Allied Properties Real Estate Investment Trust · TSX:AP.UN
Allied Properties Real Estate Investment Trust — Investor Presentation (February 2022)
75 slides from Allied Properties Real Estate Investment Trust's investor presentation, February 2022
Slide 1: Creativity & Connectivity
CREATIVITY & CONNECTIVITY February 2022
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 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23 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 – 26.42% compound annual growth rate on total assets – 14.4% average annual total return 4
Slide 5: Portfolio Growth - Total Assets
PORTFOLIO GROWTH - TOTAL ASSETS (M) 128M IPO 10.4B Q4 2021 26.42 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
Slide 6: Increasing 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 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021(2) (1) Annual distribution rate in place at March 15 of each year. (2) Net Asset Value
Slide 7: Returns to Unitholders
RETURNS TO UNITHOLDERS TOTAL RETURN INDEX ALLIED S&P / TSX TOTAL RETURNS INDEX S&P / TSX CAPPED REIT INDEX 14.4% AVERAGE ANNUAL TOTAL RETURN Source: Bloomberg as of December 31, 2021. 7
Slide 8: NOI by Space Type
FOCUSED ON OPERATING DISTINCTIVE URBAN WORKSPACES AND URBAN DATA CENTRES: NOI BY SPACE TYPE (IN $M) OFFICE UDC RETAIL PARKING 2014(2) 2015 (2) 2016 (2) 2017 (2) 2018 2019 2020 2021 (1) Net Operating Income ("NOI") is a non-IFRS measure, see Appendix on page 71 for NOI definition. (2) The NOI allocat
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, Toronto
500-522 King West Toronto 11
Slide 12: The Landing, Vancouver
The Landing Vancouver 12
Slide 13: 35-39 Front Street East, Toronto
35-39 Front Street East Toronto 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 QRC West
Intensification of QRC West Toronto 20
Slide 21: Intensification of The Breithaupt Block
Intensification of The Breithaupt Block Kitchener 21
Slide 22: King Portland Centre
King Portland Centre Toronto 22
Slide 23: Rental Portfolio
ALLIED Rental Portfolio
Slide 24: Preferred Provider of Workspace in the Canadian Urban Market
PREFERRED PROVIDER OF WORKSPACE IN THE CANADIAN URBAN MARKET 195 RENTAL PROPERTIES TOTAL RENTAL PORTFOLIO GLA VALUED AT $8.4B(3) (Not including 11 Properties Under Development valued at $1.2B) (3) 14.2M SF TORONTO CENTRAL REGION VANCOUVER WESTERN REGION 4.8M SF INCLUDING 3 URBAN DATA CENTRES 717K SF
Slide 25: 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 26: 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 27: 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 28: 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 29: Urban Workspace Top-Ten Properties
URBAN WORKSPACE TOP-TEN PROPERTIES NORMALIZED APPRAISED PROPERTY NAME LQA NOI (2) FAIR VALUE CAP RATE PRINCIPAL USERS 1001 BOULEVARD ROBERT- $ 17,039 $373,750 5.25% AON Canada Inc, Autorité Régionale de Transport BOURASSA, MONTRÉAL (1) Métropolitain, Hydro-Québec, National Bank of Canada CITÉ MULTIM
Slide 30: Network-Dense Urban Data Centres
NETWORK-DENSE URBAN DATA CENTRES NORMALIZED APPRAISED PROPERTY NAME CAP RATE PRINCIPAL USERS LQA NOI(1) FAIR VALUE 151 FRONT W, TORONTO $40,822 $678,800 5.00% Bell, Cologix, Equinix, Digital Realty 250 FRONT W, TORONTO 15,978 348,710 5.75% AWS, Cloud Service Provider 905 KING W, TORONTO 4,673 105,51
Slide 31: Connectivity
CONNECTIVITY Source: PeeringDB.com 31
Slide 32: Urban Data Centres: Critical Communications Infrastructure
OUR URBAN DATA CENTRES ARE A CRITICAL COMPONENT OF CANADA’S COMMUNICATIONS INFRASTRUCTURE Our Urban Data Centres are a critical component of Canada's communications infrastructure UDC NOI EXCLUDING ANCILLARY UDC NOI Excluding REVENUE Ancillary Revenue UDC NOI FROM ANCILLARY UDC NOI REVENUE from Anci
Slide 33: NOI by Segment and Use
NOI (1) BY SEGMENT NOI (1) BY USE 16.9% 16.9% URBAN DATA CENTRES URBAN DATA CENTRES 39.7% TORONTO 11.1% AND CALGARY, 8.6% KITCHENER EDMONTON RETAIL AND VANCOUVER 3.6% PARKING 32.3% MONTRÉAL 70.9% AND OTTAWA OFFICE For the period ending December 31, 2021. (1) NOI is a non-IFRS measure, see Appendix o
Slide 34: Lease Maturities - Urban Workspace
LEASE MATURITIES - URBAN WORKSPACE % OF TOTAL GLA W/A RENTAL RATE ESTIMATED W/A MARKET RATE 25.0% $35.00 % OF TOTAL GLA W/A RENTAL RATE ESTIMATED W/A MARKET RATE $30.00 20.0% $26.94 $26.84 $24.55 $24.69 $24.30 $25.00 $22.52 $23.12 $23.21 $22.91 15.0% $20.00 $20.28 10.9% 10.3% $15.00 10.0% 8.7% 8.8%
Slide 35: 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% $35.00 % OF TOTAL GLA W/A RENTAL RATE ESTIMATED W/A MARKET RATE $30.00 20.0% $25.00 15.0% $20.00 $18.67 $18.19 $17.97 $17.58 $17.57 $18.20 $18.32 $17.88 $17.92 $16.72 $15.00 10.0% 8.
