First Capital Real Estate Investment Trust announced Tuesday financial results for the quarter ended March 31, 2026.
It noted the following key highlights:
- Operating FFO per unit of $0.35, representing YoY growth of 7.6%
- Same Property NOI growth of 6.3%, excluding bad debt expense (recovery) and lease termination fees
- Lease renewal lift of 16.4% on strong leasing volume
- Total portfolio occupancy of 97.2%, representing an increase of 30 basis points year-over-year
“We are pleased to report another strong quarter of operating and financial results, highlighted by record occupancy, solid same-property NOI growth and robust lease renewal spreads which contributed to strong FFO per unit growth,” said Adam Paul, President & CEO.
“I am extremely grateful for and proud of the FCR team. Together, we have built a consistent track record of strong results through the disciplined execution of a well-defined strategy. This foundation positioned FCR for success and culminated in last month’s announced agreement to be acquired at a record unit price.”
On April 16, the Trust announced it had entered into an agreement to be acquired by KingSett Capital and Choice Properties REIT, in a unit and cash transaction valued at approximately $9.4 billion, including the assumption of certain debt. Under the terms of the agreement, First Capital unitholders will receive consideration of $19.24 in cash and 0.3186 units of Choice Properties per First Capital unit. Based on the closing unit price of Choice Properties on April 15, (the last trading day prior to the announcement of the transaction), the implied value of the total consideration equates to $24.40 per First Capital unit. The actual value of the consideration received by unitholders will depend on the market price of Choice Properties units at the time of closing and may be more or less than $24.40 per First Capital unit. The Transaction will be implemented by way of a statutory plan of arrangement and be subject to unitholder approvals to be obtained at a special meeting of First Capital unitholders to be held on June 23. In addition to unitholder approval, the transaction is subject to court approval, compliance with the Competition Act (Canada) and certain other closing conditions customary in transactions of this nature, explained the Trust.
First Capital owns and operates, acquires, and develops open-air grocery-anchored shopping centres in neighbourhoods with the strongest demographics in Canada.
The REIT also noted in its financial results:
- Net income (loss) attributable to Unitholders of $92.2 million or $0.43 per diluted unit compared to $84.4 million or $0.39 per diluted unit for the prior year period. The increase in net income over prior year was primarily due to a $30.0 million increase in fair value of investment property recognized in the first quarter of 2026 versus a $2.5 million increase in fair value of investment property recognized in the first quarter of 2025, on a proportionate basis. The increase was partially offset by a change in deferred income taxes of $17.7 million over the prior year period;
- Total Same Property NOI increased 6.4% over the prior year period. The growth was primarily due to rental rate growth and higher year-over-year occupancy. Same Property NOI excluding bad debt expense (recovery) and lease termination fees increased 6.3%;
- On a quarter-over-quarter basis, total portfolio occupancy increased 0.1% to 97.2% at March 31, 2026, from 97.1% at December 31, 2025. On a year-over-year basis, total portfolio occupancy increased 0.3% from 96.9% at March 31, 2025 to 97.2% at March 31, 2026;
- During the quarter, net rental rates increased 16.4% on a volume of 578,000 square feet of lease renewals, when comparing the rental rate in the first year of the renewal term to the rental rate in the last year of the expiring term. Net rental rates on leases renewed in the quarter increased 20.1% when comparing the average rental rate over the renewal term to the rental rate in the last year of the expiring term owing to higher contractual growth rates embedded within the renewed lease terms;
- The portfolio average net rental rate increased by 0.3% or $0.08 per square foot over the prior quarter to a record $24.81 per square foot, primarily due to rent escalations and renewal lifts, largely offset by tenant openings, net of tenant closures;
- During the first quarter, First Capital invested approximately $43 million into property development, redevelopment, residential inventory and acquisitions, including a parcel of excess land adjacent to an existing FCR-owned shopping centre located in Milton for $5.2 million.
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