stability, security & growth

H & R R e a l E s t a t e I n v e s t m e n t T r u s t ( T S X : H R . U N )

STABILITY,SECURITY& GROWTHTHROUGH QUALITY,

DIVERSIFICATION & SCALE

INVESTOR PRESENTATION

As at June 30, 2021unless otherwise noted

2 STABILITY, SECURITY & GROWTH through QUALITY, DIVERSIFICATION & SCALE

Caution Regarding Forward-looking Statements

Forward Looking StatementsCertain statements made in this presentation will contain forward‐looking information within the meaning of applicable securities laws (also known as forward‐lookingstatements) including, among others, statements made or implied relating to H&R’s objectives, strategies to achieve those objectives, H&R’s beliefs, plans, estimates,projections and intentions and statements with respect to H&R’s development activities, including planned future expansions, and building of new properties; the expectedyield on cost of H&R’s developments and other investments; the expected costs and timing of any of H&R’s projects; and the expected occupancy, management’sexpectations regarding future intensification opportunities including the timing of approvals for re-zoning and site plan applications, the impact of the COVID-19 virus on theREIT and REIT’s tenants, the REIT’s bad debt and expected credit loss. Statements concerning forward‐looking information can be identified by words such as “outlook”,“objective”, “may”, “will”, “expect”, “intend”, “estimate”, “anticipate”, “believe”, “should”, “plans”, “project”, “budget” or “continue” or similar expressions suggestingfuture outcomes or events. Such forward‐looking statements reflect H&R’s current beliefs and are based on information currently available to management.Forward‐looking statements are provided for the purpose of presenting information about management’s current expectations and plans relating to the future and readersare cautioned that such statements may not be appropriate for other purposes. These statements are not guarantees of future performance and are based on H&R’sestimates and assumptions that are subject to risks and uncertainties, including those discussed in H&R’s materials filed with the Canadian securities regulatory authoritiesfrom time to time, including H&R’s MD&A for the quarter ended June 30, 2021, and H&R’s most recently filed annual information form, which could cause the actual resultsand performance of H&R to differ materially from the forward‐looking statements made in this presentation. Although the forward‐looking statements made in thispresentation are based upon what H&R believes are reasonable assumptions, there can be no assurance that actual results will be consistent with these forward‐lookingstatements. Readers are also urged to examine H&R’s materials filed with the Canadian securities regulatory authorities from time to time as they may contain discussionson risks and uncertainties which could cause the actual results and performance of H&R to differ materially from the forward‐looking statements made in this presentation.All forward‐looking statements made in this presentation are qualified by these cautionary statements. These forward‐looking statements are made as of August 12, 2021and H&R, except as required by applicable law, assumes no obligation to update or revise them to reflect new information or the occurrence of future events orcircumstances.

The REIT’s Q2 2021 financial statements are prepared in accordance with International Accounting Standard (“IAS”) 34, Interim Financial Reporting. H&R’s management usesa number of measures which do not have a meaning recognized or standardized under International Financial Reporting Standards (“IFRS”) or Canadian Generally AcceptedAccounting Principles (“GAAP”). The non-GAAP measures REIT’s proportionate share, property operating income (cash basis), Same-Asset property operating income (cashbasis), Funds from Operations (“FFO”), Adjusted Funds from Operations (“AFFO”), Payout Ratio per Unit as a % of AFFO, Interest Coverage ratio, Debt/Earnings beforeinterest, taxes, depreciation and amortization (“EBITDA”) and Net Asset Value (“NAV”), as well as other non-GAAP measures discussed elsewhere in this presentation,should not be construed as an alternative to financial measures calculated in accordance with GAAP. Further, H&R’s method of calculating these supplemental non-GAAPfinancial measures may differ from the methods of other real estate investment trusts or other issuers, and accordingly may not be comparable. H&R uses these measuresto better assess its underlying performance and provides these additional measures so that investors may do the same. These non-GAAP financial measures are more fullydefined and discussed in H&R’s MD&A as at and for the six months ended June 30, 2021, available at www.hr-reit.com and on www.sedar.com.

Non-GAAP Measures

All figures have been reported at H&R’s ownership interest unless otherwise stated.Balance Sheet figures have been converted at $1.24 CAD for each U.S. $1.00.Income Statement figures have been converted at $1.25 CAD for each U.S. $1.00.

Other

http://www.hr-reit.com/

http://www.sedar.com/


H&R REIT

Office(1) Industrial(1)Retail(1)

(Primaris)

Residential(1)

(Lantower Residential)

Long Term Leases Pension Fund JVStable Performance High Growth Opportunity

32 Properties ~10,567,000 Square Feet

80 Properties~8,984,000 Square Feet

321 Properties~13,682,000 Square Feet

24 Properties8,359 Residential Rental Units

Gotham, New York

Corus Quay, Toronto

Front St., Toronto

Dufferin Mall, Toronto

Orchard Park, Kelowna

Unilever, Mississauga

Grande Pines, Orlando

Legacy Lakes, Dallas

Stability, Security & Growth through Quality, Diversification & Scale

Fully Internalized Management (Insiders own 6%)

One of the Largest REITs in Canada with total assets of

$13.1 billion

Purolator, Calgary

(1) Figures above are at H&R’s ownership interest including equity accounted investments.


