The Investor and Capital Markets Perspective December 1, 2011 Private Equity, Pension Funds, Lifecos and REITS
The Investor and Capital Markets Perspective Private Equity, Pension Funds, Lifecos and REITS q y, , Phil Gillin, Senior Managing Director, Head of Canadian Real Estate Sun Life Assurance Company of Canada Don Clow President & CEO Don Clow, President & CEO Crombie REIT Stephen Taylor, President & COO Morguard Investments Limited Blair Tamblyn, President & CEO Timbercreek Asset Management Inc Timbercreek Asset Management Inc. 2
Phil Gillin Senior Managing Director Head of Canadian Real Estate Sun Life Assurance Company of Canada
The Village at Thunderbird Centre Geographic Location Geographic Location Sunwood Square Meadowvale Shopping Centre Westgate Shopping Centre Village At Thunderbird Centre 4
The Village at Thunderbird Centre Aerial Photo Aerial Photo 5
The Village at Thunderbird Centre North Complex Photos North Complex Photos 6
The Village at Thunderbird Centre North Complex Site Plan North Complex Site Plan 7
The Village at Thunderbird Centre South Complex Photos South Complex Photos 8
The Village at Thunderbird Centre South Complex Site Plan South Complex Site Plan 9
Don Clow P President &CEO id t &CEO Crombie REIT
✓ Everyday Performance Everyday Performance • Toronto Real Estate Toronto Real Estate Forum • Donald Clow FCA , CEO , December 2011 11
1. Well Located and Diversified Portfolio 136 Properties 136 Properties 12.3 million feet of GLA $1 8 Billion FMV Assets $1.8 Billion FMV Assets $900M Market Cap 47 Year Operating History ea Ope at g sto y 1 6 1 14 1 4 12 12
1. Well Located and Diversified Portfolio Portfolio Characteristics Defensive portfolio - approx 80% of properties are grocery anchored + Avalon Mall, St John’s is one of the Top 20 regional malls anchored Avalon Mall, St John s is one of the Top 20 regional malls in Canada Average lease term is one of the longest in the REIT space at approximately 10 years Outside of Sobeys no other tenant represents more than 1.9% of annual minimum rent annual minimum rent 13 13
2. High Quality Cash Flow Quality covenants Over 50% of annual minimum rent from investment grade tenants > 89% of annual rent derived from national and regional tenants In line with investment grade REITs S S ame asset NOI growth t NOI g th S ame-asset property NOI long term growth of 1-2% S S trong Anchor Tenant: S trong Anchor Tenant: S obeys obeys S econd largest grocery anchor in Canada (approximately $15B in sales) Investment grade rated S trong same store sales growth Growing national footprint (1300+ stores) 14 14
3. Moderate & Conservative Leverage with Ample Liquidity Leverage of 50-60% of GBV (Including Converts) One of the longest average mortgage terms in the REIT space - 7.4 years Focus on longer term debt duration (e.g. – 20 year mortgage at 5.06% ) Liquidity - $150-200 million Revolver ($100M undrawn) + $80M unencumbered assets S ustainable payout ratios –Target 95% of AFFO Growth traj ectory and organic improvements in existing assets should allow us to attain this goal in the medium term 15 15
4. Significant Future Growth Potential Multiple growth strategies Internal growth – growing same-asset NOI, LUI and Development Development $300-$500 million pipeline from S obeys - $100M per year • S ylvie Lachance leads S obeys Development • S obeys lease “ ROFR’s” 3rd party acquisitions – target = $100M per year of high quality properties Runnymede – “ learn how to win” 16 16
3. Significant Future Growth Potential 17 17
Stephen Taylor P President & COO id t & COO Morguard Investments Limited
Morguard Group Assets Under Management A U d M Retail $4 5 $4.5 Residential $1.3 $1 3 AUM by Investor PRL PRL $ 1 5 B $ 1.5 B Sep Acc’ts $ 4.8 B Industrial $1.7 MRC $ 2.4 B MRT MRT $ 2 0 B $ 2.0 B Office $ 10.7 B $3.2 Market Cap (Nov 24, 2011) MRC MRC $959 MM $959 MM (13 MM h (13 MM shares at $73.96) $73 96) MRT $861 MM (57 MM units at $15.10)
