Skyline Reports Strong Financial Performance in Q1 2026

Skyline’s investment products delivered a strong opening quarter to 2026. Our disciplined  and strategic management approach across the Apartment, Industrial, Retail, and Clean Energy portfolios have continued to support stable income generation and unit value performance for investors.

Unless otherwise indicated, all metrics are presented on a trailing twelve-month basis, defined as the sum of the most recent four quarters.

Skyline Apartment REIT: Double-digit FFO growth driven by margin expansion and cost control

Skyline Apartment REIT, the largest within our platform by portfolio value, delivered another solid quarter of performance. The REIT’s fair market value increased slightly to $5.14 billion, supported by a diversified portfolio of 19,849 suites across 47 communities in five provinces. Existing rental fundamentals remained a key strength, with average in-place rent increasing 4.44%, outpacing the Canadian multi-residential annual growth rate of 2.70% in Q1 2026.

Operationally, the REIT continued to deliver resilient performance in Q1 2026 with total income rising 0.92% and net operating margin expanding 3.6 percentage points. In turn, rising operational efficiency contributed to an 8.02% increase in Net Operating Income (NOI), supported by a 6.42% reduction in operating expenses as cost control continues to be a core focus. These factors helped drive a 13.65% increase in FFO, the REIT’s primary measure of operating cash flow.

Strategically, our focus on purpose-built rental housing in secondary markets has helped reduce exposure to more cyclical areas of real estate, supporting greater portfolio stability and mitigating volatility. Combined with national diversification outside of volatile primary markets, our multifamily positioning has supported resilient income generation in the core markets we serve.

Multi-residential sector headlines in Q1 2026

• Canadian Banks See Mortgage Delinquencies Hit 2015 Recession Levels
• Pullback in housing starts may set the stage for another supply crunch as early as 2028
• Migration to small towns is just getting started
• Mortgage affordability worsens in most major Canadian cities, report says
• Canadian housing is too expensive to buy, not profitable to build: CIBC

Quarterly chart spotlight

Skyline commentary: Recent data released by Statistics Canada on May 6, 2026 indicate a continued decline in homeownership rates among younger Canadians, particularly within the millennial demographic (approximately ages 25 to 39). The trend suggests a long-term structural issue driven primarily by affordability pressures, elevated borrowing costs, and tighter financing conditions.

The net result is a greater share of younger households remaining in rental accommodation for longer durations, supporting sustained demand for purpose-built rental housing and reinforcing the multi-residential sector’s long-term investor appeal.

For the first time in July 2023, the millennial generation comprised a greater number of people in the population than the baby boomer generation.

Skyline Industrial REIT: Average in-place rent continues to rise

Skyline Industrial REIT experienced measured growth in the value of its industrial portfolio, with investment fair value now standing at approximately $1.78 billion. The portfolio includes 51 properties across five provinces, comprising more than 10 million square feet of gross leasable area and 173 tenants. The REIT also maintains seven active development projects, with 6 anticipated to stabilize over the next 18 months.

For the year, average annual in-place rent increased 4.43% to $9.90 per square foot, supported by steady leasing fundamentals. Base rental revenue rose 0.97% to $35.78 million, with a greater share of total revenue now driven by core rental activity. Net operating income came in at $23.82 million, with net operating margin compressing slightly by 1.2 percentage points to 66.6%, reflecting normal variability amid positive leasing trends.

With industrial markets stabilizing and supply and demand moving toward balance, properties anchored by strong tenants and embedded leasing upside remain well positioned for sustained performance.

Industrial sector headlines in Q1 2026

• National vacancy rates decline for both office and industrial real estate
• Canada Industrial Figures Q1 2026: Availability rate plateaus as leasing remains strong
• Canada’s industrial real estate markets on different trajectories: Calgary continued to post rising rent
• GTA industrial market holds firm as absorption rises and space tightens
• Industrial sector set to continue leading the charge for Canada’s commercial market

Quarterly chart spotlight

Skyline commentary: The latest Bank of Canada Market Participants Survey  points to a steady but modest growth backdrop for the Canadian economy through 2027. Midpoint expectations sit at ~1.6% real GDP growth in 2026, improving to roughly ~1.9% in 2027, and suggests a gradual pickup in momentum from current levels rather than outright acceleration.

While this reflects modest growth, it remains generally supportive for industrial real estate fundamentals. In combination with net leasing activity poised to rebound back to historical norms and declining new supply, industrial real estate leasing fundamentals are now the strongest they have been since the pandemic.

Skyline Retail REIT: Strong growth in operating cash flow

Through the first quarter of 2026, Skyline Retail REIT’s investment property fair value increased 2.91% to $1.66 billion. The gain reflects the addition of the Paradise, NL grocery-anchored retail plaza  acquired in November 2025. The portfolio currently covers approximately 5.21 million square feet of gross leasable area across 109 properties in five provinces.

