Canadian Net Real Estate Investment Trust : 2021 Q3 MD&A

Management Discussion & Analysis

Q3 2021

Period ended September 30th, 2021

Form 51-102F1

Canadian Net Real Estate Investment Trust

SUMMARY OF SELECTED FINANCIAL INFORMATION

	9 months
Periods ended September 30	2021		2020		%
Financial info
Property rental income	14,020,771		9,286,366	4,734,405	51%
Total revenue	14,020,771		9,296,656	4,724,115	51%
Net income and
comprehensive income	17,636,921		8,773,525	8,863,396	101%
NOI (1)	10,417,458		7,126,776	3,290,682	46%
FFO (1)	7,820,191		5,149,863	2,670,328	52%
Recurring FFO (1)(2)	7,848,006		5,139,573	2,708,433	53%
AFFO (1)	7,234,005		4,747,684	2,486,321	52%
EBITDA	21,336,069		10,334,813	11,001,256	106%
Adjusted EBITDA (1)	10,716,808		7,074,997	3,641,811	51%
Investment properties	225,342,146		140,230,496	85,111,650	61%
Adjusted investment properties (3)	268,241,443		171,615,448	96,625,995	56%
Total assets	254,507,121		159,169,429	95,337,692	60%
Total mortgage/loans/long term debt (4)	118,970,214		73,912,110	45,058,104	61%
(including revolving line of credit)	118,970,214		79,247,110	39,723,104	50%
Total convertible debentures	8,228,420		3,004,263	5,224,157	174%
Total equity	123,207,391		74,303,173	48,904,218	66%
Weighted average units o/s - basic	18,030,472		14,239,993	3,790,479	27%
Amounts on a per unit basis
FFO	0.434		0.362	0.072	20%
Recurring FFO	0.435		0.361	0.074	21%
AFFO	0.401		0.333	0.068	20%
Distributions	0.225		0.192	0.033	17%
Financial ratios
Weighted avg. interest rate - fixed loans/mortgages	3.42%		3.73%	(0.31%)
Debt to gross assets - including converts	50%		52%	(2%)
Debt to gross assets - excluding converts	47%		50%	(3%)
Interest coverage ratio	3.2x		3.0x	0.2x
Debt service coverage ratio	1.9x		1.9x	-
Distributions as a % of FFO per unit	52%		53%	(1%)
Distributions as a % of Recurring FFO per unit	52%		53%	(1%)
Distributions as a % of AFFO per unit	56%		57%	(1%)
Leasing information
Occupancy	99%		99%	-
Mix of tenancy based on NOI(5)
National	89%		83%	6%
Regional	9%		14%	(5%)
Local	2%		3%	(1%)
Breakdown of NOI per property type(5)
Retail	55%		34%	21%
National service-station and c-store chains	27%		42%	(15%)
Quick Service Restaurants	16%		22%	(6%)
Other	2%		2%	-
	100%		100%	-
Number of properties	86		66	20
Other
Average term to maturity - mortgages (years)	6.1		5.5	0.6
Average term to maturity - leases (years)	7.8		7.9	(0.1)
IFRS capitalization rate	6.13%		6.43%	(0.30%)

1. See appropriate sections for reconciliation to the closest IFRS measure and section "Explanation of non-IFRS financial measures"
2. Recurring FFO excludes ''Other revenues'' as presented on the Consolidated Financial Statements
3. Adjusted Investment Properties includes the Trust's proportionate share of value of investment properties owned through joint ventures; Refer to Note 4 Properties and Note 5 ([1] value of developed properties, [2] leased properties and [3] properties under development) in Canadian Net's Consolidated Financial Statements
4. Excludes convertible debentures
5. Includes the Trust's proportionate share of NOI from properties held through joint ventures

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Canadian Net Real Estate Investment Trust

HISTORICAL SELECTED FINANCIAL PERFORMANCE

								$0.49
								$0.41
							$0.37
						$0.32
					$0.25			$0.26
$0.13	$0.18	$0.19	$0.21		$0.18	$0.20	$0.22
$0.16	$0.16
	$0.13	$0.14	$0.15

$0.05 n/a

2011	2012	2013	2014	2015*	2016*	2017*	2018*	2019*	2020*
					FFO/unit		Distribution/unit

*Recurring FFO: See appropriate sections for reconciliation to the closest IFRS measure and section "Non-IFRS financial measures"

