Minto Apartment REIT posts net income of $34.6M in Q1 as economy rebounds, rental demand grows

Minto Niagara West property
Minto Niagara West property

Minto Apartment REIT’s bounceback continued in the first quarter of 2022 as the Ottawa-based real estate firm reported gains in all key metrics compared with a year earlier when the pandemic was wreaking havoc with the rental housing industry.

Minto generated funds from operations of $12 million in the three-month period ending March 31, up from $10.9 million a year earlier. 

The company’s overall revenue grew 8.4 per cent year-over-year to $32.5 million as the occupancy rate of its unfurnished suites ticked up to 94.2 per cent from 91.1 per cent and average rents rose 1.5 per cent to $1,655.

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The REIT reported net income of $34.6 million compared with a net loss of $20.4 million a year ago. Minto attributed the turnaround to higher net operating income in the first quarter of this year as well as fair value gains on investment properties, class-B limited partnership units, interest rate swap and unit-based compensation.

“Canadian urban rental market conditions continued to strengthen during the first quarter, driving year-over-year growth in our key financial metrics,” Minto CEO Michael Waters said in a statement, adding he expects the market to return to pre-pandemic levels by the middle of this year. 

Big gains on new leases

“We achieved significant gains on the new leases that we signed in the quarter despite the surge in the Omicron variant of COVID-19 and local challenges in Ottawa with the truckers’ occupation of the downtown core.”

Minto said it signed 401 new leases in the first quarter, realizing an average rent gain of 10.2 per cent – the highest mark in two years. The company said it’s been able to cut back on incentives such as rent discounts as the economy picks up.

The firm also added to its holdings in the first quarter, announcing in March it was joining forces with sister firm Minto Properties to buy into a mixed-use development on Vancouver Island. It followed that up last month with a pair of acquisitions worth a combined $200 million for properties in downtown Toronto and Calgary.

Minto REIT owns 30 multi-residential properties in Ottawa, Toronto, Montreal, Calgary and Edmonton with more than 7,500 apartment units. 

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