BTB Real Estate Investment Trust

TSX:BTB.UN

Earnings Call Transcript

[Operator]

Good morning. My name is Sylvie, and I will be your conference facilitator today. At this time, I would like to welcome everyone to the BTB Real Estate Investment Trust 2020 Second Quarter ended June 30, 2020 Financial Results Conference Call. [Operator Instructions] Should you wish to follow the presentation in greater detail, management has made a presentation available on BTB's website at btbreit.com. Investor Relations, quarterly and annual meeting presentations. [Operator Instructions] Before turning the meeting over to management, please be advised that some of the statements that are -- that may be made during this call may be forward-looking in nature. Such statements involve numerous factors and assumptions and are subject to inherent risks and uncertainties, both general and specific, which give rise to the possibility that predictions, forecasts, projections and other forward-looking statements may not be achieved. A number of important factors could cause BTB Real Estate Investment Trust's actual results to differ materially from the expectations expressed or implied by such forward-looking statements. The risks, uncertainties and other factors that could influence actual results are described in BTB Real Estate Investment Trust management discussion and analysis and in its annual information form, which were filed on SEDAR and on BTB's website at btbreit.com. I would like to remind everyone that this conference is being recorded. Thank you. I will now turn the conference over to Mr. Michel Leonard, President and Chief Executive Officer; and Mr. Mathieu Bolte, Vice President and Chief Financial Officer. Michel Leonard -- Mr. Leonard, you may begin.

[Michel Léonard, President, CEO & Trustee]

