Morning, everyone, and welcome to the 2020 Annual and Special Meeting of the unitholders of Minto Apartment Real Estate Investment Trust. My name is Roger Greenberg, and I'm the Chair of the Board of Trustees for the REIT. I am pleased to preside over this meeting today. This meeting is being held entirely by virtual means through a live webcast. We welcome everyone in attendance today.
Our decision to hold a meeting by virtual means this year was made in light of the current COVID-nineteen pandemic, public health concerns, the current state of emergency in Ontario, government recommended and required limits on public gatherings and to assist in the protection of the health and safety of our unitholders, employees and other stakeholders. A recording of this webcast will be posted to our website for a period of time after the meeting. I would like to first begin by introducing Michael Waters, our Chief Executive Officer and one of our trustees and John Moss, General Counsel and Corporate Secretary, who are joining us today. I'm also pleased to introduce each of the members of our current Board of Trustees in attendance on our webcast today: Allen Kimberley Heather Kirk Jacqueline Moss Simon Nialasse and Philip Orsino. Before we commence with the formal part of the meeting, I would like to first acknowledge the remarkable efforts of the team at Minto Apartment REIT over the last year and in particular during the pandemic period, which we are currently experiencing.
The Minto REIT team quickly mobilized to introduce additional staff. On behalf of the Board and all unitholders, I would like to thank everyone in the Minto Apartment REIT Organization for their dedication, resilience and commitment during this unique time. I would also like to thank those unitholders who have chosen to attend this webcast today and to all those who submitted their proxies in advance on a timely basis. For our meeting, we intend to proceed with the following formal items on the agenda, following which there will be a brief presentation by Mr. Waters on behalf of management.
The first item of business is a presentation of the financial statements and auditors report for the year ended December 31, 2019. The second item of business is the election of the trustees. The third item of business is the reappointment of KPMG LLP as Minto Apartment REIT's auditors. The 4th item of business is the approval of the amendment to Section 6.2 under the REIT's amended and restated declaration of trust relating to the REIT's operating policies. And the 5th item of business is the approval of the amendment to Section 6.1 under the REIT's amended and restated declaration of trust relating to the REIT's investment guidelines.
Please note that today's meeting may contain statements made by the REIT's officers and trustees, which are forward looking statements for the purposes of applicable securities law. Forward looking statements are not assurances of future performance and are subject to risks and uncertainties that are difficult to control or predict. The actual results, performance or achievements of The REIT and its business may be materially different from the anticipated results, performance or achievements expressed or implied by forward looking statements. Unitholders should consult the more detailed discussion of the risk factors relating to the REIT and its business in our most recent annual information form and management's discussion and analysis. Forward looking statements are based on the officers' and trustees' beliefs and opinions, and undue reliance should not be placed on any forward looking statements.
The REIT does not undertake to update or supplement any forward looking statements unless required to do so by applicable law. Finally, before we begin, we have a few administrative matters to note in light of today's virtual meeting format. Typically, registered unitholders and appointed proxies who wish to vote would be required to attend the meeting in person. Instead, voting during today's meeting will be conducted through this online platform. When we are ready to table an item of business for a vote, you will see voting options appear on your screen.
If you have voted in advance of the meeting and do not wish to revoke your previously submitted proxies, then you do not need to do anything at this time. Another manner in which this virtual meeting will be different is with respect to questions. Questions will be accepted through this online platform. To submit a question, click on the Q and A messaging icon on your computer screen. When submitting a question, please identify whether it relates to a motion being considered as part of the formal business of the meeting or whether it is general in nature.
We will address questions directly related to a particular motion at the appropriate time of the meeting and save general questions until after the formal business section of the meeting has been completed. Questions with common themes may be grouped together for efficiency. John Mas, our General Counsel and Corporate Secretary, will read the questions aloud when requested, and either I or a member of the management team will respond. We will make every effort to answer all of your questions during today's Q and A period. However, in the interest of time, we will limit that portion of the meeting to 15 minutes and we'll address any unanswered questions in a timely manner afterwards.
