Crombie Real Estate Investment Trust · TSX:CRR.UN
Crombie Real Estate Investment Trust — Q3 2018 Earnings Presentation
34 slides from Crombie Real Estate Investment Trust's earnings presentation, Nov 20, 2018
Slide 1: Building a Better REIT
Building a Better REIT Investor Presentation November 2018
Slide 2: “Safe Harbour” Disclosure and Confidentiality Statement
“Safe Harbour” Disclosure and Confidentiality Statement Forward-looking Information This presentation contains forward-looking statements that reflect the current expectations of management of Crombie about Crombie's future results, performance, Forward-looking achievements, prospects and opportunit
Slide 3: Crombie REIT: Who are we?
Crombie REIT Who are we? National Portfolio with Extraordinary Established in 2006, and one of Canada’s leading national retail landlords Development Opportunities Focused on Focused on NAV and FFO/AFFO growth by owning, VECTOM² operating and developing high quality grocery and drug store anchor
Slide 4: Why Invest in Crombie?
Why Invest in Crombie? Current Discount to NAV Investment Thesis (14%)³ ~78% Development Pipeline Creates Accretive Growth Potential Stable, high-quality everyday-needs- Opportunities Growth anchored portfolio, resulting in strong, stable Dollars (billions) $3-4.5 cash flow growth Materially acc
Slide 5: Crombie’s Vision – Strategic Pillars
Crombie’s Vision – Strategic Pillars Supported and Enabled by Strong Risk Management IMPROVING PORTFOLIO QUALITY BUILDING FINANCIAL STRENGTH CULTURE AND TALENT Through smart capital allocation, Maintain a strong balance sheet with Recruiting and refocusing existing high- accelerate FFO/AFFO and NAV
Slide 6: Nationwide Portfolio
Nationwide Portfolio Growing Exposure to Major Markets Focused on high growth urban and suburban markets with development opportunities, while disposing of lower growth and/or non-core assets. Growing exposure to higher growth central and western regions. Growing Western Exposure 42%¹ Atlantic W
Slide 7: Leasing and Value Creation
Leasing and Value Creation Built in Organic Growth Same Asset NOI Growth Current Year Renewal Rates YTD 2.4% YTD $18.16 2017 1.1% 2017 $18.73 2016 4.2% 2016 $16.96 2015 1.8% 2015 $19.01 2014 1.4% 2014 $18.60 2013 1.9% 2013 $12.99 Highest Occupancy in Crombie’s History Current Year Renewal Leasing Sp
Slide 8: Consistent Historical AFFO Growth
Consistent Historical AFFO Growth Improving AFFO Payout Ratio AFFO/Unit, diluted AFFO Payout Ratio $1.00 96.4% 94.7% $0.98 92.8% $0.96 91.0% $0.94 $0.93 88.9% 2013 2014 2015 2016 2017 2013 2014 2015 2016 2017 8
Slide 9: Tenant Mix
Tenant Mix Strong Retailer Relations Driving Growth Avg Remaining DBRS Tenant % of AMR Lease Rating Term (yrs) Right of First Sobeys 54.8% 14 BB (high) Offer Shoppers 4.9% 10 BBB Stable & Drug Mart Market Growing Dollarama 1.1% 6 BBB Intelligence Cash flow Province of 1.1% 1 A (high) Nova Scotia CIB
Slide 10: Sobeys
Sobeys Aggressively Building, Adapting & Growing Expanding FreshCo to the West Investing in Bricks-and-Mortar Strong, Profitable, Leading Edge Omnichannel Technology Resilient Partner & Tenant • Game-changing Ocado e-commerce end-to-end solution • Expand presence in underpenetrated GTA Farm Boy acqu
Slide 11: Improving Portfolio Quality
Improving Portfolio Quality Davie Street, Vancouver, British Columbia
Slide 12: Smart Capital Allocation: Highest & Best Use
Smart Capital Allocation: Highest & Best Use Prioritize Growth in NAV & AFFO/Unit Sources Uses Dispositions Development/ Modernizations Free Cash Equity Flow Acquisitions via 3rd Party Sobeys Acquisitions Debt 12
Slide 13: Building a Better REIT: Into the Next Decade & Beyond
Building a Better REIT Into the Next Decade & Beyond Unlock $3- National Portfolio with Extraordinary 4.5B Organic Development Pipeline Development Opportunities Focused on Development Expertise with VECTOM 23 Major 5-30yrs Potential Experience per Developments Individual on 20 Person Team Significa
Slide 14: Development Team
Development Team In-House Expertise ~30yrs Residential Development Chief Executive Officer Development Experience Team of 20 Professionals Chief Operating Officer 5-30yrs Mixed- SVP, Development & Construction Use Development Experience per VP, Atlantic VP, Construction VP, Construction Individual D
Slide 15: Material NAV Creation
Material NAV Creation $450M¹ Investment in First 5 Major Developments Avalon Mall¹ Belmont Le Duke Market $1-2 NAV/Unit Bronte Davie Street Completed Village in 2-3yrs² ¹Avalon Phase I excluded, ²Assumes NAV creation equals the difference between market cap rates and estimated yield on cost and curr
Slide 16: Active Major Development Pipeline
Active Major Development Pipeline Value Creation in Action $511M¹ under Active Development Estimated Estimated Estimated Commercial Residential Estimated # Property Phase Location Completion Annual Yield on GLA GLA Total Cost¹ Date NOI¹ Cost¹ Davie Vancouver, 1 53,000 253,000 Q2 2020 $5.8-6.3 $104.7
