SmartCentres Real Estate Investment Trust

Good day, everyone. Welcome to the Smart Center's REACH Q4 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 Peter Slan. Please go ahead.

Thank you, and good afternoon, and welcome to our fourth quarter and full year 2022 results call. I'm Peter Slan, Chief Financial Officer, and I'm joined on today's call by Mitch Goldhar, Smart Center's Executive Chair and CEO. and by Rudy Gobin, our Executive Vice President of Portfolio Management and Investments. We'll begin today's call with some comments from Mitch. Rudy will then cover some operational items, and I will review our financial results. We will then be pleased to take your questions. Just before I turn the call over to Mitch, I'd like to refer you specifically to the cautionary language about forward-looking information, which can be found at the front of our MD&A materials. This also applies to comments any of the speakers make this afternoon. Mitch, over to you. Thank you, Peter.

Good afternoon and welcome, everyone. I'll start with this quarter's strong operational results, which is taking place in near every category, as well as our success in achieving some significant mixed-use entitlements. This sets the stage for an even stronger 2023 with the completion of Transit City 4 and 5 condominiums and the Millway Apartments, all scheduled to occupy in the coming quarters. The fourth quarter capped off a year of resurgence, both in consumer traffic and retailers wanting more space. Not only are we seeing continued demand for space in most of our nearly 35 million square foot value-oriented portfolio, but we are also welcoming new retailers to our centers in many segments. allowing us to provide a more compelling and diverse offering to every community we serve across Canada. We are also seeing consistency in our industry-leading occupancy rate of 98%, which is back to pre-pandemic levels. We continue not only to expand in our existing footprint, but demand for new retail construction is also growing in various segments. which Rudy will speak to shortly. All in all, our tenants are adapting, and most with strong e-commerce delivery and or pickup channels. From a portfolio perspective, we continue to work towards de-risking our tenant base, as reflected in our improving tenant covenant, liquidity, and collections. Retailers have, for the most part, figured out how to best adapt their product offering, store sizes, and distribution to fit the needs of Canadians. Thus, tenant collections are now an industry leading 99% and continue to improve, with provisions for non-payment of rent near zero. On the land use permission and development front, we continue to move the goal line forward, not giving way to these challenging times. For 2022, we achieved over 6.1 million square feet of new mixed use permissions in various urban locations with high demand for housing. Given that development is a long-term game, we are committed to unlocking the tremendous value embedded in our existing owned lands, which I will remind you sit in the midst of highly populated communities in nearly every major market across Canada. While you can read the details of many of our developments planned for the portfolio in our MD&A, here are a few highlights of what's currently underway. Construction of the fourth and fifth transit city condo towers at SmartVMC comprising 45 and 50 stories respectively are nearing completion and remain on budget and on schedule with first occupancies starting later this quarter. Also within SmartVMC, the Millway, our 36-story apartment building is also nearing completion. occupancy commenced just last week and we expect continued lease up throughout the year, which we are all very excited about. Our apartments in Mascouche and Laval, suburbs of Montreal, are near completion and demand for rental suites in those markets is also reflecting a high level of interest. Construction of a 240,000 square foot, 40 foot clear industrial space on 16 acres of a 38 acre site on the 407 in Pickering is in its final stages with half of the space already pre-leased and with turnover scheduled for next month. Construction continues on new seniors residence apartments totaling 402 units at Ottawa-Laurentian. As investors may be aware, our JV partner on this project, Group Selection, is currently facing some financial challenges. However, construction is continuing. Smart Centers continues to support this project, and we are confident in a path to substantial and successful completion. In Vaughan Northwest, with our partners, we recently commenced the construction of our townhouse subdivision, including 174 homes with site servicing now completed. Lastly, in addition to our seven self storage facilities already opened and high demand in other markets across the GTA, we are under construction on three additional storage facilities in Markham, Brampton and Whitby. You can see this current construction activity is all in our expanded disclosures in the MD&A, as well as the list of additional 48 projects scheduled to commence construction in the next two years, subject to always to satisfying our many internal risk hurdles, while again demonstrating the tremendous opportunity that lies within our underutilized lands that we already own. On the financial side, maintaining our conservative balance sheet remains a priority with an unencumbered pool of assets of $8.4 billion, a 43.6% debt level and significant liquidity, which Peter will speak to shortly. As I have mentioned previously, we are not bound to the commencement of any project and will await the proper economics timelines timelines, and funding before initiating any project. In today's market of higher interest rates, higher inflation, economic and political uncertainty, we may selectively determine it prudent to sit back and wait for a safer environment. However, sitting back is not in our DNA. Over the past 30 years, we have consistently navigated and pushed forward in many market conditions. building a dynamic and resilient portfolio, starting from 1994 with the opening of the first newly built Walmart in Canada at our Barrie South site. At Smart Centers, we are far too forward-thinking to be distracted by noisy headlines to take our eye off the long-term vision and objectives of building lasting value for communities across Canada, and hence value and growth for our unit holders. We will get you there in one piece. Environmental, social, and governance issues, for example, are and have always been woven into the fabric of our organization. They are embedded in everything we do, in how we oversee our business, interact with our tenants, and engage our associates and communities, and of course, impact on the environment. Although ESG is getting more attention as of late, it has always been part of our DNA since the beginning. And when you assess our portfolio, you can see that ESG principles have been applied throughout. In our approach to building and design, energy utilization, social interaction with tenants and their customers, especially evident during the pandemic, cost savings to communities, and of course, convenience, such that Canadian families are able to live a better life. That's not to say we can't do better. We are committed and energized to find new and innovative ways to share more ways, innovative ways, and do. more than our share of good in this important area. On a final note, I would like to offer my thanks and appreciation to our exceptional team of associates for their commitment and dedication to delivering on this long-term vision of improving the lives of the communities we serve every day. And with that, I will pass the call over to Rudy.