Company Announcements

— Record FY 2024 normalized FFO and AFFO per Unit, reflecting strong operating performance and accretive capital allocation decisions —

OTTAWA, ON , March 5, 2025 /CNW/ - Minto Apartment Real Estate Investment Trust (the "REIT") (TSX: MI.UN) today announced its financial results for the fourth quarter and year ended December 31, 2024 ("Q4 2024" and "FY 2024", respectively). The Audited Consolidated Financial Statements and Management's Discussion and Analysis ("MD&A") for Q4 2024 and FY 2024 are available on the REIT's website at www.mintoapartmentreit.com and at www.sedarplus.ca.¹

"We delivered very strong operating performance in 2024, posting record highs in Same Property Revenue, Same Property NOI, and Normalized FFO and AFFO per unit," said Jonathan Li, President and Chief Executive Officer of the REIT. "In the fourth quarter, our business performance remained resilient. In addition, during the quarter and the first month of 2025, we executed on a series of accretive capital allocation strategies to build value for Unitholders. These included our entry into the Metro Vancouver market through the acquisition of a 50% managing ownership interest in Lonsdale Square, the sale of a non-core asset in Ottawa, the repayment of variable-rate debt with the proceeds from upward refinancing of four properties, and Unit purchases through our NCIB totalling $15 million representing almost 3% of our public float. We have significantly strengthened our balance sheet while improving our liquidity and we are well positioned to drive further growth and navigate any market changes."

"In the near-term, we will continue to adjust to temporary headwinds like slowing population growth and elevated supply in certain markets. However, we believe the long-term fundamentals for the multi-residential property sector remain intact. The structural, long-term fundamentals driving the sector, including an acute housing shortage, the affordability gap between renting and owning a home and a growing propensity among Canadians to rent, remain firmly in place."

Q4 2024 Highlights

• Same Property Portfolio ("SPP")[2] revenue was $39.4 million, an increase of 3.5% compared to the fourth quarter ended December 31, 2023 ("Q4 2023")
• Revenue of $39.4 million decreased year over year as the sale of properties in Ottawa and Edmonton offset the increased SPP revenue;
• SPP average monthly rent was $1,990, an increase of 5.5% compared to Q4 2023;
• Average occupancy of unfurnished suites was 96.3%, compared to 97.2% in Q4 2023;
• The REIT executed 297 new leases, achieving an average rental rate that was 11.2% higher than the expiring rents, a slight sequential increase from Q3 2024. The gain-to-lease potential on sitting rents was 13.0% as at December 31, 2024;
• SPP annualized turnover was 23%, a slight increase compared to Q4 2023;
• SPP Normalized Net Operating Income ("Normalized NOI") increased 4.1% compared to Q4 2023 and SPP Normalized NOI margin was 63.0%, an increase of 30 basis points ("bps") from Q4 2023;
• Normalized Funds from Operations ("Normalized FFO") were $0.2413 per unit, an increase of 4.1% from $0.2318 per unit in Q4 2023;
• Normalized Adjusted Funds from Operations ("Normalized AFFO") were $0.2170 per unit, an increase of 4.2% compared to $0.2083 per unit in Q4 2023;
• Net income and comprehensive income was $91.1 million;
• The REIT secured upward refinancing for three properties located in Ottawa and one property located in Toronto for combined net proceeds of $90.4 million, which were used to repay a portion of the revolving credit facility;
• The Board of Trustees approved a 3.0%, increase to the REIT's annual distribution in November 2024 raising it to $0.5200 per unit; and
• From mid-November to December 31, 2024, the REIT purchased $4.7 million of Units under its Normal Course Issuer Bid ("NCIB") at a weighted average price of $14.03 per Unit. In addition, an Automatic Securities Purchase Plan was established at the end of December 2024, and, subsequent to year end, the REIT purchased an additional $10.3 million of Units under the NCIB, bringing the total Units purchased to $15 million at a weighted average price of $13.44 per Unit.

