Building on
an Industrious
Strategy
2022 Annual Report
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Our Mission
To provide
environments
that meet our
clients’ needs
and contribute
to realizing
their potential.
2022 Annual Report Table
A Word from our CEO
and Chair of the Board 6
A look back at the highlights of the year and
an overview of our financial results for the fourth
quarter of 2022, by Michel Léonard and Jocelyn
Proteau.
10
Our History
A glance at the evolution of BTB throughout
the past 16 years by reviewing some of our
most important milestones.
Highlights
The fourth quarter in numbers, including
a summary of our financial results.
12
Asset Breakdown
The breakdown of BTB’s assets by type (off-
downtown core office, industrial, and necessity-
based retail) and by geographic location.
14
Key Metric Evolution
A glimpse at some of BTB’s key metrics
throughout the past 5 years: rental revenue,
net operating income, recurring FFO, recurring
AFFO and market performance.
16
Top 10 Clients
19
An overview of our top 10 clients based on rental
revenue and leased area.
ESG
A presentation of our ESG priorities for 2023.
20
Client Spotlights
A recognition of our various clients, from small
retail businesses to industrial manufacturers.
22
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Our Team
An eye on the people who make BTB run,
our employees: the significant role of each
department in the company. People and their
stories are at the heart of our success.
Our Properties 29
A complete list of BTB’s properties spanning
throughout Canada in the regions of Montréal,
Quebec City, Ottawa, Saskatoon and Edmonton.
Our Recent Acquisitions 31
An overview of BTB’s 5 acquisitions from 2022:
4 industrial properties and 1 office property.
Management Discussion
and Analysis 43
Management’s analysis and commentary on the
company’s performance throughout the fourth
quarter and the past year.
Financial Statements 91
The audited consolidated statements of financial
position, comprehensive income, changes in
unitholders’ equity, and cash flows.
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of contents
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2022 Annual Report
A Word from
our CEO and
Chair of the Board
Michel Léonard,
President and CEO
Despite 2022 being a globally challenging
year, BTB showed its resistance and
solidity after 17 years of operations. Our
well-established position in the Canadian
landscape makes our investment trust one
of the most important in Québec.
For BTB, 2022 was marked by the formal
implementation of its strategic repositioning
announced in 2021, aimed at accentuating its growth
focused on industrial properties (60% by 2026) and
geographic diversification across Canada. The main
objective behind this transformation is to create
significant value for our shareholders, mitigate risks
during this period of economic instability and improve
the overall performance of our portfolio. From this
perspective, BTB has carried out a number of important
transactions and initiatives as part of this strategic
alignment in 2022. We are talking about more than
$94.4M invested in six new buildings, the integration
of new business intelligence system at the operational
level, the launch of a website in line with our ambitious
brand identity and the general achievement of our
objectives for the year.
A well-grounded strategy
We started 2022 auspiciously with the integration
of the acquisition of an industrial portfolio comprising
nine industrial properties located in Western Canada
at the end of 2021. A springboard in the implementation
of BTB’s strategic vision.
During the year, BTB disposed of eight properties, or
535,000 square feet, and purchased six, representing
354,000 square feet and $94.4 million in terms of
acquisitions. In total, four of the six properties acquired
in 2022 are industrial properties and located in Ottawa
and Edmonton. Consequently, 67% of the properties
acquired since 2021 are concentrated in the industrial
sector, 30% of which are located in Edmonton and
20% in Saskatoon. This year, we have also invested
in two class A office buildings in one of the liveliest
neighbourhoods of Ottawa, Ontario. It is important
to note that the dispositions negatively affected our
rental income by $3.5 million. On the other hand, the
acquisitions contributed positively by $22.2 million,
which is why we see a significant increase in rental
income of 19.1% compared to 2021.
BTB continues to invest in the industrial properties
segment and reduces its investments in office
properties while continuing its geographic expansion.
As a reference, BTB increased its percentage of
ownership of industrial buildings by 10% and reduced
its detention of office buildings by 6% compared to
2021. At the end of 2022, BTB’s portfolio is diversified
with 30% of assets located outside the province
of Québec with the following composition: 29.6%
industrial buildings, 49.0% office properties and 21.4%
necessity-based retail properties. One more step that
brings us closer to our 2026 goals.
Our clients: our main source of satisfaction
There is nothing more rewarding than the trust that our
clients place in us. Over time, they have shown their
support to us, and this is still the case today, since we
have reached a rent collection rate of 99.3% for the
year and finish 2022 with an occupancy rate of 93.2%.
We have thus renewed 505,189 square feet of leases
and signed 167,602 square feet of new leases for a total
of 672,791 square feet. Our top ten clients, including the
Government of Québec, the Government of Canada,
Walmart, WSP Canada, and Desjardins, among others,
generate more than 24% of our income. A proportion
of 28.9% of the Trust’s total income therefore comes
from leases signed with government organizations
from the federal, provincial and municipal sectors and
public companies, ensuring high stability and quality
for our operating cash flows.
Finally, it is interesting to note that BTB managed to
increase the average rent by 12.2% this year. The most
striking rent increase is in the office building segment,
up by 14.1%. These rent increases, coupled with other
factors such as a decrease of $3.5 million linked to
the dispositions concluded since the fourth quarter
of 2021, an increase of $22.2 million linked to new
acquisitions, and an increase in the physical occupancy
rate, result in a rental income of $119.5 million, a level
never previously reached by BTB (+19.1 % compared
to the corresponding period of the previous financial
year).
As always, we must highlight the work of our leasing
teams who have redoubled their efforts to target new
clients, maintain a privileged relationship with our
existing clients and adequately meet their needs to
solidify the foundations of BTB.
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2022 Annual Report An overview of the results of the fourth
quarter of 2022 and of our annual
performance
Our financial results for the fourth quarter have
considerably improved throughout our asset classes
and the different geographic regions. In 2022, our net
operating income (NOI) increased by 25.0% and our
same-property portfolio increased by 3.4% compared
to the corresponding period of 2021. With regards
to our rental income, it is up by 17.5% for the quarter,
around $120 M on an annual basis, a first in the history
of BTB.
Recurring FFO payout ratio was 66.1% compared to
71.2% for the year 2021. The recurring AFFO payout
ratio was 73.3% compared to 77.9% for the year 2021.
It is essential to note that these ratios had never been
reached before the end of the financial year 2022.
Our debt ratio testifies to the diligence and dedication
of our teams, who have been busy maintaining this rate
below 60.0%. Indeed, the quarter ends with a total debt
ratio of 58.5%, an improvement of 2.0% compared to
December 31, 2021. BTB also implemented a strategy
as to the acquisition of a series of debentures maturing
next year. Regarding the mortgages of BTB, only
$50M in loans come to maturity this year. Although an
increase in interest rates is envisaged, these renewals
will not significantly affect BTB’s results in the coming
months.
Sustainability and governance: our
priorities for the coming year
We know how important concerns related to ESG
criteria are in investment decision-making and can also
contribute to the well-being of our clients. Given the
nature of our activities, and because we are a public
company, we are responsible for aligning ourselves
to market standards and maintaining undeniable
transparency with regards to the impact our company
has on the environment. This is why we are committed
to defining key ESG criteria and targets that will allow
us to publish our first ESG report by the end of 2023.
With the support of experts in the matter, we intend to
raise awareness on these questions in all departments
at BTB in order to optimize our practices and the
performance of our buildings while contributing to
a lasting future.
It is important to underline the departure of Daniel
Fournier who sat on our Board of Trustees. We are
extremely grateful for his contribution to BTB’s growth
in the past two years. We wish him the greatest success
in his future endeavours.
It is also necessary to underline the commitment and
contribution of the members of the Board. Their vast
experience, good judgment and sense of responsibility
are an important asset to our company.
We are responsible for aligning
ourselves to market standards
and maintaining undeniable
transparency with regards
to the impact our company
has on the environment.
What to expect in 2023?
The year 2022 proved the importance of diversifying
one’s portfolio, a point on which BTB has been
emphasizing for almost three years. The quality of
our portfolio and the selection of solid assets have
preserved our results and secured the revenue of
our investors by finishing the financial year of 2022
on a positive note. This year again, our Trust has
demonstrated its robustness and its desire to go
even further. We are proud to build our future on an
industrious strategy, and we are approaching 2023
serenely. It goes without saying that our teams are
ready to take up the challenges of this new year.
We wanted to end by thanking our investors who
continue, year after year, to believe in our plan and our
commitment to manage this business in a prudent,
but profitable way. We are grateful for this trust and
work hard to make this relationship last.
We also wanted to thank all our teams without whom
such results would not be possible and ultimately our
Board of Trustees whose commitment to BTB is total.
Jocelyn Proteau,
Chair of the Board
of Trustees
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2022 Annual Report y
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2006-2008
-
Mainly located in Montréal
and in secondary
markets, 44 properties
are acquired by a team
of five people. These first
two inception years also
mark by the first wave
of acquisitions in both
Ontario and Québec.
2021
-
BTB acquires 10 industrial
assets located in Western
Canada for $94M, marking
its expansion into two
Canadian provinces. This
acquisition also allows
BTB to exceed the
threshold of $1 billion
in total asset value.
2011-2012
-
BTB is listed on the
Toronto Stock Exchange.
Throughout these two
years, BTB acquires nine
industrial properties
in the provinces of Ontario
and Québec.
Over time, BTB has
been able to evolve
and seize the right
opportunities. This
year’s strategic vision
focuses on industrial
assets. Here is an
overview of our past
achievements:
2005-2006
-
On September 8, 2005,
Michel Léonard, accompanied
by Jocelyn Proteau, founds
a capital pool corporation
called Capital ABTB. In 2006,
the name is modified to BTB
and is officially listed on the
Toronto Venture Exchange
under BTB.P. The company
acquires its first property
at 2900 Jacques-Bureau
Street in Laval, Québec.
2010
-
The acquisition of the
public company CAGIM
Immobilier based in
Quebec City marks BTB’s
significant expansion
to the city. A total of six
properties representing
1.5 million square feet
are acquired.
2017-2019
-
BTB repositions its portfolio
by selling its assets located
in secondary and tertiary
markets. In order to meet
the company’s growth
needs, BTB acquires its
first building in downtown
Montréal for $35 million
and makes this building
its head office.
2022
-
BTB strikes hard by
announcing the evolution of
its corporate identity and its
new growth objectives for
the next five years: to reach
$2 billion in total assets
with a portfolio composition
of 60% industrial assets,
30% off-downtown core
office properties and 10%
necessity-based retail
properties. Simultaneously,
BTB acquires six new
properties, four of which
are industrial assets.
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2022 Annual Report
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$1.2B
Total assets
73
Properties
5.9M
sq. ft.
Total leasable area
93.2%Occupancy rate
Rental income
Q4 2022:
2022:
$31.5M
Q4 2021: $26.8M
$119.5M
2021: $100.3M
Same-property NOI
Q4 2022:
2022:
$13.8M
Q4 2021: $12.9M
$52.5M
2021: $50.7M
Recurring funds from
operations (FFO) per unit(1)
Q4 2022:
11.8¢
Q4 2021: 11.0¢
2022:
45.4¢
2021: 42.1¢
Recurring adjusted funds from
operations (AFFO) payout ratio(1)
Q4 2022:
2022:
74.9%
Q4 2021: 80.0%
73.3%
2021: 77.9%
2022 has had its share of challenges,
yet our teams have never weakened.
On the contrary, they demonstrated
flexibility, dedication and resilience
throughout the year. Once again,
all our energy was directed towards
achieving and exceeding our annual
objectives, offering quality service
to our clients and the ambition to
always go further.
Our results for the fourth quarter
of 2022 are record-breaking and
representative of our perseverance.
Compared to the corresponding
period of 2021, we see a 3.4%
increase in the same property net
operating income (NOI), a 19.1%
improvement in rental income
and a recurring AFFO payout ratio
amounting to 73.3%, for a difference
of 4.6%.
As such, we are proud to close the
year with the following highlights.
Our business strategy has proven
itself. We need only continue our
efforts in this direction and keep on
building on our industrious strategy.
(1) This is a non-IFRS financial measure, refer to page 45.
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2022 Annual Report Asset Types
Geographic Locations
BTB’s presence in Canada’s
primary markets such
as the Greater Montréal
Area, Quebec City, Ottawa,
Edmonton and Saskatoon
has continued to grow this
year.
Our investment strategy
has focused on industrial
and office assets with the
acquisition of two industrial
properties in Edmonton (AB),
one industrial property in
Montreal (QC) and another
in Ottawa (ON), as well as two
office properties in Ottawa
(ON) for a total of 354,637
square feet of leasable area.
We are taking advantage of
this momentum to get closer
to our 2026 objectives and
end the year with a total of
73 properties and 5.9 M
square feet of leasable area.
Here is the breakdown by
total leasable area of our
asset portfolio by region as
well as a comparison with the
last two years.
Off-downtown core office
Industrial
Necessity-based retail
Q4 2020
Q4 2021
18%
27%
55%
23% 25%
52%
Q4 2022
21%
30%
49%
2026 Objective
30%
%
10
60%
5.5%
Edmonton
8 properties ($86.0M)
321,947 sq. ft.
99.1% occupancy rate
2020: N/A
3.8%
Saskatoon
4 properties ($85.8M)
223,472 sq. ft.
100.0% occupancy rate
2020: N/A
4
1
Percentages are presented based on property value.
Percentages are presented based on total leasable area.
23.6%
Quebec City
11 properties ($225.2M)
1,380,146 sq. ft.
84.0% occupancy rate
2020: 25.9%
11 properties ($246.7M)
1,378,454 sq. ft.
89.1% occupancy rate
13.7%
Ottawa
11 properties ($174.2M)
805,157 sq. ft.
94.4% occupancy rate
2020: 20.6%
13 properties ($141.5M)
1,096,792 sq. ft.
93.3% occupancy rate
53.4%
Montréal
39 properties ($631.8M)
3,125,896 sq. ft.
95.8% occupancy rate
2020: 53.5%
40 properties ($515.8M)
2,848,396 sq. ft.
93.3% occupancy rate
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2022 Annual Report Key Metric Evolution*
Rental revenue
2018
2019
2020
2021
2022
$87,423
$93,602
$92,969
$100,343
$119,495
NOI
2018
2019
2020
2021
2022
$47,637
$50,897
$51,260
$56,336
$70,430
Recurring FFO per unit (1)
Recurring AFFO payout ratio(1)
.
¢
0
5
4
.
¢
7
0
4
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¢
3
8
3
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1
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2
4
.
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4
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9
.
1
1
1
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1
7.
9
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0
2
0
1
.
%
9
7.
7
%
3
3
7
.
2018
2019
2020
2021
2022
2018
2019
2020
2021
2022
*For the years ending on December 31, in thousands of dollars. (1) This is a non-IFRS financial measure, refer to page 45.
BTB’s Total Return
S&P/TSX Index Total Return
S&P/TSX Capped REIT Index Total Return
Performance on the markets
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Who We Are
Dynamic
m
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2022 Annual Report
Who We Are
Approachable
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p
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T
Above is a list of our top 10 clients based on
revenue and leased area. They make up 24.0%
of our total revenue and 21.8% of our total
leased area, equalling 1,277,364 square feet.
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2022 Annual Report
2023 ESG Priorities
14Alvéole beehives
This year, BTB teams will be mobilized to centralize
existing sustainable development efforts, improve
them, and identify new opportunities to minimize
our environmental footprint. The main objective for
2023 lies in the drafting and preparation of a first
ESG report, and consequently in the definition of the
environmental, social and governance targets that
we will have set. We will strive to disclose quantifiable
and transparent information.
To accomplish this, we are currently focusing on
managing the renewal of expiring BOMA BEST®
certifications. At the same time, we are looking
to increase the number of hives installed on the roof
of our properties in partnership with Alvéole, which
now total fourteen (14). The addition of new BOMA
BEST® and LEED® certified buildings is also part
of our longer-term strategy.
The main objective for 2023 lies
in the drafting and preparation
of a first ESG report, and
consequently in the definition
of the environmental, social
and governance targets that
we will have set.
BTB’s ambition to move towards acquiring more
industrial properties involves a fundamental
understanding of each asset class. Office,
commercial or industrial buildings typically have very
different activities, and therefore do not all have the
same issues in terms of ESG. Industrial properties
usually face more challenges regarding resource
consumption, pollutant emissions and hazardous
waste management. It is therefore essential that
each of our teams be made aware of ESG criteria
in order to act accordingly and offer our clients
working environments that meet the best
performance standards.
22BOMA BEST®
certified properties
46%of BTB directors
are women
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0
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2022 Annual Report Pure Wellness Studio
1921, 91st Street, Edmonton AB
Pure Wellness Studio is an Edmonton-based business
founded on the belief that all people deserve to be
healthy. With more than 2,850 square feet available
in one of our Edmonton properties, their team will
be offering professional registered massage therapy,
acupuncture, as well as personal training and a variety
of small group training classes.
Edmonton
NCSG Crane & Heavy Haul
28765, Acheson Road, Acheson AB
NCSG provides mobile crane rental and heavy haul services
throughout Western Canada. With approximately 400
employees in 10 branch locations throughout the energy
corridor of Canada, NCSG’s headquarters have been
located in BTB’s property since 2015.
Saskatoon
Client Spotlights
At BTB, our tenants are more than tenants: they’re our
clients. We are entirely dedicated to providing them with
the right space to fit their needs. Here are the stories
of a few of our clients from the Western Canada region.
2
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Saputo Foodservice
3927-3931, Wanuskewin Road, Saskatoon SK
Ideally located near the South Saskatchewan River
and Marquis Drive, in the northeast part of Saskatoon
since 2013, Saputo’s goal is to serve and support local
restaurants, pizzerias and foodservice operators with
excellent customer service and expert guidance.
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2022 Annual Report A Dedicated Team
From accounting to
legal, our employees
are dedicated to
satisfying our clients
and investors.
Let’s hear from our
departments, each
contributing in their
own ways to BTB’s
success.
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2
5
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2022 Annual Report Our Legal Team
Integrity, cooperation, commitment and rigor
The role of our legal department is to limit the risk of external litigation
by writing all the different agreements between BTB and our tenants and
potential customers. They are also responsible for the compliance of all
the company’s leasing activities with applicable laws and they contribute
to the documentation of acquisition and disposition activities. Our team
needs to ensure that the terms of the lease are clear, without ambiguity
or interpretation discrepancies between parties.
Their challenges
TE: The biggest challenge so far is adapting
to the new reality of the real estate market
following the pandemic.
EC: The constant adaptation to the real estate
market, new procedures and new recruits.
AB: In the legal department, there are often
emergencies that happen. It’s never routine.
You have to be creative to find solutions.
What they like about their job
AB: My favorite part is when issues arise and I have
to figure out a solution. I have to read through the
entire lease and its amendments and read all the
clauses – I get to play detective a bit and I find it
interesting.
HJM: I like the fact that we occupy a pivotal role in
the company. There isn’t a client or a file that goes
without our review.
Their accomplishments
HJM: We managed to build a really solid team.
We help each other, we are very cooperative
with each other and that is reflected in our work.
Team members:
André Barr, Ève Charbonneau,
Tania El-Helou, Chanel Lev,
Henry Jeff Marcel, Paola Torres
Legal
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Account-
ing
Our Accounting Team
Respect, quality, communication, transparency and patience
There are two main functions to the accounting department. Corporate
accounting and accounts payable, which guarantee the financial
obligations of the Trust and maintain cash flow up to date; and property
accounting, which organizes the different profit centers of the company,
separated by property, all while connecting the policy of senior
management with the legal department and operational managers.
Their challenges
DA: Ensuring that all information reflects reality
and complying with accounting principles to
present accurate results in a timely manner.
PT: We have to prioritize quality. Given that we are
listed on the stock exchange, the requirements
are very high.
What they like about their job
RM: Engaging with others and seeing the kindness
of all departments. This is the reason why I get up
in the morning. BTB is an inclusive and diverse
company. The contribution of each employee is
recognized and valued.
DB: People! The work environment at BTB is
very inviting.
PT: Learning. Every day I learn something new
and I am continuously improving.
NH: The teamwork is very motivating. We
collaborate and communicate effectively.
Their accomplishments
NJ: The greatest accomplishment is all the
teamwork in the accounting department.
We are always improving our working methods
and optimizing our processes.
RM: The implementation of a new business
intelligence system that allows for more effective
monitoring of operations and the optimization
of accounts payable.
Team members:
Elie Artine, Dora Ascoycancino,
Deborah Blakeley, Ounissa Bouaraba,
Nabila Hantous, Nathalie Jacques,
Irena Liu, Ramatou Maiga, Maryam Majidi,
Katy Sedaghatian, Iryna Somich,
Plamen Todorov, Laetitia Viho
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2022 Annual Report Who We Are
Authentic
Our Properties
North Shore of Montréal
2900 Jacques-Bureau
Street, Laval
4535 Louis B. Mayer Street,
Laval
315-325 MacDonald Street,
St-Jean-sur-Richelieu(1)
Montréal
1327-1333 Ste-Catherine
Street West and 1405-1411
Crescent Street, Montréal
5810 Sherbrooke Street
East, Montréal(1)
2101 Sainte-Catherine
Street West, Montréal
3761-3781 des Sources
Blvd, Dollard-des-Ormeaux
11590-11800
de Salaberry Blvd,
Dollard-des-Ormeaux(1)
1325 Hymus Blvd, Dorval
4105 Sartelon Street,
St-Laurent
208-244 Migneron Street
and 3400-3410 Griffith
Street, St-Laurent
7777 Transcanada Highway,
St-Laurent
3695 Des Laurentides
(Highway-15), Laval
3111 Saint-Martin Blvd West,
Laval(2)
3131 Saint-Martin Blvd West,
Laval
5791 Laurier Blvd,
Terrebonne
2175 Des Entreprises Blvd,
Terrebonne
2205-2225 Des Entreprises
Blvd, Terrebonne
2005 Le Chatelier Street,
Laval(2)
South Shore of Montréal
4890-4898 Taschereau
Blvd, Brossard(1)
Ottawa Area
80 Aberdeen Street, Ottawa(1)
245 Menten Place, Ottawa(1)
1-9 and 10 Brewer Hunt Way
and 1260-1280 Teron Rd,
Ottawa(1)
400 Hunt Club Rd, Ottawa
2200 Walkley Street, Ottawa(1)
2204 Walkley Street, Ottawa(1)
2611 Queensview Drive,
Ottawa(2)
979 & 1031 Bank Street,
Ottawa(2)
7 and 9 Montclair Blvd,
Gatineau(1)
1100 Algoma Road,
Ottawa
Edmonton
6909 - 42 Street, Leduc
1921 - 91 Street, Edmonton
18410 - 118A Avenue NW,
Edmonton
18028 - 114 Avenue NW,
Edmonton
28765 Acheson Road,
Acheson
25616 - 117 Avenue NW,
Acheson
3905 Allard Avenue,
Edmonton
8743 50 Avenue NW,
Edmonton
Saskatoon
3542 Millar Avenue,
Saskatoon
318 - 68th Street,
Saskatoon
3911 Millar Avenue,
Saskatoon
3927 and 3931 Wanuskewin
Road, Saskatoon
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1000 Du Séminaire Blvd
North, St-Jean-sur-
Richelieu(1)
340-360, 370-380, 375 and
377-383 Sir-Wilfrid-Laurier
Blvd, Mont-Saint-Hilaire
1465-1495 and 1011-1191
Saint-Bruno Blvd and 800
de l’Étang Street, Saint-
Bruno-de-Montarville
Quebec City Area
6655 Pierre-Bertrand Blvd,
Quebec City(1)
6700 Pierre-Bertrand Blvd,
Quebec City(1)
909-915 Pierre-Bertrand
Blvd, Quebec City
825 Lebourgneuf Blvd,
Quebec City(1)
815 Lebourgneuf Blvd,
Quebec City(1)
1170 Lebourgneuf Blvd,
Quebec City(1)
625-675 De la Concorde
Street, Lévis
1200-1252 De la Concorde
Street, Lévis
191 D’Amsterdam Street,
St-Augustin-de-Desmaures
175 De Rotterdam Street,
St-Augustin-de-Desmaures
505 Des Forges Street
and 1500 Royale Street,
Trois-Rivières(1)
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2250 Alfred-Nobel Blvd,
St-Laurent
204 De Montarville Blvd,
Boucherville(1)
2600 Alfred-Nobel Blvd,
St-Laurent(2)
32 Saint-Charles Street
West, Longueuil(1)
2344 Alfred-Nobel Blvd,
St-Laurent(2)
50 Saint-Charles Street
West, Longueuil
7150 Alexander-Fleming
Street, St-Laurent
85 Saint-Charles Street
West, Longueuil(1)
6000 Kieran Street,
St-Laurent
2111 Fernand-Lafontaine
Blvd, Longueuil
2425 Pitfield Blvd,
St-Laurent
2350 Chemin du Lac,
Longueuil
2665-2673 and 2681, Côte
Saint-Charles, Saint-Lazare
1939-1979 F.-X. Sabourin
Street, St-Hubert
3190 F.-X. Tessier Street,
Vaudreuil-Dorion
145 Saint-Joseph Blvd,
St-Jean-sur-Richelieu(1)
(1) BOMA BEST certified property (2) LEED certified property
2022 Annual Report Who We Are
Driven
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In total, 60% of the properties we acquired in 2022
were industrial properties, located in Ottawa and
Edmonton. We also invested in two Class A office
properties in one of the liveliest neighborhoods
of Ottawa, Ontario. We disposed of 5 industrial
properties and 3 office properties located in the
provinces of Ontario and Québec.
We continue to be active, targeting properties
that correspond with our investment strategy.
We are approaching 2023 serenely and are ready
to continue our growth and to geographically
diversify our portfolio.
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2022 Annual Report
979 & 1031 Bank Street
Ottawa, ON
On January 7th, 2021, we finalized
the acquisition of two Class A office
properties located in the Glebe
neighbourhood, one of Ottawa’s trendy
neighbourhoods just south of the
downtown core. Both properties were
built in 2015 and showcase breathtaking
architectural designs with glass curtain
walls, attractive and modern elevators,
and a lobby with contemporary finishes.
Purchase price: $38.1M*
Property types: office
Total leasable area: 116,226 sq.ft.
Major tenants: The Royal College of Physicians
and Surgeons of Canada, BMO Nesbitt Burns,
CIRA, Field Effect Software, CPCS solutions
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*Purchase price excluding transaction costs and adjustments.
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2022 Annual Report 1100 Algoma Road
Ottawa, ON
On April 5th, 2022 we finalized the
acquisition of this industrial property,
which is fully leased to Ontario Medical
Supply, a subsidiary of Medical
Pharmacies Group. They operate
25 pharmacies located in medical
buildings in Ontario and are the Ontarian
leaders in long-term care, including
nursing services and retirement
communities.
Purchase price: $12.5M*
Property type: industrial
Total leasable area: 46,400 sq.ft.
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*Purchase price excluding transaction costs and adjustments.
5
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2022 Annual Report 3190 F.-X. Tessier Street
Vaudreuil-Dorion, QC
On June 17th, 2022 we finalized the
acquisition of this Class A industrial
property, which is fully leased to
Amylior, a leader in the design,
development and manufacturing
of high-end motorized wheelchairs,
seating and positioning systems
and accessories.
Purchase price: $15M*
Property type: industrial
Total leasable area: 67,162 sq.ft.
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*Purchase price excluding transaction costs and adjustments.
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2022 Annual Report 3905 Allard Avenue
Edmonton, AB
On June 29th, 2022 we finalized the
acquisition of this industrial property,
which is fully leased to H.E. Parts
International. Their mission is to provide
customers with the highest quality spare
parts, components and services that
improve performance, extend life cycles,
and reduce costs.
Purchase price: $13.0M*
Property type: industrial
Total leasable area: 51,747 sq.ft.
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*Purchase price excluding transaction costs and adjustments.
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2022 Annual Report 8743 50th Avenue NW
Edmonton, Alberta
On September 8th, 2022, we finalized the acquisition of this industrial
property, which is fully leased to the Redco Equipment Sales Group,
one of the major players in the wellhead completion tools sector in the
Canadian fossil energy market. Over the past twenty years,
Redco has experienced unparalleled growth, continually picking up
market share and diversifying with new product offerings and strategic
acquisitions of proprietary technologies. The company now has more
than 250 employees, and its operations extend across Western
Canada, from British Columbia to Saskatchewan.
