Granite Real Estate Investment Trust · TSX:GRT.UN
Granite Real Estate Investment Trust — Investor Presentation (May 2023)
22 slides from Granite Real Estate Investment Trust's investor presentation, May 2023
Slide 1: Investor Presentation
INVESTOR PRESENTATION | August 2020 INVESTOR PRESENTATION | May 2023
Slide 2: Presentation of Certain Information
PRESENTATION OF CERTAIN INFORMATION • Unless otherwise indicated in this presentation, all information is presented as of March 31, 2023 and all financial information that is identified as current refers to the period ending March 31, 2023. For definitions of certain non-IFRS performance measures an
Slide 3: Granite Highlights
GRANITE HIGHLIGHTS2 ORGANIZATIONAL PRINCIPLES PORTFOLIO OVERVIEW FINANCIAL PERFORMANCE 137 income-producing Long-term total return focused 74% LTM AFFO POR3 properties + 5 development properties/land Conservative and flexible capital 62.8M square feet with 32% net leverage ratio3 structure 97% occup
Slide 4: Granite Highlights – ESG+R
GRANITE HIGHLIGHTS – ESG+R ENVIRONMENTAL SOCIAL GOVERNANCE RESILIENCE Promote energy efficiency Hybrid work model and sustainable practices supporting work-life 100% independent Board Program aligned with at our properties balance excluding CEO TCFD(1), SASB(1) and GRI(1) standards and frameworks Re
Slide 5: ESG – GRESB 2022
ESG – GRESB 2022 Granite ranked 3rd in the United States of America Industrial public disclosure group Granite ranked 2nd in the North America/Industrial/Listed/Tenant Controlled peer group May 2023 5
Slide 6: ESG – $1B Green Bonds Use of Net Proceeds
ESG –$1B GREEN BONDS USE OF NET PROCEEDS (AS AT DEC 31, 20221) 2027 Debentures 2028 Debentures Location Eligible Green Certification Date Allocation Location Eligible Green Certification Date Allocation Lancaster, TX, USA LEED Silver Q1-19 $106.1 Mississauga, ON, Canada Two Green Globes Q3-22 11.03
Slide 7: Granite's Evolution
GRANITE’S EVOLUTION Investment Property Summary Then - December 31, 2012 Now - March 31, 2023 0.6M SF Flex/Office2 48.4M SF 11.8M SF $145M Distribution/E-commerce3 Multi-Purpose2 16.2M SF $6,438M 4.9M SF $690M Special Purpose Industrial/Warehouse2 $970M $9.0B $1,086M $1.7B Value 8.9M SF Value Specia
Slide 8: Portfolio Transformation Strategy
PORTFOLIO TRANSFORMATION STRATEGY Invest opportunistically in evolving Target markets with superior Focus on modern facilities that meet property types and markets economic conditions and market the demands of E-Commerce and fundamentals benefiting from technological traditional distribution users a
Slide 9: Financial Performance
FINANCIAL PERFORMANCE Historical Operating Performance ($M)2 Distributions and Payout Ratios1,2 91% 82% 81% 80% 77% 74% $477 77% $456 75% 78% 79% 73% 78% 70% 68% $394 3.20 $363 $352 $340 3.10 3.00 $299 $274 $264 $273 2.90 $265 $245 $248 $235 2.80 $216 $204 2.72 $185 $187 $173 2.60 $145 $138 2017 201
Slide 10: GRT Historical Performance
GRT HISTORICAL PERFORMANCE Total Return vs TSX Composite & TSX Capped REIT Indices Cumulative Total Return % Annualized Total Return % 350% 100% 325% 300% 80% 275% 250% 60% 225% 200% 40% 175% 150% 20% 125% 100% 75% 0% 50% 25% -20% 0% -40% 1Yr 2Yr 3Yr 5Yr Granite REIT TSX Capped REIT Index TSX Compos
Slide 11: Globally Diversified Portfolio
GLOBALLY DIVERSIFIED PORTFOLIO1 5 countries – 142 properties – 62.8 million square feet GERMANY 14 properties 4.6M SF CANADA 37 properties 6.5M SF NETHERLANDS 1 16 properties 2 5.4M SF 4 UNITED STATES 66 properties 38.8M SF AUSTRIA 9 properties 7.5M SF Special Purpose Properties Global footprint wit
Slide 12: Portfolio Segmentation by Geography
