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HR REIT H & R REIT Reports First Quarter 2021 Results Toronto , Ontario , May 13 , 2021 - H & R Real Estate Investment Trust ( “ H & R ” or “ the REIT ” ) ( TSX : HR.UN ) announces its financial results for the three months ended March 31 , 2021 . BUSINESS UPDATE H & R is pleased to report stable and consistent Q1 2021 financial and operating results reflecting the quality of the REIT's portfolio and the strength of the REIT's balance sheet . While the extraordinary events that followed the arrival of the COVID - 19 pandemic a year ago have required significant management attention to ensure the safety and security of the REIT's employees , tenants , properties and financial condition , management has continued to invest considerable time and effort into the REIT's objectives of improving the quality and value of the REIT's portfolio and improving the profile of an investment in H & R units . President & CEO Tom Hofstedter commented " As we emerge from the past year's challenging environment , we are pleased with both the REIT's financial and operating results and the progress we continue to make in advancing strategic initiatives . In the past year we have completed substantial dispositions and acquisitions , completed successful developments and advanced future development projects which will commence in 2021 and 2022 , and expect to complete further property dispositions in the remainder of 2021. These activities have laid the foundation for more significant strategic changes , which we hope to provide more details of in coming months . " FINANCIAL HIGHLIGHTS Rentals from investment properties ( millions ) Property operating income ( millions ) Fair value adjustment on real estate assets ( millions ) Net income ( loss ) ( millions ) Funds from operations ( “ FFO ” ) ( millions ) ( ¹ ) FFO per Unit ( basic ) ( ¹ ) Adjusted Funds from Operations ( “ AFFO ” ) ( millions ) ( 1 ) AFFO per Unit ( basic ) ( ¹ ) Distributions per Unit Payout ratio per Unit ( as a % of FFO ) ( ¹ ) Net Asset Value ( “ NAV ” ) per Unit as at March 31 ( 1 ) 3 months ended March 31 2021 $ 266.5 2020 $ 279.7 $ 133.7 $ 140.6 $ 64.7 $ 159.5 $ 119.7 $ 0.40 $ 97.1 $ 0.32 $ 0.17 43.5 % $ 22.24 ( $ 1,301.2 ) ( $ 1,019.8 ) $ 136.1 $ 0.45 $ 120.1 $ 0.40 $ 0.35 76.5 % $ 22.26 ( 1 ) These are non - GAAP measures . See " Non - GAAP Financial Measures " in this press release . H & R's management discussion and analysis ( " MD & A " ) for the three months ended March 31 , 2021 includes a reconciliation of net income ( loss ) to FFO and AFFO as well as the calculation of NAV per Unit . Readers are encouraged to review the reconciliations and calculation in H & R's MD & A . Property operating income decreased by $ 7.0 million for the three months ended March 31 , 2021 compared to the respective 2020 period primarily due to the Retail segment , which decreased by $ 6.6 million due to factors relating to the COVID - 19 pandemic , including : ( i ) tenant closures mainly affecting enclosed shopping centres ; ( ii ) temporary lease amendments reducing rental rates in order to retain tenants who have faced challenging conditions ; and ( iii ) lower percentage rent and specialty leasing earned due to government mandated closures primarily affecting enclosed shopping centres . In addition , four single - tenant retail properties in the United States were vacated in June 2020 , and to date only a portion of the space has been re - leased at lower rental rates . 1 | Page Net income ( loss ) before income taxes increased by approximately $ 1.2 billion for the three months ended March 31 , 2021 compared to the respective 2020 period primarily due to fair value adjustments of real estate assets . This is primarily due to negative fair value adjustments taken in Q1 2020 during the onset of COVID - 19 as a result of challenging conditions in the retail landscape and energy sector volatility affecting office property market fundamentals . This was partially offset by fair value adjustments on financial instruments .