PROREIT ANNOUNCES SECOND QUARTER RESULTS FOR FISCAL 2026
PROREIT ANNOUNCES SECOND QUARTER RESULTS FOR FISCAL 2026 |
| [12-August-2026] |
MONTREAL, Aug. 12, 2026 /CNW/ -- PRO Real Estate Investment Trust ("PROREIT") (TSX: PRV.UN) today reported its financial and operating results for the three months ended June 30, 2026 ("Q2" or "second quarter") and six-month period ended June 30, 2026. Second Quarter of Fiscal 2026 Highlights
"We are pleased with our second-quarter growth, financial position and the positive momentum across the business," said Gordon Lawlor, President and Chief Executive Officer of PROREIT. "Revenue, NOI and FFO were all up year over year, and Same Property NOI continued to grow despite the impact of two previously disclosed vacancies. Year to date, we have acquired 22 high-quality industrial properties in robust markets for approximately $170.8 million and completed more than $107 million in equity financings, demonstrating strong support for our strategy while providing additional liquidity to advance our growth plan. "We also continued to prioritize balance sheet strength and financial flexibility and as of today, successfully refinanced or secured commitments for all mortgages maturing in 2026. "With strong leasing spreads and continued demand for well-located small and mid-bay industrial properties, the fundamentals of our portfolio remain solid across Canada. In Halifax, Amazon's recently announced massive operations hub is now under construction in Burnside Industrial Park, where we are one of the largest landlords, further reinforcing the strategic value of this key industrial node. Combined with the anticipated boom in federal defence spending expected to flow into Nova Scotia over the coming decade, these significant investments provide additional tailwinds for our portfolio. "Against this favourable backdrop, we remain focused on disciplined growth and creating new opportunities to generate long-term value for our unitholders," concluded Mr. Lawlor.
Financial Results
At June 30, 2026, PROREIT owned 122 properties (including a 50% ownership interest in 39 investment properties), compared to 118 investment properties (including a 50% ownership interest in 41 investment properties) at June 30, 2025. At June 30, 2026, total assets amounted to $1.29 billion, representing a 15.8% increase from $1.11 billion on June 30, 2025. As at June 30, 2026, the industrial segment represented 93.3% of total GLA and 91.8% of base rent, compared with 87.9% and 83.5%, respectively, as at June 30, 2025. Atlantic Canada accounted for 40% of base rent at June 30, 2026, down from 48.7% at June 30, 2025, while Manitoba and Western Canada increased to 19.1% from 17.6%. For the three-month period ended June 30, 2026:
For the six-month period ended June 30, 2026:
Sustained Operating Environment As of June 30, 2026, PROREIT's portfolio comprised 122 investment properties, totalling 7.2 million square feet of GLA, with a weighted average lease term to maturity (WALT) of 4.3 years, compared to 4.5 years at the same date last year. The occupancy rate of the portfolio stood at 95.0% as at June 30, 2026 (including committed space), compared to 97.8% at the same date last year. The decrease in average occupancy for the three-month period ended June 30, 2026 compared to the same period in 2025 was largely impacted by a 100% vacancy in the quarter of a 176,070 square foot building in Saint-Hyacinthe (100% leased for the three-month period ended June 30, 2025) and an 80,915 square foot space that went vacant on April 1, 2026 in Woodstock, Ontario. Excluding these specific vacancies, portfolio occupancy (including committed space) as at June 30, 2026 would be approximately 97.4%. On May 6, 2026, PROREIT entered into a binding lease for approximately 74,250 square feet of its 176,070-square-foot industrial building located at 6375 Picard Street, in Saint-Hyacinthe, Quebec to a new tenant with a 15-year term at market rent, with rent commencement July 1, 2026. The new base rent on the 74,250 square feet (42.0% of the total property GLA), represents an increase of over 122% compared to the rent paid by the previous tenant for the same GLA during their 5-year lease term. As of the date of this press release, approximately 82.6% of GLA maturing in 2026 has been renewed at 36.8% positive average spread. Portfolio Transactions In the second quarter of 2026, PROREIT completed the following portfolio transactions: On April 23, 2026, PROREIT completed the previously announced acquisition of a 100% interest in a newly built industrial building located at 1245 Aviation Avenue in Moncton, New Brunswick for a total purchase price of $12.3 million (excluding closing costs) representing a going