Good day, ladies and gentlemen. Welcome to the SmartCentres REIT Q2 2021 conference call. I would like to introduce Mr. Goldhar. Please go ahead. Thank you. Good afternoon. Thank you for joining us. I am Mitchell Goldhar, Executive Chairman of SmartCentres, and will be chairing this call. Joining me on the call today are Peter Sweeney, Chief Financial Officer, Rudy Gobin, EVP, Portfolio Management and Investments, and Laurel Palmiyanqi, Chief Development Officer. Peter Forde will not be joining us on the call today. He extends his regrets as he continues his leave. Our commentary will refer mostly to the outlook and mixed-use development initiative section of our MD&A, which are posted on our website. I refer you specifically to the cautionary language on pages three and four of the MD&A materials, which also applies to comments any of the speakers make this afternoon. Our results this quarter speak for themselves and demonstrate again what we have been saying since 2015 when we combined the public and private companies strategically to effect these changes. Let me summarize this quarter in the following way. Our intensive mixed-use pipeline is into its second year contributing to FFO, and we expect this to be permanent, for all intents and purposes. Our entrepreneurial mindset and culture and core competencies continue to drive profitability in land development through intensifying and repositioning our assets. Our open format portfolio is an excellent starting point from which both us and our retailers can easily change. We are. Tenant interest accelerated through the quarter. This is off of our leased occupancy of 97.3%. Therefore, we expect to see continued improvement in cash flows going forward. Pages 21 to 23 of the MD&A highlights in excess of 55 million sq ft the updated net incremental density to be built with our partner share on lands within our owned centers. In our flagship SmartVMC, we closed on 70% of the Transit City three condos, 439 units in the quarter, generating CAD 12.9 million in FFO, or CAD 0.07, with the balance to be closed in the third quarter. Two additional towers, TC4 and TC5, 45 and 50 stories respectively, 1,026 units combined, are sold out, under construction with 20% deposits in place from the purchasers. The purpose-built residential rental tower, 451 units, which we call The Millway, is under construction. We are near completion for the launch of the next phase of high-rise condominium in SmartVMC, named ArtWalk, with over 600 units. We commenced construction this quarter on 174-unit rental apartment building along with 228 units seniors residence at our Laurentian Place property in Ottawa. We also commenced construction this quarter on two purpose-built residential towers in Mascouche, Quebec, suburb of Montreal, with our JV partner, Cogir, with the trust retaining an 80% ownership interest. We have also commenced the redevelopment of a portion of our 73-acre Cambridge project for residential condos and rental and other complementary uses. This project sits on our books with a CAD 92 million IFRS value based on a retail rents existing in our 700,000 sq ft retail center. Whereas with the recent rezoning, we are now approved to develop over 12 million sq ft of mixed use on these lands. Keep in mind, we do all this while simultaneously maintaining our conservative balance sheet with ample liquidity. We will only move forward with capital intensive construction initiatives as market conditions warrant. Sufficient pre-sales have occurred in the case of condos, and only when financing is fully available and in place. Additionally, on the capital recycling front, we now have nearly CAD 200 million in conditional deals in process so far this year at an average of low fives cap rates. The assets are non-core, and the proceeds will help fund our extensive development pipeline. The last 18 months has been an interesting real-life test of what we have been saying about our portfolio. That is, it is a strong and strategic one with a lot of embedded value. Now I would like to turn it over to Rudy Gobin. Thank you, Mitch, and good afternoon, everyone. Throughout the quarter, we saw tenants preparing to reopen, along with a renewed demand for space from tenants previously waiting on the sidelines, but now ready to lock up new locations. The acceleration with both small and large tenants asking to be co-located with Walmart anchored sites, having just experienced the alternative, and especially those coming from enclosed malls. Interest ranges from a fast food resurgence to pet stores, medical offices, and even financial institutions. We have received mid-box requests from dollar stores, outdoor sports and recreation, houseware stores, and a surge in demand for larger spaces as well from the likes of TJX, furniture stores, fitness even, home improvement and full line grocery stores. While 100% of the REIT properties include grocers as an anchor or shadow anchor, and 60% of the REIT tenant base is comprised of essential services, our essential services percentage increases to 70% in markets outside the Greater Vancouver area, where our occupancy rates are at or near 100%. In these smaller markets, our shopping centers are often the essential service hub of the area and are in all cases anchored by a Walmart store. The shopping basket size and frequency in these markets continue to increase as segments of the population relocate from the downtown core. This not only strengthens our shopping centers but further enhances the opportunities to intensify on our existing lands in these markets. Our tenants