ASH – Management Report

with No Comments

MARCH 31, 2024 – MANAGEMENT REPORT

 

We are pleased to send you Alignvest Student Housing Real Estate Investment Trust’s Q1 2024 Management Report.

We have had a very busy start to 2024 and are expecting a  successful year for our REIT. The macroeconomic environment has shown signs of stabilization and opportunity. Interest rates have come down from their peak in Q4 2023. Further, CMHC financing has become more accessible to developers and investors, which has materially impacted our ability to positively underwrite acquisitions.

We kicked off the year with the acquisition of 417Nelson in Ottawa in February. This site nicely complements our other Ottawa properties and is conveniently located only a few minutes walk from the University of Ottawa.  Continuing our growth trajectory, in April we announced the acquisition of 308 King in Waterloo, with an expected closing in late May. It’s important to note that we have spent several years working to secure both of these transactions. Our deep relationships and expertise provide us with a unique advantage compared to other investors in the sector. We have a robust pipeline of additional acquisition opportunities for continued growth.

Our 2024 pre-leasing season is off to a strong start. We are already almost 83% pre-leased for September 2024 at our privately-managed properties and are projecting a 21.8% gap-to-market on sitting rents when compared to current tenant lease rates. We are also pleased to confirm that the Canadian governments recent announcements to reduce the number of international student visas has not impacted the demand we continue to experience across our portfolio.

We are pleased with the results we have delivered to our investors, including a 3.2% return in Q1 2024 and 12.4% annualized since inception (both are to Class F unitholders participating in our DRIP). With a strong acquisition pipeline in front of us, we are actively raising capital to pursue multiple opportunities and continue our expansion across Canada. The future looks strong, and we are confident in our strategy and the corresponding returns for our investors.

 

Below is the link to our Management Report. We have also included links to our Q1 2024 Financial Statements and 2023 Audited Financial Statements. Please contact us if you have any questions.

 

Q1 2024 Management Report

Q1 2024 Financial Statements

2023 Audited Financial Statements

Alignvest Student Housing Acquisition

with No Comments
ACQUISITION OF HIGH-QUALITY ASSET IN WATERLOO, ONTARIO

We are pleased to announce that we have entered into a binding contract to purchase a residential property located at 308 King Street North, Waterloo, Ontario (“308 King”).

308 King is a newly constructed, 25-storey building with 340 furnished units, providing housing for 659 students. The property is located within walking distance of both Wilfrid Laurier University and the University of Waterloo. The property offers on-site laundry, rooftop terraces with barbeques and lounge areas, an above-grade parking garage and bicycle parking. There is over 8,000 square feet of ground floor commercial space.

With the addition of 308 King, Alignvest Student Housing REIT will own a portfolio that provides housing for almost 6,000 students across 14 properties in six university-focused Canadian markets.

The acquisition is scheduled to close in May 2024. Below is the link to the full press release announcing the acquisition of 308 King.

 

Press Release - 308 King Acquisition

April 2024 Information Sheet

Student Housing Acquitistion

with No Comments

ACQUISITION OF HIGH-QUALITY STUDENT HOUSING ASSET IN OTTAWA, ONTARIO

We are pleased to announce the acquisition of a purpose-built student accommodation asset located at 417 Nelson Street, Ottawa, Ontario (“417Nelson”).

417Nelson is a modern 4-storey building with 94 beds in 53 fully furnished units. The property is in close proximity to our other Ottawa properties, which allows for operational efficiencies and enables us to continue to provide high-quality accommodation to students in the area. With this acquisition, we were able to assume attractive in-place CMHC financing which has a below-market interest rate of 2.32% and over six years of remaining term.

With the addition of 417Nelson, Alignvest Student Housing REIT now owns a portfolio of over 5,300 beds across 13 properties in six university-focused Canadian markets.

 

Below is the link to the full press release announcing the acquisition of 417Nelson.

 

 

 

 

 

 

 

Press Release - 417Nelson Acquisition February 2024 Information Sheet

Alignvest – Management Report

with No Comments
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

Alignvest Student Housing – Canada’s Cap on International Students

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.

Alignvest Student Housing – Q3 2023 Management Report

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

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

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

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!

Alignvest Student Housing Management Report

with No Comments

We are pleased to send you Alignvest Student Housing Real Estate Investment Trust’s Q4 2022 Management Report.

Our fair market value remains stable due to our strong operating performance and forecasted NOI growth in 2023. Demand for high-quality student housing continues to outpace supply, which has translated into upward pressure on rental rates and resulted in low vacancy rates (99.6% occupancy as at December 31, 2022). Our current pre-leasing velocity is providing confidence that the 2023/2024 academic year will follow similar trends; we are budgeting 2023 NOI at ~8% higher than 2022 on a same-property basis. We are pleased to report that we are already over 60% pre-leased at our privately-managed properties for September 2023 (over 20% ahead last year at the same time).

We are pleased to have delivered a 10.5% annualized net return since inception, with limited volatility. Our annualized distribution yield is 4.9% as at December 2022, equivalent to approximately a 10% pre-tax equivalent yield as it is delivered as a tax-efficient return of capital. We believe our REIT will continue to perform well in 2023 given our market leading position and our strong business fundamentals.

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

Management Report

 

SEE-MORE, HALIFAX

We acquired 1400 Seymour Street in Halifax, Nova Scotia in January 2023 for $90 million. See-More is a 6-storey, newly constructed (2022) student housing facility located steps away from Dalhousie University. See-More has 141 fully furnished units, including bachelors, 3-bedroom, 4-bedroom and 5-bedroom suites.  Additionally, See-More features several student-oriented amenities, including a yoga and wellness studio, games room, on-site laundry facilities, social rooms, common study areas and an underground parking garage.
1 2 3