Slate Grocery REIT (SGR) 2021年年度報告「TSX」.pdf

1、Slate Grocery REIT2021 Annual ReportSlate Grocery REITQ4 2021 MD&AMooresville Town Square,Mooresville,North Carolina1Slate Grocery REITQ4 2021 MD&AHarper Hill Commons,Winston Salem,North Carolina2Slate Grocery REITQ4 2021 MD&AAbout Slate Grocery REIT(TSX:SGR.U/SGR.UN)Slate Grocery REIT is managed by

2、 Slate Asset Management.Slate Asset Management is a global alternative investment platform focused on real estate.We focus on fundamentals with the objective of creating long-term value for our investors and partners.Slates platform spans a range of investment strategies,including opportunistic,valu

3、e add,core plus and debt investments.We are supported by exceptional people and flexible capital,which enable us to originate and execute on a wide range of compelling investment opportunities.Visit to learn more.Slate Grocery REIT is an owner and operator of U.S.grocery-anchored real estate.The REI

4、T owns and operates approximately U.S.$1.9 billion of critical real estate infrastructure across major U.S.metro markets that communities rely upon for their daily needs.The REITs resilient grocery-anchored portfolio and strong credit tenants provide unitholders with durable cash flows and the poten

5、tial for capital appreciation over the longer term.Visit to learn more about the REIT.Forward-looking StatementsCertain information in this managements discussion and analysis(“MD&A”)constitutes“forward-looking statements”within the meaning of applicable securities legislation.These statements refle

6、ct managements expectations regarding objectives,plans,goals,strategies,future growth,results of operations,performance and business prospects and opportunities of Slate Grocery REIT(the“REIT”)including expectations for the current financial year,and include,but are not limited to,statements with re

7、spect to managements beliefs,plans,estimates and intentions,and similar statements concerning anticipated future events,results,circumstances,performance or expectations that are not historical facts.Statements that contain words such as“could”,“should”,“would”,“can”,“anticipate”,“expect”,“does not

8、expect”,“believe”,“plan”,budget”,“schedule”,“estimate”,“intend”,“project”,“will”,“may”,“might”,“continue”and similar expressions or statements relating to matters that are not historical facts constitute forward-lookingstatements.Some of the specific forward-looking statements contained herein inclu

9、de,but are not expressions or statements relating to matters that are not historical facts constitute forward-looking statements.Some of the specific forward-looking statements contained herein include,but are not limited to,statements relating to the impact of the COVID-19 pandemic.There can be no

10、assurance regarding the impact of COVID-19 on the business,operations,and financial performance of the REIT and its tenants,as well as on consumer behaviors and the economy in general.Management believes that the expectations reflected in its forward-looking statements are based upon reasonable assu

11、mptions,however,management can give no assurance that actual results,performance or achievements will be consistent with these forward-looking statements.These forward-looking statements are not guarantees of future events or performance and,by their nature,are based on the REITs current estimates a

12、nd assumptions,which are subject to significant risks and uncertainties.The REIT believes that these statements are made based on reasonable assumptions;however,there is no assurance that the events or circumstances in these forward-looking statements will occur or be achieved.A number of factors co

13、uld cause actual results to differ materially from the results discussed in the forward-looking statements including,but not limited to the risks that are more fully discussed under the“Risk Factors”section of the annual information form of the REIT for the year ended December 31,2021(“Annual Inform

14、ation Form”).Factors that could cause actual results to differ materially from those contemplated or implied including,but not limited to:financial and operational risks associated with the COVID-19 pandemic;risks incidental to ownership and operation of real estate properties including local real e

15、state conditions;financial risks related to obtaining available equity and debt financing at reasonable costs and interest rate fluctuations;operational risks including timely leasing of vacant space and re-leasing of occupied space on expiration of current leases on terms at current or anticipated

16、rental rates;tenant defaults and bankruptcies;uncertainties of acquisition activities including availability of suitable property acquisitions and in integration of acquisitions;competition including development of properties in close proximity to the REITs properties;loss of key management and empl

17、oyees;potential environmental liabilities;catastrophic events,such as earthquakes and hurricanes;governmental,taxation and other regulatory risks and litigation risks.Forward-looking statements included in this MD&A are made as of February 23,2022 and accordingly are subject to change after such dat

18、e.The REIT does not undertake to update any forward-looking statements that are included in this MD&A,whether as a result of new information,future events or otherwise,except as expressly required by applicable securities laws.Certain statements included in this MD&A may be considered“financial outl

19、ook”for purposes of applicable securities laws,and such financial outlook may not be appropriate for purposes other than this MD&A.Investors are cautioned against placing undue reliance on forward-looking statements.3Slate Grocery REITQ4 2021 MD&APortfolio occupancy93.6%HighlightsRecord new leasing

20、for 202141 On a proportionate interest basis.95.3%Grocery-anchored properties$1.9BCritical real estate168.2%Essential tenantsSlate Grocery REITQ4 2021 MD&ATop 5 TenantsNecessity Based Tenancy 1123458.1%6.2%4.5%3.2%Ranked by Annual Base Rent74.8%remaining tenants across 1,654 leases39%4%5%14%Supermar

21、kets&Grocery 2Medical&Personal ServicesFitness FacilitiesFinancial InstitutionsSporting&Footwear1%2%2%1%Liquor StoresDollar StoresPharmacy15%Other Necessity-Based&Daily Needs 13%Restaurants4%Discount&Off-Price53.2%1 Based on the North American Industry Classification System2 Includes WalmartSlate Gr

22、ocery REITQ4 2021 MD&AAssets107Number of properties23States 13.2MSquare feetLegendAssetPresence in 23 of the top 50 U.S.Metropolitan Statistical Areas(MSAs)7Our experiencelets us seeopportunityclearly.Slate Grocery REITQ4 2021 MD&ALetter to UnitholdersDear Fellow Unitholders,This past year has prove

23、n yet again the resiliency of grocery real estate and its ability to provide attractive returns in all market conditions.Grocery real estate is an irreplaceable part of the supply chain,providing the critical infrastructure needed to distribute essential goods to consumers.Even as e-commerce acceler

24、ates and consumers increasingly take advantage of buy online options,grocery retailers are investing heavily in their bricks-and-mortar stores,through technology enabled services such as automated self-checkout and curbside pickup.This investment is driven by the fact that all methods of purchase,in

25、cluding e-commerce,require real estate to facilitate the pick-up or delivery of goods.Online grocery sales are expected to represent 11%of total grocery sales in 2022,a slight uptick from approximately 10%in 20211.Notably,most of these online orders approximately 75%are being fulfilled through exist

26、ing stores2.Accordingly,we believe grocers will continue to invest heavily in their physical stores because grocery e-commerce requires the strategic,well-located,logistics-style real estate that bricks-and-mortar stores provide to economically reach the end consumer.There is a significant advantage

27、 to owning grocery real estate in close proximity to neighborhoods.Grocers moving products to their consumer are focused on reducing their last mile costs.The cost of transportation accounts for over 50%of the supply chain cost,while rent is just 5%of that total.We expect tenant demand for our real

28、estate to remain high,as physical stores near where people live continue to be an integral part of our grocer partners competitive advantage.2021 has been a transformational year for Slate Grocery REIT.Our platform has grown significantly,and we further enhanced the durability of our portfolio throu

29、gh proactive asset management.Today,the REIT owns$1.9 billion in critical real estate infrastructure.Over the last 12 months,we have invested$468.5 million in accretive grocery-anchored acquisitions at compelling values,adding 3.7 million square feet or 38.2%of gross leasable area to our portfolio.9

30、This included an opportunistic 25 property grocery-anchored portfolio acquisition for$390 million,which increased our exposure to leading omnichannel grocers in Americas largest metropolitan areas,including New York and Texas.We have remained focused on proactive leasing.Our team achieved a record y

31、ear of new leasing totaling 375,655 square feet at a 17.9%weighted average rental spread.The continued efforts of our team resulted in a 93.6%occupancy rate at year-end,which marked the sixth consecutive quarter of occupancy gains by the REIT.We report a solid three-month same-property net operating

32、 growth of 2.9%for the fourth quarter of 2021.Our ancillary program contributed$0.2 million in revenue in the year and is expected to double in size in 2022.Our development initiatives provide us with the opportunity to high-grade our real estate.In the year,we completed four anchor repositioning pr

33、ojects at a total cost of$15.2 million.These projects provide a meaningful yield on cost of 14.1%.We have four ongoing redevelopment projects with an estimated cost of$22.7 million,targeted for completion in 2022 that will add meaningful value to our portfolio over the long term.Heading into 2022,Sl

34、ate Grocery REIT is well-positioned to pursue organic growth and high-quality,accretive acquisitions.Our balance sheet remains strong and underpins the successful execution of our business plan.Since the onset of the pandemic,we have refinanced over$1.1 billion of our debt maturities,which has provi

35、ded us with ample liquidity and flexibility.And throughout this year of record growth,we maintained our leverage ratio at 54.0%.Further increasing the strength and flexibility of our balance sheet will remain a priority in 2022 and beyond.As an externally managed REIT,Slate Grocery REIT benefits gre

36、atly from its relationship with its manager,Slate Asset Management.As a global alternative asset management platform that owns and operates over$3 billion of grocery assets worldwide,Slate Asset Management provides the REIT with access to unique insight and deal flow that support our strategic growt

37、h.1 Supermarket News E-commerce to account for 20%of U.S.grocery market by 2026 October 20212 McKinsey&Co US Consumer sentiment and behaviors during the coronavirus crisis December 2021Slate Grocery REITQ4 2021 MD&A Grocery real estate is an irreplaceable part of the supply chain,providing the criti

38、cal infrastructure needed to distribute essential goods to consumers.Even as e-commerce accelerates and consumers increasingly take advantage of buy online options,grocery retailers are investing heavily in their bricks-and-mortar stores.“The U.S.market presents a significant opportunity,with no mor

39、e than 2%of the 40,000 grocery stores held by a single landlord.This fragmentation allows our team to find creative ways to grow our portfolio and add value.We are pleased with our operational and financial results this past quarter and for the 2021 year,which validated our investment strategy and p

40、roactive management approach.Slate Grocery REITs positive momentum presents many exciting opportunities in the 2022 year and beyond,which will enable us to continue providing sustained,long-term value to our unitholders.On behalf of the Slate Grocery REIT team and the Board,I would like to thank the

41、 investor community for their confidence and support in our efforts.Sincerely,Blair Welch CEO,Slate Grocery REITFebruary23,2022“”10Slate Grocery REITQ4 2021 MD&ACambridge Crossings,Troy,Michigan11Managements Discussion and AnalysisSLATE GROCERY REITTSX:SGR.U and SGR.UNDecember 31,2021FINANCIAL AND I

42、NFORMATIONAL HIGHLIGHTS .14PART I OVERVIEW.15PART II LEASING AND PROPERTY PORTFOLIO .19PART III RESULTS OF OPERATIONS .32PART IV FINANCIAL CONDITION .51PART V ACCOUNTING AND CONTROL .60PART VI PROPERTY TABLES .62FINANCIAL AND INFORMATIONAL HIGHLIGHTS(in thousands of United States dollars)Q4 2021Q3 2

43、021Q2 2021Q1 2021Q4 2020Q3 2020Summary of Portfolio InformationNumber of properties 110710780807576Gross leasable area(GLA)113,174,12113,174,1459,916,4359,959,0759,554,6799,728,179GLA occupied by grocery-anchors 16,230,5826,230,5824,775,2924,785,1184,614,1784,657,213Occupancy 1 93.6%93.5%93.2%93.1%9

44、2.9%92.5%Anchor occupancy 1 100.0%100.0%98.6%98.6%98.6%98.6%Non-anchor occupancy 1 87.8%87.8%87.9%88.0%87.5%86.8%Grocery-anchor weighted average lease term(years)15.25.25.65.96.56.4Portfolio weighted average lease term(years)14.74.74.95.05.35.3Square feet(SF)of new leasing 150,621229,29048,97046,774

45、35,823196,438SF of total leasing 1314,652425,821171,458143,325480,738431,778Summary of Financial InformationGross book value(GBV)2 3$1,737,162$1,715,471$1,552,511$1,539,994$1,323,554$1,302,849 GBV,Proportionate 2 3 1,955,072 1,931,144 1,563,941 1,551,257 1,334,990 1,314,465 Debt 3 937,744 928,122 76

