Investor Presentation Spring 2015 Caution Concerning Forward - - PowerPoint PPT Presentation

Investor Presentation

Spring 2015

Caution Concerning Forward Looking Statements

Certain information in this presentation and oral answers to questions may contain forward-looking information. Actual results could differ materially from conclusions, forecasts or projections in the forward-looking information, and certain material factors or assumptions were applied in drawing conclusions or making forecasts or projections as reflected in the forward-looking information. Additional information about the material factors and risks that could cause actual results to differ materially from the conclusions, forecasts or projections in the forward-looking information presented herein is available in Plaza Retail REIT’s regulatory filings filed on SEDAR (www.sedar.com).

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Profile

• Developer and owner of retail

properties primarily in Atlantic Canada, Quebec and Ontario

• Strong relationships with leading retailers
• National tenants comprise ~90%
• f revenue
• 15 year history of accretive growth and

value creation within the REIT through in-house development expertise

• Competitive advantage as a developer

in Atlantic Canada TSX: PLZ.UN 52-week high / low: $4.60 / $3.79 Units o/s: 92.6 million Distribution: $0.25 / unit (annualized) Insider ownership: 23% 14% Rate of Return CAGR since IPO in 1999 Recent price: $4.43 AFFO payout ratio: 79.5% Market cap: $410 million Debt to GBV (ex converts): 47.7%

properties

306

~ 6.7M square feet

Existing Portfolio Development Pipeline

projects

20

~ 703,000 square feet

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Experienced, Internalized & Aligned Management

Michael Zakuta

President & CEO

Floriana Cipollone

CFO

Earl Brewer

Executive Chairman

Jamie Petrie

COO

Kevin Salsberg

CIO

• Co-founder of the Plaza Group
• 30 years experience in shopping centre development, acquisitions and management
• Acquired and developed over $1 billion in real estate
• LL.B. (University of Montreal), Bachelor of Commerce (McGill University)
• 25 years of business experience, 15 of them in the real estate industry
• Formerly CFO of Charter REIT and VP, Corporate Planning & Strategy at O&Y Properties
• Bachelor of Commerce (University of Toronto)
• Member of the Institute of Chartered Accountants of Ontario since 1992
• Co-founder of the Plaza Group
• Over 40 years experience in real estate development, acquisitions and management
• Acquired and developed over $1 billion in real estate
• LL.B. (University of New Brunswick), Bachelor of Arts (University of New Brunswick)
• 11 years experience in shopping centre development, acquisitions and management
• Former partner with Stewart McKelvey
• B.B.A. and LL.B. (University of NB), Masters in Law (Duke University)
• 12 years experience in shopping centre development, acquisitions and management
• Former COO of KEY Reit; previously with RioCan (leasing) and Trinity Development (AM)
• MBA (University of Ottawa), Honours BSC (University of Western Ontario)

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What Sets Us Apart

Plaza focuses on per unit growth through accretive developments and redevelopments. Plaza is fully internalized and able to develop new retail properties in-house - Plaza does not buy finished properties from 3rd party developers or from related parties at low cap rates. Insiders hold a significant ownership position in Plaza. Plaza relies on its entrepreneurial abilities to adapt to changing market conditions. Plaza locks in consistent long-term returns by financing with long term debt, generally matched to lease maturities. Plaza is one of only two REITs in Canada to have increased its distribution every year over the past 12 years.

1 2 3 4 5 6

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Development vs. Acquisition

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$40 Million Development

Incremental NAV: + $11.4 million ($0.124 / unit) Cash ROI: 20.12% Incremental FFO: + $2.4 million ($0.026 / unit)

$40 Million Acquisition

Incremental NAV: Nil Cash ROI: 8.9% Incremental FFO: + $1.8 million ($0.020 / unit)

Description: Development Acquisition Development/Acquisition Costs: $40,000,000 $40,000,000 Return on Costs – Unlevered: 9.0% 7.0% NOI Before Debt Service: $3,600,000 $2,800,000 Market Capitalization Rates: 7.00% 7.00% Market Value: $51,428,571 $40,000,000 1st Mortgage L/V Ratio: 60.00% 60.00% Loan Amount: Interest Rate: Amortization: Annual Debt Service $30,857,143 4.00% 30 years $1,760,778 $24,000,000 4.00% 30 years $1,369,494 Investment Required: $9,142,857 $16,000,000 Cash Flow: $1,839,222 $1,430,506 Cash Return on Investment: 20.12% 8.94% FFO: $2,365,714 $1,840,000 FFO Return on Investment: 25.88% 11.50% Incremental FFO Per Unit (cents): 2.57 2.00 Incremental NAV Created: $11,428,571 $0 Incremental NAV as a % of Cost: 28.57% 0.00% Incremental NAV Per Unit (cents): 12.42

