First Capital Real Estate Investment Trust (FCR.UN) Q1 2025 earnings summary

Executive summary

• Q1 2025 delivered strong operating performance, with portfolio occupancy at a record 96.9% and robust leasing activity, including 511,000 sq ft renewed at a 13.6% rent increase and 90,000 sq ft of new leasing at higher rents.

• Owns and operates $9.2B in assets across 21.9M SF GLA, focusing on grocery-anchored, open-air centers in top Canadian neighborhoods, with a strategic tenant mix and 17% of rent from grocery stores.

• Net income attributable to unitholders increased to $84.4 million ($0.39 per diluted unit), up from $74.8 million ($0.35 per diluted unit) year-over-year.

• The three-year strategic plan targets at least 3% average annual OFFO per unit growth and a net debt-to-adjusted EBITDA ratio in the low eight times by end of 2026.

• Core objectives include FFO per unit, NAV per unit, and distribution per unit growth.

Financial highlights

• Operating FFO for Q1 was CAD 69 million, up from CAD 68 million in Q4 2024 but down from CAD 78 million in Q1 2024 due to non-recurring items last year; FFO per diluted unit was $0.32.

• Same property NOI grew 5.3% year-over-year, primarily from higher rents, excluding lease termination fees and bad debt.

• Net asset value per unit was CAD 22.06 at March 31, 2025, stable year-over-year.

• Distribution per unit increased by 3% to an annualized CAD 0.89, with a Q1 payout ratio of 69% on OFFO.

• Total assets as of March 31, 2025, were $9.18 billion.

Outlook and guidance

• The company expects to deliver same property NOI growth of approximately 4% for the full year and targets annual OFFO per unit growth of at least 3% with a net debt-to-EBITDA ratio in the low eight times by year-end 2026.

• Development completions are now expected to total CAD 300 million over three years, up from CAD 200 million, while disposition targets were revised to CAD 750 million from CAD 1 billion due to market conditions.

• Ongoing entitlement program targets 3.5M SF of incremental density by year-end 2026.

• Continued execution of sustainability roadmap and decarbonization plan to achieve 46% GHG reduction by 2030.

• The business remains on track to achieve its FFO per unit growth and debt-to-EBITDA targets despite reduced disposition assumptions.