46、6,997 766,616 726,373 777,526 Debt,Proportionate 3 1,149,649 1,140,774 773,662 773,133 733,252 784,472 Revenue 38,348 34,079 33,377 32,471 31,872 31,961 Net income(loss)1 20,191 9,603 (3,141)60,775 21,268 7,630 Net operating income(NOI)1 3 31,885 25,647 24,037 23,285 22,583 23,098 Funds from operati

47、ons(FFO)1 3 4 15,684 13,686 12,545 11,529 11,684 11,487 Adjusted funds from operations(AFFO)1 3 4 13,266 11,478 10,398 9,450 9,651 8,954 Distributions declared$12,927$11,283$10,460$10,460$9,545$9,087 Per Unit Financial InformationClass U equivalent units outstanding 5 59,852 59,852 48,432 48,432 48,

48、432 42,072 Weighted Average class U equivalent units outstanding(WA units)60,054 49,742 48,615 48,597 43,752 42,222 FFO per WA units 1 3 4$0.26$0.28$0.26$0.24$0.27$0.27 AFFO per WA units 1 3 4 0.22 0.23 0.21 0.19 0.22 0.21 Declared distributions per unit$0.2160$0.2160$0.2160$0.2160$0.2160$0.2160 Fin

49、ancial RatiosFFO payout ratio 1 3 4 6 7 82.4%82.4%83.4%90.7%81.7%79.1%AFFO payout ratio 1 3 4 6 7 97.4%98.3%100.6%110.7%98.9%101.5%Debt/GBV 8 54.0%54.1%53.0%53.5%54.9%59.7%Weighted average interest rate 9 4.09%4.03%4.14%4.25%4.22%3.98%Interest coverage ratio2.98x2.73x2.59x2.50 x2.45x2.48xAll portfol

50、io information is for the three month period ended and all other amounts are as at the end of the period.1 Includes the REITs share of joint venture investments.2 GBV is equal to total assets.3 Refer to non-IFRS financial measures on page 16.4 Adjusting to exclude the impact of the$169.0 million deb

51、t refinancing in the first quarter of 2021 FFO,FFO per unit and FFO payout ratio would be$11.8million,$0.24 and 88.3%,respectively,and AFFO,AFFO per unit and AFFO payout ratio would be$9.8million,$0.20 and 107.1%,respectively.5 Represents the total number of class U units outstanding,if all other un

52、its of the REIT,its subsidiaries and its deferred unit plan,were converted or exchanged,as applicable,for class U units of the REIT.6Adjusting to exclude the impact of the September distributions in relation to the subscription receipt offering completed in the third quarter of 2021 for the acquisit

53、ion of the 25 grocery-anchored portfolio,FFO payout ratio and AFFO payout ratio for the third quarter would be 76.5%,and 91.2%,respectively.7 FFO payout ratio and AFFO payout ratio is equal to distributions declared divided by FFO and distributions declared divided by AFFO,respectively.8 Excludes su

54、bscription receipt funds in escrow for first and second quarter of 2021.9 Includes the impact of pay-fixed receive-float swaps.Slate Grocery REITQ4 2021 MD&A14PART I OVERVIEWINTRODUCTIONThis MD&A of the financial position and results of operations of Slate Grocery REIT(TSX:SGR.U and SGR.UN)and its s

55、ubsidiaries(collectively,the REIT)is intended to provide readers with an assessment of performance and summarize the financial position and results of operations of the REIT for the period ended December 31,2021.The presentation of the REITs financial results,including the related comparative inform

56、ation,contained in this MD&A are based on the REITs consolidated financial statements for the period ended December 31,2021(the consolidated financial statements),which have been prepared by management in accordance with International Financial Reporting Standards(IFRS).This MD&A should be read in c

57、onjunction with those financial statements.All amounts are in thousands of United States dollars,which is the functional currency of the REIT and all of its subsidiaries.The information contained in this MD&A is based on information available to the REIT and is dated as of February23,2022,which is a

58、lso the date the Board of Trustees,upon the recommendation of its Audit Committee,approved the contents of this MD&A.PROFILEThe REIT is an unincorporated open-ended real estate mutual fund trust constituted in accordance with the laws of the Province of Ontario pursuant to an amended and restated De

59、claration of Trust dated as of April 15,2014,as amended on August 17,2020.As of December31,2021,the REIT owns 107 grocery-anchored properties located in the United States of America(the U.S.)comprising 13.2 million square feet of GLA.The REIT is externally managed and operated by Slate Asset Managem

60、ent(Canada)L.P.(the Manager”or Slate).The Manager has an experienced and dedicated team of real estate professionals with a proven track record of success in real estate investment and management.Managements interests are aligned with the unitholders of the REIT through its sponsorship and as a sign

61、ificant unitholder of the REIT.Slate is a significant unitholder in the REIT,with an approximate 5.6%interest,and accordingly,is highly motivated to increase the value to unitholders and provide reliable growing returns to the REITs unitholders.Additional information on the REIT,including its Annual

62、 Information Form,is available on SEDAR at and on the REITs website at .STRATEGY AND OUTLOOKOur strategy is to own the last mile of essential logistics that allows our quality grocery-anchored properties to operate and service consumers for their everyday needs.Located in major markets in the U.S.,w

63、e believe that our diversified portfolio and quality tenant covenants provides a strong basis to continue to grow unitholder distributions and flexibility to capitalize on opportunities that provide value appreciation.We are focused on the following areas to achieve the REITs objectives:Be disciplin

64、ed in our acquisition of well-located properties that provide opportunity for future value creation;Proactive property and asset management that results in NOI growth while minimizing property and portfolio vacancy exposure;Prudent and disciplined management of capital outlays that will maintain and

65、 increase the attractiveness of the REITs portfolio and achieve increased rents;andContinue to increase the REITs financial strength and flexibility through robust balance sheet management.The REITs internal growth strategy includes the following:Maintaining strong tenant relationships and ensuring

66、tenant retention:Slate expects to continue to nurture its many longstanding relationships with existing tenants by anticipating and adapting to their changing needs and being proactive with lease renewals.Slate understands the value of maintaining existing tenancies and will engage in ongoing discus

67、sions with tenants throughout their lease term to be proactive in negotiating early renewals as leases approach their expiries.The growing size of the REITs portfolio will help strengthen its longstanding relationships with existing tenants and allow Slate to offer leasing opportunities across multi

68、ple properties.This strategy will promote organic growth by minimizing marketing,leasing and tenant improvement costs and avoiding interruptions in rental income generation.Maximizing rental income through leasing initiatives:Slate expects to maintain the current high level of occupancy in the REITs

69、 properties by leveraging Slates established leasing platform.Slate intends to continue to implement active strategies that take into consideration prevailing economic conditions,the nature of the property,its local positioning,as well as existing and prospective tenants.Many of the REITs properties

70、 are located in areas with low vacancy rates and minimal new competitive supply,which should minimize leasing costs and allow the REIT to replace in-place rents with increased market rents as leases expire.Slate also seeks to continue to include contractual rent escalators in leases to further facil

71、itate growth in rental income.Repositioning current properties:Slate believes that in a number of situations there exists the opportunity to reposition properties currently held by the REIT through modest and targeted capital projects and/or operational improvements.Acting creatively and opportunist

72、ically to drive incremental value through monetization of the REITs land and assets by densification,leasing of rooftops,parking lots and other elements of the REITs properties.Slate Grocery REITQ4 2021 MD&A15The REIT will continue to focus on acquiring diversified revenue producing commercial real

73、estate properties with a focus on grocery-anchored properties.The REITs external growth strategy includes the following:Opportunity to benefit from its relationship with Slate:The REIT anticipates that its continuing relationship with Slate provides opportunities to acquire additional properties.Sla

74、te has a strong track record of closing acquisitions and believes that it can grow the asset base of the REIT on an accretive basis in the near to medium term.Identify undervalued properties:Slates extensive relationships with a network of U.S.-based commercial real estate brokers allows it to ident

75、ify undervalued properties,many of which may be“off-market”or not widely marketed for sale.With over 40,000 grocery stores in the U.S.,there are significant opportunities for the REIT to continue its strategy of acquiring attractive,revenue-producing grocery-anchored properties.Slates familiarity wi

76、th the REITs properties allows it to identify complementary acquisition opportunities that are aligned with the REITs investment criteria and accretive to cash flow.The REIT seeks to acquire properties that are:(i)located in major metropolitan areas in the U.S.that demonstrate favourable population

77、and employment growth dynamics;(ii)located in well-developed sub-markets with limited risk of new development;and(iii)anchored by market dominant grocers and other essential tenants who fulfill the last mile of logistics and have a proven track record of strong sales and profitability.Slate will con

78、tinue to target major metropolitan areas in the U.S.outside of gateway markets where there is typically more competition and less favourable pricing for quality assets.Apply Slates hands-on asset management philosophy:Even though Slate targets assets that are stable,income producing properties,Slate

79、 will continue to assess each property to determine how to optimally refurbish,reposition and re-tenant the property.Slate will continue to work closely with contractors to reduce operating costs and will oversee capital expenditure projects to ensure they are on budget and completed on time.In addi

80、tion,Slate will continue to:(i)focus on rebuilding and strengthening tenant relationships with a view to gaining incremental business and extending stable tenant leases;and(ii)outsource property management and other real estate property functions to lower the operating costs borne by the tenants.Thi

81、s cost reduction further improves tenant relationships and will increase the net operating income of the REITs properties.Slate Grocery REIT has established itself as both a leading and differentiated owner and operator of grocery-anchored properties in the U.S.The REITs critical real estate infrast

82、ructure and strong credit tenants provide unitholders with durable cash flows and the potential for capital appreciation over the longer term.NON-IFRS FINANCIAL MEASURESWe disclose a number of financial measures in this MD&A that are not measures determined in accordance with IFRS,including NOI,same

83、-property NOI,FFO,FFO payout ratio,AFFO,AFFO payout ratio,adjusted earnings before interest,tax,depreciation and amortization(Adjusted EBITDA)and the interest coverage ratio,in addition to certain measures on a per unit basis.We utilize these measures for a variety of reasons,including measuring per

84、formance,managing the business,capital allocation and the assessment of risk.Descriptions of why these non-IFRS measures are useful to investors and how management uses each measure are included in this MD&A.We believe that providing these performance measures on a supplemental basis to our IFRS res

85、ults is helpful to investors in assessing the overall performance of our businesses in a manner similar to management.These financial measures should not be considered as a substitute for similar financial measures calculated in accordance with IFRS.We caution readers that these non-IFRS financial m

86、easures may differ from the calculations disclosed by other businesses,and as a result,may not be comparable to similar measures presented by others.Reconciliations of these non-IFRS measures to the most directly comparable financial measures calculated and presented in accordance with IFRS are incl

87、uded within this MD&A.The definition of non-IFRS financial measures are as follows:NOI is defined as rental revenue less operating expenses,prior to straight-line rent,IFRIC 21,Levies(IFRIC 21)property tax adjustments and adjustments for joint venture investments.Same-property NOI includes those pro

88、perties owned by the REIT for each of the current period and the relevant comparative period excluding those properties under development.NOI margin is defined as NOI divided by revenue,prior to straight-line rent.FFO is defined as net income adjusted for certain items including transaction costs,ch

89、ange in fair value of properties,change in fair value of financial instruments,deferred income taxes,unit income(expense),adjustments for joint venture investments and IFRIC 21 property tax adjustments.AFFO is defined as FFO adjusted for straight-line rental revenue and sustaining capital,leasing co

90、sts and tenant improvements.FFO payout ratio and AFFO payout ratio are defined as distributions declared divided by FFO and AFFO,respectively.FFO per WA unit and AFFO per WA unit are defined as FFO and AFFO divided by the weighted average class U equivalent units outstanding,respectively.Adjusted EB

91、ITDA is defined as NOI less General and administrative expenses.Interest coverage ratio is defined as adjusted EBITDA divided by cash interest paid.Net asset value is defined as the aggregate of the carrying value of the REITs equity,deferred income taxes and exchangeable units of subsidiaries.Propo

