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Investor Presentation
Investor Presentation
July2014
Investment Summary

Canada’s largest pure-play office REIT

24.6 million sf of valuable, hard to replicate central business district and suburban office
properties

CBD properties generate ~70% of NOI

Proven Track record of value creation by senior management

Strong tenant roster

Significant unrealized value-add/repositioning opportunities

Well diversified by geography, asset & tenant mix

Strong occupancy with staggered lease maturities and rental rate growth

A conservative and flexible balance sheet; 47.6% Debt to GBV

Investment grade credit rating
In our history, we’ve never had a better quality portfolio or a stronger balance sheet
with embedded opportunities for growth and value creation.
2
Our Platform & Expertise
Strong Depth & Expertise, with a Proven Track Result of Delivering Results
Jane Gavan (1998)
Chief Executive Officer
Mario Barrafato (2001)
SVP & Chief Financial Officer
Ana Radic (1997)
SVP & Chief Operating Officer
Our senior management team has worked together for many years - completing over
$17 billion of commercial real estate transactions, and establishing a respected
presence in major urban markets across the country.
3
Our Platform & Expertise
Strong Operational, Development & Leasing Team
Kevin Hardy (2011)
SVP, Eastern Canada
Years of Experience in Commercial
Real Estate: 15+ (Oxford Properties)
Paul Skeans (2013)
SVP, Western Canada
Years of Experience in Commercial
Real Estate: 16 (GWL Realty & CBRE)
Andrew Reial (2012)
SVP, GTA & Western Canada
Years of Experience in Commercial
Real Estate: 15+ (Bentall)
Sharon Mitchell (2013)
SVP, Operations Management
Years of Experience in Commercial
Real Estate: 25 (Oxford & BMO)
Victor Settino (2013)
VP Commercial Development
Years of Experience in Commercial
Real Estate: 14 (First Gulf
Corporation)
Samantha Farrell (2012)
VP Leasing, Eastern Canada
Years of Experience in Commercial
Real Estate: 16 (Oxford Properties,
CBRE, V&A Properties)
John Shields (2013)
VP Leasing, Eastern Canada
Years of Experience in Commercial
Real Estate: 20+ (CBRE)
Irene Au (2006)
VP Leasing, Western Canada
Years of Experience in Commercial
Real Estate: 20 (incl. Colliers & O&Y)
90+ years of combined real estate experience amongst our internally-managed senior operational
team. 20 Experienced leasing professionals located in over 20 Markets across Canada
4
Our Platform & Expertise
Strong Support from Dream
Dream’s platform benefits D.un:
 Transaction & capital markets expertise
 Track record of development & value
creation
 Synergies realized across broad
platform
 Asset management & development
capabilities
Dream has…




