DOT.
Basis of Presentation
The following Management's Discussion and Analysis of the REIT's results of operations and financial condition should be read
in conjunction with the REIT's consolidated financial statements and accompanying notes for the years ended December 31,
2024 ("FY 2024") and 2023 ("FY 2023"), prepared in accordance with IFRS Accounting Standards ("IFRS") as issued by the
International Accounting Standards Board ("IASB").
This Management's Discussion and Analysis also contains certain non-IFRS and other financial measures including funds from
operations ("FFO"), FFO per unit, Normalized FFO, Normalized FFO per unit, adjusted funds from operations ("AFFO"), AFFO per
unit, AFFO Payout Ratio, Normalized AFFO, Normalized AFFO per unit, Normalized AFFO Payout Ratio, net operating income
("NOI"), Normalized NOI, Debt-to-Gross Book Value ratio, Debt-to-adjusted earnings before interest, taxes, depreciation and
amortization ("Adjusted EBITDA") ratio, Debt Service Coverage ratio, NAV, and NAV per unit, which are measures commonly
used by publicly traded entities in the real estate industry. Management believes that these metrics are useful for measuring
different aspects of performance and assessing the underlying operating performance on a consistent basis. However, these
measures do not have a standardized meaning prescribed by IFRS and are not necessarily comparable to similar measures
presented by other publicly traded entities. These measures should strictly be considered supplemental in nature and not a
substitute for financial information prepared in accordance with IFRS. See "Non-IFRS and Other Financial Measures" under
Section VI - "Supplemental Information" for definitions of these measures.
The REIT's Board of Trustees approved the content of this Management's Discussion and Analysis on March 5, 2025. Disclosure
in this document is current to that date unless otherwise stated. Additional information relating to the REIT can be found on
SEDAR+ at www.sedarplus.ca and also on the REIT's website at www.mintoapartmentreit.com.
Forward-Looking Statements
This Management's Discussion and Analysis may contain forward-looking statements (within the meaning of applicable
Canadian securities laws) relating to the business of the REIT. Forward-looking statements are identified by words such as
"believe", "anticipate", "project", "predict", "expect", "intend", "plan", "will", "may", "could", "should", "estimate" and other
similar expressions. These statements are based on the REIT's expectations, estimates, forecasts and projections, including the
REIT’s expectations with respect to the impact of current economic conditions which include trade disputes, interest rate
uncertainty, and inflation, among other factors, on its business, operations and financial results. They are not guarantees of
future performance and involve risks and uncertainties that are difficult to control or predict. A number of factors could cause
actual results to differ materially from the results discussed in the forward-looking statements, including, but not limited to, the
factors discussed under the heading "Risks and Uncertainties". There can be no assurance that forward-looking statements will
prove to be accurate as actual outcomes and results may differ materially from those expressed in these forward-looking
statements. Readers, therefore, should not place undue reliance on any such forward-looking statements. Further, these
forward-looking statements are made as of the date of this Management's Discussion and Analysis and, except as expressly
required by applicable law, the REIT assumes no obligation to publicly update or revise any forward-looking statement, whether
as a result of new information, future events or otherwise.
Use of Estimates
The preparation of the consolidated financial statements in conformity with IFRS requires Management to make judgments,
estimates and assumptions that affect the application of accounting policies and the amounts reported in the consolidated
financial statements and accompanying note disclosures. Although these estimates are based on Management’s knowledge of
current events and actions the REIT may undertake in the future, actual results may differ from the estimates.
Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in
the period in which the estimates are revised and in any future periods affected.
Minto Apartment Real Estate Investment Trust | Management's Discussion and Analysis - 2024
(in thousands of Canadian dollars, except Unit and per Unit amounts, per suite amounts and other non-financial data)
| Minto Apartment REIT
2024 Annual Report
2
Financial and Operating Highlights
Financial Performance
Strong Revenue and NOI Growth Continued
In Q4 2024, Same Property Portfolio revenue increased by 3.5% over Q4 2023. The increase was driven by unfurnished revenue
growth of 5.3% over Q4 2023, primarily due to a 5.5% increase to average monthly rent ("AMR"). This was partially offset by a
90 bps decline in Same Property Portfolio average occupancy to 96.3%. Same Property Portfolio normalized operating expenses
increased by 2.5% over the same period, driven by higher normalized property operating costs and partially offset by lower
utility costs. Overall, Same Property Portfolio normalized NOI grew by 4.1% and normalized NOI margin increased by 30 bps
over Q4 2023 to 63.0%.
For Q4 2024, Total Portfolio revenue declined by 2.1% over Q4 2023, as the strong Same Property Portfolio results were offset
by the sale of two Ottawa properties in February 2024 and two Edmonton properties in December 2023. Total Portfolio AMR
grew by 6.0% while average occupancy decreased by 90 bps to 96.3%. Total Portfolio normalized operating expenses decreased
by 3.1% due to property dispositions, partially offset by the factors affecting the Same Property Portfolio. Overall, Total
Portfolio normalized NOI decreased by 1.5% while NOI margin increased by 40 bps to 63.0%.
FY 2024 was a strong operational year for the REIT. Same Property Portfolio revenue grew by 5.1% over FY 2023, driven by a
6.5% increase in unfurnished revenue due to strong AMR growth of 5.5%, partially offset by a 30 bps decrease in average
occupancy. Same Property Portfolio normalized operating expenses were effectively flat over year as a result of higher property
operating costs and property taxes being offset by an 8.1% decrease in utilities. Same Property Portfolio normalized NOI
increased by 7.9% in FY 2024 and NOI margin expanded by 170 bps to 64.1%.
For the same period, Total Portfolio revenue was relatively flat, as the growth from the Same Property Portfolio was offset by
property dispositions. Total Portfolio AMR grew by 6.0%, while average occupancy decreased by 30 bps. Normalized operating
expenses decreased by 4.9% year over year, resulting in a 2.1% increase to normalized NOI and normalized NOI margin
expansion of 160 bps to 64.0%.
Turnover Increased Slightly while Closing Occupancy Declined
The annualized turnover for the Same Property Portfolio was 23% in Q4 2024, a slight increase compared to Q4 2023. Overall
closing occupancy for the portfolio declined from Q3 2024 as move-outs outpaced move-ins as an increase in supply across the
REIT's markets was compounded by seasonally slower demand during the winter months.
Same Property Portfolio Annualized Turnover1,2 by Geographic Node
21%
24%
15%
18%
19%
15%
43%
42%
22%
23%
Ottawa
Toronto
Montreal
Calgary
Same Property Portfolio
Q4 2023
Q1 2024
Q2 2024
Q3 2024
Q4 2024
Calgary had higher annualized turnover than other geographies as Alberta is a non-rent controlled market. Closing occupancy
was 93.1% as a large rental supply increase in the second half of 2024 and the affordability of alternative housing options
resulted in the slower absorption of vacant suites.
Annualized turnover for Ottawa increased to 24% compared to 21% in Q4 2023, while closing occupancy of 96.5% declined from
recent highs due to competitive pressures from rental apartment completions, which pushed the vacancy rate higher.
Minto Apartment Real Estate Investment Trust | Management's Discussion and Analysis - 2024
(in thousands of Canadian dollars, except Unit and per Unit amounts, per suite amounts and other non-financial data)
1 Annualized turnover extrapolates the quarterly turnover rate to determine an annual rate and as such is not necessarily representative of a
full year's turnover.
2 Refer to Section VI - "Supplemental Information - Non-IFRS and Other Financial Measures"
|
Minto Apartment REIT
2024 Annual Report
3
In Toronto, annualized turnover increased to 18% compared to 15% in Q4 2023. The Toronto market has experienced a large
increase in supply through 2024 that will continue into 2025, which resulted in higher vacancy with closing occupancy at 95.1%,
and the flattening of market rent as that supply is absorbed.
In Montreal, turnover was 15% while demand remained stable, leading to continued strong closing occupancy of 96.5%.
Management continues to leverage a combination of tactical promotion, marketing campaigns and a targeted renewal program
across the portfolio to drive occupancy.
Same Property Portfolio
Q4 2023
Q1 2024
Q2 2024
Q3 2024
Q4 2024
Closing Occupancy1
Toronto
97.2 %
95.8 %
95.1 %
96.2 %
95.1 %
Ottawa
98.1 %
97.7 %
98.9 %
98.5 %
96.5 %
Calgary
96.4 %
99.1 %
98.6 %
96.8 %
93.1 %
Montreal
95.6 %
96.2 %
96.8 %
96.9 %
96.5 %
97.2 %
97.1 %
97.5 %
97.4 %
95.8 %
Past Balance Sheet Initiatives Continue to Drive Strong FFO per unit Growth
The REIT's focus on implementing accretive capital allocation strategies contributed to the growth of Normalized FFO per unit
and Normalized AFFO per unit of 4.1% and 4.2%, respectively in Q4 2024 over Q4 2023. For FY 2024, Normalized FFO per unit
and AFFO per unit increased by 12.9% and 15.0%, respectively, over FY 2023. In addition to strong operational performance for
both periods, Management deleveraged through the capital recycling program and maintained lower average variable-rate debt
exposure relative to the same periods 2023, both of which supported a decline in interest costs.
Normalized results exclude the impact of nonrecurring items not indicative of the REIT's typical operations; refer to Section IV -
"Liquidity, Capital Resources and Contractual Commitments - Reconciliation of Non-IFRS Financial Measures and Ratios" for a
reconciliation of normalized results.
Entry into the Metro Vancouver Market1
On January 15, 2025, the REIT purchased a 50% managing ownership interest in Lonsdale Square located in North Vancouver,
British Columbia from a partnership in which Minto Properties Inc. ("MPI") has a 50% interest. The REIT's $52,963 share of the
purchase price was at a 5% discount to the total purchase price of $111,500. The REIT's share of the purchase price was
satisfied by the assumption of a $52,904 CMHC-insured mortgage, bearing interest at a contractual interest rate of 3.89% and
maturing in December 2034. Management expects the purchase will be accretive to AFFO per unit in 2025.
The acquisition of the property is a significant milestone for the REIT given it marks its entry into the highly attractive Metro
Vancouver market, achieving one of the REIT's objectives to expand its geographic exposure in Canada's key urban centres. The
newly-constructed Lonsdale Square property has 113-suites, 108 parking stalls, 8,158 square feet of fully-leased ground floor
retail, and premium amenities for tenants. The asset reduces the average age of the portfolio and is energy efficient, resulting
in lower capital expenditure requirements relative to older assets.
In connection with the acquisition, the REIT received repayment of the $14,000 CDL associated with the property and used the
proceeds to partially pay down the revolving variable-rate credit facility.
Sale of a Non-Core Asset to Enhance Portfolio Quality
On January 22, 2025, the REIT closed the previously announced sale of Castleview, a 241-suite property in Ottawa built in 1973,
for a sale price of $69,000. The sale generated net proceeds of $33,849, net of mortgage and transaction costs, a portion of
which was used to repay the outstanding balance on the REIT's revolving credit facility and to purchase Units under the REIT's
normal course issuer bid ("NCIB") program. The REIT has completed nearly $200,000 in dispositions of non-core assets since the
beginning of 2023, enhancing the overall quality of its portfolio and reducing future capital expenditure requirements.
Minto Apartment Real Estate Investment Trust | Management's Discussion and Analysis - 2024
(in thousands of Canadian dollars, except Unit and per Unit amounts, per suite amounts and other non-financial data)
1 Refer to Section VI - "Supplemental Information - Non-IFRS and Other Financial Measures"
| Minto Apartment REIT
2024 Annual Report
4
Strengthening the Balance Sheet and Reducing Variable-Rate Debt Exposure
Management has been keenly focused on strengthening the balance sheet. This has been achieved by executing on its capital
recycling program, reducing variable-rate debt and being disciplined with capital allocation decisions. Management executed on
this strategy through FY 2024 and into the first quarter of 2025 ("Q1 2025") through the following:
• Received repayment in Q1 2024 of the $30,000 Fifth + Bank CDL;
• Deleveraged through the sale of two Ottawa properties in Q1 2024 for a combined sale price of $86,000 raising net
proceeds of $67,956;
• Waived on the REIT's right of purchase for one existing multi-residential opportunity presented by MPI in Q1 2024;
• Secured upward net financing proceeds of $69,172 in Q4 2024 for Huron, Seneca, and Grenadier located in Ottawa. The
CMHC-insured fixed rate mortgages have a weighted average effective interest rate of 3.89% and mature in December
2029;
• Secured upward net financing proceeds of $21,194 for Leslie York Mills in Q4 2024 to support the ongoing intensification
project. The conventional fixed rate mortgage with an effective interest rate of 4.65% and matures in January 2028.
• Purchased an interest in Lonsdale Square in North Vancouver for a purchase price of $52,963, satisfied by assuming a
CMHC-insured mortgage;
• Received repayment in Q1 2025 of the $14,000 Lonsdale Square CDL;
• Sold Castleview in Ottawa in Q1 2025 for a sale price of $69,000, generating net proceeds of $33,849;
• Allowed the purchase option for The Hyland to lapse without the REIT having exercised such option; and,
• Waived on the REIT's right of first opportunity presented by MPI for a development project in Ottawa.
The net proceeds generated from the above activities were partially used to pay down the variable-rate revolving credit facility,
purchase Units under the accretive NCIB program, and advance the REIT's intensification projects, value-enhancing capital
program, and repositioning program.
Normal Course Issuer Bid
As part of the REIT's prudent capital allocation strategy, the REIT has been active with its NCIB program. The NCIB is active from
September 27, 2024 to September 26, 2025 and permits the REIT to acquire up to 3,283,584 Units, representing approximately
5% of its issued and outstanding units, and the REIT may acquire up to 22,703 Units on any given trading day. In connection
with the NCIB, on December 30, 2024, the REIT established an automatic securities purchase plan ("ASPP") applicable to its
outstanding Units. The ASPP allows the REIT to purchase Units under the NCIB at times it would ordinarily not be permitted to
do so due to regulatory restrictions and customary self-imposed blackout periods.
During Q4 2024, the REIT purchased and cancelled 337,842 Units at a weighted average purchase price of $14.03 per Unit, for a
total cost including transaction costs of $4,869.
Subsequent to December 31, 2024, the REIT purchased and cancelled 777,276 Units under the NCIB, at a weighted average
purchase price of $13.19 per Unit, for a total cost including transaction costs of $10,469.
In total, the REIT purchased and cancelled 1,115,118 Units under the NCIB, at a weighted average price of $13.44 per Unit, for a
total cost including transaction costs of $15,338.
Sixth Consecutive Annual Distribution Increase
On November 12, 2024, the Board of Trustees approved a $0.015 per Unit or 3.0% increase to the REIT's annual distribution
from $0.5050 per Unit to $0.5200 per Unit. The monthly distribution is $0.04333 per Unit, up from $0.04208 per Unit. The
increase of the distribution reflects Management's confidence in the business outlook for 2025 and maintains the record of
increasing the annual distribution every year since the REIT's initial public offering in 2018.
Minto Apartment Real Estate Investment Trust | Management's Discussion and Analysis - 2024
(in thousands of Canadian dollars, except Unit and per Unit amounts, per suite amounts and other non-financial data)
|
Minto Apartment REIT
2024 Annual Report
5
Special Distribution
On December 16, 2024, the REIT declared a special non-cash distribution of $0.76 per Unit, payable in Units on December 31,
2024 ("Special Distribution"). The Special Distribution was made to distribute a portion of the capital gains realized by the REIT
from the sale of investment properties completed during the year ended December 31, 2024.
On December 31, 2024, the REIT issued 2,255,508 Units at a price of $13.3362 per Unit, for a total value of $30,080.
Immediately following the issuance, the Units were consolidated such that each Unitholder held the same number of Units as
each Unitholder held prior to the Special Distribution.
NAV per unit1
NAV per unit as at December 31, 2024 was $22.34, relatively unchanged from $22.38 as at September 30, 2024, primarily due
to a fair value loss on investment properties of $11,732 in Q4 2024 being offset by the accretive NCIB program and NOI. The fair
value loss was driven by capitalization rate expansion for select residential properties in Ottawa and Toronto and an increase in
the capital expenditure reserve, partially offset by growth in forecast NOI for the portfolio overall.
Execution of Organic Growth Strategy
The REIT delivered organic revenue growth by realizing on the gain-to-lease potential in the portfolio and, to a lesser degree,
from its suite repositioning program. For Q4 2024, the REIT was able to realize gains of 11.2% on the 297 new leases it signed
during the period. These gains represent annualized revenue growth of approximately $618. The gain-to-lease potential of the
portfolio remains strong at 13.0% at December 31, 2024, although down from 14.8% at September 30, 2024 as market rents
have flattened. The REIT's ability to realize the embedded gain-to-lease potential in the portfolio in the short term will be
impacted by geographic turnover trends. Management expects turnover will continue to be slower for suites where the gap
between sitting rents and market rents remains elevated. The REIT repositioned 12 suites in Q4 2024, compared to 18 in Q4
2023, generating an average annual unlevered return of 9.3%. Management repositioned 48 suites in 2024 compared to 116 in
2023 due to lower turnover of unrenovated suites and Management's strategic assessment of each suite.
Organic Growth — Gain-on-Lease1
The REIT realized on organic revenue growth for Q4 2024 through effective leasing activities and revenue management
strategies. As new tenants take occupancy, the REIT is able to move rental rates from lower in-place rents to current market
rates. During the period, new leases resulted in annualized revenue growth of approximately $618. A summary of leasing
activities and the gains to be realized from new leases signed for Q4 2024 is set out in the table below:
Toronto
95
$2,610
$2,809
7.6%
$113
Ottawa
101
1,911
2,173
13.7%
312
Calgary
40
1,840
2,013
9.4%
83
Montreal
61
1,923
2,152
11.9%
110
Total/Average
297
$2,040
$2,268
11.2%
$618
Geographic Node
New Leases
Signed2
Expiring AMR
New AMR
Realized
Gain-on-Lease1
Annualized Gain-
on-Lease1,3
The REIT realized solid gain-on-lease in all of its markets in Q4 2024, with an average gain-on-lease of 11.2% on the 297 new
leases it signed, representing a small sequential increase from 10.8% on 449 leases signed in Q3 2024. In Ottawa and Montreal,
there was a higher proportion of turnover among tenants with longer average length of tenancy. In Toronto, a combination of
turnover among shorter length of stay tenants and flattening market rents resulted in lower sequential gain-on-lease. Overall,
the Canadian rental market continued its steady performance supported by constructive long-term industry fundamentals.
Minto Apartment Real Estate Investment Trust | Management's Discussion and Analysis - 2024
(in thousands of Canadian dollars, except Unit and per Unit amounts, per suite amounts and other non-financial data)
1 Refer to Section VI - "Supplemental Information - Non-IFRS and Other Financial Measures"
2 Includes 100% of new leases signed at co-owned properties and excludes new leases of furnished suites.
3 For co-owned properties, reflects the REIT's co-ownership interest only.
| Minto Apartment REIT
2024 Annual Report
6
For more details on revenue growth, see Section II - "Financial Highlights and Performance - Review of Financial Performance -
Revenue from Investment Properties".
Realized Gain-on-Lease and Average Monthly Rent1
16.9%
16.2%
17.0%
16.1%
12.5%
11.0%
10.8%
11.2%
$1,769
$1,801
$1,837
$1,877
$1,911
$1,939
$1,969
$1,990
Realized Gain-on-Lease (%)
Average Monthly Rent ($)
Q1 2023
Q2 2023
Q3 2023
Q4 2023
Q1 2024
Q2 2024
Q3 2024
Q4 2024
$1,000
$1,200
$1,400
$1,600
$1,800
$2,000
—%
5.0%
10.0%
15.0%
20.0%
The REIT continues to achieve growth in average monthly rent. Average monthly rent of $1,990 for Q4 2024 increased 6.0%, or
5.5% on a Same Property Portfolio basis, over Q4 2023.
For FY 2024, the REIT realized gains in all markets, with an average gain-on-lease of 11.4% on the 1,535 new leases it signed.
The following table summarizes the leasing activities and the gains to be realized from new leases signed in FY 2024:
Geographic Node
New Leases
Signed2
Expiring AMR
New AMR
Realized
Gain-on-Lease1
Annualized Gain-
on-Lease1,3
Toronto
449
$2,592
$2,832
9.3%
$601
Ottawa
540
1,854
2,096
13.1%
1,568
Calgary
223
1,807
1,996
10.5%
506
Montreal
323
2,042
2,262
10.8%
597
Total/Average
1,535
$2,009
$2,237
11.4%
$3,272
The annualized gains realized from new leases signed in the last four quarters are as follows:
Fiscal Quarter
New Leases
Signed2
Expiring AMR
New AMR
Realized
Gain-on-Lease1
Annualized Gain-
on-Lease1,3
Q1 2024
369
$1,953
$2,198
12.5%
$871
Q2 2024
420
2,018
2,240
11.0%
865
Q3 2024
449
2,026
2,245
10.8%
918
Q4 2024
297
2,040
2,268
11.2%
618
Total/Average
1,535
$2,009
$2,237
11.4%
$3,272
The REIT has achieved an average of 11.4% growth on realized gain-on-lease over the last four quarters, representing
annualized gain-on-lease of $3,272. The realized gain-on-lease increased in Q4 2024 compared to recent quarters, as a higher
proportion of new leases signed were for suites with a larger embedded rent due to a longer average length of stay.
Minto Apartment Real Estate Investment Trust | Management's Discussion and Analysis - 2024
(in thousands of Canadian dollars, except Unit and per Unit amounts, per suite amounts and other non-financial data)
1 Refer to Section VI - "Supplemental Information - Non-IFRS and Other Financial Measures"
2 Includes 100% of new leases signed at co-owned properties and excludes new leases of furnished suites.
3 For co-owned properties, reflects the REIT's co-ownership interest only.
|
Minto Apartment REIT
2024 Annual Report
7
Management continually reviews market conditions and updates its estimates of market rent for the properties in its portfolio.
Factoring in the new estimates of market rent, the estimated gain-to-lease potential on existing tenancies for the REIT's
portfolio as at December 31, 2024 is as follows:
Geographic Node
Total Suites1
Current AMR
Management's
Estimate of
Market AMR
Percentage
Gain-to-Lease
Potential2
Annualized
Estimated Gain-to-
Lease Potential2,3
Toronto
2,281
$2,268
$2,581
13.8%
$4,982
Ottawa
2,602
1,832
2,124
15.9%
9,109
Calgary
619
1,890
1,964
3.9%
548
Montreal
1,736
2,075
2,302
10.9%
3,397
Total/Average
7,238
$1,990
$2,250
13.0%
$18,036
Management currently estimates that the portfolio has annualized gain-to-lease potential of approximately $18,036. The REIT's
gain-to-lease potential at December 31, 2024 remained robust at 13.0%, decreasing slightly from Q3 2024 as market rents have
flattened while the REIT has continued to capture gain-on-lease. The REIT continues to realize on gain-to-lease opportunities as
suites turn over and expects to continue doing so going forward. The REIT's ability to realize the gain-to-lease potential is
dependent on suite turnover and overall market conditions. Notwithstanding a potential slow down in turnover for suites with a
large embedded rent, Management expects that the REIT will be able to realize a significant portion of the gain-to-lease
potential over a period of six to eight years.
Value Creation
Repositionings
A summary of the repositioning activities is set out below:
Property
Ownership
Interest
Suites Repositioned and Leased
Remaining Suites
to Reposition
Total Suites in the
Program
Proportion
Complete
Q4 2024
FY 2024
Toronto
Minto Yorkville
100%
—
1
28
99
72%
Leslie York Mills
50%
4
8
183
409
55%
High Park Village
40%
2
7
241
407
41%
Roehampton
100%
1
7
35
148
76%
Martin Grove
100%
—
—
17
32
47%
Ottawa
Carlisle
100%
—
3
62
191
68%
Castle Hill
100%
2
3
60
176
66%
Montreal
Rockhill
50%
—
1
728
934
22%
Le 4300
100%
2
11
191
261
27%
Haddon Hall
100%
—
—
132
191
31%
Le Hill-Park
100%
1
7
142
261
46%
Total
12
48
1,819
3,109
41%
Minto Apartment Real Estate Investment Trust | Management's Discussion and Analysis - 2024
(in thousands of Canadian dollars, except Unit and per Unit amounts, per suite amounts and other non-financial data)
1 Excludes 163 furnished suites, 239 vacant suites, 61 suites leased for future occupancy and 25 suites offline for post move-out repairs and
maintenance or repositioning.
2 Refer to Section VI - "Supplemental Information - Non-IFRS and Other Financial Measures"
3 For co-owned properties, reflects the REIT's co-ownership interest only.
| Minto Apartment REIT
2024 Annual Report
8
The following table summarizes costs and average annualized returns from repositioning activities for the last four quarters:
Fiscal Quarter
Suites Renovated
Average Cost
per Suite
Average Annual Rental
Increase per Suite
Average Annual
Unlevered Return1
Q1 2024
7
$69,350
$6,517
9.4%
Q2 2024
13
64,160
6,200
9.7%
Q3 2024
16
75,024
6,631
8.8%
Q4 2024
12
53,461
4,982
9.3%
Total/Average
48
$66,281
$6,126
9.2%
Management targets an average annual unlevered return on investment in the range of 8% to 15% on suites renovated and
leased. The REIT’s repositioning program represents an organic growth opportunity. Utilizing the REIT’s asset management
strategy, these programs target maximizing return on investment, while managing cash flow.
Capital is thoughtfully allocated to the 11 active repositioning projects on a suite-by-suite basis to ensure that an optimal
investment decision is made. Many of the existing repositioning projects have been active for six years or more. Suites that
become available at these properties are from residents with lengths of stay averaging approximately 12 years. These suites
require investment and provide an opportunity to make upgrades that generate a positive return on investment. The REIT does
not engage in renovation-related evictions. Management strategically assesses each repositioning opportunity considering
factors such as the market rent for unrenovated suites, the incremental capital investment, and the opportunity cost of the
downtime required for a renovation, among other factors. Due to this strategic assessment and the lower turnover propensity
for these suites, Management expects to reposition 35 to 70 suites in 2025, compared to 48 completed in 2024 and 116
completed in 2023.
Minto Apartment Real Estate Investment Trust | Management's Discussion and Analysis - 2024
(in thousands of Canadian dollars, except Unit and per Unit amounts, per suite amounts and other non-financial data)
1 Refer to Section VI - "Supplemental Information - Non-IFRS and Other Financial Measures"
|
Minto Apartment REIT
2024 Annual Report
9
Environmental, Social and Governance Initiatives
The REIT continues to implement measures to improve environmental, social, and governance ("ESG") performance under the
three strategic pillars of environmental impact, community impact, and business resilience.
Highlights since the previous quarterly ESG update are provided below.
Environmental Impact
• Projects were completed at Frontenac, Eleanor, and Seneca to seal air leaks in ducts and increase energy efficiency.
• Toilet sensor projects were executed at Eleanor, Parkwood Hills, and Skyline to reduce water consumption.
• A Building Automation System upgrade was completed at Richgrove to improve energy efficiency.
Community Impact
• To reduce barriers to diversity and inclusion in recruitment and build relationships with community partners:
◦
New processes for reviewing and auditing job descriptions were determined,
◦
Intake and pre-screening templates were updated, and
◦
Talent acquisition team members attended community partner job fair events.
• Implementation of a resident engagement program to build connections and drive change continued with:
◦
Initiation of a new survey to be sent to all residents prior to lease renewal, and
◦
Hosting events such as holiday toy drives, social gatherings, crafting, and contests.
Business Resilience
• An emergency simulation exercise was conducted with the Emergency Coordination Team to test readiness with a pre-
determined scenario that was completed with members of the executive leadership team to review governance, metrics
and software use.
• To support the Minto Yorkville decarbonization project, an element of climate change transition planning, the old chiller
and cooling tower were removed in November and new heat pumps were lifted on to the roof. Piping connections from the
new equipment to existing systems and commissioning of new equipment was completed in January 2025.
• The cybersecurity program was strengthened through completion of payment card compliance activities, an internet use
training campaign, closure of vulnerabilities identified through penetration testing, and implementation of multi-factor
authentication for new applications.
Governance Framework
The Board of Trustees receives quarterly updates on ESG. An ESG Steering Committee with senior executive representation
guides implementation of the ESG strategy. REIT employee incentive pay continues to be linked, in part, to ESG performance
targets. ESG-related needs and considerations are incorporated into capital and operating budgets and ESG expectations are
included in the business plan.
Benchmarking
The REIT participated in the 2024 GRESB real estate sustainability benchmarking assessment, earning a score of 75, a 2-Star
GRESB Rating, and Green Star Designation. In a separate assessment, the REIT’s ESG disclosures were scored in the GRESB
Public Disclosure evaluation, receiving a score of 96 out of 100 and earning an A-rating.
Minto Apartment Real Estate Investment Trust | Management's Discussion and Analysis - 2024
(in thousands of Canadian dollars, except Unit and per Unit amounts, per suite amounts and other non-financial data)
| Minto Apartment REIT
2024 Annual Report
10
Outlook
Looking ahead, we continue to believe that long-term constructive industry fundamentals remain intact. The primary tailwinds
include the significant housing supply shortage that will remain for many years, rental continuing to be an affordable option
given the gap between home ownership and renting, and long-term population growth. Having said that, in the near term,
there are numerous factors that have introduced uncertainty to the multi-family industry. Some of these factors include a
significant volume of supply in certain markets impacting our ability to drive rents, the threat of tariffs which may have a
negative impact on input costs and weaken consumer confidence, temporary pause in positive net immigration, global
geopolitical risks, political uncertainty in Canada and persistently high interest rates across the yield curve. Although many of
these factors are out of our control, Management is focused on continuously adapting to market changes and we believe some
of the steps we have taken to strengthen our balance sheet, increase our cash flow and high grade our portfolio has improved
our resiliency and has us well-positioned to weather current economic uncertainty.
Canada continues to face a large housing shortage. Currently, Canadians do not have enough housing to support our existing
population, let alone to support new immigration. A CMHC report indicated Canada needs over 22 million housing units by 2030
to help achieve housing affordability for all Canadians.1 If current rates of new construction continue, there will be a 3.5 million
housing unit shortfall; this shortfall is expected to remain stubbornly high at 3.1 million even in a low-economic-growth
scenario. While the Federal Government has announced a series of initiatives to address the housing supply issue and the Bank
of Canada has substantially cut interest rates from their peak, CMHC's Fall 2024 Housing Supply Report reasserts that the supply
shortage will persist for years to come as construction rates continue to be below target levels and cannot make up for the
current supply deficit in the short- or medium-term.2
Renting has become an increasingly attractive option for Canadians. The proportion of people who rent instead of owning a
home increased by 250 bps from 2011 to 2021. Over that same period, the number of households that rent increased 21.5%,
more than double the 8.4% increase in the number of households that own their home.3 Average rents have tracked average
hourly wage growth closely, with both increasing at a compounded annual growth rate of approximately 3.4% and 3.2%,
respectively, since 2001, while home ownership costs have significantly outpaced incomes and have grown at a compounded
annual growth rate of 6.4% over the same period.4 The affordability pressures, demographic forces, and behavioural
preferences will continue to drive rental housing demand in 2024 and into 2025.
Canada's population grew by approximately 950,000 in 2024,5 representing total population growth of 2.3% which was driven
by net migration. With the Federal Government's changes to immigration policy, population growth is expected to temporarily
stall in 2025 and 2026 before returning to growth in 2027 at an expected annualized rate of 0.8%.6 Management believes the
current housing shortfall and immigration targets returning to growth in 2027 will continue to drive long-term demand for
rental housing.
Supported by these tailwinds, Management will continue to drive revenue growth by realizing the gain-to-lease potential in the
REIT's high-quality urban portfolio, increasing occupancy especially for suites in downtown Toronto which are facing increased
competition from new condominium deliveries and purpose-built rentals and Calgary which has also experienced a temporary
increase in supply, managing controllable operating expenses, and, where strategically appropriate, completing value-
enhancing suite repositionings. Management's commitment to optimizing NOI and making prudent capital allocation decisions
while balancing long-term value creation and growth objectives will support FFO and AFFO per unit growth in 2025.
Management has remained disciplined and executed on its capital allocation strategy to drive FFO and AFFO per unit growth
and strengthen the balance sheet by fully repaying revolving credit facility while entering the Metro Vancouver market with the
acquisition of Lonsdale Square in a transaction that is expected to be accretive to FFO and AFFO per unit in 2025. The REIT's
strong balance sheet provides financial flexibility and also leaves it well-positioned for future volatility or prolonged periods
where access to capital is limited or expensive.
Management will evaluate future acquisition opportunities strategically, with consideration given to pro forma FFO per unit,
leverage, cost of capital, liquidity, market sentiment, and value creation, among other factors. Management remains committed
to funding developments already in progress, the existing CDL program, suite repositioning and value-enhancing capital, and
purchases under the NCIB program. The sources of capital to fund these initiatives may include operating cash flow,
opportunistic capital recycling, exploring partnership and joint venture opportunities, cash and debt sources. At this time,
Management will maintain a conservative leverage profile, and does not anticipate raising equity at a large discount to NAV.
Minto Apartment Real Estate Investment Trust | Management's Discussion and Analysis - 2024
(in thousands of Canadian dollars, except Unit and per Unit amounts, per suite amounts and other non-financial data)
1 "Housing shortages in Canada: Updating how much housing we need by 2030", CMHC, September 2023.
2 "Fall 2024 Housing Supply Report", CMHC, September 2024.
3 "To buy or to rent: The housing market continues to be reshaped by several factors as Canadians search for an affordable place to call home",
Statistics Canada, September 2022.
4 Sources: Statistics Canada, CMHC, Teranet and Urbanation.
5 Statistics Canada
6 Immigration, Refugees and Citizenship Canada
|
Minto Apartment REIT
2024 Annual Report
11
Development of Purpose-Built Rental Properties and Intensification on Existing Sites
Management evaluates potential development projects that can generate NAV and long-term earnings growth for Unitholders.
Development and construction entail some risk, however, Management believes the REIT can effectively mitigate this risk
through its strategic alliance with MPI and its affiliates by capitalizing on their extensive experience and track record of
successful developments and construction projects.
The REIT is in the process of developing additional rental suites on available excess land at the following properties:
Location and
Property Name
Ownership
Estimated
Suites
Estimated Gross
Project Costs1,2
Construction
Start Date
Estimated
Stabilization
Anticipated
Yield
Toronto, ON
Richgrove
100%
225
$
119,000
Q4 2021
Q2 2026
4.25% - 4.75%
Leslie York Mills
50%
192
191,000
Q4 2021
Q1 2027
3.75% - 4.25%
417
$
310,000
The existing Richgrove community comprises two mid-rise residential apartment buildings with a total of 258 suites and Martin
Grove, a high-rise residential apartment building with 237 suites. The intensification involves the addition of a new tower with
225 suites, including 100 affordable housing suites, and 213 parking stalls. The REIT has negotiated an agreement with the City
of Toronto under which the City has already exempted or waived development charges and other fees amounting to $4,309,
has committed to advance funding of $4,500, of which $1,350 has been received, and has agreed to exempt the property from
property tax and municipal and school taxes for a period of 25 years after first occupancy. A construction financing agreement is
in place with CMHC for a maximum financing of $93,745 at a fixed interest rate of 2.39% for a 10-year term. The major
milestone of building top-off was completed in December 2024 and window and precast installation continues to progress.
