Mr. Mitchell Goldhar reports

SMARTCENTRES REAL ESTATE INVESTMENT TRUST RELEASES FIRST QUARTER RESULTS FOR 2023

SmartCentres Real Estate Investment Trust has released its financial and operating results for the quarter ended March 31, 2023.

Operational

• Shopping centre leasing activity remains strong, with industry-leading in-place and committed occupancy rate of 98% as at March 31, 2023 (December 31, 2022 - 98%).
• Executed leases on 3,172,749 sq. ft. consisting of 102,853 sq. ft. of new deals and 3,069,896 sq. ft. of renewals during the three months ended March 31, 2023. Non-anchor tenant renewed at an average rental rate of $22.00 per sq. ft., as compared to $17.42 per sq. ft. for the three months ended March 31, 2022.

Mixed-use Development

• In excess of three million square feet of construction activity is currently underway, principally high rise residential on existing shopping centre sites in Toronto, Montreal, and Ottawa.
• Construction nears completion on the 100% pre-sold Transit City 4 (45 storeys) and 5 (50 storeys) condo towers, representing 1,026 residential units. First occupancy and condo closings for Transit City 4 commenced in March 2023, with 194 units closed generating additional FFO (1) of $3.8 million. Occupancy of the balance of Transit City 4 and 5 will take place over the next two quarters.
• The 458-unit rental project, the Millway, includes 45 rental units in the podium of Transit City 4 and 47 rental units in the podium of Transit City 5. First occupancy of the rental units located in the podium of Transit City 4 took place in February 2023. Initial occupancy of the rental units located in the podium of Transit City 5 is expected in May 2023. The remaining 366 units, located in a 36-storey purpose-built tower, are nearing completion, with initial occupancy expected to commence in late Q2/early Q3.
• Construction nears completion on the 241,000 square feet of industrial space for the 16-acre Phase 1 development in Pickering, with completion expected in Q2 2023. Approximately 53% of the space has been pre-leased with tenants taking possession in April 2023.

Financial

• Same Properties NOI (1) increased by $5.3 million or 4.3% as compared to the same period in 2022, mainly attributable to higher lease-up and step-up rent. FFO per Unit (1) was $0.54 for the three months ended March 31, 2023 (compared to $0.51 for the three months ended March 31, 2022 ).
• The Payout Ratio to AFFO (1) for the three months ended March 31, 2023 was 93.0%, as compared to 96.1% for the same period ended March 31, 2022 .
• Net rental income and other for the quarter increased by $4.1 million or 3.4% as compared to the same period in 2022.
• Net income and comprehensive income per Unit was $0.63 for the three months ended March 31, 2023 ( three months ended March 31, 2022 - $2.06 ). The decrease was primarily driven by unrealized fair value adjustments of certain properties as a result of new density entitlements that were recorded in 2022.
• The Payout Ratio to cash flows provided by operating activities for the three months ended March 31, 2023 was 100.6% , as compared to 80.1% for the three months ended March 31, 2022 .

"We are pleased with to report a strong start to 2023," said Mitchell Goldhar, Executive Chair and CEO of SmartCentres. "Once again, the resiliency of our value-oriented retail portfolio and the strong draw of Walmart and our other anchor tenants resulted in solid customer traffic at our centres and drove a healthy $5.5 million increase in net rental income(1) compared to the first quarter of last year. At 98%, our in-place and committed occupancy rate is industry leading. We expect to continue to deliver strong occupancy levels and solid rental income for the balance of the year."

"In addition to the strength of our core retail business, our mixed-use development business also continues to deliver strong results. We are delighted with the progress we have made on our Transit City 4 and Transit City 5 condominium projects at the Vaughan Metropolitan Centre," said Mr. Goldhar. "During the quarter, we closed on the first 194 units in Transit City 4, resulting in net profits - at the REIT's share - of $4.1 million or $0.02 of FFO per Unit(1). The remaining 832 units at these two towers are expected to close over the balance of the year, primarily in Q2 and Q3."

