RioCan Real Estate Investment Trust (REI-UN) Q4 2024 earnings summary

Executive summary

• Achieved record operational and financial results in 2024, including record-high adjusted FFO per unit of CAD 1.81, driven by strategic restructuring, technological advancements, and a focus on high-quality assets in major Canadian markets.

• Maintained disciplined growth with high-quality tenants, strong leasing spreads, prudent capital allocation, and a 4.3% distribution increase, marking the fourth consecutive annual increase.

• Demonstrated resilience in both retail and residential segments, with strong pre-sales in condos, robust rental portfolio performance, and a diversified, necessity-driven tenant base.

• Portfolio consists of 178 properties totaling approximately 32 million sq. ft. of net leasable area, with 98.0% committed occupancy and a major urban focus.

• Net income per unit for 2024 was CAD 1.58, up CAD 1.45 per unit year-over-year, aided by a significantly lower fair value loss on investment properties.

Financial highlights

• Achieved FFO adjusted per unit of CAD 1.81 for 2024, up 2.3% year-over-year, adjusted for CAD 7.9 million in restructuring costs.

• Commercial same-property NOI growth was 2.2% for 2024, with Q4 2024 at 3.5%; residential rental operations delivered 5.1% same property NOI growth.

• Blended leasing spread reached 18.7%, with new lease spreads at 36.7% and renewal spreads at 13.1%; 4.8 million sq. ft. of leases finalized, including 1.5 million sq. ft. of new leases.

• Net debt to EBITDA improved to 8.98x, within the target range of 8-9x, and liquidity at year-end was CAD 1.7 billion.

• FFO payout ratio for 2024 was 61.9%, the lowest among peers, allowing retention of approximately CAD 150 million equity capital annually.

Outlook and guidance

• 2025 FFO per unit guidance set at CAD 1.89–1.92, representing approximately 6% growth, underpinned by commercial same-property NOI growth of 3.5%.

• Payout ratio expected to remain at approximately 60%, supporting sustainable distribution increases.

• Committed occupancy expected to stay near 98%, with further NOI ramp-up from development completions and condo gains projected at CAD 70–80 million in 2025.

• G&A expense as a percentage of rental revenue expected to improve to 4% in 2025.

• Guidance assumes normalized economic conditions and does not factor in potential tariff or macroeconomic impacts.