Riocan Real Estate Investment Trust · TSX:REI.UN
Riocan Real Estate Investment Trust — Q4 2020 Earnings Presentation
39 slides from Riocan Real Estate Investment Trust's earnings presentation, Feb 11, 2021
Slide 1: Always Adapting: Looking Ahead, Q4 2020 Investor Presentation
ALWAYS ADAPTING FEBRUARY 2021 LOOKING AHEAD Q4 2020 Investor Presentation
Slide 2: About RioCan
90.6% 1 Retail: 7.8% 1 About RioCan Office: ~79% Residential: 1.6% 1 High quality portfolio of tenants concentrated in Canada’s major Increasingly Providing Strong or markets with a strong, Mixed-Use Portfolio Stable Income diversified and largely defensive tenant base ~42M Sq. Ft. 95.7% Development
Slide 3: Why Invest in RioCan
Why Invest in RioCan • High quality, sustainable income • Located in Canada’s most in-demand and growing markets • Diversified and defensive tenant mix • Predominantly open-air and grocery anchored • NAV creation and additional income through scaled development program • Transit-oriented properties
Slide 4: COVID-19 Business Update
High Quality, Sustainable Income COVID-19 Business Update(1) Resilient rent collection despite 2nd wave of COVID pandemic – 25% of tenants closed(2) 1.3% 0.0% 1.6% 1.0% 2.5% 6.8% 5.3% 3.4% 5.2% 5.2% 0.2% 0.6% 0.8% 2.0% 4.7% 87.2% 94.5% 94.2% 91.8% 91.7% Q2 2020 Q3 2020 Q4 2020 Q2-Q4 2020 Jan 2021 Ca
Slide 5: Strong Base of Resilient Tenants
High Quality, Sustainable Income Strong Base of Resilient Tenants With solid covenants and business fundamentals able to withstand challenges Rent Collection by Tenant Type(1) (% billed gross rent) Strong tenants National office and essential / necessity / value and specialty retail tenants with str
Slide 6: Well-positioned portfolio retains and attracts tenants
High Quality, Sustainable Income Well-positioned portfolio retains and attracts tenants Providing space to strong covenant tenants – from essential, value & specialty retailers to government and medical offices New Retention Leasing Ratio Spread (%) (%) Renewal Blended Leasing Leasing Spread Spread
Slide 7: Clear Catalysts for Growth
High Quality, Sustainable Income Clear Catalysts for Growth Population Evolving Retail Tight Residential Supply • Canada’s population is forecasted to • Full e-commerce experience combining • Housing demand continues outstrip grow 10.5% by 2030, surpassing other physical and online with physical spa
Slide 8: RioCan Located in Canada's Most In-demand Markets
High Quality, Sustainable Income RioCan Located in Canada’s Most In-demand Markets Prime, high density, transit-oriented areas where Canadians shop, live and work Dense Population 201,3261 People Strong Household Incomes $117,9181 Last Mile Hub Ideal for micro-fulfillment and Buy Online Pick-up In S
Slide 9: Canada – a Place to Grow
High Quality, Sustainable Income Canada – a Place to Grow Anticipated population and economic growth are advantageous for real estate sector Number of immigrants to Canada (1) Real GDP Growth – G7 Countries (2) Employment Growth – G7 Countries (2) (‘000s) (2020 – 2030) (2020 – 2030) 401 411 421 303
Slide 10: Toronto – Canada's largest and fastest growing metropolis
High Quality, Sustainable Income Toronto – Canada’s largest and fastest growing metropolis Attractive growth prospects Canada’s economic centre for Employment Dec. 2020 ~90%1 Most diverse city in the country Occupancy rates for office, retail various industries including despite more restrictions ~3
Slide 11: RioCan Keeping in Step with Evolving Retail Landscape
High Quality, Sustainable Income RioCan Keeping in Step with Evolving Retail Landscape COVID-19 has fast-tracked the evolution and amplified emerging success factors New Retail Reality RioCan Position RioCan Initiatives Integrated e-commerce Enable retailers to adapt and provide customers Programs s
Slide 12: RioCan Properties Attract Resilient Tenants
