Fronsac Real Estate Investment Trust : 2021 Q1 MD&A

FRONSAC Real Estate Investment Trust

Management Discussion & Analysis

-

Q1 2021

Period ended March 31st, 2021

Form 51-102F1

FRONSAC Real Estate Investment Trust

SUMMARY OF SELECTED FINANCIAL INFORMATION

	3 months
Periods ended March 31	2021		2020		%
Financial info
Property rental income	4,453,791		2,863,606	1,590,185	56%
Total revenue	4,453,791		2,863,606	1,590,185	56%
Net income (loss) and
comprehensive income (loss)	223,673		4,118,476	(3,894,803)	(95%)
NOI (1)	3,279,414		2,198,785	1,080,629	49%
FFO (1)	2,433,267		1,462,713	970,554	66%
Recurring FFO (1)(2)	2,433,267		1,462,713	970,554	66%
AFFO (1)	2,236,544		1,349,626	886,918	66%
EBITDA	515,334		4,803,647	(4,288,313)	(89%)
Adjusted EBITDA (1)	3,132,047		2,020,860	1,111,187	55%
Investment properties	187,591,316		137,321,331	50,269,985	37%
Adjusted investment properties (3)	225,561,827		160,828,581	64,733,246	40%
Total assets	208,549,407		155,220,627	53,328,780	34%
Total mortgage/loans/long term debt (4)	106,859,491		71,064,054	35,795,437	50%
(including revolving line of credit)	107,909,491		76,887,604	31,021,887	40%
Total convertible debentures	8,128,852		2,985,538	5,143,314	172%
Total equity	89,408,345		71,358,784	18,049,561	25%
Weighted average units o/s - basic	17,420,614		13,296,639	4,123,975	31%
Amounts on a per unit basis
FFO	0.140		0.110	0.030	27%
Recurring FFO	0.140		0.110	0.030	27%
AFFO	0.128		0.102	0.027	26%
Distributions	0.075		0.064	0.011	17%
Financial ratios
Weighted avg. interest rate - fixed ffloans/mortgages	3.37%		3.83%	(0.46%)
Debt to gross assets - including converts	56%		51%	5%
Debt to gross assets - excluding converts	52%		50%	2%
Interest coverage ratio	2.9x		2.5x	0.4x
Debt service coverage ratio	1.7x		1.7x	-
Distributions as a % of FFO per unit	54%		58%	(4%)
Distributions as a % of Recurring FFO per unit	54%		58%	(4%)
Distributions as a % of AFFO per unit	58%		63%	(5%)
Leasing information
Occupancy	99%		100%	(1%)
Mix of tenancy based on net revenue
National	89%		87%	2%
Regional	9%		8%	1%
Local	2%		5%	(3%)
Property type breakdown
Retail	18		15	3
Quick Service Restaurants	19		16	3
Gas/Convenience stores/Quick Service Rest.	20		17	3
Gas/Convenience stores	17		11	6
Other	2		2	-
	76		61	15
Other
Average term to maturity - mortgages (years)	6.1		6.1	-
Average term to maturity - leases (years)	7.9		8.6	(0.7)
IFRS capitalization rate	6.53%		6.42%	0.11%

1. See appropriate sections for reconciliation to the closest IFRS measure and section "Explanation of non-IFRS financial measures"
2. Recurring FFO excludes ''Other revenues'' as presented on the Consolidated Financial Statements
3. Adjusted Investment Properties includes the Trust's proportionate share of value of investment properties owned through joint ventures; Refer to Note 4 Properties) and Note 5 ([1] value of developed properties, [2] leased properties and [3] properties under development) in Fronsac's financial statements
4. Excludes convertible debentures

FRONSAC	1

FRONSAC Real Estate Investment Trust

HISTORICAL SELECTED FINANCIAL PERFORMANCE

														$0.49
													$0.41
												$0.37
											$0.32
							$0.21			$0.25			$0.22	$0.26
	$0.13	$0.18	$0.19						$0.18	$0.20
			$0.16	$0.16
		$0.13	$0.14	$0.15
$0.05
n/a
2011	2012	2013	2014		2015*			2016*	2017*	2018*	2019*	2020*
						FFO/unit		Distribution/unit

*Recurring FFO: excludes ''Other revenues'' as presented in the Consolidated Financial Statements

TENANT OVERVIEW - PERIOD ENDED MARCH 31, 2021

TOP 10 TENANTS (78%)(1)

25%

21%

							10%	11%
				5%	6%	7%
3%	3%	4%		4%
	(2)		(3)	Groupe		(5)	(6)	(7)	Other
				BSG(4)

Notes:

1. Based on Net Operating Income (''NOI''); Includes the Trust's proportionate share of NOI from properties held through joint ventures
2. Metro operates grocery stores under the Metro and Super C banners
3. Parkland Fuel Corporation operates service-stations under the Ultramar and Esso Banners
4. Groupe BSG is a large regional service-station operator operating under various banners
5. Suncor operates Pétro-Canadaservice-stations
6. Sobeys operates IGA grocery stores and Shell service-stations
7. Loblaws operates the Pharmaprix pharmacies and the Provigo, Maxi, Independent's and Atlantic Superstore grocery banners

