Q3 2025 Slate Grocery REIT Earnings Call

November 6, 2025

<unk> third quarter 2025 financial results conference call.

At this time all lines are in listen only mode.

Following the presentation, we will conduct a question and answer session.

If at any time during this call you require immediate assistance. Please press star zero for the operator.

This call is being recorded on Thursday November six 2025.

I would now like to turn the conference over to shipyard Garhwal manager with finances slate grocery Reed. Please go ahead.

Thank you operator, and good morning, everyone. Welcome to the Q3 2025 conference call for <unk>.

Joined this morning by Larry Welch, Chief Executive Officer, Joseph <unk>, Chief Financial Officer, Conor O'brien, Managing director, Alan Gordon Senior Vice President right in line.

Before getting started I would like to remind participants that our discussion today may contain forward looking statements and therefore, we ask you to review the disclaimers regarding forward looking statements as well if not I have first measures both of which can be found in management's discussion and analysis. You can visit play grocery Reed's website to access all of the REIT financial disclosure, including our Q.

3025, Investor update which is available now I will now hand over the call to Blair Welch for opening remarks.

Thank you <unk> and Hello, everyone. We are pleased to report another quarter of strong financial and operating results for slate grocery.

Our team continues to convert resilient denim demand for grocery anchored retail spaces into robust leasing at attractive rental spreads.

<unk> completed over 417000 square feet of total leasing throughout the quarter.

<unk> spreads were completed that 15% above expiring rents and new deals were completed at 35% above comparable average in place rent.

Adjusting for completed Redevelopments same property net operating income increased by $4 3 million or two 7% on a trailing 12 month basis.

Portfolio occupancy remains stable at 94%.

Our portfolio's average in place rent of $12 82 per square foot remains well below the market average of $24 95 per square foot, providing significant runway for continued rent increases.

The REIT has a weighted average interest rate of 5% with over 90% of its debt, having a fixed interest rate on a proportionate basis.

This provides a stable outlook for the near term financing costs.

The weighted average capitalization rate remains well above the weighted average interest rate for outstanding date that allowing the <unk> to maintain positive leverage the.

Reached attractive valuation combined with continued net operating income growth is expected to continue increasing the value of our portfolio over time.

We continue to have strong conviction in the outlook for grocery anchored real estate and the ability of this asset class to perform in today's economic environment.

Consumer spending data shows of the essential goods are expected to remain a top priority for shoppers over the next three months.

Underscoring the stability and resilience of the grocery sector and grocery anchored real estate.

At the same time fundamentals remained favorable with elevated construction costs and tight lending conditions, continuing to constrain new retail development and overall availability.

This dynamic creates a favorable environment for landlords to retain existing tenants and achieved meaningful increases in rents as leases expire.

Against this backdrop, we are seeing focus on operational execution prudent management of our balance sheet and strong relationships with our tenants to position the REIT to deliver sustained growth and lasting value for all unitholders.

Behalf of the slate grocery team and the board I would like to thank the investor community for all their continued confidence and support.

I will now hand, it over for questions.

Thank you.

As a reminder, if you would.

Do you wish to ask an audio question. Please press star one on your telephone keypad. If you wish to withdraw your question you may do so by pressing star one again to cancel.

Once again, please press star one to register a question there'll be a brief pause while questions are being registered.

Yeah.

Our first question comes from the line of Brad Sturges Raymond James Your line is now open.

Hey, good morning.

Good good good quarter, obviously, the organic growth number has been trending where you expected I think your.

Trailing 12 months I think you said you were 3% to 4% is that a level that.

Or do you expect to continue to.

See continue over the course of 2026.

Hey, good morning, Brad Yes. It is.

The moves into it really.

Due to expiring leases when they come on but that sort of 3% to 4% is what we expect going forward.

Okay, and what are you seeing from like a market rent perspective, obviously, you continue to highlight and showcase.

The mark to market available as you're able to.

Bringing in place rents to market, but I guess, what what's happening from a market rent perspective.

Yeah, Great question, I think the easiest way to point to something is weak.

We quote the 'twenty, it's just over $24 per square foot now the CBRE market average that is increasing at the same or maybe above our in place rents. So I would say our rental growth.

It is very strong and the market is also growing so I think thats those are both positive things.

Okay and last question for me just.

Maybe switching gears towards the investment or transaction market any read throughs in terms of pricing youre seeing as it relates to its like groceries.

Underlying NAV or valuation or are there more trade starting to percolate or how should we think about that.

Yes, I would say, we feel very comfortable with our offer us cap raises and I think we've been prudent on that and I think the rest of the market is kind of coming to a place where the.

The execution, where you have to do deals is has moved up I think thats whats that transaction volume has been muted.

So I think I think it's really more.

Situational we were looking at the pipeline of new acquisition opportunities and the one billions and that could be a platform that could be one off deals.

