Release Date: May 07, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Minto Apartment REIT (MIAPF, Financial) achieved a 2.1% year-over-year growth in revenue on a same-property basis, driven by a 3.7% increase in the unfurnished suite portfolio.
- The REIT successfully entered the Metro Vancouver market by acquiring a 50% managing ownership interest in the Lonsdale Square property.
- Minto Apartment REIT (MIAPF) executed a long-term lease for the entire retail space at Minto Yorkville, which will begin lease payments in January 2026.
- The REIT has been active with its NCIB program, purchasing $15.4 million of units at a significant discount to book value, and an additional $8.4 million since quarter-end.
- The REIT's development pipeline is progressing, with stabilization expected for several projects between 2025 and 2027, indicating future growth potential.
Negative Points
- Normalized FFO and AFFO per unit decreased by 2.9% and 3.3% respectively, reflecting lower NOI due to increased operating expenses and lower occupancy.
- Revenue from commercial leases decreased by 39.8% year-over-year due to temporary vacancy at Yorkville.
- The furnished suite portfolio saw a 21% revenue decrease compared to Q1 last year, attributed to lower occupancy and average monthly rent.
- Operating expenses increased by 6.4% over Q1 2024, primarily due to higher property operating and natural gas costs.
- The Toronto and Calgary markets are experiencing competitive pressure from new supply, impacting occupancy and rent growth.
Q & A Highlights
Q: How are you approaching the use of incentives in the Toronto and Calgary markets given the elevated supply levels?
A: Jonathan Li, President and CEO, explained that they have been prioritizing occupancy since the beginning of the year, making pricing adjustments and using more promotions across the portfolio. This strategy has led to higher occupancy rates, although it has slowed growth. The elevated supply in Toronto is expected to last until the end of 2026, while Calgary might see a slowdown by the end of 2025.
Q: Can you provide insights into the leasing performance in Montreal and Ottawa?
A: Jonathan Li noted that Montreal has been strong, with positive leads and traffic data. Ottawa remains stable, with a good balance between supply and demand. The portfolio in these cities is competitive due to larger unit sizes and lower costs compared to new condos and purpose-built rentals.
Q: What is the impact of macroeconomic factors on the furnished suite segment, and how do you see its future?
A: Jonathan Li stated that they decided to wind down the furnished suite business due to structural changes in demand, such as reduced film industry activity and corporate travel. The conversion to unfurnished suites is ongoing but will be done cautiously to maximize returns.
Q: How is the Lonsdale property performing against initial forecasts?
A: Jonathan Li mentioned that Lonsdale is performing relatively stable and in line with the market. However, the market conditions are slightly worse than when they initially underwrote the property. The financial impact is currently neutral, with hopes for positive contributions later in the year.
Q: What are the refinancing opportunities and strategies for 2025 and 2026?
A: Edward Fu, CFO, detailed that they have $101 million in maturities for 2025, with some already refinanced at favorable rates. There are upward refinancing opportunities for the remaining maturities, and they will evaluate these based on terms, coupons, and capital reallocation potential.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
