DUNDEE INTERNATIONAL REIT

DUNDEE INTERNATIONAL 2011 Third Quarter Report
OUR RESOURCES AND FINANCIAL CONDITION
Investment properties
The fair value of our investment property portfolio at September 30, 2011, was $1,011 million, representing a
weighted average capitalization rate (“Cap Rate”) of 8.3%.
Fair values were determined using the discounted cash flow method. The discounted cash flow method
discounts the expected future cash flows, generally over a term of ten years, and using discount rates and
terminal capitalization rates specific to each property.
Building improvements
Building improvements represent investments made in our rental properties to ensure our buildings are
operating at an optimal level. We currently have several improvement projects in the planning stages and did
not incur any costs during the quarter.
Initial direct leasing costs and lease incentives
Initial direct leasing costs include leasing fees and related costs, and broker commissions incurred in negotiating
and arranging tenant leases. Lease incentives include costs incurred to make leasehold improvements to tenant
spaces and cash allowances. Initial direct leasing costs and lease incentives are dependent on asset type, lease
terminations and expiries, the mix of new leasing activity compared to renewals, portfolio growth and general
market conditions. Short-term leases generally have lower costs than long-term leases.
For the period from August 3, 2011 to September 30, 2011, we leased or renewed approximately 99,000 square
feet of space for which we incurred $929 of leasing costs.
Commitments and contingencies
We are contingently liable with respect to litigation and claims that may arise from time to time. In the opinion
of management, any liability that may arise from such contingencies would not have a material adverse effect
on our consolidated financial statements.
Dundee International REIT’s future minimum commitments under operating and finance leases, including equity
accounted investments, are as follows:
September 30, 2011
Operating lease payments
Less than 1 year $ 142
1–5 years —
Longer than 5 years —
Total $ 142
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