-- Acquisitions drive strong year-over-year growth of 22.8% in rental revenue, 20.0% in Cash NOI and 18.6% in AFFO --
Toronto, Aug. 13, 2026 /CNW/ -- Automotive Properties Real Estate Investment Trust (TSX: APR.UN) ("Automotive Properties REIT" or the "REIT") today announced its financial results for the three-month ("Q2 2026") and six-month ("YTD 2026") periods ended June 30, 2026. The REIT also announced today that its Board of Trustees approved a 2.0% increase to the REIT's regular cash distributions.
"We generated strong year-over-year growth in rental revenue, cash NOI, and AFFO for the quarter, reflecting the positive impact of the 17 property acquisitions we completed during 2025 and to date in 2026, and our contractual rent increases. We have posted record quarterly AFFO per unit in both our first and second quarters this year," said Milton Lamb, CEO of Automotive Properties REIT. "With our strong financial performance, the REIT's Trustees have approved a 2.0% increase to our cash distributions, marking the second consecutive year we have implemented a distribution increase."
"We are well positioned to build on our positive momentum, supported by a growing property portfolio anchored by high-quality tenants providing essential automotive retail and services, locations in prime metropolitan markets in Canada and the U.S. with GDP and population growth, and an attractive net lease structure with embedded fixed or CPI-adjusted rental growth."
Q2 2026 Highlights
-- The REIT generated AFFO per Unit1 of $0.263 (diluted) and paid regular
cash distributions of $0.206 per Unit (as defined below) in Q2 2026,
representing an AFFO payout ratio1 of approximately 78.3%. For the
comparable three-month period ended June 30, 2025 ("Q2 2025"), the REIT
generated AFFO per Unit of $0.249 (diluted) and paid regular cash
distributions of $0.201 per Unit, representing an AFFO payout ratio of
approximately 80.7%.
-- The REIT had a Debt to Gross Book Value ("Debt to GBV")2 ratio of 47.5%
as at June 30, 2026, and had $58.0 million of undrawn capacity under its
revolving credit facilities, $0.7 million of cash on hand, and 11
unencumbered properties with an aggregate value of approximately $166.7
million. As at the date of this news release, the REIT has a Debt to GBV
ratio of 47.5%, approximately $64.0 million of undrawn capacity under its
revolving credit facilities, and 11 unencumbered properties with an
aggregate value of approximately $166.7 million.
-- On April 7, 2026, the REIT acquired two automotive dealership properties
located in Santa Ana, Orange Country, California (the "Orange Country
Properties") for a purchase price of US$30.15 million. The REIT funded
the purchase price of the Orange Country Properties, which include the
Audi South Coast and South Coast Volkswagen dealership properties, by
drawing on its revolving credit facilities. The Orange County Properties
are tenanted by Penske Automotive Group, Inc $(PAG)$.
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(1) AFFO per Unit is a non-IFRS measure and AFFO payout
ratio is a non-IFRS ratio. See "Non-IFRS Financial
Measures" at the end of this news release.
(2) Debt to GBV is a supplementary financial measure.
See "Non-IFRS Financial Measures" at the end of this
news release.
New Lease and Sale of 50% Interest in Vaughan Automotive Dealership Property
The REIT announced today that it has entered into a joint arrangement with a member of the Dilawri Group, pursuant to which the REIT has agreed to sell a 50% interest in its 68,874 square-foot automotive dealership property located on 2.98 acres of land at 9088 Jane Street in Vaughan, Ontario (the "Vaughan Property) to a member of the Dilawri Group for a cash purchase price of $16.0 million, reflecting a premium to IFRS value, with the REIT expected to retain the remaining 50% (the "Vaughan Transaction"). Both parties have waived conditions. The Vaughan Property is expected to be tenanted by an affiliate of the Dilawri Group as a full-service automotive dealership, under a 16-year, triple-net lease and is subject to a landlord redevelopment option. The Vaughan Transaction is subject to customary closing conditions and is expected to be completed by the end of September 2026 with rent payments commencing on December 1, 2026. The current tenant of Vaughan Property has notified the REIT that it will vacate the premises at the end of the lease term on or about September 1, 2026.
Upon closing of the Vaughan Transaction, the REIT will have no material lease expirations until 2028 as a result of the pending new lease on the Vaughan Property, combined with the lease renewal activity in Q2 2026.
