FIRST CAPITAL REIT REPORTS STRONG THIRD QUARTER 2025 RESULTS SUPPORTED BY 6% SAME-PROPERTY NOI GROWTH

FIRST CAPITAL REIT REPORTS STRONG THIRD QUARTER 2025 RESULTS SUPPORTED BY 6% SAME-PROPERTY NOI GROWTH

TORONTO, Nov. 4, 2025 /CNW/ - First Capital Real Estate Investment Trust ("First Capital", "FCR", or the "Trust") (TSX: FCR.UN), announced financial results for the quarter ended September 30, 2025. The 2025 Third Quarter Report is available in the Investors section of the Trust's website at www.fcr.ca and will be filed on SEDAR+ at www.sedarplus.ca. 

KEY HIGHLIGHTS FROM THE THIRD QUARTER:

• Operating FFO per unit of $0.33, representing YoY growth of 9% excluding 2024 density bonus
• Same Property NOI growth of 6.4%, excluding bad debt expense (recovery) and lease termination fees
• Lease renewal lift of 13.5% on strong leasing volume
• Total portfolio occupancy of 97.1%

"We are pleased to report another strong quarter of operating and financial results, highlighted by near record occupancy, solid same-property NOI growth and robust lease renewal spreads", said Adam Paul, President & CEO.

"Our results continue to reflect the successful execution of our strategy and the strong fundamentals of FCR's grocery anchored retail portfolio, which positions us well for continued stability and growth in cash flow."

EARNINGS HIGHLIGHTS

• Operating FFO per Diluted Unit of $0.33: Operating Funds from Operations of $71.6 million decreased $5.2 million, or $0.03 per unit, over the same prior year period. The decrease was primarily due to the recognition of a density bonus of $11.3 million in connection with a previously sold property in the third quarter of 2024. Excluding the density bonus, Operating FFO increased $6.1 million or approximately 9% over the prior year period primarily due to higher NOI of $4.7 million and interest expense savings of $3.5 million.
• FFO per Diluted Unit of $0.32: Funds From Operations of $69.6 million decreased $2.7 million, or $0.01 per unit, over the same prior year period. The decrease was driven by lower Operating FFO of $5.2 million, partially offset by a year-over-year increase in other gains (losses) and (expenses) of $2.5 million. These other gains (losses) and (expenses) are comprised primarily of mark-to-market (non-cash) gains and losses related to derivative financial instruments employed by First Capital to reduce its borrowing costs and fix the rate of interest on certain variable-rate term loans. Over the life of each loan, the cumulative gain or loss on the related derivative instruments is expected to net to $Nil.
• Net Income (Loss) Attributable to Unitholders: For the three months ended September 30, 2025, First Capital recognized net income (loss) attributable to Unitholders of $66.6 million or $0.31 per diluted unit compared to $81.1 million or $0.38 per diluted unit for the same prior year period. The decrease in net income over prior year was primarily due to a $1.1 million increase in value of investment property in the third quarter of 2025 versus a $18.9 million increase in value of investment property recognized in the third quarter of 2024, on a proportionate basis.

OPERATING PERFORMANCE AND CAPITAL ALLOCATION HIGHLIGHTS

• Same Property NOI Growth: Total Same Property NOI increased 7.2% over the prior year period. The growth was primarily due to rental rate growth, higher year-over-year occupancy, and a year-over-year increase in lease termination fees of $0.9 million. Same Property NOI excluding bad debt expense (recovery) and lease termination fees increased 6.4%.
• Portfolio Occupancy: On a quarter-over-quarter basis, total portfolio occupancy decreased 0.1% to 97.1% at September 30, 2025, from 97.2% at June 30, 2025. On a year-over-year basis, total portfolio occupancy increased 0.6% from 96.5% at September 30, 2024 to 97.1% at September 30, 2025.
• Lease Renewal Rate Increase: During the quarter, net rental rates increased 13.5% on a volume of 543,000 square feet of lease renewals, when comparing the rental rate in the first year of the renewal term to the rental rate in the last year of the expiring term. Net rental rates on leases renewed in the quarter increased 18.7% when comparing the average rental rate over the renewal term to the rental rate in the last year of the expiring term owing to higher contractual growth rates negotiated throughout the renewed lease terms.
• Average Net Rental Rate: The portfolio average net rental rate increased by 0.5% or $0.13 per square foot over the prior quarter to a record $24.57 per square foot, primarily due to rent escalations and renewal lifts.
• Property Investments: During the third quarter, First Capital invested approximately $49 million into property development, redevelopment and acquisitions, including the purchase of a 50% interest in an 18 acre retail development site located in Ottawa.
• Property Dispositions: During the third quarter, First Capital completed $35 million of dispositions, including Place Anjou, a development site located in Montreal.

