January 2017 Investor Presentation
Dream Hard Asset Alternatives Trust At-a-glance Dream Hard Asset Alternatives Trust (DAT) is a mutual fund trust, focused on hard asset alternative investments comprising real estate, real estate development, real estate lending and infrastructure, including renewable power. Development Renewable Power Approximately 6.4% $1 billion Implied yield - Tax effjcient distributions in gross assets Income Property Development Re-development potential Flexible 30% Debt to Gross Book Value Structure Low leverage and conservative balance sheet. Lending Portfolio Lending Portfolio Managed by Assets Dr eam Income properties Mortgages and Loans Energy and Infrastructure an experienced asset manager with a Development successful track record *Implied yield is based on fjxed distribution of $0.40 per unit and TSX closing price as at January 3, 2017. Unlike fjxed income securities, there is no obligation on DAT to distribute to unitholders any fjxed amount, and reductions in, or suspensions of, cash distributions may occur that would reduce the yield based on market price. DAT Investor Presentation | 2
Dream Hard Asset Alternatives Trust | The Manager dream.ca /alternatives Experienced Asset Manager DAT is managed by Dream. Dream started as a public company in 1996 with $500,000 of equity and has grown to its current equity value of $787 million representing an internal rate of return* of 33%. . State Street Financial Centre Toronto, Ontario DAT Investor Presentation | 3 *IRR (Internal Rate of Return) represents the discount rate of annual net cash paid out to shareholders and the equity value (including minority interest) as at September 30, 2016 over the initial investment in 2003)
Dream Hard Asset Alternatives Trust | Dream Platform Strength of Platform DAT is able to leverage all of Dream’s activities, relationships and expertise and take advantage of Dream’s experience and track record. Dream’s platform benefjts DAT by providing: Track record of value Transaction Capital markets Asset management creation expertise expertise capabilities DAT Investor Presentation | 4
Dream Hard Asset Alternatives Trust Portfolio Overview 27% Development & Investment We believe that hard asset alternative investments Holdings provide diversifjcation from the traditional asset classes available broadly to investors. 38% Income 12% properties Renewable Power 23% Lending Portfolio 23% 38% $ 683 Million in Mortgages and Loans in Portfolio Net Asset Value in Income Properties co-owned with Dream Offjce REIT and Dream Industrial REIT 27% 12% in Development & Investment Holdings in Renewable Power Assets Please see page 7 of MD&A for further information on the portfolio breakdown. DAT Investor Presentation | 5
Dream Hard Asset Alternatives Trust Diverse Portfolio with Little Exposure to Western Canada 2% 2% Other Western Canada United Kingdom 13% Eastern Canada 10% 3% British Columbia Saskatchewan 70% GTA & South Western Ontario DAT Investor Presentation | 6
Dream Hard Asset Alternatives Trust | Objectives & Benefjts DAT's Objectives Provide an opportunity for unitholders to invest in hard asset alternative investments, including real estate, real estate lending, real estate development and infrastructure including renewable power; Build and maintain a growth-oriented portfolio; Provide predictable and sustainable cash distributions to unitholders on a tax-effjcient basis; and Grow and re-position the portfolio to increase both the Adjusted Funds Available for Distribution (AFAD) and Net Asset Value (NAV) per unit over time. Benefits of Investing in Alternative Assets 4 1 Attractive Low returns correlation with traditional asset classes Alternative 3 Assets 2 Hedge against infmation Difgerent risk characteristics DAT Investor Presentation | 7
Dream Hard Asset Alternatives Trust Asset Class Characteristics Income Properties Lending Portfolio Renewable Power Development & Investment Holdings A portfolio of offjce, industrial Interest-paying mortgages and Solar and wind power projects in Participating mortgages receiv- and retail commercial real estate corporate loans. Canada and the United Kingdom able and indirect investments in properties in Canada, a majority that are operational or under con- developments and income-produc- of which are co-owned. struction. ing properties. Stability of Cash-fmow Stability of Cash-fmow Stability of Cash-fmow Income Growth (20-year fjxed contracts) Income Growth Contributes to Tax-effjciency NAV growth Contributes to Tax-effjciency Income Growth Preserves NAV Hedge Against Infmation Income Growth Hedge Against Infmation NAV Growth NAV Growth (short term loans) Hedge Against Infmation Power Purchase Agreements may be indexed to infmation DAT Investor Presentation | 8
