Allied Properties Real Estate Investment Trust · TSX:AP.UN
Allied Properties Real Estate Investment Trust — Investor Presentation (May 2023)
70 slides from Allied Properties Real Estate Investment Trust's investor presentation, May 2023
Slide 1: Creativity & Connectivity
CREATIVITY & CONNECTIVITY May 2023
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 – 25.5% compound annual growth rate on total assets – 10.6% average annual total return 4
Slide 5: Portfolio Growth - Total Assets
PORTFOLIO GROWTH - TOTAL ASSETS (M) 128M 11,973 11,910 10,389 IPO 9,410 8,324 11.9B 6,706 5,824 5,214 4,456 3,501 3,933 Q1 2023 3,052 25.5% 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 Q1 2023(1)
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 50.96 50.41 50.30 $1.60 48.54 $1.60 $1.56 46.55 $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 10.6% $1,600 $1,500 $1,400 $1,300 $1,200 AVERAGE $1,100 ANNUAL TOTAL $1,000 RETURN $900 $800 $700 $600 $500 $400 $300 $200 $100 $0 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
Slide 8: NOI by Space Type
FOCUSED ON OPERATING DISTINCTIVE URBAN WORKSPACES AND URBAN DATA CENTRES: NOI BY SPACE TYPE (IN $M) $450 OFFICE UDC (1) RETAIL PARKING $400 $17.4 $19.3 $350 $12.8 $36.4 $36.6 $13.1 $30.8 $64.1 $52.3 $25.0 $15.1 $60.6 $300 $55.9 $22.9 $282.7 $12.9 $53.4 $270.0 $250 $21.6 $12.2 $254.5 $248.6 $19.1 $49
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: 500-522 King West
500-522 King West Toronto 11
Slide 12: The Landing
The Landing Vancouver 12
Slide 13: 35-39 Front Street East
35-39 Front Street East Toronto 13
Slide 14: 14
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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 199 RENTAL PROPERTIES TOTAL RENTAL PORTFOLIO GLA VALUED AT $8.3B (1) (Not including Assets Held for Sale valued at $1.4B 14.4M SF and Properties Under Development valued at $1.5B) (1) TORONTO VANCOUVER 5.0M SF 1.0M SF ALLIED OCCUPANCY 87.9
Slide 24: Montreal Portfolio
MONTREAL PORTFOLIO Central Business Pointe-Saint-Charles Cité Multimédia Oy 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 So. f Downtown _|___£ 4 AVE SW SAVE sw Central 6 AVE SW DAVES Business oon t District t) 8 AVESW Stephen Ave. one eoee e 1O AVE. sw AVE. sw e t) weave on 6do} @ 1 ow 13 AVE. sw = = hae pa he > 5 Beltline 2 avera tones (a 3 Ques rste en 2 g 1 ei 17 AVE. SW S, uw & rg & | © ‘25 AVE.
Slide 27: Vancouver Portfolio
GRANVILLE ST. BR O H U W G Y H 99 BE JE TO AC RV N H ST IS . PA AV C IF ST . E. IC BU TE ST . ST . W 8TH AVE. TH BU U RR RL A O W D RD RA ST ST . . 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 LL . E ST . Yaletow
Slide 28: Urban Workspace Top-Ten Properties
URBAN WORKSPACE TOP-TEN PROPERTIES NORMALIZED APPRAISED PROPERTY NAME LQA NOI (1) FAIR VALUE CAP RATE PRINCIPAL USERS LE NORDELEC, MONTRÉAL $15,872 $311,120 5.00% Gsoft, Unity Technologies, Yellow Pages Media CITÉ MULTIMÉDIA, MONTRÉAL 14,432 421,160 4.75% Gearbox Studio Québec, Morgan Stanley, Techn
Slide 29: NOI by Segment and NOI by Use
NOI BY SEGMENT NOI BY USE URBAN DATA URBAN DATA CENTRES (1) CENTRES (1) 13.4% 13.4% URBAN MONTRÉAL & WORKSPACE OTTAWA VANCOUVER - RETAIL 30.3% 8.8% 9.4% URBAN CALGARY & WORKSPACE - EDMONTON PARKING 5.9% 4.9% URBAN WORKSPACE - OFFICE 72.3% TORONTO & KITCHENER 41.6% For the three months ending March 3
Slide 30: Lease Maturities - Urban Workspace
LEASE MATURITIES - URBAN WORKSPACE % OF TOTAL GLA W/A RENTAL RATE ESTIMATED W/A MARKET RATE 25.0% $35.00 $30.00 20.0% $25.81 $25.26 $24.38 $24.37 $23.82 $25.00 $25.39 $23.71 $23.64 $23.29 15.0% $21.57 $20.00 12.1% 9.9% $15.00 10.0% 9.5% 7.9% 7.4% $10.00 5.0% $5.00 0.0% $0.00 December 31, 2023 Decemb
