Primaris REIT Announces Strong Q4/22 and Full Year 2022 Results

TORONTO--(BUSINESS WIRE)--Primaris Real Estate Investment Trust (“Primaris” or “the Trust”) (TSX: PMZ.UN) announced today financial and operating results for the fourth quarter and year ended December 31, 2022.

Quarterly Financial and Operating Results Highlights

• $99.8 million total rental revenue;
• +8.8% Same Properties Cash Net Operating Income** ("Cash NOI") growth;
• 91.5% committed occupancy and 91.1% in-place occupancy;
• $0.387 Fund from Operations** ("FFO") per average diluted unit;
• $3.2 billion total assets;
• 52.1% FFO Payout Ratio**;
• 31.5% Debt to Total Assets**;
• $176.0 million in liquidity;
• $2.9 billion in unencumbered assets; and
• $21.49 Net Asset Value** ("NAV") per unit outstanding.

Annual Financial and Operating Results Highlights

• +10.7% Same Properties Cash NOI** growth;
• $1.580 FFO** per average diluted unit;
• 50.7% FFO Payout Ratio**; and
• 5.0x Average Debt** to Adjusted EBITDA**.

Business Update Highlights

• Normal Course Issuer Bid ("NCIB") activity in 2022 will positively impact 2023:
  • NAV** per unit outstanding by $0.82; and
  • FFO** per unit outstanding by $0.062 considering the impact of the Units cancelled under the NCIB as the only variable, before considering the cost of capital.
• Including activity under the NCIB to February 28, 2023 total purchases were 4,700,100 Units at an average price of $14.10, or a discount to NAV** of approximately 34.4%.
• Developed a Board-led ESG Strategic Plan aligned to investor focused ESG standards and frameworks. The Plan was developed based on the results of an ESG materiality assessment.

“Enclosed malls across our portfolio continue to experience a significant rebound in tenant sales, with same store sales reaching an all time high,” said Patrick Sullivan, President and Chief Operating Officer. “Throughout the year we made material progress driving in-place occupancy 510 basis points, with contractual rental revenue growth to follow. The vast majority of growth remains to be captured over the next few years as we drive occupancy back to their historical normal levels, and focus on continuing to convert pandemic lease concessions to market rents. As Primaris enters its 20^th year in operation, I would like to thank our specialized teams which have been assembled over the past two decades for their dedication. Our people are the core strength of Primaris.”

Chief Financial Officer, Rags Davloor added, “Our differentiated financial model, including very low leverage, a low payout ratio and significant retained free cash flow is a major strategic advantage for Primaris REIT. Keeping in line with best practices and transparency, we are reiterating our target balance sheet metrics for the coming year. Unsecured debt continued to grow as a percentage of total debt, and we finished the year at 78.6%, with unencumbered assets increasing to $2.9 billion, or 92% of our total assets. Looking ahead, we do not have any debt maturing in 2023, reducing refinancing risk and freeing up valuable resources to focus on managing the business and growth opportunities."

“The past year of strong operating and financial performance has underlined our commitment to, and confidence in our clear, and focused strategy of acquiring, owning and managing Canadian enclosed shopping centres,” said Alex Avery, Chief Executive Officer. “We see a long runway of growth opportunities, spanning occupancy improvement, increasing rental rates, reinvesting to enhance select shopping centres, recycling capital and growing our portfolio through acquisitions. These are reflected in the 2023 guidance. In 2023 we intend to continue to raise awareness about Primaris REIT, demonstrate our ability to transact on properties, continue to execute on capturing our internal NOI growth opportunity, and act in a manner consistent with the best-in-class profile we have created at Primaris.”

2023 Financial Outlook

Disciplined capital allocation is a key pillar to Primaris' strategy. To this end, Primaris reiterates its established targets for managing the Trust's financial condition.

	Targets
Debt to Total Assets**^1	25% - 35%
Average Debt** to Adjusted EBITDA**^1	4.0x – 6.0x
FFO Payout Ratio**	45% - 50%
Secured Debt as a Percentage of Total Debt**	<40%

** Denotes a non-GAAP measure. See Section 1, "Basis of Presentation" – "Use of Non-GAAP Measures” and Section 12, "Non-GAAP Measures" in the Management's Discussion and Analysis ("MD&A").

