Allied Properties REIT’s strategic focus on premium urban workspace across Canada’s major metropolitan markets positions it as a compelling investment opportunity for those seeking exposure to the recovering commercial real estate sector.
A focus on knowledge-based organizations and sustainable, wellness-focused workspace aligns perfectly with evolving tenant preferences and ESG investment themes. This positions the trust to capture premium rents and maintain high occupancy levels as the market recovery continues.
Meanwhile, the stock trades at just 8.1 times the projected 2025 cash flow of $2.09 per unit, which is well below historical averages for high-quality Canadian REITs and suggests meaningful upside potential.
ALLIED PROPERTIES REAL ESTATE INVESTMENT TRUST (Toronto symbol AP.UN; www.alliedreit.com) owns 188 office buildings and nine properties under development. All are in seven urban markets—Montreal, Ottawa, Toronto, Kitchener, Calgary, Edmonton and Vancouver. The overall occupancy rate is 86.9%.
Allied aims to distinguish itself with workspace innovation—including through technology. The REIT says light harvesting has made great strides, as has fresh air delivery. Raised-floor systems have made aesthetic and practical contributions in recent years. Aesthetically, they declutter the workspace and obviate the need for drop-ceilings. Practically, they improve air circulation by pressurizing the underfloor area and depressurizing the actual work environment.
The trust’s composition remains strategically focused on three urban workspace formats: Allied Heritage, Allied Modern, and Allied Flex. This diversified approach to workspace solutions positions Allied to capture varying tenant preferences and market demands across different sectors and company sizes.
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Allied has already executed several critical strategic initiatives in 2025 that significantly strengthen its financial foundation and growth prospects. Most notably, the company completed a $400 million offering of senior unsecured debentures in April 2025, consisting of $150 million in Series L floating-rate debentures and $250 million in Series M fixed-rate debentures, both maturing in April 2027. This refinancing successfully addressed the company’s $400 million unsecured term loan that was scheduled to mature in October 2025, effectively extending the debt maturity profile and providing enhanced financial flexibility.
Dividend Stocks: Sale of non-core properties strengthens Allied’s portfolio
In 2024, Allied sold $256 million worth of its less-important properties in Montreal, Toronto, and Ottawa. It expects to sell $170 million worth of non-essential properties in 2025. The REIT also completed $745 million in acquisitions in 2024.
In the quarter ended March 31, 2025, Allied’s revenue rose 4.9%, to $150.6 million from $143.6 million a year earlier. However, higher costs and interest expenses cut cash flow by 12.4%, to $71.1 million, or $0.509 per unit, from $81.1 million, or $0.581.
Allied’s units currently yield a very high 10.6%. Meanwhile, the REIT’s units trade at just 8.1 times projected 2025 cash flow of $2.09 a unit.
Recommendation in Canadian Wealth Advisor: Allied Properties REIT is a buy.
