First Capital Real Estate Investment Trust · TSX:FCR.UN
First Capital Real Estate Investment Trust — Q3 2020 Earnings Presentation
75 slides from First Capital Real Estate Investment Trust's earnings presentation, November 2020
Slide 1: Q3 2020 Investor Presentation
Q3 2020 Investor Presentation
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
Slide 3: Company Snapshot
COMPANY SNAPSHOT (TSX: FCR.UN) First Capital is a leading developer, owner and manager of 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, communities and our inves
Slide 4: COVID-19 Update: Business Environment Update
COVID-19 UPDATE Business Environment Update • FCR’s tenant mix is designed to provide consumers with their everyday needs o As of Q3, close to 100% of FCR’s tenants were open for business • Collected 92%* of Q3 gross rent • All construction projects experienced only minor delays and are progressing
Slide 5: COVID-19 Update: CECRA Program
COVID-19 UPDATE Canada Emergency Commercial Rental Assistance (“CECRA”) Program Extended to cover the months of April through September 2020 o Property owner abated 75% of the qualifying tenant’s gross rent o Government extended forgivable loan to the property owner for 50% of the gross rent o Tenan
Slide 6: COVID-19 Update: Strong Balance Sheet and Liquidity
COVID-19 UPDATE Maintaining a Strong Balance Sheet and Liquidity Position • ~$835m of cash and undrawn credit facilities* • Unencumbered properties with an IFRS value of ~$7.0b • Less than 6% of total debt maturing in 2021 • As of Q3 2020, achieved ~89% of the target to reduce 2020 operating and cap
Slide 7: Safety Measures at FCR Properties
SAFETY MEASURES AT FCR PROPERTIES Provincial Restrictions + Guidelines: Hygiene: hand sanitizer in common Physical Distancing: encouraging as directed by the Chief Medical areas, enhanced cleaning/disinfection distancing of 2 metres with signs & Officer & Public Health Officials of high frequency to
Slide 8: Canadian Retail Sales
CANADIAN RETAIL SALES Following September’s gains, retail spending recovered to above pre-crisis levels in 9 of the 11 retail sub-sectors Variation in Retail Sales (September vs February) • Canada’s retail sales rose for a fifth month in a row in September Building material 16.7% Miscellaneous 16.3%
Slide 9: Super Urban Investment Strategy
SUPER URBAN INVESTMENT STRATEGY Creating thriving urban neighbourhoods to generate value for businesses, residents, communities and our investors • Investing in high-quality, mixed-use properties to build positions in targeted high growth areas • Fully integrating retail with other uses to create th
Slide 10: Super Urban Neighbourhoods
SUPER URBAN NEIGHBOURHOODS We define a super urban property based on its proximity to transit, its “Walkability Score”, and most importantly its population density and expect to continue to improve these metrics over time through our investment and disposition activity. >99% Public Transit Of portfo
Slide 11: Canada's Super Urban Portfolio
Canada's Super Urban Portfolio First Capital 11
Slide 12: Super Urban Neighbourhoods in Canada's Largest Cities
