Despite signing a record number of new leases in the second quarter, Minto Apartment Real Estate Investment Trust generated less income than it did a year earlier as it continued to feel the lingering effects of the pandemic.
The Ottawa-based REIT reported funds from operations of $11.9 million in the three-month period ending June 30, down from $12.7 million a year earlier. The company said revenue from unfurnished suites dipped six per cent year-over-year as occupancy rates in those units fell from 96.2 per cent in Q2 of 2020 to 91.5 per cent this year.
“The majority of the decline was attributable to reduced occupancy at some of the REIT's core-urban properties where the negative impact of COVID-19 was most pronounced,” the company said in a statement.
The REIT’s net income also declined to $8.7 million from $12.1 million a year ago.
But Minto said it was starting to see signs of a turnaround in the rental market. The company said it signed 534 new leases in the second quarter, up from 339 a year ago and the most since the REIT was founded in 2018. Minto’s average rents from those new agreements are 5.9 per cent higher than rates charged in expiring leases.
Minto said its average rent of $1,640 as of June 30 was its highest ever.
“As COVID-19 vaccinations continue to ramp up across Canada, population growth accelerates and the benefits of urban living are fully re-established, we are confident that our financial performance will steadily improve,” CEO Michael Waters said in a statement.
Minto REIT owns 29 multi-residential properties in Ottawa, Toronto, Montreal, Calgary and Edmonton with more than 7,200 apartment units. The company is currently planning six new developments in Ottawa, Toronto and Vancouver that would add nearly 1,600 suites to its portfolio.