PRO Real Estate Investment Trust · TSX:PRV.UN
PRO Real Estate Investment Trust — Q3 2020 Earnings Presentation
36 slides from PRO Real Estate Investment Trust's earnings presentation, Nov 10, 2020
Slide 1: Investor Presentation November 2020
INVESTOR PRESENTATION November 2020 INVESTOR PRESENTATION November 2020
Slide 2: Disclaimer
Disclaimer About this Presentation This presentation is dated November 10, 2020 and is strictly intended to provide general information about PRO Real Estate Investment Trust (“PROREIT”) and its business. This presentation does not constitute an offer to sell or the solicitation of an offer to buy a
Slide 3: Building a Mid-Cap Diversified Commercial REIT in Canada
BUILDING A MID-CAP DIVERSIFIED COMMERCIAL REIT IN CANADA INVESTOR PRESENTATION 3 November 2020
Slide 4: Agenda
Section 1. PROREIT AT A GLANCE Section 2. PROVEN EXECUTION Section 3. 2020 THIRD QUARTER PERFORMANCE Section 4. POSITIONED FOR GROWTH Section 5. APPENDICES INVESTOR PRESENTATION 4 November 2020
Slide 5: PROREIT at a Glance
SECTION 1. PROREIT AT A GLANCE INVESTOR PRESENTATION 5 November 2020
Slide 6: About PROREIT
About PROREIT Established in 2013, PROREIT owns $634 million of diversified Quick Facts commercial real estate properties in Canada, representing (As at November 10, 2020) close to 4.6 million square feet of gross leasable area. PROREIT is Ticker Symbol (TSX) mainly focused on strong secondary marke
Slide 7: Our Vision
Our Vision To become a mid-cap diversified Canadian REIT with high-quality commercial real estate in specific segments of the industrial, retail, commercial mixed-use and office sectors, recognized for its ability to: PRODUCE GROW STABLE AND GROWING UNITHOLDER VALUE RETURNS PER UNIT WITH A CLEAR STR
Slide 8: Strong Performance in COVID-19 Environment
Strong Performance in COVID-19 Environment 99.2% 86% of gross rent collected of tenant base in Q3 2020 and are national and 99.6% collected in government October 2020 tenants 92.5% 68% of leases maturing of retail base rent comes in 2020 renewed with from grocery stores, average 4% year one pharmaci
Slide 9: Proven Execution
SECTION 2. PROVEN EXECUTION INVESTOR PRESENTATION 9 November 2020
Slide 10: Our Growth History
Our Growth History A BREAKOUT PROREIT CREATION YEAR BY FORMER CANMARC ► Internalization MANAGEMENT of asset FOCUSED ► Achieved management ► One $6M property, $500M ON THE ► Graduation 397K sq. ft. GLA asset target FUTURE to TSX ► TSX-V listing ► 32 properties, ► 66 properties, ► 84 properties, ► Con
Slide 11: A Solid Track Record – Seven Years Of Growth
A Solid Track Record – Seven Years Of Growth Total Assets Gross Leasable Area Property Revenues ($ Millions) (‘000 sq. ft.) ($ Millions) 700 5 000 60 57,627 634,7 4 445 600 509,7 4 000 CAGR(1) 3 703 50 CAGR (1) 500 CAGR(1) 50% 81% 40,889 40 400 44% 365,9 3 000 2 690 29,639 2 005 30 300 258,0 2 000 2
Slide 12: Building on Our Strong Momentum
Building on Our Strong Momentum September 2019 Strategic Acquisitions ► Acquisitions of 7 institutional quality properties totaling $97.8 million for total 696,000 square feet of GLA ► Boutique office tower in Ottawa’s business district ► Class-A mixed-used industrial property in Ottawa suburbs ► Fi
Slide 13: Experienced Management Team with Deep Industry Knowledge
Experienced Management Team with Deep Industry Knowledge ► 70+ years of collective asset management and property management experience ► Former CANMARC REIT team ► Sold to Cominar in 2012 James W. Gordon Lawlor, for $1.9B (43% annual ROI Beckerleg CPA, CA since IPO) Chief Executive Officer and Trust
Slide 14: Scale Brings Transformational Growth Opportunities
Scale Brings Transformational Growth Opportunities Internalization of Property and Asset Management Increased (2018-2019) Scale ► Increases cash flow and adds value ► Increases access to larger and higher quality acquisitions ► Creates significant economies of scale ► Decreases risk with greater div