Thank you, Sylvie. Thank you for participating in our conference call. I welcome the participation of Mathieu this morning as it's his first conference to the market. Mathieu has been with us since the 25th of May and has led the preparation of our results together with the help of Benoit Cyr, our ex CFO. And has shown some initiative, as you've seen this morning, if you're following the presentation, sort of live on our website. We will begin at Page 4 with the Q2 2020 operating highlights. So our team was definitely focused as we navigated through the COVID crisis and produced extremely robust results regarding our rent collection. Also, our portfolio has shown its resilience, given the 97% collection results. Obviously, the segment that was most affected by the COVID was our retail segment, but it is based on necessity grocery-anchored national retailers. So we don't own enclosed malls. And as a result of this, our retailers or the majority of our retailers were opened as they were deemed to be essential services throughout that period. Others were closed, but the majority of our attendance remained open. And in Quebec City, we saw the reopening of the retail segment in our properties, given that we had -- our attendance had access directly from the street to our retail properties. And as a result of this, on May 4, the properties in Quebec City was reopened. And a little bit later -- a month later, the Montreal properties were reopened. We have experienced limited exposures to bankruptcies. We have a tenant called Sportium, where we leased one building on the South Shore of Montreal. And we reported that they had filed for protection, and they disclaimed all of their leases operating under the Sportium banner, including ours and the lease will end for that location on January 31, 2021. We also have Reitmans that has filed for protection. We have 5 locations with Reitmans and we have received agreements where they will keep open 4 of our 5 locations and the location that we will abandon is the location that operated under the time maternity banner, and it's roughly 3,000 square feet. The last one is Aubainerie in Gatineau, which is a store that was not necessarily part of the chain, but somebody operating under the name of Aubainerie that decided to file for bankruptcy. And we own this property on Montreal Montclair Boulevard, 50%. So hence, the consequence of that bankruptcy is less on our portfolio. Mathieu will dive into the details of the different fair market value adjustment that we made and also the allowance for bad debt that negatively impacted our payout ratios. You will see how these were calculated. We did adjust our dividends to preserve our liquidities, and we feel that, that was a prudent financial decision. And also on June 30, we sold 1001 Sherbrooke, providing additional liquidities to our trust. I'm turning the page to Page 5. You'll see that our committed occupancy is at 92.9%, and our gap between the committed occupancy and the in-place occupancy has narrowed tremendously over the last quarters. We have a 1.8% growth in NOI. We are showing 97.7% of Q2 rent collections. Our FFO per unit at $0.075 cents a we've renewed 307,000 square feet of leases during the first -- the two 1st quarters of the year. And we're seeing our debt ratio down to 50 -- total debt ratio down to 58.6%. So how did we navigate them, turning to Page 6. How did we navigate through, obviously, the COVID pandemic? We -- early in the process, we created a task force in order to analyze requirements, to establish our protocols, to have a clear and rapid channel of communication with our clients. And obviously also have special task force in order to collect our accounts receivables. And to find and analyze and determine if we were going to participate in the CECRA program of the federal government, and we have decided in order to assist our tenants in this difficult period, we did decide to join the program and participate in the CECRA program. We did negotiate certain rent deferral programs and the percentages, of which are going to be discussed by Mathieu. And we are in the midst of finalizing the CECRA program as we understand the deadline for filing the applications is August 31. So we're in the midst of finalizing all these filings. I'm turning to Page 7. Our rent collection. You'll see that from our suburban office portfolio, we don't really have high-rise office buildings. It's mostly suburban where our tenants can, without taking an elevator, can access their premises. So in the office segment, we have almost 98% of collection. In the retail, at 89.3% for the quarter. And again, I think that the results of 89.3% as compared to certain others, is basically based on the fact that we have necessity centers, grocery-anchored centers and basically power centers or open air centers. In the industrial sector, 99.5% collection. In the mixed-use sector, 99.6%. So total collections in Q2 at 97%. Also, we received confirmation from the provincial government, the Quebec government, that they will increase the subsidy order of 12.5%. And this increase in subsidy is not reflected in our numbers, as it was announced on July 28. So as a result of this, if we do factor it, we believe that our total collection is going to be a 97.7%. The subsidies -- the loss of -- through the 25% or the 12.5% after factoring the grant of the provincial government is going to lead us for the 3-month period to a loss of $275,000. We did have tenants, as I mentioned earlier, seeking protection and they had limited impact on our portfolio. We did increase our bad debt provisions to reflect these events. And again, Mathieu is going to talk about it. But one thing that's very important to us is the fact that the repositioning of our portfolio has really determined and showed this trend based on the diversification generated as we saw it in our collections. We did -- I'm turning to Page 8, we did implement certain measures in order to manage our cash. We negotiated with our lenders, monthly interest payment postponements as well as capital repayment waivers. We did negotiate municipal tax payment deferrals. We reduced our capital expenditures and there were efforts by the trustees and the senior management and our employees to defer parts of the variable compensation that was payable for the year 2019. And the trustee, as mentioned, in order to preserve and ensure our future, we did reduce our distribution in May and the distribution payable in June. Regarding our leasing and renewal strategy, I think that our results, again, are robust. We did see a slowdown in the leasing activity during the confinement period. But we saw that still our tenants wanted to renew their leases. So 67.7 -- 67.1% of our leases maturing in Q1 and Q2 were renewed. We're currently under negotiation for 256,000 square feet across all our business segments, and that includes certain 2021 renewals. 66,000 square feet of renewals are to be concluded this year. And so far, we did not receive notices of nonrenewals from this 66,000 square feet of potential renewals. After June 30, we did close 83,000 square feet of leases that were expiring in 2021. And a total of 245,000 square feet were concluded year-to-date in that -- for that year. So it is important to note that not only do we have activity on lease renewals for 2020 expirations, but we do conclude lease renewals for the year 2021 and 2022. So there's still velocity and it's really showing a very positive sign.So regarding the conclusion of new leases, we concluded 26,000 release vacant spaces for 26,000 square feet during the Q2. And so a total of 51,000 were leased for the cumulative period of Q1 and Q2. Regarding our business plans, we're roughly late of about 25,000 square feet. So the velocity is picking up regarding the leasing aspect of our vacant spaces. But as far as our business plan for 2020, we're slightly late in execution, which is not necessarily a concern for now for us. 375,000 square feet were available to lease by the end of Q2. And that was down 20 basis points from Q2 2019 and up 50 basis points versus Q1 2020, following the sale of 1001 Sherbrooke. The average rental rate of our expired and renewed leases during the Q2 decreased by 1.4%. And that's explained by the office sector going up by 3.1%, the retail sector going up by 8.7% and our mixed-use segment going down by 10.2%, and that's caused by the negotiation of a specific lease renewal in Québec City, where we had a tenant renewing for 20-some thousand square feet and experiencing a reduction in the face rate for the transaction as this lease was concluded on an as-is basis. So therefore, for the cumulative 6-month period, the average rate of expired and renewed leases increased by 2.3%. Regarding our capital allocation, I remind you that in February, we did purchase a property Queensview Drive in Ottawa. And our Ottawa properties did perform extremely well, as Mathieu will touch upon during this presentation. We did sell Cote-de-Liesse property, the Ingersoll industrial property in London -- suburb of London, Ontario, and we did conclude the sale of 1001 Sherbrooke St. East. This property, the sale price was $21.6 million, and this property was generating approximately $600,000 of NOI. So if you do calculate the purchase price versus the NOI, you'll see that the cap rate doesn't make any sense. And that is a great justification for us to have jumped on the sale of this property. So we did buy 4 properties in the last few quarters. We sold 5 properties. And the revenues from the 4 properties generated from these 4 properties are $2.5 million, and the revenues from the 5 properties that we did sell were $800,000. Hence, we saw an increase of $1.7 million on the revenues based on the repositioning of the portfolio. So we do have 5.3 million square feet divided amongst 64 properties and the value of which is $895 million. And the office segment is the dominant segment that's almost 40%. The retail segment at 26% and the industrial segment at 22.6%. So now I'm turning the presentation to Mathieu. Turning to Page 12. Mathieu?

