canadian real estate investment trusts

CANADIAN REAL ESTATE

INVESTMENT TRUSTS

Vincent LoSneha Naik

Yi DingKitty Liu

Agenda REITs Overview

RioCan REITs

Boardwalk REITs

H&R REITs

What is a REIT? REIT is a real estate investment trust that originated in

the United States in the 1960’s and was introduced in Canada in 1993 as publicly traded securities

Pools capital into real estate that is structured to generate regular distributions of cash

Investors are not directly investing in real estate property, they are investing in REIT units that are publicly traded

REITs are 100% eligible as Canadian content for registered portfolios

Characteristics of REITs REITs are income stocks because:

Canadian REITs must pay 85% its net income to shareholders

They pay dividends monthly

REIT regulations restrict or discourage “merchant building”

Most REITs have limited development rights

Characteristics of REITs Dual market situation where two parallel markets exist for trading

real estate

Stock market valuation of property (indirect market), and the private market valuation (direct market) are not always the same

Indirect market (REIT market) tends to lead the private market

When two markets disagree REITs can undertake positive NPV investments either by buying or selling in the private market

When the stock market values property more highly than private property market, REITs can grow merely by buying properties, and thus becoming growth stocks, at least temporarily

Market Size U.S.

136 equity REITs listed on major exchanges Market capitalization of US $191 billion

Canada 25 REITs listed on TSX Market capitalization of $21.2 billion

Benefits of REITs Pre-tax income flows through to investors

Investors get favorable tax treatment on the income

A component of the tax obligation is deferred until the units are sold

Offer diversification and a level of stability, without sacrificing growth potential

Provide exposure to real estate – real assets with tangible value and reliable income streams – in a highly liquid, marketable security

Benefits of REITS Distinct in their combination of relatively

steady income, capital gains potential, tax benefits and professional, active management

As a trust, REITs are subject to more stringent regulations in areas such as leverage and financial reporting, providing investors with an added layer of security

Diversification

Substitutes Mutual funds Stocks Bonds

But because real estate has limited correlation to most other stocks and bonds, REITs provide one more layer of diversification

Types of REITs Equity REITs

Equity REITS invest in and own properties (thus responsible for the equity or value of their real estate assets). Their revenues come principally from their properties' rents

Mortgage REITs

Mortgage REITs deal in investment and ownership of property mortgages. These REITs loan money for mortgages to owners of real estate, or invest in (purchase) existing mortgages or mortgage backed securities. Their revenues are generated primarily by the interest that they earn on the mortgage loans

Hybrid REITs

Hybrid REITs combine the investment strategies of Equity REITs and Mortgage REITs by investing in both properties and mortgages

Legality Minimum of 150 unit holders, and are listed on a recognized

Canadian Exchange No more than 50% of the shares can be held by five or fewer

individuals At least 95% of its income must be derived from the disposition

of or income earned from qualifying investments At least 80% of its property must be held in any combination of

real property in Canada and other qualifying investments No more than 10% of its property (on a non-consolidated basis)

should consist of bonds, securities or shares in the capital stock of any one corporation or debtor

Income is not taxed within the trust as long it is distributed to unit holders

Tax Fairness Plan Applicable to all Canadian trusts companies that begin trading after

Oct. 31, 2006, except qualified REITs

1) At no time in the year hold any non-portfolio property other than real properties situated in Canada

2) Must have at least 95% of its income for the year from properties

3) Have more than 75% of its income to be directly or indirectly attributable to rents from, mortgages on, or gains from the disposition of real properties situated in Canada

4) Hold throughout the year real properties situated in Canada, cash, and debt or other obligations of governments in Canada with a total fair market value that is not less than 75% of its equity value.

Four year transition period for existing trusts (2011)

5 Year S&P/TSX Income Trust (RTCM – I)

5 Year S&P/TSX Capped REIT (RTRE – I)

Value Drivers Rise in Interest Rates – Interest expense

increases Fall in Interest Rates – Interest expense reduces

Factors to Consider1. Management Expertise2. Net Asset Value per Share3. Portfolio Diversification4. Strong Growth Prospects

• Access to funding5. Low Leverage

• Interest Coverage Ratio• %Long term debt to Capitalization

6. Earnings available for distribution• FFO, AFFO (or FAD) instead of Net Income

7. Cash Distribution to Unitholders• FFO or AFFO Payout Ratio

Measuring Performance Net income (NI) or GAAP Earnings – not the best

measure largely due to depreciation allowance

Funds from operations (FFO) – closer to economic truth but ignores capital improvements

