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Advertisement 1 Share this Story : RioCan profit rises in second quarter on record-breaking leasing spreads, resilient tenant mix RioCan profit rises in second quarter on record-breaking leasing spreads, resilient tenant mix CEO emphasizes portfolio's defensive characteristics Author of the article: Article content RioCan Real Estate Investment Trust today reported earnings of $122.4 million for the second quarter of 2024, up from $112 million during the same quarter last year. The results were driven by strong leasing activity and a resilient tenant mix, the company said on its earnings call. Advertisement 2 Article content RioCan profit rises in second quarter on record-breaking leasing spreads, resilient tenant mix Back to video Jonathan Gitlin, chief executive of RioCan, noted the strength of the company's portfolio, emphasizing its defensive characteristics in densely populated Canadian cities. “Our portfolio has never been more desirable or more defensive,” Gitlin said on the Friday call, noting that the average population and household income within a five-kilometre radius of RioCan's assets has increased by 77 per cent and 45 per cent, respectively, since 2017. RioCan said its leasing strategy continues to focus on strong, stable tenants, with approximately 88 per cent of its retail rent derived from these key players. “This approach, coupled with ongoing market dynamics such as population growth and retail scarcity, has led to impressive occupancy rates,” Gitlin said. Advertisement 3 Article content The company's retail portfolio had a committed occupancy rate of 98.3 per cent in the second quarter, with more than 1.15 million square feet of space leased during the quarter, half a million of which were new leases. Gitlin also pointed out the record-breaking leasing spreads — the difference between new rents and expiring rents for the same space — RioCan achieved in the quarter. “The lease spread on new deals reached an all-time high of 52.5 per cent,” he noted. Despite “a macroeconomic environment that continues to show weakness and volatility,” the trust projects its funds from operations (FFO) per unit for 2024 will be between $1.79 and $1.82, with an expected FFO payout ratio ranging from 55 per cent to 65 per cent. The company also anticipates development spending on mixed-use projects will come in between $250 million and $300 million for the year. Advertisement 4 Article content Commercial same property net operating income (SPNOI) is projected to increase by two per cent to 2.5 per cent this year. Despite short-term growth being affected by extended build-out times for new tenants, RioCan has reaffirmed its long-term target of three per cent growth for its commercial SPNOI. Additionally, RioCan revised its projected spending on retail in-fill projects, which involve redeveloping and optimizing retail spaces within existing, established areas. “Retail in-fill projects is now expected to be between $30 million to $40 million compared with the $50 million to $60 million range disclosed in Q1 2024 as a result of timing delays related to the municipal permitting processes,” the earnings report said. • Email: [email protected] Bookmark our website and support our journalism: Don't miss the business news you need to know — add financialpost.com to your bookmarks and sign up for our newsletters here Article content Share this article in your social network Share this Story : RioCan profit rises in second quarter on record-breaking leasing spreads, resilient tenant mix Comments Join the Conversation Postmedia 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. Latest National Stories News Near Elliot Lake Featured Local Savings

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Advertisement 1 Share this Story : Corporate real estate teams are shifting focus from operations to driving business value, report finds Corporate real estate teams are shifting focus from operations to driving business value, report finds Face mounting pressure to demonstrate the value of their investments amid expansion plans Author of the article: Article content Corporate Real Estate (CRE) teams are facing mounting pressure to demonstrate the value of their investments as their companies prepare for expansion in the coming years, according to a report from global real estate services firm Jones Lang LaSalle Inc. (JLL). Advertisement 2 Article content Corporate real estate teams are shifting focus from operations to driving business value, report finds Back to video JLL's newly released 2024 Future of Work survey found that 65 per cent of decision-makers anticipate an increase in their CRE budgets by 2030, and 62 per cent identified “achieving better utilization of their CRE portfolio” as a top priority. However, JLL found that CRE teams are grappling with a long-standing perception that hinders their transformation efforts. In the survey, 41 per cent of decision-makers said overcoming the view that CRE is merely a “cost centre, rather than a value driver” was a challenge. At the same time, many CRE teams are finding it difficult to plan for the future due to the rapidly changing business environment. Forty-one per cent said they face challenges “with thinking and investing for the long term,” which JLL said underscores the need for CRE teams to develop flexibility, agility, and resilience — skills that are now seen as crucial for delivering real value. Advertisement 3 Article content The real estate firm, which has offices in more than 80 countries, said a key part of overcoming these challenges lies in leveraging data more effectively. Access to relevant information will allow CRE professionals to better communicate with the C-suite or senior executives and highlight areas for strategic investment. JLL believes that the right metrics can help CRE teams demonstrate their contribution to business growth and shift the conversation from cost management to value creation. Beyond data and metrics, JLL found that stronger collaboration with other business units will be critical. As the report notes, aligning CRE with a company's broader strategy will “ensure a coordinated approach, greater alignment, and the ability to respond quickly to changes in business priorities.” Advertisement 4 Article content JLL predicts that by 2030, more CRE decision-makers will report to business transformation or technology teams rather than traditional finance or operations departments. According to JLL, this shift signals the growing importance of CRE in the broader business transformation agenda. “Influencing and leadership will be critical in the future,” JLL stated, while explaining that CRE professionals will need to step into strategic roles as they guide their organizations through an evolving business landscape. • Email: [email protected] Bookmark our website and support our journalism: Don't miss the business news you need to know — add financialpost.com to your bookmarks and sign up for our newsletters here Article content Share this article in your social network Share this Story : Corporate real estate teams are shifting focus from operations to driving business value, report finds Comments Join the Conversation Postmedia 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. Latest National Stories News Near Elliot Lake Featured Local Savings

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