FREDERICTON, NB, Aug. 5, 2026 /CNW/ -- Plaza Retail REIT (TSX: PLZ.UN) ("Plaza" or the "REIT") today announced its financial results for the three and six months ended June 30, 2026.
"We delivered solid growth through the first half of 2026, supported by continued execution across our portfolio," said Jason Parravano, President and Chief Executive Officer. FFO per unit increased to $0.105 for the quarter, $0.202 year-to-date, up 5.0% and 7.4% respectively, compared with the same periods in the prior year (or 8.3% year-to-date after adjusting for certain timing and severance impacts). AFFO per unit increased to $0.078 for the quarter, $0.152 year-to-date, up 16.4% and 7.0% respectively, compared with the same periods in the prior year (or 8.0% year-to-date after adjusting for certain timing and severance impacts). Our FFO and AFFO payout ratios also improved to 69.2% and 92.2% year-to-date, respectively, strengthening our financial flexibility and demonstrating that the structural changes made to the business over the past year are producing sustainable results and predictable growth.
Operating fundamentals remained resilient. Total NOI increased by 4.3% for the quarter, 3.4% year-to-date, and same asset NOI increased by 2.7% for the quarter, 2.3% year-to-date. Committed occupancy remained strong at 97.6%, supported by continued tenant demand, contractual rent growth and leasing activity across our essential retail portfolio.
"We remain focused on improving the quality, scale and earnings capacity of our portfolio," continued Mr. Parravano. "While we have selectively sold certain properties this year, we will continue to add square footage through developments, intensifications and other strategic initiatives. This reflects a deliberate approach to capital allocation. We are recycling capital from mature or non-core assets into opportunities that can generate stronger returns, improve portfolio quality and contribute to sustainable cash flow growth."
"Our progress is measured not simply by the number of properties we own, but by the quality and scale of our real estate, the cash flow it generates, and the value created on a per unit basis. With growing FFO and AFFO, improved payout ratios and a pipeline of projects advancing across the portfolio, we believe Plaza is well positioned to continue creating long term value for unitholders."
Summary of Selected IFRS Financial Results |
(CAD$000s, except percentages) | Three Months Ended June 30, 2026 | Three Months Ended June 30, 2025 | $ Change | % Change | Six Months Ended June 30, 2026 | Six Months Ended June 30, 2025 | $ Change | % Change |
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Revenues | $32,185 | $31,791 | $394 | 1.2 % | $64,695 | $62,928 | $1,767 | 2.8 % |
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Net operating income (NOI)(1) | $19,926 | $19,098 | $828 | 4.3 % | $38,721 | $37,442 | $1,279 | 3.4 % |
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Net change in fair value of investment properties | $5,100 | $1,279 | $3,821 | n/a | $7,218 | $3,415 | $3,803 | n/a |
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Profit and total comprehensive income | $16,601 | $12,653 | $3,948 | 31.2 % | $29,421 | $21,972 | $7,449 | 33.9 % |
(1) | This is a non-GAAP financial measure. Refer to the Non-GAAP Financial Measures defined here and in Part I and VII of the Management's Discussion and Analysis ("MD&A") ending June 30, 2026 for more information on each non-GAAP financial measure. |
Quarterly Highlights
- NOI was $19.9 million, up $828 thousand or 4.3% from the same period in 2025. The increase is due to increased revenue from leasing and rent escalations, in addition to improved cost recoveries over the same period in the prior year.
- Profit and total comprehensive income for the current quarter was $16.6 million compared to $12.7 million in the same period in the prior year. Profit and total comprehensive income was impacted by changes in fair value of investment properties, which accounted for $3.8 million of the increase over the same period in the prior year.
Year-To-Date Highlights
- NOI was $38.7 million, up $1.3 million or 3.4% from the same period in 2025. The increase is due to increased revenue from leasing and rent escalations, in addition to improved cost recoveries over the same period in the prior year, partially offset by higher operating expenses.
