AVENUE LIVING – MINI MALL STORAGE PROPERTIES PRODUCT ANALYSIS

 JAN 2026

PRESENTED BY:

GEORGE HSU - Product Manager & Toronto Branch Manager

PEIXIAN QUEK - Investment Analyst

ANALYSIS REPORT 

Avenue Living Mini Mall Storage Properties (the Trust) delivered a 10.43% return in 2025, up from 8.52% in 2024, keeping it on track to achieve its long-term net target of 12– 15% annually. The stronger performance reflects strategic U.S. acquisitions, operational efficiency improvements, and facility upgrades. While the Trust has not yet reached its long-term target primarily due to near-term dilution as newly acquired properties generally take around 18 months to become accretive, its acquisition strategy and operational execution position it well to achieve these objectives over time. The Trust’s liquidity remains robust, with $155 million in total available liquidity as of 31 December 2025, sufficient to cover $97 million in combined net distributions and redeemed units over the past year. Key analysis findings are summarized below. 

• Revenue growth supported by strong pricing power and property enhancements. The Trust’s weighted average occupancy increased to 87.3% in FY25 (from 86.3% in FY24), while Revenue Per Available Foot (RevPAF) rose nearly 20% to $18.03 (from $15.03). These results reflect not only higher unit occupancy but also materially improved pricing, highlighting the Trust’s pricing power and management’s effectiveness in delivering value-add property improvements. Revenue growth outpaced operating expenses, demonstrating efficient cost management. Geographically, growth was driven primarily by the U.S. portfolio, where average rents rose nearly 30% year-over-year, markedly outperforming the modest 2.9% increase in Canada, emphasizing the U.S. market as the primary engine of returns. 

• Aggressive expansion targeting scale and underpenetrated markets. In FY25, the Trust deployed $810.2 million toward acquisitions and facility upgrades, aiming to leverage scale advantages and strengthen its position in underpenetrated markets. Increased scale and market consolidation enhance the Trust’s ability to compete effectively with smaller operators, who often sacrifice margins and trigger local price competition. This expansion was supported by $289 million in new unit issuances in 2025 and a $750 million unsecured debt offering. The Trust’s loan-to-value (LTV) ratio rose to 48.9% from 39.1% in FY24, primarily reflecting a temporary shift in capital structure following the optimization of corporate bond issuance and bank borrowings.

• High growth powered by strong cash generation. The Trust’s funds from operations (FFO) increased 43.9% year-over-year, outpacing revenue growth by 11.6%, highlighting significant margin expansion and enhanced earnings capacity. Total assets and liabilities also grew materially, reflecting the Trust’s active acquisition and financing strategy. Despite the modest increase in leverage, the Trust’s strong recurring rental cash flows, robust cash position, and ongoing access to capital markets underpin its financial resilience. As of 31 December 2025, the Trust had approximately $155 million in total available liquidity, consisting of a roughly even mix of cash on hand and undrawn credit facilities, as per management. 

• What risks deserve our close watch? We identify four key risks that warrant attention. First, competition risk: near-term performance may be pressured in certain markets, though the Trust’s scale, brand, technology, and access to capital provide resilience. Second, acquisition risk: the rapid pace and scale of expansion could likely drag near-term returns if development timelines are delayed or newly acquired assets take longer to stabilize. Third, liquidity and return optimization risk: balancing sufficient liquidity with the goal of maximizing investment returns presents an ongoing trade-off. Fourth, unitholder concentration risk: Class W/W-U unitholders, holding approximately 72% of total outstanding units, have substantial influence over the Trust’s decision-making.

