CT REIT Q3 2026 Earnings: AFFO per Unit Up 7.7%, Payout Ratio Holds at 72.7%
CT REIT’s Q3 2026 earnings, released at 5:00 p.m. ET on Monday, November 9, put adjusted funds from operations at $0.337 per diluted unit, up 7.7% from $0.313 a year earlier, and held the AFFO payout ratio at 72.7%, level with the second quarter and with the nine-month reading. For CT Real Estate Investment Trust (TSX: CRT.UN), a landlord whose organic growth is written into its leases as a fixed annual bump, that is a large step. The fastest year-over-year gain CT REIT’s own restated quarterly table supports is 4.3%, and the four quarters before this one ran 4.3%, 4.3%, 2.8% and 2.5%.
Both halves of the quarter belong in the same read. The headline numbers are strong and the distribution cushion widened. The recurring rent underneath them grew 1.6% over nine months, and a one-time lease surrender payment supplied a quarter of the revenue increase.
FFO up 9.9%, AFFO up 8.1%
FFO was $88,493 thousand against $80,534 thousand, and FFO per diluted unit $0.369 against $0.338, up 9.2%. AFFO in dollars rose 8.1% to $80,641 thousand from $74,614 thousand. Property revenue was $161,321 thousand against $151,156 thousand, up 6.7%, and net operating income $130,093 thousand against $119,861 thousand, up 8.5%. Distributions paid were $0.245 a unit, after a rate increase of 3.5% to $0.0818 monthly that took effect with the July payment.
Over nine months, FFO per unit is up 5.3% to $1.076, AFFO per unit up 4.3% to $0.990, and the payout ratio 72.7% against 73.8%. Our CT REIT Q3 2026 earnings preview, published hours before the release, put the quarter’s payout ratio in a band of 75.3% to 76.5%, and the reckoning on that sits at the end of this piece.
AFFO per unit, change from a year earlier. The Q3 2026 figure is from the CT REIT Q3 2026 results release; the earlier quarters come from section 11.0 of the Q3 2026 and Q2 2026 Unitholder Reports, all on the restated maintenance capex basis.
The recurring engine grew 1.6%, and renewals reset the base
Strip out of net operating income what did not exist in both periods and the rate falls at every step. NOI grew 8.5% in the quarter, same property NOI 3.8%, same store NOI 2.4%, and same store NOI 1.6% across the first nine months.
NOI growth at four levels of measurement, all four as reported by CT REIT. Sources: Q3 2026 Unitholder Report, PDF pp. 25 and 26, and the results release Operating Results table.
The MD&A is explicit about what produced the nine-month figure. Same store NOI rose $5,663 thousand, “driven primarily by average contractual rent escalations of 1.5% per annum on Canadian Tire leases, generally effective January 1, which contributed $5,463 to NOI growth” (p. 26). On our arithmetic that escalator supplied 96% of the increase.
It is also the growth rate between renewals, and renewals move the base by more. CT REIT completed 11 Canadian Tire store lease renewals over the nine months, 658,179 square feet at a rental increase of 10.8%, alongside 335,771 square feet of other tenancies at 6.3%, for 993,950 square feet at 9.1% in total (p. 20). None of the Canadian Tire renewals fell in the third quarter: the only renewal in the three months was 36,069 square feet of other space at 6.9%. Those increases are struck on the first-year rental rate and exclude step-ups later in the renewal term. So the rent is a 1.5% annual drip punctuated by high-single to low-double-digit resets as leases turn over, and the 993,950 square feet renewed over nine months is 3.1% of a portfolio that grew 1.4% to 31,937,130 square feet, at a committed occupancy of 99.5% against 99.4%, on our arithmetic on the two figures.
The revenue line carries the second caveat. Property revenue rose $10,165 thousand, and the MD&A’s bridge attributes $2,490 thousand of it to lease surrender revenue, 24.5% of the increase (p. 21). The identical $2,490 appears in the nine-month bridge on the same page, so all of it landed in the third quarter. Without it, revenue growth would have been 5.1% on our arithmetic. The MD&A names lease surrender revenue among the drivers of NOI, FFO and AFFO, and gives a dollar figure for it only at the property-revenue line. A surrender payment is not a recurring rent.
Coverage, and the balance sheet behind it
The ratio is the number that gets quoted; the dollars behind it are the better test. The excess of AFFO over distributions paid was $21,961 thousand, or $0.092 a unit, against $0.083 a year earlier and $0.090 in the second quarter (p. 11). Our preview projected roughly $0.076 to $0.081 and said the cushion would narrow without closing. It widened.
Adjusted cashflow from operations, the cash-based measure, came in above AFFO in both periods: $80,995 thousand against AFFO of $80,641 thousand this quarter, and $76,695 thousand against $74,614 thousand a year ago. That is the strongest coverage fact in the filing. ACFO grew more slowly than AFFO, 5.6% against 8.1%, from the higher base, and the second-quarter divergence closed, when ACFO fell 3.4% while AFFO rose 3.3%.
