TORONTO, Feb. 26, 2019 (GLOBE NEWSWIRE) -- Canadian Apartment Properties Real Estate Investment Trust ("CAPREIT") (TSX: CAR.UN) announced today continuing strong operating and financial results for the three months and year ended December 31, 2018.

HIGHLIGHTS:

For the Year Ended December 31,					2018				2017
Portfolio Performance
Overall Portfolio Occupancy(1)					98.9	%			98.7	%
Overall Portfolio Net Average Monthly Rents(1),(2)				$	1,103			$	1,044
Operating Revenues (000s)				$	688,585			$	638,842
Net Rental Income ("NOI") (000s)				$	439,056			$	393,258
NOI Margin					63.8	%			61.6	%
Financial Performance
Normalized Funds From Operations ("NFFO") (000s)(3)				$	289,335			$	250,474
NFFO per Unit – Basic(3)				$	2.024			$	1.842
Cash Distributions Per Unit				$	1.313			$	1.275
FFO Payout Ratio(3)					66.7	%			71.7	%
NFFO Payout Ratio(3)					65.7	%			70.3	%
Liquidity and Leverage
Total Debt to Gross Book Value(1)					39.37	%			43.57	%
Total Debt to Gross Historical Cost(1)					54.54	%			56.24	%
Weighted Average Mortgage Interest Rate(1)					3.05	%			3.08	%
Weighted Average Mortgage Term (years)(1)					5.10				5.66
Debt Service Coverage (times)(4)					1.75				1.63
Interest Coverage (times)					3.44				3.19
Available Liquidity – Acquisition and Operating Facility (000s)(1)				$	266,325			$	86,792
(1	)	As at December 31.
(2	)	Net Average Monthly Rent ("Net AMR"), previously defined as "AMR", is defined as actual residential rents, net of vacancies, divided by the total number of suites in the property and does not include revenues from parking, laundry or other sources.
(3	)	These measures are not defined by IFRS, do not have standard meanings and may not be comparable with other industries or companies. Please refer to the cautionary statements under the heading "Non-IFRS Financial Measures" and the reconciliations provided in this press release.
(4	)	Based on the trailing four quarters.
Other					2018				2017
Weighted Average Number of Units - Basic (000s)					142,974				135,962
Number of Suites and Sites Acquired					1,791				1,924
Number of Suites Disposed					900				81
Closing Price of Trust Units(1)				$	44.30			$	37.32
Market Capitalization (millions)(1)				$	6,491			$	5,182
(1	)	As at December 31.

SUMMARY OF YEAR END 2018 RESULTS OF OPERATIONS

Strong Operating Results Supported by Strong Market Fundamentals

• Growth in revenue and NOI from stabilized properties driven by higher monthly rents and stronger occupancies compared to last year
• On turnovers, monthly residential rents for the year ended December 31, 2018 increased by 11.4% on 21.5% of the Canadian portfolio, compared to an increase of 7.2% on 24.0% of the Canadian portfolio for the year ended December 31, 2017
• On renewals, monthly residential rents for the year ended December 31, 2018 increased by 2.2% on 85.4% of the Canadian portfolio, compared to an increase of 1.9% on 82.9% of the Canadian portfolio for the year ended December 31, 2017
• Net AMR for the stabilized portfolio as at December 31, 2018 increased by 4.9% compared to December 31, 2017, while occupancy increased to 99.0%
• Net AMR increased due to the strong rents on turnovers, higher rental guideline increases in Ontario and British Columbia, and above guideline increases
• Year-over-year NOI increased significantly by 8.0% for the stabilized portfolio for the year ended December 31, 2018, compared to a year-over-year NOI increase of 2.9% for the stabilized portfolio for the year ended December 31, 2017
• NOI increased by 11.6% for the year ended December 31, 2018 compared to last year due to contributions from acquisitions, increased same property monthly rents, and lower operating expenses 
• NOI margin increased to 63.8% for the year ended December 31, 2018 due to higher monthly rents and lower vacancies, repair and maintenance (“R&M”) costs, wages, utility expenses and realty taxes as a percentage of operating revenues

Continued Fair Value Increases in Investment Properties

• For the year ended December 31, 2018, the fair value of investment properties increased by $990.5 million, primarily as a result of significant NOI growth in 2018 compared to 2017 driven by (i) significant rental increases on turnovers as current rents are substantially below market rents, especially in GTA and British Columbia, (ii) improved NOI margins due to operating efficiencies, and (iii) continued cap rate compression

