Q1 – 2019 Investor Presentation
Forward–Looking Statements This presentation contains "forward-looking information" as defined under Canadian securities laws which reflect management’s expectations regarding objectives, plans, goals, strategies, future growth, results of operations, performance, business prospects and opportunities of WPT Industrial Real Estate Investment Trust (the “REIT"), including statements concerning the Transaction (as defined herein) providing access to additional capital resources and enhanced and diversified cash flows, achievement of the targeted US$1.0 B in equity for the venture with Canada Pension Plan Investment Board and Alberta Investment Management Corporation (the “Venture”), achievement of increased property acquisition through the Venture pipeline, expected private capital management and incentive fees, expected availability of WPT Capital Advisors, LLC-managed properties for acquisition and the length of employment for the internalized employees. The words “plans”, “expects”, “scheduled”, “estimates”, “intends”, “anticipates”, “projects”, “believes”, or variations of such words and phrases (including negative variations) or statements to the effect that certain actions, events or results “may”, “will”, “could”, “would”, “might”, “be achieved”, or “continue” and similar expressions identify forward-looking statements. These statements reflect the REIT's current expectations regarding future events and operating performance, the REIT’s future growth potential and other prospects and opportunities, results of operations, demographic and industry trends and future legislative and regulatory approaches with respect to matters affecting the REIT and speak only as of the date of this presentation. Forward looking statements are necessarily based on a number of estimates, beliefs and assumptions that are inherently subject to significant business, economic and competitive uncertainties and contingencies which could cause actual results to differ materially from those that are disclosed in such forward-looking statements. While considered reasonable by management of the REIT as of the date of this presentation, any of these estimates, beliefs or assumptions could prove to be inaccurate, and as a result, the forward-looking statements based on those estimates, beliefs or assumptions could be incorrect. When relying on forward-looking statements to make decisions, the REIT cautions readers not to place undue reliance on these statements, as forward-looking statements involve significant risks and uncertainties and should not be read as guarantees of future performance or results, and will not necessarily be accurate indications of whether or not the times at or by which such performance or results will be achieved, if achieved at all. A number of factors could cause actual results to differ materially from the results discussed in the forward-looking statements, including but not limited to those factors discussed or referenced under the “Risk Factors” section of the REIT’s MD&A for the year ended December 31, 2018 and the REIT’s annual information form (the “AIF”) for the year ended December 31, 2018. This presentation does not constitute or form part of any offer for sale or solicitation of any offer to buy or subscribe for any securities nor shall it or any part of it form the basis of or be relied on in connection with, or act as any inducement to enter into, any contract or commitment whatsoever. The information contained in this presentation concerning the REIT and its affiliates does not purport to be all-inclusive or to contain all the information that a prospective purchaser or investor may desire to have in evaluating whether or not to make an investment in the REIT. The information is qualified entirely by reference to the REIT’s MD&A and the AIF. Certain terms includes in this presentation such as debt-to-gross book value (“GBV”), funds from operations (“FFO”), adjusted funds from operations (“AFFO”), net operating income (“NOI”), book value per Unit, and same property net operating income (“Same property NOI”) are used by management to measure, compare and explain the operating results and financial performance of the REIT and are not recognized terms under IFRS, and therefore should not be construed as alternatives to net income (loss) and comprehensive income (loss) or cash flow from operating activities calculated in accordance with IFRS. Management believes these terms are relevant measures in comparing the REIT’s performance to industry data, the REIT’s ability to earn and distribute cash returns to holders of the REIT’s trust units, and the REIT’s ability to meet its ongoing obligations. These terms are defined and reconciled to the most directly comparable measure specified in the REIT’s MD&A. Such terms do not have a standardized meaning prescribed by IFRS and may not be comparable to a similarly titled measure presented by other issuers. 2
