Transcript
00:19 — Wayne Byrd:
Hi, I’m Wayne Byrd, Chief Financial Officer at Skyline. Thanks for joining me for this Q1 2025 update across our four investment funds.
While market conditions remain dynamic, our goal stays the same: to deliver stable income, preserve investor capital, and support long-term unit value growth.
Now, let’s walk through the performance highlights for each fund, and more importantly, what they mean for you as an investor.
Let’s begin with Skyline Apartment REIT, our largest fund by portfolio value. In Q1, the REIT’s fair market value rose to $5.1 billion, with over 21,000 suites across 52 communities in seven provinces. Rental income grew by 2.2% year over year, reaching $94.15 million. Funds from operations (FFO) per unit for Q1 came in at 2.23 cents, compared to a budgeted 2.29 cents.
Elevated market prices on hydro over the winter months contributed to $2.5 million in extra utility costs, equivalent to 3.2 cents of FFO. We anticipate recovering approximately half of this utility variance over the remainder of the year as cost fluctuations stabilize.
While we are closely monitoring expenses, it’s important to note that rental demand remains strong and occupancy across the portfolio is very healthy. For our investors, this means the Apartment REIT continues to provide stable, essential housing backed by long-term income potential and prudent management, despite some short-term margin pressure.
Skyline Industrial REIT delivered another solid performance, with portfolio value increasing to $1.79 billion. Our industrial footprint now spans over 10,000,000 square feet across 51 properties.
Base rental revenue rose nearly 15% year over year to $23.3 million, driven by a record-high average in-place rent of $9.48 per square foot. Total income held steady at $35.44 million, reflecting consistency despite timing-related impacts on other income. Net operating income for the quarter was $24.04 million, with an NOI margin of 67.8%. FFO came in at $11.49 million, virtually flat compared to Q1 2024.
With a portfolio-wide availability rate well below the national average, we’re continuing to see strong tenant retention and sustained rental growth. For investors, this fund remains a reliable performer with consistent income, low volatility, and strong fundamentals supporting future upside.
Skyline Retail REIT had a strong start to 2025. In January, [its] unit value increased by $0.25 to $15.75, a meaningful signal of confidence for our investors. The portfolio now comprises 108 properties with a total fair value of $1.61 billion.
Rental fundamentals remain solid. Base rental revenue hit a record $24.82 million, and total income for the quarter reached $38.74 million, up 2.8% year over year. NOI was $23.1 million, reflecting a 2.2% increase, and NOI margin held firm at 59.6%. FFO grew to $11.83 million, a healthy 7.8% increase compared to last year. Committed retail occupancy remained strong at 98.7%, and constrained supply of available space for lease continues to support further rental growth, with leasing spreads tracking ahead of last year’s record performance.
There remains sustained demand for essential service tenants and investors alike for well-located retail real estate. For our investors, this means dependable monthly distributions backed by a stable tenant mix and strategic growth.
Skyline Clean Energy Fund also started the year on a strong note, with a unit value increase of $0.45 in January, followed by an additional $0.34 increase after quarter end in April. That brings the fund’s unit value to $17.99, delivering a trailing 12-month return of 9.1%.
While the Clean Energy Fund financials follow a slightly different reporting structure, the fund continues to generate strong recurring revenue across its solar and biogas platforms. We’re seeing a healthy split of revenue from both asset classes, with solar providing consistency and biogas offering long-term growth potential.
Operationally, we are preparing for increased volumes in 2025. New feedstock contracts at the Elmira, Ontario and Lethbridge, Alberta biogas facilities are already expanding our organic waste processing pipeline. And a major infrastructure investment: the new depackaging line at Lethbridge is tracking ahead of performance expectations.
For our investors, Skyline Clean Energy Fund provides diversified exposure to the renewable energy sector with reliable returns, real asset backing, and strong ESG alignment.
Across all our funds, we continue to prioritize income stability, asset quality, and long-term growth. While market conditions may shift, we remain disciplined in our strategy, confident in our assets, and focused on creating value for you, our investors.
Thank you for your continued trust in Skyline. We look forward to keeping you informed and invested in what matters most.