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Slate Grocery REIT — Earnings Release 2025
Nov 6, 2025
46990_rns_2025-11-05_ea56f22b-0489-49e1-8f83-1d46b15f18f5.pdf
Earnings Release
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SLCSE
Grocery REIT
SLATE
November 5, 2025
Slate Grocery REIT Reports Third Quarter 2025 Results
TORONTO, ON - Slate Grocery REIT (TSX: SGR.U) (TSX: SGR.UN) (the "REIT"), an owner and operator of U.S. grocery-anchored real estate, today announced its financial results and highlights for the three and nine months ended September 30, 2025.
"We are pleased to share another quarter of strong results, which highlight our team's continued leasing momentum with over 417,000 square feet of deals completed in the third quarter at double-digit rental spreads," said Blair Welch, Chief Executive Officer of Slate Grocery REIT. "Given the complex macroeconomic environment, consumer spending on grocery and essential goods remains resilient and continues to underpin strong tenant demand for our high-quality grocery-anchored spaces. With portfolio rents that are significantly below market, we believe the REIT is well positioned to maintain steady growth and performance."
For the CEO's letter to unitholders for the quarter, please follow the link here.
Highlights
- The REIT completed 417,145 square feet of total leasing in the quarter at double-digit rental spreads that continued to drive strong performance
- Renewals² were completed at 15.1% above expiring rents, and new deals were completed at 34.8% above comparable average in-place rent
- Adjusting for completed redevelopments, same-property Net Operating Income ("NOI") increased by $4.3 million or 2.7% on a trailing twelve-month basis
- Portfolio occupancy remained stable at 94.3% as at September 30, 2025
-
The REIT's average in-place rent of $12.82 per square foot remains well below the market average of $24.09³, providing meaningful runway for continued rent increases
-
The REIT has a weighted average interest rate of 5.0%¹, with 90.4%¹ of its debt having a fixed interest rate, providing a stable outlook for the REIT's near term financing costs
- Two interest rate swap contracts were amended, with a total notional amount of $312.5 million, extending the weighted average maturity and pay-fixed rate of the portfolio to 2.6 years and 3.5%, respectively
-
The REIT's weighted average capitalization rate remains well above the REIT's weighted average interest rate for outstanding debt, allowing the REIT to maintain positive leverage; this attractive valuation, combined with continued NOI growth, is expected to increase portfolio valuation over time
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The REIT's units continue to trade at a discount to net asset value, presenting a compelling investment opportunity for unitholders looking for an attractive total return
¹ Includes the REIT's share of joint venture investments. Refer to "Non-IFRS Measures" section below.
² As of March 31, 2025, the REIT revised its "Deal Types" methodology. Refer to 'Leasing and Property Portfolio' in Part II of Management's Discussion and Analysis for further details.
³ CBRE Econometric Advisors, Q3 2025.
Summary of Q3 2025 Results
Three months ended September 30,
| (thousands of U.S. dollars, except per unit amounts) | 2025 | 2024 | Change % |
|---|---|---|---|
| Rental revenue | $ 53,313 | $ 52,325 | 1.9% |
| NOI^{12} | $ 42,992 | $ 41,897 | 2.6% |
| Net income^{2} | $ 11,238 | $ 7,248 | 55.0% |
| Same-property NOI (3 month period, 114 properties)^{12} | $ 42,592 | $ 41,675 | 2.2% |
| Same-property NOI (12 month period, 113 properties)^{12} | $ 164,757 | $ 160,200 | 2.8% |
| New leasing (square feet)^{2} | 74,104 | 123,841 | (40.2)% |
| New leasing spread^{2} | 34.8% | 24.8% | 40.3% |
| Total leasing (square feet)^{2} | 417,145 | 850,455 | (51.0)% |
| Total leasing spread^{2} | 14.4% | 8.5% | 69.4% |
| Weighted average number of units outstanding ("WA units") | 60,419 | 60,347 | 0.1% |
| FFO^{12} | $ 16,474 | $ 17,552 | (6.1)% |
| FFO per WA units^{12} | $ 0.27 | $ 0.29 | (7.2)% |
| FFO payout ratio^{12} | 78.7% | 73.9% | 6.5% |
| AFFO^{12} | $ 12,984 | $ 14,303 | (9.2)% |
| AFFO per WA units^{12} | $ 0.21 | $ 0.24 | (11.4)% |
