"The third quarter marked another strong operating quarter for Nexus, as we advance our journey as Canada's industrial building partner. We completed two exciting new industrial developments, which combined will add $6.6 million of annual stabilized NOI, representing an unlevered 9.4% return on our development costs. In total, over the past 18 months we have completed five industrial projects with over 900,000 sq ft of GLA which will contribute over $13 million in annual NOI when stabilized" said Kelly Hanczyk, CEO of Nexus Industrial REIT.
"We also delivered an excellent quarter of leasing: we quickly filled our vacant 223,000 sq ft building in London with a top tier tenant under attractive terms and completed 150,000 sq ft of renewals at an average lift of 13%. This improved the industrial occupancy rate to 96%.
"I am very excited with our progress this quarter, and I am confident that our strategy will continue to be rewarding for our unitholders" concluded Mr. Hanczyk.
Third Quarter 2025 Highlights:
Finished construction of the 325,000 sq. ft. expansion project in St. Thomas, ON, and the 115,000 sq. ft. new industrial small-bay complex in Calgary, AB. Combined, these projects are expected to add annual stabilized NOI of $6.6 million.
Completed 148,586 sf of leasing at an average spread of 13% over expiring and in-place rents.
In-place occupancy increased by 1% versus prior quarter to 96%.
Completed the opportunistic sale of an industrial property for net cash proceeds of $9.1 million.
Net income was $3.4 million driven by net operating income ("NOI")(1) of $32.2 million, partially offset by finance expense and fair value adjustments (losses).
NOI(1) decreased 1.1% versus a year ago to $32.2 million primarily due to the disposition of 15 retail properties, 4 office properties, and 8 industrial properties (as part the REIT's capital recycling program and transition to a pure-play industrial REIT), partially offset by growth in industrial Same Property NOI(1) and completed developments.
Industrial Same Property NOI(1) increased 2.9% year over year to $29.5 million.
Normalized FFO(1) per unit decreased $0.006 versus a year ago to $0.181 and Normalized AFFO(1) per unit decreased $0.011 versus a year ago to $0.146.
Year-to-Date 2025 Highlights:
Completed the transition to a pure-play industrial REIT by selling 15 legacy retail properties, one legacy office property and three industrial properties for total proceeds of $71.3 million.
Finished construction of the 325,000 sq. ft. expansion project in St. Thomas, ON, and the 115,000 sq. ft. new industrial small-bay complex in Calgary, AB. Combined, these projects are expected to add annual stabilized NOI of $6.6 million.
Completed 1,101,534 sf of leasing at an average spread of 66% over expiring and in-place rents.
Net income was $29.0 million driven by NOI(1) of $96.4 million, partially offset by finance expense, fair value adjustments (losses) and general and administrative expenses.
NOI(1) increased 2.9% versus a year ago to $96.4 million primarily attributable to NOI generated from newly acquired industrial income producing properties and growth in Same Property NOI(1), despite selling 27 legacy retail, office, and industrial properties.
Industrial Same Property NOI(1) increased 2.9% year over year to $81.6 million.
Normalized FFO(1) per unit increased $0.026 versus a year ago to $0.556 and Normalized AFFO(1) per unit increased $0.018 versus a year ago to $0.459.
Unitholders' equity decreased by $1.0 million to $1.1 billion or $14.88 per unit and NAV per unit(1) of $12.98 decreased $0.21 or 1.6% versus December 31, 2024.(1) This is a Non-IFRS Financial Measure.
Subsequent event:
On October 2, 2025, the REIT closed on the disposition of excess lands at Les Galeries d'Anjou, Quebec, for gross proceeds of $8.5 million (at the REIT's 50% share).
Summary of Results
(In thousands of Canadian dollars, except per unit amounts)
Three months ended September 30,
Nine months ended September 30,
2025
2024
2025
2024
$
$
$
$
FINANCIAL INFORMATION
Operating Results
Property revenues
43,295
45,529
130,071
131,036
NOI (1)
32,197
32,568
96,437
93,722
Net income (loss) and comprehensive income (loss)
3,449
(45,991
)
28,975
41,205
Adjusted EBITDA (LTM) (1)
120,520
115,721
120,520
115,721
FFO (1)
17,309
17,613
52,509
48,544
Normalized FFO (1) (2)
17,538
17,596
52,862
49,686
AFFO (1)
13,988
14,795
43,834
40,153
Normalized AFFO (1) (2)
14,180
14,778
43,691
41,295
Distributions declared (3)
15,152
15,063
45,301
44,973
Same Property NOI (1)
30,080
29,281
83,122
81,343
Industrial Same Property NOI (1)
29,535
28,696
81,576
79,289
Weighted average units outstanding (000s):
Basic (4)
96,928
94,137
95,132
93,675
Diluted (4)
97,181
94,313
95,385
93,851
Per unit amounts:
Distributions per unit, basic (3) (4)
0.160
0.160
0.480
0.480
Distributions per unit, diluted (3) (4)
0.160
0.160
0.480
0.480
Normalized FFO per unit, basic (1) (2) (4)
0.181
0.187
0.556
0.530
Normalized FFO per unit, diluted (1) (2) (4)
0.180
0.187
0.554
0.529
Normalized AFFO per unit, basic (1) (2) (4)
0.146
0.157
0.459
0.441
Normalized AFFO per unit, diluted (1) (2) (4)
0.146
0.157
0.458
0.440
AFFO payout ratio (1) (3)
108.3%
101.8%
103.3%
112.0%
Normalized AFFO payout ratio, basic (1) (2) (3)
106.9%
101.9%
103.7%
108.9%
Normalized AFFO payout ratio, diluted (1) (2) (3)
107.1%
101.9%
104.0%
109.1%
Same Property NOI Growth % (1)
2.7%
4.3%
2.2%
2.6%
Industrial Same Property NOI Growth % (1)
2.9%
5.6%
2.9%
3.5%
(1)
This is a Non-IFRS Financial Measure.