TENANT OVERVIEW - PERIOD ENDED SEPTEMBER 30, 2021

TOP 10 TENANTS (80%)(1)

3% 4% 4%

24%

20%

10% 11%

5% 6% 6% 7%

(2) Groupe	(4)	(5)	(6)	(7)	Other
BSG(3)

Notes:

1. Based on Net Operating Income (''NOI''); Includes the Trust's proportionate share of NOI from properties held through joint ventures
2. Parkland Fuel Corporation operates service-stations under the Ultramar and Esso Banners
3. Groupe BSG is a large regional service-station operator operating under various banners
4. Metro operates grocery stores under the Metro, Super C and Food Basics banners
5. Suncor operates Petro-Canadaservice-stations
6. Sobeys operates IGA grocery stores, Shell service-stations and Sobeys Fast Fuel service-stations
7. Loblaws operates the Pharmaprix pharmacies and the Provigo, Maxi, Independent's and Atlantic Superstore grocery banners

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Canadian Net Real Estate Investment Trust

BREAKDOWN OF PROPERTIES & OPERATING SECTORS

								Area (sf)
#	Address	City/Province	Type	Ownership	Land	Building	CNET %	Status
1	40-50 Brunet Street	Mont St-Hilaire, Qc	QSR, gas, c-store	100%	69 K	5,452	5,452	Income producing
2	230	St-Luc Blvd.	St-Jean-sur-Richelieu, Qc	Gas, c-store	100%	65 K	8,359	8,359	Income producing
3	196	Hôtel-de-Ville Blvd.	Rivière-du-Loup, Qc	Gas, c-store	100%	14 K	2,400	2,400	Income producing
4	1349-1351 Road 117	Val-David, Qc	QSR, gas, c-store	100%	36 K	4,748	4,748	Income producing
5	275	Barkoff Street	Trois-Rivières, Qc	Gas, c-store	65%	60 K	2,400	1,560	Income producing
6	530	Barkoff Street	Cap-de-la-madeleine, Qc	Gas, c-store	50%	30 K	2,641	1,321	Income producing
7	340-344 Montée du Comté	Les Coteaux, Qc	QSR, gas, c-store	100%	67 K	8,071	8,071	Income producing
8	1440-50St-Laurent East Blvd.	Louiseville, Qc	QSR, gas, c-store	50%	115 K	6,132	3,066	Income producing
9	1460	St-Laurent East Blvd.	Louiseville, Qc	QSR	50%	37 K	4,841	2,421	Income producing
10	490-494 De L'Atrium Blvd.	Québec City, Qc	Gas, c-store	100%	34 K	6,574	6,574	Income producing
11	7335	Guillaume Couture Blvd.	Lévis, Qc	QSR	100%	30 K	2,860	2,860	Income producing
12	1319	Brookdale Avenue	Cornwall, On	QSR	100%	33 K	3,127	3,127	Income producing
13	4200	Bernard-Pilon Street	St-Mathieu de Beloeil, Qc	Gas, c-store	100%	20 K	1,200	1,200	Income producing
14	1901	Raymond Blais Street	Sainte-Julie, Qc	Gas, c-store	100%	27 K	1,392	1,392	Income producing
15	2000	Leonard de Vinci Street	Sainte-Julie, Qc	QSR	100%	39 K	4,575	4,575	Income producing
16	2050	Leonard de Vinci Street	Sainte-Julie, Qc	Gas	100%	86 K	1,255	1,255	Income producing
17	2051	Nobel Street	Sainte-Julie, Qc	QSR	100%	50 K	5,975	5,975	Income producing
