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SmartCentres REIT reported a slight fall in Q3 net rental income to CAD 141.3 million, affected by lower residential sales, with FFO per unit decreasing to CAD 0.59 from CAD 0.71 last year. Despite this, strong lease renewals drove 8.4% rental growth excluding anchors, and occupancy remained high at 98.6%. The company is expanding its portfolio with residential projects and two self-storage facilities in Quebec expected to open in 2026. Analysts maintain a cautious stance, while the REIT anticipates continued rental growth for the rest of 2025.
SmartCentres Real Estate Investment Trust reported a small decline in net rental income for the third quarter, totaling CAD 141.3 million, down 0.5% year-on-year, mainly due to weaker residential sales. Funds from operations (FFO) per unit also fell to CAD 0.59, compared with CAD 0.71 in the same period last year, reflecting the impact of the softer residential segment. Advertisement
The company noted strong lease renewal performance, achieving rental growth of 8.4% when anchor tenants are excluded. Occupancy rates remained high, with in-place and committed occupancy steady at 98.6%, showing continued tenant stability across its properties.
SmartCentres is expanding its development pipeline, adding new residential projects and two self-storage facilities in Quebec, expected to open in 2026. The REIT expects rental growth to continue for the remainder of 2025.
Analyst coverage shows a cautious stance, with an average rating of hold. Of the eight analysts covering the stock, three recommend buy or strong buy, four recommend hold, and one suggests sell or strong sell. Wall Street's median 12-month price target is CAD 27.50, slightly above the recent closing price of CAD 26.78. The stock recently traded at 14 times the next 12-month earnings, compared with a P/E of 15 three months ago, reflecting a slight compression in valuation.
Source Reuters
5th Jun, 2025
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