Leslie York Mills comprises three existing 18-storey towers with a total of 409 suites. The intensification entails the
development of 192 new rental terrace homes in four blocks, creating an indoor pool, gym and recreational area and replacing
the existing parking structure with a new two-level underground parking garage. Above grade framing and window installation
is in progress and the slab and above grade work for the amenity building is underway.
Current economic conditions and municipal development policy changes have created additional volatility in construction cost
estimates. Management’s strategy for mitigating these risks includes significant budget contingency, managing key vendor
relationships, and exploration of value-engineering opportunities through each stage of the project, coupled with extensive use
of sensitivity analysis for construction costs, interests rates, capitalization rates and project duration to ensure project returns
remain viable under various changing economic conditions.
The construction of the two development projects will add approximately 417 suites to the REIT's portfolio at an estimated total
cost of $310,000, generating an expected average yield between 3.75% and 4.75%.
The REIT is in the process of pre-development activities on excess land at the following property:
Property Name
Location
Ownership
Estimated
Suites
Estimated Pre-
Development Costs3
Site Plan Approval
High Park Village
Toronto
40%
688
$14,400
Q2 20244
High Park Village consists of three buildings comprising 750 rental suites. The REIT and its partner successfully rezoned the site
in Q3 2022 and are completing the remaining pre-development work to finalize planning approvals with the City of Toronto to
develop two new towers comprising an estimated 688 suites and 344 parking stalls. In early Q3 2023, the REIT and its partner
strategically postponed the construction phase of the project. The REIT and its partner continue to work through the pre-
development phase to ensure that construction can commence expediently when it is strategically appropriate.
Minto Apartment Real Estate Investment Trust | Management's Discussion and Analysis - 2024
(in thousands of Canadian dollars, except Unit and per Unit amounts, per suite amounts and other non-financial data)
1 Estimated gross project costs are presented at 100% rather than the REIT's proportionate share.
2 Refer to Section VI - "Supplemental Information - Non-IFRS and Other Financial Measures"
3 Estimated pre-development costs are presented at 100% rather than the REIT's proportionate share.
4 Site Plan Approval in Toronto is achieved in two phases and High Park Village has received the first phase of approval, the Notice of Approval
with Conditions, and is pursuing the completion of the second phase, the Statement of Approval.
| Minto Apartment REIT
2024 Annual Report
12
Access to Urban Pipeline in Target Markets Through MPI and Affiliates
The REIT has entered into agreements to extend CDLs to MPI and partnerships in which MPI is a partner. CDL projects provide a
host of benefits to the REIT including insulation from development risk, the option to purchase newly constructed rental
housing at a discounted price ("CDL Options"), the potential to provide a more economic entry into core, urban markets
compared to acquisitions of existing properties, and the preservation of development capacity under the DOT for intensification
projects.
As at December 31, 2024, the REIT had the following CDL projects:
Project Name
Location
Est.
Suites
Potential
Ownership
Est. Gross
Project
Costs1,2
Construction
Start
Est.
Stabilization
Maximum
Loan
Amount3
Amount
Outstanding at
December 31, 2024
Lonsdale Square
North Vancouver, BC
113
50%4
$
92,000
Q2 2021
Stabilized
$ 14,000 $
14,000
The Hyland
Vancouver, BC
108
85%
86,000
Q1 2022
Q3 2025
19,650
19,073
88 Beechwood
Ottawa, ON
227
100%
128,000
Q4 2021
Q3 2025
51,400
46,219
University Heights Victoria, BC
593
45%5
392,000
Q4 2022
Q4 2026
51,700
44,179
1,041
$
698,000
$ 136,750 $
123,471
On January 31, 2024, MPI repaid the $30,000 CDL advanced by the REIT in connection with the Fifth + Bank development.
Lonsdale Square is part of a large master-planned community and is on a 99-year land lease with the City of North Vancouver.
The property comprises 113 rental suites and approximately 8,000 square feet of retail space. On January 15, 2025, the REIT
acquired a 50% managing ownership interest in the property and received repayment of the $14,000 CDL. See Section I -
"Financial and Operating Highlights - Entry into the Metro Vancouver Market" for more details on the transaction.
The Hyland involves the development of a six-storey mixed-use property in Vancouver comprising 108 rental suites and 12,825
square feet of at-grade retail space. Residential leasing continues and the first tenant move-ins began in September and the
retail space is fully leased. The property is expected to be stabilized in Q3 2025. On February 28, 2025, the option to purchase
expired without the REIT having exercised such option.
88 Beechwood involves the development of a nine-storey property comprising 227 suites and approximately 5,900 square feet
of retail space in Ottawa. All exterior building work is complete, ground floor amenities are complete and remaining interior
work is being finalized. Tenant move-ins began in June 2024 and residential and commercial leasing continues. Stabilization is
expected in Q3 2025.
University Heights involves the development of five buildings containing 593 rental suites and approximately 114,500 square
feet of retail space on an 11.5 acre parcel in Victoria. At the first building, installation of interior fixtures and finishings is
underway, with occupancy expected to begin in Q2 2025. At the second building, window and vapour barrier installation is
complete and drywall installation is underway. Slabs have been poured and framing has commenced at two other buildings.
Retail leasing continues and the project is expected to be fully stabilized in Q4 2026.
In connection with the CDL financings and their associated developments, the REIT has the exclusive option, upon project
stabilization, to purchase the property at 88 Beechwood and MPI's 45% indirect ownership interest in University Heights, at
95% of its then-appraised fair market value as determined by independent and qualified third-party appraisers. The exercise of
each of the CDL Options or purchase of an ownership interest of an asset in the CDL pipeline would require approval by the
independent members of the Board of Trustees.
Minto Apartment Real Estate Investment Trust | Management's Discussion and Analysis - 2024
(in thousands of Canadian dollars, except Unit and per Unit amounts, per suite amounts and other non-financial data)
1 Estimated gross project costs are presented at 100% rather than MPI's proportionate share.
2 Refer to Section VI - "Supplemental Information - Non-IFRS and Other Financial Measures"
3 Maximum loan amounts include amounts for interest reserves.
4 Refer to "Financial and Operating Highlights - Entry into the Metro Vancouver Market"
5 For University Heights, if the REIT exercises its CDL Option, it will acquire an indirect ownership interest in the property.
|
Minto Apartment REIT
2024 Annual Report
13
Capital Recycling Program
The REIT's capital recycling program is an important element of the REIT's strategic plan as it represents an internal source of
equity capital. Management continuously evaluates the portfolio for relative NOI growth potential, NOI margin, repositioning
programs, future capital expenditure requirements, geographic exposure and average age of the portfolio. This program will
allow the REIT to reinvest any equity proceeds into opportunities with enhanced returns that are aligned with the REIT's
strategy. The capital recycling program is an attractive alternative to raising equity from the capital markets which is currently
dilutive to NAV. On February 15, 2024, the REIT sold two properties comprising 311 suites in Ottawa for a combined sale price
of $86,000 and net cash proceeds of $67,956. Subsequent to year end, on January 22, 2025 the REIT closed on the sale of
Castleview, a property in Ottawa, for a sale price of $69,000 generating net proceeds of $33,849, net of mortgages and
transaction costs, as described in Section I - "Overview - Financial and Operating Highlights - Sale of a Non-Core Asset to
Enhance Portfolio Quality". The REIT will remain opportunistic regarding any other potential capital recycling initiatives.
Minto Apartment Real Estate Investment Trust | Management's Discussion and Analysis - 2024
(in thousands of Canadian dollars, except Unit and per Unit amounts, per suite amounts and other non-financial data)
| Minto Apartment REIT
2024 Annual Report
14
Section II - Financial Highlights and Performance
Key Performance Indicators
The REIT's operating results are affected by seasonal variations and prominent economic factors, including economic growth,
the interest rate environment, and inflation, among other factors. As a result, the operating performance and metrics in one
quarter may not be indicative of future quarters. The following tables highlight certain key IFRS and non-IFRS financial and
operating measures used by the REIT.
Operating
Number of properties
28
29
(1)
28
29
(1)
Total suites1
7,726
8,037
(311)
7,726
8,037
(311)
Average monthly rent2
$
1,990
$
1,877
6.0 % $
1,990
$
1,877
6.0 %
Closing occupancy2
95.8 %
97.3 %
(150) bps
95.8 %
97.3 %
(150) bps
Average occupancy2
96.3 %
97.2 %
(90) bps
96.8 %
97.1 %
(30) bps
Average monthly rent2 - Same
Property Portfolio ("SPP")
$
1,990
$
1,886
5.5 % $
1,990
$
1,886
5.5 %
Closing occupancy2 - SPP
95.8 %
97.2 %
(140) bps
95.8 %
97.2 %
(140) bps
Average occupancy2 - SPP
96.3 %
97.2 %
(90) bps
96.8 %
97.1 %
(30) bps
Financial
Revenue
$
39,434
$
40,286
(2.1) % $ 157,088
$ 157,925
(0.5) %
NOI2
$
24,856
$
26,032
(4.5) % $ 100,571
$
99,168
1.4 %
NOI margin2
63.0 %
64.6 %
(160) bps
64.0 %
62.8 %
120 bps
Interest costs2
$
9,380
$
10,409
9.9 % $
37,116
$
42,207
12.1 %
Net income (loss) and comprehensive
income (loss)
$
91,093
$
(77,238)
nmf³ $
63,238
$ (116,659)
nmf³
Revenue - SPP
$
39,434
$
38,108
3.5 % $ 156,319
$ 148,724
5.1 %
NOI2 - SPP
$
24,856
$
24,659
0.8 % $ 100,167
$
93,461
7.2 %
NOI margin2 - SPP
63.0 %
64.7 %
(170) bps
64.1 %
62.8 %
130 bps
FFO2
$
15,828
$
16,012
(1.1) % $
64,719
$
55,258
17.1 %
FFO per unit2
$
0.2413
$
0.2439
(1.1) % $
0.9859
$
0.8417
17.1 %
AFFO2
$
14,233
$
14,472
(1.7) % $
58,307
$
48,634
19.9 %
AFFO per unit2
$
0.2170
$
0.2204
(1.5) % $
0.8882
$
0.7408
19.9 %
AFFO Payout Ratio2
59.3 %
56.7 %
(260) bps
57.1 %
66.5 %
940 bps
Distribution rate per unit
$
0.1287
$
0.1250
3.0 % $
0.5073
$
0.4925
3.0 %
Distribution yield per unit2 based on
Unit closing price
3.90 %
3.12 %
78 bps
3.80 %
3.04 %
76 bps
Normalized
Normalized NOI2, 4
$
24,856
$
25,236
(1.5) % $ 100,571
$
98,502
2.1 %
Normalized NOI margin2,4
63.0 %
62.6 %
40 bps
64.0 %
62.4 %
160 bps
Normalized NOI - SPP2,4
$
24,856
23,883
4.1 % $ 100,167
$
92,815
7.9 %
Normalized NOI margin - SPP2,4
63.0 %
62.7 %
30 bps
64.1 %
62.4 %
170 bps
Normalized FFO2,4
$
15,828
$
15,216
4.0 % $
63,844
$
56,569
12.9 %
Normalized FFO per unit2,4
$
0.2413
$
0.2318
4.1 % $
0.9725
$
0.8617
12.9 %
Normalized AFFO2,4
$
14,233
$
13,676
4.1 % $
57,432
$
49,945
15.0 %
Normalized AFFO per unit2,4
$
0.2170
$
0.2083
4.2 % $
0.8749
$
0.7608
15.0 %
Normalized AFFO Payout Ratio2,4
59.3 %
60.0 %
70 bps
58.0 %
64.7 %
670 bps
Three months ended December 31,
Year ended December 31,
2024
2023
Change
2024
2023
Change
Minto Apartment Real Estate Investment Trust | Management's Discussion and Analysis - 2024
(in thousands of Canadian dollars, except Unit and per Unit amounts, per suite amounts and other non-financial data)
1 At December 31, 2024, includes 2,664 (December 31, 2023 - 2,664) suites co-owned with institutional partners.
2 Refer to Section VI - "Supplemental Information - Non-IFRS and Other Financial Measures"
3 No meaningful figure.
4 Refer to Section IV - "Liquidity, Capital Resources and Contractual Commitments - Reconciliation of Non-IFRS Financial Measures and Ratios"
|
Minto Apartment REIT
2024 Annual Report
15
As at
December 31, 2024
December 31, 2023
Change
Leverage
Debt-to-Gross Book Value ratio1
42.5 %
42.8 %
(30) bps
Debt Service Coverage ratio1
1.68 x
1.55 x
0.13x
Debt-to-Adjusted EBITDA ratio1
11.04 x
11.79 x
(0.75)x
Weighted average term to maturity on Term Debt1
5.04
5.84
(0.80) years
Weighted average effective interest rate on Term Debt1
3.61 %
3.39 %
22 bps
Weighted average interest rate on variable-rate debt1
5.42 %
7.25 %
(183) bps
Valuation
NAV1
$
1,459,319
$
1,494,097
(2.3) %
NAV per unit1
$
22.34
$
22.76
(1.8) %
Review of Financial Performance
The following tables highlight selected financial information for the REIT's Same Property Portfolio and Total Portfolio for the
three months and years ended December 31, 2024 and 2023.
Same Property Portfolio
Three months ended December 31,
Year ended December 31,
2024
2023
Change
2024
2023
Change
Revenue from investment properties
$
39,434
$
38,108
3.5 % $ 156,319
$ 148,724
5.1 %
Property operating costs
7,700
6,291
(22.4) %
29,313
27,989
(4.7) %
Property taxes
3,916
3,914
(0.1) %
15,650
15,096
(3.7) %
Utilities
2,962
3,244
8.7 %
11,189
12,178
8.1 %
Operating expenses
14,578
13,449
(8.4) %
56,152
55,263
(1.6) %
NOI1
$
24,856
$
24,659
0.8 % $ 100,167
$
93,461
7.2 %
NOI margin1
63.0 %
64.7 %
(170) bps
64.1 %
62.8 %
130 bps
Minto Apartment Real Estate Investment Trust | Management's Discussion and Analysis - 2024
(in thousands of Canadian dollars, except Unit and per Unit amounts, per suite amounts and other non-financial data)
1 Refer to Section VI - "Supplemental Information - Non-IFRS and Other Financial Measures"
| Minto Apartment REIT
2024 Annual Report
16
Total Portfolio
Three months ended December 31,
Year ended December 31,
2024
2023
Change
2024
2023
Change
Revenue from investment properties
$
39,434
$
40,286
(2.1) % $
157,088
$
157,925
(0.5) %
Property operating costs
7,700
6,636
(16.0) %
29,572
29,568
— %
Property taxes
3,916
4,172
6.1 %
15,760
16,187
2.6 %
Utilities
2,962
3,446
14.0 %
11,185
13,002
14.0 %
Operating expenses
14,578
14,254
(2.3) %
56,517
58,757
3.8 %
NOI1
24,856
26,032
(4.5) %
100,571
99,168
1.4 %
NOI margin1
63.0 %
64.6 %
(160) bps
64.0 %
62.8 %
120 bps
General and administrative expenses
2,340
2,460
4.9 %
10,061
10,446
3.7 %
Finance costs - operations
15,570
13,628
(14.3) %
50,186
56,669
11.4 %
Finance income
(2,028)
(2,065)
(1.8) %
(7,873)
(7,381)
6.7 %
Fair value loss (gain) on:
Investment properties
11,732
21,208
44.7 %
61,279
101,627
39.7 %
Class B LP Units
(91,430)
65,675
nmf²
(73,144)
54,858
nmf²
Interest rate swap
205
1,070
80.8 %
1,246
751
(65.9) %
Unit-based compensation
(1,962)
1,024
nmf²
(1,585)
596
nmf²
Loss on disposition
—
1,054
100.0 %
615
1,402
56.1 %
Fees and other income
(664)
(784)
(15.3) %
(3,452)
(3,141)
9.9 %
Net income (loss) and comprehensive
income (loss)
$
91,093
$
(77,238)
nmf² $
63,238
$ (116,659)
nmf²
Net Operating Income1,2
For Q4 2024, Same Property Portfolio NOI increased by 0.8% over Q4 2023. This was driven by unfurnished suite revenue
growth of 5.3% and a decrease in natural gas costs by 18.7%, partially offset by a 22.4% increase in property operating costs and
a 48.6% decrease in commercial lease revenue driven by the temporary vacancy at Minto Yorkville due to the sudden departure
of the previous tenant.
For FY 2024, Same Property Portfolio NOI increased by 7.2% over FY 2023. This was driven by unfurnished suite revenue growth
of 6.5% and a 21.0% decrease in natural gas expenses, partially offset by a 4.7% increase in property operating costs, a 7.5%
decrease in furnished suite revenue and a 26.1% decrease in commercial lease revenue driven by the temporary Minto Yorkville
vacancy.
For Q4 2024, Total Portfolio NOI decreased by 4.5% over Q4 2023, due to the loss of revenue associated with the disposed
properties, partially offset by the decreased operating expenses associated with the disposed properties.
For FY 2024, Total Portfolio NOI increased by 1.4% over FY 2023, due to the factors driving the Same Property Portfolio NOI and
the decreased operating expenses associated with the disposed properties, partially offset by the loss of revenue associated
with the disposed properties.
Minto Apartment Real Estate Investment Trust | Management's Discussion and Analysis - 2024
(in thousands of Canadian dollars, except Unit and per Unit amounts, per suite amounts and other non-financial data)
1 Refer to Section VI - "Supplemental Information - Non-IFRS and Other Financial Measures"
2 No meaningful figure.
|
Minto Apartment REIT
2024 Annual Report
17
Revenue from Investment Properties
Same Property Portfolio
Three months ended December 31,
Year ended December 31,
2024
2023
Change
2024
2023
Change
Rental revenue
Unfurnished suites
$
34,493 $
32,757
5.3 % $
135,843 $
127,582
6.5 %
Furnished suites
1,822
2,040
(10.7) %
7,927
8,567
(7.5) %
Commercial leases
322
626
(48.6) %
1,545
2,090
(26.1) %
Parking revenue
1,528
1,401
9.1 %
5,904
5,538
6.6 %
Other property income
1,269
1,284
(1.2) %
5,100
4,947
3.1 %
$
39,434 $
38,108
3.5 % $
156,319 $
148,724
5.1 %
Total Portfolio
Three months ended December 31,
Year ended December 31,
2024
2023
Change
2024
2023
Change
Rental revenue
Unfurnished suites
$
34,493 $
34,844
(1.0) % $
136,581 $
136,401
0.1 %
Furnished suites
1,822
2,040
(10.7) %
7,927
8,567
(7.5) %
Commercial leases
322
626
(48.6) %
1,545
2,090
(26.1) %
Parking revenue
1,528
1,467
4.2 %
5,928
5,815
1.9 %
Other property income
1,269
1,309
(3.1) %
5,107
5,052
1.1 %
$
39,434 $
40,286
(2.1) % $
157,088 $
157,925
(0.5) %
Revenue from investment properties consists of rental revenue from residential lease agreements relating to unfurnished suites
and furnished suites, rental revenue from commercial lease agreements, parking revenue and other property income. Other
property income consists of ancillary revenue from laundry facilities, telecommunication commission revenue, membership fee
revenue, other fee income from tenants and recoveries of utility charges and operating costs.
Rental Revenue from Unfurnished Suites
For Q4 2024, Same Property Portfolio rental revenue from unfurnished suites increased by 5.3% over Q4 2023. This was
primarily due to a 5.5% increase in Same Property Portfolio average monthly rent to $1,990 and 15 suite conversions from
furnished to unfurnished suites completed since Q4 2023, partially offset by a 90 bps decrease in Same Property Portfolio
average occupancy to 96.3%.
For FY 2024, Same Property Portfolio rental revenue from unfurnished suites increased by 6.5% over FY 2023, primarily due to a
5.5% increase in Same Property Portfolio average monthly rent to $1,990 and 15 suite conversions from furnished to
unfurnished suites completed since Q4 2023, while Same Property Portfolio average occupancy decreased by 30 bps to 96.8%.
Same Property Portfolio Revenue and Average Occupancy1
38,108
38,174
38,893
39,818
39,434
97.2%
96.9%
96.9%
97.1%
96.3%
Revenue ($)
Average occupancy (%)
Q4 2023
Q1 2024
Q2 2024
Q3 2024
Q4 2024
$30,000
$32,000
$34,000
$36,000
$38,000
$40,000
85%
88%
90%
93%
95%
98%
100%
Minto Apartment Real Estate Investment Trust | Management's Discussion and Analysis - 2024
(in thousands of Canadian dollars, except Unit and per Unit amounts, per suite amounts and other non-financial data)
1 Refer to Section VI - "Supplemental Information - Non-IFRS and Other Financial Measures"
| Minto Apartment REIT
2024 Annual Report
18
Same Property Portfolio
Three months ended December 31,
Year ended December 31,
2024
2023
Change
2024
2023
Change
Average Occupancy1
Toronto
95.3 %
97.5 %
(220) bps
95.4 %
97.8 %
(240) bps
Ottawa
97.2 %
97.8 %
(60) bps
97.8 %
97.7 %
10 bps
Alberta
94.4 %
97.8 %
(340) bps
96.8 %
97.9 %
(110) bps
Montreal
96.5 %
95.4 %
110 bps
96.1 %
94.7 %
140 bps
96.3 %
97.2 %
(90) bps
96.8 %
97.1 %
(30) bps
Total Portfolio
Three months ended December 31,
Year ended December 31,
2024
2023
Change
2024
2023
Change
Average Occupancy1
Toronto
95.3 %
97.5 %
(220) bps
95.4 %
97.8 %
(240) bps
Ottawa
97.2 %
97.9 %
(70) bps
97.8 %
97.8 %
— bps
Alberta
94.4 %
97.3 %
(290) bps
96.8 %
97.4 %
(60) bps
Montreal
96.5 %
95.4 %
110 bps
96.1 %
94.7 %
140 bps
96.3 %
97.2 %
(90) bps
96.8 %
97.1 %
(30) bps
For Q4 2024, Total Portfolio revenue from unfurnished suites decreased by 1.0% from Q4 2023. This was driven by the decrease
in unfurnished revenue associated with the disposed properties, partially offset by the increased unfurnished revenue in the
Same Property Portfolio.
For FY 2024, Total Portfolio revenue from unfurnished suites was effectively flat compared to FY 2023. This was driven by the
increased unfurnished revenue in the Same Property Portfolio, offset by the decrease in unfurnished revenue associated with
the disposed properties.
Rental Revenue from Furnished Suites2
For Q4 2024, rental revenue from furnished suites for the Same Property Portfolio and Total Portfolio decreased by 10.7% from
Q4 2023. This was driven by lower average occupancy for furnished suites of 61.9% for an average number of furnished suites
of 164, down from 66.8% for an average number of furnished suites of 181 in Q4 2023, partially offset by a slight increase in
average monthly rent for furnished suites to $5,935 from $5,912 over the same period. Management has completed 15 suite
conversions of furnished suites to unfurnished since Q4 2023 and is assessing further suite conversions in 2025.
For FY 2024, rental revenue from furnished suites for the Same Property Portfolio and Total Portfolio decreased by 7.5% over FY
2023. This was driven by lower average occupancy for furnished suites of 64.5% for an average number of furnished suites of
171, down from 70.2% for an average number of furnished suites of 184 in FY 2023, partially offset by a 5.6% increase in
average monthly rent for furnished suites to $5,943 from $5,630 for FY 2023.
Rental Revenue from Commercial Leases
For Q4 2024 and FY 2024, revenue from commercial leases for the Same Property Portfolio and Total Portfolio decreased by
48.6% and 26.1%, respectively, over the same periods in 2023, driven by the temporary retail vacancy at Minto Yorkville,
partially offset by increased commercial occupancy at Niagara West. In Q4 2024, the REIT executed a new commercial lease
agreement at The Carlisle with lease payments commencing in 2025. The REIT is in active negotiations to re-lease the ground
floor commercial space at Minto Yorkville and anticipates lease payments to begin in 2026.
Parking Revenue
For Q4 2024 and FY 2024, Same Property Portfolio parking revenue increased by 9.1% and 6.6%, respectively, over the same
periods in 2023, due to increased average monthly parking rates and usage.
For Q4 2024 and FY 2024, Total Portfolio parking revenue increased by 4.2% and 1.9% respectively, over the same periods in
2023, as the increased revenue in the Same Property Portfolio was partially offset by the decrease in parking revenue
associated with the disposed properties.
Minto Apartment Real Estate Investment Trust | Management's Discussion and Analysis - 2024
(in thousands of Canadian dollars, except Unit and per Unit amounts, per suite amounts and other non-financial data)
12Refer to Section VI - "Supplemental Information - Non-IFRS and Other Financial Measures"
|
Minto Apartment REIT
2024 Annual Report
19
Other Property Income
For Q4 2024, Same Property Portfolio other property income was effectively flat compared to Q4 2023, while increasing by
3.1% in FY 2024 compared to FY 2023 due to increased telecommunication revenue and leasing of rooftop antennas.
For Q4 2024, Total Portfolio other property income decreased by 3.1% over Q4 2023, while increasing by 1.1% in FY 2024
compared to FY 2023, as the results for the Same Property Portfolio were partially offset by the other property income
associated with the disposed properties.
Property Operating Costs
2024
2023
Change
2024
2023
Change
Property operating costs
$
7,700
$
6,291
(22.4) % $
29,313
$
27,989
(4.7) %
% of revenue from investment properties
19.5 %
16.5 %
18.8 %
18.8 %
Total Portfolio
Three months ended December 31,
Year ended December 31,
2024
2023
Change
2024
2023
Change
Property operating costs
$
7,700
$
6,636
(16.0) % $
29,572
$
29,568
— %
% of revenue from investment properties
19.5 %
16.5 %
18.8 %
18.7 %
Same Property Portfolio
Three months ended December 31,
Year ended December 31,
Property operating costs relate to direct costs associated with operating the properties and providing services to tenants,
including repairs and maintenance, insurance, site staff salaries, cleaning costs, leasing costs, supplies, and waste removal.
For Q4 2024, Same Property Portfolio property operating costs increased by 22.4% over Q4 2023, primarily due to increases in
repairs and maintenance and salaries and wages. The increase in repairs and maintenance was primarily due to the one-time
adjustment to accrual estimates for repairs and maintenance costs in Q4 2023.1 The increase in salaries and wages was mainly
due to annual salary and wage increases.
For FY 2024, Same Property Portfolio property operating costs increased by 4.7% over FY 2023, primarily due to an increase in
repairs and maintenance driven by the one-time adjustment to accrual estimates for repairs and maintenance costs in Q4
2023,1 annual salary and wage increases, and an increase in digital advertising.
For Q4 2024, Total Portfolio property operating costs increased by 16.0% from Q4 2023, as the increased expenses for the Same
Property Portfolio were partially offset by the decrease in expenses associated with the disposed properties.
For FY 2024, Total Portfolio property operating costs were effectively flat over FY 2023, as the increased expenses for the Same
Property Portfolio were offset by the decrease in expenses associated with the disposed properties.
Minto Apartment Real Estate Investment Trust | Management's Discussion and Analysis - 2024
(in thousands of Canadian dollars, except Unit and per Unit amounts, per suite amounts and other non-financial data)
1 Refer to Section IV - "Liquidity, Capital Resources and Contractual Commitments - Reconciliation of Non-IFRS Financial Measures and Ratios"
for a reconciliation of normalized results.
| Minto Apartment REIT
2024 Annual Report
20
Property Taxes
2024
2023
Change
2024
2023
Change
Property taxes
$
3,916
$
3,914
(0.1) % $
15,650
$
15,096
(3.7) %
% of revenue from investment properties
9.9 %
10.3 %
10.0 %
10.2 %
Total Portfolio
Three months ended December 31,
Year ended December 31,
2024
2023
Change
2024
2023
Change
Property taxes
$
3,916
$
4,172
6.1 % $
15,760
$
16,187
2.6 %
% of revenue from investment properties
9.9 %
10.4 %
10.0 %
10.2 %
Same Property Portfolio
Three months ended December 31,
Year ended December 31,
For Q4 2024 and FY 2024, Same Property Portfolio property taxes increased by 0.1% and 3.7%, respectively, over the same
periods in 2023, driven by increases in assessed values in Calgary and Montreal and increased rates in Toronto and Ottawa.
For Q4 2024 and FY 2024, Total Portfolio property taxes decreased by 6.1% and 2.6%, respectively, over the same periods in
2023, due to the decrease in property taxes associated with the disposed properties, partially offset by the factors driving the
increase in Same Property Portfolio property taxes.
Utilities
Same Property Portfolio
Three months ended December 31,
Year ended December 31,
2024
2023
Change
2024
2023
Change
Electricity
$
1,076
$
1,127
4.5 % $
4,533
$
4,572
0.9 %
Natural gas
1,131
1,391
18.7 %
3,670
4,643
21.0 %
Water
755
726
(4.0) %
2,986
2,963
(0.8) %
$
2,962
$
3,244
8.7 % $
11,189
$
12,178
8.1 %
% of revenue from investment properties
7.5 %
8.5 %
7.2 %
8.2 %
Total Portfolio
Three months ended December 31,
Year ended December 31,
2024
2023
Change
2024
2023
Change
Electricity
$
1,076
$
1,181
8.9 % $
4,523
$
4,883
7.4 %
Natural gas
1,131
1,442
21.6 %
3,643
4,784
23.9 %
Water
755
823
8.3 %
3,019
3,335
9.5 %
$
2,962
$
3,446
14.0 % $
11,185
$
13,002
14.0 %
% of revenue from investment properties
7.5 %
8.6 %
7.1 %
8.2 %
Utilities consist of electricity, natural gas and water for the rental properties. Utility costs are seasonal and can be highly
variable from one period to the next. In addition to seasonality-driven usage, occupancy, utility rates and commodity prices
impact costs.
Minto Apartment Real Estate Investment Trust | Management's Discussion and Analysis - 2024
(in thousands of Canadian dollars, except Unit and per Unit amounts, per suite amounts and other non-financial data)
|
Minto Apartment REIT
2024 Annual Report
21
For Q4 2024, Same Property Portfolio utilities costs decreased by 8.7% over Q4 2023, primarily driven by an 18.7% decrease in
natural gas expenses due to lower gas prices and decreased consumption across the portfolio, and a 4.5% decrease in electricity
costs due to favourable average rates in Calgary.
For FY 2024, Same Property Portfolio utilities costs decreased by 8.1% compared to FY 2023, primarily driven by a 21.0%
decrease in natural gas expenses due to a significant drop in gas prices, coupled with a milder winter which reduced
consumption. Electricity costs were effectively flat compared to FY 2023, as rate decreases in Calgary partially offset rate
increases across the remaining geographies.
Total Portfolio utilities costs decreased by 14.0% for both Q4 2024 and FY 2024 over the same periods in 2023. The decrease
was due to the factors driving the Same Property Portfolio, in addition to the decrease in utilities costs associated with the
disposed properties.
Same Property Portfolio Utilities Costs as a Percentage of Revenue1
11.0%
7.2%
6.1%
8.5%
9.2%
6.4%
5.6%
7.5%
Q1 2023
Q2 2023
Q3 2023
Q4 2023
Q1 2024
Q2 2024
Q3 2024
Q4 2024
6.0%
9.0%
12.0%
15.0%
General and Administrative Expenses
General and administrative expenses relate to the administration of the REIT, including: audit fees, legal fees, salaries and
benefits for REIT employees, Trustee fees and costs associated with support services provided under the Administrative Support
Agreement ("ASA") between the REIT and MPI.
For Q4 2024, general and administrative expenses decreased by 4.9% compared to Q4 2023, driven by reduced professional
fees.
For FY 2024, general and administrative expenses decreased by 3.7% compared to FY 2023, due to the Q2 2023 write-off of
property investigation costs incurred in a previous year.
Minto Apartment Real Estate Investment Trust | Management's Discussion and Analysis - 2024
(in thousands of Canadian dollars, except Unit and per Unit amounts, per suite amounts and other non-financial data)
1 Same Property Portfolio utilities costs as a percentage of revenue is representative of Total Portfolio utilities costs as a percentage of revenue.
| Minto Apartment REIT
2024 Annual Report
22
Finance Costs - Operations
Three months ended December 31,
Year ended December 31,
2024
2023
Change
2024
2023
Change
Interest expense on mortgages and
loans
$
6,643 $
6,543
(1.5) % $
25,613 $
26,728
4.2 %
Interest expense and standby fees on
credit facility
1,370
2,454
44.2 %
6,577
10,445
37.0 %
Financing amortization and other
charges
268
339
20.9 %
1,268
1,221
(3.8) %
Amortization of mark-to-market
adjustments
(74)
(44)
68.2 %
(293)
(588)
(50.2) %
Capitalized interest
(1,133)
(905)
25.2 %
(4,502)
(2,905)
55.0 %
Distributions on Class C LP Units
2,306
2,022
(14.0) %
8,453
7,306
(15.7) %
Interest costs1
9,380
10,409
9.9 %
37,116
42,207
12.1 %
Debt retirement costs
—
—
— %
—
1,779
100.0 %
Distributions on Class B LP Units
6,190
3,219
(92.3) %
13,070
12,683
(3.1) %
$
15,570 $
13,628
(14.3) % $
50,186 $
56,669
11.4 %
Finance costs comprise interest expense on fixed and variable-rate mortgages and a construction loan, interest expense and
standby fees on the revolving credit facility, financing amortization and other charges, and distributions on Class B limited
partnership units of the Partnership ("Class B LP Units") and Class C limited partnership units of the Partnership ("Class C LP
Units"), partially offset by capitalized interest expense.
Interest costs for Q4 2024 and FY 2024 decreased by 9.9% and 12.1%, respectively, over the same periods in 2023. This was
primarily as a result of a lower average outstanding balance on the revolving variable-rate credit facility compared to the same
periods in 2023, higher capitalized interest from intensification projects, and, for FY 2024, lower interest expense on mortgages.
The lower interest expense on mortgages was driven by the asset sales completed subsequent to Q4 2023 and the Q2 2023
refinancing of two variable-rate mortgages with a weighted average effective interest rate of 7.55% to CMHC-insured fixed rate
mortgages with a weighted average effective interest rate of 4.14%. These cost decreases were partially offset by upward
refinancings on Term Debt completed in Q2 2023 and Q3 2023, which had a net 25 bps higher weighted average effective
interest rate compared to the previous in-place effective interest rates. The interest expense for mortgages increased in Q4
2024 as the REIT completed the upward financing for three CMHC-insured mortgages and one conventional fixed-rate mortgage
to support the LYM development as described in Section I - Financial and Operating Highlights - Strengthening the Balance
Sheet and Reducing Variable-Rate Debt Exposure.
For Q4 2024 and FY 2024, Class B LP Unit distributions increased by 92.3% and 3.1%, respectively, over the same periods in
2023. In Q3 2024, a holder of Class B LP Units elected to receive a non-interest bearing loan equal to the distributions they
would have otherwise received. On January 2, 2025, the non-interest bearing loan matured, was repaid in full, and a
distribution equal to the loan balance was paid to the holder. This was partially offset by the increase in the monthly
distribution in Q4 2023 from $0.04083 to $0.04208 per Unit and in Q4 2024 from $0.04208 to $0.04333 per Unit.
Finance Income
Finance income comprises interest income on CDLs, a Unit purchase loan made to a member of Management, and interest on
bank deposits.
For Q4 2024, finance income decreased by 1.8% compared to Q4 2023 due to decreased interest income earned on CDLs. The
average total CDL amount outstanding during Q4 2023 decreased by 1.0% from $123,788 to $122,603 during Q4 2024.
