Primaris REIT Announces Strong Q4/24 and Full Year 2024 Results

Business Wire

Thu, Feb 13, 2025, 3:38 PM 27 min read

$143.2 million total rental revenue;
+9.1% Same Properties Cash Net Operating Income** ("Cash NOI**") growth;
+9.5% Same Properties shopping centres Cash NOI** growth;
95.6% committed occupancy, 94.5% in-place occupancy, and 90.4% long-term occupancy;
+5.3% weighted average spread on renewing rents across 446,000 square feet;
+14.5% Funds from Operations** ("FFO**") per average diluted unit growth to $0.460;
48.9% FFO Payout Ratio**;
$4.3 billion total assets;
5.8x Average Net Debt** to Adjusted EBITDA**;
$589.8 million in liquidity;
$3.6 billion in unencumbered assets; and
$21.55 Net Asset Value** ("NAV**") per unit outstanding.

Annual Financial and Operating Results Highlights

+4.5% Same Properties Cash NOI** growth;
+4.8% weighted average spread on renewing rents across 1,246,000 square feet;
$705 same stores sales productivity;
+6.5% FFO** per average diluted unit growth to $1.690; and
52.4% FFO Payout Ratio**.

"Our shopping centre portfolio performed very well in 2024, with NOI growth coming from strong rental revenue growth, rising occupancy, and falling non-recoverable expenses," said Patrick Sullivan, President and Chief Operating Officer. "Over the last four months, Primaris has acquired approximately $910 million of dominant enclosed shopping centres, and our team is doing an excellent job integrating these assets into our national, full-service platform. Primaris is very quickly moving towards our ambition of becoming the first call for retailers looking to grow and expand their footprint in Canada."

Chief Financial Officer, Rags Davloor added, "Primaris' low leverage balance sheet, a key pillar to our strategy, is a critical enabler to our acquisition strategy. We are well on our way to achieving our three year target of acquiring over $1 billion in assets, while maintaining industry leading leverage metrics. With unencumbered assets of $3.6 billion and no unfunded debt maturing until 2027, we have reduced refinancing risk, with significant access to liquidity. Our commitment to maintaining an extremely well capitalized balance sheet positions Primaris as a highly credible transaction counterparty, at a time when many other groups are finding access to capital, and particularly financing, challenging."

"We are very pleased with our 2024 results, driven by outperformance in same property NOI growth, and FFO per unit growth," said Alex Avery, Chief Executive Officer. "With the acquisition of Oshawa Centre and a 50% interest in Southgate Centre, we are increasing our relevance with retailers and building on Primaris’ profile as an attractive buyer of large, high-quality assets. Consistent with prior acquisitions, these additions to our portfolio are designed to deliver higher internal growth, driving NAV per unit growth, FFO per unit growth and ultimately distribution per unit growth. As we look forward to 2025 and beyond, we see a long runway of opportunity embedded within our existing portfolio, and a variety of acquisition opportunities that can enhance our value proposition with retailers, and our total return to unitholders. We are well positioned to capitalize on these opportunities with the right team and platform, and the right financial model for the road ahead."

Business Update Highlights

On October 1, 2024 acquired Les Galeries de la Capitale in Quebec City, Quebec;
In December 2024, Primaris exercised the option to extend the maturity of its $600 million unsecured syndicated revolving credit facility by one-year to January 4, 2028;
On December 13, 2024, Primaris sold Edinburgh Market Place, in Guelph, Ontario, an open air, grocery anchored property for cash consideration of $11.4 million and the assumption of $20.1 million mortgage;
On January 31, 2025, acquired a 50% co-ownership interest in Southgate Centre in Edmonton, Alberta and a 100% interest in Oshawa Centre in Oshawa, Ontario for total consideration of $585.0 million;
Waived conditions on the disposal of Sherwood Park Mall, Sherwood Park Professional Centre and a parcel of excess land for cash proceeds of $107.0 million, which is expected to closed February 28, 2025 subject to customary closing conditions;
Entered into new secured debt on Place d'Orleans in Orleans, Ontario replacing the debt that matured in August 2024;
Reported total NCIB activity since inception of 10,149,300 Trust Units repurchased at an average price of $13.91, or a discount to NAV** per unit of approximately 35.5%; and
Published second annual ESG report.

Guidance: Disciplined capital allocation is a key pillar to Primaris' strategy. To this end, Primaris established targets for managing the Trust's financial condition (see Section 3, "Business Overview and Strategy" in the MD&A). In addition to its established targets, Primaris provided guidance for the full year of 2025 as follows:

(unaudited)	2025 Guidance	Additional Notes	MD&A Section Reference
Occupancy	Increase of 0.8% to 1.0%		Section 8.1, "Occupancy"
Contractual rent steps in rental revenue	$3.4 to $3.8 million		Section 9.1, "Components of Net Income (Loss)"
Straight-line rent adjustment in rental revenue	$6.8 to $7.2 million		Section 9.1, "Components of Net Income (Loss)"
Same Properties Cash Net Operating Income** growth	3.0% to 4.0%	Same Properties includes 35 properties, excludes Northland (under redevelopment) and the acquisitions of Galeries de la Capitale, Oshawa Centre and Southgate Centre	Section 9.1, "Components of Net Income (Loss)"
Cash NOI**	$318 - $323 million	Includes the impact of the January 31, 2025 acquisitions and approximately $300 million of dispositions throughout the year	Section 9.1, "Components of Net Income (Loss)"
General and administrative expenses	$36 to $38 million		Section 9.1, "Components of Net Income (Loss)"
Operating capital expenditures	Recoverable Capital $18 to $20 million Leasing Capital $20 to $24 million		Section 8.7, "Operating Capital Expenditures "
Redevelopment capital expenditures	$48 to $50 million	Primarily attributable to Devonshire Mall and Northland	Section 7.4, "Redevelopment and Development"
Funds from Operations** per unit¹fully diluted	$1.70 to $1.75 per unit fully diluted	Includes the impact of the January 31, 2025 acquisitions and approximately $300 million of dispositions throughout the year	Section 9.2, "FFO and AFFO"
** Denotes a non-GAAP measure. See Section 1, "Basis of Presentation" – "Use of Non-GAAP Measures" and Section 12, "Non-GAAP Measures" in the MD&A.
¹ Units outstanding and weighted average units outstanding assumes the exchange of Convertible Preferred LP Units for Trust Units. See Section 10.6, "Unit Equity and Distributions" in the MD&A.

