Slate Grocery Reit Class U · TSX:SGR.U
Slate Grocery Reit Class U — Q3 2023 Earnings Presentation
26 slides from Slate Grocery Reit Class U's earnings presentation, November 2023
Slide 1: Slate Grocery REIT Investor Update Q3 2023
Slate Grocery REIT Investor Update Q3 2023
Slide 2: Slate Grocery REIT – Overview
Slate Grocery REIT – Overview 100% Pure-play grocery- anchored focused SGR.UN TSX-Listed $2.4B Asset value 1, 2 117 Properties All U.S. locations 1 15.3M Square feet 1 24 States 1 $12.37 PSF in-place rent 1 Note: Amounts are in US$. 1 As at September 30 2023. 2 Includes the REIT’s proportionate shar
Slide 3: Outlook on Grocery
Outlook on Grocery Wedgewood Commons, Port St. Lucie, FL
Slide 4: Why Grocery Real Estate?
Why Grocery Real Estate? Necessity Based • Consumers require food and essential items in all economic conditions Defensive Asset Class with Historically Resilient Income Streams • Grocery has a proven ability to outperform in periods of economic volatility Facilitates Omni-Channel Distribution • All
Slide 5: Grocery Stores Facilitate the Last Mile
Grocery Stores Facilitate the Last Mile Grocery stores play a critical role in distributing food and other essential goods to end consumers by facilitating the last mile of food logistics 89% Over 94% of grocer sales are fulfilled of Grocer Sales using physical stores In Store Purchasing 5% of Groce
Slide 6: Consumers Require Essential Goods in Good and Bad Times
Consumers Require Essential Goods in Good and Bad Times Food retailers comprise 18 of the 25 largest consumer good distributors globally 1 Top 25 Global Retailers, Ranked by Revenue Walmart Inc Amazon Costco Non-Food Schwarz Group Home Depot Retailer, Kroger 19% JD.com Walgreens Aldi Target CVS Lowe
Slide 7: Grocery-Anchored Real Estate is Resilient
Grocery-Anchored Real Estate is Resilient Grocers outperform in recessionary environments Annual sales growth 1 (%) Grocery Retail 30 25 25 15 20 15 5 10 (5) 5 (15) 0 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020 2022 1 CBRE Econometric Advisors, Q3 2023. Slate Grocery REIT |
Slide 8: Increasing Retail Sales Support Rent Growth
Increasing Retail Sales Support Rent Growth Steadily increasing retail sales are enabling tenants to manage growing rental rates Annual retail sales and retail SF per capita, 2006 = 100 1 180 160 140 120 100 80 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023F 202
Slide 9: Strip Center Fundamentals Remain Strong
Strip Center Fundamentals Remain Strong Strong tenant demand for grocery-anchored centers and limited new construction have resulted in record-low new supply and robust rent growth Strip Center – Net Absorption & New Supply 1 Strip Center – Overall Vacancy & Base Rent 1 Millions of Square feet $23.0
Slide 10: Operations and Strategy Update
Operations and Strategy Update Tanglewood Commons, Winston-Salem, NC
Slide 11: World Class Grocery and Essential Based Tenants
World Class Grocery and Essential Based Tenants Top five tenants Essential tenancies Omnichannel distribution SGR’s portfolio is comprised of the world’s High concentration of essential and grocery SGR’s properties are key to the distribution largest, most sophisticated, credit-worthy tenants of in-
Slide 12: Strong Presence in Growing Markets
Strong Presence in Growing Markets #3 Top States New York > 11% of GLA % of GLA 11% 5% - 10% of GLA # of Properties 12 < 5% of GLA #2 North Carolina Top 5 MSAs % of GLA % of GLA 13% Dallas 6% # of Properties 16 Atlanta 6% Charlotte 5% Greenville 4% #4 Rochester 4% Georgia % of GLA 7% # of Properties
Slide 13: Protection in an Inflationary Environment
Protection in an Inflationary Environment Below market in-place rents create long-term growth opportunities and the net lease structure provides protection against rising operating expenses $12.37 $12.22 Historical leasing spreads have 12.8% consistently outpaced inflation 11.3% $11.60 11.1% $11.21
