Message from the CEO

Dear All Island Equity REIT Unitholders,

All Island Equity REIT (the Trust) is off to a successful start in 2024. The Trust’s strategy allowed Management to capitalize on strong market fundamentals within the multifamily sector, driving positive operational and financial performance across the Trust’s income-producing portfolio. As of June 2024, Class F DRIP unitholders were rewarded with an 8.55% trailing twelve-month total return.

Net Asset Value per Unit Update

As of June 20th, 2024, the Net Asset Value (“NAV”) per Unit was increased from $17.12 to $17.20. With the increase in unit price, $100,000 invested in Class F DRIP units since inception has a value of  $208,857 yielding an annualized return of 10.55%.

Investment Strategy

Board and Management ascribe to a conservative investment approach that is focused on providing a stable, passive investment with a targeted annual return between 8% and 12%. The Trust’s primary investment region is Vancouver Island and Management intends to leverage its knowledge of the region to take advantage of opportunities to grow unitholder value.

Management’s strategy is geared towards creating optionality in our core markets and establishing a clear path to achieving accretive value growth for our unitholders:

  • Distribution: Unitholders receive an annual distribution of 3.5% of Unit value, payable quarterly.
  • Property Appreciation: By growing rental revenue, reducing operating expenses, and creating operational efficiencies, Management targets 4.5% or more in annual return growth through property appreciation.
  • Property Repositioning and Strategic Partnerships: By increasing property values through improvements to the properties such as rezoning to increase density, completing small infill developments to increase cash flow, and buying back lessee suites in our leasehold properties, Management targets 2.0% or more in annual return growth.

Since inception, Management has believed in the strength of our core markets and has committed to positively impacting these communities. As per the U-Haul Growth Index1, British Columbia was second only to Alberta in one-way U-Haul transactions in 2023. The lifestyle communities that the Trust is based in make up four of the top ten growth cities in Canada (Kelowna – 4th, Courtenay – 5th, Penticton – 6th, and Campbell River – 8th), with Victoria included in the top twenty at 18th and named the most livable city in Canada by the Globe and Mail2. The lifestyle benefits that our core communities provide continue to attract new residents and Management intends to play an important role in increasing the supply of quality rental housing and complimentary commercial space in these communities.

For the remainder of 2024, Management will seek to grow the Trust’s footprint in its core markets, especially the Comox Valley where the Trust holds 47% of its portfolio3. Our expanding influence in our core markets will enhance our ability to control our own destiny, mitigate our reliance on the external real estate market, and yield consistent returns for our unitholders.

 

References

Class F DRIP Units: Unitholders receive distributions in the form of additional units through the Distribution Reinvestment Plan (DRIP). See Offering Memorandum dated April 8, 2024 for more details.

Inception: AIE REIT was established in May 2017 with the acquisition of a $65 million portfolio in the Comox Valley, excluding two commercial properties that were sold shortly after completion.

Management: Management of All Island Equity REIT.

Net Asset Value (NAV): Aggregate value of the trust’s properties less the aggregate value of the trust’s liabilities, subject to valuation rules set and estimates made by the Trust from time to time.

Trust or AIE REIT: All Island Equity REIT, a Real Estate Investment Trust.

1 https://www.uhaul.com/Articles/About/U-Haul-Announces-Top-Canadian-Migration-Cities-And-Provinces-Of-2023-30662/

2 https://www.theglobeandmail.com/investing/article-canada-most-livable-city-victoria-bc/?login=true

3 Based on Gross Asset Value under management as at December 31, 2024