TORONTO--(BUSINESS WIRE)--

Primaris Real Estate Investment Trust (“Primaris” or “the Trust”) (TSX: PMZ.UN) announced today financial and operating results for the fourth quarter and year ended December 31, 2024.

Quarterly Financial and Operating Results Highlights

• $143.2 million total rental revenue;
• +9.1% Same Properties Cash Net Operating Income** ("Cash NOI**") growth;
• +9.5% Same Properties shopping centres Cash NOI** growth;
• 95.6% committed occupancy, 94.5% in-place occupancy, and 90.4% long-term occupancy;
• +5.3% weighted average spread on renewing rents across 446,000 square feet;
• +14.5% Funds from Operations** ("FFO**") per average diluted unit growth to $0.460;
• 48.9% FFO Payout Ratio**;
• $4.3 billion total assets;
• 5.8x Average Net Debt** to Adjusted EBITDA**;
• $589.8 million in liquidity;
• $3.6 billion in unencumbered assets; and
• $21.55 Net Asset Value** ("NAV**") per unit outstanding.

Annual Financial and Operating Results Highlights

• +4.5% Same Properties Cash NOI** growth;
• +4.8% weighted average spread on renewing rents across 1,246,000 square feet;
• $705 same stores sales productivity;
• +6.5% FFO** per average diluted unit growth to $1.690; and
• 52.4% FFO Payout Ratio**.

"Our shopping centre portfolio performed very well in 2024, with NOI growth coming from strong rental revenue growth, rising occupancy, and falling non-recoverable expenses," said Patrick Sullivan, President and Chief Operating Officer. "Over the last four months, Primaris has acquired approximately $910 million of dominant enclosed shopping centres, and our team is doing an excellent job integrating these assets into our national, full-service platform. Primaris is very quickly moving towards our ambition of becoming the first call for retailers looking to grow and expand their footprint in Canada."

Chief Financial Officer, Rags Davloor added, "Primaris' low leverage balance sheet, a key pillar to our strategy, is a critical enabler to our acquisition strategy. We are well on our way to achieving our three year target of acquiring over $1 billion in assets, while maintaining industry leading leverage metrics. With unencumbered assets of $3.6 billion and no unfunded 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 as a highly credible transaction counterparty, at a time when many other groups are finding access to capital, and particularly financing, challenging."

"We are very pleased with our 2024 results, driven by outperformance in same property NOI growth, and FFO per unit growth," said Alex Avery, Chief Executive Officer. "With the acquisition of Oshawa Centre and a 50% interest in Southgate Centre, we are increasing our relevance with retailers and building on Primaris’ profile as an attractive buyer of large, high-quality assets. Consistent with prior acquisitions, these additions to our portfolio are designed to deliver higher internal growth, driving NAV per unit growth, FFO per unit growth and ultimately distribution per unit growth. As we look forward to 2025 and beyond, we see a long runway of opportunity embedded within our existing portfolio, and a variety of acquisition opportunities that can enhance our value proposition with retailers, and our total return to unitholders. We are well positioned to capitalize on these opportunities with the right team and platform, and the right financial model for the road ahead."

Business Update Highlights

• On October 1, 2024 acquired Les Galeries de la Capitale in Quebec City, Quebec;
• In December 2024, Primaris exercised the option to extend the maturity of its $600 million unsecured syndicated revolving credit facility by one-year to January 4, 2028;
• On December 13, 2024, Primaris sold Edinburgh Market Place, in Guelph, Ontario, an open air, grocery anchored property for cash consideration of $11.4 million and the assumption of $20.1 million mortgage;
• On January 31, 2025, acquired a 50% co-ownership interest in Southgate Centre in Edmonton, Alberta and a 100% interest in Oshawa Centre in Oshawa, Ontario for total consideration of $585.0 million;
• Waived conditions on the disposal of Sherwood Park Mall, Sherwood Park Professional Centre and a parcel of excess land for cash proceeds of $107.0 million, which is expected to closed February 28, 2025 subject to customary closing conditions;
• Entered into new secured debt on Place d'Orleans in Orleans, Ontario replacing the debt that matured in August 2024;
• Reported total NCIB activity since inception of 10,149,300 Trust Units repurchased at an average price of $13.91, or a discount to NAV** per unit of approximately 35.5%; and
• Published second annual ESG report.

