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## 19. Risk management (continued): 

The bank indebtedness is subject to variable interest rates. An increase in interest rates of 100 basis points for the year ended December 31, 2010 would have decreased net earnings by approximately $300 (2009 - $500). 

This analysis assumes that all other variables, in particular foreign exchange rates, remain constant. 

## (d) Fair values: 

The fair values of the Trusts’ mortgages and amount receivable, accounts receivable, cash and cash equivalents, bank indebtedness and accounts payable and accrued liabilities approximate their carrying amounts due to the relatively short periods to maturity of these financial instruments. 

The fair value of the mortgages payable has been determined by discounting the cash flows of these financial obligations using year-end market rates for debt of similar terms and credit risks. Based on these assumptions, the fair value of mortgages payable at December 31, 2010 has been estimated at $2,697,922 (2009 - $2,637,203) compared with the carrying value of $2,706,707 (2009 - $2,818,476). 

The fair value of the debentures payable has been determined by discounting the cash flows of these financial obligations using year-end market rates for debt of similar terms and credit risks. Based on these assumptions, the fair value of debentures payable at December 31, 2010 has been estimated at $1,007,812 (2009 - $704,935) compared with the carrying value of $822,340 (2009 - $565,758). 

## 20. Joint venture and co-ownership activities : 

These combined financial statements include the REIT’s proportionate share of assets, liabilities, revenue, expenses and cash flows of the joint ventures and co-ownerships. The REIT’s proportionate share of these joint ventures and co- ownerships range between 20% and 98.5%, summarized as follows: 

<img src='content_image/268950.jpg'>

## 21. Related party transactions: 

H&R Property Management Ltd. (the “Property Manager”), a company partially owned by family members of the Chief Executive Officer, provides property management services for substantially all properties owned by the REIT, including leasing services, for a fee of 2% of gross revenue. The Property Manager also provides support services in connection with the acquisition, disposition and development activities of the REIT and is also entitled to an incentive fee. 

