Crombie Real Estate Investment Trust · TSX:CRR.UN
Crombie Real Estate Investment Trust — Q2 2018 Earnings Presentation
25 slides from Crombie Real Estate Investment Trust's earnings presentation, Aug 9, 2018
Slide 1: Building a Better REIT
Building a Better REIT Q2 2018 Results Conference Call August 9, 2018 12:00pm EST
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: Opening Remarks
Opening Remarks Don Clow President & CEO
Slide 4: Quarterly Overview
Quarterly Overview Stable, Predictable Cash Flow & NAV Growth 9.4% growth in Diluted AFFO/Unit 2.9% growth Same-asset Property Cash NOI 96.1% Committed Occupancy Highest in public company history Executing on ~$450M¹ in development $152M of dispositions closed, $194M YTD ¹At Crombie’s sh
Slide 5: Acquisitions Dispositions Overview
Overview YTD Real Estate Transactions Capital Recycling Program Transaction Phase Value Closed $194M Dispositions Dispositions executed in line with IFRS FV In Negotiations $200M Sub Total $394M Acquisitions Closed $101M 5
Slide 6: Building a Better REIT
Building a Better REIT Into the Next Decade & Beyond Unlock $3- National Portfolio with Extraordinary 4.5B Organic Development Pipeline Development Opportunities Focused on 25+yrs of VECTOM 23 Major Management Potential Development Developments Experience Significant NAV Creation 1 10 Materially 3 1
Slide 7: Development Team
Development Team In-House Expertise Chief Executive Officer Senior Vice Senior Vice President President Vice President Vice President Senior Director Director Director Engineering Leasing Construction Legal Environmental Analytics Design 7
Slide 8: Belmont Market, Victoria, BC
Belmont Market, Victoria, BC Upgrading by Developing A+ Real Estate Crombie is developer $93M Premier Retail destination = 160k sf of grocery, restaurants, and complementary retail and office 8
Slide 9: Belmont Market, Victoria, BC
Belmont Market, Victoria, BC Upgrading by Developing A+ Real Estate Crombie is developer Phase I to be complete this fall 9
Slide 10: Davie Street, Vancouver, BC
Davie Street, Vancouver, BC Potential to Create Significant Economic Value $181M¹ mixed use development = ~330 residential rental + Safeway + ancillary retail Impressive commercial rental rates ¹At 100%, $104.5M at Crombie’s share. Crombie will own 100% of the retail and 50% of the residential 10
Slide 11: Davie Street, Vancouver, BC
Davie Street, Vancouver, BC Potential to Create Significant Economic Value Parking garage beginning to take form 11
Slide 12: Avalon Mall, St. John's, NL
Avalon Mall, St. John’s, NL Dominant Enclosed Shopping Centre Strong preleasing interest with First-to-Market Phase II: $58M = Tenants CRU + Extension + Pad Site Return metrics = 10-13%¹ ¹Estimated yield on costs 12
Slide 13: Le Duke, Montreal, QC
Le Duke, Montreal, QC Placemaking along the Bonaventure Greenway $124M¹ mixed use tower = ~390 residential rental + urban format IGA + ancillary Expanded retail development pipeline to 5th VECTOM market ¹At 100%, this project will be developed at a 50% JV interest 13
Slide 14: Le Duke, Montreal, QC
Le Duke, Montreal, QC Placemaking along the Bonaventure Greenway Excavation nearing completion ¹At 100%, this project will be developed at a 50% JV interest 14
Slide 15: Bronte Village, Oakville, ON
Bronte Village, Oakville, ON Building Community in Major Urban Centres $277M¹ mixed use community = ~480 luxury residential rental + Sobeys + ancillary retail ¹At 100%, this project will be developed at a 50% JV interest 15
Slide 16: Bronte Village, Oakville, ON
Bronte Village, Oakville, ON Building Community in Major Urban Centres Demolition of enclosed shopping centre complete ¹At 100%, this project will be developed at a 50% JV interest 16
Slide 17: Material NAV Creation
Material NAV Creation $450M in First 5 Major Developments Davie Street Bronte Belmont Village $1-2 NAV/Unit Le Duke Avalon Mall¹ Completed in 2-3yrs ¹Avalon Phase I excluded, ²Assumes current market conditions persist 17
Slide 18: Financial Highlights
Financial Highlights Glenn Hynes CFO, EVP & Secretary
Slide 19: Financial Highlights
Financial Highlights Stable, Predictable Cash Flow & NAV Growth Diluted FFO/AFFO per Unit 5.6% $0.30 $0.29 9.4% Growth driven by improvements in $0.26 $0.24 occupancy and rental uplifts from redeveloped properties and lower G&A. Diluted FFO/Unit Diluted AFFO/Unit Q2'17 Q2'18 SANOI Growth¹ FFO/AFFO
Slide 20: Financial Highlights
Financial Highlights Stable, Predictable Cash Flow & NAV Growth Q2’18 Leasing Renewals Square Feet Rate PSF Growth 2018 Renewals 113,000 $26.93 2.8% Future Year 25,000 $18.67 7.6% Renewals Total 138,000 $25.46 3.4% Q2’18 Highest Occupancy in Public Company History 96.1% 95.7% 95.2% 94.6% 94.6% 94.7%
Slide 21: Financial Highlights
Financial Highlights Stable, Predictable Cash Flow & NAV Growth IFRS Cap Rate 5.99% 5.93% 5.92% Q4'17 Q1'18 Q2'18 NAV based on market cap rates and trailing twelve month in place NOI IFRS weighted average cap rate excludes the fair value of future developments and air rights, until projects are
Slide 22: Financial Highlights
Financial Highlights Investment Grade, with Improving Debt Metrics 2.90x Interest 1.88x Debt $1.1B 8.5x Debt to BBB Low Stable 359M¹ Bank Service Service Unencumbered 4.18% WAIR² 4.3yrs WATM³ EBITDA by DBRS Credit Capacity Coverage Coverage Assets Repaid $35M in maturing mortgages at 4.7% Debt to
Slide 23: Strategic Capital Allocation Update
Strategic Capital Allocation Update Highest & Best Use • Dispositions Sources of • Free Cash Flow Capital • DRIP • Development Capital • Acquisitions Deployment • LUI 23
Slide 24: Ecommerce Resilient Portfolio
Ecommerce Resilient Portfolio Positioned for Success as Retail Transforms Grocery, 74% % of Top 25 Tenants¹ by AMR Pharmacies, 8% Banks, 5% Traditional Retailers, 4% Office Tenants, 4% 90% of AMR Approximately Other Necessity About 1% of generated by 87% of Based-Retailers, 2% Canadian Top 25 Tenant
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