RETURNS: ON TRACK TO MEET LONG-TERM TARGET, PROMISING OUTLOOK AHEAD 

Avenue Living Mini Mall Storage Properties (The Trust) has delivered a 10.43% return in 2025, which is on track to deliver its long-term annual target of 12-15%, net of fees. We note that the Trust’s return was higher than that of the same period last year, which we believe can be attributed to (1) strategic acquisition efforts in the U.S. resulting in a 38.7% growth YoY in the portfolio amounting to 4 million square feet, and in turn leading to a 50% increase in revenue generated, (2) pursuit of operational excellence and innovation to achieve same-store revenue and net operating income (NOI) growth of 7.7% and 7.3% respectively, and (3) facility upgrades totaling $141.6 million aimed at strengthening brand consistency and improving the customer experience to enhance the value of the portfolio. As a result of these efforts, the Trust has increased its NAV three times during the year: first in February by 1.7% to $11.57, followed by a 1.6% increase in July to $11.76, and most recently in November to $11.94 (Class D). While the Trust has not yet achieved its 12-15% long-term target return in 2025 primarily due to near-term return dilution and newly acquired properties typically requiring approximately 18 months to become accretive, the progress made in acquisitions and operational execution positions the Trust well to deliver on its long-term return objectives. 

BUSINESS UPDATES: ACQUISITIONS LAYING THE FOUNDATION FOR FUTURE PERFORMANCE GROWTH 

The Trust’s recent operating performance has yet to fully reflect the scale of its portfolio expansion, as newly acquired properties typically require time to become meaningfully accretive. However, they represent a critical foundation for future growth. Management indicates that acquisitions generally take approximately 18 months to contribute to performance, reflecting the completion of renovations and lease-up activities. This near-term lag occurs within a supportive industry environment. The Yardi Matrix September 2025 National Self Storage Report highlights continued growth in self-storage demand. According to the 2025 Self Storage Demand Study, household usage has increased to 12.6% of total households, up from 11.1% in 2022, driven by space constraints and a trend toward longer-term tenancies. At the same time, supply growth is moderating as new construction slows following a prior surge, while structural tailwinds including population growth and housing affordability pressures in the U.S. and Canada continue to underpin demand. North America remains the largest global self-storage market, representing 47% of total market share, with a projected compound annual growth rate of 5.5% from 2025 to 2030 and expected revenues of US$37.7 billion by 2030. 

Given these favorable fundamentals, the Trust has embarked on an expansion strategy by deploying $667.3 million towards acquisitions of U.S. primary and secondary markets, alongside a $141.6 million investment towards facility upgrades. These initiatives help enhance asset quality, improve operational efficiency, and elevate brand recognition to support a positive medium- to long-term outlook. 

Focusing self-storage growth on the U.S. 

The Trust increased its geographic exposure to the U.S., acquiring 2.5 million square feet over the course of the financial year with 90% of the acquisitions in primary markets, defined as major metros with a population of more than 950,000 citizens. Management has said that self-storage is primarily focused on Sunbelt markets, and considers them as flagship markets given their population size. We believe this focus on the U.S. can help provide diversification to the Trust’s portfolio, and deliver more growth given the higher NOI and revenue generated in the U.S. 

As of 30 November 2025, The Trust now manages 12.9 million square feet across more than 270 facilities, representing an increase of 38.7% YoY. The bulk of the increase in square feet managed was due to acquisitions in markets such as Atlanta, New Orleans and Georgia, supporting management’s comments on focusing their growth efforts in Sunbelt states. According to Cushman & Wakefield, the Sunbelt continues to lead U.S. population growth. In 2024, the South region expanded by 1.8%, outpacing the Northeast (1.0%), West (0.9%), and Midwest (0.8%). Thirteen Sunbelt cities ranked among the 15 fastest-growing large Metropolitan Statistical Areas, with three states occupying the top 10 positions. Orlando led the growth at 2.7% year-over-year, followed closely by Houston and Raleigh, each at 2.6%. 

New unit issuance and balance sheet supporting the Trust’s financials 

The Trust’s Loan-to-Value (LTV) ratio currently stands at 48.9%, compared with 39.1% in FY2024. This increase primarily reflects a temporary shift in the capital structure resulting from the optimization of corporate bond issuance and bank borrowings. Portfolio growth during the period was largely driven by new unit issuances, allowing the Trust to scale its asset base while maintaining overall balance sheet stability, as evidenced by total new issuances of approximately $266.8 million in FY25 (twelve-month ending in September 2025). 

