TORONTO, May 11, 2026 (GLOBE NEWSWIRE) -- Nexus Industrial REIT (the "REIT") (TSX:NXR) announced today its results for the first quarter ended March 31, 2026.
"In the first quarter we advanced our journey as Canada's industrial building partner, delivering Normalized AFFO payout ratio(1) of 96.6%, a meaningful improvement over recent quarters and a significant step toward our 2026 guidance of delivering a ratio below 100% for the full year," said Kelly Hanczyk, CEO of Nexus Industrial REIT.
"We also demonstrated the strength of our balance sheet, achieving an investment grade credit rating and completing an inaugural $500 million bond issuance in April, adding financial flexibility, and reducing our cost of capital. This accomplishment marks a new stage in our evolution and is one that I am particularly proud of" concluded Mr. Hanczyk.
First Quarter 2026 Highlights:
Sold an industrial property located in Calgary, AB for a price of $8.5 million.
In-place and committed industrial occupancy rate of 95%, representing a 100 basis point decrease compared to December 31, 2025.
Completed 41,177 sq. ft. of leasing at an average spread of 32% over expiring and in-place rents.
Net income was $32.2 million driven by NOI(1) of $33.8 million and fair value adjustments (gains) of $18.9 million, partially offset by finance expense, general and administrative expenses and loss on disposal of investment properties.
NOI(1) increased by 5.4% versus a year ago to $33.8 million primarily attributed to NOI(1) generated from completed developments and newly acquired industrial properties, despite selling 19 legacy retail, office, and industrial properties in 2025 and one industrial property in the first quarter of 2026.
Industrial Same Property NOI(1) increased 1.0% versus a year ago to $29.8 million.
Normalized FFO(1) per unit decreased $0.005 versus a year ago to $0.182 and Normalized AFFO(1) per unit increased $0.008 versus a year ago to $0.162.
Normalized AFFO payout ratio(1) improved by 7.5% to 96.6% as compared to the same period in the prior year.
Unitholders' equity increased by $21.2 million to $1.1 billion or $15.38 per unit. NAV per unit(1) of $13.29 increased $0.07 or 0.5% versus December 31, 2025.
(1) This is a Non-IFRS Financial Measure. Refer to Non-IFRS Measures for details.
Subsequent events:
On April 14, 2026, the REIT issued $300.0 million principal amount of 4.236% Series A senior unsecured debentures maturing on April 14, 2029 and $200.0 million principal amount of 4.641% Series B senior unsecured debentures maturing on April 14, 2031. Interest on the debentures is payable semi-annually in arrears, on April 14 and October 14 of each year, commencing on October 14, 2026. Net of financing fees, the REIT received $498.5 million and used the net proceeds to pay down existing indebtedness.
On April 17, 2026, the REIT paid off and retired the unsecured term loan facility of $200.0 million (US$145.4 million) and partially paid down the unsecured revolving facility by $292.0 million (US$212.4 million). The REIT unwound the related cross-currency swaps with a notional value of $492.0 million and closed interest rates swaps with a notional value of $317.0 million.
Summary of Results
(In thousands of Canadian dollars, except per unit amounts)
Three months ended March 31,
2026
2025
$
$
FINANCIAL INFORMATION
Operating Results
Property revenues
46,019
44,754
NOI (1)
33,807
32,090
Net income and comprehensive income
32,176
33,151
Adjusted EBITDA (LTM) (1)
121,276
121,151
FFO (1)
17,325
17,043
Normalized FFO (1)
17,714
17,580
AFFO (1)
15,302
14,397
Normalized AFFO (1)
15,691
14,478
Distributions declared (2)
15,160
15,073
Same Property NOI (1)
30,097
30,016
Industrial Same Property NOI (1)
29,783
29,484
Weighted average units outstanding (000s):
Basic (3)
97,069
94,203
Diluted (3)
97,421
94,477
Per unit amounts:
Distributions per unit, basic (2) (3)
0.160
0.160
Distributions per unit, diluted (2) (3)
0.160
0.160
Normalized FFO per unit, basic (1) (3)
0.182
0.187
Normalized FFO per unit, diluted (1) (3)
0.182
0.186
Normalized AFFO per unit, basic (1) (3)
0.162
0.154
Normalized AFFO per unit, diluted (1) (3)
0.161
0.153
AFFO payout ratio (1) (2)
99.1
%
104.7
%
Normalized AFFO payout ratio, basic (1) (2)
96.6
%
104.1
%
Normalized AFFO payout ratio, diluted (1) (2)
96.9
%
104.6
%
Same Property NOI Growth % (1)
0.3
%
5.9
%
Industrial Same Property NOI Growth % (1)
1.0
%
6.6
%
(1) This is a Non-IFRS Financial Measure. Refer to Non-IFRS Measures for details.
