Primaris Real Estate Investment Trust · TSX:PMZ.UN
Primaris Real Estate Investment Trust — Q1 2022 Earnings Presentation
33 slides from Primaris Real Estate Investment Trust's earnings presentation, May 4, 2022
Slide 1: Built for the New Retail Landscape
Built for Built for the the New New Retail Landscape Retail Landscape Primaris REIT | May 2022
Slide 2: Caution Regarding Forward-Looking Statements and Non-GAAP
CAUTION Forward Looking Statements Certain information in this presentation contains forward-looking information within the meaning of applicable securities laws (also known as forward-looking statements) REGARDING including, among others, statements made or implied relating to Primaris’ future plan
Slide 3: Key Metrics at a Glance
$3.3B 2,400+ BBB Stable 35 Total Assets Store Count Investment Grade Properties Rating 11.3MSF 28.4% 45-50% 5.3x¹ GLA Debt to Total Target FFO Debt to Adjusted Assets Payout Ratio** EBITDA** 1. See Section 10.4 “Capital Structure” of the MD&A. ** Non-GAAP measure. Refer to the “Non-GAAP Measures” se
Slide 4: Canadian Enclosed Evolution
A blank slate to design a best- in-class vehicle to take advantage of the recovery in Canadian Enclosed Evolution enclosed shopping centres Expansion Through Euphoria Retail in Transition Pandemic Recovery Retailers conclude Over levered, too bricks & mortar anchors much concentration omnichannel: T
Slide 5: Primaris Strategic Advantage
Demonstrated resiliency through Primaris Strategic Advantage pandemic. Steady organic Adjusted EBITDA Built for the New Retail Landscape growth expected post pandemic Built to Grow and Thrive Size and Scale Proper Capitalization • $3.3B national portfolio of dominant • Debt to Total Assets: 28.4% en
Slide 6: Canadian Consolidation Opportunity
Large opportunity to be the consolidator as institutions contemplate rebalancing, Primaris stands alone as a Canadian Consolidation Opportunity potential buyer Canada’s only enclosed shopping centre REIT • $50 billion of Canadian enclosed shopping centres concentrated to $50b in Enclosed institution
Slide 7: Capital Structure Targets
Designed to provide significant financial flexibility and create a differentiated investment Capital Structure Targets profile among Canadian REITs Target secured debt to total debt below 40% Sustained long-term debt to Adjusted EBITDA** SECURED DEBT Strategy to transition to unsecured borrowing in
Slide 8: Highly Differentiated Financial Model
Best-in-class structure built with flexibility, optionality and liquidity, enabling minimized Highly Differentiated Financial Model cost of capital Mortgages Payable 18% 28.4% 5.3x¹ BBB Stable Debt to Total Debt to Adjusted Investment Grade Assets EBITDA** Rating Senior Unsecured Debentures Total De
Slide 9: Raises Guidance; Strong Q1/22 Results
Increased guidance signals confidence in our ability to take Raises Guidance; Strong Q1/22 Results advantage of the ongoing recovery in retail property, and return to more typical consumer behaviour +2.7% increase reflecting strong operational Raised 2022 NOI** 8.2% Same Properties Growth reflective
Slide 10: Guided by Skilled Independent Board of Trustees
Tremendous strategic resource: Guided by Skilled Independent experiential retailing, institutional Board of Trustees property brokerage, investment management, REIT operations, financial strategy, public company reporting, retail technology Avtar Bains Louis Forbes Deborah Weinswig • President of Pr
Slide 11: Strong Management Team
Experienced Management Team with Significant Real Estate Investment and Strong Management Team Operations Expertise Led the structuring and strategy of Alex Avery Primaris Spin-off Graham Previous senior roles at Brookfield Chief Executive 20 4 Former H&R REIT board member, EVP, Procter 20 4 Propert