20 year history in real estate and
renewable power developer,
manager and investor
Completed ~$20 billion of real
estate and alternative investment
transactions
178 dedicated professionals in all
disciplines
Extensive network of global JV
partners and financial institution
support
5
Proven Track Record of Growth & Performance
Results of Our 5 Year Capital Allocation Strategy
December 2008
March 2014
$12.60 (as at Dec 31, 2008)
$29.59 (as at June 25, 2014)
$260 million
$3.2 billion
1-Year Fwd Consensus AFFO Estimates
$2.22
$2.43
AFFO Payout Ratio (on Consensus Estimates)
99%
92%
AFFO Multiple
5.7x
12.2x
$2.20 / 17.5%
$2.24 / 7.6%
Unit Price
Market Capitalization
Annual Distribution / Implied Yield
Consensus NAV Estimate
Total Assets
$25.90
$1.3 billion
NOI by Segment:
90% Office / 10% Industrial
CBD / Suburban / Other Exposure as a % of NOI
Downtown Toronto / Calgary as a % of NOI
Top 5 Assets (and % of NOI)
Geographic Distribution of NOI
Reported Debt to GBV / Term / Wtd. Average Int. Rate
65% / 23% / 12%
19%
5-yr annual
equiv. total
return
12%
Annual
$7.6 billion
equiv. total
100% Office
return since
70% / 30% / 0%
inception
$34.32
13% Toronto / 39% Calgary
28% Toronto / 17% Calgary
Telus Tower (7%); AIR MILES Tower
(7%); McFarlane Tower (6%); 840 7th
Avenue (5%); Station Tower (5%)
Scotia Plaza (10%); 700 De la
Gauchètiere (4%); Adelaide Place (4%);
IBM Corp. Park (3%); Telus Tower (2%);
Calgary (47%); Toronto (13%); Vancouver
(9%); NWT (6%); Regina (4%); Sask (3%);
SW Ontario (1%); Industrial/Other (17%)
GTA (42%); Calgary (19%); YK/Sask/Regina
(8%); Edmonton (8%); BC (5%); Montreal
(5%); SW Ont. (4%); Ottawa (4%); QC/Atl.
Cda (2%); Other (3%)
66% / 5.5 years / 5.83%
47.6% / 4.6 years / 4.22%
We have transformed our asset profile over the last five years, while delivering
attractive annual returns of 19% to our unitholders.
6
Proven Track Record of Growth & Performance
Our AFFO/Unit While De-levering Our Balance Sheet
 Since the inception of Dream Office REIT in 2003, we
generated a total return of 229%. (CAGR of ~12%)
 Over the past five years, AFFO/unit has grown 17%.
 While the asset base has grown by $6.3 billion, our reported
debt/GBV has declined by almost 20%.
Reported AFFO per Unit
$2.50
Reported Debt/GBV
$2.43
70%
$2.40
65%
$2.30
60%
$2.20
$2.10
66%
55%
$2.08
50%
$2.00
48%
45%
$1.90
40%
2008
2013
Q4/08
Q1/14
7
Proven Track Record of Growth & Performance
Value Creation Through Transformational Transactions
Scotia Plaza
Whiterock Deleveraging
Portfolio
NCIB
Sale of
$2.50
Industrial
$2.40
Book Value of Total Assets ($millions)
$8,000
$7,500
$7,000
$6,500
AFFO
Per Unit
$5,500
$5,000
$4,000
$3,500
$1,500
$2.10
$2.00
$1.90
Adelaide
Place
$3,000
$2,000
$2.20
Slate
Portfolio
Sale of
Eastern
Portfolio
$4,500
$2,500
$2.30
Realex
Portfolio
$6,000
$1.80
$125M
convertible
debenture
54 acquisition transactions
with Western Canada focus
$1.70
$1,000
$1.60
$500
$0
$1.50
Dec-03
Dec-04
Dec-05
Dec-06
Aug-07
Dec-07
Dec-08
Dec-09
Dec-10
Dec-11
Dec-12
Dec-13
Book Value
We have an exceptional track record of growing our earnings, and the size and quality
of our portfolio. We actively manage our portfolio through our pursuit of accretive
acquisitions and the sale of non-core assets that no longer fit our strategy.
8
Irreplaceable Portfolio
Large Scale & Diversification
Q1 2014 - % NOI (excl. Reclassified Properties)
CBD
2%
Yellowknife
2%
TOTAL OWNED SF
24.6 M
AVG. TENANT SIZE
11,549 SF
CBD
5%
CBD
1%
70%
