Crombie Real Estate Investment Trust · TSX:CRR.UN
Crombie Real Estate Investment Trust — Q3 2023 Earnings Presentation
41 slides from Crombie Real Estate Investment Trust's earnings presentation, Nov 9, 2023
Slide 1: Growth-focused. Resilient. Sustainable. Investor Presentation Q3 2023
Growth-focused. Resilient. Sustainable. Investor Presentation Q3 2023
Slide 2: Cautionary Statements
Cautionary Statements Forward-looking Information: This presentation contains forward-looking statements that reflect the current expectations Readers are cautioned that such forward-looking statements are subject to certain risks of management of Crombie about Crombie's future results, performance,
Slide 3: A leader in Canadian real estate
A leader in Canadian real estate Strong, stable portfolio with opportunity for growth High-quality grocery-anchored, VECTOM2 focused value- Strong financial position with industrial and multi-residential enhancing development pipeline access to multiple sources of capital portfolio driving strong, p
Slide 4: Near-term priorities
Near-term priorities Deliver strong risk-adjusted returns and accelerate AFFO and NAV growth per unit Stable Portfolio Robust Development Strong Financial Pipeline Condition • Elevating portfolio quality and • Focused on high growth mixed- • Disciplined and innovative capital strength use urban and
Slide 5: High quality, sustainable property portfolio underpins growth platform
High quality, sustainable property portfolio underpins growth platform Resilient and Strategic Development Strong Financial A Highly Growing Portfolio Partnership Pipeline Condition Skilled Team Well-positioned Aligning strategies with Focused on high growth Optimal low-cost capital Attract, develop
Slide 6: Resilient and growing portfolio
Resilient and growing portfolio
Slide 7: Strong, stable portfolio of high-quality properties
Strong, stable portfolio of high-quality properties Portfolio backed by grocery tenants generates stable cash flow Portfolio Fair Value Gross Leasable Area by Asset Type1 by Market Class 72% of AMR derived from tenants engaged in providing essential Total services, primarily in 18.7m sq.ft VECTOM $5
Slide 8: Strong committed occupancy
Strong committed occupancy Resilient and growing portfolio 98.0% Committed Occupancy (%) 97.0% Economic Occupancy (%) 96.0% 95.0% 94.0% 93.0% 92.0% 91.0% 90.0% 8 1. Economic occupancy was negatively impacted in Q4 2022 and Q1 2023 by the addition of approximately 304,000 square feet of development G
Slide 9: Longest retail REIT WALT
Longest retail REIT WALT1 Long-term leases contribute to portfolio stability 14,000 Other 80% Empire Empire 11.5 12,000 65% 70% years % of total portfolio 60% 10,000 % of total portfolio 50% Sq. ft. in thousands Other 8,000 4.7 40% years 6,000 30% 4,000 20% Total 2,000 7% 9.0 3% 5% 6% 5% 5% 10% year
Slide 10: Well-positioned defensive portfolio
Well-positioned defensive portfolio Long-term earnings and cash flow stability Property revenue SANOI1 Q3 2023 Q3 2023 +0.8% +2.8% Q3 2023 $104.491m | Q3 2022 $103.642m Q3 2023 $71.455m | Q3 2022 $69.534m Renewals Renewals spreads Q3 2023 Q3 2023 238,000 sq. ft. +6.5% projects Q3 2022 in development
Slide 11: Strategic partnership with Empire
Strategic partnership with Empire
Slide 12: Strategic partnership with Empire identifying and unlocking future value
Strategic partnership with Empire identifying and unlocking future value Capitalizing on a wide range of strategic transactions with Empire • Developing highly-tailored properties designed to meet Empire’s current and future needs 88% of retail properties 11.5 years • Relationship unlocks major deve
Slide 13: Balancing defensive grocery-anchored portfolio with growth-focused mixed-use development
Balancing investment in a defensive grocery-anchored portfolio with growth-focused mixed-use development strategy Montreal and Calgary Customer Fulfillment Centres and Spoke Facilities A prime example of strong relationship with Empire and development expertise • Strategically diversifies asset mix
Slide 14: Strong development pipeline
Strong development pipeline
Slide 15: Development pipeline drives future value creation