With the consent of the meeting, I will act as Chair of the meeting and I will ask John Maas, our General Counsel and Corporate Secretary to act as Secretary and Broadridge Financial Solutions Inc. By its representatives to act as scrutineer. I now call the meeting to order. I've been advised that on April 27, 2020, the notice and access notice together with a form of proxy were mailed to each unitholder of record as of April 7, 2020, the record date for the meeting, advising that the notice of meeting and management information circular are available online. We received an affidavit of mailing from Broadridge Investor Communications Corporation, and I ask that the secretary keep a copy of it with the minutes.
I've been provided with a scrutineers report indicating that a quorum is present. As such, I declare that this meeting has been duly convened and constituted for the transaction of the business for which it has been called. When a formal report of the scrutineers available, it will be kept within minutes of the meeting. Only unitholders of record at the close of business on April 7, 2020, or their proxies are entitled to take part in and vote at this meeting. Each trust unit and special voting unit represented at this meeting is entitled to one vote.
In order to make the best use of our time today, certain individuals have been asked to move and second various motions. This is not intended to limit in any way your right to participate in the meeting. Unitholders who wish to make comments relating to these motions may do so through the online platform after the motion has been seconded in the manner previously noted. As noted earlier, there will also be an opportunity to ask general questions. During the meeting, we may also pause from time to time to review messages from the corporate secretary as we coordinate from a distance.
Thank you very much for your patience as we do so. We will now proceed to the first item of business for the meeting and present the financial statements for the year ended December 31, 2019. A copy of the financial statements was previously made available to unitholders. Unitholders do not have to take any action regarding the financial statements, but if any unitholder has questions relating to the statements, I would suggest that they be asked later in the meeting during the question and answer period. The second item of business is the election of trustees.
The REIT currently has 7 trustees whose term of office will expire at the end of this meeting, and the number of trustees to be elected at this meeting is 7. Each of the current trustees is a nominee for election. The management information circular provides detailed biographies setting out the valuable qualifications and diverse backgrounds of the trustee nominees proposed. In addition to me, the nominees for election are Alan Kimberly, Heather Kirk, Jacqueline Moss, Simon Nialasse, Philip Orsino and Michael Waters. If elected, these nominees will hold office until the next annual meeting of unitholders or until his or her successor is elected or appointed.
I am pleased to report that based on proxies received by the scrutineer in advance of the meeting, each trustee nominee received favor from at least a majority of votes cast. We will now consider the election of trustees. To facilitate the introduction of the nominees, we refer you to the slide on the webcast. I declare the polls open on all resolutions. John, are there any questions or comments submitted in connection with the nomination and election of trustees?
Yes, Roger. We have one comment that we've been asked to raise. At the shareholders meeting last year, the shareholder raised a question about the audit committee that only 2 independent members of the Board were identified with audit skills in the management information circular. That means that Ms. Kirk was a member of the audit committee without the requisite squills, which in my view was not proper governance.
Governance matters matter sorry, governance matters to me, and I hope the Board does not just pay lip service to the concept. The most direct solution, in my view, is to appoint another independent director with such skills. I see in the current management information circular that Ms. Kirk has now identified as having audit skills? Did she take any specific education in the last year to gain this competence?
Or having served 1 year on the committee, is that considered having gained competence? Or did the Board just alter the definition of competence to avoid the question I asked last year?
I'm going to ask Michael Waters to respond to that question, please.
Thank you. Ms. Kirk has more than 20 years of experience as an investment banker and as an equity research analyst. And on top of that, she served as the Chief Financial Officer of a public company in our sector. I think that those credentials or experience on top of her formal education credentials more than amply equip her with the financial literacy and expertise to serve on the audit committee.
I'm satisfied that what she has in terms of skill set is more than sufficient.
Thank you, Michael. I concur with your opinion as well. John, are there any other questions? Or is that the only one?
No, Roger. There are no further questions related to this item.
Okay. Thank you. As mentioned, I've taken the liberty of asking certain unitholders to make the motions for the election of trustees and other motions today. I will now ask Paul Baron to move and Joanne Taylor to second the formal motion for the nomination of the 7 nominees as trustees of the REIT.