92、rtionate interest represents financial information adjusted to reflect the REITs equity accounted joint ventures on a proportionately consolidated basis at the REITs ownership percentage of the related investment.Slate Grocery REITQ4 2021 MD&A16ENVIRONMENTAL,SOCIAL AND CORPORATE GOVERNANCEAt Slate,w

93、e believe the responsibility of a fiduciary is not limited to generating investment returns it is about treating people,our partners and our environment with respect and setting an example for others through our conduct.In November 2021,Slate hired Bozena Jankowska as Global Head of Environmental,So

94、cial and Corporate Governance,who is responsible for implementing and advancing environmental,social and corporate governance(ESG)practices and thought leadership across Slate and its investment activities in line with Slates ESG policy.Slate is committed to integrating ESG into its investment proce

95、ss,by identifying and managing issues that are material to each investment during its lifecycle.The consideration of ESG factors can be summarized as follows:EnvironmentalSlate recognizes that climate change is the most pressing challenge facing the world today and that it has a role to play in deli

96、vering the change needed to reduce carbon emissions arising from its properties.Slate believes that managing climate change risks and opportunities brings key benefits which include managing regulatory and reputational risk,sharing costs and savings with tenants,reducing risk of stranded assets and

97、enhanced asset value and desirability.By consistently managing environmental impacts and achieving efficiency gains,Slate believes there is an opportunity to own efficient and resilient buildings that serve our tenants,local communities,and the environment.For example,white roofs aid in the reductio

98、n of global warming by lowering energy consumption,greenhouse gas emissions and heat buildup in cities.As of today,approximately 7.6 million of GLA or 56%of the REITs properties have been modified to white roofs.In addition,to further compliment the REITs ongoing initiative to reduce energy and emis

99、sions,Slate continues to move forward with its plan to convert a minimum of five properties annually to LED lighting.In 2021,an additional six properties were converted to LED,bringing the total to 37 properties.SocialSlate believes that by fostering strong relationships and collaboration with tenan

100、ts and stakeholders at the property level,supports the creation of resilient,safe,and sustainable communities.In addition to our investment activities,as manager of the REIT,Slate is committed to integrating ESG throughout its own corporate operations by focusing on factors that are important to our

101、 employees and communities.This includes fostering a diverse and inclusive work environment,investing in the health,safety and well-being of our teams and engaging and supporting individual growth,professional development and mentorship.GovernanceGood governance drives everything that Slate does.Int

102、egrity,accountability,and trust are at the core of Slates culture.Slate believes that integrating ESG practices into its management practices,processes and systems is key to the long-term success of its business and is aligned with its commitment to good business conduct and ethics.To learn more abo

103、ut our ESG initiatives please visit our website:.RISKS AND UNCERTAINTIESIn addition to the risks and uncertainties included herein,the REITs business is subject to a number of risks and uncertainties which are described in its most recently filed Annual Information Form for the year ended December 3

104、1,2021,available on SEDAR at .Additional risks and uncertainties not presently known to the REIT or that the REIT currently considers immaterial also may impair its business and operations and cause the price of the REITs units to decline in value.If any of the noted risks actually occur,the REITs b

105、usiness may be harmed and the financial condition and results of operations may suffer significantly.In that event,the trading price of the units could decline,and unitholders may lose all or part of their investment.RECENT DEVELOPMENTSThe following is a summary of the key financial and operational

106、highlights and recent developments for the REIT for the year ended December 31,2021:The REIT acquired a total of 32 properties at attractive valuations,including a 25 grocery-anchored portfolio(the Acquisition)for an aggregate purchase price of$468.5 million($128 per square foot),at a weighted avera

107、ge capitalization of 7.8%.These acquisitions contributed 3.7 million square feet to the REITs portfolio.The REIT set a record year of new leasing totaling 375,655 square feet at a 17.9%weighted average rental spread,resulting in a 93.6%occupancy rate and marking the REITs sixth consecutive quarter o

108、f occupancy growth.Same-property NOI for the fourth quarter(comprised of 69 properties)increased by 2.9%over the comparative period,primarily driven by new leasing above market rental rates and increases in rental rates from re-leasing above average in-place rent of the properties.Same-property NOI

109、for the trailing twelve month period ended December31,2021(comprised of 60 properties)increased by 0.7%over the same period in the prior year.Including the impact of completed redevelopments,same-property NOI for the three month period ended December31,2021 increased by$1.0 million or 4.6%and same-p

110、roperty NOI for the trailing twelve month period ended December31,2021 increased by$1.9 million or 2.5%,over the respective comparative periods.Rental revenue for the fourth quarter was$38.3 million,which represents a$6.5 million increase over the same period in the prior year.The increase is primar

111、ily driven by acquisition of 32 grocery-anchored properties,increases in rental rates from re-leasing,and new leasing typically above in-place rent from December31,2020.NOI for the fourth quarter increased by$6.2 million from the third quarter of 2021 to$31.9 million.The increase is mainly due to th

112、e full quarter contribution of NOI from the acquisitions in the third quarter and uplifts in rental rates from new leasing typically above in-place rent.In addition,during the year ended December 31,2021,the REIT executed ancillary revenue agreements at various properties within the portfolio which

113、contributed approximately$0.2 million.The REIT continues to pursue a deep pipeline of additional opportunities.Slate Grocery REITQ4 2021 MD&A17The REIT recognized net income of$20.2 million for the three month period ended December 31,2021,which is a$1.1 million decrease compared to the same period

114、in the prior year.The decrease is attributed to increases in interest and finance costs,partially offset by the aforementioned increases in NOI.FFO was$15.7 million for the quarter,which represents a$4.0 million increase from the same period in the prior year,primarily due to increases in NOI,partia

115、lly offset by increases in cash interest paid.AFFO increased by$3.6 million from the comparative period to$13.3 million.The increase is primarily due to increases in FFO,partially offset by an increase in capital expenditures Slate Grocery REITQ4 2021 MD&A18PART II LEASING AND PROPERTY PORTFOLIOLEAS

116、INGThe REIT strives to ensure that its properties are well occupied with tenants who have space that allow them to meet their own business objectives.Accordingly,the REIT proactively monitors its tenant base with the objective to renew in advance of lease maturities,backfill tenant vacancies in inst

117、ances where a tenant will not renew,or if there is an opportunity to place a stronger or more suitable tenant in the REITs properties,management endeavors to find a suitable solution.The following table summarizes the REITs leasing activity for the four most recent quarters:Square feetDeal typeQ4 20

118、21Q3 2021Q2 2021Q1 2021Less than 10,000RenewalLeases signed 36 43 29 29 Total square feet 82,743 101,996 77,489 68,200 Average base rent$19.24$16.57$16.94$18.64 Rental spread 5.4%5.4%5.3%0.3%Greater than 10,000RenewalLeases signed 5 4 4 2 Total square feet 181,288 94,535 44,999 28,351 Average base r

119、ent$9.25$11.47$13.50$6.84 Rental spread(2.0%)0.6%(0.5%)4.3%Total renewals(square feet)264,031 196,531 122,488 96,551 Less than 10,000New leaseLeases signed 20 8 16 10 Total square feet 39,776 15,940 28,960 17,049 Average base rent$18.70$16.83$17.31$17.32 Rental spread 23.3%23.8%10.9%19.3%Greater tha

120、n 10,000New leaseLeases signed 1 6 1 2 Total square feet 10,845 213,350 20,010 29,725 Average base rent$13.00$8.63$7.50$10.41 Rental spread 5.9%20.0%25.0%(3.2%)Total new leases(square feet)50,621 229,290 48,970 46,774 Total leasing activity(square feet)1 314,652 425,821 171,458 143,325 1 Includes th

121、e REITs share of joint venture investments.Leasing Spreads 4.8%16.5%(0.6)%4.5%1.4%6.6%13.9%20.5%20.2%4.9%5.1%2.8%19.4%2.9%0.8%3.4%3.4%1.5%Rental spreads on new leasesRental spreads on lease renewalsQ4 2019Q1 2020Q2 2020Q3 2020Q4 2020Q1 2021Q2 2021Q3 2021Q4 2021During the fourth quarter,management co

122、mpleted 264,031 square feet of lease renewals and 50,621 square feet of new leasing.The weighted average rental rate increase on renewals completed for leases less than 10,000 square feet was$0.99 per square foot or 5.4%higher than expiring rent.The weighted average base rent on renewals completed f

123、or leases greater than 10,000 square feet was$0.19 per square foot or 2.0%lower than expiring rent.Slate Grocery REITQ4 2021 MD&A19The weighted average base rent on all new leases completed greater than 10,000 square feet was$13.00 per square foot,which is$0.72 per square foot or 5.9%higher than the

124、 weighted average in-place rent for comparable space across the portfolio.The weighted average base rent on all new leases completed less than 10,000 square feet was$18.70,which is$3.53 per square foot or 23.3%higher than average in-place rent.Lease maturitiesThe REIT generally enters into leases wi

125、th initial terms to maturity between 5 and 10 years with our grocery-anchor tenants.The initial terms to maturity for non-anchor space tend to be of a shorter duration between 3 and 5 years.The weighted average remaining term to maturity of the REITs grocery-anchor and non-grocery-anchor tenants as

126、at December31,2021 was 5.2 years and 4.1 years,respectively,not including tenants on month-to-month leases.On a portfolio basis,the weighted average remaining term to maturity is 4.7 years.The following table summarizes the composition of the remaining term to maturity of the REITs leases at Decembe

127、r31,2021:Weighted average term to maturityGLA 1GLA%Grocery-anchor5.2 6,230,582 47.3%Non-anchor4.1 5,833,806 44.3%Total4.7 12,064,388 91.6%Month-to-month 265,236 2.0%Vacant 844,497 6.4%Total GLA 13,174,121 100.0%1 Includes the REITs share of joint venture investments.Occupancy is determined based on

128、lease commencement.The following table shows the change in occupancy during the three month period ended December 31,2021:Total GLA 1Occupied GLA 1 2OccupancySeptember 30,2021 13,174,145 12,315,936 93.5%Leasing changes 13,688%Re-measurements(24)%December 31,2021 13,174,121 12,329,624 93.6%1 Includes

129、 the REITs share of joint venture investments.2 Leasing changes include new leases,lease buyouts,expirations and terminations.Occupancy has increased 0.1%to 93.6%from September 30,2021 due to 50,621 square feet of new leasing,partially offset by shop-space vacancies.Notable new deals during the quar

130、ter included Aarons at Dorman Centre,BluRose Studios at Harper Hills Commons,and Doctors Urgent Care at Windmill Plaza,for a total of 17,590 square feet.The following table shows the change in occupancy during the year ended December 31,2021:Total GLA 1Occupied GLA 1 2OccupancyDecember 31,2020 9,554

131、,679 8,878,017 92.9%Acquisitions 3,654,196 3,363,627 92.1%Dispositions(50,000)(50,000)100.0%Leasing changes 137,980%Expansions 15,000%Re-measurements 246%December 31,2021 13,174,121 12,329,624 93.6%1 Includes the REITs share of joint venture investments.2 Leasing changes include new leases,lease buy

132、outs,expirations and terminations.Occupancy has increased by 0.7%to 93.6%from December 31,2020 due to 137,980 square feet of net new leasing and the acquisition of 32 grocery-anchored properties at a weighted average occupancy of 92.1%.New leasing comprised of Urban Air at Bloomingdale Plaza,Total W

133、ine&More at Cordova Commons,and Crunch Fitness at Stonefield Square,totaling 108,914 square feet.Slate Grocery REITQ4 2021 MD&A20The following is a profile of the REITs leases excluding the impact of tenant extension options:Grocery-anchorNon-anchorTotalGLA expirationGLAPercentage of portfolioAverag

134、e in-place rentGLAPercentage of portfolioAverage in-place rentGLAPercentage of portfolioAverage in-place rentMonth-to-month%$265,236 2.0%$14.53 265,236 2.0%$14.53 2022 388,314 2.9%6.87 797,372 6.1%14.25 1,185,686 9.0%11.83 2023 823,349 6.2%7.20 1,003,395 7.6%14.79 1,826,743 13.8%11.37 2024 1,282,494

