Crombie REIT announces second quarter 2009 results



    STELLARTON, NS, Aug. 6 /CNW/ - Crombie Real Estate Investment Trust
("Crombie") (TSX: CRR.UN) is pleased to report its results for the second
quarter ended June 30, 2009.

    
                                         Three months ended June 30,
                             ------------------------------------------------
                                                               Variance
    (In millions of dollars,                           ----------------------
     except per unit amounts)      2009        2008           $           %
    -------------------------------------------------------------------------
    FFO                         $18.717     $18.812     $(0.095)       (0.5)%
    Per Unit                      $0.35       $0.38      $(0.03)       (7.9)%
    FFO Payout ratio               65.7%       63.1%                   (2.6)%
    -------------------------------------------------------------------------
    AFFO                        $14.069     $11.916      $2.153        18.1%
    Per Unit                      $0.27       $0.24       $0.03        12.5%
    AFFO Payout ratio              87.4%       99.7%                   12.3%
    -------------------------------------------------------------------------


                                          Six months ended June 30,
                             ------------------------------------------------
                                                               Variance
                                                       ----------------------
    (In millions of dollars,
     except per unit amounts)      2009        2008           $           %
    -------------------------------------------------------------------------
    FFO                         $39.456     $32.651      $6.805        20.8%
    Per Unit                      $0.75       $0.71       $0.04         5.6%
    FFO Payout ratio               60.7%       63.5%                    2.8%
    -------------------------------------------------------------------------
    AFFO                        $30.095     $20.012     $10.083        50.4%
    Per Unit                      $0.57       $0.44       $0.13        29.5%
    AFFO Payout ratio              79.6%      103.7%                   24.1%
    -------------------------------------------------------------------------

    Funds from Operations (FFO) for the second quarter of 2009 decreased
slightly to $18.7 million ($0.35 per unit) from $18.8 million ($0.38 per unit)
in the second quarter of 2008. The decrease was due to increased general and
administrative expenses in the second quarter of 2009, offset by the portfolio
acquisition of 61 retail properties from subsidiaries of Empire Company
Limited (the "Portfolio Acquisition") in April 2008 and the addition of the
Saskatoon property acquisition in June 2008. FFO for the six months ended June
30, 2009 increased to $39.5 million ($0.75 per unit) from $32.7 million ($0.71
per unit) for the same period in 2008. The improvement was due to the
aforementioned acquisitions partially offset by higher general and
administrative expenses.
    Adjusted Funds from Operations (AFFO) for the second quarter of 2009 was
$14.1 million ($0.27 per unit) compared to $11.9 million ($0.24 per unit) for
the second quarter of 2008. AFFO for the six months ended June 30, 2009 was
$30.1 million ($0.57 per unit) compared to $20.0 million ($0.44 per unit) for
the same period in 2008. Growth in AFFO during the second quarter ended June
30, 2009 was primarily due to lower maintenance capital and leasing costs,
while AFFO growth for the six months ended June 30, 2009 was influenced by the
lower maintenance capital and leasing costs as well as the improved FFO
results. The six months ended June 30, 2009 AFFO payout ratio was 79.6% which
is favourable to the annual target payout ratio of 95% and the payout ratio of
103.7% for the same period in 2008.
    "I am pleased to see Crombie's stable operating performance during what
continues to be a challenging recession" stated Donald E. Clow, FCA, Crombie's
President and Chief Executive Officer.
    "Our strategy to focus on primarily grocery anchored retail properties, a
defensive asset class, has worked in our favour during these difficult times."
    Donald Clow continued, "The recent equity offering combined with the
syndication and extension of our term facility has strengthened our balance
sheet and provides Crombie with the capacity to consider acquisition
opportunities, should they arise."
    "On a personal note, I would like to recognize Stuart Blair on his
retirement and thank him for his successful career at Crombie REIT and its
predecessor companies. I look forward to the council and advice of our board
of trustees and leading our outstanding team of employees in the future."

    2009 Second Quarter Highlights

    - Crombie completed the syndication and extension of the 18-month Term
      Facility to May 2011.

    - Crombie completed a public offering of units for gross proceeds of
      $36.9 million and a private placement of Class B LP units for gross
      proceeds of $30 million on June 25, 2009.

    - Crombie completed leasing activity on approximately 67% of its 2009
      expiring leases as at June 30, 2009.

    - Occupancy for the properties was 94.1% at June 30, 2009 compared with
      94.2% at March 31, 2009.

    - Property revenue for the quarter ended June 30, 2009 increased by
      $3.6 million, or 7.6%, to $50.9 million compared to $47.3 million for
      the quarter ended June 30, 2008.

    - Same-asset NOI for the second quarter of 2009 of $22.2 million
      decreased by $0.4 million or 1.7%, compared to $22.6 million for the
      quarter ended June 30, 2008.

    - The FFO payout ratio for the six months ended June 30, 2009 was 60.7%
      which was favourable to the target annual payout ratio of 70% and
      favourable to the payout ratio of 63.5% for the same period in 2008.

    - The AFFO payout ratio for the six months ended June 30, 2009 was 79.6%
      which was favourable to the target annual AFFO payout ratio of 95% and
      was favourable to the payout ratio of 103.7% for the same period in
      2008.

    - Debt to gross book value decreased to 50.9% at June 30, 2009 compared
      to 54.8% at March 31, 2009.

    - Crombie's interest service coverage ratio for the first six months of
      2009 was 2.79 times EBITDA and debt service coverage ratio was 1.96
      times EBITDA, compared to 2.94 times EBITDA and 2.04 times EBITDA,
      respectively, for the same period in 2008.

    The table below presents a summary of the financial performance for the
quarter and six months ending June 30, 2009 compared to the same period in
fiscal 2008.

    -------------------------------------------------------------------------
                                  Three       Three         Six         Six
                                 months      months      months      months
    (In millions of dollars,      ended       ended       ended       ended
     except where otherwise     Jun. 30,    Jun. 30,    Jun. 30,    Jun. 30,
     noted)                        2009        2008        2009        2008
    -------------------------------------------------------------------------
    Property revenue            $50.893     $47.314    $103.885     $84.576
    Property expenses            17.258      16.775      37.229      32.087
    -------------------------------------------------------------------------
    Property NOI                 33.635      30.539      66.656      52.489
    -------------------------------------------------------------------------
    NOI margin percentage          66.1%       64.5%       64.2%       62.1%
    -------------------------------------------------------------------------
    Expenses:
      General and
       administrative             3.646       1.979       5.290       3.931
      Interest                   11.272       9.965      22.002      16.465
      Depreciation and
       amortization              10.803      10.757      23.294      18.752
    -------------------------------------------------------------------------
                                 25.721      22.701      50.586      39.148
    -------------------------------------------------------------------------
    Income from continuing
     operations before other
     items, income taxes
     and non-controlling
     interest                     7.914       7.838      16.070      13.341
    Other items                       -       0.097       0.092       0.097
    -------------------------------------------------------------------------
    Income from continuing
     operations before income
     taxes and non-controlling
     interest                     7.914       7.935      16.162      13.438
    Income taxes - Future             -       0.701       0.200       1.101
    -------------------------------------------------------------------------
    Income from continuing
     operations before
     non-controlling interest     7.914       7.234      15.962      12.337
    Income from discontinued
     operations                       -       0.136           -       0.399
    -------------------------------------------------------------------------
    Income before
     non-controlling interest     7.914       7.370      15.962      12.736
    Non-controlling interest      3.786       3.531       7.642       6.114
    -------------------------------------------------------------------------
    Net income                   $4.128      $3.839      $8.320      $6.622
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    -------------------------------------------------------------------------
    Basic and diluted net
     income per unit              $0.15       $0.15       $0.30       $0.28
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


    Property NOI

    Second quarter property NOI for 2009 increased to $33.6 million (10.1%
increase) from the same period in 2008 due to the Portfolio Acquisition and
the Saskatoon property acquisition completed since January 1, 2008. Overall
NOI margin increased to 64.2% for the first six months of 2009 from 62.1% for
the same period in 2008. Property NOI for the six months ended June 30, 2009
increased to $66.7 million (27.0% increase) from the same period in 2008 due
to the property acquisitions completed since January 1, 2008. Overall NOI
margin increased to 64.2% for the six months ended June 30, 2009 from 62.1%
for the same period in 2008.

    Same-Asset Property NOI

    -------------------------------------------------------------------------
                                  Three       Three         Six         Six
                                 months      months      months      months
                                  ended       ended       ended       ended
                                Jun. 30,    Jun. 30,    Jun. 30,    Jun. 30,
    (In millions of dollars)       2009        2008        2009        2008
    -------------------------------------------------------------------------
    Same-asset property
     revenue                    $36.207     $37.221     $74.254     $74.483
    Same-asset property
     expenses                    13.968      14.593      30.096      29.905
    -------------------------------------------------------------------------
    Same-asset property NOI     $22.239     $22.628     $44.158     $44.578
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Same-asset NOI margin %        61.4%       60.8%       59.5%       59.8%
    -------------------------------------------------------------------------

    Same-asset property revenue of $36.2 million in the second quarter of 2009
was 2.7% lower than the second quarter in 2008 due primarily to decreased
revenue from lower recoverable common area expenses and a one-time head lease
adjustment upon final release of the obligation governing the agreement
between ECL and Crombie for County Fair Mall in Summerside, Prince Edward
Island and Uptown Center in Fredericton, New Brunswick, partially offset by
the increased average rent per square foot. Same-asset property revenue for
the six months ended June 30, 2009 of $74.3 million was 0.3% lower than the
same period in 2008 due to the reduction in head lease revenue.
    Same-asset property expenses of $13.9 million in the second quarter of
2009 were 4.3% lower than the $14.6 million for the second quarter of 2008.
The decreased property expenses were due to decreased recoverable common area
expenses primarily from decreased snow removal costs. Same-asset property
expenses of $30.1 million for the six months ended June 30, 2009 were 0.6%
higher than the same period in 2008. The increased property expenses were due
to increased recoverable common area expenses primarily from increased utility
costs and property taxes.

    Acquisition Property NOI

    The Portfolio Acquisition and the Saskatoon property acquisition completed
since January 1, 2008 provided the following results:

    -------------------------------------------------------------------------
                                  Three       Three         Six         Six
                                 months      months      months      months
                                  ended       ended       ended       ended
                                Jun. 30,    Jun. 30,    Jun. 30,    Jun. 30,
    (In millions of dollars)       2009        2008        2009        2008
    -------------------------------------------------------------------------
    Acquisition property
     revenue                    $14.686     $10.093     $29.631     $10.093
    Acquisition property
     expense                      3.290       2.182       7.133       2.182
    -------------------------------------------------------------------------
    Acquisition property NOI    $11.396      $7.911     $22.498      $7.911
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Acquisition NOI margin %       77.6%       78.4%       75.9%       78.4%
    -------------------------------------------------------------------------

    General and Administrative Expenses

    General and administrative expenses increased by 84.2% during the second
quarter of 2009 to $3.6 million from $2.0 million in 2008 due to one time
retirement costs. General and administrative expenses increased by 34.6%
during the six months ended June 30, 2009 to $5.3 million from $3.9 million in
2008 again due to one time retirement costs as well as increased professional
fees and salaries and benefits costs, partially offset by reduced incentive
payments. General and administrative costs as a percentage of revenue have
increased to 7.2% in the second quarter of 2009 compared to 4.2% in 2008 and
increased to 5.1% for the six months ended June 30, 2009 compared to 4.6% in
2008.

    Interest

    -------------------------------------------------------------------------
                                  Three       Three         Six         Six
                                 months      months      months      months
                                  ended       ended       ended       ended
                                Jun. 30,    Jun. 30,    Jun. 30,    Jun. 30,
    (In millions of dollars)       2009        2008        2009        2008
    -------------------------------------------------------------------------
    Same-asset interest
     expense                     $6.592      $6.303     $13.354     $12.803
    Acquisition interest
     expense                      4.680       3.662       8.648       3.662
    -------------------------------------------------------------------------
    Interest expense            $11.272      $9.965     $22.002     $16.465
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    The increase in interest expense for the second quarter and the six months
ended June 30, 2009 was primarily due to the property acquisitions. Same-asset
interest expense was higher in the second quarter and the six months ended
June 30, 2009 compared to 2008 due to the amortization of payments made on
interest rate swap agreements during the year, offset in part by a decrease in
the floating interest rate on the revolving credit facility.

    Definition of Non-GAAP Measures

    Certain financial measures included in this news release do not have
standardized meaning under Canadian generally accepted accounting principles
and therefore may not be comparable to similarly titled measures used by other
publicly traded companies. Crombie includes these measures because it believes
certain investors use these measures as a means of assessing Crombie's
financial performance.

    - Property NOI is property revenue less property expenses.
    - Debt is defined as bank loans plus commercial property debt and
      convertible debentures.
    - Gross book value means, at any time, the book value of the assets of
      Crombie and its consolidated subsidiaries plus accumulated depreciation
      and amortization in respect of Crombie's properties (and related
      intangible assets) less (i) the amount of any receivable reflecting
      interest rate subsidies on any debt assumed by Crombie and (ii) the
      amount of future income tax liability arising out of the fair value
      adjustment in respect of the indirect acquisitions of certain
      properties.
    - FFO is calculated as net income (computed in accordance with GAAP),
      excluding gains (or losses) from sales of depreciable real estate and
      extraordinary items, plus depreciation and amortization, future income
      taxes and after adjustments for equity accounted entities and non-
      controlling interests.
    - AFFO is defined as FFO adjusted for non-cash amounts affecting revenue
      and discontinued operations, less maintenance capital expenditures and
      maintenance tenant improvements and lease costs.

    About Crombie

    Crombie is an open-ended real estate investment trust established under,
and governed by, the laws of the Province of Ontario. The trust invests in
income-producing retail, office and mixed-use properties in Canada, with a
future growth strategy focused primarily on the acquisition of retail
properties. Crombie currently owns a portfolio of 113 commercial properties in
seven provinces, comprising approximately 11.2 million square feet of rentable
space.

    This news release contains forward looking statements that reflect the
current expectations of management of Crombie about Crombie's future results,
performance, achievements, prospects and opportunities. Wherever possible,
words such as "may", "will", "estimate", "anticipate", "believe", "expect",
"intend" and similar expressions have been used to identify these forward
looking statements. These statements reflect current beliefs and are based on
information currently available to management of Crombie. Forward looking
statements necessarily involve known and unknown risks and uncertainties. A
number of factors, including those discussed in the 2008 annual Management
Discussion and Analysis under "Risk Management", could cause actual results,
performance, achievements, prospects or opportunities to differ materially
from the results discussed or implied in the forward looking statements. These
factors should be considered carefully and a reader should not place undue
reliance on the forward looking statements. There can be no assurance that the
expectations of management of Crombie will prove to be correct.
    In particular, certain statements in this document discuss Crombie's
anticipated outlook of future events. These statements include, but are not
limited to anticipated or target distributions and payout ratios, which could
be impacted by seasonality of capital expenditures, results of operations and
capital resource allocation decisions.
    Readers are cautioned that such forward-looking statements are subject to
certain risks and uncertainties that could cause actual results to differ
materially from these statements. Crombie can give no assurance that actual
results will be consistent with these forward-looking statements.

    Additional information relating to Crombie can be found on Crombie's web
site at www.crombiereit.com or on the SEDAR web site for Canadian regulatory
filings at www.sedar.com.

    Conference Call Invitation

    Crombie will provide additional details concerning its second quarter
results on a conference call to be held Thursday, August 6, 2009, at 5:00 PM
ADT. To join this conference call you may dial (416) 644-3432 or (800)
814-4857. You may also listen to a live audio web cast of the conference call
by visiting Crombie's website located at www.crombiereit.com. Replay will be
available until midnight August 20, 2009, by dialling (416) 640-1917 or (877)
289-8525 and entering pass code 21311250#, or on the Crombie website for 90
days after the meeting.



                     CROMBIE REAL ESTATE INVESTMENT TRUST
                  Interim Consolidated Financial Statements
                                  Unaudited
                                June 30, 2009



                     CROMBIE REAL ESTATE INVESTMENT TRUST
                         Consolidated Balance Sheets
                          (In thousands of dollars)
                                 (Unaudited)
    -------------------------------------------------------------------------


                                                      June 30,  December 31,
                                                         2009          2008
                                                -----------------------------
                                                                   Restated
    Assets                                                          (Note 3)
      Commercial properties (Note 4)               $1,307,934    $1,308,347
      Intangible assets (Note 5)                      118,416       131,403
      Notes receivable (Note 6)                         9,760        11,323
      Other assets (Note 7)                            27,310        20,934
      Cash and cash equivalents                             -         4,028
      Assets related to discontinued
       operations (Note 21)                             7,054         7,184
                                                -----------------------------
                                                   $1,470,474    $1,483,219
                                                -----------------------------
                                                -----------------------------

    Liabilities and Unitholders' Equity
      Commercial property debt (Note 8)              $759,223      $808,971
      Convertible debentures (Note 9)                  29,090        28,968
      Payables and accruals (Note 10)                  59,525        94,462
      Intangible liabilities (Note 11)                 36,771        41,061
      Employee future benefits obligation               6,165         4,836
      Distributions payable                             4,522         3,883
      Future income tax liability (Note 16)            80,000        79,800
      Liabilities related to discontinued
       operations (Note 21)                             6,411         6,517
                                                -----------------------------
                                                      981,707     1,068,498

    Non-controlling interest (Note 12)                233,292       199,163

    Unitholders' equity                               255,475       215,558
                                                -----------------------------
                                                   $1,470,474    $1,483,219
                                                -----------------------------
                                                -----------------------------

    Commitments and contingencies (Note 18)

    Subsequent event (Note 24)



                     CROMBIE REAL ESTATE INVESTMENT TRUST
                      Consolidated Statements of Income
             (In thousands of dollars, except per unit amounts)
                                 (Unaudited)
    -------------------------------------------------------------------------

                                  Three       Three         Six         Six
                                 Months      Months      Months      Months
                                  Ended       Ended       Ended       Ended
                                June 30,    June 30,    June 30,    June 30,
                                   2009        2008        2009        2008
                            -------------------------------------------------
                                           Restated                Restated
    Revenues                                (Note 3)                (Note 3)

      Property revenue
       (Note 14)                $50,893     $47,314    $103,885     $84,576
      Lease terminations              -          20          92          20
                            -------------------------------------------------
                                 50,893      47,334     103,977      84,596
                            -------------------------------------------------

    Expenses
      Property expenses          17,258      16,775      37,229      32,087
      General and
       administrative expenses    3,646       1,979       5,290       3,931
      Interest expense
       (Note 15)                 11,272       9,965      22,002      16,465
      Depreciation of
       commercial properties      5,027       4,418       9,827       7,821
      Amortization of tenant
       improvements/lease costs     892         700       2,023       1,468
      Amortization of
       intangible assets          4,884       5,639      11,444       9,463
                            -------------------------------------------------
                                 42,979      39,476      87,815      71,235
                            -------------------------------------------------

    Income from continuing
     operations before
     other items                  7,914       7,858      16,162      13,361

    Gain on disposal of land          -          77           -          77
                            -------------------------------------------------
    Income from continuing
     operations before income
     taxes and non-controlling
     interest                     7,914       7,935      16,162      13,438
    Income tax expense - Future
     (Note 16)                        -         701         200       1,101
                            -------------------------------------------------
    Income from continuing
     operations before
     non-controlling interest     7,914       7,234      15,962      12,337
    Income from discontinued
     operations (Note 21)             -         136           -         399
                            -------------------------------------------------
    Income before
     non-controlling interest     7,914       7,370      15,962      12,736
    Non-controlling interest      3,786       3,531       7,642       6,114
                            -------------------------------------------------
    Net income                   $4,128      $3,839      $8,320      $6,622
                            -------------------------------------------------
                            -------------------------------------------------

    Basic and diluted net
     income per unit
    Continuing operations         $0.15       $0.14       $0.30       $0.26

    Discontinued operations       $0.00       $0.01       $0.00       $0.02
                            -------------------------------------------------
    Net income                    $0.15       $0.15       $0.30       $0.28
                            -------------------------------------------------
                             ------------------------------------------------

    Weighted average number
     of units outstanding
      Basic                  27,465,211  25,909,792  27,307,174  23,726,866
                            -------------------------------------------------
                            -------------------------------------------------

      Diluted                27,625,880  26,028,526  27,449,862  23,838,755
                            -------------------------------------------------
                            -------------------------------------------------



                     CROMBIE REAL ESTATE INVESTMENT TRUST
               Consolidated Statements of Comprehensive Income
                          (In thousands of dollars)
                                 (Unaudited)
    -------------------------------------------------------------------------

                                  Three       Three         Six         Six
                                 Months      Months      Months      Months
                                  Ended       Ended       Ended       Ended
                                June 30,    June 30,    June 30,    June 30,
                                   2009        2008        2009        2008
                            -------------------------------------------------
    Net income                   $4,128      $3,839      $8,320      $6,622
                            -------------------------------------------------
      Losses on derivatives
       designated as cash
       flow hedges transferred
       to net income in the
       current year                 237           -         345           -
      Net change in derivatives
       designated as cash
       flow hedges                9,159       1,487       8,700      (2,807)
                            -------------------------------------------------

    Other comprehensive
     income (loss)                9,396       1,487       9,045      (2,807)
                            -------------------------------------------------
    Comprehensive  income       $13,524      $5,326     $17,365      $3,815
                            -------------------------------------------------
                            -------------------------------------------------



                     CROMBIE REAL ESTATE INVESTMENT TRUST
               Consolidated Statements of Unitholders' Equity
                          (In thousands of dollars)
                                 (Unaudited)
    -------------------------------------------------------------------------

                                               Accumu-
                                                lated
                                                Other
                                               Compre-
                                     Contri-  hensive
                 REIT       Net       buted    Income      Distri-
                Units    Income     Surplus     (Loss)    butions     Total
             ----------------------------------------------------------------
             (Note 13)

    Unit-
     holders'
     equity,
     January
     1,
     2009    $265,096   $34,652         $34  $(29,567)  $(54,635)  $215,580
    Adjust-
     ment
     due to
     change
     in
     accoun-
     ting
     policy
     (Note 3)       -       (22)          -         -           -       (22)
             ----------------------------------------------------------------
    Unit-
     holders'
     equity,
     January
     1, 2009
     as re-
     stated   265,096    34,630          34   (29,567)    (54,635)  215,558
    Units
     released
     under
     EUPP           8         -          (8)        -           -         -
    Units
     issued
     under
     EUPP         304         -           -         -           -       304
    Loans
     recei-
     vable
     under
     EUPP        (304)        -           -         -           -      (304)
    EUPP
     compen-
     sation         -         -          23         -           -        23
    Repayment
     of EUPP
     loans
     recei-
     vable         90         -           -         -           -        90
    Net income      -     8,320           -         -           -     8,320
    Distri-
     butions        -         -           -         -     (12,497)  (12,497)
    Other
     compre-
     hensive
     income         -         -           -     9,045           -     9,045
    Unit
     issue
     proceeds,
     net of
     costs of
     $1,919    34,936         -           -         -           -    34,936
             ----------------------------------------------------------------
    Unit-
     holders'
     equity,
     June 30,
     2009    $300,130   $42,950         $49  $(20,522)   $(67,132) $255,475
             ----------------------------------------------------------------
             ----------------------------------------------------------------


