Boardwalk Real Estate Investment Trust · TSX:BEI.UN
Boardwalk Real Estate Investment Trust — Boardwalk Equities — Shareholder Meeting (May 2003)
46 slides from Boardwalk Real Estate Investment Trust's shareholder meeting presentation, May 13, 2003
Slide 1: 2002 General and Special Meeting of Shareholders
Delivering VALUE GROWTH PERFORMANCE BOARDWALK EQUITIES INC. 2002 General and Special Meeting of Shareholders May 13, 2003 Boardwalk Equities Inc. 1
Slide 2: Agenda
Agenda • Welcoming Remarks and Introduction • Annual and Special Meeting of Shareholders • Corporate Presentation • Q&A Boardwalk Equities Inc. 2
Slide 3: Annual and Special Meeting of Shareholders
Annual and Special Meeting of Shareholders • Notice of Meeting • Scrutineer’s and Report on Attendance • Items of Business • Election of Directors • Appointment of Auditors • Amendment to Articles of the Corporation • Further Business and Termination Boardwalk Equities Inc. 3
Slide 4: Corporate Presentation - Outline
Corporate Presentation - Outline • 2002 Highlights • Corporate and Strategic Overview • Review of Portfolio Expansion • Q1 2003 Results • Financial Review • Outlook and Summary Boardwalk Equities Inc. 4
Slide 5: 2002 Highlights: Operating Results
2002 Highlights Operating Results • Rental revenues increased 18% to $242 million • NOI increased by 19% to $163 million • Funds From Operations (FFO), excluding gains, grew by 24% to $62 million • FFO per share (diluted), excluding gains, increased by 25% to $1.24 Boardwalk Equities Inc. 5
Slide 6: 2002 Highlights: Portfolio Performance
2002 Highlights Portfolio Performance • Average monthly rents in 2002 of $716 per unit, up $52, or 8% • Average occupancy rate of our portfolio of 95.0% • Stabilized portfolio continued to show solid performance •“same-property” rental revenue growth of 5.5%, and NOI growth of 7.5%; • Estimated “los
Slide 7: 2002 Highlights: Portfolio Growth
2002 Highlights Portfolio Growth • Completed over $230 million of acquisitions on a highly accretive basis • Acquisition of over 3,500 units, increasing portfolio by 14% • Expanded geographic platform into Montreal and Quebec City markets Boardwalk Equities Inc. 7
Slide 8: 2002 Highlights: Financing
2002 Highlights Financing • Successfully refinanced or renewed over $300 million of mortgage debt • Reduced average interest rate to 5.9% at year end Performance •Common shares provided a 31.5% total return during 2002 Boardwalk Equities Inc. 8
Slide 9: Company Overview
Company Overview • Canada’s largest multi-family owner/operator • Over 30,400 rental units (Rental universe of over 1.5MM units in major Canadian CMA’s) • Listed on TSX and NYSE (BEI) • Included on S&P/TSX Composite Index • Total market capitalization: C$2.1 Billion Boardwalk Equities Inc. 9
Slide 10: Company Overview
Company Overview • Experienced professional management team – significant ownership stake in the company – absence of conflicts of interest – proven track record of growth and adding value • Quality Portfolio – high concentration in dynamic markets – over $300MM spent over past 4 years on capital up
Slide 11: Business Strategy
Business Strategy • Focused on acquiring, owning, and managing quality multi-family rental properties concentrated in attractive markets characterized by high barriers to new supply. Boardwalk Equities Inc. 11
