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Automotive Properties REIT offers a unique opportunity to invest in a portfolio of best-in-class properties underlying Canadian automotive dealerships, representing leading automotive brands ranging from the mass-market to the ultra-luxury segment. The primary objective of the REIT is to create long-term value for Unitholders by generating sustainable tax-efficient cash flow and capital appreciation.  

Investment Highlights

Opportunity to Gain Exposure to a Unique Real Estate Asset Class

The REIT’s automotive dealership properties are located in urban areas that are specifically zoned for automotive retail use. A defensive asset class, these properties represent a strategic and fundamental part of the automotive manufacturers’ brand and distribution network.

Automotive Dealership Properties Benefit from Strong Underlying Fundamentals

In 2019, the Canadian automotive retail industry generated sales of approximately $165 billion, representing approximately 27% of Canada’s overall retail sales of products and merchandise. From 2014 to 2019, automotive retail sales increased at a compound annual growth rate of 6.2%, while generating consistent profit margins.

Portfolio of High-Quality and Strategically Located Automotive Dealership Properties

The REIT’s portfolio consists of 65 income-producing properties, located on approximately 200 acres, representing approximately 2.5 million square feet of gross leasable area. The properties are generally located along major transportation arteries with high visibility and convenient consumer access, and meet or exceed the latest automotive manufacturers’ standards.

Significant Growth Opportunities

The REIT is well-positioned to capitalize on growth opportunities, including (i) accretive acquisitions from third parties; (ii) accretive acquisitions from the Dilawri Group; and (iii) contractual annual rent escalations. The fragmented nature of the Canadian automotive dealership industry is expected to provide the REIT with a significant pipeline of acquisition opportunities in the future.

Strong Lead Tenant with Significant Alignment of Interests

With combined revenues of approximately $3.8 billion in 2019, the REIT’s lead tenant, the Dilawri Group, is the largest automotive dealership group in Canada, representing virtually every major automotive brand. The interests of the REIT and Dilawri are strategically aligned through Dilawri’s 26.0% effective interest in the REIT.

Excellent Leasing Profile

The REIT’s portfolio has a weighted average lease term of approximately 12.6 years (as at Sept. 30, 2020). Leases are structured as triple-net leases under which the tenant is responsible for all costs relating to repair and maintenance, realty taxes, property insurance, utilities and non-structural capital improvements. Almost all of the REIT’s property leases include fixed rent escalators, providing for consistent revenue growth.

Attractive Cash Distributions

The REIT is currently paying monthly cash distributions of $0.067 per Unit, representing $0.80 per Unit on an annualized basis.

Experienced Executive Management and Strong Independent Board

The REIT’s President and Chief Executive Officer, Milton Lamb, has over 25 years of experience in the commercial real estate industry and Chief Financial Officer, Andrew Kalra, has over 20 years of experience in finance, including more than 14 years of experience in the automotive industry. The REIT’s Board, the majority of whom are independent, has extensive collective experience in the automotive and real estate industries, capital markets and corporate governance.

Portfolio Diversification by Cash NOI

Portfolio Diversification by GLA

Percentage of Cash NOI from Dealership Properties by Automotive Brand Segment

As at December 31, 2019