SUPER URBAN NEIGHBOURHOODS IN CANADA’S LARGEST CITIES Vancouver, Calgary, Western Canada Central Canada Toronto Eastern Canada Montreal, Ottawa Edmonton Neighbourhoods 44 Neighbourhoods 65 Neighbourhoods 41 GLA 6.8m GLA 8.6m GLA 4.9m Fair Value % 31% Fair Value % 53% Fair Value % 16% Edmonton 8% Cal
Slide 13: North American Leader in Population Density
NORTH AMERICAN LEADER IN POPULATION DENSITY FCR Portfolio Demographic Metrics vs. its Peer Group: Q3 2020 * $123,000 US $125,000 301,000 $108,000 154,000 138,000 US Peers ** FCR Q3 **US Peers ***CDN Peers FCR Q3 **US Peers ***CDN Peers 2020 2020 5 km Population 5 km Average Household Income As of Se
Slide 14: Growth in 5km Population Density
GROWTH IN 5KM POPULATION DENSITY > 300,000 +20% • Q3 2020 5km population of 301,000 people • Up 94,000 or 45% from December 290,000 2016 • Making us a leader amongst our North American peer group* +20% 250,000 207,000 Achieved long-term goal of surpassing 300k people by 2021 in Q3 2020 Q4 Q4 Q4 2016
Slide 15: Strong Historical Growth in NAV per Share
STRONG HISTORICAL GROWTH IN NAV PER SHARE 2015 +5.2% $22.59 $23.39 CAGR 2015 - 2019 $21.85 $19.53 $18.25 2015 2016 2017 2018 2019 First Capital 15
Slide 16: Consistently High Performance: Same Property NOI Growth
CONSISTENTLY HIGH PERFORMANCE Total Same Property NOI Growth 4.0% 2.9% 3.3% 10 Year Average 3.0% 2.0% 1.0% 0.0% 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 First Capital 16
Slide 17: Consistently High Performance: Lease Renewal Rate Increases
CONSISTENTLY HIGH PERFORMANCE Lease Renewal Rate Increases 12.0% 10.7%* 10.0% 9.3% 8.0% 10 Year Average 6.0% 4.0% 2.0% 0.0% 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Represents increase on total portfolio basis. Includes all renewals and contractual fixed rate renewals. * The Trust achieved
Slide 18: Premier Portfolio: Highest Rents in Sector
PREMIER PORTFOLIO HIGHEST RENTS IN SECTOR FCR rents are 32% higher than peer group average 3.0% $21.84 $19.98 FCR Average rent growth 5 year CAGR $18.66 Peer Group Average $16.55 $15.45 $14.82 $13.84 1.8% Peer Average rent growth 5 year CAGR Q3 2020 Base Rent *Rates for Crombie and Choice are averag
Slide 19: Strategic and Diversified Retail Tenant Mix
STRATEGIC AND DIVERSIFIED RETAIL TENANT MIX # of Stores % of Rent Other Necessity-Based 505 18.6 Retailers Grocery Stores 118 17.0 Medical, Professional & 1,361 15.4 Personal Services QSR, Chains and Cafes 888 12.9 Pharmacies 118 9.0 Other Tenants 510 8.6 Banks & Credit Unions 192 8.3 Fitness Facili
Slide 20: Top 20 Retail Tenants
TOP 20 RETAIL TENANTS Contribute 45% of annualized minimum rent (AMR) Investment Investment Rank # Tenant AMR Grade Rank # Tenant AMR Grade 1. 10.3% * 11. 1.4% 2. 5.6% 12. 1.3% 3. 2.9% 13. 1.3% 4. 2.7% 14. 1.3% 5. 2.5% 15. 1.2%** 6. 2.0% 16. 1.1% - 7. 1.8% 17. 1.0% 8. 1.8% - 18. 1.0%*** - 9. 1.8% -
Slide 21: Portfolio Quality Never Higher with $1.4b of Investment Activity
PORTFOLIO QUALITY HAS NEVER BEEN HIGHER WITH $1.4b OF INVESTMENT ACTIVITY IN 2019 2019 5km Average 5km Average $ Amount Population Household Income Acquisitions $392m 535,000 $132,000 Development Spend $166m 389,000 $117,000 Investment Total $558m 484,000 $127,000 Dispositions $835m 138,000 $101,000
Slide 22: Density Pipeline
Density Pipeline FIRST OW CAPITAL
Slide 23: Significant Future Density Pipeline