Slide 12: Growth Strategy
Growth Strategy • Maximize internal growth through pro- active asset and property management • Aggressive but disciplined acquisition program – Focus on assets at well under replacement costs – Properties with opportunities to enhance cash flows/values through pro-active management and redevelopment
Slide 13: Focused Vision and Mission
Focused Vision and Mission Our Vision: Boardwalk is committed to being Canada’s leading multi-family Company and to expanding our operations into a truly national platform. Our Mission: To Serve and Provide our Residents with Quality Rental Communities. Boardwalk Equities Inc. 13
Slide 14: Market Leader
Market Leader Grande Prairie Fort McMurray Edmonton Saskatoon Red Deer Banff Airdrie Quebec City Calgary Regina Gatineau Montreal 15 Markets Across The Country London Kitchener Windsor Boardwalk Equities Inc. 14
Slide 15: Portfolio Statistics
Portfolio Statistics • Boardwalk’s portfolio consists of over $1.8 Billion invested in over 250 properties • Properties have approx. 26 million square feet of rentable area • Portfolio avg. unit size of 847 sq. ft - 2 bedroom • Overall avg. rent $725/month as of Q1 2003 • 82% of the Company's portfo
Slide 16: Quality Portfolio
Quality Portfolio Boardwalk Centre, Edmonton Nuns’ Island, Montreal Brentview Towers, Calgary Westheights Place, Kitchener Boardwalk Equities Inc. 16
Slide 17: Market Share – Major Markets
Market Share – Major Markets 0% 5% 10% 15% 20% 25% Calgary Edmonton Regina Saskatoon Kitchener London Windsor Montreal Quebec City Weighted Average Boardwalk Equities Inc. 17
Slide 18: Portfolio Expansion – Unit Growth
Portfolio Expansion – Unit Growth Total Portfolio – Units 35,000 30,000 25,000 20,000 15,000 10,000 5,000 0 'May- 'May- 'May- 'May- 'May- 'May- 'May- 'Dec- 'Dec- 'Dec- To 94 95 96 97 98 99 00 00 01 02 Date Boardwalk Equities Inc. 18
Slide 19: Portfolio Expansion – Increasing Diversification
Portfolio Expansion – Increasing Diversification 1995 1998 To date Saskatoon 6% Gatineau(Hull) Other Alb. Montreal/Quebec City 1% 4% Regina 14% 11% Edmonton Other Alb. London/Kitch. 34% 9% Edmonton 4% Edmonton Calgary 49% 51% Windsor 47% 5% Calgary Saskatoon 28% 7% Regina Calgary 9% 15% Other Alb. 6
Slide 20: Portfolio Expansion - Quebec
Portfolio Expansion - Quebec • Quebec portfolio exceeds 4,500 units • Properties all acquired since May 2002 • Montreal (3,908 units) • Nuns’ Island – Verdun (3,100 units) • Longueuil (720 units) • Saint Laurent (88 units) • Quebec City (346 units) • Gatineau/Hull (321 units) Boardwalk Equities Inc.
Slide 21: Portfolio Expansion – Quebec
Portfolio Expansion – Quebec • 15% of overall portfolio units • Over 60 properties with a total of 4,575 units – Montreal - 3,908 units – Quebec City – 346 units – Gatineau/Hull – 321 units • Approximate 1% market share in Montreal; <1% in Quebec City and Gatineau/Hull • Properties include approx. 4
Slide 22: 2002 Acquisition Highlights: Nuns' Island Portfolio
Portfolio Expansion - 2002 Acquisition Highlights Nuns’ Island Portfolio, Montreal, Quebec Units: 3,100 Date Acquired: May 1, 2002 Purchase Price: $200 million Per unit: $64,500 Per sq.ft.: $65 (avg. 992 sq.ft.) Boardwalk Equities Inc. 22
