SmartCentres Real Estate Investment Trust Q1 2023 Earnings Call
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The conference is now being recorded.
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Good day, ladies and gentlemen, and welcome to the Smart centers REIT Q1, 2023 conference call and I'd like to introduce <unk> to go ahead.
Good afternoon, and welcome to our first quarter 2023 results call on Peter Slam Chief Financial Officer, and I'm joined on today's call by MS. Gould her smart centers executive chair and CEO and by really Gobin, our executive Vice President of portfolio management and investments.
We will.
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 Matt 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.
So far as the comments that any of the speakers make this afternoon Mitch.
Okay.
Thanks, Peter Good afternoon, and welcome everyone.
We kicked off 2023 on a much higher note than we experienced just one year ago operational.
Results continued to improve driven by Canada's best retailers.
Driving higher consumer traffic to our convenient open format centers.
Occupancy improved to 98% from 97.2 in the prior year renewals are up 3.4% NOI improving to 4.3% by <unk>, 3%.
Collections in excess of 99% all in all retailers.
Who set the agenda and who make up our core retail base.
Our investing in their physical platforms.
In the form of renovations and expansions.
Comp fulfillment integration.
And new stores.
Toronto and Montreal premium outlets are fully leased.
With 12 month rolling sales now exceeding 2019 levels.
Rudy will get into the operational details in a few minutes.
On the land use permission front.
So far this year, we achieved residential zoning approvals in three projects, which added yet another 3.4 million square feet to our future.
Sure in Ontario, and one is in Quebec.
We continue to stay focused on getting valuable permissions laying the groundwork for providing us with readymade options for future growth.
Recall that in 2022, we achieved over $6 1 million square feet of new mixed use permissions and urban locations with high demand for housing for 2023 is off to a great start.
Ahead of last year's pace.
Yes.
I will remind you that these proposed developments or a lag.
We already own.
Sit in the mens in the midst of highly populated communities in every major market.
Cross Canada.
You can read the details of many of our development plan.
For in the in the portfolio in our MD&A. So I will not go through them all here, except to say that transit CD four and five sold out.
Condos at BMC 100, I'm, sorry, 1050 units will all be closed.
This year.
Camille way purposely built rental building here at <unk> is near completion with Occupancies already commencing.
Artwork.
Our new condo.
At BMC is sold out of the released units in pre construction mobilization will commence within 60 days.
Ms Goose.
Our purpose built rental.
In the greater Montreal area is 76% leased and is expected to be released by.
By October .
Ahead of schedule.
Yeah.
Yes.
Our 240000 square foot industrial.
<unk>.
Initiative in Pickering is complete and the first tenant for half the building has moved in.
In Ottawa or 402 unit.
Seniors residents, which was under construction.
Has been delayed because of financial challenges of our partner.
Which are.
Close to being resolved.
In route of that we have taken over the development and construction management contracts.
Yeah.
Earthworks are now complete and construction will commence within two months on our townhouse development with our partners in Vaughan northwest.
With respect to.
Self storage, we opened our eighth.
In this quarter, the 133000 square foot Brampton facility on our on the surplus lands, we own at Kings point Plaza too.
Two others are under construction in the GTA with beef and mark them.
Yes.
Mrs.
We have commenced discussions with potential new partners and buyers of selected assets within the portfolio, which will assist in funding development debt reduction and diversification, while only a small part of the portfolio. We see this as an ongoing capital recycling program, which will not only strengthen our balance sheet.
But de risked future cash flow streams.
Once again, you can see this current construction activity and our expanded disclosure in the MD&A as well as the risk of additional projects scheduled to commence construction in the next two years.
And while we have delayed the start of a few projects going to the current market conditions. Our efforts in obtaining additional land use from issues such as residential continues in the normal course.
Yeah.
Okay.
On the financial side, Peter will provide a full update in a minute, but let me emphasize a few of the more pertinent elements.
Maintaining a conservative balance sheet remains a significant priority for us along with maintaining our significant unencumbered pool of assets, which now stands at $8 7 billion.