continue to work with us to adapt by expanding their e-commerce, product line, delivery model, pickup, and space utilization, all while striving to maintain customer loyalty and sales. We are there to support them every step of the way. As we have highlighted previously, Walmart plans to spend CAD 3.5 billion over the next five years to make the online and in-store shopping center experience simpler, faster, and more convenient. This continued commitment to its retail operations in Canada speaks to the ongoing strength of Walmart and its growing ability to drive traffic to our centers. As you know, virtually all of our revenues from shopping centers are from open air centers, providing a safe and comfortable environment for customers to practice physical distancing while shopping for their everyday needs. For Q2, we completed nearly 260,000 sq ft of new leasing, improving our lease occupancy to 97.3%. With regard to our premium outlets, both are now open and are at full occupancy. While sales were impacted during the period when they were operating only with curbside pickup, since reopening, we are seeing traffic counts that are already approaching the pre-pandemic levels of 2019. Sales have shown great resiliency with higher conversion rates than in the past. With the pent-up demand and accumulated savings being reported and the recent reopening of the U.S.-Canada border, we hope for and expect a strong fall and Christmas shopping season. By June 30th, we had completed nearly three million sq ft of renewals, nearly 73% of 2021's maturities. Finally, while small independent retailers make up only 6% of our contracted rents, they are an important component of the Canadian economy and our portfolio, deserving of our focus and assistance throughout this period. As Mitch said previously, we are built for heavy weather. Our high-quality portfolio will continue to adapt, intensifying with residential and other real estate asset classes, strengthening with an expanding tenant base, improving customer traffic and a leading occupancy rate, and of course, reliable and growing cash flows. Now I will turn it over to Peter Sweeney. Thank you, Rudy. Good afternoon, everyone. We have continued to focus on further fortifying the strength of our balance sheet, even during these most uncertain times. In this regard, we note the following highlights for the second quarter of 2021 as compared to the comparable quarter in 2020. Number 1, in keeping with our strategy to repay maturing mortgages and to grow our unencumbered pool of assets, unsecured debt in relation to total debt increased to 70% from 65%. Our unencumbered pool of assets continued to grow, increasing by approximately CAD 293 million to CAD 5.9 billion. As we maintain our strategy to continue to repay these maturing mortgages, we expect these metrics to further improve in the future. Please note that this strategy permits us further agility when considering opportunities and alternatives for a portfolio of mixed-use developments. Number two, our BBB high credit rating from DBRS permits us to continue to attract debt capital at low interest rates for longer terms. In keeping with our strategy to take advantage of lower interest rate environments and pursuant to our refinancing activity over the last 12 months, our weighted average interest rate for all debt continued to decrease and at the end of the quarter was 3.27%. This compared to 3.46% for the prior year. This 19-basis-point reduction is expected to yield approximately CAD 8.5 million in savings in annual interest expense, while concurrently, we have extended our weighted average term of debt to 5.3 years as compared to 4.8 years in the comparable prior year period. Variable rate debt in proportion to our total debt stack was approximately 3.9% at the end of the quarter. This continued focus on both increasing the weighted average term of our debt and fixing interest rates is deliberate and is yet another example of the risk mitigation strategy that we have employed to insulate the trust from interest rate volatility. Lastly, number three, our interest coverage ratio, net of capitalized interest, was maintained at a very strong 3.8 times level. This, in spite of the impact that COVID-19 has had on our operating results over the last 15 months and further confirms the foundational strength and stability of our core business. Also, our adjusted debt to adjusted EBITDA multiple was 8.2 times, as compared to 8.8 times in the prior comparable period. Again, reflecting the business's strong and stable ability to fund its obligations with our continued commitment to our balance sheet. From a liquidity perspective, as we look to the immediate future and continue to manage through the current uncertain capital markets environment, in addition to the conservative debt metrics noted previously, please also consider that when factoring in our new CAD 150 million line of credit that was completed subsequent to the end of the quarter, together with the CAD 250 million accordion feature associated with our existing undrawn CAD 500 million operating line, our liquidity position exceeded CAD 1.1 billion at the end of the quarter. This after reflecting the repayment of CAD 323 million in maturing Series T debentures prior to the end of the quarter. Recall also that the next series of debentures in our portfolio does not mature until May 2023. Notwithstanding the challenges associated with COVID over the last 18 months, our business has continued to demonstrate its ability to generate sufficient cash flow to fund our operating needs. Accordingly, we