News Column

Dundee REIT Reports Strong 2012 Year-End Results, Distribution Increase and Appoints COO

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TORONTO, ONTARIO -- (Marketwire) -- 02/20/13 -- This news release contains forward-looking information that is based upon assumptions and is subject to risks and uncertainties as indicated in the cautionary note contained within this press release.

DUNDEE REIT (TSX: D.UN) today announced its financial results for the three and twelve months ended December 31, 2012, posting gains in comparative property performance and adjusted funds from operations per unit.


-- 4 cent increase to annualized distribution-- Appointment of Ana Radic as COO-- Completed $575.5 million sale of Industrial Portfolio and $104.8 million sale of other of non-core properties-- Redeemed $126.5 million of convertible debentures, reducing debt level and interest costs-- 48% debt-to-gross book value; 2.7 times interest coverage ratio; 5.1 year average term to maturity-- 6.3% increase in per unit funds from operations ("FFO") for the 12-month period-- 3.4% increase in per unit adjusted funds from operations ("AFFO") for the 12-month period-- 2.6% growth in comparative properties net operating income ("NOI") for the 12-month period-- Occupancy strong at 95.1%; average in-place net rents 12% below estimated market rents--------------------------------------------------------------------------------------------------------------------------------------------------------SELECTED FINANCIAL INFORMATION(unaudited) Years ended Three Months Ended December 31, --------------------------------------- ------------------($000's except unit and per unit December September December amounts) 31, 2012 30, 2012 31, 2011 2012 2011----------------------------------------------------------------------------Investment properties revenue (1) $ 191,999 $ 187,327 $ 126,912 $ 686,564 $404,774Net operating income ("NOI") (1)(2) 105,853 105,367 70,065 385,821 229,439Funds from operations ("FFO") (3) 68,905 72,879 48,210 263,488 159,397Adjusted funds from operations ("AFFO") (4) 58,060 61,286 41,047 221,960 137,675Investment properties value (1) 6,536,722 6,895,755 4,426,383Debt (1) 3,314,594 3,580,610 2,254,756Per unit data (basic)FFO $ 0.68 $ 0.72 $ 0.73 $ 2.86 $ 2.69AFFO 0.57 0.61 0.62 2.41 2.33Distributions 0.55 0.55 0.55 2.20 2.20Units (period end)REIT Units, Series A 97,618,625 96,984,321 66,193,060REIT Units, Series B 16,316 16,316 16,316LP Class B Units, Series 1 3,528,658 3,522,835 3,506,107 ----------------------------------------------------------Total number of units 101,163,599 100,523,472 69,715,483 ---------------------------------------------------------- ----------------------------------------------------------Portfolio gross leasable area (sq. ft.) (5) 22,948,293 22,365,500 18,941,594Occupied and committed space (5) 95.1 95.1% 95.6%--------------------------------------------------------------------------------------------------------------------------------------------------------See footnotes on page 4.

"Dundee REIT is entering its tenth year better and stronger than ever," said Michael Cooper, Vice Chairman and CEO of Dundee REIT. "We have a portfolio of high quality assets that are producing consistent results and a strong, conservative balance sheet. Overall, our business has never been in better shape."

Senior management will host a conference call to discuss the results tomorrow, February 21, 2013 at 2:00 p.m. (ET). To access the call, please dial: 416-849-5525 or toll free at 1-866-200-6965 and using passcode 63895136#. A taped replay of the call will be available for 30 days by dialling 646-216-7204 or 1-866-206-0173 and using passcode 279189#. To access the conference call via webcast, please go to Dundee REIT's website at and click on the link for News & Events, then click on Calendar of Events. The webcast will be archived for 30 days.


The Trust was very active in the commercial property investment markets throughout the year. Acquisitions completed throughout 2012 totalled $2.6 billion and added 9.9 million square feet of high quality office properties to its portfolio. In addition, the Trust remained focused on pruning its portfolio, completing the sale of $680.2 million of non-strategic assets totalling 5.8 million square feet.


In the fourth quarter, Dundee REIT acquired a co-owner's interest in nine suburban properties in Edmonton for $75.8 million and also acquired its co-owner's interest in State Street Financial Centre in downtown Toronto for approximately $77.3 million.

Approx. PurchaseYear-ended December Property GLA price 31, 2012 type (sq. ft.) ($000's)(i) Date--------------------------------------------------------------------------------------------------------------------------------------------------------5001 Yonge Street, Toronto office 309,138 $ 107,775 January 19, 201267 Richmond Street West, Toronto office 44,996 13,500 January 30, 2012Whiterock Portfolio office/ industrial/ retail 7,368,679 1,419,700 March 2, 2012Parking lots, Saskatoon - 9,567 18,000 March 12, 20121 Riverside Drive, Windsor office 235,915 35,800 April 26, 2012Scotia Plaza (two- thirds ownership interest) office 1,317,795 844,339 June 15, 2012Transamerica Portfolio (ROI Share at 60%) office 373,121 74,902 October 4, 201230 Adelaide St. E., Toronto (share at 50%) office 206,967 77,250 December 28, 2012----------------------------------------------------------------------------Total closed in 2012 9,866,178 2,591,266--------------------------------------------------------------------------------------------------------------------------------------------------------(i)Purchase price excludes transaction costs.


