Primaris REIT Announces Strong Q2/25; Increases 2025 Guidance

Executive Summary

• Primaris Real Estate Investment Trust reported financial and operating results for the second quarter ended June 30, 2025, highlighting a 5.5% growth in Same Properties Cash NOI and a 5.7% growth in Same Properties shopping centres Cash NOI.
• The Trust increased its full-year 2025 guidance, raising Cash NOI expectations to $340–$345 million and FFO per unit to $1.74–$1.79, driven by strong leasing momentum and asset acquisitions.
• Significant portfolio activity included the acquisition of Lime Ridge Mall for $416 million and the sale of Lansdowne Industrial for $9.9 million, alongside the issuance of $200 million in green senior unsecured debentures.

Key Details

• Quarterly Financials (Q2 2025):
  • Total rental revenue: $150.8 million.
  • Net income: $50.4 million.
  • FFO per average diluted unit: $0.445 (up 5.5% year-over-year).
  • AFFO per average diluted unit: $0.690 (up 24.6% year-over-year).
  • FFO Payout Ratio: 52.6%.
  • NAV per unit: $21.43.
• Operating Metrics:
  • Same Properties Cash NOI growth: +5.5%.
  • Same Properties shopping centres Cash NOI growth: +5.7%.
  • Committed occupancy: 90.5%; In-place occupancy: 88.8%; Long-term in-place occupancy: 84.8%.
  • Weighted average spread on renewing rents: +6.7% across 407,000 sq ft.
  • Same stores sales productivity: $784 per square foot.
• 2025 Guidance Updates:
  • Cash NOI: Increased to $340–$345 million (previously $331–$337 million).
  • FFO per unit: Increased to $1.74–$1.79 (previously $1.70–$1.75).
  • Straight-line rent adjustment: Updated to $6.8–$7.2 million.
  • Occupancy guidance: No change (assumes HBC disclaims all leases comprising 1,155.9 thousand sq ft).
• Capital Transactions & M&A:
  • Acquisition: Purchased Lime Ridge Mall in Hamilton, Ontario, for $416 million, adding 791,000 sq ft to the portfolio.
  • Disposition: Sold Lansdowne Industrial in Peterborough, Ontario, for $9.9 million.
  • Debt Issuance: Issued $200 million aggregate principal amount of senior unsecured debentures maturing June 25, 2033, at a fixed annual interest rate of 4.835%, under the inaugural Green Finance Framework.
  • NCIB: Purchased 2,664,000 Trust Units under the Normal Course Issuer Bid program at an average price of ~$14.98 per unit (approx. 30.1% discount to NAV).
  • Subsequent Dispositions: Sold three strip plazas in Medicine Hat for $12.7 million and Northpointe Town Centre in Calgary for $54.5 million.
• Balance Sheet & Liquidity:
  • Total assets: $5.0 billion.
  • Liquidity: $584.0 million.
  • Unencumbered assets: $4.4 billion.
  • Average Net Debt to Adjusted EBITDA: 5.8x.
  • Weighted average interest rate on total debt: 5.17%.
  • Fixed rate debt as a percent of total debt: 96.1%.

Notable Quotes

• "Our shopping centre portfolio continues to perform very well with NOI growth coming from strong rental revenue growth and percentage rent, and rising cost recoveries... We are in advanced discussions with strong covenant, high-quality national retailers, including large format tenants." — Patrick Sullivan, President and Chief Operating Officer
• "With the acquisition of Lime Ridge Mall, Primaris has acquired approximately $1 billion of market leading enclosed shopping centres in 2025, driving our portfolio quality significantly higher... Disciplined capital allocation remains a core focus, and we demonstrated its benefits through asset capital recycling and NCIB activity..." — Alex Avery, Chief Executive Officer
• "Primaris has achieved its acquisition target of acquiring over $1 billion in assets, while maintaining industry leading leverage metrics... With unencumbered assets of $4.4 billion and no debt maturing until 2027, we have reduced refinancing risk..." — Rags Davloor, Chief Financial Officer