Welcome to the PROREIT third quarter results conference call. At this time, all lines have been placed on mute to prevent background noise. Management will make a short presentation, which will be followed by a question and answer period open exclusively to financial analysts. In order to ask a question, simply press star then the number one on your telephone keypad. If you would like to withdraw your question, please press the pound key. For your convenience, the press release, along with the third quarter financial statements and management's discussion and analysis are available at proreit.com in the investor section and on SEDAR. Before we start, I've been asked by PROREIT to read the following message regarding forward-looking statements and non-IFRS measures.
PROREIT's remarks today may contain forward-looking statements about its current and future plans, expectations, intentions, results, levels of activity, performance, goals or achievements or other future events or developments. Forward-looking statements are based on information currently available to management and on estimates and assumptions made based on factors that management believes are appropriate and reasonable in the circumstances. However, there can be no assurance that such estimates and assumptions will prove to be correct. Many factors could cause actual results, levels of activity, performance, achievements, future events or developments to differ materially from those expressed or implied by the forward-looking statements. As a result, PROREIT cannot guarantee that any forward-looking statement will materialize, and you are cautioned not to place undue reliance on these forward-looking statements.
For additional information on the assumptions and risks, please consult the cautionary statement regarding forward-looking statements contained in PROREIT's MD&A, dated November 9, 2022, available at www.sedar.com. Forward-looking statements represent management's expectations as at November 9, 2022, and except as may be required by law, PROREIT has no intention and undertakes no obligation to update or revise any forward-looking statement, whether as a result of new information, future events or otherwise. The discussion today will include non-IFRS financial measures. These non-IFRS financial measures should be considered in addition to and not as a substitute for or in isolation from the REIT's IFRS results. For a description of these non-IFRS financial measures, please see the 2022 third quarter earnings release and MD&A. A reconciliation of non-IFRS to IFRS results, as applicable, may be found in the earnings release and MD&A for the 2022 third quarter.
Please refer to the non-IFRS measures section in the MD&A for the third quarter for additional information. I will now turn the call over to Mr. James Beckerleg, President and Chief Executive Officer.
Thank you, Jeff, and good morning, everybody, and welcome to our third quarter call. As always, joining me today is Gordon Lawlor, our Executive Vice President and Chief Financial Officer. Also on the call this morning and glad to address any questions the analysts have a little later are Alison Schafer, our Chief Financial Officer and Secretary, and Mark O'Brien, our Senior Vice President, Leasing, Operations and Sustainability. Firstly, this morning, I want to say that we are very pleased with our operating performance in the third quarter. Our results highlight the strength of our business and the significant embedded value in our portfolio, especially in our industrial properties, which now account for over 80% of our total GLA, Gross Leasable Area. Increases in almost all of our key metrics demonstrate that we are improving our operating efficiency.
I am particularly pleased with our ability to consistently generate recurring organic growth from our portfolio. Our overall Same-Property NOI increased by a full 3.6% in Q3 of 2022 compared to the same prior year period. Specifically, our industrial sector generated a solid 7.2% increase in Same-Property NOI during the quarter. However, it should also be noted that our retail portfolio, mainly composed of necessity-based properties, also continues to perform very well. Same-Property NOI was up 3.3% in the third quarter in this sector. Our office segment, which now comprises 6.6% of our total GLA, lagged a bit and reported a decrease in occupancy performance for two of our eight buildings.
However, even this sector should improve in our next quarter due to a new six-year term lease effective this month that will provide an additional CAD 90 thousand of gross income on a quarterly basis ongoing forward. During these uncertain times, we are not only maintaining our focus on the defensive aspects of our portfolio, but also on exploiting the mark-to-market opportunities, most especially in the industrial properties. Despite the higher interest rate environment in which we find ourselves, increased rental rates in our maturing and new leases are offsetting some upward movement in the valuation capitalization rates and discount rates that we use in assessing our portfolio on a quarterly basis. During the quarter, we also continued to strengthen our balance sheet. We maintained financial discipline with CAD 32.5 million in available credit facilities at quarter end.
