Granite Real Estate Investment Trust · TSX:GRT.UN
Granite Real Estate Investment Trust — Investor Presentation (August 2022)
25 slides from Granite Real Estate Investment Trust's investor presentation, August 2022
Slide 1: Investor Presentation
INVESTOR PRESENTATION | August 2020 INVESTOR PRESENTATION | August 2022
Slide 2: Presentation of Certain Information
PRESENTATION OF CERTAIN INFORMATION • Unless otherwise indicated in this presentation, all information is presented as of June 30, 2022 and all financial information that is identified as current refers to the period ending June 30, 2022. For definitions of certain non-IFRS performance measures and
Slide 3: Granite Highlights
GRANITE HIGHLIGHTS2 ORGANIZATIONAL PRINCIPLES PORTFOLIO OVERVIEW FINANCIAL PERFORMANCE 127 income-producing Long-term total return focused 79% LTM AFFO POR3 properties + 12 development properties/land Conservative and flexible capital 57.5M square feet with 29% net leverage ratio3 structure 97.8% oc
Slide 4: Granite Highlights – ESG+R
GRANITE HIGHLIGHTS – ESG+R ENVIRONMENTAL SOCIAL GOVERNANCE RESILIENCE Promote energy efficiency Hybrid work model and sustainable practices supporting work-life 100% independent Board Program aligned with at our properties balance excluding CEO TCFD(1), SASB(1) and GRI(1) standards and frameworks Re
Slide 5: ESG – GRESB 2021
ESG – GRESB 2021 Granite ranked 1st in the North American Industrial GRESB public disclosure group Granite 3rd and sole Canadian entity in the North American Industrial peer group for Standing Investments August 2022 5
Slide 6: ESG – $1B Green Bonds Use of Net Proceeds
ESG –$1B GREEN BONDS USE OF NET PROCEEDS (AS AT DEC 31, 20211) 2027 Debentures 2028 Debentures Location Eligible Green Certification Date Allocation Location Eligible Green Certification Date Allocation Lancaster, TX, USA LEED Silver Q1-19 $106.1 Fort Worth, TX, USA Two Green Globes2 Q3-222 $20.9 We
Slide 7: Granite's Evolution
GRANITE’S EVOLUTION Investment Property Summary Then - December 31, 2011 Now - June 30, 2022 0.6M SF 13.8M SF Flex/Office2 42.8M SF Multi-Purpose2 $148M Distribution/E-commerce3 14.1M SF $6,038M $802M 5.1M SF Special Purpose Industrial/Warehouse2 $1,089M $1,064M $1.9B $8.6B 8.9M SF Value Special Pur
Slide 8: Portfolio Transformation Strategy
PORTFOLIO TRANSFORMATION STRATEGY Invest opportunistically in evolving Target markets with superior Focus on modern facilities that meet property types and markets economic conditions and market the demands of E-Commerce and fundamentals benefiting from technological traditional distribution users a
Slide 9: Financial Performance
FINANCIAL PERFORMANCE Historical Operating Performance ($M)2 Distributions and Payout Ratios1,2 $422 91% 82% 81% $394 80% 77% 79% 71% $340 73% 75% $322 78% 79% 73% 3.10 $299 78% 3.00 71% 2.90 $274 $265 2.80 $255 2.72 $245 $248 $235 2.60 $223 $216 $204 2.43 $188 $187 $185 $173 $162 $145 $138 2016 201
Slide 10: GRT Historical Performance
GRT HISTORICAL PERFORMANCE Total Return vs TSX Composite & TSX Capped REIT Indices Cumulative Total Return % Annualized Total Return % 445% COVID-19 200% 420% 180% 395% 370% 160% 345% 320% 140% 295% 270% 120% 245% 100% 220% 195% 80% 170% 145% 60% 120% 40% 95% 70% 20% 45% 20% 0% -5% -20% 1Yr 2Yr 3Yr
Slide 11: Globally Diversified Portfolio
GLOBALLY DIVERSIFIED PORTFOLIO1 5 countries – 139 properties – 57.5 million square feet GERMANY 14 properties 4.6M SF CANADA 36 properties 6.5M SF NETHERLANDS 1 16 properties 2 5.4M SF 4 UNITED STATES 64 properties 33.5M SF AUSTRIA 9 properties 7.5M SF Special Purpose Properties Global footprint wit
Slide 12: Portfolio Segmentation by Geography
PORTFOLIO SEGMENTATION BY GEOGRAPHY1 By Income Producing Property Fair Value By Annualized Revenue $843M $35.7M $59.4M 10% 16% 10% 22% $1,816M $583M 7% $29.8M 8% $716M 9% $8.3B $364M $56.1M 16% $4,351M $182.9M 50% 52% By Square Feet By Number of Income-Producing Properties 5.4M 6.5M 12% 16 13% 9% 34
Slide 13: IPP Portfolio Segmentation by Category
IPP PORTFOLIO SEGMENTATION BY CATEGORY1 Distribution/E-commerce Properties Industrial/Warehouse 84 Properties 33 Properties 42.8M SF (∼510K SF/property) 5.1M SF (∼156K SF/property) $6.0B Fair Value (∼$141/SF) $1.1B Fair Value(∼$207/SF) 72% WALT: 3.7 years WALT: 6.2 years $243.7M Annualized Revenue(∼
