Company Announcements

TORONTO--(BUSINESS WIRE)--Jul. 30, 2025-- Primaris Real Estate Investment Trust (“Primaris” or “the Trust”) (TSX: PMZ.UN) announced today financial and operating results for the second quarter ended June 30, 2025.

Quarterly Financial and Operating Results Highlights

• $150.8 million total rental revenue;
• +5.5% Same Properties Cash Net Operating Income** ("Cash NOI") growth;
• +5.7% Same Properties shopping centres Cash NOI** growth;
• 90.5% committed occupancy, 88.8% in-place occupancy, and 84.8% long-term in-place occupancy;
• +6.7% weighted average spread on renewing rents* across 407,000 square feet;
• +5.5% Funds from Operations** ("FFO") per average diluted unit growth to $0.445;
• 52.6% FFO Payout Ratio**;
• $50.4 million in net income;
• $5.0 billion total assets;
• 5.8x Average Net Debt** to Adjusted EBITDA**;
• $584.0 million in liquidity*;
• $4.4 billion in unencumbered assets; and
• $21.43 Net Asset Value** ("NAV") per unit outstanding.

Business Update Highlights

• Increased guidance for 2025 Cash NOI** and FFO** per unit to $340 to $345 million and $1.74 to $1.79 per unit fully diluted , respectively;
• Acquired Lime Ridge Mall in Hamilton, Ontario for total consideration of $416 million, adding 791 thousand square feet to the portfolio;
• Sold Lansdowne Industrial, an industrial centre in Peterborough, Ontario for $9.9 million;
• Published its inaugural Green Finance Framework, under which it may issue green bonds, green loans or other related financial instruments;
• Issued $200 million aggregate principal amount of senior unsecured debentures maturing June 25, 2033 at a fixed annual interest rate of 4.835% for the financing of eligible green projects as described in the Trust’s June 2025 Green Finance Framework; and
• Purchased for cancellation 2,664,000 Trust Units under the Trust's NCIB program at an average price per unit of approximately $14.98, representing a discount to NAV** per unit of approximately 30.1%.

"Our shopping centre portfolio continues to perform very well with NOI growth coming from strong rental revenue growth and percentage rent, and rising cost recoveries," said Patrick Sullivan, President and Chief Operating Officer. "Leasing momentum remains robust with strong tenant demand across our portfolio, including demand for our HBC boxes. We are in advanced discussions with strong covenant, high-quality national retailers, including large format tenants."

“With the acquisition of Lime Ridge Mall, Primaris has acquired approximately $1 billion of market leading enclosed shopping centres in 2025, driving our portfolio quality significantly higher with same store sales productivity totaling $784 per square foot," said Alex Avery, Chief Executive Officer. "Disciplined capital allocation remains a core focus, and we demonstrated its benefits through asset capital recycling and NCIB activity, driving strong financial and operating results, while also delivering transformative changes to our portfolio."

2025 Financial Outlook

Disciplined capital allocation is a key pillar to Primaris' strategy. To this end, Primaris established certain targets for managing the Trust's financial condition and maintaining a conservative capital structure (see Section 3, "Business Overview and Strategy" of the management's discussion and analysis for the three and six months ended June 30, 2025 (the "MD&A")).

Guidance: Primaris provided guidance for the full year of 2025 in the management's discussion and analysis for the three months and years ended December 31, 2024 and 2023 (the "Annual MD&A"). This guidance was subsequently reaffirmed in the 2025 first quarter management's discussion and analysis, except for occupancy. The most recently previously published guidance for 2025 is reproduced below and has been updated to reflect management's current expectations based on the most recent information available to management.

On September 24, 2024, Primaris released a set of targets for the period ending December 31, 2027. These targets are not guidance, but are an outlook based on the execution of Primaris' strategic pillars.

See Section 2, "Forward-Looking Statements and Financial Outlook" of the MD&A for a description of the material factors, assumptions, risks and uncertainties that could impact the financial outlook statements.