FY 2024 Highlights

• SPP revenue was $156.3 million, a 5.1% increase compared to the year ended December 31, 2023 ("FY 2023");
• Revenue was $157.1 million, effectively flat compared to FY 2023;
• SPP Normalized NOI increased by 7.9% compared to FY 2023 and SPP Normalized NOI margin was 64.1%, a 170 bps increase compared to the same period;
• Interest costs decreased by 12.1% compared to FY 2023;
• Normalized FFO per unit of $0.9725 increased by 12.9% compared to $0.8617 per unit for FY 2023 and Normalized AFFO per unit of $0.8749 increased by 15.0% compared to $0.7608 per unit for the same period;
• Net income and comprehensive income was $63.2 million;
• Debt-to-adjusted earnings before interest, taxes, depreciation and amortization ("Debt-to-Adjusted EBITDA ratio") decreased to 11.04x from 11.79x at year-end 2023, and Debt-to-Gross Book Value ratio decreased by 30 bps to 42.5%;
• Deleveraged through the sale of non-core Ottawa assets for $86.0 million in January 2024, resulting in net proceeds of $68.0 million that were used to partially pay down the revolving credit facility; and
• In September 2024, the REIT published its 2023 Environmental, Social and Governance ("ESG") Report, which shares the REIT's progress in implementing ESG initiatives and setting targets to further its objectives and goals across all its operations and with all its stakeholders.

Subsequent to Year End

• On January 15, 2025, the REIT acquired a 50% managing ownership interest in Lonsdale Square, a property in North Vancouver, for a discounted purchase price of $53.0 million satisfied by the assumption of a $52.9 millionCMHC-insured mortgage. Concurrently, the REIT received repayment of the $14 million convertible development loan ("CDL") associated with the property which was used to repay a portion of the revolving credit facility;
• On January 22, 2025, the REIT sold Castleview, a property in Ottawa, for $69.0 million generating net proceeds of $33.8 million, a portion of which was used to repay the revolving credit facility and purchase Units under the REIT's NCIB program;
• On February 28, 2025, the purchase option for The Hyland expired without the REIT having exercised such option, and on March 5, 2025, the REIT opted to waive on its right of first opportunity presented by the Minto Group for a development project in Ottawa;
• Subsequent to December 31, 2024, the REIT purchased approximately $10.3 million of Units under its NCIB at a weighted average purchase price of $13.19 per Unit; and,
• On March 4, 2025, the REIT amended the terms of its credit facility to reduce the commitment from $300 million to $200 million.

Financial Summary

Summary of Q4 2024 Operating Results

Continued Solid Growth in SPP Revenue and NOI

The REIT generated SPP Normalized NOI growth of 4.1% in Q4 2024 compared to Q4 2023, while SPP Normalized NOI margin increased by 30 bps year-over-year to 63.0%. The increase in SPP Normalized NOI reflected SPP revenue growth of 3.5%, partially offset by a 2.5% increase in related normalized operating expenses. SPP revenue growth in Q4 2024 was driven primarily by 5.3% growth in unfurnished suite revenue, partially offset by lower revenue from furnished suites and lower commercial revenue due to the temporary retail vacancy at Minto Yorkville. The growth in unfurnished suite revenue was attributable to higher average monthly rent, partially offset by lower average occupancy.

Normalized FFO and AFFO per unit Increases Driven by NOI Growth and Reduced Interest Costs

Normalized FFO per unit and Normalized AFFO per unit increased by 4.1% and 4.2% in Q4 2024, respectively, compared to Q4 2023. The increases reflected NOI growth and accretive capital allocation strategies, which supported a 9.9% reduction in interest costs compared to Q4 2023.

NAV per unit and IFRS Net Income and Comprehensive Income

The REIT's net asset value ("NAV") per unit as at December 31, 2024 was $22.34, relatively consistent with $22.38 as at September 30, 2024. A non-cash fair value loss on investment properties of $11.7 million in Q4 2024 was offset by strong NOI combined with Unit purchases under the NCIB program in the quarter. The fair value loss on investment properties was attributable to increases in capitalization rates for select residential properties in Ottawa and Toronto and an increase to the capital expenditure reserve, partially offset by growth in forecast NOI.

The REIT reported revenue of $39.4 million which was relatively flat year over year as the sale of assets in Ottawa and Edmonton offset the increased SPP revenue. It also reported net income and comprehensive income of $91.1 million in Q4 2024, compared to a net loss and comprehensive loss of $77.2 million in Q4 2023. The variance was primarily attributable to the non-cash fair value gain of $91.4 million on Class B LP Units reflecting a decrease in the Unit price during the quarter, compared to a non-cash loss of $65.7 million in Q4 2023.

