Slate Grocery REIT Announces Strong Financial Results for Q3 2024
Slate Grocery REIT (TSX: SGR.U, TSX: SGR.UN), a leading owner and operator of U.S. grocery-anchored real estate, has reported its financial results for the three and nine months ending September 30, 2024.
Blair Welch, Chief Executive Officer of Slate Grocery REIT, commented: “We are pleased to see the positive impact of several strong leasing quarters, resulting in a 6.2% year-over-year increase in same-property net operating income (NOI), including the effects of our redevelopment initiatives. Additionally, our team successfully refinanced our revolving credit facility and term loan, securing favorable interest rates reflective of our high-quality real estate portfolio and strong lender relationships. These strategic moves have strengthened our balance sheet and will support continued performance in the upcoming quarters.”
Key Highlights:
- Same-property NOI grew by 6.2% or $2.4 million year-over-year, driven by strong leasing volumes and attractive spreads, even accounting for completed developments.
- The REIT completed 850,455 square feet of leasing during the quarter, with new leases signed at 24.8% above the previous in-place rents and non-option renewals 14.1% above expiring rents.
- Portfolio occupancy held steady at 94.6% as of the quarter’s end.
- Slate Grocery REIT’s average in-place rent of $12.61 per square foot remains significantly below the market average of $23.58, suggesting potential for continued rent growth.
- Following the quarter’s end, the REIT refinanced $500 million of debt and entered a new $500 million credit facility, comprised of a $275 million revolving credit facility and a $225 million term loan, at interest rates similar to the maturing debt.
- The REIT is also progressing with refinancing $138 million of additional debt, expected to close in Q4 2024.
- With these refinancing initiatives, the REIT anticipates a weighted average interest rate of 4.8%, bolstering financial stability.
- The REIT’s units are currently trading at a 24.5% discount to their Net Asset Value (NAV), presenting an attractive opportunity for investors seeking total return.
Q3 2024 Financial Summary:
- Rental Revenue: $52.3 million, up 3.3% from Q3 2023.
- NOI: $41.9 million, a 4.3% increase compared to the same quarter last year.
- Net Income: $7.2 million, a decrease of 41.4% from the prior year.
- Same-property NOI (3-month period): $40.2 million, up 4.8% year-over-year.
- FFO (Funds from Operations): $17.6 million, a 7.5% increase from Q3 2023.
- AFFO (Adjusted Funds from Operations): $14.3 million, a 9.5% year-over-year increase.
Balance Sheet as of September 30, 2024:
- Total Assets (IFRS): $2.22 billion, a decrease of 0.6% from December 31, 2023.
- Debt (IFRS): $1.16 billion, down 0.4% from the end of 2023.
- Net Asset Value (NAV) per Unit: $13.77, down 1.4% from year-end 2023.
- Portfolio Occupancy: 94.6%, slightly lower than 94.7% at the start of the year.
Conference Call and Webcast:
Slate Grocery REIT will host a live conference call on November 6, 2024, at 9:00 AM ET to discuss the results. To participate, dial (289) 514-5100 or 1 (800) 717-1738. A webcast of the call will also be available at Slate Grocery REIT Webcast.
About Slate Grocery REIT:
Slate Grocery REIT owns and operates a diversified portfolio of grocery-anchored real estate across major U.S. markets, valued at approximately $2.4 billion. The REIT provides unitholders with stable cash flows and long-term growth potential through its resilient portfolio of essential retail properties. For more information, visit slategroceryreit.com.
