Mr. Jonathan Li reports

MINTO APARTMENT REIT REPORTS STRONG 2023 SECOND QUARTER FINANCIAL RESULTS

Minto Apartment Real Estate Investment Trust has released its financial results for the second quarter and six months ended June 30, 2023. The condensed consolidated interim financial statements and management's discussion and analysis (MD&A) for Q2 2023 and year to date 2023 are available on the REIT's website and on SEDAR+.

"The REIT's operational performance was strong in the second quarter, supported by our high-quality, urban portfolio and strong rental market conditions across all of our markets," said Jonathan Li, President and CEO of the REIT. "We realized gain-on-lease in excess of 16% for the third consecutive quarter, Same Property Portfolio2 NOI increased by 11.8%, Same Property Portfolio NOI margin expanded by 140 basis points and we achieved a favourable natural gas variance for the first time in a number of quarters. Importantly, excluding nonrecurring items, we achieved positive FFO and AFFO per unit growth as our variable-rate debt reduction initiatives are starting to positively impact our results. During the quarter we refinanced seven mortgages with long-term CMHC-insured fixed-rate mortgages which reduced our variable-rate debt exposure from 26% of Total Debt to 11%, a reduction of over $165 million. This also generated over $70 million of incremental proceeds we used to pay down our revolving credit facility ("Revolver") which is immediately accretive to FFO per unit. These initiatives only partially impacted Q2 2023 results, with the full increase to be realized in Q3 2023 and beyond."

"Looking ahead, we believe the fundamentals driving our business including Canada's robust immigration targets, a housing shortage and a lack of new supply, and affordability challenges of home ownership which drives people to the rental market, will continue to support NOI growth going forward. The REIT is very focused on translating that NOI growth into cash flow per unit growth. We believe that our recent decisions to terminate the purchase option on the Fifth + Bank property, waive on three attractive development opportunities with Minto Properties Inc. ("MPI"), and delay the construction start of the High Park Village intensification, demonstrate this focus. Finally, we continue to evaluate additional accretive initiatives including refinancing properties with maturing mortgages in early 2024 and capital recycling opportunities."

