Good morning, ladies and gentlemen, and welcome to Crombie REIT's Second Quarter 2020 Earnings Call. At this time, note that all participants' lines are in a listen only mode. Following the presentation, we will conduct a question and answer session. Note that the call is being recorded on Thursday, August 6, 2020. And I would like to turn the conference over to Ruth Martin.
Please go ahead.
Thank you, Sylvie. Good day, everyone, and welcome to Crombie REIT's 2nd quarter conference call and webcast. Thank you for joining us. This call is being recorded in live audio section of our website under Presentations and Events. On the call today are Don Clough, President and Chief Executive Officer Clinton Kaye, Chief Financial Officer and Secretary and Glenn Hines, Executive Vice President and Chief Operating Officer.
Today's discussions include forward looking statements. As always, we want to caution you that such statements are based on management's assumptions and beliefs. These forward looking statements are subject to uncertainties and other factors that could cause actual results to differ materially from such statements. Please see our public filings, including our annual information form for a discussion of these risk factors. I will now turn the call over to Dawn, who will begin our discussion with comments on Crombie's overall strategy and outlook.
Glenn will follow with a development update and a review of Crombie's operating fundamentals and results. Clinton will discuss our financial results, capital allocation and approach to funding. And Don will conclude with a few final remarks. Over to you, Don.
Thank you, Ruth, and good day, everyone. The economic and social disruption experienced over the last few months has been truly unprecedented. When the global pandemic was declared in March, none of us knew the duration or kind of impact they would have on our country. We've said numerous times over the last 10 years, Crombie has not only grown and optimized the the quality of our grocery anchored real estate portfolio, but at the same time, we strengthened our financial condition and created an experienced and talented team such that we were ready for the proverbial black swan, in this case, the global pandemic. Our team mobilized quickly with office staff moving to work from home and operations staff preparing our properties to ensure the health, safety and well-being for all visitors.
I want to personally thank our team and especially our frontline team for their resilience and extraordinary work ethic in the face of the elevated risk of COVID-nineteen to keep our customers safe and properties operating. Fortunately for Crombie, most of the space within our portfolio was occupied by tenants deemed essential services and they remained open during the national shutdown. With the economy beginning to stabilize and most businesses reopening across the country, we are pleased that our July rent collection was 93%, an increase from the 90% achieved during the Q2. As restrictions lift, we are happy to say that 97% of our tenants are open for business. Significant strides have been made in recent weeks as Canadians adapt to the new normal.
And while we are cautiously optimistic amidst the worldwide pandemic, we hope the current end of stabilization continues. Not all tenants have been able to weather the recession caused by the pandemic. Our leasing and operation teams have worked very closely with our tenants to maintain strong relationships and provide financial assistance through our Crombie Value Small Business Program or the federal and provincial governments Canada Emergency Commercial Rent Assistance Programs. Additionally, case by case evaluations have been ongoing with select tenants who do not qualify for either of the 2 programs to determine appropriate levels of support for their business. Our strategic partnership with Empire provides a sustainable competitive advantage for Crombie that enables us to expand and diversify our defensive grocery anchored real estate portfolio with strong risk adjusted returns, especially in the major urban markets in Canada, where we are unable sorry, where we are able to unlock the significant underlying land value and do major mixed use residential developments.
We are working closely to align Crombie's strategy with Empire's strategy with an expectation that we collectively drive high quality yet defensive growth consistently and at scale. This alignment includes a 3 year plan to invest in the modernization and expansion of grocery stores, a number of store conversions, including the FreshCo discount format in Western Canada and Farm Boy in Ontario, accelerating Sobeys build out of Voila, their online grocery home delivery service, land use intensifications and the unlocking of major developments. I want to commend the Empire team for their resilience and dedication as they work relentlessly to put food on the tables of Canadians and keep customers safe over the last 6 months. The recent launch of their online grocery home delivery service Voila by Sobeys in the Greater Toronto Area and their announcement of a new 3 year growth strategy, Project Horizon, indicates Crombie is fortunate to have a strong partner that has not only emerged as a leader during the COVID-nineteen crisis, but will also be a leader of the grocery industry in Canada for years to come. Our first 6 major development projects play a key role in our long term strategy to accelerate per unit NAV and AFFO growth.
