Riocan Real Estate Investment Trust · TSX:REI.UN
Riocan Real Estate Investment Trust — Q3 2024 Earnings Presentation
31 slides from Riocan Real Estate Investment Trust's earnings presentation, Nov 12, 2024
Slide 1: Third Quarter 2024 Investor Presentation
THIRD QUARTER 2024 INVESTOR PRESENTATION NOVEMBER 11, 2024 IRREPLACEABLE I D E A L LY ENDURING RioCan Elgin Mills Crossing PORTFOLIO L O C AT E D VA L U E Greater Toronto, ON
Slide 2: RioCan at a glance
RioCan at a glance Committed 97.8% Occupancy 186 properties (1) ~33M Sq. Ft. aggregate net leasable area ~18M Sq. Ft. VANCOUVER pipeline 4 assets 1.1M sq.ft.(2) 4.7% (3) zoned for development BBB CALGARY 16 assets MONTREAL 19 assets 1.9M sq.ft. (2) 3.6M sq.ft. (2) investment-grade credit 11.9%(3) ED
Slide 3: Key Takeaways - Year-to-date 2024
Key Takeaways - Year-to-date 2024 ACCELERATED DEMAND FOR HIGH-QUALITY RIOCAN SPACE $1.34 On track to achieve annual guidance of $1.79 to $1.82, 97.8% Maintaining high occupancy with retail FUNDS FROM COMMITTED OPERATIONS (“FFO”) excluding restructuring charges OCCUPANCY essentially full at 98.6% PER
Slide 4: Favourable market dynamics
Favourable market dynamics LONG-TERM MACRO-TRENDS PRESENT MEANINGFUL DEMAND DRIVERS Population / Demand Evolving Retail / Demand Shortage of Supply ◦ Population fuels demand for real estate ◦ Full omni-channel experience combines ◦ Lack of new retail supply exacerbated ◦ Canada,the fastest growing c
Slide 5: Major Market Advantage
Major Market Advantage RIOCAN'S MAJOR URBAN CENTRE PRESENCE OUTPACES PEER AVERAGE % of rent from Canada's six major markets 92% 94% 74% 69% 63% 66% N/A (1) 2017 Q3 2024 RioCan Peer Average (includes CRR, CRT, FCR and SRU) 1) The baseline year for comparison is 2017 as it is the year prior to the com
Slide 6: Dominant Core Toronto position
Dominant Core Toronto position 7.3M SQ. FT. OF OPERATING ASSETS, WITH AN ADDITIONAL 6.3M SQ. FT (1) OF ZONED DENSITY NLA in Metropolitan Toronto (in millions of sq. ft.) (2) RioCan properties within Metropolitan Toronto RioCan First Capital Choice Properties SmartCentres CT Crombie — 5.0 10.0 1) Squ
Slide 7: Located in prime, in-demand and growing markets
Located in prime, in-demand and growing markets COMPELLING DEMOGRAPHIC PROFILE – WITHIN 5KM RADIUS Dense Population Strong Household Income 273,000 $148,000 $102,000 154,000 +77% +45% (1) (1) 2017 Q3 2024 2017 Q3 2024 1) The baseline year for comparison is 2017 as it is the year prior to the commenc
Slide 8: High-quality, necessity-based retail revenue
High-quality, necessity-based retail revenue 97.8% 87.9% Property committed occupancy (2) strong and stable tenants (3) Type (1) z 58.1% 31.6% • Retail: 85.0% grocery anchored mixed-use / • Office: 10.4% centres (4) urban (4) (5) • Residential Rental: 4.6% 1) Percentage of annualized contractual gro
Slide 9: Necessity-based retail anchor tenants
Necessity-based retail anchor tenants A CURATED AND DIVERSIFIED TENANT BASE PROVIDING CONSUMERS CONVENIENT ACCESS TO EVERYDAY NEEDS Grocery / Pharmacy / Essential Goods & Value Liquor Services (1)(2) Retailers 20.2% 24.6% 12.6% Loblaws / Sobeys / Metro / Walmart / Canadian Tire / PetSmart / Bell / D
Slide 10: Demand driven leasing activity and spreads
Demand driven leasing activity and spreads RESILIENT PORTFOLIO DRIVES HIGH PERFORMANCE (2) Retention Ratios Blended Leasing Spreads Average Net Rent PSF 91.5% 91.7% 86.7% 87.7% $22.12 83.8% 14.8% $21.51 $20.98 10.7% $20.16 9.0% $19.80 6.3% 5.0% (1) 2020 2021 2022 2023 YTD 2024 2020 2021 2022 2023 LT
