Q1 2017 Highlights
National Platform Positioned for Sustainable Growth
Vista, Calgary, AB
Bowling Green, Yellowknife, NT
165 Ontario Street, St. Catharines, ON
First Quarter 2017 Conference Call May 10, 2017
Disclaimer This presentation may contain forward-looking information. All information included in this presentation other than statements of historical fact, is forward-looking information. When used in this presentation, words “expect”, “estimate”, “project”, “potential” or other similar expressions identify forward-looking information. The forward-looking information included in this presentation relates to, among other things, current expectations of future results, performance, prospects and opportunities, including with respect to the benefits of the acquisition of True North Apartment REIT and properties from affiliates of Starlight Investments Ltd. and affiliates of the Public Sector Pension Investment Board, growth opportunities, payout ratio, market capitalization, mitigation of impact of commodity prices, population growth, results from the high-end renovation program, above guideline increases, opportunities to increase below market rents, results from the sub-metering program, cost savings from management internalization, development and acquisition opportunities, and debt management. This presentation reflects Northview’s current beliefs and is based on information currently available to senior management. Forward-looking information is provided for the purpose of presenting information about senior management’s current expectations and plans relating to the future and readers are cautioned that such statements may not be appropriate for other purposes. This information is not a guarantee of future performance and is based on Northview’s estimates and assumptions, which include, but are not limited to market growth, the general economy, interest rates and real estate conditions are each stable, occupancy rates, results of operations, performance, prospects and opportunities. The forward-looking information is subject to a variety of known and unknown risks and uncertainties, which could cause actual events, results and performance to differ materially from the forward-looking information. Such risks and uncertainties include, but are not limited to, availability of cash flow, risks of unexpected operating results, risks of investment in and development of real property, competition, financing and refinancing risks, changes in economic conditions, changes in interest rates, changes in taxation rules, reliance on key personnel, environmental matters, tenant risks, fluctuations in commodity prices and other risk factors. Northview cautions that this list of factors is not exhaustive. Although the forward-looking information contained in this presentation is based on what Northview believes are reasonable assumptions, there can be no assurance that actual results will be consistent with this forward-looking information. The forward-looking information is provided only as of the date of such information, and Northview, except as required by applicable law, assumes no obligation to update or revise this information to reflect new information or the occurrence of future events or circumstances. Certain measures contained in this presentation do not have any standardized meaning as prescribed by International Financial Reporting Standards (“IFRS”) and, therefore, are considered non-GAAP measures. These measures are provided to enhance the reader's overall understanding of financial conditions. They are included to provide investors and management with an alternative method for assessing operating results in a manner that is focused on the performance of operations and to provide a more consistent basis for comparison between periods. These measures include widely accepted measures of performance for Canadian real estate investment trusts; however, the measures are not defined by IFRS. In addition, these measures are subject to the interpretation of definitions by the preparers of financial statements and may not be applied consistently between real estate entities. Please refer to Northview’s most recent Management's Discussion & Analysis and Financial Statements for the disclosed financial information and definitions of non-GAAP measures and additional GAAP measures, including NOI, FFO, debt to gross book value, and interest coverage contained in this presentation.
2
Q1 2017 Highlights •
Diluted FFO per Unit of $0.44
•
Multi-Family Same Door NOI Growth
•
2017 Strategic Priorities on Track
Atlantic Canada 13%
Northern Canada 32%
Western Canada 24%
Québec 5%
Ontario 26%
Note: NOI percentage based on the three months ended March 31, 2017.
3
Strategic Value Creation Initiatives Annualized NOI Increase
Initial Five Year Target
Cumulative Progress
Q1 2017 Progress
High-end renovation program
5,800
859
245
Below market rents
5,200
1,783
139
Sub-metering program
2,500
215
34
800
455
143
14,300
3,312
561
5.5%
5.5%
5.5%
260,000
60,000
10,000
(in thousands of dollars, except per unit amounts)
Above guideline increases Total Initial assumed capitalization rate Estimated value creation
4
Regional Overview – Western Canada Q1 2017
Q1 2016
NOI ($millions) – multi-family
$10.2
$10.3
Total NOI % – multi-family
28%
28%
81.7%
81.9%
Occupancy (%)
BC: 2,588 Fort Nelson, BC
AMR ($dollars per month) Residential units Commercial square feet
971
1,018
7,323
7,241
136,000
136,000
Dawson Creek, BC
AB: 4,306
Grande Prairie, AB Fort St. John, BC
SK: 429 Bonnyville, AB
Chetwynd, BC
Fort McMurray, AB
Airdrie, AB
Nanaimo, BC
Calgary, AB Abbotsford, BC
Lethbridge, AB
Prince George, BC
Note: Regions with a portfolio of greater than 200 units in BC or 500 units in AB and SK or recent developments are listed.