    Unit-
     holders'
     equity,
     January
     1,
     2008    $205,273   $20,064         $12   $(3,000)   $(31,515) $190,834
    Adjust-
     ment
     due to
     change
     in
     accoun-
     ting
     policy
     (Note 3)       -       (22)          -         -           -       (22)
             ----------------------------------------------------------------
    Unit-
    holders'
     equity,
     January
     1, 2008
     as re-
     stated  $205,273   $20,042         $12   $(3,000)   $(31,515) $190,812
    Units
     released
     under
     EUPP          20         -         (20)        -           -         -
    Units
     issued
     under
     EUPP         386         -           -         -           -       386
    Loans
     recei-
     vable
     under
     EUPP        (386)        -           -         -           -      (386)
    EUPP
     compen-
     sation         -         -          20         -           -        20
    Repay-
     ment of
     EUPP
     loans
     recei-
     vable        164         -           -         -           -       164
    Net
     income         -     6,622           -         -           -     6,622
    Distri-
     butions        -         -           -         -     (10,983)  (10,983)
    Other
     compre-
     hensive
     loss           -         -           -    (2,807)          -    (2,807)
    Unit
     issue
     proceeds,
     net of
     costs of
     $2,008    60,997         -           -         -           -    60,997
    Unit
     redemp-
     tion      (1,375)        -           -         -           -    (1,375)
             ----------------------------------------------------------------
    Unit-
     holders'
     equity,
     June 30,
     2008
     as re-
     stated  $265,079   $26,664         $12   $(5,807)   $(42,498) $243,450
             ----------------------------------------------------------------
             ----------------------------------------------------------------



                     CROMBIE REAL ESTATE INVESTMENT TRUST
                    Consolidated Statements of Cash Flows
                          (In thousands of dollars)
                                 (Unaudited)
    -------------------------------------------------------------------------

                                  Three       Three         Six         Six
                                 Months      Months      Months      Months
                                  Ended       Ended       Ended       Ended
                                June 30,    June 30,    June 30,    June 30,
                                   2009        2008        2009        2008
                            -------------------------------------------------
    Cash flows provided by                  Restated                Restated
    (used in)                                (Note 3)                (Note 3)

    Operating Activities
      Net income                 $4,128      $3,839      $8,320      $6,622
      Items not affecting cash:
        Non-controlling interest  3,786       3,531       7,642       6,114
        Depreciation of
         commercial properties    5,027       4,441       9,827       7,879
        Amortization of tenant
         improvements/lease costs   892         709       2,023       1,491
        Amortization of deferred
         financing costs            517         323         997         477
        Amortization of swap
         settlements                455           -         662           -
        Amortization of
         intangible assets        4,884       5,668      11,444       9,521
        Amortization of
         above-market leases        772         779       1,543       1,549
        Amortization of
         below-market leases     (2,145)     (1,819)     (4,290)     (3,009)
        Gain on sale of land          -         (77)          -         (77)
        Accrued rental revenue   (1,243)       (703)     (2,126)     (1,021)
        Unit based compensation      12          11          23          20
        Future income tax
         expense                      -         701         200       1,101
                            -------------------------------------------------
                                 17,085      17,403      36,265      30,667

    Additions to tenant
     improvements and lease
     costs                       (1,304)     (3,771)     (2,544)     (8,328)
    Change in other non-cash
     operating items (Note 17)   (9,369)      2,848     (16,645)       (224)
                            -------------------------------------------------
    Cash provided by operating
     activities                   6,412      16,480      17,076      22,115
                            -------------------------------------------------

    Financing Activities
    Issue of commercial
     property debt                1,312     350,575      58,312     350,575
    Increase in deferred
     financing charges           (1,785)     (3,653)     (2,342)     (3,592)
    Issue of convertible
     debentures                       -           -           -      30,000
    Issue costs of convertible
     debentures                       -           -           -      (1,214)
    Units issued                 66,855      63,005      66,855      63,005
    Units and Class B LP Units
     issue costs                 (2,281)     (3,790)     (2,281)     (3,790)
    Settlement of interest
     rate swap agreements             -           -      (4,535)          -
    Repayment of commercial
     property debt              (56,629)    (18,355)   (110,120)    (45,735)
    Decrease in liabilities
     related to discontinued
     operations                     (39)          -        (106)          -
    Collection of notes
     receivable                     777       3,002       1,563       4,416
    Repayment of EUPP loan
     receivable                      81         157          90         164
    Unit redemption                   -      (1,375)          -      (1,375)
    Payment of distributions    (11,655)    (10,952)    (23,304)    (19,819)
                            -------------------------------------------------
    Cash provided by (used in)
     financing activities        (3,364)    378,614     (15,868)    372,635
                            -------------------------------------------------

    Investing Activities
    Additions to commercial
     properties                  (3,192)     (5,803)     (4,922)     (7,515)
    Additions to recoverable
     capital expenditures           (96)        (73)       (408)       (725)
    Decrease in assets related
     to discontinued operations     108           -         130           -
    Proceeds on disposal of
     land, net of closing costs
     (Note 4)                         -         187           -         187
    Acquisition of commercial
     properties (Note 4)            (36)   (389,405)        (36)   (389,405)
                            -------------------------------------------------
    Cash used in investing
     activities                  (3,216)   (395,094)     (5,236)   (397,458)
                            -------------------------------------------------
    Decrease in cash and cash
     equivalents during the
     period                        (168)        Nil      (4,028)     (2,708)
    Cash and cash equivalents,
     beginning of period            168         Nil       4,028       2,708
                            -------------------------------------------------
    Cash and cash equivalents,
     end of period                 $Nil        $Nil        $Nil        $Nil
                            -------------------------------------------------
                            -------------------------------------------------
    See accompanying notes to the interim consolidated financial statements.



                     CROMBIE REAL ESTATE INVESTMENT TRUST
           Notes to the Interim Consolidated Financial Statements
             (In thousands of dollars, except per unit amounts)
                                  Unaudited
                                June 30, 2009
    -------------------------------------------------------------------------


    1) CROMBIE REAL ESTATE INVESTMENT TRUST

    Crombie Real Estate Investment Trust ("Crombie") is an unincorporated
"open-ended" real estate investment trust created pursuant to the Declaration
of Trust dated January 1, 2006, as amended. The units of Crombie are traded on
the Toronto Stock Exchange ("TSX") under the symbol "CRR.UN".

    2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

    (a) Basis of presentation

    These interim consolidated financial statements are prepared in accordance
with Canadian generally accepted accounting principles ("GAAP") as prescribed
by the Canadian Institute of Chartered Accountants ("CICA"). These interim
consolidated financial statements do not include all of the disclosures
included in Crombie's annual consolidated financial statements. Accordingly,
these interim consolidated financial statements should be read in conjunction
with the consolidated financial statements for the year ended December 31,
2008 as set out in the 2008 Annual Report.
    The accounting policies used in preparation of these interim consolidated
financial statements conform with those used in the 2008 annual consolidated
financial statements, except as described in Note 3.

    (b) Property acquisitions

    Upon acquisition of commercial properties, Crombie performs an assessment
of the fair value of the properties' related tangible and intangible assets
and liabilities (including land, buildings, origination costs, in-place
leases, above- and below-market leases, and any other assumed assets and
liabilities), and allocates the purchase price to the acquired assets and
liabilities. Crombie assesses and considers fair value based on cash flow
projections that take into account relevant discount and capitalization rates
and any other relevant sources of market information available. Estimates of
future cash flow are based on factors that include historical operating
results, if available, and anticipated trends, local markets and underlying
economic conditions.
    Crombie allocates the purchase price based on the following:

    Land - The amount allocated to land is based on an appraisal estimate of
    its fair value.

    Buildings - Buildings are recorded at the fair value of the building on
    an "as-if-vacant" basis, which is based on the present value of the
    anticipated net cash flow of the building from vacant start up to full
    occupancy.

    Origination costs for existing leases - Origination costs are determined
    based on estimates of the costs that would be incurred to put the
    existing leases in place under the same terms and conditions. These costs
    include leasing commissions as well as foregone rent and operating cost
    recoveries during an assumed lease-up period.

    In-place leases - In-place lease values are determined based on estimated
    costs required for each lease that represents the net operating income
    lost during an estimated lease-up period that would be required to
    replace the existing leases at the time of purchase.

    Tenant relationships - Tenant relationship values are determined based on
    costs avoided if the respective tenants were to renew their leases at the
    end of the existing term, adjusted for the estimated probability that the
    tenants will renew.

    Above- and below-market existing leases - Values ascribed to above- and
    below-market existing leases are determined based on the present value of
    the difference between the rents payable under the terms of the
    respective leases and estimated future market rents.

    Fair value of debt - Values ascribed to fair value of debt are determined
    based on the differential between contractual and market interest rates
    on long term liabilities assumed at acquisition.

    (c) Revenue recognition

    Property revenue includes rents earned from tenants under lease
agreements, percentage rent, realty tax and operating cost recoveries, and
other incidental income. Certain leases have rental payments that change over
their term due to changes in rates. Crombie records the rental revenue from
these leases on a straight-line basis over the term of the lease. Accordingly,
an accrued rent receivable/payable is recorded for the difference between the
straight-line rent recorded as property revenue and the rent that is
contractually due from the tenants. Percentage rents are recognized when
tenants are obligated to pay such rent under the terms of the related lease
agreements. The value of the differential between original and market rents
for existing leases is amortized using the straight-line method over the terms
of the tenant lease agreements. Realty tax and other operating cost
recoveries, and other incidental income, are recognized on an accrual basis.

    (d) Income taxes

    Crombie is taxed as a "mutual fund trust" for income tax purposes.
Pursuant to the terms of the Declaration of Trust, Crombie must make
distributions not less than the amount necessary to ensure that Crombie will
not be liable to pay income tax, except for the amounts incurred in its
incorporated subsidiaries.
    Future income tax liabilities of Crombie relate to tax and accounting
basis differences of all incorporated subsidiaries of Crombie. Income taxes
are accounted for using the liability method. Under this method, future income
taxes are recognized for the expected future tax consequences of differences
between the carrying amount of balance sheet items and their corresponding tax
values. Future income taxes are computed using substantively enacted corporate
income tax rates for the years in which tax and accounting basis differences
are expected to reverse.

    (e) Employee future benefits obligation

    The cost of pension benefits for the defined contribution plans is
expensed as contributions are paid. The cost of the defined benefit pension
plan and post-retirement benefit plan is accrued based on actuarial
valuations, which are determined using the projected benefit method pro-rated
on service and management's best estimate of the expected long-term rate of
return on plan assets, salary escalation, retirement ages and expected growth
rate of health care costs. The defined benefit plan and post-retirement
benefit plan are unfunded.
    The impact of changes in plan amendments is amortized on a straight-line
basis over the expected average remaining service life ("EARSL") of active
members. For the supplementary executive retirement plan, the impacts of
changes in the plan provisions are amortized over five years.

    (f) Use of estimates

    The preparation of consolidated financial statements in conformity with
GAAP requires management to make estimates and assumptions that affect the
reported amounts of assets and liabilities and disclosure of contingent assets
and liabilities at the date of the balance sheet, and the reported amounts of
revenue and expenses during the reporting period. Actual results could differ
from those estimates. The significant areas of estimation and assumption
include:

    - Impairment of assets;
    - Depreciation and amortization;
    - Employee future benefit obligation;
    - Future income taxes;
    - Allocation of purchase price on property acquisitions; and
    - Fair value of commercial property debt, convertible debentures and
      assets and liabilities related to discontinued operations.

    (g) Payment of distributions

    The determination to declare and make payable distributions from Crombie
are at the discretion of the Board of Trustees of Crombie and, until declared
payable by the Board of Trustees of Crombie, Crombie has no contractual
requirement to pay cash distributions to Unitholders' of Crombie. During the
six months ended June 30, 2009 $23,943 (six months ended June 30, 2008 - $
20,746) in cash distributions were declared payable by the Board of Trustees
to Crombie Unitholders and Crombie Limited Partnership Unitholders (the "Class
B LP Units").

    (h) Convertible debentures

    Debentures with conversion features are assessed at inception as to the
value of both their equity component and their debt component. Based on the
assessment, Crombie has determined to date that no amount should be attributed
to equity and thus its convertible debentures have been classified as
liabilities. Distributions to debenture holders are presented as interest
expense. Issue costs on convertible debentures are netted against the
convertible debentures and amortized over the original life of the convertible
debentures using the effective interest rate method.

    (i) Hedges

    Crombie has cash flow hedges which are used to manage exposures to
increases in variable interest rates. Cash flow hedges are recognized on the
balance sheet at fair value with the effective portion of the hedging
relationship recognized in other comprehensive income (loss). Any ineffective
portion of the cash flow hedge is recognized in net income. Amounts recognized
in accumulated other comprehensive income (loss) are reclassified to net
income in the same periods in which the hedged item is recognized in net
income. Fair value hedges and the related hedge items are recognized on the
balance sheet at fair value with any changes in fair value recognized in net
income. To the extent the fair value hedge is effective, the changes in the
fair value of the hedge and the hedged item will offset each other.
    Crombie has fixed interest rate swap agreements and a number of delayed
interest rate swap agreements designated as cash flow hedges. Crombie has
identified these hedges against increases in benchmark interest rates and has
formally documented all relationships between these derivative financial
instruments and hedged items, as well as the risk management strategy and
objectives. Crombie assesses on an ongoing basis whether the derivative
financial instrument continues to be effective in offsetting changes in
interest rates on the hedged items.

    (j) Comprehensive income

    Comprehensive income is the change in Unitholders' equity during a period
from transactions and other events and circumstances from non-owner sources.
Crombie reports a consolidated statement of comprehensive income, comprising
net income and other comprehensive income (loss) for the period. Accumulated
other comprehensive income (loss), has been added to the consolidated
statements of Unitholders' equity.

    (k) Discontinued operations

    Crombie classifies properties that meet certain criteria as held for sale
and separately discloses any net income and gain (loss) on disposal for
current and prior periods as discontinued operations. A property is classified
as held for sale at the point in time when it is available for immediate sale,
management has committed to a plan to sell the property and is actively
locating a purchaser for the property at a sales price that is reasonable in
relation to the current estimated fair market value of the property, and the
sale is expected to be completed within a one year period. Properties held for
sale are carried at the lower of their carrying values and estimated fair
value less costs to sell. In addition, assets held for sale are no longer
depreciated. A property that is subsequently reclassified as held in use is
measured at the lower of its carrying value amount before it was classed as
held for sale, adjusted for an amortization expense that would have been
recognized had it been continuously classified as held and in use, and its
estimated fair value at the date of the subsequent decision not to sell.

    (l) Impairment of long-lived assets

    Long-lived assets are reviewed for impairment annually or whenever events
or changes in circumstances indicate the carrying value of an asset may not be
recoverable.
    If it is determined that the net recoverable value of a long-lived asset
is less than its carrying value, the long-lived asset is written down to its
fair value. Net recoverable amount represents the undiscounted estimated
future cash flow expected to be received from the long-lived asset. Assets
reviewed under this policy include commercial properties and intangible
assets.

    3) CHANGES IN ACCOUNTING POLICIES

    Effective January 1, 2009 Crombie adopted two new accounting standards
that were issued by the CICA in 2008 and one Emerging Committee Abstract
issued by the CICA in January 2009. These accounting policy changes have been
adopted in accordance with the transitional provisions.
    The new standards and accounting policy changes are as follows:

    Goodwill and Intangible Assets

    Effective January 1, 2009, the accounting and disclosure requirements of
the CICA's two new accounting standards were adopted: "Handbook Section 3064,
Goodwill and Intangible Assets" and "Handbook Section 3450, Research and
Development Costs."
    These standards are effective for annual and interim financial statements
related to fiscal years beginning on or after October 1, 2008 and are
applicable for Crombie's first quarter of fiscal 2009. Section 3064 states
that intangible assets may be recognized as assets only if they meet the
definition of an intangible asset. Section 3064 also provides further
information on the recognition of internally generated intangible assets,
(including research and development).
    These standards have been applied retrospectively with restatement of
prior periods. The adoption of these new standards resulted in an increase of
$233 to depreciation of commercial properties and a decrease of $233 to
property expenses in the consolidated Statements of Income for the three
months ended June 30, 2008 and an increase of $462 to depreciation of
commercial properties and a decrease of $462 to property expenses for the six
months ended June 30, 2008. In the consolidated Balance Sheets, there was an
increase of $3,946 to commercial properties, an increase of $38 to
receivables, a decrease of $4,246 to prepaid expenses, and a decrease of $220
to payables and accruals at December 31, 2008, and a decrease of $20 to
non-controlling interest and a decrease of $22 to unitholders' equity at
January 1, 2008.

    Financial instruments - recognition and measurement

    In January 2009, the CICA issued Emerging Issue Committee Abstract 173
("EIC 173"), "Credit Risk and the Fair Value of Financial Assets and Financial
Liabilities". EIC 173 requires that a company take into account its own credit
risk and the credit risk of its counterparty in determining the fair value of
financial assets and financial liabilities. This Abstract must be applied
retrospectively without restatement of prior periods to all financial assets
and liabilities measured at fair value in interim and annual financial
statements for periods ending on or after January 20, 2009. The adoption of
EIC 173 did not have a significant impact on Crombie's financial results,
position or disclosures.

    Effect of new accounting standards not yet Implemented

    International Financial Reporting Standards

    On February 13 2008, the Accounting Standards Board of Canada announced
that GAAP for publicly accountable enterprises will be replaced by
International Financial Reporting Standards ("IFRS"). IFRS must be adopted for
interim and annual financial statements related to fiscal years beginning on
or after January 1, 2011, with retroactive adoption and restatement of the
comparative fiscal year ended December 31, 2010. Accordingly, the conversion
from Canadian GAAP to IFRS will be applicable to Crombie's reporting for the
first quarter of fiscal 2011 for which the current and comparative information
will be prepared under IFRS.
    Crombie, with the assistance of its external advisors, have launched an
internal initiative to govern the conversion process and is currently
evaluating the potential impact of the conversion to IFRS on its financial
statements. At this time, the impact on Crombie's future financial position
and results of operations is not reasonably determinable or estimatable.
Crombie expects the transition to IFRS to impact accounting, financial
reporting, internal control over financial reporting, information systems and
business processes.
    Crombie has developed a formal project governance structure, and is
providing regular progress reports to senior management and the audit
committee. Crombie has also completed a diagnostic impact assessment, which
involved a high level review of the major differences between current GAAP and
IFRS, as well as establishing an implementation guideline. In accordance with
this guideline Crombie has established a staff training program and is in the
process of completing analysis of the key decision areas and making
recommendations on the same.
    Crombie will continue to assess the impact of the transition to IFRS and
to review all of the proposed and ongoing projects of the International
Accounting Standards Board to determine their impact on Crombie. Additionally,
Crombie will continue to invest in training and resources throughout the
transition period to facilitate a timely conversion.
    In order to assist Crombie with its transition to IFRS the Unitholders
approved amendments to Crombie's Declaration of Trust, at Crombie's Annual
General and Special Meeting held on May 7, 2009, to allow the Trustees to make
future amendments to the Declaration of Trust without the requirement to
obtain Unitholder approval. These changes are in the same manner as the
Declaration of Trust currently permits Trustees to act as it relates to the
changes in taxation laws.
    An example of a potential change to the Declaration of Trust in order to
comply with IFRS standards as they are currently drafted include the fact that
Crombie's units may be regarded under IFRS as a "liability" rather than
"equity" (as they are currently recognized under Canadian GAAP). This
interpretation is influenced principally by the requirement in the Declaration
of Trust that Crombie "shall" distribute in each year an amount at least equal
to its taxable income. Under IFRS, the units would be classified as a
liability if they contain "a contractual obligation to deliver cash or another
financial asset to another entity".
    The amendments will not result in any material change to the Unitholders,
but rather were contemplated in order to assist Crombie to implement changes
that will assist in its transition to IFRS. Trustees will be obligated to
determine whether any such change is necessary or desirable in the
circumstances, and all other matters that are currently required to be
approved by Unitholders pursuant to the Declaration of Trust will remain
unchanged.

    4) COMMERCIAL PROPERTIES

                                                 June 30, 2009
                                   ------------------------------------------
                                                  Accumulated      Net Book
                                           Cost  Depreciation         Value
                                   ------------------------------------------
    Land                               $292,129          $Nil      $292,129
    Buildings                         1,041,222        49,059       992,163
    Tenant improvements and
     leasing costs                       32,298         8,656        23,642
                                   ------------------------------------------
                                     $1,365,649       $57,715    $1,307,934
                                   ------------------------------------------
                                   ------------------------------------------


                                                December 31, 2008
                                   ------------------------------------------
                                                  Accumulated      Net Book
                                           Cost  Depreciation         Value
                                   ------------------------------------------
                                       Restated      Restated      Restated
                                        (Note 3)      (Note 3)      (Note 3)
    Land                               $288,566          $Nil      $288,566
    Buildings                         1,035,892        39,232       996,660
    Tenant improvements and
     leasing costs                       29,754         6,633        23,121
                                   ------------------------------------------
                                     $1,354,212       $45,865    $1,308,347
                                   ------------------------------------------
                                   ------------------------------------------

    Property Acquisitions and Disposals

    The operating results of the acquired properties are included from the
respective date of acquisition.

    2009
    ----
    On June 1, 2009, Crombie acquired 1.1 acres of land adjacent to the Avalon
Mall, Newfoundland and Labrador, for $3,527 plus additional closing costs from
ECL General Partner Limited, an affiliate of Empire Company Limited. Currently
there is a vacant building on the property, which subsequent to quarter end
has been leased for a one year period while management assesses the future
development of this site. The acquisition was financed with debt of $3,527 at
a fixed rate of 8.00% and a term of 20 years with ECL General Partner Limited
and is held as security.

    2008
    ----
    On April 22, 2008, Crombie acquired 61 properties in Atlantic Canada,
Quebec and Ontario from subsidiaries of Empire Company Limited, representing a
3,288,000 square foot increase to the portfolio, for $428,500 plus additional
closing costs. The acquisition was financed through a $280,000 term facility,
the issuance of $30,000 convertible debentures, the issuance of $55,000 of
Class B LP units of Crombie Limited Partnership to affiliates of Empire, the
issuance of $63,005 of REIT units (5,727,750 units at a price of $11.00 per
unit), and a draw on Crombie's revolving credit facility.
    On May 21, 2008, land attached to a commercial property was sold to an
unrelated third party for cash proceeds of $187, net of closing costs,
resulting in a gain of $77.
    On June 12, 2008, Crombie acquired a property in Saskatoon, Saskatchewan,
representing a 160,000 square foot increase to the portfolio, for $27,200 plus
additional closing costs, from an unrelated third party. The acquisition was
financed through an assumption of an existing mortgage of $16,517 at a fixed
rate of 5.35% and a term of three years with the balance of the purchase price
paid using funds from the revolving credit facility.
    The allocation of the total cost of the acquisitions is as follows:

                                  Three       Three         Six         Six
                                 Months      Months      Months      Months
                                  Ended       Ended       Ended       Ended
    Commercial property         June 30,    June 30,    June 30,    June 30,
     acquired, net:                2009        2008        2009        2008
    -------------------------------------------------------------------------
    Land                         $3,563    $107,826      $3,563    $107,826
    Buildings                         -     287,154           -     287,154
    Intangible assets:
      Lease origination costs         -      40,233           -      40,233
      Tenant relationships            -      21,622           -      21,622
      Above-market leases             -         370           -         370
      In-place leases                 -      35,384           -      35,384
    Intangible liabilities:
      Below-market leases             -     (31,848)          -     (31,848)
    -------------------------------------------------------------------------
    Net purchase price            3,563     460,741       3,563     460,741
    Assumed mortgages            (3,527)    (16,517)     (3,527)    (16,517)
    Fair value debt adjustment
     on assumed mortgages             -         181           -         181
    -------------------------------------------------------------------------
                                    $36    $444,405         $36    $444,405
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Consideration  funded by:
    Revolving credit facility       $36     $16,000         $36     $16,000
    Term facility                     -     280,000           -     280,000
    Units                             -      63,005           -      63,005
    Convertible debentures            -      30,000           -      30,000
    Application of deposit            -         400           -         400
    -------------------------------------------------------------------------
    Cash paid                        36     389,405          36     389,405
    Class B LP Units (non-
     controlling interest) paid       -      55,000           -      55,000
    -------------------------------------------------------------------------
    Total consideration paid        $36    $444,405         $36    $444,405
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


    5) INTANGIBLE ASSETS

                                                 June 30, 2009
                                   ------------------------------------------
                                                  Accumulated      Net Book
                                           Cost  Amortization         Value
                                   ------------------------------------------
    Origination costs for
     existing leases                    $54,419       $14,706       $39,713
    In-place leases                      57,376        23,268        34,108
    Tenant relationships                 57,098        18,968        38,130
    Above-market existing leases         16,015         9,550         6,465
                                   ------------------------------------------
                                       $184,908       $66,492      $118,416
                                   ------------------------------------------
                                   ------------------------------------------


                                                December 31, 2008
                                   ------------------------------------------
                                                  Accumulated      Net Book
                                           Cost  Amortization         Value
                                   ------------------------------------------
    Origination costs for
     existing leases                    $54,419       $11,680       $42,739
    In-place leases                      57,376        19,072        38,304
    Tenant relationships                 57,098        14,746        42,352
    Above-market existing leases         16,015         8,007         8,008
                                   ------------------------------------------
                                   ------------------------------------------
                                       $184,908       $53,505      $131,403
                                   ------------------------------------------
                                   ------------------------------------------


    6) NOTES RECEIVABLE

    On March 23, 2006, Crombie acquired 44 properties from Empire Company
Limited's subsidiary, ECL Properties Limited ("ECL") and certain affiliates,
resulting in ECL Developments Limited issuing two demand non-interest bearing
promissory notes in the amounts of $39,600 and $20,564. Payments on the first
note of $39,600 are being received as funding is required for a capital
expenditure program relating to eight commercial properties over the period
from 2006 to 2010. Payments on the second note of $20,564 are being received
on a monthly basis to reduce the effective interest rate to 5.54% on certain
assumed mortgages with an average term to maturity of approximately 2.75
years.

