Crombie Real Estate Investment Trust · TSX:CRR.UN
Crombie Real Estate Investment Trust — Q4 2018 Earnings Presentation
34 slides from Crombie Real Estate Investment Trust's earnings presentation, Mar 20, 2019
Slide 1: Building a Better REIT
Building a Better REIT Investor Presentation March 2019
Slide 2: Safe Harbour Disclosure and Confidentiality Statement
“Safe Harbour” Disclosure and Confidentiality Statement Forward-looking Information This presentation contains forward-looking statements that reflect the current expectations of management of Crombie about Crombie's future results, performance, Forward-looking achievements, prospects and opportunit
Slide 3: Crombie REIT: Who are we?
Crombie REIT Who are we? National Portfolio with Extraordinary Established in 2006, and one of Canada’s leading national retail landlords Development Opportunities Focused on Focused on NAV and FFO/AFFO growth by owning, VECTOM² operating and developing high quality grocery and drug store anchor
Slide 4: Why Invest in Crombie?
Why Invest in Crombie? Current Discount to NAV Investment Thesis (9.7%)³ Stable, high-quality everyday-needs- anchored portfolio, resulting in strong, stable Development Pipeline Creates Accretive Growth cash flow growth Opportunities Dollars (billions) $3-4.5 Strong fundamentals driving 96% occ
Slide 5: Crombie's Vision – Strategic Pillars
Crombie’s Vision – Strategic Pillars Supported and Enabled by Strong Risk Management IMPROVING PORTFOLIO QUALITY BUILDING FINANCIAL STRENGTH CULTURE AND TALENT Through smart capital allocation, Maintain a strong balance sheet with Recruiting and refocusing existing high- accelerate FFO/AFFO and NAV
Slide 6: Nationwide Portfolio
Nationwide Portfolio Growing Exposure to Major Markets Focused on high growth urban and suburban markets with development opportunities, while disposing of lower growth and/or non-core assets. Growing exposure to higher growth central and western regions. Growing Western Exposure 42%¹ Western At
Slide 7: Leasing & Value Creation
Leasing & Value Creation Built in Organic Growth Same Asset NOI Growth Current Year Renewal Rates 2018 2.7% 2018 $16.78 2017 1.1% 2017 $18.73 2016 4.2% 2016 $16.96 2015 1.8% 2015 $19.01 2014 1.4% 2014 $18.60 Highest Year-End Occupancy in Crombie’s History Current Year Renewal Leasing Spreads Committ
Slide 8: Consistent Historical AFFO Growth
Consistent Historical AFFO Growth Improving AFFO Payout Ratio AFFO/Unit, diluted AFFO Payout Ratio $1.03 96.4% $1.00 92.8% $0.98 91.0% $0.96 88.9% 86.5% $0.93 2014 2015 2016 2017 2018 2014 2015 2016 2017 2018 8
Slide 9: Tenant Mix
Tenant Mix Strong Retailer Relations Driving Growth Avg Remaining DBRS Tenant % of AMR Lease Rating Term (yrs) Right of First Sobeys 55.5% 14 BB (high) Offer Shoppers 4.4% 10 BBB Stable & Drug Mart Market Growing Dollarama 1.2% 6 BBB Intelligence Cash flow Province of 1.1% 1 A (high) Nova Scotia CIB
Slide 10: Sobeys
Sobeys Aggressively Building, Adapting & Growing Expanding FreshCo to the West Investing in Bricks-and-Mortar Leading Edge Omnichannel Technology • Game-changing Ocado-driven e-commerce business • Will expand presence in under-penetrated GTA Farm Boy Acquisition • Will benefit from Sobeys infrastruc
Slide 11: Improving Portfolio Quality
Improving Portfolio Quality Davie Street, Vancouver, British Columbia
Slide 12: Smart Capital Allocation: Highest & Best Use
Smart Capital Allocation: Highest & Best Use Prioritize Growth in NAV & AFFO/Unit Sources Uses Dispositions Free Cash Investments with Major Equity Sobeys Development Flow Debt 12
Slide 13: Building a Better REIT: Into the Next Decade & Beyond
Building a Better REIT Into the Next Decade & Beyond Unlock $3- 4.5B Organic National Portfolio with Extraordinary Development Pipeline Development Opportunities Focused on Development Expertise with VECTOM 23 Major 5-30yrs Potential Experience per Developments Individual on 21 Person Team Potential
Slide 14: Development Team
Development Team In-House Expertise ~30yrs Residential Development Chief Executive Officer Development Experience Team of 21 Professionals Chief Operating Officer 5-30yrs Mixed- SVP, Development & Construction Use Development Experience per VP, Atlantic VP, Construction VP, Construction Individual D
Slide 15: Material NAV Creation
Material NAV Creation $450M¹ Investment in First 5 Major Developments Davie Street Bronte Belmont Village $1-2 NAV/Unit Le Duke Avalon Mall¹ Completed in 1-2yrs² ¹Avalon Phase I excluded, ²Assumes NAV creation equals difference between Crombie’s current estimated stabilized value based on current ma
Slide 16: Active Major Development Pipeline
Active Major Development Pipeline Value Creation in Action Estimated Estimated Estimated Commercial Residential Estimated # Property Phase Location Completion Annual Yield on $511M² under Active GLA GLA Total Cost² Date NOI² Cost² Development St. John’s, Phase I - - Q3 2019 - $54.5 - Avalon NL 1 Mal
