Alignvest Student Housing REIT Update

During the market turmoil at the beginning of the pandemic, real estate investments were hit disproportionately hard as investors looked to liquidate long term investments in hard assets in favour of the obvious survivors, most notably in the tech sector.

With the vaccine rollout, a return to relative normalcy is hopefully on the horizon. We expect universities will continue in-person activities and high-quality accommodations will continue to be in demand, creating a favourable environment for the Alignvest Student Housing REIT.

Last year there was real concern that students were only going to be online learning from home and miss out on the campus experience. What the Alignvest managers found was that students continued to want to reside in university cities with their peers, regardless of the university's teaching approach (online, hybrid, in-person). The tenancy makeup is 25% foreign students and 75% domestic. Student housing has proven its resiliency with occupancy for 2020 and into 2021 at 90.1% and rent collection at over 98% and remaining strong. Enrolments at tier-1 Canadian universities continue to increase year-over-year.

Currently the REIT owns 8 properties with 3,394 beds in five tier-1 university markets across Canada; 3 in Waterloo, 2 in Ottawa, 1 in Hamilton, Oshawa & Edmonton.

Through refinancing at more favourable rates on 3 of the existing properties, the managers raised enough equity capital to acquire 2 new properties in Waterloo with another 800 beds in a pending deal expected to close soon.
The fund pays out an attractive 5.5% annual yield to unitholders through quarterly distributions.

Please read the Alignvest Student Housing REIT December Management Report to learn more about the Manager's views and strategic thinking. 

The full report can be found here:

A note from Wynn

The Alignvest Student Housing REIT is held in both the "Alternatives/Volatility Protection" and the "Aspirational" asset allocation buckets of our portfolios.

Student Housing is an Alternative investment that is less liquid and longer term in nature. For giving up this liquidity, we expect to achieve above average returns over a normal business cycle of 5 to 7 years. 

As an investment considered to be non-correlated to the main markets, it gives volatility protection against market downside.

As an investment that we expect to hold for a longer period of time for a higher return, it fits into our aspirational investment sleeve.  

Aspirational investing is done with greater intention for higher impact, diversification and ultimately higher returns. It also has a higher risk profile. 

This time of year we have many updates from our investment partners to share with you. If you would like more in-depth information about Alignvest or any other investment(s), please let us know. 

Warm regards,

Wynn A. Harvey BBA, CIM, CPCA, CDFA
Director, Wealth Management
Portfolio Manager, Investment Advisor
Tel.: 416.572.5530 • TF: 1.866.775.7704 • F: 416.864.9888
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