anticipate our requirement for additional funding over the next 20 months to be limited to construction financing associated with the projects in our development pipeline. However, we are continuously considering opportunities to early redeem debentures and mortgages when appropriate. With that, I will turn it back over to Mitch. Thank you, Peter. Sorry, I was muted. We will now open it up to your questions. Just to remind everyone to queue up for a question, please press star one on your phones. The first question we currently have in the queue comes from Mario Saric from Scotia Capital. Please go ahead, Mario. Hi, good afternoon, and thank you. One quick question on the development pipeline, which is clearly very large and very valuable. I think the metrics that you provided on Cambridge alone, CAD 92 million, about CAD 7 sq ft implied buildable, which is extremely low. The question is really, when you look at the vast opportunity that lies ahead of you, how do you think about balancing the vastness of that opportunity with potentially crystallizing a bit more value in the short term? Sorry, Mitch, maybe unmute again. Yeah, sure. I actually got disconnected right in the middle of the question. You were asking about Cambridge's embedded value? I guess the question is, you have a vast kind of development opportunity ahead of you for decades. How do you balance that long-term opportunity with the potential in this environment, given the quality of the assets, to monetize some of that long-term upside into your NAV today via dispositions? Via dispositions? Correct, yeah. Yeah, we look at it. Exactly like you're implying. There are going to probably be situations where we're ready to go on, let's say, Cambridge and Pickering and West side and maybe 1900 Eglinton. Given what that may mean to us and our balance sheet, we might sell something if the price is right. This is something we will be monitoring. If everything we're about to start or are able to start all on the same day, so to speak, we will probably look to that. We're keeping all those channels open. It is a good opportunity at the right price to capitalize on some of that embedded value. We are also involved in exploring the idea of bringing in some potential partners on some of those projects as another lever of raising capital at market. It's also another way of selling a part interest. The CAD 200 million of conditional deals that you highlighted at a low five cap valuation, what were some of the defining characteristics of those transactions that led to the blinded solution? Yeah, they don't have the development intensification potential. One of them has a characteristic that is even beyond that, but I don't want to give away that because it would maybe be, in a sense, effectively revealing what it is, and it's still in the conditional period. For sure, that is a common characteristic, is that we don't see them as having any intensification or redevelopment potential in the foreseeable near future. Maybe somewhat related in the MD&A, or I think in your letter to unitholders, you mentioned the expectation that we could start seeing some fair value gains from your IPP portfolio. Would that be kind of correlated to the pricing that you're seeing on these types of transactions? Yeah. We do see we have more options. We were fine even a year ago. We did not slow this program down, and we also may have even accelerated it a year ago. Now we do have a tiny bit of a, maybe, I don't know, maybe a little bit of a headwind in respect of our options on the number of these properties that weren't available a year ago. Yeah, we have increasing leasing interest. Interestingly enough, it's not all retail, but also retail and then development options as well. My last question is maybe shifting focus to the operations. Q2 showed a vast improvement in terms of same-property NOI growth, both kind of including, excluding bad debt expense. Do you have any color or guidance in terms of when you think the same-property NOI growth could turn positive when we back out the bad debt expense year-over-year? Rudy, you want to take a shot at that? Yeah. As you know, in the same quarter last year, we had a significant ECL provision, and that provision got smaller into quarter three and smaller into quarter four. It's significantly less in this year, as you know, and we've only seen an increase in tenant interest and an increase in the cash flows coming in. Depending on when the tenancies had taken their CCAA and bankruptcy filings in the prior year, Mario, and when it happened in terms of through the trustees, and when that happened because those tenancies paid rent throughout the bankruptcy period, called occupancy rent, as you know. Those rents carried on, but those ones that did not go through it, we ended up taking that provision. When we see it through the three months in June and we see it in September, we expect that this will continue the improvement over the next two quarters. We know what it is now in terms of the variance. Same property excluding was negative. We see improvement in each of the next two quarters. Okay. Thank you for the color. That's it for me. You're welcome. All right. Next question comes from Sam Damiani from TD Securities. Please go ahead, Sam. Thank you. Good afternoon, everyone. Rudy, just back to the leasing side. Could you talk about, I guess, the most challenged categories in the tenancy today and what your outlook is for those tenants after the rent subsidy ends? I have a follow-up question as well. Sure, Sam. It hasn't changed. The ones that are most