Pro Real Estate Investment Trust · TSX:PRV.UN
Pro Real Estate Investment Trust — Q4 2021 Earnings Presentation
27 slides from Pro Real Estate Investment Trust's earnings presentation, Mar 24, 2022
Slide 1: Built for Sustainable Growth and Performance
BUILT FOR SUSTAINABLE GROWTH AND PERFORMANCE INVESTOR PRESENTATION MARCH 24, 2022 INVESTOR PRESENTATION | Q4 2021 1
Slide 2: Built for Sustainable Growth and Performance
BUILT FOR SUSTAINABLE GROWTH AND PERFORMANCE INVESTOR PRESENTATION | Q4 2021 2
Slide 3: Disclaimer
DISCLAIMER About this Presentation This presentation is dated March 24, 2022 and is strictly intended to provide general information about PRO Real Estate Investment Trust (“PROREIT”) and its business. This presentation does not constitute an offer to sell or the solicitation of an offer to buy any
Slide 4: PROREIT (PRV.UN) at a Glance
PROREIT (PRV.UN) AT A GLANCE Owns and operates a high-quality commercial 120 PROPERTIES IN (1) $990M TOTAL ASSETS (1) 6.6M GROSS LEASABLE (1) real estate portfolio with a 10 PROVINCES AREA (SQ. FT) strong industrial focus, FOCUS ON CENTRAL AND located in mid-sized 98.4% $0.45 EASTERN CANADA (1) Cana
Slide 5: High Quality Portfolio with Strong Industrial Focus
HIGH QUALITY PORTFOLIO WITH STRONG INDUSTRIAL FOCUS (1) INDUSTRIAL PORTFOLIO RETAIL PORTFOLIO OFFICE PORTFOLIO 78% of GLA 15% of GLA 7% of GLA > Multi-tenant and single-tenant > High-quality community > Mainly suburban and properties in high-demand service centres mixed use flex office industrial no
Slide 6: Taking PROREIT to the Next Level
TAKING PROREIT TO THE NEXT LEVEL WHAT DIFFERENTIATES US IS OUR ABILITY TO IDENTIFY AND BUILD A AMBITION Reach $2B in asset value as an industrial-focused REIT owning and STABLE, LOW RISK PORTFOLIO IN STRONG SECONDARY operating high-quality properties in MARKETS WHERE mid-size Canadian cities with st
Slide 7: Track Record of Driving Value
TRACK RECORD OF DRIVING VALUE BASE RENT BY ASSET CLASS(1) (%) BASE RENT BY REGION(1) (%) Retail Office Maritime Provinces Quebec Industrial Ontario Western Canada 14.9 11.2 14.5 15.5 24.9 36.0 14.4 42.0 9.8 47.2 29.1 27.5 49.1 63.9 Q4-2020 Q4-2021 Q4-2020 Q4-2021 GROWING EXPOSURE TO INDUSTRIAL SECTO
Slide 8: Strong Growth Since Inception
STRONG GROWTH SINCE INCEPTION TOTAL ASSETS AND OCCUPANCY PROPERTY REVENUES ADJUSTED FUNDS FROM OPERATIONS(3) ($ Millions) ($ Millions) ($ Millions) 98.4% 77.674 1000 80 40 990.0 900 CAGR(1) 70 CAGR (1) 69.810 CAGR (1) 800 39% 74% 51% 60 57.627 30 700 98.4% 98.0% 25.072 600 50 634.7 634.5 22.436 98.2
Slide 9: Our Growth History
OUR GROWTH HISTORY NEXT STAGE OF GROWTH > 120 properties, 6.6M sq. ft. A BREAKOUT GLA YEAR > 91 properties, > Acquisition of PROREIT CREATION > Internalization 4.5M sq. ft. 34 industrial BY FORMER CANMARC of asset GLA properties for MANAGEMENT > Achieved management > Acquisition $297M > One $6M prop
Slide 10: Fully Internalized Property Management Function
FULLY INTERNALIZED PROPERTY MANAGEMENT FUNCTION > Acquired in 2018, Compass Commercial Realty is a >$1B 8.3M long-established group operating autonomously TOTAL VALUE SQ.FT OF MANAGED MANAGED from Halifax (headquarters) PROPERTIES - Offices in Halifax, Moncton, Montreal and Oakville 180 114 > Signif
Slide 11: Returning to Market in Growth Mode in 2021
RETURNING TO MARKET IN GROWTH MODE IN 2021 > Accretive acquisition of 34 institutional-caliber +1.2M STRATEGICALLY DEPLOYING SQ. FT OF GLA industrial assets for CAPITAL TO $297M in 2021 CREATE LONG-TERM - 21 properties in Atlantic Canada - 10 properties in Winnipeg, 6% AVERAGE VALUE Manitoba CAPITAL
Slide 12: 2021 Transactions
2021 TRANSACTIONS Number of GLA Transaction Capitalization Date closed City Properties (in sq.ft) Price (in $ Rate Highlight million) Acquisitions 100% interest in three small bay industrial April 23, 2021 Ottawa (ON) 3 283,495 49.2 6.1 buildings strategically located withing core industrial submark
Slide 13: ESG Highlights
ESG HIGHLIGHTS ENVIRONMENTAL > Reducing paper consumption with implementation of 14 +99% 100% automated accounts payable system PROREIT-OWNED PROREIT’S PORTFOLIO PROREIT-OWNED PROPERTIES ARE BOMA CERTIFIED IS LOCATED IN AREAS SUBJECT TO A THOROUGH ASSESSMENT OF PROPERTIES IDENTIFIED AS LOW ALL ENVIR
Slide 14: 2021 Financing Highlights
