The following is a summary of the Canadian Apartment Properties Real Estate Investment Trust (CDPYF) Q4 2023 Earnings Call Transcript:
Financial Performance:
CAPREIT saw a 5.9% increase in operating revenues for Q4 2023, spurred by strong rent growth throughout the year.
Net Operating Income (NOI) rose by 7.4% compared to Q4 2022, despite a net decrease of over 2,000 suites.
NOI margin improved to 64.9% for the quarter, up by 90 basis points due to cost control measures.
Funds From Operations (FFO) increased by 2.2% compared to Q4 2022.
For the full year 2023, operating revenues grew by 5.8% and net operating income increased by 6.5%.
FFO for diluted unit increased by 2.9% to $2.39 for the year ended 2023.
The company maintained a solid liquidity position with $340 million in available capacity at the end of 2023 and also had $1.5 billion worth of unencumbered investment properties.
Business Progress:
CAPREIT focused on streamlining the portfolio for value creation, involving the disposal of older, non-core properties and reinvestment into new build rental apartment properties in Canada.
It invested $101 million in 2023 for the repurchase and cancellation of 2.2 million Trust Units, as part of its NCIB program.
The firm continued to engage with governmental bodies concerning affordable housing, with four affordable housing sites currently targeted.
In 2023, the company sold over $400 million in non-core properties and reinvested around $300 million into new, purpose-built rental apartments, acquiring seven properties in the past year.
The company plans to dispose over $400m worth of off-strategy properties to further upgrade the portfolio in 2024.
CAPREIT launched an at-the-market program aimed at cost-effectively raising capital when market conditions are favorable, enhancing its financial flexibility for capital allocation strategies.
The company confirmed the acquisition of two properties amounting to around 600,000 square feet with development potential.
They are expecting property taxes to increase across their portfolio in the coming year.
More details: CANADIAN APARTMENT PROPERTIES REAL IR
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