Guidance: Disciplined capital allocation is a key pillar to Primaris' strategy. To this end, Primaris established targets for managing the Trust's financial condition (see Section 3, "Business Overview and Strategy" in the MD&A). In addition to its established targets, Primaris provided guidance for the full year of 2025 as follows:

On September 24, 2024, Primaris released 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.

Readers are cautioned that there is a significant risk that actual results for the year ending December 31, 2025 and the performance against the December 2027 targets will vary from the financial outlook statements provided in this news release and that such variations may be material. See Section 2, "Forward-Looking Statements and Financial Outlook" for further cautions on material factors, assumptions, risks and uncertainties that could impact the financial outlook statements.

Select Financial and Operational Metrics

Operating Results

The below table compares the composition of FFO** and AFFO** and calculates the drivers of the changes for the three months ended December 31, 2024 as compared to the same period in 2023.

FFO** for the three months ended December 31, 2024 was $0.058 per unit, or 14.5%, higher than the same period of the prior year. NOI** from Same Properties increased $0.054 per unit and NOI** from Acquisitions increased $0.123 per unit.

In the fourth quarter of 2023, Primaris incurred a charge of $2.1 million, or $0.021 per unit, for the impairment of a right of use asset as a result of subletting a portion of its excess head office space. The sublease was effective November 1, 2023 for a term of 12 years.

Same Properties Cash NOI** for the three month ended December 31, 2024 was $4.9 million, or 9.1%, higher than the same period of the prior year. Cash NOI** from Same Properties shopping centres increased $4.9 million, or 9.5%, over the same period of the prior year. The increase in the Same Properties shopping centres' Cash NOI** was primarily driven by higher revenues from base rent and net operating cost recoveries, partially offset by a decline in percentage rent in lieu of base rent. Long-term leases typically include contractual rents steps. In 2024, the Same Property shopping centres earned incremental base rent of $0.5 million from these contractual increases.

In 2024 revenue from recovery of prior years' property taxes was $2.1 million lower contribution than 2023. Bad debt expense for the Same Properties in the current period was $0.8 million compared to $0.5 million in the same period of the prior year. Excluding the contribution from the recovery of property taxes from prior years and the change in bad debt expense, the Cash NOI** growth for only the Same Properties shopping centres would have been 5.8% for the year ended December 31, 2024

Completed redevelopment projects contributed $2.5 million, during the year, incremental rent to the portfolio (see Section 7.4, "Redevelopment and Development" of the MD&A).

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 increased 2.1% from December 31, 2023 to 94.5% at December 31, 2024. Fourth quarter occupancy is typically higher due to seasonal tenants.

In the quarter, Primaris completed 137 leasing deals totaling 0.6 million square feet. The weighted average spread on renewing rents (for the 87 leases renewed in the quarter) was 5.3% (5.8% for commercial retail unit renewals and 2.6% for large format renewals). Included in the leasing activity for the quarter were 19 leases that were for a lease term of less than one year, or for percentage rent in lieu of base rent. While these lease structures have always been a tool to manage tenant relocations and the timing of development plans, during the pandemic, leases structured as percentage rent in lieu of base rent were more prevalent to assist tenants and to maintain occupancy rates. As these leases mature, management anticipates moving tenants back to traditional lease structures. At December 31, 2024, percentage rent in lieu of base rent leases were in place for 0.6 million square feet of GLA, or 3.1% of in-place leases and had a weighted average lease term of approximately 2.7 years.

Robust Liquidity and Differentiated Financial Model

Primaris’ differentiated financial model is core to its overall strategy, providing a best-in-class capital structure upon which to build the business, providing on-going financial stability and strength. The following table summarizes key metrics relating to Primaris' unencumbered assets and unsecured debt.

In December 2024, Primaris exercised the option to extend the maturity of its $600 million unsecured syndicated revolving credit facility by one-year to January 4, 2028.

In the fourth quarter of 2024, Primaris entered into new secured debt on Place d'Orleans replacing the debt that matured in August 2024.

Liquidity at quarter end was $589.8 million, or 34% of Total Debt**.