^1 The debt ratios are non-GAAP ratios calculated on the basis described in the indentures for the Series A and Series B debentures (the "Trust Indentures"). See Section 10.4, "Capital Structure" in the MD&A.

In addition to its established targets above, Primaris has provided guidance for the full year of 2023 as follows:

Occupancy: Management anticipates portfolio occupancy to increase 0.8% to 1.0% in 2023.

Rental Revenue: Contractual rent-steps of approximately $2.1 million, or approximately 1.0% of base rent.

Rental Revenue: Straight-line rent to be in the range of $1.8 to $2.2 million.

Same Properties Cash NOI**: Growth in Same Properties Cash NOI** to be between 3.0% to 5.0%. This is lower than the Same Property Cash NOI** growth in 2022 which was the first year following the impacts of the pandemic.

General and Administrative Expenses: Management anticipates general and administrative expenses for the 2023 fiscal year to be approximately $30 million.

Operating Capital Expenditures: Based on historic performance, normalized average operating capital costs per square foot were approximately $2.00 per square foot per year. 2023 operating capital expenditures are anticipated to be in the range of $27.7 million to $31.7 million, or $2.55 to $2.90 per square foot driven by positive absorption as spaces vacated during the pandemic are leased.

Redevelopment Capital Expenditures: In the range of $30 million to $40 million.

Impact of NCIB Activity: Primaris intends to renew its NCIB, subject to TSX review and approval. Primaris continues to believe that, from time to time, the market price for the Units may not fully reflect their intrinsic value, and in such circumstances, using the NCIB to repurchase Units is an attractive use of capital until other investment opportunities are available that meet our disciplined capital allocation approach.

Distributions: Primaris increased the distribution rate from $0.80 to $0.82 per unit per annum, or 2.5%. The rate increase was effective for the distribution declared on December 30, 2022, paid January 16, 2023. Management intends to increase distributions annually.

Select Financial and Operational Metrics

As at or for the three months ended, (in thousands of Canadian dollars unless otherwise indicated) (unaudited)	December 31, 2022			September 30, 2022			December 31, 2021^1
Number of investment properties		35			35			35
Gross leasable area ("GLA") (in millions of square feet)		10.9			10.9			11.5
In-place occupancy		91.1	%		90.7	%		86.0	%
Committed occupancy		91.5	%		91.7	%		87.5	%
Weighted average net rent per occupied square foot^2	$	24.23		$	24.18		$	24.14
Total assets	$	3,201,781		$	3,181,312		$	3,247,842
Total liabilities	$	1,114,152		$	1,024,988		$	1,056,516
Total revenue	$	99,804		$	94,151		$	66,114
Cash flow from (used in) operating activities	$	47,948		$	50,900		$	76,620
Cash Net Operating Income** ("Cash NOI")	$	53,593		$	53,103		$	35,637
Same Properties Cash NOI** growth		8.8	%		10.3	%		—
Net income (loss)	$	(25,770	)	$	(20,498	)	$	(1,741	)
Net income (loss) per unit	$	(0.264	)	$	(0.207	)		—
Funds from Operations** ("FFO") per unit - average diluted	$	0.387		$	0.411			—
FFO Payout Ratio**		52.1	%		48.6	%		—
Adjusted Funds from Operations** ("AFFO") per unit - average diluted	$	0.271		$	0.319			—
AFFO Payout Ratio**		74.5	%		62.7	%		—
Distributions declared per unit	$	0.202		$	0.200			—
Weighted average Units outstanding - diluted ('000s)		98,945			100,183			—
Net Asset Value** ("NAV") per unit outstanding	$	21.49		$	21.86		$	22.11
Debt to Total Assets**^3		31.5	%		29.6	%		28.4	%
Average Debt** to Adjusted EBITDA**^3	5.1x			4.8x				—
Interest Coverage**^3	4.2x			5.3x				—
Liquidity	$	175,954		$	364,014		$	22,636
Unencumbered Assets	$	2,863,844		$	2,645,293		$	1,879,788
Secured debt as a percent of Total Debt**		21.4	%		36.7	%		—
Fixed rate debt as a percent of Total Debt**		70.9	%		73.9	%		—
Weighted average term to debt maturity -Total Debt** (in years)		3.2			2.9			1.7
Weighted average effective interest rate - Total Debt**		4.87	%		4.37	%		2.73	%

** Denotes a non-GAAP measure. See Section 1, "Basis of Presentation" – "Use of Non-GAAP Measures” and Section 12, "Non-GAAP Measures" in the MD&A.