High Quality, Sustainable Income RioCan Properties Attract Resilient Tenants Improving property and tenant mix in lockstep with consumer spending patterns Property Mix* Tenant Mix* 40 bps YoY Enclosed, 9.5% Mixed- Use / Urban, 21.4% Open Air Centre, 27.1% Grocery Anchored 110 bps Centre, 42.0% YoY (
Slide 13: Strategic leasing that provides necessities for communities
High Quality, Sustainable Income Strategic leasing that provides necessities for communities Complementary necessity-based and value-oriented tenancies mitigate risks Low Exposure to Declining Retail Concepts Increasing Exposure % of Annualized Confirmed closures Retailers restructuring total rental
Slide 14: Additional sources bolster traditional income stream
High Quality, Sustainable Income Additional sources bolster traditional income stream RioCan has access to various avenues to generate income and cash flow Diversity of asset types: • Mixed-use developments increasingly expanding our exposure to office and residential NOI Inherent value in portfolio
Slide 15: Value creation through mixed-use development
NAV Creation Value creation through mixed-use development Transforming RioCan through excess density on existing income producing properties Total Pipeline by Zoning Status • ~100% located in Canada’s six major markets 7.7M SF, Zoning • ~74% located in the GTA 18% Approved 14.1M SF, • ~83% are resid
Slide 16: RioCan's development program offers multiple benefits
NAV Creation Enhancing quality and security of income with diversification into Asset residential rental Diversification RioCan’s Yield Enhancement - example development Development Levered Corp CHMC Development Yield based program offers on IFRS Cost Leverage 42% financing Yield 5.5% 1.7% 8.3% mult
Slide 17: Unlocking the full potential of transit-oriented locations
NAV Creation Unlocking the full potential of transit-oriented locations RioCan’s selected developments mapped to Toronto transit system Demographics, 5km radius Toronto Pearson Average population1: ~320K International Airport Average household income1: ~$132K Post-secondary education: ~62% Legend2 U
Slide 18: RioCan Living – High Quality Rental Residences
NAV Creation RioCan Living – High Quality Rental Residences Steady rent collection of 98% for residential rental in Q4 2020 eCentral, Toronto, ON Frontier, Ottawa, ON Brio, Calgary, AB Pivot, Toronto, ON • 466 units, 36-storey • 228 unit, 23-storey • 163 unit, 12-storey • 361 unit, 36-storey buildin
Slide 19: Condo / Townhouse development and value creation
NAV Creation Condo / Townhouse development and value creation An alternate source of income and cash flow providing efficient capital Windfields Farm Townhomes Windfields Farm Condos Yorkville Condos (U.C. Uptowns) (U.C. Tower) (11 YV) All 153 units pre-sold(1) ~98% of 503 units pre-sold(1) ~98% of
Slide 20: Capital Recycling Surfaces Value
NAV Creation Capital Recycling Surfaces Value Strategic dispositions offering low cost of capital for mixed-use development Dispositions Closed Weighted Average (in millions) Firm & Conditional Total in 2020(1) Cap Rate Income Producing Properties $66.3M $174.6M $240.9M 5.5%(2) PUD/Residential Inven
Slide 21: Development Completions with More to Come
NAV Creation Development Completions with More to Come Select projects due for delivery in 2021 Development Completions FY2020 NLA Completed (sq. ft.) 529,000 Costs Transferred $386.6M THE WELL™ Toronto, Ontario Development Expenditures $493.4M Residential Inventory Gains $15.5M PUD and Residential
Slide 22: Prudent Approach to Development
NAV Creation Prudent Approach to Development RioCan plans to primarily self fund development through retained free cash flow, divestiture proceeds, strategic partnerships and faster capital recycle from condo/townhouse development As at Target December 31, 2020 Properties Under Development (“PUD”) &
Slide 23: Capital Structure Metrics
Balance Sheet Strength Disciplined and prudent balance sheet management Ample liquidity bolstered by large pool of unencumbered assets Target Q4 20201 Capital Structure Metrics Liquidity n/a $1.6B2 Debt to Adjusted EBITDA <8.0x 9.47x3 Debt to Total Assets 38% - 42% 45.0% Interest Coverage >3.0x 3.10
