Choice Properties Signals Confidence with Substantial Share Buyback Plan

TORONTO, ON – November 19, 2025 – Choice Properties Real Estate Investment Trust (CHP.UN) today announced a Normal Course Issuer Bid (NCIB) authorizing the repurchase of up to 27,436,700 of its trust units. The move, representing approximately 10% of the public float, signals a strong belief in the company's current valuation and a commitment to returning capital to shareholders.

Navigating a Shifting Landscape

The announcement comes at a time of nuanced conditions within the Canadian real estate sector. While certain segments face headwinds from rising interest rates and economic uncertainty, Choice Properties, with its focus on grocery-anchored shopping centers and residential properties, appears to be navigating the environment effectively. “This isn’t about reacting to a crisis,” explained one industry analyst. “It's about proactively deploying capital where management sees the best risk-adjusted return – and right now, they see value in their own units.” The NCIB authorization allows the REIT to repurchase units over the next 12 months through open market purchases, private agreements, and other methods. With an average daily trading volume of approximately 423,000 units, the daily purchase limit of 105,761 units represents a significant portion of trading activity.

Financial Health and Capital Allocation

Choice Properties boasts a robust financial position, with a market capitalization exceeding CAD 10 billion. Recent financial results demonstrate a consistent track record of revenue generation and profitability. Although burdened with approximately CAD 6.82 billion in debt, the REIT has consistently generated substantial operating cash flow, offering the flexibility to fund the buyback program. “The key here is free cash flow,” noted another analyst. “They aren’t relying on debt to finance this; they’re leveraging internal capital generation.” The company's previous NCIB, initiated in November 2024, saw the repurchase of 282,657 units at an average price of CAD 13.67. The current program, however, is significantly larger in scope, reflecting increased confidence in the REIT's future prospects. While debt remains a factor, analysts suggest that the REIT’s focus on essential retail and residential assets provides a degree of resilience in the current economic climate. The REIT’s consistent performance and positive cash flow have enabled it to consistently pay out dividends, making it an attractive option for income-seeking investors.

Industry Trends and Peer Comparisons

The decision to initiate a substantial buyback program isn’t unique within the Canadian REIT sector, but the scale of Choice Properties’ program is noteworthy. Several other REITs have engaged in similar initiatives, signaling a broader trend of shareholder-friendly capital allocation. “We're seeing a lot of REITs prioritize returning capital to shareholders right now, rather than aggressively pursuing acquisitions,” said an industry observer. “It’s a sign that they're confident in their existing portfolios and believe their units are undervalued.” Choice Properties differentiates itself with its emphasis on essential retail, anchored by grocery stores, providing a stable revenue base regardless of broader economic fluctuations. This strategic positioning, coupled with a growing portfolio of residential properties, allows it to weather economic uncertainty better than some of its peers. The buyback program also serves as a signal to the market, indicating management’s belief that the REIT's units are trading below their intrinsic value. Analysts suggest that Choice Properties’ valuation metrics – including a moderate price-to-earnings ratio and a solid dividend yield – position it favorably within the sector.

A Long-Term Perspective on Value Creation

Beyond the immediate financial implications, the NCIB reflects a commitment to long-term value creation. By reducing the number of outstanding units, the buyback program is expected to increase earnings per unit and boost shareholder returns. “It’s a positive signal for investors,” said a portfolio manager. “It shows that management is actively working to enhance shareholder value.” The move also demonstrates a proactive approach to capital allocation, prioritizing shareholder returns over potentially dilutive acquisitions or expansion projects. While some ESG-focused investors might argue that the capital could be better utilized for sustainability initiatives or property improvements, Choice Properties contends that enhancing shareholder value ultimately benefits all stakeholders. The REIT has consistently invested in energy-efficient building designs and sustainable operating practices. The company hopes this creates a balance between sustainable growth and financial returns, while delivering value to its investors. The move is likely to be well-received by investors who recognize the REIT’s consistent performance and stable dividend payouts.