Executing on Strategic Initiatives

We have laid the foundation for the next step in our strategic plan, enabling us to create

and surface significant value for our unitholders.

Commitment to our Environmental,

Social & Governance policies

(Slides: 36 to 40)

Working towards a more simplified

structure to create and surface significant

value for unitholders

Properties in lease-up: River

Landing & Jackson Park (Slides: 5 to 7)

The Bow and Bell Campus Office Dispositions

Enhances financial and strategic flexibility, facilitating further

significant next steps (Slides 8, 10 to 13)

Materially enhance the value

of our company


Significant Acceleration in Property Lease-up

▪ Lease-up is exceeding management expectations, offsetting almost all of the FFO per unit dilution from the announced office and industrial property sales.


Property Q2 2021

Annualized

Q2 2021

Stabilized

Year 1

Expected

Increase

Occupancy as at

June 30, 2021

Committed

occupancy as at

August 2, 2021

Retail 77.2% Retail 87.8%

Residential 59.1% Residential 86.6%

Office 0% Office 34.9%

Jackson Park,

Long Island City,

NY(1)

U.S. $2.3M U.S. $9.2M U.S. $32.0M U.S. $22.8M 61.6% 96.8%

Property operating income (cash basis)

River Landing,

Miami, FLU.S. $2.3M U.S. $9.2M U.S. $24.8M U.S. $15.6M


Properties in Lease-up: River Landing – Miami, FL

▪ Between Q4 2020 and Q2 2021, U.S. $495.9 million was transferred from properties under development to investment properties

▪ Annual property operating income (cash basis) once lease-up is complete is expected to be approximately U.S. $24.8 million

▪ Strong Leasing Progress:▪ In Q2 2021, the REIT signed a lease with the Office of the State

Attorney – Miami-Dade County, to occupy approximately 50,000 square feet of office space

▪ Committed residential occupancy of 86.6% as at August 2, 2021 represents 457 of 528 residential units leased, exceeding management’s expectations on leasing velocity


Properties in Lease-up: Jackson Park – Long Island City, NY(1)


▪ Annual property operating income (cash basis) once lease-up is complete is expected to be approximately U.S. $32.0 million

▪ Committed occupancy of 96.8% as at August 2, 2021 vs. June 30, 2021 occupancy of 61.6%▪ Notably, 456 leases were signed in the month of June which represented the greatest number of leases signed

in any single month at Jackson Park

▪ As a result of the significant leasing completed, H&R expects significant up-front leasing costs to negatively impact Jackson Park’s property operating income in Q3 2021. H&R expects property operating income (cash basis) to significantly increase commencing in Q4 2021


Subsequent Events: Office Dispositions

Asset Description Proceeds

Per sq.ft.

of Value

Retained

Asset

Value

Total

Value Q1 IFRS FV

Value

Relative

to IFRS FV Details

• Sale of 100% of the land

and building

• Sale of a 40% interest in

the Ovintiv lease

$613M

• H&R has an option to repurchase the land

and buildings for $735M at the end of the

Ovintiv lease in 2038 (60% of total

transaction value of $1.2 billion)

• H&R retains 15% interest in Ovintiv lease

net rent payable

• H&R retains 100% interest in South Block

adjacent lands

• H&R retains property management for

remaining lease term

• H&R to retain $18M of annual income from

the Bow with NPV of ~$177M

• H&R to continue property management for

the remainder of the leases, which expire

between 2035 and 2038

• $1.6M annually in management fees with

NPV of ~$18M

Total $1,470M $203M $1,673M $1,467M $206M

• Sale of a 45% interest in

the Ovintiv lease$418M

Bell Campus • Sale of 100% ownership $439M

Bow

$525M $(68)M

~$608/sf $185M $1,216M $942M $274M

$400/sf $18M $457M

▪ The sales are subject to customary closing conditions, with closing targeted to be Q3 2021


Q2 2021 and July 2021 Industrial Dispositions

▪ In July 2021, the REIT sold its 50% ownership interest in a portfolio of nine single tenanted cold storage properties for approximately $117.5M

▪ This transaction along with the six industrial properties sold in Q2 2021 resulted in H&R disposing a 50% ownership interest in 15 industrial properties for total proceeds of approximately $150.8 million, compared to H&R’s IFRS fair value of $121.3 million as at March 31, 2021