AVG. REMAINING
LEASE TERM
5 YEARS
CBD
1%
Saskatoon
3%
Calgary
19%
94.2%
CBD
3%
Edmonton
9%
CBD
17%
PORTFOLIO
OCCUPANCY
57%
British
Columbia
5%
USA
2%
% NOI CBD
CBD
3%
Regina
3%
CBD
28%
CBD
4%
GTA
42%
Montreal
5%
Quebec City
1%
Atlantic
Canada
1%
CBD
4%
41%
SW Ontario
4%
CBD
2%
Ottawa
4%
84% of our portfolio NOI is derived from “core” markets (GTA, Calgary, Edmonton,
Vancouver, Montreal, Ottawa)
9
Irreplaceable Portfolio
Institutional Quality Assets
Scotia Plaza
Toronto (10%)
700 De la Gauchetière
Montreal (4%)
Adelaide Place
Toronto (4%)
Barclay Centre I & II
Calgary (3%)
Enbridge Place
Edmonton (2%)
HSBC Bank Place
Edmonton (1%)
74 Victoria/137 Yonge St
Toronto (1%)
11,36
3
IBM Corporate Park
Calgary (3%)
Telus Tower
Calgary (2%)
State Street Financial Ctr.
Toronto (2%)
5001 Yonge Street
Toronto (2%)
AIR MILES Tower
Toronto (2%)
655 Bay Street
Toronto (1%)
840 7th Avenue SW
Calgary (1%)
Station Tower
Surrey (1%)
Our top 15 properties produce 40% of NOI (6.0 year weighted average lease
term / 98% committed occupancy / 22,000 sf avg. tenant size)
10
Irreplaceable Portfolio
Significant Strides to Increase CBD & GTA Exposure
NOI Breakdown, Beginning of 2010
NOI Breakdown, Q1/14
Total IFRS Asset Base = $1.4 Billion
Total IFRS Asset Base = $7.6 Billion
Industrial /
Other, 13%
Suburban
Office,
24%
Downtown – 15%
GTA West – 5%
Retail , 5%
Suburban
Office,
28%
CBD, 63%
Ottawa, 4%
BC, 7%
Ottawa, 4%
Montreal, 5%
GTA, 20%
US, 1%
YK, Sask,
Regina, 13%
Edmonton,
2%
QC, Atl. Cda
2%
CBD, 67%
BC, 5%
Calgary, 19%
Edmonton,
8%
Calgary,
53%
GTA, 43%
YK, Sask,
Regina , 8%
Downtown – 28%
GTA West – 9%
GTA East – 5%
SW Ont., 4%
US, 2%
11
Irreplaceable Portfolio
5.4 Million Owned SF in Downtown Toronto
7
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
16.
17.
18.
19.
20.
21.
22.
23.
24.
25.
26.
Scotia Plaza
Adelaide Place
30 Adelaide Street East
438 University Ave
655 Bay Street
74 Victoria Street / 137 Yonge Street
720 Bay Street
100 Yonge Street
18 King Street East
36 Toronto Street
330 Bay Street
20 Toronto Street / 33 Victoria Street
8 King Street East
Victory Building – 80 Richmond St W
49 Ontario Street
212 King Street West
357 Bay Street
10 Lower Spadina Avenue
360 Bay Street
10 King Street East
350 Bay Street
67 Richmond Street
366 Bay Street
56 Temperance Street
250 Dundas Street West
83 Yonge Street
97%
25
4
14
3
17
23
24
2
6
19
22
10
21
12
26
11
8
9
1
13
16
Our scale & concentration in downtown
Toronto affords us great opportunities.
We are the largest landlord in the GTA.
15
5
Committed
Occupancy
20
Central Business District
18
12
Managing Risk
Strong Relationships With Our Tenants
Tenant
We are the 1st or 2nd Largest Landlord to:
5 properties
17 properties
2 properties
Gross Rental
Revenue
(%)
# of
Properties
Owned
Area
(%)
Wtd. Avg.
Remaining
Lease Term
(Years)
Credit
Rating
1
Bank of Nova Scotia
7.26
17
4.04
10.3
AA
2
Government of Canada
6.02
30
6.59
2.8
AA+
3
Government of Ontario
3.10
9
2.73
5.3
AA+
4
Government of Quebec
1.88
5
2.84
12.4
A+
5
Bell Canada
1.84
7
1.53
4.1
BBB+
6
Telus
1.48
2
1.17
2.0
BBB+
7
Enbridge Pipelines Inc.
1.47
1
1.01
4.9
A-
8
Government of Saskatchewan
1.37
7
1.53
2.7
AA+
9
State Street Trust Company
1.36
2
1.00
8.0
AA-
10
Government of Alberta
1.18
12
1.27
3.7
AA+
Our top tenants have exceptional credit ratings, and are diversified across many
properties, which reduces re-leasing risk.
13
Managing Risk
Staggered Lease Maturities
Embedded Rental Rate Growth
4,500,000
3.4 million SF
