Management Report – December 31, 2023
We are pleased to send you Alignvest Student Housing Real Estate Investment Trust’s Q4 2023 Management Report. 2023 was a successful year for the REIT. We started the year with a flagship property acquisition in Halifax, which expanded our presence into Eastern Canada. Our entire portfolio has delivered strong operating performance, resulting in a 21.4% return to Class F shareholders (with DRIP participation). With the growth in NOI, our portfolio is valued at $961.8 million, an increase of over 15% over the year.
The macroeconomic environment was more stable in the second half of 2023, with inflation decreasing to 4.0% or below since May and the 5-year GoC bond yield dropping over 25% since the end of Q3. We spent much of 2023 focused on building our acquisition and investment pipeline to be ready when deals became actionable. In Q4, with a robust pipeline, we were able to re-open the REIT for subscriptions. We appreciate everyone’s patience with us as we needed more visibility on our ability to put capital to work before taking in additional cash from subscriptions.
In Q4, we completed our equity investment in the partnership that acquired 149 College Street, a 43,118 square foot building in Toronto, steps away from the University of Toronto. We also entered into a contract to acquire a student housing property in a market where we already have operations, with an expected closing date in Q1 2024. In addition, we are in due diligence on multiple additional opportunities.
Our 2024 pre-leasing season is off to a strong start. We are already almost 60% pre-leased at our privately-managed properties for September 2024 and are projecting a 15.1% gap-to-market on sitting rents when compared to budgeted September 2024 lease rates.
Over the past several weeks, the Canadian government has issued new rules and caps applicable to international students. In particular, the focus seems to be targeted to colleges, where we have no exposure. As we stated in our response (link below), we do not believe these changes will have a material impact on our portfolio.
We are expecting to deliver strong performance in 2024 given our market leading position and our strong business fundamentals. With a strong acquisition pipeline in front of us, we are actively raising capital to pursue these opportunities. The future looks strong, and we are confident in our strategy and the corresponding returns for our investors.
Below is the link to our Q4 2023 Management Report.
Q4 2023 Management Report Our Response to Canada's Cap on International Students