Riocan Real Estate Investment Trust · TSX:REI.UN
Riocan Real Estate Investment Trust — Q2 2019 Earnings Presentation
21 slides from Riocan Real Estate Investment Trust's earnings presentation, Aug 2, 2019
Slide 1: Building on Experience, Shaping the Future
BUILDING ON EXPERIENCE, SHAPING THE FUTURE RioCan Conference Call Presentation – Second Quarter 2019 August 2, 2019
Slide 2: Forward Looking Advisory & Non-GAAP Measures
FORWARD LOOKING ADVISORY & NON-GAAP MEASURES FORWARD LOOKING INFORMATION Certain information included in this presentation contains forward-looking statements within the meaning of applicable securities laws including, among others, statements concerning our objectives, our strategies to achieve tho
Slide 3: Operational Overview
Operational Overview Jonathan Gitlin, President & Chief Operating Officer Q2 | RioCan | 03
Slide 4: Operational Highlights
OPERATIONAL HIGHLIGHTS FFO per Unit Major Market Same Property NOI +3.4% $0.48 2.9% $0.46 2.5% Q2 2018 Q2 2019 Q2 2018 Q2 2019 Renewal Leasing Spread Committed Occupancy 97.8% for major 12.4% for markets 96.8% 97.1% major markets 10.9% 4.2% Q2 2018 Q2 2019 Q2 2018 Q2 2019 Q2 | RioCan | 04
Slide 5: Operational Highlights
OPERATIONAL HIGHLIGHTS % of Revenues from Major Markets RENT BREAKDOWN Q2 2019 >90% 87.5% 87.8% 74% OF RENT FROM NECESSITY-BASED AND SERVICE-ORIENTED TENANTS Entertainment & Hobby Department Movie Theatres 3.1% Stores & 4.7% Apparel 8.3% 4% since 2007 8% Q1 2019 Q2 2019 Vision since 2007 Grocery / P
Slide 6: Successful Repositioning of Properties
SUCCESSFUL REPOSITIONING OF PROPERTIES Burlington Centre, Burlington, ON Yonge Sheppard Centre, Toronto, ON Q2 | RioCan | 06
Slide 7: Acquisition of Yonge Sheppard Centre and Pivot
ACQUISITION OF YONGE SHEPPARD CENTRE AND PIVOT • Located at one of Toronto’s busiest intersections, with access to the Yonge and Sheppard subway lines • This mixed-use development will feature 401k sf of office space, 299k sf of retail space, and 258k sf of residential space (361 units) upon complet
Slide 8: Development Progressing Well
RESIDENTIAL RENTAL DEVELOPMENT LEASING HIGHLIGHTS PROGRESSING WELL eCentral & eCondos • 277 units (59%) leased as of August 1, 2019 with 209 units (45%) occupied as of June 30, 2019 • Rents averaging $3.88 per sf (for market rent units) • Stabilization expected by mid-2020 • $3.1M gains recognized i
Slide 9: Driving Long Term Growth
DRIVING LONG TERM GROWTH Delivering best-in-class purpose-built rental units and condos along Canada’s most prominent transit corridors, RioCan Living shapes the communities where Canadians shop, live and work. 41 potential 20,000 2,700 units 2,100 additional 100% located residential potential curre
Slide 10: Financial Overview
Financial Overview Qi Tang Senior Vice President & Chief Financial Officer Q2 | RioCan | 10
Slide 11: Funds From Operations (FFO) & Payout Ratio
FUNDS FROM OPERATIONS (“FFO”) & PAYOUT RATIO • FFO per unit of $0.48 in Q2 2019 was $0.02 FFO per Unit or 3.4% higher than Q2 2018, the highest +3.4% since Q4 2015 despite: $0.48 $0.46 o $0.7B in asset sales since Q2 2018 o $14.6M lower realized gains due to lower number of marketable securities sol
Slide 12: Same Property NOI Growth
SAME PROPERTY NOI GROWTH Strong same property NOI growth particularly in the major market portfolio Major Markets Total Portfolio 5.4% 4.5% 1.5% 1.4% 1.0% 0.9% 2.5% 2.9% 2.1% 2.2% Q2 2018 Q2 2019 Q2 2018 Q2 2019 Management expects same property NOI growth to be between 2% and 3% for 2019 prior to an
Slide 13: Strong Net Rent Growth
STRONG NET RENT GROWTH +5.8% $19.26 Average net rent psf of $18.20 $33.06 on active urban intensification projects on 674k sf of committed or in-place leases as of August 1, 2019 Q2 2018 Q2 2019 Net rent CAGR since 2015 ─ 3.4% $20.00 $19.07 $19.26 $19.00 $18.00 $17.59 $17.75 $17.11 $17.00 $16.00 $15
Slide 14: Development Progressing Well in First Half of 2019
COMPLETED STRATEGIC DEVELOPMENT ACQUISITIONS PROGRESSING WELLIN FIRST HALF OF 2019 7 $320.4M 6.32% ~1.1M SF Income Producing Total IPP Purchase Weighted Average Net Leasable Properties (IPP) 1 Price 2 Capitalization Rate Area Stockyards Village, Toronto, ON Mill Woods Town Centre, Edmonton, AB 1. Ac
Slide 15: 2019 Inventory Gains
2019 INVENTORY GAINS DEVELOPMENT PROGRESSING WELL Q1 Q2 2019 Projection $5.1M $7.8M ~$36M Yonge Eglinton Northeast King Portland Windfield Farms Corner (eCondos) Centre (Kingly) Townhomes Q2 | RioCan | 15
Slide 16: Future Inventory Gains – Selected Projects
FUTURE INVENTORY GAINS – SELECTED PROJECTS Yorkville Project (11YV) Windfield Farms Condos Q2 | RioCan | 16
Slide 17: Development Progressing Well
DEVELOPMENT PROGRESSING DEVELOPMENT PROGRESSINGWELL WELL Key Statistics Development Completions Q1 Q2 Q2 YTD - Net leasable area completed (in sf) 92,000 269,000 361,000 - Costs transferred $101.8M $105.0M $206.8M Development Expenditures $92.5M $102.5M $195.0M Total Pipeline by Zoning Status (27.2M
Slide 18: Well-Positioned for Value Creation
WELL-POSITIONED FOR VALUE CREATION Prudent approach to development • RioCan plans to self fund development as much as possible As at Target June 30, 2019 Properties Under Development (PUD) & Residential Inventory $1.2B N/A PUD and Residential Inventory as % of Gross Assets – Per Line of 8.0% ~ 10%1
Slide 19: Strong Balance Sheet
STRONG BALANCE SHEET PRUDENT CAPITAL MANAGEMENT & FLEXIBLE CAPITAL STRUCTURE Capital Structure Metrics Target Q2 20191 Debt to Adjusted EBITDA <8.0x 7.92x Debt to Total Assets 38% - 42% 42.9% 2 Interest Coverage >3.0x 3.52x Debt Service Coverage >2.25x 2.99x Fixed Coverage CONSISTENTLY ABOVE 95% >1.
Slide 20: Closing Remarks
Closing Remarks Edward Sonshine, O.Ont., Q.C. Chief Executive Officer Q2 | RioCan | 20
Slide 21: Contact Information
Edward Sonshine, O.Ont., Q.C. Chief Executive Officer Jonathan Gitlin President & Chief Operating Officer Qi Tang Senior Vice President & Chief Financial Officer Contact Information RioCan Yonge Eglinton Centre 2300 Yonge Street P.O. Box 2386 Toronto, ON M4P 1E4 (T) 1-800-465-2733 or (416) 866-3033
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