BMO FIXED INCOME CONFERENCE Presentation... · 2017-03-29 · BMO FIXED INCOME CONFERENCE MARCH 29 2017 . NOTICE TO THE READER THIS PRESENTATION AND ITS CONTENTS ARE CONFIDENTIAL

PURE INDUSTRIAL REAL ESTATE TRUST BMO FIXED INCOME CONFERENCE MARCH 29 2017

NOTICE TO THE READER

THIS PRESENTATION AND ITS CONTENTS ARE CONFIDENTIAL AND ARE NOT FOR PUBLIC DISTRIBUTION

This presentation has been prepared for informational purposes only. By reading this presentation or any other accompanying information relating to Pure Industrial Real Estate Trust (“PIRET”), the reader agrees: (1) to keep strictly confidential the contents of this presentation and such other information and not to disclose such documentation, the contents thereof or any such information to any third party; (2) not to copy all or any portion of this presentation, or any such other information; and (3) to return this presentation and all such other documents and information to PIRET upon the request of PIRET. This presentation is strictly confidential.

This presentation is personal to each recipient and does not constitute an offer to any person or to the public generally to subscribe for or otherwise acquire any of the securities of PIRET. Distribution of this presentation to any person other than the recipient and those persons, if any, retained to advise such recipient with respect thereto is unauthorized, and any disclosure of any of its contents without the prior written consent of PIRET is prohibited. Each recipient, by reading this presentation, agrees to the foregoing.

FORWARD-LOOKING INFORMATION

This presentation includes forward-looking information made as of March 27, 2017 within the meaning of applicable securities laws (also known as forward-looking statements) with respect to PIRET, including without limitation, statements regarding its proposed acquisitions, projected costs, business operations and strategy, and financial performance and condition. These statements generally can be identified by the use of forward-looking words such as “may”, “will”, “expect”, “intend”, “plan”, “estimate”, “anticipate”, “believe”, or “continue”, or the negative thereof, or similar variations. In particular, certain statements in this presentation discuss PIRET’s anticipated future events. These statements include, but are not limited to:

(i) the accretive acquisition of properties and the anticipated extent of the accretion of any acquisitions, which could be impacted by demand for properties and the effect that demand has on acquisition capitalization rates and changes in the cost of capital;

(ii) maintaining/improving occupancy levels and rental revenue, which could be impacted by changes in demand for PIRET’s properties, tenant bankruptcies, the effects of general economic conditions and supply of competitive locations in proximity to PIRET’s locations;

(iii) overall indebtedness levels, which could be impacted by the level of acquisition activity PIRET is able to achieve and future financing opportunities;

(iv) tax exempt status, which can be impacted by regulatory changes enacted by governmental authorities;

(v) anticipated distributions, payout ratios and cash flow, which could be impacted by capital expenditures, results of operations and capital resource allocation decisions;

(vi) anticipated replacement of expiring tenancies, which could be impacted by the effects of general economic conditions and the supply of competitive locations; and

(vi) analyst consensus figures including AFFO and FFO as well as market cap goals as expressed by management.

In addition, any pro forma financial information included in this presentation is forward-looking information.

