SmartCentres Real Estate Investment Trust Releases Second Quarter Results for 2025

TORONTO--(BUSINESS WIRE)--SmartCentres Real Estate Investment Trust (“SmartCentres”, the “Trust” or the “REIT”) (TSX: SRU.UN) is pleased to report its financial and operating results for the quarter ended June 30, 2025.

“Building on Q1, we are pleased to report continued momentum in leasing demand and operational performance in Q2,” said Mitchell Goldhar, CEO of SmartCentres. “Occupancy has improved to 98.6% with approximately 148,000 square feet leased up during the quarter and rent growth of 8.5% (excluding Anchors). Same Properties NOI increased by 4.8% (7.7% excluding Anchors) showcasing improving customer traffic and a strengthened tenant base. Pacific Fresh and Costco both took possession of large spaces during the quarter and are expected to open later this year. Our development pipeline continues to add to the bottom-line with the completion this quarter of three self-storage projects and the closing of nine townhomes at our Vaughan NW project.”

2025 Second Quarter Highlights

Retail Operations

• Improving customer traffic and a strengthened tenant base delivered strong Same Properties NOI⁽¹⁾ for the three months ended June 30, 2025 which increased by 4.8% (7.7% excluding Anchors) compared to the same period in 2024.
• 147,818 square feet leased during the quarter, resulting in an in-place and committed occupancy rate of 98.6% as of June 30, 2025. In addition, growing demand for new-build retail continues with approximately 38,740 square feet executed during the quarter.
• Extended or finalized 82.1% of all leases maturing in 2025, with strong rent growth of 8.5%, excluding Anchors.
• In April 2025, Pacific Fresh took possession of 136,703 square feet in Vaughan, previously occupied by Lowe’s, and Costco took possession of 125,040 square feet at Winston Churchill and highway 401. Both tenants plan to open later in the year.

Development

• Significant development pipeline is expected to provide long-term portfolio expansion and profitable growth from the approximately 58.9 million square feet (at the Trust’s share) of zoned development permissions of various forms, including 0.8 million square feet currently under construction.
• Construction of self-storage facilities in Toronto (Gilbert Ave.), Toronto (Jane St.), and Dorval (St-Regis Blvd.) is substantially complete, with all three facilities opened during the quarter. Construction is underway at Montreal (Notre Dame St. W), and Laval E, Quebec, with facilities expected to open in 2026. Site preparation and demolition works were completed at Burnaby, British Columbia, with building construction commencing shortly and expected to open in 2027.
• Construction of Phase I of the Vaughan NW townhomes is mostly completed, with nine units closed in Q2 2025. As at June 30, 2025, a total of 98 out of the 120 units in Phase I have closed.

Financial

• Net rental income and other for the three months ended June 30, 2025 was $141.3 million representing an increase of $8.1 million or 6.1% compared to the same period in 2024. This increase was primarily due to lease-up and renewal activities mainly from retail properties.
• FFO per Unit⁽¹⁾ for the three months ended June 30, 2025, was $0.58 compared to $0.50 for the same period in 2024. This increase was primarily due to an increase in NOI mainly due to lease-up activities and changes in fair value adjustment on the TRS resulting from fluctuations in the Trust’s Unit price, partially offset by a decrease in interest income as a result of the repayment of mortgage receivables and lower loan interest rates compared to the prior year period. FFO with adjustments per Unit⁽¹⁾ for the three months ended June 30, 2025, was $0.55 compared to $0.51 for the same period in 2024, an increase of 7.8%.
• Net income and comprehensive income⁽¹⁾ for the three months ended June 30, 2025, decreased by $19.7 million compared to the same period in 2024. This decrease was mainly driven by a $27.7 million reduction in fair value gain on investment properties, partially offset by a $10.2 million increase in NOI primarily due to lease-up activities for retail and mixed-use properties.

(1)	Represents a non-GAAP measure. The Trust’s method of calculating non-GAAP measures may differ from other reporting issuers’ methods and, accordingly, may not be comparable. For additional information, please see “Non-GAAP Measures” in this Press Release.

