SmartCentres Real Estate Investment Trust (SRU.UN) Q2 2025 earnings summary

Executive summary

• Q2 2025 delivered strong financial and operational performance, with 98.6% occupancy, robust leasing, and high pre-leasing in residential and mixed-use projects.

• Value and convenience retail focus, anchored by national tenants like Walmart and Costco, continues to drive resilience and growth.

• Expansion of self-storage and mixed-use portfolios, with three new self-storage facilities opened and major tenants taking possession of new spaces.

• Major projects such as SmartVMC and Vaughan NW advanced, with significant pre-sales and leasing.

• Maintained a resilient, recession-resistant retail base and continued capital recycling initiatives.

Financial highlights

• Net operating income rose by CAD 10.2 million (7.3%) year-over-year; Same Properties NOI up 4.8% (7.7% excluding anchors).

• FFO per unit was CAD 0.58, up from CAD 0.50 last year; AFFO per unit was CAD 0.55, up 7.8% year-over-year.

• Distribution maintained at CAD 1.85 per unit annualized; payout ratio to AFFO was 84.3% for Q2.

• Debt to aggregate assets at 44.2%; adjusted debt to adjusted EBITDA at 9.6x; interest coverage ratio at 2.6x.

• Liquidity at CAD 907 million, with $1.2 billion available including credit facilities.

Outlook and guidance

• Same property NOI growth guidance for 2025 reiterated at 3%-5%, with expectations to finish near the middle of the range.

• Development pipeline includes 58.9M sq. ft. of zoned permissions and 0.8M sq. ft. under construction, with major projects advancing.

• Management expects continued tenant demand, portfolio expansion, and profitable growth from development activities.