Funds available for distribution (FAD) – cash flow available to share holders if there is no change in working capital or no new debt

Free cash flow (FCF) – this is REIT’s true operating cash flow

Net IncomeReal estate revenue

- Real estate expense - Depreciation & amortization of real

estate = Income from real estate + Other Income - General and administrative expense

= Net Income per GAAP

Funds From OperationNet income per GAAP

- Gains from sale of real estate = Adjusted net income + Depreciation and amortization of

real estate = Funds From Operation

Funds Available for Distribution

Funds from operation + Rent adjustments - Capital improvements = Funds Available for Distribution

Free Cash FlowFunds available for distribution

- Real estate acquisitions (new investments)

- Changes in working capital - Principal payments + New debt issue + Gain on sale of real estate + New equity issue = Free Cash Flow to Equity

Adjusted Funds From Operations

AFFO per unit is calculated by adjusting FFO from straight line and market rent adjustments, non-cash compensation expenses, actual costs incurred for capital expenditures and leasing costs for maintaining shopping centre infrastructure and current lease revenues

Stock Market Overview Ticker: REI.UN

Industry: Real Estate Investment Trust

Exchange: Toronto Stock Exchange

Market Capitalization: $4,570.16 million

One Year with MA 50 and MA 100

Five Year with MA 50 and MA 100

One Year Compared to S&P/TSX Capped REIT

Five Year Compared to S&P TSX Composite

RIOCAN and REIT Market RIOCAN OVERVIEW:

12/18: Announced completion of acquisition of four retail properties in Canada

12/01: Announced completion of $100.9 million public offering of trust units and over-allotment option

11/18: Announced firm contracts on retail properties in Canada

11/03: Closed $150 million of unsecured debenture issue 10/30: Formed a joint venture to acquire retail real

estate in the U.S owned 80% by RioCan and 20% by Cedar Shopping Centers, Inc.

10/26: Announced agreements with Cedar Shopping Centers Inc.

RioCan Real Estate Investment Trust is an unincorporated “closed-end” trust governed by the laws of the Province of Ontario

RioCan is publicly traded and is listed on the Toronto Stock Exchange

RioCan is Canada’s largest real estate investment trust with a total market capitalization of approximately $4.57 million

Ownership interest in a portfolio of 258 retail properties, including 12 under development across Canada comprising of over 60 million square feet

Over $2.3 billion distributed to unit holders since the IPO and $3.5 billion of debt under management

Revenue of $187 million in Q2 of 2009 and a diversified tenant base with total tenancies of 5,600

Management Team

Edward Sonshine – President & CEO, RioCan REIT CEO of RioCan REIT since late

1993 and has overseen its growth from an asset base of under $100 million to its current enterprise value of $7 billion

Previously practiced law for 15 years and was awarded his Queen’s Counsel in 1983

Member of the board of directors of RBC, Chair of Chesswood Income Fund, and Chair of Mount Sinai Hospital Foundation

Management Team

Frederic A. Waks – Senior Vice President & COO, RioCan REIT COO of RioCan since 1995

Started real estate carrier in 1981 with Royal LePage and earned the honourable designation of Rookie of the Year in the Commercial Division and President’s Round Table

In 1984, joined First Plazas as Vice President of Leasing/Marketing and then moved to Dominion Trust in 1988 under the position of Senior Vice President. From 1993 to 1995, acted as Vice President of Retail Leasing for Confederation Life

Management Team Raghunath Davloor – Senior Vice President

& CFO, RioCan REIT CFO of RioCan since 2008

Over 25 years of real estate, management, finance, accounting, and tax experience

Started with Arthur Anderson & Co where he spent 8 years in audit, tax and advisory roles, followed by over 10 years at O&Y Properties and O&Y REIT ultimately becoming CFO. Prior to coming to RioCan, worked as Vice President and Director in corporate finance for 2 years at TD Securities where he focused on real estate industry coverage

Asset Profile As of December 31, 2009, RioCan has ownership

interests in a portfolio of 246 shopping centres comprising of 54.5 million sq. ft. compared to 50.6 million sq. ft. in 2008

RioCan has ownership interests in 12 Greenfield Development projects as of December 31, 2009

Upon completion this comprises of approximately

8.5 million sq. ft. of which RioCan’s ownership interest is approximately 3 million sq. ft.