For FY 2024, finance income increased by 6.7% compared to FY 2023 due to increased interest income earned on CDLs. The
average total CDL amount outstanding for FY 2023 increased by 11.2% from $115,096 to $128,039 for FY 2024 due to advances
for ongoing construction as discussed in Section I - "Outlook - Access to Urban Pipeline in Target Markets Through MPI and
Affiliates".
Minto Apartment Real Estate Investment Trust | Management's Discussion and Analysis - 2024
(in thousands of Canadian dollars, except Unit and per Unit amounts, per suite amounts and other non-financial data)
1 Refer to Section VI - "Supplemental Information - Non-IFRS and Other Financial Measures"
|
Minto Apartment REIT
2024 Annual Report
23
Fair Value Gain (Loss) on Investment Properties
Fair value of residential investment properties is predominantly determined using the direct capitalization approach, by
applying an appropriate capitalization rate to the estimated 12-month stabilized forecasted NOI for each property, reduced by
an estimate of five-year future capital expenditures. Estimated 12-month stabilized forecasted NOI is based on the respective
property’s forecasted results, less estimated aggregate future capital expenditures. Capitalization rates reflect the
characteristics, location and market of each property. Fair value is determined based on internal valuation models incorporating
market data and valuations performed by external appraisers.
The fair value gain (loss) on investment properties was a result of movement in the following:
Three months ended December 31,
Year ended December 31,
2024
2023
2024
2023
Forecast NOI1
$
17,540 $
57,065
$
99,276 $
176,492
Capitalization rates
(18,569)
(69,275)
(121,143)
(232,260)
Capital expenditure reserve
(10,703)
(8,998)
(39,412)
(45,859)
$
(11,732) $
(21,208) $
(61,279) $
(101,627)
Increases in capitalization rates of 12.5 bps to 25 bps since Q3 2024 for select residential properties in Ottawa and Toronto
were offset by forecast NOI growth across the broader portfolio in Q4 2024 due to realized and forecasted leasing results
continuing to outpace expense inflation. The weighted average capitalization rate used for the Q4 2024 valuation of residential
properties was 4.32%, compared to 4.28% in Q3 2024 and 4.16% in Q4 2023. The adjustment is driven by market data indicating
that capitalization rates have experienced slight upward pressure in Ontario as transaction volume continues to recover
through Q4 2024, while other geographies saw capitalization rates remain stable through the quarter. In addition, the capital
expenditure reserve increased based on timing changes of planned capital projects and sustainability initiatives. Collectively,
adjustments to capitalization rates, forecast NOI, and the capital expenditure reserve resulted in a $11,732 fair value loss.
The fair value loss for FY 2024 was due to increases in capitalization rates of 12.5 to 50 bps primarily within Ottawa, Toronto,
and Montreal residential properties and an increase in the capital expenditure reserve, which were partially offset by growth in
forecast NOI. Collectively, adjustments to capitalization rates, forecast NOI, and the capital expenditure reserve resulted in a
$61,279 fair value loss.
The capitalization rates of the portfolio for each of the REIT's residential rental markets were as follows:
As at
December 31, 2024
December 31, 2023
Low
High
Low
High
Ottawa, Ontario
4.25%
4.82%
4.13%
4.63%
Toronto, Ontario2
3.75%
4.25%
3.63%
3.88%
Calgary, Alberta2
4.50%
5.13%
5.00%
5.13%
Montreal, Quebec
4.13%
4.38%
4.00%
4.25%
Weighted-average capitalization rate
4.32%
4.16%
Fair Value Loss (Gain) on Class B LP Units
The Class B LP Units are economically equivalent to Units, in that they receive distributions equivalent to the distributions paid
on Units and are exchangeable into Units at the holder's option. The Class B LP Units are classified as financial liabilities and
measured at fair value with any changes in fair value recorded in net income. The fair value gain or loss on Class B LP Units is
measured every period by reference to the closing trading price of the Units. An increase in the Unit closing price over the
period results in a fair value loss, whereas a decrease in the Unit closing price over the period results in a fair value gain.
Minto Apartment Real Estate Investment Trust | Management's Discussion and Analysis - 2024
(in thousands of Canadian dollars, except Unit and per Unit amounts, per suite amounts and other non-financial data)
1 Refer to Section VI - "Supplemental Information - Non-IFRS and Other Financial Measures"
2 For The International and Niagara West properties, due to the stabilized operations, market stability, and capital expenditures among other
factors, the valuation methodology was transitioned from a discounted cash flow approach to the direct capitalization approach with their
capitalization rates included in the table above effective Q1 2024.
| Minto Apartment REIT
2024 Annual Report
24
The change in Unit price for the periods presented was as follows:
Three months ended December 31,
Year ended December 31,
2024
2023
2024
2023
Unit price - opening
$
16.89
$
13.63
$
16.18
$
14.05
Unit price - closing
13.34
16.18
13.34
16.18
The decrease in the Unit price for Q4 2024 and FY 2024 resulted in a fair value gain of $91,430 and $73,144, respectively. For
the same periods in 2023, the increase in the Unit price resulted in a fair value loss of $65,675 and $54,858, respectively.
Fair Value Loss (Gain) on Interest Rate Swap
The REIT has an interest rate swap to receive variable interest based on one-month Canadian Overnight Repo Rate Average
("CORRA") plus 215 bps and pay fixed interest at 3.38%. The swap is remeasured at each reporting date using discounted cash
flow analysis. Effective July 2, 2024, in connection with the benchmark interest rate reform in Canada to replace Canadian
Dollar Overnight Rate ("CDOR") with CORRA, the REIT amended the terms of the interest rate swap to replace the one-month
bankers' acceptance plus 185 bps with the economically equivalent one-month CORRA plus 215 bps. The fixed interest rate that
the REIT pays remained unchanged.
For Q4 2024 and FY 2024, the REIT recognized a fair value loss of $205 and $1,246, respectively. For the same periods in 2023,
the REIT recognized a fair value loss of $1,070 and $751, respectively. The changes in each period were primarily a result of
changes in variable interest rates.
Fair Value Loss (Gain) on Unit-Based Compensation
The REIT has issued Deferred Units to its Trustees and has issued Deferred Units and Performance Units to its executives. The
liabilities are remeasured at each reporting date based on the closing Unit price and, for Performance Units, inputs to a pricing
model. The change in Unit price is relative primarily to the opening Unit price with changes in the value recorded in net income.
For Q4 2024 and FY 2024, the REIT recognized a fair value gain of $1,962 and $1,585, respectively, due to decreases in the Unit
price and revised performance estimates for Performance Units. For the same periods in 2023, the REIT recognized a fair value
loss of $1,024 and $596, respectively, primarily due to increases in the Unit price.
Loss on Disposition
Disposal costs represent the incremental costs incurred to dispose of a property. The REIT incurred disposal costs of $615 in FY
2024 in connection with the sale of Tanglewood and Chesterton/Bowhill in Ottawa in February 2024. In Q4 2023, the REIT
incurred disposal costs of $1,054 in connection with the sale of York House and The Lancaster House in Edmonton in December
2023. For FY 2023, the REIT incurred disposal costs of $1,402 in connection with the sale of Hi-Level Place in Edmonton in March
2023 and the aforementioned two Edmonton properties in December 2023.
Fees and Other Income
Fees and other income represent revenue from asset, project and property management services provided by the REIT in
connection with four properties co-owned with institutional partners and insurance recoveries.
For Q4 2024, fees and other income decreased by 15.3% over Q4 2023 primarily due to a decrease in revenue from
management services.
For FY 2024, fees and other income increased by 9.9% over FY 2023 primarily due to an increase in insurance recoveries
received in FY 2024, which were partially offset by a decrease in revenue from management services.
Minto Apartment Real Estate Investment Trust | Management's Discussion and Analysis - 2024
(in thousands of Canadian dollars, except Unit and per Unit amounts, per suite amounts and other non-financial data)
|
Minto Apartment REIT
2024 Annual Report
25
Summary of Quarterly Results
Q4 2024
Q3 2024
Q2 2024
Q1 2024
Q4 2023
Q3 2023
Q2 2023
Q1 2023
Total assets
$ 2,645,415 $ 2,621,906 $ 2,604,850 $ 2,576,201 $ 2,702,120 $ 2,723,608 $ 2,720,278 $ 2,738,165
Investment properties1
$ 2,483,224 $ 2,463,929 $ 2,445,357 $ 2,431,060 $ 2,540,533 $ 2,572,645 $ 2,574,302 $ 2,603,182
Total liabilities
$ 1,529,668 $ 1,587,238 $ 1,523,291 $ 1,522,545 $ 1,624,739 $ 1,564,003 $ 1,583,749 $ 1,553,741
Total non-current liabilities and
Class B LP Units
$ 1,297,369 $ 1,390,014 $ 1,381,032 $ 1,427,737 $ 1,487,405 $ 1,427,391 $ 1,438,635 $ 1,165,077
Revenue from investment
properties
$ 39,434
$ 39,818
$ 38,893
$ 38,943
$ 40,286
$ 39,835
$ 39,401
$ 38,403
NOI2
$ 24,856
$ 26,376
$ 24,895
$ 24,444
$ 26,032
$ 25,828
$ 24,572
$ 22,736
NOI margin²
63.0 %
66.2 %
64.0 %
62.8 %
64.6 %
64.8 %
62.4 %
59.2 %
Net income (loss) and
comprehensive income (loss)
$ 91,093
$ (41,851)
$ 32,790
$ (18,794)
$ (77,238)
$ 27,815
$ (43,009)
$ (24,227)
FFO²
$ 15,828
$ 17,203
$ 16,649
$ 15,039
$ 16,012
$ 15,692
$ 11,925
$ 11,629
FFO per unit²
$ 0.2413
$ 0.2620
$ 0.2535
$ 0.2290
$ 0.2439
$ 0.2390
$ 0.1817
$ 0.1772
Normalized FFO per unit²
$ 0.2413
$ 0.2588
$ 0.2452
$ 0.2272
$ 0.2318
$ 0.2390
$ 0.2125
$ 0.1785
AFFO²
$ 14,233
$ 15,607
$ 15,040
$ 13,427
$ 14,472
$ 14,041
$ 10,188
$
9,933
AFFO per unit²
$ 0.2170
$ 0.2377
$ 0.2290
$ 0.2045
$ 0.2204
$ 0.2139
$ 0.1552
$ 0.1513
Normalized AFFO per unit²
$ 0.2170
$ 0.2345
$ 0.2207
$ 0.2026
$ 0.2083
$ 0.2139
$ 0.1860
$ 0.1526
Distributions declared3
$ 11,305
$
5,417
$
8,292
$
8,289
$
8,205
$
8,042
$
8,040
$
8,041
AFFO Payout Ratio2
59.3 %
53.1 %
55.1 %
61.7 %
56.7 %
57.3 %
78.9 %
81.0 %
Normalized AFFO Payout Ratio
59.3 %
53.8 %
57.2 %
62.3 %
60.0 %
57.3 %
65.9 %
80.3 %
Distribution rate per unit
$ 0.1287
$ 0.1262
$ 0.1262
$ 0.1262
$ 0.1250
$ 0.1225
$ 0.1225
$ 0.1225
The REIT's operating results are affected by seasonal variations and other factors, including changing interest rates and
inflation. As a result, the operating performance and metrics in one quarter may not be indicative of future quarters. The winter
months typically tend to generate weaker performance due to higher energy consumption and snow clearing costs, as well as
lower suite turnover. The best performing quarters in any given year are typically the second and third quarters, where stronger
leasing demand and higher turnover provide an opportunity to realize more of the gain-to-lease potential.
Detailed analysis on the REIT's operating results for Q4 2024 and the impacts on FFO per unit and AFFO per unit can be found in
Section I - "Overview - Financial and Operating Highlights - Financial Performance" and the status of the REIT's organic growth
initiatives are in Section I - "Financial and Operating Highlights - Execution of Organic Growth Strategy".
Minto Apartment Real Estate Investment Trust | Management's Discussion and Analysis - 2024
(in thousands of Canadian dollars, except Unit and per Unit amounts, per suite amounts and other non-financial data)
1 Including residential properties held for sale for Q4 2024 and Q4 2023.
2 Refer to Section VI - "Supplemental Information - Non-IFRS and Other Financial Measures"
3 Includes distributions on Units and Class B LP Units, and excludes the Special Distribution.
| Minto Apartment REIT
2024 Annual Report
26
Summary of Annual Results
As at and for the year ended December 31,
2024
2023
2022
Total assets
$
2,645,415 $
2,702,120 $
2,734,812
Investment properties1
$
2,483,224 $
2,540,533 $
2,611,094
Total liabilities
$
1,529,668 $
1,624,739 $
1,521,275
Total non-current liabilities and Class B LP Units
$
1,297,369 $
1,487,405 $
1,189,744
Revenue from investment properties
$
157,088 $
157,925 $
143,790
NOI2
$
100,571 $
99,168 $
87,796
NOI margin2
64.0%
62.8%
61.1%
Net income (loss) and comprehensive income
(loss)
$
63,238 $
(116,659) $
225,400
FFO2
$
64,719 $
55,258 $
54,177
FFO per unit2
$
0.9859 $
0.8417 $
0.8353
Normalized FFO per unit2,3
$
0.9725 $
0.8617 $
0.8215
AFFO2
$
58,307 $
48,634 $
47,443
AFFO per unit2
$
0.8882 $
0.7408 $
0.7315
Normalized AFFO per unit2,3
$
0.8749 $
0.7608 $
0.7176
Distributions declared4
$
33,303 $
32,328 $
31,042
AFFO Payout Ratio2
57.1%
66.5%
65.4%
Distribution rate per unit
$
0.5073 $
0.4925 $
0.4775
NAV2
$
1,459,319 $
1,494,097 $
1,575,395
NAV per unit2
$
22.34 $
22.76 $
24.00
The REIT began FY 2024 with a portfolio of 29 multi-residential rental properties comprising 8,0375 suites across Ottawa,
Toronto, Montreal, and Calgary with a value of $2,540,533. During the year, the REIT completed the sale of 311 suites in Ottawa
which brought the total suite count down to 7,726.5 Investment property values faced continued headwinds from a prolonged
high interest rate environment and limited transaction volumes in the first half of the year, which put upward pressure on
capitalization rates through the year and impacted NAV and NAV per unit. The REIT was able to secure net upward financing
proceeds of $90,366 for four properties, offering financial flexibility entering 2025. Operationally, the REIT benefited from
strong market fundamentals and was able to improve performance with disciplined capital allocation to deliver NOI, FFO per
unit and AFFO per unit growth. Given the REIT's strong performance and Management's confidence in the outlook for 2025, the
REIT increased its monthly distribution by 3.0% in November 2024.
Minto Apartment Real Estate Investment Trust | Management's Discussion and Analysis - 2024
(in thousands of Canadian dollars, except Unit and per Unit amounts, per suite amounts and other non-financial data)
1 Including residential properties held for sale for Q4 2024 and Q4 2023.
2 Refer to "Section VI - Supplemental Information - Non-IFRS and Other Financial Measures"
3 Refer to Section IV - "Liquidity, Capital Resources and Contractual Commitments - Reconciliation of Non-IFRS Financial Measures and Ratios"
4 Includes distributions on Units and Class B LP Units, and excludes the Special Distribution.
5 Total suites includes 2,664 suites co-owned with institutional partners.
|
Minto Apartment REIT
2024 Annual Report
27
Section III - Assessment of Financial Position
Investment Properties
The following table summarizes the changes in investment properties:
Residential
properties
Commercial
properties
Development
properties
Total
Balance, December 31, 2023
$
2,339,678 $
26,972 $
87,883 $
2,454,533
Additions
Capital expenditures
38,103
361
—
38,464
Development expenditures
—
—
51,376
51,376
Transfer to assets held for sale
(69,000)
—
—
(69,000)
Other
25
105
—
130
Fair value loss
(42,877)
(2,462)
(15,940)
(61,279)
Balance, December 31, 2024
$
2,265,929 $
24,976 $
123,319 $
2,414,224
Disposition of Investment Properties
On February 15, 2024, the REIT closed on the disposition of two properties in Ottawa for an aggregate sale price of $86,000 and
net cash proceeds of $67,956 net of mortgages and transaction costs, as described in Section I - "Overview - Outlook - Capital
Recycling Program".
Subsequent to year end, on January 22, 2025, the REIT closed on the disposition of Castleview in Ottawa for an aggregate sale
price of $69,000 and net cash proceeds of $33,849, net of mortgages and transaction costs, as described in Section I - "Overview
- Financial and Operating Highlights - Sale of a Non-Core Asset to Enhance Portfolio Quality".
Acquisition of Investment Properties
Subsequent to year end, on January 15, 2025, the REIT acquired a 50% managing ownership interest in Lonsdale Square for
$52,963, see Section I - "Financial and Operating Highlights - Entry into the Metro Vancouver Market" for more details on the
transaction.
Capital Expenditures
The REIT has a capital improvement program in place that is designed to extend the useful life of its investment properties,
improve operating efficiency, increase curb appeal, enhance and maintain earnings capacity and meet the expectations of its
tenants. The REIT’s capital expenditures are classified into two main categories: value-enhancing capital expenditures and
maintenance capital expenditures.
Three months ended December 31,
Year ended December 31,
2024
2023
2024
2023
Value-enhancing capital expenditures
Building improvements
$
11,080 $
8,937
$
28,650 $
32,495
Suite upgrades
1,455
1,362
3,702
5,782
12,535
10,299
32,352
38,277
Maintenance capital expenditures
1,483
1,474
6,112
6,138
Total capital expenditures
14,018
11,773
38,464
44,415
Maintenance capital expenditures per
suite
$
239 $
222
$
978 $
915
Value-enhancing capital expenditures consist of either building improvements or suite upgrades. Building improvements include
common area and amenity space upgrades, energy conservation projects, building envelope enhancements and suite
enhancements performed, when necessary, as suites turn over. Suite upgrades represent capital expenditures incurred on
larger repositioning programs that are designed to generate incremental returns. The repositioning programs include full-scale
suite renovations that strategically target certain properties or certain geographic locations, as discussed previously in Section I
- "Overview - Financial and Operating Highlights - Value Creation - Repositioning".
Minto Apartment Real Estate Investment Trust | Management's Discussion and Analysis - 2024
(in thousands of Canadian dollars, except Unit and per Unit amounts, per suite amounts and other non-financial data)
| Minto Apartment REIT
2024 Annual Report
28
Value-enhancing renovations are intended to generate NAV accretion, long term FFO and AFFO accretion and increase tenant
satisfaction, however they tend to be FFO and AFFO dilutive in the short term owing to vacancy during renovation.
Maintenance capital expenditures include expenditures that are incurred in order to maintain the existing earning capacity of
the REIT’s investment properties. Any exterior work is highly dependent on favourable weather conditions and, as a result, a
significant portion of the exterior work is performed between the months of May and September and therefore actual
maintenance capital expenditures in a given quarter may not be indicative of future quarters.
Maintenance capital expenditures for Q4 2024 and FY 2024 were $1,483 and $6,112 or $239 and $978 per suite, respectively,
and primarily related to maintenance of plumbing, electrical and mechanical systems, roofing, safety systems, parking garages
and common areas at various buildings.
In 2024, Management targeted approximately $975 per suite on average for maintenance capital expenditures on an annual
basis, subject to costing pressures from inflation, availability of trades and supply chain constraints. Due to the increased cost of
materials, labour, salaries and other inputs required to maintain investment properties, beginning in 2025, Management is
targeting $1,000 per suite on average for annual maintenance capital expenditures.
Development Expenditures
Development expenditures are a component of the REIT's growth and value-creation strategy. These include projects which add
to the REIT's existing suite count through intensification or redevelopment of existing assets. Development expenditures are
intended to generate NAV accretion and long-term FFO and AFFO accretion. The REIT is currently developing two projects on
excess land available at Richgrove and Leslie York Mills and is working through pre-clearance conditions for a third project at
High Park Village, as discussed under Section I - "Overview - Outlook - Development of Purpose-Built Rental Properties and
Intensification on Existing Sites". The breakdown of the REIT's share of development expenditures incurred in connection with
these projects is as follows:
Three months ended December 31,
Year ended December 31,
2024
2023
2024
2023
Richgrove
$
11,088 $
4,640
$
30,375 $
18,326
Leslie York Mills
5,795
4,732
20,623
9,395
High Park Village
49
227
378
1,229
$
16,932 $
9,599
$
51,376 $
28,950
The construction of the Richgrove project continues as planned, with development expenditures in Q4 2024 primarily related to
above grade work with building top-off completed in December 2024. As of December 31, 2024, the REIT had incurred gross
project costs of $68,160, and forecasts $50,840 in remaining expenditures with stabilization in Q2 2026.
Construction at Leslie York Mills also continues to progress, with expenditures in the quarter primarily related to framing and
the slab and above grade work for the amenity building. As of December 31, 2024, the gross project costs incurred were
$74,346. Management forecasts $116,654 in remaining expenditures, with stabilization in Q1 2027.1
In early Q3 2023, the REIT made the strategic decision to postpone the advancement of construction on the High Park Village
development. As of December 31, 2024, the total pre-development project costs incurred were $9,849.1
Valuation
Refer to Section II - "Review of Financial Performance - Fair Value Gain (Loss) on Investment Properties" for details on the
valuation method used for the REIT's investment properties.
Class B LP Units
The Class B LP Units receive distributions equivalent to the distributions paid on Units and are exchangeable at the holder’s
option into Units. One Special Voting Unit in the REIT is issued to the holder of Class B LP Units for each Class B LP Unit held. The
limited IAS 32 exception for presentation as equity does not extend to Class B LP Units. As a result, the Class B LP Units are
classified as financial liabilities. Holders of the Class B LP Units may elect to be loaned amounts equal to the amounts which
would otherwise have been distributed to them, and have the aggregate amount of those distributions made to them, on the
maturity date of the loan, which is on the first business day following the end of the year during which the loan was made.
Minto Apartment Real Estate Investment Trust | Management's Discussion and Analysis - 2024
(in thousands of Canadian dollars, except Unit and per Unit amounts, per suite amounts and other non-financial data)
1 Incurred costs and forecast expenditures are presented at 100% rather than the REIT's proportionate share.
|
Minto Apartment REIT
2024 Annual Report
29
As at December 31, 2024, there were 25,755,029 (December 31, 2023 - 25,755,029) Class B LP Units outstanding.
Class C LP Units
The Class C LP Units provide for distributions to the holder of such Class C LP Units to be paid in priority to distributions to
holders of the Units and Class B LP Units. Due to the nature of such distributions, the Class C LP Units are classified as financial
liabilities.
As at December 31, 2024, there were 25,556,082 (December 31, 2023 - 25,556,082) Class C LP Units outstanding.
On February 15, 2024, in connection with the sale of Chesterton/Bowhill, the REIT paid a distribution of $7,591 to MPI for the
partial repayment of mortgages associated with the property related to the Class C LP Units.
At December 31, 2024, the mortgages of investment properties to which the distributions on the Class C LP Units relate had a
weighted average effective interest rate of 4.20% (December 31, 2023 - 3.45%) and mature at various dates between 2025 and
2033. The effective interest rate varies from the contractual interest rate as it includes the amortization of mark-to-market
adjustments, fees, premiums, and other borrowing costs.
Subsequent to year end, on January 22, 2025, the REIT completed the disposition of one property in Ottawa, Ontario for a sale
price of $69,000. The REIT used $34,547 of sale proceeds to redeem for cancellation 4,130,092 Class C LP Units from the holder
of the Class C LP Units to repay the mortgage associated with the property.
Mortgages and Loan
The REIT maintains mortgages with fixed and variable interest rates that are secured by investment properties. At December 31,
2024, the weighted average effective interest rate was 3.46% (December 31, 2023 - 3.37%). The fixed rate mortgages mature at
various dates between 2025 and 2033. The REIT's fixed rate mortgages include a variable-rate mortgage that is fixed at 3.38%
through an interest rate swap.
On February 15, 2024, in connection with the sale of Tanglewood, the REIT repaid the $9,659 mortgage secured by the
property, which had an effective interest rate of 5.94%.
In March 2024, the REIT refinanced three maturing mortgages with an outstanding balance of $19,481 and a weighted average
effective interest rate of 2.85%. The mortgages were each refinanced with an effective interest rate of 4.53% and mature in
March 2029.
In November 2024, the REIT secured upward financing net of deferred financing costs of $72,996 for three properties. The
CMHC-insured mortgages have a weighted average effective interest rate of 3.89% and mature in December 2029. In December
2024, the REIT also secured fixed rate conventional upward financing to support the development of LYM with proceeds of
$21,194, which has an effective interest rate of 4.65% and matures in January 2028.
The REIT has a fixed rate non-revolving construction loan to finance its Richgrove development. The $93,745 construction loan
bears interest at 2.39% and matures on March 1, 2032. As at December 31, 2024, $40,403 (December 31, 2023 - $15,155) was
drawn. Payments are made monthly on an interest-only basis.
Credit Facility
As at December 31, 2024, the REIT had available credit under its revolving credit facility of $208,344 (December 31, 2023 -
$236,034), which is the lesser of the total commitment and the lending value. The availability enables the REIT to maintain
financial flexibility and to continue to capitalize on opportunities to drive long-term NAV growth. The credit facility is secured by
several investment properties and is used to fund working capital requirements, acquisitions, letters of credit and for general
corporate purposes. On June 26, 2024, in connection with the benchmark interest rate reform in Canada to replace CDOR with
CORRA, the REIT amended the terms of the revolving credit facility to replace the one-month bankers' acceptance plus 175 bps
with the economically equivalent Adjusted Canadian Overnight Repo Rate Average ("Adjusted CORRA") plus 175 bps. The credit
facility bears interest at the one-month Adjusted CORRA plus 175 bps (December 31, 2023 - one-month bankers' acceptance
plus 175 bps) or prime plus 75 bps. As at December 31, 2024, the weighted average variable interest rate was 5.42%
(December 31, 2023 - 7.25%).
Subsequent to year end, on March 4, 2025, the REIT amended the terms of its credit facility to reduce the commitment from
$300,000 to $200,000.
Minto Apartment Real Estate Investment Trust | Management's Discussion and Analysis - 2024
(in thousands of Canadian dollars, except Unit and per Unit amounts, per suite amounts and other non-financial data)
| Minto Apartment REIT
2024 Annual Report
30
December 31, 2024
December 31, 2023
Committed
$
300,000 $
300,000
Available
208,344
236,034
Utilized
Amounts drawn
24,500
140,236
Letter of credit
2,022
2,022
26,522
142,258
Undrawn amount available
$
181,822 $
93,776
Units
Units
$
Authorized
Unlimited
Units issued and outstanding:
Balance, December 31, 2023
39,898,612 $
711,021
Units issued for vested Deferred Units, net of issue costs
18,049
260
Cancellation of Units under normal course issuer bid
(337,842)
(6,020)
Units issued in special non-cash distribution, net of issue costs
2,255,508
30,050
Consolidation of units issued pursuant to special non-cash distribution
(2,255,508)
—
Balance, December 31, 2024
39,578,819 $
735,311
Normal Course Issuer Bid
On September 25, 2024, the REIT initiated an NCIB which is active from September 27, 2024 to September 26, 2025. The REIT's
previous NCIB expired on September 19, 2024. Details regarding activity under the NCIB during FY 2024 and through March 5,
2025 can be found in Section I - "Overview - Financial and Operating Highlights - Normal Course Issuer Bid".
Distributions
Distributions are paid monthly to Unitholders of record at the close of business on the last day of a month, on or about the 15th
day of the following month. Distributions must be approved by the Board of Trustees and are subject to change depending on
the general economic outlook and financial performance of the REIT.
For Q4 2024 and FY 2024, distributions to Unitholders of $5,115 and $20,233 (Q4 2023 and FY 2023 - $4,986 and $19,645),
respectively, were declared based on approved monthly distributions of $0.04208 (2023 - $0.04083) per Unit for the months of
January to October and $0.04333 (2023 - $0.04208) per Unit for the months of November and December.
On November 12, 2024, the Board of Trustees approved a 3.0% increase to the REIT's annual distribution from $0.5050 per Unit
to $0.5200 per Unit. The monthly distribution will be $0.04333 per Unit, up from $0.04208 per Unit. The increase was effective
for the REIT's November 2024 cash distribution, to be paid on December 16, 2024.
Special Non-Cash Distribution in Units and Consolidation of Units
On December 31, 2024, the REIT issued 2,255,508 Units at a price of $13.3362 per Unit, for a total value of $30,080.
Immediately following the issuance, the Units were consolidated such that each Unitholder held the same number of Units as
each Unitholder held prior to the Special Distribution as described in Section I - "Overview - Financial and Operating Highlights -
Special Distribution".
Minto Apartment Real Estate Investment Trust | Management's Discussion and Analysis - 2024
(in thousands of Canadian dollars, except Unit and per Unit amounts, per suite amounts and other non-financial data)
|
Minto Apartment REIT
2024 Annual Report
31
Section IV - Liquidity, Capital Resources and Contractual
Commitments
Liquidity and Capital Resources
The REIT's capital structure, shown in the table below, is Class B LP Units, Class C LP Units, mortgages, a construction loan, a
credit facility and Unitholders' equity.
Liabilities (principal amounts outstanding):
Class B LP Units
$
343,572 $
416,716
Class C LP Units
214,169
226,929
Mortgages
851,822
780,582
Construction loan
40,403
15,155
Credit facility
24,500
140,236
1,474,466
1,579,618
Unitholders' equity
1,115,747
1,077,381
$
2,590,213 $
2,656,999
As at
December 31, 2024
December 31, 2023
Class B LP Units are economically equivalent to Units and are exchangeable for Units at the Class B LP Unitholder’s option. Due
to their exchange feature, IAS 32 requires Class B LP Units to be accounted for as a financial liability. Class B LP Units are not
indebtedness for borrowed money and are not included in the determination of Debt-to-Gross Book Value ratio.
The objective of the REIT’s capital strategy is to arrange capital at the lowest possible cost while maintaining diversity in its
lending base, balance in its maturity schedule and sufficient liquidity to fund the ongoing operations of the REIT and pay
distributions. At December 31, 2024, 85% (December 31, 2023 - 75%) of the REIT's Total Debt is CMHC insured and
approximately 95% (December 31, 2023 - 88%) is fixed rate, including variable-rate debt fixed through an interest rate swap.
The REIT uses a prudent amount of debt financing in its capital structure. Pursuant to the REIT’s DOT, overall indebtedness, as
measured by the Debt-to-Gross Book Value ratio, is not to exceed 65% (or 70% of Gross Book Value including convertible
debentures). Notwithstanding this limit, it is Management’s current intention to maintain a more conservative Debt-to-Gross
Book Value ratio. The REIT’s Debt-to-Gross Book Value ratio and liquidity as a percentage of Total Debt are calculated as
follows:
Class C LP Units
$
214,290
$
227,411
Mortgages
846,079
774,662
Construction loan
40,403
15,155
Credit facility
24,500
140,236
Total Debt1
1,125,272
1,157,464
Total assets
2,645,415
2,702,120
Debt-to-Gross Book Value ratio1
42.5 %
42.8 %
Total liquidity1
$
187,700
$
97,516
Total liquidity as a percentage of Total Debt
16.7 %
8.4 %
As at
December 31, 2024
December 31, 2023
The REIT continues to maintain a conservative overall leverage position with a Debt-to-Gross Book Value ratio of 42.5% at
December 31, 2024.
While the REIT has sufficient liquidity, Management oversees its liquidity prudently given the current capital market conditions.
The REIT's liquidity ratio (Total liquidity as a percentage of Total Debt) was 16.7% at December 31, 2024, compared to 8.4% at
December 31, 2023.
Minto Apartment Real Estate Investment Trust | Management's Discussion and Analysis - 2024
(in thousands of Canadian dollars, except Unit and per Unit amounts, per suite amounts and other non-financial data)
1 Refer to "Section VI - Supplemental Information - Non-IFRS and Other Financial Measures"
| Minto Apartment REIT
2024 Annual Report
32
Management measures the Debt-to-Adjusted EBITDA ratio as a measure of the REIT's financial health and liquidity. Generally,
the lower the ratio, the lower the credit risk. The REIT’s Debt-to-Adjusted EBITDA ratio is calculated as follows:
NOI1
$
100,571 $
99,168
General and administrative expenses
(10,061)
(10,446)
Finance income
7,873
7,381
Fees and other income
3,452
3,141
101,835
99,244
Impact on NOI of stabilized earnings from dispositions
(404)
(1,375)
Adjusted EBITDA1
101,431
97,869
Total Debt1
1,125,272
1,157,464
Cash
5,878
3,740
Total Debt, net of cash1
$
1,119,394 $
1,153,724
Debt-to-Adjusted EBITDA ratio1
11.04x
11.79x
December 31, 2024
December 31, 2023
The REIT's Debt-to-Adjusted EBITDA ratio improved by 0.75x compared to December 31, 2023 driven by the REIT's strong
operating performance and deleveraging. The REIT uses a combination of equity and debt to finance the intensification of
existing sites (refer to Section I - "Overview - Outlook - Development of Purpose-Built Rental Properties and Intensification on
Existing Sites"). Any increased debt arising from these transactions may not be immediately matched by increased NOI until the
development projects stabilize, resulting in a temporary increase to the Debt-to-Adjusted EBITDA ratio.
The REIT has staggered the maturities of its debt financings, including distributions payable on the Class C LP Units, to reduce
interest rate risk and its risk related to refinancing. As at December 31, 2024, the weighted average term to maturity on Term
Debt was 5.04 years (December 31, 2023 - 5.84 years) and the weighted average effective interest rate on Term Debt was
3.61% (December 31, 2023 - 3.39%). The contractual payments under the REIT’s debt financing are summarized in the table
below.
2025
$
14,572 $
3,789
$ 41,016
2.70% $
95,020
4.25% $ 24,500
5.42% $
—
—% $ 178,897 15.8%
2026
13,309
2,000
72,524
3.12%
—
—%
—
—%
—
—%
87,833
7.8%
2027
13,063
2,079
—
—%
21,425
3.05%
—
—%
—
—%
36,567
3.2%
2028
12,611
1,391
91,980
4.25%
—
—%
—
—%
—
—%
105,982
9.4%
2029
11,594
1,311
177,666
3.52%
9,680
5.41%
—
—%
—
—%
200,251 17.7%
2030
7,192
1,132
162,943
2.45%
11,292
3.49%
—
—%
—
—%
182,559 16.1%
Thereafter
9,043
2,375
224,309
4.12%
62,675
4.50%
—
—%
40,403
2.39%
338,805 30.0%
$
81,384 $
14,077
$ 770,438
$ 200,092
$ 24,500
$
40,403
$ 1,130,894 100%
Principal Repayments
Principal at Maturity and Weighted Average Effective Interest Rate
Total
% of
Total
Year
Mortgages Class C LP Units
Mortgages
Class C LP Units
Credit facility
Construction loan
As of December 31, 2024, current liabilities, excluding Class B LP Units which are exchangeable for Units, of $232,299
(December 31, 2023 - $137,334) exceeded current assets of $95,926 (December 31, 2023 - $71,589), resulting in a net working
capital deficit of $136,373 (December 31, 2023 - $65,745). Current liabilities as of December 31, 2024 include $125,990
(December 31, 2023 - $75,301) of debt financing which the REIT is actively in the process of refinancing. The REIT's immediate
liquidity needs are met through cash-on-hand, cash flow from operations, refinancing of maturing mortgages and availability on
its credit facility. As of December 31, 2024, liquidity was $187,700 (December 31, 2023 - $97,516), an increase of 92.5% from
December 31, 2023, consisting of cash of $5,878 (December 31, 2023 - $3,740) and $181,822 (December 31, 2023 - $93,776) of
available borrowing capacity under the credit facility. Management believes that there is sufficient liquidity to meet the REIT’s
financial obligations. On January 22, 2025, the REIT used $34,547 of the Castleview sale proceeds to redeem for cancellation
4,130,092 Class C LP Units from the holder of the Class C LP Units to repay the mortgage associated with the property.
