Mr. Kevin Henley reports

CANADIAN NET REIT ANNOUNCES 2023 FOURTH-QUARTER RESULTS

Canadian Net Real Estate Investment Trust has released its results for the quarter ended Dec. 31, 2023. The REIT also announced distributions for the months of April, May and June, 2024.

"We are pleased to present our results today. Despite the challenges faced in the real estate market throughout 2023, Canadian Net maintained its strong performance," stated Kevin Henley, president and chief executive officer. "We successfully maintained our [funds from operations] per unit, 100-per-cent occupancy rate and one of the lowest payout ratio in the REIT sector at 54 per cent. With the acquisition market staying subdued, we initiated a capital recycling strategy, divesting three properties at values exceeding [international financial reporting standard] values. Looking ahead to 2024, we anticipate a gradual recovery in the acquisition market, while our focus remains on capital recycling and enhancing liquidity. Canadian Net has long been a consolidator of essential services, single-tenant triple net retail properties, and we remain committed to positioning the REIT advantageously to seize upcoming opportunities."

Results for fourth quarter 2023

Canadian Net reported funds from operations of $3.3-million or 16.2 cents for Q4 2023, consistent with the fourth quarter of 2022.

Rental income was $7.2-million in Q4 2023, an increase of 2.8 per cent from the three-month period ended Dec. 31, 2022. Net operating income in Q4 2023 was $4.9-million, consistent with Q4 2022, primarily reflecting the year-over-year increase in rental income, which was partially offset by property dispositions.

The REIT generated net income attributable to unitholders of $4.3-million in Q4 2023 compared with a loss of $9.3-million in Q4 2022.

Results for the 12-month period ended Dec. 31, 2023

Canadian Net reported FFO of $13.1-million, or 63.5 cents per unit compared with $13.0-million, or 63.6 cents per unit, for the 12-month period ended Dec. 31, 2022.

Rental income was $26.6-million for the 12-month period ended Dec. 31, 2023, an increase of 7.4 per cent from the same period in 2022. NOI for the 12-month period ended Dec. 31, 2023, was $19.4-million, an increase of 5.8 per cent from the same period in 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 $18.2-million for the 12-month period ended Dec. 31, 2023, compared with a loss of $6.5-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, Trois-Riviere and Dartmouth 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 April 30, May 31 and June 28, 2024, to unitholders of record on April 15, May 15 and June 14, 2024, respectively.

The attached table represents other financial highlights for Q4 2023 and Q4 2022. This information should be read in conjunction with the audited consolidated financial statements and management's discussion and analysis for the quarters ended Dec. 31, 2023, and Dec. 31, 2022.

Earnings webcast

Canadian Net will host a webcast on March 20, 2024, at 9 a.m. EST, to discuss the results.

A link to join the webcast is available.

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.