Distribution Increase
The REIT announced today that its Board of Trustees have approved an increase of approximately 2.0% to the REIT's annual cash distribution, from $0.822 per Unit to $0.839 per Unit. The monthly distribution will be $0.0699 per Unit, up from $0.0685 per Unit. The increase will be effective for the REIT's August 2026 cash distribution, to be paid on or about September 15, 2026 to Unitholders of record on August 31, 2026. The increase to the distribution reflects management's and the Trustees' confidence in the REIT's stability and cash flow. This increase follows the 2.2% distribution increase announced by the REIT in August 2025.
Financial Results Summary
Three months ended Six months ended
June 30, June 30,
($000s, except per Unit 2026 2025 Change 2026 2025 Change
amounts)
Rental revenue (1) $30,205 $24,601 22.8 % $59,301 $48,503 22.3 %
NOI (2) 25,145 20,859 20.5 % 49,345 41,070 20.1 %
Cash NOI (2) 24,760 20,635 20.0 % 48,590 40,653 19.5 %
Same Property Cash NOI
(1) (2) 21,093 20,640 2.2 % 41,531 40,664 2.1 %
Net Income (3) 15,471 13,003 19.0 % 39,894 20,698 92.7 %
Net Income and Other
Comprehensive Income
(3) 18,110 11,240 61.1 % 43,376 18,881 129.7 %
FFO (2) 15,297 12,807 19.4 % 30,493 25,428 19.9 %
AFFO (2) 14,920 12,578 18.6 % 29,725 25,005 18.9 %
Distributions per Unit 0.206 0.201 0.005 0.411 0.402 0.009
FFO per Unit - basic
(2) (4) 0.277 0.261 0.016 0.553 0.518 0.035
FFO per Unit - diluted
(2) (5) 0.270 0.254 0.016 0.538 0.504 0.034
AFFO per Unit - basic
(2) (4) 0.270 0.256 0.014 0.539 0.509 0.030
AFFO per Unit - diluted
(2) (5) 0.263 0.249 0.014 0.525 0.496 0.029
Ratios (%)
FFO payout ratio (2) 76.2 % 79.1 % 2.9 % 76.4 % 79.8 % 3.4 %
AFFO payout ratio (2) 78.3 % 80.7 % 2.4 % 78.3 % 81.0 % 2.7 %
Debt to GBV (6) 47.5 % 44.4 % -3.1 % 47.5 % 44.4 % -3.1 %
(1) Rental revenue is based on rents from leases entered
into with tenants, all of which are triple-net leases
and include recoverable realty taxes and straight-line
adjustments. Same Property Cash NOI is based on rental
revenue for the same asset base having consistent
gross leasable area in both periods.
(2) NOI, Cash NOI, Same Property Cash NOI, FFO, AFFO,
FFO per Unit, AFFO per Unit, FFO payout ratio and
AFFO payout ratio are non-IFRS measures or non-IFRS
ratios, as applicable. See "Non-IFRS Financial Measures"
at the end of this news release. References to "Same
Property" correspond to properties that the REIT owned
in Q2 2025, thus removing the impact of acquisitions
and dispositions.
(3) Net Income and Net Income and Other Comprehensive
Income for Q2 2026 includes changes in fair value
adjustments of $1.6 million for Class B LP Units,
Deferred Units ("DUs"), Income Deferred Units ("IDUs"),
Performance Deferred Units ("PDUs") and Restricted
Deferred Units ("RDUs"), $1.3 million for interest
rate swaps and $3.1 million for investment properties.
Please refer to the consolidated financial statements
of the REIT and the notes thereto for additional information.
(4) FFO per Unit and AFFO per Unit -- basic is calculated
by dividing the total FFO and AFFO by the amount of
the total weighted average number of outstanding Units.
The total weighted average number of Units outstanding
-- basic for Q2 2026 was 55,160,438.
(5) FFO per Unit and AFFO per Unit -- diluted is calculated
by dividing the total FFO and AFFO by the amount of
the total weighted average number of outstanding Units,
DUs, IDUs, PDUs and RDUs granted to independent trustees
and management of the REIT. The total weighted average
number of Units outstanding (including Class B LP
Units, DUs, IDUs, PDUs and RDUs) on a fully diluted
basis for Q2 2026 was 56,711,260.