On September 24, 2024, Primaris released targets for the period ending December 31, 2027. These targets are not guidance, but are an outlook based on the execution of Primaris' strategic pillars.

(unaudited)	3 Year Targets	Progress to Date	Additional Notes	MD&A Section Reference
In-place Occupancy	96.0%		In-place occupancy was 92.4% at December 31, 2023 In-place occupancy was 94.5% at December 31, 2024	Section 8.1, "Occupancy"
Annual Same Properties Cash NOI** growth	3% - 4%		Growth for the year ended December 31, 2023 was 5.4% Growth for the year ended December 31, 2024 was 4.5%	Section 9.1, "Components of Net Income (Loss)"
Acquisitions	> $1 billion	$910 million	October 1, 2024 - Les Galeries de la Capitale January 31, 2025 - Oshawa Centre and Southgate Centre	Section 7.3, "Transactions"
Dispositions	> $500 million	$138 million	December 13, 2024 - Edinburgh Market Place February 28, 2025 - Sherwood Park Mall and Professional Centre²	Section 7.3, "Transactions"
Annual FFO** per unit¹ growth (fully diluted)	4.0% to 6.0%		Growth for the year ended December 31, 2023 was 0.5% Growth for the year ended December 31, 2024 was 6.4%	Section 9.2, "FFO and AFFO"
Annual Distribution Growth	2% - 4%		In November 2022 announced a 2.5% increase In November 2023 announced a 2.4% increase In November 2024 announced a 2.4% increase	Section 10.6, "Unit Equity and Distributions"
** Denotes a non-GAAP measure. See Section 1, "Basis of Presentation" – "Use of Non-GAAP Measures" and Section 12, "Non-GAAP Measures".
¹ Per weighted average units outstanding calculated on a diluted basis, assuming the exchange of Convertible Preferred LP Units for Trust Units. See Section 10.6, "Unit Equity and Distributions".
² Closing subject to customary closing conditions.

Readers are cautioned that there is a significant risk that actual results for the year ending December 31, 2025 and the performance against the December 2027 targets will vary from the financial outlook statements provided in this news release and that such variations may be material. See Section 2, "Forward-Looking Statements and Financial Outlook" for further cautions on material factors, assumptions, risks and uncertainties that could impact the financial outlook statements.

Select Financial and Operational Metrics

As at or for the three months ended December 31, (in '000s of Canadian dollars unless otherwise indicated) (unaudited)	2024		2023		Change

Number of investment properties		37		39		(2)
Gross leasable area (in millions of square feet)		13.3		12.5		0.8
Long-term in-place occupancy		90.4 %		89.0 %		1.4 %
In-place occupancy		94.5 %		92.4 %		2.1 %
Committed occupancy		95.6 %		94.2 %		1.4 %
Weighted average net rent per occupied square foot¹	$	25.28	$	24.15	$	1.13
Weighted average lease term (in years)		4.2		4.3		(0.1)
Same stores sales productivity¹	$	640	$	613	$	27
Total assets	$	4,267,432	$	3,899,634	$	367,798
Total liabilities	$	2,106,483	$	1,795,707	$	310,776
Total rental revenue	$	143,161	$	113,810	$	29,351
Cash flow from (used in) operating activities	$	72,519	$	56,020	$	16,499
Distributions per Trust Unit	$	0.212	$	0.207	$	0.005
Cash Net Operating Income** ("Cash NOI")	$	80,232	$	63,509	$	16,723
Same Properties² Cash NOI** growth³		9.1 %		5.7 %		—
Net income (loss)	$	22,164	$	13,853	$	8,311
Net income (loss) per unit⁴	$	0.199	$	0.131	$	0.068
Funds from Operations** ("FFO") per unit⁴- average diluted	$	0.460	$	0.402	$	0.058
FFO** per unit growth		14.5 %		— %		— %
FFO Payout Ratio**		48.9 %		52.0 %		(3.1) %
Adjusted Funds from Operations** ("AFFO") per unit⁴ - average diluted	$	0.295	$	0.249	$	0.046
AFFO** per unit growth		18.6 %		— %		— %
AFFO Payout Ratio**		76.3 %		83.9 %		(7.6) %
Weighted average units outstanding⁴ - diluted (in thousands)		113,055		102,659		10,396
Net Asset Value** ("NAV") per unit outstanding⁴	$	21.55	$	21.54	$	0.01
Average Net Debt to Adjusted EBITDA	5.8x		5.6x		0.2x
Interest Coverage**⁵	3.0x		3.6x		(0.6)x
Liquidity	$	589,774	$	654,323	$	(64,549)
Unencumbered assets	$	3,646,922	$	3,362,901	$	284,021
Unencumbered assets to unsecured debt	2.5x		2.8x		(0.3x)
Secured debt to Total Debt**		14.7 %		19.7 %		(5.0) %
Total Debt to Total Assets⁵		40.3 %		38.3 %		2.0 %
Fixed rate debt as a percent of Total Debt**		98.0 %		100.0 %		(2.0) %
Weighted average term to debt maturity - Total Debt** (in years)		4.0		3.6		0.4
Weighted average interest rate of Total Debt**		5.28 %		5.11 %		0.17 %
** Denotes a non-GAAP measure. See Section 1, "Basis of Presentation" – "Use of Non-GAAP Measures" and Section 12, "Non-GAAP Measures" in the MD&A.
¹ Supplementary financial measure, see Section 1, "Basis of Presentation" - "Use of Operating Metrics" in the MD&A.
² Properties owned throughout the entire 24 months ended December 31, 2024, excluding properties under development or major redevelopment, are referred to as "Same Properties".
³ Prior period amounts not restated for current period property categories.
⁴ Units outstanding and weighted average units outstanding assumes the exchange of Convertible Preferred LP Units for Trust Units. See Section 10.6, "Unit Equity and Distributions" in the MD&A.
⁵ Calculated on the basis described in the trust indenture and supplemental indentures that govern the Trust's senior unsecured debentures (collectively, the "Trust Indentures"). See Section 10.4, "Capital Structure" in the MD&A.

