Allied Properties Real Estate Investment Trust · TSX:AP.UN
Allied Properties Real Estate Investment Trust — Investor Presentation (November 2023)
70 slides from Allied Properties Real Estate Investment Trust's investor presentation, November 2023
Slide 1: Creativity & Connectivity
CREATIVITY & CONNECTIVITY November 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 — 24.4% compound annual growth rate on total assets — 8.9% average annual total return 4
Slide 5: Portfolio Growth - Total Assets (M)
PORTFOLIO GROWTH - TOTAL ASSETS (M) 11,910 10,389 11,277 128M IPO 9,410 8,324 4,456 5,214 5,824 6,706 11.3B Q3 2023 3,933 3,501 3,052 24.4% 2,155 1,583 1,155 809 949 503 128 157 267 385 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 Our NAV per Unit Over Time
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 49.83 $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 8.9% 1,600 1,500 1,400 1,300 1,200 AVERAGE ANNUAL TOTAL RETURN 1,100 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) OFFICE UDC (1) RETAIL PARKING $450 $400 $17.4 $20.4 $350 $12.8 $36.4 $13.1 $37.9 $30.8 $64.1 $25.0 $15.1 $60.6 $33.5 $300 $55.9 $22.9 $283.9 $12.9 $53.4 $270.0 $250 $21.6 $12.2 $254.5 $248.6 $11.1 $19.1 $49.1 $9.9 $18.4 $42
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
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 200 RENTAL PROPERTIES TOTAL RENTAL PORTFOLIO GLA VALUED AT $8.6B (1) (Not including Assets Held for Sale valued at $20.0M 14.8M SF and Properties Under Development valued at $1.2B) (1) TORONTO VANCOUVER 5.2M SF 1.0M SF ALLIED OCCUPANCY 86.
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 Urban Data Centres Urban Workspace 8.5% (1) 7.1% - Retail Calgary & 10.5% Edmonton Urban Data 6.1% Montréal Centres(1) & Ottawa 7.1% 32.1% Urban Workspace - Parking 5.7% Toronto & Kitchener Urban Workspace 46.2% - Office 76.7% For the three months ending September
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 $26.24 $24.78 $24.62 $24.34 $25.00 $23.45 $25.49 20.0% $23.61 $23.61 $21.70 $20.00 $20.41 Weighted average rental rate 15.0% % of Total GLA 11.6% $15.00 9.7% 9.4% 10.0% 7.4% $10.00 5.0% $5.00 2.8
Slide 30: 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% $19.34 $20.00 $18.53 $18.74 $17.66 $17.71 $17.95 $17.12 $17.37 $17.00 Weighted average rental rate 15.0% $16.12 $15.00 % of Total GLA 12.7% 10.0% $10.00 8.2% 6.0% 5.4% 5
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% $35.00 $33.12 $31.09 $32.38 $29.04 $30.00 $28.18 20.0% $27.00 $27.64 $26.72 $26.79 $25.00 Weighted average rental rate 15.0% 13.3% $20.00 % of Total GLA $20.12 11.7% $15.00 10.0% 8
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 $17.45 $18.00 $15.65 $15.53 20.0% $16.00 $14.10 17.2% $13.29 $14.00 $12.56 $13.02 $11.75 $11.80 15.0% $12.00 Weighted average rental rate % of Total GLA $10.00 $8.66 10.0% 10.0% $8.00 7.6
Slide 33: Lease Maturities - Vancouver
LEASE MATURITIES - URBAN WORKSPACE VANCOUVER % OF TOTAL GLA W/A RENTAL RATE ESTIMATED W/A MARKET RATE 30.0% $45.00 $39.62 $38.74 $40.00 $37.32 25.0% $39.33 $34.18 $35.32 $36.97 $35.00 21.9% $34.20 $34.59 20.0% $31.77 $30.00 Weighted average rental rate 17.4% $25.00 % of Total GLA 15.0% $20.00 10.5%
Slide 34: Top-Ten Users Q3 2023
TOP-TEN USERS USER SECTOR % RENTAL REVENUE (1) % TOTAL GLA Media and UBISOFT DIVERTISSEMENTS INC. 3.1% 3.7% 49% Entertainment Telecommunications/ GOOGLE CANADA CORPORATION IT 2.5% 3.2% Telecommunications/ SHOPIFY INC. IT 2.5% 1.8% 2003 SOCIÉTÉ QUÉBECOISE DES Government 1.9% 2.0% 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 (1) PRE-LEASED 81% THE WELL* (2) Q3 2022 - Q4 2023 763,000 $40.4M 98% 700 SAINT HUBERT Q3 2023 - Q1 2024 144,114 $5.0M 70% ADELAIDE & DUNCAN* Q4 2023 - Q4 2024 230,000 $11.0M 100
