Plaza Retail REIT Announces Second Quarter 2025 Results

Executive Summary

• Plaza Retail REIT reported its financial results for the three and six months ended June 30, 2025, showing growth in revenue, Net Operating Income (NOI), and Funds from Operations (FFO) compared to the prior year.
• The company highlighted operational improvements, including a 5.3% increase in per-unit FFO, 1.5% same-property NOI growth, and a committed occupancy rate of 98%.
• Strategic initiatives included converting approximately 90,000 square feet of space to No Frills locations across Newfoundland, Ontario, and PEI, and increasing ownership in three Ontario Shoppers Drug Mart properties from 25% to 100%.

Key Details

• Financial Performance (Three Months Ended June 30, 2025):
  • Revenues: $31.8 million (up 3.6% from $30.7 million in 2024).
  • Net Operating Income (NOI): $19.1 million (up 3.8% from $18.4 million).
  • Profit and Total Comprehensive Income: $12.7 million (up 419.2% from $2.4 million), driven by a $1.3 million increase in fair value of investment properties (vs. a $7.3 million decrease in 2024).
  • Funds from Operations (FFO): $11.2 million (up 5.3% from $10.6 million).
  • FFO per Unit: $0.100 (up 5.3% from $0.095).
  • Adjusted Funds from Operations (AFFO): $7.5 million (down 15.8% from $8.9 million), impacted by higher leasing costs and maintenance capital expenditures.
  • AFFO per Unit: $0.067 (down 16.3% from $0.080).
• Financial Performance (Six Months Ended June 30, 2025):
  • Revenues: $62.9 million (up 4.5% from $60.2 million).
  • Net Operating Income (NOI): $37.4 million (up 2.7% from $36.4 million).
  • Profit and Total Comprehensive Income: $22.0 million (up 84.7% from $11.9 million).
  • Funds from Operations (FFO): $21.0 million (up 2.0% from $20.5 million).
  • FFO per Unit: $0.188 (up 2.2% from $0.184).
  • Adjusted Funds from Operations (AFFO): $15.8 million (down 2.7% from $16.2 million).
  • AFFO per Unit: $0.142 (down 2.7% from $0.146).
• Operational Metrics:
  • Same-Asset NOI: Increased by 1.5% for both the quarter and year-to-date.
  • Committed Occupancy: 98.0% (up from 97.6% in 2024).
  • Same-Asset Committed Occupancy: 97.6% (up from 97.2% in 2024).
  • Blended Leasing Spreads: 14.8% year-to-date.
  • Weighted Average Renewal Rates: 23.8% for open-air centres.
  • Occupancy for Open-Air Centres: Nearly 99%.
• Strategic Actions & Portfolio Updates:
  • Acquired remaining 75% interest in three Ontario Shoppers Drug Mart properties, increasing ownership to 100%.
  • Converting ~30,000 sq ft at Village Shopping Center (St. John's, NL) to No Frills.
  • Constructing a 28,000 sq ft No Frills at a plaza in Brockville, ON.
  • Converting ~30,000 sq ft for another dominant retailer at the same Brockville property.
  • Converting 10,000 sq ft to a small-format No Frills at Spring Park Plaza (Charlottetown, PEI).
  • Bad debt expense of $218 thousand recorded in the current quarter related to two tenant closures.
  • Higher operating expenses noted in Q2 due to roof/asphalt repairs and maintenance; higher snow removal costs in Q1 2025 due to heavier snowfall.

Notable Quotes

• "The first half of 2025 has demonstrated how our operating performance remains resilient. We are executing grocery anchored optimizations and intensifications, while consolidating ownership positions to drive accretive embedded growth within the existing portfolio," said Jason Parravano, President and Chief Executive Officer of the Trust.
• "Through disciplined execution, we also increased our ownership in 3 Ontario Shoppers Drug Mart properties from 25% to 100% at the beginning of June. During the quarter, we were able achieve a 5.3% increase in per unit FFO, drive same-property NOI growth of 1.5%, achieved blended leasing spreads of 14.8% year-to-date, and increased our committed occupancy to 98%."