Automotive Properties REIT (TSX: APR.UN) is an unincorporated open-ended real estate investment trust focused on investing in high-quality, income-producing properties tenanted by leading automotive and OEM dealership and service businesses in strategic Canadian urban markets. The primary objectives of the REIT are to provide Unitholders with stable, sustainable and growing cash distributions, while continually enhancing the REIT’s asset portfolio to maximize Unitholder value.
The REIT’s portfolio currently consists of 79 income-producing properties, located on approximately 260 acres throughout metropolitan markets across British Columbia, Alberta, Saskatchewan, Manitoba, Ontario and Québec. The properties encompass approximately 3.0 million square feet of gross leasable area and are primarily occupied by automotive and OEM dealership and service businesses.
The REIT’s automotive and OEM dealership and service tenants represent the largest, most recognizable global brands in their respective industries.
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.).
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 and OEM dealership and service 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 $219 billion of industry sales in 2024¹ (27% of Canada’s overall retail sales of products and merchandise¹). In addition to robust sales performance, automotive dealership and service centres have demonstrated strong profitability.
The majority of 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. Certain properties within the portfolio are net leases, which share many of the same characteristics as triple-net leases, but the REIT is responsible for certain structural improvements. The REIT’s portfolio has a weighted average lease term of approximately 9.0 years (as at December 31, 2024) and all leases include fixed or CPI-linked rent escalators, providing for consistent revenue 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 automotive 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 / OEM sales and service businesses that are interested in recapitalization solutions. Management is focused on acquiring properties that contribute to the REIT’s ability to generate attractive, stable monthly cash distributions to Unitholders.
Since its initial public offering in July 2015, the REIT has completed 56 property acquisitions for a combined purchase price of more than $750 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.
