Nexus Industrial REIT Announces Fourth Quarter and Year End 2025 Financial Results

Core Insights - Nexus Industrial REIT has successfully transitioned to a pure-play industrial REIT, focusing on Canada, and has completed two significant development projects that will enhance its portfolio and returns [2][4]. Financial Performance - For Q4 2025, net income was $30.6 million, a decrease from the previous year, primarily due to lower fair value adjustments [7][15]. - Year-to-date net income for 2025 was $59.5 million, down from $90.9 million in 2024, attributed to decreased fair value adjustments and equity accounted investment losses [16]. - NOI for Q4 2025 increased by 2.7% to $33.0 million, driven by growth in Same Property NOI and completed developments [7][17]. - The normalized FFO per unit decreased slightly to $0.186, while normalized AFFO per unit also saw a minor decline to $0.151 [7][10]. Leasing and Occupancy - The company achieved a 2.6% growth in industrial Same Property NOI, despite facing unexpected vacancies from two tenants [3][23]. - The average increase in rents for in-place and expiring leases was approximately 60% [3]. Development and Acquisitions - Nexus completed two development projects adding 440,000 square feet of GLA, expected to yield an unlevered return of 9.4% on development costs [2]. - The REIT acquired two high-quality industrial properties in Montreal for $40.1 million, contributing an annual NOI of $2.6 million [2][7]. Portfolio and Market Position - The REIT's total portfolio consists of 89 properties with a fair value of approximately CAD 2.51 billion and a gross leasable area of 12.4 million square feet [13][29]. - The industrial occupancy rate remained stable at 96% [13]. Future Outlook - For 2026, the REIT anticipates mid-single digit Same Property NOI growth, driven by leasing up vacant spaces and achieving market rents above expiring rents [24]. - The normalized AFFO payout ratio is expected to average below 100% for the full fiscal year in 2026, indicating sustainable distributions [24].