Operating Results

The below table compares the composition of FFO** and AFFO** and calculates the drivers of the changes for the three months ended December 31, 2024 as compared to the same period in 2023.

For the three months ended December 31, (in '000s of Canadian dollars except per unit amounts) (unaudited)	2024						2023						Change
	Contribution			per unit¹			Contribution			per unit¹			Contribution			per unit¹

NOI** from:
Same Properties²	$	60,439		$	0.535		$	54,936		$	0.535		$	5,503		$	0.054
Acquisitions		19,729			0.175			7,052			0.069			12,677			0.123
Dispositions		551			0.005			1,848			0.018			(1,297	)		(0.013	)
Property under redevelopment		1,954			0.017			1,576			0.015			378			0.004
Interest and other income		2,426			0.021			2,263			0.022			163			0.002
Net interest and other financing charges (excluding distributions on Convertible Preferred LP Units)		(23,658	)		(0.209	)		(17,687	)		(0.172	)		(5,971	)		(0.058	)
General and administrative expenses (net of internal costs for leasing activity)		(9,262	)		(0.082	)		(6,240	)		(0.061	)		(3,022	)		(0.029	)
Impairment of long-term asset		—			—			(2,115	)		(0.021	)		2,115			0.021
Amortization		(217	)		(0.002	)		(398	)		(0.003	)		181			0.002
Impact from variance of units outstanding		—			—			—			—			—			(0.047	)
FFO and FFO per unit - average diluted	$	51,962		$	0.460		$	41,235		$	0.402		$	10,727		$	0.058
FFO per unit growth**					14.5	%
FFO*	$	51,962		$	0.460		$	41,235		$	0.402		$	10,727		$	0.104
Internal expenses for leases		(2,530	)		(0.022	)		(2,331	)		(0.023	)		(199	)		(0.002	)
Straight-line rent		(2,104	)		(0.019	)		(1,509	)		(0.015	)		(595	)		(0.006	)
Recoverable and non-recoverable costs		(7,551	)		(0.068	)		(6,984	)		(0.068	)		(567	)		(0.006	)
Tenant allowances and leasing costs		(6,378	)		(0.056	)		(4,832	)		(0.047	)		(1,546	)		(0.015	)
Impact from variance of units outstanding		—			—			—			—			—			(0.029	)
AFFO and AFFO per unit - average diluted	$	33,399		$	0.295		$	25,579		$	0.249		$	7,820		$	0.046
AFFO per unit growth**					18.6	%
** Denotes a non-GAAP measure. See Section 1, "Basis of Presentation" – "Use of Non-GAAP Measures" and Section 12, "Non-GAAP Measures" in the MD&A.
¹ Per weighted average diluted unit. Weighted average units outstanding assumes the exchange of Convertible Preferred LP Units for Trust Units. See Section 10.6, "Unit Equity and Distributions" of the MD&A.
²Properties owned throughout the entire 24 months ended December 31, 2024, excluding properties under development or major redevelopment, are referred to as "Same Properties". Per unit calculations separate the impact of change in contribution from the change in the weighted average diluted units outstanding.

FFO** for the three months ended December 31, 2024 was $0.058 per unit, or 14.5%, higher than the same period of the prior year. NOI** from Same Properties increased $0.054 per unit and NOI** from Acquisitions increased $0.123 per unit.

In the fourth quarter of 2023, Primaris incurred a charge of $2.1 million, or $0.021 per unit, for the impairment of a right of use asset as a result of subletting a portion of its excess head office space. The sublease was effective November 1, 2023 for a term of 12 years.

Same Properties Cash NOI** for the three month ended December 31, 2024 was $4.9 million, or 9.1%, higher than the same period of the prior year. Cash NOI** from Same Properties shopping centres increased $4.9 million, or 9.5%, over the same period of the prior year. The increase in the Same Properties shopping centres' Cash NOI** was primarily driven by higher revenues from base rent and net operating cost recoveries, partially offset by a decline in percentage rent in lieu of base rent. Long-term leases typically include contractual rents steps. In 2024, the Same Property shopping centres earned incremental base rent of $0.5 million from these contractual increases.