    The balance of each note is
     as follows:
                                                      June 30,  December 31,
                                                         2009          2008
                                   ------------------------------------------
    Capital expenditure program                          $504          $505
    Interest rate subsidy                               9,256        10,818
                                   ------------------------------------------
                                                       $9,760       $11,323
                                   ------------------------------------------
                                   ------------------------------------------


    7) OTHER ASSETS
                                                      June 30,  December 31,
                                                         2009          2008
                                   ------------------------------------------
                                                                   Restated
                                                                    (Note 3)
    Gross accounts receivable                          $7,644        $7,286
    Provision for doubtful
     accounts                                            (269)         (250)
                                   ------------------------------------------
    Net accounts receivable                             7,375         7,036
    Accrued straight-line rent
     receivable                                         9,912         7,786
    Prepaid expenses                                    9,276         5,174
    Restricted cash                                       747           938
                                   ------------------------------------------
                                                      $27,310       $20,934
                                   ------------------------------------------
                                   ------------------------------------------


    8) COMMERCIAL PROPERTY DEBT
                                           Weighted    Weighted
                                            average     average
                                           interest     term to     June 30,
                                  Range        rate    maturity        2009
                            -------------------------------------------------
    Fixed rate mortgages      4.82-6.44%       5.48%  5.8 years    $564,101
    Floating rate term
     facility                                  3.96%  1.9 years     139,000
    Floating rate revolving
     credit facility                           2.03%  2.0 years      62,812
    Floating rate demand
     credit facility                            Nil      Demand           -
    Deferred financing
     charges                                                         (6,690)
                                                                -------------
                                                                   $759,223
                                                                -------------
                                                                -------------


                                           Weighted    Weighted
                                            average     average    December
                                           interest     term to          31,
                                  Range        rate    maturity        2008
                            -------------------------------------------------
    Fixed rate mortgages      5.15-6.44%       5.55%  6.1 years    $531,970
    Floating rate term
     facility                                  4.87%  0.8 years     178,824
    Floating rate revolving
     credit facility                           4.37%  2.5 years      93,400
    Floating rate demand
     credit facility                           3.50%     Demand      10,000
    Deferred financing charges                                       (5,223)
                                                                -------------
                                                                   $808,971
                                                                -------------
                                                                -------------

    As June 30, 2009, debt retirements for the next 5 years are:

                                  Fixed    Floating   Financing
                                   Rate        Rate       Costs       Total
                            -------------------------------------------------
    Remaining 2009               $9,513        $Nil        $Nil      $9,513
    2010                        121,568           -           -     121,568
    2011                         42,180     201,812           -     243,992
    2012                         15,956           -           -      15,956
    2013                         46,798           -           -      46,798
    Thereafter                  318,730           -           -     318,730
                            -------------------------------------------------
                                554,745     201,812           -     756,557
    Deferred financing
     charges                          -           -      (6,690)     (6,690)
    Fair value debt
     adjustment                   9,356           -           -       9,356
                            -------------------------------------------------
                               $564,101    $201,812     $(6,690)   $759,223
                            -------------------------------------------------
                            -------------------------------------------------

    On June 1, 2009, Crombie acquired 1.1 acres of land adjacent to the Avalon
Mall, Newfoundland and Labrador, for $3,527 plus additional closing costs,
from ECL General Partner Limited, an affiliate of Empire Company Limited. The
acquisition was financed with debt of $3,527 at a fixed rate of 8.00% and a
term of 20 years with ECL General Partner Limited and is held as security.
    The floating rate term facility is used to partially finance the
acquisition of 61 properties from subsidiaries of Empire Company Limited. On
February 12, 2009, Crombie completed mortgage financings of $39,000 to
refinance a portion of the floating rate term facility. Fixed rate first
mortgages were placed with a third party for a total of $32,800. The first
mortgages have a weighted average interest rate of 4.88% with a maturity date
of March 2014. In addition, $6,200 of fixed rate second mortgages were
provided by Empire Company Limited. The second mortgages have a weighted
average interest rate of 5.38% with a maturity date of March 2014. On June 4,
2009, Crombie completed the syndication of the floating rate term facility and
extended the maturity date to May 2011. The floating interest rate is based on
a specific margin over prime rate or the Banker Acceptance Rate. It is secured
by a charge on the secured properties, together with an assignment of leases.
The floating rate term facility contains financial and non-financial covenants
that are customary for a credit facility of this nature and which mirror the
covenants set forth in the floating rate revolving credit facility.
    The floating rate revolving credit facility has a maximum principal amount
of $150,000 and is used by Crombie for working capital purposes. It is secured
by a pool of first and second mortgages and negative pledges on certain
properties. The floating interest rate is based on specific margins over prime
rate or bankers acceptance rates. The specified margin increases as Crombie's
overall debt leverage increases.
    The floating rate demand credit facility is a $13,800 credit facility with
Empire Company Limited on substantially the same terms and conditions that
govern the floating rate revolving credit facility. As at June 30, 2009,
Crombie had $Nil drawn against the floating rate revolving credit facility
(December 31, 2008 - $10,000).

    9) CONVERTIBLE DEBENTURES
                                                           June    December
                               Maturity    Interest          30,         31,
                                   date        rate        2009        2008
                            -------------------------------------------------
    Series A             March 20, 2013         7.0%    $30,000     $30,000
    Transaction costs                                      (910)     (1,032)
                                                     ------------------------
                                                        $29,090     $28,968
                                                     ------------------------
                                                     ------------------------

    10) PAYABLES AND ACCRUALS
                                                      June 30,  December 31,
                                                         2009          2008
                                                -----------------------------
                                                                   Restated
                                                                    (Note 3)
    Tenant improvements and capital expenditures      $11,612       $13,384
    Property operating costs                           11,456        20,166
    Advance rents                                       2,035         5,364
    Interest on commercial property debt and
     debentures                                         2,591         2,504
    Fair value of interest rate swap agreements        31,831        53,044
                                                -----------------------------
                                                      $59,525       $94,462
                                                -----------------------------
                                                -----------------------------

    11) INTANGIBLE LIABILITIES

                                                June 30, 2009
                                   ------------------------------------------
                                                  Accumulated           Net
                                           Cost  Amortization    Book Value
                                   ------------------------------------------
    Below-market existing leases        $55,703       $18,932       $36,771
                                   ------------------------------------------
                                   ------------------------------------------


                                            December 31, 2008
                                   ------------------------------------------
                                                  Accumulated           Net
                                           Cost  Amortization    Book Value
                                   ------------------------------------------
    Below-market existing leases        $55,703       $14,642       $41,061
                                   ------------------------------------------
                                   ------------------------------------------


    12) NON-CONTROLLING INTEREST

                                               Accumu-
                                                lated
                                                Other
                                               Compre-
                                     Contri-  hensive
              Class B       Net       buted    Income      Distri-
             LP Units    Income     Surplus     (Loss)    butions     Total
            -----------------------------------------------------------------
    Balance,
     January
     1,
     2009    $244,520   $32,118        $Nil  $(27,254)   $(50,201) $199,183
    Adjust-
     ment
     due to
     change
     in
     accoun-
     ting
     policy
     (Note 3)       -       (20)          -         -           -       (20)
            -----------------------------------------------------------------
    Balance,
     January
     1,
     2009
     as re-
     stated   244,520    32,098         Nil   (27,254)    (50,201)  199,163
    Net
     income         -     7,642           -         -           -     7,642
    Distri-
     butions        -         -           -         -     (11,446)  (11,446)
    Other
     compre-
     hensive
     income         -         -           -     8,295           -     8,295
    Class B
     LP Unit
     issue
     proceeds,
     net of
     costs of
     $362      29,638         -           -         -           -    29,638
            -----------------------------------------------------------------
    Balance,
     June 30,
     2009    $274,158   $39,740        $Nil  $(18,959)   $(61,647) $233,292
            -----------------------------------------------------------------
            -----------------------------------------------------------------


                                               Accumu-
                                                lated
                                                Other
                                               Compre-
                                     Contri-  hensive
              Class B       Net       buted    Income      Distri-
             LP Units    Income     Surplus     (Loss)    butions     Total
            -----------------------------------------------------------------
    Balance,
     January
     1,
     2008    $191,302   $18,678        $Nil   $(2,784)   $(29,277) $177,919
    Adjust-
     ment
     due to
     change
     in
     accoun-
     ting
     policy
     (Note 3)       -       (20)          -         -           -       (20)
            -----------------------------------------------------------------
    Balance,
     January
     1,
     2008
     as re-
     stated   191,302    18,658         Nil    (2,784)    (29,277)  177,899
    Net
     income         -     6,114           -         -           -     6,114
    Distri-
     butions        -         -           -         -      (9,763)   (9,763)
    Other
     compre-
     hensive
     income
     (loss)         -         -           -    (2,617)          -    (2,617)
    Class B
     LP Unit
     issue
     proceeds,
     net of
     costs of
     $1,782    53,218         -           -         -           -    53,218
            -----------------------------------------------------------------
    Balance,
     June 30,
     2008
     as re-
     stated  $244,520   $24,772        $Nil   $(5,401)   $(39,040) $224,851
            -----------------------------------------------------------------
            -----------------------------------------------------------------


    13) UNITS OUTSTANDING

                                 Crombie REIT Special
                                   Voting Units and
             Crombie REIT Units    Class B LP Units             Total
            --------------------  ---------------------  --------------------
               Number                Number                Number
             of Units    Amount    of Units    Amount    of Units    Amount
            -----------------------------------------------------------------
    Balance,
     Janu-
     ary
     1,
     2009  27,271,888  $265,096  25,079,576  $244,520  52,351,464  $509,616
    Unit
     issue
     pro-
     ceeds,
     net of
     costs  4,725,000    34,936   3,846,154    29,638   8,571,154    64,574
    Units
     issued
     under
     EUPP      43,408       304           -         -      43,408       304
    Units
     released
     under
     EUPP           -         8           -         -           -         8
    Net
     change
     in EUPP
     loans
     recei-
     vable          -      (214)          -         -           -      (214)
            -----------------------------------------------------------------
    Balance,
     June
     30,
     2009  32,040,296  $300,130  28,925,730  $274,158  60,966,026  $574,288
            -----------------------------------------------------------------
            -----------------------------------------------------------------


                                 Crombie REIT Special
                                   Voting Units and
             Crombie REIT Units    Class B LP Units             Total
            --------------------  ---------------------  --------------------
               Number                Number                Number
             of Units    Amount    of Units    Amount    of Units    Amount
            -----------------------------------------------------------------
    Balance,
     January
     1,
     2008  21,648,985  $205,273  20,079,576  $191,302  41,728,561  $396,575
    Unit
     issue
     pro-
     ceeds,
     net of
     costs  5,727,750    60,997   5,000,000    53,218  10,727,750   114,215
    Units
     issued
     under
     EUPP      34,053       386           -         -      34,053       386
    Units
     re-
     leased
     under
     EUPP           -        20           -         -           -        20
    Net
     change
     in
     EUPP
     loans
     receiva-
     ble            -      (222)          -         -           -      (222)
    Unit
     redemp-
     tion    (138,900)   (1,375)          -         -    (138,900)   (1,375)
            -----------------------------------------------------------------
    Balance,
     June
     30,
     2008  27,271,888  $265,079  25,079,576  $244,520  52,351,464  $509,599
            -----------------------------------------------------------------
            -----------------------------------------------------------------


    Crombie REIT Units

    On June 25, 2009, Crombie closed a public offering, on a bought deal
basis, of 4,725,000 Units, after full exercise of the underwriters'
over-allotment option, to the public at a price of $7.80 per Unit for proceeds
of $34,936 net of issue costs.
    Crombie is authorized to issue an unlimited number of units ("Units") and
an unlimited number of Special Voting Units. Issued and outstanding Units may
be subdivided or consolidated from time to time by the Trustees without the
approval of the Unitholders. Units are redeemable at any time on demand by the
holders at a price per Unit equal to the lesser of: (i) 90% of the weighted
average price per Crombie Unit during the period of the last ten days during
which Crombie's Units traded; and (ii) an amount equal to the price of
Crombie's Units on the date of redemption, as defined in the Declaration of
Trust.
    The aggregate redemption price payable by Crombie in respect of any Units
surrendered for redemption during any calendar month will be satisfied by way
of a cash payment in Canadian dollars within 30 days after the end of the
calendar month in which the Units were tendered for redemption, provided that
the entitlement of Unitholders to receive cash upon the redemption of their
Units is subject to the limitation that:

      i. the total amount payable by Crombie in respect of such Units and all
         other Units tendered for redemption, in the same calendar month must
         not exceed $50 (provided that such limitation may be waived at the
         discretion of the Trustees);

    ii.  at the time such Units are tendered for redemption, the outstanding
         Units must be listed for trading on the TSX or traded or quoted on
         any other stock exchange or market which the Trustees consider, in
         their sole discretion, provides representative fair market value
         prices for the Units;

    iii. the normal trading of Units is not suspended or halted on any stock
         exchange on which the Units are listed (or if not listed on a stock
         exchange, in any market where the Units are quoted for trading) on
         the Redemption Date or for more than five trading days during the
         ten-day trading period commencing immediately after the Redemption
         Date.

    Crombie REIT Special Voting Units and Class B LP Units

    On June 25, 2009, concurrently with the issuance of the Units, in
satisfaction of its pre-emptive right, ECL Developments Limited purchased
3,846,154 Class B LP Units and the attached Special Voting Units at a price of
$7.80 per Class B LP Unit for proceeds of $29,638 net of issue costs, on a
private placement basis.
    The Declaration of Trust and the Exchange Agreement provide for the
issuance of voting non-participating Units (the "Special Voting Units") to the
holders of Class B LP Units used solely for providing voting rights
proportionate to the votes of Crombie's Units. The Special Voting Units are
not transferable separately from the Class B LP Units to which they are
attached and will be automatically transferred upon the transfer of such Class
B LP Unit. If the Class B LP Units are exchanged in accordance with the
Exchange Agreement, a like number of Special Voting Units will be redeemed and
cancelled for no consideration by Crombie.
    The Class B LP Units issued by a subsidiary of Crombie to ECL Developments
Limited have economic and voting rights equivalent, in all material aspects,
to Crombie's Units. They are indirectly exchangeable on a one-for-one basis
for Crombie's Units at the option of the holder, under the terms of the
Exchange Agreement.
    Each Class B LP Unit entitles the holder to receive distributions from
Crombie, pro rata with distributions made by Crombie on Units.
    The Class B LP Units are accounted for as non-controlling interest.

    Employee Unit Purchase Plan ("EUPP")

    Crombie provides for unit purchase entitlements under the EUPP for certain
senior executives. Awards made under the EUPP will allow executives to
purchase units from treasury at the average daily high and low board lot
trading prices per unit on the TSX for the five trading days preceding the
issuance. Executives are provided non-recourse loans at 3% annual interest by
Crombie for the purpose of acquiring Units from treasury and the Units
purchased are held as collateral for the loan. The loan is repaid through the
application of the after-tax amounts of all distributions received on the
Units, as well as the after-tax portion of any Long-Term Incentive Plan
("LTIP") cash awards received, as payments on interest and principal. As at
June 30, 2009, there are loans receivable from executives of $1,505 under
Crombie's EUPP, representing 161,482 Units, which are classified as a
reduction of Unitholders' Equity. Loan repayments will result in a
corresponding increase in Unitholders' Equity. Market value of the Units at
June 30, 2009 was $1,316.

    Earnings per Unit Computations

    Basic net earnings per Unit is computed by dividing net earnings by the
weighted average number of Units outstanding during the period. Diluted
earnings per Unit is calculated on the assumption that all EUPP loans were
repaid at the beginning of the period. For all periods, the assumed exchange
of all Class B LP Units would not be dilutive. The convertible debentures are
anti-dilutive and have not been included in diluted net earnings per unit or
diluted weighted average number of units outstanding. As at June 30, 2009,
there are no other dilutive items.

    14) PROPERTY REVENUE

                                  Three       Three         Six         Six
                                 months      months      months      months
                                  ended       ended       ended       ended
                                June 30,    June 30,    June 30,    June 30,
                                   2009        2008        2009        2008
                            -------------------------------------------------
    Rental revenue
     contractually due from
     tenants                    $48,277     $45,561     $99,012     $82,073
    Straight-line rent
     recognition                  1,243         701       2,126       1,018
    Below-market lease
     amortization                 2,145       1,814       4,290       3,000
    Above-market lease
     amortization                  (772)       (762)     (1,543)     (1,515)
                            -------------------------------------------------
                                $50,893     $47,314    $103,885     $84,576
                            -------------------------------------------------
                            -------------------------------------------------

    15) INTEREST

                                  Three       Three         Six         Six
                                 months      months      months      months
                                  ended       ended       ended       ended
                                June 30,    June 30,    June 30,    June 30,
                                   2009        2008        2009        2008
                            -------------------------------------------------
    Fixed rate mortgages         $8,921      $5,763     $17,073     $11,338
    Floating rate term,
     revolving and demand
     facilities                   1,819       3,678       3,879       4,540
    Convertible debentures          532         524       1,050         587
                            -------------------------------------------------
    Interest expense             11,272       9,965      22,002      16,465
    Amortization of fair
     value debt adjustment          778         871       1,564       1,737
    Interest paid on
     discontinued operations          -          89           -         178
    Change in accrued interest      557          58         (86)       (162)
    Amortization of hedges         (455)          -        (662)          -
    Amortization of deferred
     financing charges             (517)       (323)       (997)       (477)
                            -------------------------------------------------
    Interest paid               $11,635     $10,660     $21,821     $17,741
                            -------------------------------------------------
                            -------------------------------------------------


    16) FUTURE INCOME TAXES

    On September 22, 2007, tax legislation Bill C-52, the Budget
Implementation Act, 2007 (the "Act") was passed into law. The Act related to
the federal income taxation of publicly traded income trusts and partnerships.
The Act subjects all existing income trusts, or specified investment
flow-through entities ("SIFTs"), to corporate tax rates beginning in 2011,
subject to an exemption for real estate investment trusts ("REITs"). A trust
that satisfies the criteria of a REIT throughout its taxation year will not be
subject to income tax in respect of distributions to its unitholders or be
subject to the restrictions on its growth that would apply to SIFTs.
    Crombie's management and their advisors have completed an extensive review
of Crombie's organizational structure and operations to support Crombie's
assertion that it meets the REIT technical tests contained in the Act. The
relevant tests apply throughout the taxation year of Crombie and, as such, the
actual status of Crombie for any particular taxation year can only be
ascertained at the end of the year.
    The future income tax liability of the wholly-owned corporate subsidiary
which is subject to income taxes consists of the following:

                                                      June 30,  December 31,
                                                         2009          2008
                                   ------------------------------------------
    Tax liabilities relating to
     difference in tax and book
     value                                            $86,655       $86,060
    Tax asset relating to non-
     capital loss carry-forward                        (6,655)       (6,260)
                                   ------------------------------------------
    Future income tax liability                       $80,000       $79,800
                                   ------------------------------------------
                                   ------------------------------------------

    The future income tax expense
     consists of the following:
                                  Three       Three         Six         Six
                                 months      months      months      months
                                  ended       ended       ended       ended
                                June 30,    June 30,    June 30,    June 30,
                                   2009        2008        2009        2008
                            -------------------------------------------------
    Provision for income
     taxes at the expected
     rate                        $2,381      $2,698      $4,863      $4,569
    Tax effect of income
     attribution to Crombie's
     unitholders                 (2,381)     (1,997)     (4,663)     (3,468)
                            -------------------------------------------------
    Income tax expense             $Nil        $701        $200      $1,101
                            -------------------------------------------------
                            -------------------------------------------------


    17) CHANGE IN OTHER NON-CASH OPERATING ITEMS

                                  Three       Three         Six         Six
                                 months      months      months      months
                                  ended       ended       ended       ended
                                June 30,    June 30,    June 30,    June 30,
                                   2009        2008        2009        2008
                            -------------------------------------------------
    Cash provided by (used                 Restated                Restated
     in):                                   (Note 3)                (Note 3)
      Receivables               $(1,116)    $(1,247)      $(339)      $(920)
      Prepaid expenses and
       other assets              (6,544)     (5,378)     (3,911)     (4,272)
      Payables and other
       liabilities               (1,709)      9,473     (12,395)      4,968
                            -------------------------------------------------
                                $(9,369)     $2,848    $(16,645)      $(224)
                            -------------------------------------------------
                            -------------------------------------------------

    18) COMMITMENTS AND CONTINGENCIES

    There are various claims and litigation, which Crombie is involved with,
arising out of the ordinary course of business operations. In the opinion of
management, any liability that would arise from such contingencies would not
have a significant adverse effect on these financial statements.
    Crombie has agreed to indemnify its trustees and officers, and particular
employees in accordance with Crombie's policies. Crombie maintains insurance
policies that may provide coverage against certain claims.
    Crombie has entered into a management cost sharing agreement with a
subsidiary of Empire Company Limited. Details of this agreement are described
in Note 19.
    Crombie has land leases on certain properties. These leases have annual
payments of $969 per year over the next five years. The land leases have terms
of between 15.8 and 76.2 years remaining, including renewal options.
    Crombie obtains letters of credit to support our obligations with respect
to construction work on our commercial properties and defeasing commercial
property debt. In connection with the defeasance of the discontinued
operations commercial property debt, Crombie has issued a standby letter of
credit in the amount of $1,715 in favour of the mortgage lender. In addition,
Crombie has $145 in standby letters of credit for construction work that is
being performed on its commercial properties. Crombie does not believe that
any of these standby letters of credit are likely to be drawn upon.

