Rfa Financial Inc. · TSX:RFA
Rfa Financial — Artis Real Estate Investment Trust — Q2 2019 Earnings Presentation
18 slides from Rfa Financial's earnings presentation, August 2019
Slide 1: Artis Real Estate Investment Trust Q2-19 Investor Presentation
Artis Real Estate Investment Trust Q2-19 Investor Presentation August 2019
Slide 2: Forward-Looking Information
Forward-Looking Information This presentation contains forward-looking statements. For this purpose, any statements contained herein that are not statements of historical fact may be deemed to be forward-looking statements. Particularly, statements regarding the REITs future operation results, perfo
Slide 3: Investing in Artis
Investing in Artis 1 Investing in Capital Cities • Provincial and State capitals • University capitals 2 Robust Yield – 55% Pay Out Ratio • ~ 4.5% cash distribution yield • ~ 8.0% AFFO yield • 7.0% implied cap rate • Low price multiple • Investment-grade credit rating – BBB (low) 3 Additional Levers
Slide 4: Diversified Commercial Portfolio
Diversified Commercial Portfolio BC AB MB SK ON 0.4M sq. ft 1.5M sq. ft 3.8M sq. ft 3.7M sq. ft 4.0M sq. ft MN 5.9M WI sq. ft 1.7M sq. ft 2 countries 3 asset classes CO 8 major markets 0.7M sq. ft AZ 229 properties TX 24.9 million sq. ft. 2.1M sq. ft $5.5B GBV 95% leased 1.0M Office sq. ft Industria
Slide 5: Portfolio Diversification
Portfolio Diversification Projected 2020/2021 NOI upon Q2-19 Net Operating Income implementation of new initiatives NOI by Geographical Region US - Other SK Canada 8% 6% US 40% WI ON Canada 48% 9% 11% 52% US 60% AZ 11% MB 13% BC 3% Calgary Calgary Office Office MN AB - 6% Retail 3% 20% Other Retail
Slide 6: Office Asset Class
Office Asset Class Number of Properties 67 GLA 10.1 million sq. ft. Leased 91% Diversification Major markets in Canada and the US IFRS GBV/IFRS Weighted- $2.8 billion/6.7% Average Cap Rate 2019 YTD Same Property NOI +3.9% Growth 2018 Property NOI (on a $167.2 million proportionate share basis) 525 J
Slide 7: Retail Asset Class
Retail Asset Class Number of Properties 50 GLA 3.3 million sq. ft. Leased 94% Diversification Major markets in Canada and the US IFRS GBV/IFRS Weighted- $1.0 billion/6.6% Average Cap Rate 2019 YTD Same Property NOI +1.8% Growth 2018 Property NOI (on a $64.5 million proportionate share basis) Linden
Slide 8: Industrial Asset Class
Industrial Asset Class Number of Properties 112 GLA 11.5 million sq. ft. Leased 99% Diversification Major markets in Canada and the US IFRS GBV/IFRS Weighted- $1.6 billion/6.0% Average Cap Rate 2019 YTD Same Property NOI +8.2% Growth 2018 Property NOI (on a $83.6 million proportionate share basis) P
Slide 9: The Sum of All Parts
The Sum of All Parts Share of Number of Same Property IFRS Weighted- IFRS GLA Leased Property NOI Properties NOI Growth YTD Average Cap Rate GBV Office 52% 67 10.1 million sq. ft. 91% 3.9% 6.7% $2.8B Retail 20% 50 3.3 million sq. ft. 94% 1.8% 6.6% $1.0B Industrial 28% 112 11.5 million sq. ft. 99% 8.
Slide 10: Lease Expiration Schedule
Lease Expiration Schedule Percentage of Portfolio GLA Expiring 20.0% 18.0% 16.0% 14.0% 13.4% 12.0% 9.4% 9.7% 10.0% 9.2% 8.0% 5.8% 6.0% 4.0% 2.0% 0.0% 2019 2020 2021 2022 2023 Same Property NOI Growth YTD: 4.9% (6.0% excluding the Calgary office segment and properties planned for disposition). Weight
Slide 11: Leverage Profile DBRS: BBB- Credit Rating
Leverage Profile DBRS: BBB- Credit Rating Healthy Balance Sheet and Liquidity DBRS Fiscal quarter June 30, 2018 December 31, 2018 June 30, 2019 Recommended ending: Threshold Debt: GBV 49.0% 50.6% 51.9% ≤ 53.0% Secured mortgages and 31.7% 30.6% 29.5% N/A loans: GBV Unencumbered $1.6 billion $1.8 bill
Slide 12: Unit Price + NAV Metrics
Unit Price + NAV Metrics Information as of July 2019 Unit Price: $12.00 Distribution per Unit: $0.54 Cash Yield: 4.5% Market Cap: $1.7B Implied Cap Rate: 7.0% 8333 Greenway Boulevard, Middleton, WI Analyst 2019 Analyst Consensus Information per Unit (1) Consensus AFFO FFO Per Unit $1.05 $1.38 Target
Slide 13: Artis v. Peers Analytics
Artis v. Peers Analytics 2019E FFO Multiple 2019E AFFO Multiple 18.9 15.9 16.3 15.7 13.7 13.4 15.4 15.2 12.7 11.3 12.6 8.9 Office/Industrial Choice Retail Average H&R REIT Cominar REIT Artis Office/Industrial Choice Retail Average Cominar REIT H&R REIT Artis Average Properties Average Properties Pre
Slide 14: Classification of Assets
Classification of Assets Artis has recategorized the current portfolio into three asset types: Core Artis Assets, Development Assets, and Non-Core Artis Assets Core Artis Assets ~$4.2 billion • Invaluable assets located in target markets in which Artis anticipates maintaining a long-term presence •
Slide 15: Recent Initiatives: Improving Unitholder Value
Recent Initiatives: Improving Unitholder Value 1 Distribution reset at $0.54 per unit annualized These new initiatives • New conservative payout ratio ~55% • Improved cash flow and earnings profile are ahead of plan and proving to be highly 2 Unit buyback through NCIB effective. • Liquidity is in pl
Slide 16: Improved Operating and Financial Metrics
Improved Operating and Financial Metrics The goal of our new initiatives is to deliver improved operating and financial metrics to drive AFFO and NAV per unit growth ~60% ~45% Target Debt/GBV Pro Forma Payout Ratio Year 3 (Q4-21) Year 3 AFFO ~$1.12/unit Committed to Year 3 FFO ~$1.45/unit Maintainin
Slide 17: Corporate Sustainability
Corporate Sustainability We are committed to improving the energy efficiency of our properties and reducing our environmental footprint. Cara Foods Building, Greater Toronto Area, ON – LEED Gold Certified A copy of our Environmental, Social & Governance Report can be found at www.artisreit.com Q2-19
Slide 18: Artis Real Estate Investment Trust
Artis Real Estate Investment Trust Q2-19 Investor Presentation August 2019
Artis Real Estate Investment Trust — Q2 2019 Earnings Presentation on 6ix