Minto Apartment Real Estate Investment Trust | Management's Discussion and Analysis - 2024
(in thousands of Canadian dollars, except Unit and per Unit amounts, per suite amounts and other non-financial data)
1 Refer to Section VI - "Supplemental Information - Non-IFRS and Other Financial Measures"
|
Minto Apartment REIT
2024 Annual Report
33
Cash Flows
As at December 31, 2024, the REIT held a cash balance of $5,878 (December 31, 2023 - $3,740). The sources and use of cash
flow for the three months and years ended December 31, 2024 and 2023 are as follows:
Three months ended December 31,
Year ended December 31,
2024
2023
2024
2023
Operating activities
$
29,751 $
28,995
$
95,870 $
92,966
Financing activities
(972)
(1,492)
(110,013)
(7,619)
Investing activities
(29,044)
(27,397)
16,281
(86,930)
Cash Provided by Operating Activities and Cash Distributions
The following table outlines the differences between cash from operating activities, net income and cash distributions in
accordance with National Policy 41-201, Income Trusts and Other Indirect Offerings:
Three months ended December 31,
Year ended December 31,
2024
2023
2024
2023
Net income (loss) and comprehensive
income (loss)
$
91,093 $
(77,238) $
63,238 $
(116,659)
Add: distributions on Class B LP Units
6,190
3,219
13,070
12,683
97,283
(74,019)
76,308
(103,976)
Less: distributions paid1
(5,461)
(8,125)
(28,415)
(32,248)
Excess (shortfall) of net income (loss) and
comprehensive income (loss) over total
distributions paid
$
91,822 $
(82,144) $
47,893 $
(136,224)
Cash provided by operating activities
29,751
28,995
95,870
92,966
Add: interest received
283
817
1,362
2,938
Less: interest paid
(10,191)
(10,891)
(40,346)
(43,960)
19,843
18,921
56,886
51,944
Less: distributions paid1
(5,461)
(8,125)
(28,415)
(32,248)
Excess of cash provided by operating
activities over total distributions and
interest paid
14,382
10,796
28,471
19,696
Distributions declared2
$
11,305 $
8,205
$
33,303 $
32,328
For Q4 2024 and FY 2024, distributions paid was in excess of net income and comprehensive income. Distributions are better
evaluated in the context of operating cash flows rather than net income, as net income is impacted by several non-cash items,
including fair value gains or losses on investment properties, Class B LP Units, Unit-based compensation and an interest rate
swap.
While cash flows provided by operating activities are generally sufficient to cover distribution requirements, the timing of
expenses may result in a temporary shortfall. In these cases, some portion of distributions may come from the REIT's capital or
financing sources. For Q4 2024 and FY 2024, cash provided by operating activities was in excess of total distributions and
interest paid.
Minto Apartment Real Estate Investment Trust | Management's Discussion and Analysis - 2024
(in thousands of Canadian dollars, except Unit and per Unit amounts, per suite amounts and other non-financial data)
1 Distributions paid on REIT Units and Class B LP Units.
2 Includes distributions on REIT Units and Class B LP Units, and excludes the Special Distribution.
| Minto Apartment REIT
2024 Annual Report
34
Cash Used in Financing Activities
Three months ended December 31,
Year ended December 31,
2024
2023
2024
2023
Proceeds from mortgage financing
$
95,102 $
—
$
95,102 $
317,122
Proceeds from construction loan
9,036
—
25,248
7,149
Net (repayments) proceeds from credit
facility
(75,424)
22,584
(115,736)
(16,922)
Principal repayments on mortgages
(3,584)
(3,688)
(14,203)
(14,036)
Proceeds from issuance of Class C LP Units
—
—
—
25,774
CMHC premiums and financing costs
(4,447)
—
(4,502)
(13,981)
Mortgage payments on refinancing
—
—
—
(230,999)
Mortgage payments on disposition
—
—
(9,659)
—
Distributions on various classes of units
(6,722)
(9,497)
(41,175)
(37,766)
Interest paid
(10,191)
(10,891)
(40,346)
(43,960)
Purchase and cancellation of Units
(4,742)
—
(4,742)
—
$
(972) $
(1,492) $
(110,013) $
(7,619)
For Q4 2024, cash flows used in by financing activities included net repayments on the credit facility, interest paid, distributions
on various classes of units, purchase and cancellation of Units under the NCIB program, and payments of financing costs and
principal repayments on mortgages. This was partially offset by mortgage financing proceeds and draws on the construction
loan in connection with the Richgrove development.
For FY 2024, cash flows used in financing activities included net repayments on the credit facility, distributions on various
classes of units, interest paid, principal repayments on mortgages, payments of financing costs, and the purchase and
cancellation of Units under the NCIB program. This was offset by proceeds on mortgage financing and draws on the
construction loan.
Cash (Used in) Provided by Investing Activities
Three months ended December 31,
Year ended December 31,
2024
2023
2024
2023
Capital additions to investment properties
$
(12,967) $
(12,315) $
(39,551) $
(48,087)
Development expenditures
(13,459)
(6,594)
(40,768)
(21,141)
Loan advances to Class B LP Unitholders
(2,901)
—
(4,819)
—
Loan advances to related parties
—
(16,321)
(14,351)
(30,586)
Loan repayments from related parties
—
—
30,056
45
Net proceeds on disposition of investment
properties
—
7,016
84,352
9,901
Interest received
283
817
1,362
2,938
$
(29,044) $
(27,397) $
16,281 $
(86,930)
Cash flows used in investing activities for Q4 2024 included development expenditures on the three projects in the portfolio,
capital expenditures on investment properties and loan advances to Class B LP Unitholders, partially offset by interest received
from related parties on CDLs.
Cash flows provided by investing activities for FY 2024 included net proceeds on the disposition of Tanglewood and Chesterton/
Bowhill, the repayment received for the Fifth + Bank CDL and interest received from related parties on CDLs. This was partially
offset by development expenditures on the three projects in the portfolio, capital expenditures on investment properties, and
loan advances on the University Heights CDL and to Class B LP Unitholders.
Minto Apartment Real Estate Investment Trust | Management's Discussion and Analysis - 2024
(in thousands of Canadian dollars, except Unit and per Unit amounts, per suite amounts and other non-financial data)
|
Minto Apartment REIT
2024 Annual Report
35
Reconciliation of Non-IFRS Financial Measures and Ratios
The following section includes reconciliations of Non-IFRS Financial Measures and Ratios used by the REIT. Refer to Section VI -
"Supplemental Information - Non-IFRS and Other Financial Measures" for definitions of each of these measures.
FFO and AFFO
FFO and AFFO are non-IFRS financial measures. The REIT's method of calculating FFO and AFFO is substantially in accordance
with the recommendations of the Real Property Association of Canada (REALPAC), but may differ from other issuers’ methods
and, accordingly, may not be comparable to FFO and AFFO reported by other issuers. FFO and AFFO are used for evaluating
operating performance and are calculated as follows:
Q4 2024
Q3 2024
Q2 2024
Q1 2024
Q4 2023
Q3 2023
Q2 2023
Q1 2023
Net (loss) income and comprehensive
(loss) income
$
91,093 $ (41,851) $
32,790 $ (18,794) $ (77,238) $
27,815 $ (43,009) $ (24,227)
Distributions on Class B LP Units
6,190
377
3,252
3,251
3,219
3,155
3,154
3,155
Disposition costs on investment property
—
—
—
615
1,054
—
—
348
Fair value loss (gain) on:
Investment properties
11,732
2,582
8,360
38,605
21,208
21,216
45,700
13,503
Class B LP Units
(91,430)
54,343
(27,558)
(8,499)
65,675
(35,799)
6,696
18,286
Interest rate swap
205
766
333
(58)
1,070
(73)
(656)
410
Unit-based compensation
(1,962)
986
(528)
(81)
1,024
(622)
40
154
Funds from operations (FFO)
$
15,828 $
17,203 $
16,649 $
15,039 $
16,012 $
15,692 $
11,925 $
11,629
Maintenance capital expenditure reserve
(1,514)
(1,514)
(1,514)
(1,539)
(1,496)
(1,510)
(1,510)
(1,520)
Amortization of mark-to-market
adjustments
(74)
(74)
(72)
(73)
(44)
(141)
(227)
(176)
Commercial straight-line rent adjustments
(7)
(8)
(23)
—
—
—
—
—
Adjusted funds from operations (AFFO)
$
14,233 $
15,607 $
15,040 $
13,427 $
14,472 $
14,041 $
10,188 $
9,933
Weighted average number of Units and
Class B LP Units issued and outstanding
65,586,166 65,671,690 65,669,554 65,659,537 65,653,641 65,651,608 65,642,641 65,642,641
FFO per unit
$ 0.2413 $ 0.2620 $ 0.2535 $ 0.2290 $ 0.2439 $ 0.2390 $ 0.1817 $ 0.1772
AFFO per unit
$ 0.2170 $ 0.2377 $ 0.2290 $ 0.2045 $ 0.2204 $ 0.2139 $ 0.1552 $ 0.1513
Distribution rate per unit
$
0.1287 $
0.1262 $
0.1262 $
0.1262 $
0.1250 $
0.1225 $
0.1225 $
0.1225
AFFO Payout Ratio
59.3 %
53.1 %
55.1 %
61.7 %
56.7 %
57.3 %
78.9 %
81.0 %
Normalized FFO per unit
$ 0.2413 $ 0.2588 $ 0.2452 $ 0.2272 $ 0.2318 $ 0.2390 $ 0.2125 $ 0.1785
Normalized AFFO per unit
$ 0.2170 $ 0.2345 $ 0.2207 $ 0.2026 $ 0.2083 $ 0.2139 $ 0.1860 $ 0.1526
Normalized AFFO Payout Ratio
59.3 %
53.8 %
57.2 %
62.3 %
60.0 %
57.3 %
65.9 %
80.3 %
For Q4 2024, FFO and AFFO were lower as compared to the same periods in 2023, primarily due to decreased NOI from
increased operating expenses due to the one-time adjustment in Q4 2023 to the accrual estimates for repairs and maintenance
costs and the loss of revenue associated with disposed properties, as detailed in Section II - "Financial Highlights and
Performance - Review of Financial Performance".
Minto Apartment Real Estate Investment Trust | Management's Discussion and Analysis - 2024
(in thousands of Canadian dollars, except Unit and per Unit amounts, per suite amounts and other non-financial data)
| Minto Apartment REIT
2024 Annual Report
36
December 31, 2024
December 31, 2023
December 31, 2022
Net (loss) income and comprehensive (loss)
income
$
63,238 $
(116,659) $
225,400
Distributions on Class B LP Units
13,070
12,683
11,942
Disposition costs on investment property
615
1,402
—
Issuance costs on Class B LP Units
—
—
175
Fair value loss (gain) on:
Investment properties
61,279
101,627
18,828
Class B LP Units
(73,144)
54,858
(197,531)
Interest rate swap
1,246
751
(2,391)
Unit-based compensation
(1,585)
596
(2,246)
Funds from operations (FFO)
$
64,719 $
55,258 $
54,177
Maintenance capital expenditure reserve
(6,081)
(6,036)
(5,991)
Amortization of mark-to-market adjustments
(293)
(588)
(743)
Commercial straight-line rent adjustments
(38)
—
—
Adjusted funds from operations (AFFO)
$
58,307 $
48,634 $
47,443
Weighted average number of Units and Class B
LP Units issued and outstanding
65,646,639
65,647,644
64,858,981
FFO per unit
$
0.9859 $
0.8417 $
0.8353
AFFO per unit
$
0.8882 $
0.7408 $
0.7315
Distribution rate per unit
$
0.5073 $
0.4925 $
0.4775
AFFO Payout Ratio
57.1%
66.5%
65.4%
Normalized FFO per unit
$
0.9725 $
0.8617 $
0.8215
Normalized AFFO per unit
$
0.8749 $
0.7608 $
0.7176
Normalized AFFO payout ratio
58.0%
64.7%
66.7%
For FY 2024, FFO and AFFO were higher as compared to FY 2023, reflecting strong operational performance and reduced
interest costs.
Maintenance capital expenditures include expenditures that are incurred in order to maintain the existing earning capacity of
the REIT’s investment properties. The maintenance capital expenditure reserve amount included in the AFFO calculation was
based on the REIT's expectation of spending approximately $975 per suite in 2024. Beginning in 2025, Management expects to
spend $1,000 per suite on an annual basis. Refer to Section III - "Assessment of Financial Position - Investment Properties -
Capital Expenditures" for a more detailed discussion of maintenance capital expenditures.
Minto Apartment Real Estate Investment Trust | Management's Discussion and Analysis - 2024
(in thousands of Canadian dollars, except Unit and per Unit amounts, per suite amounts and other non-financial data)
|
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2024 Annual Report
37
Certain nonrecurring items on the REIT's consolidated statements of net income and comprehensive income are not indicative
of the REIT's overall operating performance. Excluding the impact of these items, Q4 2024 Normalized FFO per unit and
Normalized AFFO per unit growth was 4.1% and 4.2%, respectively over Q4 2023. FY 2024 Normalized FFO per unit and
Normalized AFFO per unit growth was 12.9% and 15.0%, respectively over FY 2023. These nonrecurring adjustments are
detailed below:
Three months ended December 31,
Year ended December 31,
2024
2023
2024
2023
FFO
15,828
16,012
64,719
55,258
AFFO
14,233
14,472
58,307
48,634
Normalizing Items
Normalizing items for NOI1
$
—
$
(796)
$
—
$
(666)
Debt retirement costs
—
—
—
1,779
Property investigation cost write-offs
—
—
—
417
Insurance recoveries
—
—
(875)
(219)
—
(796)
(875)
1,311
Normalized FFO
$
15,828
$
15,216
$
63,844
$
56,569
Normalized FFO per unit
$
0.2413
$
0.2318
$
0.9725
$
0.8617
Normalized AFFO
$
14,233
$
13,676
$
57,432
$
49,945
Normalized AFFO per unit
$
0.2170
$
0.2083
$
0.8749
$
0.7608
Distribution rate per unit
$
0.1287
$
0.1250
$
0.5073
$
0.4925
Normalized AFFO Payout Ratio
59.3%
60.0%
58.0%
64.7%
NOI and NOI Margin
Same Property Portfolio
Three months ended December 31,
Year ended December 31,
2024
2023
2024
2023
Revenue from investment properties
$
39,434
$
38,108
$
156,319
$
148,724
Operating expenses
14,578
13,449
56,152
55,263
NOI
$
24,856
$
24,659
$
100,167
$
93,461
NOI margin
63.0 %
64.7 %
64.1 %
62.8 %
Normalizing items for NOI
Severance costs
$
—
$
—
$
—
$
256
Property tax recovery
—
—
—
(126)
Accrual estimates for repair and
maintenance costs
—
(776)
—
(776)
—
(776)
—
(646)
Normalized NOI
$
24,856
$
23,883
$
100,167
$
92,815
Normalized NOI margin
63.0 %
62.7 %
64.1 %
62.4 %
Minto Apartment Real Estate Investment Trust | Management's Discussion and Analysis - 2024
(in thousands of Canadian dollars, except Unit and per Unit amounts, per suite amounts and other non-financial data)
1 Refer to Section IV - "Liquidity, Capital Resources and Contractual Commitments - Reconciliation of Non-IFRS Financial Measures and Ratios -
NOI and NOI Margin"
| Minto Apartment REIT
2024 Annual Report
38
Total Portfolio
Three months ended December 31,
Year ended December 31,
2024
2023
2024
2023
Revenue from investment properties
$
39,434
$
40,286
$
157,088
$
157,925
Operating expenses
14,578
14,254
56,517
58,757
NOI
$
24,856
$
26,032
$
100,571
$
99,168
NOI margin
63.0 %
64.6 %
64.0 %
62.8 %
Normalizing items for NOI
Severance costs
$
—
$
—
$
—
$
256
Property tax recovery
—
—
—
(126)
Accrual estimates for repair and
maintenance costs
—
(796)
—
(796)
—
(796)
—
(666)
Normalized NOI
$
24,856
$
25,236
$
100,571
$
98,502
Normalized NOI margin
63.0 %
62.6 %
64.0 %
62.4 %
For Q4 2023, adjustments to accrual estimates for repairs and maintenance resulted in Same Property Portfolio Normalized
property operating costs of $7,067 and Normalized operating expenses of $14,225. For the same period, Total Portfolio
adjustments to accrual estimates for repairs and maintenance resulted in Normalized property operating costs of $7,432 and
Normalized operating expenses of $15,050.
In FY 2023, for the Same Property Portfolio, severance costs and adjustments to accrual estimates for repairs and maintenance
resulted in Normalized property operating costs of $28,509 and the property tax recovery resulted in Normalized property taxes
of $15,222, together resulting in Normalized operating expenses of $55,909 for FY 2023. For the same period on a Total
Portfolio basis, severance costs and adjustments to accrual estimates for repairs and maintenance resulted in Normalized
property operating costs of $30,108 and the property tax recovery resulted in Normalized property taxes of $16,313, which
together resulted in Normalized operating expenses of $59,423.
Debt-to-Gross Book Value Ratio
Refer to Section IV - "Liquidity, Capital Resources and Contractual Commitments - Liquidity and Capital Resources" for a
reconciliation of Debt-to-Gross Book Value ratio.
Debt Service Coverage Ratio
The Debt Service Coverage ratio is calculated as follows:
Year ended
Year ended
December 31, 2024
December 31, 2023
NOI
$
100,571 $
99,168
Interest expense and standby fees on credit facility
6,577
10,445
Distributions on Class C LP Units:
Principal repayments
5,169
5,518
Contractual interest expense
8,453
7,306
Mortgages and construction loan:
Principal repayments
14,203
14,036
Contractual interest expense
25,613
26,728
Total debt service
$
60,015 $
64,033
Debt Service Coverage ratio
1.68x
1.55x
Debt Service Coverage ratio is a measure used by Management to assess the REIT's ability to pay both interest and principal on
its Class C LP Units, mortgages and construction loan. Generally, a higher ratio indicates lower credit risk. The increase in Debt
Service Coverage ratio for FY 2024 from FY 2023 was primarily a result of a decrease to interest costs due to a lower average
outstanding balance on the credit facility as well as an increase in NOI driven by higher average monthly rents.
Minto Apartment Real Estate Investment Trust | Management's Discussion and Analysis - 2024
(in thousands of Canadian dollars, except Unit and per Unit amounts, per suite amounts and other non-financial data)
|
Minto Apartment REIT
2024 Annual Report
39
Debt-to-Adjusted EBITDA Ratio
Refer to Section IV - "Liquidity, Capital Resources and Contractual Commitments - Liquidity and Capital Resources" for a
reconciliation of Debt-to-Adjusted EBITDA ratio.
NAV and NAV per unit
As at
December 31, 2024 September 30, 2024
December 31, 2023
December 31, 2022
Net assets (Unitholders' equity)
$
1,115,747 $
1,034,668 $
1,077,381 $
1,213,537
Add: Class B LP Units
343,572
435,002
416,716
361,858
NAV
$
1,459,319 $
1,469,670 $
1,494,097 $
1,575,395
Number of Units and Class B LP Units
65,333,848
65,671,690
65,653,641
65,642,641
NAV per unit
$
22.34 $
22.38 $
22.76 $
24.00
NAV and NAV per unit are used by Management to assess the REIT's value and value per unit. Refer to Section I - "Overview -
Financial and Operating Highlights - NAV per unit" for analysis.
Minto Apartment Real Estate Investment Trust | Management's Discussion and Analysis - 2024
(in thousands of Canadian dollars, except Unit and per Unit amounts, per suite amounts and other non-financial data)
| Minto Apartment REIT
2024 Annual Report
40
Section V - Accounting Estimates and Policies, Controls and
Procedures and Risk Analysis
Critical Judgments in Applying Accounting Policies
The following are the critical judgments that have been made in applying the REIT’s accounting policies:
Investment property acquisitions
The REIT must assess whether an acquisition transaction should be accounted for as an asset acquisition or a business
combination under IFRS 3, Business Combinations ("IFRS 3"). This assessment requires the REIT to make judgments on whether
the assets acquired and liabilities assumed constitute a business as defined in IFRS 3 and if the integrated set of activities,
including inputs and processes acquired, are capable of being conducted and managed as a business and the REIT obtains
control of the business.
Income taxes
The REIT is a "mutual fund trust" and a "real estate investment trust" as defined in the Income Tax Act (Canada). The REIT is not
liable to pay Canadian income taxes provided that its taxable income is fully distributed to Unitholders each year. The REIT is a
"real estate investment trust" if it meets the prescribed conditions under the Income Tax Act (Canada) relating to the nature of
its assets and revenue. The REIT uses judgment in reviewing the real estate investment trust conditions and assessing their
interpretation and application to the REIT’s assets and revenue, and it has determined that it qualifies as a "real estate
investment trust" for the current period.
Interest in joint operations
The REIT assesses whether an arrangement should be accounted for as a joint operation or a joint venture under IFRS 11, Joint
Arrangements. This assessment requires the REIT to make judgments on whether the REIT's rights and obligations arising from
the arrangement constitute a joint operation or a joint venture.
Recognition of government grants
For acquired residential properties financed through forgivable loans, the REIT assesses whether throughout the remaining
term of forgivable loans the REIT is expected to meet the conditions for forgiveness, that the outflow of economic resources is
not probable and that in accordance with IAS 37 – Provision, Contingent Liabilities and Contingent Assets no financial liability is
required to be recorded. For development properties financed through forgivable loans, the REIT assesses whether throughout
the remaining term of the forgivable loans there is reasonable assurance that the REIT will meet the conditions for forgiveness.
If they do, the balance to be forgiven is recognized over time in the consolidated statements of net income and comprehensive
income.
Critical Accounting Estimates and Assumptions
The REIT makes estimates and assumptions that affect the carrying amounts of assets and liabilities and the reported amount of
income for the period. Actual results could differ from estimates. The estimates and assumptions that have the most significant
effect on the reported amounts in the consolidated financial statements include:
Residential Investment properties valuation
In applying the REIT’s policy with respect to investment properties, significant accounting estimates and assumptions are
required to determine the valuation of the residential properties under the fair value model. Significant accounting estimates
and assumptions used in the REIT's internal valuation model include the estimated 12 month stabilized forecasted net operating
income for each property and the capitalization rates that reflect the characteristics, location and market for each property.
Minto Apartment Real Estate Investment Trust | Management's Discussion and Analysis - 2024
(in thousands of Canadian dollars, except Unit and per Unit amounts, per suite amounts and other non-financial data)
|
Minto Apartment REIT
2024 Annual Report
41
The REIT's business faces risk from prominent economic factors, including economic growth, the interest rate environment, and
inflation, among other factors. The REIT has used all information available as at December 31, 2024 that it considers relevant in
determining the potential impact of these economic factors on the carrying amounts of assets and liabilities, earnings for the
period and risks disclosed in the consolidated financial statements for the year ended December 31, 2024. The estimates and
judgements that could be most significantly impacted by economic factors include those underlying the valuation of investment
properties. Actual results could differ from those estimates. The REIT continues to monitor and assess the impact that economic
factors will have on its business activities and financial results.
Risks and Uncertainties
The REIT faces a variety of diverse risks, many of which are inherent in the business conducted by the REIT. They include the
following:
Current Economic Environment
The REIT is subject to risks involving the economy in general, including inflation, deflation or stagflation, unemployment,
geopolitical issues and international trade disputes and protection measures (including tariffs) or changes to existing trade
agreements and a local, regional, national or international outbreak of a contagious disease adversely affecting economic
conditions. Poor economic conditions could adversely affect the REIT’s revenues, thereby reducing its operating income and
earnings and could harm the REIT’s financial condition. In weak economic environments, the REIT’s tenants may be unable to
meet their rental payments and other obligations due to the REIT, which could have a material and adverse effect on the REIT.
The cost of construction materials may be affected by additional trade barriers resulting in increased capital and development
expenditures adversely affecting the returns of value-add capital spending and intensification projects. Fluctuations in interest
rates or other financial market volatility may adversely affect financing costs on variable-rate debt as well as the REIT's ability to
refinance existing indebtedness on its maturity or on terms that are as favourable as the terms of the existing indebtedness,
which may impact negatively on AFFO, may restrict the availability of financing for future prospective purchasers of the REIT’s
investments and could potentially reduce the value of such investments, or may adversely affect the ability of the REIT to
complete acquisitions on financially desirable terms.
Access to Capital
The real estate industry is highly capital intensive. The REIT will require access to capital to fund its growth strategy and certain
capital expenditures from time to time. There can be no assurances that the REIT will have access to sufficient capital or access
to capital on terms favourable to the REIT for future property acquisitions, financing or refinancing of properties, funding
operating expenses or other purposes. Market conditions and unexpected volatility or illiquidity in financial markets may inhibit
the REIT’s access to financing in the Canadian equity capital markets. As a result, it is possible that financing which the REIT may
require in order to grow and expand its operations, upon the expiry of the term of financing, upon refinancing any particular
property owned by the REIT or otherwise, may not be available or, if it is available, may not be available on favourable terms to
the REIT. It is also possible that the REIT may not be able to secure upward refinancing for its properties when refinancing
existing debt, which is an important part of the REIT's capital strategy. Failure by the REIT to access required capital could have
a material adverse effect on the REIT’s business, cash flows, financial condition and financial performance and ability to make
distributions to Unitholders.
Real Estate Industry Risk
Real estate investments are generally subject to varying degrees of risk depending on the nature of the property. These risks
include changes in general economic conditions (such as the availability and cost of mortgage funds), local conditions (such as
an oversupply of space or a reduction in demand for real estate in the area), government regulations (such as new or revised
residential tenant legislation or regulations affecting the availability and cost of CMHC mortgage insurance), the attractiveness
of the properties to tenants, competition from others with available space and the ability of the owner to provide adequate
maintenance at an economic cost. The performance of the economy in each of the areas in which the REIT’s properties are
located, including the financial results and labour decisions of major local employers, can have an impact on revenues from the
properties and their underlying values.
An investment in real estate is relatively illiquid, with the degree of liquidity generally fluctuating in relation to demand for and
the perceived desirability of such investments. Such illiquidity may limit the REIT’s ability to vary its Portfolio promptly in
response to changing economic, investment or other conditions. If it were necessary to accelerate the liquidation of the REIT's
real property investments, the proceeds to the REIT might be significantly less than the aggregate carrying or Net Asset Value of
its properties. The REIT’s exposure to general risks associated with real estate investments is mitigated by its geographic
diversification.
Minto Apartment Real Estate Investment Trust | Management's Discussion and Analysis - 2024
(in thousands of Canadian dollars, except Unit and per Unit amounts, per suite amounts and other non-financial data)
| Minto Apartment REIT
2024 Annual Report
42
Certain significant expenditures, including property taxes, maintenance costs, mortgage payments, insurance costs and related
charges, must be made regardless of whether or not a property is producing sufficient income to service these expenses. The
REIT’s properties are subject to mortgages, which require significant debt service payments. If the REIT were unable to meet
mortgage payments on any property, losses could be sustained as a result of the mortgagee’s exercise of its rights of
foreclosure or of sale.
Many of the REIT’s properties were constructed in the 1960’s and 1970’s and require ongoing capital expenditures. While
management has implemented comprehensive property maintenance programs and monitors property conditions constantly,
annual maintenance expenditures could exceed the REIT’s existing reserve estimates which could have a material adverse effect
upon distributable income.
The nature of the REIT’s business is such that refurbishment and structural repairs are required periodically, in addition to
regular on-going maintenance.
Increased Supply Risk
Each segment of the real estate business is competitive. Numerous other residential developers and apartment owners
compete in seeking tenants. Although the REIT’s strategy is to own multi-residential properties in desirable locations in each
market in which it operates, some of the properties of the REIT’s competitors may be newer, better located or better
capitalized. In addition, the desirability of property locations may change over time. The existence of alternative housing could
have a material adverse effect on the REIT’s ability to lease space in its properties and on the rents charged or concessions
granted, and could adversely affect the REIT’s revenues and its ability to meet its obligations.
Rent Control Risk
Rent control exists in some provinces in Canada, limiting the percentage of annual rental increases to existing tenants. The REIT
is exposed to the risk of the implementation of, or amendments to, existing legislative rent controls in the markets in which it
operates, which may have an adverse impact on the REIT’s operations. Of the jurisdictions in which the REIT currently operates,
Ontario, Quebec and British Columbia have rent controls.
Changes in Government Policy and/or Legislation
The REIT is subject to laws and regulations governing the ownership and leasing of real property, zoning, building standards,
landlord/tenant relationships, construction, employment standards, environmental matters, taxes and other matters, which at
times have included laws and regulations limiting rent increases and imposing a moratorium on the ability of landlords to evict
tenants for the non-payment of rent. It is possible that future changes to government policies related to housing, including as a
result of a change in government, and/or to applicable federal, provincial, municipal or common laws or regulations or changes
in their enforcement or regulatory interpretation could result in changes in the legal requirements affecting the REIT (including
with retroactive effect). Any changes in the laws to which the REIT is subject could materially adversely affect the REIT’s rights
and title to its assets or its ability to carry on its business in the ordinary course.
Tax-Related Risk
i)
Mutual Fund Trust Status - The REIT intends to qualify at all relevant times as a “mutual fund trust” for purposes of the
Income Tax Act (Canada). There can be no assurance that Canadian federal income tax laws and the administrative policies
and practices of the CRA respecting the treatment of mutual fund trusts will not be changed in a manner that adversely
affects the Unitholders.
ii) The REIT Exception - Canadian tax legislation relating to the federal income taxation of Specified Investment Flow Through
trusts or partnerships provide that certain distributions from a SIFT will not be deductible in computing the SIFT’s taxable
income and that the SIFT will be subject to tax on such distributions at a rate that is substantially equivalent to the general
tax rate applicable to Canadian corporations. However, distributions paid by a SIFT as return of capital should generally not
be subject to tax. Under the SIFT rules, the taxation regime will not apply to a real estate investment trust that meets
prescribed conditions relating to the nature of its assets and revenue (the “REIT Exception”). The REIT Exception is
comprised of a number of technical tests and the determination as to whether the REIT qualifies for the REIT Exception in
any particular taxation year can only be made with certainty at the end of that taxation year. The REIT expects to qualify
for the REIT Exception in 2024 and subsequent taxation years, such that it will be exempt from the SIFT rules. However, no
assurances can be given that the REIT will satisfy the REIT Exception in any particular year. If the SIFT rules apply to the
REIT, they may adversely affect the marketability of the Units, the amount of cash available for distributions and the after-
tax return to investors.
Minto Apartment Real Estate Investment Trust | Management's Discussion and Analysis - 2024
(in thousands of Canadian dollars, except Unit and per Unit amounts, per suite amounts and other non-financial data)
|
Minto Apartment REIT
2024 Annual Report
43
iii) General Taxation - There can be no assurance that Canadian federal or provincial tax laws, the judicial interpretation
thereof, or the administrative and assessing practices and policies of the CRA, the Department of Finance (Canada) and any
other tax authority or tax policy agency will not be changed in a manner that adversely affects the REIT, its affiliates or
Unitholders, or that any such taxing authority will not challenge tax positions adopted by the REIT and its affiliates. Any
such change or challenge could increase the amount of tax payable by the REIT or its affiliates or could otherwise adversely
affect Unitholders by reducing the amount available to pay distributions or changing the tax treatment applicable to
Unitholders in respect of such distributions.
Competition for Real Property Investments
The REIT competes for suitable real property investments with a variety of investors (both Canadian and foreign) that are
presently seeking, or that may seek in the future, real property investments similar to those desired by the REIT. Many of these
investors will have greater financial resources than those of the REIT. An increase in the availability of investment funds, and an
increase in interest in real property investments, would tend to increase competition for real property investments, thereby
increasing purchase prices and reducing yields therefrom. In addition, the REIT may require additional equity and / or debt
financing to complete future real property acquisitions, which may not be available on terms acceptable to the REIT.
Cyber Security Risks
A cyber incident is any adverse event that threatens the confidentiality, integrity or availability of the REIT’s information
technology resources. More specifically, a cyber incident is an intentional attack or an unintentional event that can include
gaining unauthorized access to information systems to disrupt operations, corrupt data or steal confidential information. The
REIT’s primary risks that could directly result from the occurrence of a cyber incident include operational interruption, damage
to its reputation, damage to relationships with its vendors and tenants and disclosure of confidential vendor or tenant
information. The REIT, and Minto as a service provider under the Administrative Support Agreement, have implemented
processes, procedures and controls to detect and mitigate these risks, but these measures, as well as its increased awareness of
a risk of a cyber incident, do not guarantee that a cyber incident will not occur or that its financial results will not be negatively
impacted by such an incident.
Property Acquisition Risk
The REIT’s business objectives include, among other things, growth through identifying suitable acquisition and/or development
opportunities, pursuing such opportunities, consummating acquisitions and leasing acquired properties. The acquisition of
properties entails general risks associated with any real estate investment, including the risk that the investments will fail to
perform in accordance with expectations, that the properties will not achieve anticipated occupancy levels and that estimates
of the costs of improvements to bring an acquired property up to standards established for the intended market position for
that property may prove inaccurate. If the REIT is unable to make accretive acquisitions or otherwise manage its growth
effectively, it could adversely impact the REIT’s financial position and financial performance and decrease the amount of cash
available for distribution. There can be no assurance as to the pace of growth through property acquisitions or that the REIT will
be able to acquire assets on an accretive basis and, as such, there can be no assurance that distributions to Unitholders will
increase in the future.
Risks Associated with the Administrative Support Agreement
The REIT relies upon Minto with respect to the provision of certain services as described in the REIT's Annual Information Form
dated March 5, 2025, under the section "Arrangements with Minto - Administrative Support Agreement", available on SEDAR+
at www.sedarplus.ca. If the REIT were to lose the services provided by Minto, or if Minto fails to perform its obligations under
the Administrative Support Agreement, the REIT may experience an adverse impact on its business operations. The REIT may be
unable to duplicate the quality and depth or the cost of the services available to it by handling such services internally or by
retaining another service provider.
Minto Apartment Real Estate Investment Trust | Management's Discussion and Analysis - 2024
(in thousands of Canadian dollars, except Unit and per Unit amounts, per suite amounts and other non-financial data)
| Minto Apartment REIT
2024 Annual Report
44
Utility and Property Tax Risk
Utility and property tax risk relates to the potential additional costs the REIT may experience as a result of higher commodity
prices as well as its exposure to significant increases in property taxes. Over the past few years, property taxes have increased
as a result of higher property assessments of municipal properties and property tax rates. Utility expenses, mainly consisting of
natural gas and electricity service charges, have been subject to considerable price fluctuations over the past several years. Any
significant increase in these commodity costs that the REIT cannot pass on to the tenant may have a negative material impact
on the REIT. The REIT mitigates part of this risk by submetering many of its suites to measure the consumption of electricity and
passing on the cost to tenants and by investing in technology and property improvements that are aimed at reducing
consumption. As at December 31, 2024, approximately 95% of the suites in the Portfolio are submetered or directly metered
for electricity and approximately 88% of tenants pay the cost of electricity consumed in their suites. The REIT will seek to pass
on the cost of electricity for those suites that are submetered but where the tenants do not currently pay for electricity, as the
suites' tenancies turn over.
