HIGH-QUALITY COMMERCIAL PROPERTIES,
RESPONSIVE TO TENANTS’ CHANGING
NEEDS AND FOCUSED ON RE-INVESTMENT:
MORGUARD REAL ESTATE INVESTMENT TRUST
IS COMMITTED TO RE-ENVISIONING TOGETHER.
2017 ANNUAL REPORT
ON THE COVER
PRAIRIE MALL
GRANDE PRAIRIE, AB
RE-ENVISIONING TOGETHER
Canadian workplaces and communities are rapidly changing and Morguard Real Estate
Investment Trust is responding by investing in its real estate properties across the
country. Our diversified portfolio comprises a wide range of commercial asset types,
enabling us to address the needs of our current tenants, provide a vision for future
tenants while maintaining a stable cash flow over time. By rethinking, repurposing and
reimagining our properties, we are helping to create vibrant workplaces and shopping
destinations that support the communities where we operate.
ASSET
MANAGEMENT
DEVELOPMENT
COMMUNITIES
FELLOW UNITHOLDERS
2017 was a challenging year. However, Morguard Real Estate Investment Trust is starting to realize
the benefits of our efforts in a number of development and leasing initiatives, with over 290,000
square feet of development now revenue generating. As a result, we were able to sustain our unbroken
record of monthly distributions to you, our valued unitholders, and I’m pleased to share the results
with you in this year’s annual report.
The diversity of our portfolio helped to reduce the impact of Alberta’s economic slowdown, as well
as the ongoing challenges within the retail sector. Today, the Trust is actively optimizing its income
stream through the modernization of its retail properties. This means less reliance on rental income
from large retailers and the development of diverse revenue sources from our retail centres.
The near-term goal is to identify, develop and intensify assets that are currently underutilized,
in particular the land on which our retail centres stand, and non-performing retail spaces.
We believe these efforts will result in a growing income stream over time. Looking further ahead,
we’ll maintain our focus on increasing the Trust’s income stream to fund future portfolio growth
and, of course, to reward our unitholders.
As always, I express my sincere appreciation to our talented management team, our dedicated
employees, our experienced and capable Trustees, and to you, our loyal unitholders. Your loyalty
and enthusiasm helped drive the ongoing success of Morguard Real Estate Investment Trust
in 2017, and I’m confident will continue as we focus on our commitment to re-envisioning together.
Sincerely,
K. RAI SAHI
PRESIDENT AND CHIEF EXECUTIVE OFFICER
2
M O R G U A R D R E A L E S T A T E I N V E S T M E N T T R U S T
2 0 1 7 A N N U A L R E P O R T
FINANCIAL HIGHLIGHTS
IN THOUSANDS OF CANADIAN DOLL ARS, EXCEPT PER UNIT AMOUNTS
AS AT DECEMBER 31
2013
2014
2015
2016
2017
Revenue from real estate properties
$279,651
$298,461
$290,982
$280,726
$278,754
Net operating income
$161,336
$169,739
$165,930
$160,500
$157,025
Funds from operations – Basic
$100,763
$106,516
$106,385
$113,500
$100,766
Adjusted funds from operations – Basic
$65,060
$78,973
$79,208
$87,091
$74,983
Funds from operations – Basic per unit
Adjusted funds from operations – Basic per unit
Distributions per unit
Total assets
Weighted average number of units
as at year-end (in thousands) – Basic
$1.59
$1.03
$0.96
$1.71
$1.27
$0.96
$1.72
$1.28
$0.96
$1.87
$1.43
$0.96
$1.66
$1.24
$0.96
$2,942,799
$3,016,496
$2,920,155
$3,034,190
$2,921,091
63,456
62,168
61,779
60,750
60,622
$298
$291
$280
$281
$279
$170
$166
$161
$161
$157
$114
$107
$106
$101
$101
13
14
15
16
17
13
14
15
16
17
13
14
15
16
17
REVENUE FROM
REAL ESTATE PROPERTIES
NET OPERATING INCOME
FUNDS FROM OPERATIONS
– BASIC
IN MILLIONS OF DOLL ARS
IN MILLIONS OF DOLL ARS
IN MILLIONS OF DOLL ARS
M O R G U A R D R E A L E S T A T E I N V E S T M E N T T R U S T
2 0 1 7 A N N U A L R E P O R T
3
LEF T TO RIGHT
STANDARD LIFE
OT TAWA, ON
77 BLOOR STREET WEST
TORONTO, ON
PL ACE INNOVATION
SAINT-L AURENT, QC
ASSET
MANAGEMENT
DEVELOPMENT
COMMUNITIES
ASSET
MANAGEMENT
Our goal is to derive the greatest value
possible from our extensive real estate portfolio.
