Transcript
00:14 — Wayne Byrd:
Hi, I’m Wayne Byrd, Chief Financial Officer at Skyline. Thanks for joining me for this Q3 2025 update across our four investment funds.
While market and economic conditions have remained somewhat challenging, Skyline continued to deliver stable income and strong risk-adjusted returns for investors.
Now, let’s dive into 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 Q3, the REIT’s fair market value rose to $5.25 billion, with 20,731 suites across 50 communities in seven provinces. Notably, average in-place rent grew 5.89% vs. a 4.8% annual growth average for the multi-family market in the previous quarter.
Overall, steady in-place rent growth drove a 0.64% increase in total income to $95.46 million, while gross potential rent—the total rental income a property could generate if every unit or space were 100% leased at market—increased 1.87%.
Net operating income margin (NOI percent) came in at 57.19%, a full two percentage points above the 2025 annual forecast of 55.18%, while economic occupancy eased slightly, but remained virtually unchanged a year earlier.
Amid a slowdown in immigration growth in Canada, we are extremely pleased with these latest results. With no exposure to deeply underperforming student housing and metro condominium markets, [the] Apartment REIT’s concentration in purpose-built multi-family assets in secondary and tertiary markets remains well positioned to benefit from gradually improving rental market conditions across Canada.
We now turn to Skyline Industrial REIT, whose portfolio held steady at approximately $1.77 billion, with gross leasable area spanning over 10 million square feet across 51 properties in five provinces.
Base rental continued to show strength, rising 2.85% year over year to $23.44 million, driven by a near-record high average in-place rent of $9.52 per square foot. Total income increased 1.13% to $34.96 million, while funds from operations (FFO) rose 3.77%, reflecting a stronger free cash flow generation over the previous year.
The occupancy rate registered 97.2% and remains above the Canadian industrial average, demonstrating that core fundamentals remained strong even with lingering tariffs and investment climate uncertainty. With a portfolio-wide vacancy rate remaining well below the national average of 5.4%, we’re continuing to see strong tenant retention and sustained rental growth.
Overall, these results underscore the portfolio’s resiliency in a moderating market environment, highlighting its ability to maintain strong occupancy, steady income, and consistent cash flow generation.
We now turn to Skyline Retail REIT, with a portfolio valued at approximately $1.61 billion, encompassing over 5.16 million square feet of gross leasable area across 108 properties in four provinces.
On the top line, base rental revenue grew 0.28% to $24.98 million, driven mainly by a 2.82% increase in average annual in-place rent, which reached a record high of $20.02 per square foot. FFO came in virtually unchanged at $11.93 million over the prior year.
Economic occupancy rose slightly to 97.4% as demand for quality space continues to outstrip available supply, and we continue to see sustained demand for essential service tenants for well-located properties in secondary and tertiary markets. Notably, leasing spreads on existing space remain on track to surpass last year’s record performance.
For our investors, stable income and strong occupancy remain key highlights, supported by a tier one tenant base made up of some of Canada’s leading essential retailers.
Lastly, Skyline Clean Energy Fund exited the quarter with approximately $400 million in assets under management, comprised of 84 solar projects and two biogas facilities with a total generation capacity across the portfolio of 94.72 MW/DC (megawatts of direct current).
Total revenue showed considerable growth, rising 10.28% on an annual basis, with approximately 69% of revenue concentrated in the Fund’s solar portfolio. NOI came in at $20.46 million, which was a 25.6% increase from a year ago.
Subsequent to the quarter end on October 1, the Fund’s Board of Trustees approved a $0.25 unit value increase from $18.50 to $18.75 per unit, resulting in a one-year return of 9.01%.
While Canada’s solar and energy storage capacity is projected to grow by as much as 800-1200% by 2035, Skyline Clean Energy Fund is positioned to benefit from the rapid expansion of renewable power uptake over the coming decade.
Across all our funds, our ability to perform admirably through one of the most challenging periods in Canadian real estate in a generation has made us stronger, and we are confident in our ability to capitalize on a stronger macroeconomic and real estate environment over the next quarter and beyond.