1 This news release contains certain Non-IFRS and other financial measures.

Q2 2023 Highlights

• Average monthly rent was $1,801, an increase of 6.6% compared to the second quarter ended June 30, 2022 ("Q2 2022"). Average monthly rent for the Same Property Portfolio2was $1,785, an increase of 6.3% compared to Q2 2022;
• Average occupancy of unfurnished suites increased to 97.0%, compared to 94.7% in Q2 2022;
• The REIT executed 495 new leases, achieving an average rental rate that was 16.2% higher than the expiring rents. As rental markets have continued to strengthen, the gain-to-lease potential on sitting rents increased sequentially to 16.1% from 15.3% at the end of Q1 2023;
• Revenue for the Same Property Portfolio was $36.7 million, an increase of 9.3% compared to Q2 2022; total revenue was $39.4 million, an increase of 11.0% compared to Q2 2022;
• NOI for the Same Property Portfolio was $23.1 million, an increase of 11.8% compared to Q2 2022; NOI was $24.6 million, an increase of 12.5% compared to Q2 2022;
• NOI margin for the Same Property Portfolio increased to 62.8%, compared to 61.4% in Q2 2022; NOI margin increased to 62.4%, compared to 61.5% in Q2 2022;
• Net loss and comprehensive loss was $43.0 million, compared to net income and comprehensive income of $183.5 million for Q2 2022;
• Normalized Funds from Operations ("Normalized FFO") were $13.9 million or $0.2125 per unit, a 1.2% increase over Q2 2022; Funds from Operations ("FFO") were $11.9 million, or $0.1817 per unit, compared to $13.7 million, or $0.2100 per unit, in Q2 2022;
• Normalized Adjusted Funds from Operations ("Normalized AFFO") were $12.2 million or $0.1860 per unit a 1.1% increase over Q2 2022; Adjusted Funds from Operations ("AFFO") were $10.2 million, or $0.1552 per unit, compared to $12.0 million, or $0.1840 per unit, in Q2 2022;
• Distributions per unit were $0.1225, an increase of 3.2% compared to Q2 2022 and representing an AFFO payout ratio of 78.9%; Normalized AFFO payout ratio was 65.9%;
• The REIT repositioned 33 suites across its portfolio in Q2 2023, generating an average annual unlevered return of 9.4%;
• The REIT reduced the amount of variable rate debt to 11% of Total Debt from 26% in Q1 2023, a reduction of $165,921;
• The REIT repaid both of its variable rate mortgages totalling $108.4 million with an average interest rate of 7.55% and replaced them with two CMHC-insured mortgages with fixed stated interest rates between 3.85% and 3.87% that mature in 2033;
• The REIT upward refinanced five maturing mortgages that generated incremental net proceeds of $73.8 million which was used to repay a portion of the REIT's revolving credit facility. The new CMHC-insured fixed rate mortgages bear interest at rates between 3.90% and 4.00% and mature in 2028 and 2033;
• Same Property Portfolio annualized turnover of 20.2% improved sequentially from 13.9% for Q1 2023 as it is a stronger leasing season, but was lower than 25.0% for Q2 2022 as tenants opt to stay in place due to tight rental conditions;
• On June 7, 2023, the REIT announced an agreement with MPI to terminate the REIT's option to purchase the Fifth + Bank property;
• On August 8, 2023, the REIT waived its right of first offer for three purpose-built rental development opportunities, presented by MPI, that would have been attractive assets for the REIT. The developments are located in the Oakridge neighbourhood of Vancouver in close proximity to the Cambie Corridor Planning Program, Mississauga in Toronto, and Danforth Village in Toronto. Additionally, the REIT waived on four other opportunities in Vancouver and Toronto during the previous three quarters; and,
• The REIT's management and its partner have decided to temporarily postpone the construction start of the High Park Village intensification, originally scheduled for the second quarter of 2024.

2 Same Property Portfolio consists of 29 multi-residential properties both wholly and jointly owned by the REIT for comparable periods in Q2 2023 and Q2 2022.

Q2 2023 Operating Results

Revenue in Q2 2023 totalled $39.4 million, an increase of 11.0% from $35.5 million in Q2 2022. The increased revenue in Q2 2023 primarily reflected higher average monthly rents, improved occupancy, and additional revenue from the two properties acquired during Q2 2022 (Niagara West and The International). Same Property Portfolio revenue was $36.7 million, an increase of 9.3% from Q2 2022, reflecting the higher average monthly rent and improved occupancy.

Average monthly rent at the end of Q2 2023 was $1,801, an increase of 6.6% compared to the end of Q2 2022. Average monthly rent for the Same Property Portfolio was $1,785 at the end of Q2 2023, representing a year-over-year increase of 6.3%.

Average occupancy was 97.0% in Q2 2023, compared to 94.7% in Q2 2022.

The year-over-year growth in average monthly rent and occupancy reflected continued strong rental demand in the REIT's markets.

Operating expenses were 8.5% higher (5.4% higher for the Same Property Portfolio) in Q2 2023 compared to Q2 2022, reflecting growth in salaries, repair and maintenance costs, and electricity. Inflationary pressures have moderated from their peak in 2022, and management is confident that its in-place strategies to contain controllable operating expenses will contribute to solid NOI growth.

NOI for Q2 2023 totalled $24.6 million, representing 62.4% of revenue, an increase of 12.5% compared to $21.8 million, or 61.5% of revenue, in Q2 2022. Same Property Portfolio NOI for Q2 2023 was $23.1 million, representing 62.8% of revenue, an increase of 11.8% compared to $20.6 million, or 61.4% of revenue, in Q2 2022. The increases in NOI and Same Property Portfolio NOI in Q2 2023 reflected higher revenue which outpaced increased operating expenses as noted above.