But I think it really speaks to positive leverage and if you you think a slate grocery its balance sheet.

We're around 200 basis points of positive leverage from RFS as cap rate to our weighted average cost of financing and I think that's pretty attractive.

I think if we continue to see that with our peers and where transactions are.

Youll see see that volume pickup.

And then I think the U S market is getting there I think if you look at other international jurisdictions. Europe is also a positive leverage situation I think Canada is getting there, but maybe not there yet, but that's really how we look at the market and the fundamentals of grocery anchored real estate are extremely strong. So if you can if you can buy an asset is performing well and finance it.

Well.

I think that will will show more volume of transactions.

Okay I appreciate that thank you I'll turn it back.

Okay.

Yes.

Thank you. Your next question comes from the line of Golden win half yard at TD Cowen. Your line is now open.

Good morning, everyone.

Just one question from my end.

Nice to see occupancy move up a little bit in Q3.

Could you talk a little bit about your progress on some of the vacancies that you had earlier in the year.

Yes, good morning, Gordon I'll pass it over to the team to talk about specific occupancy, but thanks for the questions.

Yes. This is Alan good morning, we continue to see strong pipeline.

New deals.

Throughout our portfolio, both on junior anchor leasing and small shop leasing.

<unk> continued as you as you've seen continues to do deals in both.

Thanks for the color I'll turn it back.

Thank you.

As a reminder, if you do wish to ask a question. Please press star one on your telephone keypad.

Yeah.

And at this time, we have no further questions I'd like to turn it back over to <unk> for closing remarks.

Thank you everyone for joining the Q3 2025 Conference conference like <unk> have a great day.

Thank you everyone for attending this does conclude today's presentation you may now disconnect.

Okay.

Operator: Good morning, ladies and gentlemen, and welcome to the Slate Grocery REIT Q3 2025 Financial Results Conference Call. At this time, all lines are in listen-only mode. Following the presentation, we will conduct a question-and-answer session. If at any time during this call you require immediate assistance, please press star zero for the operator. This call is being recorded on Thursday, 6 November 2025. I would now like to turn the conference over to Shivi Agarwal, Manager with Finance at Slate Grocery REIT. Please go ahead.

Shivi Aggarwal: Thank you operator. Good morning, everyone. Welcome to the Q3 2025 conference call for Slate Grocery REIT. I'm joined this morning by Blair Welch, Chief Executive Officer, Joe Pleckaitis, Chief Financial Officer, Connor O'Brien, Managing Director, Allen Gordon, Senior Vice President, and Braden Lyons, Vice President. Before getting started, I would like to remind participants that our discussion today may contain forward-looking statements, and therefore we ask you to review the disclaimers regarding forward-looking statements as well as non-IFRS measures, both of which can be found in Management's Discussion and Analysis. You can visit Slate Grocery REIT's website to access all of the REIT's financial disclosure, including our Q3 2025 investor update, which is available now. I will now hand over the call to Blair Welch for opening remarks.

Shivi Agarwal: Thank you operator. Good morning, everyone. Welcome to the Q3 2025 conference call for Slate Grocery REIT. I'm joined this morning by Blair Welch, Chief Executive Officer, Joe Pleckaitis, Chief Financial Officer, Connor O'Brien, Managing Director, Allen Gordon, Senior Vice President, and Braden Lyons, Vice President. Before getting started, I would like to remind participants that our discussion today may contain forward-looking statements, and therefore we ask you to review the disclaimers regarding forward-looking statements as well as non-IFRS measures, both of which can be found in Management's Discussion and Analysis. You can visit Slate Grocery REIT's website to access all of the REIT's financial disclosure, including our Q3 2025 investor update, which is available now. I will now hand over the call to Blair Welch for opening remarks.

Blair Welch: Thank you, Shivi. Hello, everyone. We are pleased to report another quarter of strong financial and operating results for Slate Grocery REIT. Our team continues to convert resilient tenant demand for grocery anchor retail spaces into robust leasing at attractive rental spreads. The REIT completed over 417,000 sq ft of total leasing throughout the quarter. Renewal spreads were completed at 15% above expiring rents, and new deals were completed at 35% above comparable average in-place rent. Adjusting for completed redevelopments, Same-Property Net Operating Income increased by $4.3 million or 2.7% on a trailing twelve-month basis.

Blair Welch: Portfolio occupancy remains stable at 94%. Our portfolio's average in-place rent of $12.82 per square foot remains well below the market average of $24.09 per square foot, providing significant runway for continued rent increases. The REIT has a weighted average interest rate of 5%, with over 90% of its debt having a fixed interest rate on a proportionate basis. This provides a stable outlook for the REIT's near-term financing costs. The REIT's weighted average capitalization rate remains well above the REIT's weighted average interest rate for outstanding date, allowing the REIT to maintain positive leverage. The REIT's attractive valuation, combined with continued Net Operating Income growth, is expected to continue increasing the value of our portfolio over time.

