Choice Properties Real Estate Investment Trust · TSX:CHP.UN
Choice Properties Real Estate Investment Trust — Q4 2023 Earnings Presentation
74 slides from Choice Properties Real Estate Investment Trust's earnings presentation, Feb 15, 2024
Slide 1: Delivering Today. Building for the Future.
Delivering Delivering Today. today. Building Buildingfor forthe theFuture. future. Q4 2023 Investor presentation choiceproperties
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: Contents
Contents • 2023 Performance • 2023 Key Achievements 2023 Overview • 2023 Development Deliveries • Continued Outperformance • Creating Enduring Value Canada's Preeminent REIT • Proven Strategic Framework • Our Near-Term Focus • Three Strategic Asset Classes • Winning Retail Portfolio Market Leading P
Slide 4: 2023 Overview
2023 Overview ChoiceProperties
Slide 5: 2023 Performance
2023 Performance Q4 2023 Q4 2022 YTD 2023 YTD 2022 $0.255/unit $0.241/unit $1.003/unit $0.964/unit FFO +5.8% +4.0% $0.176/unit $0.175/unit $0.827/unit $0.804/unit AFFO +0.6% +2.9% Same-Asset NOI, $236.9M $227.3M $932.1M $891.1M Cash Basis +4.2% +4.6% 98.0% 97.9% Occupancy +0.1% Adjusted Debt to EBIT
Slide 6: 2023 Key Achievements
2023 Key Achievements For the year ended December 31,2023 Capital Recycling Program Delivering on our Full Year Outlook • Disposition of $334.6M non-core assets • Acquisition of $284.0M of retail and industrial 2023 Outlook 2023 Actual Achieved properties SA-NOI growth(1) 4%-5% 4.6% / Operational Ex
Slide 7: 2023 Development Deliveries
2023 Development Deliveries We advanced our industrial portfolio, delivering 1.6M sq. ft.(2)of new generation logistics facilities Transferred Expected Completed Total stabilized Projects GLA (sq. ft.) Investment yield Retail(1) 10 0.2M $35.8M 7.7% Element Industrial(2) 3 1.6M 200.8M 8.4% Mixed-Use
Slide 8: Continued Outperformance
Continued Outperformance Through consistency and discipline, Choice has delivered since IPO and through economic downturns and ongoing market uncertainty Total Annualized Return Since Choice IPO 9.1 % annualized return 2013 Choice IPO Total Annualized Return Since CREIT Acquisition 9.1 % annualized
Slide 9: Canada's Preeminent REIT
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Slide 10: Canada's Preeminent REIT
Canada’s Preeminent REIT We lead where it matters most Unmatched Strategic Relationship with Largest in Canada(1) Necessity-Based Portfolio Canada’s Leading Retailer 705 high-quality properties(2) 83% Necessity-based retail portfolio'3) 57% Loblaw tenancy(4) 3 strategic asset classes 37M sq.ft. Groc
Slide 11: 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 have a proven strategy to maximize the value of our portfolio and create enduring
Slide 12: Proven Strategic Framework
Proven Strategic Framework Creating Preservation Stable and growing Increases in NAV and GOALS Enduring Value: of capital cash flows distribution overtime Maintaining Care 1 market-leading portfolio PRIORITIES Ownership VALUES Sustaining 2 operational excellence Respect CORE Delivering 3 Values Exce
Slide 13: Our Near-Term Focus
Our Near-Term Focus 1 Maintaining 2 Sustaining 3 Delivering Priorities market-leading operational 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 operations capabilit
Slide 14: Market Leading Portfolio
Market Leading Portfolio ChoiceProperties
Slide 15: Three Strategic Asset Classes
Three Strategic Asset Classes Strategically positioned across three asset classes Retail Industrial Mixed-Use & Residential Nd, Cash Basis(1) 79% 17% 4% Income Producing Properties Asset Value(2) 70% 25% 5% Predominately Flexible well- Transit oriented necessity-based located industrial mixed-use an
Slide 16: A Snapshot of Choice
A Snapshot of Choice 705 Income Producing Properties(2) Number of Properties sq.ft. GLA(3) Value(4) Retail 573 44.7 $11.0B Industrial 122 19.7 3.9B Mixed-Use & 10 1.7 0.8B Residential Properties Under -- -- 0.9B Development Total 705 66.1 $16.6B (1) Calculated as a % of cash NOI for the three months
Slide 17: Stable and Consistent Occupancy