Selected Consolidated Operational, Mixed-Use Development and Financial Information

(in thousands of dollars, except per Unit and other non-financial data)
As at		June 30, 2025	December 31, 2024	June 30, 2024
Portfolio Information (Number of properties)
Retail properties		155	155	155
Office properties		4	4	4
Self-storage properties		12	11	10
Residential properties		3	3	3
Industrial properties		1	1	1
Properties under development		22	21	22
Total number of properties with an ownership interest		197	195	195
Leasing and Operational Information^(1)
Gross leasable retail, office and industrial area (in thousands of sq. ft.)		35,566	35,300	35,199
In-place and committed occupancy rate		98.6 %	98.7 %	98.2 %
Average lease term to maturity (in years)		4.4	4.2	4.3
In-place net retail rental rate excluding Anchors (per occupied sq. ft.)		$23.91	$23.48	$23.14
Financial Information
Investment properties^(2)		10,726,823	10,659,783	10,556,877
Total unencumbered assets^(3)		9,646,721	9,464,521	9,309,221
NAV per Unit - diluted^(3)		$35.65	$36.03	$35.86
Debt to Aggregate Assets^(3)(4)(5)		44.2 %	43.7 %	43.7 %
Adjusted Debt to Adjusted EBITDA^(3)(4)(5)		9.6X	9.6X	9.9X
Weighted average interest rate^(3)(4)		3.94 %	3.92 %	4.25 %
Weighted average term of debt (in years)		3.1	3.1	3.1
Interest coverage ratio^(3)(4)		2.6X	2.5X	2.5X
	Three Months Ended June 30		Six Months Ended June 30
	2025	2024	2025	2024
Financial Information
Rentals from investment properties and other^(2)	223,715	228,051	453,053	445,290
Net income and comprehensive income^(2)	109,186	128,916	99,605	107,741
FFO^(3)(4)(6)	106,119	90,780	208,039	177,737
AFFO^(3)(4)(6)	97,809	83,386	196,236	164,773
Cash flows provided by operating activities^(2)	77,455	76,991	159,192	146,710
Net rental income and other^(2)	141,345	133,222	278,131	263,950
NOI^(3)(4)	149,279	139,062	292,803	275,137
Change in SPNOI^(3)(4)	4.8 %	1.3 %	4.4 %	1.9 %
Change in SPNOI excluding anchors^(3)(4)	7.7 %	2.2 %	7.5 %	3.0 %
Weighted average number of units outstanding – diluted^(7)	182,050,755	180,664,749	181,733,524	180,472,496
Net income and comprehensive income per Unit^(2)	$0.61/$0.60	$0.72/$0.71	$0.56/$0.55	$0.60/$0.60
FFO per Unit^(3)(4)(6)	$0.60/$0.58	$0.51/$0.50	$1.17/$1.14	$1.00/$0.98
FFO with adjustments per Unit^(3)(4)	$0.56/$0.55	$0.52/$0.51	$1.11/$1.09	$1.04/$1.03
AFFO per Unit^(3)(4)(6)	$0.55/$0.54	$0.47/$0.46	$1.10/$1.08	$0.92/$0.91
AFFO with adjustments per Unit^(3)(4)	$0.52/$0.51	$0.48/$0.47	$1.04/$1.03	$0.97/$0.96
Payout Ratio to AFFO^(3)(4)(6)	84.3 %	98.8 %	84.0 %	100.0 %
Payout Ratio to AFFO with adjustments^(3)(4)	89.4 %	96.9 %	88.7 %	95.6 %
Payout Ratio to cash flows provided by operating activities	106.5 %	107.0 %	103.6 %	112.3 %

(1)	Excluding residential and self-storage area.
(2)	Represents a Generally Accepted Accounting Principles (“GAAP”) measure.
(3)	Represents a non-GAAP measure. The Trust’s method of calculating non-GAAP measures may differ from other reporting issuers’ methods and, accordingly, may not be comparable. For additional information, please see “Non-GAAP Measures” in this Press Release.
(4)	Includes the Trust’s proportionate share of equity accounted investments.
(5)	As at June 30, 2025, cash-on-hand of $28.8 million was excluded for the purposes of calculating the applicable ratios (December 31, 2024 – $34.9 million, June 30, 2024 – $43.4 million).
(6)	The calculation of the Trust’s FFO and AFFO and related payout ratios, including comparative amounts, are financial metrics that were determined based on the REALPAC White Paper on FFO and AFFO issued in January 2022 (“REALPAC White Paper”). Comparison with other reporting issuers may not be appropriate. The payout ratio to AFFO is calculated as declared distributions divided by AFFO.
(7)	The diluted weighted average includes the vested portion of the deferred units issued pursuant to the deferred unit plan, and vested EIPs granted pursuant to the equity incentive plan.