| AFFO payout ratio^{12} | 99.9% | 90.7% | 10.2% |
| Fixed charge coverage ratio^{13} | 1.9x | 2.0x | (5.0)% |
| (thousands of U.S. dollars, except per unit amounts) | September 30, 2025 | December 31, 2024 | Change % |
| --- | --- | --- | --- |
| Total assets | $ 2,258,018 | $ 2,233,699 | 1.1% |
| Total assets, proportionate interest^{12} | $ 2,456,060 | $ 2,444,143 | 0.5% |
| Debt | $ 1,196,515 | $ 1,166,655 | 2.6% |
| Debt, proportionate interest^{12} | $ 1,386,391 | $ 1,370,530 | 1.2% |
| Net asset value per unit | $ 13.73 | $ 13.84 | (0.8)% |
| Number of properties^{2} | 116 | 116 | —% |
| Portfolio occupancy^{2} | 94.3% | 94.8% | (0.5)% |
| Debt / GBV ratio | 53.0% | 52.2% | 1.5% |
1 Refer to "Non-IFRS Measures" section below.
2 Includes the REIT's share of joint venture investments.
3 As of March 31, 2025, the REIT transitioned from disclosing interest coverage ratio to fixed charge coverage ratio. Refer to 'Fixed Charge Coverage Ratio' in Part IV of Management's Discussion and Analysis for further details.
Conference Call and Webcast
Senior management will host a live conference call at 9:00 am ET on November 6, 2025 to discuss the results and ongoing business initiatives of the REIT.
The conference call can be accessed by dialing (289) 514-5100 or 1 (800) 717-1738. Additionally, the conference call will be available via simultaneous audio found at
https://onlinexperiences.com/scripts/Server.nxp?LASCmd=AI:4;F:QS!10100&ShowUUID=OFF9C23A-B74C-4E8A-9E8A-7B825D41E0D8&LangLocaleID=1033. A replay will be accessible until November 20, 2025 via the REIT's website or by dialing (289) 819-1325 or 1 (888) 660-6264 (access code 71103#) approximately two hours after the live event.
About Slate Grocery REIT (TSX: SGR.U / SGR.UN)
Slate Grocery REIT is an owner and operator of U.S. grocery-anchored real estate. The REIT owns and operates approximately $2.4 billion of critical real estate infrastructure across major U.S. metro markets that communities rely upon for their everyday needs. The REIT's resilient grocery-anchored portfolio and strong credit tenants are expected to provide unitholders with durable cash flows and the potential for capital appreciation over the longer term. Visit slategroceryreit.com to learn more about the REIT.
About Slate Asset Management
Slate Asset Management is a global investor and manager focused on essential real estate and infrastructure assets. We focus on fundamentals with the objective of creating long-term value for our investors and partners across the real assets space. We are supported by exceptional people and flexible capital, which enable us to originate and execute on a wide range of compelling investment opportunities. Visit slateam.com to learn more, and follow Slate Asset Management on LinkedIn, X (Twitter), and Instagram.
Supplemental Information
All interested parties can access Slate Grocery's Supplemental Information online at slategroceryreit.com in the Investors section. These materials are also available on SEDAR+ or upon request to the REIT at [email protected] or (416) 644-4264.
Forward Looking Statements
Certain information herein constitutes "forward-looking information" as defined under Canadian securities laws which reflect management's expectations regarding objectives, plans, goals, strategies, future growth, results of operations, performance, business prospects and opportunities of the REIT. The words "plans", "expects", "does not expect", "forecasts", "scheduled", "estimates", "intends", "anticipates", "does not anticipate", "projects", "believes", or variations of such words and phrases or statements to the effect that certain actions, events or results "may", "will", "could", "would", "might", "occur", "be achieved", or "continue" and similar expressions identify forward-looking statements. Management believes that the expectations reflected in its forward-looking statements are based upon reasonable assumptions, however, management can give no assurance that actual results, performance or achievements will be consistent with these forward-looking statements. Such forward-looking statements are qualified in their entirety by the inherent risks and uncertainties surrounding future expectations.
