Cominar Real Estate Investment Trust Quarterly Presentation

Transcription

1 Cominar Real Estate Investment Trust Quarterly Presentation Quarter Ended September 30, 2018 Conference Call November 9, 2018

2 Forward-looking statements P 2 This presentation may contain forward-looking statements with respect to Cominar and its operations, strategy, financial performance and financial condition. The actual results and performance of Cominar discussed herein could differ materially from those expressed or implied by such statements. Such statements are qualified in their entirety by the inherent risks and uncertainties surrounding future expectations. Some important factors that could cause actual results to differ materially from expectations include, among other things, general economic and market factors, competition, changes in government regulation and the factors described under Risk Factors in the Annual Information Form of Cominar. The cautionary statements qualify all forward-looking statements attributable to Cominar and persons acting on its behalf. Unless other-wise stated, all forward-looking statements speak only as of the date of this presentation. Cominar does not assume any obligation to update the forward-looking statements except as required by applicable laws. Net operating income, adjusted net income, recurring funds from operations, recurring adjusted funds from operations, recurring adjusted cash flow from operations and proportionate share in joint ventures adjustments are non-ifrs measures and do not have a standardized meaning. Therefore, they may differ from similar measures presented by other entities and, consequently, may not be comparable to similar measures presented by such other entities. For a reconciliation with the closest IFRS measures, please see our MD&A for the quarter ended September 30, 2018.

3 Highlights Q P 3 Growth in same property net operating income (Q1-2018: 0.2%, Q2-2018: 0.8%, Q3-2018: 1.7%) Growth in the average net rent of renewed leases Increase in the committed occupancy rate from 92.2 % to Growth in the retention rate of expiring leases from 59.2 % to Committed leases commencing in the coming quarters Decrease in payout ratio from % to 1.7 % 0.9 % 93.3 % 64.6 % 1.6 M sq. ft %

4 Q Overview P 4 Cominar Total assets $6.9B Office 97 properties 11.8 M sq. ft. Retail 136 properties 10.7 M sq. ft. Industrial 196 properties 15.7 M sq. ft. 2.1% Growth in same property net operating income (0.4%) 4.4% Growth in same property net operating income Growth in same property net operating income $12.1 M $5.6 M $4.7 M Annualized net operating income of signed leases not yet started Annualized net operating income of signed leases not yet started Annualized net operating income of signed leases not yet started Positive growth in same property net operating income for a third quarter in a row Q3 1.7%

5 Leasing activities P 5 September 30, 2018 December 31, 2017 Occupancy rate 93.3 % 92.6 % In-place occupancy rate 87.3% 87.9% Committed leases commencing in the five coming quarters (sq. ft. / incremental annualized NOI) 1.6 M sq. ft. 1 $22.4 M 1.2 M sq. ft. $20.4 M 1 55% will come into force by the end of Nine-month period ended September Retention rate of expiring leases 64.6 % 59.2 % New leases 2.7M sq. ft. 2.8 M sq. ft. Leasable area maturing during the year that was renewed or subject to a new lease 102.3% 93.5 %

6 Leasing activities P 6 Occupancy rate September 30, 2018 Operating segment Committed occupancy rate In-place occupancy rate Office 90.8% 85.5% Retail 93.3% 84.1% Industrial and flex 95.2% 90.9% Total 93.3% 87.3% September 30, 2018 Geographic market Committed occupancy rate In-place occupancy rate Montreal 92.9% 87.3% Québec City 94.6% 89.6% Ottawa 91.5% 77.8% Total 93.3% 87.3% September 30, 2018 MONTREAL QUÉBEC CITY OTTAWA TOTAL Operating segment Committed In-place Committed In-place Committed In-place Committed In-place Office 88.0% 83.5% 96.7% 93.3% 92.5% 82.0% 90.8% 85.5% Retail 94.1% 85.4% 92.8% 84.9% 82.9% 54.5% 93.3% 84.1% Industrial and flex 95.3% 90.5% 95.0% 92.5% N/A N/A 95.2% 90.9% Total 92.9% 87.3% 94.6% 89.6% 91.5% 77.8% 93.3% 87.3%

