SmartCentres Real Estate Investment Trust (SRU.UN) Q1 2026 earnings summary

Executive summary

• 80% of 2026 lease maturities extended by Q1, with 11.5% rental lifts ex anchors and strong tenant demand, especially from grocers and TJX banners.

• In-place and committed occupancy rate reached 97.6% as of March 31, 2026, with leasing momentum driving 56,000 sq. ft. of vacant space leased and 52,000 sq. ft. of new retail space executed.

• Retail expansion program launched with three board-approved projects, including new developments in Kingston, Lindsay, and Winnipeg, with two starting construction later this year.

• Balance sheet remains strong with over CAD 1 billion liquidity, CAD 10.2 billion unencumbered assets, and 88% of debt at fixed rates.

• Development pipeline advancing, including major projects such as the Canadian Tire building in Toronto and ArtWalk condo in Vaughan.

Financial highlights

• Same-Property NOI grew 3.4% ex anchors in Q1 and 4.8% over the trailing 12 months ex anchors.

• Net operating income for Q1 2026 was $137.7 million, up 0.7% year-over-year, driven by higher base rent and leasing activity.

• Net income and comprehensive income increased by $139.5 million year-over-year, mainly due to a $50.3 million fair value gain on investment properties.

• FFO per Unit was $0.54 and FFO with adjustments per Unit was $0.52, both down from Q1 2025, reflecting higher interest and G&A expenses.

• Distributions maintained at CAD 1.85 per unit; payout ratio to AFFO stable at 89.9% for the rolling 12 months.

Outlook and guidance

• Rental growth and occupancy momentum expected to continue through 2026, with construction on new developments in Kingston and Winnipeg set to begin later in 2026.

• Q1 likely marked the low point for occupancy; NOI and rent expected to ramp up in the back half of the year.

• Economic rent from new grocer and Winners leases expected to commence in late 2026.

• Targeting CAD 200–300 million in asset sales over the next two to three years, mainly from residential land, if market conditions permit.

• Management expects continued growth in value-oriented retail and ongoing enhancement of tenant quality.