Primaris Real Estate Investment Trust · TSX:PMZ.UN
Primaris Real Estate Investment Trust — Q1 2025 Earnings Presentation
53 slides from Primaris Real Estate Investment Trust's earnings presentation, May 1, 2025
Slide 1: Report to Unitholders Q1 2025
Report to Unitholders Q1 2025 1
Slide 2: Caution Regarding Forward-Looking Statements
CAUTION Forward-Looking Statements and Future Orientated Financial Information Disclaimer: Certain statements included in this presentation constitute ‘‘forward-looking information’’ or “forward- looking statements” within the meaning of applicable securities laws. The words “will”, “expects”, “plan
Slide 3: Primaris at a glance: $4.5B portfolio, 14.2M SF GLA
Conestoga Mall, Waterloo, Ontario $4.5B $4.0B BBB (high) Stable 94.2% National Portfolio Unencumbered Assets Investment Grade Rating Committed Occupancy SF 5.7x 1 14.2M $768 45% - 50% Target FFO Payout Ratio** Average Net Debt** to GLA Same Store Sales Productivity Adjusted EBITDA** 1. Supplementary
Slide 4: Canadian Enclosed Evolution
Canadian Enclosed Evolution A blank slate to design a best-in-class vehicle to take advantage of the recovery in enclosed shopping centres Expansion Through Euphoria Retail in Transition Pandemic Growth Retailers conclude Over levered, too bricks & mortar anchors much concentration omnichannel strat
Slide 5: Primaris Strategic Advantage. Becoming the first call.
Differentiated financial model and a Primaris Strategic Advantage. mandate for growth Becoming the first call. Built to Grow and Thrive Size and Scale Proper Capitalization • $4.5B national portfolio of leading • Average Net Debt** to Adjusted 1 enclosed shopping centres in growing EBITDA**: 5.7x ma
Slide 6: The Canadian Consolidation Opportunity
The Canadian Consolidation Opportunity 6
Slide 7: Canadian Consolidation Opportunity
Large opportunity to be the consolidator as institutions contemplate Canadian Consolidation rebalancing, Primaris stands alone as a potential buyer Opportunity Canada’s only enclosed shopping centre REIT $50 billion of Canadian enclosed Primaris stands alone as a shopping centres concentrated to ins
Slide 8: Target: Leading shopping centres in growing Canadian markets
Target: Leading shopping centres in growing Canadian markets January 31, 2025 January 31, 2025 October 1, 2024 Canada’s only enclosed Target shopping centre REIT Acquisition Criteria Southgate Centre, Edmonton, Alberta Oshawa Centre, Oshawa, Ontario Les Galeries de la Capitale, Quebec City, Quebec M
Slide 9: Acquisition Deal Structure Overview
Acquisitions further demonstrate Primaris as an attractive buyer for Canadian pension Acquisition Deal Structure fund vendors of market leading Canadian shopping centres Overview Southgate (50%) and (in millions of Canadian dollars Oshawa Centres Galeries de la Capitale Halifax Shopping Centre Cones
Slide 10: The Canadian Enclosed Mall Universe
High quality target assets in growing The Canadian Enclosed Mall target markets Universe Sources: ICSC Canada Mall Property Performance Report, 2024. 10
Slide 11: Primaris' High-Quality Target Assets
High quality target assets in growing Primaris' High-Quality target markets Target Assets Sources: ICSC Canada Mall Property Performance Report, 2024. 11
Slide 12: Southgate Centre
Significant NOI** Growth Potential as Primaris’ full-service Southgate management platform integrates and operates the property. Opportunities to increase operating income include: • The conversion of tenants on preferred rent deals to Centre standard market leases; • Lease up of approximately 56,00
Slide 13: Oshawa Centre
Significant NOI** Growth Potential as Primaris’ full-service Oshawa management platform integrates and operates the property. Opportunities to increase operating income include: • The conversion of tenants on preferred rent deals to Centre standard market leases; • Lease up of approximately 98,000 s
Slide 14: Les Galeries de la Capitale
Les Galeries Significant NOI** Growth Potential as Primaris’ full-service management platform integrates and operates the property. Opportunities to increase operating income include: de la Capitale • Conversion of tenants on preferred rent deals to standard market leases and co-tenancy clause resol
Slide 15: Halifax Shopping Centre