[Mathieu Bolté, VP & CFO]

Great. Thank you, Michel. Good morning, everyone. I'll start on Page 12, as we dive into the financial results, and I'd like to show the impact of the COVID on our key matrix and the run rate. BTB was on a good trajectory and the pandemic created a short-term impact. So our NOI this quarter was $12.4 million, with $0.5 million impact due to the 25% rent abatement basement for tenant under the CECRA program as well as some specific rental abatement. This was partially compensated by cost productivity for not fully operating our retail stores for a period. [ Our Trust ] expense for the quarter was increased by $1.1 million for specific tenants impacted by the pandemic and a noncash expense of $3.6 million to reduce the fair value of 2 properties. Year-to-date, we have written down $10.5 million of the value of our assets due to new market conditions, which we started to adjust in the first quarter. In Q1, we did an adjustment of $6.9 million by increasing the cap rates by 25 basis points of 12 retail properties. So overall, if you look at the whole impact of the COVID, its $0.025 on FFO and AFFO. On Page 13, we show increases in rental revenue and net operating income, respectively, of 2.8% and 1.8%, so mainly due to the contribution of recent acquisitions, as discussed by Michel. The same-property NOI decrease of 7.1% was largely driven by the COVID impact mentioned previously. However, looking at the different regions, we'll see the following: so for the region of Ottawa, it has seen an increase of same-property NOI of 15.4% from the same period last year. And has not been impacted by the crisis due to the tenant mix. So this is a good story for Ottawa.The portfolio in Québec city shows a minus 9.7% same-property NOI, with roughly minus -- 6.5% coming from 2 power centers, and there are lots of percentage rents during the 3 months. The region of Montreal, same-property NOI was relatively stable with a significant increase in the industrial sector offset by a negative performance from one power center, again, mainly due to the percentage rent and the rent reductions related to COVID. For the whole portfolio, the average rental rate of expired and renewed leases year-to-date have shown good increases for the industrial segment by 9.2% and for the retail segment by 7.4%. Moving on to Page 14. FFO per unit was $0.075, down from $0.095 for the same quarter last year. Our FFO payout was 113.9% versus the same quarter last year at 110.5%. AFFO for the quarter decreased to $0.065 per unit from $0.085 for Q2 2019. And our AFFO payout ratio was 126.6% versus 123.3% in the same quarter last year. So the decline of the FFO and AFFO is primarily due to the increase in bad debt expense and the adjustment for the CECRA programs specific for this quarter. As previously noted, we have said that the pandemic had a negative impact on our FFO and AFFO for $0.025 per unit. So if you just adjust the impact of COVID on BTB operating performance, the FFO per unit will be $0.10 with a payout of 85%, and the AFFO per unit would be $0.095 with a payout of 92%. And it's important to mention that the payoffs have be adjusted during the quarter to reflect the reduction of our distribution by 28.6% that was announced earlier in May. On Page 15, BTB remains committed to continuing the effort in reducing the leverage and the weighted average interest rate of our debt and increasing the flexibility with our credit facility. As of Q2, the weighted average interest rate was 3.75% compared to 3.93% in the same quarter last year. So we've managed to decrease the weighted interest rate by 18 basis points. And we might as well to benefit from the current lower rate environment in our refinancing. Our debt to gross book value was 58.6% at the end of Q2 compared to 61.4% a year ago, so it's down 2.8%. And we continue to be -- it continues to be a focus for us to drive our leverage down. Also, the liquidity at Q2 stood at $27 million, of which $22 million in cash and $5 million available under our credit facility. And just to mention the last year of the quarter, and Michel talked about that as well, BTB sold one office property in Montreal for $21.6 million, and we had to pay the related mortgage of $9.9 million in July 2, so just the following 2 days later. In addition, we have $3 million to pay at the end of the quarter for tax breaks that we received from different cities. Moving on to Page 16. Our commitment for the rest of the year totaled $87 million, of which $28 million of mortgages have been refinanced in July with favorable interest rates. Two mortgages for a total of $32 million are in the process of being refinanced, and we are confident with the execution. And as far as the debenture Series F with a maturity this December, so we're now working through the refinancing by year end. Okay? So with that, I'd like to turn the call over to Michel for his closing remarks.

