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RBC Dominion Securities Inc.

INDUSTRY | COMMENT
Neil Downey, CA, CFA (Analyst) JANUARY 12, 2011
(416) 842-7835; neil.downey@rbccm.com

Tyler Bos (Associate)


Real Estate Investment Trusts
(416) 842-4123; tyler.bos@rbccm.com Q1-2011 REIT Quarterly (Summary)
Michael Markidis, CFA (Associate Analyst) Recommendation
(416) 842-7897; michael.markidis@rbccm.com
From a universe of 28 TSX-listed REITs, we have seven “Outperforms”:
Calloway REIT, CAP REIT, CREIT, Extendicare REIT, H&R REIT,
Morguard REIT and Primaris Retail REIT. Also rated Outperform and
included in this report are Brookfield Office Properties, First Capital Realty,
and Killam Properties Inc.

Highlights
• Second Consecutive Year Of Outperformance – The S&P/TSX Capped
REIT Index’s 2010 total return was +23% (following 2009’s +55%). Hence,
the REIT Index outpaced the TSX Index (+18%), 10-year GoCs (+7%) and
Global REITs (+20%). Owing largely to a weak Q4/10 (-2%) the REIT
Index failed to keep pace with U.S. REITs (+29%) and the S&P/TSX
Income Trust Index (delivered an exceptional +27% in its final year).
• Fundamentals In Recovery Mode – Our outlook for each major property
sector in a “sound bite”: office – turned sooner/stronger than expected;
retail – interesting set-up: resilient performance, strong landlords and
hungry new entrants, but a stretched consumer; industrial – a soft cycle,
but now turning up; multi-res – home ownership peaks and markets cool,
while apartments prove stable and countercyclical; and, lodging – a slow
turn, but now firmly in recovery, still a long road to former peak profits.
• Earnings & Distributions – Canada’s relative stability amid the downturn
inherently leaves less “spring” in the recovery cycle. “Trend-line” earnings
were -2% in 2009, and we expect the same for 2010. We forecast +4% in
each of 2011-2012. Our growth forecast is one-half that expected from U.S.
REITs, which were hit much harder through the downturn. With earnings
growth on the horizon, we believe the cycle of distribution cuts has ended.
Yet, in an effort to push payout ratios to more conservative levels, we only
see modest 2011 increases from a select few.
• Lots Of Positives; A Few Cautions – In 2011, there’s lots in the sector’s
favour, including: i) low interest rates; ii) demographically-derived income
demand; iii) improving fundamentals, iv) a return to earnings growth; v)
good access to reasonably-priced capital; and, vi) an acquisition
environment which may continue to offer opportunities. That said,
valuations have rebounded tremendously, and we believe cap rate
compression has largely run its course. It’s challenging to identify factors
that could drive material upside surprises to valuations/earnings, while
competitive forces may limit meaningful growth-by-acquisition accretion.
Debt and equity are free flowing and attractively priced, yet 2008-2009
reminds us this can change quickly.
• A Conservative Bias; Expect “Singles” And “Doubles” – We see 2011 as
a year in which listed property reverts to delivering what it is truly designed
to do: namely a high and stable cash yield, with the benefit of some tax
deferral, along with capital growth potential which should meet or exceed
the rate of inflation over time.

Priced as of prior trading day's market close, EST (unless otherwise noted).
All values in CAD unless otherwise noted.
For Required Non-U.S. Analyst and Conflicts Disclosures, see page 12.
January 12, 2011 Real Estate Investment Trusts

Executive Summary And Recommendations


We are pleased to provide you with the Executive Summary of our Q1 2011 REIT Quarterly Review and Sector Outlook. This
represents our 52nd Edition of the REIT Quarterly. As has been the tradition, the first-quarter publication contains an overview of
Canadian property market fundamentals and serves as our annual outlook for the Canadian listed property sector. We expect the
comprehensive report will be available in several days. In the interim, the key highlights and recommendations included in the Q1/10
Quarterly are:

To Start: Five Predictions For 2011


To kick-off our report, let’s start with five predictions for 2011 (in no particular order):
1. 2011 will finish with more TSX-listed REITs than it begins with – At the outset of 2011 there were 28 TSX-listed REITs. We
do not see a lot of opportunity for M&A to reduce this number, at least not in the near-term. We do see the possibility of several
IPOs this year, as well as the graduation of one or more listings from the TSX-Venture exchange.
2. Equity raising activity will decline – 2010 deal volume totalled $5.1 billion, the biggest year on record since 2007. We think
transaction markets will remain active and one or more IPOs could prove a wildcard in the capital raising figures. Overall
however we think it will be difficult to match 2010’s a deal-a-week pace (56 transactions in total)
3. Target will finally come to Canada – The penetration of new entrant U.S. and international retailers into Canada shows no signs
of slowing. And, we believe 2011 could be the year in which Target finally comes to Canada, possibly leading a U.S. retailer
consortium (think Target, Kohl’s, Wal-Mart, others) into a deal to step into the Zellers footprint.
4. A REIT will finally issue a preferred unit – We believe one or more REITs may attempt to issue this once talked about, yet not
yet tested pseudo-equity, pseudo-perpetual-debt-like instrument. Let’s see how the market digests it…
5. CMBS origination will return to Canada – Having taken a 3 year hiatus, yet now also carrying an enviable track record of very
low delinquencies, we think the conditions could be right for several “brand-name”, financially strong sponsors (i.e., large cap
REITs and REOCs) to work together to get this market originating product once again.

REITs Post A Second Consecutive Year Of Outperformance


The S&P/TSX Capped REIT Index appreciated by 15.1% in 2010 and generated a total return of 22.6%. This was on the heels of a
whopping +55.3% total return in 2009. Thus, for the second year in a row, returns from REITs materially exceeded the broader
market, whereby the S&P/TSX Composite Index delivered 17.6% and 35.1% (total return) in 2010 and 2009 respectively. The REIT
Index also strongly outperformed the 6.9% total return from 10-year Canada bonds, but it could not keep pace with the S&P/TSX
Income Trust Index, which delivered an exceptional 26.7% total return in its final year of existence.

North American REITs Also Outperform Global Peers


The MSCI U.S. REIT Index, recorded a 2010 total return of 28.9%, comfortably ahead of the return from Canadian REITs. This
performance gap was all derived via a Q4/10 negative return of -2.0% from the REIT Index coupled with a strong Q4/10 rally of 7.7%
by the MSCI U.S. REIT Index. For the year, North American REITs generally outperformed their global peers as the EPRA/NAREIT
Global Index total return of 20.4% (in U.S. dollar terms) was held back by the relative underperformance of Asian (17.2% total return)
and European (9.2% total return) REITs.