Gain-on-Lease, Gain-to-Lease Potential, Suite Repositioning and Commercial Activity

The REIT generated organic growth through 297 new leases signed in Q4 2024, achieving an average gain-on-lease of 11.2%. In Ottawa and Montreal, realized gain-on-lease increased sequentially from the third quarter ("Q3 2024") due to a higher proportion of turnover among tenants with longer average length of tenancy. In Toronto, gain-on-lease was lower than Q3 2024 due to turnover among tenants with shorter lengths of stay, as well as flattening market rents.

The REIT estimates a gain-to-lease potential of 13.0% as at December 31, 2024, representing future annualized potential revenue of $18.0 million. SPP annualized turnover was 23.0% in Q4 2024, which was a slight increase compared to Q4 2023.

The REIT repositioned a total of 12 suites across its portfolio in Q4 2024, generating an average annual unlevered return on investment of 9.3%. For FY 2024, the REIT repositioned a total of 48 suites, generating an average annual unlevered return of 9.2%. Management currently expects to reposition a total of 35 to 70 suites in 2025.

At Minto Yorkville in Toronto, Management is in negotiations to re-lease the vacant commercial space and anticipates lease payments to begin in 2026. Additionally, Management leased a portion of the vacant retail space at The Carlisle in Ottawa, with payments expected to begin in mid-2025.

Maintaining a Strong Financial Position

Management continued to focus on strengthening the REIT's balance sheet during Q4 2024 and into the first quarter of 2025. Management generated $138.2 million in cumulative net proceeds from upward refinancings, an asset sale, and a CDL repayment. After completing these transactions, the REIT fully repaid the balance on its revolving credit facility and was in a cash position.

As at December 31, 2024, the REIT had Total Debt outstanding of $1.1 billion, with a weighted average effective interest rate on Term Debt of 3.61% and a weighted average term to maturity on Term Debt of 5.04 years. Debt-to-Gross Book Value ratio was 42.5%, a reduction of 30 bps from 42.8% as at December 31, 2023, and Debt-to-Adjusted EBITDA ratio was 11.04x, compared to 11.79x a year earlier.

The REIT continues to maintain a strong financial position. Total liquidity was approximately $187.7 million as at December 31, 2024, with a liquidity ratio (Total liquidity/Total Debt) of 16.7%.

Management Change

At the end of March, Paul Baron, Senior Vice President, Property Operations, will be stepping down from his position to become the Chief Financial Officer of The Minto Group. We are pleased to announce that Michelle Calloway will be taking over as the new Senior Vice President, Property Operations, effective immediately. Michelle joins us from Fitzrovia Real Estate, where she led the Operations team. With approximately 20 years of multi-family property operations, leasing, marketing and development experience, we are confident she will lead our team in continuing to drive our performance and deliver exceptional experiences to our residents.

Conference Call

Management will host a conference call for analysts and investors on Thursday, March 6, 2025 at 10:00 am ET. To join the conference call without operator assistance, participants can register and enter their phone number at https://emportal.ink/4gNTMyt to receive an instant automated call back. Alternatively, they can dial 416-945-7677 or 1-888-699-1199 to reach a live operator who will join them into the call.

In addition, the call will be webcast live at:

Minto Apartment REIT Q4 2024 Earnings Webcast

A replay of the call will be available until Thursday, March 13, 2025. To access the replay, dial 289-819-1450 or 888-660-6345 (Passcode: 19306 #). A transcript of the call will be archived on the REIT's website.

About Minto Apartment Real Estate Investment Trust

Minto Apartment Real Estate Investment Trust is an unincorporated, open-ended real estate investment trust established pursuant to a declaration of trust under the laws of the Province of Ontario to own income-producing multi-residential properties located in urban markets in Canada. The REIT owns a portfolio of high-quality income-producing multi-residential rental properties located in Toronto, Montreal, Ottawa, Calgary and Vancouver. For more information on Minto Apartment REIT, please visit the REIT's website at: https://www.mintoapartmentreit.com.