Significant NOI** Growth Potential as Primaris’ full- Halifax service management platform integrates and operates the property. Opportunities to increase operating income include: Shopping • Lease up of vacant or temporary tenanted space to strong tenants at market rents; • Conversion of tenants on
Slide 16: Conestoga Mall
Conestoga Significant NOI** Growth Potential as Primaris’ full- service management platform integrates and operates the property. Mall Opportunities to increase operating income at include: • Lease up of vacant or temporary tenanted space to strong tenants at market rents; • Conversion of tenants on
Slide 17: Shopping Centre Overview
Adding large Leading Regional Shopping Shopping Centre Centres to the Primaris Portfolio Overview Total CRU Same Store GLA at Share Property Name Location Sales Volume Sales 1 (SF) Site Coverage SF 6.7M 1 2 (thousands) Productivity (thousands) 1 Southgate Centre Edmonton, AB $310,105 $1,408 422 39%
Slide 18: Declining Supply of Quality Retail Space as Population Grows
Declining Supply of Quality Retail Space as Population Grows Low supply, rising sales, population growth and increasing tenant demand is creating a significant opportunity to drive rents and occupancy, driving NOI growth 1. Source: Environics Analytics Estimates & Projections. 2.7% population growth
Slide 19: Disciplined Capital Allocation
Disciplined Capital Allocation 19
Slide 20: Capital Structure Strategy and Targets
Designed to provide significant financial Capital Structure Strategy flexibility and create a differentiated investment profile among Canadian REITs and Targets Committed to maintaining a conservative financial profile Maintain low leverage Maintain staggered and long dated debt maturity profile to
Slide 21: Highly Differentiated Financial Model
Best-in-class structure built with Highly Differentiated Financial Model flexibility, optionality and liquidity, enabling minimized cost of capital Unsecured Credit 5.7x $4.0B 2.5x BBB 1 Facilities 3% Convertible Preferred LP Units Senior Unsecured Debentures 9% Average Net Unencumbered Unencumbered
Slide 22: NCIB Compounding Capital at a Rapid Pace
A financial model built for measured amount NCIB Compounding Capital of Indefinite Buybacks funded through Free Cash Flow, on a Leverage Neutral Basis at a Rapid Pace Compounding Capital Highly Differentiated Lowest Leverage and Free Cash FCF available for through Unit • Leverage remains neutral FFO
Slide 23: The Primaris REIT Portfolio
The Primaris REIT Portfolio 23
Slide 24: Leading Enclosed Shopping Centre Portfolio
Leading Enclosed Shopping Primaris owns and manages regional enclosed Centre Portfolio shopping centres in growing, Canadian markets NOI** by Asset Class NOI** by Region Professional Centre + Industrial, 2% British Columbia Alberta 10% Open Air Retail, 3% 25% Grocery-Anchored Quebec Plaza, 4% 10% No
Slide 25: Strong Senior Leadership Team
Strong Senior Leadership Team Experienced Senior Leadership Team with significant real estate investment and operations expertise Alex Avery 22 6 Patrick Sullivan 32 21 Rags Davloor 37 3 Leslie Buist 15 6 Chief Executive President & Chief Operating Chief Financial SVP, Finance Officer Officer Office
Slide 26: Well Positioned for Growth
Well Positioned for Growth Resilience Through Economic Cycles and Poised for Future Growth 95.3% 95.6% 94.8% 94.4% 94.8% 94.8% 93.7% 94.2% 93.9% 94.2% 92.1% 92.2% 92.0% 92.5% 92.6% 92.5% 92.8% 91.8% 91.5% 91.5% 91.2% 91.3% 90.9% 91.0% 90.7% 90.6% 91.0% Committed 89.1% 89.2% 88.1% Occupancy Q4-20 Q1-
Slide 27: Value, Staples and Necessity Type Tenants
Creditworthy Top Tenants Create a Value, Staples and Necessity High Quality Tenants Roster Type Tenants Annualized Store WALT² Credit Ratings Top Tenants¹ Sector Minimum Rent (% of Total) Count (yrs) (S&P/DBRS) Tenant Mix (% of Gross Rent) 1 Value Retail 4.5% 32 3.7 BBB/ BBB Apparel, 24% 2 Value Ret
Slide 28: Strong Canadian Retail Tenants
Canadian retail REIT tenants largely dominated by grocery, pharmacy and Strong Canadian Retail Tenants value retailers, representative of the Canadian consumer Common Retailer Other Canadian Retail REITs¹ across 5+ REITs Primaris REIT A B C D E F 1 Canadian Tire Canadian Tire Walmart Loblaws Empire/