Still Not Back To Former Price Highs; Income Is A Powerful Compounder


Despite the substantial and widespread rebound in values through 2009 and 2010, REIT price indices remain notably below their cycle
peaks. The S&P/TSX Capped REIT Index’s December 31, 2010 value was -25.3% from its February 2007 peak on a price basis,
although on a total return basis the REIT Index had eclipsed its former highs by a slight 0.6%. The MSCI U.S. REIT Index closed
2010 at a level that was still -37.4% from its January 2007 high (and, even on a total return basis at year-end it remained -21.3% off
the former peak). The EPRA/NAREIT Global Index finished 2010 -37.2% below its former February 2007 top, and on a total return
basis, it too remained -25.0% from the old highs.

Property Market Fundamentals: In Recovery Mode


Over the last two years, our opening remarks on property market fundamentals have carried the titles: Staring Into A Cyclical
Downturn – Q1/09 REIT Quarterly and Looking Over The Valley – Q1/10 REIT Quarterly. With market fundamentals largely
unfolding as one would expect through the economic cycle, this year’s section is entitled In Recovery Mode.
And so, in five separate sections within this edition of the Quarterly we review the outlook for supply/demand, rents and occupancies
for the major property classes. Positive factors include supply-side dynamics (i.e., new development) which are muted, pretty much
across the board. In our view, the risks are largely with the still fragile state of the consumer in Canada and the U.S., and all the
knock-on effects that could come from any unexpected future income or spending retrenchment.

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January 12, 2011 Real Estate Investment Trusts

Encapsulating the outlook for each major property class in a “sound bite”: Office – turned sooner and stronger than expected in 2010,
with further recovery ahead; Retail – an interesting set-up, with resilient performance, strong landlords and hungry new entrants, but
a stretched consumer; Industrial – it was a soft cycle, but its now turning up; Multi-res – home ownership peaks and markets cool,
while apartments prove stable and countercyclical; and, Lodging – a slow turn, is now firmly in recovery, yet the road to prior peak
profitability will prove to be long.
With Canadian markets showing greater resiliency than their U.S. counterparts through the 2009-2010 downturn (property market
fundamentals lag the economy), it is now likely that the rate of improvement north of the border will lag that of key U.S. property
markets not just in 2011, but possibly for the next several years. In short, the relative stability in Canada has simply rendered much
less “spring” in the potential occupancy and rental recovery story.

Equity Capital Raising Apex; Reduced Volume Likely In 2011


The TSX-listed REITs entered 2010 with a total equity market capitalization of $22.0 billion. By year-end, this figure had increased
by +$9.4 billion, or +43%, to $31.4 billion. Based upon the number of completed financings, 2010 was the most active year on record,
with Canadian REITs and REOCs completing 56 equity and equity-related offerings. In total, these transactions raised gross proceeds
of $5.1 billion. This figure was materially ahead of the $3.6 billion raised in 2009 and the anemic $1.3 billion raised in 2008. And,
longer term data suggests the 2010 activity was only surpassed by the $5.8 billion (38 offerings) of 1997.
With the cost of equity capital declining through 2010, the $553 million of convertible debenture financings represented a
comparatively small component (12%) of total activity. This compares to a longer-term average ratio of approximately 20%.
We do not believe 2011’s activity will match 2010’s. Having said this, we believe transaction markets will remain liquid, and that
additional IPOs are a possibility. Hence we expect equity and equity-related capital raising activity may continue to exceed the
longer-term annual average of approximately $2.5 billion.
Exhibit 1: Historical Annual Equity And Equity Related Capital Issuance

$6B 60

45
$4B

30

$2B
15

$0B 0
1996 1998 2000 2002 2004 2006 2008 2010

Equity Convertible Debentures Other # Of Deals

Source: RBC Capital Markets

Debt: Widely Available; Nominal Cost Very Attractive


The ownership of real estate is a capital-intensive endeavour and, despite several outliers, listed REITs and REOCs generally employ
leverage in the 40% to 60% range. Thus, continued access to debt capital is essential to the viability of the industry. With sovereign
debt problems in Europe and massive fiscal imbalances (and ballooning debt problems) in the U.S at the Municipal, State and Federal
government levels, we remain just a bit on edge. After all, the availability of debt is currently very good. Yet the events of 2008-2009
should still serve as a painful reminder that access to, and the cost of both debt and equity capital can change quickly.

Balance Sheet Lenders: The Mortgage Market


Balance sheet lenders continued to be the principal providers of real estate debt through 2010. Loan to value (“LTV”) ratios returned
to the historical norm of around 65% early-on in 2010. This was up from 50% in the midst of the 2008-2009 global financial crisis
(that is… if a borrower was able to secure a loan at all!) and a figure which we believe was more like 60% at the end of 2009. The
indicative spread on a five-year, fixed-rate commercial mortgage was quoted on December 31, 2010 at +180bps, thus offering an all-in

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cost of financing of approximately 4.2%. We note the year-end 2010 mortgage spread was spot-on the historical average. Yet, with a
43bps decline in the loan spread, combined with the 35bps decline in the five-year GOC benchmark, these had the effect of reducing
the nominal cost of a commercial mortgage by -78bps (from 5.0%) from the start of the year. Comparatively, the all-in cost of debt
financing was only better in Q3/10, when it bottomed at 3.8%. We expect that loan spreads will remain unchanged over the course of
2011.

Large Loan Volume Could Accelerate


The large loan market also showed continued improvement in 2010 (with average LTVs expanding from ~55% in 2009 to ~60%, and
spreads narrowing to an average of +190bps from +325bps). Interestingly, last year’s deal volume appeared to be only half of 2009’s,
but we believe this was simply due to the “chunky” nature of the market. For 2011, we see a very good pipeline for the large loan
market and we believe that quality offerings could allow transaction volumes to exceed the $1.5 billion mark (more than 2x 2010
volume).

2011 Is The Year For A Canadian CMBS Comeback


Over the past two years, Canadian CMBS versus U.S. CMBS delinquencies have been a tremendous study in contrasts. Recent data
places Canadian delinquencies at 0.6% versus a whopping 8% in the United States. Despite this performance, the Canadian market
place has been closed to CMBS originations for three years. In the U.S., market momentum continued to build throughout 2010, with
US$12 billion of origination volume (versus US$3 billion in 2009). We believe the motivation of lenders and borrowers alike (the
debt securitization process can have benefits for both), along with the outlook for improving property market fundamentals should be
enough to allow for the re-start of the Canadian CMBS market in 2011. Conservative underwriting standards, transparent structures
and “brand name” sponsorship, including contributions to the property pools by one or more of the largest and most credible REITs
and REOCS (the likes of RioCan REIT, Calloway REIT, CREIT, First Capital Realty, H&R REIT all come to mind) will be key
to restarting originations.

