RFA Financial Inc. · TSX:RFA
RFA Financial — Artis Real Estate Investment Trust — Q2 2009 Earnings Presentation
29 slides from RFA Financial's earnings presentation, September 2009
Slide 1: Properties of Success
PROPERTIES OF SUCCESS SEPTEMBER, 2009 Q2-09 INSTITUTIONAL INVESTOR PRESENTATION
Slide 2: Forward-Looking Disclaimer
FORWARD-LOOKING DISCLAIMER Certain information included in this presentation contains forward-looking statements within the meaning of applicable securities laws. For this purpose, any statements contained herein that are not statements of historical fact may be deemed to be forward looking statemen
Slide 3: Notice Respecting Non-GAAP Measures
NOTICE RESPECTING NON-GAAP MEASURES Distributable Income (“DI"), Property Net Operating Income (“Property NOI”) and Funds from Operations (“FFO”) are non-GAAP measures commonly used by Canadian income trusts as an indicator of financial performance. “GAAP” means the generally accepted accounting pri
Slide 4: Unique Four Part Strategy
UNIQUE FOUR PART STRATEGY 1. Geographic focus: western Canada only 2. Product focus: commercial real estate only - industrial - office - retail 3. External growth: via accretive acquisitions in our target markets 4. Internal growth: via active asset management and new developments 4
Slide 5: Portfolio Overview
PORTFOLIO OVERVIEW Properties 83 Size 6.3 M sq.ft. Gross Book Value $1.31 B Fort McMurray Grande Prairie 6 Overall Occupied 3 96.8%(1) Edson Edmonton & Committed 3 4 1 Vancouver Red Deer 2 1 1 1 2 Saskatoon Calgary 2 2 4 4 12 Nanaimo Medicine Hat Moose Jaw Regina 1 1 7 Estevan = Industrial 1 17 6 2
Slide 6: Portfolio Summary by Province
PORTFOLIO SUMMARY Property GLA Property NOI by Province by Province British Columbia British Columbia 6% 6% Manitoba Alberta 31% Alberta Manitoba 56% 71% 15% Saskatchewan Saskatchewan 8% 7% Portfolio Assets as at June 30, 2009, less dispositions completed at August 11, 2009 6
Slide 7: Portfolio Summary by Asset Class
PORTFOLIO SUMMARY Property GLA Property NOI by Asset Class by Asset Class Retail Retail 31% 35% Office Office 52% 41% Industrial Industrial 28% 13% Calgary Downtown Office (% of total portfolio) = 4.6% Calgary Downtown Office (% of total portfolio) = 9.2% Calgary Suburban Office (% of total portfoli
Slide 8: Robust Western Economy
ROBUST WESTERN ECONOMY Average Retail Sales Growth GDP Growth 2010f Year Over Year, 2004-2008 3.4% 3.5% 8.7% 8.9% 3.3% 3.5% 9.0% 2.7% 8.0% 3.0% 6.4% 7.0% 2.5% 5.2% 6.0% 1.8% 4.6% 2.0% 5.0% 1.5% 4.0% 3.0% 1.0% 2.0% 0.5% 1.0% 0.0% 0.0% Manitoba Canada Alberta British Saskatchewan British Canada Manito
Slide 9: Robust Western Economy: Provincial Unemployment Rates
ROBUST WESTERN ECONOMY Provincial Unemployment Rates July - 2009 15.6% 16% 14% 12.2% 12% 9.4% 9.6% 10% 8.8% 9.2% 8.6% 8.1% 8% 6.8% 6% 5.2% 4.6% 4% 2% 0% SK MB AB BC CAN QC NB NS ON PEI NFLD Source Statistics Canada July 2009 9
Slide 10: Portfolio Overview: Largest Tenants by Gross Revenue
PORTFOLIO OVERVIEW 10 Largest Tenants by Gross Revenue Komex Approximately 24.1% of Gross Revenue excluding government tenants Portfolio Assets as at June 30, 2009, less dispositions completed at August 11, 2009 10
Slide 11: Portfolio Overview: Government Tenants
