SmartCentres REIT Kicks Off 2025 with Strong Growth and Strategic Momentum

By: Velorine

SmartCentres Real Estate Investment Trust (TSX: SRU.UN) has rolled into 2025 with confidence and measurable success, reporting a standout first quarter that showcases strength in retail leasing, residential development, and self-storage expansion.

A Robust Start with Rising Returns

In the face of an unpredictable market, SmartCentres posted a $7.4 million year-over-year increase in net operating income (NOI) and a 4.1% boost in Same Properties NOI. These gains reflect a strong leasing environment and continued tenant retention, driven in part by an impressive 8.4% average rent growth on renewals (excluding anchors).

SmartCentres CEO Mitchell Goldhar called the quarter “a strong start to 2025,” noting that the Trust is “outperforming the current market” by maintaining a sharp focus on value-based retail and development initiatives.

Major Milestones and Projects on the Rise

• Walmart took possession of its new 110,000 sq. ft. supercentre in South Oakville, set to open soon, a testament to SmartCentres’ commitment to anchoring retail with powerhouse tenants.
  
• The Vaughan NW Townhomes project continues its success story, with 90% of pre-sold units now closed, bringing in $12.4 million in profit and a healthy 21% margin to date.
  
• SmartCentres also continues to scale its self-storage portfolio, with three Toronto-area facilities and one in Dorval set to open in Q2 2025. Additional sites in Montreal, Laval, and Burnaby are in early-stage development.
  
• The ArtWalk condo Tower A in Vaughan is nearing above-grade construction with a 93% presale rate, showing strong demand in mixed-use urban developments.
  
• Progress continues on the 224,000 sq. ft. Canadian Tire flagship store on Laird Drive in Toronto, aiming for a Q2 2026 opening.
  

Strong Financial Performance with Rising FFO

Financial results reinforce the operational momentum:

• Net rental income rose to $136.8 million, a 4.6% increase over Q1 2024.
  
• FFO per unit jumped 17%, hitting $0.56 from $0.48 last year.
  
• Net loss per unit narrowed significantly, from $0.12 to $0.05, reflecting better property valuations and operating performance, despite higher interest and severance costs from paused developments.
  

Poised for Long-Term Growth

With 59.1 million sq. ft. of zoned mixed-use potential, including 1.0 million sq. ft. currently under construction, SmartCentres is positioned for both steady income and capital appreciation.

From value-focused retail to urban intensification, SmartCentres is proving that even in a shifting market, strategic execution and tenant-focused development deliver results.