2021 FINANCING HIGHLIGHTS EQUITY DEBT > April 2021: $50M private > $71.4M in mortgage > CREDIT FACILITY placement with Bragg financing at lower EXPANDED ON Group, a prominent rates and extended IMPROVED Canadian private terms TERMS TO $60M investor > Eliminated expensive > October 2021: $83.3M alter
Slide 15: Q4-2021 Financial Highlights
Q4-2021 FINANCIAL HIGHLIGHTS > Property revenue of $22.9M, up 30.4% from Q4-2020 > Net operating income(1) of $13.4M, up 33.6% from Q4-2020 > Net income and comprehensive income of $65.0M, compared to $6.4M in Q4-2020 > AFFO(1) of $7.4M, up 37% from Q4-2020 > Debt to Gross Book Value(1) decreased at
Slide 16: Robust Internal Growth
ROBUST INTERNAL GROWTH YoY YoY 3 Months Ended 12 Months Ended 12 Months Ended Same Property NOI1 by asset class 3 Months Ended December 31, 2021 December 31, 2021 December 31, 2021 December 31, 2021 Retail $3.5M ↑ 7.7% $13.5M ↑ 5.5% Office $1.6M ↓ 3.7% $6.2M ↑ 2.3% Industrial $5.1M ↑ 7.2% $19.4M ↑ 4
Slide 17: Significant Value Embedded in Portfolio
SIGNIFICANT VALUE EMBEDDED IN PORTFOLIO(1) Weighted Avg Estimated Asset Class Leased GLA In-Place Net Market Net Spread Rent Rent(2) GROWTH OPPORTUNITIES Retail 966,677 $15.08 $15.42 2% WITHIN PORTFOLIO: Office 425,583 $14.31 $15.45 8% - Important mark-to-market rental rate upside Industrial 5,092,2
Slide 18: Active Asset Management Case Studies
ACTIVE ASSET MANAGEMENT CASE STUDIES FROM VACANT TO FULLY LEASED > 82,300 sq. ft industrial property purchased vacant for $4.5M in May 2021 > New 10-year lease secured in December 2021 with international aerospace tenant, starting October 2022 > Value nearly doubled, with building appraisal at $8.7M
Slide 19: High Quality, Low Risk Portfolio
HIGH QUALITY, LOW RISK PORTFOLIO OPERATING HIGHLIGHTS STAGGERED LEASE MATURITY PROFILE GLA 40.0% 35.3% As at December 31, 2021 Base Rent 35.0% Number of Occupancy GLA WALT(2) Asset Class Properties (%)(1) (sq. ft.) (years) 30.0% Retail 45 97.7 989,100 4.8 25.0% 16.3% 16.2% 20.0% Office 9 90.8 468,52
Slide 20: Top Ten Tenants
TOP TEN TENANTS AS AT DECEMBER 31, 2021 # Tenant % of In-Place Base Rent (1) GLA (sq. ft.) WALT (2) (years) Credit Rating (3) 74.7% OF BASE RENT 1 4.5% 104,929 7.6 Baa2/BBB+/na FROM NATIONAL AND 2 4.3% 222,491 5.6 na/BBB-/BBB- GOVERNMENT TENANTS 3 4.0% 127,334 3.1 Ba1/BB+/BBB- 4 3.4% 326,061 4.1 BBB
Slide 21: Sound and Flexible Capital Structure
SOUND AND FLEXIBLE CAPITAL STRUCTURE At Dec. 31, 2021 DEBT MATURITY PROFILE As of December 31, 2021 Debt to Gross Book Value(1) 53.1% Debt Maturing During Year Payments of Principal Total debt $526.4M 250 Total first mortgage debt weighted average rate 3.39% $201.4 Total first mortgage debt weighted
Slide 22: Key Strategic Pillars to Create Long-Term Value
KEY STRATEGIC PILLARS TO CREATE LONG-TERM VALUE INCREASE DIVERSIFY BY ASSET OPTIMIZE BALANCE SCALE CLASS, TENANCIES SHEET AND CAPITAL AND GEOGRAPHY ALLOCATION > Reach $2B in asset value > Continue to focus on > Reduce Debt to Gross in medium term class B, high-quality Book Value and net debt to comm
Slide 23: Experienced and Aligned Management and Board
EXPERIENCED AND ALIGNED MANAGEMENT AND BOARD SENIOR MANAGEMENT TEAM INDEPENDENT BOARD OF TRUSTEES John Levitt Independent Trustee and Chair of the Board Peter Aghar, CPA, CMA Independent Trustee James W. Beckerleg James W. Beckerleg Gordon Lawlor, CPA, CA Trustee, President and Chief Executive Offic
Slide 24: Why Invest in PROREIT
WHY INVEST IN PROREIT > High quality industrial-focused portfolio > Ample liquidity, stable cash flows with resilient low-risk tenants and strong balance sheet > Significant value embedded in portfolio > Fully internalized asset and > Clear strategy to grow earnings property management and value > E
Slide 25: Appendices
APPENDICES 25 INVESTOR PRESENTATION | Q4 2021 25
Slide 26: We've Done It Before
WE’VE DONE IT BEFORE 100% S&P/TSX Capped REIT Index CANMARC REIT 75% 50% 25% 0% May-2010 Jul-2010 Sep-2010 Nov-2010 Jan-2011 Mar-2011 May-2011 Jul-2011 Sep-2011 Nov-2011 Jan-2012 > Former CANMARC REIT management > Diversified REIT with national portfolio > 143 properties > Acquired by Cominar in 201
Slide 27: Thank you
Thank you INVESTOR PRESENTATION | Q4 2021 27
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