Granite Real Estate Investment Trust (GRT-UN) Q2 2025 earnings summary

Executive summary

• Q2 2025 results were in line with guidance, driven by strong NOI growth, robust leasing, and accretive NCIB unit repurchases, partially offset by unfavorable foreign exchange impacts.

• Portfolio consists of 135 income-producing and 6 development properties, totaling 60.6M SF with 96.5% committed occupancy and $9.0B in property value as of June 30, 2025.

• Completed $49.5M acquisition of two fully leased distribution facilities in Florida, adding 0.1M sq ft to the portfolio.

• Leasing activity was robust, with 1.3 million sq ft of renewals and 1.1 million sq ft of new leases, contributing over CAD 10.5 million in gross rent in the first year.

• Portfolio transformation reduced Magna concentration from 93% of GLA in 2012 to 20% in 2025, while increasing market cap and FFO per unit.

Financial highlights

• Q2 FFO per unit was CAD 1.39, up 5.3% year-over-year; AFFO per unit was CAD 1.23, up CAD 0.06 year-over-year, mainly due to higher capital expenditures and leasing costs.

• Net income attributable to unitholders was $95.0M, up from $76.2M in Q2 2024, mainly due to higher NOI and favorable fair value adjustments.

• Same property NOI grew 4.6% year-over-year on a constant currency basis.

• Weighted average cost of debt is 2.71% with a 3.9-year average term to maturity.

• Net leverage increased to 36% (from 32% in Q1), and net debt to EBITDA rose to 7.1x, mainly due to asset reclassification and increased unsecured debt.

Outlook and guidance

• Raised 2025 guidance for constant currency same property NOI growth to 5%-6.5% (from 4.5%-6%).

• FFO per unit guidance increased to CAD 5.75–5.90 (6%-9% growth over 2024); AFFO per unit guidance raised to CAD 4.90–5.05 (1%-4% growth over 2024).

• AFFO-related capital expenditures expected to be about CAD 40 million for 2025.

• Active development pipeline includes a 391,000 SF build-to-suit project in Houston, TX, with a 12-year lease and expected completion in Q4 2026.

• Current income taxes expected at CAD 2.8 million per quarter for the remainder of 2025.