MISSISSAUGA, ON, July 29, 2026 /CNW/ -- Morguard Real Estate Investment Trust ("the Trust") (TSX: MRT.UN) today is pleased to announce its 2026 Second Quarter Results.

SELECTED FINANCIAL INFORMATION

The table below sets forth selected financial data relating to the Trust's fiscal three and six months ended June 30, 2026, and 2025. This financial data is derived from the Trust's condensed consolidated statements, which are prepared in accordance with IFRS.

CONSOLIDATED OPERATING HIGHLIGHTS

The following is an analysis of net operating income by asset type:

The Trust's retail properties NOI for the six months ended June 30, 2026, was $30.4 million versus $29.6 million for the same period ended 2025, an increase of $0.8 million. The increase was mainly the result of a lower bad debt expense of $0.6 million, coupled with increased basic rents of $0.2 million. These increases were partially offset by higher vacancy costs of $0.4 million.

The Trust's community strip centre portfolio had robust net operating income growth of 7.7% for the quarter and 3.4% for the year-to-date period. These assets operate at close to full occupancy, resulting in good rental growth on lease renewals over the last two years.

The Trust's office properties NOI for the six months ended June 30, 2026, was $20.4 million versus $19.9 million for the same period ended 2025, an increase of $0.5 million. The favourable variance is mainly the result of decreased vacancy costs of $1.2 million, offset by decreased basic rent of $0.9 million, stemming from the downsizing on renewal of major tenants at 111 Dunsmuir in Vancouver, BC and at Standard Life Centre in Ottawa, ON.

The 8.3% decline in year to date single-/dual-tenant office building net operating income is due to the downsizing upon renewal of major tenants at 111 Dunsmuir and at Standard Life Centre. The 32.2% increase in year-to-date multi-tenant office building net operating income is due to improved cash flow at the newly re-tenanted Penn West Plaza, and increased demand for office space across multiple Canadian markets.

The Trust's industrial properties NOI for the six months ended June 30, 2026, was $1.9 million versus $1.8 million for the same period ended 2025, an increase of $0.1 million. The increase is mainly the result of increased basic rent.

Revenue from real estate properties includes contracted rent from tenants along with recoveries of property expenses (including property taxes).

The following is an analysis of revenue from real estate properties by segment: 

The following is an analysis of revenue from real estate properties by revenue type:

Property operating expenses include costs related to interior and exterior maintenance, insurance and utilities.

Property operating expenses for the six months ended June 30, 2026, decreased 0.9% to $37.6 million from $37.9 million for the same period in 2025. This decrease is primarily due to lower bad debt expense compared to 2025.

Net operating income for the six months ended June 30, 2026, increased 2.5% compared to 2025. This increase resulted mainly from lower vacancy costs.

Interest expense for the six months ended June 30, 2026, decreased 2.0% compared to 2025. This decrease is primarily due to lower interest rates on both variable and renewed fixed rate debt.

The Trust records its income producing properties at fair value in accordance with IFRS. These adjustments are a result of the Trust's regular quarterly IFRS fair value process. In accordance with this policy, the following fair value adjustments by segment have been recorded:

Reported net income for the six months ended June 30, 2026, was $8.0 million as compared to a loss of $13.4 million in 2025. This change is due to the change in fair value losses recorded in 2025, as described above.

FUNDS FROM OPERATIONS AND ADJUSTED FUNDS FROM OPERATIONS

The Trust presents FFO and AFFO in accordance with the current definition of the REALPAC.

SPECIFIED FINANCIAL MEASURES

The Trust reports its financial results in accordance with International Financial Reporting Standards ("IFRS"). However, this earnings release also uses specified financial measures that are not defined by IFRS which follow the disclosure requirements established by National Instrument 52-112 Non-GAAP and Other Financial Measures Disclosure. Specified financial measures are categorized as non-GAAP financial measures, non-GAAP ratios, and other financial measures. Additional details on specified financial measures including supplementary financial measures, capital management measures and total segment measures are set out in the Trust's Management's Discussion and Analysis for the period ended June 30, 2026 and available on the Trust's profile on SEDAR+ at www.sedarplus.ca

The following Non-GAAP financial measures do not have any standardized meaning prescribed by IFRS and are not necessarily comparable to similar measures presented by other reporting issuers in similar or different industries. These measures should be considered as supplemental in nature and not as substitutes for related financial information prepared in accordance with IFRS. The Trust's management uses these measures to aid in assessing the Trust's underlying core performance and provides these additional measures so that investors may do the same. Management believes that the non-AAP financial measures, which supplement the IFRS measures, provide readers with a more comprehensive understanding of management's perspective on the Trust's operating results and performance.

FUNDS FROM OPERATIONS ("FFO")

FFO is a non-GAAP measure widely used as a real estate industry standard that supplements net income and evaluates operating performance but is not indicative of funds available to meet the Trust's cash requirements. FFO can assist with comparisons of the operating performance of the Trust's real estate between periods and relative to other real estate entities. FFO is computed by the Trust in accordance with the current definition of the Real Property Association of Canada ("REALPAC") and is defined as net income adjusted for fair value changes on real estate properties and gains/(losses) on the sale of real estate properties. The Trust considers FFO to be a useful measure for reviewing its comparative operating and financial performance.

ADJUSTED FUNDS FROM OPERATIONS ("AFFO")

AFFO is a non-GAAP measure that was developed to be a recurring economic earnings measure for real estate entities. The Trust presents AFFO in accordance with the current definition of the REALPAC. The Trust defines AFFO as FFO adjusted for straight-line rent and productive capacity maintenance expenditures ("PCME"). AFFO should not be interpreted as an indicator of cash generated from operating activities as it does not consider changes in working capital.

FINANCIAL STATEMENTS AND MANAGEMENT'S DISCUSSION AND ANALYSIS

The Trust's Q2 2026 Consolidated Financial Statements and Management's Discussion and Analysis will be made available on the Trust's website at www.morguard.com and have been filed with SEDAR+ at www.sedarplus.ca

About Morguard Real Estate Investment Trust

The Trust is a closed-end real estate investment trust, which owns a diversified portfolio of 45 retail, office and industrial income producing properties in Canada with a book value of $2.2 billion and approximately 8.0 million square feet of leasable space.

SOURCE Morguard Real Estate Investment Trust