creativity & connectivity june 2019 · this presentation may contain “forward looking”...

CREATIVITY & CONNECTIVITY June 2019

2

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 Uncertainties” in our most recently

filed AIF. Material assumptions that underpin any forward-looking

statements we make include those described under “Forward

Looking Disclaimer” in our MD&A for the first quarter of 2019.

TABLE OF CONTENTS

Investment Highlights . . . . . . . . . . . . . . . . . . . . 4

Strategy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7

Rental Portfolio . . . . . . . . . . . . . . . . . . . . . . . . .22

Development Portfolio . . . . . . . . . . . . . . . . . . .38

Development Completions . . . . . . . . . . . . . . .48

Risk Management . . . . . . . . . . . . . . . . . . . . . . .53

Corporate Social Responsibility . . . . . . . . . . .58

Appendix Definitions . . . . . . . . . . . . . . . . . . . . 61

4

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% average annual total return

5

PORTFOLIO GROWTH - TOTAL ASSETS (M)

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 (IFRS). As at period ending March 31, 2019.

28.9%CAGR

120M

6.9B

IPO

Q1 2019

6

Source: Bloomberg as of May 1, 2019

RETURNS TO UNITHOLDERSTOTAL RETURN INDEX

17%AVERAGE ANNUAL TOTAL RETURN

Strategy

8

CONSOLIDATION OF URBAN OFFICE PROPERTIES

– Close to core

– Distinctive

– Lower occupancy costs

9

500-522 King West Toronto

10

Le Nordelec Montréal

11

The Chambers Ottawa

12

35-39 Front Street East Toronto

17

INTENSIFICATION OF URBAN OFFICE PROPERTIES

– Underutilized land

– Additional rentable area with low land cost

– Value creation

18

Intensification of QRC WestToronto

19

Intensification of QRC WestToronto

20

Intensification of The Breithaupt Block Kitchener

21

King Portland CentreToronto

Rental Portfolio

23

179

11.4M

As of March 31, 2019.

PROPERTIES

SQUARE FEET

RENTAL PORTFOLIO

24

SP

AD

INA

AV

E.

QUEEN ST. W.

KING ST. W.

WELLINGTON ST. W.

FRONT ST. W.

RICHMOND ST. W.

ADELAIDE ST. W.

DUNDAS ST. W.

COLLEGE ST.

UN

IVE

RS

ITY

AV

E.

BA

Y S

T.

CH

UR

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ST

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JAR

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ST

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SH

ER

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ST

.

RICHMOND ST. E.

PA

RLI

AM

EN

T S

T.

GARDINER EXPRESSWAY

LAKESHORE BLVD W.

QUEEN’S QUAY WEST

KING ST. E.

ANCILLARY PARKING

REIT

YO

NG

E S

T.

JOINT VENTURE

BA

TH

UR

ST

ST

.

N

QueenRichmond

St.LawrenceMarket

CentralBusinessDistrict Entertainment

District King & Spadina

King West

TORONTO PORTFOLIO

25

1 . 141 Bathurst

2 . 159-161 Bathurst

3 . 183 Bathurst

4 . 241 Spadina

5 . 379 Adelaide W

6 . 383 Adelaide W

7 . 387 Adelaide W

8 . 420 Wellington W

9 . 425 Adelaide W

10 . 425-439 King W

11 . 441-443 King W

12 . 445-455 King W

13 . 460 King W

14 . 461 King W

15 . 468 King W

16 . 469 King W

17 . 478 King W

18 . 485 King W

19 . 500 King W

20 . 522 King W

21 . 544 King W

22 . 552-560 King W

23 . 555 Richmond W

24 . 579 Richmond W

25 . 589-591 Richmond W

26 . 662 King W

27 . 668 King W

28 . 80-82 Spadina

29 . 96 Spadina

30 . King Portland Centre

- 602-606 King W

- 642 King W

- 499 Adelaide W

- 501-505 Adelaide W

31 . The Well

32 . KING Toronto

KING & SPADINA

Toronto

24

8

3

1

2 25

26

1713

2119

3232

32 32 1822

675

29

28

10

9

15

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31

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AVE. VAN HORNE

RUE JEAN-TALON O.

RUE RACHEL E

AUTOROUTE VILLE-MARIEBOUL. RENÉ-LÉVESQUE E.

AVE. ST-JOSEPH E.

RUE BEAUBIEN E.