BALANCE SHEET HIGHLIGHTS

First Capital's September 30, 2025 net debt to Adjusted EBITDA multiple was 9.2x, a 0.5x increase from 8.7x at December 31, 2024 and an increase of 0.2x from September 30, 2024. First Capital's September 30, 2025 liquidity position was approximately $0.7 billion, including $626 million of availability on revolving credit facilities and $33 million of cash on a proportionate basis. As at September 30, 2025, First Capital had approximately $6.4 billion of unencumbered assets, representing 69% of total assets.

ADVANCING ENVIRONMENTAL AND SOCIAL INITIATIVES

First Capital continued to demonstrate leadership in Environmental and Social matters throughout the third quarter, which included the following highlights:

• Score of 94 (2-point improvement over 2024) in the 2025 GRESB Development Benchmark (Peer Group: Global, Retail)
• Score of 80 (1-point improvement over 2024) in the 2025 GRESB Standing Investments Benchmark (Peer Group: North America, Retail Centres, Listed)
• Received an 'A' rating in the Morgan Stanley Capital International (MSCI) ESG Ratings assessment in 2025, the highest rating achieved in our peer group
• Raised more than $220,000 for Right to Food (previously known as Community Food Centres Canada) through the FCR Thriving Neighbourhoods Foundation's fourth annual Commercial Real Estate Softball Classic tournament which took place in September

SUBSEQUENT EVENTS

On October 1, 2025, First Capital's Board of Trustees unanimously approved a proposed internal reorganization that will simplify its organizational structure by eliminating First Capital Realty Inc. as the REIT's wholly-owned subsidiary that owns, directly and indirectly, all of First Capital's real property portfolio. The reorganization will be accomplished by way of a plan of arrangement (the "Arrangement"). Subsequent to the reorganization, First Capital will hold substantially all of its real property portfolio through subsidiary partnerships and trusts, reducing the significant complexity of accounting and legal reporting as well as income tax compliance inherent in the existing structure. The Arrangement will be subject to approval by unitholders at a special meeting of First Capital to be held on November 24, 2025. Management anticipates the Arrangement will become effective on November 30, 2025.

MANAGEMENT CONFERENCE CALL AND WEBCAST

First Capital invites you to attend the live conference call at 2:00 p.m. (ET) on Wednesday, November 5, 2025, with senior management to discuss financial results for the third quarter ended September 30, 2025.

First Capital's financial statements and MD&A for the third quarter will be released prior to the call and will be available on its website at www.fcr.ca in the 'Investors' section, and on the Canadian Securities Administrators' website at www.sedarplus.ca. 

Teleconference

You can attend the live conference call by dialing 647-932-3411 or toll-free 1-800-715-9871. The call will be accessible for replay until November 12, 2025, by dialing 647-362-9199 or toll-free 1-800-770-2030 with access code 2319664#.

Webcast

To access the live audio webcast and conference call presentation, please go to First Capital's website or click on the following link Q3 2025 Conference Call. The webcast will be accessible for replay in the 'Investors' section of the website.

ABOUT FIRST CAPITAL REIT (TSX: FCR.UN)

First Capital owns and operates, acquires, and develops open-air grocery-anchored shopping centres in neighbourhoods with the strongest demographics in Canada.

NON-IFRS FINANCIAL MEASURES

First Capital prepares and releases unaudited interim and audited annual consolidated financial statements prepared in accordance with International Financial Reporting Standards ("IFRS"). As a complement to results provided in accordance with IFRS, First Capital discloses certain non-IFRS financial measures in this press release, including but not limited to FFO, Operating FFO, NOI, Same Property NOI, and proportionate interest. Since these non-IFRS measures do not have standardized meanings prescribed by IFRS, they may not be comparable to similar measures reported by other issuers. First Capital uses and presents the above non-IFRS measures as management believes they are commonly accepted and meaningful financial measures of operating performance. Reconciliations of certain non-IFRS measures to their nearest IFRS measures are included below. These non-IFRS measures should not be construed as alternatives to net income (loss) or cash flow from operating activities determined in accordance with IFRS as measures of First Capital's operating performance.