We apply innovative forward thinking to enhance
our properties. 77 Bloor Street in downtown
Toronto is an excellent example. The Trust
brought the property to a Class A LEED Gold
standard while increasing leasable area and
enhancing rental rates. At year-end 2017, the
building was appraised at $250 million, two and
a half times its original purchase price in 2009.
2 0 1 7 H I G H L I G H T S
VARIOUS ASSET CLASSES ACROSS CANADA
STRENGTH IN DIVERSIFICATION
The Trust’s strategic goal is to ensure a stable and increasing cash flow over time, and critical to this
strategy is diversifying our holdings. As a result, the Trust operates across three asset classes and
six provinces. This has been a proven strategy, helping to minimize the effects of any downturn that
56% RETAIL
38% OFFICE
6% INDUSTRIAL
may occur in a specific asset class, industry or geographic market.
The Trust’s retail portfolio includes two types of income producing properties – enclosed full-scale,
regional shopping centres and community strip centres – located in British Columbia, Alberta,
Saskatchewan, Manitoba and Ontario. The enclosed full-scale, regional shopping centres are
dominant in their respective markets, while the community strip centres include food retailers,
discount department stores and banking institutions. Investing across these two broad categories
of retail assets allows the Trust to spread its tenant base, reducing its exposure to a single category
of retailer.
Like our retail assets, the Trust’s office portfolio includes two main asset types: single-tenant and
multi-tenant. The single-tenant properties help to stabilize the Trust’s revenue stream, as they are
typically under long-term leases to major corporate and government tenants. Multi-tenant properties
with well-distributed lease expiration dates enable the Trust to benefit from increased rental rates
on lease renewal, without creating an exposure to high tenant turnover in any one year. The office
portfolio is geographically diversified across four provinces. In addition, the Trust’s portfolio
is further diversified by its interests in four industrial properties located in Ontario and Quebec.
GROSS LEASABLE AREA
BY ASSET CLASS1
AS AT DECEMBER 31, 2017
13%
24%
6% 8%
8%
41%
GROSS LEASABLE AREA
BY GEOGRAPHIC REGION1
AS AT DECEMBER 31, 2017
1. Excluding income producing properties
held for development.
LEF T TO RIGHT
WOODBRIDGE SQUARE
VAUGHAN, ON
PETROLEUM PL AZA
EDMONTON, AB
6
M O R G U A R D R E A L E S T A T E I N V E S T M E N T T R U S T
2 0 1 7 A N N U A L R E P O R T
2 0 1 7 H I G H L I G H T S
KEEPING PACE WITH AN EVOLVING RETAIL LANDSCAPE
RE-ENVISIONING THE RETAIL PORTFOLIO
The retail marketplace is continuing to see change as owners adapt shopping centres to meet the
needs of consumers. The breadth and diversity of our retail portfolio provide the Trust with the
opportunity to accommodate modern uses and services.
This re-envisioning of the retail portfolio includes two primary strategies. The first is to intensify
underutilized density to increase our gross leasable area (“GLA”) and deliver diverse sources of revenue
for our unitholders. For the community, this makes the Trust’s retail centres more “experiential” and
service-oriented. The second is to remerchandise space vacated by major retailers such as Target to not only
replace lost revenues but to increase revenues generated from the same gross leasable area. This means
an enhanced tenant mix, an increase in foot traffic for our tenants and ultimately greater tenant sales.
Our retail intensification initiatives will increase gross leasable area by 139,200 square feet and
will reactivate 654,000 square feet. During 2017, 79,200 square feet of new space and 211,500
square feet of remerchandised space became revenue generating in four of the Trust’s community
strip centres and four of the Trust’s regional enclosed centres. Investment by the Trust in these
delivered projects was $54.2 million. By the end of 2017, the delivered development projects were
generating $1.2 million of net operating income per quarter. By the end of 2018, we expect to have
successfully re-leased all of the gross leasable area from the Target space.
COMPLETED DEVELOPMENT PROJECTS
AS AT DECEMBER 31, 2017
GLA
PROPERTY
NEW
REDEVELOPED
TOTAL
ADJUSTMENT2
INCOME
PRODUCING
COMPLETION
DATE
TOTAL PROJECT
OCCUPANCY
COST1
% 2,3
Parkland Mall
52,000
43,000
95,000
(7,500)
87,500
Q2 2017
$15,000
Shoppers Mall
The Centre
Airdrie Co-op
Aurora Centre
Shoppers Mall
Prairie Mall
Woodbridge Square
The Centre
—
—
5,000
16,000
—
—
—
—
Charleswood Centre
6,200
77 Bloor Street West
5,500
Others
41,000
41,000
(3,500)
37,500
Q2 2017
13,000
13,000
(1,000)
12,000
Q2 2017
—
—
5,000
16,000
—
—
5,000
Q3 2017
16,000
Q3 2017
62,500
62,500
500
63,000
Q3 2017
56,000
56,000
(17,000)
39,000
Q3 2017
4,500
4,500
20,000
20,000
—
—
6,200
5,500
—
—
—
—
4,500
Q3 2017
20,000
Q4 2017
6,200
5,500
Q4 2017
Q2 2016
7,335
1,251
1,732
5,488
7,906
8,313
1,156
4,794
615
3,290
638
84,700
240,000
324,700
(28,500)
