PROREIT ANNOUNCES SECOND QUARTER 2025 RESULTS
MONTREAL, Aug. 13, 2025 /CNW/ - PRO Real Estate Investment Trust ("PROREIT" or the "REIT") (TSX:PRV) today reported its financial and operating results for the three-month period ("Q2" or "second quarter") and six-month period ended June 30, 2025.
Second Quarter of Fiscal 2025 Highlights
Net operating income (NOI) increased by 4.5% year-over-year
Same Property NOI* rose 8.2% year-over-year, led by a 9.6% increase in Industrial Same Property NOI*
Basic AFFO per Unit* increased by 3.7% year-over-year
AFFO Payout Ratio, Basic* stood at 89.8%, compared to 93.1% in Q2 2024
Total debt to total assets of 50.6% at June 30, 2025, compared to 49.3% at March 31, 2025
Adjusted Debt to Gross Book Value* of 50.7% at June 30, 2025, compared to 49.5% at March 31, 2025
63.1% of 2025 gross leasable area ("GLA") renewed at average spread of 35.7%, and 52.5% of 2026 GLA renewed at 33.8% average spread
Occupancy rate of 97.8% at June 30, 2025 (including committed space), compared to 97.1% a year earlier
Completed previously announced acquisition of six industrial properties in Winnipeg for an aggregate purchase price of $96.5 million (excluding closing costs) from Parkit Enterprise Inc. ("Parkit")
Subsequent to quarter-end, entered into a binding agreement to sell a portfolio of six retail properties in Atlantic Canada, totalling approximately 221,000 square feet of GLA, for $39.8 million in gross proceeds
"PROREIT's second-quarter results reflected a 4.5% NOI growth and an 8.2% increase in Same Property NOI*, year-over-year, fueled by embedded rent growth, higher renewal spreads and strong lease-up performance," said Gordon Lawlor, President and Chief Executive Officer of PROREIT.
"We are actively executing our capital recycling strategy by reinvesting in industrial opportunities that support long-term cash flow and net asset value growth, in line with our goal of becoming a pure-play Canadian light industrial REIT. Including the announced binding sale agreement, year-to-date non-core property sales total $52.2 million, bringing pro-forma industrial base rent to 88% and putting us on track to reach our 90% medium-term target.
"While Adjusted Debt to Annualized Adjusted EBITDA Ratio* and certain debt metrics rose in Q2, as expected following the transaction with Parkit, we remain fully committed to disciplined balance sheet management and to reducing leverage with the announced asset sales.
"With a focused presence in Halifax, Ottawa and Winnipeg—three of Canada's top five1 markets for rent growth—we continue to benefit from strong leasing momentum. As of today, 52.5% of our GLA maturing in 2026 has already been renewed, a remarkable achievement this early in the leasing cycle.
"Looking ahead, we will continue building on the success of our light industrial strategy, targeting well- located small-bay and mid-bay properties in strong secondary markets across Canada. We will continue to pursue value-accretive opportunities and to deliver long-term value for our unitholders," concluded Mr. Lawlor.
* Measures followed by the suffix "*" in this press release are non-IFRS measures. See "Non-IFRS Measures".
(1) Information from CBRE Canada Q2 2025 Industrial Report.
