Riocan Real Estate Investment Trust · TSX:REI.UN
Riocan Real Estate Investment Trust — Q4 2019 Earnings Presentation
21 slides from Riocan Real Estate Investment Trust's earnings presentation, Feb 20, 2020
Slide 1: Building on Experience, Shaping the Future
BUILDING ON EXPERIENCE, SHAPING THE FUTURE RioCan Conference Call Presentation – Fourth Quarter 2019 February 20, 2020
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 Q4 | RioCan | 3
Slide 4: Strategic Milestones Achieved
STRATEGIC MILESTONES ACHIEVED Total Annualized Rental Revenue % Derived % Derived from Major Markets from GTA 90.1% >90% 85.4% 52.4% 46.8% >50% 2018 2019 Vision 2018 2019 Vision Q4 | RioCan | 4
Slide 5: Diversified Portfolio Provides Consistent Growth
DIVERSIFIED PORTFOLIO PROVIDES CONSISTENT GROWTH Primarily necessity-based and service-oriented property and tenant mix Property Mix Tenant Mix 62.9% of Rent From Mixed-Use Urban Assets and 74.5% of Rent From Necessity-Based and Grocery Anchored Centres Service-Oriented Tenants Entertainment/Hobby/E
Slide 6: Operational Highlights: Same Property NOI Growth
OPERATIONAL HIGHLIGHTS Same Property NOI (SPNOI) Growth 4.0% >3.0% 3.0% 2.5% 2.1% 2.0% 1.0% 0.0% 2019 2019 2020 Total Portfolio Major Market Total Portfolio SPNOI Growth Guidance Q4 | RioCan | 6
Slide 7: Operational Highlights
OPERATIONAL HIGHLIGHTS Committed Occupancy Retention Ratio 97.7% Major 91.2% 89.4% Markets 97.1% 97.2% Committed Occupancy 2018 2019 2018 2019 Renewal Leasing Spread (%) Blended Leasing Spread (%) 9.2% 9.4% 5.0% 2.6% 2018 2019 2018 2019 Q4 | RioCan | 7
Slide 8: Development Progressing Well
RESIDENTIAL RENTAL DEVELOPMENT LEASING HIGHLIGHTS PROGRESSING WELL eCentral & eCondos, Toronto ON • 401 units (86%) leased as of February 19, 2020 • Rents averaging $3.90 per sf (for market rent units) • Stabilization expected by Spring 2020 • $118.7M estimated incremental value creation including 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 ~100% of development projects are ~98% of projects are Completed / Under Construction 1 Co
Slide 10: More Residential Rental Units on the Way
MORE RESIDENTIAL RENTAL UNITS ON THE WAY Mixed-use development in high growth, densely populated, transit-oriented locations in major markets Fifth and Third East Village, Calgary, AB Yonge Sheppard Centre Residential (Pivot), Toronto, ON Phase I Phase II Brentwood Village (Brio), Calgary, AB Glouce
Slide 11: Future Inventory Gains
FUTURE INVENTORY GAINS 11 YV Condos, Toronto Windfield UC Tower Condos, Oshawa (GTA) 83% of the 593 units sold as of Feb 19, 2020 74% of the 503 units sold as of Feb 19, 2020 Estimated value creation range1 of 15%-17% Expected value creation range1 of 17%-20% Winner of Multi-Family Community of the
Slide 12: Committed to ESG
COMMITTED TO ESG Systematically embed environmental, social, and governance (ESG) considerations 2020 Sustainability Report to be Issued in July 2020 Environmental Tenant Engagement GRESB Score Management System Survey 77% Improved Public Disclosure Score and achieved a 77% increase and Utility Data
Slide 13: Financial Overview
Financial Overview Qi Tang Senior Vice President & Chief Financial Officer Q4 | RioCan | 13
Slide 14: Funds From Operations (FFO) & Payout Ratio
FUNDS FROM OPERATIONS (“FFO”) & PAYOUT RATIO • FFO per Unit of $1.87, $0.02 higher than the prior year despite: o $0.5B asset sales in 2019 and the full year dilutive effect of nearly $1.0B asset sales in 2018 o $37.7M lower gains due to lower volume of marketable securities sold and lower dividend
Slide 15: Book Value per Unit Growth
BOOK VALUE PER UNIT GROWTH Book value per unit has increased by 4.0% compared to Q4 2018 $27.00 $26.14 $26.01 $26.00 $25.78 $25.34 $25.13 $25.00 $24.00 $23.00 Q4 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019 Q4 | RioCan | 15
Slide 16: Incremental NAV Development Growth Potential
INCREMENTAL NAV DEVELOPMENT GROWTH POTENTIAL PROGRESSING WELL Total Development Pipeline – 61 Projects or 29.0M sf Zoning applications submitted, 6.5M sf, 23% Only $266M of Zoning cumulative fair value approved, gains or $0.84 per unit has been recognized on 14.6M sf, the balance sheet 50% relating
Slide 17: Significant Growth in the Quality of Our Portfolio
SIGNIFICANT GROWTH IN THE QUALITY OF OUR PORTFOLIO Net Rent PSF CAGR since 2015: 3.7% $19.75 100.0% $19.07 $20.00 $17.59 $17.75 $17.11 $18.00 95.0% 96.6% 97.1% 97.2% $16.00 95.6% 94.0% 90.0% $14.00 1 1 2015 2016 2017 2018 2019 1. Canadian operations only Avg. Population Avg. Household Income Within
Slide 18: Prudent Approach to Development
PRUDENT APPROACH TO DEVELOPMENT RioCan plans to primarily self fund development As at Target December 31, 2019 Properties Under Development (PUD) & Residential Inventory $1.4B N/A PUD and Residential Inventory as % of Gross Assets – Per Line of 9.0% ~ 10%1 Credit and Credit Facilities Agreements Inv
Slide 19: Strong Balance Sheet
STRONG BALANCE SHEET PRUDENT CAPITAL MANAGEMENT & FLEXIBLE CAPITAL STRUCTURE Capital Structure Metrics Target 20191 Debt to Adjusted EBITDA <8.0x 8.06x 2 Debt to Total Assets 38% - 42% 42.1% Interest Coverage >3.0x 3.50x Debt Service Coverage >2.25x 2.96x Fixed Coverage >1.10x 1.16x Unencumbered Ass
Slide 20: Closing Remarks
Closing Remarks Edward Sonshine, O.Ont., Q.C. Chief Executive Officer Q4 | 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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