Company Website: https://www.primarisreit.com
TORONTO -- (Business Wire)

Primaris Real Estate Investment Trust (“Primaris” or “the Trust”) (TSX: PMZ.UN) announced today financial and operating results for the second quarter ended June 30, 2026.

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** ("Cash NOI") (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** ("FFO") 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** ("NAV") per unit outstanding.

Business Update Highlights

• 84% (881,400 square feet) of former Hudson's Bay Company ("HBC") 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 ("Trust Units") under the Trust's normal course issuer bid ("NCIB") 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."

2026 Financial Outlook

Disciplined capital allocation is a key pillar to Primaris' strategy. To this end, Primaris established certain targets for managing the Trust's financial condition and maintaining a conservative capital structure (see Section 3, "Business Overview and Strategy" of the MD&A).

Guidance: In addition to its established targets, Primaris has provided guidance for the full year of 2026. The most recently published guidance for the full year of 2026 is reproduced below and remains unchanged.

In the press release dated September 24, 2024, Primaris released targets for the period ending December 31, 2027. These targets are not guidance, but are an outlook based on the execution of Primaris' strategic pillars.

Readers are cautioned that there could be a significant risk that actual results for the year ending December 31, 2026 and the Trust's actual performance against the targets for the period ending December 31, 2027 as set forth above will vary from the financial outlook statements provided in this press release and that such variations may be material.

See Section 2, "Forward-Looking Statements and Financial Outlook" of the MD&A for a description of the material factors, assumptions, risks and uncertainties that could impact the financial outlook statements.

Summary of Select Financial and Operational Metrics

Summary of Select Financial and Operational Metrics (continued)

Operating Results

FFO** for the three months ended June 30, 2026 was $0.006 per unit, or 1.3%, higher than the same period of the prior year driven by the growth in NOI**. General and administrative expenses increased $0.027 per unit (including $0.014 per unit impact from terminated transaction costs), and net interest and other financing charges were higher by $0.032 per unit, and the net change in the weighted average diluted units outstanding accounted for a decrease of $0.061 per unit. The negative impacts from interest and change in average number of units, totaling $0.093 per unit, were primarily driven by the 2025 capital recycling activities.

FFO** for the three months ended June 30, 2025 included revenue of $1.2 million from prior years' tax recoveries ($0.8 million in 2026) and $1.5 million from the now disclaimed HBC leases (nil in 2026).

Excluding the impacts of both the $1.9 million terminated transaction costs recorded in 2026 and the $0.4 million variance in reported revenue from the recovery of prior years' property taxes, FFO** per unit would have been $0.024, or 5.4%, higher than the same period of the prior year. This increase reflects the growth from the 2025 acquisitions and the impact of new leasing activity over the lost revenue from the disclaimed HBC leases.

While impacts from prior years occur regularly, management believes the amounts considered in the analysis above represents activity differing from historic norms.

Same Properties Cash NOI** for the three months ended June 30, 2026 was $0.3 million, or 0.5%, higher than the same period of the prior year. The Same Properties reported Cash NOI** growth in the quarter despite there being a $0.4 million greater contribution from prior year tax recovery revenue in 2025 than in the same period of 2026, and a $1.0 million contribution in 2025 from the now disclaimed HBC leases. Excluding only the $0.4 million variance from the recovery of prior year property tax, Same Properties' Cash NOI** growth would have been an increase of 1.1%. This growth reflects the impact of leasing activity over the lost revenue from the disclaimed HBC leases.

The table below illustrates the composition of AFFO** and the drivers of the change for the three months ended June 30, 2026 as compared to the same period in 2025.

Occupancy and Leasing Results

Primaris’ leasing activities are focused on driving value by actively managing the tenant and merchandising mix at its investment properties.

As at June 30, 2026, the Trust's portfolio had long-term in-place occupancy of 83.5%, in-place occupancy of 86.6%, and committed occupancy of 91.1%. In-place occupancy at June 30, 2026 of 86.6% was 2.2% lower than the previous year. The decline was driven by three factors: the impact of the vacant space associated with HBC leases disclaimed in November of 2025; lower occupancy rates at the Acquisitions compared to the remaining portfolio; and higher occupancy rates at the Dispositions compared to the remaining portfolio. While the in-place occupancy rates at the Dispositions were higher compared to the remaining portfolio, these properties had a higher percentage of short-term and specialty leases.

In-place occupancy for Same Properties increased 0.4% from June 30, 2025 to 89.2% at June 30, 2026. The increase was primarily driven by the recent leasing activities.

Average in-place occupancy is calculated by averaging the occupied square feet and total GLA for each month in the measurement period. For the six months ended June 30, 2026, the average in-place occupancy rate was 86.4%, a decrease of 6.1% compared to June 30, 2025. The decrease was primarily due to the change in the portfolio composition and the vacant space associated with HBC leases.

