CREATIVITY & CONNECTIVITY. November 2018

Transcription

1 CREATIVITY & CONNECTIVITY November 2018

2 This presentation may contain forward looking information about future events or the REITs 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 third quarter of

3 TABLE OF CONTENTS Investment Highlights... 4 Strategy...7 Rental Portfolio...21 Development Portfolio Development Completions Risk Management Corporate Social Responsibility Appendix

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 16.5% Average annual total return

5 PORTFOLIO GROWTH - TOTAL ASSETS (M) 120M IPO 6.4B Q % 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 (IFRS). As at period ending September 30, 2018.

6 RETURNS TO UNITHOLDERS TOTAL RETURN INDEX 16.5% AVERAGE ANNUAL TOTAL RETURN Source: Bloomberg as of November 5, 2018.

7 Strategy

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

9 King West Toronto 9

10 Nordelec Montréal

11 The Chambers Ottawa 11

12 35-39 Front Street East Toronto

13 13

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15 15

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17 INTENSIFICATION OF URBAN OFFICE PROPERTIES Underutilized land Additional rental area with low land cost High returns

18 Intensification of QRC West Toronto 18

19 Intensification of QRC West Toronto

20 Intensification of The Breithaupt Block Kitchener 20

21 Rental Portfolio

22 RENTAL PORTFOLIO 148 PROPERTIES 11.0M SQUARE-FEET As of September 30, 2018.

23 TORONTO PORTFOLIO COLLEGE ST. DUFFERIN ST. REIT JOINT VENTURE ANCILLARY PARKING YONGE ST. STRACHAN AVE. RICHMOND ST. W. BATHURST ST. ADELAIDE ST. W. King West KING ST. W. WELLINGTON ST. W. FRONT ST. W. King & Spadina Entertainment District GARDINER EXPRESSWAY LAKESHORE BLVD W. QUEEN S QUAY WEST Central Business District RICHMOND ST. E. Queen Richmond KING ST. E. St.Lawrence Market PARLIAMENT ST. SHERBOURNE ST. JARVIS ST. BAY ST. CHURCH ST. QUEEN ST. W. UNIVERSITY AVE. SPADINA AVE. DUNDAS ST. W. N

24 4 N KING & SPADINA Toronto Bathurst King W Bathurst King W Bathurst King W Spadina Richmond W Adelaide W Adelaide W Richmond W Richmond W Wellington W King W Adelaide W King W King W King W King W King W King W King W King W King W King W Spadina Spadina 30. The Well 31. King Portland Centre Adelaide King Street W King King W King W King W

25 AN-TA LON O. AVE. CHRISTOPHE-COLOMB 1 2 AVE. VAN HORNE AVE. DU PARC AVE. DE LORIMIER RUE JE 3 N RUE BEAUBIEN E. MONTRÉAL PORTFOLIO Ave. Atlantic Ave. Du Parc 5 Mile End Boul. St-Laurent AVE. ST-JOSEPH E Ave. De Gaspé Ave. De Gaspé ORO UTE VILL E-MA RIE AT ER AUT BOUL. RENÉ-LÉVESQUE E. W AT E. AV CEN ST.P ATR TRE W RUE ELL RUE D IBERVILLE Boul. St-Laurent Boul. St-Laurent Saint-Paul Rue W Rue St-Maurice 14. Cité Multimédia ICK 16 ING Boul. St-Laurent Ave. Viger W RUE Boul St-Laurent Rue Ste-Catherine Old Montréal Griffintown RUE 7 AVE. PAPNIEAU BOUL. ST-LAURENT BROOKE 8 RUE PEEL RUE SHER PINS RUE UNIVERSITY AVE. DES RUE ST-DENIS RUE RACHEL E Central Business District Rue Wellington TON 16. Le Nordelec Place Du Commerce PO 17 NT VI CT OR IA