    19) RELATED PARTY TRANSACTIONS

    As at June 30, 2009, Empire Company Limited, through its wholly-owned
subsidiary ECL, holds a 47.4% indirect interest in Crombie. Crombie uses the
exchange amount as the measurement basis for the related party transactions.
    For a period of five years commencing March 23, 2006, certain executive
management individuals and other employees of Crombie will provide general
management, financial, leasing, administrative, and other administration
support services to certain real estate subsidiaries of Empire Company Limited
on a cost sharing basis. The costs assumed by Empire Company Limited pursuant
to the agreement during the three months ended and six months ended June 30,
2009 were $278 and $575 (three months ended and six months ended June 30, 2008
- $386 and $841 respectively) and were netted against general and
administrative expenses owing by Crombie to Empire Company Limited.
    For a period of five years, commencing March 23, 2006, certain on-site
maintenance and management employees of Crombie will provide property
management services to certain real estate subsidiaries of Empire Company
Limited on a cost sharing basis. In addition, for various periods, ECL has an
obligation to provide rental income and interest rate subsidies. The costs
assumed by Empire Company Limited pursuant to the agreement during the three
months ended and six months ended June 30, 2009 were $273 and $649 (three
months ended and six months ended June 30, 2008 - $484 and $1,173
respectively) and was netted against property expenses owing by Crombie to
Empire Company Limited. The head lease subsidy during the three months ended
and six months ended June 30, 2009 were $154 and $404 (three months ended and
six months ended June 30, 2008 - $231 and $629 respectively).
    Crombie also earned rental revenue of $18,650 for the three months ended
June 30, 2009 and $33,210 for the six months ended June 30, 2009 (three months
ended and six months ended June 30, 2008 - $13,135 and $19,497 respectively)
from Sobeys Inc., Empire Theatres and ASC Commercial Leasing Limited ("ASC").
These companies were all subsidiaries of Empire Company Limited until
September 8, 2008 when ASC was sold. Property revenue from ASC is included in
this note disclosure until the sale date.
    Empire Company Limited has provided Crombie with a $13,800 floating rate
demand credit facility on substantially the same terms and conditions that
govern the floating rate revolving credit facility. During the first quarter
of 2009, $10,000 outstanding at December 31, 2008 was repaid to the demand
credit facility. As at June 30, 2009, Crombie had $Nil drawn against the
floating rate revolving credit facility (December 31, 2008 - $10,000).
    On June 1, 2009, Crombie acquired 1.1 acres of land adjacent to the Avalon
Mall, Newfoundland and Labrador, for $3,527 plus additional closing costs from
ECL General Partner Limited, an affiliate of Empire Company Limited. ECL
General Partner Limited provided debt of $3,527 at a fixed rate of 8.00% and a
term of 20 years.
    On June 25, 2009, concurrent with the public offering, in satisfaction of
its pre-emptive rights, ECL Developments Limited purchased $30,000 of Class B
LP Units and the attached Special Voting Units, on a private-placement basis.

    20) FINANCIAL INSTRUMENTS

    a) Fair value of financial instruments

    The fair value of a financial instrument is the estimated amount that
Crombie would receive or pay to settle the financial assets and financial
liabilities as at the reporting date.
    Crombie has classified its financial instruments in the following
categories:

    i.   Held for trading - Restricted cash and cash and cash equivalents

    ii.  Held to maturity investments - Assets related to discontinued
         operations

    iii. Loans and receivables - Notes receivable and accounts receivable

    iv.  Other financial liabilities - Commercial property debt, liabilities
         related to discontinued operations, convertible debentures, tenant
         improvements and capital expenditures payable, property operating
         costs payable and interest payable

    The book value of cash and cash equivalents, restricted cash, receivables,
payables and accruals approximate fair values at the balance sheet date.
    The fair value of other financial instruments is based upon discounted
future cash flows using discount rates that reflect current market conditions
for instruments with similar terms and risks. Such fair value estimates are
not necessarily indicative of the amounts Crombie might pay or receive in
actual market transactions.
    The following table summarizes the carrying value (excluding deferred
financing charges) and fair value of those financial instruments which have a
fair value different from their book value at the balance sheet date.


                                  June 30, 2009          December 31, 2008
                            -------------------------------------------------
                               Carrying        Fair    Carrying        Fair
                                  Value       Value       Value       Value
                            -------------------------------------------------
    Assets related to
     discontinued operations     $7,054      $7,192      $7,184      $7,477
                            -------------------------------------------------
                            -------------------------------------------------
    Commercial property debt   $765,913    $755,367    $814,194    $812,488
                            -------------------------------------------------
                            -------------------------------------------------
    Convertible debentures      $30,000     $30,075     $30,000     $25,950
                            -------------------------------------------------
                            -------------------------------------------------
    Liabilities related to
     discontinued
     operations                  $6,411      $6,370      $6,487      $6,599
                            -------------------------------------------------
                            -------------------------------------------------


    The following summarizes the significant methods and assumptions used in
estimating the fair values of the financial instruments reflected in the above
table:

    Assets related to discontinued operations: The fair value of the bonds and
treasury bills are based on market trading prices at the reporting date.

    Commercial property debt and liabilities related to discontinued
operations: The fair value of Crombie's commercial property debt and
liabilities related to discontinued operations is estimated based on the
present value of future payments, discounted at the yield on a Government of
Canada bond with the nearest maturity date to the underlying debt, plus an
estimated credit spread at the reporting date.

    Convertible debentures: The fair value of the convertible debentures is
estimated based on the market trading prices, at the reporting date, of the
convertible debentures.

    b) Risk management

    In the normal course of business, Crombie is exposed to a number of
financial risks that can affect its operating performance. These risks, and
the action taken to manage them, are as follows:

    Credit risk

    Credit risk arises from the possibility that tenants may experience
financial difficulty and be unable to fulfill their lease commitments.
Crombie's credit risk is limited to the recorded amount of tenant receivables.
An allowance for doubtful accounts is taken for all anticipated problem
accounts (see Note 7).
    Crombie mitigates credit risk by geographical diversification, utilizing
staggered lease maturities, diversifying both its tenant mix and asset mix and
conducting credit assessments for new and renewing tenants. As at June 30,
2009;

    - Excluding Sobeys (which accounts for 33.0% of Crombie's minimum rent),
      no other tenant accounts for more than 2.2% of Crombie's minimum rent,
      and

    - Over the next five years, no more than 9.3% of the gross leaseable area
      of Crombie will expire in any one year.

    As outlined in Note 19, Crombie earned rental revenue of $18,650 for the
three months ended June 30, 2009 and $33,210 for the six months ended June 30,
2009 (three months ended and six months ended June 30, 2008 - $13,135 and
$19,497 respectively) from subsidiaries of Empire Company Limited.

    Interest rate risk

    Interest rate risk is the potential for financial loss arising from
increases in interest rates. Crombie mitigates interest rate risk by utilizing
staggered debt maturities, limiting the use of permanent floating rate debt
and utilizing interest rate swap agreements. As at June 30, 2009:

    - Crombie's weighted average term to maturity of the fixed rate mortgages
      was 5.8 years, and

    - Crombie's exposure to floating rate debt, including the impact of the
      fixed rate swap agreements discussed below, was 20.0% of the total
      commercial property debt. Excluding the floating rate term facility,
      which is to be replaced with permanent fixed rate financing during the
      next two years, the exposure to floating rate debt is 2.1%.

    From time to time, Crombie has entered into interest rate swap agreements
to manage the interest rate profile of its current or future debts without an
exchange of the underlying principal amount. Recent turmoil in the financial
markets has materially affected interest swap rates. This effect was
especially pronounced during the fourth quarter of 2008 and the first quarter
of 2009. The interest swap rates are based on Canadian bond yields, plus a
premium, called the swap spread, which reflects the risk of trading with a
private counterparty as opposed to the Canadian government. During the fourth
quarter 2008, the swap spread turned negative and remained negative throughout
the first quarter of 2009. While the swap spreads turned positive during the
second quarter of 2009, they still remain below historical average values. The
effect of the abnormally low swap spreads, combined with the decline in the
Canadian bond yields has resulted in a significant deterioration of the
mark-to-market values for the interest rate swap agreements. At June 30, 2009,
the mark-to-market exposure on the interest rate swap agreements was
approximately $31,831. There is no immediate cash impact from the
mark-to-market adjustment. The unfavourable difference in the mark-to-market
amount of these interest rate swap agreements is reflected in other
comprehensive income (loss) rather than net income as the swaps are all
designated and effective hedges. The breakdown of the swaps in place as part
of the interest rate management program, and their associated mark-to-market
amounts are as follows:

    - Crombie has entered into a fixed interest rate swap to fix the amount
      of interest to be paid on $50,000 of the revolving credit facility. The
      fair value of the fixed interest rate swap at June 30, 2009, had an
      unfavourable mark-to-market exposure of $3,674 (June 30, 2008 -
      unfavourable $957) compared to its face value. The change in this
      amount has been recognized in other comprehensive income (loss). The
      mark-to-market amount of fixed interest rate swaps reduce to $Nil upon
      maturity of the swaps.

    - Crombie has entered into a number of delayed interest rate swap
      agreements of a notional amount of $100,334 (June 30, 2008 - $118,689)
      with settlement dates between February 1, 2010 and July 2, 2011,
      maturing between February 1, 2019 and July 2, 2021 to mitigate exposure
      to interest rate increases for mortgages maturing in 2010 and 2011. The
      fair value of these delayed interest rate swap agreements had an
      unfavourable mark-to-market exposure of $12,774 compared to the face
      value June 30, 2009 (June 30, 2008 - unfavourable $8,468). The change
      in these amounts has been recognized in other comprehensive income
      (loss).

    - In relation to the acquisition of a portfolio of 61 retail properties
      from subsidiaries of Empire Company Limited, Crombie has entered into a
      number of delayed interest rate swap agreements of a notional amount of
      $138,000 (June 30, 2008 - $280,000) with a settlement date of August 1,
      2009 to mitigate exposure to interest rate increases prior to replacing
      the floating rate term facility with long-term financing. The fair
      value of these agreements had an unfavourable mark-to-market exposure
      of $15,383 compared to their face value on June 30, 2009 (June 30,
      2008 - $1,782). The change in these amounts has been recognized in
      other comprehensive income (loss).

    During the first quarter of 2009, Crombie settled an interest rate swap
agreement related to a notional amount of $42,000 for a settlement amount of
$4,535. This settlement amount has been recognized in other comprehensive
income (loss) since the inception of the interest rate swap agreements. This
loss will be reclassified to interest expense using the effective interest
rate method.
    Crombie estimates that $897 of other comprehensive income (loss) will be
reclassified to interest expense during the remaining two quarters of 2009
based on interest rate swap agreements settled to June 30, 2009.
    A fluctuation in interest rates would have an impact on Crombie's net
earnings and other comprehensive income (loss) items. Based on the previous
year's rate changes, a 0.5% interest rate change would reasonably be
considered possible. The changes would have had the following impact:

                                 Three months ended      Three months ended
                                    June 30, 2009           June 30, 2008
                              -----------------------------------------------
                                   0.5%        0.5%        0.5%        0.5%
                               increase    decrease    increase    decrease
    -------------------------------------------------------------------------
    Impact on net income of
     interest rate changes on
     the floating rate
     revolving credit
     facility                     $(244)       $244       $(340)       $340
    -------------------------------------------------------------------------

                                  Six months ended        Six months ended
                                    June 30, 2009           June 30, 2008
                              -----------------------------------------------
                                   0.5%        0.5%        0.5%        0.5%
                               increase    decrease    increase    decrease
    -------------------------------------------------------------------------
    Impact on net income of
     interest rate changes on
     the floating rate
     revolving credit
     facility                     $(514)       $514       $(365)       $365
    -------------------------------------------------------------------------

                                    June 30, 2009           June 30, 2008
                              -----------------------------------------------
                                   0.5%        0.5%        0.5%        0.5%
                               increase    decrease    increase    decrease
    -------------------------------------------------------------------------
    Impact on other
     comprehensive income and
     non-controlling interest
     items due to changes in
     fair value of derivatives
     designated as a cash flow
     hedge                       $8,764     $(9,151)    $13,129    $(13,735)
    -------------------------------------------------------------------------

    Crombie does not enter into these interest rate swap transactions on a
speculative basis. Crombie is prohibited by its Declaration of Trust in
purchasing, selling or trading in interest rate future contracts other than
for hedging purposes.

    Liquidity risk

    The real estate industry is highly capital intensive. Liquidity risk is
the risk that Crombie may not have access to sufficient debt and equity
capital to fund the growth program and/or refinance the debt obligations as
they mature.
    Cash flow generated from operating the property portfolio represents the
primary source of liquidity used to service the interest on debt, fund general
and administrative expenses, reinvest into the portfolio through capital
expenditures, as well as fund tenant improvement costs and make distributions
to Unitholders. Debt repayment requirements are primarily funded from
refinancing Crombie's maturing debt obligations. Property acquisition funding
requirements are funded through a combination of accessing the debt and equity
capital markets.
    There is a risk that the debt capital markets may not refinance maturing
debt on terms and conditions acceptable to Crombie or at any terms at all.
Crombie seeks to mitigate this risk by staggering the debt maturity dates (see
Note 8). There is also a risk that the equity capital markets may not be
receptive to an equity issue from Crombie with financial terms acceptable to
Crombie. As discussed in Note 22, Crombie mitigates its exposure to liquidity
risk utilizing a conservative approach to capital management.
    Access to the revolving credit facility is also limited to the amount
utilized under the facility, plus any negative mark-to-market position on the
interest rate swap agreements, not exceeding the security provided by Crombie.
The mark-to-market adjustment on the interest rate swap agreements reached an
out-of-the-money position of approximately $31,831 at June 30, 2009. The
deterioration in the mark-to-market position may have the impact of reducing
Crombie's available credit in the revolving credit facility.
    Crombie has secured a $13,800 floating rate demand credit facility with
Empire Company Limited under essentially the same terms and conditions that
govern the revolving credit facility. This demand facility has been put in
place to ensure Crombie maintains adequate liquidity in order to fund its
daily operating activities while the volatility in the financial markets
continues, while also mitigating the risk of Crombie not being in compliance
with covenants under the revolving credit facility.
    Crombie has no mortgages maturing in fiscal 2009 and during the second
quarter of 2009 completed the extension of the floating rate term facility the
original maturity date of October 2009 to May 2011.

    21) ASSET HELD FOR SALE AND DISCONTINUED OPERATIONS

    (a) During the second quarter of 2008, Crombie and a potential purchaser
signed a purchase and sale agreement for a commercial property. The purchase
and sale agreement closed on October 24, 2008.

    (b) During the fourth quarter of 2008, Crombie defeased the mortgage
associated with the discontinued operations. The transaction did not qualify
for defeasance accounting, therefore the defeased loan and related asset have
not been removed from the balance sheet. The defeased loan is payable in
monthly payments of $42 and bears interest at 5.46%, was originally amortized
over 25 years and is due April 1, 2014. Crombie purchased Government of Canada
bonds and treasury bills and Canada mortgage bonds and pledged them as
security to the mortgage company. The bonds mature between January 22, 2009
and September 15, 2013, have a weighted average interest rate of 3.65% and
have been placed in escrow. The assets and liabilities related to discontinued
operations are measured at amortized cost using the effective interest rate
method, until April 1, 2014 at which time the debt will be extinguished.

    The following tables set forth the balance sheets associated with the
income property classified as held for sale as at June 30, 2009 and December
31, 2008 and the statements of income for the property held for sale for the
three months ended and six months ended June 30, 2009 and June 30, 2008.


    Balance Sheets
                                                      June 30,  December 31,
                                                         2009          2008
                                              -------------------------------
    Assets
      Assets related to discontinued
       operations                                      $7,054        $7,184
    Liabilities
      Accounts payable and accrued liabilities              -            30
      Liabilities related to discontinued
       operations                                       6,411         6,487
                                              -------------------------------
                                                        6,411         6,517
                                              -------------------------------
    Net investment in asset held for sale                $643          $667
                                              -------------------------------
                                              -------------------------------

    Statements of Income

                                  Three       Three         Six         Six
                                 Months      Months      Months      Months
                                  Ended       Ended       Ended       Ended
                                June 30,    June 30,    June 30,    June 30,
                                   2009        2008        2009        2008
                              -----------------------------------------------
    Property revenue
      Rental revenue
       contractually due
       from tenants                  $-        $608          $-      $1,417
      Straight-line rent
       recognition                    -           2           -           3
      Below-market lease
       amortization                   -           5           -           9
      Above-market lease
       amortization                   -         (17)          -         (34)
                              -----------------------------------------------
                                      -         598           -       1,395
                              -----------------------------------------------

    Expenses
      Property expenses               -         312           -         679
      Interest                        -          89           -         178
      Depreciation of
       commercial properties          -          23           -          58
      Amortization of tenant
       improvements/lease costs       -           9           -          23
      Amortization of
       intangible assets              -          29           -          58
                              -----------------------------------------------
                                      -         462           -         996
                              -----------------------------------------------
    Income from discontinued
     operations                      $-        $136          $-        $399
                              -----------------------------------------------
                              -----------------------------------------------


    22) CAPITAL MANAGEMENT

    Crombie's objective when managing capital on a long-term basis is to
maintain overall indebtedness in the range of 50% to 55% of gross book value
(as defined in the credit facility agreement), utilize staggered debt
maturities, minimize long-term exposure to floating rate debt and maintain
conservative payout ratios. Crombie's capital structure consists of the
following:

                                                      June 30,  December 31,
                                                         2009          2008
                                              -------------------------------
                                                                   Restated
                                                                    (Note 3)
    Commercial property debt                         $759,223      $808,971
    Convertible debentures                             29,090        28,968
    Non-controlling interest                          233,292       199,163
    Unitholders' equity                               255,475       215,558
                                              -------------------------------
                                                   $1,277,080    $1,252,660
                                              -------------------------------
                                              -------------------------------

    At a minimum, Crombie's capital structure is managed to ensure that it
complies with the restrictions pursuant to Crombie's Declaration of Trust, the
criteria contained in the Income Tax Act (Canada) in regard to the definition
of a REIT and existing debt covenants. Some of the restrictions pursuant to
Crombie's Declaration of Trust would include, among other items:

    - A restriction that Crombie shall not incur indebtedness (other than by
      the assumption of existing indebtedness) where the indebtedness would
      exceed 75% of the market value of the individual property; and

    - A restriction that Crombie shall not incur indebtedness of more than
      60% of gross book value (65% including any convertible debentures)

    Crombie's debt to gross book ratio as defined in Crombie's Declaration of
Trust is as follows:

                                                      June 30,  December 31,
                                                         2009          2008
                                              -------------------------------
                                                                   Restated
                                                                    (Note 3)
    Mortgages payable                                $564,101      $531,970
    Convertible debentures                             30,000        30,000
    Term facility                                     139,000       178,824
    Revolving credit facility                          62,812        93,400
    Demand credit facility                                  -        10,000
                                              -------------------------------
    Total debt outstanding                            795,913       844,194
    Less: Applicable fair value debt
     adjustment                                        (9,256)      (10,818)
                                              -------------------------------
    Debt                                             $786,657      $833,376
                                              -------------------------------
                                              -------------------------------

    Total assets                                   $1,470,474    $1,483,219
    Add:
    Deferred financing charges                          7,600         6,255
    Accumulated depreciation of commercial
     properties                                        57,715        45,865
    Accumulated amortization of intangible
     assets                                            66,492        53,505
    Less:
    Assets held related to discontinued
     operations                                        (7,054)       (7,184)
    Interest rate subsidy                              (9,256)      (10,818)
    Fair value adjustment to future taxes             (39,245)      (39,245)
                                              -------------------------------
    Gross book value                               $1,546,726    $1,531,597
                                              -------------------------------
                                              -------------------------------
    Debt to gross book value                             50.9%         54.4%
                                              -------------------------------
                                              -------------------------------

    Under the amended terms governing the revolving credit facility Crombie is
entitled to borrow a maximum of 70% of the fair market value of assets subject
to a first security position and 60% of the excess fair market value over
first mortgage financing of assets subject to a second security position or a
negative pledge. The terms of the revolving credit facility also require that
Crombie must maintain certain covenants:

    - annualized net operating income for the prescribed properties must be a
      minimum of 1.4 times the coverage of the related annualized debt
      service requirements;

    - annualized net operating income on all properties must be a minimum of
      1.4 times the coverage of all annualized debt service requirements;

    - access to the revolving credit facility is limited by the amount
      utilized under the facility, and any negative mark-to-market position
      on the interest rate swap agreements, not to exceed the security
      provided by Crombie; and

    - distributions to Unitholders are limited to 100% of Distributable
      Income as defined in the revolving credit facility.

    The revolving credit facility also contains a covenant that ECL
Developments Limited must maintain a minimum 40% voting interest in Crombie.
If ECL Developments Limited reduces its voting interest below this level,
Crombie will be required to renegotiate the revolving credit facility or
obtain alternative financing. Pursuant to an exchange agreement and while such
covenant remains in place, ECL Developments Limited will be required to give
Crombie at least six months' prior written notice of its intention to reduce
its voting interest below 40%.
    As at June 30, 2009, Crombie is in compliance with all externally imposed
capital requirements and all covenants relating to its debt facilities.

    23) EMPLOYEE FUTURE BENEFITS

    Crombie has a number of defined benefit and defined contribution plans
providing pension and other retirement benefits to most of its employees.

    Defined contribution pension plans

    The contributions required by the employee and the employer are specified.
The employee's pension depends on what level of retirement income (for
example, annuity purchase) that can be achieved with the combined total of
employee and employer contributions and investment income over the period of
plan membership, and the annuity purchase rates at the time of the employee's
retirement. During the second quarter of 2009, Crombie announced the
retirement of its Chief Executive Officer. As a result of this announcement,
an adjustment of $1,180 was made to the employee future benefit obligation to
recognize service costs and interest costs.

    Defined benefit pension plans

    The ultimate retirement benefit is defined by a formula that provides a
unit of benefit for each year of service. Employee contributions, if required,
pay for part of the cost of the benefit, and the employer contributions fund
the balance. The employer contributions are not specified or defined within
the plan text. They are based on the result of actuarial valuations which
determine the level of funding required to meet the total obligation as
estimated at the time of the valuation. The defined benefit plans are
unfunded.
    The total defined benefit cost related to pension plans and post
retirement benefit plans for the three months ended and six months ended June
30, 2009 were $70 and $145 (three months ended and six months ended June 30,
2008 - $95 and $191 respectively).
    The compensation expense related to the EUPP during the three months ended
and six months ended June 30, 2009 were $12 and $23 (three months ended and
six months ended June 30, 2008 - $11 and $20 respectively).

    24) SUBSEQUENT EVENT

    On July 22, 2009, Crombie declared distributions of 7.417 cents per unit
for the period from July 1, 2009 to and including, July 31, 2009. The
distribution will be payable on August 17, 2009 to Unitholders of record as at
July 31, 2009.

    25) SEGMENT DISCLOSURE

    Crombie owns and operates primarily retail real estate assets located in
Canada. Management, in measuring Crombie's performance or making operating
decisions, does not distinguish or group its operations on a geographical or
other basis. Accordingly, Crombie has a single reportable segment for
disclosure purposes in accordance with GAAP.

    26) COMPARATIVE FIGURES

    Comparative figures have been reclassified, where necessary, to reflect
the current period's presentation.

