First Capital Real Estate Investment Trust · TSX:FCR.UN

First Capital Real Estate Investment Trust — Q1 2022 Earnings Presentation

71 slides from First Capital Real Estate Investment Trust's earnings presentation, Jun 1, 2022

  1. Slide 1: Q1 2022 Investor Presentation

    Q1 2022 Investor Presentation

  2. Slide 2: Forward-Looking Statements and Non-IFRS Financial Measures

    FORWARD-LOOKING STATEMENTS AND NON-IFRS FINANCIAL MEASURES 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 First Capital REIT (“Fir

  3. Slide 3: Table of Contents

    TABLE OF CONTENTS 1.0 1.0 Company Snapshot ....……………………………………………………………………………........................ XX 4 2.0 Highlights - Recent Financial and Operating Results ..….….….….….….……….………….......... 2.0 5–7 3.0 Thriving Neighbourhoods …………………….………………………………………………………………...... 3.0 XX8 -–XX 20 4.0 4.0 Densi

  4. Slide 4: Company Snapshot

    1.0 COMPANY SNAPSHOT (TSX: FCR.UN) First Capital is a leading owner, operator and developer of grocery anchored and mixed-use real estate located in Canada’s most densely populated cities. First Capital’s focus is on creating thriving urban neighbourhoods to generate value for businesses, residents,

  5. Slide 5: Highlights - Recent Financial and Operating Results

    2.0 Highlights - Recent Financial and Operating Results

  6. Slide 6: Highlights – Q1 2022

    2.0 HIGHLIGHTS – Q1 2022 Q1 FFO per unit, excluding OGLE(1) amounts, was $0.28, +14% YoY Q1 2022 SP NOI growth of 1.9% • Primarily due to rent escalations and lower BDE, partially offset by lower same property occupancy (-20 bps) and lower lease termination fees YoY Strong NAVPU growth, new high of

  7. Slide 7: Highlights – Q1 2022 Balance Sheet, Liquidity and Asset Quality

    2.0 HIGHLIGHTS – Q1 2022 BALANCE SHEET, LIQUIDITY AND ASSET QUALITY Maintaining a Strong Balance Sheet and Liquidity Position • $655m of cash and undrawn credit facilities, as at March 31, 2022 • Unencumbered properties with an IFRS value of ~$7.5b (~74% of total assets) • $4.5m disposition in Q1 20

  8. Slide 8: Thriving Neighbourhoods

    3.0 Thriving Neighbourhoods First Capital 8

  9. Slide 9: Neighbourhood Investment Strategy

    3.0 NEIGHBOURHOOD INVESTMENT STRATEGY Creating thriving urban neighbourhoods to generate value for businesses, residents, communities and our investors • Investing in high-quality, mixed-use, and grocery anchored properties to build positions in targeted high growth super urban and top tier suburban

  10. Slide 10: Thriving Neighbourhoods

    3.0 THRIVING NEIGHBOURHOODS Proximity to transit, “Walk Score”, and most importantly population density are key criteria by which we evaluate the potential of our neighbourhoods. We have significantly improved these metrics over time through our investment and disposition activity and we intend to m

  11. Slide 11: Thriving Neighbourhoods – Fair Values Across Canada's Major Cities

    3.0 THRIVING NEIGHBOURHOODS – FAIR VALUES ACROSS CANADA’S MAJOR CITIES Vancouver, Calgary, Western Canada Central Canada Toronto Eastern Canada Montreal, Ottawa Edmonton Neighbourhoods 41 Neighbourhoods 66 Neighbourhoods 41 GLA 6.2m GLA 8.6m GLA 4.8m Fair Value % 30% Fair Value % 54% Fair Value % 16

  12. Slide 12: North American Leader in Population Density

    3.0 THRIVING NEIGHBOURHOODS - NORTH AMERICAN LEADER IN POPULATION DENSITY FCR Portfolio Demographic Metrics versus Peer Group: Q1 2022 (1) $129,000 US $116,500 300,000 $115,000 150,000 140,000 US Peers ** Q1 2022 US Peers (2) CDN Peers (3) Q1 2022 US Peers (2) CDN Peers (3) 5 km Population 5 km Aver