- Profit and total comprehensive income for the current year was $29.4 million compared to $22.0 million in the same period in the prior year. Profit and total comprehensive income was impacted by the change in share of profit of associates, which increased by $2.0 million over the same period in the prior year. This was mainly due to the non-cash fair value adjustment to the underlying investment properties, as well as 5400 Laurier Ouest Limited Partnership due to the sale of 5400 Laurier Ouest, Ste Hyacinthe, and acquisition of Plazacorp Ontario-1 Limited Partnership. Profit and total comprehensive income was also impacted by changes in fair value of investment properties, which accounted for $3.8 million of the increase.
Summary of Selected Non-IFRS Financial Results |
(CAD$000s, except percentages, units repurchased and per unit amounts) | Three Months Ended June 30, 2026 | Three Months Ended June 30, 2025 | $ Change | % Change | Six Months Ended June 30, 2026 | Six Months Ended June 30, 2025 | $ Change | % Change |
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FFO(1) | $11,670 | $11,187 | $483 | 4.3 % | $22,578 | $20,950 | $1,628 | 7.8 % |
FFO per unit(1) | $0.105 | $0.100 | $0.005 | 5.0 % | $0.202 | $0.188 | $0.014 | 7.4 % |
FFO payout ratio(1) | 66.9 % | 69.8 % | n/a | (4.1 %) | 69.2 % | 74.6 % | n/a | (7.2 %) |
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AFFO(1) | $8,668 | $7,511 | $1,157 | 15.4 % | $16,949 | $15,800 | $1,149 | 7.3 % |
AFFO per unit(1) | $0.078 | $0.067 | $0.011 | 16.4 % | $0.152 | $0.142 | $0.010 | 7.0 % |
AFFO payout ratio(1) | 90.1 % | 104.0 % | n/a | (13.4 %) | 92.2 % | 98.9 % | n/a | (6.8 %) |
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Same-asset NOI(1) | $19,606 | $19,099 | $507 | 2.7 % | $38,540 | $37,660 | $880 | 2.3 % |
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Committed occupancy – including non-consolidated investments(2) |
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| 97.6 % | 98.0 % | n/a | (0.4 %) |
Same-asset committed occupancy(3) |
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| 97.1 % | 97.6 % | n/a | (0.5 %) |
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(1) | This is a non-GAAP financial measure. Refer to the Non-GAAP Financial Measures defined here and in Part I and VII of the MD&A ending June 30, 2026 for more information on each non-GAAP financial measure. |
(2) | Excludes properties under development. |
(3) | Same-asset committed occupancy excludes properties under development and non-consolidated investments. |
Quarterly Highlights
- FFO & AFFO: For the three months ended June 30, 2026 FFO increased $483 thousand or 4.3% on a dollar basis and 5.0% on a per unit basis, compared with the same quarter in the prior year. FFO increased due to higher NOI from same-asset, acquisitions, intensifications, developments and properties transferred to income producing. FFO was also impacted by properties sold, from which the capital generated was recently deployed. In addition, FFO was impacted by a decrease in administrative costs, primarily due to accrued bonuses in the prior year. AFFO of $8.7 million increased $1.2 million or $15.4% on a dollar and 16.4% on a per unit basis compared to the same quarter in the prior year. AFFO was impacted by the changes in FFO noted above, as well as lower leasing costs and lower maintenance capital expenditures in the current period.
- Same-asset NOI increased by $507 thousand or 2.7% due to an increase in revenue from rent escalations and renewals, improved cost recoveries and operating expense timing.
Year-To-Date Highlights
- FFO & AFFO: For the six months ended June 30, 2026 FFO increased $1.6 million or 7.8% on a dollar basis and 7.4% on a per unit basis, when compared with the prior year-to-date. FFO increased due to higher NOI from same-asset, acquisitions, intensifications, developments and properties transferred to income producing. FFO was also impacted by properties sold, from which the capital generated was recently deployed. In addition, FFO was impacted by an increase in administrative costs, partially due to accrued bonuses as well as higher technology costs and professional fees in the current year, partially offset by reorganization costs in the prior year. AFFO increased by $1.1 million or 7.3% on a dollar basis and 7.0% on a per unit basis, when compared with the prior year-to-date. AFFO was impacted by the changes in FFO noted above, as well as higher leasing costs in the current year-to-date reflecting initiatives to attract higher-quality tenants and drive optimizations at existing properties to achieve improved rental spreads.
- Same-asset NOI increased by $880 thousand or 2.3% due to an increase in revenue from rent escalations and renewals, in addition to improved cost recoveries and operating expense timing during the current year-to-date.
