CAPREIT Reports Continued Growth and Strong Operating Performance in Second Quarter of 2016

TORONTO, ONTARIO–(Marketwired – Aug. 9, 2016) – Canadian Apartment Properties Real Estate Investment Trust (“CAPREIT”) (TSX:CAR.UN) announced today solid portfolio growth and strong operating and financial results for the three and six months ended June 30, 2016.

		Three Months Ended				Six Months Ended
		June 30				June 30
		2016		2015		2016		2015
Operating Revenues (000s)	$	146,656	$	130,256	$	292,294	$	259,210
Net Operating Income (“NOI”) (000s) (1)	$	91,083	$	81,276	$	175,463	$	156,100
NOI Margin (1)		62.1%		62.4%		60.0%		60.2%
Normalized Funds From Operations (“NFFO”) (000s) (1)	$	58,452	$	51,665	$	110,747	$	95,384
NFFO Per Unit – Basic (1)	$	0.455	$	0.441	$	0.864	$	0.836
Weighted Average Number of Units – Basic (000s)		128,469		117,081		128,143		114,161
NFFO Payout Ratio (1)		68.6%		69.8%		72.0%		73.5%

(1)	NOI, NFFO and NFFO per Unit are measures used by Management in evaluating operating performance. Please refer to the cautionary statements under the heading “Non-IFRS Financial Measures” and the reconciliations provided in this press release.

• Acquired 1,823 residential suites and sites in the first six months of 2016 in key target markets for total acquisition costs of $276.9 million, further strengthening and diversifying the portfolio while increasing total suite and site count to 48,609 and total assets to $7.6 billion
• Portfolio occupancy remains strong at 98.2% at quarter-end
• Average monthly rents for same residential properties up 1.9% as at June 30, 2016 compared to last year
• Portfolio growth and strong operating performance generates 12.6% and 12.8% increase in revenues for three and six months ended June 30, 2016, respectively
• Asset and property management fees for IRES rise to $2.5 million for first six months of 2016 compared to $1.4 million last year
• NOI up 12.1% and 12.4% for the three and six months ended June 30, 2016, respectively
• Continuing strong organic growth as same property NOI up 1.1% and 1.8% for the three and six months ended June 30, 2016, respectively
• NFFO up 13.1% in second quarter, 16.1% for six months ended June 30, 2016
• Continued accretive growth as NFFO per Unit for the six months ended June 30, 2016 up 3.3% despite 12% increase in the weighted average number of Units outstanding. For the three months ended June 30, 2016, basic NFFO per Unit increased by 3.2% compared to the same period last year despite an approximate 10% increase in the weighted average number of Units outstanding.
• NFFO payout ratio strengthens to 72.0% for six months ended June 30, 2016
• Closed and committed mortgage refinancings for $426.0 million to August 9, 2016, including $110.7 million for renewals of existing mortgages and $315.3 million for additional top up financing and new acquisition financing with a weighted average term to maturity of 9 years, and a weighted average interest rate of 2.46%
• Successfully completed sale of 5,126,000 Trust Units on August 3, 2016 on a bought-deal basis for aggregate gross proceeds of $165.1 million
• Management identified potential to develop 1,600 new suites on owned properties over next three years

“We continue to combine strong organic growth through stable high occupancies, increasing monthly rents and efficient property operations with accretive acquisitions that increase and diversify our revenues streams and strengthen our asset base,” commented Thomas Schwartz, President and CEO. “Our portfolio growth so far this year has enhanced our presence in key target markets and will make a solid and growing contribution to our performance going forward through the increase in our size and scale and our ability to capture operating synergies at these new properties.”

		Three Months Ended				Six Months Ended
		June 30				June 30
		2016		2015		2016		2015
Overall Portfolio Occupancy (1)						98.2%		98.2%
Overall Portfolio Average Monthly Rents (1),(2)					$	980	$	976
Operating Revenues (000s)	$	146,656	$	130,256	$	292,294	$	259,210
Annualized Net Rental Revenue Run-Rate (000s) (1),(3),(4)					$	576,172	$	494,832
Operating Expenses (000s)	$	55,573	$	48,980	$	116,831	$	103,110
NOI (000s) (4)	$	91,083	$	81,276	$	175,463	$	156,100
NOI Margin (4)		62.1%		62.4%		60.0%		60.2%
Number of Suites and Sites Acquired		1,153		140		1,823		821
Number of Suites Disposed		–		–		–		530

