Granite Real Estate Investment Trust (GRT-UN) Q1 2025 earnings summary

Executive summary

• Q1 2025 results were in line with guidance, with NOI up to $125.7M, driven by strong leasing, FX gains, and NCIB repurchases, offset by higher net interest expense and a $60.9M unfavorable change in fair value adjustments.

• FFO per unit was CAD 1.46, up 12.3% year-over-year; AFFO per unit reached CAD 1.41, up CAD 0.19 from last year, mainly due to lower capex and leasing costs.

• 138 income-producing and 6 development properties totaling 63.3M SF with 94.8% committed occupancy as of March 31, 2025.

• Property value reached $9.4B, with a market cap of ~$3.9B and enterprise value of ~$6.9B as of May 2, 2025.

• 14 consecutive annual distribution increases, with a 3.03% increase in 2025 and a focus on long-term total return and conservative capital structure.

Financial highlights

• Revenue for Q1 2025 was $154.7M, up from $138.9M in Q1 2024.

• Same property NOI increased 4.7% year-over-year on a constant currency basis and 9.3% including FX.

• AFFO payout ratio improved to 60% from 67% year-over-year; LTM AFFO payout ratio at 66%.

• Net leverage ratio stable at 32–33%; net debt/EBITDA at 6.8–6.9x.

• Liquidity stands at approximately CAD 1.1B, including CAD 120M cash and CAD 946M undrawn credit.

Outlook and guidance

• 2025 guidance: FFO per unit of CAD 5.70–5.85 (5–8% growth), AFFO per unit of CAD 4.80–4.95 (–1% to 2% change), and same property NOI growth of 4.5–6%.

• NOI expected to dip in Q2 due to known vacancies, with recovery in H2 2025 as re-leasing spreads materialize.

• Guidance assumes no acquisitions/dispositions and reflects recent FX trends, with EUR:CAD at 1.52–1.58 and USD:CAD at 1.40–1.45.

• Active development pipeline, including a 391,000 SF build-to-suit in Houston, TX, expected to complete in Q4 2026 with a 7.5% stabilized yield.

• Renewal rate guidance for 2025 expiries is 80–85% at a weighted average rate increase of ~35%; committed vacancy projected at 95.5–96% by year-end.