Rental Income Risks
The short-term nature of residential tenant leases exposes the REIT to the effects of a declining market rent and increased
vacancy, which could materially adversely affect the REIT’s results from operations and ability to make distributions to
Unitholders. Most of the REIT’s residential tenant leases will be for a term of one year or less. Because the REIT’s residential
tenant leases generally permit residents to leave at the end of their lease term without any penalty, the REIT’s rental revenue
may be materially adversely affected by declines in market rents and increased vacancy more quickly than if such leases were
for longer terms. Further, the operating costs of a suite or property may increase at a faster rate than the rental rate for such
suite, which could negatively impact the financial condition of the REIT.
Renovation and Development Risk
There is a risk that renovations or developments undertaken by the REIT will exceed original cost estimates or will experience
unforeseen delays and that renovated or new suites may not lease in the anticipated timeframe or at anticipated rents. During
suite renovations, suites are unavailable for occupancy and do not generate income. There is also a risk of labour shortages
and/or disputes resulting in unavailability of skilled tradespeople required to complete developments undertaken by the REIT.
This could not only have a negative financial impact on the REIT's business but also affect the REIT's reputation.
Environmental Risk
As an owner of real estate, the REIT is subject to federal, provincial and municipal environmental regulations. These regulations
may require the REIT to fund the costs of removal and remediation of certain hazardous substances on its properties or releases
from its properties. The failure to remediate such properties, if any, could adversely affect the REIT’s ability to borrow using the
property as collateral or to sell the real estate. The REIT is not aware of any material non-compliance with environmental laws
at any of its properties nor is it currently aware of any environmental condition with respect to any properties that it believes
would involve material expenditures by the REIT. The REIT has made, and will continue to make, the necessary capital
expenditures to comply with environmental laws and regulations. The REIT conducts due diligence on all properties prior to
acquisition and this process includes independent expert assessment of environmental risk for each property. It is the REIT's
policy to obtain a Phase I environmental site assessment conducted by a qualified environmental consultant as a condition of
acquiring any additional property. See "Investment Guidelines and Operating Policies - Operating Policies".
Environmental laws and regulations can change rapidly, and the REIT may be subject to more stringent environmental laws and
regulations in the future.
Climate-Related Risk
The REIT's properties may be impacted by both physical climate-related events and the transition to a lower carbon economy.
Among the most significant of the physical risks is the risk of flooding, including flash flooding. Depending on the severity, these
events could cause significant damage to the REIT's properties, interrupt normal operations and threaten the safety of tenants.
The REIT's ability to generate revenue from impacted properties may also be significantly impaired.
The REIT will require significant capital expenditures to meet the requirements of the policies and legislative requirements
established by federal, provincial, and municipal governments to improve energy efficiency of buildings and reduce their
greenhouse gas emissions. The REIT’s capital plans consider the legislated requirements and ensure the REIT's properties
conform to timelines set out in applicable legislation.
Minto Apartment Real Estate Investment Trust | Management's Discussion and Analysis - 2024
(in thousands of Canadian dollars, except Unit and per Unit amounts, per suite amounts and other non-financial data)
|
Minto Apartment REIT
2024 Annual Report
45
Climate-related events also may negatively impact certain costs of operation of the REIT's properties, including the cost of utility
consumption due to abnormally hot or cold temperatures and the cost of snow removal. More generally, the increase in
catastrophic losses worldwide from climate-related events has resulted in significant payouts by property insurers. This has
resulted in a significant increase in property insurance premiums generally, including the property insurance premiums payable
by the REIT. There is a risk of insurers being required to make payments on account of future climate-related catastrophic
losses, which may result in further increases in the property insurance premiums payable by the REIT.
Joint Venture Risk
The REIT participates in co-ownerships and a partnership for five of its properties and may participate in other co-ownerships or
partnerships in the future. There is a risk that the co-owners or partners may fail to fund their share of capital contributions or
their economic or business interests or goals may change in a manner to differ from or become inconsistent with those of the
REIT. Disputes with the co-owners or partners may negatively affect the operations of and returns from co-owned or
partnership properties, or give rise to an obligation to purchase the interest of the co-owner or partner or to sell the REIT's
interest to the co-owner or partner at a time or on terms that may adversely impact the REIT’s financial position and financial
performance.
Potential Conflicts of Interest with Minto
Minto’s continuing businesses may lead to conflicts of interest between Minto and the REIT. The REIT may not be able to
resolve such conflicts, and, even if it does, the resolution may be less favourable to the REIT than if it were dealing with a party
that was not a holder of a significant interest in the REIT. In addition, the ongoing relationships between Minto and each of
Roger Greenberg and Michael Waters may lead to conflicts of interest between such persons and the REIT. In order to mitigate
part of the risk associated with conflicts of interest, all related party transactions with Minto are reviewed and approved on
behalf of the REIT by the REIT's independent trustees only.
Social Media Risk
The use of social media could cause the REIT to suffer brand damage or information leakage. Negative posts or comments about
the REIT or its properties on any social networking website could damage the REIT’s reputation. In addition, employees or
others might disclose non-public sensitive information relating to the REIT’s business through external media channels. The
continuing evolution of social media will present the REIT with new challenges and risks.
Appraisals of Properties
An appraisal is an estimate of market value and caution should be used in evaluating data with respect to appraisals. It is an
estimate of value based on information gathered in the investigation, appraisal techniques employed and reasoning both
quantitative and qualitative, leading to an opinion of value. The analysis, opinions and conclusions in an appraisal are typically
developed based on, and in conformity with, or interpretation of the guidelines and recommendations set forth in the Canadian
Uniform Standards of Appraisal Practice. Appraisals are based on various assumptions of future expectations of property
performance and while the appraiser’s internal forecast of net income for the properties appraised are considered to be
reasonable at that time, some of the assumptions may not materialize or may differ materially from actual experience in the
future. Appraisals are not guarantees of present or future value and there is no assurance that an appraised value actually
reflects an amount that would be realized upon a current or future sale of any of the properties or that any projections included
in the appraisal will be attainable. In addition, as prices in the real estate market fluctuate over time in response to numerous
factors, the value of a property as shown in an appraisal may be an unreliable indication of its current market value.
A publicly traded real estate investment trust will not necessarily trade at values determined solely by reference to the
underlying value of its real estate assets. Accordingly, the Units may trade at a premium or a discount to values implied by
appraisals.
Minto Apartment Real Estate Investment Trust | Management's Discussion and Analysis - 2024
(in thousands of Canadian dollars, except Unit and per Unit amounts, per suite amounts and other non-financial data)
| Minto Apartment REIT
2024 Annual Report
46
General Litigation Risks
In the ordinary course of the REIT’s operations, whether directly or indirectly, it may become involved in, named as a party to or
be the subject of various legal proceedings, including regulatory proceedings, tax proceedings and legal actions relating to
personal injuries, property damage, property taxes, land rights, the environment, cyber-risks and contract disputes. The
outcome with respect to outstanding, pending or future proceedings cannot be predicted with certainty and may be
determined in a manner adverse to the REIT and as a result, could have a material adverse effect on the REIT’s assets, liabilities,
business, financial condition and financial performance. Even if the REIT prevails in any such legal proceedings, the proceedings
could be costly and time-consuming and may divert the attention of management and key personnel from the REIT’s business
operations.
General Uninsured Losses
The REIT carries comprehensive general liability, fire, flood, extended coverage and rental loss insurance with policy
specifications, limits and deductibles customarily carried for similar properties. The REIT will continue to procure insurance for
such risks, subject to certain standard policy limits and deductibles and will continue to carry such insurance if it is economical
to do so. There are, however, certain types of risks (generally of a catastrophic nature such as war or environmental
contamination), which are either uninsurable or not economically insurable. Should an uninsured or underinsured loss occur,
the REIT could lose its investment in, and anticipated profits and cash flows from, one or more of its properties, and would
continue to be obligated to repay any recourse mortgage indebtedness on such properties. There is a risk that any significant
increase in insurance costs will impact negatively upon the profitability of the REIT.
Key Personnel
The REIT's executive and other senior officers have a significant role in the REIT's success and oversee the execution of the
REIT's strategy. The REIT's ability to retain its management team or attract suitable replacements should any members of
management leave is dependent on, among other things, the competitive nature of the employment market. The REIT has
experienced departures of key professionals in the past and may do so in the future, and it cannot predict the impact that any
such departures may have on its ability to achieve its objectives. The loss of services from key members of the management
team or a limitation on their availability could adversely impact the REIT's financial condition and cash flow. The REIT mitigates
key personnel risk through succession planning, but does not maintain key personnel insurance.
Other Tax Matters
i)
Non-Resident Ownership - Under current law, a trust may lose its status under the Income Tax Act (Canada) as a mutual
fund trust if it can reasonably be considered that the trust was established or is maintained primarily for the benefit of
Non-Residents, except in limited circumstances. Accordingly, the DOT provides that Non-Residents may not be the
beneficial owners of more than 49% of the Units (determined on a basic or a fully-diluted basis). The Trustees also have
various powers that can be used for the purpose of monitoring and controlling the extent of Non-Resident ownership of
the Units. The REIT mitigates this risk by regularly monitoring the residency of Unitholders.
ii) Tax-Basis of Acquired Properties - The Partnership has acquired, and may from time to time in the future acquire, certain
properties on a fully or partially tax-deferred basis, such that the tax cost of these properties will be less than their fair
market value. If one or more of such properties are disposed of, the gain realized by the Partnership for tax purposes
(including any income inclusions arising from the recapture of previously claimed CCA on depreciable property) will be in
excess of that which it would have realized if it had acquired the properties at a tax cost equal to their fair market values.
For the purpose of claiming CCA, the UCC of such properties acquired by the Partnership will be equal to the amounts
jointly elected by the Partnership and the transferor on the tax-deferred acquisition of such property. The UCC of such
property will be less than the fair market value of such property. As a result, the CCA that the Partnership may claim in
respect of such properties will be less than it would have been if such properties had been acquired with a tax cost basis
equal to their fair market values.
iii) Eligibility for Investment - The Income Tax Act (Canada) imposes penalties for the acquisition or holding of investments
that are not “qualified investments” within the meaning of the Income Tax Act (Canada) by registered retirement savings
plans, registered education savings plans, registered retirement income funds, deferred profit sharing plans, registered
disability savings plans or tax-free savings accounts (collectively, “Exempt Plans”). Although the REIT will endeavour to
ensure that the Units continue to be qualified investments for Exempt Plans, any property distributed to a Unitholder on
an in specie redemption of Units may not be qualified investments under the Income Tax Act (Canada).
Minto Apartment Real Estate Investment Trust | Management's Discussion and Analysis - 2024
(in thousands of Canadian dollars, except Unit and per Unit amounts, per suite amounts and other non-financial data)
|
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2024 Annual Report
47
iv) Non-Residents of Canada - The Income Tax Act (Canada) may impose additional withholding or other taxes on distributions
made by the REIT to Unitholders who are Non-Residents. These taxes and any reduction thereof under a tax treaty
between Canada and another country may change from time to time. The tax consequences under the Income Tax Act
(Canada) for Non-Resident Unitholders may be more adverse than the consequences to other Unitholders. Non-Resident
Unitholders should consult their own tax advisors.
Financial Risk Management
The REIT's activities expose it to a variety of financial risks, including market risk, credit risk and liquidity risk.
Market Risk
Market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in
market prices. Market risk consists of interest rate risk, currency risk and other price risk.
Interest rate risk
As the REIT’s interest-bearing assets mainly comprise fixed rate instruments, changes in market interest rates do not have any
significant direct effect on the REIT’s income.
The REIT's financial liabilities comprise both fixed rate and variable-rate instruments.
The REIT faces interest rate risk on its fixed rate debt due to the expected requirement to refinance such debt in the year of
maturity or shortly thereafter. The REIT manages interest rate risk by structuring its financings to stagger the maturities of its
debt, thereby mitigating its exposure to interest rate and other credit market fluctuations.
For the portion of the REIT’s financial liabilities that comprise variable-rate instruments, from time to time the REIT may enter
into interest rate swap contracts or other financial instruments to modify the interest rate profile of its outstanding debt
without an exchange of the underlying principal amount.
As at December 31, 2024, the REIT has a committed variable-rate credit facility of $300,000 (December 31, 2023 - $300,000)
with an availability of $208,344 (December 31, 2023 - $236,034) and amounts drawn of $24,500 (December 31, 2023 -
$140,236). A 1% change in prevailing interest rates would change annualized interest charges incurred by $245 (December 31,
2023 - $1,402).
Currency risk
The REIT’s financial statement presentation currency is Canadian dollars. Operations are located in Canada and the REIT has
limited operational transactions in foreign-denominated currencies. As such, the REIT has no significant exposure to currency
risk.
Other price risk
Other price risk is the risk of variability in fair value due to movements in equity prices or other market prices such as
commodity prices and credit spreads.
The REIT is exposed to other price risk on its Class B LP Units. A 1% change in the prevailing market price of the Units as at
December 31, 2024 would have a $3,436 (December 31, 2023 - $4,167) change in the fair value of the Class B LP Units.
Credit Risk
Credit risk is the risk that tenants and/or debtors may experience financial difficulty and be unable to fulfill their lease
commitments or loan repayments. An allowance is recorded for expected credit losses ("ECL").
The REIT’s risk of credit loss from tenants experiencing financial difficulties is mitigated through diversification. The REIT’s
residential rental business is carried on in the Toronto, Montreal, Ottawa and Calgary regions. The nature of this business
involves a high volume of tenants with individually small monthly rent amounts. The REIT monitors the collection of residential
rent receivables on a regular basis with strictly followed procedures designed to minimize credit loss in cases of non-payment.
The REIT is also exposed to the concentration of credit risk in relation to the loans advanced, in the event that the borrowers
default on the contractual terms of repayment of amounts owing to the REIT. The REIT provides financing to MPI and affiliates
of MPI for strategic developments and, in turn, receives an option to acquire an ownership interest in those developments.
Management mitigates this risk by ensuring there is sufficient security provided by the development assets in addition to
guarantees provided by MPI for loans advanced to affiliates of MPI.
Minto Apartment Real Estate Investment Trust | Management's Discussion and Analysis - 2024
(in thousands of Canadian dollars, except Unit and per Unit amounts, per suite amounts and other non-financial data)
| Minto Apartment REIT
2024 Annual Report
48
Liquidity Risk
Liquidity risk is the risk that the REIT will encounter difficulty in meeting obligations associated with financial liabilities that are
settled by delivering cash or another financial asset. The REIT’s liquidity is subject to macroeconomic, financial, competitive and
other factors that are beyond the REIT’s control.
Liquidity risk is managed through cash flow forecasting. Management monitors forecasts of the REIT’s liquidity requirements to
ensure it has sufficient cash to meet operational needs through maintaining sufficient cash and/or availability on the undrawn
credit facility and ensuring that it meets its financial covenants related to debt agreements. Such forecasting takes into
consideration the current and projected macroeconomic conditions, the REIT's cash collection efforts, debt financing plans and
covenant compliance required under the terms of debt agreements. There is a risk that such liquidity forecasts may not be
achieved and that currently available debt financing may no longer be available to the REIT at terms and conditions that are
favourable to the REIT, or at all.
The REIT mitigates liquidity risk by staggering the maturity dates of its borrowing, maintaining borrowing relationships with
various lenders, proactively renegotiating expiring credit agreements well in advance of the maturity date and by maintaining
sufficient availability on its credit facility.
As of December 31, 2024, liquidity was $187,700 (December 31, 2023 - $97,516), consisting of cash of $5,878 (December 31,
2023 - $3,740) and $181,822 (December 31, 2023 - $93,776) of available borrowing capacity under the credit facility.
An analysis of the contractual cash flows associated with the REIT's financial liabilities is set out below:
2025
2026
2027
2028
2029
2030 and
thereafter
Total
Mortgages
$
55,588 $
85,833 $
13,063 $
104,591 $
189,260 $
403,487 $
851,822
Construction loan
—
—
—
—
—
40,403
40,403
Credit facility
24,500
—
—
—
—
—
24,500
Class C LP Units
98,809
2,000
23,504
1,391
10,991
77,474
214,169
Interest obligation1
35,173
30,678
29,378
26,017
22,610
46,308
190,164
Tenant rental deposits
10,960
—
10
—
—
—
10,970
Due to related parties
7,745
—
—
—
—
—
7,745
Accounts payable and
accrued liabilities
35,521
712
193
24
—
5,659
42,109
$
268,296 $
119,223 $
66,148 $
132,023 $
222,861 $
573,331 $ 1,381,882
The contractual cash flows do not include any unamortized mark-to-market adjustments or unamortized deferred financing
costs.
Minto Apartment Real Estate Investment Trust | Management's Discussion and Analysis - 2024
(in thousands of Canadian dollars, except Unit and per Unit amounts, per suite amounts and other non-financial data)
1 Interest obligation on mortgages, construction loan, credit facility and Class C LP Units.
|
Minto Apartment REIT
2024 Annual Report
49
Related Party Transactions
Administrative Support Agreement
The Administrative Support Agreement ("ASA") between the REIT and MPI, an entity with significant influence over the REIT,
matures on July 3, 2028 and, for a fee, provides the REIT with certain advisory, transaction and support services, including
clerical and administrative support, operational support for the administration of day-to-day activities of the REIT and office
space.
For the year ended December 31, 2024, the REIT incurred $2,260 (December 31, 2023 - $2,260) for services rendered by MPI
and its affiliates under the ASA.
Loans receivable from related parties
Project
Related Parties
Commitment
Interest Rate and
Maturity
December 31, 2024 December 31, 2023
Fifth + Bank
Affiliate of MPI
$
30,000
Variable per annum1
January 31, 2024
$
— $
30,000
Lonsdale Square
Limited partnership
jointly owned by MPI
and a subsidiary of
Darwin Properties
14,000
7% per annum
February 28, 2025
14,000
14,084
88 Beechwood
Affiliate of MPI
51,400
6% per annum
December 31, 2025
46,219
43,534
The Hyland
MPI
19,650
Variable per annum2
April 30, 2025
19,073
17,948
University Heights
MPI
51,700
7% per annum
December 31, 2026
44,179
27,041
166,750
123,471
132,607
Loan receivable
Management
700
Variable per annum3
April 27, 2032
621
679
Loan receivable
Limited partnership
wholly-owned by MPI
—
Non-interest bearing
January 2, 2025
4,819
—
$
167,450
$—1,2
$
128,911 $
133,286
Current
84,215
62,032
Non-current
44,696
71,254
$
128,911 $
133,286
All commitments pertaining to projects include a reserve to fund interest costs. If the interest reserve is fully utilized, the
interest is paid to the REIT on a monthly basis. In connection with these financings, the REIT has the exclusive option to
purchase the property at 88 Beechwood, MPI's 85% indirect ownership interest in The Hyland and MPI's 45% indirect ownership
interest in University Heights, upon project stabilization at 95% of then-appraised fair market value as determined by
independent and qualified third-party appraisers. The exclusive purchase option for Lonsdale Square expired on November 30,
2024. As at December 31, 2024, the ECL based on 12 month expected losses for the loans receivable is $nil (December 31, 2023
- $nil).
On January 31, 2024, the REIT received repayment of the balance owing for the loan associated with the Fifth + Bank project.
Minto Apartment Real Estate Investment Trust | Management's Discussion and Analysis - 2024
(in thousands of Canadian dollars, except Unit and per Unit amounts, per suite amounts and other non-financial data)
1 Effective July 1, 2023, the interest rate is equal to the all-in interest rate the REIT pays on the credit facility on a monthly basis, subject to a
maximum interest rate of 7% per annum and minimum interest rate of 5% per annum. Prior to the effective date of this amendment, the
interest rate on the loan was 6% per annum.
2 Effective June 1, 2024, the interest rate is equal to the all-in interest rate the REIT pays on the credit facility on a monthly basis, subject to a
maximum interest rate of 7.25% per annum and minimum interest rate of 5.25% per annum. Prior to the effective date of this amendment, the
interest rate on the loan was 6% per annum.
3 The interest rate per annum is set quarterly at the greater of prime and the prescribed interest rate as determined by the Regulations of the
Income Tax Act (Canada) to a maximum of 5%. Interest is payable annually in arrears.
| Minto Apartment REIT
2024 Annual Report
50
On May 7, 2024, the REIT and MPI amended the maturity date of the loan agreement associated with the Hyland and the REIT's
purchase option for an indirect interest in the property. The REIT's purchase option was extended to February 28, 2025, and the
maturity date was extended to April 30, 2025. In addition, the 6% annual interest rate was amended and effective June 1, 2024,
equals the all-in interest rate the REIT pays on the credit facility on a monthly basis, subject to a maximum interest rate of
7.25% per annum and minimum interest rate of 5.25% per annum. The REIT's right of purchase for the property expired on
February 28, 2025 without the REIT having exercised such option.
On December 16, 2024, the REIT agreed to amend the loan agreement associated with Lonsdale Square to extend the maturity
date of the loan to February 28, 2025. Subsequent to year end, the REIT closed on the acquisition of a 50% managing ownership
interest in the property and received repayment of the outstanding CDL, as described in Section I - "Financial and Operating
Highlights - Entry into the Metro Vancouver Market" for further information.
During the year ended December 31, 2024, a holder of the Class B LP Units elected to receive a loan equal to the distributions
they would otherwise have received. On January 2, 2025, the non-interest bearing loan matured, was repaid in full, and a
distribution equal to the loan balance was paid to the holder.
The following table shows the movement of loans receivable from related parties:
Year ended
December 31, 2024
December 31, 2023
Opening balance
$
133,286 $
98,302
Cash flows
Advances
19,170
30,586
Repayments
(30,056)
(45)
Interest received
(1,185)
(2,656)
(12,071)
27,885
Non-cash movement
Interest earned
7,696
7,099
(4,375)
34,984
Closing balance
$
128,911 $
133,286
Fair value of loans receivable relating to projects is calculated based on current market rates plus risk-adjusted spreads on
discounted cash flows. As at December 31, 2024, the current market rates plus risk-adjusted spreads ranged from 7.25% to
8.25% (December 31, 2023 - 9.00% to 10.00%) and the fair value of the loans receivable relating to projects was $122,453
(December 31, 2023 - $127,921) and is considered level 2 within the fair value hierarchy.
Due to related parties
Item
Related Parties
December 31, 2024
December 31, 2023
Current
Class B LP Units distributions
MPI affiliates
$
5,935 $
1,084
Class C LP Units distributions
Limited partnership wholly-
owned by MPI
803
676
Property operating costs payable
MPI and its affiliates
157
144
Development costs and fees
Affiliate of MPI
933
1,722
Unit distribution
MPI
39
38
7,867
3,664
Rental and service revenue receivable
MPI and its affiliates
(122)
(462)
$
7,745 $
3,202
Minto Apartment Real Estate Investment Trust | Management's Discussion and Analysis - 2024
(in thousands of Canadian dollars, except Unit and per Unit amounts, per suite amounts and other non-financial data)
|
Minto Apartment REIT
2024 Annual Report
51
Revenue, expenses, capital expenditures and distributions
Related Parties / Item
December 31, 2024
December 31, 2023
Revenue from MPI, its affiliates and jointly-owned limited partnerships
Rental and service revenue
$
480 $
509
Interest income on loans advanced
7,696
7,099
Expenses and distributions to MPI, its affiliates, its wholly-owned and jointly-owned limited partnerships
Property operating expenses
1,244
1,067
Development costs and fees
4,246
4,162
Distributions on Class B LP Units (finance costs)
13,070
12,683
Distributions on Class C LP Units (finance costs)
8,453
7,306
Distributions on Class C LP Units (principal)
12,760
5,518
Distributions on Units
454
442
Compensation of key management personnel
Paid to executives
1,753
1,642
Unit-based compensation
Executives
1,357
1,461
Trustees in lieu of annual retainer and meeting fees
665
630
Additional compensation to key management personnel for services provided to the REIT was paid by MPI and its affiliate.
Class C LP Units
During the year ended December 31, 2023, the REIT issued 2,577,382 Class C LP Units to MPI in connection with the refinancing
of a mortgage of an investment property to which the Class C LP Units relate.
Contingencies and Commitments
The REIT is subject to claims and legal actions that arise in the ordinary course of business. It is the opinion of Management that
any ultimate liability that may arise from such matters would not have a significant adverse effect on the consolidated financial
statements of the REIT.
The REIT has an off-balance sheet arrangement at one of its properties in the Toronto area which was acquired in 2018
pursuant to which the City of Toronto provided a forgivable loan to support affordable housing at this property. Provided that
certain conditions are met, the REIT will not need to make repayments under this arrangement. As of December 31, 2024, the
remaining unforgiven balance of the loan is $11,016 (December 31, 2023 - $12,240). To date, the REIT has met all conditions
related to this forgivable loan and Management has assessed that throughout the remaining term of the loan the REIT is likely
to continue to meet the conditions for forgiveness and that the outflow of economic resources to settle the loan is not
probable. As such, no liability has been recorded by the REIT.
The REIT has an off-balance sheet arrangement at one of its properties in the Calgary area which was acquired in 2018 pursuant
to which the Province of Alberta provided a forgivable loan to support affordable housing at this property. Provided that certain
conditions are met, the REIT will not need to make repayments under the arrangement. As of December 31, 2024, the
remaining unforgiven balance of the loan is $2,688 (December 31, 2023 - $3,024). To date, the REIT has met all conditions
related to this forgivable loan and Management has assessed that throughout the remaining term of the loan the REIT is likely
to continue to meet the conditions for forgiveness and that the outflow of economic resources to settle the loan is not
probable. As such, no liability has been recorded by the REIT.
As at December 31, 2024, the REIT has committed to advance to related parties an additional $3,994 in order to support two
development projects (December 31, 2023 - $19,501 to support three development projects) and an additional $9,285
(December 31, 2023 - $14,642) to fund interest costs to support three development projects.
The REIT is a guarantor on a joint and several basis for mortgage debt held through one of its joint operations. As at
December 31, 2024, the maximum potential obligation resulting from this guarantee is $11,950 (December 31, 2023 - $12,326).
Minto Apartment Real Estate Investment Trust | Management's Discussion and Analysis - 2024
(in thousands of Canadian dollars, except Unit and per Unit amounts, per suite amounts and other non-financial data)
| Minto Apartment REIT
2024 Annual Report
52
Adoption of New Standards, Amendments and Interpretations
The following amended accounting standards were adopted by the REIT when they became effective on January 1, 2024:
• Classification of Liabilities as Current or Non-Current (Amendments to IAS 1)
• Lease Liability in a Sale and Leaseback (Amendments to IFRS 16)
• Disclosure of Supplier Finance Arrangement (Amendments to IFRS 7 and IAS 7)
The adoption of these amendments did not have a material impact on the REIT's consolidated financial statements.
Future Changes in Accounting Standards
IFRS 18 – Presentation and Disclosure in Financial Statements
On April 9, 2024, the IASB issued IFRS 18 – Presentation and Disclosure in Financial Statements to improve reporting of financial
performance. The standard applies to annual reporting periods beginning on or after January 1, 2027. Earlier adoption is
permitted.
The new standard replaces IAS 1 – Presentation of Financial Statements and introduces new requirements on presentation and
disclosure within the statement of profit or loss, disclosure on management-defined performance measures ("MPMs"), and
aggregation and disaggregation of financial information based on the identified roles of the primary financial statements and
related notes.
The REIT intends to adopt the standard in its consolidated financial statements beginning on January 1, 2027, when the
standard becomes effective. The REIT is assessing the impact of the new standard, particularly with respect to the structure of
the REIT's statements of net income and comprehensive income and statement of cash flows, the additional disclosures
required for MPMs, and the grouping of information within the financial statements.
Other accounting standards
The following new and amended accounting standards are not expected to have a significant impact on the REIT’s consolidated
financial statements:
• Lack of Exchangeability (Amendments to IAS 21), effective on January 1, 2025;
• Amendments to the Classification and Measurement of Financial Instruments (Amendments to IFRS 9 and IFRS 7), effective
on January 1, 2026; and,
• IFRS 19 – Subsidiaries without Public Accountability: Disclosures, effective on January 1, 2027.
Subsequent Events
On January 15, 2025, a joint venture in which the REIT has a 50% ownership interest purchased Lonsdale Square, a 113-suite
mixed-use property in North Vancouver, British Columbia from a limited partnership in which MPI has a 50% interest. The REIT's
purchase price of $52,963 was satisfied by the assumption of a $52,904 mortgage. The REIT also received payment for the
outstanding loan receivable of $14,000 associated with Lonsdale Square.
On January 22, 2025, the REIT completed the disposition of one property in Ottawa, Ontario for a sale price of $69,000. The
REIT used $34,547 of the sale proceeds to redeem for cancellation 4,130,092 Class C LP Units from the holder of the Class C LP
Units to repay the mortgage associated with the property to which the Class C LP Units relate. The net proceeds after the
redemption and transaction costs were $33,849.
On March 4, 2025, the REIT amended the terms of its credit facility to reduce the commitment from $300,000 to $200,000.
Subsequent to December 31, 2024, the REIT has purchased and cancelled 777,276 Units under the NCIB at a weighted average
purchase price of $13.19 per Unit, for a total cost including transaction costs of $10,469.
Minto Apartment Real Estate Investment Trust | Management's Discussion and Analysis - 2024
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Disclosure Controls and Internal Controls Over Financial Reporting
Management is responsible for establishing and maintaining a system of disclosure controls and procedures ("DC&P") to
provide reasonable assurance that all material information relating to the REIT that is required to be publicly disclosed is
recorded, processed, summarized and reported on a timely basis and within the time period specified in securities legislation.
Management is also responsible for establishing and maintaining adequate internal controls over financial reporting ("ICFR") to
provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial reports for external
purposes in accordance with IFRS.
In designing such controls, it should be recognized that due to inherent limitations, any controls, no matter how well designed
and operated, can provide only reasonable, not absolute, assurance of achieving the desired control objectives and may not
prevent or detect misstatements. Additionally, Management is required to use judgment in evaluating controls and procedures.
The Chief Executive Officer and the Chief Financial Officer have evaluated, or caused an evaluation under their direct
supervision of, the design and operating effectiveness of DC&P and ICFR (as defined in National Instrument 52-109, Certification
of Disclosure in Issuers’ Annual and Interim Filings) as at December 31, 2024.
As a result of this evaluation, Management has concluded that as of December 31, 2024 the design and operation of the REIT’s
DC&P were effective to ensure that material information relating to the REIT would have been known to them and that
information required to be disclosed by the REIT is recorded, processed, summarized, and reported on a timely basis and within
the time period specified in securities legislation. Management has also concluded that as of December 31, 2024, the REIT's
ICFR were appropriately designed and operating effectively in accordance with the 2013 Guidance on Internal Control published
by the Committee of Sponsoring Organizations of the Treadway Commission.
Minto Apartment Real Estate Investment Trust | Management's Discussion and Analysis - 2024
(in thousands of Canadian dollars, except Unit and per Unit amounts, per suite amounts and other non-financial data)
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Section VI - Supplemental Information
Property Portfolio
As at December 31, 2024
Property
Total Suites
REIT Ownership
Interest
Effective Ownership
Interest (Suites)
Toronto
1
High Park Village
750
40%
300
2
Leslie York Mills
409
50%
205
3
Richgrove
258
100%
258
4
Martin Grove
237
100%
237
5
Minto Yorkville1
181
100%
181
6
Roehampton
148
100%
148
7
Niagara West
501
28.35%
142
2,484
1,471
Ottawa
8
Minto one80five1
417
100%
417
9
Parkwood Hills Garden Homes & Townhomes
204
100%
204
10
Aventura
354
100%
354
11
Huron
251
100%
251
12
Seneca
251
100%
251
13
Castleview2
241
100%
241
14
Skyline Garden Homes, Maisonettes & Walkups
259
100%
259
15
The Carlisle
193
100%
193
16
Castle Hill
176
100%
176
17
Grenadier
158
100%
158
18
Eleanor
117
100%
117
19
Frontenac
104
100%
104
20
Stratford
59
100%
59
2,784
2,784
Montreal
21
Rockhill
1,004
50%
502
22
Le 4300
318
100%
318
23
Haddon Hall
210
100%
210
24
Le Hill-Park
261
100%
261
1,793
1,291
Calgary
25
The Quarters
199
100%
199
26
The Laurier
144
100%
144
27
Kaleidoscope
70
100%
70
28
The International
252
100%
252
665
665
Portfolio Total
7,726
6,211
1 Suite counts for Minto Yorkville and Minto one80five include furnished suites, representing approximately 27% of the total suites at these
properties.
2 On January 22, 2025, the REIT completed the disposition of Castleview, as described in Section I - "Overview - Financial and Operating
Highlights - Sale of a Non-Core Asset to Enhance Portfolio Quality".
Minto Apartment Real Estate Investment Trust | Management's Discussion and Analysis - 2024
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Average Rent Per Square Foot
As at December 31, 2024
Geographic Node
Average monthly rent
per occupied suite
Average sq. ft.
per occupied suite
Average rent per sq.
ft per suite
Toronto
$2,268
775
$2.93
Ottawa
1,832
804
2.28
Calgary
1,890
662
2.85
Montreal
2,075
981
2.12
Average
$1,990
820
$2.43
Non-IFRS and Other Financial Measures
The REIT's financial statements are prepared in accordance with IFRS. This Management's Discussion and Analysis also contains
certain non-IFRS and other financial measures which are measures commonly used by publicly traded entities in the real estate
industry. Management believes that these metrics are useful for measuring different aspects of performance and assessing the
underlying operating and financial performance on a consistent basis. However, these measures do not have a standardized
meaning prescribed by IFRS and are not necessarily comparable to similar measures presented by other publicly traded entities.
These measures should strictly be considered supplemental in nature and not a substitute for financial information prepared in
accordance with IFRS. The REIT has adopted the guidance under NI 52-112 Non-GAAP and Other Financial Measures Disclosure
for the purpose of this Management's Discussion and Analysis. These non-IFRS and other financial measures are defined below:
Non-IFRS Financial Measures and Ratios
• "FFO" is defined as IFRS consolidated net income adjusted for items such as unrealized changes in the fair value of
investment properties, effects of puttable instruments classified as financial liabilities and changes in fair value of financial
instruments and derivatives. FFO should not be construed as an alternative to net income or cash flows provided by or used
in operating activities determined in accordance with IFRS. The REIT's method of calculating FFO is substantially in
accordance with REALPAC’s recommendations under the revised publication titled ‘‘REALPAC Funds from Operations (FFO)
& Adjusted Funds from Operations (AFFO) for IFRS’’ published in January 2022, but may differ from other issuers’ methods
and, accordingly, may not be comparable to FFO reported by other issuers. The REIT regards FFO as a key measure of
operating performance. For reconciliation refer to Section IV – “Liquidity, Capital Resources and Contractual Commitments
– Reconciliation of Non-IFRS Financial Measures and Ratios”.
• "FFO per unit" is calculated as FFO divided by the weighted average number of Units of the REIT and Class B LP Units of the
Partnership outstanding over the period. The REIT regards FFO per unit as a key measure of operating performance. For
reconciliation refer to Section IV – “Liquidity, Capital Resources and Contractual Commitments – Reconciliation of Non-IFRS
Financial Measures and Ratios”.
• "Normalized FFO" is calculated as FFO net of nonrecurring items that occurred during the period which are not indicative of
the REIT's typical operating results. For reconciliation refer to Section IV – “Liquidity, Capital Resources and Contractual
Commitments – Reconciliation of Non-IFRS Financial Measures and Ratios”.