^1 As net income for the three months ended December 31, 2021 was calculated on the continuity-of-interests basis for the Primaris Properties only (as defined in the MD&A) and does not reflect the capital structure of the newly created Trust, calculations on a per unit basis and debt ratios would not be relevant.

^2 Supplementary financial measure, see Section 1, "Basis of Presentation" - "Use of Operating Metrics" in the MD&A.

^3 The debt ratios are non-GAAP ratios calculated on the basis described in the indentures for the Series A and Series B debentures (the "Trusts Indentures"). See Section 10.4, "Capital Structure" in the MD&A.

Operating Results

Same Properties Cash NOI** was $3.1 million, or 8.8% higher, and $14.1 million, or 10.7% higher, for the three months and year ended December 31, 2022, respectively, than the same periods of the prior year. The increase was driven by higher Same Properties' revenues from base rent, percent rent and percent rent in lieu, specialty leasing revenue and net recoveries. Year end results were also impacted by the recovery of prior years' property tax.

The below table compares the composition of FFO** and AFFO** for the three months ended December 31, 2022 to the prior quarter and calculates the drivers of the quarter over quarter changes.

For the three months ended
($ thousands except per unit amounts) (unaudited)	December 31, 2022			September 30, 2022			Change			Change per unit
NOI** from:
Same Properties^1	$	38,999		$	37,984		$	1,015			$	0.010
Property under redevelopment		1,124			1,114			10				—
Acquisition Properties^1		14,935			15,109			(174	)			(0.001	)
Interest and other income		1,002			890			112				0.001
Net interest and other financing charges		(10,518	)		(8,619	)		(1,899	)			(0.019	)
General and administrative expenses (net of internal expenses for leases)		(6,859	)		(4,887	)		(1,972	)			(0.020	)
Amortization		(375	)		(374	)		(1	)			—
Impact of variance in weighted average units												0.005
FFO**	$	38,308		$	41,217		$	(2,909	)		$	(0.024	)
Internal expenses for leases		(1,606	)		(1,349	)		(257	)			(0.003	)
Straight-line rent		(639	)		(1,091	)		452				0.004
Recoverable and non-recoverable costs		(5,934	)		(2,370	)		(3,564	)			(0.036	)
Tenant allowances and leasing costs		(3,347	)		(4,451	)		1,104				0.011
AFFO**	$	26,782		$	31,956		$	(5,174	)		$	(0.048	)

** Denotes a non-GAAP measure. See Section 1, "Basis of Presentation" – "Use of Non-GAAP Measures” and Section 12, "Non-GAAP Measures" in the MD&A.

^1Properties owned throughout the entire 24 months ended December 31, 2022, excluding properties under development or major redevelopment, are referred to as "Same Properties". Properties acquired during the 24 months ended December 31, 2022 are referred to as "Acquisition Properties". As at December 31, 2022 the HOOPP Properties are the only acquired properties.

The $0.024 decrease in quarter over quarter FFO** per unit was driven by $0.020 from timing of general and administrative expenses and $0.019 from net interest and other financing charges, partially offset by $0.009 from NOI** growth and $0.005 from the contribution due to the change in Units outstanding, as a result of NCIB activity. The $0.048 decrease in quarter over quarter AFFO** per unit is driven by the seasonality of recoverable capital projects.

To illustrate the positive impact of the NCIB activity on future results, on a stand-alone basis before considering the cost of capital, the below chart calculates the increase to FFO** and AFFO** per unit as if the Units purchased under the NCIB were cancelled for the entire 2022 year. The number of Units outstanding was the only variable changed in the analysis.

For the year ended, ($ thousands except per unit amounts) (unaudited)	December 31, 2022
FFO**	$	158,937
AFFO**	$	123,347
Units cancelled under NCIB (in thousands)		3,886
Impact of NCIB cancellations on future periods:
FFO** per unit cancelled	$	0.062
AFFO** per unit cancelled	$	0.048

** Denotes a non-GAAP measure. See Section 1, "Basis of Presentation" – "Use of Non-GAAP Measures” and Section 12, "Non-GAAP Measures" in the MD&A.

