Smartcentres Real Estate Investment Trust · TSX:SRU.UN
Smartcentres Real Estate Investment Trust — Investor Presentation (May 2018)
79 slides from Smartcentres Real Estate Investment Trust's investor presentation, May 2018
Slide 1: Investor Presentation: Smart Today Smart Tomorrow
INVESTOR PRESENTATION Smart Today Smart Tomorrow Based on 1st Quarter 2018 May 2018
Slide 2: Table of Contents
BASED ON 1 ST QUARTER 2018 INVESTOR PRESENTATION TABLE OF CONTENTS ▪ Track record of performance ▪ Portfolio overview ▪ Acquisitions ▪ Development / Intensification ▪ Financial highlights ▪ Development team ▪ Market factors ▪ Summary ▪ Appendix SMARTCENTRES REAL ESTATE INVESTMENT TRUST MAY 2018 - IN
Slide 3: Notice to Reader
BASED ON 1 ST QUARTER 2018 INVESTOR PRESENTATION NOTICE TO READER Readers are cautioned that certain terms used in this Investor Presentation (“Presentation”) such as Funds from Operations ("FFO"), Adjusted Cashflow from Operations ("ACFO"), "Gross Book Value", "Payout Ratio", "Interest Coverage", "
Slide 4: Highlights
TRACK RECORD OF PERFORMANCE HIGHLIGHTS ▪ One of Canada’s premier REITs ▪ $4.6 billion equity capitalization ▪ $9.4 billion total asset value ▪ Approximately 20 million sf. of mixed use identified: • residential – condominiums, apartments and townhomes • office buildings • retirement homes • self-sto
Slide 5: Total Return to Unitholders
TRACK RECORD OF PERFORMANCE TOTAL RETURN TO UNITHOLDERS 8.7% AVERAGE ANNUAL RETURN SINCE IPO (as of May 4, 2018) $1,200 $1,000 $877.15 $800 $600 $458.00 $400 $374.65 $200 $0 SmartCentres TSX Capped REIT TSX Composite SMARTCENTRES REAL ESTATE INVESTMENT TRUST MAY 2018 - INVESTOR PRESENTATION 5
Slide 6: Growth in Rental Revenue and Growth in FFO/Unit
TRACK RECORD OF PERFORMANCE GROWTH IN RENTAL REVENUE AND GROWTH IN FFO/UNIT RENTAL REVENUE FFO (in millions of $) ($ per unit) 6.4% CAGR 4.4% CAGR since 2013 since 2013 728 741 2.17 2.20 670 2.10 608 1.95 573 1.85 2013 2014 2015 2016 2017 2013 2014 2015 2016* 2017 * Excludes $0.06 per unit of non-re
Slide 7: Growth in Total Assets
TRACK RECORD OF PERFORMANCE GROWTH IN TOTAL ASSETS TOTAL ASSETS (in millions of $) 34.6% CAGR 9,380 8,739 since 2002 8,505 7,070 7,107 6,480 5,956 4,194 4,237 4,374 3,894 3,584 2,564 1,015 109 229 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 SMARTCENTRES REAL ESTAT
Slide 8: What Makes SmartCentres Strong
WHAT MAKES SMARTCENTRES STRONG CONSERVATIVE THE QUALITY OF OUR HEALTHY PROPERTY OUR SHOPPING BALANCE SHEET VALUATIONS AND CENTRE AND FINANCIAL SIGNIFICANT PORTFOLIO FLEXIBILITY NAV GROWTH POTENTIAL THE QUALITY AN EXCEPTIONAL AND DEPTH PIPELINE OF OF OUR MIXED-USE DEVELOPMENT GROWTH TEAM AND JV INITI
Slide 9: Value and Convenience in One Stop
