• Distribution Increase
  • Continued steady growth of ACFO and FFO and poised for substantial FFO growth in 2020
  • Outstanding acceptance by purchasers of Transit City Condo Towers 4 and 5
  • Both SmartCentres Place Office Towers 100% leased

TORONTO, Aug. 08, 2019 (GLOBE NEWSWIRE) -- SmartCentres Real Estate Investment Trust ("SmartCentres" or the "Trust") (TSX: SRU.UN) is pleased to report its financial and operating results for the second quarter ended June 30, 2019.

“The second quarter demonstrated both the resiliency of our retail portfolio and the strong impact of our development projects,” said Peter Forde, President & CEO. “Investors saw an increase in our ACFO and FFO while we move forward with the development of our intensification initiatives. Our development team is now actively pursuing 168 mixed use projects on our existing properties. SmartCentres is in an excellent position to provide unitholders with a steady and growing distribution stream.”

Key business development highlights for the three months ended June 30, 2019 include the following:

  • Transit City Condo Towers 4 and 5 in SmartCentres Place at the VMC (“Towers 4 and 5”) were substantially sold out. Towers 4 and 5 is a joint venture between the Trust, Penguin ("Penguin" refers to entities controlled by Mitchell Goldhar), and CentreCourt. Once complete, Towers 4 and 5 will be 45 and 50 storeys, respectively, consisting of 1,026 residential units, located adjacent to the VMC subway station. Towers 4 and 5, designed by Diamond Schmitt Architects, will complement Transit City Condo Towers 1, 2 and 3 which are currently under construction and when complete will each be 55 storeys, with a total of 1,741 residential units. Concurrent with the development of Towers 4 and 5, together with Penguin, the Trust intends to complete a 35-storey, 451-unit, purpose-built rental building on the site. Upon completion of these first five phases of condo towers and rental building, Transit City will have 3,218 new residential units.

Operational

  • Committed and in-place occupancy rates were 98.0% and 97.8%, respectively, as at June 30, 2019, as compared to 98.2% and 98.0%, respectively, as at June 30, 2018. Outlook for new leasing remains strong.
  • Rentals from investment properties and other was $196.7 million, as compared to $197.6 million in the same period in 2018, representing a decrease of $0.9 million or 0.4%.(1) This is a result of tenant bankruptcies previously announced.
  • Developments and Earnouts totalling 44,250 square feet and 5,682 square feet, respectively, were completed during the quarter yielding a 5.63% average return, which is a higher return than would otherwise typically be available through acquisitions in the current market environment.
  • PwC took possession of its new 77,000 square feet of office space to complete its 'fit-out' work and is expected to open its new office at SmartCentres Place in the fall of 2019. The Trust together with Penguin each own a 50% interest in this new office tower.
  • The Toronto Premium Outlets, co-owned with Simon Properties, continue to experience high sales levels with approximately $1,150 per square foot, which ranks in the top tier of retail centres in Canada.
  • Without the impact of recent tenant bankruptcies, Same properties’ NOI would have increased by approximately 1.0%, however, actual Same properties’ NOI decreased by $0.4 million or 0.3% as compared to the same period in 2018 as a result of the tenant bankruptcies previously announced.(2)
  • The weighted average stabilized capitalization rate for the Trust’s investment property portfolio was 5.90% (December 31, 2018 – 5.92%).(2)

