Ct Real Estate Investment Trust · TSX:CRT.UN
Ct Real Estate Investment Trust — Q4 2022 Earnings Presentation
41 slides from Ct Real Estate Investment Trust's earnings presentation, February 2023
Slide 1: Reliable. Durable. Growing. Q4 2022 Investor Presentation
RELIABLE. DURABLE. GROWING. Q4 2022 Investor Presentation
Slide 2: Disclaimer
DISCLAIMER Forward Looking Statements This presentation contains forward-looking information that reflects management’s current expectations relating to matters such as future financial performance and operating results of CT Real Estate Investment Trust (“CT REIT” or the “REIT”). Forward-looking st
Slide 3: Executive Team
EXECUTIVE TEAM Highly experienced with in-depth market knowledge Kevin Salsberg Former EVP and CIO Plaza Retail REIT President & CEO Former COO, KEYreit Lesley Gibson CPA, CA Former CAO, Choice Properties REIT SVP & CFO Former EVP Finance, Primaris Retail REIT Jodi Shpigel Former SVP Development, Fi
Slide 4: Strategic Overview
STRATEGIC OVERVIEW 4
Slide 5: Investment Highlights
INVESTMENT HIGHLIGHTS Canada’s premier Net Lease REIT AFFO/Unit CAGR(1)(2): 4.5% Occupancy Rate: 99.3% Annualized base NAV/Unit CAGR(1): 4.0% minimum rent from Distribution/Unit CAGR(1): 4.1% investment grade tenants: 96.1% 30.1M Sq. Ft. 8.6 Years Irreplaceable National Portfolio One of the longest
Slide 6: Irreplaceable National Portfolio
IRREPLACEABLE NATIONAL PORTFOLIO 373 6.3 TOTAL PROPERTY COUNT YUKON ~$ 30.1M B 1 SQUARE FEET OF GLA1 Fair market value NORTHWEST TERRITORIES ~$6.8B FAIR MARKET VALUE 2 NUNAVUT NEWFOUNDLAND AND LABRADOR BRITISH COLUMBIA 8 28 ALBERTA 55 SASKATCHEWAN MANITOBA 8 13 ONTARIO QUEBEC 78 NOVA SCOTIA 144 19 P
Slide 7: High Quality Portfolio
HIGH QUALITY PORTFOLIO 45% of Base Minimum Rent from: Vancouver, Edmonton, Calgary, Toronto, Ottawa and Montreal (VECTOM) BY MARKET(1)(2) BY ASSET TYPE(1) % OF ANNUALIZED BASE MINIMUM RENT % OF TOTAL GLA All figures as at December 31, 2022. (1) Excludes development properties and includes Canada Squ
Slide 8: An Exceptional Major Tenant
AN EXCEPTIONAL MAJOR TENANT Canadian Tire Corporation is one of Canada’s most admired and trusted companies $8.5B ▪ 100% Brand Recognition ▪ Celebrated 100 years in Market Capitalization business in 2022 ▪ Positive annual $17.8B comparable store sales growth for the last ~10 years Consolidated Reven
Slide 9: Top Tenants
TOP 10 TENANTS(1) High quality tenant base Tenant % of Annualized Base Rent 1. 0.65% 2. 0.48% 3. 0.48% 4. 0.43% 5. 0.43% 6. 0.38% 7. 0.29% 8. 0.25% 9. 0.23% 10. 0.21% Total 3.83% All figures as at December 31, 2022. (1) Excluding Canadian Tire Corporation related tenancies. 9
Slide 10: Long-Term Lease Maturities
LONG-TERM LEASE MATURITIES Amongst the longest weighted average lease term in the sector with well staggered maturities (1) Excludes Properties Under Development. Total base minimum rent excludes future contractual escalations. Canada Square is included at the REIT's one-half share. Occupancy and ot
Slide 11: Strategic Locations
STRATEGIC LOCATIONS High traffic and transit-oriented locations in growing markets Leslie St. & Sheppard Ave., Toronto, ON ▪ Prime locations in urban centres ▪ Dominant positions in secondary markets 11
Slide 12: Industrial Properties
INDUSTRIAL PROPERTIES 11 Dufferin Place SE 25 Dufferin Place SE 5500 Dufferin Blvd. SE Calgary, AB Calgary, AB Calgary, AB (2023) 201K sq. ft 655K sq. ft 350K sq. ft (Net Zero Carbon and Net Zero Energy development) 8400 Healey Road 50 Boulevard Dupont Bolton, ON Coteau-du-Lac, QC 1.4M sq. ft 2.0M s
Slide 13: Dufferin District
DUFFERIN DISTRICT Industrial node in southeast Calgary provides critical mass and attractive fundamentals 13
Slide 14: Growth Strategies
GROWTH STRATEGIES 14
Slide 15: Growth Levers
