Slate Grocery REIT Reports First Quarter 2025 Results

TORONTO--(BUSINESS WIRE)--May 05, 2025-- 

Slate Grocery REIT (TSX: SGR.U) (TSX: SGR.UN) (the "REIT"), an owner and operator of U.S. grocery-anchored real estate, today announced its financial results and highlights for the three months ended March 31, 2025.

"Grocery anchored real estate has proven its resiliency through various economic cycles, and we continue to have great conviction in the ability of this asset class to perform in today's economic environment," said Blair Welch, Chief Executive Officer of Slate Grocery REIT. "Our portfolio continues to deliver healthy growth in same-property net operating income, driven by consistently strong leasing activity at double-digit spreads. Our team achieved record high renewal spreads in the first quarter, underscoring the growth embedded in our portfolio of below market rents. With new supply in the grocery-anchored sector expected to remain constrained in the near to medium term, we believe our portfolio is well positioned to drive stable growth and long-term value creation."

For the CEO's letter to unitholders for the quarter, please follow the link here.

Highlights

   -- Same-property Net Operating Income ("NOI") increased by 4.3% or $6.8 
      million on a trailing twelve-month basis, adjusting for completed 
      redevelopments, driven by several consecutive quarters of strong leasing 
      volumes at attractive spreads 
 
          -- The REIT completed 222,886 square feet of total leasing in the 
             quarter; renewal spreads1 reached a record high at 17.1% above 
             expiring rents, and new deals were completed at 22.2% above 
             comparable average in-place rent 
 
          -- Portfolio occupancy remained stable at 94.4%, as at March 31, 2025 
 
          -- The REIT's average in-place rent of $12.72 per square foot remains 
             well below the market average of $23.852, providing significant 
             runway for continued rent increases 
 
   -- The REIT has only $179.4 million3 of debt maturing in 2025, which 
      represents 12.9%3 of the REIT's total debt 
 
          -- The REIT financed $17.4 million of debt subsequent to quarter end, 
             with productive discussions underway to refinance additional 
             upcoming maturities 
 
          -- The REIT's current portfolio valuation continues to provide 
             significant positive leverage and embedded NOI growth 
 
   -- The REIT's units continue to trade at a discount to net asset value, 
      presenting a compelling investment opportunity for unitholders looking 
      for an attractive total return 
 
(1) As of March 31, 2025, the REIT revised its "Deal Types" methodology. Refer 
to 'Leasing and Property Portfolio' in Part II of Management's Discussion and 
Analysis for further details. 
(2) CBRE Econometric Advisors, Q1 2025 
(3) Including the REIT's share of joint venture investments. 
 

Summary of Q1 2025 Results

 
                                                  Three months ended March 31, 
                               ----------------------------------------------- 
(thousands of U.S. dollars, 
except per unit amounts)                   2025                 2024  Change % 
-----------------------------      ------------      ---------------  -------- 
Rental revenue                 $         53,067  $            51,915      2.2% 
NOI (1 2)                      $         41,239  $            40,572      1.6% 
Net income (2)                 $         16,082  $            13,612     18.1% 
 
Same-property NOI (3 month 
 period, 114 properties) (1 
 2)                            $         40,980  $            39,869      2.8% 
Same-property NOI (12 month 
 period, 111 properties) (1 
 2)                            $        159,391  $           153,794      3.6% 
 
New leasing (square feet) (2)            43,098               98,198   (56.1)% 
New leasing spread (2)                    22.2%                30.9%   (28.2)% 
Total leasing (square feet) 
 (2)                                    222,886              770,784   (71.1)% 
Total leasing spread (2)                  15.6%                10.8%     44.4% 
New leasing -- anchor / 
 junior anchor (2)                       11,000               10,000     10.0% 
 
Weighted average number of 
 units outstanding ("WA 
 units")                                 60,385               60,307      0.1% 
FFO (1 2)                      $         15,757  $            16,198    (2.7)% 
FFO per WA units (1 2)         $           0.26  $              0.27    (3.2)% 
FFO payout ratio (1 2)                    82.3%                80.1%      2.8% 
AFFO (1 2)                     $         12,388  $            13,045    (5.0)% 
AFFO per WA units (1 2)        $           0.21  $              0.22    (2.9)% 
AFFO payout ratio (1 2)                  104.7%                99.4%      5.3% 
Fixed charge coverage ratio 
 (1 3)                                     1.9x                 2.0x    (3.1)% 
-----------------------------  ----------------  -------------------  -------- 
 