PORTFOLIO OVERVIEW VALUE AND CONVENIENCE IN ONE STOP ▪ 34.2 million sf. of principally open format shopping centre space ▪ Average age: 14.1 years (youngest in the industry) • Lower capital expenditures ▪ Coast to coast locations • 84% are urban or near urban markets • 83% by square feet in Ontario,
Slide 10: Strategically Located
PORTFOLIO OVERVIEW STRATEGICALLY LOCATED PROVINCE # Properties / 156 Properties* # Intensification Projects 34.2M SF.* ALBERTA MANITOBA 8/0 3/1 BRITISH COLUMBIA QUEBEC 14 / 5 SASKATCHEWAN ONTARIO 22 / 13 ATLANTIC 5/1 94 / 36 10 / 0 * Excludes 7 development sites totalling 0.7 million sf. upon comple
Slide 11: Market Conditions
PORTFOLIO OVERVIEW MARKET CONDITIONS Why is Canada different from the United States ▪ Much lower square feet of retail per person (15 vs. 23) traditionally drives higher rents per square foot ▪ Open Format retail and Big Box retail are only just over 20 years old in Canada, so assets are still very
Slide 12: Stable Income Base
PORTFOLIO OVERVIEW STABLE INCOME BASE LEASE MATURITY BY AREA (in millions of square feet) 1.6 1.8 1.6 1.8 1.8 0.6 0.9 2.7 0.7 2.0 2.2 2.0 0.7 0.9 1.5 1.6 1.3 0.9 0.8 0.7 0.2 0.3 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 Month-to- Vacant month Anchor Non-Anchor Average roll of 2.4 million sf.
Slide 13: Well Tenanted, High Quality
PORTFOLIO OVERVIEW WELL TENANTED, HIGH QUALITY Top ten tenants by gross rental revenues of SmartCentres' Portfolio as of March 31, 2018: % of Average DBRS S&P Moody’s Number of Gross Tenant Remaining Credit Credit Credit Stores Rental Lease Term Rating Rating Rating Revenues Walmart 101 26.0 6.9 AA
Slide 14: Current Leasing Environment
PORTFOLIO OVERVIEW CURRENT LEASING ENVIRONMENT ▪ All major national and regional retailers continue to grow. Bankrupt mall-type retailers have left vacancy in the market, still being absorbed ▪ Value segment still growing – Dollar stores, Winners, Marshalls, HomeSense ▪ Other mid-size retailers also
Slide 15: OneREIT Transaction Summary
ACQUISITIONS ONEREIT TRANSACTION SUMMARY ▪ 12 Properties / $429 million ▪ 2.2 million sf. / 93% leased ▪ Ontario (10) / BC (1) / Saskatchewan (1) ▪ 10 Food-anchored / inclusive of 6 Walmarts ▪ NOI of $26 - $28 million (Year 1 to Year 2) ▪ FFO / Unit growth near $0.05 - $0.06 ▪ Average lease term of
Slide 16: OneREIT Summary: In Effect Two Portfolios
ACQUISITIONS ONEREIT SUMMARY IN EFFECT TWO PORTFOLIOS A. Stability • 99.5% leased • Walmart Supercentre anchored • Very strong national tenants / covenants • Coupon clipper B. Growth & Stability ▪ 90% leased ▪ Redevelopment opportunity for part / all of each property ▪ 100,000 sf. of future retail d
Slide 17: OneREIT Summary - Property Portfolio
ACQUISITIONS ONEREIT SUMMARY - 12 PROPERTY PORTFOLIO City Property Acquired % GLA (sf) Leased % Major Tenants and Features Province Walmart, Costco, LCBO, Beer Store, RBC, TD, CIBC (New Creekside Crossing Mississauga, ON 30% 122,402 98% dominant urban retail centre) Safeway, Winners, Sport Chek (Str
