Alignvest Student Housing – Canada’s Cap on International Students

by on January 25, 2024 with No Comments

On Monday, Canada announced that it is capping the number of international students for two years, with the cap for 2024 at 360,000 students, a decrease of 35% from 2023.

In addition, post-graduate work permits will no longer be available for students in schools under a private-public partnership model and work permits will only be offered to spouses of students enrolled in masters, doctoral and professional programs.

The full news release is available at “Canada to stabilize growth and decrease number of new international student permits issued to approximately 360,000 for 2024 – Canada.ca”.

In the media, the Immigration Minister, Marc Miller, has said, “the main reason for the cap is to protect students who attend colleges, which are often private-public partnerships, that provide inadequate services at high costs, but also to ease pressure on housing and services. Some private institutions have taken advantage of international students by operating under-resourced campuses, lacking supports for students and charging high tuition fees, all the while significantly increasing their intake of international students.” [Source: Canada to cap international student permits amid housing crunch | Reuters]

OUR ANALYSIS

The cap represents a limit on the number of study permits that will be issued to students who want to come to Canada in the future, not the total number of international students in Canada. There are already an estimated 900,000 international students in Canada that can continue their studies.

While the cap represents a material cut in comparison to 2023, it is still substantially higher than the 256,000 study permits issued in 2020. Over the past three years, the number of permits issued annually has ballooned – this has been fuelled by both growth at universities and also due to rapid growth of colleges operating under private-public partnerships. It is really the latter scenario that Canada is seeking to control.

In fact, the University of Toronto welcomed the announcement and said it would work with all levels of government on the allocation of study permits. The changes are “focused on addressing abuses in the system by particular actors and are not intended to adversely impact universities such as ours,” the university said in a statement. [Source: Canada to cap international student permits amid housing crunch | Reuters]

HOW WILL THIS IMPACT US?

  • Our portfolio consists of 12 properties in six tier-one university markets across Canada. In particular, our properties are located in Halifax (Dalhousie), Ottawa (uOttawa), Oshawa (Ontario Tech), Hamilton (McMaster), Waterloo (Laurier and Waterloo) and Edmonton (University of Alberta). We do not target students attending colleges and have no exposure to colleges operating under private-public partnerships.
  • Based on our tenant survey results, our current tenant base consists of 73.5% domestic students and 26.5% international students. Since we do not target first-year students (who typically live in on-campus residences), our average exposure is less than 9% per year, assuming an equal split between second, third and fourth-year students.
  • The cap represents a 35% cut, which we expect will impact colleges more than universities. However, assuming that universities are equally impacted, we could potentially see our annual intake reduce from ~9% to ~6%. At most of our properties, we have healthy waiting lists of students seeking live in our buildings. We are very confident that we will be able manage the challenge of filling up to 3% of our beds that were previously occupied by international students.
  • As of January 18, 2024, we are 57% pre-leased for the September 2024/25 school year, which is in line with this time last year. We still have over seven months before the start of the school year. We are actively increasing our marketing efforts towards targeting domestic students. In particular, we are actively engaged in promoting a “student life” experience and working with universities to sponsor and support athletics and campus life.

 

In summary, we remain confident that the high quality of our portfolio will continue to attract university students. The changes announced by the Canadian government will have an immaterial impact on our portfolio and we will continue to build and deliver Canada’s leading student housing platform.

StoreWest Bluebird Development Fund Q3 Report

by on November 2, 2023 with No Comments

StoreWest Bluebird Development Fund

The StoreWest Bluebird Self-Storage Development Fund (“The Fund”) is off to a fantastic start. 3projects have begun construction, 4-6 projects have the potential to begin construction by next spring, and new opportunities are being presented to us on a weekly basis. We are very happy with the pace of progress thus far.

Q3 2023 Development Fund Report

StoreWest Bluebird Development Fund Q2 Report

by on November 2, 2023 with No Comments

StoreWest Bluebird Development Fund 

The Fund’s investment objective is to achieve capital appreciation through the development and sale of Class A self-storage projects across Canada.

 

Q2 2023 Report

ICM Bluebird Canadian Self-Storage Q2 Report

by on November 2, 2023 with No Comments

ICM Bluebird

ICM Bluebird Canadian Self Storage LP (“Fund”) was launched in December 2022 to invest in the consolidation and acquisition of a portfolio of self storage facilities across Canada.

 

Bluebird – Q2 2023 Report

Alignvest Student Housing – Q3 2023 Management Report

by on November 1, 2023 with No Comments
SEPTEMBER 30, 2023 – MANAGEMENT REPORT

We are pleased to send you Alignvest Student Housing Real Estate Investment Trust’s Q3 2023 Management Report. We have had another successful leasing season, with current occupancy exceeding 99% and strong growth in rents on turnover beds. Interestingly, we had about 42% turnover this year, which means that we are expecting strong rent growth again next year when some of this year’s renewing tenants end their leases. We have a rental gap-to-market of $5.0 million and are targeting to deliver $42.5 million of NOI in the 2023/2024 academic year.

We continue to monitor and effectively manage our capital structure to optimize our returns. We have an attractive loan-to-value ratio of 46.5% on our mortgage debt, with a weighted average interest rate of 3.47% and staggered maturity dates. With the growth in our property values, we remain confident that we will be able to effectively refinance our maturing debt in 2024 and 2025.

As previously communicated, we temporarily closed the REIT for new investments in May 2023. We did this primarily because of the stalemate we were seeing in the market. While we continued to evaluate investment opportunities, there were substantial gaps between vendor asking prices and the price we were willing to bid. In addition, the debt markets were quite challenging to predict, making it difficult to underwrite investments.

