INFINITE POSSIBILITIES - INVESTOR PRESENTATION Q2 2019 - SmartCentres
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INFINITE POSSIBILITIES… INVESTOR PRESENTATION Q2 2019
NOTICE TO READER
Readers are cautioned that certain terms used in this Investor Presentation (“Presentation”) such as Funds from Operations ("FFO"), Adjusted
Cashflow from Operations ("ACFO"), "Gross Book Value", "Payout Ratio", "Interest Coverage", "Total Debt to Adjusted EBITDA" and any related per
Unit amounts used by management to measure, compare and explain the operating results and financial performance of the Trust do not have any
standardized meaning prescribed under IFRS and, therefore, should not be construed as alternatives to net income or cash flow from operating
activities calculated in accordance with IFRS. These terms are defined in this Presentation and reconciled to the consolidated financial information of
the Trust in the Management’s Discussion and Analysis (“MD&A”) for the three months ended June 30, 2019. Such terms do not have a standardized
meaning prescribed by IFRS and may not be comparable to similarly titled measures presented by other publicly traded entities.
Certain statements in this Presentation are "forward-looking statements" that reflect management's expectations regarding the Trust's future growth,
results of operations, performance and business prospects and opportunities. More specifically, certain statements contained in this Presentation,
including statements related to the Trust's maintenance of productive capacity, estimated future development plans and costs, view of term mortgage
renewals including rates and upfinancing amounts, timing of future payments of obligations, intentions to secure additional financing and potential
financing sources, and vacancy and leasing assumptions, and statements that contain words such as "could", "should", "can", "anticipate", "expect",
"believe", "will", "may" and similar expressions and statements relating to matters that are not historical facts, constitute "forward-looking statements".
These forward-looking statements are presented for the purpose of assisting the Trust's Unitholders and financial analysts in understanding the
Trust's operating environment, and may not be appropriate for other purposes. Such forward-looking statements reflect management's current beliefs
and are based on information currently available to management. However, such forward-looking statements involve significant risks and
uncertainties. A number of factors could cause actual results to differ materially from the results discussed in the forward-looking statements.
Although the forward-looking statements contained in this Presentation are based on what management believes to be reasonable assumptions, the
Trust cannot assure investors that actual results will be consistent with these forward-looking statements. The forward-looking statements contained
herein are expressly qualified in their entirety by this cautionary statement. These forward-looking statements are made as at the date of this
Presentation and the Trust assumes no obligation to update or revise them to reflect new events or circumstances unless otherwise required by
applicable securities legislation.
SMARTCENTRES REIT | Q2 2019 INVESTOR PRESENTATION
2
CONTENTS
▪ Overview Page 4
▪ Intensification & Development Page 6
▪ Featured Initiatives Page 21
▪ Retail Portfolio Page 65
▪ Financial Highlights Page 73
SMARTCENTRES REIT | Q2 2019 INVESTOR PRESENTATION