Real Estate Unsecured Debt Has Now Been Cycle-Tested!


Yield spreads on real estate senior unsecured debt narrowed significantly in the latter half of 2009, and this served as a catalyst for a
new cycle of issuance in 2010. In this regard, unsecured debt issuance totalled $1.4 billion and $1.2 billion in 2010 and 2009,
respectively. Listed REITs and REOCs represented $1.2 billion of last year’s activity (at an average spread of approximately
+250bps), compared to $0.9 billion of activity (at an average spread of +600bps in 2009).
Since the beginning of the millennium, Canadian real estate unsecured debt issuance has totalled $9.1 billion ($6.3 billion by REITs
and REOCs, and $2.8 billion by pension fund entities). Despite the 2008-2009 credit storm and recession, the sector has emerged with
not even so much as a single credit downgrade, much less a covenant breach or default Hence, we believe that unsecured real estate
debt has now been a cycle-tested and proven success story.
Today, we believe existing issuers have good access to senior unsecured debt. Nominal yields are slightly lower than debentures
originated in 2006/2007, despite the fact that spreads are nearly two times as wide. Provided that market conditions remain favourable
we would expect 2011 issuance to at least equal the maturity schedule of approximately $1.2 billion ($400 million from
REITs/REOCs, and $800 million from pension funds). On top of this, we believe it is reasonable to expect as much as $1 billion of
new issuance for REITs and REOCs.

Balance Sheets De-Lever; Confidence Restarts Offensive Strategies And Allows Liquidity To Drawdown
Confidence in operations and access to capital allowed the sector to raise capital for investment (acquisition and development)
purposes in 2010. This is in contrast to late 2009, which financing was completed primarily for the purposes of strengthening balance
sheets and improving corporate liquidity. We estimate the group currently carries $3.6 billion of liquidity (consisting of $1.2 billion
of cash and $2.4 billion of available/undrawn lines of credit). Relative to $46 billion in total debt, this places the estimated liquidity
ratio at 8% on a weighted average basis, down materially from 13% one-year ago. This 8% ratio is back in line with pre-crisis figures.

Cap Rates Compress; We Think The Cycle Has Largely Run Its Course
Significant equity capital raising and extremely receptive (and low cost) debt have been the perfect recipe for accelerated transaction
volumes and continued cap rate compression. While the final numbers have yet to be tallied, we expect that 2010 investment market
transaction activity could reach $18 billion, up some +40% from 2009’s $13 billion and in-line with the 10-year historical average. In
2011, we expect trading velocity will remain healthy and we believe the volumes could rise +10% or so, to the $20 billion mark.
An investment trends survey conducted quarterly by the Altus Group, a leading independent real estate consultancy, shows that cap
rates generally ended 2010 at levels which were about 75 basis points lower than at the start of the year. The year-over-year change in
yields from the Q4/09 survey to the Q4/10 survey, by category, registered: CBD Office (-70ps, to 6.1%), Retail – strip (-75bps
estimated, to 6.9%), Retail – mall (-70bps, to 5.7% ), Industrial (-85ps, to 7.0%), and Apartments (+/-0bps, at 6.1%).

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January 12, 2011 Real Estate Investment Trusts

Having taken a bit of a backseat to the well-funded and highly motivated REITs and REOCs through 2010, we believe several mid-
size pension funds will also be very competitive bidders for investment property offerings in 2011. Directionally, we still believe the
“weight of money” should hold property values firm, with the potential for a still modestly downward bias in yields. And, for most
listed REITs and REOCs, meaningful accretion from growth-by-acquisition strategies may prove difficult to achieve. Despite the
aforementioned, we also believe the 18-month cap rate compression cycle (by our estimation) has largely run its course. If this view
becomes more widespread, it could be a catalyst for bringing a new wave of vendors to the market.

LTVs Markedly Improve; Cash Flow Coverage Improvement More Gradual


Collectively, since the outset of 2009, Canadian REIT prices have increased by close to 65%. The strong rebound in unit prices (along
with some material help in the form of equity issuance) has dramatically improved the industry average D/EV ratio from 66% at the
beginning of 2009, to 58% at the beginning of 2010, to 52% currently. The reduction in the average LTV ratio has also been dramatic,
although slightly less impressive. We estimate the sector-average LTV is now 53%, down 6 percentage points over the course of the
past year and 10 percentage points from the March 2009 high of 63%. By way of reference, in Q1/07, peak property values drove the
sector-average LTV to a long-term low of 45%. Based upon continued high cash distribution rates, we would still favour further
gradual and modest deleveraging for Canadian REITs over time.
The recent improvement in cash flow coverage ratios has been less dramatic than the D/EV and LTV figures. History shows a modest
and gradual downward trend in group-average EBITDA/interest from 2004’s 2.7x to 2009’s 2.3x. Reflecting equity issuance and
financial deleveraging, interest rate roll down, and modest organic growth, we expect group-average EBITDA/interest coverage to
uptick to 2.4x for 2010, with a stable to possibly modestly upward bias thereafter.
More IPOs Possible; Not Expecting M&A Activity, At Least Not In H1/11
There were three REIT and one REOC IPOs in 2010. On a fully-distributed value, these new companies carried an initial equity
market capitalization of $1.1 billion, while the public portion of the equity raises totalled $0.8 billion. If our views on yield
compression (or, more specifically, a material lack thereof) are shared by portfolio owners, this could spur several to consider the IPO-
route in 2011. Moreover, if our expectation with respect to a reasonably active roster of investment property offerings proves
accurate, then REITs should also have plenty of potential investment opportunities to review, hence reducing any great impetus to
pursue merger and acquisition activity, at least in the near-term.

