SmartCentres Real Estate Investment Trust (SRU.UN) Q2 2026 earnings summary

Executive summary

• Q2 2026 delivered 98.1% occupancy, up 0.5% sequentially, with 247,000 sq ft leased and same property NOI growth of 2.6% (4.4% ex anchors); rental lifts of 12% ex anchors on lease extensions.

• 86% of 2026 maturing leases were executed by quarter-end, with strong tenant demand from grocers, pharmacies, dollar stores, and banks.

• Four of six ex-Toys "R" Us locations re-leased at higher rents, with the remaining two expected to commence rent in 2027.

• Toronto and Montreal premium outlets remain nearly fully leased, with Toronto Premium Outlets ranked top three in national sales and expansion (near 100,000 sq ft) to start construction in Q4 2026.

• Nearly 0.25 million sq ft of leases signed in Q2, with strong leasing and tenant quality improvements.

Financial highlights

• FFO per unit was CAD 0.58, unchanged year-over-year; adjusted FFO (excluding non-recurring items) was CAD 0.54, down from CAD 0.55 in Q2 2025.

• Net operating income for Q2 2026 was $139.9 million, down 1.0% year-over-year due to fewer townhome closings, partially offset by higher rental income.

• Net loss and comprehensive loss for Q2 2026 was $147.0 million, mainly due to a $196.2 million fair value loss on investment properties and a $42.4 million loss on financial instruments.

• Distributions maintained at an annualized rate of CAD 1.85 per unit; payout ratio to AFFO was 90.5% for the rolling 12 months and 86.7% for Q2 2026.

• NAV per Unit (diluted) was $35.10 as of June 30, 2026.

Outlook and guidance

• Retail expansion program continues, focusing on major retailers' growth needs; specific project details to be announced in coming months.

• Premium Outlets continue to outperform with 99% occupancy and strong sales; Toronto Premium Outlets expansion remains on track for Q4 2026 construction start.

• Momentum expected to continue into the second half of the year, with ongoing strong leasing and tenant demand.

• Targeting a cadence of three shopping center deliveries or projects under construction annually by 2027.

• Development pipeline includes ongoing construction of a Canadian Tire flagship store and new self-storage facilities in multiple provinces.