On December 1, 2025, the Trust announced the successful closing of C$750 million in senior unsecured debentures, consisting of C$450 million of Series A (bearing interest at 4.284% with a 3-year term) and C$300 million of Series B (bearing interest at 4.751% with a 5-year term). This issuance supported disciplined balance sheet management and enhanced capital structure flexibility. The Trust’s liquidity position remains robust. As of 31 December 2025, total available liquidity stood at approximately C$155 million, consisting of a roughly even mix of cash on hand and undrawn credit facilities, according to management. Proceeds from the December bond issuance were used in part to repay drawn credit facilities and to further optimize the Trust’s capital structure. 

Relative to comparable issuers such as Avenue Living Core Trust and Peakhill Capital, Mini Mall’s unsecured debentures were priced at the lowest interest rates over the past year. Despite being unsecured, this pricing reflects strong investor confidence in the Trust’s asset quality and credit profile. Additionally, from a medium to long-term perspective, the cost of this bond financing is lower than borrowing through U.S. commercial mortgages. This would thus help in reducing the Trust’s overall cost of debt, which was above 5% historically. The ability to access unsecured financing at attractive rates further underscores the strength of the Trust’s balance sheet and its prudent, disciplined approach to growth.

OPERATIONAL HIGHLIGHTS: STRONG PRICING AND PROPERTY IMPROVEMENTS BOOST REVENUES 

The Trust’s weighted average occupancy rate rose to 87.3% in FY25 from 86.3% in FY24. Revenue Per Available Foot (RevPAF) also delivered an increase of nearly 20% to $18.03 in FY25 from $15.03 in FY24. These figures indicate the Trust is not only filling more units but is doing so at materially higher rates. They also demonstrate the Trust’s pricing power, management’s ability to deliver value-add to its property portfolio, alongside effective cost control as seen in revenue growth outpacing operating expenses.

U.S. Market as a Key Driving Force Behind Returns 

Looking at the Trust’s performance by geography, rent growth was particularly strong in the U.S., with total portfolio average rents up nearly 30% YoY, materially outperforming the 2.9% increase seen in Canada. This implies that the U.S. portfolio is a key driving force behind returns, and affirms management’s decision to focus on the U.S. 

Comparing the average cap rates between the U.S. and Canada, as well as between multifamily and self-storage, we note that the Trust’s cap rate for both countries is markedly higher than the market average. This is likely because a larger portion of the Trust’s properties are second-tier or lower-tier assets, reflecting its strategy of acquiring legacy self-storage assets that require additional efforts to stabilize and lease, but are expected to generate higher returns. By contrast, national average cap rates are typically weighted toward more liquid, core assets in major markets, which generally trade at lower rates. 

We also note that cap rates in the U.S. are higher, reflecting factors such as a higher interest rate environment, a wider spectrum of investable second-tier or lower-tier assets, and differing levels of institutional competition. Importantly, these higher U.S. cap rates have not adversely affected the Trust’s asset valuation. This is partly attributable to the divergence in rent growth dynamics between Canada and the U.S., with U.S. markets exhibiting stronger near-term rental growth prospects. When combined with superior rent growth and a significantly larger addressable market, we believe the Trust’s expansion into the U.S. has the potential to enhance profitability and generate long-term value, while also diversifying growth away from its more mature Canadian operations. 

From a valuation perspective, public self-storage REITS typically trade at higher EV/ EBITDA multiples between 20-35x, whereas for privately held REITs such as Mini Mall Trust are typically between 12-15x based on the Trust. We think that this comparison between public and private self-storage REITS highlight the attractive relative value of accessing the self-storage sector through private markets. Additionally, we also believe that a potential future public listing would likely drive a natural increase in valuation multiples of the Trust.

