CAPREIT Reports Another Year of Strong Performance

TORONTO, ONTARIO–(Marketwired – Feb. 27, 2017) – Canadian Apartment Properties Real Estate Investment Trust (“CAPREIT”) (TSX:CAR.UN) announced today solid portfolio growth and strong operating and financial results for the year ended December 31, 2016.

		Three Months Ended								Year Ended
		December 31								December 31
		2016				2015				2016				2015
Operating Revenues (000s)	$	152,725			$	142,776			$	596,831			$	533,798
Net Rental Income (“NOI”) (000s) (1)	$	95,210			$	86,427			$	366,947			$	324,614
NOI Margin (1)		62.3	%			60.5	%			61.5	%			60.8	%
Normalized Funds From Operations (“NFFO”) (000s) (1)	$	58,860			$	52,813			$	231,808			$	200,027
NFFO Per Unit – Basic (1)	$	0.437			$	0.417			$	1.772			$	1.692
Weighted Average Number of Units – Basic (000s)		134,585				126,515				130,794				118,220
NFFO Payout Ratio (1)		72.5	%			74.7	%			70.9	%			73.1	%

(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.

2016 Highlights

• Acquired 2,552 residential suites and sites for total costs of $412.9 million, further strengthening and diversifying the portfolio
• Portfolio growth and strong operating performance generates 11.8% increase in revenues
• Average monthly rents for same residential properties up 3.3%
• Portfolio occupancy remains strong at 98.6%, up from 97.5% last year
• NOI rises 13.0% to $366.9 million with NOI margin of 61.5%, up from 60.8% last year
• NFFO up 15.9% to $231.8 million
• Continued accretive growth as NFFO per Unit up 4.7% despite reduced leverage and 11% increase in the weighted average number of Units outstanding from successful bought-deal equity offerings
• Continuing strong organic growth as same property NOI up 3.3% due to increased revenues and proven property management programs. Fourth quarter same property NOI up 5.6%
• NFFO payout ratio strengthens to 70.9%
• Closed mortgage refinancings and new financings for $635.0 million, including $130.8 million for renewals of existing mortgages and $504.2 million for additional top up financing and new acquisition financing with a weighted average term to maturity of 8.4 years, and a weighted average interest rate of 2.38%.

“2016 was another year of record operating and financial performance at CAPREIT as we continued to generate very strong organic growth while further strengthening and diversifying our property portfolio with strategic acquisitions in our key target markets,” commented Thomas Schwartz, President and CEO. “As we celebrate two decades of growth and superior performance in 2017, we are confident we have the assets, the team and the proven strategies to continue delivering stable, sustainable and growing returns to our Unitholders for years to come.”

		Three Months Ended								Year Ended
		December 31								December 31
		2016				2015				2016				2015
Overall Portfolio Occupancy (1)										98.6	%			97.5	%
Overall Portfolio Average Monthly Rents (1),(2)									$	1,003			$	963
Operating Revenues (000s)	$	152,725			$	142,776			$	596,831			$	533,798
Annualized Net Rental Revenue Run-Rate (000s) (1),(3),(4)									$	590,618			$	544,727
Operating Expenses (000s)	$	57,515			$	56,349			$	229,884			$	209,184
NOI (000s) (4)	$	95,210			$	86,427			$	366,947			$	324,614
NOI Margin (4)		62.3	%			60.5	%			61.5	%			60.8	%
Number of Suites and Sites Acquired		571				173				2,552				5,632
Number of Suites Disposed		–				–				579				530

(1)	As at December 31.
(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 year ended December 31, 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 months and year ended December 31, 2016, total operating revenues increased by 7.0% and 11.8%, 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 months and year ended December 31, 2016, ancillary revenues, such as parking, laundry and antenna income, increased 13.2% and 10.9%, respectively, compared to the same periods last year.