296,200
$57,518
86.3
86.6
100.0
100.0
100.0
100.0
80.8
65.2
100.0
100.0
100.0
1. In thousands of dollars
2. GLA adjustment due to reconfiguration caused by change in use.
3. Represents occupied GLA for development projects as a percentage of total GLA for development projects.
M O R G U A R D R E A L E S T A T E I N V E S T M E N T T R U S T
M O R G U A R D R E A L E S T A T E I N V E S T M E N T T R U S T
2 0 1 7 A N N U A L R E P O R T
2 0 1 7 A N N U A L R E P O R T
7
7
LEF T TO RIGHT
SHOPPERS MALL
BRANDON, MB
MALL INTERIOR
ENTRANCE RENDERING
DEVELOPMENT SITE PL AN
DEVELOPMENT
Ensuring our retail centres meet the needs of
our tenants and communities is a core strategy.
Modernizing and remerchandising our retail
shopping centres delivers on that strategy.
The Trust revitalized Shoppers Mall in Brandon,
Manitoba bringing in fitness facilities, a pharmacy,
and additional restaurant buildings. We also
worked with the grocery anchor to enhance its
offering of prepared foods, seating areas and
event space. This revitalization has solidified its
place as a desirable destination in the community
and has significantly increased foot traffic.
ASSET
ASSET
MANAGEMENT
MANAGEMENT
DEVELOPMENT
DEVELOPMENT
COMMUNITIES
COMMUNITIES
COMMUNITIES
The Trust sees its retail properties as
extensions of the communities they serve.
They are destinations in and of themselves –
community centres. To help respond to the
needs of individual communities, we have
partnered with municipal transit authorities
to build transit stations within five of our
properties. Cambridge Centre, for example,
is positioned as an intensified, transit-oriented,
mixed-use community hub with the opening
of a new regional multi-transit authority station
in December, 2016.
LEF T TO RIGHT
CAMBRIDGE CENTRE
CAMBRIDGE, ON
RENDERING
MALL EVENT
ICE RINK
ASSET
MANAGEMENT
DEVELOPMENT
COMMUNITIES
2 0 1 7 H I G H L I G H T S
DELIVERING DEVELOPMENT PROJECTS
TO GENERATE GREATER REVENUE
FOCUSED ON FINANCIAL RESULTS
NET OPERATING INCOME
For 2017, our total net operating income was $157.0 million, compared with $160.5 million a
year earlier. During 2017, the Trust continued to be challenged by reduced performance in the
retail portfolio. Development projects that began generating revenue in the second quarter of
2017 offset decreases resulting from vacancy costs and basic rent. It is expected that the full
impact of our development projects will be realized toward the end of 2018.
STEADY PERFORMANCE FOR UNITHOLDERS
CONSISTENT DISTRIBUTIONS YEAR OVER YEAR
Throughout the year, we continued to make monthly distributions to our unitholders.
Since inception, our distributions have held steady or increased, but have never lessened.
For 2017, the monthly distributions per unit were $0.08, for an annualized total of $0.96
per unit. Overall, the Trust’s distributions for the year were $58.2 million.
In setting the level of distributions, the Trustees closely monitor our payout ratio – that is,
the cash distributions to basic adjusted funds from operations – to ensure sufficient funds
are retained for reinvestment. At December 31, 2017, the Trust’s payout ratio was 77.4%,
compared with a ratio of 67.1% at December 31, 2016. The significant difference between
2017 and 2016 is the inclusion of a one-time $11.3 million settlement which increased
adjusted funds from operations in 2016.
MANAGING THE FINANCES
PRUDENT, BALANCED OVERSIGHT
Managing the capital of the Trust prudently is an ongoing objective. This includes having an
appropriate balance between different types of debt, and maintaining an appropriate ratio
of debt to total assets.
The Trust’s debt ratio at December 31, 2017 was 44.5%, a decrease from December 31, 2016
of 2.5% (47.0%). This decrease is largely the result of both the 2012 and 2016 convertible
debentures remaining on the balance sheet at December 31, 2016. The 2012 convertible
debentures were redeemed for cash on January 9, 2017. The Trust’s debt ratio at December 31,
2016 was 44.8%, adjusting for the 2012 debentures.
