CT Real Estate Investment Trust · TSX:CRT.UN
CT Real Estate Investment Trust — Q4 2023 Earnings Presentation
42 slides from CT Real Estate Investment Trust's earnings presentation, February 2024
Slide 1: Reliable. Durable. Growing. Q4 2023 Investor Presentation
RELIABLE. DURABLE. GROWING. Q4 2023 Investor Presentation
Slide 2: Disclaimer
DISCLAIMER Forward Looking Statements This presentation contains forward-looking information that reflects management’s current expectations relating to matters such as future financial performance and operating results of CT Real Estate Investment Trust (“CT REIT” or the “REIT”). Forward-looking st
Slide 3: Executive Team
EXECUTIVE TEAM Highly experienced with in-depth market knowledge Kevin Salsberg Former EVP and CIO Plaza Retail REIT President & CEO Former COO, KEYreit Lesley Gibson CPA, CA Former CAO, Choice Properties REIT SVP & CFO Former EVP Finance, Primaris Retail REIT Jodi Shpigel Former SVP Development, Fi
Slide 4: Strategic Overview
STRATEGIC OVERVIEW 4
Slide 5: 10-Year Highlights
10-YEAR HIGHLIGHTS1 Delivering growth to unitholders while improving financial stability ▪ Invested approximately $2.6 billion across 126 acquisitions, 22 development/ redevelopment projects,108 intensifications and ongoing developments. ▪ Added 117 properties, totaling 11.4 million square feet. ▪ 7
Slide 6: Investment Highlights
INVESTMENT HIGHLIGHTS Canada’s premier Net Lease REIT AFFO/Unit CAGR1,2: 4.7% Occupancy Rate: 99.1% NAV/Unit CAGR1: 3.1% Annualized base minimum rent from Distribution/Unit CAGR1: 3.9% investment grade tenants: 96.3% 30.8M Sq. Ft. 8.4 Years Irreplaceable National Portfolio One of the longest weighte
Slide 7: Irreplaceable National Portfolio
IRREPLACEABLE NATIONAL PORTFOLIO 374 ~$ 30.8M B 6.3 Total Property Count Square Feet of GLA1 Fair market value ~$6.9B FAIR MARKET VALUE YUKON 1 NORTHWEST TERRITORIES 2 NUNAVUT NEWFOUNDLAND BRITISH AND LABRADOR COLUMBIA 28 ALBERTA 8 55 SASKATCHEWAN MANITOBA 8 13 QUEBEC ONTARIO 145 78 NOVA SCOTIA 19 P
Slide 8: High Quality Portfolio
HIGH QUALITY PORTFOLIO 45% of Base Minimum rent from: Vancouver, Edmonton, Calgary, Toronto, Ottawa and Montreal (VECTOM) BY MARKET1,2 BY ASSET TYPE1 % OF ANNUALIZED BASE MINIMUM RENT % OF TOTAL GLA SMALL, 21.0% Toronto, 19.2% URBAN- VECTOM Montreal, 10.9% MEDIUM, 13.0% 45.0% Retail, 84.0% Industria
Slide 9: An Exceptional Major Tenant
AN EXCEPTIONAL MAJOR TENANT Canadian Tire Corporation is one of Canada’s most admired and trusted companies $8.3B ▪ ▪ 100% Brand Recognition Celebrated 100 years in Market Capitalization1 business in 2022 ▪ An iconic and trusted $16.7B omni-channel retailer with scale and room to grow Consolidated R
Slide 10: Top 10 Tenants
TOP 10 TENANTS1 High quality tenant base Tenant % of Annualized Base Rent 1 0.65 % 2 0.58 % 3 0.51 % 4 0.46 % 5 0.41 % 6 0.41 % 7 0.33 % 8 0.28 % 9 0.28 % 10 0.22 % Total 4.13 % All figures as at December 31, 2023. 1 Excluding Canadian Tire Corporation related tenancies. 10
Slide 11: Long-Term Lease Maturities
LONG-TERM LEASE MATURITIES One of the longest weighted average lease terms in the sector with well staggered maturities 1 Excludes Properties Under Development. Total base minimum rent excludes future contractual escalations. Canada Square is included at the REIT’s one-half interest. Occupancy and o
Slide 12: Strategic Locations
STRATEGIC LOCATIONS High traffic and transit-oriented locations in growing markets Leslie St. & Sheppard Ave., Toronto, ON ▪ Prime locations in urban centres ▪ Dominant positions in secondary markets 12
Slide 13: Industrial Properties
INDUSTRIAL PROPERTIES Net Zero Development 11 Dufferin Place SE 25 Dufferin Place SE 5500 Dufferin Blvd. SE Calgary, AB Calgary, AB Calgary, AB 201K sq. ft 655K sq. ft 350K sq. ft1 8400 Healey Road 50 Boulevard Dupont Bolton, ON Coteau-du-Lac, QC 1.4M sq. ft 2.0M sq. ft 1 Certified under the Canada
Slide 14: Dufferin District
DUFFERIN DISTRICT Industrial node in southeast Calgary provides critical mass and attractive fundamentals 14
