INFINITE POSSIBILITIES INVESTOR PRESENTATION Q3 2019 NOTICE TO - - PowerPoint PPT Presentation

INFINITE POSSIBILITIES…

INVESTOR PRESENTATION Q3 2019

NOTICE TO READER

Readers are cautioned that certain terms used in this Investor Presentation (“Presentation”) such as Funds from Operations ("FFO"), Adjusted Cashflow from Operations ("ACFO"), "Gross Book Value", "Payout Ratio", "Interest Coverage", "Total Debt to Adjusted EBITDA" and any related per Unit amounts used by management to measure, compare and explain the operating results and financial performance of the Trust do not have any standardized meaning prescribed under IFRS and, therefore, should not be construed as alternatives to net income or cash flow from operating activities calculated in accordance with IFRS. These terms are defined in this Presentation and reconciled to the consolidated financial information of the Trust in the Management’s Discussion and Analysis (“MD&A”) for the three months ended September 30, 2019. Such terms do not have a standardized meaning prescribed by IFRS and may not be comparable to similarly titled measures presented by other publicly traded entities. Certain statements in this Presentation are "forward-looking statements" that reflect management's expectations regarding the Trust's future growth, results of operations, performance and business prospects and opportunities. More specifically, certain statements contained in this Presentation, including statements related to the Trust's maintenance of productive capacity, estimated future development plans and costs, view of term mortgage renewals including rates and upfinancing amounts, timing of future payments of obligations, intentions to secure additional financing and potential financing sources, and vacancy and leasing assumptions, and statements that contain words such as "could", "should", "can", "anticipate", "expect", "believe", "will", "may" and similar expressions and statements relating to matters that are not historical facts, constitute "forward-looking statements". These forward-looking statements are presented for the purpose of assisting the Trust's Unitholders and financial analysts in understanding the Trust's operating environment, and may not be appropriate for other purposes. Such forward-looking statements reflect management's current beliefs and are based on information currently available to management. However, such forward-looking statements involve significant risks and

• uncertainties. A number of factors could cause actual results to differ materially from the results discussed in the forward-looking statements.

Although the forward-looking statements contained in this Presentation are based on what management believes to be reasonable assumptions, the Trust cannot assure investors that actual results will be consistent with these forward-looking statements. The forward-looking statements contained herein are expressly qualified in their entirety by this cautionary statement. These forward-looking statements are made as at the date of this Presentation and the Trust assumes no obligation to update or revise them to reflect new events or circumstances unless otherwise required by applicable securities legislation.

2

CONTENTS ▪ Overview Page 4 ▪ Intensification & Development Page 6 ▪ Featured Initiatives Page 19 ▪ Retail Portfolio Page 62 ▪ Financial Highlights Page 69

3

OUR EV EVOL OLUTION UTION CONTINUES CONTINUES…

1989 1989-1994 1994

MITCHELL GOLDHAR HELPS BRING WALMARTTO CANADA

Canada

2003 2003

FIRST TRANSACTION WITH CALLOWAY REIT

WALMART JOINT VENTURE WITH SMARTCENTRES

1999 1999 2014 2014

PENGUIN PICKUP CONCEPT IS INTRODUCED

2018 2018

SMARTCENTRES FORMS JV PARTNERSHIPS

2016 2016

SMARTCENTRES STRATEGIC FOCUS EXTENDS TO MIXED USE

2015 2015

CALLOWAY REIT ACQUIRES SMARTCENTRES

ON OUR JOURNEY OF INFIN INFINITE PO ITE POSSIBILITIES SSIBILITIES

5

34.4M SF income producing retail portfolio $9.7B dynamic real estate portfolio value 94 properties on which intensification opportunities have been identified 256 individual development projects (59.3M SF of density. REIT share 27.9M SF)

An individual development project is a single apartment, office, seniors’ residence, self-storage facility, hotel, condo or townhouse project

