RFA Financial Inc. · TSX:RFA
RFA Financial — Artis Real Estate Investment Trust — Q4 2010 Earnings Presentation
23 slides from RFA Financial's earnings presentation, April 2011
Slide 1: Properties of Success
PROPERTIES OF SUCCESS APRIL 2011 Q4‐10 INSTITUTIONAL INVESTOR PRESENTATION 1
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: Non-GAAP Measures and IFRS Implementation
NON‐GAAP MEASURES AND IFRS IMPLEMENTATION Property Net Operating Income (“Property NOI”) , Distributable Income (“DI") 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 account
Slide 4: Unique Four Part Strategy
UNIQUE FOUR PART STRATEGY 1. Geographic focus: Canada and select U.S. markets: with a major concentration in western Canada 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
Slide 5: Portfolio Overview
PORTFOLIO OVERVIEW Properties 147 Size 14.8 M sq.ft. Gross Book Value $2.39 B at Dec 31, 2010 Gross Book Value $2.50 B (1) with acquisitions Overall Occupied 96.1% (2) & Committed Portfolio Assets as at December 31, 2010 adjusted for announced acquisitions and dispositions completed or under uncondi
Slide 6: Portfolio Summary Geographic Breakdown
PORTFOLIO SUMMARY GEOGRAPHIC BREAKDOWN By GLA (1) By Property NOI (2) Ontario 8.9% Alberta 32.6% Ontario 10.5% Alberta 43.3% U.S.A 10.9% U.S.A. 21.9% British Columbia 13.0% British Columbia 10.9% Saskatchewan 6.1% Saskatchewan 4.3% Manitoba 21.4% Manitoba 16.2% (1) Portfolio Assets as at December 31
Slide 7: Portfolio Summary Asset Class Breakdown
PORTFOLIO SUMMARY ASSET CLASS BREAKDOWN By GLA (1) By Property NOI (2) Industrial 45.4% Office 46.4% Office 31.8% Industrial 23.0% Retail 22.8% Retail 30.6% (1) Portfolio Assets as at December 31, 2010 adjusted for announced acquisitions and dispositions completed or under unconditional contract at
Slide 8: Portfolio Overview: Largest Tenants by Gross Revenue
PORTFOLIO OVERVIEW 10 Largest Tenants by Gross Revenue Approximately 15.0% of Gross Revenue Excluding Government Tenants Portfolio Assets as at December 31, 2010 adjusted for announced acquisitions and dispositions completed or under unconditional contract at March 31, 2011. 8
Slide 9: Portfolio Overview – 64.5% of Tenants are Government or National
PORTFOLIO OVERVIEW – 64.5% of Tenants are Government or National (1) Diversification by Tenant Size (GLA)(1) Vacant 3.9% (2) Government 4.5% Grande Prairie Regional & Local 31.6% Saskatoon Winnipeg National 60.0% Weighted Average Term to Maturity (1) All Leases 5.7 Years Top 10 Tenants 9.6 Years Wes
Slide 10: Portfolio Overview: Lease Expiration Schedule
PORTFOLIO OVERVIEW Lease Expiration Schedule (1) Expiries in All Provinces (% of Leased Area) Expiries in Calgary Office (% of Leased Area) 68% of 2011 and 22% of 2012 expiries are dealt with. 79% retention ratio for 2011 and 81% for 2012 expiries . 4.9% WARIR & 5.3% WARI for 2010. 1.8% WARIR for 20
Slide 11: Portfolio Overview: Schedule of Mortgages Maturing
PORTFOLIO OVERVIEW ($M) Schedule of Mortgages Maturing (2) Mortgage to Gross Book Value (1) 48.7% Mortgage Profile Weighted Avg. Term – 4.8 yrs (1) Weighted Avg. Int. Rate – 4.9% (1) Interest Coverage Ratio – 2.2 (2) 5.2 5.6 4.9 4.5 4.7 4.4 5.4 5.2 5.5 4.7 5.7 Weighted average interest rate maturing
Slide 12: 2010 Year to Date Information – Q4 2010