Occupancy and Leasing Results

The in-place occupancy rate of the Acquisition Properties of 88.4% (as defined in the following chart) has risen during 2022, but remains below the portfolio average of 91.1% and represents an opportunity for further organic growth. Of the 5.2% increase in the in-place occupancy rate for the Acquisition Properties during the year ended December 31, 2022, 1.5% can be attributed to leasing activities and 3.7% can be attributed to GLA taken offline as part of re-demising and redevelopment activities.

As at		Committed Occupancy		In-place occupancy
	Count	December 31, 2022		December 31, 2022		September 30, 2022		December 31, 2021
Same Properties**	26	92.6	%	92.3	%	91.5	%	90.0	%
Acquisition Properties**	8	89.2	%	88.4	%	88.7	%	83.2	%
	34	91.5	%	90.5	%	90.5	%	87.6	%
Property under redevelopment	1	96.3	%	96.3	%	96.3	%	52.9	%
Portfolio occupancy	35	91.5	%	91.1	%	90.7	%	86.0	%
Portfolio average in-place occupancy
Three months ended	35			91.0	%	90.0	%	—
Year to date	35			88.3	%	87.3	%	—

** Denotes a non-GAAP measure. See Section 1, "Basis of Presentation" – "Use of Non-GAAP Measures” and Section 12, "Non-GAAP Measures" in the MD&A.

In the quarter, Primaris completed 132 leasing deals totaling 0.4 million square feet. Overall renewal rents were up 3.5% comprised of commercial retail unit ("CRU") renewals of 2.3%, and large format renewals of 7.3%.

Included in the leasing activity for the three months and year ended December 31, 2022, are 32 and 204, respectively, new leases that were for a lease term of less than one year, or for percentage rent in lieu of base rent. While these lease structures have always been a tool to manage tenant relocations and the timing of development plans, during the pandemic leases structured as percentage rent in lieu of base rent were more prevalent to assist tenants and to maintain occupancy rates. As these leases mature, management anticipates moving tenants back to traditional lease structures.

Percentage Rent in Lieu of Base Rent Leases
As at	Number of Leases	Portion of Leases by Count^1
March 31, 2022	184	8.5 %
June 30, 2022	181	8.3 %
September 30, 2022	177	8.1 %
December 31, 2022	169	7.7 %
^1 Lease count excludes short term leases.

Robust Liquidity and Differentiated Balance Sheet

Primaris’ differentiated financial model is core to its overall strategy, providing a best-in-class capital structure upon which to build the business, providing on-going financial stability and strength. The following table summarizes Primaris' unencumbered assets and unsecured debt.

($ thousands) (unaudited) As at	Target Ratio	December 31, 2022		December 31, 2021
Unencumbered assets - number			30		26
Unencumbered assets - value		$	2,863,844	$	1,879,788
Unencumbered assets as a percentage of investment properties			91.8 %		58.7 %
Unsecured Debt to Total Debt**	>60%		78.6 %		—
Unencumbered Assets to unsecured debt		3.6x			—
Unencumbered Assets in excess of unsecured debt		$	2,069,844		—
Percent of Cash NOI** generated by unencumbered assets			90.2 %		55.5 %

** Denotes a non-GAAP measure. See Section 1, "Basis of Presentation" – "Use of Non-GAAP Measures” and Section 12, "Non-GAAP Measures" in the MD&A.

Liquidity at December 31, 2022 was $176.0 million.

There is no debt maturity in 2023.

Primaris has a NAV** per unit outstanding of $21.49.

On February 27, 2023, Primaris entered into an $85.0 million interest only mortgage with an annual interest rate of 5.516% and an eight-year term improving liquidity and extending the debt maturity profile. The funds were used to repay outstanding amounts on the revolving credit facility. Below are the proforma impacts on liquidity and unencumbered assets:

• liquidity increases to $261 million from $176 million;
• the percentage of fixed rate debt of Total Debt** increases to 79.3% from 70.9%;
• the ratio of secured debt as a percent of Total Debt** increases to approximately 29.8%, still well within the Trust's target of below 40%;
• unencumbered assets decreases to $2.7 billion or 86.3% of the investment properties;
• unencumbered assets in excess of unsecured debt becomes $2.0 billion; and
• the ratio of unencumbered assets to unsecured debt becomes 3.8x.