Despite being well managed by our teams and our JV partners Westbank and Prince Developments, the impacts of COVID-nineteen on our major developments caused some minor increases in costs and slightly delayed expected completion dates. Though some work stoppages were experienced in Quebec, our development and entitlement work continued to forge ahead. We were thrilled to see the Safeway store at Davie Street in Vancouver open in May and look forward to the completion of this large mixed use development, Crombie's first, later this year in 2020. Quality and diversification of our developments and the economic returns, including the significant NAV creation and solid AFFO growth remain of utmost importance to our strategy as we complete $600,000,000 of major developments over the next 16 months. As we have said numerous times, based on current circumstances and valuation measures, we expect these first six developments to be worth a fair value of approximately 750 $1,000,000 to $900,000,000 upon completion, thus creating approximately $1 to $2 per unit of net asset value.
Importantly, we continue to work with Empire and Canada's major cities on the zoning and density entitlements of 7 additional projects to unlock and realize the significant land value embedded in our major urban market grocery stores and generate opportunities to continue our development program into the future. Lastly, I want to encourage investors to use caution in using short term KPIs to judge long term real estate assets backed by a strong financial position and an expert management team. Short term measures are important, but please recognize real estate portfolios and platforms like Crombie's are built for stability and growth over the long term, including their ability to withstand short term shocks as we are seeing today. With that, I'll now turn the call over to Glenn, who'll provide an update on our developments and operational highlights.
Thank you, Don, and good day, everyone. Crombie remains committed to the health, safety and well-being of our employees, tenants, customers and communities. With the reopening of all our properties, our enhanced cleaning activities and operational physical distancing protocols continue to be of critical importance as a protective measure against the spread of the COVID-nineteen virus. Understanding the value of open lines of communication, we have been sharing updates with our tenants on a weekly basis and will continue to do so. Many tenants are faced with substantial changes to the way they serve their customers.
So we have assisted with implementing what is required tenant by tenant, property by property. Our portfolio is well positioned with respect to the defensiveness of our annual minimum rent with 76% of minimum rent generated from grocery and pharmacy anchored properties, 68% of rent from essential services tenants like grocery stores and only 8% of rent from small business. Our largest tenants are investment grade grocery stores, pharmacies, banks and government offices. Over the last few years, we've improved the quality of our portfolio by acquiring assets in Canada's top markets as well as recycling approximately 800 $1,000,000 of properties mostly in secondary and tertiary markets to reinvest in Crombie's major urban developments. The portfolio we have today is strong and improves our positioning for future periods of uncertainty such as what we're experiencing today with COVID-nineteen.
As Don mentioned, during the month of July, 93% of gross rent was collected, an improvement from the 90% collected for the 2nd quarter, which Clinton will detail shortly. We received full rent collection from our retail related industrial segment, 96% of our office rents and 92% of our retail and commercial segment. We believe collections will continue to improve with approximately 97% of tenants already open and we anticipate virtually all our tenants will be open and operational by the end of this quarter. Our tailored approach to rent relief further strengthened our relationships with tenants. To date, we have approximately 260 tenants at 70 properties in the application process for the SICRA program.
Even with the additional support, inevitably, there are still tenants at risk. Since the onset of the pandemic, there have been numerous declarations of store closures, CCA applications or bankruptcies in the broader market. Our defensive and Internet resilient portfolio has minimal exposure to these announced closures with only 17 leases potentially impacted, representing approximately 61,000 square feet or approximately 0.7% of annual minimum rent. To date, only 2 of these 17 leases have been disclaimed, representing approximately 6,000 square feet or approximately 0 annual minimum rent impact, which is an indication of the strength of our properties. Avalon Mall is feeling the impact of the pandemic the hardest.