  13. Slide 13: Growth in 5km Population Density

    3.0 THRIVING NEIGHBOURHOODS - GROWTH IN 5KM POPULATION DENSITY • Q1 2022 5km population of 300,000 people 300,000 +20% • Up 93,000 or 45% from December 2016 304,000 300,000 290,000 • Making FCR a leader amongst our North American peer group (1) 250,000 +20% Achieved long-term goal of 300k people by

  14. Slide 14: Strong Historical Growth in NAV per Unit

    3.0 STRONG HISTORICAL GROWTH IN NAV PER UNIT +4.9% CAGR 2016 – Q1 2022 $25.00 $24.55 $24.00 $22.26 $23.00 $23.39 $22.59 $22.00 $22.34 $21.85 $21.00 $20.00 $19.53 $19.00 $18.00 $18.25 $17.00 2015 2016 2017 2018 2019 2020 2021 Q1 2022 $16.00 First Capital 14

  15. Slide 15: Solid Long Term Performance; Resiliency in the Face of Adversity

    3.0 SOLID LONG TERM PERFORMANCE; RESILIENCY IN THE FACE OF SIGNIFICANT ADVERSITY Same Property NOI Growth 8.0% 2.9% 10-year 6.0% 4.0% 5.7% pre-pandemic average 1.9% (2010-2019) 2.0% 2.6%(2) 0.0% 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 Q1 2022 2.3% 12-year average, -2.0% -2.6%(1)

  16. Slide 16: Consistently High Performance in Renewal Leasing Spreads

    3.0 CONSISTENTLY HIGH PERFORMANCE IN RENEWAL LEASING SPREADS Lease Renewal Rate Increases (1) 12.0% 9.2% 10-year 10.0% pre-pandemic average (2010-2019) 8.0% 7.5% (2) 6.0% 9.2% 12-year average, 4.0% including pandemic years 2.0% (2010-2021) 0.0% 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

  17. Slide 17: Strategic and Diversified Retail Tenant Mix

    3.0 STRATEGIC AND DIVERSIFIED RETAIL TENANT MIX # of Stores % of Rent Other Necessity-Based 474 18.1 Retailers Grocery Stores 125 17.2 Medical, Professional & 1,329 15.7 Personal Services QSR, Chains and Cafes 910 13.3 Pharmacies 120 9.2 Other Tenants 464 8.3 Banks & Credit Unions 186 8.1 Fitness Fa

  18. Slide 18: Top 20 Retail Tenants

    3.0 TOP 20 RETAIL TENANTS Contribute 45% of annualized minimum rent (AMR) Investment Investment Rank # Tenant AMR Grade Rank # Tenant AMR Grade 1. 10.4% 11. 1.4% 2. 5.5% 12. 1.4% 3. 3.2% 13. 1.4% 4. 2.7% 14. 1.3% 5. 2.3% 15. 1.3% 6. 2.0% 16. 1.1% - 7. 1.8% 17. 1.1% - - 8. 1.8% - 18. 1.1% 9. 1.7% 19.

  19. Slide 19: Portfolio Quality Has Never Been Better

    3.0 PORTFOLIO QUALITY HAS NEVER BEEN BETTER $2.5b of investment activity in 2019 to Q1 2022 FCR’s portfolio demonstrated resilience through more than 12-months of mandated business closures and/or significant operating restrictions, and it continues to do so, with the recent 2021 and Q1 2022 results

  20. Slide 20: Premier Portfolio Highest Rents in Sector

    3.0 PREMIER PORTFOLIO HIGHEST RENTS IN SECTOR FCR’s Q1 2022 base rent per square foot is 30% higher than peer group average $22.57 3.1% $20.27 $18.75 Q1 2022 Peer Group Average $17.32 Q1 2017 Peer Group Average $16.36 FCR Average rent growth 5 year CAGR $15.49 $14.76 1.1% Peer Average rent growth 5

  21. Slide 21: Density Pipeline and Development

    4.0 Density Pipeline and Development

  22. Slide 22: Significant Future Density Pipeline

    4.0 SIGNIFICANT FUTURE DENSITY PIPELINE Total development inventory of 23.3m sf Included IFRS values are: Future incremental 7.1m sf; value of $521m density 1071 King St West Toronto, ON Yonge & Roselawn Toronto, ON Properties under 84k sf; value of $28m construction Residential 364k sf; value of $1