Select Financial and Operational Metrics

Select Financial and Operational Metrics (continued)

Operating Results

Operating Results (continued)

FFO** for the three months ended June 30, 2025 was $0.023 per unit, or 5.5%, higher than the same period of the prior year. The increase was driven by growth in NOI** from Same Properties of $0.017 per unit and NOI** attributable to Acquisitions of $0.176 per unit. NOI** for the three months ended June 30, 2025 included a $2.5 million contribution from the recovery of property taxes from prior years (2024 - nil). Excluding this amount, FFO** per unit would have been $0.434, 2.8% higher than the same period of the prior year.

Same Properties Cash NOI** for the three month ended June 30, 2025 was $3.3 million, or 5.5%, higher than the same period of the prior year. Same Properties shopping centres Cash NOI** increased $3.2 million, or 5.7%, over the same period of the prior year. The increase in Same Properties shopping centres' Cash NOI** was primarily driven by higher revenues from base rent and net operating cost recoveries, partially offset by declines in percentage rent in lieu of base rent.

Excluding the recovery of property taxes from prior years and the change in bad debt expense, the Same Properties shopping centres Cash NOI** growth would have been 4.0%.

Redevelopment projects contributed $1.4 million of incremental rent to the portfolio during the quarter (see Section 7.4, "Redevelopment and Development" of the MD&A).

The table below illustrates the composition of AFFO** and the drivers of the change for the three months ended June 30, 2025 as compared to the same period in 2024.

Occupancy and Leasing Results

Primaris’ leasing activities are focused on driving value by actively managing the tenant and merchandising mix at its investment properties. In-place occupancy decreased 4.2% from June 30, 2024 to 88.8% at June 30, 2025. The decreases were primarily due the impact of the five disclaimed HBC locations. In addition, Lime Ridge Mall was acquired with in-place occupancy of only 78.4%.

In the quarter, Primaris completed 191 leasing deals totaling 0.6 million square feet. The weighted average spread on renewing rents* (for the 122 leases renewed in the quarter) was 6.7% (6.7% for commercial retail unit renewals and 6.5% for large format renewals).

Robust Liquidity and Differentiated Financial Model

"Primaris has achieved its acquisition target of acquiring over $1 billion in assets, while maintaining industry leading leverage metrics,' said Rags Davloor, Chief Financial Officer. "With unencumbered assets of $4.4 billion and no debt maturing until 2027, we have reduced refinancing risk, with significant access to liquidity. Our commitment to maintaining an extremely well capitalized balance sheet positions Primaris very well to capitalize on future opportunities."

The following table summarizes key metrics relating to Primaris' unencumbered assets and unsecured debt.

Liquidity* at quarter end was $584.0 million, or 28% of Total Debt**.

Primaris' NAV** per unit outstanding at quarter end was $21.43.

Subsequent Events

Primaris completed the disposition of three strip plazas in Medicine Hat, Alberta for proceeds of $12.7 million before transaction costs and the disposition of Northpointe Town Centre, an open air plaza in Calgary, Alberta, for proceeds of $54.5 million before transaction costs to bring the total proceeds from dispositions in fiscal 2025 to $246.1 million before transaction costs.

Purchased additional 72,500 Trust Units under its automatic share purchase plan for consideration of $1.1 million as of July 30, 2025, for total NCIB activity since inception of the Trust of 14,271,109 Units repurchased at an average price of $14.26, or a discount to NAV** per unit of approximately 33.5%.

Conference Call and Webcast:

The call will be accessible for replay until August 7, 2025, by dialing 1-866-813-9403 with access code 962368, or on the Investor Relations section of the website.

About Primaris Real Estate Investment Trust

Primaris is Canada’s only enclosed shopping centre focused REIT, with ownership interests in leading enclosed shopping centres located in growing Canadian markets. The current portfolio totals 14.8 million square feet, valued at approximately $4.9 billion at Primaris’ share. Economies of scale are achieved through its fully internal, vertically integrated, full-service national management platform. Primaris is very well-capitalized and is exceptionally well positioned to take advantage of market opportunities at an extraordinary moment in the evolution of the Canadian retail property landscape.

