Canada's largest apartment landlord has a new plan for 2024: Get smaller.

Toronto-based Canadian Apartment Properties REIT, a real estate investment trust that owns approximately 64,300 units across Canada and the Netherlands, plans to continue to look for properties to sell this year even as it will continue buying some.

"Our newest strategy revolves around getting better instead of getting bigger," Mark Kenney, chief executive of the REIT known as Capreit, in a conference call with analysts Friday.

The real estate investment trust sold $408 million in property assets in Canada in 2023 but also bought $304 million in properties in the country.

Capreit also is focusing on adding newer-vintage apartments to its portfolio. In 2017, only 1% of the REIT's Canadian portfolio was newly built, but that figure increased to 12% by the end of 2023.

In the country's tight rental market, Capreit said its domestic portfolio was 98.8% occupied for the period ended Dec. 31. That was down just a tick from 98.9% a year earlier.

Apartment rents continued to climb, with the average rent across its Canadian portfolio at $1,516 per month at the end of 2023, up from $1,401 a year earlier. Kenney told analysts that unit turnover is falling because tenants stay in their apartments, often covered by rent control, as rates continue to rise.

Rentals.ca reported this month that asking rents for apartments in Canada hit a record high in January 2024, increasing 10% annually to an average of $2,196.

Canada Mortgage and Housing Corp. reported last month that tenant turnover nationally dropped to 12.5% in 2023 from 13.6% in 2022. Vacated units commanded average increases in rent of 31% in Toronto and 27% in Vancouver, an uptick that saw many renters opt to stay put.

Part of the market for the REIT's aging assets are government agencies looking for affordable housing, and Kenney and other landlords have said they are interested in selling to such buyers, noting the cost to build those assets would be higher than what public agencies would pay to buy them.

"The housing situation is so profound now. Never in my career have I seen a situation where people have nowhere to go," Kenney said during the call.

Calgary-based Boardwalk also reported earnings this week, noting that supply remains constrained as construction costs continue to rise.

With 62% of its portfolio located in non-rent controlled Alberta and the province seeing record migration from other regions, Boardwalk saw the average monthly rent for its portfolio climb to $1,375 for the period ended Dec. 31. That was up from $1,246 a year earlier.

Occupancy at Boardwalk REIT also climbed to 98.91% at year-end from 97.99% a year earlier.

"Our largest markets of Edmonton and Calgary continue to see large net inflows from both international and interprovincial migration as new residents pursue exceptional relative affordability, lifestyle and economic opportunities, Sam Kolias, chairman and chief executive of the REIT, said in a statement. "We anticipate this trend to continue in 2024. New construction has not kept pace with strong population growth in markets across Canada, which will take several years to return to balance."

While the REITs are dealing with low tenant turnover, Michael Markidis, an analyst with Bank of Montreal, said it wasn't currently a problem for investors.

"The average new leasing spread has exceeded 25% for four consecutive quarters," said Markidis. "Over this same time frame, the trailing 12-month turnover has slipped by 350 basis points to 12.9%."