GROWTH LEVERS Uniquely positioned to leverage relationship with CTC and pursue third party net lease opportunities to complement organic growth CTC Development Intensifications Third Party Acquisitions Embedded Organic Growth 1.5% 8.9 years Annual rent escalations Weighted average (on average)(1) re
Slide 16: Solid Growth Pipeline
SOLID GROWTH PIPELINE Development pipeline highlights meaningful opportunities for future growth ▪ 1.28M square feet of ongoing development activity totalling $375.1M ▪ 109,000 square feet of incremental new investments announced in Q4 2022 ▪ Invested approximately $260M in completed projects and on
Slide 17: Case Studies
CASE STUDIES 17
Slide 18: Development
DEVELOPMENT CT REIT has a preferential right to participate in the development of CTC owned properties Greenfield Developments Charlottetown, PEI ▪ CT REIT is uniquely positioned to participate in the development of Canadian Tire stores and Canadian Tire anchored developments ▪ 15 new Canadian Tire
Slide 19: Development: Orillia Square Mall
DEVELOPMENT Acquiring and repositioning under-managed assets; leveraging strategic relationship Redevelopment Project: Orillia Square Mall BEFORE ▪ Former vacant Target and portion of enclosed mall redeveloped for brand new large format Canadian Tire store ▪ Former Canadian Tire store re- demised fo
Slide 20: Development – Canada Square, Toronto, ON
DEVELOPMENT – CANADA SQUARE, TORONTO, ON Nine-acre mixed-use redevelopment site located on two subway lines at Yonge and Eglinton, one of Toronto’s most prominent intersections Urban Mixed Use Redevelopment Opportunity ▪ 50/50 Joint-Venture with Oxford Properties Group ▪ CT REIT and Oxford have ente
Slide 21: Intensifications
INTENSIFICATIONS Incremental density on owned surplus lands Thunder Bay, ON ▪ Since IPO, CT REIT has funded 103 intensification projects for Canadian Tire Corporation and ancillary tenants ▪ Over 1.25M square feet of incremental GLA added 21
Slide 22: CTC Acquisitions
CTC ACQUISITIONS Privileged relationship – right of first offer on all CTC properties ▪ CTC owned properties that can be acquired by CT REIT and leased back to CTC on a long term basis or redeveloped ▪ Over 2M square feet of industrial assets acquired and leased to CTC since IPO ▪ Currently there ar
Slide 23: Third Party Acquisitions
THIRD PARTY ACQUISITIONS Consolidating the ownership of Canadian Tire tenanted properties from third parties ▪ Approximately ¼ of Canadian Tire properties are owned by third parties ▪ Opportunity to consolidate Canadian Tire stores and supply chain assets ▪ CT REIT has acquired 19 Canadian Tire anch
Slide 24: Third Party Acquisitions: Non-CTC Opportunities
THIRD PARTY ACQUISITIONS Non-CTC related opportunities Halifax, NS Waterloo, ON ▪ Broader investment strategy to acquire third party net lease assets ▪ Leverage CTC’s local insight and market knowledge Banff, AB 24
Slide 25: Financial Overview
FINANCIAL OVERVIEW 25
Slide 26: Stable and Resilient Asset Base
STABLE AND RESILIENT ASSET BASE Property revenue is reliable and growing 96.1% 8.6 Years Of annualized base minimum rent from One of the longest weighted average investment grade tenants(1) remaining lease terms in the sector 99.3% 1.5% Occupancy(1) Annual rent escalations(2) All figures as at Decem
Slide 27: Lean Cost Structure
LEAN COST STRUCTURE One of the lowest cost structures in the REIT sector ▪ CTC leases triple net; base rent, operating costs (including insurance) and capex paid by tenant ▪ G&A as a percentage of revenues are 2.9%(1) ▪ Internalized property management functions; any services provided by CTC are on
Slide 28: Investment Grade Capital Structure
INVESTMENT GRADE CAPITAL STRUCTURE Predictable and Durable – strong balance sheet supports growth and distributions BBB 40.7% Investment grade rating(1) Indebtedness Ratio 6.9x 3.7x Debt to EBITFV(2) Interest Coverage Ratio(3) All figures as at December 31, 2022. (1) Source: S&P Global Ratings and D
Slide 29: Solid Financial Metrics