Mr. Chair, I so move.
Mr. Chair, I second the motion.
Thank you, Joanne. I've been advised that no other nominations have been made in accordance with the advance notice provisions under the REIT's declaration of trust. Accordingly, I declare the nominations closed. As required by the rules of the Toronto Stock Exchange, the REIT has adopted a majority voting policy relating to the election of the trustees. Details regarding the policy are provided in the management information circular.
Under the policy, a trustee is required to tender his or her resignation if he or she receives more withhold votes than votes cast for his or her election. Based on the proxies received for the election of trustees, if elected, none of the nominees would have tendered their resignation under the policy. Accordingly, I will now ask Paul Baron to move and Joanne Taylor to second a formal motion for the election of each of the 7 persons nominated as trustees of the REIT to hold office until the next annual meeting of unitholders or until they resign or their successes are elected or appointed.
Mr. Chair, I so move.
Thank you, Joanne.
I will now ask registered unitholders and proxy appointees to cast their votes through the online portal. As a reminder, if you have already voted or sent in your proxy, there is no need for you to do anything unless you wish to change your vote. Thank you for casting your votes. The scrutineers will tabulate the votes cast and we will report on the results towards the end of the meeting. The 3rd item of business is the appointment of KPMG LLP as auditors of the REIT and the authorization of the trustees to fix their remuneration.
The trustees, on the recommendation of the audit committee, proposed that KPMG LLP be appointed as the audit of the REIT until the next annual meeting of the unitholders or until their successor is duly appointed and that the trustees be authorized to fix their remuneration. John, are there any questions or comments submitted in connection with the appointment of the auditors?
No, Roger. We have not received any questions related to this item.
Okay. Thank you, John. I will now ask Paul Baron to move and Joanne Taylor to second a formal motion for such appointment and authorization.
Mr. Chair, I so move. Thank you, Paul.
Mr. Chair, I second the motion.
Thank you, Joanne. We will now vote on the motion. If you have not already done so, I will ask registered unitholders and proxy appointees to cast their votes through the online portal. Thank you for casting your votes. The scrutineers will tabulate the votes cast and we will report on the results towards the end of the meeting.
The 4th item of business is the amendment of Section 6.2C of the REIT's operating policies under the REIT's amended and restated declaration of trust to increase the maximum aggregate value of the investments of the REIT in properties under development after giving effect to the proposed investment from 10% to 20% of the REIT's gross book value. A full description of the amendment and the reasons the REIT believes it is in the best interest to seek such amendment is set out in the REIT's management information circular. John, are there any questions or comments submitted in connection with this item?
No, Roger. We have not received any questions related to this item.
Thank you, John. I will now ask Paul Baron to move and Joanne Taylor to second a formal motion that a special resolution be passed in a form attached as Schedule B to the management information circular and also shown on your computer screens authorizing the REIT's trustees to amend the REIT's declaration of trust operating policy set out in Section 6.2 to increase the maximum aggregate value of the investments of the REIT in properties under development after giving effect of the proposed investment to 20%.
Mr. Chair, I so move.
Thank you, Paul.
Mr. Chair, I second the motion.
Thank you, Joanne. We will now vote on the motion. If you have not already done so, I will ask registered unitholders and proxy appointees to cast their votes through the online portal. Thank you for casting your votes. The scrutineers will tabulate the votes cast and will report on the results towards the end of the meeting.
The 5th item of business is the amendment of Section 6.1 of the REIT's investment guidelines under the REIT's amended and restated declaration of trust to increase the maximum aggregate book value of the investment of the REIT in mortgages and similar instruments after giving effect to the proposed investment from 15% to 20% of the REIT's gross book value. A full description of the amendment and the reason the REIT believes it is in the best interest to seek such amendment is set out in the REIT's management information circular. John, are there any questions or comments submitted in connection with this item?
No, Roger. We have not received any questions related to this item.