affected, and again, we don't have a lot of these, the very small independent tenants that are non-essential tenants who were forced to close. We have about 6% of that in our portfolio. They are the most affected in our portfolio. Again, knock on wood, there's been no filings this year in our portfolio in the open format. It's been great. The tenants who are carrying on, and some are still struggling to pay their full rents, given that you've seen the 95% recovery. They're paying part of their rents, and they're paying as they get their CERS funding from the government. That will carry on, and we are putting in place deals for every one of those tenants to help them, to help defer rent. In some cases, as you saw with the lower rent, to lower their rent in the short term and help them recover that in the medium and longer term. Apparel, small tenants, fitness struggled, as you know. Sit-down restaurants would be another category that struggles because, again, they did pickup. They did outdoor when the weather is good, but when the weather isn't good, they can't do that patio. Right now, with everything reopening, there is a big resurgence of interest. It's amazing what started happening in the middle of the second quarter, and then throughout the quarter and even now. We're seeing some very welcomed improvement. Just on the fashion and the fitness side there, not really weather dependent for their operations. How are they doing with the reopening in Ontario? As you know, they're all open. Everybody's open across the country and in Ontario. Limited in Ontario in terms of doing fitness and outdoor activities. As you know, the fitness guys did receive funding and did receive government and bank funding and stayed open. They're still open. They're operating. They're paying their rents. They're expecting a resurgence, people coming back with the double vaccinated. Whether they implement that as a mandate coming into their premises or not is still all up in the air, as you know. There is a very bullish sentiment of our tenants in the open format space, especially because the traffic has just been very good throughout this period. If that traffic wasn't there, again, we're getting the interest from closed mall tenants of similar types of tenants. By the way, even fitness wanting to be now co-located in Walmart anchored centers. Yeah, it's been very positive. Thank you. Just lastly, with the headlines we're all seeing about the Delta variant, is that presenting a bit of an obstacle in terms of closing lease deals these days? In closing lease deals? Not really. In Canada, that may be an issue in the U.S., but in Canada, we've been carrying on. We are still exercising our good diligence from a social distancing perspective in our properties, in our premium outlets, in stores. This hasn't really been an issue here in Canada. The numbers are small as you know. We monitor it across the country, municipality by municipality. It did heat up a little bit, as you know, in Alberta. It did heat up a little bit in parts of Vancouver. Generally, people are outside, and they're shopping. Our open air format really makes a big difference in that arena, if you will, as opposed to the enclosed mall type. Not really seeing, and again, things may change, but not really seeing an impact in our portfolio. The interest is just, again, ramping up. Okay, great. Thanks very much. Thanks, Sam. All right. Next question comes from Jenny Ma from BMO Capital Markets. Please go ahead, Jenny. Thank you, and good afternoon. I just want to revisit the question about your expectation of booking some more fair value gains over the next few quarters. You had mentioned that some of it is coming from some development costs that you're seeing, but I'm just wondering if you could give us some more color on sort of what's driving that view. Is it a reversal of some of the write-downs you took from last year? Is it changes in cap rates or rents? Maybe just a bit more color on what you think is going to drive that over the next few quarters. Well, okay. Rudy or Peter, you want to? Yeah. Jenny, it's Peter Sweeney. What we're hearing, Jenny, from the appraisal groups and professionals who assist us in our portfolio valuations every quarter is that there continues to be, or there has certainly been a return to the marketplace of institutional investors chasing investment-grade properties, including retail properties. There's, again, a robust level of demand for these types of properties in the marketplace, resulting in further compression in cap rates. As we went through the quarter and as we went through the property valuation exercise, all of the appraisal groups with whom we work had the same comments and the same theme. That as we think about the balance of the year, again, all things being equal, that we should expect to see some compression in cap rates and discount rates on our portfolio properties. Okay. Is it fair to say that what the timing would be dependent on is maybe seeing some more data points in the markets to support those valuations? I think it's fair to say the appraisal firms, Jenny, are seeing it already in some of the activity in the marketplace. These are the cap rates being paid or prices being paid on properties that are available. When you translate those metrics and that experience against our portfolio, again, they're suggesting to us that we should expect to see some compression over the balance of the year. Okay. I would add to that, we're seeing more contact. We're getting more calls from different types to potentially enter the space or invest