Avalon Mall was effectively closed from the end of March to early June due to provincial government restrictions. The reopening has been extremely positive with 93% of tenants open for business and a significant improvement in rent collection at 60% for July compared to 42% in the 2nd quarter. Strong fundamentals are critical in these unprecedented times. Crombie experienced a small decrease in committed occupancy to 95.6% compared to our record high occupancy of 96.2% at Q1. New leases and expansions year to date increased our occupancy by 92,000 square feet at an average 1st year rate of $18.95 per square foot, while we experienced 124,000 square feet of year to date net lease expiries, vacancies, terminations and space adjustments.
We ended the quarter with 88,000 square feet of committed space at an average 1st year rent of $21.18 per square foot, which will boost future NOI growth. During the quarter, 230,000 square feet of renewals were completed at a 3.6% increase over expiring rental rates. Year to date, our renewal program is on schedule as we have renewed 386,000 square feet at an increase of 4% over expiring rent. During the 1st 6 months, our retail renewals were solid with 302,000 Square Feet of Retail Renewed at rental increases of 4.9%. As we continue to maneuver our necessity based portfolio through these uncertain times, our team is dedicated to ensuring our underlying business fundamentals and core portfolio remain resilient and strong.
The impact of COVID-nineteen on our major development program, as Don noted, caused some minor cost increases and slight adjustments to completion date. These changes are discussed in the MD and A and I will note them here. We are pleased to report that construction at our Montreal Leduc mixed use development and our Montreal Voila Par IGA Customer Fulfillment Centre or CFC resumed in May after the 6 week government required shutdown. Construction in Vancouver, the GTA, Victoria and St. John's, the homes of our other 4 major projects, were deemed essential and work continued albeit at a slower pace through the quarter with new protocols to ensure the safety of all individuals on-site.
We continue to expect to reach substantial completion in 2020 of our first three major developments, including Davie Street in Vancouver, Belmont Market on Vancouver Island and Avalon Mall in Newfoundland and Labrador with slightly delayed schedules. Investment continues in Bronte in Oakville, Leduc in Montreal and the Voila per IGA CFC in Montreal with substantial completion expected in 2021. We have another 7 projects in pre planning where we continue our work to improve and deliver value enhancing entitlements for each development. In Davie Street, Vancouver, the new Safeway store opened on May 21 with Scotiabank and a government liquor store scheduled to open in Q4 of this year. Total project cost for the retail component increased by $600,000 reducing our expected yield range slightly to 6.2% to 6.5%.
The residential portion is well advanced with construction complete and interior finishing well underway for both towers. Despite construction continuing throughout the pandemic, the estimated substantial completion date of the 3 30 residential rental units has been extended slightly, but will still be completed in Q4 2020 as previously communicated with an estimated increase in total project costs of $1,800,000 reducing our expected yield on cost range slightly to 5% to 5.5%, which is still a very strong risk adjusted return on a high quality residential development in Vancouver. Belmont Market on Vancouver Island will reach substantial completion in 2020 with the final phase of the development consisting of 3 small buildings totaling 23,000 square feet, which will come online in 2021. Construction commenced on the first of these three buildings during the Q2 with the remaining two buildings slated for 2021 construction. Avalon Mall is the only regional mall in all of Newfoundland and Labrador and we are cautiously optimistic that as the economy continues to reopen, it will reemerge and continue its dominance as evidenced by sales of approximately $700 per square foot pre pandemic.