Slide 18: Growth Strategy
DEVELOPMENT / INTENSIFICATION GROWTH STRATEGY ▪ Every property under review for mixed-use intensification with over 56 specifically identified to date ▪ Multiple different joint venture relationships are being added to optimize investment returns, project quality and operational effectiveness ▪ In a
Slide 19: Ability to Execute
DEVELOPMENT TEAM ABILITY TO EXECUTE STRONG, PARTNER EXPERIENCED IN-HOUSE RELATIONSHIPS DEVELOPMENT TEAM GOVERNMENT/ CONSULTANT RELATIONSHIPS SMARTCENTRES REAL ESTATE INVESTMENT TRUST MAY 2018 - INVESTOR PRESENTATION 19
Slide 20: In-House Development Team
DEVELOPMENT TEAM IN-HOUSE DEVELOPMENT TEAM Employees in Development & Leasing Related Functions: ▪ Number of People: 145 ▪ Number of Years Experience with SmartCentres • Average: 7.5 years • Total: 1,088 years ▪ Number of Years Experience in Real Estate • Average: 15.0 years ▪ Total: 2,175 years SMA
Slide 21: In-House Development Resources
DEVELOPMENT TEAM IN-HOUSE DEVELOPMENT RESOURCES ENVIRONMENTAL PLANNERS / GOVERNMENT ENGINEERS / GEOTECH DEVELOPERS RELATIONS SPECIALISTS LEASING CONSTRUCTION ARCHITECTS FINANCE / LAWYERS FINANCIAL MARKETING ANALYSTS SMARTCENTRES REAL ESTATE INVESTMENT TRUST MAY 2018 - INVESTOR PRESENTATION 21
Slide 22: Strategic Relationships
STRATEGIC RELATIONSHIPS M I TC H E L L GOLDHAR SMARTCENTRES REAL ESTATE INVESTMENT TRUST MAY 2018 - INVESTOR PRESENTATION 22
Slide 23: Walmart Canada
KEY FINANCIAL HIGHLIGHTS WALMART CANADA NUMBER OF WALMART 295 STORES 225 13 14 96 101 Supercentres (334)* Total Walmart Stores (410)* Other SmartCentres Shadow SmartCentres Tenants * Company source as at May 3, 2018 ▪ Walmart Canada attributes • Value pricing and fresh food generates huge traffic •
Slide 24: Mitchell Goldhar
STRATEGIC RELATIONSHIP M I TC H E L L MITCHELL GOLDHAR GOLDHAR ▪ JV Partner • Vaughan Metropolitan Centre • StudioCentre / Eastern Avenue • Salmon Arm SmartCentre ▪ Consultant on development and mixed use projects ▪ Executive Chairman, Trustee and Investment Committee member ▪ Multiple on-going busi
Slide 25: Simon Property Group
STRATEGIC RELATIONSHIP SIMON PROPERTY GROUP ▪ Largest public real estate company in the U.S. ▪ Engaged primarily in retail real estate properties including regional malls, Premium Outlets and The Mills® ▪ Exceptional relationships with the world’s largest retailers provides strong tenant base for Pr
Slide 26: CentreCourt Developments
STRATEGIC RELATIONSHIP CENTRECOURT DEVELOPMENTS ▪ A leader in the development of high-rise condominiums in downtown Toronto ▪ Since 2011, CentreCourt has completed and/or is in various stages of developing over 4,000 condominium units in six major high-rise projects with a development value of over
Slide 27: Revera Inc.