18	16920-16930St-Louis Ave.	St-Hyacinthe, Qc	QSR, gas, c-store	100%	70 K	6,290	6,290	Income producing
19	3726	Des Forges Blvd.	Trois-Rivières, Qc	QSR	100%	19 K	3,360	3,360	Income producing
20	2871-2885 Des Prairies Street	Trois-Rivières, Qc	QSR, gas, c-store	100%	60 K	6,662	6,662	Income producing
21	2350	Chemin des Patriotes	Richelieu, Qc	QSR, gas, c-store	100%	48 K	4,851	4,851	Income producing
22	4932	Des Sources Blvd.	Pierrefonds, Qc	QSR	100%	23 K	2,716	2,716	Income producing
23	314	De Montigny Street	St-Jérôme, Qc	QSR	100%	24 K	2,832	2,832	Income producing
24	288	Valmont Street	Repentigny, Qc	Gas, c-store	100%	22 K	2,400	2,400	Income producing
25	2439	Ste Sophie Blvd.	Sainte-Sophie, Qc	Gas, c-store	95%	58 K	4,856	4,613	Income producing
26	2429	Sainte-Sophie Blvd.	Sainte-Sophie , Qc	QSR	95%	45 K	3,710	3,525	Income producing
27	610	Saint-Joseph Blvd.	Gatineau, Qc	Other	100%	13 K	3,372	3,372	Income producing
28	513	Des Laurentides Blvd.	Laval, Qc	Other	100%	12 K	3,019	3,019	Income producing
29	123	St-Laurent East Blvd	St-Eustache, Qc	Gas, c-store	100%	22 K	3,846	3,846	Income producing
30	4 North Street	Waterloo, Qc	Gas, c-store	100%	14 K	2,845	2,845	Income producing
31	3355 de la Pérade Street	Quebec City, Qc	Retail	100%	142 K	28,894	28,894	Income producing
32	2555	Montmorency Blvd	Quebec City, Qc	Retail	100%	110 K	25,480	25,480	Income producing
33	3592	Laval Street	Lac Mégantic, Qc	Gas, c-store	100%	20 K	1,777	1,777	Income producing
34	536	Algonquin Blvd.	Timmins, On	QSR	100%	102 K	2,690	2,690	Income producing
35	1730	Jules Vernes Ave.	Cap Rouge, Qc	QSR	50%	38 K	4,100	2,050	Income producing
36	235	Montée Paiement	Gatineau, Qc	Retail	100%	149 K	25,706	25,706	Income producing
37	510	Bethany Ave.	Lachute, Qc	QSR, gas, c-store	50%	113 K	11,910	5,955	Income producing
38	1337	Iberville Blvd.	Repentigny, Qc	Retail	100%	57 K	17,050	17,050	Income producing
39	222	St-Jean-Baptiste Blvd.	Mercier, Qc	QSR, gas, c-store	82.5%	70 K	9,488	7,828	Income producing
40	230	St-Jean-Baptiste Boul.	Mercier, Qc	QSR	82.5%	33 K	4,165	3,436	Income producing
41	101	Hébert Street	Mont-Laurier, Qc	Retail	100%	350 K	37,530	37,530	Income producing
42	290	Mgr. Langlois Blvd.	Valleyfield, Qc	QSR, gas, c-store	50%	107 K	10,114	5,057	Income producing
43	510	Portland Street	Dartmouth, NS	QSR	100%	32 K	4,631	4,631	Income producing
44	20 Frontenac Ouest Blvd.	Thetford Mines, Qc	QSR	100%	30 K	2,400	2,400	Income producing
45	975	Wilkinson Ave.	Dartmouth, NS	QSR, gas, c-store	50%	85 K	7,975	3,988	Income producing
46	1501	Jacques Bedard Street	Quebec City, Qc	Retail	100%	152 K	24,652	24,652	Income producing
47	852	Laure Boulevard	Sept Iles, Qc	QSR	100%	28 K	3,239	3,239	Income producing

