Plaza Retail REIT recently reported higher profit and operating income in the second quarter as leasing, rent increases and improved cost recoveries helped drive growth across its retail property portfolio.
The Fredericton-based real estate investment trust said that profit and total comprehensive income rose 31.2 per cent to $16.6 million in the three months ended June 30, compared with $12.7 million in the same period a year earlier.
Net operating income increased 4.3 per cent to $19.9 million from $19.1 million, while revenue rose 1.2 per cent to $32.2 million.
The results come as Plaza continues to adjust its portfolio, including selectively selling properties while directing capital toward developments, intensifications and other initiatives.
“We delivered solid growth through the first half of 2026, supported by continued execution across our portfolio,” said Jason Parravano, President and Chief Executive Officer.
“FFO (Funds From Operations) per unit increased to $0.105 for the quarter, $0.202 year-to-date, up 5.0% and 7.4% respectively, compared with the same periods in the prior year (or 8.3% year-to-date after adjusting for certain timing and severance impacts). AFFO (Adjusted Funds From Operations) per unit increased to $0.078 for the quarter, $0.152 year-to-date, up 16.4% and 7.0% respectively, compared with the same periods in the prior year (or 8.0% year-to-date after adjusting for certain timing and severance impacts). Our FFO and AFFO payout ratios also improved to 69.2% and 92.2% year-to-date, respectively, strengthening our financial flexibility and demonstrating that the structural changes made to the business over the past year are producing sustainable results and predictable growth.”
Operating results
Plaza said quarterly NOI (Net Operating Income) increased by $828,000 from a year earlier, with the gain attributed to higher revenue from leasing and rent escalations, as well as improved cost recoveries.
Same-asset NOI increased 2.7 per cent in the quarter and 2.3 per cent for the first six months of the year. Committed occupancy was 97.6 per cent.
“Operating fundamentals remained resilient. Total NOI increased by 4.3% for the quarter, 3.4% year-to-date, and same asset NOI increased by 2.7% for the quarter, 2.3% year-to-date. Committed occupancy remained strong at 97.6%, supported by continued tenant demand, contractual rent growth and leasing activity across our essential retail portfolio.”
For the six months ended June 30, revenue was $64.7 million, up 2.8 per cent from $62.9 million a year earlier. NOI increased 3.4 per cent to $38.7 million from $37.4 million.
The year-to-date increase in NOI was attributed to higher leasing revenue, rent escalations and improved cost recoveries, partly offset by higher operating expenses.
Portfolio and capital allocation
Plaza said its strategy includes selling some properties while continuing to add space through development and other projects.
“We remain focused on improving the quality, scale and earnings capacity of our portfolio,” said Parravano. “While we have selectively sold certain properties this year, we will continue to add square footage through developments, intensifications and other strategic initiatives. This reflects a deliberate approach to capital allocation. We are recycling capital from mature or non-core assets into opportunities that can generate stronger returns, improve portfolio quality and contribute to sustainable cash flow growth.”
The trust’s portfolio at June 30 consisted of interests in 189 properties totalling approximately 8.8 million square feet across Canada, along with additional land held for development.
Plaza said the portfolio consists largely of open-air centres and stand-alone small-box retail outlets and is predominantly occupied by national tenants focused on essential needs, value and convenience.
Higher profit
Plaza’s quarterly profit was also affected by changes in the fair value of investment properties. The $5.1 million net increase in fair value during the quarter was $3.8 million higher than in the same period of 2025.
For the first six months of the year, profit and total comprehensive income was $29.4 million, compared with $22.0 million a year earlier, an increase of 33.9 per cent.
The year-to-date results included a $2-million increase in the share of profit of associates, which Plaza attributed mainly to a non-cash fair-value adjustment to underlying investment properties and changes involving 5400 Laurier Ouest Limited Partnership and the acquisition of Plazacorp Ontario-1 Limited Partnership.
The change in fair value of investment properties accounted for another $3.8 million of the year-over-year increase in profit.
“Our progress is measured not simply by the number of properties we own, but by the quality and scale of our real estate, the cash flow it generates, and the value created on a per unit basis. With growing FFO and AFFO, improved payout ratios and a pipeline of projects advancing across the portfolio, we believe Plaza is well positioned to continue creating long term value for unitholders.”
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