1 2 M O R G U A R D R E A L E S T A T E I N V E S T M E N T T R U S T
2 0 1 7 A N N U A L R E P O R T
52% RETAIL
46% OFFICE
2% INDUSTRIAL
NET OPERATING INCOME
BY ASSET CLASS1
AS AT DECEMBER 31, 2017
$0.96 $0.96 $0.96 $0.96 $0.96
13
14
15
16
17
CASH DISTRIBUTIONS
PER UNIT
AS AT DECEMBER 31
14%
29%
5% 7%
6%
39%
NET OPERATING INCOME
BY GEOGRAPHIC REGION1
AS AT DECEMBER 31, 2017
1. Excluding income producing properties
held for development.
SUMMARY OF SELECTED ANNUAL INFORMATION
IN THOUSANDS OF CANADIAN DOLL ARS, EXCEPT PER UNIT AMOUNTS
Revenue from real estate properties
Net operating income
Income before fair value (losses)/gains,
(loss)/gain on sale of real estate properties
and net income/(loss) from equity-accounted
investments
Fair value (losses)/gains on real estate properties
(Loss)/gain on sale of real estate properties
Net income/(loss) from equity-accounted
investments
Net income
Funds from operations
Adjusted funds from operations 1, 6
AMOUNTS PRESENTED ON A
PER UNIT BASIS
NET INCOME
Basic
Diluted 2
FUNDS FROM OPERATIONS
Basic
Diluted 2
ADJUSTED FUNDS FROM OPERATIONS 1, 6
Basic
Diluted 2
CASH DISTRIBUTIONS PER UNIT
PAYOUT RATIO –
Adjusted funds from operations 1, 3
WEIGHTED AVERAGE NUMBER OF UNITS
AS AT YEAR-END (IN THOUSANDS)
Basic
Diluted 2
BALANCE SHEETS
Total assets
Total liabilities
Total equity
2017
2016
2015
2014
2013
$278,754
157,025
$280,726
160,500
$290,982
165,930
$298,461
169,739
$279,651
161,336
97,600
(31,225)
—
931
67,306
100,766
74,983
$1.11
$1.05
$1.66
$1.57
$1.24
$1.20
$0.96
77.4%
110,408
(51,643)
—
(1,558)
57,207
113,500
87,091
$0.94
$0.93
$1.87
$1.81
$1.43
$1.41
$0.96
67.1%
103,153
(78,977)
—
2,441
26,617
106,385
79,208
$0.43
$0.43
$1.72
$1.67
$1.28
$1.27
$0.96
102,700
11,239
(37)
(20)
113,882
106,516
78,973
$1.83
$1.72
$1.71
$1.67
$1.27
$1.26
$0.96
97,080
107,641
2,058
5,602
212,381
100,763
65,060
$3.35
$3.01
$1.59
$1.55
$1.03
$1.03
$0.96
75.0%
75.6%
93.2%
60,622
69,200
60,750
66,780
61,779
67,876
62,168
68,265
63,456
69,554
$2,921,091
$1,355,500
$1,565,591
$3,034,190
$1,479,007
$1,555,183
$2,920,155
$1,364,015
$1,556,140
$3,016,496
$1,409,415
$1,607,081
$2,942,799
$1,390,061
$1,552,738
GROSS LEASABLE AREA AS AT YEAR-END
(IN THOUSANDS OF SQUARE FEET) 4
Retail
Office
Industrial
TOTAL
OCCUPANCY AS AT YEAR-END (%) 4, 5
Retail
Office
Industrial
TOTAL
4,726
3,198
534
8,458
97%
93%
98%
95%
4,721
3,201
534
8,456
96%
97%
98%
96%
4,710
3,365
534
8,609
97%
97%
97%
97%
4,775
3,678
534
8,987
96%
96%
97%
96%
4,771
3,314
534
8,619
98%
95%
87%
96%
1. Restated in accordance with REALpac white paper on FFO and AFFO effective January 1, 2017. The restatement required the inclusion of the one-time Target Corporation settlement of $11.3 million,
finalized in the second quarter of 2016 (see part IV).
2. Includes the dilutive impact of the outstanding convertible debentures.
3. Cash distributions per unit as a percentage of adjusted funds from operations – basic.
4. Gross leasable area for income producing properties, excluding IPP held for development, and excluding equity-accounted investments.
