First Capital Real Estate Investment Trust · TSX:FCR.UN
First Capital Real Estate Investment Trust — Q2 2022 Earnings Presentation
72 slides from First Capital Real Estate Investment Trust's earnings presentation, Jul 28, 2022
Slide 1: Q2 2022 Investor Presentation
Q2 2022 Investor Presentation
Slide 2: Forward-Looking Statements and Non-IFRS Financial Measures
FORWARD-LOOKING STATEMENTS AND NON-IFRS FINANCIAL MEASURES This material may contain forward-looking statements, including those identified by the expressions “anticipate”, “believe”, “plan”, “estimate”, “expect”, “intend” and similar expressions to the extent they relate to First Capital REIT (“Fir
Slide 3: Table of Contents
TABLE OF CONTENTS 1.0 1.0 Company Snapshot ....……………………………………………………………………………........................ XX 4 2.0 Highlights - Recent Financial and Operating Results ..….….….….….….……….………….......... 2.0 5–7 3.0 Thriving Neighbourhoods …………………….………………………………………………………………...... 3.0 XX8 -–XX 19 4.0 4.0 Densi
Slide 4: Company Snapshot
1.0 COMPANY SNAPSHOT (TSX: FCR.UN) First Capital owns, operates and develops grocery anchored open-air centres in neighbourhoods with the strongest demographics in Canada. 147 Major market 22.3m sf neighbourhoods of gross leasable area focus (19.5m sf at FCR share) $7.6b enterprise value 23.6m sf of
Slide 5: Highlights - Recent Financial and Operating Results
2.0 Highlights - Recent Financial and Operating Results
Slide 6: Highlights – Q2 2022
2.0 HIGHLIGHTS – Q2 2022 Q2 FFO per unit, excluding OGLE(1) amounts, was $0.29, +10% YoY Q2 2022 SP NOI growth of 6.0% • Primarily due to higher base rent and variable revenue contributions as well as a $2.2m decrease in bad debt expense NAVPU of $24.46 • Growth of 4.7% year over year ($23.36) Leasi
Slide 7: Highlights – Q2 2022 Balance Sheet, Liquidity and Asset Quality
2.0 HIGHLIGHTS – Q2 2022 BALANCE SHEET, LIQUIDITY AND ASSET QUALITY Maintaining a Strong Balance Sheet and Liquidity Position • $818m of cash and undrawn credit facilities, as at June 30, 2022 • Unencumbered properties with an IFRS value of ~$7.1b (70% of total assets) • Q2 2022 AFFO payout ratio (e
Slide 8: Thriving Neighbourhoods
3.0 Thriving Neighbourhoods First Capital 8
Slide 9: Neighbourhood Investment Strategy
3.0 NEIGHBOURHOOD INVESTMENT STRATEGY • Investing in high-quality, grocery anchored and mixed-use properties to build positions in targeted high growth, top tier neighbourhoods • Fully integrating retail with other uses to create thriving neighbourhoods • Optimizing the portfolio through active asse
Slide 10: Thriving Neighbourhoods
3.0 THRIVING NEIGHBOURHOODS Proximity to transit, “Walk Score”, and most importantly population density are key criteria by which we evaluate the potential of our neighbourhoods. We have significantly improved these metrics over time through our investment and disposition activity and we intend to m