3
OUR EVOLUTION CONTINUES… 1989-1994 1999 2003 2014 MITCHELL GOLDHAR WALMART FIRST TRANSACTION PENGUIN PICKUP HELPS BRING JOINT VENTURE WITH CALLOWAY REIT CONCEPT IS WALMARTTO CANADA WITH SMARTCENTRES (CWT ASSETS $100M CAD) INTRODUCED (WMT SALES $21B USD) Canada 2015 2016 2018 CALLOWAY REIT SMARTCENTRES SMARTCENTRES FORMS JV PARTNERSHIPS ACQUIRES STRATEGIC FOCUS SMARTCENTRES EXTENDS TO MIXED USE REAL ESTATE INVESTMENT TRUST 4 SMARTCENTRES REIT | Q2 2019 INVESTOR PRESENTATION
ON OUR JOURNEY OF
INFINITE POSSIBILITIES
94 properties on which intensification opportunities have been identified
256 individual development projects (e.g. an apartment, office, seniors’ residence,
self-storage facility, hotel, condominium or townhouses project)
34.4M SF income producing retail portfolio
$9.7B dynamic real estate portfolio value
SMARTCENTRES REIT | Q2 2019 INVESTOR PRESENTATION 5
CONTENTS
▪ Overview Page 4
▪ Intensification & Development Page 6
▪ Featured Initiatives Page 21
▪ Retail Portfolio Page 65
▪ Financial Highlights Page 73
SMARTCENTRES REIT | Q2 2019 INVESTOR PRESENTATION
6
BEST POSITIONED FOR
INTENSIFICATION
BEST PORTFOLIO IN THE COUNTRY
EASY ACCESS FLEXIBLE STRUCTURES
MAJOR INTERSECTIONS ONLY 25% COVERAGE
TRANSIT CONNECTIVITY 2,775 UNBUILT ACRES
STRONG TENANT RELATIONSHIPS
SMARTCENTRES REIT | Q2 2019 INVESTOR PRESENTATION 7
BEST POSITIONED FOR
INTENSIFICATION
DEVELOPMENT DEVELOPMENT THIS TEAM
60M 155 86%
IN OUR DNA TEAM OF DEVELOPED
SF
DEVELOPED IN-HOUSE RESOURCES OF OUR CURRENT
SINCE 1989 FOCUSED ON RETAIL AREA
INTENSIFICATION
PLANNERS / DEVELOPERS • ENGINEERS • GOVERNMENT RELATIONS • LEASING • ENVIRONMENTAL / GEOTECH
SPECIALISTS • CONSTRUCTION • ARCHITECTS • LAWYERS • FINANCE / FINANCIAL ANALYSTS • MARKETING
SMARTCENTRES REIT | Q2 2019 INVESTOR PRESENTATION 8
$9.7B IN REAL ESTATE ASSETS
+
$12.1B IN PLANNED INTENSIFICATION
(REIT SHARE $5.5B)
SMARTCENTRES REIT | Q2 2019 INVESTOR PRESENTATION 9
94 PROPERTIES
IDENTIFIED FOR INTENSIFICATION…
BRITISH
COLUMBIA ALBERTA SASKATCHEWAN MANITOBA ONTARIO QUEBEC ATLANTIC TOTAL
MARKED FOR
INTENSIFICATION
6 3 2 2 61 20 0 94
UNDER REVIEW FOR
INTENSIFICATION 8 4 3 1 34 3 10 63
TOTAL
PROPERTIES 14 7 5 3 95 23 10 157
…AND MORE TO COME10
SMARTCENTRES REIT | Q2 2019 INVESTOR PRESENTATIONEACH INDIVUDUAL PROJECT REPRESENTS
DEVELOPMENT STATUS
94
ONE OF THE FOLLOW:
PROPERTIES RENTAL APARTMENTS (88) SENIORS (45)
256
WITH
CONDOS (46) TOWNHOUSES (14)
OFFICE BUILDINGS (10)
INDIVIDUAL
DEVELOPMENT
PROJECTS
SMARTCENTRES REIT | Q2 2019 INVESTOR PRESENTATION SELF-STORAGE (48) HOTELS (5) 11256 DEVELOPMENT PROJECTS
34 71 151 256
UNDERWAY ACTIVE FUTURE TOTAL
CONSTRUCTION
INITIATION (YEARS) 1 2 3 4 5 6+
33 32 74 139
PLANNING
ENTITLEMENTS(#)
PROJECT SF 1 13,300,000
2 3 14,000,000
4 5 32,000,000 59,300,000
REIT SHARE 6,000,000 6,400,000 15,500,000 27,900,000
POTENTIAL VALUE
CREATION ($) $995,100,000 $667,800,000 $1,783,900,000 $3,446,800,000
REIT SHARE $473,200,000 $199,400,000 $705,100,000 $1,377,700,000
SMARTCENTRES REIT | Q2 2019 INVESTOR PRESENTATION 12VALUE CREATION
$3.0B POTENTIAL
VALUE
CREATION
$3.6B
TO
FROM THE 256
INTENSIFICATION
PROJECTS
REIT SHARE: $1.3B-$1.5B
SMARTCENTRES REIT | Q2 2019 INVESTOR PRESENTATION 13VALUE CREATION EXAMPLE 1900 EGLINTON AVE E 28 ACRES ∙ 380,000 SF SMARTCENTRES REIT | Q2 2019 INVESTOR PRESENTATION 14
VALUE CREATION EXAMPLE 1900 EGLINTON AVE E PLANNING ENTITLEMENTS FOR 5.3 MILLION SF (INCL. 14 TOWERS > 20 STORIES) FULL 20-YEAR BUILD-OUT WOULD YIELD $250M IN POTENTIAL VALUE ABOVE THE CURRENT IFRS VALUE.