Blair Welch: We continue to have strong conviction in the outlook for grocery anchored real estate and the ability of this asset class to perform in today's economic environment. Recent consumer spending data shows that the essential goods are expected to remain a top priority for shoppers over the next three months, underscoring the stability and resilience of the grocery sector and grocery anchored real estate. At the same time, fundamentals remain favorable, with elevated construction costs and tight lending conditions continuing to constrain new retail development and overall availability. This dynamic creates a favorable environment for landlords to retain existing tenants and achieve meaningful increases in rents as leases expire. Against this backdrop, we are staying focused on operational execution, prudent management of our balance sheet, and strong relationships with our tenants to position the REIT to deliver sustained growth and lasting value for all unitholders.

Blair Welch: On behalf of the Slate Grocery team and the board, I would like to thank the investor community for all their continued confidence and support. I will now hand it over for questions.

Operator: Thank you. As a reminder, if you do wish to ask an audio question, please press star one on your telephone keypad. If you wish to withdraw your question, you may do so by pressing star one again to cancel. Once again, please press star one to register a question. There will be a brief pause while questions are being registered. Our first question comes from the line of Brad Sturges at Raymond James. Your line is now open.

Brad Sturgis: Hey, good morning. Good quarter. Obviously the organic growth number has been trending where you expected. I think your trailing twelve months, I think you said you were 3% to 4%. Is that a level that you expect to see continue over the course of 2026?

Blair Welch: Hey, good morning, Brad. Yes, it is. You know, I think that the moves into been really due to expiring leases when they come on, that sort of 3% to 4% is what we expect going forward.

Brad Sturgis: Okay. What are you seeing from like a market rent perspective? Obviously, you continue to highlight and showcase, the mark-to-market available as you're able to bring in place rents to market. I guess what's happening from a market rent perspective?

Blair Welch: Yeah, great question. I think the easiest way to point to something is we quote it's just over $24 per sq ft now, the CBRE market average. That is increasing at the same or maybe above our in-place rent. I would say our rental growth is very strong and the market is also growing. I think those are both positive things.

Brad Sturgis: Okay. Last question for me, just switching gears towards the investment or transaction market. Any read-throughs in terms of pricing you're seeing as it relates to Slate Grocery's underlying NAV or valuation? Are there more trades starting to percolate, or how should we think about that?

Blair Welch: Yeah, I would say, you know, we feel very comfortable with our IFRS cap rates, and I think we've been prudent on that. I think the rest of the market is kind of coming to a place where the execution where you have to do deals has moved up. I think that's what's the transaction volume has been muted. I think it's really more situational. We're looking at the pipeline of new acquisition opportunities in the billions, and that could be platforms, it could be one-off deals. I think it really speaks to positive leverage. If you think of Slate Grocery REIT's balance sheet, we're around 200 basis points of positive leverage from our IFRS cap rate to our weighted average cost of financing.

Blair Welch: I think that's pretty attractive. I think if we continue to see that with our peers and where transactions are, I think you'll see that volume pick up. I think the US market is getting there. I think if you look at other international jurisdictions, Europe is also a positive leverage situation. I think Canada's getting there, but maybe not there yet. You know, that's really how we look at the market. The fundamentals of grocery anchor real estate are extremely strong. If you can buy an asset that's performing well and finance it well, you know, I think that will show more volume in transactions.

Brad Sturgis: Okay. I appreciate that. Thank you. I'll turn it back.

Operator: Thank you. Your next question comes to the line of Jonathan Kelcher at TD Cowen. Your line is now open.

Jonathan Kelcher: Good morning, everyone. Just one question from my end. Nice to see occupancy move up a little bit in Q3. Can you talk a little bit about your progress on some of the vacancies that you had earlier in the year?

Blair Welch: Yeah. Good morning, Golden. I'll pass it over to the team to talk about specific occupancy. Thanks for the question.

Alan Gordon: Yeah. This is Allen. Good morning. We continue to see a strong pipeline of new deals throughout the portfolio, both on junior anchor leasing and small shop leasing. Continue as you've seen, continue to do deals in both.

Jonathan Kelcher: Thanks for the color. I'll turn it back.

Operator: Thank you. As a reminder, if you do wish to ask a question, please press star one on your telephone keypad. At this time, we have no further questions. I'd like to turn it back over to Shivi Agarwal for closing remarks.

Shivi Aggarwal: Thank you everyone for joining the Q3 2025 conference call for Slate Grocery REIT. Have a great day.

Shivi Agarwal: Thank you everyone for joining the Q3 2025 conference call for Slate Grocery REIT. Have a great day.

Operator: Thank you everyone for attending. This does conclude today's presentation. You may now disconnect.

Q3 2025 Slate Grocery REIT Earnings Call

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