STRATEGIC RELATIONSHIP REVERA INC. ▪ Leading owner, operator and investor in the senior living sector ▪ Through various partnerships own over 500 properties in Canada, the United States, and the United Kingdom serving over 55,000 seniors ▪ Offering seniors’ apartments, independent living, assisted l
Slide 28: Jadco Corporation
STRATEGIC RELATIONSHIP JADCO CORPORATION ▪ Well reputed family-owned business ▪ Has gained a strong foothold in the residential sector in the Greater Montreal Area ▪ Strengths lie in its commitment to excellence in building exceptional living and mixed-used environments ▪ Diversified portfolio compr
Slide 29: SmartStop Asset Management
STRATEGIC RELATIONSHIP SMARTSTOP ASSET MANAGEMENT ▪ Diversified real estate company focused on self storage assets, along with student and senior housing ▪ Portfolio currently includes 65,000 self storage units, 7.5 million rentable square feet and $1 billion of real estate assets under management ▪
Slide 30: Fieldgate Homes
STRATEGIC RELATIONSHIP FIELDGATE HOMES ▪ Private company in residential development business for more than 60 years ▪ Primarily focused on GTA SMARTCENTRES REAL ESTATE INVESTMENT TRUST MAY 2018 - INVESTOR PRESENTATION 30
Slide 31: Growth Initiatives
DEVELOPMENT / INTENSIFICATION GROWTH INITIATIVES SENIOR RESIDENTIAL RETAIL RESIDENCES APARTMENT SELF- BUILD-OUT OF RENTALS STORAGE EXISTING PREMIUM CONDOMINIUMS OFFICE OUTLETS CENTRES VAUGHAN TOWNHOUSES METROPOLITAN CENTRE SMARTCENTRES REAL ESTATE INVESTMENT TRUST MAY 2018 - INVESTOR PRESENTATION 31
Slide 32: Technology Initiatives
DEVELOPMENT / INTENSIFICATION TECHNOLOGY INITIATIVES MOBILE CHARGING DIGITAL ADVERTISING STATIONS SIGNS WIFI ADVERTISING BUILDING NETWORKS KIOSKS SYSTEMS ALL INITIATIVES DESIGNED TO CREATE VALUE ADD FOR VISITORS TO OUR SITES AND ALSO DRIVE ADDITIONAL REVENUE SMARTCENTRES REAL ESTATE INVESTMENT TRUST
Slide 33: Deal Structures
DEVELOPMENT / INTENSIFICATION DEAL STRUCTURES SMARTCENTRES JOINT VENTURE BUILDING DEVELOPMENT PARTNERS LEASE GROUND SALE OF LEASE SURPLUS LAND WE WILL TAILOR THE TYPE OF DEAL DEPENDING ON EACH SITE, TYPE OF DEVELOPMENT AND JV STRUCTURE SMARTCENTRES REAL ESTATE INVESTMENT TRUST MAY 2018 - INVESTOR PR
Slide 34: Major Mixed-Use Real Estate Initiatives
DEVELOPMENT / INTENSIFICATION MAJOR MIXED-USE REAL ESTATE INITIATIVES Estimated Costs ($M) Estimated Gain on Final Sale GLA ('000sf) / SRU SRU NOI at 100% NOI at SRU Completion SRU Site Project Type Units % Share 100% Share ($M) Share ($M) Year Yield Profit % Share Timing a. KPMG (T#1) Office 360sf
Slide 35: Major Mixed-Use Real Estate Initiatives
DEVELOPMENT / INTENSIFICATION MAJOR MIXED-USE REAL ESTATE INITIATIVES Estimated Costs ($M) Estimated Gain on Final Sale GLA ('000sf) / SRU SRU NOI at 100% NOI at SRU Completion SRU Site Project Type Units % Share 100% Share ($M) Share ($M) Year Yield Profit % Share Timing VMC Rental (4) 11. VMC (Apa
Slide 36: Mixed-Use Intensification and Retail Developments