VALUE CREATION EXAMPLE
1900 EGLINTON AVE E
PHASE 1: 2 APARTMENTS
POTENTIAL VALUE CREATION: $7 MILLION
ONLY PHASE 1 OF THIS REDEVELOPMENT IS INCLUDED
IN TOTAL PROJECT COUNT (256) & POTENTIAL VALUE CREATION ($3.0B - $3.6B) CALCULATIONS.INDIVIDUAL
DEVELOPMENT
PROJECTS
SELF-STORAGE (48)
OFFICE BUILDINGS (10)
RECURRING RECURRING TOTAL
NON-RETAIL NON- PROJECT
(SOSHAL) RECURRING COUNT
196 + 60 = 256 APARTMENTS LIVING (88)
SENIORS (45)
(77%) (23%) (100%)
HOTELS (5)
CONDOS (46) TOWNHOUSES (14)
SMARTCENTRES REIT | Q2 2019 INVESTOR PRESENTATION 17MAJOR MIXED-USE
REAL ESTATE INITIATIVES Estimated Costs ($M) Estimated Gain on Final Sale
GLA Completion SRU 100%
Site Project Type ('000sf) / Year % Share Share SRU Share Yield Profit % SRU Share Timing
Units
1. VMC (Office Towers) a. KPMG (T#1) Office 360sf 2016 50% $180 $90.0 5.7% — — —
b. PwC-YMCA (T#2) Office 105sf 2019 50% $65 $32.5 4.5%-5.5% — — —
c. Office (T#3) Office 600sf 2024 50% $375 $187.5 4.8%-5.5% — — —
d. Office (T#4) Office 300sf 2026 50% $210 $105.0 4.8%-5.5% — — —
(1)
2. Montreal Premium Outlets Phase II (JV) Retail 140sf 2022-2023 50% $56 $28.0 9%-10% — — —
(Simon Property Group)
3. New Premium Outlets Premium (JV) Retail 360sf 2022 50% $136 $68.0 8.0%-8.5% — — —
(Simon Property Group)
(2)
4. Laval Centre Jadco (2 Bldgs) Apartments 338 Units 2020-2022 50% $82 $41.0 5.3%-5.8% — — —
5. VMC (Condos) CentreCourt Transit City 1 551 Units 2020-2021 25% $181 $45.3 N/A 25%-30% 25% 2020-2021
CentreCourt Transit City 2 559 Units 2020-2021 25% $189 $47.3 N/A 25%-30% 25% 2020-2021
CentreCourt Transit City 3 631 Units 2021 25% $190 $47.5 N/A 20%-25% 25% 2021
CentreCourt Transit City 4 498 Units 2023 25% $210 $52.5 N/A 20%-25% 25% 2023
CentreCourt Transit City 5 528 Units 2023 25% $225 $56.3 N/A 20%-25% 25% 2023
(2)
6. VMC (Apartments) VMC Rental Apartments Apartments 451 Units 2023-2024 50% $220 $110.0 4.2%-4.8% — — —
7. Vaughan NW Fieldgate Low/Mid Rise 175 Units 2022-2023 50% $100-$120 $50.0-$60.0 N/A 10%-15% 50% 2022-2023
Residential
(2)
8. Ottawa Laurentian Selection Group (2 Bldgs) Apartments/ 410 Units 2022 50% $150 $75.0 6.0%-7.0% — — —
Retirement
Residence
(2)
9. Multiple Locations Self-Storage (JV) Self-Storage 500sf built 2019-2025 50% $60M per $30M per 7.0%-8.5% — — —
(6 Approved Projects – (SmartStop) (4 to 5 new per year in year in each year in each
Toronto (Leaside), Oshawa, facilities each each of of years 1-5 of years 1-5
Brampton (2 projects), year) years 1-5
Vaughan, Toronto
(Scarborough))
SMARTCENTRES REIT | Q2 2019 INVESTOR PRESENTATION 18MAJOR MIXED-USE
REAL ESTATE INITIATIVES
Estimated Costs ($M) Estimated Gain on Final Sale
GLA Completion SRU 100%
Site Project Type ('000sf) / Year % Share Share SRU Share Yield Profit % SRU Share Timing
Units
10. StudioCentre (Toronto) SRU-Penguin JV Mixed-Use 150sf 2022-2023 50% $53 $26.5 6.0%-7.0% — — —
(Office, Studio,
Hotel)
(2)
11. Pointe-Claire (Apartments) Rental Apartments Apartments 300 Units 2022-2023 50% $115 $57.5 4.5%-5.0% — — —
(2 Bldgs)
12. Pointe-Claire (Condo) Condo Condo 200 Units 2024 50% $55 $27.4 N/A 10%-15% 50% 2024
(2)
13. Multiple Locations Retirement Living Retirement 600sf built 2022-2025 50% $100M per $50M per 6.0%-7.5% — — —
(3 Approved Projects – Residences Residences & per year in year per site year per site
Vaughan (2 projects), (JV) (Revera) Seniors each of in each of in each of
Oakville) Apartments years 1-5 years 1-5 years 1-5
(3 to 5 new
facilities each
year)
Notes:
(1) The Phase II expansion for the Montreal Premium Outlets is included in the future development pipeline as Developments.