uncommitted
(15.4%)
4,000,000
3,500,000
3,000,000
1.3 million SF
uncommitted
(6.0%)
GLA
2,500,000
2.2 million SF
uncommitted
(9.9%)
2,000,000
1,500,000
1,000,000
500,000
2014
2015
2016
2017
Total - uncommitted
2018
2019
2020
2021
2022+
Total - committed
Our rental rates remain below market, which, when coupled with our well-staggered lease
maturities positions us to consistently capture gains with new leasing
*Market rents are estimate only and are based on current market rents with no allowance for increases in future years.
Subject to changes in market conditions.
14
Managing Risk
Staggered Lease Expiries & Small Average Tenant Size
Downtown Calgary and Downtown Toronto
97
900,000
60
800,000
121
700,000
77
Expiring GLA
600,000
500,000
400,000
300,000
200,000
100,000
78
37
31
Average
Tenant
Size
6,000
SF
45
52
36
4,200
SF
7,400
SF
3,800
SF
13,000
SF
5,800
SF
6,300
SF
9,400
SF
0
2014
2015
2016
Downtown Calgary
2017
8,000
SF
7,200
SF
2018
Downtown Toronto
Number of Tenants
15
Managing Risk
Tenant Size and MTM on Rents
Downtown Calgary and Downtown Toronto
Calgary Downtown
Calgary Suburban
Toronto –
Downtown
Toronto Suburban
Total
Total SF
(% of Total Portfolio SF)
3,100,000
(12.6%)
800,000
(3.3%)
5,400,000
(22.0%)
4,200,000
(17.1%)
13,500,000
(55%)
Occupancy
95.9%
86.1%
96.8%
92.4%
94.8%
In Place Rents
21.92
16.32
23.35
14.42
19.75
Estimated Market Rents
25.58
17.98
25.71
14.90
21.71
Market vs. In Place Rents (%)
17%
10%
10%
3%
10%
Average
Tenant
Size
6,000
SF
4,200
SF
7,400
SF
3,800
SF
13,000
SF
5,800
SF
6,300
SF
9,400
SF
8,000
SF
7,200
SF
16
Managing Risk
Track Record of Stable and Outperforming Occupancy
Our Occupancy vs. National Average
100%
98%
96%
400 bps
94%
700 bps
Dream Office REIT
300 bps
500 bps
400 bps
92%
National Office Average
(CBRE)
90%
88%
86%
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
Consistently above the national average.
17
High Leasing Volume
Downtown Calgary
441 5th Avenue
Atrium II
McFarlane Tower
Life Plaza
Northland Building
Physical occupancy in our downtown Calgary portfolio increased 60 bps in Q1/14 as a
result of 22.4k sf of positive absorption. 22 new leases were completed during the
quarter, totaling approximately 169k sf.
18
High Leasing Volume
Downtown Toronto
Scotia Plaza
Adelaide Place
36 Toronto Street
10 King Street E
80 Richmond St W
In Q1/14, our leasing team completed over 110k sf of transactions in downtown Toronto
which included 39k sf of new leases and 72k sf of renewals. Average renewal rate of
$28.29 and new leasing rate of $22.74 have met or exceeded our forecast rates.
19
Capital Structure
Composition of Existing Capital
Q1/14
Total Assets
Equity
$ 7,667
$ 4,017
Secured Debt
52.4%
$ 3,115
40.6%
Convertible Debt
$ 52
0.7%
Unsecured Debt
$ 482
6.3%
Debt to GBV
47.6%
Undrawn Credit Facility
$249.2
Borrowing Capacity on
Unencumbered Assets
$462.8
Potential Borrowing Capacity
$712.0
Average Interest
Rate
4.2%
Average Term to
Maturity
4.6 years
BBB (Low)
Credit Rating
Unencumbered
Assets
$771 million
DBRS
Conservative and Flexible Balance Sheet
20
Capital Structure
Building Strong and Lasting Relationships with Our Lenders
Secured Mortgage Financing
2011
2012
2013
Total
Amount
$750
$844
$251
$1,915
7.8
7.9
8.8
7.7
4.2%
3.6%
4.1%
3.9%
Average Term (Years)
Average Rate
21
Capital Structure
Active Issuer in the Unsecured Debt Space
$4,500
$4,155
$4,000
7%
Issuance (C$ millions)
$3,500
$3,275
4%
$3,000
$2,500
$1,825
$2,000
$1,500
$1,000
$1,105
