Investor Presentation September 2020
Presentation Overview Section 1 Our Company & Strategy Section 2 Business Update Section 3 Investment Highlights Section 4 Portfolio Overview Section 5 Financial Highlights Appendix 1 Environmental, Social and Governance Appendix 2 European Strategy Appendix 3 Market Fundamentals
Our Company & Strategy
Company Snapshot 26M SF 262 GLA Properties Dream Industrial REIT (DIR) owns and operates a diversified portfolio of logistics, warehousing and urban light industrial properties across Canada, U.S. and Europe, supported by a platform with a proven track 96% record of long-term value creation 4.1 yrs Committed WALT Occupancy $1.2B 69% 1 28% Canada 10% 1 Unencumbered Net debt-to-Assets Europe Assets 2 21% 1 U.S. 7.4% 6.4% Discount-to-IFRS Distribution Yield 3 NAV 4 1 – As a % of Investment Properties (“IP”) Value at June 30, 2020 2 – Following the repayment of a $17M mortgage in July 2020 3 – Distribution yield is a non-GAAP measure and is calculated as annual distributions per unit divided by unit price as at September 8, 2020 4 – Discount-to-IFRS NAV is calculated as 1 minus net asset value per unit as at June 30,2020 divided by unit price as at September 8,2020
Our Strategy Global Acquisition Selective Asset Conservative Platform Capital Recycling Management Financial Policy Local on the ground teams Selective recycling program Drive organic NOI and NAV Maintain conservative with a strong track record and redeployment of growth by executing leverage, build up high of sourcing attractive capital into higher quality creative asset management quality unencumbered assets industrial opportunities properties that are less strategies, initiating and pool, while reducing interest across Canada, the United management and capital executing on developments expense and preserving States, and Europe intensive liquidity Value Enhancing Growth Improve Portfolio Quality Maximizing Property Value Strong Balance Sheet & Liquidity Position 5
Local Platforms + Strategic Relationships Canada United States Europe Dream provides a dedicated local Dream provides expertise on PAULS Corp. provides DIR a local U.S. acquisition and asset management acquisitions, strategic transactions, operating and capital management team along with long-standing capital and portfolio allocation, capital platform to obtain unique access to relationships with the European real markets as well as access to its acquisition and development pipelines in estate brokerage network. Canadian development platform. the U.S. Over the past three years, the population in markets we invest in has grown from 37 million to ~ 900 million 1 . We have a local on-the-ground track record, experience and relationships to help deliver above average returns for unitholders 6 1 – Source: United Nations, Department of Economic and Social Affairs
Portfolio Transformation Adding scale and increasing presence in target markets DIR announces European expansion, completes $425M of acquisitions across Canada and Europe, with an additional $136M of assets across Canada and Europe in exclusivity/under contract DIR upgrades quality of portfolio through $371M of acquisitions and $273M of dispositions 3.0 DIR adds scale in the U.S. and target $2.9M Canadian markets with $243M of acquisitions DIR announces expansion into U.S. and $2.4M 2.5 the appointment of Brian Pauls as CEO Billions CAD $2.1M 2.0 $1.7M $1.6M 1.5 1.0 2016 2017 2018 2019 H1-2020 We have completed over $1 billion in acquisitions over the past three years that have added over 12 million square feet of well- located properties in strong industrial markets 7
Significant Value Creation for Unitholders Total return since execution of strategic initiatives COVID-19 120% 100% 80% 66% 60% 40% 17% 20% 12% 0% -20% Jan-17 Apr-17 Jul-17 Oct-17 Jan-18 Apr-18 Jul-18 Oct-18 Jan-19 Apr-19 Jul-19 Oct-19 Jan-20 Apr-20 Jul-20 DIR S&P/TSX REIT Index S&P/TSX Composite Index Since year-end 2016, DIR has significantly outperformed the broader equity market as well as the REIT index 8
Business Update