Slide 31: Lease Maturities - Montréal 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 20.0% $19.28 $20.00 $18.47 $18.49 $17.79 $17.27 $17.70 $17.07 $16.24 $16.26 $16.16 15.0% $15.00 13.4% 10.0% $10.00 8.2% 6.0% 5.8% 5.3% 5.0% $5.00 0.0% $0.00 December 31, 2023
Slide 32: 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 $35.00 $33.22 20.0% $30.79 $32.58 $29.12 $29.25 $28.40 $30.00 $27.63 $26.56 $26.73 $25.00 15.0% $24.80 14.0% 12.2% $20.00 10.0% 9.1% $15.00 7.2% 7.3% $10.00 5.0% $5.00 0.0%
Slide 33: Lease Maturities - Calgary
LEASE MATURITIES - URBAN WORKSPACE CALGARY % OF TOTAL GLA W/A RENTAL RATE ESTIMATED W/A MARKET RATE 25.0% $25.00 $20.74 20.0% $18.99 $20.00 $18.87 16.7% $16.08 15.0% $15.00 $13.20 $14.17 11.7% $13.35 $12.98 $11.73 10.0% $10.92 $10.00 8.8% 8.1% 6.6% 5.0% $5.00 0.0% $0.00 December 31, 2023 December 31
Slide 34: Lease Maturities - Vancouver
LEASE MATURITIES - URBAN WORKSPACE VANCOUVER % OF TOTAL GLA W/A RENTAL RATE ESTIMATED W/A MARKET RATE 30.0% $40.00 $39.31 $39.04 $39.00 $39.21 25.0% $38.00 $36.98 21.4% 20.1% $37.00 20.0% $37.06 $36.28 $36.00 $35.15 $35.62 15.5% 15.0% $35.00 $34.00 $34.23 10.8% 10.0% $33.79 $33.00 6.2% $32.00 5.0% $
Slide 35: Top-Ten Users Q1 2023
TOP-TEN USERS USER SECTOR % RENTAL REVENUE (1) % TOTAL GLA Media and 49% UBISOFT DIVERTISSEMENTS INC. Entertainment 3.1% 3.8% Telecommunications/ GOOGLE CANADA CORPORATION IT 2.4% 2.3% SHOPIFY INC Telecommunications/ IT 2.2% 1.4% 2003 SOCIÉTÉ QUÉBECOISE DES Government 2.1% 2.0% 18.0% INFRASTRUCTURES
Slide 36: Development Portfolio
ALLIED Development Portfolio
Slide 37: Development Pipeline
DEVELOPMENT PIPELINE TRANSFER ESTIMATED % OF OFFICE DEVELOPMENTS TO RENTAL PORTFOLIO ESTIMATED GLA ANNUAL NOI (1) DEVELOPMENT PRE-LEASED 78% THE WELL* (2) Q3 2022 - Q4 2023 763,000 $40.4M 98% BREITHAUPT, PHASE III* Q3 2023 147,000 $5.4M 100% 700 SAINT HUBERT Q3 2023 144,114 $4.5M 25% ADELAIDE & DUNC
Slide 38: Future/Shadow Development Pipeline
FUTURE/SHAD OW DEVELOPMEN T PIPELINE ZONING APPROVAL TOTAL POTENTIAL COMPLETED AND IN INCREMENTAL PROGRESS DENSITY (1) ESTIMATED ESTIMATED Toronto GLA GLA THE CASTLE 440,000 TORONTO 6,078,918 KING & PETER 790,000 KITCHENER 332,397 KING & SPADINA 430,000 MONTRÉAL 2,164,073 KING & BRANT 240,000 CALGAR
Slide 39: The Well
The Well Toronto 39
Slide 40: Breithaupt III
Breithaupt III Kitchener 40
Slide 41: 700 Saint Hubert
+ ' — — [ alte | t : | se > hl. ; | il ea, a We — ia = aie i 700 Saint Hubert Montréal 41 2 ee |
Slide 42: Adelaide & Duncan
Adelaide & Duncan Toronto 42
Slide 43: QRC West Phase II
7 ps ORC West Phase II Toronto 43
Slide 44: 108 East 5th Avenue
108 East 5th Avenue Vancouver 44
Slide 45: KING Toronto
KING Toronto Toronto 45
Slide 46: 365 Railway
365 Railway Vancouver 46
Slide 47: 400 West Georgia
400 West Georgia Vancouver 47
Slide 48: Development Completions
ALLIED Development Completions
Slide 49: QRC West, Toronto
QRC WEST, TORONTO This was a pioneering, large-scale intensification project that involved the integration 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 lea
Slide 50: 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 51: 180 John Street, Toronto
180 JOHN STREET, TORONTO Allied acquired the property in 2015. The property was redeveloped and 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 17,500 VALUE UNLEVERED YIELD VALUE CREATION AS
Slide 52: 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 53: 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 54: 425 Viger, Montréal
425 VIGER, MONTRÉAL In 2004, Allied expanded into Montréal with the purchase of 425 Viger. At the time, the property comprised of 200,000 square feet of GLA and was fully leased. In 2007, Allied purchased the adjacent parking lot with the intention of intensifying the combined property once the main
