SmartCentres Real Estate Investment Trust Releases Second Quarter Results for 2025

Company Website: https://smartcentres.com/ TORONTO -- (Business Wire) SmartCentres Real Estate Investment Trust (“SmartCentres”, the “Trust” or the “REIT”) (TSX: SRU.UN) is pleased to report its financial and operating results for the quarter ended June 30, 2025. “Building on Q1, we are pleased to report continued momentum in leasing demand and operational performance in Q2,” said Mitchell Goldhar, CEO of SmartCentres. “Occupancy has improved to 98.6% with approximately 148,000 square feet leased up during the quarter and rent growth of 8.5% (excluding Anchors). Same Properties NOI increased by 4.8% (7.7% excluding Anchors) showcasing improving customer traffic and a strengthened tenant base. Pacific Fresh and Costco both took possession of large spaces during the quarter and are expected to open later this year. Our development pipeline continues to add to the bottom-line with the completion this quarter of three self-storage projects and the closing of nine townhomes at our Vaughan NW project.” 2025 Second Quarter Highlights Retail Operations Improving customer traffic and a strengthened tenant base delivered strong Same Properties NOI(1) for the three months ended June 30, 2025 which increased by 4.8% (7.7% excluding Anchors) compared to the same period in 2024. 147,818 square feet leased during the quarter, resulting in an in-place and committed occupancy rate of 98.6% as of June 30, 2025. In addition, growing demand for new-build retail continues with approximately 38,740 square feet executed during the quarter. Extended or finalized 82.1% of all leases maturing in 2025, with strong rent growth of 8.5%, excluding Anchors. In April 2025, Pacific Fresh took possession of 136,703 square feet in Vaughan, previously occupied by Lowe’s, and Costco took possession of 125,040 square feet at Winston Churchill and highway 401. Both tenants plan to open later in the year. Development Significant development pipeline is expected to provide long-term portfolio expansion and profitable growth from the approximately 58.9 million square feet (at the Trust’s share) of zoned development permissions of various forms, including 0.8 million square feet currently under construction. Construction of self-storage facilities in Toronto (Gilbert Ave.), Toronto (Jane St.), and Dorval (St-Regis Blvd.) is substantially complete, with all three facilities opened during the quarter. Construction is underway at Montreal (Notre Dame St. W), and Laval E, Quebec, with facilities expected to open in 2026. Site preparation and demolition works were completed at Burnaby, British Columbia, with building construction commencing shortly and expected to open in 2027. Construction of Phase I of the Vaughan NW townhomes is mostly completed, with nine units closed in Q2 2025. As at June 30, 2025, a total of 98 out of the 120 units in Phase I have closed. Financial Net rental income and other for the three months ended June 30, 2025 was $141.3 million representing an increase of $8.1 million or 6.1% compared to the same period in 2024. This increase was primarily due to lease-up and renewal activities mainly from retail properties. FFO per Unit(1) for the three months ended June 30, 2025, was $0.58 compared to $0.50 for the same period in 2024. This increase was primarily due to an increase in NOI mainly due to lease-up activities and changes in fair value adjustment on the TRS resulting from fluctuations in the Trust’s Unit price, partially offset by a decrease in interest income as a result of the repayment of mortgage receivables and lower loan interest rates compared to the prior year period. FFO with adjustments per Unit(1) for the three months ended June 30, 2025, was $0.55 compared to $0.51 for the same period in 2024, an increase of 7.8%. Net income and comprehensive income(1) for the three months ended June 30, 2025, decreased by $19.7 million compared to the same period in 2024. This decrease was mainly driven by a $27.7 million reduction in fair value gain on investment properties, partially offset by a $10.2 million increase in NOI primarily due to lease-up activities for retail and mixed-use properties. (1) Represents a non-GAAP measure. The Trust’s method of calculating