CAPREIT’s annualized net rental revenue run-rate as at December 31, 2016 increased to $590.6 million, up 8.4% from $544.7 million as at December 31, 2015 primarily due to acquisitions completed within the last twelve months and strong increases in average monthly rents on properties owned prior to December 31, 2015. Net rental revenue run-rate net of dispositions for the twelve months ended December 31, 2016 was $561.9 million (2015 – $503.7 million).

Portfolio Average Monthly Rents (“AMR”)
		Total Portfolio								Properties Owned Prior to December 31, 2015
As at December 31,		2016				2015					2016				2015 (1)
		AMR	Occ. %			AMR		Occ. %			AMR	Occ. %			AMR	Occ. %
Average Residential Suites	$	1,101	98.7		$	1,059		97.4		$	1,099	98.7		$	1,064	97.5
Average MHC Land Lease Sites	$	378	98.3		$	366		98.2		$	377	98.3		$	366	98.2
Overall Portfolio Average	$	1,003	98.6		$	963		97.5		$	998	98.6		$	967	97.6

(1)	Prior year’s comparable AMR and occupancy have been restated for properties disposed of since December 31, 2015.

Overall average monthly rents for the stabilized residential suite portfolio (properties owned prior to December 31, 2015) increased 3.3% to $1,099 at December 31, 2016 from $1,064 at December 31, 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 98.7% as at December 31, 2016 compared to 97.5% for last year.

For the stabilized MHC land lease portfolio, average monthly rents increased to $377 as at December 31, 2016, compared to $366 as at December 31, 2015 while occupancy remained strong at 98.3% compared to 98.2% for 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 December 31,	2016			2015
	Change in AMR		% Turnovers	Change in AMR		% Turnovers
	$	%	& Renewals (1)	$	%	& Renewals (1)
Suite Turnovers	34.8	3.1	6.0	28.3	2.6	5.5
Lease Renewals	23.1	2.1	16.5	20.5	1.9	16.3
Weighted Average of Turnovers and Renewals	26.2	2.4		22.5	2.1
For the Year Ended December 31,	2016			2015
	Change in AMR		% Turnovers	Change in AMR		% Turnovers
	$	%	& Renewals (1)	$	%	& Renewals (1)
Suite Turnovers	13.0	1.2	27.7	20.7	1.9	24.8
Lease Renewals	21.8	2.0	78.7	21.6	2.0	71.6
Weighted Average of Turnovers and Renewals	19.5	1.8		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 December 31, 2016 resulted in average monthly rent increasing by approximately $35 or 3.1% per suite compared to an increase of approximately $28 or 2.6% in last year. For the year ended December 31, 2016, suite turnovers resulted in average monthly rent increasing by approximately $13 or 1.2% compared to an increase of approximately $21 or 1.9% in last year.

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 falling energy prices resulting in a weaker economy in these regions than in the rest of Canada. Excluding Alberta and Saskatchewan, average monthly rents increased strongly by approximately $52 or 4.7% and $41 or 3.8% on suite turnovers for the three months and year ended December 31, 2016, respectively, compared to an increase of $43 or 4.0% and $29 or 2.7% on suite turnovers, respectively for 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 December 31, 2016 average monthly rents on lease renewals increased by approximately $23 or 2.1% per suite compared to an increase of approximately $21 or 1.9% for last year. For the year ended December 31, 2016, average monthly rents on lease renewals increased by approximately $22 or 2.0%, compared to an increase of approximately $22 or 2.0% for last year. The stable rate of growth in average monthly rents on lease renewals during the year 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 (see discussion in the Future Outlook section). For 2017, the permitted guideline increases in Ontario and British Columbia have been set to 1.5% and 3.7%, respectively.