    Management Discussion and Analysis

    (In thousands of dollars, except per unit amounts)

    The following is Management's Discussion and Analysis ("MD&A") of the
consolidated financial condition and results of operations of Crombie Real
Estate Investment Trust ("Crombie") for the quarter and year-to-date ended
June 30, 2009, with a comparison to the financial condition and results of
operations for the comparable period in 2008.
    This MD&A should be read in conjunction with Crombie's interim
consolidated financial statements and accompanying notes for the period ended
June 30, 2009, and the audited consolidated financial statements and
accompanying notes for the year ended December 31, 2008 and the related MD&A.
Information about Crombie can be found on SEDAR at www.sedar.com.

    FORWARD-LOOKING INFORMATION

    This MD&A contains forward-looking statements that reflect the current
expectations of management of Crombie about Crombie's future results,
performance, achievements, prospects and opportunities. Wherever possible,
words such as "may", "will", "estimate", "anticipate", "believe", "expect",
"intend" and similar expressions have been used to identify these
forward-looking statements. These statements reflect current beliefs and are
based on information currently available to management of Crombie.
Forward-looking statements necessarily involve known and unknown risks and
uncertainties. A number of factors, including those discussed under "Risk
Management" could cause actual results, performance, achievements, prospects
or opportunities to differ materially from the results discussed or implied in
the forward-looking statements. These factors should be considered carefully
and a reader should not place undue reliance on the forward-looking
statements. There can be no assurance that the expectations of management of
Crombie will prove to be correct.
    In particular, certain statements in this document discuss Crombie's
anticipated outlook of future events. These statements include, but are not
limited to:

    (i) the development of new properties under a development agreement, which
development activities are undertaken by a related party and thus are not
under the direct control of Crombie and whose activities could be impacted by
real estate market cycles, the availability of labour and general economic
conditions;

    (ii) the acquisition of accretive properties and the anticipated extent of
the accretion of any acquisitions, which could be impacted by demand for
properties and the effect that demand has on acquisition capitalization rates
and changes in interest rates;

    (iii) reinvesting to make improvements to existing properties, which could
be impacted by the availability of labour and capital resource allocation
decisions;

    (iv) generating improved rental income and occupancy levels, which could
be impacted by changes in demand for Crombie's properties, tenant
bankruptcies, the effects of general economic conditions and supply of
competitive locations in proximity to Crombie locations;

    (v) overall indebtedness levels, which could be impacted by the level of
acquisition activity Crombie is able to achieve and future financing
opportunities;

    (vi) tax exempt status, which can be impacted by regulatory changes
enacted by governmental authorities;

    (vii) anticipated subsidy payments from ECL Developments Limited ("ECL"),
which are dependent on tenant leasing and construction activity;

    (viii) anticipated distributions and payout ratios, which could be
impacted by seasonality of capital expenditures, results of operations and
capital resource allocation decisions;

    (ix) the effect that any contingencies would have on Crombie's financial
statements;

    (*) the continued investment in training and resources throughout the
international financial reporting standards transition;

    (xi) the assumed estimated impact per unit upon future settlement of the
interest rate swap agreements which may be impacted by changes in Canadian
bond yields and swap spreads, as well as the timing and type of financing
available and the related amortization period thereon; and

    (xii) estimated losses on derivatives that will be reclassified to
interest expenses during the remaining two quarters of 2009.

    Readers are cautioned that such forward-looking statements are subject to
certain risks and uncertainties that could cause actual results to differ
materially from these statements. Crombie can give no assurance that actual
results will be consistent with these forward-looking statements.

    NON-GAAP FINANCIAL MEASURES

    There are financial measures included in this MD&A that do not have a
standardized meaning under Canadian generally accepted accounting principles
("GAAP") as prescribed by the Canadian Institute of Chartered Accountants.
These measures are property net operating income ("NOI"), adjusted funds from
operations ("AFFO"), debt to gross book value, funds from operations ("FFO")
and earnings before interest, taxes, depreciation and amortization ("EBITDA").
Management includes these measures because it believes certain investors use
these measures as a means of assessing relative financial performance.

    INTRODUCTION

    Financial and Operational Summary

    -------------------------------------------------------------------------
                                Quarter     Quarter  Six Months  Six Months
    (in thousands of dollars,     Ended       Ended       Ended       Ended
     except per unit amounts    June 30,    June 30,    June 30,    June 30,
     and as otherwise noted)       2009        2008        2009        2008
    -------------------------------------------------------------------------
    Property revenue            $50,893     $47,314    $103,885     $84,576
    Net income                   $4,128      $3,839      $8,320      $6,622
    Basic and diluted net
     income per unit              $0.15       $0.15       $0.30       $0.28
    -------------------------------------------------------------------------
    FFO                         $18,717     $18,812     $39,456     $32,651
    FFO per unit(1)               $0.35       $0.38       $0.75       $0.71
    FFO payout ratio (%)           65.7%       63.1%       60.7%       63.5%
    AFFO                        $14,069     $11,916     $30,095     $20,012
    AFFO per unit(1)              $0.27       $0.24       $0.57       $0.44
    AFFO payout ratio (%)          87.4%       99.7%       79.6%      103.7%
    -------------------------------------------------------------------------
                                June 30,    June 30,
                                   2009        2008
    -------------------------------------------------------------------------
    Debt to gross book
     value(2)                      50.9%       55.0%
    Total assets             $1,470,474  $1,501,754
    Total commercial
     property debt and
     convertible debentures    $788,313    $828,259
    -------------------------------------------------------------------------
    (1) FFO and AFFO per unit are calculated by FFO or AFFO, as the case may
        be, divided by the diluted weighted average of the total Units and
        Special Voting Units outstanding of 52,959,049 for the quarter ended
        June 30, 2009 and 49,954,256 for the quarter ended June 30, 2008,
        52,656,935 for the six months ended June 30, 2009 and 45,841,408 for
        the six months ended June 30, 2008.
    (2) See "Borrowing Capacity and Debt Covenants" for detailed calculation.
    

    Overview of the Business and Recent Developments

    Crombie is an unincorporated, open-ended real estate investment trust
established pursuant to a Declaration of Trust dated January 1, 2006, as
amended and restated (the "Declaration of Trust") under, and governed by, the
laws of the Province of Ontario. The units of Crombie trade on the Toronto
Stock Exchange under the symbol CRR.UN.
    Crombie invests in income-producing retail, office and mixed-use
properties in Canada, with a future growth strategy focused primarily on the
acquisition of retail properties. At June 30, 2009, Crombie owned a portfolio
of 113 commercial properties in seven provinces, comprising approximately 11.2
million square feet of gross leaseable area ("GLA").
    On April 22, 2008, Crombie closed an acquisition of a 61 retail property
portfolio representing approximately 3.3 million square feet of GLA (the
"Portfolio Acquisition") from certain affiliates of Empire Company Limited
("Empire Subsidiaries"). The cost of the Portfolio Acquisition to Crombie was
$428,500, excluding closing and transaction costs. The portfolio consists of
40 single-use freestanding Sobeys grocery stores of various Sobeys banners, 20
Sobeys anchored retail strip centres and one Sobeys anchored partially
enclosed centre. The GLA of the portfolio is as follows: Atlantic Canada -
78%; Quebec - 7%; and Ontario - 15%.
    In order to partially finance the Portfolio Acquisition, on March 20,
2008, Crombie completed a public offering of 5,727,750 subscription receipts,
including the over-allotment option, at a price of $11.00 per subscription
receipt (each subscription receipt converted into one Unit of Crombie upon
closing) and $30,000 of convertible extendible unsecured subordinated
debentures (the "Debentures") for aggregate gross proceeds of $93,005.
    Empire Subsidiaries took $55,000 of the purchase price in Class B LP
Units of Crombie Limited Partnership at the $11.00 offering price.
    The remainder of the purchase price was satisfied with a $280,000, 18
month floating rate term financing ("Term Facility") and a draw on Crombie's
revolving credit facility. On September 30, 2008, Crombie completed a
refinancing of $100,000 of the Term Facility with fixed rate mortgages. On
February 12, 2009, Crombie completed mortgage refinancing on an additional
$39,000 of the Term Facility (see "Commercial Property Debt"). On June 4,
2009, Crombie extended the Term Facility with a syndicate of seven Canadian
chartered banks. The maturity date of the Term Facility was extended to May
2011 and is secured by 30 properties purchased as part of the Portfolio
Acquisition.
    On October 24, 2008, Crombie completed the sale of West End Mall in
Halifax, Nova Scotia. Under GAAP, the financial position and operating results
have been reclassified on the financial statements for Crombie as assets and
liabilities related to discontinued operations on a retroactive basis. The
operating results tables in this MD&A also reflect the sale of the property on
Crombie's results.
    On June 25, 2009, Crombie closed a public offering of 4,725,000 Units,
including the underwriters' over-allotment option Units, at a price of $7.80
per Unit for gross proceeds of $36,855. Concurrent with the public offering,
in satisfaction of its pre-emptive right, ECL purchased $30,000 of Class B LP
Units and the attached Special Voting Units, on a private-placement basis, at
the $7.80 offering price. Empire Company Limited ("Empire"), through ECL,
holds a 47.4% economic and voting interest in Crombie as of June 30, 2009.

    
    Business Strategy and Outlook

    The objectives of Crombie are threefold:

    1. Generate reliable and growing cash distributions;

    2. Enhance the value of Crombie's assets and maximize long-term unit
       value through active management; and

    3. Expand the asset base of Crombie and increase its cash available for
       distribution through accretive acquisitions.

    Generate reliable and growing cash distributions: Management focuses on
improving both the same-asset results while expanding the asset base with
accretive acquisitions to grow the cash distributions to unitholders. As at
June 30, 2009, after just over three years of operations, Crombie has
increased its distributions by 11.25% while achieving its annual AFFO payout
ratio targets.
    Enhance value of Crombie's assets: Crombie anticipates reinvesting
approximately 3% to 5% of its property revenue each year into its properties
to maintain their productive capacity and thus overall value.
    Crombie's internal growth strategy focuses on generating greater rental
income from its existing properties. Crombie plans to achieve this by
strengthening its asset base through judicious expansion and improvement of
existing properties, leasing vacant space at competitive market rates with the
lowest possible transaction costs, and maintaining good relations with
tenants. Management will continue to conduct regular reviews of properties
and, based on its experience and market knowledge, will assess ongoing
opportunities within the portfolio.
    Expand asset base with accretive acquisitions: Crombie's external growth
strategy focuses primarily on acquisitions of income-producing retail
properties. Crombie pursues two sources of acquisitions which are third party
acquisitions and the relationship with ECL. All acquisitions completed to date
have been purchased at costs which ensure they will be immediately accretive
to cash available for distribution. The relationship with ECL includes
currently owned and future development properties, as well as opportunities
through the rights of first refusal that one of Empire's subsidiaries has
negotiated in many of their leases. Crombie will seek to identify future
property acquisitions using investment criteria that focus on the strength of
anchor tenancies, market demographics, terms of tenancies, proportion of
revenue from national tenants, opportunities for expansion, security of cash
flow, potential for capital appreciation and potential for increasing value
through more efficient management of the assets being acquired, including
expansion and repositioning.
    Crombie plans to work closely with ECL to identify development
opportunities that further Crombie's external growth strategy. The
relationship is governed by a development agreement described in the Material
Contracts section of Crombie's Annual Information Form for the year ended
December 31, 2008. Through this relationship, Crombie expects to have the
benefits associated with development while limiting its exposure to the
inherent risks of development, such as real estate market cycles, cost
overruns, labour disputes, construction delays and unpredictable general
economic conditions. The development agreement will also enable Crombie to
avoid the uncertainties associated with property development, including paying
the carrying costs of land, securing construction financing, obtaining
development approvals, managing construction projects, marketing in advance of
and during construction and earning no return during the construction period.
    The development agreement provides Crombie with a preferential right to
acquire retail properties developed by ECL, subject to approval by the
independent trustees. The history of the relationship between Crombie and ECL
continues to provide promising opportunities for growth through future
development opportunities on both new and existing sites in Crombie's
portfolio.
    ECL currently owns approximately 1.7 million square feet in 18 development
properties that can be offered to Crombie on a preferential right through the
development agreement when the properties are sufficiently developed to meet
Crombie's acquisition criteria. The properties are primarily retail plazas and
approximately 50% of the GLA of the 18 properties is located outside of
Atlantic Canada. These properties are anticipated to be made available to
Crombie over the next five years.

    Business Environment

    The global economic recession has included credit markets experiencing a
dramatic reduction in liquidity. As the credit crisis deepened during the
second half of 2008, both the ability and willingness of financial
institutions to lend money was greatly reduced as financial institutions
became increasingly risk adverse. This reduced credit availability continues
to be a major risk to the capital intensive real estate investment trust
("REIT") business environment. Due to the economic and credit markets
situation, Crombie has taken a cautious approach with respect to liquidity and
capital resources during the first six months of 2009.
    The turmoil in the financial markets also caused bond yields to materially
decline and dramatically reduced interest rate swap spreads during the fourth
quarter of 2008 and continuing through the first six months of 2009. While the
swap spreads turned positive in the second quarter of 2009, they still remain
below historical average levels. This has resulted in a significant
deterioration of the mark-to-market values for the interest rate swap
agreements Crombie has entered into to hedge its exposure to potential
increases in Canadian bond yields associated with future debt issuances. The
impact is more fully explained under the "Borrowing Capacity and Debt
Covenants" and "Risk Management" sections of this MD&A.
    In light of the widening credit spreads and a limited liquidity credit
environment, capitalization rates have begun to expand. While higher
capitalization rates normally make acquisition opportunities more affordable,
the higher cost of capital caused by the tightening credit markets and the
higher yield on Crombie's equity makes it very challenging to source accretive
acquisitions. Crombie only intends to pursue acquisitions that provide an
acceptable return, including any acquisitions that may result from the
relationship between Crombie and ECL.
    In terms of occupancy rates, while both the retail and office markets
where Crombie has a prominent presence remain relatively stable, the business
environment outlook remains pessimistic, influenced by the continuing
recession in the U.S. and Canadian economies. One offsetting factor to the
economic slowdown is that many of Crombie's retail locations are anchored by
food stores, which typically are less affected by swings in consumer spending.

    2009 SECOND QUARTER HIGHLIGHTS

    - Crombie completed the syndication and extension of the Term Facility to
      May 2011.

    - Crombie completed a public offering of Units for gross proceeds of
      $36,855 and a private placement of Class B LP Units for gross proceeds
      of $30,000 on June 25, 2009.

    - Crombie completed leasing activity on approximately 67% of its 2009
      expiring leases as at June 30, 2009.

    - Occupancy for the properties was 94.1% at June 30, 2009 compared with
      94.2% at March 31, 2009.

    - Property revenue for the quarter ended June 30, 2009 increased by
      $3,579, or 7.6%, to $50,893 compared to $47,314 for the quarter ended
      June 30, 2008.

    - Same-asset NOI for the second quarter of 2009 of $22,239 decreased by
      $389 or 1.7%, compared to $22,628 for the quarter ended June 30, 2008.

    - The FFO payout ratio for the six months ended June 30, 2009 was 60.7%
      which was favourable to the target annual payout ratio of 70% and
      favourable to the payout ratio of 63.5% for the same period in 2008.

    - The AFFO payout ratio for the six months ended June 30, 2009 was 79.6%
      which was favourable to the target annual AFFO payout ratio of 95% and
      was favourable to the payout ratio of 103.7% for the same period in
      2008.

    - Debt to gross book value decreased to 50.9% at June 30, 2009 compared
      to 54.8% at March 31, 2009.

    - Crombie's interest service coverage ratio for the first six months of
      2009 was 2.79 times EBITDA and debt service coverage ratio was 1.96
      times EBITDA, compared to 2.94 times EBITDA and 2.04 times EBITDA,
      respectively, for the same period in 2008.
    

    OVERVIEW OF THE PROPERTY PORTFOLIO

    Property Profile

    At June 30, 2009 the property portfolio consisted of 113 commercial
properties that contain approximately 11.2 million square feet of GLA. The
properties are located in seven provinces: Nova Scotia, New Brunswick,
Newfoundland and Labrador, Prince Edward Island, Ontario, Quebec and
Saskatchewan.

    As at June 30, 2009, the portfolio distribution of the GLA by province
was as follows:

    
    -------------------------------------------------------------------------
                     Number                                % of
                         of                              Annual
                     Proper-        GLA        % of     Minimum
    Province           ties     (sq. ft.)       GLA        Rent  Occupancy(1)
    -------------------------------------------------------------------------
    Nova Scotia          41   5,065,000        45.3%       41.2%       94.6%
    Ontario              22   1,646,000        14.7%       16.9%       95.3%
    New Brunswick        20   1,647,000        14.7%       12.4%       88.6%
    Newfoundland and
     Labrador            13   1,468,000        13.1%       17.0%       94.2%
    Quebec               13     825,000         7.4%        7.9%       99.6%
    Prince Edward
     Island               3     385,000         3.4%        3.1%       91.3%
    Saskatchewan          1     160,000         1.4%        1.5%       97.8%
    -------------------------------------------------------------------------
    Total               113  11,196,000       100.0%      100.0%       94.1%
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    (1) For purposes of calculating occupancy percentage, Crombie considers
        GLA covered by the head lease agreement in favour of ECL as occupied
        as there is head lease revenue being earned on the GLA
    

    Overall occupancy has marginally reduced from 94.2% at March 31, 2009 to
94.1% at June 30, 2009 primarily due the head lease agreement being satisfied
in County Fair Mall in Summerside, Prince Edward Island and Uptown Centre in
Fredericton, New Brunswick. Of the total of 228,000 square feet in GLA of new
tenancies, as shown in the "2009 Portfolio Lease Expiries and Leasing
Activity", approximately 66,000 square feet is related to GLA to be occupied
in future quarters of 2009 and 2010. This additional new leasing represents
approximately 0.6% of Crombie's GLA
    Crombie looks to diversify its geographic composition through growth
opportunities, as indicated by the seven acquisitions in Ontario, one
acquisition in Quebec and one acquisition in Saskatchewan, plus the Portfolio
Acquisition since Crombie's initial public offering (the "IPO"). As well, the
properties are located in rural and urban locations, which Crombie believes
adds stability to the portfolio, while reducing vulnerability to economic
fluctuations that may affect any particular region.
    From time to time, Crombie will commence redevelopment work on a property
to enhance the economic viability of a location when the environment in which
it operates warrants. Crombie currently has two properties that are under
redevelopment. Fort Edward Mall in Windsor, Nova Scotia is in the process of
conversion from a retail enclosed property to a retail plaza. The property is
being reconfigured to replace the previous SAAN location and several small
tenants with a new Hart location. Valley Mall in Corner Brook, Newfoundland
and Labrador is being reconfigured to replace an existing food court with a
new Hart store. Costs for properties under redevelopment are classified as
productive capacity enhancements to the extent that Crombie determines they
are financeable costs by virtue of increasing a property's NOI and appraised
value by a minimum threshold (see "Tenant Improvements and Capital
Expenditures").

    Largest Tenants

    The following table illustrates the ten largest tenants in Crombie's
portfolio of income-producing properties as measured by their percentage
contribution to total annual minimum base rent as at June 30, 2009.

    
    -------------------------------------------------------------------------
                                                                    Average
                                                  % of Annual     Remaining
    Tenant                                       Minimum Rent    Lease Term
    -------------------------------------------------------------------------
    Sobeys (1)                                           33.0%   16.6 years
    Empire Theatres                                       2.2%    8.7 years
    Zellers                                               2.2%    8.5 years
    Shoppers Drug Mart                                    2.0%    6.8 years
    Nova Scotia Power Inc                                 1.9%    1.8 years
    Province of Nova Scotia                               1.7%    5.9 years
    CIBC                                                  1.6%   17.7 years
    Bell (Aliant)                                         1.4%    9.1 years
    Public Works Canada                                   1.3%    2.2 years
    Sears Canada Inc.                                     1.2%   15.5 years
    -------------------------------------------------------------------------
    Total                                                48.5%
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    (1) Excludes Lawtons and Fast Fuel locations.
    

    Crombie's portfolio is leased to a wide variety of tenants. Other than
Sobeys, that accounts for 33.0% of the annual minimum rent, no other tenant
accounts for more than 2.2% of Crombie's minimum rent.

    Lease Maturities

    The following table sets out as of June 30, 2009 the number of leases
relating to the properties subject to lease maturities during the periods
indicated (assuming tenants do not holdover on a month-to-month basis or
exercise renewal options or termination rights), the renewal area, the
percentage of the total GLA of the properties represented by such maturities
and the estimated average net rent per square foot at the time of expiry. The
weighted average remaining term of all leases is approximately 10.5 years.

    
    -------------------------------------------------------------------------
                                                                    Average
                                                                        Net
                                            Renewal                Rent per
                                 Number        Area        % of  Sq. Ft. at
    Year                      of Leases     (sq. ft.) Total GLA   Expiry ($)
    -------------------------------------------------------------------------
    Remaining 2009                  139     367,000         3.3%     $15.09
    2010                            198     645,000         5.8%     $13.11
    2011                            217   1,046,000         9.3%     $14.42
    2012                            161     853,000         7.6%     $11.79
    2013                            155     876,000         7.8%     $12.02
    Thereafter                      434   6,747,000        60.3%     $12.84
    -------------------------------------------------------------------------
    Total                         1,304  10,534,000        94.1%     $12.94
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    2009 Portfolio Lease Expiries and Leasing Activity

    As at June 30, 2009, portfolio lease expiries and leasing activity for the
year ending December 31, 2009 were as follows:

    -------------------------------------------------------------------------
               Retail -
                 Free-   Retail -    Retail -               Mixed-
             standing    Plazas    Enclosed    Office         use     Total
    -------------------------------------------------------------------------
    Expiries
     (sq. ft.)      -   160,000     220,000   103,000     220,000   703,000
    Average net
     rent per
     sq. ft.       $-    $16.28      $13.97    $12.66      $11.64    $13.58
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Committed
     renewals
     (sq. ft.)      -    54,000      81,000    30,000      76,000   241,000
    Average net
     rent per
     sq. ft.       $-    $15.52      $13.21    $14.54       $9.04    $12.58
    New leasing
     (sq. ft.)  4,000    41,000     122,000    32,000      29,000   228,000
    Average net
     rent per
     sq. ft.   $23.00    $16.71       $8.38    $17.07      $14.84    $12.21
    -------------------------------------------------------------------------
    Total
     renewals/
     new
     leasing
     (sq. ft.)  4,000    95,000     203,000    62,000     105,000   469,000
    Total
     average
     net rent
     per
     sq. ft.   $23.00    $16.04      $10.30    $15.86      $10.64    $12.40
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    

    During the quarter ended June 30, 2009, Crombie had renewals or entered
into new leases in respect of approximately 469,000 square feet at an average
net rent of $12.40 per square foot, compared with expiries for 2009 of
approximately 703,000 square feet at an average net rent of $13.58 per square
foot. Of the 703,000 square feet of expiries, approximately 132,000 square
feet involve tenants that are still paying property revenues on a holdover
basis. Rent per square foot for the completed new leasing activity in the
retail enclosed properties is below the average net rent per square foot of
total expiries in 2009 due primarily to one relatively large lease in a small
rural location to replace the last vacant SAAN store location that went into
bankruptcy in 2008 plus two new anchor leases to complete the Highland Square
renovation in New Glasgow. Rent per square foot for the renewals in the retail
enclosed properties and in the mixed-use properties was lower than the average
expiry rate due to the renewal of three long term tenants at previously
negotiated terms favourable to the tenants. Excluding the impact of these six
new/renewal deals, average net rent per square foot for all remaining leases
of approximately 326,000 square feet was $15.25, an increase of 12.3% over the
average net rent per square foot for the 2009 expiring rents.

    Sector Information

    While Crombie does not distinguish or group its operations on a
geographical or other basis, Crombie provides the following sector information
as supplemental disclosure.