Forward-Looking Statements

This news release may contain forward-looking statements (within the meaning of applicable Canadian securities laws) relating to the business of the REIT. Forward-looking statements are identified by words such as "believe", "anticipate", "project", "predict", "expect", "intend", "plan", "will", "may", "could", "should", "estimate" and other similar expressions. These statements are based on the REIT's expectations, estimates, forecasts and projections, including the REIT's expectations with respect to the impact of current economic conditions which include trade disputes, interest rate uncertainty, and inflation, among other factors, on its business, operations and financial results. They are not guarantees of future performance and involve risks and uncertainties that are difficult to control or predict. A number of factors could cause actual results to differ materially from the results discussed in the forward-looking statements, including, but not limited to, the factors discussed under the heading "Risks and Uncertainties" in the REIT's management's discussion and analysis dated March 5, 2025, which is available on SEDAR+ (www.sedarplus.ca). There can be no assurance that forward-looking statements will prove to be accurate as actual outcomes and results may differ materially from those expressed in these forward-looking statements. Readers, therefore, should not place undue reliance on any such forward-looking statements. Further, these forward-looking statements are made as of the date of this news release and, except as expressly required by applicable law, the REIT assumes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.

Non-IFRS and Other Financial Measures

This news release contains certain non-IFRS and other financial measures which are measures commonly used by publicly traded entities in the real estate industry. Management believes that these metrics are useful for measuring different aspects of performance and assessing the underlying operating and financial performance on a consistent basis. However, these measures do not have a standardized meaning prescribed by IFRS Accounting Standards ("IFRS") and are not necessarily comparable to similar measures presented by other publicly traded entities. These measures should strictly be considered supplemental in nature and not a substitute for financial information prepared in accordance with IFRS. The REIT has adopted the guidance under NI 52-112 Non-GAAP and Other Financial Measures Disclosure for the purpose of this news release. These non-IFRS and other financial measures are defined below:

