CAPREIT Announces Strategic Sale of MHC Portfolio for $740 Million
15 Julio 2024 - 6:30AM
Canadian Apartment Properties Real Estate Investment Trust
(“CAPREIT”) (TSX:CAR.UN) announced today that it has entered into
an agreement with an entity controlled by TPG Real Estate to sell
its manufactured home community (“MHC”) portfolio for a gross
purchase price of $740.0 million (excluding transaction costs). The
unencumbered MHC portfolio is comprised of 12,138 residential lots
spread across 75 community sites located throughout Canada.
The purchase price will be satisfied in part
through an interest-only vendor take-back loan of $140.0 million,
bearing interest at a rate of 3.0% per annum for a five-year term,
with the remaining $600.0 million to be satisfied in cash.
CAPREIT intends to utilize the net sale proceeds
for: (1) the repayment of the balance outstanding on its Canadian
revolving credit facility (approximately $187.0 million as of June
30, 2024); (2) future acquisitions of on-strategy rental properties
in Canada; and (3) general business purposes, which may include
capital expenditures, debt repayment and the repurchase of trust
units under its normal course issuer bid.
“We look forward to a smooth and successful
transition with TPG Real Estate. TPG Real Estate has advised
CAPREIT that, as a longstanding investor in the Canadian real
estate sector, it intends to partner with the existing team to
manage and grow the MHC portfolio going forward,” said Mark Kenney,
President and Chief Executive Officer of CAPREIT.
“We intend to use the net proceeds from this
strategic sale to strengthen our balance sheet, enhance our
liquidity and further fuel our high-grading capital allocation
strategy,” added Julian Schonfeldt, Chief Investment Officer of
CAPREIT. “This pivotal transaction is not only providing CAPREIT
with a significant amount of capital, but it also increases
management’s focus as a pure play apartment REIT. We’re excited to
be simplifying our story and dedicating our resources to our core
business, where our competitive advantages are strongest.”
The transaction is subject to compliance with
the Competition Act (Canada) and other closing conditions customary
in transactions of this nature. Subject to the receipt of all
regulatory approvals and satisfaction of customary closing
conditions, closing is anticipated in the fourth quarter of 2024.
There can be no assurance that all conditions to closing will be
satisfied or waived.
ABOUT
CAPREITCAPREIT is Canada’s largest publicly traded
provider of quality rental housing. As at March 31, 2024, CAPREIT
owns approximately 64,200 residential apartment suites, townhomes
and manufactured home community sites well-located across Canada
and the Netherlands, with approximately $16.7 billion of investment
properties in Canada and Europe. For more information about
CAPREIT, its business and its investment highlights, please visit
our website at www.capreit.ca and our public disclosure which can
be found under our profile on SEDAR+ at www.sedarplus.ca.
CAUTIONARY
STATEMENTS REGARDING
FORWARD-LOOKING STATEMENTSCertain
statements contained in this press release constitute
forward-looking statements within the meaning of applicable
Canadian securities laws. Forward-looking statements generally can
be identified by the use of forward- looking terminology such as
“outlook”, “objective”, “may”, “will”, “expect”, “intent”,
“estimate”, “anticipate”, “believe”, “consider”, “should”, “plans”,
“predict”, “estimate”, “forward”, “potential”, “could”, “likely”,
“approximately”, “scheduled”, “forecast”, “variation” or
“continue”, or similar expressions suggesting future outcomes or
events. Forward-looking statements in this press release include,
but are not limited, statements with respect to the closing of the
MHC portfolio sale, the intended use of net disposition proceeds
thereof and the timing of the sale transaction. The forward-looking
statements made in this press release reflect CAPREIT’s current
expectations and projections about future results and events based
on information available to CAPREIT as of the date on which such
statements are made. Actual results and developments are likely to
differ, and may differ materially, from those expressed or implied
by the forward- looking statements contained in this press release.
Any number of factors could cause actual results to differ
materially from these forward-looking statements. Although CAPREIT
believes that the expectations reflected in forward-looking
statements contained herein are reasonable, it can give no
assurances that the expectations of any forward-looking statements
will prove to be correct. Accordingly, readers should not place
undue reliance on such forward-looking statements.
Forward looking statements in this press release
are subject to certain risks and uncertainties, many of which are
beyond CAPREIT’s control, which could result in actual results
differing materially from these forward-looking statements. These
risks and uncertainties include, but are not limited to, the risks
and uncertainties described under the heading “Risks and
Uncertainties” in CAPREIT’s 2023 Annual Report and under the
heading “Risk Factors” in CAPREIT’s Annual Information Form for the
year ended December 31, 2023, each of which is available under
CAPREIT’s profile on SEDAR+ at www.sedarplus.ca.
Except as specifically required by applicable
Canadian securities law, CAPREIT does not undertake any obligation
to update or revise publicly any forward-looking statements,
whether as a result of new information, future events or otherwise,
after the date on which the statements are made or to reflect the
occurrence of unanticipated events. These forward-looking
statements should not be relied upon as representing CAPREIT’s
views as of any date subsequent to the date of this press
release.
For more
information, please
contact: |
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CAPREIT |
CAPREIT |
CAPREIT |
Mr. Mark Kenney |
Mr. Stephen Co |
Mr. Julian Schonfeldt |
President & Chief Executive Officer |
Chief Financial Officer |
Chief Investment Officer |
(416) 861-9404 |
(416) 306-3009 |
(647) 535-2544 |