Canadian Apartment Properties Real Estate Investment Trust (CAR-UN) Q4 2024 earnings summary

Executive summary

• Completed CAD 2.6 billion (USD 2.5 billion) in non-core and ancillary divestments, including major sales in Canada and Europe, and reinvested proceeds into debt reduction, new acquisitions, and trust unit buybacks.

• Repurchased and cancelled CAD 327 million in trust units via NCIB, enhancing NAV per unit, and sold CAD 138 million in IRES equity.

• Portfolio repositioned toward higher-quality, recently constructed Canadian rental assets, with 79% core, 15% legacy, and 6% ancillary as of year-end.

• Supported affordable housing by transferring CAD 124 million in assets to nonprofits and selling a 717-suite portfolio to Montreal's Affordable Housing Initiative.

• Increased annualized distributions twice in 2024, with a further increase to CAD 1.55 per unit effective February 2025.

Financial highlights

• Operating revenues for 2024 rose 4.5% year-over-year to CAD 1.11 billion; Q4 revenues were CAD 276.4 million, up 1.5%.

• Net operating income (NOI) for 2024 was CAD 730.7 million, up 5.5% year-over-year; Q4 NOI was CAD 177.9 million, up 0.7%.

• Diluted FFO per unit grew 5.8% to CAD 2.53 for 2024; Q4 FFO per unit was CAD 0.622, up 3.3%.

• FFO payout ratio improved to 57.9% for 2024, with a 3% distribution increase to CAD 1.50 per unit annualized.

• Net income for 2024 was CAD 292.7 million, reversing a loss of CAD 411.6 million in 2023, mainly due to fair value adjustments.

Outlook and guidance

• Targeting CAD 400 million in additional non-core Canadian property dispositions in 2025, including already closed transactions.

• Entered firm agreement to acquire an additional 102-suite Mondev portfolio building for CAD 40 million, closing in H1 2025.

• Previewed Q1 2025 repositioning with CAD 79 million acquisition in Edmonton and CAD 74 million disposition in Brampton.

• Management remains positive on long-term fundamentals of the Canadian multi-residential rental sector, citing robust rent growth and disciplined capital allocation.

• Anticipates a slight increase in discretionary capital spending in 2025, with continued focus on core portfolio reinvestment.