FRONSAC	2

FRONSAC Real Estate Investment Trust

BREAKDOWN OF PROPERTIES & OPERATING SECTORS

#	Address	City/Province	Type	Land	Building	Ownership
1	40-50 Brunet Street	Mont St-Hilaire, Qc	QSR, gas, c-store	69K sf	5,452 sf	100%
2	230	St-Luc Blvd.	St-Jean-sur-Richelieu, Qc	Gas, c-store	65K sf	8,359 sf	100%
3	196	Hôtel-de-Ville Blvd.	Rivière-du-Loup, Qc	Gas, c-store	14K sf	2,400 sf	100%
4	1349-1351 Road 117	Val-David, Qc	QSR, gas, c-store	36K sf	6,088 sf	100%
5	275	Barkoff Street	Trois-Rivières, Qc	Gas, c-store	65K sf	2,400 sf	65%
6	530	Barkoff Street	Cap-de-la-madeleine, Qc	Gas, c-store	30K sf	2,641 sf	50%
7	340-344 Montée du Comté	Les Coteaux, Qc	QSR, gas, c-store	67K sf	8,071 sf	100%
8	1440-50St-Laurent East Blvd.	Louiseville, Qc	QSR, gas, c-store	115K sf	6,132 sf	50%
9	1460	St-Laurent East Blvd.	Louiseville, Qc	QSR	37K sf	4,841 sf	50%
10	490-494 De L'Atrium Blvd.	Québec City, Qc	Gas, c-store	34K sf	6,574 sf	100%
11	7335	Guillaume Couture Blvd.	Lévis, Qc	QSR	30K sf	2,860 sf	100%
12	1319	Brookdale Avenue	Cornwall, On	QSR	33K sf	3,127 sf	100%
13	4200	Bernard-Pilon Street	St-Mathieu de Beloeil, Qc	Gas, c-store	20K sf	1,200 sf	100%
14	1901	Raymond Blais Street	Sainte-Julie, Qc	Gas, c-store	39K sf	5,150 sf	100%
15	2000	Leonard de Vinci Street	Sainte-Julie, Qc	QSR	86K sf	1,255 sf	100%
16	2050	Leonard de Vinci Street	Sainte-Julie, Qc	Gas	50K sf	5,975 sf	100%
17	2051	Nobel Street	Sainte-Julie, Qc	QSR	27K sf	1,392 sf	100%
18	16920-16930St-Louis Ave.	St-Hyacinthe, Qc	QSR, gas, c-store	70K sf	6,290 sf	100%
19	3726	Des Forges Blvd.	Trois-Rivières, Qc	QSR	19K sf	3,360 sf	100%
20	2871-2885 Des Prairies St.	Trois-Rivières, Qc	QSR, gas, c-store	60K sf	6,662 sf	100%
21	2350	Chemin des Patriotes	Richelieu, Qc	QSR, gas, c-store	48K sf	4,851 sf	100%
22	4932	Des Sources Blvd.	Pierrefonds, Qc	QSR	19K sf	2,716 sf	100%
23	314	De Montigny Street	St-Jérôme, Qc	QSR	24K sf	2,832 sf	100%
24	288	Valmont Street	Repentigny, Qc	Gas, c-store	22K sf	2,400 sf	100%
25	2439	Ste Sophie Blvd.	Sainte-Sophie, Qc	Gas, c-store	58K sf	4,856 sf	95%
26	2429	Sainte-Sophie Blvd.	Sainte-Sophie , Qc	QSR	45K sf	3,710 sf	95%
27	610	Saint-Joseph Blvd.	Gatineau, Qc	Other	12K sf	3,019 sf	100%
28	513	Des Laurentides Blvd.	Laval, Qc	Other	13K sf	3,372 sf	100%
29	123	St-Laurent East Blvd	St-Eustache, Qc	Gas, c-store	22K sf	3,846 sf	100%
30	4 North Street	Waterloo, Qc	Gas, c-store	14K sf	2,845 sf	100%
31	3355 de la Pérade Street	Quebec City, Qc	Retail	142K sf	28,894 sf	100%
32	2555 Montmorency Blvd	Quebec City, Qc	Retail	110K sf	25,480 sf	100%
33	3592	Laval Street	Lac Mégantic, Qc	Gas, c-store	20K sf	1,777 sf	100%
34	536	Algonquin Blvd.	Timmins, On	QSR	108K sf	2,690 sf	100%
35	1730 Jules Vernes Ave.	Cap Rouge, Qc	QSR	35K sf	4,100 sf	50%
36	235	Montée Paiement	Gatineau, Qc	Retail	149K sf	25,706 sf	100%
37	510	Bethany Ave.	Lachute, Qc	QSR, gas, c-store	113K sf	11,910 sf	50%
38	1337	Iberville Blvd.	Repentigny, Qc	Retail	57K sf	17,050 sf	100%
39	222	St-Jean-Baptiste Blvd.	Mercier, Qc	QSR, gas, c-store	70K sf	9,488 sf	82.5%
40	230	St-Jean-Baptiste Boul.	Mercier, Qc	QSR	33K sf	4,165 sf	82.5%
41	101	Hébert Street	Mont-Laurier, Qc	Retail	350K sf	37,530 sf	100%
42	290	Mgr. Langlois Blvd.	Salaberry-de-Valleyfield, Qc	QSR, gas, c-store	107K sf	10,114 sf	50%
43	510	Portland Street	Dartmouth, NS	QSR	32K sf	4,631 sf	100%
44	20 Frontenac Ouest Blvd.	Thetford Mines, Qc	QSR	30K sf	2,400 sf	100%
45	975	Wilkinson Ave.	Dartmouth, NS	QSR, gas, c-store	85K sf	7,975 sf	50%
46	1501	Jacques Bedard Street	Quebec City, Qc	Retail	152K sf	24,652 sf	100%
47	852	Laure Boulevard	Sept Iles, Qc	QSR	28K sf	3,239 sf	100%
48	87-91 Starrs Road	Yarmouth, NS	Gas, c-store	62K sf	3,335 sf	100%
49	4675	Shawinigan Sud Blvd.	Shawinigan, Qc	QSR, gas, c-store	101K sf	7,126 sf	50%
50	480	Bethany Ave.	Lachute, Qc	Retail	492K sf	75,681 sf	100%
51	484	Bethany Ave.	Lachute, Qc	QSR	32K sf	3,037 sf	100%
52	2077	Laurentides Blvd.	Laval, Qc	Retail	31K sf	9,462 sf	100%
53	111-117 Desjardins Bvld.	Maniwaki, Qc	Retail	45K sf	16,085 sf	100%
54	550	Laflèche Boulevard	Baie Comeau, Qc	Retail	102K sf	19,676 sf	100%
55	304	LaSalle Boulevard	Baie Comeau, Qc	QSR	13K sf	3,300 sf	100%
56	35 route 201	Coteau-du-Lac, Qc	QSR, gas, c-store	31K sf	4,500 sf	50%
57	835	Lucien Chenier	Farnham, Qc	QSR, gas, c-store	89K sf	7,000 sf	100%
58	24 Miikana Way	Kenora, On	Retail	534K sf	80,881 sf	100%
59	1410	Principale Street	St-Etienne-des-Grès, Qc	QSR, gas, c-store	26K sf	3,830 sf	75%
60	2505	Saint-Louis Street	Gatineau, Qc	Retail	88K sf	25,389 sf	100%
61	124	Beech Hill Road	Antigonish, NS	QSR, gas, c-store	176K sf	4,040 sf	50%
62	16670 Des Acadiens Blvd.	Bécancour, Qc	QSR, gas, c-store	14K sf	3,600 sf	75%
63	1875	Sainte-Marguerite Street	Trois-Rivières, Qc	Gas, c-store	19K sf	2,400 sf	75%
64	5100 Wilfrid Hamel Blvd.	Quebec City, Qc	Gas, c-store	26K sf	3,077 sf	50%