Purchase price: $15.8M*
Property type: industrial
Total leasable area: 72,088 sq.ft.
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*Purchase price excluding transaction costs and adjustments.
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2022 Annual Report Who We Are
Open-minded
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Year ended December 31, 2022
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48
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51
52
53
53
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58
63
Introduction
Forward-Looking Statements – Caveat
Non-IFRS Financial Measures
The Trust
Objectives and Business Strategies
Highlights of the Fourth Quarter Ended December 31, 2022
Selected Financial Information
Selected Annual Information
Selected Quarterly Information
Operating Performance Indicators
Real Estate Portfolio
Real Estate Operations
Operating Results
Adjusted Earnings Before Interest, Taxes, Depreciation
and Amortization (EBITDA)
64
65
66
67
68
69
71
73
79
80
80
80
81
82
Operating Results – Same-Property Portfolio
Distributions
Funds from Operations (FFO)
Adjusted Funds from Operations (AFFO)
Cash Flows
Segmented Information
Assets
Capital Resources
Income Taxes
Taxation of Unitholders
Accounting Policies and Estimates
Inflation and Interest Rates
Risks and Uncertainties
Disclosure Controls and Procedures and Internal Control
Over Financial Reporting
83
85
Appendix 1 – Definitions
Appendix 2 – Non-IFRS Financial Measures –
Annual Reconciliations
88
Appendix 3 – Non-IFRS Financial Measures –
Quarterly Reconciliations
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2022 Annual Report
Introduction
Non-IFRS Financial Measures
Certain terms and measures used in this MD&A are listed and defined in the table, thereafter, including any per unit
information if applicable, are non-IFRS performance measures and do not have standardized meanings prescribed by
IFRS. Explanations on how these non-IFRS financial measures provide useful information to investors and the additional
purposes, if any, for which the Trust uses these non-IFRS financial measures, are also included in the table thereafter.
IFRS are International Financial Reporting Standards defined and issued by the IASB, in effect as at the date of this MD&A.
Securities regulations require that non-IFRS financial measures be clearly defined and that they not be assigned greater
weight than IFRS measures. The referred non-IFRS financial measures, which are reconciled to the most similar IFRS
measure in the table thereafter if applicable, do not have a standardized meaning prescribed by IFRS and these measures
cannot be compared to similar measures used by other issuers.
The purpose of this Management Discussion and Analysis (“MD&A”) is to communicate the operating results of BTB Real
Estate Investment Trust (“BTB” or the “Trust”) for the year ended December 31, 2022 as well as its financial position on
that date. The report presents a summary of some of the Trust’s business strategies, and the business risks it faces. This
MD&A, dated February 24, 2023, should be read together with the consolidated financial statements and accompanying
notes for the year ended December 31, 2022. It discusses significant information available up to the said date of this
MD&A. The Trust’s consolidated annual financial statements were prepared in accordance with International Financial
Reporting Standards (“IFRS”), as issued by the International Accounting Standards Board (“IASB”). Unless otherwise
indicated, all amounts are in thousands of Canadian dollars, except for per unit and per square foot amounts. Additional
information about the Trust is available on the Canadian Security Administrators (“CSA”) website at www.sedar.com
and on our website at www.btbreit.com.
The Audit Committee reviewed the contents of this Management Discussion and Analysis and the consolidated financial
statements and accompanying notes and the Trust’s Board of Trustees has approved them.
Forward-Looking Statements – Caveat
From time to time, written or oral forward-looking statements are made within the meaning of applicable Canadian
securities legislation. Forward-looking statements in this MD&A are made, in other filings with Canadian regulators,
in reports to unitholders and in other communications. These forward-looking statements may include statements
regarding the Trust’s future objectives, strategies to achieve the Trust’s objectives, as well as statements with respect
to the Trust’s beliefs, outlooks, plans, objectives, expectations, forecasts, estimates and intentions. The words “may,”
“could,” “should,” “outlook,” “believe,” “plan,” “forecast,” “estimate,” “expect,” “propose,” and the use of the conditional
and similar words and expressions are intended to identify forward-looking statements.
By their very nature, forward-looking statements involve numerous factors and assumptions, and are subject to inherent
risks and uncertainties, both general and specific, which give rise to the possibility that predictions, forecasts, projections,
and other forward-looking statements will not be achieved. Readers must be warned not to place undue reliance on these
statements as several important factors could cause the Trust’s actual results to differ materially from the expectations
expressed in such forwardlooking statements. These factors include general economic conditions in Canada and
elsewhere, the effects of competition in the markets where we operate, the impact of changes in laws and regulations,
including tax laws, successful execution of the Trust’s strategy, the ability to complete and integrate strategic acquisitions
successfully, potential dilution, the ability to attract and retain key employees and executives, the financial position
of lessees, the ability to refinance our debts upon maturity, the ability to renew leases coming to maturity, and to lease
vacant space, the ability to complete developments on plan and on schedule and to raise capital to finance the Trust’s
growth, as well as changes in interest rates. The foregoing list of important factors likely to affect future results is not
exhaustive. When relying on forward-looking statements to make decisions with respect to the Trust, investors and others
should carefully consider these factors and other facts and uncertainties. Additional information about these factors can
be found in the “Risks and Uncertainties” section.
The Trust cannot assure investors that actual results will be consistent with any forward-looking statements and the Trust
assumes no obligation to update or revise such forward-looking statements to reflect new events or circumstances,
except as required under applicable securities regulations.
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2022 Annual Report Non-IFRS measure Definition
Reconciliation
Non-IFRS measure Definition
Reconciliation
Adjusted net
income
Adjusted
Earnings Before
Interest, Taxes,
Depreciation
and Amortization
(“Adjusted
EBITDA”)
Same-Property
NOI
Funds from
Operations (“FFO”)
and
Recurring FFO
Adjusted net income is a non-IFRS financial measure that starts with net income and
comprehensive income and removes the effects of: (i) fair value adjustment of investment
properties; (ii) fair value adjustment of derivative financial instruments; (iii) fair value
adjustment of Class B LP units; and (iv) transaction costs incurred for acquisitions and
dispositions of investment properties and early repayment fees.
The Trust considers this to be a useful measure of operating performance, as fair value
adjustments can fluctuate widely with the real estate market and transaction costs are
non-recurring in nature.
Adjusted EBITDA income is a non-IFRS financial measure that starts with net income
and comprehensive income and removes the effects of certain adjustments, on a
proportionate basis, including: (i) interest expense; (ii) taxes; (iii) depreciation of property
and equipment; (iv) amortization of intangible assets; (v) fair value adjustments (including
adjustments of investment properties, of financial instruments, of Class B LP units and
of unit price adjustments related to unit-based compensation); (vi) transaction costs for
acquisitions and dispositions of investment properties and early repayment fees; and (vii)
straight-line rental revenue adjustments.
The most directly comparable IFRS measure to Adjusted EBITDA is net income and
comprehensive income. The Trust believes Adjusted EBITDA is a useful metric to
determine its ability to service debt, to finance capital expenditures and to provide
distributions to its Unitholders.
Same-Property NOI is a non-IFRS financial measure defined as net operating income
(“NOI”) for the properties that the Trust owned and operated for the entire duration of both
the current year and the previous year. The most directly comparable IFRS measure to
same-property NOI is Operating Income.
The Trust believes this is a useful measure as NOI growth can be assessed on its portfolio
by excluding the impact of property acquisitions and dispositions of both the current year
and previous year. The Trust uses the Same-Property NOI to indicate the profitability of
its existing portfolio operations and the Trust’s ability to increase its revenues, reduce its
operating costs and generate organic growth.
FFO is a non-IFRS financial measure used by most Canadian real estate investment
trusts based on a standardized definition established by REALPAC in its January 2022
White Paper (“White Paper”). FFO is defined as net income and comprehensive income
less certain adjustments, on a proportionate basis, including: (i) fair value adjustments
on investment properties, class B LP units and derivative financial instruments; (ii)
amortization of lease incentives; (iii) incremental leasing costs; and (iv) distribution on
class B LP units. FFO is reconciled to net income and comprehensive income, which is the
most directly comparable IFRS measure. FFO is also reconciled with the cash flows from
operating activities, which is an IFRS measure.
Recurring FFO is also a non-IFRS financial measure that starts with FFO and remove the
impact of non-recurring items such as transaction cost on acquisitions and dispositions
of investment properties and early repayment fees.
The Trust believes FFO and recurring FFO are key measures of operating performance
and allow the investors to compare its historical performance.
Operating results
– Adjusted net
income
Adjusted Earnings
Before Interest,
Taxes, Depreciation
and Amortization
(“Adjusted
EBITDA”);
Capital Resources
– Interest coverage
ratio; and
Capital Resources
– Debt service
coverage ratio
Operating results
– Same-Property
Portfolio
Funds from
Operations (FFO);
Cash Flows;
Appendix 2; and
Appendix 3
Adjusted Funds
from Operations
(“AFFO”)
and
Recurring AFFO
FFO and AFFO
payout ratios
and
Recurring FFO and
recurring AFFO
payout ratios
Total debt ratio
Interest Coverage
Ratio
Debt Service
Coverage Ratio
AFFO is a non-IFRS financial measure used by most Canadian real estate investment
trusts based on a standardized definition established by REALPAC in its White Paper.
AFFO is defined as FFO less: (i) straight-line rental revenue adjustment; (ii) accretion
of effective interest; (iii) amortization of other property and equipment; (iv) unit-based
compensation expenses; (v) provision for non-recoverable capital expenditures; and
(vi) provision for unrecovered rental fees (related to regular leasing expenditures). AFFO
is reconciled to net income and comprehensive income, which is the most directly
comparable IFRS measure. AFFO is also reconciled with the cash flows from operating
activities, which is an IFRS measure.
Recurring AFFO is also a non-IFRS financial measure that starts with AFFO and removes
the impact of non-recurring items such as transaction costs on acquisitions and
dispositions of investment properties and early repayment fees.
The Trust considers AFFO and recurring AFFO to be useful measures of recurring
economic earnings and relevant in understanding its ability to service its debt, fund
capital expenditures and provide distributions to unitholders.
FFO and AFFO payout ratios and recurring FFO and recurring AFFO payout ratios are non-
IFRS financial measures used by most Canadian real estate investment trusts based on
a standardized definition established by REALPAC in its White Paper. These payout ratios
are calculated by dividing the actual distributions per unit by FFO, AFFO and recurring FFO
and recurring AFFO per unit in each period.
Adjusted Funds
from Operations
(AFFO);
Cash Flows;
Appendix 2; and
Appendix 3
Funds from
Operations (FFO);
Adjusted Funds
from Operations
(AFFO);
The Trust considers these metrics a useful way to evaluate its distribution paying capacity.
Appendix 2; and
Total debt ratio is a non-IFRS financial measure of the Trust financial leverage, which is
calculated by taking the total long-term debt less cash divided by total gross value of the
assets of the Trust less cash.
The Trust considers this metric useful as it indicates its ability to meet its debt obligations
and its capacity for future additional acquisitions.
Interest coverage ratio is a non-IFRS financial measure which is calculated by taking the
Adjusted EBITDA divided by interest expenses net of financial income (interest expenses
exclude early repayment fees, accretion of effective interest, distribution on Class B LP
units, accretion of non-derivative liability component of convertible debentures and the
fair value adjustment on derivative financial instruments and Class B LP units).
The Trust considers this metric useful as it indicates its ability to meet its interest cost
obligations for a given period.
Debt service coverage ratio is a non-IFRS financial measure which is calculated by
taking the Adjusted EBITDA divided by the Debt Service Requirements, which consists of
principal repayments and interest expenses net of financial income (interest expenses
exclude early repayment fees, accretion of effective interest, distribution on Class B LP
units, accretion of non-derivative liability component of convertible debentures and the
fair value adjustment on derivative financial instruments and Class B LP units).
The Trust considers this metric useful as it indicates its ability to meet its interest cost
obligations for a given period.
Appendix 3
Capital Resources
– Debt ratio
Capital Resources
– Interest coverage
ratio
Capital Resources
– Debt service
coverage ratio
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2022 Annual Report The Trust
The Trust is an unincorporated open-ended real estate trust formed under and governed by the laws of the province
of Québec pursuant to a trust agreement (as amended). The Trust began its real estate operations on October 3, 2006,
and as of December 31, 2022, it owned 73 properties, being industrial, off-downtown core office and necessity-based
retail properties located in primary markets of the provinces of Québec, Ontario, Alberta, and Saskatchewan. Since its
inception, the Trust has become an important property owner in the province of Québec, in Eastern Ontario and since
December 2021, in Western Canada. The units and Series G and H convertible debentures are traded on the Toronto
Stock Exchange under the symbols “BTB.UN”, “BTB.DB. G” and “BTB.DB.H”, respectively.
The Trust’s management is entirely internalized, and no service agreements or asset management agreements are
in force between the Trust and its officers. The Trust therefore ensures that the interests of management and of its
employees are aligned with those of the unitholders. Only two properties are managed by third party managers dealing
at arm’s length with the Trust. Management’s objective is, when favourable circumstances will prevail, to directly manage
the Trust’s remaining properties to possibly achieve savings in management and operating fees through centralized
and improved property management operations.
The following table provides a summary of the real estate portfolio:
As at December 31, 2022
Number of
properties
Leasable area
(sq. ft.)
Fair value
(thousands of $)
73
5,856,617
1,164,881
These figures include a 50% interest in a 17,114 square-foot building in a Montréal suburb and a 50% interest in one building totalling 74,940 square feet in Gatineau,
Québec.
Objectives and Business Strategies
The Trust’s primary objective is to maximize total return to unitholders. Total return includes distributions and long-term
appreciation of the trading value of its units. More specifically, the objectives are as follows:
(i) Generate stable monthly cash distributions that are reliable and fiscally beneficial to unitholders.
(ii) Grow the Trust’s assets through internal growth and accretive acquisitions.
(iii) Optimize the value of its assets through dynamic management of its properties to maximize their long-term value.
Strategically, the Trust seeks to acquire properties with high occupancy rates, good tenant quality, superior locations
or low potential lease turnover and properties that are well maintained and may require less capital expenditures.
The Trust’s management regularly performs strategic portfolio reviews to determine whether it is financially advisable to
dispose of certain investment properties. The Trust may dispose of certain assets if their size, location and/or profitability
no longer meet the Trust’s investment criteria.
In such cases, the Trust expects to use the proceeds from the sale of assets to reduce debt thereon and/or redeploy
capital in property acquisitions.
Highlights of the Fourth Quarter and Year Ended
December 31, 2022
Rental revenue: Stood at $31.5 million for the current quarter, which represents an increase of 17.5% compared to the
same quarter of 2021. For the year 2022, the rental revenue totalled $119.5 million, which represents an increase of 19.1%
compared to the same period in 2021.
Net operating income (NOI): Stood at $18.6 million for the current quarter, which represents an increase of 26.0%
compared to the same quarter of 2021. For the year 2022, the total NOI was $70.4 million, which represents an increase
of 25.0% compared to the same period in 2021.
Same-property NOI(1): Increased by 7.1% for the fourth quarter of 2022 compared to the same period in 2021 mainly due
to a combination of important leasing efforts made during the previous quarters resulting in an increase in the occupancy
rate compared to the same quarter last year and the increase in the average lease renewal rates. For the year 2022, the
same-property NOI(1) increased by 3.4% compared to last year.
Net income and comprehensive income: Totalled $1.8 million for the quarter compared to $23.2 million for the same
period in 2021, representing a decrease of $21.4 million that is attributed to the net adjustment to the fair value of
investment properties. For the year, the net income and comprehensive income totalled $38.2 million compared
to $41.6 million for the same period in 2021.
Recurring FFO(1): Was 11.8¢ per unit for the quarter compared to 11.0¢ per unit for the same period in 2021. For the year
2022, the recurring FFO(1) was 45.4¢ per unit compared to 42.1¢ per unit for the year 2021. Excluding the $1.4 million
of additional recoveries related to prior years recorded during the year 2021, the recurring FFO(1) per unit would have
increased by 5.2¢ or 13.0% for the year 2022 compared to the same period in 2021.
Recurring FFO payout ratio(1): Was 63.6% for the quarter compared to 68.0% for the same period in 2021. For the year
2022, the recurring FFO payout ratio(1) was 66.1% compared to 71.2% for the year 2021.
Recurring AFFO(1): Was 10.0¢ per unit for the quarter compared to 9.4¢ per unit for the same period in 2021. For the year
2022, the recurring AFFO(1) was 40.9¢ per unit compared to 38.5¢ per unit for the year 2021. Excluding the $1.4 million
of additional recoveries related to prior years recorded during the year 2021, the recurring AFFO(1) per unit would have
increased by 4.3¢ or 11.9% for the year 2022 compared to the same period in 2021.
Recurring AFFO payout ratio(1): Was 74.9% for the quarter compared to 80.0% for the same period in 2021. For the year
2022, the recurring AFFO payout ratio(1) was 73.3% compared to 77.9% for the year 2021.
Leasing activity: The Trust completed a total of 154,032 square feet of leases renewals and 49,568 square feet of new
leases for the quarter. Due to the sustained leasing activity, the occupancy rate was at 93.2% at the end of the quarter.
The increase in the average renewal rate for the quarter was 8.0% and for the cumulative 12-month period was 12.2%.
For the year 2022, the Trust completed a total of 505,189 square feet of leases renewals and 167,602 square feet of new
leases. Therefore, the total leasing activity for the year was 672,791 square feet.
Collection rate: was 99.3% of invoiced rent on a cumulative basis for 2022, which shows the strong fundamentals of
the Trust’s portfolio.
Dispositions: On December 8, 2022, the Trust disposed of an office property located at 81-83 Turgeon Street, in Sainte-
Thérèse, Québec, for total proceeds of $4.6 million, excluding transaction costs and adjustments. On December 14, 2022,
the Trust disposed of an office property located at 7001-7035, Saint-Laurent boulevard, in Montréal, Québec, for total
proceeds of $5.9 million, excluding transaction costs and adjustments. This is in line with the Trust’s plan to further
concentrate its’ investments in the industrial asset class.
Liquidity position: The Trust held $2.4 million of cash at the end of the quarter and $38.1 million is available under its
credit facilities(1)(2). The Trust has the option to increase its capacity under the credit facilities by $20.0 million.
Debt metrics: The Trust concluded the quarter with a total debt ratio(1) of 58.5%, recording an improvement of 2.0%
compared to December 31, 2021.
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(1) This is a non-IFRS financial measure, refer to page 45.
(2) Credit facilities is a term used that reconciles with the bank loans as presented and defined in the Trust interim condensed consolidated financial statements.
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2022 Annual Report Subsequent events
On February 2, 2023, the Trust concluded the acquisition of a Class A industrial property located at 9900 rue Irénée-
Vachon, Mirabel (within the greater Montreal area), Québec. Acquired for the aggregate purchase price of $28.0 million,
excluding transaction costs. This acquisition was funded from the existing undrawn capacity on the Trust’s bank loan
and available liquidity. This fully leased property increased the total leasable area by 176,819 square feet.
On February 14, 2023, at the request of the holders, 150,000 Class B LP units were exchanged for the Trust units.
Summary of significant items as at December 31, 2022
•
Total number of properties: 73
•
•
Total leasable area: 5.9 million square feet
Total asset value: $1,179 million
• Market capitalization: $311 million (unit price of $3.65 as at December 31, 2022)
Selected Financial Information
The following table presents highlights and selected financial information for the periods ended December 31, 2022,
and December 31, 2021, as well as the years ended 2022 and 2021:
Periods ended December 31
(in thousands of dollars, except for ratios and per unit data)
Quarter
Year
2022
2021
2022
2021
Reference
(page)
$
$
$
$
Financial information
Rental revenue
Net operating income (NOI)
Net income and comprehensive income
Adjusted net income(1)
Adjusted EBITDA(1)
NOI from the same-property portfolio(1)
Distributions
Recurring funds from operations (FFO)(1)
Recurring adjusted funds from operations (AFFO)(1)
Cash flow from operating activities
Total assets
Investment properties
Total long-term debt
Mortgage loans
Convertible debentures
Mortgage debt ratio(2)
Total debt ratio(1)
Weighted average interest rate on mortgage debt
Unitholders’ equity
Market capitalization
Financial information per unit
Units outstanding (000)
Class B LP units outstanding (000)
Weighted average number of units outstanding (000)
Weighted average number of units and Class B LP units
outstanding (000)
Net income and comprehensive income
Adjusted net income(1)
Distributions
Recurring FFO(1)
Payout ratio on recurring FFO(1)
Recurring AFFO(1)
Payout ratio on recurring AFFO(1)
Market price
Tax on distributions
Tax deferral
Operational information
Number of properties
Leasable area (thousands of sq. ft.)
Occupancy rate
Increase in average lease renewal rate
52
52
52
62
63
64
65
66
67
68
71
54
73
74
75
75
77
76
77
77
52
62
65
66
66
67
67
31,486
18,624
1,769
8,366
16,347
13,840
6,413
10,059
8,550
18,961
26,789
14,776
23,219
7,075
13,435
12,924
5,578
8,194
6,962
25,137
119,495
70,430
38,154
33,601
64,409
52,462
25,032
37,879
34,137
100,343
56,336
41,568
25,771
51,999
50,737
21,464
30,144
27,568
66,240
56,538
1,179,340
1,129,901
1,164,881
691,508
636,111
41,942
54.2%
58.5%
4.09%
1,110,971
687,070
605,210
42,819
54.0%
60.5%
3.49%
462,072
404,425
311,120
302,438
85,238
347
85,158
74,022
83,091
74,127
347
71,188
85,506
74,370
83,439
71,547
2.1¢
9.8¢
7.5¢
11.8¢
63.6%
10.0¢
74.9%
31.2¢
9.5¢
7.5¢
11.0¢
68.0%
9.4¢
80.0%
45.7¢
40.3¢
30.0¢
45.4¢
66.1%
40.9¢
73.3%
3.65
58.1¢
36.0¢
30.0¢
42.1¢
71.2%
38.5¢
77.9%
4.08
80
100.0%
100.0%
100.0%
100.0%
48
48
57
64
73
5,857
93.2%
12.2%
75
6,037
93.4%
5.5%
8.0%
7.4%
0
5
(1) This is a non-IFRS financial measure, refer to page 45.
(2) This is a non-IFRS financial measure. The mortgage debt ratio is calculated by dividing the mortgage loans outstanding by the total gross value of the assets of the
Trust less cash and cash equivalents.
1
5
2022 Annual Report Selected Annual Information
Selected Quarterly Information
The following table summarizes the Trust’s selected financial information for the last three years:
The following table summarizes the Trust’s selected financial information for the last eight quarters:
Periods ended December 31
(in thousands of dollars, except for ratios and per unit data)
Financial information
Rental revenue
Net operating income
Fair value adjustment on investment properties
Net income (loss) and comprehensive income (loss)
Net cash from operating activities
Recurring FFO(1)
Recurring AFFO(1)
Distributions
Total assets
Long-term debt
Financial information per unit
Net income and comprehensive income
Recurring FFO(2)
Recurring AFFO(3)
Distributions
2022
$
119,495
70,430
(8,201)
38,154
66,240
37,879
34,137
25,032
2021
$
2020
$
100,343
56,336
19,571
41,568
56,538
30,144
27,568
21,464
92,969
51,260
(8,375)
2,919
46,145
24,229
22,145
21,513
1,179,340
1,129,901
926,666
678,053
648,029
532,955
45.7¢
45.4¢
40.9¢
30.0¢
58.1¢
42.1¢
38.5¢
30.0¢
4.6¢
38.3¢
35.0¢
34.0¢
(1) This is a non-IFRS financial measure, refer to page 45.
(2) This is a non-IFRS financial measure. The recurring FFO per unit ratio is calculated by dividing the recurring FFO(1) by the Trust’s unit outstanding at the end of the
period (including the Class B LP units at outstanding at the end of the period).
(3) This is a non-IFRS financial measure. The recurring AFFO per unit ratio is calculated by dividing the recurring AFFO(1) by the Trust’s unit outstanding at the end of the
period (including the Class B LP units at outstanding at the end of the period).
(in thousands of dollars except for per unit data)
Rental revenue
Net operating income
Net income and comprehensive income
Net income and comprehensive income per unit
Cash from operating activities
Recurring funds from operations (FFO)(1)
Recurring FFO per unit(1)(2)
Recurring adjusted funds from operations (AFFO)(1)
Recurring AFFO per unit(1)(3)
Distributions(4)
Distributions per unit(4)
2022
Q-4
$
31,486
18,624
1,769
2.1¢
2022
Q-3
$
2022
Q-2
$
2022
Q-1
$
2021
Q-4
$
2021
Q-3
$
2021
Q-2
$
2021
Q-1
$
29,962
28,979
29,068
26,789
23,988
26,034
23,532
17,974
17,598
16,234
14,776
13,572
15,574
12,414
11,693
18,243
6,449
23,219
8,678
13.7¢
21.5¢
8.3¢
31.2¢
11.7¢
7,161
9.8¢
2,510
3.9¢
18,961
20,359
15,516
11,404
25,137
10,090
8,162
13,149
10,059
9,785
9,718
11.5¢
8,674
10.2¢
11.4¢
9,311
11.0¢
8,317
10.7¢
8,194
11.0¢
7,018
9,202
5,730
9.5¢
12.5¢
8.9¢
7,602
6,962
6,453
8,647
5,506
9.7¢
9.4¢
8.7¢
11.8¢
8.6¢
6,394
6,374
5,851
5,578
5,551
5,508
4,828
7.5¢
7.5¢
7.5¢
7.5¢
7.5¢
7.5¢
7.5¢
11.8¢
8,550
10.0¢
6,413
7.5¢
(1) This is a non-IFRS financial measure, refer to page 45.
(2) The recurring FFO per unit ratio is calculated by dividing the recurring FFO(1) by the Trust’s unit outstanding at the end of the period (including the Class B LP units
outstanding at the end of the period).
(3) The recurring AFFO per unit ratio is calculated by dividing the recurring AFFO(1) by the Trust’s unit outstanding at the end of the period (including the Class B LP units
outstanding at the end of the period).
(4) Includes distributions on Class B LP units.
Operating Performance Indicators
The following performance indicators are used to measure the Trust’s operating performance:
Committed occupancy rate: provides an indication of the optimization of rental space and the potential revenue gain from
the Trust’s property portfolio. This rate considers occupied leasable area and the leasable area of leases that have been
signed as of the end of the quarter but where the term of the lease has not yet begun.
In-place occupancy rate: shows the percentage of occupied leasable area at the end of the period.
Renewal rate: is used to record the Trust’s tenant retention with lease renewals.
Average rate of renewed leases: measures organic growth and the Trust’s ability to increase or decrease its rental revenue
for a given period.
2
5
3
5
2022 Annual Report Real Estate Portfolio
At the end of 2022, BTB owned 73 properties, for a total fair value of $1,165 million and representing a total leasable area
of approximately 5.9 million square feet. A description of all the properties owned by the Trust can be found in the Trust’s
Annual Information Form available at www.sedar.com.
Summaries of investment properties held as at December 31, 2022
Operating segment
Industrial
Off-downtown core office
Necessity-based retail
Total portfolio
Geographic
Montreal
Québec City
Ottawa
Edmonton
Saskatoon
Total portfolio
Number of
properties
Leasable area
(sq. ft.)
Committed
occupancy rate (%)
In Place occupancy
rate (%)
27
35
11
73
1,645,319
2,819,124
1,392,175
5,856,617
100.0
86.7
98.2
93.2
100.0
86.0
97.9
92.7
39
11
11
8
4
73
3,125,896
1,380,146
805,157
321,947
223,472
5,856,617
95.8
84.0
94.4
99.1
100.0
93.2
95.7
83.5
92.5
99.1
100.0
92.7
Dispositions of investment properties
On January 27, 2022, the Trust disposed of four industrial properties located at 705 Boundary Road, 725 Boundary
Road, 805 Boundary Road and 2901 Marleau Avenue in Cornwall, Ontario, for total proceeds of $26.0 million, excluding
transaction costs and adjustments.