MAJOR INTERSECTIONS TRANSIT CONNECTIVITY EASY ACCESS FLEXIBLE STRUCTURES ONLY 25% COVERAGE 2,775 UNBUILT ACRES

BEST POSITIONED FOR INTE INTENSIFI NSIFICA CATION TION

BEST BEST POR PORTF TFOLIO OLIO IN IN T THE HE CO COUN UNTR TRY

STRONG TENANT RELATIONSHIPS

6

155 155

IN-HOUSE RESOURCES FOCUSED ON INTENSIFICATION

DEVELOPMENT TEAM OF

BEST POSITIONED FOR INTE INTENSIFI NSIFICA CATION TION

PLANNERS / DEVELOPERS • ENGINEERS • GOVERNMENT RELATIONS • LEASING • ENVIRONMENTAL / GEOTECH SPECIALISTS • CONSTRUCTION • ARCHITECTS • LAWYERS • FINANCE / FINANCIAL ANALYSTS • MARKETING

86% 86%

OF OUR CURRENT RETAIL AREA

THIS TEAM DEVELOPED

60M 60M

DEVELOPED SINCE 1989

DEVELOPMENT IN OUR DNA

SF SF

7

$9.7B

IN REAL ESTATE ASSETS

+

$12.1 12.1B

IN PLANNED INTENSIFICATION (REIT SHARE $5.5B)

8

94 PROPERTIES IDENTIFIED FOR INTENSIFICA INTENSIFICATION TION…

6

8 3 4 2 3 2 1 61 34 20 3 10

94 63

14 7 5 3 95 23 10 157

…AND MORE TO COME

9

SELF-STORAGE (48) SENIORS (45) OFFICE BUILDINGS (10)

HOTELS (5) APARTMENTS LIVING (88)

10

196 + 60 = 256

( 7 7 % ) ( 2 3 % ) ( 1 % ) RECURRING NON-RETAIL (SOSHAL) RECURRING NON- RECURRING TOTAL PROJECT COUNT

DEVELOPMENT STATUS

256 INDIVIDUAL DEVELOPMENT PROJECTS ACROSS 94 PROPERTIES

256 DEVELOPMENT PROJECTS

34 34 71 71 151 151

UNDERWAY ACTIVE FUTURE 1 2 3 4 5

256 256

TOTAL

PLANNING ENTITLEMENTS(#)

33 33 32 32 74 74 139 139

PROJECT SF

REIT SHARE

13,300,000

6,000,000

14,000,000

6,400,000

32,000,000

15,500,000

59,300,000

27,900,000

POTENTIAL VALUE CREATION ($)

REIT SHARE

$995,100,000

$473,200,000

$667,800,000

$199,400,000

$1,783,900,000

$705,100,000

$3,446,800,000

$1,377,700,000

11

CONSTRUCTION INITIATION (YEARS)

1 2 3 4 5 6+

$3.0B $3.6B

POTENTIAL VALUE CREATION

FROM THE 256 INTENSIFICATION PROJECTS

VALUE CREATION

REIT SHARE: $1.3B-$1.5B

TO

12

VALUE CREATION EXAMPLE

28 ACRES ∙ 380,000 SF

19 1900 00 EGLINT EGLINTON ON AVE VE E

13

VALUE CREATION EXAMPLE

PLANNING ENTITLEMENTS FOR 5.3 MILLION SF (INCL. 14 TOWERS > 20 STORIES)

19 1900 00 EGLINT EGLINTON ON AVE VE E

FULL 20-YEAR BUILD-OUT WOULD YIELD $250M IN POTENTIAL VALUE ABOVE THE CURRENT IFRS VALUE.

VALUE CREATION EXAMPLE

PHASE 1: 2 APARTMENTS POTENTIAL VALUE CREATION: $7 MILLION

19 1900 00 EGLINT EGLINTON ON AVE VE E

ONLY PHASE 1 OF THIS REDEVELOPMENT IS INCLUDED IN TOTAL PROJECT COUNT (256) & POTENTIAL VALUE CREATION ($3.0B - $3.6B) CALCULATIONS.