Financial

  • The Trust redeemed $150.0 million aggregate principal amount of 3.749% Series L senior unsecured debentures due February 11, 2021 (the “Series L Debentures”), constituting all of the Series L Debentures outstanding.
  • The Trust arranged a $170.0 million unsecured bank loan at a fixed rate of 3.256% for seven years with a major Canadian financial institution, with part of the proceeds used to redeem the Series L Debentures.
  • Net income and comprehensive income for the quarter and comparable period were $95.5 million and $103.7 million, respectively. These results include IFRS fair value gains on investment properties for the quarter of $4.0 million as compared to $14.6 million for the same period in 2018 representing a change of $10.6 million. Accordingly, the primary reason for net income and comprehensive income for the quarter being $8.2 million less than the prior year's comparable quarter can be primarily attributed to the lower level of IFRS fair value gains recorded in the second quarter of 2019.(1)
  • Net income and comprehensive income excluding loss on disposition and fair adjustments was $86.2 million as compared to $87.1 million in the same period in 2018, representing a decrease of $1.0 million or 1.1%, which was primarily attributed to yield maintenance costs of $4.3 million recorded during the quarter ended June 30, 2019.(2)
  • FFO with one time adjustment for yield maintenance costs increased by $5.1 million or 5.6% to $96.1 million, while per Unit amounts of $0.56 remained the same, as compared to June 30, 2018.(2)
  • ACFO with one time adjustment increased by $7.2 million or 8.2% to $95.6 million as compared to the same period in 2018.(2)
  • ACFO with one time adjustment exceeded both distributions declared and distributions paid by $18.6 million and $35.7 million, respectively, as compared to the same period in 2018 of $17.7 million and $31.6 million, respectively.(2)
  • The Trust’s unencumbered pool of high-quality assets increased to $4.5 billion, representing an increase of $559.1 million or 14.2%  as compared to June 30, 2018.(2)
  • Debt metrics further improved over the comparable quarter in 2018 including Debt to Aggregate Assets of 41.8%, Interest Coverage multiple of 3.3X, Interest Coverage net of capitalized interest multiple of 3.8X, and Debt to Adjusted EBITDA multiple of 7.8X.

Development and Intensification

  • Of the 168 mixed-use initiatives planned on 76 of the 164 investment properties owned by the Trust, 33 are currently underway.
  • The new 144,000 square foot expansion at Toronto Premium Outlets is now fully leased and occupied.
  • 100% of office space in both the KPMG Tower and PwC-YMCA Tower is now leased.
  • In addition to existing/committed tenants including TD Bank and BMO, continuing to work with new retail tenants for balance of ground floor space in the KPMG Tower.
  • Construction progress for the three 55-storey Transit City 1, 2 and 3 condo towers, representing 1,741 pre-sold residential units, continues on time and on budget, with concrete currently being poured at 40th, 30th and 10th floors, respectively.
  • Transit City 4 and 5 condo towers, representing 1,026 residential units, substantially sold out during the quarter at an average price exceeding $850 per square foot with construction expected to begin later this year.
  • Re-routing of the new off/on ramps from Hwy 400 to Hwy 7 is now complete, with vehicular access directly into SmartCentres Place expected to soon open.

Subsequent to Quarter End:

  • The Trust and Penguin signed a 10-year (plus two five-year extensions) lease transaction with Scotiabank in the PwC-YMCA Tower at SmartCentres Place in the VMC. The PwC-YMCA Tower is a 220,000 square foot mixed-use office tower located in the heart of the VMC adjacent to the VMC subway station and bus terminal. Scotiabank will occupy 26,500 square feet, with 23,000 square feet of office space on the 8th floor of the PwC-YMCA Tower, with the balance for a retail branch in the lobby of the tower. Occupancy is targeted for the fall of 2019.
  • The Trust has entered into a partnership agreement with Selection Group to develop a mixed-use complex at SmartCentres’ Laurentian Place shopping centre in Ottawa, Ontario. The development will consist of a 13-storey apartment building with 180 units and a 14-storey independent supportive living tower with 230 units. The two buildings will rise above a two-level podium structure that will contain some shared common facilities as well as some independent retail shops and services. Three levels of underground parking will also be provided. Construction is expected to begin in the spring of 2020.
  • On August 8, 2019, the Board of Trustees approved an increase of $0.05 per Unit (2.8%) in annual distributions to $1.85 per Unit effective October 2019.

(1)         Represents a GAAP measure.
(2)         Represents a non-GAAP measure. See “Presentation of Non-GAAP Measures” in the MD&A.


Selected Consolidated Financial and Operational Information
The consolidated financial and operational information shown in the table below includes the Trust’s share of equity accounted investments, see the “Equity Accounted Investments” section in the MD&A for details, and represents key operational and financial information as at June 30, 2019, December 31, 2018 and June 30, 2018.

