Allied Properties Real Estate Investment Trust · TSX:AP.UN
Allied Properties Real Estate Investment Trust — Investor Presentation (February 2024)
62 slides from Allied Properties Real Estate Investment Trust's investor presentation, February 2024
Slide 1: Creativity & Connectivity
CREATIVITY & CONNECTIVITY February 2024
Slide 2: Forward-looking information
This presentation may contain forward-looking information about future events or Allied’s future performance. This information, by its nature, is subject to risks and uncertainties that may cause actual events or results to differ materially, including those described under the heading “Risk Factors
Slide 3: Table of Contents
TABLE OF CONTENTS Investment Highlights . . . . . . . . . . . . . . . . . . . . . . . 4 Strategy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 Rental Portfolio . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22 Development Portfolio . . . . . . . . . . . . . . . .
Slide 4: Investment Highlights
INVESTMENT HIGHLIGHTS — At the forefront of urban intensification in Canada’s major cities — Fully internalized and entrepreneurial management team — Strong growth platform — Strong financial foundation — 23.7% compound annual growth rate on total assets — 9.7% average annual total return 4
Slide 5: Portfolio Growth - Total Assets
PORTFOLIO GROWTH - TOTAL ASSETS (M) 128M 11,910 10,613 10,389 9,410 IPO 8,324 10.6B 6,706 5,824 5,214 4,456 Q4 2023 3,933 3,501 3,052 23.7% 2,155 1,583 1,155 809 949 385 503 128 157 267 IPO 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 (1) C
Slide 6: Focused on Increasing Our Distribution and Growing NAV per Unit
FOCUSED ON INCREASING OUR DISTRIBUTION AND GROWING OUR NAV PER UNIT OVER TIME ANNUAL DISTRIBUTION PER UNIT(1) NAV PER UNIT $1.80 $1.80 $60.00 $1.75 $1.70 $1.70 $1.65 $50.00 50.30 50.96 $1.60 48.54 $1.60 $1.56 46.55 45.60 $1.53 42.12 $40.00 $1.50 $1.50 $1.46 38.19 35.66 $1.41 33.05 $1.40 $30.00 $1.36
Slide 7: Returns to Unitholders
RETURNS TO UNITHOLDERS TOTAL RETURN INDEX ALLIED S&P / TSX TOTAL RETURNS INDEX S&P / TSX CAPPED REIT INDEX 1,700 9.7% 1,600 1,500 1,400 1,300 1,200 AVERAGE ANNUAL 1,100 TOTAL RETURN 1,000 900 800 700 600 500 400 300 200 100 0 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Slide 8: Focused on Operating Distinctive Urban Workspaces: NOI by Space Type
FOCUSED ON OPERATING DISTINCTIVE URBAN WORKSPACES: NOI BY SPACE TYPE (IN $M) $450 OFFICE UDC (1) RETAIL PARKING $400 $17.4 $21.0 $350 $12.8 $36.4 $13.1 $38.9 $30.8 $64.1 $25.0 $15.1 $60.6 $33.5 $300 $55.9 $22.9 $283.9 MILLIONS $12.9 $53.4 $270.0 $250 $21.6 $12.2 $254.5 $248.6 $11.1 $19.1 $49.1 $9.9
Slide 9: Strategy
ALLIED Strategy
Slide 10: Consolidation of Urban Office Properties
CONSOLIDATION OF URBAN OFFICE PROPERTIES — Close to core — Distinctive — Lower occupancy costs 10
Slide 11: 35-39 Front Street East
35-39 Front Street East Toronto 11
Slide 12: 500-522 King West
ll ' 500-522 King West Toronto 12
Slide 13: Ci : " UN
Ci : " UN 4 13
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Slide 18: Intensification of Urban Office Properties
INTENSIFICATION OF URBAN OFFICE PROPERTIES — Underutilized land — Additional rentable area with low land cost — Value creation 18
