Sienna Senior Living (TSE:SIA) reported continued operating growth in the second quarter of 2026, supported by higher occupancy, rental rates and care revenue in retirement residences, as well as funding increases and private accommodation revenue in long-term care.
President and Chief Executive Officer Nitin Jain said the company delivered its 14th consecutive quarter of strong organic growth, with double-digit same-property net operating income growth in both operating segments. The company also completed two retirement-residence acquisitions during the quarter and announced a partnership with Fiera Infrastructure intended to expand its long-term care redevelopment capacity.
Revenue, NOI and Funds From Operations Rise
Same-property NOI rose 19.4% to C$57.6 million. By segment, retirement same-property NOI increased 15.2%, while long-term care same-property NOI increased 22.6%.
- Operating funds from operations increased 35% to C$39.6 million.
- Adjusted funds from operations increased 44.9% to C$34.9 million.
- On a per-share basis, operating FFO increased 16.4% and adjusted FFO increased 24.4%.
- The AFFO payout ratio declined to 72.3% from 89.5% a year earlier.
Hung said the long-term care results included C$2.1 million of retroactive funding. Excluding retroactive items in both comparative periods, long-term care same-property NOI would have increased 13.5%.
In retirement, the company’s average same-property occupancy reached 94.1%, up 150 basis points from the prior year. Occupancy was marginally lower than the first quarter because of elevated move-outs, but rose to 94.5% in July, Jain said.
Jain attributed retirement growth partly to the company’s Respira wellness program, which he said has produced an approximately 37% year-over-year increase in care revenue. The program includes more consistent care offerings, staffing changes and operational processes. Sienna also cited sales and marketing efforts, including a recent open house that generated more than 500 attendees and increased qualified leads and deposits.
Long-Term Care Funding and Redevelopments
Long-term care performance benefited from fully occupied homes, growing wait lists, higher revenue from private accommodations and government funding increases, management said. Hung also cited lower staffing-related costs, including reduced agency staffing and turnover, as contributors to NOI growth.
Jain said the company’s turnover rate is about 20%, although he cautioned that it would be difficult to predict whether that level could be sustained over the next five to 10 years. He said lower turnover has reduced training, recruitment and operational costs while increasing internal promotions.
The company expects to begin construction in early 2027 on two Greater Toronto Area redevelopment projects: a 448-bed community at Glen Rouge in Toronto and a 256-bed redevelopment at Streetsville in Mississauga. The projects are part of Sienna’s 1,600-bed redevelopment pipeline, more than 80% of which is located in the GTA.
Jain said Sienna has acquired land in Brampton and Toronto and now has land for most of its redevelopment pipeline. He said the broader GTA program is expected to unfold over roughly five to seven years.
Management also said Ontario’s recently introduced renovation program could provide an alternative for certain land-constrained older homes, rather than materially increasing the number of new beds. Jain cited Sienna’s St. George property near the University of Toronto as an example of a location where renovation could be more practical than relocating a home.
Fiera Joint Venture Expands Development Capacity
Sienna formed a joint venture with Fiera Infrastructure, a wholly owned subsidiary of Fiera Capital, under which each party will hold a 50% interest in selected long-term care redevelopment projects. The venture initially targets C$625 million in projects, with Glen Rouge and Streetsville the first projects under consideration.
Jain said the partnership does not alter the timing of currently planned project starts, but it gives Sienna capacity to undertake more developments. He said the arrangement effectively doubles the company’s redevelopment capacity while helping limit the proportion of Sienna’s assets under development.
Management estimated total costs for Glen Rouge and Streetsville at about C$375 million. Hung said the projects could be financed with roughly 70% to 80% project-level financing, with the remaining equity contributed by the partners. Sienna’s contribution would include the fair value of land, while Fiera would contribute cash at the partnership’s inception.
Jain said Sienna would earn market-based development and management fees through the joint venture, though specific fees were not disclosed. He added that the partnership is focused on Ontario and is intended to be long term.
Capital Position and Updated Outlook
Sienna ended the quarter with approximately C$604 million in liquidity and nearly C$1.6 billion of unencumbered assets. Net debt to adjusted gross book value was approximately 35%, while the weighted average cost of debt was 3.9%.
The debt service coverage ratio improved to 2.7 times from 2.4 times in the second quarter of 2025. The company has about C$180 million of debt maturing over the next 12 months. Hung said Sienna was confident it could refinance the debt, citing its access to capital and Morningstar DBRS’s confirmation of its BBB credit rating with stable trends.
Sienna issued C$98 million of shares through its C$150 million at-the-market equity program during the quarter.
For 2026, the company reaffirmed its target of more than 10% same-property NOI growth in retirement. It raised its long-term care same-property NOI outlook to mid- to high-single-digit growth, excluding one-time items. Jain said long-term care growth should eventually moderate to low single digits, though management did not specify whether that would occur in 2027.
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.