Slide 55: Risk Management
ALLIED Risk Management
Slide 56: Development
DEVELOPMENT – 15% limitation on development – Pre-leasing – Partial monetization – Financial management – Collaboration 56
Slide 57: Balance Sheet
BALANCE SHEET – Low leverage – Long-term, fixed-rate debt – Net debt as a multiple of adjusted EBITDA ratio of 10.5x – Total indebtedness ratio 36.5% – Interest coverage ratio of 2.4x The above ratios are non-GAAP measures defined in the Appendix on page 66 calculated as at March 31, 2023, Interest
Slide 58: Financial Covenants
FINANCIAL COVENANTS SENIOR UNSECURED DEBENTURES COVENANT THRESHOLD MARCH 31, 2023 PRO FORMA INTEREST COVERAGE RATIO Maintain a 12-month rolling consolidated 2.7x pro forma EBITDA of at least 1.65 times pro forma interest expense PRO FORMA ASSET COVERAGE TEST Maintain net consolidated debt below 65%
Slide 59: Debt Maturity Chart
DEBT MATURITY CHART MORTGAGES Mortgage PROMISSORY NOTENote Promissory UNSECURED TERM LOAN Unsecured Debentures UNSECURED Unsecured DEBENTURES Term Loan CONSOLIDATED Consolidated WA Int Rate W/A INT RATE $1,000,000 5.00% $900,000 4.42% 4.50% $250.0 $800,000 4.00% 3.48% $700,000 3.39% 3.50% 3.17% 3.11
Slide 60: Unencumbered Investment Properties and Properties Held for Sale
UNENCUMBERED INVESTMENT PROPERTIES AND INVESTMENT PROPERTIES HELD FOR SALE UNENCUMBERED INVESTMENT PROPERTIES AND % OF INVESTMENT PROPERTIES AND INVESTMENT INVESTMENT PROPERTIES HELD FOR SALE (1) PROPERTIES HELD FOR SALE UNENCUMBERED(1) $12 100% 95% 87% 87% 90% $10 80% $9.7 $9.7 73% 72% $9.2 68% 70%
Slide 61: Maximizing Flexibility While Strengthening the Balance Sheet
MAXIMIZING FLEXIBILTY WHILE STRENGTHENING THE BALANCE SHEET UNENCUMBERED INVESTMENT PROPERTIES TOTAL INVESTMENT PROPERTIES AND UNSECURED DEBT AS % OF TOTAL DEBT AND INVESTMENT PROPERTIES HELD FOR SALE (1) INVESTMENT PROPERTIES HELD FOR SALE (1) $14.0 100% 95% 87% 88% 90% CREDIT RATINGS $12.0 Investm
Slide 62: Environmental, Social & Governance (ESG)
Environmental, Social & Governance (ESG) 62
Slide 63: ESG Performance
ESG PERFORMANCE Improved GRESB Score by Six Points 15.4% 12.4% ENERGY USE INTENSITY (EUI) GREENHOUSE GAS INTENSITY (GHGI) In its 2022 GRESB assessment, Allied scored 86/100 for its standing investments, a six-point improvement from 2021 and scored 82/100 for its development reduction from our 2019 b
Slide 64: Highlights
HIGHLIGHTS OUTPERFORMED 2024 TARGETS In 2021, we exceeded our 2024 reduction targets for Energy Use Intensity (EUI), Greenhouse Gas Intensity (GHGI) and Water Use Intensity (WUI). ISSUED $1.1 BILLION OF GREEN BONDS In 2021, we announced our Green Financing Framework. In February 2021, we issued our
Slide 65: Massey Hall
Massey Hall Toronto 65
Slide 66: Appendix Definitions
ALLIED Appendix Definitions
Slide 67: 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 68: Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization
Unencumbered investment properties and investment properties held for sale is a non-GAAP measure defined as the value of investment properties and investment properties held for sale which are free and clear of any encumbrances. This is calculated on a proportionate share basis. Management believes
Slide 69: Interest Coverage Ratio and Total Return
This is a non-GAAP measure of Allied’s financial leverage, which is calculated on a proportionate basis by taking debt plus outstanding letters of credit divided by total assets. Management considers this metric useful as it indicates Allied’s ability to meet its debt obligations. INTEREST COVERAGE
Slide 70: 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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