▪ The weighted average overall capitalization rate for these dispositions was approximately 4.1%


Pro-Forma Impact of Dispositions & Lease-up

Q2 2021(1)

Proforma(1)

Calgary Office exposure 9% 3%• Reduces exposure to weak office

market

• Reduces exposure to one of North

America’s largest oil and gas

producers

• Enhances Top Tenant profile

Bell Canada 9% 5% • Enhances Top Tenant profile

Top 10 tenants 44% 34%

• Reduces exposure to largest

tenants and diversifies revenue

stream

Debt(2)/EBITDA 9.85x 8.59x

Debt(2)/Total Assets 50% 44%

Unencumbered Assets/

Unsecured Debt1.65x 2.25x

FFO per Unit $0.38 $0.37• FFO dilution offset by strong

residential lease-up

Ovintiv 12% 2%

• Enhances credit metrics

1) Figures above are at H&R’s ownership interest including equity accounted investments.2) Debt includes mortgages payable, debentures payable, unsecured term loans and lines of credit.

▪ These dispositions are aligned with H&R’s commitment to an ongoing evaluation of strategic initiatives and have a significantly positive impact on pro-forma credit metrics

Office transaction

impact($0.05)

Lease-up impact $0.04

Net ($0.01)

Proforma quarterly

FFO per Unit


Office32%

Industrial8%

Res idential

25% Retail

35%

$11.5

Billion

Pro-Forma Impact of Dispositions

As at June 30, 2021

Fair Value of Investment Properties by Segment(1)

Pro-Forma

457 Properties / 41 million sq.ft. 442 Properties / 37 million sq.ft.

1) Figures above are at H&R’s ownership interest including equity accounted investments and excludes assets classified as held for sale.

Reduction in office; Strategic Review continues to focus on portfolio optimization

Office

38%

Industrial

8%

Residential

23%

Retail

31%

$13.0

Billion


Pro-Forma Impact of Dispositions

As at June 30, 2021

Fair Value of Investment Properties by Region(1)

Pro-Forma

457 Properties / 41 million sq.ft. 442 Properties / 37 million sq.ft.

Reduction in Alberta exposure from 18% to 13%

Ontario

30%

United States

43%

Other Canadian Provinces

9%

Alberta

18%

$13.0

Billion

Ontario

29%

United States

49% Other Canadian

Provinces9%

Alberta

13%

$11.5

Billion

1) Figures above are at H&R’s ownership interest including equity accounted investments and excludes assets classified as held for sale.


Pro-Forma Impact of Dispositions: Top 10 Tenants

As at June 30, 2021(1) Pro-Forma(1)

Tenant

% of Rental from

IP

Number of

Locations

H&R Owned sq.ft. (in

000’s)

Average Lease

Term to Maturity (in Years)

Credit Ratings (S&P)

1. 12.4% 1 1,997 16.9 BBB- Stable

2. 8.8% 23 2,536 13.2 BBB+ Stable

3. 5.6% 1 845 11.7 BBB- Stable

4. 4.1% 1 660 9.4 A+ Negative

5. 3.3% 195 1,610 10.2 Not Rated

6. 3.0% 19 2,682 5.7 BBB Stable

7. 2.1% 1 466 9.8 BBB+ Stable

8. 2.0% 1 472 11.7 BB Stable

9. 1.7% 13 1,346 12.8 BBB+ Stable

10. 1.2% 17 356 4.1 BBB+

Negative

Total 44.2% 272 12,970 12.2

Tenant

% of Rental from

IP

Number of

Locations

H&R Owned

sq.ft. (in 000’s)

Average Lease

Term to Maturity (in Years)

Credit Ratings (S&P)

1. 6.6% 1 845 11.7 BBB- Stable

2. 4.9% 20 1,396 10.8 BBB+ Stable

3. 4.8% 1 660 9.4 A+ Negative

4. 3.9% 195 1,610 10.2 Not Rated

5. 3.6% 19 2,682 5.7 BBB Stable

6. 2.4% 1 466 9.8 BBB+ Stable

7. 2.3% 1 472 11.7 BB Stable

8. 2.2% - - 16.9 BBB- Stable

9. 2.0% 13 1,346 12.8 BBB+ Stable

10. 1.4% 17 356 4.1 BBB+ Negative

Total 34.1% 268 9,833 10.3

1) Figures above are at H&R’s ownership interest including equity accounted investments.