Forward-Looking Statements and Financial Outlook

Certain statements included in this news release constitute ‘‘forward-looking information’’ or “forward-looking statements” within the meaning of applicable securities laws. The words “will”, “expects”, “plans”, "estimates", “intends” and similar expressions are often intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. Specific forward-looking statements made or implied in this news release include but are not limited to statements regarding: growth opportunities, estimated annual growth of Same Properties Cash NOI**, expected future distributions, expected benefits from the Trust's normal course issuer bid activity, future acquisition and disposition activity, the Trust’s targets for managing its financial condition and the financing of eligible green projects. Forward-looking statements are provided for the purpose of presenting information about management’s current expectations and plans relating to the future and readers are cautioned that such statements may not be appropriate for other purposes. These statements are not guarantees of future performance and are based on estimates and assumptions that are inherently subject to risks and uncertainties. Primaris cautions that although it is believed that the assumptions are reasonable in the circumstances, actual results, performance or achievements of Primaris may differ materially from the expectations set out in the forward-looking statements. Material risk factors and assumptions include those set out in the Annual MD&A, as updated by the MD&A, which are each available on SEDAR+, and in Primaris’ other materials filed with the Canadian securities regulatory authorities from time to time. Given these risks, undue reliance should not be placed on these forward-looking statements, which apply only as of their dates.

Certain forward-looking information included in this news release may also be considered “financial outlook” for purposes of applicable securities law, including statements under the heading "2025 Financial Outlook". Financial outlook about the Trust’s prospective results of operations including, without limitation, anticipated FFO** per unit, anticipated Cash NOI** and Same Properties Cash NOI** growth, impact on rental revenue of contractual rent-steps, anticipated general and administrative expenses, anticipated operating capital expenditures, anticipated redevelopment capital expenditures, anticipated straight-line rent adjustment to revenue, anticipated occupancy, and the Trust's December 2027 targets for a number of key metrics, including in-place occupancy, annual Same Properties Cash NOI** growth, acquisition and disposition activity, annual FFO** per unit growth and annual distribution growth, is subject to the same assumptions, risk factors, limitations and qualifications as set forth in the Annual MD&A, as updated by the MD&A, and the Trust's annual information form. The Trust and management believe that such financial outlook has been prepared on a reasonable basis, reflecting management’s best estimates and judgments. However, this information is subjective and subject to numerous risks. Financial outlook contained in this news release was provided for the purpose of providing further information about the Trust’s prospective financial performance and readers are cautioned that it should not be used for other purposes.

Readers are also urged to examine the Trust’s materials filed with the Canadian securities regulatory authorities from time to time as they may contain discussions on risks and uncertainties which could cause the actual results and performance of Primaris to differ materially from the forward-looking statements and financial outlook contained in this news release. All forward-looking statements and financial outlook in this news release are qualified by these cautionary statements. These forward-looking statements and financial outlook are made as of July 30, 2025 ,and Primaris, except as required by applicable securities laws, assumes no obligation to update or revise them to reflect new information or the occurrence of future events or circumstances.

Non-GAAP Measures

Information in this news release is a select summary of results. This news release should be read in conjunction with the MD&A and the Trust's unaudited interim consolidated financial statements and the accompanying notes for the three and six months ended June 30, 2025 and 2024 (the “Financial Statements”).

The Financial Statements are prepared in accordance with IFRS accounting standards as issued by the IASB, however, in this news release, Primaris also uses a number of measures which do not have a standardized meaning prescribed under generally accepted accounting principles (“GAAP”) in accordance with IFRS. These non-GAAP measures, which are denoted in this news release by the suffix “**”, include non-GAAP financial measures and non-GAAP ratios, each as defined in National Instrument 52-112, Non-GAAP and Other Financial Measures Disclosure ("NI 52-112"). None of these non-GAAP measures should be construed as an alternative to financial measures calculated in accordance with GAAP. Furthermore, these non-GAAP measures may not be comparable to similar measures presented by other real estate entities and should not be construed as an alternative to financial measures determined in accordance with IFRS. A definition of each non-GAAP measure used herein and an explanation of management's reasons as to why it believes the measure is useful to investors can be found in the section entitled “Non-GAAP Measures” of the MD&A, which section is incorporated by reference into this news release, and a reconciliation to the most directly comparable financial measure in the Financial Statements, in each case, can be found below. The MD&A is available on the Trust’s profile on SEDAR+ at www.sedarplus.ca.

