Montreal apartment - Le Hill-Parkl

Minto acquires Montreal apartment for $80 million

Monday, October 25, 2021

Minto Apartment REIT announced it has entered into an agreement to purchase a 20-storey Montreal apartment for $80 million in addition to funding the construction of a nine-storey development in Ottawa. It also announced a share offering, which could raise up to $86 million in new equity to help fund these and other activities.

The Montreal apartment: Le Hill-Park

Le Hill-Park is a 261-suite building located at 4530 Chemin de la Côte-des-Neiges in downtown Montréal, in close proximity to the Université de Montréal, McGill University, three major hospitals, and the Côte-des-Neiges metro station. Average sitting rents at Le Hill-Park are approximately 20 per cent below current market rents resulting in potential revenue growth as tenants vacate suites and they are re-leased. There is also a significant repositioning opportunity as only 72 of the 261 suites have undergone a modernization program, potentially providing an additional upside of approximately 20-25 per cent upon completion of renovation. Le Hill-Park is also located close to the REIT’s existing Rockhill, Haddon Hall and Le 4300 properties, providing for potential future operating synergies. Following the acquisition of Le Hill-Park, the REIT will have ownership interests in a total of 1,793 suites in the Montréal market, representing approximately 22 per cent of the fair market value of its portfolio. The acquisition of Le Hill-Park is expected to close on or about December 7, 2021.

Ottawa development

The rezoning of Beechwood to permit the development of approximately 229 residential units and 6,000 square feet of retail space was completed in Q3 2021. The project is being developed by Minto Properties Inc. and construction is expected to commence in Q1 2022. The REIT has committed to providing up to $51.4 million in financing for this project through a convertible development loan. As of June 30, 2021, $9.2 million of the commitment had been advanced and additional advances will be made as construction progresses. Upon stabilization, expected in Q4 2023, the REIT has the option to purchase this project at a 5 per cent discount to its then appraised fair market value.

Meanwhile, construction is progressing at Phase I of Lonsdale Square, which is being developed by a 50-50 joint venture between MPI and a subsidiary of Darwin Properties Limited. The project will comprise 113 residential suites and 7,800 square feet of retail space upon completion. The excavation of the site is complete, and formwork has commenced.

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