FORM 20-F/A Brookfield Property Partners L.P. - Brookfield Asset ...

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The details of retail property debt related to our equity accounted investment in GGP at March 31, 2012are as follows:(US$ Millions) Weighted Average Rate Debt Balance (1)Unsecured FacilitiesJunior subordinated notes 2.0% $ 206Secured Property DebtFixed rate 5.5% 16,513Variable rate 3.4% 1,972$18,691Current $ 2,506Non-current 16,185$18,691(1) Represents GGP’s consolidated and proportionate share of unconsolidated U.S. property debt.Operating results – RetailThe following table presents the NOI, FFO, and Total Return of our retail properties by region for thequarters ended March 31, 2012 and 2011:(US$ Millions) United States Australia Brazil Europe Total2012 2011 2012 2011 2012 2011 2012 2011 2012 2011NOI (1) $ - $ - $ 5 $ 5 $24 $20 $ - $ 1 $ 29 $26Equity accounted investments 51 63 - - 1 - - - 52 63Investment and other income - 2 - - 4 1 - - 4 351 65 5 5 29 21 - 1 85 92Interest expense - - 3 7 29 36 - - 32 43Other operating costs - - - - - - - - - -Non-controlling interests 2 9 - - 1 (10) - - 3 (1)FFO (1) $ 49 $56 $ 2 $ (2) $ (1) $ (5) $ - $ 1 $ 50 $50Fair value changes 290 (1) (1) 20 6 (1) - (2) 295 16Realized gains (losses) - - - - 4 - - (2) 4 (2)Non-controlling interests (26) 2 - - (3) 2 - - (29) 4Total valuation gains (losses) 264 1 (1) 20 7 1 - (4) 270 18Total Return (1) $ 313 $57 $ 1 $18 $ 6 $ (4) $ - $ (3) $ 320 $68(1) Refer to tables under “—Reconciliation of Performance Measures to IFRS Measures” below in this MD&A for explanation ofcomponents of NOI, FFO, Total Return, and for a reconciliation to IFRS measures.NOI for the three months ended March 31, 2012 compared with three months ended March 31, 2011increased by $3 million to $29 million, primarily due to an 11% increase in tenant sales in Brazil.FFO for the three months ended March 31, 2012 remained flat when compared with the three monthsended March 31, 2011. The decrease in the United States is due to the inclusion of a portion of GGP’s 2010results in the first quarter of 2011 due to a catch up following the recapitalization in November 2010. This wasoffset by a reduction of interest expense in Australia and Brazil due the refinancing of debt.Total Return for the three months ended March 31, 2012 increased by $252 million to $320 million from$68 million. The increase is primarily a result of changes in the fair value of our investment in GGP.78
The key valuation metrics of our retail properties, including those within our equity accountedinvestments, are presented in the following table. The valuations are most sensitive to changes in the discountrate and timing or variability of cash flows. Discount and capitalization rates have declined meaningfully in all ofour principal regions, giving rise to appraisal gains.United States (1) Australia BrazilDec. 31, Mar. 31, Dec. 31, Mar. 31,2011 2012 2011 2012Mar. 31,2012Dec. 31,2011Discount rate 5.8% 6.0% 9.7% 9.8% 9.5% 9.6%Terminal cap rate n/a n/a 8.7% 8.9% 7.3% 7.3%Investment horizon (years) n/a n/a 10 10 10 10(1) The valuation method used by United States is the direct capitalization method. The amounts presented as the discount rate relate tothe implied capitalization rate. The terminal capitalization rate and investment horizon are not applicable.The following table presents key metrics relating to in-place leases of our retail property portfolio:Occupancy(%)Avg. LeaseTerm (Years)Mar. 31, 2012 Dec. 31, 2011Avg. “In Place” Market Occupancy Avg. LeaseRent Rent (%) Term (Years)Avg. “In Place”RentUnited States (1) 92.2% 5.6 $56.67 $57.46 93.2% 5.1 $56.05 $55.87Australia 98.7% 7.2 12.15 12.49 98.0% 7.4 10.14 10.86Brazil 96.9% 6.8 53.25 53.40 94.7% 6.8 52.50 51.15Average 92.7% 5.7 $54.81 $55.65 93.4% 5.3 $54.08 $53.88(1) Represents regional malls only and excludes leases on traditional anchor stores and specialty leasing license agreements.Our retail portfolio occupancy rate as at March 31, 2012 was 92.7%, down from 93.4% at December 31,2011. The decrease was primarily a result of tenants vacating after the holiday season.We use in-place rents for our retail segment as a measure of leasing performance, which is calculated on acash basis and consists of base minimum rent, plus reimbursements of common area costs, and real estate taxes.(US $)The following table summarizes our leasing activity in the first quarter of 2012:Dec. 31, 2011 Mar. 31, 2012Year One Average Acq.Total ExpiringLeasing Leasing (Disp.) LeasableLeased (1) Expiries Rent Leasing Rent Rent Additions Area(000’s (000’s ($ per (000’s ($ per ($ per (000’s (000’sSq.Ft.) Sq. Ft.) Sq.Ft.) Sq. Ft.) Sq.Ft.) Sq.Ft.) Sq. Ft.) Sq. Ft.)LeasableArea (1)(000’sSq.Ft.)MarketRentLeased(000’sSq. Ft.)United States 66,369 62,158 (5,579) $56.68 4,972 $54.86 $59.99 578 66,947 62,129Australia 2,744 2,689 - - - - - (80) 2,664 2,628Brazil 3,069 2,905 (22) 45.95 101 29.23 30.41 (283) 2,786 2,701Total 72,182 67,752 (5,601) $56.64 5,073 $54.35 $59.40 215 72,397 67,458(1) Has been restated to reflect the impact of remeasurements which are done annually in the first quarter.The average initial rent on leases signed in 2012 was $59.40 per square foot, up 4.9% or $2.76 per squarefoot as compared to the expiring rent on comparable leases.In addition, we incurred tenant allowances for our operating properties of $24 million for the threemonths ended March 31, 2012 and $27 million during the same period in 2011.79