Stable and Consistent Occupancy Period-End Occupancy(1) Occupancy by Asset Class Retail 97.7% 9 8 .9 % 9 8 .9 % 98.1% 9 8 .6 % 97.9% 97.7% 97.7% 97.1% 9 8 .0 % 97.2% Industrial 99.0% Mixed-Use & 94.2% Residential(2) Total 98.0% (1) Effective the fourth quarter of 2023, building area associated with
Slide 18: Long-Term Leases
Long-Term Leases Lease profile provides cash flow stability Lease Expiry by Year(1) Weighted Average Lease Term(1) Loblaw Ancillary Total 6.5 5.4 6.0 years years years (1) Effective the fourth quarter of 2023, building area associated with the Trust’s ground leases has been included in occupancy and
Slide 19: Winning Retail Portfolio
inning Retail Portfolio Necessity-based, well-located assets supported by strong anchor tenants
Slide 20: Winning Retail Portfolio
Winning Retail Portfolio Necessity-based, well-located assets supported by strong anchor tenants 44.7M 573 sq. ft. of GLA(1) Properties(2) $11.0B 97.7% Fair value Occupancy(1) 2 (Proportionate) (1) Includes 0.6 million sq. ft. that represents the building area on properties where the Trust has lease
Slide 21: Strong Necessity-Based Retail Anchor Tenants
Strong Necessity-Based Retail Anchor Tenants Reliable and stable cash flow +64% of revenue from Loblaw banners +68% of revenue is from grocery and pharmacy +83% of revenue from necessity-based retail Calculated as a % of the retail segment’s gross rental revenue as at December 31, 2023 Q4 2023 • Win
Slide 22: Winning Retail Footprint
Winning Retail Footprint 85% of properties located at key intersections Square Footage Necessity- NOI(2) (M)(1) based(3) Neighbourhood Centres 39.3 88% 89% Power Centres 5.4 12% 36% Total 44.7 83% (1) Includes 0.6 million sq. ft. that represents the building area on properties where the Trust has le
Slide 23: Strong Tenant Retention
Strong Tenant Retention Reliable and stable cash flow Lease Expiry by Year(1) 97.7% in-place Occupancy(1) • Staggered renewals • High-probability of renewal • Strong-covenant tenants (1) Includes 0.6 million sq. ft. that represents the building area on properties where the Trust has leased the under
Slide 24: High-Demand Industrial
High-Demand Industrial High-quality generic industrial assets in key distribution markets
Slide 25: High-Demand Industrial
High-Demand Industrial High-quality generic industrial assets in key distribution markets 19.7M 99.0% sq. ft. of GLA(1) Occupancy(1) S3.9B 122 Fair value Properties(2) (Proportionate) (1) Includes 1.2 million sq. ft. that represents the building area on properties where the Trust has leased the ’ un
Slide 26: High-Demand Industrial
High-Demand Industrial 86%of industrial assets are generic and nigh quality Square Footage (M)(2) % of Total Distribution 16.9 86% Warehoused 14% Total GLA 19.7 Kitchener/Cambridge/Waterloo (1) Calculated as a % of cash NOI for the three months ended December 31, 2023. (2) Includes 1.2 million sq. f
Slide 27: Resilient Industrial Tenant Base
Resilient Industrial ~ Tenant Base Top 10 Tenants 1 Loblaw 2 Amazon 3 Canada Cartage 4 Wonderbrands Inc. 5 Pet Valu 6 NFIIPD 7 Uline Canada Corporation 8 Canadian Tire 9 Kimberly-Clark 10 Alberta Gaming, Liquor and Cannabis (1) Calculated as a % of the industrial segment’s gross rental revenue as at
Slide 28: Significant Embedded Growth
Significant Embedded Growth Major Market Breakdown Market Choice $9.06 Avg. Rent(2) Avg. Rent(1) Vancouver $21.61 $12.09 Choice avg. in-place rent(1) Calgary $11.33 $8.13 $16.25 Greater Toronto Area $18.25 $8.62 Market avg. rent(2) Greater Montreal Area $16.42 $9.88 (1) Average in-place rent per squ
Slide 29: Mixed-Use & Residential
Mixed-Use & Residential Purpose built rental in key markets
Slide 30: Mixed-Use & Residential
Mixed-Use & Residential Purpose-built rental in key markets 1.7M 10 sq. ft. of GLA(1) Properties $0.8B 94.2% Fair value Occupancy(2) (Proportionate) (1) 1.7 million sq. ft. of GLA includes 0.6 million sq. ft. associated with Choice’s 772 residential units. (2) Occupancy shown is for retail and offic
Slide 31: Mixed-Use & Residential Properties
