Primaris REIT Announces Inaugural Year End Results and Business Update

TORONTO--()--Primaris Real Estate Investment Trust (“Primaris” or “the Trust”) (TSX: PMZ.UN) announced today financial results for its inaugural year end.

Business Update Highlights

  • Formed an experienced executive management team to execute the Trust’s strategy, and a diverse Board of independent Trustees to provide oversight and guidance;
  • Began trading on the TSX January 5, 2022;
  • Added to the S&P/TSX Capped REIT Index and S&P/TSX Composite Index; and
  • Received TSX approval for normal course issuer bid.

Financial and Operating Results Highlights

  • 10.2% Net Operating Income** growth for the Primaris Properties for the year ended 2021;
  • 86% In-place occupancy (including HOOPP Properties), representing an opportunity for future organic growth;
  • 8 properties (HOOPP Properties) acquired and integrated, enhancing geographical diversification, tenant mix and scale;
  • $700 million unsecured credit facility established;
  • 28.4% Debt to Total Assets;
  • $1.88 billion in unencumbered assets (including HOOPP Properties);
  • 27 brands under contract on Primarché platform; and
  • $22.07 Net Asset Value** per Unit.

“We are in the unique position of introducing the public markets to a “new REIT” with a 20-year track record of strong operating performance at an important point of inflection in the industry,” said Alex Avery, Chief Executive Officer. “Primaris REIT is exceptionally well positioned to participate in the recovery of the Canadian enclosed shopping centre industry, with a differentiated financial model, gold-standard governance, a fully-internal, specialized management platform and a portfolio of well-maintained, well-located shopping centres across Canada with significant occupancy improvement potential. We believe there is a great opportunity to deliver compelling investment returns to investors, and look forward to delivering on that potential.”

Important Note to Financial Statement Users

On December 31, 2021, Primaris became a stand-alone entity following the completion of a tax-free spin-off (the “Spin-Off Transaction”) of 27 investment properties to Primaris from H&R Real Estate Investment Trust (“Former Parent”). The results include the continuing operations of those 27 properties (“Primaris Properties”) and, unless otherwise indicated, the 8 additional investment properties (“HOOPP Properties”) which were acquired on December 31, 2021, immediately following the Spin-Off Transaction. The results have been prepared on a continuity-of-interests basis.

As a result:

  • The December 31, 2021 financial statements reflect the operating results of approximately 74% of the REIT’s assets by IFRS Fair Value for the 3 months and 12 months ended December 31, 2021 and 2020.
  • The December 31, 2021 balance sheet reflects ownership of 100% of the REIT’s assets, including the HOOPP Properties acquired December 31, 2021.
  • Operating results during 2020 and 2021 were impacted by a number of unusual items, including pandemic related costs, bad debt expenses, temporary and permanent lease amendments, and transaction related expenses, including costs reflected in the 3 months ended December 31, 2021 that related to prior periods, as discussed in Management’s Discussion and Analysis.
  • A financial forecast for the 12 months ended December 31, 2022 is included in section 16 of Management’s Discussion and Analysis.

Select Financial and Operational Metrics

As at or for the year ended December 31,

(in thousands of Canadian dollars unless otherwise indicated) (unaudited)







Number of investment properties







Gross leasable area (in millions of square feet)







In-place Occupancy







Total assets







Total liabilities







Primaris Properties only:







Total revenue







Net Operating Income**







Net income (loss)1








** Net operating income is a non-GAAP financial measure. See Section 3, “Non-GAAP Financial Measures”.

1. As net income (loss) was calculated on the continuity-of-interests basis and does not reflect the capital structure of the newly created Trust, net income (loss) on a per unit basis would not be a relevant calculation.

Operating Results

For the year ended December 31, 2021, NOI** was $13.1 million, or 10.2%, higher than the same period in 2020. The increase was primarily due to a decrease in bad debt expense of $35.1 million, and a $2.3 million increase in lease surrender fees. These changes were partially offset by a decrease in base rent of $8.4 million, a decrease in net recovery revenue of $11.0 million and an increase in other non-recoverable expenses of $4.4 million. Base rent and recovery revenue were impacted by temporary rent adjustments provided to support tenants and maintain occupancy.

In return for this support, Primaris received relief from certain restrictive lease clauses and extended lease term from major tenants that should benefit Primaris in the future. Primaris chose to partner with tenants on affordable lease deals to maintain occupancy levels, avoid bad debt expenses, and build lasting tenant relationships. Management believes such deals provide attractive opportunities for rent growth in the future.

For the three months ended December 31, 2021, NOI** was $3.6 million, or 8.9%, lower than the same period in 2020. The decrease was primarily due to a decline in net recovery revenue due to temporary rent adjustments provided to support tenants and a $1.2 million impact from straight-line rent and lease surrender fees.

Occupancy & Leasing Results

As at December 31, 2021, the Primaris Properties, had an in-place occupancy rate of 87.5% and a committed occupancy rate of 89.4%. The in-place occupancy rate of the Primaris Properties remained relatively stable during the pandemic. The in-place occupancy rate of the HOOPP Properties, was 83.2% and represents an opportunity for future organic growth.

With respect to the Primaris Properties, Primaris completed a total of 1.4 million square feet of new and renewal leasing under 352 leasing deals for the year ended December 31, 2021, and 0.3 million square feet under 108 leasing deals for the three months ended December 31, 2021.

As at December 31, 2021, for the Primaris Properties, the weighted average net rent was $24.12 (2020 - $24.66). The average net rent for the HOOPP Properties was $22.21, for a combined average net rent of $23.53 as at December 31, 2021 for all of the Trust’s investment properties.


