CT Real Estate Investment Trust (TSE:CRT.UN) executives highlighted 2025 as a “great year” for the REIT, pointing to portfolio growth, solid leasing fundamentals for retail real estate, and improved leverage metrics despite a higher interest rate environment. Management also outlined an active development pipeline and discussed priorities for future capital deployment during the company’s year-end earnings call.
Portfolio growth and 2025 investment activity
President and CEO Kevin Salsberg said CT REIT deployed approximately CAD 235 million in 2025 and added nearly 900,000 square feet of new retail space, including about 400,000 square feet added in the fourth quarter. He emphasized that the year’s growth came across 13 discrete investments spanning third-party acquisitions, redevelopments, and new builds for both Canadian Tire and third-party tenants.
Development pipeline and Canada Square progress
Senior Vice-President, Real Estate Jodi Shpigel said CT REIT completed several previously announced projects in the fourth quarter, including:
- Six intensification projects, including five expansions of existing Canadian Tire stores in Victoria (B.C.), Winnipeg (Man.), Fergus and Brampton (Ont.), and Donnacona (Que.), plus a third-party pad development in Fort Frances (Ont.).
- Development of a new 172,000 square foot Canadian Tire store in Kelowna (B.C.).
- Redevelopment of a former vacant Canadian Tire store in Lloydminster (Alta.), which was backfilled with a national grocer, a furniture store, and a footwear retailer.
- Acquisition of the freehold interest underlying an existing Canadian Tire ground lease and a multi-tenant commercial retail building in Fort Saskatchewan (Alta.).
Shpigel said fourth-quarter completions represented about CAD 160 million of investment and added more than 400,000 square feet of incremental gross leasable area (GLA). On the question-and-answer portion of the call, management indicated a blended “going-in yield on cost” for what was delivered in the quarter was roughly mid-to-high sixes, while noting the quarter included a mix of project types.
Looking ahead, Shpigel said the development pipeline includes 11 projects at various stages, with four expected to complete in 2026 and the remainder in 2027 and beyond. The pipeline represents a committed investment of approximately CAD 329 million, with CAD 102 million spent to date. CT REIT expects to invest roughly CAD 78 million over the next 12 months to advance these projects. Once completed, the projects are expected to add just over 600,000 square feet of new GLA, with about 95% pre-leased.
Management also provided an update on the Canada Square property tied to Canadian Tire’s long-term head office lease. Salsberg said construction began in Q4 on a project to refurbish the existing 640,000 square foot office complex, with completion anticipated toward the end of 2028. In response to an analyst question, management said the Eglinton Crosstown LRT is now open, but noted that two acres at the northwest corner of the site remain controlled by Crosslinx and the first phase of development cannot begin on those lands until they are relinquished. Management said it does not have a specific timeline for that handover and is currently focused on the office retrofit with Oxford through 2028, while continuing to advance longer-term master planning and zoning efforts.
Leasing: renewals, occupancy, and rental uplifts
Shpigel said CT REIT completed just over 1 million square feet of lease extensions in the fourth quarter, primarily 14 Canadian Tire store lease renewals. For the full year, the REIT completed 30 Canadian Tire store lease extensions and renewed retail leases totaling more than 2 million square feet of GLA.
For 2025, renewals were completed at a weighted average first-year rental uplift of approximately 10.4%. The portfolio’s weighted average lease term was 7.2 years at year-end, while occupancy was 99.5%, up 10 basis points from the prior year.
During Q&A, management discussed what it described as an “improved” retail leasing and renewal market. In response to a question about Canadian Tire renewals, management confirmed the reported uplift related to five-year fixed renewals, and said the change reflects a combination of market conditions and the mix of leases renewed.
Financial results, distributions, and balance sheet
Chief Financial Officer Lesley Gibson said Same-Property NOI (including intensifications) grew 2.0% year-over-year in Q4 and 2.2% for the full year, reflecting contractual rent escalations of about 1.5% per year in many Canadian Tire leases and contributions from intensification projects.
Overall, the REIT reported:
- Net Operating Income up 4.9% in Q4 (about CAD 5.7 million) and up 4.6% for full-year 2025 (over CAD 21 million).
- AFFO per diluted unit of CAD 0.317 in Q4, up 2.9% year-over-year; full-year AFFO per diluted unit up 2.8%.
- FFO per diluted unit of CAD 0.339 in Q4, up 1.5%; full-year FFO per diluted unit up 2.0%.
Gibson said higher NOI drove FFO and AFFO growth, partly offset by higher interest expense. She also noted general and administrative expenses were affected by the timing of non-cash fair value adjustments on unit-based compensation.
Cash distributions paid in Q4 increased 2.5% year-over-year to CAD 0.237 per unit, reflecting a higher monthly distribution rate effective in July 2025. Gibson said CT REIT has increased distributions every year since its 2013 IPO, representing cumulative distribution growth of 45.9% since that time. The AFFO payout ratio was 74.8% in Q4 and 73.5% for the full year.
On leverage and liquidity, Gibson reported the indebtedness ratio improved to 39.8% at year-end from 41.1% at the end of 2024. Total indebtedness to EBITDA (fair value) was 6.77x in 2025, slightly improved from 6.81x a year earlier. The interest coverage ratio was 3.34x in Q4, down from 3.52x, reflecting interest rate resets on certain Class C LP units and higher credit facility utilization, alongside the issuance of CAD 200 million of Series J unsecured debentures in June 2025.
Liquidity at year-end included about CAD 4 million of cash, an essentially undrawn CAD 300 million committed bank credit facility, and a CAD 300 million uncommitted facility with Canadian Tire Corporation, with roughly CAD 104 million available at year-end.
Outlook topics: capital allocation and financing plans
In Q&A, management said there are roughly 10 to 15 Canadian Tire stores that it believes meet CT REIT’s investment criteria for potential vend-ins, though it noted that unit price levels can influence the attractiveness of issuing equity in exchange for assets. Management also said it would prefer to use balance sheet “dry powder” to fund acquisitions and developments, and indicated it was less inclined to use the NCIB at current unit price levels compared to periods when units traded in the low-to-mid CAD 13 range.
On refinancing, Gibson said the company is watching the market and described public debt markets as constructive and active. She said CT REIT is looking to refinance upcoming maturities, including a CAD 200 million debenture, and potentially upsize depending on credit facility draws and funding needs during the year.
About CT Real Estate Investment Trust (TSE:CRT.UN)
CT Real Estate Investment Trust is an unincorporated real estate investment trust that invests in retail properties across Canada. The most significant portion of properties are located in Ontario, followed by Quebec and Western Canada. The trust generates the vast majority of revenue from leasing its properties to Canadian Tire Corporation, which operates the Canadian Tire retail stores. The trust’s portfolio primarily consists of properties anchored by a Canadian Tire retail store, in addition to retail properties not anchored by Canadian Tire, distribution centres, and mixed-use commercial property.