Slide 11: Best-in-class residential rental
Best-in-class residential rental INCREASING SCALE PROVIDES STRATEGIC OPTIONS 14 Newly built buildings avg. age: 4 years 3,160 (1) 96.3% (2) units occupied 100% CMHC MONTREAL major market financing at 3.57% 3 buildings for 8.0 years (3) CALGARY OTTAWA 263 units (1) 2 buildings GREATER 1) Number of un
Slide 12: Lowest payout ratio retains $150 million of free cash flow annually
Lowest payout ratio retains $150 million of free cash flow annually WHILE OFFERING ATTRACTIVE TOP TIER YIELDS (2) FFO Payout Ratio (1) Distribution and AFFO yield Peer Average: 73.8% Peer Average (AFFO Yield): 7.3% 92.7% 8.6% 8.3% 7.7% 7.5% 72.0% 73.7% 68.1% 6.8% 7.4% 61.7% 62.5% 6.2% 5.9% 6.1% 6.1%
Slide 13: A clear path to Adjusted Debt to Adjusted EBITDA Target: 8.0x - 9.0x
A clear path to Adjusted Debt to Adjusted EBITDA Target: 8.0x - 9.0x (1) Key Drivers: Building Blocks to De-leveraging (2) • Ramp up of EBITDA – natural deleveraging from organic growth and with new income from recent and Repay condo near-term development deliveries construction loans Remaining • ~
Slide 14: Size and scale of modular pipeline provide flexibility to time project starts
Size and scale of modular pipeline provide flexibility to time project starts ADDING VALUE THROUGH EVERY STEP OF THE DEVELOPMENT PROCESS 44.1M SQ. FT. DEVELOPMENT PIPELINE Zoning application Zoning Shovel Underway (1) submitted approved (1) ready (1) 6.3M 15.1M 1.7M 1.0M SQ. SQ. SQ. SQ. FT. FT. FT.
Slide 15: Ample liquidity and laddered debt maturity
Ample liquidity and laddered debt maturity Proforma Debt Maturity Profile (i) The Trust has extended 2,000 The Trust issued $200.0 million Series AM the maturity date of the senior unsecured debentures that will $200.0 million of non- 1,800 mature on March 1, 2028 revolving credit facility to Januar
Slide 16: Embedding best practices in everything we do
Embedding best practices in everything we do SELECT ACHIEVEMENTS ENVIRONMENT SOCIAL GOVERNANCE LEED Platinum Top 100 Employers AA Rating Certified LEED Platinum for the Recognized as one of Greater Achieved an ESG rating upgrade to AA commercial components at The Well TM - Toronto’s Top 100 Employer
Slide 17: Leading the way to a net-zero economy
Leading the way to a net-zero economy COMMITTED TO REACH NET-ZERO GREENHOUSE GAS EMISSIONS ACROSS THE VALUE CHAIN BY 2050 Near-term Targets With 2019 as the baseline year: RioCan used the SBTi Corporate Net-Zero • Reduce absolute Scope 1 and 2 Standard as a framework to guide our emissions by 46.2%;
Slide 18: Appendix: Favourable market dynamics
APPENDIX Favourable market dynamics RIOCAN | INVESTOR PRESENTATION (March 2022) | 18 RIOCAN | INVESTOR PRESENTATION (Third Quarter 2024)
Slide 19: Physical stores - the hub of omni-channel
Physical stores - the hub of omni-channel BRICK & MORTAR IS CENTRAL TO SERVING CUSTOMERS HOW, WHERE AND WHEN THEY WANT Distribution Centre Brick & Mortar Store Home Occupancy costs trending higher Located in industrial park Located in heart of community In-store purchase Delivery from store BOPIS (1
Slide 20: Canadian Retail Real Estate Supply Constrained
Canadian Retail Over the last five years newly Real Estate is constructed retail represents Supply only ~1% of existing supply Constrained 0.8% 0.8% With replacement costs for well- 0.9% 0.6% ~17Sq. located retailFt. well over market 0.9% values, supply constraints are In Millions of Sq. Ft. expecte
Slide 21: Sustainable Demand