Reduction in Ovintiv exposure from 12% to 2% of rental income


Office Portfolio

▪ Fair value of investment properties: $5.0 billion (weighted average cap rate: 6.57%)▪ Mortgages payable: $1.4 billion with a weighted average interest rate (“WAIR”) of 4.0%

and a weighted average term of maturity (“WATM”) of 2.7 years▪ Average remaining lease term to maturity: 12.0 years▪ Occupancy: 99.1%▪ Revenue from tenants with investment grade ratings: 85.7%

Hess Tower | HoustonCorus Quay | Toronto310-320-330 Front St.| Toronto 2 Gotham Centre | New York

Ontario Alberta Other Subtotal

Number of properties 20 4 4 28 4 32 Square feet (in thousands) 5,374 2,607 893 8,874 1,693 10,567

United

StatesTotal

Canada


Retail Portfolio(1)

▪ Fair value of investment properties: $4.0 billion (weighted average cap rate: 6.78%)▪ Mortgages payable: $745.9 million with a WAIR of 3.4% and a WATM of 3.5 years▪ Average remaining lease term to maturity: 6.7 years▪ Occupancy: 90.0%

Dufferin Mall | TorontoOrchard Park | Kelowna Stone Road Mall | Guelph


Enclosed

Shopping Centre

Grocery

Anchored ECHO Other Total

Number of properties 17 22 237 45 321

Square feet (in thousands) 6,882 1,007 2,856 2,937 13,682

Weighted average cap rates 7.14% 6.36% 6.58% 6.22% 6.78%

Ontario Alberta Other Subtotal ECHO Other Subtotal

Number of properties 36 17 14 67 237 17 254 321

Square feet (in thousands) 3,459 3,947 2,720 10,126 2,856 700 3,556 13,682

CanadaTotal

United States


Retail Tenant Sales Mix(1)

(1) Excluding ECHO.(2) Gross Rent is based on estimated annualized gross revenue for retail tenants only, excluding straight-lining of contractual rent, rent amortization of tenant

inducements and capital expenditure recoveries. Retail revenue as a percentage of total revenue was 32.2% for the quarter ended June 30, 2021.

By Gross Rent(2)

Fashion16%

Walmart/Grocery/ Liquor/ Cannibis

15%

Large format non-fashion

13%

Personal Care/Service (including fitness)12%

Large format fashion

12%

General Merchandise

9%

Food7%

Office/Financial Institutions

5%

Automotive 4%

Entertainment (Casino & Theatre)3%

Full Service Restaurants2% HBC

2%


Top 15 Retail Tenants by Revenue

1) Figures above are at H&R’s ownership interest including equity accounted investments.(1) The percentage of rentals from investment properties is based on estimated annualized gross revenue excluding straight-lining of contractual rent, rent

amortization of tenant inducements and capital expenditure recoveries.(2) Average lease term to maturity is weighted based on net rent.(3) Lowe’s Companies, Inc. includes Rona.(4) Canadian Tire Corporation includes Canadian Tire, Mark’s, Sport Chek, Atmosphere, Sports Experts and Party City.(5) Loblaw Companies Limited includes Loblaw, No Frills and Shoppers Drug Mart.(6) Empire Company Limited includes Sobeys Capital Inc., Safeway and Lawtons Drugs.(7) The TJX Companies Inc. includes Winners, T.J. Maxx, Marshalls and Home Sense.(8) Walmart Inc. includes Sam's Club.(9) YM Inc. includes Amnesia, Bluenotes, Sirens, Suzy Shier, Urban Planet, Urban Kids and West 49.(10) Gap Inc. includes Old Navy.

(1)

Tenant

% of rental income from

investment properties(2)

Number of

locations

H&R owned

sq.ft. (in 000’s)

Average lease term

to maturity (years)(3)

Credit Ratings

(S&P)

1. Giant Eagle, Inc. 3.3% 195 1,610 10.2 Not Rated

2. Lowe's Companies, Inc.(4) 1.7% 13 1,346 12.8 BBB+ Stable

3. Canadian Tire Corporation(5) 1.3% 17 578 5.8 BBB Stable

4. Loblaw Companies Limited(6) 0.9% 18 262 7.5 BBB Stable

5. Empire Company Limited(7) 0.9% 14 492 9.8 BBB- Stable

6. The TJX Companies Inc.(8) 0.9% 17 429 6.2 A Stable

7. Walmart Inc.(9) 0.8% 9 751 8.9 AA Stable

8. Shell Oil Products 0.8% 12 152 2.2 A+ Stable

9. Metro Inc. 0.7% 12 420 5.5 BBB Stable

10. Bell Canada 0.5% 17 52 1.8 BBB+ Stable

11. Hudson's Bay Company 0.5% 6 589 6.0 Not Rated

12. YM Inc.(10) 0.5% 14 216 4.6 Not Rated

13. Gap Inc.(11) 0.4% 9 121 4.2 BB- Positive

14. Best Buy Co. Inc. 0.4% 8 142 4.2 BBB+ Stable

15. Indigo Books & Music 0.3% 11 112 5.5 Not Rated

13.9% 372 7,272 9.5


Industrial Portfolio(1)

▪ Fair value of investment properties: $1.1 billion (weighted average cap rate: 5.27%)▪ Mortgages payable: $297.8 million with a WAIR of 4.3% and a WATM of 4.7 years▪ Average remaining lease term to maturity: 6.5 years▪ Occupancy: 96.7%

Sleep CountryGTA

Canadian TireGTA


▪ H&R has a 50% ownership interest in 71 of the 80 properties through a joint venture partnership with PSP Investment Board and Crestpoint Real Estate Investments Ltd.

