54 slides from First Capital Real Estate Investment Trust's earnings presentation, Aug 4, 2016
Slide 1: Q2 2016 Investor Presentation
Q2 2016 INVESTOR PRESENTATION
Slide 2: Forward-Looking Statements
Forward-Looking Statements This material may contain forward-looking statements, including those identified by the expressions “anticipate”, “believe”, “plan”, “estimate”, “expect”, “intend” and similar expressions to the extent they relate to the Company or its management. The forward-looking state
Slide 3: Corporate Snapshot (TSX: FCR)
Corporate Snapshot (TSX: FCR) One of Canada’s largest owners, developers and managers of grocery anchored, retail-focused urban properties where people live and shop for everyday life • Large urban market focus across Canada • 161 properties • 25.2 million sq. ft. (23.9 million sq. ft. at FCR share)
Slide 4: Key Investment Highlights: Best in Class Portfolio
Key Investment Highlights Best in Class Portfolio: • High quality major market, Canadian retail portfolio • Defensive asset class with high barriers to entry • Strategic and diversified tenant mix • Industry leading same property income growth 4
Slide 5: Key Investment Highlights: Growth – Proven Development Capability
Key Investment Highlights Growth – Proven Development Capability: • Focused on long-term value creation • Internal capability with strong track record of development and repositioning • Over $1 billion of development planned for delivery over the next several years 5
Slide 6: Key Investment Highlights: Strong and Flexible Financial Position
Key Investment Highlights Strong and Flexible Financial Position: • Strong balance sheet (43.1% levered at June 30, 2016) • $6.1 billion of unencumbered assets • Well-staggered debt maturities • Investment grade ratings by DBRS and Moody’s 6
Slide 7: Track Record of Outperformance
Track Record of Outperformance Total Returns vs. Indices as at September 14, 2016 21.1% 20.0% First Capital Realty S&P/TSX Capped REIT Index S&P/TSX Composite 14.7% 15.0% 12.8% 10.1% 10.0% 8.9% 7.3% 7.0% 6.3% 5.1% 5.0% 0.0% YTD 5 Year CAGR 10 Year CAGR 7
Slide 8: Best In Class Portfolio
Best In Class Portfolio J SS
Slide 9: Urban Markets with High Barriers to Entry
Urban Markets with High Barriers to Entry Central Canada Eastern Canada Western Canada Properties: 60 Properties: 52 Properties: 49 GLA: 9.4M GLA: 8.2M GLA: 7.7M AMR%: 42% AMR%: 25% AMR%: 33% WESTERN - 9% CANADA CENTRAL EASTERN CANADA CANADA - 12% - 11% - 2% - 6% - 16% - 33% 9
Slide 10: Improving Portfolio Demographics
Improving Portfolio Demographics FCR Portfolio Demographic Metrics: 2009* vs. Q2 2016* 188,700 134,000 137,000 $96,000 US$94,000 $76,000 FCR FCR US Peers** 2009 Q2 2016 FCR FCR US Peers** 2009 Q2 2016 5 Km Population 5 Km Population 5 Km Household Income As of June 30, 2016 * Source: Statistics Cana
Slide 11: Superior Rent Growth Potential
Superior Rent Growth Potential GROWTH IN POPULATION OR INCOME > GROWTH IN RETAIL SPACE = INCREASED tenant sales = INCREASED rents 11
Slide 12: Industry Leading Performance: Same Property NOI Growth
Industry Leading Performance Total Same Property NOI Growth 8.00% 7.00% 5 year average 10 year average 3.1% 4.1% 6.00% 5.00% 4.00% 3.00% 2.00% 1.00% 0.00% 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 H1 16 -1.00% 12
Slide 13: Industry Leading Performance: Lease Renewal Rate Increases
Industry Leading Performance Lease Renewal Rate Increases 16.00% 14.00% 5 year average 10 year average 9.6% 10.5% 12.00% 10.00% 8.00% 6.00% 4.00% 2.00% 0.00% 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 H1 16 Represents increase on total portfolio basis, and includes renewal options as well as
Slide 14: FCR’s Alberta Portfolio
FCR’s Alberta Portfolio (~ 5M SF) YoY Total Q1 2015 Q2 2015 Q3 2015 Q4 2015 Q1 2016 Q2 2016 Change Portfolio Renewal Rate Increase 7.4% 15.2% 10.0% 8.0% 12.4% 9.0% 9.6%* 8.4% Average Net Rental Rate $20.24 $20.51 $20.77 $20.80 $20.85 $21.00 2.5% 1.9% Occupancy 96.0% 96.6% 94.7% 94.9% 95.7% 96.1% -0.
