Primaris Real Estate Investment Trust (PMZ-UN) Q2 2024 earnings summary

Executive summary

• Q2 2024 delivered 6.8% FFO per unit growth, raised guidance for FFO per unit and NOI, and strong operational performance with total rental revenue of $120.0 million.

• Occupancy increased to 94.4% committed and 93.0% in-place, with recovery ratios improving as leases revert to standard terms.

• Portfolio quality enhanced by strategic acquisitions and dispositions, including the sale of Garden City/Garden City Square and the acquisition of Zellers/Zehr's Grocery Store Building and Conestoga Mall.

• Tenant sales productivity rose over 25% since Q2 2022, with strong leasing activity and robust tenant demand.

• Portfolio is well-positioned for growth in high-demand Canadian markets, supported by disciplined capital allocation.

Financial highlights

• FFO per unit (diluted) was $0.422, up 6.8% from $0.395 in Q2 2023; FFO payout ratio at 52.2%.

• Same property cash NOI up 1.3% year-over-year; excluding prior year tax recoveries, growth was nearly 6%.

• Cash NOI for Q2 2024 was $67.4 million, up from $54.2 million a year ago.

• Net debt to adjusted EBITDA at 5.7x, within the target range of 4–6x.

• Liquidity at $690.8 million, with $3.3 billion in unencumbered assets.

Outlook and guidance

• 2024 FFO per unit guidance raised to $1.63–$1.66; Cash NOI guidance increased to $267–$272 million.

• Same property NOI growth expected at 3–4% for the full year, with stronger performance anticipated in the second half.

• Target occupancy increased to 96%, driven by strong leasing activity and tenant demand.

• Management cautions that actual results may vary materially from outlook due to risks and uncertainties.

• General and administrative expenses expected at $31–$33 million; redevelopment capital expenditures at $30–$40 million.