  23. Slide 23: Future Incremental Density - Entitlements Program

    4.0 FUTURE INCREMENTAL DENSITY - ENTITLEMENTS PROGRAM • FCR submitted entitlement applications for 15.1m sf or 65% of its incremental density pipeline • FCR expects to recognize increased IFRS values as previously submitted and future submissions are approved sf in millions Residential Commercial To

  24. Slide 24: Active Development

    4.1 Active Development @o First © CAPITAL

  25. Slide 25: Active Developments - Developing in Thriving Neighbourhoods

    4.1 ACTIVE DEVELOPMENTS - DEVELOPING IN THRIVING NEIGHBOURHOODS Active Developments = 448k sf 200 West Esplanade (GLA 58k sf) North Vancouver, BC Centre Commercial Wilderton (GLA 625k sf) Montreal, QC Edenbridge Kingsway (GLA 252k sf) Toronto, ON First Capital 25

  26. Slide 26: Active Developments - Developing in Thriving Neighbourhoods

    4.1 ACTIVE DEVELOPMENTS - DEVELOPING IN THRIVING NEIGHBOURHOODS 400 King Street West (GLA 463k sf) Toronto, ON 138 Yorkville (GLA 313k sf) Toronto, ON First Capital 26

  27. Slide 27: 200 West Esplanade

    Future Active Development 200 West Esplanade North Vancouver, BC Demographics 5KM 2021 Estimates Population 264,000 Average Household Income $116,000 Gross Leasable Area (at 100%) Residential GLA (75 Rental Units) 48,000 sf Retail GLA 10,000 sf Total GLA 58,000 sf FCR Interest 50% 50% Partner Target

  28. Slide 28: Centre Commercial Wilderton

    Active Development Future Centre Commercial Wilderton Montreal, QC Demographics 5KM 2021 Estimates Population 638,000 Average Household Income $102,000 Property Statistics Site Area 5 acres Pre-redevelopment GLA 112,000 sf Post Redevelopment GLA Retail GLA (FCR Interest 100%) 125,000 sf Residential

  29. Slide 29: Edenbridge Kingsway

    Active Development Edenbridge Kingsway Humbertown, Toronto, ON Demographics 5KM 2021 Estimates Population 347,000 Average Household Income $136,000 Phase 1 Site Area 1.8 acres (Phase 1) Gross Leasable Area (at 100%) Future Retail GLA 8,000 sf Residential GLA 244,000 sf Total GLA 252,000 sf 100% Comm

  30. Slide 30: 400 King Street West

    Future Active Development 400 King Street West Toronto, ON Demographics 5KM 2021 Estimates Population 582,000 Average Household Income $139,000 Gross Leasable Area (at 100%) Residential GLA 426,000 sf Retail GLA 37,000 sf Total GLA 463,000 sf FCR Interest 35% 50% Partner Target Completion Date H2 20

  31. Slide 31: 138 Yorkville Avenue

    Future Active Development 138 Yorkville Avenue Toronto, ON Demographics 5KM 2021 Estimates Population 775,000 Average Household Income $147,000 Gross Leasable Area (at 100%) Residential GLA 272,000 sf Retail GLA 41,000 sf Total GLA 313,000 sf FCR Interest 33% Co-development Partner 33% Passive Partn

  32. Slide 32: Station Place

    Recent Development Completion Station Place Toronto, ON Demographics 5KM 2021 Estimates Population 272,000 Average Household Income $147,000 Gross Leasable Area (at 100%) Retail GLA 43,000 sf Residential GLA (333 Rental Units) 267,000 sf Total GLA 310,000 sf FCR Interest 35% 50% Partner Key Tenants

  33. Slide 33: Station Place

    Recently Development Completion Station Place Farm Boy opens amidst construction completion September 2021 Opening First Capital 33

  34. Slide 34: Near, Medium & Long Term Developments

    4.2 Near, Medium & Long Term Developments

  35. Slide 35: Near, Medium & Long Term Developments

    4.2 NEAR, MEDIUM & LONG TERM DEVELOPMENTS 1071 King - Liberty Village (GFA 196k sf) Toronto, ON Yonge & Roselawn (GFA 513k sf) Toronto, ON 2150 Lake Shore Blvd W (GFA 7.5m sf) Toronto, ON First Capital 35