26 URBAN WORKSPACE TOP-TEN PROPERTIES PROPERTY NAME NORMALIZED LQA NOI APPRAISED FAIR VALUE CAP RATE PRINCIPAL USERS CITÉ MULTIMÉDIA, MONTRÉAL $22,359 $374, % Desjardins, Morgan Stanley, SAP Canada QRC WEST, TORONTO 12, , % eone, Sapient Canada LE NORDELEC, MONTRÉAL 11, , % Babel Games, Gsoft, Yellow Pages Media 5455 DE GASPÉ AVENUE, MONTRÉAL 7, , % Attraction Media, Framestore, Ubisoft 555 RICHMOND WEST, TORONTO 7, , % Good Life, Sentinelle, Synaptive THE CHAMBERS, OTTAWA 6, ,780 National Capital Commission VINTAGE I & II, CALGARY 5,704 81, % Royal & Sun Alliance THE TANNERY, KITCHENER 5,416 87, % Communitech Corp., Desire 2 Learn 5445 DE GASPÉ AVENUE, MONTRÉAL 5,182 80, % Sun Life Assurance Company of Canada, Ubisoft BOARDWALK REVILLON, EDMONTON 5,026 71, % Edmonton Public School Board, Legal Aid TOTAL $89,125 $1,553, %

27 NETWORK DENSE URBAN DATA CENTRES PROPERTY NAME NORMALIZED LQA NOI APPRAISED FAIR VALUE CAP RATE PRINCIPAL USERS 151 FRONT STREET WEST, TORONTO $31,837 $490, % Bell, Telus, Rogers, Zayo, TorIX, Equinix, Cologix 250 FRONT STREET WEST, TORONTO 13, , % Cloud Service Provider, AWS 905 KING STREET WEST, TORONTO 3,619 89, % Cloud Service Provider, Beanfield, Cologix TOTAL $48,797 $872, %

28 CONNECTIVITY 151 Front is the Nation's gateway and defacto carrier-neutral facility for inbound/ outbound traffic 26,500 cross-connects between both MMRs at 151 Front Allied owned fully diverse high-count fibre connecting 151 Front MMRs back to 35 John and 905 King Source: PeeringDB.com 28

29 Source: TorIX Website INTERNET TRAFFIC ON TORIX

30 NOI BY SEGMENT NOI BY USE 18.1% URBAN DATA CENTRES 18.1% URBAN DATA CENTRES 11.6% WESTERN 8.1% RETAIL 4.8% PARKING 45.0% CENTRAL 25.3% EASTERN 69.0% OFFICE For the period ending September 30, See definition appendix for definition of NOI.

31 As of September 30, This slide contains forward looking information. LEASE MATURITIES

32 As of September 30, This slide contains forward looking information. LEASE MATURITIES - EASTERN CANADA

33 As of September 30, This slide contains forward looking information. LEASE MATURITIES - CENTRAL CANADA

34 As of September 30, This slide contains forward looking information. LEASE MATURITIES - WESTERN CANADA

35 As of September 30, This slide contains forward looking information. LEASE MATURITIES - URBAN DATA CENTRES

36 TOP-TEN USERS USER SECTOR % RENTAL REVENUE (Q3 2018) CLOUD SERVICE PROVIDER Data Centre/IT 3.6% UBISOFT Gaming/IT 2.9% EQUINIX Data Centre/IT 2.7% COLOGIX Data Centre/ IT 2.4% NATIONAL CAPITAL COMMISSION, A CANADIAN CROWN CORPORATION Government 1.5% MORGAN STANLEY Financial 1.3% COGECO DATA SERVICES INC. Telecommunications 1.3% ALLSTREAM Telecommunications 1.3% ENTERTAINMENT ONE Media/Entertainment 1.2% 49% % Q BELL CANADA Telecommunications 1.2% 19.4%

37 Development Portfolio

38 DEVELOPMENT PIPELINE Unscheduled GLA ESTIMATED NOI 2019 ESTIMATED GLA NOI TELUS SKY* 218,000 $8.0M KING-PORTLAND CENTRE* 136,320 $4.7M 354,320 $12.7M 2021 ESTIMATED GLA NOI ADELAIDE & DUNCAN* 228,000 $9.9M UNION CENTRE 1,129,000 TBD KING & PETER 790,000 TBD LE NORDELEC 250,000 TBD ADELAIDE & SPADINA 245,000 TBD BREITHAUPT PHASE III* 145,000 TBD QRC WEST, PHASE II 90,000 TBD COLLEGE & MANNING* 30,300 $1.1M 2,679,300 $1.1M GLA ESTIMATED NOI 425 VIGER 300,000 $6.5M THE LOUGHEED 92,600 TBD 392,600 $6.5M+ ESTIMATED GLA NOI ESTIMATED GLA NOI THE WELL* 746,000 $40.1M KING & SPADINA* 115,000 $5.5M KING & BRANT 130,000 TBD 876,000 $40.1M+ *Co-ownership Estimated NOI is based on stabilized occupancy.

