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Nexus Industrial REIT reported a 1.1% year-on-year decline in net operating income (NOI) for the third quarter, mainly due to property sales as part of its capital recycling program. The dip was partly offset by a 2.9% increase in industrial same-property NOI, which reached CAD 29.5 million. The REIT completed two new development projects expected to generate CAD 6.6 million in annual stabilized NOI. It now forecasts about 3% same-property NOI growth for 2025, lower than the earlier mid-single-digit estimate, reflecting a cautious outlook amid ongoing portfolio transitions.
Nexus Industrial REIT's third-quarter performance showed steady progress in its industrial portfolio despite a modest decline in overall net operating income. The company recorded CAD 43.30 million in property revenue and a net income of CAD 3.45 million for the quarter. The 1.1% fall in total NOI was mainly linked to the sale of retail, office, and non-core industrial properties under its capital recycling strategy, which focuses on strengthening the company's industrial base. Advertisement
The REIT's industrial segment continued to perform well, with same-property NOI rising by 2.9% to CAD 29.5 million. This growth helped offset part of the negative effect of property dispositions. The company also reported leasing success, having filled a 223,000 sq ft vacant property in London, Ontario, and completed renewals covering another 150,000 sq ft. These actions raised its overall portfolio occupancy to 96%, reinforcing stability within its core industrial assets.
During the quarter, Nexus completed two development projects that are projected to contribute approximately CAD 6.6 million in annual stabilized NOI once fully operational. These projects align with the company's long-term plan to focus primarily on logistics and light industrial assets with steady demand.
Looking ahead, the company expects about 3% growth in same-property NOI for full-year 2025, compared with the previously projected mid-single-digit range. This revision reflects a more measured outlook amid ongoing property transitions and market conditions.
According to analyst estimates, the average rating on Nexus shares remains hold. The coverage includes two strong buy or buy recommendations and six hold ratings, with no sell calls. The average 12-month price target stands at CAD 8.13, about 3.8% higher than the recent closing price of CAD 7.82. The REIT's stock currently trades at 13 times its expected next 12-month earnings, compared with a price-to-earnings ratio of 11 recorded three months ago.
Source Reuters
5th Jun, 2025
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