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Plaza Retail REIT

Plaza Retail REIT Announces 2025 Results

FREDERICTON, NB , March 2, 2026 /CNW/ - Plaza Retail REIT (TSX: PLZ.UN) ("Plaza" or the "REIT") today announced its financial results for the quarter and year ended December 31, 2025.

"2025 marked an important transition year for Plaza with a strong focus on our optimization and intensification strategies, coupled with steady operating fundamentals and a portfolio positioned around non-discretionary retail," said Jason Parravano, President and Chief Executive Officer. "Total FFO increased to $44.0 million or $0.395 per unit compared to $40.5 million or $0.363 per unit in 2024, an 8.8% year-over-year improvement, reflecting contributions from same-asset performance, acquisitions completed over the past year, lower administrative expenses due to $2.7 million in reorganization costs in 2024, and the continued execution of our value-creation pipeline, which included various optimization and intensification initiatives.  Excluding $123 thousand of reorganization costs, $425 thousand related to a change in bonus accrual timing and $544 thousand of bad debt related to the insolvency of Toys R Us, and excluding 2024 reorganization costs of $2.7 million, 2025 FFO would have been up 4.5% over 2024."  

"From an operations standpoint, the portfolio continued to demonstrate resilience. Demand for our space remained healthy, with committed occupancy of 97.6% and leasing spreads at 13.4% based on the average rate over the term. Same-asset NOI grew by 1.7% for the year despite a handful of tenant disruptions that resulted in bad debt adjustments, most notably from the insolvency of Toys R Us. Our exposure is limited to one location, and we are actively working on a plan to reposition the asset. Excluding the bad debt related to Toys R Us, same asset NOI would have increased by 2.5%. This outcome speaks to both the quality of our locations and the strength of our leasing execution."

"In addition to our strong operating fundamentals, over the course of 2025, our intensification, development, and consolidation initiatives added approximately $3.0 million of incremental NOI, reinforcing our strategy of extracting embedded value from the existing portfolio while maintaining financial discipline. Total NOI for the year was $77.0 million, representing growth of 2.7% compared to 2024."

"We also made meaningful progress advancing projects that will increasingly benefit results in 2026 and beyond. During the year, we handed over multiple spaces to Loblaws and other key tenants for fit-ups and construction across select properties. As these openings stabilize and additional initiatives progress, we expect the impact to become more visible through 2026. At the same time, our optimization work continues to support FFO growth and long-term value creation, even if it can create timing-related noise in AFFO comparisons."

Summary of Selected IFRS Financial Results

(CAD$000s, except percentages)

Three

Months

Ended

December 31, 2025

Three

Months

Ended

December 31, 2024

$

Change

%

Change

Twelve Months

 Ended

December 31, 2025

Twelve

 Months Ended

December 31, 2024

$  Change

% Change










Revenues

$31,800

$30,623

$1,177

3.8 %

$126,434

$121,280

$5,154

4.3 %










Net operating income (NOI)(1)

$19,120

$18,926

$194

1.0 %

$77,034

$75,019

$2,015

2.7 %










Net change in fair value of investment properties

$13,975

$1,847

$12,128

-

$14,468

($10,377)

$24,845

-










Profit and total comprehensive income

$25,088

$8,473

$16,615

-

$55,886

$25,485

$30,401

-

(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 December 31, 2025 for more information on each non-GAAP financial measure.

Quarterly Highlights

  • NOI was $19.1 million, up $194 thousand or 1.0% from the same period in 2024. 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. NOI was also impacted by bad debt of $337 thousand in the current period.
  • Profit and total comprehensive income for the current quarter was $25.1 million compared to $8.5 million in the same period in the prior year. Profit and total comprehensive income was primarily impacted by the change in fair value of investment properties, with a $14.0 million increase recorded in the current quarter compared to a $1.8 million increase recorded in the same quarter in the prior year. The fair value change year over year was mainly due to a decrease in capitalization rates, increased stabilized NOI as well as new appraisals. Profit and comprehensive income was also impacted by changes in non-cash fair value adjustments relating to derivative assets and liabilities, which accounted for $709 thousand of the increase compared to the same quarter in the prior year, the non-cash fair value adjustments for Class B exchangeable LP units, and convertible debentures.

Year-To-Date Highlights

  • NOI was $77.0 million, up $2.0 million or 2.7% from the same period in 2024. 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, particularly snow removal costs, roof and asphalt repairs and maintenance in 2025. NOI was also impacted by $770 thousand of bad debt.
  • Profit and total comprehensive income for the current period was $55.9 million compared to $25.5 million in the same period in the prior year. Profit and total comprehensive income was primarily impacted by the change in fair value of investment properties, with a $14.5 million increase recorded in the current period compared to a $10.4 million decrease recorded in the prior year. The fair value change year over year was mainly due to decreased capitalization rates, increased stabilized NOI, new appraisals, as well as the acquisition of the remaining interest in three Ontario assets. Profit and total comprehensive income was also impacted by an increase in the share of profit of associates of $1.2 million over the prior year, mainly relating to increased earnings, as well as an increase in non-cash fair value adjustment of the underlying properties in the current year. Profit and total comprehensive income were also impacted by changes in non-cash fair value adjustments relating to derivative assets and liabilities, the Class B exchangeable LP units, and convertible debentures.