RUE SHERBROOKE

RU

E P

EE

L

AVE. DES PINSR

UE

UN

IVE

RS

ITY

AVE. ATW

ATER

RUE ST.PATRICKRUE CENTRE

RUE WELLINGTON

PONT VICTORIA

Central Business District

Mile End

Gri ntown

Old Montréal

9

8

4

5

18

14 12

15

13

2

1

7

3

10

611

17

N

16

MONTRÉAL PORTFOLIO

1 . 3510 Saint-Laurent


3 . 400 Atlantic


5 . 451-481 Saint-Catherine


7 . 5445 de Gaspé

8 . 5455 de Gaspé


10 . 6300 Parc

11 . 645 Wellington

12 . 740 Saint-Maurice

13 . 8 Place du Commerce

14 . 85 Saint-Paul

15 . Cité Multimédia

- 111 Duke

- 50 Queen

- 700 Wellington

- 75 Queen

- 80 Queen

- 87 Prince

16 . El Pro Lofts - 644

Courcelle

17 . Le Nordelec

- 1301-1303 Montmo-

rency

- 1655 Richardson

- 1751 Richardson

- 1700 Saint-Patrick

18 . 425 Viger

27

CITÉ MULTIMÉDIA, MONTRÉAL $21,115 $380,400 5.21% Desjardins, Morgan Stanley, SAP Canada

QRC WEST, TORONTO 12,047 261,950 4.25% eOne, Sapient Canada

LE NORDELEC, MONTRÉAL 11,216 225,700 5.76% Gsoft, Yellow Pages Media, Unity Technologies

5455 DE GASPÉ, MONTRÉAL 8,199 132,060 5.50% Attraction Media, Framestore, Ubisoft

555 RICHMOND W, TORONTO 7,493 144,680 4.75% Good Life, Sentinelle, Synaptive

THE CHAMBERS, OTTAWA 6,168 139,290 — National Capital Commission

VINTAGE I & II, CALGARY 5,801 75,480 5.75% Royal & Sun Alliance

THE TANNERY, KITCHENER 5,250 96,330 5.48% Communitech Corp., Desire 2 Learn

5445 DE GASPÉ, MONTRÉAL 5,157 93,120 5.75% Sun Life, Ubisoft

QRC EAST, TORONTO 4,669 109,770 4.50% Publicis, Veritprop Limited, St. Joseph Media Inc.

TOTAL $87,145 $1,658,780 5.14%

URBAN WORKSPACE TOP-TEN PROPERTIES

NORMALIZED LQA NOI

APPRAISED FAIR VALUE CAP RATE PRINCIPAL USERSPROPERTY NAME

28

NETWORK-DENSE URBAN DATA CENTRES

NORMALIZED LQA NOI

APPRAISED FAIR VALUE CAP RATE PRINCIPAL USERSPROPERTY NAME

151 FRONT W, TORONTO $32,810 $504,820 5.50% Bell, Telus, Rogers, Zayo, TorIX, Equinix, Cologix

250 FRONT W, TORONTO 13,640 304,360 6.25% Cloud Service Provider, AWS

905 KING W, TORONTO 4,321 90,090 6.25% Cloud Service Provider, Beanfield, Cologix

TOTAL $50,771 $899,270 5.83%

29

CONNECTIVITY

Source: PeeringDB.com

30

INTERNET TRAFFIC ON TORIX

Source: TorIX Website

31

NOI BY SEGMENT

For the period ending March 31, 2019.See definition appendix for definition of NOI.

18.7%URBAN DATA CENTRES

12.0%CALGARY, EDMONTON AND VANCOUVER

18.7%URBAN DATA CENTRES

7.2%RETAIL

5.0%PARKING

69.1%OFFICE

24.0%MONTRÉAL AND OTTAWA

NOI BY USE

45.3%TORONTO AND KITCHENER

32

LEASE MATURITIES

As of March 31, 2019.This slide contains forward looking information.

33

LEASE MATURITIES - MONTRÉAL AND OTTAWA


34


LEASE MATURITIES - TORONTO AND KITCHENER

35


LEASE MATURITIES - CALGARY, EDMONTON AND VANCOUVER

36


LEASE MATURITIES - URBAN DATA CENTRES

37

49%

20.6%2003

Q1 2019

TOP-TEN USERS

USER % RENTAL REVENUE (Q1 2019)SECTOR

CLOUD SERVICE PROVIDER Data Centre/IT 3.6%

COLOGIX Data Centre/IT 2.9%

UBISOFT Gaming/IT 2.9%

EQUINIX Data Centre/IT 2.4%

NATIONAL CAPITAL COMMISSION, A CANADIAN CROWN CORPORATION Government 1.9%

SHOPIFY INC. Commerce/IT 1.8%

MORGAN STANLEY Financial 1.5%

ENTERTAINMENT ONE Media/Entertainment 1.3%

BELL CANADA Telecommunications 1.2%

IBM CANADA Data Centre/IT 1.1%

20.6%

Development Portfolio

39

DEVELOPMENT PIPELINE

*Co-ownership

** Allied is currently providing financing on this Westbank development. Subject to placement of permanent financing, Allied intends to acquire a 50% undivided interest based on total development cost.

Estimated NOI is based on stabilized occupancy.