Earnings Growth: Things Are Looking Up (Again)


Q3/10 trend-line earnings growth registered +3%, marking the return to positive territory after suffering four consecutive quarterly
declines. While we expect some moderation in Q4/10 with our trend-line earnings growth forecast for the quarter at a modestly
positive at +1%. For full-year 2010 we expect a decline of -2%, owing primarily to the weakness in H1/10. For 2011 and 2012, we
expect interest savings and improved operating results to drive annual growth of +4%. Ultimately the 2011 transition to IFRS (from
GAAP in 2010) could throw a wrench into our comparables. We intend to adjust as best possible in order to provide a reasonable
picture of like-for-like earnings.
Exhibit 2: “Trend-Line” Earnings Growth (1999 To 2009 And 2010E To 2012E)

8%
8%
6%
6%
5%

4% 4% 4% 4%
4% 3%

1%
1%
1%

0%

-2%
-2%
-4%
1999 2001 2003 2005 2007 2009 2011E

Note: Excludes lodging REITs. Source: RBC Capital Markets estimates

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January 12, 2011 Real Estate Investment Trusts

Distribution Outlook: The Cycle Of Cuts Has Come And Gone; Increases Will Be Modest And From The Minority In
2011
2010 saw four distribution increases (including two from H&R REIT’s schedule of “intended” distribution increases) and no
distribution cuts. This was on the heels of 2009’s one-to-eight ratio, which was the worst on record. The average AFFO payout ratio
now stands at approximately 91% of forward 12-month estimate basis. With the return to positive earnings growth in H2/10, we
believe that the cycle of distribution cuts has now run its course. Looking forward to 2011 and 2012, we believe that positive earnings
growth could provide for a modest number of distribution increases from less than a half-dozen entities. In this regard, we believe that
many REITs and REOCs could (and should) seek to dial-down their AFFO payout ratios to levels which inherently provide a greater
“margin of safety” for equity holders.

Investment Recommendations And Outlook: Back To Hitting Investment “Singles” And “Doubles” In
2011
In many ways, we believe the environment remains very favourable for publicly traded real estate. Property market fundamentals are
in recovery mode, interest rates remain very low, there is ample access to both equity and debt capital, and investor demographics play
positively for the sector today (even more so, now that the sun has set on the income trust vehicle) and into the future. Having said
this, we are cognizant of the reality that two consecutive years of REIT outperformance have raised valuations materially, and that
interest rates can go up (as well as down). With this in mind we believe that 2011 will likely be a year in which listed REITs and
REOCs revert to delivering to investors what they were designed to do: namely a high and stable cash yield, with the benefit of some
tax deferral, along with capital growth potential which should meet or exceed the rate of inflation over time. To sum it up, we see
2011 as a year where the sector is back to hitting investment “singles and doubles”, instead of the “triples and homers” of 2009-2010.

REITs Close Out 2010 At A +9% Premium To NAV


Our estimates place the group-average premium to NAV at +9% as of December 31, 2010. This data point represents solid
appreciation in unit prices through 2010, along with rising NAVs on the back of cap rate compression. Based upon some 15 years of
historical data, our estimates show a valuation peak in September 1997 at a +28% premium to NAV and a subsequent cyclical
valuation trough in February 2000 at a -15% discount to NAV. In the most recent cycle, valuation peaks were achieved in February
2004 and February 2007 at NAV premiums of +21% and +17%, respectively. The current cycle’s valuation trough was recent and
deep, at a -27% discount to NAV in November 2008. Since we began tracking this valuation metric in the mid-to-late 1990s, Canadian
REITs have traded on average at 104% of NAV, while the trailing 12-month P/NAV has averaged 109%.
Exhibit 3: Group Average Premium/(Discount) To Estimated NAV (Jan-1996 to Dec-2010)

30%
28%

20% 21%
17% 13%

10% 9%

0%

(10%) -11%
-15% -13%
-17%
(20%)

-27%
(30%)
Jan-96 Jan-98 Jan-00 Jan-02 Jan-04 Jan-06 Jan-08 Jan-10

Source: RBC Capital Markets and Thomson One

Steady Cap-Rate Compression Drives Notable NAV Growth


At the outset of 2010, we had forecast that modest cap rate compression would likely offset modest NOI erosion, thus resulting in
average NAV/unit growth within the -2% to +4% range. For the second consecutive year, yield compression exceeded our
expectations, thus driving +16% average capital value growth (on top of +9% in 2009). Turning to 2011, we expect a return to

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January 12, 2011 Real Estate Investment Trusts

slightly positive same property NOI growth and the prospect for very modest yield compression to drive average NAV/unit growth of
+5%.

Buoyed By Interest Rates, AFFO Multiples Climb Well-Through The Long-Term Average; Yield Spreads Remain Close
To Norms
On various earnings-based measures, sector valuations appear to approximate fair value. The group’s 6.4% AFFO yield is now 150bps
below the long-term average. Alternatively stated, the forward 12-month AFFO multiple of 15.6x is 3.0x above the long-term
historical average. Examining yield spreads relative to both the risk-free rate and other risky assets, we see that the group offers risk
premiums, which remain in-line with the long-term average historical spread over 10-year Government of Canada bonds, but they are
now some 45bps below the 85bps historical average yield spread over an index of corporate bonds. Lastly, as of the pricing date of
this report, the group is trading at a +9% premium to NAV, which is approaching the upper end of our “band of fair value” and is
modestly above the long-term average NAV premium of +4%. On a one-year forward basis, our expectations for mid-single digit
NAV growth, should reduce this premium down to the 4% long-term average. Current unit prices equate to an average implied
property yield of approximately 7.2%.
Exhibit 4 provides a simplified recap of REIT valuations as of December 31, 2005 through 2009, and as of the January 11, 2011
pricing date of this report.
Exhibit 4: Industry Valuation Recap – Year-End 2005 Through 2010 And Current
Metric 2005 2006 2007 2008 2009 2010 LTA1 Current*
AFFO Yield2 6.3% 5.7% 6.4% 9.7% 7.3% 6.4% 7.9% 6.4%
Premium Vs. 10Y GOC (bps)2 231 158 240 703 374 331 336 331
Premium Vs. Moody’s BAA -2 -55 -37 175 99 45 85 36
(bps)2

Price/AFFO2 15.9x 17.7x 15.7x 10.3x 13.6x 15.6x 12.6x 15.6x


NAV Premium/(Discount)3 11% 12% -6% -16% 8% 9% 4% 9%

Notes: 1Long-Term Average is derived from approximately 15-years of historical data. 2Metric derived via market-cap weighted average basis. 3Metric
derived via simple average basis. Current as at market close EST on January 11, 2011. Source: RBC Capital Markets

Investment Strategy Wrap-Up: Lots Of Positives Along With A Few Balanced And Cautionary Thoughts
There are lots of variables working in the sector’s favour, including: i) low interest rates; ii) demographically-derived demand for
income; iii) improving property market fundamentals, iv) an apparent return to earnings growth in 2011; v) good access to reasonably
priced capital; vi) the ongoing effect of a potentially positive funds flow phenomenon (now that the sun has set on income trusts); and
vii) an acquisition environment which may continue to offer capital investment opportunities. Having said this, both direct and listed
property valuations have rebounded tremendously from 2009’s cyclical lows. It is also somewhat challenging to identify factors that
could drive further material valuation or earnings-related upside surprises for the sector.
We also suspect the now 18-month long cycle of cap rate compression has largely run its course. And, for most listed REITs and
REOCs, meaningful accretion from growth-by-acquisition strategies may also prove difficult to achieve. While credit markets appear
to be free-flowing, and at yield spreads (and nominal yields) which are attractive to borrowers, the events of 2008-2009 still serve as a
painful reminder that access to, and the cost of, debt and equity capital can change quickly.