(2) Includes distributions payable to holders of Class B LP Units which are accounted for as finance expense in the consolidated financial statements.
(3) Weighted average number of units includes Class B LP Units.
March 31,
December 31,
2026
2025
(In thousands of Canadian dollars, unless stated otherwise)
$
$
PORTFOLIO INFORMATION
Total Portfolio
Number of investment properties (2)
88
89
Investment properties fair value (excludes assets held for sale)
2,520,712
2,506,423
Gross leasable area ("GLA") (in millions of sq. ft.) (at the REIT's ownership interest)
12.3
12.4
Industrial occupancy rate, in-place and committed (year-end) (3)
95
%
96
%
Weighted average lease term ("WALT") (years)
6.9
6.9
Industrial WALT (years)
6.9
6.9
Estimated spread between industrial portfolio market and in-place rents
15.8
%
18.7
%
FINANCING AND CAPITAL INFORMATION
Financing
Net debt (1)
1,328,891
1,307,119
Total Indebtedness Ratio (1)
49.5
%
49.3
%
Net Debt to Adjusted EBITDA (1)
11.0
10.9
Adjusted Net Debt to Adjusted EBITDA (1)
10.5
10.5
Debt service coverage ratio (times)
1.72
1.70
Secured Indebtedness Ratio
21.4
%
22.4
%
Unencumbered investment properties as a percentage of investment properties
50.3
%
49.7
%
Total assets
2,687,057
2,650,360
Cash
17,876
6,111
Capital
Total equity (per consolidated financial statements)
1,104,484
1,083,289
Total equity (including Class B LP Units)
1,290,727
1,282,925
Total number of Units (in thousands) (4)
97,086
97,022
NAV per unit (1)
13.29
13.22
(1) This is a Non-IFRS Financial Measure. Refer to Non-IFRS Measures for details. (2) Includes three properties (four properties - December 31, 2025) classified as assets held for sale, and one property held for development in which the REIT has an 80% interest.(3) Includes committed new leases for future occupancy.(4) Includes Class B LP Units.Net income
Net income for the three months ended March 31, 2026 was $32.2 million or $1.0 million lower as compared to the same period in 2025, primarily due to an decrease in fair value adjustments of investment properties of $6.8 million, a decrease in Class B LP Units fair value adjustments of $5.6 million, higher finance expenses by $0.7 million, lower foreign exchange expenses by $0.7 million, a higher loss on disposal of investment properties of $0.2 million, and a higher general and administrative expense of $0.2 million, partially offset by an increase in fair value adjustments of derivative financial instruments of $11.3 million, a higher NOI of $1.7 million, and a higher Incentive units fair value adjustment of $0.2 million.
Net operating income
NOI for the three months ended March 31, 2026 was $33.8 million or $1.7 million higher as compared to the same period in 2025, which was primarily due to $1.3 million relating to completed developments and expansions, $0.7 million from acquisitions of industrial income producing properties that closed subsequent to March 31, 2025, $0.6 million increase from non-recurring lease terminations and tenant reimbursed capital improvements, and $0.4 million relating to amortization of tenant improvements and leasing costs that was ceased during the three months ended March 31, 2026 as a result of change in application of accounting methodology, partially offset by a lower NOI of $0.6 million relating to straight-line rent adjustments attributed to changes in current lease arrangements, and $0.6 million relating to dispositions completed since Q1 2025.