Construction of our expansion area will be substantially complete in Q3 with the grand opening delayed until spring of 2021 due to COVID-nineteen. 92.6 percent of Avalon Mall excluding the expansion area is leased, but due to an expected near term slowdown of leasing activity, we have adjusted our NOI yield on cost range projections from 10.3% to 11% downward in Q1 to an updated 9.2% to 10.1% range in Q2. In Montreal, at our Leduc project, we've experienced some pandemic related completion delay, but still anticipate substantial completion in Q3 of 2021 as previously communicated. This 25 story mixed use tower with 26,000 square feet of IGA anchored commercial grocery and 390 residential rental units as the structure completes to the 25th floor and the project is 89% tendered. Crombie maintains its 2021 substantial completion date for the Montreal CFC, the Empire launch of Bois la Par IGA, the online grocery home delivery service to be made available in Quebec and the Ottawa area is now expected in early 2022, delayed slightly due to the temporary shutdown of non essential construction in Quebec during the pandemic.
Construction commenced in May, foundations are in place and steel superstructure is now underway. The Bronte Village construction site in GTA remains open and has been only marginally delayed due to the impact of a reduced workforce arising from COVID. We still anticipate the 54,000 square feet of commercial and 480 residential rental units will be substantially completed in Q4 of 2021 as previously communicated. Bronte is 96% tendered. Upon completion, we expect these properties to create significant AFFO growth per unit and based on current circumstances and valuation measures, as Don noted, aggregate NAV creation of approximately $1 to $2 per krombie unit and increase our presence in the country's top and improving our overall portfolio quality and income stream.
And lastly, and most importantly, we're not aware of a single COVID-nineteen infection to date on these 6 project construction sites. We are proud of the work that our partners, our contractors and our team have done in focusing on health and safety. And with that, I will now turn the call over to Clinton, who will highlight our Q2 financial results and discuss our capital and development program funding approach. Clinton?
Thank you, Glenn, and good afternoon, everyone. During these challenging times, Crombie remains in good financial health with a strong and flexible balance sheet, ample liquidity and an ability to prudently allocate and creatively source capital. While we are pleased with our 90% collection rate in Q2, which improved to 93% in July and 97% tenant opening statistics, like everyone else, we are unable to predict the future duration financial impacts of the pandemic with complete certainty. The pandemic created increased risk, particularly around the collection of tenant receivables. Our bad debt expense for the quarter was $8,700,000 This includes $1,100,000 expense for the 25 percent rent abatement for tenants under the SECRA program, dollars 2,600,000 expense for other rental abatements and $5,100,000 in the general provision for bad debts.
Bad debt expense for the quarter is 8% of quarterly gross rent, consisting of 1% for Seqra, 2% for other abatements and 5% general provision against the 7% of deferred and unpaid rents. Judgment is required in estimating bad debt expense exposure. Where debt on collection existed, we included those amounts in our Q2 provision, negatively impacting short term NOI by increasing bad debt expense. On a cash basis, same asset NOI decreased by 4.6% compared to the Q2 of 2019. Excluding COVID-nineteen related adjustments such as bad debt expense and a decline in parking revenue, same asset NOI increased by 3.6% quarter over quarter.
AFFO per unit was $0.18 decreasing from $0.25 for the same quarter last year. Our AFFO payout ratio was 125.2% versus the same quarter last year at 89.9%. FFO for the quarter decreased to $0.22 per unit from $0.29 for Q2 2019, and our FFO payout ratio was 101.8% versus 75.7% in the same quarter last year. The decline in AFFO and FFO is primarily due to the significant increase in bad debt expense and parking revenue impact as previously noted. Adjusting for the impact of COVID-nineteen on Crombie's operating performance, AFFO per unit would be $0.26 and FFO per unit would be $0.30 Additionally, we are feeling the effects of approximately $500,000,000 in dispositions executed in 2019 with the primary reinvestment of proceeds to major developments with no initial return, while we await the completion of major developments over the next 16 months.