7 Leasing activities P 7 Occupancy rate % September 30, % 0.6 M sq.ft % 93.3 % 0.3 M sq.ft % 0.8 M sq.ft % 0.7M sq.ft % 93.3% 1.6 M sq.ft % 0.8 M sq.ft. 70 OFFICE RETAIL INDUSTRIAL AND FLEX TOTAL Committed In-place Signed leases that will begin in the next few quarters Spaces under redevelopment (mainly Sears)

8 Leasing activities P 8 Growth in the average net rent of renewed leases September 30, 2018 December 31, 2017 Office (0.3%) (0.2%) Retail 0.2% (0.7%) Industrial and flex 4.2% 4.7% Total 0.9% 0.6% Growth in the average net rent of renewed leases Geographic market Renewed area 1.9% Montreal 4.8% Québec City (7.7%) Ottawa 6% 4% 2% 0-2% -4% 2.7 M sq. ft. Montreal 1.1 M sq. ft. Québec City 0.7 M sq. ft. Ottawa -6% -8%

9 Target update P 9 Area (square feet) Location Leasable area Signed leases Common area Total Place Longueuil, Longueuil 79,400 73,500 5,900 79,400 Centre Les Rivières, Trois-Rivières 83,100 76,900 6,200 83,100 Carrefour St-Georges, St-Georges 84,900 84,900 84,900 Carrefour Rimouski, Rimouski 93,000 93,000 93,000 Alexis Nihon, Montréal 107, , ,600 Centre Laval, Laval 132, ,100 2, ,800 Total 580, ,000 14, , % 97.5% 2.5% 100% St. John s 107,400 Building sold to Slate within the 95 non-core properties sale in Q In the long-term, rental revenue related to new signed leases totalling 566,000 square feet will represent a 38% increase from rental revenue previously received from Target. Development costs for the space vacated by Target will be approximately $86/sq. ft. while they were initially estimated to be approximately $100/sq. ft.

10 Sears update P 10 Area (square feet) Location Boul. Pierre-Bertrand Québec (Industrial segment) Quartier Laval Laval Carrefour Saint-Georges Saint-Georges Galeries Rive Nord Repentigny Galeries de Hull Gatineau Leasable area Signed leases Area in advanced discussions Area in preliminary discussions Available area Common area planned 23,947 23,947 43,147 43,147 54,221 21,077 18,500 10,103 4, ,471 57,669 26,743 29,762 11, ,040 39,513 27,038 45,683 15,806 Centre Les Rivières Trois-Rivières 1 144, ,776 37,776 61,877 18,969 Mail Champlain Brossard 153,600 42,500 95,086 16,014 Total 672,824 88, , , ,511 66, % 13% 21% 20% 36% 10% 1 Shadow tenant for which Cominar acquired the building during the second quarter of 2018.

11 Investment properties held for sale P 11 Adresse Leasable area sq. ft. Operating segment Area Stage Décarie Blvd., Montréal QC 35,000 Office Montreal 455 Fénelon Blvd., Dorval QC 93,000 Office Montreal PSA signed subject to due diligence and other customary closing conditions PSA signed subject to due diligence and other customary closing conditions 1199 St-George Blvd., Moncton NB 60,000 Office Atlantic Provinces In the market 950 Jutras Blvd. East, Victoriaville QC 4,000 Retail Québec City PSA in negotiation 736 King Street East, Sherbrooke QC 4,000 Retail Montreal PSA in negotiation 3005 King Street West, Sherbrooke QC 6,000 Retail Montreal PSA in negotiation 2400 Trans-Canada Hwy Pointe-Claire QC 121,000 Industrial and flex Montreal PSA signed subject to due diligence and other customary closing conditions Total 323,000