    
(in thousands of dollars, except per Unit and other non-financial data)June 30, 2019December 31, 2018June 30, 2018
Operational Information   
Number of retail and other properties 152  152  154 
Number of properties under development 7  7  7 
Number of office properties   1    1    1 
Number of mixed-use properties   4    4   2 
Total number of properties with an ownership interest 164  164  164 
Gross leasable area (in thousands of sq. ft.) 34,252  34,379  34,207 
Future estimated retail development area (in thousands of sq. ft.) 3,340  3,214  4,046 
Lands under Mezzanine Financing (in thousands of sq. ft.) 615  615  615 
Committed occupancy rate 98.0%  98.1%  98.2% 
In-place occupancy rate 97.8%  98.0%  98.0% 
Average lease term to maturity 5.2 years  5.4 years  5.7 years 
Net retail rental rate (per occupied sq. ft.)$15.38 $15.31 $15.22 
Net retail rental rate excluding Anchors (per occupied sq. ft.)$22.01 $21.77 $21.57 
    
Financial Information   
Investment properties(2)(3) 9,229,352  9,155,173  9,046,739 
Total assets(1) 9,676,090  9,459,632  9,513,881 
Total unencumbered assets(2) 4,499,700  4,250,800  3,940,600 
Debt(2)(3) 4,127,264  4,236,364  4,296,836 
Debt to Aggregate Assets(2)(3) 41.8%  43.9%  44.7% 
Debt to Gross Book Value(2)(3) 48.5%  51.1%  51.4% 
Interest Coverage(2)(3) 3.3X  3.3X  3.2X 
Interest coverage (net of capitalized interest expense)(2)(3) 3.8X  3.8X  3.8X 
Debt to Adjusted EBITDA(2)(3) 7.8X
  8.2X  8.5X 
Equity (book value)(1) 5,286,865  5,008,331  4,921,463 


(1)   Represents a GAAP measure.
(2)   Represents a non-GAAP measure. The Trust’s method of calculating non-GAAP measures may differ from other reporting issuers’ methods and accordingly may not be comparable. For definitions and basis of presentation of the Trust’s non-GAAP measures, refer to the “Presentation of Non-GAAP Measures” section in the MD&A.
(3)   Includes the Trust’s share of equity accounted investments.
     


Quarterly Comparison to Prior Year

The following table represents key financial, per Unit, and payout ratio information for the three months ended June 30, 2019 and June 30, 2018:

(in thousands of dollars, except per Unit information)June 30, 2019June 30, 2018Variance
 (A)(B)(A–B)
Financial Information   
Rentals from investment properties and other(1) 196,746 197,561 (815)
Net income and comprehensive income(1) 95,513 103,748 (8,235)
Cash flows provided by operating activities(1) 80,767 100,994 (20,227)
Net income and comprehensive income excluding loss on disposition and fair value adjustments(2)(3) 86,158 87,135 (977)
NOI(2) 128,217 126,708 1,509
FFO(2)(3)(4)(5) 91,781 91,036 745
FFO with one time adjustment for yield maintenance costs(2)(3)(4) 96,121 91,036 5,085
FFO with one time adjustments and Transactional FFO(2)(3)(4) 96,121 95,012 1,109
ACFO(2)(3)(4)(5) 91,244 88,355 2,889
ACFO with one time adjustment(2)(3)(4) 95,584 88,355 7,229
Distributions declared 76,985 70,634 6,351
Surplus of ACFO with one time adjustment over distributions declared(2) 18,599 17,721 878
Surplus of ACFO with one time adjustment over distributions paid(2) 35,676 31,617 4,059
    
Units outstanding(6) 170,118,375 160,704,177 9,414,198
Weighted average – basic 169,858,745 160,415,583 9,443,162
Weighted average – diluted(7) 170,718,814 161,220,808 9,498,006
    