On June 16, 2022, the Trust disposed of a small industrial property located at 2059 René-Patenaude Street in Magog
(Eastern Townships), Québec, for total proceeds of $1.8 million, excluding transaction costs and adjustments. This
property occupancy rate was less than 50% at the time of the disposition.
On June 27, 2022, the Trust acquired an industrial property located at 3905 Allard Avenue in Edmonton, Alberta, for
a total consideration of $13.0 million, excluding transaction costs and adjustments. The property increased the Trust’s
total leasable area by 51,747 square feet.
On September 8, 2022, the Trust acquired an industrial property located at 8743 50 Avenue NW in Edmonton, Alberta,
for a total consideration of $15.8 million, excluding transaction costs and adjustments. The property increased the Trust’s
total leasable area by 72,088 square feet.
Since the beginning of the year, the Trust has acquired six properties adding a total of 354,637 square feet to its leasable
area comprised of two office properties (116,226 square feet) and four industrial properties (237,597 square feet). BTB is
continuing to execute on its strategy of investing in the industrial segment where 67% of its acquisitions in the year were
concluded.
Real Estate Operations
The following table summarizes the changes in occupied area for the periods ended December 31, 2022, and December
31, 2021, as well as the years ended 2022 and 2021:
Periods ended December 31
(in sq. ft.)
Quarter
Year
2022
2021
2022
2021
Occupied area at the beginning of the period(1)
5,520,092
4,969,471
5,639,778
4,910,877
Purchased (sold) assets
Signed new leases
Tenant departures
Other(2)
(30,821)
49,568
(83,041)
-
648,914
77,049
(53,696)
(1,961)
(118,022)
167,602
(231,718)
(1,842)
747,914
182,275
(176,621)
(24,668)
Occupied leasable area at the end of the period(1)
5,455,798
5,639,777
5,455,798
5,639,777
Vacant leasable area at the end of the period
400,819
397,609
400,819
397,609
Total leasable area at the end of the period
5,856,617
6,037,386
5,856,617
6,037,386
(1) The occupied area includes in place and committed agreements.
(2) Other adjustments on the occupied area represent mainly area remeasurements.
Number of
properties
Leasable area
(sq. ft.)
Committed
occupancy rate (%)
In Place occupancy
rate (%)
Portfolio occupancy
On September 19, 2022, the Trust disposed of a small office property located at 5878-5882 Sherbrooke Street East
in Montréal, Québec, for total proceeds of $4.4 million, excluding transaction costs and adjustments.
Renewal activities
On December 8, 2022, the Trust disposed of an office property located at 81-83 Turgeon Street, in Sainte-Thérèse,
Québec, for total proceeds of $4.6 million, excluding transaction costs and adjustments.
On December 14, 2022, the Trust disposed of an office property located at 7001-7035, Saint-Laurent boulevard,
in Montréal, Québec, for total proceeds of $5.9 million, excluding transaction costs and adjustments.
Since the beginning of the year, the Trust has disposed of eight properties, totalling 535,406 square feet, being three
off-downtown core office properties (55,278 square feet) and five industrial properties (480,128 square feet).
Acquisitions of investment properties
On January 7, 2022, the Trust acquired two class A office properties located at 979 Bank Street and 1031 Bank Street
in the Glebe borough of Ottawa, Ontario, for the total consideration of $38.1 million, excluding transaction costs and
adjustments. The two properties increased the Trust’s total leasable area by 116,226 square feet.
On April 5, 2022, the Trust acquired an industrial property located at 1100 Algoma Road in Ottawa, Ontario, for a total
consideration of $12.5 million, excluding transaction costs and adjustments. The property increased the Trust’s total
leasable area by 46,433 square feet.
On June 15, 2022, the Trust acquired an industrial property located at 3190 F.-X. Tessier Street in Vaudreuil-Dorion,
Québec, for a total consideration of $15.0 million, excluding transaction costs and adjustments. The property increased
the Trust’s total leasable area by 67,162 square feet.
4
5
The following table summarizes the renewal rate for the periods ended December 31, 2022, and December 31, 2021,
as well as the years ended 2022 and 2021:
Periods ended December 31
(in sq. ft.)
Leases expired at term
Renewed leases at term
Renewal rate
Quarter
Year
2022
165,034
87,399
53.0%
2021
74,094
41,799
56.4%
2022
566,217
356,454
63.0%
2021
297,664
211,918
71.2%
The Trust renewed 53.0% or 87,399 square feet out of the 165,034 square feet expiring during this quarter. Additionally,
the Trust leased 13,690 square feet of the remaining 77,635 square feet that were not renewed this quarter. The recorded
vacancy is mainly explained by the departure during the fourth quarter of 2022 of Investia Services Financiers Inc.
(28,868 square feet) in Québec City and Bouthillette Parizeau Inc. (11,000 square feet) in Longueuil.
For the cumulative 12-month period, the Trust renewed 63.0% of the leases at the end of their term. Therefore, leases
representing 209,763 square feet were not renewed during the year. The following is a list of the main departures:
in Ottawa, Optelian Access Networks Corporation (23,204 square feet) departed during the first quarter; in Montréal,
Réseau Admission ULC (13,684 square feet) departed during the second quarter (the Saint-Laurent boulevard property
was sold on December 14, 2022); in Edmonton, Drive Products Inc. (30,297 square feet) departed during the third quarter;
and, in Québec City, Investia Services Financiers Inc. (28,868 square feet) departed during the fourth quarter. There are
on-going efforts by the Trust to replace tenants that didn’t renew their leases.
5
5
2022 Annual Report In addition to the renewed leases at the expiration of their term during the quarter, the Trust renewed 66,633 square
feet with existing tenants where their lease terms were to expire in 2023 or in later years, representing a total of 148,736
square feet of leases that were renewed in anticipation of their expiry during the year 2022.
The Trust renewed leases totalling 154,032 square feet during this quarter for a total of 505,189 square feet for the year.
Average lease renewal rate
The following table summarizes the average increase of rental rates for each operating segment for the periods ended
December 31, 2022:
Operating segment
Industrial
Off-downtown core office
Necessity-based retail
Total
Quarter
Year
Renewals
(Sq. ft.)
Increase
(%)
Renewals
(Sq. ft.)
Increase
(%)
-
96,877
57,154
154,032
0.0%
6.2%
11.3%
8.0%
98,158
306,567
100,464
505,189
9.9%
14.1%
8.3%
12.2%
Since the beginning of the year, the Trust achieved a cumulative average increase of 12.2% in lease renewal rates across
all its business segments. The off-downtown core office operating segment showed an increase in lease renewal rates
of 14.1%, which is essentially attributable to leases at below market rent that were renewed at market rate.
Concluded new leases
During the quarter, the Trust leased 49,568 square feet to new tenants, leaving 400,819 square feet of leasable area
available for lease at the end of the quarter. Of the concluded leases for 49,568 square feet, 7,673 square feet are
“committed” lease agreements and tenants are in occupancy for 41,895 square feet.
During the quarter, leases for 15,461 square feet or 31.2% were concluded with off-downtown core office tenants and
34,107 square feet or 68.8% of the new leases were concluded in the necessity-based retail segment. For the year, the
Trust concluded transactions with new tenants totaling 167,602 square feet.
Occupancy rates
The following tables detail the Trust’s committed occupancy rates by operational segments and geographic sector,
including committed lease agreements:
Operating segment
Industrial
Off-downtown core office
Necessity-based retail
Total portfolio
Geographic sector
Montréal
Québec City(1)
Ottawa
Edmonton
Saskatoon
Total portfolio
December 31,
2022
September 30,
2022
June 30,
2022
March 31,
2022
December 31,
2021
%
100.0
86.7
98.2
93.2
%
100.0
88.6
96.2
93.5
%
100.0
89.3
96.2
93.8
%
99.0
89.3
95.0
93.1
%
97.0
90.3
95.1
93.4
December 31,
2022
September 30,
2022
June 30,
2022
March 31,
2022
December 31,
2021
%
95.8
84.0
94.4
99.1
100.0
93.2
%
95.1
87.0
94.8
99.1
100.0
93.5
%
95.1
88.2
94.8
100.0
100.0
93.8
%
94.1
88.4
93.8
100.0
100.0
93.1
%
94.4
88.9
93.7
100.0
100.0
93.4
(1) Excluding the Trois-Rivières property, the occupancy rate of the Québec City portfolio would have been 86.9%.
The occupancy rate at the end of the fourth quarter of 2022 stood at 93.2%, representing a 0.3% decrease compared
to the prior quarter, and a 0.2% decrease compared to the same period in 2021. Furthermore, the in-place occupancy rate
at the end of the year stood at 92.7%, representing a decrease of 0.4% compared to the prior quarter, and representing
an increase of 1.2% compared to the same period in 2021.
Lease maturities
The following table summarizes the Trust’s lease maturity profile for the next five years:
Industrial
Leasable area (sq. ft.)
Average lease rate/square foot ($)(1)
% of industrial portfolio
Off-downtown core office
Leasable area (sq. ft.)
Average lease rate/square foot ($)(1)
% of office portfolio
Necessity-based retail
Leasable area (sq. ft.)
Average lease rate/square foot ($)(1)
% of retail portfolio
Total portfolio
Leasable area (sq. ft.)
2023
2024
2025
2026
2027
66,680
$11.01
4.05%
30,199
$13.84
1.84%
130,414
206,464
$11.15
7.93%
$7.99
12.55%
86,304
$9.31
5.25%
317,398
308,050
261,727
396,386
293,341
$14.55
11.26%
206,831
$7.33
14.86%
$15.08
10.93%
82,430
$16.00
5.92%
$15.32
9.28%
$14.69
14.06%
$17.68
10.41%
123,398
107,676
132,036
$20.09
8.86%
$16.25
7.73%
$15.92
9.48%
511,681
$15.82
6
5
7
5
% of total portfolio
10.09%
(1) This is a non-IFRS financial measure. The average lease rate / square foot ($) ratio is calculated by dividing the annual rental revenues related to leases maturing within
a specific year divided by the total leasable area (square feet) of the leases maturing within a specific year.
12.13%
8.80%
8.74%
7.18%
Average lease rate/square foot ($)(1)
$11.62
$15.17
$15.41
$12.98
590,910
420,679
515,538
710,526
2022 Annual Report Weighted average lease term
Rental revenue
For the quarter ended December 31, 2022, the Trust recorded a weighted average lease term of 5.9 years, compared
to 5.9 years for the same period in 2021. In addition to securing future revenues for the Trust and solidifying its tenant
base, the Trust’s lease renewal strategy is also focused on ensuring longevity in the lease terms when appropriate.
Moreover, the weighted average lease term was positively impacted by the acquisition of the four industrial properties
leased on a long-term basis.
Top 10 clients
The Trust’s three largest clients are the Government of Québec (off-downtown core office segment), the Government
of Canada (off-downtown core office segment), and Walmart Canada inc. (necessity-based retail segment), representing
respectively 5.8%, 5.3%, and 2.2% of rental revenue. The Trust’s rental revenues are generated by multiple leases with
these clients whose maturities are spread over time.
28.9% of the Trust’s total revenue is generated by leases signed with government agencies (federal, provincial, and
municipal) and public companies, thus generating stable and high-quality cash flow for the Trust’s operating activities.
The following table shows the contribution of the Trust’s top 10 clients as a percentage of revenue as at December 31,
2022. Their contribution accounts for 24.0% of rental revenue for the cumulative 12-month period and 21.8% of leased
area:
For the quarter, rental revenue increased by $4.7 million or 17.5% compared to the same period last year. The increase
consisted of the following:
i. $1.1 million decrease related to the dispositions made since Q4 2021;
ii. $0.7 million increase due to a combination of a higher in place occupancy rate (+1.2% compared to last year)
and higher average lease rate;
iii. $5.1 million increase related to the acquisitions.
For the year 2022, rental revenue increased by $19.2 million or 19.1% compared to the same period last year. The increase
consisted of the following:
i. $3.5 million decrease related to the dispositions made since Q4 2021;
ii. $1.4 million decrease related to the retrospective additional recoveries recognized during the second quarter
in 2021;
iii. $1.9 million increase due to a combination of a higher in place occupancy rate and higher average lease rate;
% of
revenue
% of leased area
Leased area (sq. ft.)
iv. $22.2 million increase related to the acquisitions.
Operating expenses
Client
Government of Québec
Government of Canada
Walmart Canada inc.
WSP Canada Inc.
Mouvement Desjardins
Intrado Life & Safety Canada, Inc.
Groupe BBA Inc.
Strongco
Germain Larivière Laval Inc.
Satcom Direct Avionics
Operating Results
5.8
5.3
2.2
2.0
1.9
1.4
1.4
1.3
1.3
1.3
5.1
4.3
4.5
2.0
1.0
1.1
0.8
0.9
1.2
0.8
299,578
251,850
264,550
118,585
61,034
61,576
48,478
53,767
69,270
48,676
24.0
21.8
1,277,364
The following table summarizes the financial results for the periods ended December 31, 2022, and December 31, 2021,
as well as the years ended 2022 and 2021. This table should be read in conjunction with the consolidated financial
statements and the accompanying notes:
Periods ended December 31
(in thousands of dollars)
Rental revenue
Operating expenses
Net operating income (NOI)
Net financial expenses and financial income
Administration expenses
Transaction costs
Fair value adjustment on investment properties
Net income and comprehensive income
8
5
Quarter
Year
2022
$
31,486
12,862
18,624
6,347
2,331
396
7,781
1,769
2021
$
26,789
12,013
14,776
9,489
1,530
109
(19,571)
23,219
2022
$
119,495
49,065
70,430
15,542
7,437
1,096
8,201
38,154
2021
$
100,343
44,007
56,336
27,388
6,842
109
(19,571)
41,568
The following table summarizes the Trust’s operating expenses for the periods ended December 31, 2022, and December
31, 2021, as well as the years ended 2022 and 2021:
Periods ended December 31
(in thousands of dollars)
Operating expenses
Maintenance, repairs and other operating costs
Energy
Property taxes and insurance
Total operating expenses
% of rental revenue
Quarter
2022
$
4,857
1,511
6,494
12,862
40.8%
2021
$
4,825
1,216
5,972
12,013
44.8%
Year
2022
$
17,160
5,660
26,245
49,065
41.1%
2021
$
16,175
5,246
22,586
44,007
43.9%
Operating expenses increased on a quarterly and cumulative basis mainly due to the new acquisitions and the increase
of the cost of living. In addition, property taxes were affected by an increase in property values. Overall, the operating
expenses as a percentage of revenues are lower as the Trust is increasing its investment in industrial properties (mostly
triple net leases).
9
5
2022 Annual Report Financial expenses and income
Administration expenses
The following table summarizes financial expenses for the periods ended December 31, 2022, and December 31, 2021,
as well as the years ended 2022 and 2021:
The following table summarizes the Trust’s administration expenses for the periods ended December 31, 2022, and
December 31, 2021, as well as the years ended 2022 and 2021:
Periods ended December 31
(in thousands of dollars)
Financial income
Interest on mortgage loans
Interest on convertible debentures
Interest on credit facilities
Other interest expense
Interest expense net of financial income
Distributions on Class B LP units
Mortgage early repayment fees
Net financial expenses before non-monetary items
Accretion of effective interest on mortgage loans and convertible
debentures
Accretion of non-derivative liability component of convertible
debentures
Net financial expenses before the following items:
Fair value adjustment on derivative financial instruments
Fair value adjustment on Class B LP units
Net financial expenses net of financial income
Quarter
Year
2022
$
(225)
6,515
606
519
66
7,481
26
231
7,738
336
84
8,158
(1,971)
160
6,347
2021
$
(158)
4,881
832
165
62
2022
$
(624)
23,947
2,796
1,421
286
2021
$
(739)
18,742
3,220
484
247
5,782
27,826
21,954
30
-
104
515
108
188
5,812
28,445
22,250
275
84
6,171
3,297
21
9,489
1,127
335
29,907
(14,216)
(149)
15,542
1,301
360
23,911
3,246
231
27,388
Financial income mainly consists of interest income generated from interest rate swap agreements and from a balance
of sale granted by the Trust for a principal amount of $3.0 million pursuant to the sale in 2019 of a retail property (the balance
of sale was fully repaid by the borrower on August 16, 2022) and the cash on hand during the quarter.
Interest expense, net of financial income, increased by $1.7 million for the quarter and by $5.9 million for the year
compared with the same period last year. This is mainly due to the net increase in mortgage loans attributable to
acquisitions, net of dispositions, of investment properties and the increase in the prime lending rate impacting floating
interest rates of mortgages contracted in recent quarters and interest paid on the revolving credit facility.
On December 31, 2022, the average weighted contractual rate of interest on mortgage loans outstanding was 4.09%,
60 basis points higher than the average rate as at December 31, 2021 (3.49%). This increase is mainly due to the variable
interest on mortgage loans for which the weighted average contractual rate increased by 357 basis points to 6.38%
(2.81% as at December 31, 2021). The weighted average for fixed interest rate mortgage loans increased by 12 basis points
to 3.73% (3.61% as at December 31, 2021). Interest rates on first-ranking mortgage loans ranged from 2.30% to 8.20%
as at December 31, 2022, (2.37% to 6.80% as at December 31, 2021).
The weighted average term of mortgage loans in place as at December 31, 2022, was 4.0 years (4.7 years as at December
31, 2021).
Net financial expenses, net of financial income, described above, include non-monetary items. These non-monetary
items are the accretion of effective interest on mortgage loans and on convertible debentures, the accretion of non-
derivative liability component of convertible debentures and the fair value adjustment on derivative financial instruments
and on Class B LP units.
Periods ended December 31
(in thousands of dollars)
Corporate expenses
Expected credit losses
Unit-based compensation
Trust administration expenses
Quarter
Year
2022
$
1,803
123
405
2,331
2021
$
1,352
12
166
1,530
2022
$
6,609
287
541
7,437
2021
$
5,545
231
1,066
6,842
Corporate expenses increased by $0.5 million or 33% for the quarter compared to the same period last year. For
the year 2022, the increase consisted of the following: (i) the Trust incurred an additional $0.5 million in performance
compensation; and (ii) the total annual compensation of the CIO, hired during the second quarter of 2022. The Trust
managed to maintain a stable level of corporate expenses at 5.5% of rental revenue, due to continuous cost control
efforts although the Trust may make investments to support its growth.
Expected credit losses increased by $0.1 million for the quarter and by $0.1 million for the year 2022 compared to the
same period last year. The steady amount of credit losses expense is due to higher collections, which is also reflected
in the receivables balance at the end of the quarter.
Unit-based compensation increased by $0.2 million for the quarter but decreased by $0.5 million for the year 2022
compared to the same period last year. The increase for the quarter is due to the vesting of units under the restricted unit
compensation plan. The decrease for the year is mainly explained by a reduction of the Trust’s unit price, from $4.09 on
December 31, 2021 to $3.64 on December 31, 2022, resulting in a reduction of $0.5 million related to the cash-settled
share-based retirement compensation plan compared to the same period last year.
Fair value adjustment of investment properties
Under IAS 40, the Trust accounts for its investment properties at fair value and recognizes the gain or loss arising from
a change in the fair value in profit or loss for the period in which it arises. Furthermore, upon a disposition the Trust will
revaluate the investment property at the disposition consideration.
On an annual basis, the Trust retains the services of independent external appraisers to evaluate the fair value of a
significant portion of its portfolio. Pursuant to its policy, the Trust annually appraises a minimum of 60% of its portfolio,
which includes the 15 most valuable properties, and the remaining ones are externally appraised on three-year rotation
basis. In addition, as part of acquisitions, financing or refinancing transactions, or at the request of lenders, other
properties are also independently appraised during the year. As at December 31, 2022, the Trust externally appraised
70.4% of its properties representing an aggregate amount of $821.3 million.
For the properties not independently appraised during a given year, the Trust receives quarterly market data regarding
capitalization rates and discount rates reflecting real estate market conditions from independent external appraisers
or independent experts. The capitalization rate reports provide a range of rates for various geographic regions where the
Trust operates and for various types and qualities of properties within each said region. The Trust utilizes capitalization
and discount rates within ranges provided by these external experts. To the extent that the externally provided
capitalization rate ranges change from one reporting period to the next or should another rate within the provided ranges
be more appropriate than the rate previously used, the fair value of the investment properties would increase or decrease
accordingly.
0
6
1
6
2022 Annual Report The following tables summarize the changes in fair value of investment properties by segment for the periods ended
December 31, 2022, and December 31, 2021, as well as the years ended 2022 and 2021:
The following table summarizes the adjusted net income(1) before these non-recurring and volatile non-monetary items
for the periods ended December 31, 2022, and December 31, 2021, as well as the years ended 2022 and 2021:
Periods ended December 31
(in thousands of dollars)
Industrial
Off-downtown core office
Necessity-based retail
Total change in fair value
Quarter
Year
2022
$
11,477
(18,639)
(618)
(7,781)
2021
$
13,889
(1,894)
7,576
19,571
2022
$
29,854
(31,842)
(6,213)
(8,201)
2021
$
13,889
(1,894)
7,576
19,571
The following tables summarize the significant assumptions used in the modelling process for both internal and external
appraisals for the years ended 2022 and 2021:
Periods ended December 31
(in thousands of dollars, except for per unit)
Net income and comprehensive income
Non-recurring items:
Transaction costs on dispositions of investment properties
and mortgage early repayment fees
Fair value adjustment on investment properties
Fair value adjustment on derivative financial instruments
Fair value adjustment on Class B LP units
Industrial
Off-downtown
core office
Necessity-based
retail
Adjusted net income(1)
Per unit
4.75% -6.75%
5.75% - 8.25%
5.50% - 8.00%
(1) This is a non-IFRS financial measure, refer to page 45.
Quarter
2022
$
1,769
627
7,781
(1,971)
160
8,366
9.8¢
2021
$
Year
2022
$
2021
$
23,219
38,154
41,568
109
1,611
(19,571)
3,297
21
7,075
9.5¢
8,201
(14,216)
(149)
33,601
40.3¢
297
(19,571)
3,246
231
25,771
36.0¢
As at December 31, 2022
Capitalization rate
Terminal capitalization rate
Discount rate
Weighted average capitalization rate
As at December 31, 2021
Capitalization rate
Terminal capitalization rate
Discount rate
4.75% - 7.50%
5.75% - 8.00%
5.50% - 8.00%
5.50% - 8.25%
6.25% - 8.75%
6.25% - 8.75%
5.75%
6.76%
6.84%
4.50% - 8.50%
5.25% - 8.50%
5.25% - 7.75%
4.75% - 7.00%
5.50% - 7.50%
6.00% - 7.00%
5.75% - 7.50%
5.50% - 8.25%
6.50% - 7.50%
Weighted average capitalization rate
5.72%
6.41%
6.62%
The weighted average capitalization rate for the entire portfolio as at December 31, 2022, was 6.48% (6.33% as at
December 31, 2021), 15 basis points higher compared to the same period last year.
Since December 31, 2021, BTB sold 8 properties at a weighted average capitalization rate of 6.78%. In addition, the trust
acquired 6 properties (fair value of $100.4 million as at December 31, 2022) at a weighted average capitalization rate
of 5.80%.
As at December 31, 2022, the Trust has estimated that if an increase / decrease of 0.25% in the capitalization rate were
applied to the overall portfolio, this variation would affect the fair value of its investment properties respectively by a
reduction of $43.9 million or an increase of $47.4 million. The change in the capitalization rates is an appropriate proxy
of the changes for the discount and terminal capitalization rates.
Adjusted net income (1)
Net income and comprehensive income fluctuate from one quarter to the next based on non-recurring items and certain
volatile non-monetary items. The fair value of derivative financial instruments and the fair value of investment properties
fluctuate based on the stock market volatility of the Trust’s units, the forward interest rate curve and the discount and
capitalization rates of its real estate portfolio.
Adjusted Earnings Before Interest, Taxes, Depreciation and
Amortization (EBITDA)(1)
The following table provides a reconciliation of net income and comprehensive income established in accordance with
IFRS and Adjusted EBITDA(1) for the periods ended December 31, 2022, and December 31, 2021, as well as the years ended
2022 and 2021:
Periods ended December 31
(in thousands of dollars, except for per unit)
Net income being total comprehensive income for the period
Interest expense
Accretion of effective interest on mortgage loans and convertible
debentures
Amortization of property and equipment
Lease incentive amortization
Fair value adjustment on investment properties
Fair value adjustment on derivative financial instruments
Fair value adjustment on Class B LP units
Unit-based compensation (Unit price remeasurement)
Transaction costs on dispositions of investment properties
and mortgage early repayment fees
Straight-line lease adjustment
Adjusted EBITDA(1)
(1) This is a non-IFRS financial measure, refer to page 45.
Quarter
Year
2022
$
1,769
7,706
336
31
787
7,781
(1,971)
160
198
627
(1,077)
16,347
2021
$
23,219
5,940
275
22
858
(19,571)
3,297
21
23
109
(758)
13,435
2022
$
38,154
28,450
1,127
122
3,113
8,201
(14,216)
(149)
(182)
1,611
(1,822)
64,409
2021
$
41,568
22,693
1,301
87
3,292
(19,571)
3,246
231
189
297
(1,334)
51,999
For the quarter, the Adjusted EBITDA(1) was $16.3 million compared to $13.4 million for the same quarter last year,
representing an increase of 21.7%. For the year 2022, the Adjusted EBITDA(1) was $64.4 million for the year 2022
compared to $52.0 million for the year 2021, representing an increase of 23.9%. Both increases are mainly explained
by the accretive acquisitions made since last year and a combination of a higher in place occupancy rate and higher
average lease rate.
2
6
(1) This is a non-IFRS financial measure, refer to page 45.
3
6
2022 Annual Report Operating Results – Same-Property Portfolio
Same-property portfolio
The same-property portfolio includes all the properties owned by the Trust on January 1, 2021, and that are still owned by
the Trust on December 31, 2022. Therefore, it excludes all the acquired(2) and disposed(3) properties during the years 2021
and 2022.
Distributions
Distributions and per unit
The following table summarizes the distributions for the periods ended December 31, 2022, and December 31, 2021,
as well as the years ended 2022 and 2021:
The following table summarizes the results of the same-property NOI(1) for the periods ended December 31, 2022, and
December 31, 2021, as well as the years ended 2022 and 2021:
Periods ended December 31
(in thousands of dollars, except for per unit data)
Periods ended December 31
(in thousands of dollars)
Quarter
Year
2022
2021
Δ %
2022
2021
Δ %
$
$
$
$
Distributions
Cash distributions
Cash distributions – Class B LP units
Net operating income (NOI) as reported in the financial statements
18,624
14,776
26.0% 70,430
56,336
25.0%
Distributions reinvested under the distribution reinvestment plan
Quarter
2022
$
5,535
26
852
6,413
13.3%
2021
$
4,774
26
778
5,578
13.9%
Year
2022
$
21,700
104
3,228
25,032
12.9%
2021
$
18,378
108
2,978
21,464
13.9%
7.5¢
7.5¢
30.0¢
30.0¢
Total distributions to unitholders
Percentage of reinvested distributions(1)(2)
Per unit(2)
Distributions
(1) This is a non-IFRS financial measure. The percentage of reinvested distributions ratio is calculated by dividing the distributions reinvested under the distribution
reinvestment plan by the total distributions to unitholders.
(2) Including Class B LP units.
For the quarter, the monthly distributions paid to unitholders totalled 2.5¢ per unit for the quarterly total of 7.5¢ per unit,
unchanged from the same quarter of 2021.
For the year 2022, the monthly distributions paid to unitholders totalled 30.0¢ per unit, unchanged from last year.
NOI sourced from:
Acquisitions
Dispositions
Retrospective additional recovery(2)
Same Property NOI(1)
Same Property NOI(1) sourced from:
Industrial
Off-downtown core office
Necessity-based retail
(4,753)
(1,358)
(17,242)
(1,597)
(31)
-
(494)
-
(726)
(2,602)
-
(1,400)
13,840
12,924
7.1% 52,462
50,737
3.4%
2,066
2,058
0.4%
8,350
7,973
7,299
4,475
6,482
12.6%
28,114
26,819
4,384
2.1% 15,998
15,945
4.7%
4.8%
0.3%
Same Property NOI(1)
(1) This is a non-IFRS financial measure, refer to page 45.
