Management’s Discussion and Analysis Continued Geographic Expansion in Ontario Reduced Cap‑Rate Compression in 2013 Dividend Increase Performance Compared to 2013 Key Objectives Consolidation of Multi‑family Residential Real Estate Market Increase Investment in New Properties 26  Killam ProPerties inc | 2013 Dollar amounts are in thousands of Canadian dollars (except as noted) Killam acquired two buildings in Ontario during 2013 including a 102‑unit building located in Ottawa for $10.4 million as well as a newly  constructed, 8‑storey, mixed‑use complex containing 21,242 square feet of street level retail (TD Bank, Shoppers Drug Mart and Tim Hortons) and  179 apartment units in downtown Toronto for $40.0 million. With the completion of these two acquisitions, Killam’s future NOI generated from  its Ontario properties is expected to increase to 15.0% from 7.5%.  During 2013 Killam recorded $13.1 million in fair value gains related to its portfolio compared to $37.7 million in 2012. This decrease  year‑over‑year was driven by a combination of reduced cap‑rate compression in 2013 and a slight uptick in cap‑rates of 25 bps in the Saint John  market in the fourth quarter of 2013. The net gain in real estate valuations does not impact the Company’s FFO per share, its key measure of  performance. on December 23, 2013, Killam announced an increase in its annual dividend by 3.4% to $0.60 per share from $0.58 per share. the increase  reflects Management’s expectation of earning’s growth to be generated in 2014. 2013 target Complete approximately $75‑$125 million in acquisitions. 2013 Performance Killam completed $121.1 million in acquisitions in 2013 which includes $112.8 million in apartment  acquisitions, $1.4 million for 65 MHC sites and $6.9 million in vacant land for future developments. 2013 target Focus on newer properties as part of the acquisition program in 2013. Complete and lease‑up Killam’s four  developments, and commence two new development projects.  2013 Performance During 2013 Killam acquired 552 units which were constructed after 2001, representing 74% of the total  units added to the portfolio during the year. The acquisitions included three buildings constructed in 2013,  an 83‑unit luxury building in Halifax, a 48‑unit building in Moncton, and a 179‑unit building on Queen Street  West in toronto.  The Company also completed the construction of four development projects totaling 282 units during  the first half of the year. These buildings were all ready for occupancy by the beginning of May 2013 with  lease‑up periods varying by project. Bennett House and Brighton House were fully leased within three  months of opening while the S2 and The Plaza are currently 62% and 61% leased. Both properties are  expected to be substantially leased by mid‑2014.  Killam commenced two new development projects during the year. Development started on a 101‑unit  project in St. John’s in Q3‑2013 and a 122‑unit project in Cambridge broke ground in December 2013. Please  refer to the Investment Properties Under Construction section of the MD&A on page 49 for further details on  these projects.