TORONTO, ON / ACCESSWIRE / August 3, 2022 / Forum Real Estate Income and Impact Fund ('REIIF' or the 'Fund') announced its second quarter results and is on track to deliver strong performance for its unitholders in its first year.
REIIF was launched in December 2021 and is focused on acquiring impact-driven, institutional quality residential rental real estate providing long-term, inflation-hedged, and stable cash flows, with the opportunity for capital appreciation. REIIF's portfolio is located across Canada, with an emphasis on supply constrained markets that exhibit strong rental demand including Toronto, Vancouver, Ottawa, Montreal and Winnipeg.
Following REIIF's recent acquisition of 399 Stan Bailie (Winnipeg) in July 2022, the portfolio is comprised of approximately $290M of assets representing over 1,100 units, spanning over 400,000 square feet of residential gross leasable area across multi-family apartments, purpose-built student accommodation (PBSA) and co-living communities.
Initial Series F investors in REIIF have earned a time-weighted return of 6.2% to date through June 30, 2022, including a 4.5% distribution yield (3.75 cents/month)1. The returns to date are primarily driven by capital appreciation and strong rental rate growth. REIIF's Net Asset Value per unit is supported by third-party property appraisals and approved monthly by REIIF's board of trustees, the majority of which are independent of Forum Asset Management Inc. ('FAM').
'We are pleased with our progress to date, focused on delivering strong total returns for unitholders through this period of market volatility,' said Aly Damji, Managing Partner of Real Estate at FAM.
Rental revenue grew 25% quarter-over-quarter, as initial properties in the portfolio that were acquired with vacancy are leased.
'With 95.4% occupancy at the end of the second quarter, we remain on track for all of REIIF's properties to be substantially leased before the end of the year, driving net operating income and cash flow higher,' said Greg Spafford, Fund Head for REIIF. 'Further, through active asset management that includes increasing beds, units and amenities within our buildings, we can generate more revenue per square foot to create long-term value.'
REIIF's impact and environmental, social and governance ('ESG') initiatives are focused on reducing environmental footprint and increasing social engagement.
REIIF has established decarbonization plans for its 455 Abbott (Vancouver) and 1602-1604 Queen. (Toronto) properties, targeting near-term energy savings and a multi-year plan to achieve net zero operational greenhouse gas emissions. In the second quarter REIIF also submitted for its inaugural Real Estate Assessment, the investor-driven global ESG benchmark and reporting framework for listed property companies, private property funds, developers and investors that invest directly in real estate.
Balance Sheet Update
The Fund ended the quarter with a debt to assets ratio of 48.4% and over $30M of available liquidity. Further, nearly two-thirds of REIIF's debt is priced at fixed rates with a WATM2 of over 8 years.
'REIIF's strong balance sheet is supported by long-term, fixed rate mortgages insured through the Government of Canada's Canada Mortgage and Housing Corporation (CMHC), amongst the lowest cost debt capital available to real estate owners,' said Rajeev Viswanathan, Managing Partner and CFO at FAM.
Acquisition - 399 Stan Bailie, Winnipeg, Manitoba
On July 11th, REIIF added its fourth acquisition in 2022 and seventh acquisition since launching in December 2021. 399 Stan Bailie Drive, a 126-unit, multi-family asset built in 2021 and located in Winnipeg, Manitoba. The Winnipeg market continues to benefit from strong immigration as well as employment growth, trends that are expected to continue in the future.3
The asset was acquired fully occupied, with attractive in-place fixed-rate financing at 1.6% interest, making it a highly accretive acquisition for the Fund. Over the coming year, the asset will benefit from several ESG upgrades that will contribute to higher revenue, lower operating costs and greater social engagement, all of which will drive higher value.
For further details please refer to the second quarter 2022 REIIF report provided to current and prospective investors.
1 - The yield and total return is for the December 2021 Series F units and is no guarantee of future results. The distribution rate and total return received by a unit holder will differ based on the series of trust units in which a unit holder invests.
2 - Weighted average term to maturity (WATM) aggregates each loan's remaining years to maturity, weighted by the loan's principal balance outstanding over total indebtedness.
3 - Source: CBRE 'Assessment of Secondary Canadian Markets for Multifamily Investment', May 2022.
REIIF invests principally in institutional-quality, multi-family rental apartments, purpose-built student accommodations (PBSA), and co-living communities located in supply constrained markets in Canada. The Fund also strives to deliver a sector-leading impact and ESG-driven portfolio that will enhance yields and total returns while future-proofing the portfolio to ensure diversity and resiliency of income. For more information, please visit our website at www.forumreiif.ca.
About Forum Asset Management Inc.
Forum Asset Management Inc., the manager of REIIF, collectively with its affiliates, is an investor, developer and asset manager operating across North America for over 25 years. Our core purpose is to deliver Extraordinary Outcomes™ to our stakeholders. Our adaptable, agile and dynamic team is committed to sustainability and responsible investing, creating value that benefits the communities in which we invest.
Our investment focus includes real estate, private equity and infrastructure. The enterprise value of our assets under management currently exceeds C$1.7 billion. Our investments have attracted a number of top investors. We're proud to have delivered in the top tier of alternative asset returns since 2002, while positively impacting over 6,000 lives. Visit www.forumam.com.
Name: Rajeev Viswanathan, Managing Partner and CFO
Phone Number: 416-947-0389
The information contained in this news release is for informational purposes only; is not investment, financial or other advice; and is not intended to be used as the basis for making an investment decision. This news release does not constitute or form part of any offer or invitation to sell or issue, or any solicitation of any offer to purchase or subscribe for, any securities, nor shall any part of this news release form the basis of, or be relied on in connection with, any contract or investment decision in relation to any securities of REIIF. This news release does not constitute any form of commitment, recommendation, representation, or warranty on the part of any person. No reliance should be placed on the completeness of the information contained in this news release. This news release is not intended to be a comprehensive review of all matters concerning REIIF. Please visit www.forumreiif.ca for more information.
This news release may contain forward-looking information within the meaning of applicable Canadian securities laws. Often, but not always, forward-looking information can be identified by the use of words such as 'expect', 'intends', 'anticipated', 'believes' or variations (including negative variations) of such words and phrases, or states that certain actions, events or results 'may', 'could', 'would' or 'will' be taken, occur or be achieved. Such forward-looking statements reflect management's current beliefs and are based on assumptions made by and information currently available to FAMI. Readers are cautioned that these forward-looking statements are neither promises nor guarantees, and are subject to risks and uncertainties that may cause future results to differ materially from those expected including, without limitation, risks associated with general economic conditions; adverse factors affecting the real estate market generally or those specific markets in which REIIF holds properties; volatility of real estate prices; inability to access sufficient capital from internal and external sources and/or inability to access capital on favourable terms; currency and interest rate fluctuations and other risks. Although FAMI has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking information, there may be other factors that cause results not to be as anticipated, estimated or intended. There can be no assurance that such information will prove to be accurate, as actual results and future events could differ materially from those anticipated in such information. These forward-looking statements are made as of the date hereof and FAMI does not assume any obligation to update or revise them to reflect new events or circumstances save as required under applicable securities legislation.
SOURCE: Forum Asset Management
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