(2) Stabilization is estimated to be 1 to 3 years after completion.
(3) Estimated Transactional FFO Gains on Sale related to parcel sales of land into Joint Ventures estimated at 1%-2% of annual FFO at SmartCentres' ownership share.
In addition to the projects set out in the table above (with the exception of the projects listed in Note 1), SmartCentres' pipeline also includes approximately 3.3 million square feet of future developments. Also
in addition to the above, SmartCentres has a further mixed-use development pipeline estimated at 4.5 million square feet in projects that are underway or active. Further, SmartCentres will initiate activities in
the short-term to work towards development of a further estimated 12.5 million to 15 million square feet in mixed-use initiatives that will be completed in the longer-term.
SMARTCENTRES REIT | Q2 2019 INVESTOR PRESENTATION 19RECENT EVENTS
ANNOUNCEMENTS
ANNOUNCED SOON TO BE
EXPECTED BY
SEPTEMBER 12, 2019 ANNOUNCED
Q4 REPORTING
NEW APARTMENT JV
+2
2
PARTNER ON NEW NEW JOINT VENTURE
PROPERTY JOINT VENTURE PROJECTS
+5
SENIORS’ PROJECTS
7.8 ACRE
GTA
IN JOINT VENTURE
BARRIE LAKEFRONT
+4
PROJECTS
APARTMENT THE
COMMUNITY APARTMENT &
CONDO PROJECTS
SMARTCENTRES REIT | Q2 2019 INVESTOR PRESENTATION 20CONTENTS
▪ Overview Page 4
▪ Intensification & Development Page 6
▪ Featured Initiatives Page 21
▪ Retail Portfolio Page 65
▪ Financial Highlights Page 73
SMARTCENTRES REIT | Q2 2019 INVESTOR PRESENTATION
21FEATURED INITIATIVES
1. VMC (VAUGHAN METROPOLITAN CENTRE), TORONTO | 100 ACRES – Page 24
2. VAUGHAN NORTH WEST, TORONTO | 42 ACRES – Page 37
3. OAKVILLE NORTH, TORONTO | 52 ACRES – Page 40
4. OAKVILLE SOUTH, TORONTO | 21 ACRES – Page 43
5. WESTSIDE MALL, TORONTO | 12 ACRES – Page 46
6.
7.
BRADFORD, TORONTO | 57 ACRES – Page 50
PICKERING, TORONTO | 48 ACRES - Page 53
404.5 / 3,569
ACRES TOTAL ACREAGE
8. CHILLIWACK, VANCOUVER | 15.5 ACRES – Page 56
9. LAVAL CENTRE, MONTREAL | 35 ACRES – Page 59
10. POINTE CLAIRE, MONTREAL | 22 ACRES – Page 63 221. VMC
VAUGHAN METROPOLITAN
CENTRE, TORONTO
▪ Long term build (10 – 15 years)
▪ A 50:50 JV between SmartCentres and Penguin
Properties. Mitchell Goldhar intimately involved in
all aspects of the project
▪ Potential density of 19M sf. of residential, office
and retail development for the whole 100-acre site
▪ At its 50% ownership, SmartCentres lands
(approximately 25 acres) represent 4.5M – 5.5M
sf. of potential development
▪ Transit infrastructure, including TTC subway and
VIVA bus opened in December 2017, and York
regional bus station to open Fall 2019
SMARTCENTRES REIT | Q2 2019 INVESTOR PRESENTATION 23YONGE & BLOOR
PRE VS POST SUBWAY
1940s
1950s
1960s
SMARTCENTRES REIT | Q2 2019 INVESTOR PRESENTATION 24100 ACRES 501,254 SF 19 MILLION SF OF POTENTIAL SMARTCENTRES REIT | Q2 2019 INVESTOR PRESENTATION 25
SETTING THE
STAGE…
26…FOR A NEW CITY CENTRE SMARTCENTRES REIT | Q2 2019 INVESTOR PRESENTATION 27
VMC VISION…
SMARTCENTRES REIT | Q2 2019 INVESTOR PRESENTATION 28
28…BECOMING REALITY SMARTCENTRES REIT | Q2 2019 INVESTOR PRESENTATION 29
KPMG TOWER
365,000 SF
RENDERING REALITY
SMARTCENTRES REIT | Q2 2019 INVESTOR PRESENTATION
100% LEASED 30PWC/YMCA TOWER
PWC / YMCA *
220,000 SF
*
100% LEASED
RENDERING REALITY
SMARTCENTRES REIT | Q2 2019 INVESTOR PRESENTATION 31
*Pending certificationFUTURE
321, 2 & 3
RENDERING REALITY SOLD OUT
TOWER 1, 2 & 3
RETURN MILLION IN PROFIT
PROFITS EXCEED
EXPECTATIONS >35% ON COST +$30 OVER ORIGINAL APPROVALTHE EAST BLOCK