During Q2 2023, the REIT incurred a net $2.0 million of nonrecurring items which negatively impacted FFO and AFFO performance. These costs included debt retirement costs, the write-off of property investigation costs incurred in a previous year and severance costs, partially offset by insurance and property tax recoveries. The impact of these costs on NOI was immaterial. Adjusting for these nonrecurring items during the period, Normalized FFO was $13.9 million or $0.2125 per unit, a 1.2% increase over Q2 2022. Normalized AFFO was $12.2 million or $0.1860 per unit a 1.1% increase over Q2 2022.

FFO in Q2 2023 was $11.9 million, or $0.1817 per unit, compared to $13.7 million, or $0.2100 per unit, in Q2 2022. AFFO in Q2 2023 was $10.2 million, or $0.1552 per unit, compared to $12.0 million, or $0.1840 per unit in Q2 2022.

The REIT reported a net loss and comprehensive loss of $43.0 million in Q2 2023, compared to net income and comprehensive income of $183.5 million in Q2 2022. The variance was primarily attributable to non-cash, fair value losses on investment properties and Class B LP Units of $45.7 million and $6.7 million, respectively, in Q2 2023 compared to a non-cash loss of $2.3 million on investment properties and a non-cash gain of $172.8 million on Class B LP Units in Q2 2022. The fair value loss on investment properties in Q2 2023 reflected a slight expansion of capitalization rates across the portfolio, partially offset by growth in forecast NOI for the portfolio at large. The fair value loss on Class B LP Units in Q2 2023 reflected the increase in the REIT's unit price during the quarter.

The REIT paid cash distributions of $0.1225 per unit for Q2 2023, an increase of 3.2% compared to Q2 2022 and representing an AFFO payout ratio of 78.9%. Cash distributions of $0.1187 per unit were paid in Q2 2022, representing an AFFO payout ratio of 65.2%.

Gain-on-Lease, Gain-to-Lease Potential and Repositioning

The REIT signed 495 new leases in Q2 2023, realizing an average gain-on-lease of 16.2%, the third consecutive quarter in which realized gain-on-lease exceeded 16%. This resulted in an annualized incremental revenue gain of approximately $1.4 million. By comparison, the REIT realized gains on new leases of 12.1% in Q2 2022 and 16.9% in Q1 2023. The REIT realized significant double-digit gain-on-lease in all markets during Q2 2023. The Canadian urban rental market maintained its strong performance during the quarter, supported by increased immigration, the unaffordability of home ownership, increased acceptance of renting versus owning and, for the REIT's urban portfolio, a broad return to downtown living. Same Property Portfolio suite turnover was 20% on an annualized basis compared to 25% in Q2 2022.

Management estimates that the REIT held embedded gain-to-lease potential in its unfurnished suite portfolio of 16.1% as at June 30, 2023, representing future annualized embedded potential revenue of approximately $22.1 million. That compares to embedded gain-to-lease potential of 10.9% and an estimated annualized revenue growth opportunity of $14.0 million as at June 30, 2022, and 15.3% or $20.7 million as at March 31, 2023. As market rents continue to increase and turnover remains lower than seasonal norms, embedded gain-to-lease potential will also increase. Management expects that the REIT will be able to realize a significant portion of the gain-to-lease potential over the next number of years.

The REIT repositioned a total of 33 suites across its portfolio in Q2 2023, generating an average annual unlevered return on investment of 9.4%. The REIT has a total of 1,918 suites remaining to be repositioned under its current program. Due to the continued strength in the Canadian rental market, combined with decreasing vacancy and turnover, management currently expects to reposition 80 to 120 suites in 2023, a reduction from 259 in 2022.

Balance Sheet and Debt Refinancing Initiatives

During Q2 2023, the REIT executed on its accretive strategy of reducing variable-rate debt exposure by replacing variable-rate debt with long-term fixed-rate CMHC-insured financing. This reduced the amount of variable-rate debt to 11% of total debt from 26% in Q1 2023, a reduction of $165.9 million.