Per Unit Information (Basic/Diluted)   
Net income and comprehensive income$0.56/$0.56$0.65/$0.64$-0.09/$-0.08
Net income and comprehensive income excluding loss on disposition and fair value adjustments$0.51/$0.50$0.54/$0.54$-0.03/$-0.04
FFO(2)(3)(4)(5)$0.54/$0.54$0.57/$0.56$-0.03/$-0.02
FFO with one time adjustment for yield maintenance costs(2)(3)(4)$0.57/$0.56$0.57/$0.56$0.00/$0.00
FFO with one time adjustments and Transactional FFO(2)(3)(4)$0.57/$0.56$0.59/$0.59$-0.02/$-0.03
Distributions declared$0.450$0.437$0.013
    
Payout Ratio Information   
Payout ratio to FFO(2)(3)(4)(5) 83.7% 77.5% 6.2%
Payout ratio to FFO with one time adjustment for yield maintenance costs(2)(3)(4) 79.9% 77.5% 2.4%
Payout ratio to FFO with one time adjustments and Transactional FFO(2)(3)(4) 79.9% 74.2% 5.7%
Payout ratio to ACFO(2)(3)(4)(5) 84.4% 79.9% 4.5%
Payout ratio to ACFO with one time adjustment(2)(3)(4) 80.5% 79.9% 0.6%


(1)   Represents a GAAP measure.
(2)   Represents a non-GAAP measure. The Trust’s method of calculating non-GAAP measures may differ from other reporting issuers’ methods and accordingly may not be comparable. For definitions and basis of presentation of the Trust’s non-GAAP measures, refer to the “Presentation of Non-GAAP Measures” section in the MD&A.
(3)   Includes the Trust’s share of equity accounted investments.
(4)   See “Other Measures of Performance” for a reconciliation of these measures to the nearest consolidated financial statement measure.
(5)   The calculation of the Trust’s FFO and ACFO and related payout ratios, including comparative amounts, are financial metrics that were determined based on the February 2019 REALpac White Paper on FFO and ACFO, respectively. Comparison with other reporting issuers may not be appropriate. The payout ratio to FFO and the payout ratio to ACFO are calculated as declared distributions divided by FFO and ACFO, respectively. 
(6)   Total Units outstanding include Trust Units and LP Units, including Units classified as liabilities. LP Units classified as equity in the unaudited interim condensed consolidated financial statements are presented as non-controlling interests.
(7)   The diluted weighted average includes the vested portion of the deferred unit plan.
     


Year-to-Date Comparison to Prior Year

The following table represents key financial, per Unit, and payout ratio information for the six months ended June 30, 2019 and June 30, 2018:

(in thousands of dollars, except per Unit information)June 30, 2019June 30, 2018Variance
 (A)(B)(A–B)
Financial Information   
Rentals from investment properties and other(1) 403,179 395,994 7,185
Net income and comprehensive income(1)(3) 175,486 204,214 (28,728)
Cash flows provided by operating activities(1) 133,349 144,794 (11,445)
Net income and comprehensive income excluding loss on disposition and fair value adjustments(2)(3) 169,062 170,834 (1,772)
NOI(2) 254,152 249,547 4,605
FFO(2)(3)(4)(5) 180,077 180,323 (246)
FFO with one time adjustment for yield maintenance costs(2)(3)(4) 187,942 180,323 7,619
FFO with one time adjustments and Transactional FFO(2)(3)(4) 187,942 184,789 3,153
ACFO(2)(3)(4)(5) 171,620 170,163 1,457
ACFO with one time adjustment(2)(3)(4) 179,485 170,163 9,322
Distributions declared 153,701 141,042 12,659
Surplus of ACFO with one time adjustment over distributions declared(2) 25,784 29,121 (3,337)
Surplus of ACFO with one time adjustment over distributions paid(2) 59,855 56,411 3,444
    
Units outstanding(6) 170,118,375 160,704,177 9,414,198
Weighted average – basic 168,706,565 160,180,885 8,525,680
Weighted average – diluted(7) 169,589,765 160,945,056 8,644,709
    
