Choice Properties Real Estate Investment Trust · TSX:CHP.UN
Choice Properties Real Estate Investment Trust — Q1 2023 Earnings Presentation
71 slides from Choice Properties Real Estate Investment Trust's earnings presentation, Apr 25, 2023
Slide 1: Delivering Today. Building for the Future.
Delivering Today. Building for the Future. Q1 2023 Investor Presentation 1
Slide 2: Forward Looking Statement
Forward Looking Statement Certain statements contained in this document constitute forward-looking information within the meaning of securities laws. Forward-looking information may relate to Choice Properties REIT’s (the “Trust”) future outlook and anticipated events or results and may include stat
Slide 3: Q1 2023 Financial Performance
3 Q1 2023 Financial Performance Q1 2023 Q4 2022 Q1 2022 FFO $0.244/unit $0.241/unit $0.242/unit +1.2% +0.8% AFFO $0.227/unit $0.175/unit $0.222/unit +29.7% +2.3% Occupancy 97.7% 97.8% 97.0% (0.1%) +0.7% Same-Asset NOI, Cash $234.9M $231.0M $224.4M Basis +1.7% +4.6% Adjusted Debt-to-EBITDA 7.5x 7.5x
Slide 4: Contents
Contents 4 • Creating Enduring Value Canada’s Preeminent REIT • Proven Strategic Framework • Our Near-Term Focus • Three Strategic Asset Classes • A Snapshot of Choice • Stable and Consistent Occupancy Market Leading Portfolio • Long-Term Leases • Winning Retail Portfolio • High-Demand Industrial •
Slide 5: Canada's Preeminent REIT
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Slide 6: Canada's Preeminent REIT
Canada’s Preeminent REIT We lead where it matters most Largest in Canada Unmatched Strategic Relationship with Necessity-Based Portfolio Canada’s Leading Retailer 703 high-quality properties 82% Necessity-based retail portfolio (1) 57% Loblaw tenancy (1) 3 strategic asset classes 37M sq. ft. Grocery
Slide 7: Creating Enduring Value
Creating Enduring Value Choice Properties is a leading Real Estate Investment Trust that creates enduring value through the ownership, operation and development of high-quality commercial and residential properties. We believe that value comes from creating spaces that improve how our tenants and co
Slide 8: Proven Strategic Framework
Proven Strategic Framework Creating Preservation Stable and growing Increases in NAV and GOALS Enduring Value: of capital cash flows distribution over time Maintaining Care 1 market-leading portfolio Ownership PRIORITIES VALUES Sustaining 2 operational excellence Respect CORE Delivering 3 developmen
Slide 9: Our Near-Term Focus
Our Near-Term Focus Maintaining Sustaining Delivering Priorities 1 market-leading 2 operational 3 development portfolio excellence pipeline Executing on our near-term Maximizing value in our Industrial opportunity Building for core asset classes Delivering best-in-class property Creating value by th
Slide 10: Market Leading Portfolio
100 1 Market Leading Portfolio
Slide 11: Three Strategic Asset Classes
Three Strategic Asset Classes Strategically positioned across three asset classes Portfolio Mix by Asset Class (1) 80% 15% 5% Retail Retail Industrial Mixed-use & Residential Necessity-based Flexible well- Transit oriented Industrial grocery anchored located industrial mixed-use and Mixed-Use retail
Slide 12: A Snapshot of Choice
(1) A Snapshot of Choice 6% 703 Income Producing Properties 18% 2% 2% 41% 15% Number of Square Footage Properties (M) Value(2) Retail 576 44.5 $10.9B 14% Industrial 116 17.4 3.5B Mixed-Use, 11 2.2 0.9B Residential & Other Properties Under -- -- 1.1B Development Total 703 64.2 $16.4B (1) Calculated a
Slide 13: Stable and Consistent Occupancy
