First Capital Real Estate Investment Trust · TSX:FCR.UN
First Capital Real Estate Investment Trust — Q2 2020 Earnings Presentation
72 slides from First Capital Real Estate Investment Trust's earnings presentation, Aug 7, 2020
Slide 1: Q2 2020 Investor Presentation
Q2 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
COVID-19 UPDATE Business Environment Update • FCR’s tenant mix was designed to provide consumers with their everyday needs • Tenants representing ~50% of monthly gross rent, deemed essential and remained open during Q2 o As of August 5, 2020, ~96% of FCR’s tenants were open for business • Collected
Slide 5: COVID-19 Update: CECRA Program
COVID-19 UPDATE Canada Emergency Commercial Rental Assistance (“CECRA”) Program Covers the months of April through August 2020 o Property owner abates 75% of the qualifying tenant’s gross rent o Government extends forgivable loan to the property owner for 50% of the gross rent o Tenant pays remainin
Slide 6: COVID-19 Update: Strong Balance Sheet and Liquidity
COVID-19 UPDATE Maintaining a Strong Balance Sheet and Liquidity Position • ~$770m of cash and undrawn credit facilities* • Unencumbered properties with an IFRS value of ~$7.0b • Remaining 2020 debt maturities ~$65m* • On track to reduce 2020 operating expenses and capital spend by ~$75m • ~$60m red
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: 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 9: 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 10: Canada's Super Urban Portfolio
Canada's Super Urban Portfolio First Capital 10
Slide 11: 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 Properties 44 Properties 64 Properties 41 GLA 6.8m GLA 8.6m GLA 4.9m Fair Value % 31% Fair Value % 53% Fair Value % 16% Edmonton 8% Calgary 12% Van
Slide 12: North American Leader in Population Density
NORTH AMERICAN LEADER IN POPULATION DENSITY FCR Portfolio Demographic Metrics vs. its Peer Group: Q2 2020 * $120,000 US $125,000 294,000 $108,000 154,000 138,000 US Peers ** FCR Q2 **US Peers ***CDN Peers FCR Q2 **US Peers ***CDN Peers 2020 2020 5 km Population 5 km Average Household Income As of Ju
Slide 13: Growth in 5km Population Density
GROWTH IN 5km POPULATION DENSITY 300,000 +20% • Q2 5km population of 294,000 people • Up 87,000 or 40% from December 2016 293,000 • Making us a leader amongst our North American peer group* +20% 250,000 • Targeting 300,000 people by 2021 207,000 Q4 Q4 Q1 2016 2018 2020 2021 5 km Population *North Am
Slide 14: 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 14
Slide 15: 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 15
Slide 16: 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 17: Premier Portfolio: Highest Rents in Sector
PREMIER PORTFOLIO HIGHEST RENTS IN SECTOR FCR rents are 31% higher than peer group average 3.0% $21.70 $19.89 FCR Average rent growth 5 year CAGR $18.69 Peer Group Average $16.53 $15.54 $14.69 $13.85 1.8% Peer Average rent growth 5 year CAGR Q2 2020 Base Rent *Rates for Crombie and Choice are averag
Slide 18: Strategic and Diversified Retail Tenant Mix
STRATEGIC AND DIVERSIFIED RETAIL TENANT MIX # of Stores % of Rent Grocery Stores 118 17.0% Medical, Professional & 1,360 15.4% Personal Services Restaurants & Cafes 950 14.5% Pharmacies 118 9.1% Banks & Credit Unions 191 8.2% Fitness Facilities 81 3.7% Liquor Stores 92 3.4% Daycare & Learning 102 1.