Operating Expenses
			Three Months Ended								Year Ended
			December 31								December 31
($ Thousands)			2016	%(1)			2015	%(1)			2016	%(1)			2015	%(1)
Operating Expenses
	Realty Taxes	$	16,297	10.7		$	15,536	10.9		$	65,462	11.0		$	59,337	11.1
	Utilities		16,012	10.5			14,815	10.4			60,759	10.2			54,241	10.2
	Other (2)		25,206	16.5			25,998	18.2			103,663	17.3			95,606	17.9
Total Operating Expenses		$	57,515	37.7		$	56,349	39.5		$	229,884	38.5		$	209,184	39.2

(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 decreased to 37.7% and 38.5%, respectively, for the three months and year ended December 31, 2016 compared to 39.5% and 39.2%, respectively, for the same periods last year, due primarily to reduced R&M expenses in the three months ended December 31, 2016, and lower R&M and advertising expenses for the year ended December 31, 2016.

NOI

For the three months ended December 31, 2016, NOI increased by $8.8 million or 10.2%, and the NOI margin strengthened to 62.3% compared to 60.5% for last year. For the year ended December 31, 2016, NOI increased by $42.3 million or 13.0%, and the NOI margin improved to 61.5% compared to 60.8% last year.

For the three months and year ended December 31, 2016, operating revenues for stabilized suites and sites increased 2.5% and 2.0% respectively, while operating expenses decreased 2.2% and remained stable, respectively, compared to the same periods last year. As a result, for the three month and year ended December 31, 2016, stabilized NOI increased by 5.6% and 3.3%, respectively, compared to the same periods last year, showing the positive effects of CAPREIT’s geographic diversification across Canada and its proven property management programs.

NON-IFRS FINANCIAL MEASURES

		Three Months Ended								Year Ended
		December 31,								December 31,
		2016				2015				2016				2015
NFFO (000s)	$	58,860				52,813			$	231,808			$	200,027
NFFO Per Unit – Basic	$	0.437			$	0.417			$	1.772			$	1.692
Cash Distributions Per Unit	$	0.313			$	0.305			$	1.238			$	1.207
NFFO Payout Ratio		72.5	%			74.7	%			70.9	%			73.1	%
NFFO Effective Payout Ratio		48.7	%			51.4	%			47.4	%			49.4	%

CAPREIT’s track record of strong accretive growth continued in 2016 as basic NFFO per Unit increased by 4.7% for the year ended December 31, 2016 compared to last year despite the approximate 11% increase in the weighted average number of Units outstanding due to successful equity offerings completed since March 2015. For the three months ended December 31, 2016, basic NFFO per Unit increased by a very strong 4.8% compared to the same period last year despite the approximate 6% increase in the weighted average number of Units outstanding.

LIQUIDITY AND LEVERAGE

As at December 31,	2016		2015
Total Debt to Gross Book Value	44.31	%	45.71	%
Total Debt to Gross Historical Cost (1)	54.36	%	55.41	%
Total Debt to Total Capitalization	45.09	%	48.46	%
Debt Service Coverage Ratio (times) (2)	1.63		1.63
Interest Coverage Ratio (times) (2)	3.09		2.96
Weighted Average Mortgage Interest Rate (3)	3.20	%	3.39	%
Weighted Average Mortgage Term to Maturity (years)	6.1		6.3

(1)	Based on historical cost of investment properties.
(2)	Based on the trailing four quarters ended December 31, 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 December 31, 2016 would be 3.3% (December 31, 2015 – 3.52%).

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 strengthened to 44.3% as at December 31, 2016 compared to 45.7% for the same period last year;
• Debt service and interest coverage ratio as at December 31, 2016 improved to 1.63 times and 3.09 times, respectively, compared to 1.63 times and 2.96 times last year;
• As at December 31, 2016, 96.6% (December 31, 2015 – 96.5%) 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 3.20% as at December 31, 2016 from 3.39% as at December 31, 2015, resulting in significant potential interest rate savings in future years;
• Management expects to raise between $175 million and $225 million in total mortgage renewals and refinancings in 2017;
• The weighted average term to maturity of the mortgage portfolio was 6.1 years as at December 31, 2016 compared to 6.3 years at December 31, 2015;
• As at December 31, 2016, CAPREIT has investment properties with a fair value of $221.6 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 August 3, 2016 CAPREIT completed the sale of 5,126,000 Units, including an over-allotment option, for $32.20 per Unit for aggregate gross proceeds of $165.1 million. The net proceeds of the offering were used to repay a portion of borrowings under the REIT’s Acquisition and Operating Facility.