In 2024 revenue from recovery of prior years' property taxes was $2.1 million lower contribution than 2023. Bad debt expense for the Same Properties in the current period was $0.8 million compared to $0.5 million in the same period of the prior year. Excluding the contribution from the recovery of property taxes from prior years and the change in bad debt expense, the Cash NOI** growth for only the Same Properties shopping centres would have been 5.8% for the year ended December 31, 2024

Completed redevelopment projects contributed $2.5 million, during the year, incremental rent to the portfolio (see Section 7.4, "Redevelopment and Development" of the MD&A).

Occupancy and Leasing Results

Primaris’ leasing activities are focused on driving value by actively managing the tenant and merchandising mix at its investment properties. In-place occupancy increased 2.1% from December 31, 2023 to 94.5% at December 31, 2024. Fourth quarter occupancy is typically higher due to seasonal tenants.

	December 31, 2024	December 31, 2023

Long-term in-place occupancy	90.4 %	89.0 %
Add: Short-term leases¹	4.1 %	3.4 %
In-place occupancy	94.5 %	92.4 %
Add: Committed leases²	1.1 %	1.8 %
Committed occupancy	95.6 %	94.2 %
¹ Leases with an original term of less than one year.
² Executed leases with future commencement dates.

In the quarter, Primaris completed 137 leasing deals totaling 0.6 million square feet. The weighted average spread on renewing rents (for the 87 leases renewed in the quarter) was 5.3% (5.8% for commercial retail unit renewals and 2.6% for large format renewals). Included in the leasing activity for the quarter were 19 leases that were for a lease term of less than one year, or for percentage rent in lieu of base rent. While these lease structures have always been a tool to manage tenant relocations and the timing of development plans, during the pandemic, leases structured as percentage rent in lieu of base rent were more prevalent to assist tenants and to maintain occupancy rates. As these leases mature, management anticipates moving tenants back to traditional lease structures. At December 31, 2024, percentage rent in lieu of base rent leases were in place for 0.6 million square feet of GLA, or 3.1% of in-place leases and had a weighted average lease term of approximately 2.7 years.

Percentage Rent in Lieu of Base Rent Leases
As at	Number of Leases	Portion of Leases by Count¹
December 31, 2024	92	3.1 %
December 31, 2023	122	4.8 %
December 31, 2022	169	7.7 %
March 31, 2022	184	8.5 %
¹ Lease count excludes short term leases.

Robust Liquidity and Differentiated Financial Model

Primaris’ differentiated financial model is core to its overall strategy, providing a best-in-class capital structure upon which to build the business, providing on-going financial stability and strength. The following table summarizes key metrics relating to Primaris' unencumbered assets and unsecured debt.

($ thousands) (unaudited) As at	Target Ratio	December 31, 2024		December 31, 2023		Change

Unencumbered assets - number			31		33		(2)
Unencumbered assets - value		$	3,646,922	$	3,362,901	$	284,021
Unencumbered assets as a percentage of the investment properties			89.7 %		88.8 %		0.9 %
Secured debt to Total Debt**	<40%		14.7 %		19.7 %		(5.0) %
Unsecured Debt		$	1,468,120	$	1,200,000	$	268,120
Unencumbered assets to unsecured debt		2.5x		2.8x		(0.3)x
Unencumbered assets in excess of unsecured debt		$	2,178,802	$	2,162,901	$	15,901
Percent of Cash NOI** generated by unencumbered assets			86.1 %		85.4 %		0.7 %
** Denotes a non-GAAP measure. See Section 1, "Basis of Presentation" – "Use of Non-GAAP Measures" and Section 12, "Non-GAAP Measures" in the MD&A.

In December 2024, Primaris exercised the option to extend the maturity of its $600 million unsecured syndicated revolving credit facility by one-year to January 4, 2028.

In the fourth quarter of 2024, Primaris entered into new secured debt on Place d'Orleans replacing the debt that matured in August 2024.

Liquidity at quarter end was $589.8 million, or 34% of Total Debt**.

Primaris' NAV** per unit outstanding at quarter end was $21.55.

Subsequent Events

Subsequent to December 31, 2024, Primaris:

On January 31, 2025, Primaris acquired a 50% co-ownership interest in Southgate Centre in Edmonton, Alberta and a 100% interest in Oshawa Centre in Oshawa, Ontario for aggregate consideration of:

$335.0 million of cash (before disposition costs);
$75.0 million of Trust Units, or 3,437,214 Units; and
$175.0 million of 6.25% Convertible Preferred LP Units in a newly formed subsidiary limited partnership, which exchange into 8,020,165 Trust Units.

Waived conditions on the disposal of Sherwood Park Mall, Sherwood Park Professional Centre and a parcel of excess land for cash proceeds of $107.0 million, before disposition costs, which is expected to closed February 28, 2025 subject to customary closing conditions.

Purchased for cancellation an additional 320,000 Units under the ASPP for consideration of $4.8 million as of February 13, 2025, for total NCIB purchases since inception of 10,149,300 Units at an average price of $13.91, or a discount to NAV** of approximately 35.5%.

Conference Call and Webcast:

Date:		Friday, February 14, 2025, at 10:00 a.m. (ET)
Dial:		1-833-950-0062
Passcode:		647384
Link:		Please go to the Investor Relations section on Primaris’ website or click here.

The call will be accessible for replay until February 21, 2025, by dialing 1-866-813-9403 with access code 171785, or on the Investor Relations section of the website.