(2) As mentioned in the Trust’s Q2 2021 MD&A (dated August 6, 2021), section Operating Results – Rental Revenue, the Trust had retrospective additional recoveries
of $1.4 million. The same-property portfolio analysis excluded these elements for the 2021 figures.
7.1% 52,462
13,840
50,737
12,924
3.4%
For the quarter, same-property net operating income (NOI)(1) increased by $0.9 million or 7.1%. The important leasing
efforts made during the previous quarters resulted in an increase in occupancy rate compared to the same quarter last
year and therefore generated additional revenues.
For the year 2022, same-property NOI(1) increased by $1.7 million or 3.4% compared to the same period last year, which
is explained by a combination of a higher in-place occupancy rates (1.2% increase compared to the same period for 2021)
and an increase in average lease renewal rates of 12.2% for the period. For the cumulative period, the same-property
NOI(1) sourced from industrial properties increased by 4.7%, off-downtown core office properties increased by 4.8%
and necessity-based retail increased by 0.3%.
(1) This is a non-IFRS financial measure, refer to page 45.
(2) Refer to the Trust’s consolidated financial statements dated February 24, 2023, note 3, section a) for the acquired properties details.
(3) Refer to the Trust’s consolidated financial statements dated February 24, 2023, note 3, section b) for the disposed properties details.
4
6
5
6
2022 Annual Report Funds from Operations (FFO)(1)
Adjusted Funds from Operations (AFFO)(1)
The following table provides a reconciliation of net income and comprehensive income established in accordance with
IFRS and FFO(1) for the periods ended December 31, 2022, and December 31, 2021, as well as the years ended 2022 and
2021:
The following table provides a reconciliation of FFO(1) and AFFO(1) for the periods ended December 31, 2022, and
December 31, 2021, as well as the years ended 2022 and 2021:
Periods ended December 31
(in thousands of dollars, except for per unit)
Net income and comprehensive income (IFRS)
Fair value adjustment on investment properties
Fair value adjustment on Class B LP units
Amortization of lease incentives
Fair value adjustment on derivative financial instruments
Leasing payroll expenses(6)
Distributions - Class B LP units
Unit-based compensation (Unit price remeasurement)(5)
FFO(1)
Non-recurring item
Transaction costs on disposition of investment properties and
mortgage early repayment fees
Recurring FFO(1)
FFO per unit(1)(2)(3)
Recurring FFO per unit(1)(2)(4)
FFO payout ratio(1)
Recurring FFO payout ratio(1)
Quarter
Year
2022
$
1,769
7,781
160
787
(1,971)
682
26
198
2021
$
23,219
(19,571)
21
858
3,297
208
30
23
2022
$
38,154
8,201
(149)
3,113
(14,216)
1,243
104
(182)
2021
$
41,568
(19,571)
231
3,292
3,246
784
108
189
9,432
8,085
36,268
29,847
627
10,059
11.0¢
11.8¢
67.9%
63.6%
109
8,194
10.9¢
11.0¢
68.9%
68.0%
1,611
37,879
43.5¢
45.4¢
69.0%
66.1%
297
30,144
41.7¢
42.1¢
71.9%
71.2%
(1) This is a non-IFRS financial measure, refer to page 45.
(2) Including Class B LP units.
(3) The FFO per unit ratio is calculated by dividing the FFO(1) by the Trust’s unit outstanding at the end of the period (including the Class B LP units at outstanding at the
end of the period).
(4) The recurring FFO per unit ratio is calculated by dividing the recurring FFO(1) by the Trust’s unit outstanding at the end of the period (including the Class B LP units at
outstanding at the end of the period).
(5) The impact of the unit price remeasurement on the deferred unit-based compensation plan has been considered in the calculation of the recurring FFO(1) and AFFO(1)
starting Q2 2021.
(6) The impact of the CIO compensation, hired in Q2 2022, was added to the Leasing payroll expenses during Q4 2022 as his duties were mainly leasing activities
throughout the year.
For the quarter, recurring FFO(1) was 11.8¢ per unit, compared to 11.0¢ per unit for the same quarter last year. The increase
for the quarter is explained by: (i) the improvement of in-place occupancy rates across all business segments; (ii) the
increase in average lease renewal rates by 8.0%; and (iii) the effect of accretive acquisitions concluded since the fourth
quarter of last year.
For the year 2022, the recurring FFO(1) was 45.4¢ per unit, compared to 42.1¢ per unit for the year 2021. Moreover,
excluding the retrospective $1.4 million additional recovery recognized during the second quarter in 2021, the recurring
FFO(1) would have increased by 5.2¢ or 13.0% per unit as compared to the same period in 2021.
The recurring FFO payout ratio(1) for the quarter stood at 63.6%, compared to 68.0% for the same quarter in 2021. For the
year 2022, the recurring FFO payout ratio(1) stood at 66.1%, compared to 71.2% for the year 2021.
Periods ended December 31
(in thousands of dollars, except for per unit data)
FFO(1)
Straight-line rental revenue adjustment
Accretion of effective interest
Amortization of other property and equipment
Unit-based compensation expenses
Provision for non-recoverable capital expenditures(1)
Provision for unrecovered rental fees(1)
AFFO(1)
Transaction costs on disposition of investment properties
and mortgage early repayment fees
Recurring AFFO(1)
AFFO per unit(1)(2)(3)
Recurring AFFO per unit(1)(2)(4)
AFFO payout ratio(1)
Recurring AFFO payout ratio(1)
Quarter
Year
2022
$
9,432
(1,077)
336
31
206
(630)
(375)
7,923
627
8,550
9.3¢
10.0¢
80.8%
74.9%
2021
$
8,085
(758)
275
22
143
(539)
(375)
6,853
109
6,962
9.2¢
9.4¢
81.3%
80.0%
2022
$
36,268
(1,822)
1,127
122
721
(2,390)
(1,500)
32,526
1,611
34,137
39.0¢
40.9¢
77.0%
73.3%
2021
$
29,847
(1,334)
1,301
87
877
(2,007)
(1,500)
27,271
297
27,568
38.1¢
38.5¢
78.7%
77.9%
(1) This is a non-IFRS financial measure, refer to page 45.
(2) Including Class B LP units.
(3) The AFFO per unit ratio is calculated by dividing the AFFO(1) by the Trust’s unit outstanding at the end of the period (including the Class B LP units at outstanding at the
end of the period).
(4) The recurring AFFO per unit ratio is calculated by dividing the recurring AFFO(1) by the Trust’s unit outstanding at the end of the period (including the Class B LP units
at outstanding at the end of the period).
For the quarter, recurring AFFO(1) was 10.0¢ per unit, compared to 9.4¢ per unit for the same quarter last year.
For the year 2022, recurring AFFO(1) was 40.9¢ per unit, compared to 38.5¢ per unit for the year 2021. Moreover, excluding
the retrospective $1.4 million additional recovery recognized during the second quarter in 2021, the recurring AFFO(1)
would have increased by 4.3¢ or 11.9% per unit as compared to the same period in 2021.
The recurring AFFO payout ratio(1) for the quarter stood at 74.9% compared to 80.0% for the same quarter last year.
For the year 2022, the recurring AFFO payout ratio(1) stood at 73.3% compared to 77.9% for the year 2021.
In calculating AFFO(1), the Trust deducts a provision for non-recoverable capital expenditures(2) to consider capital
expenditures invested to maintain the condition of its properties and to preserve rental revenue. The provision
for non-recoverable capital expenditures is calculated based on 2% of rental revenues. This provision is based on
management’s assessment of industry practices and its investment forecasts for the coming years.
The Trust also deducts a provision for unrecovered rental fees(2) in the amount of approximately 25¢ per square feet
on an annualized basis. Even though quarterly rental fee disbursements vary significantly from one quarter to another,
management considers that this provision fairly presents, in the long term, the average disbursements not recovered
directly in establishing the rent that the Trust will undertake. These disbursements consist of inducements paid or granted
when leases are signed that are generally amortized over the term of the lease and are subject to an equivalent increase
in rent per square foot, and of brokerage commissions and leasing payroll expenses.
6
6
(1) This is a non-IFRS financial measure, refer to page 45.
(1) This is a non-IFRS financial measure, refer to page 45.
(2) This is a non-IFRS financial measure as defined in this page.
7
6
2022 Annual Report The following table compares the amount of the provision for non-recoverable capital investments to the amount
of investment made during the current comparative quarter and in the last few years:
Segmented Information
Years ended December 31
(in thousands of dollars)
Provision for non-recoverable capital expenditures(1)
Non-recoverable capital expenditures
(1) This is a non-IFRS financial measure, refer to AFFO section for detailed explanations.
2022
(12 months)
2021
(12 months)
2020
(12 months)
$
2,390
1,735
$
2,007
1,297
$
1,859
2,055
The Trust intends to achieve a balance between actual investment and the estimated provisions over the long term.
Management may change the calculation of the provision, as required.
Cash Flows
The following table shows the Trust net distributions to unitholders compared to net cash flows from operating activities
less interest paid for the years 2022, 2021 and 2020:
Years ended December 31
(in thousands of dollars)
Net cash flows from operating activities
Interest paid
Net cash flows from operating activities less interest paid
Net distributions to unitholders
2022
(12 months)
2021
(12 months)
2020
(12 months)
$
66,240
(27,925)
38,315
21,573
$
56,538
(21,755)
34,783
18,171
$
46,145
(21,787)
24,358
21,513
Surplus of net cash flows from operating activities less interest paid compared
to net distributions to unitholders
16,742
16,612
2,845
The following table summarizes the reconciliation of net cash from operating activities presented in the financial
statements, AFFO(1) and FFO(1) for the periods ended December 31, 2022, and December 31, 2021, as well as the years
ended 2022 and 2021:
Periods ended December 31
(in thousands of dollars)
Cash flows from operating activities
Leasing payroll expenses
Transaction costs on purchase and disposition of investment
properties and early repayment fees
Adjustments for changes in other working capital items
Financial income
Interest expenses
Provision for non-recoverable capital expenditures(2)
Provision for non-recovered rental fees(2)
Accretion of non-derivative liability component of convertible
debentures
AFFO(1)
Provision for non-recoverable capital expenditures(2)
Provision for non-recovered rental fees(2)
Straight-line rental revenue adjustment
Unit-based compensation expenses
Accretion of effective interest
Amortization of property and equipment
FFO(1)
(1) This is a non-IFRS financial measure, refer to page 45.
(2) This is a non-IFRS financial measure, refer to AFFO section for detailed explanations.
8
6
Quarter
2022
$
18,961
682
(627)
(2,523)
225
(7,706)
(630)
(375)
(84)
7,923
630
375
1,077
(206)
(336)
(31)
2021
$
Year
2022
$
2021
$
25,137
66,240
56,538
208
(109)
(11,604)
158
1,243
(1,611)
(1,293)
624
784
(297)
(3,934)
739
(5,940)
(28,450)
(22,693)
(539)
(375)
(84)
6,853
539
375
758
(143)
(275)
(22)
(2,390)
(1,500)
(337)
32,526
2,390
1,500
1,822
(721)
(1,127)
(122)
(2,007)
(1,500)
(360)
27,271
2,007
1,500
1,334
(877)
(1,301)
(87)
9,432
8,085
36,268
29,847
The Trust’s operations are generated from three segments of properties located in the provinces of Québec, Ontario,
Alberta and Saskatchewan. The following tables summarize each operating segment’s contribution to revenues and to
net operating income (NOI) for the periods ended December 31, 2022, and December 31, 2021, as well as the years ended
2022 and 2021:
Periods ended December 31
(in thousands of dollars)
Quarter ended December 31, 2022
Investment properties
Rental revenue from properties
Net operating income (NOI)
Quarter ended December 31, 2021
Investment properties
Rental revenue from properties
Net operating income (NOI)
Periods ended December 31
(in thousands of dollars)
Year ended December 31, 2022
Rental revenue from properties
Net operating income (NOI)
Year ended December 31, 2021
Rental revenue from properties
Net operating income (NOI)
Industrial performance
Industrial
Off-downtown
core office
Necessity-based
retail
Total
$
%
$
%
$
%
$
344,998
6,612
5,045
29.6
21.0
27.1
570,527
17,598
9,104
283,568
25.5
575,216
3,246
2,077
12.1
14.1
15,900
8,109
49.0
55.9
48.9
51.8
59.4
54.8
249,356
7,276
4,475
252,187
7,643
4,590
21.4
23.1
24.0
22.7
28.5
31.1
1,164,881
31,486
18,624
1,110,971
26,789
14,776
Industrial
Off downtown
core office
Necessity-based
retail
Total
$
%
$
%
$
%
$
22,910
17,565
13,672
9,235
19.2
24.9
13.6
16.4
68,794
36,863
58,034
30,244
57.5
52.4
57.9
53.7
27,791
16,002
28,637
16,857
23.3
22.7
28.5
29.9
119,495
70,430
100,343
56,336
The industrial segment continues to show good performance. The proportional fair value of industrial properties
increased from 25.5% to 29.6% compared to the same period last year, due to the net acquisitions of industrial properties
for $31.5 million concluded since the same period in 2021 and the increase of $30.2 million in fair value adjustment for
the operating segment. The acquired properties are all fully occupied and have a positive impact on the occupancy rate,
which stood at 100.0% at the end of the quarter, a 3.0% increase compared to the same period last year. For the year
2022, the proportional rental revenue from industrial properties increased by 5.6% compared to the same period last
year, which is explained by a combination of the 9.9% increase in average renewal rate for the year and by the higher
occupancy rate.
Off-downtown core office performance
The performance of the segment has been stable across the year, and it has been supported by the quality of its tenants.
For the year 2022, the Trust concluded lease renewals for a total of 306,567 square feet with an increase in the average
renewal rate of 14.1%. The percentage of net operating income (NOI) generated by the off-downtown core office segment
was positively affected by the acquisitions of the two Alfred Nobel properties in Montréal and the two Bank Street
properties in Ottawa. These acquisitions were accretive from a NOI standpoint, resulting in an increase compared to the
same period last year from $30.2 million to $36.9 million. For the year 2022, the proportion of the net operating income
(NOI) generated by the off-downtown core office segment decreased from 53.7% to 52.4% compared to the same period
last year.
9
6
2022 Annual Report Necessity-based retail performance
The necessity-based retail segment continues to show good performance for the year as most of the properties are
anchored or leased by necessity-based tenants. The occupancy rate in the necessity-based retail segment at the end
of the year 2022 stood at 98.2%, an increase of 3.1% compared to the same period last year. The Trust was able to
obtain 8.3% of increase in the average renewal rate for the year 2022. The proportion of the net operating income (NOI)
generated by the necessity-based retail segment decreased from 29.9% to 22.7% compared to the same period last
year, mainly due to the Trust not concluding any acquisitions within the necessity-based retail segment while acquiring
properties in the industrial and off-downtown core office segments which increased the proportion of net operating
income (NOI) of their respective segments.
0
7
Assets
Investment properties
The Trust has grown through the acquisitions of high-quality properties based on its selection criteria, while maintaining
an appropriate allocation among three operating segments: industrial, off-downtown core office, and necessity-based
retail.
The real estate portfolio consists of direct interests in wholly owned investment properties and the Trust’s share of the
assets, liabilities, revenues, and expenses of two jointly controlled investment properties.
The following table summarizes the changes in the fair value of investment properties for the periods ended December
31, 2022, and December 31, 2021, as well as the years ended 2022 and 2021:
Periods ended December 31
(in thousands of dollars)
Balance, beginning of period
Additions:
Acquisitions
Dispositions
Capital expenditures
Leasing fees and capitalized lease incentives
Fair value adjustment on investment properties
Other non-monetary changes(1)
Balance, end of period
Quarter
2022
$
2021
$
Year
2022
$
2021
$
1,179,869
923,638
1,110,971
903,870
33
(10,502)
667
2,305
(7,780)
289
170,130
(4,450)
1,436
746
19,571
(100)
96,155
(42,679)
3,370
6,551
(8,199)
(1,288)
185,864
(4,450)
3,672
4,402
19,571
(1,958)
1,164,881
1,110,971
1,164,881
1,110,971
(1) The other non-monetary changes are composed of the lease incentives amortization and straight-line lease adjustments.
The fair value of its investment properties stood at $1,165 million as at December 31, 2022, compared to $1,111 million
as at December 31, 2021. The increase of $54.3 million is explained by: i) the previously mentioned acquisitions and
dispositions for which the net impact increased the portfolio of investment properties by $53.5 million (acquisitions
of investment properties, including capitalized transactions cost, of $96.2 million netted by dispositions of investment
properties, excluding disposition costs, of $42.7 million); (ii) additions of capital expenditures of $3.4 million; (iii) the
net impact of leasing fees and capitalized lease incentives of $6.6 million; (iv) loss on other non-monetary changes
of $1.3 million; and (v) the loss on net changes in fair value of investment properties of $8.2 million.
Improvements in investment properties
The Trust invests capital to improve its properties to preserve the quality of their infrastructure and services provided
to tenants. These investments include value-added maintenance corresponding to expenditures required to upkeep
properties, as well as property improvement and redevelopment projects intended to increase leasable area, occupancy
rates or quality of space available for rent. In some cases, capital expenditures are amortized and may be recovered from
tenants.
The following table summarizes capital expenditures, incentives, and leasing fees, for the periods ended December 31,
2022, and December 31, 2021, as well as the years ended 2022 and 2021:
Periods ended December 31
(in thousands of dollars)
Recoverable capital expenditures
Non-recoverable capital expenditures
Total capital expenditures
Leasing fees and leasehold improvements
Total
Quarter
Year
2022
$
350
317
667
2,305
2,972
2021
$
1,357
79
1,436
746
2,182
2022
$
1,635
1,735
3,370
6,551
9,921
2021
$
2,375
1,297
3,672
4,402
8,074
1
7
2022 Annual Report Receivables
The following table summarizes receivables for the periods ended December 31, 2022, and December 31, 2021:
Capital Resources
Long-term debt
(in thousands of dollars)
Rent receivable
Allowance for expected credit losses
Net rent receivable
Unbilled recoveries
Other receivables
Receivables
December 31,
2022
December 31,
2021
$
3,431
(1,011)
2,420
1,142
1,254
4,816
$
4,497
(944)
3,553
1,388
587
5,528
Receivables reduced from $5.5 million as at December 31, 2021, to $4.8 million as at December 31, 2022. The reduction
is mainly caused by a decrease of rent receivables impacted by the increase in efficiency with regards to collection.
Prepaid expenses, Deposits and Property and equipment
The following table summarizes the prepaid expenses, deposits and property and equipment for the periods ended
December 31, 2022, and December 31, 2021:
(in thousands of dollars)
Property and equipment
Accumulated depreciation
Net property and equipment
Prepaid expenses
Deposits
Other assets
December 31,
2022
December 31,
2021
$
1,436
(1,114)
322
1,234
1,929
3,485
$
1,438
(992)
446
1,811
936
3,193
Prepaid expenses, deposits and property and equipment increased from $3.2 million as at December 31, 2021, to
$3.5 million as at December 31, 2022, which is explained by the increase in deposits related to future potential acquisitions
(refer to the subsequent events section of this MD&A for more information).
The following table summarizes the balance of BTB’s indebtedness on December 31, 2022, including mortgage loans
and convertible debentures, based on the year of maturity and corresponding weighted average contractual interest rates:
As at December 31, 2022
(in thousands of dollars)
Year of maturity
2023
2024
2025
2026
2027
2028 and thereafter
Total
(1) Gross amounts.
Balance of
convertible
debentures(1)
Balance of
mortgages
payable(1)
Weighted average
contractual
interest rate
$
-
24,000
20,280
-
-
-
44,280
$
68,253
109,991
58,789
118,913
117,770
164,725
638,441
%
5.69
4.52
4.30
3.32
4.85
3.62
4.24
The Trust has $68.3 million of mortgages coming to maturity during the next year and is in process of refinancing.
Historically, the Trust has always been able to refinance its existing mortgages and there is no indication that this would
change.
Weighted average contractual interest rate
As at December 31, 2022, the weighted average contractual interest rate of the Trust’s long-term debt stood at 4.24%
(4.09% for mortgage loans and 6.46% for convertible debentures), representing an increase of 54 basis points compared
to the same period last year. As at December 31, 2021, the weighted average contractual interest rate of the Trust’s
long-term debt stood at 3.70% (3.49% for mortgage loans and 6.48% for convertible debentures).
Mortgage loans
As at December 31, 2022, the Trust’s total mortgage loans (excluding unamortized fair value adjustments and
unamortized financing expenses) amounted to $638.4 million compared to $607.0 million as at December 31, 2021.
The net increase of $31.4 million includes $59.8 million that relates to previously mentioned acquisitions where the Trust
contracted or assumed mortgages and $2.6 million on refinanced mortgages, reduced by $10.8 million for mortgage
reimbursement on previously mentioned dispositions and $20.2 million of monthly principal repayments.
The following table summarizes the changes in mortgage loans payable for the periods ended December 31, 2022:
Period ended December 31, 2022
(in thousands of dollars)
Balance at beginning(1)
Mortgage loans contracted or assumed(2)
Balance repaid at maturity or upon disposition(3)
Monthly principal repayments(4)
Quarter
$
631,808
35,456
(23,750)
(5,073)
Year
$
607,038
88,422
(36,809)
(20,210)
Balance as at December 31, 2022(1)
(1) Before unamortized financing expenses and fair value assumption adjustments.
(2) This is a non-IFRS measure. Mortgage loans contracted or assumed are included in the Condensed Consolidated Interim Statements of Cash Flows within
the Mortgage loans, net of financing expenses.
(3) This is a non-IFRS measure. Balance repaid at maturity or upon disposition are included in the Condensed Consolidated Interim Statements of Cash Flows within
the following: Repayment of mortgage loans and Net proceeds from disposition of investment properties.
(4) This is a non-IFRS measure. Principal monthly repayments are included in the Condensed Consolidated Interim Statements of Cash Flows within Repayment
of mortgage loans.
638,441
638,441
2
7
3
7
2022 Annual Report As at December 31, 2022, the weighted average mortgage interest rate was 4.09% compared to 3.49% for the same
period last year, an increase of 60 basis points. This increase is mainly due to the increase in the average weighted
contractual rate of variable interest on mortgage loans outstanding, which increased by 357 basis points to 6.38% (2.81%
as at December 31, 2021). In comparison, the weighted average for fixed interest rate increased by 12 basis point to 3.73%
(3.61% as at December 31, 2021).
As at December 31, 2022, the majority of the Trust’s mortgages payable bear interest at fixed rates (cumulative principal
amount of $552.3 million) or are subject to floating-to-fixed interest rate swaps (cumulative principal amount of $52.0
million). However, the Trust has three loans that bear interest at floating rates (cumulative principal balance of $34.1
million).
The weighted average term of existing mortgage loans was 4.0 years as at December 31, 2022, compared to 4.7 years
for the same period last year. The Trust attempts to spread the maturities of its mortgages over many years to mitigate
the risk associated with renewals.
The following table summarizes future mortgage loan repayments for the next few years:
As at December 31, 2022
(in thousands of dollars)
Maturity
2023
2024
2025
2026
2027
2028 and thereafter
Total
Unamortized fair value assumption adjustments
Unamortized financing expenses
Balance as at December 31, 2022
Principal
repayment
Balance at
maturity
Total
% of total
$
$
$
18,507
15,961
13,626
11,278
7,472
15,110
67,587
103,795
52,853
105,191
108,932
118,129
86,094
119,756
66,479
116,469
116,404
133,239
81,954
556,487
638,441
13.5
18.8
10.4
18.2
18.2
20.9
100.0
564
(2,894)
636,111
As at December 31, 2022, the Trust was in compliance with all the contractual mortgage covenants to which it is subject.
Convertible debentures
The following table summarizes the convertible debentures for the periods ended December 31, 2022:
(in thousands of dollars)
Par value
Contractual interest rate
Effective interest rate
Date of issuance
Per-unit conversion price
Date of interest payment
Maturity date
Series G(1)(3)
24,000
6.00%
7.30%
Total
44,280
Series H(2)(3)
20,280(4)
7.00%
8.28%
October 2019
September 2020
5.42
3.64
April 30 and October 31
April 30 and October 31
October 2024
October 2025
Balance as at December 31, 2022
41,942
(1) Redeemable by the Trust, under certain conditions, as of October 31, 2022, but before October 31, 2023, at a redemption price equal to their initial principal amount
plus accrued, unpaid interest, provided that the unit market price is at least 125% of the Series G conversion price and, as of October 31, 2023, but before October 31,
2024, at a redemption price equal to their principal amount plus accrued and unpaid interest.
(2) Redeemable by the Trust, under certain conditions, as of October 31, 2023, but before October 31, 2024, at a redemption price equal to their initial principal amount
plus accrued, unpaid interest, provided that the unit market price is at least 125% of the Series H conversion price and, as of October 31, 2024, but before October 31,
2025, at a redemption price equal to their principal amount plus accrued and unpaid interest.
(3) The Trust may, at its option and under certain conditions, elect to satisfy its obligation to pay the principal amount of the Series G and H debentures by issuing
tradable units freely to Series G and H debenture holders.
(4) Conversion of $9,720 of the Series H debenture since issuance. No conversion during the quarter and $1,863 for the year 2022.
23,443
18,499
Debt ratio
Under the terms of its trust agreement, the Trust can’t contract a mortgage loan if, after having contracted the said loan,
the total mortgage debt would exceed 75% of the fair value of the total assets of the Trust. In accordance with the Trust
indenture, when establishing this calculation, the convertible debentures shouldn’t be considered in the calculation of
total indebtedness. Moreover, also under its trust indenture, in case of failure to abide by this condition, the Trust benefits
from a 12-month delay from the date of knowledge to remedy the situation.
The following table summarizes the Trust’s debt ratios as at December 31, 2022, and December 31, 2021:
(in thousands of dollars)
Cash and cash equivalents
Mortgage loans outstanding(1)
Convertible debentures(1)
Credit facilities
Total long-term debt less cash and cash equivalents(2)(3)
Total gross value of the assets of the Trust less cash and cash equivalents(2)(4)
Mortgage debt ratio (excluding convertible debentures and credit facilities)(2)(5)
Debt ratio – convertible debentures(2)(6)
Debt ratio – credit facilities(2)(7)
December 31, 2022
December 31, 2021
$
(2,404)
638,441
43,170
9,897
689,104
1,178,049
54.2%
3.7%
0.8%
$
(7,191)
607,038
44,564
35,468
679,879
1,124,690
54.0%
4.0%
3.2%
Total debt ratio(2)
(1) Before unamortized financing expenses and fair value assumption adjustments.
(2) This is a non-IFRS financial measure, refer to page 45.
(3) Long-term debt less free cash flow is a non-IFRS financial measure, calculated as total of: (i) fixed rate mortgage loans payable; (ii) floating rate mortgage loans
payable; (iii) Series G debenture capital amount; (iv) Series F debenture capital adjusted with non-derivative component less conversion options exercised by holders;
and (v) credit facilities, less cash and cash equivalents. The most directly comparable IFRS measure to net debt is debt.
(4) Gross value of the assets of the Trust less cash and cash equivalent (“GVALC”) is a non-IFRS financial measure defined as the Trust total assets adding the cumulated
amortization property and equipment and removing the cash and cash equivalent. The most directly comparable IFRS measure to GVALC is total assets.
(5) Mortgage debt ratio is calculated by dividing the mortgage loans outstanding by the GVALC.
(6) Debt ratio – convertible debentures is calculated by dividing the convertible debentures by GVALC.
(7) Debt ratio – credit facilities is calculated by dividing the credit facilities by the GVALC.
58.5%
60.5%
As of December 31, 2022, the mortgage debt ratio(1) excluding the convertible debentures and credit facilities totalled
54.2%, an increase of 0.2% since December 31, 2021. As of December 31, 2022, the total debt ratio(2), including the
convertible debentures and credit facilities, net of cash and cash equivalents, decreased to 58.5%, a decrease of 2.0%
since December 31, 2021. The decrease is driven by a partial repayment of the revolving credit facility in December 2022
with the funds received from the sale of two properties in the last quarter of the year.