$920
$680
$500
$0
2009
Source: TD Securities
2010
2011
Other REIT
2012
2013
2014YTD
Dream Office REIT
22
Capital Structure
Well Staggered Debt Maturity Profile
700
Total Debt: $3.7 billion
Weighted Average Interest Rate 4.22%
4.6 year average term to maturity
Total Debt Maturities ($ millions)
600
500
400
300
200
100
0
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023+
Amount ($ millions)
Well staggered maturity profile with room for interest savings on upcoming mortgage maturities.
23
Comparatives
Attractive Valuation Relative to Our Peers
Priced as at June 25, 2014
Office
Price
Mkt Cap
Yield
2014
P/AFFO
2015
P/AFFO
Allied Properties
$35.35
$2,461
4.0%
19.0x
16.9x
14.8x
$32.40
9.1%
6.2%
6.0%
35%
Brookfield Canada
$26.80
$2,500
4.6%
19.7x
19.4x
17.3x
$32.17
-16.7%
5.3%
6.1%
42%
$15.83
$2,137
6.8%
12.7x
12.1x
13.9x
$16.54
-4.3%
6.6%
6.7%
49%
Historical Consensus
NAV
Implied
P/AFFO
NAV
Prem/Disc NAV Cap
Cap
Debt/
Assets
Diversified
Artis
Cominar
$18.92
$2,431
7.6%
12.1x
11.7x
13.9x
$20.12
-6.0%
6.8%
7.0%
54%
CREIT
$46.08
$3,190
3.8%
17.6x
17.0x
15.2x
$44.57
3.4%
6.1%
5.9%
39%
H&R
$22.90
$6,627
5.9%
14.2x
14.0x
13.5x
$24.48
-6.5%
6.1%
6.3%
51%
$29.59
$3,175
7.6%
12.2x
12.1x
13.8x
$34.32
-13.8%
6.5%
7.0%
48%
Dream Office
Source: SNL Financial (Consensus data used for AFFO, NAV, NAV Cap estimates), BMO Capital Markets
Dream Office currently trades at a 12.2x 2014 P/AFFO and 14% discount to NAV. At our
current valuation, we compare favourably across many metrics versus our peers
24
The Current Opportunity
 Dream Office REIT is currently generating a 7.6% cash yield and an 8%+ AFFO
yield (on consensus estimates)
 We are conservatively financed in our view with our current debt to gross book
value ratio around 47.6%
 We own a collection of assets that are hard to replicate, with our portfolio quality at
its best in our history
 We believe that our ability to meet tenants’ needs in our portfolio, our relationships
and our contracts with tenants will help us outperform whatever benchmarks may be
applicable
 Furthermore, we believe that with our scale and dedicated management team, we
will continue to generate increased and new sources of income
At current valuation, with our current portfolio, management team
and strategy, we believe we are a very compelling investment.
25
Appendix: Value Creation
26
Value Creation
Case Studies – Assets Purchased in 2010/2011
Adelaide Place
TORONTO
Saskatoon Square
SASKATOON
Enbridge Place
EDMONTON
HSBC Bank Place
EDMONTON
Total (owned)
GLA:
655,728 sq. ft.
Total (owned)
GLA:
228,780 sq. ft.
Total (owned)
GLA:
262,553 sq. ft.
Total (owned)
GLA:
298,660 sq. ft.
Description:
22-storey and
20-storey Class
A downtown
office towers
Description:
17-storey
downtown
Class A office
building
Description:
22-storey, Class
A downtown
office building
Description:
19-storey, Class
A downtown
office building
1982 / 2001
Year built /
renovated:
1980
Year built /
renovated:
1981
Year built /
renovated:
Year built /
renovated:
1981
Occupancy:
100%
Occupancy:
96%
Occupancy:
94%
Occupancy:
93%
2010
Year purchased:
2010
Year purchased:
2011
Year
purchased:
Year
purchased:
2010
Purchase price:
$212 million
(7.2% cap rate)
Purchase price:
$50 million
(<7% cap rate)
Purchase price:
$91 million
(7.5% cap rate)
Purchase
price:
$83 million
(<7% cap rate)
Q1/14 IFRS
Value
$308 million
Q1/14 IFRS
Value
$75 million
Q1/14 IFRS
Value
$109 million
Q1/14 IFRS
Value
$103 million
Value Increase
Since