Development pipeline drives future value creation Creating sustainable real estate where people want to live, work, shop, and play Primarily mixed-use, high-density developments in urban centres 74% Major development pipeline located in VECTOM 1 1 1 15% 10 4 Pipeline properties with zoning approval
Slide 16: Unlocking value with robust development pipeline
Unlocking value with robust development pipeline 27 development pipeline projects 7 completed 3 near-term2 24 projects1 projects medium and long-term2 projects 459,000 sq.ft commercial GLA 105,000 sq.ft commercial GLA 614,000 sq.ft retail-related industrial GLA 1,065,000 sq.ft commercial GLA 960,000
Slide 17: Development pipeline completions drive value creation
Development pipeline completions drive value creation 2020 2021 2022 Q1 2020 Q3 & Q4 2020 Q1 2021 Q1 2022 Belmont Market Avalon Mall Phase I & II Davie Street - Residential The Village at Bronte Harbour Q2 2020 Q4 2020 Q3 2021 Q4 2022 Davie Street - Retail Voilà CFC 2 Le Duke Voilà CFC 3 17
Slide 18: Substantially completed major developments
Substantially completed major developments Substantial Retail-related % Commercial Residential Residential Property CMA Completion industrial Ownership GLA GLA Units Date GLA Belmont Market1,2 Victoria 100% Q1 2020 160,000 - - - Davie Street – Retail1 Vancouver 100% Q2 2020 54,000 - - - Avalon Mall
Slide 19: Near-term major development pipeline
Near-term major development pipeline Focus on mixed-use developments in Canada's top urban and suburban markets Commercial Residential Residential Property CMA % Ownership GLA GLA Units The Marlstone Halifax 100% - 189,000 291 1780 East Broadway (Broadway Vancouver 50%1 105,000 626,000 970 & Commerc
Slide 20: Major development pipeline
Major development pipeline Site Size Total of 27 major # Property CMA Project Timing (acres) developments, incl. 8 1 The Marlstone Halifax 1 Near-term 2 Belmont Market - Phase II Victoria 2 Near-term with zoning approvals 3 Broadway & Commercial1 Vancouver 2 Near-term completed or zoning 4 Brunswick
Slide 21: Unlocking value through accretive non-major developments
Unlocking value through accretive non-major developments1 GLA on Estimated total Estimated cost completion cost to complete Land-use intensification 53,000 $ 30M $ 19M Modernizations2, - 22M 3M redevelopment and other Total 53,000 $ 52M $ 22M Yield on cost projections3 5.3% - 7.0% 1. Non-major devel
Slide 22: Distinct opportunities for value creation
Distinct opportunities for value creation Completion of Significant entitlement Developments increase development projects of development lands urban concentration and increases fair value, AFFO accelerates growth diversification and NAV growth Broadview Rendering Park West Rendering Toronto, Ontari
Slide 23: Focused on accelerating pace of entitlements
Focused on accelerating pace of entitlements Number of Estimated Residential projects total sq. ft.1,2 units1,2 Zoned 4 1,503,000 1,821 Applications 4 3,211,000 3,600 submitted Applications to 1 41,000 30 submit in 2023 Total 9 4,755,000 5,451 1. Square footage and unit information presented in the
Slide 24: Strong financial condition
Strong financial condition
Slide 25: Q3 2023 financial highlights
Q3 2023 financial highlights Property revenue Q3 2023 Increase in property revenue driven by Property revenue growth • Higher rental revenue from completed developments, renewals, new leasing activity and $104.491M acquisitions • Offset in part by lost revenue from dispositions, decreased percentage
Slide 26: Financial strength and flexibility
Financial strength and flexibility $2.6B $565M 3.41x 8.13x BBB (low) Fair value of Available Interest Debt to stable trend unencumbered assets liquidity coverage1,2 adjusted EBITDA1,2 DBRS rating provides attractive unsecured debt financing As at September 30, 2023 Optimal low-cost capital structure
Slide 27: Financial strength and flexibility
Financial strength and flexibility Strategically deploying capital to build long-term value for our stakeholders For the period ended Q3’23 2022 2021 2020 2019 Available Liquidity 1 (millions) $565 $583 $508 $472 $449 Unencumbered Assets (billions) $2.6 $2.2 $1.8 $1.4 $1.2 Interest Coverage Ratio 2,