in capitalization rate of approximately 7.0%. Built in 2024, the fully leased single-tenant industrial building comprises approximately 60,057 square feet of GLA and features a 32-foot clear warehouse height and modern loading configuration. The acquisition was financed through a combination of draws on the revolving credit facility and cash on hand from the Dartmouth, Nova Scotia property sale completed on February 17, 2026. On June 26, 2026, PROREIT completed the previously announced acquisition of a 100% interest in a portfolio of four industrial properties in Winnipeg, Manitoba for approximately $24 million (excluding closing costs). The portfolio comprises approximately 159,200 square feet of GLA with a going in capitalization rate of approximately 6.7%. The acquisition was financed with cash from a new $15.6 million eight-year mortgage bearing interest at 4.95% per annum and cash on hand of approximately $8.4 million, received from the Offering and Private Placement. On June 30, 2026, PROREIT completed the previously announced acquisition of a 100% interest in a portfolio of 13 industrial properties in Quebec City, Quebec for approximately $112.8 million (excluding closing costs). The portfolio comprises approximately 609,300 square feet of GLA with a going in capitalization rate of approximately 6.8%. The acquisition was financed with cash from a new four-year $71 million non-revolving secured term loan, cash from a new $2.8 million demand loan and cash on hand of approximately $39.1 million received from the Offering and Private Placement. Subsequent to quarter-end, PROREIT continued to execute on its growth strategy. On July 15, 2026, PROREIT completed its previously announced acquisition of a 100% interest in four industrial properties totaling 164,900 square feet of GLA located in Winnipeg, Manitoba, for $21.7 million (excluding closing costs). The going in capitalization rate was approximately 6.8%. The acquisition was financed with cash from a new eight-year mortgage of approximately $14.1 million bearing interest at 4.95%, and approximately $7.6 million of cash on hand from the net proceeds of the Offering and Private Placement. On August 6, 2026, PROREIT completed the sale of one retail property located in Bathurst, New Brunswick, totalling approximately 14,750 square feet of GLA for gross proceeds of $1.4 million (excluding closing costs). PROREIT intends to use the net proceeds for general business and working capital purposes. Financial Position Total debt (current and non-current) was $609.2 million at June 30, 2026, compared to $562.4 million at June 30, 2025. During the second quarter:
Subsequent to quarter-end:
Equity offerings: On June 10, 2026, PROREIT completed the Offering under which it issued trust units of PROREIT ("Units") on a bought deal basis at a price of $6.50 per Unit (the "Offering Price") resulting in 12,822,500 Units being issued for total gross proceeds of $83.3 million, including 1,672,500 Units issued pursuant to the full exercise of the over-allotment option. Concurrently with the closing of the Offering, PROREIT completed the Private Placement pursuant to which it issued an aggregate of 3,693,670 Units at the Offering Price for total gross proceeds of $24.0 million, of which 2,924,439 Units were issued to Collingwood Investments Incorporated, a member of the Bragg Group of Companies, and 769,231 Units were issued to Parkit Enterprise Inc. Collingwood Investments Incorporated and Parkit Enterprise Inc. received a capital commitment fee equal to 2% of the gross proceeds of their portion of the Private Placement upon closing. At June 30, 2026, mortgage maturities amounted to $71.7 million for 2026. As previously noted, subsequent to quarter end, approximately $32.9 million of maturing debt was renewed with $40.4 million of new mortgages and approximately $38.8 million of maturing debt was committed to renew for 1 year resulting in all 2026 mortgage renewals being completed or committed for the year. Mortgage maturities amounted to $55.0 million for 2027 and $66.8 million for 2028, with a weighted average interest rate on these expiring maturities of 4.8% for 2027 and 3.5% for 2028. Total debt to total assets was 47.4% at June 30, 2026, compared to 50.6% at June 30, 2025. Adjusted Debt to Gross Book Value* was 47.4% at June 30, 2026, compared to 50.7% at June 30, 2025. Adjusted Debt to Annualized Adjusted EBITDA Ratio* was 10.0x at June 30, 2026, compared to 9.8x at June 30, 2025 impacted by the cash deployment timing of the Offering and Private Placement. Sustainability PROREIT will release its 2025 Sustainability Report, which highlights the ongoing commitments, strategy and accomplishments made to advance the environmental, social