SIGNIFICANT FUTURE DENSITY PIPELINE Density Pipeline = 25.0m sf 7.2m sf (29%) in IFRS NAV • 0.6m sf under active development • 6.5m sf future incremental density valued at $514m or $79 psf • 0.1m sf residential inventory Yonge & Roselawn Toronto, ON Christie Cookie Site Toronto, ON 1071 King St West
Slide 24: Entitlements Program
ENTITLEMENTS PROGRAM • 2019 entitlement applications of 9m sf surpassed our goal of 7.5m sf • Once approved, FCR expects to recognize a meaningful increase to the current IFRS value • Pre-2019 and 2019 entitlement applications totaled 12m sf, close to 50% of FCR’s 25m sf of density pipeline • Planne
Slide 25: Christie Cookie Site Master Planned Neighbourhood
Master Planned Super Urban Neighbourhood Future Mixed-Use Neighbourhood Former Christie Cookie Site, Toronto, ON 28 ACRES Demographics 5KM AVG 2020 Estimates Population 269,200 Average Household Income $119,000 First Capital 25
Slide 26: Christie Cookie Site Planned Gross Floor Area
Master Planned Super Urban Neighbourhood Future Mixed- Use Neighbourhood Former Christie Cookie Site, Toronto, ON Planned Gross Floor Area (at 100%) Residential GFA ( ~7,500 Units) 6,000,000 sf Retail GFA 500,000 sf Office GFA 500,000 sf Total GFA 7,000,000 sf Targeted Start 2024/2025 First Capital
Slide 27: Yonge & Roselawn
Current Future Mixed-Use Project Yonge & Roselawn Toronto, ON Demographics 5KM AVG 2020 Estimates Population 489,000 Average Household Income $194,000 First Capital 27
Slide 28: Yonge & Roselawn Future Project
Future Future Mixed-Use Project Yonge & Roselawn Toronto, ON Current Retail GLA 64,000 sf Future Residential GFA (535 Units) 414,000 sf Future Retail GFA 106,000 sf Total Future GFA 520,000 sf Targeted Start 2022 First Capital 28
Slide 29: Super Urban Neighbourhoods
Super Urban Neighbourhoods 29
Slide 30: Bloor-Yorkville
Super Urban Neighbourhood Bloor-Yorkville Toronto, ON Property Statistics 5KM AVG 2020 Estimates Population 766,000 Average Household Income $138,000 Gross Leasable Area Yorkville Village 315,000 sf One Bloor East 85,000 sf Hazelton Hotel (FCR share) 40,000 sf Total Bloor/Yorkville 440,000 sf Future
Slide 31: Bloor-Yorkville: Yonge and Bloor
Super Urban Neighbourhood Bloor-Yorkville Yonge and Bloor, Toronto, ON First Capital 31
Slide 32: Bloor-Yorkville: One Bloor East
Super Urban Neighbourhood Bloor-Yorkville One Bloor East, Toronto, ON Property Statistics Retail GLA 85,000 sf Commercial Parking 52 Stalls Key Tenants Direct Access to the Bloor-Yonge subway, the busiest station in Canada serving >400k people per day First Capital 32
Slide 33: One Bloor East: McEwan 2019 Opening
Super Urban Neighbourhood Bloor-Yorkville One Bloor East: McEwan 2019 Opening First Capital 33
Slide 34: One Bloor East: Chick-fil-A Canadian Flagship
Super Urban Neighbourhood Bloor-Yorkville One Bloor East: Chick-fil-A Canadian Flagship 2019 Opening First Capital 34
Slide 35: Super Urban Neighbourhood - Bloor-Yorkville
SUPER URBAN NEIGHBOURHOOD - BLOOR-YORKVILLE Recent Acquisition: 140 Yorkville Avenue, Mixed-Use Development C B A Bloor-Yorkville A 140 Yorkville Avenue B Yorkville Village Mall C Hazelton Hotel First Capital 35
Slide 36: Liberty Village
Super Urban Neighbourhood Liberty Village Toronto, ON Demographics 5KM AVG 2020 Estimates Population 564,600 Average Household Income $117,600 Key Tenants First Capital 36