We Have A Conservative Bias And Believe Investors Should Think About “Singles” & “Doubles” For 2011
In consideration of these factors, we are generally hesitant to make investment “bets” which are dependent upon material cap-rate
compression or externally-derived earnings growth. Instead (and keeping valuation considerations in mind), we generally favour
REITs and REOCs that have lower payouts, evidently more self-sustaining business models, and broadly less reliance upon debt and
equity capital markets
Overall, we believe that REITs and REOCs will deliver acceptable risk-adjusted returns to investors through 2011. In our opinion, the
sector will be back to delivering what it is sustainably designed to do. Namely, a generous (averaging ~6% currently), partially tax-
advantaged cash yield (paid monthly), coupled with the potential for long-term income growth and value appreciation that meets or
exceeds the rate of inflation. Thus, a 10% total return might be a reasonable sector expectation for 2011.
In short, we this is more likely to be a year in which investors should reasonably expect REITs to deliver “singles” and “doubles”, as
opposed to knock’em out of the park home runs.
Exhibit 5 on the next page summarizes our list of ten Outperform-rated entities and provides a brief investment thesis for each.

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January 12, 2011 Real Estate Investment Trusts

Exhibit 5: Investment Recommendations And Summary


REIT Rating Risk Price Yield Target Target Multiple Investment Thesis and Comments

Brookfield O Avg $17.36 3.2% $18.75 20x 2012E AFFO Owns, develops and manages premier office properties in high-growth and
Properties high-barrier to entry markets. Business model adds value through leasing,
(US$) development and capital recycling. In-progress transformation into a global
office ‘pure play’ could lead to a trading multiple expansion. Multiple capital
access points provide BPO with many levers to manage its financial flexibility.

Calloway REIT O Avg $24.15 6.4% $25.75 16x 2012E AFFO Owner of a 22MM sf portfolio of primarily new-format, Wal-Mart-anchored
retail centres. Newer assets and long-lease terms should prove defensive, as
should the portfolio’s focus upon ‘value-oriented’ retail in what is still a
tentative consumer / economic recovery. Financial leverage has been reduced
over the past year, which we see as a positive event.

Canadian O Avg $17.29 6.2% $19.00 15.5x 2012E AFFO Integrated owner and manager of a national portfolio of 27,000 residential
Apartment rental apartments. The sector tends to be somewhat countercyclical to the
Properties REIT housing market, which is now cooling after a number of “hot” years. CAP REIT
(“CAP REIT”) reasonably raised fresh equity which we see as an important de-leveraging
move which gives us confidence in the REIT’s ability to fund substantial capital
improvements over the next 4 years and continue with its tuck-in acquisition
program. Capital and operating strategies meanwhile are driving good organic
growth and we believe the units carry a reasonable valuation.

Canadian REIT O Avg $31.71 4.4% $35.00 16.5x 2012E AFFO High quality, diversified portfolio (both by geography and property-type).
(CREIT) Strong, conservative management team. Low AFFO payout ratio. Low financial
leverage. One of the longest track records of any REIT. Several headwinds in
2009-2010 (industrial and office vacancy erosion; dilution from un-deployed
equity issuance and asset sales) should turn to modest tailwinds in 2011+

Extendicare O AA $9.63 8.7% $11.00 11x 2012E AFFO A large-scale, efficient owner/operator in the needs-driven nursing home
REIT industry. Long-term funding uncertainties and substantial operating and
financial leverage make the units suitable only for the more risk-tolerant.
Modest valuation and attractive cash yield offer interesting total return
potential. Even a small improvement in investor sentiment (which could come
if occupancy begins to improve) could lift the current valuation, thus leading
to potential outsized returns.

First Capital O Avg $15.11 5.3% $16.25 17.5x 2012E AFFO Focused on necessity-based, every-day retail real estate (shopping centres
Realty anchored with food and drug stores, and purveyors of everyday necessities).
Should be a defensive business. Offers an interesting income + value-add
business model, which we expect over time should allow FCR to generate
slightly higher NAV growth than that of the average REIT.

H&R REIT O Avg $19.75 4.6% $22.00 15.5x 2012E AFFO High quality portfolio consisting of primarily long-term triple net leases. Offers
highly predictable cash flows, with contractual rent steps to assist in inflation
protection. Construction of ‘The Bow’ is on-budget, and major sources of
funding have been secured. Low AFFO payout with good visibility in
distribution increases over the next 12+ months, and, we believe, lots of room
to for increases thereafter. Low payout currently offers reasonable earnings
retention and NAV/unit growth. A reasonably valued, total return story in our
view.

Killam O Avg $10.49 5.3% $10.75 16x 2012E AFFO A small-cap REOC with an attractive, stable dividend yield. Operational
Properties outlook seems to be generally stable and capable of generating modest
AFFO/share growth. 2010 acquisitions were $115 million (expanding the
apartment portfolio into ON) and a similar figure is likely for 2011.

Morguard REIT O Avg $14.69 6.1% $15.25 14.5x 2012E AFFO An attractively valued REIT that has substantially improved its asset quality,
trading liquidity (greater float) and reduced its leverage over the past several
years. The business is managed in a risk-averse manner. The stock seems
completely absent any sort of catalyst, yet scores well on stability/reliability.

Primaris Retail O Avg $19.45 6.3% $20.75 16.75x 2012E Fully-internalized platform has been in place for more than a year and appears
REIT AFFO to be operating seamlessly. Internalization should lead to enhanced ‘franchise
value’ over time in the eyes of investors. Late 2009/2010 acquisitions
(Sunridge Mall, Woodgrove Centre and Cataraqui) have improved portfolio
quality while deploying the balance sheet more appropriately, thus allowing
for a better display of ‘earnings power’ per unit in 2011. Current challenge is
the high price (low cap rates) at which malls have recently transacted (~6%
cap rate on EMTC). But, perhaps this simply means Primaris’ units are even
more attractively valued than we appreciate.

Stock Rating Legend: TP – Top Pick, O – Outperform, SP – Sector Perform, U – Underperform.