In April and June 2023, the REIT refinanced two variable rate mortgages totalling $108.4 million with interest rates of 7.44% and 7.70% and secured $113.4 million of CMHC-insured fixed-rate mortgages with interest rates between 3.85% and 3.87%3 that mature in 2033. In May 2023, the REIT refinanced five maturing mortgages totalling $137.4 million with interest rates between 2.98% and 5.34% with $218.6 million of new CMHC-insured fixed-rate mortgages with interest rates between 3.90% and 4.00%3 that mature in 2028 and 2033. The incremental net proceeds of $73.8 million generated from these seven refinancings were used to pay down the Revolver, which currently has an all-in interest cost of over 7.00%.

As a result of the above refinancings occurring in late Q2 2023, the REIT began to see moderation of interest costs at the tail end of the quarter, and expects to see the full effect of these savings through the second half of 2023 and beyond.

Subsequent to Q2 2023, the REIT refinanced Term Debt secured by an Ottawa property, generating $24.2 million of incremental debt proceeds that were used to further repay the credit facility.

In addition, the REIT is exploring upward refinancing three properties with mortgages maturing in early 2024 that have potential to generate between $55.0 million and $65.0 million dollars of incremental proceeds. We would expect to use these proceeds to repay a portion of the credit facility.

As of June 30, 2023, the REIT had total debt outstanding of $1.15 billion, with a weighted average interest rate on Term Debt of 3.21% and a weighted average term to maturity on Term Debt of 5.87 years.

The Debt-to-Gross Book Value ("GBV") ratio as at June 30, 2023 was 42.2%.

The REIT's net asset value ("NAV") per unit as at June 30, 2023 was $23.21, a decline from $24.00 as at December 31, 2022, primarily reflecting a fair value loss on investment properties of $59.2 million in YTD 2023. The fair value loss reflected a moderate expansion in cap rates across all geographies and increased capital expenditure reserve, offset by increased forecast NOI.

The REIT continues to maintain a strong financial position. Total liquidity was approximately $163.3 million as at June 30, 2023, with a liquidity ratio (total liquidity/total debt) of 14.2%.

3 These are nominal rates that do not include $1.8 million of interest rate prepayments made on several refinancings.

High Park Village Intensification Deferral

The REIT and its partner have decided to temporarily postpone the construction start of the intensification project at the High Park Village property. The intensification would add two towers and five townhomes comprising a total of 688 new suites and 344 new parking stalls to the existing site. The construction start was originally scheduled for Q2 2024. The rationale for this decision includes: i) Management is exercising prudence and discipline with its capital allocation decisions considering the future capital requirements of its existing development projects and existing convertible development loan commitments; ii) Defers approximately $75 million of future equity requirements related to the REIT's portion of the intensification project, which likely would be funded on its Revolver, which currently has a high cost of interest; and, iii) Retains optionality to restart the intensification project when capital market conditions, access to capital and cost of capital are more favourable. The intensification project remains an attractive investment opportunity and the REIT and its partner will continue to work through the pre-development phase to ensure that construction can commence expediently, if and when it is strategically appropriate.

Conference Call

Management will host a conference call for analysts and investors on Wednesday, August 9, 2023 at 10:00 am ET. To join the conference call without operator assistance, participants can register and enter their phone number on-line to receive an instant automated call back. Alternatively, they can dial 416-764-8688 or 1-888-390-0546 to reach a live operator who will join them into the call.

In addition, the call will be webcast live.

A replay of the call will be available until Wednesday, August 16, 2023. To access the replay, dial 416-764-8677 or 888-390-0541 (Passcode: 611404 #). A transcript of the call will be archived on the REIT's website.

About Minto Apartment Real Estate Investment Trust

Minto Apartment Real Estate Investment Trust is an unincorporated, open-ended real estate investment trust established pursuant to a declaration of trust under the laws of the Province of Ontario to own, develop, and operate income-producing multi-residential properties located in urban markets in Canada. The REIT owns a portfolio of high-quality income-producing multi-residential rental properties located in Toronto, Montreal, Ottawa, Calgary and Edmonton.

We seek Safe Harbor.