Ontario Alberta Other Subtotal

Number of properties 35 19 23 77 3 80

Square feet (in thousands) 4,821 2,030 1,433 8,284 700 8,984

Canada United

StatesTotal(1)


Residential Portfolio(1)

▪ Fair value of investment properties: U.S. $2.3 billion (weighted average cap rate: 4.55%)▪ Mortgages payable: U.S. $1.3 billion with a WAIR of 3.6% and a WATM of 6.9 years▪ Average age of properties: 6.3 years▪ Occupancy: 89.2%

Jackson Park | New YorkAmbrosio | Texas


Westshore | Florida

Texas Florida

North

Carolina New York California Total

Number of properties 9 8 5 1 1 24

Number of residential rental units 2,776 2,961 1,632 936 54 8,359


▪ Our strategy is to acquire or develop class A properties in U.S. Sun Belt cities where there is strong population and employment growth and to develop properties with partners in Gateway cities


0.3% 0.7% 2.1% 0.9% 0.9%

107 219 690

290 294

2021 2022 2023 2024 2025

Industrial

Retail

Office

Limited Lease Rollover

(1) Figures above are at H&R’s ownership interest including equity accounted investments and excludes residential properties.

▪ Low-risk rollover schedule▪ Well diversified by property and geography▪ Average remaining lease term of 9.4 years, one of the longest in the industry

% of the REIT‘s GLA

Canadian Portfolio(in 000’s sq.ft.)

U.S. Portfolio(in 000’s sq.ft.)

% of the REIT’s GLA

(1)

1.4% 6.1% 3.7% 6.4% 5.1%

455

2,022

1,221

2,113 1,684

2021 2022 2023 2024 2025

Industrial

Retail

Office


Q2 2021 Financial Highlights

▪ FFO was $0.38 per Unit vs. $0.38 per Unit in Q2 2020

▪ AFFO was $0.30 per Unit vs. $0.30 per Unit in Q2 2020

▪ Payout ratio as a % of AFFO was 57.7%

▪ River Landing in Miami, FL achieved final completion and the second residential tower was transferred from properties under development to investment properties

▪ H&R sold its 50% ownership interest in six industrial properties totalling 251,641 square feet for approximately $33.3M

▪ H&R currently has two properties in lease-up: River Landing and Jackson Park

▪ $989.5 million of undrawn credit facilities available under H&R’s lines of credit

▪ Unencumbered asset pool of $4.0 billion

▪ Debt to total assets was 46.3% compared to 47.7% as at December 31, 2020


Strong Balance Sheet

(1) Debt includes mortgages payable, debentures payable, unsecured term loans and lines of credit.(2) The increase in debt to total assets from 2019 to 2020 is primarily due to fair value adjustments to certain office and retail properties totaling $1.2 billion.

Interest Coverage

2.8x

BBB (High) Negative Trend

by DBRS

Unencumbered Assets $4.0B

WAIR(1)

3.5%WATM(1)

3.5 years

Available under Lines of Credit

$989.5M

Debt(1) to Total Assets

Other Disclosures on this slide

DBRS rating

Mortgages 27%Unsecured

Debentures 15%

Unsecured Term Loans 4%

Lines of Credit3%

Unitholders' Equity and Exchangeable Units

51%

$12.5 Billion

Total

Capitalization

44.6% 44.6% 44.4%

47.7% (2)

46.3%

30%

35%

40%

45%

50%

2017 2018 2019 2020 Q2 2021


(1) In April 2021, H&R entered into a 10-year lease with an industrial tenant to occupy the entire property totaling 105,014 square feet.(2) Expected to be developed into two industrial buildings totalling approximately 329,000 square feet.(3) Expected to be developed into industrial property.(4) Excess lands held for future-redevelopment. These lands are adjacent to the REIT’s 3777 Kingsway office tower of which it also has a 50% ownership interest.

