AGM Investor Presentation October 2018 TSX:TNT.UN 5775 Yonge Street, Toronto, ON 5775 Yonge Street, Toronto, ON
Forward Looking Information Certain statements contained in this presentation constitute forward-looking information within the meaning of Canadian securities laws. Forward-looking information is provided for the purposes of assisting the reader in understanding the REIT's financial performance, financial position and cash flows as at and for the periods ended on certain dates and to present information about management's current expectations and plans relating to the future and readers are cautioned such statements may not be appropriate for other purposes. Forward- looking information may relate to future results, performance, achievements, events, prospects or opportunities for the REIT or the real estate industry, and may include statements regarding the financial position, business strategy, budgets, projected costs, capital expenditures, financial results, taxes, plans and objectives of or involving the REIT. In some cases, forward-looking information can be identified by such terms as “may”, “might”, “will”, “could”, “should”, “would”, “expect”, “plan”, “anticipate”, “believe”, “intend”, “seek”, “aim”, “estimate”, “target”, “project”, “goal”, “predict”, “forecast”, “potential”, “continue”, “likely”, or the negative thereof or other similar expressions suggesting future outcomes or events. Forward-looking information involves known and unknown risks and uncertainties, which may be general or specific and which give rise to the possibility that expectations, forecasts, predictions, projections or conclusions will not prove to be accurate, assumptions may not be correct and objectives, strategic goals and priorities may not be achieved. A variety of factors, many of which are beyond the REIT’s control, affect the operations, performance and results of the REIT and its business, and could cause actual results to differ materially from current expectations of estimated or anticipated events or results. These factors include, but are not limited to, risks related to the Units and discussed in the REIT’s materials filed with Canadian securities regulatory authorities from time to time on www.sedar.com. The reader is cautioned to consider these and other factors, uncertainties and potential events carefully and not to put undue reliance on forward-looking information as there can be no assurance actual results will be consistent with such forward-looking information. Information contained in forward-looking information is based upon certain material assumptions applied in drawing a conclusion or making a forecast or projection, including management’s perceptions of historical trends, current conditions and expected future developments, as well as other considerations believed to be appropriate in the circumstances including the following: the Canadian economy will remain stable over the next 12 months; inflation will remain relatively low; interest rates will remain relatively stable; conditions within the real estate market, including competition for acquisitions, will be consistent with the current climate; the Canadian capital markets will provide the REIT with access to equity and/or debt at reasonable rates when required; Starlight Group Property Holdings Inc. (“Starlight”), or an affiliate of Starlight, will continue its involvement as asset manager of the REIT in accordance with its current asset management agreement, and the risks referenced above, collectively, will not have a material impact on the REIT. While management considers these assumptions to be reasonable based on currently available information, they may prove to be incorrect. The forward-looking information included in this presentation relate only to events or information, as of the date on which the information is made in this presentation. Except as specifically required by applicable Canadian law, the REIT undertakes no obligation to update or revise publicly any forward-looking information, whether as a result of new information, future events or otherwise, after the date on which the statements are made or to reflect the occurrence of unanticipated events. Certain terms used in this presentation such as funds from operations (“FFO”), net operating income (“NOI”), indebtedness to gross book value (“Gross Book Value”) ratio, Gross Book Value, indebtedness, indebtedness coverage ratio and interest coverage ratio are not measures defined under