Mr. Kevin Henley reports

CANADIAN NET REIT ANNOUNCES 2023 THIRD-QUARTER RESULTS

Canadian Net Real Estate Investment Trust has released its results for the quarter ended Sept. 30, 2023. The REIT also has declared distributions for the months of January, February and March, 2024.

"We are pleased with the performance of our portfolio. As of Sept. 30, 2023, we maintained full occupancy at 100 per cent, and our payout ratio remained at 55 per cent," said Kevin Henley, president and chief executive officer. "CNET is well positioned with its tenant base consisting primarily of essential national retailers, and our outlook remains positive. So far this year, we successfully divested three properties at valuations higher than our [international financial reporting standard] values, including a property in Trois-Rivieres during Q3 2023 and a property in Dartmouth, N.S., after [third quarter]. We are actively reallocating capital and optimizing our financial position. Despite our strong operational performance, the growth in [net operating income] was offset by increased interest expenses on our credit facilities, mortgage renewals and variable debt, which led to a neutral [funds from operations] over the period. With a focus on generating additional liquidity and strengthening the REIT's capital position, we are looking forward to refinancing our remaining mortgages in [fourth quarter]."

Results for Q3 2023

Canadian Net reported that funds from operations decreased slightly from $3.2-million, or 15.5 cents per unit, compared with $3.3-million, or 16.3 cents per unit, for Q3 2022.

Rental income was $6.4-million in Q3 2023, an increase of 0.5 per cent from the three-month period ended Sept. 30, 2022. Net operating income in Q3 2023 was $4.8-million, an increase of 1.0 per cent from Q3 2022, primarily reflecting the year-over-year increase in rental income and partially offset by property dispositions.

The REIT generated net income attributable to unitholders of $3.0-million in Q3 2023 compared with a loss of $500,000 in Q3 2022.

Results for the nine-month period ended Sept. 30, 2023

Canadian Net reported that FFO remained stable at $9.7-million, or 47.3 cents per unit, compared with $9.7-million, or 47.4 cents per unit, for the nine-month period ended Sept. 30, 2022.

Rental income was $19.3-million for the nine-month period ended Sept. 30, 2023, an increase of 9.2 per cent from the same period in 2022. NOI for the nine-month period ended Sept. 30, 2023, was $14.5-million, an increase of 7.8 per cent from Q3 2022, primarily reflecting the year-over-year increase in rental income and partially offset by property dispositions.

The REIT generated net income attributable to unitholders of $13.9-million for the nine-month period ended Sept. 30, 2023, compared with $2.8-million for the same period in 2022.

The change in FFO is mainly derived from the addition of rental revenues of newly acquired properties and contractual rent step-ups, which was offset by higher interest charges on mortgage renewals, variable rate mortgages and credit facilities. The increases in rental income and NOI were due to the addition of new properties and increases in rent from existing properties, partially offset by the sale of the Timmins and the Trois-Riviere properties. Finally, the variance in net income attributable to unitholders is primarily attributable to the change in fair value of investment properties, in addition to the impact of NOI from newly acquired properties, partially offset by interest on mortgages associated with said properties.

Distributions

Canadian Net announced that it will make monthly cash distributions of 2.875 cents per unit, representing 34.5 cents per unit on an annualized basis, on Jan. 31, Feb. 29 and March 29, 2024, to unitholders of record on Jan. 15, Feb. 15 and March 15, 2024, respectively.

The attached table represents financial highlights for Q3 2023 and Q3 2022. This information should be read in conjunction with the consolidated financial statements and management's discussion and analysis for the quarters ended Sept. 30, 2023, and Sept. 30, 2022.

Earnings webcast

Canadian Net will host a webcast on Nov. 23, 2023, at 10 a.m. EST, to discuss the results.

About Canadian Net Real Estate Investment Trust

Canadian Net is an open-ended trust that acquires and owns high-quality triple-net and management-free commercial real estate properties.

We seek Safe Harbor.