CT REIT states the test itself at p. 41: distributions for both the three and nine months were less than cash generated from operating activities, less than that figure reduced by net interest and other financing charges, and less than AFFO. Cash generated from operating activities was $135,276 thousand, up 10.6%. Distribution reinvestment fell to $3,708 thousand from $4,626 thousand, so more of the distribution left the trust as cash. Coverage is the axis we rank the sector on, and the peer context sits in our ranking of Canadian REIT stocks on distribution safety.
The balance sheet moved the same way, with one exception. The indebtedness ratio fell to 38.7% from 39.8%, interest coverage rose to 3.56x from 3.37x, and total indebtedness to EBITFV was 6.49x at September 30 against 6.77x at December 31, 2025, on an EBITFV annualized from the nine months (p. 31). The weighted average interest rate ticked up to 4.44% from 4.36%. The exception is term: weighted average term to debt maturity shortened to 4.2 years from 4.8, a fall of 12.5%, which brings forward the point at which that debt has to be refinanced.
Net asset value per unit, which the Unitholder Report defines as total equity divided by period-end units, was $19.27 at September 30 (p. 41). The units closed at C$18.03 on November 9, down $0.07 or 0.39%, on volume of 193,036 and inside a 52-week range of $15.70 to $18.95 (closing price from StockAnalysis). That close predates the release by an hour, so the market has not traded on this quarter yet. It sits 6.4% below net asset value, and the declared $0.0818 monthly rate annualizes to the $0.982 a unit CT REIT prints in its own distribution history table, a forward yield of 5.4%, both on our arithmetic.
Last year’s payout ratio has moved, and the new method deducts more
The 75.7% the release shows for the third quarter of 2025 is not the 74.8% CT REIT published in November 2025. From 2026 the trust changed how it calculates the maintenance capital expenditures deduction inside AFFO, moving to a normalized maintenance capital expenditures approach from a reserve based on a rate per square foot, and restated the comparatives to match.
The restatement is one line. The year-ago capex deduction moved from a $6,583 thousand reserve to $7,325 thousand of normalized maintenance capex, a difference of $742 thousand, and AFFO moved by the same $742 thousand, from $75,356 thousand to $74,614 thousand.
AFFO payout ratio on both bases. The gap between the two 2025 bars is the $742 thousand methodology effect. Sources: the CT REIT Q3 2026 results release and the Q3 2025 results release as published on November 11, 2025.
On one method at both ends, the deduction is rising: $9,750 thousand this quarter against the restated $7,325 thousand, up 33.1% on our arithmetic, and $26,250 thousand over nine months against a restated $21,975 thousand, up 19.5%. CT REIT improved its payout ratio while deducting more for maintenance capital. The restated basis is also the right one for a year-over-year comparison, because both ends then sit on one method, and on it the ratio improved 3.0 percentage points. Against the number published a year ago the improvement is 2.1 points, with the methodology change accounting for 0.9 of the gap.
Separately from that deduction, the MD&A reports the capital the trust actually incurred: $14,293 thousand in the quarter and $20,819 thousand over nine months, against $15,944 thousand and $19,734 thousand in the same periods of 2025 (p. 20). Those are capital expenditures incurred, discussed there in the context of costs recoverable from tenants, and a different measure from the normalized deduction inside AFFO. The same section gives the reason a normalized figure exists: most of the trust’s recoverable capital goes to parking lots, roofs and heating, ventilation and air conditioning equipment, “the incurrence of which are typically seasonal in nature”, so “the actual recoverable capital costs incurred may vary widely from period to period”.
Net income fell, and it is a fair-value swing
Net income declined 5.8% to $110,304 thousand from $117,114 thousand. The release attributes that to decreases in the fair value adjustment on investment properties, higher property expense and interest expense, partly offset by higher revenues and lower general and administrative expense. The fair value adjustment was $20,827 thousand against $36,654 thousand, a swing of $15,827 thousand that more than covers the $6,810 thousand fall. The two expense lines named moved little: property expense rose 2.4% and net interest and other financing charges 1.8%.
Net income per unit was $0.461 basic, struck on 239,156,128 units, and $0.393 diluted. The diluted figure changes both halves of the fraction: it uses the IFRS diluted count of 325,404,239 units, which assumes all Class C LP Units settle in Class B, and it adds back the $17,720 thousand of interest on those units that the income statement carries inside net interest and other financing charges (p. 23). So $128,024 thousand over 325,404,239 units is $0.393. FFO, AFFO and the cushion per unit use the non-GAAP diluted count of 239,622,333, which leaves the Class C assumption out, and the two sets of per-unit figures are not comparable with each other.
