Primaris REIT Announces Q2 2026 Results; Reaffirms Guidance

About this update from Primaris Real Estate Investment Trust

TORONTO, July 29, 2026 --( 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 Business Update Highlights "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.

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