MAJOR MIXED-USE DEVELOPMENT INITIATIVES

• 1. VMC (Office Towers)
• a. KPMG (T#1)
• b. PwC-YMCA (T#2)

• c. Office (T#3)
• d. Office (T#4)

• 2. New Premium Outlets

• 3. Laval Centre

• 4. VMC (Condos)

• 5. VMC (Apartments)

• 6. Vaughan NW

• 7. Ottawa Laurentian

• 8. Multiple Locations

• f years 1-5

• f years 1-5

16

MAJOR MIXED-USE DEVELOPMENT INITIATIVES

• 9. StudioCentre (Toronto)

• 10. Pointe-Claire

• 11. Pointe-Claire (Condo)

• 12. Multiple Locations

• 13. Barrie (Apartments)

17

3

IN THE GTA

NEW JOINT VENTURE SENIORS’ PROJECTS

RECENT EVENTS

ANNOUNCEMENTS EXPECTED BY Q4 REPORTING

+4

APARTMENT & CONDO PROJECTS

SOON TO BE ANNOUNCED ANNOUNCED SEPTEMBER 12, 2019

+5

JOINT VENTURE PROJECTS

+1

JOINT VENTURE PROJECTS

BARRIE LAKEFRONT APARTMENT COMMUNITY

7.8A

CRE

NEW PARTMENT JV PARTNER ON NEW PROPERTY

18

FEATURED INITIATIVES

1. SMARTVMC (VAUGHAN METROPOLITAN CENTRE), TORONTO | 100 ACRES – Page 20 2. VAUGHAN NORTH WEST, TORONTO | 42 ACRES – Page 33 3. OAKVILLE NORTH, TORONTO | 52 ACRES – Page 36 4. OAKVILLE SOUTH, TORONTO | 21 ACRES – Page 39 5. WESTSIDE MALL, TORONTO | 12 ACRES – Page 42 6. BRADFORD, TORONTO | 57 ACRES – Page 46 7. PICKERING, TORONTO | 48 ACRES - Page 49 8. CHILLIWACK, VANCOUVER | 15.5 ACRES – Page 52 9. LAVAL CENTRE, MONTREAL | 35 ACRES – Page 55

• 10. POINTE CLAIRE, MONTREAL | 22 ACRES – Page 59

404.5 404.5 / 3,569 3,569

ACRES TOTAL ACREAGE

19

1.

• 1. SMAR

SMARTVMC TVMC

VAUGHAN METROPOLITAN CENTRE, TORONTO

▪ Long term build (10 – 15 years) ▪ A 50:50 JV between SmartCentres and Penguin

• Properties. Mitchell Goldhar deeply involved in all

aspects of the project ▪ Potential density of 19M sf. of residential, office and retail development for the whole 100-acre site ▪ At its 50% ownership, SmartCentres lands (approximately 25 acres) represent 4.5M – 5.5M

• sf. of potential development

▪ Transit infrastructure, including TTC subway and VIVA bus opened in December 2017, and York regional bus station to open Fall 2019

20

YONGE & BLOOR PRE VS POST SUBWAY 1950s 1940s 1960s

100 ACRES 501,254 SF 19 MILLION SF OF POTENTIAL

SETTING THE STAGE…

23

…FOR A NEW CITY CENTRE

24

VMC VISION VISION…

25

…BECOMING REALI REALITY TY

(AS OF SEPTEMBER 2019)

26

KPMG TOWER

REALITY RENDERING 100% LEASED

365,000 SF

27

PWC/YMCA TOWER

* *

RENDERING

PWC / YMCA

220,000 SF

28

100% LEASED REALITY

FUTU FUTURE RE

29

REALITY RENDERING SOLD OUT

>35%

RETURN ON COST +$30 MILLION IN PROFIT OVER ORIGINAL APPROVAL

1, 2 & 3

TOWER 1, 2 & 3 PROFITS EXCEED EXPECTATIONS

RENTAL RESIDENTIAL TRANSIT CITY 4 & 5

SOLD OUT

& THE EAS

EAST T BL BLOCK OCK

CONSTRUCTION STARTED FALL 2019

31

A NEW CITY CENTRE NEW CITY CENTRE…& BEYOND

170+ ACRES ∙ 26+ MILLION SF OF POTENTIAL

(REIT SHARE 10.5 MILLION SF)

HWY 407

• 2. V
• 2. VAUGH

UGHAN AN NO NORTHWES THWEST, ,

TORONTO

▪ Existing Walmart anchored shopping centre at Major Mackenzie Drive and Weston Road in Vaughan ▪ JV with Fieldgate on 16-acre site for 230-300 freehold townhomes. Construction to commence in 2020; possession in 2021 and 2022 ▪ JV with SmartStop for a self-storage facility ▪ JV with Revera for two towers – seniors apartments and retirement residences ▪ In the process of obtaining approvals on the remaining 6 acres to add mixed-use density including 800,000 sf. of seniors housing, condominium and rental accommodation

