Automotive Properties REIT (TSX: APR.UN) is an unincorporated open-ended real estate investment trust focused on investing in high-quality automotive dealership properties in strategic Canadian urban markets. The primary objectives of the REIT are to provide Unitholders with stable, sustainable and growing cash distributions, and to enhance and expand the REIT’s asset portfolio in order to maximize Unitholder value.
The REIT’s portfolio currently consists of 76 income-producing properties, located on approximately 243 acres throughout metropolitan markets across British Columbia, Alberta, Saskatchewan, Manitoba, Ontario and Québec. The properties encompass approximately 2.8 million square feet of gross leasable area, and are occupied by retail automotive dealerships, service centres and ancillary businesses.
The automotive dealership businesses represent the largest, most recognizable global automotive brands ranging from mass market vehicle brands through to the ultra-luxury segment, with a focus on European and Asian brands.
Automotive Properties REIT’s tenants currently include: the Dilawri Group, AutoCanada Inc., Drive Auto Group, Go Auto, Mierens Automotive Group, and Pfaff Auto Group (Lithia Motors Inc.).
The Canadian automotive retail industry had sales of approximately $211 billion in 2023.
The automotive retail industry is Canada’s largest retail segment, accounting for approximately 27% of overall retail sales of products and merchandise in 2023.
Automotive Properties REIT’s portfolio is currently comprised of 76 income-producing properties, located on 243 acres of land, representing approximately 2.8 million square feet of gross leasable area, in long-term growth markets across Canada.
Overview
Automotive Properties REIT (TSX: APR.UN) offers investors exposure to a unique real estate asset class. The REIT is focused on owning and acquiring automotive dealership properties in long-term growth markets in Canada.
Canada’s automotive retail industry is characterized by strong industry fundamentals. It is the largest component of retail sales and merchandise in Canada, with $211 billion of industry sales in 2023¹ (27% of Canada’s overall retail sales of products and merchandise¹). In addition to robust sales performance, automotive dealerships have demonstrated strong profitability.
The REIT’s property leases are structured as triple-net leases under which the tenant is responsible for all costs relating to repair and maintenance, realty taxes, property insurance, utilities and all non-structural capital improvements. The REIT’s portfolio has a weighted average lease term of approximately 9.1 years (as at September 30, 2024) and leases include contractual rent increases, providing long-term organic growth.
These strong fundamentals and an attractive leasing profile support the stability of Automotive Properties REIT’s Unitholder distributions. The REIT currently pays monthly cash distributions to Unitholders of $0.067 per Unit, representing $0.80 per Unit on an annualized basis.
Strategy and Objectives
The primary strategy of the REIT is to create long-term value for Unitholders by generating sustainable tax-efficient cash flow and capital appreciation.
The primary objectives of the REIT are to:
provide Unitholders with stable, predictable and growing monthly cash distributions on a tax-efficient basis;
maximize long-term Unitholder value by enhancing the value of the REIT’s assets; and
expand the REIT’s asset base while also increasing adjusted funds from operations (AFFO) per unit.
Management intends to grow the value of the REIT’s real estate portfolio while also increasing AFFO per Unit through accretive acquisitions and steady growth in rental rates. The REIT is leveraging its strategic arrangement with its lead tenant, the Dilawri Group, Canada’s largest dealership owner, to acquire properties from the Dilawri Group that meet the REIT’s investment criteria. The REIT is also capitalizing on acquisition opportunities presented by other automotive dealership groups and owners that are interested in the recapitalization or sale of their business. Management is focused on acquiring properties that contribute to the REIT’s ability to generate stable, predictable and growing monthly cash distributions to Unitholders.
Since its initial public offering in July 2015, the REIT has completed 53 property acquisitions for a combined purchase price of more than $700 million.