Forward-looking statements are necessarily based on a number of estimates and assumptions that, while considered reasonable by management as of the date hereof, are inherently subject to significant business, economic and competitive uncertainties and contingencies. When relying on forward-looking statements to make decisions, the REIT cautions readers not to place undue reliance on these statements, as forward-looking statements involve significant risks and uncertainties, and should not be read as guarantees of future performance or results, and will not necessarily be accurate indications of whether or not the times at or by which such performance or results will be achieved. A number of factors could cause actual results to differ, possibly materially, from the results discussed in the forward-looking statements. Additional information about risks and uncertainties is contained in the filings of the REIT with securities regulators.
Non-IFRS Measures
This news release and accompanying financial statements are based on IFRS® Accounting Standards ("IFRS Accounting Standards"), as issued by the International Accounting Standards Board ("IASB").
We disclose a number of financial measures in this news release that are not measures used under IFRS Accounting Standards, including NOI, same-property NOI, FFO, FFO payout ratio, AFFO, AFFO payout ratio, adjusted EBITDA, fixed charges and the fixed charge coverage ratio, in addition to certain measures on a per unit basis.
- NOI is defined as rental revenue less operating expenses, prior to straight-line rent, International Financial Reporting Interpretations Committee ("IFRIC") 21, Levies ("IFRIC 21") property tax adjustments and adjustments for equity investments. Same-property NOI includes those properties owned by the REIT for each of the current period and the relevant comparative period, excluding those properties under development.
- FFO is defined as net income adjusted for certain items including transaction/disposition costs, change in fair value of properties, change in fair value of financial instruments, deferred income taxes, unit income (expense), adjustments for equity investments and IFRIC 21 property tax adjustments.
- AFFO is defined as FFO adjusted for straight-line rental revenue and revenue sustaining capital, leasing costs and tenant improvements.
- FFO payout ratio and AFFO payout ratio are defined as distributions declared divided by FFO and AFFO, respectively.
- FFO per WA unit and AFFO per WA unit are defined as FFO and AFFO divided by the weighted average class U equivalent units outstanding, respectively.
- Adjusted EBITDA is defined as NOI less general and administrative expenses at the REIT's proportionate interest.
- Fixed charges include principal payments and cash interest paid, net at the REIT's proportionate interest.
- Fixed charge coverage ratio is defined as adjusted EBITDA divided by fixed charges at the REIT's proportionate interest.
- Net asset value is defined as the aggregate of the carrying value of the REIT's equity, deferred income taxes and exchangeable units of subsidiaries.
- Proportionate interest represents financial information adjusted to reflect the REIT's equity accounted joint ventures and financial real estate assets and its share of net income (losses) from equity accounted joint ventures and financial real estate assets on a proportionately consolidated basis at the REIT's ownership percentage of the related investment.
We utilize these measures for a variety of reasons, including measuring performance, managing the business, capital allocation and the assessment of risk. Descriptions of why these non-IFRS measures are useful to investors and how management uses each measure are included in Management's Discussion and Analysis. We believe that providing these performance measures on a supplemental basis to our IFRS Accounting Standards results is helpful to investors in assessing the overall performance of our businesses in a manner similar to management. These financial measures should not be considered as a substitute for similar financial measures calculated in accordance with IFRS Accounting Standards. We caution readers that these non-IFRS financial measures may differ from the calculations disclosed by other businesses, and as a result, may not be comparable to similar measures presented by others.