Non-GAAP Financial Measures
This press release contains certain non-GAAP financial measures including FFO, AFFO and same-asset NOI. These measures are commonly used by entities in the real estate industry as useful metrics for measuring performance. However, they do not have a standardized meaning prescribed by IFRS Accounting Standards and are not necessarily comparable to similar measures presented by other publicly traded entities. These measures should be considered as supplemental in nature and not as a substitute for related financial information prepared in accordance with IFRS Accounting Standards. For further explanation of non-GAAP measures and their usefulness in assessing Plaza's performance, please refer to the section "Basis of Presentation" in Part I and the section "Explanation of Non-GAAP Measures" in Part VII of the REIT's Management's Discussion and Analysis as at June 30, 2026 which can be found on Plaza's website at www.plaza.ca and on SEDAR+ at www.sedarplus.ca.
The following tables reconcile the non-GAAP measures FFO, AFFO, and NOI to the most comparable IFRS measures.
Funds from Operations (FFO) and Adjusted Funds from Operations (AFFO)
Plaza's summary of FFO and AFFO for three and six months ended June 30, 2026, compared to the three and six months ended June 30, 2025, is presented below:
(000s – except per unit amounts and percentage data, unaudited) | 3 Months Ended June 30, 2026 | 3 Months Ended June 30, 2025 | Change over
Prior Period | 6 Months Ended June 30, 2026 | 6 Months Ended June 30, 2025 | Change over
Prior Period |
Profit and total comprehensive income for the period attributable to unitholders | $ 16,499 | $ 12,596 |
| $ 29,226 | $ 21,897 |
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Incremental leasing costs included in administrative expenses(7) | 531 | 550 |
| 1,280 | 830 |
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Amortization of debenture issuance costs(8) | - | (18) |
| (19) | (36) |
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Distributions on Class B exchangeable LP units included in finance costs – operations | 81 | 81 |
| 162 | 162 |
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Deferred income taxes | 232 | (9) |
| 305 | (75) |
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Right-of-use land lease principal repayments | (208) | (215) |
| (416) | (432) |
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Fair value adjustment to restricted and deferred units | 328 | 84 |
| 290 | 223 |
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Fair value adjustment to investment properties | (5,100) | (1,279) |
| (7,218) | (3,415) |
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Fair value adjustment to investments(9) | (1,783) | (845) |
| (1,979) | (59) |
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Fair value adjustment to Class B exchangeable LP units | 520 | 162 |
| 462 | 428 |
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Fair value adjustment to convertible debentures | - | 56 |
| 79 | 225 |
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Fair value adjustment to derivative assets and liabilities | 298 | (69) |
| (67) | 787 |
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Fair value adjustment to right-of-use land lease assets | 208 | 215 |
| 416 | 432 |
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Equity accounting adjustment(10) | 15 | (123) |
| (27) | 16 |
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Non-controlling interest adjustment(6) | 49 | 1 |
| 84 | (33) |
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FFO(1) | $ 11,670 | $ 11,187 | $ 483 | $ 22,578 | $ 20,950 | $ 1,628 |
FFO change over prior period - % |
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| 4.3 % |
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| 7.8 % |
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FFO(1) | $ 11,670 | $ 11,187 |
| $ 22,578 | $ 20,950 |
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Non-cash revenue – straight-line rent(5) | (210) | (65) |
| (503) | (159) |
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Leasing costs – existing properties(2) (5) (11) | (2,095) | (2,470) |
| (3,827) | (3,736) |
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Maintenance capital expenditures – existing properties(12) | (786) | (1,160) |
| (1,394) | (1,327) |
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Non-controlling interest adjustment(6) | 89 | 19 |
| 95 | 72 |
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AFFO(1) | $ 8,668 | $ 7,511 | $ 1,157 | $ 16,949 | $ 15,800 | $ 1,149 |
AFFO change over prior period - % |
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| 15.4 % |
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| 7.3 % |
