Crombie REIT Announces Second Quarter 2025 Results and Distribution Increase

Executive Summary

• Crombie Real Estate Investment Trust reported its second quarter ended June 30, 2025, highlighting record committed occupancy for the third consecutive quarter and growth in key financial metrics.
• The company announced a distribution increase to $0.90 per Unit per year (effective August 31, 2025) and received a credit rating upgrade from Morningstar DBRS to BBB stable trend.
• Operational highlights include a 6.4% increase in property revenue, 10.8% rent growth on renewals, and significant portfolio optimization through acquisitions and dispositions.

Key Details

• Financial Performance (Q2 2025 vs Q2 2024):
  • Property Revenue: $123.8M (+6.4%)
  • Operating Income Attributable to Unitholders: $36.4M (+24.2%)
  • Funds From Operations (FFO) per Unit: $0.34 (+6.3%)
  • Adjusted Funds From Operations (AFFO) per Unit: $0.30 (+7.1%)
  • Same-Asset Property Cash NOI: $81.5M (+2.8%)
• Distribution Update:
  • Annual distribution increased by $0.01 per Unit to $0.90 per Unit (from $0.89004).
  • Effective for Unitholders of record on August 31, 2025.
• Credit Rating:
  • Morningstar DBRS upgraded credit rating to BBB stable trend (previously BBB(low) positive trend).
• Operational Metrics:
  • Committed Occupancy: 97.2% (up 80 bps YoY).
  • Economic Occupancy: 96.4% (up 50 bps YoY).
  • Renewals: 270,000 sq ft renewed at rents 10.8% above expiring rates; weighted average rent for renewal term up 11.9%.
  • New Leases: 64,000 sq ft added at an average first-year rate of $24.52/sq ft.
• Portfolio Transactions:
  • Acquisitions: Purchased four grocery-anchored retail properties in Rest of Canada (146,000 sq ft) for $21.2M; acquired development land in Halifax via land swap valued at $11.5M.
  • Dispositions: Sold one 140,000 sq ft office property in Rest of Canada for gross proceeds of $8.5M.
  • Joint Venture Sale: Sold 100% interest in The Marlstone development to a JV partnership for gross proceeds of $66.9M (includes full assumption of construction facility); Crombie retains 50% ownership.
• Development & Modernization:
  • Invested $6.9M in modernizations during the quarter.
  • The Marlstone (291-unit residential project in Halifax) is under construction with completion expected in H1 2026; ownership shifted from 100% to 50% via the JV sale.
• Balance Sheet & Liquidity:
  • Available Liquidity: $677.7M.
  • Debt to Gross Fair Value: 42.0%.
  • Debt to Trailing 12 Months Adjusted EBITDA: 7.84x.
  • Weighted Average Interest Rate: 4.1%.

Notable Quotes

• "Crombie's second quarter results reflect the strength of our necessity-based portfolio and the disciplined execution of our team... We achieved record committed occupancy for the third consecutive quarter, grew property revenue by 6.4%, and delivered year-over-year growth in FFO and AFFO per Unit." — Mark Holly, President and CEO