135、 9.8%8.57 862,840 6.5%16.08 2,145,334 16.3%11.59 2025 662,224 5.0%8.32 739,843 5.6%14.20 1,402,067 10.6%11.42 2026 917,848 7.0%9.26 637,307 4.9%15.44 1,555,155 11.9%11.80 2027 and later 2,156,352 16.4%9.96 1,793,049 13.6%13.21 3,949,401 30.0%11.44 Vacant%N/A 844,497 6.4%N/A 844,497 6.4%N/ATotal/weig

136、hted average 1 6,230,581 47.3%$8.84 6,943,539 52.7%$14.42 13,174,119 100.0%$11.60 1 Includes the REITs share of joint venture investments.The REIT endeavors to proactively lease upcoming expiries in advance of maturity to de-risk the portfolio,maintain high occupancy levels,ensure a proper mix of te

137、nants at each property and certainty in cash flows.The following is a table of lease expiries at December31,2021 and pre-existing future maturities that were leased in advance during 2021:Lease Expiries and Pre-existing Future MaturitiesThe following table summarizes remaining expiries:December 31,2

138、021September 30,2021June 30,2021March 31,2021GLA ExpirationNumber of tenantsGLANumber of tenantsGLANumber of tenantsGLANumber of tenantsGLAAnchors6 388,314 Non-anchors286 797,372 48 155,667 81 225,909 129 374,499 Remaining expiries 1292 1,185,686 48 155,667 81 225,909 129 374,499 Percentage of occup

139、ied portfolio 1 9.6%1.3%2.5%3.8%1 Includes the REITs share of joint venture investments.At December31,2021,remaining 2022 expiries represents 9.6%of the portfolios occupied GLA,with 797,372 square feet related to non-anchor tenants.Comparatively,at September30,2021 remaining 2021 expiries totaled 15

140、5,667 or 1.3%of the occupied gross leasable area for the portfolio.At June30,2021 remaining 2021 expires totaled 225,909 equating to 2.5%of the occupied portfolio.At March31,2021,remaining 2021 expiries totaled 374,499 equating to 3.8%of the occupied portfolio.Slate Grocery REITQ4 2021 MD&A21Retenti

141、on ratesThe asset management team strives to maintain strong relationships with all tenants,especially the REITs grocery-anchor tenants.In certain cases,management has not sought renewals with larger tenants,including in cases where a better user is available,or a redevelopment opportunity exists.Ma

142、nagement believes that this success is a result of the strong relationships maintained with tenants and the REITs underwriting which,in part,considers the relative strength of grocery-anchors in the respective market,recent capital investment by grocers and,where possible,the profitability of the st

143、ore.Management expects a lower retention rate for our non-grocery-anchor tenants as a result of the dynamics and natural turnover of certain businesses over time which gives us opportunity to re-lease space,potentially at higher rates,and improve overall credit and tenant mix.The following are the R

144、EITs retention rates for the three and twelve month periods ended December 31,2021,and the year ended December31,2020 for both grocery-anchor and non-grocery-anchor tenants:Retention rate 1Three months endedDecember 31,2021Year ended December 31,2021Year endedDecember 31,2020Grocery-anchor 100.0%87.

145、8%97.8%Non-grocery-anchor 87.8%99.4%87.7%Net total/weighted average 2 93.6%93.5%92.8%1 Retention rate excludes instances where management has not sought a renewal,primarily related to redevelopment or property portfolio management opportunities.2 Includes the REITs share of joint venture investments

146、.The following are the REITs incremental change in base rent for the four most recent quarters:For the three months ended,December 31,2021September 30,2021June 30,2021March 31,2021RenewalsSquare feet 264,031 196,531 122,488 96,551 Expiring rent per square foot 1$12.20$13.65$15.16$15.05 Rent spread p

147、er square foot 1 0.18 0.47 0.51 0.12 VacatedSquare feet 2 33,658 54,650 32,336 40,651 Expiring rent per square foot 1$16.08$12.67$15.90$20.42 NewSquare feet 50,621 229,290 48,970 46,774 New rent per square foot 1$17.48$9.20$13.30$12.93 Total base rent retained 3$2,680$1,990$1,343$623 Incremental bas

148、e rent 3$932$2,202$714$616 1 Calculated on a weighted average basis.2 Adjusted for lease buyouts and vacancies due to redevelopment.3 Includes the REITs share of joint venture investments.In-place and market rentsThe REITs leasing activity during the three month period ended December 31,2021 is as f

149、ollows:GLANumber of tenantsWeighted average expiring rentWeighted average new rentRenewed leases 264,031 41$12.20$12.38 New leases 50,621 21 N/A 17.48 Total/weighted average 314,652 62$12.20$13.20 Less,leases not renewed/vacated during term 1(33,658)(17)$16.08 N/ANet total/weighted average 2 280,994

150、 45 N/A$13.20 1 Adjusted for lease buyouts and vacancies due to redevelopment.2 Includes the REITs share of joint venture investments.Slate Grocery REITQ4 2021 MD&A22The REITs leasing activity during the year ended December 31,2021 is as follows:GLANumber of tenantsWeighted average expiring rentWeig

151、hted average new rentRenewed leases 679,601 152$13.56$13.87 New leases 375,655 64 N/A 11.31 Total/weighted average 1,055,256 216$13.56$12.96 Less,leases not renewed/vacated during term 1(161,295)(60)$15.98 N/ANet total/weighted average 2 893,961 156 N/A$12.96 1 Adjusted for lease buyouts and vacanci

152、es due to redevelopment.2 Includes the REITs share of joint venture investments.Net rental ratesThe following table is a summary of in-place rent for the eight most recent financial quarters of the REIT:Q4 2021Q3 2021Q2 2021Q1 2021Q4 2020Q3 2020Q2 2020Q1 2020Grocery rent$8.84$8.81$8.39$8.43$8.38$8.3

153、5$8.28$8.18 Shop space rent 14.42 14.39 14.61 14.27 14.73 14.98 14.64 14.03 Total 1$11.60$11.57$11.39$11.29$11.43$11.55$11.39$11.10 Market rent 2$12.12$11.95$11.56$11.72$11.69$11.81$11.71$11.69 1 Includes the REITs share of joint venture investments.2 Market rent represents the REITs estimate of mar

154、ket rents for its properties on a weighted average basis.Market rents are determined based,in part,on broker feedback,market transactions and completed deals.In-place Rent Versus Estimated Market Rent$10.63$10.55$10.74$10.79$10.84$11.03$10.99$11.22$11.10$11.39$11.55$11.43$11.29$11.39$11.57$11.60$11.

155、16$11.27$11.45$11.46$11.61$11.73$11.80$11.82$11.69$11.71$11.81$11.69$11.72$11.56$11.95$12.12In-place rentMarket rent per square footQ12018Q22018Q32018Q42018Q12019Q22019Q32019Q42019Q12020Q22020Q32020Q42020Q12021Q22021Q32021Q42021The REIT leases to high-quality tenants in well located centres typicall

156、y below the average market rent for U.S.strip centres,allowing for increased value in the portfolio through rental rate growth.ACQUISITIONSThe REIT explores acquisition opportunities as they arise but will pursue only acquisitions that management believes are accretive to net asset value per unit in

157、 the medium-term relative to its long-term cost of capital.Slate Grocery REITQ4 2021 MD&A23During the year ended December 31,2021,the REIT acquired the following properties:PropertyPurchase dateLocationPurchase priceSFPrice per SFAnchor tenantBells Fork SquareFebruary 10,2021Greenville,North Carolin

158、a$9,250 71,666$129 Harris TeeterParkway StationFebruary 10,2021Warner Robins,Georgia 7,892 94,317 84 KrogerWestin CenterFebruary 10,2021Fayetteville,North Carolina 8,091 66,890 121 Food LionTanglewood CommonsFebruary 10,2021Clemmons,North Carolina 15,089 78,520 192 Harris TeeterMission Hills Shoppin

159、g CenterFebruary 10,2021Naples,Florida 13,863 85,078 163 Winn-DixieGlenlake PlazaJuly 15,2021Indianapolis,Indiana 8,500 104,679 81 KrogerBloomingdale Plaza outparcelJuly 29,2021Brandon,Florida 582 Urban AirPrairie PointSeptember 9,2021Aurora,Illinois 15,250 91,535 167 MarianosTops Portfolio 1Septemb

160、er 22,2021New York,Ohio and Georgia 136,100 1,445,468 94 Tops Markets and KrogerTom Thumb Portfolio 2September 22,2021Texas,Florida and California 137,620 948,098 145 Tom Thumb,Walmart and RaleysOther Grocery Portfolio 2September 22,2021 New York and Indiana 116,280 667,946 174 Stop&Shop,Price Chopp

161、er,Acme Markets,and Strack&Van TilTotal/weighted average$468,517 3,654,197$128 1 As a result of the acquisition of the management rights and other factors it was determined that the REIT obtained control with respect to its 90.0%investment in Tops Portfolio.2 As a result of the acquisition of the as

162、sets and other factors the REIT is deemed to have joint control over relevant decisions and activities of the joint venture.In aggregate,the Acquisition represents a weighted average capitalization rate of 7.8%or$128 per square foot.DISPOSITIONOn April 1,2021,the REIT disposed of a property outparce

163、l at 11 Galleria in Greenville,North Carolina for$4.1 million.There are no fees incurred by the REIT to the Manager in relation to the disposition of properties or outparcels.Slate Grocery REITQ4 2021 MD&A24PROPERTY PROFILEProfessional managementThrough professional management of the portfolio,the R

164、EIT intends to ensure its properties portray an image that will continue to attract consumers as well as provide preferred locations for its tenants.Well-managed properties enhance the shopping experience and ensure customers continue to visit the centres.Professional management of the portfolio has

165、 enabled the REIT to maintain a high occupancy level,currently 93.6%at December31,2021(September 30,2021 93.5%,June 30,2021 93.2%,March 31,2021 93.1%,December 31,2020 92.9%).Occupancy has increased by 0.1%to 93.6%from September 30,2021,mainly due to 50,621 square feet of new leasing.Notable new deal

166、s during the quarter included Aarons at Dorman Centre,BluRose Studios at Harper Hills Commons,and Doctors Urgent Care at Windmill Plaza,for a total of 17,590 square feet.The following table shows the occupancy rate of the REITs portfolio:20172018201920202021Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Proper

167、ties 1848686868685 84 83 79 76 72 77 76 75 80 80 107 107 Occupancy 1 92.6%93.7%93.7%93.9%94.3%94.2%93.3%93.3%94.4%93.0%92.8%92.2%92.5%92.9%93.1%93.2%93.5%93.6%1 Includes the REITs share of joint venture investments.Historical Occupancy Rates93%94%94%94%94%94%93%93%94%93%93%92%93%93%93%93%93%94%84868

168、686868584837976727776758080107107OccupancyPropertiesQ3 2017Q4 2017Q1 2018Q2 2018Q3 2018Q4 2018Q1 2019Q2 2019Q3 2019Q4 2019Q1 2020Q2 2020Q3 2020Q4 2020Q1 2021Q2 2021Q3 2021Q4 2021Geographic overviewThe REITs portfolio is geographically diversified.As of December31,2021,the REITs 107 properties were l

169、ocated in 23 states with a presence in 47 MSAs.The REIT has 54 properties,or 50.5%of the total portfolio,located in the U.S.sunbelt region.Markets within this region benefit from strong underlying demographic trends,above average employment and population growth.This provides the REIT opportunities

170、to progressively drive operational efficiencies and sustainable growth.Slate Grocery REITQ4 2021 MD&A25The following is a summary of the geographic location and relative dispersion of the REITs property portfolio:StateNumber of assetsTotal SFOccupied SFPercentage of revenueOccupancyNew York12 1,688,

171、940 1,485,286 13.9%87.9%Florida13 1,536,507 1,468,732 13.0%95.6%North Carolina14 1,517,133 1,434,997 11.5%94.6%Pennsylvania 6 1,024,017 976,311 7.3%95.3%Texas9 832,038 780,313 6.6%93.8%South Carolina5 845,283 813,900 6.1%96.3%Georgia8 831,316 797,563 5.9%95.9%Minnesota 5 566,782 538,088 4.3%94.9%Vir

