We are pleased to send you the March 31, 2022 Management Report of Alignvest Student Housing Real Estate Investment Trust (“ASH REIT”).

We are currently experiencing high inflation in Canada, with the inflation rate rising to 6.7% in March 2022. We are seeing that student housing provides very effective protection against inflation due to the natural, high turnover of student leases. While we are still in the midst of our pre-leasing season, we are executing leases at higher than budget rates and expect to achieve strong year-over-year growth in rents. Further, we continue to experience strong demand for our beds, with our pre-leasing  for September 2022 currently 16% ahead of last year at this time. We expect to have another year of strong occupancy next year, consistent with our current occupancy of 98%.

In response to high inflation, the Bank of Canada increased its benchmark interest rate by 50bps on April 13, 2022 and has indicated that further rate hikes should be expected. This, combined with the uncertainty from Russia’s invasion of Ukraine, has created a volatile financing environment, with base rates and lender spreads increasing. We are pleased to have stable and attractive financing in place, with no material near-term financing requirements. With respect to potential acquisitions, we have been building up a robust cash reserve on our balance sheet to capitalize on the expected opportunities that may arise over the next few months.

Even in an inflationary and volatile financing environment, there continues to be strong interest in the student housing sector both nationally and globally. On April 19, 2022, Blackstone announced the acquisition of American Campus Communities, the largest owner/operator of student housing in the United States, for ~USD$13 billion, demonstrating the continuing confidence in the sector.

Below is the link to our Management Report.