Minto Apartment Real Estate Investment Trust (TSX:MI.UN) is bolstering its Montreal portfolio with two residential properties that are primed for renovation and higher yields on rent.
The Ottawa-based REIT announced Thursday it has entered into an agreement to fully acquire both Le 4300 and Haddon Hall in Montreal. The $281.1-million acquisition, expected to close next month, will add 528 suites to Minto REIT’s portfolio in the Quebec metropolis.
Le 4300 is a 12-storey, 62-year-old building in Montreal’s affluent Westmount neighbourhood. The property contains 318 suites with average monthly rents of $2,667 per unit. Built in 1928, Haddon Hall is a series of 10 six- and seven-storey buildings with 218 suites and an average per-unit rent of $1,882.
The two properties, close to Minto’s recently acquired Rockhill residence, have both begun repositioning programs as of late. Only 76 units have so far been renovated, Minto REIT says, leaving opportunities to revamp 452 suites for higher-yield rents.
In order to finance the acquisitions, Minto REIT intends to raise $225 million through a bought deal public offering of trust units. The offering includes an over-allotment option that, if exercised, would raise the gross proceeds to $247.5 million. The remainder of the purchase price will be covered through a $45-million mortgage on Haddon Hall and Minto REIT’s existing credit facility.