Immediately following the Spin-Off Transaction, Primaris completed the acquisition of 8 investment properties from Healthcare of Ontario Pension Plan (“HOOPP”) for $800 million. The acquisition provided Primaris with added economies of scale, and geographic and tenant diversification.


During 2021, Primaris obtained approval from the City of Toronto, subject to certain procedural matters being completed by June 30, 2022, to develop 4 acres at Dufferin Mall to include 1,200 residential units and 120,000 square feet of commercial space. Subsequent to obtaining conditional approval, the valuation for Dufferin Mall was increased in accordance with a third-party appraisal of the property which included the additional density. Management is considering plans to develop or monetize this land.

Robust Liquidity and Differentiated Balance Sheet

On January 4, 2022, Primaris entered into $700 million credit facility with a syndicate of Canadian banks. The availability on the credit facility will reduce from $700 million to $400 million on June 30, 2023. The credit facility has a maturity date of December 31, 2024. Primaris has $1.88 billion of unencumbered assets and a calculated net asset value** per unit of $22.07.


Year ended December 31,


($ thousands unless otherwise indicated)





Investment Properties



Other Assets


43, 654

Total Assets



Mortgages Payable



Credit Facilities



Note Payable



Total Debt



Other Liabilities



Net Assets



Units outstanding December 31, 2021 – diluted (in thousands)



Debt to Total Assets1



Net Asset Value** per unit1



** Net asset value is a non-GAAP financial measure. See Section 3, “Non-GAAP Financial Measures”.

1 No meaningful comparative values exist for the combined carve-out results of the year ended December 31, 2020.

Subsequent Events

In January 2022, the Former Parent exchanged all of the exchangeable units of the Primaris subsidiary limited partnership, that they subscribed for under the Arrangement, for Trust Units.

On January 4, 2022, Primaris entered into a $700.0 million unsecured syndicated revolving term facility, maturing on January 4, 2025, greatly expanding its liquidity.

In connection with the acquisition of the HOOPP Properties, Primaris assumed a $200.2 million non-interest-bearing note payable to HOOPP. The note was subsequently repaid on January 5, 2022 utilizing a draw on Primaris’ unsecured syndicated credit facility.

Primaris declared and paid its first distributions subsequent to December 31, 2021. On February 15, 2022, Primaris paid a distribution of $0.0667 per unit for unitholders of record January 31, 2022, and on February 10, 2022, Primaris declared a distribution of $0.0667 per unit, for unitholders of record February 28, 2022, payable on March 15, 2022. The monthly distributions, to date, reflect an annualized distribution of $0.80 per unit.

In January 2022, Primaris sold 2 acres of land to a residential developer for $5.8 million.

On February 28, 2022, Primaris received approval from the TSX for a normal course issuer bid (“NCIB”) which will enable the Trust to purchase for cancellation up to a maximum of 7,498,679 of its Units on the open market. The NCIB will commence on March 9, 2022 and remain in effect until the earlier of March 8, 2023 and the date Primaris has purchased the maximum number of Units permitted.

Conference Call and Webcast

Webcast details:
Date: Monday, March 7th, 2022, at 10:00 a.m. (ET)
Link: Please go to the Investor Relations section on Primaris’ website or click here.

Conference call details:
Dial: For Canada please dial: 1-833-950-0062
For International please dial: 1-929-526-1599
Passcode: 439910

The call will be accessible for replay until March 21, 2022, by dialing 226-828-7578 with access code 646604, 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 dominant enclosed shopping centres in growing markets. The portfolio totals 11.5 million square feet and is valued at approximately $3.2 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.

Non-GAAP Measures

Information in this press release is a select summary of results. This press release should be read in conjunction with the Trust’s Management Discussion and Analysis and the consolidated statement of financial position and combined carve-out financial statements and the accompanying notes for the years ended December 31, 2021 and 2020 (together the “Financial Statements”).

Primaris’ Financial Statements are prepared in accordance with International Financial Reporting Standards (“IFRS”). However, 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 press release by the suffix “**” may include non-GAAP financial measures and/or non-GAAP ratios, each as defined in National Instrument 52-112 Non-GAAP and Other Financial Measures Disclosure. 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.

Net Operating Income** is calculated as the rental revenue as calculated in accordance with IFRS less property operating costs as calculated in accordance with IFRS. Management calculates and analyzes NOI** to monitor the performance of its income producing investment properties; in particular, the period over period NOI** results for properties continuously in operation for the duration of the measurement period.

Net Asset Value** is calculated as the net of the assets and liabilities from the statement of financial conditions calculated in accordance with IFRS, excluding exchangeable units. Management believes that net asset value is a useful measure of the intrinsic value of the Trust.

Below is a reconciliation of NOI** to IFRS measures:

For the periods ended December 31,

($ thousands) (unaudited)

Three months






Rental Revenue









Property operating costs









Net Operating Income**









Exclude variances from:









Straight-line rent









Lease surrender fees









Adjusted NOI**









Forward-Looking Statements Disclaimer

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: [statements with respect to expected future distributions, the Trust’s development activities, the expected benefits from the integration of the HOOPP properties and the normal course issuer bid] These statements are based on factors or assumptions that were applied in drawing a conclusion or making a forecast or projection, including assumptions based on historical trends, current conditions and expected future developments. Since forward-looking statements relate to future events and conditions, by their very nature they require making assumptions and involve inherent risks and uncertainties. Primaris cautions that although it is believed that the assumptions are reasonable in the circumstances, these risks and uncertainties give rise to the possibility that actual results 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 will be 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.


For more information:

Alex Avery
Chief Executive Officer

Rags Davloor
Chief Financial Officer



For more information:

Alex Avery
Chief Executive Officer

Rags Davloor
Chief Financial Officer