Plaza Retail REIT (PLZ.UN) Q4 2023 earnings summary

Executive summary

• FY 2023 revenue rose 2.5% YoY to $114.1M, while NOI slipped 0.3% to $70.4M and net income fell to $20.3M from $54.2M.

• Q4 revenue increased 3.5% YoY to $29.0M; the quarter recorded a $3.8M loss versus $14.2M profit a year earlier.

Financial highlights

• Q4 fair value change on investment properties was a $9.5M loss versus a $6.4M gain in Q4 2022; FY change was a $20.0M loss versus an $8.2M gain.

• FY NOI was $70.4M, down $227K YoY; operating expense increases, a tenant allowance for delayed development-premises delivery and asset sales offset growth from same-asset properties and additions.

• Same-asset NOI grew $69K, or 0.4%, in Q4 and $717K, or 1.1%, for FY, driven by rent escalations and renewals partly offset by higher operating expenses.

Outlook and guidance

• Management expects to move beyond real estate headwinds and pursue strong demand from essential-needs retailers serving non-discretionary spending.

• Forward outlook assumes development progress, continued tenant demand and the ability to lease or re-lease space at anticipated rents.