(1)	As at June 30.
(2)	Average monthly rents are defined as actual rents, net of vacancies, divided by the total number of suites and sites in the portfolio and do not include revenues from parking, laundry or other sources.
(3)	For a description of net rental revenue run-rate, see the Results of Operations section in the MD&A for the three and six months ended June 30, 2016.
(4)	Net rental revenue run-rate and NOI are measures used by Management in evaluating operating performance. Please refer to the cautionary statements under the heading “Non-IFRS Financial Measures” and the reconciliations provided in this press release.

Operating Revenues

For the three and six months ended June 30, 2016, total operating revenues increased by 12.6% and 12.8%, respectively, compared to the same periods last year primarily due to the contribution from acquisitions, higher same property average monthly rents, and continuing strong occupancies. For the three and six months ended June 30, 2016, ancillary revenues, such as parking, laundry and antenna income, as a percentage of total operating revenues were 5.3% and 5.3%, respectively, compared to 5.6% and 5.4%, for the same periods last year.

CAPREIT’s annualized net rental revenue run-rate as at June 30, 2016 increased to $576.2 million, up 16.4% from $494.8 million as at June 30, 2015 primarily due to acquisitions completed within the last twelve months and strong increases in average monthly rents on properties owned prior to June 30, 2015. Net rental revenue run-rate net of dispositions for the twelve months ended June 30, 2016 was $536.9 million (2015 – $483.1 million).

Portfolio Average Monthly Rents (“AMR”)
		Total Portfolio						Properties Owned Prior to June 30, 2015
As at June 30,		2016			2015			2016			2015
		AMR	Occ. %		AMR	Occ. %		AMR	Occ. %		AMR	Occ. %
Average Residential Suites	$	1,076	98.2	$	1,088	98.0	$	1,109	98.2	$	1,088	98.0
Average MHC Land Lease Sites	$	372	98.3	$	360	99.0	$	371	98.3	$	360	99.0
Overall Portfolio Average	$	980	98.2	$	976	98.2	$	995	98.2	$	976	98.2

Overall average monthly rents for the stabilized residential suite portfolio (properties owned prior to June 30, 2015) increased 1.9% to $1,109 at June 30, 2016 from $1,088 at June 30, 2015. The increases were due primarily to a combination of ongoing successful sales and marketing strategies, above guideline rent increases, and continued strength in the residential rental sector in the majority of CAPREIT’s regional markets. Occupancy for the stabilized residential suite portfolio increased to 98.2% as at June 30, 2016 compared to 98.0% for the same period last year.

For the MHC land lease portfolio, average monthly rents increased to $372 as at June 30, 2016, compared to $360 as at June 30, 2015 while occupancy remained strong at 98.3% compared to 99.0% for the same period last year. Management believes MHC land lease sites provide secure and stable cash flows due to long-term tenancies, high occupancies, steady increases in average monthly rents, and significantly lower capital and maintenance costs.

Suite Turnovers and Lease Renewals
For the Three Months Ended June 30,	2016			2015
		Change in AMR	% Turnovers & Renewals (1)		Change in AMR	% Turnovers & Renewals (1)
	$	%		$	%
Suite Turnovers	6.7	0.6	6.6	20.8	1.9	6.7
Lease Renewals	20.5	1.9	19.8	22.3	2.0	20.7
Weighted Average of Turnovers and Renewals	17.0	1.5		22.0	2.0
For the Six Months Ended June 30,	2016			2015
		Change in AMR	% Turnovers & Renewals (1)		Change in AMR	% Turnovers & Renewals (1)
	$	%		$	%
Suite Turnovers	(7.3)	(0.7)	12.2	16.5	1.5	12.8
Lease Renewals	22.0	2.0	34.2	23.1	2.1	36.3
Weighted Average of Turnovers and Renewals	14.3	1.3		21.4	1.9

(1)	Percentage of suites turned over or renewed during the period based on the total number of residential suites (excluding co-ownerships) held at the end of the period.

