Primaris Real Estate Investment Trust · TSX:PMZ.UN
Primaris Real Estate Investment Trust — Q2 2012 Earnings Presentation
37 slides from Primaris Real Estate Investment Trust's earnings presentation, August 2012
Slide 1: Investor Presentation August 2012
Investor Presentation August 2012
Slide 2: Presentation Overview
Presentation Overview Strategic Objectives Operational Highlights Financial Highlights Governance and Management Outlook 2
Slide 3: Strategic Objectives
Strategic Objectives Generate reliable and g growing g cash distributions Maximize unit value Expand asset base Primaris’’ Defined Property Strategy Primaris Strategy: — Mid-market Mid k t retail t il centres t i major in j cities iti — Major retail centres in secondary cities — Other compleme
Slide 4: Canada's Dynamic Retail Market
Canada’s Canada s Dynamic Retail Market Type of Centre Size Number of Centres Super‐Regional >900,000 38 Regional 450,000 – 900,000 117 Community 100,000 – 450,000 1042 Power Centre 487 N i hb h d Neighbourhood <100,000 100 000 2350 Source: CSCA, Rogers Directory of Shopping Centres 4 4
Slide 5: PMZ Portfolio
PMZ Portfolio Edmonton Calgary Vancouver Regina Winnipeg Seattle Montreal Ottawa Toronto Boston New York Philadelphia 5
Slide 6: Acquisition – Driftwood Mall
Acquisition – Driftwood Mall 6
Slide 7: Driftwood Mall
Driftwood Mall The Th acquisition i iti off D Driftwood ift dMMallll ffor $45 $45.2 2 million illi was completed l t d on May 2, 2012 Driftwood Mall is a single single‐level level enclosed community shopping centre in Courtenay, British Columbia Target expansion in 2013 will increase the total
Slide 8: Presentation Overview
Presentation Overview Strategic Objectives Operational Highlights Financial Highlights Governance and Management Outlook 8 8
Slide 9: Average Rent Increase on Lease Renewals
Average Rent Increase on Lease Renewals 8.9% 8.8% 8.7% 9% 8% 6.9% 7.0% 6.9% 6.7% 7% 6.4% 6.2% 6% 5% 4% 3% 2% 1% 0% 2004 2005 2006 2007 2008 2009 2010 2011 2012 YTD 9
Slide 10: Operational Highlights
Operational Highlights (For the three months ending June 30, 2012) Primaris same property sales productivity average: $468 p.s.f. Primaris sales productivity Y‐O‐Y: ‐0.1% Primaris Q2 same property NOI Growth Y‐O‐Y: 4.7% Primaris leasing activity: ─ 151 leases; 435,241square feet; 74.3% of le
Slide 11: Portfolio Lease Maturities
Portfolio Lease Maturities 1,800,000 $35 D AVERAGE MIINIMUM 1,600,000 11.2% (4) 11.4%(8) $30 PSF 1,400,000 9.5% (4) 9.5% (5) Q FT OF EXPIRY Y $25 S EXPIRING P 1,200,000 7.9%(1) 1,000,000 $20 800,000 $15 600,000 RENTS 3% (0) 3.3% 3 SQ WEIGHTED $10 400,000 $5 200,000 0 $0 2012 Q3 Q3-Q4 Q4 2013 2014 20
Slide 12: Ten Largest Tenants
Ten Largest g Tenants (For the period ending June 30, 2012) Percentage of Weighted Average Total Annual Lease Term to Tenant Groups Gross Rent Area (Sq. ft.) Maturity (Years) 1 Hudson’s Bay Company 4.3% 1,993,118 6.2 2 Canadian Tire 3.8% 886,735 4.7 3 YM (Suzy (S Shi Stitches, Shier, S i h Bluenotes
Slide 13: Grand Opening dates for Target stores
Grand Opening dates for Targets stores 2013 Mall Location April Burlington Mall Burlington, ON May St. Albert Centre St. Albert, Edmonton, AB July Cataraqui Centre Kingston, ON July Driftwood Mall Courtenay, BC September Fleur‐de‐Lys Shopping Centre Québec City, QC September b Place l d’ l d’Orleans