Forward-looking statements are provided for the purpose of presenting information about management’s current expectations and plans relating to the future and readers are cautioned that such statements may not be appropriate for other purposes. Although PIRET’s management believes that the expectations reflected in such forward-looking statements are reasonable and represent PIRET’s internal projections, expectations and belief at this time, such statements involve known and unknown risks and uncertainties which may cause the actual performance and results in future periods to differ materially from any estimates or projections of future performance or results expressed or implied by such forward-looking statements and should not be read as guarantees of future performance or results. Those risks and uncertainties include, among other things, risks related to: unit prices; liquidity; credit risk and tenant concentration; interest rate and other debt related risk; tax risk; ability to access capital markets; lease rollover risk; competition for real property investments; environmental matters; changes in legislation and indebtedness of PIRET. Management believes that the expectations reflected in forward-looking statements are based upon reasonable assumptions and information currently available which include, management’s current expectations, estimates and assumptions that: proposed acquisitions will be completed on the terms and basis agreed to by PIRET, property acquisition and disposition prospects and opportunities will be consistent with PIRET’s experience over the past 12 months, the industrial real estate market in Canada will remain stable, the global economic environment will remain stable, interest rates will remain at current levels, and PIRET’s business strategy, plans, outlook, projections, targets and operating costs will be consistent with PIRET’s experience over the past 12 months, PIRET will be able to maintain occupancy at current levels, PIRET’s tenants will not default on lease terms, governmental regulations and taxation will not change to adversely affect PIRET’s business and financial results, and PIRET will be able to obtain adequate insurance and financing; however, management can give no assurance that actual results will be consistent with these forward-looking statements. Important factors that could cause actual results to differ materially from such expectations include, among other things, the availability of suitable properties for purchase by PIRET, the availability of mortgage financing for such properties, and general economic and market factors, including interest rates, business competition, changes in government regulations or in tax laws, and the projections included in management’s financial forecast, in addition to those factors discussed or referenced in the “Risk Factors” section in PIRET’s annual information form and other continuous disclosure documents filed on SEDAR at www.sedar.com.

The forward-looking statements contained herein are expressly qualified in their entirety by this cautionary statement. These forward-looking statements are made as of the date of this presentation and PIRET does not undertake any obligation to publicly update such forward-looking statements to reflect new information, subsequent events or otherwise, except as expressly required by applicable securities laws.

NON-IFRS MEASURES

There are a number of non-IFRS measures used in this presentation, including adjusted funds from operations (AFFO), adjusted net operating income (Adjusted NOI), AFFO payout ratio (POR), Debt to EBITDA, Debt to Gross Book Value, earnings before interest, taxes, depreciation and amortization (EBITDA), enterprise value, going-in cap rate, gross book value (GBV), interest coverage, net asset value (NAV) per unit, occupancy levels, weighted average effective interest rate and weighted average lease term (WALT) . PIRET believes that these non-IFRS measures are appropriate measures of the operating performance of PIRET. These and other non-IFRS measures do not have any standardized meaning prescribed by IFRS. PIRET’s calculation of these measures may differ from the methodology used by other issuers and, accordingly, may not be comparable to such other issuers. Refer to PIRET’s management discussion and analysis (MD&A) for further descriptions of the non-IFRS measures, available on SEDAR at www.sedar.com.

PIRET believes that certain of these measures are appropriate measures of PIRET’s operating performance because they facilitate an understanding of PIRET’s operating performance without giving effect to certain non-cash expenses. None of these measures are equivalent to net income or cash generated from operating activities determined in accordance with IFRS.

1

http://www.sedar.com/

CONTENTS

1. WHO WE ARE 2. WHY INDUSTRIAL 3. PIRET CREDIT

PROFILE

3

SECTION 1

WHO WE ARE

PIRET AT A GLANCE

4

$2.4 BILLION

ASSETS UNDER MANAGEMENT

INTERNALLY MANAGED

EXCLUSIVELY INDUSTRIAL REAL ESTATE

LARGEST CANADIAN LISTED INDUSTRIAL REIT

21.2 MILLION SF

ASSETS UNDER MANAGEMENT

FOCUSED ON LOGISTICS /

E-COMMERCE ASSETS

5

SECTION 2

WHY INDUSTRIAL

WHY ARE WE FOCUSED ON INDUSTRIAL?

6

CASHFLOW Historically stable and predictable income stream

Driven by positive real estate fundamentals

YIELD Historically attractive yields

10 year IPD property index total return 8.4%

GROWTH Fragmented market ripe for consolidation

E-commerce is positively driving demand for logistics space

POSITIVE INDUSTRIAL PROPERTY FUNDAMENTALS

Across Canada, strong property fundamentals: Strong demand and low supply of industrial space

Low vacancy rates

Cap rates lowest in stronger markets of Vancouver and Toronto

Property fundamentals drive stable and predictable cashflows and attractive yields in industrial REITs

