UPDATE 2-Boardwalk REIT cautiously begins raising rents

* REIT is slowly raising rents in Alberta apartment market

* Average monthly rent slips, but occupancy rises in Q1

* FFO per unit of C$0.55 vs C$0.58 year ago
(Adds detail, adds dateline)

By Ka Yan Ng

TORONTO, May 18 (BestGrowthStock) – Boardwalk REIT (BEI_u.TO: ) is
slowly and selectively raising rents in key markets and paring
back on offered incentives for its apartments as the Canadian
economy improves, the real estate investment trust said on
Tuesday.

The average monthly rent in the trust’s rental apartment
portfolio for the quarter slipped to C$973 ($936) per suite,
compared with C$979 a year ago, Boardwalk said.

But Boardwalk said it was pleased that it had achieved its
primary goal of increasing occupancy through the slower
economic period, raising its average occupancy to 96.9 percent
from 94.7 percent. It has nearly 36,000 units in its portfolio,
with most located in Alberta.

“We continue to monitor our markets on a constant basis,
adjusting rents and incentives with an agility and market
sensitivity,” said Chief Executive Sam Kolias on a conference
call.

“With higher occupancy and improved economic conditions
helping to stabilize rental revenues, we’re moving away from
incentives, especially in the Alberta market.”

The REIT also said an estimated C$142 billion in oil sands
investment will also help sustain long-term growth in the
province, while neighboring Saskatchewan, also rich in
resources, is a growing market.

There are signs of rental demand but Boardwalk said it was
not yet in a hurry to hike rents across the board as it looks
for solid evidence that the domestic and global economic
recovery is fully entrenched.

The REIT, which generates more than half its rental revenue
from Alberta, also said renting may also become a more
affordable option for its prospective and current tenants as
interest rates and home prices rise.

For instance, in Calgary and Edmonton, the two major cities
in Alberta, the price of a single-family home has increased
more than 10 percent from a year ago, while mortgage rates have
also been on the rise.

Late on Monday, Boardwalk reported lower-than-expected
funds from operations, a key measure of performance for real
estate companies, partly as a result of the dilutive effect of
holding higher levels of low-return cash. [ID:nWNAB1655]

It reported FFO of C$29 million, or 55 Canadian cents a
unit, down slightly from C$30.8 million, or 58 Canadian cents a
unit, a year earlier.

The REIT had available cash of about C$168 million at the
end of the quarter, and with its committed revolving credit
facility, it has a total current liquidity of C$366 million.

Boardwalk said it was comfortable with its cash position
and stood ready to use it, though acquisition opportunities
were scarce at the moment.

“It’s all about and always has been about flexibility and
choice,” Kolias said.

Boardwalk units were up 0.2 percent at C$42.15 on the
Toronto Stock Exchange in early afternoon.

Investment Advice

($1=$1.04 Canadian)

(Additional reporting by Shrutika Verma in Bangalore;
Editing by Frank McGurty)

UPDATE 2-Boardwalk REIT cautiously begins raising rents