A respectable debt level at 43.2% it is important to us along.
With maintaining.
Significantly late liquidity liquidity.
And the strong support from our partners and lenders.
All firmly in place.
Okay.
We are committed to doing the right thing for the long term.
Like decisions made in the past, resulting in our strategic real estate current occupancy levels.
And.
Right.
Our strong tenant mix and rents collected.
So is the approach to decisions taken today to ensure a.
To ensure a stable and sustainable growth tomorrow.
Very recently doing the right thing.
As has been encapsulated in that term ESG environmental social and governance.
A concept that has been sweeping the corporate world, but for US ESG is just a different way of describing what we've been doing all along.
It is woven woven into the fabric of our organization and how we oversee our business interact with our tenants and engage our associates and communities.
Of course, it also means careful consideration for the environment.
Okay.
Our three year action plan in which we are developing and implementing our ESG strategy is posted on our website and I invite you to.
To assess our portfolio, where you will see ESG principles applied throughout.
On a final note I would like to once again 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 everyday.
And with that I will pass the call over to Rudy.
Yeah.
Yes.
Thanks Mitch.
And good afternoon, everyone.
I'll just.
Touch on a few of the things Mitch just said and give a little bit of an operational update the first quarter continued to build on the momentum of last year with strong interest from many of our dominant retailers who shaped the open format shopping landscape.
T J X Canadian tire banners pet stores banks dollar stores liquor USR fallen ethnic grocers, we're all very active picking up vacant space in our high traffic Wal Mart anchored centers.
And given our proximity to residential being in the center of communities and their strong financial footing, a few new entrants who are engaged we're engaging us with their space needs, including discounters.
Exponential.
Entertainment gaming logistics, and a few light industrial users as well finding their preferred locations on our website in calling with competitive rent and covenants to match its.
It's interesting that for a lot of this latter group they have figured out what our national retailers always new.
Location matters high traffic matters. It matters, who you co locate with if you want your name and brand remembered it matters.
Their customers enjoy the experience access and convenience of their weekly trip.
You've heard it from so many retailers.
Our real estate strategy simple final Wal Mart anchored center and get into it the cross shopping high traffic convenience frequency of visits and the value to our customers is clear and they are in their words for smart centers delivering on this vision and strategy have led us to the results we have seen before and continue to see this key.
Water, which speaks to themselves.
But it's a sector, leading 98% occupancy over 99% collections for 3% same property NOI growth.
Even planning Newbuild retail and not just in urban centers, but in places like Carlton, Cambridge Allison Chilliwack.
Renewal spreads on over 3 million square feet of leasing at four 3% ex anchors.
So while the pandemic gave retailers good reason to pause and rethink their strategy their path is now clearer than ever they stay close to their customers offer great value.
A convenient.
And proximity and access and co locate with the best in the country. So that customers have one place to do all of their shopping for their daily needs.
Even with this strong recovery there is no doubt that the market will see a small handful of retailers struggling to adapt.
Mostly in the enclosed mall space, which is not our space.
Bed Bath <unk> beyond is one such example, but for US that was only two locations in our 35 million square foot portfolio and both locations have already been taken without any rental interruption.
The strength at the top keeps getting stronger Walmart.
Walmart Canadian tire winters Homefed's grocers dollar ramp ups are reinvesting heavily in their store network and simultaneously growing their footprint and as a reminder, virtually all of the smart centers locations across the country includes a full grocery accessible at grade parking.
In a tenant mix that satisfies the weekly living needs of its community.
With that said here are a few other operational highlights.
In addition to the larger dominant retailers a number of smaller sized tenants are wanting space across the country for personal care beauty supplies spas hair salons daycares.
When combined with entertainment, such as indoor golf gaming and rocket support facilities, we're developing well rounded centers most of most of which as you know are in the planning pre construction or construction phases of becoming city centers utilizing our excess land for residential and other mixed uses as Mitch mentioned.
And earlier.
Development of our mill, we apartments is on track in the first phase of units in the North tower.
Being brought to market and 50% of those leased that being said theres lots more to golf and leaving just over 350 units on stream to come over the balance of the year in the east podium and West tower.