Funds from Operations ("FFO")

FFO is a recognized measure that is widely used by the real estate industry, particularly by publicly traded entities that own and operate income-producing properties. First Capital calculates FFO in accordance with the recommendations of the Real Property Association of Canada ("REALPAC") as published in its most recent guidance on "Funds from Operations and Adjusted Funds From Operations for IFRS" dated January 2022. Management considers FFO a meaningful additional financial measure of operating performance, as it excludes fair value gains and losses on investment properties as well as certain other items included in FCR's net income (loss) that may not be the most appropriate determinants of the long-term operating performance of FCR, such as investment property selling costs; tax on gains or losses on disposals of properties; deferred income taxes; fair value gains or losses on unit-based compensation; and any gains, losses or transaction costs recognized in business combinations. FFO provides a perspective on the financial performance of FCR that is not immediately apparent from net income (loss) determined in accordance with IFRS.

Operating Funds from Operations ("OFFO")

In addition to REALPAC FFO described above, Management also discloses OFFO. Management considers OFFO as its key operating performance measure that, when compared period over period, reflects the impact of certain factors on its core operations, such as changes in net operating income, interest expense, corporate expenses and interest and other income. OFFO excludes the impact of the items in other gains (losses) and (expenses) that are not considered part of First Capital's on-going core operations.

A reconciliation from net income (loss) attributable to Unitholders to FFO and OFFO can be found in the table below:

Net Debt

Net debt is a measure used by Management in the computation of certain debt metrics, providing information with respect to certain financial ratios used in assessing First Capital's debt profile. Net debt is calculated as the sum of principal amounts outstanding on credit facilities and mortgages, bank indebtedness and the par value of senior unsecured debentures reduced by the cash balances at the end of the period on a proportionate basis.

Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization ("Adjusted EBITDA")

Adjusted EBITDA is a measure used by Management in the computation of certain debt metrics. Adjusted EBITDA, is calculated as net income (loss), adding back income tax expense, interest expense and amortization and excluding the increase or decrease in the fair value of investment properties, fair value gains or losses on unit-based compensation and other non-cash or non-recurring items on a proportionate basis. FCR also adjusts for incremental leasing costs, which is a recognized adjustment to FFO, in accordance with the recommendations of REALPAC. Management believes Adjusted EBITDA is useful in assessing the Trust's ability to service its debt, finance capital expenditures and provide for distributions to its Unitholders.

A reconciliation from net income (loss) attributable to Unitholders to Adjusted EBITDA can be found in the table below:

FORWARD-LOOKING STATEMENT ADVISORY

This press release contains forward-looking statements and information within the meaning of applicable securities law, including with respect to the anticipated execution and impact of the REIT's three-year business plan on its stated objectives, including FFO growth, distribution growth and improved debt ratios, as well as the REIT's ability to execute its disposition program and the anticipated contribution of dispositions to the REIT's three-year business plan objectives. These forward-looking statements are not historical facts but, rather, reflect First Capital's current expectations and are subject to risks and uncertainties that could cause the outcome to differ materially from current expectations. Such risks and uncertainties include, among others, First Capital's ability to close all announced disposition transactions and execute on its three-year business plan to achieve its stated objectives, general economic conditions; tenant financial difficulties, defaults and bankruptcies; increases in operating costs, property taxes and income taxes; First Capital's ability to maintain occupancy and to lease or re-lease space at current or anticipated rents; development, intensification and acquisition activities; residential development, sales and leasing; risks in joint ventures; environmental liability and compliance costs and uninsured losses; and risks and uncertainties related to pandemics, epidemics or other outbreaks on First Capital which are described in First Capital's MD&A for the year ended December 31, 2024. Additionally, forward-looking statements are subject to those risks and uncertainties discussed in First Capital's MD&A for the year ended December 31, 2024 and in its current Annual Information Form. Readers, therefore, should not place undue reliance on any such forward-looking statements.

First Capital undertakes no obligation to publicly update any such forward-looking statement or to reflect new information or the occurrence of future events or circumstances except as required by applicable securities law. All forward-looking statements in this press release are made as of the date hereof and are qualified by these cautionary statements.

www.fcr.ca 

TSX: FCR.UN

SOURCE First Capital Real Estate Investment Trust