172、ginia 5 479,835 461,225 4.2%96.1%Michigan 5 603,413 566,377 3.9%93.9%Tennessee5 526,641 520,403 3.0%98.8%Illinois4 408,776 351,649 3.0%86.0%Ohio3 541,239 501,245 2.9%92.6%North Dakota2 261,578 227,122 2.5%86.8%West Virginia2 387,162 375,102 2.3%96.9%Indiana2 233,993 200,564 1.7%85.7%California1 194,

173、873 170,316 1.6%87.4%Maryland1 112,274 104,514 1.3%93.1%New Hampshire1 151,946 141,640 1.2%93.2%Wisconsin1 123,028 123,028 1.1%100.0%Utah1 127,507 124,353 1.0%97.5%Colorado1 98,975 93,279 1.0%94.2%Kentucky1 80,866 73,617 0.7%91.0%Total 1107 13,174,121 12,329,624 100.0%93.6%1 Includes the REITs share

174、 of joint venture investments.Slate Grocery REITQ4 2021 MD&A26Tenant categoriesAs of December31,2021,the REIT has the following tenant categories within the portfolio,allocated by base rent:38.8%14.9%13.7%12.8%5.2%4.5%3.9%1.9%1.9%1.3%1.1%Supermarkets and groceryOther essential servicesMedical&Person

175、al ServicesRestaurantsFitness facilitiesDiscount and off-priceFinancial institutionsDollar storesLiquor storesSporting and footwearPharmacyThe REITs portfolio of tenants is a diversified mix of leading grocers,national brands and strong regional performers complemented by local operators providing n

176、eeded services and goods to their local communities.These retailers provide significant non-discretionary e-commerce defensive goods.The REITs properties,which are located in well-established neighborhoods,allow grocery-anchored property real estate and economics of last mile delivery to be viable.A

177、nchor tenantsThe REIT endeavors to own properties with anchors who are dominant in their respective regions in terms of operational scale and sales.Accordingly,the REITs anchor tenants are often either the first or second dominant store in their respective area in terms of market share.The following

178、 table identifies the REITs largest anchor tenants including their annual minimum rent,the number of stores,GLA as a percentage of the total portfolio and the percentage of base rent.The Kroger Co.represents the REITs largest tenant by base rent with a total of 26 stores and 8.1%of base rent.The lar

179、gest 15 tenants account for 46.5%of total GLA and 37.8%of base rent as follows:Parent companyStore brandsGroceryStores%GLABase rent%Base rentThe Kroger Co.Kroger,Pick n Save,Harris Teeter,MarianosY2611.3%$11,636 8.1%Walmart,Inc.Wal-Mart,Sams ClubY910.1%8,918 6.2%Koninklijke Ahold Delhaize N.V.Stop&S

180、hop,GIANT,Food Lion,HannafordY103.8%6,486 4.5%Albertsons Companies,Inc.Jewel Osco,Acme,Tom ThumbY94.1%4,529 3.2%Tops Friendly MarketsTops MarketsY83.4%4,466 3.2%Publix Super Markets,Inc.PublixY113.8%4,097 2.8%United Natural Foods,Inc.Cub Foods,Shop n Save,County MarketY41.6%2,084 1.4%Dollar Tree,Inc

181、.Dollar Tree,Family Dollar N201.5%2,071 1.4%Coborns Inc.Cash WiseY20.9%2,038 1.4%Southeastern GrocersWinn DixieY51.5%1,687 1.2%TJX CompaniesMarshalls,T.J.Maxx,HomeGoodsN61.2%1,503 1.0%Bealls,Inc.Bealls,Burkes N51.2%1,342 0.9%Alex Lee Inc.Lowes FoodsY20.7%1,249 0.9%Weis Markets,Inc.Weis MarketsY20.9%

182、1,223 0.8%Golub CorporationMarket 32Y10.5%1,180 0.8%Total 112046.5%$54,509 37.8%1 Includes the REITs share of joint venture investments.Slate Grocery REITQ4 2021 MD&A27DevelopmentThe REITs redevelopment program is focused on growing income and unlocking value by revitalizing tenant uses and creating

183、 a better customer experience at select properties.Redevelopment is generally considered to begin when activities that change the condition of the property commence.Redevelopment ceases when the asset is in the condition and has the capability of operating in the manner intended,which is generally a

184、t cessation of construction and tenanting.For purposes of reporting same-property NOI,redevelopment assets are excluded from the same-property portfolio in the period in which they are re-classified as a redevelopment property and are excluded until they are operating as intended in all of both the

185、current and comparative periods.The carrying value of redevelopment properties includes the acquisition cost of property and direct redevelopment costs attributed to the project.The REIT does not capitalize interest for its projects under development.Interest expense is recognized as incurred in inc

186、ome which is not comparable to other REITs or other corporations that capitalize interest.The REIT has classified the following properties as redevelopment properties:Estimated incrementalNOI 1Estimated yield on cost(YOC)Nature of redevelopmentExpected completionPre-leased percentageEstimated invest

187、mentPropertyIncurred RemainingTotalEastpointe Shopping CenterAnchor repositioningQ2 2022$523 9.6%100.0%$4,091$1,332$5,423 Stonefield SquareAnchor repositioningQ2 2022 466 38.0%100.0%368 858 1,226 Southgate CrossingJunior anchor repositioningQ2 2022 198 7.8%78.4%196 2,330 2,526 Wedgewood Commons Anch

188、or repositioningQ4 2022 969 7.2%85.6%8,729 4,771 13,500 Total$2,156 9.5%$13,384$9,291$22,675 Completed redevelopment projectsEstimated incremental NOI 1YOCWeighted Average YOCLeased percentageNature of redevelopmentCompletedTotal investedPropertyWestminster Plaza 2Anchor repositioningQ1 2021$898 25.

189、4%5.9%100.0%$3,531 Windmill Plaza 3Anchor repositioningQ2 2021 404 7.1%2.6%93.9%5,652 Mapleridge CenterAnchor repositioningQ2 2021 771 13.8%5.1%90.7%5,600 Battleground VillageAnchor repositioningQ3 2021 62 15.9%0.4%100.0%390 Total$2,135 14.1%14.0%$15,173 1 Calculated on a trailing twelve month basis

190、 as of December31,2021.2 Amounts represent development for primary anchor at the property.3 Amount at the REITs share of its joint venture investment.Redevelopment capital spent during the three and twelve month periods ended December 31,2021 is as follows:Three months endedDecember 31,2021Year ende

191、d December 31,2021Wedgewood Commons 1$976$7,235 Mapleridge Center 114 4,678 Eastpointe Shopping Center 45 3,808 Westminster Plaza 1 403 2,878 Stonefield Square 197 367 Other redevelopment costs 1 2 1,165 5,109 Total redevelopment$2,900$24,075 1 Relates to new outparcel development as well as work co

192、mpleted in the planning stages for redevelopment projects.2 Amount at the REITs share of its joint venture investment.Stonefield Square is an 80,000 square foot shopping centre formerly anchored by The Fresh Market.The centre is located in a dominant retail trade area on the east side of Louisville,

193、Kentucky with close proximity to downtown and surrounded by dense residential communities.This asset is centrally located along Shelbyville Road,the primary retail and commercial artery in Middletown,where average household income is approaching$0.1 million.The Fresh Market vacated a 20,000 square f

194、oot box at the end of their lease term in December 2019,presenting an opportunity for the REIT to backfill the space at higher rental rates with a longer weighted average lease term.In August 2021,the REIT signed a 10-year lease with Crunch Fitness,a full-service gym operator,for 26,000 square feet

195、at a double digit rental rate spread.In addition to the former Fresh Market box,Crunch Fitness is leasing four incremental units,two of which were previously vacant.In connection with backfilling the centres anchor tenant,the REIT is investing significant capital to upgrade the building and common a

196、rea facilities including improved signage,parking lot,landscaping and LED lighting upgrades.Eastpointe Shopping Center is a regional shopping destination in Clarksburg,West Virginia anchored by a Kroger which includes a former K-mart box and in line shop tenants.The centre is located in the areas mo

197、st prominent retail node at the junction of two major state highways.Kroger has Slate Grocery REITQ4 2021 MD&A28executed a 25-year term lease to relocate from their 55,000 square foot box and build a brand new 83,000 square foot store in the former K-Mart premises with rent commencement in the fourt

198、h quarter of 2020.Construction commenced in the first quarter of 2020 and was completed in the first quarter of 2021.In the third quarter of 2020 the REIT executed a 10-year term lease with Hobby Lobby to occupy the prior 55,000 square foot Kroger box.Hobby Lobby construction and rent commencement i

199、s expected in the second quarter of 2022.In addition to the construction of Kroger and Hobby Lobby,the REIT completed common area refurbishments to include the faade,parking lot,landscaping,and LED lighting upgrades,as required by the anchor leases.The REIT expects to invest$5.4 million in capital t

200、o complete the tenant build outs and common area refurbishments.Krogers new store opened to the public on January 20,2021 and is now the largest Kroger in the state of West Virginia.Southgate Crossing is a 160,000 square foot shopping centre located in Minot,North Dakota and is anchored by the marke

201、t-leading Cash Wise Foods.Gordmans,which is an off-price department chain owned by Stage Stores,formerly occupied the 51,000 square foot junior anchor box until the third quarter of 2020.Management backfilled 16,000 square feet at higher rental rates and improved tenant quality in the first quarter

202、of 2021,securing a 10-year lease with Harbor Freight Tools,a national discount tool and equipment retailer.Harbor Freight opened in June of 2021 with rent commencing in the third quarter of 2021.The REIT is in active discussions with national tenants to occupy the remaining 34,000 square feet.Wedgew

203、ood Commons is a 153,000 square foot shopping centre anchored by a Publix supermarket.The shopping centre is strategically located on U.S.Route 1 Highway at Indian Road,in Stuart,Florida.Key tenants in the development include Bealls Outlet,Dollar Tree and Harbor Freight Tools.The REIT has finalized

204、a 20-year term lease to construct a new 47,000 square foot flagship Publix grocery store.To coincide with the new Publix grocery store,the REIT has secured a 10-year lease extension to relocate and expand the Bealls Outlet to 30,000 square feet which will include a Bealls Home Centric concept store.

205、Furthermore,the REIT is negotiating with several junior anchor prospects to lease the remaining vacancy within the shopping centre.The net result will increase GLA to approximately 166,000 square feet and the weighted average lease term from 3.7 years to 10.8 years.In addition to the construction of

206、 the Publix and Bealls Outlet and Home Centric,the REIT will complete an extensive common area refurbishment.The REIT expects to invest$13.5 million in redevelopment,with Publix opening and completion of the overall project by the end of the 2022 year.Completed redevelopment projects Battleground Vi

207、llage is a 73,000 square foot property located in Greensboro,North Carolina.Formerly anchored by Earth Fare,the property is well situated at one of the busiest thoroughfares in the MSA.In 2020,Management engaged in a strategic releasing effort that resulted in a 15-year lease with Aldi,which has a s

208、ignificantly higher grade credit.There is limited capital investment,which totals$0.4 million,and relates to parking lot and lighting upgrades.Aldi opened in the third quarter of 2021.Windmill Plaza is a grocery-anchored shopping centre located in Sterling Heights,Michigan,in a joint-venture partner

209、ship with The Kroger Company.The shopping centre includes a brand new 129,000 square foot Kroger Marketplace,an improved in-line faade and a completely redesigned parking lot,landscaping and lighting system.Executed leases include a 25-year ground lease with Kroger as the anchor tenant and junior an

210、chor tenants which include Edge Fitness for 37,000 square feet and Pet Supplies Plus for 8,000 square feet.The property is occupied at 93.9%.Kroger and Edge Fitness commenced operations in January 2020.Mapleridge Center is a 115,000 square foot community shopping centre strategically located along W

211、hite Bear Avenue within the main retail node in Maplewood,Minnesota.The centre was acquired in the third quarter of 2017 and at the time was anchored by a Rainbow Foods grocery outlet store.Management strategically terminated the anchor tenant in the fourth quarter of 2019 and signed a lease with Hy

212、-Vee to take the former Rainbow Foods premises and an additional unit which is used as a liquor store.As part of the new grocery and liquor store lease,the REIT completed a significant capital investment in the centre totaling$5.6 million.In the first quarter of 2020,the grocery anchor lease was exe

