Allied Properties Real Estate Investment Trust · TSX:AP.UN

Allied Properties Real Estate Investment Trust — Investor Presentation (February 2020)

68 slides from Allied Properties Real Estate Investment Trust's investor presentation, February 2020

  1. Slide 1: Creativity & Connectivity

    CREATIVITY & CONNECTIVITY February 2020

  2. 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

  3. Slide 3: Table of Contents

    TABLE OF CONTENTS Investment Highlights . . . . . . . . . . . . . . . . . . . . . . 4 Strategy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 Rental Portfolio . . . . . . . . . . . . . . . . . . . . . . . . . . 21 Development Portfolio . . . . . . . . . . . . . . . . . . . . 3

  4. 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 – 29% compound annual growth rate on total assets – 17.2% average annual total return 4

  5. Slide 5: Portfolio Growth - Total Assets

    PORTFOLIO GROWTH - TOTAL ASSETS (M) 120M IPO 8.5B JANUARY 2020 28.8% 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

  6. Slide 6: Returns to Unitholders

    RETURNS TO UNITHOLDERS TOTAL RETURN INDEX 17.2% AVERAGE ANNUAL TOTAL RETURN Source: Bloomberg as of February 5, 2020 6

  7. Slide 7: Strategy

    ALLIED Strategy

  8. Slide 8: Consolidation of Urban Office Properties

    CONSOLIDATION OF URBAN OFFICE PROPERTIES – Close to core – Distinctive – Lower occupancy costs 8

  9. Slide 9: 500-522 King West

    a ‘ge tia ‘(=n ee Sh aes bo wil iui OT UTES

  10. Slide 10: Le Nordelec, Montréal

    Le Nordelec Montréal 10

  11. Slide 11: 35-39 Front Street East, Toronto

    35-39 Front Street East Toronto 11

  12. Slide 12: 12

    12

  13. Slide 13: 13

    13

  14. Slide 14: 14

    14

  15. Slide 15: 15

    15

  16. Slide 16: Intensification of Urban Office Properties

    INTENSIFICATION OF URBAN OFFICE PROPERTIES – Underutilized land – Additional rentable area with low land cost – Value creation 16

  17. Slide 17: Intensification of QRC West

    Intensification of QRC West Toronto 17

  18. Slide 18: Intensification of QRC West

    Intensification of QRC West Toronto 18

  19. Slide 19: Intensification of The Breithaupt Block

    Intensification of The Breithaupt Block Kitchener 19

  20. Slide 20: King Portland Centre

    King Portland Centre Toronto 20

  21. Slide 21: Rental Portfolio

    ALLIED Rental Portfolio

  22. Slide 22: Rental Portfolio Properties

    RENTAL PORTFOLIO 196 PROPERTIES 13.6M SQUARE FEET VANCOUVER EDMONTON 467,642 SF 297,851 SF MONTRÉAL 6,286,304 SF TORONTO 4,743,785 SF Including Urban Data Centres CALGARY 509,410 SF 1,045,023 SF OTTAWA 231,468 SF KITCHENER 562,902 SF As of January 31, 2020. 22

  23. Slide 23: Montréal Portfolio

    MONTRÉAL PORTFOLIO Mile-Ex BE RN AR ST D . AV LA E. PA UR RK EN AV TB N E. LV ST D. .U RB ST AI DE . N ST NI . ST S HE . NR RU LA IJ UR U E IER LIE SA AV N I E. NT ST BO E AV SA - U .A IN E RÉ LE T- CO . MB VA AN ST M U TO RD I RO RC JA IN AT VI CQ E Mile End ISE E LL ST LL W Central UE E- .W AT E S

  24. Slide 24: Toronto Portfolio

    TORONTO PORTFOLIO COLLEGE ST. REIT JOINT VENTURE N DUFFERIN ST. ANCILLARY PARKING DUNDAS ST. W. BAY ST. UNIVERSITY AVE. SPADINA AVE. CHURCH ST. SHERBOURNE ST. PARLIAMENT ST. JARVIS ST. QUEEN ST. W. RICHMOND ST. W. RICHMOND ST. E. STRACHAN AVE. YONGE ST. ADELAIDE ST. W. Queen Richmond BATHURST ST. KI

