Granite REIT Announces 2025 Second Quarter Results, the Closing of $49.5 Million of New Acquisitions, and the Issuance of Its 2024 Global ESG+R Report

Executive Summary

• Granite Real Estate Investment Trust reported its condensed consolidated combined financial results for the three and six months ended June 30, 2025, showing increases in Net Operating Income (NOI), Funds from Operations (FFO), and Adjusted Funds from Operations (AFFO) compared to the prior year.
• The Trust completed the acquisition of two income-producing distribution facilities in Coral Springs, Florida, for approximately $49.5 million, which are 100% leased with a weighted average remaining lease term of 6.6 years.
• Granite raised its 2025 outlook, forecasting FFO per unit of $5.75 to $5.90 and AFFO per unit of $4.90 to $5.05, driven by lease renewals, new leasing activity, and the recent Florida acquisitions.

Key Details

• Q2 2025 Financial Highlights (Three Months Ended June 30, 2025):
  • Net Operating Income (NOI): $123.4 million (up from $116.8 million in Q2 2024).
  • Same Property NOI - Cash Basis: Increased 4.6% (excluding foreign exchange impact).
  • Funds from Operations (FFO): $85.4 million ($1.39 per unit) vs. $83.5 million ($1.32 per unit) in Q2 2024.
  • Adjusted Funds from Operations (AFFO): $75.1 million ($1.23 per unit) vs. $73.8 million ($1.17 per unit) in Q2 2024.
  • Net Income Attributable to Unitholders: $95.0 million vs. $76.2 million in Q2 2024.
  • AFFO Payout Ratio: 69% (vs. 70% in Q2 2024).
  • Occupancy: 95.8% as of June 30, 2025; Committed occupancy is 96.5% as of August 6, 2025.
  • Net Leverage: 36% as of June 30, 2025.
  • Fair Value Gains: Recognized $16.8 million in net fair value gains on investment properties.
• Six Months 2025 Financial Highlights:
  • Revenue: $303.9 million (vs. $279.2 million in 2024).
  • FFO: $176.5 million ($2.85 per unit) vs. $166.0 million ($2.62 per unit) in 2024.
  • AFFO: $163.6 million ($2.64 per unit) vs. $151.8 million ($2.39 per unit) in 2024.
• Acquisitions:
  • Acquired two modern distribution facilities (3850 NW and 3872 NW 126th Avenue, Coral Springs, Florida) on June 30, 2025.
  • Total Size: Approximately 0.1 million square feet.
  • Purchase Price: $49.5 million (US$36.4 million).
  • Tenant Profile: 100% leased to two well-established tenants; weighted average remaining lease term of 6.6 years.
  • Yield: Acquired at an in-going yield of 5.0%, estimated to increase >15% within two years.
• Operational Updates:
  • Assets Held for Sale: Five income-producing properties in the US and Netherlands classified as held for sale with a fair value of $310.5 million.
  • Leasing Activity: Achieved average rental rate spreads of 18% over expiring rents for ~973,000 sq ft of new leases/renewals in Q2 2025.
  • New Leases:
    • Louisville, KY: 631,000 sq ft, 62-month term with a global logistics/B2B e-commerce provider (commenced June 1, 2025).
    • Locust Grove, GA: 251,000 sq ft, 123-month term with a US power grid/telecom provider (commenced July 1, 2025).
    • Avon, IN: 178,000 sq ft unit in a 291,000 sq ft property, 125-month term with a global healthcare company (commencing Sept 30, 2025).
• Financing Activity:
  • NCIB Repurchases (Q2 2025): Repurchased 1,226,312 units at an average cost of $66.04 for $81.0 million.
  • NCIB Repurchases (Six Months 2025): Repurchased 2,157,281 units at an average cost of $67.01 for $144.6 million.
• 2025 Outlook:
  • FFO per unit forecast: $5.75 to $5.90 (approx. 6-9% increase over 2024).
  • AFFO per unit forecast: $4.90 to $5.05 (approx. 1-4% increase over 2024).
  • Constant currency same property NOI - cash basis (4-quarter average): 5.0% to 6.5%.
  • FX Assumptions: EUR:CAD 1.56-1.61; USD:CAD 1.35-1.39.

Notable Quotes

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