Our first pre lease industrial Newbuild.
Tenant took occupancy just after the quarter.
In our Pickering project and given that a modern design location and current discussions we are expecting the balance of the space to be leased shortly.
Okay.
Our premium outlets in Toronto, and Montreal continue to exceed our expectations and dominate their markets tenant sales in Toronto are well over 1000 per square foot and have exceeded all prior years 2023, EBITDA is trending to exceed the 2022 levels by over 10% with.
Traffic continuing to grow plan year trips accordingly to take advantage of the great luxury brands, such as product Kate Spade, Gucci, Hugo boss, but Seattle, Versace, and Ferragamo to name a few and all at affordable outlet prices.
All in all.
Even with the few economic challenges facing us all 2023 is shaping up to be a step up over the prior year in nearly every metric delivering NOI growth, leading occupancy levels stronger tenant covenants, all while executing on our mixed used development strategy for the long term.
Thanks, and now I'll turn it over to Peter.
Thank you Rudy.
The financial results for the first quarter reflect continued solid performance in our core retail business with a strong contribution from our mixed use development portfolio through the initial closings at the transit city for condominium project.
For the three months ended March 31, 2023, <unk> per fully diluted unit was <unk> 54, an increase.
<unk> of 6% from the comparable quarter last year. These.
These results include $3 $8 million or <unk> <unk> per unit of profits from the closing of 194 condominium suites at transit city for.
Higher rental income was partially offset by higher interest expense.
While G&A expenses were also higher this quarter. We note that a majority of the increase was due to a onetime write off of some capitalized costs related to a discontinued development project, we expect G&A cost to revert to their historic trend line in future quarters.
Net rental income for the quarter increased by $4 $1 million or three 4% from the same quarter last year, including our equity accounted investments. However, net rental income increased by $5 5 million or four 4% largely due to continued strong performance at our Mark Montreal.
Toronto premium outlet centers.
Same property NOI, including equity accounted investments increased by $5.3 million or four 3% compared to the same period in 2020 to.
Leasing activity remained strong during the quarter, which is expected to drive continued modest growth in NOI over the balance of the year.
Our occupancy level, including committed leases with 98% at the end of Q1 unchanged from the prior quarter, but up 80 basis points from a year earlier.
In terms of distributions, we have maintained our annual cash distribution level of $1 85 per unit throughout the COVID-19 period, and we are proud to be one of the very few Canadian rights that has never cut its distributions.
The payout ratio to a F F O for the three months ended March 31, 2023 was 93% an improvement from 96, 1% for the same period a year earlier.
Total assets, including our proportionate share of equity accounted investments were $12 $1 billion at the end of Q1 unchanged from the prior quarter.
During the quarter Ifr S fair value adjustments in our investment property portfolio, including equity accounted investments resulted in modest net gains of approximately $35.4 million principally reflecting additional leasing activity. We did not make any portfolio wide changes in our capitalization rate.
Options this quarter, although we did use modestly higher cap rates on a small number of select properties.
During the quarter, we closed on the sale of the first 194 condominium units in our transit to the four development for gross proceeds at the reached 25% share of $24.8 million and net profit of $4 $1 million.
The remaining 832 units at transit city for in Transit City five are expected to close over the balance of the year as Mitch mentioned earlier.
Adjusted debt to adjusted EBITDA stood at 10 times in Q1, representing a modest improvement from 10.3 times at the end of 2022 as a result of both growth and EBITDA and the repayment of approximately $28 million of debt during the quarter.
Our debt to aggregate asset ratio was 43, 2% at the end of the quarter, an improvement of 40 basis points from the prior quarter.
We expect to continue to repay debt over the coming quarters, particularly with the profits from the forthcoming condominium closings.
As we disclosed previously during the quarter, we completed the sale of approximately 6.4 acres of land at the Vaughan Metropolitan Centre for gross proceeds of $95 6 million or $58 $4 million at the REIT share.
The land parcel was comprised of 4.3 acres in V. M C West where the REIT has a two thirds ownership.