5
Lloydminster, AB
Regina, SK
Regional Overview – Ontario Q1 2017
Q1 2016
NOI ($millions) – multi-family
$10.9
$11.3
Total NOI % – multi-family
30%
31%
Occupancy (%)
95.7%
95.9%
AMR ($dollars per month)
1,000
952
Residential units
7,700
8,235
Southwestern ON: 4,313 Guelph, ON
Toronto, ON Lindsay, ON
Kitchener-Waterloo, ON Peterborough, ON
London, ON
Sarnia, ON
Brockville, ON Oshawa, ON St. Catharines-Niagara, ON Hamilton, ON
Note: Regions with a portfolio of greater than 200 units are listed.
6
Eastern ON: 1,660 GTA: 1,727
Regional Overview – Atlantic Canada Q1 2017
Q1 2016
NOI ($millions) – multi-family
$4.3
$3.9
Total NOI % – multi-family
12%
11%
92.1%
92.9%
752
755
4,261
4,321
225,000
225,000
Occupancy (%) AMR ($dollars per month) Residential units Commercial square feet
Labrador City, NL
Gander, NL St. John’s, NL
Fredericton, NB Saint John, NB Moncton, NB Dieppe, NB Shediac, NB
NB: 1,105 NS: 1,286 NL: 1,870
7
Dartmouth, NS Halifax, NS
Regional Overview – Northern Canada Q1 2017
Q1 2016
NOI ($millions) – multi-family
$8.5
$8.6
Total NOI % – multi-family
24%
24%
Occupancy (%)
94.1%
94.6%
AMR ($dollars per month)
2,049
2,022
Residential units
2,668
2,679
771,000
779,000
Commercial square feet
Cambridge Bay, NU
Inuvik, NT
Arctic Bay, NU Pond Inlet, NU
Gjoa Haven, NU Taloyoak, NU
Yellowknife, NT Igloolik, NU Hall Beach, NU Cape Dorset, NU
Clyde River, NU Kimmirut, NU NT: 1,469 NU: 1,199
8
Iqaluit, NU Pangnirtung, NU
Regional Overview – Québec Q1 2017
Q1 2016
NOI ($millions) – multi-family
$2.1
$2.1
Total NOI % – multi-family
6%
6%
94.2%
90.7%
725
726
Residential units
2,284
2,285
Commercial square feet
3,000
3,000
Occupancy (%) AMR ($dollars per month)
Montreal, QC Sept-Iles, QC
QC: 2,284
9
Financial Highlights Q1 2017
Q1 2016
%Change
42,338
42,964
(1.5%)
0.5%
(3.5%)
4.0%
52.3%
52.2%
0.1%
25,036
26,322
(4.9%)
FFO per unit – diluted
$0.44
$0.49
(10.2%)
FFO payout ratio – diluted
92.6%
82.6%
10.0%
(in thousands of dollars, except per unit amounts)
NOI Same door NOI change – multi-family NOI margin Excluding Non-recurring Items: FFO – diluted
10
Debt to Gross Book Value Due to non-core asset dispositions and equity offering
61.0% 60.2% 59.8%
60.0%
59.8%
59.2% 59.0% 58.0%
57.5%
57.8%
57.0% 56.0% 55.0% 54.0% 53.0% Q4 2015
Q1 2016
Q2 2016
11
Q3 2016
Q4 2016
Q1 2017
Mortgages Maturity 350,000 300,000
4.50% 3.81%
3.94%
4.00% 3.48%
3.28%
3.50% 3.00%
2.72% 200,000
2.50%
150,000
2.00%
Interest Rates
(thousands of dollars)
250,000
1.50% 100,000 1.00% 50,000
0.50%
-
0.00% 2017
•
2018
2019
2020
2021
10 year CMHC interest rate of 2.57% and 5 year CMHC interest rate of 2.00% is below average mortgage interest rate of 3.22% as at March 31, 2017
12
Development Activity Vista, Calgary, AB
•
Leasing ahead of expectations
•
75% leased up
Vista, Calgary, AB
Cambridge Bay, NU
• •
Completed May 1, 2017 70% pre-leased
Cambridge Bay, NU
13
2017 Development Activity Iqaluit, NU
Regina, SK
Units
Commence Date
$22 Total Cost
Units
Beds
$23
Stabilized Cap Rate
Total Cost
14
million
7.5%
Units
Comm. Sq. Ft.
