Allied Properties Real Estate Investment Trust · TSX:AP.UN
Allied Properties Real Estate Investment Trust — Investor Presentation (May 2020)
69 slides from Allied Properties Real Estate Investment Trust's investor presentation, May 2020
Slide 1: Creativity & Connectivity
CREATIVITY & CONNECTIVITY May 2020
Slide 2: Forward-looking information disclaimer
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 “Risks and
Slide 3: Table of Contents
TABLE OF CONTENTS Investment Highlights . . . . . . . . . . . . . . . . . 4 Strategy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 Rental Portfolio . . . . . . . . . . . . . . . . . . . . . . 21 Development Portfolio . . . . . . . . . . . . . . . 38 Development Completions . . . . .
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 – 29% compound annual growth rate on total assets – 15.4% average annual total return 4
Slide 5: Portfolio Growth - Total Assets
PORTFOLIO GROWTH - TOTAL ASSETS (M) 9,023 120M 8,796 8,324 6,706 IPO 5,824 9.0B 5,214 4,456 3,933 3,501 APRIL 2020 3,052 2,155 1,583 28.9% 1,155 949 809 503 385 267 128 157 IPO 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Q1 2020 Apr-20 CAGR Values up to Decem
Slide 6: Returns to Unitholders Total Return Index
RETURNS TO UNITHOLDERS TOTAL RETURN INDEX 15.4% $1,700 Allied Properties S&P / TSX Total Returns Index S&P / TSX Capped REIT Index $1,600 $1,500 AVERAGE ANNUAL $1,400 $1,300 TOTAL RETURN $1,200 $1,100 $1,000 $900 $800 $700 $600 $500 $400 $300 $200 $100 $0 2003 2004 2005 2006 2007 2008 2009 2010 2011
Slide 7: Strategy
ALLIED Strategy
Slide 8: Consolidation of Urban Office Properties
CONSOLIDATION OF URBAN OFFICE PROPERTIES – Close to core – Distinctive – Lower occupancy costs 8
Slide 9: 500-522 King West
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Slide 10: Le Nordelec, Montréal
Le Nordelec Montréal 10
Slide 11: 35-39 Front Street East, Toronto
35-39 Front Street East Toronto 11
Slide 12: 12
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Slide 13: 13
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Slide 14: 14
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Slide 15: 15
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Slide 16: Intensification of Urban Office Properties
INTENSIFICATION OF URBAN OFFICE PROPERTIES – Underutilized land – Additional rentable area with low land cost – Value creation 16
Slide 17: Intensification of QRC West
Intensification of QRC West Toronto 17
Slide 18: Intensification of QRC West
Intensification of QRC West Toronto 18
Slide 19: Intensification of The Breithaupt Block
Intensification of The Breithaupt Block Kitchener 19
Slide 20: King Portland Centre
King Portland Centre Toronto 20
Slide 21: Rental Portfolio
ALLIED Rental Portfolio
Slide 22: Rental Portfolio Properties
RENTAL PORTFOLIO 200 PROPERTIES 14.3M SQUARE FEET VANCOUVER EDMONTON 643,112 SF 297,851 SF MONTRÉAL 6,283,647 SF TORONTO 4,747,128 SF Including Urban Data Centres CALGARY 509,410 SF 1,043,638 SF OTTAWA 231,468 SF KITCHENER 562,802 SF As of April 30, 2020. 22
Slide 23: Montréal Portfolio
MONTRÉAL PORTFOLIO Mile-Ex BE RN AR ST D . AV LA E. PA UR RK EN AV TB N E. LV ST D. .U RB ST AI DE . N ST NI . ST S HE . NR RU LA IJ UR U E IER LIE SA AV N I E. NT ST BO E AV SA - U .A IN E RÉ LE T- CO . MB VA AN ST M U TO RD I RO RC JA IN AT VI CQ E Mile End ISE E LL ST LL W Central UE E- .W AT E S
Slide 24: Toronto Portfolio