Canadian Properties Under Development(in thousands of Canadian Dollars)

As at June 30, 2021

Ownership

Interest

Number of

Acres

Total

Development

Budget

Properties

Under

Development

Costs

Remaining

to Complete

Expected

Yield

on Cost

Expected

Completion

Date

Current Developments:

34 Speirs Giffen Ave., Caledon, ON(1)100.0% 4.9 $16,342 $6,193 $10,149 7.0% Q2 2022

140 Speirs Giffen Ave., Caledon, ON 100.0% 4.7 14,358 5,561 8,797 6.0% Q2 2022

9.6 30,700 11,754 18,946

Future Developments:

Industrial Lands (Remaining lands), Caledon, ON 100.0% 117.6 - 74,871 -

7333 Mississauga Rd. N., Mississauga, ON(2)100.0% 15.4 - 20,975 -

Slate Dr., Mississauga, ON(3)50.0% 24.6 - 19,971 -

3791 Kingsway, Burnaby, BC(4) 50.0% 0.6 - 7,908 -

158.2 - 123,725 -

Total 167.8 $30,700 $135,479 $18,946

At H&R's Ownership Interest

(in thousands of Canadian dollars)


U.S. Properties Under Development

(1) 35-storey residential tower consisting of 315 luxury residential rental units and 6,450 square feet of retail space. (2) Total project spans 38.4 acres. Construction commenced in June 2018 on Phase 1 of this project which was substantially completed and transferred to

investment properties in Q4 2020. Construction commenced in March 2019 on Phase 2 of this project which will consist of 232 residential rental units. Future phases will be announced as further development information becomes available.

(3) Residential development consisting of 383 residential rental units which is close to major technology employers including Apple, IBM, Oracle and Samsung as well as the University of Texas at Austin and downtown Austin.

(4) Seven-storey residential tower consisting of 263 residential rental units, which is part of a larger master planned community and is adjacent to transit, Microsoft Corporation’s headquarters, and future light rail which is expected to be completed in 2023.

(5) Consists of seven separate parcels of land in the United States totalling 99.0 acres. H&R has a 31.7% interest in one of the parcels amounting to U.S. $12.2 million at H&R’s ownership interest. H&R is the sole owner of the remaining six parcels.

(in thousands of U.S. Dollars)

As at June 30, 2021

At H&R Ownership Interest

(in thousands of U.S. dollars)

Development Name

Ownership

Interest

Number

of Acres

Total

Development

Budget

Properties

Under

Development

Costs

Remaining to

Complete

Construction

Financing

Available

Expected

Yield

on Cost

Expected

Completion

Date

Current Developments:

Shoreline, Long Beach, CA(1) 31.2% 0.9 $71,097 $60,035 $11,062 $11,108 6.2% Q1 2022

Hercules Project (Phase 2), Hercules, CA(2) 31.7% 2.8 31,633 28,282 3,351 5,180 6.0% Q4 2021

The Pearl, Austin, TX(3) 33.3% 5.0 24,398 22,844 1,554 1,761 6.2% Q4 2021

Esterra Park, Seattle, WA(4) 33.3% 1.1 32,537 32,131 406 1,554 6.0% Q4 2021

9.8 159,665 143,292 16,373 19,603

Future Developments:

Jersey City Lands, Jersey City, NJ 100.0% 12.4 - 162,857 - -

Other Remaining Future Developments(5)99.0 - 104,303 - -

111.4 - 267,160 - -

Total (excluding ECHO) 121.2 $159,665 $410,452 $16,373 $19,603


Shoreline Gateway - Long Beach, CA

FACT SHEET

Residential development site

H&R Ownership: 31.2%

35-storey residential tower consisting of 315 residential rental units and 6,450 sf of retail space

Will become the tallest residential tower in Long Beach with views overlooking the Pacific Ocean

Development budget of U.S. $71.1M and construction financing of U.S. $41.1M has been secured, both at H&R’s ownership interest

Expected to be completed in Q1 2022


Hercules Bayfront – San Francisco, CA

PHASE 1: “The Exchange at Bayfront”

In Q4 2020, The Exchange at Bayfront consisted of 172 residential rental units, including lofts and townhomes and 13,762 square feet of ground level retail space, reached substantial completion and was transferred from properties under development to investment properties.

PHASE 2: “The Grand at Bayfront”

232 residential rental units, including a state-of-the-art fitness center, bike shop, residents lounge and sporting club. Total development budget of U.S. $31.6 million and construction financing of U.S. $20.7 million has been secured, both at H&R’s ownership interest. Expected to be completed in Q4 2021.

H&R OWNERSHIP: 31.7%

38.4 acres of land to be developed into a waterfront master planned community which will be surrounded by a future intermodal transit centre.


