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La Défense, Paris

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ACTIVITY REPORTAND SOCIAL RESPONSIBILITY REPORTAND SOCIAL RESPONSIBILITY REPORT

ACTIVITY REPORTAND SOCIAL RESPONSIBILITY REPORT

ACTIVITY REPORTACTIVITY REPORTAND SOCIAL RESPONSIBILITY REPORT

ACTIVITY REPORT2010

AND SOCIAL RESPONSIBILITY REPORT2010

AND SOCIAL RESPONSIBILITY REPORT

SITQ.COM

HEAD OFFICECENTRE CDP CAPITAL 1001 Square-Victoria Street Montréal, Québec H2Z 2B1 514 287-1852 1 888 599-IMMO

EUROPESITQ SAS 30, avenue George V 75008 Paris, France (33) 1 56 69 25 30

SITQ PATRIMONIAL S.A. 125, avenue Louise Bruxelles, Belgique 1050 (32) 2 644-4165

EUROSITQ FINANCES S.A. 25A, boulevard Royal L-2449 Luxembourg Luxembourg (352) 27 62 06 93 41

CANADIAN OFFICES 4, Place Ville Marie

Suite 600 Montréal, Québec H3B 2E7 514 861-9393

1175-324 8th Avenue SW Calgary, Alberta T2P 2Z2 403 539-2229

ASIASITQ INDIA PRIVATE LIMITED D18, First Floor Defence Colony New Delhi 110 024 India (91) 11 4602 7344

SITQ MAURITIUS ADVISORYSERVICES IFS Court 28, Cybercity Ebene, Mauritius (230) 467 3000

Published by Communications, Public Affairs and MarketingSenior Vice Presidence – Human Resources and Shared Services

Writers: Sarah Marchand and Gary Lawrence

English translation: Shonda Secord

Graphic design and production: LXB Communication Marketing

Printing: L’Empreinte

© Copyright SITQ, 2011.

ISSN 1492-3041 (Activity report and Social responsibility report)

This document is also available online at sitq.com.

To obtain additional copies or share your comments regarding this document, please contact us at [email protected].

Le document est aussi disponible en français.

TABLE OF CONTENTSMessage from the President & CEO and Chairman of the Board /02

Financial profi le /06Offi ce /08Hotels, apartments and retirement housing /18Real estate investment funds /26Social responsibility report /30Economy and governance /32Employees /36Environment /40Community and knowledge /46Tenants /50Awards and certifi cations /54 Report context and parameters /58 Board of Directors and management team /60

PROFILESince 1984, SITQ has upheld a tradition of excellence that has made it a leader in the North American and Western European real estate industries. Founded by the Caisse de dépôt et placement du Québec with $9 million in invested capital, SITQ today holds a $17.6-billion portfolio. Assets include prestigious offi ce properties, business parks, hotels, apartment buildings and retirement residences in major cities in Canada, the United States, France, the United Kingdom and Germany, as well as interests in several real estate funds that invest in various markets around the world.

Backed by its expert team of 432 employees, the Company owes its success to its solid investment and asset management know-how, its proven insight into the real estate development sector and the rigour and quality of its property management.

SITQ’s Offi ce Division draws strength and stability from its shareholders, namely, the Caisse de dépôt et placement du Québec (which owns a 90.6% interest), the Desjardins Group Pension Plan, Alcan (Canada) Master Trust, the Association de bienfaisance et de retraite des policiers et policières de la Ville de Montréal, the Fonds commun de placement des régimes de retraite de l’Université Laval, the Régime de retraite de la Société de transport (1992) and the Régime de retraite de la Société de transport de Montréal (Syndicat de transport de Montréal-CSN). The Hotels, Apartments and Retirement Housing Division and the Real Estate Investment Funds Division are wholly owned by the Caisse.

SITQ has its head offi ce at the Centre CDP Capital in Montréal and two business offi ces in Calgary and Paris. It enjoys a Canada-wide presence through its interest in Bentall Kennedy. SITQ also has offi ces in Québec City (Canada), Brussels (Belgium), Luxembourg, New Delhi (India) and Ebene (Mauritius).

Eighth Avenue Place, Calgary

1 2

3 4

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EXECUTIVE OFFICERS1. William R.C. TreshamPresident and Chief Executive Offi cer

2. Adam AdamakakisExecutive Vice President, Eastern Region, Canada/U.S

3. Méka BrunelExecutive Vice President, Europe

4. Michel CyrSenior Vice President, Development

5. Denis EpohSenior Vice President, Investments

6. Rita-Rose GagnéSenior Vice President and General Counsel

7. Pierre LefebvreSenior Vice President, Human Resources and Shared Services

8. Marc LemaireSenior Vice President, Real Estate Investment Funds and Financing

9. Arthur LloydExecutive Vice President, Western Region, Canada/U.S.

10. Louiselle PaquinChief Financial Offi cer

11. Tony RoyVice President, Portfolio Management

8

9 10 11

BOARD OF DIRECTORS AND MANAGEMENT TEAM

/61SITQ / ACTIVITY REPORT ANDSOCIAL RESPONSIBILITY REPORT 2010

Disposals

FINANCIALHIGHLIGHTS

FINANCIALHIGHLIGHTS

FINANCIAL

VA

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ESEFFICIENCY

INNOVATION

INTEGRITY

QUALITY OF SERVICE

SOCIAL RESPONSIBILITY

TEAMWORK

VISION

20102009201020092010

MISSIONSITQ’s main focus is to meet the expectations of:

• shareholders, by offering them an organization, resources and products of top quality designed for developing and managing real estate vehicles that are competitive, diversifi ed and profi table

• tenants and occupants of its properties, by offering them workplaces that are conducive to the growth of their business and choice living and lodging environments

• employees, by providing them with a stimulating, healthy work environment and rewarding professional challenges.

OFFICE/ IN MILLIONS OF DOLLARS /

262248

Cash � ow from operations

1059

Acquisitions

367189

213207

Capital investment in the portfolio and development

5.1%5.1%

Current rate of return

-13.2%14.1%

Overall yield

11,27211,861

Total assets (fair market value)

HOTELS, APARTMENTS, RETIREMENT HOUSING/REAL ESTATE INVESTMENT FUNDS/ IN MILLIONS OF DOLLARS /

-17

Cash � ow from operations

9,97711,099

Total assets (fair market value)

313936

Acquisitions

2471,317

Disposals

13770

Capital investment in the portfolio and development

0.0 %0.2%Current rate of return

-13.0%2.3 %

Overall yield


MESSAGE FROM

CHAIRMAN OF THE BOARD

Like last year, 2010 was a time of transition for SITQ. We concentrated on strategy-building, an approach that has already delivered results. Accordingly, we stepped up our efforts to decentralize our corporate structure and leveraged the expertise of our people to create independently operating regional teams. In addition to the European team overseen by Méka Brunel that was set up in Paris a few years ago, SITQ now has two new groups in place: one covering the Western Canada/U.S. market, led by Arthur Lloyd and based in Calgary, and one for the Eastern Canada/U.S. market, under the direction of Adam Adamakakis, who works out of our Montréal offi ce. Under this new structure, the three teams are each responsible for investment, asset management, leasing and operations within their respective regions. Their efforts are supported by our experts at the SITQ head offi ce, whose responsibilities also include investment strategy and policy, the monitoring of regional operations and corporate governance, as well as various shared services.

Moreover, we revised our business model in order to resharpen our focus on our core specialties. Our approach will be similar to the one that has proven fruitful in Montréal in recent years: we will strive to optimize our presence in the business districts of some of North America’s and Europe’s biggest cities –Toronto, Calgary, Vancouver, Seattle, New York, Boston, Washington, D.C.,

Paris and London – by acquiring top-quality offi ce buildings through long-term investment deals.

Given the sluggish pace of economic recovery, we remained very strict in the application of our strategy in 2010, guided by two watchwords: patience and prudence. We therefore minimized our investments in real estate development, maximized our operating revenue by fi nding tenants for vacant space and renewing existing leases and tapped into new sources of liquidity through several timely dispositions and benefi cial fi nancing arrangements. We also succeeded in lowering the Company’s debt ratio by a signifi cant margin.

This approach, combined with reduced capitalization rates that buoyed property values within our portfolios, enabled us to post an overall return of 14.1% in the Offi ce sector in 2010 and 2.3% in the Hotels, Apartments and Retirement Housing/Investment Funds sector. Therefore, despite the recent recession, SITQ has continued to generate excellent medium- and long-term returns for its shareholders, to the tune of 7.1% over a 5-year horizon and 10.3% over a 10-year horizon for the Offi ce portfolio, and -3.4% over 5 years and 11.8% over 10 years for the Hotels, Apartments and Retirement Housing/Investment Funds porfolio.

STRATEGIZING, REGIONALIZING AND CAPITALIZING ON OUR GREATEST STRENGTH:

OUR PEOPLE

WILLIAM R.C. TRESHAM

President & CEO

DANIEL FOURNIER Chairman of the Board

SITQ / ACTIVITY REPORT ANDSOCIAL RESPONSIBILITY REPORT 201002/

THE PRESIDENT & CEO ANDMESSAGE FROMTHE PRESIDENT & CEO ANDMESSAGE FROM

CHAIRMAN OF THE BOARDTHE PRESIDENT & CEO AND

CHAIRMAN OF THE BOARD

SYSTEMATIC, DISCIPLINED APPLICATION OF STRATEGIES

With the increased property values that were reported in many of our real estate markets – the offi ce and hotel sectors in particular, we took advantage of several interesting opportunities to sell assets that had achieved their full potential or that no longer met our investment criteria. We nevertheless limited our disposition activity, as we believe that values will continue to trend upward in 2011.

Our Offi ce teams leased out a total of 4.2 million square feet during the year (including 0.8 million square feet for the Eighth Avenue Place development project), oftentimes in diffi cult markets. Special acknowledgement goes out to those involved in leasing the fi rst tower of Eighth Avenue Place, the construction of which recently wrapped up in downtown Calgary.

Our social responsibility report also took on an important new dimension this year, as we decided to align our reporting standards with those of the world-renowned Global Reporting Initiative. As a result, for the fi rst time, this report features a comprehensive view of the environmental performance of our portfolio in Canada, the U.S. and Europe, along with fi gures on greenhouse gas emissions. This step forward will enable us to track the progress of our sustainable development programs, set measurable goals for reducing the environmental impact of our operations as part of our new sustainability policy and be better poised to address the needs of our clients, tenants, partners and other stakeholders.

In 2010, our environmental and sustainable development priorities continued to resonate through every aspect of our real estate management and development activities. During the year, in addition to having four LEED-certifi ed properties in our portfolio, our Eighth Avenue Place project became the fi rst Canadian building to be pre-certifi ed LEED Platinum. We also threw our support behind a major sustainability award aimed at France’s real estate sector. These initiatives clearly attest to our commitment to playing on ongoing leadership role in our industry in matters of sustainable development.

FORWARD-LOOKING LEADERSHIP AND INNOVATIVE

SUSTAINABILITY INITIATIVES


MESSAGE FROM THE PRESIDENT & CEO AND CHAIRMAN OF THE BOARD

ONGOING REPOSITIONING EFFORTS IN 2011As a result of the rigorous application of our investment strategy, a few well-timed sales and refi nancing deals and our lower debt ratio, SITQ is in an excellent position to face the future. We have suffi cient cash reserves at our disposal to take advantage of promising business opportunities as they arise in markets where we hope to expand our presence.

In the year ahead, however, we feel that acquisition opportunities will be few and far between, although somewhat less scarce than they have been in the past two years. We are nevertheless ready to act on the ones that are consistent with our investment criteria and business goals. We also plan to sell select non-strategic assets, especially in the hotel sector, as well as a few offi ce buildings in markets where our presence is minimal. Lastly, we anticipate reducing our holdings in certain real estate funds.


William R.C. TreshamPRESIDENT AND CHIEF EXECUTIVE OFFICER

Daniel FournierCHAIRMAN OF THE BOARD

04/

ONE OF THE BEST TEAMS

IN THE BUSINESS Without a doubt, SITQ’s biggest strength lies in the calibre of our people. We are extremely fortunate to have such highly qualifi ed professionals in our corner. Their knowledge and know-how are matched only by their drive and determination, even when times get tough. Without their remarkable dedication, we would never be able to meet our objectives. In 2010, not only did we achieve what we set out to achieve, we did so under rather challenging market conditions. We are therefore tremendously grateful to all of our teams at SITQ for their outstanding work.

We extend our deepest appreciation to our shareholders for their ongoing trust, as well as the members of the Board of Directors for their support, which is so crucial to our success. During the year, the Board bid adieu to outgoing chairman René Tremblay and directors Ghislain Parent and Louis Monette and welcomed its newest member, Mario D. Morroni. We would also like to thank Fernand Perreault, who agreed to share his invaluable expertise with us in the months after he left the Board. Finally, we acknowledge the many contributions over the years of Paul Campbell, who stepped down as President and CEO of SITQ in 2010.

SITQ / ACTIVITY REPORT ANDSOCIAL RESPONSIBILITY REPORT 2010


/05

Centre CDP Capital, Montréal


FINANCIALPROFILEFINANCIALPROFILEFINANCIAL

Market valueAs at December 31 2010 2009 2008 2007 2006 Total assets 11,272 11,861 15,328 13,604 10,603

Real estate assets 9,462 9,425 11,865 11,937 9,599

Real estate investment funds 326 252 327 431 660

Long-term debt 5,193 6,230 7,454 5,612 4,549

Shareholders’ equity in the Company 5,587 4,897 5,640 6,633 4,970

Immobilizations

Acquisitions 59 10 244 1,615 3,356

Disposals 189 367 1,197 878 1,281

Capital investment in the portfolio and development 207 213 305 891 234

YieldsCurrent rate of return (cash fl ow from operations on shareholders’ equity at market value)*

5.1% 5.1% 4.2% 5.0% 6.2%

Overall yield (current rate of return plus capital appreciation yield)* 14.1% -13.2% -15.0% 25.5% 33.4%

Fiscal yearAs at December 31 2010 2009 2008 2007 2006Real estate income 980 1,052 1,039 1,075 893Cash fl ow from operations (before taxes and interest) 516 560 537 502 403

Cash fl ow from operations (after taxes and interest) 248 262 283 269 233

PORTFOLIO BREAKDOWN BY REGION

Québec

Rest of Canada

United States

Europe

2010 (Dec. 31)

06/

*After taxes and interest.

OVE

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5.8

8.6

2010 2009 2008 2007 2006

6.6

8.1

6.6

OFFICE

(in m

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14%

19%33%

34%


HOTELS, APARTMENTS, RETIREMENT HOUSING AND REAL ESTATE INVESTMENT FUNDS

FINANCIAL PROFILE

Market valueAs at December 31 2010 2009 2008 2007 2006 2005Total assets 9,977 11,099 10,868 10,239 6,741 4,794

Real estate assets 4,254 4,675 5,790 5,298 2,652 1,346

Real estate investment funds , shares and fi nancing

3,572 3,477 4,282 3,587 3,222 2,544

Long-term debt 4,784 5,938 5,727 3,725 2,017 1,383

Shareholders’ equity in the Company 4,735 4,630 3,931 5,307 3,929 2,874

Immobilizations

Acquisitions/contributions 936 313 2,316 4,196 1,948 2,189

Disposals/distributions 1,317 247 758 1,361 928 2,280

Capital investment in the portfolio and development 70 137 286 102 90 25

YieldsCurrent rate of return (cash fl ow from operations on shareholders’ equity at market value)*

0.2% 0.0% 1.7% 2.5% 2.9% 1.1 %

Overall yield (current rate of return plus capital appreciation yield)* 2.3% -13.0% -35.3% 14.3% 27.9% 70.2 %

Fiscal yearAs at December 31 2010 2009 2008 2007 2006 2005Real estate income 748 816 1,026 872 569 370Cash fl ow from operations (before taxes and interest) 252 246 352 300300 161 112

Cash fl ow from operations (after taxes and interest) 7 -1 87 103 81 22

(in m

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PORTFOLIO BREAKDOWN BY REGION

Québec

Rest of Canada

United States

Europe

Asia

Emerging countries

2010 (Dec. 31)

/07

*After taxes and interest.

4 %

17 %

41 %

20 %

6 %12 %


08/ SITQ / ACTIVITY REPORT ANDSOCIAL RESPONSIBILITY REPORT 2010

Steeles Technology Campus, Toronto

OFFICE

OUTSTANDINGACHIEVEMENTSACHIEVEMENTSOUTSTANDINGACHIEVEMENTSOUTSTANDING

The recession continued to loom over SITQ’s key offi ce property markets at the beginning of 2010. However, the economy in many countries stabilized as the year progressed, and the fi rst tentative signs of recovery started to emerge in the second half of the year. Given the uncertain economic climate, investment activity was slow, albeit slightly more vigorous than it had been in 2009. By and large, investors trained their focus on high-quality, well-leased assets.