5. Excludes properties held for sale and area under development.
6. The Trust uses normalized productive capacity maintenance expenditures to calculate adjusted funds from operations.
M O R G U A R D R E A L E S T A T E I N V E S T M E N T T R U S T
2 0 1 7 A N N U A L R E P O R T
1 3
BALANCE SHEETS
IN THOUSANDS OF CANADIAN DOLL ARS
AS AT DECEMBER 31
ASSETS
NON-CURRENT ASSETS
Real estate properties
Equity-accounted investment
CURRENT ASSETS
Amounts receivable
Loan receivable
Prepaid expenses and other
Cash and cash equivalents
TOTAL ASSETS
LIABILITIES AND UNITHOLDERS’ EQUITY
NON-CURRENT LIABILITIES
Mortgages payable
Convertible debentures
Other liabilities
CURRENT LIABILITIES
Mortgages payable
Convertible debentures
Accounts payable and accrued liabilities
Loan payable
Bank indebtedness
TOTAL LIABILITIES
Unitholders’ equity
2017
2016
$2,861,816
27,080
2,888,896
16,601
—
842
14,752
32,195
$2,826,098
28,201
2,854,299
15,172
50,000
2,023
112,696
179,891
$2,921,091
$3,034,190
$990,959
166,983
3,728
1,161,670
89,299
—
51,670
35,000
17,861
193,830
1,355,500
1,565,591
$2,921,091
$1,027,841
165,273
3,663
1,196,777
84,653
149,975
47,602
—
—
282,230
1,479,007
1,555,183
$3,034,190
1 4 M O R G U A R D R E A L E S T A T E I N V E S T M E N T T R U S T
2 0 1 7 A N N U A L R E P O R T
STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
IN THOUSANDS OF CANADIAN DOLL ARS, EXCEPT PER UNIT AMOUNTS
FOR THE YEAR ENDED DECEMBER 31
Revenue from real estate properties
Property operating expenses
Property management fees
NET OPERATING INCOME
Interest expense
General and administrative
Other income
INCOME BEFORE FAIR VALUE LOSSES AND NET INCOME/(LOSS) FROM
EQUIT Y-ACCOUNTED INVESTMENT
Fair value losses on real estate properties
Net income/(loss) from equity-accounted investment
NET INCOME
OTHER COMPREHENSIVE INCOME
Item to be reclassified to profit or loss in subsequent periods:
Amortization of cash flow hedges
COMPREHENSIVE INCOME
NET INCOME PER UNIT
Basic
Diluted
2017
$278,754
112,563
9,166
157,025
55,087
4,517
(179)
97,600
(31,225)
931
67,306
—
$67,306
$1.11
$1.05
2016
$280,726
111,020
9,201
160,505
56,676
4,726
(11,305)
110,408
(51,643)
(1,558)
57,207
189
$57,396
$0.94
$0.93
M O R G U A R D R E A L E S T A T E I N V E S T M E N T T R U S T
2 0 1 7 A N N U A L R E P O R T
1 5
STATEMENTS OF UNITHOLDERS’ EQUITY
IN THOUSANDS OF CANADIAN DOLL ARS, EXCEPT NUMBER OF UNITS
NUMBER
OF UNITS
ISSUE
OF UNITS
EQUIT Y
COMPONENT OF
CONVERTIBLE
DEBENTURES
RETAINED
EARNINGS
CONTRIBUTED
SURPLUS
ACCUMUL ATED
OTHER
TOTAL
COMPREHENSIVE UNITHOLDERS’
LOSS
EQUIT Y
UNITHOLDERS’ EQUIT Y,
JANUARY 1, 2016
60,891,654
$613,044
$941,421
$1,526
$338
($189)
$1,556,140
Repurchase of units
2012 Debentures converted
2016 Debentures issued
Net income
Distributions to unitholders
Issue of units – DRIP 1
Amortization of cash flow hedges
UNITHOLDERS’ EQUIT Y,
DECEMBER 31, 2016
Repurchase of units
2012 Debentures converted
2012 Debentures redeemed
Net income
Distributions to unitholders
Issue of units – DRIP
UNITHOLDERS’ EQUIT Y,
DECEMBER 31, 2017
1. Distribution Reinvestment Plan (“DRIP”)
(371,769)
(3,744)
(2,096)
406
—
—
—
10
—
—
—
80,416
—
1,189
—
—
—
57,207
(57,117)
(1,189)
—
—
—
4,594
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
189
(5,840)
10
4,594
57,207
(57,117)
—
189
60,600,707
610,499
938,226
6,120
338
—
1,555,183
(50,300)
(507)
(259)
731
—
—
—
18
—
—
—
140,591
2,053
—
—
67,306
(56,150)
(2,053)
—
—
—
—
(1,526)
1,526
—
—
—
—
—
—
—
—
—
—
—
—
(766)
18
—
67,306
(56,150)
—
60,691,729
$612,063
$947,070
$4,594
$1,864
$—
$1,565,591
1 6 M O R G U A R D R E A L E S T A T E I N V E S T M E N T T R U S T
2 0 1 7 A N N U A L R E P O R T
STATEMENTS OF CASH FLOWS
IN THOUSANDS OF CANADIAN DOLL ARS
FOR THE YEAR ENDED DECEMBER 31
2017
2016
OPERATING ACTIVITIES
Net income
Add items not affecting cash
Distributions from equity-accounted investment
Additions to tenant incentives and leasing commissions
Net change in non-cash operating assets and liabilities
CASH PROVIDED BY OPERATING ACTIVITIES
FINANCING ACTIVITIES
