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

Plaza Retail REIT Presentation January 2015

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. www.plaza.ca 2

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 www.plaza.ca 3

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) www.plaza.ca 4

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 www.plaza.ca 5

Plaza Share/Unit Price Compared to Indices Plaza Share/Unit Price History 700.0% 600.0% 500.0% 400.0% Percentage Change 300.0% 200.0% 100.0% 0.0% -100.0% PLZ TSX TSX-RE Date www.plaza.ca 6

Plaza Dividend/Distribution Track Record Dividend/Distribution Growth $0.250 $0.240 $0.25 $0.225 $0.215 $0.20625 $0.1925 $0.20 $0.185 $0.175 $0.150 Dollars $0.15 $0.125 $0.105 $0.090 $0.10 $0.080 $0.05 $0.00 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 15 www.plaza.ca 7

Plaza Dividend/Distribution Track Record Cumulative Dividend/Distribution Growth vs Peers 180.00% 160.00% 140.00% 120.00% 100.00% 80.00% 60.00% 40.00% 20.00% 0.00% 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Plaza Calloway Crombie First Capital Riocan www.plaza.ca 8

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 www.plaza.ca 9

KEYreit – Value Extraction Update • Value extraction from the portfolio occurring 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 over 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 www.plaza.ca 10

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) www.plaza.ca 11

Conservative AFFO Payout Ratio Plaza’s Payout Ratio vs. Selected Retail Peers 118.0% 120.0% 95.3% 94.7% 100.0% 88.4% 83.8% 80.5% 80.0% 60.0% 40.0% 20.0% 0.0% Plaza First Capital Calloway Crombie Riocan Retrocom (1) 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 www.plaza.ca 12

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 operating expertise that benefit Plaza’s unitholders as value is created inside Plaza Retail REIT www.plaza.ca 13

Reliable Cash Flow Long Term Mortgage Maturity Chart (Q3 2014) 13.4% 14.0% % of Total Principal 11.5% 12.0% 10.5% 10.0% 8.0% 5.7% 6.0% 4.4% 4.0% 2.0% 0.3% 0.0% 2014 2015 2016 2017 2018 2019 $1.1M $14.5M $44.0M $34.3M $18.5M $37.6M WA Expiring Rate 6.0% 6.0% 5.3% 5.4% 6.0% 4.1% WA Term to Maturity = 6.8 yrs Debt-to-Gross Assets = 48.9% (excluding converts) 55.2% (including converts) www.plaza.ca 14

Reliable Cash Flow Lease Expiry Schedule (Q3 2014) 600,000 10.1% 9.6% 500,000 8.4% 8.3% Square Feet 400,000 7.0% 300,000 200,000 1.7% 100,000 0 2014 2015 2016 2017 2018 2019 Strip Plaza Enclosed Single-User Total Malls Average Lease Term 7.0 years 4.2 years 8.0 years 6.9 years www.plaza.ca 15

Reliable Cash Flow # Sq. Ft. % By PROVINCE Properties (000s) Region 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% # Proper Sq. Ft. TYPE OF PROPERTY ties (000s) Enclosed 4 894 Strips 94 4,338 Single Use - QSR 146 354 Single Use - Retail 65 1,076 Total 309 6,662 www.plaza.ca 16

Reliable Cash Flow National & Regional Tenants (Q3 2014) 5.4% 3.8% 90.8% National Regional Top Ten Tenant Mix – 57.3% (Q3 2014) 24.7% Shoppers KFC* 12.9% Dollarama 4.5% Sobeys 3.3% Staples 2.9% Pharma Plus 2.0% Marks Work Wearhouse 1.9% Best Buy/Future Shop 1.8% 1.7% Reitmans Bulk Barn 1.6% * Represented by 6 tenants www.plaza.ca 17

Reliable Cash Flow Consistently High Occupancy Levels 96.9% 97.4% 97.8% 100.0% 96.8% 97.9% 96.7% 96.5% 95.9% 94.8% 96.3% 90.0% 80.0% 70.0% 60.0% 50.0% 40.0% 30.0% 20.0% 10.0% 0.0% 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 (Q3) www.plaza.ca 18

Appendix Overview of Current Development Pipeline www.plaza.ca 19

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 www.plaza.ca 20