In this context, SITQ’s teams continued to concentrate on asset management and leasing operations. This strategy paid off, in that more than 3.4 million square feet (318,000 square metres) of office space was leased out in 2010 (excluding the Eighth Avenue Place development project), including nearly 1.5 million square feet (141,000 square metres) in new leases. Nevertheless, considering it was a challenging year for many markets, the portfolio-wide vacancy rate rose from 6.6% to 8.1%.

Furthermore, capitalization rates for quality assets eased off in some markets, causing property values in the Offi ce portfolio to trend upward, which in turn had a positive effect on the Company’s overall performance.

OFFICE PORTFOLIO• 121 owned and co-owned properties

• $9.6 billion

• 37.4 million square feet (3.5 million square metres)

• Assets in major cities in Canada, the United States, France, Germany and the United Kingdom

• Main partners: SL Green, Tishman Speyer, TIAA-CREF, VEF, USAA, the Caisse des Dépôts et Consignations, GIC of Singapore, GWL Realty Advisors, AIMCo, bcIMC


1515 Broadway, New York

Eighth Avenue Place, phase 2, Calgary

OFFICE

10/

CANADA:

STEADY LEVEL OF ACTIVITY, ESPECIALLY IN CALGARYIn Canada, the Calgary market was particularly active in 2010. Although the outlook at the beginning of the year was somewhat gloomy, conditions had improved by the spring – after it was announced that oil royalties would be reduced and petroleum prices began to soar. As a result, occupancy rates in downtown Calgary topped the 90% mark. In addition, despite experts’ predictions that the vacancy rate would shoot up to 20% following the delivery of two large-scale projects at the end of 2011, projections for 2012 have been scaled back to the 12% to 14% range.

SITQ teams took advantage of the favourable market conditions to lease out more than 0.8 million square feet (74,000 square metres) of offi ce space in Calgary alone. Several major renewal deals were signed, including one with Canadian Natural Resources at the Home Oil Tower (275,000 square feet – 26,000 square metres) and EnerPlus at the Dome Tower (205,000 square feet – 19,000 square metres).

In addition, 758,000 square feet (70,400 square metres) was leased in the East Tower of Eighth Avenue Place, one of two SITQ development projects in downtown Calgary. This represents 69% of the total leasable area of the 1.1-million-square-foot (120,000 square metres), 49-storey offi ce building. Future occupants include Bonavista Energy Corporation, Direct Energy, Burnett Duckworth & Palmer LLP, Precision Drilling Corporation, PetroBakken Energy, GE Canada and BMO Nesbitt Burns. The project, which was initially pre-certifi ed LEED-CS Gold, was upgraded to Platinum status in 2010. The fi rst tenants moved in in early 2011.

Furthermore, the redevelopment of The CORE Shopping Centre wrapped up at the beginning of 2011. Despite its high degree of complexity, the project was delivered on time and on budget and has proven to be a great success. Several tenants signed on during the year, bringing the occupancy rate to 93% as at December 31, 2010. The CORE boasts an upscale, fashion-oriented retail mix headlined by such big names as Holt Renfrew, Brooks Brothers, Harry Rosen and H&M.

Meanwhile, the market in downtown Toronto was very vigorous during the year. Despite the construction of new properties in recent years, the vacancy rate has not climbed any higher than 6%, in contrast to analysts’ warnings of its skyrocketing to 20%. Outside the city centre, however, the situation was more of a challenge. SITQ teams nevertheless concluded several transactions for York Mills Centre, including the renewal of NewJ Systems’ lease for 70,000 squarefeet (6,500 square metres), up from its previous 26,000 square feet (2,400 square metres). Also at York Mills Centre, Varicent Software Incorporated, which had been subletting 10,000 square feet (930 square metres) from Sunoco, signed a lease directly with SITQ for a total of 25,000 square feet (2,300 square metres).

Lastly, in Montréal, market conditions in the downtown core remained stable throughout the year. SITQ teams closed several leasing transactions, comprising a total of 114,000 square feet (10,600 square metres) in new leases – including those signed by the Ordre des comptables en management accrédités du Québec at the World Trade Centre Montréal and the expansion of the Business Development Bank of Canada offi ces at Place Ville Marie. Renewals during the year accounted for 211,000 square feet (19,600 square metres). Among the key transactions fi nalized in this regard was the early lease renewal and expansion of the premises occupied by Electronic Arts Montréal.


388–390 Greenwich Street, New York

OFFICE

/11

UNITED STATES:

EXCELLENT LEASING VOLUME IN TOUGH MARKETS SITQ’s main markets in the United States are New York City, Washington, D.C., Boston and Seattle. Because economic recovery has been fragile and faltering in most of the country, many businesses have put off their decisions to move or expand and, in some cases, have even opted to downsize their facilities. Washington, D.C., has proven to be the most resilient market in this respect, chiefl y due to growth in the federal government and the formation of new administrative agencies, which have led to job creation and greater demand for offi ce space. SITQ has taken advantage of this trend, adding the new White House service centre to its tenant roster. In total, some 539,000 square feet (50,100 square metres) was leased out by SITQ in this market in 2010.

In Seattle, where the situation continued to be very diffi cult, with a vacancy rate nearing 20%, SITQ renewed leases for two buildings wholly occupied by T-Mobile at the Newport Corporate Center, in the suburbs of the city, for a total of 300,000 square feet (28,000 square metres). The Company also fi nalized the construction of Two Newport, also occupied by T-Mobile.

Lastly, several transactions were concluded in some of the country’s worst-hit secondary markets. In Denver, for example, SITQ signed new leases for 126,000 square feet (11,700 square metres), which included an expansion of the space occupied by the Colorado Department of Public Health and the Environment. In Dallas, leasing teams finalized transactions for 100,000 square feet (9,300 square metres) and, in Tampa, where the recession was especially severe, 57,000 square feet (5,300 square metres) in new leases were signed, representing half of the absorption rate in this market in 2010.


OFFICE

EUROPE:LEASING, REDEVELOPMENT AND REFINANCING For the European markets where SITQ is present – Paris, London, Frankfurt, Düsseldorf and Munich – the year can be divided into two parts. The fi rst part was marked by a sluggish performance, similar to that of 2009. Major property owners and managers therefore turned their attention to asset management. The second half, however, was characterized by a rebound, driven primarily by a succession of corporate mergers and restructuring operations. Leasing volume enjoyed healthy growth during this period, particularly in Paris, where it surpassed 23 million square feet (2.2 million square metres). The situation nevertheless remains volatile, as job creation is still anemic.

During the course of the year, SITQ renegotiated the lease held by Areva, at 33 Lafayette, in Paris’s 9th arrondissement. In addition, the European team initiated a project to redevelop and promote Tour Prisma, in the city’s La Défense district, following the departure of its sole tenant, to which SITQ proposed Tour Diamant in 2009, in order to better accommodate its needs.

Also in Paris, the Company refi nanced 33 Lafayette and 42 de Friedland, as well as Tour Prisma and Tour Pacifi c, for a total of €400 million. This represented the biggest portfolio refi nancing transaction in 2010.


IBC Complex, Frankfurt

CHALLENGES FOR 2011:

LEASING, REPRIORITIZING AND SEEKING OUT BUSINESS OPPORTUNITIES

A number of leasing-related challenges lie in store for SITQ in the year ahead, particularly in Toronto, several U.S. cities, Paris, Frankfurt and Düsseldorf. In addition, the Company will be readjusting its investment portfolio to concentrate on high-quality properties in its key target markets. It will therefore be on the lookout for business opportunities that enable it to sell certain properties to capitalize on their appreciation in value and take advantage of select acquisition opportunities.

From a development perspective, SITQ’s teams will focus on new, prime locations in its target markets where it can build high-quality properties in the coming years. There are four pending projects that are ready to be green-lighted in North America as soon as the circumstances are amenable: 45 Bay Street, in downtown Toronto, for which pre-leasing is slated to begin in 2011; 900 De Maisonneuve Ouest, in the heart of Montréal; Phase III of The Summit, in Seattle; and the second tower of Eighth Avenue Place, in Calgary, the preliminary design and infrastructure of which are already complete.

Finally, SITQ will be looking to step up its involvement in the management and leasing of its third party–managed properties. It hopes to make the most of its expertise in these fi elds to forge closer ties with its tenants and clients in all of its markets, so that it can be more responsive to their needs and better poised to act on business opportunities as they arise.

OFFICE

SITQ’s goal is to readjust its investment portfolio to concentrate on high-quality properties in key target markets.

/13

900 De Maisonneuve Ouest, Montréal


OFFICE

14/

HOW DID YOU GO ABOUT FINDING POTENTIAL TENANTS FOR TOUR PRISMA?

One of the suggested offi ce layouts in the showroom

INTERVIEW

At the end of 2009, SITQ’s asset management teams sold Tour Diamant to the company that had until then been the sole occupant of Tour Prisma. This transaction enabled us to accommodate the needs of this high-profi le tenant while still leaving us enough time to come up with a suitable action plan to redevelop and lease the 260,000-square-foot (24,000 square metre) property, which was slated to be vacated by the end of September 2010.

By early 2010, in conjunction with head offi ce, we had issued a detailed request for proposals and had hired engineers, architects and commercial real estate brokers to consult on the project. With the help of these experts, we developed a plan to strategically position Tour Prisma in the very competitive La Défense market. The idea was to optimize the fi nancial performance of the property while adapting it to the expectations of high-profi le tenants. We analyzed and ran the numbers on a wide range of scenarios, ranging from a basic, no-frills renovation to a full-out reconfi guration. We then assessed each option and went with the one that seemed to be the most realistic given the context and the tight timeframes we had to deal with.

The concrete improvements we decided on – among them a more contemporary décor, upgraded amenities, enhanced environmental performance and more energy- and water-effi cient systems – will make the property more competitive in its market.

INTERVIEW

ARNAUD MALBOSVice President,

Investments, Europe

SITQ’s leasing teams are widely known and respected not only

for their expertise but also for their drive and determination

and the creative solutions they use to fi nd the right tenants

for large blocks of space. They develop detailed plans and

high-impact marketing and promotional strategies to connect

with organizations that promise to be a good fi t for their

properties. This often requires outside-the-box thinking, as

was the case with Tour Prisma in the La Défense district of

Paris, in 2010. Arnaud Malbos, Vice President, Investments,

Europe, describes the initiative spearheaded by the European

team and carried out in association with several of their head

offi ce colleagues.


OFFICE

/15

Working with our Communications, Public Affairs and Marketing Department at head offi ce, we came up with a comprehensive marketing strategy to promote Tour Prisma, complete with a logo, a brand image and a wide range of marketing tools, which include a brochure, PowerPoint presentation and website (www.tourprisma.com).

We also built a spacious on-site showroom to highlight the many possibilities in terms of layout – from open-concept to cubicle-based – and provide information on the building particulars. The showroom also features various drawings and renderings to illustrate what the fi nal product could look like, with special emphasis on elements like the lobby and service establishments.

Basically, everything has been developed to make a distinct and immediate impression on visitors, even if they only spend a few minutes in the showroom. Our goal is to guide them with respect to the overall look and feel of the premises, while still making it clear that the project is extremely fl exible and customizable to their specifi c needs.

WHAT TOOLS DID YOU USE TO MARKET THE PROPERTY?

Ideally, we would like to lease Tour Prisma out to a single organization, although we would also be open to having one major tenant with a few complementary occupants.

In terms of reaching out to potential tenants, we’ve asked our brokers to get the word out about the property, and they’ve put out feelers within their client networks. We are also holding on-site events to attract corporate contacts, like the luncheon we had for 25 people in our showroom during the most recent SIMI commercial real estate show in Paris. Once our redevelopment work is completed, we will be holding a reception for a hundred or so key real estate decision-makers and other infl uential members of the business community.

At the end of the day, we want to connect with potential tenants so we can give them a better idea – from either a broad or a detailed perspective, depending on how much time they have – of what their future offi ce space could be. That is why we have developed these innovative promotional tools and created a showroom that is designed to spark their imagination!

WHAT TYPE OF OCCUPANTS ARE YOU TARGETING, AND HOW DO YOU SEEK OUT COMPANIES THAT MATCH THIS PROFILE?

Tour Prisma, Paris

The showroom features a number of renderings designed to give visitors a better idea of what the property will look like once the redevelopment project is fi nished.


Location Share (%)Leasable

area (sq. ft.)

Leasable area

(m2)Montréal 100 566,000 53,000 Montréal 50 949,000 88,000 Montréal 50 2,579,000 2,579,000 239,000 Montréal 100 917,000 917,000 917,000 917,000 917,000 917,000 917,000 917,000 917,000 917,000 917,000 85,000 Montréal 100 570,000 570,000 570,000 570,000 570,000 570,000 570,000 570,000 570,000 570,000 570,000 53,000

MontréalMontréalMontréal 100100100100 82,000 82,000 82,000 82,000 82,000 82,000 82,000 82,000 82,000 8,000

MontréalMontréalMontréalMontréalMontréal 100100100 50,000 5,000

Québec CityQuébec CityQuébec CityQuébec CityQuébec CityQuébec CityQuébec CityQuébec CityQuébec CityQuébec CityQuébec CityQuébec CityQuébec CityQuébec CityQuébec CityQuébec CityQuébec CityQuébec City 100100 128,000 12,000 Québec CityQuébec CityQuébec CityQuébec CityQuébec CityQuébec CityQuébec CityQuébec City 100100100 99,000 9,000 Québec CityQuébec CityQuébec CityQuébec CityQuébec CityQuébec CityQuébec CityQuébec CityQuébec CityQuébec CityQuébec CityQuébec CityQuébec CityQuébec CityQuébec CityQuébec CityQuébec CityQuébec CityQuébec CityQuébec City 100100100100100 266,000 25,000 Québec CityQuébec CityQuébec CityQuébec CityQuébec CityQuébec CityQuébec City 100100100 57,000 5,000

6,263,000 582,000

TorontoTorontoTorontoTorontoToronto 45 271,000 25,000TorontoTorontoTorontoTorontoTorontoTorontoTorontoTorontoToronto 100 264,000 25,000 TorontoTorontoTorontoTorontoToronto 100 537,000 50,000 50,000

TorontoTorontoTorontoTorontoToronto 100 634,000 59,000 59,000

MississaugaMississaugaMississaugaMississaugaMississaugaMississaugaMississaugaMississaugaMississaugaMississaugaMississaugaMississaugaMississaugaMississaugaMississaugaMississaugaMississauga 100 88,000 8,000 MississaugaMississaugaMississaugaMississauga 100 155,000 14,000

1,949,000 181,000

VancouverVancouver 60 257,000 24,000 VancouverVancouverVancouver 60 175,000 16,000 VancouverVancouverVancouverVancouverVancouver 60 475,000 44,000 VancouverVancouverVancouverVancouverVancouverVancouverVancouver 75 545,000 51,000 VancouverVancouverVancouver 25 349,000 32,000

CalgaryCalgaryCalgary 50 748,000 748,000 69,000 CalgaryCalgary 50 1,086,000 1,086,000 101,000 CalgaryCalgary 50 205,000 205,000 19,000

mainly Western Canadamainly Western Canada 30 2,766,000 2,766,000 257,000

6,606,0006,606,000 613,000

14,818,000 14,818,000 1,376,000

CANADA

UNITED STATESAtlanta 85.6 366,000 34,000 Seattle 5050 944,000 944,000 944,000 944,000 944,000 944,000 944,000 944,000 88,000 88,000 88,000 88,000 88,000 88,000 88,000

Bellevue 100100 1,060,000 98,000 98,000 98,000 BellevueBellevueBellevueBellevueBellevue 100100100 524,000 524,000 49,000 49,000

DenverDenverDenverDenver 100100100100 238,000 238,000 238,000 22,000 DenverDenverDenverDenver 100100100100 356,000 33,000 33,000 33,000 DallasDallasDallasDallasDallasDallasDallas 100100100 816,000 76,000 TampaTampaTampaTampaTampa 49.9949.9949.99 385,000 36,000

New YorkNew YorkNew York 49.449.449.449.449.449.4 2,635,000 2,635,000 2,635,000 245,000 New YorkNew York 454545 1,628,000 1,628,000 1,628,000 151,000 New YorkNew YorkNew York 49.949.949.949.949.949.949.9 861,000 861,000 80,000 New YorkNew YorkNew York 43.1343.1343.1343.1343.13 637,000 59,000