non-GAAP measures may differ from other reporting issuers’ methods and, accordingly, may not be comparable. For additional information, please see “Non-GAAP Measures” in this Press Release. Selected Consolidated Operational, Mixed-Use Development and Financial Information (in thousands of dollars, except per Unit and other non-financial data)         As at   June 30, 2025 December 31, 2024 June 30, 2024 Portfolio Information (Number of properties)         Retail properties   155 155 155 Office properties   4 4 4 Self-storage properties   12 11 10 Residential properties   3 3 3 Industrial properties   1 1 1 Properties under development   22 21 22 Total number of properties with an ownership interest   197 195 195 Leasing and Operational Information(1)         Gross leasable retail, office and industrial area (in thousands of sq. ft.)   35,566 35,300 35,199 In-place and committed occupancy rate   98.6 % 98.7 % 98.2 % Average lease term to maturity (in years)   4.4 4.2 4.3 In-place net retail rental rate excluding Anchors (per occupied sq. ft.)   $23.91 $23.48 $23.14 Financial Information         Investment properties(2)   10,726,823 10,659,783 10,556,877 Total unencumbered assets(3)   9,646,721 9,464,521 9,309,221 NAV per Unit - diluted(3)   $35.65 $36.03 $35.86 Debt to Aggregate Assets(3)(4)(5)   44.2 % 43.7 % 43.7 % Adjusted Debt to Adjusted EBITDA(3)(4)(5)   9.6X 9.6X 9.9X Weighted average interest rate(3)(4)   3.94 % 3.92 % 4.25 % Weighted average term of debt (in years)   3.1 3.1 3.1 Interest coverage ratio(3)(4)   2.6X 2.5X 2.5X             Three Months Ended June 30 Six Months Ended June 30   2025 2024 2025 2024 Financial Information         Rentals from investment properties and other(2) 223,715 228,051 453,053 445,290 Net income and comprehensive income(2) 109,186 128,916 99,605 107,741 FFO(3)(4)(6) 106,119 90,780 208,039 177,737 AFFO(3)(4)(6) 97,809 83,386 196,236 164,773 Cash flows provided by operating activities(2) 77,455 76,991 159,192 146,710 Net rental income and other(2) 141,345 133,222 278,131 263,950 NOI(3)(4) 149,279 139,062 292,803 275,137 Change in SPNOI(3)(4) 4.8 % 1.3 % 4.4 % 1.9 % Change in SPNOI excluding anchors(3)(4) 7.7 % 2.2 % 7.5 % 3.0 % Weighted average number of units outstanding – diluted(7) 182,050,755 180,664,749 181,733,524 180,472,496 Net income and comprehensive income per Unit(2) $0.61/$0.60 $0.72/$0.71 $0.56/$0.55 $0.60/$0.60 FFO per Unit(3)(4)(6) $0.60/$0.58 $0.51/$0.50 $1.17/$1.14 $1.00/$0.98 FFO with adjustments per Unit(3)(4) $0.56/$0.55 $0.52/$0.51 $1.11/$1.09 $1.04/$1.03 AFFO per Unit(3)(4)(6) $0.55/$0.54 $0.47/$0.46 $1.10/$1.08 $0.92/$0.91 AFFO with adjustments per Unit(3)(4) $0.52/$0.51 $0.48/$0.47 $1.04/$1.03 $0.97/$0.96 Payout Ratio to AFFO(3)(4)(6) 84.3 % 98.8 % 84.0 % 100.0 % Payout Ratio to AFFO with adjustments(3)(4) 89.4 % 96.9 % 88.7 % 95.6 % Payout Ratio to cash flows provided by operating activities 106.5 % 107.0 % 103.6 % 112.3 % (1) Excluding residential and self-storage area. (2) Represents a Generally Accepted Accounting Principles (“GAAP”) measure. (3) Represents a non-GAAP measure. The Trust’s method of calculating non-GAAP measures may differ from other reporting issuers’ methods and, accordingly, may not be comparable. For additional information, please see “Non-GAAP Measures” in this Press Release. (4) Includes the Trust’s proportionate share of equity accounted investments. (5) As at June 30, 2025, cash-on-hand of $28.8 million was excluded for the purposes of calculating the applicable ratios (December 31, 2024 – $34.9 million, June 30, 2024 – $43.4 million). (6) The calculation of the Trust’s FFO and AFFO and related payout ratios, including comparative amounts, are financial metrics that were determined based on the REALPAC White Paper on FFO and AFFO issued in January 2022 (“REALPAC White Paper”). Comparison with other reporting issuers may not be appropriate. The payout ratio to AFFO is calculated as declared distributions divided by AFFO. (7) The diluted weighted average includes the vested portion of the deferred units issued pursuant to the deferred unit plan, and vested EIPs granted pursuant to the equity incentive plan. Development and Intensification Summary The following table provides additional details on the Trust’s 7 development initiatives that are