FRONSAC	3

FRONSAC Real Estate Investment Trust

65	369	St-Charles Street West	Longueuil, Qc	Gas, c-store	15K sf	2,578 sf	50%
66	1305-1375 Sherbrooke St*	Magog, Qc	QSR, gas, c-store	38K sf	8,900 sf	50%
67	250	Saint-Antoine Nord Street	Lavaltrie, Qc	Retail	87K sf	22,794 sf	100%
68	524-534Saint-Joseph Blvd.*	Drummondville, Qc	QSR	26K sf	7,684 sf	50%
69	570	Saint-Joseph Blvd.*	Drummondville, Qc	QSR	52K sf	3,855 sf	50%
70	491	Seigneuriale Street	Quebec City, Qc	Retail	103K sf	21,303 sf	100%
71	150	St-Alphonse Blvd.	Roberval, Qc	Retail	207K sf	43,378 sf	100%
72	15 McChesney Ave.	Kirkland Lake, ON	Retail	200K sf	45,157 sf	100%
73	394	Westville Road	New Glasgow, NS	Retail	487K sf	90,800 sf	100%
74	1225 Kings Street	Sydney, NS	Retail	155K sf	47,189 sf	100%
75	478	Ch. Knowlton	Lac Brome, Qc	QSR, gas, c-store	51K sf	4,500 sf	100%
76	14 Sunset Road	Pictou, NS	QSR, gas, c-store	129K sf	5,460 sf	50%
77	Laurier Boulevard* **	Terrebonne, Qc	QSR	35K sf	3,885 sf	40%
78	7751-7811Roi-Rene Blvd.* **	Anjou, Qc	QSR	33K sf	5,800 sf	40%
79	10 700 Ch. Cote-de-Liesse**	Lachine, Qc	Gas	37K sf	395 sf	100%
QSR: Quick Service Restaurant		Total:	6,401K sf	932,574 sf

• Under development **Acquired after March 31, 2021

FRONSAC	4