Slide 23: Nuns' Island Transaction Summary
Portfolio Expansion – Nuns’ Island Transaction Summary • Total cost of approx. $200MM included fair market adjustment for assumed mortgage debt • Estimated net positive FFO per share impact of $0.14 annualized – pre refinancing • Nov. 1, 2002 – Completed refinancing • $152.6MM NHA-insured first mort
Slide 24: 2002 Acquisition Highlights: Les Jardins de Merici
Portfolio Expansion – 2002 Acquisition Highlights Les Jardins de Merici (5-8 Place de Merici), Quebec City, Quebec Units: 346 Date Acquired: Nov. 1, 2002 Purchase Price: $27.1 million Per unit: $79,400 Per sq.ft.: $90 (avg. 880 sq.ft.) Boardwalk Equities Inc. 24
Slide 25: Q1/03 Acquisition Highlights: Gatineau
Portfolio Expansion – Q1/03 Acquisition Highlights Parc De La Montagne (42/44/46 Bedard Street), Gatineau (Hull), Quebec Units: 321 Date Acquired: Jan. 9, 2003 Purchase Price: $13.7 MM Per unit: $42,700 Per sq. ft.: $67 (avg. 636 sq. ft.) Boardwalk Equities Inc. 25
Slide 26: Q1/03 Acquisition Highlights: Longueuil
Portfolio Expansion – Q1/03 Acquisition Highlights Domaine d’Iberville Apartments (300/325 Joliette St., 385 Place de la Louisianne, 695 St. Charles St. W.), Montreal (Longueuil), Quebec Units: 720 Date Acquired: Feb. 4, 2003 Purchase Price: $34.5 million Per unit: $47,900 Per sq. ft.: $62 (avg. 779
Slide 27: BEI Market Expansion
BEI Market Expansion Rental Universe – in BEI major CMA’s 2001 To date Montreal 464,600 Quebec City 75,700 Ottawa 60,100 Gatineau (Hull) 19,100 619,500 Edmonton 64,200 65,100 Calgary 44,600 43,200 London 38,400 38,900 Kitchener 25,800 26,200 Saskatoon 15,900 15,500 Windsor 15,300 15,200 Regina 11,60
Slide 28: BEI Market Expansion
BEI Market Expansion Markets as a % of Major CMA’s in Canada 2001 London 3% Kitchener To Date London 3% 2% Saskatoon Edmonton Kitchener Edmonton Calgary Calgary 1% 4% 2% 4% 3% 3% Windsor Saskatoon 1% 1% Regina 1% Windsor 1% Regina 1% Montreal 31% Other 44% Quebec Other 5% 85% Ottawa 4% Gatineau(Hull
Slide 29: Portfolio Summary
Portfolio Summary Quebec 15% Ontario 14% Alberta 56% Saskatchewan 15% Province Number of Units % of Units Net Rentable Square Footage % of Square Footage Average Unit Size Alberta 17,044 56% 14,406,729 56% 845 Saskatchewan 4,660 15% 3,855,658 15% 827 Ontario 4,136 14% 3,300,295 13% 798 Quebec 4,575
Slide 30: Portfolio Summary
Portfolio Summary Edmonton 34.7% Calgary 15.3% Other-AB 6.1% Gatineau (Hull) 1.1% Kitchener 1.1% Quebec City Windsor 1.1% 5.1% Montreal London 12.8% 7.4% Regina Sask 8.8% 6.5% Boardwalk Equities Inc. 30
Slide 31: Internal Growth Prospects
Internal Growth Prospects • Well positioned to generate above-average internal growth from our existing portfolio • concentrated in strong markets with increasing demand and high barriers to new supply • Every $25 net increase in monthly rents per unit would translate into more than $0.17/share of F
Slide 32: Internal Growth Potential – Sensitivity Analysis
Internal Growth Potential – Sensitivity Analysis Monthly increase in net rents $ 25 $ 50 $ 75 $ 100 $ 125 $ 150 Monthly impact on FFO ($MM) 0.8 1.5 2.3 3.0 3.8 4.6 Annual impact on FFO ($MM) 9.1 18.3 27.4 36.5 45.7 54.8 Per share - FD $ 0.17 $ 0.34 $ 0.51 $ 0.68 $ 0.85 $ 1.02 Boardwalk Equities Inc.