Strong and Flexible Balance Sheet

• CAPREIT’s financial position continues to strengthen, with reduced leverage ratios
• Debt to Gross Book Value (“GBV”) reduced to 39.37% as at December 31, 2018 from 43.57% at December 31, 2017, due to increases in fair value of investment properties and equity raise
• Debt Service Coverage (“DSC”) ratio improved to 1.75 compared to 1.63 as at December 31, 2017 mainly due to significant organic NOI growth
• Liquidity available on our Credit Facilities is $266.3 million as at December 31, 2018
• Closed mortgage refinancing for $213.2 million for the year, with top-ups of $109.5 million, a weighted average term to maturity of 7.0 years and a weighted average interest rate of 3.22%
• CAPREIT’s mortgage weighted average term to maturity and the weighted average interest rate for the year ended December 31, 2018 are 5.1 years and 3.05%. CAPREIT continues to fix long-term mortgages to defend against the risk of rising interest rate environment

Delivering Unitholder Value

• NFFO up 15.5% for the year ended December 31, 2018
• Growth highly accretive as NFFO per Unit was up 9.9% despite a 5.2% increase in weighted average number of Units outstanding
• NFFO payout ratio for the year ended December 31, 2018 improved to 65.7% from 70.3% last year

Other Key Highlights

• Increased investment in Irish Residential Properties REIT plc (“IRES”) from 15.7% as at December 31, 2017 to 18.0% as at December 31, 2018, funded through CAPREIT’s Acquisition and Operating Facility
• Entered into an agreement pursuant to which European Commercial Real Estate Investment Trust (“ECREIT”) has agreed to acquire a portfolio of multi-residential properties located in the Netherlands from CAPREIT, comprising 2,091 suites in 41 properties, subject to shareholder approval

“In 2017 we celebrated twenty years of profitable growth and delivering stable, sustaining and increasing cash distributions to our Unitholders. 2018 was yet another record year for CAPREIT as we delivered strong results in all of our key performance benchmarks,” commented Mark Kenney, President and COO. “Looking ahead, we will continue to build and strengthen our future through programs and investments that ensure CAPREIT is the best place to work for our people, the best place to live for our residents, and the best place to invest for our Unitholders.”

OPERATIONAL AND FINANCIAL RESULTS

Portfolio Net Average Monthly Rents
		Total Portfolio							Properties Owned Prior to December 31, 2017
As at December 31,		2018			2017			2018			2017	(1)
		AMR	Occ. %		AMR	Occ. %		AMR	Occ. %		AMR	Occ. %
Average Residential   Suites	$	1,209	99.1	$	1,142	98.8	$	1,204	99.2	$	1,146	98.8
Average MHC Land    Lease Sites	$	395	97.6	$	388	98.3	$	396	97.5	$	388	98.3
Overall Portfolio   Average	$	1,103	98.9	$	1,044	98.7	$	1,097	99.0	$	1,046	98.7
(1) Prior period comparable Net AMR and occupancy have been restated for properties disposed of since December 31, 2017.

Overall Net AMR for the stabilized residential suite portfolio as at December 31, 2018 increased by approximately 5.1% (including the Netherlands), and 4.5% (excluding the Netherlands) compared to last year, while occupancies increased to 99.2%. The rate of growth in Net AMR is due to (i) the strong rental markets in British Columbia, Ontario, and the Netherlands (ii) a higher rental guideline increase in Ontario and British Columbia for 2018 of 1.8% and 4.0% respectively, compared to the permitted guideline increases of 1.5% and 3.7% respectively in 2017, and (iii) increases due to above guideline increases (“AGI”) achieved in Ontario.