Slide 29: HBC: Primaris is Prepared
Primaris has updated its longstanding re-tenanting, HBC: Primaris is Prepared redevelopment, and repurposing plans in relation to each of the 9 locations with significant analysis and evaluation of alternatives. Primaris is ready to act, at first opportunity. As at March 31, 2025 (in ‘000s square fe
Slide 30: Current Markets Demonstrate Strong Growth Characteristics
Current Markets Demonstrate With the rising cost of living in Canada's largest cities, high-growth markets, where Strong Growth Characteristics Primaris owns leading malls, are population growth February 2025 Rolling 12 Months Same Stores Sales PSF $1,408 $1,130 $964 $872 $851 $836 $765 $728 $809 $7
Slide 31: Positive Leasing Momentum
Strong large-format Positive Leasing Momentum leasing year-to-date momentum with high-quality tenants GLA Weighted Average Weighted Average3 Weighted Average For the three months ended Count Spread on Renewing December 31, 2024 (000s of SF) Lease term (in years) Net Rent per OSF Rents 1 CRU New tena
Slide 32: Retailer Affordability
Retailer Affordability <q]
Slide 33: Retailer Affordability Core Focus
Retailer Affordability Core Focus Efficient cost structure Park Place Mall, Lethbridge, AB • Operate with a lower cost structure 1 • Target GROC ratio of <15% 2 • Actual GROC ratio of 11% • Prudent total operating costs inflation of 3% • Use economies of scale to tender contracts portfolio wide • Ag
Slide 34: Capital Expenditure Programs Enable Prudent Cost Management
Properties maintained to a high standard while Capital Expenditure Programs keeping focus on controlling costs and adherence to our long-term capital plan Enable Prudent Cost Management Prudent 15-Year Capital Plans • All properties have a 15-year capital plan • Includes useful life of capital proje
Slide 35: Unique Lease Structure Captures Growth
Property operating costs are recovered from Unique Lease Structure tenants who absorb the impact of rising inflation Captures Growth Lease Structure Primaris unique lease structure + • Long-term contractual net rents Net Rent provides the opportunity to • Incremental rent escalation grow revenues in
Slide 36: Financial Results
Financial Results <q]
Slide 37: Strong Q1/25 Results; Reaffirms 2025 Guidance
Strong performance has underlined our commitment to, and confidence in our clear, and focused strategy of acquiring, owning Strong Q1/25 Results; and managing leading, Canadian enclosed shopping centres Reaffirms 2025 Guidance • Same Properties Cash NOI** growth maintained at 94.2% Committed Signifi
Slide 38: 2025 Financial Outlook
2025 Financial Outlook Management anticipates the following for the year ended 2025 Metrics Previously Published Updated Additional Notes Occupancy Increase of 0.8% to 1.0% Decrease of 6.0% to 7.0% Assumes HBC disclaims all their leases, comprising 1,030.6 thousand square feet Contractual rent steps
Slide 39: ESG Linked to Business Strategy
In early 2023, management and the Board ESG Linked to Business Strategy approved our ESG Strategic Plan and 3-year Implementation Roadmap CG&N Committee oversees and monitors Primaris’ performance against the ESG Strategy • Strategic Plan and Roadmap based on the ESG Materiality Assessment, aligning
Slide 40: ESG Targets
As part of Primaris’ commitment to ESG ESG Targets initiatives, in 2024 the REIT developed ESG targets informed by the material ESG factors and their link to business performance KPIs Targets Current Measurement Period Actions to Achieve or Maintain Targets * Denotes a core ESG factor. 1. This targe
Slide 41: Primaris Screens Well Against Retail REIT Peers on All Metrics
Primaris trades at a discount, despite its Primaris Screens Well Against focused and clearly defined strategy, with its Differentiated Financial Model Retail REIT Peers on All Metrics and Disciplined Capital Allocation 1. Based on analyst estimates. 2. Primaris reports Average Net Debt** to Adjusted
Slide 42: Investment Proposition
Investment Proposition Implied discount to Net Asset Value** a compelling investment opportunity $21.40 33% Upside Capital Recycling Convert pandemic Occupancy Compounding Increasing Rents to NAV** Opportunities lease concessions Improvements Excess Free Upon Renewal 1 to market rents Cash Flow $14.