Property Capital Investments

During the year ended December 31, 2016, CAPREIT made property capital investments (excluding head office assets) of $195.7 million as compared to $163.2 million in last year. In 2017, CAPREIT expects to complete property capital investments (excluding the Netherlands properties and development) of approximately $155 million to $165 million, including approximately $64 million targeted at acquisitions completed since January 1, 2012, and approximately $15 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 February 15, 2017, CAPREIT completed the disposition of a 31-suite property located in Saskatoon, Saskatchewan for a sale price of $2.0 million. The mortgage was repaid with proceeds of the sale totaling approximately $1.4 million with an interest rate of 4.12% and the remaining proceeds was used to repay a portion of the Acquisition and Operating Facility.

On February 16, 2017, CAPREIT announced it has waived conditions and will acquire a luxury 256-suite residential apartment property located in Cote-Saint-Luc neighbourhood in the Greater Montréal Area. The purchase price, to be initially financed in cash from the CAPREIT’s Acquisition and Operating credit facility, is $23.5 million. Closing of the transaction is expected on or before May 3, 2017.

On February 27, 2017, CAPREIT announced that its Board of Trustees had approved a 2.4% increase in monthly cash distributions to $0.1067 per Unit, or $1.28 per Unit on an annualized basis. The increase effective with the March 2017 distribution payable on April 17, 2017 to Unitholders of record as at March 31, 2017.

Additional Information

More detailed information and analysis is included in CAPREIT’s audited consolidated annual financial statements and MD&A for the year ended December 31, 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 Tuesday, February 28, 2017 at 12:00 pm 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 7030364#. The Instant Replay will be available until midnight, March 7, 2017. 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 December 31, 2016, CAPREIT had owning interests in 48,767 residential units, comprised of 42,316 residential suites and 31 manufactured home communities (“MHC”) comprising 6,451 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. These include Net Rental Revenue Run-Rate, stabilized NOI, FFO, NFFO, Adjusted Cash Flow from Operating Activities, and applicable per Unit amounts and payout ratios (collectively, the “Non-IFRS Measures”). These Non-IFRS Measures are further defined and discussed in the MD&A released on February 27, 2017, which should be read in conjunction with this press release. Since Net Rental Revenue Run-Rate, stabilized NOI, FFO, NFFO, and Adjusted Cash Flow from Operating Activities are not recognized under IFRS, they may not be comparable to similar measures reported by other issuers. CAPREIT has presented the Non-IFRS Measures because Management believes the Non-IFRS Measures are relevant measures of the ability of CAPREIT to earn and to evaluate CAPREIT’s performance. A reconciliation of Net Income and the Non-IFRS Measures including Adjusted Funds From Operations (“AFFO”) is included in this press release. The 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, Irish and Dutch 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 February 27, 2017. The information in this press release is based on information available to Management as of February 27, 2017. 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		December 31, 2016			December 31, 2015
($ Thousands)
Investment Properties	$	7,642,017		$	6,863,140
Total Assets		7,892,994			7,102,828
Mortgages Payable		3,492,923			3,097,773
Bank Indebtedness		26,408			168,211
Total Liabilities		3,734,062			3,442,875
Unitholders’ Equity		4,158,149			3,659,953