Canadian Portfolio
For the Three Months Ended December 31,			2018			2017
			Change in monthly rent		Turnovers and Renewals(1)	Change in monthly rent		Turnovers and Renewals(1)
			$	%	%	$	%	%
Suite Turnovers			168.1	14.1	4.4	103.0	9.1	5.4
Lease Renewals			27.7	2.3	18.2	22.8	2.0	17.7
Weighted Average of Turnovers and Renewals			55.1	4.6		41.5	3.7
For the Year Ended December 31,			2018			2017
			Change in monthly rent		Turnovers and Renewals(1)	Change in monthly rent		Turnovers and Renewals(1)
			$	%	%	$	%	%
Suite Turnovers			131.3	11.4	21.5	79.4	7.2	24.0
Lease Renewals			26.1	2.2	85.4	21.7	1.9	82.9
Weighted Average of Turnovers and Renewals			47.2	4.1		34.6	3.1
(1	)	Percentage of suites turned over or renewed during the year based on the total number of residential suites (excluding co-ownerships) held at the end of the year.

The Netherlands Portfolio
For the Three Months Ended December 31,			2018			2017
			Change in monthly rent		Turnovers and Renewals(1)	Change in monthly rent		Turnovers and Renewals(1)
			€	%	%	€	%	%
Suite Turnovers			60.3	7.5	2.6	143.5	19.7	1.7
Lease Renewals			-	-	-	-	-	-
Weighted Average of Turnovers and Renewals			60.3	7.5		143.5	19.7
For the Year Ended December 31,			2018			2017
			Change in monthly rent		Turnovers and Renewals(1)	Change in monthly rent		Turnovers and Renewals(1)
			€	%	%	€	%	%
Suite Turnovers			89.1	11.4	7.6	166.7	27.2	4.4
Lease Renewals			23.6	3.1	54.4	18.2	2.7	25.2
Weighted Average of Turnovers and Renewals			31.6	4.1		40.1	6.4
(1	)	Percentage of suites turned over or renewed during the year based on the total number of Netherlands residential suites held at the end of the year.

Suite turnovers in the Canadian residential suite portfolio (excluding co-ownerships) for the three months and year ended December 31, 2018 resulted in monthly rents increasing by approximately $168 or 14.1% and $131 or 11.4%, respectively, compared to an increase of approximately $103 or 9.1% and $79 or 7.2% for the same periods last year, primarily due to the strong rental markets in British Columbia and Ontario.

Monthly rents on lease renewals in the Canadian residential suite portfolio (excluding co-ownerships) for the three months and year ended December 31, 2018 resulted in monthly rents increasing by approximately $28 or 2.3% and $26 or 2.2% compared to an increase of approximately $23 or 2.0% and $22 or 1.9% last year.

For the Netherlands portfolio, suite turnovers in the residential suite portfolio for the three months and year ended December 31, 2018 resulted in monthly rents increasing by approximately €60 or 7.5% and €89 or 11.4% compared to an increase of approximately €144 or 19.7% and €167 or 27.2% for the same periods last year. Monthly rents on lease renewals for the Netherlands portfolio for the year ended December 31, 2018 increased by approximately €24 or 3.1%, compared to €18 or 2.7% for the same periods last year.

Estimated Net Rental Revenue Run-Rate

CAPREIT’s annualized net rental revenue run-rate as at December 31, 2018 grew to $685.8 million, up 7.5% from $637.8 million as at December 31, 2017, primarily as a result of acquisitions during the year and higher rents. Net rental revenue run-rate net of dispositions for the 12 months ended December 31, 2018 was $643.6 million (December 31, 2017 – $605.0 million). For a detailed description of net rental revenue run-rate, see Results of Operations in Section III of the MD&A.

NOI for the Total Portfolio
		Three Months Ended								Year Ended
		December 31,								December 31,
($ Thousands)		2018		%(1)		2017		%(1)		2018		%(1)		2017		%(1)
Total Operating Revenues	$	177,667		100.0	$	164,432		100.0		688,585		100.0	$	638,842		100.0
Operating Expenses
Realty Taxes	$	(16,473	)	9.3	$	(17,131	)	10.4	$	(68,488	)	9.9	$	(67,078	)	10.5
Utilities		(15,240	)	8.6		(15,097	)	9.2		(56,913	)	8.3		(56,744	)	8.9
Other(2)		(34,018	)	19.1		(31,904	)	19.4		(124,128	)	18.0		(121,762	)	19.0
Total Operating Expenses	$	(65,731	)	37.0	$	(64,132	)	39.0	$	(249,529	)	36.2	$	(245,584	)	38.4
NOI	$	111,936		63.0	$	100,300		61.0	$	439,056		63.8	$	393,258		61.6
(1)  As a percentage of total operating revenues.
(2)  Comprises R&M, wages, general and administrative, insurance, advertising, and legal costs.

