Allied Properties Real Estate Investment Trust · TSX:AP.UN
Allied Properties Real Estate Investment Trust — Investor Presentation (August 2022)
76 slides from Allied Properties Real Estate Investment Trust's investor presentation, Aug 17, 2022
Slide 1: Creativity & Connectivity
CREATIVITY & CONNECTIVITY August 2022
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 “Risk Factors
Slide 3: Table of Contents
TABLE OF CONTENTS Investment Highlights . . . . . . . . . . . . . . . . . . . . . . . 4 Strategy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 Rental Portfolio . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23 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 – 26.4% compound annual growth rate on total assets – 12.5% average annual total return 4
Slide 5: Portfolio Growth - Total Assets
PORTFOLIO GROWTH - TOTAL ASSETS (M) 11,6 23 8 ,324 9 ,410 10 ,38 9 128M IPO 11.6B 6 ,70 6 5,8 24 5,214 4,456 3,50 1 3,9 33 Q2 2022 3,0 52 26.4 2,155 1,58 3 1,155 9 49 128 157 26 7 38 5 50 3 80 9 % IP O 20 0 3 20 0 4 20 0 5 20 0 6 20 0 7 20 0 8 20 0 9 20 10 20 11 20 12 20 13 20 14 20 15 20 16 20 17 2
Slide 6: Focused on 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 $ 1.8 0 $ 60 .0 0 $ 1.75 $ 1.70 $ 1.70 $ 1.6 5 $ 50 .0 0 51.20 50 .30 $ 1.6 0 4 8 .54 $ 1.6 0 $ 1.56 4 6 .55 $ 1.53 4 2.12 $ 40 .0 0 $ 1.50 $ 1.50 $ 1.46 38 .19 35.6 6 $ 1.41 33
Slide 7: Returns to Unitholders
RETURNS TO UNITHOLDERS TOTAL RETURN INDEX $ 1,70 0 ALLIED S&P / TSX TOTAL RETURNS INDEX S&P / TSX CAPPED REIT INDEX $ 1,60 0 12.5% $ 1,50 0 $ 1,40 0 $ 1,30 0 $ 1,20 0 $ 1,10 0 AVERAGE $ 1,0 0 0 ANNUAL TOTAL $ 90 0 RETURN $ 80 0 $ 70 0 $ 60 0 $ 50 0 $ 40 0 $ 30 0 $ 20 0 $ 10 0 $0 20 0 3 20 0 4 20 0 5
Slide 8: NOI by Space Type
FOCUSED ON OPERATING DISTINCTIVE URBAN WORKSPACES AND URBAN DATA CENTRES: NOI BY SPACE TYPE (IN $M) $400 OFFICE UDC RETAIL PARKING $ 15.8 $ 3 50 $ 12.8 $ 3 6 .1 $ 13 .1 $ 3 0 .8 $ 25.0 $ 6 3 .3 $ 6 0 .6 $ 30 0 $ 15.1 $ 55.9 $ 22.9 $ 12.9 $ 53 .4 $ 26 4 .2 $ 250 $ 21.6 $ 12.2 $ 254 .5 $ 24 8 .6 $ 19
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 17: 17
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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, Toronto
Intensification of QRC West Toronto 19
Slide 20: Intensification of QRC West, Toronto
Intensification of QRC West Toronto 20
Slide 21: Intensification of The Breithaupt Block, Kitchener
Intensification of The Breithaupt Block Kitchener 21
Slide 22: King Portland Centre, Toronto
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 200 RENTAL PROPERTIES TOTAL RENTAL PORTFOLIO GLA VALUED AT $9.2B (3) (Not including Properties Under Development valued at $1.6B) (3) 14.8M SF TORONTO 5.2M SF VANCOUVER INCLUDING URBAN DATA CENTRES 509K SF 1.0M SF ALLIED OCCUPANCY 91.4% AL
Slide 25: Montréal Portfolio
MONTREAL PORTFOLIO Quartier de “* Vieux Monti fay x Cité Multimédia. wenn 3 a 25
