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WINNIPEG, MB, Aug. 19, 2025 /CNW/ - Marwest Apartment Real Estate Investment Trust (the "REIT") (TSXV: MAR.UN) reported financial results for the three and six months ended June 30, 2025. This press release should be read in conjunction with the REIT's Unaudited Condensed Consolidated Interim Financial Statements and Management's Discussion and Analysis ("Q2 2025 MD&A") for the three and six months ended June 30, 2025, which are available on the REIT's website at www.marwestreit.com and at www.sedarplus.ca.
Mr. William Martens, Chief Executive Officer and Trustee commented, "This quarter we have seen higher turnover than anticipated and a longer re-lease period for our rental inventory. The increase in vacancy is offset by rental increases providing a modest same period revenue growth of 2.10%. We anticipate a stronger occupancy rate for the remainder of the year. Operating expenses increased over the prior year same period due to the removal of the provincial school tax rebate which reduced property taxes by $146,990 for the six months ended June 30, 2024. On July 15(th) , Unitholders received an increase of approximately 10 percent in their distribution. With continued growth in the portfolio's rental rates we look forward to continue to deliver positive financial results for our Unitholders in the future."
Q2 2025 Quarterly Highlights
-- Distribution increase of 9.62%. Effective June 30, 2025 distributions
increased from $0.0156 to $0.0171 per Trust Unit on an annualized basis.
-- Same Property Revenue from Investment Properties increased by 2.10% in
the six months ended June 30, 2025 compared to same period 2024
-- Reported Net Asset Value per Unit ("NAV") of $2.43 at June 30, 2025
compared to $2.37 at December 31, 2024
-- Reported adjusted funds from operations ("AFFO") of $0.0401 per Unit for
the six months ended 2025, compared to $0.0467 for 2024
-- Average occupancy rate of 96.82% reported for the six months ended June
30, 2025 compared to 99.25% in the same period 2024
-- Weighted average months to debt maturity of 57.58 months
Operations Summary
Three months ended June 30 Six months ended June 30
Portfolio 2025 2024 2025 2024
Operation
Information
Number of
properties 4 4 4 4
Number of suites 516 516 516 516
Average
occupancy rate 95.51 % 99.11 % 96.82 % 99.25 %
Average rental
rate to date $1,730 $1,668 $1,728 $1,658
Three months ended June 30 Six months ended June 30
Reconciliation 2025 2024 2025 2024
of Same Property
NOI(1) to IFRS
Revenue from
investment
properties $ 2,579,050 $ 2,566,572 $ 5,214,192 $ 5,107,070
Expenses:
Property
operating
expenses 679,926 574,288 1,374,218 1,227,845
Realty taxes 348,040 238,220 665,472 468,595
Total property
operating
expenses 1,027,966 812,508 2,039,690 1,696,440
Same Property
NOI(1) $ 1,551,084 $ 1,754,064 $ 3,174,502 $ 3,410,630
(1) Same Property Portfolio consists of 4 multi-residential
properties owned by the REIT for comparable periods
in Q2 2025 and Q2 2024 -- See "Notice with respect
to Non-IFRS Measures" below.
Reconciliation of Debt-to-Gross Book Value ratio
Total interest-bearing debt $ 101,022,365
Total assets on balance sheet 150,054,854
Debt-to-Gross Book Value ratio 67.32 %
Reconciliation of Debt Service Coverage ratio
Net Operating Income for the period ended June 30,
2025 $ 3,174,502
Mortgage payments for the period ended June 30, 2025 2,488,261
Debt Service Coverage ratio 1.28
Weighted average term to maturity on fixed rate debt 57.58 months
Weighted average interest rate on fixed debt 3.09 %
Financial Summary
The REIT generated FFO and AFFO per Unit of $0.0208 and $0.0168, respectively, during the three months ended June 30, 2025.