Operating Revenues

For the three months and year ended December 31, 2018, total operating revenues increased by 8.0% and 7.8%, respectively, compared to last year, due to the contribution from acquisitions, increased same-property monthly rents and continuing high occupancies.

Operating Expenses

Overall operating expenses as a percentage of operating revenues reduced to 37.0% and 36.2% for the three months and year ended December 31, 2018 compared to 39.0% and 38.4% in the prior year, respectively, mainly as a result of lower utilities due to reduced consumption, positive impacts of energy saving initiatives and sub-metering, and lower operating expenses due to lower R&M costs as a percentage of operating revenues.  

NOI Margin

For the three months and year ended December 31, 2018, the NOI margin on the total portfolio was 63.0% and 63.8%, respectively, compared to 61.0% and 61.6% for the same periods last year. The increase in the NOI margin is due to (i) higher monthly rents on a stabilized basis, (ii) lower vacancies, and (iii) lower R&M costs, wages and realty taxes as a percentage of operating revenues.

NON-IFRS FINANCIAL PERFORMANCE

For the year ended December 31, 2018, basic NFFO per Unit increased by 9.9% compared to last year, despite an approximate 5.2% increase in the weighted average number of Units outstanding, due primarily to strong organic NOI growth and contributions from acquisitions. For the three months ended December 31, 2018, basic NFFO per Unit increased by 8.8% compared to the same period last year. Management expects per Unit FFO and NFFO and related payout ratios to strengthen further in the medium term as a result of NOI contributions from recent acquisitions.

PROPERTY CAPITAL INVESTMENTS

During the year ended December 31, 2018, CAPREIT made property capital investments (excluding head office assets) of $193.5 million compared to $151.4 million for the last year. Management expects CAPREIT to complete property capital investments (excluding development and intensification) of approximately $198 million in 2019.

Property capital investments include suite improvements, common areas and equipment, which generally tend to increase NOI more quickly. CAPREIT also continues to invest in environment-friendly energy-saving initiatives, including high-efficiency boilers, energy-efficient lighting systems and water-saving programs, which have permitted CAPREIT to mitigate potential increases in utility and R&M costs and has improved overall portfolio NOI.

SUBSEQUENT EVENTS

On January 4, 2019, CAPREIT announced that it has closed on its previously announced issue and sale of 5,500,000 units for $45.50 per unit for aggregate gross proceeds of $250.3 million to a syndicate of underwriters led by RBC Capital Markets on a bought-deal basis. On January 11, 2019, CAPREIT announced that it has closed the issuance of an additional 825,000 units for $45.50 per unit for aggregate gross proceeds of $37.5 million (the “Over-Allotment Offering”), pursuant to the exercise of the over-allotment option. CAPREIT intends to use the net proceeds to partially repay the Acquisition and Operating Facility and the remainder, if any, for future acquisitions, capital expenditures and for general trust purposes.

On February 26, 2019, CAPREIT announced that it has completed the acquisition of a portfolio of 21 properties in six urban centres in the Netherlands, totalling 511 residential suites, for a purchase price of €98.0 million.  The acquisition was funded by CAPREIT’s Acquisition and Operating Facility.

On February 26, 2019, CAPREIT announced that its Board of Trustees had approved a 3.8% increase in monthly cash distributions to $0.1150 per Unit, or $1.38 per Unit on an annualized basis. The increase is effective with the March 2019 distribution payable on April 15, 2019 to Unitholders of record as at March 29, 2019.

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, 2018, 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 Mark Kenney, President and Chief Operating Officer (“COO”) and the CAPREIT Management Team, will be held Wednesday, February 27, 2019 at 10:00 am EST. The telephone numbers for the conference call are: Local/International: (416) 340-2216, North American Toll Free: (866) 225-0198.