[Michel Léonard, President, CEO & Trustee]

I think that we're very proud of our results this year. Obviously, everybody within our sector has been hit hard by the pandemic. But I think that our results and our resilience are proving that all the different sale of properties, repositioning and strategic plan that we did put in place. Had it not been for the pandemic, as Mathieu mentioned, our FFO would have been right now at 85% and our AFF was 92%. So we know that we are on the right path and that we are continuing to monitor our situation to ensure that we are on the right path. We saw, as mentioned, an increase in our total revenues as a result of having better position properties and properties that are producing at the right level. This is -- we anticipate that this would be touching wood. This would be the worst quarter for BTB in 2020. We don't see any signs of additional problems under the horizon. And hopefully, our Q3 and Q4 are really going to show the resilience of where -- what we are, where we are and how the -- we're managing business. I think that the provisions that we did take into consideration during this quarter is conservative. And did affect our results negatively, but we felt that it was important to take whatever we had to take in this quarter in order to put ourselves into the right path for Q3 and Q4. And I'd like to remind you that our book value remains at $5.40 and even after all the write-downs that we did take into account in our results. So Sylvie, with this, I'd like to give the floor to analysts if they have questions.

[Operator]

[Operator Instructions] And your first question will be from Matt Kornack at National Bank Financial.

[Matt Kornack, Analyst]

With regards to collections and portfolio performance, can you provide some commentary? And I'm not sure if you have incremental commentary on how things have gone, sort of, over the course of the pandemic and into August. And also, do you have any commentary on how sales may be trending within the retail portfolio, now that things are reopening in Québec?

[Michel Léonard, President, CEO & Trustee]