Dream Hard Asset Alternatives Trust Potential For Net Asset Value (NAV) Increase Increasing the NAV per unit over time is a strategic focus for DAT and may be driven by: Completion of the Repositioning of the Renewable power projects development projects income properties assets becoming operational Net Asset Value* Per Segment $9.44 $9.44 $5.70 $3.63 $2.61 $2.22 $1.19 $(0.21) Net asset value “NAV” represents the net assets attributable to unitholders of the Trust, including adjustments to remove deferred income taxes payable or receivable, Deferred Unit Incentive Plan payable, and the unamortized balance of the net lending portfolio discount and mortgages payable premiums that are included in net assets on the Trust’s consolidated statements of fjnancial position. For defjnition of the non-IFRS measures, please refer to the Q3/16 MD&A. *Based on net asset value as at September 30, 2016 as disclosed in the Financial Statements. DAT Investor Presentation | 9
Dream Hard Asset Alternatives Trust Income- Producing Properties Real estate investing in income properties is West Metro Corporate Centre The West Mall | Toronto, Ontario cyclical but, historically, has provided attractive risk-adjusted returns. Compared to stocks and bonds, real estate investing generally ofgers posi- tive and stable cash fmows, attractive yields, more consistent returns in periods of market volatility, and hedging capabilities against infmation. DAT Investor Presentation | 10
Dream Hard Asset Alternatives Trust | Income-Producing Properties At-a-glance The majority of our income properties are co-owned with Dream Offjce REIT, Canada’s largest offjce REIT; and Dream Industrial REIT, Canada’s largest pure-play industrial REIT. 25 $ 505 Million Gross IFRS Asset Value Income Properties 287 2.2 Million Diversifjed Tenants Square Feet of owned GLA* 38% 86.6% of Net Asset Value Committed and In-place Occupancy 5.4 Years Weighted Average Remaining Lease Term Kamloops Regina Halifax Victoria Ottawa Fredericton Toronto & GTA London DAT Investor Presentation | 11 *at DAT’s share
Dream Hard Asset Alternatives Trust | Income-Producing Properties Active Asset Management Our strong fjnancial position and active asset management will enable us to focus on acquisition, disposition and future re-development opportunities. Debt Maturities $75.5 $73.5 $70.1 $66.3 Sussex Center Mississauga, Ontario $8 $2.5 Lease Expiries Net of Committed Renewals as a Percentage of GLA DAT Investor Presentation | 12 Debt maturities are based on total maturity balance and principal repayments as at September 30, 2016.
Dream Hard Asset Alternatives Trust | Income-Producing Properties Diversified Tenant Mix Our tenant base includes municipal, provincial, and federal governments as well as a wide range of larger, high quality international corporations. Our focus on strategic leasing should contribute to higher income potential for the properties. Tenant Number of % of Total Gross Remaining Lease GLA % of Total GLA Credit Rating* Buildings Revenue Term TD Canada Trust 2 235,907 10.8% 9.0% 6.8 AA- SNC Lavalin Inc. 3 149,262 6.9% 8.2% 5.4 BBB Government of Canada 1 76,987 3.5% 3.5% 15.9 AAA Government of B.C. 2 60,258 2.8% 2.0% 2.6 AAA Technicolor Creative Services 1 50,263 2.3% 3.0% 6.9 B Total 572,947 26.3% 25.7% 7.2 DAT Investor Presentation | 13 * Credit ratings obtained from Standard & Poor’s and Egan Jones, which may refmect the parent’s or a guarantor’s credit rating.
Dream Hard Asset Alternatives Trust Lending Portfolio Traditional real estate lending continues to be valuable by providing a base return while we seek opportunities with more desirable risk-adjusted InGastown returns. Vancouver | British Columbia In addition, we believe that maintaining an allocation to traditional real estate lending provides more certain returns during economic uncertainty. DAT Investor Presentation | 14
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