Condensed Income Statements
			Three Months Ended								Year Ended
			December 31,								December 31,
($ Thousands)			2016				2015				2016				2015
NOI			95,210				86,427				366,947				324,614
	Trust Expenses		(8,883	)			(5,369	)			(32,129	)			(22,707	)
	Unrealized Gain on Remeasurement of Investment Properties		65,368				81,030				227,335				173,242
	Realized Loss on Disposition of Investment Properties		(328	)			–				(1,813	)			(639	)
	Remeasurement of Exchangeable Units		(121	)			(4	)			(731	)			(276	)
	Unit-based Compensation (Expenses) Recoveries		(4,824	)			2,075				(19,897	)			(13,417	)
	Interest on Mortgages Payable and Other Financing Costs		(28,725	)			(27,026	)			(112,425	)			(103,795	)
	Interest on Bank Indebtedness		(773	)			(1,991	)			(4,705	)			(3,988	)
	Interest on Exchangeable Units		(50	)			(49	)			(200	)			(194	)
	Other Income		5,363				4,122				17,236				12,340
	Amortization		(1,604	)			(763	)			(4,249	)			(2,799	)
	Severance and Other Employee Costs		–				(395	)			–				(5,237	)
	Unrealized and Realized (Loss) Gain on Derivative Financial Instruments		918				(155	)			(397	)			282
	Dilution Loss on Equity Accounted Investments		–				–				–				(4,346	)
	Gain (Loss) on Foreign Currency Translation		2,720				(527	)			4,441				(7,447	)
Net Income			124,271				137,375				439,413				345,633
Other Comprehensive (Loss) Income		$	(1,838	)		$	2,723			$	1,944			$	12,754
Comprehensive Income		$	122,433			$	140,098			$	441,357			$	358,387

Condensed Statements of Cash Flows
				Three Months Ended								Year Ended
				December 31,								December 31,
				2016				2015				2016				2015
($ Thousands)
Cash Provided By Operating Activities:
	Net Income		$	124,271			$	137,375			$	439,413			$	345,633
	Items in Net Income Not Affecting Cash:
		Changes in Non-cash Operating Assets and Liabilities		19,863				(9,403	)			14,138				(12,921	)
		Realized and Unrealized (Gain) Loss on Remeasurements		(65,837	)			(80,871	)			(224,394	)			(172,609	)
		Unit-based Compensation (Recoveries) Expenses		4,824				(2,075	)			19,897				13,417
		Items Related to Financing and Investing Activities		27,081				26,007				104,578				97,667
		Other		1,009				3,484				7,726				21,637
Cash Provided By Operating Activities				111,211				74,517				361,358				292,824
Cash Used In Investing Activities
	Acquisitions			(94,637	)			(26,442	)			(387,689	)			(933,386	)
	Capital Investments			(64,165	)			(58,652	)			(197,493	)			(174,027	)
	Acquisition of investments			–				–				–				(32,305	)
	Dispositions			(327	)			–				31,321				24,004
	Other			488				(32	)			3,673				1,018
Cash Used In Investing Activities				(158,641	)			(85,126	)			(550,188	)			(1,114,696	)
Cash (Used) Provided By Financing Activities
	Mortgages, Net of Financing Costs			138,293				325,844				387,214				563,280
	Bank Indebtedness			(35,187	)			(502,611	)			(141,803	)			54,644
	Interest Paid			(27,408	)			(26,334	)			(109,097	)			(100,467	)
	Proceeds on Issuance of Units			373				239,973				161,914				401,154
	Distributions, Net of DRIP and Other			(28,641	)			(26,263	)			(109,398	)			(96,739	)
Cash (Used) Provided By Financing Activities				47,430				10,609				188,830				821,872
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								Year Ended
			December 31,								December 31,
			2016				2015				2016				2015
($ Thousands, except per Unit amounts)
Net Income		$	124,271			$	137,375			$	439,413			$	345,633
Adjustments:
	Unrealized (Gain) Loss on Remeasurement of Investment Properties		(65,368	)			(81,030	)			(227,335	)			(173,242	)
	Realized Loss on Disposition of Investment Properties		328				–				1,813				639
	Remeasurement of Exchangeable Units		121				4				731				276
	Remeasurement of Unit-based Compensation Liabilities		3,137				(4,309	)			14,217				7,511
	Interest on Exchangeable Units		50				49				200				194
	Corporate taxes expense		7				31				7				59
	Loss (Gain) on Foreign Currency Translation		(2,720	)			527				(4,441	)			7,447
	FFO Adjustment for Income from Equity Accounted Investments		(2,426	)			(1,925	)			(6,021	)			(4,024	)
	Unrealized and Realized Loss (Gain) on Derivative Financial Instruments		(918	)			155				397				(282	)
	Net Income Attributable from Non-Controlling Interest		67				–				67				–
	Net FFO Impact Attributable from Non-Controlling Interest		(68	)			–				(68	)			–
	Dilution Loss on Equity Accounted Investments		–				–				–				4,346
	Amortization of Property, Plant and Equipment		1,604				763				4,249				2,799
FFO		$	58,085			$	51,640			$	223,229			$	191,356
Adjustments:
	Amortization of Loss from AOCL to Interest and Other Financing Costs		775				778				3,105				3,311
	Acquisition Research Costs(4)		–				–				5,474				–
	Net Mortgage Prepayment Cost		–				–				–				123
	Severance and Other Employee Costs		–				395				–				5,237
NFFO		$	58,860			$	52,813			$	231,808			$	200,027
	NFFO per Unit – Basic	$	0.437			$	0.417			$	1.772			$	1.692
	NFFO per Unit – Diluted	$	0.432			$	0.412			$	1.750			$	1.668
	Total Distributions Declared (1)	$	42,676				39,469			$	164,413			$	146,198
	NFFO Payout Ratio (2)		72.5	%			74.7	%			70.9	%			73.1	%
	Net Distributions Paid (1)	$	28,675			$	27,133			$	109,903			$	98,795
	Excess NFFO Over Net Distributions Paid	$	30,185			$	25,680			$	121,905			$	101,232
	Effective NFFO Payout Ratio (3)		48.7	%			51.4	%			47.4	%			49.4	%

