Slate Grocery REIT Reports Strong Third Quarter 2025 Results, Driven by Robust Leasing Momentum and Resilient Grocery Sector Fundamental

Slate Grocery REIT (TSX: SGR.U) (TSX: SGR.UN) (“the REIT”), an owner and operator of U.S. grocery-anchored real estate, today announced its financial results and operational highlights for the three and nine months ended September 30, 2025.

The third quarter of 2025 marked another period of strong operational and financial performance for the REIT, reflecting the resilience of grocery-anchored retail and the effectiveness of its leasing and asset management strategies. Slate Grocery REIT continued to demonstrate consistent growth in rental income, stable occupancy, and disciplined financial management amid a complex macroeconomic backdrop.

CEO Commentary

“We are pleased to share another quarter of strong results, which highlight our team’s continued leasing momentum with over 417,000 square feet of deals completed in the third quarter at double-digit rental spreads,” said Blair Welch, Chief Executive Officer of Slate Grocery REIT.

“Despite ongoing macroeconomic headwinds, consumer spending on grocery and essential goods remains resilient and continues to underpin strong tenant demand for our high-quality, grocery-anchored spaces,” Welch continued. “With portfolio rents that are still significantly below current market levels, we believe Slate Grocery REIT is well-positioned to deliver sustained growth, drive income expansion, and generate attractive returns for our unitholders.”

For the CEO’s full letter to unitholders, please follow the link [here].

Operational and Financial Highlights

Leasing Strength and Rental Growth
Slate Grocery REIT completed 417,145 square feet of total leasing activity in the third quarter of 2025, achieving double-digit rental spreads across both new leases and renewals. This momentum reflects strong tenant demand for essential retail locations and underscores the REIT’s ability to capture higher rents as leases roll over.

• Renewals were completed at an average 15.1% increase above expiring rents.
• New leases were signed at an impressive 34.8% premium to comparable in-place rents, further validating the embedded growth potential within the portfolio.

Steady Same-Property NOI Growth
Adjusting for completed redevelopments, the REIT achieved a 2.7% increase in same-property Net Operating Income (NOI), translating to a $4.3 million gain on a trailing twelve-month basis. This growth reflects both improved rental rates and ongoing operational efficiency across the portfolio.

Stable Portfolio Occupancy and Rent Potential
Portfolio occupancy remained robust and stable at 94.3% as of September 30, 2025, reflecting the REIT’s strong tenant retention and successful leasing initiatives.

Notably, the REIT’s average in-place rent of $12.82 per square foot remains significantly below the market average of $24.09, providing substantial long-term potential for rental rate growth as leases are renewed or restructured. This rent gap represents a powerful driver of future earnings expansion and value creation.

Disciplined Capital and Debt Management
Slate Grocery REIT continues to maintain a prudent and disciplined capital structure designed to ensure financial stability and flexibility.

As of the end of the third quarter, the REIT’s weighted average interest rate stood at 5.0%, with approximately 90.4% of total debt fixed through various instruments, providing visibility and protection against short-term interest rate volatility.

During the quarter, the REIT also amended two interest rate swap contracts with a combined notional value of $312.5 million. These amendments extended the weighted average maturity to 2.6 years and adjusted the pay-fixed rate to 3.5%, further enhancing the stability of the REIT’s debt profile.

Positive Leverage and Long-Term Value Growth
The REIT’s weighted average capitalization rate remains well above its weighted average cost of debt, ensuring the maintenance of positive leverage. This favorable spread between cap rates and borrowing costs, coupled with continued NOI growth, supports ongoing portfolio valuation increases and enhances long-term unitholder value.

Moreover, management continues to view the REIT’s units as undervalued, noting that they currently trade at a discount to net asset value (NAV). This presents a compelling opportunity for both new and existing investors seeking stable income and total return potential through participation in the U.S. grocery-anchored retail real estate sector.

Non-IFRS Measures

This news release and the accompanying financial statements have been prepared in accordance with IFRS® Accounting Standards (“IFRS Accounting Standards”), as issued by the International Accounting Standards Board (“IASB”).

In addition to IFRS Accounting Standards measures, Slate Grocery REIT (the “REIT”) also discloses several non-IFRS financial measures that management believes provide meaningful insight into the REIT’s performance and financial health. These measures include Net Operating Income (NOI), Same-Property NOI, Funds from Operations (FFO), Adjusted Funds from Operations (AFFO), FFO payout ratio, AFFO payout ratio, Adjusted EBITDA, Fixed Charges, and the Fixed Charge Coverage Ratio, along with certain per-unit measures.

These non-IFRS measures do not have standardized meanings prescribed by IFRS Accounting Standards and therefore may not be comparable to similar measures used by other entities. They should be viewed as supplementary information rather than a replacement for IFRS-based results.

Definitions of Non-IFRS Measures

• NOI (Net Operating Income) – Calculated as rental revenue less operating expenses, before adjustments for straight-line rent, IFRIC 21 property tax levies, and equity investments.
• Same-Property NOI – Represents NOI from properties owned by the REIT in both the current and comparative periods, excluding properties under development.
• FFO (Funds from Operations) – Defined as net income adjusted for items not reflective of recurring earnings, such as transaction and disposition costs, fair value changes in properties and financial instruments, deferred income taxes, unit-based income (expense), equity investment adjustments, and IFRIC 21 property tax impacts.
• AFFO (Adjusted Funds from Operations) – Derived from FFO by adjusting for straight-line rental revenue as well as recurring capital expenditures, leasing costs, and tenant improvement costs.
• FFO Payout Ratio / AFFO Payout Ratio – Calculated as total distributions declared divided by FFO and AFFO, respectively.
• FFO per WA Unit / AFFO per WA Unit – Represent FFO and AFFO divided by the weighted average Class U equivalent units outstanding.
• Adjusted EBITDA – Calculated as NOI less general and administrative expenses, based on the REIT’s proportionate interest.
• Fixed Charges – Include principal repayments and cash interest paid, net of the REIT’s proportionate interest.
• Fixed Charge Coverage Ratio – Represents Adjusted EBITDA divided by Fixed Charges, based on the REIT’s proportionate interest.
• Net Asset Value (NAV) – Defined as the aggregate of the REIT’s equity carrying value, deferred income taxes, and exchangeable units of subsidiaries.
• Proportionate Interest – Reflects financial information adjusted to include the REIT’s share of equity-accounted joint ventures and financial real estate assets, as well as its proportionate share of related net income or losses.

Management’s Use of Non-IFRS Measures

Management uses these non-IFRS measures to evaluate operating performance, guide capital allocation decisions, and assess financial risk across the business. These metrics provide a more detailed view of the REIT’s recurring earnings capacity, cash flow generation, and leverage profile, complementing results presented in accordance with IFRS Accounting Standards.

The REIT believes that presenting these non-IFRS measures helps investors better understand its operational performance and financial condition in a manner consistent with management’s internal analysis. However, readers are cautioned that these measures should not be considered substitutes for IFRS Accounting Standards measures, and differences in calculation methods may make comparisons with other issuers imprecise.

About Slate Asset Management

Slate Asset Management is a global investor and manager focused on essential real estate and infrastructure assets. We focus on fundamentals with the objective of creating long-term value for our investors and partners across the real assets space. We are supported by exceptional people and flexible capital, which enable us to originate and execute on a wide range of compelling investment opportunities

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