213、cuted with rent commencement in the first quarter of 2021.The Hy-Vee liquor store opened to the public on December 18,2020 and the grocery store opened June 2021.Westminster Plaza is a 99,000 square foot shopping centre formerly anchored by Safeway.The centre is located seven miles immediately north

214、 of downtown Denver with direct access to multiple major highways.This asset experiences heavy traffic volumes along Federal Boulevard,a primary retail and commercial roadway in Westminster,Colorado where population density is approximately 150,000 in a 3-mile radius.Additional density is forthcomin

215、g due to a community gentrification project being led by the City of Westminster.The plan is centralized around a recently completed light-rail transit station located a quarter mile from the property and the planned redevelopment of the surrounding land and industrial property into single and multi

216、-family residential.Safeway vacated a 56,000 square foot box at the end of their lease term in December 2019.The REIT re-leased the vacant anchor space to VASA Fitness,a regional full-service gym operator.The deal saw both parties invest significant capital into the premises and shopping centre and

217、enabled the REIT to grow NOI and weighted average lease term significantly.VASA fitness opened in the first quarter of 2021.The REIT also completed the development of a pad,which includes a new 7,500 square foot building with Chipotle,Dunkin Donuts,Buffalo Wild Wings and Tropical Smoothie in operati

218、on.IFRS FAIR VALUEThe REITs property portfolio at December31,2021 had an estimated IFRS fair value of$1.6 billion,with a weighted average capitalization rate of 7.10%and on a proportionate basis,the fair value is$1.9 billion.Overall,the average estimated IFRS value per square foot of the REITs portf

219、olio is$144.The following table presents a summary of the capitalization rates used to estimate the fair value of the REITs properties:Direct capitalization ratesDecember 31,2021December 31,2020Minimum 1 5.75%6.00%Maximum 1 13.00%9.50%Weighted average 1 7.10%7.34%1 Includes the REITs share of joint

220、venture investments.Slate Grocery REITQ4 2021 MD&A29The December31,2021 weighted average capitalization rate decreased to 7.10%from 7.34%at December31,2020.The decrease in the weighted average capitalization rate is driven primarily by increased buyer demand for grocery-anchored strip centres and va

221、lue-add asset management activities which includes anchor tenant renewals and repositionings,tenant credit enhancement through strategic leasing,capital investments and improvements.The fair value of properties is measured individually without consideration to their aggregate value on a portfolio ba

222、sis.No consideration is given to diversification benefits related to single property tenant risk and geography,the value of assembling a portfolio or to the utilization of a common management platform,amongst other benefits.As a result,the fair value of the REITs properties taken in aggregate may di

223、ffer from the fair value of properties measured individually in the REITs consolidated statements of financial position.Depending on the duration and impacts of the COVID-19 pandemic,certain aspects of the REITs operations could be affected,including rental and occupancy rates,demand for retail spac

224、e,capitalization rates,and the resulting value of the REITs properties.Based on the REITs operations to date,property valuations have not been materially impacted by the COVID-19 pandemic.The REIT believes property valuations are appropriate as at December31,2021.The change in properties is as follo

225、ws:Three months ended December 31,Year ended December 31,2021202020212020Beginning of the period$1,608,040$1,274,175$1,277,180$1,288,536 Acquisitions 192 234,280 91,785 Capital expenditures 1,238 839 4,688 2,741 Leasing costs 494 293 1,563 1,341 Tenant improvements 700 526 2,175 3,409 Development an

226、d expansion capital 1 2,703 2,274 23,708 6,558 Straight-line rent(104)375 345 1,556 Dispositions (20,385)(4,100)(133,635)IFRIC 21 property tax adjustment 5,418 5,568 1,526 802 Change in fair value 2(10,026)13,515 67,290 14,087 End of the period 1$1,608,655$1,277,180$1,608,655$1,277,180 Joint venture

227、 investment properties 293,400 10,845 293,400 10,845 End of the period,including joint venture investments 1$1,902,055$1,288,025$1,902,055$1,288,025 1 The fair value of the REITs properties under redevelopment for the year ended December 31,2021 is$111.9 million(2020$95.4 million).2 Change in fair v

228、alue includes impacts due to valuation parameters,cash flows and accounting adjustments for IFRIC 21 property tax and straight-line rent.The following table is a reconciliation of the fair value of the REITs properties using a non-GAAP measure.The non-GAAP measure includes figures that are recorded

229、as an equity investment,information that is not explicitly disclosed or presented in the consolidated financial statements for the three and twelve month periods ended December 31,2021.Three months ended December 31,2021Three months ended December 31,2020ConsolidatedJoint venture investmentsProporti

230、onate Share(Non-GAAP)ConsolidatedJoint venture investmentsProportionate Share(Non-GAAP)Beginning of the period$1,608,040$273,802$1,881,842$1,274,175$11,042$1,285,217 Acquisitions 192 (1,726)(1,534)Capital expenditures 1,238 39 1,277 839 839 Leasing costs 494 100 594 293 293 Tenant improvements 700 (

231、48)652 526 526 Development and expansion capital 1 2,703 198 2,901 2,274 8 2,282 Straight-line rent(104)123 19 375 375 Dispositions (20,385)(20,385)IFRIC 21 property tax adjustment 5,418 1,176 6,594 5,568 12 5,580 Change in fair value 2(10,026)19,736 9,710 13,515 (217)13,298 End of the period 1$1,60

232、8,655$293,400$1,902,055$1,277,180$10,845$1,288,025 1 The fair value of the REITs properties under redevelopment for the year ended December 31,2021 is$111.9 million(2020$95.4 million).2 Change in fair value includes impacts due to valuation parameters,cash flows and accounting adjustments for IFRIC

233、21 property tax and straight-line rent.Slate Grocery REITQ4 2021 MD&A30Year ended December 31,2021Year ended December 31,2020ConsolidatedJoint venture investmentsProportionate Share(Non-GAAP)ConsolidatedJoint venture investmentsProportionate Share(Non-GAAP)Beginning of the period$1,277,180$10,845$1,

234、288,025$1,288,536$11,227$1,299,763 Acquisitions 234,280 257,330 491,610 91,785 91,785 Capital expenditures 4,688 39 4,727 2,741 2,741 Leasing costs 1,563 98 1,661 1,341 1,341 Tenant improvements 2,175 (48)2,127 3,409 3,409 Development and expansion capital 1 23,708 444 24,152 6,558 1,442 8,000 Strai

235、ght-line rent 345 138 483 1,556 1,556 Dispositions(4,100)(4,100)(133,635)(133,635)IFRIC 21 property tax adjustment 1,526 1,306 2,832 802 802 Change in fair value 2 67,290 23,248 90,538 14,087 (1,824)12,263 End of the period 1$1,608,655$293,400$1,902,055$1,277,180$10,845$1,288,025 1 The fair value of

236、 the REITs properties under redevelopment for the year ended December 31,2021 is$111.9 million(2020$95.4 million).2 Change in fair value includes impacts due to valuation parameters,cash flows and accounting adjustments for IFRIC 21 property tax and straight-line rent.Capital,leasing and tenant impr

237、ovement costs for the three and twelve month periods ended December 31,2021 was$2.4 million and$8.4 million,respectively.Such costs are generally expended for purposes of tenanting and renewing existing leases,which maintain and create value at the REITs properties and the portfolio as a whole by in

238、creasing contractual cash flow through new and extended leases.The REIT will continue to capitalize on opportunities to revitalize,undertake space improvements and generally maintain the high quality of the properties and tenants.These expenditures can vary from period to period,at times significant

239、ly,depending upon the timing of lease expires,re-leasing and managements capital plan for the period.Fair value adjustments on propertiesFor the three month period ended December 31,2021,the fair value decreased by$23.5 million primarily due to changes in valuation parameters and cash flows.For the

240、year ended December 31,2021,the REIT recorded a fair value gain on properties of$67.3 million,and an increase of$53.2 million over the comparative period.This is mainly due to changes in valuation parameters and cash flows,partially offset by an increase in transaction costs capitalized.The followin

241、g table presents the impact of certain accounting adjustments on the fair value gain recorded versus managements estimate of future cash flows and valuation assumptions:Three months ended December 31,Year ended December 31,2021202020212020Valuation parameters and cash flows$(4,520)$19,458$73,022$18,

242、130 Transaction costs capitalized(192)(3,861)(1,685)IFRIC 21 property tax adjustment(5,418)(5,568)(1,526)(802)Adjusted for straight-line rent 104 (375)(345)(1,556)Total$(10,026)$13,515$67,290$14,087 The fair value change of properties is impacted by IFRIC 21 property tax adjustments recorded on the

243、REITs portfolio.For acquisition purposes the REIT determines the obligating event for property taxes is ownership of the property on the first of January of the fiscal year.As a result,the annual property tax liability and expense has been recognized on the properties owned on the first of January o

244、f each year,with a corresponding increase to the fair value of properties that is reversed as the liability is settled through property tax installments.The change in fair value of properties recorded in income excludes the impact of tenanting and leasing costs,landlord work,and development and expa

245、nsion capital,not all of which are additive to value but are directly capitalized to the property.Slate Grocery REITQ4 2021 MD&A31PART III RESULTS OF OPERATIONSSUMMARY OF SELECTED QUARTERLY INFORMATIONThe selected quarterly information highlights performance over the most recently completed eight qu

246、arters and is reflective of the timing of acquisitions,leasing and maintenance expenditures.Similarly,debt reflects financing activities related to acquisitions which serve to increase AFFO in the future,as well as ongoing financing activities for the existing portfolio.Accordingly,rental revenue,NO

247、I,NAV,FFO and AFFO are reflective of changes in the underlying income-producing asset base and changing leverage.Quarter endedQ4 2021Q3 2021Q2 2021Q1 2021Q4 2020Q3 2020Q2 2020Q1 2020 Rental revenue$38,348$34,079$33,377$32,471$31,872$31,961$30,255$32,042 Property operating expenses 1(6,128)(4,809)(4,

248、920)(21,560)(3,512)(4,649)(3,972)(22,496)Straight-line rent revenue 104 (8)(276)(165)(375)(530)(237)(414)IFRIC 21 property tax adjustment 1(5,418)(4,227)(4,278)12,397 (5,568)(4,115)(3,994)12,875 Adjustments for joint venture investments 4,979 612 134 142 166 431 100 64 NOI 2$31,885$25,647$24,037$23,

249、285$22,583$23,098$22,152$22,071 Class U units outstanding 60,060 60,050 48,620 48,611 48,597 42,226 42,217 42,203 WA units 60,054 49,742 48,615 48,597 43,752 42,222 42,208 42,196 Net income(loss)3$20,191$9,603$(3,141)$60,775$21,268$7,630$6,888$5,819 Net income(loss)per WA unit 3$0.34$0.19$(0.06)$1.2

250、5$0.49$0.18$0.16$0.14 NAV 4$738,091$717,822$609,946$605,994$531,891$449,858$445,189$445,383 NAV per unit 4$12.29$11.95$12.55$12.47$10.94$10.65$10.55$10.55 Distributions declared$12,927$11,283$10,460$10,460$9,545$9,087$9,087$9,087 Distributions per unit$0.2160$0.2160$0.2160$0.2160$0.2160$0.2160$0.216

251、0$0.2160 FFO 3 5 6$15,684$13,686$12,545$11,529$11,684$11,487$11,115$11,160 FFO per WA units 3 5 6 7$0.26$0.28$0.26$0.24$0.27$0.27$0.26$0.26 AFFO 3 5 6$13,266$11,478$10,398$9,450$9,651$8,954$9,046$8,748 AFFO per WA units 3 5 6 7$0.22$0.23$0.21$0.19$0.22$0.21$0.21$0.21 Total assets(IFRS)$1,737,162$1,7

252、15,471$1,552,511$1,539,994$1,323,554$1,302,849$1,300,866$1,249,525 Debt$937,744$928,122$766,997$766,616$726,373$777,526$781,002$735,206 Debt/GBV 8 54.0%54.1%53.0%53.5%54.9%59.7%60.0%58.8%Number of properties 3 107 107 80 80 75 76 77 72 Leased(%)3 93.6%93.5%93.2%93.1%92.9%92.5%92.2%92.8%GLA 3 13,174,