currently under construction or where initial siteworks have begun (in order of estimated initial occupancy/closing date): Projects under construction (Location/Project Name) Type Trust’s share Actual / estimated initial occupancy / closing date % of capital spend GFA(1) (sq. ft.) No. of residential units               Mixed-use Developments             Vaughan NW (Phase I & II) Townhomes 50% Q1 2024 66% 366,000 174 Montreal (Notre-Dame) Self-storage 50% Q2 2026 38% 177,000 N/A Laval East Self-storage 50% Q3 2026 27% 178,000 N/A Burnaby Self-storage 50% Q1 2027 33% 133,000 N/A Vaughan / ArtWalk Condo 50% Q2 2027 39% 300,000 340 Ottawa SW Residential Apartments 50% Q3 2027 30% 361,000 425 Total Mixed-use Developments         1,515,000 939 Retail Development             Toronto (Laird) Retail 50% Q2 2026 54% 225,000 N/A (1) GFA represents Gross Floor Area. Reconciliations of Non-GAAP Measures The following tables reconcile the non-GAAP measures to the most comparable GAAP measures for the three and six months ended June 30, 2025, and the comparable period in 2024. Such measures do not have a standardized meaning prescribed by IFRS and may not be comparable to similar measures disclosed by other issuers. Net Operating Income (including the Trust’s Interests in Equity Accounted Investments) (in thousands of dollars) Three Months Ended June 30, 2025 Three Months Ended June 30, 2024   GAAP Basis Proportionate Share Reconciliation Total Proportionate Share(1) GAAP Basis Proportionate Share Reconciliation Total Proportionate Share(1) Net rental income and other             Rentals from investment properties and other $218,770   $12,976   $231,746   $211,381   $11,272   $222,653   Property operating costs and other (80,179 ) (5,428 ) (85,607 ) (80,468 ) (5,427 ) (85,895 )   $138,591   $7,548   $146,139   $130,913   $5,845   $136,758   Residential sales revenue and other(2) 4,945   66   5,011   16,670   37   16,707   Residential cost of sales and other (2,191 ) 320   (1,871 ) (14,361 ) (42 ) (14,403 )   $2,754   $386   $3,140   $2,309   $(5 ) $2,304   NOI $141,345   $7,934   $149,279   $133,222   $5,840   $139,062   (in thousands of dollars) Six Months Ended June 30, 2025 Six Months Ended June 30, 2024   GAAP Basis Proportionate Share Reconciliation Total Proportionate Share(1) GAAP Basis Proportionate Share Reconciliation Total Proportionate Share(1) Net rental income and other             Rentals from investment properties and other $446,094   $25,953   $472,047   $427,018   $22,194   $449,212   Property operating costs and other (171,268 ) (11,674 ) (182,942 ) (165,621 ) (10,885 ) (176,506 )   $274,826   $14,279   $289,105   $261,397   $11,309   $272,706   Residential sales revenue and other(2) 6,959   75   7,034   18,272   66   18,338   Residential cost of sales and other (3,654 ) 318   (3,336 ) (15,719 ) (188 ) (15,907 )   $3,305   $393   $3,698   $2,553   $(122 ) $2,431   NOI $278,131   $14,672   $292,803   $263,950   $11,187   $275,137   (1) This column contains non-GAAP measures because it includes figures that are recorded in equity accounted investments. The Trust’s method of calculating non-GAAP measures may differ from other reporting issuers’ methods and, accordingly, may not be comparable. For additional information, please see “Non-GAAP Measures” in this Press Release. (2) Includes additional partnership profit and other revenues. Same Properties NOI   Three Months Ended June 30 Six Months Ended June 30 (in thousands of dollars) 2025   2024   2025   2024   Net rental income and other $141,345   $133,222   $278,131   $263,950   NOI from equity accounted investments(1) 7,934   5,840   14,672   11,187   Total portfolio NOI before adjustments(1) $149,279   $139,062   $292,803   $275,137   Adjustments:         Lease termination (126 ) (592 ) (453 ) (592 ) Net profit on condo and townhome closings (3,140 ) (2,304 ) (3,698 ) (2,431 ) Other adjustments(2) (235 ) 1,527   1,673   2,701   Total portfolio NOI after adjustments(1) $145,778   $137,693   $290,325   $274,815   NOI sourced from acquisitions, dispositions, Earnouts and developments (2,267 ) (748 ) (4,394 ) (996 ) Same Properties NOI(1) $143,511   $136,945   $285,931   $273,819   (1) Represents a non-GAAP measure. The Trust’s method of calculating non-GAAP measures may differ from other reporting issuers’ methods and, accordingly, may not be comparable. For additional information, please see “Non-GAAP Measures” in this Press Release. (2) Includes items such as adjustments relating to royalties, straight-line rent and amortization of tenant incentives. Reconciliation of FFO   Three Months Ended June 30 Six Months Ended June 30 (in thousands of dollars) 2025   2024   2025   2024   Net income and comprehensive income $109,186   $128,916   $99,605   $107,741   Add (Deduct):         Fair value adjustment on investment properties and financial instruments(1) (26,744 ) (34,665 ) 67,915   63,837   Gain (Loss) on derivative – TRS 2,551   (3,994 ) 6,875   (10,143 ) Gain (Loss) on sale of investment properties —   —   (7 ) 142   Amortization of intangible assets and tenant improvement allowance 2,324   2,257   4,814   4,437   Distributions on Units classified as liabilities and vested deferred units and EIP 5,366   4,778   10,437   9,374   Salaries and related costs attributed to leasing activities(2) 2,090   2,301   4,473   4,708   Adjustments relating to equity accounted investments(3) 11,346   (8,813 ) 13,927   (2,359 ) FFO(4) $106,119   $90,780   $208,039   $177,737   Add (Deduct) non-recurring adjustments:         Gain (Loss) on derivative – TRS (2,551 ) 3,994   (6,875 ) 10,143   FFO sourced from condo and townhome closings (3,140 ) (2,353 ) (3,698 ) (2,553 ) Transactional FFO – sale of land(4) 128   —   170   —   FFO with adjustments(4) $100,556   $92,421   $197,636   $185,327   (1) Includes fair value adjustments on investment properties and financial instruments. Fair value adjustment on investment properties is described in “Investment Properties” in the Trust’s MD&A. Fair value adjustment on financial instruments comprises the following financial instruments: units classified as liabilities, Deferred Unit Plan (“DUP”), Equity Incentive Plan (“EIP”), TRS, and interest rate swap agreements. The significant assumptions made in determining the fair value are more thoroughly described in the Trust’s unaudited interim condensed consolidated financial statements for the three and six months ended June 30, 2025. For details, please see discussion in “Results of Operations” section in the MD&A. (2) Salaries and related costs attributed to leasing activities of $4.5 million were incurred in the six months ended June 30, 2025 (six months ended June 30, 2024 – $4.7 million) and were eligible to be added back to FFO based on the definition of FFO, in the REALPAC White Paper, which provided for an adjustment to incremental leasing expenses for the cost of salaried staff. This adjustment to FFO results in more comparability between Canadian publicly traded real estate entities that expensed their internal leasing departments and those that capitalized external leasing expenses. (3) Includes tenant improvement amortization, indirect interest with respect to the development portion, fair value adjustment on investment properties, loss (gain) on sale of investment properties, and adjustment for supplemental costs. (4) Represents a non-GAAP measure. The Trust’s method of calculating non-GAAP measures may differ from other reporting issuers’ methods and, accordingly, may not be comparable. For definitions and basis of presentation of the Trust’s non-GAAP measures, refer to “Presentation of Certain Terms Including Non-GAAP Measures” and “Non-GAAP Measures” in the MD&A. Reconciliation of AFFO   Three Months Ended June 30 Six Months Ended June 30 (in thousands of dollars) 2025   2024   2025   2024   FFO(1) $106,119   $90,780   $208,039   $177,737   Add (Deduct):         Straight-line rents (1,457 ) (963 ) (1,888 ) (1,700 ) Adjusted salaries and related costs attributed to leasing (2,090 ) (2,301 ) (4,473 ) (4,708 ) Capital expenditures, leasing commissions, and tenant improvements (4,763 ) (4,130 ) (5,442 ) (6,556 ) AFFO(1) $97,809   $83,386   $196,236   $164,773   Add (Deduct) non-recurring adjustments:         Gain (Loss) on derivative – TRS (2,551 ) 3,994   (6,875 ) 10,143   FFO sourced from condo and townhome closings (3,140 ) (2,353 ) (3,698 ) (2,553 ) Transactional FFO – sale of land(1) 128   —   170   —   AFFO with adjustments(1) $92,246   $85,027   $185,833   $172,363   (1) Represents a non-GAAP measure. The Trust’s