PURE INDUSTRIAL REAL ESTATE TRUST September 2015
NOTICE TO THE READER THIS PRESENTATION AND ITS CONTENTS ARE CONFIDENTIAL AND ARE NOT FOR PUBLIC DISTRIBUTION This presentation has been prepared for informational purposes only. By reading this presentation or any other accompanying info rmation relating to Pure Industrial Real Estate Trust (“ PIRET ”), the reader agrees: (1) to keep strictly confidential the contents of this presentation and such other information and not to disclose such documentation, the contents thereof or any such information to any third party; (2) not to copy all or any portion of this presentation, or any such other information; and (3) to return this presentation and all such other documents and information to PIRET upon the request of PIRET. This presentation is strictly confidential. This presentation is personal to each recipient and does not constitute an offer to any person or to the public generally to subscribe for or otherwise acquire any of the securities of PIRET. Distribution of this presentation to any person other than the recipient and those persons, if any, retained to advise such recipient with respect thereto is unauthorized, and any disclosure of any of its contents without the prior written consent of PIRET is prohibited. Each recipient, by reading this presentation, agrees to the foregoing. FORWARD-LOOKING INFORMATION This presentation includes forward-looking information made as of August 31, 2015 within the meaning of applicable securities laws (also known as forward-looking statements) with respect to PIRET, including without limitation, statements regarding its proposed acquisitions, projected costs, business operations and strategy, and financial performance and condition. These statements generally can be identified by the use of forward- looking words such as “may”, “will”, “expect”, “intend”, “plan”, “estimate”, “anticipate”, “believe”, or “continue”, or the negative thereof, or similar variations. In part icular, certain statements in this presentation discuss PIRET’s anticipated future events. These statements include, but are not limited to: (i) the accretive acquisition of properties and the anticipated extent of the accretion of any acquisitions, which could be impacted by demand for properties and the effect that demand has on acquisition capitalization rates and changes in the cost of capital; maintaining/improving occupancy levels and rental revenue, which could be impacted by changes in demand for PIRET’s properties, tenant bankruptcies, the effects of general economic conditions and supply of competitive (ii) locations in proximity to PIRET’s locations; (iii) overall indebtedness levels, which could be impacted by the level of acquisition activity PIRET is able to achieve and future financing opportunities; (iv) tax exempt status, which can be impacted by regulatory changes enacted by governmental authorities; (v) anticipated distributions, payout ratios and cash flow, which could be impacted by capital expenditures, results of operations and capital resource allocation decisions; (vi) anticipated replacement of expiring tenancies, which could be impacted by the effects of general economic conditions and the supply of competitive locations; and (vi) analyst consensus figures including AFFO and FFO as well as market cap goals as expressed by management. In addition, any pro forma financial information included this presentation is forward-looking information. Forward- looking statements are provided for the purpose of presenting information about management’s current expectations and pl ans relating to the future and readers are cautioned that such statements may not be appropriate for other purposes. Although PIRET’s management believes that the expectations reflected in such forward-looking statements are reasonable and represent PIRET’s internal projections, expectations and belief at this time, such statements involve known and unknown risks and uncertainties which may cause the actual performance and results in future periods to differ materially from any estimates or projections of future performance or results expressed or implied by such forward-looking statements and should not be read as guarantees of future performance or results. Those risks and uncertainties include, among other things, risks related to: unit prices; liquidity; credit risk and tenant concentration; interest rate and other debt related risk; tax risk; ability to access capital markets; lease rollover risk; competition for real property investments; en vironmental matters; changes in legislation and indebtedness of PIRET. Management believes that the expectations reflected in forward- looking statements are based upon reasonable assumptions and information currently available which include, management’s current expectations, estimates and assumptions that: proposed acquisitions will be completed on the terms and basis agreed to by PIRET, property acquisition and disposition prospects and opportunities will be consistent with PIRET’s experience over the past 12 months, the industrial real estate market in Canada will remain stable, the global economic environment will remain stable, interest rates will remain at current levels, and PIRET’s business strategy, plans, outlook, projections, targets and operating costs will be consistent with PIRET’s experience over the past 12 months, PIRET will be able to maintain occupancy at current levels, PIRET’s tenants will not default on lease terms, governmental regulations and taxation will not change to adversely affect PIRET’s business and financial results, and PIRET will be able to obtain adequate insurance and financing; however, management can give no assurance that actual results will be consistent with these forward-looking statements. Important factors that could cause actual results to differ materially from such expectations include, among other things, the availability of suitable properties for purchase by PIRET, the availability of mortgage financing for such properties, and general economic and market factors, including interest rates, business competition, changes in government regulations or in tax laws, and the projections included in management’s financial forecas t, in addition to those factors discussed or referenced in the “Risk Factors” section in PIRET’s annual information form and other continuous disclosure documents filed on SEDAR at www.sedar.com. The forward-looking statements contained herein are expressly qualified in their entirety by this cautionary statement. These forward-looking statements are made as of the date of this presentation and PIRET does not undertake any obligation to publicly update such forward-looking statements to reflect new information, subsequent events or otherwise, except as expressly required by applicable securities laws. NON-IFRS MEASURES There are a number of non-IFRS measures used in this presentation, including funds from operations (FFO) and adjusted funds from operations (AFFO). PIRET believes that these non-IFRS measures are appropriate measures of the operating performance of PIRET. These and other non-IFRS measures do not have any standardized meaning prescribed by IFRS. PIRET’s calculation of these measures may differ from the methodology used by other issuers and, accordingly, may not be comparable to such other issuers. PIRET believes that these measures are appropriate measures of PIRET’s operating performance because they facilitate an understanding of PIRET’s operating performance without giving effect to certain non-cash expenses. None of these measures is equivalent to net income or cash generated from operating activities determined in accordance with IFRS. 1
WHY CHOOSE AN INDUSTRIAL REIT? Stable, predictable cash flow Positive net absorption over past 20 years Supply-demand equilibrium Low vacancy rates Low exposure to development cycle risk Fragmented market ripe for consolidation Historically attractive yields 2
WHY PIRET? Canada’s best industrial REIT portfolio 173 high quality properties and ~17.5 million square feet AUM 160 concentrated in Canada’s strongest & most liquid markets 13 properties in major U.S. markets with a leading e-commerce tenant Stable and diversified blue-chip tenant base Conservative capital structure Fully-aligned internal management with proven track record National platform with significant joint venture potential 3
STRONG GROWTH PROFILE 2015 4 properties ~$196 million 2014 MARKET CAPITALIZATION ($ MILLIONS) 1,200 24 properties ~$429 million 2013 S&P/TSX Composite 1,000 77 properties Index Inclusion $596 million Mar 20, 2015 2012 800 26 properties $295 million $500 million market cap Jan 31, 2013 2011 600 29 properties $219 million 2010 $21 million IPO Added to Dow Jones Management internalized 400 18 properties Sep 2007 Canada Select May 2011 $131 million Equal Weight REIT Index Dec 2012 2007 - 2009 200 17 properties TSX graduation listing $70 million Sep 2012 2009 2011 2012 2007 2008 2010 2013 2014 2015 4
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