Slide 12: Dominant Enclosed Shopping Centre Portfolio
Dominant Enclosed Dominant Shopping Centres in Shopping Centre Portfolio Growing Markets Other Apparel 14% 19% Food 8% +3.9% Personal 2020 – 2025 Average Expected Services Market Income Growth CAGR1 16% Large Format Non-Fashion 9% +3.0% 2020 – 2025 Average Expected HH Income Growth CAGR1 Large Forma
Slide 13: Robust Institutional Operating Platform
Fully Internalized, Scalable Platform With Over 300 Employees Across Robust Institutional Operating Platform 3 Regional Offices 431 22 18 9 Asset Management Finance & Corporate Leasing Legal Treasury 4 6 12 Development & Human Resources Information Construction Technology 1. Including site personnel
Slide 14: Primaris' Response to the Evolving Retail Landscape
Primaris’ Response to the Evolving Retail Landscape Dominant mall in respective trade areas - Primarily secondary markets with trade area populations over 100,000 people isolated from major market trade areas Profitable retailer locations - Tenant rationalization of store count GROC due to e-commerc
Slide 15: Dominant Enclosed Shopping Centre Portfolio
Primaris owns and manages regional enclosed shopping Dominant Enclosed centres and open air retail properties across Canada Shopping Centre Portfolio NOI ** by Asset Class NOI** by Province NOI** by Market QC 2% Enclosed Malls BC 88% 15% Primary AB 28% 38% Dufferin Mall, Toronto, ON Office 1% Open A
Slide 16: Creditworthy Top Tenants in the Retail Sector
High Quality Roster of Tenants Creditworthy Top Tenants in the Retail Sector Annualized Annualized Credit Ratings Credit Ratings Minimum Store WALT² Minimum Store WALT² Tenant¹ Sector (S&P / Moody’s / Tenant¹ Sector (S&P / Moody’s Rent (% of Count (yrs) Rent (% of Count (yrs) DBRS) / DBRS) Total) To
Slide 17: Strong Canadian Retail Tenants
Canadian retail REIT tenants largely dominated by grocery, Strong Canadian Retail Tenants pharmacy and value retailers Common Retailer across 5+ REITs Other Canadian Retail REITs¹ Primaris REIT A B C D E F 1 Canadian Tire Corp. Canadian Tire Corp. Walmart Loblaws/ Shoppers Sobeys/Safeway Loblaws/Sho
Slide 18: Well Positioned for Economic Recovery
Resilience Through Economic Well Positioned for Cycles and is Poised for Post-Pandemic Recovery Economic Recovery 92.1% 92.2% Committed Occupancy Primaris Properties Total 91.8% 90.7% 91.0% (excluding HOOPP Properties, 90.6% 90.1% Northland Village¹) 89.7% 89.4% 89.1% 89.2% Q1-20 Q2-20 Q3-20 Q4-20 Q
Slide 19: Positive Leasing Momentum
Strong Large Format Leasing Year-to-Date Momentum with Positive Leasing Momentum High Quality Tenants TENANTS TOTAL GLA Average Net Rent psf % Spread 15 32,000 $34.50 - New 625,000 CRU¹ TENANTS NEW 2022 remaining Renewal lease maturities 46 93,000 $38.00 (3.7%) - - RENEWALS - New - ANCHORS² Renewal
Slide 20: Well-Staggered Lease Maturity Profile
Well-Staggered Lease Balanced lease profile Maturity Profile 1,200 $45 $40 4.8yr 1,000 Weighted $35 Average Lease Term Average net rent per sq. ft. GLA (in thousands sq. ft.) 800 $30 $25 600 $20 400 $15 $10 200 $5 - $0 Short-term¹ 2022 2023 2024 2025 2026 2027 % of Total GLA 1.8% 5.5% 9.7% 9.4% 7.5%
Slide 21: Continuing to Expand and Refine our Disclosure Package
Continuing to Expand ¹ and Refine our Disclosure Package Redevelopment and Development Projects Increased Guidance Leasing Spreads and Rents Supplemental Debt Maturity Profile 1 No meaningful comparative exists for certain 2021 figures. 2 Supplementary financial measure, see Section 1, "Basis of Pre
Slide 22: NOI Ahead of Expectations Driving Growth