September 2020 Business Update • As of September 4, collected approximately 98% of recurring contractual gross rents due for Q2 2020 and July 2020 after adjusting for agreed- upon deferrals and Canada Emergency Commercial Rent Assistance (“CECRA”) Operations update • The Trust has agreed to rent deferral arrangements with 55 tenants, representing approximately 3.5% of recurring contractual gross rent for Q2 2020, of which approximately 40% has since been repaid • As of September 4, collections for August amount to 97% adjusted for CECRA • Cash and undrawn credit facility total ~$378 million* • Strong liquidity position Net debt-to-assets currently at 28%, below target average leverage in the mid 30% range • Unencumbered assets total $1.2 billion*, or 40% of investment properties value • Portfolio occupancy is 96% as at June 30, 2020 Limited leasing risk • Secured lease commitments representing ~90% of 2020 expiries • Only 3% of portfolio GLA set to expire over the remainder of the year, with expiring rents below market rents • Recently completed $35 million of acquisitions in Germany and Montreal with an additional $144 million under Significant acquisition contract or in exclusive negotiations • Capacity to complete ~$300 million of acquisitions post Q2-2020 before leverage exceeds 35% capacity • Acquisition pipeline remains strong with more than $500 million of high-quality assets 10 * Following the repayment of a $17M mortgage in July 2020
Continuing to High-Grade the Portfolio Closed/waived all conditions on two assets in Germany • DIR is also under contract or in exclusive negotiations on five assets across the Netherlands, Greater Toronto Area, and Ottawa • Combined purchase price totals ~$112 million, representing a going-in cap rate of 5.2% • Acquisition pipeline remains strong with more than $500 million in assets currently 20% $58M 6.1% 30 ft. 0.6M sf Market vs. Purchase Avg. Cap Avg. Clear In-place GLA price Rate Height Rent Pro forma the closing of acquisitions that are exclusive/under contract, DIR will have completed $600 million in acquisitions in 2020 11
Investment Highlights
Investment Highlights Secure cash flows underpinned by high quality Multiple drivers of cash flow and NAV growth portfolio and strong balance sheet Attractive distribution yield of 6.4% 1 , ~170 bps higher Increase FFO per unit by over $0.03 by leasing ~0.6M sf of than peer average 2 vacancy in the GTA and the U.S. Capacity to complete ~$300 million of acquisitions before High quality, well-diversified portfolio leverage exceeds 35% In-place rents ~9% below market; annual rental escalators Conservative leverage, ample liquidity average ~2% for the entire portfolio Ability to lower average cost of debt by at least 20% in Robust fundamentals for industrial real estate 12-24 months by accessing European debt DIR is well-positioned to continue to create long-term value for its unitholders 1 Distribution yield is a non-GAAP measure and is calculated as annual distributions per unit divided by unit price as at September 8, 2020 2 Peer group reflects Canadian listed pure-play industrial REITs 13
Well-Diversified Portfolio by Asset Type Light Industrial Distribution Urban Logistics 43% of total IP Value 39% of total IP Value 18% of total IP Value Europe, Europe, $105M, 9% $36M, 7% Europe, U.S., $75M, $146M, 7% 12% Canada,$ 569M, 46% U.S., $528M, Canada, Canada, 42% $949M, $490M, 84% 93% Portfolio comprises functional, well-located properties that are well-positioned to benefit from rising e-commerce penetration 14 *As at June 30, 2020
Tenant Base Highly Diversified Across Multiple Industries Agriculture, 1% Recreational Services, 2% Energy, 1% Healthcare, 2% Diversified Industries, 15% Miscellaneous, 3% Construction (non-residential), 5% Other Services, 5% Residential, 12% Technical Services, 7% Apparel and Consumer, 10% Paper, Printing, and Packaging, 7% Logistics, 9% Auto, 11% Food and Beverage, 11% No one industry accounts for more than 12% of annualized base rent with the Energy sector accounting for only 1% of annualized base rent 15 *Tenants in the Diversified industries segment produce, assemble or distribute goods to various industries As at June 30, 2020
Attractive Mix of Large and Small Tenants Tenants occupying <10K sf ✓ Diversified tenant base with approximately 1,150 tenants 15% 4K sf 714 ✓ Top ten tenants represent approximately 15% of Gross Rental Revenue and of annual Avg. Number of include high-quality investment-grade covenants base rent tenant size tenants ✓ Predictable income with WALT of 4.4 years from top 10 tenants and 4.1 for the entire portfolio Tenants occupying >100K sf 42% 22K sf 52 Avg. of annual Number of base rent tenant size tenants 16 As at June 30, 2020
Recommend
More recommend
