DREAM Unlimited Corp. Class A · TSX:DRM
DREAM Unlimited Corp. Class A — Dream Industrial REIT — Investor Presentation (September 2020)
46 slides from DREAM Unlimited Corp. Class A's investor presentation, September 2020
Slide 1: Investor Presentation September 2020
Investor Presentation September 2020
Slide 2: Presentation Overview
Presentation Overview Section 1 Our Company & Strategy Section 2 Business Update Section 3 Investment Highlights Section 4 Portfolio Overview Section 5 Financial Highlights Appendix 1 Environmental, Social and Governance Appendix 2 European Strategy Appendix 3 Market Fundamentals
Slide 3: Our Company & Strategy
Our Company & Strategy
Slide 4: Company Snapshot
Company Snapshot 26M SF 262 Dream Industrial REIT (DIR) owns and operates a GLA Properties diversified portfolio of logistics, warehousing and urban light industrial properties across Canada, U.S. and Europe, supported by a platform with a proven track record of long-term value creation 96% 4.1 yrs
Slide 5: Our Strategy
Our Strategy Global Acquisition Selective Asset Conservative Platform Capital Recycling Management Financial Policy Local on the ground teams Selective recycling program Drive organic NOI and NAV Maintain conservative with a strong track record and redeployment of growth by executing leverage, build
Slide 6: Local Platforms + Strategic Relationships
Local Platforms + Strategic Relationships Canada Europe United States Dream provides expertise on Dream provides a dedicated local PAULS Corp. provides DIR a local U.S. acquisitions, strategic transactions, acquisition and asset management operating and capital management capital and portfolio alloc
Slide 7: Portfolio Transformation
Portfolio Transformation Adding scale and increasing presence in target markets DIR announces European expansion, completes $425M of acquisitions across Canada and Europe, with an additional $136M of assets across Canada and Europe in exclusivity/under contract DIR upgrades quality of portfolio thro
Slide 8: Significant Value Creation for Unitholders
Significant Value Creation for Unitholders Total return since execution of strategic initiatives COVID-19 120% 100% 80% 66% 60% 40% 20% 17% 12% 0% -20% Jan-17 Apr-17 Jul-17 Oct-17 Jan-18 Apr-18 Jul-18 Oct-18 Jan-19 Apr-19 Jul-19 Oct-19 Jan-20 Apr-20 Jul-20 DIR S&P/TSX REIT Index S&P/TSX Composite In
Slide 9: Business Update
Business Update
Slide 10: September 2020 Business Update
September 2020 Business Update • As of September 4, collected approximately 98% of recurring contractual gross rents due for Q2 2020 and July 2020 after adjusting for agreed-upon deferrals and Canada Emergency Commercial Rent Assistance (“CECRA”) Operations update • The Trust has agreed to rent defe
Slide 11: Continuing to High-Grade the Portfolio
Continuing to High-Grade the Portfolio Closed/waived all conditions on two assets in Germany • DIR is also under contract or in exclusive negotiations on five assets across the Netherlands, Greater Toronto Area, and Ottawa • Combined purchase price totals ~$112 million, representing a going-in cap r
Slide 12: Investment Highlights
Investment Highlights
Slide 13: Investment Highlights
Investment Highlights Secure cash flows underpinned by high quality Multiple drivers of cash flow and NAV growth portfolio and strong balance sheet Attractive distribution yield of 6.4%1, ~170 bps higher Increase FFO per unit by over $0.03 by leasing ~0.6M sf of than peer average2 vacancy in the GTA
Slide 14: Well-Diversified Portfolio by Asset Type
Well-Diversified Portfolio by Asset Type Distribution Urban Logistics Light Industrial 43% of total IP Value 39% of total IP Value 18% of total IP Value Europe, Europe, $105M, 9% $36M, 7% Europe, $146M, U.S., $75M, 12% 7% Canada,$ 569M, 46% U.S., $528M, Canada, 42% $949M, Canada, 84% $490M, 93% Port
Slide 15: Tenant Base Highly Diversified Across Multiple Industries
Tenant Base Highly Diversified Across Multiple Industries Recreational Services, 2% Agriculture, 1% Energy, 1% Healthcare, 2% Diversified Industries, 15% Miscellaneous, 3% Construction (non-residential), 5% Other Services, 5% Residential, 12% Technical Services, 7% Paper, Printing, and Packaging, 7%
Slide 16: Attractive Mix of Large and Small Tenants