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Canadian Net Real Estate Investment Trust

							Area (sf)
#	Address	City/Province	Type	Ownership	Land	Building	CNET %	Status
48	87-91 Starrs Road	Yarmouth, NS	Gas, c-store	100%	62 K	3,335	3,335	Income producing
49	4675 Shawinigan Sud Blvd.	Shawinigan, Qc	QSR, gas, c-store	50%	101 K	7,126	3,563	Income producing
50	480	Bethany Ave.	Lachute, Qc	Retail	100%	492 K	75,681	75,681	Income producing
51	484	Bethany Ave.	Lachute, Qc	QSR	100%	32 K	3,037	3,037	Income producing
52	2077 Laurentides Blvd.	Laval, Qc	Retail	100%	31 K	9,462	9,462	Income producing
53	111-117 Desjardins Bvld.	Maniwaki, Qc	Retail	100%	45 K	16,085	16,085	Income producing
54	550	Laflèche Boulevard	Baie Comeau, Qc	Retail	100%	102 K	19,676	19,676	Income producing
55	304	LaSalle Boulevard	Baie Comeau, Qc	QSR	100%	13 K	3,300	3,300	Income producing
56	35 route 201	Coteau-du-Lac, Qc	QSR, gas, c-store	50%	31 K	4,500	2,250	Income producing
57	835	Lucien Chenier	Farnham, Qc	QSR, gas, c-store	100%	89 K	7,000	7,000	Income producing
58	24 Miikana Way	Kenora, On	Retail	100%	534 K	80,881	80,881	Income producing
59	1410 Principale Street	St-Etienne-des-Grès, Qc	QSR, gas, c-store	75%	26 K	4,122	3,092	Income producing
60	2505 Saint-Louis Street	Gatineau, Qc	Retail	100%	88 K	25,389	25,389	Income producing
61	124	Beech Hill Road	Antigonish, NS	QSR, gas, c-store	50%	176 K	4,040	2,020	Income producing
62	16670 Des Acadiens Blvd.	Bécancour, Qc	QSR, gas, c-store	75%	14 K	3,600	2,700	Income producing
63	1875 Sainte-Marguerite Street	Trois-Rivières, Qc	Gas, c-store	75%	19 K	2,400	1,800	Income producing
64	5100 Wilfrid Hamel Blvd.	Quebec City, Qc	Gas, c-store	50%	26 K	3,077	1,539	Income producing
65	369	St-Charles Street West	Longueuil, Qc	Gas, c-store	50%	15 K	2,578	1,289	Income producing
66	1305-1375 Sherbrooke Street	Magog, Qc	QSR, gas, c-store	50%	38 K	8,900	4,450	Under development
67	250	Saint-Antoine Nord Street	Lavaltrie, Qc	Retail	100%	87 K	22,794	22,794	Income producing
68	524-534Saint-Joseph Blvd.	Drummondville, Qc	QSR	50%	26 K	7,684	3,842	Income producing
69	570	Saint-Joseph Blvd.	Drummondville, Qc	QSR	50%	52 K	3,855	1,928	Income producing
70	491	Seigneuriale Street	Quebec City, Qc	Retail	100%	103 K	21,303	21,303	Income producing
71	150	St-Alphonse Blvd.	Roberval, Qc	Retail	100%	207 K	43,378	43,378	Income producing
72	15 McChesney Ave.	Kirkland Lake, ON	Retail	100%	200 K	45,157	45,157	Income producing
73	394	Westville Road	New Glasgow, NS	Retail	100%	487 K	90,800	90,800	Income producing
74	1225 Kings Street	Sydney, NS	Retail	100%	155 K	47,189	47,189	Income producing
75	478	Ch. Knowlton	Lac Brome, Qc	QSR, gas, c-store	100%	51 K	4,500	4,500	Income producing
76	14 Sunset Road	Pictou, NS	QSR, gas, c-store	50%	129 K	5,460	2,730	Income producing
77	Laurier Boulevard	Terrebonne, Qc	QSR	40%	35 K	3,885	1,554	Under development
78	7751-7811Roi-Rene Blvd.	Anjou, Qc	QSR	40%	33 K	5,800	2,320	Under development
79	10 700 Ch. Cote-de-Liesse	Lachine, Qc	Gas	100%	37 K	395	395	Income producing
80	860	D'Alma Street	Chicoutimi, Qc	QSR	40%	40 K	3,885	1,554	Under development
81	135	Barton Street East	Hamilton, ON	Retail	100%	153 K	37,509	37,509	Income producing
82	95-103 Water Street North	Cambridge, ON	Retail	100%	122 K	38,500	38,500	Income producing
83	107	Bridge Street	Dunnville, ON	Retail	100%	91 K	27,651	27,651	Income producing
84	199	Simcoe Avenue	Keswick, ON	Retail	100%	106 K	27,838	27,838	Income producing
85	1035 Wilfrid-Hamel Blvd.	Quebec City, Qc	Retail	100%	98 K	27,400	27,400	Income producing
86	2 Saint-Martin Street	Bromont, Qc	QSR	100%	6 K	5,703	5,703	Income producing
87	Serge Pépin Street*	Beloeil, Qc	QSR	40%	25 K	3,885	1,554	Under development
88	Montée des Pionniers*	Lachenaie, Qc	QSR	40%	24 K	3,885	1,554	Under development
QSR: Quick Service Restaurant				7,061 K	1,107,207	1,040,748
*Acquired after September 30, 2021

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