2010 YEAR TO DATE INFORMATION – Q4 2010 Revenues (1)(2) Property NOI (1)(2) In (000’s) In (000’s) FFO/unit (Basic) (1) Q4 10 FFO Payout Ratio: 93.1% (1) From continuing operations (2) 2009 comparative results have been restated for discontinuing operations 12
Slide 13: Latest Analyst Projections
LATEST ANALYST PROJECTIONS (1) 2011 2012 Current Current diluted per unit results FFO AFFO FFO AFFO NAV Target Price (Q4‐10) CIBC World Markets (2) $1.27 $0.99 $1.35 $1.03 $12.75 $14.50 Canaccord Genuity $1.14 $1.01 $1.23 $1.07 $13.20 $15.25 RBC Capital Markets $1.14 $0.97 $1.19 $1.02 $12.25 $14.00
Slide 14: Peer Comparisons
PEER COMPARISONS P / FFO P / AFFO Daily Real Estate Market Indicator 2011E 2012E 2011E 2012E Canaccord & BMO (04/12/11) Artis REIT (AX.un) 11.8x 11.0x 13.4x 12.6x Dundee REIT (D.un) 11.5x 11.3x 13.7x 13.0x Morguard REIT (MRT.un) 11.4x 11.2x 12.9x 12.6x Allied REIT (AP.un) 13.1x 12.6x 16.0x 14.5x Can
Slide 15: Growth Strategy – External
GROWTH STRATEGY – EXTERNAL Stinson Office Park – Minneapolis, MN, USA GLA: 307,045 sq ft Purchase Price: USD $44.0 million / 7.7% Cap Financing: USD $28.6 million @ 3.25% Floating Asset Class: Office 97.0% Leased – Two National Tenants Fairview Health Services, Ucare Long Term Leases: 12.9 Years Rem
Slide 16: Growth Strategy – External
GROWTH STRATEGY – EXTERNAL Minneapolis Industrial Portfolio – Minneapolis, MN, USA GLA: 2,287,030 sq ft (Portfolio) Purchase Price: USD $113.0 million / 7.7% Cap Financing: USD $84.8 million @ 2.5% Floating Asset Class: Industrial Mix of National & Local Tenants Tranche I (Closed Oct 29th 2010) 6 Pr
Slide 17: Growth Strategy – Internal
GROWTH STRATEGY – INTERNAL North City Centre – Edmonton, AB 20,000 sq ft office building under Construction – nearing completion 9% unlevered yield (mgt estimate) Fourell Business Park ‐ Edmonton, AB Finalizing Development Permit drawings for 2 buildings of 38,982 sq ft & 64,436 sq ft Construction t
Slide 18: Growth Strategy – Internal
GROWTH STRATEGY ‐ INTERNAL Increase Rental Income with Lease Turnover Nurture Existing Relationships Westbank Hub Centre North – West Kelowna, BC Exploit Development Opportunities 360 Main & Shops of Winnipeg Canarama Mall – Saskatoon, SK Square ‐ Winnipeg, MB 18
Slide 19: Recent Artis REIT Achievements
RECENT ARTIS REIT ACHIEVEMENTS • Closed on $885 Million of new acquisitions in 2010 … Weighted Average Cap Rate 7.8% … Weighted Average Interest Rate 4.5% • Portfolio assets approaching $2.5 Billion • Market capitalization in excess of $1 Billion • Increased liquidity since TSX Index inclusion; 200,
Slide 20: Disciplined U.S. Portfolio Strategy
Disciplined U.S. Portfolio Strategy • Total weighting of U.S. properties in Artis’ portfolio will not exceed 20% • Unlevered yield will be accretive, and higher than that available for a comparable property in Canada • Low interest, conventional mortgage financing will be available • Quality local t
Slide 21: Investment Highlights – Q4 2010
INVESTMENT HIGHLIGHTS – Q4 2010 • Artis REIT has a primarily western Canadian focus • Recent entry into the United States and the Greater Toronto Area (GTA) • High quality commercial properties – all asset classes (Retail, Industrial, Office) • Sound diversity of income • Consistent and reliable cas
Slide 22: 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 23: Properties of Success
PROPERTIES OF SUCCESS
Artis Real Estate Investment Trust — Q4 2010 Earnings Presentation on 6ix