About Primaris Real Estate Investment Trust

Primaris is Canada’s only enclosed shopping centre focused REIT, with ownership interests primarily in leading enclosed shopping centres located in growing Canadian markets. The proforma portfolio totals 15.0 million square feet valued at approximately $4.6 billion at Primaris’ share. Economies of scale are achieved through its fully internal, vertically integrated, full-service national management platform. Primaris is very well-capitalized and is exceptionally well positioned to take advantage of market opportunities at an extraordinary moment in the evolution of the Canadian retail property landscape.

Forward-Looking Statements and Financial Outlook

Certain statements included in this news release constitute ‘‘forward-looking information’’ or "forward-looking statements" within the meaning of applicable securities laws. The words "will", "expects", "plans", "estimates", "intends" and similar expressions are often intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. Specific forward-looking statements made or implied in this news release include but are not limited to statements regarding: growth opportunities, estimated annual growth of Same Properties Cash NOI**, expected future distributions, the Trust’s development activities, expected benefits from the Trust's normal course issuer bid activity, occupancy improvement, increasing rental rates, future acquisition and disposition activity, the Trust’s targets for managing its financial condition, the recovery of tenant sales, and the movement of tenants back to traditional lease structures. Forward-looking statements are provided for the purpose of presenting information about management’s current expectations and plans relating to the future and readers are cautioned that such statements may not be appropriate for other purposes. These statements are not guarantees of future performance and are based on estimates and assumptions that are inherently subject to risks and uncertainties. Primaris cautions that although it is believed that the assumptions are reasonable in the circumstances, actual results, performance or achievements of Primaris may differ materially from the expectations set out in the forward-looking statements. Material risk factors and assumptions include those set out in the MD&A which is available on SEDAR+, and in Primaris’ other materials filed with the Canadian securities regulatory authorities from time to time. Given these risks, undue reliance should not be placed on these forward-looking statements, which apply only as of their dates. Other than as specifically required by law, Primaris undertakes no obligation to update any forward-looking statements to reflect new information, subsequent or otherwise.

Readers are cautioned that there is a significant risk that actual results for the year ending December 31, 2025 will vary from the financial outlook statements provided in this news release and that such variations may be material.

Certain forward-looking information included in this news release may also be considered "financial outlook" for purposes of applicable securities laws. Financial outlook about the Trust’s prospective results of operations including, without limitation, anticipated occupancy, anticipated FFO** per unit, anticipated same properties Cash NOI** growth, impact on rental revenue of contractual rent-steps, anticipated general and administrative expenses, and anticipated operating capital expenditures, anticipated redevelopment expenditures, anticipated straight-line rent adjustment in rental revenue and the Trust's December 2027 targets for a number of key metrics including in-place occupancy, annual same properties Cash NOI** growth, acquisition and disposition activity, annual FFO** per unit growth and annual distribution growth, is subject to the same assumptions, risk factors, limitations and qualifications as set forth in the MD&A and in the Trust's annual information form. The Trust and management believe that such financial outlook has been prepared on a reasonable basis, reflecting management’s best estimates and judgments. However, because this information is subjective and subject to numerous risks, it should not be relied on as necessarily indicative of future results. Financial outlook contained in this news release was made as of the date of this news release and was provided for the purpose of providing further information about the Trust’s prospective financial performance. Readers are cautioned that the financial outlook contained herein should not be used for purposes other than for which it is disclosed herein.

Readers are also urged to examine the Trust’s materials filed with the Canadian securities regulatory authorities from time to time as they may contain discussions on risks and uncertainties which could cause the actual results and performance of Primaris to differ materially from the forward-looking statements and financial outlook contained in this news release. All forward-looking statements and financial outlook in this news release are qualified by these cautionary statements. These forward-looking statements and financial outlook are made as of February 13, 2025 ,and Primaris, except as required by applicable securities laws, assumes no obligation to update or revise them to reflect new information or the occurrence of future events or circumstances.

Non-GAAP Measures

Information in this news release is a select summary of results. This news release should be read in conjunction with the MD&A and the Trust's consolidated financial statements and the accompanying notes for the three months and years ended December 31, 2024 and 2023 (the "Financial Statements").

The Financial Statements are prepared in accordance with IFRS accounting standards as issued by the IASB, however, in this news release, Primaris also uses a number of measures which do not have a standardized meaning prescribed under generally accepted accounting principles ("GAAP") in accordance with IFRS. These non-GAAP measures, which are denoted in this news release by the suffix "**", include non-GAAP financial measures and non-GAAP ratios, each as defined in National Instrument 52-112, Non-GAAP and Other Financial Measures Disclosure ("NI 52-112"). None of these non-GAAP measures should be construed as an alternative to financial measures calculated in accordance with GAAP. Furthermore, these non-GAAP measures may not be comparable to similar measures presented by other real estate entities and should not be construed as an alternative to financial measures determined in accordance with IFRS. A definition of each non-GAAP measure used herein and an explanation of management's reasons as to why it believes the measure is useful to investors can be found in the section entitled "Non-GAAP Measures" in the MD&A, which section is incorporated by reference into this news release, and a reconciliation to the most directly comparable financial measure in the Financial Statements, in each case, can be found below. The MD&A is available on the Trust’s profile on SEDAR+ at www.sedarplus.ca.