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 6,079,381 KING & PETER 790,000 KITCHENER 332,397 KING & SPADINA 430,000 MONTRÉAL 1,841,671 KING & BRANT 240,000 CALGARY 1,434,740 UNION
Slide 38: The Well
The Well Toronto 38
Slide 39: Breithaupt III
Breithaupt III Kitchener 39
Slide 40: 700 Saint Hubert
Mi. 85 APBBG SSS". SEES. ce ‘an be aid mas 700 Saint Hubert Montréal 40
Slide 41: Adelaide & Duncan
pat at Adelaide & Duncan Toronto 4l
Slide 42: QRC West Phase II
a ~ ~ ~ ee i~ me ——— ——— ORC West Phase II Toronto 42
Slide 43: 108 East 5th Avenue
108 East 5th Avenue Vancouver 43
Slide 44: KING Toronto
KING Toronto Toronto 44
Slide 45: 365 Railway
y =e ao \ Ae a\, \a \w'a n = uth > * . Tia =e ek Pisa 365 Railway Vancouver 45
Slide 46: 400 West Georgia
400 West Georgia Vancouver 46
Slide 47: Development Completions
ALLIED Development Completions
Slide 48: 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 49: 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 50: 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 FAIR VALUE CREATION AS
Slide 51: 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 52: 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 53: 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 54: Risk Management
ALLIED Risk Management
Slide 55: Development
DEVELOPMENT — 15% limitation on development — Pre-leasing — Partial monetization — Financial management — Collaboration 55
Slide 56: Balance Sheet
BALANCE SHEET — Low leverage — Long-term, fixed-rate debt — Net debt as a multiple of adjusted EBITDA ratio of 7.9x — Total indebtedness ratio 34.2% — Interest coverage ratio of 2.5x(1) The above ratios are non-GAAP measures defined in the Appendix on page 69 calculated as at September 30, 2023. (1)
Slide 57: Financial Covenants
FINANCIAL COVENANTS SENIOR UNSECURED DEBENTURES COVENANT THRESHOLD SEPTEMBER 30, 2023 PRO FORMA INTEREST COVERAGE RATIO Maintain a 12-month rolling consolidated 2.9x pro forma EBITDA of at least 1.65 times pro forma interest expense PRO FORMA ASSET COVERAGE TEST Maintain net consolidated debt below
Slide 58: Debt Maturity Chart
DEBT MATURITY CHART MORTGAGES Mortgage PROMISSORYPromissory NOTE NoteUNSECURED Unsecured Debentures TERM LOAN Unsecured UNSECURED Term Loan Consolidated DEBENTURES WA Int Rate CONSOLIDATED W/A INT RATE $1,000,000 5.00% $900,000 4.42% 4.50% 4.29% 4.29% $250.0 $800,000 4.00% 3.48% $700,000 3.39% 3.50%
Slide 59: Unencumbered Investment Properties and Investment 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% 90% 85% $10 80% $9.7 73% 72% $9.2 68% 70% $8.4
Slide 60: Maximizing Flexibility While Strengthening the Balance Sheet
MAXIMIZING FLEXIBILITY 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) $12.0 100% 93% 87% 90% CREDIT RATINGS 84% $10.0 Invest
Slide 61: Environmental, Social & Governance (ESG)
Environmental, Social & Governance (ESG) 61
Slide 62: 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 63: 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 64: 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 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: 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 69: Net Debt
NET DEBT Net debt is a non-GAAP measure, calculated on a proportionate basis, as debt less cash and cash equivalents and less a deposit management considers to be cash equivalent. The most directly comparable IFRS measure to net debt is debt. Management considers net debt a useful measure for evalua
Slide 70: 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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