SmartCentres Real Estate Investment Trust

Q2 FFO was $0.58 per unit, unchanged from the comparable period last year. FFO with adjustments was $0.54 per unit versus $0.55 in Q2 2025. Same-property NOI grew 2.6% for the quarter, or 4.4% ex-anchors, and occupancy reached 98.1% for in-place and committed deals. Cash collection was 99%, the payout ratio to AFFO was 90.5% for the trailing 12 months ended June 30, 2026, and adjusted debt to adjusted EBITDA was 9.8x. The REIT also recorded a $196.2 million fair value loss on investment properties, mainly tied to deferred development activity on certain properties under development. Management maintained the distribution at an annualized rate of $1.85 per unit. On liquidity, the company said it had about $715 million, or $965 million including accordion capacity, and extended its corporate revolver to 2031. Forward-looking comments included Toronto Premium Outlets expansion construction starting in Q4, with average rents in the triple digits, and a long-term target of roughly 3 shopping center deliveries or projects under construction annually by 2027 if execution goes smoothly.

Mitchell Goldhar said Q2 was “very solid in all categories,” emphasizing stronger leasing, higher occupancy, and rent growth across the portfolio. He framed development as the key long-term growth engine, saying the company prefers low-rise projects with quick rent commencement and pre-leased anchor tenants rather than speculative density plays. He also said the retail expansion program will continue around major tenants like Walmart, Loblaws, and Costco, while balance-sheet management remains careful and 88% of debt is fixed rate.

Peter Slan focused on stable earnings, funding, and balance-sheet metrics. He said FFO was flat at $0.58 per unit, FFO with adjustments slipped modestly to $0.54 from $0.55 due mainly to higher interest expense and G&A tied to the new long-term incentive plan, partly offset by net rental income growth. He noted the payout ratio to AFFO was 90.5%, debt-to-EBITDA was 9.8x, and liquidity was approximately $715 million, or $965 million with accordion capacity, after extending the revolver to 2031. He also explained the $196.2 million fair value loss on investment properties was driven mainly by deferred development activity, and said the TRS was unwound with a modest gain and will no longer be reported after Q2.

Analysts focused on capital allocation, development intensity, dispositions, and the leasing/ramp timing of the Toys’R’Us backfill and Toronto Premium Outlets expansion. Management said it does not currently plan to buy back units despite the discount to IFRS fair value, and reiterated that development is the preferred use of capital because it is accretive and often anchored/pre-leased. On dispositions, management said the $200 million to $300 million pipeline over the next 2 to 3 years is still intact, though transaction activity remains slow but improving. On the development write-downs and land values, Mitch Goldhar said the marks were not driven by a negotiation and felt residential density values have likely bottomed out, with some transactions returning to the market but still needing time to build momentum.