Primaris REIT (PMZ-UN-T) got off to a strong start in 2026, reflected by its first-quarter financial and operational results that were discussed in an April 30 conference call.

“We're encouraged by the strong leasing momentum across the business,” chief executive officer Alex Avery told investors, analysts and media during the call. “Activity throughout the portfolio remains robust, tenant demand is healthy, and both the quality and volume of deals being executed continue to strengthen.”

There were 114 lease renewals covering 372,000 square feet signed in the quarter with a weighted average rent spread of 5.5 per cent. Sixty new leases accounting for 146,000 square feet were completed.

All-store sales volume grew by three per cent to $3.57 billion for the 12-month period ending February 2026 compared to February 2025.

Occupancy fluctuations

The REIT's 32-property, nationwide portfolio of enclosed shopping centres is comprised of 15.1 million square feet of gross leasable area (GLA) and valued at $5.2 billion. It had committed occupancy of 89.9 per cent and in-place occupancy of 86.4 per cent – including a million square feet of vacancy from disclaimed Hudson’s Bay Company (HBC) locations after the company went out of business last year.

Chief financial officer Rags Davloor said the gap between in-place and committed occupancy is typically about 150 basis points, but rose to 350 as “the product of the high level of leasing activity that we've had in the last quarter” and the lag before those tenants take occupancy.

Toys “R” Us Canada has closed more than 50 stores over the past two years and faces lawsuits from unpaid suppliers and landlords that are owed more than $150 million. Primaris had six Toys “R” Us stores totalling 145,000 square feet in its portfolio that were paying a relatively low average rent of $12.40 per square foot.

“We have leasing activity on all of them, and most of them are very advanced,” president and chief operating officer Patrick Sullivan said. “We have some that are going to have possession this year and we're achieving much higher rents than we had in place.”

Financial performance

Canada’s only enclosed shopping centre-focused real estate investment trust recorded first quarter net income of $41.92 million, up from $31.15 million a year earlier. 

Net operating income (NOI) from the same properties was $66.85 million, down from $69.41 million, with much of that attributable to the loss of HBC.

“We expect same-property NOI growth to accelerate in 2027 and 2028 as we see vacant anchor space coming back online at higher rents,” Davloor noted.

Primaris had $626.81 million in liquidity and unencumbered assets valued at $4.79 billion to end the quarter. 

“The underlying performance of our core business remains extremely strong,” Davloor said. “Our portfolio continues to generate stable and resilient cash flow, reflecting the quality of our assets and our operating platform. 

“We remain disciplined in our approach, well-capitalized and well-positioned to continue executing on both internal growth initiatives and selective external opportunities.”

Primaris’ stock price

Primaris’ price on the Toronto Stock Exchange closed at $18.87 on April 30, down from its 52-week high of $19.66 but up substantially from its 52-week low of $13.97. It has a market cap of $2.22 billion.

“Our progress is increasingly being recognized in the capital markets, with our weighting in the TSX Capped REIT Index rising to over four per cent and our trading liquidity now roughly four times what it was two years ago, as measured by the dollar value of units traded per day,” Avery said. 

Primaris sees the buying back of its stock as a good use of capital and will continue to do it.

Unlocking value from HBC stores

“A key area of focus will be unlocking value from our substantial excess lands, many of which have only recently become actionable following the departure of HBC,” Avery said. 

“In 2025, Primaris regained control of the seven per cent of our portfolio that had been occupied by Canada's last department store — half in June and half at the end of November. With average net rents of just over four dollars per square foot, the space was the least productive, but often the best located space in our portfolio.”

The elimination of onerous development restrictions that were embedded in the now disclaimed HBC leases has liberated more than 70 acres of land across Primaris’ portfolio. 

The Toronto-based trust has strategic plans for those properties that include the potential to develop excess lands for out-parcel buildings — including restaurants, grocery stores and financial institutions — as well as the sale of land to residential developers.

“Due to the low supply of available retail space and the high-quality nature of the HBC real estate, we anticipate retaining approximately 90 per cent of the former HBC GLA,” Sullivan said. 

“Today we're at various stages of advanced negotiation with tenants representing approximately 70 per cent of the expected GLA. Approximately 35 per cent of the space, or 350,000 square feet, is committed or conditionally leased, with very minimal capital investment from Primaris.”

Primaris anticipates generating more than $17 million in annualized net rents from the former HBC locations, once leases commence over the next two years, from a diversified mix of high-quality tenants. 

Projected acquisitions and dispositions

Primaris is in contact with other mall owners on a regular basis and is in multiple discussions about specific properties, but not to the point where it has visibility to a transaction. 

“We’re pretty optimistic that we have one or two or three that we might be able to conclude this year, but the timing is uncertain,” Avery said.

Primaris is also looking at recycling capital from the bottom end of its portfolio to help fund acquisitions.

Julian Schonfeldt, who joined Primaris as its chief investment officer earlier this year after serving the same role at CAPREIT, said it will pursue excess land sales in locations where land markets are healthiest and there’s the most liquidity. The Greater Vancouver Area, the Greater Toronto Area and Halifax are currently the most challenged, he added. 

“There's a lot of value in the sites that we have there but, just given a lot of developers are in what I'd say is more of a defence mode in dealing with their existing challenges, those would be the markets where I’d say we’re better served by pausing and waiting for a better part of the cycle,” Schonfeldt said.