In the quarter, Primaris completed 188 leasing deals totaling 809 thousand square feet. The majority of the leasing deals were for commercial retail unit ("CRU") tenants comprising 141 deals over 287 thousand square feet at average net rents of $56.30. The weighted average spread on renewing net rents* (for the 109 leases renewed in the quarter) was 7.4% (5.8% for CRU renewals and 10.8% for large format renewals).

HBC Exposure

Primaris has full control of all 1.3 million square feet of former HBC GLA 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, (“Re-leasing Plans”) where appropriate; and secondly, repurpose and subdivide space (“Redevelopment Plans”), 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.

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.

Robust Liquidity and Differentiated Financial Model

The following table summarizes key metrics relating to Primaris' unencumbered assets and unsecured debt.

Liquidity* at quarter end was $655.1 million, or 30% of Total Debt**.

Primaris' NAV** per unit outstanding at quarter end was $21.72.

About Primaris Real Estate Investment Trust

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. Economies of scale are achieved through its fully internal, vertically integrated, full-service national management platform. Primaris is very well-capitalized and is exceptionally well positioned to take advantage of market opportunities at an extraordinary moment in the evolution of the Canadian retail property landscape.

Forward-Looking Statements and Financial Outlook

Certain statements included in this news release constitute ‘‘forward-looking information’’ or “forward-looking statements” within the meaning of applicable securities laws. The words “will”, “expects”, “plans”, "estimates", “intends” and similar expressions are often intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. Specific forward-looking statements made or implied in this news release include but are not limited to statements regarding: Primaris' growth opportunities, including its ability to drive performance from its existing properties, expected future distributions, future acquisition and disposition activity, Primaris' leasing and redevelopment plans and strategy, including with respect to the former HBC space, and the timing thereof; management's expectations regarding the potential for NOI** growth from the re-leasing of former HBC space and Primaris' land optimization strategy; and anticipated annual net rent from the former HBC space, a portion of which is attributable to leases that are only in advanced discussions and that have not been executed. Forward-looking statements are provided for the purpose of presenting information about management’s current expectations and plans relating to the future and readers are cautioned that such statements may not be appropriate for other purposes. These statements are not guarantees of future performance and are based on estimates and assumptions that are inherently subject to risks and uncertainties. Primaris cautions that although it is believed that the assumptions are reasonable in the circumstances, actual results, performance or achievements of Primaris may differ materially from the expectations set out in the forward-looking statements. Material risk factors and assumptions include; the risk that potential NOI** growth from the re-leasing of former HBC space and Primaris' land optimization strategy is not realized on the terms, at the values, or with the timelines currently expected, if at all; the risk that Primaris is unable to monetize excess land or complete non-core dispositions on the terms, at the values or within the timelines currently expected, if at all; the risk that leases currently in advanced discussions are not executed and that the actual annual net rent realized from the former HBC space is less than anticipated; and those set out in the Trust's Annual Information Form for the year ended December 31, 2025 (the "AIF") and in the Trust's management's discussion and analysis for the three months and year ended December 31, 2025 (the "Annual MD&A"), each of which are available on SEDAR+, and in Primaris’ other materials filed with the Canadian securities regulatory authorities from time to time. Given these risks, undue reliance should not be placed on these forward-looking statements.

Certain forward-looking information included in this news release may also be considered “financial outlook” for purposes of applicable securities law, including statements under the heading "2026 Financial Outlook". Financial outlook about the Trust’s prospective results of operations including, without limitation, anticipated FFO** per unit fully diluted, anticipated Cash NOI** and Same Properties Cash NOI** growth, impact on rental revenue of contractual rent-steps, anticipated general and administrative expenses, management's expectations regarding future FFO Payout Ratios**, anticipated operating capital expenditures, anticipated redevelopment capital expenditures, anticipated straight-line rent adjustment to revenue, anticipated occupancy, management's expectations regarding future NOI** growth, and the Trust's targets for the period ending December 31, 2027 for a number of key metrics, including in-place occupancy, annual Same Properties Cash NOI** growth, acquisition and disposition activity, annual FFO** per unit growth (fully diluted) and annual distribution growth, is subject to the same material assumptions, risk factors, limitations and qualifications as set forth in the Annual MD&A, as updated by the MD&A, and the Trust's AIF. The Trust and management believe that such financial outlook has been prepared on a reasonable basis, reflecting management’s best estimates and judgments. However, this information is subjective and subject to numerous risks. Financial outlook contained in this news release was provided for the purpose of providing further information about the Trust’s prospective financial performance and readers are cautioned that it should not be used for other purposes.

Readers are also urged to examine the Trust’s materials filed with the Canadian securities regulatory authorities from time to time as they may contain discussions on risks and uncertainties which could cause the actual results and performance of Primaris to differ materially from the forward-looking statements and financial outlook contained in this news release. All forward-looking statements and financial outlook in this news release are qualified by these cautionary statements. These forward-looking statements and financial outlook are made as of July 29, 2026, and Primaris, except as required by applicable securities laws, assumes no obligation to update or revise them to reflect new information or the occurrence of future events or circumstances.