Slide 19: Intensification of QRC West
Intensification of QRC West Toronto 19
Slide 20: Intensification of The Breithaupt Block
Intensification of The Breithaupt Block Kitchener 20
Slide 21: King Portland Centre
King Portland Centre Toronto 21
Slide 22: Rental Portfolio
ALLIED Rental Portfolio
Slide 23: Preferred Provider of Workspace in the Canadian Urban Market
PREFERRED PROVIDER OF WORKSPACE IN THE CANADIAN URBAN MARKET 201 RENTAL PROPERTIES TOTAL RENTAL PORTFOLIO GLA VALUED AT $8.5B (1) (Not including Properties Under 14.9M SF Development valued at $1.0B) (1) TORONTO VANCOUVER 5.4M SF 1.0M SF ALLIED OCCUPANCY 86.3% MARKET OCCUPANCY (2) 83.6% ALLIED OCCUP
Slide 24: Montreal Portfolio
MONTREAL PORTFOLIO alee Spectacles ~~ 7 2 eZ oO Quartier’ my ys eee. International °%,, SFaniesiek 2. \ Pointe-Saint-Charles Ae : SS g 7 ~~ ** Vieux Montréa UPS 3 Cité Multimédia LKQ a 24
Slide 25: Toronto Portfolio
TORONTO PORTFOLIO COLLEGE ST. REIT JOINT VENTURE ANCILLARY PARKING N DUFFERIN ST. Little Italy DUNDAS ST. W. BAY ST. UNIVERSITY AVE. SPADINA AVE. CHURCH ST. SHERBOURNE ST. JARVIS ST. PARLIAMENT ST. QUEEN ST. W. RICHMOND ST. W. STRACHAN AVE. RICHMOND ST. E. Corktown ADELAIDE ST. W. YONGE ST. BATHURST
Slide 26: Calgary Portfolio
CALGARY PORTFOLIO RPE op —}— Downtown | | ~ copes oe > REIT @ edecdeehe Oo oo 23 JOINTVENTURE @ | Central — ay ere Aon . | Business | ebeoeve a MACLEOD TRAIL 26
Slide 27: Vancouver Portfolio
BR O H U W G Y H 99 BE JE TO AC R N H VI ST S . PA AV C IF ST . E. IC BU TE ST . ST . TH BU U RR RL O AR W D D S RA ST T. . KE ST . D AV H EL IE M ST C . KE N ST RI . C H AR N H H D O S EL AM M ST SO M IL ER N TO ST . AI N ST N . . G LA ST RA N . N D VI ST L . LE ST . Yaletown RO C BS AM N O BI E ST
Slide 28: NOI by Segment / NOI by Use
NOI BY SEGMENT NOI BY USE Vancouver 9.6% Montréal Calgary & & Ottawa Edmonton 35.1% Retail 6.4% 11.3% Parking 6.1% Office Toronto & 82.6% Kitchener 48.9% For the year ended December 31, 2023. NOI is a non-GAAP measure, see Appendix on page 60 for definition. 28
Slide 29: Lease Maturities - Urban Workspace
LEASE MATURITIES - URBAN WORKSPACE % OF TOTAL GLA W/A RENTAL RATE ESTIMATED W/A MARKET RATE 25.0% $30.00 $26.36 $25.86 $25.57 $24.91 $24.54 $25.00 20.0% $24.69 $24.08 $23.70 $23.68 $22.14 Weigfhted Average Marlet Rental Rate $20.00 Weighted average rental rate 15.0% % of Total GLA % of Total GLA $15
Slide 30: Lease Maturities - Montreal and Ottawa
LEASE MATURITIES - URBAN WORKSPACE MONTRÉAL AND OTTAWA % OF TOTAL GLA W/A RENTAL RATE ESTIMATED W/A MARKET RATE 25.0% $25.00 $21.13 20.0% $19.28 $19.20 $20.00 $19.11 $18.73 $18.57 $18.22 $17.29 Weighted Average Market Rental Rate $16.64 $16.54 15.0% $15.00 Weighted average rental rate % of Total GLA
Slide 31: Lease Maturities - Toronto and Kitchener
LEASE MATURITIES - URBAN WORKSPACE TORONTO AND KITCHENER % OF TOTAL GLA W/A RENTAL RATE ESTIMATED W/A MARKET RATE 25.0% $40.00 $35.16 $35.00 20.0% $31.15 $30.57 $32.43 $29.17 $30.00 $28.18 $28.40 Weighted Average Market Rental Rate $27.90 $26.80 $27.00 $25.00 Weighted average rental rate 15.0% % of
Slide 32: Lease Maturities - Calgary
