Transcript
00:14 — Wayne Byrd:
Hi, I’m Wayne Byrd, Chief Financial Officer at Skyline. Thank you for joining us for our Q1 2026 update covering all of Skyline’s investment products.
The first quarter marked a strong start to the year across our apartment, industrial, retail, and clean energy portfolios. In a market environment that continues to be shaped by economic uncertainty, policy shifts, and broader market volatility, Skyline’s disciplined investment approach remained focused on what matters most: stable income generation, operational performance, and long-term value creation for investors.
Unless otherwise indicated, all numbers provided are on a year-over-year basis.
Let’s begin with Skyline Apartment REIT (real estate investment trust). In Q1 2026, 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 throughout the quarter, with average in-place rent rising 4.44%, outpacing the Canadian multi-residential annual growth rate of 2.7%.
Operationally, the REIT continued to demonstrate resilient performance amid evolving market conditions. Total income increased 0.92% while net operating margin expanded 3.6% as disciplined cost management helped offset a slight decline in occupancy.
Operating expenses declined 6.42%, contributing to an 8.02% increase in net operating income, or NOI. Importantly, these factors helped drive a 13.65% increase in funds from operations (FFO), the REIT’s primary measure of operating cash flow performance.
Strategically, our continued focus on purpose-built rental housing in secondary and tertiary markets has helped reduce exposure to more cyclical segments of real estate while supporting stable income generation and downside protection.
Combined with national diversification outside of more volatile primary markets, the portfolio remains very well positioned to navigate changing market conditions while continuing to serve a fundamental housing need across the communities in which we operate.
We now turn to Skyline Industrial REIT, whose investment property fair value increased modestly to approximately $1.78 billion. The portfolio now spans more than 10 million square feet of gross leasable area across 51 properties in five provinces, and serves 173 tenants nationally.
The REIT also continues to advance seven active development projects, with several anticipated to stabilize over the next year as we expand and strengthen the portfolio over the long term.
From an operational standpoint, average in-place rent increased 4.43% to $9.90 per square foot, supported by healthy leasing fundamentals. Base rental revenue increased 0.97%, with a growing proportion of revenue generated through core rental activity.
Net operating income came in at $23.82 million, while net operating margin compressed slightly by 1.2% to 66.6%, reflecting normal variability within the portfolio despite continued leasing strength.
With broader industrial markets continuing to stabilize, and supply and demand moving toward balance, properties anchored by strong tenants and embedded leasing upside remain well positioned for sustained performance.
We now turn to Skyline Retail REIT, where investment property fair value increased 2.91% to $1.66 billion. This growth was supported by the addition of the Paradise, NL grocery-anchored retail plaza acquired in late 2025.
Today, the portfolio comprises more than 5.2 million square feet of gross leasable area across 109 properties in five provinces. Operationally, the REIT continued to deliver steady results throughout the quarter.
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. Net operating income increased 1.89% to $23.54 million, while net operating margin came in at 59%.
Together, these results contributed to an increase in FFO to $12.17 million, reflecting continued operating cash flow growth driven by stable rent increases and disciplined portfolio management.
Even amid slower population growth nationally, the essential retail sector continues to benefit from strong fundamentals, particularly in secondary and tertiary markets where quality retail space remains limited. The REIT’s expansion into Atlantic Canada reflects our continued focus on identifying markets with untapped long-term potential while strengthening the REIT’s national footprint.
Importantly, the portfolio’s concentration in necessity-based retail continues to support resilient occupancy and stable cash flow generation even during periods of broader economic uncertainty.
Lastly, Skyline Clean Energy Fund continued to build momentum through the first quarter of 2026. As at quarter end, the fund had approximately $420 million in assets under management, comprised of 84 solar projects and two biogas facilities with total generation capacity of 95.36 MW DC (megawatts of direct current) across the portfolio.
Total revenue increased 31.17% to $74.54 million, driven primarily by a significant increase in biogas revenue associated with the monetization of clean fuel regulation credits generated between 2022 and 2025.
This revenue growth supported meaningful margin expansion, with net operating margin increasing from 26.26% to 35.42%. As a result, net operating income increased to $26.41 million, reflecting both stronger top-line performance and improved operating leverage across the portfolio.
Looking ahead, SCEF (Skyline Clean Energy Fund) continues advancing capital upgrades across the fund’s solar portfolio through its repowering initiative. These projects are expected to generate project-level internal rates of return while supporting increased energy production and stronger long-term revenue growth across the portfolio.
As demand for renewable infrastructure continues to accelerate across Canada, we believe the fund remains very well positioned to benefit from the long-term transition towards cleaner and more resilient energy systems.
Across all of Skyline’s investment products, our focus remains consistent: maintaining disciplined portfolio management, investing in essential real assets, and prioritizing long-term fundamentals over short-term market noise.
While volatility may continue to shape the broader investment landscape, we believe portfolios built on durable income streams, operational resilience, and strategic diversification remain well positioned to support investors through changing market conditions.
Thank you for joining us, and we look forward to providing our next quarterly update.
Thank you. For more information, email us at Invest@SkylineWealth.ca or call 1(888) 977-7348