Non-GAAP Measures

Information in this news release is a select summary of results. This news release should be read in conjunction with the MD&A and the Trust's unaudited interim condensed consolidated financial statements and the accompanying notes for the three and six months ended June 30, 2026 and 2025 (the “Financial Statements”).

The Financial Statements are prepared in accordance with IFRS accounting standards as issued by the IASB, however, in this news release, Primaris also uses a number of measures which do not have a standardized meaning prescribed under generally accepted accounting principles (“GAAP”) in accordance with IFRS. These non-GAAP measures, which are denoted in this news release by the suffix “**”, include non-GAAP financial measures and non-GAAP ratios, each as defined in National Instrument 52-112, Non-GAAP and Other Financial Measures Disclosure ("NI 52-112"). None of these non-GAAP measures should be construed as an alternative to financial measures calculated in accordance with IFRS. Furthermore, these non-GAAP measures may not be comparable to similar measures presented by other real estate entities. A definition of each non-GAAP measure used herein and an explanation of the reasons why management believes the measure to be useful to investors can be found in the section entitled “Non-GAAP Measures” in the MD&A, which section is incorporated by reference into this news release, and a reconciliation to the most directly comparable financial measure in the Financial Statements, in each case, can be found below. The MD&A is available on the Trust’s profile on SEDAR+ at www.sedarplus.ca.

Use of Operating Metrics

Primaris uses certain operating metrics to monitor and measure the operational performance of its portfolio. Operating metrics in this news release include, among others, weighted average net rent per occupied square foot, weighted average spread on renewing rents, liquidity, same stores sales productivity and same stores sales productivity growth. These operating metrics, which may constitute supplementary financial measures as defined in NI 52-112, are not derived from directly comparable measures contained in the Financial Statements but may be used by management and disclosed on a periodic basis to depict the historical or future expected operating performance of the Trust's portfolio. For an explanation of the composition of weighted average net rent per occupied square foot, see Section 8.2, "Weighted Average Net Rent" of the MD&A. For an explanation of weighted average spread on renewing rents, see Section 8.3, "Leasing Activity" of the MD&A. For an explanation of liquidity, see Section 10.2, "Liquidity and Unencumbered Assets" of the MD&A. For an explanation of the composition of same stores sales productivity, see Section 8.4, "Tenant Sales" of the MD&A. These supplementary financial measures are denoted in this news release by the suffix “*”.

Primaris also uses certain non-financial operating metrics to describe its portfolio and portfolio operation performance. Non-financial operating metrics in this news release include, among others, number of investment properties, store count, GLA, in-place occupancy, committed occupancy, long-term in-place occupancy, and weighted average lease term. For the relationship of in-place occupancy to committed occupancy and to long-term in-place occupancy, see Section 8.1, "Occupancy" of the MD&A. For greater certainty, the portfolio operating metrics in the MD&A include only the Trust's proportionate ownership of the 6 properties held in co-ownerships (see Section 7.2, "Co-ownership Arrangements" of the MD&A).

Reconciliations of Non-GAAP Measures

The following table reconciles NOI** and Cash NOI** to rental revenue and property operating costs as presented in the Financial Statements.

The following tables are a further analysis of Cash NOI** above.

The following table illustrates the reconciliation of net income, as determined in accordance with GAAP, to FFO**.

The following table illustrates the reconciliation of FFO** to AFFO**.

The following table illustrates the calculation of NAV** per unit outstanding and Total Debt** to Total Assets**.

The following table illustrates the calculation of Average Net Debt** to Adjusted EBITDA**, Interest Coverage** and Debt Service Coverage** ratios.

The following table illustrates the reconciliation of net income (loss) to Adjusted EBITDA**.

The following tables illustrate Adjusted EBITDA** for the rolling four-quarters ended June 30, 2026 and 2025.

The following tables illustrate Average Net Debt** for the periods ended June 30, 2026 and 2025 based on the average of the Net Debt** at the beginning of the period and each quarter end during the period included in the calculation of Adjusted EBITDA**.

The following tables illustrate interest expense, for the calculation of the Interest Coverage** and Debt Service Coverage** ratios for the rolling four-quarters ended June 30, 2026 and 2025.

The following tables illustrate principal repayments, for the calculation of the Debt Service Coverage** ratio, for the rolling four-quarters ended June 30, 2026 and 2025.

View source version on businesswire.com: https://www.businesswire.com/news/home/20260729633075/en/

Contacts:

Alex Avery
Chief Executive Officer
416-642-7837
aavery@primarisreit.com

Rags Davloor
Chief Financial Officer
416-645-3716
rdavloor@primarisreit.com

Claire Mahaney
VP, Investor Relations
& Sustainability
647-949-3093
cmahaney@primarisreit.com

Timothy Pire
Chair of the Board
chair@primarisreit.com

Source: Primaris Real Estate Investment Trust