Use of Operating Metrics

Primaris uses certain operating metrics to monitor and measure the operational performance of its portfolio. Operating metrics in this news release include, among others, weighted average net rent per occupied square foot ("sq. ft."), total commercial retail unit ("CRU") sales volume, same stores sales volume, and same stores sales productivity. These operating metrics, which may constitute supplementary financial measures as defined in NI 52-112, are not derived from directly comparable measures contained in the Financial Statements but may be used by management and disclosed on a periodic basis to depict the historical or future expected operating performance of the Trust's portfolio. For an explanation of the composition of weighted average net rent per occupied square foot see Section 8.2, "Weighted Average Net Rent" in the MD&A. For an explanation of the composition of same store sales productivity, see Section 8.4, "Tenant Sales" in the MD&A.

Primaris also uses certain non-financial operating metrics to describe its portfolio and portfolio operation performance. Non-financial operating metrics in this news release include, among others, number of investment properties, site coverage, store count, gross leasable area ("GLA"), occupied GLA, in-place occupancy, committed occupancy, long-term in-place occupancy, and weighted average lease term. For the relationship of in-place occupancy to committed occupancy and to long-term in-place occupancy see Section 8.1, "Occupancy" in the MD&A. For greater certainty, the portfolio operating metrics in the MD&A include only the Trust's proportionate ownership of the 7 properties held in co-ownerships (see Section 7.2, "Co-ownership Arrangements" in the MD&A).

Reconciliations of Non-GAAP Measures

The following table reconciles NOI** to rental revenue and property operating costs as presented in the Financial Statements.

For the periods ended December 31, ($ thousands) (unaudited)	Three months						Year end
	2024			2023			2024			2023
Rental Revenue	$	143,161		$	113,810		$	501,925		$	410,970
Property operating costs		(60,488	)		(48,398	)		(212,574	)		(177,345	)
Net Operating Income**		82,673			65,412			289,351			233,625
Exclude:
Straight-line rent		(2,104	)		(1,509	)		(7,285	)		(3,456	)
Lease surrender revenue		(337	)		(394	)		(1,560	)		(3,047	)
Cash Net Operating Income**	$	80,232		$	63,509		$	280,506		$	227,122
** Denotes a non-GAAP measure. See Section 1, "Basis of Presentation" – "Use of Non-GAAP Measures" and Section 12, "Non-GAAP Measures" in the MD&A.

The following table is a further analysis of Cash NOI** above.

For the periods ended December 31, ($ thousands) (unaudited)	Three months						Year End
	2024			2023			2024			2023
Same Properties NOI**	$	60,439		$	54,936		$	220,560		$	211,497
Exclude:
Straight-line rent		(1,309	)		(917	)		(3,897	)		(2,616	)
Lease surrender revenue		(312	)		(96	)		(1,290	)		(2,749	)
Same Properties¹ Cash NOI**		58,818			53,923			215,373			206,132
Same Properties Growth		9.1	%					4.5	%
Cash NOI** from:
Acquisitions		19,178			6,893			54,878			10,437
Disposition		551			1,516			4,186			5,858
Property under redevelopment		1,685			1,177			6,069			4,695
Cash NOI**	$	80,232		$	63,509		$	280,506		$	227,122
** Denotes a non-GAAP measure. See Section 1, "Basis of Presentation" – "Use of Non-GAAP Measures" and Section 12, "Non-GAAP Measures" in the MD&A.
¹ Properties owned for the entire 24 months ended December 31, 2024, excluding properties under development or major redevelopment, are referred to as "Same Properties".

The following table illustrates the reconciliation of net income, as determined in accordance with GAAP, to FFO**.

For the periods ended December 31, ($ thousands except per unit amounts) (unaudited)	Three months						Year End
	2024			2023			2024			2023
Net income (loss)	$	22,164		... $	13,853		$	79,473		$	102,271
Reverse:
Distribution on Convertible Preferred LP Units		3,933			1,845			13,158			2,908
Amortization of real estate assets		69			—			69			—
Adjustments to fair value of derivative instruments		—			8,590			1,846			540
Adjustments to fair value of unit-based compensation		(518	)		267			1,312			(901	)
Adjustments to fair value of Convertible Preferred LP Units		(11,264	)		4,842			12,302			5,066
Adjustments to fair value of land held for development		4,000			33,000			4,000			33,000
Adjustments to fair value of income producing properties		31,048			(23,493	)		62,381			7,431
Internal costs for leasing activity¹		2,530			2,331			8,525			8,017
Funds from Operations**	$	51,962		$	41,235		$	183,066		$	158,332
FFO** per unit² - average basic	$	0.464		$	0.405		$	1.708		$	1.602
FFO** per unit² - average diluted	$	0.460		$	0.402		$	1.690		$	1.588
FFO Payout Ratio - Target 45% - 50%**		48.9	%		52.0	%		52.4	%		52.1	%
Distributions declared per Trust Unit	$	0.212		$	0.207		$	0.842		$	0.822
Distributions declared per Convertible Preferred LP Unit		0.013			0.002			0.043			0.005
Total distributions declared per unit³	$	0.225		$	0.209		$	0.885		$	0.827
Weighted average units outstanding² - basic (in thousands)		111,875			101,743			107,166			98,861
Weighted average units outstanding² - diluted (in thousands)		113,055			102,659			108,295			99,714
Number of units outstanding² - end of period (in thousands)		111,614			106,058			111,614			106,058
¹ Costs relating to full-time leasing and legal staff, included in general and administrative expenses, that can be reasonably and directly attributed to signed leases, and that would otherwise be capitalized if incurred from external sources.
² Units outstanding and weighted average units outstanding assumes the exchange of Convertible Preferred LP Units to Trust Units. See Section 10.6, "Unit Equity and Distributions" in the MD&A.
³ Distributions declared per unit used in the FFO* Payout Ratios include distributions declared on Convertible Preferred LP Units at 6% per annum. See Section 10.6, "Unit Equity and Distributions" in the MD&A.
** Denotes a non-GAAP measure. See Section 1, "Basis of Presentation" – "Use of Non-GAAP Measures" and Section 12, "Non-GAAP Measures" in the MD&A.

