Primaris Real Estate Investment Trust · TSX:PMZ.UN
Primaris Real Estate Investment Trust — Primaris REIT — Investor Presentation (February 2022)
28 slides from Primaris Real Estate Investment Trust's investor presentation, February 2022
Slide 1: Built for the New Retail Landscape
Built for the New Retail Landscape Primaris REIT February 2022
Slide 2: Forward-Looking Statements
Forward-Looking Statements CAUTION Certain statements made in this presentation will contain forward‐looking information within the meaning of applicable securities laws (also REGARDING known as forward‐looking statements) including, among others, statements made or implied relating to Primaris REIT
Slide 3: Evolution of Canadian Retail
A blank slate to design a best- in-class vehicle to take advantage of the recovery in Evolution of Canadian Retail enclosed shopping centres Now • Canadian department stores almost extinct • Retailers conclude bricks & mortar is essential for customer acquisition, brand experience, brand loyalty and
Slide 4: $3.2B Fair Value, 11.4M SF GLA, 5.3x Debt/EBITDA
$3.2B 2,300+ Unsecured 35 Fair Value Tenants Pursuing Investment Properties Assets Grade Rating 11.4MSF 29% 45-50% 5.3x¹ GLA Debt/Value Target FFO Payout Ratio Debt/EBITDA 1. Based on 2022 expected EBITDA Primaris | 4
Slide 5: Guided by Strong Independent Board of Trustees
Guided by Strong Independent Board of Trustees Avtar Bains Louis Forbes Deborah Weinswig • President of Premise Properties, a private property owner • Corporate Director with more than 30 years of real estate and • Founder and CEO of Coresight Research across select North American centres finance ex
Slide 6: Strong Management Team and Robust Operating Platform
Experienced Management Team Strong Management Team with Significant Real Estate Investment and and Robust Operating Platform Operations Expertise Alex Avery Appointed to H&R REIT board of trustees in 2017, EVP, Asset Management & Graham Previous senior roles at Brookfield Chief Executive 20 4 Strate
Slide 7: Primaris Strategic Advantage Built for the New Retail Landscape
Demonstrated resiliency Primaris Strategic Advantage through pandemic. Steady organic EBITDA Built for the New Retail Landscape growth expected post pandemic Built to Grow and Thrive Size and Scale Proper Capitalization • $3.2B national portfolio of dominant • Debt to Gross Book Value: 29% enclosed
Slide 8: Capital Structure Targets
Designed to provide significant financial flexibility and create a differentiated investment Capital Structure Targets profile among Canadian REITs Sustained long term debt to EBITDA in the range Target secured debt to total debt below 40% of approximately 4x – 6x SECURED DEBT Strategy to transition
Slide 9: Near Term Strategic Priorities
Near Term Strategic Priorities Focus on retailer partner profitability Focus on operations and maintaining strength of balance sheet and OPERATIONS FINANCIAL • Disciplined operating cost management reduce leverage when possible • Leverage scale to achieve economies of scale cost savings • Maintain C
Slide 10: Dominant Shopping Centres in Growing Markets
Dominant Enclosed Dominant Shopping Centres in Shopping Centre Portfolio Growing Markets +3.9% 2020 – 2025 Average Expected Market Income Growth CAGR1 +3.0% 2020 – 2025 Average Expected HH Income Growth CAGR1 +5.5% 5 Year Average Expected Trade Area Population Growth2 211,000 Average Trade Area Popu
Slide 11: Fully Internalized, Scalable Platform With Strong Management Team
Fully Internalized, Scalable Platform With Strong Management Team Over 300 Employees Across 3 Regional Offices and Robust Operating Platform 26 18 10 17 1 Asset Management Finance & Corporate Leasing Legal Treasury 3 4 10 Development & Human Resources Information Construction Technology 1. Including
Slide 12: Dominant Enclosed Shopping Centre Portfolio
Primaris will own and manage regional enclosed shopping Dominant Enclosed centres and open air retail properties across Canada Shopping Centre Portfolio NOI by Asset Class NOI by Province NOI by Market Grocery-Anchored Non-Grocery Anchored QC 1% 5% 2% BC Primary 16% AB 25% 36% Dufferin Mall, Toronto
Slide 13: Diversified Tenant Base
Diversified Across a Number of Retail Sectors with a Strong Diversified Tenant Base National Tenant Base Tenant Mix Tenant Profile Tenant Quality % of Gross Rent % of Base Rent % of Base Rent National vs. Regional Investment Grade vs. Department Store Non-Investment Grade Cinema / Personal 5% Servic
Slide 14: Creditworthy Top Tenants
High Quality Roster of Tenants Creditworthy Top Tenants in the Retail Sector Annual Credit Ratings Annual Credit Ratings WALT WALT Tenant Sector Minimum Rent (S&P / Moody’s / Tenant Sector Minimum Rent (S&P / Moody’s / (in Years) (in Years) (% of Total) DBRS) (% of Total) DBRS) 1 Canadian Tire Value
