— Double-digit growth in Normalized FFO and AFFO per unit — OTTAWA, ON, Aug. 13, 2024 /CNW/ - Minto Apartment Real Estate Investment Trust (the "REIT") (TSX:MI) today announced its financial results for the second quarter and six months ended June 30, 2024 ("Q2 2024" and "YTD 2024", respectively). The Condensed Consolidated Interim Financial Statements and Management's Discussion and Analysis ("MD&A") for Q2 2024 and YTD 2024 are available on the REIT's website at www.mintoapartmentreit.com and at www.sedarplus.ca.1 "We generated continued growth in our key financial metrics in the second quarter, reflecting growth in average rents, steady occupancy, disciplined expense management and accretive capital allocation strategies. Normalized Same Property Portfolio NOI increased 7.5% compared to Q2 last year, while Normalized FFO and AFFO per unit rose by 15.4% and 18.7%, respectively, reflecting our continued efforts to translate NOI growth into cash flow per unit growth", said Jonathan Li, President and Chief Executive Officer of the REIT. "Canadian urban rental market fundamentals remain strong, and we continue to generate solid gain-on-lease from the embedded rent in our portfolio. We continue to pursue the upward refinancing of four Ottawa properties anticipated to have total incremental net proceeds of between $70 and $80 million that will be used to reduce the revolving credit facility. Through prudent and disciplined capital management, we have built substantial financial flexibility, positioning the REIT well going forward." Q2 2024 Highlights Same Property Portfolio ("SPP") revenue was $38.9 million, an increase of 4.8%, compared to the second quarter ended June 30, 2023 ("Q2 2023") driven by a 6.8% increase to unfurnished revenue, partially offset by a 12.8% decrease in furnished suite revenue from lower occupancy and a 27.4% decrease in commercial revenue from the Minto Yorkville retail vacancy. Total Portfolio revenue was $38.9 million, a decrease of 1.3% driven by lost revenue from the sale of properties in Ottawa and Edmonton. Average monthly rent was $1,939, an increase of 7.7% compared to Q2 2023; Average occupancy of unfurnished suites was 96.9%, similar to 97.0% in Q2 2023; SPP normalized operating expenses were flat compared to Q2 2023; The REIT executed 420 new leases, achieving an average rental rate that was 11.0% higher than the expiring rents. The gain-to-lease potential on sitting rents remains attractive at 15.7% as at June 30, 2024; SPP annualized turnover was 20.0%, in line with seasonal norms; SPP Normalized Net Operating Income ("Normalized NOI") increased 7.5% compared to Q2 2023 and SPP Normalized NOI margin was 64.0%, an increase of 160 bps from Q2 2023; Normalized Funds from Operations ("Normalized FFO") were $0.2452 per unit, an increase of 15.4% from $0.2125 per unit in Q2 2023; Normalized Adjusted Funds from Operations ("Normalized AFFO") were $0.2207 per unit, an increase of 18.7% compared to $0.1860 per unit in Q2 2023; Normalized AFFO payout ratio was 57.2%, a reduction of 870 bps compared to Q2 2023; Interest costs declined by 16.5% compared to Q2 2023, reflecting reduced variable-rate debt exposure; Net income and comprehensive income was $32.8 million, compared to a net loss and comprehensive loss of $43.0 million in Q2 2023; Debt-to-adjusted earnings before interest, taxes, depreciation and amortization ("Adjusted EBITDA") ratio decreased to 10.87x from 11.79x at year-end 2023, and Debt-to-Gross Book Value ratio decreased by 100 bps to 41.8%; On May 7, 2024, the REIT and Minto Properties Inc. ("MPI") amended the terms of The Hyland convertible development loan ("CDL"). The REIT's purchase option was extended to February 28, 2025 and the maturity of the CDL was extended to April 30, 2025. In addition, the 6% annual interest rate on the CDL was adjusted to be equal to the all-in interest rate the REIT pays on its revolving credit facility, subject to a maximum interest rate of 7.25% per annum and a minimum interest rate of 5.25% per annum; and Management continues to pursue upward refinancing of four Ottawa properties anticipated to have total incremental net proceeds of between $70 million and $80 million. Once funded, the incremental net proceeds will be used to reduce the revolving credit facility, which will reduce variable rate debt as a percentage of Total Debt to low single digits. Financial Summary ($000's except per unit and per suite amounts) Three months ended June 30, Six months ended June 30, 2024 2023 Variance 2024 2023 Variance Revenue from investment properties $    38,893 $    39,401 (1.3) % $    77,836 $    77,804 — % Property operating costs 7,606 8,051 5.5 % 14,593 15,494 5.8 % Property taxes 3,911 3,917 0.2 % 7,919 7,925 0.1 % Utilities 2,481 2,861 13.3 % 5,985 7,077 15.4 % NOI $    24,895 $    24,572 1.3 % $    49,339 $    47,308 4.3 % NOI margin (%) 64.0 % 62.4 % 160 bps 63.4 % 60.8 % 260 bps Normalized NOI $    24,895 $    24,616 1.1 % $    49,339 $    47,438 4.0 % Normalized NOI margin (%) 64.0 % 62.5 % 150 bps 63.4 % 61.0 % 240 bps Revenue - SPP $    38,893 $    37,111 4.8 % $    77,067 $    73,075 5.5 % NOI - SPP 24,895 23,110 7.7 % 48,935 44,422 10.2 % NOI margin (%) - SPP 64.0 % 62.3 % 170 bps 63.5 % 60.8 % 270 bps Normalized NOI - SPP $    24,895 $    23,154 7.5 % $    48,935 $    44,552 9.8 % Normalized NOI margin (%) - SPP 64.0 % 62.4 % 160 bps 63.5 % 61.0 % 250 bps Interest costs $      8,946 $    10,710 16.5 % $    18,441 $    21,378 13.7 % Net income (loss) and comprehensive income (loss) 32,790 (43,009) nmf2 13,996 (67,236) nmf2 Funds from Operations ("FFO") 16,649 11,925 39.6 % $    31,688 $    23,554 34.5 % FFO per unit 0.2535 0.1817 39.5 % 0.4826 0.3588 34.5 % Adjusted Funds from Operations ("AFFO") 15,040 10,188 47.6 % 28,467 20,121 41.5 % AFFO per unit 0.2290 0.1552 47.6 % 0.4335 0.3065 41.4 % Distribution per unit $    0.1262 $    0.1225 3.0 % $    0.2525 $    0.2450 3.1 % AFFO payout ratio 55.1 % 78.9 % 2,380 bps 58.2 % 79.9 % 2,170 bps Normalized FFO $    16,100 $    13,946 15.4 % $    31,017 $    25,661 20.9 % Normalized FFO per unit 0.2452 0.2125 15.4 % 0.4724 0.3909 20.8 % Normalized AFFO 14,491 12,209 18.7 % 27,796 22,228 25.0 % Normalized AFFO per unit 0.2207 0.1860 18.7 % 0.4233 0.3386 25.0 % Normalized AFFO payout ratio 57.2 % 65.9 %