Slide 14: Development and Expansion Pipeline
DEVELOPMENT AND EXPANSION PIPELINE Whitestown, Indiana (Expansion) Bolingbrook, Illinois ~0.2M SF Nashville area, Tennessee ~1.4M SF ~0.3M SF Brantford, Ontario (Phase I) Houston, Texas (Phase I and Phase II) Indiana ~1.0M SF ~0.4M SF ~1.4M SF Active development program to enhance total return & pla
Slide 15: Lease Expiration Profile
LEASE EXPIRATION PROFILE1 Outstanding Lease Expiries by Annualized Revenue Annualized Overall Revenue $363.9M WALT 5.6 Years Occupancy 97.8% 43.9% 110 Canada USA Austria Germany Netherlands 100 90 Annualized Revenue (C$M) 80 70 60 50 16.6% 14.0% 40 9.1% 30 7.6% 8.4% 20 0.5% 10 0 2022 2023 2024 2025
Slide 16: High Quality & Creditworthy Tenant Base
HIGH QUALITY & CREDITWORTHY TENANT BASE Other Tenants Annualized Credit Top 10 Tenants GLA % WALT Revenue % Rating1,2 Magna 28% 21% 4.0 A- Amazon 5% 4% 16.7 AA True Value Company 2% 2% 18.7 NR Adesa 2% —% 7.1 NR Restoration Hardware 2% 2% 5.8 Ba3 Ceva Logistics US Inc. 2% 2% 2.5 NR Light Mobility So
Slide 17: Balance Sheet Strength
BALANCE SHEET STRENGTH2 Capitalization Debt Maturity Profile Unit Price (08/05/2022) $80.16 $600 3.50% Units Outstanding 65.4 2.96% 3.00% Market Capitalization1 $5,244 $500 2.54% Credit Facility Draws due Mar/26 $214 Weighted average interest rate 2.50% $400 Construction Loan due Dec/23 $33 1.69% 2.
Slide 18: Credit Metrics Summary
CREDIT METRICS SUMMARY • The following table was sourced from DBRS’ North American Real Estate Peer Comparison dated August 26, 2021. DBRS North American Real Estate Peer Comparison1: Peer Group Granite Rank Granite2 Average Among Peer Group Total Debt to Capital 33.0% 49.8% #3 Total Debt to EBITDA
Slide 19: Financial Flexibility & Target Long-Term Leverage Ratio
FINANCIAL FLEXIBILITY & TARGET LONG-TERM LEVERAGE RATIO1 • Strong balance sheet provides pathway for measured growth with potential for further diversification and optimization of the portfolio • Target long term net leverage ratio1 of ∼30 - 35% while maintaining patient and opportunistic approach t
Slide 20: Canadian Real Estate Debt Comparison
CANADIAN REAL ESTATE DEBT COMPARISON1 Total Debt-to-Capital Total Debt-to-EBITDA 90% 19.0x 80% 17.0x 70% 15.0x 13.0x 60% 11.0x 50% 9.0x 40% 7.0x 30% 5.0x 20% 3.0x 10% 1.0x Granite has leading debt metrics within DBRS1 universe of Canadian Real Estate entities 1 Source: DBRS North American Real Estat
Slide 21: Canadian Real Estate Debt Comparison
CANADIAN REAL ESTATE DEBT COMPARISON1 EBITDA Interest Coverage Distributions/Cash Flow from Operations2 8.0x 1.40 7.0x 1.20 6.0x 1.00 5.0x 0.80 4.0x 0.60 3.0x 0.40 2.0x 1.0x 0.20 0.0x 0.00 Granite has leading cash flow coverage metrics among DBRS1 universe of Canadian Real Estate entities 1 Source:
Slide 22: Leadership Team
LEADERSHIP TEAM Kevan Gorrie Teresa Neto Lorne Kumer Michael Ramparas President and Chief Executive Officer Chief Financial Officer Executive Vice President, Executive Vice President, Head of Global Real Estate Global Real Estate and Head of Investments Witsard Schaper Lawrence Clarfield Jon Sorg Se
Slide 23: Appendix
APPENDIX The following non-IFRS performance measures and non-IFRS ratios are important measures used by management in evaluating the Trust’s underlying operating performance and debt management. These non-IFRS performance measures and non-IFRS ratios are not defined by IFRS and do not have standar
Slide 24: B) Non-IFRS Ratios
Same property net operating income - cash basis Same property NOI - cash basis refers to the NOI - cash basis for those properties owned by Granite throughout the entire current and prior year periods under comparison. Same property NOI - cash basis excludes properties that were acquired, disposed o
Slide 25: C) Subsequent Events
Interest coverage ratio The interest coverage ratio is calculated on a 12-month trailing basis using Adjusted EBITDA (a non-IFRS performance measure) divided by net interest expense. Granite believes the interest coverage ratio is useful in evaluating the Trust’s ability to meet its interest expense
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