Key Takeaways
- • Inovalis REIT (TSX: INO.UN) reported Q3 2026 IP Portfolio Net Rental Income of $2,861 (€1,779), down from $3,701 (€2,367) in Q3 2025, mainly due to the January 2026 sale of the Trio property.
- • IP Portfolio occupancy stood at 38.2% and Total Portfolio occupancy at 55.7% as of September 30, 2026; excluding the Arcueil and Delizy properties under disposition, Total Portfolio occupancy was 82%.
- • The REIT signed preliminary exchange contracts on July 28, 2026 to sell Delizy for $28,067 (€17,405), with closing expected in Q3 2027; Arcueil's sale of 87.5% for $60,537 (€37,540) is targeted to close in Q1 2027.
- • Book value per Unit was $4.17 ($4.13 fully diluted), while the Units closed at $0.69 on September 30, 2026, a significant discount to book value.
- • Cash fell to $12,537 from $25,057 at December 31, 2025, and debt to gross book value net of cash was 59.8% for the Total Portfolio, with a significant portion of debt maturing within 12 months.
Summary
Inovalis Real Estate Investment Trust (TSX: INO.UN) reported its financial results for the quarter ended September 30, 2026, according to a Business Wire release. CEO and President Stephane Amine said management continued to advance several key transactions, engage with lenders on financing and address operational priorities, describing these efforts as important to managing debt obligations and maintaining financial flexibility in a difficult operating environment.
For the IP Portfolio, Q3 2026 Net Rental Income was $2,861 (€1,779), compared with $3,701 (€2,367) in Q3 2025. The company attributed the decline primarily to the sale of the Trio property in January 2026, which was 73% leased until December 2025. This was partially offset by the absence of the vacant Baldi property, disposed of in December 2025. On a Total Portfolio basis, adjusted for IFRIC 21 and including the REIT's proportionate share of joint ventures, NRI was $4,229 (€2,630), versus $5,101 (€3,263). The REIT's share of joint venture NRI was $2,234, down $118 year over year, though nine-month joint venture NRI rose $471, reflecting leasing of 20% vacant space at the Neu-Isenburg property since Q4 2025.
Occupancy remains low: 38.2% for the IP Portfolio and 55.7% for the Total Portfolio at September 30, 2026. Strategic vacancy is being maintained at Arcueil and Delizy pending disposition. Excluding those two assets, Total Portfolio occupancy was 82%. A six-year firm extension covering 18,800 sq. ft. of office space at Metropolitain raised the property's WALT from 5.4 to 6.7 years. The REIT has identified prospective tenants for Bad Homburg, and executed leases there could significantly increase occupancy.
Under its Asset Recycling Plan, the REIT is progressing toward a Q1 2027 closing for the sale of 87.5% of Arcueil for $60,537 (€37,540), conditional on a building permit obtained in November 2026, after which a standard appeal period applies. The remaining 12.5% interest, dedicated to office tenants, is being marketed. The Delizy property, located north of Paris, is subject to preliminary exchange contracts signed July 28, 2026 with three developers at $28,067 (€17,405), with closing anticipated in Q3 2027. The deal is subject to building permit approval and eviction of remaining tenants at an estimated REIT cost of $2,200. Net proceeds are expected to repay the senior lender.
The REIT cautioned that book value per Unit, $4.17 ($4.13 fully diluted) against unitholders' equity of $139,683 (€86,620), is not an estimate of realizable value. Appraisals are dated June 30, 2026 and reviewed by management as of September 30. The REIT flagged risks including French social and political uncertainty, refinancing exposure, non-recourse debt structures, and interest rate increases by the European Central Bank in June and September 2026. The Units closed at $0.69 on the Toronto Stock Exchange on September 30, 2026. Debt to gross book value, net of cash, was 59.8% for the Total Portfolio and 50.1% for the IP Portfolio. Cash, excluding restricted cash, fell to $12,537 from $25,057 at December 31, 2025, with a further $1,289 in restricted cash. FFO and AFFO per Unit for Q3 2026 were $0.00 and $(0.01), with the nine-month FFO excluding $17,020 in non-recurring finance income tied to the Trio disposition. The weighted average interest rate on the Total Portfolio was 3.95%, and 63% of debt carried variable rates. Average term to maturity is 1.8 years for the IP Portfolio and 1.6 years for the Total Portfolio.
For the IP Portfolio, Q3 2026 Net Rental Income was $2,861 (€1,779), compared with $3,701 (€2,367) in Q3 2025. The company attributed the decline primarily to the sale of the Trio property in January 2026, which was 73% leased until December 2025. This was partially offset by the absence of the vacant Baldi property, disposed of in December 2025. On a Total Portfolio basis, adjusted for IFRIC 21 and including the REIT's proportionate share of joint ventures, NRI was $4,229 (€2,630), versus $5,101 (€3,263). The REIT's share of joint venture NRI was $2,234, down $118 year over year, though nine-month joint venture NRI rose $471, reflecting leasing of 20% vacant space at the Neu-Isenburg property since Q4 2025.
Occupancy remains low: 38.2% for the IP Portfolio and 55.7% for the Total Portfolio at September 30, 2026. Strategic vacancy is being maintained at Arcueil and Delizy pending disposition. Excluding those two assets, Total Portfolio occupancy was 82%. A six-year firm extension covering 18,800 sq. ft. of office space at Metropolitain raised the property's WALT from 5.4 to 6.7 years. The REIT has identified prospective tenants for Bad Homburg, and executed leases there could significantly increase occupancy.
Under its Asset Recycling Plan, the REIT is progressing toward a Q1 2027 closing for the sale of 87.5% of Arcueil for $60,537 (€37,540), conditional on a building permit obtained in November 2026, after which a standard appeal period applies. The remaining 12.5% interest, dedicated to office tenants, is being marketed. The Delizy property, located north of Paris, is subject to preliminary exchange contracts signed July 28, 2026 with three developers at $28,067 (€17,405), with closing anticipated in Q3 2027. The deal is subject to building permit approval and eviction of remaining tenants at an estimated REIT cost of $2,200. Net proceeds are expected to repay the senior lender.
The REIT cautioned that book value per Unit, $4.17 ($4.13 fully diluted) against unitholders' equity of $139,683 (€86,620), is not an estimate of realizable value. Appraisals are dated June 30, 2026 and reviewed by management as of September 30. The REIT flagged risks including French social and political uncertainty, refinancing exposure, non-recourse debt structures, and interest rate increases by the European Central Bank in June and September 2026. The Units closed at $0.69 on the Toronto Stock Exchange on September 30, 2026. Debt to gross book value, net of cash, was 59.8% for the Total Portfolio and 50.1% for the IP Portfolio. Cash, excluding restricted cash, fell to $12,537 from $25,057 at December 31, 2025, with a further $1,289 in restricted cash. FFO and AFFO per Unit for Q3 2026 were $0.00 and $(0.01), with the nine-month FFO excluding $17,020 in non-recurring finance income tied to the Trio disposition. The weighted average interest rate on the Total Portfolio was 3.95%, and 63% of debt carried variable rates. Average term to maturity is 1.8 years for the IP Portfolio and 1.6 years for the Total Portfolio.
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