Slide 14: Track Record of Creatively Sourcing Acquisitions
Track Record of Creatively Sourcing Acquisitions SGR has executed over $900 million of opportunistic acquisitions since 2021 2 single asset 5 property portfolio 25 property portfolio 14 property portfolio acquisitions Date February 10, 2021 July 15 & September 9, 2021 September 22, 2021 June 30 & Ju
Slide 15: Operational Excellence
Operational Excellence 2.3M +9.0% 01 Robust leasing volumes at strong rental spreads generating occupancy gains SF of total leasing YTD Spreads on total leasing YTD 1 02 Fixed majority of the REIT’s total debt and addressed all near-term debt maturities 96.1% Fixed rate debt at Q3 2023 163 875K SF 0
Slide 16: The Investment Opportunity
The Investment Opportunity Sheridan Square, Miami-Fort Lauderdale, FL
Slide 17: The Investment Opportunity
The Investment Opportunity Slate Grocery REIT is undervalued relative to Canadian peers 1 2024E AFFOx 14.1x 13.4x 14.4x 13.3x 12.6x 11.9x 11.1x 10.6x 8.4x Granite Dream Industrial Choice Properties First Capital Crombie SmartCentres RioCan Plaza Retail Slate Grocery REIT Industrial REITs Retail REIT
Slide 18: The Investment Opportunity
The Investment Opportunity Slate Grocery REIT is undervalued relative to US peers 1 2024E AFFOx 18.9x 18.5x 18.4x 16.8x 15.2x 15.0x 15.0x 14.7x 14.6x 14.1x 8.4x Urban Edge Phillips Edison Federal Realty Regency ROIC Acadia Realty SITE Centers Kimco Realty Kite Realty Brixmor Slate Grocery Properties
Slide 19: Valuation Observations
Valuation Observations SGR remains undervalued when comparing capitalization rates and in-place rents against US Peers 1 $31.17 8.7% $31.03 8.4% 8.0% $24.16 7.7% 7.4% 7.5% 7.3% 7.2% 7.3% $22.78 $22.06 $20.19 $19.89 $20.09 $20.00 6.8% 6.6% 6.5% $16.60 $14.64 $12.37 Retail Brixmor Strip Center Slate F
Slide 20: Environmental, Social, & Governance
Environmental, Social, & Governance ESG Priorities Current ESG Initiatives • Energy, carbon, water and waste data collection will support Managing climate change risks and opportunities IFRS/ISSB 1 sustainability and climate reporting requirements. • Energy audits are being considered to support the
Slide 21: Closing Thoughts
Closing Thoughts 01 Grocery-anchored real estate facilitates the last mile of food logistics and has proven its resiliency and ability to perform in all market conditions 02 The REIT’s in-place rents are significantly below market, providing runway for long-term revenue growth and value creation 03
Slide 22: Additional Information
Additional Information Mooresville Town Square, Mooresville, NC
Slide 23: Strong Corporate Governance
Strong Corporate Governance Compensation, Governance Independent Audit Committee Investment Committee and Nominating Committee Andrea Stephen Yes Member Member Member (Chair of the Board) Colum Bastable Yes Chair Member Member Christopher Chee Yes Member Patrick Flatley Yes Member Marc Rouleau Yes M
Slide 24: Analyst Coverage
Analyst Coverage CIBC Capital Markets Raymond James Sumayya Syed Brad Sturges sumayya.syed@cibc.com brad.sturges@raymondjames.ca Cormark Securities RBC Capital Markets Sairam Srinivas Pammi Bir ssrinivas@cormark.com pammi.bir@rbccm.com Laurentian Bank Securities Scotiabank Gaurav Mathur Himanshu Gup
Slide 25: Disclaimer
Disclaimer Forward-Looking Statements This presentation contains forward-looking information within the meaning of applicable securities laws. These statements include, but are not limited to, statements concerning the REIT’s objectives, its strategies to achieve those objectives, as well as stateme
Slide 26: Slate Asset Management
Slate Asset Management 121 King Street W, Suite 200 Toronto, ON M5H 3T9 slateam.com