Reconciliation of Net Three months ended Six months ended
(Loss) Income and
Comprehensive (Loss) Income
to FFO and
AFFO
June 30 June 30
2025 2024 2025 2024
Revenue from investment
properties $2,579,050 $ 2,566,572 $ 5,214,192 $5,107,070
Property operating expenses (679,926) (574,288) (1,374,218) (1,227,845)
Realty taxes (348,040) (238,220) (665,472) (468,595)
Net Operating Income 1,551,084 1,754,064 3,174,502 3,410,630
NOI Margin 60.14 % 68.34 % 60.88 % 66.78 %
General and administrative (238,582) (211,840) (463,242) (400,931)
Interest income 31,176 49,482 65,096 80,657
Finance costs (981,066) (991,400) (1,959,975) (2,000,771)
Fair value (loss) gain on:
Investment properties 472,047 1,334,416 433,262 1,463,046
Unit-based compensation (9,998) 8,537 (28,452) 8,652
Exchangeable Units (835,487) 561,947 (1,984,282) 561,947
Net (loss) income and
comprehensive (loss) income $ (10,826) $ 2,505,206 $ (763,091) $3,123,230
Three months ended Six months ended
June 30 June 30
Reconciliation of FFO 2025 2024 2025 2024
Net (loss) income and
comprehensive (loss) income (10,826) 2,505,206 (763,091) 3,123,230
Distributions on
Exchangeable Units 42,035 41,227 82,765 82,694
Fair value gain on
investment properties (472,047) (1,334,416) (433,262) (1,463,046)
Fair value loss (gain) on
unit-based compensation 9,998 (8,537) 28,452 (8,652)
Fair value loss (gain) on
Exchangeable Units 835,487 (561,947) 1,984,282 (561,947)
FFO 404,647 641,533 899,146 1,172,279
Weighted average number of
Units 19,498,838 19,498,838 19,498,838 19,498,838
FFO/unit $ 0.0208 $ 0.0329 $ 0.0461 $ 0.0601
Reconciliation of AFFO
FFO $ 404,647 $ 641,533 $ 899,146 $1,172,279
Capital expenditures (77,953) (239,704) (116,738) (254,052)
Leasing costs - (5,880) - (7,902)
AFFO 326,694 395,949 782,408 910,325
Weighted average number of
Units 19,498,838 19,498,838 19,498,838 19,498,838
AFFO/unit $ 0.0168 $ 0.0203 $ 0.0401 $ 0.0467
AFFO payout ratio 24.02 % 18.84 % 19.75 % 16.44 %
NAV and NAV per Unit Reconciliation At June 30, 2025 At December 31, 2024
Unitholders' Equity $39,066,279 $39,901,132
Exchangeable Units 8,772,620 6,788,338
NAV 47,838,899 46,689,470
Trust Units 9,055,242 9,055,242
Exchangeable Units 10,443,596 10,443,596
Deferred Units 164,442 169,608
Total Units oustanding 19,663,280 19,668,446
NAV per unit $2.43 $2.37
The overall increase in NAV from $2.37 at December 31, 2024 to $2.43 at June 30, 2025, was mostly due to market conditions throughout all properties and net operating income less finance costs and general and administrative expenses exceeding distributions.
Outlook
Management is focused on growing the portfolio and unitholder value through increasing rental rates where the market allows, future acquisition opportunities that will increase the overall size and performance of the REIT, as well as maintaining a manageable debt structure. The current debt of the REIT is all fixed rates with an average remaining mortgage term of over four years. The majority of the REIT's debt is CMHC insured.
Management believes the organic growth in NAV due to paydown of debt over the mortgage terms is a positive outcome of the higher leveraged position as well as lowering the REIT's debt-to-GBV ratio and thereby increasing the NAV per Unit over time.
Management anticipates the demand for rental housing to continue to remain strong in the coming quarters. Management will assess the risks to the portfolio as the tariff uncertainty continues between Canada and the United States governments, and how that may or may not impact the economy. Interest rates have maintained the elevated levels increasing the cost of home ownership and delaying would-be homeowners purchases.
The increase in the portfolio's operating costs due to inflation may be offset by increases in rental rates, where the market allows, as 56 percent of the portfolio at June 30, 2025 is not under rent control or restrictive financing agreements.
About Marwest Apartment Real Estate Investment Trust
The REIT is an unincorporated open-ended trust governed by the laws of the Province of Manitoba. The REIT was formed to provide holders of Units with the opportunity to invest in the Canadian multi-family rental sector through the ownership of high-quality income-producing properties, with an initial focus on stable markets throughout Western Canada.
Forward-looking Statements
The information in this news release includes certain information and statements about management's views of future events, expectations, plans and prospects that constitute forward--looking statements. These statements are based upon assumptions that are subject to significant risks and uncertainties. Because of these risks and uncertainties and as a result of a variety of factors, the actual results, expectations, achievements or performance may differ materially from those anticipated and indicated by these forward--looking statements. A number of factors could cause actual results to differ materially from these forward--looking statements, including the risks described under the heading "Risk Factors" in the REIT's latest annual information form and management's discussion and analysis. The payment of cash distributions will be dependent upon a number of factors, including but not limited to the financial performance, financial condition and financial requirements of the REIT. Although management of the REIT believes that the expectations reflected in forward--looking statements are reasonable, it can give no assurances that the expectations of any forward--looking statements will prove to be correct. Except as required by law, the REIT disclaims any intention and assumes no obligation to update or revise any forward--looking statements to reflect actual results, whether as a result of new information, future events, changes in assumptions, changes in factors affecting such forward--looking statements or otherwise.
Neither the TSXV nor its Regulation Services Provider (as that term is defined in the policies of the TSXV) accepts responsibility for the adequacy or accuracy of this news release.
The Units are not registered under the United States Securities Act of 1933, as amended (the "U.S. Securities Act") and may not be offered or sold within the United States or to or for the account or benefit of U.S. persons, except in certain transactions exempt from the registration requirements of the U.S. Securities Act. This press release does not constitute an offer to sell, or the solicitation of an offer to buy, securities of the REIT in the United States or in any other jurisdiction.