Financial ResultsTable 1- Financial Highlights
(CAD $ thousands except unit, per unit amounts and unless otherwise
3 Months
Ended
June 30
3 Months
Ended
June 30
6 Months
Ended
June 30
6 Months
Ended
June 30
stated)
2025
2024
2025
2024
Financial data
Property revenue
$ 25,032
$ 24,595
$ 50,769
$ 50,297
Net operating income ("NOI")
$ 15,444
$ 14,786
$ 30,314
$ 29,608
Same Property NOI (1)
$ 14,591
$ 13,486
$ 28,648
$ 26,871
Net income (loss) and comprehensive income (loss)
$ 5,244
$ 6,620
$ 20,277
$ (2,832)
Net income (loss) and comprehensive income (loss) per Unit - Basic (2)
$ 0.0860
$ 0.1092
$ 0.3334
$ (0.0467)
Net income (loss) and comprehensive income (loss) per Unit - Diluted (2)
$ 0.0852
$ 0.1081
$ 0.3308
$ (0.0463)
Total assets
$ 1,110,963
$ 990,199
$ 1,110,963
$ 990,199
Total debt
$ 562,426
$ 486,646
$ 562,426
$ 486,646
Total debt to total assets
50.6 %
49.1 %
50.6 %
49.1 %
Adjusted Debt to Gross Book Value (1)
50.7 %
49.5 %
50.7 %
49.5 %
Interest Coverage Ratio (1)
2.6x
2.5x
2.6x
2.5x
Debt Service Coverage Ratio (1)
1.6x
1.6x
1.6x
1.6x
Adjusted Debt to Annualized Adjusted EBITDA Ratio (1)
9.8x
8.8x
10.0x
8.9x
Weighted average interest rate on mortgage debt
3.94 %
3.94 %
3.94 %
3.94 %
Net cash flows provided from operating activities
$ 6,898
$ (211)
$ 14,338
$ 9,532
Funds from Operations (FFO) (1)
$ 7,974
$ 7,379
$ 15,874
$ 15,101
Basic FFO per unit (1)(2)
$ 0.1307
$ 0.1217
$ 0.2610
$ 0.2491
Diluted FFO per unit (1)(2)
$ 0.1296
$ 0.1205
$ 0.2590
$ 0.2470
Adjusted Funds from Operations (AFFO) (1)
$ 7,640
$ 7,327
$ 14,910
$ 14,768
Basic AFFO per unit (1)(2)
$ 0.1253
$ 0.1208
$ 0.2452
$ 0.2436
Diluted AFFO per unit (1)(2)
$ 0.1242
$ 0.1196
$ 0.2433
$ 0.2416
AFFO Payout Ratio, Basic (1)
89.8 %
93.1 %
91.8 %
92.4 %
AFFO Payout Ratio – Diluted (1)
90.6 %
94.1 %
92.5 %
93.1 %
(1) Represents a non-IFRS measure. See "Non-IFRS Measures".
(2) Total basic units consist of trust units of the REIT and Class B LP Units (as defined herein). Total diluted units also includes deferred trust units and restricted trust units issued under the REIT's long-term incentive plan.
At June 30, 2025, PROREIT owned 118 properties (including a 50% ownership interest in 41 investment properties), compared to 117 investment properties (including a 50% ownership interest in 42 investment properties) at June 30, 2024. At June 30, 2025, total assets amounted to $1.11 billion, representing a 12.2% increase from $990.2 million on June 30, 2024.
For the three-month period ended June 30, 2025:
Property revenue amounted to $25.0 million in Q2 2025, an increase of $0.4 million compared to the same prior year period. The increase is mainly due to the contractual increases in rent and higher rental rates on lease renewals and new leases.
Net operating income (NOI) amounted to $15.4 million for the quarter, compared to $14.8 million
in Q2 2024, an increase of 4.5%, which was mainly driven by the same factors impacting property revenue described above.
Same Property NOI*, which represented 111 properties out of the 118 properties in the portfolio,
reached $14.6 million for the quarter, an increase of $1.1 million or 8.2%, compared to the same quarter last year. The increase was largely a result of contractual increases in rent and higher rental rates on lease renewals and new leases. Notably, Same Property NOI* for industrial assets rose by $1.1 million or 9.6% for the quarter, compared to the same period in 2024.
FFO* was $8.0 million for the quarter, up $0.6 million or 8.1% from $7.4 million in Q2 2024. The
increase was mainly driven by increases in contractual base rent, higher rates on renewals, and higher rental rates on new leases, offset by higher general and administrative expenses due to professional fees.
AFFO Payout Ratio, Basic* stood at 89.8% for the quarter, compared to 93.8% in Q1 2025 and to 93.1% in Q2 2024. The year-over-year decrease was primarily driven by increases in contractual base rent, higher rates on renewals, and higher rental rates on new leases, offset by an increase in stabilized leasing costs, and general and administrative expenses compared to the same period in 2024.
For the six-month period ended June 30, 2025:
Property revenue amounted to $50.8 million, a $0.5 million increase compared to the same prior year period. The increase is driven by the same factors noted for the three-month period above.
NOI amounted to $30.3 million, compared to $29.6 million in the same period in 2024, an
increase of 2.4% driven by the same factors noted for the three-month period above.
Same Property NOI* totalled $28.6 million, an increase of $1.8 million or 6.6%, compared to the same prior year period, primarily attributable to contractual increases in rent, higher rental rates on lease renewals and higher rental rates on new leases despite a slight decrease in overall average occupancy for the six-month period ended June 30, 2025.