BostonBostonBostonBostonBostonBostonBoston 49.7549.7549.7549.7549.7549.7549.7549.7549.75 789,000 73,000 BostonBostonBostonBostonBoston 48.548.548.548.5 603,000 56,000

Washington, D.C.Washington, D.C.Washington, D.C.Washington, D.C.Washington, D.C.Washington, D.C.Washington, D.C.Washington, D.C.Washington, D.C.Washington, D.C.Washington, D.C.Washington, D.C.Washington, D.C.Washington, D.C. 14.8314.8314.8314.8314.8314.83 263,000 24,000 Washington, D.C.Washington, D.C.Washington, D.C.Washington, D.C.Washington, D.C.Washington, D.C.Washington, D.C.Washington, D.C. 30.7830.7830.78 151,000 14,000 14,000 Washington, D.C.Washington, D.C.Washington, D.C.Washington, D.C.Washington, D.C.Washington, D.C.Washington, D.C.Washington, D.C.Washington, D.C.Washington, D.C. 30.7830.78 244,000 23,000 23,000 Washington, D.C.Washington, D.C.Washington, D.C.Washington, D.C.Washington, D.C. 30.78 199,000 19,000 19,000 Washington, D.C.Washington, D.C.Washington, D.C. 30.78 159,000 15,000 15,000 Washington, D.C.Washington, D.C.Washington, D.C.Washington, D.C. 30.78 374,000 35,000 Washington, D.C.Washington, D.C.Washington, D.C.Washington, D.C. 30.78 425,000 40,000 Washington, D.C.Washington, D.C. 30.78 283,000 26,000 Washington, D.C. 14.83 183,000 17,000

OFFICE

16/

World Trade Centre MontréalSun Life BuildingSun Life BuildingPlace Ville Marie1000 De La Gauchetière OuestCentre CDP CapitalCentre CDP Capital455 Saint-Antoine Ouest (formerly Montreal Herald)(formerly Montreal Herald)415 Saint-Antoine Ouest 415 Saint-Antoine Ouest 415 Saint-Antoine Ouest (formerly Le Méco)(formerly Le Méco)(formerly Le Méco)(formerly Le Méco)(formerly Le Méco)(formerly Le Méco)Édifi ce Mérici 505 Parc Technologique de Québec505 Parc Technologique de Québec505 Parc Technologique de Québec505 Parc Technologique de QuébecÉdifi ce de la Haute-VilleÉdifi ce Price

Total Québec

Cirvek – 150 Bloor55 University 55 University York Mills Centre

Steeles Technology Campus (4 buildings)Steeles Technology Campus (4 buildings)Steeles Technology Campus (4 buildings)Steeles Technology Campus (4 buildings)Steeles Technology Campus (4 buildings)

College Square I College Square I College Square II

Total Ontario

Bentall Centre – Tower I Bentall Centre – Tower II Bentall Centre – Tower III Bentall Centre - Tower IV 1075 West Georgia 1075 West Georgia Calgary Eaton Centre (TD Canada Trust)Calgary Eaton Centre (TD Canada Trust)TD Square (Home Tower and Dome Tower)TD Square (Home Tower and Dome Tower)Holt RenfrewVersacold portfolio (20 buildings)Versacold portfolio (20 buildings)

Total Western Canada

TOTAL CANADA

Atlanta Offi ceUS Bank CenterNewport Corporate Center (6 buildings)Newport Corporate Center (6 buildings)The Summit (2 buildings)The Summit (2 buildings)Cherry Creek Corporate CenterCherry Creek Corporate CenterCampus at Cherry Creek (3 buildings)Campus at Cherry Creek (3 buildings)Daltex (10 buildings)Daltex (10 buildings)Wachovia Center 388-390 Greenwich Street (2 buildings)388-390 Greenwich Street (2 buildings)1515 Broadway 1515 Broadway 498 7th Avenue 1745 Broadway1745 BroadwayOne Boston Place 33 Arch Street1919 Pennsylvania Avenue1919 Pennsylvania Avenue1775 Pennsylvania Avenue1775 Pennsylvania Avenue1730 Pennsylvania Avenue1730 Pennsylvania Avenue1717 Pennsylvania Avenue1717 Pennsylvania Avenue1747 Pennsylvania Avenue1825 E Street (International Square)1825 E Street (International Square)1850 K Street (International Square)1850 K Street (International Square)1875 E Street (International Square)1875 E Street (International Square)2025 M Street


Location Share (%)Leasable Leasable

area area area area (sq. ft.)

Leasable area

(m2)Washington, D.C.Washington, D.C.Washington, D.C.Washington, D.C.Washington, D.C. 30.7830.7830.7830.7830.7830.7830.7830.7830.7830.7830.78 106,000 10,000

Washington, D.C.Washington, D.C.Washington, D.C.Washington, D.C.Washington, D.C.Washington, D.C.Washington, D.C.Washington, D.C.Washington, D.C.Washington, D.C. 30.7830.7830.7830.7830.7830.7830.7830.7830.7830.78 313,000 29,000

Washington, D.C.Washington, D.C.Washington, D.C.Washington, D.C.Washington, D.C.Washington, D.C.Washington, D.C.Washington, D.C.Washington, D.C.Washington, D.C.Washington, D.C.Washington, D.C.Washington, D.C.Washington, D.C.Washington, D.C. 30.78 192,000 18,000 Washington, D.C.Washington, D.C.Washington, D.C.Washington, D.C.Washington, D.C.Washington, D.C.Washington, D.C.Washington, D.C.Washington, D.C.Washington, D.C. 30.78 228,000 21,000 Washington, D.C.Washington, D.C.Washington, D.C.Washington, D.C.Washington, D.C.Washington, D.C.Washington, D.C.Washington, D.C.Washington, D.C. 30.78 204,000 19,000

VirginiaVirginia 30.7830.78 2,125,000 197,000

Sacramento 49 335,000 31,000 Richmond 49 169,000 16,000

17,795,000 1,654,000

Total offi ce portfolio Leasable area (sq. ft.)

Leasable area (m2)

Canada 14,818,000 1,376,000 United States 17,795,000 1,654,000 EuropeEurope 4,836,000 449,000

TOTAL OFFICE PORTFOLIO 37,449,000 3,479,000

Main properties in developmentMain properties in developmentMain properties in

(investments of over $100 million)Location Share (%)

Leasable area

(sq. ft.)

Leasable area

(m2)Eighth Avenue Place, Phase 1 Calgary 33.33 1,100,000 102,000

OFFICE

FRANCEParis 42.01 542,000 50,000 Paris 42.01 260,000 24,000 Paris 42.01 108,000 10,000 Paris 42.01 295,000 27,000 ParisParis 100 698,000 698,000 698,000 698,000 65,000 ParisParisParis 100 221,000 21,000

2,124,0002,124,0002,124,0002,124,0002,124,0002,124,0002,124,0002,124,000 197,000197,000197,000197,000197,000

FrankfurtFrankfurtFrankfurt 99.7399.7399.73 90,000 90,000 90,000 90,000 8,000 8,000 8,000 8,000 FrankfurtFrankfurt 99.7399.7399.73 387,000 387,000 387,000 387,000 387,000 36,000 36,000 36,000 36,000 FrankfurtFrankfurtFrankfurt 100100100 383,000 383,000 383,000 383,000 383,000 36,000 36,000 36,000 36,000

FrankfurtFrankfurtFrankfurtFrankfurt 100100100 377,000 377,000 377,000 377,000 377,000 35,000 35,000 35,000 35,000

MunichMunichMunich 100100100 632,000 632,000 632,000 632,000 632,000 59,000 59,000 59,000 59,000 MunichMunichMunich 100100100 277,000 277,000 277,000 277,000 277,000 26,000 26,000 26,000 26,000

DüsseldorfDüsseldorfDüsseldorfDüsseldorf 100100100 372,000 372,000 372,000 372,000 372,000 34,000 34,000 34,000 34,000

2,518,0002,518,0002,518,0002,518,0002,518,0002,518,0002,518,0002,518,0002,518,0002,518,000 234,000234,000234,000234,000234,000234,000234,000234,000234,000

GERMANY

London 100100100 194,000 194,000 194,000 194,000 194,000 18,000 18,000 18,000 18,000

194,000194,000194,000194,000194,000194,000194,000194,000194,000 18,00018,00018,00018,00018,00018,00018,000

UNITED KINGDOM

/17

Tour Pacifi cTour Prisma 42 de Friedland 33 Lafayette 33 Lafayette Tour T1 B Building

TOTAL FRANCE

IBC Complex – Building AIBC Complex – Building AIBC Complex – Building BIBC Complex – Building BIBC Complex – Building CIBC Complex – Building CIBC Complex – Building CIBC Complex – Building C

Sossenheim (Europark)Sossenheim (Europark)Sossenheim (Europark)

Theresienhöhe (Theresie)Theresienhöhe (Theresie)Theresienhöhe (Theresie)Kistlerhofstrasse (Tech Data)Kistlerhofstrasse (Tech Data)ThyssenKrupp Trade CenterThyssenKrupp Trade CenterThyssenKrupp Trade CenterThyssenKrupp Trade CenterThyssenKrupp Trade CenterThyssenKrupp Trade CenterThyssenKrupp Trade CenterThyssenKrupp Trade Center

TOTAL GERMANYTOTAL GERMANY

151 Buckingham Palace Road151 Buckingham Palace Road151 Buckingham Palace Road151 Buckingham Palace Road151 Buckingham Palace Road151 Buckingham Palace Road151 Buckingham Palace Road151 Buckingham Palace Road151 Buckingham Palace Road151 Buckingham Palace Road151 Buckingham Palace Road151 Buckingham Palace Road

TOTAL UNITED KINGDOMTOTAL UNITED KINGDOMTOTAL UNITED KINGDOMTOTAL UNITED KINGDOMTOTAL UNITED KINGDOMTOTAL UNITED KINGDOMTOTAL UNITED KINGDOMTOTAL UNITED KINGDOMTOTAL UNITED KINGDOMTOTAL UNITED KINGDOMTOTAL UNITED KINGDOMTOTAL UNITED KINGDOMTOTAL UNITED KINGDOMTOTAL UNITED KINGDOM

900 19th Street (Presidential Plaza)900 19th Street (Presidential Plaza)1255 23rd Street (Floyd D. Ackers 1255 23rd Street (Floyd D. Ackers Building)Building)Building)Building)2550 M Street2550 M Street1201 F Street 1201 F Street 700 14th Street (Commercial National Bank)700 14th Street (Commercial National Bank)Other buildings in the Tishman portfolio (11 buildings)(11 buildings)The Renaissance Tower Perimeter Center

TOTAL UNITED STATES


Ritz Plaza, New York

18/

HOTELS, APARTMENTS AND RETIREMENT HOUSING



/19

Signs of recovery began to emerge in the hotel, apartment and retirement housing sector in 2010. The hotel industry, which had been hit hard by the recession, saw an upturn in occupancy and revPAR rates in several markets after reaching a low in 2009. This bodes well for a stronger market in the coming months. In terms of apartment buildings in the United States, there was notable improvement in some cities, especially Manhattan, where SITQ has a signifi cant presence. Activity also picked up in the retirement housing sector across the U.S.

HOTELS, APARTMENTS AND RETIREMENT HOUSING PORTFOLIO • 95 owned and co-owned properties

• $4.2 billion

• Assets in Canada, the United States, Europe and the Caribbean

• Main partners: Westmont Hospitality Group, Starwood Capital Group, Stonehenge Partners and Senior Resource Group

STRATEGIC THINKING STRATEGIC THINKING CONDUCIVE TO

STRATEGIC THINKING CONDUCIVE TO

STRATEGIC THINKING

Holiday Inn, Paris


Signs of recovery began to emerge in the hotel, apartment and retirement housing sector in 2010. The hotel industry, which had been hit hard by the

A YEAR


A YEAR CONDUCIVE TO

A YEAR


STRATEGIC THINKING

ANALYSIS, TRANSITION AND INTEGRATION OF ASSETSGiven the adverse investment climate and the still-recent integration of these activities into SITQ’s operations, 2010 was primarily devoted to the ongoing analysis of the assets in this portfolio. The Hotels, Apartments and Retirement Housing team also strove to forge stronger ties with strategic partners in order to become more actively involved in asset management decisions.

A new acquisition was nevertheless made during the course of the year, in association with Stonehenge Partners. Located in the heart of Manhattan, on the border of Chelsea and West Village, two of the city’s most sought-after residential neighbourhoods, 555 6th Avenue is a 176-apartment property, with 30,000 square feet (2,800 square metres) of commercial space and a 90-vehicle parking garage, for a grand total of 180,000 square feet (17,000 square metres). Major renovations, including the addition of an extra fl oor, are being planned and will help deliver signifi cant extra value.

As for the hotels in the portfolio, a few renovation projects were initiated or continued during the year to enhance the quality and optimize the value of various properties.

Lastly, SITQ divested itself of its minority interest in the Red Roof Inn chain in the U.S. It also sold its stake in several development projects in India, choosing instead to focus its investments in key target markets in North America and Europe where it has already established its presence.

One acquisition was made in 2010: an apartment building in the heart of Manhattan.

HOTELS, APARTMENTS ANDRETIREMENT HOUSING


Westin Ottawa

EXPERIENCED PARTNERSThe properties in the Hotels, Apartments and Retirement Housing portfolio are co-owned with a number of solid partners with proven operational and management expertise, including:

• Westmont Hospitality Group, with which SITQ co-owns 53 hotels operating under some 15 banners, among them Hilton, Crowne Plaza, Holiday Inn and Fairmont

• Starwood Capital Group, a partner in fi ve Westin-branded hotels and one W Hotel

• Stonehenge Partners, the co-owner of 17 apartment buildings in Manhattan, representing a total of 2,544 dwellings

• Senior Resource Group, with which SITQ co-owns eight retirement residences located in three U.S. states.

REFOCUSING AND REPRIORITIZING IN 2011In 2011, the SITQ team will keep a close eye on these markets, especially the hotel sector. As conditions become more favourable, it will deploy a strategy aimed at selling certain hotel properties to capitalize on their appreciation in value since their acquisition. It will also assess the possibility of renovating select establishments in order to take advantage of their value-added potential. And it will continue its strategic analysis of the apartment sector, with the goal of developing an action plan for this aspect of its business.

Location Share (%)Share (%) UnitsMontréal 94.2 1,037

Montréal 51 152

Québec City 94.2 618618

Ottawa 94.294.294.2 429429

Ottawa 48.548.548.5 496

TorontoTorontoTorontoTorontoToronto 94.294.294.2 366

TorontoToronto 94.294.2 1,365

Toronto 48.5 977

TorontoTorontoTorontoTorontoToronto 84.7 600

TorontoTorontoTorontoTorontoTorontoTorontoTorontoTorontoToronto 84.7 419

CalgaryCalgaryCalgaryCalgaryCalgaryCalgaryCalgaryCalgaryCalgary 48.5 525

EdmontonEdmontonEdmontonEdmontonEdmontonEdmontonEdmontonEdmontonEdmontonEdmonton 48.5 416

VictoriaVictoriaVictoria 94.294.2 477

VancouverVancouver 94.294.2 489

Vancouver 48.5 511

Vancouver 94.2 556

Winnipeg 94.2 340

ApartmentsApartmentsJardins Mérici Québec City 100 103

Golden Gate 1 to 5 North York 97.5 686

United StatesUnited States 19.1 17,966

California 41.5 378

California 41.541.541.541.541.541.541.5 448

California 41.541.541.541.541.541.541.5 258

North CarolinaNorth CarolinaNorth CarolinaNorth CarolinaNorth CarolinaNorth CarolinaNorth CarolinaNorth Carolina 41.5 252252

North CarolinaNorth CarolinaNorth CarolinaNorth CarolinaNorth CarolinaNorth Carolina 41.5 176

Colorado 41.5 299

FloridaFloridaFloridaFloridaFloridaFloridaFlorida 41.5 207

FloridaFloridaFloridaFloridaFlorida 41.5 200

GeorgiaGeorgiaGeorgiaGeorgiaGeorgia 85.6 1,242

Idaho 41.5 303

Michigan 41.5 239

Nebraska 41.5 414

Ohio 41.5 300

Oregon 41.541.5 477

Washington 94.2 450

Texas 41.5 290

Texas 28.8 380

District of Columbia 94.2 415

HOTELS, APARTMENTS ANDRETIREMENT HOUSING CANADA

UNITED STATESUNITED STATES

22/

HotelsFairmont The Queen Elizabeth

W Montréal

Fairmont Le Château Frontenac

Fairmont Château Laurier

Westin Ottawa

Delta Toronto East

Fairmont Royal York

Westin Harbour Castle

Hilton Toronto

Hilton Toronto Airport Hotel and Suites

Westin Calgary

Westin Edmonton

Fairmont Empress

Fairmont Waterfront

Westin Bayshore

Fairmont Hotel Vancouver

Fairmont Winnipeg

HotelsInTown Suites (138 properties)

Doubletree Berkeley Marina

Doubletree Sacramento

Doubletree Modesto

Best Western High Point

Holiday Inn Raleigh Crabtree

Doubletree Colorado Springs World Arena

Doubletree Guest Suites Melbourne Beach

Hilton Melbourne Beach Oceanfront

Hilton Atlanta

Doubletree Boise Riverside

Embassy Suites Detroit Southfi eldEmbassy Suites Detroit Southfi eld

Doubletree Omaha Downtown

Crowne Plaza Columbus NorthCrowne Plaza Columbus North

Doubletree Portland

Fairmont Olympic HotelFairmont Olympic Hotel

Doubletree San Antonio AirportDoubletree San Antonio Airport

Doubletree Guest Suites Houston by the Doubletree Guest Suites Houston by the Galleria

Fairmont Washington, D.C.Fairmont Washington, D.C.



