PRO Real Estate Investment Trust · TSX:PRV.UN
PRO Real Estate Investment Trust — Q4 2022 Earnings Presentation
29 slides from PRO Real Estate Investment Trust's earnings presentation, Mar 22, 2023
Slide 1: Built for Sustainable Growth and Performance
BUILT FOR SUSTAINABLE GROWTH AND PERFORMANCE INVESTOR PRESENTATION MARCH 22, 2023 INVESTOR PRESENTATION | Q4 2022 1
Slide 2: Built for Sustainable Growth and Performance
BUILT FOR SUSTAINABLE GROWTH AND PERFORMANCE 2 INVESTOR PRESENTATION | Q4 2022 2
Slide 3: Disclaimer
DISCLAIMER About this Presentation This presentation is dated March 22, 2023 and is strictly intended to provide general information about PRO Real Estate Investment Trust (“PROREIT”) and its business. This presentation does not constitute an offer to sell or the solicitation of an offer to buy any
Slide 4: PROREIT (PRV.UN) at a Glance
PROREIT (PRV.UN) AT A GLANCE Owns and operates a high-quality commercial 130 PROPERTIES IN (1) $1.04B TOTAL ASSETS (1) 6.5M GROSS LEASABLE (1) real estate portfolio with a 10 PROVINCES AREA (SQ. FT) strong industrial focus, FOCUS ON CENTRAL AND located in mid-sized 98.5% $0.45 EASTERN CANADA (2) Can
Slide 5: High Quality Portfolio with Strong Industrial Focus
HIGH QUALITY PORTFOLIO WITH STRONG INDUSTRIAL FOCUS (1) INDUSTRIAL PORTFOLIO RETAIL PORTFOLIO OFFICE PORTFOLIO 79.9% of GLA 13.6% of GLA 6.5% of GLA > Multi-tenant and single-tenant > High-quality community > Mainly suburban and properties in high-demand service centres mixed use flex office industr
Slide 6: Taking PROREIT to the Next Level
TAKING PROREIT TO THE NEXT LEVEL WHAT DIFFERENTIATES US IS OUR ABILITY TO AMBITION Reach $2B in asset value as an industrial-focused REIT owning IDENTIFY AND BUILD A STABLE, LOW RISK PORTFOLIO IN and operating high-quality STRONG SECONDARY properties in mid-size Canadian MARKETS WHERE cities with st
Slide 7: Track Record of Driving Value
TRACK RECORD OF DRIVING VALUE BASE RENT BY ASSET CLASS (%) BASE RENT BY REGION (%) Retail Office Maritime Provinces Quebec Industrial Ontario Western Canada 11.2 10.4 15.5 11.9 24.9 20.8 9.8 9.8 47.2 50.4 27.9 27.5 63.9 68.8 Q4-2021 Q4-2022(1) Q4-2021 Q4-2022(1) GROWING EXPOSURE TO INDUSTRIAL SECTOR
Slide 8: Our Growth History
OUR GROWTH HISTORY AN INDUSTRIAL- FOCUSED REIT BACK IN > Reached $1B in asset GROWTH MODE value A BREAKOUT > 120 properties, > 130 properties, YEAR 6.6M sq. ft. GLA 6.5M sq. ft. GLA PROREIT CREATION > Internalization BY FORMER CANMARC > Acquisition of > Strategic JV agreement of asset MANAGEMENT > 9
Slide 9: Fully Internalized Property Management Function
FULLY INTERNALIZED PROPERTY MANAGEMENT FUNCTION > Acquired in 2018, Compass Commercial Realty is a long-established group operating autonomously $1.6B TOTAL VALUE 10M SQ.FT from Halifax (headquarters) OF MANAGED MANAGED PROPERTIES - Offices in Halifax, Moncton, Montreal, Ottawa and Toronto > Signifi
Slide 10: 2022 Strategic Joint Venture Agreement