• "Normalized FFO per unit" is calculated as Normalized FFO divided by the weighted average number of Units of the REIT and
Class B LP Units of the Partnership outstanding over the period. For reconciliation refer to Section IV – “Liquidity, Capital
Resources and Contractual Commitments – Reconciliation of Non-IFRS Financial Measures and Ratios”.
• "AFFO" is defined as FFO adjusted for items such as maintenance capital expenditures and straight-line rental revenue
differences. AFFO should not be construed as an alternative to net income or cash flows provided by or used in operating
activities determined in accordance with IFRS. The REIT’s method of calculating AFFO is substantially in accordance with
REALPAC’s recommendations under the revised publication titled ‘‘REALPAC Funds from Operations (FFO) & Adjusted Funds
from Operations (AFFO) for IFRS’’ published in January 2022, except that it adjusts for certain non-cash items (such as
adjustments for the amortization of mark-to-market adjustments related to debt), but may differ from other issuers’
methods and, accordingly, may not be comparable to AFFO reported by other issuers. The REIT regards AFFO as a key
measure of operating performance. The REIT also uses AFFO in assessing its capacity to make distributions. For
reconciliation refer to Section IV – “Liquidity, Capital Resources and Contractual Commitments – Reconciliation of Non-IFRS
Financial Measures and Ratios”.
Minto Apartment Real Estate Investment Trust | Management's Discussion and Analysis - 2024
(in thousands of Canadian dollars, except Unit and per Unit amounts, per suite amounts and other non-financial data)
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• "AFFO per unit" is calculated as AFFO divided by the weighted average number of Units of the REIT and Class B LP Units of
the Partnership outstanding over the period. The REIT regards AFFO per unit as a key measure of operating performance.
For reconciliation refer to Section IV – “Liquidity, Capital Resources and Contractual Commitments – Reconciliation of Non-
IFRS Financial Measures and Ratios”.
• "Normalized AFFO" is calculated as AFFO net of nonrecurring items that occurred during the period which are not indicative
of the REIT's typical operating results. For reconciliation refer to Section IV – “Liquidity, Capital Resources and Contractual
Commitments – Reconciliation of Non-IFRS Financial Measures and Ratios”.
• "Normalized AFFO per unit" is calculated as Normalized AFFO divided by the weighted average number of Units of the REIT
and Class B LP Units of the Partnership outstanding over the period. For reconciliation refer to Section IV – “Liquidity,
Capital Resources and Contractual Commitments – Reconciliation of Non-IFRS Financial Measures and Ratios”.
• "AFFO Payout Ratio" is the proportion of per unit distributions on Units and Class B LP Units, excluding the Special
Distribution, to AFFO per unit. The REIT uses AFFO Payout Ratio in assessing its capacity to make distributions. For
reconciliation refer to Section IV – “Liquidity, Capital Resources and Contractual Commitments – Reconciliation of Non-IFRS
Financial Measures and Ratios”.
• "Normalized AFFO Payout Ratio" is the proportion of the per unit distributions on Units and Class B LP Units, excluding the
Special Distribution, to Normalized AFFO per unit. For reconciliation refer to Section IV – “Liquidity, Capital Resources and
Contractual Commitments – Reconciliation of Non-IFRS Financial Measures and Ratios”.
• "Debt-to-Adjusted EBITDA ratio" is calculated by dividing interest-bearing debt (net of cash) by Adjusted EBITDA. Adjusted
EBITDA is a non-IFRS financial measure and is used for evaluation of the REIT's financial health and liquidity. Adjusted
EBITDA is calculated as the trailing twelve-month NOI adjusted for a full year of stabilized earnings including finance income,
fees and other income and general and administrative expenses from recently completed acquisitions or dispositions, but
excluding fair value adjustments. The REIT regards Debt-to-Adjusted EBITDA ratio as a measure of financial health and
liquidity. For reconciliation refer to Section IV – “Liquidity, Capital Resources and Contractual Commitments – Liquidity and
Capital Resources”.
Capital Management Measures
• "weighted average effective interest rate on Term Debt" is calculated as the weighted average of the effective interest rates
on the outstanding balances of fixed rate mortgages, a variable-rate mortgage fixed through an interest rate swap and Class
C LP Units.
• "weighted average interest rate on variable-rate debt" is calculated as the weighted average contractual interest rate on the
revolving credit facility and the variable-rate mortgages for the period, excluding the variable-rate mortgage fixed through
an interest rate swap.
• "weighted average term to maturity on Term Debt" is calculated as the weighted average of the term to maturity on the
outstanding fixed rate mortgages, a variable-rate mortgage fixed through an interest rate swap and Class C LP Units.
Supplementary Financial Measures
• "average annual unlevered return" refers to the return on repositioning activities, and is calculated by dividing the average
annual rental increase per suite after repositioning by the average repositioning cost per suite, excluding the impact of
financing costs.
• "average total CDL amount outstanding" is calculated by the average total amount outstanding on the convertible
development loans at the beginning of the period and at the end of the period.
• "Debt Service Coverage ratio" is the ratio of NOI to total debt service. For reconciliation refer to Section IV – “Liquidity,
Capital Resources and Contractual Commitments – Reconciliation of Non-IFRS Financial Measures and Ratios”.
• "Debt-to-Gross Book Value ratio" is calculated by dividing total interest-bearing debt consisting of fixed and variable-rate
mortgages, credit facility, construction loans and Class C LP Units by Gross Book Value and is used as the REIT's primary
measure of its leverage. For reconciliation refer to Section IV – “Liquidity, Capital Resources and Contractual Commitments
– Liquidity and Capital Resources”.
• "Distribution yield per unit" is calculated as the annualized distribution rate per Unit and Class B LP Unit, excluding the
Special Distribution, divided by the Unit closing price as of the applicable balance sheet date.
• "gain-on-lease" refers to the gap between rents achieved on new leases of unfurnished suites as compared to expiring
leases.
Minto Apartment Real Estate Investment Trust | Management's Discussion and Analysis - 2024
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• "gain-to-lease potential" refers to the gap between Management's estimate of monthly market rent and average monthly
in-place rent per occupied unfurnished suite.
• "Gross Book Value" is calculated as the total assets of the REIT as at the applicable balance sheet date.
• "gross project costs" represent initial acquisition cost and associated development project costs, including hard costs, soft
costs, development and construction management costs, financing costs, goods and services tax and harmonized sales tax.
• "interest costs" are calculated as the sum of costs incurred on fixed and variable-rate mortgages, credit facility, and Class C
LP Units and excludes debt retirement costs.
• "Contractual interest expense" is calculated as the sum of interest costs incurred on fixed and variable-rate mortgages,
credit facility, and Class C LP Units and excludes debt retirement costs, amortization of deferred financing charges, and
amortization of mark-to-market adjustments.
• "NAV" is calculated as the sum of the value of Unitholders' equity and Class B LP Units as at the applicable balance sheet
date. For reconciliation refer to Section IV – “Liquidity, Capital Resources and Contractual Commitments – Reconciliation of
Non-IFRS Financial Measures and Ratios”.
• "NAV per unit" is calculated by dividing NAV by the number of Units and Class B LP Units outstanding as at the applicable
balance sheet date. For reconciliation refer to Section IV – “Liquidity, Capital Resources and Contractual Commitments –
Reconciliation of Non-IFRS Financial Measures and Ratios”.
• "NOI" is defined as revenue from investment properties less property operating costs, property taxes and utilities
(collectively referred to as "property operating expenses" or "operating expenses") prepared in accordance with IFRS. NOI
should not be construed as an alternative to net income determined in accordance with IFRS. The REIT’s method of
calculating NOI may differ from other issuers’ methods and, accordingly, may not be comparable to NOI reported by other
issuers. The REIT regards NOI as an important measure of the income generated from income-producing properties and is
used by Management in evaluating the performance of the REIT’s properties. It is also a key input in determining the value
of the REIT’s properties. For reconciliation refer to Section IV – “Liquidity, Capital Resources and Contractual Commitments
– Reconciliation of Non-IFRS Financial Measures and Ratios”.
• "NOI margin" is defined as NOI divided by revenue from investment properties. For reconciliation refer to Section IV –
“Liquidity, Capital Resources and Contractual Commitments – Reconciliation of Non-IFRS Financial Measures and Ratios”.
• "Normalized NOI" is calculated as NOI net of nonrecurring items that occurred during the period which are not indicative of
the REIT's typical operating results. For reconciliation refer to Section IV – “Liquidity, Capital Resources and Contractual
Commitments – Reconciliation of Non-IFRS Financial Measures and Ratios”.
• "Normalized NOI margin" is defined as Normalized NOI divided by revenue from investment properties. For reconciliation
refer to Section IV – “Liquidity, Capital Resources and Contractual Commitments – Reconciliation of Non-IFRS Financial
Measures and Ratios”.
• "Normalized operating expenses" are calculated as operating expenses net of nonrecurring items that occurred during the
period which are not indicative of the REIT's typical operating results. For reconciliation refer to Section IV – “Liquidity,
Capital Resources and Contractual Commitments – Reconciliation of Non-IFRS Financial Measures and Ratios”.
• "Normalized property operating costs" are calculated as property operating costs net of nonrecurring items that occurred
during the period which are not indicative of the REIT's typical operating results. For reconciliation refer to Section IV –
“Liquidity, Capital Resources and Contractual Commitments – Reconciliation of Non-IFRS Financial Measures and Ratios”.
• "Normalized property taxes" are calculated as property taxes net of nonrecurring items that occurred during the period
which are not indicative of the REIT's typical operating results. For reconciliation refer to Section IV – “Liquidity, Capital
Resources and Contractual Commitments – Reconciliation of Non-IFRS Financial Measures and Ratios”.
• "property operating costs % of revenue from investment properties" is calculated as property operating costs for the
period, divided by revenue from investment properties for the period.
• "property taxes % of revenue from investment properties" is calculated as property taxes for the period, divided by revenue
from investment properties for the period.
• "Term Debt" is calculated as the sum of the amortized cost of fixed rate mortgages, a variable-rate mortgage fixed through
an interest rate swap and Class C LP Units.
• "Total Debt" is calculated as the sum of the amortized cost of interest-bearing debt consisting of a variable-rate credit
facility and fixed rate debt comprised of mortgages, a variable-rate mortgage fixed through an interest rate swap, Class C LP
Units, and the construction loan.
Minto Apartment Real Estate Investment Trust | Management's Discussion and Analysis - 2024
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• "Total Debt, net of cash" is calculated as Total Debt, reduced by cash balance.
• "total debt service" is calculated as the sum of interest expense recorded as finance costs and principal payments on
mortgages, construction loan, credit facility and distributions on Class C LP Units.
• "Total liquidity" is calculated as the sum of the undrawn balance under the revolving credit facility and cash.
• "utilities % of revenue from investment properties" is calculated as utilities expense for the period, divided by revenue from
investment properties for the period.
Operating Performance Measures
• "annualized turnover" is calculated as the number of move-outs for the period divided by total number of unfurnished
suites in the portfolio. This percentage is extrapolated to determine an annual rate.
• "average monthly rent" represents the average monthly rent per suite for occupied unfurnished suites at the end of the
period.
• "average monthly rent for furnished suites" represents the average daily rent per suite for furnished suites for the period
multiplied by 30.
• "average number of furnished suites" represents the average daily furnished suite count for the period.
• "average occupancy" is defined as the ratio of occupied unfurnished suites to the weighted average of the total unfurnished
suites in the portfolio for the period.
• "average occupancy for furnished suites" is the ratio of occupied furnished suites to the weighted average of the total
furnished suites in the portfolio for the period.
• "closing occupancy" is defined as the ratio of occupied unfurnished suites to the total unfurnished suites in the portfolio at
the end of the period.
Minto Apartment Real Estate Investment Trust | Management's Discussion and Analysis - 2024
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KPMG LLP
Bay Adelaide Centre
333 Bay Street, Suite 4600
Toronto, ON M5H 2S5
Canada
Tel 416-777-8500
Fax 416-777-8818
KPMG LLP, an Ontario limited liability partnership and member firm of the KPMG global organization of independent member firms affiliated
with KPMG International Limited, a private English company limited by guarantee. KPMG Canada provides services to KPMG LLP.
INDEPENDENT AUDITOR’S REPORT
To the Unitholders of Minto Apartment Real Estate Investment Trust,
Opinion
We have audited the consolidated financial statements of Minto Apartment Real Estate
Investment Trust (the “Entity”), which comprise:
x
the consolidated balance sheets as at December 31, 2024 and December 31, 2023
x
the consolidated statements of net income (loss) and comprehensive income (loss) for the
years then ended
x
the consolidated statements of changes in unitholders' equity for the years then ended
x
the consolidated statements of cash flows for the years then ended
x
and notes to the consolidated financial statements, including a summary of material
accounting policy information
(Hereinafter referred to as the “financial statements”).
In our opinion, the accompanying financial statements present fairly, in all material respects, the
consolidated financial position of the Entity as at December 31, 2024 and December 31, 2023,
its consolidated financial performance and its consolidated cash flows for the years then ended
in accordance with IFRS Accounting Standards as issued by the International Accounting
Standards Board.
Basis for Opinion
We conducted our audit in accordance with Canadian generally accepted auditing standards. Our
responsibilities under those standards are further described in the “Auditor’s Responsibilities
for the Audit of the Financial Statements” section of our auditor’s report.
We are independent of the Entity in accordance with the ethical requirements that are relevant to
our audit of the financial statements in Canada and we have fulfilled our other ethical
responsibilities in accordance with these requirements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a
basis for our opinion.
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Page 2
Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most significance
in our audit of the financial statements for the year ended December 31, 2024. These matters
were addressed in the context of our audit of the financial statements as a whole, and in forming
our opinion thereon, and we do not provide a separate opinion on these matters.
We have determined the matter described below to be the key audit matters to be communicated
in our auditor’s report.
Evaluation of the fair value of residential investment properties
Description of the matter
We draw attention to Note 2(e), Note 2(q) and Note 3 of the financial statements. The Entity uses
the fair value method to account for real estate classified as investment property. The Entity has
recorded residential investment properties for an amount of $2,265,929 thousand, representing
the most significant portion of investment properties. Significant assumptions in determining the
fair value of residential properties include:
x
estimated 12-month stabilized forecasted net operating income for each property.
x
capitalization rates.
Why the matter is a key audit matter
We identified the evaluation of the fair value of residential investment properties as a key audit
matter. This matter represented an area of significant risk of material misstatement given the
magnitude of residential investment properties and the high degree of estimation uncertainty in
determining the fair value of residential investment properties. Additionally, significant auditor
judgment and involvement of those with specialized skills and knowledge were required in
evaluating the results of our audit procedures due to the sensitivity of the fair value of residential
investment properties to minor changes in significant assumptions.
How the matter was addressed in the audit
The primary procedures we performed to address this key audit matter included the following:
For a selection of residential investment properties, we assessed the Entity’s ability to forecast
by comparing the Entity’s estimated 12-month stabilized forecasted net operating income used
in the prior year’s estimate of the fair value of residential investment properties to actual results.
For a selection of residential investment properties, we compared the estimated
12-month stabilized forecasted net operating income for each selected property to the actual
historical net operating income by:
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Page 3
x
taking into account the changes in conditions and events affecting the residential investment
properties.
x
considering the adjustments, or lack of adjustments, made by the Entity in arriving at the
estimated 12-month stabilized forecasted net operating income.
We involved valuations professionals with specialized skills and knowledge who assisted in
evaluating the capitalization rates of the overall portfolio of residential investment properties.
These rates were evaluated by comparing them to published reports of real estate industry
commentators and considering the various characteristics of the portfolio.
Other Information
Management is responsible for the other information. Other information comprises:
x
the information included in Management’s Discussion and Analysis filed with the relevant
Canadian Securities Commissions.
x
the information, other than the financial statements and the auditor’s report thereon, included
in a document entitled “2024 Annual Report”.
Our opinion on the financial statements does not cover the other information and we do not and
will not express any form of assurance conclusion thereon.
In connection with our audit of the financial statements, our responsibility is to read the other
information identified above and, in doing so, consider whether the other information is materially
inconsistent with the financial statements or our knowledge obtained in the audit and remain alert
for indications that the other information appears to be materially misstated.
We obtained the information included in Management’s Discussion and Analysis filed with the
relevant Canadian Securities Commissions and the 2024 Annual Report as at the date of this
auditor’s report.
If, based on the work we have performed on this other information, we conclude that there is a
material misstatement of this other information, we are required to report that fact in the auditor’s
report.
We have nothing to report in this regard.
Responsibilities of Management and Those Charged with Governance for the
Financial Statements
Management is responsible for the preparation and fair presentation of the financial statements
in accordance with IFRS Accounting Standards as issued by the International Accounting
Standards Board, and for such internal control as management determines is necessary to
enable the preparation of financial statements that are free from material misstatement, whether
due to fraud or error.
In preparing the financial statements, management is responsible for assessing the Entity's ability
to continue as a going concern, disclosing as applicable, matters related to going concern and
using the going concern basis of accounting unless management either intends to liquidate the
Entity or to cease operations, or has no realistic alternative but to do so.
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Page 4
Those charged with governance are responsible for overseeing the Entity's financial reporting
process.
Auditor’s Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a
whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s
report that includes our opinion.
Reasonable assurance is a high level of assurance, but is not a guarantee that an audit
conducted in accordance with Canadian generally accepted auditing standards will always detect
a material misstatement when it exists.
Misstatements can arise from fraud or error and are considered material if, individually or in the
aggregate, they could reasonably be expected to influence the economic decisions of users taken
on the basis of the financial statements.
As part of an audit in accordance with Canadian generally accepted auditing standards, we
exercise professional judgment and maintain professional skepticism throughout the audit.
We also:
x
Identify and assess the risks of material misstatement of the financial statements, whether
due to fraud or error, design and perform audit procedures responsive to those risks, and
obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion.
The risk of not detecting a material misstatement resulting from fraud is higher than for one
resulting from error, as fraud may involve collusion, forgery, intentional omissions,
misrepresentations, or the override of internal control.
x
Obtain an understanding of internal control relevant to the audit in order to design audit
procedures that are appropriate in the circumstances, but not for the purpose of expressing
an opinion on the effectiveness of the Entity's internal control.
x
Evaluate the appropriateness of accounting policies used and the reasonableness of
accounting estimates and related disclosures made by management.
x
Conclude on the appropriateness of management's use of the going concern basis of
accounting and, based on the audit evidence obtained, whether a material uncertainty exists
related to events or conditions that may cast significant doubt on the Entity's ability to continue
as a going concern. If we conclude that a material uncertainty exists, we are required to draw
attention in our auditor’s report to the related disclosures in the financial statements or, if such
disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit
evidence obtained up to the date of our auditor’s report. However, future events or conditions
may cause the Entity to cease to continue as a going concern.
x
Evaluate the overall presentation, structure and content of the financial statements, including
the disclosures, and whether the financial statements represent the underlying transactions
and events in a manner that achieves fair presentation.
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Page 5
x
Communicate with those charged with governance regarding, among other matters, the
planned scope and timing of the audit and significant audit findings, including any significant
deficiencies in internal control that we identify during our audit.
x
Provide those charged with governance with a statement that we have complied with relevant
ethical requirements regarding independence, and communicate with them all relationships
and other matters that may reasonably be thought to bear on our independence, and where
applicable, related safeguards.
x
Plan and perform the group audit to obtain sufficient appropriate audit evidence regarding the
financial information of the entities or business units within the group as a basis for forming
an opinion on the group financial statements. We are responsible for the direction, supervision
and review of the audit work performed for the purposes of the group audit. We remain solely
responsible for our audit opinion.
x
Determine, from the matters communicated with those charged with governance, those
matters that were of most significance in the audit of the financial statements of the current
period and are therefore the key audit matters. We describe these matters in our auditor’s
report unless law or regulation precludes public disclosure about the matter or when, in
extremely rare circumstances, we determine that a matter should not be communicated in
our auditor’s report because the adverse consequences of doing so would reasonably be
expected to outweigh the public interest benefits of such communication.
Chartered Professional Accountants, Licensed Public Accountants
The engagement partner on the audit resulting in this auditor’s report is Amit Shah.
Toronto, Canada
March 5, 2025
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Consolidated Balance Sheets
(in thousands of Canadian dollars, except Unit and per Unit amounts)
Note
December 31, 2024
December 31, 2023
Assets
Investment properties
3
$
2,414,224 $
2,454,533
Assets held for sale
3, 4
69,000
86,000
Loans receivable from related parties
12
128,911
133,286
Prepaid expenses and other assets
6
23,747
21,354
Resident and other receivables
7
3,655
3,207
Cash
5,878
3,740
$
2,645,415 $
2,702,120
Liabilities and Unitholders' Equity
Liabilities
Class B LP Units
8
$
343,572 $
416,716
Class C LP Units
9
214,290
227,411
Mortgages and loan
10
886,482
789,817
Credit facility
11
24,500
140,236
Tenant rental deposits
10,970
11,318
Due to related parties
12
7,745
3,202
Accounts payable and accrued liabilities
13
42,109
36,039
$
1,529,668 $
1,624,739
Unitholders' equity
1,115,747
1,077,381
Contingencies and commitments
18
Subsequent events
24
$
2,645,415 $
2,702,120
See accompanying notes to the consolidated financial statements.
Minto Apartment Real Estate Investment Trust
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Consolidated Statements of Net Income (Loss) and Comprehensive Income
(Loss)
For the years ended December 31, 2024 and 2023
(in thousands of Canadian dollars, except Unit and per Unit amounts)
Note
December 31, 2024
December 31, 2023
Revenue from investment properties
16
$
157,088 $
157,925
Property operating expenses
Property operating costs
29,572
29,568
Property taxes
15,760
16,187
Utilities
11,185
13,002
56,517
58,757
Property operating income
100,571
99,168
Other expenses (income)
General and administrative
10,061
10,446
Finance costs - operations
17
50,186
56,669
Finance income
(7,873)
(7,381)
Fair value loss (gain) on:
Investment properties
3
61,279
101,627
Class B LP Units
8, 17
(73,144)
54,858
Interest rate swap
6, 17
1,246
751
Unit-based compensation
22
(1,585)
596
Loss on disposition
615
1,402
Fees and other income
(3,452)
(3,141)
37,333
215,827
Net income (loss) and comprehensive income (loss)
$
63,238 $
(116,659)
See accompanying notes to the consolidated financial statements.
Minto Apartment Real Estate Investment Trust
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Consolidated Statements of Changes in Unitholders' Equity
For the years ended December 31, 2024 and 2023
(in thousands of Canadian dollars, except Unit and per Unit amounts)
Note
Units
Distributions
Retained
earnings
Total
Balance, December 31, 2022
$
710,873 $
(66,375) $
569,039 $
1,213,537
Net loss and comprehensive loss
—
—
(116,659)
(116,659)
Distributions
14
—
(19,645)
—
(19,645)
Units issued, net of issue costs
14
148
—
—
148
Balance, December 31, 2023
$
711,021 $
(86,020) $
452,380 $
1,077,381
Net income and comprehensive income
—
—
63,238
63,238
Cancellation of Units under normal course
issuer bid
14
(6,020)
—
1,151
(4,869)
Distributions in Units
14
30,050
(30,080)
—
(30)
Distributions
14
—
(20,233)
—
(20,233)
Units issued, net of issue costs
14
260
—
—
260
Balance, December 31, 2024
$
735,311 $
(136,333) $
516,769 $
1,115,747
See accompanying notes to the consolidated financial statements.
Minto Apartment Real Estate Investment Trust
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Consolidated Statements of Cash Flows
For the years ended December 31, 2024 and 2023
(in thousands of Canadian dollars, except Unit and per Unit amounts)
Note
December 31, 2024
December 31, 2023
Cash provided by (used in):
Operating activities
Net income (loss)
$
63,238 $
(116,659)
Adjustments for:
Finance costs - operations
17
50,186
56,669
Finance income
(7,873)
(7,381)
Loss on disposition
615
1,402
Straight-line rent
(41)
—
Fair value loss (gain) on:
Investment properties
3
61,279
101,627
Class B LP Units
8, 17
(73,144)
54,858
Interest rate swap
6, 17
1,246
751
Unit-based compensation
22
(1,585)
596
Change in non-cash working capital
21
1,949
1,103
Cash provided by operating activities
95,870
92,966
Financing activities
Proceeds from mortgage financing
10
95,102
317,122
Principal repayments on mortgages
10
(14,203)
(14,036)
Mortgage principal repayments on disposition
10
(9,659)
—
Mortgage payments on refinancing
10
—
(230,999)
Proceeds from construction loan
10
25,248
7,149
Proceeds from issuance of Class C LP Units
9
—
25,774
Distributions on Class C LP Units, used to repay principal
9
(12,760)
(5,518)
CMHC premiums paid
(4,071)
(10,812)
Financing costs
(431)
(3,169)
Net repayments on credit facility
11
(115,736)
(16,922)
Interest paid
(40,346)
(43,960)
Distributions on Units
(20,196)
(19,597)
Class B LP Unit distributions paid
(8,219)
(12,651)
Purchase and cancellation of Units
14
(4,742)
—
Cash used in financing activities
(110,013)
(7,619)
Investing activities
Capital additions to investment properties
(39,551)
(48,087)
Loan advances to related parties
(14,351)
(30,586)
Loan advances to Class B LP Unitholders
8
(4,819)
—
Development of investment properties
(40,768)
(21,141)
Loan repayments from related parties
12
30,056
45
Net proceeds on disposition of investment properties
84,352
9,901
Interest received
1,362
2,938
Cash provided by (used in) investing activities
16,281
(86,930)
Change in cash during the year
2,138
(1,583)
Cash, beginning of the year
3,740
5,323
Cash, end of the year
$
5,878 $
3,740
See accompanying notes to the consolidated financial statements.
Minto Apartment Real Estate Investment Trust
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2024 Annual Report
68
1. Description of the entity
Minto Apartment Real Estate Investment Trust (the "REIT") is an unincorporated, open-ended real estate investment trust
established pursuant to a Declaration of Trust dated April 24, 2018, which was amended and restated on June 27, 2018, and has
been further amended from time to time. The REIT owns, develops and operates a portfolio of income-producing multi-
residential rental properties located in Canada.
The REIT was established under the laws of the Province of Ontario. The principal and registered office of the REIT is 200-180
Kent Street, Ottawa, Ontario.
At December 31, 2024, the REIT's portfolio consists of interests in 28 (December 31, 2023 - 29) multi-residential rental
properties, including four mixed-use residential apartment and commercial buildings, all of which are held by Minto Apartment
Limited Partnership (the "Partnership"), which is consolidated by the REIT.
2. Material accounting policies
(a) Basis of presentation and measurement
These consolidated financial statements have been prepared on a historical cost basis, except for investment properties,
Class B units of the Partnership ("Class B LP Units"), Unit-based compensation and interest rate swap, which have been
measured at fair value. The consolidated financial statements have been presented in Canadian dollars, which is the REIT's
functional currency.
The REIT's business faces risk from prominent economic factors, including economic growth, the interest rate environment,
and inflation, among other factors. The REIT has used all information available as at December 31, 2024 that it considers
relevant in determining the potential impact of these economic factors on the carrying amounts of assets and liabilities,
earnings for the period and risks disclosed in the consolidated financial statements for the year ended December 31, 2024.
The estimates and judgements that could be most significantly impacted by economic factors include those underlying the
valuation of investment properties. Actual results could differ from those estimates. Investment properties (Note 3) and
risk management (Note 19) include disclosures of the potential impacts of economic factors on the fair value of investment
properties and liquidity risk. The REIT continues to monitor and assess the impact that economic factors will have on its
business activities and financial results.
(b) Statement of compliance
These consolidated financial statements have been prepared in accordance with IFRS Accounting Standards ("IFRS") as
issued by the International Accounting Standards Board ("IASB") and using the accounting policies described herein.
These consolidated financial statements were approved by the Board of Trustees of the REIT and authorized for issuance
on March 5, 2025.
(c) Basis of consolidation
The consolidated financial statements include the financial statements of the REIT and its subsidiaries, including the
Partnership. Subsidiaries are consolidated from the date of acquisition, being the date on which the REIT obtains control,
and continue to be consolidated until the date when control is lost. Control exists when the REIT is exposed to, or has
rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power
over the entity. The accounting policies of subsidiaries have been modified when necessary to align them with the policies
adopted by the REIT. All intra-group balances, transactions and unrealized gains and losses are eliminated in full upon
consolidation.
Minto Apartment Real Estate Investment Trust
Notes to the Consolidated Financial Statements
For the years ended December 31, 2024 and 2023
(in thousands of Canadian dollars, except Unit and per Unit amounts)
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(d) Joint arrangements
The REIT has joint arrangements in and therefore joint control of certain investment properties which it manages. The REIT
has assessed the nature of its joint arrangements and determined them to be joint operations. The REIT accounts for joint
operations by recognizing, in relation to its interest, its share of revenues, expenses, assets and liabilities, which are
included in their respective captions on the consolidated balance sheets and consolidated statements of net income and
comprehensive income. All balances and effects of transactions between joint operations and the REIT have been
eliminated to the extent of the REIT's interest in the joint operations.
(e) Investment properties
The REIT uses the fair value method to account for real estate classified as investment property. Property that is held for
long term rentals or for capital appreciation or both is classified as investment property. Investment property also includes
property that is being constructed or developed for future use as investment property and land held for future
development to earn rental income. Subsequent capital expenditures are added to the carrying value of the investment
properties only when it is probable that future economic benefits will flow to the property and the cost can be measured
reliably. All repairs and maintenance costs are expensed as incurred.
The acquisition of investment properties is initially measured at cost including directly attributable acquisition costs,
except when acquired through a business combination, where such costs are expensed as incurred. Directly attributable
acquisition costs include professional fees, land transfer taxes and other transaction costs.
After initial recognition, investment properties are carried at fair value, which is determined based on available market
evidence at each reporting date, including capitalization rates that reflect the characteristics, location and market of each
property. Gains or losses arising from changes in fair value are included in the consolidated statements of net income and
comprehensive income during the period in which they arise. When an investment property is disposed of, the gain or loss
is determined as the difference between the disposal proceeds, net of selling costs and the carrying amount of the
property and is recognized in the consolidated statements of net income and comprehensive income in the period of
disposal.
Fair value for residential properties is predominantly determined using the direct capitalization approach. This approach
applies an appropriate capitalization rate, which reflects the characteristics, location and market of each property to the
estimated 12 month stabilized forecasted net operating income for each property, and deducting estimated aggregate
future capital expenditures. Estimated 12 month stabilized forecasted net operating income is based on the respective
property's forecasted results, adjusted to reflect market occupancy rates and expenditure levels. Fair value is determined
based on internal valuation models.
Fair value for commercial properties is determined using the discounted future cash flow approach, typically over a term of
ten years plus a terminal value. Discount rates and terminal capitalization rates reflect the characteristics, location and
market of each property. Future cash flows are based on estimated rental revenue from future leases less related
estimated future cash outflows. Fair value is determined based on internal valuation models.
Fair value for land held for development is determined by reference to comparable market prices for similar assets.
Fair value for land under development is determined by reference to comparable market prices for similar assets, if
available, plus development costs incurred to date. These costs include costs directly attributable to the development,
construction costs, property taxes, directly attributable labour costs and borrowing costs on both specific and general
debt. Direct and indirect borrowing costs, development costs and property taxes are capitalized when the activities
necessary to prepare an asset for development or redevelopment begin, and continue until the date that construction is
substantially complete and all necessary occupancy and related permits have been received, whether or not the space is
leased. Capitalization of borrowing costs is suspended if there are prolonged periods when development activity is
interrupted.
Fair value for investment properties under development is determined by estimating the fair value of the stabilized
investment property with a deduction for estimated development costs remaining to complete the project. A development
project is considered an investment property under development when the future cash flows from the completed and
stabilized property can be reasonably determined.
Minto Apartment Real Estate Investment Trust
Notes to the Consolidated Financial Statements
For the years ended December 31, 2024 and 2023
(in thousands of Canadian dollars, except Unit and per Unit amounts)
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Interest is capitalized using the REIT's weighted average cost of borrowing after adjusting for borrowing associated with
specific developments. Where borrowing is associated with specific developments, the amount capitalized is the gross
interest incurred on such borrowing less any investment income arising on temporary investment of such borrowing.
As part of the internal valuation process, the REIT considers external valuations performed by independent national real
estate valuation firms for a cross-section of its properties that represent different geographical locations across the REIT’s
portfolio. On a quarterly basis, Management reviews and updates, as deemed necessary, the valuation models to reflect
current market data.
(f)
Financial instruments
Financial instruments are generally measured at fair value on initial recognition. The classification and measurement of
financial assets consists of the following categories: (i) measured at amortized cost, (ii) fair value through profit and loss
("FVTPL"), and (iii) fair value through other comprehensive income (‘‘FVTOCI’’). Financial assets classified at amortized cost
are measured using the effective interest method. Financial assets classified as FVTPL are measured at fair value with gains
and losses recognized in the consolidated statements of net income and comprehensive income. Financial assets classified
as FVTOCI are measured at fair value with gains or losses recognized through other comprehensive income, except for
gains and losses pertaining to impairment or foreign exchange which are recognized through the consolidated statements
of net income and comprehensive income.
The classification and measurement of financial liabilities consists of the following categories: (i) measured at amortized
cost and (ii) FVTPL. Financial liabilities classified at amortized cost are measured using the effective interest method.
Financial liabilities classified as FVTPL are measured at fair value with changes in fair value attributable to changes in the
credit risk of the liability recognized in other comprehensive income, and the remaining amount of change in fair value
recognized in the consolidated statements of net income and comprehensive income.
The REIT has made the following classifications for its financial instruments:
Amount
Measurement
Loans receivable from related parties
Amortized cost
Restricted cash
Amortized cost
Interest rate swap
FVTPL
Resident and other receivables
Amortized cost
Cash
Amortized cost
Class B LP Units
FVTPL
Class C LP Units
Amortized cost
Mortgages and loans
Amortized cost
Credit facility
Amortized cost
Tenant rental deposits
Amortized cost
Due to related parties
Amortized cost
Accounts payable and accrued liabilities
Amortized cost
The REIT derecognizes a financial asset only when the contractual rights to the cash flows from the asset expire or when it
transfers the financial asset and substantially all the risks and rewards of ownership of the asset to another entity. The REIT
derecognizes a financial liability when, and only when, the REIT's obligations are discharged, cancelled or they expire. The
difference between the carrying amount of the financial liability derecognized and the consideration paid and payable is
recognized in the consolidated statements of net income and comprehensive income.
Transaction costs other than those related to financial instruments classified as FVTPL, which are expensed as incurred, are
capitalized to the carrying amount of the instrument and amortized using the effective interest method. These costs
include interest, amortization of discounts or premiums relating to borrowings, fees and commissions paid to agents,
brokers and advisers, transfer taxes and duties, and a portion of Canada Mortgage and Housing Corporation ("CMHC")
insurance premiums related to current mortgages.
Minto Apartment Real Estate Investment Trust
Notes to the Consolidated Financial Statements
For the years ended December 31, 2024 and 2023
(in thousands of Canadian dollars, except Unit and per Unit amounts)
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Units
Trust units of the REIT ("Units") are redeemable at the holder's option and therefore are considered to be a puttable
instrument in accordance with IAS 32, Financial Instruments: Presentation ("IAS 32"). Puttable instruments are required to
be accounted for as financial liabilities, except where certain conditions are met in accordance with IAS 32, in which case
the puttable instruments may be presented as equity. The Units meet the exemption conditions of IAS 32 and are
presented as equity.