LEASE MATURITIES - URBAN WORKSPACE CALGARY % OF TOTAL GLA W/A RENTAL RATE ESTIMATED W/A MARKET RATE 25.0% $20.00 $17.60 $18.00 $16.08 20.0% $15.54 $16.00 18.0% $14.05 $14.00 $12.91 $13.00 $13.06 Weighted Average Market Rental Rate $12.15 $11.77 15.0% $12.00 Weighted average rental rate $11.36 % of T
Slide 33: Lease Maturities - Vancouver
LEASE MATURITIES - URBAN WORKSPACE VANCOUVER % OF TOTAL GLA W/A RENTAL RATE ESTIMATED W/A MARKET RATE 30.0% $50.00 $43.38 $45.00 25.0% $39.66 $39.61 $37.63 $40.00 $40.64 $37.12 $38.85 $35.57 22.1% $35.00 $35.37 20.0% $34.74 Weighted Average Market Rental Rate Weighted average rental rate $30.00 % of
Slide 34: Top-Ten Users Q4 2023
TOP-TEN USERS USER SECTOR % RENTAL REVENUE (1) % TOTAL GLA Media and UBISOFT DIVERTISSEMENTS INC. 3.2% 3.6% 49% Entertainment Telecommunications/ GOOGLE CANADA CORPORATION IT 2.7% 3.2% Telecommunications/ SHOPIFY INC. IT 2.6% 1.8% 2003 SOCIÉTÉ QUÉBECOISE DES Government 1.9% 1.9% INFRASTRUCTURES TMG
Slide 35: Development Portfolio
ALLIED Development Portfolio
Slide 36: Development Projects
DEVELOPMENT PROJECTS ESTIMATED % OF OFFICE TRANSFER TO ESTIMATED ANNUAL DEVELOPMENT DEVELOPMENTS RENTAL PORTFOLIO GLA NOI (2) PRE-LEASED 81% THE WELL (1)(3) Q3 2022 - Q2 2024 763,000 $40.4M 98% 700 SAINT HUBERT (3) Q3 2023 - Q2 2024 144,114 $5.1M 70% ADELAIDE & DUNCAN (1)(3) Q4 2023 - Q4 2024 230,00
Slide 37: Future Development
FUTURE DEVELOPMEN T ZONING APPROVAL TOTAL POTENTIAL COMPLETED AND IN INCREMENTAL PROGRESS DENSITY (1) ESTIMATED ESTIMATED Toronto GLA GLA THE CASTLE 440,000 TORONTO 6,079,112 KING & PETER 790,000 KITCHENER 332,616 KING & SPADINA 430,000 MONTRÉAL 1,841,945 KING & BRANT 240,000 CALGARY 1,434,755 UNION
Slide 38: The Well
The Well Toronto 38
Slide 39: 700 Saint Hubert
Mi. 85 APBBG SSS". SEES. ce ‘an be aid mas 700 Saint Hubert Montréal 39
Slide 40: Adelaide & Duncan
pat at Adelaide & Duncan Toronto 40
Slide 41: QRC West Phase II
a ~ ~ ~ ee i~ me ——— ——— ORC West Phase II Toronto 41
Slide 42: 108 East 5th Avenue
108 East 5th Avenue Vancouver 42
Slide 43: KING Toronto
KING Toronto Toronto 43
Slide 44: 365 Railway
y =e ao \ Ae a\, \a \w'a n = uth > * . Tia =e ek Pisa 365 Railway Vancouver 44
Slide 45: 400 West Georgia
400 West Georgia Vancouver 45
Slide 46: Risk Management
ALLIED Risk Management
Slide 47: Development
DEVELOPMENT — 15% limitation on development — Pre-leasing — Partial monetization — Financial management — Collaboration 47
Slide 48: Balance Sheet
BALANCE SHEET — Low leverage — Long-term, fixed-rate debt — Net debt as a multiple of adjusted EBITDA ratio of 8.1x — Total indebtedness ratio 34.7% — Interest coverage ratio of 2.5x (1) (1) Interest coverage ratio includes capitalized interest and excludes financing prepayment costs for the twelve
Slide 49: Financial Covenants
FINANCIAL COVENANTS SENIOR UNSECURED DEBENTURES COVENANT THRESHOLD DECEMBER 31, 2023 PRO FORMA INTEREST COVERAGE RATIO Maintain a 12-month rolling consolidated 3.0x pro forma EBITDA of at least 1.65 times pro forma interest expense PRO FORMA ASSET COVERAGE TEST Maintain net consolidated debt below 3
Slide 50: Debt Maturity Chart
DEBT MATURITY CHART Mortgage Unsecured Debentures Unsecured Term Loan Consolidated WA Int Rate $1,000 MORTGAGES UNSECURED TERM LOAN UNSECURED DEBENTURES CONSOLIDATED W/A INT RATE 5.00% $900 4.42% 4.50% 4.29% 4.29% $250.0 $800 4.00% 3.48% $700 3.39% 3.50% 3.17% 3.12% 3.10% 3.08% $600 $600.0 3.00% $40