Slide 15: Growth Strategies
GROWTH STRATEGIES 15
Slide 16: Growth Levers
GROWTH LEVERS Uniquely positioned to leverage relationship with CTC and pursue third party net lease opportunities to complement organic growth CTC Acquisitions Development Intensifications Third Party Embedded Organic Growth 1.5% 8.6 years Annual rent escalations Weighted average (on average)1 rema
Slide 17: Solid Growth Pipeline
SOLID GROWTH PIPELINE Development pipeline highlights meaningful opportunities for future growth Ongoing Development by Type 1 ▪ Approximately 571,000 square New Retail Development, 21% feet of ongoing development activity totaling $258M1 ▪ 141,000 square feet of incremental new investments announce
Slide 18: Case Studies
CASE STUDIES 18
Slide 19: Development
DEVELOPMENT CT REIT has a preferential right to participate in the development of CTC owned properties Greenfield Developments Grande Prairie, AB ▪ CT REIT is uniquely positioned to participate in the development of Canadian Tire stores and Canadian Tire anchored developments ▪ 17 new Canadian Tire
Slide 20: Development: Orillia Square Mall
DEVELOPMENT Acquiring and repositioning under-managed assets; leveraging strategic relationship Redevelopment Project: Orillia Square Mall BEFORE ▪ Former vacant Target and portion of enclosed mall redeveloped for brand new large format Canadian Tire store ▪ Former Canadian Tire store re- demised fo
Slide 21: Development – Canada Square, Toronto, ON
DEVELOPMENT – CANADA SQUARE, TORONTO, ON Nine-acre mixed-use redevelopment site located on two subway lines at Yonge and Eglinton, one of Toronto’s most prominent intersections Urban Mixed Use Redevelopment Opportunity ▪ 50/50 Joint-Venture with Oxford Properties Group ▪ CT REIT and Oxford have ente
Slide 22: Intensifications
INTENSIFICATIONS Incremental density on owned surplus lands Thunder Bay, ON ▪ Since IPO, CT REIT has funded 112 intensification projects for Canadian Tire Corporation and ancillary tenants ▪ Over 1.51M square feet of incremental GLA added 22
Slide 23: CTC Acquisitions
CTC ACQUISITIONS Privileged relationship – right of first offer on all CTC properties ▪ CTC owned properties that can be acquired by CT REIT and leased back to CTC on a long term basis or redeveloped ▪ Over 2M square feet of industrial assets acquired and leased to CTC since IPO ▪ Currently there ar
Slide 24: Third Party Acquisitions
THIRD PARTY ACQUISITIONS Consolidating the ownership of Canadian Tire tenanted properties from third parties ▪ Approximately 1/4 of Canadian Tire properties are owned by third parties ▪ Opportunity to consolidate Canadian Tire stores and supply chain assets ▪ CT REIT has acquired 19 Canadian Tire an
Slide 25: Third Party Acquisitions: Non-CTC Opportunities
THIRD PARTY ACQUISITIONS Non-CTC related opportunities Halifax, NS Waterloo, ON ▪ Broader investment strategy to acquire third party net lease assets ▪ Leverage CTC’s local insight and market knowledge Banff, AB 25
Slide 26: Financial Overview
FINANCIAL OVERVIEW 26
Slide 27: Stable and Resilient Asset Base
STABLE AND RESILIENT ASSET BASE Property revenue is reliable and growing 96.3% 8.4 Years Of annualized base minimum rent from One of the longest weighted average lease investment grade tenants1 terms in the sector 99.1% 1.5% Occupancy1 Annual rent escalations2 All figures as at December 31, 2023. 1
Slide 28: Lean Cost Structure
LEAN COST STRUCTURE One of the lowest cost structures in the REIT sector Welland, ON ▪ CTC leases triple net; base rent, operating costs (including insurance) and capex paid by tenant ▪ G&A as a percentage of revenues are 2.9%1 ▪ Internalized property management functions; any services provided by C
Slide 29: Investment Grade Capital Structure
INVESTMENT GRADE CAPITAL STRUCTURE Predictable and durable – strong balance sheet supports growth and distributions BBB 41.4% Investment grade rating1 Indebtedness Ratio 6.8x 3.7x Debt to EBITFV2 Interest Coverage Ratio3 All figures as at December 31, 2023. 1 Source: S&P Global Ratings and DBRS. 2 N