39 TELUS Sky Calgary

40 King Portland Centre Toronto 40

41 Adelaide & Duncan Toronto

42 The Well Toronto 42

43 King & Spadina Toronto 43

44 400 West Georgia Vancouver

45 425 Viger Montréal 45

46 King & Brant Toronto 46

47 Development Completions

48 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 It is comprised of 346,643 square feet of GLA and is fully leased. DEVELOPMENT ECONOMICS INVESTMENT LAND COSTS $11,000 HARD & SOFT COSTS 104,000 CAPITALIZED INTEREST & OPERATING COSTS 15,000 STABILIZED NOI UNLEVERED YIELD ON COST FAIR VALUE VALUE CREATION VALUE CREATION AS % OF COST TOTAL DEVELOPMENT COSTS $130,000 $12, % $249,180 $119, % The fair value is provided by our external appraiser, which is calculated based on the discounted cash flow model.

49 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 The property is an equal two-way joint arrangement between Allied and Perimeter Development Corporation. It is comprised of 226,810 square feet of GLA (Allied's share 113,405 square feet) and is fully leased. DEVELOPMENT ECONOMICS INVESTMENT LAND COSTS $4,000 HARD & SOFT COSTS 18,470 CAPITALIZED INTEREST & OPERATING COSTS 2,550 STABILIZED NOI UNLEVERED YIELD ON COST FAIR VALUE VALUE CREATION VALUE CREATION AS % OF COST TOTAL DEVELOPMENT COSTS $25,020 $1, % $44,070 $19, % The fair value is provided by our external appraiser, which is calculated based on the discounted cash flow model.

50 180 JOHN STREET, TORONTO Allied acquired the property in The property was redeveloped and leased in its entirety to Spaces. The project was completed in 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 CAPITALIZED INTEREST & OPERATING COSTS 1,300 STABILIZED NOI UNLEVERED YIELD ON COST FAIR VALUE VALUE CREATION VALUE CREATION AS % OF COST TOTAL DEVELOPMENT COSTS $27,500 $1, % $29,690 $2, % The fair value is provided by our external appraiser, which is calculated based on the discounted cash flow model.

51 189 JOSEPH, KITCHENER 189 Joseph was purchased as part of The Tannery in 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 It is comprised of 26,373 square feet of GLA and is fully leased. DEVELOPMENT ECONOMICS INVESTMENT LAND COSTS $230 HARD & SOFT COSTS 10,890 CAPITALIZED INTEREST & OPERATING COSTS 240 STABILIZED NOI UNLEVERED YIELD ON COST FAIR VALUE VALUE CREATION VALUE CREATION AS % OF COST TOTAL DEVELOPMENT COSTS $11,360 $ % $13,150 $1, % The fair value is provided by our external appraiser, which is calculated based on the discounted cash flow model.

52 Risk Management

53 DEVELOPMENT 15% constitutional limitation on development Pre-leasing requirement Partial monetization Financial management Joint venture relationships

54 BALANCE SHEET Low leverage Long-term, fixed-rate debt Debt ratio 27.6% Interest coverage ratio at 3.1x Debt to EBITDA ratio 6.4x Debt in debt ratio refers to total debt. See definition appendix for definition of total debt and EBITDA.

55 DEBT MATURITY CHART This chart summarizes the principal payments in regards to Allied's various obligations as at September 30, 2018.

56 UNENCUMBERED ASSETS

57 Corporate Social Responsibility

58 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 CURRENT Sustainability + Occupant Engagement Program Benchmarking of Portfolio-wide Energy & Water Usage CSR Report + GRESB Reporting + Aligning with ESG Indices Waste to be added in Materiality Assessment, Sustainability on Website + Investment in ECMs

59 CORPORATE SOCIAL RESPONSIBILITY

60 Appendix Definitions

61 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 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 Q 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 Q MD&A Net Operating Income ( NOI ).

62 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 Q MD&A debt. TOTAL RETURN Total return is based on $100 in units invested on February 6th, 2003 and ending on November 5, 2018, assuming the re-investment of all cash distributions of the trust on the day of the distribution.

63 ALLIED PROPERTIES REIT 134 PETER STREET, SUITE 1700 TORONTO, ONTARIO M5V 2H2 T F alliedreit.com