Attractive Mix of Large and Small Tenants Tenants occupying <10K sf ✓ Diversified tenant base with approximately 1,150 tenants 4K sf 15% 714 ✓ Top ten tenants represent approximately 15% of Gross Rental Revenue and Avg. of annual Number of include high-quality investment-grade covenants tenant size
Slide 17: Healthy Outlook for Internal Growth
Healthy Outlook for Internal Growth In-place and committed base rent (psf) Estimated market rent (psf) $10.00 $8.04 $7.38 $7.50 € 5.16 € 5.39 $5.00 US$4.32 US$3.95 $2.50 $0.00 Canada U.S. Europe Market vs. +8.9% +9.4% +4.5% In-place rent - % Ann. contractual 2.0% 2.5% 1.5% rent growth With contractu
Slide 18: Strong Balance Sheet Provides Stability and Opportunity
Strong Balance Sheet Provides Stability and Opportunity to Pursue Value-Enhancing Growth Net Debt To Assets Net Debt To Adjusted EBITDAFV 8.4x 8.4x 7.8x 7.2x Net Debt To Adjusted EBITDAFV Net Debt To Assets 5.3x 5.4x 53.8% 52.5% 4.3x 47.9% 43.5% 28.2% 28.1% 23.7% ~20% leverage reduction since year-e
Slide 19: Transitioning Towards Optimal Capital Structure
Transitioning Towards Optimal Capital Structure Q2 2017 Q2 2020 Conceptual Debt Mix1 28% 25% 3.8% 3.6% ~2% 48% Weighted Avg. Interest Weighted Avg. Interest Weighted Avg. Interest 52% Rate Rate Rate 8% 67% 72% ` North American Debt European Debt Equity European platform will allow us transform our d
Slide 20: Our Portfolio Overview & Platform
Our Portfolio Portfolio Overview& Platform
Slide 21: Geographically Diverse Portfolio
Geographically Diverse Portfolio* Canada United States Europe Total # Properties 198 29 35 262 IP Value $2.0 Billion $602 million $287 million $2.9 Billion WALT 4.0 years 4.0 years 5.4 years 4.1 years Committed 96.4% 94.0% 95.6% 95.6% Occupancy * As at June 30, 2020 21
Slide 22: Investment Strategy to Increase the Overall Quality of Our Portfolio
Investment Strategy to Increase the Overall Quality of Our Portfolio 1 High Quality Focused on allocating capital towards investments that improve the overall quality of our portfolio 2 Industrial properties that are attractive to a wide variety of tenants with various business uses. We are Function
Slide 23: Asset Management
Asset Management Disciplined investment strategy to grow free cash flow and net asset value 1 Combined over 50 years of experience acquiring and managing industrial real estate between Dream Experienced Platforms and PAULS Corp 2 Identify select opportunities to recycle assets within our portfolio a
Slide 24: Portfolio Transformation
Portfolio Transformation Improving asset quality 16M sf 12K sf 21.6 ft. 26M sf 22K sf 24.5 ft. Avg. tenant Avg. clear Avg. tenant Avg. clear GLA GLA size height size height YE 2016 Q2 2020 24% 67% 42% 71% ABR* from 6.7% Net rental ABR* from 5.9% Net rental tenants IFRS Cap rate income tenants IFRS C
Slide 25: Portfolio Transformation - Quality
Portfolio Transformation - Quality 9601 156th Avenue, Grand Prairie 131 Ilsley Avenue, Halifax 1602 Tricont Avenue, Whitby 1250-1280 Humber Place, Ottawa 439 Sovereign Road, London 40 Thornhill Drive, Halifax 8860 Smith’s Mill Road, Columbus Dutch Portfolio, Netherlands We recycled over ~$280 millio
Slide 26: Portfolio Transformation – Geography
Portfolio Transformation – Geography % of total IP Value Q2 2017 Q2 2020 Target Portfolio Mix1 Ontario/GTA 28% 33% 30%-40% Quebec 18% 15% 10%-15% U.S. - 21% 15%-25% Europe - 10% 20%-30% Western Canada 39% 21% ~10% Eastern Canada 15% - - We have significant scope and reach to execute on the best indu
Slide 27: Initiating Developments
Initiating Developments 1 Dream and PAULS Corp have an extensive track record in commercial development, with PAULS Corp Experienced Partners having developed over 16 million square feet of real estate across Canada and the U.S. (including Las Vegas), DIR will not be required to pay a promote to the
Slide 28: Financial Highlights
qo if cc oc [etn ra | ; i 223
Slide 29: Consistently High Occupancy
Consistently High Occupancy Committed Occupancy Committed Occupancy - Western Canada Retention Ratio 100% 100% 80% 80% 81% 80% 78% 73% 74% Committed Occupancy 70% 71% Retention Ratio 67% 63% 60% 60% 96% 96% 96% 97% 96% 98% 98% 97% 95% 97% 95% 95% 95% 96% 96% 94% 96% 95% 40% 40% 20% 20% 2012 2013 201
Slide 30: Limited Near-Term Lease Maturities
Limited Near-Term Lease Maturities* Expiries - U.S. Expiries - Europe Expiries - Canada Committed GLA 100.0% 80.0% 60.0% % of GLA 90.3% 97.0% 40.0% 20.0% Expiries - Europe, 0.1% Expiries - Europe, 0.6% Expiries - U.S., 0.4% 8.0% Expiries - U.S. 2.5% 1.1% 0.0% Remainder of 2020 2021 WALT of 4.1 years
