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Ten Years of Growth
Portfolio(sq. ft. millions)
Revenue($ millions)
FFO per Unit
1.3
Jan 1, 96
32.7
Dec 05
$11
96
$289
05
$1.33
96
$1.91
05
5
31%84%
A Successful Transition
(% of annualized net operating income)
Dec. 31, 2000
Light Industrial
March 31, 2006
Light Industrial
31%
Real estate assets of approximately $2.0 billion
Approximately 33 million square feet
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Major Presence in Key Markets
#1
Edmonton
Calgary
HalifaxOttawa
#2
Toronto
Top 5
Montreal
Kitchener/Waterloo
Cambridge
Winnipeg
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Geographic Diversification
AlbertaOntario Quebec
NovaScotiaSask./Man.
BC
Breakdown of annualized net operating income (March 31, 2006)
1% 25%3%
48% 14% 8%
U.S.
>1%
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Strong Market Presence Benefits
Synergies and economies of scale
Strong acquisition pipeline
Geographic and tenant diversity for investors
Higher tenant retention and occupancy
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Consistent High Occupancy
97% =
economic full occupancy
94.1% 94.7% 94.7% 93.2% 95.5% 96.2%
2000 2001 2002 2003 2004 2005
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No single industrial tenant >2% of base rent
Approximately 3,000 Tenants –A Broad and Diverse Revenue Base
At December 31, 2005
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Full Service Real Estate Platform
• Generates value for investors
• Solid track record of success• Industry leader with “best-in-class”
service• In-house expertise
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Operating revenues
Net operating income (“NOI”)
Same property NOI
Same property NOI – Cdn. industrial portfolio
Funds from operations
Funds from operations per Unit
2005 Performance Highlights
10.7%
10.9%
1.5%
1.3%
15.1%
3.8%
Year ended, December 31, 2005*
*Compared to the year ended December 31, 2004
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83%
81%
2004 2005
FFO Payout Ratio
Increased Cash Distributions, Improved Payout Ratio
$1.53
$1.55
$1.57
May, 2005 March, 2006
Cash Distributions
High after tax return: 85% tax deferred
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2005 Highlights
New space, third-party developers
Internal developments and expansions
million sq. ft.
under constructionor pre-leasing
million sq. ft.
Invested $196M in targetedgrowth regions
1.9
1.8
0.50.5
1.9
1.8
purchased
million sq. ft.
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2005 Highlights
Issued 4.7 million Units
Issued senior unsecured debentures
raised
raised
Increased focus on light industrial target sector – disposed of 7 non-core properties
92%
$108M
$100M$100M
92%
$108M
GLA
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2005 Highlights
Capacity to acquire new properties
2005 return for Unitholders – highest of allCanadian REITs
Leverage reduced 51%
$500M
45%45%
51%
$500M
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Progress Continued in Q1, 2006
Operating revenues $73.6M $73.2M
Net operating income $46.8M $46.6M
Same property NOI +2.4%
Same property NOI – Cdn. industrial portfolio +2.2%
Funds from operations $31.3M $30.1M
Occupancy 95.6% 95.2%
Q1 2006 Q1 2005
1.6%
1.5%
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Debt % of gross book value
Interest rate (%) – weighted average
Term to maturity – weighted average (yrs)
Interest coverage
Solid Financial Position
As of March 31, 2006
3.0x
4.6
6.03%
50%
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1-2 story buildings
Aroundmajor cities
Warehousing, storage,
light assembly, logistics
No heavy industry
1-2 story buildings
Aroundmajor cities
No heavy industry
Warehousing, storage,
light assembly, logistics
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Factors Driving Strong Industrial Performance
Key factor Performance
Broad customer base Stable cash flow
Type of activities Low maintenance and capex
Domestic business focusPositively affected by high Canadian dollar
Steady economic growth High occupancy
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Vacancies Down, Rents Increasing
National Industrial Asking Net Rent(1)
$0
$2
$4
$6
95 97 99 01 03 05
Source: Cushman & Wakefield LePage Note 1: All Canadian metro markets
0%
2%
4%
6%
8%
88 95 97 99 01 03 05
National Industrial Vacancy Rate(1)
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While the Acquisition Market has Heated Up…
• Property values still have room to grow
• Foreign investors showing greater interest
• Canadian demand for properties remains strong
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… Our Growth will Continue
A three-point growth plan – not just acquisitions
1. Acquisitions 2. Expansions 3. Developments
+ +
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Strategy at Work:Impressive Results from Mezzanine Financing Program
$81M• Invested $43M in mezz financings – $7M in interest and fee income– 5 properties acquired – 1.3M sq ft
• Increase in combined value since acquisitions
$81M
23.8%23.8%
$150M• Q1, 2006 properties in development – 8 properties– Will add 2.0M sq ft $150M
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Continue to Execute Successful Strategies
Profitable Growth
1. Acquisitions 2. Expansions 3. Developments
+ +
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Solid Organic Growth
Industrial Portfolio
GLA (million sq ft) 3.24 4.49 3.41 2.80 4.33
In Place Rent $5.81 $5.24 $5.82 $5.69 $5.70
% of Industrial 11.1% 15.4% 11.7% 9.6% 14.9%
Total Portfolio
GLA (million sq ft) 3.37 5.04 3.63 3.01 4.49
In Place Rent $6.11 $6.07 $6.31 $6.36 $5.95
% of Total Portfolio 10.7% 16.0% 11.5% 9.7% 14.3%
2006 2007 2008 2009 2010
Lease expiries (March 31, 2006)
Market rents at or above face rents in leases expiring over the next 5 years
• Well staggered lease maturity schedule• Historical tenant retention ratio at lease maturity in excess of
70%
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Strategy Builds Critical Mass, Drives Cash Flow
1.Increases critical mass
2.Operating synergies
3.Cash flow
4.Expanded features
5.Grow tenantbase
Strategy
1. Acquisitions 2. Expansions 3. Developments
+ +
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Our Goal is to Double The Business
Market Share(1)
Today
3%
33 million sq. ft.