The Trust seeks to finance its acquisitions with a maximum mortgage debt ratio of 65% since the cost of financing is
lower than the capital cost of the Trust’s equity. Liquidity refers to the Trust having credit availability under committed
credit facilities and/or generating enough cash and cash equivalents to fund the ongoing operational commitments
including maintenance capital and development capital expenditures, distributions to unitholders and planned growth
in the business. The Trust maintains credit facilities to provide financial liquidity which can be drawn or repaid on short
notice, reducing the need to hold liquid resources in cash and deposits. Management continues to believe the Trust is
well positioned based on the improved balance sheet over the years, short-term debt maturities that are under way to be
refinanced, a pool of assets that can be used to structure new lines of credit, and the liquidity of the portfolio in the event
of an opportunistic asset sale.
4
7
(1) This is a non-IFRS financial measure as defined in this page.
(2) This is a non-IFRS financial measure, refer to page 45.
5
7
2022 Annual Report Interest coverage ratio
Units outstanding
The following table summarizes the interest coverage ratio for the periods ended December 31, 2022, and December 31,
2021, as well as the years ended 2022 and 2021:
The following table summarizes the total number of units outstanding and the weighted number of units outstanding
for the periods ended December 31, 2022, and December 31, 2021, as well as the years ended 2022 and 2021:
Periods ended December 31
(in thousands of dollars, except for the ratios)
Adjusted EBITDA(1)
Interest expenses net of financial income(2)
Interest coverage ratio(3)
Quarter
Year
2022
$
16,347
7,481
2.19
2021
$
13,435
5,782
2.32
2022
$
64,409
27,826
2.31
2021
$
51,999
21,954
2.37
(1) This is a non-IFRS financial measure, refer to page 45.
(2) This is a non-IFRS financial measure. Interest expenses exclude early repayment fees, accretion of effective interest, distribution on Class B LP units, accretion
of non-derivative liability component of convertible debentures and the fair value adjustment on derivative financial instruments and Class B LP units.
(3) This is a non-IFRS financial measure. Interest coverage ratio is calculated by dividing the Adjusted EBITDA(1) by Interest expenses net of financial income
(as previously defined).
For the year ended December 31, 2022, the interest coverage ratio stood at 2.31, a decrease of 6 basis points from the
same period last year.
Periods ended December 31
(in number of units)
Units outstanding, beginning of the period
Units issued pursuant to a public issue
Distribution reinvestment plan
Issued - employee unit purchase plan
Issued - restricted unit compensation plan
Issued – deferred unit compensation plan
Class B LP units exchanged into Trust units
Issued – conversion of convertible debentures
Units outstanding, end of the period
Weighted average number of units outstanding
Debt service coverage ratio
Weighted average number of Class B LP units and units outstanding
Quarter
Year
2022
2021
2022
2021
84,985,440
73,797,811
74,126,971
63,439,435
-
-
9,584,100
7,809,650
252,839
195,100
872,983
752,280
-
-
-
-
-
-
-
-
-
11,915
130,506
-
-
14,351
71,722
-
50,000
134,060
511,804
1,989,533
85,238,279
74,126,971
85,238,279
74,126,971
84,900,129
73,664,818
82,402,375
70,242,615
85,247,394
74,012,083
82,749,640
70,600,991
On November 7, 2022, the Toronto Stock Exchange (the “TSX”) approved the normal course issuer bid (“NCIB”) program
authorized by the Trust’s Board of Trustees to repurchase for cancellation up to 5,838,023 units, from November 10,2022
to November 9,2023, representing approximately 7% of the Trust’s outstanding units and of its public float. As of
December 31,2022, no units have been repurchased for cancellation under the NCIB.
The following table summarizes the debt service coverage ratio for the periods ended December 31, 2022, and December
31, 2021, as well as the years ended 2022 and 2021:
Periods ended December 31
(in thousands of dollars, except for the ratios)
Adjusted EBITDA(1)
Interest expenses net of financial income(2)
Principal repayments
Debt service requirements
Debt service coverage ratio(3)
Quarter
2022
$
16,347
7,481
5,073
12,554
1.30
2021
$
Year
2022
$
2021
$
13,435
64,409
51,999
5,782
3,984
9,766
1.38
27,826
20,210
48,036
1.34
21,954
12,270
34,224
1.52
(1) This is a non-IFRS financial measure, refer to page 45.
(2) This is a non-IFRS financial measure. Interest expenses exclude early repayment fees, accretion of effective interest, distribution on Class B LP units, accretion
of non-derivative liability component of convertible debentures and the fair value adjustment on derivative financial instruments and Class B LP units.
(3) This is a non-IFRS financial measure. Debt service coverage ratio is calculated by dividing the Adjusted EBITDA(1) by Debt service requirements.
Class B LP units
The following table summarizes the Class B LP units for the periods ended December 31, 2022, and December 31, 2021,
as well as the years ended 2022 and 2021:
Period ended December 31, 2022
(in number of units)
Class B LP units outstanding, beginning of period
Fair value adjustment
Class B LP units outstanding, end of period
Quarter
Year
Units
347,265
-
347,265
$
1,108
160
1,268
Units
347,265
-
347,265
$
1,417
(149)
1,268
The Class B LP units are exchangeable at any time, at the option of the holder, for an equal number of units of the Trust
trading on the TSX. They’re entitled to receive the same distributions as declared on the Trust units. In accordance with
IFRS, distributions paid on Class B LP units are recorded as financial expenses when declared. Distributions declared are
adjusted in calculating FFO and AFFO.
The Class B LP units were issued on May 30, 2018 in payment for the acquisition of a 25% equity portion in the property
located at 815 Boulevard Lebourgneuf in Québec City.
6
7
7
7
2022 Annual Report Deferred unit compensation plan
The Trust has implemented a deferred unit compensation plan for its trustees and certain executive officers. Under this
plan, beneficiaries may elect to receive their compensation in cash, deferred units or a combination of both.
The following table summarizes deferred units outstanding for the periods ended December 31, 2022, and December 31,
2021, as well as the years ended 2022 and 2021:
Periods ended December 31
(in number of units)
Deferred units outstanding, beginning of the period
Trustees’ compensation
Distributions paid in units
Deferred units outstanding, end of the period
Restricted unit compensation plan
Quarter
Year
2022
117,001
2,377
2,349
121,727
2021
99,248
2,162
1,706
103,116
2022
103,116
9,558
9,053
121,727
2021
87,920
8,484
6,712
103,116
Under this plan, beneficiaries are awarded restricted units that become fully vested over a maximum period of three
years. The purpose of the plan is to encourage senior officers and selected employees to support the Trust’s growth
objectives and align their interests with the interests of unitholders. The purpose of the plan is also to serve as an
executive retention tool.
The following table summarizes restricted units outstanding for the periods ended December 31, 2022, and December 31,
2021, as well as the years ended 2022 and 2021:
Periods ended December 31
(in number of units)
Restricted units outstanding, beginning of the period
Granted
Cancelled
Settled
Quarter
Year
2022
138,583
2021
161,536
-
-
-
-
-
-
2022
161,536
93,576
-
(116,529)
138,583
2021
139,724
95,058
(1,524)
(71,722)
161,536
Restricted units outstanding, end of the period
138,583
161,536
Income Taxes
The Trust is taxed as a mutual fund trust for Canadian income tax purposes. The Trust intends to distribute or allocate
all of the taxable income to its unitholders and to deduct these distributions for income tax purposes.
A special tax regime applies to trusts that are considered specified investment flow-through (SIFT) entities as well as
those individuals who invest in SIFT entities. Under this regime, SIFT entities must generally pay taxes on their income
at rates that are close to those of companies. In short, a SIFT entity is an entity (including a trust) that resides in Canada,
whose investments are listed on a stock exchange or other public market and that holds one or more non-portfolio
properties.
However, for a given taxation year, BTB isn’t considered a SIFT entity and is therefore not subject to SIFT rules if, during
that year, it constitutes a real estate investment trust (REIT).
Generally, to qualify as a REIT, a trust must be resident in Canada and meet the following conditions all year long: (i) the
total fair market value of all the ”non-portfolio properties“ that are “qualified REIT properties” held by the trust is at least
90% of the total fair market value at that time of all the “nonportfolio assets” held by the trust (ii) not less than 90% of
its “gross REIT revenue” for the taxation year is from one or more of the following sources: rent from “real or immovable
properties,” interest, dispositions of “real or immovable properties” that are capital properties, dividends, royalties and
dispositions of “eligible resale properties” (iii) not less than 75% of its “gross REIT revenue” for the taxation year comes
from one or more of the following sources: rent from “real or immovable properties,” interest from mortgages on “real or
immovable properties,” and dispositions of “real or immovable properties” that are capital properties (iv) at each time in
the taxation year, an amount that is equal to 75% or more of the equity value of the trust at that time, is the amount that
is the total fair market value of all properties held by the trust, each of which is “real or immovable property” which is a
capital property, an “eligible resale property,” the indebtedness of a Canadian corporation represented by a banker’s
acceptance, cash or, generally, an amount receivable from the Government of Canada or from certain other public
agencies; and (v) the investments that are made therein are, at any time in the taxation year, listed or traded on a stock
exchange or other public market.
As at December 31, 2022, BTB met all these conditions and qualified as a REIT. As a result, the SIFT trust tax rules don’t
apply to BTB. BTB’s management intends to take the necessary steps to meet the conditions for the REIT Exception
on an ongoing basis in the future.
Nonetheless, there is no guarantee that BTB will continue to meet all the required conditions to be eligible for the REIT
exception for 2023 or any other subsequent year.
Employee unit purchase plan
The Trust offers its employees an optional unit purchase plan. Under this plan, the employees may contribute, each year,
from 3% to a maximum of 7% of their base salary depending on their years of tenure with the Trust. Subject to the plan’s
conditions, for each two units purchased by an employee, the Trust shall issue one unit from treasury to the employee.
Off-balance sheet arrangements and contractual commitments
The Trust doesn’t have any other off-balance sheet arrangement or commitment that have or are likely to have an impact
on its operating results or financial position, specifically its cash position and sources of financing.
8
7
9
7
2022 Annual Report Taxation of Unitholders
Risks and Uncertainties
For Canadian unitholders, to the best of the Trust management’s knowledge, distributions are qualified as follows for
taxation purposes:
Years ended December 31
Taxable as other income
Tax deferred
Total
2022
%
-
100
100
2021
%
-
100
100
Accounting Policies and Estimates
The preparation of consolidated financial statements requires management to make judgments, estimates and
assumptions that affect the reported amounts of assets, liabilities, revenues and expenses. Estimates are based on
historical experience and other assumptions that are considered reasonable under given circumstances. The result of the
continual review of these estimates is the basis for exercising judgment on the carrying amounts of assets and liabilities
and the reported amounts of revenues and expenses. Actual results may differ from these estimates. Critical judgments
made by BTB in applying significant accounting policies, the most significant of which is the fair value of investment
properties, are described in Note Investment Properties to the annual consolidated financial statements as at and for the
years ended December 31, 2022, and 2021.
The Trust used the income approach to determine fair value. Fair value is estimated by capitalizing the cash flow that
a property can reasonably be expected to produce over its remaining economic life. The income approach is based on
two methods: the overall capitalization rate method, whereby net operating income is capitalized at the requisite overall
capitalization rate, or the discounted cash flow method, whereby cash flows are projected over the expected term of the
investment plus a terminal value discounted using an appropriate discount rate.
Inflation and Interest Rates
The increase of the Bank of Canada policy interest rate has created a heightened level of uncertainty on the economy.
The rise of the policy rate has not had a significant impact on the Trust’s operations and ability to negotiate new or renew
mortgages. Given the situation, there could be certain repercussions on the mortgage refinancing activities, the fair
value of the investment properties, certain investment decisions and the level of transactions in the market. The Trust will
continue to monitor the effects of the rise of the policy rate on its investment activities and valuation of the investment
properties.
Numerous risks and uncertainties could cause BTB’s actual results to differ materially from those expressed, implied
or projected in the forward-looking statements, including those described in the “Risk Factors” section of BTB’s 2022
Annual Information Form for the year ended December 31, 2022, which is hereby incorporated by reference. Such risks
and uncertainties include:
• Access to Capital and to Debt Financing
•
Interest Rate Increases
• Ownership of Immovable Property
• Competition and Rising Property Prices
• Availability of Immovable Property for Acquisition
• Development Programs
• Recruitment and Retention of Employees and Executives
• Government Regulation
•
•
•
Limit on Activities Under the Trust Agreement
Tax Regulations
Fluctuations in Cash Distributions
• Reliance on Single or Anchor Tenants
•
Potential Unitholder Liability
• Conflicts of Interest
• Market Price of Units
•
Legal Rights Relating to Units
• Dilution
•
•
Environmental Matters
Legal Risks
• General Uninsured Losses
• Retail Industry
• A possible economic recession
•
Long-term effect of a global pandemic
0
8
1
8
2022 Annual Report Disclosure Controls and Procedures and Internal Control
Over Financial Reporting
The President and Chief Executive Officer and the Vice-President and Chief Financial Officer of BTB are responsible
for establishing and maintaining disclosure controls and procedures (“DC&P”) and internal control over financial reporting
(“ICFR”), as those terms are defined in Canadian Securities Administrators Multilateral Instrument 52-109.
Evaluations are performed regularly to assess the effectiveness of DC&P, including this MD&A and the consolidated
financial statements. Based on these evaluations, the President and Chief Executive Officer and the Vice-President and
Chief Financial Officer concluded that the DC&P were effective as at December 31, 2022, and that the current controls
and procedures provide reasonable assurance that material information about BTB is made known to them during the
quarter in which these filings are being prepared.
Evaluations are also performed to assess the effectiveness of ICFR. Based on those evaluations, the President and
Chief Executive Officer and the Vice President and Chief Financial Officer of BTB concluded that ICFR was effective
as at December 31, 2022, and, more specifically, that the financial reporting is reliable and that the consolidated financial
statements have been prepared for financial reporting purposes in accordance with IFRS.
During the fourth quarter of 2022, management made no changes to internal control over financial reporting that
materially affected, or are likely to materially affect, internal control over financial reporting.
APPENDIX 1 – Definitions
Class B LP Units
Class B LP units means the Class B LP limited partnership units of BTB LP, which are exchangeable for units, on a one for
one basis.
Rental revenue
Rental revenue includes all amounts earned from tenants related to lease agreements, including basic rent and additional
rent from operating expense recoveries. It also includes other service charges for parking and storage, lease termination
revenues and straight-line rent adjustments.
Some of the Trust’s leases include clauses providing for the recovery of rental revenue based on amounts that increase
every few years. These increases are negotiated when the leases are signed. Under IFRS, these increases must be
recognized on a straight-line basis over the terms of the leases.
Operating expenses
Operating expenses are expenses directly related to real estate operations and are generally charged back to tenants
as provided for in the contractual terms of the leases. Operating expenses include property taxes and public utilities,
costs related to indoor and outdoor maintenance, heating, ventilation and air conditioning, elevators, insurance, janitorial
services and management and operating fees. The amount of operating expenses that the Trust can recover from
its tenants depends on the occupancy rate of the properties and the nature of the existing leases containing clauses
regarding the recovery of expenses. Most of the Trust’s leases are net rental leases under which tenants are required
to pay their share of the properties’ operating expenses. The Trust pays particular attention to compliance with existing
leases and the recovery of these operating expenses.
Net operating income (NOI)
NOI is used in the real estate industry to measure operational performance. The Trust defines it as rental revenue from
properties, less the combined operating expenses of investment properties. This definition may differ from that of other
issuers and accordingly, the Trust’s NOI may not be comparable to the NOI of other issuers.
Financial expenses
Financial expenses arise from the following loans and financing:
• Mortgage loans payable contracted or assumed totalling approximately $638.4 million as at December 31, 2022,
compared to $495.8 as December 31, 2021.
•
Series G and H convertible debentures for a total par value of $44.3 million.
• Credit facilities used as needed.
•
Financing costs on mortgages, convertible debentures and other loans netted against the related debt
and amortized on an effective interest basis over the expected life of the debt.
Administration expenses
Administration expenses include corporate costs such as payroll expenses and professional fees associated
with executive and administrative staff of the Trust, the compensation plan for trustees, legal and auditing services,
expenses related to listed fund status, insurance costs, office expenses and expected credit losses and related legal
fees. Administration expenses include amortization of the head office building and property and equipment, as well
as unit-based compensation, a non-monetary item that affects the volatility of administrative expenses from quarter
to quarter.
2
8
3
8
2022 Annual Report Fair value adjustment on investment properties
Under IAS 40, the Trust accounts for its investment properties at fair value and recognizes the gain or loss arising from
a change in the fair value in profit or loss for the quarters in which it arises.
The fair value of investment properties is determined using the discounted cash flow method, the capitalized net
operating income (NOI) method or the comparable method, which are generally accepted valuation methods.
Management receives quarterly capitalization rate and discount rate data from external chartered valuators and
independent experts. The capitalization rate reports provide a range of rates for various geographic regions and for
various types and qualities of properties within each region. The Trust utilizes capitalization and discount rates within
ranges provided by external valuators. To the extent that the externally provided capitalization rate ranges change from
one reporting quarter to the next or should another rate within the provided ranges be more appropriate than the rate
previously used, the fair value of the investment properties would increase or decrease accordingly.
Same-property portfolio
The same-property portfolio includes all the properties owned by the Trust as at January 1, 2021 and still owned as
at December 31, 2022, but does not include the financial impacts from dispositions, acquisitions and developments
completed in 2021 and 2022, as well as the results of subsequently sold properties.
Net operating income (NOI) from the same-property portfolio
Net operating income (NOI) from the same-property portfolio provides an indication of the profitability of existing portfolio
operations and the Trust’s ability to increase its revenues and reduce its costs. It is defined as rental revenue from
properties from the same-property portfolio, less operating expenses of the same portfolio.
APPENDIX 2 –
Non IFRS Financial Measures – Annual Reconciliations
Funds from Operations (FFO)(1)
The following table provides a reconciliation of net income and comprehensive income established in accordance with
IFRS and FFO(1) for the years ended December 31, 2022, 2021 and 2020:
Years ended December 31
(in thousands of dollars, except for per unit)
Net income and comprehensive income (IFRS)
Fair value adjustment on investment properties
Fair value adjustment on Class B LP units
Amortization of lease incentives
Fair value adjustment on derivative financial instruments
Leasing payroll expenses(6)
Distributions – Class B LP units
Unit-based compensation (Unit price remeasurement)(5)
FFO(1)
Non-recurring item
Transaction costs on disposition of investment properties and mortgage early
repayment fees
Recurring FFO(1)
FFO per unit(1)(2)(3)
Recurring FFO per unit(1)(2)(4)
FFO payout ratio(1)
Recurring FFO payout ratio(1)
2022
$
38,154
8,201
(149)
3,113
(14,216)
1,243
104
(182)
2021
$
41,568
(19,571)
231
3,292
3,246
784
108
189
2020
$
2,919
8,375
(778)
3,068
7,642
616
157
-
36,268
29,847
21,999
1,611
37,879
43.5¢
45.4¢
69.0%
66.1%
297
2,230
30,144
24,229
41.7¢
42.1¢
71.9%
71.2%
34.8¢
38.3¢
97.7%
88.7%
(1) This is a non-IFRS financial measure, refer to page 45.
(2) Including Class B LP units.
(3) The FFO per unit ratio is calculated by dividing the FFO(1) by the Trust’s unit outstanding at the end of the period (including the Class B LP units at outstanding at the
end of the period).
(4) The recurring FFO per unit ratio is calculated by dividing the recurring FFO(1) by the Trust’s unit outstanding at the end of the period (including the Class B LP units
at outstanding at the end of the period).
(5) The impact of the unit price remeasurement on the deferred unit-based compensation plan has been considered in the calculation of the recurring FFO(1) and AFFO(1)
starting Q2 2021. As a reference, the cumulative impact for the 12 months cumulative period in 2020 was positive $373 or 0.1¢ per unit.
(6) The impact of the CIO compensation, hired in Q2 2022, was added to the Leasing payroll expenses during Q4 2022 as his duties were mainly leasing activities
throughout the year.
4
8
(1) This is a non-IFRS financial measure, refer to page 45.
5
8
2022 Annual Report Adjusted Funds from Operations (AFFO)(1)
Cash Flows
The following table provides a reconciliation of FFO(1) and AFFO(1) for the years ended December 31, 2022, 2021 and 2020:
The following table summarizes the reconciliation of net cash from operating activities presented in the financial
statements, AFFO(1), and FFO(1):
Years ended December 31
(in thousands of dollars except for per unit)
FFO(1)
Straight-line rental revenue adjustment
Accretion of effective interest
Amortization of other property and equipment
Unit-based compensation expenses
Provision for non-recoverable capital expenditures(1)
Provision for unrecovered rental fees(1)
AFFO(1)
Non-recurring item
Transaction costs on disposition of investment properties and mortgage early
repayment fees
Recurring AFFO(1)
AFFO per unit(1)(2)(3)
Recurring AFFO per unit(1)(2)(4)
AFFO payout ratio(1)
Recurring AFFO payout ratio(1)
2022
$
36,268
(1,822)
1,127
122
721
(2,390)
(1,500)
32,526
1,611
34,137
39.0¢
40.9¢
77.0%
73.3%
Year
2021
$
29,847
(1,334)
1,301
87
877
(2,007)
(1,500)
27,271
297
27,568
38.1¢
38.5¢
78.7%
77.9%
2020
$
21,999
(249)
1,244
100
181
(1,859)
(1,500)
19,916
2,230
22,146
31.5¢
35.0¢
108.0%
97.1%
(1) This is a non-IFRS financial measure, refer to page 45.
(2) Including Class B LP units.
(3) The AFFO per unit ratio is calculated by dividing the AFFO(1) by the Trust’s unit outstanding at the end of the period (including the Class B LP units at outstanding
at the end of the period).
(4) The recurring AFFO per unit ratio is calculated by dividing the recurring AFFO(1) by the Trust’s unit outstanding at the end of the period (including the Class B LP units
at outstanding at the end of the period).
Years ended December 31
(in thousands of dollars)
Cash flows from operating activities
Leasing payroll expenses
Transaction costs on disposition of investment properties and mortgage early
repayment fees
Adjustments for changes in other working capital items
Financial income
Interest expenses
Provision for non-recoverable capital expenditures(2)
Provision for non-recovered rental fees(2)
Accretion of non-derivative liability component of convertible debentures
AFFO(1)
Provision for non-recoverable capital expenditures(2)
Provision for non-recovered rental fees(2)
Straight-line rental revenue adjustment
Unit-based compensation expenses
Accretion of effective interest
Amortization of property and equipment
FFO(1)
(1)This is a non-IFRS financial measure, refer to page 45.
(2) Refer to AFFO section for detailed explanations.
Year
2021
$
2022
$
66,240
56,538
1,243
(1,611)
(1,293)
624
784
(297)
(3,934)
739
2020
$
46,145
616
(2,230)
1,465
564
(28,450)
(22,693)
(23,467)
(2,390)
(1,500)
(337)
32,526
2,390
1,500
1,822
(721)
(1,127)
(122)
(2,007)
(1,500)
(360)
27,270
2,007
1,500
1,334
(877)
(1,301)
(87)
36,268
29,846
(1,859)
(1,500)
(263)
19,471
1,859
1,500
249
(181)
(1,244)
(100)
21,554
6
8
(1) This is a non-IFRS financial measure, refer to page 45.
(1)This is a non-IFRS financial measure, refer to page 45.
7
8
2022 Annual Report APPENDIX 3 –
Non-IFRS Financial Measures – Quarterly Reconciliation
Funds from Operations (FFO)(1)
The following table provides a reconciliation of net income and comprehensive income established in accordance with
IFRS and FFO(1) for the last eight quarters:
(in thousands of dollars, except for per unit)
Net income and comprehensive income (IFRS)
Fair value adjustment on investment properties
Fair value adjustment on Class B LP units
Amortization of lease incentives
Fair value adjustment on derivative financial
instruments
Leasing payroll expenses(6)
Distributions – Class B LP units
Unit-based compensation (Unit price
remeasurement)(5)
FFO(1)
Non-recurring item
2022
Q-4
$
1,769
7,781
160
787
2022
2022
2022
Q-3
$
Q-2
$
Q-1
$
2021
Q-4
$
2021
Q-3
$
2021
Q-2
$
2021
Q-1
$
11,693
18,243
6,449
23,219
8,678
7,161
2,510
1,230
197
(1,007)
(19,571)
(142)
773
(233)
818
66
735
21
858
-
(18)
780
(1,971)
(3,898)
(9,344)
997
3,297
(2,598)
682
26
198
182
26
158
26
(172)
(285)
221
26
77
208
30
23
173
22
(19)
-
(52)
777
733
184
26
185
-
280
877
1,814
219
30
-
9,432
9,692
9,580
7,564
8,085
7,018
9,014
5,730
Transaction costs on disposition of investment
properties and mortgage early repayment fees
627
93
138
753
109
-
188
-
Recurring FFO(1)
FFO per unit(1)(2)(3)
Recurring FFO per unit(1)(2)(4)
FFO payout ratio(1)
Recurring FFO payout ratio(1)
10,059
9,785
9,718
8,317
11.0¢
11.8¢
11.4¢
11.5¢
11.3¢
11.4¢
9.7¢
10.7¢
8,194
10.9¢
11.0¢
7,018
9,202
5,730
9.5¢
9.5¢
12.3¢
12.5¢
8.9¢
8.9¢
67.9% 65.9% 66.4% 77.2% 68.9% 79.0%
61.1% 84.0%
63.6% 65.2% 65.5% 70.2% 68.0% 79.0% 59.9% 84.0%
(1) This is a non-IFRS financial measure, refer to page 45.
(2) Including Class B LP units.
(3) This is a non-IFRS financial measure. The FFO per unit ratio is calculated by dividing the FFO(1) by the Trust’s unit outstanding at the end of the period (including
the Class B LP units at outstanding at the end of the period).
(4) This is a non-IFRS financial measure. The recurring FFO per unit ratio is calculated by dividing the recurring FFO(1) by the Trust’s unit outstanding at the end
of the period (including the Class B LP units at outstanding at the end of the period).
(5) The impact of the unit price remeasurement on the deferred unit-based compensation plan has been considered in the calculation of the recurring FFO(1) and AFFO(1)
starting Q2 2021.
(6) The impact of the CIO compensation, hired in Q2 2022, was added to the Leasing payroll expenses during Q4 2022 as his duties were mainly leasing activities
throughout the year.
Adjusted Funds from Operations (AFFO)(1)
The following table provides a reconciliation of FFO(1) and AFFO(1) for the last eight quarters:
(in thousands of dollars, except for per unit)
FFO(1)
Straight-line rental revenue adjustment
Accretion of effective interest
Amortization of other property and equipment
Unit-based compensation expenses
Provision for non-recoverable capital expenditures(1)
Provision for unrecovered rental fees(1)
AFFO(1)
Non-recurring item
Transaction costs on disposition of investment
properties and mortgage early repayment fees
Recurring AFFO(1)
AFFO per unit(1)(2)(3)
Recurring AFFO per unit(1)(2)(4)
AFFO payout ratio(1)
Recurring AFFO payout ratio(1)
2022
Q-4
$
9,432
(1,077)
336
31
206
(630)
(375)
7,923
2022
2022
2022
Q-3
$
Q-2
$
Q-1
$
2021
Q-4
$
2021
Q-3
$
2021
Q-2
$
2021
Q-1
$
9,692
9,580
7,564
8,085
7,018
9,014
5,730
(521)
219
35
130
(599)
(375)
(74)
284
26
312
(580)
(375)
(150)
288
30
73
(581)
(375)
(758)
275
22
143
(539)
(375)
(88)
239
23
114
(478)
(375)
(91)
428
27
(24)
(519)
(376)
(397)
359
15
644
(471)
(374)
8,581
9,173
6,849
6,853
6,453
8,459
5,506
627
93
138
753
109
-
188
-
8,550
8,674
9,311
7,602
6,962
6,453
8,647
5,506
9.3¢
10.0¢
10.1¢
10.8¢
10.2¢
11.0¢
8.8¢
9.7¢
9.2¢
9.4¢
8.7¢
8.7¢
11.5¢
11.8¢
8.6¢
8.6¢
80.8% 74.4% 69.4% 85.3% 81.3% 85.9% 65.1% 87.4%
74.9% 73.6% 68.3% 76.8% 80.0% 85.9% 63.7% 87.4%
(1) This is a non-IFRS financial measure, refer to page 45.