Some Risks to Monitor Despite Strong Growth Momentum 

Despite the Trust’s strong growth momentum, there remain potential risks that warrant close monitoring. While expense growth (+28.6%) has lagged revenue growth (+32.3%), inflationary pressures across categories such as maintenance, insurance, utilities, and property taxes could compress margins if revenue growth slows. Additionally, the Trust exhibits geographic concentration due to its reliance on the U.S. market to drive rent growth, meaning that shifts in local demand, supply, or regulatory conditions could significantly impact overall performance. As a result, we will place particular focus on the performance of the Trust’s U.S. operations and the contributions of new acquisitions, which offer the potential for higher returns but also carry elevated risk. 

A declining interest rate environment typically puts downward pressure on cap rates, supporting higher real estate valuations. While the current cap rates within the Trust’s portfolio indicate potential NAV upside, the timing of this appreciation remains uncertain, as it hinges on both successful execution and prevailing market conditions. 

Lastly, given the Trust’s occupancy levels are already in the high 80% range, future growth may be more driven by increases in rental rates rather than occupancy. We will continue to closely monitor the revenue growth of the Trust moving forward. 

FINANCIAL HIGHLIGHTS: HIGH-GROWTH POWERED BY STRONG CASH GENERATION 

The Trust’s funds from operation (FFO) grew 43.9% YoY, outpacing revenue growth by 11.6% in the same time period, reflecting significant margin enhancement and improved earnings capacity. Total assets and liabilities continued to grow materially, driven primarily by the Trust’s active acquisition and financing strategy. Leverage increased as the loan-to-value ratio rose to 48.9% from 39.1%, reflecting the Trust’s temporary adjustments to its capital structure through the optimization of corporate bond issuances and bank borrowings. The ratio remains well within the Trust’s maximum limit of 70%. Notably, the weighted average cost of debt declined to 4.68% from 5.29% last year, primarily driven by the $750 million unsecured debenture issuance, demonstrating the Trust’s ability to secure favorable financing terms. It is worth noting that, from a medium- to long-term perspective, the cost of this bond financing is lower than borrowing through U.S. commercial mortgages. As a result, it would help reduce the Trust’s overall cost of debt, which has historically exceeded 5%. While the weighted average term to maturity shortened from 2.98 to 2.61 years, slightly elevating near-term refinancing risk, the overall picture remains that of a growing REIT with strong cash flow-generating capabilities.

Based on information provided by management, the Trust’s liquidity profile improved by 13.7% as of 31 December 2025. This was driven primarily by a significant increase in unused credit facilities, which rose from $17.8 million to approximately $77.5 million following the C$750 million unsecured debt offering. The decline in cash and cash equivalents mainly reflects the Trust’s property acquisition activities, particularly in the U.S., which we believe will support mid- to long-term growth prospects. 

While the Trust is temporarily operating with a working capital deficit due to its accelerated expansion strategy, we do not view this as a material concern. This assessment is supported by stable rental cash flows with potential upside, the Trust’s proven access to capital markets, and the availability of long-term debt to fund ongoing operations. Importantly, based on our discussions with management, working capital is expected to turn positive over the coming year as the Trust’s strategic focus shifts from expansion toward stabilizing existing assets. 

As of 31 December 2025, the Trust held nearly $155 million in total available liquidity, which we believe is more than sufficient to cover the combined net distributions and unit redemptions of $97 million over the past year. 

Unitholder Highlights

The Trust witnessed a strong year of growth as total net assets attributable to LP unitholders increased by 33.6% YoY in FY25 to reach $1.15 billion. This growth was driven primarily by a significant level of unit issuances totaling $266.8 million, reflecting continued robust demand from investors, along with a substantial 165.9% increase in recurring net income driven by the performance of the Trust’s U.S. and Canada operations. Additionally, reinvestments of distributions more than doubled, signaling continued confidence from existing investors. Although there was an uptick in redemptions, they were outweighed by new capital inflows, thus resulting in a 33.6% increase in ending balance. Based on information from management, total gross subscriptions (including DRIP) stood at $289 million while redemptions stood at $75 million for the whole of 2025, and $48 million and $29 million respectively for Q4 2025. 