Slide 17: Avalon Mall, St. John's, NL
Avalon Mall, St. John’s, NL Dominant Enclosed Shopping Centre Overview In April 2017 Crombie launched a three year capital investment program to enhance Avalon Mall's position as the dominant retail choice in Newfoundland and Labrador, enabling Avalon Mall to continue to improve tenant mix and incre
Slide 18: Davie Street, Vancouver, BC
Davie Street, Vancouver, BC Potential to Create Upwards of $100M in Value Overview Davie Street will include a 44,000 sf grocery store with 9,000 sf of ancillary retail and 253,000 sf, or up to 330 rental residential units. Davie Street has emerged from the ground and concrete is being poured for th
Slide 19: Le Duke, Montreal, QC
Le Duke, Montreal, QC Placemaking along the Bonaventure Greenway Overview Le Duke is adjacent to the Bonaventure Greenway in Old Montreal, and is being built with our 50% JV partners as a 25 storey mixed use tower with 390 residential rental units above a 25,000 sf urban format IGA. The concrete and
Slide 20: Belmont Market, Langford, (Victoria), BC
Belmont Market, Langford, (Victoria), BC Upgrading by Developing A+ Real Estate Crombie is 100% Overview developer Phase I tenants of this 160,000 sf vibrant open-air centre have taken possession and rental income has commenced. Construction is complete on three buildings and Thrifty’s is opening th
Slide 21: Bronte Village, Oakville, ON
Bronte Village, Oakville, ON Building Community in Major Urban Centres Overview Bronte Village will be a special luxury rental opportunity in a vibrant, unique and highly sought after community. This 50% JV development will include 480 units of refined rental living and a 30,000 sf Sobeys. Excavatio
Slide 22: Potential Major Development Pipeline
Potential Major Development Pipeline Value Creation Opportunities for Years to Come Site Site # Property Location Size Status # Property Location Size Status 52% of Potential (acres) (acres) Major Development Broadway & Vancouver, 813 11 Avenue Pipeline located in 1 Commercial¹ BC 2 Pre-planning 11
Slide 23: McCowan & Ellesmere, Toronto, ON
McCowan & Ellesmere, Toronto, ON Future Major Transit Hub Subway Line Overview Extension A future major mixed use, transit oriented development site in Toronto, Ontario, acquired from a 3rd party. Together, Sobeys and Crombie are uniquely positioned to unlock the development value embedded in this s
Slide 24: Building Financial Strength
Building Financial Strength Belmont, Victoria, British Columbia
Slide 25: Strong Financial Condition
Strong Financial Condition Investment Grade, with Improving Debt Metrics 1.91x Debt $999M 8.67x Debt to 2.93x Interest BBB Low Stable 312M¹ Bank Service Unencumbered 4.20% WAIR² 4.2yrs WATM³ EBITDA Coverage by DBRS Credit Capacity Coverage Assets D/GBV - FV⁴ 52.8% 52.5% Fixed Rate Mortgages, 33% Tot
Slide 26: Well-Laddered Debt Maturity Profile
Well-Laddered Debt Maturity Profile Improving the Capital Stack with Unsecured Notes Opportunity for Interest savings $500 regular unsecured available 6% on expiring Millions bond issuances mortgages $450 5% $400 $350 4% $300 Bank Credit Facility¹ $250 3% Unsecured Notes Mortgages $200 WAIR Fixed Ra
Slide 27: Culture & Talent
Culture & Talent Canmore, Alberta
Slide 28: Strong Leadership with Deep Bench
Strong Leadership with Deep Bench Nationwide Talent DON CLOW GLENN HYNES CHERYL FRASER JOHN BARNOSKI President & CEO EVP, COO, CFO & Secretary CTO, VP Communications SVP, Corporate Development Halifax, NS New Glasgow, NS New Glasgow, NS Mississauga, ON Years of Experience: Years of Experience: Years
Slide 29: Crombie's Talent Management Strategy
Culture Crombie’s & Talent Talent Management Strategy Continuing to Build the Crombie of Tomorrow Crombie is like a community: where people treat each other with respect and where we’re working together toward a common long term goal. Crombie values integrity, strong relationships and commitments to
Slide 30: Environmental Sustainability Commitment
Environmental Sustainability Commitment Social, Environmental & Economic Crombie’s core values include a commitment to adopt environmental sustainability principles in our business practices by integrating environmental considerations in our decision-making processes and striving to ensure we conduc
Slide 31: Risk Management
Risk Management Bronte Village, Oakville, ON
Slide 32: Risk Management
Risk Management Continuously Monitoring Potential Risks, and Executing Minimization & Mitigation Plans Major Financing, IT Systems Tenant Development Acquisitions Refinancing & Capabilities Concentration Projects Liquidity 32
Slide 33: Thank You
Thank You Glenn Hynes | [email protected] | (902) 755-8100 | crombiereit.ca Claire Mahaney Lyon | [email protected] | (902) 474-6670 | crombiereit.ca
Slide 34: Slide 34
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