(6) Debt to GBV is a supplementary financial measure.
See "Non-IFRS Financial Measures" at the end of this
news release.
Rental revenue in Q2 2026 increased by 22.8% to $30.2 million, compared to $24.6 million in Q2 2025. The increase in rental revenue reflected growth from properties acquired during and subsequent to Q2 2025 and contractual annual rent increases.
The REIT generated total Cash NOI of $24.8 million in Q2 2026, representing an increase of 20.0% compared to Q2 2025. The increase was primarily attributable to properties acquired during and subsequent to Q2 2025 and contractual rent increases. Same Property Cash NOI was $21.1 million in Q2 2026, representing an increase of 2.2% compared to Q2 2025. The increase was primarily attributable to contractual rent increases.
The REIT recorded net income and other comprehensive income of $18.1 million in Q2 2026, compared to $11.2 million in Q2 2025. The increase was primarily due to higher NOI, the change in non-cash fair value adjustment for investment properties, and a foreign exchange gain, partially offset by higher interest costs and changes in non-cash fair value adjustments for interest rate swaps in Q2 2026 compared to Q2 2025.
FFO in Q2 2026 increased 19.4% to $15.3 million, or $0.270 per Unit (diluted), compared to $12.8 million, or $0.254 per Unit (diluted), in Q2 2025. The increase reflected the impact of the properties acquired during and subsequent to Q2 2025 and contractual rent increases.
AFFO in Q2 2026 increased 18.6% to $14.9 million, or $0.263 per Unit (diluted), compared to $12.6 million, or $0.249 per Unit (diluted), in Q2 2025. The increase reflected the impact of the properties acquired during and subsequent to Q2 2025 and contractual rent increases. Straight-line rent adjustment is excluded from the calculation of AFFO.
Cash Distributions
For Q2 2026, the REIT declared and paid regular cash distributions of $11.34 million, or $0.206 per Unit, representing an AFFO payout ratio of 78.3%. The REIT's AFFO payout ratio was lower in Q2 2026 compared to the 80.7% AFFO payout ratio in Q2 2025, primarily due to the positive impact of the properties acquired during and subsequent to Q2 2025 and contractual rent increases.
Liquidity and Capital Resources
As at June 30, 2026, the REIT had a Debt to GBV ratio of 47.5%, $58.0 million of undrawn capacity under its revolving credit facilities, $0.7 million of cash on hand, and 11 unencumbered properties with an aggregate value of approximately $166.7 million. As at the date of this news release, the REIT has a Debt to GBV ratio of 47.5%, approximately $64.0 million of undrawn capacity under its revolving credit facilities, and 11 unencumbered properties with an aggregate value of approximately $166.7 million.
As at June 30, 2026, 74% of the REIT's debt was fixed with a weighted average interest rate of 4.49%, a weighted average interest rate swap term and mortgages remaining of 3.9 years, and a weighted average term to maturity of debt of 2.9 years.
Units Outstanding
As at June 30 2026, there were 54,359,385 REIT Units and 833,333 Class B LP Units outstanding.
Outlook
The REIT is subject to risks associated with inflation, interest rates, currency fluctuations and availability of capital. The REIT is actively monitoring the evolving trade tariff environment and other trade restrictions, and their impact on cross-border trade, material costs, and overall economic market conditions in Canada and the United States. The continued conflict in the Middle East has resulted in increased commodity prices and could lead to further significant market and other disruptions, including continued volatility in commodity prices and supply of energy resources. While the full extent and impact of these trade tariffs, trade restrictions and geopolitical events remains uncertain, the REIT is continuing to assess their potential effect on its business, property valuations and financial condition.
The Canadian and United States automotive and original equipment manufacturer dealership and service industry is highly fragmented, and the REIT expects continued consolidation over the mid to long term due to increased industry sophistication and growing capital requirements for owner operators, which encourages them to pursue increased economies of scale.
Financial Statements
The REIT's unaudited condensed consolidated financial statements and related Management's Discussion & Analysis ("MD&A") for Q2 2026 are available on the REIT's website at www.automotivepropertiesreit.ca and on SEDAR+ at www.sedarplus.ca.