Stable and Consistent Occupancy Occupancy Occupancy by Year Retail 97.9% 100% 98.9% 98.9% 98.6% 98.1% 97.8% 97.7% 97.7% 97.7% 97.1% 97.1% Industrial 98.3% Mixed-Use & 75% 87.9% Residential(1) Total 97.7% 50% 25% 0% 2014 2015 2016 2017 2018 2019 2020 2021 2022 Q1 2023 (1) Segment includes remaining o
Slide 14: Long-Term Leases
Long-Term Leases Lease profile provides cash flow stability Lease Expiry by Year 40 80% Loblaw 35 70% Other 30 60% 52% % of total portfolio % of Portfolio Sq. ft. in millions 25 50% 20 40% 15 30% Total Loblaw Ancillary 10 20% 11% 12% 10% 5.7 years 6.2 years 5.0 years 5 4% 9% 10% 0 0% 2023 2024 2025
Slide 15: Winning Retail Portfolio
Winning Retail Portfolio Necessity-based, well-located assets supported by strong anchor tenants 15
Slide 16: Winning Retail Portfolio
Winning Retail Portfolio Necessity-based, well-located assets supported by strong anchor tenants 44.5M 576 sq. ft. of GLA Properties $10.9B 97.9% Fair value Occupancy 16
Slide 17: Strong Necessity-Based Retail Anchor Tenants
Strong Necessity-Based Retail Anchor Tenants Reliable and stable cash flow +64% of revenue from Loblaw banners +67% of revenue is from grocery and pharmacy +82% of revenue from necessity-based retail Calculated as a % of the retail segment’s gross rental revenue as at March 31, 2023 Q1 2023 • Winnin
Slide 18: Winning Retail Footprint
(1) Winning Retail Footprint 10% 87% of properties located at key 17% 2% intersections 3% 44% 14% Square Footage Necessity- (M) NOI(1) based(2) 10% Neighbourhood Centres 39.2 77% 89% Power Centres 5.3 23% 35% Total 44.5 100% 82% (1) Calculated as a % of cash NOI for the three months ended March 31,
Slide 19: Strong Tenant Retention
Strong Tenant Retention Reliable and stable cash flow Lease Expiry by Year Loblaw Other % of Portfolio 97.9% 25 60% in-place 51% 50% 20 occupancy % of total portfolio 40% Sq. ft. in millions 15 30% 10 • Staggered renewals 11% 14% 20% 10% 5 9% • High-probability of renewal 10% 3% • Strong-covenant te
Slide 20: High-Demand Industrial
High-Demand Industrial High-quality generic industrial assets in key distribution markets 20
Slide 21: High-Demand Industrial
21 High-Demand Industrial High-quality generic industrial assets in key distribution markets 17.5M 116 sq. ft. of GLA Properties $3.5B 98.3% Fair value Occupancy 21
Slide 22: High-Demand Industrial
(1) High-Demand Industrial 83% of industrial BC NL assets are AB 9% generic and high quality SK MB QC 9% 27% ON NB PE NS Square Footage % of Total 8% (M) 8% Distribution 14.6 83% 32% Ottawa Warehouse(2) 2.9 17% 2% Total GLA 17.5 Kitchener/Cambridge/Waterloo (1) Calculated as a % of total GLA for th
Slide 23: Resilient Industrial Tenant Base
Resilient Industrial Tenant Base Top 10 Tenants ~28% 1 Loblaws Loblaw gross revenue 2 Amazon 3 Canada Cartage 4 Wonderbrands 5 Uline Canada Corporation 6 Canadian Tire 7 Kimberly-Clark 8 Alberta Gaming, Liquor and Cannabis 9 NFI IPD 10 ECCO Heating Products Calculated as a % of gross rental revenue
Slide 24: Significant Embedded Growth
Significant Embedded Growth Major Market Breakdown $8.49 Market Avg. Rent (1) Choice Avg. Rent (2) Choice avg. in-place rent Vancouver $21.33 $11.69 Calgary $10.81 $7.89 $15.99 Greater Toronto Area $17.77 $8.22 Market avg. rent (1) Greater Montreal $16.65 $9.31 Area (1) - Source CBRE Research, Indus
Slide 25: Mixed-Use & Residential
Mixed-Use & Residential Purpose built rental in key markets 25
Slide 26: Mixed-Use & Residential
Mixed-Use & Residential Purpose built rental in key markets 2.2M 11 sq. ft. of GLA Properties $0.9B 87.9% Fair value Occupancy 26
Slide 27: Mixed-Use & Residential Properties