Slide 24: Ample Liquidity and Laddered Debt Maturity
Balance Sheet Strength Ample Liquidity and Laddered Debt Maturity Debt Maturity Schedule - As at December 31, 2020 $1.6B $229M of RioCan's mortgage maturities in in available liquidity* 2021 are already repaid, refinanced or have refinancing commitments in place. *High liquidity due to timing of the
Slide 25: Embedding Best Practices in Everything We Do
ESG Leadership Embedding Best Practices in Everything We Do Select 2020 Achievements ENVIRONMENT SOCIAL GOVERNANCE 52020Star Rating GRESB Real Estate Top 100 Employers Greater Toronto’s Top Employers RioCan Diversity, Equity & Inclusion Council Assessment Competition Established and DEI Office
Slide 26: Supporting Communities and People
ESG Supporting Communities and People Leadership Building a strong corporate culture and giving back to communities we serve RioCan Cares Working with charities and hospitals to provide assistance where needed • Celebrated frontline healthcare workers, from providing priority line access and discoun
Slide 27: Appendix and Feature Projects
2323 Yonge St. 2345 Yonge St. APPENDIX AND FEATURE PROJECTS
Slide 28: Value creation underway
Value creation underway Development pipeline: 58 projects delivering 42M square feet of NLA Estimated Density (NLA) at RioCan's Interest • 20 projects under construction (thousands of sq. ft.) # of projects Commercial Residential Rental Air Rights Sale Residential Inventory Total and on track for co
Slide 29: Value creation underway
Value creation underway Mixed-used Residential Projects Currently Under Construction # of Cost to Total Est. Total NLA residential date at Cost at Anticipated RioCan Ownership ('000s sq. at Riocan units at Air right RioCan RioCan Inventory gain date of Location % (Partner) ft) Interest 100% Commerci
Slide 30: RioCan Colossus Centre
HWY 400 HWY 407 HWY 7 VAUGHAN, ON RIOCAN COLOSSUS CENTRE Investor Presentation Q4 2020 | RioCan | 30
Slide 31: RioCan Colossus Centre
• >50 acre site currently consisting of 571k sq. ft of income producing retail • ~10M sq. ft. of mixed-use density contemplated involving VAUGHAN, ON multi-phase development RIOCAN COLOSSUS CENTRE Investor Presentation Q4 2020 | RioCan | 31
Slide 32: The Well
• 36-storey, 1 million square feet of office – 85% pre-leased • ~420k square feet of retail • 592-unit residential rental under construction TORONTO THE WELL Investor Presentation Q4 2020 | RioCan | 32
Slide 33: The Well
TORONTO THE WELL Investor Presentation Q4 2020 | RioCan | 33
Slide 34: Yonge Sheppard Centre & Pivot
• ~315k sq. ft. of office • ~305k sq. ft. of retail • 36-storey, 361 unit residential rental - completed TORONTO YONGE SHEPPARD CENTRE & PIVOT Investor Presentation Q4 2020 | RioCan | 34
Slide 35: Frontier & Latitude
Frontier, Phase 1 – 98% leased(1) • 33-storey, 228 unit residential rental Latitude, Phase 2 – under construction based on success of Phase 1 • 20-storey, 209 unit residential rental Gloucester Frontier & Latitude 1) As of February 10, 2021 Investor Presentation Q4 2020 | RioCan | 35
Slide 36: Litho
• 9-storey, 210 unit residential rental • ~28k sq. ft. of retail • Under construction for completion Q3 2021 Toronto Litho Investor Presentation Q4 2020 | RioCan | 36
Slide 37: Strada
• 8-storey, 61 unit residential rental • ~6k sq. ft. of retail • Under construction for completion Q3 2021 Toronto Strada Investor Presentation Q4 2020 | RioCan | 37
Slide 38: Non-GAAP Measures and Forward Looking Information
NON-GAAP FORWARD LOOKING MEASURES INFORMATION RioCan’s consolidated financial Certain information included in this presentation contains forward-looking statements within the meaning of applicable statements are prepared in accordance securities laws including, among others, statements concerning ou
Slide 39: RioCan
RIO#*CAN
RioCan Real Estate Investment Trust — Q4 2020 Earnings Presentation on 6ix