Crombie Real Estate Investment Trust · TSX:CRR.UN
Crombie Real Estate Investment Trust — Q3 2018 Earnings Presentation
25 slides from Crombie Real Estate Investment Trust's earnings presentation, Nov 9, 2018
Slide 1: Building a Better REIT
Building a Better REIT Q3 2018 Results Conference Call November 9, 2018 12:30pm 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 1.9% growth Same-asset Property Cash NOI Retail Same-asset NOI of 2.5% 96.2% Committed Occupancy New record Executing on ~$511M¹ in development YTD $194M in dispositions closed YTD 3.7% diluted AFFO per unit growth Completed first u
Slide 5: Sobeys
Sobeys Aggressively Building, Adapting & Growing Expanding FreshCo to the West Investing in Bricks-and-Mortar Leading Edge Omnichannel Technology • Game-changing Ocado e-commerce end-to-end solution • Expand presence in underpenetrated GTA Farm Boy acquisition • Will benefit from Sobeys infrastructu
Slide 6: Real Estate Transactions
Overview Real Estate Transactions Capital Recycling Program Transaction Phase Value Closed YTD $194M Dispositions executed in line Dispositions In Negotiations $75-100M with IFRS FV Listed/Under $200M Discussion Sub Total $470-500M Acquisitions Closed $104M 6
Slide 7: 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 2-3yrs² ¹Avalon Phase I excluded, ²Assumes NAV creation equals developers profit per unit and that current market conditions and cap rates persist
Slide 8: Belmont Market, Langford, (Victoria), BC
Belmont Market, Langford, (Victoria), BC Upgrading by Developing A+ Real Estate Crombie is developer Phase I & II 96% & 70% leased, respectively 8
Slide 9: Belmont Market, Langford, (Victoria), BC
Belmont Market, Langford, (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 9
Slide 10: Avalon Mall, St. John's, NL
Avalon Mall, St. John’s, NL Dominant Enclosed Shopping Centre Demolition of former Sears complete 10
Slide 11: 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 11
Slide 12: Davie Street, Vancouver, BC
Davie Street, Vancouver, BC Potential to Create Significant Economic Value Parkade complete 12
Slide 13: Davie Street, Vancouver, BC
Davie Street, Vancouver, BC Potential to Create Significant Economic Value $181M¹ mixed use development = ~330 residential rental + Safeway + Retail 95% ancillary retail leased Rental rates exceed modeling assumptions ¹At 100%, $104.5M at Crombie’s share. Crombie will own 100% of the retail and 50%
Slide 14: Bronte Village, Oakville, ON
Bronte Village, Oakville, ON Building Community in Major Urban Centres ¹This 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: Le Duke, Montreal, QC
Le Duke, Montreal, QC Placemaking along the Bonaventure Greenway Excavation 100% complete at the south end of the site Cross bracing and piling around perimeter is complete 16
Slide 17: 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 17
Slide 18: 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 Development Expertise with VECTOM 23 Major 5-30yrs Potential Experience per Developments Individual on 20 Person Team Potential
Slide 19: Financial Highlights
Financial Highlights Glenn Hynes CFO, EVP & Secretary
Slide 20: Financial Highlights
Financial Highlights Stable, Predictable Cash Flow & NAV Growth Diluted FFO/AFFO per Unit X-items²= $0.31 $0.31 Growth driven by improvements in $0.30 X-items= $0.26 occupancy and rental uplifts $0.26 $0.25 Diluted FFO/Unit Diluted AFFO/Unit Q3'17³ Q3'18 X-items= 86.1% SANOI Growth¹ FFO/AFFO Payou
Slide 21: Financial Highlights
Financial Highlights Stable, Predictable Cash Flow & NAV Growth Q3’18 Leasing Renewals Square Feet Rate PSF Growth 2018 Renewals 140,000 $14.43 3.1% Future Year 116,000 $10.22 5.3% Renewals Total 256,000 $12.52 3.9% Q3’18 Highest Occupancy in Public Company History 96.2% 96.1% 95.7% 95.2% 94.6% 94.6
Slide 22: Financial Highlights
Financial Highlights Stable, Predictable Cash Flow & NAV Growth IFRS Cap Rate 5.92% 5.99% 6.06% Q1'18 Q2'18 Q3'18 Fair value of investment properties 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
Slide 23: Financial Highlights
Financial Highlights Investment Grade, with Improving Debt Metrics 2.97x Interest 1.92x Debt $1.0B 8.57x Debt to BBB Low Stable $337M¹ Bank Service Service Unencumbered 4.14% WAIR² 4.0yrs WATM³ EBITDA by DBRS Credit Capacity Coverage Coverage Assets Issued $175M 4.8% unsecured notes maturing in 20
Slide 24: Strategic Capital Allocation Update
Strategic Capital Allocation Update Highest & Best Use Sources of • Dispositions Capital • Free Cash Flow • Development Capital • Acquisitions Deployment • Land Use Intensification 24
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