Allied Properties Real Estate Investment Trust · TSX:AP.UN
Allied Properties Real Estate Investment Trust — Investor Presentation (February 2021)
69 slides from Allied Properties Real Estate Investment Trust's investor presentation, February 2021
Slide 1: Creativity & Connectivity
CREATIVITY & CONNECTIVITY February 2021
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 “Risks and Un
Slide 3: Table of Contents
TABLE OF CONTENTS Investment Highlights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 Strategy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 Rental Portfolio . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21 Development
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 – 27.9% compound annual growth rate on total assets – 13.8% average annual total return 4
Slide 5: Portfolio Growth - Total Assets
PORTFOLIO GROWTH - TOTAL ASSETS (M) 120M IPO 9.4B Q4 2020 27.9% CAGR Values up to December 31st, 2009 are based on financial reporting prepared in accordance with previous Canadian GAAP standards. Values after that date are reported in accordance with International Financial Reporting Standards (IFR
Slide 6: Returns to Unitholders
RETURNS TO UNITHOLDERS TOTAL RETURN INDEX 13.8% AVERAGE ANNUAL TOTAL RETURN Source: Bloomberg as of January 29, 2021. 6
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
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Slide 11: 35-39 Front Street East
35-39 Front Street East Toronto 11
Slide 12: 12
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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 202 PROPERTIES 14.0M SQUARE FEET VANCOUVER EDMONTON 642,720 SF 129,505 SF MONTRÉAL 6,510,750 SF TORONTO 4,723,451 SF Including Urban Data Centres CALGARY 509,911 SF 1,190,587 SF OTTAWA 231,468 SF KITCHENER 562,125 SF As of December 31, 2020. 22
Slide 23: Montréal Portfolio
MONTRÉAL PORTFOLIO Mile-Ex BE RN AR T. S D AV L E. AU PA RE RK NT AV N BL E. V ST D. UR . ST BA .D IN Mile End EN ST IS . ST HE . R N RU LA IJ UR U ES IER LIE AV AIN N E. ST BO E AV SA T- U .A IN E. RÉ LE T- C MB VA AN ST OU M TO RD I RO R JA IN CE AT VI CQ E ISE LL ST L W Central LE UE E- .W AT ST
Slide 24: Toronto Portfolio
TORONTO PORTFOLIO COLLEGE ST. REIT JOINT VENTURE N DUFFERIN ST. ANCILLARY PARKING Little Italy DUNDAS ST. W. BAY ST. UNIVERSITY AVE. SPADINA AVE. CHURCH ST. SHERBOURNE ST. PARLIAMENT ST. JARVIS ST. QUEEN ST. W. STRACHAN AVE. RICHMOND ST. W. RICHMOND ST. E. Corktown YONGE ST. ADELAIDE ST. W. BATHURST
Slide 25: Calgary Portfolio
CALGARY PORTFOLIO CENTRE ST. S Downtown 4 AVE SW 5 AVE SW 6 AVE SW Central 7 AVE SW Business 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 Beltline Inglewood 12 9A 17 AVE. S
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 $21,598 $421,530 4.75% Desjardins, Morgan Stanley, SAP Canada 700 DE LA GAUCHETIÈRE, MONTRÉAL 17,148 366,200 5.25% AON Canada Inc, Autorité Régionale de Transpo
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 $36,770 $593,610 5.00% Bell, Cologix, Equinix 250 FRONT W, TORONTO 15,448 332,500 5.75% AWS, Cloud Service Provider 905 KING W, TORONTO 4,437 98,530 5.75% Beanfield, C
Slide 29: Connectivity
CONNECTIVITY Source: PeeringDB.com 29
Slide 30: Internet Traffic on TorIX
INTERNET TRAFFIC ON TORIX Year-Over-Year Traffic Trending 1,250 1,000 750 Gbps 500 250 0 2000 2005 2010 2015 2020 2025 Source: TorIX Website Source: TorIX Website 30
Slide 31: NOI by Segment and Use
NOI BY SEGMENT NOI BY USE 16.3% 16.3% NOI BY SEGMENT NOI BY USE URBAN DATA CENTRES URBAN DATA CENTRES 41.3% TORONTO 11.2% AND CALGARY, 7.3% KITCHENER EDMONTON RETAIL AND VANCOUVER 3.8% PARKING 31.2% Urban Data Centres Calgary, Edmonton and Vancouver Montréal and Ottawa Toronto and Kitchener Urban Da
Slide 32: 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% $25.25 $24.06 $25.00 $23.45 $24.41 $22.61 $22.17 $23.23 15.0% $22.14 $20.07 $20.00 $18.23 12.1% 10.5% 10.2% $15.00 10.0% 8.5% 6.4% $10.00 5.0% $5.00 0.0% $0.00 December 31, 2021 Dece
Slide 33: Lease Maturities - 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% $18.83 $20.00 $17.94 $17.69 $17.45 $17.08 $16.62 $17.86 $17.03 10.7% $16.88 $16.82 $15.00 10.0% 9.6% $10.00 6.2% 5.2% 5.0% 3.1% $5.
Slide 34: Lease Maturities - 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 $35.00 $31.67 20.0% $30.58 $30.28 $29.11 $30.00 $27.46 $28.61 15.5% $25.36 $25.00 15.0% $25.78 $21.46 13.2% $19.47 12.1% $20.00 10.0% 9.7% 8.7% $15.00 $10.
