Sienna Senior Living (TSE:SIA) reported higher third-quarter revenue and operating funds from operations as occupancy, rental rates and care revenue increased, and raised its 2026 growth expectations for its retirement and long-term care businesses.
Revenue on a proportionate basis rose 12.4% from a year earlier to CAD 295.7 million, while same-property net operating income (NOI) increased 8.7% to CAD 57.8 million. President and CEO Nitin Jain said the results marked the company’s 15th consecutive quarter of same-property growth.
Operating funds from operations (OFFO) increased 21.2% to CAD 39.8 million. OFFO per share rose 1.4% to CAD 0.36, including an approximately CAD 0.02 dilutive impact from shares issued through the company’s at-the-market equity program before the proceeds were deployed, Jain said.
Adjusted funds from operations (AFFO) climbed 25.7% to CAD 36.1 million, helped by higher OFFO and construction funding income from the Ontario government for completed redevelopments, CFO and Executive Vice President of Investments David Hung said. AFFO per share rose 5.2%, while the AFFO payout ratio declined to 72% from 75.9% a year earlier.
Care revenue supports retirement margins
Same-property NOI in the retirement segment grew 11.6%, driven by occupancy and rate increases and higher care revenue. Average same-property retirement occupancy rose 20 basis points year over year to 94.9% in the third quarter and reached 95.2% in October.
Jain said leads, tours and deposits remained strong. He told analysts that occupancy could stabilize between 95% and 96%, although it was difficult to identify a precise ceiling.
Same-property retirement operating margin expanded by 200 basis points year over year. Jain said the company’s Aspira Wellness program contributed to a nearly 30% increase in same-property care revenue. Hung said care revenue had grown faster than management initially expected, contributing to the improved margin outlook.
Jain said care services generally carry lower margins than accommodation, but Sienna has improved profitability through more consistent offerings and staffing models. À la carte care represents approximately 7% to 8% of total revenue, Hung said.
In long-term care, same-property NOI increased 6.2%, or 11.5% excluding retroactive items. Hung cited government funding increases, private accommodation revenue and completed redevelopments. He said funding increases in Alberta and British Columbia accounted for roughly half of the underlying growth.
Higher outlook and acquisition plans
Sienna continues to expect retirement-segment NOI growth of more than 10% for 2026. It raised its forecast for same-property retirement margin expansion by 50 basis points, to a range of 150 to 200 basis points, and increased its long-term care same-property NOI growth target to a high-single-digit percentage.
The company has completed or placed under contract seven acquisitions in 2026, representing approximately CAD 430 million in assets, Jain said. Those include two Ontario retirement residences with a combined value of CAD 245 million.
Sienna completed its approximately CAD 171 million acquisition of Stonemont on the Park, a nearly fully occupied 305-suite residence in Ottawa, at the end of October. It expects to close its CAD 74 million purchase of the 165-suite Brighton Retirement & Active Living residence in the fourth quarter.
Jain said Sienna sees an opportunity to increase rates and reduce leasing incentives at Stonemont as residents move out. For the two properties, he said initial yields would be in the 5% range, with potential to grow into the 6% range over a couple of years through rental growth, added services and management efficiencies.
Sienna is also pursuing long-term care redevelopments through its partnership with Fiera Infrastructure. Jain said the first two projects under consideration comprise more than 700 beds and are expected to begin construction in early 2027.
Liquidity and leverage
Sienna ended the quarter with approximately CAD 595 million in liquidity and nearly CAD 1.6 billion of unencumbered assets. Net debt to adjusted gross book value was 34.5%, down 6.3 percentage points from a year earlier, while the weighted average cost of debt was unchanged at 3.9%.
Hung said approximately CAD 160 million of debt comes due over the next 12 months. The company raised CAD 4.9 million through its at-the-market program during the third quarter, and its board approved a renewal allowing another CAD 150 million in share issuance.
Hung said Sienna’s medium-term debt-to-EBITDA target remains 7.5 to 8 times. Including acquisitions expected to close in the coming months, he estimated the ratio would be around 6.5 times. He also said the company could undertake roughly another CAD 500 million in acquisitions on its balance sheet while remaining within its target range.
About Sienna Senior Living (TSE:SIA)
Sienna Senior Living Inc. (TSX:SIA) offers a full range of senior living options, including independent living, assisted living and memory care under its Aspira retirement brand, long-term care, and specialized programs and services. Sienna’s approximately 15,000 employees are passionate about cultivating happiness in daily life.