Slide 14: Target Timeline
Target Timeline 6 months th 6 9 months 6-9 th Zellers gets Notice Construction starts Target opens 14
Slide 15: Primaris – Zellers locations
Pi Primaris i – Zellers Z ll locations l ti LOCATION AREA LEVELS Conversions Burlington Mall 121,523 sf 1 Cataraqui Centre 115,307 sf 2 Grant Park 116 573 sf * 116,573 1 Place d'Orleans 116,598 sf 1 Place Fleur de Lys 115,000 sf 1 Place Vertu 123,975 sf 2 St Alb St. Albertt Centre C t 94 618 sff * 9
Slide 16: Asset Type Diversification
Asset Type Diversification Asset Type Diversification of Portfolio Asset Type Diversification of Portfolio (Based on Square Footage: As at July 2003) (Based on Square Footage: As at June 3030, 2012) ENCLOSED SHOPPING ENCLOSED SHOPPING CENTRES CENTRES UNENCLOSED RETAIL OTHER UNENCLOSED RETAIL 16 16
Slide 17: Geographic Diversification
Geographic Diversification Geographic Diversification of Portfolio Geographic Diversification of Portfolio (Based on Minimum Rent: As at July 2003) (Based on Minimum Rent: As at June 30, 2012) Alberta BRITISH COLUMBIA British Columbia ALBERTA SASKATCHEWAN Ontario MANITOBA ONTARIO QUEBEC NEW BRUNSWIC
Slide 18: Shopping venues most often visited
Shopping venues most often visited US Shoppers Canadian Shoppers 70% 60% 50% 40% 30% 20% 10% 0% Enclosed Malls Strip centres Outdoor centres ICSC Survey: 2009 Shopping Habits Report 18 18
Slide 19: Presentation Overview
Presentation Overview Strategic Objectives Operational Highlights Financial Highlights Governance and Management Outlook 19 19
Slide 20: Net Income and Distributions
N IIncome and Net d Di Distributions ib i Q2 – 2012 Q2 ‐ 2011 Revenue $ 98.9 mm $ 82.8 mm Net Income 39 2 mm 39.2 41 2 mm 41.2 Cash Distributions 27.1 mm 22.6 mm Cash Distributions per unit 0.305 0.305 20 20
Slide 21: Total Capitalization
Total Capitalization (As at June 30, 2012) June 30 Secured Debt $ 1,410 mm B k IIndebtedness Bank d bt d - Convertible Debenture 233 mm Equity 2,125 mm Total Market Capitalization 3,768 mm Number of Units 90,197,295 21 21
Slide 22: Mortgages Payable – Debt Maturities
Mortgages Payable – Debt Maturities As at June 30, 2012 (expressed in millions) Year Debt Maturity Annual Security ($) ($) 2012 21 16 Eglinton Square remainder 2013 214 31 Stone Road,, Cornwall,, Alliston,, Woodgrove g 2014 98 30 Aberdeen, Midtown 2015 97 28 2016 130 25 Thereafter 648 77 Total 1208
Slide 23: Liquidity
Liquidity As at June 30, 2012 $900 mm acquisition i iti capacity it $100 mm operating line (no drawdown) $31 mm per year principal payments No mezzanine loans to be funded 23 23
Slide 24: Long-Term Debt
Long‐‐Term Debt Long Debt limited to 65% of total asset value Current long term debt at 43.5% of total asset value Two types of debt: ─ 100.0% of debt is at fixed rates,, with a weighted g average g interest rate of 5.4% and an average term to maturity of 5.3 years ─ Less than 15% of debt is f
Slide 25: Portfolio Growth
Portfolio Growth J l 2003 July J June 30 30, 2012 Book Value $436 mm $3,638 mm Total GLA 2.76 mm sf 13.7 mm sf Portfolio f l Occupancy 96% 97.4% 25 25
Slide 26: Portfolio: West
Portfolio: West Northland Village Aberdeen Mall Cornwall Centre Park Place Mall Calgary, AB Kamloops, BC Regina, SK Lethbridge, AB Sunridge Mall Orchard Park Midtown Plaza Woodgrove Centre Calgary, AB Shopping Centre Saskatoon, SK Nanaimo, BC Kelowna, BC 26 26