Conference Call and Webcast

Date: Wednesday March 1, 2023, at 10:00 a.m. (ET)

Webcast details:

Link: Please go to the Investor Relations section on Primaris’ website or click here.

Conference call details:

Dial:	For Canada please dial: 1-833-950-0062
	For International please dial: 1-929-526-1599
Passcode:	386305

The call will be accessible for replay until March 15, 2023, by dialing 1-226-828-7578 with access code 976343, or on the Investor Relations section of the website.

About Primaris Real Estate Investment Trust

Primaris is Canada’s only enclosed shopping centre focused REIT, with ownership interests primarily in dominant enclosed shopping centres in growing markets. The portfolio totals 10.9 million square feet valued at approximately $3.1 billion at Primaris’ share. Economies of scale are achieved through its fully internal, vertically integrated, full-service national management platform. Primaris is very well-capitalized and is exceptionally well positioned to take advantage of market opportunities at an extraordinary moment in the evolution of the Canadian retail property landscape.

Forward-Looking Statements and Future Oriented Financial Information Disclaimer

Certain statements included in this news release constitute ‘‘forward-looking information’’ or “forward-looking statements” within the meaning of applicable securities laws. The words “will”, “expects”, “plans”, "estimates", “intends” and similar expressions are often intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. Specific forward-looking statements made or implied in this news release include but are not limited to statements regarding: growth opportunities, estimated growth of Same Properties Cash NOI**, expected future distributions, the Trust’s development activities, expected benefits from the Trust's normal course issuer bid activity, occupancy improvement, increasing rental rates, future acquisitions, reinvestment in select shopping centres, internal NOI growth opportunity, refinancing risk, the Trust’s targets for managing its financial condition, the recovery of tenant sales, and the movement of tenants back to traditional lease structures. Forward-looking statements are provided for the purpose of presenting information about management’s current expectations and plans relating to the future and readers are cautioned that such statements may not be appropriate for other purposes. These statements are not guarantees of future performance and are based on estimates and assumptions that are inherently subject to risks and uncertainties, Primaris cautions that although it is believed that the assumptions are reasonable in the circumstances, actual results, performance or achievements of Primaris may differ materially from the expectations set out in the forward-looking statements. Material risk factors and assumptions include those set out in the MD&A which will be available on SEDAR, and in Primaris’ other materials filed with the Canadian securities regulatory authorities from time to time. Given these risks, undue reliance should not be placed on these forward-looking statements, which apply only as of their dates. Other than as specifically required by law, Primaris undertakes no obligation to update any forward-looking statements to reflect new information, subsequent or otherwise.

Readers are cautioned that there is a significant risk that actual results for the year ending December 31, 2023 will vary from the financial outlook statements provided in this press release and MD&A and that such variations may be material.

Certain forward-looking information included in this news release may also be considered “future-oriented financial information” or “financial outlook” for purposes of applicable securities laws (collectively, “FOFI”). FOFI about the Trust’s prospective results of operations including, without limitation, anticipated NOI** growth, impact on rental revenue of contractual rent-steps, anticipated general and administrative expense levels, and anticipated capital spending, is subject to the same assumptions, risk factors, limitations and qualifications set out in the MD&A which will be available on SEDAR, and in Primaris’ other materials filed with the Canadian securities regulatory authorities from time to time. The Trust and management believe that such FOFI have been prepared on a reasonable basis, reflecting management’s best estimates and judgments. However, because this information is subjective and subject to numerous risks, it should not be relied on as necessarily indicative of future results. FOFI contained in this news release was made as of the date of this news release and was provided for the purpose of providing further information about the Trust’s prospective results of operations. Readers are cautioned that the FOFI contained herein should not be used for purposes other than for which it is disclosed herein.

Readers are also urged to examine the Trust’s materials filed with the Canadian securities regulatory authorities from time to time as they may contain discussions on risks and uncertainties which could cause the actual results and performance of Primaris to differ materially from the forward-looking statements contained in this news release. All forward-looking statements in this news release are qualified by these cautionary statements. These forward-looking statements are made as of February 28, 2023 and Primaris, except as required by applicable securities laws, assumes no obligation to update or revise them to reflect new information or the occurrence of future events or circumstances.

Non-GAAP Measures

Information in this press release is a select summary of results. This press release should be read in conjunction with the Trust’s MD&A and the Trust's consolidated and combined carve-out financial statements and the accompanying notes (together the “Financial Statements”) for the three months and year ended December 31, 2022 and 2021.