DEVELOPMENT / INTENSIFICATION INITIATIVES MIXED-USE RETAIL INTENSIFICATION DEVELOPMENTS UNDERWAY ACTIVE FUTURE UNDERWAY ACTIVE FUTURE 17 50 56+ 25 36 2+ SMARTCENTRES REAL ESTATE INVESTMENT TRUST MAY 2018 - INVESTOR PRESENTATION 36
Slide 37: By Asset Class
DEVELOPMENT / INTENSIFICATION BY ASSET CLASS SELF-STORAGE UNDERWAY ACTIVE FUTURE 8 14 7+ OFFICE UNDERWAY ACTIVE 1 3 SENIORS RESIDENCES UNDERWAY ACTIVE FUTURE 1 9 18+ SMARTCENTRES REAL ESTATE INVESTMENT TRUST MAY 2018 - INVESTOR PRESENTATION 37
Slide 38: By Asset Class
DEVELOPMENT / INTENSIFICATION BY ASSET CLASS APARTMENT RENTALS UNDERWAY ACTIVE FUTURE 1 10 18+ CONDOMINIUMS UNDERWAY ACTIVE FUTURE 5 9 12+ TOWNHOUSES UNDERWAY ACTIVE FUTURE 1 5 4+ SMARTCENTRES REAL ESTATE INVESTMENT TRUST MAY 2018 - INVESTOR PRESENTATION 38
Slide 39: By Asset Class
DEVELOPMENT / INTENSIFICATION BY ASSET CLASS RETAIL BUILD-OUT EXISTING UNDERWAY ACTIVE 23 34 PREMIUM OUTLET CENTRES EXISTING EXPANSIONS FUTURE 2 2 2 SMARTCENTRES REAL ESTATE INVESTMENT TRUST MAY 2018 - INVESTOR PRESENTATION 39
Slide 40: Mixed-Use/Retail Initiatives
DEVELOPMENT / INTENSIFICATION MIXED-USE/RETAIL INITIATIVES ▪ Multiple sites under investigation for intensification. Currently over 56 sites have identified projects ▪ Majority of initial sites in the Greater Toronto Area ▪ Collaborate with JV partners who bring expertise ▪ Can be both new builds or
Slide 41: Vaughan Metropolitan Centre (VMC) Toronto
DEVELOPMENT / INTENSIFICATION VAUGHAN METROPOLITAN CENTRE (VMC) TORONTO ▪ A long term build (10 – 15 years) ▪ A 50:50 JV between SmartCentres and Penguin Investments. Mitchell Goldhar intimately involved in all aspects of the project ▪ Potential density of 18 – 19 million sf. of residential, office
Slide 42: VMC Toronto: Aerial Overview
DEVELOPMENT / INTENSIFICATION VMC TORONTO Aerial Overview SMARTCENTRES REAL ESTATE INVESTMENT TRUST MAY 2018 - INVESTOR PRESENTATION 42
Slide 43: VMC Toronto: Transit Overview
DEVELOPMENT / INTENSIFICATION VMC TORONTO Transit Overview SMARTCENTRES REAL ESTATE INVESTMENT TRUST MAY 2018 - INVESTOR PRESENTATION 43
Slide 44: VMC Toronto: Major Projects in Vicinity
DEVELOPMENT / INTENSIFICATION 1 2 3 4 VMC TORONTO Major Projects in Vicinity CENTRO MET ICONA SQUARE EXPO 510 Units 1,566 Units 783 Units 1,570 Units 4 1 2 3 SMARTCENTRES REAL ESTATE INVESTMENT TRUST MAY 2018 - INVESTOR PRESENTATION 44
Slide 45: VMC Toronto Phases 1 & 2 Office
DEVELOPMENT / INTENSIFICATION VMC TORONTO PHASES 1 & 2 OFFICE ▪ KPMG Tower complex with 365,000 sf. of LEED Gold space, opened in 2016 ▪ 16th Annual Real Estate Excellence (REX) Award for Office Development of the Year for the GTA ▪ Tenants include: ▪ Second mixed-use tower under construction, with
Slide 46: VMC Toronto: KPMG Tower Lobby
DEVELOPMENT / INTENSIFICATION VMC TORONTO KPMG Tower Lobby SMARTCENTRES REAL ESTATE INVESTMENT TRUST MAY 2018 - INVESTOR PRESENTATION 46
Slide 47: VMC Toronto: Transit City Condos
DEVELOPMENT / INTENSIFICATION VMC TORONTO Transit City Condos SMARTCENTRES REAL ESTATE INVESTMENT TRUST MAY 2018 - INVESTOR PRESENTATION 47
Slide 48: VMC Toronto: PWC - YMCA Tower