"During the quarter, we also completed our self-storage development at our Kingspoint Plaza in Brampton. Our previously announced industrial project for Bad Boy Furniture in Pickering is also now complete, although occupancy commenced just after the end of Q1."

"We currently have 10 mixed-use development initiatives that are under construction. Collectively, these projects have an estimated total development cost, at the REIT's share, of $532.5 million, of which $216.6 million is required to complete construction. We remain confident that we have ample liquidity available not only to complete these projects, but also to commence several new initiatives where construction is expected to begin later in the year. These new projects include Phase I of our sold-out Art Walk condominium tower at the VMC, a large retail project in Leaside, and several new self-storage locations."

"Despite a more challenging economic environment for launching new development initiatives, we remain nimble and we are continuing to move forward with a smaller number, but impactful projects," continued Mr. Goldhar. "As always, we are focused on the long term, which includes advancing new entitlements and zoning applications for multiple opportunities within our large network of retail centres. We are confident that the intensification on these strategically-located properties will be highly complementary to our existing retail centres and will deliver strong returns to unitholders for many years to come."

(1) Represents a non-GAAP measure. The Trust's method of calculating non-GAAP measures may differ from other reporting issuers' methods and, accordingly, may not be comparable. For additional information, please see "Non-GAAP Measures" in this Press Release.

Selected Consolidated Operational, Mixed-Use Development and Financial Information

Key consolidated operational, mixed-use development and financial information shown in the table below includes the Trust's proportionate share of equity accounted investments:

Development and Intensification Summary

The following table provides additional details on the Trust's 10 development initiatives that are currently under construction (in order of estimated initial occupancy/closing date):

Conference Call

SmartCentres will hold a conference call on Thursday, May 11, 2023 at 3:00 p.m. (ET). Participating on the call will be members of SmartCentres' senior management.

Investors are invited to access the call by dialing 1-855-353-9183 and then keying in the participant access code 16803#. You will be required to identify yourself and the organization on whose behalf you are participating.

A recording of this call will be made available Thursday, May 11, 2023 beginning at 8:30 p.m. (ET) through to 8:30 p.m. (ET) on Thursday, May 18, 2023. To access the recording, please call 1-855-201-2300, enter the conference access code 16803# and then key in the playback access code 0113265#.

About SmartCentres

SmartCentres Real Estate Investment Trust is one of Canada's largest fully integrated REITs, with a best-in-class portfolio featuring 188 strategically located properties in communities across the country. SmartCentres has approximately $11.7 billion in assets and owns 34.8 million square feet of income producing value-oriented retail and first-class office space with 98.0% in-place and committed occupancy, on 3,500 acres of owned land across Canada.

SmartCentres continues to focus on enhancing the lives of Canadians by planning and developing complete, connected, mixed-use communities on its existing retail properties. The publicly announced $16.0 billion intensification program ($10.8 billion at SmartCentres' share) represents the REIT's current major development focus on which construction is expected to commence within the next five years. This intensification program consists of rental apartments, condos, seniors' residences and hotels, to be developed under the SmartLiving banner, and retail, office, and storage facilities, to be developed under the SmartCentres banner.

SmartCentres' intensification program is expected to produce an additional 55.5 million square feet (40.3 million square feet at SmartCentres' share) of space, 26.6 million square feet (17.9 million square feet at SmartCentres' share) of which has or will commence construction within the next five years. From shopping centres to city centres, SmartCentres is uniquely positioned to reshape the Canadian urban and urban-suburban landscape.

Included in this intensification program is the Trust's share of SmartVMC which, when completed, is expected to include approximately 20.0 million square feet of mixed-use space in Vaughan, Ontario. Final closings of the first three phases of Transit City Condominiums began ahead of budget and ahead of schedule in August 2020 and all 1,741 units, in addition to the 22 townhomes that complete these phases, have now closed. The fourth and fifth sold-out phases representing 1,026 units commenced closing and occupancy in March 2023.

We seek Safe Harbor.