International Financial Reporting Standards (“IFRS”) as prescribed by the International Accounting Standards Board, do not have standardized meanings prescribed by IFRS and should not be compared to or construed as alternatives to profit/loss, cash flow from operating activities or other measures of financial performance calculated in accordance with IFRS. FFO, NOI, Gross Book Value, indebtedness, indebtedness coverage ratio and interest coverage ratio as computed by the REIT may not be comparable to similar measures as reported by other reporting issuers in similar or different industries. Details on non-IFRS measures are set out in the REIT’s Management’s Discussion and Analysis for the period ended June 30, 2018 and available on the REIT’s profile at www.sedar.com. TNT.UN I INVESTOR PRESENTATION 2
True North at a Glance TNC has demonstrated a solid track record and is well positioned for continued growth 3650 Victoria Park Avenue, Toronto, ON 5900 Explorer Drive, Toronto, ON 3115 Harvester Road, Burlington, ON $899 M 46 Properties 4.2 YR Total assets 3.7 million sq. ft. across 100 % Weighted average lease term five provinces 79 % Revenues 95.6 % Return of capital 9.0 % * Generated from government and Occupancy credit-rated tenants Yield * As September 30, 2018. TNT.UN I INVESTOR PRESENTATION 3
Our Strategy The REIT utilizes several key strategies to maximize total returns to unitholders Accretive Acquisition Program Organic Growth Leverage Relationships 340 Laurier Avenue West, Ottawa, ON 6865 Century Avenue, Mississauga, ON 777 Brock Road, Pickering, ON • Focus on net operating income growth • Leverage the relationship with TNC’s asset • Build scale through the acquisition of accretive, high-quality properties in urban manager, Starlight Investments markets • Use best-in-class third party property managers who offer exceptional service • Utilize Starlight Investments’ extensive • Focus on government and credit-rated and local market knowledge and expertise resources, economies of scale, and tenants with long-term leases and visible industry relationships to source off-market cash flow acquisitions • Maintain a conservative financial position TNT.UN I INVESTOR PRESENTATION 4
Highest Quality Tenant Base 79% of revenue is derived from government and credit-rated tenants 79 % 42 % 37 % Total Government and Credit-Rated Tenants Government Tenants Credit-Rated Tenants True North’s top 10 tenants account for approximately 37% of its revenue and include mainly government or credit-rated tenants: Credit- Tenant % of Revenue Location WALT Government Rated Federal Government - Correctional Services ON 2.4 - 7.14% Meloche Monnex Inc. ON 4.7 - 4.12% Federal Government – Public Safety ON 1.4 - 3.56% Lumentum Ottawa Inc. ON 4.3 - 3.54% Ontario Power Generation Inc. ON 4.4 - 3.34% Alberta Infrastructure AB 3.4 - 3.32% Ministry of Government Services ON 2.9 - 3.27% Alberta Health Services 2.94% AB 6.1 - Staples Canada ULC ON 15.0 2.85% - - General Dynamics 2.84% AB 5.2 - TNT.UN I INVESTOR PRESENTATION 5
Recent Acquisitions The REIT’s acquisition activity has an increased focus on quality real estate in urban markets 16 properties $429 M 1.8 M growth in square assets feet 3115 Harvester Road, Burlington, ON 32071 South Fraser Way, Abbotsford, BC 5775 Yonge Street, Toronto, ON 1595 16 th Avenue, Richmond Hill, ON 80 Whitehall Drive, Markham, ON 6 Staples Avenue, Richmond Hill, ON TNT.UN I INVESTOR PRESENTATION 6
Current Portfolio 3,728,700 46 Sq. ft. Properties 3 4 29 8 2 Nova Scotia British Columbia Alberta Ontario New Brunswick 2 properties 3 properties 4 properties 29 properties 8 properties 134,200 sq. ft. 398,400 sq. ft. 2,295,800 sq. ft. 473,100 sq. ft. 427,200 sq. ft. 93.8% occupancy 100% occupancy 98.3% occupancy 97.0% occupancy 87.2% occupancy TNT.UN I INVESTOR PRESENTATION 7
Portfolio Lease Maturity Reliable, long-standing tenant base with significant tenant capital • 4.2 YR investments reduces rollover risk • Long-term visible cash flows Weighted average • New lease with Immunovaccine at 120-140 Eileen Stubbs Avenue, Halifax, lease term Nova Scotia, (14,941 square feet) and an expansion with ResMed Halifax Inc. at 36 & 38 Solutions Drive, Halifax, Nova Scotia, (10,600 square feet) SELECTED CREDIT-RATED TENANTS 600,000 sf 500,000 sf 400,000 sf 300,000 sf 200,000 sf 100,000 sf 0 sf 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 Thereafter TNT.UN I INVESTOR PRESENTATION 8
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