Northern Property Real Estate Investment Trust (NP REIT) (TSX:NPR.UN) eased its exposure to residential holdings in western resource markets with the purchase of True North Apartment (TSX:TN.UN) and a 4,650-suite rental apartment portfolio from Starlight Investments Ltd.
The $3 billion deal, announced August 10, creates Canada’s third largest residential apartment REIT.
“This is a rare opportunity to expand the diversification and scale of the REIT,” said Todd Cook, NP REIT president and CEO. “We looked at it as it arose and decided that it was a good use of our capital. The benefits of a national plan, diversified portfolio, were overwhelming and it is the right thing for our unitholders.”
The deal also allows NP REIT to expand into eastern Canadian markets from its base in stumbling western resource towns such as Fort St. John and Dawson Creek in northeast B.C. and Fort McMurray, Alberta, where it is the among the largest landlords.
Fort St. John and Dawson Creek have seen a sharp increase in rental vacancy rates this year following a decision by major natural gas companies and BC Hydro, which is starting construction of the Site C power project, to keep thousands of workers housed in remote work camps.
Following the acquisitions, Northview Apartment REIT would own nearly 25,000 residential suites in eight provinces and two territories and a nationwide property asset with approximately 800 employees operating out of its head office in Calgary and regional offices across Canada. The largest number of suites would be in Ontario, with 8,235.
As part of the transactions, NPR will change its name to Northview Apartment Real Estate Investment Trust to reflect the new national character of its portfolio.