LocationLocation Share (%)Share (%) UnitsNew York 47.5 114

New York 47.5 100

New York 47.5 113

New York 47.5 43

New York 47.5 55

New York 47.5 120

New York 47.5 158

New York 47.547.547.547.5 176

New York 47.547.547.547.5 418

New YorkNew York 47.547.547.547.547.547.547.5 30

New YorkNew YorkNew YorkNew YorkNew YorkNew York 47.547.547.547.547.5 90

New York 47.5 333

New York 60 479

New YorkNew YorkNew York 50 55

New YorkNew YorkNew YorkNew YorkNew York 50 21

New YorkNew YorkNew YorkNew YorkNew York 70 151

AtlantaAtlanta 47.5 360

Atlanta 47.5 408

Apex 47.5 328

Matthews 47.5 212

Austin 47.5 192

Coppell 47.5 600

Plano 47.5 434

Orlando 47.5 300

Orlando 47.5 360

Orlando 100 195

Los Angeles 47.5 239

Phoenix 47.5 120

Phoenix 47.5 44

Portland 47.5 262

San Diego 47.5 343

Santa Barbara 47.5 363

Tucson 47.5 107

Tucson 47.5 120

UNITED STATES UNITED STATES

/23

ApartmentsApartments10 Downing Street

20 Park Avenue

41 Park Avenue

167 East 82nd Street

8 Gramercy Park

141 East 33rd Street

360 East 65th Street

555 6th Avenue

Stonehenge Village

347-351 East 58th Street

322-334 East 63rd Street322-334 East 63rd Street322-334 East 63rd Street322-334 East 63rd Street322-334 East 63rd Street

The Olivia

The Ritz Plaza

108 West 15th Street108 West 15th Street



Vinings CornerVinings Corner

Ashford ParkAshford Park

Lake Cameron Apartments

Matthews Reserve

McNeil Ranch Apartments

St. Marin

Mission Gate

City West

Central Park

Grand Reserve

Retirement HousingRetirement HousingVillage at Sherman Oaks

Village at Ocotillo

Hawthorn Court

SpringRidge at Charbonneau

La Vida Real

Maravilla

Silver Springs

Amber Lights


Location Share (%)Share (%)Share (%)Share (%) UnitsAlicante 84.7 120

Berlin City Centre 84.7 256

Cologne Muelheim 84.7 107

Cologne Troisdorf 84.7 110

DortmundDortmundDortmundDortmund 84.7 107

Düsseldorf NorthDüsseldorf NorthDüsseldorf NorthDüsseldorf NorthDüsseldorf NorthDüsseldorf NorthDüsseldorf NorthDüsseldorf NorthDüsseldorf NorthDüsseldorf North 84.7 150

Frankfurt AirportFrankfurt AirportFrankfurt AirportFrankfurt AirportFrankfurt AirportFrankfurt AirportFrankfurt AirportFrankfurt AirportFrankfurt AirportFrankfurt AirportFrankfurt AirportFrankfurt AirportFrankfurt AirportFrankfurt AirportFrankfurt AirportFrankfurt Airport 84.784.784.784.784.7 186186186186

Frankfurt MesseFrankfurt MesseFrankfurt MesseFrankfurt MesseFrankfurt MesseFrankfurt MesseFrankfurt MesseFrankfurt Messe 84.784.784.7 175175175

Munich MesseMunich MesseMunich MesseMunich MesseMunich MesseMunich MesseMunich MesseMunich MesseMunich MesseMunich Messe 84.784.784.7 120120120

Valencia-San LuisValencia-San LuisValencia-San LuisValencia-San LuisValencia-San LuisValencia-San LuisValencia-San LuisValencia-San LuisValencia-San LuisValencia-San LuisValencia-San Luis 84.784.784.7 125125125

AmsterdamAmsterdamAmsterdamAmsterdamAmsterdamAmsterdamAmsterdamAmsterdamAmsterdam 84.784.784.7 264

Munich City CentreMunich City CentreMunich City CentreMunich City CentreMunich City CentreMunich City CentreMunich City CentreMunich City CentreMunich City CentreMunich City CentreMunich City CentreMunich City Centre 84.784.784.7 582

Vienna SouthVienna SouthVienna SouthVienna SouthVienna SouthVienna SouthVienna South 84.784.784.7 174

Amsterdam-SchipholAmsterdam-SchipholAmsterdam-SchipholAmsterdam-SchipholAmsterdam-SchipholAmsterdam-SchipholAmsterdam-SchipholAmsterdam-SchipholAmsterdam-SchipholAmsterdam-SchipholAmsterdam-SchipholAmsterdam-SchipholAmsterdam-SchipholAmsterdam-SchipholAmsterdam-SchipholAmsterdam-SchipholAmsterdam-SchipholAmsterdam-Schiphol 84.784.784.784.784.7 242

Brussels AirportBrussels AirportBrussels AirportBrussels AirportBrussels AirportBrussels AirportBrussels AirportBrussels AirportBrussels AirportBrussels AirportBrussels AirportBrussels AirportBrussels AirportBrussels AirportBrussels Airport 84.784.784.784.784.7 315

HamburgHamburgHamburgHamburgHamburgHamburgHamburgHamburgHamburgHamburgHamburg 84.784.784.784.784.7 285

HeidelbergHeidelbergHeidelbergHeidelbergHeidelbergHeidelbergHeidelbergHeidelbergHeidelbergHeidelbergHeidelberg 84.784.784.784.784.7 232

Paris RepubliqueParis RepubliqueParis RepubliqueParis RepubliqueParis RepubliqueParis RepubliqueParis RepubliqueParis RepubliqueParis RepubliqueParis RepubliqueParis Republique 84.784.784.784.784.7 328

Paris 84.784.784.7 101

Paris 84.784.784.7 89

Paris 84.784.784.7 200

Paris 84.784.7 236

EUROPEEUROPE

Location Share (%)Share (%) UnitsBarbados 84.7 75

OTHERS

HotelsHoliday Inn Express

Holiday InnHoliday Inn

Crowne PlazaCrowne PlazaCrowne PlazaCrowne PlazaCrowne Plaza

Hôtel JulesHôtel JulesHôtel JulesHôtel JulesHôtel JulesHôtel JulesHôtel Jules

Hôtel BeauchampsHôtel BeauchampsHôtel BeauchampsHôtel BeauchampsHôtel BeauchampsHôtel BeauchampsHôtel BeauchampsHôtel BeauchampsHôtel BeauchampsHôtel BeauchampsHôtel BeauchampsHôtel BeauchampsHôtel BeauchampsHôtel BeauchampsHôtel BeauchampsHôtel BeauchampsHôtel BeauchampsHôtel Beauchamps

Holiday Inn Terminus EstHoliday Inn Terminus EstHoliday Inn Terminus EstHoliday Inn Terminus EstHoliday Inn Terminus EstHoliday Inn Terminus EstHoliday Inn Terminus EstHoliday Inn Terminus EstHoliday Inn Terminus EstHoliday Inn Terminus EstHoliday Inn Terminus EstHoliday Inn Terminus Est

Mercure Terminus NordMercure Terminus NordMercure Terminus NordMercure Terminus NordMercure Terminus NordMercure Terminus NordMercure Terminus NordMercure Terminus NordMercure Terminus NordMercure Terminus NordMercure Terminus Nord

HotelsFairmont Royal PavilionFairmont Royal Pavilion

24/

HOTELS, APARTMENTS ANDRETIREMENT HOUSING


Fairmont Le Château Frontenac, Québec City

/25



REAL ESTATE INVESTMENT FUNDS

Centre CDP Capital, Montréal


In 2010, gradual improvements in the economic environment and market conditions in most countries around the world meant that investment funds were more active. Although transaction volumes did not bounce back to pre-recession levels, they did experience a signifi cant increase, especially in the second half of the year. This was refl ected in their yields, most of which were in the black as at December 31, 2010.


REAL ESTATE INVESTMENT FUND PORTFOLIO• $3.5 billion

• North America, Europe, Asia and emerging markets

• Main partners: Lone Star, Blackstone, KingSett, Bentall, Warburg Pincus, The Praedium Group, Maestro Group


CURRENT HOLDINGSCURRENT HOLDINGSDECISIONS FOR THE FUTUREDECISIONS FOR THE FUTURE

TO MAKE WELL-INFORMEDTO MAKE WELL-INFORMEDCURRENT HOLDINGS

TO MAKE WELL-INFORMEDCURRENT HOLDINGSCURRENT HOLDINGS

TO MAKE WELL-INFORMEDCURRENT HOLDINGS

DECISIONS FOR THE FUTURETO MAKE WELL-INFORMEDDECISIONS FOR THE FUTUREDECISIONS FOR THE FUTURE

TO MAKE WELL-INFORMEDDECISIONS FOR THE FUTURE

ANALYZINGANALYZINGCURRENT HOLDINGS

ANALYZINGCURRENT HOLDINGSCURRENT HOLDINGS

ANALYZINGCURRENT HOLDINGS

DISTRIBUTIONS, CONTRIBUTIONS AND CLOSER TIES WITH INVESTMENT

PARTNERSAs had been anticipated in 2009, a number of the funds in SITQ’s portfolio distributed capital gains to their investors in 2010. This resulted in an extra $451 million in the Company’s cash fl ow. SITQ also disbursed roughly $435 million to honour its commitments to several real estate investment funds.

During the year, the SITQ team also took a more hands-on approach with its investments, particularly with the funds in which it holds a major interest. The goal has been to establish a tighter-knit relationship with the managers of these funds and gain a clearer understanding of their structures, the investments they make and their underlying assets. Using this strategy, the team hopes to better assess the risk associated with these holdings and integrate it more effectively into SITQ’s overall portfolio.


SITQ will strive to establish a tighter-knit relationship with the managers of the funds in which it holds a major interest.


REDEFINING

THE PORTFOLIO IN 2011In 2011, the SITQ team will completely revamp the positioning of its real estate investment fund portfolio, in order to concentrate on strategic funds that enable it to maximize the geographic diversifi cation of its overall assets and to access the markets where it does not wish to invest directly. SITQ will also focus on top-notch fund managers known for their rigorous, disciplined approach. The overall proportion of this type of investment within the portfolio will be reduced, given that it is intended as a complement to the Company’s core focus, i.e., offi ce properties.

Funds LocationLone Star Funds Global

Blackstone Real Estate Partners Global

Carlyle Realty Partners North America

Praedium United States

LF Strategic Real Estate Investment United States

William Opportunity Fund United States

LLFC Enhanced Fund I United States

Maestro Canada

MCAP Commercial LP Canada

Bentall Canada/United States

Kingsett Real Estate Growth Canada

Colyzeo Investors Western Europe

Chiswick Park Unit United Kingdom

Gresham Property Partners United Kingdom

Schroders Asian Property Asia

Warburg Pincus China

daVinci Japan

India Property Fund India

FundsLone Star Funds

Blackstone Real Estate Partners

Carlyle Realty Partners

Praedium

LF Strategic Real Estate Investment

William Opportunity Fund

LLFC Enhanced Fund I

Maestro

MCAP Commercial LP

Bentall

Kingsett Real Estate Growth

Colyzeo Investors

Chiswick Park Unit

Gresham Property Partners

Schroders Asian Property

Warburg Pincus

daVinci

India Property Fund



SOCIAL RESPONSIBILITY: ONE OF OUR CORE VALUES

ECONOMY AND GOVERNANCE EMPLOYEESENVIRONMENTCOMMUNITY AND KNOWLEDGETENANTSAWARDS AND CERTIFICATIONS

32ECONOMY AND GOVERNANCE 32ECONOMY AND GOVERNANCE 36

4046

5054

SOCIAL RESPONSIBILITY: ONE OF OUR CORE VALUES

ECONOMYAt SITQ, we feel it is vital to contribute to the economic prosperity of the communities where our properties are located. And because our real estate portfolio is so far-reaching, the corresponding benefi ts to local economies are manifold.

Our asset and property management operations are overseen by a team of 432 dedicated professionals working in various markets around the world. In addition to our core group of over 400 employees in Montréal, we have staff based in Calgary, France and India. The opposite page shows the breakdown of our workforce by geographic region.

Our real estate management activities also make us a major buyer and employer in Québec. Our recurring purchases, outsourcing agreements and service contracts alone amount to tens of thousands of dollars and generate over 400 indirect jobs in sectors related to the management of our 10 offi ce properties in the province, as well as numerous professional services.

Elsewhere in the world, SITQ contributes in a meaningful and diversifi ed way to the local economies of the 15 cities where we own offi ce properties, among them Boston, New York, Washington, D.C., Paris and Frankfurt. To ensure the maintenance and management of our assets in these markets, we team up with appraisers, maintenance professionals, taxation and audit consultants and a host of other providers.

SITQ IN QUÉBEC, IN TERMS OF EMPLOYMENT AND PURCHASING• Direct jobs: 401

• Payroll: $42.8 million

• Amount disbursed to suppliers in Québec: $100.1 million

• Indirect jobs (outsourced – offi ce properties): 414

ENVIRONMENTALLY RESPONSIBLE PURCHASING POLICIES In all of our properties, we work closely with our suppliers to obtain the greenest possible local goods

and services, be it for our custodial operations, the treatment of the water in our air-conditioning and

heating systems or our construction projects. Because we set out the terms of our own purchasing

policies, we systematically prioritize providers that are committed to eco-friendly practices.

AND GOVERNANCEECONOMYAND GOVERNANCEECONOMY


ECONOMY

PARIS

18

CALGARY

4

MONTRÉAL

394

NEW DELHI

9

QUÉBEC CITY

7

BREAKDOWN OF SITQ EMPLOYEES BY GEOGRAPHIC LOCATION


Effi cient, transparent governance In Québec and around the world, SITQ is well known and respected for its responsibility- and transparency-oriented governance rules, structures and practices. They are among the strictest and most comprehensive in the industry, greatly exceeding regulatory requirements in this regard.

To ensure maximum protection for our shareholders, our Board of Directors is backed by several committees, including an Audit Committee. Our Code of Ethics and Professional Conduct applies to all of our employees, and they must renew their adherence to it on an annual basis. Plus, every new employee is required to take a detailed ethics course.

Our governance practices comply fully with all applicable laws and regulations in our industry. As a result, the prevailing legislative framework is always taken into account in every aspect of our risk management activities:

• Reputation risk management: to ensure the rigorous assessment of new acquisitions and construction projects, on the basis of clearly defi ned environmental, social and governance criteria;

• Market risk management: to maintain our strategic position in the upscale real estate market and keep pace with growing tenant demands;

• Legal risk management: to anticipate changes in regulatory requirements before they are imposed;

• Climate change risk management: to identify and mitigate the fi nancial and operational impacts of any such risks on our portfolio and to reduce our carbon footprint.

Additionally, legislative and regulatory developments are monitored closely by our Environment Committee, which acts as a watchdog in this respect to ensure we remain environmentally proactive in terms of our corporate operations and legal responsibilities.

Our track record in this regard speaks to the effectiveness of these measures: none of the properties we manage received any fi nes or sanctions of any kind in 2010. When we work with a partner and entrust a third party with the management of a property, we ask those in charge to provide us with the relevant environmental studies and indicate any violations or penalties they have incurred. Nothing of this nature was reported to us during the course of the year.

