Nunavut landlord NP REIT makes payouts despite financial squeeze
“We are starting to see signs of improvements in the portfolio”
Northern Property Real Estate Investment Trust, one of northern Canada’s biggest landlords, was able to make payouts to investors this month despite a tough winter, the company said in financial statements for the first three months of 2014.
NP REIT owns more than 10,000 residential units and more than one million square feet of commercial space in the Northwest Territories, Nunavut and five provinces, including Alberta and British Columbia.
In Nunavut, the company owns 1,258 residential units and 197,804 square feet of commercial space.
One of their newest properties is a 39-unit building in Iqaluit built at a cost of $9.2 million, or $235,000 per unit, completed early in 2014 and expected to be fully leased within the next three months.
In the first quarter of 2014, NP REIT reported a slight drop in funds from operations, or “FFO,” due to higher utility costs caused by a severe winter across Canada, weaker sales at its hotels and executive suites, and high vacancy rates in Yellowknife and Fort McMurray.
“As we move into the spring and summer months, we are starting to see signs of improvements in the portfolio that should translate into better performance in the upcoming quarters,” Todd Cook, NP REIT’s president and CEO, said in a news release.
As a real estate investment trust, NP REIT must distribute its earnings every month to investors — called “unit holders.”
Its units trade on the Toronto Stock Exchange. As of May 15, there were trading at a price of 27.87 a unit, up slightly from the previous day.
For the first three months of 2014, the company was able to distribute about $12.6 million to unit holders, up slightly from the approximately $12.2 million it distributed after the same period in 2013.
In Nunavut, the company enjoys nearly full occupancy in its portfolio of rental units, with a vacancy rate of only 1.8 per cent.
But in the Northwest Territories, where the company owns 1,305 units, NP REIT’s vacancy rate, representing the proportion of vacant units that don’t generate any revenue, is 11.9 percent.
The company reports its highest vacancy rate — 14 per cent — for British Columbia, where NP REIT owns 2,587 residential units and 86,238 square feet of office space.
The company’s largest number of residential units is located in Alberta: 2,468 units.
And NP REIT’s largest amount of commercial space — 533,483 square feet — is located in the Northwest Territories.
(Disclosure: The company that owns Nunatsiaq News leases office space and staff housing from NP REIT in Iqaluit.)