The following table illustrates the reconciliation of FFO** to AFFO**.

For the periods ended December 31, ($ thousands except per unit amounts) (unaudited)	Three months						Year End
	2024			2023			2024			2023
Funds from Operations**	$	51,962		$	41,235		$	183,066		$	158,332
Reverse:
Internal costs for leasing activity		(2,530	)		(2,331	)		(8,525	)		(8,017	)
Straight-line rent		(2,104	)		(1,509	)		(7,285	)		(3,456	)
Deduct:
Recoverable and non-recoverable costs		(7,551	)		(6,984	)		(19,533	)		(16,222	)
Tenant allowances and external leasing costs		(6,378	)		(4,832	)		(22,415	)		(18,106	)
Adjusted Funds from Operations**	$	33,399		$	25,579		$	125,308		$	112,531
AFFO** per unit¹ - average basic	$	0.299		$	0.251		$	1.169		$	1.138
AFFO** per unit¹ - average diluted	$	0.295		$	0.249		$	1.157		$	1.129
AFFO Payout Ratio**		76.3	%		83.9	%		76.5	%		73.3	%
Distributions declared per Trust Unit	$	0.212		$	0.207		$	0.842		$	0.822
Distributions declared per Convertible Preferred LP Unit		0.013			0.002			0.043			0.005
Total distributions declared per unit²	$	0.225		$	0.209		$	0.885		$	0.827
Weighted average units outstanding¹ - basic (in thousands)		111,875			101,743			107,166			98,861
Weighted average units outstanding¹ - diluted (in thousands)		113,055			102,659			108,295			99,714
Number of units outstanding¹ - end of period (in thousands)		111,614			106,058			111,614			106,058
¹ Units outstanding and weighted average units outstanding assumes the exchange of Convertible Preferred LP Units to Trust Units. See Section 10.6, "Unit Equity and Distributions" in the MD&A.
² Distributions declared per unit used in the AFFO* Payout Ratios include distributions declared on Convertible Preferred LP Units at 6% per annum. See Section 10.6, "Unit Equity and Distributions" in the MD&A.
** Denotes a non-GAAP measure. See Section 1, "Basis of Presentation" – "Use of Non-GAAP Measures" and Section 12, "Non-GAAP Measures" in the MD&A.

The following table illustrates the calculation of NAV** per unit outstanding.

($ thousands except per unit amounts) (unaudited) As at	December 31, 2024			December 31, 2023
NAV** beginning of the period	$	2,284,877		$	2,100,137
Net Income		79,473			102,271
Trust Unit Distributions		(81,690	)		(79,342	)
		2,282,660			2,123,066
Other capital allocation activities
NCIB activity		(21,875	)		(60,635	)
Trust Units issued for Acquisitions - net of costs		36,343			42,667
Convertible Preferred LP Units issued for Acquisitions and adjustments to fair value of Convertible Preferred LP Units		108,642			179,150
Settlement of vested restricted trust units		—			629
NAV** end of the period	$	2,405,770		$	2,284,877
NAV** per unit outstanding	$	21.55		$	21.54
Number of units outstanding¹- end of period (in thousands)		111,614			106,058
** Denotes a non-GAAP measure. See Section 1, "Basis of Presentation" – "Use of Non-GAAP Measures" and Section 12, "Non-GAAP Measures" in the MD&A.
¹ Units outstanding assumes the exchange of Convertible Preferred LP Units to Trust Units. See Section 10.6, "Unit Equity and Distributions" in the MD&A.

The following table illustrates the calculation of Total Debt** to Total Assets**

($ thousands) (unaudited) As at	December 31, 2024			December 31, 2023			Change

Investment properties	$	3,826,635		$	3,695,435		$	131,200
Investment properties classified as held for sale		239,933			89,912			150,021
Cash		14,774			44,323			(29,549	)
Term deposit		100,000			—			100,000
Other assets		86,090			69,964			16,126
Total assets	$	4,267,432		$	3,899,634		$	367,798
Mortgages payable	$	252,023		$	293,803		$	(41,780	)
Senior unsecured debentures		1,433,120			1,000,000			433,120
Unsecured credit facilities		35,000			200,000			(165,000	)
Debt or Total Debt**	$	1,720,143		$	1,493,803		$	226,340
Total Debt to Total Assets¹		40.3	%		38.3	%		2.0	%
** Denotes a non-GAAP measure. See Section 1, "Basis of Presentation" – "Use of Non-GAAP Measures" and Section 12, "Non-GAAP Measures"".
¹ The debt ratio is a non-GAAP ratio calculated on the basis described in the Trust Indentures.

The following table illustrates the calculation of Average Net Debt** to Adjusted EBITDA**, Interest Coverage** and Debt Service Coverage** ratios.