Managing Development Risk

• Strong growth with limited financial exposure:
• Annual development expenditures
• f $40 to $50 million
• Represents just 4% − 5% of the REIT’s

asset base

• Pre-leased to anchor tenants prior

to construction

• Financed with long term debt, matched

to lease maturities

• Complete larger developments in phases
• Minimal speculative developments
• Capitalize on intense local market

knowledge

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Development Case Study 1:

3 For 1 - Charlottetown, PEI

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Development Case Study 2:

Dead Mall To Super Strip - Sherbrooke, QC

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Development Case Study 3:

Shrink And Grow - Adapting To Market Conditions – Chambly Rd, Longueuil, QC

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Development Case Study 4:

Patience And Vision – Making It Happen – Moncton, NB

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Planned Development Activity

Planned Development Activity % Ownership

• Sq. Ft. at 100%

Plaza de L’Ouest (Phase III), Sherbrooke, QC 50% 40,000 90 Blvd. Tache Ouest, Montmagny, QC 50% 6,000

• St. Jerome (Phase I, II & III), St. Jerome (Montreal), QC

20% 188,066 Plaza Chemin Chambly, Longueuil (Montreal), QC (redevelopment) 100% 37,099 Oromocto Mall, Oromocto, NB (redevelopment) 100% 76,150 Grand Falls Shopping Centre, Grand Falls, NB (redevelopment) 100% 105,647 Lansdowne Place (Phase II), Saint John, NB 100% 60,000 Fairville Blvd (Phase III), Saint John, NB 100% 24,000 Starrs Rd, Yarmouth, NS (redevelopment) 100% 49,189 960 Cole Harbour Rd, Dartmouth (Halifax), NS (redevelopment) 100% 4,000 9 James St., Antigonish, NS (redevelopment) 100% 3,000 Lakeshore Blvd, Toronto, ON (redevelopment) 100% 1,878 280 Main St., Fredericton, NB 100% 35,000 Beauport, Beauport, QC (redevelopment) 100% 2,600

• St. Charles, Kirkland, QC (redevelopment)

100% 2,554 Buchanan (Phase II), Charlottetown, PE 100% 63,601 37th Street SW, Calgary, AB (redevelopment) 100% 2,161 274 North Front St., Belleville, ON (redevelopment) 100% 2,100 12

Our Portfolio: Geography

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Competitive advantage in Atlantic Canada

PROVINCE # Properties

• Sq. Ft.

(000s) Region Alberta 11 51 Western Manitoba 8 35 Western Ontario 84 720 Ontario Québec 97 1,835 Québec New Brunswick 49 1,724 Atlantic Newfoundland 10 641 Atlantic Nova Scotia 37 1,167 Atlantic P.E.I. 10 509 Atlantic

Total 306 6,682 100%

Percentage by Region:

1% 11% 27% 61%

Western Ontario Quebec Atlantic

Our Portfolio: Tenancies

Top Ten Tenants – 57%

(Q1 2015)

National & Regional Tenants

(Q1 2015) 14

90.4% 4.1% 4.2% 1.3% National Regional Local Non-Retail

Quality tenant mix of creditworthy national retailers

1.8% 1.8% 1.9% 2.3% 2.7% 2.9% 3.3% 4.6% 11.4% 24.6%

10 20 30

Our Portfolio: Occupancy

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Preferred locations + high quality tenants = consistent high occupancy

96.8% 96.7% 96.9% 97.9% 97.4% 97.8% 96.5% 95.9% 94.8% 96.4% 95.6% 60.0% 70.0% 80.0% 90.0% 100.0% 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Current

Our Portfolio: Lease Expiry Schedule

Square Feet

Average lease term ~ 6.6 years

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6.5% 9.9% 8.0% 9.5% 7.2% 100,000 200,000 300,000 400,000 500,000 600,000 Remainder 2015 2016 2017 2018 2019