    As at June 30, 2009, the portfolio distribution of the GLA by asset type
was as follows:

    
    -------------------------------------------------------------------------
                     Number                                % of
                         of                              Annual
                     Proper-        GLA                 Minimum        Occu-
    Asset Type         ties     (sq. ft.)  % of GLA        Rent     pancy(1)
    -------------------------------------------------------------------------
    Retail -
     Freestanding        42   1,699,000        15.2%       15.7%      100.0%
    Retail -
     Plazas              44   3,982,000        35.5%       37.1%       95.8%
    Retail -
     Enclosed            14   2,760,000        24.7%       24.7%       89.3%
    Office                5   1,049,000         9.4%        9.0%       89.1%
    Mixed-Use             8   1,706,000        15.2%       13.5%       95.0%
    -------------------------------------------------------------------------
    Total               113  11,196,000       100.0%      100.0%       94.1%
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    (1) For purposes of calculating occupancy percentage, Crombie considers
        GLA covered by the head lease agreement in favour of ECL as occupied

    The following table sets out as of June 30, 2009, the square feet under
lease subject to lease maturities during the periods indicated.

    -------------------------------------------------------------------------
                     Retail -
    Year          Freestanding       Retail - Plazas      Retail - Enclosed
    -------------------------------------------------------------------------
              (sq. ft.)      (%)    (sq. ft.)      (%)    (sq. ft.)      (%)
    -------------------------------------------------------------------------
    Remaining
     2009           -         -%     99,000       2.5%    106,000       3.8%
    2010            -         -%    245,000       6.2%    134,000       4.9%
    2011        1,000       0.1%    324,000       8.1%    141,000       5.1%
    2012        5,000       0.3%    280,000       7.0%    144,000       5.2%
    2013            -         -%    389,000       9.8%    217,000       7.9%
    There-
     after  1,693,000      99.6%  2,479,000      62.2%  1,722,000      62.4%
    -------------------------------------------------------------------------
    Total   1,699,000     100.0%  3,816,000      95.8%  2,464,000      89.3%
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Year              Office             Mixed-Use               Total
    -------------------------------------------------------------------------
              (sq. ft.)      (%)    (sq. ft.)      (%)    (sq. ft.)      (%)
    -------------------------------------------------------------------------
    Remaining
     2009      45,000       4.3%    117,000       6.8%    367,000       3.3%
    2010       83,000       7.9%    183,000      10.7%    645,000       5.8%
    2011      360,000      34.4%    220,000      12.9%  1,046,000       9.3%
    2012      121,000      11.5%    303,000      17.8%    853,000       7.6%
    2013      102,000       9.7%    168,000       9.9%    876,000       7.8%
    There-
     after    223,000      21.3%    630,000      36.9%  6,747,000      60.3%
    -------------------------------------------------------------------------
    Total     934,000      89.1%  1,621,000      95.0% 10,534,000      94.1%
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    The following table sets out the average net rent per square foot expiring
during the periods indicated.

    -------------------------------------------------------------------------
                     Retail -
                       Free-     Retail -    Retail -
    Year           standing      Plazas    Enclosed      Office   Mixed-Use
    -------------------------------------------------------------------------
    Remaining 2009       $-      $16.40      $17.11      $10.88      $13.51
    2010                 $-      $13.93      $15.26      $11.73      $11.05
    2011             $37.50      $14.17      $20.42      $14.20      $11.19
    2012             $25.00      $13.01      $18.67       $9.69       $8.01
    2013                 $-       $9.75      $14.47      $13.95      $12.91
    Thereafter       $13.29      $13.70      $11.79      $12.29      $11.33
    -------------------------------------------------------------------------
    Total            $13.35      $13.38      $13.34      $12.75      $10.98
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    2009 Results of Operations

    Acquisitions

    The following table outlines the acquisitions made which affected the
results of operations when compared to the previous year's results. The
following acquisitions took place between January 2008 and June 2009.

    -------------------------------------------------------------------------

                       Date                               GLA   Acquisition
    Property       Acquired       Property Type       (sq. ft.)      Cost(1)
    -------------------------------------------------------------------------
    Portfolio      April 22,             Retail -
     Acquisition       2008        Freestanding     1,589,000      $428,500
                                 Retail - Plaza     1,571,000
                              Retail - Enclosed       128,000
    -------------------------------------------------------------------------
    River City      June 12,     Retail - Plaza       160,000       $27,200
     Centre,           2008
     Saskatoon,
     Saskatchewan
    -------------------------------------------------------------------------
    Total                                           3,448,000      $455,700
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    (1) Excluding closing and transaction costs.

    Comparison to Previous Year

                                                  Six Months Ended
                                      ---------------------------------------
    (In thousands of dollars, except    June 30,      June 30,
     where otherwise noted)                2009          2008      Variance
    -------------------------------------------------------------------------
    Property revenue                   $103,885       $84,576       $19,309
    Property expenses                    37,229        32,087        (5,142)
    -------------------------------------------------------------------------
    Property NOI                         66,656        52,489        14,167
    -------------------------------------------------------------------------
    NOI margin percentage                  64.2%         62.1%          2.1%
    -------------------------------------------------------------------------
    Expenses:
      General and administrative          5,290         3,931        (1,359)
      Interest                           22,002        16,465        (5,537)
      Depreciation and amortization      23,294        18,752        (4,542)
    -------------------------------------------------------------------------
                                         50,586        39,148       (11,438)
    -------------------------------------------------------------------------
    Income from continuing operations
     before other items, income taxes
     and non-controlling interest        16,070        13,341         2,729
    Other items                              92            97            (5)
    -------------------------------------------------------------------------
    Income from continuing operations
     before income taxes and
     non-controlling interest            16,162        13,438         2,724
    Income taxes expense - Future           200         1,101           901
    -------------------------------------------------------------------------
    Income from continuing operations
     before non-controlling interest     15,962        12,337         3,625
    Income from discontinued operations       -           399          (399)
    -------------------------------------------------------------------------
    Income before non-controlling
     interest                            15,962        12,736         3,226
    Non-controlling interest              7,642         6,114        (1,528)
    -------------------------------------------------------------------------
    Net income                           $8,320        $6,622        $1,698
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Basic and diluted net income per
     Unit                                 $0.30         $0.28         $0.02
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Basic weighted average Units
     outstanding (in 000's)          27,307,174    23,726,866
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Diluted weighted average Units
     outstanding (in 000's)          27,449,862    23,838,755
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Net income for the six months ended June 30, 2009 of $8,320 increased by
$1,698 from $6,622 for the six months ended June 30, 2008. The increase was
primarily due to:

    - higher property NOI from the individual property acquisition and the
      Portfolio Acquisition; offset in part by

    - higher interest and depreciation charges, due primarily to the
      individual property acquisition and the Portfolio Acquisition, and
      higher general and administrative expenses.

    Property Revenue and Property Expenses

    -------------------------------------------------------------------------
                                           Six Months Ended
                                     --------------------------
                                        June 30,      June 30,
    (In thousands of dollars)              2009          2008      Variance
    -------------------------------------------------------------------------
    Same-asset property revenue         $74,254       $74,483         $(229)
    Acquisition property revenue         29,631        10,093        19,538
    -------------------------------------------------------------------------
    Property revenue                   $103,885       $84,576       $19,309
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    

    Same-asset property revenue of $74,254 for the six months ended June 30,
2009 was 0.3% lower than the six months ended June 30, 2008 due primarily to a
one-time head lease adjustment upon final release of the obligation governing
the agreement between ECL and Crombie for County Fair Mall in Summerside,
Prince Edward Island and Uptown Centre in Fredericton, New Brunswick,
partially offset by the increased average rent per square foot ($12.49 in 2009
and $12.31 in 2008) and increased recoverable common area expenses. The
adjustment was paid to ECL to reflect their overachievement in the leasing
results for these two locations which will benefit Crombie in higher rental
income on an ongoing basis.

    
    -------------------------------------------------------------------------
                                           Six Months Ended
                                     --------------------------
                                        June 30,      June 30,
    (In thousands of dollars)              2009          2008      Variance
    -------------------------------------------------------------------------
    Same-asset property expenses        $30,096       $29,905          $191
    Acquisition property expenses         7,133         2,182         4,951
    -------------------------------------------------------------------------
    Property expenses                   $37,229       $32,087        $5,142
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Same-asset property expenses of $30,096 for the six months ended June 30,
2009 were 0.6% higher than the six months ended June 30, 2008 due to increased
recoverable common area expenses primarily from increased property taxes and
utility costs.

    -------------------------------------------------------------------------
                                           Six Months Ended
                                     --------------------------
                                        June 30,      June 30,
    (In thousands of dollars)              2009          2008      Variance
    -------------------------------------------------------------------------
    Same-asset property NOI             $44,158       $44,578         $(420)
    Acquisition property NOI             22,498         7,911        14,587
    -------------------------------------------------------------------------
    Property NOI                        $66,656       $52,489       $14,167
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Same-asset NOI for the six months ended June 30, 2009 decreased by 0.9%
from the six months ended June 30, 2008.

    Property NOI for the six months ended June 30, 2009 by region was as
follows:

    -------------------------------------------------------------------------
    (In                        2009                          2008
     thou-   -----------------------------------------
     sands        Pro-
     of         perty  Property    Property  NOI % of    NOI % of
     dollars) Revenue  Expenses         NOI   revenue     revenue  Variance
    -------------------------------------------------------------------------
    Nova
     Scotia   $46,997   $18,696     $28,301      60.2%       59.3%      0.9%
    Newfound-
     land and
     Labrador  16,420     4,659      11,761      71.6%       68.2%      3.4%
    New
     Bruns-
     wick      12,520     5,365       7,155      57.1%       53.0%      4.1%
    Ontario    16,661     5,368      11,293      67.8%       64.7%      3.1%
    Prince
     Edward
     Island     2,318       661       1,657      71.5%       74.8%     (3.3)%
    Quebec      7,575     2,097       5,478      72.3%       76.6%     (4.3)%
    Saskat-
     chewan     1,394       383       1,011      72.5%       82.8%    (10.3)%
    -------------------------------------------------------------------------
    Total    $103,885  $37,229      $66,656      64.2%       62.1%      2.1%
    -------------------------------------------------------------------------
    

    The overall 2.1% increase in NOI as a % of revenue, as well as specific
provincial increases in Nova Scotia, Newfoundland and Labrador, New Brunswick
and Ontario was primarily due to the Portfolio Acquisition. Prince Edward
Island's decrease in NOI % of revenue is attributable to the finalization of
the head lease obligation under the terms of the agreement with ECL combined
the relatively smaller number of properties in the province and the timing and
nature of expenses. Quebec's decrease in NOI % of revenue is attributable to
higher recoverable common area expenses. The decrease in NOI % of revenue in
Saskatchewan is due to River City Centre being owned by Crombie for only 19
days in the 2008 results.

    
    General and Administrative Expenses

    The following table outlines the major categories of general and
administrative expenses.

    -------------------------------------------------------------------------
                                           Six Months Ended
                                     --------------------------
                                        June 30,      June 30,
    (In thousands of dollars)              2009          2008      Variance
    -------------------------------------------------------------------------
    Salaries and benefits                $3,110        $1,859        $1,251
    Professional fees                       848           793            55
    Public company costs                    576           520            56
    Rent and occupancy                      377           350            27
    Other                                   379           409           (30)
    -------------------------------------------------------------------------
    General and administrative costs     $5,290        $3,931        $1,359
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    As a percentage of revenue              5.1%          4.6%          0.5%
    -------------------------------------------------------------------------
    

    General and administrative expenses increased by 34.6% for the six months
ended June 30, 2009 to $5,290 compared to $3,931 for the six months ended June
30, 2008. The increase in expenses was primarily due to one time reitrement
costs associated with the retirement of Crombie's Chief Executive Officer on
August 5, 2009, increased salaries and increased legal and information
technology professional fees partially offset by reduced incentive payments.

    
    Interest Expense

    -------------------------------------------------------------------------
                                           Six Months Ended
                                     --------------------------
                                        June 30,      June 30,
    (In thousands of dollars)              2009          2008      Variance
    -------------------------------------------------------------------------
    Same-asset interest expense         $13,354       $12,803          $551
    Acquisition interest expense          8,648         3,662         4,986
    -------------------------------------------------------------------------
    Interest expense                    $22,002       $16,465        $5,537
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    

    Same-asset interest expense of $13,354 for the six months ended June 30,
2009 increased by 4.3% when compared to the six months ended June 30, 2008 due
to the amortization of payments made on the settlement of interest rate swap
agreements of $662 and slightly higher average interest rates on mortgages
entered into during 2008 for properties held since the IPO, offset in part by
a decrease in the floating interest rate on the revolving credit facility.
    There is an agreement between ECL and Crombie whereby ECL provides a
monthly interest rate subsidy to Crombie to reduce the effective interest
rates to 5.54% on certain mortgages that were assumed at Crombie's IPO for
their remaining term. Over the term of this agreement, management expects this
subsidy to aggregate to the amount of approximately $20,564. The amount of the
interest rate subsidy received during the six months ended June 30, 2009 was
$1,562 (six months ended June 30, 2008 - $1,718). The interest rate subsidy is
received by Crombie through monthly repayments by ECL of amounts due under one
of the demand notes issued by ECL to Crombie Developments Limited ("CDL").

    
    Depreciation and Amortization

    -------------------------------------------------------------------------
                                           Six Months Ended
                                     --------------------------
                                        June 30,      June 30,
    (In thousands of dollars)              2009          2008      Variance
    -------------------------------------------------------------------------
    Same-asset depreciation and
     amortization                       $14,816       $15,790         $(974)
    Acquisition depreciation and
     amortization                         8,478         2,962         5,516
    -------------------------------------------------------------------------
    Depreciation and amortization       $23,294       $18,752        $4,542
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    

    Same-asset depreciation and amortization of $14,816 for the six months
ended June 30, 2009 was 6.2% lower than the six months ended June 30, 2008 due
primarily to the intangible assets related to the origination costs and the
in-place leases associated with the properties purchased at the date of the
IPO being fully amortized, offset in part by depreciation on fixed asset
additions and amortization on tenant improvement and lease costs incurred
since June 30, 2008, combined with the expenses resulting from the
reallocation of $3,946 of costs to commercial properties from other assets due
to the retroactive implementation of accounting guidelines as discussed in
"Changes in Accounting Policies and Estimates". Depreciation and amortization
consists of:

    
    -------------------------------------------------------------------------
                                           Six Months Ended
                                     --------------------------
                                        June 30,      June 30,
    (In thousands of dollars)              2009          2008      Variance
    -------------------------------------------------------------------------
    Depreciation of commercial
     properties                          $9,827        $7,821        $2,006
    Amortization of tenant
     improvements/lease costs             2,023         1,468           555
    Amortization of intangible assets    11,444         9,463         1,981
    -------------------------------------------------------------------------
    Depreciation and amortization       $23,294       $18,752        $4,542
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    

    Future Income Taxes

    A trust that satisfies the criteria of a REIT throughout its taxation
year will not be subject to income tax in respect of distributions to its
unitholders or be subject to the restrictions on its growth that would
otherwise apply to trusts classified as specified investment flow-through
entities ("SIFTs").
    Crombie's management and their advisors have completed an extensive
review of Crombie's organizational structure and operations to support
Crombie's assertion that it currently satisfies the technical tests contained
in the Income Tax Act (Canada) in regard to the definition of a REIT (and thus
is not a SIFT). However, the relevant tests apply throughout the taxation year
of Crombie and, as such, the actual status of Crombie for any particular
taxation year can only be ascertained at the end of the year.
    The future income tax expenses represent the future tax provision of the
wholly-owned corporate subsidiary which is subject to income taxes.

    Sector Information

    While Crombie does not distinguish or group its operations on a
geographical or other basis, Crombie provides the following sector information
as supplemental disclosure.

    
    Retail Freestanding Properties
    -------------------------------------------------------------------------
    (In thousands         Six Months                  Six Months Ended
     of dollars,     Ended June 30, 2009                June 30, 2008
     except as  -------------------------------------------------------------
     otherwise   Same-    Acqui-                 Same-      Acqui-
     noted)     Asset   sitions       Total     Asset     sitions     Total
    -------------------------------------------------------------------------
    Property
     revenue     $862   $13,395     $14,257      $713      $5,040    $5,753
    Property
     expenses     218     2,720       2,938       115       1,078     1,193
    -------------------------------------------------------------------------
    Property
     NOI         $644   $10,675     $11,319      $598      $3,962    $4,560
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    NOI
     Margin %    74.7%     79.7%       79.4%     83.9%       78.6%     79.2%
    -------------------------------------------------------------------------
    Occu-
     pancy %    100.0%    100.0%      100.0%    100.0%      100.0%    100.0%
    -------------------------------------------------------------------------

    The improvement in the retail freestanding property NOI was caused by the
Portfolio Acquisition. The same-asset NOI % margin is lower as a result of the
fluctuations that can occur in a single property's results.

    Retail Plaza Properties
    -------------------------------------------------------------------------
    (In thousands         Six Months                  Six Months Ended
     of dollars,     Ended June 30, 2009                June 30, 2008
     except as  -------------------------------------------------------------
     otherwise   Same-    Acqui-                 Same-      Acqui-
     noted)     Asset   sitions       Total     Asset     sitions     Total
    -------------------------------------------------------------------------
    Property
     revenue  $20,510   $15,320     $35,830   $21,304      $4,764   $26,068
    Property
     expenses   6,714     4,124      10,838     6,822       1,047     7,869
    -------------------------------------------------------------------------
    Property
     NOI      $13,796   $11,196     $24,992   $14,482      $3,717   $18,199
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    NOI
     Margin %    67.3%     73.1%       69.8%     68.0%       78.0%     69.8%
    -------------------------------------------------------------------------
    Occu-
     pancy %     94.3%     97.8%       95.8%     95.3%       97.4%     96.4%
    -------------------------------------------------------------------------
    

    The improvement in the retail plaza property NOI was primarily caused by
the Portfolio Acquisition, partially offset by increased non-recoverable
maintenance costs in same-asset properties.  Occupancy in the same-assets at
June 30, 2009 is slightly lower than June 30, 2008, which combined with
slightly lower average net rent per square foot results has led to decreased
revenue overall compared to the prior year.

    
    Retail Enclosed Properties
    -------------------------------------------------------------------------
    (In thousands         Six Months                  Six Months Ended
     of dollars,     Ended June 30, 2009                June 30, 2008
     except as  -------------------------------------------------------------
     otherwise   Same-    Acqui-                 Same-      Acqui-
     noted)     Asset   sitions       Total     Asset     sitions     Total
    -------------------------------------------------------------------------
    Property
     revenue  $23,847      $916     $24,763   $23,456        $283   $23,739
    Property
     expenses   8,645       289       8,934     8,716          57     8,773
    -------------------------------------------------------------------------
    Property
     NOI      $15,202      $627     $15,829   $14,740        $226   $14,966
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    NOI
     Margin %    63.7%     68.5%       63.9%     62.8%       79.9%     63.0%
    -------------------------------------------------------------------------
    Occu-
     pancy %     89.4%     87.0%       89.3%     91.3%       92.6%     91.4%
    -------------------------------------------------------------------------
    

    The improvement in NOI was primarily caused by the improved results at
Avalon Mall in St. John's, Newfoundland and Labrador and the Portfolio
Acquisition. Same-asset NOI margin % is higher than 2008 due to the lower
common area expenses in 2009 and higher average net rent per square foot.
Occupancy is lower in 2009 compared to 2008 due to redevelopment work ongoing
at two properties as previously discussed.

    
    Office Properties
    -------------------------------------------------------------------------
    (In thousands         Six Months                  Six Months Ended
     of dollars,     Ended June 30, 2009                June 30, 2008
     except as  -------------------------------------------------------------
     otherwise   Same-    Acqui-                 Same-      Acqui-
     noted)     Asset   sitions       Total     Asset     sitions     Total
    -------------------------------------------------------------------------
    Property
     revenue  $11,486        $-     $11,486   $11,365          $-   $11,365
    Property
     expenses   6,135         -       6,135     5,869           -     5,869
    -------------------------------------------------------------------------
    Property
     NOI       $5,351        $-      $5,351    $5,496          $-    $5,496
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    NOI
     Margin %    46.6%        -%       46.6%     48.4%          -%     48.4%
    -------------------------------------------------------------------------
    Occu-
     pancy %     89.1%        -%       89.1%     90.9%          -%     90.9%
    -------------------------------------------------------------------------

    Occupancy levels have decreased slightly at the Halifax Developments
Properties and Terminal Centres in Moncton, New Brunswick when compared to the
prior year. Higher net rent per square foot at the Halifax Developments
Properties were offset by higher common area expenses, resulting in the higher
revenue but lower property NOI and NOI margin % for the office properties in
2009 compared to 2008.

    Mixed-Use Properties
    -------------------------------------------------------------------------
    (In thousands         Six Months                  Six Months Ended
     of dollars,     Ended June 30, 2009                June 30, 2008
     except as  -------------------------------------------------------------
     otherwise   Same-    Acqui-                 Same-      Acqui-
     noted)     Asset   sitions       Total     Asset     sitions     Total
    -------------------------------------------------------------------------
    Property
     revenue  $17,549        $-     $17,549   $17,651          $-   $17,651
    Property
     expenses   8,384         -       8,384     8,383           -     8,383
    -------------------------------------------------------------------------
    Property
     NOI       $9,165        $-      $9,165    $9,268          $-    $9,268
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    NOI
     Margin %    52.2%        -%       52.2%     52.5%          -%     52.5%
    -------------------------------------------------------------------------
    Occu-
     pancy %     95.0%        -%       95.0%     94.7%          -%     94.7%
    -------------------------------------------------------------------------

    The increase in mixed-use occupancy levels from 94.7% in 2008 to 95.0% in
2009 was offset by higher non-recoverable operating expenses, resulting in the
slightly lower NOI results for the six months ended June 30, 2009 when
compared to the six months ended June 30, 2008.

    OTHER 2009 PERFORMANCE MEASURES

    FFO and AFFO are not measures recognized under GAAP and do not have
standardized meanings prescribed by GAAP. As such, these non-GAAP financial
measures should not be considered as an alternative to net income, cash flow
from operations or any other measure prescribed under GAAP. FFO represents a
supplemental non-GAAP industry-wide financial measure of a real estate
organization's operating performance. AFFO is presented in this MD&A because
management believes this non-GAAP measure is relevant to the ability of
Crombie to earn and distribute returns to unitholders. Due to the accounting
changes related to the capitalization of items previously classified as
deferred tenant charges, FFO and AFFO for prior periods have been restated.
FFO and AFFO as computed by Crombie may differ from similar computations as
reported by other REIT's and, accordingly, may not be comparable to other such
issuers.

    Funds from Operations

    FFO represents a supplemental non-GAAP industry-wide financial measure of
a real estate organization's operating performance. Crombie has calculated FFO
in accordance with the recommendations of the Real Property Association of
Canada ("RealPAC") which defines FFO as net income (computed in accordance
with GAAP), excluding gains (or losses) from sales of depreciable real estate
and extraordinary items, plus depreciation and amortization expense, plus
future income taxes, and after adjustments for equity-accounted entities and
non-controlling interests. Crombie's method of calculating FFO may differ from
other issuers' methods and accordingly may not be directly comparable to FFO
reported by other issuers. A calculation of FFO for the six months ended June
30, 2009 and 2008 is as follows:

    -------------------------------------------------------------------------
                                            Six           Six
                                         Months        Months
                                          Ended         Ended
                                        June 30,      June 30,
    (In thousands of dollars)              2009          2008      Variance
    -------------------------------------------------------------------------
    Net income                           $8,320        $6,622        $1,698
    Add:
    Non-controlling interest              7,642         6,114         1,528
    Depreciation and amortization        23,294        18,752         4,542
    Depreciation and amortization
     on discontinued operations               -           139          (139)
    Future income taxes                     200         1,101          (901)
    Gain (loss) on disposal of assets         -           (77)           77
    -------------------------------------------------------------------------
    FFO                                 $39,456       $32,651        $6,805
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    The improvement in FFO for the six months ended June 30, 2009 was
primarily due to higher property NOI as a result of the individual acquisition
and the Portfolio Acquisition, offset in part by the increased interest
expense related to the individual and Portfolio acquisitions and higher
general and administrative expenses.