Slide 27: Portfolio: East
Portfolio: East Fleur de Lys Stone Road Mall Place d’Orleans Dufferin Mall Quebec City, QC Guelph, ON Ottawa, ON Toronto, ON Place du Royaume Burlington Mall Oakville Place Cataraqui Town Centre Saguenay, QC Burlington, Ontario Oakville, ON Kingston, ON 27 27
Slide 28: Presentation Overview
Presentation Overview Strategic Objectives Operational Highlights Financial Highlights Governance and Management Outlook 28 28
Slide 29: Board of Directors
Board of Directors Roland A. Cardy (1,4,5) Kerry D. Adams (1,2,4,5) William J. Biggar (1,2,3,4) John Morrison (3) Trustee, Trustee Trustee Trustee Chairman of the Board 1 – Audit Committee 2 – Governance and Nominating Committee 3 – Distributions Committee 4 – Independent Trustee 5 – Compensation Co
Slide 30: Senior Management Team
Senior Management Team John R. Morrison Louis M. Forbes Patrick Sullivan Devon Jones President & Chief Executive Officer EVP & Chief Financial Officer SVP, Portfolio Management Vice President, Legal Ron Perlmutter Anne Morash Lesley Gibson Toran Eggert Vice President, Investment Vice President, Deve
Slide 31: Unitholders
Unitholders** Unitholders Cohen & Steers Capital Management 7,108,125 7 108 125 (8.8%) (8 8%) CBRE Clarion Securities, Inc. 6,073,430 (6.9%) Blackrock Fund Advisors 3,899,172 (4.4%) RBC Global Asset Management 3,626,010 (4.1%) CI Investments Inc. 3,402,642 (3.9%) Sentry Select Capital Corp. 2,994,50
Slide 32: Presentation Overview
Presentation Overview Strategic Objectives Operational Highlights Financial Highlights Governance and Management Outlook 32 32
Slide 33: Outlook
Outlook Primaris to cautiously pursue new acquisitions Primaris to look inwards for organic growth opportunities Greatest competition in acquisition remains in under $20 mm category NCIB in i place l Capital safety, stable income, inflation protection Shopping centres resilient investmen
Slide 34: Strategic Objectives: How Primaris Delivers
Strategic Objectives: How Primaris Delivers Generate stable and ggrowingg cash distributions – Distributions have increased 19% since IPO, from $0.0854 in July 2003 to $0.1016 in December 2007, $1.22 per annum Maximize unit value – Unit value increased 123% since IPO to 7/31/12 Expand asset ba
Slide 35: Total Returns
Total Returns Unitholder Cumulative Total Return (5-yr) (5 yr) 1.58 160% 1.41 140% 120% 1.09 1.03 100% 80% 0.66 60% 40% Dec 31 31, 2006 Dec 31 31, 2007 Dec 31 31, 2008 Dec 31 31, 2009 Dec 31 31, 2010 Dec 31 31, 2011 Primaris REIT (PMZ.UN) S&P/TSX Composite S&P/TSX Capped REIT 35
Slide 36: Key Ratios
Key Ratios 2012 2011 2010 Period end June March Dec. Sept. June March Dec. Sept. June March Operating FFO/unit diluted $ 0.376 $ 0.382 $ 0.407 $ 0.349 $ 0.341 $ 0.352 $ 0.416 $ 0.340 $ 0.346 $ 0.346 NI/unit diluted $ 0.438 $ 0.320 $ 1.664 $ 0.902 $ 0.509 $ 0.064 $ 4.479 $ 0.729 $ 0.792 $ 0.094 Distr
Slide 37: Key Ratios
Key Ratios Period end 2012 2011 2010 June March Dec. Sept. June March Dec. Sept. June March Occupancy rate‐committed 97.4% 96.7% 97.1% 96.5% 95.7% 96.3% 97.1% 97.0% 96.6% 96.7% Occupancy rate‐economic 95.9% 95.7% 96.5% 95.4% 94.8% 95.2% 96.7% 96.5% 96.0% 96.1% Sales sf $ 468 $ 466 $ 458 $ 453 $ 454
Primaris Real Estate Investment Trust — Q2 2012 Earnings Presentation on 6ix