Mixed-Use & Residential Properties West Block The Weston Centre The Brixton Liberty House Mixed-Use Mixed-Use Residential Residential Toronto, ON Toronto, ON Toronto, ON Toronto, ON GLA (sq. ft.) 259K GLA (sq. ft.) 329K Units 397 units Units 440 units Ownership 100% Ownership 100% Ownership 50% Owne
Slide 28: Transformational Development
2828 29 Transformational Development Q12023·InvestorPresentation
Slide 29: Developing with Purpose
Developing with Purpose Diversifying our tenant base while delivering steady growth Retail Intensifications Near-Term Industrial Mixed-Use & Residential Delivering steady growth and Capitalizing on market trends Transforming communities maintaining portfolio quality with 7.0M sq. ft of high-quality
Slide 30: Maximizing Development Opportunities
Maximizing Development Opportunities Our competitive advantages Land Cost Redevelopment Key Locations Competitive land cost base Developing on existing Developments located across development sites income producing retail in key markets sites Transit Oriented Loblaw Advantage Integrating ESG Focused
Slide 31: Development Pipeline
Development Pipeline 18.2M sq. ft. Total Planning Other Planning Active Active Zoned and Ready Zoned In Stages Planning Total (1) sq. ft. 2.0M sq. ft. 9.4M sq. ft. 6.8M sq. ft. 18.2M Retail 0.2M Retail 0.2M Retail n/a Retail 0.4M Industrial 1.6M Industrial 5.6M Industrial n/a Industrial 7.2M Mixed-U
Slide 32: Prudent Financial Management
3232 33 Prudent Financial Management Q12023·InvestorPresentation
Slide 33: Measuring Financial Success
Measuring Financial Success Proven Stability. Positioned for Growth. PRIORITIES Stable and growing cash flows FINANCIAL GOALS from existing portfolio • Maximizing value in our core asset classes Preservation 1 Maintaining market-leading • • Improving quality through balanced capital recycling Delive
Slide 34: Significant Financial Capacity
Significant Financial Capacity 1.3x BBB (High) below peer average(3) DBRS credit rating $12.5B unencumbered assets(1) 8.9 7.5 7.5 7.3 7.4 7.1 $1.4B unused portion of 2018 2019 2020 2021 2022 Q1 2023 revolving credit facility(1) (2) Adjusted Debt to EBITDAFV (1) As at March 31, 2023 (2) Represents a
Slide 35: Capital Structure Targets
Capital Structure Targets Maintaining financial stability Mortgages and Q1 2023 9% Secured Facilities(3) $1.6B Target Range Unsecured $5.5B Unused portion of Debentures 1.4B > 1.0B revolving credit facility 32% Unsecured Credit Facility $0.1B Adjusted debt to ($I.5B total capacity) 7.5x ~7.5x EBITDA
Slide 36: Debt Maturity Profile
(1) Debt Maturity Profile 3.97% 6.0 Well-balanced debt ladder Years WAIR(2) WATM(2) $1,600 26% $1,400 21% $1,200 14% 16% Debt Maturing ($M) $1,000 11% 11% $800 10% 10% 11% 9% 8% 6% $600 6% $750 6% 6% $550 $500 $750 $750 3% $400 $500 $200 $400 3% $350 $550 1% $200 $200 $252 $85 $244 $207 $149 $115 $1
Slide 37: Environment, Social & Governance Program
Environment, 37 37 Social & Governance Program Q12023·InvestorPresentation
Slide 38: Building Healthy, Resilient Communities
Building Healthy, Resilient Communities ESG program is focused Commitment to ESG practices is around two pillars which integral to our purpose of align with stakeholder creating enduring value. interests: Aspire to develop healthy, Fighting resilient communities through our Climate Change dedication
Slide 39: Fighting Climate Change
Fighting Climate Change Committed to doing our part to preserve our planet’s resources for current and future generations. Net-Zero Climate Action One of the first entities to Published inaugural Pathway have its net zero emissions to Net Zero report outlining targets validated by the the necessary