    Adjusted Funds from Operations

    Crombie considers AFFO to be a measure of its distribution-generating
ability. AFFO reflects cash available for distribution after the provision for
non-cash adjustments to revenue, maintenance capital expenditures and
maintenance tenant improvements ("TI") and leasing costs. The calculation of
AFFO for the six months ended June 30, 2009 and 2008 is as follows:

    -------------------------------------------------------------------------
                                            Six           Six
                                         Months        Months
                                          Ended         Ended
                                        June 30,      June 30,
    (In thousands of dollars)              2009          2008      Variance
    -------------------------------------------------------------------------
    FFO                                 $39,456       $32,651        $6,805
    Add:
    Above-market lease amortization       1,543         1,515            28
    Non-cash revenue impacts on
     discontinued operations                  -            22           (22)
    Less:
    Below-market lease amortization      (4,290)       (3,000)       (1,290)
    Straight-line rent adjustment        (2,126)       (1,018)       (1,108)
    Maintenance capital expenditures     (2,134)       (3,665)        1,531
    Maintenance  TI and leasing costs    (2,354)       (6,493)        4,139
    -------------------------------------------------------------------------
    AFFO                                $30,095       $20,012       $10,083
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    The AFFO result for the six months ended June 30, 2009 was affected by the
increase in FFO for the period and lower maintenance TI and leasing
expenditures. Details of the maintenance TI and capital expenditures are
outlined in the "Tenant Improvement and Capital Expenditures" section of the
MD&A.
    Pursuant to CSA Staff Notice 52-306 "(Revised) Non-GAAP Financial
Measures", non-GAAP measures such as AFFO should be reconciled to the most
directly comparable GAAP measure, which is interpreted to be the cash flow
from operating activities rather than net income. The reconciliation is as
follows:

    -------------------------------------------------------------------------
                                            Six           Six
                                         Months        Months
                                          Ended         Ended
                                        June 30,      June 30,
    (In thousands of dollars)              2009          2008      Variance
    -------------------------------------------------------------------------
    Cash provided by operating
     activities                         $17,076       $22,115       $(5,039)
    Add back (deduct):
    Recoverable/productive capacity
     enhancing TIs                          190         1,835        (1,645)
    Change in non-cash operating items   16,645           224        16,421
    Unit-based compensation expense         (23)          (20)           (3)
    Amortization of deferred
     financing charges                     (997)         (477)         (520)
    Amortization of swap settlements       (662)            -          (662)
    Maintenance capital expenditures     (2,134)       (3,665)        1,531
    -------------------------------------------------------------------------
    AFFO                                $30,095       $20,012       $10,083
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    

    Liquidity and Capital Resources

    Sources and Uses of Funds

    Cash flow generated from operating the property portfolio represents the
primary source of liquidity used to service the interest on debt, fund general
and administrative expenses, reinvest into the portfolio through capital
expenditures, as well as fund TI costs and distributions. In addition, Crombie
has the following sources of financing available to finance future growth:
secured short-term financing through an authorized revolving credit facility
of up to $150,000, of which $62,812 was drawn at June 30, 2009, a demand
facility with Empire of $13,800, of which $Nil was drawn at June 30, 2009, and
the issue of new equity and mortgage debt, pursuant to the Declaration of
Trust.

    
    -------------------------------------------------------------------------
                                            Six           Six
                                         Months        Months
                                          Ended         Ended
                                        June 30,      June 30,
    (In thousands of dollars)              2009          2008      Variance
    -------------------------------------------------------------------------
    Cash provided by (used in):
    Operating activities                $17,076       $22,115       $(5,039)
    Financing activities               $(15,868)     $372,635     $(388,503)
    Investing activities                $(5,236)    $(397,458)     $392,222
    -------------------------------------------------------------------------

    Operating Activities
    --------------------
    -------------------------------------------------------------------------
                                            Six           Six
                                         Months        Months
                                          Ended         Ended
                                        June 30,      June 30,
    (In thousands of dollars)              2009          2008      Variance
    -------------------------------------------------------------------------
    Cash provided by (used in):
    Net income and non-cash items       $36,265       $30,667        $5,598
    TI and leasing costs                 (2,544)       (8,328)        5,784
    Non-cash working capital            (16,645)         (224)      (16,421)
    -------------------------------------------------------------------------
    Cash provided by operating
     activities                         $17,076       $22,115       $(5,039)
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Fluctuations in cash provided by operating activities are largely
influenced by the change in non-cash working capital which can be affected by
the timing of receipts and payments. The details of the TI and leasing costs
during the six months of 2009 are outlined in the "Tenant Improvements and
Capital Expenditures" section of the MD&A.

    Financing Activities
    --------------------
    -------------------------------------------------------------------------
                                            Six           Six
                                         Months        Months
                                          Ended         Ended
                                        June 30,      June 30,
    (In thousands of dollars)              2009          2008      Variance
    -------------------------------------------------------------------------
    Cash provided by (used in):
    Net issue of convertible
     debentures                              $-       $28,786      $(28,786)
    Net issue of units                   64,574        59,215         5,359
    Settlement of interest rate
     swap agreement                      (4,535)            -        (4,535)
    Net issue (repayment) of
     commercial property debt           (54,150)      301,248      (355,398)
    Payment of distributions            (23,304)      (19,819)       (3,485)
    Other items (net)                     1,547         3,205        (1,658)
    -------------------------------------------------------------------------
    Cash provided by (used in)
     financing activities              $(15,868)     $372,635     $(388,503)
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Cash used in financing activities for the six months ended June 30, 2009
was $388,503 less than the six months ended June 30, 2008 primarily due to
issue of gross proceeds used in 2008 related to the financing of the Portfolio
Acquisition, partially offset by the gross proceeds of $66,855 from the public
offering of Units and the private placement of Class B LP Units with Empire
Subsidiaries on June 25, 2009 that was used to reduce commercial property
debt.

    Investing Activities
    --------------------

    Cash used in investing activities for the six months ended June 30, 2009
was $5,236. Of this, $4,922 was used for additions to commercial properties.
Cash used in investing activities for the six months ended June 30, 2008 of
$397,458 was primarily due to the Portfolio Acquisition on April 22, 2008.

    Tenant Improvement and Capital Expenditures
    -------------------------------------------

    There are two types of TI and capital expenditures:

    - maintenance TI and capital expenditures that maintain existing
      productive capacity; and

    - productive capacity enhancement expenditures.

    Maintenance TI and capital expenditures are reinvestments in the portfolio
to maintain the productive capacity of the existing assets. These costs are
capitalized and depreciated over their useful lives and deducted when
calculating AFFO.
    Productive capacity enhancement expenditures are costs incurred that
increase the property level NOI, or expand the GLA of a property, by a minimum
threshold and thus enhance the property's overall value. These costs are then
evaluated to ensure they are fully financeable. Productive capacity
enhancement expenditures are capitalized and depreciated over their useful
lives, but not deducted when calculating AFFO as they are considered
financeable rather than having to be funded from operations.
    Expenditures for TI's occur when renewing existing tenant leases or for
new tenants occupying a new space. Typically, leasing costs for existing
tenants are lower on a per square foot basis than for new tenants. However,
new tenants may provide more overall cash flow to Crombie through higher rents
or improved traffic to a property. The timing of such expenditures fluctuates
depending on the satisfaction of contractual terms contained in the leases.

    -------------------------------------------------------------------------
                                                          Six           Six
                                                       Months        Months
                                                        Ended         Ended
                                                      June 30,      June 30,
    (In thousands of dollars)                            2009          2008
    -------------------------------------------------------------------------
    Total additions to commercial properties           $4,922        $7,515
    Less: amounts recoverable from ECL                      -        (2,389)
    -------------------------------------------------------------------------
    Net additions to commercial properties              4,922         5,126
    Less: productive capacity enhancements             (2,788)       (1,461)
    -------------------------------------------------------------------------
    Maintenance capital expenditures                   $2,134        $3,665
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


    -------------------------------------------------------------------------
                                                          Six           Six
                                                       Months        Months
                                                        Ended         Ended
                                                      June 30,      June 30,
    (In thousands of dollars)                            2009          2008
    -------------------------------------------------------------------------
    Total additions to TI and leasing costs            $2,544        $8,328
    Less: amounts recoverable from ECL                   (159)       (1,384)
    -------------------------------------------------------------------------
    Net additions to TI and leasing costs               2,385         6,944
    Less: productive capacity enhancements                (31)         (451)
    -------------------------------------------------------------------------
    Maintenance TI and leasing costs                   $2,354        $6,493
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    The lower maintenance capital expenditures are primarily as a result of
the cautious outlook on capital intensive projects during the current economic
environment.
    The lower maintenance TI expenditures during the first six months of 2009,
when compared to the same period in 2008, was primarily due to early
renegotiation in the first quarter of 2008 of lease renewals that were
scheduled to expire in 2009 at a cost of $2,823.
    Productive capacity enhancements during the quarter consisted of the
redevelopment of Valley Mall in Corner Brook, Newfoundland and Labrador and
the conversion of Fort Edward Mall in Windsor, Nova Scotia from a retail
enclosed property to a retail plaza.

    Capital Structure

    -------------------------------------------------------------------------
    (In thousands   Jun. 30,    Mar. 31,    Dec. 31,    Sep. 30,    Jun. 30,
     of dollars)       2009        2009        2008        2008        2008
    -------------------------------------------------------------------------
    Commercial
     property
     debt          $759,223    $812,342    $808,971    $820,634    $812,016
    Convertible
     debentures     $29,090     $29,029     $28,968     $28,907     $28,847
    Non-
     controlling
     interest      $233,292    $197,115    $199,163    $218,205    $224,871
    Unitholders'
     equity        $255,475    $213,351    $215,558    $236,241    $243,472
    -------------------------------------------------------------------------

    Bank Credit Facilities and Commercial Property Debt

    Crombie has in place an authorized floating rate revolving credit facility
of up to $150,000 (the "Revolving Credit Facility"), $62,812 of which was
drawn as at June 30, 2009. The Revolving Credit Facility is secured by a pool
of first and second mortgages and negative pledges on certain properties. The
floating interest rate is based on specified margins over prime rate or
bankers acceptance rates. The specified margin increases as Crombie's overall
debt leverage increases. Funds available for drawdown pursuant to the
Revolving Credit Facility are determined with reference to the value of the
Borrowing Base (as defined under "Borrowing Capacity and Debt Covenants")
relative to certain financial covenants of Crombie. As at June 30, 2009,
Crombie had sufficient Borrowing Base to permit $150,000 of funds to be drawn
down pursuant to the Revolving Credit Facility, subject to certain other
financial covenants. See "Borrowing Capacity and Debt Covenants".
    As of June 30, 2009, Crombie had fixed rate mortgages outstanding of
$564,101 ($554,745 after including the marked-to-market adjustment of $9,356),
carrying a weighted average interest rate of 5.48% (after giving effect to the
interest rate subsidy from ECL under an omnibus subsidy agreement) and a
weighted average term to maturity of 5.8 years.
    In April of 2008, Crombie entered into an 18 month floating rate Term
Facility of $280,000 to partially finance the Portfolio Acquisition. On
September 30, 2008, Crombie completed a mortgage financing on certain of the
properties acquired in order to refinance $100,000 of the Term Facility. On
February 12, 2009, Crombie completed $39,000 of additional fixed rate mortgage
financings for eight of the properties acquired pursuant to the Portfolio
Acquisition in order to refinance the Term Facility. A third party provided
$32,800 of fixed rate first mortgage financing, while $6,200 of fixed rate
second mortgage financing was provided by Empire. In June of 2009, Crombie
completed the extension of the remaining Term Facility for two years with a
syndicate of Canadian chartered banks. The floating interest rate is based on
a specified margin over prime rate or bankers acceptance rate. As security for
the Term Facility, Crombie has granted a charge on the secured properties
together with an assignment of leases. The Term Facility contains financial
and non-financial covenants that are customary for a credit facility of this
nature and which mirror the covenants set forth in the Revolving Credit
Facility.
    Crombie has secured a $13,800 floating rate demand credit facility with
Empire (the "Empire Demand Facility") on substantially the same terms and
conditions that govern the Revolving Credit Facility. This Empire Demand
Facility was put in place to ensure that Crombie maintains adequate liquidity
in order to fund its daily operating activities while volatility in the
financial markets continues while also mitigating the risk of Crombie not
being in compliance with certain covenants under the Revolving Credit
Facility. Crombie had $Nil drawn against the Empire Demand Facility as at June
30, 2009.
    From time to time, Crombie has entered into interest rate swap agreements
to manage the interest rate profile of its current or future debts without an
exchange of the underlying principal amount (see "Risk Management").

    Principal repayments of the debt are scheduled as follows:
    -------------------------------------------------------------------------
                                  Fixed
                              Rate Debt
                               Maturing
                Payments of      during    Floating       Total
    Year          Principal        Year   Rate Debt    Maturity   % of Total
    -------------------------------------------------------------------------
    Remaining
     2009            $9,513          $-          $-      $9,513         1.3%
    2010             15,489     106,079           -     121,568        16.1%
    2011             15,394      26,786     201,812     243,992        32.2%
    2012             15,956           -           -      15,956         2.1%
    2013             16,757      30,041           -      46,798         6.2%
    Thereafter       61,973     256,757           -     318,730        42.1%
    -------------------------------------------------------------------------
    Total(1)       $135,082    $419,663    $201,812    $756,557       100.0%
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    (1) Excludes fair value debt adjustment of $9,356 and the deferred
        financing costs of $6,690

    Convertible debentures
    ----------------------

    On March 20, 2008, Crombie issued $30,000 in Debentures related to the
Portfolio Acquisition.
    Each Debenture will be convertible into units of Crombie at the option of
the Debenture holder up to the maturity date of March 20, 2013 at a conversion
price of $13 per unit.
    The Debentures bear interest at an annual fixed rate of 7%, payable
semi-annually, on June 30 and December 31 in each year. The Debentures are not
redeemable prior to March 20, 2011. From March 20, 2011 to March 20, 2012, the
Debentures may be redeemed, in whole or in part, on not more than 60 days' and
not less than 30 days' prior notice, at a redemption price equal to the
principal amount thereof plus accrued and unpaid interest, provided that the
volume-weighted average trading price of the Units on the Toronto Stock
Exchange for the 20 consecutive trading days ending on the fifth trading day
preceding the date on which notice on redemption is given exceeds 125% of the
conversion price. After March 20, 2012, and prior to March 20, 2013, the
Debentures may be redeemed, in whole or in part, at anytime at the redemption
price equal to the principal amount thereof plus accrued and unpaid interest.
Provided that there is not a current event of default, Crombie will have the
option to satisfy its obligation to pay the principal amount of the Debentures
at maturity or upon redemption, in whole or in part, by issuing the number of
units equal to the principal amount of the Debentures then outstanding divided
by 95% of the volume-weighted average trading price of the units for a
stipulated period prior to the date of redemption or maturity, as applicable.
Upon change of control of Crombie, Debenture holders have the right to put the
Debentures to Crombie at a price equal to 101% of the principal amount plus
accrued and unpaid interest.
    Crombie will also have an option to pay interest on any interest payment
date by selling units and applying the proceeds to satisfy its interest
obligation.
    Transaction costs related to the Debentures have been deferred and are
being amortized into interest expense over the term of the Debentures using
the effective interest rate method.

    Unitholders' Equity
    -------------------

    In April 2009 there were 43,408 Units awarded as part of the Employee Unit
Purchase Plan (April 2008 - 34,053). On June 25, 2009 there were 4,725,000
Units issued, including the underwriters' over-allotment Units, through a
public offering. Concurrent with the public offering of Units, in satisfaction
of its pre-emptive right, ECL purchased 3,846,154 Class B LP Units and the
attached Special Voting Units on a private placement basis. Total units
outstanding at August 6, 2009 were as follows:

    -------------------------------------------------------------------------
    Units                                                        32,040,296
    Special Voting Units(1)                                      28,925,730
    -------------------------------------------------------------------------
    (1) Crombie Limited Partnership, a subsidiary of Crombie, has also issued
        28,925,730 Class B LP Units. These Class B LP units accompany the
        Special Voting Units, are the economic equivalent of a Unit, and are
        convertible into Units on a one-for-one basis.

    Taxation of Distributions

    Crombie, through its subsidiaries, has a large asset base that is
depreciable for Canadian income tax purposes. Consequently, certain of the
distributions from Crombie are treated as returns of capital and are not
taxable to Canadian resident unitholders for Canadian income tax purposes. The
composition for tax purposes of distributions from Crombie may change from
year to year, thus affecting the after-tax return to unitholders.
    The following table summarizes the history of the taxation of
distributions from Crombie:

    -------------------------------------------------------------------------
                                         Return    Investment       Capital
    Taxation Year                    of Capital        Income         Gains
    -------------------------------------------------------------------------
    2006 per $ of distribution             40.0%         60.0%            -
    2007 per $ of distribution             25.5%         74.4%          0.1%
    2008 per $ of distribution             27.2%         72.7%          0.1%
    -------------------------------------------------------------------------

    Borrowing Capacity and Debt Covenants

    Under the amended terms governing the Revolving Credit Facility, Crombie
is entitled to borrow a maximum of 70% of the fair market value of assets
subject to a first security position and 60% of the excess of fair market
value over first mortgage financing of assets subject to a second security
position or a negative pledge (the "Borrowing Base"). The Revolving Credit
Facility provides Crombie with flexibility to add or remove properties from
the Borrowing Base, subject to compliance with certain conditions. The terms
of the Revolving Credit Facility also require that Crombie must maintain
certain coverage ratios above prescribed levels:

    - annualized NOI for the prescribed properties must be a minimum of
      1.4 times the coverage of the related annualized debt service
      requirements; and

    - annualized NOI on all properties must be a minimum of 1.4 times the
      coverage of all annualized debt service requirements.

    The Revolving Credit Facility also contains a covenant of Crombie that ECL
must maintain a minimum 40% voting interest in Crombie. If ECL reduces its
voting interest below this level, Crombie will be required to renegotiate the
Revolving Credit Facility or obtain alternative financing. Pursuant to an
exchange agreement and while such covenant remains in place, ECL will be
required to give Crombie at least six months' prior written notice of its
intention to reduce its voting interest below 40%.
    The Revolving Credit Facility also contains a covenant limiting the amount
which may be utilized under the Revolving Credit Facility at any time. This
covenant provides that the aggregate of amounts drawn under the Revolving
Credit Facility plus any negative mark-to-market position on any interest rate
swap agreements or other hedging instruments may not exceed the "Aggregate
Coverage Amount", which is based on a modified calculation of the Borrowing
Base, as defined in the Revolving Credit Facility. In order to hedge its
interest rate risk on various debt commitments maturing through 2011, Crombie
has entered into a series of interest rate swap agreements on notional
principal amounts totalling approximately $288,334 at June 30, 2009 that have
settlement dates between August 1, 2009 and July 4, 2011. The unprecedented
volatility in the capital markets has caused the mark-to-market adjustment on
these interest rate swap agreements to reach an out-of-the-money position of
approximately $31,831 at June 30, 2009. There is no immediate cash impact from
this mark-to-market adjustment. The unfavourable difference in the
mark-to-market amount of these interest rate swap agreements is reflected in
other comprehensive income (loss) rather than net income as the swaps are all
designated and effective hedges. However, the deterioration in the
mark-to-market position may have the impact of reducing Crombie's available
credit pursuant to the Revolving Credit Facility.
    At June 30, 2009, the amount available under the Revolving Credit Facility
was $79,284 after calculation of the Aggregate Coverage Amount.
    At June 30, 2009, Crombie remained in compliance with all debt covenants.
    As previously discussed, Crombie has secured a $13,800 floating rate
Empire Demand Facility. The Empire Demand Facility ensures that Crombie
maintains adequate liquidity in order to fund its daily operating activities
as the volatility in the financial markets continues while also mitigating the
risk of Crombie not being in compliance with certain covenants under the
Revolving Credit Facility.

    Debt to Gross Book Value Ratio

    When calculating debt to gross book value, debt is defined under the terms
of the Declaration of Trust as bank loans plus commercial property debt. Gross
book value means, at any time, the book value of the assets of Crombie and its
consolidated subsidiaries plus deferred financing charges, accumulated
depreciation and amortization in respect of Crombie's properties (and related
intangible assets) less (i) the amount of any receivable reflecting interest
rate subsidies on any debt assumed by Crombie and (ii) the amount of future
income tax liability arising out of the fair value adjustment in respect of
the indirect acquisitions of certain properties. If approved by a majority of
the independent trustees, the appraised value of the assets of Crombie and its
consolidated subsidiaries may be used instead of book value.
    The debt to gross book value ratio was 50.9% at June 30, 2009 compared to
54.8% at March 31, 2009. The reduction was due to the proceeds of the June 25,
2009 public offering of Units and concurrent private placement of Class B LP
Units being applied to reduce borrowings under the Revolving Credit Facility.
This leverage ratio is below the maximum 60%, or 65% including convertible
debentures, as outlined by Crombie's Declaration of Trust. On a long-term
basis, Crombie intends to maintain overall indebtedness in the range of 50% to
55% of gross book value, depending upon Crombie's future acquisitions and
financing opportunities.


    -------------------------------------------------------------------------
    (In thousands
     of dollars)
     except as        As at       As at       As at       As at       As at
     otherwise      Jun. 30,    Mar. 31,    Dec. 31,    Sep. 30,    Jun. 30,
     noted)            2009        2009        2008        2008        2008
    -------------------------------------------------------------------------
    Mortgages
     payable       $564,101    $565,980    $531,970    $524,307    $425,945
    Convertible
     debentures      30,000      30,000      30,000      30,000      30,000
    Term financing  139,000     140,323     178,824     180,000     280,000
    Revolving
     credit
     facility
     payable         62,812     111,400      93,400     121,585     111,475
    Demand credit
     facility
     payable              -           -      10,000           -           -
    -------------------------------------------------------------------------
    Total debt
     outstanding    795,913     847,703     844,194     855,892     847,420
    Less:
     Applicable
     fair value
     debt
     adjustment      (9,256)    (10,032)    (10,818)    (11,615)    (12,433)
    -------------------------------------------------------------------------
    Debt           $786,657    $837,671    $833,376    $844,277    $834,987
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Total
     assets      $1,470,474  $1,466,045  $1,483,219  $1,501,186  $1,501,754
    Add:
    Deferred
     financing
     charges          7,600       6,332       6,255       6,351       6,728
    Accumulated
     depreciation
     of
     commercial
     properties      57,715      51,796      45,865      40,105      34,339
    Accumulated
     amortization
     of
     intangible
     assets          66,492      60,836      53,505      45,995      38,454
    Less:
    Assets
     related to
     discontinued
     operations      (7,054)     (7,162)     (7,184)     (9,673)    (10,951)
    Interest
     rate subsidy    (9,256)    (10,032)    (10,818)    (11,615)    (12,433)
    Fair value
     adjustment
     to future
     taxes          (39,245)    (39,245)    (39,245)    (39,245)    (39,245)
    -------------------------------------------------------------------------
    Gross book
     value       $1,546,726  $1,528,570  $1,531,597  $1,533,104  $1,518,646
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Debt to
     gross book
     value             50.9%       54.8%       54.4%       55.1%       55.0%
    Maximum
     borrowing
     capacity(1)         65%         65%         65%         65%         65%
    -------------------------------------------------------------------------
    (1) Maximum permitted by the Declaration of Trust

    Debt and Interest Service Coverage Ratios

    Crombie's interest and debt service coverage ratios for the six months
ended June 30, 2009 were 2.79 times EBITDA and 1.96 times EBITDA. This
compares to 2.94 times EBITDA and 2.04 times EBITDA respectively for the six
months ended June 30, 2008. EBITDA should not be considered an alternative to
net income, cash flow from operations or any other measure of operations or
liquidity as prescribed by Canadian GAAP. EBITDA is not a GAAP financial
measure; however Crombie believes it is an indicative measure of its ability
to service debt requirements, fund capital projects and acquire properties.
EBITDA may not be calculated in a comparable measure reported by other
entities.

