International Capital Markets: REITs - Allied, Canada

International Capital Markets: REITs Allied Properties - Canada ​(TSX: AP.UN)

Nick Kunz

David Kruth, CFA International Capital Markets: REITs Columbia GSAPP MSRED

Mar 11, 2019

TSX: AP.UN / CAN S&P TSX / US S&P 500 - Market Performance Comparison

The analysis conducted here examines one company; Allied Properties (TSX: AP.UN). This analysis is made in an effort to provide additional insight into the decision making process for International REIT investing. All amounts denominated in local currency (C$, Canadian Dollar).

Allied Properties (TSX: AP.UN)

Allied Properties (TSX: AP.UN) is a publicly traded Canadian REIT on the Toronto Stock Exchange. The company is an owner and operator of best in class real estate assets in high growth urban population centers in Canada.

Allied IPO’d in the fall of 2002 and owns roughly $6.7B of real estate across 7 cities in Canada. The company owns and operates 151 properties. The geographic concentration of their assets are in Toronto, Montreal, Kitchener, Ottawa, Vancouver, Calgary, and Edmonton. Allied’s portfolio contains roughly 40% of their assets located in Toronto and 37% in Montreal. The company has a strong tenant base in high demand and dense urban centers. Allied has an experienced management team and is headquartered in Toronto.

Advantages: ● Urban market strategy in high growth population centers across Canada ● Unique and difficult or impossible to duplicate portfolio ● Best in class real estate with high quality tenants

Disadvantages: ● High geographic concentration in Toronto and Montreal, combined nearly 80% of portfolio ● High concentration in office sector, roughly 70% of portfolio ● Trades at a premium to anticipated NAV

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TSX: AP.UN - Earnings Analysis - 19E / 20E

Exhibited here is the anticipated NOI and FFO/S for Allied Properties in 2019 at years end based on Q4 2018 reports. All amounts denominated in local currency (C$, Canadian Dollar).

TSX: AP.UN - Valuation Analysis 19E

Exhibited here is the anticipated current valuation of Allied Properties based on Q4 2018 reports. All amounts denominated in local currency (C$, Canadian Dollar).

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TSX: AP.UN - Debt Analysis - 19E / 20E

Exhibited here is the anticipated debt for Allied Properties in 2019 at years end based on Q4 2018 reports. All amounts denominated in local currency (C$, Canadian Dollar).

TSX: AP.UN - Implied Cap Rate Analysis - 19E

Exhibited here is the implied cap rate and enterprise valuation for Allied Properties in 2019 based on Q4 2018 reports. All amounts denominated in local currency (C$, Canadian Dollar).

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