7

3.0%

4.0%

5.0%

6.0%

7.0%

8.0%

9.0%

Q4

/06

Q2

/07

Q4

/07

Q2

/08

Q4

/08

Q2

/09

Q4

/09

Q2

/10

Q4

/10

Q2

/11

Q4

/11

Q2

/12

Q4

/12

Q2

/13

Q4

/13

Q2

/14

Q4

/14

Q2

/15

Q4

/15

Q2

/16

Q4

/16

Vancouver Calgary Edmonton Winnipeg Toronto

NATIONAL CAP RATES

Sources: CBRE Limited, Canaccord Genuity

NATIONAL SUPPLY AND DEMAND

Sources: CBRE Limited

Net Absorption Completions Availability Rate

Excess Demand

Excess Supply

30

25

20

15

10

5

0

-5

-10

-15

-20

10

8

6

4

2

0

-2

-4

-6

-8

Availability (%) Million Sq.ft

0.0% 1.0% 2.0% 3.0% 4.0% 5.0% 6.0% 7.0%

Vancouver Toronto Calgary Edmonton National

Ottawa Montreal Winnipeg Halifax

Van

cou

ver

Cal

gary

Edm

on

ton

Win

nip

eg

Lon

do

n

Wat

erlo

o

Toro

nto

Ott

awa

Mo

ntr

eal

Hal

ifax

Van

cou

ver

Cal

gary

Edm

on

ton

Win

nip

eg

Lon

do

n

Wat

erlo

o

Toro

nto

Ott

awa

Mo

ntr

eal

Hal

ifax

STRONGEST PROPERTY FUNDAMENTALS IN TARGET MARKETS

Fundamentals in our target markets are even stronger

Supply and demand led by key markets of Toronto, Vancouver, Calgary and Edmonton

8

INDUSTRIAL CLASS A CAP RATES


INDUSTRIAL SUPPLY AND DEMAND


2016 2015 5 year average

2016 Net Absorption By Market 2016 Construction Completions By Market

10

8

6

4

2

0

-2

8

7

6

5

4

3

2

1

0

Million Sq.ft Million Sq.ft

PIRET Target Markets: Vancouver, Toronto, Calgary, Edmonton PIRET Target Markets: Vancouver, Toronto, Calgary, Edmonton

Vancouver

Toronto

Calgary

Edmonton

National

Ottawa

Montreal

Winnipeg

Halifax

E-COMMERCE IN US IS $400+ BILLION INDUSTRY1

Total retail sales expected to grow 3.7-4.2% whereas E-commerce expected to grow 8-12%2

Walmart’s global online sales rose 15.5% on a constant currency basis in fiscal 4Q17, while its US segment’s online sales jumped 29.0%

During fiscal 4Q16, Target’s comparable digital sales increased by 34%

9

U.S E-COMMERCE RETAIL SALES

Sources: CBRE Research Q4 2016, US Census Bureau

6.0%

6.5%

7.0%

7.5%

8.0%

8.5%

9.0%

0

20

40

60

80

100

120

Q1-15 Q2-15 Q3-15 Q4-15 Q1-16 Q2-16 Q3-16 Q4-16

$ B

illio

ns

U.S. E-commerce Sales Percent of Total Retail Sales

1. Source: U.S. Census Bureau News February 17 2017 2. Source: National Retail Federation February 2017

E-COMMERCE CONTINUES TO EXPAND

10

Walmart Expands Its E-Commerce

Ambitions With a New Investment

Arm – New York Times March 2017

Hudson's Bay spent $60 million on robotic

technology to amp up its e-commerce

distribution centre – CBC November 2016

Best Buy showed impressive gains in e-

commerce — online sales grew 18%

YoY for the quarter and made up nearly

19% of total domestic revenue. – Business

Insider March 2017

“This company, over time, is going to look like

more of an e-commerce company.” – Doug McMillon Walmart Stores president/CEO at AGM 2016

“The key to winning in e-commerce is to be able

to win in logistics and supply chain.” – Marc Lore Walmart E-Commerce president/CEO at AGM 2016

Only Option Left For The Limited:

Online Sales – Mediapost.com January 2017

E-COMMERCE REQUIRES WAREHOUSE SPACE

CBRE estimates that every $1.0 billion of e-commerce sales creates 1.25 million sf of logistics demand