Proceeds from new mortgages
Financing cost on new mortgages
Repayment of mortgages
Repayments on maturity
Principal instalment repayments
Net repayment of 2012 Debentures
Net proceeds from 2016 Debentures
Proceeds from bank indebtedness
Proceeds from loan payable
Repayment of loan payable
Distributions to unitholders
Units repurchased for cancellation
CASH USED IN FINANCING ACTIVITIES
INVESTING ACTIVITIES
Capital expenditures on real estate properties
Acquisition of real estate properties
Proceeds from sale of real estate properties, net
CASH USED IN INVESTING ACTIVITIES
NET CHANGE IN CASH AND CASH EQUIVALENTS
Cash and cash equivalents, beginning of period
CASH AND CASH EQUIVALENTS, END OF PERIOD
$67,306
31,494
2,052
(3,920)
3,885
100,817
53,000
(185)
(50,250)
(35,490)
(99,957)
7
17,861
35,000
—
(56,150)
(766)
(136,930)
(61,831)
—
—
(61,831)
(97,944)
112,696
$14,752
$57,207
55,015
2,750
(3,878)
4,054
115,148
30,063
(161)
(55,749)
(34,703)
—
119,863
—
17,000
(17,000)
(57,117)
(5,840)
(3,644)
(47,415)
(61)
22,386
(25,090)
86,414
26,282
$112,696
M O R G U A R D R E A L E S T A T E I N V E S T M E N T T R U S T
2 0 1 7 A N N U A L R E P O R T
1 7
HERITAGE PL ACE
OT TAWA, ON
PORTFOLIO SUMMARY
AS AT DECEMBER 31, 2017
$2.9B
49
21
REAL ESTATE PROPERTIES
TOTAL PROPERTIES
RETAIL PROPERTIES
28
8.6M
OFFICE AND INDUSTRIAL
PROPERTIES
GROSS LEASABLE
AREA (SF)
95%
PORTFOLIO
OCCUPANCY
1 8
M O R G U A R D R E A L E S T A T E I N V E S T M E N T T R U S T
2 0 1 7 A N N U A L R E P O R T
RETAIL PORTFOLIO
AS AT DECEMBER 31, 2017
PROPERTY
CITY
PROV.
OWNERSHIP
INTEREST
(%)
TOTAL
AREA
(SF)
OWNERSHIP
AREA
(SF)
OCCU -
PANCY
(%)
TOP TENANTS
Burquitlam Plaza
Coquitlam
Pine Centre Mall
Prince George
Shelbourne Plaza
Airdrie Co-op Centre
Airdrie RONA Centre
Heritage Towne Centre
Victoria
Airdrie
Airdrie
Calgary
Prairie Mall
Grande Prairie
Parkland Mall • 5
The Centre
Shoppers Mall • 2
Charleswood Centre
Southdale Centre
Aurora Centre
Cambridge Centre • 2
Market Square
Wonderland Corners
Red Deer
Saskatoon
Brandon
Winnipeg
Winnipeg
Aurora
Cambridge
Kanata
London
Kingsbury Centre
Mississauga
Hampton Park Plaza
Home Base
St. Laurent
Ottawa
Ottawa
Ottawa
Woodbridge Square
Vaughan
TOTAL RETAIL
BC
BC
BC
AB
AB
AB
AB
AB
SK
MB
MB
MB
ON
ON
ON
ON
ON
ON
ON
ON
ON
100
100
100
100
100
100
50
100
100
68,000
68,000
476,000
476,000
57,000
70,000
44,000
57,000
70,000
44,000
131,000
131,000
297,000
148,500
473,000
473,000
503,000
503,000
100
367,000
367,000
100
100
100
122,500
122,500
175,500
175,500
304,000
304,000
100
612,500
612,500
58,000
47,500
70,000
58,000
47,500
70,000
102,000
102,000
100
100
100
100
100
100
50
88
99
100
94
100
100
90
86
96
95
100
98
100
99
96
90
98
96
CIBC, Dollarama, Shoppers Drug Mart
Lowes, Shoppers Drug Mart, Sport Chek
Fairway Market, Scotiabank, TD Canada Trust
Co-op Grocery, Co-op Liquor, TD Canada Trust
RONA
Ashley Furniture, Dollarama, Home Outfitters
Ardene, Mark’s Work Wearhouse, Marshalls,
Shoppers Drug Mart, Urban Planet
Dollarama, GoodLife Fitness, Staples, Walmart
Best Buy, Co-op Grocery, Goodlife Fitness,
Shoppers Drug Mart, Sport Chek
Capitol Theatre, GoodLife Fitness, Shoppers
Drug Mart (Fall 2018), Sobeys, Sport Chek
Dollarama, Safeway, Shoppers Drug Mart
Bank of Montreal, Dollarama, Rexall, Walmart
Canadian Tire, Cineplex, GoodLife Fitnes,
PetSmart, Sobeys
Bingeman’s (Fall 2018), Galaxy, H&M,
Hudson’s Bay, Indigo (Fall 2018)
Farm Boy, LCBO, TD Canada Trust
Swiss Chalet
Longo’s, Scotiabank, Shoppers Drug Mart
Food Basics, Rexall, Swiss Chalet
10,000
10,000
100
Royal Bank
820,000
820,000
112,000
56,000
4,920,000
4,715,500
99
97
97
Hudson’s Bay, Sport Chek, Ardene
Nations Fresh Foods, Scotiabank
Certifications:
• 1 LEED Gold • 2 LEED Silver • 1 BOMA Platinum • 2 BOMA Gold • 3 BOMA Silver • 4 BOMA Bronze • 5 BOMA Certified
97%
RETAIL OCCUPANCY
4.7M
RETAIL SF
LEF T TO RIGHT
AURORA CENTRE
AURORA, ON
ST. L AURENT
OT TAWA, ON
M O R G U A R D R E A L E S T A T E I N V E S T M E N T T R U S T
2 0 1 7 A N N U A L R E P O R T
1 9
OFFICE PORTFOLIO
AS AT DECEMBER 31, 2017
PROPERTY
CITY
PROV.
