Nexus Industrial REIT (NXR-UN) Q3 2025 earnings summary

Executive summary

• Completed two new industrial developments totaling 440,000 sq ft in St. Thomas, ON and Calgary, AB, generating CAD 6.6 million annual stabilized NOI at a 9.4% unlevered return on costs.

• Transitioned to a pure-play industrial REIT, with over 99% of NOI from industrial assets after selling nearly all retail and office properties, including 15 retail, 1 office, and 3 industrial properties for $71.3 million year-to-date.

• Achieved strong leasing activity, including backfilling major vacancies, renewing 150,000 sq ft at a 13% average rent lift, and signing a 15-year lease for a major London, Ontario asset, raising industrial occupancy to 96%.

Financial highlights

• Q3 2025 net income was CAD 3.4 million, a CAD 49.4 million increase year-over-year, mainly due to higher fair value adjustments on Class B LP units and derivatives.

• Net operating income for Q3 was CAD 32.2 million, down 1.1% year-over-year due to property dispositions, partially offset by growth in industrial Same Property NOI and completed developments.

• Industrial Same Property NOI grew 2.9% year-over-year to $29.5 million in Q3 and $81.6 million for the nine months.

• Normalized AFFO per unit was CAD 0.146, down from CAD 0.157 a year ago, driven by lower NOI and higher G&A expenses.

• NAV per unit at September 30, 2025, was $12.98, down $0.19 from last quarter and 1.6% from December 31, 2024, due to new unit issuance for development funding.

Outlook and guidance

• Expects full-year 2025 industrial Same Property NOI growth of approximately 3%, revised from prior mid-single digit expectations due to timing of lease-up.

• Guidance for 2025 was slightly revised downward due to slower lease-up at two properties, but no impact is expected for 2026.

• Organic growth anticipated to strengthen in early 2026 as new leases and rent steps take effect.

• Distributions are considered sustainable, with normalized AFFO payout ratios (diluted) at 107.1% for Q3 and 104.0% for the nine months.