SGR-FR
For Further Information
Investor Relations
Tel: +1 416 644 4264
E-mail: [email protected]
Calculation and Reconciliation of Non-IFRS Measures
The table below summarizes a calculation of non-IFRS measures based on financial information in accordance with IFRS Accounting Standards.
| Three months ended September 30, | ||
|---|---|---|
| (in thousands of U.S. dollars, except per unit amounts) | 2025 | 2024 |
| Rental revenue | $ 53,313 | $ 52,325 |
| Straight-line rent revenue | (54) | (110) |
| Property operating expenses | (9,098) | (8,742) |
| IFRIC 21 property tax adjustment | (6,701) | (6,778) |
| Contribution from joint venture investments | 5,532 | 5,202 |
| NOI^{12} | $ 42,992 | $ 41,897 |
| Cash flow from operations | $ 10,714 | $ 18,221 |
| Changes in non-cash working capital items | 7,373 | 975 |
| Disposition costs | — | 8 |
| Finance charge and mark-to-market adjustments | (1,144) | (425) |
| Interest income and TIF note adjustments | 145 | 72 |
| Adjustments for joint venture investments | 3,015 | 1,912 |
| Non-controlling interest | (3,172) | (3,654) |
| Taxes on dispositions | — | 38 |
| Capital expenditures | (1,860) | (1,451) |
| Leasing costs | (1,026) | (678) |
| Tenant improvements | (1,061) | (715) |
| AFFO^{12} | $ 12,984 | $ 14,303 |
| Net income^{2} | $ 11,238 | $ 7,248 |
| Change in fair value of financial instruments | (543) | 3,606 |
| Disposition costs | — | 8 |
| Change in fair value of properties | 12,132 | 11,395 |
| Deferred income tax expense | 3,345 | 1,845 |
| Unit expense | 2 | 3,077 |
| Adjustments for joint venture investments | 961 | 1,476 |
| Non-controlling interest | (3,960) | (4,363) |
| Taxes on dispositions | — | 38 |
| IFRIC 21 property tax adjustment | (6,701) | (6,778) |
| FFO^{12} | $ 16,474 | $ 17,552 |
| Straight-line rental revenue | (54) | (110) |
| Capital expenditures | (1,860) | (1,451) |
| Leasing costs | (1,026) | (678) |
| Tenant improvements | (1,061) | (715) |
| Adjustments for joint venture investments | (277) | (1,004) |
| Non-controlling interest | 788 | 709 |
| AFFO^{12} | $ 12,984 | $ 14,303 |
1 Refer to "Non-IFRS Measures" section above.
2 Includes the REIT's share of joint venture investments.
| Three months ended September 30, | ||
|---|---|---|
| (in thousands of U.S. dollars, except per unit amounts) | 2025 | 2024 |
| NOI ^{ 12 } | $42,992 | $41,897 |
| General and administrative expenses | (4,077) | (3,988) |
| Cash interest, net | (15,558) | (13,501) |
| Finance charge and mark-to-market adjustments | (1,144) | (425) |
| Current income tax recovery | 407 | 108 |
| Adjustments for joint venture investments | (2,517) | (3,290) |
| Non-controlling interest | (3,172) | (3,654) |
| Capital expenditures | (1,860) | (1,451) |
| Leasing costs | (1,026) | (678) |
| Tenant improvements | (1,061) | (715) |
| AFFO ^{ 12 } | $12,984 | $14,303 |
| 1Refer to “Non-IFRS Measures” section above. 2Includes the REIT’s share of joint venture investments. | ||
| Three months ended September 30, | ||
| (in thousands of U.S. dollars, except per unit amounts) | 2025 | 2024 |
| Net income ^{ 1 } | $11,238 | $7,248 |
| Interest and finance costs | 16,702 | 13,926 |
| Change in fair value of financial instruments | (543) | 3,606 |
| Disposition costs | — | 8 |
| Change in fair value of properties | 12,132 | 11,395 |
| Deferred income tax expense | 3,345 | 1,845 |
