Mr. Glenn Hynes reports

CROMBIE REIT REPORTS FOURTH QUARTER AND FISCAL 2011 RESULTS

Crombie Real Estate Investment Trust has released its results for the fourth quarter and fiscal year ended Dec. 31, 2011.

Year 2011 highlights

Property revenue for the quarter ended Dec. 31, 2011, was $58.7-million, an increase of $3.0-million or 5.4 per cent over the $55.7-million for the quarter ended Dec. 31, 2010, and for the year ended Dec. 31, 2011, was $226.1-million, an increase of $16.7-million or 8.0 per cent over the year ended Dec. 31, 2010.

Same-asset cash net operating income for the quarter ended Dec. 31, 2011, was $27.2-million, an increase of $400,000 or 1.6 per cent, compared with $26.8-million for the quarter ended Dec. 31, 2010, and for the year ended Dec. 31, 2011, same-asset cash NOI was $118.0-million, an increase of $1.4-million or 1.2 per cent over the same period in 2010.

Property-leased space on a committed basis was 94.7 per cent at Dec. 31, 2011, compared with 95.4 per cent at Sept. 30, 2011. Actual occupancy at Dec. 31, 2011, was 93.3 per cent compared with 94.7 per cent at Sept. 30, 2011, and 95.8 per cent at Dec. 31, 2010.

Average rent per square foot from year-to-date leasing activity increased to $15.71 compared with an expiring rent per square foot of $14.15, an increase of 11.0 per cent.

Crombie completed new leasing and renewal activity on 776,000 square feet of GLA during the year ended Dec. 31, 2011, which represents approximately 71.1 per cent of the 2011 expiring lease square footage. The primary shortfall arose from the departure of Nova Scotia Power Inc. in Barrington Tower. This space will be occupied by new tenants led by the Nova Scotia Department of Health by September, 2012.

Funds from operations for the quarter ended Dec. 31, 2011, were 27 cents per unit (payout ratio 83.9 per cent) compared with 27 cents per unit (payout ratio 81.6 per cent) for the same period in 2010. For the year ended Dec. 31, 2011, FFO was $1.09 per unit (payout ratio 82.3 per cent) compared with $1.06 per unit (payout ratio 84.0 per cent) for the same period in 2010.

Adjusted funds from operations for the quarter ended Dec. 31, 2011, were 23 cents per unit (payout ratio 100.3 per cent) compared with 23 cents per unit (payout ratio 97.6 per cent) for the same period in 2010. For the year ended Dec. 31, 2011, AFFO was 88 cents per unit (payout ratio 102.1 per cent) compared with 87 cents per unit (payout ratio 102.4 per cent) for the same period in 2010. Excluding the impact of the second quarter settlement of the delayed-start interest rate swap, AFFO for the year ended Dec. 31, 2011, was 91 cents per unit (payout ratio 99.2 per cent).

Crombie renewed its $150.0-million revolving credit facility at the end of the second quarter for a three-year period.

Commenting on the annual results, Donald E. Clow, FCA, president and chief executive officer, stated: "We are pleased with the progress achieved during 2011 towards our strategic plan of building a high-quality retail portfolio of primarily grocery-anchored properties across Canada. We leveraged the sustainable competitive advantage of our relationship with Sobeys to acquire $147-million of properties (8-per-cent growth) and focused on the redevelopment and improvement of our portfolio in 2011.

"AFFO per unit for 2011 increased 4.6 per cent to 91 cents per unit as compared with 87 cents per unit in 2010, excluding the settlement of a forward-rate interest swap agreement in the second quarter.

"Operating metrics remained stable with same-asset cash NOI growth of 1.2 per cent for the year. Our balance sheet continues to be strong with our debt-to-gross-book value finishing the year at 52.5 per cent and $98.5-million of our revolving credit facility available at Dec. 31, 2011.

"Despite an uncertain global economy throughout 2011, we are pleased that Crombie REIT was able to provide a total unitholder return of over 17 per cent for the year ended Dec. 31, 2011."

The attached table presents a summary of financial performance for the quarter and year ended Dec. 31, 2011, compared with the same periods in fiscal 2010. All amounts are presented in accordance with international financial reporting standards.

                           FINANCIAL HIGHLIGHTS     
          (in millions of Cdn dollars, except per unit amounts)

                                    Three months Three months Year ended Year ended  
                                           ended        ended    Dec. 31,   Dec. 31,
                                         Dec. 31,     Dec. 31,      2011       2010
                                            2011         2010

Property revenue                         $58.682      $55.693   $226.138   $209.437
Property operating expenses               22.528       21.670     84.202     79.300
Property NOI                              36.154       34.023    141.936    130.137
NOI margin percentage                       61.6%        61.1%      62.8%      62.1%
Other items                                               
Lease terminations                         0.005           --      0.168      0.347
Depreciation and amortization             (8.302)      (7.949)   (31.387)   (31.246)
General and administrative expenses       (2.806)      (1.609)   (10.654)    (9.762)
Operating income before financing costs
and income taxes                          25.051       24.465    100.063     89.476
Finance costs, operations                (14.978)     (15.532)   (62.148)   (58.410)
Operating income before income taxes      10.073        8.933     37.915     31.066
Income taxes, deferred                     0.600        0.300     (0.300)     1.000
Operating income attributable to 
unitholders                               10.673        9.233     38.215     32.066
Finance costs, distributions to 
unitholders                              (16.530)     (14.702)   (61.283)   (56.090)
Decrease in net assets attributable 
to unitholders                           $(5.857)     $(5.469)  $(23.068)  $(24.024)
Operating income attributable to 
unitholders per unit, basic 
and diluted                                $0.15        $0.14      $0.56      $0.51