Suite turnovers in the residential suite portfolio (excluding co-ownerships) during the three months ended June 30, 2016 resulted in average monthly rent increasing by approximately $7 or 0.6% per suite compared to an increase of approximately $21 or 1.9% in the same period last year. For the six months ended June 30, 2016, suite turnovers resulted in average monthly rent decreasing by approximately $7 or 0.7% compared to an increase of approximately $17 or 1.5% in the same period last year primarily due to strategically reduced rents in the Alberta and Saskatchewan rental markets to increase occupancy and higher unit turnover than in previous years, offset by the strong rental markets of British Columbia and Ontario.

During 2016, Management made a strategic decision to reduce rents in Alberta and Saskatchewan in order to increase occupancies and reduce turnovers in these regions. Alberta and Saskatchewan have been facing increased pressure due to low energy prices resulting in a weaker economy in these regions than in the rest of Canada. Not including Alberta and Saskatchewan, average monthly rents increased strongly by approximately $34 or 3.1% and $34 or 3.2%, for the three and six months ended June 30, 2016, respectively, compared to an increase of $27 or 2.5% and $22 or 2.1% respectively for the same period last year, primarily due to the strong rental markets of British Columbia and Ontario.

Pursuant to Management’s focus on increasing overall portfolio rents for the three months ended June 30, 2016 average monthly rents on lease renewals increased by approximately $20 or 1.9% per suite compared to an increase of approximately $22 or 2.0% for the same period last year. For the six months ended June 30, 2016, average monthly rents on lease renewals increased by approximately $22 or 2.0%, compared to an increase of approximately $23 or 2.1% for the same period last year. The lower rate of growth in average monthly rents on lease renewals during the period is due primarily to the strategically reduced rents in Alberta to increase occupancy, offset by higher guideline increases for 2016 (Ontario – 2.0%, British Columbia – 2.9%), compared to the permitted guideline increases in 2015 (Ontario – 1.6%, British Columbia – 2.5%), and by increases due to above guideline increases (“AGI”) achieved in Ontario. Increased portfolio diversification helped mitigate geographical risk in particular areas of Canada. Management continues to pursue applications in Ontario for AGIs where it believes increases above the annual guideline are supported by market conditions to raise average monthly rents on lease renewals. For 2017, the permitted guideline increase in Ontario has been set to 1.5%.

Operating Expenses
			Three Months Ended						Six Months Ended
			June 30						June 30
($ Thousands)			2016	%(1)		2015	%(1)		2016	%(1)		2015	%(1)
Operating Expenses
	Realty Taxes	$	16,182	11.0	$	14,519	11.1	$	32,189	11.0	$	29,184	11.3
	Utilities		13,443	9.2		11,169	8.6		32,386	11.1		29,004	11.2
	Other (2)		25,948	17.7		23,292	17.9		52,256	17.9		44,922	17.3
Total Operating Expenses		$	55,573	37.9	$	48,980	37.6	$	116,831	40.0	$	103,110	39.8

(1)	As a percentage of total operating revenues.
(2)	Comprises R&M, wages, general and administrative, insurance, advertising, and legal costs.

Operating Expenses

Overall operating expenses as a percentage of operating revenues increased to 37.9% and 40.0%, respectively, for the three and six months ended June 30, 2016 compared to 37.6% and 39.8%, respectively, for the same periods last year, due to higher utility costs for the three months ended June 30, 2016, and higher R&M expenditures and wages for the six months ended June 30, 2016.

Net Operating Income

For the three months ended June 30, 2016, NOI increased by $9.8 million or 12.1%, and the NOI margin remained strong at 62.1% compared to 62.4% for the same period last year. For the six months ended June 30, 2016, NOI increased by $19.4 million or 12.4%, and the NOI margin remained strong at 60.0% compared to 60.2% last year.

For the three and six months ended June 30, 2016, operating revenues for stabilized suites and sites increased 1.4% and 1.8% respectively, while operating expenses increased 1.8% and 1.7%, respectively, compared to the same periods last year. As a result, for the three and six months ended June 30, 2016, stabilized NOI increased by 1.1% and 1.8%, respectively, compared to the same periods last year, showing the positive effects of CAPREIT’s geographic diversification across Canada and proven property management programs.