  36. Slide 36: 1071 King Street West

    Future Near Term Development 1071 King Street West Toronto, ON Demographics 5KM Update 2021 Estimates Picture Population 579,000 Average Household Income $127,000 Gross Floor Area (at 100%) Residential GFA (227 Rental Units) 191,000 sf Retail GFA 5,000 sf Total GFA 196,000 sf FCR Interest 67% 33% Pa

  37. Slide 37: Yonge & Roselawn

    Future Medium & Long Term Development Yonge & Roselawn Toronto, ON Demographics 5KM 2021 Estimates Population 485,000 Average Household Income $209,000 Current Retail GLA 42,000 sf Future Residential GFA (~539 Rental Units) 443,000 sf Future Retail GFA 70,000 sf Total Future GFA 513,000 sf FCR Inter

  38. Slide 38: 2150 Lake Shore Blvd W

    Future Medium & Long Term Development 2150 Lake Shore Blvd W Former Christie Cookie Site, Toronto, ON Demographics 5KM 2021 Estimates Population 263,000 Average Household Income $127,000 Planned Gross Floor Area (at 100%) Residential GFA ( ~7,500 Units) 6,300,000 sf Non-Residential GFA 1,200,000 sf

  39. Slide 39: Environmental, Social and Governance (ESG)

    5.0 Environmental, Social and Governance (ESG) 39

  40. Slide 40: ESG Initiatives

    5.0 ESG INITIATIVES 167 Properties certified High 2021 ESG scores (1) Environmental: 2 Social: 2 87% of portfolio GLA Governance: 2 (2021) (2021) Winner in the Canada’s Greenest Employers Competition (2022) 2021 1st in our Peer group GRESB Development Benchmark Standing Investments Benchmark Score 8

  41. Slide 41: ESG Initiatives

    5.0 ESG INITIATIVES 125 LEED-certified projects Canada’s Top Small & Medium Employers > 4.1m sf (2021) Received 2 “The Outstanding Building of the Year” Award and Certificate of Excellence at 3 of our properties. AA ESG Rating Recognized as one of Greater Toronto’s Top 100 Employers (2021) (2nd cons

  42. Slide 42: ESG Initiatives

    5.0 ESG INITIATIVES 7.1m sf 2021 Green Lease Leader Achieved WELL Health- by Institute for Markey Safety Rating (35 properties) Transformation First Canadian REIT to be a Honouree in the signatory in support of the Globe & Mail’s Task Force on Climate- “2021 Women Lead Here” list Related Financial (

  43. Slide 43: ESG Roadmap (2020-2024)

    5.0 ESG ROADMAP (2020-2024) Environment Social Governance • Establish near-term and • Launch the FCR Thriving • Align disclosures with the long-term GHG reduction Neighbourhoods Task Force on Climate- targets, with the goal of net- Foundation, with focus on 4 related Financial Disclosures zero emiss

  44. Slide 44: ESG Initiatives

    5.0 ESG INITIATIVES • 10% decrease in Greenhouse Gas (GHG) emissions (2016 – 2020) GHG Emissions • 10% decrease in 2020 energy consumption, relative to 25,000 2019 24,500 • Completed our 5-year national commitment to convert all our exterior and parking lot lighting to energy- 24,000 efficient LED (

  45. Slide 45: Enhancing Thriving Neighbourhoods Through Public Art

    5.0 ENHANCING THRIVING NEIGHBOURHOODS THROUGH PUBLIC ART 29 Public Art Installations commissioned across our portfolio Supporting Public Art partnerships with First Capital 45

  46. Slide 46: Strong Gender Diversity Metrics Across the Organization

    5.0 STRONG GENDER DIVERSITY METRICS ACROSS THE ORGANIZATION EXECUTIVE BOARD MEMBERS MEMBERS 43% Women 57% Men 33% Women 67% Men Honouree in the Globe and Mail’s “2021 Women Lead Here” list MANAGEMENT TOTAL ROLES EMPLOYEES (2nd consecutive year) Over 50% of management positions are held by females 53