TORONTO PORTFOLIO COLLEGE ST. REIT JOINT VENTURE N DUFFERIN ST. ANCILLARY PARKING DUNDAS ST. W. BAY ST. UNIVERSITY AVE. SPADINA AVE. CHURCH ST. SHERBOURNE ST. PARLIAMENT ST. JARVIS ST. QUEEN ST. W. RICHMOND ST. W. RICHMOND ST. E. STRACHAN AVE. YONGE ST. ADELAIDE ST. W. Queen Richmond BATHURST ST. KI
Slide 25: Calgary Portfolio
CALGARY PORTFOLIO CENTRE ST. S 4 AVE SW 5 AVE SW 6 AVE SW Central Business 7 AVE SW District N 8 AVE SW Stephen Ave. 9 AVE SW 10 AVE. SW 11 AVE. SW 12 AVE. SW SE 3 ST. SE OLYMPIC WAY SE 13 AVE. SW E. 2 ST. SW 4 ST. SW 8 ST. SW 1 ST. SW 5 ST. SW AV 1 ST. SE Inglewood 12 Beltline 9A 17 AVE. SW VE .S E
Slide 26: Vancouver Portfolio
W G Y H 99 BE JE TO AC RV N H ST IS . PA AV ST CI . E. FI C BU TE ST . ST . TH BU U RR RL O AR W D D RA ST ST . . KE ST . D AV H IE EL ST M CK . E N ST RI . CH AR N H H D O S EL AM M ST SO IL ER . M N TO ST AI N ST N ST . . G LA RA N . N D VI ST LL . E ST . Yaletown RO CA BS M O N BI E ST BE . W AT
Slide 27: Urban Workspace Top-Ten Properties
URBAN WORKSPACE TOP-TEN PROPERTIES NORMALIZED APPRAISED PROPERTY NAME LQA NOI FAIR VALUE CAP RATE PRINCIPAL USERS CITÉ MULTIMÉDIA, MONTRÉAL $22,399 $429,500 4.75% Desjardins, Morgan Stanley, SAP Canada 700 DE LA GAUCHETIÈRE, MONTRÉAL 17,865 322,500 —% AON Canada Inc, Hydro-Québec, National Bank of C
Slide 28: Network-Dense Urban Data Centres
NETWORK-DENSE URBAN DATA CENTRES NORMALIZED APPRAISED PROPERTY NAME LQA NOI FAIR VALUE CAP RATE PRINCIPAL USERS 151 FRONT W, TORONTO $34,403 $536,790 5.25% Bell, Cologix, Equinix 250 FRONT W, TORONTO 13,387 311,020 6.00% AWS, Cloud Service Provider 905 KING W, TORONTO 4,646 93,570 6.25% Beanfield, C
Slide 29: Connectivity
CONNECTIVITY Source: PeeringDB.com 29
Slide 30: Internet Traffic on TorIX
INTERNET TRAFFIC ON TORIX Source: TorIX Website 30
Slide 31: NOI by Segment, NOI by Use
NOI BY SEGMENT NOI BY USE 15.7% 15.7% URBAN DATA CENTRES URBAN DATA CENTRES 42.5% TORONTO 10.6% 8.5% AND CALGARY, RETAIL KITCHENER EDMONTON AND VANCOUVER 5.1% PARKING 31.2% MONTRÉAL 70.7% AND OTTAWA OFFICE For the period ending March 31, 2020. See definition appendix for definition of NOI. 31
Slide 32: Lease Maturities - Urban Workspace
LEASE MATURITIES - URBAN WORKSPACE % OF SEGMENT GLA W/A IN-PLACE RENTAL RATE ESTIMATED W/A MARKET RENTAL RATE 25.0% $35.00 $30.00 20.0% $26.71 $26.38 $26.70 $25.00 $22.89 $23.88 $22.49 $20.46 15.0% $19.41 13.4% $20.00 $18.21 $15.50 11.2% 10.6% $15.00 10.0% 7.9% 6.4% $10.00 5.0% $5.00 0.0% $0.00 Dece
Slide 33: Lease Maturities - Urban Workspace Montréal and Ottawa
LEASE MATURITIES - URBAN WORKSPACE MONTRÉAL AND OTTAWA % OF SEGMENT GLA W/A IN-PLACE RENTAL RATE ESTIMATED W/A MARKET RENTAL RATE 25.0% $35.00 $30.00 20.0% $25.00 15.0% 13.3% $20.08 $20.00 $17.91 $18.20 $17.97 $17.26 $15.93 $16.33 $17.50 $17.01 10.0% $15.00 10.0% $13.45 6.5% $10.00 6.0% 5.0% 3.4% $5
Slide 34: Lease Maturities - Urban Workspace Toronto and Kitchener
LEASE MATURITIES - URBAN WORKSPACE TORONTO AND KITCHENER % OF SEGMENT GLA W/A IN-PLACE RENTAL RATE ESTIMATED W/A MARKET RENTAL RATE 25.0% $40.00 $36.61 $35.55 $33.32 $33.27 $35.00 20.0% 18.0% $30.00 $29.04 $27.44 $25.00 15.0% $25.29 13.4% $22.52 $19.74 $20.00 $18.33 10.0% $15.00 7.9% 8.0% 7.7% $10.0
Slide 35: Lease Maturities - Urban Workspace Calgary, Edmonton and Vancouver