(2)
Until Q1 2024, Normalized FFO and Normalized AFFO included adjustments for vendor rent obligation amounts due from the vendor of the REIT's Richmond, BC property, until certain conditions were satisfied. During Q2 2024, these conditions were satisfied and the vendor settled all outstanding amounts.
(3)
Includes distributions payable to holders of Class B LP Units which are accounted for as finance expense in the consolidated financial statements.
(4)
Weighted average number of units includes Class B LP Units.
September 30,
December 31,
2025
2024
(In thousands of Canadian dollars, unless stated otherwise)
$
$
PORTFOLIO INFORMATION
Total Portfolio
Number of investment properties(2)
87
106
Number of properties under development
—
2
Investment properties fair value (excludes assets held for sale)
2,475,158
2,458,174
Gross leasable area ("GLA") (in millions of sq. ft.) (at the REIT's ownership interest)
12.1
12.5
Industrial occupancy rate, in-place and committed (period-end)(3)
96%
96%
Weighted average lease term ("WALT") (years)
7.0
6.8
Industrial WALT (years)
7.0
7.0
Estimated spread between industrial portfolio market and in-place rents
18.5%
25.3%
FINANCING AND CAPITAL INFORMATION
Financing
Net debt(1)
1,275,593
1,279,538
Total Indebtedness Ratio(1)
48.9%
49.1%
Net Debt to Adjusted EBITDA(1)
10.6
10.9
Adjusted Net Debt to Adjusted EBITDA(1)
10.2
10.2
Debt service coverage ratio (times)
1.70
1.62
Secured Indebtedness Ratio
23.2%
27.4%
Unencumbered investment properties as a percentage of investment properties
47.8%
39.5%
Total assets
2,608,129
2,604,460
Cash
14,373
11,532
Capital
Total equity (per consolidated financial statements)
1,060,688
1,061,724
Total equity (including Class B LP Units)
1,258,973
1,241,747
Total number of Units (in thousands)(4)
97,019
94,159
NAV per Unit(1)
12.98
13.19
(1)
See Non-IFRS Financial Measures.
(2)
Includes 2 properties (17 properties - December 31, 2024) classified as assets held for sale, and one property held for development in which the REIT has an 80% interest.
(3)
Includes committed new leases for future occupancy.
(4)
Includes Class B LP units.
Net Income
Net income for the three months ended September 30, 2025 was $3.4 million or $49.4 million higher than the prior year, primarily due to fair value adjustments in the current quarter, including higher Class B LP Units fair value adjustments of $43.3 million and derivatives fair value adjustments of $20.9 million, partially offset by a decrease in the fair value adjustment of investment properties by $15.4 million.
Net income for the nine months ended September 30, 2025 was $29.0 million or $12.2 million lower than the prior year, primarily due to the decrease in the fair value adjustment of investment properties by $46.4 million, which was partially offset by higher gain on the fair value adjustment of Class B LP units of $15.7 million, higher fair value adjustment of derivative financial instruments of $13.1 million, higher NOI of $2.7 million and lower finance expense of $2.1 million.
Net Operating Income
NOI for the three months ended September 30, 2025 was $32.2 million or $0.4 million lower than the prior year, which was primarily due to a $2.0 million decrease resulting from dispositions completed since Q3 2024, partially offset by an increase of $0.8 million in Same Property NOI, higher straight-line rent adjustments of $0.5 million, $0.2 million increase due to completed developments and expansions, and $0.1 million relating to amortization of tenant incentives and leasing costs.
NOI for the nine months ended September 30, 2025 was $96.4 million or $2.7 million higher than the prior year, which was primarily due to an increased NOI of $2.2 million relating to completed developments and expansions, $2.1 million from lease termination and tenant reimbursed capital improvements, $1.6 million from acquisitions of industrial income producing properties completed subsequent to Q3 2024, an increase of $1.8 million in Same Property NOI, and $0.3 million relating ...