and governance (ESG) aspects of the organization, in the coming weeks. The full report will be available in the Sustainability section of PROREIT's website at https://proreit.ca/en/about/sustainability/. Distributions Distributions to unitholders of $0.0375 per trust unit of PROREIT were declared monthly during the three months ended June 30, 2026, representing distributions of $0.45 per unit on an annualized basis. Equivalent distributions are paid on the Class B limited partnership units of PRO REIT Limited Partnership ("Class B LP Units"), a subsidiary of PROREIT. On July 22, 2026, PROREIT announced a cash distribution of $0.0375 per trust unit for the month of July 2026. The distribution is payable on August 17, 2026 to unitholders of record as at July 31, 2026. Strategy PROREIT remains focused on the successful execution of its strategy for growth by expanding the portfolio organically and through disciplined acquisition, while optimizing its balance sheet and capital allocation. Having successfully completed its transition to a pure-play industrial real estate investment trust, PROREIT is focused on strengthening its position as a prominent Canadian light industrial real estate investment trust in strong primary and secondary markets and on delivering long-term, sustainable value for its stakeholders. In the medium-term, PROREIT is targeting goals of $2 billion in assets and 45% Adjusted Debt to Gross Book Value* in the next three to five years. These medium-term goals are based on PROREIT's current business plan and strategies and are not intended to be a forecast of future results. See "Forward-Looking Statements". Investor Conference Call and Webcast Details PROREIT will hold a conference call to discuss its second quarter results for Fiscal 2026 on August 13, 2026 at 9:00 a.m. EDT. There will be a question period reserved for financial analysts. To access the conference call, please dial 1-800-990-4777 or 514-400-3794, conference id: 23723. A recording of the call will be available until August 20, 2026 by dialing 1-888-660-6345 or 1-289-819-1450 and using access code: 23723 # The conference call will also be accessible via live webcast on PROREIT's website at www.proreit.com or at https://app.webinar.net/evMjBNbBmRz About PROREIT Founded in 2013, PROREIT (TSX: PRV.UN) is a Canadian industrial real estate investment trust that owns and operates a portfolio of high-quality properties. With a presence in strong primary and secondary Canadian markets, PROREIT is committed to delivering stable cash flow, disciplined growth and long-term value for its unitholders. For more information on PROREIT, please visit the website at: https://proreit.com. Non-IFRS Measures PROREIT's consolidated financial statements are prepared in accordance with IFRS® Accounting Standards ("IFRS"), as issued by the International Accounting Standards Board. In addition to reported IFRS measures, industry practice is to evaluate real estate entities giving consideration, in part, to certain non-IFRS financial measures, non-IFRS ratios and other specified financial measures (collectively, "non-IFRS measures"). Without limitation, measures followed by the suffix "*" in this press release are non-IFRS measures. As a complement to results provided in accordance with IFRS, PROREIT discloses and discusses in this press release (i) certain non-IFRS financial measures, including: Adjusted Debt, adjusted earnings before interest, tax, depreciation and amortization ("Adjusted EBITDA"); adjusted funds from operations ("AFFO"); annualized adjusted earnings before interest, tax, depreciation and amortization ("Annualized Adjusted EBITDA"); funds from operations ("FFO"); gross book value ("Gross Book Value"); net asset value ("NAV") and Same Property NOI and (ii) certain non-IFRS ratios, including: Adjusted Debt to Annualized Adjusted EBITDA Ratio; Adjusted Debt to Gross Book Value; AFFO Payout Ratio – Basic; AFFO Payout Ratio – Diluted; Basic AFFO per Unit; Diluted AFFO per Unit; Basic FFO per Unit; Diluted FFO per Unit; Debt Service Coverage Ratio; Interest Coverage Ratio; and NAV per Unit. These non-IFRS measures are not defined by IFRS and do not have a standardized meaning under IFRS. PROREIT's method of calculating these non-IFRS measures may differ from other issuers and may not be comparable with similar measures presented by other income trusts or issuers. PROREIT has presented such non-IFRS measures and ratios as management believes they are relevant measures of PROREIT's underlying operating and financial performance. For information on the most directly comparable financial measure disclosed in the primary financial statements of PROREIT, composition of the non-IFRS measures, a description