Slide 37: Liberty Village Property Statistics
Super Urban Neighbourhood Liberty Village Toronto, ON Acreage 14.1 Retail GLA 396,000 sf Residential GLA 328,000 sf Office GLA 103,000 sf Total GLA 827,000 sf First Capital 37
Slide 38: Liberty Village: Burger Drops Opens During COVID
Super Urban Neighbourhood Liberty Village Burger Drops successfully opens during COVID September 2020 Opening First Capital 38
Slide 39: Griffintown
Super Urban Neighbourhood Griffintown Montreal, QC Demographics 5KM AVG 2020 Estimates Population 422,600 Average Household Income $100,900 Acreage 3.2 Retail GLA 254,000 sf First Capital 39
Slide 40: Griffintown Key Tenants
Super Urban Neighbourhood Griffintown Montreal, QC Key Tenants First Capital 40
Slide 41: Mount Royal Village
Calgary's Premier Super Urban Neighbourhood Mount Royal Village Calgary, AB Demographics 5KM AVG 2020 Estimates Population 234,500 Average Household Income $148,000 Acreage 4.1 . GLA 380,000 sf First Capital 41
Slide 42: Mount Royal Village Redevelopment Phase
Before Current Calgary's Premier Super Urban Neighbourhood Mount Royal Village Calgary, AB Redevelopment Phase Completed Gross Leasable Area 118,000 sf First Capital 42
Slide 43: Mount Royal Village Development Phase
Current Calgary's Premier Super Urban Neighbourhood Mount Royal Village Calgary, AB Development Phase Completed Gross Leasable Area 98,300 sf Key Tenants First Capital 43
Slide 44: Active Developments
Developments Ive Act @e First SW CAPITAL
Slide 45: Developing in Super Urban Neighbourhoods
DEVELOPING IN SUPER URBAN NEIGHBOURHOODS Active Development: 0.6m sf = 0.3m sf Commercial + 0.3m sf Residential King High Line Toronto, ON 3080 Yonge Street Toronto, ON Dundas & Aukland Toronto, ON Leaside Village Expansion Toronto, ON Centre Commercial Wilderton Montreal, QC First Capital 45
Slide 46: King High Line
Super Urban Neighbourhood King High Line Liberty Village, Toronto, ON Property Statistics Acreage 2.8 Residential Units 506 Retail GLA 156,000 sf 100% Commercial FCR Ownership 67% Residential Commercial Tenants First Capital 46
Slide 47: King High Line Toronto
Super Urban Neighbourhood King High Line Toronto, ON First Capital 47
Slide 48: Dundas & Aukland
Ground-Up Development Dundas & Aukland Toronto, ON First Capital 48
Slide 49: Dundas & Aukland Ground-Up Development
Current Ground-Up Development Dundas & Aukland Toronto, ON Demographics 5KM AVG (2020 Estimates) Population 275,600 Average Household Income $137,600 Gross Leasable Area (at 100%) Retail GLA 43,000 sf Residential GLA 267,000 sf Total GLA 310,000 sf FCR Interest 71% Key Tenants First Capital 49
Slide 50: Centre Commercial Wilderton
Current Super Urban Neighbourhood Centre Commercial Wilderton Montreal, QC Re-development Commenced Demographics 5KM AVG 2020 Estimates Population 635,500 Average Household Income $90,700 First Capital 50
Slide 51: Centre Commercial Wilderton Redevelopment
Future Super Urban Neighbourhood Centre Commercial Wilderton Montreal, QC Re-development Commenced Property Statistics Acreage 5 acres Pre-redevelopment GLA 112,000 sf Post Redevelopment GLA Retail GLA 130,000 sf Residential GLA 500,000 sf Total GLA 630,000 sf Key Tenants First Capital 51