E-commerce is a significant driver of demand for logistics warehouse space:

- Regional Distribution Centres

- Urban Distribution Centre

- Fulfillment and parcel delivery

- Reverse logistics

11

IMPLIED DEMAND FOR LOGISTICS SPACE

-50

50

150

250

350

450

0

20

40

60

80

2011 2012 2013 2014 2015 2016E

Sources CBRE Research Q4 2016, U.S Census Bureau

E-commerce related Net Absorption E-commerce Sales ($Billions)

$ B

illio

ns

Mill

ion

s SF

* Source: U.S. Census Bureau News February 17 2017

STRATEGIC INCREASE IN EXPOSURE TO E-COMMERCE

12

E-COMMERCE TENANTS

FedEx Ground

TFI International

Hudson’s Bay Company

Kuehne + Nagel

Purolator

MTE Logistix

Porter Warehouse & Distribution

Landmark Global

All Canadian Courier

MWI Veterinary Supply

Canada Post

IKEA

TFI

TFI

TFI

3.5 MILLION SF E-COMMERCE RELATED TENANT

ACIVITY

E-commerce growth continues to create strong demand for logistics space

Approximately 30% of our portfolio’s tenant activity is e-commerce related

As demand continues to grow, we expect e-commerce to make up a larger part of our portfolio

1. Pro-forma includes subsequent events as disclosed in the Trust’s 2016 audited financial statements and, acquisitions and dispositions as outlined in news releases dated January 30, 2017 and February 22, 2017. Pro-forma information excludes properties classified as assets held for sale as at December 31, 2016.

13

SECTION 3

PIRET CREDIT PROFILE

KEY CREDIT STRENGTHS

14

Institutional quality assets

Geographically diverse portfolio, with majority in core markets

Distribution / logistics / e-commerce focus

Active, hands-on internal asset and property management

Selective value-add development activity

Joint venture partnerships to support growth

Prudent financial management and capital allocation

Simple balance sheet

KEY CREDIT STRENGTHS

Montreal 0.4 million S.F.

Toronto 7.4 million S.F.

Winnipeg 0.7 million S.F.

Vancouver 2.2 million S.F.

Regina 0.2 million S.F.

Edmonton 2.3 million S.F.

Calgary 1.5 million S.F.

Chicago 0.3 million

S.F.

Los Angeles 0.2 million S.F.

Barrington & Dover

0.4 million S.F.

West Palm Beach 0.1 million S.F.

San Antonio, Houston & Austin

1.4 million S.F.

Charlotte, Greensboro & Winston-Salem

3.9 million S.F.

Baton Rouge 0.2 million S.F.

USA markets targeted for future growth

10

26

16

74

4 8

4

2

1

4 1

11

2

1

95% OF PORFOLIO CONCETRATED IN MAJOR MARKETS1

15

$2.4 BILLION PORTFOLIO

164 PROPERTIES

21.2 MILLION S.F. AUM

1 PROPERTY UNDER DEVELOPMENT

42.4 ACRES OF DEVELOPMENT LAND

BC 12%

ALBERTA 22%

ONTARIO 33%

USA 28%

OTHER 5%

GEOGRAPHIC DIVERSITY (by Adj. NOI)


Flex 7%

Light

Manufacturing 20%

Transportation

/ Logistics 5%

Distribution /

E-Commerce

68%

DIVERSIFIED PORTFOLIO WITH DISTRIBUTION & LOGISTICS FOCUS

16

Distribution / Logistics Focus

A more liquid investment

Easier to re-lease than manufacturing facilities

Superior growth prospects

Increasing focus on e-commerce

Single-tenant Advantage

Enhances liquidity

Typically larger, more credit- worthy tenants

Efficient management platform

Concentrated in Major Markets

95% of portfolio is concentrated in major markets

Overall weighted average capitalization rate: 6.18%

Embedded value in portfolio

PROPERTY USE PROPERTY TYPE PROPERTY LOCATION

Multi tenant 27%

Single

tenant

73%


BC 12%

5.60%

AB 22%

6.55%

ON 34%

5.81%

USA 27%

6.49%

Othe

r

5%

6.91%

Total 100%

6.18%

By NOI By NOI By Investment Properties Value

Wtd Avg Cap Rate

Transportation / Logistics 47.8%

Manufacturer 20.8%

Wholesale Trade 10.1%

Retail Trade 8.0%

Services 3.2%

Mining, Oil and Gas 7.3%

Others 2.8%

FedEx 24.7% (9.2 years)

