Q3 2021 Financial Report

FINANCIAL REVIEW

FOR THE THREE AND NINE MONTHS ENDED

SEPTEMBER 30, 2021

11 CHURCH STREET, SUITE 401 TORONTO ON, CANADA M5E 1W1 TEL: [phone]

November 9, 2021

Report to Unitholders

We continued to generate solid growth and strong operating performance in the third quarter, indicating another record year for CAPREIT in 2021. Occupancies rose at again at quarter end, average monthly rents increased, and we saw solid growth in all our key performance benchmarks. Most importantly, our balance sheet and financial position remained strong and resilient with a significant liquidity position.

For the nine months ended September 30, 2021, total operating revenues increased 5.3%, driven by the contribution from acquisitions completed over the last twelve months, strong and stable occupancies and increased average monthly rents. Occupancies for the total portfolio rose to 97.9% while average monthly rents increased 2.7% compared to last year. Stabilized property NOI increased by 2.1% for the nine months ended September 30, 2021, another period of solid and sustainable organic growth. Overall NOI rose 6.3% compared to the same period last year.

Through the first nine months of 2021 we acquired 3,122 suites and sites in Canada and the Netherlands for total costs of $803 million. This growth followed the purchase of 3,262 suites and sites in 2020. These new properties will make a strong, accretive and growing contribution in the months and years ahead. We also sold two non-core properties totalling 87 suites for proceeds of $52.5 million.

Normalized Funds from Operations ("NFFO") increased by 4.5% for the first nine months of 2021 due primarily to the increase in operating revenues and our focus on operational efficiency. Our growth was also accretive as basic NFFO per Unit rose 3.1% for the nine months ended September 30, 2021 despite the 1.3% increase in the weighted average number of Units outstanding. Our NFFO payout ratio improved to a very strong 60.2% at September 30, 2021, underpinning the strength and stability of our monthly cash distributions.

Our balance sheet and financial position remained strong and flexible at September 30, 2021 with debt service ratios well within our guidelines and conservative coverage ratios. Our weighted average mortgage interest rate at quarter end was an attractive 2.55%, and we continue to focus on extending our debt maturities in the current low interest rate environment. Importantly, we maintained a strong and flexible liquidity position with $138 million in cash and $243 million available on our credit lines. We also own over $1.2 billion in unencumbered Canadian properties, providing additional capacity to fund our growth. We were also pleased to see a $480 million gain in the fair value of our property portfolio through the first nine months of 2021 following a $596 million gain at the end of 2020.

Throughout the COVID-19 pandemic, our main priorities have been to protect the health and safety of our people, our residents, and the communities in which we operate. We continue to communicate with our residents, working with them to collect our monthly rents. As a result, we have maintained a very high level of rent collection, with 99% of our rents collected to date, and bad debts in keeping with our track record in pre-pandemic years.

Looking ahead, we see very positive value drivers that we are confident will generate strong and growing returns for our Unitholders over the long term. In addition to portfolio growth, we believe Unitholder value will be driven by our successful asset allocation strategy, our focus on strong suburban markets, rebounding immigration and the return of international students, and the growing seniors' population favoring large, quality single-floor rental properties in their retirement. Additionally, as post-secondary schools reopen for in person classes and employers mandate back to work policies, we are seeing younger renters who returned home during the pandemic re-enter the rental market. With these strong market fundamentals, we also believe we will see further appreciation in the value of our asset base.

In closing, I want to thank our residents for their support and everyone at CAPREIT for their hard work and dedication. These are unprecedented times, and it is the experience and commitment of our people that will guide us through these issues. By working together, we will get through these challenges and emerge stronger than ever before.

MANAGEMENT'S DISCUSSION AND ANALYSIS

OF RESULTS OF OPERATIONS

AND FINANCIAL CONDITION

FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2021

NOVEMBER 9, 2021

TABLE OF CONTENTS

SECTION I: OVERVIEW AND DISCLAIMER

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Basis of Presentation.......................................................................................................................................	3
Forward-LookingDisclaimer ...........................................................................................................................	3
Non-IFRSFinancial Measures ..........................................................................................................................	4
Overview ........................................................................................................................................................	4
Objectives and Business Strategy ...................................................................................................................	4

SECTION II: KEY HIGHLIGHTS

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Summary of Q3 - 2021 Results of Operations...............................................................................................	5
Acquisitions and Dispositions ...........................................................................................................................	6
Key Performance Indicators............................................................................................................................	7
Performance Measures ...................................................................................................................................	10

SECTION III: OPERATIONAL AND FINANCIAL RESULTS

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Net and Occupied Average Monthly Rents and Occupancy ..........................................................................	11
Results of Operations......................................................................................................................................	16
NOI by Region................................................................................................................................................	20
Stabilized NOI by Region ..............................................................................................................................	22
Net Income and Other Comprehensive Income ...............................................................................................	24

SECTION IV: UNIT CALCULATIONS, NON-IFRS FINANCIAL MEASURES

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Per Unit Calculations.......................................................................................................................................	28
Non-IFRSFinancial Measures ..........................................................................................................................	29
Adjusted Cash Generated from Operating Activities.....................................................................................	33

SECTION V: CAPITAL INVESTMENT, INVESTMENT PROPERTY, CAPITAL STRUCTURE, FINANCIAL CONDITION

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Property Capital Investments..........................................................................................................................	34
Investment Properties ......................................................................................................................................	35
Development...................................................................................................................................................	37
Capital Structure.............................................................................................................................................	38
Liquidity and Financial Condition....................................................................................................................	39

