Primaris Real Estate Investment Trust announced Wednesday financial and operating results for the second quarter ended June 30, 2026, saying leasing momentum remains exceptionally strong.
“Primaris has full control of all 1.3 million square feet of former HBC (Hudson’s Bay Company) GLA (Gross Leasing Area) and has accelerated negotiations with retailers. The Trust’s leasing strategy is twofold: firstly, execute long-term leases with single tenant and multi-tenant configurations, where appropriate; and secondly, repurpose and subdivide space, to accommodate multiple large format tenants, and/or high-value CRU. While design, permitting, and planning activities are underway, at certain locations, Primaris executed short-term leases with reputable tenants to restore rental income until Re-leasing Plans and Redevelopment Plans are ready to be executed,” it said in a news release.
“At June 30, 2026, approximately 600,000 square feet of former HBC space was leased to high-quality tenants under long-term lease agreements with occupancy dates ranging from early 2027 to mid-2029, with approximately 300,000 additional square feet in advanced lease negotiations. Primaris anticipates the weighted average net rent on this leasing activity to be approximately $17 per square foot. This net rent rate would be lower than the portfolio average reflecting the larger than typical unit sizes for the HBC backfills, but would still be well above the historical HBC net rents of approximately $4 per square foot. The capital investment to redevelop this space is expected to be in the range of $175 million to $225 million. Management’s current estimates and assumptions are subject to change.”
Financial and Operating Results Highlights
- $174.1 million total rental revenue;
- $825 per square foot total same stores sales productivity;
- +0.5% growth in Same Properties Cash Net Operating Income (or +1.1% excluding the $0.4 million prior year property tax recoveries recorded in 2025 over 2026);
- 91.1% committed occupancy, 86.6% in-place occupancy, and 83.5% long-term in-place occupancy;
- 80.1% combined operating cost recovery ratio;
- +7.4% weighted average spread on renewing net rents across 482,000 square feet;
- 141 CRU lease deals across 287,000 square feet at average net rents of $56.30;
- +1.3% growth in Funds from Operations per average diluted unit to $0.451; (or +5.4% excluding the impacts of both the $1.9 million terminated transaction costs recorded in 2026 and the $0.4 million higher prior year property tax recoveries recorded in 2025 relative to 2026;
- 48.8% FFO Payout Ratio;
- $5.3 billion total assets;
- 6.0x Average Net Debt to Adjusted EBITDA;
- $655.1 million in liquidity;
- $4.9 billion in unencumbered assets; and
- $21.72 Net Asset Value per unit outstanding.
Business Update Highlights
- 84% (881,400 square feet) of former Hudson’s Bay Company space is leased or in advanced negotiations, with 58% (608,500 square feet) under long-term lease agreements;
- These leases are expected to generate approximately $14.9 million of annual rental revenue, 4x the annual rent previously generated from the space when occupied by HBC;
- $99.5 million in non-core, shopping centre dispositions which closed on June 1, 2026;
- $64.0 million strategic acquisition of the remaining 50% interest in Regent Mall in Fredericton, New Brunswick, increasing Primaris’ ownership to 100%, which closed on June 19, 2026;
- $4.5 million strategic acquisition of the adjoining vacant former HBC box at Devonshire Mall in Windsor, Ontario, which closed on June 5, 2026;
- $275 to $375 million, or approximately 120 acres, of land identified for potential monetization;
- $200 million of non-core, non-enclosed shopping centre properties and retail pads identified for potential disposition; and
- Purchased for cancellation 165,700 Series A trust units under the Trust’s normal course issuer bid program for proceeds of $3.1 million at an average price per unit of approximately $18.44, representing a discount to NAV** per unit of approximately 15.1%.
“Leasing momentum across our portfolio remains exceptionally strong, supported by robust tenant demand and continued progress re-leasing former HBC space,” said Patrick Sullivan, President and Chief Operating Officer. “We are securing high-quality tenants on attractive terms while driving occupancy growth and enhancing the productivity of our centres. Combined with our land optimization strategy, these initiatives are unlocking significant embedded value across the portfolio and positioning Primaris to deliver meaningful NOI growth and long-term value creation for unitholders.”
“The strength of our operating platform, the quality of our portfolio, and the visibility we have into future growth opportunities continue to differentiate Primaris in the Canadian REIT sector,” said Alex Avery, Chief Executive Officer. “As we execute on our leasing, portfolio optimization, and capital allocation initiatives, we believe we are exceptionally well positioned to deliver above-average earnings growth and long-term value creation for our unitholders.”
Rags Davloor, Chief Financial Officer added, “Our balance sheet remains a key competitive advantage for Primaris. With low leverage, a conservative payout ratio and substantial liquidity, we are well positioned to execute on our strategic priorities. Combined with our disciplined approach to capital allocation, this financial flexibility allows us to invest in our portfolio, pursue selective acquisition opportunities, execute on our NCIB, and continue creating long-term value for our unitholders.”
Primaris is Canada’s only enclosed shopping centre focused REIT, with ownership interests in leading enclosed shopping centres located in growing Canadian markets. The current portfolio totals 14.6 million square feet, valued at approximately $5.2 billion at Primaris’ share.
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