FFO* reached $15.9 million, compared to $15.1 million in the first half of 2024, an increase of
$0.8 million or 5.1%. The increase was mainly driven by increases in contractual base rent, higher rates on renewals, and higher rental rates on new leases, partially offset by higher general and administrative expenses due to professional fees.
AFFO Payout Ratio, Basic* was 91.8%, compared to 92.4% for the same period in the prior year, a decrease driven by the same factors noted for the three-month period above.
Sustained Operating Environment
As of June 30, 2025, PROREIT's portfolio comprised 118 investment properties, totalling 6.7 million square feet of GLA, with a weighted average lease term to maturity (WALT) of 4.5 years, compared to 3.8 years at the same date last year.
The occupancy rate of the portfolio remains strong at 97.8% as at June 30, 2025 (including committed space), compared to 97.1% at the same date last year.
As of the date of this press release, approximately 63.1% of GLA maturing in 2025 has been renewed at 35.7% positive average spread, and approximately 52.5% of GLA maturing in 2026 has been renewed at 33.8% positive average spread.
The industrial segment accounted for 88% of GLA and 83.5% of base rent at June 30, 2025. Proforma the completion of the sale of a portfolio of six retail properties in Atlantic Canada pursuant to the binding agreement entered into subsequent to quarter-end, the industrial segment will account for approximately 88% of base rent.
Portfolio Transactions
On June 26, 2025, the REIT completed the previously announced acquisition of a portfolio of six industrial properties in Winnipeg, Manitoba, comprising a total of 678,177 square feet of GLA from Parkit for an aggregate purchase price of approximately $96.5 million (excluding closing costs) (the "Transaction").
The $96.5 million purchase price (excluding closing costs) was satisfied with cash from a new $63.0 million 3-year secured non-revolving credit facility at a fixed swap rate of approximately 4.54% and the issuance at a price of $6.20 per unit of approximately $40.0 million of trust units of the REIT and Class B LP Units, in aggregate, to Parkit. Approximately $3.2 million of the non-revolving credit facility was used to repay a portion of indebtedness outstanding under the REIT's existing revolving credit facility and $5.5 million for general business purposes.
As part of the Transaction, the REIT and Parkit entered into an investor rights agreement providing for, among other things, certain lock-up and standstill provisions, pre-emptive and registration rights, as well as the right for Parkit to nominate one trustee to the REIT's board. In accordance with the investor rights agreement, Steven Scott, who currently serves as Chairman on Parkit's board, was appointed to the board of the REIT as the initial Parkit nominee.
On August 5, 2025, the REIT entered into a binding agreement with a third party purchaser to sell a portfolio of six non-core retail properties in Atlantic Canada totalling approximately 221,000 square feet of GLA for gross proceeds of $39.8 million (excluding closing costs). Net proceeds of the sale will be used to repay approximately $21.5 million of related mortgages, with the balance to be used to repay a portion of the credit facilities or for general business and working capital purposes. The closing of the sale is scheduled for the third quarter of 2025 and is subject to standard closing conditions.
Financial Position
Total debt (current and non-current) was $562.4 million at June 30, 2025, compared to $495 million at March 31, 2025, and to $486.6 million at June 30, 2024.
At June 30, 2025, mortgage maturities amounted to $33.1 million for 2025 and $155.8 million for 2026, with a weighted average interest rate on these expiring maturities of 4.8% for 2025 and 3.8% for 2026.
Total debt to total assets was 50.6% at June 30, 2025, compared to 49.3% at March 31, 2025 and to 49.1% at June 30, 2024.
Adjusted Debt to Gross Book Value* was 50.7% at June 30, 2025, compared to 49.5% at June 30, 2024.
Adjusted Debt to Annualized Adjusted EBITDA Ratio* was 9.8x at June 30, 2025, compared to 8.8x at June 30, 2024. The increase was anticipated following the Transaction, as the associated debt was fully recorded, while the Adjusted EBITDA* contribution reflected only four days of earnings within the quarter.
Sustainability
On July 23, 2025, PROREIT released its 2024 Sustainability Report, which highlights the ongoing commitments, strategy and accomplishments made to advance the environmental, social and governance (ESG) aspects of the organization.
The report was prepared with references to recognized standards, including Sustainability Accounting Standards Board (SASB) Standards for the real estate industry and Task ...
