Canada's Primaris REIT Q2 AFFO per unit falls on vacant HBC space and portfolio changes

Overview

• Canada shopping centre REIT's Q2 rental revenue rose yr/yr, FFO per unit up 1.3%

• Adjusted EPS (AFFO per unit) fell 8.7% from prior year

• In-place occupancy declined due to vacant HBC space and portfolio changes

Outlook

• Primaris REIT reaffirms 2026 occupancy guidance at 86% to 88%

• Company maintains 2026 FFO per unit (fully diluted) guidance at C$1.85 to C$1.90

• Primaris expects 2026 Same Properties Cash NOI growth of 1.0% to 3.0%

Result Drivers

• ACQUISITIONS AND LEASING - Growth in NOI and FFO per unit was driven by contributions from 2025 acquisitions and new leasing activity, which offset lost revenue from disclaimed HBC leases

• HBC SPACE RE-LEASING - Progress in re-leasing former HBC space, with 84% leased or in advanced negotiations, is expected to generate higher rental revenue than when occupied by HBC

• OCCUPANCY PRESSURE - In-place occupancy declined due to vacant HBC space and lower occupancy at acquisitions, partly offset by leasing activity in Same Properties

Company press release: ID:nBw54YHzFa

Key Details

Analyst Coverage

• The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 8 "strong buy" or "buy", 1 "hold" and no "sell" or "strong sell"

• The average consensus recommendation for the commercial reits peer group is "buy"

• Wall Street's median 12-month price target for Primaris Real Estate Investment Trust is C$24.00, about 3.4% above its July 28 closing price of C$23.20

• The stock recently traded at 14 times the next 12-month earnings vs. a P/E of 11 three months ago

Reuters Recommended Reads

• July 27 - Canada's First Capital REIT Q2 net income plunges on impairment, credit losses

• July 28 - Canada's Allied Properties REIT Q2 net loss widens on property fair value hit

• July 28 - Canada's Boardwalk REIT Q2 FFO per unit rises

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(This story was created using Reuters automation and AI based on LSEG and company data. It was checked and edited by a Reuters journalist prior to publication.)