Looking at financial performance, the REIT continued to deliver steady results during the period. Average annual in-place rent increased 1.46% to $20.17 per square foot, supporting a 1.97% increase in base rental revenue to $25.31 million.  NOI rose 1.89% to $23.54 million, while net operating margin eased slightly by 0.6 percentage points to 59.0%. Collectively, these results translated into a 2.92% increase in FFO, which reached $12.17 million. Overall, steady rent growth and disciplined operations drove modest NOI expansion and continued cash flow growth, despite some normal margin variability.

Even with slower population growth, the essential retail sector continues to benefit from strong fundamentals, supported by a long-standing supply-demand imbalance for quality space in secondary and tertiary markets. Our expansion into Atlantic Canada exemplifies our commitment to entering markets with untapped potential as we continue to build a national footprint. The quarter’s results reinforce the effectiveness of execution in translating market opportunity into tangible performance.

Retail sector headlines in Q1 2026

• Loblaw plans $2.4-billion investment in 2026, including 70 new stores
• Buy Canadian movement at grocers could ramp up again during trade talks
• Carney announces food affordability measures, including boost to GST rebate
• New federal funding to support agriculture, agri-food market diversification
• Retail sales on the rise: Statistics Canada

Quarterly chart spotlight

In-store retail sales growing faster than e-commerce

Skyline commentary: Canadian retail spending remains heavily dominated by in-store purchases, with brick-and-mortar sales of approximately $67.5 billion in March versus about $5.1 billion for e-commerce. The stats by Statistics Canada (1, 2) imply that physical retail is also growing faster at a 3.30% growth rate compared to 1.88% for online sales.

While e-commerce experienced rapid expansion in the pre-pandemic period, growth has now begun to slow as it matures and scales. This data demonstrates that physical retail continues to be the overwhelming venue for consumer spending in Canada in 2026.

Regardless of fluctuations in e-commerce activity, Skyline Retail REIT’s focus on essential retail highlights the enduring strength of brick-and-mortar real estate among consumers.

Skyline Clean Energy Fund: NOI up 76.93% on record renewable revenue, margin expansion

By the end of Q1 2026, Skyline Clean Energy Fund’s renewable energy portfolio had approximately $420 million in assets under management, comprised of 84 solar projects and 2 biogas facilities with a total generation capacity across the portfolio of 95.36 Megawatts of Direct Current (MWDC). The percentage of revenue derived from biogas and solar is 46.7% and 53.3%. Total renewable electricity generated by the Fund to date is in excess of 468,760 MWh, or roughly equivalent to powering a medium sized city such as Red Deer for a year.

Total revenue for the 12 months ending Q1 2026 increased 31.17% to $74.54 million, driven primarily by a 99.56% increase in biogas revenue through the monetization of Clean Fuel Regulation credits generated from 2022 to 2025. This helped support meaningful margin expansion, with net operating margin rising from 26.26% to 35.42%. As a result, net operating income increased 76.93% to $26.40 million, reflecting both stronger top-line growth and improved operating leverage across the portfolio.

And subsequent to quarter end on April 1, 2026, the Fund’s Board of Trustees approved a $0.33 unit value increase from $19.28 to $19.61—an increase of 1.71%. Along with an additional $0.09 increase on May 1, 2026, and $0.08 increase on June 1, 2026, the Fund’s unit value currently stands at $19.78.

For the remainder of 2026, we are advancing capital upgrades across our solar portfolio through a large-scale repowering initiative, with expected project-level internal rates of return ranging from 13% to 36%. Upon completion, these enhancements are expected to increase energy production and support stronger top-line revenue growth across the portfolio in subsequent quarters.

Renewable energy sector headlines in Q1 2026

• Canada invests $28.9 million in carbon capture, renewable energy and electricity grid projects
• Canadian institutional behemoths to purchase renewable energy producer
• Made-in-Canada renewables boost national security, poll respondents say
• Biogas companies report strong 2025
• Ontario procures landmark number of new solar and wind projects

Quarterly chart spotlight

Skyline commentary: According to Ember’s Global Electricity Review 2026, Canada is lagging behind the Group of Seven (G7) industrialized countries when it comes to wind and solar electricity generation capacity. This infers a growth runway that has much further to go in Canada, where an outsized percentage of electricity is still generated through hydro-electric and nuclear means. But this may be changing.

According to the Canadian Renewable Energy Association, solar, wind and energy storage capacity will double in Canada by 2035, based on the projects recently approved by provincial utilities. This is echoed by the Canadian Climate Institute, which projects similar increases.

Within the greater context of Canada’s energy mix shift, federal government Clean Electricity Regulations that would come into effect in 2035 and would require all electricity generation to be from non-emitting sources by 2050.

Watch Skyline CFO, Wayne Byrd’s Q1 video address for a complete overview of the quarter’s key results and insights.