Thank you, John. I will now ask Paul Baron to move and Joanne Taylor to second a formal motion that a special resolution be passed in a form attached as Schedule C to the management information circular and also shown on your computer screens authorizing the REIT's trustees to amend the REIT's declaration of trust investment guideline set out in Section 6.1 to increase the maximum aggregate book value of the investments of the REIT in mortgages and similar instruments after giving effect to the proposed investment to 20% of the REIT's gross book value.
Mr. Chair, I so move.
Thank you, Paul.
Mr. Chair, I second the motion.
Thank you, Joanne. We will now vote on the motion. If you have not already done so, I will ask registered unitholders and proxy appointees to cast their votes to the online portal. Thank you for casting your votes. Scrutineers will tabulate the votes cast and we will report on the results towards the end of the meeting.
Ladies and gentlemen, this brings us to the end of the voting on the items of business before this meeting. And I therefore declare the polls closed. Thank you for casting your votes. I'm pleased to report that on the election of the trustees, the voting results show that each trustee nominee received votes in favor from a majority of votes cast. Accordingly, I declare that the proposed trustee nominees have been duly elected as trustees of Minto Apartment REIT to hold office until the next annual meeting of unitholders or until they resign or their successors are duly elected or appointed.
On the appointment of auditors, the voting results show that a majority of the votes cast were in favor of the reappointment of KPMG LLP as auditors of the REIT. I declare that KPMG LLP are reappointed auditors of Minto Apartment REIT and the trustees are authorized to fix the auditors' remuneration. On the amendment to the REIT's operating policy, more than 2 thirds of the votes cast were voted in favor of the amendment. I declare this motion to be passed. On the amendment to the REIT's investment guideline, more than 2 thirds of the vote cast were voted in favor of the amendment.
I declare this motion to be passed. The final voting results will be available after the meeting and posted to the REIT's SEDAR profile at www.sedar.com. If there are no further business, I will now ask Paul Baron to move and Joanne Taylor to second a formal motion to terminate the meeting.
Mr. Chair, I so move.
Thank you, Paul.
Mr. Chair, I second the motion.
Thank you, Joanne. I declare the motion carried and the meeting terminated. Now that the formal part of the meeting has been concluded, I would like to welcome CEO, Michael Waters to make a brief presentation on behalf of management. Michael?
Thank you, Roger, and good morning, everyone. I'm sorry we can't meet in person this year, but I'm pleased that you've all taken the time to join us virtually. Before we begin, I want to remind listeners that certain statements about future events made in this presentation are forward looking in nature. As Rogers noted earlier, any such information is subject to risks, uncertainties and assumptions that could cause actual results to differ materially. Please refer to the cautionary statements on forward looking information in The REIT's most recent MD and A and Annual Information Form for more information.
Also, please note that I will reference certain non IFRS financial measures. Although management believes these measures provide useful supplemental information about the REIT's financial performance, they're not recognized measures and do not have standardized meanings under IFRS. Please see the REIT's MD and A for additional information regarding non IFRS financial measures, including reconciliations to the nearest IFRS measures. I would also like to provide an update on COVID-nineteen. The COVID-nineteen pandemic has had a profound impact on our communities and our residents and staff.
We've worked hard to respond rapidly to the crisis, making a number of adjustments to our processes and operating procedures to protect the health and safety of our residents and team. I'd like to personally thank all of the members of the Minto Apartment Re team for their dedication, resilience and commitment during this difficult time. I'd also like to express my sympathy to our unitholders, residents and staff who've been adversely impacted by COVID-nineteen. I'll speak a little bit more about the impact of COVID-nineteen later in the call. I'm sure many of you have questions about this and we look forward to discussing it in detail during the Q and A session as well.
Moving to the next slide. 2019 was the 1st full year of operations for Minto Apartment REIT following our initial public offering in July of 2018. I'm pleased to say it was also a very successful one. Let me take you through a few sorry, let me take you through a few of the highlights. Most importantly, we delivered strong operational and financial results as we capitalized on robust rental market conditions across our markets.