Acquisition On October 30, 2009, RioCan formed a joint venture to

acquire retail real estate in the U.S owned 80% by RioCan and 20% by Cedar Shopping Centers, Inc. [NYSE:CDR, “Cedar”]

Properties are 7 grocery-anchored shopping centres in Massachusetts, Pennsylvania, and Connecticut owned by Cedar

Total consideration paid by RioCan in this initial investment is approximately US$181 million resulting in a net equity investment of US$106 million

Provides RioCan with a platform for growth opportunities in the U.S

Acquisition During 2009, RioCan completed total acquisitions of $348 million that

comprised of approximately 1.8 million sq. ft.

Three month period ended December 31, 2009, and RioCan completed total acquisitions of $257.1 million that comprised of approximately 1.2 million sq. ft.

In March 2009, RioCan acquired interest in 6 grocery anchored retail properties in Greater Montreal Area totaling 454,000 sq. ft. for a total purchase price of $67.5 million

RioCan holds 100% interest in two of the properties and 50% interest in these four properties

Annualized net operating income expected to be generated from this portfolio is approximately $6.1 million

1) Concord Centre, Laval 4) Sicard Centre, Ste-Therese2) La Prairie Centre, La Prairie 5) St. Jean, St-Jean-sur-Richelieu3) Rene-A.-Robert Centre 6) Ste-Therese Ste Julie, Ste Julie

Distribution History

YEAR DISTRIBUTION YEAR DISTRIBUTION

YTD 2010 $0.23 2009 $1.38 2008 $1.36 2007 $1.3275 2006 $1.2975 2005 $1.2725 2004 $1.2275 2003 $1.14

2002 $1.105 2001 $1.075 2000 $1.07125 1999 $1.04 1998 $0.95 1997 $1.55 1996 $1.30 1995 $1.15

Debt Profile Debt-to-Gross Book Value of 55.8% as of

June 30, 2009

Total operating lines of $293.5 million with approximately $193 million available

Cash on hand as at June 30, 2009 was approximately $300 million

In 2009, S&P affirmed RioCan’s issuer credit rating of BBB

Leverage Level

Market Position Geographic Diversification

As of June 30, 2009, approximately 85% of RioCan’s annualized rental revenue was derived from national and anchor tenants

Approximately two-thirds of RioCan’s revenue came from properties within the below stated six high growth major Canadian markets

Geographic DiversificationAs of December 31, 2009

61.90%

18.00%

17.10% 3.00%

Rental Revenue

Ontario

Quebec

West-ern Canada

Eastern Canada

United States

58.60%

18.70%

18.10% 4.20%

0.40%

Net Leasable Area

Ontario

Quebec

West-ern Canada

Eastern Canada

United States

Canadian MarketAnnualized Rental Revenue

62.30%

17.90%

10.00% 5.70%2.10%

0.50%0.50%

0.50%0.40%

0.10%

OntarioQuebecAlbertaBritish ColumbiaNew BrunswickSaskatchewanPrince Edward Is-landManitobaNewfoundlandNova Scotia

Property Type RioCan’s core investment strategy is to focus on

stable, low risk, predominantly retail properties in either stable or high growth markets

Aim at creating stable and over time growing cash flows from its property portfolio

Retail assets in which RioCan currently invests are: New format retail centres Neighbourhood convenience unenclosed centres Enclosed shopping centres Urban retail properties

As at December 31, 2009, the diversification of RioCan’s property portfolio by property type is as follows:

47.10%

37.00%

21.80%

17.90%

5.00%

4.50%

Net Leasable Area by Property Type

New Format Retail

Urban Retail

Grocery Anchored

Enclosed Shopping

Non-Grocery Anchored

Office

49.10%

15.00%

9.80%

7.40%4.40

%4.30

%

Annualized Rental Revenue by Property

TypeNew Format Retail

Enclosed Shopping

Grocery Anchored

Urban Retail

Office

Non-Grocery Anchored

Occupancy Rate

The occupancy rate of RioCan’s Canadian portfolio has remained relatively stable over the most recent eight fiscal quarters as can be seen in the diagram in the next few slides

Occupancy rate as of December 31, 2009 is 97.4%

Up 50 basis points from December 31, 2008 and 10 basis points from September 30, 2009

Economic occupancy rate at December 31, 2009 is slightly lower at 96.4% that represents the occupied NLA for which tenants are open and in business

RioCan’s portfolio performed strongly, but financial results were affected due to the economic environment that resulted in greater than normal tenant bankruptcies and bad debts

Potential Growth Development Greenfield Development

Development is carried out through in-house capabilities and with partners such as Trinity and Canada Pension Plan Investment Board (CPPIB)

As of June 20, 2009, total Greenfield developments comprised of 9.4 million sq. ft.