12 Development projects P 12 Îlot Mendel (Ikea site) Retail project to be developed around the new IKEA store (340,000 sq. ft.) which opened in August 2018 Infrastructure preparation work essentially completed 14 retail buildings - approximatively 500,000 sq. ft. Décathlon 57,000 sq. ft. expected opening in fall 2019 Additional 116,000 sq. ft. under discussion $52M Investment as at September 30, 2018 To be served by new public transit network (Tramway) (as announced by the competent authorities) Additional densification potential (subject to zoning) 75,000 sq. ft. to 100,000 sq. ft. of office space residential 250,000 sq. ft. of industrial space (land adjacent to the retail project)

13 Development projects P 13 Potential development and redevelopment opportunities around public transit MONTREAL REM / METRO QUÉBEC CITY TRAMWAY / TRAMBUS OTTAWA LRT 34 properties 7.7M sq. ft. 32 properties 3.6M sq. ft. 6 properties 1M sq. ft. REM 19 properties 4.7M sq. ft. Gare centrale de Montréal Mail Champlain Ville Saint-Laurent cluster industrial Pointe-Claire properties Ilot Mendel 3000 boulevard Laurier (land) 150 boul. René-Lévesque Est (redevelopment opportunity) 979 de Bourgogne Carrefour Charlesbourg 400 Cooper Street, Ottawa 110 O Connor Street, Ottawa Queen Street, Ottawa Galeries de Hull

14 Results P 14 (in $M, except per unit amounts) Quarter Year-to-date (nine months) Periods ended September % % Operating revenues Financial statements (15.4) (11.1) Operating revenues Cominar s proportionate share (14.9) (10.4) Net operating income 2 Financial statements (17.4) (13.6) Net operating income 2 Cominar s proportionate share (16.7) (12.8) Net operating income 2 Same property net operating income Net income (25.5) Adjusted net income (18.9) (16.6) Recurring funds from operations (19.3) (16.8) per unit (FD) (17.1) (16.3) Recurring adjusted funds from operations (25.6) (24.1) per unit (FD) (23.3) (23.6) AFFO payout ratio 78.3% 104.2% 89.7% 117.7% Distributions per unit (43.6) (42.4) (42.7) (41.8) 1 Results for periods ended September 30, 2018 have been impacted by the sale of 95 non-core properties to Slate in the first quarter of Non-IFRS financial measure. 3 Fully diluted.

15 Net operating income P 15 Net operating income 1 Quarter Year-to-date (nine months) Periods ended September ($000) 2017 ($000) % 2018 ($000) 2017 ($000) % Same property portfolio Financial statements 90,651 89, , , Same property portfolio Joint ventures 2,504 2, ,041 5, Same property portfolio 2 Cominar s proportionate share 1 93,155 91, , , Acquisitions, developments and dispositions Financial statements ,617 (98.4) 14,466 59,575 (75.7) Acquisitions and developments Joint ventures 67 (1) 54 (3) Net operating income Cominar s proportionate share 1 93, ,247 (16.7) 288, ,932 (12.8) Same property net operating income 2 Periods ended September 30 Operating segment 2018 ($000) Quarter Year-to-date (nine months) 2017 ($000) % 2018 ($000) 2017 ($000) Office 36,008 35, , , Retail 34,905 35,052 (0.4) 101, ,116 (3.9) Industrial and flex 22,242 21, ,309 62, Same property net operating income Cominar s proportionate share 1 93,155 91, , , % 1 Non-IFRS financial measure. 2 The same property portfolio includes the properties owned by Cominar as at December 31, 2016, except for the properties sold in 2017 and 2018, but does not include the results of properties acquired and those under development in 2017 and 2018.