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UNITED STATESSECURITIES AND EXCHANG
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TABLE OF CONTENTSINTRODUCTION AND U
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INTRODUCTION AND USE OF CERTAIN TER
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Historical Performance and Market D
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• the departure of some or all of
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(US$ Millions) Mar. 31, 2012 Dec. 3
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Our company is not, and does not in
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Additionally, as part of our strate
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Our inability to enter into renewal
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The computation of cost reimburseme
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management agreement in limited cir
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• differences in cultures;• cha
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• the same professionals within B
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to the agreement. In addition, beca
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our company. In particular, our uni
Page 31 and 32: fractional units, without reduction
Page 33 and 34: federal income tax purposes, direct
Page 35 and 36: Under legislation recently enacted
Page 37 and 38: the Property Partnership, income fo
Page 39 and 40: “taxable Canadian property”. Un
Page 41 and 42: THE SPIN-OFFBackground to and Purpo
Page 43 and 44: Transaction AgreementsOur company a
Page 45 and 46: • recognize that superior returns
Page 47 and 48: • Trizec Western Canada - 3.5 mil
Page 49 and 50: As at the dates set out below, we h
Page 51 and 52: Office Property Portfolio (1) Asset
Page 53 and 54: Our strategy is to sign long-term l
Page 55 and 56: Our portfolio also includes, as at
Page 57 and 58: The following table presents the le
Page 59 and 60: properties that we believe have sig
Page 61 and 62: domestic economy and overall low un
Page 63 and 64: Environmental ProtectionWe are comm
Page 65 and 66: consideration for causing the Prope
Page 67 and 68: Operating EntitiesOur business is o
Page 69 and 70: Multi-Family and Industrial Platfor
Page 71 and 72: NOI is used as a key indicator of p
Page 73 and 74: Opportunistic Investmentsopportunit
Page 75 and 76: First Quarter Performance Highlight
Page 77 and 78: development sites, we will proceed
Page 79 and 80: The decrease in equity accounted in
Page 81: RetailIFRS Value - RetailThe follow
Page 85 and 86: FFO for the three months ended Marc
Page 87 and 88: Financial Highlights and Performanc
Page 89 and 90: Equity accounted investments as at
Page 91 and 92: Operating results - OfficeThe follo
Page 93 and 94: The results of operations are prima
Page 95 and 96: etter than expected leasing market
Page 97 and 98: interests, of $681 million. Discoun
Page 99 and 100: NOI increased over the periods due
Page 101 and 102: The key valuation metrics of these
Page 103 and 104: increase in interest rates on inter
Page 105 and 106: more stringent environmental laws a
Page 107 and 108: Other DerivativesThe following othe
Page 109 and 110: TRZ Holdings; in the event the JV P
Page 111 and 112: available- for-sale. Estimation of
Page 113 and 114: The components of NOI for the three
Page 115 and 116: The following table presents a reco
Page 117 and 118: • fund those capital expenditures
Page 119 and 120: Given the small amount of new offic
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Page 123 and 124: nominating and governance committee
Page 125 and 126: investments and activities or in re
Page 127 and 128: 7.B. RELATED PARTY TRANSACTIONSRELA
Page 129 and 130: Other ServicesBrookfield may provid
Page 131 and 132: Partnership. See Item 10.B. “Addi
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connection with a particular transa
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• recommending to the Holding Ent
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• any of the Managers is grossly
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2002 to directors, executives or se
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Nature and PurposeUnder our limited
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Bermuda Limited Partnership Act 188
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In addition, the BPY General Partne
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Withdrawal of the BPY General Partn
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entity or any other holding entity
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• ratified and confirmed all cont
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agreement, a holder of Property Par
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(including, generally, debt owed to
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In addition, pursuant to the Voting
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In addition, the Property GP LP may
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successor general partner will have
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Indemnification; Limitations on Lia
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subject to U.S. federal income taxa
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the Obama administration proposes t