NON-IFRS FINANCIAL MEASURES

		Three Months Ended				Six Months Ended
		June 30,				June 30,
		2016		2015		2016		2015
NFFO (000s)	$	58,452		51,665	$	110,747	$	95,384
NFFO Per Unit – Basic	$	0.455	$	0.441	$	0.864	$	0.836
Cash Distributions Per Unit	$	0.308	$	0.302	$	0.613	$	0.597
NFFO Payout Ratio		68.6%		69.8%		72.0%		73.5%
NFFO Effective Payout Ratio		45.5%		44.4%		48.0%		48.8%

For the six months ended June 30, 2016, basic NFFO per Unit increased by 3.3% compared to the same period last year despite the approximate 12% increase in the weighted average number of Units outstanding due to successful equity offerings completed in March 2015 and October 2015. For the three months ended June 30, 2016, basic NFFO per Unit increased by 3.2% compared to the same period last year despite the approximate 10% increase in the weighted average number of Units outstanding.

LIQUIDITY AND LEVERAGE

As at June 30,	2016	2015
Total Debt to Gross Book Value	47.02%	43.71%
Total Debt to Gross Historical Cost (1)	57.12%	54.22%
Total Debt to Total Capitalization	45.28%	45.30%
Debt Service Coverage Ratio (times) (2)	1.63	1.60
Interest Coverage Ratio (times) (2)	3.01	2.88
Weighted Average Mortgage Interest Rate (3)	3.28%	3.57%
Weighted Average Mortgage Term to Maturity (years)	6.5	6.2

(1)	Based on historical cost of investment properties.
(2)	Based on the trailing four quarters ended June 30, 2016.
(3)	Weighted average mortgage interest rate includes deferred financing costs and fair value adjustments on an effective interest basis. Including the amortization of the realized component of the loss on interest rate hedge settlement of $32.5 million included in Accumulated Other Comprehensive Loss (”AOCL”), the effective portfolio weighted average interest rate at June 30, 2016 would be 3.39% (June 30, 2015 – 3.72%).

Financial Strength

Management believes CAPREIT’s strong balance sheet and liquidity position will enable it to continue to take advantage of acquisition and property capital investment opportunities over the long term.

CAPREIT is achieving its financing goals as demonstrated by the following key indicators:

• Total debt to gross book value ratio remained strong at 47.0% as at June 30, 2016 compared to 43.7% for the same period last year;
• Debt service and interest coverage as at June 30, 2016 improved to 1.63 times and 3.01 times, respectively, compared to 1.60 times and 2.88 times last year;
• As at June 30, 2016, 96.5% (June 30, 2015 – 95.9%) of CAPREIT’s mortgage portfolio was insured by the Canada Mortgage and Housing Corporation (“CMHC”), excluding the mortgages on CAPREIT’s MHC land lease sites and Euro LIBOR borrowings, resulting in improved spreads on mortgages and lower overall interest costs than conventional mortgages.
• The effective portfolio weighted average interest rate on mortgages has steadily declined to 3.28% as at June 30, 2016 from 3.57% as at June 30, 2015, resulting in significant potential interest rate savings in future years;
• Management expects to raise between $275 million and $325 million in total mortgage renewals and refinancings in 2016;
• The weighted average term to maturity of the mortgage portfolio increased to 6.5 years as at June 30, 2016 compared to 6.2 years at June 30, 2015;
• As at June 30, 2016, CAPREIT has investment properties with a fair value of $266.3 million not encumbered by mortgages and securing only the Acquisition and Operating Facility. CAPREIT intends to maintain unencumbered investment properties with an aggregate fair value in the range of $150 and $180 million over the long term.
• On July 11, 2016, CAPREIT announced it had agreed to sell, subject to regulatory approval, 4,660,000 Units for $32.20 per Unit for aggregate gross proceeds of $150.1 million on a bought-deal basis with an over-allotment option. The transaction closed on August 3, 2016, and under the over-allotment option, 466,000 additional Units were also issued on August 3, 2016, for gross proceeds of $15.0 million. CAPREIT used the net proceeds of the offering to repay a portion of its borrowings under its Acquisition and Operating Facility.
• Effective June 30, 2016, CAPREIT amended its credit agreement which increased to $505.0 million and added an additional lender in the syndicate. The Credit Facilities includes the amended $440.0 million Acquisition and Operating Facility and the existing $65.0 million non-revolving term credit facility.