G and A as a percentage of property revenue for Q2 was 7.2 percent or $7,000,000 up from Q2 2019 of 6,000,000 dollars During the quarter, in the face of the uncertainty of COVID-nineteen, we chose to reduce operating expenses with an organizational realignment, resulting in elimination of certain positions, including 2 at the vice president level. Severn costs of $1,500,000 were incurred, resulting in the increase of G and A expense, partially offset by lower travel and office expenses. Excluding severance costs, G and A in the quarter would have been $5,500,000 versus $6,000,000 last year. In the 1st 6 months of 2020, when fair valuing our investment properties, we made assumptions as to the potential short and long term impacts caused by COVID-nineteen. Net property income has been lowered and capitalization rates increased in certain cases.
In the Q1 of 2020, Crombie reduced its fair value of enclosed malls by approximately 15%, which was the primary driver behind a Q1 fair value reduction of investment properties of $86,000,000 In the Q2, expectations were again updated as to the impact of COVID-nineteen and values were in line with our Q1 estimates. Additionally, fair value was positively impacted in Q2 by non COVID related adjustments for capital investments in Solbridge properties, causing increased NOI and appraiser provided reductions in capitalization rates for some of our properties in British Columbia, resulting in an increase in fair value over Q1 of $85,000,000 Crombie remains committed to increasing weighted average term to maturity of our debt, reducing leverage over the medium term and increasing our unencumbered asset pool. In the second quarter, a 3.88% 16 year mortgage loan for $118,000,000 on our Vaughan, Ontario distribution center was secured and funded. We repaid approximately $10,000,000 of mortgages, leaving $48,000,000 of mortgages maturing primarily in Q4 of 2020. Our unencumbered asset pool remained consistent at approximately $1,500,000,000 and our balance sheet remains flexible with approximately $400,000,000 of available liquidity.
Our debt to gross book value on a fair value basis was 49.2% at the end of Q2 compared to 50% for Q1 2020 or 48.9 percent adjusted for cash on hand in Q1. We ended the quarter with debt to trailing 12 month EBITDA at 9.12x versus 8.86x at Q1 'twenty. Adjusting for bad debts recorded in the quarter, debt to EBITDA would have been 8.73x. Subsequent to the quarter end, Crombie put in place a 1,000,000,000 base shelf prospectus for 25 months to allow the issuance of units, debt and other related securities on an accelerated basis. This is a proactive ordinary core step, and we do not see an immediate need to access the capital markets.
As we continue to navigate through this difficult time, Promby grocery and pharmacy anchor portfolio of essential service tenants will support our communities, businesses, tenants and employees, while never losing sight of our long term strategy to effectively allocate capital to accelerate NAV and AFFO growth per unit, delivering value. I will now turn the call over to Don for a few closing comments.
Thank you, Clinton. Before we conclude for questions, I'd like to take a moment to reflect on current events and their impact on Crombie. As Crombie continues to grow and evolve, so too does our focus on ESG priorities. In developing a comprehensive ESG program, we have identified key areas in which we can improve our business and our impact. In recent months, the world has watched social protests led by Black Lives Matter and other organizations have mobilized our communities to commit to eliminating racial injustices.
Diversity and inclusion is a critically important element of our social impact commitment and is essential to the success of every organization. We can and must do a better job of ensuring this work is ingrained in our hiring and employment practices, and we are committed to doing just that. Like many CEOs across Canada, I recently signed the BlackNorth CEO pledge, which was initiated by the Canadian Council of Leaders Against Anti Black Systemic Racism. Signing the pledge, I've committed myself and Crombie to work diligently to uphold its underlying promise. Working diligently is the unspoken mantra of the Crombie team.
I've often said that one of my priorities as CEO to ensure Crombie is well prepared if the world falls off a cliff. While we envision different potential scenarios that might play out, a global pandemic wasn't at the top of the list. As we saw the virus take hold across China and Italy, our business continuity team met daily to plan our response in case Canada faced a similar crisis. I knew we had a strong team at Crombie and they proved me correct. People who are the backbone of our business are smart, focused and committed to excellence.