OWNERSHIP
INTEREST
(%)
TOTAL
AREA
(SF)
OWNERSHIP
AREA
(SF)
OCCU -
PANCY
(%)
TOP TENANTS
111 Dunsmuir • 2
Chancery Place • 2
505 3rd Street SW • 2
Seymour Place
7315 8th Street NE
Centre 810
Citadel West • 2
Deerport Centre • 3
Duncan Building • 3
National Bank Building
207 and 215
9th Avenue SW • 2
Petroleum Plaza • 3
Scotia Place • 2
301 Laurier Avenue
525 Coventry
Vancouver
Vancouver
Victoria
Calgary
Calgary
Calgary
Calgary
Calgary
Calgary
Calgary
Calgary
Edmonton
Edmonton
Ottawa
Ottawa
Ottawa
Ottawa
Green Valley Office Park • 3
Heritage Place • 3
St. Laurent Business Centre Ottawa
Standard Life
Time Square • 3
200 Yorkland • 3
77 Bloor Street West • 1 • 3
Place Innovation • 2
TOTAL OFFICE
Ottawa
Ottawa
Toronto
Toronto
Saint-Laurent
BC
BC
BC
AB
AB
AB
AB
AB
AB
AB
AB
AB
AB
ON
ON
ON
ON
ON
ON
ON
ON
ON
QC
100
100
100
50
100
100
100
100
100
100
100
50
20
50
100
100
50
100
50
100
100
50
50
222,000
142,500
235,500
142,000
19,500
77,500
78,500
48,500
81,000
43,500
222,000
142,500
235,500
71,000
19,500
77,500
78,500
48,500
81,000
43,500
636,500
636,500
304,000
565,000
26,000
42,500
123,000
215,000
88,000
378,000
111,000
149,500
396,000
900,000
152,000
113,000
13,000
42,500
123,000
107,500
88,000
189,000
111,000
149,500
198,000
450,000
100
100
100
75
100
92
100
84
100
100
99
99
64
19
AMEC Americas, Stantec Consulting
Province of British Columbia
Province of British Columbia
Morguard, Strike Energy, Wilmington Capital
Genesis Land Development
Cima Canada, Tektelic Communications Inc.
CH2M Hill Canada
Aerotek, Colleaux Engineering, State Farm
RCMP
National Bank of Canada
Obsidian Energy Ltd.
Alberta Infrastructure
APEGA, Duncan and Craig, Grant Thornton
Moores
100
Assent Compliance
82
64
71
98
90
90
94
Ottawa Fertility Clinic, The Ottawa Hospital
Public Services and Procurement Canada
Intact Insurance Company, RJR Innovations
Public Services and Procurement Canada
BBB Urban, Le Droit, Public Works
AG Simpson, Ferring, Investors Group
Harry Rosen, Realstar, TD Canada Trust
100
AJW Technique, Amdocs, Bombardier
5,025,000
3,392,500
93
Certifications:
• 1 LEED Gold • 2 LEED Silver • 1 BOMA Platinum • 2 BOMA Gold • 3 BOMA Silver • 4 BOMA Bronze • 5 BOMA Certified
INDUSTRIAL PORTFOLIO
AS AT DECEMBER 31, 2017
PROPERTY
1875 Leslie
2041-2151 McCowan
279 Yorkland
285 Yorkland
825 Des Érables
TOTAL INDUSTRIAL
CITY
Toronto
Toronto
Toronto
Toronto
Salaberry-de-
Valleyfield
OWNERSHIP
INTEREST
(%)
PROV.