Risk Qualifier Legend: Avg – Average, AA – Above Average, Spec – Speculative.
Source: RBC Capital Markets

8
January 12, 2011 Real Estate Investment Trusts
Canadian REITs And REOCs – Valuation Table Neil Downey, CA, CFA (416) 842-7835
Page 1 of 3

Units Mkt.
Unit 52 Week O/S Cap Cash Distributions Current Payout Funds From Operations/Unit Adjusted FFO/Unit3
1 2
Property Sector Symbol Price Target Rating Risk High Low MM $MM Run-Rate 10 11E Yield Ratio 09 10E 11E 12E 09 10E 11E 12E

Multi-Unit Residential
Boardwalk REIT BEI.un $42.08 $44.00 SP Avg $47.49 $36.50 52.6 2,212 $1.80 $2.30 $1.84 4.3% 82% $2.51 $2.43 $2.52 $2.69 $2.20 $2.12 $2.21 $2.38
CAP REIT CAR.un $17.29 $19.00 O Avg $18.38 $11.02 76.7 1,325 $1.08 $1.08 $1.08 6.2% 91% $1.26 $1.36 $1.33 $1.38 $1.08 $1.20 $1.18 $1.24
Killam Properties Inc. KMP $10.49 $10.75 O Avg $10.92 $7.40 44.9 471 $0.56 $0.56 $0.56 5.3% 89% $0.73 $0.74 $0.78 $0.81 $0.55 $0.62 $0.63 $0.67
Northern Property NPR.un $28.74 $28.50 SP Avg $30.50 $21.21 27.1 779 $1.53 $1.50 $1.54 5.3% 80% $2.19 $2.21 $2.29 $2.35 $1.80 $1.82 $1.91 $1.96
4 4 4
TransGlobe Apartment REIT TGA.un $10.34 Restricted -R- -R- $10.96 $8.80 30.0 310 $0.75 $0.47 -R- 7.3% -R- N/A -R- -R- -R- N/A -R- -R- -R-
5.7% 85%

Lodging
InnVest REIT INN.un $6.97 $7.00 SP AA $7.32 $5.45 89.0 621 $0.50 $0.50 $0.50 7.2% 86% $0.94 $0.70 $0.80 $0.92 $0.66 $0.48 $0.58 $0.69
Royal Host Inc. RYL $2.12 $2.00 U Spec $3.00 $1.85 18.0 38 $0.30 $0.30 $0.30 14.2% 527% $0.36 $0.47 $0.26 $0.37 $0.29 ($0.19) $0.06 $0.20
10.7% 307%

Seniors Housing
5
Chartwell Seniors Housing CSH.un $8.13 $9.25 SP AA $9.65 $6.16 142.1 1,155 $0.54 $0.54 $0.54 6.6% 88% $0.68 $0.63 $0.66 $0.70 $0.69 $0.59 $0.62 $0.66
Extendicare REIT EXE.un $9.63 $11.00 O AA $11.17 $8.08 82.8 797 $0.84 $0.84 $0.84 8.7% 79% $1.82 $1.05 $1.09 $1.04 $1.78 $1.00 $1.06 $1.01
6 6 6
Leisureworld Senior Care LW $10.70 $10.50 SP AA $10.99 $8.88 20.0 214 $0.85 $0.66 $0.85 7.9% 81% $0.92 $0.79 $0.87 $0.90 $1.10 $0.96 $1.05 $1.08
7.8% 83%

Commercial Property
Allied Properties REIT AP.un $21.21 $22.50 SP Avg $23.46 $18.07 42.0 891 $1.32 $1.32 $1.32 6.2% 99% $1.73 $1.63 $1.63 $1.81 $1.43 $1.32 $1.33 $1.50
Artis REIT AX.un $13.45 $14.00 SP Avg $14.00 $10.25 74.9 1,007 $1.08 $1.08 $1.08 8.0% 112% $1.49 $1.17 $1.25 $1.27 $0.93 $0.79 $0.96 $1.01
Brookfield Office Props (US$) BPO $17.36 $18.75 O Avg $18.87 $11.63 502.0 8,715 $0.56 $0.56 $0.56 3.2% 61% $1.48 $1.22 $1.16 $1.18 $1.13 $1.01 $0.92 $0.94
6 7 7
Brookfield Office Props Cda BOX.un $21.70 $23.50 SP Avg $22.80 $18.25 93.2 2,022 $0.96 $0.74 $1.07 4.4% 94% $1.32 $1.34 $1.34 $1.36 $1.03 $0.94 $1.03 $1.10
Calloway REIT CWT.un $24.15 $25.75 O Avg $25.25 $18.00 114.6 2,767 $1.55 $1.55 $1.55 6.4% 100% $1.67 $1.65 $1.65 $1.73 $1.55 $1.54 $1.54 $1.62
CREIT REF.un $31.71 $35.00 O Avg $33.65 $25.00 66.6 2,112 $1.41 $1.40 $1.42 4.4% 68% $2.31 $2.34 $2.39 $2.47 $1.98 $2.05 $2.06 $2.12
Cominar REIT CUF.un $20.91 $22.00 SP Avg $22.50 $17.53 62.3 1,302 $1.44 $1.44 $1.46 6.9% 95% $1.77 $1.66 $1.72 $1.77 $1.52 $1.47 $1.51 $1.57
Dundee REIT D.un $30.55 $32.00 SP Avg $31.77 $17.77 49.3 1,506 $2.20 $2.20 $2.20 7.2% 100% $3.00 $2.68 $2.78 $2.82 $2.19 $2.06 $2.19 $2.27
First Capital Realty FCR $15.11 $16.25 O Avg $16.00 $10.62 161.6 2,442 $0.80 $0.80 $0.80 5.3% 90% $1.01 $0.96 $1.01 $1.06 $0.91 $0.86 $0.89 $0.94
8
H&R REIT HR.un $19.75 $22.00 O Avg $20.90 $15.48 150.0 2,962 $0.90 $0.79 $0.95 4.6% 67% $1.48 $1.42 $1.41 $1.51 $1.38 $1.38 $1.34 $1.42
Morguard REIT MRT.un $14.69 $15.25 O Avg $15.00 $12.46 56.9 835 $0.90 $0.90 $0.90 6.1% 88% $1.14 $1.19 $1.24 $1.27 $0.98 $0.99 $1.03 $1.05
8 9 9
NorthWest Healthcare REIT NWH.un $11.85 $12.25 SP AA $12.00 $10.05 35.3 418 $0.80 $0.62 $0.80 6.8% 98% $1.01 $0.80 $1.06 $1.12 $0.74 $0.61 $0.81 $0.87
Primaris Retail REIT PMZ.un $19.45 $20.75 O Avg $20.27 $15.78 68.6 1,334 $1.22 $1.22 $1.22 6.3% 103% $1.30 $1.40 $1.47 $1.52 $1.01 $1.09 $1.19 $1.24
Pure Industrial REIT AAR.un-V $4.03 Restricted -R- -R- $4.65 $3.15 27.1 109 $0.30 $0.30 -R- 7.4% -R- $0.36 -R- -R- -R- $0.30 -R- -R- -R-
RioCan REI.un $22.11 $24.50 SP Avg $23.40 $17.25 258.7 5,719 $1.38 $1.38 $1.38 6.2% 102% $1.20 $1.46 $1.51 $1.58 $1.09 $1.30 $1.35 $1.41
6.0% 91%