Property Capital Investments

During the six months ended June 30, 2016, CAPREIT made property capital investments (excluding disposed properties, head office assets, tenant improvements and signage) of $70.7 million as compared to $58.2 million in the same period last year. For the full 2016 year, CAPREIT expects to complete property capital investments of approximately $170 million to $180 million, including approximately $92 million targeted at acquisitions completed since January 1, 2011, and approximately $21 million in high-efficiency boilers and other energy-saving initiatives.

Property capital investments include suite improvements, common areas and equipment, which generally tend to increase NOI more quickly. CAPREIT also continues to invest in energy-saving initiatives, including boilers, energy-efficient lighting systems, and water-saving programs, which permit CAPREIT to mitigate potentially higher increases in utility and R&M costs and significantly improve overall portfolio NOI.

Subsequent Events

On July 27, 2016, CAPREIT completed the disposition of a mid-tier property consisting 145 apartment suites located in Montréal, Québec for a sale price of approximately $25.0 million and a mortgage assumed by the purchaser of approximately $12.1 million with a term to maturity of March 2025 and a stated interest rate of 2.94%. CAPREIT used the net proceeds of the sale to partially repay the Acquisition and Operating Facility.

On August 3, 2015, CAPREIT closed its equity issue and sale of 5,126,000 Trust Units (including over allotment) which was previously announced on July 11, 2016, for $32.20 per Unit for aggregate gross proceeds of $165.1 million. The offering was sold through a syndicate of underwriters led by RBC Capital Markets on a bought-deal basis. CAPREIT used the net proceeds of the offering to partially repay the Acquisition and Operating Facility.

Additional Information

More detailed information and analysis is included in CAPREIT’s unaudited condensed consolidated interim financial statements and MD&A for the three and six months ended June 30, 2016, which have been filed on SEDAR and can be viewed at www.sedar.com under CAPREIT’s profile or on CAPREIT’s website on the investor relations page at www.caprent.com or www.capreit.net.

Conference Call

A conference call hosted by Thomas Schwartz, President and CEO and the CAPREIT Management Team, will be held Wednesday, August 10, 2016 at 10:00 am EST. The telephone numbers for the conference call are: Local/International: (416) 340-2216, North American Toll Free: (866) 225-0198.

A slide presentation to accompany Management’s comments during the conference call will be available one hour and a half prior to the conference call. To view the slides, access the CAPREIT website at www.caprent.com or www.capreit.net, click on “Investor Relations” and follow the link at the top of the page. Please log on at least 15 minutes before the call commences.

The telephone numbers to listen to the call after it is completed (Instant Replay) are local/international (905) 694-9451 or North American toll free (800) 408-3053. The Passcode for the Instant Replay is 8515234#. The Instant Replay will be available until midnight, August 17, 2016. The call and accompanying slides will also be archived on the CAPREIT website at www.caprent.com or www.capreit.net. For more information about CAPREIT, its business and its investment highlights, please refer to our website at www.caprent.com or www.capreit.net.

About CAPREIT

CAPREIT owns interests in multi-unit residential rental properties, including apartments, townhomes and manufactured home communities primarily located in and near major urban centres across Canada. As at June 30, 2016, CAPREIT had owning interests in 48,609 residential units, comprised of 42,166 residential suites and 31 manufactured home communities (“MHC”) comprising 6,443 land lease sites. For more information about CAPREIT, its business and its investment highlights, please refer to our website at www.caprent.com or www.capreit.net and our public disclosure which can be found under our profile at www.sedar.com.

Non-IFRS Financial Measures

CAPREIT prepares and releases unaudited quarterly and audited consolidated annual financial statements prepared in accordance with IFRS. In this and other earnings releases and investor conference calls, as a complement to results provided in accordance with IFRS, CAPREIT also discloses and discusses certain non-IFRS financial measures, including Net Rental Revenue Run-Rate, NOI, FFO, NFFO and applicable per Unit amounts and payout ratios. These non-IFRS measures are further defined and discussed in the MD&A released on August 9, 2016, which should be read in conjunction with this press release. Since Net Rental Revenue Run-Rate, NOI, FFO and NFFO are not determined by IFRS, they may not be comparable to similar measures reported by other issuers. CAPREIT has presented such non-IFRS measures as Management believes these non-IFRS measures are relevant measures of the ability of CAPREIT to earn and distribute cash returns to Unitholders and to evaluate CAPREIT’s performance. A reconciliation of Net Income and such non-IFRS measures including Adjusted Funds From Operations (“AFFO”) is included in this press release. These non-IFRS measures should not be construed as alternatives to net income (loss) or cash flow from operating activities determined in accordance with IFRS as an indicator of CAPREIT’s performance.