Conference Call
Management of the REIT will host a conference call for analysts and investors on Friday, August 14, 2026 at 9:00 a.m. $(ET)$. To join the conference call without operator assistance, participants can register at https://registrations.events/easyconnect/8089231/recFsQWT6lAYsra73/ to receive an instant automated call back. Alternatively, they can dial (647) 932-3411 or (800) 715-9871 to reach a live operator who will join them into the call. A live and archived webcast of the call will be accessible via the REIT's website at www.automotivepropertiesreit.ca.
To access a replay of the conference call, dial (647) 362-9199 or (800) 770-2030, passcode: 8089231 #. The replay will be available until August 21, 2026.
About Automotive Properties REIT
Automotive Properties REIT is an unincorporated, open-ended real estate investment trust focused on owning and acquiring primarily income-producing automotive and other OEM dealership and service properties located in Canada and the United States. The REIT's portfolio currently consists of 95 income-producing commercial properties, representing approximately 3.5 million square feet of gross leasable area, in metropolitan markets across British Columbia, Alberta, Saskatchewan, Manitoba, Ontario and Québec in Canada, and California, Florida and Ohio in the United States. Automotive Properties REIT is the only public vehicle in Canada focused on consolidating automotive and OEM dealership and service real estate properties. For more information, please visit: www.automotivepropertiesreit.ca.
This news release contains forward-looking information within the meaning of applicable securities legislation, which reflects the REIT's current expectations regarding future events and in some cases can be identified by such terms as "will" and "expected". Forward-looking information includes the REIT's expectations with respect to completion of the Vaughan Transaction, including the timing thereof and the benefits anticipated to be derived therefrom, the impact of changes in economic conditions, including changes in interest rates, currency fluctuation and the rate of inflation, and the impact of tariffs or other trade restrictions, including the impact of each of the foregoing on the REIT and its tenants. Forward-looking information is based on a number of assumptions and is subject to a number of risks and uncertainties, many of which are beyond the REIT's control that could cause actual results and events to differ materially from those that are disclosed in or implied by such forward-looking information. Such risks and uncertainties include, but are not limited to, the factors discussed under "Risks & Uncertainties, Critical Judgments & Estimates" in the REIT's MD&A for the year ended December 31, 2025 and in the REIT's MD&A for the interim period ended June 30, 2026 and under "Risk Factors" in the REIT's annual information form dated March 4, 2026, which are available on SEDAR+ (www.sedarplus.ca) and the REIT's website (www.automotivepropertiesreit.ca). The REIT does not undertake any obligation to update such forward-looking information, whether as a result of new information, future events or otherwise, except as expressly required by applicable law. This forward-looking information speaks only as of the date of this news release.
Non-IFRS Financial Measures
This news release contains certain financial measures and ratios which are not defined under International Financial Reporting Standards ("IFRS") and may not be comparable to similar measures presented by other real estate investment trusts or enterprises. FFO, AFFO, FFO payout ratio, AFFO payout ratio, NOI, Cash NOI and Same Property Cash NOI are key measures of performance used by the REIT's management and real estate businesses. Debt to GBV, a supplementary financial measure, is a measure of financial position defined by agreements to which the REIT is a party. These measures, as well as any associated "per Unit" amounts, are not defined by IFRS and do not have standardized meanings prescribed by IFRS, and therefore should not be construed as alternatives to net income or cash flow from operating activities calculated in accordance with IFRS. The REIT believes that AFFO is an important measure of economic earnings performance and is indicative of the REIT's ability to pay distributions from earnings, while FFO, NOI, Cash NOI and Same Property Cash NOI are important measures of operating performance of real estate businesses and properties. The IFRS measurement most directly comparable to FFO, AFFO, NOI, Cash NOI and Same Property Cash NOI is net income. For reconciliations of NOI, FFO, AFFO and Cash NOI to net income and comprehensive income, please see the tables below. For further information regarding these non-IFRS measures and supplementary financial measures, please refer to Section 1 "General Information and Cautionary Statements -- Non-IFRS Financial Measures" and Section 6 "Non-IFRS Financial Measures" in the REIT's Q2 2026 MD&A which is incorporated by reference herein and is available on the REIT's website at www.automotivepropertiesreit.ca and on SEDAR+ at www.sedarplus.ca.
