Canadian Apartment Properties Real Estate Investment Trust

Good morning and welcome to the Canadian Apartment Properties REIT second quarter 2023 results conference call. All lines have been placed on mute during the presentation portion of the call with an opportunity for question and answer at the end. If you would like to ask a question, please press star followed by one on your telephone keypad. I would now like to turn the conference call over to our host, Nicole Dolan of Investor Relations. Please go ahead.

Thank you, Operator, and good morning, everyone. Before we begin, let me remind everyone that during our conference call this morning, we may include forward-looking statements about expected future events and the financial and operating results of CAPRI, which are subject to certain risks and uncertainties. We direct your attention to slide two and our other regulatory filings for important information about these statements. I will now turn the call over to Mark Kenney, President and CEO.

Thanks, Nicole, and good morning, everyone. Joining me this morning is Stephen Coe, our Chief Financial Officer, and Julian Schoenfeldt, our Chief Investment Officer. Let's start with an overview of our operational performance on slide four. As you can see, this slide demonstrates the increasingly tight rental market that we're experiencing across Canada. For Canadian residential portfolio, occupied AMR increased by 6.5% compared to the same period last year, and 5.1% on the same property basis. This was achieved alongside consistently high occupancies of nearly 99%. Moving to slide five, our robust rent growth drove increases in operating revenues and NOI, both up by approximately 5%. Our operating margin remained strong at 65.9% for the three months ended June 30th, 2023. Margin expansion was held back slightly due to higher repairs and maintenance costs, which we incurred from a combination of general inflationary pressures and a reduction in discretionary capital expenditure spend. As the rental market in Canada tightens, we're instead allocating that capital into in-suite maintenance. Diluted FFO per unit increased by 1.2%, primarily due to organic NOI growth and to a lesser extent, our accretive NCIB repurchases. This was partially offset by higher interest being incurred on our credit facilities. Our payout ratio remained strong at 61.5% and our diluted NAV per unit decreased slightly to $57.08. This was mainly driven by the fair value loss on our European portfolio. Operating results were strong for the six months ended June 30th, 2023, as you can see on slide six. Operating revenues were up by 5.3% compared to the same period last year. This drove the increase in our margin to 64.3% on the total portfolio and 64.9% on the same property portfolio, up by 20 and 50 basis points respectively. Our diluted FFO per unit increased by 1.7%. Again, this was a result of our strong organic growth along with NCIB repurchases partially offset by higher interest costs. Our payout ratio remained conservative at 62.5% for the current six-month period. We continue to execute on our CAPREIT 2.0 strategy as displayed on slide seven, and I'm excited about the progress we've made to date. On the asset side, we're continuously improving the quality of our portfolio by selling our older non-core properties and buying new purpose-built rental properties in Canada's fastest growing and highest density cities. Importantly, this allows us to support the supply of new construction rental housing where it's needed the most. We're also contributing to the crisis through our entitlement program. We're using development as a tool to extract and maximize significant underlying land value in our portfolio, which in turn paves the way for the construction of new housing supply. This asset management program accompanies our debt and equity initiatives as well. We've been investing in our NCIB to produce meaningful accretion for CAPRI unit holders. And we also actively manage our debt strategy and mortgage portfolio. These programs are integrated with our broader capital allocation plan to ensure that we're putting net proceeds to the best use. I'll now turn things over to Julian to provide a more detailed update on our capital recycling.