Slide 30: Solid Financial Metrics
SOLID FINANCIAL METRICS Strong credit metrics – low leverage Indebtedness Ratio, Debt to EBITFV1 and Interest Coverage2 Indebtedness Ratio Debt to EBITFV, Interest Coverage 7.9 50.0% 8.0 7.6 7.6 7.4 7.3 48.0% 7.0 6.9 6.8 6.9 6.8 7.0 46.0% 6.0 44.0% 42.0% 5.0 40.0% 3.7 3.7 3.7 4.0 38.0% 3.5 3.5 3.5 3
Slide 31: Debt
DEBT Conservative leverage – strong credit metrics Capital Structure Total debt (000’s)2 Class C LP Units (unsecured) $1,451,550 21% Debentures Mortgages (secured) $9,131 Debentures (unsecured) $1,420,313 22% Class C LP Units Credit Facilities (unsecured) $0 Total $2,880,994 57% Equity1 Liquidity: ▪
Slide 32: Debt Maturities
DEBT MATURITIES Staggered debt maturities – one of the longest weighted average terms to maturity in the sector ▪ No public unsecured ($ millions) Interest Rate debenture maturities Debt Principal Repayments until June 2025 $700 7.00% ▪ 99.7% of total debt $600 6.00% is unsecured; all unsecured debt
Slide 33: Growing FFO and AFFO
GROWING FFO AND AFFO Attractive record of per unit growth FFO1, AFFO1 and Book Value per unit metrics2,3 FFO and AFFO per unit Book Value per unit $1.40 1.308 $17.00 $1.30 1.264 1.238 1.203 $16.00 1.175 1.181 $1.20 1.144 1.147 1.124 1.104 $15.00 1.071 $1.10 1.038 1.032 1.007 $14.00 0.979 $1.00 0.954
Slide 34: Solid Distribution Growth
SOLID DISTRIBUTION GROWTH History of growing distributions every year post IPO while conservatively managing payout ratio AFFO Payout Ratio1 and Distribution Growth Payout Percentage Annual Distribution ▪ Ten distribution 100.0% 3.4% $0.90 increases, 38% growth 3.9% since 2013 IPO $0.85 3.6% 88.3% 9
Slide 35: Environmental, Social and Governance
ENVIRONMENTAL, SOCIAL AND GOVERNANCE 35
Slide 36: ESG - An Imperative for CT REIT
ESG - AN IMPERATIVE FOR CT REIT We believe that investing in ESG initiatives will maximize long-term value for our unitholders by addressing the environmental, social and governance impacts of our business operations 2022 ESG Report Highlights As a critical pillar of the REIT’s strategy, our ESG are
Slide 37: Majority Independent Board
MAJORITY INDEPENDENT BOARD Committed to having a Board with diverse experiences, skills and perspectives TRUSTEES COMMITTEES HIGHLIGHTS John O’Bryan Governance, Compensation and Corporate Director Chair of the Board Nominating (GCN) Committee Honorary Chairman, CBRE Limited Investment Committee Form
Slide 38: Appendix: Specified Financial Measures
APPENDIX: SPECIFIED FINANCIAL MEASURES 38
Slide 39: Specified Financial Measures
SPECIFIED FINANCIAL MEASURES “FFO” is a non-GAAP financial measure and has the meaning given to it in the REALPAC Guidance on FFO & AFFO. It is calculated as net income in accordance with IFRS, adjusted by removing the FFO: impact of: (i) fair value adjustments on investment properties; (ii) other f
Slide 40: Specified Financial Measures: FFO & AFFO Reconciliation
SPECIFIED FINANCIAL MEASURES FFO & AFFO RECONCILIATION FROM NET INCOME YTD Q4 2023 Net income and comprehensive income $229,434 Fair value adjustment on investment property $78,636 GP income tax expense $31 Lease principal payments on right-of-use assets $(852) Fair value adjustment of unit-based co
Slide 41: Specified Financial Measures: EBITFV and Capital Structure
SPECIFIED FINANCIAL MEASURES EBITFV1 CAPITAL STRUCTURE Net income and comprehensive income $229,434 Equity $3,847,769 57.2 % Fair value adjustment on investment $78,636 Class C LP Units $1,451,550 21.6 % properties Fair value adjustment on unit-based $(625) Debentures $1,420,313 21.1 % awards Intere
Slide 42: Specified Financial Measures: 5-Year CAGR
SPECIFIED FINANCIAL MEASURES 5-YEAR COMPOUND ANNUAL GROWTH RATE1 2018 2023 5 Year CAGR (A) (B) AFFO/Unit2 0.954 1.203 4.7% NAV/Unit 14.01 16.34 3.1% Distribution/ 0.728 0.883 3.9% Unit – Paid SECURED DEBT VARIABLE RATE INDEBTEDNESS /TOTAL INDEBTEDNESS /TOTAL INDEBTEDNESS Secured Debt $9,131 Variable
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