Acquisition
$96 million
(45%)
Value Increase
Since
Acquisition
$25 million
(50%)
Value Increase
Since
Acquisition
$18 million
(20%)
Value Increase
Since
Acquisition
$20 million
(24%)
27
High Leasing Volume
Modern, High Quality Improvements
28
Value Creation
Retail Successes & Opportunities
Our 1 million SF of retail space generates
$24.5 million of NOI or 5.5% of our total
NOI. As retail tenants seek more urban
exposure, this presents an opportunity to:
• Grow existing rents
• Re-lease existing retail to best uses
• Re-purpose office and storage space
to retail in CBD
• Add retail pads to suburban sites
29
Value Creation
Retail Successes
10 year lease transaction with Drake One
Fifty at Adelaide Place
Net rents achieved are 25% higher than
previous in place rents
30
30
Value Creation
Retail Successes
10 year lease transactions with SpeakEasy 21
and Starbucks at Scotia Plaza
4,000 sf of vacant space leased at rents in
excess of $50.00 psf
1,000 sf leased at 185% higher rents
31
Value Creation
CBD Retail Opportunities
Opportunities to Re-Purpose CBD
office and storage space
8 King East
Ground Floor and Lower Level Retail
357 Bay Street
Ground & 2nd Floor Retail
700 De la Gauchetière
Pursuing new retail in 10,000 sf of
lower level storage space with
exterior access
32
Value Creation
Suburban Retail Opportunities
Ability to intensify on suburban sites.
• 5,600 sf pad site opportunity in Toronto’s
west end
• Retail rents generated will exceed office
rents by 115%
33
Value Creation
Commercial Development Opportunities
East Vancouver Site
• 1.7 acre site
• Potential to develop 200,000 sf,
eight storey building
• Steps from the Skytrain and bus
transit options
• New, highly efficient LEED Gold
Core and Shell building
34
Value Creation
Commercial Development Opportunities
Downtown Kitchener Site
• Infill development site
• Potential to develop 110,000 sf, 6
storey office building
• Immediate access to highways,
public transit as well as Kitchener’s
future iON LRT system
• New, highly efficient LEED Gold
Core and Shell building
35
Value Creation
Urban Intensification Opportunity
East Toronto Site
•
•
•
•
•
Located in Toronto, Ontario
15 acres
300,000 sf of existing office space
Potential for residential uses
Potential for retail uses
36
37
Forward Looking Information
This slide presentation contains forward looking information within the meaning of
applicable securities legislation. Forward looking information is based on a number of
assumptions and is subject to a number of risks and uncertainties, many of which are
beyond Dream Office REIT's control, that could cause actual results to differ materially
from those that are disclosed in or implied by such forward looking information. These
risks and uncertainties include, but are not limited to, general and local economic and
business conditions; the financial condition of tenants; our ability to refinance maturing
debt; leasing risks, including those associated with the ability to lease vacant space. All
forward looking information in this presentation speaks as of June 26, 2014. Dream
Office REIT does not undertake to update any such forward looking information whether
as a result of new information, future events or otherwise. Additional information about
these assumptions and risks and uncertainties is disclosed in filings with securities
regulators filed on SEDAR (www.sedar.com).
38
Thank you
39

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