Slide 11: Thriving Neighbourhoods – Fair Values Across Canada's Major Cities
3.0 THRIVING NEIGHBOURHOODS – FAIR VALUES ACROSS CANADA’S MAJOR CITIES Vancouver, Calgary, Western Canada Central Canada Toronto Eastern Canada Montreal, Ottawa Edmonton Neighbourhoods 40 Neighbourhoods 66 Neighbourhoods 41 GLA 6.2m GLA 8.5m GLA 4.8m Fair Value % 30% Fair Value % 54% Fair Value % 16
Slide 12: North American Leader in Population Density
3.0 THRIVING NEIGHBOURHOODS - NORTH AMERICAN LEADER IN POPULATION DENSITY FCR Portfolio Demographic Metrics versus Peer Group: Q2 2022 (1) $129,000 300,000 US $122,500 $115,000 149,000 140,000 US Peers (2) CDN Peers (3) US Peers ** Q2 2022 US Peers (2) CDN Peers (3) Q2 2022 5 km Population 5 km Aver
Slide 13: Growth in 5km Population Density
3.0 THRIVING NEIGHBOURHOODS - GROWTH IN 5KM POPULATION DENSITY • Q2 2022 5km population of 300,000 people 300,000 +20% 304,000 • Up 93,000 or 45% from December 2016 300,000 290,000 • Making FCR a leader amongst our North American peer group (1) 250,000 +20% Achieved long-term goal of 300k people by
Slide 14: Strong Historical Growth in NAV per Unit
3.0 STRONG HISTORICAL GROWTH IN NAV PER UNIT +4.6% CAGR 2016 – Q2 2022 $25.00 $24.46 $24.00 $24.26 $23.00 $23.39 $22.59 $22.00 $22.34 $21.85 $21.00 $20.00 $19.53 $19.00 $18.00 $18.25 $17.00 2015 2016 2017 2018 2019 2020 2021 Q2 2022 $16.00 First Capital 14
Slide 15: Solid Long Term Performance; Resiliency in the Face of Adversity
3.0 SOLID LONG TERM PERFORMANCE; RESILIENCY IN THE FACE OF SIGNIFICANT ADVERSITY Same Property NOI Growth 8.0% 2.9% 10-year 6.0% 4.0% 5.7% 4.0% pre-pandemic average (2010-2019) 2.0% 2.6%(2) 0.0% 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 YTD 2.3% 12-year average, -2.0% -2.6%(1) 2022
Slide 16: Consistently High Performance in Renewal Leasing Spreads
3.0 CONSISTENTLY HIGH PERFORMANCE IN RENEWAL LEASING SPREADS Lease Renewal Rate Increases (1) 12.0% 9.2% 10-year 10.0% 8.9%(2) pre-pandemic average (2010-2019) 8.0% 6.0% 9.2% 12-year average, 4.0% including pandemic years 2.0% (2010-2021) 0.0% 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2
Slide 17: Strategic and Diversified Retail Tenant Mix
3.0 STRATEGIC AND DIVERSIFIED RETAIL TENANT MIX # of Stores % of Rent Other Necessity-Based 464 17.8 Retailers Grocery Stores 125 17.3 Medical, Professional & 1,312 15.7 Personal Services QSR, Chains and Cafes 914 13.4 Pharmacies 120 9.3 Other Tenants 460 8.1 Banks & Credit Unions 185 8.1 Fitness Fa
Slide 18: Top Retail Tenants
3.0 TOP 20 RETAIL TENANTS Contribute 45% of annualized minimum rent (AMR) Investment Investment Rank # Tenant AMR Grade Rank # Tenant AMR Grade 1. 10.4% 11. 1.4% 2. 5.5% 12. 1.4% 3. 3.2% 13. 1.3% 4. 2.6% 14. 1.3% 5. 2.3% 15. 1.3% 6. 2.0% 16. 1.1% - 7. 1.9% 17. 1.1% - - 8. 1.8% - 18. 1.1% 9. 1.7% 19.