Mixed-Use & Residential Properties West Block Element Liberty House The Brixton Mixed-Use Residential Residential Residential Toronto, ON Ottawa, ON Toronto, ON Toronto, ON GLA (sq. ft.) 259K Units 252 units Units 440 units Units 397 units Ownership 100% Ownership 50% Ownership 50% Ownership 50% Maj
Slide 32: Transformational Development
Transformational Development
Slide 33: 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 with Transforming communities with maintaining portfolio quality 6.0M sq. ft of high-qua
Slide 34: 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 Focus
Slide 35: Development Pipeline
Development Pipeline 16.8M sq.ft. Active Zoned and Ready In Planning Total(1)(2) sq. ft. 2.0M sq. ft. 8.0M sq. ft. 6.8M sq. ft. 16.8M Retail 0.1 M Retail 0.2M Retail n/a Retail 0.3M Industrial 1.8M Industrial 4.2M Industrial n/a Industrial 6.0M Mixed-Use Mixed-Use Mixed-Use Mixed-Use & Residential 0
Slide 36: On the Move
On the Move Strengthening our portfolio with active development projects 14 Choice Caledon Business Park Projects under active (Buildings A&H) Mount Pleasant Village development Caledon, ON Brampton, ON $479M Estimated total investment Rendering Rendering^ 2.0M sq. ft. estimated upon completion(1) 1
Slide 37: Industrial Development Pipeline
Industrial Development Pipeline Immense near-to-medium term opportunity within active and in planning developments 228 Net Developable Acres(1) 6.0M 1.0M sq.ft(1) sq. ft. zoned(1) 2024 completions Choice Caledon Business Park Caledon, on 2 projects 5.0M sq.ft.(1) (1) At the Trust's Share. 2025+ comp
Slide 38: Mixed-Use and Residential Development Pipeline
Mixed-Use and Residential Development Pipeline Significant future growth Golden Mile 25 Photography Dr. Toronto, ON Toronto, ON 13 projects in planning 10.4M sq. ft. Potential Density(1) 3,600 total units 19 acres 2,356 total units 7.7 acres 3.2M sq. ft. 2.1 M sq. ft. 12,014 Multiple phases 1 phase
Slide 39: Prudent Financial Management
Prudent Financial Management
Slide 40: 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 • Improving quality through balanced capital recycling Preservation 1 Maintaining • Delivering best-in-cl
Slide 41: Significant Financial Capacity
Significant Financial Capacity 1.7x below peer BBB (High) average DBRS credit rating $12.7B unencumbered assets(1) $1.5B unused portion of revolving credit facility(1) (1) As at December 31, 2023. Adjusted Debt to EBITDAFV EBITDAFV(3)(4) (2) Source: Q3 2023, RBC Research Reports. (3) Represents a no
Slide 42: Capital Structure Targets
Capital Structure Targets Maintaining financial stability Mortgages and $1.6B 9% Secured Facilities^ Q4 2023 Target Range Unsecured $5.7B Unused portion of Debentures $1.5B > $1.0B revolving credit facility Unsecured Credit 31% Facility $0.0B Adjusted debt to ($1.5B total capacity) 7.2x -7.5x EBITDA
Slide 43: Debt Maturity Profile
(1) Debt Maturity Profile 4.03% 5.7 Well-balanced debt ladder Years WAIR(2) WATM(2) (1) As of December 31, 2023, on a proportionate share basis. (2) Reflects senior unsecured debentures and fixed-rate secured debt. ChoiceProperties
Slide 44: 2023 Performance and 2024 Outlook
2023 Performance and 2024 Outlook 2023 Actual 2024 Outlook SA-NOI growth(1) 4.6% 2.5%-3.0% FFO/unite(1) $1,003 $1.02-51.03 Distribution / unit $0.75 $0.76 (1) Represents a non-GAAP measure. ChOICGPrOpertieS Q4 2023 • 2023 Performance and 2024 Outlook 44
Slide 45: Environmental, Social & Governance Program
Environmental, Social & Governance Program
Slide 46: Building Healthy, Resilient Communities
Building Healthy, Resilient Communities Commitment to ESG practices is ESG program is focused integral to our purpose of around two pillars which creating enduring value. align with stakeholder interests: Aspire to develop healthy, resilient communities through our Fighting dedication to social, eco
Slide 47: 2023 Highlights
2023 Highlights Net-Zero Culture Placemaking Completed asset-specific Named one of Greater Toronto's Top The introduction of Vice net-zero transition plans for Employers (2023 & 2024) in recognition of President, Sustainability and all income producing programs such as DEI-focused group benefits Pla
Slide 48: Appendices
