Q1/26: Dispositions Set To Slow After Impactful Q1; Unusuals Drive FFO Beat

Research evidence excerpt

Q1/26: Dispositions Set To Slow After Impactful Q1; Unusuals Drive FFO Beat

Real Estate/REITs

H&R REIT

TD SECURITIES INC. - CANADA QUICK TAKE: EARNINGS UPDATE

May 14, 2026

Price: C$10.49 (05/14/2026) Q1/26: Dispositions Set To Slow After

Price Target: C$11.50 Impactful Q1; Unusuals Drive FFO Beat

BUY (1)

ESG SCORE: 67/100

Sam Damiani, CFA^ THE TD COWEN INSIGHT

416 983 9640

Looking past the one-time nature of the FFO beat, Q1 saw much-improved debt metrics and

sam.damiani@tdsecurities.com

asset mix post the $1.5bln of asset sales completed. Ops improved in Industrial, eased in

Linda Wang^ Residential. Unfortunately there were no new firm dispositions, but we're confident several

416 983 9259 remain in-progress and still expect an active year ahead - which should narrow the NAV

linda.wang@tdsecurities.com

discount (now 31%).

Golden Nguyen-Halfyard^

416 308 3842 Impact: NEUTRAL

golden.nguyenhalfyard@tdsecurities.com

Q1 Results (Fig 2). FFO/unit of $0.27 (-8% y/y due to dispos and USD's 4% drop y/y) was ahead

Key Data of our est/cons of $0.24/$0.25 due to the inclusion of Dec. 2025 results from ECHO Realty

Symbol TSX: HR.UN-T

(sold January 6) that hadn't been recognized in Q4 (ECHO's results were always included on a

Market Cap C$2.9B 1-month lag). As a result, the Q1 dispos are expected to be a further $11.6mm or 15% FFO drag

General: Market Cap on basic units. in Q2 ($14.6mm lower NOI, $3mm lower interest exp.).

This was the Big Disposition Quarter. $1.5bln of asset sales were completed (as previously

announced), which impacted operating and debt metrics meaningfully:

■The number of properties fell to 105 from 363, total portfolio leaseable area fell by 21% to

20.3mm square feet, and the REIT has effectively exited the Retail segment entirely. (Just