Primaris' NAV** per unit outstanding at quarter end was $21.55.

Subsequent Events

Subsequent to December 31, 2024, Primaris:

On January 31, 2025, Primaris acquired a 50% co-ownership interest in Southgate Centre in Edmonton, Alberta and a 100% interest in Oshawa Centre in Oshawa, Ontario for aggregate consideration of:

• $335.0 million of cash (before disposition costs);
• $75.0 million of Trust Units, or 3,437,214 Units; and
• $175.0 million of 6.25% Convertible Preferred LP Units in a newly formed subsidiary limited partnership, which exchange into 8,020,165 Trust Units.

Waived conditions on the disposal of Sherwood Park Mall, Sherwood Park Professional Centre and a parcel of excess land for cash proceeds of $107.0 million, before disposition costs, which is expected to closed February 28, 2025 subject to customary closing conditions.

Purchased for cancellation an additional 320,000 Units under the ASPP for consideration of $4.8 million as of February 13, 2025, for total NCIB purchases since inception of 10,149,300 Units at an average price of $13.91, or a discount to NAV** of approximately 35.5%.

Conference Call and Webcast:

The call will be accessible for replay until February 21, 2025, by dialing 1-866-813-9403 with access code 171785, or on the Investor Relations section of the website.

About Primaris Real Estate Investment Trust

is Canada’s only enclosed shopping centre focused REIT, with ownership interests primarily in leading enclosed shopping centres located in growing Canadian markets. The proforma portfolio totals 15.0 million square feet valued at approximately $4.6 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, the Trust’s development activities, expected benefits from the Trust's normal course issuer bid activity, occupancy improvement, increasing rental rates, future acquisition and disposition activity, the Trust’s targets for managing its financial condition, the recovery of tenant sales, and the movement of tenants back to traditional lease structures. 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 MD&A which is 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. Other than as specifically required by law, Primaris undertakes no obligation to update any forward-looking statements to reflect new information, subsequent or otherwise.

Readers are cautioned that there is a significant risk that actual results for the year ending December 31, 2025 will vary from the financial outlook statements provided in this news release and that such variations may be material.

Certain forward-looking information included in this news release may also be considered “financial outlook” for purposes of applicable securities laws. Financial outlook about the Trust’s prospective results of operations including, without limitation, anticipated occupancy, anticipated FFO** per unit, anticipated same properties Cash NOI** growth, impact on rental revenue of contractual rent-steps, anticipated general and administrative expenses, and anticipated operating capital expenditures, anticipated redevelopment expenditures, anticipated straight-line rent adjustment in rental revenue 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 MD&A and in 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, because this information is subjective and subject to numerous risks, it should not be relied on as necessarily indicative of future results. Financial outlook contained in this news release was made as of the date of this news release and was provided for the purpose of providing further information about the Trust’s prospective financial performance. Readers are cautioned that the financial outlook contained herein should not be used for purposes other than for which it is disclosed herein.

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 February 13, 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 consolidated financial statements and the accompanying notes for the three months and years ended December 31, 2024 and 2023 (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” in 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 .

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 ("sq. ft."), total commercial retail unit ("CRU") sales volume, same stores sales volume, 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" in the MD&A. For an explanation of the composition of same store sales productivity, see Section 8.4, "Tenant Sales" in the MD&A.

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, site coverage, store count, gross leasable area (“GLA”), occupied 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" in the MD&A. For greater certainty, the portfolio operating metrics in the MD&A include only the Trust's proportionate ownership of the 7 properties held in co-ownerships (see Section 7.2, "Co-ownership Arrangements" in the MD&A).

Reconciliations of Non-GAAP Measures

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

The following table is 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.

The following table illustrates the calculation of 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 following table illustrates the reconciliation of net income (loss) to Adjusted EBITDA** for the three months and year ended December 31, 2024 and 2023.

The following tables illustrate Adjusted EBITDA** for the years ended December 31, 2024 and 2023.

The following tables illustrate Average Net Debt** for the periods ended December 31, 2024 and 2023 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 years ended December 31, 2024 and 2023.

The following tables illustrate principal repayments, for the calculation of the Debt Service Coverage** ratio, for the years ended December 31, 2024 and 2023.

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