(2) Including Class B LP units.
(3) The AFFO per unit ratio is calculated by dividing the AFFO(1) by the Trust’s unit outstanding at the end of the period (including the Class B LP units at outstanding
at the end of the period).
(4) The recurring AFFO per unit ratio is calculated by dividing the recurring AFFO(1) by the Trust’s unit outstanding at the end of the period (including the Class B LP units
at outstanding at the end of the period).
8
8
(1) This is a non-IFRS financial measure, refer to page 45.
(1) This is a non-IFRS financial measure, refer to page 45.
9
8
2022 Annual Report d
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Year Ended December 31, 2022
96
97
98
99
Consolidated Statements of Financial Position
Consolidated Statements of Comprehensive Income
Consolidated Statements of Changes in Unitholders’ Equity
Consolidated Statements of Cash Flows
100
Notes to Consolidated Financial Statements
1
9
0
9
2022 Annual Report
Management’s Responsibility for Financial Reporting
The accompanying consolidated financial statements of BTB Real Estate Investment Trust (“BTB”) were prepared
by management, which is responsible for the integrity and fairness of the information presented, including the many
amounts that must of necessity be based on estimates and judgments. These consolidated financial statements were
prepared in accordance with International Financial Reporting Standards (“IFRS”).
Financial information appearing throughout our MD&A is consistent with these consolidated financial statements.
In discharging our responsibility for the integrity and fairness of the consolidated financial statements and for the
accounting systems from which they are derived, we maintain the necessary system of internal controls designed
to ensure that transactions are authorized, assets are safeguarded, and proper records are maintained.
As at December 31, 2022, the President and Chief Executive Officer and the Vice President and Chief Financial Officer
of BTB had an evaluation carried out, under their direct supervision, of the effectiveness of the controls and procedures
used for the preparation of filings, as defined in Multilateral Instrument 52-109 of the Canadian Securities Administrators.
Based on that evaluation, they concluded that the disclosure controls and procedures were effective.
The Board of Trustees oversees management’s responsibility for financial reporting through an Audit Committee, which
is composed entirely of Trustees who are not members of BTB’s management or personnel. This Committee reviews
our consolidated financial statements and recommends them to the Board for approval. Other key responsibilities of the
Audit Committee include reviewing our existing internal control procedures and planned revisions to those procedures
and advising the trustees on auditing matters and financial reporting issues.
KPMG LLP, independent auditors appointed by the unitholders of BTB upon the recommendation of the Board, have
performed an independent audit of the Consolidated Financial Statements as at December 31, 2022 and 2021 and their
report follows. The auditors have full and unrestricted access to the Audit Committee to discuss their audit and related
findings.
Michel Léonard
President and Chief Executive Officer
Mathieu Bolté
Vice President and Chief Financial Officer
Montreal, February 24, 2023
2
9
KPMG LLP
600 de Maisonneuve Blvd. West
Suite 1500, Tour KPMG
Montréal (Québec) H3A 0A3
Canada
Telephone
Fax
Internet
(514) 840-2100
(514) 840-2187
www.kpmg.ca
INDEPENDENT AUDITOR’S REPORT
To the Unitholders of BTB Real Estate Investment Trust
Opinion
We have audited the consolidated financial statements of BTB Real Estate Investment Trust
(the "Entity"), which comprise:
•
•
•
•
the consolidated statements of financial position as at December 31, 2022 and 2021
the consolidated statements of comprehensive income for the years then ended
the consolidated statements of changes in unitholders’ equity for the years then ended
the consolidated statements of cash flows for the years then ended
• and notes to the consolidated financial statements, including a summary of significant accounting
policies
(Hereinafter referred to as the "financial statements").
In our opinion, the accompanying financial statements present fairly, in all material respects, the
consolidated financial position of the Entity as at December 31, 2022 and 2021, and its consolidated
financial performance and its consolidated cash flows for the years then ended in accordance with
International Financial Reporting Standards ("IFRS").
Basis for Opinion
We conducted our audit in accordance with Canadian generally accepted auditing standards. Our
responsibilities under those standards are further described in the "Auditor’s Responsibilities for
the Audit of the Financial Statements" section of our auditor’s report.
We are independent of the Entity in accordance with the ethical requirements that are relevant to our
audit of the financial statements in Canada and we have fulfilled our other ethical responsibilities in
accordance with these requirements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
for our opinion.
Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most significance in
our audit of the financial statements for the year ended December 31, 2022. These matters were
addressed in the context of our audit of the financial statements as a whole, and in forming our
opinion thereon, and we do not provide a separate opinion on these matters.
We have determined the matter described below to be the key audit matters to be communicated in
our auditor’s report.
KPMG LLP, an Ontario limited liability partnership and member firm of the KPMG global organization of independent
member firms affiliated with KPMG International Limited, a private English company limited by guarantee. KPMG
Canada provides services to KPMG LLP.
Page 2
Evaluation of the fair value of investment properties
Description of the matter
We draw attention to Note 2(e)(ii) and Note 4 to the financial statements. Investment properties are
stated at fair value at each reporting date. The Entity has recorded investment properties at fair value
for an amount of $1,164,881 thousand.
Fair value is determined by management using internally generated valuation models and by
independent expert appraisers using recognized valuation techniques. The determination of the fair
value of investment properties requires the use of estimates such as future cash flows from assets.
The significant inputs used to determine the fair value of investment properties are capitalization rate,
terminal capitalization rate and discount rate.
Why the matter is a key audit matter
We identified the evaluation of the fair value of investment properties as a key audit matter. This
matter represented an area of significant risk of material misstatement given the magnitude of
investment properties and the high degree of estimation uncertainty in determining the fair value of
investment properties. In addition, significant auditor judgment and specialized skills and knowledge
were required in performing, and evaluating the results of our audit procedures due to the sensitivity
to the Entity’s determination fair value of investment properties to minor changes to significant inputs.
How the matter was addressed in the audit
The primary procedures we performed to address this key audit matter included the following:
We evaluated the design and tested the operating effectiveness of certain controls over the Entity’s
process for determining the fair values of investment properties, including controls related to the
development of the estimates of future cash flows from assets and significant inputs.
For a selection of investment properties, we compared the estimate of future cash flows from assets
to the actual historical cash flows. We assessed the adjustments, or lack of adjustments, made in
arriving at the estimate of future cash flows from assets by taking into account changes in conditions
and events affecting the investment properties and the Entity.
For a selection of investment properties, we involved valuations professionals with specialized skills
and knowledge, who assisted in evaluating the capitalization rates, terminal capitalization rates and
discount rates. These rates were evaluated by comparing them to published reports of real estate
industry commentators and considering the features of the specific investment property.
We evaluated the competence, capabilities and objectivity of the independent expert appraisers by:
•
Inspecting evidence that the appraisers are in good standing with the Appraisal Institute;
• Considering whether the appraisers have appropriate knowledge in relation to the specific type of
investment properties; and
• Reading the reports of the external independent appraisers which refers to their independence.
3
9
2022 Annual Report
Page 2
Evaluation of the fair value of investment properties
Description of the matter
We draw attention to Note 2(e)(ii) and Note 4 to the financial statements. Investment properties are
stated at fair value at each reporting date. The Entity has recorded investment properties at fair value
for an amount of $1,164,881 thousand.
Fair value is determined by management using internally generated valuation models and by
independent expert appraisers using recognized valuation techniques. The determination of the fair
value of investment properties requires the use of estimates such as future cash flows from assets.
The significant inputs used to determine the fair value of investment properties are capitalization rate,
terminal capitalization rate and discount rate.
Why the matter is a key audit matter
We identified the evaluation of the fair value of investment properties as a key audit matter. This
matter represented an area of significant risk of material misstatement given the magnitude of
investment properties and the high degree of estimation uncertainty in determining the fair value of
investment properties. In addition, significant auditor judgment and specialized skills and knowledge
were required in performing, and evaluating the results of our audit procedures due to the sensitivity
to the Entity’s determination fair value of investment properties to minor changes to significant inputs.
How the matter was addressed in the audit
The primary procedures we performed to address this key audit matter included the following:
We evaluated the design and tested the operating effectiveness of certain controls over the Entity’s
process for determining the fair values of investment properties, including controls related to the
development of the estimates of future cash flows from assets and significant inputs.
For a selection of investment properties, we compared the estimate of future cash flows from assets
to the actual historical cash flows. We assessed the adjustments, or lack of adjustments, made in
arriving at the estimate of future cash flows from assets by taking into account changes in conditions
and events affecting the investment properties and the Entity.
For a selection of investment properties, we involved valuations professionals with specialized skills
and knowledge, who assisted in evaluating the capitalization rates, terminal capitalization rates and
discount rates. These rates were evaluated by comparing them to published reports of real estate
industry commentators and considering the features of the specific investment property.
We evaluated the competence, capabilities and objectivity of the independent expert appraisers by:
•
Inspecting evidence that the appraisers are in good standing with the Appraisal Institute;
• Considering whether the appraisers have appropriate knowledge in relation to the specific type of
investment properties; and
• Reading the reports of the external independent appraisers which refers to their independence.
Page 3
Other Information
Management is responsible for the other information. Other information comprises:
•
•
the information, other than the financial statements and the auditor’s report thereon, included in
Management’s Discussion and Analysis filed with the relevant Canadian Securities Commissions.
the information, other than the financial statements and the auditor’s report thereon, included in a
document likely to be entitled "Annual Report".
Our opinion on the financial statements does not cover the other information and we do not and will
not express any form of assurance conclusion thereon.
In connection with our audit of the financial statements, our responsibility is to read the other
information identified above and, in doing so, consider whether the other information is materially
inconsistent with the financial statements or our knowledge obtained in the audit and remain alert for
indications that the other information appears to be materially misstated.
We obtained the information included in Management’s Discussion and Analysis filed with the
relevant Canadian Securities Commissions as at the date of this auditor’s report. If, based on the
work we have performed on this other information, we conclude that there is a material misstatement
of this other information, we are required to report that fact in the auditor’s report.
We have nothing to report in this regard.
The information, other than the financial statements and the auditor’s report thereon, included in a
document likely to be entitled "Annual Report" is expected to be made available to us after the date of
this auditor’s report. If, based on the work we will perform on this other information, we conclude that
there is a material misstatement of this other information, we are required to report that fact to those
charged with governance.
Responsibilities of Management and Those Charged with Governance for the
Financial Statements
Management is responsible for the preparation and fair presentation of the financial statements in
accordance with IFRS, and for such internal control as management determines is necessary to
enable the preparation of financial statements that are free from material misstatement, whether due
to fraud or error.
In preparing the financial statements, management is responsible for assessing the Entity’s ability to
continue as a going concern, disclosing as applicable, matters related to going concern and using the
going concern basis of accounting unless management either intends to liquidate the Entity or to
cease operations, or has no realistic alternative but to do so.
Those charged with governance are responsible for overseeing the Entity’s financial reporting
process.
Page 4
Auditor’s Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole
are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report
that includes our opinion.
Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in
accordance with Canadian generally accepted auditing standards will always detect a material
misstatement when it exists.
Misstatements can arise from fraud or error and are considered material if, individually or in the
aggregate, they could reasonably be expected to influence the economic decisions of users taken on
the basis of the financial statements.
As part of an audit in accordance with Canadian generally accepted auditing standards, we exercise
professional judgment and maintain professional skepticism throughout the audit.
We also:
•
Identify and assess the risks of material misstatement of the financial statements, whether due to
fraud or error, design and perform audit procedures responsive to those risks, and obtain audit
evidence that is sufficient and appropriate to provide a basis for our opinion.
The risk of not detecting a material misstatement resulting from fraud is higher than for one
resulting
intentional omissions,
misrepresentations, or the override of internal control.
involve collusion,
from error, as
fraud may
forgery,
• Obtain an understanding of internal control relevant to the audit in order to design audit
procedures that are appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Entity's internal control.
• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by management.
• Conclude on the appropriateness of management's use of the going concern basis of accounting
and, based on the audit evidence obtained, whether a material uncertainty exists related to
Page 5
events or conditions that may cast significant doubt on the Entity's ability to continue as a going
concern. If we conclude that a material uncertainty exists, we are required to draw attention in our
• Communicate with those charged with governance regarding, among other matters, the planned
auditor’s report to the related disclosures in the financial statements or, if such disclosures are
scope and timing of the audit and significant audit findings, including any significant deficiencies
inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up
in internal control that we identify during our audit.
to the date of our auditor’s report. However, future events or conditions may cause the Entity to
cease to continue as a going concern.
• Provide those charged with governance with a statement that we have complied with relevant
• Evaluate the overall presentation, structure and content of the financial statements, including the
ethical requirements regarding independence, and communicate with them all relationships and
other matters that may reasonably be thought to bear on our independence, and where
disclosures, and whether the financial statements represent the underlying transactions and
events in a manner that achieves fair presentation.
applicable, related safeguards.
The engagement partner on the audit resulting in this auditor’s report is Philippe Grubert.
Page 5
• Communicate with those charged with governance regarding, among other matters, the planned
scope and timing of the audit and significant audit findings, including any significant deficiencies
in internal control that we identify during our audit.
Montréal, Canada
• Provide those charged with governance with a statement that we have complied with relevant
February 24, 2023
ethical requirements regarding independence, and communicate with them all relationships and
other matters that may reasonably be thought to bear on our independence, and where
applicable, related safeguards.
The engagement partner on the audit resulting in this auditor’s report is Philippe Grubert.
Montréal, Canada
February 24, 2023
4
9
*CPA auditor, public accountancy permit No. A120220
5
9
*CPA auditor, public accountancy permit No. A120220
2022 Annual Report
Consolidated Statements of Financial Position
Consolidated Statements of Comprehensive Income
As at December 31, 2022 and 2021 (in thousands of CAD dollars)
For the years ended December 31, 2022 and 2021 (in thousands of CAD dollars)
Notes
2022
$
2021
$
4
10
5
6
7
8
22
9
11
10
1,164,881
1,110,971
322
3,754
3,163
-
4,816
2,404
446
-
2,747
3,018
5,528
7,191
1,179,340
1,129,901
636,111
41,942
9,897
4,203
1,268
1,542
116
20,058
2,131
717,268
462,072
1,179,340
605,210
42,819
35,468
4,219
1,417
1,513
11,246
21,731
1,853
725,476
404,425
1,129,901
Assets
Investment properties
Property and equipment
Derivative financial instruments
Prepaid expenses and deposits
Balance of sale
Receivables
Cash and cash equivalents
Total assets
Liabilities and unitholders’ equity
Mortgage loans payable
Convertible debentures
Bank loans
Lease liabilities
Class B LP Units
Unit-based compensation
Derivative financial instruments
Trade and other payables
Distribution payable to unitholders
Total liabilities
Unitholders’ equity
See accompanying notes to consolidated financial statements.
Approved by the Board on February 24, 2023.
Michel Léonard, Trustee
Jocelyn Proteau, Trustee
Operating revenues
Rental revenue
Operating expenses
Public utilities and other operating expenses
Property taxes and insurance
Net operating income
Financial income
Expenses
Financial expenses
Distribution - Class B LP Units
Fair value adjustment – Class B LP Units
Net adjustment to fair value of derivative financial instruments
Net financial expenses
Administration expenses
Net change in fair value of investment properties and disposition expenses
Net income and comprehensive
income for the year
See accompanying notes to consolidated financial statements.
Notes
2022
$
2021
$
13
119,495
100,343
22,820
26,245
49,065
70,430
21,421
22,586
44,007
56,336
624
739
30,427
24,542
104
(149)
(14,216)
16,166
108
231
3,246
28,127
7,437
9,297
6,842
(19,462)
38,154
41,568
9
9
14
4
6
9
7
9
2022 Annual Report
Consolidated Statements of Changes in Unitholders’ Equity
Consolidated Statements of Cash Flows
For the years ended December 31, 2022 and 2021 (in thousands of CAD dollars)
For the years ended December 31, 2022 and 2021 (in thousands of CAD dollars)
Notes
Unitholders’
contributions
Cumulative
distribution
Cumulative
comprehensive
income
Total
Balance as at January 1, 2022
Issuance of units, net of issuance expenses
Distribution to unitholders
Comprehensive income
Balance as at December 31, 2022
Balance as at January 1, 2021
Issuance of units, net of issuance expenses
Distribution to unitholders
Comprehensive income
Balance as at December 31, 2021
See accompanying notes to consolidated financial statements.
12
12
12
12
351,540
(177,308)
230,193
404,425
44,420
-
-
(24,927)
-
-
44,420
(24,927)
Operating activities
Net income for the year
Adjustment for:
395,960
(202,235)
230,193
423,918
Net change in fair value of investment properties and disposition expenses
-
-
38,154
38,154
Depreciation of property and equipment
395,960
(202,235)
268,347
462,072
309,394
(155,952)
188,625
342,067
42,146
-
-
(21,356)
-
-
42,146
(21,356)
351,540
(177,308)
188,625
362,857
-
-
41,568
41,568
Unit-based compensation
Straight-line lease adjustment
Lease incentive amortization
Financial income
Net financial expenses
Adjustment for changes in other working capital items
351,540
(177,308)
230,193
404,425
Net cash from (used in) operating activities
Investing activities
Acquisitions of investment properties net of mortgage loans assumed
Additions to investment properties
Net proceeds from dispositions of investment properties
Acquisition of property and equipment
Net cash (used in) from investing activities
Financing activities
Mortgage loans, net of financing expenses
Repayment of mortgage loans
Bank loans
Repayment of bank loans
Lease liability payments
Net proceeds from unit issue
Net distribution to unitholders
Net distribution – Class B LP units
Interest paid
Net cash (used in) from financing activities
Net change in cash and cash equivalents
Cash and cash equivalents, beginning of year
Cash and cash equivalents, end of year
See accompanying notes to consolidated financial statements.
Notes
2022
$
2021
$
4
11
13
13
14
4
4
4
9
38,154
41,568
9,297
(19,462)
122
541
(1,822)
3,113
(624)
16,166
64,947
1,293
66,240
87
1,065
(1,334)
3,292
(739)
28,127
52,604
3,934
56,538
(86,681)
(66,220)
(9,816)
30,787
2
(7,020)
1,709
(199)
(65,708)
(71,730)
77,760
(46,229)
12,667
(38,335)
(16)
38,436
(21,573)
(104)
93,654
(90,457)
35,468
(15,300)
(13)
30,003
(18,171)
(108)
(27,925)
(21,755)
(5,319)
(4,787)
7,191
2,404
13,321
(1,871)
9,062
7,191
8
9
9
9
2022 Annual Report Notes to Consolidated Financial Statements
For the years ended December 31, 2022 and 2021
(in thousands of CAD dollars, except unit and per unit amounts)
1. Reporting Entity
BTB Real Estate Investment Trust (“BTB”) is an unincorporated open-ended real estate investment trust formed and
governed under the Civil code of Quebec pursuant to a trust agreement and is domiciled in Canada. The address of BTB’s
registered office is 1411 Crescent Street, Suite 300, Montreal, Quebec, Canada. The consolidated financial statements of
BTB for the years ended December 31, 2022 and 2021 comprise BTB and its wholly-owned subsidiaries (together referred
to as the “Trust”) and the Trust’s interest in joint operations.
2. Basis of Preparation
(a) Statement of compliance
The consolidated financial statements have been prepared in accordance with International Financial Reporting Standard
(“IFRS”) as issued by the International Accounting Standards Board (“IASB”).
These consolidated financial statements were approved by the Board of Trustees on February 24, 2023.
(b) Basis of presentation and measurement
The consolidated financial statements have been prepared on the historical cost basis except for the following material
items in the statement of financial position which are measured at fair value:
•
Investment properties (including right-of-use assets);
• Derivative financial instruments;
• Unit-based compensation;
• Class B LP Units.
The Trust presents its consolidated statements of financial position based on the liquidity method, whereby all assets
and liabilities are presented in increasing order of liquidity.
(c) Risks and uncertainties related to the increase of the Bank of Canada policy interest rate
The increase of the Bank of Canada policy interest rate has created a heightened level of uncertainty on the economy.
The rise of the policy rate has not had a significant impact on the Trust’s operations and ability to negotiate new or renew
mortgages. Given the situation, there could be certain repercussions on the mortgage refinancing activities, the fair
value of the investment properties, certain investment decisions and the level of transactions in the market. The Trust will
continue to monitor the effects of the rise of the policy rate on its investment activities and valuation of the investment
properties.
(d) Functional and presentation currency
These consolidated financial statements are presented in Canadian dollars, which is BTB’s functional currency.
All financial information has been rounded to the nearest thousand, except per unit amounts.
(e) Use of estimates and judgments
The preparation of consolidated financial statements in conformity with IFRS requires management to make judgments,
estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the consolidated
financial statements and reported amounts of revenues and expenses during the reporting period. Estimates and
assumptions are continuously evaluated and are based on management’s experience and other factors, including
expectations of future events that are believed to be reasonable under the circumstances. Revisions to accounting
estimates are recognized in the period in which the estimates are revised and in any future periods affected. Actual
results may differ from these estimates, and the differences may be material.
0
0
1
i) Critical judgements in applying accounting policies
The following are critical judgements that management has made in the process of applying accounting policies
and that have the most significant effect on the amounts recognized in the consolidated financial statements:
Operating lease contracts – Trust as lessor
The Trust enters into commercial property leases on its investment properties. The Trust has determined, based
on an evaluation of the terms and conditions of the arrangements, that it retains all the significant risks and rewards
of ownership of these properties and therefore accounts for the leases as operating leases.
ii) Significant sources of estimation uncertainty
The following are significant assumptions concerning the future and other key sources of estimation uncertainty
that have a significant risk of resulting in a material adjustment to the carrying amount of assets and liabilities within
the next financial year:
Valuation of investment properties
Investment properties are stated at fair value at each reporting date. Gains or losses arising from changes in the
fair values are included in profit or loss in the period in which they arise. Fair value is determined by management
using internally generated valuation models and by independent external appraisers using recognized valuation
techniques. These models and techniques comprise the Discounted Cash Flow Method and the Direct Capitalization
method and, in some cases, the Comparable method.
The determination of the fair value of investment properties requires the use of estimates such as future cash flows
from assets (including lease income and costs, future revenue streams, capital expenditures of fixtures and fittings,
any environmental matters and the overall repair and condition of the property or stabilized net operating income)
and discount, capitalization and terminal capitalization rates applicable to those cash flows. These estimates
are based on local market conditions existing at the reporting date. The carrying value for the Trust’s investment
properties reflects its best estimate for the highest and best use as at December 31, 2022 (see Note 4).
The significant methods and assumptions used by management and the independent external appraisers
in estimating the fair value of investment properties are set out below:
Techniques used for valuing investment properties
The Discounted Cash Flow method involves the projection of a series of periodic cash flows either to an
operating investment property or a development investment property. To this projected cash flow series,
an appropriate, market-derived discount rate is applied to establish an indication of the present value of the
income stream associated with the investment property. The calculated periodic cash flow is typically estimated
as gross income less vacancy and collection losses and less operating expenses/outgoings. A series of periodic
net operating income along with an estimate of the reversion/terminal/exit value anticipated at the end of the
projection period, are discounted to present value. The aggregate of the net present values equals the estimated
fair value of the investment property.
The Direct Capitalization method converts anticipated future cash flow benefits in the form of rental income
into present value. This approach requires estimation of normalized annual future cash inflows and application
of investor yield or return requirements in the form of capitalization rates.
The Comparable method involves the comparison of the Trust’s investment properties to similar investment
properties that have transacted within a recent time frame from which a fair value is estimated based on the
price per square foot of these comparable sales.
Derivative financial instruments
Derivative financial instruments, including embedded derivatives, are recognized on the consolidated statement of
financial position at fair value. Subsequent to initial recognition, these derivatives are measured at fair value. The fair
value of derivative instruments is based on forward rates considering the market price, rate of interest and volatility
and takes into account the credit risk of the financial instrument. Changes in estimated fair value at each reporting
date are included in profit and loss. Embedded derivatives are separated from the host contract and accounted for
separately if the economic characteristics and risks of the host contract and the embedded derivative are not closely
related and if the entire contract is not measured at fair value with changes in fair value recognized in profit and loss.
1
0
1
2022 Annual Report 3. Significant Accounting Policies
The accounting policies set out below have been applied consistently to all periods presented in these consolidated
financial statements.
(a) Basis of consolidation
(i) Subsidiaries
Subsidiaries are entities controlled by the Trust. Control exists when the Trust has the existing rights that give it the
current ability to direct the activities that significantly affect the entities’ returns. Subsidiaries are consolidated from
the date that control commences until the date that control ceases.
(ii) Joint operations
A joint operation is a joint arrangement whereby the parties that have joint control of the arrangement have rights
to the assets, and obligations for the liabilities, relating to the arrangement. Those parties are called joint operators.
The consolidated financial statements include the Trust’s proportionate share of the joint operations’ assets,
liabilities, revenue and expenses with items of a similar nature on a line-by-line basis, from the date that joint control
commences until the date that joint control ceases.
(b) Financial instruments
(i) Recognition and initial measurement
Financial assets and liabilities are recognized when the Trust becomes party to the contractual provisions of
the financial instrument. Financial assets and financial liabilities are initially recognized at fair value, and their
subsequent measurement is dependent on their classification as described below. If a financial asset or liability is
not subsequently measured at fair value through profit or loss (FVTPL), the initial measurement includes transaction
costs that are directly attributable to its acquisition or issue.
Financial assets and liabilities are offset, and the net amount is reported in the statement of financial position when
there is a legally enforceable right to offset the recognized amounts and there is an intention to settle on a net basis
or realize the asset and settle the liability simultaneously.
(ii) Classification and subsequent measurement
The Trust classifies its financial assets and financial liabilities in the following measurement categories:
•
•
those to be measured subsequently at FVTPL; and
those to be measured at amortized cost.
The classification of financial assets depends on the business model for managing the financial assets and
the contractual terms of the cash flows, and on the Trust’s designation of such instruments. Financial liabilities
are classified as those to be measured at amortized cost unless they are designated as those to be measured
subsequently at FVTPL.
Financial instruments are not reclassified subsequent to their initial recognition, unless the Trust identifies changes
in its business model in managing financial assets and would reassess the classification of financial instruments.
The Trust’s business model objective is to collect contractual cash flows and the contractual cash flows are
solely payments of principal and/or interest, and as such financial assets are generally subsequently measured
at amortized cost using the effective interest method net of any impairment loss. All other financial assets, including
derivatives, are subsequently measured at FVTPL.
Financial assets measured at amortized cost comprise cash and cash equivalents, restricted cash, receivables
and deposits.
Cash and cash equivalents
Cash and cash equivalents comprise cash balances and term deposits with original maturities of three months
or less.
2
0
1
The Trust derecognizes a financial asset when the contractual rights to the cash flows from the asset expire, or it
transfers the rights to receive the contractual cash flows on the financial asset in a transaction in which substantially
all the risks and rewards of ownership of the financial asset are transferred.
Financial liabilities are generally subsequently measured at amortized cost using the effective interest method unless
they are held for trading, they are derivatives, or they have been designated as those to be measured subsequently at
FVTPL.
Financial liabilities measured at amortized cost comprise mortgage loans payable, convertible debentures, bank
loans, trade and other payables and distributions payable to unitholders.
The Trust derecognizes a financial liability when its contractual obligations are discharged or cancelled or expire.
Derivative financial instruments are subsequently measured at fair value, and changes therein are recognized
immediately in profit or loss.
Financial assets with embedded derivatives are considered in their entirety when determining whether their cash
flows are solely payments of principal and interest. Embedded derivatives in financial liabilities are treated as
separate derivatives when their risks and characteristics are not closely related to those of the host contract,
a separate instrument with the same terms as the embedded derivative meets the definition of a derivative, and
the combined instrument is not measured at fair value through profit or loss. Changes in the fair value of separable
embedded derivatives are recognized immediately in profit or loss.