And 2.1 acres in the eastern part of the M C, where the REIT interest is 50%.
While this makes the accounting a little complicated we recorded a modest net gain of approximately $3 $7 million between the two parcels. However, this amount is not included in <unk>.
The proceeds from the sale were used to reduce indebtedness.
Our unencumbered.
<unk> asset pool stood at $8 $7 billion at the end of Q1 up from $8 4 billion at year end our.
Our unsecured debt of $4 $1 billion was unchanged from the prior quarter and represented 79% of our total debt of $5.2 billion.
From a liquidity perspective during the quarter, we extended the term on both our principal syndicated operating line as well as one of our bilateral facilities. We are very comfortable with our current liquidity position with more than $675 million of Undrawn liquidity as at March 31, 2023 included.
Our share of equity accounted investments, but excluding any accordion features.
The weighted average term to maturity of our debt, including debt on equity accounted investments is 3.9 years with a weighted average interest rate of 3.89% an increase of three basis points from the prior quarter.
We remain comfortable with our conservatively structured debt ladder, where the most significant aggregate maturities are in 2025 and 2027, we are actively engaged in evaluating refinancing alternatives for our 200 million dollar series I debenture that matures later this month.
Approximately 83% of our debt is at fixed interest rates, which has been a significant benefit to us as rates have been rising in recent quarters.
Finally, I want to touch briefly on our mixed use development projects that are underway.
Last quarter, we added some new disclosure in our MD&A focusing on these development projects.
That are currently under construction of the 11 projects that we highlighted in Q4, one was completed during Q1.
Which mitch touched on earlier, it's our self storage facility at Kings point Plaza in Brampton. So Theyre now 10 projects that were under construction as of March 31.
The REIT share of the total capital cost of these projects is approximately $533 million with the estimated cost to complete standing at a relatively modest $217 million.
We expect all of them to be completed by the third quarter of 2024.
We will continue to update this disclosure each quarter to reflect the ongoing progress with these new projects as the year progresses, we expect to see more of these projects reached completion and come off the list while additional projects will be added as construction commences.
Note that as projects come off the list. There also reclassified from properties under development to income producing properties with the exception of course of condos and town homes, which move out of residential inventory upon closing.
Upon completion each of these projects is expected to drive continued <unk> growth as well as allow us to recycle capital into other opportunities in our development pipeline and facilitate prudent management of our capital and liquidity needs.
And with that we would be pleased to take your questions. So operator can we have the first question on the line. Please.
Yeah, absolutely. So again, if any participants would like to ask a question. Please press star one and we will get your name. So again star one to ask a question and start to to actually withdraw you question. So I'll just wait a few moments of tours any questions that EQM.
And long term no question.
So again it is the star one to queue up.
Start to start to to withdraw your question.
Okay.
Okay. So we did get some questions at the queue up so just get a few moments just to get their names.
We have about three questions in the queue right now.
Sure.
Okay.
She had a Ford question queued up.
Okay, Jimmy Geelong there just to retune their names now, but again, our waiting if anyone on the line has a question. Please press star one.
Okay. So are <unk>.
First question is going to be from Tao.
Now only from National Bank financial.
Yes.
Can be a more mature we're just gonna be Sir just on meeting his line shouldn't be too long.
Sorry for the day show me too long.
Hello.
Okay.
Hello Hello.
Hi, sorry, but that's how we'll have from Nashville make financial your line is on mute. It go ahead.
Hello, Tao do you.
Are you on the line.
Can you hear me.
Yes.
Oh, Okay, well do that.
Please go ahead I'm.
Sorry, it's Sam Damiani with TD Cowen good afternoon and.
Sure.
It didn't didn't think I changed my name.
Well congratulations on the on the good same property print I was wondering what your thoughts were for the balance of 2023 on same property.
Just looking at the Q1 actually contribution it looks like you got a lock from occupancy gains and possibly from the outlet centers and so as the year progresses, how do you think that year over year comparisons going to play out.
Hi, Sam journey.