of how PROREIT uses these measures and an explanation of how these measures provide useful information to investors, refer to the "Non-IFRS Measures" section of PROREIT's management's discussion and analysis for the three and six months ended June 30, 2026, dated August 13, 2026, available on PROREIT's SEDAR+ profile at www.sedarplus.ca, which is incorporated by reference into this press release. As applicable, the reconciliations for each non-IFRS measure are outlined below. Non-IFRS measures should not be considered as alternatives to net income, net cash flows provided by operating activities, cash and cash equivalents, total assets, total equity, or comparable metrics determined in accordance with IFRS as indicators of PROREIT's performance, liquidity, cash flows and profitability. Table 2 - Reconciliation of net operating income to net income and comprehensive income
Table 3 - Reconciliation of Same Property NOI to net operating income (as reported in the consolidated financial statements)
Table 4 - Summary of Same Property NOI by asset class
Table 5 - Reconciliation of AFFO and FFO to net income and comprehensive income
Table 6 - Reconciliation of Adjusted EBITDA to net income and comprehensive income
Table 7 - Calculation of Adjusted Debt to Annualized Adjusted EBITDA Ratio
Table 8 - Calculation of the Interest Coverage Ratio
Table 9 - Calculation of the Debt Service Coverage Ratio
Table 10 - Calculation of Gross Book Value, Adjusted Debt and Adjusted Debt to Gross Book Value
Table 11 - Calculation of NAV and NAV per Unit
Forward-Looking Statements This press release contains forward-looking statements and forward-looking information (collectively, "forward-looking statements") within the meaning of applicable securities legislation, including statements relating to certain expectations, projections, growth plans and other information related to PROREIT's business strategy and future plans. Forward-looking statements are based on a number of assumptions and are subject to a number of risks and uncertainties, many of which are beyond PROREIT's control, that could cause actual results and events to differ materially from those that are disclosed in or implied by such forward-looking statements. Forward-looking statements contained in this press release include, without limitation, statements pertaining to the execution by PROREIT of its growth strategy, the future financial and operating performance of PROREIT, and the medium-term goals of PROREIT. PROREIT's objectives and forward-looking statements are based on certain assumptions, including that (i) PROREIT will receive financing on favourable terms; (ii) the future level of indebtedness of PROREIT and its future growth potential will remain consistent with PROREIT's current expectations; (iii) there will be no changes to tax laws adversely affecting PROREIT's financing capacity or operations; (iv) the impact of the current economic climate and the current global financial conditions on PROREIT's operations, including its financing capacity and asset value, will remain consistent with PROREIT's current expectations; (v) the performance of PROREIT's investments in Canada will proceed on a basis consistent with PROREIT's current expectations; and (vi) capital markets will provide PROREIT with readily available access to equity and/or debt. The medium-term goals of PROREIT disclosed under "Strategy" are based on PROREIT's current business plan and strategies and are not intended to be a forecast of future results. The medium-term goals contemplate PROREIT's historical growth and certain assumptions including but not limited to (i) current global capital market conditions, (ii) access to capital, (iii) interest rate exposure, (iv) availability of high-quality industrial properties for acquisitions, and (v) capacity to finance acquisitions on an accretive basis. The forward-looking statements contained in this news release are expressly qualified in their entirety by this cautionary statement. All forward-looking statements in this press release are made as of the date of this press release. PROREIT does not undertake to update any such forward-looking information whether as a result of new information, future events or otherwise, except as required by law. Additional information about these assumptions and risks and uncertainties is contained under "Risk Factors" in PROREIT's latest annual information form and "Risk and Uncertainties" in PROREIT's management's discussion and analysis for the three and six month periods ended June 30, 2026, which are available under PROREIT's profile on SEDAR+ at www.sedarplus.ca. SOURCE PROREIT | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Company Codes: Toronto:PRV.UN |