The following table summarizes the classification under IFRS 9 Financial Instruments (‘’IFRS 9’’):
Asset/Liability
Cash and cash equivalents
Receivables
Mortgage loans payable
Convertible debentures
Bank loans
Trade and other payables
Distribution payable to unitholders
Derivative financial instruments
Class B LP Units
(iii) Impairment
Classification under IFRS 9
Amortized cost
Amortized cost
Amortized cost
Amortized cost
Amortized cost
Amortized cost
Amortized cost
Fair value through profit and loss
Fair value through profit and loss
The Trust uses the expected credit loss (ECL) model for calculating impairment and recognizes expected credit
losses as a loss allowance in the consolidated statement of financial position if they relate to a financial asset
measured at amortized cost. For trade receivables, the Trust applies the simplified approach as permitted by IFRS
9 which requires lifetime expected credit losses be recognized from initial recognition of receivables. The carrying
amount of these assets in the consolidated statement of financial position is stated net of any loss allowance.
Impairment losses are recorded in the Trust administration expenses in the consolidated statement of comprehensive
income with the carrying amount of the financial asset or group of financial assets reduced through the use of
impairment allowance accounts. In periods subsequent to the impairment where the impairment loss has decreased,
and such decrease can be related objectively to conditions and changes in factors occurring after the impairment
was initially recognized, the previously recognized impairment loss would be reversed through the consolidated
statement of comprehensive income. The impairment reversal would be limited to the lesser of the decrease in
impairment or the extent that the carrying amount of the financial asset at the date the impairment is reversed does
not exceed what the amortized cost would have been had the impairment not been recognized, after the reversal.
(iv) Trust units
Trust units are redeemable at the option of the holder and, therefore, are considered puttable instruments. Puttable
instruments are required to be accounted for as financial liabilities, except where certain conditions are met in
accordance with lAS 32 Financial Instruments: Presentation (“IAS 32”), in which case, the puttable instruments may
be presented as equity.
BTB’s trust units meet the conditions of lAS 32 and are therefore presented as equity.
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2022 Annual Report (v) Convertible debentures
(iii) Impairment
The convertible debentures, which are considered financial liabilities, are convertible into Trust units. Since
BTB’s trust units meet the definition of a financial liability, the conversion and redemption options are considered
embedded derivatives. As the conversion and redemption options are not considered closely related to the debt
contract host, the non-derivative and derivative components of the convertible debentures are separated upon initial
recognition using the residual fair value approach. Subsequently, the non-derivative liability component is measured
at amortized cost.
(vi) Class B LP Units
The Class B LP Units issued by one of the limited partnerships that the Trust controls, are classified as “financial
liabilities”, as they are exchangeable into Trust units on a one-for-one basis at any time at the option of the holder.
The Class B LP Units are measured at fair value and presented as part of the liabilities in the statement of financial
position, with changes in fair value recorded in the statement of comprehensive income. The fair value of the Class B
LP Units is determined with reference to the market price of the Trust units on the date of measurement. Distributions
on the Class B LP Units are recognized in the statement of comprehensive income when declared.
(c) Investment properties
Investment properties are held either to earn rental income or for capital appreciation or for both, but not for sale
in the ordinary course of business, use in the production or supply of goods or services or for administrative purposes.
Investment properties are measured at cost on initial recognition and subsequently at fair value with any change therein
recognized in profit or loss. The Trust capitalizes the costs incurred to increase capacity, replace certain components
and make improvements after the acquisition date. The Trust also capitalizes major maintenance and repair expenses
providing benefits that will last far beyond the end of the reporting period. Investment properties includes income
properties, properties under development and land held for future development if necessary.
Cost includes expenditures that are directly attributable to the acquisition of the investment properties.
The Trust makes payments to agents for services in connection with negotiating lease contracts with the Trust’s lessees.
These leasing fees are capitalized within the carrying amount of the related investment properties and then considered
in the fair value adjustment of the investment properties at the next reporting period.
Should the use of an investment property change and be reclassified as property and equipment, its fair value at the date
of reclassification would become its cost for subsequent accounting.
(d) Property and equipment
(i) Recognition and measurement
Property and equipment is measured at cost less accumulated depreciation and accumulated impairment losses.
When parts of an item of property and equipment have different useful lives, they are accounted for as separate items
(major components).
Gains and losses on disposal of an item of property and equipment are determined by comparing the proceeds from
disposal with the carrying amount of property and equipment, and are recognized within profit or loss on a net basis.
(ii) Depreciation
Depreciation is calculated over the depreciable amount, which is the cost of an asset, less its residual value.
Depreciation is recognized in profit or loss on a straight-line basis over the estimated useful lives of each part of an
item of property and equipment, since this most closely reflects the expected pattern of consumption of the future
economic benefits embodied in the asset.
The estimated useful lives for the current and comparative periods are as follows:
Equipment, furniture and fixtures
3 - 10 years
Rolling stock
3 - 5 years
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Depreciation methods, useful lives and residual values are reviewed at each annual reporting date and adjusted when
appropriate.
The carrying amount of the Trust’s property and equipment is reviewed at each reporting date to determine whether
there is any indication of impairment. If any such indication exists, then the asset’s recoverable amount is estimated.
The recoverable amount of an asset is the greater of its value in use and its fair value less costs to sell. An impairment
loss is recognized if the carrying amount of an asset exceeds its estimated recoverable amount. Impairment losses
are recognized in profit or loss.
(e) Leases
At contract inception, the Trust assesses whether a contract is or contains a lease based on the definition of a lease.
Under IFRS 16 Leases (‘’IFRS 16’’), a contract is, or contains, a lease if the contract conveys a right to control the use
of an identified asset for a period of time in exchange for consideration.
At inception or on reassessment of a contract that contains a lease component, the Trust allocates the consideration
in the contract to each lease and non-lease component on the basis of their relative stand-alone prices.
(i) As a lessor
The Trust leases out its investment properties, including right-of-use assets. The Trust has classified these leases
as operating leases. The Trust has applied IFRS 15 Revenue from Contracts with Customers to allocate consideration
in the contract to each lease and non-lease component.
(ii) As a lessee
The Trust recognizes a right-of-use asset and a lease liability at the lease commencement date. Right-of-use assets
that meet the definition of investment property are presented within investment properties. These right-of-use assets
are initially measured at cost, and subsequently measured at fair value, in accordance with the Trust’s accounting
policies.
However, the Trust has elected not to recognize right-of-use assets and lease liabilities for some leases of low-value
assets (e.g., equipment). The Trust recognizes the lease payments associated with these leases as an expense on
a straight-line basis over the lease term.
The lease liability is initially measured at the present value of the lease payments that are not paid at the
commencement date, discounted using the interest rate implicit in the lease or, if that rate cannot be readily
determined, the Trust’s incremental borrowing rate for similar assets. Generally, the Trust uses its incremental
borrowing rate as the discount rate.
The lease liability is subsequently increased by the interest cost on the lease liability and decreased by lease
payments made. It is remeasured when there is a change in future lease payments arising from a change in an
index or rate, a change in the estimate of the amount expected to be payable under a residual value guarantee,
or as appropriate, changes in the assessment of whether a purchase or extension option is reasonably certain to
be exercised or a termination option is reasonably certain not to be exercised.
(f) Provisions
Provisions are recognized when the Trust has a present obligation (legal or constructive) as a result of a past event,
it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation,
and a reliable estimate can be made of the amount of the obligation. Where the Trust expects some or all of a provision
to be reimbursed, the reimbursement is recognized as a separate asset. The expense relating to any provision is presented
in profit or loss, net of any reimbursement. If the effect of the time value of money is material, provisions are discounted
using a current rate that reflects the risks specific to the liability. Where discounting is used, the increase in the provision
due to the passage of time is recognized as a finance cost.
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2022 Annual Report
(g) Revenue recognition
(i) Rental revenue – lease components
Rental revenue for lease components is recognized when the service has been rendered and the amount of expected
consideration can be reliably estimated, which is over the term of the related lease.
In most cases, revenue recognition under a lease begins when the tenant takes possession of, or controls, the
physical use of the leased property. Generally, this occurs on the lease commencement date, or when the Trust is
required to make additions to the leased property in the form of tenant improvements, upon substantial completion
of the additions. Certain leases provide for tenant occupancy during periods for which no rent is due (“free rent
period”) or where minimum rent payments change during the term of the lease. Accordingly, rental revenue is
recognized in profit or loss on a straight-line basis over the term of the lease unless another systematic basis is more
representative of the time pattern in which user’s benefit derived from the leased asset is diminished. Any deferred
amounts related to straight-line lease adjustments are recognized within investment properties. Lease incentives
which are mostly leasehold improvements and payments of monetary allowances to tenants, are amortized over the
lease term as a reduction of rental revenue and are recognized as adjustments to the carrying amount of investment
properties. The lease term is the non-cancellable period of the lease together with any further extension for which the
tenant has the option to continue the lease, where, at the inception of the lease, the Trust is reasonably certain that
the tenant will exercise that option.
Cancellation fees or premiums received to terminate leases are recognized in profit and loss at the effective date
of the lease termination and when the Trust no longer has any performance obligations under the related lease.
(ii) Rental revenue – non-lease components
Leases generally provide for the tenants’ payment of maintenance expenses of common elements and other
operating costs. These services are considered to be a single performance obligation rendered to tenants over
time. These recoveries are accounted for as variable consideration and are recognized as operating revenues
in the periods in which the services are provided.
(h) Earnings per unit
The Trust presents basic earnings per unit data for its Trust units. Basic earnings per unit are calculated by dividing the
profit or loss attributable to unit holders of the Trust by the weighted average number of Trust units outstanding during
the period.
(i) Financial income and financial expenses
Financial income comprises interest income on funds invested and balance of sale. Interest income is recognized
as it accrues in profit or loss, using the effective interest method.
Financial expenses comprise interest on mortgage loans payable, convertible debentures, bank loans, lease liabilities
and other payables, as well as accretion of the non-derivative liability component of convertible debentures, and
accretion of effective interest on mortgage loans payable and convertible debentures.
Net financial expenses comprise financial expenses, distributions to Class B LP unitholders, fair value adjustment
on Class B LP Units and changes in the fair value of derivative financial instruments.
(j) Operating segment
An operating segment is a component of the Trust that engages in business activities from which it may earn revenues
and incur expenses, including revenues and expenses that relate to transactions with any of the Trust’s other
components. All operating segments’ operating results are reviewed regularly by the Trust’s Chief Executive Officer
(‘’CEO’’) to make decisions about resources to be allocated to the segment and assess its performance, and for which
discrete financial information is available. Segment results that are reported to the CEO include items directly attributable
to a segment as well as those that can be allocated on a reasonable basis.
(k) Unit-based compensation
(i) Deferred unit compensation plan for trustees and certain executive officers
Compensation costs related to the deferred unit compensation plan for trustees and certain executive officers are
recognized at the time they are granted. These units are initially measured at fair value based on the trading price
of the Trust units and are revalued at the end of each reporting period, until settlement. Any changes in fair value are
recognized as compensation expense in profit or loss.
(ii) Employee unit purchase plan
Compensation costs related to the employee unit purchase plan are recognized at the time they are granted. These
units are initially measured at fair value based on the trading price of the Trust units and are revalued at settlement
date. Any changes in fair value are recognized as compensation expense in profit or loss.
(iii) Restricted unit compensation plan
Compensation costs related to the restricted unit compensation plan are recognized at the time they are granted.
These units are initially measured at fair value based on the trading price of the Trust units and are revalued at the
end of each reporting period, until settlement. Any changes in fair value are recognized as compensation expense
in profit or loss. The compensation expense is amortized using the graded vesting method.
(iv) Cash settled share-based retirement compensation plan
Compensation costs related to the RA Plan are recognized as the phantom units are granted and subsequently
remeasured at each reporting period date at fair value. The plan is considered cash-settled share-based payments.
The phantom units are recognized as a liability and remeasured at fair value based on the trading price of the Trust
units at each reporting date with the change in profit or loss.
(l) Income taxes
BTB is a mutual fund trust and a Real Estate Investment Trust (‘’REIT’’) pursuant to the Income Tax Act (Canada). Under
current tax legislation, a REIT is entitled to deduct distributions of taxable income such that, it is not liable to pay income
tax provided that its taxable income is fully distributed to unitholders. BTB has reviewed the proscribed conditions under
the Income Tax Act (Canada) and has determined that it qualifies as a REIT for the year. BTB intends to continue to qualify
as a REIT and to make distributions not less than the amount necessary to ensure that BTB will not be liable to pay income
taxes. Accordingly, no current or deferred income taxes have been recorded in the consolidated financial statements.
(m) Fair value measurement
The Trust measures financial instruments, such as derivatives, and non-financial assets, such as investment properties
(including right-of-use assets), at fair value at each reporting date. Fair value is the price that would be received to sell an
asset or pay to transfer a liability in an orderly transaction between market participants at the measurement date under
current market conditions. The fair value measurement is based on the presumption that the transaction to sell the asset
or transfer the liability takes place either:
•
•
In the principal market for the asset or liability, or
In the absence of a principal market, in the most advantageous market for the asset or liability.
The principal or the most advantageous market must be accessible by the Trust. The fair value of an asset or a liability
is measured using the assumptions that market participants would use when pricing the asset or liability assuming that
market participants act in their economic best interests. A fair value measurement of a non-financial asset takes into
account a market participant’s ability to generate economic benefits by using the asset in its highest and best use or by
selling it to another market participant that would use the asset in its highest and best use.
The Trust uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available
to measure fair value, maximizing the use of relevant observable inputs and minimizing the use of unobservable inputs.
All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorized within the
fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair value measurement
as a whole:
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2022 Annual Report •
•
•
Level 1 - Quoted (unadjusted) market prices in active markets for identical assets or liabilities;
Level 2 – Valuation techniques for which the lowest level input that is significant to the fair value measurement
is directly or indirectly observable;
Level 3 - Valuation techniques for which the lowest level input that is significant to the fair value measurement
is unobservable.
For assets and liabilities that are recognized in the financial statements on a recurring basis, the Trust determines
whether transfers have occurred between Levels in the hierarchy by reassessing categorization (based on the lowest level
input that is significant to the fair value measurement as a whole) at the end of each reporting period.
For the purpose of fair value disclosures, the Trust has determined classes of assets and liabilities on the basis of the
nature, characteristics and risks of the asset or liability and the level of the fair value hierarchy as explained above.
4. Investment Properties
For the years ended December 31,
Balance beginning of year
Acquisitions of investment properties (note 4(a))
Dispositions of investment properties (note 4(b))
Capital expenditures
Capitalized leasing fees
Capitalized lease incentives
Lease incentives amortization
Straight-line lease adjustment
Net changes in fair value of investment properties
Balance end of year
2022
$
1,110,971
96,155
(42,674)
3,370
1,531
5,020
(3,113)
1,822
(8,201)
1,164,881
2021
$
903,870
185,864
(4,450)
3,672
936
3,466
(3,292)
1,334
19,571
1,110,971
The fair value of a subset of the Trust’s investment properties comprised of a selection of the most significant investment
properties and approximately 1/3 of the remaining investment properties is determined annually on the basis of valuations
made by independent external appraisers having appropriate professional qualifications, using recognized valuation
techniques, comprising the Discounted Cash Flow, the Direct Capitalization and Comparable methods. The selection of
investment properties subject to independent external valuation is determined by management based on its assessment
of circumstances that in its view, may impact the value of a particular individual investment property. The fair value of the
remaining investment properties is determined by management using internally generated valuations based on the Direct
Capitalization and Discounted Cash Flow methods.
In determining the fair value of investment properties, the Trust has adjusted cash flow assumptions for its estimate
of near-term disruptions to cash flows to reflect collections, vacancy and assumptions on new leasing. The Trust
undertook a process to assess the appropriateness of the rates considering changes to property level cash flows and
any risk premium inherent in such cash flow changes. These considerations are reflected in the fair value adjustments
of investment properties.
At December 31, 2022, independent external appraisals were obtained in 2022 for investment properties with an
aggregate fair value of $821,315 (December 31, 2021 - $672,109).
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The fair value of investment properties is based on Level 3 inputs. There have been no transfers during the year between
levels. The significant inputs used to determine the fair value of the Trust’s investment properties are as follows:
As at December 31, 2022
Capitalization rate
Terminal capitalization rate
Discount rate
Industrial
Off downtown
core office
Necessity-
based retail
4.75% -6.75% 5.75% - 8.25% 5.50% - 8.00%
4.75% - 7.50% 5.75% - 8.00% 5.50% - 8.00%
5.50% - 8.25% 6.25% - 8.75% 6.25% - 8.75%
Weighted average capitalization rate
5.75%
6.76%
6.84%
As at December 31, 2021
Capitalization rate
Terminal capitalization rate
Discount rate
4.50% - 8.50% 5.25% - 8.50% 5.25% - 7.75%
4.75% - 7.00% 5.50% - 7.50% 6.00% - 7.00%
5.75% - 7.50% 5.50% - 8.25% 6.50% - 7.50%
Weighted average capitalization rate
5.72%
6.41%
6.62%
The following table provides a sensitivity analysis of the fair value of investment properties for changes in the weighted
average capitalization rate as at December 31, 2022, which is representative of the sensitivity to changes in the discount
rate and terminal capitalization rate as at December 31, 2022.
Capitalization rate sensitivity
Increase (decrease)
(0.50) %
(0.25) %
Base rate
0.25 %
0.50 %
(a) Acquisitions
Fair Value
$
1,263,849
1,212,292
1,164,881
1,121,004
1,080,390
Change in
fair value
$
98,968
47,412
-
(43,877)
(84,491)
The fair value of the assets and liabilities recognized in the consolidated statement of financial position on the date
of the acquisition during the year ended December 31, 2022, were as follows:
(i) Acquisitions in 2022
Fair value recognized on acquisition
Acquisition date
Property
type
Location
Interest
acquired
January 2022
January 2022
Office
Office
Ottawa, ON
Ottawa, ON
April 2022
Industrial
Ottawa, ON
June 2022
Industrial
Montreal, QC
June 2022
Industrial
Leduc, AB
September 2022
Industrial
Edmonton, AB
Acquisition costs
Total
%
100
100
100
100
100
100
Investment
properties,
including
acquisition
costs
$
34,908
3,192
12,410
15,000
13,150
15,750
-
$
-
-
-
-
(9,474)
-
-
94,410
(9,474)
Mortgage
loan
assumed
Acquisition
costs
Net
consideration
$
-
-
-
-
-
-
1,745
1,745
$
34,908
3,192
12,410
15,000
3,676
15,750
1,745
86,681
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2022 Annual Report ii) Acquisitions in 2021
Fair value recognized on acquisition
Acquisition date
Property
type
Location
Interest
acquired
June 2021
Industrial
Montreal, QC
November 2021
Office
Montreal, QC
November 2021
Office
Montreal, QC
December 2021
Industrial
Leduc, AB
December 2021
Office
Edmonton, AB
December 2021
Industrial
Edmonton, AB
December 2021
Industrial
Edmonton, AB
December 2021
Industrial
Edmonton, AB
December 2021
Industrial
Edmonton, AB
December 2021
Industrial
Saskatoon, SK
December 2021
Industrial
Saskatoon, SK
December 2021
Industrial
Saskatoon, SK
December 2021
Industrial
Saskatoon, SK
%
100
100
100
100
100
100
100
100
100
100
100
100
100
Acquisition costs
Total
(b) Dispositions
(i) Dispositions in 2022
Investment
properties,
including
acquisition
costs
$
15,250
35,818
37,807
6,500
4,500
6,500
8,900
14,100
12,400
4,600
20,700
5,000
10,500
-
Mortgage
loan
assumed
$
(9,913)
(23,400)
(24,700)
(4,225)
(2,925)
(4,225)
(5,785)
(9,150)
(8,066)
(3,182)
(13,441)
(3,246)
(6,818)
-
182,575
(119,076)
Acquisition
costs
Net
consideration
$
-
-
-
-
-
-
-
-
-
-
-
-
-
3,289
3,289
$
5,337
12,418
13,107
2,275
1,575
2,275
3,115
4,950
4,334
1,418
7,259
1,754
3,682
3,289
66,788
Disposal date
Property type
Location
Gross
proceeds
Mortgage
reimbursement
Disposition
expenses Net proceeds
January 2022
Industrial
Cornwall, ON
January 2022
Industrial
Cornwall, ON
January 2022
Industrial
Cornwall, ON
January 2022
Industrial
Cornwall, ON
June 2022
Industrial
Magog, QC
September 2022
December 2022
December 2022
Office
Office
Office
Disposition expenses
Montreal, QC
Montreal, QC
Sainte-Therese, QC
$
8,056
8,275
7,885
1,775
1,798
4,384
5,901
4,600
-
$
(2,590)
(2,959)
-
-
-
(2,745)
(2,497)
-
-
Total
42,674
(10,791)
$
-
-
-
-
-
-
-
-
(1,096)
(1,096)
$
5,466
5,316
7,885
1,775
1,798
1,639
3,404
4,600
(1,096)
30,787
(ii) Dispositions in 2021
Disposal date
Property type
Location
Gross
proceeds
Mortgage
reimbursement
Disposition
expenses
Net proceeds
December 2021
Retail
Montreal, QC
Disposition
expenses
Total
$
4,450
-
4,450
$
(2,632)
-
(2,632)
(c) Net changes in fair value of investment properties and disposition expenses
For the years ended December 31,
Net changes in fair value of investment properties (note 4)
Disposition expenses (note 4 (b))
$
-
(109)
(109)
2022
$
(8,201)
(1,096)
(9,297)
$
1,818
(109)
1,709
2021
$
19,571
(109)
19,462
Net changes in fair value of investment properties includes the net changes in fair value of right-of-use assets related
to the investment properties to which a lease is attached.
The disposition expenses include mainly commissions and debt prepayment penalties on mortgage loans related
to disposed properties.
5. Receivables
As at December 31,
Rents receivable
Allowance for expected credit losses
Net rents receivable
Unbilled recoveries
Other receivables
Total
2022
$
3,431
(1,011)
2,420
1,142
1,254
4,816
2021
$
4,497
(944)
3,553
1,388
587
5,528
Credit risk arises from the possibility that tenants may experience financial difficulty and be unable to fulfill their lease
commitments. The Trust mitigates this risk by varying its tenant mix and staggering lease terms; avoiding dependence on
a single tenant for a significant portion of the Trust’s operating revenues and conducting credit assessments for all major
new tenants. The Trust analyzes its trade receivables on a regular basis and establishes an allowance for expected credit
losses that represents its estimate of lifetime expected credit losses to be incurred in respect of its trade receivables. In
assessing the adequacy of the allowance for expected credit losses on tenant receivables, management has considered
the likelihood of collection of current receivables.
The Trust’s assessment of expected credit losses is inherently subjective due to the forward-looking nature of the
assessments. As a result, the value of the expected credit loss is subject to a degree of uncertainty and is made on
the basis of assumptions.
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2022 Annual Report 6. Mortgage Loans Payable
7. Convertible Debentures
Mortgage loans payable are secured by immovable hypothecs on investment properties having a fair value
of approximately $1,140,753 as at December 31, 2022 (December 31, 2021 – $1,079,554).
As at December 31, 2022, the Trust had two series of subordinated, convertible, redeemable debentures outstanding.
As at December 31,
Fixed rate mortgage loans payable
Floating rate mortgage loans payable
Unamortized fair value assumption adjustments
Unamortized financing expenses
Mortgage loans payable
Short-term portion
Weighted average interest rate
Weighted average term to maturity (years)
Range of annual rates
2022
$
552,275
86,166
564
(2,894)
636,111
86,094
4.09%
3.97
2021
$
507,401
99,637
755
(2,583)
605,210
91,185
3.49%
4.66
2.30% - 8.20%
2.30% - 6.80%
As at December 31, 2022, the mortgage loan scheduled repayments are as follows:
2023
2024
2025
2026
2027
Thereafter
Unamortized fair value assumption adjustments
Unamortized financing expenses
Scheduled
repayments
Principal
maturity
$
18,507
15,961
13,626
11,278
7,472
15,110
$
67,587
103,795
52,853
105,191
108,932
118,129
Total
$
86,094
119,756
66,479
116,469
116,404
133,239
81,954
556,487
638,441
564
(2,894)
636,111
The Trust may enter into floating-for-fixed interest rate swap agreements on floating interest rate mortgages to hedge
the variability in cash flows attributed to fluctuating interest rates. The Trust does not apply hedge accounting to such
cash flow hedging relationships (see Note 10). The following table presents relevant information on interest rate swap
agreements:
Transaction date
Original
principal
amount
Effective
fixed interest
rate
Settlement
basis
Maturity date
Outstanding amount
As at December 31,
2022
As at December 31,
2021
March 2013(1)
June 2016
November 2017
November 2017
Total
$
7,150
13,000
23,200
23,075
66,425
%
4.12
3.45
3.88
3.90
Monthly
April 2023
Quarterly
June 2026
Monthly November 2027
Monthly December 2027
$
4,250
10,649
21,331
20,068
56,298
$
4,850
11,074
22,015
20,718
58,657
(1) The mortgage associated to this swap agreement has been repaid with the revolving credit facility (note 8).
Series G
Series H
Interest rates
Capital
Coupon
Effective
24,000
20,280
%
6.00
7.00
%
7.30
8.28
Unit
conversion
price
$
Interest
payments
Maturity
5.42
Semi-annual
October 2024
3.64
Semi-annual
October 2025
As at December 31, 2022
Non-derivative liability component upon issuance
Accretion of non-derivative liability component
Conversion options exercised by holders
Unamortized financing expenses
Non-derivative liability component
Series G
Series H
$
$
24,000
-
24,000
-
24,000
(557)
23,443
27,309
709
28,018
(8,848)
19,170
(671)
18,499
Total
$
51,309
709
52,018
(8,848)
43,170
(1,228)
41,942
Conversion and redemption options liability (asset) component
at fair value
88
28
116
As at December 31, 2021
Non-derivative liability component upon issuance
Accretion of non-derivative liability component
Conversion options exercised by holders
Unamortized financing expenses
Non-derivative liability component
Conversion and redemption options liability component
at fair value
Series G
Series G
Series H
$
$
Total
$
24,000
27,309
51,309
-
24,000
-
24,000
(807)
23,193
407
27,716
(7,152)
20,564
(938)
19,626
407
51,716
(7,152)
44,564
(1,745)
42,819
44
10,649
10,693
In October 2019, the Trust issued Series G subordinated convertible, redeemable, unsecured debentures bearing 6.00%
interest payable semi-annually and maturing in October 2024, in the amount of $24,000. The debentures are convertible
at the holder’s option at any time before October 2024, at a conversion price of $5.42 per unit (“Series G Conversion
Price”).
These debentures are not redeemable before October 31, 2024, except in the case of a change in control. As of October
31, 2022, but before October 31, 2023, under certain conditions, the debentures will be redeemable by the Trust at a
redemption price equal to their principal amount plus accrued, unpaid interest, provided that the average weighted price
based on the volume of units traded on the Toronto Stock Exchange during a period of 20 consecutive trading days
ending on the fifth trading day prior to the date on which an advanced notice of redemption is given (the “current market
price”) is at least 125% of the conversion price.
2
1
1
3
1
1
2022 Annual Report As of October 31, 2023, but before October 31, 2024, under certain conditions, the debentures will be redeemable by the
Trust, in whole or in part at any time and for a redemption price equal to the principal amount thereof plus accrued and
unpaid interest. The Trust may, under certain conditions, elect to satisfy its obligation to pay the principal amount of the
debentures that are to be redeemed or that have matured by issuing a number of units obtained by dividing the principal
amount of the debentures by 95% of the current market price on the date of redemption or maturity.
As of December 31, 2022, no conversion options have been exercised by holders on debentures.
Series H
In September 2020, the Trust issued Series H subordinated convertible, redeemable, unsecured debentures bearing
7.00% interest payable semi-annually and maturing on October 31, 2025, in the amount of $30,000. The debentures are
convertible at the holder’s option at any time before October 31, 2025, at a conversion price of $3.64 per unit (“Series H
Conversion Price”).