During the quarter, the Trust completed the disposition of its industrial portfolio for gross proceeds of approximately $575.5 million and also completed the sale of other non-strategic assets for gross proceeds of approximately $104.8 million.

Disposed Gross MortgagesYear-ended December Property GLA Proceeds discharged Date 31, 2012 type (sq. ft.) ($000)(1) ($000) disposed----------------------------------------------------------------------------ARAM Building, Calgary office 36,428 $ 7,700 $ - 2-Feb-12West Chambers, Edmonton office 92,560 24,200 6,786 15-Aug-124250 Albert Street, Regina retail 41,238 9,600 5,126 15-Aug-12885 Don Mills, Toronto office 59,449 8,975 4,547 30-Aug-1212804 137th Avenue, Edmonton retail 54,514 18,900 12,633 14-Sep-12Bisma Centre, Calgary office 27,496 9,200 - 19-Sep-12998 Parkland Drive, Halifax retail 33,857 7,170 4,624 4-Oct-12193 Malpeque, Charlottetown retail 41,573 5,100 - 4-Oct-12655 University Ave., Charlottetown retail 26,043 3,800 2,357 4-Oct-12Industrial Portfolio industrial 5,134,114 575,469 225,592 4-Oct-127102 7220 Barlow Trail SE, Calgary industrial 234,676 10,150 - 30-Nov-12----------------------------------------------------------------------------Total 5,781,948 680,264 $ 261,665--------------------------------------------------------------------------------------------------------------------------------------------------------625 University Park Drive, Regina retail 17,145 5,182 - 31-Jan-132640, 2510 - 2550 Quance Street, Regina retail 69,554 16,300 - 31-Jan-13----------------------------------------------------------------------------Closed in 2013 86,699 $ 21,482 $ ---------------------------------------------------------------------------------------------------------------------------------------------------------(1) Gross proceeds before transaction costs.OPERATIONAL HIGHLIGHTS-- Portfolio occupancy remains strong at 95.1% - The overall percentage of occupied and committed space across the Trust's remained strong at 95.1%, consistent with that of Q3 2012 and well ahead of the national industry average of 91.5%. On a comparative property basis, occupancy is up 10 basis points over Q3 2012 to 95.2%.-- Leasing activity - During the quarter, leasing activity included 277,000 square feet of new leasing and 497,000 square feet of renewals, reducing vacancy by approximately 44,000 square feet over the prior quarter. In addition, approximately 163,500 square feet of gross leasable area was committed for future occupancy at period end.-- Average in-place net rents 12% below market rents - The portfolio average in-place rent was $17.22 per square foot, up from $17.18 at September 30, 2012, yet remaining approximately 12% below estimated market rents.-- Adding depth to the management team - The Board of Trustees is pleased to announce that Ana Radic has been appointed as Chief Operating Officer of Dundee REIT. Ana is currently the Senior Vice President, Eastern Canada for Dundee REIT. Ana first worked with Dundee from 1997-2007, at which time her employment was transferred to GE Real Estate when Dundee sold its portfolio in Eastern Canada. Ana re-joined Dundee in 2010 and has been instrumental in re-building the Trusts' platform in Eastern Canada.FINANCIAL HIGHLIGHTS-- Comparative property NOI up $1.4 million, or 4% - Comparative property NOI was up $1.4 million, or 4%, on a quarterly basis and up $4.3 million, or 3% year-over-year, driven largely by leasing activity resulting in both occupancy and rental rate increases across the Calgary and Western Canada portfolios. Total NOI for the quarter is up $28.7 million, or 37%, including $35.0 million generated by properties acquired in 2012. Year-over-year, total NOI is up $158.1 million, or 61%, including 151.1 million generated by properties acquired during the year.-- Year-over-year FFO and AFFO per unit up 6% and 3%, respectively - On an annual basis, accretive acquisitions and comparative property growth contributed to per unit increases in FFO and AFFO of $0.17 and $0.08, respectively. Compared with Q3 2012, FFO and AFFO per unit decreased by $0.04 and $0.04, respectively, largely reflecting the temporary drag of cash on hand from asset sales completed early in the quarter not being redeployed until quarter end.-- 4 cent increase to annualized distribution rate - The Trust also announced that the Board of Trustees has approved an increase in Dundee REIT's annualized distributions to $2.24 per unit, an increase of 1.8%, or 4 cents per unit, from the previous distribution of $2.20 per unit on an annualized basis, commencing with the April 30, 2013 record date.

