FREDERICTON, NB, May 13, 2026 /CNW/ - Plaza Retail REIT (TSX: PLZ.UN) ("Plaza" or the "REIT") today announced its financial results for the three months ended March 31, 2026.
"We started 2026 with solid financial and operating performance driven by continued execution across our portfolio," said Jason Parravano, President and Chief Executive Officer. FFO increased by 11.7% year over year to $10.9 million, or $0.098 per unit, reflecting higher NOI from our same asset portfolio, contributions from optimization initiatives, acquisitions, intensifications and developments transferred to income producing properties, and the disciplined redeployment of capital from asset sales. Excluding the impact of the accrued bonuses in the current year and reorganization costs in the prior year, FFO per unit would have increased by 15.6% to $0.102. We have made many structural changes to the way we run the business in the last year which has contributed to some noise in our earnings; however, we are satisfied with the results.
Operating fundamentals remained resilient, with same asset NOI increasing by 1.9%, total NOI increasing by 2.5% in the quarter and committed occupancy holding at 97.5%, supported by rent escalations, renewals, and continued tenant demand across our essential retail portfolio. Excluding enclosed malls, our occupancy remains near perfect at 99%. As a result, leasing spreads remain strong. Our negotiated spreads reached 13.4% based on the average rate over the term. In addition, our new leasing spreads were 76.1% which further highlights demand for our space.
"While AFFO was flat year over year due to higher leasing activity and maintenance capital investments, these expenditures are consistent with our strategy to enhance asset quality, support stronger rental spreads, and unlock long term value," continued Mr. Parravano. As we progress through 2026, we expect the benefit of recently completed and advancing projects to become increasingly evident, reinforcing our ability to drive sustainable cash flow growth and position Plaza for long term value creation."
Summary of Selected IFRS Financial Results
(CAD$000s, Three Three $ Change % Change
except MonthsEndedMarch MonthsEndedMarch
percentages) 31, 2026 31, 2025
Revenues $32,510 $31,137 $1,373 4.4 %
Net operating
income (NOI)(1) $18,795 $18,344 $451 2.5 %
Net change in fair
value of
investment
properties $2,118 $2,136 ($18) -
Profit and total
comprehensive
income $12,820 $9,319 $3,501 -
(1) This is a non-GAAP financial measure. Refer to the
Non-GAAP Financial Measures defined here and in Part
I and VII of the Management's Discussion and Analysis
("MD&A") ending March 31, 2026 for more information
on each non-GAAP financial measure.
Quarterly Highlights
-- NOI was $18.8 million, up $451 thousand or 2.5% from the same period in
2025. The increase is due to increased revenue from leasing and rent
escalations over the same period in the prior year, partially offset by
higher operating expenses.
-- Profit and total comprehensive income for the current quarter was $12.8
million compared to $9.3 million in the same period in the prior year.
Profit and total comprehensive income was impacted by the change in share
of profit of associates, which increased by $1.7 million over the same
period in the prior year. This was mainly due to the non-cash fair value
adjustment to the underlying investment properties, as well as increased
income at various properties. Profit and total comprehensive income also
increased this quarter as a result of changes in non-cash fair value
adjustments relating to derivative assets and liabilities, which
accounted for $1.2 million of the increase, as well as the change in fair
value of Class B exchangeable LP units.
Summary of Selected Non-IFRS Financial Results
(CAD$000s, except Three Three $ Change % Change
percentages, MonthsEndedMarch MonthsEndedMarch
units repurchased 31, 2026 31, 2025
and
per unit amounts)
FFO(1) $10,908 $9,763 $1,145 11.7 %
FFO per unit(1) $0.098 $0.088 $0.010 11.4 %
FFO payout ratio(1) 71.6 % 80.0 % n/a (10.5 %)
AFFO(1) $8,281 $8,289 ($8) (0.1 %)
AFFO per unit(1) $0.074 $0.074 - -
AFFO payout ratio(1) 94.3 % 94.2 % n/a 0.1 %
Same-asset NOI(1) $19,068 $18,707 $361 1.9 %
Committed occupancy
-- including
non-consolidated
investments(2) 97.5 % 97.6 % n/a (0.1 %)
Same-asset committed
occupancy(3) 97.1 % 97.1 % n/a -
(1) This is a non-GAAP financial measure. Refer to the
Non-GAAP Financial Measures defined here and in Part
I and VII of the MD&A ending March 31, 2026 for more
information on each non-GAAP financial measure.