further in the space in, I guess, the last quarter than we have in maybe the last year or so. Incoming interest in your properties? Yeah. Yes. Institutions and others inquiring into whether we would be interested in selling at interesting cap rates. There's kind of this feeling like there's an increase in capital, more of it's moving into retail. Okay, great. Is it really just cap rate, or are we starting to see a little bit more confidence in the NOI numbers? I know last year that was sort of a question mark. Is it firming up or is it really cap rate driven with still some conservative views on NOI and NOI growth? No. On some bottom-feeding kind of, how good a deal can we make here, they're genuinely feeling like, relative to everything else, all the scary stuff around retail just got tested. It didn't materialize quite as advertised. There's, I guess, a calmer, more confident feeling around retail. Okay. Retail is not going away. I'm sorry. The world doesn't work in black and white. Retail's changing, but it's absolutely going to be here for the foreseeable future, for a long time. People are starting to understand that it isn't one or the other. You kind of get the feeling that this was a great test for everybody to watch and observe, a great experiment in a sense. Now that things are opening up, people see what the parking lots look like, and they can understand the seamlessness between e-commerce and in-store. It doesn't seem as if there's this, "Don't talk to me about retail" thing that was irrational but was there a year ago or whatever. There's a certain percentage of that. Also, no, it's not like, how low will you go at all? It's none of that at all. Okay. I'm glad we're all on the other side of that test. With regards to the condo developments, the new ArtWalk project, are you able to talk to us about what kind of pricing or return expectations you're getting? Would the return be to a similar level as you saw for the TC- 1 to 5, or has it shifted at all? Yeah. Just to remind you that TC-4 and 5, which was the latest ones that we went to market on, were sold at an average, I think, of CAD 885, I think, something ±. The property across the road, Festival, they sold out their entire portfolio that they wanted to sell. I think they held back some. I think they averaged over CAD 1,150 a foot. With TC-4 and 5, you know the numbers on that. The REIT owns 25% of four and five. The REIT will own 50% of ArtWalk. You can assume that we're next to the subway. The one I was just referring to is across the road. You can sort of assume that we're expecting to do better on a per square foot basis than we did at four and five. Okay. Yeah, look, our construction prices have gone up. Yeah. That's interesting. It's not nearly in proportion to the pricing difference and the ownership difference. We sold our respective 25% interest to our condo partner there at a pretty good low, as in low price. That was early days and that was also Yeah, that was early days. Okay. The reason we're not doing it in partnership there is simply because we want the REIT to get the benefit of the whole thing, and we built the capabilities. CentreCourt were and continue to be fantastic partners. Great to hear. Shifting to the balance sheet. You continue to make good headway on getting more of your debt to be on the unsecured side, and it sounds like from the commentary that that number should continue to grow. Do you have a goal for that? Is there a specific number in place, or is it just going to be more organic over time as you roll over mortgages and just continue to expand that number? Yeah, I think, Yeah. Do you want me to take this one, Mitch? Yeah, I was just going to say, we're going to keep doing it until everybody doesn't want that and then we'll move on to property-specific mortgages, of course. Peter, go ahead. Yeah. Mitch is right, Jenny. We don't have a specific measurement or metric that we're trying to guide to. However, I think we've said now for a few years that our goal is to, for the most part, replace maturing mortgages with unsecured debt. I think, as we've mentioned, it gives us tremendous flexibility as we think about some of the development needs going down the path or into the future with many of the properties that we're going to be doing mixed-use development on. We're finding that if a property is unencumbered, it gives us virtual certainty on flexibility of putting any type of development on any part of that property without the need to engage with a financial institution on discussing security. Among other things, that's one of the perhaps hidden advantages. I think, in a perfect ideal world, you would see us having a balance sheet that was principally unencumbered, save and except for the construction financing initiatives that we're incurring. To the extent that we've got partners on projects like apartment buildings, if you think about the future, the CMHC is providing very, very attractive low rates, subject to taking security in those apartment buildings. That might be the exception when we think about the future, Jenny. For many of the apartment buildings that we'll be building, we will likely be at least seriously thinking about mortgages through the CMHC for those types of buildings. Okay, great. One last quick question on the CAD 2 million of assets conditional. Are those unencumbered? For the most part, yes. Okay, great. Thank you very much. I'll hand it back. Thank you. Thanks, Jenny. All right. Next question we have comes from Tal Woolley from National Bank. Please go ahead. Hey, good afternoon, gentlemen. Afternoon, Tal. Mitch, I