PORTFOLIO SEGMENTATION BY GEOGRAPHY1 By Income Producing Property Fair Value By Annualized Revenue $822M $61.8M $64.3M 9% 21% 15% 15% $1,831M $787M 9% $40.2M 10% 7% $8.8B $416M $614M $36.0M 9% $4,790M $213.7M 54% 51% By Square Feet By Number of Income-Producing Properties 7.5M 6.5M 12% 10% 9 6% 34 1
Slide 13: IPP Portfolio Segmentation by Category
IPP PORTFOLIO SEGMENTATION BY CATEGORY1 Distribution/E-commerce Properties Industrial/Warehouse 95 Properties 32 Properties 48.4M SF (∼510K SF/property) 4.9M SF (∼154K SF/property) $6.4B Fair Value (∼$133/SF): 73% $1.1B Fair Value(∼$220/SF): 12% 73% WALT: 3.8 years WALT: 6.4 years $285.6M Annualized
Slide 14: Development and Expansion Pipeline
DEVELOPMENT AND EXPANSION PIPELINE Ajax, Ontario ~50K SF Brantford, Ontario (Phase I) ~410K SF Brantford, Ontario (Phase II) ~727K SF Active development program to enhance total return & platform value May 2023 14
Slide 15: Lease Expiration Profile
LEASE EXPIRATION PROFILE1 Outstanding Lease Expiries by Annualized Revenue Annualized Overall Revenue $416M WALT 6.6 Years Occupancy 97.0% Canada USA Germany Netherlands Austria 50.3% 120 100 Annualized Revenue (C$M) 80 60 12.2% 7.4% 10.3% 40 2.6% 8.3% 9.0% 20 0 2023 2024 2025 2026 2027 2028 2029+ %
Slide 16: High Quality & Creditworthy Tenant Base
HIGH QUALITY & CREDITWORTHY TENANT BASE Other Tenants Annualized Credit Top 10 Tenants GLA % WALT Revenue % Rating1,2 Magna 26% 19% 7.6 A- Amazon 4% 4% 15.9 AA Mars Petcare US 3% 4% 7.3 NR True Value Company 2% 2% 17.9 NR Adesa 2% —% 6.3 CC Light Mobility Solutions Gmbh 2% 1% 12.7 NR Ceva Logistics
Slide 17: Balance Sheet Strength
BALANCE SHEET STRENGTH2 Capitalization Debt Maturity Profile Unit Price (05/05/2023) $81.72 $600 6.00% Units Outstanding 63.7 5.02% Market Capitalization1 $5,209 $500 5.00% Construction Loan due Dec/23 $56 Weighted average interest rate $400 4.00% Debentures 3.873% due Nov/23 $400 3.00% 2.96% US$185
Slide 18: Financial Flexibility & Target Long-Term Leverage Ratio
FINANCIAL FLEXIBILITY & TARGET LONG-TERM LEVERAGE RATIO1 • Strong balance sheet provides pathway for measured growth with potential for further diversification and optimization of the portfolio • Target long term net leverage ratio1 of ∼30 - 35% while maintaining patient and opportunistic approach t
Slide 19: Leadership Team
LEADERSHIP TEAM Kevan Gorrie Teresa Neto Lorne Kumer Michael A. Ramparas President and Chief Executive Officer Chief Financial Officer Executive Vice President, Executive Vice President, Head of Global Real Estate Global Real Estate and Head of Investments Witsard Schaper Lawrence Clarfield Jon Sorg
Slide 20: Appendix
APPENDIX The following non-IFRS performance measures and non-IFRS ratios are important measures used by management in evaluating the Trust’s underlying operating performance and debt management. These non-IFRS performance measures and non-IFRS ratios are not defined by IFRS and do not have standar
Slide 21: Non-IFRS Ratios
Same property net operating income - cash basis Same property NOI - cash basis refers to the NOI - cash basis for those properties owned by Granite throughout the entire current and prior year periods under comparison. Same property NOI - cash basis excludes properties that were acquired, disposed o
Slide 22: Subsequent Events
Interest coverage ratio The interest coverage ratio is calculated on a 12-month trailing basis using Adjusted EBITDA (a non-IFRS performance measure) divided by net interest expense. Granite believes the interest coverage ratio is useful in evaluating the Trust’s ability to meet its interest expense
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