Sustainable Demand Square Feet of Retail per Capita(2) RETAIL REAL ESTATE SUPPLY HAS NOT KEPT PACE WITH POPULATION GROWTH IN CANADA (‘000s) Post pandemic, Canada exceeded its immigration plan targets and welcomed more than 1.3 million new Canadians between 2021 and 2023 16.7 Sq. ft. Number of immigr
Slide 22: Retailers continue to expand their physical footprint
Retailers continue to expand their physical footprint “We are building on last year's momentum with a plan for more Per Bank, President & CEO, conversions plus net new stores to add more than 50 additional hard Loblaw Companies Limited, discount stores....with our investment, you'll see us building
Slide 23: Focus Five - large scale projects
APPENDIX Focus Five - large scale projects Note: GFA is square footage at RioCan's interest and number of residential units are at 100% interest RIOCAN RIOCAN | INVESTOR | INVESTOR PRESENTATION PRESENTATION (Third (March Quarter 2022) 2024) | 23
Slide 24: RioCan Hall
▪ Currently ~227k sq. ft. of income producing retail in the heart of Toronto’s downtown entertainment district ▪ ~900k sq. ft. of mixed-use density contemplated through two-tower development comprising entertainment, retail and office uses as well as ~690 residential units ▪ Status: Zoning approved
Slide 25: RioCan Leaside Centre
▪ Development spanning 8.8 acres in Toronto’s upscale Leaside neighbourhood ▪ A new Eglinton Crosstown LRT station is nearing completion on the site ▪ Zoned for ~1 million sq. ft. of mixed- use density offering ~1,450 residential units, retail, and public spaces ▪ Status: Site Plan Application submi
Slide 26: RioCan Colossus Centre
▪ >60 acre site currently consisting of 571k sq. ft. of income producing retail strategically located at the intersection of HWY 400 and HWY 7 in the rapidly growing Toronto suburb of Vaughan ▪ ~10M sq. ft. of mixed-use density HWY 400 contemplated involving multi-phase HWY 407 development comprisin
Slide 27: RioCan Scarborough Centre
▪ Located in The Golden Mile district of Toronto and directly adjacent to the newly constructed transit station of the Eglinton Crosstown LRT ▪ This transit-oriented site contemplates a mixed-use community of high-density residential combined with retail amenities totaling ~4.3M sq. ft. and ~4,900 r
Slide 28: Shoppers World Brampton
▪ Currently ~700k sq. ft. of income producing retail located in Brampton, a growing suburb of Toronto ▪ Site has been designated as the “Uptown Gateway” and is in close proximity to the proposed Hurontario LRT ▪ This will be a multi-phase mixed-use development totaling ~4.1M sq. ft. including ~4,700
Slide 29: Forward-Looking Information
FORWARD-LOOKING INFORMATION All information other than statements of current and historical fact included in this presentation is forward-looking information within the meaning of applicable securities laws. Forward-looking information can generally be identified by the use of forward-looking termin
Slide 30: Non-GAAP Measures
NON-GAAP MEASURES RioCan’s consolidated financial statements are prepared in accordance with IFRS. Consistent with RioCan’s management framework, management uses certain financial measures to assess RioCan’s financial performance, which are not generally accepted accounting principles (GAAP) under I
Slide 31: Head Office
Head Office | RioCan Yonge Eglinton Centre, 2300 Yonge Street, Suite 2200, Box 2386, Toronto, Ontario M4P 1E4 • 1-800-465-2733 • riocan.com RIOCAN | INVESTOR PRESENTATION (Third Quarter 2024)
RioCan Real Estate Investment Trust — Q3 2024 Earnings Presentation on 6ix