Net operating income margin was 62.5% in 2019, an increase of 100 basis points compared to 2018. We increased our monthly distributions by 7.3% during the year, reflecting our continued growth and strong cash generation. And net asset value per unit increased 17.2% in 2019 to $20.56 per unit, reflecting growth in net operating income that resulted from successful execution of our strategy. The strong performance was achieved through both internal and external growth initiatives. Internally, we benefited from gain to lease activities and suite repositioning.
We signed more than 1400 new leases of unfurnished suites in 2019, which resulted in significant rent growth in those suites. And we renovated a total of 2 19 suites, which improved asset quality, drove stronger revenue and reduced future repair costs. I'll speak more about both of these initiatives shortly. Externally, we acquired ownership interest in 6 properties, boosting our suite count by 2 thirds to 7,243 suites. Our acquisitions were in Montreal, Toronto and Calgary, all major urban markets that we targeted for growth and that have provided us with increased portfolio diversification.
Montreal represented a new market for the REIT, one that we had targeted due to its very attractive rental dynamics. We also capitalized on our proprietary relationship with the Minto Group. 2 of our 6 property acquisitions came about as a direct result of that strategic alliance. In addition, we are participating in an attractive redevelopment project in Ottawa through this relationship. Finally, our growth was supported by 2 equity issues that generated combined proceeds of $417,000,000 Both offerings were oversubscribed and we are obviously pleased to see investors demonstrating strong support for our business and strategy.
Moving to slide 21. You can see how strong our growth has been on a quarter by quarter basis. We have materially increased revenue and net operating income in every quarter of The REIT's existence as we continue to execute on our strategy. The increase in net operating income has contributed to an increase of 17.2% in the REIT's net asset value per unit in 2019. The bottom part of this page highlights the growth in distributions and total assets that we achieved in 2019.
This was accompanied by a reduction in leverage as debt to gross book value declined to 39.3% at the end of the year from 45% a year earlier. We're committed to maintaining prudent leverage while growing revenue, earnings, assets and distributions. The current economic crisis is highlighting the importance of having strong liquidity and a solid balance sheet and we have both. Our total liquidity at the end of March was nearly $200,000,000 Slide 22 highlights the significant growth we generated from gain to lease activities in 2019. We signed 1424 new leases of unfurnished suites in the year following suite turnover.
The average rent on these suites increased by 12.9 percent from $14.48 a month to $16.37 a month. As a result, the REIT generated an annualized incremental revenue gain of approximately $2,900,000 You can see on that chart that our rent increases in Toronto, Ottawa and Montreal markets were exceptional. Demand for suites in those markets has been extremely strong. Turning to slide 23, I now want to talk about repositioning. Those photos show a couple of repositioned suites so you can get a feel of how attractive they are once we finish our work on them.
We renovate both suites and common areas to drive rent growth. These investments generate strong returns with an average simple return on investment target of 8% to 15% depending on the suite type. As mentioned earlier, we repositioned 2 19 suites during the year. It's important to note that we carefully manage the rate of suite repositioning in order to balance the short term earnings dilution with the accretion in net asset value. Slide 24 shows that we still have a lot of value to create from repositioning.
At the end of December 2019, we had 2,110 suites left to renovate across several of our properties: Minto Yorkville, Leslie York Mills, High Park Village, Carlisle, Castle Hill, Rock Hill and our Edmonton portfolio. In addition, we're currently working on test suites at the Haddon Hall and L4-300 properties in Montreal, which we acquired last year. Formal repositioning programs for 450 unmutivated suites at those two properties will be rolled out once we finalize the specifications. Turning to our external growth strategy on slide 25. These are the 6 properties we acquired in whole or in part during 2019.
The quarters in Calgary, Leslie York Mills and High Park Village in Toronto and Rock Hill Haddon Hall and La 4,300 in Montreal. Each of these properties is an attractive urban location close to transit and community amenities and they provide us with significant repositioning and intensification potential to drive further growth in revenue and net operating income. In total, we acquired interest in 2,890 suites during the year for a cumulative purchase price of $685,000,000 Slide 26 shows the geographic diversification we've generated as a result of our strategic acquisitions. We now have properties in 5 of Canada's 6 major rental markets. The acquisitions have expanded our presence in the very strong Toronto and Montreal rental markets, while reducing our overall portfolio risk.
