Canadian Apartment Properties Real Estate Investment Trust

We're pleased to be executing on that priority and helping with the resolution. Slide 11 provides an overview of our development model, which we've covered previously, but I'll take a minute to highlight our latest application. On the left, you can see that we've submitted an application for an infill development proposing two new buildings containing a total of 635 residential suites at 1050 Markham Road in the GTA. This will provide for approximately 429,000 square feet of new residential GFA to be constructed on a vacant site that is adjacent to one of our longest-owned properties, which is located within 300 meters of the future Durham-Scarborough Bus Rapid Transit Station. We're also excited to have had our two Davisville applications approved, and we're looking forward to seeing more of our development pipeline progress through this program. I will now turn things over to Stephen for his financial review.

Thanks, Julian, and good morning, everyone. Referring to slide 13, our balance sheet remains strong in the second quarter, with capacity on our Canadian credit facilities increasing to approximately $470 million. We have $285 million in Canadian mortgage principal maturing in the second half of 2024, representing 6.3% of the Canadian mortgage balance and an overall weighted average term to maturity of 5.2 years which is one of the longest in our multi-residential peer universe. The weighted average interest rate on our Canadian mortgage portfolio remains low at just over 3%, and we continue to conservatively fix all our interest costs to mitigate volatility risk. Slide 14 shows our staggered maturity profile and highlights the fact that we have no more than 14% of our total Canadian mortgages coming due in any given year. Proactive management of our debt financing continues to form a key part of our overall capital reallocation program, and this has empowered us to efficiently execute on our strategy. On slide 15, you can see that our total debt to gross book value ratio remained relatively stable at 41.5% on June 30, 2024. We've also maintained our debt service and interest coverage ratios consistent with the previous quarter at 1.8 times and 3.3 times respectively. Finally, I want to take a minute to discuss slide 16, which demonstrates our strategic reallocation of capital out of certain discretionary value-add improvements and into increased repairs and maintenance without impacting revenue growth. For extra clarity, this initiative excludes energy, structural, life and safety, and other critical non-discretionary capex. That said, you can see that we've been scaling back on common area and in-suite expenditures, which are capitalized to the balance sheet. Instead, we're reallocating a portion of that spend into additional R&M work, which negatively impacts our NOI margins. However, overall, we're spending less and therefore growing our cash returns. For the current six-month period, other property operating costs increased by 4% on our total portfolio, or 8.5% on the same property basis, with R&M representing the largest component of that. During the same period, our common area and in-suite capex declined by 29%, evidencing the net savings achieved by this strategy without negatively impacting our top-line growth. We're continuing to actively manage our capital in accordance with our operating environment in order to enhance cash flows and ultimately returns for our unit holders. With that, I will now turn things back over to Mark to wrap up.

Thanks, Stephen. We're proud to have released our latest ESG report this past quarter, which highlights our many accomplishments in 2023. Some of these are displayed on slide 18. For example, the fact that we invested $30.7 million in energy-saving resiliency and water efficiency projects in Canada in 2023, which represents an increase of nearly 50% from the $20.7 million spent in 2022. This will lead to lower utility costs for CAPRI and increased comfort for our residents, while also reducing the environmental footprint of our legacy properties. Affordable housing, also continues to be a key focus of our ESG strategy. And we've remained committed and active in our endeavor to help with the solution to the housing crisis in Canada. As Julie mentioned earlier, we're proud to say that all three buyers of the regulated properties we sold since Q1 were nonprofit organizations who will be able to maintain the affordability of those homes for substantially less than the cost of building new. In addition, Work remains ongoing with our peers through the Canadian Rental Housing Providers for Affordable Housing Initiative and its website foraffordable.ca which outlines all the ways in which we're advocating for changes in government policies and programs to address these important issues. We encourage all unit holders to visit that website and also our own to learn more about our ESG achievements and plans for the future. That brings me to slide 19. Our overarching objective revolves around enhancing earnings, and we're proud of the robust financial results and strategic performance which we've presented to you this morning. As a testament to that, and thank you to our valued unit holders, we're announcing an increase in our annualized rate of distribution to $1.50 per trust unit, effective for the August 2024 distribution and payable in September 2024. Moving forward, we remain focused on further optimizing and simplifying our business, especially with the upcoming sale of our MHC portfolio, which is expected to close in the fourth quarter of 2024. On that note, we're excited to continue to drive value and become an even better place to live, work, and invest in the quarters ahead. I would like to thank you for your time this morning And we would now be pleased to take your questions.