Stock Rating Legend: TP – Top Pick; O – Outperform; SP – Sector Perform; U – Underperform. Risk Qualifier Legend: Avg – Average Risk; AA – Above Average Risk; Spec – Speculative.
Note: R – Restricted from providing an investment opinion due to new issued distribution period or quiet period surrounding a "lock-up" termination; UR – Under Review.

9
January 12, 2011 Real Estate Investment Trusts
Canadian REITs And REOCs – Valuation Table (Continued) Neil Downey, CA, CFA (416) 842-7835
Page 2 of 3

Implied RBCCM Book


Business Focus NAV/ Price/ Cap Cap Value/ Price/ Tax Deferral FFO/Unit Multiples AFFO/Unit Multiples
Property Sector (Estimated Sources of Income) Unit NAV Rate Rate Unit Book 2009 2010E 09 10E 11E 12E 09 10E 11E 12E

Multi-Unit Residential
Boardwalk REIT Residential (100%) $37.50 112% 5.9% 6.25% ($1.92) N/A 48% 45% 16.7x 17.3x 16.7x 15.6x 19.1x 19.9x 19.1x 17.7x
CAP REIT Residential (100%) $17.00 102% 6.2% 6.25% $6.19 2.8x 100% 90% 13.7x 12.7x 13.0x 12.5x 16.0x 14.4x 14.6x 14.0x
Killam Properties Inc Apartments (73%) & MHCs (27%) $9.75 108% 6.8% 7.0% $4.64 2.3x N/A N/A 14.4x 14.2x 13.4x 12.9x 19.2x 17.0x 16.6x 15.7x
Northern Property High Arctic & Maritime (Residential - 85%, Commercial - 15%) $23.50 122% 7.1% 8.0% $12.02 2.4x 68% 60% 13.1x 13.0x 12.6x 12.2x 15.9x 15.8x 15.1x 14.6x
TransGlobe Apartment REIT Residential (100%) -R- -R- -R- -R- $9.12 1.1x N/A -R- N/A -R- -R- -R- N/A -R- -R- -R-
Simple Averages 111% 6.5% 6.9% 2.9x 72% 65% 14.5x 14.3x 13.9x 13.3x 17.5x 16.8x 16.3x 15.5x

Lodging
InnVest REIT Lodging (primarily limited service hotels) $4.50 155% 7.0% 8.0% $5.06 1.4x 70% 60% 7.4x 10.0x 8.7x 7.6x 10.5x 14.7x 12.0x 10.1x
Royal Host Lodging (full-service, limited service + 3rd party management ) $1.00 212% 7.3% 8.25% $0.86 2.5x 100% 100% 5.9x 4.5x 8.2x 5.7x 7.4x N/A N/A 10.7x
Simple Averages 183% 7.1% 8.1% 1.9x 85% 80% 6.7x 7.2x 8.5x 6.6x 8.9x 14.7x 12.0x 10.4x

Seniors Housing
Chartwell Seniors Housing Seniors Housing & Related Services (RH/ALF Focussed) $8.50 109% 7.7% 7.5% $4.72 1.7x 100% 100% 12.0x 13.0x 12.4x 11.7x 11.8x 13.9x 13.2x 12.4x
Extendicare REIT Seniors Housing & Related Services (LTC/SNF Focussed) $12.50 77% 13.7% 12.0% $0.31 31.6x 70% 70% 5.3x 9.2x 8.8x 9.3x 5.4x 9.7x 9.1x 9.6x
Leisureworld Senior Care Seniors Housing & Related Services (LTC Focussed) $8.00 134% 7.9% 9.0% $8.83 1.2x N/A N/A N/A N/A 12.4x 11.9x N/A N/A 10.2x 9.9x
Simple Averages 107% 9.7% 9.5% 17.2x 85% 85% 8.7x 11.1x 11.2x 11.0x 8.6x 11.8x 10.8x 10.6x