just wanted to ask, I live right downtown in the city. I'm seeing a lot more Penguin PickUp depots over the last little while. I'm wondering, is that business starting to get to a scale where it might make sense to be inside the REIT, or does it not ever really make sense inside the REIT? I don't know if we've ever talked about this before, but I believe a few years ago I mentioned that it's certainly being discussed, and it's a possibility. Yeah, we'll continue to talk about it. There has been interest and inquiries from other entities. Yeah, I wouldn't dismiss the possibility. It's a growing business. It's growing rapidly, both in terms of location and number of parcels that it processes and handles. We've recently signed up IKEA. That's been going gangbusters. Yeah, it's a really cool business, and we're well on our way to going national. We have a decent space in Vancouver. We're getting good coverage in Montreal. Slowly but surely, moving across the whole country. Walmart's online grocery business, they are still running a ship-to, direct-to-consumer, ship-to-home business too, as well. It's kind of hard from the outside to know how serious they're taking that. One of the questions I wonder is just given your relationship with them, is there a way SmartCentres could participate in sort of if they really go fully commit to a ship-to-home strategy that SmartCentres could participate in building or developing some of the infrastructure for that business? I will tell you that I certainly can't speak out of school here on things that Walmart will be probably announcing. We are involved on a number of fronts with Walmart, with a number of their initiatives related to fulfillment and distribution. I'll just say that, like a lot of retailers, part of the future network is going to actually be from the actual retail unit itself. That's going to mean certain changes, potential expansions in certain places for that purpose. We're involved in some other things with them, which we call these special projects, and That'd be something we'll announce sometime in the future. Okay. Just on leasing activity this quarter, the spreads on renewals were a little more muted. Should we anticipate that, given that there's been some acceleration in leasing interest, that'll start to improve? Was there anything specific in this quarter that kind of kept those spreads flattish? Well, the last year was unique, but Rudy, do you want to maybe give some additional color? Sure, hey Tal. Yeah, as you know, the renewals for tenancies happen six months, three months, nine months before the leases actually mature. When we're negotiating a renewal in 2021, that's actually being negotiated in 2020. In 2020, we were in the midst of the pandemic. We did not, as you saw the numbers when we reported last quarter, we hadn't negotiated a lot of the renewals yet because a lot of tenants were wondering what their future would be and not sure they wanted to renew, and if they were going to renew, they would want to renew at much lower rents. We are coming out of it. We are negotiating now going forward for the latter part of the year. The stuff that we had negotiated, and we want to lock up the tenants to keep the cash flows coming in and keep the occupancy doing well and so on, it did reflect that sort of notice period. All of that is to say, we've got nearly three million sq ft of the four million sq ft leased up now. We're about 0.7%. A large part of that, as you know, is Walmart renewals. If you took the Walmart side of there, it would be closer to 1%, by the way, without that in there. Yeah, it is improving, and we only expect it to continue to improve as the outlook continues to improve and this sort of period behind us. The six-month lag in negotiation continues to look forward six months. Yeah, hope that helps. Yeah. Just looking at your numbers, I don't think you guys really disclose new leasing spreads. If I'm just thinking about your commentary, fair to say that we would expect, given the surge in interest, that new leasing spreads would actually be materially better than renewal spreads in the short run? Yeah. When you say new leasing spreads, you mean new leasing spreads in a vacant space, for example, as opposed to new leasing spreads in a new build space, because we're doing both. Obviously in a vacant space, new leasing spreads will be different. Again, coming through this sort of unprecedented time, I would say this is only going to improve. A number of tenants, I'll give you an example. A number of tenants that are looking to come in in the new leasing spreads, come into the portfolio that has never been in the portfolio before, which includes things like logistics or types of tenants like appliance that may be in a quasi-industrial retail or outdoor patio furniture, logistics, last mile kind of Even daycares. The furniture business, for example. You have some of the furniture business in designer depot type centers, as opposed to pure retail shopping centers. We've seen a lot of those tenants move upscale and want to be with the Walmart anchored sites now. We want to bring them in to the portfolio. They add a really good mix in the portfolio when you bring in daycares and medical and logistics and people are doing the hub and spokes. It was mentioned before, Tal, with doing the delivery right out of the premises. As you know, Walmart is doing that. You know a lot of them are doing their click and collect. Best Buy has picked up on that now. Yeah, we see a settling of that space with a lot of newer tenants. They're finding their way into the right mix now that they've sort of come upscale. Grocery stores, by the way. Grocery stores coming into the portfolio, ethnic grocery stores. More of the organic grocery stores also calling us up about a lot of our space, being very interested in being in the portfolio. The resurgence in interest again over the quarter and into this quarter, the third quarter now starting up, has been really good. Okay. For some of the new asset classes that you guys are getting into via development, like self-storage, seniors. Strategically speaking, are you only interested in building out your exposure to those asset classes via development, or would SmartCentres ever look at acquiring a portfolio of self-storage operations in partnership with SmartStop? Same thing on the seniors housing side, because you could scale up those businesses faster because they have an operating component. I don't know. I just wanted to ask that question, too. Yeah, we're not really out to buying at market the finished thing. We've looked at it in a couple of cases where there's some value add for some reason in the property or whatnot. We keep our eyes open at that, as well as other forms of real estate that we're getting into. We can't really find anything thus far that comes close to the kind of returns that we get doing it from the ground up on our own properties, for the most part, in those partnerships. I wouldn't look for a lot of that happening. Who knows? Up the road, there might be opportunities, so we'll keep that option open. Okay. That's great. Thanks, Alan. Thanks, Alan. All right. Next question comes from Pammi Bir from RBC Capital Markets. Please go ahead. Thanks. Hi, everyone. Mitch, going back to your comments on bringing in partners on some of your sites, can you maybe just describe the appetite from potential partners, whether it's financial or development partners, in markets like Cambridge or other markets outside of some of the major markets, and how that compares to, let's say, a VMC or some of your major market assets? Yeah. We don't know yet because we haven't actually really tested it, but we're about to. I would only say that it feels like there's just on a sort of a preliminary informal basis that there's a lot of interest, and it would be from all of the above. Because some of our properties are substantially rental, some of them are mixed condo and rental, some of them are one phase, not that many of them, but we do have some that are one phase, and we have some that are multiphases. Look at, say, Cambridge, it might be five phases. Does that entity buy into 50% or whatever of the first phase? Does that entity buy into the entire center with its fives phases? That kind of thing, I don't know yet. We're open to all of it because we find the right partner and everything. If the metrics or economics are right, we're okay with bringing someone in for all 5 phases now, if we come to terms or just doing the first phase. We're pretty optimistic that because we're that flexible, that we're going to be able to find a few good fits, and you'd be surprised at how many properties there are. We keep mentioning Cambridge, West Ridge, 1900, but there's 407, there's Kemptville, there's Alliston. There's Pointe-Claire, there's Kirkland, there's Mirabel, there's Mascouche, there's Laval. Montreal, by the way, is pretty hot. There's Saint-Jean-Paul. I could go on and on. There's a lot of them. There's more that I didn't name there that are candidates for this. With all that and the flexibility, I think we're rightly optimistic that we'll be able to find some entities out there that would be good partners, good fits for us. Yeah. No, for sure. I feel like the list gets longer every quarter in the press release, in the MD&A, it's definitely been expanding quite a bit. In terms of maybe just coming back to the CAD 200 million of dispositions I think that you mentioned were conditional. Can you just again provide some context on the markets that those are in and are they sort of fully occupying stable assets or was there some repositioning work required? Yeah. We're sort of trying to stay away from naming them in fairness to just everybody involved, the acquirer and just it's not ideal if they don't go through and we want to go back to the market. Suffice to say that one of them is just not our bread and butter, and it doesn't have any sort of future intensification of any type. That's one of the criteria for deciding. Also, that asset I'm referring to, we're leaving upside for somebody who wants to look at and lease it and grind through that. Yeah, if we don't sell it, that's what we were going to do. We don't mind leaving that for somebody else because it doesn't have the redevelopment potential. Maybe if it's okay, I don't want to get into the geography of them yet. Suffice to say, they weren't on our list of redevelopment properties. Got it. Again, maybe would it be fair to think that it's quite possible for the REIT to look to sell, let's call it CAD 200 million of maybe income-producing assets over the next 2 years, sort of on an annual basis? Or is it really not that much in terms of what you would consider perhaps non-core assets in the portfolio? We're going to pull on that bringing in some potential partners on the development properties as a capital raising exercise, one of the capital raising exercises. I don't know that we could say we're going to have this predictable annual disposition program. We are looking to raise the amount of capital that will keep our balance sheet conservative. We're looking at everything all at once