The Financial Statements are prepared in accordance with International Financial Reporting Standards (“IFRS”). However, Primaris also uses a number of measures which do not have a standardized meaning prescribed under generally accepted accounting principles (“GAAP”) in accordance with IFRS. These non-GAAP measures, which are denoted in this press release by the suffix “**” include non-GAAP financial measures and non-GAAP ratios, each as defined in National Instrument 52-112, Non-GAAP and Other Financial Measures Disclosure ("NI 52-112"). None of these non-GAAP measures should be construed as an alternative to financial measures calculated in accordance with GAAP. Furthermore, these non-GAAP measures may not be comparable to similar measures presented by other real estate entities and should not be construed as an alternative to financial measures determined in accordance with IFRS. A definition of each non-GAAP measure used herein and an explanation of management's reasons as to why it believes the measure is useful to investors+ can be found in the section entitled “Non-GAAP Measures” in the MD&A, which section is incorporated by reference into this news release, and a reconciliation to the most directly comparable financial measure in the Financial Statements, in each case, can be found below. The MD&A is available on the Trust’s profile on SEDAR at www.sedar.com.

Use of Operating Metrics

Primaris uses certain operating metrics to monitor and measure the operational performance of its portfolio. Operating metrics in this news release include, among others, investment property count, gross leasable area (“GLA”), in-place occupancy, committed occupancy, weighted average net rent per occupied square foot, and normalized average operating capital cost per square foot. Certain of these operating metrics, including weighted average net rent per occupied square foot and normalized average operating capital cost per square foot, may constitute supplementary financial measures as defined in NI 52-112. These supplementary measures are not derived from directly comparable measures contained in the Financial Statements but may be used by management and disclosed on a periodic basis to depict the historical or future expected financial performance, financial position or cash flow of the Trust. For an explanation of the composition of weighted average net rent per occupied square foot and normalized average operating capital cost per square foot, see “Section 8, "Operational Performance" – “Weighted Average Net Rent” and “Operating Capital Expenditures” in the MD&A, respectively, which sections are incorporated by reference into this news release.

Reconciliations of Non-GAAP Measures

The following tables reconcile NOI** to rental revenue and property operating costs as presented in the audited annual consolidated Financial Statements.

For the periods ended December 31, ($ thousands) (unaudited)	Three months						Year End
		2022			2021			2022			2021
Rental Revenue	$	99,804		$	66,114		$	380,064		$	247,888
Property operating costs		(44,746	)		(29,535	)		(168,277	)		(106,294	)
Net Operating Income**		55,058			36,579			211,787			141,594
Exclude variances from:
Straight-line rent		(639	)		(869	)		(4,492	)		(3,133	)
Lease surrender revenue		(826	)		(73	)		(1,238	)		(3,348	)
Cash Net Operating Income**	$	53,593		$	35,637		$	206,057		$	135,113

** Denotes a non-GAAP measure. See Section 1, "Basis of Presentation" – "Use of Non-GAAP Measures” and Section 12, "Non-GAAP Measures" in the MD&A.

For the three months ended September 30, ($ thousands) (unaudited)		2022
Rental Revenue	$	94,15
Property operating costs		-39,944
Net Operating Income**		54,207
Exclude variances from:
Straight-line rent		-1,091
Lease surrender revenue		-13
Cash Net Operating Income**	$	53,10

** Denotes a non-GAAP measure. See Section 1, "Basis of Presentation" – "Use of Non-GAAP Measures” and Section 12, "Non-GAAP Measures" in the MD&A.

The following tables are a further analysis of Cash NOI** above.