16 Same property net operating income P 16 Positive organic growth three quarters in a row % % 5.8% OFFICE 2.1% (4.3%) 5.2% 5.4% 4.4% 0.8% 0.2% (0.4%) (6.9%) RETAIL INDUSTRIAL GLOBAL 1.7% Growth in same property net operating income Q Growth in same property net operating income Q Growth in same property net operating income Q3-2018

17 Financing activities P 17 Debt September 30, 2018 ($000) Weighted average contractual rate Residual weighted average term Mortgages payable 1,810, % 5.1 years Debentures 1,722, % 2.4 years Bank borrowings 67, % 0.9 year Total debt 3,601, % 3.7 years Cash and cash equivalents (6,131) 1.70% Net debt 3,595,069 September 30, 2018 December 31, 2017 Debt ratio 51.9% 57.4% Interest coverage ratio (last twelve months) 2.35:1 2.46:1 Residual weighted average term of total debt (years) Unsecured debts-to-net-debt ratio 49.7% 52.1% Unencumbered income properties ($M) 2, ,347.8 Unencumbered assets to unsecured net debt ratio 1.57:1 1.43:1

18 Financing activities P 18 Long term debt maturities September 30, 2018 ($M) Weighted average contractual interest rate : 4.11 % $ 604 June $ 300 $ 481 $ 527 Nov. $ 100 Dec. $ 200 $ 484 June $ 300 $ 517 May $ 225 July $ 300 Dec. $ 300 $ 327 $ 292 $ 289 $ 184 $ 182 $ 55 $ 4 $ 81 $ 23 $ 51 $ Mortgages payable Senior unsecured debentures

19 Financial position P 19 September 30, 2018 ($000) December 31, 2017 ($000) Total assets 6,938,319 7,824,993 Mortgages payable 1,810,914 2,150,126 Debentures 1,722,334 1,721,577 Bank borrowings 67, ,366 Unitholders equity 3,201,127 3,208,761

20 Financial position P 20 Unencumbered assets September 30, 2018 December 31, 2017 Unencumbered income properties (in $M) 2, ,347.8 Unencumbered assets ratio 1.57:1 1.43:1 Senior unsecured debt-to-net debt ratio 49.7 % 52.1 % Centropolis, Laval 803,000 sq. ft. Mail Champlain, Brossard 569,000 sq. ft. 5 Place Laval, Laval 321,000 sq. ft.

21 Supplementary Informations

22 Real estate portfolio P 22 Portfolio overview As at September 30, 2018 Number of properties Leasable area (sq. ft.) M 525 properties as at December 31, M sq. ft. as at December 31, 2017 By geographic market Montreal 282 properties 25.4 M sq. ft. Québec City 126 properties 10.3 M sq. ft. By operating segment Office 97 properties 11.8 M sq. ft. Retail 136 properties 10.7 M sq. ft. Ottawa 20 properties 2.5 M sq. ft. Industrial 196 properties 15.7 M sq. ft.

23 Same property net operating income P 23 Diversification 38.7% Office 64.3% 37.4% Retail 29.0% 23.9% Industrial 6.7% Montreal Québec City Ottawa Segment diversification Market diversification

24 Marquis assets - Office P 24 Gare centrale de Montreal 1,726,000 sq. ft. Alexis Nihon Montreal 1,023,000 sq. ft McGill College Montreal 512,000 sq. ft Beaver Hall Montreal 306,000 sq. ft. Complexe Jules-Dallaire Quebec City 537,000 sq. ft. Place de la Cité Quebec City 1,025,000 sq. ft.

25 Marquis assets - Retail P 25 Place de la Cité Québec 1,025,000 sq. ft. Rockland Montréal 646,000 sq. ft. Mail Champlain Montréal REM Panama 569,000 sq. ft. Centre Les Rivières Trois-Rivières 565,000 sq. ft. Centropolis Montréal 803,000 sq. ft. Centre Laval Montréal 698,000 sq. ft. Galeries Rive-Nord Montréal 575,000 sq. ft.

26 Marquis assets - Industrial P Halpern Montreal 527,000 sq. ft du Parcours Montreal 199,000 sq. ft. 40 chemin du Tremblay Boucherville 143,000 sq. ft. 505 du Parc-Technologique Québec City 100,000 sq. ft.