(1)	For a description of distributions declared and net distributions paid, see the Non-IFRS Financial Measures section in the MD&A for the year ended December 31, 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 cash generated from operating activities to Adjusted Cash Flows from Operating Activities:
			Three Months Ended								Year Ended
			December 31								December 31
($ Thousands, except per Unit amounts)			2016				2015				2016				2015
Cash Generated From Operating Activities		$	111,211			$	74,517			$	361,358			$	292,824
Adjustments
	Interest Paid		(27,408	)			(26,334	)			(109,097	)			(100,467	)
Adjusted Cash Flow from Operating Activities		$	83,803			$	48,183			$	252,261			$	192,357

Reconciliation of NFFO to AFFO
			Three Months Ended								Year Ended
			December 31								December 31
			2016				2015				2016				2015
($ Thousands, except per Unit amounts)
NFFO		$	58,860			$	52,813			$	231,808			$	200,027
Adjustments:
	Provision for Maintenance Property Capital Investments (1)		(4,582	)			(4,417	)			(18,249	)			(16,343	)
	Amortization of Fair Value on Grant Date of Unit-based Compensation		1,687				2,234				5,680				5,906
AFFO		$	55,965			$	50,630			$	219,239			$	189,590
	AFFO per Unit – Basic	$	0.416			$	0.400			$	1.676			$	1.604
	AFFO per Unit – Diluted	$	0.411			$	0.395			$	1.655			$	1.581
	Distributions Declared (2)	$	42,676			$	39,469			$	164,413			$	146,198
	AFFO Payout Ratio (3)		76.3	%			78.0	%			75.0	%			77.1	%
	Net Distributions Paid (2)	$	28,675			$	27,133			$	109,903			$	98,795
	Excess AFFO over Net Distributions Paid	$	27,290			$	23,497			$	109,336			$	90,795
	Effective AFFO Payout Ratio (4)		51.2	%			53.6	%			50.1	%			52.1	%

(1)	An industry based estimate (see the Non-IFRS Measures section in the MD&A for the year ended December 31, 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 year ended December 31, 2016.
(3)	The payout ratio compares distributions declared to AFFO.
(4)	The effective payout ratio compares net distributions paid to AFFO.