One tenant, 90.5% of the rent, reporting Thursday
At September 30, 2026, Canadian Tire Corporation accounted for 92.0% of CT REIT’s gross leasable area and 90.5% of annualized base minimum rent. That structure delivers the 1.5% escalator, and it makes one retailer’s results a CT REIT input. Canadian Tire reports its own third quarter on Thursday, November 12 at 6:00 a.m. ET. For how the concentration compares with the diversified landlords on the same exchange, see our ranking of retail REIT stocks on return.
Growth capital kept flowing. CT REIT completed a $14 million vend-in of a Canadian Tire store in Victoria, British Columbia, covering 32,800 square feet, and announced a $22 million redevelopment of a vacant property in Kelowna, British Columbia, 89,500 square feet, targeted for the third quarter of 2028. Together they carry a going-in yield of 8.45% and about 122,300 square feet of incremental GLA. A further $11 million went into a previously announced Saskatoon East intensification of roughly 51,000 square feet, completed in the quarter. Chief executive Kevin Salsberg said in the release that “despite a volatile environment for the sector, we continue to deliver growth, while managing the business prudently and surfacing additional opportunities to create value such as our newly announced acquisition in Victoria and redevelopment project in Kelowna”.
What we said on Monday morning
Our preview named the threshold the trust would have to clear to hold its payout ratio at 72.7%:
Holding 72.7% would take AFFO per unit of about $0.338. Year over year that is roughly 8% growth, where the fastest gain the eight-quarter table supports is 4.3%. Sequentially it asks less, a 3.7% step from $0.326, and the table does hold two larger steps, +5.3% and +3.8%, but both of those land at the Q4-to-Q1 turn rather than at the Q2-to-Q3 turn this one would be.
The band of 75.3% to 76.5% was wrong, and the cushion projection of $0.076 to $0.081 was wrong in the same direction. The threshold was not. That $0.338 came from dividing three monthly payments at the declared $0.0818 rate, $0.2454, by 0.727, and CT REIT prints distributions paid per unit of $0.245. Half a tenth of a cent on the numerator is half a tenth of a cent on the threshold, and $0.245 over the $0.337 actually printed is 72.70% exactly.
The sequential reading held too. The step from the second quarter’s $0.326 was 3.4% on our arithmetic, less than the 3.7% we said holding the ratio would take, and the ratio held anyway because the distributions numerator came in below the declared-rate figure we used. What the preview got wrong was the year-over-year growth, where it leaned on a record containing nothing faster than 4.3% and the quarter printed 7.7%.
What the quarter leaves an income investor with
The case for owning CT REIT has never rested on growth. It is a covered distribution from a landlord whose rent is contracted and whose occupancy barely moves, and this quarter strengthened that case on its own terms: a wider cushion at $0.092 a unit, a cash measure above the accounting one, lower leverage, and a better ratio struck on a heavier maintenance capital deduction than the one in use a year ago.
What it did not do is change the growth rate of the rent. A 7.7% AFFO per unit step helped by a $2,490 thousand lease surrender payment, all of it in this quarter, sits on top of nine-month same store NOI growth of 1.6%. Renewals are the mechanism that moves the base faster, and over nine months they touched 3.1% of the portfolio. If the escalator stays at 1.5% and acquisitions stay in the $14 million to $22 million range, the trajectory to plan around looks closer to those earlier year-over-year steps of 2.5% to 4.3% than to this one. Whether the 8.45% going-in yield on Victoria and Kelowna is repeatable at scale is the variable that would change that, and Canadian Tire’s Thursday results are the nearest read on the tenant funding it.
Sources: the CT REIT Q3 2026 results release and the Q3 2026 Unitholder Report, which contains the MD&A. Page references are PDF pages of the Unitholder Report. Dollar figures are in thousands of Canadian dollars except per unit amounts. Data as of November 9, 2026.
Disclaimer: The content on bestcanadianstocks.ca is for informational and entertainment purposes only and does not constitute financial advice. Past performance is not indicative of future results. Always consult a qualified financial advisor before making investment decisions. Company figures are CT REIT’s own for the quarter and nine months ended September 30, 2026, from its third quarter 2026 results release of November 9, 2026 and its Q3 2026 Unitholder Report, which contains the MD&A, with the document and page cited at each use. All amounts are Canadian dollars. The 2025 comparatives in that release are restated on CT REIT’s normalized maintenance capital expenditure method adopted in 2026; where the piece gives the figure CT REIT published in November 2025, it is taken from that quarter’s own results release and labelled as published. The closing price for CRT.UN is from StockAnalysis as of the November 9, 2026 close, which precedes the 17:00 ET release. Figures described as our arithmetic are our own calculations on the company’s published numbers: the share of the revenue increase contributed by lease surrender revenue and the revenue growth rate excluding it, the escalator’s share of the nine-month same store increase, the renewed share of the portfolio, the four earlier year-over-year AFFO per unit steps, the discount to the last reported net asset value, and the forward yield on the declared monthly distribution rate.