What we have seen over the past months is that our team is also incredibly resilient and nimble in the face of a fast changing and unprecedented environment. Every week, our team successfully faces a new challenge, whether it is supporting tenants through rent relief, adapting our operations to evolving health and safety protocols, maintaining strong relationships or preparing comprehensive quarterly reports from home. We continue to work diligently to ensure our commitment to all of our stakeholders remains steadfast. I want to again thank each and every member of the Crombie team for their perseverance and excellence over the last 6 months. Lastly, as I've said many times, we believe in and are deeply committed to our long term strategy of creating value with our strategic partner Empire together with a strong real estate development program in Canada's major urban markets that is layered on top of one of the best grocery anchored real estate portfolios in Canada.
We believe this strategy when combined with our solid financial condition, our access to capital and our entrepreneurial talent will generate solid total unitholder returns for our stakeholders for years to come. That concludes our prepared remarks, and we're now happy to answer your questions.
Thank you, sir. Ladies and gentlemen, we will now begin the question and answer And your first question will be from Mike Markidis at Desjardins. Please go ahead.
Hi, everyone. And Mark, thank
you very much for providing the breakdown of the bad debt expense on Page 18 of the investor presentation, the call deck. Just wanted to clarify a few things, if you don't mind. So first off, Quinn, do you off the top of your head just have the I mean, I'm sure we could back it up, but what the total gross rent billed for the quarter was?
Yes, Michael, the gross month the gross rent build for the quarter would be around $103,000,000
$103,000,000 Perfect. Okay.
It's a bit higher than the revenue per the financials, but you have it 103,000,000
dollars Right. Yes, we've been learning that you got to include the tax on some of the stuff as you go forward, so which I don't think is reflected in your P and L. So with the collected amount, just to confirm, it's consistent with everybody else. So the government receivable on Seapra, which I guess would be about 2% would be included in the 90%, correct?
Correct.
Okay, good. And then just curious on the abatement expense, sort of how you're looking at that versus the deferrals? Is there, I guess, a 2 part question. Is some of that a permanent reduction, I. E, you abated 2% for the quarter and therefore there's a rent reduction going forward of maybe 25%.
I'm just trying to get a sense how much of that is just an ongoing reduction versus a free rent?
No. I would say, Mike, it's essentially never used the word one time, but it's not an ongoing rent abatement. It's a cost that's recognized in the quarter. And one of the other matters I would say is that part of the consideration in exchange for the rent abatement is some other things that are valuable to Crombie, whether it's term extensions or whether it's some restrictions of development rights, etcetera. So and Donnie may speak to this a little bit later as well, but the abatement piece, we would think what's covered in the quarter should be the vast majority of any abatement cost, assuming things continue on the current trajectory that we're currently feeling.
You read my mind with that one, Glenn. So thank you very much for providing that. And then just lastly, I guess you guys have the 5% of anticipated uncollectibles that are grouped together with the deferrals and the unpaid. So is that to say that basically the provision is solely? Yes, I guess that would be the case because you don't have an abatement, there's an abatement, there's no receivable.
I think you just answered my question.
No, but you asked the question there. It's a good question, which is exactly right. I think us and others, what we've really said is we have a bad debt cost for the quarter of 8%. You can earmark 1% specifically for Seacra, the 25% piece that's straightforward. The abatement piece is straightforward.
So the remaining 5% is a provision against what's in the deferral category. We're confident and optimistic that the deferrals will be collected as we're confident and optimistic that a chunk of the unpaid will be. But we were, I would say, Mike, a bit prudent or even conservative in that piece, the 5% provision against that remaining 7%. And I think the biggest piece of why as we look at it today, why we feel it was very conservative is that Avalon has really turned the corner nicely with 93% of tenants now open and moving from a 42% rent collection in the quarter up to 60% in July and feeling really good about foot traffic and the mood at Avalon. We're feeling much better, but your interpretation of those numbers is correct.