2022 STRATEGIC JOINT VENTURE AGREEMENT > Joint venture agreement with > Two-portion transaction, immediately Crestpoint Real Estate Investments, accretive to earnings: a high-profile institutional real estate - PROREIT and Crestpoint each investor, completed on August 5, 2022 acquired a 50% interest
Slide 11: Two-Portion Joint Venture Transaction
TWO-PORTION JOINT VENTURE TRANSACTION PROREIT 50% ACQUISITION INTEREST PROREIT 50% INTEREST SALE Building City Province GLA (in sq.ft.) Building City Province GLA (in sq.ft.) 202 & 204 Brownlow Ave Dartmouth NS 213,789 26-28 Topple Dr Dartmouth NS 201,110 201 Brownlow Ave and 320-340 Wright Ave Dart
Slide 12: ESG Highlights
ESG HIGHLIGHTS ENVIRONMENTAL > Reducing paper consumption with implementation of 14 +99% 100% automated accounts payable system PROREIT-OWNED PROREIT’S PORTFOLIO PROREIT-OWNED PROPERTIES ARE BOMA CERTIFIED IS LOCATED IN AREAS SUBJECT TO A THOROUGH ASSESSMENT OF PROPERTIES IDENTIFIED AS LOW ALL ENVIR
Slide 13: Q4-2022 and Fiscal 2022 Highlights
Q4-2022 AND FISCAL 2022 HIGHLIGHTS > Total assets reached $1.04B, up 4.6% compared to Dec.31, 2021 > Net operating income1 up 24.8% for Fiscal 2022, compared to 2021 > Industrial Same Property NOI1 up 5.0% in Q4 year-over-year > Debt to Gross Book Value1 of 49.7% at Dec. 31, 2022, compared to 53.1%
Slide 14: Robust Internal Growth
ROBUST INTERNAL GROWTH Q4-2022 Fiscal Year 2022 Same Property NOI1 Number of Same Number of Same Year Ended December 31, 2022 YoY YoY by Asset Class Properties Properties December 31, 2022 Industrial 50 $7.1M ↑ 5.0% 27 $18.4M ↑ 4.3% Retail 34 $3.0M ↑ 1.3% 34 $11.7M ↑ 2.7% Office 8 $1.2M ↓ 10.6% 8 $4
Slide 15: Significant Value Embedded in Portfolio
SIGNIFICANT VALUE EMBEDDED IN PORTFOLIO(1) Weighted Avg Estimated Asset Class Leased GLA In-Place Net Market Net Spread Rent Rent(2) GROWTH OPPORTUNITIES Industrial 5,174,029 $7.78 $10.76 38% WITHIN PORTFOLIO: Retail 863,484 $14.36 $14.59 2% - Important mark-to-market rental rate upside Office 396,8
Slide 16: Active Asset Management Case Studies
ACTIVE ASSET MANAGEMENT CASE STUDIES FROM VACANT TO FULLY LEASED > 82,300 sq. ft industrial property purchased vacant for $4.5M in May 2021 > New 10-year lease secured in December 2021 with international aerospace tenant, starting October 2022 > Value nearly doubled, with building appraisal at $8.7M
Slide 17: High Quality, Low Risk Portfolio
HIGH QUALITY, LOW RISK PORTFOLIO OPERATING HIGHLIGHTS STAGGERED LEASE MATURITY PROFILE GLA 40.0% As at December 31, 2022 Base Rent 30.5% 35.0% Number of Occupancy GLA WALT(2) 30.0% Asset Class Properties (%)(1) (sq. ft.) (years) 25.0% 18.1% Industrial 86 99.2 5,215,015 3.9 16.6% 20.0% 13.7% 12.2% 15
Slide 18: Top Ten Tenants
TOP TEN TENANTS AS AT DECEMBER 331, 2022 # Tenant % of In-Place Base Rent GLA (sq. ft.) WALT (years) Credit Rating (1) 70.2% OF BASE RENT 1 4.2% 222,491 4.6 na/BBB-/BBB- FROM NATIONAL AND 2 4.1% 127,334 2.1 Ba1/BB+/BBB- GOVERNMENT TENANTS 3 3.6% 134,867 4.0 Aaa/AAA/AA+ 4 3.4% 326,061 3.6 Baa1/BBB/BB
Slide 19: Sound and Flexible Capital Structure
