Nexus Industrial REIT Announces Fourth Quarter and Year End 2025 Financial Results

Author of the article:You can save this article by registering for free here. Or sign-in if you have an account.Transitioned to a pure-play industrial REIT; Attractive development properties completed; Strong leasing activitySubscribe now to read the latest news in your city and across Canada.Subscribe now to read the latest news in your city and across Canada.Create an account or sign in to continue with your reading experience.Create an account or sign in to continue with your reading experience.TORONTO, March 05, 2026 (GLOBE NEWSWIRE) — Nexus Industrial REIT (the “REIT”) (TSX: NXR.UN) announced today its results for the fourth quarter and year ended December 31, 2025.“2025 was a transformative year for Nexus, and I am very pleased with the results” said Kelly Hanczyk, CEO of Nexus Industrial REIT.We kept a long-term focus, completing our strategic transition to become the only scale, Canada-focused industrial REIT, and completed two value-accretive projects, adding 440,000 square feet of GLA that will deliver an unlevered return of 9.4% on development costs. We also acquired two well-located, high-quality buildings in Montreal initially contributing $2.6 million in annual NOI with significant mark-to-market potential in 2028, leading to a stabilized cap rate of 10.4%.We continued to deliver strong leasing results, realizing industrial SPNOI growth of 2.6% despite unexpected CCAA-related vacancies of two tenants, and achieving an average increase over in-place and expiring rents of +60%.Get the latest headlines, breaking news and columns.By signing up you consent to receive the above newsletter from Postmedia Network Inc.A welcome email is on its way. If you don't see it, please check your junk folder.The next issue of Top Stories will soon be in your inbox.We encountered an issue signing you up. Please try againInterested in more newsletters? Browse here.The moves we have made with the portfolio over the last several years have created a strong foundation for us to build on in 2026, with a healthy balance sheet and robust operating performance propelling mid-single digit industrial SPNOI growth, and a normalized payout ratio averaging below 100% on a full year basis.“I am very excited with the progress that we have made, and I am confident that our strategy will continue to be rewarding for our stakeholders” concluded Mr. Hanczyk.Fourth Quarter 2025 Highlights:Year-to-Date 2025 Highlights:(1) This is a Non-IFRS Financial Measure. Refer to Non-IFRS Measures for details.Subsequent event:Net income Net income for the three months ended December 31, 2025 was $30.6 million or $19.1 million lower than the prior year, primarily due to a decrease in Class B LP Units fair value adjustments of $31.0 million and equity accounted investment loss of $4.2 million, partially offset by an increase in fair value adjustments of investment properties of $10.6 million and an increase in fair value adjustments of derivative financial instruments of $3.9 million.Net income for the year ended December 31, 2025 was $59.5 million or $31.3 million lower than the prior year, primarily due to the decrease in fair value adjustments of investment properties of $35.8 million, a decrease in Class B LP Units fair value adjustments of $15.4 million and equity accounted investment loss of $4.2 million, which was partially offset by an increase in fair value adjustments of derivative financial instruments of $17.0 million, higher NOI of $3.6 million and lower finance expense of $2.2 million.Net operating incomeNOI for the three months ended December 31, 2025 was $33.0 million or $0.9 million higher than the prior year, which was primarily due to an increase of $0.7 million in Same Property NOI, higher straight-line rent adjustments of $0.5 million, and an increase due to completed developments, expansions and acquisitions of $1.5 million, partially offset by a $1.4 million decrease resulting from dispositions completed since Q4 2024 and a $0.4 million decrease relating to amortization of tenant incentives and leasing costs.NOI for the year ended December 31, 2025 was $129.4 million or $3.6 million higher than the prior year, which was primarily due to an increase of $3.7 million relating to completed developments and expansions, $2.1 million from lease termination and tenant reimbursed capital improvements, $2.0 million from acquisitions of industrial income producing properties completed subsequent to Q4 2024, an increase of $2.1 million in Same Property NOI, and $0.8 million relating to straight-line rent adjustments, partially offset by lower NOI of $6.9 million relating to dispositions completed since Q4 2024 and $0.2 million relating to amortization of tenant incentives and leasing costs.Fair value adjustment of investment propertiesThe fair value gain on investment properties for the three months ended December 31, 2025 totaled $18.7 million. The REIT engaged external appraisers to value properties totaling $94.7 million in the quarter. Overall, the fair value gain recorded for the REIT’s portfolio primarily consists of a $23.2 million increase in connection with the newly acquired properties to be in line with appraisal reports, and $7.0 million increase relating to increases in stabilized NOI, partially offset by an $11.5 million decrease resulting from expansion in capitalization rates.The fair value gain on investment properties for the year ended December 31, 2025 totaled $12.1 million. The REIT engaged external appraisers to value properties totaling $390.2 million during the year. Overall, the fair value gain recorded for the REIT’s portfolio primarily consists of a $23.2 million gain in connection with the newly acquired properties to be in line with appraisal reports, and a $5.7 million gain relating to properties held for development based on development progress relative to the as-completed value, partially offset by a $14.0 million decrease resulting from changes in stabilized NOI, capitalization rates and other adjustments, and a $2.8 million decrease relating to investment property sale price adjustments prior to disposition.OutlookThe 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.Early in 2025, the REIT was impacted by the CCAA filing from two tenants. The REIT re-leased the space where possible and marketed the remaining buildings for lease and/or sale. Leasing activity was positive in 2025 as demonstrated by industrial Same Property NOI growth for the year ended December 31, 2025 of 2.6%, which was in line with the REIT’s guidance of approximately 3% for the year.