We are now starting to see some attractive opportunities become available, where there is either attractive in-place debt (that can be assumed), the transaction can be completed at a price that delivers an attractive return for our REIT, or the opportunity is highly strategic. We also expect that several opportunities will become available at attractive prices over the next year or so, as highly leveraged vendors need to refinance properties at current interest rates. We want to be ready to act on these opportunities. Accordingly, we are pleased to announce that we will re-open the REIT for investments effective immediately, for the next monthly closing date as of November 30, 2023.

We are pleased to have delivered an annualized return of 12.5% since inception. We are also excited about our future growth, which continues to look strong, both from organic growth within our portfolio and from future investments. We are grateful for your continued support.

Below are the links to our Q3 2023 Management Report and Q3 2023 Financial Statements. We have also included the press release announcing our re-opening. Please contact us if you have any questions or need additional information.

Management Report

 

Press Release - October 2023

 

Financial Statements

 

See-More, at 1400 Seymour Street in Halifax, Nova Scotia, consists of 491 beds adjacent to Dalhousie University.

See-More is at 100% occupancy for the 2023/2024 academic year

Alignvest Student Housing – Q2 2023 Management Report

by on August 3, 2023 with No Comments

JUNE 30, 2023 – MANAGEMENT REPORT

 

We are pleased to send you Alignvest Student Housing Real Estate Investment Trust’s Q2 2023 Management Report. We launched ASH REIT in June 2018, with the objective of consolidating the Canadian student housing real estate sector. Over the past five years, we have successfully grown to become Canada’s largest university-focused student housing owner/operator, with 5,208 beds across our 12 properties.

Over this period, we have been battle-tested, first through the pandemic, and then with rising inflation and interest rates. Through all of this, our portfolio has proven to be resilient and continued to deliver attractive risk-adjusted returns to our investors. We have delivered an 11.9% annualized net return since inception, with limited volatility.

With strong pre-leasing, we are at ~93% occupancy for September 2023 with strong growth in rental rates. We are on target to deliver ~$42.5 million of net operating income for the 2023/2024 academic year. The strength of our portfolio is reflected in the increasing value of our properties, which were appraised at $945.3 million as of June 30, 2023.

We continue to monitor and effectively manage our capital structure to optimize our returns. We have an attractive loan-to-value ratio of 47% on our mortgage debt, with a weighted average interest rate of 3.47% and staggered maturity dates. With the growth in our property values, we are confident that we will be able to effectively refinance our maturing debt in 2024 and 2025.

As of June 30, 2023, we have liquidity of $43.6 million. This is sufficient to manage our day-to-day working capital requirements, service normal-course redemptions and complete our next acquisition. Accordingly, to optimize our returns, on May 26, 2023, we announced a temporary suspension of acceptance of subscriptions for units of the REIT. We expect to announce an end to the suspension in Fall 2023.

As we reflect on the past five years, we would like to thank our investors who have supported us on this journey. We look forward to delivering continued growth and strong results.

Below are the links to our Q2 2023 Management Report and Q2 2023 Financial Statements. Please contact us if you have any questions or need additional information.

 

Q2 2023 Management Report Q2 2023 Financial Statements

Alignvest Student Housing – Update

by on June 29, 2023 with No Comments

Alignvest Student Housing (“Alignvest”) is pleased to announce an increase in the Fair Market Value (“FMV”) of the Units of Alignvest Student Housing Real Estate Investment Trust (“ASH REIT”) to $134.00 per Class F Unit and $130.83 per Class A Unit (collectively, the “Unit”) as at June 30, 2023.

Additionally, ASH REIT’s Board of Trustees have approved ASH REIT’s Monthly Distribution of $0.50 per Unit ($6.00 per Unit on annual basis), effective June 30, 2023, for unitholders of record as of June 1, 2023.

Please refer to the press release for additional information.

Press Release

Alignvest Student Housing- Management Report

by on May 16, 2023 with No Comments
MARCH 31, 2023

We are pleased to send you Alignvest Student Housing Real Estate Investment Trust’s Q1 2023 Management Report.

Despite the continuing volatility in both the equity and debt markets, our fair market value has remained stable and is starting to show growth due to our strong operating performance and our portfolio’s NOI growth in 2023. Our REIT’s performance speaks for itself – as of March 31, 2023, our privately managed portfolio is over 99% occupied, and as of May 5, 2023, is ~85% pre-leased for September 2023 at rates that exceed our budgets. We are building an attractive gap-to-market in rents of over $6 million, which bodes for well continued growth in 2024 and beyond.

As part of our continuing growth, we have increased our disclosure this quarter by providing comparative financial and operating metrics, as well as quarterly financials, which provides investors with enhanced tools to evaluate our performance. We are also pleased to announce the release of our 2023 ESG Report, which incorporates reporting on our Greenhouse Gas emissions. Below are the links to our Q1 2023 Financial Statements and ESG Report.

Below is the link to our Management Report. Please contact us if you have any questions or need additional information.

Q1 2023 Management Report

 

Q1 2023 Financial Statements

 

2022 Audited Financial Statements

 

2023 ESG Report

 

 

 

 

 

 

 

 

 

SEE-MORE, HALIFAX

Pictured above is See-More, our newest acquisition located in Halifax, Nova Scotia. Throughout the due diligence process, our team analyzed the Environmental and Social components of the building in relation to our overall ESG strategy. The rooftop solar panel installation feeds directly into the domestic hot water and offsets the energy in all common areas of the building. This contributes to our goal of lowering our GHG emissions and sourcing non-emitting sources of energy. The art installation on the exterior wall is inspired by Mi’kmaw traditional porcupine quill work, petroglyphs, weavings, and other aspects of the local indigenous culture. The sentiment of the art speaks to the welcoming environment we want to create for our students; one that is inclusive, safe and also fun!

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