Canadian Apartment Properties Real Estate Investment Trust

questions if you'd like to participate in the q a you can do so by pressing before we begin let me remind everyone that during our conference call this morning In 2024, we sold 385 million of non-core apartments in Canada, 715 million non-core and ancillary divestments generated a combined $2.6 billion in gross proceeds.

part of that capital to pay down $401 million in total credit facility debt, which strengthened our balance sheet. We also reinvested $670 million into the acquisition of strategically aligned, purpose-built apartment properties in Canada, and a further $327 million into our value-enhancing NCIB program. In the case of our property dispositions, we've been selling at prices that are at or above previously reported fair value, which we believe validates our reported net asset value. We have then been buying recently constructed rental buildings at strong pricing per square foot that is significantly below replacement cost, while also investing in our own high-quality platform and business through trust unit buybacks. at prices that represent steep discounts to NAV. We're very pleased with this progress, especially in an environment that continues to face uncertainty and ever-changing financial and capital market conditions. If you turn to slide five, you will see the significant ground we've covered on divesting from fragmented business segments and reinvesting into our core residential portfolio in Canada. As we entered 2024, approximately 15% of our consolidated portfolio comprised investments that are ancillary to our main business as a provider of Canadian rental apartment properties. We are proud to have reduced that to only 6% as of year end. We have also identified a minority portion of our apartment portfolio in Canada that we consider non-core. based on a variety of risk-return factors driving relative underperformance. We're reducing this exposure and continuing to target the disciplined sale of these older legacy properties. In turn, we're increasing our allocation towards recently constructed rental properties that will enhance the diversification of our portfolio and strengthen our long-term earnings profile. Being able to purchase these newer buildings at significant discounts to replacement cost means that the development is still prohibitive. And moving forward, we'll be pursuing the ongoing execution of our proven repositioning strategy. Regarding the rest of our rental apartments in Canada, these remain core to our business. We have a unique pan-Canadian portfolio of primarily regulated properties that typically have lower turnover and higher mark-to-market increases, combined with a smaller allocation toward more recently constructed, generally unregulated apartments, which tend to have the inverse in turnover and rental uplift trends. These diversified components together provide an optimal runway of long-term growth and stability in returns. which positions us well to withstand short-term swings in market dynamics. I will now turn it over to Julian to further expand on our capital allocation program.

Thanks, Mark. Slide 7 shows you the significant progress we've made on our portfolio repositioning effort, not just in 2024, but over the course of the past couple of years. As of December 31, 2024, we had 15% of our total portfolio represented by recently constructed rental properties, and this is up from only 5% just five years ago. Over the same period, we reduced our exposure to ancillary segments to 6%, as Mark mentioned, down from 17% as of December 31st, 2019. Slide 8 contains the $385 million worth of our non-core legacy dispositions completed in Canada in 2024. These older properties have relatively higher CapEx burdens and operating costs, along with a host of other attributes that ultimately made them candidates for disposition. Importantly, this past year we were pleased to have transferred $124 million of our rental apartments to the hands of several nonprofit organizations that are focused on maintaining the affordability of these homes in perpetuity. In addition, we just announced the closing of our 717 suite portfolio sale to the City of Montreal's Affordable Housing Initiative for $103.8 million. Contributing to the alleviation of Canada's housing crisis is a key priority for us, and transferring more of our well-maintained, quality buildings to organizations and programs established to preserve safe, affordable, and enjoyable residential housing for Canadians is one of the ways in which we can help with the solution. We are equally as pleased to be supporting the Canadian housing ecosystem through the investment of our capital into newer purpose-built rental properties. Slide nine showcases how much of that we did in 2024. Constructed over the course of the last few years by reputable developers, these On Strategy apartment buildings are situated in the hearts of our highest performing Canadian regions that boast the most robust long-term fundamentals. These properties were largely stabilized upon acquisition at relatively affordable rent levels and optimal mark-to-market potential, and they come with a diverse and sophisticated resident base, superior energy efficiency, and low capital investment requirements. If you turn to slide 10, we've provided a snapshot of our latest capital reallocation activity. We just announced the acquisition of these two recently constructed rental apartment properties in Western Canada for an aggregate $97.6 million. alongside two non-core dispositions for $96.8 million in combined gross proceeds. These mid-market rental properties fit perfectly into our targets of portfolio positioning and we're acquiring them at an age where they provide an ideal balance of embedded value and growth potential with affordable rents averaging in the high $2 per square foot range. These transactions demonstrate that we're continuing to sell our non-core legacy properties at prices that are at or above previously reported fair values, while also being able to purchase well-located, high-quality buildings at meaningful discounts to replacement costs. Our capital allocation plan works and we're looking forward to further upgrading the quality of our platform in Canada in 2025. As much as we've been reiterating the merits of our strategy, as well as substantiating the value of our trust through our non-core dispositions, which we're completing at premium pricing, we're further demonstrating our conviction through accretively investing in our own portfolio via our NCIB program. Summarized on slide 11, we spent approximately $300 million in trust unit buybacks in the fourth quarter alone from mid-November onward at prices that were on average 20% below our year-end NAV of approximately $56. Despite all the macroeconomic, political, and capital market uncertainties impacting the sector, we believe this speaks to the confidence which we have in our business, our strategy, and the long-term fundamentals of the multi-residential industry in Canada. With that, I will now turn the call back over to Mark. Thanks, Julian.