TFI International 5.4% (9.7 years)

IKEA 3.8% (5.1years)

Containerworld 3.5% (7.6 years)

Best Buy 2.4% (1.4 years)

International Paper 2.2% (3.2 years)

K+N 1.8% (5.2 years)

HBC 1.8% (6.0 years)

DHL Supply Chain 1.8% (5.8 years)

Tervita 1.7% (15.8 years)

DIVERSIFIED BLUE CHIP TENANTS

Well diversified across industry sectors Weighted towards growing sectors of logistics and e-commerce

Exposure to mining, oil and gas < 5%

Top 10 tenants have long lease terms

WALT of top 10 tenants is 8.1 years vs whole portfolio average of 6.2 years

17

Weighted Average Lease Term Remaining

TENANT INDUSTRY SECTOR By Revenue1

TOP 10 TENANTS By Revenue1


12.1%

9.4% 10.3%

8.6%

12.1% 12.2%

4.4%

10.7%

5.0% 4.9%

8.2%

2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 Thereafter

BC AB ON USA Other

HEALTHY LEASE MATURITY PROFILE1

Low re-leasing risk Over 33% of leases expiries

are 2023 and later

Contractual rent increases Provides organic NOI

growth

Well-staggered lease maturities Provides a balance of stability

and rental growth

18

WEIGHTED AVERAGE LEASE TERM = 6.2 YEARS

33% LEASES UP FOR RENEWAL POST 2023

LEASE EXPIRY PROFILE


EFFICIENT AND EFFECTIVE OPERATING STRUCTURE

Dedicated, internal investment, property and asset management teams

Hands-on, proactive property and asset management across 5 offices

No fees paid to external management

All-in net G&A costs represents ~3.8% of revenue on a run-rate basis

Scalable platform going forward

Positioned to achieve economies of scale with portfolio growth

Completed over 3 million sf of renewals and new leases in 2016

19

Located in Richmond, BC Project Size: Approx. 152,000 S.F. NOI Yield: 7.9% Completed: Q3-2014

Located in Barrington, NJ Project Size: 56,000 S.F NOI Yield: 9.9% Completed: Q2-2016

Located in Vaughan, ON New development Project Size: Approx. 422,000 S.F. NOI Yield: 6.8% Completed: Q2-2016

Expansion for in place tenant who occupied 126,505 S.F. of the property Project Size: Approx. 44,000 S.F. Completed: Q4-2016

Located in Richmond, BC Adjacent to an existing portfolio Project Size: Approx. 330,000 S.F. Project Cost: Est $40 million Completion: Q2-2017

Expansion of trailer parking facility for major tenant in the U.S. Completed: Q4-2017

Internal asset management team with development capabilities

Focused on select developments and expansions in PIRET’s established markets

Currently 1 property under development and 42.6 acres1 of developable land

IN HOUSE DEVELOPMENT CAPABILITIES

20

East Richmond Development

Alberta – 13.9 Acres Land Held for Development

Woodstock Expansion

Ontario – 10.3 Acres Land Held for Development

Manitoba – 2.2 Acres Land Held for Development

San Antonio Parking Facility Expansion

Container World Expansion

FedEx Ground Development

FedEx USA Expansion

Texas1 – 16.0 Acres Land Held for Development

1 Pro-forma including the Texas Land Acquisition as outlined in news release dated January 30, 2017

SCALABLE PLATFORM WITH JOINT VENTURE CAPABILITIES

Relationships with 3 institutional joint venture partners1

PIRET maintains 100% management interest of the properties

Enables the Trust to maintain operational scale while decreasing economic exposure

Speaks to the quality of internal management team

Enhances returns through generation of fee income

Source of low-cost partner capital for further growth

21

8 properties in Ontario (0.81 million S.F.), 1 property in Quebec

(0.16 million S.F.)