  25. Slide 25: Calgary Portfolio

    CALGARY PORTFOLIO CENTRE ST. S 4 AVE SW 5 AVE SW 6 AVE SW Central Business 7 AVE SW 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 Inglewood 12 Beltline 9A 17 AVE. SW VE .S E

  26. 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

  27. 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 $19,473 $403,650 5.00% Desjardins, Morgan Stanley, SAP Canada 700 DE LA GAUCHETIÈRE, MONTRÉAL 16,957 322,500 —% AON Canada Inc, Hydro-Québec, National Bank of C

  28. 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 $32,636 $533,550 5.25% Bell, Cologix, Equinix, Rogers, Telus, TorIX, Zayo 250 FRONT W, TORONTO 14,067 311,130 6.00% AWS, Cloud Service Provider 905 KING W, TORONTO 4,6

  29. Slide 29: Connectivity

    CONNECTIVITY Source: PeeringDB.com 29

  30. Slide 30: Internet Traffic on TorIX

    INTERNET TRAFFIC ON TORIX Source: TorIX Website 30

  31. Slide 31: NOI by Segment, NOI by Use

    NOI BY SEGMENT NOI BY USE 17.2% 17.2% URBAN DATA CENTRES URBAN DATA CENTRES 7.4% RETAIL 11.6% CALGARY, EDMONTON AND 4.9% VANCOUVER PARKING 44.9% TORONTO AND 26.3% MONTRÉAL 70.5% KITCHENER AND OTTAWA OFFICE For the period ending December 31, 2019. See definition appendix for definition of NOI. 31

  32. Slide 32: Lease Maturities - Urban Workspace

    LEASE MATURITIES - URBAN WORKSPACE As of December 31, 2019. This slide contains forward looking information. 32

  33. Slide 33: Lease Maturities - Montréal and Ottawa

    LEASE MATURITIES - URBAN WORKSPACE MONTRÉAL AND OTTAWA As of December 31, 2019. This slide contains forward looking information. 33

  34. Slide 34: Lease Maturities - Toronto and Kitchener

    LEASE MATURITIES - URBAN WORKSPACE TORONTO AND KITCHENER As of December 31, 2019. This slide contains forward looking information. 34

  35. Slide 35: Lease Maturities - Calgary, Edmonton and Vancouver

    LEASE MATURITIES - URBAN WORKSPACE CALGARY, EDMONTON AND VANCOUVER As of December 31, 2019. This slide contains forward looking information. 35

  36. Slide 36: Lease Maturities - Urban Data Centres

    LEASE MATURITIES - URBAN DATA CENTRES As of December 31, 2019. This slide contains forward looking information. 36

  37. Slide 37: Top-Ten Users Q4 2019

    TOP-TEN USERS USER SECTOR % RENTAL REVENUE (Q4 2019) 49% CLOUD SERVICE PROVIDER Data Centre/IT 5.1% UBISOFT Gaming/IT 2.8% COLOGIX Data Centre/IT 2.7% 2003 EQUINIX Data Centre/IT 2.4% 22.2% NATIONAL CAPITAL COMMISSION, A CANADIAN CROWN CORPORATION Government 1.8% SHOPIFY INC. Commerce/IT 1.7% Q4 201

  38. Slide 38: Development Portfolio

    ALLIED Development Portfolio

  39. Slide 39: Active Development Pipeline

    ACTIVE DEVELOPMENT PIPELINE % OF OFFICE % OF OFFICE DEVELOPMENT DEVELOPMENT 2020 ESTIMATED PRE-LEASED 2022 ESTIMATED PRE-LEASED GLA NOI GLA NOI 425 VIGER 317,500 $6.8M 95% THE WELL* 763,000 $40.4M 84% TELUS SKY* 218,000 $8.0M 64% KING & BRANT 130,000 TBD — 535,500 $14.8M QRC WEST, PHASE II 90,000 TB