Slide 19: Portfolio Quality Has Never Been Better
3.0 PORTFOLIO QUALITY HAS NEVER BEEN BETTER $2.5b of investment activity in 2019 to YTD 2022 FCR’s portfolio demonstrated resilience through more than 12-months of mandated business closures and/or significant operating restrictions, and it continues to do so, with the recent 2021 and YTD 2022 resul
Slide 20: Density Pipeline and Development
4.0 Density Pipeline and Development
Slide 21: Significant Future Density Pipeline
4.0 SIGNIFICANT FUTURE DENSITY PIPELINE Total development inventory of 23.6m sf Included IFRS values are: Future incremental 7.3m sf; value of $530m density 1071 King St West Toronto, ON Yonge & Roselawn Toronto, ON Properties under 221k sf; value of $66m construction Residential 364k sf; value of $
Slide 22: Future Incremental Density - Entitlements Program
4.0 FUTURE INCREMENTAL DENSITY - ENTITLEMENTS PROGRAM • FCR submitted entitlement applications for 15.3m sf or 65% of its incremental density pipeline • FCR expects to recognize increased IFRS values as previously submitted and future submissions are approved • 8.2m sq ft zoned to date; expecting a
Slide 23: Active Development
4.1 Active Development @e First OW CAPITAL
Slide 24: Active Developments - Developing in Thriving Neighbourhoods
4.1 ACTIVE DEVELOPMENTS - DEVELOPING IN THRIVING NEIGHBOURHOODS Active Developments = 585k sf Centre Commercial Wilderton (GLA 625k sf) Montreal, QC 200 West Esplanade (GLA 58k sf) North Vancouver, BC Cedarbrae Mall (GLA 476k sf) Toronto, ON First Capital 24
Slide 25: Active Developments - Developing in Thriving Neighbourhoods
4.1 ACTIVE DEVELOPMENTS - DEVELOPING IN THRIVING NEIGHBOURHOODS Edenbridge Kingsway (GLA 252k sf) Toronto, ON 400 King Street West (GLA 469k sf) Toronto, ON 138 Yorkville (GLA 317k sf) Toronto, ON First Capital 25
Slide 26: Centre Commercial Wilderton
Active Development Future Centre Commercial Wilderton Montreal, QC Demographics 5KM 2021 Estimates Population 638,000 Average Household Income $102,000 Property Statistics Site Area 5 acres Pre-redevelopment GLA 112,000 sf Post Redevelopment GLA Retail GLA (FCR Interest 100%) 125,000 sf Residential
Slide 27: 200 West Esplanade
Future Active Development 200 West Esplanade North Vancouver, BC Demographics 5KM 2021 Estimates Population 264,000 Average Household Income $116,000 Gross Leasable Area (at 100%) Residential GLA (75 Rental Units) 48,000 sf Retail GLA 10,000 sf Total GLA 58,000 sf FCR Interest 50% 50% Partner Target
Slide 28: Cedarbrae Mall
Current Active Development Cedarbrae Mall Toronto, ON Demographics 5KM 2021 Estimates Population 296,000 Average Household Income $89,000 Gross Leasable Area (at 100%) Square Feet Under Active Development 137,000 sf Retail GLA 476,000 sf Target Completion Date H1 2024 First Capital 28
Slide 29: Edenbridge Kingsway
Current Active Development Edenbridge Kingsway Humbertown, Toronto, ON Demographics 5KM 2021 Estimates Population 347,000 Average Household Income $136,000 Phase 1 Site Area 1.8 acres (Phase 1) Gross Leasable Area (at 100%) Future Retail GLA 8,000 sf Residential GLA 244,000 sf Total GLA 252,000 sf 1
Slide 30: 400 King Street West
Future Active Development 400 King Street West Toronto, ON Demographics 5KM 2021 Estimates Population 582,000 Average Household Income $139,000 Gross Leasable Area (at 100%) Residential GLA 432,000 sf Non-Residential GLA 37,000 sf Total GLA 469,000 sf FCR Interest 35% 50% Partner Target Completion D
Slide 31: 138 Yorkville Avenue
Active Development Future 138 Yorkville Avenue Toronto, ON Demographics 5KM 2021 Estimates Population 775,000 Average Household Income $147,000 Gross Leasable Area (at 100%) Residential GLA 276,000 sf Retail GLA 41,000 sf Total GLA 317,000 sf FCR Interest (1) 33%/100% Co-development Partner 33% Pass