• "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 REIT's method of calculating AFFO is substantially in accordance with REALPAC's recommendations under the revised publication titled ''REALPAC Funds from Operations (FFO) & Adjusted Funds from Operations (AFFO) for IFRS'' published in January 2022, except that it adjusts for certain non-cash items (such as adjustments for the amortization of mark-to-market adjustments related to debt), but may differ from other issuers' methods and, accordingly, may not be comparable to AFFO reported by other issuers. The REIT regards AFFO as a key measure of operating performance. The REIT also uses AFFO in assessing its capacity to make distributions.
• "AFFO per unit" is calculated as AFFO divided by the weighted average number of Units of the REIT and Class B limited partnership units of Minto Apartment Limited Partnership outstanding over the period. The REIT regards AFFO per unit as a key measure of operating performance.
• "AFFO payout ratio" is the proportion of per unit distributions on Units of the REIT and Class B limited partnership units of Minto Apartment Limited Partnership, excluding the Special Distribution, to AFFO per unit. The REIT uses AFFO payout ratio in assessing its capacity to make distributions.
• "annualized turnover" is calculated as the number of move-outs for the period divided by total number of unfurnished suites in the portfolio. This percentage is extrapolated to determine an annual rate.
• "average annual unlevered return" refers to the return on repositioning activities, and is calculated by dividing the average annual rental increase per suite after repositioning by the average repositioning cost per suite, excluding the impact of financing costs.
• "average monthly rent" represents the average monthly rent per suite for occupied unfurnished suites at the end of the period.
• "average occupancy" is defined as the ratio of occupied unfurnished suites to the weighted average of the total unfurnished suites in the portfolio for the period.
• "Debt-to-Adjusted EBITDA ratio" is calculated by dividing interest-bearing debt (net of cash) by Adjusted EBITDA. Adjusted EBITDA is a non-IFRS financial measure and is used for evaluation of the REIT's financial health and liquidity. Adjusted EBITDA is calculated as the trailing twelve-month NOI adjusted for a full year of stabilized earnings including finance income, fees and other income and general and administrative expenses from recently completed acquisitions or dispositions, but excluding fair value adjustments. The REIT regards Debt-to-Adjusted EBITDA ratio as a measure of financial health and liquidity.
• "Debt-to-Gross Book Value ratio" is calculated by dividing total interest-bearing debt consisting of fixed and variable-rate mortgages, credit facility, construction loans and Class C limited partnership units of Minto Apartment Limited Partnership by Gross Book Value and is used as the REIT's primary measure of its leverage.
• "FFO" is defined as IFRS consolidated net income adjusted for items such as unrealized changes in the fair value of 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 REIT's method of calculating FFO is substantially in accordance with REALPAC's recommendations under the revised publication titled ''REALPAC Funds from Operations (FFO) & Adjusted Funds from Operations (AFFO) for IFRS'' published in January 2022, but may differ from other issuers' methods and, accordingly, may not be comparable to FFO reported by other issuers. The REIT regards FFO as a key measure of operating performance.
• "FFO per unit" is calculated as FFO divided by the weighted average number of Units of the REIT and Class B limited partnership units of Minto Apartment Limited Partnership outstanding over the period. The REIT regards FFO per unit as a key measure of operating performance.
• "gain-on-lease" refers to the gap between rents achieved on new leases of unfurnished suites as compared to expiring leases.
• "gain-to-lease potential" refers to the gap between Management's estimate of monthly market rent and average monthly in-place rent per occupied unfurnished suite.
• "Gross Book Value" is calculated as the total assets of the REIT as at the applicable balance sheet date.
• "interest costs" are calculated as the sum of costs incurred on fixed and variable-rate mortgages, credit facility, and Class C limited partnership units of Minto Apartment Limited Partnership and excludes debt retirement costs.
• "NAV" is calculated as the sum of the value of REIT Unitholders' equity and Class B limited partnership units of Minto Apartment Limited Partnership as at the applicable balance sheet date.
• "NAV per unit" is calculated by dividing NAV by the number of Units of the REIT and Class B limited partnership units of Minto Apartment Limited Partnership outstanding as at the applicable balance sheet date.
• "NOI" is defined as revenue from investment properties less property operating costs, property taxes and utilities (collectively referred to as "property operating expenses" or "operating expenses") prepared in accordance with IFRS. NOI should not be construed as an alternative to net income determined in accordance with IFRS. The REIT's method of calculating NOI may differ from other issuers' methods and, accordingly, may not be comparable to NOI reported by other issuers. The REIT regards NOI as an important measure of the income generated from income-producing properties and is used by Management in evaluating the performance of the REIT's properties. It is also a key input in determining the value of the REIT's properties.
• "NOI margin" is defined as NOI divided by revenue from investment properties.
• "Normalized AFFO" is calculated as AFFO net of nonrecurring items that occurred during the period which are not indicative of the REIT's typical operating results.
• "Normalized AFFO per unit" is calculated as Normalized AFFO divided by the weighted average number of Units of the REIT and Class B limited partnership units of Minto Apartment Limited Partnership outstanding over the period.
• "Normalized AFFO payout ratio" is the proportion of the per unit distributions on Units of the REIT and Class B limited partnership units of Minto Apartment Limited Partnership, excluding the Special Distribution, to normalized AFFO per unit.
• "Normalized FFO per unit" is calculated as Normalized FFO divided by the weighted average number of Units of the REIT and Class B limited partnership units of Minto Apartment Limited Partnership outstanding over the period.
• "Normalized NOI" is calculated as NOI net of nonrecurring items that occurred during the period which are not indicative of the REIT's typical operating results.
• "Normalized NOI margin" is defined as Normalized NOI divided by revenue from investment properties.
• "Normalized operating expenses" are calculated as operating expenses net of nonrecurring items that occurred during the period which are not indicative of the REIT's typical operating results.
• "Special Distribution" refers to a special non-cash distribution of $0.76 per Unit declared by the REIT on December 16, 2024, payable in Units on December 31, 2024. The Special Distribution was made to distribute a portion of the capital gains realized by the REIT from the sale of investment properties completed during the year ended December 31, 2024.
• "Term Debt" is calculated as the sum of the amortized cost of fixed rate mortgages, a variable-rate mortgage fixed through an interest rate swap and Class C LP Units.
• "Total Debt" is calculated as the sum of the amortized cost of interest-bearing debt consisting of a variable-rate credit facility and fixed rate debt comprised of mortgages, a variable-rate mortgage fixed through an interest rate swap, Class C LP Units, and the construction loan.
• "Total liquidity" is calculated as the sum of the undrawn balance under the revolving credit facility and cash.
• "weighted average effective interest rate on Term Debt" is calculated as the weighted average of the effective interest rates on the outstanding balances of fixed rate mortgages, a variable-rate mortgage fixed through an interest rate swap and Class C limited partnership units of Minto Apartment Limited Partnership.
• "weighted average term to maturity on Term Debt" is calculated as the weighted average of the term to maturity on the outstanding fixed rate mortgages, a variable-rate mortgage fixed through an interest rate swap and Class C limited partnership units of Minto Apartment Limited Partnership.

Reconciliations of Non-IFRS Financial Measures and Ratios

FFO and AFFO

Normalized FFO and AFFO

NOI and NOI Margin

Same Property Portfolio

Total Portfolio

NAV and NAV per unit

SOURCE Minto Apartment Real Estate Investment Trust