Cautionary Statements Regarding Forward-Looking Statements

Certain statements contained, or contained in documents incorporated by reference, in this press release constitute forward-looking information within the meaning of securities laws. Forward-looking information may relate to CAPREIT’s future outlook and anticipated events or results and may include statements regarding the future financial position, business strategy, budgets, litigation, projected costs, capital investments, financial results, taxes, plans and objectives of or involving CAPREIT. Particularly, statements regarding CAPREIT’s future results, performance, achievements, prospects, costs, opportunities and financial outlook, including those relating to acquisition and capital investment strategy and the real estate industry generally, are forward-looking statements. In some cases, forward-looking information can be identified by terms such as “may”, “will”, “should”, “expect”, “plan”, “anticipate”, “believe”, “intend”, “estimate”, “predict”, “potential”, “continue” or the negative thereof, or other similar expressions concerning matters that are not historical facts. Forward-looking statements are based on certain factors and assumptions regarding expected growth, results of operations, performance and business prospects and opportunities. In addition, certain specific assumptions were made in preparing forward-looking information, including: that the Canadian and Irish economies will generally experience growth, however, may be adversely impacted by the global economy; that inflation will remain low; that interest rates will remain low in the medium term; that Canada Mortgage and Housing Corporation (“CMHC”) mortgage insurance will continue to be available and that a sufficient number of lenders will participate in the CMHC-insured mortgage program to ensure competitive rates; that the Canadian capital markets will continue to provide CAPREIT with access to equity and/or debt at reasonable rates; that vacancy rates for CAPREIT properties will be consistent with historical norms; that rental rates will grow at levels similar to the rate of inflation on renewal; that rental rates on turnovers will remain stable; that CAPREIT will effectively manage price pressures relating to its energy usage; and, with respect to CAPREIT’s financial outlook regarding capital investments, assumptions respecting projected costs of construction and materials, availability of trades, the cost and availability of financing, CAPREIT’s investment priorities, the properties in which investments will be made, the composition of the property portfolio and the projected return on investment in respect of specific capital investments.
Although the forward-looking statements contained in this press release are based on assumptions, Management believes they are reasonable as of the date hereof; however there can be no assurance actual results will be consistent with these forward-looking statements, and they may prove to be incorrect. Forward-looking statements necessarily involve known and unknown risks and uncertainties, many of which are beyond CAPREIT’s control, that may cause CAPREIT or the industry’s actual results, performance, achievements, prospects and opportunities in future periods to differ materially from those expressed or implied by such forward-looking statements. These risks and uncertainties include, among other things, risks related to: reporting investment properties at fair value, real property ownership, leasehold interests, co-ownerships, investment restrictions, operating risk, energy costs and hedging, environmental matters, insurance, capital investments, indebtedness, interest rate hedging, foreign operation and currency risks, taxation, harmonization of federal goods and services tax and provincial sales tax, land transfer tax, government regulations, controls over financial accounting, legal and regulatory concerns, the nature of units of CAPREIT (“Trust Units”), Preferred Units, and units of CAPREIT’s subsidiary, CAPREIT Limited Partnership (“Exchangeable Units”) (collectively, the “Units”), unitholder liability, liquidity and price fluctuation of Units, dilution, distributions, participation in CAPREIT’s distribution reinvestment plan, potential conflicts of interest, dependence on key personnel, general economic conditions, competition for residents, competition for real property investments, continued growth and risks related to acquisitions. There can be no assurance the expectations of CAPREIT’s Management will prove to be correct. These risks and uncertainties are more fully described in regulatory filings, including CAPREIT’s Annual Information Form, which can be obtained on SEDAR at www.sedar.com, under CAPREIT’s profile, as well as under Risks and Uncertainties section of the MD&A released on August 9, 2016. The information in this press release is based on information available to Management as of August 9, 2016. Subject to applicable law, CAPREIT does not undertake any obligation to publicly update or revise any forward-looking information.