Slide 15: 2020 Third Quarter Performance
SECTION 3. 2020 THIRD QUARTER PERFORMANCE INVESTOR PRESENTATION 15 November 2020
Slide 16: 2020 Third Quarter Financial Results
2020 Third Quarter Financial Results CAD $ thousands except for unit amounts Three months ended Three months ended Change YoY % unless otherwise stated September 30, 2020 September 30, 2019 Total assets $634,079 $628,604 0.9% Property revenue $17,302 $13,241 30.7% NOI(1) $10,399 $8,525 22.0% Same pr
Slide 17: 2020 Nine-Month Financial Results
2020 Nine-Month Financial Results CAD $ thousands except for unit amounts Nine months ended Nine months ended Change YoY % unless otherwise stated September 30, 2020 September 30, 2019 Total assets $634,079 $628,604 0.9% Property revenue $52,221 $40,312 29.5% NOI(1) $30,527 $25,431 20.0% Same proper
Slide 18: March 2020 Acquisition
March 2020 Acquisition Acquisition of 100% interest in light industrial building in Moncton, New Brunswick ► Acquired for $8.4 million before closing costs, 6.80% going-in capitalization rate ► 135,494 square foot temperature-controlled building ► Built in 1979 and expanded in 2000, building is loca
Slide 19: An Increasingly Diversified Portfolio Over the Last Year
An Increasingly Diversified Portfolio Over the Last Year Operational Highlights (As at September 30, 2020) Asset Class Number of Properties Occupancy (%)(1) GLA (sq. ft.) Retail 48 96.7 1,068,856 Office 10 92.1 492,446 Commercial Mixed-use 8 98.4 723,066 Industrial 26 99.8 2,286,943 Total 92 98.1 4,
Slide 20: Top Ten Tenants
Top Ten Tenants # Tenant % of In-Place GLA (sq. ft.) WALT (2) Credit Rating (3) Highlights Base Rent (1) (years) 6.2% 104,929 Baa2/BBB+/na 1 8.8 86% 2 5.9% 222,491 6.9 na/BBB-/BBB- of base rent is from national and 3 5.6% 127,334 4.3 Ba1/BB+/BBB- government tenants 4 3.5% 81,611 3.9 Aaa/AAA/AA+ Top
Slide 21: High-Quality Tenant Profile
High-Quality Tenant Profile ► 92.5% of leases maturing in 2020 renewed with average 4% rent increase in year 1 ► Overall weighted occupancy rate of 98.1% with a weighted average remaining lease term of 5.2 years ► Top ten tenants have a weighted average remaining lease term of 6.7 years 59.5% ► Stag
Slide 22: Positioned for Growth
SECTION 4. POSITIONED FOR GROWTH INVESTOR PRESENTATION 22 November 2020
Slide 23: Strategies for Driving Growth and Creating Value
Strategies for Driving Growth and Creating Value External Growth Internal Growth Strong Balance Sheet ► Acquire accretive income- ► Nurture existing client ► Low cost of debt producing commercial relationship, ensuring tenant properties in strong retention and growth ► Staggered mortgage secondary m
Slide 24: What Differentiates Us
What Differentiates Us OUR ABILITY TO IDENTIFY AND BUILD A STABLE, LOW RISK PORTFOLIO WHERE LARGER REITs ARE CURRENTLY DIVESTING Strong Secondary Selection Targeting specific MARKETS of High Quality SEGMENTS within Class B Assets four SECTORS ► Urban markets and regional economic centres outside ► S
Slide 25: Focused on Community-Based Service Centres
Focused on Community-Based Service Centres ► Typically brand grocery or pharmacy anchored ► Brand names ► Long-term leases ► Excellent covenants ► Banks, medical professionals, government services, restaurants ► Upside potential from rent increases, vacancy fill-up and pad development is available I
Slide 26: Focused on Light Industrial Buildings
Focused on Light Industrial Buildings ► Single or multi-tenant, light industrial buildings (typically 22 feet clearance or higher) ► Located on major transportation routes with strategic access to: ► Airports ► Large cities ► Border crossings ► Currently focused on 50,000 sq. ft. to 200,000 sq. ft.