| Current income tax recovery | (407) | (70) |
| Unit expense | 2 | 3,077 |
| Adjustments for joint venture investments | 3,037 | 3,414 |
| Straight-line rent revenue | (54) | (110) |
| IFRIC 21 property tax adjustment | (6,701) | (6,778) |
| Adjusted EBITDA ^{ 12 } | $38,751 | $37,561 |
| Adjusted EBITDA ^{ 12 } | $38,751 | $37,561 |
| Cash interest paid | (17,868) | (15,781) |
| Principal payments | (2,378) | (3,028) |
| Total fixed charges ^{ 1 } | $(20,246) | $(18,809) |
| Fixed charge coverage ratio ^{ 123 } | 1.9x | 2.0x |
| 1Includes the REIT’s share of joint venture investments. 2Refer to “Non-IFRS Measures” section above. 3As of March 31, 2025, the REIT transitioned from disclosing interest coverage ratio to fixed charge coverage ratio. Refer to ‘Fixed Charge Coverage Ratio’ in Part IV of Management’s Discussion and Analysis for further details. |
| September 30, 2025 | December 31, 2024 | |||||
|---|---|---|---|---|---|---|
| (in thousands of U.S. dollars, except per unit amounts) | Statement of Financial Position | Joint Venture Investments | Proportionate Share(Non-IFRS) | Statement of Financial Position | Joint Venture Investments | Proportionate Share(Non-IFRS) |
| ASSETS | ||||||
| Non-current assets | ||||||
| Properties | $2,066,864 | $313,400 | $2,380,264 | $2,054,511 | $310,400 | $2,364,911 |
| Joint venture investments | 134,042 | (134,042) | — | 112,429 | (112,429) | — |
| Interest rate swaps | — | — | — | 4,690 | — | 4,690 |
| Other assets | 3,380 | — | 3,380 | 3,624 | — | 3,624 |
| $2,204,286 | $179,358 | $2,383,644 | $2,175,254 | $197,971 | $2,373,225 | |
| Current assets | ||||||
| Cash | 18,999 | 5,520 | 24,519 | 22,668 | 4,851 | 27,519 |
| Accounts receivable | 22,571 | 3,693 | 26,264 | 23,417 | 1,723 | 25,140 |
| Other assets | 3,262 | 7,943 | 11,205 | 4,327 | 4,629 | 8,956 |
| Prepaids | 8,900 | 1,528 | 10,428 | 5,050 | 1,025 | 6,075 |
| Interest rate swaps | — | — | — | 2,983 | 245 | 3,228 |
| $53,732 | $18,684 | $72,416 | $58,445 | $12,473 | $70,918 | |
| Total assets | $2,258,018 | $198,042 | $2,456,060 | $2,233,699 | $210,444 | $2,444,143 |
| LIABILITIES | ||||||
| Non-current liabilities | ||||||
| Debt | $1,188,913 | $52,236 | $1,241,149 | $1,120,616 | $59,914 | $1,180,530 |
| Interest rate swaps | 2,330 | — | 2,330 | — | — | — |
| Deferred income taxes | 159,754 | — | 159,754 | 153,580 | 2 | 153,582 |
| Other liabilities | 4,393 | 962 | 5,355 | 4,378 | 837 | 5,215 |
| $1,355,390 | $53,198 | $1,408,588 | $1,278,574 | $60,753 | $1,339,327 | |
| Current liabilities | ||||||
| Debt | 7,602 | 137,640 | 145,242 | 46,039 | 143,961 | 190,000 |
| Accounts payable and accrued liabilities | 43,079 | 7,204 | 50,283 | 42,071 | 5,730 | 47,801 |
| Exchangeable units of subsidiaries | 8,072 | — | 8,072 | 8,733 | — | 8,733 |
| Distributions payable | 4,323 | — | 4,323 | 4,323 | — | 4,323 |
| $63,076 | $144,844 | $207,920 | $101,166 | $149,691 | $250,857 | |
| Total liabilities | $1,418,466 | $198,042 | $1,616,508 | $1,379,740 | $210,444 | $1,590,184 |
| EQUITY | ||||||
| Unitholders' equity | $661,592 | $— | $661,592 | $673,474 | $— | $673,474 |
| Non-controlling interest | 177,960 | — | 177,960 | 180,485 | — | 180,485 |
| Total equity | $839,552 | $— | $839,552 | $853,959 | $— | $853,959 |
| Total liabilities and equity | $2,258,018 | $198,042 | $2,456,060 | $2,233,699 | $210,444 | $2,444,143 |