SOUND AND FLEXIBLE CAPITAL STRUCTURE At Dec. 31, 2022 MORTGAGE MATURITY PROFILE As of December 31, 2022 Debt to Gross Book Value(1) 49.73% Debt Maturing During Year Weighted Avg Interest Rate Payments of Principal Total debt $516.7M 200 4.91% 4.60% Total first mortgage debt weighted average rate 3.7
Slide 20: Key Strategic Pillars to Create Long-Term Value
KEY STRATEGIC PILLARS TO CREATE LONG-TERM VALUE INCREASE INDUSTRIAL FOCUS AND OPTIMIZE BALANCE SCALE DIVERSIFY BY TENANCIES SHEET AND CAPITAL AND GEOGRAPHY ALLOCATION > Reach $2B in asset value > Continue to focus on class B, > Reduce Debt to Gross in medium term high-quality commercial real Book Va
Slide 21: Experienced and Aligned Management and Board
EXPERIENCED AND ALIGNED MANAGEMENT AND BOARD SENIOR MANAGEMENT TEAM INDEPENDENT BOARD OF TRUSTEES John Levitt Independent Trustee and Chair of the Board Peter Aghar, CPA, CMA Independent Trustee James W. Beckerleg James W. Beckerleg Gordon Lawlor, CPA, CA Trustee, President and Chief Executive Offic
Slide 22: Why Invest in PROREIT
WHY INVEST IN PROREIT > High quality industrial-focused portfolio > Ample liquidity, stable cash flows with resilient low-risk tenants and strong balance sheet > Significant value embedded in portfolio > Fully internalized asset and > Clear strategy to grow earnings property management and value > E
Slide 23: Appendices
APPENDICES 23 INVESTOR PRESENTATION | Q4 2022 23
Slide 24: Returning to Market in Growth Mode in 2021
RETURNING TO MARKET IN GROWTH MODE IN 2021 > Accretive acquisition of 34 institutional-caliber +1.2M STRATEGICALLY DEPLOYING SQ. FT OF GLA industrial assets for CAPITAL TO $297M in 2021 CREATE LONG-TERM - 21 properties in Atlantic Canada - 10 properties in Winnipeg, 6% AVERAGE VALUE Manitoba CAPITAL
Slide 25: 2021 Transactions
2021 TRANSACTIONS Number of GLA Transaction Capitalization Date closed City Properties (in sq.ft) Price (in $ Rate Highlight million) Acquisitions 100% interest in three small bay industrial April 23, 2021 Ottawa (ON) 3 283,495 49.2 6.1 buildings strategically located withing core industrial submark
Slide 26: 2021 Financing Highlights
2021 FINANCING HIGHLIGHTS EQUITY DEBT > April 2021: $50M private > $71.4M in mortgage > CREDIT FACILITY placement with Bragg financing at lower EXPANDED ON Group, a prominent rates and extended IMPROVED Canadian private terms TERMS TO $60M investor > Eliminated expensive > October 2021: $83.3M alter
Slide 27: Strong Growth Since Inception
STRONG GROWTH SINCE INCEPTION TOTAL ASSETS AND OCCUPANCY PROPERTY REVENUES ADJUSTED FUNDS FROM OPERATIONS(3) ($ Millions) ($ Millions) ($ Millions) 97.2 1100 98.5% 100.0 40.0 98.4% 1,040.0 90.0 990.0 900 77.7 31.3 80.0 69.8 30.0 70.0 700 25.1 98.4% 98.0% 57.6 22.4 60.0 634.7 634.5 20.4 98.2% 50.0 20
Slide 28: We've Done It Before
WE’VE DONE IT BEFORE 100% S&P/TSX Capped REIT Index CANMARC REIT 75% 50% 25% 0% May-2010 Jul-2010 Sep-2010 Nov-2010 Jan-2011 Mar-2011 May-2011 Jul-2011 Sep-2011 Nov-2011 Jan-2012 > Former CANMARC REIT management > Diversified REIT with national portfolio > 143 properties > Acquired by Cominar in 201
Slide 29: Thank you
Thank you INVESTOR PRESENTATION | Q4 2022 29
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