$9
Stabilized Cap Rate
Total Cost
staff housing
40
11
9.5%
Canmore, AB
140
30
million
Stabilized Cap Rate
2017 million
7.5%
Q2
thousand
132
2017 Strategic Priorities
1
ORGANIC GROWTH
2
MANAGING LEVERAGE
15
3
CAPITAL DEPLOYMENT
NorthviewREIT.com
Azure, Fort St. John, BC
Aurora Heights, Yellowknife, NT
Cote Vertu, Montreal, QC
Vista, Calgary, AB
Bowling Green, Yellowknife, NT
165 Ontario Street, St. Catharines, ON
First Quarter 2017 Conference Call May 10, 2017
Disclaimer This presentation may contain forward-looking information. All information included in this presentation other than statements of historical fact, is forward-looking information. When used in this presentation, words “expect”, “estimate”, “project”, “potential” or other similar expressions identify forward-looking information. The forward-looking information included in this presentation relates to, among other things, current expectations of future results, performance, prospects and opportunities, including with respect to the benefits of the acquisition of True North Apartment REIT and properties from affiliates of Starlight Investments Ltd. and affiliates of the Public Sector Pension Investment Board, growth opportunities, payout ratio, market capitalization, mitigation of impact of commodity prices, population growth, results from the high-end renovation program, above guideline increases, opportunities to increase below market rents, results from the sub-metering program, cost savings from management internalization, development and acquisition opportunities, and debt management. This presentation reflects Northview’s current beliefs and is based on information currently available to senior management. Forward-looking information is provided for the purpose of presenting information about senior management’s current expectations and plans relating to the future and readers are cautioned that such statements may not be appropriate for other purposes. This information is not a guarantee of future performance and is based on Northview’s estimates and assumptions, which include, but are not limited to market growth, the general economy, interest rates and real estate conditions are each stable, occupancy rates, results of operations, performance, prospects and opportunities. The forward-looking information is subject to a variety of known and unknown risks and uncertainties, which could cause actual events, results and performance to differ materially from the forward-looking information. Such risks and uncertainties include, but are not limited to, availability of cash flow, risks of unexpected operating results, risks of investment in and development of real property, competition, financing and refinancing risks, changes in economic conditions, changes in interest rates, changes in taxation rules, reliance on key personnel, environmental matters, tenant risks, fluctuations in commodity prices and other risk factors. Northview cautions that this list of factors is not exhaustive. Although the forward-looking information contained in this presentation is based on what Northview believes are reasonable assumptions, there can be no assurance that actual results will be consistent with this forward-looking information. The forward-looking information is provided only as of the date of such information, and Northview, except as required by applicable law, assumes no obligation to update or revise this information to reflect new information or the occurrence of future events or circumstances. Certain measures contained in this presentation do not have any standardized meaning as prescribed by International Financial Reporting Standards (“IFRS”) and, therefore, are considered non-GAAP measures. These measures are provided to enhance the reader's overall understanding of financial conditions. They are included to provide investors and management with an alternative method for assessing operating results in a manner that is focused on the performance of operations and to provide a more consistent basis for comparison between periods. These measures include widely accepted measures of performance for Canadian real estate investment trusts; however, the measures are not defined by IFRS. In addition, these measures are subject to the interpretation of definitions by the preparers of financial statements and may not be applied consistently between real estate entities. Please refer to Northview’s most recent Management's Discussion & Analysis and Financial Statements for the disclosed financial information and definitions of non-GAAP measures and additional GAAP measures, including NOI, FFO, debt to gross book value, and interest coverage contained in this presentation.
2
Q1 2017 Highlights •
Diluted FFO per Unit of $0.44
•
Multi-Family Same Door NOI Growth
•
2017 Strategic Priorities on Track
Atlantic Canada 13%
Northern Canada 32%
Western Canada 24%
Québec 5%
Ontario 26%
Note: NOI percentage based on the three months ended March 31, 2017.
3
Strategic Value Creation Initiatives Annualized NOI Increase
Initial Five Year Target
Cumulative Progress
Q1 2017 Progress
High-end renovation program
5,800
859
245
Below market rents
5,200
1,783
139
Sub-metering program
2,500
215
34
800
455
143
14,300
3,312
561
5.5%
5.5%
5.5%
260,000
60,000
10,000
(in thousands of dollars, except per unit amounts)
Above guideline increases Total Initial assumed capitalization rate Estimated value creation
4
Regional Overview – Western Canada Q1 2017
Q1 2016
NOI ($millions) – multi-family
$10.2
$10.3
Total NOI % – multi-family
28%
28%
81.7%
81.9%
Occupancy (%)
BC: 2,588 Fort Nelson, BC
AMR ($dollars per month) Residential units Commercial square feet
971
1,018
7,323
7,241
136,000
136,000
Dawson Creek, BC
AB: 4,306
Grande Prairie, AB Fort St. John, BC
SK: 429 Bonnyville, AB
Chetwynd, BC
Fort McMurray, AB
Airdrie, AB
Nanaimo, BC
Calgary, AB Abbotsford, BC
Lethbridge, AB
Prince George, BC
Note: Regions with a portfolio of greater than 200 units in BC or 500 units in AB and SK or recent developments are listed.