PORTFOLIO OVERVIEW Government Tenants 10.1% of Gross Revenue Approximately 3.8% of Gross Revenue from Federal Government Tenants Approximately 4.8% of Gross Revenue from Provincial Government Tenants Approximately 1.5% of Gross Revenue from Civil/Municipal Government Tenants Portfolio Assets as at J
Slide 12: Portfolio Overview: Tenant Diversification
PORTFOLIO OVERVIEW – 62.9% of Tenants are Government and National(1) Diversification by Tenant Size (GLA)(1) Regional & Local 33.3% National 54.2% Government 8.7% Vacant 3.8% Weighted Average Term to Maturity(2) All Leases 4.97 Years Top 10 Tenants 9.21 Years Government Tenants 3.58 Years (1) Portfo
Slide 13: Portfolio Overview: GLA and Gross Book Value
PORTFOLIO OVERVIEW GLA Gross Book Value 6.3 M sq.ft. $1.31 B (M sq.ft.) ($M) $1,374 6.6 $1,400 $1,307 7.0 6.3 $1,247 6.1 $1,200 6.0 5.0 $1,000 4.0 $800 2.9 $523 3.0 $600 1.9 2.0 $400 $254 1.0 $200 0.1 $20 0.0 $0 2004 2005 2006 2007 2008 Q2-09 2004 2005 2006 2007 2008 Q2-09 Portfolio Assets as at Jun
Slide 14: Annual Information
ANNUAL INFORMATION Revenues (1) Property NOI (1) In (000’s) In (000’s) $99.4 $160 $146.2 $100 $140 $90 $99.3 $80 $67.5 $120 $70 $100 $60 $80 $50 $53.5 $34.3 $60 $40 $30 $40 $9.6 $20 $6.2 $20 $0.6 $0.4 $10 $0 $0 2004 2005 2006 2007 2008 2004 2005 2006 2007 2008 FFO/unit $1.8 $1.6 $1.41 $1.65 $1.4 $1.
Slide 15: 2009 Year to Date Information
2009 YEAR TO DATE INFORMATION Revenues (1)(2) Property NOI (1)(2) In (000’s) In (000’s) $46.4 $48.9 $71.9 $80 $50 $66.8 $70 $45 $40 $60 $35 $50 $30 $23.8 $24.2 $34.3 $35.5 $40 $25 $30 $20 $15 $20 $10 $10 $5 $0 $0 Q2-08 Q2-09 6-month period 6-month period Q2-08 Q2-09 6-month period 6-month period end
Slide 16: Financial Results
FINANCIAL RESULTS ($000’s, except unit and per unit amounts) Three month period ended June 30 2009 2008 DI $12,899 $13,740 DI per unit $0.39 $0.42 DI year over year increase -7.1% DI payout ratio 69.2% 64.3% FFO $13,147 $13,519 FFO per unit $0.40 $0.41 FFO year over year increase -2.4% FFO payout ra
Slide 17: Schedule of Mortgages Maturing
PORTFOLIO OVERVIEW Schedule of Mortgages Maturing (2) ($M) $120 $106.6 Mortgage to Gross Book $103.5 Value (1) 48.8% $100 $82.2 $80 $73.8 $65.3 (1) As at June 30, 2009 $60 (2) As at June 30, 2009 adjusted to exclude mortgages related to $37.9 $40 $35.0 dispositions and mortgages repaid or refinanced
Slide 18: Mortgage Profile
PORTFOLIO OVERVIEW MORTGAGE PROFILE Weighted Average Term of 4.51 Years(1) Weighted Average Interest Rate(1) 5.41% Interest Coverage Ratio(2) 2.3 Winnipeg Square (1) Mortgage Financing In-Place as at June 30, 2009, less dispositions completed at August 11, 2009 (2) Mortgage Financing In-Place as at
Slide 19: Lease Expiration Schedule
PORTFOLIO OVERVIEW Lease Expiration Schedule Expiries in All Provinces (% of Leased Area) Expiries in Alberta (% of Leased Area) Expiries in Calgary Office (% of Leased Area) 53% of remaining 30% 26.9% 2009 expiries are renewed or new 25% lease commitment secured (1) 20% 18.5% 16.7% 16.8% 15.2% 17%
Slide 20: Internal Growth
INTERNAL GROWTH Year over Year Occupancy Portfolio Occupancy(1) Same Property Occupancy (2) Q2-08 97.8% 97.9% Q2-09 96.2% 96.6% Increasing Rental Income as Leases Turn Over (3) Leasable Sq. In-Place Rent Leased Sq. Ft. Market Rent % Change Change in Ft. (000’s) (000’s) $/sq.ft. Actual Q1-09 268 $13.