A slide presentation to accompany Management's comments during the conference call will be available an 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 2963952#. The Instant Replay will be available until midnight, March 29, 2019. 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 (“MHC”) primarily located in and near major urban centres across Canada. As at December 31, 2018, CAPREIT had owning interests in 51,528 residential units, comprised of 44,935 residential suites and 32 MHC comprising 6,593 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 consolidated interim financial statements 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 discloses financial measures not recognized under IFRS which do not have standard meanings prescribed by IFRS. These include stabilized net rental income (“Stabilized NOI”), Funds From Operations (“FFO”), Normalized Funds From Operations (“NFFO”), Adjusted Cash Flow from Operations (“ACFO”), FFO and NFFO per Unit amounts and FFO, NFFO and ACFO payout ratios, and Adjusted Cash Generated from Operating Activities (collectively, the “Non-IFRS Measures”). These Non-IFRS Measures are further defined and discussed in the MD&A released on February 26, 2019, which should be read in conjunction with this press release. Since these measures are not recognized under IFRS, they may not be comparable to similar measures reported by other issuers. CAPREIT presents the Non-IFRS measures because Management believes these Non-IFRS measures are relevant measures of the ability of CAPREIT to earn revenue and to evaluate its performance and cash flows. A reconciliation of these Non-IFRS measures is included in this press release below. The Non-IFRS measures should not be construed as alternatives to net income (loss) or cash flows from operating activities determined in accordance with IFRS as indicators of CAPREIT’s performance or the sustainability of our distributions.

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, occupancy rates, productivity, 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 strategies 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, which, 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 on renewals will grow at levels similar to the rate of inflation; 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, investment restrictions, operating risk, energy costs, environmental matters, catastrophic events, insurance, capital investments, indebtedness, taxation-related risks, government regulations, controls over financial reporting, other legal and regulatory risks, the nature of units of CAPREIT (“Trust 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, risks related to acquisitions, cyber security risk and foreign operation and currency risks.  There can be no assurance that 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 26, 2019. The information in this press release is based on information available to Management as of February 26, 2019. 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

CAPREIT                                                CAPREIT                                                 CAPREIT
Mr. Michael Stein                                    Mr. Mark Kenney                                     Mr. Scott Cryer
Chairman                                                President & COO                                    Chief Financial Officer
(416) 861-5788                                       (416) 861-9404                                       (416) 861-5771


SELECTED FINANCIAL INFORMATION

Condensed Balance Sheets

As at	December 31, 2018		December 31, 2017
($ Thousands)
Investment properties	$	10,473,544	$	8,886,556
Total Assets		10,842,263		9,187,170
Mortgages payable		3,728,333		3,581,501
Bank indebtedness		567,365		446,895
Total Liabilities		4,525,563		4,263,764
Unitholders' Equity		6,316,700		4,923,406

Condensed Income Statements

			Three Months Ended							Year Ended
			December 31,							December 31,
				2018			2017				2018			2017
Operating Revenues
Revenue from investment properties			$	177,667		$	164,432			$	688,585		$	638,842
Operating Expenses
Realty taxes				(16,473	)		(17,131	)			(68,488	)		(67,078	)
Property operating costs				(49,258	)		(47,001	)			(181,041	)		(178,506	)
				(65,731	)		(64,132	)			(249,529	)		(245,584	)
Net Rental Income				111,936			100,300				439,056			393,258
Trust expenses				(12,833	)		(10,582	)			(39,515	)		(32,569	)
Unit-based compensation expenses				(7,602	)		(10,964	)			(34,672	)		(26,074	)
Fair value adjustments of investment properties				710,453			339,151				990,529			626,953
Realized loss on disposition of investment
properties				(2,017	)		(408	)			(2,594	)		(488	)
Amortization of property, plant and equipment				(1,302	)		(1,275	)			(4,976	)		(4,434	)
Fair value adjustments of exchangeable units				56			(469	)			(840	)		(852	)
Fair value adjustments of Investments				(412	)		-				3,740			-
Gain (loss) on derivative financial instruments				2,624			(2,986	)			13,141			(11,866	)
Interest and other financing costs				(38,599	)		(35,951	)			(135,211	)		(126,144	)
Foreign currency translation				(28,011	)		(1,494	)			(34,489	)		3,515
Other income				14,224			8,909				42,310			22,921
Net Income Before Income Taxes				748,517			384,231				1,236,479			844,220
Current and deferred income tax expense				(12,250	)		(7,271	)			(18,808	)		(7,409	)
Net Income				736,267			376,960			$	1,217,671		$	836,811
Other Comprehensive (Loss) Income			$	32,414		$	6,820			$	31,189		$	19,101
Comprehensive Income			$	768,681		$	383,780			$	1,248,860		$	855,912

