RioCan Announces Strong Third Quarter Results - Continuous Operational Strength with 4.6% Commercial Same Property NOI Growth and 98.4% Retail Occupancy
Executive Summary
- RioCan reported a net loss per unit of $0.41 for Q3 2025, an improvement of $0.73 versus the prior year, driven by $242.8 M net valuation losses offset by strong Same‑Property NOI growth and asset disposals.
- Leasing performance was robust: new leasing spread 44.1% (vs 24.2% YoY) and blended leasing spread 20.8% (vs 14.2% YoY); retail occupancy held at 98.4%.
- Liquidity stood at $1.1 B, with a $200 M Series AP senior unsecured debenture issued post‑quarter to refinance revolving credit facilities; Adjusted Spot Debt/EBITDA improved to 8.80×.
Key Details
- Financial Highlights (Q3 2025 vs. Q3 2024)
- FFO per unit – diluted: $0.46 (unchanged YoY).
- Net income (loss) per unit – diluted: $(0.41) vs. $0.32 last year.
- Net book value per unit: $24.19 vs. $25.16 prior year.
- Adjusted Spot Debt/Adjusted EBITDA: 8.80× (down from 9.12×).
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Liquidity: $1,133 M (up from $1,694 M at Dec 31 2024 due to asset disposals and debt refinancing).
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Leasing Metrics
- New leasing spread: 44.1% (YoY +20 pts).
- Blended leasing spread: 20.8% (YoY +6.6 pts).
- Renewal leasing spread: 15.2% (YoY +2.6 pts).
- Retail occupancy (committed): 98.4% (up 20 bps YoY).
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Leasing activity: 1.0 M sq ft total, including 0.8 M sq ft renewals; 52% of renewals at market rates.
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Operating Performance
- Commercial Same‑Property NOI growth: 4.6% YoY.
- Adjusted G&A expense as % of rental revenue: 3.7% (down from 4.1%).
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Average net rent for new leases (9 mo): $29.58/ft² (28.9% premium vs. existing average $22.94/ft²).
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Capital Recycling & Development
- Asset dispositions (Q3) totalled $349.9 M; nine‑month disposals $310.1 M, including sale of 50% interests in five RioCan Living properties.
- Residential condominium closings: 1,056 units closed YTD; construction loan fully repaid; debt reduced by $10.8 M (Q2 2025).
- Capital repatriated YTD: $476.2 M (target $1.3‑1.4 B for 2025‑26).
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Development completions: 202 k sq ft (3 mo) and 247 k sq ft (9 mo), split between mixed‑use (≈85%) and pure retail projects.
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Financing Activity
- Issued $200.0 M Series AP Senior Unsecured Debentures, coupon 4.417%, maturity Oct 1 2032; proceeds used to reduce revolving credit balances.
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Total contractual debt as of Sep 30 2025: $7.30 B (unsecured $4.84 B, secured $2.46 B).
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Valuation Adjustments
- Net Valuation Losses for Q3 2025: $242.8 M (investment properties $148.2 M + RC‑HBC LP losses $94.6 M).
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RC‑HBC LP investment fully written off; ongoing recovery efforts disclosed in MD&A.
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Liquidity & Balance Sheet
- Cash & cash equivalents: $108.1 M (up from $92.3 M prior quarter).
- Undrawn revolving unsecured operating line of credit: $960 M.
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Unencumbered assets: $9.24 B (up from $8.14 B YoY).
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Outlook (2025)
- FFO per unit – diluted guidance: $1.85‑$1.88.
- FFO payout ratio target: ~62%.
- Commercial Same‑Property NOI growth target: ≈3.5%.
Notable Quotes
“This was an exceptional quarter operationally, highlighting the momentum generated by RioCan’s platform, processes, and people… As we simplify our business, we free up capital that will be reinvested in our core retail portfolio, amplifying growth now and in the future.” – Jonathan Gitlin, President & CEO
Materiality: Material – Positive (significant quarterly performance metrics, guidance updates, and financing actions).