33

VAUGH UGHAN N NW NW

42 ACRES ∙ 177,906 SF

34

VAUGH UGHAN N NW NW

1.7 MILLION SF OF POTENTIAL

35

• 3. O
• 3. OAKV

AKVILL ILLE NOR E NORTH TH

(DUNDAS & TRAFALGAR), TORONTO

▪ An existing 461,000 sf. shopping centre on 52 acres at Highway 5 and Trafalgar Road in Oakville. Anchored by a 195,000 sf. Walmart Supercentre and a 120,000

• sf. Real Canadian Superstore

▪ Located within the Uptown Core area in the Town of Oakville, intended to provide a mix of uses, with uncapped densities and permissions allowing for residential, office, retail and commercial uses ▪ The Town recently initiated an Official Plan review for the Uptown Core. SmartCentres is seeking increased height permissions through this process; Targeting up to 30 stories ▪ The master plan demonstrates an average density of 4.4 FSI and over 7 million sf. of residential, retail and mixed use

36

OAKV AKVILL ILLE E NOR NORTH TH

52 ACRES ∙ 461,226 SF

37

OAKV AKVILL ILLE E NOR NORTH TH

PLANNING ENTITLEMENTS FOR 5.5 MILLION SF

38

• 4. O
• 4. OAKV

AKVILL ILLE S E SOUTH, OUTH,

TORONTO

We have initiated discussions with municipalities, tenants and potential partners to evolve this site into: ▪ A 180,000 sf. shopping centre, anchored by strong retailers such as Metro food store, Shoppers Drug Mart, LCBO, Winners and Goodlife Fitness ▪ A JV for a Revera seniors’ residence, and ▪ A townhouse development

39

OAKV AKVILL ILLE E SOUT SOUTH

21 ACRES ∙ 330,000 SF

40

OAKV AKVILL ILLE E SOUT SOUTH

430,000 SF OF POTENTIAL

41

• 5. W
• 5. WES

ESTS TSIDE IDE MALL MALL,

TORONTO

▪ 12-acre urban redevelopment site ▪ Currently a 140,000 sf shopping centre ▪ New Eglinton Crosstown Light Rapid Transit (LRT) station to open on site ▪ New links to existing GO network will connect new East:West to existing North:South transit framework ▪ Long-term project to add principally new residential development, with select retail

42

43

WE WEST STSIDE SIDE MALL MALL

12 ACRES ∙ 144,405 SF

44

WE WEST STSIDE SIDE MALL MALL

PLANNING ENTITLEMENTS FOR 3 MILLION SF

45

• 6. BRADFOR
• 6. BRADFORD,

TORONTO

▪ 57 acre Walmart-anchored site in the growing community of Bradford ▪ Currently a 280,000 sf shopping centre. ▪ Preliminary intensification plans include a hotel, a seniors residence, town homes, and mid-rise residential apartments and/or condominiums ▪ Early consultations are underway for municipal approval

46

BRA BRADFOR DFORD

57 ACRES ∙ 278,860 SF

47

BRA BRADFOR DFORD

565,000 SF OF POTENTIAL

48

• 7. P
• 7. PICKERIN

ICKERING,

TORONTO

▪ 48 acre Walmart-anchored site in the rapidly growing City of Pickering ▪ Adjacent to Hwy 401; 5 minutes from the Pickering Go Station and Durham Live ▪ Currently a 546,000 sf shopping centre; Potential for 7.8 million sf. ▪ Preliminary intensification plans include high-rise condominiums, townhouses, a seniors’ residence, residential apartments and a hotel ▪ Early consultations are underway for municipal approval

49

PICKERING PICKERING

48 ACRES ∙ 546,000 SF

50

PICKERING PICKERING

8 MILLION SF OF POTENTIAL

51

• 8. CHILL
• 8. CHILLIWA

IWACK, CK,

VANCOUVER

▪ Official Community Plan and Rezoning Approval by Council Sept. 2019 ▪ Proposal included demolition of the current enclosed mall to accommodate:

