PRV-U: Visible growth at a reasonable price; Initiate at Outperform

Research evidence excerpt

PRV-U: Visible growth at a reasonable price; Initiate at Outperform

Key fundamental questions

How do PRV’s portfolio and markets PRV is one of three Canadian pure-play industrial REITs. A differentiating factor is that its portfolio is mostly

compare with other Canadian industrial small and mid-bay industrial with a median size of <50K SF by virtue of being mostly in secondary markets

peers? (Halifax/Dartmouth, Moncton, Winnipeg and Ottawa). Its markets are performing well, are seeing limited new

supply, and unlike some of the major markets like Toronto, Vancouver and Montreal, have experienced stable

to growing market rents in recent years. As a result, PRV’s portfolio has one of the highest MTM (mark to

market) rent opportunities with its industrial portfolio at 24.5%1. It also has a relatively short WALT (weighted

average lease term) of <4 years1, implying a near to medium term opportunity to capture the market rents.

What is PRV’s growth outlook in the next We expect PRV to deliver SP NOI growth of 5-7% and FFO/unit growth of 6%/15% in 2026/2027. This is being

few years? driven by PRV’s high mark-to-market rent opportunity, annual rent escalators and lease up of certain vacant

space. With 77% of 2026 maturing GLA (gross leasable area) having been renewed at +35% positive leasing

spread1, there is good visibility into 2026. In 2027, we expect higher growth owing to 18% of GLA expiring at

low in-place rents1.

In the last five years, PRV delivered SP NOI CAGR of 5.4% and FFO/unit CAGR was -1.3%. While organic NOI

growth was healthy, the muted FFO CAGR was the result of a large equity raise in 2021 that resulted in material

deleveraging (D/GBV of 58% in 2021 to 48% as of Q1/26), asset sales to refocus on industrial and debt