Slide 17: Davie Street, Vancouver, BC
Davie Street, Vancouver, BC Potential to Create Upwards of $100M in Value Overview The development will include a 44,000 sqft grocery store with 9,000 sqft of ancillary retail and 253,000 sqft, or up to 330 rental residential units. The parkade is essentially complete and 95% of the retail is leased
Slide 18: Belmont Market, Victoria, BC
Belmont Market, Victoria, BC Upgrading by Developing A+ Real Estate Crombie is 100% Overview developer This project is being 100% developed by Crombie, as a 160,000 sqft vibrant open-air centre. Phase I tenants have taken possession and Phase II is over 70% leased. Ledcor Developments plans to build
Slide 19: Avalon Mall, St. John’s, NL
Avalon Mall, St. John’s, NL Dominant Enclosed Shopping Centre Overview Avalon Mall’s redevelopment plan, where Crombie is the developer, is progressing as planned with the interior of the existing mall under renovation, where we’re building new CRU, a new mall expansion, and creating an additional p
Slide 20: Le Duke, Montreal, QC
Le Duke, Montreal, QC Placemaking along the Bonaventure Greenway Overview Le Duke is adjacent to the Bonaventure Greenway in Old Montreal, and is being built with our 50% JV partners as a 25 storey mixed use tower with 390 residential rental units above a 25,000 sqft urban format IGA. The structure
Slide 21: Bronte Village, Oakville, ON
Bronte Village, Oakville, ON Building Community in Major Urban Centres Overview Bronte Village will be a special luxury rental opportunity in a vibrant, unique and highly sought after community. This 50% JV development will include 480 units of refined rental living and a 30,000 sqft Sobeys. Excavat
Slide 22: Potential Major Development Pipeline
Potential Major Development Pipeline Value Creation Opportunities for Years to Come Site Site 52% of Potential # Property Location Size Status # Property Location Size Status (acres) (acres) Major Development Broadway & Vancouver, 813 11 Avenue Pipeline located in 1 Commercial BC 2 Pre-planning 11 S
Slide 23: McCowan & Ellesmere, Toronto, ON
McCowan & Ellesmere, Toronto, ON Future Major Transit Hub Subway Line Overview Extension A future major mixed use, transit oriented development site in Toronto, Ontario, acquired from a 3rd party. Together, Sobeys and Crombie are uniquely positioned to unlock the development value embedded in this s
Slide 24: Building Financial Strength
Building Financial Strength Belmont, Victoria, British Columbia
Slide 25: Strong Financial Condition
Strong Financial Condition Investment Grade, with Improving Debt Metrics 2.97x Interest 1.92x Debt $1.0B 8.57x Debt to BBB Low Stable 337M¹ Bank Service Service Unencumbered 4.14% WAIR² 4.0yrs WATM³ EBITDA by DBRS Credit Capacity Coverage Coverage Assets D/GBV - FV⁴ 53.0% 52.8% 52.5% Fixed Rate Mort
Slide 26: Well-Laddered Debt Maturity Profile
Well-Laddered Debt Maturity Profile Improving the Capital Stack with Unsecured Notes Opportunity for Interest savings $400 regular unsecured available 6% on expiring Millions bond issuances mortgages $350 5% $300 4% $250 Bank Credit Facility¹ $200 3% Unsecured Notes² Mortgages $150 WAIR Fixed Rate 2
Slide 27: Culture and Talent
Culture and Talent Canmore, Alberta
Slide 28: Strong Leadership with Deep Bench
Strong Leadership with Deep Bench Nationwide Talent DON CLOW GLENN HYNES CHERYL FRASER JOHN BARNOSKI President & CEO EVP, COO, CFO & Secretary CTO, VP Communications Senior Vice President, Corporate Development Years of Experience: Years of Experience: Years of Experience: Years of Experience: Cromb
Slide 29: Talent Management Strategy
CultureCrombie’s & Talent Talent Management Strategy Continuing to Build the Crombie of Tomorrow Crombie is like a community: where people treat each other with respect and where we’re working together toward a common long term goal. Crombie values integrity, strong relationships and commitments to
Slide 30: Environmental Sustainability Commitment
Environmental Sustainability Commitment Social, Environmental & Economic Crombie’s core values include a commitment to adopt environmental sustainability principles in our business practices by integrating environmental considerations in our decision-making processes and striving to ensure we conduc
Slide 31: Risk Management
Risk Management Bronte Village, Oakville, ON
Slide 32: Risk Management
Risk Management Continuously Monitoring Potential Risks, and Executing Minimization & Mitigation Plans Major Financing, IT Systems Tenant Development Acquisitions Refinancing & Capabilities Concentration Projects Liquidity 32
Slide 33: Thank You
Thank You Glenn Hynes | [email protected] | (902) 755-8100 | crombiereit.ca Claire Mahaney Lyon | [email protected] | (902) 474-6670 | crombiereit.ca
Slide 34: Sp Crombie
Sp Crombie
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