Key Points – Q1 operating performance improved, with net operating income up 5.4% to CAD 33.8 million and normalized AFFO payout ratio falling to 96.6%, the first sub-100% quarter in 10 quarters.
Management said it remains on track to keep the payout ratio below 100% for the full year. – Leasing activity helped offset temporary vacancies, including 41,000 square feet of new leases signed at a 32% average rent lift
Nexus expects to re-lease vacant space over the coming quarters at higher market rents, while maintaining its 2026 outlook for mid-single-digit same-property NOI growth. – The REIT hit two financing milestones: an investment-grade BBB low rating from DBRS and its inaugural CAD 500 million bond issuance. Management said the bonds should lower borrowing costs versus the credit facility and support future growth and debt reduction. Nexus Industrial REIT (TSE:NXR.UN) reported higher first-quarter operating income and said it remains on track to keep its normalized AFFO payout ratio below 100% for the full year, while also highlighting an investment-grade credit rating and its first bond issuance as key milestones.
On the REIT’s first-quarter conference call, Chief Executive Officer Kelly Hanczyk said net operating income rose to CAD 33.8 million, up CAD 1.7 million, or 5.4%, from a year earlier. Normalized funds from operations increased to CAD 17.7 million, and adjusted EBITDA for the last 12 months rose to CAD 121.3 million. Hanczyk said the quarter marked the first time in 10 quarters that Nexus posted a payout ratio below 100%, with a normalized AFFO payout ratio of 96.6%.