Appendices ChoiceProperties
Slide 49: Transformational Industrial Development
Transformational Industrial Development
Slide 50: 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 • Phase 1 underway: 90-acre ground lease with Loblaw • Partner: Rice Group Q
Slide 51: Active Residential Development
Active Residential Development
Slide 52: 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 Q4 2023 • Appendices • Active Residential Development 52
Slide 53: Mixed-Use & Residential in Planning
Mixed-Use & Residential in Planning
Slide 54: 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 Q4 2023 • Appendices • Mixed-Use & Residential in Planning 54
Slide 55: 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 Q4 2023 • Appendices • Mixed-Use & Residential in Planning 55
Slide 56: Golden Mile Phase 1, 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 Q4 2023 • Appendices • Mixed-Use & Residential in Planning 56
Slide 57: Broadview Ave., Toronto, ON
720 Broadview AVE. • 3.3-acresite Toronto,ON • 500 units • 1 residential building • Directly across from Broadview TTC subway station • New grocery store • Dedicated public park Q4 2023 • Appendices • Mixed-Use & Residential in Planning 57
Slide 58: 2280 Dundas St. W - Toronto, ON
2280 Dundas St. W - Toronto, ON Q4 2023 • Appendices • Mixed-Use & Residential in Planning 58
Slide 59: 2280 Dundas St. W, Toronto, ON
2280 Dundas st.W • 13-acre site in Downtown Toronto Toronto, ON • Major transit hub (TTC, GO Train, UP Express) • Large mixed-use community • High density residential, retail and office Q4 2023 • Appendices • Mixed-Use & Residential in Planning 59
Slide 60: 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 Q4 2023 • Appendices • Mixed-Use & Residential in Planning 60
Slide 61: 25 Photography Dr. - Toronto, ON
25 Photography Dr. - Toronto, ON Q4 2023 • Appendices • Mixed-Use & Residential in Planning 61
Slide 62: 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 Q4 2023 • Appendices • Mixed-Use & Residential in Planning 62
Slide 63: Warden Ave., Toronto, ON
685 Warden AVE Toronto, • 6.5-acre site O • 1,500 units N • 6 residential buildings • Directly adjacent to Warden TTC subway station • Dedicated public park Q4 2023 • Appendices • Mixed-Use & Residential in Planning 63
Slide 64: 985 Woodbine Ave. - Toronto, ON
985 Woodbine Ave. - Toronto, ON Q4 2023 • Appendices • Mixed-Use & Residential in Planning 64
Slide 65: 985 Woodbine Ave., Toronto, ON
985 Woodbine Ave. • 1.6-acre site in Toronto, ON Downtown Toronto • Two mid-rise rental residential buildings • 646 units • Directly adjacent to Woodbine TTC subway station • Grocery retail at-grade Q4 2023 • Appendices • Mixed-Use & Residential in Planning 65
Slide 66: 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 Q4 2023 • Appendices • Mixed-Use & Residential in Planning 66
Slide 67: 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 68: 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 Q4 2023 • Appendices • Immense Value Opportunity 68
Slide 69: 17 Lies St., Toronto, ON
17 Lies st. Toronto , ON • 6-acre site • Close proximity to Queen Streetcar 04 2023 • Appendices • Immense Value Opportunity 69
Slide 70: 10 Lower Jarvis St., Toronto, ON
10 Lower Jarvis St. • 4-acresite Toronto, ON • Core downtown location Q4 2023 • Appendices • Immense Value Opportunity 70
Slide 71: Greater Vancouver Area
Greater Vancouver Area • 19 properties in the GVA • Significant long-term development potential. Retail 16 Industrial 3 19 Q4 2023 • Appendices • Immense Value Opportunity 71
Slide 72: North Road, Coquitlam, BC
North Road • 7.8-acre site in city Coquitlam,DC centre • Access to two lines of Vancouver SkyTrain • Revitalization into mixed-use community • High density residential and retail 04 2023 • Appendices • Immense Value Opportunity 72
Slide 73: Montréal
Montréal • 38 properties in the GN • Significant long-term development potential Retail 36 Industrial 2 38 Q4 2023 • Appendices • Immense Value Opportunity 73
Slide 74: ChoiceProperties
ChoiceProperties
Choice Properties Real Estate Investment Trust — Q4 2023 Earnings Presentation on 6ix