Slide 19: 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. 1.2%** 5. 2.5% 15. 1.1% - 6. 2.0% 16. 1.1% 7. 1.8% 17. 1.0% 8. 1.8% - 18. 1.0%*** - 9. 1.8% -
Slide 20: Portfolio Quality with $1.4b of Investment Activity in 2019
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 21: Density Pipeline
Density Pipeline FIRST OW CAPITAL
Slide 22: 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 $512m or $79 psf • 0.1m sf residential inventory Yonge & Roselawn Toronto, ON Christie Cookie Site Toronto, ON 1071 King St West
Slide 23: Entitlements Program
ENTITLEMENTS PROGRAM • 2019 entitlement applications of 9.0m 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, representing close to 50% of FCR’s 25.0m sf of density
Slide 24: Master Planned Super Urban Neighbourhood: Christie Cookie Site
Master Planned Super Urban Neighbourhood Future Mixed-Use Neighbourhood Former Christie Cookie Site, Toronto, ON 28 ACRES Demographics 5KM AVG 2019 Estimates Population 269,200 Average Household Income $113,800 First Capital 24
Slide 25: 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 26: Yonge & Roselawn
Current Future Mixed-Use Project Yonge & Roselawn Toronto, ON Demographics 5KM AVG 2019 Estimates Population 480,000 Average Household Income $188,400 First Capital 26
Slide 27: Yonge & Roselawn Future Project
Future Future Mixed-Use Project Yonge & Roselawn Toronto, ON Current Retail GLA 64,000 sf Future Residential GFA (687 Units) 533,000 sf Future Retail GFA 65,000 sf Total Future GFA 598,000 sf Targeted Start 2022 First Capital 27
Slide 28: Super Urban Neighbourhoods
Super Urban Neighbourhoods 28
Slide 29: Bloor-Yorkville
Super Urban Neighbourhood Bloor-Yorkville Toronto, ON Property Statistics 5KM AVG 2019 Estimates Population 741,100 Average Household Income $132,000 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 30: Super Urban Neighbourhood - Bloor-Yorkville
SUPER URBAN NEIGHBOURHOOD - BLOOR-YORKVILLE Recently Completed Re-Development - Yorkville Village Mall, Toronto Avenue Road Newly Constructed Yorkville Entrance Interior Events Program First Capital 30
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 Opening
Super Urban Neighbourhood Bloor-Yorkville One Bloor East: McEwan 2019 Opening First Capital 33
Slide 34: One Bloor East: Chick-fil-A Flagship Opening
Super Urban Neighbourhood Bloor-Yorkville One Bloor East: Chick-fil-A Canadian Flagship 2019 Opening First Capital 34
Slide 35: Recent Acquisition: 140 Yorkville Avenue
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 2019 Estimates Population 546,500 Average Household Income $111,700 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 36
Slide 37: Griffintown
Super Urban Neighbourhood Griffintown Montreal, QC Demographics 5KM AVG 2019 Estimates Population 411,400 Average Household Income $96,000 Acreage 3.2 Retail GLA 254,000 sf First Capital 37
Slide 38: Griffintown Key Tenants
Super Urban Neighbourhood Griffintown Montreal, QC Key Tenants First Capital 38
Slide 39: Mount Royal Village
Calgary's Premier Super Urban Neighbourhood Mount Royal Village Calgary, AB Demographics 5KM AVG 2019 Estimates Population 231,300 Average Household Income $147,000 Acreage 4.1 . GLA 380,000 sf First Capital 39
Slide 40: Mount Royal Village: Redevelopment Phase Completed
Before Current Calgary's Premier Super Urban Neighbourhood Mount Royal Village Calgary, AB Redevelopment Phase Completed Gross Leasable Area 118,000 sf First Capital 40
Slide 41: Mount Royal Village Key Tenants
Current Calgary's Premier Super Urban Neighbourhood Mount Royal Village Calgary, AB Gross Leasable Area 98,300 sf Key Tenants First Capital 41
Slide 42: Active Developments
Developments Ive Act @e First SW CAPITAL
Slide 43: Developing in Super Urban Neighbourhoods
DEVELOPING IN SUPER URBAN NEIGHBOURHOODS Active Development: 0.6m sf = 0.2m sf Commercial + 0.4m 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 43
Slide 44: 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 44
Slide 45: King High Line Toronto
Super Urban Neighbourhood King High Line Toronto, ON First Capital 45
Slide 46: Dundas & Aukland
Ground-Up Development Dundas & Aukland Toronto, ON First Capital 46
Slide 47: Dundas & Aukland Ground-Up Development
Future Ground-Up Development Dundas & Aukland Toronto, ON Demographics 5KM AVG (2019 Estimates) Population 271,800 Average Household Income $133,200 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 47
Slide 48: Centre Commercial Wilderton