  47. Slide 47: FCR Equity, Diversity & Inclusion (ED&I)

    5.0 FCR EQUITY, DIVERSITY & INCLUSION (ED&I) First Capital is committed to sustaining an equitable, diverse, and inclusive culture of belonging, where all employees have an equal opportunity to thrive, love what they do and grow their careers. First Capital continues to evolve and build an action fr

  48. Slide 48: FCR Thriving Neighbourhoods Foundation – Second Harvest

    5.0 FCR THRIVING NEIGHBOURHOODS FOUNDATION – SECOND HARVEST • The FCR Thriving Neighbourhoods Foundation is an employee-led organization that supports registered charities and philanthropic initiatives that support the neighbourhoods in which we operate. • Since its inception in 2020, we’ve been sol

  49. Slide 49: Financial Strength and Flexibility

    6.0 Super Financial Strength Urban and Flexibility Neighbourhoods

  50. Slide 50: Capital Structure

    6.0 CAPITAL STRUCTURE (1) Enterprise Value $8.4b $b WAIR (2) Mortgages 1.2 3.5% 15% Secured Facilities 0.1 2.8% Total Secured 1.3 3.5% Unsecured Debentures 2.2 4.0% 38% Unsecured Term Loans 0.7 2.8% Unsecured Revolving Facilities 0.3 1.6% ($800m total capacity) Total Unsecured 3.2 3.5% Total Debt 4.

  51. Slide 51: Financial Strength and Flexibility

    6.0 FINANCIAL STRENGTH AND FLEXIBILITY Q1 As at 2021 2020 2019 2018 2017 2022 Unsecured revolving credit $800 $800 $800 $800 $800 $800 facilities (million) 74% Unencumbered assets (billion) $7.5 $7.4 $7.0 $7.0 $7.3 $7.4 of Q1 2022 assets Unencumbered assets to 2.3x 2.3x 2.1x 2.2x 2.5x 2.4x unsecured

  52. Slide 52: Well-Staggered Term Debt Maturities

    6.0 WELL-STAGGERED TERM DEBT MATURITIES ($MILLIONS) Weighted Average Interest Rate 3.7% $900 Unsecured Term Loans 5.5% Millions Mortgages Term to Maturity 4.0 years 5.0% $800 Senior Unsecured Debentures 95% of Term Debt is Fixed Rate 4.5% 4.2% 4.2% Weighted Average Effective Interest % $700 4.0% 4.0

  53. Slide 53: FFO Payout Ratio: Creating Meaningful Flexibility

    6.0 FFO PAYOUT RATIO: CREATING MEANINGFUL FLEXIBILITY TO ADVANCE OUR STRATEGIC OBJECTIVES Enhancing Financial Strength and Flexibility through Temporary Distribution Cut $350 90% 85% 82% $302 $300 $287 78% $284 80% $250 $236 $261 $237 74% $225 70% 71% 70% $200 60% $150 50% $100 $63 $50 40% 38% 38% $

  54. Slide 54: Appendix: Profiling Thriving Neighbourhoods

    Appendix Profiling Thriving Neighbourhoods – Super Urban and Top Tier Suburban 54

  55. Slide 55: Bloor-Yorkville

    Super Urban Neighbourhood Bloor-Yorkville Toronto, ON Demographics 5KM 2021 Estimates Population 744,000 Average Household Income $148,000 Gross Leasable Area Yorkville Village 315,000 sf One Bloor East 85,000 sf Hazelton Hotel 49,000 sf Total Bloor/Yorkville 449,000 sf Future Density 117,000 sf Key

  56. Slide 56: Super Urban Neighbourhood - Bloor-Yorkville

    SUPER URBAN NEIGHBOURHOOD - BLOOR-YORKVILLE Bloor-Yorkville A 138 Yorkville Avenue B Yorkville Village Mall C Hazelton Hotel First Capital 56

  57. Slide 57: Yorkville Village Achieves #1 Destination Status for New Retail

    YORKVILLE VILLAGE ACHIEVES #1 DESTINATION STATUS FOR NEW RETAIL International retailers continue to enter the Canadian market in 2021 and 2022, and many chose Yorkville Village for their first location, including: Contemporary women’s Lab-grown, sustainable diamonds High performance fashion brand an