I think that our collections -- obviously, the month of April and the month of May were very difficult on the collection front. We had to create, I mentioned earlier, a task force, and we had to concentrate our people on the collection front. And obviously, certain postponements of rents and the percentages we disclosed, the percentages regarding those postponements. And really understanding the overall program that the federal government was offering, which was not that easy to understand. And there are certain people that are calling me landlord. They are calling me in order to get a better understanding, albeit, I mean, 15 days away from the deadline. But -- so it's not something that is that user-friendly. Also, they've put in administrators in the program, and that has basically complicated the process as well. But overall, I think that our employees have been stellar in this process. And the way that we've handled it. I think that from day 1, we concentrated ourselves, and we're able to get to where we are today, where I think as we're way ahead of the curve. What we did not anticipate, though, is the fact that the federal government has extended the program for the month of July and August. So obviously, we're going to -- there are going to be cost -- additional costs that we're going to have to suffer as a result of this. And in my opinion, landlords are holding the bag on this one. And it's not very pleasant for the landlord community in general. In July, we did collect 90%, a little bit better than 90% of our rents. So that is showing a very positive trend as far as that's concerned. We have problems, and I'll explain a few problems if you'll bear with me, but it's certain frustrations. But it's not only the retail industry that was impacted, there was some office tenants that were also impacted. You can think about travel agencies like who's traveling today. So there are certain aspects of the office environment that has been affected as well. And there have been people that have basically tried to cry a little bit in order to get some kind of relief from their lease payments. And where these multinational corporations, who have a balance sheet with equity and the billions of dollars trying to beg for rent relief, and that was a very difficult part of our assimilation of the program, and we did not grant rent relief to these types of operators. So it was a very long and frustrating process where we had to deal with each file one at a time in order to reconcile and reach a goal and make sure that it would not affect us. Part of our bad debt is that since we've postponed certain rent payments. Well, we took an additional bad debt of 20% of the rent postponement is that for the rent that we did, in fact, postponed. So part of that charge that we did take is for the postponement because is it going to be -- are we going to receive 100% of those payments under postponements or not? That's a big question mark. So we did write-off a certain portion of it. And obviously, if we do collect 100%, then this charge will be eventually reversed. So I'm just trying to give a little bit of color, but I think that this was the survival of the fittest for the last 3 months. And I think that in the coming 2 months, we're going to have a little bit of issues as well. But hopefully, we saw retail numbers are slowly increasing as far as people visiting the stores. I was on the telephone with one of our retailers. And because we were negotiating a lease renewal and the retailer basically told me that they weren't sure that we're going to keep all the different spaces that they were leasing across the province of Québec because they received a lot of orders through the Internet. And then they adapted their operations where their clients could speak to them directly on Zoom in order to finalize the right products, sign the contract and so on. And ever since they've reopened, then all -- and for the last 2 months, they've seen that their clients are coming back to the stores. So they thought that they would migrate towards a totally -- like an operation that would be totally focused on Internet orders. And now they're saying, no, no, our customers, they prefer to come back to the stores. They prefer to -- they can't shake our hands right now, but they prefer to wear their mask and order the product directly from a person that they can see. So the trend where we saw that all of a sudden, we were throwing the baby with the bathwater, where the whole retail segment was going to be no more. So now we see that the customers are going back and shopping in person. So that is showing a very, very positive trend as far as we're concerned, given the type of assets that we own and that are very accessible. And as a result of these people are going back to the different stores.

[Matt Kornack, Analyst]

And I would assume that now that some of those retail stores are reopening, they wouldn't necessarily qualify in terms of being down the amount of -- or percentage of revenue that they would need to qualify for CECRA. Is that fair? So have you seen fewer CECRA claims as a result of that? Or was it based on sales previous to the months that you're currently in?

[Michel Léonard, President, CEO & Trustee]

We originally estimated, Matt that we had roughly -- I'll round up the numbers, 150 tenants out of 650 that could qualify under the CECRA program. And through this process, right now, we have less than 100 that do participate. And we also see that the number -- we have levers at a certain obligation of due diligence in this process. And we have the obligation to ensure. And sure is a, I think it's a heavier word than what the act calls for. But to do a certain due diligence regarding the loss of revenues that the tenants would have. So the first month that we did go through this program, obviously, the month of April, most were closed, so most qualified under the program. Then in Québec City, they reopened on May 4. As a result of this, they did sales during the month of May. And then in the month of June, there is even more sales. So all of a sudden, the 70% threshold was no longer met. So -- and we saw this progressively through the month. So at first, we thought, oh, my God, 25% we're going to be hit hard. And then as the reopening occurred in Québec City, then we saw that our exposure was getting less and less and less. In Montreal, the same way. Ottawa, we weren't touched by the CECRA program in Ottawa. We have mostly suburban office buildings. Leads to federal government, high-tech companies and the like. And they -- we receive, as Mathieu mentioned, almost 100% of rents from the Ottawa area. So it was really these power centers that created this situation. And as they reopened, all of a sudden, we had a lesser problem. So the -- and I understand that if a tenant qualify for the program for the month of April, May and June, they automatically qualify for July and August. So there is going to be a certain repercussion because it seems -- or it looks like there's not going to be a criteria or a monitoring, an additional monitoring criteria on our part in order to make the application.