Slide 36: 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% % OF TOTAL GLA W/A RENTAL$33.62 RATE ESTIMATED W/A MARKET RATE $35.00 $30.70 $32.57 $30.28 $29.13 $30.00 20.0% $27.06 $26.37 $26.04 $25.00 $25.67 $22.88 15.0% 14.0% $20.00 13.7% 12
Slide 37: Lease Maturities - Calgary and Vancouver
LEASE MATURITIES - URBAN WORKSPACE CALGARY AND VANCOUVER % OF TOTAL GLA W/A RENTAL RATE ESTIMATED W/A MARKET RATE 25.0% $35.00 % OF TOTAL GLA W/A RENTAL RATE ESTIMATED W/A MARKET RATE $30.00 $28.43 20.0% $27.12 $26.88 $27.46 $26.54 $25.00 $21.82 15.6% $21.13 15.0% 14.0% $21.52 $20.00 $19.68 $16.75 1
Slide 38: Lease Maturities - Urban Data Centres
LEASE MATURITIES - URBAN DATA CENTRES % OF TOTAL GLA W/A RENTAL RATE ESTIMATED W/A MARKET RATE 25.0% % OF TOTAL GLA W/A RENTAL RATE ESTIMATED W/A MARKET RATE $158.75 $160.00 $158.75 $136.41 $140.00 20.0% $136.02 18.6% 17.6% $120.00 $107.94 $102.15 $107.05 15.0% $100.00 $94.86 $85.17 $80.00 10.7% $81
Slide 39: Top-Ten Users Q4 2021
TOP-TEN USERS USER SECTOR % RENTAL REVENUE % TOTAL GLA 49% CLOUD SERVICE PROVIDER Data Centre/IT 4.4% 0.7% UBISOFT Gaming/IT 2.5% 3.8% COLOGIX Data Centre/IT 2.3% 0.5% 2003 EQUINIX Data Centre/IT 2.2% 0.4% 19.9% GOOGLE CANADA CORPORATION IT 2.0% 2.4% NATIONAL CAPITAL COMMISSION, A CANADIAN CROWN COR
Slide 40: Development Portfolio
ALLIED Development Portfolio
Slide 41: Active Development Pipeline
ACTIVE DEVELOPMENT PIPELINE % OF OFFICE % OF OFFICE DEVELOPMENT 68% DEVELOPMENT 2022 ESTIMATED PRE-LEASED 2024 ESTIMATED PRE-LEASED GLA NOI GLA NOI THE LOUGHEED 88,000 TBD — KING TORONTO* 100,000 $5.5M — COLLEGE & MANNING* 27,000 $1.1M N/A 100,000 $5.5M+ THE WELL* 763,000 $40.4M 90% PRE-LEASED BOARD
Slide 42: Future/Shadow Development Pipeline
FUTURE/SHADOW DEVELOPMENT PIPELINE Zoning Approval in To Be Rezoned Place and in Progress ESTIMATED ESTIMATED Toronto GLA GLA UNION CENTRE 1,330,000 TORONTO 5,823,758 KING & PETER 790,000 MONTRÉAL 1,972,727 THE CASTLE 460,000 CALGARY 1,435,762 BATHURST STREET OTHER 397,246 ASSEMBLY 318,000 9,629,493
Slide 43: The Lougheed, Calgary
The Lougheed Calgary 43
Slide 44: Boardwalk-Revillon Building, Edmonton
Boardwalk-Revillon Building Edmonton 44
Slide 45: 400 Atlantic, Montréal
400 Atlantic Montréal 45
Slide 46: Breithaupt III, Kitchener
Breithaupt III Kitchener 46
Slide 47: The Well, Toronto
The Well Toronto 47
Slide 48: Adelaide & Duncan, Toronto
Adelaide & Duncan Toronto 48
Slide 49: QRC West Phase II
¢; E— MM ai. QRC West Phase II Toronto 49
Slide 50: KING Toronto
‘eee KING Toronto Toronto
Slide 51: King & Brant
| —— King & Brant Toronto 51
Slide 52: 400 West Georgia, Vancouver
400 West Georgia Vancouver 52
Slide 53: Development Completions
ALLIED Development Completions
Slide 54: 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 55: 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 56: 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 CAPITALIZED INTEREST & UNLEVERED
Slide 57: 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 58: 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 59: 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 60: Risk Management
ALLIED Risk Management
Slide 61: Development Risk Management
DEVELOPMENT – 15% limitation on development – Pre-leasing – Partial monetization – Financial management – Collaboration 61
Slide 62: Balance Sheet
