SmartCentres Real Estate Investment Trust Reports Third Quarter 2025 Results
SmartCentres Real Estate Investment Trust (“SmartCentres,” the “Trust,” or the “REIT”) (TSX: SRU.UN) today announced its financial and operating results for the third quarter ended September 30, 2025, highlighting continued strength in retail fundamentals, leasing activity, and development initiatives.
“We are pleased to report another strong quarter of operating and financial results, marked by stable retail fundamentals and robust momentum in leasing activity across both existing and new-build properties,” said Mitchell Goldhar, CEO of SmartCentres. “Throughout 2025, we successfully renewed and extended lease maturities at rental growth rates of 8.4%, excluding anchor tenants, while maintaining our industry-leading in-place and committed occupancy at 98.6%. We anticipate this trend of healthy rental growth to continue through the remainder of the year.
“Additionally, same-property net operating income (NOI) grew during the quarter despite a credit provision associated with a single retail tenant. Our development pipeline remains active, with two self-storage facilities in Quebec scheduled to open in 2026 and two more in British Columbia expected in 2027. Subsequent to quarter-end, we raised $500 million through a two-tranche term debenture. This financing will repay a $350 million debenture maturity, retire outstanding floating-rate debt on our operating lines, and strategically extend our debt maturity profile, while improving accretive returns for unitholders.”
Third Quarter 2025 Highlights
Retail Operations
SmartCentres maintained an industry-leading in-place and committed occupancy rate of 98.6% as of September 30, 2025, consistent with the prior quarter. Customer traffic remained strong, and the tenant base continued to perform well, supporting same-property NOI growth of 4.6% for the quarter, excluding anchor tenants, compared with the same period in 2024.
Leasing activity remained robust, with approximately 68,000 square feet of previously vacant space leased during the quarter, bringing the year-to-date total to roughly 394,000 square feet. Demand for new-build retail space continued to grow, with 24,944 square feet executed in Q3 2025, totaling approximately 92,000 square feet year-to-date. Lease renewals performed strongly, with nearly 85% of all leases maturing in 2025 successfully extended or finalized. Rents increased by 8.4% on renewals excluding anchors, and by 6.2% including anchors.
Development Initiatives
SmartCentres’ development pipeline continued to expand during the third quarter. Three new self-storage facilities were opened in 2025 at Toronto (Gilbert Avenue), Toronto (Jane Street), and Dorval, Quebec (St-Regis Boulevard), bringing the total number of operational self-storage properties to 14. Construction of additional self-storage facilities is underway in Montreal (Notre Dame Street W) and Laval East, Quebec, with openings expected in 2026.
Preparatory and demolition work has been completed at Burnaby, British Columbia, with building construction set to commence in Q4 2025. Site preparation in Victoria, British Columbia, is ongoing, with both sites expected to open in 2027. The Trust is also pursuing municipal approvals for a recently acquired self-storage site in Edmonton, Alberta.
Residential and mixed-use developments are progressing as planned. Phase I of the Vaughan Northwest townhomes is nearing completion, with 13 units closed in Q3 2025 and 111 of 120 units sold to date. Meanwhile, construction of ArtWalk Condo Tower A at Vaughan Metropolitan Centre is advancing, with 93% of 340 units pre-sold. The underground parking structure is underway, the slab-on-grade completed, and preparations for the first section of the ground floor slab are in progress.
Additionally, the Trust continues construction of its flagship 200,000-square-foot Canadian Tire store on Laird Drive in Toronto, on schedule for possession in Q2 2026.
Financial Performance
Net rental income and other revenues for the three months ended September 30, 2025, totaled $141.3 million, a slight decrease of $0.6 million or 0.5% compared to Q3 2024. This decrease primarily reflects lower residential sales due to fewer townhome closings, partially offset by higher base rent from retail properties.
Funds from operations (FFO) per unit for the quarter were $0.59, compared with $0.71 for Q3 2024. The decline was largely due to fair value adjustments on the total return swap (TRS) from fluctuations in the Trust’s unit price. On an adjusted basis, FFO per unit rose to $0.56 from $0.53 in Q3 2024, driven primarily by increased NOI from retail lease-up activity.
Net income and comprehensive income for the quarter increased by $38.6 million compared with the same period in 2024. This growth reflects a $36.6 million increase in fair value adjustments on financial instruments, mainly due to mark-to-market changes in interest rate swaps and unit-based liabilities associated with the Trust’s higher unit price.
SmartCentres remains confident in its ability to drive value through strong leasing activity, disciplined development, and financial management. The Trust’s focus on retail fundamentals, combined with its expanding self-storage and residential development pipeline, positions it well for continued growth. The recent debenture financing strengthens the balance sheet and provides flexibility to capitalize on opportunities, extend debt maturities, and enhance returns for unitholders.
“The Trust continues to execute on its strategic priorities, and we are optimistic about the remainder of 2025 and beyond,” concluded Goldhar. “Our diversified portfolio, strong occupancy, and disciplined development program underpin a resilient platform for sustainable growth.”
Source Link:https://www.businesswire.com/