RENTAL
RESIDENTIAL
&
TRANSIT CITY
4&5
SOLD OUT
CONSTRUCTION BEGINS FALL 2019
SMARTCENTRES REIT | Q2 2019 INVESTOR PRESENTATION 34A NEW CITY CENTRE…& BEYOND
170+ ACRES ∙ 26+ MILLION SF OF POTENTIAL
(REIT SHARE 10.5 MILLION SF)
HWY 407
SMARTCENTRES REIT | Q2 2019 INVESTOR PRESENTATION2. VAUGHAN
NORTHWEST,
TORONTO
▪ Existing Walmart anchored shopping centre at
Major Mackenzie Drive and Weston Road in
Vaughan
▪ JV with Fieldgate on 16-acre site for 230-300
freehold townhomes. Construction to commence
in 2020; possession in 2021 and 2022
▪ JV with SmartStop for a self-storage facility
▪ JV with Revera for two towers – seniors
apartments and retirement residences
▪ In the process of obtaining approvals on the
remaining 6 acres to add mixed-use density
including 800,000 sf. of seniors housing,
condominium and rental accommodation
SMARTCENTRES REIT | Q2 2019 INVESTOR PRESENTATION 36VAUGHAN NW 42 ACRES ∙ 177,906 SF SMARTCENTRES REIT | Q2 2019 INVESTOR PRESENTATION 37
VAUGHAN NW 1.7 MILLION SF OF POTENTIAL SMARTCENTRES REIT | Q2 2019 INVESTOR PRESENTATION 38
3. OAKVILLE NORTH
(DUNDAS & TRAFALGAR),
TORONTO
▪ An existing 461,000 sf. shopping centre on 52 acres at
Highway 5 and Trafalgar Road in Oakville. Anchored
by a 195,000 sf. Walmart Supercentre and a 120,000
sf. Real Canadian Superstore
▪ Located within the Uptown Core area in the Town of
Oakville, intended to provide a mix of uses, with
uncapped densities and permissions allowing for
residential, office, retail and commercial uses
▪ The Town recently initiated an Official Plan review for
the Uptown Core. SmartCentres is seeking increased
height permissions through this process; Targeting up
to 30 stories
▪ The master plan demonstrates an average density of
4.4 FSI and over 7 million sf. of residential, retail and
mixed use
SMARTCENTRES REIT | Q2 2019 INVESTOR PRESENTATION 39OAKVILLE NORTH 52 ACRES ∙ 461,226 SF SMARTCENTRES REIT | Q2 2019 INVESTOR PRESENTATION 40
OAKVILLE NORTH PLANNING ENTITLEMENTS FOR 5.5 MILLION SF SMARTCENTRES REIT | Q2 2019 INVESTOR PRESENTATION 41
4. OAKVILLE SOUTH,
TORONTO
We have initiated discussions with
municipalities, tenants and potential partners
to evolve this site into:
▪ A 180,000 sf. shopping centre, anchored
by strong retailers such as Metro food
store, Shoppers Drug Mart, LCBO,
Winners and Goodlife Fitness
▪ A JV for a Revera seniors’ residence, and
▪ A townhouse development
SMARTCENTRES REIT | Q2 2019 INVESTOR PRESENTATION 42OAKVILLE SOUTH 21 ACRES ∙ 330,000 SF SMARTCENTRES REIT | Q2 2019 INVESTOR PRESENTATION 43
OAKVILLE SOUTH 430,000 SF OF POTENTIAL SMARTCENTRES REIT | Q2 2019 INVESTOR PRESENTATION 44
5. WESTSIDE MALL,
TORONTO
▪ 12-acre urban redevelopment site
▪ Currently a 140,000 sf shopping centre
▪ New Eglinton Crosstown Light Rapid Transit
(LRT) station to open on site
▪ New links to existing GO network will
connect new East:West to existing
North:South transit framework
▪ Long-term project to add principally new
residential development, with select retail
SMARTCENTRES REIT | Q2 2019 INVESTOR PRESENTATION 45SMARTCENTRES REIT | Q2 2019 INVESTOR PRESENTATION 46
WESTSIDE MALL 12 ACRES ∙ 144,405 SF SMARTCENTRES REIT | Q2 2019 INVESTOR PRESENTATION 47
WESTSIDE MALL PLANNING ENTITLEMENTS FOR 3 MILLION SF SMARTCENTRES REIT | Q2 2019 INVESTOR PRESENTATION 48
6. BRADFORD,
TORONTO
▪ 57 acre Walmart-anchored site in the
growing community of Bradford
▪ Currently a 280,000 sf shopping centre.