Management’s Unit Holding Changes 

Based on our analysis of the unit holdings by management, we note that unit holdings in the Trust by C-suite management members have seen a slight increase of 5% of 8% between May 2024 to November 2025. In particular, CEO Adam Villard and Vice President Anthony Giuffre have increased the number of Trust units held during the period observed. We believe this shows a strong alignment of interests between management and investors, and also demonstrates management’s confidence in the Trust’s strategy. Other key executives of the firm have also maintained their investment with little changes. 

The employee incentive scheme is mainly awarded through Class F units. 

New Issuance by Class 

As of October 31, 2025, the Trust reported a total of 92.6 million units outstanding across all classes, reflecting a net increase of 23.9 million units (+34.8%) YoY, with corresponding value outstanding rising by C$327.6 million (+43.8%) for the CAD trust units and U$29.3 million (+42.4%) for the USD share classes between April 30, 2024 to October 31, 2025. 

In the CAD trust units, Class A, Class D and Class WB saw a stronger growth rate YoY as their share in total outstanding units have expanded. Class D in particular had recorded an increase of 4.3 million units (+102.6%) amounting to $53.5 million, while Class F and Class W units were diluted. 

In the USD trust units, Class A-U, F-U and Class WB-U saw stronger growth and gained more outstanding shares, while Class F-U and Class W-U were diluted during the year.

As outlined in the Offering Memorandum, Class W and Class W-U units are distributed through Westcourt Capital, consistent with the structure used for Avenue Living Core Trust. Westcourt Capital is a Toronto-based firm registered as a portfolio manager, exempt market dealer, and investment fund manager in the provinces of Ontario, British Columbia, Alberta and Quebec. The firm specializes in the sourcing, due diligence, structuring, and ongoing monitoring of alternative investments and has Assets Under Advisement (AUA) of over $5 billion since its founding in 2009. The firm’s client base are largely high-net-worth individuals and family offices, with an average ticket size for purchases of Class W and Class W-U units between $10 million to $20 million. 

Similarly, management does not expect investors in the Class W and Class W-U units to have significant liquidity demands on the Trust, given their long-term investment horizon and strong cash flow position.

Potential Risks to Quarterly Cash Flow Management 

The Trust experienced significant cash outflows in FY25 primarily due to its acquisition efforts, with a total of $810.2 million deployed towards investing activities particularly in property acquisitions and value-add capital expenditures. That said, the Trust’s redemption settlement period of 60 days’ notice plus 30 days for settlement allows management to plan its cash flow needs in advance. The approximately $155 million in total available liquidity also currently accounts for nearly 13% of NAV. 

Moreover, despite the cash obligations of the Trust during the year, the scale of new debt and equity capital raised was sufficient to comfortably fund redemption requests from investors, service obligations, and conduct expansion initiatives. 

However, we view this dynamic as a double-edged sword in the near term. Elevated cash balances may dilute returns due to cash drag, as management has indicated that surplus cash is currently earning approximately 3% through treasury management activities. Conversely, maintaining liquidity at overly low levels could increase the Trust’s exposure to gating risk if redemption requests exceed available liquid assets. We believe that the continued deployment of capital, together with the stabilization and development of newly acquired assets, should progressively support the Trust’s ability to achieve its long-term annual return target of 12–15%. 

RECAP OF 2025 AND OUTLOOK FOR 2026 

Avenue Living Mini Mall has seen a strong growth in 2025 thus far. The Trust has grown from $2.02 billion in January this year to $2.66 billion as of November 2025, and the firm (Avenue Living Asset Management) now manages a total of $9.19 billion across its multi-family, self-storage and agriculture funds. It also closed the largest inaugural unsecured debenture offering in Canadian real estate history, raising a total of $750 million from its offering of C$450 million in Series A and C$300 million in Series B unsecured debentures. Based on the latest prospective transaction pipeline as of December 2025 as seen below, there are a total of 2.03 million amounting to $509.3 million, with c94% of these prospective transactions in the U.S. 