DEVELOPMENT / INTENSIFICATION VMC TORONTO PWC - YMCA Tower SMARTCENTRES REAL ESTATE INVESTMENT TRUST MAY 2018 - INVESTOR PRESENTATION 48
Slide 49: VMC Toronto: Central Park
DEVELOPMENT / INTENSIFICATION VMC TORONTO Central Park SMARTCENTRES REAL ESTATE INVESTMENT TRUST MAY 2018 - INVESTOR PRESENTATION 49
Slide 50: VMC Toronto Residential
DEVELOPMENT / INTENSIFICATION VMC TORONTO RESIDENTIAL ▪ First residential development is a JV with CentreCourt Developments, an experienced GTA-based condominium developer ▪ Initial plan was for a 55 story condominium tower with over 500 suites, anchored by a BUCA-branded restaurant and BAR BUCA, to
Slide 51: Vaughan NW Toronto Residential
DEVELOPMENT / INTENSIFICATION VAUGHAN NW TORONTO RESIDENTIAL ▪ Existing Walmart anchored shopping centre at Major Mackenzie Drive and Weston Road in Vaughan ▪ JV with Fieldgate on 16-acre site ▪ Up to 230 freehold townhomes to be built ▪ Construction to commence in late 2018 and possession to occur
Slide 52: Vaughan NW Toronto: Residential
DEVELOPMENT / INTENSIFICATION VAUGHAN NW TORONTO Residential SMARTCENTRES REAL ESTATE INVESTMENT TRUST MAY 2018 - INVESTOR PRESENTATION 52
Slide 53: Vaughan NW Toronto: Upon Completion
DEVELOPMENT / INTENSIFICATION VAUGHAN NW TORONTO Upon Completion SMARTCENTRES REAL ESTATE INVESTMENT TRUST MAY 2018 - INVESTOR PRESENTATION 53
Slide 54: Laval Centre Montreal
DEVELOPMENT / INTENSIFICATION LAVAL CENTRE MONTREAL ▪ Lands designated by City as “Centre-Ville”, due to highway and transit access ▪ 43 acre site anchored by a 160,000 square foot Walmart Supercentre ▪ Parcels of land under contract for seniors housing, hotel and office development of 400,000 sf. ▪
Slide 55: Laval Centre Montreal: Aerial
DEVELOPMENT / INTENSIFICATION LAVAL CENTRE MONTREAL Aerial SMARTCENTRES REAL ESTATE INVESTMENT TRUST MAY 2018 - INVESTOR PRESENTATION 55
Slide 56: Laval Centre Montreal: With Jadco
DEVELOPMENT / INTENSIFICATION LAVAL CENTRE MONTREAL With Jadco ▪ 338 units in the two buildings along with central services SMARTCENTRES REAL ESTATE INVESTMENT TRUST MAY 2018 - INVESTOR PRESENTATION 56
Slide 57: Laval Centre Montreal: Architect's Rendering
DEVELOPMENT / INTENSIFICATION LAVAL CENTRE MONTREAL Architect’s Rendering SMARTCENTRES REAL ESTATE INVESTMENT TRUST MAY 2018 - INVESTOR PRESENTATION 57
Slide 58: Pointe-Claire Montreal
DEVELOPMENT / INTENSIFICATION POINTE-CLAIRE MONTREAL ▪ Walmart and Home Depot anchored site in West Montreal purchased in 2016 ▪ Very well-located site in terms of transit and road access ▪ Extensive work has identified new opportunity to add 1 – 1½ million sf. of mixed-use development on the perime
Slide 59: Pointe-Claire Montreal: Existing Conditions
DEVELOPMENT / INTENSIFICATION POINTE-CLAIRE MONTREAL FUTURE REM STATION Existing conditions ST-JEAN BOUL HYMUS BOUL SMARTCENTRES REAL ESTATE INVESTMENT TRUST MAY 2018 - INVESTOR PRESENTATION 59
Slide 60: Pointe-Claire Montreal: Perspective