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Weighted average trust units outstanding – basic(1)(3) | 111,622 | 111,584 |
| 111,607 | 111,577 |
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FFO per unit – basic(1) | $ 0.105 | $ 0.100 | 5.0 % | $ 0.202 | $ 0.188 | 7.4 % |
AFFO per unit – basic(1) | $ 0.078 | $ 0.067 | 16.4 % | $ 0.152 | $ 0.142 | 7.0 % |
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Gross distribution to unitholders(4) | $ 7,812 | $ 7,810 |
| $ 15,623 | $ 15,619 |
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FFO payout ratio – basic(1) | 66.9 % | 69.8 % |
| 69.2 % | 74.6 % |
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AFFO payout ratio – basic(1) | 90.1 % | 104.0 % |
| 92.2 % | 98.9 % |
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FFO(1) | $ 11,670 | $ 11,187 |
| $ 22,578 | $ 20,950 |
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Interest on dilutive convertible debentures | - | 178 |
| - | 355 |
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FFO – diluted(1) | $ 11,670 | $ 11,365 | $ 305 | $ 22,578 | $ 21,305 | $ 1,273 |
Diluted weighted average trust units outstanding(1)(3) | 111,622 | 114,114 |
| 111,607 | 114,107 |
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AFFO(1) | $ 8,668 | $ 7,511 |
| $ 16,949 | $ 15,800 |
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Interest on dilutive convertible debentures | - | - |
| - | 355 |
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AFFO – diluted(1) | $ 8,668 | $ 7,511 | $ 1,157 | $ 16,949 | $ 16,155 | $ 794 |
Diluted weighted average trust units outstanding(1)(3) | 111,622 | 114,114 |
| 111,607 | 114,107 |
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FFO per unit – diluted(1) | $ 0.105 | $ 0.100 | 5.0 % | $ 0.202 | $ 0.187 | 8.0 % |
AFFO per unit – diluted(1) | $ 0.078 | $ 0.066 | 18.2 % | $ 0.152 | $ 0.142 | 7.0 % |
(1) | This is a non-GAAP financial measure. Refer to "Non-GAAP Financial Measures" in Part I and "Explanation of Non-GAAP Financial Measures" in Part VII of this MD&A for more information. |
(2) | Based on actuals. |
(3) | Includes Class B exchangeable LP units. |
(4) | Includes distributions on Class B exchangeable LP units. |
(5) | Includes proportionate share of revenue and expenditures at equity-accounted investments. |
(6) | The non-controlling interest ("NCI") adjustment includes adjustments required to translate the profit and total comprehensive income attributable to NCI of $102 thousand and $195 thousand for the three and six months ending June 30, 2026 (June 30, 2025 –$57 thousand and 75 thousand, respectively) to FFO and AFFO for the NCI. |
(7) | Incremental leasing costs included in administrative expenses include leasing costs of salaried leasing staff directly attributed to signed leases that would otherwise be capitalized if incurred from external sources. These costs are excluded from FFO in accordance with REALPAC's definition of FFO. |
(8) | Amortization of debenture issuance costs is deducted on a straight-line basis over the remaining term of the related convertible debentures, in accordance with REALPAC. |
(9) | Fair value adjustment to investments relate to the unrealized change in fair value of equity accounted entities which are excluded from FFO in accordance with REALPAC's definition of FFO. |
(10) | Equity accounting adjustment for derivative assets and liabilities includes the change in non-cash fair value adjustments relating to derivative assets and liabilities held by equity accounted entities, which are excluded from FFO in accordance with REALPAC's definition of FFO. |
(11) | Leasing costs – existing properties include internal and external leasing costs except to the extent that leasing costs relate to development projects, in accordance with REALPAC's definition of AFFO. See the Gross Capital Additions Including Leasing Fees note on page 28 of the MD&A. |
(12) | Maintenance capital expenditures – existing properties include expenditures related to sustaining and maintaining existing space, in accordance with REALPAC's definition of AFFO. See the Gross Capital Additions Including Leasing Fees note on page 28 of the MD&A. |
Net Property Operating Income (NOI) and Same-Asset Net Property Operating Income (Same-Asset NOI)
(000s) | 3 Months Ended June 30, 2026 (unaudited) | 3 Months Ended June 30, 2025 (unaudited) | 6 Months Ended June 30, 2026 (unaudited) | 6 Months Ended June 30, 2025 (unaudited) |
Same-asset NOI(1) | $ 19,606 | $ 19,099 | $ 38,540 | $ 37,660 |
Acquisitions, intensifications, developments and redevelopments transferred to IPP in 2025 & 2026 ($3.3 million annual stabilized NOI) |
| 800 | 431 | 1,487 | 642 |