Slide 43: Appendix
Appendix <q]
Slide 44: Case Study: Dufferin Grove Received Final Approval
Properties maintained to a high standard while Case Study: Dufferin Grove keeping focus on controlling costs and adherence to our long-term capital plan Received Final Approval Development Overview • $600 million intensification and redevelopment of Dufferin Mall’s northernmost parking area • Replac
Slide 45: Guided by Skilled Independent Board of Trustees
Tremendous Strategic Resource: Guided by Skilled Independent Experiential Retailing, Institutional Property Brokerage, Investment Management, REIT Operations, Financial Strategy, Public Company Board of Trustees Reporting, Retail Technology Avtar Bains Louis Forbes Deborah Weinswig • President of Pr
Slide 46: The Canadian Advantage
Canadian retail property landscape differs The Canadian Advantage substantially from the United States Canada US The Canadian Advantage Retail Space per Capita 17 sf per person¹ 23 sf per person¹ 35% less space drives higher sales productivity Immigration Record high immigration targets for Limiting
Slide 47: Orchard Park Shopping Centre
** Cash NOI Growth Orchard Park 4.3% 12.1% 11.6% 6.6% 6.6% Shopping 0.5% 2.4% 0.2% (0.9)% Centre (14.6)% 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 YoY Growth • Largest regional enclosed mall between the Greater Vancouver Area and Calgary $197 96.7% 651,089 17.4%1 Annual Retail In-place SF Tr
Slide 48: Park Place Mall
** Cash NOI Growth Park Place 5.2% 5.0% 16.8% 6.6% 3.7% Mall 1.3% 2.2% 2.0% (0.9)% (3.0)% 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 YoY Growth • Located at the intersection of 1st Avenue South and Scenic Drive in Lethbridge, Alberta $93M 75.6% 473,308 15.6%1 • Built in 1988, expanded in
Slide 49: Well-Staggered Lease Maturity
Well-Staggered Lease Maturity Balanced lease profile 3,000 $41.67 45 4.0yr Weighted Average Net Rent per occupied sq. ft.² 40 Weighted $33.39 Average Lease Occupied GLA (in thousands sq. ft.) 35 $29.51 $30.68 $30.21 Term 2,000 $28.09 30 25 3.3yr 20 CRU Weighted Average Lease 1,000 15 Term 10 5 5.4yr
Slide 50: Asset List - Shopping Centres
Asset List - Shopping Centres Cash GLA at Site Site Contractual Mortgage AllSales Stores Pop- Store Building NOI** In-place Mortgage 1 Same Store # Property Name Location Type Share Share Acres at Coverage 1 Major Tenants ulation Count Certs (million Occupancy (thous) Interest Maturity Sales PSF (SF
Slide 51: Asset List - Shopping Centres Continued
Asset List - Shopping Centres Continued Same GLA at Site Cash All Stores Pop- Site Acres Coverage Store Building In-place Mortgage Contractual Mortgage 1 Store # Property Name Location Type Share Share NOI** Sales Major Tenants ulation at Share Count Certs Occupancy (thous) Interest Maturity Sales1
Slide 52: Asset List - Other Property Types
Asset List - Other Property Types Site Cash All Stores GLA at Site Acres Store Building In-place Mortgage Contractual Mortgage 1 Same Store # Property Name Location Type Share Share Coverage NOI** Sales 1 Major Tenants (SF) at Share Count Certs Occupancy (thous) Interest Maturity Sales PSF at Share
Slide 53: Invest With Us
Invest With Us TICKER: PMZ.UN S&P/TSX Capped Total Portfolio of REIT Index and BBB (high) Stable Internally Managed Strong Institutional $4.6 Billion, S&P/TSX Investment Grade Exchange: TSX Independent Board Endorsement Providing Scale and Composite Index Credit Rating Trading Liquidity Member Conta
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