Slide 32: Station Place
Recent Development Completion Station Place Toronto, ON Demographics 5KM 2021 Estimates Population 272,000 Average Household Income $147,000 Gross Leasable Area (at 100%) Retail GLA 43,000 sf Residential GLA (333 Rental Units) 267,000 sf Total GLA 310,000 sf FCR Interest 35% 50% Partner Key Tenants
Slide 33: Station Place
Recently Development Completion Station Place Farm Boy opens amidst construction completion September 2021 Opening First Capital 33
Slide 34: Near, Medium & Long Term Developments
4.2 Near, Medium & Long Term Developments
Slide 35: Near, Medium & Long Term Developments
4.2 NEAR, MEDIUM & LONG TERM DEVELOPMENTS 1071 King - Liberty Village (GFA 196k sf) Toronto, ON Yonge & Roselawn (GFA 513k sf) Toronto, ON 2150 Lake Shore Blvd W (GFA 7.5m sf) Toronto, ON First Capital 35
Slide 36: 1071 King Street West
Future Near Term Development 1071 King Street West Toronto, ON Demographics 5KM 2021 Estimates Update Picture Population 579,000 Average Household Income $127,000 Gross Floor Area (at 100%) Residential GFA (227 Rental Units) 191,000 sf Retail GFA 5,000 sf Total GFA 196,000 sf FCR Interest 67% 33% Pa
Slide 37: Yonge & Roselawn
Future Medium & Long Term Development Yonge & Roselawn Toronto, ON Demographics 5KM 2021 Estimates Population 485,000 Average Household Income $209,000 Current Retail GLA 42,000 sf Future Residential GFA (~539 Rental Units) 443,000 sf Future Retail GFA 70,000 sf Total Future GFA 513,000 sf FCR Inter
Slide 38: 2150 Lake Shore Blvd W
Future Medium & Long Term Development 2150 Lake Shore Blvd W Former Christie Cookie Site, Toronto, ON Demographics 5KM 2021 Estimates Population 263,000 Average Household Income $127,000 Gross Floor Area (at 100%) Residential GFA ( ~7,500 Units) 6,300,000 sf Non-Residential GFA 1,200,000 sf Total GF
Slide 39: Environmental, Social and Governance (ESG)
5.0 Environmental, Social and Governance (ESG) 39
Slide 40: ESG Initiatives
5.0 ESG INITIATIVES High 2021 ESG scores (1) Environmental: 2 Social: 2 Governance: 2 2022 Green Lease Leader (2021) by Institute for Markey Transformation AA ESG Rating (2021) 2021 1st in our Peer group GRESB Development Benchmark Standing Investments Benchmark Score 87 (2021), up from 69 (2020) Ac
Slide 41: ESG Initiatives
5.0 ESG INITIATIVES Winner in the Canada’s Canada’s Top Small & Greenest Employers First Canadian REIT to be a Medium Employers Competition signatory in support of the Task Force on Climate- Related Financial Disclosure Recognized as one of Honouree in the Greater Toronto’s Globe & Mail’s Top 100 Em
Slide 42: ESG Initiatives
5.0 ESG INITIATIVES 170 Properties certified Received 2 “The Outstanding Building of 17.8m sf (2021) the Year” Award and Certificate of Excellence at 3 of our properties. 7.1m sf 125 LEED-certified projects Achieved WELL Health- Safety Rating (35 properties) > 4.1m sf (2021) First Capital 42
Slide 43: ESG Roadmap (2020-2024)
5.0 ESG ROADMAP (2020-2024) Environment Social Governance • Set 2030 science-based • Launch the FCR Thriving • Align disclosures with the GHG reduction target, with Neighbourhoods Task Force on Climate- goal of net-zero emissions Foundation, with focus on 4 related Financial Disclosures by 2050, or
Slide 44: ESG Initiatives
5.0 ESG INITIATIVES • 10% decrease in Greenhouse Gas (GHG) emissions (2016 – 2020) GHG Emissions • 10% decrease in 2020 energy consumption, relative to 25,000 2019 24,500 • Completed our 5-year national commitment to convert all our exterior and parking lot lighting to energy- 24,000 efficient LED (
Slide 45: Enhancing Thriving Neighbourhoods Through Public Art