TOTAL
AREA
(SF)
OWNERSHIP
AREA
(SF)
OCCU -
PANCY
(%)
TOP TENANTS
ON
ON
ON
ON
QC
100
100
100
100
50
52,000
52,000
196,500
196,500
18,000
25,000
18,000
25,000
485,000
242,500
100
95
100
100
100
Body and Soul Fitness, Goose & Firkin
Canadian Standard Floor
Loblaw Properties Ltd.
Mitchell Partnership
Diageo
776,500
534,000
98
TOTAL
10,721,500
8,642,000
93%
98%
3.4M
OFFICE OCCUPANCY
INDUSTRIAL OCCUPANCY
OFFICE SF
0.5M
INDUSTRIAL SF
2 0 M O R G U A R D R E A L E S T A T E I N V E S T M E N T T R U S T
2 0 1 7 A N N U A L R E P O R T
m
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CORPORATE INFORMATION
2 0 1 7 H I G H L I G H T S
MORGUARD REAL ESTATE INVESTMENT TRUST AT A GLANCE
Morguard Real Estate Investment Trust (the Trust) is a closed-end trust listed on the Toronto Stock Exchange (TSX) under the symbol MRT.UN. As of December 31,
2017, the Trust’s total assets were $2.9 billion. The Trust’s mandate is to accumulate a Canadian portfolio of high-quality retail, office and industrial income-producing
properties and manage the portfolio proactively to generate a stable and increasing cash flow, providing steady, dependable returns for unitholders over time.
With a diversified real estate portfolio of 49 commercial properties located in six Canadian provinces, the Trust owns approximately 8.6 million square feet of gross
leasable area. The Trust’s real estate portfolio includes well-located office properties in major urban centres, large enclosed regional centres that are dominant in
their respective markets, service-focused community strip centres and a selection of industrial properties.
TRUSTEES
FRASER R. BERRIL 1, 2, 3
President
Fragin Holdings Limited
PAUL F. COBB 1, 2, 3
Corporate Director
DAVID A. KING
K. RAI SAHI
Chairman and
Chief Executive Officer
Morguard Corporation
MICHAEL A.J. CATFORD1, 2, 3
Corporate Director
Real Estate Consultant
ANTONY K. STEPHENS 1, 2, 3
EDWARD C. KRESS 1, 2, 3
Corporate Director
TIMOTHY J. WALKER 1, 3
Corporate Director
1
Independent Trustee
2 Audit Committee
3
Compensation and
Governance Committee
OFFICERS
DAVID A. KING
Chairman
K. RAI SAHI
President and
Chief Executive Officer
Corporate Director
Brookfield Group
PAMELA MCLEAN
Chief Financial Officer
BEVERLEY G. FLYNN
Vice President,
General Counsel
and Secretary
INVESTOR INFORMATION
HEAD OFFICE
Morguard Real Estate
Investment Trust
55 City Centre Drive, Suite 1000
Mississauga, ON
L5B 1M3
T 905-281-4800 or
1-800-928-6255
info@morguard.com
LISTING
Toronto Stock Exchange
SYMBOL
MRT.UN
MRT.DB
ELIGIBILIT Y
RRSP
RRIF
DPSP
RPP
TFSA
AUDITORS
Ernst & Young LLP
PRINCIPAL BANKERS
Bank of Montreal,
Toronto-Dominion Bank
TRANSFER AGENT
Computershare Trust Company
1-800-564-6253
www.computershare.com
PAUL MIATELLO
Vice President
ROBERT D. WRIGHT
Vice President
INVESTOR RELATIONS
Visit our website at
www.morguard.com or
view our filings on SEDAR
at www.sedar.com.
ANNUAL UNITHOLDER
MEETING
Wednesday May 9, 2018
at 9:45 a.m.
Rattlesnake Point Golf Club,
5407 Regional Road 25,
Milton, ON
L9T 2X5
FOR ADDITIONAL INFORMATION,
CONTACT
Beverley G. Flynn
Vice President, General Counsel
and Secretary
T 905-281-4800
info@morguard.com
Pamela McLean
Chief Financial Officer
T 905-281-4800
info@morguard.com
The selected annual financial information in the 2017 Annual Report highlights certain key metrics for the Trust. As a result, this report should be read in conjunction with the Trust’s
Consolidated Financial Statements for the year ended December 31, 2017, related Management’s Discussion and Analysis (“MD&A”) and the Annual Information Form (“AIF”).
These documents are available on the Trust’s website at www.morguard.com. All continuous disclosure documents required by securities regulators are also filed on the System for
Electronic Document Analysis and Retrieval (“SEDAR”) and can be accessed electronically at www.sedar.com.
M O R G U A R D R E A L E S T A T E I N V E S T M E N T T R U S T
2 0 1 7 A N N U A L R E P O R T
4
M O RGUA RD RE A L ESTAT E
IN V EST MEN T T RUST
55 CITY CENTRE DRIVE
SUITE 1000
MISSISSAUGA, ON
L5B 1M3
905-281-4800
MORGUARD.COM