Crombie Real Estate Investment Trust · TSX:CRR.UN
Crombie Real Estate Investment Trust — Q1 2018 Earnings Presentation
28 slides from Crombie Real Estate Investment Trust's earnings presentation, May 10, 2018
Slide 1: Building a Better REIT
Building a Better REIT Q1 2018 Results Conference Call May 10, 2018 9:00am 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: Overview
Overview Stable, Predictable Cash Flow & NAV Growth 5.3% growth in Diluted AFFO/Unit 2.7% growth Same-asset Property Cash NOI 95.7% Committed Occupancy Expanded development pipeline with addition of 50% JV interest in Le Duke, Montreal Executing on ~$450M¹ in development $55M of disposit
Slide 5: 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 6: Crombie’s Vision – Strategic Pillars
Crombie’s Vision – Strategic Pillars Supported and Enabled by Strong Risk Management IMPROVING PORTFOLIO BUILDING FINANCIAL CULTURE AND HIGH QUALITY STRENGTH GRADING TALENT DRIVING UNITHOLDER VALUE 6
Slide 7: YTD Real Estate Transactions
Overview YTD Real Estate Transactions Capital Recycling Program Transaction Phase Value Closed $55M Dispositions executed at, or above IFRS FV Dispositions Pending Closing $87M Listed/ In $230M Negotiations Sub Total $372M Acquisitions Closed $88M 7
Slide 8: Development Pipeline
Development Pipeline Heavily Weighted Towards Canada’s 6 Urban Markets 1 10 3 1 3 1 4 8
Slide 9: Le Duke, Montreal, QC
Le Duke, Montreal, QC Placemaking along the Bonaventure Greenway $127M¹ 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 9
Slide 10: Bronte Village, Oakville, ON
Bronte Village, Oakville, ON Building Community in Major Urban Centres $275M¹ mixed use community = ~480 luxury residential rental + Sobeys + ancillary retail ¹At 100%, this project will be developed at a 50% JV interest 10
Slide 11: Davie Street, Vancouver, BC
Davie Street, Vancouver, BC Potential to Create Significant Economic Value $180M¹ mixed use development = ~330 residential rental + Safeway + ancillary retail Impressive commercial rental rates ¹At 100%, $103.7M at Crombie’s share. Crombie will own 100% of the retail and 50% of the residential 11
Slide 12: Davie Street, Vancouver, BC
Davie Street, Vancouver, BC Potential to Create Significant Economic Value Site looking West from Cadero – First crane erected for the East Tower 12
Slide 13: Belmont Market, Victoria, BC
Belmont Market, Victoria, BC Upgrading by Developing A+ Real Estate Crombie is developer Phase I virtually fully leased at 96% $93M Premier Retail destination = 160k sf of grocery, restaurants, and complimentary retail and office 13
Slide 14: Belmont Market, Victoria, BC
Belmont Market, Victoria, BC Upgrading by Developing A+ Real Estate Crombie is developer Steel structure going up on first CRU onsite 14
Slide 15: 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: $53M = Tenants CRU + Extension + Pad Site Return metrics = 10-13%¹ ¹Estimated yield on costs 15
Slide 16: Avalon Mall, St. John’s, NL
Avalon Mall, St. John’s, NL Dominant Enclosed Shopping Centre Crombie is developer Phase I: ~$55M = Parkade + common area refresh + new entrance 16
Slide 17: Avalon Mall, St. John’s, NL
Avalon Mall, St. John’s, NL Dominant Enclosed Shopping Centre Crombie is developer Parkade taking shape 17
Slide 18: Penhorn Lands, Halifax, NS
Penhorn Lands, Halifax, NS 31 acre multi-phased mixed use development Phase I: $9M = 42k multi-tenant commercial 76% commercial preleased Returns = 7-8%¹ ¹Estimated yield on cost 18
Slide 19: Material NAV Creation
Material NAV Creation $450M in First 5 Major Developments Bronte Village Davie Street Belmont $1-2 NAV/Unit Avalon Mall Le Duke Completed in 2-3yrs ¹Assumes current market conditions persist 19
Slide 20: Financial Highlights
Financial Highlights Glenn Hynes CFO, EVP & Secretary
Slide 21: Financial Highlights
Financial Highlights Stable, Predictable Cash Flow & NAV Growth Diluted FFO/AFFO per Unit Growth driven by improvements in $0.29 $0.30 $0.24 $0.26 occupancy, revenues from land use intensification, lower G&A, offset by slightly higher finance costs Diluted FFO/Unit Diluted AFFO/Unit Q1'17 Q1'18 SA
Slide 22: Financial Highlights
Financial Highlights Stable, Predictable Cash Flow & NAV Growth YTD Leasing Renewals Square Feet Rate PSF Growth 2018 Renewals 267,000 $16.23 3.6% Future Year 34,000 $10.01 (13.8%) Renewals Total 301,000 $15.52 2.1% Removing the impact of one Committed Occupancy unique renewal, growth 95.7% would ha
Slide 23: Financial Highlights
Financial Highlights Stable, Predictable Cash Flow & NAV Growth G&A as a % of Revenue 4.9% 4.2% Q1'17 Q1'18 The decline was mainly driven by $565k in tax reorganization costs incurred in Q1’17 23
Slide 24: Financial Highlights
Financial Highlights Stable, Predictable Cash Flow & NAV Growth IFRS Cap Rate 5.96% 5.93% 5.92% Q1'17 Q4'17 Q1'18 IFRS weighted average cap rate excludes the fair value of future developments until they are complete, and income producing Crombie removes Properties Under Development from cap rate
Slide 25: Financial Highlights
Financial Highlights Investment Grade, with Improving Debt Metrics 2.88x Interest 1.85x Debt $1B 8.6x Debt to BBB Low Stable 430M¹ Bank Service Service Unencumbered 4.20% WAIR² 4.5yrs WATM³ EBITDA by DBRS Credit Capacity Coverage Coverage Assets YTD repaid $61M in maturing mortgages Debt to GBV (F
Slide 26: Strategic Capital Allocation Update
Strategic Capital Allocation Update Highest & Best Use • Asset Dispositions Sources of • $55M Closed Capital • $87M Pending Closing • $88M in Acquisitions Capital • $15M Active Developments Deployment • $61M¹ Mortgages Paid Out ¹$30M included in Q1, and $31M subsequent to quarter end 26
Slide 27: The Evolution of Retail in Real Estate
The Evolution of Retail in Real Estate Ecommerce Resilient Portfolio Grocery 72% Pharmacies 8% Banks 5% % of Top 25 Tenants¹ by AMR Traditional Retailers 4% Office Tenants 4% Other Necessity Based- Retailers 2% 89% of AMR Approximately Cinemas 2% About 1% of generated by 86% of Canadian Top 25 Tenan
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