(2) Excludes properties under development.
(3) Same-asset committed occupancy excludes properties
under development and non-consolidated investments.
Quarterly Highlights
-- FFO & AFFO: For the three months ended March 31, 2026 FFO increased $1.1
million or 11.7% on a dollar basis and 11.4% on a per unit basis,
compared with the same quarter in the prior year. FFO increased due to
higher NOI from same-asset, acquisitions, intensifications, developments
and properties transferred to income producing. FFO was also impacted by
properties sold, from which the capital generated was recently deployed.
In addition, FFO was impacted by an increase in administrative costs,
partially due to accrued bonuses as well as higher technology costs and
professional fees in the current year, partially offset by reorganization
costs in the prior year. AFFO of $8.3 million was consistent with the
same period in the prior year on a dollar and per unit basis. AFFO was
impacted by the changes in FFO noted above, as well as higher leasing
costs reflecting initiatives to attract higher-quality tenants, drive
optimizations at existing properties to achieve improved rental spreads,
and higher maintenance capital expenditures in the current period.
-- Same-asset NOI increased by $361 thousand or 1.9% due to an increase in
revenue from rent escalations and renewals, partially offset by higher
operating expenses during the current period.
Non-GAAP Financial Measures
This press release contains certain non-GAAP financial measures including FFO, AFFO and same-asset NOI. These measures are commonly used by entities in the real estate industry as useful metrics for measuring performance. However, they do not have a standardized meaning prescribed by IFRS Accounting Standards and are not necessarily comparable to similar measures presented by other publicly traded entities. These measures should be considered as supplemental in nature and not as a substitute for related financial information prepared in accordance with IFRS Accounting Standards. For further explanation of non-GAAP measures and their usefulness in assessing Plaza's performance, please refer to the section "Basis of Presentation" in Part I and the section "Explanation of Non-GAAP Measures" in Part VII of the REIT's Management's Discussion and Analysis as at March 31, 2026 which can be found on Plaza's website at www.plaza.ca and on SEDAR+ at www.sedarplus.ca.
The following tables reconcile the non-GAAP measures FFO, AFFO, and NOI to the most comparable IFRS measures.
Funds from Operations (FFO) and Adjusted Funds from Operations (AFFO)
Plaza's summary of FFO and AFFO for three months ended March 31, 2026, compared to the three months ended March 31, 2025, is presented below:
(000s -- except 3 Months 3 Months Change over per unit amounts EndedMarch 31, EndedMarch 31, Prior Period and percentage 2026 2025 data, unaudited) Profit and total comprehensive income for the period attributable to unitholders $ 12,727 $ 9,301 Incremental leasing costs included in administrative expenses(7) 749 280 Amortization of debenture issuance costs(8) (19) (18) Distributions on Class B exchangeable LP units included in finance costs -- operations 81 81 Deferred income taxes 73 (66) Right-of-use land lease principal repayments (208) (217) Fair value adjustment to restricted and deferred units (38) 139 Fair value adjustment to investment properties (2,118) (2,136) Fair value adjustment to investments(9) (196) 786 Fair value adjustment to Class B exchangeable LP units (58) 266 Fair value adjustment to convertible debentures 79 169 Fair value adjustment to derivative assets and liabilities (365) 856 Fair value adjustment to right-of-use land lease assets 208 217 Equity accounting adjustment(10) (42) 139 Non-controlling interest adjustment(6) 35 (34)