Slide 15: Strategic and Diversified Tenant Mix
Strategic and Diversified Tenant Mix Over 80% of revenues come from necessity based retailers Category # of Stores % of Rent Supermarkets 131 17.2% Pharmacies 135 9.3% Liquor Stores 94 3.2% Financial 326 9.7% Institutions Restaurants 959 13.9% Medical & Personal 1,105 10.4% Services Fitness Faciliti
Slide 16: Top 20 Tenants
Top 20 Tenants Contribute 45% of annualized minimum rent (AMR) Investment Investment Rank # Tenant AMR Rank # Tenant AMR Grade Grade 1. 10.2%* ✓ 11. 1.2% ✓ 2. 6.7% ✓ 12. 1.1% ✓ 3. 3.5% ✓ 13. 1.1% ✓ 4. 2.9% ✓ 14. 1.1% - 5. 2.8% ✓ 15. 1.1% - 6. 2.1% ✓ 16. 1.0%** - 7. 1.9% ✓ 17. 0.9% ✓ 8. 1.8% - 18. 0.
Slide 17: Sample of Retailers Expanding in FCR Portfolio or in Canada
Sample of Retailers Expanding in FCR Portfolio or in Canada La Cure Gourmande 17
Slide 18: Focused Acquisitions and Non-core Asset Sales
Focused Acquisitions and Non-core Asset Sales 18
Slide 19: Pending Acquisition (IPP) Yonge and Bloor, Toronto
Pending Acquisition (IPP) Yonge and Bloor, Toronto, ON 3KM Demographics AVG Population (2015 Est.) 279,418 Population (FCR Avg.) 77,605 Household Income (2015 Est.) $117,023 Household Income (FCR Avg.) $96,454 Subject Site: 1 Bloor Street East 19
Slide 20: Pending Acquisition (IPP) Yonge and Bloor, Toronto
Pending Acquisition (IPP) Yonge and Bloor, Toronto, ON Retail GLA 85,000 SF Commercial Parking 52 Stalls Purchase Price $189 Million 20
Slide 21: Loan and Pending Acquisition (IPP) Avenue & Lawrence, Toronto
Loan and Pending Acquisition (IPP) Avenue & Lawrence, Toronto, ON Avenue Road Subject Site: Pusateri’s Assembly Lawrence Avenue Demographics 3KM AVG Population (2015 Est.) 166,792 Population (FCR Avg.) 77,605 Household Income (2015 Est.) $168,418 Household Income (FCR Avg.) $96,454 Purchase Price $6
Slide 22: Recent Acquisition (IPP) Griffintown, Montreal
Recent Acquisition (IPP) Griffintown, Montreal, QC Property Statistics 3KM AVG Population (2011 Census ) 116,000 Household Income $75,000 (2011 Census) Household income Change 24.36% vs 2006 census 22
Slide 23: Recent Acquisition (IPP) Griffintown, Montreal
Recent Acquisition (IPP) Griffintown, Montreal, QC • 260,000 square feet • ~ $114 million investment • Key tenants: 23
Slide 24: Recent Acquisition – Major Redevelopment Property, Former Christie Cookie Site
Recent Acquisition – Major Redevelopment Property Former Christie Cookie Site, Toronto, ON 27 acres Demographics 3KM AVG Population (2015 Est.) 74,755 Household Income (2015 Est.) $107,799 Household Income (FCR Avg.) $96,454 24 50% Partner (non-managing)
Slide 25: Re-positioning the Portfolio through Non-Core Asset Sales
Re-positioning the Portfolio through Non-Core Asset Sales Dispositions 2012 – H1 16 Sale Price $890 million* NOI Sold $50 million * Includes $80 million of land dispositions 25
Slide 26: Development, Re-development and Intensification
Development, Re-development and Intensification (Core Competency) 26
Slide 27: Investment in Development and Redevelopment
Investment in Development and Redevelopment $70.8 million during H1 16 Yorkville Village Assets 3080 Yonge Street Mount Royal Village Assets Toronto, ON Toronto, ON Calgary, AB King High Line Edmonton Brewery District Toronto, ON Edmonton, AB Pipeline: 13M square feet = 3M square feet Retail + 10M s
Slide 28: Yorkville Village, Toronto, ON
Yorkville Village, Toronto, ON Property Statistics 3KM AVG Population (2011 Census ) 263,000 Household Income (2011 Census ) $106,000 Planned GLA upon completion (Yorkville Village) 285,000 One Bloor GLA 85,000 Total Bloor/Yorkville 370,000 28
Slide 29: Yorkville Village, Toronto, ON
Yorkville Village, Toronto, ON Avenue Road Façade Before 29 Current
Slide 30: Yorkville Village, Toronto, ON
Yorkville Village, Toronto, ON Avenue Road New Yorkville Entrance Avenue Road Interior Mall New Food Hall 30
Slide 31: Yorkville Village, Toronto, ON
Yorkville Village, Toronto, ON Street Front Retail FUTURE 31
Slide 32: Mount Royal Village, Calgary, AB
Mount Royal Village, Calgary, AB Property Statistics 3KM AVG Population (2011 Census ) 97,300 Household Income $135,000 (2011 Census) Household income 59.9% Change vs 2006 census Total Acreage 4.1 Planned GLA upon 380,000 completion 32
Slide 33: Mount Royal Village, Calgary, AB
Mount Royal Village, Calgary, AB Redevelopment Phase recently completed Before Current 33
Slide 34: Mount Royal Village, Calgary, AB
Mount Royal Village, Calgary, AB Phase Under Development 34
Slide 35: Liberty Village Assets, Toronto, ON