Condensed Statements of Cash Flows

					Three Months Ended							Year Ended
					December 31,							December 31,
					2018			2017(1)				2018			2017(1)
Cash Provided By (Used In):
Operating Activities
Net income				$	736,267		$	376,960			$	1,217,671		$	836,811
Items related to operating activities not affecting cash:
Fair value adjustments - investment properties					(710,453	)		(339,151	)			(990,529	)		(626,953	)
Fair value adjustments - exchangeable units					(56	)		469				840			852
Fair value adjustments - investments					412			-				(3,740	)		-
Loss on disposition of investment properties					2,017			408				2,594			488
(Gain) Loss on derivative financial instruments					(2,624	)		2,986				(13,141	)		11,866
Amortization					3,690			3,530				14,100			13,146
Unit-based compensation expenses					7,602			10,964				34,672			26,074
Straight-line rent adjustment					(22	)		(11	)			(87	)		(231	)
Deferred income tax expense					12,250			7,263				18,794			7,263
Net profit from equity-accounted investments					(11,859	)		(6,780	)			(32,634	)		(15,344	)
Foreign currency translation					28,011			1,494				34,489			(3,515	)
					65,235			58,132				283,029			250,457
Net income items related to financing and
investing activities					27,843			32,829				116,650			107,562
Changes in non-cash operating assets and liabilities					49,349			17,558				31,498			922
Cash Provided by Operating Activities					142,427			108,519				431,177			358,941
Investing Activities
Acquisition of investment properties					(339,455	)		(139,572	)			(482,152	)		(471,330	)
Capital investments					(84,022	)		(44,261	)			(203,784	)		(163,728	)
Acquisition of investments					-			-				(25,443	)		-
Disposition of investment properties					29,547			16,159				81,872			16,734
Change in restricted cash					(624	)		(82	)			(1,045	)		(121	)
Investment income received					3,480			384				7,442			8,478
Cash Used in Investing Activities					(391,074	)		(167,372	)			(623,110	)		(609,967	)
Financing Activities
Mortgage financings					227,829			(166,490	)			391,234			464,516
Mortgage principal repayments					(29,705	)		(28,641	)			(116,877	)		(119,458	)
Mortgages repaid on maturity					(5,073	)		-				(103,734	)		(266,575	)
Financing costs					(1,411	)		(453	)			(2,412	)		(2,928	)
CMHC premiums on mortgages payable					(1,031	)		-				(3,469	)		(4,902	)
Interest paid					(28,676	)		(28,431	)			(114,271	)		(111,138	)
Bank indebtedness					128,882			311,968				85,981			427,925
Settlement of redemption liability					(16,611	)		-				(16,611	)		-
Proceeds on issuance of Units					9,699			400				208,948			8,121
Net cash distributions to Unitholders					(35,230	)		(31,476	)			(134,929	)		(120,749	)
Cash (Used) Provided by Financing Activities					248,673			56,877				193,860			274,812
Changes in Cash and Cash Equivalents During the
Year					(2,540	)		(1,976	)			(273	)		23,786
Effect of exchange rate changes on cash					2,566			-				2,200			-
Cash and Cash Equivalents, Beginning of the Year					25,687			25,762				23,786			-
Cash and Cash Equivalents, End of the Year				$	25,713		$	23,786			$	25,713		$	23,786
(1	)	Q4 2017 comparative balances have been restated to conform with current period presentation.