DEVELOPMENT / INTENSIFICATION POINTE-CLAIRE MONTREAL Perspective from St. Jean Blvd. and Hymus Blvd. ST-JEAN BOUL HYMUS BOUL SMARTCENTRES REAL ESTATE INVESTMENT TRUST MAY 2018 - INVESTOR PRESENTATION 60
Slide 61: Pointe-Claire Montreal: Perspective
DEVELOPMENT / INTENSIFICATION POINTE-CLAIRE MONTREAL Perspective from St. Jean Blvd. and Hymus Blvd. SMARTCENTRES REAL ESTATE INVESTMENT TRUST MAY 2018 - INVESTOR PRESENTATION 61
Slide 62: Westside Mall Toronto
DEVELOPMENT / INTENSIFICATION WESTSIDE MALL TORONTO ▪ Inner urban redevelopment site. Currently an approximate 140,000 square foot shopping centre ▪ New Light Rapid Transit (LRT) station as part of Eglinton Cross Town system to open on site ▪ New links to existing GO network will link new East:West
Slide 63: Westside Mall Toronto: Architect's Rendering
DEVELOPMENT / INTENSIFICATION WESTSIDE MALL TORONTO Architect’s Rendering LRT STATION EGLINTON AVE SMARTCENTRES REAL ESTATE INVESTMENT TRUST MAY 2018 - INVESTOR PRESENTATION 63
Slide 64: StudioCentre Toronto
DEVELOPMENT / INTENSIFICATION STUDIOCENTRE TORONTO ▪ StudioCentre is a brownfield location next to Toronto’s eastern waterfront. A former industrial site, today it is a well-utilized film production centre ▪ SmartCentres and Penguin Investments intend to revitalize the centre, adding new film produc
Slide 65: Premium Outlets with Simon Property Group
TORONTO DEVELOPMENT / INTENSIFICATION PREMIUM OUTLETS WITH SIMON PROPERTY GROUP ▪ Toronto Premium Outlets • 500,000 sf. when all phases are completed • Phase I opened August 1, 2013 • Phase II construction – new parking facility opened in November 2017 as part of expansion and construction underway
Slide 66: Toronto Premium Outlets: Expansion
DEVELOPMENT / INTENSIFICATION TORONTO PREMIUM OUTLETS Expansion SMARTCENTRES REAL ESTATE INVESTMENT TRUST MAY 2018 - INVESTOR PRESENTATION 66
Slide 67: Toronto Premium Outlets: New Parking Deck
DEVELOPMENT / INTENSIFICATION TORONTO PREMIUM OUTLETS New Parking Deck SMARTCENTRES REAL ESTATE INVESTMENT TRUST MAY 2018 - INVESTOR PRESENTATION 67
Slide 68: Condominiums with CentreCourt
DEVELOPMENT / INTENSIFICATION TRANSIT CITY CONDOS CONDOMINIUMS WITH CENTRECOURT ▪ Partner for first three 55-storey sold-out towers at VMC ▪ GTA focused: • 2,000 units completed • 4,000 units under active construction ▪ Initial discussions for further VMC towers and other projects SMARTCENTRES REAL
Slide 69: Retirement Homes with Revera
DEVELOPMENT / INTENSIFICATION RETIREMENT HOMES WITH REVERA ▪ Joint venture with Revera, one of Canada’s largest operators in the senior living sector ▪ Once the pipeline is fully established, expect to complete 5 projects per year ▪ Typical building size is 140,000 sf., with investment including lan
Slide 70: Self-Storage with SmartStop
DEVELOPMENT / INTENSIFICATION SELF-STORAGE WITH SMARTSTOP ▪ Buildings on average 100,000 to 130,000 sf. ▪ Development yield expected to be 7.0% to 8.5% ▪ Additional returns from sale of land into the JV ▪ 5 initial sites identified in the GTA, with expansion across country planned SMARTCENTRES REAL