We see we see a continuation of what we are starting in Q1 last year. As you know was rebuilding 2021 into 2022 so it's building.
From a Q1 to Q1, so we don't we do see a trend of discontinuing we are at 98%. So again, the churn was going to make that difference, but the interest is so good.
From that number of retailers that I mentioned.
We are getting a good uptick as you saw in the renewals as well so new leasing for vacant space and renewal uplifts, we should be able to keep this momentum going.
So would you be comfortable putting out sort of a range sort of wouldn't say official guidance, but sort of the best best guesses as to how same property will play out for the year.
Well I'd say this way the I would say from an overall perspective I wouldn't want it like pick a number a range because as you know every little tenant matters every little one like we were fortunate about the bed Bath <unk> beyond that that we did not have a big exposure to that those 60 stores we had two.
But I'm going to say generally what we are seeing in Q1, we expect to continue throughout the rest of the year.
Okay.
Okay. That's helpful. Thanks Rudy.
And maybe just on the on the development side as you mentioned Peter you know there was one project that came out because it was completed.
Turn left.
As you look forward what kinds of projects do you see added to active construction.
And how are you looking at residential condo versus rentals in the current environment.
Okay.
Yeah, Hi attrition.
I was at a momentary ongoing.
Measure step by step.
We really have already won new construction starts that are were.
To recap, we recommitted to.
Starting and that's.
Artwork.
As to the smart BMC here, it's a condo.
It's sold out all the released units shouldered.
Has this a rental building and a small.
Boutique office component.
We're going to take the first step of construction.
On that.
And we have eye care over 20% Chicago hunters to get our second deposits in January the <unk>.
All came through there was no show rescissions or defaults.
So that's one we are looking closely at some of the others, but at the moment, that's the only new.
Residential.
Start there we are.
Committed to to starting this year.
Okay.
Okay, and how about I guess on for other asset classes, either self storage or industrial, but arguably a little shorter build time little less less risk if you will.
Yes, I mean.
We do have as Rudy has has said we have where we're cautiously optimistic about.
About some new retail starts net new.
On existing sites.
You know most of these sites as you would I guess.
No Sam R. R zone. So in terms of getting started it's usually pretty.
Straightforward.
So we're cautiously optimistic I mean, we could probably see a couple of retail starts.
And.
Self storage, we have too.
Currently under construction right now and it's possible that there will be.
Up to two.
You know probably won't get a third started this year, but I can definitely see two more starts this year.
<unk>.
Yeah don't see an industrial start this year, but next year could be we just finished the pickering. So the there may be some some further construction on the on the completion of the interiors of the.
Of the half Avi can see industrial building that we've built out in Pickering you know.
It's it's negligible.
So our annual there'll be some some capital improvements and some some renovations.
Next year and the year after depending on you know fundamentals, we have a number of things cooking.
Which we'll get into maybe later in the year that might result in some some commencements mixture.
As well as that.
Retail program that I was referring to we will most certainly start to manifest in oleds.
Potential.
So next year being food stores.
And others that we've mentioned here without getting into too many specifics theres quite a few new retail initiatives.
You pre leased.
Strong tenants.
You are going on.
Okay great.
One for me just quickly I just didn't catch.
You said Mitch in your opening remarks mill way was it 50% leased already touched.
Make sure I heard what you said correctly.
No.
We are weak.
Sam at the moment or leasing is the podiums.
So because they are the ones that are basically you know some of them are now occupy Abel.
So.
Off the top of my head I think we have yes with happier I have the stats, yes, Peter Peter again, Peter will give you the exact stats yeah. Sam there is 89 units.
In between the two podiums that are currently available.
And in 42 of them have leases signed so that's 47% of those that are available, but obviously the big the big not as the tower and we don't expect occupancy there to commence until sometime in the summer.
Okay.
Okay very good thanks, so much.
Hi, Thank you sorry about that that was question from from Sam Damiani, My Little technical glitch there.
Next question I believe will be from from Paoli.
From National Malone Mitchell Chao your line should be a muted.
Yes Hello.
Perfect go ahead, Hey, Joe.