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asis of units owned by you prior to
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consent of the IRS. The Section 754
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Income Exception, we may determine
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generally would constitute debt-fin
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expected income and assets, the BPY
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any particular time (in light of po
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(c)(d)the amount and description of
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Taxation of Canadian Resident Limit
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Canadian Limited Partner and will b
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CFA in respect of which the FAPI wa
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(under Tax Proposals released on Au
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our actual results of operations an
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10.G. STATEMENT BY EXPERTSThe follo
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PART IIITEM 13.DEFAULTS, DIVIDEND A
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SIGNATURESThe registrant hereby cer
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COMMERCIAL PROPERTY OPERATIONS OF B
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Commercial Property Operations of B
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The financial statements are prepar
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liabilities are provided for using
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In a net investment hedging relatio
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provided in connection with a lease
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over from IAS 39 the requirements f
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Values are most sensitive to change
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NOTE 7: EQUITY ACCOUNTED INVESTMENT
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Included in other non-current asset
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NOTE 13: CAPITAL SECURITIESCapital
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The major components of income tax
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(b) Property net operating incomeNe
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NOTE 22: CAPITAL MANAGEMENT AND LIQ
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Other derivativesThe following othe
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The following table outlines financ
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NOTE 24: RELATED PARTIESIn the norm
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(US$ Millions) Revenue Net operatin
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Schedule III -Supplemental Schedule
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(b) Adoption of Accounting Standard
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distributed by GGP. The Business su
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NOTE 10: OTHER NON-CURRENT LIABILIT
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(b) Property net operating incomePr
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NOTE 19: RELATED PARTIESIn the norm
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The following summary presents fina
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Report of Independent Registered Ch
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BROOKFIELD PROPERTY PARTNERS L.P.NO
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Report of Independent Registered Ch
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BROOKFIELD PROPERTY PARTNERS LIMITE
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TRZ HOLDINGS LLC AND SUBSIDIARIESCo
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Independent Auditor’s ReportTo th
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TRZ HOLDINGS LLC AND SUBSIDIARIESCO
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TRZ HOLDINGS LLC AND SUBSIDIARIESCO
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TRZ HOLDINGS LLC AND SUBSIDIARIESNO
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the associated lease and any contra
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Accounting for Uncertain Tax Positi
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3. REAL ESTATEThe Company’s inves
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Statement of Operations Information
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Future amortization of these intang
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Collateralized Property Loans — P
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Subsequent to April 9, 2009, in con
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INDEX TO UNAUDITED PRO FORMA FINANC
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BROOKFIELD PROPERTY PARTNERS L.P.Un
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BROOKFIELD PROPERTY PARTNERS L.P.Un
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The company and Brookfield intend f
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The unaudited pro forma balance she
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(g) Exclusion of Brookfield’s 2%