method of calculating non-GAAP measures may differ from other reporting issuers’ methods and, accordingly, may not be comparable. For additional information, please see “Non-GAAP Measures” in this Press Release. Adjusted EBITDA The following table presents a reconciliation of net income and comprehensive income to Adjusted EBITDA:   Rolling 12 Months Ended (in thousands of dollars) June 30, 2025 June 30, 2024 Net income and comprehensive income $283,933   $337,080 Add (Deduct) the following items:     Net interest expense 195,100   176,559 Amortization of equipment, intangible assets and tenant improvements 12,453   11,659 Fair value adjustments on investment properties and financial instruments 68,880   3,422 Adjustment for supplemental costs 4,156   4,115 Gain (Loss) on sale of investment properties (26 ) 75 Adjusted EBITDA(1) $564,496   $532,910 (1) Represents a non-GAAP measure. The Trust’s method of calculating non-GAAP measures may differ from other reporting issuers’ methods and, accordingly, may not be comparable. For additional information, please see “Non-GAAP Measures” in this Press Release. Net Asset Value The following table presents NAV and NAV per unit diluted as at each of the reporting dates: (in thousands of dollars, except per Unit information) June 30, 2025 March 31, 2025 December 31, 2024 Total equity $6,292,574 $6,250,888 $6,337,581 LP Units classified as liabilities 200,520 198,169 191,665 NAV(1) $6,493,094 $6,449,057 $6,529,246 Units outstanding - diluted(2) 182,134,237 181,595,454 181,205,536 NAV per Unit - diluted(1) $35.65 $35.51 $36.03 (1) Represents a non-GAAP measure. The Trust’s method of calculating non-GAAP measures may differ from other reporting issuers’ methods and, accordingly, may not be comparable. For additional information, please see “Non-GAAP Measures” in this Press Release. (2) Total diluted Units outstanding include Trust Units and LP Units, including Units classified as liabilities, vested portion of the deferred units issued pursuant to the deferred unit plan and vested EIPs granted pursuant to the equity incentive plan. Conference Call Management will hold a conference call on Friday, August 8, 2025 at 11:00 a.m. (ET). Interested parties are invited to access the call by dialing 1-855-353-9183 and then keying in the participant access code 56742#. A recording of this call will be made available Friday, August 8, 2025 through to Friday, August 15, 2025. To access the recording, please call 1-855-201-2300, enter the conference access code 56742# and then key in the playback access code 56742#. About SmartCentres SmartCentres is one of Canada’s largest fully integrated REITs, with a best-in-class and growing mixed-use portfolio featuring 197 strategically located properties in communities across the country. SmartCentres has approximately $12.0 billion in assets and owns 35.6 million square feet of income producing value-oriented retail and first-class office properties with 98.6% in place and committed occupancy, on 3,500 acres of owned land across Canada. Non-GAAP Measures The non-GAAP measures used in this Press Release, including but not limited to, AFFO, AFFO with adjustments, AFFO per Unit, AFFO with adjustments per Unit, Payout Ratio to AFFO, Payout Ratio to AFFO with adjustments, Unencumbered Assets, NOI, Debt to Aggregate Assets, Interest Coverage Ratio, Adjusted Debt to Adjusted EBITDA, Unsecured/Secured Debt Ratio, FFO, FFO with adjustments, FFO per Unit, FFO with adjustments per Unit, Net Asset Value (“NAV”), Same Properties NOI, Same Properties NOI excluding Anchors, Debt to Gross Book Value, Weighted Average Interest Rate, Transactional FFO, and Total Proportionate Share, do not have any standardized meaning prescribed by International Financial Reporting Standards (“IFRS”) and are therefore unlikely to be comparable to similar measures presented by other issuers. Additional information regarding these non-GAAP measures is available in the Management’s Discussion and Analysis of the Trust for the three and six months ended June 30, 2025, dated August 7, 2025 (the “MD&A”), and is incorporated by reference. The information is found in the “Presentation of Certain Terms Including Non-GAAP Measures” and “Non-GAAP Measures” sections of the MD&A, which is available on SEDAR+ at www.sedarplus.ca. Reconciliations of non-GAAP financial measures to the most directly comparable IFRS measures are found in “Reconciliations of Non-GAAP Measures” of this Press Release. Full reports of the financial results of the Trust for the three and six months ended June 30, 2025 are outlined in the unaudited interim condensed consolidated financial statements and the related MD&A of the Trust for the three and six months ended June 30, 2025, which are available on SEDAR+ at www.sedarplus.ca. Cautionary Statements Regarding Forward-looking Statements Certain statements in this Press Release are "forward-looking statements" that reflect management's expectations regarding the Trust's future growth, results of operations, performance and business prospects and opportunities. More specifically, certain statements including, but not limited to, statements related to SmartCentres’ expectations relating to cash collections, SmartCentres’ expected or planned development plans and joint venture projects, including the described type, scope, costs and other financial metrics and the expected timing of construction and condo closings and statements that contain words such as "could", "should", "can", "anticipate", "expect", "believe", "will", "may" and similar expressions and statements relating to matters that are not historical facts, constitute "forward-looking statements". These forward-looking statements are presented for the purpose of assisting the Trust's Unitholders and financial analysts in understanding the Trust's operating environment and may not be appropriate for other purposes. Such forward-looking statements reflect management's current beliefs and are based on information currently available to management. However, such forward-looking statements involve significant risks and uncertainties. A number of factors could cause actual results to differ materially from the results discussed in the forward-looking statements, including risks associated with potential acquisitions not being completed or not being completed on the contemplated terms, public health crises, real property ownership and development, debt and equity financing for development, interest and financing costs, construction and development risks, and the ability to obtain commercial and municipal consents for development. These risks and others are more fully discussed under the heading “Risks and Uncertainties” and elsewhere in SmartCentres’ most recent Management’s Discussion and Analysis, as well as under the heading “Risk Factors” in SmartCentres’ most recent annual information form. Although the forward-looking statements contained in this Press Release are based on what management believes to be reasonable assumptions, SmartCentres cannot assure investors that actual results will be consistent with these forward-looking statements. The forward-looking statements contained herein are expressly qualified in their entirety by this cautionary statement. These forward-looking statements are made as at the date of this Press Release and SmartCentres assumes no obligation to update or revise them to reflect new events or circumstances unless otherwise required by applicable securities legislation. Material factors or assumptions that were applied in drawing a conclusion or making an estimate set out in the forward-looking information may include, but are not limited to: a stable retail environment; a continuing trend toward land use intensification, including residential development in urban markets and continued growth along transportation nodes; access to equity and debt capital markets to fund, at acceptable costs, future capital requirements and to enable our refinancing of debts as they mature; that requisite consents for development will be obtained in the ordinary course, construction and permitting costs consistent with the past year and recent inflation trends. View source version on businesswire.com: https://www.businesswire.com/news/home/20250807428381/en/ Contacts: For information, visit www.smartcentres.com or please contact: Mitchell Goldhar Executive Chairman and CEO (905) 326-6400 ext. 7674 [email protected] Peter Slan Chief Financial Officer (905) 326-6400 ext. 7571 [email protected] Source: SmartCentres Real Estate Investment Trust