Slide 40: Advancing Social Equity
Advancing Social Equity Hold ourselves accountable for advancing diversity, equity and inclusion for all stakeholders. We view the collection of varied experiences, talents and perspectives as a strength. Culture Diversity Named one of Greater Achieved the Women Lead Here Toronto’s Top Employers 202
Slide 41: Strong Governance
Strong Governance Dedicated to governance practices designed to maintain high standards of oversight, accountability, ethics and compliance. Recognition Suppliers Achieved an ISS ESG Prime Released our Supplier Code rating and improved GRESB of Conduct and Rating to 4-star (scored 82 on a implemente
Slide 42: Appendices
11 Appendices Q1 2023 · Investor Presentation
Slide 43: Transformational Industrial Development
Transformational Industrial Development
Slide 44: Choice Industrial Centre, Surrey, BC
Choice Industrial Centre Surrey, BC • 17-acre • 353K sq. ft. • Well situated in Campbell Heights industrial node • New generation logistic facility • Pursuing LEED Silver certification Q1 2023 • Appendices • Transformational Industrial Development 44
Slide 45: Choice Eastway Industrial Centre, East Gwillimbury, ON
Choice Eastway Industrial Centre – Phase 1 East Gwillimbury, ON • 100-acre ground lease with Loblaw • 1.2M sq. ft. • Automated, multi- temperature industrial facility • Strategically located at corner of Hwy 404 and Green Lane E. • Partner: RICE Group Q1 2023 • Appendices • Transformational Industri
Slide 46: Choice Caledon Business Park, Caledon, ON
Choice Caledon Business • 380-net acres of industrial development land Park • Excellent access to major highways and intermodals Caledon, ON • Strong labour pool • Multi-phase industrial park • New generation logistic space • Partner: RICE Group Q1 2023 • Appendices • Transformational Industrial Dev
Slide 47: Active Residential Development
6 Active Residential Development Q1 2023 · Investor Presentation
Slide 48: Mount Pleasant Village, Brampton, ON
Mount Pleasant Village • 444 units Brampton, ON • Directly adjacent to Mount Pleasant GO station • Geothermal System offers low-carbon heating & cooling • Partner: Daniels Q1 2023 • Appendices • Active Residential Development 48
Slide 49: Element, Ottawa, ON
Element • 252 units Ottawa, ON • Located in trendy Westboro neighbourhood • Close proximity to transit • Partner: Woodbourne Canada Q1 2023 • Appendices • Active Residential Development 49
Slide 50: Mixed-Use & Residential in Planning
Mixed-Use & Residential in Planning
Slide 51: Grenville & Grosvenor, Toronto, ON
Grenville & Grosvenor • 1-acre site in Downtown Toronto, ON Toronto • 700+ units • Provincial Affordable Housing Lands Program • Transit accessible • Partner: Greenwin 99 97 91 Walk Score Transit Score Bike Score Q1 2023 • Appendices • Mixed-Use & Residential in Planning 51
Slide 52: Golden Mile, Toronto, ON
• 19-acre site in Toronto Golden Mile – Toronto, ON • Adjacent to two new transit stations along Eglinton Crosstown LRT • Large mixed-use community • High density residential and retail Q1 2023 • Appendices • Mixed-Use & Residential in Planning 52
Slide 53: Golden Mile Phase, Toronto, ON
Golden Mile Phase 1 Toronto, ON • 1 rental tower and 2 condo towers • 1,350 units • Mixed-use • Community innovation district • Partner: Daniels Q1 2023 • Appendices • Mixed-Use & Residential in Planning 53
Slide 54: 720 Broadview Ave., Toronto, ON
720 Broadview Ave. • 3.3-acre site Toronto, ON • 500 units • 1 residential building • Directly across from Broadview TTC subway station • New grocery store • Dedicated public park Q1 2023 • Appendices • Mixed-Use & Residential in Planning 54
