Investor Presentation November 2018
FORWARD LOOKING STATEMENTS Certain statements contained in this document constitute forward-looking information within the meaning of securities laws. Forward-looking information may relate to Choice Properties REIT’s (the “Trust”) future outlook and anticipated events or results and may include statements regarding the financial position, business strategy, budgets, litigation, projected costs, capital expenditures, financial results, taxes, plans and objectives of or involving the Trust. Particularly, statements regarding future results, performance, achievements, prospects or opportunities for the Trust or the real estate industry are forward-looking statements. In some cases, forward-looking information can be identified by such terms such as ‘‘may’’, ‘‘might’’, ‘‘will’’, ‘‘could’’, ‘‘should’’, ‘‘would’’, ‘‘occur’’, ‘‘expect’’, ‘‘plan’’, ‘‘anticipate’’, ‘‘believe’’, ‘‘intend’’, ‘‘estimate’’, ‘‘predict’’, ‘‘potential’’, ‘‘continue’’, ‘‘likely’’, ‘‘schedule’’, or the negative thereof or other similar expressions concerning matters that are not historical facts. The Trust has based these forward-looking statements on factors and assumptions about future events and financial trends that it believes may affect its financial condition, results of operations, business strategy and financial needs, including that the Canadian economy will remain stable over the next 12 months, that inflation will remain relatively low, that interest rates will remain stable, that tax laws remain unchanged, that conditions within the real estate market, including competition for acquisitions, will be consistent with the current climate, that the Canadian capital markets will provide the Trust with access to equity and/or debt at reasonable rates when required and that Loblaw will continue its involvement with the Trust. Although the forward-looking statements contained in this document are based upon assumptions that management of the Trust believes are reasonable based on information currently available to management, there can be no assurance that actual results will be consistent with these forward-looking statements. Forward-looking statements necessarily involve known and unknown risks and uncertainties, many of which are beyond the Trust’s control, that may cause the Trust’s or the industry’s actual results, performance, achievements, prospects and opportunities in future periods to differ materially from those expressed or implied by such forward-looking statements. These risks and uncertainties include, among other things, the factors discussed under ‘‘Enterprise Risks and Risk Management’’ section of the Trust’s Report to Unitholders. The forward-looking statements made in this presentation relate only to events or information as of the date on which the statements are made in this document. Except as required by law, the Trust undertakes no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise, after the date on which the statements are made or to reflect the occurrence of unanticipated events. These forward-looking statements are made as of November 7, 2018 and Choice Properties REIT assumes no obligation to update or revise them to reflect new events or circumstances, except as required by law. 2
A PREMIER DIVERSIFIED REIT Choice Properties is an owner, manager and developer of a high-quality real estate portfolio 3
PORTFOLIO ~67 M (1) 751 $15.9 B (1),(2) (1) square feet properties in Assets of GLA (1) As at September 30, 2018. 4 (2) Based on proportionate share.
BUSINESS MODEL Our primary business goal is to carefully accumulate and aggressively manage a diversified portfolio of high-quality real estate assets and to deliver the benefits of real estate ownership to our unitholders 5
KEY INVESTMENT HIGHLIGHTS Canada’s premier REIT comprising of National footprint concentrated in Size, Scale and Reach 751 properties spanning ~67M sq. ft. Canada’s largest markets Portfolio focused on necessity-based Portfolio Stability retail, and high-quality industrial and Strategic relationship with Loblaw and Reliability office assets Development Potential Transformational development pipeline Established operating platform with a Backed by a Robust providing long-term value creation and proven track record of success growth Operating Platform Well-Positioned Diversified portfolio with Financial strength, solid balance sheet Portfolio Supported occupancy and staggered lease and investment grade credit by Prudent Capital rating (“BBB”) maturities that support debt service Structure 6
OUR PORTFOLIO Square Number of Footage Properties (M) A diversified portfolio with a national footprint Retail 595 46.6 concentrated in Canada’s Industrial 112 16.3 largest markets. Office 18 3.7 Offering stability through long-term leases and a Residential 3 0.2 strategic relationship INCOME PRODUCING 728 ~67 with Loblaw – Canada’s largest retailer. Developments 23 TOTAL 751 7 *As at September 30, 2018.