Fundamental principles guided by sustainable

development

Given that 2010 saw some signifi cant changes in our upper management, our sustainable development policy has not yet been formally adopted. Our governance has nevertheless continued to be shaped by key principles that refl ect our sustainability priorities.

We are also committed to analyzing the environmental impacts of all of the decisions that we make of an economic nature, as well as ensuring that our current and future development projects are consistent with LEED standards. In addition, we see to it that our representatives comply with any guidelines we espouse and encourage our partners to do the same.

Established 14 years ago, this multidisciplinary group has a three-pronged mission to:

• implement our environmental policy in all of our properties

• encourage our business partners to adopt a policy similar to our own

• make sure our partners outside of Québec adhere to applicable environmental legislation in all of our properties.

In addition, the Environment Committee has developed our new sustainable development policy, which is set to replace our current environmental policy.

EN

VIR

ON

ME

NT

C

OM

MIT

TE

E

ECONOMY

MÉKA BRUNEL Executive

Vice President, Europe


ECONOMY

In 2009 and 2010, Méka Brunel, Executive Vice President, Europe, chaired the task force known as the “Groupe de travail Valeur Verte.” Established in conjunction with the Grenelle Building Plan – an initiative designed to foster change in France’s energy consumption structure, this task force has held over 20 meetings involving some 50 high-level participants (executives, business leaders, lawyers, environmental experts, etc.) to prompt them to consider the impact of improved energy performance on the value of buildings and come up with proposals for the government to facilitate the implementation of environmental legislation in this regard (Grenelle II laws).

“Philippe Pelletier, the head of the Grenelle Building Plan, feels that it’s up to industry professionals to make proposals to the government before any legislation is adopted,” says Ms. Brunel. “This is a whole new way of going about things in France. Usually, laws are passed and put into practice before they are subject to criticism. But, in this case, the approach has been one based on collaboration, discussion and interaction – and it has proven successful.”

SITQ’S INVOLVEMENT IN LEGISLATIVE REFORM IN FRANCE

“The fi rst time I met with SITQ executives, it was

clear that they were just beginning to contemplate

the environmental impacts of building construction

and operations. LEED certifi cation, for example,

wasn’t a term that most of them were familiar with.

But in a few short years, SITQ has made tremendous

strides. Many SITQ properties, including the head

offi ce, are now LEED-certifi ed, and I was recently

informed that certifi cation is a requirement for all of

their development projects. Considering the enormous

impact of building management and operations on

the environment, the quality of life of the people who

work there and urban development in general, SITQ

is now being an environmentally responsible leader in

its industry.”

“SITQ IS A LEADER IN ITS INDUSTRY.”“SITQ IS A LEADER IN ITS INDUSTRY.”SON SECTEUR»

/35

In fall 2010, the Groupe de travail Valeur Verte submitted a report with its recommendations, which are currently being reviewed by another task force. “That group is responsible for drafting decrees regarding the application of the Grenelle II environmental laws, some of which stem from the work of our task force,” Ms. Brunel explains. To the best of her knowledge, this is the fi rst time an executive from a Québec fi rm has played such a prominent role in the French legislative process.

Ms. Brunel, who has more than 30 years of experience in her fi eld, has pursued her involvement in this regard by becoming the head of a new task force looking into the impacts of Grenelle II environmental laws on the obsolescence of buildings in greater Paris (Île-de-France).

SIDNEY RIBAUXCo-Founder of Équiterre


Cultivating engagement We feel strongly that acknowledging individual excellence and developing our human capital are vital. That is why we have implemented highly competitive compensation programs, as well as incentives and tools that make it possible for all of our employees to fully realize their potential and meet new challenges within our organization.

Among the tools available to our staff are a career management guide, a competency chart and several business processes. Employees can also create a personalized development plan and view an up-to-date list of available positions. All of these services are accessible through our intranet site or by consulting one of our human resources professionals.

Thanks to these tools and our policies, 25 members of our staff moved into new positions in 2010, through promotions, lateral transfers or interim appointments. In addition, fi ve of our employees received referral bonuses.

In 2010, we greatly improved our recruiting processes by setting up a database that enables us to manage our résumé bank more effi ciently. This has reduced recruiting costs and improved the quality of the applications we receive from recruiters, as they can now draw on a centralized pool of candidates.

Lastly, we reviewed and enhanced the annual awards program designed to recognize exceptional employee achievements and contributions, in order to improve quality and promote excellence within the organization. The competition, which for the past decade has been known as Les grandes réalisations Qualité has been renamed Qualité en tête. It is open to permanent and, in some cases, contractual employees of SITQ, regardless of where they are based. The selection committee reviews the submissions received and chooses the fi nalists in each category. The nominees are then voted on by all employees – a fi rst this year. In total, 39 entries from several SITQ properties and departments were received in 2010.

At SITQ, the very nature of what we do means that we care deeply about our assets and what happens to them. And our most precious assets are our people. Because our employees are so important to us and because we are always on the lookout for new, best-in-class professional resources, we have implemented a series of initiatives to help foster quality of life, success and upward mobility opportunities for everyone.

EMPLOYEES


EMPLOYEES

Pay equity: An established practice SITQ has always complied with all applicable legislation pertaining to pay equity. After the amended Pay Equity Act was passed in May 2009, we reviewed and revamped our job classes, before determining the gender predominance of each, in accordance with the criteria set out in the Act. Once this was completed, we were able to conclude that pay equity has been maintained throughout our organization, including in those jobs associated with hotel, apartment and retirement housing properties, which were integrated into our portfolio in September 2009.

Ongoing commitment to professional development We attach great importance to career management and the complementary roles of employees, managers and the employer in this regard. It is our responsibility to provide the necessary fi nancial and human resources to help employees fulfi ll their career plan. It is up to our managers to identify longer-term staffi ng needs, assist their personnel in their career orientation and establish development plans. And we feel that employees must do their part in terms of analyzing their own strengths, identifying their career interests and taking charge of their development by making the most of the resources we offer.

Sustained investment in training Every year, we devote time, money and effort to providing continuing education opportunities to employees who wish to hone their skills. In 2010, we invested 1.13% of our total payroll in 173 free training programs (see table above). We also encourage our employees to take courses outside of the SITQ network, in which case we reimburse the full cost of their tuition and related expenses.

Enriched, tailored in-house training modules We further enhanced our training modules in 2010. Introduced in 2008 as a result of an employee survey, these modules feature richer content that is more closely aligned with the professional needs of our managers and staff. Furthermore, many SITQ employees are members of professional associations and orders with mandatory continuing education requirements, intended among other things to ensure their members constantly update their skills and stay at the cutting edge of their fi eld.

For example, SITQ is now a training provider recognized by the Québec Bar. Accordingly, we can apply to have the training activities we conduct for our legal professionals counted against the 30 compulsory hours of continuing education they need to complete within a 24-month period. We adopt the same approach for several other associations whose activities are related to those carried out by our employees. As a result of these initiatives, our in-house professionals can keep their knowledge and skills current.

• Number of courses delivered during the year: 173

• Number of employees enrolled: 308

• Number of training hours provided in 2010: 6,216

• Total investment: 1.13% of payroll

PROFESSIONAL DEVELOPMENT: FACTS AND FIGURES


EMPLOYEE WELLNESSA comprehensive benefi ts packageEmployee benefi ts at SITQ are among the most competitive in the industry. Not only are they a drawing card for incoming talent, they largely surpass labour standards provisions, which is a big plus in terms of retaining and motivating those who are already on our team.

Our work-life balance initiatives are particularly popular. They include a fl extime option with core hours, shorter work weeks, summer hours (via the redistribution of hours worked per week), priority access to daycare facilities and personal leave for important matters.

SPOTLIGHT ON SITQ EXECS: MARTINE DROLET, CHAIR OF THE BOARD OF DIRECTORS, ORDRE DES CONSEILLERS EN RESSOURCES HUMAINES AGRÉÉS

On April 22, 2010, Martine Drolet, SITQ’s Vice President, Human Resources, was appointed Chair of the Board of Directors of the Ordre des conseillers en ressources humaines agréés (CRHA). Considered to be the pre-eminent organization in its fi eld in Québec, the Order represents more than 10,000 members, candidates and students. One of the chief goals Ms. Drolet hopes to attain during her two-year term is to further the reputation and credibility of the Order and elevate the stature of her chosen profession. In this regard, she will be capitalizing on the extensive experience she has acquired at SITQ. “The heart of an organization is always its people,” she says. “At SITQ, we are fortunate to have our Human Resources Department so involved in so many aspects of the organization, be it change management, restructuring, reengineering, recruitment, competency development, overall compensation programs, recognition and engagement strategies, crisis simulation or business continuity planning. The sheer variety of activities and responsibilities associated with our profession makes it incredibly motivating – and this spills over into our organization, in its capacity as a strategic partner.”

Mental health and well-beingWe believe that psychological assistance services, for employees and families alike, are key to fostering a sense of balance and peace of mind that in turn helps ensure a positive, productive work environment. We therefore make a specialized round-the-clock counselling service available to our staff. In addition, 2010 marked the third year we offered our employees access to services to help them fi nd housing for aging parents who are no longer able to maintain an independent lifestyle. This program is run in conjunction with Visavie.

Workplace health and safetyAt SITQ, a safe, healthy work environment is an absolute priority, and we do everything in our power to prevent injuries and accidents on the job. Our workplace accident rate is particularly low, with four incidents reported in 2010.

EMPLOYEES


EMPLOYEES

Every year, we provide our employees with a number of opportunities to stay fi t and have fun.

Vital program Launched in January 2009 for an initial two-year period, the innovative Vital program enjoyed another successful year in 2010. Available free of charge to staff members, the initiative promotes healthier lifestyle habits.

Access to exercise facilities Four years into its operation, our fi tness centre at the SITQ head offi ce is more popular than ever and continues to expand its line-up of services. Our employees can consult with fi tness specialists and make use of exercise equipment and programs to get and stay in shape. And SITQ employees working at other buildings in Montréal can take advantage of special arrangements that have been made through our Social Club with on-site or nearby workout centres.

Lunchtime health and wellness lectures Once again this year, SITQ arranged a series of six midday talks on themes that our employees had expressed interest in exploring. Held at the Centre CDP Capital, the series brought in respected experts from a variety of backgrounds to address topics such as workplace organization, nutrition, tips for reducing one’s environmental footprint, personal growth and the pursuit of happiness, fi re prevention and job motivation.

Celebrations and community activities Every year, we hold a number of events for employees and their families, such as our children’s Christmas party and our holiday reception.

HEALTHY MIND, HEALTHY BODY


ENVIRONMENTIn keeping with our commitment to being a leader in sustainable development within the real estate sector, we are a long-time advocate of responsible practices in the management of our buildings and development projects, as well as in the administration of our assets that are managed by a third party.

We are keenly aware of the major environmental issues involved in commercial real estate operations and the signifi cant impact they can have on resource use. From our perspective, it is incumbent on owners of commercial properties to monitor and minimize their waste production, their consumption of energy, water and various materials and the amount of greenhouse gases (GHGs) produced by their facilities.

These GHG emissions, the leading known cause of climate change, are the focus of our environmental strategy, even though the Western Climate Initiative1 does not foresee imposing GHG targets on the real estate sector before 2015 and despite the fact that the impact of this industry on emissions varies greatly from one country and one market to another.2

To reduce our GHG emissions, we have undertaken in recent years to lower power consumption in our buildings, either by adopting policies and practices designed to monitor and control energy output or by upgrading infrastructure and facilities. In addition to benefi ting society as a whole, this approach yields immediate and positive effects on the quality of life of those who work in, live in or visit our properties and leads to ongoing improvements in the environment they offer.

At the same time, we have striven to measure and document our overall environmental performance. We have therefore compiled a variety of data that will enable us, for the fi rst time in our history, to disclose how much energy and water is used by the properties in our portfolio, and the level of category 1 and category 2 GHGs emitted (GHGs that we control directly and that result from our energy consumption).

The ownership structure in place for our assets and the technical complexity associated with quantitative data collection (measurement techniques vary greatly from one asset and one partner to the next) have made the information-gathering process very challenging. We are nevertheless satisfi ed with the results: our 2010 data covers more than 80% of the total area of our offi ce assets. As for our Hotel, apartment and retirement housing portfolio, we were able to compile data on just under a dozen properties. Because this proportion falls short of our needs, our goal is to fl esh out this information as soon as possible.

Now that we are in a position to assess our overall performance, we can set tangible, measurable goals for reducing our environmental footprint and respond to the growing needs of tenants, occupants, hotel patrons and other SITQ stakeholders. Over the long term, we are confi dent that this approach will deliver real added value for our portfolio.

Lastly, from an awareness perspective, we have continued to encourage our employees, tenants and occupants to adopt environmentally responsible habits on a daily basis. Our Expresso intranet site and our Clikinfo and The Leader + newsletters are useful tools for promoting green initiatives and drumming up support for the eco-friendly events and causes that we embrace.

1 www.westernclimateinitiative.org (The WCI is a partnership of several Canadian provinces and U.S. states that is laying the framework for a cap-and-trade emissions trading system in several cities where SITQ owns assets).2 A KPMG study (www.kpmg.com/ca, November 17, 2009) reveals that, in 2009, the Canadian real estate industry generated 13% of the nation’s GHG emissions and consumed 14% of its energy. In Europe, the report “Valeur verte dans le parc tertiaire” (www.plan-batiment.legrenelle-environnement.fr) shows that in 2010 the building sector was responsible for 40% of all the energy consumed in France and produced 23% of the country’s GHG emissions.


ENVIRONMENT

EnergyAll of the properties owned or co-owned by SITQ are powered by electricity, natural gas, fuel oil and/or steam (in the case of heating and air-conditioning systems). The table on the right shows overall energy consumption for the SITQ offi ce portfolio, using the data from the buildings for which we were able to obtain information.

For the properties we manage in Québec, our goal, set in conjunction with our supplier, Cofely, is to reduce energy consumption by 2% per year. In 2009, the modernization of our heating and air-conditioning systems led to a signifi cant 6.8% drop in consumption compared with the previous year. But, in 2010, this reduction rate fell to 1%, mainly because energy savings and upgrade initiatives were not rolled out on as large a scale.

The table above contains data on GHG emissions in our portfolio. It covers 100% of the emissions produced by our properties under management in Québec and a proportional percentage, based on our ownership interest, for our other assets. This approach is consistent with the guidelines issued by the Real Property Association of Canada.3

Meanwhile, although we do not yet possess comprehensive data for our hotel portfolio, the carbon management program in our eight Fairmont hotels in Canada has continued to enable these establishments to measure and monitor their progress in reducing CO2 emissions. Fairmont’s corporate-wide target is to reduce its GHG emissions by 20% below its 2006 levels by 2013.

3 More details on the methodology can be found in the section Report Context and Parameters.

SUSTAINABLE CONSUMPTION OF ENERGY AND RESOURCES Improving environmental performance in the commercial real estate sector means fi nding effective ways to manage how resources are consumed. Following is an overview of our performance in 2010, divided into three categories: energy, water and materials. A list of the properties covered under each category can be found at the end of the report, in the section Report Context and Parameters.

/41

EN

ER

GY

CO

NS

UM

PTIO

N

GR

EE

NH

OU

SE

G

AS

EM

ISS

ION

S

Number of properties included in the calculation

Energy consumption (kWh)

Total surface area

Energy consumption intensity

17,010,108

33.5 kWh/sq. ft.

SQUARE FEET

SQUARE METERS

67

570,565,482

1,580,239

361 kWh/m²


Emissions (tonnes CO2e)

Total surface area

Energy consumption intensity

17,010,108

7.7 kg CO2e/sq. ft.

SQUARE FEET

SQUARE METERS

67

131,892

1,580,239

83 kg CO2e/m²)


WaterMany of our properties already have water meters, and more and more buildings in the rest of our portfolio are following suit. This is due in part to the LEED program, which requires certifi ed properties to be equipped with these devices. The table on the right provides water consumption data for the offi ce properties for which this information was available.

WATE

R

CO

NS

UM

PTIO

N

ENVIRONMENT

LANDFILL DIVERSION AS A RESULT OF THE DECONSTRUCTION PROGRAM IN QUÉBEC

MaterialsPaper, offi ce supplies and electronic equipment, not surprisingly, represent the bulk of the materials used by the SITQ head offi ce. Paper consumption alone amounted to 12.2 tonnes in 2010.4 A number of initiatives have been introduced in recent years to reduce the amount of paper we use: we have computerized our pay slip systems, programmed all our printers to print double-sided and made it a practice to buy Forest Stewardship Council (FSC)–certifi ed paper. In terms of electronic devices, we purchased 55 cell phones and mobile devices in 2010 and 165 computers over the 2009–2011 period.