Slide 55: 2280 Dundas St. W, Toronto, ON
2280 Dundas St. W – Toronto, ON Q1 2023 • Appendices • Mixed-Use & Residential in Planning 55
Slide 56: 2280 Dundas St. W, Toronto, ON
2280 Dundas St. W • 13-acre site in Downtown Toronto, ON Toronto • Major transit hub (TTC, GO Train, UP Express) • Large mixed-use community • High density residential, retail and office Q1 2023 • Appendices • Mixed-Use & Residential in Planning 56
Slide 57: Parkway Forest Dr., Toronto, ON
Parkway Forest Dr. • 3-acre site Toronto, ON • 339 units • 1 residential building • Close proximity to Don Mills TTC subway station • Partner: Woodbourne Canada Q1 2023 • Appendices • Mixed-Use & Residential in Planning 57
Slide 58: 25 Photography Dr., Toronto, ON
25 Photography Dr. – Toronto, ON Q1 2023 • Appendices • Mixed-Use & Residential in Planning 58
Slide 59: 25 Photography Dr., Toronto, ON
25 Photography Dr. • 7.7 -acre site Toronto, ON • 7 mixed-use buildings • Major transit hub (Eglinton Crosstown LRT, GO Train, UP Express) • Community integration Q1 2023 • Appendices • Mixed-Use & Residential in Planning 59
Slide 60: 685 Warden Ave., Toronto, ON
685 Warden Ave. • 6.5-acre site Toronto, ON • 1,500 units • 6 residential buildings • Directly adjacent to Warden TTC subway station • Dedicated public park Q1 2023 • Appendices • Mixed-Use & Residential in Planning 60
Slide 61: 985 Woodbine Ave., Toronto, ON
985 Woodbine Ave. – Toronto, ON Q1 2023 • Appendices • Mixed-Use & Residential in Planning 61
Slide 62: 985 Woodbine Ave., Toronto, ON
985 Woodbine Ave. • 1.7-acre site in Toronto, ON Downtown Toronto • Two mid-rise rental residential buildings • 400 units • Directly adjacent to Woodbine TTC subway station • Grocery retail at-grade Q1 2023 • Appendices • Mixed-Use & Residential in Planning 62
Slide 63: 449 Carlaw Ave., Toronto, ON
• 5.6-acre site • 3 mixed-use buildings • 1,080 units • Transit-oriented community • Future stop on Ontario Line 449 Carlaw Ave. – Toronto, ON Q1 2023 • Appendices • Mixed-Use & Residential in Planning 63
Slide 64: Immense Value Opportunity
Immense Value Opportunity Choice Properties continues to grow and create value through its pipeline of potential commercial and mixed-use developments.
Slide 65: Toronto
Toronto • 51 properties in the City of Toronto • Significant long-term development potential Retail 40 Industrial 1 Mixed-use, Residential 5 and Other PUD 5 51 Q1 2023 • Appendices • Immense Value Opportunity 65
Slide 66: 17 Leslie St., Toronto, ON
17 Leslie St. • 6-acre site Toronto, ON • Close proximity to Queen Streetcar Q1 2023 • Appendices • Immense Value Opportunity 66
Slide 67: 10 Lower Jarvis St., Toronto, ON
10 Lower Jarvis St. • 4-acre site Toronto, ON • Core downtown location Q1 2023 • Appendices • Immense Value Opportunity 67
Slide 68: Greater Vancouver Area
Greater Vancouver Area • 19 properties in the GVA • Significant long-term development potential. Retail 16 Industrial 3 19 Q1 2023 • Appendices • Immense Value Opportunity 68
Slide 69: North Road, Coquitlam, BC
North Road • 7.8-acre site in city Coquitlam, BC centre • Access to two lines of Vancouver SkyTrain • Revitalization into mixed-use community • High density residential and retail Q1 2023 • Appendices • Immense Value Opportunity 69
Slide 70: Montréal
Montréal • 38 properties in the GMA • Significant long-term development potential Retail 36 Industrial 2 38 Q1 2023 • Appendices • Immense Value Opportunity 70
Slide 71: ChoiceProperties
ChoiceProperties
Choice Properties Real Estate Investment Trust — Q1 2023 Earnings Presentation on 6ix