Units represent a Unitholder's proportionate undivided beneficial interest in the REIT. No Unit has any preference or
priority over another. No Unitholder has or is deemed to have any right of ownership in any of the assets of the REIT. Each
Unit confers the right to one vote at any meeting of Unitholders and to participate pro rata in any distributions and, on
liquidation, to a pro rata share of the residual net assets remaining after preferential claims thereon of debtholders.
The REIT does not report an earnings per unit calculation, as per IAS 33, Earnings Per Share, as the Units meet the
definition of a financial liability under IAS 32.
Unitholders have the right to redeem their Units at the lesser of (i) 90% of the market price of the Units and (ii) 100% of
the closing market price on the redemption date. The redemption price will be satisfied by cash up to a limit of $50 for all
redemptions in a calendar month, which can be waived at the discretion of the REIT's Trustees.
Class B LP Units
The Class B LP Units are economically equivalent to Units, receive distributions equal to the distributions paid on Units and
are exchangeable at the holder’s option into Units. One Special Voting Unit in the REIT is issued to the holder of Class B LP
Units for each Class B LP Unit held, which entitles the holder to one vote per Special Voting Unit at any meeting of the
Unitholders. The limited IAS 32 exception for presentation as equity does not extend to the Class B LP Units. As a result,
the Class B LP Units have been classified as financial liabilities and are measured at FVTPL. The fair value of the Class B LP
Units is measured every period by reference to the traded value of the Units, with changes in measurement recorded in
the consolidated statements of net income and comprehensive income. Distributions on the Class B LP Units are recorded
as a finance cost in the consolidated statements of net income and comprehensive income in the period in which the
distributions become payable.
Class C LP Units
The Class C units of the Partnership ("Class C LP Units") provide for monthly distributions from the Partnership to the
holder of such Class C LP Units to be paid in priority to distributions to holders of the Units and Class B LP Units. Due to the
nature of such distributions, the Class C LP Units have been classified as financial liabilities and are carried at amortized
cost. Distributions on the Class C LP Units consist of principal repayments and interest expense, with principal repayments
reducing the outstanding liability and interest expense recorded in finance costs in the consolidated statements of net
income and comprehensive income in the period in which the distributions become payable.
Impairment of financial assets
The REIT has adopted the practical expedient to estimate the expected credit loss ("ECL") on resident and other receivables
using a provision matrix based on historical credit loss experience adjusted for current and forecasted future economic
conditions. Resident and other receivables are initially measured at fair value and are subsequently measured at amortized
cost less a provision for impairment.
Minto Apartment Real Estate Investment Trust
Notes to the Consolidated Financial Statements
For the years ended December 31, 2024 and 2023
(in thousands of Canadian dollars, except Unit and per Unit amounts)
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The REIT recognizes loss allowances for ECL on the remaining financial assets measured at amortized cost, unfunded loan
commitments and financial guarantee contracts. The REIT applies a three-stage approach to measure allowance for credit
losses. The REIT measures loss allowance at an amount equal to 12 months of expected losses for performing loans if the
credit risk at the reporting date has not increased significantly since initial recognition (Stage 1) and at an amount equal to
lifetime expected losses on performing loans that have experienced a significant increase in credit risk since origination
(Stage 2) and at an amount equal to lifetime expected losses which are credit impaired (Stage 3). The determination of a
significant increase in credit risk takes into account different factors and varies by nature of investment. The REIT assumes
that the credit risk on a financial asset has increased significantly if it is more than 30 days past due or certain criteria are
met which are specific to the individual borrower based on judgment. The REIT considers a financial asset to be credit
impaired when the borrower is more than 90 days past due and when there is objective evidence that there has been a
deterioration of credit quality to the extent the REIT no longer has reasonable assurance as to the timely collection of the
full amount of principal and interest or when the REIT has commenced enforcement remedies available to it under its
contractual agreements.
Measurement of ECL
Loss allowances for ECLs are probability-weighted estimates of credit losses. Credit losses are measured as the present
value of all cash shortfalls (i.e. the difference between the cash flows due to the REIT in accordance with the contract and
the cash flows that the REIT expects to receive) and incorporate significant assumptions including the probability of default
as well as the estimated loss given default. ECLs are discounted at the effective interest rate of the financial asset.
Lifetime ECLs are the ECLs that result from all possible default events over the expected life of a financial instrument. 12-
month ECLs are the portion of ECLs that result from default events that are possible within the 12 months after the
reporting date (or a shorter period if the expected life of the instrument is less than 12 months). The maximum period
considered when estimating ECLs is the maximum contractual period over which the REIT is exposed to credit risk.
The determination of ECLs of a collateralized impaired loan reflects the expected realization of the underlying security, net
of expected costs and any amounts legally required to be paid to the borrower.
When determining the allowance for ECLs, the REIT considers reasonable and supportable information that is relevant and
available without undue cost or effort. Management considers past events, current market conditions and reasonable
forward-looking supportable information about future economic conditions. In assessing information about possible future
economic conditions, management utilized multiple economic scenarios including a base case, which represents the most
probable outcome and is consistent with management's view of the financial asset. In considering the lifetime of a loan,
the contractual period of the loan, including prepayment, extension and other options is generally used.
The estimation of ECLs also includes assumptions about local real estate market conditions, availability and terms of
financing, underlying value of the security and various other factors. These assumptions are limited by the availability of
reliable comparable market data, economic uncertainty and the uncertainty of future events. Accordingly, by their nature,
estimates of impairment are subjective and may not necessarily be comparable to the actual outcome. Should the
underlying assumptions change, the estimated future cash flows could vary.
(g) Fair value measurement
The REIT measures financial instruments, such as Class B LP Units, interest rate swap and Unit-based compensation, and
non-financial assets, such as investment properties, at fair value at each balance sheet date. Fair value is the price that
would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the
measurement date under current market conditions. The fair value measurement is based on the presumption that the
transaction to sell the asset or transfer the liability takes place either:
•
In the principal market for the asset or liability; or
•
In the absence of a principal market, in the most advantageous market for the asset or liability.
The principal or the most advantageous market must be accessible by the REIT.
The fair value of an asset or a liability is measured using the assumptions that market participants would use when pricing
the asset or liability assuming that market participants act in their economic best interests.
Minto Apartment Real Estate Investment Trust
Notes to the Consolidated Financial Statements
For the years ended December 31, 2024 and 2023
(in thousands of Canadian dollars, except Unit and per Unit amounts)
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A fair value measurement of a non-financial asset takes into account a market participant’s ability to generate economic
benefits by using the asset in its highest and best use or by selling it to another market participant that would use the asset
in its highest and best use.
The REIT uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available to
measure fair value, maximizing the use of relevant observable inputs and minimizing the use of unobservable inputs.
All assets and liabilities for which fair value is measured or disclosed in the consolidated financial statements are
categorized within the fair value hierarchy, described as follows, based on the lowest level input that is significant to the
fair value measurement as a whole:
•
Level 1 - Quoted (unadjusted) market prices in active markets for identical assets or liabilities
•
Level 2 - Valuation techniques for which the lowest level input that is significant to the fair value
measurement is directly or indirectly observable
•
Level 3 - Valuation techniques for which the lowest level input that is significant to the fair value
measurement is unobservable
For assets and liabilities that are recognized in the consolidated financial statements on a recurring basis, the REIT
determines whether transfers have occurred between levels in the hierarchy by reassessing categorization (based on the
lowest level input that is significant to the fair value measurement as a whole) at the end of each reporting period.
Cash, restricted cash, resident and other receivables, due to related parties, tenant rental deposits and accounts payable
and accrued liabilities are carried at amortized cost, which, due to their short term nature, approximates fair value.
Additionally, the credit facility is carried at amortized cost, which, due to its variable rate, approximates fair value.
The REIT estimates the fair value of its mortgages and Class C LP Units based on the rates that could be obtained for similar
debt instruments with similar terms and maturities. Their fair value qualifies as level 2 in the fair value hierarchy above.
The fair value of Class B LP Units and Unit-based compensation is measured every period by reference to the traded value
of Units and is considered Level 2 in the fair value hierarchy.
The fair value of the interest rate swap is determined using widely accepted valuation techniques, including discounted
cash flow analysis on expected cash flows of the derivatives, using observable market-based inputs including interest rate
curves and implied volatilities, and is considered level 2 in the fair value hierarchy.
The fair value of the loans receivable from related parties is determined by reference to rates that could be obtained for
similar instruments with similar terms and maturities and is considered level 2 in the fair value hierarchy.
There were no transfers of assets or liabilities between fair value levels during the periods presented herein.
(h) Assets held for sale
Investment properties are classified as held for sale if it is highly probable that they will be recovered primarily through
sale rather than through continuing use as defined in IFRS 5, Non-current Assets Held for Sale and Discontinued Operations.
Investment properties classified as held for sale are recorded at fair value in accordance with the valuation policies
described in Note 2(e).
(i)
CMHC premiums
CMHC mortgage insurance premiums provide coverage over the loan amortization period, typically 25 to 45 years. The
portion related to the term of currently outstanding mortgages is accounted for as a financing charge and amortized over
the life of respective mortgages using the effective interest method. The remaining portion of the CMHC mortgage
insurance premiums is classified as a prepaid expense.
(j)
Cash
Cash includes cash on hand and cash maintained in bank accounts.
Minto Apartment Real Estate Investment Trust
Notes to the Consolidated Financial Statements
For the years ended December 31, 2024 and 2023
(in thousands of Canadian dollars, except Unit and per Unit amounts)
| Minto Apartment REIT
2024 Annual Report
74
(k) Income taxes
The REIT is a "mutual fund trust" and a "real estate investment trust" as defined in the Income Tax Act (Canada). Under
current tax legislation, a “real estate investment trust” is entitled to deduct distributions of taxable income such that it is
not liable to pay income taxes provided that its taxable income is fully distributed to Unitholders. The REIT qualifies as a
“real estate investment trust” and intends to make distributions not less than the amount necessary to ensure that the
REIT will not be liable to pay income taxes. Accordingly, no net current tax expenses or current or deferred income tax
asset or liability has been recorded in the consolidated financial statements.
(l)
Revenue recognition
The REIT retains substantially all of the risks and benefits of ownership of its investment properties and therefore accounts
for leases with its tenants as operating leases.
Rental revenue includes base rents earned from tenants under operating lease agreements which is allocated to lease
components based on relative stand-alone selling prices. The stand-alone selling prices of the rental component are
determined using an adjusted market assessment approach and the stand-alone selling prices of the service components
are determined using an expected cost plus a margin approach.
Rental revenue from the rental component is recognized on a straight-line basis over the lease term. When the REIT
provides incentives to its tenants, the cost of incentives is recognized over the lease term, on a straight-line basis, as a
reduction of revenue.
Revenue from services represents the service component of the REIT’s leases and is accounted for in accordance with IFRS
15, Revenue from Contracts with Customers (‘‘IFRS 15’’). These services consist primarily of the recovery of utility, property
maintenance and amenity costs where the REIT has determined it is acting as a principal and is recognized over time when
the services are provided. Payments are due at the beginning of each month and any payments made in advance of
scheduled due dates are recorded as contract liabilities.
Management fees are earned from asset, project and property management of jointly controlled properties. Management
fees are recorded in fees and other income as the services are provided. Payments for property management fees are due
at the beginning of each month, asset management fees are due at the beginning of each quarter and project management
fees are due 30 days in arrears.
(m) Finance costs
Finance costs are comprised of interest expense on secured debt and unsecured debt, amortization of mark-to-market
adjustments and financing charges, debt retirement costs, distributions on Class B LP Units and Class C LP Units, fair value
loss (gain) on Class B LP Units and fair value loss (gain) on an interest rate swap. Finance costs associated with financial
liabilities presented at amortized cost are presented in the consolidated statements of net income and comprehensive
income using the effective interest method.
(n) Unit-based compensation
The REIT maintains an Amended and Restated Omnibus Equity Incentive Plan (the "Plan") for its Trustees and executives
pursuant to which eligible participants may receive Deferred Units, Performance Units, Restricted Units or other similar
types of security based compensation. Awards under the Plan may be settled by Units issued from treasury or, if so elected
by the participant and subject to the approval of the Plan Administrator, cash. The grant date value is recognized as part of
general and administrative expenses over the vesting period, with a corresponding increase in liabilities over the service
period related to the award. The grant date value is calculated using the market price of the Units on the grant date for
Deferred Units and using a pricing model for Performance Units. Market price is defined as the volume weighted average
closing price of the Units on the Toronto Stock Exchange ("TSX") for the five trading days immediately preceding such date.
The grant date value estimate for Performance Units requires determination of relevant inputs to the pricing model. The
liability is remeasured at each reporting date and settlement date using the closing market price of the Units as defined in
the Plan or the updated pricing model as of the date of measurement. Any changes in the value of the liability are
recognized as fair value adjustments through the consolidated statements of net income and comprehensive income.
Minto Apartment Real Estate Investment Trust
Notes to the Consolidated Financial Statements
For the years ended December 31, 2024 and 2023
(in thousands of Canadian dollars, except Unit and per Unit amounts)
|
Minto Apartment REIT
2024 Annual Report
75
(o) Government grant
The REIT receives financial assistance from the government to help fund the development and operation of affordable
rental suites. Government grants are not recognized until there is reasonable assurance that the REIT will comply with the
conditions attached to them and that the grants will be received. In accordance with IAS 20 – Accounting for Government
Grants and Disclosure of Government Assistance (“IAS 20”), grant proceeds related to development properties will be
recognized in profit or loss on a systematic basis over the periods in which the REIT recognizes revenue or incurs expenses.
(p)
Significant judgments in applying accounting policies
The following are the significant judgments that have been made in applying the REIT’s accounting policies and that have
the most significant effect on the amounts in the consolidated financial statements:
Investment property acquisitions
The REIT must assess whether an acquisition transaction should be accounted for as an asset acquisition or a business
combination under IFRS 3, Business Combinations ("IFRS 3"). This assessment requires the REIT to make judgments on
whether the assets acquired and liabilities assumed constitute a business as defined in IFRS 3 and if the integrated set of
activities, including inputs and processes acquired, are capable of being conducted and managed as a business and the
REIT obtains control of the business.
Income taxes
The REIT is a "mutual fund trust" and a "real estate investment trust" as defined in the Income Tax Act (Canada). The REIT
is not liable to pay Canadian income taxes provided that its taxable income is fully distributed to Unitholders each year.
The REIT is a "real estate investment trust" if it meets the prescribed conditions under the Income Tax Act (Canada)
relating to the nature of its assets and revenue. The REIT uses judgment in reviewing the real estate investment trust
conditions and assessing their interpretation and application to the REIT’s assets and revenue, and it has determined that it
qualifies as a "real estate investment trust" for the current period.
Interest in joint operations
The REIT assesses whether an arrangement should be accounted for as a joint operation or a joint venture under IFRS 11,
Joint Arrangements. This assessment requires the REIT to make judgments on whether the REIT's rights and obligations
arising from the arrangement constitute a joint operation or a joint venture.
Recognition of government grants
For acquired residential properties financed through forgivable loans, the REIT assesses whether throughout the remaining
term of forgivable loans the REIT is expected to meet the conditions for forgiveness, that the outflow of economic
resources is not probable and that in accordance with IAS 37 – Provision, Contingent Liabilities and Contingent Assets no
financial liability is required to be recorded. For development properties financed through forgivable loans, the REIT
assesses whether throughout the remaining term of the forgivable loans there is reasonable assurance that the REIT will
meet the conditions for forgiveness. If they do, the balance to be forgiven is recognized over time in the consolidated
statements of net income and comprehensive income.
(q) Significant accounting estimates and assumptions
The REIT makes estimates and assumptions that affect the carrying amounts of assets and liabilities and the reported
amount of income for the period. Actual results could differ from estimates. The estimates and assumptions that have the
most significant effect on the reported amounts in the consolidated financial statements include:
Residential Investment properties valuation
In applying the REIT’s policy with respect to investment properties, significant accounting estimates and assumptions are
required to determine the valuation of the residential properties under the fair value model. Significant accounting
estimates and assumptions used in the REIT's internal valuation model include the estimated 12 month stabilized
forecasted net operating income for each property and the capitalization rates that reflect the characteristics, location and
market for each property.
Minto Apartment Real Estate Investment Trust
Notes to the Consolidated Financial Statements
For the years ended December 31, 2024 and 2023
(in thousands of Canadian dollars, except Unit and per Unit amounts)
| Minto Apartment REIT
2024 Annual Report
76
(r)
Adoption of new standards, amendments and interpretations
The following amended accounting standards were adopted by the REIT when they became effective on January 1, 2024:
•
Classification of Liabilities as Current or Non-Current (Amendments to IAS 1)
•
Lease Liability in a Sale and Leaseback (Amendments to IFRS 16)
•
Disclosure of Supplier Finance Arrangement (Amendments to IFRS 7 and IAS 7)
The adoption of these amendments did not have a material impact on the REIT's consolidated financial statements.
(s) Future changes in accounting standards
IFRS 18 – Presentation and Disclosure in Financial Statements
On April 9, 2024, the IASB issued IFRS 18 – Presentation and Disclosure in Financial Statements to improve reporting of
financial performance. The standard applies to annual reporting periods beginning on or after January 1, 2027. Earlier
adoption is permitted.
The new standard replaces IAS 1 – Presentation of Financial Statements and introduces new requirements on presentation
and disclosure within the statement of profit or loss, disclosure on management-defined performance measures
("MPMs"), and aggregation and disaggregation of financial information based on the identified roles of the primary
financial statements and related notes.
The REIT intends to adopt the standard in its consolidated financial statements beginning on January 1, 2027, when the
standard becomes effective. The REIT is assessing the impact of the new standard, particularly with respect to the
structure of the REIT's statements of net income and comprehensive income and statement of cash flows, the additional
disclosures required for MPMs, and the grouping of information within the financial statements.
Other accounting standards
The following new and amended accounting standards are not expected to have a significant impact on the REIT’s
consolidated financial statements:
•
Lack of Exchangeability (Amendments to IAS 21), effective on January 1, 2025;
•
Amendments to the Classification and Measurement of Financial Instruments (Amendments to IFRS 9 and
IFRS 7), effective on January 1, 2026; and,
•
IFRS 19 – Subsidiaries without Public Accountability: Disclosures, effective on January 1, 2027.
Minto Apartment Real Estate Investment Trust
Notes to the Consolidated Financial Statements
For the years ended December 31, 2024 and 2023
(in thousands of Canadian dollars, except Unit and per Unit amounts)
|
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2024 Annual Report
77
3. Investment properties
The following table presents the change in investment properties by type:
Residential
properties
Commercial
properties
Development
properties
Total
Balance, December 31, 2022
$
2,525,455 $
27,828 $
57,811 $
2,611,094
Additions
Capital expenditures
44,017
398
—
44,415
Development expenditures
—
—
28,950
28,950
Disposition (Note 4)
(42,170)
—
—
(42,170)
Transfer to assets held for sale (Note 4)
(86,000)
—
—
(86,000)
Other
(129)
—
—
(129)
Fair value (loss) gain
(101,495)
(1,254)
1,122
(101,627)
Balance, December 31, 2023
$
2,339,678 $
26,972 $
87,883 $
2,454,533
Additions
Capital expenditures
38,103
361
—
38,464
Development expenditures
—
—
51,376
51,376
Transfer to assets held for sale (Note 4)
(69,000)
—
—
(69,000)
Other
25
105
—
130
Fair value loss
(42,877)
(2,462)
(15,940)
(61,279)
Balance, December 31, 2024
$
2,265,929 $
24,976 $
123,319 $
2,414,224
For the year ended December 31, 2024, the REIT capitalized $4,502 (December 31, 2023 - $2,905) in interest costs associated
with the REIT's general borrowings and the construction loan to the respective developments. The REIT's weighted average
borrowing rate on general borrowings was 6.66% (December 31, 2023 - 6.99%). Interest costs associated with the construction
loan were capitalized to the related development using the actual borrowing rate of 2.39%.
The fair value methodology for the REIT’s investment properties is considered level 3, as significant unobservable inputs are
required to determine fair value. The fair value of investment properties is based on internal valuations and as at December 31,
2024, the entire portfolio was internally valued. The REIT's internal valuation team consists of qualified individuals who hold
recognized relevant professional qualifications and have experience in the location and category of the respective properties.
The REIT also engaged leading independent national real estate appraisal firms with representation and expertise across
Canada, and specifically in the markets in which the REIT operates, in order to ensure that every REIT property is externally
appraised at least once every three years. These external appraisals were used by Management to assist in the validation of the
market assumptions and market data used as part of its internal valuation model. For the year ended December 31, 2024, the
REIT obtained external property appraisals representing approximately 69% (December 31, 2023 - 66%) of the fair value of the
REIT's investment properties.
The REIT continues to review market capitalization, discount and terminal capitalization rates, as well as its future cash flow
projections and their impact on the valuation of its properties in light of economic factors (Note 2). The carrying value of the
REIT's investment properties reflects Management's best estimate of fair value in terms of the assessed highest and best use as
at December 31, 2024. It is not possible to forecast with certainty the duration or full scope of the financial impact that
economic factors will have on the REIT's business and operations, both in the short and long term. Any long-term effects on
market rents, occupancy, turnover, future demand, and interest rates could impact the underlying valuation of investment
properties and such impact may be material.
Minto Apartment Real Estate Investment Trust
Notes to the Consolidated Financial Statements
For the years ended December 31, 2024 and 2023
(in thousands of Canadian dollars, except Unit and per Unit amounts)
| Minto Apartment REIT
2024 Annual Report
78
Fair value for residential properties is predominantly determined using the direct capitalization approach and includes a
deduction for estimated aggregate future capital expenditures. For the year ended December 31, 2024, the aggregate five-year
estimated future capital expenditures deducted was $76,203 (December 31, 2023 - $89,501) in determining the fair value of
residential properties.
The following table summarizes the significant unobservable inputs in determining fair value of residential properties:
Significant unobservable inputs
Inter-relationship between significant unobservable inputs and fair value measurement
Capitalization rates
There is an inverse relationship between the capitalization rates and the fair value; in other
words, the higher the capitalization rates, the lower the estimated fair value.
Estimated 12 month stabilized
forecasted net operating income
("NOI")
There is a direct relationship between the estimated 12-month stabilized forecasted NOI
and the fair value; in other words, the higher the estimated 12-month stabilized forecasted
NOI, the higher the estimated fair value.
The following table summarizes the capitalization rates used in determining the fair value of the REIT's residential properties:
December 31, 2024
December 31, 2023
Min
Max
Weighted
average
Min
Max
Weighted
average
Capitalization rate
3.75%
5.13%
4.32%
3.63%
5.13%
4.16%
The following table summarizes the sensitivity of the fair value of residential properties to changes in capitalization rates and
estimated 12 month stabilized forecasted NOI as at December 31, 2024:
December 31, 2024
-3 %
-1 %
NOI
+1 %
+3 %
Capitalization rate
-50 basis points
$
2,492,714 $
2,545,455 $
2,571,825 $
2,598,195 $
2,650,936
-25 basis points
2,335,220
2,384,713
2,409,460
2,434,206
2,483,700
Base rate
2,195,995
2,242,617
2,265,929
2,289,240
2,335,863
+25 basis points
2,072,034
2,116,101
2,138,135
2,160,168
2,204,235
+50 basis points
1,960,959
2,002,736
2,023,624
2,044,512
2,086,289
The following table summarizes the sensitivity of the fair value of residential properties to changes in capitalization rates and
estimated 12 month stabilized forecasted NOI as at December 31, 2023:
December 31, 2023
-3 %
-1 %
NOI
+1 %
+3 %
Capitalization rate
-50 basis points
$
2,590,242 $
2,645,452 $
2,673,057 $
2,700,662 $
2,755,872
-25 basis points
2,418,162
2,469,824
2,495,655
2,521,486
2,573,148
Base rate
2,266,864
2,315,407
2,339,678
2,363,949
2,412,492
+25 basis points
2,132,798
2,178,576
2,201,465
2,224,354
2,270,132
+50 basis points
2,013,177
2,056,489
2,078,145
2,099,801
2,143,113
Minto Apartment Real Estate Investment Trust
Notes to the Consolidated Financial Statements
For the years ended December 31, 2024 and 2023
(in thousands of Canadian dollars, except Unit and per Unit amounts)
|
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2024 Annual Report
79
4. Disposition of investment properties and assets held for sale
During the year ended December 31, 2024, the REIT completed the disposition of the following investment properties which
were classified as held for sale at December 31, 2023:
Date
Region
Suites
Sale price
Debt principal repaid
on disposition
Net cash proceeds1
February 15, 2024
Ottawa, ON
122
$
32,200 $
9,659 $
22,251
189
53,800
7,591
45,705
311
$
86,000 $
17,250 $
67,956
During the year ended December 31, 2023, the REIT completed the disposition of the following investment properties:
Date
Region
Suites
Sale price
Carrying value of
assigned debt
Net cash proceeds1
March 7, 2023
Edmonton, AB
64
$
9,920 $
6,770 $
2,885
December 7, 2023
Edmonton, AB
98
32,250
24,668
7,016
92
254
$
42,170 $
31,438 $
9,901
1 Net cash proceeds after transaction costs.
Assets held for sale
As at December 31, 2024, the REIT classified one residential property in Ottawa, Ontario as an asset held for sale with a fair
value of $69,000. On January 22, 2025, this property was sold as described in Note 24.
As at December 31, 2023, the REIT classified two residential properties in Ottawa, Ontario as assets held for sale with a fair
value of $86,000. On February 15, 2024, these properties were sold.
5. Joint operations
The REIT's ownership interests in the joint operations are as follows:
Property
Date of acquisition
Location
Ownership interest
Leslie York Mills
May 1, 2019
Toronto, ON
50%
Rockhill
May 7, 2019
Montreal, QC
50%
High Park Village
August 1, 2019
Toronto, ON
40%
Niagara West
April 22, 2022
Toronto, ON
28.35%
Minto Apartment Real Estate Investment Trust
Notes to the Consolidated Financial Statements
For the years ended December 31, 2024 and 2023
(in thousands of Canadian dollars, except Unit and per Unit amounts)
| Minto Apartment REIT
2024 Annual Report
80
6. Prepaid expenses and other assets
December 31, 2024
December 31, 2023
Prepaid expenses
$
1,676 $
2,598
Prepaid CMHC premiums
19,129
15,007
Restricted cash
1,739
1,492
Deposits and other prepayments
502
310
Interest rate swap
701
1,947
$
23,747 $
21,354
Current
2,178
2,610
Non-current
21,569
18,744
$
23,747 $
21,354
The following table is a summary of the REIT's interest rate swap and the respective fair value of the asset:
Instrument
Maturity
Fixed
rate
Original notional
amount
Notional
amount
Fair value as at
December 31, 2024
December 31, 2023
Interest rate swap1
April 2026
3.38%
$42,360
$34,142
$
701 $
1,947
1 The REIT has a 40% ownership interest in this contract through the ownership of a joint operation.
The following table summarizes the beginning and ending fair value of the swap:
Year ended
December 31, 2024
December 31, 2023
Opening balance
$
1,947 $
2,698
Non-cash movement
Fair value loss
(1,246)
(751)
Closing balance
$
701 $
1,947
7. Resident and other receivables
December 31, 2024
December 31, 2023
Current
Resident receivables
$
1,063 $
2,049
Other receivables
3,110
2,289
Less: Allowance for credit losses
(518)
(1,131)
$
3,655 $
3,207
There is no significant concentration of credit risk with respect to resident receivables as the REIT has a high volume of tenants
with individually small monthly rent amounts.
Minto Apartment Real Estate Investment Trust
Notes to the Consolidated Financial Statements
For the years ended December 31, 2024 and 2023
(in thousands of Canadian dollars, except Unit and per Unit amounts)
|
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2024 Annual Report
81
8. Class B LP Units
The following table reconciles the changes in cash flows and outstanding units for the Class B LP Units of the Partnership:
Class B LP Units
$
Balance, December 31, 2022
25,755,029 $
361,858
Non-cash movement
Fair value loss
—
54,858
Balance, December 31, 2023
25,755,029 $
416,716
Non-cash movement
Fair value gain
—
(73,144)
Balance, December 31, 2024
25,755,029 $
343,572
For the year ended December 31, 2024, distributions of $13,070 (December 31, 2023 - $12,683), to Class B LP Unitholders were
declared and accounted for as finance costs. Class B LP Units are exchangeable for Units at the holder’s option and are
therefore classified as current liabilities.
Holders of the Class B LP Units may elect to be loaned amounts equal to the amounts which would otherwise have been
distributed to them, and have the aggregate amount of those distributions made to them, on the maturity date of the loan,
which is on the first business day following the end of the year during which the loan was made. During the year ended
December 31, 2024, a holder of the Class B LP Units elected to receive a non-interest bearing loan equal to the distributions
they would otherwise have received of $4,819 (December 31, 2023 - $nil), see Note 12(b). On January 2, 2025, the loan was
repaid in full and a distribution equal to the loaned amount was paid to the holder.
The fair value methodology for the Class B LP Units is considered level 2 within the fair value hierarchy.
9. Class C LP Units
December 31, 2024
December 31, 2023
Class C LP Units
$
214,169 $
226,929
Unamortized mark-to-market adjustments
565
972
Unamortized deferred borrowing costs
(444)
(490)
$
214,290 $
227,411
Current
98,949
51,393
Non-current
115,341
176,018
$
214,290 $
227,411
For the year ended December 31, 2024, the REIT made distributions of $8,453 (December 31, 2023 - $7,306), to the holder of
the Class C LP Units that were accounted for as finance costs.
The mortgages of investment properties to which the distributions on the Class C LP Units relate, have a weighted average
effective interest rate of 4.20% (December 31, 2023 - 3.45%) and mature at various dates between 2025 and 2033
(December 31, 2023 - 2024 and 2033).
During the year ended December 31, 2023, the REIT issued 2,577,382 Class C LP Units to Minto Properties Inc ("MPI") in
connection with the refinancing of a mortgage of an investment property to which the Class C LP Units relate. Total gross
proceeds were $25,774 and CMHC premiums and financing costs were $1,635 for net proceeds of $24,139.
Minto Apartment Real Estate Investment Trust
Notes to the Consolidated Financial Statements
For the years ended December 31, 2024 and 2023
(in thousands of Canadian dollars, except Unit and per Unit amounts)
| Minto Apartment REIT
2024 Annual Report
82
Distributions on Class C LP Units as at December 31, 2024, excluding unamortized mark-to-market adjustments and deferred
financing costs, are due as follows:
2025
$
98,809
2026
2,000
2027
23,504
2028
1,391
2029
10,991
2030 and thereafter
77,474
$
214,169
The following table reconciles the changes in cash flows and outstanding units for the Class C LP Units:
Balance, December 31, 2022
22,978,700 $
208,086
Cash flows
Issued
2,577,382
25,774
Distributions used to repay principal
—
(5,518)
Deferred financing costs incurred
—
(354)
Deferred financing CMHC premiums
—
(154)
2,577,382
19,748
Non-cash movement
Amortization of mark-to-market adjustments
—
(441)
Deferred financing amortization
—
18
—
(423)
Balance, December 31, 2023
25,556,082 $
227,411
Cash flows
Distributions used to repay principal
—
(12,760)
—
(12,760)
Non-cash movement
Amortization of mark-to-market adjustments
—
(239)
Write-off of mark-to-market adjustments on disposition
—
(168)
Deferred financing amortization
—
46
—
(361)
Balance, December 31, 2024
25,556,082 $
214,290
Class C LP Units
$
Fair value for the Class C LP Units is calculated based on current market rates plus risk-adjusted spreads on discounted cash
flows. As at December 31, 2024, the current market rates plus risk-adjusted spreads ranged from 3.65% to 4.59%
(December 31, 2023 - 4.10% to 6.17%) and the fair value of the Class C LP Units was $215,369 (December 31, 2023 - $223,956)
and is considered level 2 within the fair value hierarchy.
Minto Apartment Real Estate Investment Trust
Notes to the Consolidated Financial Statements
For the years ended December 31, 2024 and 2023
(in thousands of Canadian dollars, except Unit and per Unit amounts)
|
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2024 Annual Report
83
10. Mortgages and loan
December 31, 2024
December 31, 2023
Mortgages - fixed rate
$
851,822 $
780,582
Construction loan - fixed rate
40,403
15,155
892,225
795,737
Unamortized mark-to-market adjustments
632
686
Unamortized deferred financing costs
(6,375)
(6,606)
$
886,482 $
789,817
Current
54,624
42,115
Non-current
831,858
747,702
$
886,482 $
789,817
Mortgages
The mortgages are secured by investment properties and mature at various dates between 2025 and 2033 (December 31, 2023
- 2024 and 2033). The fixed rate mortgages include a $34,142 (December 31, 2023 - $35,217) variable interest mortgage fixed
through an interest rate swap. The mortgages secured by investment properties have a weighted average effective interest rate
of 3.46% (December 31, 2023 - 3.37%).
Construction loan
The REIT has a fixed rate non-revolving construction loan commitment of $93,745 and as at December 31, 2024, $40,403
(December 31, 2023 - $15,155) was drawn. The construction loan is used to finance the construction of a new 225-suite
residential rental property on surplus land at the REIT's Richgrove property in Toronto, Ontario and is secured by a first priority
mortgage on the project. The loan bears fixed interest at 2.39% and matures on March 1, 2032. Payments are made monthly on
an interest-only basis.
The mortgages and construction loan, excluding unamortized mark-to-market adjustments and deferred financing costs, are
due as follows:
2025
$
55,588
2026
85,833
2027
13,063
2028
104,591
2029
189,260
2030 and thereafter
443,890
$
892,225
Minto Apartment Real Estate Investment Trust
Notes to the Consolidated Financial Statements
For the years ended December 31, 2024 and 2023
(in thousands of Canadian dollars, except Unit and per Unit amounts)
| Minto Apartment REIT
2024 Annual Report
84
The following reconciles the changes in cash flows for the mortgages and construction loan payable:
Balance, December 31, 2022
$
738,314 $
8,006 $
746,320
Cash flows
Issued
317,122
7,149
324,271
Deferred financing costs incurred
(2,579)
—
(2,579)
Deferred financing CMHC premiums
(2,332)
—
(2,332)
Principal payments on refinancing
(230,999)
—
(230,999)
Principal repayments
(14,036)
—
(14,036)
67,176
7,149
74,325
Non-cash movement
Assigned on disposition
(31,438)
—
(31,438)
Amortization of mark-to-market adjustment
(147)
—
(147)
Deferred financing amortization
757
—
757
(30,828)
—
(30,828)
Balance, December 31, 2023
$
774,662 $
15,155 $
789,817
Cash flows
Issued
95,102
25,248
120,350
Deferred financing costs incurred
(395)
—
(395)
Deferred financing CMHC premiums
(248)
—
(248)
Principal repayment on disposition
(9,659)
—
(9,659)
Principal repayments
(14,203)
—
(14,203)
70,597
25,248
95,845
Non-cash movement
Amortization of mark-to-market adjustment
(54)
—
(54)
Deferred financing amortization
874
—
874
820
—
820
Balance, December 31, 2024
$
846,079 $
40,403 $
886,482
Fixed and variable-rate
mortgages
Construction loan
Total
The REIT is subject to financial covenants in connection with its fixed rate mortgages and the construction loan which require
the REIT to maintain certain liquidity and leverage ratios. As at December 31, 2024 and December 31, 2023, the REIT was in
compliance with these financial covenants relating to its fixed rate mortgages and construction loan.