For the periods ended December 31, ($ thousands) (unaudited)	Three months						Year End
		2022			2021			2022			2021
Same Properties NOI**	$	38,999		$	35,770		$	149,780		$	138,388
Exclude variances from:
Straight-line rent		(331	)		(874	)		(2,597	)		(3,103	)
Lease surrender revenue		(776	)		(73	)		(1,188	)		(3,348	)
Same Properties Cash NOI**		37,892			34,823			145,995			131,937
Same Property Growth		8.8	%					10.7	%
Cash NOI** from:
Property under redevelopment		1,140			814			4,861			3,176
Acquisitions		14,561			—			55,201			—
Cash NOI**	$	53,593		$	35,637		$	206,057		$	135,113

For the three months ended September 30, ($ thousands) (unaudited)
			2022
Same Properties NOI**			$ 37,984
Exclude variances from:
Straight-line rent			(764)
Lease surrender revenue			(13)
Same Properties Cash NOI**			37,207
Same Property Growth	+	10.3 %
Cash NOI** from:
Property under redevelopment			1,147
Acquisitions			14,749
Cash NOI**			$ 53,103

** Denotes a non-GAAP measure. See Section 1, "Basis of Presentation" – "Use of Non-GAAP Measures” and Section 12, "Non-GAAP Measures" in the MD&A.

The following tables reconcile net income, as determined in accordance with GAAP, to FFO**.

For the periods ended December 31, 2022 ($ thousands except per unit amounts) (unaudited)
	Three months			Year end
Net income (loss)	$	(25,770	)	$	(12,080	)
Reverse:
Adjustments to fair value of derivative instruments		240			240
Adjustments to fair value of unit-based compensation		890			(827	)
Adjustments to fair value of investment properties		61,342			165,743
Internal expenses for leases		1,606			5,861
Funds from Operations**		38,308			158,937
FFO** per unit - average basic	$	0.390		$	1.589
FFO** per unit - average diluted	$	0.387		$	1.580
FFO Payout Ratio** - Target 45% - 50%		52.1	%		50.7	%
Distributions declared per unit	$	0.202		$	0.802
Weighted average Units outstanding - basic (in thousands)		98,296			100,047
Weighted average Units outstanding - diluted (in thousands)		98,945			100,597
Number of Units outstanding - end of period (in thousands)		97,713			97,713

For the three months ended September 30, ($ thousands except per unit amounts) (unaudited)
		2022
Net income (loss)	$	(20,498	)
Reverse:
Adjustments to fair value of unit-based compensation		31
Adjustments to fair value of investment properties		60,335
Internal expenses for leases		1,349
Funds from Operations**		41,217
FFO** per unit - average basic	$	0.414
FFO** per unit - average diluted	$	0.411
FFO Payout Ratio** - Target 45% - 50%		48.6	%
Distributions declared per unit	$	0.200
Weighted average Units outstanding - basic (in thousands)		99,453
Weighted average Units outstanding - diluted (in thousands)		100,183
Number of Units outstanding - end of period (in thousands)		98,926

** Denotes a non-GAAP measure. See Section 1, "Basis of Presentation" – "Use of Non-GAAP Measures” and Section 12, "Non-GAAP Measures" in the MD&A.

The following tables reconcile FFO** to AFFO**.

For the periods ended December 31, 2022 ($ thousands except per unit amounts) (unaudited)
	Three months			Year end
Funds from Operations**	$	38,308		$	158,937
Reverse:
Internal expenses for leases		(1,606	)		(5,861	)
Straight-line rent		(639	)		(4,492	)
Deduct:
Recoverable and non-recoverable costs		(5,934	)		(11,496	)
Tenant allowances and external leasing costs		(3,347	)		(13,741	)
Adjusted Funds from Operations**		26,782			123,347
AFFO** per unit - average basic	$	0.272		$	1.233
AFFO** per unit - average diluted	$	0.271		$	1.226
AFFO Payout Ratio**		74.5	%		65.4	%
Distributions declared per unit	$	0.202		$	0.802
Weighted average Units outstanding - basic (in thousands)		98,296			100,047
Weighted average Units outstanding - diluted (in thousands)		98,945			100,597
Number of Units outstanding - end of period (in thousands)		97,713			97,713

For the three months ended September 30, ($ thousands except per unit amounts) (unaudited)
		2022
Funds from Operations**	$	41,217
Reverse:
Internal expenses for leases		(1,349	)
Straight-line rent		(1,091	)
Deduct:
Recoverable and non-recoverable costs		(2,370	)
Tenant allowances and external leasing costs		(4,451	)
Adjusted Funds from Operations**		31,956
AFFO** per unit - average basic	$	0.321
AFFO** per unit - average diluted	$	0.319
AFFO Payout Ratio**		62.7	%
Distributions declared per unit	$	0.200
Weighted average Units outstanding - basic (in thousands)		99,453
Weighted average Units outstanding - diluted (in thousands)		100,183
Number of Units outstanding - end of period (in thousands)		98,926

** Denotes a non-GAAP measure. See Section 1, "Basis of Presentation" – "Use of Non-GAAP Measures” and Section 12, "Non-GAAP Measures" in the MD&A.

