Riocan Real Estate Investment Trust · TSX:REI.UN
Riocan Real Estate Investment Trust — Q3 2019 Earnings Presentation
18 slides from Riocan Real Estate Investment Trust's earnings presentation, Nov 6, 2019
Slide 1: Building on Experience, Shaping the Future
BUILDING ON EXPERIENCE, SHAPING THE FUTURE RioCan Conference Call Presentation – Third Quarter 2019 November 6, 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 Q3 | RioCan | 03
Slide 4: Operational Highlights
OPERATIONAL HIGHLIGHTS Total Portfolio FFO per Unit Major Market Same Property Same Property NOI NOI Guidance for 2020 >3.0% $0.47 $0.47 2.3% 2.1% Q3 2018 Q3 2019 Q3 2018 Q3 2019 Renewal Leasing Spread Committed Occupancy 97.7% for major 7.7% for markets 97.0% 97.2% major markets 7.7% -1.4% Q3 2018
Slide 5: Operational Highlights
OPERATIONAL HIGHLIGHTS % of Revenues from Major Markets RENT BREAKDOWN Q3 2019 88.7% >90% 87.8% 74.1% OF RENT FROM NECESSITY- BASED AND SERVICE-ORIENTED TENANTS Entertainment & Hobby Department Movie Theatres 3.1% Stores & 4.5% Apparel 8.4% 4% since 2007 8% Q2 2019 Q3 2019 Vision since 2007 Grocery
Slide 6: Development Progressing Well
RESIDENTIAL RENTAL DEVELOPMENT LEASING HIGHLIGHTS PROGRESSING WELL eCentral & eCondos • 365 units (78%) leased as of November 5, 2019 with 328 units (70%) occupied as of September 30, 2019 • Rents averaging $3.90 per sf (for market rent units) • Stabilization expected by end of first quarter 2020 •
Slide 7: 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. 43 potential 20,000 2,700 units 2,100 additional 100% located residential potential curre
Slide 8: Financial Overview
Financial Overview Qi Tang Senior Vice President & Chief Financial Officer Q3 | RioCan | 08
Slide 9: Funds From Operations (FFO) & Payout Ratio
FUNDS FROM OPERATIONS (“FFO”) & PAYOUT RATIO • FFO per unit of $0.47 in Q3 2019 was flat to FFO per Unit Q3 2018, despite: o $14.7M lower realized gains due to lower $0.47 $0.47 number of marketable securities sold o $1.5M lower capitalized interest mainly as a result of development completions o $1
Slide 10: Book Value per Unit Growth
BOOK VALUE PER UNIT GROWTH Book value per unit has increased by 4.0% compared to Q3 2018 $27.00 $26.01 $26.00 $25.78 $25.34 $25.02 $25.13 $25.00 $24.00 $23.00 Q3 2018 Q4 2018 Q1 2019 Q2 2019 Q3 2019 Q3 | RioCan | 10
Slide 11: Strong Net Rent Growth
STRONG NET RENT GROWTH +6.4% $19.49 Average net rent psf of $18.32 $33.96 on active urban intensification projects on 691k sf of committed or in-place leases as of November 5, 2019 Q3 2018 Q3 2019 Net rent CAGR since 2015 ─ 3.5% $20.00 $19.49 $19.07 $19.00 $18.00 $17.59 $17.75 $17.11 $17.00 $16.00 $
Slide 12: Development Progressing Well
DEVELOPMENT PROGRESSING DEVELOPMENT PROGRESSINGWELL WELL Key Statistics Development Completions Q1 Q2 Q3 Q3 YTD - Net leasable area completed (in sf) 92,000 269,000 51,000 412,000 - Costs transferred $101.8M $105.0M $48.5M $255.3M Development Expenditures $92.5M $102.5M $135.2M $330.2M Total Pipelin
Slide 13: 2019 Inventory Gains
2019 INVENTORY GAINS DEVELOPMENT PROGRESSING WELL Q1 Q2 Q3 2019 Projection $5.1M $7.8M $12.3M ~$36M Yonge Eglinton Northeast King Portland Windfield Farms Corner (eCondos) Centre (Kingly) Townhomes Q3 | RioCan | 13
Slide 14: Future Inventory Gains – Selected Projects
FUTURE INVENTORY GAINS – SELECTED PROJECTS Yorkville Project (11YV) Windfield Farms Condos 73% of the 593 units sold as of November 5, 2019. 62% of the 503 units sold as of November 5, 2019. Estimated value creation range of 15%-17% with Estimated value creation range of 17%-20% with first possessio
Slide 15: 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 September 30, 2019 Properties Under Development (PUD) & Residential Inventory $1.3B N/A PUD and Residential Inventory as % of Gross Assets – Per Line of 8.8% ~ 10
Slide 16: Capital Structure Metrics
STRONG BALANCE SHEET PRUDENT CAPITAL MANAGEMENT & FLEXIBLE CAPITAL STRUCTURE Capital Structure Metrics Target Q3 20191 Debt to Adjusted EBITDA <8.0x 8.07x Debt to Total Assets 38% - 42% 43.6% 2 Interest Coverage >3.0x 3.48x Debt Service Coverage >2.25x 2.95x Fixed Coverage >1.10x 1.16x Unencumbered
Slide 17: Closing Remarks
Closing Remarks Edward Sonshine, O.Ont., Q.C. Chief Executive Officer Q3 | RioCan | 17
Slide 18: 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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