1 Statistics Canada
Team
Milton Lamb
President and Chief Executive Officer
Mr. Lamb is the President and Chief Executive Officer of the REIT, a role he has served in since the IPO. Mr. Lamb has over 30 years of experience in the Canadian commercial real estate industry, with a track record of successful commercial real estate transactions, development projects and joint ventures totaling over $2.5 billion. Mr. Lamb has worked with the largest global real estate service companies including CBRE, Jones Lang Wootton (now known as JLL) and, most recently, Colliers International as Senior Vice President, a position he held from 2007 until becoming the REIT’s President and Chief Executive Officer in July 2015. Mr. Lamb became an employee of the REIT effective January 1, 2020 in conjunction with the internalization of the REIT’s management. During his tenure at Colliers International, Mr. Lamb was Chair of the National Investment Services from 2008 to 2013, and represented Canada on Colliers Global Investment Services and Colliers Investment Services Group (USA) for seven years. Mr. Lamb was formerly a director of NAIOP Toronto and Big Brothers Big Sisters Toronto, and is currently a mentor for NAIOP Developing Leaders.
Andrew Kalra
Chief Financial Officer
Mr. Kalra is the Chief Financial Officer and Corporate Secretary of the REIT and has over three decades of experience in finance, 15 years of which have centered on the automotive industry. Mr. Kalra joined the Dilawri Group in 2014 to serve as the Vice President, Finance. Mr. Kalra became an employee of the REIT effective January 1, 2020 in conjunction with the internalization of the REIT’s management. Prior to his tenure at the Dilawri Group, Mr. Kalra was with Mazda Canada as Senior Director of Finance and Business Strategy for 12 years. Previously Mr. Kalra held senior financial positions in public companies including Nortel Networks Inc. and Walt Disney Canada, as well as at a Canadian chartered accounting firm. Mr. Kalra holds a Bachelor of Commerce (Finance, Accounting and Economics) from the University of Toronto in Toronto, Ontario and a CPA, CA designation.
Kap Dilawri
Chair of the Board
Kap Dilawri is the Co-Founder and President of the Dilawri Group. For more than 30 years, Mr. Dilawri has been instrumental in growing the Dilawri Group from a single dealership in Regina to the largest automotive dealership group in Canada. Mr. Dilawri remains active in strategic initiatives and business operations of the Dilawri Group. In 2002, Mr. Dilawri co-founded the Dilawri Foundation, a charitable organization committed to giving back to Canada by supporting medical research, hospitals, children and their families
Patricia Kay
Trustee
Ms. Kay is a corporate director. Ms. Kay served as Senior Vice President, Dealer Finance – National Accounts at Bank of America Merrill Lynch from 1998 to 2019. She has over 40 years of banking experience in the commercial banking industry which includes 25 years focused on public and large private automotive retailers in the United States. Ms. Kay was instrumental in positioning Bank of America Merrill Lynch into its leading role serving the financial needs of the public auto retail sector. In the years preceding her retirement in 2019, she accumulated extensive expertise in the financial operations and capital structures of auto retailers. Prior to 1998, Ms. Kay served as a Vice President in Dealer Finance between 1993 and 1998, and a Vice President in Corporate Banking between 1980 and 1993, also at Bank of America Merrill Lynch. Ms. Kay holds an MBA from Indiana University and a Bachelor of Arts degree from Syracuse University.
Milton Lamb
Trustee
Mr. Lamb is the President and Chief Executive Officer of the REIT, a role he has served in since the IPO. Mr. Lamb has over 30 years of experience in the Canadian commercial real estate industry, with a track record of successful commercial real estate transactions, development projects and joint ventures totaling over $2.5 billion. Mr. Lamb has worked with the largest global real estate service companies including CBRE, Jones Lang Wootton (now known as JLL) and, most recently, Colliers International as Senior Vice President, a position he held from 2007 until becoming the REIT’s President and Chief Executive Officer in July 2015. Mr. Lamb became an employee of the REIT effective January 1, 2020 in conjunction with the internalization of the REIT’s management. During his tenure at Colliers International, Mr. Lamb was Chair of the National Investment Services from 2008 to 2013, and represented Canada on Colliers Global Investment Services and Colliers Investment Services Group (USA) for seven years. Mr. Lamb was formerly a director of NAIOP Toronto and Big Brothers Big Sisters Toronto, and is currently a mentor for NAIOP Developing Leaders.