SECTION VI: COMPLIANCE AND GOVERNANCE DISCLOSURES, RISKS AND UNCERTAINTIES

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Selected Consolidated Quarterly Information ................................................................................................	43
Accounting Policies and Critical Accounting Estimates, Assumptions and Judgments .......................................	43
Controls and Procedures.................................................................................................................................	43
Risks and Uncertainties....................................................................................................................................	44
Related Party Transactions .............................................................................................................................	44
Commitments and Contingencies .....................................................................................................................	45
Subsequent Events...........................................................................................................................................	45
Future Outlook ................................................................................................................................................	45

SECTION VII: SUPPLEMENTAL INFORMATION

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Property Portfolio ...........................................................................................................................................

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CAPREIT - THIRD QUARTER 2021 MD&A

SECTION I: OVERVIEW AND DISCLAIMER

BASIS OF PRESENTATION

The following Management's Discussion and Analysis ("MD&A") of Canadian Apartment Properties Real Estate Investment Trust's ("CAPREIT") results of operations and financial condition for the three and nine months ended September 30, 2021 and 2020 dated November 9, 2021, should be read in conjunction with CAPREIT's unaudited condensed consolidated interim financial statements for the three and nine months ended September 30, 2021 and audited consolidated annual financial statements for the year ended December 31, 2020 contained in CAPREIT's 2020 Annual Report.

FORWARD-LOOKING DISCLAIMER

Certain statements contained, or contained in documents incorporated by reference, in this MD&A constitute forward-looking information within the meaning of securities laws. Forward-looking information may relate to CAPREIT's future outlook and anticipated events or results and may include statements regarding the future financial position, business strategy, budgets, litigation, occupancy rates, rental rates, productivity, projected costs, capital investments, development and development opportunities, financial results, taxes, plans and objectives of or involving CAPREIT. Particularly, statements regarding CAPREIT's future results, performance, achievements, prospects, costs, opportunities and financial outlook, including those relating to acquisition and capital investment strategies and the real estate industry generally, are forward-looking statements. In some cases, forward-looking information can be identified by terms such as "may", "will", "should", "expect", "plan", "anticipate", "believe", "intend", "estimate", "predict", "potential", "continue" or the negative thereof, or other similar expressions concerning matters that are not historical facts. Forward-looking statements are based on certain factors and assumptions regarding expected growth, results of operations, performance, and business prospects and opportunities. In addition, certain specific assumptions were made in preparing forward-looking information, including: that the Canadian, Irish, Dutch, German and Belgian economies will generally experience growth, which, however, may be adversely impacted by the global economy and the ongoing health crisis related to the novel coronavirus ("COVID-19") pandemic and its direct or indirect impacts on the business of CAPREIT. These impacts may include the ability to enforce leases, perform capital expenditure work, increase rents and apply for above guideline increases, and obtain mortgage financings; that inflation will remain low; that interest rates will remain low in the medium term; that Canada Mortgage and Housing Corporation ("CMHC") mortgage insurance will continue to be available and that a sufficient number of lenders will participate in the CMHC-insured mortgage program to ensure competitive rates; that the Canadian capital markets will continue to provide CAPREIT with access to equity and/or debt at reasonable rates; that vacancy rates for CAPREIT properties will be consistent with historical norms; that rental rates on renewals will grow at levels similar to the rate of inflation; that rental rates on turnovers will grow; that the difference between in-place and market-based rents will be reduced upon such turnovers and renewals; that CAPREIT will effectively manage price pressures relating to its energy usage; and, with respect to CAPREIT's financial outlook regarding capital investments, assumptions respecting projected costs of construction and materials, availability of trades, the cost and availability of financing, CAPREIT's investment priorities, the properties in which investments will be made, the composition of the property portfolio and the projected return on investment in respect of specific capital investments. Although the forward-looking statements contained in this MD&A are based on assumptions, management believes they are reasonable as of the date hereof; however, there can be no assurance actual results will be consistent with these forward-looking statements, and they may prove to be incorrect. Forward-looking statements necessarily involve known and unknown risks and uncertainties, many of which are beyond CAPREIT's control, that may cause CAPREIT's or the industry's actual results, performance, achievements, prospects and opportunities in future periods to differ materially from those expressed or implied by such forward-looking statements. These risks and uncertainties include, among other things, risks related to: public health crises, disease outbreaks, reporting investment properties at fair value, real property ownership, investment restrictions, operating risk, energy costs, environmental matters, catastrophic events, insurance, capital investments, indebtedness, taxation-related risks, government regulations, controls over financial reporting, other legal and regulatory risks, the nature of units of CAPREIT ("Trust Units"), unitholder liability, liquidity and price fluctuation of Trust Units, dilution, distributions, participation in CAPREIT's distribution reinvestment plan, potential conflicts of interest, dependence on key personnel, general economic conditions, competition for residents, competition for real property investments, risks related to acquisitions, cyber security risk, and foreign operation and currency risks. There can be no assurance that the expectations of CAPREIT's management will prove to be correct. For a detailed discussion of risk factors, refer to CAPREIT's MD&A contained in CAPREIT's 2020 Annual Report in the Risks and Uncertainties section in Section VI of this MD&A. Subject to applicable law, CAPREIT does not undertake any obligation to publicly update or revise any forward-looking information.

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