The other aspect of our business that uses a signifi cant amount of materials is real estate management. Over the past three years, all development and renovation work in this regard has been carried out using deconstruction (as opposed to demolition) methods. In other words, when we prepare for the arrival of a new tenant, we carefully remove and dismantle everything we can and reuse it in the same unit or elsewhere or send it to a recycling facility.

We also require the contractors working in our properties to ship all non-reusable materials to a recycling centre. Accordingly, we recently set up a system to track all materials diverted from and sent to landfi ll so we can keep tabs on our annual progress. In 2010, we recycled and reused 4,000 tonnes of materials and nearly 45,000 square feet of fi breglass insulation and ceiling tiles. As the table below shows, a total of 65 tonnes of materials was landfi lled during the course of these projects.

4 Paper comsumption at the Centre CDP Capital head offi ce.


Water consumption (m3):

Total surface area

Water consumption intensity

13,115,608

0.071 m³/sq. ft.

SQUARE FEET

SQUARE METERS

57

928,395

1,218,440

0.76 m³/m²

42/

1,2

87 T

ON

NES

Concrete

2,6

03 T

ON

NES

Metal

60 T

ON

NES

Drywall

21 T

ON

NES

Carpet

324 T

ON

NES

Other recycledmaterials

65 T

ON

NES

Waste sent to landfi ll 5

,657 S

QU

AR

E F

EET

Ceiling tiles

39,0

00 S

QU

AR

E F

EET

Fibreglass insulation


ENVIRONMENT

In commemoration of Earth Day 2010, we joined forces with conVERTir, a province-wide tree-planting movement. We doubled our impact in this regard by choosing strategic locations for our trees (along shorelines to minimize erosion, near roadways as a windbreak, etc.). We have also tied in the number of trees planted with the recycling results in our properties: the more our tenants and employees recycle, the more we contribute to reforestation. As a result of this program, 256 trees (representing 252 kg/100 m2 of paper and paperboard, plus 3.9 kg/100 m2 of glass, plastic and metal) will be planted in a farmland area in the Beauce region.Gre

enin

g u

p

our

recyc

ling

perf

orm

ance

20102009

2008

2007

2006

2005

2004 205217218

249251252

215

PAPER/PAPERBOARD (KG/100 M2)

GLASS/PLASTIC/METAL (KG/100 M2)

20102009

2008

2007

2006 2.73.6

5.83.9

5

PAPER, PAPERBOARD, PLASTIC, GLASS AND METAL RECYCLED 2004-2010 – QUÉBEC PROPERTIES

Many of the properties under our management or administered by a third party engage in the recycling of various types of materials. The table on the right summarizes the amounts recycled in 2010, for all of our properties for which this type of information is available. The total cumulative quantities of paperboard, paper, plastic, glass and metal recycled in Québec this past year will be used to calculate the number of trees that we will plant in 2011 as part of the conVERTir Program (As explained in the separate text on the topic).

Furthermore, we encourage our property managers to recycle and, when appropriate, we recommend to our partners that they adopt similar practices. We hope to complete the recycling profi le of our third party–managed properties in 2011.

Lastly, some of our Fairmont hotels are particularly ardent recyclers. Every month, the Fairmont Vancouver, for instance, sends 9.9 tonnes of organic waste to a composting site and recycles 4.7 tonnes of paperboard, 3.6 tonnes of paper, 762 kilograms of plastic and 28.6 kilograms of batteries. The Fairmont Waterfront, also in Vancouver, has diverted almost 70% of its waste from landfi ll via its recycling and composting programs. And the Fairmont Olympic, in Seattle, recycles 14.9 tonnes of materials and 22.5 tonnes of food on a monthly basis.

/43

RECYCLINGNumber of properties

included in the calculation

Quantity of recycled materials (tonnes)

58

5,288


ENVIRONMENT

Every year, we are proud to invest time, money and effort in various public initiatives that stress the importance of safeguarding the environment for future generations.

Earth DayOn every April 22, for the past fi ve years, we have celebrated Earth Day – a planet-wide event that aims to raise public awareness about environmental issues.

In 2010, we once again organized a collection of hazardous waste, in conjunction with the Éco-quartier offi ces in the Montréal borough of Ville-Marie. As a result, we diverted the following from landfi ll:

- 668 kilograms of batteries;

- 13,340 linear feet of fl uorescent tubes;

- 109 kilograms of compact fl uorescent light bulbs;

- 22 kilograms of acid, oxidants and chlorine.

Earth HourTo show our support for this global movement, we turned off the outside lights at our 10 properties in Montréal and Québec City for one hour on March 27, 2010. This marked the third year in a row that we joined forces with this climate change initiative, which is observed in some 50 countries around the world.

Défi ClimatDéfi Climat is Québec’s largest awareness-raising campaign in the fi ght against climate change. For the second year, we encouraged all of our employees to take part in this widespread movement and help reduce GHG emissions across the province.

In Town Without My Car DayEvery year, as part of this major international initiative, we invite our employees and tenants to use an alternative form of transportation (walking, cycling, public transit or carpooling) to get to work. In 2010, we also took part in the corporate competition that was organized in conjunction with the event.

ENVIRONMENTAL INITIATIVES, CHALLENGES AND EVENTS

City of Montréal’s sustainable development plan Montréal’s sustainable development plan is designed to encourage members of the public, businesses and organizations to adopt specifi c sustainability-oriented goals and actions. As part of the 2010–2012 phase of this plan, which is ongoing until 2015, we have committed to several initiatives to help reduce our carbon footprint.

Polar bears on thin iceThis past winter, the viewpoint of Place Ville Marie was the backdrop for an imposing ice sculpture of a polar bear, as part of an Équiterre-led project. The sculpture slowly melted away through until April, mirroring the way the ice in the Arctic Ocean is melting due to global warming, until the only thing left was an inner bronze skeleton. SITQ provided logistical and fi nancial support to this project, which took its cues from similar initiatives undertaken in London and Copenhagen.


ENVIRONMENT

- Between January and November 2010, the parking garage at Édifi ce de la Haute-Ville, in Québec City, underwent renovations, which included repairs to reinforced-concrete beams, columns, walls and slabs. The old concrete – 1,250 tonnes’ worth – was shipped to a recycling centre, where it was crushed for reuse as backfi ll, while 37,535 kilograms of reinforcing steel was salvaged and repurposed.

- The new steam-based car wash that opened at Place Ville Marie in mid-October 2010 features a special water recovery and fi ltration procedure that makes it possible to clean the outside of an average vehicle with a mere 2.5 litres of water. Using this same process, the eco-friendly car wash at 1000 De La Gauchetière has generated substantial water savings since 2009: in 2010, 2,000 vehicles were cleaned using 5,000 litres of water, compared with the 150,000 litres that would have been required to run a conventional system. That’s 30 times less! With more than 500 vehicles washed in less than three months, Place Ville Marie has already saved over 13,000 litres of water.

“Since the 1960s, Place Ville Marie has been heated using steam produced by Climatisation et Chauffage Urbains de Montréal (CCUM), which distributes steam to several clients in downtown Montréal via a network of underground pipes. Fuel oil and natural gas are long-time rivals with respect to powering the production of this steam.

When its contract came up for renewal, Place Ville Marie asked CCUM to switch to a system powered exclusively by natural gas. The complex confi rmed that it was ready to commit to an agreement in this regard until 2029. Now that’s what I call vision. […]

This initiative alone will make it possible to achieve an immediate 15% reduction in GHG emissions in downtown Montréal, in addition to greatly improving air quality in this area, reducing the motor traffi c associated with fuel oil delivery and allowing CCUM to tap into substantial savings in terms of maintenance costs.

This example clearly shows how the choices made by a user of energy services like Place Ville Marie can make a real difference.”

Excerpt from a speech delivered by Sophie Brochu, President and Chief Executive Offi cer of Gaz Métro, to the Canadian Club of

Montréal on February 1, 2010.

“THE CHOICES MADE BY A USER OF ENERGY SERVICES LIKE PLACE VILLE MARIE CAN MAKE A REAL DIFFERENCE”

INNOVATIVE WAYS OF CUTTING DOWN

- Inspired by the success of the composting program for coffee grounds set up at the Centre CDP Capital in 2009, the property management team has established a similar service for paper hand towels in most of the washrooms throughout the complex. Although we make no profi t on this initiative, it represents yet another step toward a broader composting program for our properties, a goal we hope to achieve in the near future. In the meantime, we expect to divert up to 16 tonnes of paper from landfi ll in the fi rst year of this project, which is a joint undertaking with the adjacent 415 Saint-Antoine Ouest and 455 Saint-Antoine Ouest.

/45

Place Ville Marie, Montréal


In addition to offering our employees opportunities to volunteer their time and expertise to various causes throughout the year, we renewed our commitment to giving back to the community and supporting children in need. We helped organize a number of charity events, took part in fundraising drives and made our buildings and premises available to various organizations.

International Giving Back Day For the second year in a row, SITQ offi ces around the world took part in Giving Back Day, which was held on August 27. For the occasion, some 250 employees in Montréal, Québec City, Calgary, Paris and New Delhi spent the day volunteering in their respective communities. Employees were thus given a paid day off to carry out a variety of tasks for one of several worthy causes selected by SITQ.

Recipient organizations were chosen based on how closely aligned to two of our philanthropic focuses, i.e., child welfare and environmental protection, as well as the nature of the work to be done, geographical location and the ability to accommodate our volunteer teams. Some of the tasks accomplished

Every year, we lend our support to numerous causes, assist community organizations and contribute to the development of knowledge and know-how, both in Canada and around the world. Although our philanthropic efforts benefi t many different organizations, we primarily endorse endeavours that focus on children, the environment and real estate heritage preservation. In 2010, consistent with this approach, SITQ’s combined sponsorships and gifts came to nearly $800,000, as this graph shows.

OUR CONTRIBUTIONS AND SPONSORSHIPS IN 2010

$25,500 Environment

$276,300 Children

$389,200 Real estate heritage preservation and knowledge

$102,900 Other

49%

34.8%

13%

3.2%

by SITQ employees included sorting food donations, weeding, planting trees, cleaning walls and windows, painting, cooking and assembling furniture.

Giving Back Day was a huge success once again this year. Volunteers appreciated how rewarding the experience was, and the 12 recipient organizations were grateful for the free and much-needed labour:

- Montréal : L’Abri d’espoir, Autisme Montréal, the Éco-quartier offi ces in Hochelaga-Maisonneuve, Longue-Pointe and Ville-Marie, Héritage Laurentien, Répit Providence, Les Lutins verts;

- Québec City : Moisson Québec;

- Calgary : Terry Fox Foundation;

- Paris : Communauté Emmaüs;

- New Delhi : Salaam Baalak Trust.

FINANCIAL COMMITMENT AND CONCRETE ACTION IN SUPPORT OF CHILDREN AND THE COMMUNITY

COMMUNITYAND KNOWLEDGECOMMUNITYAND KNOWLEDGECOMMUNITY

46/

Montréal Québec Calgary Paris New Delhi


COMMUNITY AND KNOWLEDGE

2010 Classique SITQ golf tournament The latest edition of our annual golf tournament raised $111,243 for six children-oriented charities: The Lighthouse – Children and Families, the Diabetic Children’s Foundation, the Fondation des jumelles Coudé, the Canadian Liver Foundation, the Montréal Real Estate Foundation for Kids and the Lachine Hospital Foundation.

Montréal Real Estate Foundation for Kids The MREFK, whose mission is to accommodate the real estate needs of youth organizations, is one of our long-standing community partners. In 2010, we once again donated the proceeds from the sale of the paper and paperboard recyclables collected at our Montréal offi ces to the charity. This year, the amount came to over $90,000.

Centraide Every year, the Caisse de dépôt et placement du Québec and its real estate subsidiaries (including SITQ) donate generously to Centraide, so it can continue to support some 1,700 community organizations and make a difference in the lives of those who need it most. Beyond our staff’s involvement in several Centraide-sponsored events (March of 1000 Umbrellas, RBC Challenge, etc.), we hold internal fundraisers and encourage employees to give directly to the cause. In 2010, this translated into a grand total of $106,000 in donations.

Other endeavours SITQ regularly supports the causes near and dear to the hearts of our many tenants, occupants and suppliers. This year, we helped out several organizations by allowing them to post notices about their fundraising campaigns in our properties at no charge. We also make public space available to community, humanitarian and environmental organizations for various events. In a similar vein, we rent some of our offi ce space to charitable or cultural organizations for a special reduced fee.

SITQ JOINS FORCES WITH HÉRITAGE MONTRÉAL“This year, which marks our 35th anniversary, Héritage Montréal became a partner of SITQ and one of its fi nancial benefi ciaries. This association is a logical and natural one, since SITQ is the owner of several iconic Montréal landmarks and plays an active role in preserving our architectural history while working hard to build a legacy for today and tomorrow – the Centre CDP Capital is clear proof of this. By teaming up with Héritage Montréal, SITQ’s leadership is showing that they have a solid grasp of what sustainable development really is. It’s not only about green roofs and bicycle racks – it’s fi rst and foremost a matter of clear vision, effi cient practices and solid principles. And academics and lobbyists are not the only driving forces behind heritage protection – teamwork and partnership with the business community are just as important and infl uential. Thanks to SITQ’s fi nancial support, we have been able to create new guides and new Architectours programs. These initiatives, which were initially directed at Montréalers to enlighten them about the wealth of architectural riches their city holds, have been a hit with tourists as well. We also worked with SITQ to put together the Montréal Architectural Heritage Campaign, a prestigious undertaking that we implemented in conjunction with the city in 1991 and the only event of its kind in North America.”

/47

Sun Life Building, Montréal

DINU BUMBARU Policy Director

Héritage Montréal


PROMOTING THE DEVELOPMENT OF EXPERTISE AND GROOMING THE NEXT GENERATION OF LEADERS


UQAM AND SITQ: A WINNING PARTNERSHIP

“During our 15-year association, SITQ’s fi nancial, logistical and hands-on contributions have enabled UQAM to push the bounds of real estate research and help a growing number of students embark upon a career in this fi eld. The SITQ Real Estate Chair has had a major impact in this regard. Its scholarships and fi nancial support at the undergraduate level have made it possible for several students to embrace the profession and make it one of the most dynamic career paths in the industry. The number of graduates who have chosen this career and earned their professional designations has risen sharply. For instance, the Ordre des évaluateurs agréés du Québec welcomed no fewer than 80 new members in 2010, a large proportion of whom were UQAM graduates. So the outlook for the future is bright indeed!”

JACQUES SAINT-PIERREDirector, UQAM SITQ Real Estate Chair

School of Management Université du Québec à Montréal

Because we look at human resources issues from a longer-term perspective and because we fi rmly believe in the importance of having highly specialized professionals on our team, we invest in the future of the real estate industry by sponsoring academic chairs and university programs and by hosting several large-scale student activities.

UQAM SITQ Real Estate Chair For 15 years now, SITQ has been working in close partnership with this real estate research and teaching chair at the Université du Québec à Montréal (UQAM). Our support is multifaceted: we provide an annual fi nancial contribution of $150,000, we help organize events, we make public spaces available for special activities and two of our executives serve on the Chair’s steering committee.

SITQ/Université de Montréal Urban and Real Estate Development Observatory Established in 2006 in conjunction with the Université de Montréal, the Observatory is devoted to shedding light on and further strengthening the ties that exist between urban development and the real estate industry. This year, we once again renewed our annual $100,000 contribution to the initiative.

Support for university activities In 2010, facilities in several of our properties were made available free of charge to students for special events. For example, the Centre CDP Capital Parquet played host to the 13th annual inter-university stock market simulation, which was attended by more than 500 students from across Canada. We also provided free guided tours of the Centre CDP Capital to 512 design and architecture students during the course of the year.

SITQ/UNIVERSITÉ DE MONTRÉAL OBSERVATORY: FOCUS ON THE ISSUES FACING TODAY’S REAL ESTATE INDUSTRY“The partnership between SITQ and the Faculté de l’aménagement of the Université de Montréal is essential to advancing knowledge about urban and real estate development and to providing students with graduate and postgraduate education opportunities in this fi eld. Through this collaboration, the SITQ Observatory is helping us to develop research programs that focus on the critical issues of today, such as the social acceptance of major development projects and the incorporation of sustainable development principles into urban planning.”