LEASE MATURITIES - URBAN WORKSPACE CALGARY, EDMONTON AND VANCOUVER % OF SEGMENT GLA W/A IN-PLACE RENTAL RATE ESTIMATED W/A MARKET RENTAL RATE 25.0% $30.00 $25.00 $25.00 20.0% $22.60 $21.56 $20.73 17.2% $19.62 $19.24 $20.00 $17.35 15.0% 14.3% $19.06 14.0% 13.0% $14.18 12.3% $15.00 10.0% $12.02 $10.00
Slide 36: Lease Maturities - Urban Data Centres
LEASE MATURITIES - URBAN DATA CENTRES % OF SEGMENT GLA W/A IN-PLACE RENTAL RATE ESTIMATED W/A MARKET RENTAL RATE 25.0% $160.00 $137.06 $140.00 20.0% $124.66 $133.68 $119.96 $120.00 $118.57 16.4% $101.01 $108.73 $96.66 $100.00 15.0% 13.2% $76.29 $80.00 $73.54 10.0% $60.00 6.9% $40.00 5.2% 5.0% 2.5% $
Slide 37: Top-Ten Users Q1 2020
TOP-TEN USERS USER SECTOR % RENTAL REVENUE (Q1 2020) 49% CLOUD SERVICE PROVIDER Data Centre/IT 4.6% UBISOFT Gaming/IT 2.6% COLOGIX Data Centre/IT 2.5% 2003 EQUINIX Data Centre/IT 2.2% 19.5% SHOPIFY INC. Commerce/IT 1.5% NATIONAL CAPITAL COMMISSION, A CANADIAN CROWN CORPORATION Government 1.4% Q1 202
Slide 38: Development Portfolio
ALLIED Development Portfolio
Slide 39: Active Development Pipeline
ACTIVE DEVELOPMENT PIPELINE % OF OFFICE % OF OFFICE DEVELOPMENT DEVELOPMENT 2020 ESTIMATED PRE-LEASED 2022 ESTIMATED PRE-LEASED GLA NOI GLA NOI 57% 425 VIGER 317,500 $7.4M 95% THE WELL* 763,000 $40.4M 84% TELUS SKY* 218,000 $8.0M 64% QRC WEST, PHASE II 90,000 TBD — 535,500 $15.4M 853,000 $40.4M+ % O
Slide 40: Future/Shadow Development Pipeline
FUTURE/SHADOW DEVELOPMENT PIPELINE Zoning Approval in Place To Be Rezoned ESTIMATED ESTIMATED Toronto GLA GLA UNION CENTRE 1,129,000 TORONTO 3,263,000 KING & PETER 790,000 MONTRÉAL 1,406,000 ADELAIDE & SPADINA 230,000 CALGARY 1,149,000 2,149,000 OTHER 621,000 6,439,000 ESTIMATED Montréal GLA LE NORD
Slide 41: 425 Viger, Montréal
425 Viger Montréal 41
Slide 42: TELUS Sky, Calgary
TELUS Sky Calgary 42
Slide 43: Adelaide & Duncan, Toronto
Adelaide & Duncan Toronto 43
Slide 44: Breithaupt III, Kitchener
Breithaupt III Kitchener 44
Slide 45: 400 West Georgia, Vancouver
400 West Georgia Vancouver 45
Slide 46: The Well
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Slide 47: QRC West Phase II, Toronto
QRC West Phase II Toronto 47
Slide 48: KING Toronto
KING Toronto Toronto 48
Slide 49: King & Brant
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Slide 50: 720 Beatty, Vancouver
720 Beatty Vancouver 50
Slide 51: Development Completions
ALLIED Development Completions
Slide 52: QRC West, Toronto
QRC WEST, TORONTO This was a pioneering, large-scale intensification project that involved the integratation of two restored heritage buildings with a new, mid-rise office structure. The project commenced in 2010 and was completed in 2015. It is comprised of 345,274 square feet of GLA and is fully l
Slide 53: The Breithaupt Block, Kitchener
THE BREITHAUPT BLOCK, KITCHENER Allied acquired an undivided 50% interest in the property in 2010 and immediately put it into development, completing the first phase in 2014 and the second phase in mid-2016. The property is an equal two-way joint arrangement between Allied and Perimeter Development
Slide 54: 180 John Street, Toronto
180 JOHN STREET, TORONTO Allied acquired the property in 2015. The property was redeveloped and leased in its entirety to Spaces. The project was completed in 2017. It is comprised of 45,631 square feet of GLA and is fully leased. DEVELOPMENT ECONOMICS INVESTMENT LAND COSTS $8,700 HARD & SOFT COSTS
Slide 55: 189 Joseph, Kitchener