3 properties in North Carolina (1.33 million S.F.)

3 properties in Alberta (0.21 million S.F.), 1 property in Manitoba

(0.04 million S.F.)

4 properties in Alberta (0.42 million S.F.), 1 property in Ontario

(0.08 million S.F.)1

1. Pro-forma includes subsequent events as disclosed in the Trust’s 2016 audited financial statements, management discussion and analysis and, acquisitions and dispositions as outlined in news releases dated January 30, 2017 and February 22, 2017. Pro-forma information excludes properties classified as assets held for sale as at December 31, 2016.

EFFECTIVE CAPITAL RECYCLING TO UPGRADE PORTFOLIO

22

MARKET CAP 1

MA

RK

ET C

AP

ITA

LIZA

TIO

N (

CA

D$

MIL

LIO

NS)

2007-2009 2010 2011 2012 2013 2014 2015

$21 million IPO

Sep 2007 2016

2010 Acquired

18 properties $131 million

Management internalized June 2011

TSX graduation listing Sep 2012

S&P/TSX Composite Index Inclusion

Mar 2015

2017

1,400

1,200

1,000

800

600

400

200

2007 - 2009 Acquired


2011 Acquired


2012 Acquired


Sold 1 property $6.1 million

2013 Acquired 77 properties

$596 million Sold 8 properties

$33.1 million

2014 Acquired 24 properties

~$429 million Sold 14

properties $101.1 million

2015 8 properties

~$150 million Sold 12 properties

$54.6 million

2017* 2 properties

~$136 million Sold 2 properties

$28.2 million

Real Estate becomes it’s own

GICS Sector Aug 2016

$1.43 billion**

market cap March 2017

2016* 17 properties ~$289 million

Sold 8 properties $38.7 million

2014 First USA

Acquisition

1. Pro-forma includes subsequent events as disclosed in the Trust’s 2016 audited financial statements, management discussion and analysis and, acquisitions and dispositions as outlined in news releases dated January 30, 2017 and February 22, 2017. Pro-forma information excludes properties classified as assets held for sale as at December 31, 2016.

2. Market Data as at March 3, 2017

$217.6 million of dispositions

reinvested in higher quality assets

Unit price (March 27, 2017) $6.16

Units outstanding, float 245,682,372 Average daily volume (last 30 trading days) 1,433,945

(C$ Millions) Market capitalization1 2 $ 1,521

Cash and available lines2 $ 157

Debt2 3 $ 1,065 Unencumbered pool of assets2 3 $350 Enterprise value2 $ 2,450 Gross book value2 $ 2,517 Debt to gross book value2 42.3% Debt to EBITDA2 8.3 Interest Coverage2 3.22 Liquidity5 $190

Annual distribution per unit $ 0.312 Yield2 5.32%

Analyst Consensus Information: Consensus Target Price $ Consensus NAV per unit4 $ 5.86 Consensus AFFO payout ratio4 -2017E 79.3%

SIMPLE AND CONSERVATIVE CAPITAL STRUCTURE

23

. 1. Market information as at March 27, 2017 2. PIRET’s financial results as at December 31, 2016 and as reported on Q4-2016 financial statements 3. Includes assets/liabilities held for sale 4. Based on consensus analyst estimates as of March 2017 and does not represent PIRET and its management’s opinions, forecasts or predictions.

The inclusion of this information in our presentation does not imply any endorsement of, or concurrence with the analysts estimates 5. Liquidity includes new unsecured facility as announced February 22, 2017

SELECT FINANCIAL INFORMATION

Mortgage debt

Unsecured credit facility

Equity (no convertibles or prefs)

SIMPLE CAPITAL STRUCTURE

AS MORTGAGES MATURE, REFINANCE STRATEGICALLY

24

1. Pro-forma includes subsequent events as disclosed in the Trust’s 2016 audited financial statements and, acquisitions and dispositions as outlined in news releases dated January 30, 2017 and February 22, 2017. Pro-forma information excludes properties classified as assets held for sale as at December 31, 2016