253、121 13,174,145 9,916,435 9,959,075 9,554,679 9,728,179 9,832,109 9,507,881 Grocery-anchored GLA 3 6,230,582 6,230,582 4,775,292 4,738,479 4,614,178 4,724,183 4,785,050 4,417,825 1 In accordance with IFRIC 21,the REIT recognizes the annual property tax liability and expense on its existing properties

254、 on January 1st,rather than progressively,i.e.ratably,throughout the year.2 Refer to non-IFRS financial measures on page 16.3 Includes the REITs share of joint venture investments.4 The first and second quarters of 2021 are adjusted to exclude the impact of the REITs bought deal public offering of 1

255、1.4 million subscription receipts for gross proceeds of$133.0 million.5 Adjusting to exclude the impact of$169.0 million debt refinancing in the first quarter of 2021,FFO and FFO per unit would be$11.8 million and$0.24,respectively and AFFO and AFFO per unit would be$9.8 million and$0.20,respectivel

256、y.6 Adjusting to exclude the impact of the refinanced credit facility and extinguished mortgage in the first quarter of 2020,FFO and FFO per unit would be$11.5million and$0.27,respectively,and AFFO and AFFO per unit would be$9.1million and$0.21,respectively.7 Adjusting for September 2021 distributio

257、n in respect of the 11.4million units issued for the Acquisition in the third quarter of 2021,the REITs FFO and AFFO payout ratio would be 76.5%and 91.2%,respectively.8 Excludes subscription receipt funds in escrow for first and second quarter of 2021.Slate Grocery REITQ4 2021 MD&A32NON-IFRS RECONCI

258、LIATIONS AND FINANCIAL MEASURES The following table provides a reconciliation of the REITs statement of financial position,as presented in its consolidated financial statements,to its proportionate interest.December 31,2021December 31,2020Statement of Financial PositionJoint Venture InvestmentsPropo

259、rtionate Share(Non-GAAP)Statement of Financial PositionJoint Venture InvestmentsProportionate Share(Non-GAAP)ASSETSNon-current assetsProperties$1,608,655$293,400$1,902,055$1,277,180$10,845$1,288,025 Joint venture investments 87,304 (87,304)3,474 (3,474)Other assets 1,446 1,446 6,289 6,289$1,697,405$

260、206,096$1,903,501$1,286,943$7,371$1,294,314 Current assetsOther assets 3,435 3,747 7,182 18,746 154 18,900 Prepaids 4,711 1,244 5,955 2,675 352 3,027 Accounts receivable 17,573 3,324 20,897 12,828 12,828 Cash 14,038 3,499 17,537 2,362 84 2,446$39,757$11,814$51,571$36,611$590$37,201 Total assets$1,73

261、7,162$217,910$1,955,072$1,323,554$7,961$1,331,515 LIABILITIESNon-current liabilitiesDebt$929,218$172,633$1,101,851$721,260$6,879$728,139 Derivatives 9,369 717 10,086 36,745 36,745 Other liabilities 3,142 511 3,653 2,721 8 2,729 Exchangeable units of subsidiaries 12,302 12,302 9,566 9,566 Deferred in

262、come taxes 106,769 2 106,771 69,607 69,607$1,060,800$173,863$1,234,663$839,899$6,887$846,786 Current liabilitiesDebt 8,526 39,272 47,798 5,113 5,113 Derivatives 9,567 9,567 264 264 Accounts payable and accrued liabilities 30,039 4,775 34,814 20,287 1,074 21,361 Distributions payable 4,309 4,309 3,48

263、7 3,487 Taxes payable 1,786 1,786$52,441$44,047$96,488$30,937$1,074$32,011 Total liabilities$1,113,241$217,910$1,331,151$870,836$7,961$878,797 UNITHOLDERS EQUITYUnitholders equity$619,020$619,020$452,718$452,718 Non-controlling interest 4,901 4,901 Total equity$623,921$623,921$452,718$452,718 Total

264、liabilities and unitholders equity$1,737,162$217,910$1,955,072$1,323,554$7,961$1,331,515 Slate Grocery REITQ4 2021 MD&A33The following table provides a reconciliation of the REITs statement of income,as presented in its consolidated financial statements,to its proportionate interest for the three mo

265、nths ended December 31 2021 and 2020.Three months ended December 31,2021Three months ended December 31,2020Statement of IncomeJoint Venture InvestmentsProportionate Share(Non-GAAP)Statement of IncomeJoint Venture InvestmentsProportionate Share(Non-GAAP)Rental revenue$38,348$7,465$45,813$31,872$212$3

266、2,084 Property operating expenses(6,128)(1,309)(7,437)(3,512)(46)(3,558)General and administrative expenses(3,050)(679)(3,729)(1,714)(1,714)Interest and finance costs(10,092)(1,641)(11,733)(8,873)(78)(8,951)Share of income(loss)in joint venture investments 23,795 (23,795)(129)129 Change in fair valu

267、e of financial instruments 221 221 (437)(437)Transaction costs(54)(54)(803)(803)Change in fair value of properties(10,026)19,738 9,712 13,515 (217)13,298 Net income before income taxes and unit expense$32,793$32,793$29,919$29,919 Deferred income tax expense(10,391)(10,391)(8,730)(8,730)Current incom

268、e tax expense(463)(463)1,618 1,618 Unit expense(1,748)(1,748)(1,539)(1,539)Net income$20,191$20,191$21,268$21,268 Net income attributable toUnitholders$20,147$20,147$21,268$21,268 Non-controlling interest 44 44 Net Income$20,191$20,191$21,268$21,268 Slate Grocery REITQ4 2021 MD&A34The following tabl

269、e provides a reconciliation of the REITs statement of income,as presented in its consolidated financial statements,to its proportionate interest for the year ended December 31 2021 and 2020.Year ended December 31,2021Year ended December 31,2020Statement of IncomeJoint Venture InvestmentsProportionat

270、e Share(Non-GAAP)Statement of IncomeJoint Venture InvestmentsProportionate Share(Non-GAAP)Rental revenue$138,275$8,969$147,244$126,130$902$127,032 Property operating expenses(37,417)(1,751)(39,168)(34,629)(209)(34,838)General and administrative expenses(10,421)(731)(11,152)(10,511)(140)(10,651)Inter

271、est and finance costs(41,591)(2,011)(43,602)(33,868)(304)(34,172)Share of income(loss)in joint venture investments 20,489 (20,489)(1,575)1,575 Transaction costs(230)(230)(3,913)(3,913)Change in fair value of financial instruments(9,185)278 (8,907)(457)(457)Change in fair value of properties 67,290 1

272、5,735 83,025 14,087 (1,824)12,263 Net income before income taxes andunit(expense)income$127,210$127,210$55,264$55,264 Deferred income tax expense(33,487)(33,487)(11,587)(11,587)Current income tax expense(2,331)(2,331)(2,414)(2,414)Unit(expense)income(3,964)(3,964)342 342 Net income$87,428$87,428$41,

273、605$41,605 Net income attributable toUnitholders$86,905$86,905$41,605$41,605 Non-controlling interest 523 523 Net income$87,428$87,428$41,605$41,605 Slate Grocery REITQ4 2021 MD&A35REVENUERevenue from properties includes base rent from tenants,straight-line rental income,property tax and operating c

274、ost recoveries and other incidental income.Rental revenue for the three and twelve month periods ended December 31,2021 increased by$6.5 million and$12.1 million,respectively,compared to the same period in the prior year.The increase is primarily driven by the acquisition of 32 grocery-anchored prop

275、erties during the year,new leasing typically above in-place rent,and increases in rental rates from re-leasing.PROPERTY OPERATING EXPENSESProperty operating expenses consist of property taxes,property management fees and general and administrative expenses including common area costs,utilities and i

276、nsurance.The majority of the REITs operating expenses are recoverable from tenants in accordance with the terms of their respective lease agreements.Operating expenses fluctuate with changes in occupancy and levels of repairs and maintenance.Property operating expenses for the three and twelve month

277、 periods ended December 31,2021 increased by$2.6 million and$2.8million,respectively,compared to the same period in the prior year due to the aforementioned grocery-anchored acquisitions during the year end December31,2021.In accordance with IFRIC 21,the REIT recognizes the annual property tax liabi

278、lity and expense on its existing properties as at January 1st of each year,rather than progressively,i.e.,ratably,throughout the year.The recognition of property taxes as a result of IFRIC 21 has no impact on NOI,FFO or AFFO.GENERAL AND ADMINISTRATIVE EXPENSESGeneral and administrative expenses incl

279、ude fees for asset management,legal,trustee services,tax compliance,reporting,marketing,bad debt expenses and franchise and business taxes.Franchise and business taxes are typically billed in the following calendar year to which they relate.Three months ended December 31,Year ended December 31,20212

280、020Variance20212020VarianceAsset management fees$1,646$1,310$336$6,070$5,169$901 Professional fees and other 1,087 817 270 3,232 3,089 143 Bad debt expense 202 230 (28)691 1,868 (1,177)Franchise and business taxes 115 (643)758 428 385 43 Total$3,050$1,714$1,336$10,421$10,511$(90)%of total assets 0.2

281、%0.1%0.1%0.6%0.8%(0.2)%of total revenue 8.0%5.4%2.6%7.5%8.3%(0.8)%General and administrative expenses for the three month period ended December 31,2021 was$3.1 million,an increase of$1.3 million compared to the same period in the prior year.The increases are mainly due to increases in franchise and

282、business taxes and asset management fees.For the period ended December 31,2021,general and administrative expenses decreased by$90 thousand driven mainly by lower bad debt expense,partially offset by increased asset management fees.INTEREST AND FINANCE COSTSThree months ended December 31,Year ended

283、December 31,20212020Variance20212020VarianceInterest on debt and finance charges$6,833$5,049$1,784$23,336$22,134$1,202 Interest rate swaps,net settlement 1 2,857 3,189 (332)11,507 9,733 1,774 Foreign exchange forward contract,net settlement 270 (270)270 (270)Interest income(6)(11)5 (32)(57)25 Subscr

284、iption receipts equivalent amount 2 4,933 4,933 Amortization of finance charges 1 3 484 402 82 2,007 2,298 (291)Amortization of mark-to-market 3 (55)(4)(51)(73)(422)349 Amortization of deferred gain on TIF notes(21)(22)1 (87)(88)1 Total$10,092$8,873$1,219$41,591$33,868$7,723 1 In the first quarter o

285、f 2021,the REIT refinanced$169.0 million of its debt,resulting in a charge to income totaling$0.2million.2 On September 22,2021,each subscription receipt issued by the REIT on March 31,2021 was exchanged for one unit and a cash distribution equivalent to$0.4268(being equal to the aggregate amount of

286、 distributions paid by the REIT per unit for which record dates occurred between March 31,2021 and September 22,2021).3 In the first quarter of 2020,the REIT refinanced its credit facility and extinguished a mortgage of$10.1 million,resulting in a net charge to income totaling$0.3million.Slate Groce

287、ry REITQ4 2021 MD&A36The following shows the change in interest on debt and finance charges,net of interest rate swaps for the three month period ended December 31,2021 compared to the same period in the prior year:Interest on debt and finance charges,net of interest rate swaps,December 31,2020$8,23

288、8 Change in interest rates,net of interest rate hedges and debt levels 1 2(953)Change in debt spreads(178)Increase in fixed rate debt 2,749 Decrease in standby fee(166)Interest on debt and finance charges,net of interest rate swaps,December 31,2021$9,690 Year-over-year change$1,452 Year-over-year ch

289、ange%17.6%1 The weighted average interest rate cost of the REITs floating rate debt,net of interest rate swaps for the three month period ended December 31,2021 is 4.09%(December31,2020 3.96%).2 The average U.S.LIBOR for the three month period ended December 31,2021 was 0.26%,which represents a 0.1%

290、increase from the same period in 2020.At December31,2021,the REIT fixed 94.7%of its floating rate debt compared to 105.3%at December31,2020.Interest expense and other finance costs,net consists of interest paid on the revolving credit facility(revolver),term loans,mortgages and interest rate swap co

