January 2015 Forward-looking Disclaimer Certain statements made - - PowerPoint PPT Presentation

Plaza Retail REIT Presentation

January 2015

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Forward-looking Disclaimer

• Certain

statements made in this presentation are forward-looking and are subject to risks, uncertainties and assumptions concerning future conditions that may ultimately prove to be inaccurate and may cause actual results and events to be materially different than those predicted.

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Who Are We?

• Canada’s leading value creation REIT

– Retail owner and developer – Strong competitive advantage in Eastern Canada – TSX-listed REIT (PLZ.UN) – Market cap of ≈ $380 million; assets of ≈ $1 billion

• 309 properties, 6.6MM sq. ft., eight provinces

– National tenants account for ≈ 90% of revenues

• Growth oriented with solid yield

– Established development pipeline and history of growth – Distribution yield of ≈ 6% – 12 years of consecutive distribution increases (Board approved an increase for 2015 to $0.25 per unit which represents an increase of 4.2%) – Distribution compound annual growth rate of ≈ 10% – Current development pipeline of 19 projects totaling ≈ 631,000 sq. ft.

• Aligned, experienced & internalized management

– Insiders own ≈ 23% of the units – Entrepreneurial focus with strong “value-add” in-house capabilities – All development done internally for PLZ’s account

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Why Invest in Plaza Retail REIT?

• 15 year track record of shareholder/unitholder

returns

– Annualized total return ≈ 15.0% since going public

• History of dividend/distribution increases

– One of only two REITs/REOCs to increase dividends/distributions every year (12 year history, including 2015 increase)

• Different philosophy than many of our peers

– Value-add activities and cash flow per unit are key drivers – Low payout ratio – High insider ownership – History of longer-term financing in order to lock in returns and reduce financing risk (many 15 & 20 year terms; weighted average term to maturity ≈ 6.8 years)

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Plaza Shareholder/Unitholder Returns

Plaza returns since going public (July 1999 to January 8, 2014)

• Annualized Rate of Return:

15.0%(1) (compounded annually)

• A $100,000 investment in July

1999 would be worth $815,498 today (including dividends/distributions)

(1) Annualized rate of return includes capital appreciation and dividend/distribution income

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Plaza Share/Unit Price Compared to Indices

• 100.0%

0.0% 100.0% 200.0% 300.0% 400.0% 500.0% 600.0% 700.0% Percentage Change Date

Plaza Share/Unit Price History

PLZ TSX TSX-RE

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$0.00 $0.05 $0.10 $0.15 $0.20 $0.25 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 15

$0.080 $0.090 $0.105 $0.125 $0.150 $0.175 $0.185 $0.1925 $0.20625 $0.215 $0.225 $0.240 $0.250

Dollars

Dividend/Distribution Growth Plaza Dividend/Distribution Track Record

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Cumulative Dividend/Distribution Growth vs Peers

Plaza Dividend/Distribution Track Record

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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Development Drives Value Creation

• Development is a key part of our business

– Drives long term NAV growth, accretion and distribution increases

• Development accelerates growth

compared to straight acquisitions

– 200-300 bps spread between development yields and acquisition yields/cap rates – Assuming $30 million in development:

• NAV of the development assets grows by ≈ 30-50%

upon completion

• ≈ 40% more FFO from development vs acquisitions (1)

(1) On a run-rate, stabilized basis and assuming all other assumptions being equal; figures are illustrative in nature and could change materially depending on the assumptions utilized

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KEYreit – Value Extraction Update

• Value extraction from the portfolio
• ccurring via:

– Sale of “highest and best use” assets at well- above cost

• To date we have sold $59.7MM of assets for a

gain of $15.6MM over our underwritten value

– Active redevelopment of sites to fit new and better tenants with better covenants

• 12 currently being worked on; to be completed
• ver the next 12-18 months

– Realized synergies of G&A and property and asset management of ≈ $3MM per year – Refinancings of higher cost mortgage loans and debentures will result in increased annual cash flow of ≈ $1.3MM per year

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Roll-In of JV Partners’ Interests

• Plaza closed on purchase of jv partners’

interests in 8 properties effective January 1, 2015

• $6.1MM net purchase price; $15.4MM

gross purchase price

• Plaza issued 1.319MM exchangeable

units of a subsidiary entity at $4.60 per unit, exchangeable into units of Plaza

• Immediately accretive to FFO and cash

flow (low double digit returns)

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0.0% 20.0% 40.0% 60.0% 80.0% 100.0% 120.0% Plaza First Capital Calloway Crombie Riocan Retrocom (1) 80.5% 83.8% 88.4% 94.7% 95.3% 118.0%

Plaza’s Payout Ratio vs. Selected Retail Peers

Conservative AFFO Payout Ratio

2013 year end figures used in order to deal with any seasonal fluctuations PLZ’s AFFO payout ratio excludes one-time administrative costs (1) Represents approximate amount based on public information as Retrocom doesn’t report AFFO

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Experienced, Internalized & Aligned Management

• Fully

internalized management platform and high insider ownership (23%) provide complete alignment of interests between unitholders and management

• Strong relationships with retailers as evidenced

by the repeat business with best-in-class retail chains

• Development

and

• perating

expertise that benefit Plaza’s unitholders as value is created inside Plaza Retail REIT

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Long Term Mortgage Maturity Chart (Q3 2014)