[Matt Kornack, Analyst]

Okay. So that's interesting. With regards to occupancy, more generally, and I guess this is forward-looking in nature. But do you have a sense as to how you think things will trend? In terms of leasing, it sounds like you're still doing leasing deals, both new and renewal. But are you expecting more turnover or less retention than typical or the flip side?

[Michel Léonard, President, CEO & Trustee]

No, I think that we're going to be in line with our past.

[Matt Kornack, Analyst]

Okay. Just with regards to, Mathieu, you mentioned on the refinancing side. Two questions. One, for the maturities that you have on the mortgage side, is there any up financing potential on those to help with maybe paying off the debenture? And if not, do you have enough liquidity as it is with the sale of your Sherbrooke property as well as the existing liquidity? Or do you think you'll need to issue another form of public financing?

[Michel Léonard, President, CEO & Trustee]

I'll let him answer the question, but I want to just process something. During the different financing -- mortgage financings that we had to renegotiate during the month of April, May and June, we basically decided to postpone these maturities by 1 year, and we renegotiated the postponement with the lenders right away because we knew that it would have been almost impossible to conclude an up financing transaction. And we do have these properties under these mortgages that matured this year. We know that there was an upside that we could get more. However, through discussions with our lenders, it was very difficult, and you can imagine why, regarding the credit committees and all this. So we didn't see that it would be fruitful. So as a result of this, we decided to just postpone it by 1 year on that front. And that's, again, given the level of interest, we just couldn't go out to the market and look at all the proposals that would have been offered to us. So Mathieu is going to answer the second part of the question.

[Mathieu Bolté, VP & CFO]

Yes. Well, I think we have $32 million left to refinance by year-end, 2 property. I think probably 1 out of the 2, we can have some up financing, and that's clearly under discussion. And as far as the liquidity for the repayment of the debenture, as I mentioned, I think it's something that we're going through at the moment in terms of the plan for the -- to refinance.

[Matt Kornack, Analyst]

Okay. And with regards to how lenders are approaching mortgage debt. Is it asset specific? Is it related to the entity that's taking out the mortgages? Obviously, there's recourse in some cases. I'm just interested, like we've heard from some guys that industrial assets are still fairly popular amongst lenders, and the rates are quite low. But I'm wondering across your portfolio, what you're seeing?

[Michel Léonard, President, CEO & Trustee]

We're not really in the acquisition mood right now, but we do see that -- what I described earlier regarding the month of April, May and June, where lenders were basically on vacation and not responding to calls, we're seeing that the situation is completely different. There's been a turnaround in the situation. They still have money to lend. And as a result, we're seeing the few deals that we saw, we saw that the cost of borrowing has gone down. And because I remember I proposed a rent lease -- mortgage renewal that we were discussing, the Feds have just lowered their main interest rate. And the proposal that we did receive at a flow rate of 4%. So it didn't make any sense. And now we don't see the flow rates appearing anymore. They disappeared. So I think that the climate for borrowing is -- has improved tremendously for the last 3 months. And I think that it will definitely, as Mathieu mentioned, we do have two properties that we could up finance and I think that the climate in September or October is going to be much better.

[Mathieu Bolté, VP & CFO]

And just to add one point, I think it has to do as well with the type of assets factors that we have in our portfolio, assets are a way more liquid. We're talking about the assets between $10 million and $30 million, $40 million. I think what we see from the bank is it would be more difficult if you would, it would be large malls and commercial centers, but it's not really what we're doing. So I think on that side for us, we haven't seen really a lot of difficulty in terms of [ the bank ].

[Matt Kornack, Analyst]

Okay. And you spoke to -- I think we spoke about this in the past, but there's still demand for real estate and the smaller properties seem to be garnering even more attention these days.

[Michel Léonard, President, CEO & Trustee]

Absolutely.