291、ntracts,as well as standby fees paid on the REITs revolver.Interest on debt,net of interest rate swaps increased by$1.5 million and$3.0 million for the three and twelve month periods ended December 31,2021,respectively compared to the same periods in 2020,primarily due to increases in fixed rate deb

292、t.The REITs revolver is redrawn from time-to-time to fund operating and investing activities.The REITs pay-fixed,receive-float interest rate swaps hedge the cash flow risk associated with one-month U.S.LIBOR based interest payments,with 94.7%of the REITs debt subject to fixed rates at December31,202

293、1.The weighted average fixed rate of the REITs interest rate swaps was 2.6%compared to the one-month U.S.LIBOR at 0.26%at December31,2021,with a weighted average term to maturity of 2.2 years.Under this arrangement,the REIT has paid$2.9 million and$3.2 million of net interest payments in the current

294、 quarter and comparative period,respectively.In conjunction with the REITs$169.0 million mortgage closed on January 14,2021,the REIT terminated its$150.0 million interest rate swap with a maturity date of February 26,2021.This resulted in an increase to the weighted average pay-fixed rate of the REI

295、Ts swap portfolio to 2.57%.On February 4,2020,the REIT terminated$150.0 million of its$300.0 million interest rate swap,with an effective date of November 22,2016.The realized gain as a result of the termination was blended into the pay-fixed rate of the REITs$100.0 million interest rate swap,with a

296、 maturity date of September 22,2022.The REIT does not capitalize interest for its projects under development.Interest expense is recognized as incurred in income which is not comparable to other REITs or other corporations that capitalize interest.FAIR VALUE ADJUSTMENTS ON REIT UNITS AND EXCHANGEABL

297、E UNITS OF SUBSIDIARIESClass B units of Slate Grocery One L.P.(LP1)and Slate Grocery Two L.P(LP2).and exchangeable limited partnership units of GAR B all of which are issued by subsidiaries of the REIT(collectively,the exchangeable units of subsidiaries)are classified as financial liabilities under

298、IFRS and are measured at fair value with any changes in fair value recognized in unit expense in the consolidated statements of income.The fair value is re-measured at the end of each reporting period.An unrealized gain represents a decrease in the fair value per unit whereas an unrealized loss repr

299、esents an increase in the fair value per unit.The fair value per unit on December31,2021 was$11.38(December31,2020$8.85).Changes in fair value of exchangeable units of subsidiaries are non-cash in nature and are required to be recorded in income under IFRS.For the three and twelve month periods ende

300、d December 31,2021,the REIT recognized an unrealized fair value loss of$1.3 million and$2.7million,respectively,on the exchangeable units of subsidiaries as a result of the change in fair value per unit over the respective comparative period.NET INCOMEFor the three month period ended December 31,202

301、1,net income increased by$1.1 million compared to the same period in the prior year.The decrease is attributed to a$23.5 million change in fair value of property and a$1.5 million increase in cash interest paid,partially offset by the aforementioned increases in revenue and$23.9 million and increase

302、s in contributions from joint venture investments.Net income for the year ended December 31,2021 was$87.4 million,which resulted in a$45.8 million increase from the comparative period,mainly due to a$53.2 million increase in the change in fair value of properties,$22.1 million contributions from joi

303、nt venture investments,and a$12.1 million increase in revenue,partially offset by cash interest paid and change in fair value of financial instruments.NOINOI is a non-IFRS measure and is defined by the REIT as property rental revenue,excluding non-cash straight-line rent,less property operating expe

304、nses after adjusting for the impact of IFRIC 21 property tax accounting adjustments.Rental revenue excludes revenue recorded as a result of recording rent on a straight-line basis for IFRS which management believes reflects the cash generation activity of the REITs properties.NOI is an important mea

305、sure of the income generated from the REITs properties and is used by the REIT in evaluating the performance of its properties.NOI may not be comparable with similar measures presented by other entities and is not to be construed as an alternative to net income or cash flow from operating activities

306、 determined in accordance with IFRS.Slate Grocery REITQ4 2021 MD&A37The following is a calculation of NOI:Three months ended December 31,Year ended December 31,20212020Variance20212020VarianceRental revenue$38,348$31,872$6,476$138,275$126,130$12,145 Straight-line rent revenue 104 (375)479 (345)(1,55

307、6)1,211 Property operating expenses(6,128)(3,512)(2,616)(37,417)(34,629)(2,788)IFRIC 21 property tax adjustment(5,418)(5,568)150 (1,526)(802)(724)Contribution from joint venture investments 4,979 166 4,813 5,867 761 5,106 NOI$31,885$22,583$9,302$104,854$89,904$14,950 The following shows the change i

308、n NOI for the three month period ended December 31,2021 compared to the same period in the prior year:NOI,December 31,2020$22,583 Change in same-property NOI 613 Increased contribution from redeveloped properties 1 361 Loss of contribution from properties under redevelopment(56)Contribution from acq

309、uisitions 1 8,521 Loss of contribution from dispositions,including outparcel sales(137)NOI,December 31,2021$31,885 Year-over-year change$9,302 Year-over-year change%41.2%1 Includes the REITs share of joint venture investments.NOI for the three month period ended December 31,2021 was$31.9 million,whi

310、ch represents an increase of$9.3 million from the same period in 2020.The increase is primarily due to a full quarter of NOI from acquisition of 32 grocery-anchored properties during the year and same-property NOI increases,partially offset by the loss in NOI contribution from dispositions.The follo

311、wing shows the change in NOI for the three month period ended December 31,2021 compared to the immediately preceding quarter:NOI,September 30,2021$25,647 Change in same-property NOI 141 Loss of contribution from properties under redevelopment(348)Contribution from acquisitions 1 6,445 NOI,December 3

312、1,2021$31,885 Quarter-over-quarter change$6,238 Quarter-over-quarter change%24.3%1 Includes the REITs share of joint venture investments.NOI for the current quarter increased by$6.2 million from the third quarter of 2021 to$31.9 million mainly due to a full quarter contribution in NOI from acquisiti

313、ons completed in the third quarter of 2021,partially offset by the loss in NOI contribution from properties under redevelopment.SAME-PROPERTY NOISame-property NOI is a non-IFRS measure and is defined by the REIT as rental revenue,excluding non-cash straight-line rent,less property operating cost exp

314、enses after adjusting for the impact of IFRIC 21 property tax accounting adjustments for those properties owned by the REIT for the entirety of each of the current period and the relevant comparative period excluding those properties under redevelopment.For the three month period ended December 31,2

315、021,the same-property portfolio is comprised of a portfolio of 69 properties owned and in operation for each of the entire three month periods ended December31,2021 and 2020.Same-property NOI is an important measure of the income generated from the REITs properties period-over-period,but without con

316、sideration of acquisition and disposition activity,and is used by the REIT in evaluating the performance of its properties.The REIT seeks to increase or maintain same-property NOI through high-occupancy,increasing rents on renewal to market rents and by signing leases with embedded rent increases th

317、roughout the term of the lease.Slate Grocery REITQ4 2021 MD&A38The following is a summary of same-property NOI and the related occupancy rates for the three month period ended December 31,2021 as compared to the same period in the prior year,reconciled to total NOI:Number of propertiesThree months e

318、nded December 31,20212020VarianceChange(%)Same-property NOI69$21,443$20,830$613 2.9%NOI attributable to redeveloped properties 12 735 374 361 NOI attributable to properties under redevelopment 4 1,024 1,080 (56)NOI attributable to acquisitions 132 8,683 162 8,521 NOI attributable to dispositions,inc

319、luding outparcel sales11 137 (137)Total NOI 1$31,885$22,583$9,302 41.2%Occupancy,same-property69 94.9%93.6%1.3%Occupancy,redeveloped properties 12 92.2%91.5%0.7%Occupancy,properties under redevelopment 4 89.0%82.4%6.6%Occupancy,acquisitions 132 91.3%91.3%Occupancy,dispositions,including outparcel sa

320、les11%78.6%(78.6%)Occupancy,portfolio 1 93.6%92.2%1.4%1 Includes the REITs share of joint venture investments.Same-property NOI for the current quarter increased by$0.6 million to$21.4 million over the comparative period.The increase was primarily attributed to new leasing above market rental rates

321、and increases in rental rates from re-leasing above average in-place rent of the properties,partially offset by temporary vacancies.Including the impact of completed redevelopments,same-property NOI increased by$1.0 million or 4.6%over the comparative period.The following is a summary of same-proper

322、ty NOI and the related occupancy rates on a trailing twelve month basis as at December31,2021,as compared to the same period in the prior year reconciled to total NOI:Number of propertiesTrailing twelve months,December 31,20212020VarianceChange(%)Same-property NOI60$75,216$74,688$528 0.7%NOI attribu

323、table to redeveloped properties 14 4,043 2,656 1,387 NOI attributable to properties under redevelopment4 4,329 4,476 (147)NOI attributable to acquisitions 139 21,101 4,730 16,371 NOI attributable to dispositions,including outparcel sales7 165 3,354 (3,189)Total NOI 1$104,854$89,904$14,950 16.6%Occup

324、ancy,same-property60 94.9%93.6%1.3%Occupancy,redeveloped properties 14 94.0%93.5%0.5%Occupancy,properties under redevelopment 4 89.0%82.4%6.6%Occupancy,acquisitions 139 91.7%92.5%(0.8%)Occupancy,dispositions,including outparcel sales7%78.6%(78.6%)Occupancy,portfolio 1 93.6%92.8%0.8%1 Includes the RE

325、ITs share of joint venture investments.Same-property NOI for the trailing twelve month period ended December31,2021 increased by 0.7%from the same period in the prior year.This increase was primarily attributed to increases in rental rates from re-leasing above average in-place rent and new leasing

326、above comparable market rental rates,partially offset by temporary vacancies.Including the impact of completed redevelopments,same-property NOI increased by$1.9 million or 2.5%over the comparative period.Slate Grocery REITQ4 2021 MD&A39Same-property NOI by quarter and percentage change over the rele

327、vant comparative period for the respective quarter is as follows:Number of propertiesSame-propertyNOISame-property change(%)Same-property change(%),excluding termination feesQ1 201862 16,555 (1.2%)(0.8%)Q2 201864 17,403 0.6%0.3%Q3 201865 18,226 2.4%1.4%Q4 201877 22,691 4.2%3.1%Q1 201976 22,908 0.4%0

328、.1%Q2 201975 23,816 2.9%1.1%Q3 201972 22,246 (1.0%)(0.2%)Q4 201968 21,511 (0.9%)0.1%Q1 202064 20,180 1.2%1.5%Q2 202063 19,985 (2.1%)0.8%Q3 202062 19,565 0.5%0.5%Q4 202061 18,961 (0.9%)(0.9%)Q1 202159 18,455 (1.1%)(1.6%)Q2 202162 18,424 (1.9%)(2.0%)Q3 202167 21,100 2.1%2.1%Q4 202169 21,443 2.9%2.2%Te

329、rmination income is included in the REITs definition of same-property NOI,however,can be substantial and does not occur frequently.The following is a table summarizing same-property NOI growth excluding the impact of terminations fees:Same-property NOI Growth,Year-over-YearNET ASSET VALUE Net asset

330、value is a non-IFRS measure and is defined by the REIT as the aggregate of the carrying value of the REITs equity,exchangeable units of subsidiaries and deferred tax liability.Management believes that this measure reflects the residual value of the REIT to equity holders and is used by management on

331、 both an aggregate and per unit basis to evaluate the net asset value attributable to unitholders and changes thereon based on the execution of the REITs strategy.Slate Grocery REITQ4 2021 MD&A40The following is the calculation of net asset value on a total and per unit basis at December31,2021 and

332、December31,2020 to the REITs consolidated financial statements:Year ended December 31,20212020Total unitholders equity$623,921$452,718 Less:non-controlling interest(4,901)Adjusted unitholders equity 619,020 452,718 Deferred income taxes 106,769 69,607 Exchangeable units 12,302 9,566 NAV$738,091$531,

333、891 Class U units outstanding 60,060 48,597 NAV per unit$12.29$10.94 NAV has increased by$1.35 per unit as a result of by increased buyer demand for grocery-anchored strip centres and value-add asset management activities which includes anchor tenant renewals and repositionings,tenant credit enhancement through strategic leasing,capital investments and improvements.Year ended December 31,20212020P