Reconciliation of NOI, Cash NOI, FFO and AFFO
Three Months Ended Six Months Ended
June 30, June 30,
($000s, except per Unit 2026 2025 Variance 2026 2025 Variance
amounts)
Calculation of NOI
Property revenue $30,205 $24,601 $5,604 59,301 48,503 $10,798
Property costs (5,060) (3,742) (1,318) (9,956) (7,433) (2,523)
NOI (including
straight--line
adjustments) $25,145 $20,859 $4,286 49,345 41,070 $8,275
Adjustments:
Land lease payments (132) (99) (33) (231) (198) (33)
Straight--line adjustment (253) (125) (128) (524) (219) (305)
Cash NOI $24,760 $20,635 $4,125 48,590 40,653 $7,937
Reconciliation of net
income to FFO and AFFO
Net income $15,471 $13,003 $2,468 39,894 20,698 $19,196
Adjustments:
Change in fair value --
Interest rate swaps 1,274 (1,868) 3,142 (725) 2,860 (3,585)
Distributions on Class B
LP Units 171 - 171 342 - 342
Change in fair value --
Class B LP Units and
Unit-based
compensation(1) 1,588 1,527 61 2,127 764 1,363
Change in fair value --
investment properties (3,143) 219 (3,362) (11,011) 1,256 (12,267)
ROU asset net balance of
depreciation/interest and
lease payments (64) (74) 10 (134) (150) 16
FFO $15,297 $12,807 $2,490 $30,493 $25,428 $5,065
Adjustments:
Straight--line adjustment (253) (125) (128) (524) (219) (305)
Capital expenditure
reserve (124) (104) (20) (244) (204) (40)
AFFO $14,920 $12,578 $2,342 $29,725 $25,005 $4,720
Number of Units
outstanding (including
Class B LP
Units) 55,192,718 49,117,113 6,075,605 55,192,718 49,117,113 6,075,605
Weighted average Units
Outstanding -- basic 55,160,438 49,117,113 6,043,325 55,130,783 49,105,788 6,024,995
Weighted average Units
Outstanding -- diluted 56,711,260 50,496,712 6,214,548 56,650,514 50,414,069 6,236,445
FFO per Unit -- basic(2) $0.277 $0.261 $0.016 $0.553 $0.518 $0.035
FFO per Unit -- diluted(3) $0.270 $0.254 $0.016 $0.538 $0.504 $0.034
AFFO per Unit -- basic(2) $0.270 $0.256 $0.014 $0.539 $0.509 $0.030
AFFO per Unit --
diluted(3) $0.263 $0.249 $0.014 $0.525 $0.496 $0.029
Distributions per Unit(4) $0.206 $0.201 SHY $0.005 $0.411 $0.402 $0.009
FFO payout ratio(4) 76.2 % 79.1 % (2.9 %) 76.4 % 79.8 % (3.4 %)
AFFO payout ratio(4) 78.3 % 80.7 % (2.4 %) 78.3 % 81.0 % (2.7 %)
(1) Unit-based compensation consists of Deferred Units
("DUs"), Income Deferred Units ("IDUs"), Performance
Deferred Units ("PDUs") and Restricted Deferred Units
("RDUs")
(2) FFO and AFFO per Unit -- basic is calculated by dividing
the total FFO and AFFO by the amount of the total
weighted-average number of outstanding REIT Units
and Class B LP Units.
(3) FFO and AFFO per Unit -- diluted is calculated by
dividing the total FFO and AFFO by the amount of the
total weighted-average number of outstanding REIT
Units, Class B LP Units and Unit-based compensation
granted to independent trustees and management of
the REIT.
(4) Distributions per Unit, FFO payout ratio and AFFO
payout ratio exclude the cash portion of a special
distribution that was paid on January 6, 2025 to unitholders
of record as at December 31, 2024.
Same Property Cash Net Operating Income
Three Months Ended Six Months Ended
June 30, June 30,
2026 2025 Variance 2026 2025 Variance
Same property
base rental
revenue $21,192 $20,739 $453 $41,729 $40,862 $867
Land lease
payments (99) (99) - (198) (198) -
Same Property
Cash NOI $21,093 $20,640 $453 $41,531 $40,664 $867
SOURCE Automotive Properties Real Estate Investment Trust
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