NOI Ahead of Expectations Driving Growth Same 8.2% reflective of post pandemic Properties recovery and improving tenant Cash NOI** sales Significant portion of debt Interest outstanding at low floating rates Expense replaced with issuance of secured debt at the quarter end Start-up, public company c
Slide 23: Omni-Channel and Innovation Strategy
Proprietary e-commerce integration technology Omni-Channel and platform, one-stop destination, integrating the mall, shopper Innovation Strategy and retailer How it works • Primaris is a key piece of retailer tenant omni-channel strategies. • The ‘last mile’ is driving store growth in Primaris’ trad
Slide 24: Excess Density and Substantial Intensification Potential
Excess Density and Substantial Low Site Coverage Allows for Intensification, Development Intensification Potential and/or Subdivision of Land Primaris’ enclosed mall portfolio comprised of 23 assets nationwide • Situated on approximately 900 acres of land • Located close to major transportation node
Slide 25: Excess Density and Substantial Intensification Potential (Cont'd)
Flexibility to Develop and Excess Density and Substantial Continue to Surface Value or Intensification Potential (Cont’d) Monetize to Maintain Strong Balance Sheet Dufferin Grove Development Overview • $600 million intensification and redevelopment of Dufferin Mall’s northernmost parking area • Rede
Slide 26: Excess Density and Substantial Intensification Potential (Cont'd)
Several Properties With Excess Density and Substantial Significant Intensification Potential Intensification Potential (Cont’d) Place Stone Road Northland Orchard Park Sunridge Mall Sherwood Park Grant Park¹ Kildonan Place¹ D’Orleans¹ Mall Village Winnipeg, MB Kelowna, BC Calgary, AB Sherwood Park,
Slide 27: ESG
ENVIRONMENTAL¹ GOVERNANCE¹ All Primaris Properties have achieved BOMA Best Primaris began with, and will continue to have, a strong ratings of Bronze or higher and two Primaris governance foundation and a commitment to good Properties are LEED Canada certified. governance principles. ESG ENERGY EFFI
Slide 28: Investment Proposition
Investment Proposition Implied discount to Net Asset Value** a compelling investment opportunity “Primaris REIT is exceptionally well positioned to participate in the recovery of the Canadian enclosed shopping centre industry, with a differentiated financial model, gold-standard governance, a fully-
Slide 29: Invest With Us
Invest With Us TICKER PMZ.UN Internally Managed S&P/TSX Capped REIT Index and Strong Institutional Independent Board S&P/TSX Composite Index member Endorsement IFRS FV of Assets is $3.3 Billion, Providing BBB Stable Investment Exchange: TSX Scale and Trading Grade Credit Rating Liquidity 29
Slide 30: Appendix
Appendix 7 Primaris”
Slide 31: The Canadian Advantage
Canadian retail property landscape differs substantially The Canadian Advantage from the United States Canada US The Canadian Advantage 35% less space drives higher Retail Space per Capita 17 sf per person¹ 23 sf per person¹ sales productivity Limited CMBS, mostly balance Lending Security Recourse N
Slide 32: Detailed Asset List
Detailed Asset List Ownership GLA at Share Store # Property Name City Province Type Major Tenants Share (SF) Count 1 Hudson's Bay, Sport Chek, Marshalls, Indigo, H&M, Cataraqui Centre Kingston Ontario Enclosed 50% 296,720 103 Urban Planet, Dollarama, Shoppers Drug Mart Walmart, No Frills, Marshalls,
Slide 33: Detailed Asset List (Cont'd)
Detailed Asset List (Cont’d) Ownership GLA at Share Store # Property Name City Province Type Major Tenants Share (SF) Count Hudson's Bay, Sport Chek, Public Works and 18 Place d'Orleans Orleans Ontario Enclosed 50% 347,055 122 Government Services Canada, Aubaunerie Walmart, Sports Experts, Cinema Od
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