Hey, Barry go.
Hum.
Sorry, you had mentioned some.
You were looking at maybe adding some new food locations of this grocery or foodservice finger typo.
Grocery.
I mean food.
Food as well, but but grocery.
Okay.
Does Walmart not have an exclusive covenant at most of your properties.
Yeah. So.
Sure.
Some of them I don't want to.
They are very very specific thing we.
He can talk about later, but I mean.
Some do some don't.
And different circumstances are you.
Whether they do or they don't don't necessarily mean that.
It does.
So what happened but.
But some see some do some don't and some sites are.
We have sites across more sites.
Sites.
That that across from the larger Walmart anchor sites too so.
You know it depends on which market, we're talking about but suffice to say theyre not at where we are now referring to two properties that we need to go and get.
No.
A restrictive covenant.
You know ended are released.
So and just keep in mind, we do have lots of lots of loblaw is in toby's another food scores.
Currently operating on Walmart suits, along with Costco is by the way.
Which I didn't mention there are also some of.
Included in some of what I was referring to.
Okay.
And then.
I think you mentioned on the senior side, you're you're dialing back.
One joint venture I believe that's the selection and one in Quebec.
Are you looking for a new partner in Ontario to on the senior side.
So I just wanted to correct you I know you.
Why you said, Quebec, it's actually in Ottawa, but yeah group Slingshot out of Quebec and in all of the litigation and most of their properties are in Quebec, That's that's true.
Correct.
So I mean, we were always.
And are still in touch recall seniors operators and so.
Ill.
We had a number of reverse on the go.
We've we've those are still near the ratio, where there are still very strong and very good.
But we slowed down that program.
And.
And we're in touch with others and yeah I wouldn't be surprised if we have some information to information to share some somewhere up to wrote about you know some some.
Some seniors homes with <unk>.
Other than other than Rivera.
Okay and is there reason is there particular reason those things are growing slower. It's just I mean for one I could imagine that just generally speaking the whole seniors industry kind of slowed down during COVID-19 period.
Or is there anything specific sort of around the relationship returned to bill.
No its really construction prices.
The construction of the simplest the construction pace of the simplest building have gone gone up.
We'll get into if you wanted to whether they're coming down and out but seniors I mean, you know is probably on the spectrum of.
Complex construction and exposure to.
Price increases.
Is probably on the Eylea on your on the outskirts. So it really is really just around waiting for prices to come down a bit.
Okay.
And then just on the balance sheet, I think you're making reference to that say you know your sort of average term to maturity was around the three year range with.
But the shape of the curve and how youre thinking about interest rates like what's what's sort of the goal as you do more refinancing going forward do you look to try and lengthen term here or two bed roughly where it is.
Hello, Peter can answer, but you know that could be I could ask you I mean.
I guess.
You can read.
What the.
What the big brains are thinking when you look at it feels of the spreads and the and the embedded.
Our rates for the various terms, but.
You know I don't know everybody's got their own opinion I personally think.
There's a lot of motivation to try to push them down a little bit I think you know we're never going to see are.
What I can see those rates, where we were before for a long time wherever for the foreseeable future.
But.
Hey, I think.
We were just getting our mind around that sort of the mid range in terms of term.
For now.
I don't know right now if you ask me, where do we want to lock in for the long term at these rates long term, meaning 10 plus years.
We're not super excited about rates and locking into them for 10 years, but everyone's got their opinion and we're really only dealing at the moment do you know with with.
With the one.
With the one maturity.
Tom I think you said the weighted average remaining term is about three years its actually closer to four 3.9, I just want to make.
Make sure you understood that it's it's a little longer than that.
Okay.
Nope, that's it for me thanks very much.
Thanks Al.
Thank you.
Yes.
And sorry for the confusion that we had just little technical glitch Alright. Our next question is.
He is going to be from Gaurav mature from I E capital markets. Please go ahead Ross.
Thank you and good afternoon, everyone.
And just sticking to the balance sheet for the moment with the upcoming 201 million majority Peter would be possible for you to discuss slab pricing currently stands and whether it would be possible to replace a debenture with another one.