Slide 51: Unencumbered Investment Properties
UNENCUMBERED INVESTMENT PROPERTIES UNENCUMBERED INVESTMENT PROPERTIES (1) % OF INVESTMENT PROPERTIES(1) $12 100% 94% 92% 90% 85% $10 80% 73% 72% $9.1 68% $8.8 70% $8 $8.3 60% 52% BILLIONS $6 47% $6.5 50% 39% $5.5 40% $4 $4.3 30% 21% $2.9 20% $2 $2.3 12% $1.6 10% $0.8 $0.4 $0 0% 2013 2014 2015 2016 2
Slide 52: Maximizing Flexibility While Strengthening the Balance Sheet
MAXIMIZING FLEXIBILITY WHILE STRENGTHENING THE BALANCE SHEET UNENCUMBERED INVESTMENT PROPERTIES (1) TOTAL INVESTMENT PROPERTIES (1) UNSECURED DEBT AS % OF TOTAL DEBT $12.0 100% 93% 89% CREDIT RATINGS 87% 90% Investment grade since 2014 $10.0 $9.8 80% $9.7 $9.5 72% $9.1 $8.8 $8.8 BBB 70% 65% $8.3 $8.
Slide 53: Environmental, Social & Governance (ESG)
Environmental, Social & Governance (ESG) 53
Slide 54: 2022 ESG Performance
2022 ESG PERFORMANCE 13% ENERGY USE INTENSITY (EUI) 11% GREENHOUSE GAS INTENSITY (GHGI) 75% of workforce participated in professional development reduction from 2019 baseline reduction from 2019 baseline 89% 31% 2% WATER USE INTENSITY (WUI) WASTE DIVERSION of employees feel people are treated equall
Slide 55: Environmental Highlights
ENVIRONMENTAL HIGHLIGHTS OUTPERFORMED 2024 TARGETS Allied continued to exceed its 2024 reduction targets for Energy Use Intensity (EUI), Greenhouse Gas Intensity (GHGI) and Water Use Intensity (WUI). CONTINUED TO IMPROVE GRESB SCORES In its 2023 GRESB assessment, Allied achieved a score of 85/100 fo
Slide 56: Social and Governance Highlights
SOCIAL AND GOVERNANCE HIGHLIGHTS RECOGNIZED AS A CANADIAN “BEST EMPLOYER” IN 2023 Since 2020, Allied has engaged Kincentric to conduct a third-party employee engagement survey. Allied was recognized as a “Best Employer” in 2020, 2021 and 2023. OUTPERFORMED PEERS IN USER EXPERIENCE ASSESSMENT RATINGS
Slide 57: Massey Hall
Massey Hall Toronto 57
Slide 58: Appendix Definitions
ALLIED Appendix Definitions
Slide 59: Certain Definitions and Non-GAAP Measures
CERTAIN DEFINITIONS AND NON-GAAP MEASURES Readers are cautioned that certain terms used in the investor presentation listed below, including any related per Unit amounts, used by Management of Allied to measure, compare and explain the operating results and financial performance of Allied do not hav
Slide 60: Net Operating Income (NOI)
NET OPERATING INCOME (“NOI”) NOI is a non-GAAP financial measure defined as rental revenue less property operating costs on a proportionate basis, excluding the impact of non-cash items such as amortization of improvement allowances and the amortization of straight-line rents on a proportionate basi
Slide 61: Interest Coverage Ratio
INTEREST COVERAGE RATIO This is a non-GAAP measure defined as Adjusted EBITDA divided by interest expense (excluding interest capitalized and distributions on Exchangeable LP Units). Management considers these metrics useful as they indicate Allied’s ability to meet its interest cost obligations. TO
Slide 62: Allied, 134 Peter Street, Toronto
ALLIED 134 PETER STREET, SUITE 1700 TORONTO, ONTARIO M5V 2H2 T 416.977.9002 F 416.306.8704 ALLIEDREIT.COM
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