Slide 35: Lease Maturities - 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 $26.47 $25.00 $23.51 $23.11 20.0% $22.10 $20.89 $21.67 $21.15 $20.20 $20.00 16.5% 15.0% $18.27 12.4% 12.0% $14.18 $15.00 11.2% 10.0% 11.1% $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 $136.01 $140.00 20.0% $124.66 $134.82 18.5% $120.00 $107.52 $109.52 $100.60 $99.45 $106.81 $100.00 15.0% $96.47 $86.18 $80.00 15.0% 10.6% 10.0% $60.00 $40.00 4.8% 5.0% $20.0
Slide 37: Top-Ten Users Q4 2020
TOP-TEN USERS USER SECTOR % RENTAL REVENUE (Q4 2020) 49% CLOUD SERVICE PROVIDER Data Centre/IT 4.5% UBISOFT Gaming/IT 2.7% COLOGIX Data Centre/IT 2.4% 2003 EQUINIX Data Centre/IT 2.1% 19.3% SHOPIFY INC. Commerce/IT 1.5% NATIONAL CAPITAL COMMISSION, A CANADIAN CROWN CORPORATION Government 1.4% Q4 202
Slide 38: Development Portfolio
ALLIED Development Portfolio
Slide 39: Active Development Pipeline
ACTIVE DEVELOPMENT PIPELINE % OF OFFICE % OF OFFICE DEVELOPMENT DEVELOPMENT 2021 ESTIMATED PRE-LEASED 2023 ESTIMATED PRE-LEASED GLA NOI GLA NOI THE LOUGHEED 88,000 TBD — QRC WEST, PHASE II 90,000 $4.2M — COLLEGE & MANNING* 27,000 $1.1M — KING TORONTO* 100,000 $5.5M — BOARDWALK BUILDING 168,437 TBD —
Slide 40: Future/Shadow Development Pipeline
FUTURE/SHADOW DEVELOPMENT PIPELINE Zoning Approval in Place To Be Rezoned and in Progress ESTIMATED ESTIMATED Toronto GLA GLA UNION CENTRE 1,129,000 TORONTO 5,365,221 KING & PETER 790,000 MONTRÉAL 1,635,504 ADELAIDE & SPADINA 230,000 CALGARY 1,148,679 KING & BRANT 130,000 OTHER 621,901 2,279,000 8,7
Slide 41: Boardwalk Building
Boardwalk Building Edmonton 41
Slide 42: Breithaupt III
Breithaupt III Kitchener 42
Slide 43: The Well
The Well Toronto 43
Slide 44: Adelaide & Duncan
Adelaide & Duncan Toronto 44
Slide 45: QRC West Phase II
QRC West Phase II Toronto 45
Slide 46: KING Toronto
KING Toronto Toronto 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 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 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 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 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: 425 Viger, Montréal
425 VIGER, MONTRÉAL In 2004, Allied expanded into Montreal 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 54: 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 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 to EBITDA ratio of 7.7x – Debt ratio 30.9% – Interest coverage ratio of 3.5x The above ratios are calculated as at December 31, 2020, adjusted for the issuance of $600M Series H unsecured debentures, the repayment of the Series B d
Slide 58: Financial Covenants
FINANCIAL COVENANTS SENIOR UNSECURED DEBENTURES COVENANT THRESHOLD DECEMBER 31, 2020 PRO FORMA INTEREST COVERAGE RATIO Maintain a 12-month rolling consolidated 3.2x pro forma EBITDA of at least 1.65 times pro forma interest expense PRO FORMA ASSET COVERAGE TEST Maintain net consolidated debt below 2
Slide 59: Debt Maturity Chart
DEBT MATURITY CHART MORTGAGE UNSECURED MORTGAGES DEBENTURES TERM LOANS TERM LOAN UNSECURED DEBENTURES CONSOLIDATED WA INT CONSOLIDATED RATE W/A INT RATE $700,000 5.00% 4.70% 4.42% 4.50% 4.30% 4.24% $600.0 $600,000 4.00% 3.55% 3.50% $500,000 3.39% 3.50% 3.17% 3.11% 3.08% 3.00% $400,000 $400.0 2.50% $
Slide 60: Unencumbered Assets
UNENCUMBERED ASSETS UNENCUMBERED ASSET POOL % OF ASSET POOL UNENCUMBERED $7,000,000,000 78% 80% 73% $6.8B 72% $6.5B 68% 70% $6,000,000,000 $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 61: Environmental, Social & Governance (ESG)
Environmental, Social & Governance (ESG) 61
Slide 62: Environmental, Social & Governance
ENVIRONMENTAL, SOCIAL & GOVERNANCE ENVIRONMENTAL Our impact on the natural world at both corporate and property levels. We aim to protect the natural environment, while reducing our environmental footprint through thoughtful acquisitions, development, and operations. SOCIAL Our relationship with key
Slide 63: Steps to Measure and Improve Performance
STEPS TO MEASURE AND IMPROVE PERFORMANCE ENVIRONMENTAL - Submitted to GRESB in 2020 on 2019 performance. - Scored 64 -“Strong First-Year Showing” according to GRESB. SOCIAL - Engaged Kincentric to conduct employee engagement survey in 2020. - Scored 78%, in the top quartile of participating Canadian
Slide 64: WiredScore
ALLIED WiredScore
Slide 65: WiredScore
WIREDSCORE - WiredScore is a company founded on the principle of wanting to improve the technological infrastructure of cities. - WiredScore Certification is a commercial real estate rating system that empowers owners to understand, improve, and promote their buildings’ digital infrastructure. - All
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 and 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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