Slide 27 shows the degree to which our portfolio has transformed since the IPO. Ottawa properties accounted for almost 60% of fair value at the time of the IPO. That figure has declined to 40% today as we've expanded our exposure to other major markets. I'm particularly pleased with our position in Montreal, which was a priority for us at the time of our IPO. We've gone from 0 exposure there at that time to 1532 suites today, representing about 20% of the portfolio's overall fair value.
Another important element of our growth strategy is intensification development, which I'll cover on slide 28. We've advanced financing to an affiliate of Minto Properties for 5th and Bank, a purpose built rental project in Ottawa's attractive Glebe neighborhood. A former commercial property is being replaced with a mixed use multi residential rental and retail property. We were able to participate in the project because of our strategic alliance with the Minto Group and we will have an exclusive option to purchase the property upon stabilization at 95% of the appraised fair value. You can see on the lower photo that construction at 5th and Bank is well underway.
The demolition of the former structure is now complete and site excavation installation of tiebacks is nearing completion. In addition to 5th and Bank, we are seeking development approvals for intensification at the Ridge Grove and Leslie York Mills properties and rezoning approval for intensification at High Park Village. If all required approvals are obtained, these projects could add more than 1200 suites to our portfolio. Turning now to Slide 29, I'd like to conclude by briefly discussing our business outlook. Obviously, our short term priority is managing through the COVID-nineteen pandemic.
We've taken important steps to mitigate the spread of the coronavirus at our properties, supporting the health and safety of our residents, employees and business partners. These measures include closure of all common areas, increased sanitization of shared spaces and asking employees to work from home wherever possible. We're also adapting our leasing and marketing strategies to capture demand in these challenging market conditions. One important tool we're using is online contactless leasing. When suite visits are necessary, they are now appointment only.
We've made some other important adjustments to our operations. We've deferred major capital expenditures until later in the year unless they're required for the health and safety of our residents or necessary for the operation of a building. And suite repositioning was put temporary on hold to the government restrictions in Ontario and Quebec which are now being eased. We are continuing to manage We are continuing to manage the REIT's liquidity very carefully to ensure that we can continue to meet our financial obligations for the foreseeable future. As I noted earlier, our liquidity position is strong and we plan to keep it that way.
And we're preparing plans for all of our staff to return safely to work. I want to note that our rent collections have not been significantly impacted by COVID-nineteen to date. We've provided rent deferral programs to a small number of residents and we're continuing to generate positive gain to lease during this crisis in all of our markets except Alberta, which is struggling with the oil price decline. This public health crisis will eventually subside. As it does, our focus will be to continue executing on our strategy.
We plan to generate further organic growth through gain to lease and repositioning activities and external growth through strategic acquisitions. We also expect that our strategic alliance agreement with the Minto Group will continue to be an important source of growth for the REIT as it has been since our IPO. This growth could come through the intensification of existing sites or by accessing the group's pipeline of assets and development opportunities. In short, we plan to continue doing more of what we've been doing. Our strategy has worked extremely well since the creation of the REIT and we think it will continue to provide significant shareholder value in the future.
Thank you again for joining us today. This has been an unusual annual meeting to say the least, but we're grateful for the opportunity to speak with you. I think you can see why we believe Mitchell Apartment REIT is in a very strong competitive position and is poised for long term success. We're now pleased to answer any questions that you may have with respect to the REIT, its financial statements and its operations during the year. John, are there any questions?
Yes, Michael. We've been asked what is the forecast occupancy date for the units in Skyline Nepean that were destroyed by fire and are being rebuilt.
Construction on those 32 suites is progressing well and is nearly complete. We should be ready to start occupancy beginning in the middle of June. Are there any other questions, John?
There are no other questions, Michael.
Well, thank you. If there are no further questions, I'd like to thank everyone for attending this meeting and for your support of the REIT. We look forward to seeing you again next year.
The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.