SOURCE: Canadian Apartment Properties Real Estate Investment Trust

SELECTED FINANCIAL INFORMATION
Condensed Balance Sheets
As at		June 30, 2016		December 31, 2015
($ Thousands)
Investment Properties	$	7,309,390	$	6,863,140
Total Assets		7,568,528		7,102,828
Mortgages Payable		3,366,541		3,097,773
Bank Indebtedness		213,662		168,211
Total Liabilities		3,770,214		3,442,875
Unitholders’ Equity		3,798,314		3,659,953

Condensed Income Statements
			Three Months Ended				Six Months Ended
			June 30,				June 30,
($ Thousands)			2016		2015		2016		2015
Net Operating Income			91,083		81,276		175,463		156,100
	Trust Expenses		(5,865)		(5,337)		(16,945)		(11,801)
	Unrealized Gain on Remeasurement of Investment Properties		48,995		103,230		94,837		134,355
	Realized Loss on Disposition of Investment Properties		–		–		–		(639)
	Remeasurement of Exchangeable Units		(690)		258		(1,019)		(398)
	Unit-based Compensation (Expenses) Recoveries		(13,240)		3,782		(20,490)		(11,196)
	Interest on Mortgages Payable and Other Financing Costs		(27,572)		(25,260)		(54,833)		(50,912)
	Interest on Bank Indebtedness		(1,444)		(420)		(2,858)		(1,329)
	Interest on Exchangeable Units		(49)		(48)		(98)		(96)
	Other Income		6,312		3,904		8,965		6,146
	Amortization		(1,102)		(678)		(1,920)		(1,321)
	Severance and Other Employee Costs		–		–		–		(2,417)
	Unrealized and Realized (Loss) Gain on Derivative Financial Instruments		(704)		188		(851)		216
	Dilution Loss on Equity Accounted Investments		–		–		–		(4,346)
	Gain (Loss) on Foreign Currency Translation		2,657		(1,777)		4,228		(377)
Net Income			98,381		159,118		184,479		211,985
Other Comprehensive Income		$	186	$	1,903	$	262	$	3,463
Comprehensive Income		$	98,567	$	161,021	$	184,741	$	215,448

Condensed Statements of Cash Flows
				Three Months Ended				Six Months Ended
				June 30,				June 30,
				2016		2015		2016		2015
($ Thousands)
Cash Provided By Operating Activities:
	Net Income		$	98,381	$	159,118	$	184,479	$	211,985
	Items in Net Income Not Affecting Cash:
		Changes in Non-cash Operating Assets and Liabilities		(8,198)		(18,226)		(16,010)		(25,472)
		Realized and Unrealized Gain on Remeasurements		(47,601)		(103,676)		(92,967)		(133,534)
		Unit-based Compensation Expenses (Recoveries)		13,240		(3,782)		20,490		11,196
		Items Related to Financing and Investing
		Activities		26,527		24,051		49,987		47,316
		Other		379		4,042		1,441		9,258
Cash Provided By Operating Activities				82,728		61,527		147,420		120,749
Cash Used In Investing Activities
	Acquisitions			(197,054)		(18,489)		(252,065)		(216,987)
	Capital Investments			(44,006)		(34,696)		(77,284)		(62,337)
	Acquisition of investments			–		–		–		(32,305)
	Dispositions			–		–		–		24,004
	Other			(741)		364		2,739		763
Cash Used In Investing Activities				(241,801)		(52,821)		(326,610)		(286,862)
Cash Provided (Used) By Financing Activities
	Mortgages, Net of Financing Costs			212,081		25,132		237,102		205,272
	Bank Indebtedness			(927)		8,706		45,451		(99,838)
	Interest Paid			(26,947)		(24,406)		(53,850)		(49,475)
	Proceeds on Issuance of Units			1,208		4,720		3,831		156,645
	Distributions, Net of DRIP and Other			(26,342)		(22,858)		(53,344)		(46,491)
Cash Provided (Used) By Financing Activities				159,073		(8,706)		179,190		166,113
Changes in Cash and Cash Equivalents During the Period				–		–		–		–
Cash and Cash Equivalents, Beginning of Period				–		–		–		–
Cash and Cash Equivalents, End of Period			$	–	$	–	$	–	$	–