0.0% 2.0% 4.0% 6.0% 8.0% 10.0% 12.0% 14.0% 2014 2015 2016 2017 2018 2019 0.3% 4.4% 13.4% 10.5% 5.7% 11.5%

% of Total Principal

$1.1M 6.0% $14.5M 6.0% $44.0M 5.3% $34.3M 5.4%

WA Expiring Rate

Reliable Cash Flow

$18.5M 6.0%

WA Term to Maturity = 6.8 yrs Debt-to-Gross Assets = 48.9% (excluding converts) 55.2% (including converts)

$37.6M 4.1%

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Reliable Cash Flow

Lease Expiry Schedule (Q3 2014)

Strip Plaza Enclosed Malls Single-User Total Average Lease Term 7.0 years 4.2 years 8.0 years 6.9 years

Square Feet

100,000 200,000 300,000 400,000 500,000 600,000 2014 2015 2016 2017 2018 2019 1.7% 8.3% 10.1% 8.4% 9.6% 7.0%

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PROVINCE # Properties

• Sq. Ft.

(000s) Region % By Region New Brunswick 49 1,767 Newfoundland 10 637 Nova Scotia 38 1,169 Atlantic 61% P.E.I. 9 486 Québec 97 1,797 Québec 27% Ontario 86 718 Ontario 11% Manitoba 8 35 Alberta 12 53 Western 1% Total 309 6,662 100% TYPE OF PROPERTY # Proper ties

• Sq. Ft.

(000s) Enclosed 4 894 Strips 94 4,338 Single Use - QSR 146 354 Single Use - Retail 65 1,076 Total 309 6,662

Reliable Cash Flow

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Reliable Cash Flow

National & Regional Tenants (Q3 2014)

90.8% 3.8% 5.4%

National Regional

*Represented by 6 tenants

1.6% 1.7% 1.8% 1.9% 2.0% 2.9% 3.3% 4.5% 12.9% 24.7%

Bulk Barn Reitmans Best Buy/Future Shop Marks Work Wearhouse Pharma Plus Staples Sobeys Dollarama KFC* Shoppers

Top Ten Tenant Mix – 57.3% (Q3 2014)

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0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0% 70.0% 80.0% 90.0% 100.0% 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 (Q3)

96.8% 96.7% 96.9% 97.9% 97.4% 97.8% 96.5% 95.9% 94.8% 96.3%

Reliable Cash Flow

Consistently High Occupancy Levels

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Appendix

Overview of Current Development Pipeline

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2013/2014 Completed Developments

2013/2014 Completed Developments % Ownership

• Sq. Ft. at 100%

Plaza SP Magog (Phase I & 2), Magog, QC 50% 76,097 Les Promenades St. Francois, Laval (Montreal), QC 100% 54,694 Plaza De L’Ouest (Phase I), Sherbrooke, QC 50% 96,081 Plaza HDB, Boisbriand, QC 33% 6,951 4999 Queen Mary Road, Montreal, QC 25% 13,041 210 Wyse Road, Dartmouth (Halifax), NS 50% 60,979 Commercial Street (Phase II), New Minas, NS 100% 9,537

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Planned Development Activity

Planned Development Activity % Ownership

• Sq. Ft. at 100%

Plaza de L’Ouest (Phase II & III), Sherbrooke, QC 50% 98,000 90 Blvd. Tache Ouest, Montmagny, QC 50% 6,000

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

20% 200,000 Plaza Chemin Chambly, Longueuil (Montreal), QC (redevelopment) 100% 39,431 Champlain Plaza (Phase II), Dieppe (Moncton), NB 100% 60,000 Oromocto Mall, Oromocto, NB (redevelopment) 100% 86,025 Grand Falls Shopping Centre, Grand Falls, NB (redevelopment) 100% 133,998 Lansdowne Place (Phase II), Saint John, NB 100% 60,000 5400 Laurier Ouest, St-Hyacinthe, QC 25% 10,000 Riverside Drive Plaza, Timmins, ON 80% 35,167 Fairville Blvd (Phase III), Saint John, NB 100% 24,000 Starrs Rd, Yarmouth, NS (redevelopment) 100% 45,000 413 Coverdale Rd, Riverview, NB (redevelopment) 100% 4,000 960 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% 2,000 280 Main St., Fredericton, NB 100% 30,000 Beauport, Beauport, QC (redevelopment) 100% 3,000

• St. Charles, Kirkland, QC (redevelopment)

100% 3,000

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Northwest Centre, Moncton, NB

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SP Magog (Phase I) Magog, QC

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Les Promenades St. Francois, Laval, QC

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Plaza de l’Ouest (Phase I), Sherbrooke, QC

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Plaza de l’Ouest (Phase I), Sherbrooke, QC

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Plaza HDB, Boisbriand, QC

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4999 Queen Mary Road, Montreal, QC

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210 Wyse Road, Dartmouth (Halifax), NS

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Commercial St Phase II, New Minas, NS

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• St. Jerome, Montreal, QC

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Plaza Retail REIT – “Building Value”

Questions

Michael Zakuta – President & CEO – (514) 457-0997 Floriana Cipollone – CFO – (416) 848-4583 Or Contact us at: Plaza Retail REIT (TSX – PLZ.UN) 98 Main Street Fredericton, NB E3A 9N6 Ph: (506)451-1826 Email: info@plaza.ca website: www.plaza.ca