These debentures are not redeemable before October 31, 2023, except in the case of a change in control. As of October
31, 2023, but before October 31, 2024, under certain conditions, the debentures will be redeemable by the Trust at a
redemption price equal to their principal amount plus accrued, unpaid interest, provided that the average weighted price
based on the volume of units traded on the Toronto Stock Exchange during a period of 20 consecutive trading days
ending on the fifth trading day prior to the date on which an advanced notice of redemption is given (the “current market
price”) is at least 125% of the conversion price.
As of October 31, 2024, but before October 31, 2025, under certain conditions, the debentures will be redeemable by the
Trust, in whole or in part at any time and for a redemption price equal to the principal amount thereof plus accrued and
unpaid interest. The Trust may, under certain conditions, elect to satisfy its obligation to pay the principal amount of the
debentures that are to be redeemed or that have matured by issuing a number of units obtained by dividing the principal
amount of the debentures by 95% of the current market price on the date of redemption or maturity.
As of December 31, 2022, conversion options have been exercised by holders on debentures representing a nominal
amount of $9,720 (December 31, 2021 – $7,857).
8. Bank Loans
The Trust has access to two credit facilities. The first is an acquisition line of credit in the amount of $8,000, with a
possible capacity of up to $23,000. This line of credit bears interest at a rate of 1% above the prime rate. As at December
31, 2022, $900 was due under the acquisition line of credit (December 31, 2021 – $0). The line of credit is secured by an
immoveable second rank hypothec on five properties having a fair value of $93,406.
The second is a revolving credit facility in the amount of $40,000 with an accordion option of up to an additional $20,000.
This revolving credit facility bears interest at a rate of 1% above the prime rate or 2.25% above the Bankers’ Acceptance
rate. As at December 31, 2022, $8,997 was due under the revolving credit facility (December 31, 2021 - $35,468).
The revolving credit facility is secured by an immoveable first rank hypothec on one property having a fair value of $18,275
and by negative pledge of a selection of borrowing base properties having a fair value of $137,499.
9. Class B LP Units
Years ended
Units outstanding, beginning of year
Exchange into Trust units
Fair value adjustment
Units outstanding, end of year
December 31, 2022
December 31, 2021
Units
347,265
-
-
347,265
$
1,417
-
(149)
1,268
Units
397,265
(50,000)
-
347,265
$
1,402
(216)
231
1,417
The Class B LP Units are exchangeable into Trust units on a one-for-one basis at any time at the option of the holder.
The Class B LP Units are entitled to distribution equal to distribution declared on Trust units, on a one-to-one basis.
Distributions on Class B LP Units are recognized in the statement of comprehensive income when declared.
As at December 31,
Distribution to Class B LP unitholders
Distribution per Class B LP unit
10. Fair Value Measurement
2022
$
104
0.30
2021
$
108
0.30
The following tables show the carrying amounts and fair values of financial assets and financial liabilities, including
their levels in the fair value hierarchy. They do not include the fair value of cash and cash equivalents, restricted cash,
receivables, balance of sale, trade and other payables and distribution payable to unitholders, which approximated their
carrying amount as at December 31, 2022 and December 31, 2021 because of their short-term maturity or because they
bear interest at current market rates.
As at December 31, 2022
Measured at fair value
Conversion and redemption options of convertible debentures (note 7)
Interest rate swap asset
Class B LP Units (note 9)
For which fair values are disclosed
Mortgage loans payable (note 6)
Convertible debentures, including their conversion and redemption
features (note 7)
Bank loans (note 8)
As at December 31, 2021
Measured at fair value
Conversion and redemption options of convertible debentures (note 7)
Interest rate swap liability
Class B LP Units (note 9)
For which fair values are disclosed
Mortgage loans payable (note 6)
Convertible debentures, including their conversion and redemption
features (note 7)
Bank loans (note 8)
Carrying
amount
$
116
(3,754)
1,268
Carrying
amount
$
10,693
553
1,417
Fair value
Level 1
Level 2
Level 3
$
-
-
1,268
$
-
(3,754)
-
$
116
-
-
-
-
-
$
10,693
-
-
-
-
-
638,441
-
600,844
42,058
44,007
-
9,897
-
9,897
Fair value
Level 1
Level 2
Level 3
$
-
-
1,417
$
-
553
-
607,038
-
614,158
53,512
48,376
-
35,468
-
35,468
The fair value of mortgage loans payable was calculated by discounting cash flows from future payments of principal
and interest using the period end market rates for various loans with similar risk and credit profiles. The period end market
rates have been estimated by reference to published mortgage rates by major financial institutions for similar maturities.
The fair value of convertible debentures, including their conversion and redemption features, was determined with
reference to the last quoted trading price preceding the period end.
The fair value of the Class B LP Units is determined with reference to the market price of the Trust units as at period end.
4
1
1
5
1
1
2022 Annual Report The fair values of derivative financial instruments, which comprise the conversion and redemption options of convertible
debentures and an interest rate swap, are based respectively on the partial differential equation method and the
discounted future cash flows method. The assumptions used in the partial differential equation method are estimated
by reference to the market price of the Trust units and its volatility, and take into account the credit risk of the financial
instrument. The assumptions used in the discounted future cash flows method are estimated by reference to the
Canadian Dollar Offered Rate (“CDOR”) forward rates.
Such fair value estimates are not necessarily indicative of the amounts the Trust might pay or receive in actual market
transactions. Potential transaction costs have also not been considered in estimating fair value.
The following tables provide a reconciliation of Level 3 fair value measurements on the consolidated statements of
financial position:
Conversion and redemption options of convertible debentures
Year ended December 31, 2022
Balance beginning of period
Conversion options exercised by holders
Change for the period recognized in profit or loss under Net adjustment to fair value of derivative
financial instruments
Balance end of year
$
10,693
(667)
(9,910)
116
Conversion and redemption options of convertible debentures
Year ended December 31, 2021
Balance beginning of year
Conversion options exercised by holders
Change for the period recognized in profit or loss under Net adjustment to fair value of derivative
financial instruments
Balance end of year
$
6,486
(2,018)
6,225
10,693
The following table provides a sensitivity analysis for the volatility applied in fair value measurement of the conversion
and redemption options of convertible debentures at December 31, 2022:
11. Unit-based Compensation
(a) Deferred unit compensation plan for trustees and certain executive officers
The Trust offers a deferred unit compensation plan for its trustees and certain executive officers. Under this plan,
the trustees and certain executive officers may elect to receive as compensation either cash, deferred units, or a
combination of both.
The following table presents relevant information on changes in the number of deferred units:
For the years ended December 31,
Outstanding, beginning of year
Trustees’ compensation
Distributions paid in units
Outstanding, end of year
2022
2021
Deferred units
Deferred units
103,116
9,558
9,053
121,727
87,920
8,484
6,712
103,116
As at December 31, 2022, the liability related to the plan was $446 (December 31, 2021 - $410). The related revenue
recorded in profit or loss amounted to $72 and $36, for the three months and year ended December 31, 2022 (for the
three months and year ended December 31, 2021 – expense of $14 and an expense of $99).
(b) Employee unit purchase plan
The Trust offers an optional employee unit purchase plan to all its employees. Under this plan, the employees may
contribute, each year, pursuant to a maximum of 3% to 7% of their base salary depending on their years of service with
the Trust. For each two units purchased by an employee, the Trust issues one unit from treasury.
As at December 31, 2022, the liability related to the plan was $54 (December 31, 2021 -$61). The related expense and
revenue recorded in profit and loss amounted to respectively $54 and $41 for the three months and year December 31,
2022 (for the three months and year ended December 31, 2021 -$0 and $0). The 11,915 units related to 2021 purchases
were issued in February 2022 (14,351 units related to 2020 purchases).
(c) Restricted unit compensation plan
The Trust offers a restricted unit compensation plan for all executive officers and key employees. Under this plan,
the executive officers and key employees are eligible to receive restricted units.
The following table presents relevant information on changes in the restricted units:
Volatility sensitivity
Increase (decrease)
(0.50)%
December 31, 2022
0.50%
23
116
181
28.96
29.46
29.96
As shown in the sensitivity analysis above, the fair value of the conversion and redemption options of convertible
debentures is impacted by a change in the volatility used in the valuation model. Generally, an increase in the volatility,
other things being equal, will result in an increase in fair value of the conversion and redemption options of convertible
debentures and vice-versa.
Conversion and redemption
options of convertible
debentures
Volatility
For the years ended December 31,
$
%
Outstanding, beginning of period
Granted
Cancelled
Settled
Outstanding, end of year
2022
2021
Restricted units
Restricted units
161,536
93,576
-
(116,529)
138,583
139,724
95,058
(1,524)
(71,722)
161,536
As at December 31, 2022, the liability related to the plan was $446 (December 31, 2021 - $552). The related revenue
and expense recorded in profit and loss amounted to respectively $244 and $357 for the three months and year ended
December 31, 2022 (for the three months and year ended December 31, 2021 – expense of $52 and $336).
6
1
1
7
1
1
2022 Annual Report (d) Cash settled share-based retirement compensation plan
On February 9, 2021, the Board of Trustees retroactively approved a cash settled phantom share-based retirement
allowance plan (RA Plan) for the President and Chief Executive Officer with a start date of July 1, 2020, to form part
of a long-term incentive compensation plan until retirement. Under this plan, phantom units are granted at set dates
to July 1, 2026, based on a predetermined cash value. The number of phantom units granted at each vest date is based
on the average closing trading price of the last 5 days prior to granting. The granted RA Plan units are to be paid out
on retirement based on the average closing trading price of the last 20 days. As at December 31, 2022, the long-term
obligation related to the plan was $596. The related expense recorded in profit and loss amounted to $33 and $107
for the three months and year ended December 31, 2022 (for the three months and year ended December 31, 2021 –
expense of $29 and $465).
12. Trust Units Issued and Outstanding
BTB is authorized to issue an unlimited number of trust units. Each trust unit represents a single vote at any meeting of
unitholders and entitles the unitholder to receive a pro rata share of all distributions. The unitholders have the right to
require BTB to redeem their trust units on demand. Upon receipt of the redemption notice, all rights to and under the
trust units tendered for redemption are surrendered and the holder thereof is entitled to receive a price per trust unit
(“Redemption Price”), as determined by a market formula. The Redemption Price is to be paid in accordance with the
conditions provided for in the Declaration of Trust. BTB trust units are considered liability instruments under IFRS because
the trust units are redeemable at the option of the holder, however they are presented as equity in accordance with IAS 32.
Trust units issued and outstanding are as follows:
For the years ended December 31,
Trust units outstanding, beginning of year
Issue pursuant to a public issue
Trust unit issuance costs
Issue pursuant to the distribution reinvestment plan (a)
Issue pursuant to the employee unit purchase plan (note 11 (b))
Issue pursuant to the restricted unit compensation plan (note 11 (c))
Class B LP units exchange into Trust units
Units
2022
$
Units
2021
$
74,126,971
351,540
63,439,435
309,394
9,584,100
38,545
7,809,650
-
(269)
-
30,266
(263)
83,711,071
389,816
71,249,085
339,397
872,983
11,915
130,506
-
3,182
752,280
2,943
48
518
-
14,351
71,722
50,000
52
256
227
Issue pursuant to conversion of convertible debentures (note 7)
511,804
2,396
1,989,533
8,665
Trust units outstanding, end of year
85,238,279
395,960
74,126,971
351,540
(a) Distribution reinvestment plan
BTB offers a distribution reinvestment plan for its trust unitholders. Participation in the plan is optional and under
the terms of the plan, cash distributions on trust units are used to purchase additional trust units. The trust units are
issued from BTB’s treasury at a price based on the volume-weighted average of the trading prices on the Toronto Stock
Exchange for the last five trading days before the distribution date, less a 3% discount.
13. Rental Revenues
For the years ended December 31,
Base rent and other lease generated revenues
Lease cancellation fees
Property tax and insurance recoveries
Operating expenses recoveries and other revenues
Lease incentive amortization
Straight-line lease adjustment
2022
$
2021
$
73,992
59,904
-
24,831
98,823
21,963
(3,113)
1,822
74
20,482
80,460
21,841
(3,292)
1,334
119,495
100,343
The Trust as lessor enters into leases on its investment properties. Initial lease terms are generally between three and
ten years and include clauses to enable periodic upward revision of the rental charge according to prevailing market
conditions. Some leases contain options to terminate before the end of the lease term. The Trust has classified these
leases as operating leases, because they do not transfer substantially all of the risks and rewards incidental to the
ownership of the assets.
Future minimum base rentals receivable under non-cancellable operating leases as at December 31, 2022 are as follows:
Within one year
Beyond one year but within two years
Beyond two years but within three years
Beyond three years but within four years
Beyond four years but within five years
Beyond five years
14. Net Financial Expenses
For the years ended December 31,
Interest on mortgage loans payable
Interest on convertible debentures
Interest on bank loans
Interest on lease liabilities
Other interest expense
2022
$
121,101
107,675
95,231
82,263
67,086
227,768
701,124
2021
$
18,742
3,220
484
211
36
360
1,301
108
231
188
3,246
28,127
9
1
1
2022
$
23,947
2,796
1,421
211
75
335
1,127
104
(149)
515
(14,216)
16,166
(b) Distributions
For the years ended December 31,
Distribution to unitholders
Distribution per Trust unit
(c) Normal course issuer bid (“NCIB”)
2022
$
24,927
0.30
2021
$
21,356
0.30
Accretion of non-derivative liability component of convertible debentures
Accretion of effective interest on mortgage loans payable and convertible debentures
Distribution - Class B LP Units
Fair value adjustment – Class B LP Units
Early repayment fees of a mortgage loan
Net adjustment to fair value of derivative financial instruments
On November 7, 2022, the Toronto Stock Exchange (TSX) approved a normal course issuer bid (“NCIB”), permitting
BTB to repurchase for cancellation up to 5,838,023 units from November 10, 2022 to November 9, 2023, representing
approximately 7% of the Trust’s issued and outstanding units. As of December 31, 2022, no units have been repurchased
for cancellation.
8
1
1
2022 Annual Report 15. Expenses by Nature
For the years ended December 31,
Depreciation
Employee compensation and benefits expense
16. Earnings per Unit
2022
$
122
9,452
2021
$
87
8,287
BTB’s trust units being puttable financial instruments presented as equity in accordance with IAS 32, the Trust is not
required to report a profit or loss per trust unit figure on its consolidated statements of comprehensive income. However,
for disclosure purposes only, the Trust has determined basic earnings per unit using the same basis that would apply in
accordance with lAS 33, Earnings per Share.
Net earnings per unit are calculated based on the weighted average number of trust units outstanding as follows:
For the years ended December 31,
Net income
Weighted average number of trust units outstanding – basic
Earnings per unit – basic
17. Capital and Financial Risk Management
2022
$
2021
$
38,154
41,568
83,438,658
71,547,334
0.46
0.58
This note presents information about the Trust’s management of capital and the Trust’s exposure to financial risk and its
objectives, policies and processes for measuring and managing risk.
(a) Capital Management
The Trust’s capital consists of contributions by unitholders, convertible debentures, mortgage loans and bank loans,
excluding issuance costs. In managing its capital, the Trust’s objectives are to ensure that it has adequate resources
for its operations and development, while maximizing returns for unitholders and maintaining a balance between debt
and equity.
The Trust manages its capital structure based on changes in its operations, the economic climate and the availability
of capital.
The Trust’s capital is as follows:
As at December 31,
Cash and cash equivalents
Mortgage loans payable(1)
Convertible debentures(1)
Bank loans
Mortgage loans payables, Convertible debentures and Bank loans adjusted for Cash
and cash equivalents
Total assets
Accumulated depreciation on Property and equipment
Cash and cash equivalents
Total assets adjusted for accumulated depreciation and cash and cash equivalents
(1) Excluding issue costs
2022
$
(2,404)
2021
$
(7,191)
638,441
607,038
43,170
9,897
44,564
35,468
689,104
679,879
1,179,340
1,129,901
1,114
(2,404)
992
(7,191)
1,178,050
1,123,702
As at December 31,
Mortgage loans payable, Convertible debentures and Bank loans
adjusted for Cash and cash equivalents / total assets adjusted for accumulated
depreciation and cash and cash equivalents ratio
Mortgage loans payable / total assets adjusted for accumulated depreciation
andcash and cash equivalents ratio
(b) Financial Risk Management
The Trust has exposure to the following risks from its use of financial instruments:
2022
%
58.5
2021
%
60.5
54.2
54.0
•
•
•
•
credit risk
interest rate risk
liquidity risk
fair value risk (see note 10)
This note presents information about the Trust’s exposure to each of the above risks, the Trust’s objectives, policies
and processes for measuring and managing risk, and the Trust’s management of capital. Further quantitative disclosures
are included throughout these consolidated financial statements.
(i) Credit risk
Credit risk arises from the possibility that tenants may experience financial difficulty and be unable to fulfill their lease
commitments. The Trust mitigates this risk by varying its tenant mix and staggering lease terms; avoiding dependence on
a single tenant for a significant portion of the Trust’s operating revenues and conducting credit assessments for all major
new tenants. The Trust analyzes its trade receivable on a regular basis and establishes an allowance for expected credit
losses that represents its estimate of lifetime expected credit losses to be incurred in respect of its trade receivables.
As at December 31, 2022, overdue rent receivable amounted to $962 (December 31, 2021 - $1,022). An allowance for
expected credit losses of $1,011 (December 31, 2021 - $944) has been recorded. This allowance contains overdue rent
receivable and other specific isolated trade receivable provisions. Management expects to recover the amounts not
provisioned as all lease agreements are signed, and they are in continuous discussions for collections with the tenants.
The Trust places its cash and cash equivalents with Canadian financial institutions with high credit ratings. Credit ratings
are actively monitored and these financial institutions are expected to meet their obligations.
The Trust is also exposed to credit risk with respect to derivative financial instruments that are in an unrealized gain
position, for which the credit exposure is equal to the positive fair value of the outstanding contracts. The Trust only enters
into derivative financial instruments with Canadian financial institutions with high credit ratings.
(ii) Interest rate risk
Interest rate risk reflects the risk of changes in the fair value or future cash flows of a financial instrument because
of fluctuations in market interest rates.
Except for three mortgage loans outstanding of $34,118 as at December 31, 2022 bearing interest at variable rates and
three mortgages loans outstanding of $52,028 as at December 31, 2022 covered by a floating-to-fixed interest rate
swap agreement, all other mortgage loans payable and convertible debentures bear interest at fixed rates. Accordingly
a 100-basis point increase or decrease in the average interest rates for the fiscal year, assuming that all other variables
remain constant, would have an impact of approximately $862 on the Trust’s comprehensive income for the year ended
December 31, 2022.
0
2
1
1
2
1
2022 Annual Report (iii) Liquidity risk
Liquidity risk is the risk that the Trust will not be able to meet its financial obligations as they come due. Liquidity risk
is managed by:
• maximizing cash flows from operations;
•
•
•
adopting an investment property acquisition and improvement program that takes into account available liquidity;
using credit facilities;
staggering mortgage loan maturities;
• maximizing the value of investment properties, thus increasing mortgage financing on renewal of loans; and
•
issuing debt securities or BTB’s units on the financial markets.
Management believes that the Trust will be able to obtain the financing required to make the payments coming due in
the next year. However, there is a risk that changes affecting market conditions and access to financing may invalidate
this assumption.
Some mortgage loans include subjective and restrictive covenant clauses under which the Trust must comply with
financial conditions and ratios. As at December 31, 2022, the Trust was in compliance with all the covenants to which
it was subject.
The Trust’s cash position is regularly monitored by management. The following are the contractual maturities of financial
liabilities, including estimated interest payments:
As at December 31, 2022
Estimated payment schedule
Trade and other payables
Distributions payable to
unitholders
Lease liabilities
Bank loans
Mortgage loans payable
and convertible debentures
As at December 31, 2021
Trade and other payables
Distributions payable to
unitholders
Lease liabilities
Bank loans
Mortgage loans payable
and convertible debentures
Carrying
amount
Total
contractual
cash flows
2023
2024
2025
2026
2027
2028 and
thereafter
$
$
$
20,058
20,581
20,279
2,131
4,203
9,897
2,131
2,131
9,882
9,897
228
9,897
$
183
-
231
-
$
63
-
236
-
$
56
-
242
-
$
-
-
245
-
$
-
-
8,700
-
678,053
775,870
112,205
140,300
106,623
150,914
124,496
141,332
714,342
818,361
144,740
140,714
106,922
151,212
124,741
150,032
Estimated payment schedule
Carrying
amount
Total
contractual
cash flows
2022
2023
2024
2025
2026
2027 and
thereafter
$
$
$
21,731
22,393
21,930
1,853
4,219
1,853
1,853
10,107
226
35,468
35,468
35,468
$
194
-
228
-
$
157
-
231
-
$
56
-
236
-
$
56
-
242
-
$
-
-
8,944
-
648,029
751,065
113,817
70,937
151,790
99,385
125,890
189,246
711,300
820,886
173,294
71,359
152,178
99,677
126,188
198,190
18. Subsidiaries and Joint Arrangements
(a) Subsidiaries
The principal wholly owned subsidiaries included in the Trust’s consolidated financial statements are as follows:
Entity
BTB, Acquisition and operating Trust (“BTB A&OT”)
BTB Real Estate Management Inc.
Immeuble BTB Crescent Sainte-Catherine Inc
Cagim Real Estate Corporation (“CREC”)
BTB Real Estate Limited Partnership
Lombard
Place d’affaire Lebourgneuf Phase II (“PAL II”)
Société immobilière Cagim
(b) Joint arrangements
Type
Trust
Corporation
Corporation
Corporation
Limited Partnership
Limited Partnership
General Partnership
Limited Partnership
The Trust has investments in joint arrangements whereby the parties that have joint control of the arrangements have
rights to the assets, and obligations for the liabilities, relating to the arrangements. Therefore, the joint arrangements are
classified as joint operations. The joint operations included in the Trust’s consolidated financial statement are as follows:
As at December 31,
Property
Immeuble BTB/Laplaine
Huntington/BTB Montclair
Location
Terrebonne, QC
Gatineau, QC
2022
%
50
50
The consolidated financial statements include the Trust’s proportionate share of the assets, liabilities, revenues
and expenses of these joint arrangements. Summarised financial information is as follows:
As at and for the years ended December 31,
Assets
Liabilities
Revenues
Expenses
Net change in fair value of investment properties
19. Operating Segments
2022
$
19,973
(9,276)
1,869
870
2,741
2021
%
50
50
2021
$
22,064
(9,827)
1,836
1,147
2,831
For investment properties, discrete financial information is provided to the CEO on an aggregated investment property
basis. The information provided is net rentals (including gross rent and property expenses), the change in fair value of
investment properties and fair value of investment properties. The individual investment properties are aggregated into
segments with similar economic characteristics. The CEO considers that this is best achieved by aggregating into retail,
office and industrial.
Consequently, the Trust is considered to have three operating segments, as follows:
•
Industrial
• Off-downtown core office
• Necessity-based retail
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2022 Annual Report
Year ended December 31, 2022
Investment properties
Rental revenue from properties
Net operating income
Year ended December 31, 2021
Investment properties
Rental revenue from properties
Net operating income
Industrial
Off-downtown
core office
Necessity-
based retail
$
$
$
Total
$
344,998
570,527
249,356
1,164,881
22,910
17,565
283,856
13,672
9,235
68,794
36,863
574,928
58,034
30,244
27,791
16,002
252,187
28,637
16,857
119,495
70,430
1,110,971
100,343
56,336
20. Supplemental Cash Flow Information
The following table provides a reconciliation of movements of liabilities to cash flows arising from financing activities:
Convertible debentures
Mortgage loans payable
Year ended December 31, 2022
Balance beginning of year
Mortgage loans, net of financing costs
Capitalized interest on mortgage loans
Repayment of mortgage loans
Asset acquisitions mortgage assumption
Asset dispositions mortgage assumption
Net proceeds from issuance of convertible debentures
Initial recognition of conversion and redemption options liability
component
Repayment of convertible debentures
Conversion of convertible debentures
Fair value assumption adjustments and financing costs amortization
Accretion of non-derivative liability component
Balance end of year
21. Compensation of Key Management Personnel and Trustees
Key management personnel and trustees compensation is as follows:
For the years ended December 31,
Salaries and short-term benefits
Unit-based compensation
Total
Key management personnel are comprised of the Trust’s executive officers.
$
42,819
-
-
-
-
-
-
-
-
(1,696)
517
302
41,942
$
605,210
27,364
192
(46,228)
59,774
(10,790)
-
-
-
-
589
-
636,111
2022
$
2,377
539
2,916
2021
$
2,812
1,066
3,878
22. Leases Commitments and Contingencies
(i) Leases
Lease liabilities
As at December 31,
Maturity analysis - contractual undiscounted cash flows
Within one year
Beyond one year but within five years
Beyond five years
Total undiscounted lease liabilities
Lease liabilities included in the statement of financial position
Current
Non-current
Amounts recognized in profit and loss and statement of cash flows
As at December 31,
Profit and loss
Interest on lease liabilities (note 15)
Expenses relating to leases of low-value assets, excluding short-term leases of low-value assets
Statement of cash flows
Total cash outflow for leases
(ii) Litigation
2022
$
228
954
8,700
9,882
4,203
19
4,184
2022
$
211
491
717
2021
$
226
937
8,944
10,107
4,219
16
4,203
2021
$
211
292
516
The Trust is involved in litigation and claims which arise from time to time in the normal course of business. These
litigation and claims are generally covered by insurance. In the opinion of management, any liability that may arise
from such contingencies will not have a significant adverse effect on the Trust’s consolidated financial statements.
23. Subsequent Events
On February 2, 2023, the Trust completed the purchase of a fully leased industrial property in Mirabel (Quebec)
for $28,000. As part of the transaction the Trust contracted a mortgage loan of $16,000.
On February 14, 2023, the holder of Class B LP units exchanged 150,000 into Trust units.
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2022 Annual Report
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Michel Léonard
President, Chief Executive
Officer & Trustee
Mathieu Bolté
Vice President &
Chief Financial Officer
Jocelyn Proteau
Chair of the Board
& Trustee(2)
Jean-Pierre Janson
Vice-Chair of the Board
& Trustee(2)
Lucie Ducharme
President, Human
Resources and Governance
Committees & Trustee(1)(2)
Luc Martin
President, Audit Committee
& Trustee(1)
Fernand Perreault
President, Investment
Committee & Trustee(3)
Christine Marchildon
Trustee(2)
Sylvie Lachance
Trustee(3)
(1) Member of the Audit Committee
(2) Member of the Human Resources and Governance Committee
(3) Member of the Investments Committee
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Head office
BTB Real Estate Investment Trust
1411 Crescent Street, Suite 300
Montréal, Québec, H3G 2B3
T 514 286-0188
www.btbreit.com
Listing
The units and debentures of
BTB Real Estate Investment Trust
are listed on the Toronto Stock
Exchange under the trading symbols:
BTB.UN
BTB.DB.G
BTB.DB.H
Transfer agent
Computershare Investor Services
1500 Robert-Bourassa Blvd
7th floor, Montréal, Québec, H3A 3S8
Canada
T 514 982-7555
T Toll free: 1 800-564-6253
F 514 982-7850
service@computershare.com
Taxability of distributions
In 2022, for all Canadian unitholders,
the distributions were fiscally treated
as follow:
• Other revenues: 0%
• Fiscal Deferral: 100%
Auditors
KPMG LLP.
600 De Maisonneuve Blvd West
Suite 1500
Montréal, Québec, H3A 0A3
Legal counsel
De Grandpré Chait LLP.
800 Rene-Lévesque Blvd West
Suite 2600
Montréal, Québec, H3B 1X9
Unitholders distribution
reinvestment plan
BTB Real Estate Investment Trust
offers a distribution reinvestment
plan to unitholders whereby the
participants may elect to have their
monthly cash distribution reinvested
in additional units of BTB at a price
based on the weighted average price
for BTB’s Units on the Toronto Stock
Exchange for the five trading days
immediately preceding the distribution
date, discounted by 3%.
For further information about the
Distribution Reinvestment Plan, please
refer to the Investor relations section
of our website at www.btbreit.com or
contact the Plan agent: Computershare
Investor Services.
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2022 Annual Report
TSX: BTB.UN
btbreit.com