RioCan owns interest in the property consisting of 3.3 million sq. ft. and invested $261 million in the project

Total estimated cost is $6.1 billion, with RioCan’s interest being approximately $690 million

Generated unlevered yield between 7% to 11% at the weighted average of 8.5% to 9.5%

Potential Growth Development Strategic sales to CPPIB

In June 2008, 50% of non-managing interest in Jacksonport development in Calgary

In October 2008, 37.5% of non-managing ownership interest in two or three phases in East Hills in Calgary

Sales allowed RioCan to recoup 100% of its equity in these projects

Strengthen relationship with Canada’s largest pension fund

Land Use Intensification Capitalize on trend in Canada’s six high

growth markets towards densifying existing urban locations by Prohibiting costs of expanding infrastructure

beyond urban boundaries

Concerns towards environment issues

Maximizing use of transit

Generate high yields on land that is currently owned

Land Use Intensification Younge Eglintion Centre, Toronto, Ontario

Largest acquisition at $223 million Acquired in January 2007 Office Area: 750,126 sq. ft. Rental Area: 264,391 sq. ft. Launched a revitalization and expansion plan to

capitalize on the area’s residential intensification Improvements to parking

46,000 sq. ft. of new retail and a connection to office towers and to the food court

12-storey, 210,000 sq. ft. expansion of office towers Increase leasing and capital improvement has increased

NOI (net operating income) and occupancy rate

Land Use Intensification Tillicum Centre in Victoria, BC

Acquired in July 2002 Total area: 62,000 sq. ft. Improved tenant quality and aesthetics and

increased NOI from $5.3 million at purchase to $7.0 million in 2008

Financial Analysis Operational and Financial Highlights

Balance Sheet

Income Statement

Cash Flow Statement

Funds from Operations (FFO)

Adjusted Funds from Operations (AFFO)

Operational and Financial Highlights

RioCan’s reported net earnings for the year ended December 31, 2009 of $113.9 million ($0.49 per unit) compared to $145.1 million ($0.67 per unit) in 2008

FFO as of December 31, 2009 is $275.7 million ($1.20 per unit) compared to $323.6 million ($1.48 per unit) in 2008

Difference between net earning and FFO is amortization expense, future income tax and impairments

Operational and Financial Highlights

$47.9 million decrease in FFO is primarily due to the following changes:

Decreased gains on properties held for resale of $35.6 million

Increased interest expense of $24.9 million

Decreased fees and other income of $2 million; offset by

Increased net operating income from rental properties of $13.3 million due to acquisitions, completion of Greenfield Developments and intensification of existing properties

Consolidated Balance Sheet

Income Statement

Consolidated Cash Flow Statement

Funds From Operations (FFO)

Reconciliation of GAAP Net Earnings to FFO is as follows:

Breakdown of FFO attributable to qualifying and non-qualifying activities is as follows:

FFO Payout Ratio

Recommendation

SELL!!!

Stock Quote

Open 41.27 Beta 0.69High 40.82 Market Cap 2,140.60MLow 40.60 EPS 1.08Bid ×0 lots 40.82 P/E 37.77Ask × 0 lots 40.85 Forward P/E 15.32Volume 52,538 PEG --Previous Close

40.76 Annual Dividend

1.80

52-week High 41.65 Yield 4.4052-week Low 24.10

Ticker: BEI.UN – TIndustry : Real EstateExchange: Toronto Stock Exchange

One Year with MA 50 and MA 100

Five Year with MA 50 and MA 100

One year compared to S&P TSX Capper REIT

Five year compared to S&P TSX Composite

ABOUT BOARDWALK

Canada's largest public owner/operator of multi-family rental communities

Unincorporated, open-ended real estate investment trust created pursuant to a Declaration of Trust, dated January 9, 2004

Listed in Toronto Stock Exchange Market since 2004

Currently owns and operates in excess of 260 properties with 36,418 units

Approximately 31 million net rentable square feet Rental universe of over 1.5MM units in major

Canadian CMA’s) Total Gross Book Value: about $4 billion in

Canadian dollar

Trust Overview – Recent News Feb. 23 – Announcement of $0.15

distribution for February and March Jan. 07 – Enter into an automatic trust

unit purchase plan in order to facilitate repurchases of its trust units under its previously announced normal course issuer bid in August, 2009.