2021

COLLEGE & MANNING* 27,000 $1.1M

ADELAIDE & DUNCAN* 216,000 $9.9M

BREITHAUPT, PHASE III* 147,000 $5.4M

400 WEST GEORGIA** 177,000 $9.0M

THE LOUGHEED 88,000 TBD

655,000 $25.4M+

UnscheduledUNION CENTRE 1,129,000

KING & PETER 790,000

LE NORDELEC 230,000

ADELAIDE & SPADINA 245,000

2,394,000

2022 2023

THE WELL* 746,000 $ 4 0. 1 M

KING & BRANT 130,000 T B D

QRC WEST, PHASE II 90,000 TBD

KING TORONTO* 100,000 $ 5 . 5 M

966,000 $40.1M+

GLA

GLA GLA

ESTIMATED

ESTIMATED ESTIMATED

NOI

NOI NOI2020

GLA

ESTIMATED

NOI

425 VIGER 315,000 $6.5M

TELUS SKY* 218,000 $8.0M

533,000 $14.5M

GLA

ESTIMATED

40

425 VigerMontréal

41

TELUS SkyCalgary

42

Adelaide & Duncan Toronto

43

Breithaupt IIIKitchener

44

400 West GeorgiaVancouver

45

The WellToronto

46

King & BrantToronto

47

KING TorontoToronto

Development Completions

49

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 leased.

The fair value is provided by our external appraiser, which is calculated based on the discounted cash flow model.

DEVELOPMENT ECONOMICS INVESTMENT

STABILIZED NOI

UNLEVERED YIELD ON COST FAIR VALUE

VALUE CREATION

VALUE CREATION AS %

OF COST

LAND COSTS $11,000

HARD & SOFT COSTS 104,000

CAPITALIZED INTEREST &

OPERATING COSTS 15,000

TOTAL DEVELOPMENT COSTS $130,000 $12,047 9.3% $261,950 $131,950 101.5%

50

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 Corporation. It is comprised of 226,398 square feet of

GLA (Allied's share 113,199 square feet) and is fully leased.



STABILIZED NOI


VALUE CREATION

VALUE CREATION AS %

OF COST

LAND COSTS $4,000





51

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.



STABILIZED NOI


VALUE CREATION

VALUE CREATION AS %

OF COST

LAND COSTS $8,700





52

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 26,462 square feet of GLA and is fully leased.



STABILIZED NOI


VALUE CREATION

VALUE CREATION AS %

OF COST

LAND COSTS $230



OPERATING COSTS 240

TOTAL DEVELOPMENT COSTS $11,360 $720 6.3% $13,240 $1,880 16.5%

Risk Management

54

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

DEVELOPMENT

55

BALANCE SHEET

– Low leverage– Long-term, fixed-rate debt– Net debt to EBITDA ratio of 6.2x– Debt ratio 27.0%– Interest coverage ratio of 3.3x

Debt in “debt ratio” refers to total debt. See definition appendix for definition of total debt and EBITDA.

56

DEBT MATURITY CHART

This chart summarizes the principal payments in regards to Allied's various obligations as at March 31, 2019.

57

UNENCUMBERED ASSETS

Corporate Social Responsibility

59

CORPORATE SOCIAL RESPONSIBILITY

CURRENT Sustainability + Occupant Engagement Program

Benchmarking of Portfolio-wideEnergy & Water Usage

CSR Report + GRESB Reporting +Aligning with ESG Indices

Waste to be added in 2019

2018 2020

“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

60

CORPORATE SOCIAL RESPONSIBILITY

Appendix Definitions

62

CERTAIN DEFINITIONS AND NON-IFRS MEASURESCertain 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 activities or any other measure prescribed under IFRS. EBITDA does not have

any standardized meaning prescribed by IFRS. As computed by us, EBITDA may differ from similar computations reported by

other Canadian real estate investment trusts and, accordingly, may not be comparable to similar computations reported by such

organizations. Management considers EBITDA to be a useful measure for the purpose of evaluating debt levels and interest coverage.

For a full explanation of EBITDA and a reconciliation to IFRS please see Allied REIT Q1 2019 MD&A “Other Financial Performance

Measures”.

“INTEREST”

Interest is defined as interest expense and other financing costs including capitalized interest.

“NOI”

NOI 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 activities or any other measure prescribed under IFRS. NOI does not have any standardized meaning

prescribed by IFRS. As computed by us, NOI may differ from similar computations reported by other Canadian real estate investment

trusts and, accordingly, may not be comparable to similar computations reported by such organizations. Management considers NOI to

be a useful measure of performance for rental properties. For a full explanation of NOI and a reconciliation to IFRS please see Allied REIT

Q1 2019 MD&A “Net Operating Income (“NOI”).

63

“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 computations Reported by such organizations. Management considers total debt to be a useful measure for

evaluating debt levels and interest coverage. For a full explanation of total debt and an illustration of the calculation of total debt,

please see Allied REIT Q1 2019 MD&A “debt”.

“TOTAL RETURN”

Total return is based on $100 in units invested on February 6th, 2003 and ending on May 1, 2019, assuming the re-investment of all cash

distributions of the trust on the day of the distribution.

ALLIED PROPERTIES REIT134 PETER STREET, SUITE 1700 TORONTO, ONTARIO M5V 2H2 T 416.977.9002 F 416.306.8704 alliedreit.com

creativity & connectivity june 2019 · this presentation may contain “forward looking”...

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