Morguard REIT: Retail Resilience and Office Rebound Fuel a Strategic Pivot
Q2 2026 same-asset growth of 7.5% masks a deeper transformation as St. Laurent Centre remerchandising gains momentum
MRT-UN.TO · Earnings Call · 2026-07-30
A Resilient Quarter
Morguard REIT delivered a strong second quarter, with net operating income up 5.5% to $27.1 million and combined same-asset growth of 7.5%. As CFO Andrew Tamlin opened, “Our second quarter results have exceeded expectations and reflect solid combined same asset growth of 7.5% for the quarter.” — Andrew Tamlin, Chief Financial Officer · 2026-07-30 The shopping center portfolio remains the backbone, with community strips posting 5.9% same-store growth and effectively 100% occupancy. Retail Asset management continues to drive positive leasing spreads across the portfolio, particularly in enclosed malls where occupancy has improved by 60 basis points during the quarter.Office Rebound on the Horizon
Office results are rebounding as companies enforce return-to-work mandates. Penn West Plaza saw NOI grow $1.2 million in Q2, and management believes the two large vacancies in Ottawa and Vancouver are short-term. “We continue to see a rebound in our office results our retail results have continued to produce solid growth in the resilient sector.” — Andrew Tamlin, Chief Financial Officer · 2026-07-30 The office occupancy rose 100 basis points sequentially, and management sees increased demand for well-located urban space.St. Laurent: A Strategic Bet
The most significant development is the remerchandising of St. Laurent Centre, a key driver of future growth. The REIT is investing $25-30 million to add nationally recognized tenants, including Sephora, H&M, Unigold, Sport Chek, and a new frills grocery (No Frills). Foot traffic at the center is up 10% and sales productivity from small tenants has improved by a similar amount. “Productivity of the shopping center is up because foot traffic is up. And foot traffic is up about 10%, and in sales productivity from the small Baomin tenants is also up by approximately 10%.” — Andrew Tamlin, Chief Financial Officer · 2026-07-30 The backfill of the former HBC space is progressing, with Urban Behavior re-leasing the lower level at St. Laurent and a transaction pending for the Cambridge Center. This mirrors prior initiatives, as management noted in earlier calls: “with respect to Ottawa, starting there, St. Laurent, we have executed a deal to backfill the lower level of the former HBC box with Urban Behavior.” — John Ginis, Vice President of Retail Asset Management · 2026-05-01 The long-term vision was already in place, as seen in the 2025 commentary: “So with respect to Cambridge, we are exploring alternatives, both temporary and permanent options.” — John Ginis, Vice President of Retail Asset Management · 2025-10-30 The redevelopment of the former Sears box, including new Sport Chek and entertainment options, is expected to open by 2027.Financially, the REIT maintains $61 million in liquidity and $219 million in unencumbered assets, with $103 million in mortgage renewals completed at slightly higher rates. The strategic repositioning of St. Laurent is a clear pivot toward higher-quality tenancy, and the office rebound provides additional upside. While the market remains focused on tech-driven themes, Morguard's steady retail performance and proactive asset management offer a differentiated value proposition.Wrapping up, we continue to believe that there are strong fundamentals in the retail leasing environment and of the environment -- the office market is in full rebound mode.