Allied Properties Real Estate Investment Trust (AP) Q1 2026 earnings summary

Executive summary

• Q1 2026 results were in line with expectations, reflecting the first full quarter of executing the action plan, with strong leasing momentum and resilience across core urban markets.

• Leasing activity was robust, with over 500,000 sq ft leased, a 63% retention rate on expiries, and a 36% increase in the new leasing pipeline; 323,632 sq ft of new leasing delivered.

• The CAD 500 million disposition program is on track, with CAD 46 million ($46 million) closed in Q1 and CAD 201 million in firm deals post-quarter, supporting deleveraging.

• King Toronto project faces higher costs and delays, resulting in increased expected credit loss and impairment, but remains 92% pre-sold with completion expected in H2 2027.

• The outlook remains focused on execution, leasing, capital recycling, and balance sheet strengthening, with risks in development being actively managed.

Financial highlights

• Q1 FFO per unit (diluted) was CAD 0.274, rental revenue was CAD 144 million, and operating income was CAD 70 million, all consistent with budget.

• Q1 included CAD 134 million in fair value adjustments, CAD 48 million impairment of residential inventory, and a CAD 44 million increase in expected credit loss provisions.

• Net loss and comprehensive loss for Q1 2026 was CAD 146.7 million, compared to a loss of CAD 107.7 million in Q1 2025.

• Adjusted EBITDA for Q1 2026 was CAD 83.3 million, down 11.9% year-over-year.

• Same Asset NOI for the rental portfolio declined 10.4% year-over-year.

Outlook and guidance

• Year-end occupancy target remains 84%-86%, with confidence in achieving it based on current leasing activity.

• Capital expenditures for 2026 are expected to be higher by CAD 40-50 million due to King Toronto construction costs; all other 3-year outlook metrics remain unchanged.

• The objective is to reach mid-11 times net debt to EBITDA by year-end, with deleveraging on track.

• $500 million in non-core property dispositions targeted for 2026, with $46 million closed and $201 million firmed post-quarter.