Mr. Adam Paul reports

FIRST CAPITAL REIT TO FOCUS ON FFO GROWTH AND CONTINUED STRENGTHENING OF CREDIT PROFILE; TO PRESENT KEY 3-YEAR OBJECTIVES AT UPCOMING INVESTOR DAY

First Capital Real Estate Investment Trust will host its 2024 investor day today where its leadership team will present Discipline, Stability, Growth, a three-year strategic road map, including financial growth and leverage reduction objectives.

"Today, we are presenting a clear vision for the future, focused on continuing to maximize the value of First Capital for our investors. By utilizing our best-in-class real estate portfolio and operating platform, we will continue to focus on driving FFO per-unit growth while at the same time, continuing to strengthen our credit profile," said Adam Paul, president and chief executive officer.

"Since launching our optimization plan nearly a year and a half ago, we have announced over $630-million of dispositions with an average in-place yield of less than 3 per cent and an average premium to IFRS carrying value of more than 20 per cent. The execution of the plan is demonstrating meaningful progress and since its introduction, FCR's total unitholder return of approximately 22 per cent has outperformed the 10-per-cent return from the S&P/TSX REIT Index and the 3-per-cent average return from FCR's large-cap Canadian retail REIT peers." Mr. Paul added, "The road map that we are presenting today is a clear extension of what we have been doing over the past year and a half."

Current business operations

During today's investor day, First Capital's leadership team will discuss its current business operations, including its defining strengths as a leader in (1) acquiring, developing, owning and operating grocery-anchored open-air shopping centres, and (2) its ability to rezone development sites.

With these core competencies as a solid foundation, First Capital is further differentiated from its peers by several competitive advantages. Its core portfolio of grocery-anchored shopping centres with a value of over $7-billion (comprising approximately 80 per cent of its total portfolio) has the highest in-place rents, highest lease renewal lifts, highest population density and is the most connected to public transit. Additionally, First Capital's portfolio of future development sites comprises a density pipeline of approximately 24 million square feet located in Canada's largest cities, in high-growth neighbourhoods with exceptional demographics.

First Capital delivered strong results in 2023, including lease renewal spreads of 12.1 per cent, funds from operations per unit, excluding other gains (losses) and (expenses), of $1.18, and an improved net debt to adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) ratio to 9.9 times as outlined in its fourth quarter report.

Strategic update

First Capital will provide a strategic update that remains focused on the key objectives of stability and growth in FFO per unit, net asset value and distributions, with an even stronger balance sheet. Asset divestitures will continue to be focused on non-grocery-anchored properties, which currently make up approximately 20 per cent of the portfolio with a value of approximately $1.7-billion and an average in-place yield of just over 2 per cent. First Capital's development program will focus on retail development and redevelopment of core grocery-anchored shopping centres, its entitlements program and selected mixed-use properties.

Through the continued execution of its strategy, First Capital has the following expectations.

2024 outlook:

• Same property NOI (net operating income) growth of approximately 2 per cent to 2.5 per cent (excluding lease termination fees and bad debt expense or recovery);
• Over $400-million of dispositions with an average expected yield of less than 3 per cent. The dispositions will continue to be focused on a mix of development sites and select low-yielding income properties;
• Development expenditures of approximately $125-million to $150-million;
• A net debt to adjusted EBITDA ratio that is in the low nine times range by the end of the year.

Three-year business plan

First Capital's business plan for the next three years, through to year-end 2026, includes the following key expectations and objectives:

• Average annual same-property NOI growth of at least 3 per cent;
• Property dispositions totalling approximately $1-billion on a cumulative basis with an average expected yield of less than 3 per cent. The dispositions will continue to be focused on a mix of development sites and select low-yielding income properties;
• An aggregate investment of approximately $500-million into property development and redevelopment;
• Development completions of approximately $200-million;
• Acquisitions of $100-million to $150-million, with a focus on multitenant, core grocery-anchored shopping centres as well as small, but strategic, tuck-ins that are expected to be important to long-term value creation;
• A net debt to adjusted EBITDA ratio that is in the low eight times range by year-end 2026;
• FFO per-unit growth averaging at least 3 per cent.

Investor day event details

First Capital's investor day will be held today, Feb. 21, 2024, in the Grand Banking Hall at One King West Hotel, located at 1 King St. West, Toronto. The sessions will commence at 1:30 p.m. EST with doors opening at 12:30 p.m.

The afternoon will feature presentations and panels from members of First Capital's executive and senior leadership team and will review First Capital's core competencies, competitive advantages, real estate strategy and key objectives.

A replay of the presentations and related materials will be made available on First capital's investor resources page as soon as practicable following the investor day.

About First Capital Real Estate Investment Trust

First Capital owns, operates and develops grocery-anchored, open-air centres in neighbourhoods with the strongest demographics in Canada.

We seek Safe Harbor.