SmartCentres Real Estate Investment Trust

Good day, ladies and gentlemen. Welcome to the Smart Center's REIT Q2 2022 conference call. As a reminder, if you would like to queue up to ask a question, please press star 1. I would like to introduce Mitchell Goldhar. Please go ahead.

Good morning, and thank you for joining us on our Q2 conference call. I am Mitchell Goldhar, Executive Chairman and CEO of And I am joined by Peter Sweeney, Chief Financial Officer, Rudy Gobin, EVP, Portfolio Management and Investments, and Mauro Pambianchi, Chief Development Officer. Our commentary will refer mostly to outlook and some of our mixed use initiative sections of our MD&A, which is posted on our website. I refer you specifically to the cautionary language at the front of the MD&A which also applies to the comments any of the speakers make this morning. We are pleased to report that the REIT delivered another solid quarter, demonstrating once again its ability to consistently drive growth, starting with our core asset base. Since the rest of my commentary is covered in our press release, I will turn... it over to Rudy Govan to present leasing results.

Thanks, Mitch. And good morning, everyone. Throughout the second quarter, we saw the underlying strength of our centers in driving leasing activity and customer traffic. Tenants in most categories are back, wanting more space and locking up locations in our high-traffic centers. And with virtually 100% of the REITs properties having a full-line grocery and near 70%, including a Walmart Supercenter, a wide variety of tenants were back, adding locations to our well-located centers, including dollar stores, the TJX banners, health and beauty, the Canadian Tire banners, pet stores, medical, full-line and specialty grocery, distribution, logistics, and much more. all driving traffic and improving in our already strong tenant mix in each center. Here are some key highlights. We closed the quarter with an improved occupancy of 97.6% with committed deals. This improvement was widespread across all provinces, including the releasing of two of the previously vacated home outfitter stores, which closed all locations in Canada and four within our portfolio at the end of 2021. You may recall that we negotiated a buyout of a significant portion of the remaining 2022 and 2023 rents, which was recognized in our Q4 results. So the releasing provides an improved cash flow overall. We are now close to releasing the last two of the locations at the same or slightly higher rental rates. With this, we see occupancy continuing to improve in the coming quarters and working to get us back to 98%. At the quarter's end, we've already completed or near completed 4.2 million square feet of the 2022 renewals representing 83% of the maturities in the year and at a 3.6% rental rate with excluding anchors. Over 150,000 square feet of leases were executed for built space during the quarter and I would add with better covenants than the previous tenancies. New entrance to the market in a number of categories, including health and beauty, furniture, sporting goods, and QSRs, have started with strong interest in our open format and resilient portfolio. We continue to work with our tenants, helping them to adapt to their changing needs, which gives them the flexibility they need and only serves to strengthen our partnerships and maintain our high long-term occupancy levels. We've been fortunate with no predator filings in 2022, which speaks to the high quality of our tenants and trusting that the worst is behind us. From a rent collections perspective, we ended the quarter at 98.5% and subsequent to the quarter have made further collections relating to the quarter, bringing collections to 98.8%. This is happening simultaneously with higher rental levels and NOI, and we expect further improvement in the coming quarters. Once again, demonstrating the stability and the financial strength of our tenancies. Regarding our premium outlets in Toronto and Montreal, both continue to improve. And with the signing of another Aritzia in the Montreal premium outlets, we are now at 100% occupancy in both centers. With the pent-up demand, accumulated disposable savings, and the reopening of the Canadian-U.S. border, we are experiencing a solid start to 2022. From all perspectives, 2022 is recovering nicely. and is shaping up to be a strong year in retail, and especially in the value segment, an area where we dominate. As Mitch has said time and time again, this portfolio was built for heavy weather. Our value-focused tenants are adapting, customer traffic is improving, occupancy and cash flows are back to near pre-pandemic levels, and most importantly, all of this is happening concurrently with the extensive mixed-use development initiatives already identified in over half of our existing centers, rezoning achievements made and continuing, current construction already in progress in condos, apartments, retirement, self-storage, industrial and retail, as previously mentioned, and all contributing to significant current and future NAV growth. With that, I will now turn it over to Peter Sweeney.