Slide 71: Balance Sheet Supports Extensive Asset Growth
KEY FINANCIAL HIGHLIGHTS BALANCE SHEET SUPPORTS EXTENSIVE ASSET GROWTH ▪ Unencumbered pool at $3.5 billion = flexibility ▪ Ready access to mortgage and unsecured debt capital when needed = strong liquidity ▪ Payout ratio to ACFO at 86.1% as of Q1 2018. Higher than latest long term target of 77% to 8
Slide 72: Debt Maturity / Leverage (Including OneREIT Acquisition)
KEY FINANCIAL HIGHLIGHTS DEBT MATURITY / LEVERAGE (INCLUDING ONEREIT ACQUISITION) DEBT MATURITY (in millions of $) 436 347 328 308 300 275 250 250 200 155 150 160 160 140 119 100 87 48 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 THEREAFTER Secured Debt Debentures ▪ Lower interest costs on refi
Slide 73: Leverage Profile
KEY FINANCIAL HIGHLIGHTS LEVERAGE PROFILE Mar. 31 Dec. 31 Dec. 31 Dec. 31 2018 2017 2016 2015 Debt to Aggregate Assets 45.0% 45.4% 44.3% 44.7%(1) Secured Debt to Aggregate Assets 24.8% 26.1% 29.5% 31.2%(2) Unencumbered Assets $3.5B $3.4B $2.7B $2.5B Debt to Adjusted EBITDA 8.5X 8.4X 8.4X 8.4X(1) Int
Slide 74: Conservative Capital Structure
KEY FINANCIAL HIGHLIGHTS CONSERVATIVE CAPITAL STRUCTURE Secured Mortgage Financing Amount - $2.3 billion $8.9 Billion 25.9% Weighted Avg Interest Rate – 3.90% Total Enterprise Value Weighted Avg Term to Maturity – 4.5 years Unsecured Debentures Focused on: Amount - $1.81 billion 20.4% Weighted Avg I
Slide 75: Stable Cash Flow
KEY FINANCIAL HIGHLIGHTS STABLE CASH FLOW PAYOUT 90.3% 88.6% 84.7% 81.1% 82.8% 79.8% RATIO TO AFFO 2012 2013 2014 2015 2016 2017 ($ per unit) FFO 1.79 1.85 1.95 2.10 2.23* 2.20 AFFO 1.71 1.75 1.84 1.99 2.10* 2.07 Distributions 1.55 1.55 1.56 1.61 1.66 1.71 *includes $9.9 million settlement proceeds
Slide 76: Market Factors Being Monitored
MARKET FACTORS BEING MONITORED ▪ In the coming years, retailers’ businesses will be affected by: • E-commerce • Aging population • Urbanization and the move to more convenient shopping • Changing ethnic mix of population ▪ We will continue to monitor the impact of these issues and will adjust our bu
Slide 77: E-Commerce Response
MARKET FACTORS E-COMMERCE RESPONSE With Penguin Pick-Up ▪ Located at Scarborough (1900 Eglinton) SmartCentre SMARTCENTRES REAL ESTATE INVESTMENT TRUST MAY 2018 - INVESTOR PRESENTATION 77
Slide 78: E-Commerce Responses
MARKET FACTORS E-COMMERCE RESPONSES ▪ Penguin Pick-Up: • Initiative driven by Penguin Investments • Convenient locations for consumers to pick up products ordered online • Drives traffic to shopping centres and supports tenants • 8 SmartCentres locations in place for the initiative at year-end, alon
Slide 79: The Best Offense Starts with a Strong Defense
SUMMARY THE BEST OFFENSE STARTS WITH A STRONG DEFENSE BEST-IN-CLASS STRONG PIPELINE PORTFOLIO FINANCIAL OF NEW Newest retail portfolio POSITION DEVELOPMENT amongst all Canadian Strong balance sheet OPPORTUNITIES peers. 84% located in and strong credit metrics. GROWING EVERY urban or near urban Growi
SmartCentres Real Estate Investment Trust — Investor Presentation (May 2018) on 6ix