Same-asset property net operating income increased slightly over fourth quarter of 2010. Same-asset property revenue of $48.3-million for the quarter ended Dec. 31, 2011, increased by 1.4 per cent compared with the same quarter in 2010. The property revenue variance was impacted by increases in rental rates offset by lower occupancy rates. Same-asset property revenue of $188.6-million for the year ended Dec. 31, 2011, was 1.9 per cent higher than the year ended Dec. 31, 2010, due to increased base rent as a result of: lease renewal rates exceeding expiring lease rates, offset in part by lower occupancy rates, and higher recoverable property expenses.

Same-asset property operating expenses of $19.3-million for the quarter ended Dec. 31, 2011, were marginally higher than the quarter ended Dec. 31, 2010, due primarily to increased recoverable property taxes. Same-asset property expenses of $72.2-million for the year ended Dec. 31, 2011, increased by 3.3 per cent from the year ended Dec. 31, 2010, due primarily to increased recoverable property taxes and snow-clearing costs offset in part by reduced non-recoverable costs.

For the three months and year ended Dec. 31, 2011, the acquisition and redevelopment property results include the retail properties acquired in December, September and May, 2011, the 20 retail properties acquired during 2010, the property disposed of in October, 2011, and the operating results of six properties that were under redevelopment.

General and administrative expenses

General and administrative expenses for the quarter ended Dec. 31, 2011, increased by 1.9 per cent from 2.9 per cent to 4.8 per cent as a percentage of property revenue, when compared with the same period in 2010. Salaries and benefits in the fourth quarter of 2010 were favourably impacted by the recognition of actuarial gains on Crombie's benefit plans.

General and administrative expenses as a percentage of property revenue remained virtually unchanged for the year ended Dec. 31, 2011, when compared with the same period in 2010.

Same-asset finance costs for the year ended Dec. 31, 2011, have decreased by $1.4-million or 3.1 per cent due to: conversion of Series B convertible debentures, lower interest rate on the revolving credit facility and mortgage maturities. Growth in acquisition and redevelopment finance costs is consistent with Crombie's significant acquisition activity in 2011 and 2010.

Funds from operations and adjusted funds from operations

The increase in FFO for the three months ended Dec. 31, 2011, of $1.7-million was primarily due to growth in acquisition property NOI, net of finance cost increases related to the acquisitions.

AFFO for the three months ended Dec. 31, 2011, of $16.5-million was an increase of $1.4-million over the same period in 2010 due primarily to the improved FFO results.

The increase in FFO for the year ended Dec. 31, 2011, was primarily due to growth in same-asset NOI and higher NOI from the 2011 and 2010 acquisition properties, offset in part by higher finance costs related to those acquisitions.

AFFO for the year ended Dec. 31, 2011, was $60.1-million, an increase of $5.3-million or 9.6 per cent over the same period in 2010, due primarily to the improved FFO results, offset in part by the negative impact of settlement of the swap agreement. During the second quarter of 2011, Crombie settled the last of its forward-rate interest rate swaps for $1.7-million. Excluding the swap settlement, AFFO per unit -- basic -- would have been 91 cents, and AFFO payout ratio would have been 99.2 per cent, a significant improvement over the 102.4-per-cent payout ratio for the same period in 2010.

Liquidity and financings

Crombie's objectives when managing its capital structure are to optimize weighted average cost of capital; maintain financial flexibility and access to long-term debt and equity markets; and maintain ample liquidity. In pursuit of these objectives, Crombie utilizes staggered debt maturities, optimizes its continuing exposure to floating-rate debt and maintains sustainable payout ratios. Crombie has an authorized floating-rate revolving credit facility of up to $150-million, of which $40.0-million was drawn as at Dec. 31, 2011, and an additional $11.5-million encumbered by outstanding letters of credit, resulting in significant available liquidity.

Debt-to-gross-book value is 52.5 per cent (including convertible debentures) at Dec. 31, 2011, compared with 54.8 per cent at Dec. 31, 2010. This leverage ratio is below the maximum 60 per cent, or 65 per cent, including convertible debentures, permitted pursuant to Crombie's declaration of trust. On a long-term basis, Crombie intends to maintain overall indebtedness, including convertible debentures, in the range of 50 per cent to 60 per cent of gross book value, depending upon Crombie's future acquisitions and financing opportunities.

Crombie's interest and debt service coverage for the year ended Dec. 31, 2011, were 2.49 times earnings before interest, taxes, depreciation and amortization and 1.79 times EBITDA, respectively. This compares with 2.41 times EBITDA and 1.74 times EBITDA, respectively, for the year ended Dec. 31, 2010.

Conference call invitation

Crombie will provide additional details concerning its fourth quarter and year ended Dec. 31, 2011, results on a conference call to be held Feb. 23, 2012, at 1 p.m. Eastern Time. To join this conference call, you may dial 647-427-7450 or 888-231-8191. You may also listen to a live audio webcast of the conference call by visiting Crombie's website. Replay will be available until midnight on March 8, 2012, by dialling 416-849-0833 or 855-859-2056 and entering passcode 45513010 or on the Crombie website for 90 days after the meeting.

We seek Safe Harbor.