Development and Intensification Summary

The following table provides additional details on the Trust’s 7 development initiatives that are currently under construction or where initial siteworks have begun (in order of estimated initial occupancy/closing date):

Projects under construction (Location/Project Name)	Type	Trust’s share	Actual / estimated initial occupancy / closing date	% of capital spend	GFA^(1) (sq. ft.)	No. of residential units
Mixed-use Developments
Vaughan NW (Phase I & II)	Townhomes	50%	Q1 2024	66%	366,000	174
Montreal (Notre-Dame)	Self-storage	50%	Q2 2026	38%	177,000	N/A
Laval East	Self-storage	50%	Q3 2026	27%	178,000	N/A
Burnaby	Self-storage	50%	Q1 2027	33%	133,000	N/A
Vaughan / ArtWalk	Condo	50%	Q2 2027	39%	300,000	340
Ottawa SW	Residential Apartments	50%	Q3 2027	30%	361,000	425
Total Mixed-use Developments					1,515,000	939
Retail Development
Toronto (Laird)	Retail	50%	Q2 2026	54%	225,000	N/A

(1)	GFA represents Gross Floor Area.

Reconciliations of Non-GAAP Measures

The following tables reconcile the non-GAAP measures to the most comparable GAAP measures for the three and six months ended June 30, 2025, and the comparable period in 2024. Such measures do not have a standardized meaning prescribed by IFRS and may not be comparable to similar measures disclosed by other issuers.

Net Operating Income (including the Trust’s Interests in Equity Accounted Investments)

(in thousands of dollars)	Three Months Ended June 30, 2025						Three Months Ended June 30, 2024
	GAAP Basis		Proportionate Share Reconciliation		Total Proportionate Share^(1)		GAAP Basis		Proportionate Share Reconciliation		Total Proportionate Share^(1)
Net rental income and other
Rentals from investment properties and other	$218,770		$12,976		$231,746		$211,381		$11,272		$222,653
Property operating costs and other	(80,179	)	(5,428	)	(85,607	)	(80,468	)	(5,427	)	(85,895	)
	$138,591		$7,548		$146,139		$130,913		$5,845		$136,758
Residential sales revenue and other^(2)	4,945		66		5,011		16,670		37		16,707
Residential cost of sales and other	(2,191	)	320		(1,871	)	(14,361	)	(42	)	(14,403	)
	$2,754		$386		$3,140		$2,309		$(5	)	$2,304
NOI	$141,345		$7,934		$149,279		$133,222		$5,840		$139,062

(in thousands of dollars)	Six Months Ended June 30, 2025						Six Months Ended June 30, 2024
	GAAP Basis		Proportionate Share Reconciliation		Total Proportionate Share^(1)		GAAP Basis		Proportionate Share Reconciliation		Total Proportionate Share^(1)
Net rental income and other
Rentals from investment properties and other	$446,094		$25,953		$472,047		$427,018		$22,194		$449,212
Property operating costs and other	(171,268	)	(11,674	)	(182,942	)	(165,621	)	(10,885	)	(176,506	)
	$274,826		$14,279		$289,105		$261,397		$11,309		$272,706
Residential sales revenue and other^(2)	6,959		75		7,034		18,272		66		18,338
Residential cost of sales and other	(3,654	)	318		(3,336	)	(15,719	)	(188	)	(15,907	)
	$3,305		$393		$3,698		$2,553		$(122	)	$2,431
NOI	$278,131		$14,672		$292,803		$263,950		$11,187		$275,137

(1)	This column contains non-GAAP measures because it includes figures that are recorded in equity accounted investments. The Trust’s method of calculating non-GAAP measures may differ from other reporting issuers’ methods and, accordingly, may not be comparable. For additional information, please see “Non-GAAP Measures” in this Press Release.
(2)	Includes additional partnership profit and other revenues.

