SmartCentres Real Estate Investment Trust (SRU.UN) Q1 2026 earnings summary

Executive summary

• 80% of 2026 lease maturities extended by Q1, with 11.5% rental lifts ex anchors and strong tenant demand, especially from grocers and TJX banners.

• Achieved strong financial and operational performance in Q1 2026, driven by robust rental growth and resilient leasing momentum.

• Occupancy temporarily dipped to 97.6% due to Toys"R"Us termination, but would be 98% with new leases signed post-quarter.

• Retail expansion program launched with three board-approved projects, two starting construction later this year, expected to deliver accretive FFO growth.

• Continued expansion of self-storage facilities and commenced new retail development projects across Canada.

Financial highlights

• Same-Property NOI grew 3.4% ex anchors in Q1 and 4.8% over the trailing 12 months ex anchors.

• FFO per unit (diluted) at $0.54, AFFO per unit (diluted) at $0.52, with payout ratio to AFFO at 86.4%.

• Net income and comprehensive income increased by $139.5 million year-over-year, mainly due to a $50.3 million fair value gain on investment properties.

• Adjusted debt to adjusted EBITDA at 9.7x, pro forma 9.7x after post-quarter debt repayment.

• Distributions maintained at CAD 1.85 per unit; payout ratio to AFFO stable at 89.9% for the rolling 12 months.

Outlook and guidance

• Rental growth and occupancy momentum expected to continue through 2026.

• Q1 likely marked the low point for occupancy; NOI and rent expected to ramp up in the back half of the year.

• Ongoing development pipeline with 88 million sq. ft. of projected mixed-use initiatives.

• Economic rent from new grocer and Winners leases expected to commence in late 2026.

• Targeting CAD 200–300 million in asset sales over the next two to three years, mainly from residential land, if market conditions permit.