($ thousands) (unaudited) For the years ended December 31,	2024		2023		Change

Adjusted EBITDA**	$	258,003	$	206,242	$	51,761
Average Net Debt**	$	1,487,657	$	1,153,843	$	333,815
Average Net Debt to Adjusted EBITDA³ Target 4.0x - 6.0x	5.8x		5.6x		0.2x
Interest expense¹	$	85,078	$	57,922	$	27,156
Interest Coverage**^2,3	3.0x		3.6x		(0.6)x
Principal repayments	$	5,491	$	6,877	$	(1,386)
Interest expense¹	$	85,078	$	57,922	$	27,156
Debt Service Coverage**	2.8x		3.2x		(0.4)x
** Denotes a non-GAAP measure. See Section 1, "Basis of Presentation" – "Use of Non-GAAP Measures" and Section 12, "Non-GAAP Measures" in the MD&A.
¹ Interest expense includes interest on senior unsecured debentures, mortgages, and unsecured credit facilities. See Section 9.1, "Components of Net Income (Loss)".
² Calculated on the basis described in the Trust Indentures.

The following table illustrates the reconciliation of net income (loss) to Adjusted EBITDA** for the three months and year ended December 31, 2024 and 2023.

($ thousands) (unaudited)	Three months				Year End
For the periods ended December 31,	2024		2023		2024		2023

Net income (loss)	$	22,164	$	13,853	$	79,473	$	102,271
Interest income¹		(1,546)		(775)		(5,457)		(2,143)
Net interest and other financing charges		27,591		19,532		99,174		59,457
Amortization		286		398		1,272		1,521
Adjustments to fair value of derivative instruments		—		8,590		3,546		540
Adjustments to fair value of unit-based compensation		(518)		267		1,312		(901)
Adjustments to fair value of Convertible Preferred LP Units		(11,264)		4,842		12,302		5,066
Adjustments to fair value of land held for development		4,000		33,000		4,000		33,000
Adjustments to fair value of investment properties		31,048		(23,493)		62,381		7,431
Adjusted EBITDA**	$	71,761	$	56,214	$	258,003	$	206,242
** Denotes a non-GAAP measure. See Section 1, "Basis of Presentation" – "Use of Non-GAAP Measures" and Section 12, "Non-GAAP Measures" in the MD&A.
¹Interest income earned on cash balances.

The following tables illustrate Adjusted EBITDA** for the years ended December 31, 2024 and 2023.

($ thousands) (unaudited)	Year ended
For the period	December 31, 2024		Q4 2024	Q3 2024	Q2 2024	Q1 2024
Adjusted EBITDA**	$	258,003	71,761	64,909	62,790	58,543

($ thousands) (unaudited)	Year Ended
For the period	December 31, 2023		Q4 2023	Q3 2023	Q2 2023	Q1 2023
Adjusted EBITDA**	$	206,242	56,214	54,649	48,964	46,415

The following tables illustrate Average Net Debt** for the periods ended December 31, 2024 and 2023 based on the average of the Net Debt** at the beginning of the period and each quarter end during the period included in the calculation of Adjusted EBITDA**.

($ thousands) (unaudited) As at	December 31, 2024			September 30, 2024			June 30, 2024			March 31, 2024			December 31, 2023
Total Debt**	$	1,720,143		$	1,741,434		$	1,528,609		$	1,530,074		$	1,493,803
less: Cash and cash equivalents		(114,774	)		(261,595	)		(80,756	)		(74,328	)		(44,323	)
Net Debt**	$	1,605,369		$	1,479,839		$	1,447,853		$	1,455,746		$	1,449,480
Average Net Debt**	$	1,487,657

($ thousands) (unaudited) As at	December 31, 2023			September 30, 2023			June 30, 2023			March 31, 2023			December 31, 2022
Total Debt**	$	1,493,803		$	1,227,544		$	1,097,270		$	1,098,982		$	1,009,680
less: Cash and cash equivalents		(44,323	)		(1,282	)		(42,206	)		(59,301	)		(10,954	)
Net Debt**	$	1,449,480		$	1,226,262		$	1,055,064		$	1,039,681		$	998,726
Average Net Debt**	$	1,153,843

The following tables illustrate interest expense, for the calculation of the Interest Coverage** and Debt Service Coverage** ratios, for years ended December 31, 2024 and 2023.

($ thousands) (unaudited)	Year ended
For the periods	December 31, 2024		Q4 2024	Q3 2024	Q2 2024	Q1 2024
Interest expense¹	$	85,078	23,436	22,104	20,204	19,334

($ thousands) (unaudited)	Year ended
For the periods	December 31, 2023		Q4 2023	Q3 2023	Q2 2023	Q1 2023
Interest expense¹	$	57,922	17,161	14,911	13,414	12,436
¹ Interest expense includes interest on senior unsecured debentures, mortgages, and unsecured credit facilities. See Section 9.1, "Components of Net Income (Loss)" in the MD&A.

The following tables illustrate principal repayments, for the calculation of the Debt Service Coverage** ratio, for the years ended December 31, 2024 and 2023.

($ thousands) (unaudited)	Year ended
For the periods	December 31, 2024		Q4 2024	Q3 2024	Q2 2024	Q1 2024
Principal repayments	$	5,491	1,149	1,399	1,465	1,478

($ thousands) (unaudited)	Year ended
For the periods	December 31, 2023		Q4 2023	Q3 2023	Q2 2023	Q1 2023
Principal repayments	$	6,877	1,741	1,726	1,712	1,698

View source version on businesswire.com: https://www.businesswire.com/news/home/20250213032622/en/

Contacts

For more information:
TSX: PMZ.UN
www.primarisreit.com
www.sedarplus.ca

Alex Avery
Chief Executive Officer
416-642-7837
aavery@primarisreit.com

Rags Davloor
Chief Financial Officer
416-645-3716
rdavloor@primarisreit.com

Claire Mahaney
VP, Investor Relations & ESG
647-949-3093
cmahaney@primarisreit.com

Timothy Pire
Chair of the Board
chair@primarisreit.com

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