The Pearl - Austin, TX

FACT SHEET



383 residential rental units

Close to major technology employers, including Apple, IBM, Oracle and Samsung, as well as the University of Texas at Austin and downtown Austin


Expected completion: Q4 2021


Esterra Park - Seattle, WA

FACT SHEET



263 residential rental units

Part of a larger master planned community and is adjacent to Microsoft Corporation’s headquarters, bus transit and future light rail, which is expected to be completed in 2023


Expected completion: Q4 2021


Future Intensification Opportunities

Office Opportunities:▪ 3777 & 3791 Kingsway Street, Burnaby, BC▪ 145 Wellington Street W., Toronto, ON▪ 53 & 55 Yonge Street, Toronto, ON▪ 310-320-330 Front Street W., Toronto, ON

Retail Opportunities:▪ Dufferin Mall, Toronto, ON▪ Grant Park, Winnipeg, MB▪ Kildonan Place, Winnipeg, MB▪ Northland Village, Calgary, AB▪ Orchard Park Shopping Centre, Kelowna, BC▪ Place d’Orleans, Orleans, ON▪ Sunridge Mall, Calgary, AB


3777 & 3791 Kingsway – Burnaby, BC

LOCATION

3777 & 3791 Kingsway is located along the Kingsway at the intersection with Boundary Rd., directly across from Central Park. The park is 220-acres of green space including walking trails, playgrounds, and other outdoor activities.

THE PROJECT

• In June 2020, H&R along with its partner, submitted a re-zoning application for the east and north portions of its 3777 & 3791 Kingsway sites

• The proposal will add approximately 2,000 residential rental units in four mixed-use high-density towers including retail and residential uses with approximately 1,900,000 square feet of residential area and 47,000 square feet of commercial area

• The REIT expects to obtain approval for its re-zoning and site plan applications in Q1 2023


145 Wellington St. W. – Toronto, ON

LOCATION

145 Wellington St. W. is located at the junction of Toronto’s Financial and Entertainment Districts

THE PROJECT

In August 2019, H&R submitted a re-zoning and site plan approval application for the redevelopment of 145 Wellington St. W., which is currently a 13-storey office building

The project will redevelop the subject site with a full office replacement in a new modern 13-storey podium, topped with a 47-storey residential tower, for an overall building height of 60 storeys

A total of 156,000 square feet of office space and 1,709 square feet of grade-related retail and 432 new residential rental units is proposed

Re-zoning and site plan approval is expected in Q4 2021


53 & 55 Yonge St. – Toronto, ON

LOCATION

53 & 55 Yonge St., are located in the heart of Toronto’s Financial District

THE PROJECT

In November 2020, the REIT acquired 53 Yonge St., a five-storey 11,110 square foot office property, for $11.5 million

The two properties encompass approximately 0.37 acres and the REIT submitted a re-zoning application in March 2021 to replace the existing 13-storey and five-storey office buildings with a 66-storey residential and office tower with retail uses on the first two floors

This breaks down further into approximately 12,000 square feet of retail space, 146,000 square feet of office space and 320,000 square feet of residential space (approximately 500 residential rental units)

The REIT expects to obtain approval for its re-zoning and site plan applications in Q4 2022


310 Front St. – Toronto, ON

LOCATION

310 Front St. is located at the junction between Toronto’s Financial and Entertainment Districts

THE PROJECT

In April 2021, H&R submitted a combined a re-zoning application and official plan amendment application for a 69-storey mixed use development including retail, residential and office uses

The development will replace the existing eight-storey office building at 310 Front St., and will integrate into H&R’s larger office block which incudes 320 and 330 Front St.

The project will include approximately 118,000 square feet of office, 2,000 square feet of retail and 428,000 square feet of residential space

The REIT expects to obtain approval for re-zoning and site plan applications in Q4 2022


Dufferin Grove Village – Toronto, ON

LOCATION

New community is in direct proximity to Dufferin Station on the TTC’s Bloor Line, and it introduces a mix of residential and commercial uses including, a new public park

THE PROJECT

In July 2019, H&R submitted combined applications for re-zoning and for the redevelopment of the surface parking lots, drive-through restaurants and strip plaza that currently occupy the north end of Dufferin Mall to create “Dufferin Grove Village”

The project will replace the surface parking with three residential buildings over two blocks

The west block will support two residential buildings of 20 and 36 storeys, and the east block will support a 16 storey tower with a 10 storey podium

Combined, they will introduce approximately 1,300 residential rental units (including 120 affordable units) to the site as well as 130,000 square feet of retail space

The REIT expects to obtain approval for its re-zoning application in Q4 2021


Sustainability at H&R REIT

Sustainability at H&R REIT, encompasses the Environmental, Social and Governance (ESG) features that can materially affect the long-term value of our company. We at H&R REIT believe that tracking both building performance and corporate metrics provides a better indication of overall achievement and contributes to our exceptional culture.

Environmental Social Governance

The Environmental section provides an overview and highlights of the environ-

mental impact of our business activities as asset

and property managers. For greater detail please refer to the Supplement found on our

website.

The Social Factors section focuses on our personal

interactions with our employees, tenants and

customers in the communities in which we

operate.

With a diverse and experienced Board of

Trustees, high disclosure standards, and strong

governance practices, we are committed to maintaining

the highest ethical standards as one of Canada’s leading

real estate companies.


Our Approach to Sustainability

Integrate sustainability priorities into decision making across all stages of an asset’s lifecycle.

