SmartCentres Real Estate Investment Trust

Good day, ladies and gentlemen. Welcome to the Smart Centre's REIT Q2 2024 conference call. I would like to introduce Mr. Peter Slann.

Please go ahead. Good morning and welcome to our second quarter 2024 results call. I'm Peter Slann, Chief Financial Officer, and I'm joined on today's call by Mitch Guldhar, Smart Centre's Executive Chair and CEO, and by Rudi Gobind, our Executive Vice President of Portfolio Management and Investments. We will begin today's call with some comments from Mitch. Rudy will then provide some operational highlights, 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 of any of the speakers this morning. Mitch, over to you.

Thank you, Peter. Good morning and welcome, everyone. The second quarter delivered strong results, building on the momentum we spoke of last quarter. With over 272,000 square feet of new lease deals executed in the quarter, committed occupancy in our portfolio improved to 98.2%. From the largest retail in the world Walmart and many of our great Canadian brands our tenant partner relationships continue to deepen with same store expansions and new stores new locations are either underway or will begin construction shortly with names such as Canadian Tire Winners HomeSense LCBO some full line grocery, dollarama, golf town, banks, QSRs and more. You may have already noticed the higher traffic or selection and wider array of tenants in our smart centers locations as we enhance the experience beyond the everyday essentials with health and beauty, recreation, fitness, education, clinics, pet stores, daycares and specialty foods. As we work closely with our tenants, no detail is too small in ensuring smart centres is a good option for the growth plans of the country's strongest retailers and a desirable location to continue operating profitable stores. Which, not surprisingly, has culminated in us already extending over 86% of our over 5 million square feet maturing this year. Also positive is the 8.5% rental rate lifts achieved on these extensions, exclusive of anchor tenants. This rental rate lift is pure. It's a pure lift, not buoyed up by tenant inducements or other costly consideration, which can sometimes be offered. This rental rate increase is a direct reflection of the value of smart centers real estate and the amount of business being done on our properties. Rudy will provide some further details in a minute but here are a few more operational highlights. Same property NOI for the six months ending June is up three percent excluding acres. Our industrial vacant space was quickly released in the quarter along with the additional new build adjacent space and at higher rents than previous than the previous tenant. Our payout ratio while still high from my perspective. And while it is working its way down in the meantime is not a concern because of the quality of our income. Cash collections at over 99% reflects the quality of that income. And we expect leasing, renewals, renewal rate momentum to carry on through year end. While enjoying a strong foundation of stable rental income we continue to build significant mixed use permissions with nearly 57 million square feet already zoned. This of course on lands we already own and have for many years. We will of course be prudent and strategic in executing any development project that is when market conditions permit with appropriate financing in place. Here are some specific highlights. Site works are continuing for our 36-story artwork project here in the VMC comprising 320 sold-out condominium units. Through our smart living brand, the Millway, our 458-unit apartment rental project, which was completed late last year, was 88% leased at at quarter end, above planned rental rates, and now stands at 90%. We expect to be 95% leased by year end. Construction of our Vaughan Northwest townhomes with our partner is progressing well, with 25 closings taking place this quarter and nearly all pre-sold units expected to close on schedule by year end. In Leaside, construction is well on its way for a 224,000 square foot retail center comprised of a 200,000 square foot Canadian tire store. Adding to our self-storage portfolio, our Markham facility opened in May, bringing the operational portfolio to 10 projects and four remain under construction. This portfolio continues to excel and we intend to continue the expansion, as we are doing with two new locations, one in Laval East and the other in Victoria, British Columbia, just off the downtown core. Our development teams continue to work diligently on obtaining residential and other permissions, and just recently we were successful in our Eglinton West Centre, called Westside Mall, in obtaining entitlements for 2.7 million square feet of density and a 327,000 square feet phase one residential building with that grade retail. Note that this mixed use development is immediately adjacent to the soon to be open Caledonian LRT station, which will also be integrated with a soon to be constructed Berry GO line station. Overall, we continue to be strategic with our development and expect to execute on some capital recycling this year where market appetite exists. We expect that with further interest rate reductions and reduced inflation in late 2024 and 2025, market conditions may be more conducive for more meaningful capital recycling. And finally, we are pleased to announce that our annual Environment, Social and Governance Report will be released shortly, reflecting the significant progress we have made in all areas of our business. As I've said previously, ESG is woven into the fabric of our organization. It is a part of how we oversee our business, interact with our tenants and engage with our employees and communities. Look out for this in the next week or so. As you can see, we are quite active in enhancing value in our core retail operations, prudent in our governance, and strategic with our development pipeline. We also take great care in maintaining a conservative balance sheet and improving liquidity, which we did when increasing our operating line by $250 million to $750 million increasing our unencumbered asset pool to $9.3 billion and raising $350 million subsequent to the quarter, which Peter will speak to in a few minutes. But before that, let me pass the call over to Rudy for some operational highlights.