Summary of Selected Non-IFRS Financial Results

(CAD$000s, except percentages, units repurchased and per unit amounts)

Three

Months

Ended

December 31, 2025

Three

Months

Ended

December 31, 2024

$ Change

% Change

Twelve Months

 Ended

December 31, 2025

Twelve  Months

 Ended

December 31, 2024

$ Change

% Change










FFO(1)

$10,701

$8,514

$2,187

25.7 %

$44,032

$40,462

$3,570

8.8 %

FFO per unit(1)

$0.096

$0.076

$0.020

26.3 %

$0.395

$0.363

$0.032

8.8 %

FFO payout ratio(1)

73.0 %

91.7 %

n/a

(20.4 %)

71.0 %

77.2 %

n/a

(8.0 %)










AFFO(1)

$9,107

$5,992

$3,115

52.0 %

$33,485

$31,865

$1,620

5.1 %

AFFO per unit(1)

$0.082

$0.054

$0.028

51.9 %

$0.300

$0.286

$0.014

4.9 %

AFFO payout ratio(1)

85.8 %

130.3 %

n/a

(34.2 %)

93.3 %

98.0 %

n/a

(4.8 %)










Same-asset NOI(1)

$18,408

$18,213

$195

1.1 %

$73,922

$72,659

$1,263

1.7 %










Normal course issuer bid – units repurchased

-

-

n/a

n/a

-

4,920

n/a

n/a










Committed occupancy – including non-consolidated investments(2)





97.6 %

97.6 %

n/a

-

Same-asset committed occupancy(3)





97.1 %

97.0 %

n/a

0.1 %










(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 December 31, 2025 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 December 31, 2025, FFO increased $2.2 million or 25.7% on a dollar basis and 26.3% 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 a decrease in administrative costs, due to $2.7 million in reorganization costs in the prior year. AFFO increased $3.1 million or 52.0% on a dollar and per unit basis, compared to the same quarter in the prior year. AFFO was impacted by the changes in FFO noted above, lower leasing costs, and higher maintenance capital expenditures in the current period.
  • Same-asset NOI increased by $195 thousand or 1.1% due to an increase in revenue from rent escalations and renewals, partially offset by higher operating expenses during the current period. Same asset NOI was also impacted by $337 thousand of bad debt in the current quarter.

Year-To-Date Highlights

  • FFO & AFFO: For the twelve months ended December 31, 2025, FFO increased $3.6 million or 8.8% on a dollar and per unit basis, compared with the same period 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, with the capital generated from those sales having been recently deployed. In addition, FFO was impacted by a decrease in administrative costs, due to $2.7 million in reorganization costs in the prior year. AFFO increased $1.6 million or 5.1% on a dollar basis and 4.9% on a per unit basis, compared to the same period in the prior year. AFFO was impacted by the changes in FFO noted above, as well as higher leasing costs in the current year related to optimizations at existing properties, supporting increased revenues and higher maintenance capital expenditures.
  • Same-asset NOI increased by $1.3 million or 1.7% due to an increase in revenue from rent escalations and renewals, partially offset by higher operating expenses in the current period due to higher snow removal costs in the first quarter of 2025, and roof and asphalt repairs and maintenance in 2025. Same asset NOI was also impacted by $770 thousand of bad debt.

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 December 31, 2025, 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 the three and twelve months ended December 31, 2025, compared to the three and twelve months ended December 31, 2024 is presented below:

(000s – except per unit amounts and percentage data, unaudited)

3 Months
Ended
December
31, 2025

3 Months
Ended
December
31, 2024

Change
over
Prior
Period

12 Months
Ended
 December
31, 2025

12 Months
Ended
December
31, 2024

Change
over
Prior
Period

Profit and total comprehensive income for the period attributable to unitholders

$  24,617

$   8,183


$   55,285

$   25,045


Incremental leasing costs included in administrative expenses(7)

408

353


1,819

1,601


Amortization of debenture issuance costs(8)

(18)

(19)


(73)

(73)


Distributions on Class B exchangeable LP units included in finance costs – operations

81

81


324

324


Deferred income taxes

437

1,655


510

1,752


Right-of-use land lease principal repayments

(215)

(207)


(862)

(818)


Fair value adjustment to restricted and deferred units

88

(213)


471

(79)


Fair value adjustment to investment properties

(13,975)

(1,847)


(14,468)