Slide 27: Focused on Mixed-Use Commercial / Office
Focused on Mixed-Use Commercial / Office ► Buildings are often in industrial parks ► Flex office with loading docks ► Retail in industrial buildings (e.g. - décor, wholesale) ► Light industrial with office space ► Currently, the right buildings in the right sectors are seeing increasing demand from
Slide 28: Case Studies and Ongoing Opportunities
Case Studies and Ongoing Opportunities HALLS CREEK (2016-2017) OTHER OPPORTUNITIES (ONGOING) ► New pad development completed ► 8150 Trans-Canada Highway, St. Laurent, QC ► > 10% Return on invested capital (1) (pad development) ► 100% leased ► 50 Empire Lane, Windsor, NS ► Approximately $140 thousand
Slide 29: Sound and Flexible Capital Structure
Sound and Flexible Capital Structure No mortgage maturities coming due in 2020 Debt Maturity Profile As of September 30, 2020 Debt to Gross Book Value(1) 58.72% Debt Maturing During Year Payments of Principal Total debt $373.1M 140 Total debt weighted average rate 3.73% 120 $117.9 Total first mortga
Slide 30: Why Invest in PROREIT
Why Invest in PROREIT ► Attractive yield of monthly ► Increased scale and growing profile distributions to achieve additional synergies ► Solid track record of growth ► Acquisition focused when and unitholder value creation opportunities arise ► Diversified portfolio and ► Opportunistic and well-pos
Slide 31: Appendices
SECTION 5. APPENDICES INVESTOR PRESENTATION 31 November 2020
Slide 32: We've Done It Before
We’ve Done It Before 100% S&P/TSX Capped REIT Index CANMARC REIT 75% 50% 25% 0% ma i-2 010 juill-2010 sept-2010 nov-2010 janv-2011 ma rs-2011 ma i-2 011 juill-2011 sept-2011 nov-2011 janv-2012 ► The Former CANMARC REIT ► Diversified REIT with national portfolio ► 143 properties ► Acquired by Cominar
Slide 33: Compass Commercial Realty Acquisition
Compass Commercial Realty Acquisition HIGHLY STRATEGIC ACQUISITION COMPLETED IN 2018 ► Operates autonomously from Halifax headquarters ► Manages 38 third-party properties ► Manages 85 PROREIT properties ► Offices in Halifax, Moncton, Montreal and Oakville ► Significant room for expansion INVESTOR PR
Slide 34: 2019 Property Additions
2019 Property Additions Purchase Price Number of Added GLA Occupancy Rate Transaction ($millions) Properties (sq. ft.) at Acquisition Halifax Light Industrial Properties, Nova Scotia $28.1 5 357,824 93% 251 Laurier Avenue West, Ottawa, Ontario $21.2 1 58,203 100% 171 John Savage Avenue, Halifax, Nov
Slide 35: 2018 Property Additions
2018 Property Additions Purchase Price Number of Added GLA Occupancy Rate Transaction ($millions) Properties (sq. ft.) at Acquisition 1750 Jean-Berchmans-Michaud St. $4.39 1 85,560 100% Drummondville, QC (50%) Winnipeg, MB Industrial Portfolio $27.3 6 237,430 100% 598 Union St., Frederiction, NB $4.
Slide 36: Thank You!
THANK YOU ! INVESTOR PRESENTATION 36 November 2020
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