Okay. And appreciate all those clarifications just because everyone's presenting things a little bit differently and we're just trying to make sure it's all comparable. And your guys' collection rates obviously stand up very well versus peers. Just last one for me with respect to your office portfolio, just curious if you have a sense of how much of the tenant base is actually back in force in the office portfolio?
Yes. The office space is interesting and ours is primarily in Halifax. So we have about 97% of the tenants are operational. But only about half of them have workforce that's back on-site. And I think with work from home going well for many of these companies, we're not expecting to see a big resurgence in that office return until the fall.
We're seeing like if you look at our parking piece, which is very much tied to office, that's really slowed down. The food court at Scotia Square has slowed down. So our guess is we're going to start to see a doubling of our office population by mid September. And then I think from there, it's just going to be a gradual confidence piece as vaccines in place, etcetera. I think the fact that work from home seems to be going relatively famously for many has reduced the urgency.
I would also say and this is a cultural thing, I mean, Atlantic Canada, but the two markets where we have a lot of office, which is principally Halifax, but a bit Moncton, There seems to be not an urgent rush to get back, but we're expecting to see significant ramp up in the fall. Hopefully that helps, but the good news is that 97% of the tenants are operational. Rent collection has been strong. I think you noted or you may have noted that our same asset NOI drop in office for the quarter was principally on the parking side. That's where most of our parking disaffection was or at least a good portion was.
But beyond that, we're still feeling good about office fundamentals, but it's going to take a bit of time with elevator concern and other concern to get all the traffic back.
That's very useful, Glenn. Thank you very much. I'll turn it back. Thank
you. And your next question will be from Tal Woolley at National Bank Financial. Please go ahead.
You guys your geographic concentration is a little bit different than your peers, skewed a little bit more to the Maritimes in Western Canada. And just the pandemic sort of spread has been obviously very different across the country. I'm just wondering if you can talk maybe a little bit to what leasing demand looks like across some of the regions, just to see it like just to try and understand like some of the regional trends that might be out there.
It's interesting. We're not seeing anything dramatically different. The beauty of our portfolio, for example, in Alberta, where you might be worried more so, we just have a very strong grocery anchored portfolio there and the ancillary, the lease up is very strong. So we're like very 99% occupied in Western Canada. As we look at our renewal spreads over expiry, it's actually pretty balanced that 4% year to date, 3.6% for the quarter and 4.9% on our retail renewals, pal.
If I look across the country and it's not a huge canvas because with our long lease terms, we don't have a ton of renewal activity. But for the first half year, it's been very consistently positive in terms of the renewal spread. There's not pockets of market that are negative and other pockets that are more positive. It's pretty well balanced. And then secondly, as we look at the renewals for the balance of the year, we're feeling pretty good.
I think we have another 500,000 square feet. We have a couple of big deals. We had 1 about 100,000 square foot renewal that actually got renewed into just early Q3. That was a Q4 renewal. So we're feeling good about the renewal piece.
I think last call we would have expressed caution about maintaining positive renewal spreads on expiries, but that's been very pleasing so far. So I can't tell you that there's a whole lot of anomalies. Maybe Donner Clinton can or have a different perspective. But at this point, the leasing side has been fine. We're expecting it to be a bit slower post pandemic or during the pandemic for new leasing.
But thankfully so far the renewal side and not losing many tenants, those stats on the CCAA piece that we shared in the script, those are pretty good. We've had 17 leases that are call it, part and parcel of a CCA process. Only 2 of those are being disclaimed and that speaks to the fact that the other 15 are just great locations and great properties that even through CCAA, the tenant doesn't want to give them up. And so I think that bodes well, but nothing specifically geographically that would be of interest.
Okay. And as we get sort of closer to completion on Davie Street on the residential piece, Can you just talk a bit about marketing plan, how you sort of might adjust how you approach going to market given everything that's going on too?