WELL-LOCATED PROPERTIES CONCENTRATED IN ATTRACTIVE MARKETS Base Rent by Urban Markets (1)(2) ~72% Toronto CMA 16.3% of base rent from large and medium urban areas Loblaw Small Urban Small 21.4% Urban 27.9% Calgary CMA ~49% 11.1% from VECTOM Large Urban 57.4% Medium ~77% Urban Vancouver CMA 14.7% 6.9% of base rent in small urban markets is from Loblaw via long-term leases Montreal CMA 6.8% Edmonton CMA Other Large 6.4% (1) Base rent for the three months ended September 30, 2018, including straight-line rent. Ottawa CMA CMAs (2) Based on the definitions of Census Metropolitan Area (CMA), from statistics Canada published 2016; 1.8% 8.1% Large Urban: CMA with Population above 500,000; Medium Urban: CMA with Population 100,000 - 499,999; 8 Small Urban: Other areas with population below 99,999.
TOP 10 TENANTS % of Gross Rental High-quality Top 10 Tenants Revenue tenant base Loblaw/Shoppers 56.3 Income stability through Canadian Tire 2.4 increased exposure to TJX Companies 1.1 national investment grade tenants Suncor Energy Inc. 0.9 Dollarama 0.7 Anchored by a strategic relationship with Loblaw– Staples 0.7 Canada’s largest retailer Sobeys 0.6 Lowe’s Companies 0.6 GoodLife 0.6 TD Canada Trust 0.5 Total 64.4 9 *Gross rent for the three months ended September 30, 2018.
LONG-TERM LEASES PROVIDE CASH FLOW STABILITY LEASE EXPIRY BY YEAR 50,000 70% 66% WALT 45,000 60% 40,000 TOTAL ’000s sq. ft. of GLA 7.7 years 50% 35,000 30,000 40% 25,000 LOBLAW 30% 9.5 years 20,000 15,000 20% 11% ANCILLARY 10,000 10% 4.9 years 5% 5% 5% 4% 5,000 1% - 0% 2018 2019 2020 2021 2022 2023 2024 & Beyond Loblaw Ancillary % of Portfolio 10 *As at September 30, 2018.
RETAIL Strong composition of national tenants Focused on necessity-based retailers with 66% exposure to Loblaw, Canada’s largest food and drug retailer 11
RETAIL PORTFOLIO FOCUSED ON NECESSITY BASED TENANTS OTHER NECESSITY E-COMMERCE BASED RETAIL RESILIENT 8% Loblaw 11% 66% 11% Grocery stores Restaurants / cafes Pharmacies Fitness centres Financial services Personal services Liquor stores 12 *As at September 30, 2018. Based on gross rental revenue.
RETAIL PROPERTIES DARTMOUTH CROSSING CARREFOUR DE LA RIVE SUD ERIN MILLS POWER CENTRE SOUTH EDMONTON COMMON Dartmouth, NS Boucherville, QC Mississauga, ON Edmonton, AB GLA (1) : 970K sq. feet GLA (1) : 530K sq. feet GLA (1) : 320K sq. feet GLA (1) : 540K sq. feet Ownership: 75% Ownership: 75% Ownership: 100% Ownership: 50% 13 (1) GLA excludes shadow anchors.
INDUSTRIAL High quality and generic product Critical Mass in target markets Readily accommodates a broad range of tenants 14
INDUSTRIAL PROPERTIES CREIT DISTRIBUTION PARK | Calgary, AB | 885K sq. ft. 3333 JAMES SNOW PKWY | Milton, ON | 635K sq. ft. 2755 190 th STREET | Surrey, BC | 407K sq. ft. 410 BUSINESS CENTRE | Brampton, ON | 300K sq. ft. 15
OFFICE Large office buildings in target cities Well-located office properties in the downtown core of some of Canada’s largest cities 16
OFFICE PROPERTIES 175 BLOOR ST EAST CALGARY PLACE 1010 SHERBROOKE PLACE 525 UNIVERSITY Toronto, ON Toronto, ON Calgary, AB Montreal, QC GLA: 600K sq. ft. GLA: 580K sq. ft. GLA: 330K sq. ft. GLA: 200K sq. ft. Ownership: 50% Ownership: 50% Ownership: 100% Ownership: 100% Major Tenants: Major Tenants: Major Tenants: Major Tenants: Klick Alta Gas Ltd. Jarislowsky Fraser Hospital for Sick Kids Leo Burnett A.E.S.O. McGill University Cancer Care Ontario Towers Watson MNP Canadian Bank NORR Limited 17
TRANSFORMATIONAL DEVELOPMENT Development pipeline provides long-term growth and value creation 18
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