  58. Slide 58: Yorkville Village

    Hazelton Hotel & ONE Restaurant Yorkville Village Hazelton Hotel achieves 5 star rating in Forbes Travel Guide April 2022 First Capital 58

  59. Slide 59: Yorkville Village New Tenant Opening

    New Tenant Opening Yorkville Village The Webster successfully opens in Canada’s top real estate November 2021 Opening First Capital 59

  60. Slide 60: Liberty Village

    Super Urban Neighbourhood Liberty Village Toronto, ON Property Statistics 5KM 2021 Estimates Population 568,000 Average Household Income $126,000 Gross Leasable Area Retail GLA 395,000 sf Residential GLA 328,000 sf Office GLA 109,000 sf Total GLA 832,000 sf Acreage 14.1 Future Density 755,000 sf Key

  61. Slide 61: King High Line

    Super Urban Neighbourhood King High Line Liberty Village, Toronto, ON Gross Leasable Area (at 100%) Retail GLA 154,000 sf Residential GLA (506 Residential Units) 322,000 sf Total GLA 476,000 sf Property Statistics Acreage 2.8 100% Commercial FCR Interest 50% Residential Key Tenants First Capital 61

  62. Slide 62: Griffintown

    Super Urban Neighbourhood Griffintown Montreal, QC Demographics 5KM 2021 Estimates Population 412,000 Average Household Income $108,000 Retail GLA 255,000 sf Acreage 3.2 Key Tenants First Capital 62

  63. Slide 63: Mount Royal Village

    Calgary's Premier Super Urban Neighbourhood Mount Royal Village Calgary, AB Demographics 5KM 2021 Estimates Population 232,000 Average Household Income $149,000 Gross Leasable Area 375,000 sf Acreage 4.1 . Key Tenants First Capital 63

  64. Slide 64: The Brewery District

    Super Urban Neighbourhood The Brewery District Edmonton, AB Demographics 5KM 2021 Estimates Population 211,000 Average Household Income $96,000 Gross Leasable Area (at 100%) Retail GLA 261,000 sf Office GLA 37,000 sf Total GLA 298,000 sf FCR Interest 50% Key Tenants First Capital 64

  65. Slide 65: False Creek Village

    Super Urban Neighbourhood False Creek Village Vancouver, BC Demographics 5KM 2021 Estimates Population 438,000 Average Household Income $115,000 Retail GLA 63,000 sf Key Tenants First Capital 65

  66. Slide 66: Olde Oakville Market Place

    Top Tier Suburban Neighbourhood Olde Oakville Market Place Oakville, ON Demographics 5KM 2021 Estimates Population 122,000 Average Household Income $212,000 Gross Leasable Area Retail GLA 125,000 sf Key Tenants First Capital 66

  67. Slide 67: Leaside Village

    Top Tier Suburban Neighbourhood Leaside Village Toronto, ON Demographics 5KM 2021 Estimates Population 495,000 Average Household Income $187,000 Gross Leasable Area Retail GLA 119,000 sf Key Tenants First Capital 67

  68. Slide 68: Appleby Village

    Top Tier Suburban Neighbourhood Appleby Village Burlington, ON Demographics 5KM 2021 Estimates Population 98,000 Average Household Income $146,000 Gross Leasable Area Retail GLA 210,000 sf Key Tenants First Capital 68

  69. Slide 69: Pemberton Plaza

    Top Tier Suburban Neighbourhood Pemberton Plaza North Vancouver, BC Demographics 5KM 2021 Estimates Population 203,000 Average Household Income $125,000 Gross Leasable Area Retail GLA 77,000 sf Key Tenants First Capital 69

  70. Slide 70: Cranston Market

    Top Tier Suburban Neighbourhood Cranston Market Calgary, AB Demographics 5KM 2021 Estimates Population 123,000 Average Household Income $157,000 Gross Leasable Area Retail GLA 84,000 sf Key Tenants First Capital 70

  71. Slide 71: Contact

    Adam Paul President & CEO Neil Downey Executive VP, Enterprise Strategies & CFO First Capital Shops at King Liberty 85 Hanna Ave, Suite 400 Toronto, ON Tel: 416-504-4114 fcr.ca TSX: FCR.UN

First Capital Real Estate Investment Trust — Q1 2022 Earnings Presentation on 6ix