FFO(1) $ 10,908 $ 9,763 $ 1,145
FFO change over prior
period - % 11.7 %
FFO(1) $ 10,908 $ 9,763
Non-cash revenue --
straight-line
rent(5) (293) (94)
Leasing costs --
existing
properties(2) (5)
(11) (1,732) (1,266)
Maintenance capital
expenditures --
existing
properties(12) (608) (167)
Non-controlling
interest
adjustment(6) 6 53
AFFO(1) $ 8,281 $ 8,289 ($ 8)
AFFO change over
prior period - % (0.1 %)
Weighted average
trust units
outstanding --
basic(1)(3) 111,593 111,575
FFO per unit --
basic(1) $ 0.098 $ 0.088 11.4 %
AFFO per unit --
basic(1) $ 0.074 $ 0.074 -
Gross distribution to
unitholders(4) $ 7,811 $ 7,809
FFO payout ratio --
basic(1) 71.6 % 80.0 %
AFFO payout ratio --
basic(1) 94.3 % 94.2 %
FFO(1) $ 10,908 $ 9,763
Interest on dilutive
convertible
debentures - 176
FFO -- diluted(1) $ 10,908 $ 9,939 $ 969
Diluted weighted
average trust units
outstanding(1)(3) 111,593 114,105
AFFO(1) $ 8,281 $ 8,289
Interest on dilutive
convertible
debentures - 176
AFFO -- diluted(1) $ 8,281 $ 8,465 ($ 184)
Diluted weighted
average trust units
outstanding(1)(3) 111,593 114,105
FFO per unit --
diluted(1) $ 0.098 $ 0.087 12.6 %
AFFO per unit --
diluted(1) $ 0.074 $ 0.074 -
(1) This is a non-GAAP financial measure. Refer to "Non-GAAP
Financial Measures" in Part I and "Explanation of
Non-GAAP Financial Measures" in Part VII of the MD&A
for more information.
(2) Based on actuals.
(3) Includes Class B exchangeable LP units.
(4) Includes distributions on Class B exchangeable LP
units.
(5) Includes proportionate share of revenue and expenditures
at equity-accounted investments.
(6) The non-controlling interest ("NCI") adjustment includes
adjustments required to translate the profit and total
comprehensive income attributable to NCI of $93 thousand
for the three months ending March 31, 2026 (March
31, 2025 - $18 thousand) to FFO and AFFO for the NCI.
(7) Incremental leasing costs included in administrative
expenses include leasing costs of salaried leasing
staff directly attributed to signed leases that would
otherwise be capitalized if incurred from external
sources. These costs are excluded from FFO in accordance
with REALPAC's definition of FFO.
(8) Amortization of debenture issuance costs is deducted
on a straight-line basis over the remaining term of
the related convertible debentures, in accordance
with REALPAC.
(9) Fair value adjustment to investments relate to the
unrealized change in fair value of equity accounted
entities which are excluded from FFO in accordance
with REALPAC's definition of FFO.
(10) Equity accounting adjustment for derivative assets
and liabilities includes the change in non-cash fair
value adjustments relating to derivative assets and
liabilities held by equity accounted entities, which
are excluded from FFO in accordance with REALPAC's
definition of FFO.
(11) Leasing costs -- existing properties include internal
and external leasing costs except to the extent that
leasing costs relate to development projects, in accordance
with REALPAC's definition of AFFO. See the Gross Capital
Additions Including Leasing Fees note on page 25 of
the MD&A.
(12) Maintenance capital expenditures -- existing properties
include expenditures related to sustaining and maintaining
existing space, in accordance with REALPAC's definition
of AFFO. See the Gross Capital Additions Including
Leasing Fees note on page 25 of the MD&A.
