Automotive Properties boosts distribution after Q2 AFFO rises 18%

Automotive Properties (TSX: APR ) released second-quarter financial results and hosted an earnings call on Friday.

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For comprehensive financial data and transcripts, visit Access the full call at Summary Automotive Properties REIT reported a 22.8% increase in property rental revenue and an 18% rise in AFFO, with AFFO per unit reaching a record 26.3 cents, driven by recent property acquisitions and rent increases.

The company announced a 2% increase in annual cash distribution, reflecting confidence in stable cash flow, supported by lease renewals and new agreements, including a 16-year triple net lease in Vaughan.

Future outlook includes continued expansion in the U.S. and Canada, with a focus on geographic and tenant diversity, and leveraging high-demand automotive facilities for sustained growth and portfolio strength.

Full Transcript Morgan, Operator Good morning, ladies and gentlemen, and welcome to Automotive Properties REIT's 2026 Second Quarter Results conference call and webcast.

At this time, all lines are in a listen-only mode.

Following management's remarks, we will conduct a question-and-answer session.

Please be aware that certain information discussed today may be forward-looking in nature.

Such forward-looking information reflects the REIT's current views with respect to future events.

Any such information is subject to risks, uncertainties, and assumptions that could cause actual results to differ materially from those projected in the forward-looking information.

For more information on the risks, uncertainties, and assumptions relating to forward-looking information, please refer to the REIT's latest MD&A and Annual Information Form, which are available on SEDAR+.

Management may also refer to certain non-IFRS financial measures.

Although the REIT believes these measures provide useful supplemental information about financial performance, they are not recognized measures and do not have standardized meanings under IFRS.

Please refer to the REIT's latest MD&A for additional information regarding non-IFRS financial measures.

This call is being recorded on August 14, 2026.

I would now like to turn the conference over to Milton Lamb, President and CEO.

Please go ahead, Mr.

Lamb.

Milton Lamb, President and CEO Thank you, Morgan, and good morning, everyone.

With me on our call is Andrew Calra, our Chief Financial Officer.

Our strong second quarter performance reflects the positive impact of the property acquisitions we completed during 2025 and Q1 of this year, plus partial contribution of the three properties we acquired in Greater San Diego and Santa Ana, California in early Q2.

Compared to Q2 of last year, our property rental revenue has increased by 22.8%, cash NOI is up 20%, AFFO has increased by 18%, and AFFO per unit diluted increased to 26.3 cents from 24.9 cents.

This represents a record quarterly AFFO per unit amount for APR/UN, up from our prior record of Q1 this year, demonstrating the positive impact of our acquisitions and embedded growth from contractual fixed or CPI-adjusted rent increases in our net lease structure.

This is further reflected in our reduced AFFO payout ratio of 78.3% in the quarter compared to 80.7% in Q2 of last year, despite our distribution increase last year and issuance of REIT units through the completion of our $57 million equity offering last October.

With our strong financial performance, the REIT's trustees have approved an increase of approximately 2% to our annual cash distribution from 82.2 cents to 83.9 cents per unit.

Our new monthly distribution will be 6.99 cents per unit, up from 6.85 cents.

This increase will be effective for this month's distribution to be paid on or about September 15, 2026, to unitholders of record on August 31, 2026.

This marks the second consecutive year we have implemented a distribution increase, which highlights our confidence in the stability of our cash flow.

Further to the underlying stability of our cash flow, we were active in Q2 renewing several of our leases, including one of our dealership properties in Vancouver and one of our dealership properties in Regina, which were extended by an average of seven and a half years with base rent increases of approximately 4.8%, with subsequent annual fixed rent increases.

Our VW Des Sources dealership property in Montreal was extended beyond its current lease maturity of 2027 for a further six years, subject to a CPI adjustment in 2027.

One of our dealership properties in Calgary was also extended by five years at rents to be agreed upon as that renewal commences.

We also announced yesterday that, subsequent to quarter end, we entered into a new lease and joint arrangement with a member of the Dilawri Group, pursuant to which we've agreed to lease our 69,000 square foot automotive dealership property located at 9088 Jane Street in Vaughan under a 16-year triple net lease, whereby the landlord has a redevelopment option.

We expect rent payments to commence on December 1, 2026.

Concurrently, we've agreed to sell a 50% interest in the property for a cash purchase price of $16 million, reflecting a premium to IFRS value.