Canadian Self-Storage Market Outlook 

According to Avison Young, the supply of new self-storage in Canada is projected to double year-over-year in 2026, with nearly 2.8 million square feet under construction, reflecting the market’s response to population growth over the past few years. However, this expansion may create near-term supply pressure, particularly in light of recent weakness in demand. Government restrictions on immigration have contributed to a decline in Canada’s preliminary demographic estimates in 3Q25, affecting self-storage demand and supply dynamics and potentially putting downward pressure on rental rates and occupancy in the near term. Nevertheless, long-term demand drivers including downsizing by the older population, smaller home sizes, and ongoing consumer growth are expected to continue supporting the sector. Importantly, the Trust’s continued market consolidation and increasing market share could further strengthen its pricing power and enhance operational efficiency. 

U.S. Self-Storage Market Outlook 

According to research by PwC, the U.S self-storage market had similarly seen notable supply growth, with more than 71 million square feet of space completed over the 12-month period ended 2Q25. However, construction is easing as 2Q25 marked the least amount of new space in a quarter since early 2022. This aligns with the Yardi Matrix September 2025 National Self Storage Report, which shows that supply growth is softening as new construction slows after a prior surge. Apart from favorable tailwinds such as small home sizes driving demand for self-storage, renters are also showing a stronger orientation toward longer stays and larger units, with 60% of surveyed users expecting to stay in their units for more than one year. This is a positive trend for the Trust as it supports occupancy stability, reduces operating costs associated with turnover and marketing, whilst enhancing the predictability and durability of its cash flows. Therefore, we are positive on the Trust’s performance in the coming year owing to expectations of improved revenue visibility, stable occupancy rates, and continued cash flow growth, particularly in its U.S. operations. 

Potential Risk Factors: Competition, New Acquisition, Liquidity and Return Optimization and Class W/W-U 

While we have a positive outlook towards the Trust’s performance in 2026 thanks to its flexible strategy and strong execution, we highlight four potential risks that we should not ignore. 

• Competition risk: The industry is highly fragmented, characterized by intense local competition and largely undifferentiated offerings, which often results in price-based competition and promotional discounting that can pressure rents and margins, particularly for smaller operators. In contrast, the Trust is well positioned to benefit from its scale, brand recognition, technological capabilities, and access to capital, advantages that smaller competitors often lack. Given the highly location-specific nature of demand, even modest increases in nearby supply can trigger heightened price competition. In addition, emerging alternative storage models and changes in economic or housing conditions may further intensify competitive pressures. While long-term demand fundamentals remain supportive, pricing power and near-term performance may be vulnerable in some highly competitive submarkets. 

• New acquisitions may take up to 18 months to become accretive: The Trust continues to pursue an expansion strategy aimed at leveraging its scale advantages and entering underpenetrated markets. However, the pace and size of this expansion could pressure near-term returns if development timelines are delayed or if the integration and stabilization of newly acquired assets take longer than expected. We will continue to monitor the time required for new acquisitions to become accretive, with a focus on market-level indicators such as supply additions and rent trends, alongside portfolio-level metrics including occupancy rates and operating margins. 

• Balancing liquidity and returns: Maintaining total available liquidity at approximately 13% of NAV provides the Trust with a meaningful liquidity buffer to meet redemption requests and provide short-term obligations. However, this level of liquidity may create a drag on returns given relatively low cash yields of around 3%. Conversely, holding insufficient liquidity could increase the risk of redemption gating if redemption demands exceed available liquid assets. Effectively managing this trade-off requires the management team to exercise active and disciplined capital oversight, balancing near-term liquidity needs with the pursuit of the Trust’s long-term return objectives. 

• Decision-making risk from Class W and W-U unitholders: As of November 2025, approximately 72% of the Trust’s outstanding units are in Class W and Class W-U (CAD and USD units respectively), despite ongoing dilution from other classes over the past year. According to the Offering Memorandum, these units are sold through Westcourt Capital. Therefore, Class W and Class W-U holders could wield considerable power and exert a significant influence on the Trust’s operations, particularly with respect to cash flow management. 

APPENDIX: ONGOING DUE DILIGENCE REVIEW SUMMARY TABLE – AVENUE LIVING MINI MALL

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