SELECTED NON-IFRS FINANCIAL MEASURES

A reconciliation of net income to NFFO is as follows:
		Three Months Ended							Year Ended
		December 31,							December 31,
($ Thousands, except per Unit amounts)		2018			2017				2018			2017
Net Income	$	736,267		$	376,960			$	1,217,671		$	836,811
Adjustments
Unrealized Gain on Remeasurement of Investment       Properties		(710,453	)		(339,151	)			(990,529	)		(626,953	)
Realized Loss on Disposition of Investment Properties		2,017			408				2,594			488
Remeasurement of Exchangeable Units		(56	)		469				840			852
Remeasurement of Investments(1)		412			-				(3,740	)		-
Remeasurement of Unit-based Compensation Liabilities		6,251			9,738				29,428			18,934
Interest on Exchangeable Units		(6	)		42				95			186
Corporate and Deferred Income Taxes		12,250			7,271				17,872			7,409
(Gain) Loss on Foreign Currency Translation		28,011			1,494				34,489			(3,515	)
FFO Adjustment for Income from Equity Accounted       Investments(2)		(9,655	)		(5,146	)			(25,159	)		(9,707	)
(Gain) Loss on Derivative Financial Instruments		(2,624	)		2,986				(13,141	)		11,866
Net FFO Impact Attributable to Non-Controlling Interest		5,596			4,654				9,821			4,718
Amortization of Property, Plant and Equipment		1,302			1,275				4,976			4,434
FFO	$	69,312		$	61,000			$	285,217		$	245,523
Adjustments:
Amortization of losses from AOCL to interest and other
financing costs		643			733				2,659			3,023
Net Mortgage Prepayment Cost		1,459			160				1,459			324
Other Employee Costs(3)		-			-				-			1,604
NFFO		71,414			61,893				289,335			250,474
NFFO per Unit – Basic		0.492			0.452				2.024			1.842
NFFO per Unit – Diluted		0.490			0.446				2.007			1.817
Total Distributions Declared(4)		48,671			44,497				190,124			176,024
NFFO Payout Ratio(5)		68.2	%		71.9	%			65.7	%		70.3	%
Net Distributions Paid(4)	$	34,770		$	31,366			$	135,727		$	121,953
Excess NFFO over Net Distributions Paid	$	36,644		$	30,527			$	153,608		$	128,521
Effective NFFO Payout Ratio(6)		48.7	%		50.7	%			46.9	%		48.7	%
(1)  Effective January 1, 2018, CAPREIT adopted IFRS 9 Financial Instruments. Under this standard, this investment has been
designated as FVTPL whereas previously it was designated as available-for-sale. Under the guidance in this new standard,
any mark-to-market gains or losses are recorded in the statement of income and comprehensive income whereas previously
they were recorded through OCI. The cumulative mark to market gains/losses have also been reclassified from
accumulated OCI to retained earnings on adoption of this standard.
(2)  Relates to unrealized gain on remeasurement of investment properties.
(3)  Expenses included in Unit-based compensation expenses relates to accelerated vesting of previously-granted RUR units.
(4)  For the 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, 2018.
(5)  The payout ratio compares distributions declared to NFFO.
(6)  The effective payout ratio compares net distributions paid to NFFO.

Reconciliation of cash generated from operating activities to Adjusted Cash Flows from Operations:

					Three Months Ended						Year Ended
					December 31,						December 31,
						2018			2017			2018			2017
Cash Generated From Operating
Activities					$	142,427		$	108,519		$	431,177		$	358,941
Adjustments:(1)
Interest expense included in cash flow
from financing activities						(28,676	)		(28,431	)		(114,271	)		(111,138	)
Non-Discretionary Property Capital
Investments(2)						(12,255	)		(9,836	)		(51,252	)		(38,724	)
Capitalized Leasing Costs(3)						1,409			(1,231	)		(1,046	)		(3,234	)
Amortization of Other Financing Costs(4)						(1,744	)		(1,522	)		(6,464	)		(5,689	)
Non-controlling Interest						(72	)		(129	)		(216	)		(184	)
Investment Income						3,480			384			7,442			8,478
ACFO					$	104,569		$	67,754		$	265,370		$	208,450
Total Distributions Declared					$	48,671		$	44,497		$	190,124		$	176,024
Excess (Deficit) ACFO Over Distributions Declared					$	55,898		$	23,257		$	75,246		$	32,426
ACFO Payout Ratio						46.5	%		65.7	%		71.6	%		84.4	%
(1	)	On a quarterly basis, a review of working capital is performed to determine whether changes in prepaids, receivable, deposits accounts payable and other liabilities, security deposits and other non-cash operating assets and liabilities were attributed to items  which were not indicative of sustainable cash flows available for distribution in line with the ACFO guidance provided by REALPAC. Based on review, it was concluded no adjustments needed.
(2	)	Non-Discretionary Property Capital Investments for the years ended December 31, 2018 and 2017 are based on the actual annual 2018 and annual 2017, respectively. For a reconciliation of actual non-discretionary property capital investments incurred during the period to forecast, please see Adjusted Cash Flows From Operations and Distributions Declared section of the MD&A.
(3	)	Comprises tenant inducements and direct leasing costs.
(4	)	Includes amortization of deferred financing costs, CMHC premiums, deferred loan costs and fair value adjustments.