Transcript
00:19 — Wayne Byrd:
Hi, I’m Wayne Byrd, Chief Financial Officer at Skyline. Thanks for joining me for this Q2 2025 update across our four investment funds.
While market conditions remain fluid, our focus remains on delivering stable income, strong risk-adjusted returns, and sustained long-term unit value growth.
Now, let’s review each fund’s performance highlights and what they mean for you as an investor. All comparisons are provided on a year-over-year basis unless otherwise indicated.
Let’s begin with Skyline Apartment REIT, our largest fund by portfolio value. In Q2, the REIT’s fair market value rose to $5.17 billion, with over 20,700 suites across 50 communities in seven provinces. Notably, average in-place rent grew 7.7%—a standout increase given the easing in market rents nationwide. Overall, strong rental growth drove a 1.29% increase in total rental income, with net operating income (NOI) rising 3.03% to $54.1 million.
This increase was reflected in NOI margin reaching a 12-month high of 56.53%, indicating the REIT’s property portfolio is generating a high percentage of profit from its revenues after covering overhead costs. This was supported by disciplined cost control as operating expenses fell 0.88% over the period.
Funds from operations (FFO), a key measure of the fund’s profitability, climbed 5.86% to $23.46 million, while economic occupancy remained strong at 95%—virtually unchanged from 95.37% a year earlier.
Amid one of the most challenging rental and residential housing markets in a generation, we are extremely pleased with these latest results. [The] Apartment REIT continues to deliver for our investors, and we remain confident in the portfolio’s ability to generate steady, long-term cash flow in the years ahead.
We now turn to Skyline Industrial REIT, whose portfolio held steady at approximately $1.79 billion, with gross leasable area spanning over 10 million square feet across 51 properties. Base rental continued to show strength, rising 7.74% year over year to $23.54 million, driven by a record-high average in-place rent of $9.53 per square foot. Total income and NOI remained steady year over year, while FFO rose 3.53%, reflecting stronger free cash flow generation.
Meanwhile, the occupancy rate remained strong at 98.1%, with a portfolio-wide availability rate remaining below the national average. We’re continuing to see strong tenant retention and sustained rental growth.
Overall, these results underscore the portfolio’s underlying strength, highlighting its ability to maintain sound occupancy, steady income, and consistent cash flow generation metrics.
Shifting focus to Skyline Retail REIT, with a portfolio value at approximately $1.61 billion, encompassing over 5.16 million square feet of gross leasable area. From a top-line perspective, total income revenue grew 0.7% to $37.64 million, driven by a 2.78% increase in average annual in-place rent. FFO came in virtually unchanged at $11.12 million.
Committed retail occupancy remained strong at 98.4%, as constrained supply of available space for lease continues to support consistent rental growth and leasing spreads.
We continue to see sustained demand for essential service tenants for well-located retail real estate in secondary and tertiary markets. For our investors, stable income and strong occupancy remain key highlights, supported by a strong tenant base made up of some of Canada’s leading essential retailers.
Lastly, Skyline Clean Energy Fund exited the quarter with approximately $382 million in assets under management, comprised of 80 solar projects and two biogas facilities with a total generation capacity across the portfolio of 94,716 kilowatts. Total revenue showed considerable growth, rising 28.92% on an annual basis, with approximately 69% of revenue concentrated in the fund’s solar portfolio.
NOI came in at $16.69 million, which was a 24.31% increase from a year ago. So far this year, NOI for the biogas portfolio has exceeded budget by 23% as continued federal government support has had a positive impact on credit prices tied to emissions reduction.
And subsequent to quarter end, on July 2, the fund’s Board of Trustees approved a $0.51 unit value increase from $17.99 to $18.50.
With considerable policy and renewable energy procurement tailwinds continuing for the foreseeable future, Skyline Clean Energy Fund remains well positioned to continue its growth trajectory in the coming quarters.
Across all our funds, we continue to guide our funds with a steady hand, prioritizing stable income, asset strength, and growth that endures over the long term. Even as conditions change, our disciplined approach allows us to stay ahead, delivering consistent value to you, our investors.
We are grateful for your trust and excited about the opportunities ahead.