Granite Real Estate Investment Trust · TSX:GRT.UN
Granite Real Estate Investment Trust — Investor Day (November 2018)
17 slides from Granite Real Estate Investment Trust's investor day presentation, Nov 30, 2018
Slide 1: Granite Investor Day
Granite Investor Day November 30, 2018 (All dollar references in CAD currency unless noted) Note: All Figures are in USD Unless Otherwise Noted (USD / CAD 1.3142, EUR / CAD 1.5345)
Slide 2: Presentation of Certain Information
PRESENTATION OF CERTAIN INFORMATION Unless otherwise indicated in this presentation, all information is presented as of September 30, 2018 and all financial information that is identified as current refers to the period ending September 30, 2018. For definitions of certain non-IFRS measures used in
Slide 3: Mission, Vision, Priorities
MISSION, VISION, PRIORITIES MISSION Generate stable & growing cash flow and maximize total return for GRT unitholders VISION Build the highest quality industrial REIT in Canada PRIORITIES Institutional quality portfolio in key e-commerce and distribution markets Industry-leading management platform
Slide 4: Summary of 2020 Strategic Targets
SUMMARY OF 2020 STRATEGIC TARGETS Granite Current & Granite 2020 Current 2020 MPP 28% SPP ∼20% EUR MPP ∼40% ∼15% EUR 50% SF: 32.5M SPP 27% GBV: $3.2B CAN Phase I SF: 40M+ NOI: $214M 18% GBV: $4.0B+ CAN ∼20% MLP USA 45% 32% USA ∼40% MLP ∼65% Cons. FFOPU / POR $3.66 / 77% FFOPU / POR Consensus P/FFO &
Slide 5: Peer Trading Summary
PEER TRADING SUMMARY Canadian Peers US Peers 27.5x 27.5x 22.5x 22.5x mean: 19.3x P/FFO P/FFO 17.5x 17.5x 16.0x 16.0x 15.0x 15.0x mean: 13.4x 12.5x 12.5x 7.5x 7.5x AP AAR 2020 FCR GRT SMU REI WIR SRU CHP HR DIR CRT AX REXR TRNO PLD DRE EGP FR MNR 2020 LPT GRT STAG Payout % 69% 78% 74% 68% 80% 82% 80%
Slide 6: Phases of Strategy
PHASES OF STRATEGY REORGANIZATION 2016-2018 PHASE I – BUILDING THE Change in Board composition FOUNDATION 2018-2020 PHASE II – ACCELERATED New CEO appointed Refocused Board & Management TRANSFORMATION Changes to Real Estate Teams 2019-2023 Leadership Team Sale of select non-core SPP in Achieve criti
Slide 7: Investment Targets by Return Profile & Type
INVESTMENT TARGETS BY RETURN PROFILE & TYPE Investment Profile Target Allocation by Investment Profile CORE 10-20% Stabilized Class A assets in core target markets 5.5-7.0% IRR 50% 30-40% YIELD/VALUE-ADD Core Value-Add Opportunistic IPP in Tier II markets & E-Commerce Hubs Value-add assets with vaca
Slide 8: Investment Targets by Market
INVESTMENT TARGETS BY MARKET Market Type Target Portfolio Allocation by Market Type 7% Tier I PF Current*: 12.1M SF Total 2023 – Low: ~20 M SF Total 2023 – High: ~25 M SF 42% 51% Tier II & E-Commerce Hubs Tier I Tier II & E-Commerce Emerging E-Commerce PF Current*: 11.4M SF Hubs Hubs Total 2023 – Lo
Slide 9: Market and Asset Considerations
MARKET AND ASSET CONSIDERATIONS Invest selectively/opportunistically in Target markets with superior Focus on modern facilities that meet evolving property types and markets economic conditions and market the demands of E-Commerce and benefiting from technological fundamentals traditional distributi
Slide 10: Development as Part of Growth Strategy
DEVELOPMENT AS PART OF GROWTH STRATEGY Leverage our in-house expertise to pursue and execute on development and redevelopment opportunities Target ∼$300M in capital over the next five years on development Develop properties having state-of-the-art design characteristics meeting evolving trends in te
Slide 11: Target Markets - USA
TARGET MARKETS - USA USA Transport routes by Volume 10 E-Commerce Triangle
Slide 12: Target Markets - Canada
TARGET MARKETS - CANADA 11
Slide 13: E-Commerce Trends - General
E-COMMERCE TRENDS - GENERAL Global E-Commerce sales expected to more than double by 2021 Estimated 30% of net absorption related to E-Commerce US E-Commerce sales expected to grow by ~50% by 2021 +$170B of additional annual retail sales in the US by 2022 requires over +200M SF of additional modern w
Slide 14: Labour as an Increasing Market Factor
LABOUR AS AN INCREASING MARKET FACTOR Markets with a deep labour pool and relatively low labour cost stand to benefit most from E-Commerce & logistics growth Markets with these attributes can expect higher rent growth, positive absorption and increased development Labour access and cost hold a treme
Slide 15: Organizational Principles
ORGANIZATIONAL PRINCIPLES Collectively, our culture will be based on the following priorities: Trust Working & communicating with each other honestly and openly Teamwork Working together for optimal shared outcomes Accountability Taking responsibility for our own actions and the needs of the group S
Slide 16: Utilizing the Balance Sheet
UTILIZING THE BALANCE SHEET GRT is currently rated BBB/Baa2 with a stable outlook by DBRS/Moody’s Reducing Magna concentration to <40% by revenue and maintaining prudent capital structure will preserve and potentially enhance current ratings A credit rating enhancement would reduce cost of debt and
Slide 17: Key Target Portfolio Metrics
KEY TARGET PORTFOLIO METRICS Summary of 2023 key target portfolio metrics by GLA Target Portfolio Allocation by Asset Type Target Portfolio Allocation by Market Target Portfolio Allocation by Geography 5% 4% 5% 6% 10% 30% 49% 49% 50% 41% 31% 20% Warehouse/DC Crossdock/Fulfillment Tier I Tier II/E-Co
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