189 JOSEPH, KITCHENER 189 Joseph was purchased as part of The Tannery in 2012. The building stood vacant, and was slated to be demolished before Allied proposed the redevelopment and secured Deloitte as the user. The project commenced in late-2015 and was completed mid-2017. It is comprised of 26,46
Slide 56: King Portland Centre, Toronto
KING PORTLAND CENTRE, TORONTO In 2012, Allied entered into an equal two-way joint arrangement with RioCan to develop King Portland Centre. Allied and RioCan each acquired an undivided 50% interest in 642 King W and 620 King W and subsequently put them into development, completing 642 King W in early
Slide 57: Risk Management
ALLIED Risk Management
Slide 58: Development
DEVELOPMENT – 15% limitation on development – Pre-leasing – Partial monetization – Financial management – Collaboration 58
Slide 59: Balance Sheet
BALANCE SHEET – Low leverage – Long-term, fixed-rate debt – Net debt to EBITDA ratio of 6.8x – Debt ratio 27.2% – Interest coverage ratio of 3.3x Debt in “debt ratio” refers to total debt. See definition appendix for definition of total debt and EBITDA. 59
Slide 60: Financial Covenants
FINANCIAL COVENANTS SENIOR UNSECURED DEBENTURES COVENANT THRESHOLD MARCH 31, 2020 PRO FORMA INTEREST COVERAGE RATIO Maintain a 12-month rolling consolidated 3.1x pro forma EBITDA of at least 1.65 times pro forma interest expense PRO FORMA ASSET COVERAGE TEST Maintain net consolidated debt below 27.0
Slide 61: Debt Maturity Chart
DEBT MATURITY CHART MORTGAGES UNSECURED TERM LOANS UNSECURED DEBENTURES CONSOLIDATED W/A INTEREST RATE $450.0 $400.0 5.00% $400.0 4.70% $150.0 4.46% 4.37% 4.30% $350.0 4.10% 4.04% 3.96% 4.00% $300.0 $300.0 3.55% $300.0 3.39% $250.0 3.11% 3.08% $242.4 (In thousands) $250.0 3.00% $231.4 $200.0 $200.0
Slide 62: Unencumbered Assets
UNENCUMBERED ASSETS UNENCUMBERED ASSET POOL % OF ASSET POOL UNENCUMBERED $7,000,000,000 80% 74% 73% 72% 68% 70% $6,000,000,000 $6.2B $6.0B $5.5B 60% $5,000,000,000 52% 47% 50% $4.3B $4,000,000,000 39% 40% $3,000,000,000 $2.9B 30% $2.3B $2,000,000,000 21% 20% $1.6B 12% $1,000,000,000 10% $782.0M $400
Slide 63: Corporate Social Responsibility
Corporate Social Responsibility
Slide 64: Corporate Social Responsibility
CORPORATE SOCIAL RESPONSIBILITY “The cities we build have to be sustainable and conducive to human wellness, diversity and creativity. Put differently, they have to elevate and inspire the humanity in all of us.” - MICHAEL EMORY 2020 CSR Report + GRESB Reporting + Aligning with ESG Indices 64
Slide 65: Corporate Social Responsibility
CORPORATE SOCIAL RESPONSIBILITY 65
Slide 66: Appendix Definitions
ALLIED Appendix Definitions
Slide 67: Certain Definitions and Non-IFRS Measures
CERTAIN DEFINITIONS AND NON-IFRS MEASURES Certain defined terms used in this investor presentation have the following meaning: “EBITDA” EBITDA is a non-IFRS financial measure and should not be considered as an alternative to net income or net income and comprehensive income, cash flow from operating
Slide 68: Total Debt, Total Return
“TOTAL DEBT” Total debt is a non-IFRS financial measure and does not have any standard meaning prescribed by IFRS. As computed by us, total debt may differ from similar computations reported by other Canadian real estate investment trusts and, accordingly, may not be comparable to similar computatio
Slide 69: alliedreit.com
ALLIED 134 PETER STREET, SUITE 1700 TORONTO, ONTARIO M5V 2H2 T 416.977.9002 F 416.306.8704 alliedreit.com
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