Slide 33: Dynamic Markets
Dynamic Markets Boardwalk Equities Inc. 33
Slide 34: Dynamic Markets
Dynamic Markets Boardwalk Equities Inc. 34
Slide 35: Calgary and Edmonton – Single Family Avg. Resale House Price
Calgary and Edmonton – Single Family Avg. Resale House Price Calgary – Single Family Avg. Resale Price Edmonton – Single Family Avg. Resale Price $300,000 $300,000 Change over 2002 +7.3% Change over 2002 +11.1% $250,000 $250,000 $200,000 $200,000 $150,000 $150,000 $100,000 $100,000 $50,000 $50,000 $
Slide 36: Rental Affordability
Rental Affordability 3000 2500 2000 1500 1000 500 0 Calgary Edmonton Montreal Occupied Rental Rate Ownership P & I Ownership Estimated Total Sources Occupied rental rate – Boardwalk Q1 2003 Financial results Ownership P & I – CMHC Ownership Estimated Total – Estimated P & I being ½ of estimate total
Slide 37: Q1 2003 – Highlights
Q1 2003 – Highlights (millions) - Record Q1 Results % 2002 2003 Change Rental Revenue $ 54.8 $ 65.8 20.1% NOI $ 37.0 $ 41.0 10.9% FFO ex gains $ 14.2 $ 14.4 1.3% FFO/share ex gains $ 0.29 $ 0.29 0.0% FFO ex gains, ex rebate $ 11.0 $ 14.4 31.0% * Same Property Rental Revenue Growth 1.7 Same Property
Slide 38: Q1 2003 – Stabilized Portfolio Review
Q1 2003 – Stabilized Portfolio Review Three Months Ended March 31, 2003 vs. Three Months Ended March 31, 2002 Rental Expenses Utility % of Stab Rental Revenues Utilities Rebate Other Total NOI NOI Calgary -2.6% -23.3% -100.0% 19.1% 1.3% -4.1% 24.7% Edmonton 3.3% -20.8% -100.0% 21.5% 47.3% -11.3% 42.
Slide 39: Capitalization (at March 31, 2003)
Capitalization (at March 31, 2003) Book Value Total Market Shareholders' Capitalization Equity 19% Sh. Equity - Market Cap 35% Mortgage Debt 65% Mortgage Debt 81% $1.6 Billion $2.1 Billion Boardwalk Equities Inc. 39
Slide 40: Mortgage Debt / Total Capitalization / Replacement Value
Mortgage Debt / Total Capitalization / Replacement Value ($MMs) 3500 3000 2500 2000 1500 Replacement Value 1000 Total Capitalization 500 Mortgage 0 y-97 y-98 y-99 y-00 c-00 c-01 c-02 1 03 Ma Ma Ma Ma De De De Q Mortgages represent low percentage of replacement cost Boardwalk Equities Inc. 40
Slide 41: Mortgage Maturities (at March 31, 2003)
Mortgage Maturities (at March 31, 2003) $400,000 8.00% $350,000 7.00% $300,000 6.00% $250,000 Mortgage Balance 5.00% Mar. 31, 2003 $200,000 4.00% (000's) Interest Rate $150,000 3.00% $100,000 2.00% $50,000 1.00% $- 0.00% 03 04 05 06 07 08 09 10 11 12 eq 3 1 nt 20 20 20 20 20 20 20 20 20 20 Su 20 ue
Slide 42: Interest Coverage Ratios
Interest Coverage Ratios Interest Coverage excl. gains on Sales 2.1 1.99 1.99 1.99 2 1.92 1.9 1.84 1.81 1.84 1.77 1.8 1.7 1.6 1.5 1.4 1.3 1.2 1.1 1 2 01 3 01 4 01 1 02 2 02 3 02 4 02 1 03 Q Q Q Q Q Q Q Q Boardwalk Equities Inc. 42
Slide 43: FFO Guidance per share – 2003
FFO Guidance per share – 2003 Affirming 2003 FFO per share Guidance: $1.40-$1.44 Boardwalk Equities Inc. 43
Slide 44: Outlook – Our Strengths
Outlook – Our Strengths • Record growing cash flows • Strongest financial position in Company’s history • High-quality, well-maintained portfolio concentrated in some of the best apartment markets in the country • Strong local market positions in the markets in which we operate • Excellent operation
Slide 45: Outlook / Summary
Outlook / Summary • Well positioned for continued internal growth – high portfolio concentration in growth markets – Alberta projected to lead country in economic growth – modest level of new rental supply • Increasing portfolio diversification and scope – provides lower volatility – enhances access
Slide 46: Questions and Answers
Questions and Answers Certain statements in this presentation may be considered forward-looking statements within the meaning of existing securities laws. Although Boardwalk believes that the expectations set forth in such statements are based on reasonable assumptions, Boardwalk’s future operations