Slide 26: 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. JARVIS ST. SHERBOURNE ST. PARLIAMENT ST. QUEEN ST. W. RICHMOND ST. W. STRACHAN AVE. RICHMOND ST. E. Corktown ADELAIDE ST. W. YONGE ST. BATHURST
Slide 27: Calgary Portfolio
CALGARY PORTFOLIO SAVE ay 6 AVE SW SAVE SW SAVE sw OLYMPIC WAY SE 17 AVE. SW | | [ Lo MACLEOD TRAIL | 2 / b 6ST.SE % 16 ST. SE 25 AVE.SE — ; Be gD
Slide 28: 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 O AR W D D 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 O S M IL ER N TO ST . AI N ST N . . G LA ST RA N . N D VI ST LL . E ST . Yaleto
Slide 29: Urban Workspace Top-Ten Properties
URBAN WORKSPACE TOP-TEN PROPERTIES NORMALIZED APPRAISED PROPERTY NAME LQA NOI (1) FAIR VALUE CAP RATE PRINCIPAL USERS 1001 BOULEVARD ROBERT-BOURASSA, $16,830 $351,370 5.50% AON Canada Inc, Autorité Régionale de Transport MONTRÉAL Métropolitain, Hydro-Québec, National Bank of Canada LE NORDELEC, MONT
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 $41,616 $770,830 4.50% Bell, Cologix, Digital Realty, Equinix 250 FRONT W, TORONTO 16,418 362,320 5.25% AWS, Global Technology Provider 905 KING W, TORONTO 4,741 11
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 REVENUE UDC NOI FROM ANCILLARY REVENUE YEAR-OVER-YEAR TRAFFIC TRENDING (GBPS) UDC NOI Exclud
Slide 33: NOI by Segment / NOI by Use
NOI BY SEGMENT NOI BY USE 16.0% URBAN DATA 16.0% CENTRES URBAN DATA CENTRES 29.9% 8.7% MONTRÉAL VANCOUVER AND OTTAWA 9.8% RETAIL 5.5% CALGARY, AND 4.9% EDMONTON PARKING Montréal & Ottawa Toronto & Kitchener Calgary, Edmonton Vancouver Urban Data Centres Urban Data Centres Retail Parking Office 39.9%
Slide 34: Lease Maturities - Urban Workspace
LEASE MATURITIES - URBAN WORKSPACE % OF TOTAL GLA W/A RENTAL RATE ESTIMATED W/A MARKET RATE 25.0 % $ 35.0 0 $ 30 .0 0 20 .0 % $ 24.95 $ 24.29 $ 25.0 0 $ 23.0 5 $ 22.30 $ 22.34 $ 24 .31 $ 22.9 5 15.0 % $ 20 .0 0 $ 20 .52 $ 20 .4 8 $ 19 .8 1 11.1% $ 15.0 0 10 .0 % 9.4% 9.4% 6.5% $ 10 .0 0 5.4% 5.0 % $
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 % $ 35.0 0 $ 30 .0 0 20 .0 % $ 25.0 0 15.0 % $ 18.56 $ 20 .0 0 $ 17.83 $ 18.0 7 $ 17.40 $ 17.64 $ 17.54 $ 17.70 $ 17.76 $ 17.0 7 $ 17.37 $ 15.0 0 10 .0 % 8.0 % 7.6% $ 10 .0 0 5.1% 4.8
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 % $ 35.0 0 $ 33.0 5 $ 32.54 $ 29.91 $ 29.88 $ 28.74 $ 30 .0 0 20 .0 % $ 25.50 $ 26 .6 1 $ 26 .75 $ 25.0 0 $ 24 .9 4 15.0 % $ 21.38 14.1% $ 20 .0 0 12.1% $ 15.0 0 9.8% 10 .0 % 8.4% 7
Slide 37: Lease Maturities - Calgary
LEASE MATURITIES - URBAN WORKSPACE CALGARY % OF TOTAL GLA W/A RENTAL RATE ESTIMATED W/A MARKET RATE 25.0 % $ 25.0 0 $ 21.57 $ 21.0 3 $ 21.0 7 20 .0 % $ 20 .0 0 16.8% 16.5% $ 15.6 3 $ 16.35 15.0 % $ 15.0 0 $ 14.75 $ 14.84 $ 13.76 $ 12.51 10 .0 % $ 8 .9 9 $ 10 .0 0 7.2% 6.8% 5.0 % 4.2% $ 5.0 0 0 .0 %
Slide 38: Lease Maturities - Vancouver
