Choice Properties REIT (CHP-UN-T) reports in its Q1 2025 financials it has made $340.3 million in acquisitions during the past couple of weeks; a Toronto-area distribution centre from its largest shareholder Loblaw, and a portfolio of outdoor industrial storage properties.

Choice acquired the new-build Loblaw warehouse at 500 Bayly St. E. in Ajax for $182.3 million. The facility was developed specifically for, and is occupied by Loblaw, and the transaction was structured as a sale-leaseback of the property.

The almost 1.1-million-square-foot facility incorporates both standard warehouse storage as well as refrigerated and frozen-food areas, and offers ample truck parking and facilities.

Designed to incorporate a series of sustainability and low-energy features, it also includes a 24,000-square-foot dunnage area and a gas bar.

It is located near a major industrial hub in Ajax, just west of Toronto, and offers easy access to the Hwy. 401 corridor just a kilometre away.

Loblaw also acquired eight outdoor industrial storage sites from an undisclosed vendor for $158 million. Choice did not release any further information about that transaction, other than to state the properties are located across Canada.

Both of the transactions occurred after the end of Q1 on March 31.

Choice had also completed $95.2 million of transactions during Q1, acquiring one retail property, and disposing of three retail properties and a 50 per cent interest in a retail land parcel.

Choice Properties Q1 financial highlights

“Choice Properties delivered a solid first quarter of 2025. Occupancy remained high, and same-asset NOI growth and leasing spreads continued to be strong,” Rael Diamond, Choice Properties’ president and CEO, said in a prepared statement about the trust’s Q1 financials. “Supported by a resilient tenant base and our industry leading balance sheet, we continue to pursue growth opportunities, including the acquisition of $340 million of investment properties subsequent to quarter end.”

The company holds a portfolio of over 700 assets comprising over 67.2 million square feet of space, and valued at over $17 billion as at the end of fiscal 2024. It has a very close relationship with Loblaw, whose banners comprise over 55 per cent of its tenancies.

Choice reported a net loss of $96.2 million in the quarter, mainly due to unfavourable fair value adjustments in its exchangeable units, it states. In the same period in 2024, Choice reported a net income of $142.3 million.

Choice did announce its third consecutive annual distribution increase, raising the payouts to unitholders by 1.5 per cent.

On the revenue side, Choice reported funds from operations per unit (diluted) of $0.264, an increase of 1.9 per cent compared to the same prior year period. Its same-asset NOI increased by 2.9 per cent compared to Q1 2024, with retail at 1.5 per cent, industrial at 6.1 per cent and mixed-use and residential at 15.4 per cent (though the latter is impacted by a property tax incentive recorded in the quarter).

Occupancy was 97.7 per cent across the entire portfolio, with: retail at 97.8 per cent; industrial at 97.7 per cent, and mixed-use and residential at 94.9 per cent.

Choice continued to achieve healthy leasing spreads on long-term renewals of 10.3 per cent and 16.6 per cent in the retail and industrial portfolios, respectively.

It also completed $436 million in financings:

• Its $300-million Series V senior unsecured debenture; and
• a $136-million at-share mortgage for a Loblaw distribution centre at Choice Caledon Business Park.

The REIT ended the quarter with approximately $1.5 billion of available credit and a $13.1-billion pool of unencumbered properties.