BALANCE SHEET – Low leverage – Long-term, fixed-rate debt – Net debt as a multiple of adjusted EBITDA ratio of 9.4x – Total indebtedness ratio 33.5% – Interest coverage ratio of 3.4x The above ratios are non-IFRS measures defined in the Appendix on page 71 calculated as at December 31, 2021, Interes
Slide 63: Financial Covenants
FINANCIAL COVENANTS SENIOR UNSECURED DEBENTURES COVENANT THRESHOLD DECEMBER 31, 2021 PRO FORMA INTEREST COVERAGE RATIO Maintain a 12-month rolling consolidated 3.5x 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 64: Debt Maturity Chart
DEBT MATURITY CHART MORTGAGES UNSECURED TERM LOANS UNSECURED DEBENTURES CONSOLIDATED W/A INT RATE MILLIONS This chart summarizes the principal payable in regards to Allied's debt obligations as at December 31, 2021. 64
Slide 65: Unencumbered Investment Properties
UNENCUMBERED INVESTMENT PROPERTIES UNENCUMBERED ASSETS ($) % UNENCUMBERED $10,000,000 100% UNENCUMBERED INVESTMENT PROPERTIES(1) % OF INVESTMENT PROPERTIES UNENCUMBERED(1) 94% $9,000,000 90% $9.1B $6.9B $8,000,000 80% $6.5B 73% 72% $7,000,000 68% 70% $6.5B $6,000,000 60% 52% $5.5B $5,000,000 50% 47%
Slide 66: Maximizing Flexibility While Strengthening the Balance Sheet
MAXIMIZING FLEXIBILTY WHILE STRENGTHENING THE BALANCE SHEET UNENCUMBERED INVESTMENT UNENCUMBEREDPROPERTIES INVESTMENT PROPERTIES TOTAL INVESTMENT TOTAL PROPERTIESUNSECURED INVESTMENT PROPERTIES (3) UNSECURED DEBT DEBT AS % OF TOTAL DEBT AS % OF TOTAL DEBT $10.0 100% $9.7 93% $9.0 90% CREDIT RATINGS
Slide 67: Environmental, Social & Governance (ESG)
Environmental, Social & Governance (ESG) 67
Slide 68: ESG Reporting
ESG REPORTING – Allied prepared its Second Annual ESG Report in alignment with the Global Reporting Initiative (GRI) and the Sustainability Accounting Standards Board (SASB) Real Estate Standard. Allied intends to report its progress on the Task Force on Climate-related Financial Disclosures (TCFD)
Slide 69: ESG Strategy
ESG STRATEGY GOALS 2024 TARGETS Energy management Sustainable design standards Energy Use Intensity Reduce the energy consumption at our Build long-term value by integrating sustainable Average Energy Use Intensity (EUI) of 22.6 kWh/ft² properties by optimizing systems design and design requirements
Slide 70: Massey Hall, Toronto
Massey Hall Toronto 70
Slide 71: Appendix Definitions
ALLIED Appendix Definitions
Slide 72: Certain Definitions and Non-IFRS Measures
CERTAIN DEFINITIONS AND NON-IFRS 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 73: Unencumbered Investment Properties; Adjusted EBITDA
proportionate basis. The most directly comparable IFRS measure to NOI is Operating Income. Management believes this is a useful measure as it demonstrates the cash generating operating performance of its income producing properties. UNENCUMBERED INVESTMENT PROPERTIES Unencumbered investment properti
Slide 74: Total Indebtedness Ratio, Interest Coverage Ratio, Total Return
comparable IFRS measure to net debt is debt. Management considers net debt a useful measure for evaluating debt levels and interest coverage. TOTAL INDEBTEDNESS RATIO This is a non-IFRS measure of Allied’s financial leverage, which is calculated on a proportionate basis by taking debt plus outstandi
Slide 75: 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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