Primaris raises annual distribution 5.7% to C$0.93 per unit

Key Facts

Primaris raised its annual distribution to C$0.93 per unit from C$0.88, an increase of 5.7%, in a move the company said reflects confidence in cash flows and growth prospects. The new rate applies to the distribution declared on December 31, 2026, payable on January 15, 2027, according to the company statement. Primaris also reported third-quarter results, recording growth in diluted funds from operations per unit alongside a decline in in-place occupancy compared with a year earlier. The results show a divergence between growth in same-property operating income and the impact of vacant space left by HBC leases. Chief Executive Alex Avery said growth in net operating income and funds from operations per unit "continues to demonstrate the strength of our portfolio and operating platform."

Net income was C$28.434 million in the third quarter of 2026, compared with C$40.880 million in the same period a year earlier. Net income per unit fell to C$0.189 from C$0.322. The figures highlight a divergence between net income and funds from operations during the quarter. The available details in the statement did not provide an explanation for the decline in net income.

Same-property cash net operating income revenue grew 3.1% year over year, an increase of C$2.0 million. The comparison base in the third quarter of 2025 included a C$0.2 million contribution from rents at HBC locations that were later vacated. In occupancy, the in-place rate was 87.7% on September 30, 2026, down 4.1 percentage points from 91.8% a year earlier. Committed occupancy was 90.9%, compared with 92.8% on the corresponding date in 2025. Primaris attributed the decline in in-place occupancy to space vacated following the HBC lease repudiations in November 2025, and to differences in occupancy rates between acquired properties, properties sold and the rest of the portfolio.

The company said 882,000 square feet, equivalent to 84% of the former HBC space targeted for re-leasing, is leased or in advanced negotiations. It expects this space to generate about C$15.1 million in annual rent, four times the rent it previously generated. Same-store sales productivity rose to C$826 per square foot from C$806 in the third quarter of 2025, up 2.5% year over year. On distributions, the funds-from-operations payout ratio fell to 47.0% from 48.5% a year earlier. Average net debt to adjusted earnings before interest, taxes, depreciation and amortization also declined to 5.7 times over the four quarters ended September 30, from 5.9 times.

Primaris left its 2026 guidance unchanged, setting diluted funds from operations at C$1.83 to C$1.88 per unit. For 2027, the company expects funds from operations of C$1.93 to C$1.99 per unit, with same-property cash net operating income growth of 3% to 5%. It also set an occupancy range of 88% to 90% and forecast cash net operating income of C$427 million to C$433 million. The 2027 guidance includes the sale of Cataraqui Centre and assumes no other acquisitions or dispositions during the year. The Cataraqui sale is expected to close on January 6, 2027, subject to closing conditions. The company held its results call on October 29, 2026, at 9:00 a.m. Eastern time and made a replay available through its investor relations section.