▪ Preliminary intensification plans include a
hotel, a seniors residence, town homes,
and mid-rise residential apartments and/or
condominiums
▪ Early consultations are underway for
municipal approval
SMARTCENTRES REIT | Q2 2019 INVESTOR PRESENTATION 49BRADFORD 57 ACRES ∙ 278,860 SF SMARTCENTRES REIT | Q2 2019 INVESTOR PRESENTATION 50
BRADFORD 565,000 SF OF POTENTIAL SMARTCENTRES REIT | Q2 2019 INVESTOR PRESENTATION 51
7. PICKERING,
TORONTO
▪ 48 acre Walmart-anchored site in the rapidly
growing City of Pickering
▪ Adjacent to Hwy 401; 5 minutes from the
Pickering Go Station and Durham Live
▪ Currently a 546,000 sf shopping centre;
Potential for 7.8 million sf.
▪ Preliminary intensification plans include
high-rise condominiums, townhouses, a
seniors’ residence, residential apartments
and a hotel
▪ Early consultations are underway for
municipal approval
SMARTCENTRES REIT | Q2 2019 INVESTOR PRESENTATION 52PICKERING 48 ACRES ∙ 546,000 SF SMARTCENTRES REIT | Q2 2019 INVESTOR PRESENTATION 53
PICKERING 8 MILLION SF OF POTENTIAL SMARTCENTRES REIT | Q2 2019 INVESTOR PRESENTATION 54
8. CHILLIWACK,
VANCOUVER
▪ Official Community Plan and Rezoning
Approval by Council Sept. 2019
▪ Proposal included demolition of the current
enclosed mall to accommodate:
o 162,798 sf of Commercial
o 2.63 acres of Residential
o 3 6-storey residential towers with 200+
units
o Structured at grade parking
SMARTCENTRES REIT | Q2 2019 INVESTOR PRESENTATION 55CHILLIWACK 15.5 ACRES ∙ 124,865 SF SMARTCENTRES REIT | Q2 2019 INVESTOR PRESENTATION 56
CHILLIWACK 325,000 SF OF POTENTIAL SMARTCENTRES REIT | Q2 2019 INVESTOR PRESENTATION 57
9. LAVAL CENTRE,
MONTREAL
▪ Lands designated by City as “Centre-Ville”,
due to highway and transit access
▪ Anchored by a 160,000 square foot
Walmart Supercentre
▪ Parcels of land sold to others for a seniors’
residence, hotel and an office
development
▪ JV with Jadco for Equinoxe Daniel-
Johnson; 338 unit rental residential towers
▪ Remaining land to be developed for
mixed-use
SMARTCENTRES REIT | Q2 2019 INVESTOR PRESENTATION 58LAVAL CENTRE 35 ACRES ∙ 159,779 SF SMARTCENTRES REIT | Q2 2019 INVESTOR PRESENTATION 59
LAVAL CENTRE 4.5 MILLION SF OF POTENTIAL SMARTCENTRES REIT | Q2 2019 INVESTOR PRESENTATION 60
LAVAL CENTRE
RENTAL RESIDENTIAL APARTMENTS
RENDERING REALITY
SMARTCENTRES REIT | Q2 2019 INVESTOR PRESENTATION 61
DANIEL-JOHNSON10. POINTE-CLAIRE,
MONTREAL
▪ Walmart and Home Depot anchored site in
West Montreal purchased in 2016
▪ Very well-located site – transit (new light rail
transit line to downtown) and road access
▪ Master planning activities moving forward with
strong support from council
▪ Secured zoning for a multitude of uses
including residential, seniors housing and
office on the perimeter of the property
▪ First rental apartment building expected to be
completed in 2022
▪ Significant NAV accretion potential from
entitlements achieved to date
SMARTCENTRES REIT | Q2 2019 INVESTOR PRESENTATION 62POINTE-CLAIRE 22 ACRES ∙ 384,915 SF SMARTCENTRES REIT | Q2 2019 INVESTOR PRESENTATION 63
POINTE-CLAIRE 2 MILLION SF OF POTENTIAL SMARTCENTRES REIT | Q2 2019 INVESTOR PRESENTATION 64
CONTENTS
▪ Overview Page 4
▪ Intensification & Development Page 6
▪ Featured Initiatives Page 21
▪ Retail Portfolio Page 65
▪ Financial Highlights Page 73
SMARTCENTRES REIT | Q2 2019 INVESTOR PRESENTATION
65OUR RETAIL IS… SMARTCENTRES REIT | Q2 2019 INVESTOR PRESENTATION 66
…STILL ROCKIN’
Toronto Premium Outlets
SMARTCENTRES REIT | Q2 2019 INVESTOR PRESENTATION 6734.4 MILLION SF PORTFOLIO
AVERAGE PROPERTY AGE: 15 YEARS
GROCERY/
CENTRES NOI OCCUPANCY TENANT PHARMA
# % % % %
G-VECTOM 98 73 97.5 71.2 100
PRIMARY
32 16 98.4 77.4 100
SECONDARY
27 11 98.9 86.6 100
TOTAL 157 100% 98% 74% 100%
SMARTCENTRES REIT | Q2 2019 INVESTOR PRESENTATION 68HIGH-QUALITY
TENANTS…
TOP 6 TENANTS ANNUAL RENT
$200,400,000
$37,200,000
RENTAL INCOME
$33,000,000 FROM TOP 6
TENANTS
$329,200,000
$21,800,000
$18,600,000
75% 42%
TOP 25 TOP 6
$18,200,000
SMARTCENTRES REIT | Q2 2019 INVESTOR PRESENTATION 69STABLE RETAIL
INCOME BASE….