Morguard Corporation 2011 I 2011 Investment Program P Available Equity Capital q y p $350 - $550 MM (excludes proceeds of asset sales or equity issues) ( p q y ) Investment Strategy Canada USA Core 10% 40% Value Add 25% 25%
Morguard Corporation 2011 I 2011 Investment Examples - Canada E l C d Tweedsmuir Residential - Toronto 150 Elgin - Ottawa Bramalea City Centre - Brampton
Bramalea City Centre I Impact of Expansion f E i 2006 2006 St biliz d Stabilized GLA (‘000’s sf) 1,221 1,478 NOI $22.8 $38.1 Cap Rate 6.75% 5.75% Market Value Market Value $331 $331 $662 $662 Debt $100 $259 Net Asset Value $231 $401 Development Cost $183 Incremental NOI $15.3 $ 8.4% (on DC) ( ) Capital Appreciation $148 28.8% ( on OMV + DC)
Morguard Corporation 2011 I 2011 Investment Examples - USA E l USA Boynton Town Centre - Florida Douglas Emmett Fund X Los Angeles
Boynton Town Centre Acquisition Parameters A i i i P GLA (‘000’s sf) 224 NOI $4.5 Purchase Price $59 Debt Debt $38 (at 5%) $38 (at 5%) Net Asset Value $21 ROI (C ROI (Cap Rate) R ) 7 6% 7.6% ROE 12.4%
Blair Tamblyn P President & CEO id t & CEO Timbercreek Asset Management Inc.
TIMBERCREEK Asset Management g TORONTO REAL ESTATE FORUM 2011 PAGE 26
TIMBERCREEK SNAPSHOT • $1.7 billion in Assets Under Management (2 public / 5 private vehicles) • Integrated National platform: 400 Employees; 10 regional offices • 2012 Capital Program: +/ ‐ $250 million across platform $1.7B UNDER MANAGEMENT Private Debt Private Equity Public Equity / Debt M Mortgage Investments t I t t Direct Real Estate Di R l E Global Real Estate Securities Assets: $350 Million Assets: $1.3 Billion Assets: $100 Million PAGE 27
DIRECT INVESTMENT – EQUITY: VALUE VALUE – ADD / OPPORTUNISTIC: TORONTO, ON ADD / OPPORTUNISTIC: TORONTO, ON , B E F O R E A F T E R PAGE 28
DIRECT INVESTMENT – DEBT: ACQUISITION CREDIT FACILITY ACQUISITION CREDIT FACILITY - ONTARIO ONTARIO UNDERWRITING SITE VISITS DUE DILIGENCE COMMITTEE Loan Amount $40,000,000 REVIEW First Mortgage: Up to 75% Loan-to-Value Second Mortgage: Up to 85% Term 18 months FUNDED Loan Type Fully Open Revolving Facility Effective Interest Rate Blended 8.75% Payment Interest-only PAGE 29 PAGE 29
Popper Questions
Question 1 Audience Participation Question For being such a great audience, Gorgeous George P. has decided to give each audience member $10,000 to invest one of two ways; $ , y ; 1) in a mattress, or 2) ) in the S&P/TSX Index. The catch is that the group that has the highest net worth on July 1, 2012 gets ALL of the money from the other group as well. By a show of hands which group would you be in? 31
Question 2 George P. gives each panel member a $50,000 honorarium for participating in this panel on the condition that an investment decision must be made this morning before we leave the hall.........each is asked where he would place the money: a) as a down payment on a downtown Toronto condo to be delivered in 2014 b) in the TSX REIT index fund c) in a private syndicate investing in office and industrial properties d) in Target common shares e) in Canada Savings Bonds 32
Question 3 In addition to the original $50,000, Generous George gives each panel member an additional $100,000 for winning the "BEST PANEL" award. The only provision is that each member must invest it with one of the other panel members for a 5 year term. First, where within your company would you invest the $100,000 contribution? Second, having heard each member's investment plan, which company would you pick S d h i h d h b ' i t t l hi h ld i k to invest your money with and why? 33
Q & A
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