  40. Slide 40: Future/Shadow Development Pipeline

    FUTURE/SHADOW DEVELOPMENT PIPELINE Zoning Approval in Place To Be Rezoned ESTIMATED ESTIMATED Toronto GLA GLA UNION CENTRE 1,129,000 TORONTO 3,195,000 KING & PETER 790,000 MONTRÉAL 1,338,000 ADELAIDE & SPADINA 230,000 CALGARY 1,148,000 2,149,000 OTHER 621,000 6,302,000 ESTIMATED Montréal GLA LE NORD

  41. Slide 41: 425 Viger, Montréal

    425 Viger Montréal 41

  42. Slide 42: TELUS Sky, Calgary

    TELUS Sky Calgary 42

  43. Slide 43: Adelaide & Duncan, Toronto

    Adelaide & Duncan Toronto 43

  44. Slide 44: Breithaupt III, Kitchener

    Breithaupt III Kitchener 44

  45. Slide 45: 400 West Georgia, Vancouver

    400 West Georgia Vancouver 45

  46. Slide 46: The Well

    on i a a I JU ay TT Mm wit ities Hi pustiths

  47. Slide 47: King & Brant, Toronto

    King & Brant Toronto 47

  48. Slide 48: KING Toronto

    ar aN a! Te ast © "% mil ‘me Toronto

  49. Slide 49: 720 Beatty, Vancouver

    720 Beatty Vancouver 49

  50. Slide 50: Development Completions

    ALLIED Development Completions

  51. Slide 51: 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

  52. Slide 52: 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

  53. Slide 53: 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

  54. Slide 54: 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

  55. Slide 55: 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

  56. Slide 56: Risk Management

    ALLIED Risk Management

  57. Slide 57: Development

    DEVELOPMENT – 15% limitation on development – Pre-leasing – Partial monetization – Financial management – Collaboration 57

  58. Slide 58: Balance Sheet

    BALANCE SHEET – Low leverage – Long-term, fixed-rate debt – Net debt to EBITDA ratio of 6.3x – Debt ratio 26.1% – Interest coverage ratio of 3.3x Debt in “debt ratio” refers to total debt. See definition appendix for definition of total debt and EBITDA. 58

  59. Slide 59: Financial Covenants

    FINANCIAL COVENANTS SENIOR UNSECURED DEBENTURES COVENANT THRESHOLD DECEMBER 31, 2019 PRO FORMA INTEREST COVERAGE RATIO Maintain a 12-month rolling consolidated 3.1x pro forma EBITDA of at least 1.65 times pro forma interest expense PRO FORMA ASSET COVERAGE TEST Maintain net consolidated debt below 2

  60. Slide 60: Debt Maturity Chart

    (in thousands) DEBT MATURITY CHART This chart summarizes the principal payments in regards to Allied's debt obligations as at December 31, 2019. 60

  61. Slide 61: Unencumbered Assets

    UNENCUMBERED ASSETS As of January 31, 2020. 61

  62. Slide 62: Corporate Social Responsibility

    Corporate Social Responsibility

  63. Slide 63: Corporate Social Responsibility

    CORPORATE SOCIAL RESPONSIBILITY “The cities we build have to be sustainable and conducive to human wellness, diversity and creativity. Put differently, they have to elevate and inspire the humanity in all of us.” - MICHAEL EMORY 2020 CSR Report + GRESB Reporting + Aligning with ESG Indices 63

  64. Slide 64: Corporate Social Responsibility

    CORPORATE SOCIAL RESPONSIBILITY 64

  65. Slide 65: Appendix Definitions

    ALLIED Appendix Definitions

  66. Slide 66: 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

  67. Slide 67: Total Debt, 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

  68. Slide 68: 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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