SmartCentres Real Estate Investment Trust

Good day, ladies and gentlemen, and welcome to the Smart Centers Reach Q1 2024 conference call. I would like to introduce Mr. Peter Slam. Please go ahead.

Good afternoon, and welcome to our first quarter 2024 results call. I'm Peter Slam, Chief Financial Officer, and I'm joined on today's call by Mitch Goldhar, Smart Centers Executive Chair and CEO, and by Rudy Gobin, our Executive Vice President, Portfolio Management and Investments. We will 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 would 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.

Thanks to you. I'm Mitchell Goldherb. Good afternoon, everyone, and welcome to our call. I'm pleased to report a strong start to 2024, building on the momentum of last quarter and, indeed, last year. Before I get into some details, an invitation. If you haven't been to a SMART Center, Walmart Anchor location recently, I encourage you to visit. there surely is one near you, and that is no matter where you are in Canada, there will be a Smart Centers in proximity. What you will notice and feel is something new and obvious. Increased activity, traffic, consumer traffic, brighter lots, easier access, more stores, and a wider selection of retailers, such as daycare, fitness, clinics, pickup locations for your click and collect, and, of course, great value, especially if saving money is your thing, which is everybody's thing. Now for a few details. Lease extensions, which a lot of people refer to as renewals, are providing strong rental increases of 8.9% excluding interest on 4.4 million square feet already extended in Q1. Same property NOI is up $4 million or 3% in the quarter over the prior year. Cash collections remain strong at 99%. Portfolio occupancy was temporarily reduced in the quarter, as you have seen in our disclosure. This was almost all the result of two unrelated tenant vacancies in the quarter, which we fully expect to release in the next quarter or two on current negotiations, advanced negotiations with strong covenant tenants, and on completion will not only result in a 9.84% in place in community occupancy, but we expect that those will be done at higher rent as well. With stronger leasing interest for both existing and new build, we expect our occupancy rate to improve even more and relatively quickly. and much of it with stronger covenants and higher rents. For the first time in a while, we have executed over 200,000 square feet of new build leases, which will further expand our footprint across the country in the coming quarters. Growth is coming fast and strong from recognizable names such as TJX Banners, Dollarama, Schroeper Strugbart, LCBO, Banks, Canadian Tire, and some national grocers and general merchandisers. Built on our stable cash generating platform, we continue to build and secure significant mixed-use permissions with 56 million square feet already zoned. And remember, on lands we already own, which creates great value and expansion value of our NAV. We will, of course, be prudent and strategic in executing these projects. That is when market conditions permit and with appropriate financing in place. Here are some specific highlights briefly. SiteWorks are continuing for our 40-story artwork project comprising 320 sold-out units right here in the VMC. Two, through our smart living department, our 458-unit millway apartment rental project was fully completed during Q4 last year. and now expecting to grow to 88% in the next quarter and into the mid-90s before year-end. We have exceeded our lease-up occupancy expectations as well as our rental assumptions with this project in the heart of the Bond Metropolitan Center, BMC. Construction of our Vaughan Northwest townhomes with our partners is progressing well with two closings taking place this quarter and nearly all pre-sold units expected to close on schedule by year end. Four, in Leaside, we continue with our site work for a 224,000 square foot retail center