Commercial Property
Allied Properties REIT Class I Properties (Office-88%, Retail-12%) $19.50 109% 7.6% 8.0% $12.30 1.7x 67% 65% 12.3x 13.0x 13.0x 11.7x 14.8x 16.1x 15.9x 14.1x
Artis REIT Diversified (Office-51%, Retail-36%, Industrial-13%) $12.25 110% 7.2% 7.5% $9.42 1.4x 100% 100% 9.1x 11.5x 10.8x 10.6x 14.5x 17.0x 14.0x 13.3x
Brookfield Properties (US$) CBD Office (North America) and Western Canadian land and housing $15.25 114% 6.2% 6.75% $13.70 1.3x N/A N/A 11.7x 14.2x 15.0x 14.8x 15.3x 17.2x 18.8x 18.4x
Brookfield Office Props Cda Class "A" Office (100%) $23.00 94% 6.4% 6.3% $22.93 0.9x N/A 40% 16.5x 16.1x 16.2x 16.0x 21.1x 23.0x 21.1x 19.8x
Calloway REIT Retail (Primarily Wal-Mart Anchored, New Format Centers - 95%) $23.00 105% 6.6% 6.75% $13.76 1.8x 63% 50% 14.5x 14.7x 14.7x 14.0x 15.6x 15.7x 15.6x 14.9x
CREIT Diversified (New Format/Strip Retail-52%, Office-24%, Industrial-24%) $30.00 106% 6.7% 7.0% $11.53 2.7x 0% 20% 13.7x 13.6x 13.3x 12.8x 16.0x 15.5x 15.4x 15.0x
Cominar REIT Diversified (Retail-18%, Office-47%, Industrial-35%) $19.50 107% 7.2% 7.5% $10.70 2.0x 71% 65% 11.8x 12.6x 12.2x 11.8x 13.7x 14.2x 13.8x 13.3x
Dundee REIT Diversified (Office-92%, Industrial-8%) $28.00 109% 7.2% 7.5% $18.25 1.7x 77% 70% 10.2x 11.4x 11.0x 10.8x 13.9x 14.8x 13.9x 13.4x
First Capital Realty Retail (primarily food store-anchored strip retail) $13.75 110% 6.4% 6.75% $6.81 2.2x N/A N/A 14.9x 15.8x 14.9x 14.3x 16.6x 17.7x 17.0x 16.1x
H&R REIT Diversified Primarily NNN (Office-41%, Industrial-33%, Retail-26%) $20.00 99% 7.1% 7.0% $10.81 1.8x 1% 40% 13.3x 13.9x 14.0x 13.1x 14.3x 14.3x 14.7x 13.9x
Morguard REIT Diversified (Malls/Retail-61%, Office-34%, Industrial-5%) $14.25 103% 7.4% 7.5% $8.22 1.8x 27% 40% 12.9x 12.3x 11.8x 11.6x 15.0x 14.9x 14.3x 14.0x
NorthWest Healthcare REIT Medical Office Buildings (100%) $10.75 110% 7.2% 7.75% $9.05 1.3x N/A 60% 11.8x 14.8x 11.2x 10.5x 16.0x N/A 14.6x 13.6x
Primaris Retail REIT Retail (100%-Primarily malls) $18.50 105% 6.8% 7.0% $7.42 2.6x 77% 70% 15.0x 13.9x 13.2x 12.8x 19.2x 17.8x 16.4x 15.7x
Pure Industrial REIT Industrial (100%) -R- -R- -R- -R- $2.99 1.3x 89% -R- 11.2x -R- -R- -R- 13.4x -R- -R- -R-
RioCan Retail (95%), Office (5%) $19.25 115% 6.2% 6.75% $7.58 2.9x 63% 60% 18.5x 15.2x 14.6x 14.0x 20.3x 17.0x 16.4x 15.7x
Simple Averages 107% 6.9% 7.1% 1.8x 58% 57% 13.2x 13.8x 13.3x 12.8x 16.0x 16.6x 15.9x 15.1x

Overall, Simple Averages 114% 7.2% 7.5% 2.1x 66% 63% 12.4x 13.0x 12.7x 12.1x 15.0x 16.0x 15.1x 14.2x
Overal (Ex-Lodging), Simple Averages 108% 7.2% 7.4% 2.1x 64% 61% 13.0x 13.6x 13.1x 12.6x 15.6x 16.1x 15.2x 14.5x

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January 12, 2011 Real Estate Investment Trusts
Canadian REITs And REOCs – Valuation Table (Continued) Neil Downey, CA, CFA (416) 842-7835
Page 3 of 3

Footnotes (all amounts are stated on a diluted basis):


1) Current distribution and yield are based on the current annualized monthly/quarterly distribution.
2) Payout Ratio = Run-Rate Cash Distribution / 2011E AFFO.
3) Adjusted Funds From Operations = FFO, adjusted for non-recoverable maintenance capital expenditures, significant straight-line rent adjustments and other items.
4) TransGlobe Apartment REIT – 2010E represents the 232 day "stub year" from the May 14 IPO to December 31, 2010, hence P/FFO and P/AFFO multiples are not meaningful.
5) Chartwell REIT – FFO/unit shown above excludes unrealized gains and losses on derivative financial instruments, unrealized foreign exchange gains and losses, and, writedowns on mezzanine loans. Including these items, 2008/09 FFO/Unit were
$0.88/$0.61. 2010E is $0.62.

6) Leisureworld Senior Care - Figures shown in 2009A are pro forma; 2010E represents the 284 day "stub-year" from the March 23 IPO date, hence P/FFO and P/AFFO multiples are not meaningful.
7) Brookfield Office Properties Canada – 2009A reflects the REIT's predecessor, BPO Properties. 2010E is pro-forma, as if the REIT conversion occurred January 1, 2010.
8) H&R REIT – FFO/unit shown above excludes non-operating. Including these items, 2008/09 FFO/unit were $1.59/$1.34. 2010E/11E/12E are $1.48/$1.41/$1.51.
9) NorthWest Healthcare Properties REIT – 2009A are 9-months annualized pro-forma; 2010E represents the 281 day "stub year" from the March 25 IPO to December 31, 2010, hence P/FFO and P/AFFO multiples are not meaningful.

Source: RBC Capital Markets and Thomson One

11
January 12, 2011 Real Estate Investment Trusts

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securities broker or dealer in any jurisdiction by any person or company that is not legally permitted to carry on the business of a securities broker or dealer in that
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Additional information is available on request.

To U.S. Residents:
This publication has been approved by RBC Capital Markets, LLC (member FINRA, NYSE), which is a U.S. registered broker-dealer and which accepts responsibility
for this report and its dissemination in the United States. Any U.S. recipient of this report that is not a registered broker-dealer or a bank acting in a broker or dealer
capacity and that wishes further information regarding, or to effect any transaction in, any of the securities discussed in this report, should contact and place orders with
RBC Capital Markets, LLC.
To Canadian Residents:
This publication has been approved by RBC Dominion Securities Inc.(member IIROC). Any Canadian recipient of this report that is not a Designated Institution in
Ontario, an Accredited Investor in British Columbia or Alberta or a Sophisticated Purchaser in Quebec (or similar permitted purchaser in any other province) and that
wishes further information regarding, or to effect any transaction in, any of the securities discussed in this report should contact and place orders with RBC Dominion
Securities Inc., which, without in any way limiting the foregoing, accepts responsibility for this report and its dissemination in Canada.
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This publication has been approved by Royal Bank of Canada Europe Limited ('RBCEL') which is authorized and regulated by Financial ServicesAuthority ('FSA'), in
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To Persons Receiving This Advice in Australia:
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consider that document before making any decision about whether to acquire the product.
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under the Securities and Futures Ordinance or, by Royal Bank of Canada, Hong Kong Branch, a registered institution under the Securities and Futures Ordinance. This
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wishing to obtain further information on any of the securities mentioned in this publication should contact RBC Investment Services (Asia) Limited, RBC Investment
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is 2848-1388).
To Singapore Residents:
This publication is distributed in Singapore by RBC (Singapore Branch) and RBC (Asia) Limited, registered entities granted offshore bank status by the Monetary
Authority of Singapore. This material has been prepared for general circulation and does not take into account the objectives, financial situation, or needs of any
recipient. You are advised to seek independent advice from a financial adviser before purchasing any product. If you do not obtain independent advice, you should
consider whether the product is suitable for you. Past performance is not indicative of future performance.
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Copyright © RBC Capital Markets, LLC 2011 - Member SIPC
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