Yes, Tal, it's Donnie. So number 1, we've been delayed, call it, by a quarter, which pushes us into early 2021 in terms of lease up. We've been saying for the last year or so, us and our partner Westbank have been saying that we'll be taking our time to ensure we get the rents that we want to get out of the gate, because as you know, there's limits on what can be done after the fact. And so that will continue to be what we expect to happen. There has been some softening in the market to some degree, and we're concerned about what impacts of Airbnb and other factors have on the market.
But we still have very solid confidence. Our partner has projects in the community that have leased throughout the COVID-nineteen pandemic and shutdown. And they're quite confident that we will also lease up as we get into 2021 over time. So honestly, our pro form a rents are still well above what we initially would have forecasted them that are in our MD and A. So again, we have some margin of safety there in terms of hitting the numbers.
So and the project has been very well managed. They've been very resilient through the construction uncertainties, whether it be supply chain or just the labor forces and managing a number of scares we thought may have been COVID, but were not confirmed and ultimately proved not to be COVID. So there's lots of things that happened on that site and we're very thankful to have a great partner and who's done a great job. And we've also our teams have done, I think, an immense amount of work and bringing this project to completion. We're really excited.
It's going to drive a lot of NAV creation for this company and AFFO growth over time. And it's center ice in Vancouver. So it's for us, it's a great asset and great location. That's probably the best dirt in the country. So we're quite pleased with that.
So anyway, it's some of the stuff is short term in my mind, but I think in the long term, we'll be very, very thankful that we have that asset moving forward.
And any early word on the performance of the reopened store?
Sorry, the what?
Any early word on the performance of the reopened Safeway there?
Nothing but anecdotal so far Tal, but we're hearing Sobeys is very happy with the store. I think they opened a little softer than normal because of the pandemic timing. But beautiful store, we're hearing good comments. They seem quite satisfied, but we're not privy to sales numbers. And if we were, I don't think we'd be sharing them.
Yes. No. But so far so good is what we're hearing. It's a beautiful store and it's going to be a great centerpiece to the 3 30 units above. And good news too, the Scotiabank and the liquor store will commence paying rents in Q3.
They'll be taking occupancy in Q4. So we'll have almost the full complement of retail there operational as we gear up to rent up the apartments.
Okay. And then just lastly, you completed a couple of transactions selling some of your grocery anchored retail to private investors last year. Have you subsequent to all of this economic tumult, have you received any more inbound interest on that type of product?
Yes. The Tal, we have, call it, a constant flow of inbounds, and I would say at scale. In a variety of forms. So whether it be the 100% non core, what we call non core, that could be whether it be tertiary secondary markets, it could be some of our drug stores that we're interested in potentially selling. And it could be partial interests like the Northern View we did a year and a half ago for 50% of the Oak Street deal, where it was at $8911 more unconventional deal.
All of those types of inquiries are, I'll call them, consistently inbound. So, and we I would say with our stock price where it is, we would be looking again at dispositions. Again, it's a a form of equity and we've proved we can do it at or above IFRS through 2018 2019. And so we'll be starting to look at that program and working on it over the next number of months until the market sort of settle out and rebound to something that's closer to our NAV. And we don't need equity, as we've said a number of times, as Quentin said earlier, really it ended right now, end of 2021 and 2022, we don't really need equity.
So we're at a place where we're in a pretty good space with a lot of different sources of capital and the inbounds are an important part of that. People that are interested in being our partner and on good assets.
Okay. Thanks very much, gentlemen.
Thanks, Tal.
Thanks, Tal. Thank you. And right now, we have no further questions registered. Please proceed.
Thank you for your time today, and we look forward to updating you on our progress on our Q3 call in November. Stay safe and healthy.
Thanks everybody. Thanks everybody.
Thank you. Ladies and gentlemen, this does indeed conclude your conference call for today. Once again, thank you for attending. And at this time, we do ask that you please disconnect your lines.