Liberty Village Assets, Toronto, ON Urban Retail and Residential Development Property Statistics 3KM AVG Population (2011 Census) 176,000 Household Income $73,000 (2011 Census) Household income 13.2% Change vs 2006 census Total Acreage 14.1 Total Commercial GLA 470,000 Total Residential GLA 310,000
Slide 36: King High Line, Liberty Village, Toronto, ON
King High Line, Liberty Village, Toronto, ON Phase Under Development Property Statistics Acreage 2.8 Residential 310,000 sq. ft. Retail 150,000 sq. ft. Total GLA 460,000 sq. ft. 36
Slide 37: Brewery District, Edmonton, AB
Brewery District, Edmonton, AB Property Statistics 3KM AVG ARENA Population 80,000 DISTRICT (2011 Census ) Household Income $76,000 (2011 Census) Household income 12.9% Change vs 2006 census Total Acreage 11.8 Planned GLA upon 310,000 completion FUTURE HIGH DENSITY RESIDENTIAL 37
Slide 38: Brewery District, Edmonton, AB
Brewery District, Edmonton, AB 38
Slide 39: 3080 Yonge St., Toronto, ON
3080 Yonge St., Toronto, ON Re-development Commenced Property Statistics 3KM AVG Before Population 136,000 (2011 Census ) Household Income $183,000 (2011 Census) Household income 47.08% Change vs 2006 census Total Acreage 2.0 Planned GLA upon 250,000 completion 39
Slide 40: 3080 Yonge St., Toronto, ON
3080 Yonge St., Toronto, ON Future 40
Slide 41: Property Management and Leasing
Property Management and Leasing (Core Competency) 41
Slide 42: Merchandising with Strategic Tenant Mix
Merchandising with Strategic Tenant Mix 42
Slide 43: Maple Grove Shopping Centre, Oakville, ON
Maple Grove Shopping Centre, Oakville, ON Façade Renovation Program Before 43
Slide 44: Proactive Real Estate Management
Proactive Real Estate Management Rooftop Patios Quick Park 44
Slide 45: Corporate Sustainability
Corporate Sustainability Sustainability Vision: To enhance long-term value by minimizing our impact on the environment and positively affecting the people and the communities in which we live and work. Highest ranked real estate company in Corporate Knights “2015 Future 40 Responsible Corporate Lead
Slide 46: Community Building: FCR Public Arts Program
Community Building FCR Public Arts Program 21 Art Installations across our portfolio Public Art Competition in partnership with: 46
Slide 47: Financial Strength and Flexibility
Financial Strength and Flexibility 47
Slide 48: Capital Structure
Capital Structure Enterprise Value $9.2 Billion Mortgages and Secured Facilities: $1.2 Billion 13% Unsecured Debentures and Unsecured Facility: $2.6 Billion 28% Convertible Debentures* (option to pay in shares): $0.2 Billion 2% Equity Capitalization: $5.2 Billion (235.1 Million shares) 57% Significa
Slide 49: Financial Strength and Flexibility
Financial Strength and Flexibility Q2 2016 2015 2010 Unsecured credit facility $800M $800M — 70% of total Unencumbered assets ($ billions) assets $6.1 $5.8 $1.5 Unencumbered assets to unsecured debt 2.4x 2.3x 1.4x Secured debt as % of total assets 13.6% 13.1% 26.4% Net debt to total assets 43.1% 42.
Slide 50: Well-Staggered Term Debt Maturities
Well-Staggered Term Debt Maturities Weighted Average Interest Rate 4.6% Senior Unsecured Debentures Weighted Average Term to Maturity 5.6 years Mortgages 7.00% 100% of Term Debt is Fixed Rate Millions Weighted Average Effective Interest % $600 6.00% $500 5.00% $400 4.00% $300 3.00% $200 2.00% $100 1
Slide 51: Historical Performance
Historical Performance Conservative FFO Payout Ratio Operating FFO Operating FFO Payout Ratio $250 $236 85% $215 $220 $200 $189 84% $162 $150 83% 83% 82% 82% 82% 82% $100 82% $50 81% $- 80% 2011 2012 2013 2014 2015 Per Diluted Share $0.96 $1.00 $1.03 $1.04 $1.05 Regular Dividends $0.80 $0.82 $0.84 $
Slide 52: Outlook
Outlook Best in Class Portfolio: • High quality major market, Canadian retail portfolio • Defensive asset class with high barriers to entry • Industry leading same property income growth Growth – Proven Development Capability: • Internal capability with strong track record for development and re-pos
Slide 53: Outlook
Outlook Net Asset Value Growth: • Active asset management • Development, re-development and intensification FFO Growth: • Same property NOI growth • New investments (acquisitions, development and re-development) • Operating efficiencies 53
Slide 54: Contact Information
Contact Information First Capital Realty Inc. Shops at King Liberty 85 Hanna Ave, Suite 400 Toronto, Ontario Tel (416) 504-4114 Fax (416) 941-1655 www.firstcapitalrealty.ca TSX: FCR Adam Paul, President & CEO Kay Brekken, Executive Vice President & CFO 54