holistically. I wouldn't be surprised if we do dispose assets as the years go on. That would help with that. We won't know to what extent that will be until we finish this other initiative. Core is not necessarily just something that can be redeveloped. We've got assets in certain markets that are just Walmart, a bank, Beer Store. It's a blue chip in a smaller market. That's very good income. Not easy to replace income. It's not just whether it's redevelopable or not. We don't have a lot of non-core assets, but if necessary, we could sell core assets in the future if it was in the service of executing our plan, assuming our plan continue to make sense. Got it. Maybe just one last one for me. Maybe it's a two-part question for Peter. Peter, just your comments on potential fair value gains through the back half of the year. Would any of that include density value, meaning marking any of the land values up to perhaps the sites that are zoned, sorry, to their value per buildable square foot? Secondly, can you just remind us on the development spending over the next, call it one to two years? Pammi, on the first question, the simple answer is no. The appraisers that we're speaking to are not suggesting that their value bumps are a function of enhanced entitlements and additional density on the site. Really all we're talking about are opportunities to improve values on properties based on compressing cap rates and discount rates. I'm sorry, Pammi, what was your second question? Yeah. The second part was just if you could remind us what we should expect from a sort of? Oh, development spend. That's right. Yeah. I think our expectation, Pammi, is for 2021, we're in the CAD 200 million range in development spend. These are preliminary numbers, and they're always changing. Mitchell said earlier, we have every opportunity to pull back as necessary or advance forward as appropriate. For 2022, at least for now, we're looking at about CAD 250 million. That's great. Thanks very much. I'll turn it back. Okay. All right. Next question comes from Dean Wilkinson from CIBC World Markets. Please go ahead. Thanks. Good afternoon, everybody. I'll just keep it to one question. Peter, with CAD couple 100 million dollars of non-core sales and the potential for some market gains for the back half of the year, that's going to naturally de-lever the balance sheet a fair bit. In the context of how cheap debt is, are you comfortable where the leverage is right now, or is there an opportunity to take that up? Well, I think Mitch earlier mentioned, Dean, that we're always trying to ensure that the balance sheet maintains its level of conservatism in every possible way. All of us know that we've got this, I would call, robust pipeline of development initiatives ahead of us, and it's fair to say that those development initiatives will require large amounts of capital. Some of which will be debt, and as Mitch mentioned, a big part may be additional equity as well. When you do the modeling on those needs going into the future, Dean, I think it's safe to say we'd rather think about the future from a position of strength rather than jeopardizing or perhaps putting ourselves in a position where we might have to limit those opportunities and development initiatives down the road. If we think about raising capital, as Mitch mentioned, in selling partial interests to new partners, number one. Number two, to the extent that there are value bumps associated with the IFRS increments, and those two initiatives result in improved debt metrics, I think that's just an opportunity for us to establish really a new level for the balance sheet. If we think about the future, all other things being equal, if we don't raise another nickel of capital and perhaps there is no further compression of cap rates, et cetera, and we have to use that as our anchor point for incurring additional debt in the future to accommodate the development pipeline, I think it's fair to say that we think we'll be in a good position. We've said this now many times over the years, our primary limiter or governor are our overall debt metrics, and we'll never jeopardize the balance sheet. We've spent a lot of time and committed a lot of resources to ensure its viability long-term. We do have the opportunity as we move into the future with these development initiatives to pull back as we see necessary. What does that mean? It means that at 45% or 46% debt to total assets, that we're comfortable at that level. Again, given what we've discussed on this call, we would see those levels declining between now and year-end. That will put us in, we think, a strong position to move forward with some of the development initiatives that Mitch had mentioned. Perfect. Thanks. Sure. I'll just add to this and say, we don't have to do anything. We do have a great portfolio and so as it is, we're not going to do anything unless it is safe, and safe includes debt levels. Really the only thing that really could bite us, and has bit lots of people smarter than me and smarter than us in the past because it's very seductive. Been there, done that and rather be on the ground wishing we were in the air, than in the air wishing we were on the ground. Wise words. Operator, are you there? Yes, I'm here. Any other questions? Not at this point in time. All right. Okay. If there are no further questions, we'd like to thank everybody for joining us today, and we look forward to being in touch. Thank you. Ladies and gentlemen, this concludes the SmartCentres REIT Q2 2021 conference call. Thank you for your participation, and have a nice day.