Message from Management
After the favorable 2020 results, AIE REIT is focused on growth in 2021. It was a strong start to the year with two purchases in Campbell River totaling $9.6M for 59 additional units. The equity portion of these purchases were financed primarily with available cash from 2020 financing initiatives. On May 12, 2021 AIE REIT completed a $11.4M equity raise through its exclusive agent, Integral Wealth. These funds have been earmarked for two acquisitions, both of which are still pending and subject to AIE REIT’s due diligence: The first purchase is for a 33- unit multi-family property in Courtenay. The other is a 75-unit multi-family property in Nanaimo with infill development potential. AIE REIT is pleased to potentially establish a foothold in Nanaimo.
Distributions increased in line with the NAV per unit to 10.77 cents, up from 9.975 cents in 2020. Note that all distributions in 2020 were considered a return of capital, which is advantageous from a tax perspective. This was due to AIE REIT’s capital cost allowance exceeding its taxable income – a benefit which is passed through to unitholders.
Management continues to believe in the fundamentals of investing in Vancouver Island and is focusing on growing the portfolio by taking advantage of low interest rates and our operational efficiencies in our core markets. If you are aware of a larger real estate acquisition opportunity in the Duncan to Campbell River region – let us know.
Portfolio Overview – March 31, 2021
- Residential vacancy was effectively 0% for the last three months.
- Commercial vacancy was at 8.6% as of March 31,2021.
Capital and Acquisition Update
- AIE REIT’s cash balance after completing the equity raise is at $10.5M, with the full $8M line of credit available.
- The acquisition pipeline is robust including 2 properties under contract:
- 33-unit multi-family building in Courtenay
- 75-unit multi-family building in Nanaimo
- Mortgage financing will be raised on the above mentioned properties.
May Rent Collection
- Less than 1% of residential rents are outstanding due to late payments and/or COVID-19 related deferrals.
- Rent was received for 17 of 17 commercial tenants in May.
- A quarterly distribution of 10.77 cents per Unit was made in April.
- The next quarterly distribution is expected to be made in July, for unitholders on record on June 30, 2021.
(1) As of March 31, 2021.
(2) AFFO Payout ratio is a non-IFRS measure used to evaluate the Trust’s ability to cover its distributions.
(3) An annualized return based on a single unit investment in the AIE REIT, inclusive of unit price changes and distributions.
These materials are not to be distributed, reproduced or communicated to a third party without the express written consent of All Island Equity REIT. These materials should be read in conjunction with the Trust’s Offering Memorandum dated March 15, 2021, including the risk factors identified therein. This letter has been provided for general information purposes only and is not intended to be a solicitation to purchase Units of AIE REIT or advice regarding the suitability of the investment for specific investors. This letter contains forward-looking statements. These statements relate to future events or the Trust’s views or predictions of possible future performance, operations, acquisitions and strategy based on assumptions and expectations which may not prove to be accurate. Such forward-looking statements involve risks, uncertainties and other factors, including the impact, severity and duration, of COVID-19, which may cause actual results, performance or achievements of AIE REIT to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. For more information on these risks and uncertainties, you should refer to the Trust’s most recent Offering Memorandum. Any opinions expressed herein are effective as at the date of the letter. Management does not undertake to notify the reader of any subsequent change of circumstance or opinion unless required by law. Past results are not indicative of future performance. There is no assurance that the properties acquired by the Trust will perform as expected. NAV and AFFO are not measures recognized under IFRS and does not have standardized meaning prescribed by IFRS. The Trust’s calculation of NAV, AFFO, and Annualize Returns may differ from other REITs.