SELECTED NON-IFRS FINANCIAL MEASURES
Reconciliation of Net Income to FFO and to NFFO
			Three Months Ended				Six Months Ended
			June 30,				June 30,
			2016		2015		2016		2015
($ Thousands, except per Unit amounts)
Net Income		$	98,381	$	159,118	$	184,479	$	211,985
Adjustments:
	Unrealized Gain on Remeasurement of Investment Properties		(48,995)		(103,230)		(94,837)		(134,355)
	Realized Loss on Disposition of Investment Properties		–		–		–		639
	Remeasurement of Exchangeable Units		690		(258)		1,019		398
	Remeasurement of Unit-based Compensation Liabilities		11,991		(5,025)		18,013		8,790
	Interest on Exchangeable Units		49		48		98		96
	(Gain) Loss on Foreign Currency Translation		(2,657)		1,777		(4,228)		377
	FFO Adjustment for Income from Equity Accounted Investments		(3,595)		(2,099)		(3,595)		(2,099)
	Unrealized and Realized Loss (Gain) on Derivative Financial Instruments		704		(188)		851		(216)
	Dilution Loss on Equity Accounted Investments		–		–		–		4,346
	Amortization of Property, Plant and Equipment		1,102		678		1,920		1,321
FFO		$	57,670	$	50,821	$	103,720	$	91,282
Adjustments:
	Amortization of Loss from AOCL to Interest and Other Financing Costs		782		844		1,553		1,685
	Acquisition Research Costs(4)		–		–		5,474		–
	Severance and Other Employee Costs		–		–		–		2,417
NFFO		$	58,452	$	51,665	$	110,747	$	95,384
	NFFO per Unit – Basic	$	0.455	$	0.441	$	0.864	$	0.836
	NFFO per Unit – Diluted	$	0.449	$	0.435	$	0.853	$	0.822
	Total Distributions Declared (1)	$	40,120		36,054	$	79,750	$	70,076
	NFFO Payout Ratio (2)		68.6%		69.8%		72.0%		73.5%
	Net Distributions Paid (1)	$	26,623	$	22,938	$	53,191	$	46,534
	Excess NFFO Over Net Distributions Paid	$	31,829	$	28,727	$	57,556	$	48,850
	Effective NFFO Payout Ratio (3)		45.5%		44.4%		48.0%		48.8%

(1)	For a description of distributions declared and net distributions paid, see the Non-IFRS Financial Measures section in the MD&A for the three and six months ended June 30, 2016.
(2)	The payout ratio compares distributions declared to NFFO.
(3)	The effective payout ratio compares net distributions paid to NFFO.
(4)	Expenses incurred relates to transactions that were not completed included in trust expenses.

Reconciliation of NFFO to AFFO
			Three Months Ended				Six Months Ended
			June 30				June 30
			2016		2015		2016		2015
($ Thousands, except per Unit amounts)
NFFO		$	58,452	$	51,665	$	110,747	$	95,384
Adjustments:
	Provision for Maintenance Property Capital Investments (1)		(4,559)		(3,913)		(9,061)		(7,825)
	Amortization of Fair Value on Grant Date of Unit-based Compensation		1,249		1,243		2,477		2,406
AFFO		$	55,142	$	48,995	$	104,163	$	89,965
	AFFO per Unit – Basic	$	0.429	$	0.418	$	0.813	$	0.788
	AFFO per Unit – Diluted	$	0.423	$	0.412	$	0.802	$	0.776
	Distributions Declared (2)	$	40,120	$	36,054	$	79,750	$	70,076
	AFFO Payout Ratio (3)		72.8%		73.6%		76.6%		77.9%
	Net Distributions Paid (2)	$	26,623	$	22,938	$	53,191	$	46,534
	Excess AFFO over Net Distributions Paid	$	28,519	$	26,057	$	50,972	$	43,431
	Effective AFFO Payout Ratio (4)		48.3%		46.8%		51.1%		51.7%

(1)	An industry based estimate (see the Non-IFRS Measures section in the MD&A for the three and six months ended June 30, 2016).
(2)	For a description of distributions declared and net distributions paid, see the Non-IFRS Financial Measures section in the MD&A for the three and six months ended June 30, 2016.
(3)	The payout ratio compares distributions declared to AFFO.
(4)	The effective payout ratio compares net distributions paid to AFFO.