Same Properties NOI

	Three Months Ended June 30				Six Months Ended June 30
(in thousands of dollars)	2025		2024		2025		2024
Net rental income and other	$141,345		$133,222		$278,131		$263,950
NOI from equity accounted investments^(1)	7,934		5,840		14,672		11,187
Total portfolio NOI before adjustments^(1)	$149,279		$139,062		$292,803		$275,137
Adjustments:
Lease termination	(126	)	(592	)	(453	)	(592	)
Net profit on condo and townhome closings	(3,140	)	(2,304	)	(3,698	)	(2,431	)
Other adjustments^(2)	(235	)	1,527		1,673		2,701
Total portfolio NOI after adjustments^(1)	$145,778		$137,693		$290,325		$274,815
NOI sourced from acquisitions, dispositions, Earnouts and developments	(2,267	)	(748	)	(4,394	)	(996	)
Same Properties NOI^(1)	$143,511		$136,945		$285,931		$273,819

(1)	Represents a non-GAAP measure. The Trust’s method of calculating non-GAAP measures may differ from other reporting issuers’ methods and, accordingly, may not be comparable. For additional information, please see “Non-GAAP Measures” in this Press Release.
(2)	Includes items such as adjustments relating to royalties, straight-line rent and amortization of tenant incentives.

Reconciliation of FFO

	Three Months Ended June 30				Six Months Ended June 30
(in thousands of dollars)	2025		2024		2025		2024
Net income and comprehensive income	$109,186		$128,916		$99,605		$107,741
Add (Deduct):
Fair value adjustment on investment properties and financial instruments^(1)	(26,744	)	(34,665	)	67,915		63,837
Gain (Loss) on derivative – TRS	2,551		(3,994	)	6,875		(10,143	)
Gain (Loss) on sale of investment properties	—		—		(7	)	142
Amortization of intangible assets and tenant improvement allowance	2,324		2,257		4,814		4,437
Distributions on Units classified as liabilities and vested deferred units and EIP	5,366		4,778		10,437		9,374
Salaries and related costs attributed to leasing activities^(2)	2,090		2,301		4,473		4,708
Adjustments relating to equity accounted investments^(3)	11,346		(8,813	)	13,927		(2,359	)
FFO^(4)	$106,119		$90,780		$208,039		$177,737
Add (Deduct) non-recurring adjustments:
Gain (Loss) on derivative – TRS	(2,551	)	3,994		(6,875	)	10,143
FFO sourced from condo and townhome closings	(3,140	)	(2,353	)	(3,698	)	(2,553	)
Transactional FFO – sale of land^(4)	128		—		170		—
FFO with adjustments^(4)	$100,556		$92,421		$197,636		$185,327

(1)	Includes fair value adjustments on investment properties and financial instruments. Fair value adjustment on investment properties is described in “Investment Properties” in the Trust’s MD&A. Fair value adjustment on financial instruments comprises the following financial instruments: units classified as liabilities, Deferred Unit Plan (“DUP”), Equity Incentive Plan (“EIP”), TRS, and interest rate swap agreements. The significant assumptions made in determining the fair value are more thoroughly described in the Trust’s unaudited interim condensed consolidated financial statements for the three and six months ended June 30, 2025. For details, please see discussion in “Results of Operations” section in the MD&A.
(2)	Salaries and related costs attributed to leasing activities of $4.5 million were incurred in the six months ended June 30, 2025 (six months ended June 30, 2024 – $4.7 million) and were eligible to be added back to FFO based on the definition of FFO, in the REALPAC White Paper, which provided for an adjustment to incremental leasing expenses for the cost of salaried staff. This adjustment to FFO results in more comparability between Canadian publicly traded real estate entities that expensed their internal leasing departments and those that capitalized external leasing expenses.
(3)	Includes tenant improvement amortization, indirect interest with respect to the development portion, fair value adjustment on investment properties, loss (gain) on sale of investment properties, and adjustment for supplemental costs.
(4)	Represents a non-GAAP measure. The Trust’s method of calculating non-GAAP measures may differ from other reporting issuers’ methods and, accordingly, may not be comparable. For definitions and basis of presentation of the Trust’s non-GAAP measures, refer to “Presentation of Certain Terms Including Non-GAAP Measures” and “Non-GAAP Measures” in the MD&A.