PAUL LEWISSITQ Urban and Real Estate Development Observatory

Institut d’urbanisme, Faculté d’aménagementUniversité de Montréal



A SUCCESSFUL “BID” FOR BOSTONSITQ is an engaged corporate citizen, both in Québec and beyond. As a case in point, we lent our support to the revitalization of downtown Boston in 2010, as part of the Business Improvement District (BID) initiative. The purpose of this program is to improve the physical appearance and ambiance of public areas by cleaning, maintaining and restoring select streets and sidewalks and attracting the required private investments to cover the cost. Owners’ contributions are based on a percentage of their property taxes. In our case, this translated into US$140,000 for 33 Arch Street and US$175,000 for One Boston Place.

SALAAM BAALAK TRUST: SOCIAL RESPONSIBILITY WITHOUT BORDERS

Since August 2009, SITQ’s India offi ce has been covering the education and related costs for a young orphan named Anmol

in New Delhi, in partnership with local NGO Salaam Baalak Trust (“Salaam Baalak” translates to “salute the children”).

Anmol just started ninth grade and aspires to become a computer engineer. The fi nancial support provided by SITQ also

pays for Anmol’s clothing, food and medical expenses. Plus, during Giving Back Day, everyone at SITQ India volunteered

their time at Salaam Baalak Trust. SITQ will continue to sponsor Anmol in 2010–2011.

For more info: www.salaambaalaktrust.com


This year, our social responsibility report features a section dedicated specifi cally to our real estate management services. There are many reasons for this new approach. The nature of real estate management is decidedly different from asset ownership. And more than a third of our staff is involved in this aspect of our business, which encompasses leasing, construction and property administration, Environmental management is a priority for each of these teams. Because they directly oversee building operations, they are able to implement several activities and programs of a social or environmental nature. For the sake of clarity and in order to more accurately describe the activities related to projects and services that benefi t our tenants and occupants, we therefore decided to create a separate report section dealing with this aspect of our portfolio.

To ensure they receive top-notch service, we make it our priority to anticipate their needs and offer them a range of services that ensure a pleasant, productive work environment.

Tenant Service Centre Occupants in all of our properties under management have access to an agent who is assigned to their building to answer their questions about our services, policies and green practices. On an average day in 2010, 266 queries were received and managed, in accordance with our standards in terms of response time, follow-up and quality of service.

Constant quality control for services delivered to tenants Our properties undergo daily quality control checks, conducted by professionals who assess such aspects as safety, security, emergency response, sanitation, comfort, indoor air quality and environmental compliance. Satisfaction levels are reviewed at regular meetings with tenant representatives. This makes it possible to make prompt adjustments in these services as specifi c needs arise. Lastly, every three years, we conduct an in-depth tenant survey to assess the level of satisfaction with the services we provide. The next survey is scheduled for 2011.

OUR TENANTS MUCH MORE

OUR TENANTS MUCH MORE

OUR TENANTS

Our real estate management activities are focused on 10 properties in Montréal and Québec City. Our philosophy in this regard is simple: we strive to cater to the needs of tenants by providing them with high-quality facilities and an environment conducive to the successful and smooth operation of their business. For us, our tenants are much more than our clients: they are our partners in every regard.

THAN OUR CLIENTSTHAN OUR CLIENTSMUCH MORE

THAN OUR CLIENTSMUCH MORE


TENANTS

Reducing our energy consumption and maintaining a healthy workplace: A top priority As we emphasized in the Environment section of this report, we are steadfast in our commitment to reduce our energy consumption in our properties under management, while ensuring that comfort and indoor air quality are maintained at optimal levels. We have even concluded performance-based agreements with the energy management consultants at Cofely to provide them with a fi nancial incentive if they are able to surpass our reduction goals.

Furthermore, the quality of the air we breathe in the buildings in SITQ’s Québec portfolio ranks among the best in the real estate industry. It meets with the strictest standards, as set forth by the American Society of Heating, Refrigerating and Air-Conditioning Engineers (ASHRAE). Every year, we perform the necessary checks to make sure these norms are maintained. And we encourage our tenants and occupants to follow our example.

Effective communication and information sharing Clikinfo, our quarterly online newsletter tailored to each of our properties, keeps our tenants informed about a wide range of topics, including ongoing and upcoming projects and activities, sustainability initiatives and more.

Special activities We are committed to providing our tenants and their employees with a stimulating work environment. That is why we organize a wealth of events and activities designed to entertain, enliven and enlighten.

Every year, we sponsor Les Concerts-midi du Quartier international, the Un air d’été concert series presented on the outdoor patios of four of our Montréal-based properties and holiday choral concerts. In addition, several of our buildings played host to numerous exhibitions during the year on topics as varied as fashion, colonial Mexico, Frida Khalo, Nunavik, prominent Québecers (Portraits d’Infl uence), contemporary art (Art souterrain) and Montréal’s architectural jewels (Les belles montréalaises).

Our Éco-Événement program – the aim of which is to raise awareness about our green initiatives and encourage our tenants to adopt environmentally friendly practices in their workplace – was dormant in 2010. But a new and improved version is in the works for 2011.

A more intimate dialogue with our retailers This year, we continued to support the activities of the sustainable development committees in each of our properties under management. The primary purpose of these committees is to stimulate discussion about the sustainability objectives in each building. These meetings not only help us adjust this social responsibility report in line with their priorities and concerns, they are also fertile ground for cultivating ideas to reduce energy consumption, improve recycling, promote alternative transportation and so forth.

Each committee is made up of one representative of every tenant who wishes to be involved, along with two SITQ representatives (the Green Committee representative for the property and the environment coordinator). Their mission is to brief tenants on the scope of SITQ’s environmental initiatives, keep them abreast of current projects and update them on the energy performance of their property. Participating tenant representatives become SITQ ambassadors of sorts, bringing back the information they receive to their respective teams.

GREEN COMMITTEESITQ’s Green Committee celebrated its fifth anniversary in 2010. Its mission is to improve our environmental performance by enhancing practices and implementing employee and tenant programs. Thus far, it has rolled out a number of innovative initiatives, such as establishing sustainable development committees in our Québec properties, achieving certifi cation for several buildings, training employees on new environmental standards and creating a permanent environmental coordinator position.


OUR TENANTS

TENANTS

A PROPERTY OWNER WITH VISION AND COMMITMENT“As the owners of Place Ville Marie since 2001, SITQ

is constantly working to improve the infrastructure of

this Montréal landmark. They have replaced the cooling

towers, mechanical HVAC systems and domestic water

pumping system and eliminated CFCs from our air-

conditioning.

“In addition to these upgrades, they have provided

occupants with a number of activities and amenities:

lunchtime concerts, holiday choral performances, a

bustling retail scene and several new restaurants.

“SITQ’s environmental and sustainable development

priorities help make it one of the world’s top real

estate companies. To honour this pledge, it undertakes

many large-scale initiatives, but it also does plenty of

other things on a smaller scale, like replacing the 456

incandescent light bulbs in the lobby, installing LED lights

on the Christmas tree on the esplanade, recycling paper,

plastic, glass, metal and cell phones, purchasing green

supplies, automating internal systems to eliminate paper

and making various programs available to employees and

tenants.

“As tenants, we benefi t from these initiatives, and we

consider ourselves lucky to be working with a property

owner with such vision and commitment. SITQ’s priorities

are a good fi t for our own corporate values.”

Alternative commuting solutions For many years, we have been advocating the use of alternative means of transportation to meet the commuting needs of our tenants and occupants. And 2010 was no different. Our Montréal properties are all readily accessible by public transit and located near BIXI self-service bicycle rental stations. Plus they boast a range of amenities and services designed to promote greener transportation choices.

CommunautoThis network of self-service vehicles, which offers several packages at varying price points, is steadily growing in popularity in Montréal. At two SITQ properties – 1000 De La Gauchetière and the World Trade Centre Montréal – Communauto cars can park at one of four reduced-rate spots. Through this initiative, we are showing our support for the organization, which will soon be integrating electric cars into its fl eet, and making it easier for tenants, occupants and employees to take advantage of this service.

CyclingMost of our properties under management boast a comprehensive set of bike-friendly facilities, complete with secure indoor parking, showers, changing rooms and amenities especially adapted to cycle commuters. In 2010, our properties in Montréal were equipped with 663 secure bicycle parking spots, as well as 40 temporary visitor spots. Across the Québec City portfolio, there is secure parking available for a total of 97 bicycles.

This year, we added 180 indoor bicycle parking spaces at Place Ville Marie. They are keycard-accessible and protected by video surveillance. These brand-new facilities include men’s and women’s changing rooms, each of which features 38 lockers and three showers.

For the past seven years, SITQ has also been working with AccèsVélo, a program in Montréal that makes 26 self-service bicycles available to our downtown properties. This year, these bicycles were borrowed 339 times, compared with 523 times last year. This dip in participation may be attributable to the growing popularity of the BIXI program.

We are also avid promoters of cycling as a transportation option through an array of channels, including the Web, our intranet site, various brochures we publish and information booths in our properties. And, through our Social Club, we encourage our employees to take part in the Montréal Bike Fest. This year, 56 of our staff members participated in this highly anticipated week-long cycling event.

A sought-after partner in the organization of eco-responsible events It takes expertise and commitment to put together a green event. You need to know how to integrate the principles of sustainable development into each aspect of the planning process.

The fi rst step is to control and measure adverse environmental impacts (minimize waste production, greenhouse gas emissions, use of natural resources, etc.). Then it is important to seek out positive solutions (select local providers that endorse sustainability, fair trade, social reintegration, charitable causes or other worthwhile principles).

In this regard, SITQ can provide event facilities that meet the most stringent requirements, among them the newly adopted BNQ (Bureau de normalisation du Québec) standard “Sustainable Development – Responsible Event Management.” Not only do we offer rental services that meet these criteria, but we can also work with organizers to ensure compliance throughout the process, thus increasing their chances of having their event certifi ed as eco-responsible.

52/

NATHALIE KHOROMANSKY, BBAOPERATIONS LEADER, EAST CANADA

DELOITTE


TENANTS

When the Borden Ladner Gervais (BLG) legal fi rm renewed

their lease at 1000 De La Gauchetière, they decided to

take advantage of the opportunity to renovate their offi ces.

During the planning stage, we pointed out to BLG that the

SITQ-owned property is BOMA BESt–certifi ed and in the

process of working toward LEED certifi cation. Consequently,

we recommended deconstruction as a way of promoting the

recycling and, wherever possible, reuse of certain materials.

BLG greeted this prospect with enthusiasm and went one step

further, expressing the desire to maximize the use of green

construction methods.

In 2010, during the fi rst phase of the project, which involved the

redevelopment of two out of BLG’s four fl oors, deconstruction

techniques led to 55,600 kilograms of various materials and

37,000 square feet of carpet being sent to recycling facilities.

In contrast, 8,813 kilograms of waste was shipped to landfi ll

sites for disposal. Moreover, a signifi cant amount of material

from the old offi ces was set aside for use in the new ones.

And when new items were needed, they were chosen for their

eco-friendly characteristics – from LED lighting fi xtures and

motion detectors to shut off lights when an area is not in use

to fl ooring made from natural or recycled materials.

“In the past few years, we had adopted numerous initiatives

to improve our environmental footprint and reduce energy and

resource consumption at BLG,” explains Maurice Poitras, Chief

Operating Offi cer, Montréal. “Renovating our offi ces provided

an excellent opportunity for us to take things to the next level.

For us, SITQ was a partner who shared our priorities, not only

in terms of salvaging and reusing construction materials but

also when it came time to selecting new ones.”

Material reused in new construction projects

4,950 SQ. FT. DRYWALL

55 DOORS AND FRAMES

17,200 SQ. FT. ACOUSTIC INSULATION

22,227 SQ. FT. ACOUSTIC TILES

Recyclables diverted from landfi ll

37,520 SQ. FT. CARPET

34,868 KG GYPSUM

13,109 KG WOOD

7,642 KG METAL

/53

WORKING HAND IN HAND WITH OUR TENANTS: PUTTING DECONSTRUCTION PRINCIPLES INTO PRACTICE


CERTIFICATIONSEvery year, a number of properties managed, owned or co-owned by SITQ are singled out for recognition for their design, energy performance or management and operational approach. This past year was no exception in terms of awards and certifi cations in Québec and throughout North America. No fewer than 62 of our offi ce properties, i.e., 39% of our entire offi ce portfolio, and 15 of our hotels are now certifi ed under a recognized environmental program (for a full list, see pages 56 and 57). In addition, we ourselves helped highlight excellence in the real estate industry, by sponsoring a new sustainable development award in France and by presenting, for the third year, an award for architectural heritage preservation in Québec.

Renaissance Tower receives highest LEED certifi cation In 2010, Renaissance Tower, in which SITQ owns a 49% interest, received LEED-EB: O&M (Existing Buildings: Operations & Maintenance) certifi cation at the Platinum level – the highest rating awarded under the LEED system. This speaks to the excellent environmental performance of this property located in Sacramento, California. Renaissance Tower is the second multi-tenant Platinum recipient and one of only 31 LEED-EB Platinum properties in the world.

A triple victory for Wachovia Center: LEED, TOBY and Energy Star Wachovia Center, a property in which SITQ holds a 50% stake, achieved Gold-level certifi cation under the LEED-EB: O&M program in 2010. It is the third recipient of this prestigious distinction in the Tampa Bay area and the 10th in Florida. The year also brought more good news in the form of a TOBY (Building of the Year) Award from BOMA (Building Owners and Managers Association) in the 250,000 to 500,000 square feet category, in recognition for Wachovia Center’s exceptional quality and management.

33 Arch Street in Boston twice honoured After receiving LEED-EB: O&M Gold-level certifi cation in April 2010, 33 Arch Street in Boston, in which SITQ holds a 48.5% interest, received a TOBY Award in the 500,000 to 1 million square feet category from BOMA. Both honours underscore the remarkable achievements made over the years by this property, which currently ranks as one of the most environmentally responsible in the U.S.

1000 De La Gauchetière receives LEED-EB: O&M certifi cation and an Écolectrique awardFollowing an extensive two-year process, 1000 De La Gauchetière, in Montréal, was awarded LEED-EB: O&M certifi cation in 2010. It was the second building in Canada to be thusly recognized by the U.S. Green Building Council (USGBC), the fi rst being Centre Bell in Montréal, and is currently the largest building in the country to hold this distinction. Soon afterward, 1000 De La Gauchetière was presented with an Écolectrique award by Hydro-Québec, in April 2010, for its successful efforts in reducing its energy consumption by over 5%.

AWARDS AND AWARDS AND AWARDS AND AWARDS AND CERTIFICATIONS

AWARDS AND CERTIFICATIONSCERTIFICATIONS

AWARDS AND CERTIFICATIONS

54/1000 De La Gauchetière Ouest, Montréal



Pre-certifi ed LEED Platinum property in CalgaryEighth Avenue Place, a 49-storey offi ce tower in Calgary, was recently pre-certifi ed LEED-CS (Core & Shell) Platinum. Co-owned by SITQ (33.3%), this property, currently under construction, will be the fi rst skyscraper (> 1 million square feet) to receive this level of certifi cation in Canada, and the third in North America. Among the design elements that led to this recognition from the USGBC are the property’s revolutionary HVAC system and its immense green roof (which, at 30,000 square feet (2,780 m2), will be Canada’s largest).

A fi rst Pierre d’Or Immobilier Durable award presented by SITQ in FranceAt the 12th annual Pierres d’Or awards, an event that brings together France’s biggest names in real estate, SITQ sponsored and presented the fi rst Pierre d’Or for sustainable real estate. This new award, which recognizes exceptional achievement by a company or individual in promoting sustainable development in the French real estate industry, was given to Philippe Pelletier, a housing expert and an active supporter of the Grenelle Building Plan, a government program designed to assess and reduce energy consumption in buildings throughout France. The award was presented by Méka Brunel, Executive Vice President, Europe, who took advantage of the opportunity to stress SITQ’s commitment to sustainability in Europe and in other markets where we are present.

Third SITQ Award of Excellence presented in Montréal For the third year in a row, SITQ was on hand to present the SITQ Award of Excellence as part of the Montréal Architectural Heritage Campaign (OPAM), in collaboration with the Ville de Montréal and Héritage Montréal. The honour recognizes the exceptional contributions of an individual or organization toward protecting Montréal’s built heritage. This year it was given to Maurice Forget, former president of Héritage Montréal and the driving force behind numerous initiatives aimed at highlighting the historical value of the city’s various neighbourhoods. Mr. Forget is also the founder of OPAM, which has for 20 years been encouraging the public to learn more about the rich architectural tapestry of the Island of Montréal and the need to ensure its maintenance and longevity, while respecting its original style and character.