2. Source: Avison Young Debt Market Monitor (March 2017)

WEIGHTED AVERAGE TERM = 5.1 YEARS

MORTGAGE MATURITY PROFILE1 WA Effective Rate1 3.86%

10yr Loan Term Rate2 3.47-3.97%

5yr Loan Term Rate2 2.80-3.15%

5yr Loan Term Rate

10yr Loan Term Rate

8.2% 8.8%

10.7%

15.2%

12.3%

16.2%

6.4%

10.4%

3.8%

7.6%

0.4%

3.90% 4.00% 3.96%

4.34%

3.57% 3.86%

4.50%

3.37% 3.55%

3.47%

4.92%

3.98% 3.80% 3.82%

4.21%

3.51% 3.78%

4.37%

3.30% 3.40% 3.40%

4.72%

0.00%

1.00%

2.00%

3.00%

4.00%

5.00%

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

30.0%

2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 Thereafter

Scheduled Maturity Effective Rate Nominal Rate

TRUST INDEBTEDNESS

30%

35%

40%

45%

50%

55%

60%

65%

70%

75%

Q4

-07

Q1

-08

Q2

-08

Q3

-08

Q4

-08

Q1

-09

Q2

-09

Q3

-09

Q4

-09

Q1

-10

Q2

-10

Q3

-10

Q4

-10

Q1

-11

Q2

-11

Q3

-11

Q4

-11

Q1

-12

Q2

-12

Q3

-12

Q4

-12

Q1

-13

Q2

-13

Q3

-13

Q4

-13

Q1

-14

Q2

-14

Q3

-14

Q4

-14

Q1

-15

Q2

-15

Q3

-15

Q4

-15

Q1

-16

Q2

-16

Q3

-16

Q4

-16

70% Maximum Indebtedness Ratio Permitted in Trust Documents

Historic Indebtedness Ratio

45-50% Medium Term Target Range

40% Long Term Target

TARGETED BALANCE SHEET IMPROVEMENTS

• Strategic de-gearing to manage risk

• AFFO per unit growth despite significant de-leveraging

25

INVESTMENT SUMMARY

26

STRONG PLATFORM

PORTFOLIO QUALITY STRONG PROPERTY

FUNDAMENTALS

PRUDENT CAPITAL STRUCTURE

SUSTAINABLE GROWTH

910 - 925 West Georgia Street

Vancouver, BC V6C 3L2

Tel: 604-398-2836

Toll: 888-681-5959

Fax: 604-681-5969

www.piret.ca

STOCK EXCHANGE LISTING

Toronto Stock Exchange – TSX Ticker symbol: AAR.un

CONTACT US

Kevan Gorrie

President and CEO

[email protected]

2420 – 150 King Street

PO Box 72

Toronto, ON M5H 1J9

Tel: 416-479-8590

Fax: 416-598-0435

TORONTO CONTACT VANCOUVER CONTACT

Sylvia Slaughter

Director, Investor Relations

[email protected]

Tel: 416-479-8590, ext. 267

Teresa Neto

CFO

[email protected]

http://www.piret.ca/

APPENDIX: DEDICATED INTERNAL MANAGEMENT TEAM

28

Kevan Gorrie P. Eng

President & Chief

Executive Officer, Trustee

Formerly led the Industrial business for Oxford Properties

18 years of real estate experience

Over $2.5 billion in transactions completed

Teresa Neto CPA, CA

Chief Financial Officer

Senior financial executive with over 25 years of experience in

corporate finance & accounting

Former CFO of established REITs in Canada and Real Property

Association of Canada (REALpac)

Charlie Deeks Vice President,

Investments

10 years of real estate experience including appraisal, asset

management and investment

Over $1.0 billion of transaction volume completed to date

Kantaro Goto CPA, CMA

Vice President Finance and

Corporate Controller

13 years of real estate and finance experience

Former Director, Finance at Build Toronto and Controller at a

recognized REIT

Allan Saito Vice President, Property

Management and Leasing

20 years of real estate experience in leasing, property management

and development

Former VP at Build Toronto and GE Capital Real Estate