10,377


Fair value adjustment to investments(9)

(604)

(348)


(1,803)

(1,748)


Fair value adjustment to Class B exchangeable LP units

139

(405)


867

(162)


Fair value adjustment to convertible debentures

88

-


417

279


Fair value adjustment to derivative assets and liabilities

(931)

(222)


345

1,515


Fair value adjustment to right-of-use land lease assets

215

207


862

818


Impairment of notes receivable – fair value component

-

976


-

976


Equity accounting adjustment(10)

(39)

70


(34)

440


Non-controlling interest adjustment(6)

410

250


372

215


FFO(1)

$  10,701

$   8,514

$    2,187

$  44,032

$  40,462

$    3,570

FFO change over prior period - %



25.7 %



8.8 %








FFO(1)

$  10,701

$   8,514


$  44,032

$  40,462


Non-cash revenue – straight-line rent(5)

(68)

(137)


(275)

(524)


Leasing costs – existing properties(2) (5) (11)

(598)

(1,624)


(6,433)

(5,576)


Maintenance capital expenditures – existing properties(12)

(949)

(812)


(3,946)

(2,590)


Non-controlling interest adjustment(6)

21

51


107

93


AFFO(1)

$    9,107

$   5,992

$  3,115

$  33,485

$  31,865

$   1,620

AFFO change over prior period - %



52.0 %



5.1 %








Weighted average trust units outstanding – basic(1)(3)

111,592

111,555


111,584

111,535


FFO per unit – basic(1)

$    0.096

$   0.076

26.3 %

$    0.395

$   0.363

8.8 %

AFFO per unit – basic(1)

$    0.082

$   0.054

51.9 %

$    0.300

$   0.286

4.9 %








Gross distribution to unitholders(4)

$    7,810

$  7,809


$  31,239

$ 31,226


FFO payout ratio – basic(1)

73.0 %

91.7 %


71.0 %

77.2 %


AFFO payout ratio – basic(1)

85.8 %

130.3 %


93.3 %

98.0 %









FFO(1)

$  10,701

$   8,514


$  44,032

$  40,462


Interest on dilutive convertible debentures

180

180


715

715


FFO – diluted(1)

$  10,881

$   8,694

$   2,187

$  44,747

$  41,177

$   3,570

Diluted weighted average trust units outstanding(1)(3)

114,122

114,086


114,114

114,065









AFFO(1)

$    9,107

$   5,992


$  33,485

$  31,865


Interest on dilutive convertible debentures

180

-


715

715


AFFO – diluted(1)

$    9,287

$   5,992

$  3,295

$  34,200

$  32,580

$   1,620

Diluted weighted average trust units outstanding(1)(3)

114,122

111,555


114,114

114,065









FFO per unit – diluted(1)

$    0.095

$   0.076

25.0 %

$    0.392

$   0.361

8.6 %

AFFO per unit – diluted(1)

$    0.081

$   0.054

50.0 %

$    0.300

$   0.286

4.9 %

(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 ending December 31, 2025 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 $471 thousand and $601 thousand for the three and twelve months ending December 31, 2025 (December 31, 2024 - $290 thousand and $440 thousand, respectively) 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 29 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 29 of the MD&A.

Net Property Operating Income (NOI) and Same-Asset Net Property Operating Income (Same-Asset NOI)

(000s)

3 Months

Ended

December 31, 2025

(unaudited)

3 Months

Ended

December 31, 2024

(unaudited) 

12 Months

Ended

December 31, 2025

(unaudited)        

12 Months

Ended

December 31, 2024

(unaudited)

Same-asset NOI(1)

$     18,408

$     18,213

$    73,922

$     72,659

Acquisitions, intensifications, developments and redevelopments transferred to IPP in 2024 & 2025 ($6.1 million annual stabilized NOI)

1,500

816

5,482

2,368

NOI from properties currently under development and redevelopment ($613 thousand annual stabilized NOI)

-

40

-

131

Straight-line rent

83

137

275

524

Administrative expenses charged to NOI

(876)

(888)

(4,094)

(3,850)

Lease termination revenue

(67)

29

321

231

Properties disposed

74

622

1,252

2,878

Other

(2)

(43)

(124)

78

Total NOI(1)

$     19,120

$     18,926

$     77,034

$     75,019

Percentage increase over prior period

1.0 %


2.7 %








(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, condition and the environment in which it operates, including with respect to Plaza's outlook or expectations regarding its ongoing and future operating performance optimization and intensification activities, and other projects.  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, 2024 and Management's Discussion and Analysis for the three and twelve months ended December 31, 2025 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 March 3, 2026, at 10:00 a.m. EST. 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 March 5, 2026.  To access the replay, dial 1-289-819-1450 (local Toronto) or 1-888-660-6345 (Passcode: 06428#). 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 December 31, 2025, includes interests in 191 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