Very importantly, we also successfully reduced our debt to gross book value ratio to below 50% for the first time, thereby achieving a previously stated key objective for the REIT this year. Based on capital allocation and risk management decisions, we also completed the disposition of 10 core retail assets in the year-to-date period, moving our portfolio weighting more heavily again into the industrial sector. These referenced dispositions included selling a portfolio of 9 non-strategic retail properties in Western Canada, which provided us with CAD 18.8 million, excluding closing costs during the third quarter. Subsequent to quarter end on November the third, we completed the sale of a further non-strategic retail property in Alberta, which delivered CAD 5.4 million before closing costs.
We remain engaged in that exercise of optimizing our portfolio by increasing our performance in the highest performing assets while still considering a disposition of some smaller non-strategic ones going forward. This quarter also marked the completion of our strategic partnership agreement with Crestpoint Real Estate. Together, we now jointly own an industrial-focused portfolio of 42 properties, almost exclusively located in Halifax's Burnside Industrial Park, which is one of Canada's strongest industrial nodes. We are pleased with the performance of this accretive transaction, which makes us one of the largest landlords in the Halifax industrial market. This is an achievement for which I believe our entire team should be very proud. With this significant presence, we believe we are uniquely positioned to further capture rent growth in this strategic location and also have the ability to continue to grow externally in this key market. Turning now to operations.
On the operational front, we continue to benefit from a strong demand environment in our sectors. We have successfully renewed 85.5% of our leases maturing in 2022 at quarter end at a positive average spread of 14.9%. As well, fully 21% of the leases maturing in 2023 have already been renewed, and again, at very positive average spread. These numbers have continued to increase, by the way, since quarter end. Finally, the occupancy rate of our portfolio remains firm at 97.9% at September 30th, unchanged from the previous quarter. I'll now turn over the remarks to Gordie, who will provide some more details on our financial results.
Thank you, Jim, and good morning, everyone. We recorded a solid financial performance in the third quarter. We ended the quarter with 132 properties in our portfolio, including a 50% ownership interest in 42 of those properties, compared to 104 properties owned at 100% at the same time last year. Total assets amounted to CAD 1.04 billion at quarter end. Property revenue amounted to CAD 24.1 million in the third quarter, a 23% increase compared to the same period in 2021. Net operating income was CAD 14.8 million, up 22% year-over-year. These increases were mainly driven by the impact of the net acquisition activity over the last 12-month period.
FFO was negatively affected this quarter by approximately CAD 1 million in nonrecurring charges for deferred financing and debt settlement costs tied to asset sales, partial asset sales, and paying out an expensive term loan. AFFO, which has been increasing over the last three quarters, totaled CAD 7.9 million, a 21% increase compared to the same prior year period. In the third quarter, we recorded fair market value gains on investment properties of CAD 11.6 million and CAD 52.7 million yea- to -date. Basic AFFO payout ratio stood at 85.7% compared to 86.4% for the second quarter of 2022 and 82.8% for the same prior period. During the quarter, we kept focus on maintaining our strong financial discipline and liquidity position.
Debt to Gross Book Value was 49.8% at September 30, 2022, down from 58.2% at the same date last year, achieving our goal of reducing our ratio below 50%. We have approximately CAD 30 million in mortgage renewals maturing in the next 12 months. Our liquidity position remains healthy. At September 30, we had CAD 32.5 million available under a credit facility. A weighted average cap rate for the portfolio was approximately 5.7% at the end of the quarter or CAD 155 per sq ft, down from 6.3% at the end of the third quarter of 2021.
The biggest driver of the lower portfolio cap rate is our industrial segment, which went from 6% to 5.4% last year, with our office and retail cap rate averages around 6.7%. By region, our lowest cap rates are in Woodstock, Ottawa, and Montreal industrial markets. We saw a modest cap rate expansion in a few areas of our industrial and office portfolios, and for almost all of our discounted cash flow models, we've increased the discount in terminal rates to reflect the interest rate risk in the market. In general, valuations are holding due to increased cash flow in our models. Finally, distributions of CAD 0.0375 per unit were declared monthly through the third quarter of 2022. I'll now turn the call back to Jim for closing remarks.