"I'm very pleased that we have been able to redeploy the cash proceeds from the sale of our industrial portfolio in a way that generates a high return and reduces our leverage," said Mario Barrafato, Chief Financial Officer of Dundee REIT.


The Trust remains focused on balance sheet management, redeploying excess cash received from asset sales in the fourth quarter to reduce its overall debt level. On December 31, 2012, $126.5 million was utilized by the Trust to redeem four series of its convertible debentures bearing interest at a weighted average face rate of 6% (6.8% effective rate factoring in costs); contributing to a reduction of debt-to-gross book value to 48.0% (September 30, 2012 - 50.5%, December 31, 2011 - 49.0%) and decreasing its weighted average interest rate.

December 31, December 31,Key performance metrics 2012 2011----------------------------------------------------------------------------Financing activities(6)Average effective interest rate(7) 4.33% 4.96%Level of debt (debt-to-gross book value)(8) 48.0% 49.0%Interest coverage ratio(9) 2.7 times 2.6 timesProportion of total debt due in current year 10.4% 7.5%Debt - average term to maturity (years) 5.1 years 5.2 yearsVariable rate debt as percentage of total debt 4.3% 1.3%----------------------------------------------------------------------------See footnotes on page 4

Other information

Information appearing in this news release is a select summary of results. The consolidated financial statements and management's discussion and analysis for the Trust, as well as its Supplementary Information Package are available at and on

Dundee REIT is an unincorporated, open-ended real estate investment trust. Dundee REIT is focused on owning, acquiring, leasing and managing well-located, high-quality central business district and suburban office properties. Its portfolio currently comprises approximately 23.1 million square feet of gross leasable area in major urban centres across Canada. Dundee REIT's portfolio is well diversified by geographic location and tenant mix. For more information, please visit


(1) Metrics include results and balances of equity accounted investments and exclude discontinued operations.(2) NOI - net rental income, exclude net rental income from properties held for sale and discontinued operations.(3) FFO - net income, adjusted for items including fair value adjustments on investment properties and financial instruments, gains on sale, and amortization of equipment.(4) AFFO - FFO adjusted for amortization of debt costs, deferred unit compensation expense, straight line rent and the Trust's estimates of normalized leasing costs and normalized non-recoverable recurring capital expenditures.(5) Excludes development and redevelopment properties and properties held for sale, and the current period also excludes discontinued operations - industrial properties.(6) The key performance indicators for December 31, 2012, exclude the results of operations and the debt of discontinued operations.(7) Average effective interest rate is calculated as the weighted average interest rate of all interest bearing debt, including debt related to equity accounted investments.(8) Level of debt is determined as total debt, including debt related to equity accounted investments, divided by total assets (including total assets of equity accounted investments and adjusted for accumulated amortization on property and equipment).(9) The interest coverage ratio for the period, including results from equity accounted investments, is calculated as net rental income plus interest and fee income, less general and administrative expenses, all divided by interest expense on debt.

Non-IFRS supplemental measures

NOI, FFO and AFFO are key measures of performance used by real estate operating companies; however, they are not defined by International Financial Reporting Standards ("IFRS"), do not have standard meanings and may not be comparable with other industries or income trusts.

Forward looking information

This press release may contain forward-looking information within the meaning of applicable securities legislation. Forward-looking information is based on a number of assumptions and is subject to a number of risks and uncertainties, many of which are beyond Dundee REIT's control, which could cause actual results to differ materially from those that are disclosed in or implied by such forward-looking information. These risks and uncertainties include, but are not limited to, general and local economic and business conditions; the financial condition of tenants; our ability to refinance maturing debt; leasing risks, including those associated with the ability to lease vacant space; and interest and currency rate functions. Our objectives and forward-looking statements are based on certain assumptions, including that the general economy remains stable, interest rates remain stable, conditions within the real estate market remain consistent, competition for acquisitions remains consistent with the current climate and that the capital markets continue to provide ready access to equity and/or debt. All forward-looking information in this press release speaks as of the date of this press release. Dundee REIT does not undertake to update any such forward-looking information whether as a result of new information, future events or otherwise. Additional information about these assumptions and risks and uncertainties is contained in Dundee REIT's filings with securities regulators, including its latest annual information form and MD&A. These filings are also available at Dundee REIT's website at

Dundee REIT
Michael J. Cooper
Vice Chairman and Chief Executive Officer
(416) 365-5145

Dundee REIT
Mario Barrafato
Senior Vice-President and Chief Financial Officer
(416) 365-4132

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