Per Unit Information (Basic/Diluted)   
Net income and comprehensive income$1.04/$1.03$1.27/$1.27$-0.23/$-0.24
Net income and comprehensive income excluding loss on disposition and fair value adjustments$1.00/$1.00$1.07/$1.06$-0.07/$-0.06
FFO(2)(3)(4)(5)$1.07/$1.06$1.13/$1.12$-0.06/$-0.06
FFO with one time adjustment for yield maintenance costs(2)(3)(4)$1.11/$1.11$1.13/$1.12$-0.02/$-0.01
FFO with one time adjustments and Transactional FFO(2)(3)(4)$1.11/$1.11$1.15/$1.15$-0.04/$-0.04
Distributions declared$0.900$0.875$0.025
    
Payout Ratio Information   
Payout ratio to FFO(2)(3)(4)(5) 84.8% 78.1% 6.7%
Payout ratio to FFO with one time adjustment for yield maintenance costs(2)(3)(4) 81.2% 78.1% 3.1%
Payout ratio to FFO with one time adjustments and Transactional FFO(2)(3)(4) 81.2% 76.2% 5.0%
Payout ratio to ACFO(2)(3)(4)(5) 89.6% 82.9% 6.7%
Payout ratio to ACFO with one time adjustment(2)(3)(4) 85.6% 82.9% 2.7%


(1)   Represents a GAAP measure.
(2)   Represents a non-GAAP measure. The Trust’s method of calculating non-GAAP measures may differ from other reporting issuers’ methods and accordingly may not be comparable. For definitions and basis of presentation of the Trust’s non-GAAP measures, refer to the “Presentation of Non-GAAP Measures” section in the MD&A.
(3)   Includes the Trust’s share of equity accounted investments.
(4)   See “Other Measures of Performance” for a reconciliation of these measures to the nearest consolidated financial statement measure.
(5)   The calculation of the Trust’s FFO and ACFO and related payout ratios, including comparative amounts, are financial metrics that were determined based on the February 2019 REALpac White Paper on FFO and ACFO, respectively. Comparison with other reporting issuers may not be appropriate. The payout ratio to FFO and the payout ratio to ACFO are calculated as declared distributions divided by FFO and ACFO, respectively. 
(6)   Total Units outstanding include Trust Units and LP Units, including Units classified as liabilities. LP Units classified as equity in the unaudited interim condensed consolidated financial statements are presented as non-controlling interests.
(7)   The diluted weighted average includes the vested portion of the deferred unit plan.


Operational Highlights

Excluding acquisition and disposition related gain or loss and fair value adjustments on both financial instruments and investment properties, net income for the three months ended June 30, 2019 decreased by $1.0 million or 1.1% as compared to the same period last year. This decrease was primarily attributed to the following:

  • $4.3 million increase in yield maintenance on redemption of unsecured debentures and related write-off of unamortized financing costs; and
  • $0.4 million increase in supplemental cost associated with the VMC (see also Note 6, “Equity Accounted Investments”, in the Trust’s unaudited interim condensed consolidated financial statements);

Partially offset by:

  • $1.5 million increase in NOI primarily attributed to Toronto Premium Outlets’ expansion and other Earnouts and Developments;
  • $1.4 million decrease in general and administrative expenses, principally resulting from both lower LTIP and DUP costs that are tied directly to the Trust’s Unit price; and
  • $0.8 million decrease in interest expense.

Excluding acquisition and disposition related gain or loss and fair value adjustments on both financial instruments and investment properties, net income for the six months ended June 30, 2019 decreased by $1.8 million or 1.1% as compared to the same period last year. This decrease was primarily attributed to the following:

  • $7.9 million increase in yield maintenance on redemption of unsecured debentures and related write-off of unamortized financing costs;
  • $0.7 million net decrease in CAM and realty tax recoveries primarily due to higher vacancy; and
  • $0.3 million increase in supplemental cost associated with the VMC (see also Note 6, “Equity Accounted Investments”, in the Trust’s unaudited interim condensed consolidated financial statements);

Partially offset by the following:

  • $3.7 million net increase in rental income primarily attributed to Toronto Premium Outlets’ expansion and other Earnouts and Developments;
  • $1.5 million increase in lease termination fees;
  • $1.5 million decrease in interest expense; and
  • $0.4 million decrease in general and administrative expenses.