SOLID FINANCIAL METRICS Strong credit metrics – low leverage All figures as at Year End. (1) Non-GAAP ratio. Refer to section 10.2(d) of the Q4 2022 MD&A for more information. (2) Non-GAAP ratio. Refer to section 10.2(e) of the Q4 2022 MD&A for more information. 29
Slide 30: Debt
DEBT Conservative leverage – strong credit metrics Capital Structure TOTAL DEBT (000’S)(2) 1% Mortgages Class C LP Units (unsecured) $1,451,550 1% Credit Facilities Mortgages (secured) $65,295 18% Debentures Debentures (unsecured) $1,170,905 23% Class C LP Units Credit Facilities (unsecured) $99,884
Slide 31: Debt Maturities
DEBT MATURITIES Staggered debt maturities – one of the longest weighted average terms to maturity in the sector ▪ No public unsecured debenture maturities Det De De t rincipaRepa t rincipal rincipal Repaments ments( ) ( millions) Interest Rate until June 2025 500 .00 50 ▪ 98% of total debt is .00 00
Slide 32: Growing FFO and AFFO
GROWING FFO AND AFFO Attractive record of per unit growth All figures as at Year End. (1) Non-GAAP ratio. Refer to section 10.2(b) of the Q4 2022 MD&A for more information. (2) Total Units consist of REIT Units and Class B LP Units outstanding. (3) Diluted Units used in calculating non-GAAP measures
Slide 33: Solid Distribution Growth Over Time
SOLID DISTRIBUTION GROWTH OVER TIME History of growing distributions every year since IPO while conservatively managing payout ratio ▪ Nine distribution increases, 34% growth since 2013 IPO ▪ Q4 2022 YTD AFFO Payout Ratio – 74.5% ▪ Excess of AFFO over Distributions Paid – $69.1M(2) All figures as at
Slide 34: Environmental, Social and Governance
ENVIRONMENTAL, SOCIAL AND GOVERNANCE 34
Slide 35: ESG an Imperative for CT REIT
ESG AN IMPERATIVE FOR CT REIT We believe that investing in ESG initiatives will maximize long-term value for our unitholders by addressing the environmental, social and governance impacts of our business operations 2021 ESG Highlights As a critical pillar of the REIT’s strategy, our ESG areas of foc
Slide 36: Majority Independent Board
MAJORITY INDEPENDENT BOARD Committed to having a diverse array of experience, skills and perspectives, grounded in strong governance TRUSTEES COMMITTEES HIGHLIGHTS David Laidley FCPA, FCA Audit Committee Corporate Director Governance, Compensation and Former Chair, Deloitte Chairman of the Board Nom
Slide 37: Appendix: Specified Financial Measures
APPENDIX: SPECIFIED FINANCIAL MEASURES 37
Slide 38: Specified Financial Measures
SPECIFIED FINANCIAL MEASURES “FFO” is a non-GAAP financial measure and has the meaning given to it in the REALPAC Guidance on FFO & AFFO. It is calculated as net income in accordance with IFRS, adjusted by removing the FFO: impact of: (i) fair value adjustments on investment properties; (ii) other f
Slide 39: Specified Financial Measures: FFO & AFFO Reconciliation
SPECIFIED FINANCIAL MEASURES FFO & AFFO RECONCILIAITON FROM NET INCOME Q4 2022 YTD Q4 2022 Net income and comprehensive income $74,749 $324,613 Fair value adjustment on investment property $860 ($27,845) GP income tax expense ($495) ($115) Lease principal payments on right-of-use assets ($145) ($564
Slide 40: Specified Financial Measures: EBITFV and Capital Structure
SPECIFIED FINANCIAL MEASURES EBITFV(1) CAPITAL STRUCTURE Net income and comprehensive income $324,613 Equity $3,663,404 57% Fair value adjustment on investment ($27,845) Class C LP Units $1,451,550 23% properties Fair value adjustment on unit-based ($866) Debentures $1,170,905 18% awards Interest ex
Slide 41: Specified Financial Measures: 5-Year CAGR
SPECIFIED FINANCIAL MEASURES 5-YEAR COMPOUND ANNUAL GROWTH RATE(1) 2017 2022 5 Year (A) (B) CAGR AFFO/Unit(2) 0.919 1.147 4.5% NAV/Unit 13.39 16.31 4.0% Distribution/ 0.700 0.854 4.1% Unit – Paid SECURED DEBT VARIABLE RATE INDEBTEDNESS /TOTAL INDEBTEDNESS /TOTAL INDEBTEDNESS Secured Debt $65,295 Var
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