• 162,798 sf of Commercial
• 2.63 acres of Residential
• 3 6-storey residential towers with 200+

units

• Structured at grade parking

52

CHILLIWA CHILLIWACK CK

15.5 ACRES ∙ 124,865 SF

53

CHILLIWA CHILLIWACK CK

325,000 SF OF POTENTIAL

54

• 9. LA
• 9. LAVAL

AL CENTRE, CENTRE,

MONTREAL

▪ Lands designated by City as “Centre-Ville”, due to highway and transit access ▪ Anchored by a 160,000 square foot Walmart Supercentre ▪ Parcels of land sold to others for a seniors’ residence, hotel and an office development ▪ JV with Jadco for Equinoxe Daniel- Johnson; 338 unit rental residential towers ▪ Remaining land to be developed for mixed-use

55

LA LAVAL AL CENT CENTRE RE

35 ACRES ∙ 159,779 SF

56

LA LAVAL AL CENT CENTRE RE

4.5 MILLION SF OF POTENTIAL

57

RENDERING REALITY

DANIEL-JOHNSON

LA LAVAL AL CENT CENTRE RE

RENTAL RESIDENTIAL APARTMENTS

58

10 10. . POINTE POINTE-CLAIRE, CLAIRE,

MONTREAL

▪ Walmart and Home Depot anchored site in West Montreal purchased in 2016 ▪ Very well-located site – transit (new light rail transit line to downtown) and road access ▪ Master planning activities moving forward with strong support from council ▪ Secured zoning for a multitude of uses including residential, seniors housing and

• ffice on the perimeter of the property

▪ First rental apartment building expected to be completed in 2022 ▪ Significant NAV accretion potential from entitlements achieved to date

59

POINTE POINTE-CLAIRE CLAIRE

22 ACRES ∙ 384,915 SF

60

POINTE-CLAIRE

2 MILLION SF OF POTENTIAL

61

OUR RETAIL IS…

62

…STILL ROCKIN’

Toronto Premium Outlets

63

34.4 MILLION SF PORTFOLIO

AVERAGE PROPERTY AGE: 15 YEARS

32

CENTRES #

27 16 11 98.4 98.7

PRIMARY SECONDARY

158 100% 98.1%

TOTAL

G-VECTOM

NOI % OCCUPANCY %

99 73 97.9

    

TENANT %

64

100 100 100

GROCERY/ PHARMA %

100%

77.2 86.6

74%

71.2

HIG HIGH-QU QUALI ALITY TY TENANTS…

TOP 6 TENANTS ANNUAL RENT

$202,400,000 $33,800,000 $21,800,000 $18,700,000 $18,300,000 $37,500,000 RENTAL INCOME FROM TOP 6 TENANTS

$332,500,000

42%

TOP 6 TENANTS REPRESENT

65

• 1.1

1.4 1.9 1.4 2.0 0.8 0.3 1.2 0.6

• 0.6

0.8 0.9 0.7 0.6 0.3 0.5 0.4 0.2

• 0.2

1.7 1.6 1.6 2.3 1.9 1.0 0.7 0.6 0.6 0.4 0.7 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 Month-to- month Vacant Walmart Other Anchor Non-anchor LEASE MATURITY BY AREA (in millions of square feet) Average roll of 2.4M sf. annually (7.0% of total GLA per year) ▪ Average lease term of 5.1 years ▪ Average remaining lease term of 5.9 years for Walmart, with multiple renewal options of up to 80 years ▪ Average remaining lease term excluding Walmart is 4.5 years ▪ 2,954,405 sf. or 82.6% of 2019 lease maturities have been renewed or near completion ▪ Average “same property” NOI growth is 1.0% to 1.5% p.a.

ST STAB ABLE LE RETAIL INCOME BASE….