LEASE MATURITIES - URBAN WORKSPACE VANCOUVER % OF TOTAL GLA W/A RENTAL RATE ESTIMATED W/A MARKET RATE 30 .0 % $ 38.58 $ 40 .0 0 $ 36.74 $ 36.90 $ 37.0 6 $ 38 .32 $ 36 .9 2 $ 33.75 $ 35.0 0 25.0 % $ 35.0 5 $ 33.9 7 21.5% $ 30 .0 0 $ 29 .35 20 .3% 20 .0 % $ 25.0 0 15.0 % $ 20 .0 0 12.4% $ 15.0 0 10 .0
Slide 39: Lease Maturities - Urban Data Centres
LEASE MATURITIES - URBAN DATA CENTRES % OF TOTAL GLA W/A RENTAL RATE ESTIMATED W/A MARKET RATE 25.0 % $ 180 .0 0 22.3% $ 160 .35 $ 16 0 .0 0 $ 16 0 .35 20 .0 % $ 136.95 $ 140 .0 0 $ 136 .72 $ 121.0 0 $ 120 .0 0 $ 120 .4 2 15.0 % $ 10 2.19 13.6% $ 10 0 .0 0 $ 85.36 $ 9 4 .9 0 10 .7% $ 80 .0 0 $ 8 0 .
Slide 40: Top-Ten Users Q2 2022
TOP-TEN USERS USER SECTOR % RENTAL REVENUE % TOTAL GLA 49% GLOBAL TECHNOLOGY PROVIDER* Data Centre/IT 4.3% 0.7% UBISOFT Gaming/IT 2.4% 3.7% COLOGIX Data Centre/IT 2.3% 0.5% 2003 GOOGLE CANADA CORPORATION IT 2.2% 2.3% 19.7% EQUINIX Data Centre/IT 2.1% 0.4% NATIONAL CAPITAL COMMISSION, Government 1.4%
Slide 41: Development Portfolio
ALLIED Development Portfolio
Slide 42: Development Pipeline
DEVELOPMENT PIPELINE % OF OFFICE TRANSFER DEVELOPMENTS TO RENTAL PORTFOLIO ESTIMATED GLA ESTIMATED ANNUAL NOI (1) DEVELOPMENT PRE-LEASED 78% THE WELL* Q3 2022 - Q4 2023 763,000 $40.4M 98% ADELAIDE & DUNCAN* Q2 2023 230,000 $10.3M 100% BREITHAUPT, PHASE III* Q2 2023 147,000 $5.4M 100% QRC WEST, PHASE
Slide 43: Future/Shadow Development Pipeline
FUTURE/SHAD OW DEVELOPMEN T PIPELINE Zoning Approval in To Be Rezoned Place and in Progress ESTIMATED ESTIMATED Toronto GLA GLA THE CASTLE 440,000 TORONTO 5,870,307 KING & PETER 790,000 MONTRÉAL 1,999,544 KING & SPADINA 430,000 CALGARY 1,435,951 UNION CENTRE 1,330,000 VANCOUVER 371,046 BATHURST STRE
Slide 44: The Lougheed, Calgary
The Lougheed Calgary 44
Slide 45: Boardwalk-Revillon Building, Edmonton
Boardwalk-Revillon Building Edmonton 45
Slide 46: 400 Atlantic, Montréal
Sea i | ry | 400 Atlantic Montréal 46
Slide 47: Breithaupt III, Kitchener
Breithaupt III Kitchener 47
Slide 48: The Well, Toronto
The Well Toronto 48
Slide 49: Adelaide & Duncan, Toronto
: Adelaide & Duncan Toronto 49
Slide 50: QRC West Phase II, Toronto
7 Vy g/ i, ORC West Phase II Toronto 50
Slide 51: KING Toronto
KING Toronto Toronto 51
Slide 52: King & Brant, Toronto
King & Brant Toronto 52
Slide 53: 400 West Georgia, Vancouver
400 West Georgia Vancouver 53
Slide 54: Development Completions
ALLIED Development Completions
Slide 55: 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 56: 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 57: 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 58: 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 59: 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 60: 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 61: Risk Management
ALLIED Risk Management
Slide 62: Development Risk Management
DEVELOPMENT – 15% limitation on development – Pre-leasing – Partial monetization – Financial management – Collaboration 62
Slide 63: Balance Sheet
