Mr. Michael Zakuta reports

PLAZA RETAIL REIT ANNOUNCES THIRD QUARTER 2023 RESULTS

Plaza Retail REIT has released its financial results for the three and nine months ended Sept. 30, 2023.

"We continue to make progress on our development program and substantially completed two significant projects during the quarter," said Michael Zakuta, president and chief executive officer. "Tenant demand from grocery and other essential needs, value, and convenience retailers remains very strong. We are seeing the impact, with increasing lease renewal spreads and high committed occupancy. Our core tenants are performing well, our portfolio is resilient and we remain confident in our business."

Quarterly highlights:

• Net operating income was $18.5-million, up $304,000 (1.7 per cent) with the same period in 2022. The increase in NOI is from rent escalations in same-asset properties, acquisitions, developments and properties transferred to income producing in 2022 and 2023, and was partially offset by a decrease in NOI from properties sold.
• Profit and total comprehensive income for the current quarter were $3.4-million compared with $7.2-million in the same period in the prior year. The decrease was mainly due to the change in the fair value of investment properties due to an increase in capitalization rates.

Year-to-date highlights:

• NOI was $52.9-million consistent with the same period in 2022. NOI was impacted by an increase in NOI from same-asset properties, acquisitions, developments and properties transferred to income producing in 2022 and 2023, offset by an allowance provided to a tenant in consideration of the delayed delivery of premises at a development property, and a decrease in NOI from properties sold.
• Profit and total comprehensive income for the current year to date were $24.1-million compared with $40.0-million in the same period in the prior year. The decrease was mainly due to a decrease in the fair value of investment properties of $10.5-million in the current year compared with a fair value increase of $1.8-million in the same period in the prior year. The fair value change was mainly due to an increase in capitalization rates. Profit was also impacted by an increase in administrative expenses and finance costs, and an increase in investment and other income from development activity, along with changes in non-cash fair value adjustments relating to share of profit from associates, interest rate swaps, the Class B exchangeable limited partnership units and convertible debentures.

Quarterly highlights:

• Funds from operations and adjusted funds from operations: For the three months ended Sept. 30, 2023, FFO per unit decreased by 0.2 cent (1.9 per cent) compared with the same period in the prior year. FFO was impacted by an increase in NOI from same-asset properties, acquisitions, developments and properties transferred to income producing in 2022 and 2023, an increase in investment and other income mainly due to higher fees from additional development activity, offset by an increase in administrative expenses and a decrease in NOI from properties sold. AFFO per unit increased by 0.5 cent (6.3 per cent) compared with the same period in the prior year mainly due to the changes in FFO noted above.
• Same-asset NOI increased by $492,000 (2.8 per cent) due to lease-up and rent escalations over the same period in the prior year, partially offset by an increase in operating and realty tax expenses.

Year-to-date highlights:

• FFO and AFFO: For the nine months ended Sept. 30, 2023, FFO per unit decreased by 1.3 cents (4.3 per cent) compared with the same period in the prior year. FFO was impacted by an increase in NOI from same-asset properties, acquisitions, developments and properties transferred to income producing in 2022 and 2023, an increase in investment and other income mainly due to higher fees from development activity, offset by an allowance provided to a tenant in consideration of delayed delivery of premises at a development property, an increase in finance and administrative expenses, and a decrease in NOI from properties sold. AFFO per unit decreased by 1.6 cents (6.4 per cent) compared with the same period in the prior year due to the changes in FFO noted above, as well as increased leasing costs.
• Same-asset NOI increased by $648,000 (1.3 per cent) due to lease-up and rent escalations over the same period in the prior year, partially offset by an increase in operating and realty tax expenses.

FFO and AFFO per unit, for both the three and nine months ended Sept. 30, 2023, were also impacted by the issue of 8,548,000 trust units in March, 2023.

Further information

Information appearing in this press release is a select summary of results. A more detailed analysis of the real estate investment trust's financial and operating results is included in the REIT's management's discussion and analysis and consolidated financial statements, which can be found on the REIT's website or on SEDAR+.

Conference call

Mr. Zakuta, and Jim Drake, chief financial officer, will host a conference call for the investment community on Friday, Nov. 10, 2023, at 11 a.m. EST. The call-in numbers for participants are 1-416-764-8659 (local Toronto) or 1-902-704-0254 (local Halifax) or 1-888-664-6392 (toll-free, within North America).

A replay of the call will be available until Nov. 17, 2023. To listen to the replay, dial 1-416-764-8677 (local Toronto) or 1-888-390-0541 (passcode: 030879 followed by the number sign). The audio replay will also be available for download on the REIT's website for 90 days following the conference call.

About Plaza Retail REIT

Plaza Retail is an open-ended real estate investment trust, and is a leading retail property owner and developer, focused on Ontario, Quebec and Atlantic Canada. Plaza Retail's portfolio at Sept. 30, 2023, includes interests in 233 properties totalling approximately 8.9 million square feet across Canada and additional lands held for development. Plaza Retail's portfolio largely consists of open-air centres and stand-alone small box retail outlets, and is predominantly occupied by national tenants.

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