Overview WPT Industrial Real Estate Investment Trust is a fully internalized Canadian-listed REIT focused exclusively on the U.S. Industrial Sector
U.S. Exposure Through Fully-Integrated Platform Seasoned management team with extensive knowledge of the U.S. industrial sector Unit price and annual distribution of $0.76/unit in U.S. Dollars Access to high-barrier U.S. markets through off-market private capital acquisition pipeline 4
Proven Growth Strategies MAINTAINING CONTRACTUAL OFF-MARKET FEE REVENUE CONSISTENTLY RENT INVESTMENT FROM PRIVATE HIGH INCREASES PIPELINE CAPITAL OCCUPANCY WPT ROLLING EXTENSIVE INTERNAL EXTERNAL MANAGEMENT RENTS TO INDUSTRY GROWTH GROWTH MARKET AT PLATFORM RELATIONSHIPS RENEWAL PROPERTY ENTRY INTO PARTNERSHIPS STRATEGIC EXPANSION NEW U.S. WITH PREMIER FINANCING AND GLOBAL MARKETS INVESTORS DEVELOPMENT 5
Investment Criteria We target Tier 1 and 2 We underwrite investments distribution markets with focusing on asset basis proximity to major population relative to current centers, significant Basis replacement costs and transportation infrastructure, competitive future access to cost-effective labor, speculative development and favorable long-term rent growth prospects Rents Relative Location to Market Building Functionality We focus on acquisition of We analyze submarket and assets with in-place rents tenant-specific demand that compare favorably to drivers to determine market rents to drive long desired building attributes term NOI growth 6
AVG. CEILING HEIGHT 2 INVESTMENT PROPERTIES 30’ 70 ……………………………… AVG. BLDG. SIZE (SQ. FT.) 2 ……………………………… 303,000 TOTAL SQUARE FEET OF GLA 21,072,725 ………………………………… AVG. TENANT SIZE (SQ. FT.) 2 ………………………………… 149,000 FAIR VALUE OF INVESTMENT ………………………………………. PROPERTIES AVG. ASSET AGE (YEARS) 2 $1.4B 16 1. As at March 31, 2019 and inclusive of the Infill Logistics Portfolio acquired on April 5, 2019 2. Industrial assets only 7
Quarterly Performance Q1 2019 Q4 2018 Q3 2018 Q2 2018 (all figures in ‘000s, except per Unit amounts and gross leasable area (“GLA”) NOI $ 18,141 $ 17,641 $ 17,182 $ 16,591 FFO 9,614 10,966 11,379 10,939 0.176 0.216 0.227 0.223 FFO per Unit (diluted) AFFO 6,698 9,023 9,902 9,396 AFFO per Unit (diluted) 0.123 0.178 0.198 0.191 Book value per Unit 12.40 12.26 12.14 12.05 GLA 18,850,627 18,850,627 18,313,827 18,089,827 Occupancy 99.1% 99.3% 98.1% 98.2% Same property NOI % 1 3.4% 1.1% 2.9% 3.0% Average remaining lease term (years) 4.5 4.7 3.9 3.8 1. Quarter over Quarter SPNOI 8
Expanding U.S. Footprint 1 1. Includes Infill Logistics Portfolio acquired on April 5, 2019 9
High-Quality Tenant Base % of Total Annualized GLA Occupied (%) of Total Portfolio Tenant Industry Base Rent 1 (‘000s sq. ft.) 1 GLA 1 General Mills Operations, LLC Consumer Products 4.4% 1,512.6 7.2% Continental Tire the Americas Consumer Products 4.0% 740.9 3.5% Unilever Home & Personal Care Consumer Products 4.0% 1,262.6 6.0% Amazon.com E-Commerce 3.7% 936.0 4.4% Keystone Automotive 2 Consumer Products 3.4% 754.7 3.6% Zulily, LLC E-Commerce 3.0% 737.5 3.5% Fullbeauty Brands, Inc. E-Commerce 2.4% 741.1 3.5% Honeywell International Inc. Consumer Products 2.3% 754.0 3.6% Radial, Inc. E-Commerce 2.3% 543.5 2.6% CEVA Logistics U.S. Inc. Third Party Logistics 2.3% 648.8 3.1% Total 31.8% 8,631.7 41.0% 1. As at March 31, 2019 and inclusive of the Infill Logistics Portfolio acquired on April 5, 2019 2. Comprised of two leases with Keystone Automotive Operations, Inc. and Keystone Automotive Industries, Inc.; both wholly-owned subsidiaries of LKQ Corporation. 10
Well-Positioned Balance Sheet 1 2 2.8 years Weighted average mortgage term to maturity 2 3.8% Weighted average effective interest rate 37.1% Total debt to GBV 2.5x Fixed charge coverage ratio 7.5x Debt to adjusted EBITDA $146.3mm Unsecured credit facility availability 1. As at March 31, 2019 2. Excludes the REIT’s unsecured credit facility 11
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