Dec. 31 – Declared distributions of $95.3 million, representing approximately 70% of the reported DI for the year.

Management Team Sam Kolias – CEO

He and his brother Van Kolias, Senior VP of Quality Control of Boardwalk, are at #81 of the top 100 richest people in Canada as compiled by Canadian Business magazine for 2006.

They originally bought a large chunk of apartment real estate in Alberta and Saskatchewan. Through their public company, Boardwalk Rental Communities, they have entered B.C., Ontario, and Quebec.

Management Team William Wong – CFO

Jonathan Brimmell – Vice President, Operations, Ontario & Quebec

Dean Burns – Vice President, General Counsel & Secretary

Ian Dingle – Vice President, Purchasing

Kelly Mahajan – Vice President, Customer Services & Process Design

Lisa Russell – Vice President, Acquisitions, Western Canada

Lizaine Wheeler – Vice President, Operations, British Columbia, Alberta & Saskatchewan

Capital Investment Boardwalk invested approximately $70.4 million in

its properties in the form of project enhancements in 2009 a decrease of $17.9 million from the $88.3 million invested

in 2008. The decrease is due primarily to a decrease in the

expenditures largely related to building exterior and suite improvements

Acquisition Only one apartment unit in Edmonton, Alberta Acquire addition Boardwalk REIT units on public

market In 2009, bought back 790,000 units for total

investment $22.8 million Fund of acquisition

Sale of Non-Core properties: 367 apartment units sold for $39.8 million

NHA to insure a historical low interest rate Compared to 2008

298 units acquired all in Alberta Bought back 2.3 million trust units by $85.4million

Distribution History Year Distribution

2009 $1.802008 $1.802007 $1.59332006 $1.29672005 $1.262004 $1.245

MARKET OVERVIEW

Provinces Portfolio

Market Overview (NOI)12 Months 09 12 Months 08 % change

Alberta 173,320 170,311 1.8%

Calgary 49,706 49,761 -0.11%

Edmonton 103,276 101,352 1.898%

Other Alberta 17,270 17,456 -1.066%

Saskatchewan 35,904 28,753 24.9%

Ontario 19,262 18,026 6.9%

Quebec 43,869 41,794 5.0%

British Columbia 7,945 7,180 10.72%

Occupancy

FINANCIAL PERFORMANCE

2009 2008 % ChangeTotal Assets $2,378,278 $2,358,924 0.8%Total Rental Revenue

$427,686 $419,799 1.9%

Net Earnings $62,067 $45,685Total FFO $133,094 $129,918 2.4%Distributable Income

$135,308 $131,443 2.9%

Net Earnings per unit

$1.17 $0.84

FFO per unit $2.51 $2.39 5.0%

Distributable income per unit

$2.55 $2.41 5.8%

FIVE YEAR SUMMARY

From 2004-2008

Annual & Quarterly Comparision

FINANCIAL STATEMENTS

Balance Sheet

Leverage ratio-- related to DOT

Leverage ratio-- related to DOT

EARNINGS AND COMPREHENSIVE

INCOME

Cash Flow

Cash Flow

UNITHOLDERS’ EQUITY

Distributable Income

Funds from Operation

FFO/AFFO Payout Ratio

FFO Payout Ratio

2004 2005 2006 2007 2008 20090.0%

10.0%20.0%30.0%40.0%50.0%60.0%70.0%80.0%90.0%

100.0%

Recommendation

HOLD!!!

Stock Price Overview Ticker: HR. UN Industry: Real Estate Investment Fund Exchange: Toronto Stock Exchange Fund Type: Open-end Units Outstanding: 143.871 million, as of

Feb 25, 2010 142.676 million as of Sept 30, 2009

Open 16.65 Beta 1.19

High 16.65 Market Cap 2,377.43M

Low 16.51 EPS 0.66

Bid x2 lots 16.53 P/E 25.05

Ask x44 lots 16.59 Forward P/E 10.86

Volume 216,645 PEG -

Previous Close 16.53 Annual Dividend 0.72

52-week High 17.4 Yield 4.3

52-week Low 6.56

Stock Quote (as of Mar 16, 2010)

STOCK PRICE CHARTS

1 Year Stock Pricesince Mar 1st, 2009

Compared with SMA 50

Compared with S&P/TSX Crapped REIT

3 Year Stock Price Chart

Compared with SMA 50 & 100

Compared with S&P/TSX Crapped REIT

About H&R REIT

About H&R REIT IPO in December, 1996 Invests in both U.S. and Canada Major player in office complexes The REIT holds interests in 34 office properties,

118 single-tenant industrial properties, 117 retail properties and 3 development projects, principally in the Greater Toronto Area.

