Fresh offs its first foray into the National Capital Region, residential property landlord Killam Properties (TSX:KMP) says it is hunting for more local acquisition prospects.
In reporting its third-quarter financial results earlier this month, the Halifax-based firm called Ottawa “a target acquisition market” as it expands its Ontario footprint.
Killam president and CEO Philip Fraser previously called Ottawa “one of the strongest cities for long-term investment in Ontario” and said it took the company four years of hunting before securing its first property in Canada’s capital.
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In September, Killam completed its $24-million purchase of a four-building, 244-unit Ottawa apartment portfolio from Timbercreek Asset Management. As part of the purchase, Killam assumed $13.2 million is existing mortgages with a weighted average interest rate of 4.69 per cent. The average rent is $837 a month, and the portfolio had a capitalization rate of 5.6 per cent.
That portfolio consisted of 1425 Rosenthal Ave. (54 units), 1440 Mayview Ave. (103 units), 266 Bronson Ave. (43 units) and 621 Cummings Ave. (44 units).
Earlier in the year, it acquired a 25-per-cent interest in the 146-unit Kanata Lakes Apartments development, purchased through Killam’s partnership with Kuwait Finance House.
Investors are showing an increased appetite for multi-residential assets in markets such as Ottawa, where the vacancy rate stood at 2.1 per cent at the end of April, according to the latest data available from the Canada Mortgage and Housing Corp.