Message to our shareholders Neighbourhood and community shopping centres, properly managed, are one of the most stable real estate asset classes in North America as they provide consumers with their everyday basic needs such as groceries, prescription drugs, personal care items, household supplies, banking and other personal services. To capitalize on the opportunities this sector presents, First Capital Realty has been applying a highly focused growth strategy through proactive management and leasing, accretive acquisitions and selective development activities, all supported by a strong financial position. With a very successful year in 2003 behind us, I would like to take this opportunity to review our progress since we assumed management of the Company in August 2000. After three years of hard work, I am pleased to report that we have met all of our long- term objectives – we grew our business and funds from operations, and significantly increased our equity base and the public float of our common shares, accomplishments that resulted in a much stronger balance sheet today. Looking ahead, we are confident we can continue to expand and take these objectives even further. Let me put our progress into some perspective. At December 31, 2000, First Capital Realty, with all convertible debentures classified as debt, had a debt to market capitalization ratio that we believe was too leveraged at 88%. As a result of our strong operating performance and a series of capital market initiatives over the last three years, this leverage ratio was considerably reduced to 66% as at December 31, 2003. Our financial position was further strengthened with the closing of a successful $55 million common share offering in March 2004.  Since January 2001, we invested over $800 million in acquisitions and development, adding over six million square feet of gross leasable area to our Canadian portfolio through the investment in more than 50 properties in our core urban markets.  This significant growth took place while maintaining our key objective of buying well- located properties and maintaining and enhancing the quality and value of our portfolio. Dori J. Segal President and  Chief Executive Officer Our approach Quality assets Entrepreneurial management Good governance First Capital Realty invests in well- located shopping centres in growing urban markets that provide sustainable cash flow and long-term growth potential that will ultimately result in capital appreciation. First Capital Realty is managed  by experienced, entrepreneurial real estate professionals who have a significant interest in creating long-term value for all shareholders. First Capital Realty is committed to plain and full disclosure, transparency and a majority, independent Board. Building New Foundations