Fair value of fixed rate mortgages and the construction loan is calculated based on current market rates plus risk-adjusted
spreads on discounted cash flows. As at December 31, 2024, the current market rates plus risk-adjusted spreads ranged from
3.63% to 4.98% (December 31, 2023 - 3.99% to 6.00%) and the fair value of fixed rate mortgages and construction loan was
$871,644 (December 31, 2023 - $761,780) and is considered level 2 within the fair value hierarchy.
Minto Apartment Real Estate Investment Trust
Notes to the Consolidated Financial Statements
For the years ended December 31, 2024 and 2023
(in thousands of Canadian dollars, except Unit and per Unit amounts)
|
Minto Apartment REIT
2024 Annual Report
85
11. Credit facility
December 31, 2024
December 31, 2023
Committed
$
300,000 $
300,000
Available
208,344
236,034
Utilized
Amounts drawn
24,500
140,236
Letter of credit
2,022
2,022
26,522
142,258
Undrawn amount available
$
181,822 $
93,776
The REIT has a revolving credit facility that is secured by several investment properties, matures on July 3, 2025 and is used to
fund working capital requirements, acquisitions, letters of credit and for general corporate purposes. On June 26, 2024, in
connection with the benchmark interest rate reform in Canada to replace Canadian Dollar Overnight Rate with Canadian
Overnight Repo Rate Average ("CORRA"), the REIT amended the terms of the revolving credit facility to replace the one-month
bankers' acceptance plus 175 bps with the economically equivalent Adjusted Canadian Overnight Repo Rate Average ("Adjusted
CORRA") plus 175 bps. The credit facility bears interest at the one-month Adjusted CORRA plus 175 bps (December 31, 2023 -
one-month bankers' acceptance plus 175 bps) or prime plus 75 bps. As at December 31, 2024, the weighted average variable
interest rate was 5.42% (December 31, 2023 - 7.25%). Given the variable nature of the credit facility, its carrying value
approximates its fair value.
The following table reconciles the changes in cash flows for the credit facility:
Year ended
December 31, 2024
December 31, 2023
Opening balance
$
140,236 $
157,158
Cash flows
Issued
66,264
85,078
Repayments
(182,000)
(102,000)
(115,736)
(16,922)
Closing balance
$
24,500 $
140,236
The revolving credit facility has financial covenants which require the REIT to maintain certain liquidity and leverage ratios. As at
December 31, 2024 and December 31, 2023, the REIT was in compliance with these financial covenants relating to its credit
facility.
12. Related-party transactions
In the normal course of operations, the REIT enters into various transactions with related parties which are recorded at
exchange value. In addition to the related party transactions disclosed elsewhere in these consolidated financial statements,
related party transactions include:
(a) Administrative Support Agreement
The Administrative Support Agreement ("ASA") between the REIT and MPI, an entity with significant influence over the REIT,
matures on July 3, 2028 and, for a fee, provides the REIT with certain advisory, transaction and support services, including
clerical and administrative support, operational support for the administration of day-to-day activities of the REIT and office
space.
For the year ended December 31, 2024, the REIT incurred $2,260 (December 31, 2023 - $2,260) for services rendered by MPI
and its affiliates under the ASA.
Minto Apartment Real Estate Investment Trust
Notes to the Consolidated Financial Statements
For the years ended December 31, 2024 and 2023
(in thousands of Canadian dollars, except Unit and per Unit amounts)
| Minto Apartment REIT
2024 Annual Report
86
(b) Loans receivable from related parties
Project
Related Parties
Commitment
Interest Rate and
Maturity
December 31, 2024
December 31, 2023
99 Fifth Avenue,
Ottawa, ON
("Fifth and Bank")
Affiliate of MPI
$
30,000 Variable per annum1
January 31, 2024
$
— $
30,000
Lonsdale Avenue,
North Vancouver, BC
("Lonsdale Square")
Limited partnership
jointly owned by MPI
and a subsidiary of
Darwin Properties
14,000
7% per annum
February 28, 2025
14,000
14,084
Beechwood Avenue,
Ottawa, ON ("88
Beechwood")
Affiliate of MPI
51,400
6% per annum
December 31, 2025
46,219
43,534
810 Kingsway,
Vancouver, BC
("The Hyland")
MPI
19,650 Variable per annum2
April 30, 2025
19,073
17,948
3958 Shelbourne
Street, Victoria, BC
("University Heights")
MPI
51,700
7% per annum
December 31, 2026
44,179
27,041
166,750
123,471
132,607
Loan receivable
Management
700 Variable per annum3
April 27, 2032
621
679
Loan receivable
(Note 8)
Limited partnership
wholly-owned by
MPI
— Non-interest bearing
January 2, 2025
4,819
—
$
167,450
$
128,911 $
133,286
Current
84,215
62,032
Non-current
44,696
71,254
$
128,911 $
133,286
1 Effective July 1, 2023, the interest rate is equal to the all-in interest rate the REIT pays on the credit facility on a monthly basis, subject to a
maximum interest rate of 7% per annum and minimum interest rate of 5% per annum. Prior to the effective date of this amendment, the
interest rate on the loan was 6% per annum.
2 Effective June 1, 2024, the interest rate is equal to the all-in interest rate the REIT pays on the credit facility on a monthly basis, subject to a
maximum interest rate of 7.25% per annum and minimum interest rate of 5.25% per annum. Prior to the effective date of this amendment, the
interest rate on the loan was 6% per annum.
3 The interest rate per annum is set quarterly at the greater of prime and the prescribed interest rate as determined by the Regulations of the
Income Tax Act (Canada) to a maximum of 5%. Interest is payable annually in arrears.
All commitments pertaining to projects include a reserve to fund interest costs. If the interest reserve is fully utilized, the
interest is paid to the REIT on a monthly basis. In connection with these financings, the REIT has the exclusive option to
purchase the property at 88 Beechwood, MPI's 85% indirect ownership interest in The Hyland and MPI's 45% indirect ownership
interest in University Heights, upon project stabilization at 95% of then-appraised fair market value as determined by
independent and qualified third-party appraisers. The exclusive purchase option for Lonsdale Square expired on November 30,
2024. However, on January 15, 2025, a limited partnership in which the REIT owns a 50% ownership interest acquired Lonsdale
Square and the convertible development loan associated with the property was fully repaid concurrently on the closing of the
purchase as described in Note 24. As at December 31, 2024, the ECL based on 12 month expected losses for the loans
receivable is $nil (December 31, 2023 - $nil).
On January 31, 2024, the REIT received repayment of the balance owing for the loan associated with the Fifth and Bank project.
Minto Apartment Real Estate Investment Trust
Notes to the Consolidated Financial Statements
For the years ended December 31, 2024 and 2023
(in thousands of Canadian dollars, except Unit and per Unit amounts)
|
Minto Apartment REIT
2024 Annual Report
87
On May 7, 2024, the REIT and MPI amended the maturity date of the loan agreement associated with the Hyland and the REIT's
purchase option for an indirect interest in the property. The REIT's purchase option was extended to February 28, 2025, and the
maturity date was extended to April 30, 2025. In addition, the 6% annual interest rate was amended and effective June 1, 2024,
equals the all-in interest rate the REIT pays on the credit facility on a monthly basis, subject to a maximum interest rate of
7.25% per annum and minimum interest rate of 5.25% per annum.
On December 16, 2024, the REIT agreed to amend the loan agreement associated with Lonsdale Square to extend the maturity
date of the loan to February 28, 2025. On January 15, 2025, the REIT received repayment of the balance owing for the loan
associated with the Lonsdale Square project.
During the year ended December 31, 2024, a holder of the Class B LP Units elected to receive a loan equal to the distributions
they would otherwise have received. On January 2, 2025, the non-interest bearing loan matured, was repaid in full, and a
distribution equal to the loan balance was paid to the holder.
The following table shows the movement of loans receivable from related parties:
Year ended
December 31, 2024
December 31, 2023
Opening balance
$
133,286 $
98,302
Cash flows
Advances
19,170
30,586
Repayments
(30,056)
(45)
Interest received
(1,185)
(2,656)
(12,071)
27,885
Non-cash movement
Interest earned
7,696
7,099
(4,375)
34,984
Closing balance
$
128,911 $
133,286
Fair value of loans receivable relating to projects is calculated based on current market rates plus risk-adjusted spreads on
discounted cash flows. As at December 31, 2024, the current market rates plus risk-adjusted spreads ranged from 7.25% to
8.25% (December 31, 2023 - 9.00% to 10.00%) and the fair value of the loans receivable relating to projects was $122,453
(December 31, 2023 - $127,921) and is considered level 2 within the fair value hierarchy.
(c) Due to related parties
Item
Related Parties
December 31, 2024
December 31, 2023
Current
Class B LP Units distributions
MPI affiliates
$
5,935 $
1,084
Class C LP Units distributions
Limited partnership wholly-
owned by MPI
803
676
Property operating costs payable
MPI and its affiliates
157
144
Development costs and fees
Affiliate of MPI
933
1,722
Unit distribution
MPI
39
38
7,867
3,664
Rental and service revenue receivable
MPI and its affiliates
(122)
(462)
$
7,745 $
3,202
Minto Apartment Real Estate Investment Trust
Notes to the Consolidated Financial Statements
For the years ended December 31, 2024 and 2023
(in thousands of Canadian dollars, except Unit and per Unit amounts)
| Minto Apartment REIT
2024 Annual Report
88
(d) Revenue, expenses, capital expenditures and distributions
December 31, 2024
December 31, 2023
Revenue from MPI, its affiliates and jointly-owned limited partnerships
Rental and service revenue
$
480 $
509
Interest income on loans advanced
7,696
7,099
Expenses and distributions to MPI, its affiliates, its wholly-owned and jointly-owned limited partnerships
Property operating expenses
1,244
1,067
Development costs and fees
4,246
4,162
Distributions on Class B LP Units (finance costs)
13,070
12,683
Distributions on Class C LP Units (finance costs)
8,453
7,306
Distributions on Class C LP Units (principal)
12,760
5,518
Distributions on Units
454
442
Compensation of key management personnel
Paid to executives
1,753
1,642
Unit-based compensation
Executives
1,357
1,461
Trustees in lieu of annual retainer and meeting fees
665
630
Additional compensation to key management personnel for services provided to the REIT was paid by MPI and its affiliate.
(e) Class C LP Units
During the year ended December 31, 2023, the REIT issued 2,577,382 Class C LP Units (Note 9) to MPI in connection with the
refinancing of a mortgage of an investment property to which the Class C LP Units relate.
13. Accounts payable and accrued liabilities
December 31, 2024
December 31, 2023
Accounts payable
$
11,600 $
8,606
Accrued liabilities
16,205
13,072
Distributions payable
1,676
1,641
Unit-based compensation
6,969
7,061
Forgivable loan
5,659
5,659
$
42,109 $
36,039
Current
35,521
29,306
Non-current
6,588
6,733
$
42,109 $
36,039
During the year ended December 31, 2020, in connection with the Richgrove development, the REIT completed a contribution
agreement with the City of Toronto whereby the City will contribute funds towards the construction of 100 affordable rental
suites as part of the new property and will also provide relief from development charges and certain other fees. Funding and
relief from development charges and certain other fees will be in the form of a forgivable loan, with loan forgiveness
commencing on the first anniversary of first occupancy of the affordable rental suites, at 4% per year over a period of 25 years.
For the year ended December 31, 2024, City benefits of $nil (December 31, 2023 - $515) were received in connection with the
Richgrove development and have been recorded as a forgivable loan payable in connection with the terms of the contribution
agreement.
Minto Apartment Real Estate Investment Trust
Notes to the Consolidated Financial Statements
For the years ended December 31, 2024 and 2023
(in thousands of Canadian dollars, except Unit and per Unit amounts)
|
Minto Apartment REIT
2024 Annual Report
89
14. Units
Units
$
Authorized
Unlimited
Units issued and outstanding:
Balance, December 31, 2022
39,887,612 $
710,873
Units issued for vested Deferred Units, net of issue costs
11,000
148
Balance, December 31, 2023
39,898,612
711,021
Units issued for vested Deferred Units, net of issue costs
18,049
260
Cancellation of Units under normal course issuer bid
(337,842)
(6,020)
Units issued in special non-cash distribution, net of issue costs
2,255,508
30,050
Consolidation of units issued pursuant to special non-cash distribution
(2,255,508)
—
Balance, December 31, 2024
39,578,819 $
735,311
For the year ended December 31, 2024, distributions to Unitholders of $20,233 (December 31, 2023 - $19,645), were declared,
representing monthly distributions of $0.04208 (2023 - $0.04083) per Unit for the months of January to October and $0.04333
(2023 - $0.04208) per Unit for the months of November and December.
Normal Course Issuer Bid
On September 25, 2024, the TSX accepted the REIT's notice to initiate a Normal Course Issuer Bid ("NCIB") for a portion of its
Units. The NCIB is authorized from September 27, 2024 through to September 26, 2025 and permits the REIT to acquire up to
3,283,584 Units, including up to 22,703 Units on any given trading day. The REIT's previous NCIB expired on September 19,
2024. For the year ended December 31, 2024, the REIT purchased and cancelled 337,842 Units under the NCIB, at a weighted
average purchase price of $14.03 per Unit, for a total cost including transaction costs of $4,869. The difference between the
purchase price and the weighted average historical unit issuance price was recorded as an increase to retained earnings.
On December 30, 2024, the REIT established an automatic securities purchase plan in connection with its previously announced
NCIB applicable to its outstanding Units. Refer to note 24 for Units purchased and cancelled subsequent to December 31, 2024.
Special non-cash distribution in Units and consolidation of Units
On December 16, 2024, the REIT declared a special non-cash distribution of $0.76 per Unit, payable in Units on December 31,
2024 ("Special Distribution"). The Special Distribution was made to distribute a portion of the capital gains realized by the REIT
from the sale of investment properties completed during the year ended December 31, 2024.
On December 31, 2024, the REIT issued 2,255,508 Units at a price of $13.3362 per Unit, for a total value of $30,080.
Immediately following the issuance, the Units were consolidated such that each Unitholder held the same number of Units as
each Unitholder held prior to the Special Distribution.
15. Segment reporting
The REIT owns, manages and operates 28 (December 31, 2023 - 29) multi-residential rental properties located in Canada,
including four mixed-use residential apartment and commercial buildings. Management, when measuring the REIT's
performance, does not distinguish or group its operations on a geographical or any other basis. Accordingly, the REIT has a
single reportable segment for disclosure purposes in accordance with IFRS Accounting Standards.
Minto Apartment Real Estate Investment Trust
Notes to the Consolidated Financial Statements
For the years ended December 31, 2024 and 2023
(in thousands of Canadian dollars, except Unit and per Unit amounts)
| Minto Apartment REIT
2024 Annual Report
90
16. Revenue from investment properties
December 31, 2024
December 31, 2023
Rental revenue
$
129,662 $
129,683
Revenue from services
27,426
28,242
$
157,088 $
157,925
17. Finance costs
December 31, 2024
December 31, 2023
Interest expense on mortgages and loan
$
25,613 $
26,728
Interest expense and standby fees on credit facility
6,577
10,445
Financing amortization and other charges
1,268
1,221
Amortization of mark-to-market adjustments
(293)
(588)
Capitalized interest
(4,502)
(2,905)
Debt retirement costs
—
1,779
Interest expense and other financing charges
28,663
36,680
Distributions on Class B LP Units (Note 8)
13,070
12,683
Distributions on Class C LP Units (Note 9)
8,453
7,306
Finance costs - operations
$
50,186 $
56,669
Fair value loss (gain) on:
Class B LP Units (Note 8)
(73,144)
54,858
Interest rate swap (Note 6)
1,246
751
Finance costs
$
(21,712) $
112,278
18. Contingencies and commitments
The REIT is subject to claims and legal actions that arise in the ordinary course of business. It is the opinion of Management that
any ultimate liability that may arise from such matters would not have a significant adverse effect on the consolidated financial
statements of the REIT.
The REIT has an off-balance sheet arrangement at one of its properties in the Toronto area which was acquired in 2018
pursuant to which the City of Toronto provided a forgivable loan to support affordable housing at this property. Provided that
certain conditions are met, the REIT will not need to make repayments under this arrangement. As of December 31, 2024, the
remaining unforgiven balance of the loan is $11,016 (December 31, 2023 - $12,240). To date, the REIT has met all conditions
related to this forgivable loan and Management has assessed that throughout the remaining term of the loan the REIT is likely
to continue to meet the conditions for forgiveness and that the outflow of economic resources to settle the loan is not
probable. As such, no liability has been recorded by the REIT.
The REIT has an off-balance sheet arrangement at one of its properties in the Calgary area which was acquired in 2018 pursuant
to which the Province of Alberta provided a forgivable loan to support affordable housing at this property. Provided that certain
conditions are met, the REIT will not need to make repayments under the arrangement. As of December 31, 2024, the
remaining unforgiven balance of the loan is $2,688 (December 31, 2023 - $3,024). To date, the REIT has met all conditions
related to this forgivable loan and Management has assessed that throughout the remaining term of the loan the REIT is likely
to continue to meet the conditions for forgiveness and that the outflow of economic resources to settle the loan is not
probable. As such, no liability has been recorded by the REIT.
Minto Apartment Real Estate Investment Trust
Notes to the Consolidated Financial Statements
For the years ended December 31, 2024 and 2023
(in thousands of Canadian dollars, except Unit and per Unit amounts)
|
Minto Apartment REIT
2024 Annual Report
91
As at December 31, 2024, the REIT has committed to advance to related parties an additional $3,994 in order to support two
development projects (December 31, 2023 - $19,501 to support three development projects) and an additional $9,285
(December 31, 2023 - $14,642) to fund interest costs to support three development projects.
The REIT is a guarantor on a joint and several basis for mortgage debt held through one of its joint operations. As at
December 31, 2024, the maximum potential obligation resulting from this guarantee is $11,950 (December 31, 2023 - $12,326).
19. Risk management
The REIT's activities expose it to a variety of financial risks, including market risk, credit risk and liquidity risk.
Market Risk
Market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in
market prices. Market risk consists of interest rate risk, currency risk and other price risk.
(a)
Interest rate risk
As the REIT’s interest-bearing assets mainly comprise fixed rate instruments, changes in market interest rates do not have
any significant direct effect on the REIT’s income.
The REIT's financial liabilities comprise both fixed rate and variable-rate instruments.
The REIT faces interest rate risk on its fixed rate debt due to the expected requirement to refinance such debt in the year
of maturity or shortly thereafter. The REIT manages interest rate risk by structuring its financings to stagger the maturities
of its debt, thereby mitigating its exposure to interest rate and other credit market fluctuations.
For the portion of the REIT’s financial liabilities that comprise variable-rate instruments, from time to time the REIT may
enter into interest rate swap contracts or other financial instruments to modify the interest rate profile of its outstanding
debt without an exchange of the underlying principal amount.
As at December 31, 2024, the REIT has a committed variable-rate credit facility of $300,000 (December 31, 2023 -
$300,000) with an availability of $208,344 (December 31, 2023 - $236,034) and amounts drawn of $24,500 (December 31,
2023 - $140,236). A 1% change in prevailing interest rates would change annualized interest charges incurred by $245
(December 31, 2023 - $1,402).
(b)
Currency risk
The REIT’s financial statement presentation currency is Canadian dollars. Operations are located in Canada and the REIT
has limited operational transactions in foreign-denominated currencies. As such, the REIT has no significant exposure to
currency risk.
(c)
Other price risk
Other price risk is the risk of variability in fair value due to movements in equity prices or other market prices such as
commodity prices and credit spreads.
The REIT is exposed to other price risk on its Class B LP Units. A 1% change in the prevailing market price of the Units as at
December 31, 2024 would have a $3,436 (December 31, 2023 - $4,167) change in the fair value of the Class B LP Units.
Credit Risk
Credit risk is the risk that tenants and/or debtors may experience financial difficulty and be unable to fulfill their lease
commitments or loan repayments. An allowance is recorded for the ECL.
The REIT’s risk of credit loss from tenants experiencing financial difficulties is mitigated through diversification. The REIT’s
residential rental business is carried on in the Toronto, Montreal, Ottawa and Calgary regions. The nature of this business
involves a high volume of tenants with individually small monthly rent amounts. The REIT monitors the collection of residential
rent receivables on a regular basis with strictly followed procedures designed to minimize credit loss in cases of non-payment.
Minto Apartment Real Estate Investment Trust
Notes to the Consolidated Financial Statements
For the years ended December 31, 2024 and 2023
(in thousands of Canadian dollars, except Unit and per Unit amounts)
| Minto Apartment REIT
2024 Annual Report
92
The REIT is also exposed to the concentration of credit risk in relation to the loans advanced, in the event that the borrowers
default on the contractual terms of repayment of amounts owing to the REIT. The REIT provides financing to MPI and affiliates
of MPI for strategic developments and, in turn, receives an option to acquire an ownership interest in those developments.
Management mitigates this risk by ensuring there is sufficient security provided by the development assets in addition to
guarantees provided by MPI for loans advanced to affiliates of MPI.
Liquidity risk
Liquidity risk is the risk that the REIT will encounter difficulty in meeting obligations associated with financial liabilities that are
settled by delivering cash or another financial asset. The REIT’s liquidity is subject to macroeconomic, financial, competitive and
other factors that are beyond the REIT’s control.
Liquidity risk is managed through cash flow forecasting. Management monitors forecasts of the REIT’s liquidity requirements to
ensure it has sufficient cash to meet operational needs through maintaining sufficient cash and/or availability on the undrawn
credit facility and ensuring that it meets its financial covenants related to debt agreements. Such forecasting takes into
consideration the current and projected macroeconomic conditions, the REIT's cash collection efforts, debt financing plans and
covenant compliance required under the terms of debt agreements. There is a risk that such liquidity forecasts may not be
achieved and that currently available debt financing may no longer be available to the REIT at terms and conditions that are
favourable to the REIT, or at all.
The REIT mitigates liquidity risk by staggering the maturity dates of its borrowing, maintaining borrowing relationships with
various lenders, proactively renegotiating expiring credit agreements well in advance of the maturity date and by maintaining
sufficient availability on its credit facility.
As of December 31, 2024, current liabilities, excluding Class B LP Units which are exchangeable for Units, of $232,299
(December 31, 2023 - $137,334) exceeded current assets of $95,926 (December 31, 2023 - $71,589), resulting in a net working
capital deficit of $136,373 (December 31, 2023 - $65,745). Current liabilities as of December 31, 2024 include $125,990
(December 31, 2023 - $75,301) of debt financing which the REIT is actively in the process of refinancing. The REIT's immediate
liquidity needs are met through cash on hand, cash flow from operations, refinancing of maturing mortgages and availability on
its credit facility. As of December 31, 2024, liquidity was $187,700 (December 31, 2023 - $97,516) consisting of cash of $5,878
(December 31, 2023 - $3,740) and $181,822 (December 31, 2023 - $93,776) of available borrowing capacity under the credit
facility. Management believes that there is sufficient liquidity to meet the REIT’s financial obligations.
An analysis of the contractual cash flows associated with the REIT's financial liabilities is set out below:
2025
2026
2027
2028
2029
2030 and
thereafter
Total
Mortgages
$
55,588 $
85,833 $
13,063 $
104,591 $
189,260 $
403,487 $
851,822
Construction loan
—
—
—
—
—
40,403
40,403
Credit facility
24,500
—
—
—
—
—
24,500
Class C LP Units
98,809
2,000
23,504
1,391
10,991
77,474
214,169
Interest obligation1
35,173
30,678
29,378
26,017
22,610
46,308
190,164
Tenant rental deposits
10,960
—
10
—
—
—
10,970
Due to related parties
7,745
—
—
—
—
—
7,745
Accounts payable and
accrued liabilities
35,521
712
193
24
—
5,659
42,109
$
268,296 $
119,223 $
66,148 $
132,023 $
222,861 $
573,331 $ 1,381,882
1 Interest obligation on mortgages, construction loan, credit facility and Class C LP Units.
The contractual cash flows do not include any unamortized mark-to-market adjustments or unamortized deferred financing
costs.
Minto Apartment Real Estate Investment Trust
Notes to the Consolidated Financial Statements
For the years ended December 31, 2024 and 2023
(in thousands of Canadian dollars, except Unit and per Unit amounts)
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20. Capital risk management
The REIT's capital consists of Class B LP Units, Class C LP Units, mortgages, a construction loan, a credit facility and Unitholders'
equity. The REIT invests its capital to achieve its business objectives and to generate an acceptable long-term return to the
REIT’s Unitholders. Primary uses of capital include property acquisitions, development activities, capital improvements, debt
principal repayments and convertible development loans.
The REIT’s principal objective with respect to debt financing is to minimize its overall borrowing costs while maintaining balance
in its maturity schedule, diversity in its lender base and having sufficient liquidity and flexibility to meet current obligations and
to pursue new projects.
The actual level and type of future financings to fund the REIT’s capital obligations will be determined based on prevailing
interest rates, various costs of debt and/or equity capital, capital market conditions and Management’s general view of the
appropriate leverage in the business.
The REIT closely monitors its capital position. The REIT is also subject to certain financial covenants and is in compliance with
these covenants. Management has performed stress testing on the REIT’s covenants to ensure that the REIT continues to meet
its covenant obligations in the long term.
The components of the REIT's capital are set out in the table below:
December 31, 2024
December 31, 2023
Liabilities (principal amounts outstanding):
Class B LP Units
$
343,572 $
416,716
Class C LP Units
214,169
226,929
Mortgages
851,822
780,582
Construction loan
40,403
15,155
Credit facility
24,500
140,236
1,474,466
1,579,618
Unitholders' equity
1,115,747
1,077,381
$
2,590,213 $
2,656,999
21. Supplemental cash flow disclosures
Change in non-cash working capital comprises the following:
December 31, 2024
December 31, 2023
Prepaid expenses and other assets
$
(97) $
430
Resident and other receivables
(167)
80
Tenant rental deposits
161
844
Due to related parties
(598)
56
Accounts payable and accrued liabilities
2,650
(307)
$
1,949 $
1,103
Minto Apartment Real Estate Investment Trust
Notes to the Consolidated Financial Statements
For the years ended December 31, 2024 and 2023
(in thousands of Canadian dollars, except Unit and per Unit amounts)
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2024 Annual Report
94
22. Unit-based compensation
Executives
Deferred Units
Deferred Units granted to executives generally vest on the second, third or fourth anniversaries of the grant date and are
settled (i) by Units issued from treasury equivalent to the number of Deferred Units credited, including any distributions paid by
the REIT on the Units that have accrued in the form of Deferred Units, or (ii) if so elected by the participant and subject to the
approval of the Plan Administrator, in cash, in each case following the participant’s separation from service with the REIT. The
Board of Trustees has the discretion to vary the manner in which the Deferred Units vest for any participant.
The details of movement in Deferred Units for the executives are as follows:
December 31, 2024
December 31, 2023
Opening balance
308,997
271,176
Granted
35,497
28,000
Distribution equivalents
11,113
9,821
Closing balance
355,607
308,997
The Deferred Unit plan activity and the value of Unit-based compensation expense for the executives are as follows:
December 31, 2024
December 31, 2023
Opening balance
$
4,179 $
2,720
Unit-based compensation expense
1,021
1,305
Fair value (gain) loss
(1,030)
154
Closing balance
$
4,170 $
4,179
Performance Units
Performance Units granted to executives generally vest on the third anniversary of the grant date based on the achievement of
performance goals. Performance Units are settled by Units issued from treasury equivalent to the number of Performance Units
credited, including any distributions paid by the REIT on the Units that have accrued in the form of Performance Units or, if so
elected by the participant and subject to the approval of the Plan Administrator, cash. The Board of Trustees has the discretion
to vary the manner in which the Performance Units vest for any participant.
Minto Apartment Real Estate Investment Trust
Notes to the Consolidated Financial Statements
For the years ended December 31, 2024 and 2023
(in thousands of Canadian dollars, except Unit and per Unit amounts)
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95
The details of movement in Performance Units for the executives are as follows:
December 31, 2024
December 31, 2023
Opening balance
60,585
31,750
Granted
48,485
27,855
Distribution equivalents
2,102
980
Closing balance
111,172
60,585
The Performance Unit plan activity and the value of Unit-based compensation expense for the executives are as follows:
December 31, 2024
December 31, 2023
Opening balance
$
273 $
—
Unit-based compensation expense
336
156
Fair value (gain) loss
(127)
117
Closing balance
$
482 $
273
Trustees
Trustees have the option to elect to receive up to 100% of all fees that are otherwise payable in cash (i.e. annual board retainer
fee, meeting fees and additional retainers) in the form of Deferred Units. The REIT matches 45% of the total value of annual
board retainer fees and board and committee meeting fees that a trustee elected to receive in the form of Deferred Units.
Deferred Units granted in respect of a participant’s election to receive Deferred Units in lieu of cash compensation vest
immediately upon grant. Deferred Units granted further to any match by the REIT also vest immediately. The Board of Trustees
has the discretion to vary the manner in which the Deferred Units vest for any participant. The Deferred Units are settled (i) by
Units issued from treasury equivalent to the number of Deferred Units credited, including any distributions paid by the REIT on
the Units that have accrued in the form of Deferred Units, or (ii) if so elected by the participant and subject to the approval of
the Plan Administrator, in cash, in each case following the participant’s separation from service with the REIT.
The Deferred Units granted and the value of Unit-based compensation expense recorded for the Trustees are as follows:
Deferred Units
$
Balance, December 31, 2022
129,495 $
1,819
Granted and vested
38,062
561
Distribution equivalents
4,660
69
Redeemed
(11,000)
(165)
Fair value loss
—
325
Balance, December 31, 2023
161,217 $
2,609
Granted and vested
40,642
588
Distribution equivalents
4,998
77
Redeemed
(33,145)
(529)
Fair value gain
—
(428)
Balance, December 31, 2024
173,712 $
2,317
Minto Apartment Real Estate Investment Trust
Notes to the Consolidated Financial Statements
For the years ended December 31, 2024 and 2023
(in thousands of Canadian dollars, except Unit and per Unit amounts)
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2024 Annual Report
96
23. Operating leases
The REIT has entered into lease agreements on its investment properties. The residential leases typically have lease terms of 1
to 12 months. The commercial leases have lease terms between 10 to 15 years. There were no tenants that accounted for more
than 10% of the REIT's total rental revenue for the year ended December 31, 2024 and 2023. The total future contractual
minimum rent lease payments at the REIT's share expected to be received under residential and commercial leases are as
follows:
December 31, 2024
December 31, 2023
Less than 1 year
$
19,433 $
22,969
Between 1 to 5 years
2,992
2,197
5 years and thereafter
3,747
2,613
$
26,172 $
27,779
24. Subsequent events
On January 15, 2025, a joint venture in which the REIT has a 50% ownership interest purchased Lonsdale Square, a 113-suite
mixed-use property in North Vancouver, British Columbia from a limited partnership which is jointly owned by MPI. The REIT's
purchase price of $52,963 was satisfied by the assumption of a $52,904 mortgage. The REIT also received payment for the
outstanding loan receivable of $14,000 associated with Lonsdale Square.
On January 22, 2025, the REIT completed the disposition of one property in Ottawa, Ontario for a sale price of $69,000. The
REIT used $34,547 of the sale proceeds to redeem for cancellation 4,130,092 Class C LP Units from the holder of the Class C LP
Units to repay the mortgage associated with the property to which the Class C LP Units relate. The net proceeds after the
redemption and transaction costs were $33,849.
On March 4, 2025, the REIT amended the terms of its credit facility to reduce the commitment from $300,000 to $200,000.
Subsequent to December 31, 2024, the REIT purchased and cancelled 777,276 Units under the NCIB, at a weighted average
purchase price of $13.19 per Unit, for a total cost including transaction costs of $10,469.
Minto Apartment Real Estate Investment Trust
Notes to the Consolidated Financial Statements
For the years ended December 31, 2024 and 2023
(in thousands of Canadian dollars, except Unit and per Unit amounts)
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| Minto Apartment REIT
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Head Office
Minto Apartment REIT
200 - 180 Kent Street
Ottawa, Ontario K1P 0B6
T: 613-230-7051
Investor Information
www.mintoapartmentreit.com
info@mintoapartmentreit.com
T: 613-230-7051
Unitholder Information
Roger Greenberg
Chair of Minto Apartment REIT, Executive Chair
of Ottawa Sports and Entertainment Group, and
of The Minto Group
Allan Kimberley(1,2,3)
Lead Trustee, Director of Orlando Corporation
and Carfin Inc., former Vice Chairman of
Investment Banking, Real Estate at CIBC World
Markets
Heather Kirk(1,3)
Chair of the Audit Committee, President of Key
Living
Jo-Ann Lempert(1,2,3)
Chartered Professional Accountant and Partner,
MNP SENCRL, srl
Jonathan Li
President and Chief Executive Officer of Minto
Apartment REIT, Trustee and Member of the
Audit Committee of Flagship Communities REIT
Jacqueline Moss(2,3)
Chair of the Compensation, Governance and
Nominating Committee, Trustee and Member of
the Governance, Nominating & Compensation
Committee of Artis REIT
Michael Waters
Chief Executive Officer of The Minto Group,
Trustee and Member of Governance &
Nominating, Audit and Investment Committees of
Crombie REIT
(1) Member of the Audit Committee
(2) Member of the Compensation, Governance and Nominating Committee
(3) Independent
Jonathan Li
President and Chief Executive Officer
Edward Fu
Chief Financial Officer
Glen MacMullin
Chief Investment Officer
Jo-Ann Taylor
Chief Corporate Services Officer
of The Minto Group
Marie‑Hélène Labbé
General Counsel and Corporate Secretary
Paul Baron
Senior Vice President, Property Operations
Ben Mullen
Senior Vice President, Asset Management
Martin Tovey
Senior Vice President, Investments
Mohammad Amini
Vice President, Asset Management
Anca Preda
Vice President, Information
Technology of The Minto Group
Auditor
KPMG LLP
Legal Counsel
Goodmans LLP
Transfer Agent
TSX Trust Company
301 – 100 Adelaide Street West
Toronto ON M5H 4H1
Unit Distributions
January 2024 – October 2024
$0.04208 per Unit per month
November 2024 – December 2024
$0.04333 per Unit per month
Annual Meeting
The Annual General Meeting of
Unitholders will be held virtually
on May 6, 2025 at 1:00pm.
Board of Trustees
Management
|
Minto Apartment REIT
2024 Annual Report
99
Suite counts are presented at 100% ownership share rather than the REIT's proportionate share. The REIT jointly owns 1,660 suites in Toronto, 1,004 suites in
Montréal, and 113 suites in Greater Vancouver with institutional partners.
Expansion into Greater Vancouver Area
On January 15, 2025, the REIT purchased a 50% managing
ownership interest in the newly constructed Lonsdale
Square property in the highly attractive Metro Vancouver
area at a discount to market value from a partnership jointly
owned by MPI.
Lonsdale Square
Suites: 113
Commercial: 8,158 sq ft
Purchase Price: $53 million (REIT Share)
Ownership Share: 50%
Geographic Diversification
Across Key Urban Centres
28
Properties
Suites
7,598
CALGARY
4 properties | 665 suites
GREATER VANCOUVER AREA
1 property | 113 suites
MONTRÉAL
4 properties
1,793 suites
OTTAWA
12 properties | 2,543 suites
TORONTO
7 properties | 2,484 suites
417 suites in development
as at March 5, 2025
1.613.230.7051
info@mintoapartmentreit.com
Minto Apartment REIT
200-180 Kent Street
Ottawa, ON K1P 0B6
www.mintoapartmentreit.com
View from rooftop amenity space at Lonsdale Square • North Vancouver