In 2009, the REIT paid out approximately 48% of its adjusted funds from operations to its unit holders.

Is currently building The Bow, a two million square foot office building in Calgary’s downtown financial district.

Reorganization Created H&R Finance Trust in Oct, 2008 “Stapled unit”

Shared the same ticker symbol with H&R REIT Will not trade independently

Purpose To save U.S tax

Capital Transaction Highlights

During the fourth quarter 2009, H&R Issued $175 million of 6.00% convertible

unsecured subordinated debentures Sold an industrial property for gross proceeds of

$140 million, and redeemed 28.6 million warrants

Issued to Fairfax Financial Holdings Limited for approximately $186 million

Did not acquire any properties, sold seven properties for gross proceeds of $217 million, and raised $525 million from three debentures.

Recent News Jan 17, 2010

Announced $230mm senior unsecured debenture financing

Announced an agreement to repurchase the Fairfax debentures

Feb 3, 2010 Closed $230 million senior unsecured

debenture financing repurchased the Fairfax debentures

Management Profile Thomas J. Hofstedter

President and Chief Executive Officer since the creation of H&R

Larry Froom C.A., Chief Financial Officer joined H&R in 1997, but became CFO since 2006

Nathan Uhr Vice-President, Acquisitions, since 1996

Year H&R REIT (in $) H&R Finance Trust (in $)

2009 0.6143 0.1057

2008 1.4030 0.0370

2007 1.3704 -

2006 1.3344 -

2005 1.3044 -

2004 1.2440 -

2003 1.2240 -

Distribution History

Market overview

Significant Growth Over 12 Years

Creditworthy Tenants

*Based on estimated annualized gross revenue, excluding the straight lining of contractual rental and discontinued operations

Average term to maturity Lease: 10.5

years Mortgages: 8.3

years

Long Terms Stability

High quality real estate Predictable income

Creditworthy tenants Solid balance sheet Long-term financing Capital risk management

Disciplined Strategy

Number of Properties

Net Rentable

Area (sf in thousands)

Book Value ($ millions)

Occupancy Rate (%)

Office 34 8,285 1,565 98.4%

Industrial 119 22,779 1,378 98.9%

Retail 117 7,636 1,172 99.9%

Development 3 N/A 795 N/A

Portfolio of Properties

Locations of PropertiesNumber

of Propertie

s

Ontario US Alberta

Quebec

Other Total

Office 23 2 4 1 4 34Industrial 54 16 19 11 19 119

Retail 32 72 5 5 3 117

Total 109 90 28 17 26 270

Strategic Cluster in Downtown Calgary

U.S. Property Breakdown

Diversified Portfolio

* Before interest, depreciation and amortization for the quarter ended December 31, 2009

Diversified Portfolio

* Before interest, depreciation and amortization for the quarter ended December 31, 2009

Recent Development: The Bow Encana’s Corporate headquarters in Calgary Approximately 2 million SF, 58-story office

tower Budged about $1.5 billion, with full

completion and the lease commencement date expected by April 2012

Had pre-leased 100% by Encana in the next 25 years

Will generate in excess of $94 million of NOI in the first leasing year

Financing for the Bow

As at December 31, 2009

FINANCIAL INFORMATION

Financial Highlights

Combined Balance Sheets

$5,351,123

$5,442,074

$3,762,335

$3,715,039

$1,513,666

$1,651,668

As at year end 2009, H&R’s debt to gross book value was 52.5% compared to 54.8% as at Dec 31, 2009.

Leverage Ratio

Combined Statements of Earnings

$86,525

$97,706

Combined Statements of Earningscontinued

Cash Flow I$86,52

5 $97,706

$238,941

$233,200

Cash Flow II

$109,505

$17,683

Unitholders’ Equity

$1,651,668

$1, 513,666

Comprehensive Income

Financial Results

AFFO Details

95.4%

47.7%

Moderate buy and hold Stable balance sheet High quality and diversified portfolio Long terms stability Potential growth

Recommendations

THANK YOU!!!!