Mr. Mitchell Goldhar reports

SMARTCENTRES REAL ESTATE INVESTMENT TRUST RELEASES THIRD QUARTER RESULTS FOR 2023

SmartCentres Real Estate Investment Trust has released its financial and operating results for the quarter ended Sept. 30, 2023.

"Building on a successful first half of the year, we are pleased to report stronger performances in all areas of the business for Q3," said Mitchell Goldhar, CEO of SmartCentres. "Our core retail portfolio has gone into a higher gear and become more offensive, with even stronger numbers in our centres anchored by Walmart, which drove an increase in net rental income compared to the same quarter of last year. In-place and committed occupancy has increased by 30 basis points from last quarter to 98.5 per cent, continuing our industry leadership. We expect to continue delivering strong occupancy levels and solid rental income for the balance of the year."

"In addition to the strength of our core recurring retail income, our mixed-use development program also continues to grow and deliver strong results. We are delighted with the progress we have made on our Transit City 4 & 5 condominium projects at the Vaughan Metropolitan Centre," said Mr. Goldhar. "During the quarter, we closed on an additional 274 units in Transit City 4 & 5, and the remaining 106 units at these two towers are expected to close by the end of this year."

"We also commenced construction or initial siteworks on four new mixed-use development projects during the quarter. These include the sold-out, 40-storey ArtWalk condominium project at the Vaughan Metropolitan Centre, a new 200,000 square foot flagship Canadian Tire store in the Leaside neighbourhood in Toronto, and two additional multi-level self-storage projects. We are confident that each of these projects will deliver strong financial results to the Trust in the years to come."

2023 Third Quarter Highlights

Operational

• Shopping centre leasing activity continued to strengthen from Q2 2023, with an industry-leading in-place and committed occupancy rate of 98.5 per cent as at September 30, 2023 (June 30, 2023 - 98.2 per cent).
• Executed new leases of 182,682 square feet during the quarter.
• Renewed 84.2 per cent of the 5,083,274 square feet of current year expiries, with average growth in renewed rents of 8.4 per cent (excluding anchors).

Development

• Occupancy and condo closings for Transit City 4 and 5 continued with an additional 274 units closed during the third quarter generating $6.9 million of FFO. The remaining 106 units are expected to take place in Q4 2023.
• The Millway, a 458 rental unit apartments project is nearing completion. Leasing continues to benefit from strong demand and is ahead of budget. As of the end of the quarter, 67 per cent of the 331 completed units were leased. The remaining units are expected to be completed and ready for lease by the end of 2023.
• Siteworks at ArtWalk condominium Phase 1 commenced in September 2023, with all 320 released units sold out and the remaining units expected to be released for sale in Q4 2023.
• The second phase of the purpose-built residential rental project in Laval, comprising 211 units, opened on July 1, 2023, and reached 82 per cent occupancy at the end of Q3 2023. Occupancy for the first phase has reached 99 per cent.
• The Trust, together with its partner, Penguin, has also commenced preliminary siteworks for the 224,000 square foot retail project on Laird Drive in Toronto, that is expected to feature a flagship 200,000 square foot Canadian Tire store together with 24,000 square feet of additional retail space. Canadian Tire is expected to take possession in early 2026.
• The Trust obtained municipal approvals for two self-storage facilities in Stoney Creek and in Toronto (Gilbert Ave), and commenced construction.

Financial

• Same Properties NOI increased by $2.6 million or 1.9 per cent in Q3 2023 as compared to the same period in 2022, which was attributable to lease-up activity and higher rental renewal rates.
• Net rental income for the three months ended September 30, 2023 increased by $2.9 million or 2.3 per cent as compared to the three months ended September 30, 2022, primarily due to lease-up activity, higher rental renewal rates and percentage rents.
• Net income and comprehensive income per Unit was $1.19 (three months ended September 30, 2022 - $0.02). The increase was primarily due to a valuation adjustment in the prior year.
• FFO per Unit was $0.55 for the three months ended September 30, 2023 compared to $0.49 for the three months ended September 30, 2022. The increase was mainly attributable to higher profits from condo closings at Transit City 4 & 5 and higher rental income, partially offset by higher interest costs and a non-cash loss on the total return swap.
• The Payout Ratio to AFFO for the three months ended September 30, 2023 was 96.1 per cent, as compared to 101.6 per cent for the same period ended September 30, 2022, and 87.8 per cent payout ratio to cash flows provided by operating activities for the three months ended September 30, 2023.

Development and Intensification Summary

The following table provides additional details on the Trust's 13 development initiatives that are currently under construction or where initial siteworks have began (in order of estimated initial occupancy/closing date):

Conference Call

Management will hold a conference call on Thursday, November 9, 2023 at 8:00 a.m. (ET).

Interested parties are invited to access the call by dialing 1-888-440-5675 and then keying in the participant access code 2010586#.

A recording of this call will be made available Thursday, November 9, 2023 through to Thursday, November 16, 2023. To access the recording, please call 1-800-770-2030 and enter the conference access code 2010586#.

About SmartCentres

SmartCentres is one of Canada's largest fully integrated REITs, with a best-in-class and growing mixed-use portfolio featuring 191 strategically located properties in communities across the country. SmartCentres has approximately $12.0 billion in assets and owns 35.0 million square feet of income producing value-oriented retail and first-class office properties with 98.5 per cent in place and committed occupancy, on 3,500 acres of owned land across Canada.

We seek Safe Harbor.