Granite Real Estate Investment Trust · TSX:GRT.UN
Granite Real Estate Investment Trust — Investor Presentation (March 2022)
25 slides from Granite Real Estate Investment Trust's investor presentation, March 2022
Slide 1: Investor Presentation
INVESTOR PRESENTATION | August 2020 INVESTOR PRESENTATION | March 2022
Slide 2: Presentation of Certain Information
PRESENTATION OF CERTAIN INFORMATION • Unless otherwise indicated in this presentation, all information is presented as of December 31, 2021 and all financial information that is identified as current refers to the period ending December 31, 2021. For definitions of certain non-IFRS performance measu
Slide 3: Granite Highlights
GRANITE HIGHLIGHTS2 ORGANIZATIONAL PRINCIPLES PORTFOLIO OVERVIEW FINANCIAL PERFORMANCE Long-term total return focused 122 income-producing properties + 80% LTM AFFO POR3 12 development properties/land Conservative and flexible capital 55.9M square feet with 26% net leverage ratio3 structure 99.7% oc
Slide 4: Granite Highlights – ESG+R
GRANITE HIGHLIGHTS – ESG+R ENVIRONMENTAL SOCIAL GOVERNANCE RESILIENCE Promote energy efficiency Promote employee well- 100% independent Board Program aligned with Task and sustainable practices being excluding CEO Force on Climate-Related at our properties Financial Disclosures (“TCFD”) framework 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 March 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 - December 31, 20214 0.7M SF 13.8M SF Flex/Office2 Multi-Purpose2 14.1M SF $158M $802M 5.1M SF Special Purpose 41.2M SF Industrial/Warehouse2 $1,089M Distribution/E-commerce3 $994M $1.9B 8.9M SF $8.1B $5,602M Value Special
Slide 8: Portfolio Transformation Strategy
PORTFOLIO TRANSFORMATION STRATEGY Invest selectively/opportunistically in Target markets with superior Focus on modern facilities that meet evolving property types and markets economic conditions and market the demands of E-Commerce and benefiting from technological fundamentals traditional distribu
Slide 9: Financial Performance
FINANCIAL PERFORMANCE Historical Operating Performance ($M)2 Distributions and Payout Ratios1,2 91% 82% 81% 80% $394 77% 71% 75% $340 3.10 78% 79% 73% 78% 3.00 $299 71% 2.90 2.80 68% 68% $274 2.72 $265 $248 2.60 $245 $235 $223 $216 2.43 $214 $216 $204 2.30 $188 $187 $183 $181 $185 2.21 $173 $158 $16
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% 395% 180% 370% 345% 160% 320% 295% 140% 270% 245% 120% 220% 195% 100% 170% 145% 80% 120% 60% 95% 70% 40% 45% 20% 20% -5% 0% 1Yr 2Yr 3Yr 5Yr G
Slide 11: Globally Diversified Portfolio
GLOBALLY DIVERSIFIED PORTFOLIO1 5 countries – 134 properties – 55.9 million square feet GERMANY 14 properties 4.3M SF CANADA 34 properties 6.4M SF NETHERLANDS 1 15 properties 2 4.9M SF 4 UNITED STATES 62 properties 32.8M 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 $789M $32.7M $58.9M 9% 16% 10% 21% $1,649M $566M $29.0M 8% 7% $774M 10% $7.9B 16% $365M $60.0M $4,090M $184.7M 51% 52% By Square Feet By Number of Income-Producing Properties 4.9M 6.4M 11% 15 9% 12% 27
Slide 13: IPP Portfolio Segmentation by Category
IPP PORTFOLIO SEGMENTATION BY CATEGORY1 Distribution/E-commerce Properties Industrial/Warehouse 78 Properties 33 Properties 41.2M SF (∼528K SF/property) 5.1M SF (∼156K SF/property) $5.6B Fair Value (∼$136/SF) $1.0B Fair Value(∼$194/SF) WALT: 4.0 years WALT: 6.3 years 71% $241.3 M Annualized Revenue(
Slide 14: Development and Expansion Pipeline
DEVELOPMENT AND EXPANSION PIPELINE Altbach, Germany ~0.3M SF Fort Worth, Texas ~0.6M SF Nashville area, Tennessee ~1.4M SF Mississauga, Ontario (expansion) Houston, Texas (Phase I and Phase II) Indiana ~1.0M SF ~0.1M SF ~1.4M SF Active development program to enhance total return & platform value Mar
Slide 15: Lease Expiration Profile
LEASE EXPIRATION PROFILE1 Outstanding Lease Expiries by Annualized Revenue Annualized Overall Revenue $365.3M WALT 5.8 Years Occupancy 99.7% 100 41.9% Canada USA Austria Germany Netherlands 90 80 Annualized Revenue (C$M) 70 60 50 17.3% 40 13.7% 30 8.0% 3.6% 6.8% 8.6% 20 10 0 2022 2023 2024 2025 2026
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 29% 22% 4.4 A- Amazon 5% 4% 17.2 AA True Value Company 3% 2% 19.2 NR ADESA 2% —% 7.6 NR Restoration Hardware 2% 2% 6.3 Ba2 Hanon Systems 2% 1% 7.7 AA Spreetail FTP 2% 2% 4.8 NR
Slide 17: Balance Sheet Strength
BALANCE SHEET STRENGTH2 Capitalization Debt Maturity Profile Unit Price (03/04/2022) $94.24 $1,200 Units Outstanding 65.7 998 Weighted average debt term-to-maturity – 5.5 years Market Capitalization1 $6,191 $1,000 Weighted average cost of debt – 1.59% Credit Facility $0 $800 Construction Loan due De
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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