Slide 52: 3080 Yonge St
Super Urban Neighbourhood Before 3080 Yonge St Toronto, ON Fully Integrated with Lawrence Subway Station Demographics 5KM AVG 2020 Estimates Population 416,800 Average Household Income $195,000 Current Total Acreage 2.0 New Photo Retail GLA 49,000 sf Office GLA 169,000 sf Total GLA 218,000 sf Key Te
Slide 53: Leaside Village Expansion
Active Development Leaside Village Expansion Toronto, ON Construction Commenced October 2019 Demographics 5KM AVG (2020 Estimates) Population 490,700 Average Household Income $175,400 Gross Leasable Area (at 100%) Retail GLA 44,000 sf Office GLA 28,000 sf Total 72,000 sf Key Tenants First Capital 53
Slide 54: Future Development
Future Development Significant Density Pipeline First Capital 54
Slide 55: Short-Medium Term Development Ready
SHORT-MEDIUM TERM DEVELOPMENT READY Humbertown Phase 1 Residential Toronto, ON Wilderton Phase 2 Residential Montreal, QC Yonge & Roselawn Toronto, ON First Capital 55
Slide 56: Short-Medium Term Development Ready
SHORT-MEDIUM TERM DEVELOPMENT READY 1071 King (Liberty Village) Toronto, ON 140 Yorkville Toronto, ON 400 King Street West Toronto, ON First Capital 56
Slide 57: Humbertown Shopping Centre
Future Development Humbertown Shopping Centre Toronto, ON Demographics 5KM AVG (2020 Estimates) Population 351,900 Average Household Income $127,400 Size 9.0 acres First Capital 57
Slide 58: Edenbridge Kingsway
Future Development Phase 1 Edenbridge Kingsway Humbertown, Toronto, ON Phase 1 Size 1.8 acres (Phase 1) Future Retail GFA 7,000 sf Residential GFA 245,000 sf Total Future GFA 252,000 sf Partner Residential 50% Targeted Phase I Start 2021 First Capital 58
Slide 59: 1071 King Street West
Future Future Development 1071 King Street West Toronto, ON Demographics 5KM AVG 2020 Estimates Population 561,000 Average Household Income $117,100 Gross Floor Area (at 100%) Residential GFA 198,000 sf Retail GFA 5,000 sf Total GFA 203,000 sf Ownership Interest 67% Targeted Start 2021 First Capital
Slide 60: 400 King Street West
Existing Future Development 400 King Street West Toronto, ON Demographics 5KM AVG 2020 Estimates Population 581,000 Average Household Income $129,000 First Capital 60
Slide 61: 400 King Street West Future
Future Future Development 400 King Street West Toronto, ON Gross Floor Area (at 100%) Residential GFA 415,000 sf Retail GFA 38,000 sf Total GFA 453,000 sf Ownership Interest 35% Targeted Start 2021/2022 61
Slide 62: Environmental, Social and Governance (ESG)
Environmental, Social and Governance (ESG) 62
Slide 63: ESG Initiatives
ESG INITIATIVES 175 119 Properties certified 76% of portfolio GLA LEED-certified projects > 3.7m sf 2020 Achieved 4-star rating AAA Score 78 (2020), up from 46 (2014) High 2019 ESG scores* Environmental: 2 Social: 1 Highest rating possible Governance: 1 * On a scale of 1-10, with 1 being the highest
Slide 64: ESG Initiatives: Top Employer Recognition
ESG INITIATIVES Recognized as one of Canada’s Top Small & Greater Toronto’s Medium Employers Top 100 Employers (2nd consecutive year) 2020 Green Lease Leader Honouree in the by Institute for Market Globe & Mail’s inaugural Transformation “2020 Women Lead Here” list First Capital 64
Slide 65: ESG Initiatives: GHG Emissions
