Canada's Riocan REIT Q1 revenue rises, reaffirms 2026 guidance

Overview

• Canada retail property owner's Q1 revenue rose yr/yr, Core FFO per unit held steady

• Company achieved record 25.8% blended leasing spreads and 4.7% commercial same property NOI growth

• Company repurchased 2.6 mln units for C$51.4 mln under normal course issuer bid

Outlook

• RioCan reaffirms 2026 Core FFO per unit - diluted guidance of C$1.60 to C$1.62

• Company expects 2026 Commercial Same Property NOI growth of 3.5% to 4.0%

• RioCan projects 2026 portfolio investment spending of C$95 mln to C$115 mln and development spending of C$45 mln to C$55 mln

Result Drivers

• RECORD LEASING SPREADS - Co said Q1 blended leasing spreads reached a record 25.8%, driven by new leasing spreads of 58.5%, highlighting mark-to-market rent increases

• SAME PROPERTY NOI GROWTH - Commercial Same Property NOI grew 4.7% in Q1, which the co attributed to resilient tenant demand and its leasing strategy

• CAPITAL RECYCLING - Co continued to monetize residential assets, with C$1.04 bln of capital repatriation from RioCan Living supporting reinvestment and buybacks

Company press release: ID:nBw5Fm5lRa

Key Details

Analyst Coverage

• The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 8 "strong buy" or "buy", 3 "hold" and no "sell" or "strong sell"

• The average consensus recommendation for the commercial reits peer group is "buy"

• Wall Street's median 12-month price target for RioCan Real Estate Investment Trust is C$22.00, about 3.1% above its May 1 closing price of C$21.34

• The stock recently traded at 13 times the next 12-month earnings vs. a P/E of 12 three months ago

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