LEASE MATURITY BY AREA
(in millions of square feet)
Average roll of 2.3M sf. annually (6.9% of total GLA per year)
1.6 1.8
2.3
1.6
1.8
0.9 0.6
0.8 0.6
0.7
0.8 0.4
0.8 0.7
1.9 2.0 0.6
1.4 1.4 0.2 0.2
1.1 0.5 1.2
0.5 0.7 0.6 0.7
0.3 0.3
2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 Month-to- Vacant
month
Walmart Other Anchor Non-anchor
▪ Average lease term of 5.2 years ▪ Average remaining lease term excluding Walmart is 4.5 years
▪ Average remaining lease term of 6.1 years for Walmart, ▪ 2,861,648 sf. or 80.0% of 2019 lease maturities have been
with multiple renewal options of up to 80 years renewed or near completion
▪ Average “same property” NOI growth is 1.0% to 1.5% p.a.
SMARTCENTRES REIT | Q2 2019 INVESTOR PRESENTATION 70…& CONTINUED
EXPANSION
51%
REPLACEMENT
49% NEW
SMARTCENTRES REIT | Q2 2019 INVESTOR PRESENTATION 71ONGOING SERVICES INNOVATION…
5G CELL TOWERS
EV CHARGING STATIONS
DIGITAL SIGNAGE
PENGUIN PICKUP
… NEW REVENUE SOURCES
SMARTCENTRES REIT | Q2 2019 INVESTOR PRESENTATION 72CONTENTS
▪ Overview Page 4
▪ Intensification & Development Page 6
▪ Featured Initiatives Page 21
▪ Retail Portfolio Page 65
▪ Financial Highlights Page 73
SMARTCENTRES REIT | Q2 2019 INVESTOR PRESENTATION
73TOTAL RETURNS TO UNIT HOLDERS
CONTINUE TO GROW
$1,200
15.0% AVERAGE ANNUAL RETURN SINCE IPO
(as of September 3, 2019) $1,057.49
$1,000
$800
$600 $580.63
$400 $407.15
$200
$0
SmartCentres TSX Capped REIT TSX Composite
SMARTCENTRES REIT | Q2 2019 INVESTOR PRESENTATION 74CONTINUED GROWTH IN RENTAL
REVENUE & FFO PER UNIT (AS OF DECEMBER 31, 2018)
RENTAL REVENUE FFO
(in millions of $) ($ per unit)
6.8% CAGR 4.0% CAGR
since 2014 since 2014
2.28
790 2.17 2.20
747 2.10
728
1.95
670
608
2014 2015 2016 2017 2018 2014 2015 2016* 2017 2018
* Excludes $0.06 per unit of non-recurring income
SMARTCENTRES REIT | Q2 2019 INVESTOR PRESENTATION 75STABLE CASHFLOW
84.7% 81.1% 83.1% 81.8% 83.0%
PAYOUT RATIO*
2014 2015 2016 2017 2018
in thousands of dollars, except per Unit information)
FFO per Unit(1) 1.95 2.10 2.17(3) 2.20 2.28
AFFO/ACFO per Unit(2) 1.84 1.99 2.00(3) 2.10 2.13
Distributions per Unit 1.56 1.61 1.66 1.71 1.76
DRIP participation rate 15.4% 19.1% 20.9% 22.0% 23.4%
Distributions reinvested through DRIP 28,814 39,137 46,212 50,719 56,656
Surplus of AFFO/ACFO over distributions paid(2) 68,390 95,117 109,333 111,803 115,384
▪ Distributions fully funded from operating cashflow
▪ Annual distribution increases announced in each of 2014, 2015, 2016, 2017, 2018, and 2019 of $0.05 per unit. Current annual
distribution per unit is $1.80 and will increase to $1.85 effective October 2019
* 2014-2015 (AFFO) and 2016-2018 (ACFO)
(1) FFO with one-time adjustment and before Transactional FFO
(2) AFFO/ACFO with one-time adjustment and Transactional FFO