Slide 31: Strong Unencumbered Asset Pool Increases Balance Sheet Flexibility
Strong Unencumbered Asset Pool Increases Balance Sheet Flexibility $1.5B $1.2B $0.1B $0.3B $1.0B $0.3B $0.4B $0.5B $0.1B $0.0B YE 2019 2020 Acquisitions (Q2-2020 IFRS Prepaying mortgage debt Converting credit facility to Repayment of mortgage debt Unencumbered Value) unsecured asset pool Unencumbere
Slide 32: Well-Staggered Debt Maturity Profile
Well-Staggered Debt Maturity Profile $750 Millions CAD 5.6 years 3.6% WATM1 WAIR2 $66M $500 $38M Cash-on-hand3 $250 $473 $21M $16M US$250M Credit facility availability $19M $11M $112 $98 $44 $0 3 Remainder of 2020 2021 2022 2023 2024+ Balance due at maturity Principal repayments Ample liquidity avai
Slide 33: Opportunity to Reduce Cost of Capital and Further Improve Balance Sheet Quality
Opportunity to Reduce Cost of Capital and Further Improve Balance Sheet Quality 1 Cross Currency Hedging Over the medium-term, increase Euro denominated debt while reducing debt in Canada to reduce our borrowing cost and currency risk 2 5-year Euro debt ~150 bps lower on a comparative basis than Nor
Slide 34: Appendices
Appendices
Slide 35: Environmental, Social and Governance
Environmental, Social and Governance
Slide 36: Sustainability Highlights
Sustainability Highlights 7 239 MW Energy efficiency Energy efficiency Tenant Engagement Community Engagement National sponsor 449 gifts ~1,300+ shoeboxes ~$11,000 ~$700,000 Tenant Focused – Employee Development ~$302,000 Employee Well Being Peer Recognition 75% 25% *Social highlights are based on a
Slide 37: Experienced Management Team and Strong Operating Platform
Experienced Management Team and Strong Operating Platform Brian Pauls Lenis Quan Alexander Sannikov Chief Executive Chief Financial Chief Operating Officer Officer Officer 23 years 20 years 15 years Experience Experience Experience ~80 employees dedicated to acquisitions, portfolio management, accou
Slide 38: European Strategy Overview
European strategy overview 38
Slide 39: Relative Logistics Market Size – Europe Versus North America
Relative Logistics Market Size – Europe Versus North America Population Density (People Per km2)1 Comparison – Europe Versus U.S. 511 Europe United States 237 3.4 Billion 9.8 Billion Square Feet Square Feet 36 4 Canada United States Germany Netherlands 4.3 sf Per Capita 30 sf Per Capita Higher popul
Slide 40: Why Invest in Europe?
Why Invest in Europe? 1 Low supply of quality light industrial and logistics product as well as increasing user demands are Low Supply expected to support healthy rental rate growth 2 Lower levels of e-commerce penetration compared to U.S. and Canada are expected to result in strong E-Commerce relat
Slide 41: Our Unique Advantages in Europe
Our Unique Advantages in Europe 1 Dream has been active in Europe since 1998 2 In 2011, Dream Global REIT was created and quickly amassed a high quality Leveraging expertise, portfolio of European office + industrial assets deep local relationships with tenants, lenders and 3 brokers to support The
Slide 42: Market Fundamentals
Market Fundamentals
Slide 43: E-commerce Demand Continuing to Accelerate
E-commerce Demand Continuing to Accelerate Population growth in our target markets… … supporting increased e-commerce penetration 40% 16.0% 14.7% 30% 30% 14.1% 12.0% 12.1% 20% 16% 8.9% 11% 8.0% 7.8% 10% 8% 7.5% 0% 4.0% 2010 2015 2020 2025 2030 2035 2017 2018 2019 2020 2021 2022 Canada US Germany Net
Slide 44: Industrial Fundamentals Poised to Strengthen Further
Industrial Fundamentals Poised to Strengthen Further Declining availability… …leading to higher rental rates 10% 40% 9.4% 8.3% 33.8% 8% 7.2% 30% 27.6% 6% 5.5% 20% 4.3% 4% 2.9% 10.6% 10% 2% 0% 0% 2014 2015 2016 2017 2018 2019 2014 2015 2016 2017 2018 2019 Canada US Europe Canada US Europe Driven by i
Slide 45: Thank you
thank you.
Slide 46: Forward Looking Information Non-GAAP Measures
Forward Looking Information This investor presentation may contain forward-looking information within the meaning of applicable securities legislation. Forward-looking information generally can be identified by the use of forward-looking terminology such as “outlook”, “objective”, “may”, “will”, “ex
Dream Industrial REIT — Investor Presentation (September 2020) on 6ix