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 normalized AFFO payout ratios(1) (diluted) for the three months and year ended December 31, 2025 are 103.4% and 103.8%, respectively. 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 CallManagement of the REIT will host a conference call at 10:00 AM Eastern Standard Time on Friday March 6, 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 April 6, 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 3349857.March and April DistributionsThe REIT will make a cash distribution in the amount of $0.05333 per unit, representing $0.64 per unit on an annualized basis, payable April 15, 2026, to unitholders of record as of March 31, 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 May 15, 2026, to unitholders of record as of April 30, 2026.About Nexus Industrial REITNexus is a growth-oriented real estate investment trust focused on increasing unitholder value through the acquisition of industrial properties located in primary and secondary markets in Canada, and the ownership and management of its portfolio of properties. The REIT currently owns a portfolio of 89 properties (including one property held for development in which the REIT has an 80% interest) comprising approximately 12.4 million square feet of gross leasable area. The REIT has approximately 97,073,000 voting units issued and outstanding, including approximately 71,803,000 REIT Units and approximately 25,270,000 Class B LP Units of subsidiary limited partnerships of Nexus, which are convertible to REIT Units on a one-to-one basis.Non-IFRS MeasuresInformation in this news release is a select summary of results. This news release should be read in conjunction with the MD&A and the Trust’s consolidated financial statements and the accompanying notes for the year ended December 31, 2025 (the “Financial Statements”).

The Financial Statements are prepared in accordance with IFRS accounting standards as issued by the IASB, however, included in the tables above and elsewhere in this news release are non-IFRS financial measures or non-IFRS ratios which do not have a standardized meaning prescribed under generally accepted accounting principles (“GAAP”) in accordance with IFRS and that should not be construed as an alternative to net income / loss or other measures of financial performance calculated in accordance with IFRS and may not be comparable to similar measures as reported by other issuers. A definition of each non-IFRS financial measure or ratio used herein and an explanation of management’s reasons as to why it believes the measure is useful to investors are incorporated by reference and can be found on page 1 in the REIT’s Management’s Discussion and Analysis for the year ended December 31, 2025, available on SEDAR+ at www.sedarplus.ca and on the REIT’s website under Investor Relations. See Appendix A of this earnings release for a reconciliation of the non-IFRS financial measures to the primary financial statement measures.Forward Looking StatementsCertain statements contained in this news release constitute forward-looking statements which reflect the REIT’s current expectations and projections about future results, including statements under the heading “Outlook” and regarding the REIT’s expectations relating to growth in NOI, benefits from developments and the sustainability of its distributions. Often, but not always, forward-looking statements can be identified by the use of words such as “plans”, “expects” or “does not expect”, “is expected”, “estimates”, “intends”, “anticipates” or “does not anticipate”, or “believes”, or variations of such words and phrases or state that certain actions, events or results “may”, “could”, “would”, “might” or “will” be taken, occur or be achieved. Forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the REIT to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Actual results and developments are likely to differ, and may differ materially, from those expressed or implied by the forward-looking statements contained in this news release. Such forward-looking statements are based on a number of assumptions that may prove to be incorrect.While the REIT anticipates that subsequent events and developments may cause its views to change, the REIT specifically disclaims any obligation to update these forward-looking statements except as required by applicable law. These forward-looking statements should not be relied upon as representing the REIT’s views as of any date subsequent to the date of this news release. There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements. The factors identified above are not intended to represent a complete list of the factors that could affect the REIT.For further information please contact: Kelly C. Hanczyk, CEO at (416) 906-2379 orMike Rawle, CFO at (647) 823-1381APPENDIX A – NON-IFRS FINANCIAL MEASURESPostmedia is committed to maintaining a lively but civil forum for discussion. Please keep comments relevant and respectful. Comments may take up to an hour to appear on the site. You will receive an email if there is a reply to your comment, an update to a thread you follow or if a user you follow comments. Visit our Community Guidelines for more information.