[Operator]

Next question will be from Yashwant Sankpal at Laurentian Bank.

[Yashwant Sankpal, VP & Equity Research Analyst of REIT]

On the -- just want to talk about Slide 7. The deferred payment, what is the dollar amount as of today that you have deferred?

[Mathieu Bolté, VP & CFO]

Now I'm on Page 7. So just what has been deferred in terms of payment from the customer. It's close to -- it's a bit higher than $31 million.

[Yashwant Sankpal, VP & Equity Research Analyst of REIT]

And where do we see that on your balance sheet? Is it account receivables or you showed somewhere else?

[Mathieu Bolté, VP & CFO]

That's right. It's part of the AR, you will see the AR as well increasing.

[Yashwant Sankpal, VP & Equity Research Analyst of REIT]

Okay. And you talked about some new leasing in the quarter. What kind of businesses are looking to lease space at this point?

[Michel Léonard, President, CEO & Trustee]

It's from all our segments. So it is from the office, from the retail segment as well as the industrial segment.

[Yashwant Sankpal, VP & Equity Research Analyst of REIT]

What kind of businesses in the retail segment are expanding or opening new locations?

[Michel Léonard, President, CEO & Trustee]

We have -- for the -- I'll illustrate for the Sportium location. We have a tenant that is hovering around this property. And this is a tenant that's coming from Ontario. And basically expanding its operation in the province of Québec. They have two locations in the province of Québec, and this would be their third location.

[Yashwant Sankpal, VP & Equity Research Analyst of REIT]

Okay. And the CECRA and the Québec government support, is -- are those funds available immediately or the government is taking longer than expected to actually send the money?

[Michel Léonard, President, CEO & Trustee]

When we -- it is -- let me respond to your question this way. It's longer for us to file the application than it is to receive our funds. So it is roughly -- we file and within the next 7 to 10 days, we receive the funds. And we've already filed for certain properties because the process of filing is that once you file for a property, you cannot amend your filing. So let's say that you have 10 tenants in the property and 5 want to participate and you file for 4 tenants, then the fifth tenant for whom you didn't file, then they lose the benefit. So it's a process that means that you have to gather all your information. You have to ensure that the tenants that are -- that can participate in the program are part of your filing. Then you file and within 7 to 10 days, you'll receive the funds. So -- and as I mentioned earlier, the date -- the drop date for it is August 31. So within the next 15 days, we will have to complete the process. And generally, we should expect our funds by September 15.

[Yashwant Sankpal, VP & Equity Research Analyst of REIT]

Okay. And the bankruptcies that you are seeing on the horizon, what kind of NOI impact should we model?

[Michel Léonard, President, CEO & Trustee]

The -- we did -- Sportium was generally paid us net rent of -- I can't -- I don't have that information. If you call me after, I can give you the exact information, but I don't want to direct you in the wrong direction.

[Yashwant Sankpal, VP & Equity Research Analyst of REIT]

No worries. I'll call you.

[Operator]

[Operator Instructions] And at this time, there are no further questions. Please go ahead, Mr. Leonard.

[Michel Léonard, President, CEO & Trustee]

Well, thank you again for participating in our conference call today, hoping that you enjoyed the document that was placed on our website in order to follow the conference, and it could be a good reference document for you. But again, the message is that regarding our retail segment, we don't own any indoor mall. So therefore, obviously, we suffered less than others as a result of this. Our portfolio is diversified, and we have a great exposure to the industrial and office markets. Hence, the fact that it is diversified, has led us to a better collection performance. We have -- our tenants, our investment grade, as you know. And we are -- the repositioning of our market has produced great strength and a lot of new blood into our revenues, and that has contributed a lot to our great performance. So again, we look at our performance on the basis of reducing our costs, making sure that the -- our tenants are well protected under the CECRA program, and ensuring that we are alive and well. And I think that the fact that our portfolio has performed is showing that very positive trends for Q3 and Q4. And with this, I thank you, again, very much for participating, and we'll see you at the next quarter. Thank you.

[Operator]

Thank you, Mr. Leonard. Ladies and gentlemen, this concludes today's conference call. You may disconnect. Have a good weekend.