ESG INITIATIVES 10% decrease in Greenhouse Gas (GHG) emissions in the last 4 years (2015-2019) 25 26 25 Emissions (tCO2e) (thousands) 24 24 GLA (ft2) (millions) 23 23 22 22 21 21 20 20 2015 2016 2017 2018 2019 GHG Emissions (tCO2e) Reporting GLA (ft2) First Capital 65
Slide 66: Enhancing Super Urban Neighbourhoods Through Public Art
ENHANCING SUPER URBAN NEIGHBOURHOODS THROUGH PUBLIC ART 28 Public Art Installations across our portfolio Supporting Public Art Competitions in partnership with First Capital 66
Slide 67: Strong Gender Diversity Metrics
STRONG GENDER DIVERSITY METRICS ACROSS ALL LEVELS OF THE ORGANIZATION EXECUTIVE BOARD MEMBERS MEMBERS 63% Women 37% Men 22% Women 78% Men MANAGEMENT TOTAL Honouree in the Globe and Mail’s inaugural EMPLOYEES ROLES “2020 Women Lead Here” list Over 50% of management positions are held by females 53% W
Slide 68: FCR Supports BlackNorth Initiative
FCR SUPPORTS BLACKNORTH INITIATIVE BlackNorth Initiative is a movement calling on Canadian organizations to make a commitment to end systemic racism FCR is among 300 Canadian companies who signed the pledge and committed to: • Implement unconscious bias and anti-racism education • Enhance diversity
Slide 69: Financial Strength and Flexibility
Financial Strength and Flexibility Super Urban Neighbourhoods
Slide 70: Capital Structure
CAPITAL STRUCTURE Enterprise Value $7.7b 20% Mortgages and Secured Facilities: $1.6b Unsecured Debentures: $2.5b Unsecured Term Loans: $0.8b 43% Unsecured Revolving Facilities: $0.0b ($800m total capacity) Total Unsecured $3.3b 37% Trust & Exchangeable Units: $2.8b (219.0m units) As of September 30,
Slide 71: Financial Strength and Flexibility
FINANCIAL STRENGTH AND FLEXIBILITY As at Q3 2020 2019 2018 2017 2016 Unsecured revolving credit $800 $800 $800 $800 $800 facilities (million) 70% Unencumbered assets (billion) $7.0 $7.0 $7.3 $7.4 $6.6 Unencumbered assets to of Q3 2020 assets unsecured debt 2.1x 2.2x 2.5x 2.4x 2.4x Secured debt as %
Slide 72: Well-Staggered Term Debt Maturities
$800 5.5% WELL-STAGGERED TERM Millions Unsecured Term Loans DEBT MATURITIES Mortgages 5.0% $700 Senior Unsecured Debentures Weighted Average Interest Rate 3.8% Weighted Average Effective Interest % 4.5% Term to Maturity 4.9 years $600 4.0% 96% of Term Debt is Fixed Rate $500 3.5% 3.0% $400 2.5% $300
Slide 73: Improving FFO Payout Ratio
IMPROVING FFO PAYOUT RATIO $350 84% 82% $302 82% $300 $287 $284 $261 80% $250 $236 78% 78% 76% $200 74% $150 74% 72% $100 70% 71% 70% 68% $50 66% $0 64% 2015 2016 2017 2018 2019 FFO excl OGLE/unit $1.05 $1.10 $1.16 $1.21 $1.24 Cash Dividends per unit $0.86 $0.86 $0.86 $0.86 $0.86 ACFO less Dividend
Slide 74: Outlook
OUTLOOK Canada’s Super Urban Portfolio COVID-19 Update • Investing in high-quality, mixed-use real estate • FCR has and will continue to be guided by its corporate located in Canada’s most densely populated cities, responsibility and sustainability program and values with a focus on creating thrivin
Slide 75: Contact
Adam Paul President & CEO Kay Brekken Executive VP & CFO First Capital Shops at King Liberty 85 Hanna Ave, Suite 400 Toronto, ON Tel: 416-504-4114 fcr.ca TSX: FCR.UN 75
First Capital Real Estate Investment Trust — Q3 2020 Earnings Presentation on 6ix