NOI from properties currently under development and redevelopment ($1.1 million annual stabilized NOI) | - | - | - | - |
Straight-line rent | 210 | 65 | 503 | 159 |
Administrative expenses charged to NOI | (906) | (1,235) | (2,226) | (2,330) |
Lease termination revenue | - | 161 | 19 | 165 |
Properties disposed | 121 | 599 | 258 | 1,205 |
Other | 95 | (22) | 140 | (59) |
Total NOI(1) | $ 19,926 | $ 19,098 | $ 38,721 | $ 37,442 |
Percentage increase over prior period | 4.3 % |
| 3.4 % |
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(1) | This is a non-GAAP financial measure. Refer to "Non-GAAP Financial Measures" in Part I and "Explanation of Non-GAAP Financial Measures" in Part VII of the MD&A for more information. |
Cautionary Statements Regarding Forward-looking Information
This press release contains forward-looking statements relating to Plaza's operations, outlook, financial condition and the environment in which it operates, including expectations regarding current and future operating performance optimization and intensification activities and other projects, and the anticipated impact thereof on future results. Forward-looking statements are not future guarantees of future performance and involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of Plaza to be materially different from any future results, performance or achievements expressed, implied or projected by forward-looking statements contained in this press release, including but not limited to changes in economic, retail, capital market, or debt market conditions, including recessions and changes in, or the extent of changes in, interest rates and the rate of inflation; changes to applicable duties, tariffs and trade laws; supply chain constraints; competitive real estate conditions; and others described in Plaza's Annual Information Form for the year ended December 31, 2025 and Management's Discussion and Analysis for the six months ended June 30, 2026 which can be obtained on the REIT's website at www.plaza.ca or on SEDAR+ at www.sedarplus.ca. Forward-looking statements are based on a number of expectations and assumptions made in light of management's experience and perceptions of historical trends and current conditions, including that progress continues on Plaza's optimizations, intensifications and other projects, that tenant demand for space continues, and that Plaza is able to lease or re-lease space at anticipated rents. Although based upon information currently available to management and what management believes are reasonable expectations and assumptions, there can be no assurances that forward-looking statements will prove to be accurate. Readers, therefore, should not place undue reliance on any forward-looking statements. Plaza undertakes no obligation to publicly update any such statements, except as required by law. These cautionary statements qualify all forward-looking statements contained in this press release.
Further Information
Information appearing in this press release is a select summary of results. A more detailed analysis of the REIT's financial and operating results is included in the REIT's Management's Discussion and Analysis and Consolidated Financial Statements, which can be found on the REIT's website at www.plaza.ca or on SEDAR+ at www.sedarplus.ca.
Conference Call
Jason Parravano, President and CEO and Jim Drake, CFO, will host a conference call for the investment community on August 6, at 10:00 a.m. EDT. The call-in numbers for participants are 1-416-945-7677 (local Toronto) or 1-888-699-1199 (toll free, within North America).
A replay of the call will be available until August 13, 2026. To access the replay, dial 1-289-819-1450 (local Toronto) or 1-888-660-6345 (Passcode: 66924#). The audio replay will also be available for download on the REIT's website for 90 days following the conference call.
About Plaza
Plaza is an open-ended real estate investment trust and is a leading retail property owner and developer, focused on Ontario, Quebec and Atlantic Canada. Plaza's portfolio at June 30, 2026 includes interests in 189 properties totaling approximately 8.8 million square feet across Canada and additional lands held for development. Plaza's portfolio largely consists of open-air centres and stand-alone small box retail outlets and is predominantly occupied by national tenants with a focus on the essential needs, value and convenience market segments. For more information, please visit www.plaza.ca.
SOURCE Plaza Retail REIT
View original content: http://www.newswire.ca/en/releases/archive/August2026/05/c7669.html
For further information: Jim Drake, Chief Financial Officer , Plaza Retail REIT , Tel: 902-483-4064; Jason Parravano, President and Chief Executive Officer, Plaza Retail REIT, Tel: 514-268-8615