Thanks, Gordie. Just speaking to the current environment, we of course remain mindful of the heightened macroeconomic uncertainties, market volatility and high interest rate period that we find ourselves in. We believe, however, we are adequately positioned and view this as a time to focus on operational performance. We have the liquidity, investment capacity, and lower leverage to perform sustainably and to ultimately put ourselves into a position to create new value for all of our stakeholders. I'm also going to take this opportunity this morning to formally recognize and congratulate Gordie. He was named, most of you know, as my successor on October the fourth, two thousand and twenty-two. He will be the new President and CEO of the REIT and will join our board effective on April first of next year.
At the same time, I will assume the position of Vice Chair of the Board and Co-Founder. In addition, Alison Schafer, with us this morning, will be appointed Chief Financial Officer and Secretary of the REIT. I have every confidence in this new management team. They have the experience and acumen to lead the REIT into the future. In the meantime, I can assure you all we remain steadfast in our execution and our strategy of improved operating efficiencies and focusing on our growing high-quality portfolio, concentrated now in the industrial sector. Not only has this strategy proven to be successful to date, but also we believe it will continue to generate growth and stability for the future. The Halifax market, where I am this morning, has been especially strong for us, and we can expect that to continue. That wraps up our formal remarks.
I'll turn the call back to the operator, so we can take any questions from any of the participating analysts that would like to ask us. Thanks very much, everybody.
Thank you, Jim. Ladies and gentlemen, we will now begin the question-and-answer session. Should you have a question, please press the star followed by the one on your touch tone phone. You will hear a three-tone prompt acknowledging your request. If you would like to withdraw your request, please press the star followed by the two. If you're using a speakerphone, please lift the handset before pressing any keys. One moment, please, for your first question. First question comes from Brad Sturges from Raymond James. Please go ahead.
Hi. Good morning.
Good morning.
Just on the leasing activity, you know, that your comment is that you're seeing, you know, pretty decent spreads that you've already reported, actually, continue to strengthen. Can you just expand on the leasing activity you're seeing and the type of rent spreads you're expecting for your maturities the rest of this year but in 2023 as well?
Yeah. Mark O'Brien here, Senior Vice President of Leasing, Operations and Sustainability. I can answer that on 2023. We're almost through 2022 expiries, and we're focused on 2023 now. It's about 1 million sq ft for that year. 90% of that GLA is actually industrial. All the acceleration will likely come from the industrial sector. We're 20% through the GLA for 2023. Portfolio-wide, on a year-one leasing spread, we're actually at 50%. I know that's really outside of our norm of 15%, which we just reported. That's just very heavily weighted to two very large transactions that we just did recently.
One industrial in Moncton, New Brunswick, and one industrial renewal in Woodstock, Ontario. The Moncton we did a 40% leasing spread, and then the Ontario with a 90% leasing spread. Those are a little bit outside of the box, and we probably will see those normalize closer to the, you know, 25% that we see in our industrial. Again, a great start to 2023.
Okay. That's quite helpful. Just on the asset sales side, you know, is there anything else you're looking to market right now? You know, do you have a kind of a budget or plan in place for 2023 in terms of any other asset sales contemplated?
It's Gordie. I mean, we've got another small retail asset. I think we signaled about CAD 10 million in total last quarter, getting us close to CAD 30 million for the year. You know, we're always looking at culling some of the smaller assets. As you know, we're tied to some of the mortgage on those related assets. We don't have any significant view for 2024 yet. We just finished our budget and went through the budget process. We know where we are in 2023, so we'll keep reviewing the portfolio and seeing if there's opportunities there, just from a culling-wise or even strategically in the next little while. We don't really have anything to say right now.
Okay. If there are asset sales that, you know, the initial use of cash would be repay debt?
Yeah. Repay debt, potentially buy back units, but it would likely be to repay debt at this point in time.
Yeah. Okay. Thanks. I'll turn it back.
Thank you. There are no further questions at this time. Please proceed.
Okay. Well, that's it, everybody. I think everybody knows if there's any questions you wanna present to management subsequent to the meeting, all of us are always available to chat. Thank you very much for being with us this morning. Thank you, operator.
Thank you. Ladies and gentlemen, this concludes your conference call for today. We thank you for participating and ask that you please disconnect your lines.