Strategic Planning

In line with our strategic planning processes, H&R REIT’s Executive team identifies and assesses material environmental, social and governance risks. Annually, the Executive team reviews the key environmental, social and governance factors for the upcoming years.

Asset Management

By applying Sustainability and Environmental guidelines for Operations, our Property Operations and Asset Management departments integrate sustainability opportunities into their daily management and tracking processes.

Acquisitions

H&R REIT has well established governance structures such as the Board Investment Committee to oversee and approve acquisitions inline with the REIT’s strategic plan. H&R conducts environmental due diligence prior to acquiring a property, and if recommended, undertakes further remedial action and monitoring.

Development

Sustainability goals are established for our assets that are selected for renovation or redevelopment.


4.1 %Reduction in normalized

emissions intensity in 2019 vs. 2018 for H&R Utility

Tracker properties.

Climate and Resource Efficiency

H&R REIT’s like-for-like electricity use decreased by 9% in 2020 compared to 2019; this reduction is equivalent to the electricity use of 2,920 single-family homes in Ontario1.

9%

2,920 homes

H&R REIT’s like-for-like water use decreased by 9.6% in 2020 compared to 2019; equivalent to the annual household water use of 1,398 people2.

1,398 people

9.6%

1 OEB Report: Defining Ontario’s Typical Electricity Customer (Ontario Energy Board, 2018)

2 How much water do I use at home each day? (U.S. Geological Survey)

Properties tracked by Energy Profiles Limited on H&R Utility Tracker (making up approximately 22% of H&R’s portfolio) achieved a 4.1% reduction in normalized emissions intensity (2019 vs. 2018).

In 2020, H&R expanded our reporting boundary to report utility consumption and emissions wherever H&R has control over utility use and/or is able to access utility data. The result was an increase in data coverage1from 22% of 2018 usage (CDP 2019 Reporting) to 62% of 2019 usage (CDP 2020 Reporting). This year, (upcoming CDP 2021 Reporting) data coverage has been further increased to 65%.

H&R REIT’s like-for-like Greenhouse Gas (GHG) market-based emissions decreased by over 10% in 2020 compared to 2019; equivalent to taking 2,093 passenger vehicles off the road2.

1 Complete or partial, as per Sustainability Accounting Standards Board (SASB) definitions 2 Greenhouse Gas Emissions from a Typical Passenger Vehicle (United States Environmental Protection Agency, 2018)


Diversity and Inclusion

We are proud to share that WOMEN represent the following percentages of our team:

2020 2019Senior Executives 45% 33%All Executives 42% 40%Overall Workforce 47% 47%Board of Trustees 25% 12.5%

H&R REIT is guided by our Diversity Policy. We recognize that

to be successful in a multi-cultural world, we must embrace

and adopt diversity outside of gender, including disability,

age, ethnicity, business experience and sexual orientation.

Such diversity is important to ensure that H&R REIT can

draw on a broad range of approaches, backgrounds, skills

and experience to achieve effective stewardship and

management.

As at H&R’s 2021 Annual General Meeting, 30% of the Board of Trustees self-identify as female.


Governance Practices

H&R REIT has established policies governing the tenure and constitution of our Board of Trustees which will enhance the diversity and reduce risk for our organization. Management and the Board will review H&R REIT’s corporate governance practices regularly to ensure that they align with best practice and provide strong transparency to our unitholders.

• Tenure for all new trustees is limited to 10 years

• Since 2016, the REIT has undertaken a comprehensive board renewal process, expanding from 5 members to 10 members, with 8 of the 10 candidates at the 2021 AGM added over the past five years, including 4 who are new additions in 2021

• Board renewal process executed in a thoughtful and prudent manner, satisfying the need for change and new perspectives, while also allowing for continuity and retention of institutional memory

• Women currently represent 30% of our Board, marking progress on the Board’s diversity commitment and achieving the Canada Club’s aim for better gender balance at the Board level

• Independent Board Chairperson

• Say on Pay vote (95% support for 2021) strongly supports executive compensation

• Expanded the minimum unit ownership to Trustees and all Executive Officers

• Clawback policy applicable to all incentive compensation


Summary

▪ One of the largest REITs in Canada with total assets of $13.1 Billion

▪ High quality real estate

▪ Predictable income▪ Creditworthy tenants

▪ Long-term leases, with contractual rent escalations

▪ High, stable occupancy

▪ Minimal near term lease expiries and debt maturities

▪ Development pipeline expected to create significant value and enhance cash flows

▪ Solid balance sheet with a conservative payout ratio

▪ Fully internalized and aligned management

▪ CEO, founders and trustees own approximately6% of the REIT (including exchangeable units)

▪ NAV per unit is $22.29(1)

(1) Refer to the June 30, 2021 MD&A for a detailed calculation.

stability, security & growth

Documents