Mr. Mitchell Goldhar reports

SMARTCENTRES REAL ESTATE INVESTMENT TRUST RELEASES FOURTH QUARTER AND FULL YEAR RESULTS FOR 2023

SmartCentres Real Estate Investment Trust has released its financial and operating results for the quarter and year ended Dec. 31, 2023.

"In reflecting on the achievements of 2023, I am pleased with our strong financial and operational results," said Mitchell Goldhar, CEO of SmartCentres. "Our net operating income has shown steady and consistent growth through the year, which also saw the achievement of numerous significant milestones, including successfully closing 1,026 condo units at Transit City 4 & 5, completing and significantly leasing up our purpose-built rental apartment building, The Millway in VMC, and the commencement of siteworks at two key development projects poised to drive future growth, ArtWalk Phase 1 in VMC and the Canadian Tire flagship retail store in Leaside. Our strategy involves both offense and defense to drive business growth while maintaining high occupancies and reliable rental income."

2023 Fourth Quarter Highlights

Operational

• Shopping centre leasing activity remained strong with an industry-leading in-place and committed occupancy rate of 98.5 per cent (December 31, 2022 - 98.0 per cent).
• Executed new leases of 84,227 square feet during the quarter.
• Average renewal rent growth of 5.3 per cent (excluding anchors).

Development

• The siteworks for the 224,000 square foot retail project on Laird Drive in Toronto continues, Canadian Tire is expected to take possession of the 200,000 square foot flagship retail store in early 2026.
• Obtained municipal approvals and commenced construction on two self-storage facilities in Dorval (St-Regis Blvd.), Quebec and in Toronto (Jane St.) during the quarter.
• All the 106 remaining units within Transit City 4 & 5 were successfully closed during the quarter, generating $2.7 million of FFO(1).
• The Millway, a 458-rental unit apartments project, became fully opened in the quarter. Leasing activity is on track with 60 per cent of the units leased by year-end and rental rates ahead of expectations.
• The siteworks at ArtWalk condominium Phase 1 are well underway, with all 320 released units sold out and the remaining units expected to be released for sale this year.
• The construction of Phase I of the Vaughan NW townhomes is underway, with all 100 released units sold out and closings expected to begin in the first half of 2024.
• The second phase of the purpose-built residential rental project in Laval, Quebec, comprising 211 units, opened on July 1, 2023, and was 92 per cent leased at the end of the fourth quarter. Demand for the first phase remained strong with 98 per cent occupancy.

Financial

• Same Property NOI(1) for the three months and year ended December 31, 2023 increased by $2.3 million or 1.7 per cent, and $11.6 million or 2.2 per cent, respectively, compared to the same periods in 2022. The increases were primarily driven by lease-up activity and higher rental renewal rates.
• FFO per Unit(1) for the three months and year ended December 31, 2023 was $0.59, and $2.23, respectively, compared to $0.57 and $2.07 for the same periods in 2022. The increases were mainly attributable to higher profits from condo closings at Transit City 4 & 5, and higher rental income, partially offset by higher interest expense.
• Net income and comprehensive income per Unit was $0.08 and $2.83 for the three months and year ended December 31, 2023, respectively (three months ended December 31, 2022 - $0.56 and year ended December 31, 2022 - $3.54). The decreases were primarily due to a decrease in fair value adjustment on investment properties and financial instruments compared to the same periods in 2022.
• Payout Ratio to AFFO(1) was 89.4 per cent for the three months ended December 31, 2023, and 93.0 per cent for the year, as compared to 95.7 per cent and 98.6 per cent for the same periods in 2022, respectively.

Development and Intensification Summary

The following table provides additional details on the Trust's 12 development initiatives that are currently under construction or where initial siteworks have begun (in order of estimated initial occupancy/closing date):

Conference Call

Management will hold a conference call on Thursday, February 15, 2024 at 3:00 p.m. (ET).

Interested parties are invited to access the call by dialing 1-855-353-9183 and then keying in the participant access code 97190#.

A recording of this call will be made available Thursday, February 15, 2024 through to Thursday, February 22, 2024. To access the recording, please call 1-855-201-2300, enter the conference access code 97190# and then key in the playback access code 0114192#.

About SmartCentres

SmartCentres is one of Canada's largest fully integrated REITs, with a best-in-class and growing mixed-use portfolio featuring 191 strategically located properties in communities across the country. SmartCentres has approximately $11.9 billion in assets and owns 35.0 million square feet of income producing value-oriented retail and first-class office properties with 98.5 per cent in place and committed occupancy, on 3,500 acres of owned land across Canada.

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