Reconciliation of AFFO

	Three Months Ended June 30				Six Months Ended June 30
(in thousands of dollars)	2025		2024		2025		2024
FFO^(1)	$106,119		$90,780		$208,039		$177,737
Add (Deduct):
Straight-line rents	(1,457	)	(963	)	(1,888	)	(1,700	)
Adjusted salaries and related costs attributed to leasing	(2,090	)	(2,301	)	(4,473	)	(4,708	)
Capital expenditures, leasing commissions, and tenant improvements	(4,763	)	(4,130	)	(5,442	)	(6,556	)
AFFO^(1)	$97,809		$83,386		$196,236		$164,773
Add (Deduct) non-recurring adjustments:
Gain (Loss) on derivative – TRS	(2,551	)	3,994		(6,875	)	10,143
FFO sourced from condo and townhome closings	(3,140	)	(2,353	)	(3,698	)	(2,553	)
Transactional FFO – sale of land^(1)	128		—		170		—
AFFO with adjustments^(1)	$92,246		$85,027		$185,833		$172,363

(1)	Represents a non-GAAP measure. The Trust’s method of calculating non-GAAP measures may differ from other reporting issuers’ methods and, accordingly, may not be comparable. For additional information, please see “Non-GAAP Measures” in this Press Release.

Adjusted EBITDA

The following table presents a reconciliation of net income and comprehensive income to Adjusted EBITDA:

	Rolling 12 Months Ended
(in thousands of dollars)	June 30, 2025		June 30, 2024
Net income and comprehensive income	$283,933		$337,080
Add (Deduct) the following items:
Net interest expense	195,100		176,559
Amortization of equipment, intangible assets and tenant improvements	12,453		11,659
Fair value adjustments on investment properties and financial instruments	68,880		3,422
Adjustment for supplemental costs	4,156		4,115
Gain (Loss) on sale of investment properties	(26	)	75
Adjusted EBITDA^(1)	$564,496		$532,910

(1)	Represents a non-GAAP measure. The Trust’s method of calculating non-GAAP measures may differ from other reporting issuers’ methods and, accordingly, may not be comparable. For additional information, please see “Non-GAAP Measures” in this Press Release.

Net Asset Value

The following table presents NAV and NAV per unit diluted as at each of the reporting dates:

(in thousands of dollars, except per Unit information)	June 30, 2025	March 31, 2025	December 31, 2024
Total equity	$6,292,574	$6,250,888	$6,337,581
LP Units classified as liabilities	200,520	198,169	191,665
NAV^(1)	$6,493,094	$6,449,057	$6,529,246
Units outstanding - diluted^(2)	182,134,237	181,595,454	181,205,536
NAV per Unit - diluted^(1)	$35.65	$35.51	$36.03

(1)	Represents a non-GAAP measure. The Trust’s method of calculating non-GAAP measures may differ from other reporting issuers’ methods and, accordingly, may not be comparable. For additional information, please see “Non-GAAP Measures” in this Press Release.
(2)	Total diluted Units outstanding include Trust Units and LP Units, including Units classified as liabilities, vested portion of the deferred units issued pursuant to the deferred unit plan and vested EIPs granted pursuant to the equity incentive plan.

Conference Call

Management will hold a conference call on Friday, August 8, 2025 at 11:00 a.m. (ET).

Interested parties are invited to access the call by dialing 1-855-353-9183 and then keying in the participant access code 56742#.

A recording of this call will be made available Friday, August 8, 2025 through to Friday, August 15, 2025. To access the recording, please call 1-855-201-2300, enter the conference access code 56742# and then key in the playback access code 56742#.

About SmartCentres

SmartCentres is one of Canada’s largest fully integrated REITs, with a best-in-class and growing mixed-use portfolio featuring 197 strategically located properties in communities across the country. SmartCentres has approximately $12.0 billion in assets and owns 35.6 million square feet of income producing value-oriented retail and first-class office properties with 98.6% in place and committed occupancy, on 3,500 acres of owned land across Canada.

