Ottawa’s largest real estate investment trust is making its first move into Western Canada with a deal to buy a 50 per cent stake in more than a dozen multi-residential properties in the Vancouver area.
InterRent REIT said Monday it’s partnering with Toronto-based Crestpoint Real Estate Investments to acquire 15 properties with a total of 614 residential suites in Canada’s third-largest city. The combined purchase price is $292.5 million.
The deal, which is being financed with a mix of cash and new short-term debt, is expected to close at the end of the month. InterRent will manage the properties, which were purchased from six different vendors.
The company says the units are located in “highly desirable, amenity-rich neighbourhoods” such as trendy Kitsilano and West Point Grey.
In a statement, InterRent said it expects to see continued “robust demand” for multi-family housing in Vancouver, where the five-year rental vacancy rate has been around one per cent. The company cited the emergence of a growing tech sector and the West Coast city’s popularity with new immigrants as key factors fuelling demand for rental housing.
“The Vancouver rental market continues to exhibit strong, sustainable market fundamentals, with exposure to a growing tech sector,” CEO Mike McGahan said. “This is a market we have targeted for a long time.”
The new acquisition signals that the Ottawa firm is keen to expand its geographic footprint beyond Ontario and Quebec, where it is already a well-established presence. The company owns more than 11,000 rental suites, most of which are located in the National Capital Region, Montreal and the Hamilton-Niagara area.
InterRent is the second publicly traded Ottawa real estate firm to invest in the Vancouver market in the past few weeks.
Last month, Minto Apartment REIT announced it was providing nearly $12 million in funding for a joint venture between its sister company, Minto Properties, and a subsidiary of B.C.-based Darwin Properties to build the first phase of Lonsdale Square, a master-planned community in North Vancouver.
The six-storey building will feature 116 rental suites as well as 7,800 square feet of ground-floor retail space. Once construction is complete, the REIT will have the option to purchase the building at five per cent less than its appraised market value.