BALANCE SHEET – Low leverage – Long-term, fixed-rate debt – Net debt as a multiple of adjusted EBITDA ratio of 9.6x – Total indebtedness ratio 33.9% – Interest coverage ratio of 3.2x The above ratios are non-IFRS measures defined in the Appendix on page 75 calculated as at June 30, 2022, Interest co
Slide 64: Financial Covenants
FINANCIAL COVENANTS SENIOR UNSECURED DEBENTURES COVENANT THRESHOLD JUNE 30, 2022 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 65% 3
Slide 65: Debt Maturity Chart
DEBT MATURITY CHART MORTGAGES PROMISSORY NOTE UNSECURED TERM LOAN UNSECURED DEBENTURES CONSOLIDATED W/A INT RATE Debt Maturity Mortgage P romis s ory Note Uns ecured Debentures Uns ecured T erm Loan C ons olidated WA Int R ate $ 70 0 .0 5.0 0 % 4.41% 4.50 % 4.32% $ 60 0 $ 60 0 .0 $ 40 0 4.0 0 % 3.69
Slide 66: Unencumbered Investment Properties
UNENCUMBERED INVESTMENT PROPERTIES UNENCUMBERED INVESTMENT PROPERTIES(1) % OF INVESTMENT PROPERTIES UNENCUMBERED(1) $ 10 10 0 % 9 4% 8 7% $ 9 .4 $9 90 % $ 9 .1 $8 80 % 73% 72% 68% $7 70 % $ 6 .5 $6 60 % BILLIONS 52% $ 5.5 $5 47% 50 % 39 % $4 $ 4.3 40 % $3 30 % $ 2.9 21% $2 $ 2.3 20 % 12% $ 1.6 $1 10
Slide 67: Maximizing Flexibility While Strengthening the Balance Sheet
MAXIMIZING FLEXIBILTY WHILE STRENGTHENING THE BALANCE SHEET UNENCUMBERED INVESTMENT PROPERTIES TOTAL INVESTMENT PROPERTIES(2) UNSECURED DEBT AS % OF TOTAL DEBT 10 0 % 9 3% CREDIT RATINGS $ 12.0 88% 8 7% 90 % Investment grade since $ 10 .8 2014 $ 10 .6 80 % $ 10 .0 72% $ 9 .7 $ 9 .3 $ 9 .4 70 % 6 5%
Slide 68: Environmental, Social & Governance (ESG)
Environmental, Social & Governance (ESG) 68
Slide 69: 2021 Performance
2021 PERFORMANCE Improved GRESB Score by 16 Points 15.4% 12.4% ENERGY USE INTENSITY (EUI) GREENHOUSE GAS INTENSITY (GHGI) We expanded our GRESB submission to include an evaluation of our development activities. We scored 80/100 for our standing investments, a 16-point reduction from our 2019 baselin
Slide 70: 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 71: Massey Hall, Toronto
Massey Hall Toronto 71
Slide 72: Appendix Definitions
ALLIED Appendix Definitions
Slide 73: 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 74: Unencumbered Investment Properties and Adjusted EBITDA
UNENCUMBERED INVESTMENT PROPERTIES Unencumbered investment properties is a non-IFRS measure defined as the value of investment properties which are free and clear of any encumbrances. This is calculated on a proportionate share basis. Management believes unencumbered investment properties is a usefu
Slide 75: Total Indebtedness Ratio, Interest Coverage Ratio, Total Return
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 outstanding letters of credit divided by total assets. Management considers this metric useful as it indicates Allied’s ability to meet its debt obliga
Slide 76: 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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