5.0 ENHANCING THRIVING NEIGHBOURHOODS THROUGH PUBLIC ART 30 Public Art Installations commissioned across our portfolio Supporting Public Art partnerships with First Capital 45
Slide 46: Strong Gender Diversity Metrics Across the Organization
5.0 STRONG GENDER DIVERSITY METRICS ACROSS THE ORGANIZATION EXECUTIVE BOARD MEMBERS MEMBERS 43% Women 57% Men 33% Women 67% Men Honouree in the Globe and Mail’s “2021 Women Lead Here” list MANAGEMENT TOTAL ROLES EMPLOYEES (2nd consecutive year) Over 50% of management positions are held by females 56
Slide 47: FCR Equity, Diversity & Inclusion (ED&I)
5.0 FCR EQUITY, DIVERSITY & INCLUSION (ED&I) First Capital is committed to sustaining an equitable, diverse, and inclusive culture of belonging, where all employees have an equal opportunity to thrive, love what they do and grow their careers. First Capital continues to evolve and build an action fr
Slide 48: FCR Thriving Neighbourhoods Foundation
5.0 FCR THRIVING NEIGHBOURHOODS FOUNDATION • The FCR Thriving Neighbourhoods Foundation is an employee-led organization that supports registered charities and philanthropic initiatives that support the neighbourhoods in which we operate. • Since its inception in 2020, we’ve been focused on food inse
Slide 49: FCR Thriving Neighbourhood Foundation
5.0 FCR THRIVING NEIGHBOURHOOD FOUNDATION 2021 Achievements • In the Fall of 2021, the Foundation partnered with Canada’s largest food rescue organization, Second Harvest, in an effort help to combat food insecurity. • Thanks to the generous donations from our staff and corporate partners, we raised
Slide 50: Financial Strength and Flexibility
6.0 Super Financial Strength Urban and Flexibility Neighbourhoods
Slide 51: Capital Structure
6.0 CAPITAL STRUCTURE (1) Enterprise Value $7.6b $b WAIR (2) Mortgages 1.3 3.6% 18% Secured Facilities 0.1 2.7% Total Secured 1.4 3.6% Unsecured Debentures 2.2 4.0% Unsecured Term Loans 0.7 3.0% 39% Unsecured Revolving Facilities 0.2 2.3% ($800m total capacity) Total Unsecured 3.1 3.7% Total Debt 4.
Slide 52: Financial Strength and Flexibility
6.0 FINANCIAL STRENGTH AND FLEXIBILITY Q2 As at 2021 2020 2019 2018 2017 2022 Unsecured revolving credit $800 $800 $800 $800 $800 $800 facilities (million) 70% Unencumbered assets (billion) $7.1 $7.4 $7.0 $7.0 $7.3 $7.4 of Q2 2022 assets Unencumbered assets to 2.3x 2.3x 2.1x 2.2x 2.5x 2.4x unsecured
Slide 53: Well-Staggered Term Debt Maturities
6.0 WELL-STAGGERED TERM DEBT MATURITIES ($M) $900 5.5% Weighted Average Interest Rate 3.8% Unsecured Term Loans Millions Mortgages 4.9% 5.0% Term to Maturity 3.9 years $800 Senior Unsecured Debentures 4.5% 95% of Term Debt is Fixed Rate Weighted Average Effective Interest % $700 4.2% 4.1% 4.0% 4.0%
Slide 54: OFFO Payout Ratio: Creating Meaningful Flexibility
6.0 OFFO PAYOUT RATIO: CREATING MEANINGFUL FLEXIBILITY TO ADVANCE OUR STRATEGIC OBJECTIVES Enhancing Financial Strength and Flexibility through Temporary Distribution Cut $350 90% 84% 82% $302 $300 $287 78% $284 80% 74% $250 $236 71% $237 $261 69% $225 70% $200 60% $150 $126 50% $100 40% $50 38% 40%
Slide 55: Appendix - Profiling Select Neighbourhoods
Appendix Profiling Select Neighbourhoods 55
Slide 56: Bloor-Yorkville
Select Neighbourhood Bloor-Yorkville Toronto, ON Demographics 5KM 2021 Estimates Population 744,000 Average Household Income $148,000 Gross Leasable Area Yorkville Village 315,000 sf One Bloor East 85,000 sf Hazelton Hotel 49,000 sf Total Bloor/Yorkville 449,000 sf Future Density 115,000 sf Key Tena
Slide 57: Select Neighbourhood - Bloor-Yorkville
SELECT NEIGHBOURHOOD - BLOOR-YORKVILLE Bloor-Yorkville A 138 Yorkville Avenue B Yorkville Village Mall C Hazelton Hotel First Capital 57
Slide 58: Yorkville Village Achieves #1 Destination Status for New Retail
