Primaris Real Estate Investment Trust (PMZ-UN) Q3 2024 earnings summary

Executive summary

• Achieved a beat-and-raise quarter with continued growth across key metrics, driven by lease conversions, rising recovery ratios, and robust leasing activity, with high occupancy and tenant health.

• Completed acquisitions of Les Galeries de la Capitale, Halifax Shopping Centre, and Conestoga Mall, enhancing the portfolio and public float, and hosted a successful Investor Day outlining three-year targets.

• Maintained a conservative financial profile, with a focus on scale, disciplined capital allocation, and retailer affordability, positioning as the only Canadian REIT focused on enclosed shopping centres.

• Q3 2024 total rental revenue reached $119.5 million, with 4.6% growth in Same Properties Cash NOI and shopping centres Cash NOI year-over-year.

• Net Asset Value per unit was $21.82; total assets stood at $4.1 billion, with $701.6 million in liquidity and $3.3 billion in unencumbered assets.

Financial highlights

• FFO per unit guidance for 2024 raised to CAD 1.66–1.68, up from prior guidance, with Q3 FFO per diluted unit (ex-financing) at CAD 0.443, up from CAD 0.421 year-over-year.

• Same Properties Cash NOI grew 4.6% year-over-year to $54.7 million; total Cash NOI was $70.0 million.

• Portfolio in-place occupancy at 93.4%, committed occupancy at 94.8% as of Q3 2024, with strong leasing momentum and 1.8% weighted average spread on renewals.

• FFO payout ratio was 52.5% and AFFO payout ratio was 72.4% for Q3 2024; distributions per Trust Unit were $0.210.

• $3.3B in unencumbered assets and 5.8x average net debt to adjusted EBITDA.

Outlook and guidance

• 2024 FFO per average diluted unit guidance raised to $1.66–$1.68; Same Properties Cash NOI growth guidance maintained at 3.0%–4.0% for 2024.

• Three-year targets include in-place occupancy of 96%, annual Same Properties Cash NOI growth of 3–4%, and annual FFO per unit growth of 4–6%.

• No change in occupancy or capital expenditure guidance; capacity for over $1.5 billion in acquisitions with no near-term refinancing risk.

• Guidance does not include future acquisitions/dispositions; 2025 guidance and potential distribution increase to be communicated later.

• Anticipate material growth in NAV and cash flow per unit, supported by internal growth and capital recycling.