EUROPE: GREEN BUILDINGS, STILL AWAITING CERTIFICATION

In North America, Energy Star and LEED

certifi cation programs have been in place for

years. In Europe, however, the equivalents

of these standards (e.g., HQE, which stands

for “Haute Qualité Environnementale”) are

relatively new to the scene, at least as far as

existing buildings are concerned. This – along

with the lack of consistency among the various

systems – is the reason that none of SITQ’s

fully or partially owned properties in Europe

have been environmentally certifi ed. However,

most can still rightly claim eco-effi cient status,

which will eventually be confi rmed when further

progress is made on the certifi cation front. In

Paris (La Défense), Tour Prisma (42% interest

SITQ) will be compliant with the 2020 energy

consumption target identifi ed in the Grenelle

II environmental laws as soon as renovations

have been completed. The property is also

currently in the midst of the HQE and LEED

certifi cation processes for existing buildings.

Furthermore, we have signed “green leases”

with two of our tenants, which will allow us

to exchange information, implement shared

energy-saving measures and adopt other eco-

responsible practices.

/55

B Building, Paris


CERTIFICATIONS

Environmental Certifi cations Level of certifi cation LEED-CERTIFIED PROPERTIES The Renaissance Tower, Sacramento LEED-EB O&M PlatinumWachovia Center, Tampa LEED-EB O&M Gold33 Arch Street, Boston LEED-EB O&M GoldOne Boston Place, Boston LEED-EB O&M Gold

1000 De La Gauchetière, Montréal LEED EB O&M

Centre CDP Capital, Montréal LEED-EB Gold

1775 Pennsylvania Avenue, Washington, D.C. LEED-CS

Eighth Avenue Place, Calgary (development project) Pre-certifi ed LEED-CS Platinum

Two Newport, Seattle (development project) Pre-certifi ed LEED-CS Silver

Summit III, Seattle (development project) Pre-certifi ed LEED-CS Silver

BOMA BEST–CERTIFIED PROPERTIES Centre CDP Capital, Montréal Level 4

Place Ville Marie, Montréal Level 3

Centre de commerce mondial de Montréal, Montréal Level 3

1000 De La Gauchetière, Montréal Level 3

Sun Life Building, Montréal Level 3

York Mills Centre, Toronto Level 3

Steeles Tech Campus, Toronto Level 3

Édifi ce Price, Québec City Level 2

Édifi ce de la Haute-Ville, Québec City Level 2

Édifi ce Mérici, Québec City Level 2

55 University, Toronto Level 2

1075 West Georgia, Vancouver Level 2

TD Square, Calgary Level 1

Calgary Eaton Centre/TD Canada Trust Tower, Calgary Level 1

Bentall Centre I–IV, Vancouver Level 1



Environmental Certifi cations Level of certifi cation ENERGY STAR–CERTIFIED PROPERTIES Commonwealth Tower, Arlington Energy Star

Five Newport Corporate Center, Bellevue Energy Star

33 Arch Street, Boston Energy Star

One Boston Place, Boston Energy Star

One Rock Spring, Maryland Energy Star

388 Greenwich Street, New York Energy Star

Reston Crossing I, Northern Virginia Energy Star

Reston Crossing II, Northern Virginia Energy Star

Doubletree Portland, Portland Energy Star

The Renaissance Tower, Sacramento Energy Star

US Bank Center, Seattle Energy Star

Wachovia Center, Tampa Energy Star

Perimeter Center, Richmond Energy Star

900 19th St. (Presidential Plaza), Washington, D.C. Energy Star

1201 F Street, Washington, D.C. Energy Star

1255 23rd Street (Floyd D. Akers Building), Washington, D.C. Energy Star

1717 Pennsylvania Avenue, Washington, D.C. Energy Star

1919 Pennsylvania Avenue, Washington, D.C. Energy Star

2550 M Street, Washington, D.C. Energy Star

International Square (3 buildings), Washington, D.C. Energy Star

GREEN KEY–CERTIFIED HOTELS Fairmont The Queen Elizabeth, Montréal 4 keys

Fairmont Le Château Frontenac, Québec 4 keys

Fairmont Château Laurier, Ottawa 4 keys

The Westin Ottawa, Ottawa 4 keys

Delta Toronto East, Toronto 4 keys

Hilton Toronto, Toronto 3 keys

The Fairmont Royal York, Toronto 4 keys

The Westin Harbour Castle, Toronto 4 keys

The Westin Calgary, Calgary 3 keys

The Westin Edmonton, Edmonton 4 keys

The Fairmont Winnipeg, Winnipeg 4 keys

The Fairmont Hotel Vancouver, Vancouver 4 keys

The Fairmont Waterfront, Vancouver 4 keys

The Westin Bayshore Vancouver, Vancouver 4 keys

The Fairmont Empress, Victoria 4 keys



Timeframe and scope of reportFor the fi rst time, this social responsibility report has been fully integrated into the SITQ activity report. It covers the period from January 1 to December 31, 2010.

The social responsibility report has been developed in accordance with the guidelines of the Global Reporting Initiative (GRI). It therefore reports on social, environmental and economic indicators put forward by the GRI, specifi cally 28 indicators related to profi le and strategy and 15 performance indicators in the following categories: economic (EC), environmental (EN), labour practices (LA) and society (SO).

Based on GRI guidelines, SITQ has achieved Level C with this fi rst-time application of this sustainability reporting standard.

Relevance We have examined all the indicators to determine their relevance to SITQ’s situation as well as their relevance to our real estate assets.

StakeholdersIn order to clearly understand the priorities and concerns of SITQ stakeholders, we have used a diagnostic tool prepared in 2008 by the Deloitte consulting fi rm, which interviewed all of the Company’s main stakeholders: employees, shareholders, business partners, tenants and other key groups.

While we were preparing this report, we also consulted with a number of stakeholders to fi nd out how they perceived SITQ’s activities and the content of the social responsibility report. In 2011, we hope to implement formal communication procedures to establish an ongoing dialogue with these stakeholders.

About the data in the environment sectionThe data pertaining to the environmental performance of our assets combines information from our properties under management with fi gures provided by our partners. The number of assets covered by the data is presented in each table. The quantitative data we received for our Hotels, Apartments and Retirement Housing portfolio applies to a limited number of properties, but we are determined to broaden the available documentation in this area in future.

For greenhouse gas (GHG) emissions, we followed the guidelines issued by the Real Property Association of Canada (REALpac). In other words, we have reported 100% of the emissions produced by our properties under management in Québec, for which we have operational control, as well as a proportional percentage, based on our equity ownership, of those produced by other properties. Category 1 and 2 emissions are included in the data, except in the case of Level 1 emissions related to transportation, given the lack of available information. Data is presented in tonnes or kilograms of CO2 equivalent. These fi gures have been calculated by Cofely, our energy management consultants for the properties under our management. For properties outside of Québec, the data has been compiled by Planetair, an organization specializing in GHG reporting, based on information submitted by SITQ partners. GHG emission factors have been derived from various sources, depending on the location of each property (i.e., GHG Protocol, eGRID, Environment Canada).

Energy consumption has also been reported proportionally to ownership interest, except for assets for which we fulfi ll a property management role. In cases where tenants administer their own energy invoices, the surfaces of the corresponding buildings have been omitted from the calculations.

Past fi gures related to the recycling of paper, paperboard, glass, plastic and metal in our properties have been adjusted since last year’s report.

For any questions or comments on the contents of this report, please write to [email protected].

58/

REPORT CONTEXT


AND PARAMETERS AND PARAMETERS AND PARAMETERS AND PARAMETERS AND PARAMETERS AND PARAMETERS AND PARAMETERS AND PARAMETERS AND PARAMETERS AND PARAMETERS AND PARAMETERS AND PARAMETERS AND PARAMETERS AND PARAMETERS AND PARAMETERS AND PARAMETERS AND PARAMETERS AND PARAMETERS AND PARAMETERS AND PARAMETERS AND PARAMETERS AND PARAMETERS AND PARAMETERS AND PARAMETERS AND PARAMETERS AND PARAMETERS AND PARAMETERS AND PARAMETERS AND PARAMETERS AND PARAMETERS AND PARAMETERS AND PARAMETERS AND PARAMETERS AND PARAMETERS AND PARAMETERS AND PARAMETERS AND PARAMETERS AND PARAMETERS AND PARAMETERS AND PARAMETERS AND PARAMETERS AND PARAMETERS AND PARAMETERS AND PARAMETERS AND PARAMETERS AND PARAMETERS AND PARAMETERS REPORT CONTEXT

AND PARAMETERS REPORT CONTEXT

REPORT CONTEXT AND PARAMETERS

/59

GRI INDICATOR

DESCRIPTION PAGES NOTES

STRATEGY AND PROFILE

1.1 Statement from senior decision-maker about the relevance of sustainability to the organization 3

2.1 Name of organization Profi le Profi le is on the inside front cover

2.2 Primary brands, products and/or services Profi le

2.3 Operational structure 61

2.4 Location of headquarters Inside back cover

2.5 Countries of operation Profi le

2.6 Nature of ownership and legal form Inside back cover

2.7 Markets served Profi le

2.8 Scale of organization Profi le, 1, 6, 7

2.9 Signifi cant changes during reporting period No substantial change

2.10 Awards received during reporting period 54, 55

3.1 Reporting period 58

3.2 Date of most recent previous report Published in April 2010

3.3 Reporting cycle Annual

3.4 Contact point for questions 58

3.5 Process for defi ning report content 58

3.6 Boundary of report 58

3.7 Limitations on report scope 58

3.8 Basis for reporting on joint ventures and subsidiaries 58

3.10 Explanation of any restatements 58

3.11 Signifi cant changes from previous reports 50, 58

3.12 GRI index 59

4.1 Governance structure of the organisation 34, 60, 61

4.2 Indicate whether the Chair of the Board is also an executive offi cer 60, 61

4.3 Number of independent administrators or non-executive members 60, 61

4.4 Mechanisms for shareholders and employees to provide recommendations 34

4.14 List of stakeholders engaged by the organization 58

4.15 Basis for identifi cation and selection of stakeholders 58

ECONOMIC EC1 Economic performance 1, 6, 7, 32

EC6 Market presence 32

ENVIRONMENTAL EN1 Materials 42 Paper and electronic equipment

EN3, EN4, EN7 Energy 41

EN8 Water 42

EN16, EN18 Emissions, effl uents and waste 41, 45

EN22 Waste and recycling 43Recycling is the only waste management method for which we have data for a signifi cant number of properties.

EN28 Compliance 34

LABOUR PRACTICES, SOCIAL RELATIONS AND DECENT WORK LA1 Employment 32, 33

LA7 Occupational health and safety 38

LA10 Training and education 37

SOCIETY SO5 Public policy 35


REPORT CONTEXT


Montreal Herald, Montréal

BOARD OF DIRECTORSWilliam R.C. TreshamPresident and Chief Executive Offi cerSITQ

Frédérick CastonguaySenior Investment Manager, Pension InvestmentsRio Tinto

Claude Caty Senior Manager, Investments La Fiducie globale des régimes de retraite de la Société de transport de Montréal

Claude Dalphond Corporate Director

Daniel FournierChairman of the Board, SITQExecutive Vice President, Real Estate President, Real Estate groupCaisse de dépôt et placement du Québec

Sylvain GareauVice PresidentDesjardins Group Pension Plan

Francine Harel-Giasson Corporate Director

Karen Lafl amme Senior Vice-President, Real EstateCaisse de dépôt et placement du Québec

Alain LapointeCorporate Director

Mario D. MorroniPresident and General Manager and Chairman of the BoardAssociation de bienfaisance et de retraite des policiers et policières de la Ville de Montréal

Jean Pinard Corporate Director

Michel Sanschagrin Corporate Director

Michel ToupinManaging DirectorFonds communs de placement des régimes de retraite de l’Université Laval


TABLE OF CONTENTSMessage from the President & CEO and Chairman of the Board /02

Financial profi le /06Offi ce /08Hotels, apartments and retirement housing /18Real estate investment funds /26Social responsibility report /30Economy and governance /32Employees /36Environment /40Community and knowledge /46Tenants /50Awards and certifi cations /54 Report context and parameters /58 Board of Directors and management team /60

PROFILESince 1984, SITQ has upheld a tradition of excellence that has made it a leader in the North American and Western European real estate industries. Founded by the Caisse de dépôt et placement du Québec with $9 million in invested capital, SITQ today holds a $17.6-billion portfolio. Assets include prestigious offi ce properties, business parks, hotels, apartment buildings and retirement residences in major cities in Canada, the United States, France, the United Kingdom and Germany, as well as interests in several real estate funds that invest in various markets around the world.

Backed by its expert team of 432 employees, the Company owes its success to its solid investment and asset management know-how, its proven insight into the real estate development sector and the rigour and quality of its property management.

SITQ’s Offi ce Division draws strength and stability from its shareholders, namely, the Caisse de dépôt et placement du Québec (which owns a 90.6% interest), the Desjardins Group Pension Plan, Alcan (Canada) Master Trust, the Association de bienfaisance et de retraite des policiers et policières de la Ville de Montréal, the Fonds commun de placement des régimes de retraite de l’Université Laval, the Régime de retraite de la Société de transport (1992) and the Régime de retraite de la Société de transport de Montréal (Syndicat de transport de Montréal-CSN). The Hotels, Apartments and Retirement Housing Division and the Real Estate Investment Funds Division are wholly owned by the Caisse.

SITQ has its head offi ce at the Centre CDP Capital in Montréal and two business offi ces in Calgary and Paris. It enjoys a Canada-wide presence through its interest in Bentall Kennedy. SITQ also has offi ces in Québec City (Canada), Brussels (Belgium), Luxembourg, New Delhi (India) and Ebene (Mauritius).

Eighth Avenue Place, Calgary

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EXECUTIVE OFFICERS1. William R.C. TreshamPresident and Chief Executive Offi cer

2. Adam AdamakakisExecutive Vice President, Eastern Region, Canada/U.S

3. Méka BrunelExecutive Vice President, Europe

4. Michel CyrSenior Vice President, Development

5. Denis EpohSenior Vice President, Investments

6. Rita-Rose GagnéSenior Vice President and General Counsel

7. Pierre LefebvreSenior Vice President, Human Resources and Shared Services

8. Marc LemaireSenior Vice President, Real Estate Investment Funds and Financing

9. Arthur LloydExecutive Vice President, Western Region, Canada/U.S.

10. Louiselle PaquinChief Financial Offi cer

11. Tony RoyVice President, Portfolio Management

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La Défense, Paris

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ACTIVITY REPORTAND SOCIAL RESPONSIBILITY REPORTAND SOCIAL RESPONSIBILITY REPORT

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ACTIVITY REPORTACTIVITY REPORTAND SOCIAL RESPONSIBILITY REPORT

ACTIVITY REPORT2010

AND SOCIAL RESPONSIBILITY REPORT2010

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SITQ.COM

HEAD OFFICECENTRE CDP CAPITAL 1001 Square-Victoria Street Montréal, Québec H2Z 2B1 514 287-1852 1 888 599-IMMO

EUROPESITQ SAS 30, avenue George V 75008 Paris, France (33) 1 56 69 25 30

SITQ PATRIMONIAL S.A. 125, avenue Louise Bruxelles, Belgique 1050 (32) 2 644-4165

EUROSITQ FINANCES S.A. 25A, boulevard Royal L-2449 Luxembourg Luxembourg (352) 27 62 06 93 41

CANADIAN OFFICES 4, Place Ville Marie

Suite 600 Montréal, Québec H3B 2E7 514 861-9393

1175-324 8th Avenue SW Calgary, Alberta T2P 2Z2 403 539-2229

ASIASITQ INDIA PRIVATE LIMITED D18, First Floor Defence Colony New Delhi 110 024 India (91) 11 4602 7344

SITQ MAURITIUS ADVISORYSERVICES IFS Court 28, Cybercity Ebene, Mauritius (230) 467 3000

Published by Communications, Public Affairs and MarketingSenior Vice Presidence – Human Resources and Shared Services

Writers: Sarah Marchand and Gary Lawrence

English translation: Shonda Secord

Graphic design and production: LXB Communication Marketing

Printing: L’Empreinte

© Copyright SITQ, 2011.

ISSN 1492-3041 (Activity report and Social responsibility report)

This document is also available online at sitq.com.

To obtain additional copies or share your comments regarding this document, please contact us at [email protected].

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