Slide 21: Latest Analyst Projections
LATEST ANALYST PROJECTIONS (1) 2009 2010 Current Current Latest analyst projections (Q2-09 updates) FFO AFFO FFO AFFO NAV Target Price CIBC World Markets $1.56 $1.03 $1.50 $1.04 $10.40 $10.00 Canaccord $1.51 $1.01 $1.41 $1.04 $12.90 $13.00 Royal Bank $1.53 $0.98 $1.43 $1.00 $8.50 $9.00 Scotia Capita
Slide 22: Peer Comparisons
PEER COMPARISONS 2009E 2010E Daily market updates FFO AFFO FFO AFFO FFO AFFO FFO AFFO BMO (09/02/09) Canaccord (09/02/09 BMO BMO Canaccord Canaccord BMO BMO Canaccord Canaccord Artis REIT (AX.un) 5.4x 8.2x 5.8x 8.7x 5.7x 8.3x 6.0x 8.4x Dundee REIT (D.un) N/A N/A 5.9x 8.4x N/A N/A 6.2x 8.8x Morguard
Slide 23: Growth Strategy - External
GROWTH STRATEGY - EXTERNAL Willingdon Green – Burnaby, BC (Acquisition & Redevelopment) Maynard Technology Centre - Calgary, AB 23
Slide 24: Growth Strategy - Internal
GROWTH STRATEGY - INTERNAL 1. North City – Edmonton - Office - Proposed 20,000 sq ft - 10% unlevered yield (mgt estimate) 2. North City – Edmonton - Retail - 3,500 sq ft CRU under development - 10% unlevered yield (mgt estimate) - Approx. 1/3 of space is pre-leased 3. Capital City Centre - 13,500 sq
Slide 25: Growth Strategy - Internal
GROWTH STRATEGY - INTERNAL 4. TransAlta Place – Calgary -Potential for 250,000 sq ft expansion 5. Willowglen Business Park – Calgary -Potential for 60,000 sq ft new office building 6. Grand Prairie – Sears Centre - 3 acres surplus retail/industrial land - Potential for 40,000 sq ft expansion 25
Slide 26: Growth Strategy - Internal
GROWTH STRATEGY - INTERNAL Increase Rental Income with Lease Turnover Nurture Existing Relationships Exploit Development Opportunities 26
Slide 27: Senior Management Team
SENIOR MANAGEMENT TEAM Armin Martens, P.Eng., M.B.A. President, Chief Executive Officer and Trustee Mr. Martens has been actively involved in the construction, development and management of commercial real estate since the 1980’s. In addition to his position as President and CEO of Artis REIT, he is
Slide 28: Investment Highlights
INVESTMENT HIGHLIGHTS • Artis REIT has an exclusively western Canadian focus • High quality commercial properties – all asset classes (Retail, Industrial, Office) • Proven management team • Consistent & reliable cash flow • Strong financial position • Total Debt to GBV 54.7% • Interest Coverage Rati
Slide 29: Properties of Success
PROPERTIES OF SUCCESS
Artis Real Estate Investment Trust — Q2 2009 Earnings Presentation on 6ix