Ottawa Real Estate Show: Armed with IPO proceeds, Minto eyes intensification opportunities

Editor's Note

The Ottawa Real Estate Show is a new online broadcast dedicated to commercial property in Canada’s capital. Watch the show at http://bit.ly/OttawaRealEstateShow. The Ottawa Real Estate Show is sponsored by Mann Lawyers and CBRE Ottawa.

Fresh off its $230-million initial public offering of a new apartment REIT, Ottawa-based Minto Group is looking to expand both through acquisitions and new developments in Canada’s largest urban markets, the firm’s chief executive said.

Earlier this year, Minto spun off 22 of its Canadian multi-residential properties into a new REIT that began trading on the Toronto Stock Exchange in July. The Minto Group and its owners, the Greenberg family, are closely tied to the new REIT and own 57 per cent of the venture.

Speaking on the Ottawa Real Estate Show, Minto CEO Michael Waters said the TSX listing gives the firm – which develops new homes and condos in addition to managing residential rental and commercial properties – access to capital that will help fuel its expansion.

While Minto will continue to construct large greenfield developments of low-rise single-family homes and townhomes, Waters said land-use planning policies are increasingly pushing the firm towards mid-rise and high-rise projects.

“We are seeing more pressure to intensify existing sites,” Waters said. “In urban centres, we are doing a lot of brownfield site redevelopment.”

When it comes to multi-residential properties in particular, Minto is tapping into an asset coveted by investors and in high demand among tenants.

Capitalization rates – a rough measure of return on an investment – of prime Ottawa multi-residential properties were hovering below four per cent in the first quarter, according to real estate firm CBRE. That’s lower than the city’s office, industrial and retail markets and indicates a relatively modest amount of perceived risk.

“Whether it’s aging baby boomers looking to downsize or millennials looking for low-maintenance starter residences, there seems to be (healthy) demand and a limited supply in Ottawa of multi-residential properties, which makes it attractive for investors,” said Shawn Hamilton, managing director of CBRE.