FFO Highlights

For the three months ended June 30, 2019, FFO with one time adjustment of yield maintenance costs increased by $5.1 million or 5.6% to $96.1 million, while per Unit amounts remained the same. This increase of $5.1 million was primarily attributed to the following:

  • $1.5 million increase in NOI;
  • $1.5 million decrease in general and administrative expense;
  • $1.2 million increase in FFO add back for the salaries and related costs attributed to leasing activities; and
  • $0.9 million net decrease in interest expense.

For the six months ended June 30, 2019, FFO with one time adjustment of yield maintenance increased by $7.6 million or 4.2% to $187.9 million, and decreased by $0.01 or 0.9% to $1.11 on a per Unit basis primarily due to the dilutive impact of the $230.0 million equity offering in January 2019. This increase of $7.6 million was primarily attributed to the following:

  • $4.6 million increase in NOI;
  • $1.3 million net decrease in interest expense;
  • $1.1 million increase in FFO add back for the salaries and related costs attributed to leasing activities; and
  • $0.4 million decrease in general and administrative expense.

ACFO Highlights

For the three months ended June 30, 2019, ACFO with one time adjustment increased by $7.2 million or 8.2% to $95.6 million as compared to the same quarter in 2018 (see the "Results of Operations" section in the MD&A).

The Payout Ratio relating to ACFO with one time adjustment for the three months ended June 30, 2019 increased by 0.8% to 80.5% as compared to the same quarter last year, primarily as a result of 7,360,000 Units being issued as part of the $230.0 million equity offering in January 2019.

For the six months ended June 30, 2019, ACFO with one time adjustment increased by $9.3 million or 5.5% to $179.5 million as compared to the same quarter in 2018 (see the "Results of Operations" section in the MD&A).

The Payout Ratio relating to ACFO with one time adjustment for the six months ended June 30, 2019 increased by 3.3% to 85.6% as compared to the same quarter last year, primarily as a result of 7,360,000 Units being issued as part of the $230.0 million equity offering in January 2019.

Development and Intensification Summary

Collectively, the Trust anticipates that the various new mixed-use initiatives that the Trust is planning will create substantial opportunities for inherent growth in both NAV and net income per unit. These initiatives are consistent with the Trust's diversification strategy that is designed to enable SmartCentres to leverage its existing portfolio of retail properties as a catalyst to propel substantive future growth. Currently, 168 intensification initiatives have been identified to commence over the next five years on 76 of the 164 properties owned by SmartCentres. In addition, the Trust continues to assess each of its existing properties to identify additional opportunities for mixed-use development. The table below identifies the current status of these 168 identified initiatives.

     
Description# Projects Underway# Projects In Active Planning# Projects Identified for Future (Minimum)Total Minimum # Projects Currently Underway, in Active Planning and Identified for Future
Apartment Rentals9 7 22 38 
Residential Condominiums7 9 13 29 
Residential Townhomes1 4 10 15 
Seniors’ Residences2 13 30 45 
Office1 2  3 
Self-Storage13 14 11 38 
Total33 49 86 168 
         

Because these various initiatives will be developed primarily on sites that are in the Trust's existing portfolio of properties across Canada, SmartCentres will not be required to purchase expensive development land. Most of these initiatives are being planned on properties that the Trust has owned for many years and that were developed by the in-house development team. This team is familiar with: i) the needs and concerns of the communities and their municipal administrations, ii) the existing complement of services and any proposed future improvements to infrastructure and services, iii) any geo-technical and environmental constraints, and iv) the realistic timeframes expected for rezoning and similar entitlements. The financial benefits associated with these various development initiatives will soon begin to contribute substantively to the Trust's operating results with the first closings of the Transit City condominium towers commencing in third quarter of 2020.