Use of Operating Metrics

Primaris uses certain operating metrics to monitor and measure the operational performance of its portfolio. Operating metrics in this news release include, among others, weighted average net rent per occupied square foot, weighted average spread on renewing rents, liquidity and same stores sales productivity. These operating metrics, which may constitute supplementary financial measures as defined in NI 52-112, are not derived from directly comparable measures contained in the Financial Statements but may be used by management and disclosed on a periodic basis to depict the historical or future expected operating performance of the Trust's portfolio. For an explanation of the composition of weighted average net rent per occupied square foot, see Section 8.2, "Weighted Average Net Rent" of the MD&A. For an explanation of weighted average spread on renewing rents, see Section 8.3, "Leasing Activity" of the MD&A. For an explanation of liquidity, see Section 10.2, "Liquidity and Unencumbered Assets" of the MD&A. For an explanation of the composition of same store sales productivity, see Section 8.4, "Tenant Sales" of the MD&A. These supplementary financial measure are denoted in this news release by the suffix “*”

Primaris also uses certain non-financial operating metrics to describe its portfolio and portfolio operation performance. Non-financial operating metrics in this news release include, among others, number of investment properties, store count, GLA, in-place occupancy, committed occupancy, long-term in-place occupancy, and weighted average lease term. For the relationship of in-place occupancy to committed occupancy and to long-term in-place occupancy, see Section 8.1, "Occupancy" of the MD&A. For greater certainty, the portfolio operating metrics in the MD&A include only the Trust's proportionate ownership of the 8 properties held in co-ownerships (see Section 7.2, "Co-ownership Arrangements" of the MD&A).

Reconciliations of Non-GAAP Measures

The following table reconciles NOI** and Cash NOI** to rental revenue and property operating costs as presented in the Financial Statements.

The following tables are a further analysis of Cash NOI** above.

The following table illustrates the reconciliation of net income, as determined in accordance with GAAP, to FFO**.

The following table illustrates the reconciliation of FFO** to AFFO**.

The following table illustrates the calculation of NAV** per unit outstanding and Total Debt** to Total Assets**.

The following table illustrates the calculation of Average Net Debt** to Adjusted EBITDA**, Interest Coverage** and Debt Service Coverage** ratios. The below ratios are calculated on a rolling four-quarters basis.

The following table illustrates the reconciliation of net income (loss) to Adjusted EBITDA** for the three months ending June 30, 2025 and 2024.

The following tables illustrate Adjusted EBITDA** for the rolling four-quarters ended June 30, 2025 and 2024.

The following tables illustrate Average Net Debt** for the periods ended June 30, 2025 and 2024 based on the average of the Net Debt** at the beginning of the period and each quarter end during the period included in the calculation of Adjusted EBITDA**.

The following tables illustrate interest expense, for the calculation of the Interest Coverage** and Debt Service Coverage** ratios, for rolling-four quarters ended June 30, 2025 and 2024.

The following tables illustrate principal repayments, for the calculation of the Debt Service Coverage** ratio, for the rolling four-quarters ended June 30, 2025 and 2024.

View source version on businesswire.com: https://www.businesswire.com/news/home/20250730848146/en/

Alex Avery
Chief Executive Officer
416-642-7837
aavery@primarisreit.com

Rags Davloor
Chief Financial Officer
416-645-3716
rdavloor@primarisreit.com

Claire Mahaney
VP, Investor Relations & ESG
647-949-3093
cmahaney@primarisreit.com

Timothy Pire
Chair of the Board
chair@primarisreit.com

Source: Primaris Real Estate Investment Trust