The following tables calculate NAV** per unit outstanding.

As at ($ thousands) (unaudited)	December 31, 2022
Investment Properties	$	3,118,590
Other assets		83,191
Total assets		3,201,781
Mortgages payable		(215,680	)
Senior unsecured debentures		(350,000	)
Credit facilities		(444,000	)
Total Debt**		(1,009,680	)
Other liabilities		(104,472	)
Reverse: Obligation for purchase of Units under automatic share purchase plan^1		12,508
Net Asset Value**	$	2,100,137
Net Asset Value** per unit outstanding	$	21.49
Debt to Total Assets**^2 - Target 25% - 35%		31.5	%
Number of Units outstanding - end of period (in thousands)		97,713

As at ($ thousands) (unaudited)	September 30, 2022
Investment Properties	$	3,149,838
Other assets		31,474
Total assets		3,181,312
Mortgages payable		(345,158	)
Senior unsecured debentures		(350,000	)
Credit facilities		(245,000	)
Debt		(940,158	)
Other liabilities, excluding exchangeable units		(84,830	)
Reverse: Obligation for purchase of Units under automatic share purchase plan^1		6,637
Net Asset Value**	$	2,162,961
Net Asset Value** per unit outstanding	$	21.86
Debt to Total Assets**^2 - Target 25% - 35%		29.6	%
Number of Units outstanding - end of period (in thousands)	$	98,926

** Denotes a non-GAAP measure. See Section 1, "Basis of Presentation" – "Use of Non-GAAP Measures” and Section 12, "Non-GAAP Measures" in the MD&A.

^1 Liability recorded for the obligation to purchase Units during the blackout period after December 31, 2022 under the automatic share purchase plan, but respective Units not yet cancelled.

^2 The debt ratios are non-GAAP ratios calculated based on the Trust Indentures, as supplemented.

The following tables calculate financial ratios for debt to Adjusted EBITDA**, Interest Coverage and Debt Service.

For the periods ended December 31, 2022 ($ thousands) (unaudited)	Three months			Year end
Net income (loss)	$	(25,770	)	$	(12,080	)
Interest income		(277	)		(319	)
Net interest and other financing charges		10,518			33,400
Amortization		375			1,142
Adjustments to fair value of derivative instruments		240			240
Adjustments to fair value of unit-based compensation		890			(827	)
Adjustments to fair value of investment properties		61,342			165,743
Adjusted EBITDA**	$	47,318		$	187,299
Adjusted EBITDA**^1 - annualized	$	189,272		$	187,299
Average of Total Debt**	$	974,919		$	944,830
Average Debt** to Adjusted EBITDA**^1 - Target 4.0x - 6.0x	5.1x			5.0x
Interest expense^2	$	11,215		$	35,668
Interest Coverage**^1	4.2x			5.3x
Principal repayments	$	2,866		$	16,106
Interest expense^2	$	11,215		$	35,668
Debt Service Coverage**^1	3.4x			3.6x

For the three months ended September 30, ($ thousands) (unaudited)		2022
Net income (loss)	$	(20,498	)
Net interest and other financing charges		8,619
Amortization		374
Adjustments to fair value of unit-based compensation		31
Adjustments to fair value of investment properties		60,335
Adjusted EBITDA**	$	48,861
Adjusted EBITDA**^1 - annualized	$	195,444
Average debt	$	933,168
Debt to Adjusted EBITDA**^1 - Target 4.0x - 6.0x	4.8x
Interest expense^2	$	9,292
Interest coverage**^1	5.3x
Principal repayments	$	3,889
Interest expense^2	$	9,292
Debt service coverage**^1	3.7x

** Denotes a non-GAAP measure. See Section 1, "Basis of Presentation" – "Use of Non-GAAP Measures” and Section 12, "Non-GAAP Measures" in the MD&A.

^1 The debt ratios are non-GAAP ratios calculated based on the Trust Indentures, as supplemented.

^2 Interest expense includes interest on senior unsecured debentures, mortgages, and credit facilities. See Section 9.1, "Components of Net Income (Loss)" in the MD&A.