(thousands of U.S. dollars, 
except per unit amounts)         March 31, 2025    December 31, 2024  Change % 
-----------------------------  ----------------  -------------------  -------- 
Total assets                   $      2,236,028  $         2,233,699      0.1% 
Total assets, proportionate 
 interest (1 2)                $      2,445,443  $         2,444,143      0.1% 
Debt                           $      1,169,435  $         1,166,655      0.2% 
Debt, proportionate interest 
 (1 2)                         $      1,372,447  $         1,370,530      0.1% 
Net asset value per unit       $          13.83  $             13.84    (0.1)% 
 
Number of properties (2)                    116                  116       --% 
Portfolio occupancy (2)                   94.4%                94.8%    (0.4)% 
Debt / GBV ratio                          52.3%                52.2%      0.2% 
-----------------------------      ------------      ---------------  -------- 
(1) Refer to "Non-IFRS Measures" section below. 
(2) Includes the REIT's share of joint venture investments. 
(3) As of March 31, 2025, the REIT transitioned from disclosing interest 
coverage ratio to fixed charge coverage ratio. Refer to 'Fixed Charge Coverage 
Ratio' in Part III of Management's Discussion and Analysis for further 
details. 
 

Conference Call and Webcast

Senior management will host a live conference call at 9:00 am ET on May 6, 2025 to discuss the results and ongoing business initiatives of the REIT.

The conference call can be accessed by dialing (289) 514-5100 or 1 (800) 717-1738. Additionally, the conference call will be available via simultaneous audio found at https://onlinexperiences.com/Launch/QReg/ShowUUID=A7343691-73C7-4F63-B89E-05C2058E4A0B&LangLocaleID=1033. A replay will be accessible until May 20, 2025 via the REIT's website or by dialing (289) 819-1325 or 1 (888) 660-6264 (access code 44474#) approximately two hours after the live event.

About Slate Grocery REIT (TSX: SGR.U / SGR.UN)

Slate Grocery REIT is an owner and operator of U.S. grocery-anchored real estate. The REIT owns and operates approximately $2.4 billion of critical real estate infrastructure across major U.S. metro markets that communities rely upon for their everyday needs. The REIT's resilient grocery-anchored portfolio and strong credit tenants are expected to provide unitholders with durable cash flows and the potential for capital appreciation over the longer term. Visit slategroceryreit.com to learn more about the REIT.

About Slate Asset Management

Slate Asset Management is a global investor and manager focused on essential real estate and infrastructure assets. We focus on fundamentals with the objective of creating long-term value for our investors and partners across the real assets space. We are supported by exceptional people and flexible capital, which enable us to originate and execute on a wide range of compelling investment opportunities. Visit slateam.com to learn more, and follow Slate Asset Management on LinkedIn, X (Twitter), and Instagram.

Supplemental Information

All interested parties can access Slate Grocery's Supplemental Information online at slategroceryreit.com in the Investors section. These materials are also available on SEDAR+ or upon request to the REIT at info@slateam.com or (416) 644-4264.

Forward Looking Statements

Certain information herein constitutes "forward-looking information" as defined under Canadian securities laws which reflect management's expectations regarding objectives, plans, goals, strategies, future growth, results of operations, performance, business prospects and opportunities of the REIT. The words "plans", "expects", "does not expect", "forecasts", "scheduled", "estimates", "intends", "anticipates", "does not anticipate", "projects", "believes", or variations of such words and phrases or statements to the effect that certain actions, events or results "may", "will", "could", "would", "might", "occur", "be achieved", or "continue" and similar expressions identify forward-looking statements. Management believes that the expectations reflected in its forward-looking statements are based upon reasonable assumptions, however, management can give no assurance that actual results, performance or achievements will be consistent with these forward-looking statements. Such forward-looking statements are qualified in their entirety by the inherent risks and uncertainties surrounding future expectations.

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