Net Property Operating Income (NOI) and Same-Asset Net Property Operating Income (Same-Asset NOI)
(000s) 3 MonthsEndedMarch 31, 3 MonthsEndedMarch 31,
2026(unaudited) 2025(unaudited)
Same-asset NOI(1) $ 19,068 $ 18,707
Acquisitions,
intensifications,
developments and
redevelopments
transferred to IPP in
2025 & 2026 ($3.2
million annual
stabilized NOI) 687 202
NOI from properties - -
currently under
development and
redevelopment ($1.3
million annual
stabilized NOI)
Straight-line rent 293 94
Administrative expenses
charged to NOI (1,320) (1,096)
Lease termination revenue 19 4
Properties disposed 3 476
Other 45 (43)
Total NOI(1) $ 18,795 $ 18,344
Percentage increase over
prior period 2.5 %
(1) This is a non-GAAP financial measure. Refer to "Non-GAAP
Financial Measures" in Part I and "Explanation of
Non-GAAP Financial Measures" in Part VII of the MD&A
for more information.
Cautionary Statements Regarding Forward-looking Information
This press release contains forward-looking statements relating to Plaza's operations, outlook, financial condition and the environment in which it operates, including expectations regarding current and future operating performance optimization and intensification activities and other projects, and the anticipated impact thereof on future results. Forward-looking statements are not future guarantees of future performance and involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of Plaza to be materially different from any future results, performance or achievements expressed, implied or projected by forward-looking statements contained in this press release, including but not limited to changes in economic, retail, capital market, or debt market conditions, including recessions and changes in, or the extent of changes in, interest rates and the rate of inflation; changes to applicable duties, tariffs and trade laws; supply chain constraints; competitive real estate conditions; and others described in Plaza's Annual Information Form for the year ended December 31, 2025 and Management's Discussion and Analysis for the three months ended March 31, 2026 which can be obtained on the REIT's website at www.plaza.ca or on SEDAR+ at www.sedarplus.ca. Forward-looking statements are based on a number of expectations and assumptions made in light of management's experience and perceptions of historical trends and current conditions, including that progress continues on Plaza's optimizations, intensifications and other projects, that tenant demand for space continues, and that Plaza is able to lease or re-lease space at anticipated rents. Although based upon information currently available to management and what management believes are reasonable expectations and assumptions, there can be no assurances that forward-looking statements will prove to be accurate. Readers, therefore, should not place undue reliance on any forward-looking statements. Plaza undertakes no obligation to publicly update any such statements, except as required by law. These cautionary statements qualify all forward-looking statements contained in this press release.
Further Information
Information appearing in this press release is a select summary of results. A more detailed analysis of the REIT's financial and operating results is included in the REIT's Management's Discussion and Analysis and Consolidated Financial Statements, which can be found on the REIT's website at www.plaza.ca or on SEDAR+ at www.sedarplus.ca.
Conference Call
Jason Parravano, President and CEO and Jim Drake, CFO, will host a conference call for the investment community on May 14, 2026, at 9:00 a.m. EDT. The call-in numbers for participants are 1-416-945-7677 (local Toronto) or 1-888-699-1199 (toll free, within North America).
A replay of the call will be available until May 21, 2026. To access the replay, dial 1-289-819-1450 (local Toronto) or 1-888-660-6345 (Passcode: 42067#). The audio replay will also be available for download on the REIT's website for 90 days following the conference call.
About Plaza
Plaza is an open-ended real estate investment trust and is a leading retail property owner and developer, focused on Ontario, Quebec and Atlantic Canada. Plaza's portfolio at March 31, 2026 includes interests in 190 properties totaling approximately 8.8 million square feet across Canada and additional lands held for development. Plaza's portfolio largely consists of open-air centres and stand-alone small box retail outlets and is predominantly occupied by national tenants with a focus on the essential needs, value and convenience market segments. For more information, please visit www.plaza.ca.
SOURCE Plaza Retail REIT
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May 13, 2026 17:49 ET (21:49 GMT)