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REF58435NAME OF PARTNERSHIP:CERTIFI
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DECLARATIONMade pursuant to The Exe
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REF58435BERMUDALimited Partnership
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Registration No. 46137BERMUDACERTIF
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Dated the 8thday of March 2012.THE
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THIS LIMITED PARTNERSHIP AGREEMENT
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11. TERM: DISSOLUTION: CONTINUATION
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15.2 any certificates or other inst
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Exhibit 4.1MASTER PURCHASE AGREEMEN
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2. Covenants to Complete the Reorga
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4.5 Brookfield and BPY will also, d
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IN WITNESS WHEREOF the parties here
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The Australian Operations are compr
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TABLE OF CONTENTSARTICLE 1INTERPRET
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MASTER SERVICES AGREEMENTTHIS AGREE
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1.1.15 “Equity Enhancement Distri
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1.1.35 “Permit” means any conse
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1.3.5 any reference to this Agreeme
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2.3 Other ManagersThe Managers may,
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3.2.2 For greater certainty and not
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ARTICLE 6INFORMATION AND RECORDS6.1
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Recipients elect to pay all or a po
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ARTICLE 8BROOKFIELD’S OBLIGATIONB
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and against any claims, liabilities
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11.2.1.2 any of the Managers engage
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11.6 Release of Money or other Prop
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12.4.2 if to the Property Partnersh
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IN WITNESS WHEREOF the parties have
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BROOKFIELD DEVELOPMENTS EUROPELTD.B
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BROOKFIELD BPY PROPERTY HOLDINGS II
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6. Governing Law. This Joinder will
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Exhibit 4.4BROOKFIELD ASSET MANAGEM
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BETWEEN:RECITALS:RELATIONSHIP AGREE
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over a majority of the voting inter
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1.3.4 except as otherwise provided
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partners or financial sponsors and
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2.7 ReportingSubject to confidentia
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3.3.4 the execution and delivery of
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ARTICLE 6GENERAL PROVISIONS6.1 Limi
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6.7 Other Holding EntitiesThe parti
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Schedule AIN WITNESS WHEREOF the Ma
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Schedule BIN WITNESS WHEREOF the Ho
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Exhibit 4.5BROOKFIELD ASSET MANAGEM
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THIS AGREEMENT made as of the day
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1.1.17 “FINRA” means Financial
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1.1.39 “U.S. Exchange Act” mean
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Agreement will not operate as a wai
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2.1.5 Priority on Demand Registrati
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(b)follows: (i) first, the securiti
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2.5 Registration ProceduresWhenever
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(g)(h)(i)(j)(k)as practicable there
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(o)(p)(q)(r)(s)(t)(u)cause the Regi
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contained in any Registration State
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fault of the indemnifying party and
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have been delivered by BPY and subs
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TABLE OF CONTENTSARTICLE 1INTERPRET
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ARTICLE 1INTERPRETATION1.1 Definiti
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1.3.6 in the event that any day on
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2.1.3.3 any plan or proposal for a
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3.2.4 the execution and delivery of
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5.5 NoticesAny notice or other comm
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