Non-GAAP Measures

The non-GAAP measures used in this Press Release, including FFO, Transactional FFO, ACFO, NOI, Same Property NOI, average yield rates, and payout ratio do not have any standardized meaning prescribed by International Financial Reporting Standards (“IFRS”) and are therefore unlikely to be comparable to similar measures presented by other issuers. These non-GAAP measures are more fully defined and discussed in the 'Management Discussion and Analysis' ("MD&A") of the Trust for the three months ended June 30, 2019, available on SEDAR at www.sedar.com.

Full reports of the financial results of the Trust for the three months ended June 30, 2019 are outlined in the unaudited interim condensed consolidated financial statements and the related MD&A of the Trust, which are available on SEDAR at www.sedar.com. In addition, supplemental information is available on the Trust's website at www.smartcentres.com.

Conference Call

SmartCentres will hold a conference call on Thursday, August 8, 2019 at 5:30 p.m. (ET). Participating on the call will be members of SmartCentres’ senior management.

Investors are invited to access the call by dialing 1-888-254-3590. You will be required to identify yourself and the organization on whose behalf you are participating. A recording of this call will be made available Thursday, August 8, 2019 beginning at 8:30 p.m. (ET) through to 8:30 p.m. (ET) on Thursday, August 15, 2019. To access the recording, please call 1-888-203-1112 and enter the Replay Passcode 7921406#.

About SmartCentres

SmartCentres is one of Canada’s largest real estate investment trusts with total assets of approximately $9.7 billion. It owns and manages 34 million square feet in value-oriented, principally Walmart-anchored retail centres, having the strongest national and regional retailers as well as strong neighbourhood merchants. In addition, SmartCentres is a joint-venture partner in the Premium Outlets locations in Toronto and Montreal with Simon Property Group.

SmartCentres continues to expand the breadth of its portfolio to include residential (single-family, condominium and rental), retirement homes, office, and self-storage, either on its large urban properties such as SmartCentres Place at the Vaughan Metropolitan Centre or as an adjunct to its well-located existing shopping centres. For more information on SmartCentres, visit www.smartcentres.com.

Certain statements in this Press Release are "forward-looking statements" that reflect management's expectations regarding the Trust's future growth, results of operations, performance and business prospects and opportunities as further outlined under the headings "Business Overview and Strategic Direction", "Other Measures of Performance" and "Outlook" in the Trust's Management's Discussion & Analysis for the period ended June 30, 2019. More specifically, certain statements contained in this Press Release, including statements related to the Trust's maintenance of productive capacity, estimated future development plans and costs, view of term mortgage renewals including rates and upfinancing amounts, timing of future payments of obligations, intentions to secure additional financing and potential financing sources, and vacancy and leasing assumptions, and statements that contain words such as "could", "should", "can", "anticipate", "expect", "believe", "will", "may" and similar expressions and statements relating to matters that are not historical facts, constitute "forward-looking statements". These forward-looking statements are presented for the purpose of assisting the Trust's Unitholders and financial analysts in understanding the Trust's operating environment, and may not be appropriate for other purposes. Such forward-looking statements reflect management's current beliefs and are based on information currently available to management. However, such forward-looking statements involve significant risks and uncertainties, including those discussed under the heading "Risks and Uncertainties" and elsewhere in the Trust's Management's Discussion & Analysis for the period ended June 30, 2019 and under the heading "Risk Factors" in its Annual Information Form for the year ended December 31, 2018. A number of factors could cause actual results to differ materially from the results discussed in the forward-looking statements. Although the forward-looking statements contained in this Press Release are based on what management believes to be reasonable assumptions, the Trust cannot assure investors that actual results will be consistent with these forward-looking statements. The forward-looking statements contained herein are expressly qualified in their entirety by this cautionary statement. These forward-looking statements are made as at the date of this Press Release and the Trust assumes no obligation to update or revise them to reflect new events or circumstances unless otherwise required by applicable securities legislation.

For more information, please contact:

Peter Forde Peter Sweeney
President & CEO Chief Financial Officer
SmartCentres SmartCentres
(905) 326-6400 ext. 7615 (905) 326-6400 ext. 7865
pforde@smartcentres.com psweeney@smartcentres.com

The Toronto Stock Exchange neither approves nor disapproves of the contents of this Press Release.