Slide 28: Access to ample liquidity
Access to ample liquidity Balance as at Facility Authorized Amounts Available Liquidity Maturity Date September 30, 2023 Revolving Credit Facility $ 88M $ 400M $ 312M June 30, 2027 Bilateral Credit Facility - 130M 130M June 30, 2025 Non-Revolving Credit Facility 77M 200M 123M November 18, 2025 Subto
Slide 29: Innovative capital funding
Innovative capital funding Strategic capital management priorities • Maintain multiple sources of both debt and equity financing • De-risk by pre-funding capital commitments • Utilize sources of capital with the most efficient cost of capital Sources of Capital Capital Deployment Debt Acquisition •
Slide 30: Well-laddered debt maturity profile
Well-laddered debt maturity profile1 Extending weighted average term to maturity $500 5.0% 4.5% $400 4.0% 3.5% $300 3.0% Millions $200 2.5% 2.0% $100 1.5% 1.0% $0 2023 2024 2025 2026 2027 2028 2029 2030 2031 0.5% -$100 0.0% Mortgage Maturities Unsecured Notes JV WAIR Fixed Rate (right axis) 30 1. As
Slide 31: Our ESG priorities
Our ESG priorities
Slide 32: Environmental, social, and governance (ESG) considerations
Environmental, social, and 2022 highlights governance (ESG) considerations $15.2m invested in LED projects in the last three years • Climate action Environment • Leasing and operations ~2m sq. ft. of BOMA BEST certifications • Design and development 31.3 metric tonnes of organic matter diverted from
Slide 33: Crombie's commitment to ESG
Crombie’s commitment to ESG ▪ Net zero commitment to reduce greenhouse gas emissions was validated and approved by SBTi1 ▪ Net zero by 2050 for scopes 1, 2 and 3 ▪ Near term reducing scope 1 and 2 emissions by a minimum of 50% by 2030 ▪ 2023 GRESB results ▪ Received Green Star for excellence in both
Slide 34: Appendix
Appendix Investor Presentation
Slide 35: Crombie at a glance
Crombie at a glance Portfolio Fair Value by Market Class3 Portfolio Overview1 Investment properties – Fair value $5.2B Investment properties including JVs – Fair value VECTOM 45.1% $5.6B Gross leasable area 18,652,000 sq.ft $5.6B Major Market 25.8% Committed occupancy 96.4% Rest of Canada 29.1% YTD
Slide 36: Featured developments
Featured developments Meaningful value creation arising from development projects in VECTOM and Major Markets The Village at Bronte Harbour Voilà CFC 3 The Marlstone Rendering Oakville (Toronto), Ontario Calgary, Alberta Halifax, Nova Scotia 36
Slide 37: Featured properties: The Village at Bronte Harbour
Featured properties The Village at Bronte Harbour is a luxury rental opportunity in a vibrant, unique community nestled in one of Oakville’s most sought after neighborhoods, Bronte Harbour, with lake front views, walking trails and a marina all at your doorstep. This 50% joint venture development wi
Slide 38: Featured properties: Voilà CFC 3
Featured properties Voilà CFC 3 reached substantial completion in the fourth quarter of 2022, the third Empire grocery e-commerce fulfillment hub in Canada, and the second in Crombie’s portfolio. Crombie acquired the 25-acre site in June 2021. Voilà CFC 3 is a state-of-the-art grocery fulfillment hu
Slide 39: Featured properties: The Marlstone
Featured properties The Marlstone is a planned 291-unit residential rental development in the heart of downtown Halifax, located within the Scotia Square mixed-use retail, office, and hotel complex. It will be built to LEED Gold standard and will be operational net zero ready, as well as a Rick Hans
Slide 40: Calculation of non-GAAP measures
Calculation of non-GAAP measures1 Shown in thousands of Canadian dollars, except per unit amounts and as otherwise noted Debt to Trailing 12 Months Adjusted EBITDA Q3 2023 2022 20212,3 20202,3 20192,3 Debt $ 2,448,384 $ 2,359,458 $ 2,517,392 $ 2,649,583 $ 2,424,692 Adjusted EBITDA 300,970 294,259 28
Slide 41: Growth-focused. Resilient. Sustainable.
Growth-focused. Resilient. Sustainable. Clinton Keay, CFO and Secretary [email protected] (902) 755-8100 Ruth Martin, Senior Director, Investor Relations and Financial Analysis [email protected] (902) 759-0164 crombie.ca
Crombie Real Estate Investment Trust — Q3 2023 Earnings Presentation on 6ix