Strip Plazas Enclosed Malls Single-User Retail Single-User QSR Total

Average Lease Term 6.9 years 3.9 years 9.0 years 4.5 years 6.6 years

Our Portfolio: Mortgage Maturities

17 $6.3M 5.15% $42.0M 5.31% $34.3M 5.24% WA Expiring Rate $27.7M 4.96% WA Term to Maturity = 6.4 yrs Debt-to-Gross Assets = 47.7% (excluding converts) 53.9% (including converts) $52.3M 3.77%

% of Total Principal

1.8% 11.8% 9.7% 7.8% 14.7% 0.0% 2.0% 4.0% 6.0% 8.0% 10.0% 12.0% 14.0% 16.0% Remainder 2015 2016 2017 2018 2019

Track Record of Distribution Increases

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$0.00 $0.05 $0.10 $0.15 $0.20 $0.25 $0.30 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Per Unit

Cumulative Dividend/Distribution Growth vs Peers

0.00% 20.00% 40.00% 60.00% 80.00% 100.00% 120.00% 140.00% 160.00% 180.00% 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

Plaza Calloway Crombie First Capital Riocan

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Plaza’s Payout Ratio vs. Selected Retail Peers

79.5% 82.6% 89.6% 90.4% 97.2% 130.2% 0.0% 20.0% 40.0% 60.0% 80.0% 100.0% 120.0% 140.0% Plaza Calloway First Capital Riocan Crombie Retrocom (1)

(1) Represents approximate amount based on public information as Retrocom doesn’t report AFFO

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Investment Highlights

• Unique positioning as a developer and owner
• f retail properties
• Leveraging competitive advantage in Atlantic

Canada

• Stable, high occupancy with national tenants

comprising ~90% of revenue

• Proven track record of superior returns

through property development

• Long-term financing strategy to lock-in returns
• History of distribution growth

(10% CAGR from 2003 to 2015)

• Conservative payout ratio vs peer group
• Alignment of interests with internalized

management and 23% insider ownership

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Appendix

Financial Summary

Summary Information

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(000s, except per unit & % amounts) 3 months ended March 31, 2015 3 months ended March 31, 2014

Total revenue $ 27,458 $ 24,169 Net operating income $ 14,878 $ 14,440 Same-asset net operating income $ 13,791 $ 13,366 Funds From Operations (FFO) $ 7,489 $ 5,499 FFO per unit $ 0.080 $ 0.062 Adjusted Funds From Operations (AFFO) $ 7,385 $ 5,776 AFFO per unit $ 0.079 $ 0.065 Distributions per unit $ 0.0625 $ 0.0600 FFO payout ratio 78.4% 97.0% AFFO payout ratio 79.5% 92.4% Total assets $978,129 $954,973 Debt to gross assets (excluding converts) 47.7% 48.0%

FFO

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(000s, except per unit amounts) 3 months ended March 31, 2015 3 months ended March 31, 2014 Profit for the period attributable to unitholders $16,103 $65,377 Add (deduct): Incremental leasing costs included in administrative expenses 249 243 Distributions on Class B exchangeable units included in finance costs 82

• Deferred income taxes

326 (59,699) Fair value adjustment to restricted share units 12 (8) Fair value adjustment to investment properties (7,330) (1,353) Fair value adjustment to investments (2,595) 91 Fair value adjustment to Class B exchangeable units 396

• Fair value adjustment to convertible debentures

68 772 Equity accounting adjustment 115 79 Non-controlling interest adjustment 63 (3) Basic and diluted FFO $ 7,489 $ 5,499 Basic Weighted Average Units Outstanding (1) 93,916 89,281 Diluted Weighted Average Units Outstanding 93,916 89,281 Basic and diluted FFO per unit $ 0.080 $ 0.062

(1) Includes Class B exchangeable units.

AFFO

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($000s, except per unit amounts) 3 months ended March 31, 2015 3 months ended March 31, 2014 Basic FFO $7,489 $5,499 Add: Amortization of finance charges included in interest expense 305 934 Principal repayment of tenant loans 36 48 Non-controlling interest adjustment 14 3 Development/redevelopment costs included in administrative expenses 268 253 Less: Non-cash revenue – straight-line rent (46) (30) Amortization of mark-to-market on debt assumed from KEYreit included in interest expense (210) (570) Equity accounting adjustment (15) (8) Maintenance capital expenditures – existing properties (269) (146) Leasing costs – existing properties (138) (180) Mortgage placement fees – existing properties (49) (27) Basic and diluted AFFO $7,385 $5,776 Basic and diluted AFFO per unit $0.079 $0.065

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