(3) Excludes $0.06 per unit of non-recurring income
SMARTCENTRES REIT | Q2 2019 INVESTOR PRESENTATION 76TOTAL ASSETS VALUED AT $9.7B
TOTAL ASSETS
(in billions of $)
31.3% CAGR 9.4 9.5 9.7
since 2002
8.5 8.7
7.1 7.1
6.5
6.0
4.2 4.2 4.4
3.6 3.9
2.6
1.0
0.1 0.2
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Q2
2019
SMARTCENTRES REIT | Q2 2019 INVESTOR PRESENTATION 77DEBT / MATURITY LEVERAGE
DEBT MATURITY
(in millions of $)
400 371
350
320
300
300 275
250 250 250
203 200
200 180
160
140
119 100
74 87
100 45
3
0
2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 BEYOND
Secured Debt Unsecured Bank Loans Unsecured Debentures
▪ Interest costs on refinancing available with 10 year unsecured rates around 4% and secured rates below that
▪ Interest Coverage: 3.3X (Target: 2.5X – 3.0X)
▪ Debt to adjusted EBITDA: 7.8X (Target: 8.0X – 8.5X)
▪ Unencumbered pool: $4.5B (2.05X unsecured coverage) (Target: 1.3X unsecured coverage)
▪ Debt to GBV: 48.5% (Target: 50% - 60% long-term trend to continue to de-lever)
▪ Debt to Aggregate Assets: 41.8%
▪ Weighted Avg Interest Rate (Secured Debt): 4.05%
▪ Weighted Avg Term to Maturity (Secured Debt): 4.4 years
▪ DBRS rating of BBB with a Stable trend
SMARTCENTRES REIT | Q2 2019 INVESTOR PRESENTATION 78LEVERAGE PROFILE
Jun. 30 Dec. 31 Dec. 31 Dec. 31
2019 2018 2017 2016
Debt to Aggregate Assets 41.8% 43.9% 45.4%(1) 44.3%
Ratio of Secured Debt to Unsecured Debt 0.9X 1.1X 1.4X 2.0X
Unencumbered Assets $4.5B $4.3B $3.4B $2.7B
Debt to Adjusted EBITDA 7.8X 8.2X 8.4X 8.4X
Interest Coverage 3.3X 3.3X 3.1X 3.1X
Liquidity: Cash Resources $582M $399M $646M $355M
Weighted Average Interest Rate (Total Debt) 3.69% 3.73% 3.69% 3.72%
Weighted Average Term to Maturity (Total Debt) 4.7 yrs 4.9 yrs 5.1 yrs 5.2 yrs
(1) Leverage increased during 2017 in support of the OneREIT acquisition
SMARTCENTRES REIT | Q2 2019 INVESTOR PRESENTATION 79CONSERVATIVE CAPITAL STRUCTURE
Secured Mortgage Financing
18.7% Amount - $1.9B
Weighted Avg Interest Rate – 4.05%
$9.6B
Weighted Avg Term to Maturity – 4.4 years Total Enterprise Value
Unsecured Debentures
Amount - $1.9B Focused on:
19.7%
Weighted Avg Interest Rate – 3.28%
Weighted Avg Term to Maturity – 4.3 years
▪ Lowering interest rates on renewals
Debt on Equity Accounted Investments
Amount - $141M ▪ Maintaining maximum flexibility
1.5%
Weighted Avg Interest Rate – 3.92%
Weighted Avg Term to Maturity – 16.6 years ▪ Reducing leverage over time
Operating Lines / Bank Loans / Outstanding LC’s
Operating Line – $23M
▪ Rebalancing unsecured and secured debt
4.2% ratios
Bank Loans – $320M
Letters of Credit – $62M
Equity (as at September 3, 2019)
Units Outstanding – 170M
55.9%
Share Price – $31.79
Market Capitalization – $5.4B
SMARTCENTRES REIT | Q2 2019 INVESTOR PRESENTATION 80You can also read