Super Urban Neighbourhood Centre Commercial Wilderton Montreal, QC Re-development Commenced Demographics 5KM AVG 2019 Estimates Population 635,500 Average Household Income $90,700 First Capital 48
Slide 49: Centre Commercial Wilderton Under Construction
Under Construction 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 4
Slide 50: 3080 Yonge St
Super Urban Neighbourhood Before 3080 Yonge St Toronto, ON Fully Integrated with Lawrence Subway Station Demographics 5KM AVG 2019 Estimates Population 406,400 Average Household Income $190,200 Current Total Acreage 2.0 Retail GLA 49,000 sf Office GLA 169,000 sf Total GLA 218,000 sf Key Tenants Firs
Slide 51: Leaside Village Expansion
Active Development Leaside Village Expansion Toronto, ON Demographics 5KM AVG (2019 Estimates) Population 483,600 Average Household Income $170,000 Gross Leasable Area (at 100%) Retail GLA 44,000 sf Office GLA 28,000 sf Total 72,000 sf Key Tenants Construction Commenced October 2019 First Capital 51
Slide 52: Future Development
Future Development Significant Density Pipeline First Capital 52
Slide 53: Short-Medium Term Development Ready
SHORT-MEDIUM TERM DEVELOPMENT READY Phase 2 Humbertown Phase 1 Residential Toronto, ON Wilderton Phase 2 Residential Montreal, QC Yonge & Roselawn Toronto, ON First Capital 53
Slide 54: 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 54
Slide 55: Humbertown Shopping Centre
Future Development Humbertown Shopping Centre Toronto, ON Demographics 5KM AVG (2019 Estimates) Population 346,500 Average Household Income $122,700 Size 9.0 acres First Capital 55
Slide 56: 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 56
Slide 57: 1071 King Street West
Future Future Development 1071 King Street West Toronto, ON Demographics 5KM AVG 2019 Estimates Population 556,000 Average Household Income $111,000 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 58: 400 King Street West
Existing Future Development 400 King Street West Toronto, ON Demographics 5KM AVG 2019 Estimates Population 560,000 Average Household Income $123,000 First Capital 58
Slide 59: 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 59
Slide 60: Environmental, Social and Governance (ESG)
Environmental, Social and Governance (ESG) 60
Slide 61: ESG Initiatives
ESG INITIATIVES Canada’s Top Small & Recognized as one of 2020 Green Lease Leader Honouree in the Medium Employers Greater Toronto’s Top by Institute for Market Globe & Mail’s inaugural 100 Employers Transformation “2020 Women Lead Here” list 175 119 AAA High 2019 ESG scores* Environmental: 2 Social
Slide 62: ESG Initiatives: GHG Emissions
ESG INITIATIVES 10% decrease in Greenhouse Gas (GHG) emissions in the last 5 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 62
Slide 63: Enhancing Super Urban Neighbourhoods Through Public Art
ENHANCING SUPER URBAN NEIGHBOURHOODS THROUGH PUBLIC ART 27 Public Art Installations across our portfolio Supporting Public Art Competitions in partnership with First Capital 63
Slide 64: 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 65: 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 200 Canadian companies who signed the pledge and committed to: • Implement unconscious bias and anti-racism education • Enhance diversity
Slide 66: Financial Strength and Flexibility
Financial Strength and Flexibility Super Urban Neighbourhoods
Slide 67: Capital Structure
CAPITAL STRUCTURE Enterprise Value $7.8b 19% Mortgages and Secured Facilities: $1.5b Unsecured Debentures: $2.3b Unsecured Term Loans: $0.7b 42% Unsecured Revolving Facilities: $0.3b ($800m total capacity) Total Unsecured $3.3b 39% Trust & Exchangeable Units: $3.0b (219.0m units) As of June 30, 2020
Slide 68: Financial Strength and Flexibility
FINANCIAL STRENGTH AND FLEXIBILITY As at Q2 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 Q2 2020 assets unsecured debt 2.1x 2.2x 2.5x 2.4x 2.4x Secured debt as %
Slide 69: Well-Staggered Term Debt Maturities
WELL-STAGGERED TERM $800 6.0% Millions Unsecured Term Loans DEBT MATURITIES Mortgages Senior Unsecured Debentures Weighted Average Interest Rate 3.9% $700 Weighted Average Effective Interest % 5.0% Term to Maturity 4.9 years $600 95% of Term Debt is Fixed Rate 4.0% $500 $400 3.0% $300 2.0% $200 1.0%
Slide 70: 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/share $1.05 $1.10 $1.16 $1.21 $1.24 Cash Dividends per share $0.86 $0.86 $0.86 $0.86 $0.86 ACFO less Dividen
Slide 71: 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 72: 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 72
First Capital Real Estate Investment Trust — Q2 2020 Earnings Presentation on 6ix