Fair value adjustment of investment properties
The fair value adjustment (gain) on investment properties for the three months ended March 31, 2026 totaled $2.1 million. The REIT engaged external appraisers to value properties totaling $141.1 million during the quarter. Overall, the fair value gain recorded for the REIT's portfolio primarily consists of a $29.8 million increase resulting from changes in stabilized NOI, partially offset by a $27.4 million decrease due to adjustments to capitalization rates, and a $0.3 million decrease resulting from a fair value adjustment on a disposal during the period.
Outlook
The REIT is focused on delivering total unitholder return through profitable long-term growth, and by pursuing its strategy as a Canada-focused pure-play industrial REIT.
For 2026, the REIT anticipates mid-single digit Same Property NOI(1) growth in its industrial portfolio. The expected Same Property NOI(1) growth is primarily attributed to the lease-up of vacant space, and releasing space at market rents that exceed expiring rents, thereby continuing to benefit from positive spreads between market rental rates and the REIT's in-place rental rates.
In 2026, the REIT expects to benefit from:
the 325,000 sq. ft. expansion project at St. Thomas, ON for an existing tenant that was completed in Q3 2025, which is contributing $4.9 million in annual stabilized NOI(1), representing a contractual going-in yield of 9.0% on total development costs of $55.1 million,
the 115,000 sq. ft. small-bay industrial building that was constructed in Q3 2025 adjacent to an existing building that the REIT owns in Calgary, AB, which, once stabilized, is expected to earn a yield of 11.0% on total development costs of $14.8 million, and
the acquisition of two industrial properties in Montreal and Longueuil, QC in November 2025 totalling 282,721 sq. ft., that are expected to contribute $2.6 million in annual stabilized NOI(1), representing a going-in yield of 6.6% on the purchase price of $40.1 million.
The normalized AFFO payout ratio(1) for the three months ended March 31, 2026 was 96.6%. The REIT believes that the current distributions are sustainable, and anticipates the normalized AFFO payout ratio(1) to average below 100% for the full fiscal year in 2026.
(1) This is a Non-IFRS Financial Measure. Refer to Non-IFRS Measures for details.
Earnings Call
Management of the REIT will host a conference call at 10:00 AM Eastern Standard Time on Tuesday May 12, 2026, to review the financial results and operations.
To participate in the conference call, please dial 1-647-846-8414 or 1-833-752-3601 (toll free in Canada and the US) at least five minutes prior to the start time and ask to join the Nexus Industrial REIT conference call.
A recording of the conference call will be available until June 12, 2026. To access the recording, please dial 1-412-317-0088 or 1-855-669-9658 (toll free in Canada and the US) and enter access code 9157568.
May and June Distributions
The REIT will make a cash distribution in the amount of $0.05333 per unit, representing $0.64 per unit on an annualized basis, payable June 15, 2026, to unitholders of record as of May 29, 2026.
The REIT will also make a cash distribution in the amount of $0.05333 per unit, representing $0.64 per unit on an annualized basis, payable July 15, 2026, to unitholders of record as of June 30, 2026.
Annual Meeting Voting Results
Each of the matters set out in the REIT's management information circular dated March 30, 2026 (the "Circular") for the annual meeting of unitholders held on May 11, 2026 (the "Meeting") was approved by the requisite majority of unitholders, and each of the trustee nominees listed in the Circular was elected as a trustee of the REIT. Voting results for the individual trustees are as follows:
Nominee
Number of Votes For
Percentage of Votes For
Number of Votes Withheld
Percentage of Votes Withheld
Floriana Cipollone
39,117,151
99.605%
155,068
0.395%
Bradley Cutsey
39,094,541
99.548%