66

…& CONTINUED EXP EXPANSION ANSION

49%

NEW REPLACEMENT

51%

67

ONGOING SERVICES INNO INNOVATION TION…

… NEW REV REVENUE ENUE SOU SOURCES CES

5G C 5G CEL ELL T L TOWERS WERS EV C EV CHA HARGI GING NG ST STATION TIONS DIG DIGIT ITAL SIG AL SIGNAGE GE PE PENG NGUI UIN N PICKU PICKUP

68

$0 $200 $400 $600 $800 $1,000 $1,200

SmartCentres TSX Capped REIT TSX Composite

TOTAL RETURNS TO UNIT HOLDERS CONTINUE TO GROW

14.9% AVERAGE ANNUAL RETURN SINCE IPO

69

CONTINUED GROWTH IN RENTAL REVENUE & FFO PER UNIT (AS OF DECEMBER 31, 2018)

RENTAL REVENUE

FFO

6.8% CAGR

since 2014

4.0% CAGR

since 2014 608 670 728 747 790 2014 2015 2016 2017 2018 1.95 2.10 2.17 2.20 2.28 2014 2015 2016* 2017 2018

70

STABLE CASHFLOW

84.7% 81.1% 83.1% 81.8% 83.0% 2014 2015 2016 2017 2018

FFO per Unit(1) 1.95 2.10 2.17(3) 2.20 2.28 AFFO/ACFO per Unit(2) 1.84 1.99 2.00(3) 2.10 2.13 Distributions per Unit 1.56 1.61 1.66 1.71 1.76 DRIP participation rate 15.4% 19.1% 20.9% 22.0% 23.4% Distributions reinvested through DRIP 28,814 39,137 46,212 50,719 56,656 Surplus of AFFO/ACFO over distributions paid(2) 68,390 95,117 109,333 111,803 115,384

PAYOUT RATIO*

▪ Distributions fully funded from operating cashflow ▪ Annual distribution increases announced in each of 2014, 2015, 2016, 2017, 2018, and 2019 of $0.05 per unit. Current annual distribution per unit is $1.85

71

0.1 0.2 1.0 2.6 3.6 3.9 4.2 4.2 4.4 6.0 6.5 7.1 7.1 8.5 8.7 9.4 9.5 9.7 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Q3 2019

TOTAL ASSETS VALUED AT $9.7B

30.8% CAGR

since 2002 TOTAL ASSETS

72

DEBT / MATURITY LEVERAGE

33 140 203 275 180 119 371 87 3 45 80 320 250 350 300 200 100 160 250 250 100 200 300 400 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 BEYOND Secured Debt Unsecured Bank Loans Unsecured Debentures DEBT MATURITY (in millions of $)

73

LEVERAGE PROFILE

• Sep. 30

2019

• Dec. 31

2018

• Dec. 31

2017

• Dec. 31

2016 Debt to Aggregate Assets 41.8% 43.9% 45.4%(1) 44.3% Ratio of Secured Debt to Unsecured Debt 0.83X 1.1X 1.4X 2.0X Unencumbered Assets $4.7B $4.3B $3.4B $2.7B Adjusted Debt to Adjusted EBITDA 7.8X 8.2X 8.4X 8.4X Interest Coverage 3.3X 3.3X 3.1X 3.1X Liquidity: Cash Resources $500M $399M $646M $355M Weighted Average Interest Rate (Total Debt) 3.66% 3.73% 3.69% 3.72% Weighted Average Term to Maturity (Total Debt) 4.5 yrs 4.9 yrs 5.1 yrs 5.2 yrs

74

CONSERVATIVE CAPITAL STRUCTURE

18.5% Secured Mortgage Financing

Amount - $1.8B Weighted Avg Interest Rate – 4.00% Weighted Avg Term to Maturity – 4.3 years

19.6% Unsecured Debentures

Amount - $1.9B Weighted Avg Interest Rate – 3.28% Weighted Avg Term to Maturity – 4.1 years

1.5% Debt on Equity Accounted Investments

Amount - $146M Weighted Avg Interest Rate – 3.89% Weighted Avg Term to Maturity – 15.1 years

4.8% Operating Lines / Bank Loans / Outstanding LC’s

Operating Line – $0 Bank Loans – $400M Letters of Credit – $63M

55.6% Equity (as at November 11, 2019)

Units Outstanding – 171M Share Price – $31.62 Market Capitalization – $5.4B

Focused on: ▪ Lowering interest rates on renewals ▪ Maintaining maximum flexibility ▪ Reducing leverage over time ▪ Rebalancing unsecured and secured debt ratios

$9.7B

Total Enterprise Value

75