So as I mentioned Gaurav were looking at multiple options for refinancing, including debentures, including looking at drawing our lines and so forth.
As for current pricing I mean, you work for an investment dealer you hurt your insight on this is probably at least as good as ours.
And you heard Mitch his views on the various tenors yep.
Okay. Okay.
If I try and just lastly on the <unk> payout ratio et.
Is there a range that you're targeting to be within.
So 2023.
So for 2023, youre not going to see all that much difference over the course of the year we've.
We've actually just finished our budgeting exercise and we do expect it to decline over the coming years.
Yes.
Okay, great. Thank you for the color I'll turn it back to the operator.
Perfect. Thank you those of your Alaska, Okay. Thank you Ross.
Alright, our next question.
Okay.
That will be from Lorne Kalmar from <unk> capital markets. Please go ahead Marc.
Thanks, Good afternoon, everyone.
Couple of quick ones from me you mentioned capital recycling I was wondering if you could maybe give sort of a quantum as to how much you kind of expect to do over the balance of the year.
Well, we don't know what wed like and what we do I mean, you know, we're happy with our portfolio we'd like to.
Improve our debt metrics. So we're highly motivated so it's really just going to be a question of market conditions recover very desirable assets, both IPP and surplus lands in zone surplus land so.
You know we hired.
Druthers, we'd probably be talking in terms of.
No.
Up to $400 million.
But.
That's just provided.
There are fair pricing.
Yes, that's fair enough.
Just sticking with us or are you now have buyers started to come back obviously, there's a bit of a lull, but things seem to be hopefully stabilizing just wondering what youre seeing in terms of appetite.
I mean, obviously, there's not a huge.
David Theres not a lot of data points over the last six maybe even 12 months, but we do feel it.
We get inquiries, we're been getting inquiries over the last month and a bit on the land side zoned land in good markets.
You know the.
Both the.
The players in those markets you know the private developers and some <unk>.
Institutional.
Types are ours.
No specific are interested in sears' specific mirage from properties, so that side of it.
Yeah, we feel we feel interest yep.
Okay, Great and then just quick one maybe for Peter.
Would it be fair to kind of extrapolate the F. F O a contribution from the transit city sales in <unk> through the balance of the year is that kind of a fair way to look at it.
Yeah, although it's not going to be equally spread out over the course of the balance of the year, it's going to be front end loaded to Q2 and Q3 to be small number at the end of the year.
Perfect Perfect and then just lastly on the on the Pickering Industrial development.
Obviously, the industrial side Hot Hot when what are expectations for getting the rest of that leased up.
We have so many we have a lot of interest at <unk>.
It's you know, it's all what Youre hearing mid east it's been true for us in Pickering.
On the <unk>.
On the vacancies. So we've had now that we have a number of things under negotiation right now, but you know until it's done it's not done so.
It's hard to say, we really hope to the next month.
A month or so we'll have an executed agreement and then in terms of rent commencement, we still have to pour the floor.
Had a few other things that we did so as to accommodate any possible tenant.
So really rent commencement maybe by the end of the year.
And what would sort of be the range of net rents youre looking at.
We are.
We're depending on what kind of work you want us to do where we're sort of quoting 15 to $16 net.
With some reasonable meet meaning you know kind of.
Inflationary type increases.
On a <unk>.
Ideally a tenure term.
Okay, great. Thank you. Thank you so much.
Okay.
Alright, perfect. Thank you.
Yes.
Alright, So we'll just again if there's any participants would like to ask a question. It is star one.
I would like to withdraw your question it is start to.
But as of now there is no questions in the queue.
Okay.
Just wait a minute or a few seconds here, if there's any last questions at queue.
Alright, and then it seems like there is no questions no questions in queue at this time.
Yes.
Okay, well. Thank you for participating in our Q1 analyst call. Please reserve Richard to do any of US for further questions have.
Have a good day.
Bill.
Good day, ladies and gentlemen. This concludes the smart centers reached Q1 2023 conference call. Thank you for your participation and have a nice day.