Management believes CAPREIT's strong balance sheet and liquidity position will enable it to continue to take advantage of acquisition and property capital investment opportunities over the long term.
CAPREIT is achieving its financing goals as demonstrated by the following key indicators:
-- The ratio of total debt to gross book value as at March 31, 2013 improved to 47.62% compared to 50.11% for the same period last year;-- Debt service and interest coverage ratios for the four quarters ended March 31, 2013 improved to 1.53 times and 2.55 times compared to 1.40 times and 2.25 times, respectively, for the same period last year;-- At March 31, 2013, 93.3% (March 31, 2012 - 96.4%) of CAPREIT's mortgage portfolio was insured by the Canada Mortgage and Housing Corporation ("CMHC"), excluding the mortgages on CAPREIT's manufactured home communities land lease sites, resulting in improved spreads on mortgages and overall lower interest costs than conventional mortgages. Since Q1 2012, on certain recent acquisitions CAPREIT assumed conventional mortgages, resulting in a decrease of CAPREIT's mortgage portfolio insured by CMHC compared to the same period last year. Management expects to convert these mortgages to CMHC-insured mortgages in due course;-- The effective portfolio weighted average interest rate on mortgages has steadily declined from 4.45% as at March 31, 2012, to 3.83% as at March 31, 2013, which will result in significant interest rate savings in future years;-- Management expects to raise between $575 million and $625 million in total mortgage renewals and refinancings in 2013.
Property Capital Investment Plan
During the three months ended March 31, 2013, CAPREIT made property capital investments (excluding disposed properties, head office assets, tenant improvements and signage) of $20.2 million as compared to $12.7 million for the same period last year. For the full 2013 year, CAPREIT expects to complete property capital investments of approximately $160 million to $170 million, including approximately $67 million targeted at acquisitions completed in 2011 and 2012 and approximately $13 million in high-efficiency boilers and other energy-saving initiatives.
Property capital investments include suite improvements, common areas and equipment, which generally tend to increase NOI more quickly. CAPREIT continues to invest in energy-saving initiatives, including boilers, energy-efficient lighting systems, and water-saving programs, which permit CAPREIT to mitigate potentially higher increases in utility and R&M costs and significantly improve overall portfolio NOI.
As at May 7, 2013, CAPREIT has committed under two separate purchase agreements to acquire a portfolio of multi-residential buildings in Toronto and in Calgary for approximately $81.6 million expected to be satisfied through mortgages aggregating to approximately $37.2 million with an average term to maturity of 4.7 years, with the remaining balance funded from CAPREIT's Acquisition and Operating credit facility.
More detailed information and analysis is included in CAPREIT's unaudited condensed consolidated interim financial statements and MD&A for the three months ended March 31, 2013, which have been filed on SEDAR and can be viewed at www.sedar.com under CAPREIT's profile or on CAPREIT's website on the investor relations page at www.capreit.net.