One of Canada’s largest real estate investment trusts is adding to its rental housing portfolio in Ottawa with a $95.5-million deal to buy a pair of properties.
CAPREIT says it’s reached an agreement to purchase a 50-suite apartment building at 141 Augusta St., just east of the ByWard Market, and the Surrey Place and Hunter’s Point complex south of Hunt Club Road, which has a total of 330 three- and four-bedroom townhouses. The properties have a combined occupancy rate of 98.7 per cent.
Both sites were previously owned by Kingston-based Homestead Land Holdings. The all-cash transaction is expected to close by the end of November.
“These Ottawa acquisitions are an excellent example of our asset allocation strategy to target mid-tier residential properties in strong Canadian rental markets where our experience will generate increased value for our unitholders over the long term,” CAPREIT president and CEO Mark Kenney said in a statement.
CAPREIT, which already owns several properties in the Ottawa region, has an ownership stake in more than 66,000 rental suites in Canada, the Netherlands and Ireland.
It’s the second major rental property deal in less than a week in the National Capital Region. Last Wednesday, Manulife Investment Management said it was acquiring a luxury apartment complex in Gatineau, marking the firm’s first entry into the region’s multi-family housing market.
While Ottawa’s rental vacancy rate was below two per cent at the end of 2019, some indicators suggest the capital’s rental market has softened during the pandemic.
According to rental search site Rentals.ca, Ottawa’s average rents fell 10 per cent in October compared with a year earlier, while locally based REITs InterRent and Minto said occupancy rates in their most recent quarters were down year-over-year. But InterRent and Minto still posted strong financial results and said they expect the rental market to bounce back once the COVID-19 crisis is over.