Slide 15: Well Positioned for Economic Recovery
Resilience Through Economic Well Positioned for Cycles and is Poised for Post-Pandemic Recovery Economic Recovery Annually Quarterly Occupied & Committed COVID-19 93.8% Occupancy¹ 87.5% 91.4% 90.7% 89.4% 90.1% 90.7% 90.6% 91.0% 2017 2018 2019 2020 Q2-2020 Q3-2020 Q4-2020 Q1-2021 Q2-2021 Base Rent pe
Slide 16: Strong Large Format Leasing Momentum
Strong Large Format Leasing Year-to-Date Momentum with Positive Leasing Momentum High Quality Tenants Year-to-Date Large Format Leasing Activity² NEW 673,000 15 220,000 sf $3.7 million 2021 lease Leases Executed Total GLA Incremental Base Rent maturities¹ RENEWALS 5 690,000 sf $0.7 million Leases Ex
Slide 17: Well-Staggered Lease Maturity Profile
Well-Staggered Lease Maturity Profile Lease Maturity Schedule¹ WALT = 5.0 Years (000’s sq.ft.) 856 694 632 488 449 11% 7% 9% 6% 8% 2022 2023 2024 2025 Average 1. As at January 1, 2021. Excludes HOOPP’s properties to be contributed. Primaris | 17
Slide 18: Primaris' Response to the Evolving Retail Landscape
Primaris’ Response to the Evolving Retail Landscape Dominant mall in respective trade areas - Primarily secondary markets with trade area populations over 100,000 people isolated from major market trade areas Profitable retailer locations - Tenant rationalization of store count GROC due to e-commerc
Slide 19: E-Commerce and Innovation Strategy
Evolving to Become a Retail E-Commerce and Platform that Operates and Engages Shoppers Both Innovation Strategy Online and In-Store Current Key Initiatives Launch e-commerce market place, PRIMARCHÉ in partnership with Dropit • Modernize websites in preparation for launch of Offer customers a one-sto
Slide 20: Excess Density and Substantial Intensification Potential
Excess Density and Substantial Low Site Coverage Allows for Intensification, Development Intensification Potential and/or Subdivision of Land Primaris’ enclosed mall portfolio comprises of 23 assets nationwide • Situated on approximately 900 acres of land • Located close to major transportation node
Slide 21: Excess Density and Substantial Intensification Potential (Cont'd)
Flexibility to Develop and Excess Density and Substantial Continue to Surface Value or Intensification Potential (Cont’d) Monetize to Maintain Strong Balance Sheet Dufferin Grove Development Overview • $600 million intensification and redevelopment of Dufferin Mall’s northernmost parking area • Rede
Slide 22: Several Properties With Significant Intensification Potential
Several Properties With Excess Density and Substantial Significant Intensification Potential Intensification Potential (Cont’d) Place Stone Road Northland Orchard Park Sunridge Mall Sherwood Park Grant Park¹ Kildonan Place¹ D’Orleans¹ Mall Village (Winnipeg, MB} (Kelowna, BC) (Calgary, AB) (Sherwood
Slide 23: ESG
GOVERNANCE DIVERSITY ENVIRONMENTAL • 59% Female GM Team ESG ENERGY EFFICIENCY • Over 56% of full-time employees have been with us • Achieved set portfolio wide target of 5% for over 5 years and 10% over 20 years with Primaris energy reduction in 2021 • 67% of common areas across all properties have
Slide 24: Investment Proposition
Implied discount to Net Asset Value a compelling investment Investment Proposition opportunity Size and scale Conservative capital structure $22.00 Experienced and Independent Management Platform $14.17 Growth Vehicle Positioned as Industry Consolidator Demonstrated resiliency throughout the COVID-1
Slide 25: Invest With Us
Invest With Us TICKER PMZ.UN HOOPP will be Primaris’ Internally Managed Largest Unitholder at 26% S&P/TSX Capped REIT Index Inclusion Independent Board Providing Strong Institutional Endorsement Anticipated of Governance and Strategy IFRS FV of Assets is $3.2 Billion, Providing Pursuing Investment E
Slide 26: Appendix
Appendix ” Primaris”
Slide 27: Detailed Asset List
Detailed Asset List Ownership GLA at Share Store # Contributor Property Name City Province Segment Q2 2021 Major Tenants Share (SF) Count Hudson's Bay, Sport Chek, Marshalls, Indigo, Dollarama, 1 H&R Cataraqui Town Centre Kingston Ontario Enclosed 50% 301,390 103 Urban Planet 2 H&R Dufferin Mall Tor
Slide 28: Detailed Asset List (Cont'd)
Detailed Asset List (Cont’d) Ownership GLA at Share Store # Contributor Property Name City Province Segment Q2 2021 Major Tenants Share (SF) Count Hudson's Bay, Sport Chek, Public Works and 18 H&R Place D'Orleans Orleans Ontario Enclosed 50% 343,603 108 Government Services Canada Walmart, Winners, S
Primaris REIT — Investor Presentation (February 2022) on 6ix