Long term goal
7-10%
50-70 million sq. ft.
Investing $200M in 2006Note 1: Total leaseable industrial real estate in Canada
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Four Attributes Set Summit Apart
1
Track Record
– 10 years
2
Light Industrial
– most profitable and
stable
3
Diverse Portfolio– geographic, tenants
4
Resources to Grow
– financial, managemen
t
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Cautionary Statement
This presentation may contain forward-looking statements with respect to Summit REIT and its operations, strategy, financial performance and condition. These statements generally can be identified by use of forward-looking words such as “may”, “will”, “expect”, “estimate”, “anticipate”, “intends”, “believe” or “continue” or the negative thereof or similar variations. Summit’s actual results and performance discussed herein could differ materially from those expressed or implied by such statements. Such statements are qualified in their entirety by the inherent risks and uncertainties surrounding future expectations. Important factors that could cause actual results to differ materially from expectations include, among other things, general economic and market factors, competition, changes in government regulation and the factors described under “Risk Factors” in Summit REIT’s annual information form and other securities regulatory filings. The cautionary statements qualify all forward-looking statements attributable to Summit REIT and persons acting on its behalf. Unless otherwise stated, all forward-looking statements speak only as of the date to which this presentation refers, and the parties have no obligation to update such statements.
Funds from operations is not a measure recognized under Canadian generally accepted accounting principles ("GAAP") and does not have a standardized meaning prescribed by GAAP. Funds from operations is presented in this presentation because management believes that this non-GAAP measure is a relevant measure of its ability to earn and distribute cash returns to Unitholders. Funds from operations computed by Summit REIT may differ from similar computations as reported by other similar organizations and, accordingly, may not be comparable to funds from operations reported by such organizations. Funds from operations is calculated by reference to net income on a consolidated basis, as determined in accordance with GAAP.
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• Throughout an extended period of significant growth, Summit has adhered to a conservative debt policy
Leverage @ Gross Book Value
Note: Includes Convertible Debentures that have been classified as debt on the balance sheet* Convertible Debentures** Unsecured Debentures
Consistent Moderate Leverage
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2000 2001 2002 2003 2004 2005$0
$500
$1,000
$1,500
$2,000
$2,500
Total Leverage Total Assets
5.7%**
5.0%*
10.2%**
4.7%*
54.1% 53.4% 52.1% 51.3% 54.4%50.5%
43.7%Secured
debt
35.6%Secured
debt
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50.5%
38.0%
Book Market
Note: Market value based on unit price of $24.57 at December 31, 2005
Leverage at Market Value
Summit’s strong ability to create value has resulted in a leverage ratio that, on a Market Value basis, is even more conservative
Leverage – Book vs. Market (Dec. 31, 2005)
45.8%
Excluding $98MM of Convertible
Debentures
34.4%
Excluding $98MM of Convertible
Debentures
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Favourable Debt Repayment Schedule (December 31, 2005)
• Weighted average term to maturity of 4.6 years • Weighted average interest rate of 6.03%
Mortgages Unsecured Debentures Convertible Debentures Wtd Avg Interest Rate
($mm)
11.6% 11.4%
7.4%7.6%
16.0%
3.6%
11.3%
14.9%
16.2%
9.8%
6.4%4.0%
1.0%
9.7%
10.7%
0.2%$0.0
$60.0
$120.0
$180.0
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
0.00%
3.00%
6.00%
9.00%
4.1%
16.3%7.8%
7.5%11.6%11.5%
thereafter
15.2%
16.5%
0.0%
9.5%
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Interest Coverage
Strong Interest Coverage
2.1x2.3x
2.5x2.6x 2.6x
2.9x
2000 2001 2002 2003 2004 2005
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Coverage Stability (at December 31, 2005)
• At the current 2.90x coverage and the 1.65x maintenance covenant, EBITDA would have to decline by a sizable 42% before the threshold would be reached
• Staggered lease maturity profile, record of strong EBITDA growth, the stability of industrial properties and high tenant demand make any significant drop in EBITDA unlikely
• Further comfort is provided by the fact that at the current WAIR of 6.05% and an average term to maturity of 4.8 years, Summit’s debt is approx. 80 bps over market.
• STA-3 (mid) stability rating by DBRS