5
Lloydminster, AB
Regina, SK
Regional Overview – Ontario Q1 2017
Q1 2016
NOI ($millions) – multi-family
$10.9
$11.3
Total NOI % – multi-family
30%
31%
Occupancy (%)
95.7%
95.9%
AMR ($dollars per month)
1,000
952
Residential units
7,700
8,235
Southwestern ON: 4,313 Guelph, ON
Toronto, ON Lindsay, ON
Kitchener-Waterloo, ON Peterborough, ON
London, ON
Sarnia, ON
Brockville, ON Oshawa, ON St. Catharines-Niagara, ON Hamilton, ON
Note: Regions with a portfolio of greater than 200 units are listed.
6
Eastern ON: 1,660 GTA: 1,727
Regional Overview – Atlantic Canada Q1 2017
Q1 2016
NOI ($millions) – multi-family
$4.3
$3.9
Total NOI % – multi-family
12%
11%
92.1%
92.9%
752
755
4,261
4,321
225,000
225,000
Occupancy (%) AMR ($dollars per month) Residential units Commercial square feet
Labrador City, NL
Gander, NL St. John’s, NL
Fredericton, NB Saint John, NB Moncton, NB Dieppe, NB Shediac, NB
NB: 1,105 NS: 1,286 NL: 1,870
7
Dartmouth, NS Halifax, NS
Regional Overview – Northern Canada Q1 2017
Q1 2016
NOI ($millions) – multi-family
$8.5
$8.6
Total NOI % – multi-family
24%
24%
Occupancy (%)
94.1%
94.6%
AMR ($dollars per month)
2,049
2,022
Residential units
2,668
2,679
771,000
779,000
Commercial square feet
Cambridge Bay, NU
Inuvik, NT
Arctic Bay, NU Pond Inlet, NU
Gjoa Haven, NU Taloyoak, NU
Yellowknife, NT Igloolik, NU Hall Beach, NU Cape Dorset, NU
Clyde River, NU Kimmirut, NU NT: 1,469 NU: 1,199
8
Iqaluit, NU Pangnirtung, NU
Regional Overview – Québec Q1 2017
Q1 2016
NOI ($millions) – multi-family
$2.1
$2.1
Total NOI % – multi-family
6%
6%
94.2%
90.7%
725
726
Residential units
2,284
2,285
Commercial square feet
3,000
3,000
Occupancy (%) AMR ($dollars per month)
Montreal, QC Sept-Iles, QC
QC: 2,284
9
Financial Highlights Q1 2017
Q1 2016
%Change
42,338
42,964
(1.5%)
0.5%
(3.5%)
4.0%
52.3%
52.2%
0.1%
25,036
26,322
(4.9%)
FFO per unit – diluted
$0.44
$0.49
(10.2%)
FFO payout ratio – diluted
92.6%
82.6%
10.0%
(in thousands of dollars, except per unit amounts)
NOI Same door NOI change – multi-family NOI margin Excluding Non-recurring Items: FFO – diluted
10
Debt to Gross Book Value Due to non-core asset dispositions and equity offering
61.0% 60.2% 59.8%
60.0%
59.8%
59.2% 59.0% 58.0%
57.5%
57.8%
57.0% 56.0% 55.0% 54.0% 53.0% Q4 2015
Q1 2016
Q2 2016
11
Q3 2016
Q4 2016
Q1 2017
Mortgages Maturity 350,000 300,000
4.50% 3.81%
3.94%
4.00% 3.48%
3.28%
3.50% 3.00%
2.72% 200,000
2.50%
150,000
2.00%
Interest Rates
(thousands of dollars)
250,000
1.50% 100,000 1.00% 50,000
0.50%
-
0.00% 2017
•
2018
2019
2020
2021
10 year CMHC interest rate of 2.57% and 5 year CMHC interest rate of 2.00% is below average mortgage interest rate of 3.22% as at March 31, 2017
12
Development Activity Vista, Calgary, AB
•
Leasing ahead of expectations
•
75% leased up
Vista, Calgary, AB
Cambridge Bay, NU
• •
Completed May 1, 2017 70% pre-leased
Cambridge Bay, NU
13
2017 Development Activity Iqaluit, NU
Regina, SK
Units
Commence Date
$22 Total Cost
Units
Beds
$23
Stabilized Cap Rate
Total Cost
14
million
7.5%
Units
Comm. Sq. Ft.
$9
Stabilized Cap Rate
Total Cost
staff housing
40
11
9.5%
Canmore, AB
140
30
million
Stabilized Cap Rate
2017 million
7.5%
Q2
thousand
132
2017 Strategic Priorities
1
ORGANIC GROWTH
2
MANAGING LEVERAGE
15
3
CAPITAL DEPLOYMENT
NorthviewREIT.com
Azure, Fort St. John, BC
Aurora Heights, Yellowknife, NT
Cote Vertu, Montreal, QC