Notice with respect to Non-IFRS Measures Disclosure
The REIT's financial statements are prepared in accordance with IFRS. In addition to IFRS measures, this news release and the REIT's Q2 2025 MD&A disclose certain non-IFRS financial measures that are commonly used by Canadian real estate investment trusts as an indicator of performance. Non-IFRS measures and ratios include the following:
Net Operating Income ("NOI")
The Trust calculates net operating income as revenue less property operating expenses such as utilities, repairs and maintenance and realty taxes. Charges for interest or other expenses not specific to the day--to--day operations of the Trust's properties are not included. The Trust regards NOI as an important measure of the income generated by income-producing properties and is used by management in evaluating the performance of the Trust's properties. NOI is also a key input in determining the value of the Trust's properties. For reconciliation to IFRS measures, refer to "Financial Operations and Results" in the REIT's Q2 2025 MD&A
Funds from Operations ("FFO")
The Trust calculates FFO substantially in accordance with the guidelines set out in the white paper titled "White Paper on Funds from Operations & Adjusted Funds from Operations for IFRS" by the Real Property Association of Canada ("REALpac") as revised in January 2022. FFO is defined as IFRS consolidated net income adjusted for items such as unrealized changes in the fair value of the investment properties, effects of puttable instruments classified as financial liabilities and changes in fair value of financial instruments and derivatives. FFO should not be construed as an alternative to net income or cash flows provided by or used in operating activities determined in accordance with IFRS. The Trust regards FFO as a key measure of operating performance. For reconciliation to IFRS measures, refer to "Financial Operations and Results" in the REIT's Q2 2025 MD&A
Adjusted Funds from Operations ("AFFO")
The Trust calculates AFFO substantially in accordance with the guidelines set out in the white paper titled "White Paper on Funds from Operations & Adjusted Funds from Operations for IFRS" by REALpac as revised in January 2022. AFFO is defined as FFO adjusted for items such as maintenance capital expenditures and straight--line rental revenue differences. AFFO should not be construed as an alternative to net income or cash flows provided by or used in operating activities determined in accordance with IFRS. The Trust regards AFFO as a key measure of operating performance. The Trust also uses AFFO in assessing its capacity to make distributions. For reconciliation to IFRS measures, refer to "Financial Operations and Results" in the REIT's Q2 2025 MD&A
The following other non--IFRS measures (including non-IFRS ratios) are defined as follows:
-- "FFO per unit" is calculated as FFO divided by the weighted average
number of Trust Units and Exchangeable Units of the Partnership
outstanding over the period.
-- "AFFO per unit" is calculated as AFFO divided by the weighted average
number of Trust Units and Exchangeable Units of the Partnership
outstanding over the period.
-- "AFFO Payout Ratio" is the proportion of the total distributions on Trust
Units and Exchangeable Units of the Partnership to AFFO per Unit.
-- "Net Asset Value" is calculated as the sum of unitholders' equity and
Exchangeable Units
-- "Net Asset Value per Unit" or "NAV per Unit" is calculated as the sum of
unitholders' equity and Exchangeable Units divided by the sum of Trust
Units, Exchangeable Units and Deferred Units outstanding at the end of
the period.
-- "Debt--to--Gross Book Value ratio" is calculated by dividing total
interest--bearing debt consisting of mortgages by total assets and is
used as the REIT's primary measure of its leverage.
-- "Debt Service Coverage ratio" is the ratio of NOI to total debt service
consisting of interest expenses recorded as finance costs and principal
payments on mortgages.
-- "Stabilized net operating income" is the estimated 12-month net operating
income that a property could generate at full occupancy, less a vacancy
rate and stable operating expenses.
-- "Average occupancy rate" is defined as the ratio of occupied suites to
the total suites in the portfolio for the period.
-- "Same Property NOI" is defined as Net Operating Income from properties
owned by the REIT throughout comparative periods, which removes the
impact of situations that result in the comparative period to be less
meaningful, such as acquisitions, or properties going through a lease-up
period.
Management believes that these measures are helpful to investors because, while not necessarily calculated comparably among issuers, they are widely recognized measures of the REIT's performance and tend to provide a relevant basis for comparison among real estate entities. These non-IFRS financial measures are not defined under IFRS and are not intended to represent financial performance, financial position or cash flows for the period and should not be viewed as an alternative to net income, cash flow from operations or other measures of financial performance calculated in accordance with IFRS.
The above non-IFRS measures are not standardized under the financial reporting framework used to prepare the financial statements of the REIT. Readers should be further cautioned that the above measures as calculated by the REIT may not be comparable to similar measures presented by other issuers. For further information, refer to the sections entitled "Non-IFRS measures" and "Financial Operations and Results" in the REIT's Q2 2025 MD&A, which is incorporated by reference herein, for further information (available on SEDAR+ at www.sedarplus.ca or the REIT's website www.marwestreit.com).
SOURCE Marwest Apartment Real Estate Investment Trust
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/CONTACT:
REIT Contact: For further information, please contact Mr. William Martens, Chief Executive Officer, Telephone: (204) 947-1200
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