YORKVILLE VILLAGE ACHIEVES #1 DESTINATION STATUS FOR NEW RETAIL International retailers continue to enter the Canadian market in 2021 and 2022, and many chose Yorkville Village for their first location, including: Contemporary women’s Lab-grown, sustainable diamonds High performance fashion brand an
Slide 59: Yorkville Village
Hazelton Hotel & ONE Restaurant Yorkville Village Hazelton Hotel achieves 5 star rating in Forbes Travel Guide April 2022 First Capital 59
Slide 60: Yorkville Village New Tenant Opening
New Tenant Opening Yorkville Village The Webster successfully opens in Canada’s top real estate November 2021 Opening First Capital 60
Slide 61: Liberty Village
Select Neighbourhood Liberty Village Toronto, ON Property Statistics 5KM 2021 Estimates Population 568,000 Average Household Income $126,000 Gross Leasable Area Retail GLA 395,000 sf Residential GLA 328,000 sf Office GLA 109,000 sf Total GLA 832,000 sf Acreage 14.1 Future Density 755,000 sf Key Tena
Slide 62: King High Line
Select Neighbourhood King High Line Liberty Village, Toronto, ON Gross Leasable Area (at 100%) Retail GLA 154,000 sf Residential GLA (506 Residential Units) 322,000 sf Total GLA 476,000 s Property Statistics Acreage 2.8 100% Commercial FCR Interest 50% Residential Key Tenants First Capital 62
Slide 63: Griffintown
Select Neighbourhood Griffintown Montreal, QC Demographics 5KM 2021 Estimates Population 424,000 Average Household Income $108,000 Retail GLA 255,000 sf Acreage 3.2 Key Tenants First Capital 63
Slide 64: Mount Royal Village
Select Neighbourhood Mount Royal Village Calgary, AB Demographics 5KM 2021 Estimates Population 232,000 Average Household Income $149,000 Gross Leasable Area 375,000 sf Acreage 4.1 Key Tenants First Capital 64
Slide 65: The Brewery District
Select Neighbourhood The Brewery District Edmonton, AB Demographics 5KM 2021 Estimates Population 211,000 Average Household Income $96,000 Gross Leasable Area (at 100%) Retail GLA 261,000 sf Office GLA 37,000 sf Total GLA 298,000 sf FCR Interest 50% Key Tenants First Capital 65
Slide 66: False Creek Village
Select Neighbourhood False Creek Village Vancouver, BC Demographics 5KM 2021 Estimates Population 438,000 Average Household Income $115,000 Retail GLA 63,000 sf Key Tenants First Capital 66
Slide 67: Olde Oakville Market Place
Select Neighbourhood Olde Oakville Market Place Oakville, ON Demographics 5KM 2021 Estimates Population 122,000 Average Household Income $212,000 Gross Leasable Area Retail GLA 125,000 sf Key Tenants First Capital 67
Slide 68: Leaside Village
Select Neighbourhood Leaside Village Toronto, ON Demographics 5KM 2021 Estimates Population 495,000 Average Household Income $187,000 Gross Leasable Area Retail GLA 119,000 sf Key Tenants First Capital 68
Slide 69: Appleby Village
Select Neighbourhood Appleby Village Burlington, ON Demographics 5KM 2021 Estimates Population 98,000 Average Household Income $146,000 Gross Leasable Area Retail GLA 210,000 sf Key Tenants First Capital 69
Slide 70: Pemberton Plaza
Select Neighbourhood Pemberton Plaza North Vancouver, BC Demographics 5KM 2021 Estimates Population 203,000 Average Household Income $125,000 Gross Leasable Area Retail GLA 77,000 sf Key Tenants First Capital 70
Slide 71: Cranston Market
Select Neighbourhood Cranston Market Calgary, AB Demographics 5KM 2021 Estimates Population 123,000 Average Household Income $157,000 Gross Leasable Area Retail GLA 84,000 sf Key Tenants First Capital 71
Slide 72: Contact
Adam Paul President & CEO Neil Downey Executive VP, Enterprise Strategies & CFO First Capital Shops at King Liberty 85 Hanna Ave, Suite 400 Toronto, ON Tel: 416-504-4114 fcr.ca TSX: FCR.UN
First Capital Real Estate Investment Trust — Q2 2022 Earnings Presentation on 6ix