Riocan Real Estate Investment Trust · TSX:REI.UN
Riocan Real Estate Investment Trust — Q1 2019 Earnings Presentation
15 slides from Riocan Real Estate Investment Trust's earnings presentation, May 7, 2019
Slide 1: Q1 2019 Conference Call Presentation
Q1 2019 Conference Call Presentation May 7, 2019
Slide 2: Forward Looking Advisory & Non-GAAP Measures
FORWARD LOOKING ADVISORY & NON-GAAP MEASURES FORWARD LOOKING INFORMATION Certain information included in this presentation contains forward-looking statements within the meaning of applicable securities laws including, among others, statements concerning our objectives, our strategies to achieve tho
Slide 3: Funds from Operations & Payout Ratio
FUNDS FROM OPERATIONS (“FFO”) & PAYOUT RATIO • FFO/unit increased from $0.46 to $0.47 from Q1 2018 to Q1 2019 despite: o $1.0B in asset sales since Q1 2018 o $1.0M increase in unit-based compensation costs due to mark-to-market adjustment o $0.9M one-time IFRS debt modification cost o $0.5M lease up
Slide 4: Operational Highlights
OPERATIONAL HIGHLIGHTS Committed Occupancy Overall Commercial Portfolio Retail Office +30 bps +20 bps +150 bps 96.9% 96.7% 96.9% 95.6% 96.6% 94.1% Q1 2018 Q1 2019 Q1 2018 Q1 2019 Q1 2018 Q1 2019 Avg. Rents and Leasing Spreads Avg. Net Rents Blended Leasing Spread (commercial only) +6.9% +240 bps $19
Slide 5: Operational Highlights
OPERATIONAL HIGHLIGHTS RENT BREAKDOWN Q1 2019 SAME PROPERTY NOI GROWTH 74% OF RENT FROM NECESSITY-BASED Major Markets AND SERVICE-ORIENTED TENANTS 2.9% Entertainment & Hobby 3% Movie Theatres 1.7% Department 5% Stores & Apparel 8% 3% since 2007 8% since 2007 Grocery / Pharmacy / Liquor / Q1 2019 Q1
Slide 6: Residential Rental Development Progressing Well
RESIDENTIAL RENTAL DEVELOPMENT PROGRESSING WELL • 36 storey, 466-unit rental building • 203 units leased with 78 units occupied (as of March 31, 2019) • Rents averaging $3.85 per square foot (for market rent units) • Stabilization by mid-2020 • $0.5M lease-up loss in the first quarter of operations;
Slide 7: Residential Rental
RESIDENTIAL RENTAL • 23 storey, 228-unit rental building • 126 units pre-leased with rent per square foot averaging $2.48 • First occupancy in mid- 2019 with stabilization in mid-2020 • Zoning approved for four residential towers (up to 840 units) • Construction for Phase 2 accelerated to Q2 2019 Q1
Slide 8: Major Market Strategy
MAJOR MARKET STRATEGY Progress on our two key strategic metrics % of Revenues % of Revenues from Major Markets from GTA >90% >50% 87.5% 47.6% 85.4% 46.8% YE 2018 Q1 2019 Vision YE 2018 Q1 2019 Vision Disposition Progress as of May 6, 2019 Transaction type Value (M) • Sale prices to-date are material
Slide 9: Development Progressing Well
DEVELOPMENT PROGRESSING DEVELOPMENT PROGRESSINGWELL WELL Total Pipeline by Zoning Status Key Statistics (Q1 2019) (26.3M sf) Development Completions: Future est. - NLA Completed (in sf) 92,000 density, Zoned, 7.6M sf, 11.2M sf, - Costs Transferred $101.8M 28.9% 42.6% Development Expenditures: $92.5M
Slide 10: Development Yield and Value Creation
DEVELOPMENT YIELD AND VALUE CREATION • Updated estimates for development yield and value creation for five urban intensification and greenfield development projects that are complete or close to completion are shown below: $574.9M $33.1M 5.8% $791.7M $243.3M Total Estimated Estimated Yield on Estima
Slide 11: Funding Development
FUNDING DEVELOPMENT • RioCan is committed to self-funding its development program and maintaining a strong balance sheet As at Target Mar 31, 2019 Properties Under Development (“PUD”) & Residential Inventory $1.2B N/A PUD and Residential Inventory as % of Gross Assets – Per Line of 8.4% ~ 10%1 Credi
Slide 12: Capital Structure Metrics
STRONG BALANCE SHEET PRUDENT CAPITAL MANAGEMENT & FLEXIBLE CAPITAL STRUCTURE Capital Structure Metrics Target Q1 20191 Debt to Adjusted EBITDA <8.0x 7.94x Debt to Total Assets 38% - 42% 42.2% Interest Coverage >3.0x 3.55x Debt Service Coverage >2.25x 3.01x Fixed Coverage CONSISTENTLY ABOVE 95% >1.10
Slide 13: Jonathan Gitlin, President & Chief Operating Officer
PRESIDENT & COO COMMENTS Jonathan Gitlin, President & Chief Operating Officer Q1 | RioCan | 13
Slide 14: Edward Sonshine, Chief Executive Officer
CEO COMMENTS Edward Sonshine, O.Ont., Q.C. Chief Executive Officer Q1 | RioCan | 14
Slide 15: Edward Sonshine, Jonathan Gitlin
Edward Sonshine, O.Ont., Q.C. Chief Executive Officer Jonathan Gitlin President & Chief Operating Officer Qi Tang Senior Vice President & Chief Financial Officer Contact Information RioCan Yonge Eglinton Centre 2300 Yonge Street P.O. Box 2386 Toronto, ON M4P 1E4 (T) 1-800-465-2733 or (416) 866-3033
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