RFA Financial Inc. · TSX:RFA
RFA Financial — Artis Real Estate Investment Trust — Q4 2019 Earnings Presentation
19 slides from RFA Financial's earnings presentation, February 2020
Slide 1: Artis Real Estate Investment Trust Q4-19 Investor Presentation
Artis Real Estate Investment Trust Q4-19 Investor Presentation February 2020
Slide 2: Forward-Looking Information
Forward-Looking Information This presentation contains forward-looking statements. For this purpose, any statements contained herein that are not statements of historical fact may be deemed to be forward-looking statements. Particularly, statements regarding the REITs future operation results, perfo
Slide 3: Letter to Unitholders – COVID-19
Letter to Unitholders – COVID-19 Letter to Artis REIT Unitholders: In light of the recent COVID-19 virus outbreak, I would like to provide our In the meantime, we are taking appropriate measures to ensure that we are unitholders with an update on our business and the measures we are taking to limiti
Slide 4: Investing in Artis
Investing in Artis 1 Investing in Capital Cities • Provincial and State capitals • University capitals 2 Robust Yield – 51% Pay Out Ratio vs 85% Average in the TSX REIT Sector • ~ 6.8% cash distribution yield • ~ 13.1% AFFO yield • 7.9% implied cap rate • Low price multiple • Investment-grade credit
Slide 5: Diversified Commercial Portfolio
Diversified Commercial Portfolio BC AB MB SK ON 0.4M sq. ft 1.3M sq. ft 3.6M sq. ft 3.7M sq. ft 3.7M sq. ft MN 5.8M WI sq. ft 1.7M 3 asset classes sq. ft 2 countries Canada and the U.S. CO 8 major markets 1.0M sq. ft AZ 220 properties TX 25 million sq. ft. 1.9M sq. ft $5.3B GBV 93% leased 1.5M Offic
Slide 6: Portfolio Diversification
Portfolio Diversification Projected 2020/2021 NOI upon Q4-19 Net Operating Income implementation of new initiatives NOI by Geographical Region US - Other SK Canada 8% 6% Canada 40% WI ON US 52% 10% 11% 48% US 60% AZ 9% MB 13% BC 3% Retail Retail MN AB - 18% 15% 21% Other Calgary - Office 17% 2% (1)
Slide 7: Office Asset Class
Office Asset Class Number of Properties 64 GLA 9.6 million sq. ft. Leased 89% Diversification Major markets in Canada and the US IFRS GBV/IFRS Weighted- $2.5 billion/6.8% Average Cap Rate 2019 Same Property NOI +2.4% Growth 2019 Property NOI (on a $161.7 million proportionate share basis) 525 Juncti
Slide 8: Retail Asset Class
Retail Asset Class Number of Properties 41 GLA 2.9 million sq. ft. Leased 91% Diversification Major markets in Canada and the US IFRS GBV/IFRS Weighted- $0.9 Billion/6.5% Average Cap Rate 2019 Same Property NOI +0.7% Growth 2019 Property NOI (on a $62.2 million proportionate share basis) Linden Ridg
Slide 9: Industrial Asset Class
Industrial Asset Class Number of Properties 115 GLA 12.4 million sq. ft. Leased 97% Diversification Major markets in Canada and the US IFRS GBV/IFRS Weighted- $1.8 billion/5.8% Average Cap Rate 2019 Same Property NOI +8.6% Growth 2019 Property NOI (on a $95.2 million proportionate share basis) Park
Slide 10: The Sum of All Parts
The Sum of All Parts Share of Number of Same Property IFRS Weighted- IFRS GLA Leased Property NOI Properties NOI Growth 2019 Average Cap Rate GBV Office 49% 64 9.6 million sq. ft. 89% 2.4% 6.8% $2.5B Retail 18% 41 2.9 million sq. ft. 91% 0.7% 6.5% $0.9B Industrial 33% 115 12.4 million sq. ft. 97% 8.
Slide 11: Lease Expiration Schedule
Lease Expiration Schedule Percentage of Portfolio GLA Expiring 20.0% 18.0% 16.0% 13.0% 14.0% 12.0% 10.0% 9.5% 9.4% 10.0% 7.8% 8.0% 6.0% 4.0% 2.0% 0.0% 2020 2021 2022 2023 2024 Six Consecutive Quarters of Same Property NOI Growth: Q4-19 vs. Q4-18: 3.3% (4.4% excluding the Calgary office segment and p
Slide 12: Leverage Profile DBRS: BBB- Credit Rating
Leverage Profile DBRS: BBB- Credit Rating Improving Balance Sheet and Liquidity DBRS Fiscal quarter December 31, September 30, December 31, Recommended ending: 2018 2019 2019 Threshold Debt: GBV 50.6% 52.6% 52.3% ≤ 53.0% Secured mortgages and 30.6% 28.3% 27.9% N/A loans: GBV Unencumbered $1.8 billio
Slide 13: Unit Price + NAV Metrics
Unit Price + NAV Metrics Information as of March 2020 Unit Price: $7.00 $8.00 $9.00 $10.00 Distribution per Unit: $0.54 $0.54 $0.54 $0.54 Cash Yield: 7.7% 6.8% 6.0% 5.4% FFO Yield 20.1% 17.6% 15.7% 14.1% AFFO Yield 15.0% 13.1% 11.7% 10.5% FFO Price Multiple 4.96X 5.67X 6.38X 7.09X AFFO Price Multipl
Slide 14: Artis v. Peers Analytics
Artis v. Peers Analytics 2020E FFO Multiple 2020E AFFO Multiple 11.8 13.8 12.8 10.5 11.3 8.6 10 8 6.6 6.5 5.2 4.7 Choice Office/Industrial Retail Average Cominar REIT H&R REIT Artis Choice Office/Industrial Cominar REIT Retail Average Artis H&R REIT Properties Average Properties Average Premium/Disc
Slide 15: Classification of Assets
Classification of Assets As part of the new initiatives announced on November 1, 2018, Artis recategorized the portfolio into three asset types: Core Artis Assets, Development Assets, and Non-Core Artis Assets 1. Core Artis Assets ~$4.2 billion (at Nov 1/18) • Invaluable assets located in target mar
Slide 16: Strategic Initiatives: Progress
Strategic Initiatives: Progress Current Remaining Initiative Goal Status Progress Action 1. Distribution Reset $0.54 Annualized $0.54 Annualized Complete None required $258M of units and Buy back $270M of units Buy back preferred units bought 2. Share Repurchase (23.5M units at $11.50 avg Ahead of p
Slide 17: 2021 Targets
Improved Operating and Financial Metrics The goal of our new initiatives is to deliver improved operating and financial metrics to drive AFFO and NAV per unit growth 2021 Targets ~60% ~45% Target Debt/GBV Pro Forma Payout Ratio Year 3 (Q4-21) 2021 AFFO ~$1.12/unit Committed to 2021 FFO ~$1.45/unit M
Slide 18: Corporate Sustainability
Corporate Sustainability We are committed to improving the energy efficiency of our properties and reducing our environmental footprint. Cara Foods Building, Greater Toronto Area, ON – LEED Gold Certified A copy of our Environmental, Social & Governance Report can be found at www.artisreit.com Q4-19
Slide 19: Artis Real Estate Investment Trust
Artis Real Estate Investment Trust Q4-19 Investor Presentation February 2020
Artis Real Estate Investment Trust — Q4 2019 Earnings Presentation on 6ix