Stuart Lazier
Trustee
Mr. Lazier is the Chairman of Northbridge Capital Inc., a private equity real estate investment company located in Toronto, Ontario. Mr. Lazier has over 40 years of experience as a leader in real estate management and investment. Prior to selling his interest in Fiera Properties to his public company partner, Fiera Capital, Mr. Lazier was a partner, co-founder and the Chief Executive Officer of Fiera Properties Limited, a Canadian real estate investment management company. As a partner at Fiera Properties, and a member of the Board of Directors, Mr. Lazier oversaw all corporate initiatives and operations for Fiera Properties. Between 2001 and 2009, Mr. Lazier co-founded and played a key role in building KingSett Capital, now one of Canada’s leading real estate fund management firms. Prior to KingSett Capital, for 14 years, Mr. Lazier was the Managing Partner of Canada’s leading independent real estate management services company, Enterprise Property Group. Mr. Lazier merged this company with O&Y Enterprise, managing over 110 million square feet of commercial real estate, and assets of more than $20 billion. Mr. Lazier has served his community as a board member and Chair of Covenant House Toronto, Chair of the Real Estate Committee for the Toronto United Way, Vice Chair of the Board of Governors at Upper Canada College, and Chairman of the Build Toronto Board of Directors. Mr. Lazier is currently a director of a number of other private companies and non-profit organizations. Mr. Lazier holds an MBA from the Richard Ivey School of Business at the University of Western Ontario.
James Matthews
Trustee
Mr. Matthews serves as Executive Vice-President of the Dilawri Group. Mr. Matthews previously served in the capacity of Chief Financial Officer of the Dilawri Group and other Dilawri Group companies since 2007, and as a member of the Management Board of the Dilawri Group. During his tenure with the Dilawri Group, Mr. Matthews has played a key role in acquisition transactions, business operations, developments and redevelopments, and financing activities. Previously, Mr. Matthews held senior positions with industry-leading companies including Chief Financial Officer of W.K. Buckley Limited, VP Finance with KIK Custom Products Inc. and Regional Controller for Rogers Communications Inc. (cablevision division). Mr. Matthews holds a Bachelor of Administration in Finance and Economics from the University of Western Ontario and a CPA, CA designation.
Julie Morin
Trustee
Ms. Morin is the Chief Financial Officer of Minto Holdings Inc., a family-owned real estate development company located in Ottawa, Ontario, a position that she has held since 2014. Ms. Morin is an experienced senior finance and accounting professional with over 25 years of experience specializing in public reporting. Ms. Morin was the Chief Financial Officer of Minto Apartment Real Estate Investment Trust from 2018 until 2023, where she had responsibility for Minto Apartment Real Estate Investment Trust’s overall financial strategy and management, including its financial reporting and long-range business planning as well as treasury and tax functions. Prior to joining Minto Holdings Inc. in 2014, Ms. Morin was corporate controller at Telesat Canada and, prior to that, she was vice president, finance at Brookfield Renewable Energy Group. She also spent ten years at Ernst & Young LLP. Ms. Morin was the 2020 recipient of CFO of the Year, awarded by the Ottawa Board of Trade and Ottawa Business Journal. Ms. Morin received her Bachelor of Commerce, Accounting from the University of Ottawa and is a Chartered Professional Accountant (CPA, CA).
John R. Morrison
Lead Independent Trustee
Mr. Morrison is a corporate director. Mr. Morrison is a past Trustee and Vice Chairman of Choice Properties Real Estate Investment Trust. Mr. Morrison has over 40 years of experience in the commercial real estate industry including as President and Chief Executive Officer of Choice Properties Real Estate Investment Trust from 2013 to 2018. Prior to serving in that role, Mr. Morrison was President and Chief Executive Officer of Primaris Retail Real Estate Investment Trust from 2009 to 2013. Mr. Morrison was President, Real Estate Management, at Oxford Properties Group and prior, a senior executive at OMERS. Mr. Morrison is a third term Trustee of ICSC and served as Chair in 2021. Mr. Morrison continues to serve on the Executive Board of ICSC. He is a past Director of the ICSC Foundation (U.S.) and Past Chair of the ICSC Foundation Canada. He is the founding Vice Chairman of the Urban Land Institute Toronto District Council and is past Chairman of the Toronto Metropolitan University Real Estate Advisory Committee. He currently serves on the Dean’s Advisory Board at the Ted Rogers School of Business at Toronto Metropolitan University in Toronto. Mr. Morrison also currently serves as a Director of Forum Real Estate Investment and Impact Fund. Mr. Morrison is an Institute-certified Director with the Institute of Corporate Directors.