Non-GAAP Measures

The non-GAAP measures used in this Press Release, including but not limited to, AFFO, AFFO with adjustments, AFFO per Unit, AFFO with adjustments per Unit, Payout Ratio to AFFO, Payout Ratio to AFFO with adjustments, Unencumbered Assets, NOI, Debt to Aggregate Assets, Interest Coverage Ratio, Adjusted Debt to Adjusted EBITDA, Unsecured/Secured Debt Ratio, FFO, FFO with adjustments, FFO per Unit, FFO with adjustments per Unit, Net Asset Value (“NAV”), Same Properties NOI, Same Properties NOI excluding Anchors, Debt to Gross Book Value, Weighted Average Interest Rate, Transactional FFO, and Total Proportionate Share, do not have any standardized meaning prescribed by International Financial Reporting Standards (“IFRS”) and are therefore unlikely to be comparable to similar measures presented by other issuers. Additional information regarding these non-GAAP measures is available in the Management’s Discussion and Analysis of the Trust for the three and six months ended June 30, 2025, dated August 7, 2025 (the “MD&A”), and is incorporated by reference. The information is found in the “Presentation of Certain Terms Including Non-GAAP Measures” and “Non-GAAP Measures” sections of the MD&A, which is available on SEDAR+ at www.sedarplus.ca. Reconciliations of non-GAAP financial measures to the most directly comparable IFRS measures are found in “Reconciliations of Non-GAAP Measures” of this Press Release.

Full reports of the financial results of the Trust for the three and six months ended June 30, 2025 are outlined in the unaudited interim condensed consolidated financial statements and the related MD&A of the Trust for the three and six months ended June 30, 2025, which are available on SEDAR+ at www.sedarplus.ca.

Cautionary Statements Regarding Forward-looking Statements

Certain statements in this Press Release are "forward-looking statements" that reflect management's expectations regarding the Trust's future growth, results of operations, performance and business prospects and opportunities. More specifically, certain statements including, but not limited to, statements related to SmartCentres’ expectations relating to cash collections, SmartCentres’ expected or planned development plans and joint venture projects, including the described type, scope, costs and other financial metrics and the expected timing of construction and condo closings and statements that contain words such as "could", "should", "can", "anticipate", "expect", "believe", "will", "may" and similar expressions and statements relating to matters that are not historical facts, constitute "forward-looking statements". These forward-looking statements are presented for the purpose of assisting the Trust's Unitholders and financial analysts in understanding the Trust's operating environment and may not be appropriate for other purposes. Such forward-looking statements reflect management's current beliefs and are based on information currently available to management.

However, such forward-looking statements involve significant risks and uncertainties. A number of factors could cause actual results to differ materially from the results discussed in the forward-looking statements, including risks associated with potential acquisitions not being completed or not being completed on the contemplated terms, public health crises, real property ownership and development, debt and equity financing for development, interest and financing costs, construction and development risks, and the ability to obtain commercial and municipal consents for development. These risks and others are more fully discussed under the heading “Risks and Uncertainties” and elsewhere in SmartCentres’ most recent Management’s Discussion and Analysis, as well as under the heading “Risk Factors” in SmartCentres’ most recent annual information form. Although the forward-looking statements contained in this Press Release are based on what management believes to be reasonable assumptions, SmartCentres cannot assure investors that actual results will be consistent with these forward-looking statements. The forward-looking statements contained herein are expressly qualified in their entirety by this cautionary statement. These forward-looking statements are made as at the date of this Press Release and SmartCentres assumes no obligation to update or revise them to reflect new events or circumstances unless otherwise required by applicable securities legislation.

Material factors or assumptions that were applied in drawing a conclusion or making an estimate set out in the forward-looking information may include, but are not limited to: a stable retail environment; a continuing trend toward land use intensification, including residential development in urban markets and continued growth along transportation nodes; access to equity and debt capital markets to fund, at acceptable costs, future capital requirements and to enable our refinancing of debts as they mature; that requisite consents for development will be obtained in the ordinary course, construction and permitting costs consistent with the past year and recent inflation trends.