    -------------------------------------------------------------------------
                                                          Six           Six
                                                       Months        Months
                                                        Ended         Ended
                                                      June 30,      June 30,
    (In thousands of dollars)                            2009          2008
    -------------------------------------------------------------------------
    Property revenue                                 $103,885       $84,576
    Amortization of above-market leases                 1,543         1,515
    Amortization of below-market leases                (4,290)       (3,000)
    -------------------------------------------------------------------------
    Adjusted property revenue                         101,138        83,091
    Property expenses                                 (37,229)      (32,087)
    General and administrative expenses                (5,290)       (3,931)
    -------------------------------------------------------------------------
    EBITDA (1)                                        $58,619       $47,073
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Interest expense                                  $22,002       $16,465
    Amortization of deferred financing charges           (997)         (477)
    -------------------------------------------------------------------------
    Adjusted interest expense (2)                     $21,005       $15,988
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Debt repayments                                  $110,120       $45,735
    Amortization of fair value debt premium                (2)          (20)
    Payments relating to interest rate subsidy         (1,562)       (1,718)
    Payments relating to Term Facility                (39,824)            -
    Payments relating to revolving credit facility    (49,900)      (30,000)
    Payments relating to demand credit facility       (10,000)            -
    Balloon payments on mortgages                           -        (6,922)
    -------------------------------------------------------------------------
    Adjusted debt repayments (3)                       $8,832        $7,075
    -------------------------------------------------------------------------
    Interest service coverage ratio ((1)/(2))            2.79          2.94
    -------------------------------------------------------------------------
    Debt service coverage ratio ((1)/((2)+(3)))          1.96          2.04
    -------------------------------------------------------------------------

    Distributions and Distribution Payout Ratios

    Distribution Policy
    -------------------

    Pursuant to Crombie's Declaration of Trust, it is required, at a minimum,
to make distributions to Unitholders equal to the amount of net income and net
realized capital gains of Crombie as is necessary to ensure that Crombie will
not be liable for income taxes. Within these guidelines, Crombie intends to
make annual cash distributions to Unitholders equal to approximately 70% of
its FFO and 95% of its AFFO on an annual basis.

    Details of distributions to Unitholders are as follows:

    -------------------------------------------------------------------------
                                                  Six Months    Six Months
                                                       Ended         Ended
    (Distribution amounts represented                June 30,      June 30,
     in thousands of dollars)                           2009          2008
    -------------------------------------------------------------------------
    Distributions to Unitholders                      $12,497       $10,983
    Distributions to Special Voting Unitholders        11,446         9,763
    -------------------------------------------------------------------------
    Total distributions                               $23,943       $20,746
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Number of diluted Units                        27,449,862    23,838,755
    Number of diluted Special Voting Units         25,207,073    22,002,653
    -------------------------------------------------------------------------
    Total diluted weighted average Units           52,656,935    45,841,408
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Distributions per unit                              $0.45         $0.45
    FFO payout ratio (target ratio equals 70%)           60.7%         63.5%
    AFFO payout ratio (target ratio equals 95%)          79.6%        103.7%
    -------------------------------------------------------------------------

    The FFO payout ratio of 60.7% was favourable to the target ratio as the
improved FFO reflected the net results from the individual property
acquisition and the Portfolio Acquisition.  The AFFO payout ratio of 79.6% was
favourable to the target ratio as a result of the higher FFO and lower overall
TI and maintenance capital expenditures as previously discussed.

    Second Quarter Results

    Comparison to Previous Year
    -------------------------------------------------------------------------
                                                   Quarter Ended
                                     ----------------------------------------
    (In thousands of dollars, except    June 30,      June 30,
    where otherwise noted)                 2009          2008      Variance
    -------------------------------------------------------------------------
    Property revenue                    $50,893       $47,314        $3,579
    Property expenses                    17,258        16,775          (483)
    -------------------------------------------------------------------------
    Property NOI                         33,635        30,539         3,096
    -------------------------------------------------------------------------
    NOI margin percentage                  66.1%         64.5%          1.6%
    -------------------------------------------------------------------------
    Expenses:
      General and administrative          3,646         1,979        (1,667)
      Interest                           11,272         9,965        (1,307)
      Depreciation and amortization      10,803        10,757           (46)
    -------------------------------------------------------------------------
                                         25,721        22,701        (3,020)
    -------------------------------------------------------------------------
    Income from continuing operations
     before other items, income
     taxes and non-controlling
     interest                             7,914         7,838            76
    Other items                               -            97           (97)
    -------------------------------------------------------------------------
    Income from continuing operations
     before income taxes and
     non-controlling interest             7,914         7,935           (21)
    Income taxes expense  - Future            -           701           701
    -------------------------------------------------------------------------
    Income from continuing operations
     before non-controlling interest      7,914         7,234           680
    Income from discontinued
     operations                               -           136          (136)
    -------------------------------------------------------------------------
    Income before non-controlling
     interest                             7,914         7,370           544
    Non-controlling interest              3,786         3,531          (255)
    -------------------------------------------------------------------------
    Net income                           $4,128        $3,839          $289
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Basic and diluted net income
     per Unit                             $0.15         $0.15            $-
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Basic weighted average Units
     outstanding (in 000's)          27,465,211    25,909,792
    ----------------------------------------------------------
    ----------------------------------------------------------
    Diluted weighted average Units
     outstanding (in 000's)          27,625,880    26,028,526
    ----------------------------------------------------------
    ----------------------------------------------------------

    Net income for the quarter ended June 30, 2009 of $4,128 increased by $289
from $3,839 for the quarter ended June 30, 2008. The increase was primarily
due to:

    - higher property NOI from the individual property acquisition and the
      Portfolio; offset in part by

    - higher interest and depreciation charges, due primarily to the
      individual property acquisition and the Portfolio Acquisition and
      higher general and administrative expenses.

    Property Revenue and Property Expenses

    -------------------------------------------------------------------------
                                             Quarter Ended
                                     ----------------------------
                                        June 30,      June 30,
    (In thousands of dollars)              2009          2008      Variance
    -------------------------------------------------------------------------
    Same-asset property revenue         $36,207       $37,221       $(1,014)
    Acquisition property revenue         14,686        10,093         4,593
    -------------------------------------------------------------------------
    Property revenue                    $50,893       $47,314        $3,579
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Same-asset property revenue of $36,207 for the quarter ended June 30, 2009
was 2.7% lower than the quarter ended June 30, 2008 due primarily to decreased
revenue from lower recoverable common are expenses and a one-time head lease
adjustment upon final release of the obligation governing the agreement
between ECL and Crombie for County Fair Mall in Summerside, Prince Edward
Island and Uptown Centre in Fredericton, New Brunswick, partially offset by
the increased average rent per square foot ($12.58 in 2009 and $12.41 in
2008). The adjustment was paid to ECL to reflect their overachievement in the
leasing results for these two locations which will benefit Crombie in higher
rental income on an ongoing basis.

    -------------------------------------------------------------------------
                                             Quarter Ended
                                     ----------------------------
                                        June 30,      June 30,
    (In thousands of dollars)              2009          2008      Variance
    -------------------------------------------------------------------------
    Same-asset property expenses        $13,968       $14,593         $(625)
    Acquisition property expenses         3,290         2,182         1,108
    -------------------------------------------------------------------------
    Property expenses                   $17,258       $16,775          $483
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Same-asset property expenses of $13,968 for the quarter ended June 30,
2009 were 4.3% lower than the quarter ended June 30, 2008 due to decreased
recoverable common area expenses primarily from decreased snow removal costs.

    -------------------------------------------------------------------------
                                             Quarter Ended
                                     ----------------------------
                                        June 30,      June 30,
    (In thousands of dollars)              2009          2008      Variance
    -------------------------------------------------------------------------
    Same-asset property NOI             $22,239       $22,628         $(389)
    Acquisition property NOI             11,396         7,911         3,485
    -------------------------------------------------------------------------
    Property NOI                        $33,635       $30,539        $3,096
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Same-asset NOI for the quarter ended June 30, 2009 decreased by 1.7% over
the quarter ended June 30, 2008.

    Property NOI for the quarter ended June 30, 2009 by region was as follows:

    -------------------------------------------------------------------------
    (In                          2009                        2008
    thousands ------------------------------------------
    of       Property  Property    Property  NOI % of    NOI % of
    dollars)  Revenue  Expenses         NOI   revenue     revenue  Variance
    -------------------------------------------------------------------------
    Nova
     Scotia   $23,502    $8,729     $14,773      62.9%       61.8%      1.1%
    Newfound-
     land and
     Labrador   7,835     2,050       5,785      73.8%       71.7%      2.1%
    New
     Brunswick  5,876     2,471       3,405      57.9%       55.8%      2.1%
    Ontario     8,241     2,568       5,673      68.8%       65.2%      3.6%
    Prince
     Edward
     Island     1,036       289         747      72.1%       77.4%    (5.3)%
    Quebec      3,707       967       2,740      73.9%       78.0%    (4.1)%
    Saska-
     tchewan      696       184         512      73.6%       82.8%    (9.2)%
    -------------------------------------------------------------------------
    Total     $50,893   $17,258     $33,635      66.1%       64.5%      1.6%
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    The overall 1.6% increase in NOI as a % of revenue, as well as specific
provincial increases in Nova Scotia, Newfoundland and Labrador, New Brunswick
and Ontario was primarily due to the Portfolio Acquisition. Prince Edward
Island's decrease in NOI % of revenue is attributable to the finalization of
the head lease obligation under the terms of the agreement with ECL combined
the relatively smaller number of properties in the province and the timing and
nature of expenses. Quebec's decrease in NOI % of revenue is attributable to
higher recoverable common area expenses. The decrease in NOI % of revenue in
Saskatchewan is due to River City Centre being owned by Crombie for only 19
days in the 2008 results.

    General and Administrative Expenses

    The following table outlines the major categories of general and
administrative expenses.

    -------------------------------------------------------------------------
                                             Quarter Ended
                                     ----------------------------
                                        June 30,      June 30,
    (In thousands of dollars)              2009          2008      Variance
    -------------------------------------------------------------------------
    Salaries and benefits                $2,539          $962        $1,577
    Professional fees                       394           454           (60)
    Public company costs                    290           269            21
    Rent and occupancy                      188           167            21
    Other                                   235           127           108
    -------------------------------------------------------------------------
    General and administrative costs     $3,646        $1,979        $1,667
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    As a percentage of revenue              7.2%          4.2%          3.0%
    -------------------------------------------------------------------------

    General and administrative expenses increased by 84.2% for the quarter
ended June 30, 2009 to $3,646 compared to $1,979 for the quarter ended June
30, 2008. The increase in expenses was primarily due to one time retirement
costs associated with the retirement of Crombie's Chief Executive Officer on
August 5, 2009.

    Interest Expense

    -------------------------------------------------------------------------
                                             Quarter Ended
                                     ----------------------------
                                        June 30,      June 30,
    (In thousands of dollars)              2009          2008      Variance
    -------------------------------------------------------------------------
    Same-asset interest expense          $6,592        $6,303          $289
    Acquisition interest expense          4,680         3,662         1,018
    -------------------------------------------------------------------------
    Interest expense                    $11,272        $9,965        $1,307
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Same-asset interest expense of $6,592 for the quarter ended June 30, 2009
increased by 4.6% when compared to the quarter ended June 30, 2008 due to the
amortization of payments made on the settlement of interest rate swap
agreements of $455 and slightly higher average interest rates on mortgages
entered into during 2008 for properties held since the IPO, offset in part by
a decrease in the floating interest rate on the revolving credit facility.
    There is an agreement between ECL and Crombie whereby ECL provides a
monthly interest rate subsidy to Crombie to reduce the effective interest
rates to 5.54% on certain mortgages that were assumed at Crombie's IPO for
their remaining term. Over the term of this agreement, management expects this
subsidy to aggregate to the amount of approximately $20,564. The amount of the
interest rate subsidy received during the quarter ended June 30, 2009 was $776
(quarter ended June 30, 2008 - $852). The interest rate subsidy is received by
Crombie through monthly repayments by ECL of amounts due under one of the
demand notes issued by ECL to CDL.

    Depreciation and Amortization

    -------------------------------------------------------------------------
                                             Quarter Ended
                                     ----------------------------
                                        June 30,      June 30,
    (In thousands of dollars)              2009          2008      Variance
    -------------------------------------------------------------------------
    Same-asset depreciation and
     amortization                        $6,551        $7,795       $(1,244)
    Acquisition depreciation and
     amortization                         4,252         2,962         1,290
    -------------------------------------------------------------------------
    Depreciation and amortization       $10,803       $10,757           $46
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Same-asset depreciation and amortization of $6,551 for the quarter ended
June 30, 2009 was 16.0% lower than the quarter ended June 30, 2008 due
primarily to the intangible assets related to the origination costs and the
in-place leases associated with the properties purchased at the date of the
IPO being fully amortized, offset in part by depreciation on fixed asset
additions and amortization on tenant improvement and lease costs incurred
since June 30, 2008, combined with the expenses resulting from the
reallocation of $3,946 of costs to commercial properties from other assets due
to the retroactive implementation of accounting guidelines as discussed in
"Changes in Accounting Policies and Estimates". Depreciation and amortization
consists of:

    -------------------------------------------------------------------------
                                             Quarter Ended
                                     ----------------------------
                                        June 30,      June 30,
    (In thousands of dollars)              2009          2008      Variance
    -------------------------------------------------------------------------
    Depreciation of commercial
     properties                          $5,027        $4,418          $609
    Amortization of tenant
     improvements/lease costs               892           700           192
    Amortization of intangible assets     4,884         5,639          (755)
    -------------------------------------------------------------------------
    Depreciation and amortization       $10,803       $10,757           $46
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Sector Information

    While Crombie does not distinguish or group its operations on a
geographical or other basis, Crombie provides the following sector information
as supplemental disclosure.

    Retail Freestanding Properties

    -------------------------------------------------------------------------
    (In thousands          Quarter                           Quarter
     of dollars,     ended June 30, 2009               ended June 30, 2008
     except as  -------------------------------------------------------------
     otherwise   Same-    Acqui-                 Same-      Acqui-
     noted)     Asset   sitions       Total     Asset     sitions     Total
    -------------------------------------------------------------------------
    Property
     revenue     $453    $6,832      $7,285      $351      $5,042    $5,393
    Property
     expenses     125     1,263       1,388        52       1,078     1,130
    -------------------------------------------------------------------------
    Property
     NOI         $328    $5,569      $5,897      $299      $3,964    $4,263
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    NOI
     Margin %    72.4%     81.5%       80.9%     85.2%       78.6%     79.0%
    -------------------------------------------------------------------------
    Occu-
     pancy %    100.0%    100.0%      100.0%    100.0%      100.0%    100.0%
    -------------------------------------------------------------------------


    The improvement in the retail freestanding property NOI was caused by the
Portfolio Acquisition.  The same-asset NOI % margin is lower as a result of
the fluctuations that can occur in a single property's results from quarter to
quarter.

    Retail Plaza Properties
    -------------------------------------------------------------------------
    (In thousands          Quarter                           Quarter
     of dollars,     ended June 30, 2009               ended June 30, 2008
     except as  -------------------------------------------------------------
     otherwise   Same-    Acqui-                 Same-      Acqui-
     noted)     Asset   sitions       Total     Asset     sitions     Total
    -------------------------------------------------------------------------
    Property
     revenue  $10,090    $7,419     $17,509   $11,023      $4,747   $15,770
    Property
     expenses   3,064     1,912       4,976     3,456       1,047     4,503
    -------------------------------------------------------------------------
    Property
     NOI       $7,026    $5,507     $12,533    $7,567      $3,700   $11,267
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    NOI
     Margin %    69.6%     74.2%       71.6%     68.6%       77.9%     71.4%
    -------------------------------------------------------------------------
    Occu-
     pancy %     94.3%     97.8%       95.8%     95.3%       97.4%     96.4%
    -------------------------------------------------------------------------

    The improvement in the retail plaza property NOI was primarily caused by
the Portfolio Acquisition. Occupancy in the same-assets at June 30, 2009 is
lower than June 30, 2008, and slightly lower average net rent per square foot
results has led to decreased revenue overall compared to the prior year.

    Retail Enclosed Properties
    -------------------------------------------------------------------------
    (In thousands          Quarter                           Quarter
     of dollars,     ended June 30, 2009               ended June 30, 2008
     except as  -------------------------------------------------------------
     otherwise   Same-    Acqui-                 Same-      Acqui-
     noted)     Asset   sitions       Total     Asset     sitions     Total
    -------------------------------------------------------------------------
    Property
     revenue  $11,421      $435     $11,856   $11,159        $304   $11,463
    Property
     expenses   3,910       115       4,025     4,169          57     4,226
    -------------------------------------------------------------------------
    Property
     NOI       $7,511      $320      $7,831    $6,990        $247    $7,237
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    NOI
     Margin %    65.8%     73.6%       66.1%     62.6%       81.3%     63.1%
    -------------------------------------------------------------------------
    Occu-
     pancy %     89.4%     87.0%       89.3%     91.3%       92.6%     91.4%
    -------------------------------------------------------------------------

    The improvement in NOI was primarily caused by the improved results at
Avalon Mall in St. John's, Newfoundland and Labrador and the Portfolio
Acquisition. Same-asset NOI margin % is higher than 2008 due to the lower
recoverable expenses in 2009. Occupancy is lower in 2009 compared to 2008 due
to redevelopment work ongoing at two properties as previously discussed.

    Office Properties
    -------------------------------------------------------------------------
    In thousands          Quarter                           Quarter
     of dollars,     ended June 30, 2009               ended June 30, 2008
     except as  -------------------------------------------------------------
     otherwise   Same-    Acqui-                 Same-      Acqui-
     noted)     Asset   sitions       Total     Asset     sitions     Total
    -------------------------------------------------------------------------
    Property
     revenue   $5,598        $-      $5,598    $5,849          $-    $5,849
    Property
     expenses   2,907         -       2,907     2,812           -     2,812
    -------------------------------------------------------------------------
    Property
     NOI       $2,691        $-      $2,691    $3,037          $-    $3,037
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    NOI
     Margin %    48.1%        -%       48.1%     51.9%          -%     51.9%
    -------------------------------------------------------------------------
    Occu-
     pancy %     89.1%        -%       89.1%     90.9%          -%     90.9%
    -------------------------------------------------------------------------

    Occupancy levels have decreased slightly at the Halifax Developments
Properties and Terminal Centres in Moncton, New Brunswick when compared to the
prior year. The decrease in occupancy at Terminal Centres attributed to the
lower revenue as a result of less recovery of common area expenses. These
factors have been partially offset by higher net rent per square foot at the
Halifax Developments in 2009 compared to 2008.

    Mixed-Use Properties
    -------------------------------------------------------------------------
    In thousands          Quarter                           Quarter
     of dollars,     ended June 30, 2009               ended June 30, 2008
     except as  -------------------------------------------------------------
     otherwise   Same-    Acqui-                 Same-      Acqui-
     noted)     Asset   sitions       Total     Asset     sitions     Total
    -------------------------------------------------------------------------
    Property
     revenue   $8,645        $-      $8,645    $8,839          $-    $8,839
    Property
     expenses   3,962         -       3,962     4,104           -     4,104
    -------------------------------------------------------------------------
    Property
     NOI       $4,683        $-      $4,683    $4,735          $-    $4,735
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    NOI
     Margin %    54.2%        -%       54.2%     53.6%          -%     53.6%
    -------------------------------------------------------------------------
    Occu-
     pancy %     95.0%        -%       95.0%     94.7%          -%     94.7%
    -------------------------------------------------------------------------

    The increase in mixed-use occupancy levels from 94.7% in 2008 to 95.0% in
2009 and improved average net rent per square foot from leasing activity were
offset by higher non-recoverable operating expenses, resulting in the slightly
lower NOI results for the quarter ended June 30, 2009 when compared to the
quarter ended June 30, 2008. The NOI margin has increased as a result of
decreased common area expenses.

    Other Second Quarter Performance Measures

    Funds from Operations

    A calculation of FFO for the quarter ended June 30, 2009 and 2008 is as
follows:

    -------------------------------------------------------------------------
                                        Quarter       Quarter
                                          Ended         Ended
                                        June 30,      June 30,
    (In thousands of dollars)              2009          2008      Variance
    -------------------------------------------------------------------------
    Net income                           $4,128        $3,839          $289
    Add:
    Non-controlling interest              3,786         3,531           255
    Depreciation and amortization        10,803        10,757            46
    Depreciation and amortization
     on discontinued operations               -            61           (61)
    Future income taxes                       -           701          (701)
    Less:
    Gain on disposition of land               -           (77)           77
    -------------------------------------------------------------------------
    FFO                                 $18,717       $18,812          $(95)
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    The slight decrease in FFO for the quarter ended June 30, 2009 was
primarily due to increased general and administrative expenses in the second
quarter of 2009 offset by the net results of the individual acquisition and
the Portfolio Acquisition.

    Adjusted Funds from Operations

    The calculation of AFFO for the quarters ended June 30, 2009 and 2008 is
as follows:

    -------------------------------------------------------------------------
                                        Quarter       Quarter
                                          Ended         Ended
                                        June 30,      June 30,
    (In thousands of dollars)              2009          2008      Variance
    -------------------------------------------------------------------------
    FFO                                 $18,717       $18,812          $(95)
    Add:
    Above-market lease amortization         772           762            10
    Non-cash revenue impacts on
     discontinued operations                  -            10           (10)
    Less:
    Below-market lease amortization      (2,145)       (1,814)         (331)
    Straight-line rent adjustment        (1,243)         (701)         (542)
    Maintenance capital expenditures       (918)       (2,481)        1,563
    Maintenance  TI and leasing costs    (1,114)       (2,672)        1,558
    -------------------------------------------------------------------------
    AFFO                                $14,069       $11,916        $2,153
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    The AFFO result for the quarter ended June 30, 2009 was primarily affected
by the lower maintenance TI and leasing expenditures. Details of the
maintenance TI and capital expenditures are outlined in the "Tenant
Improvement and Capital Expenditures" section of the MD&A.

    Pursuant to CSA Staff Notice 52-306 "(Revised) Non-GAAP Financial
Measures", non-GAAP measures such as AFFO should be reconciled to the most
directly comparable GAAP measure, which is interpreted to be the cash flow
from operating activities rather than net income. The reconciliation is as
follows:

    -------------------------------------------------------------------------
                                        Quarter       Quarter
                                          Ended         Ended
                                        June 30,      June 30,
    (In thousands of dollars)              2009          2008      Variance
    -------------------------------------------------------------------------
    Cash provided by operating
     activities                          $6,412       $16,480      $(10,068)
    Add back (deduct):
    Recoverable/productive capacity
     enhancing TIs                          190         1,099          (909)
    Change in non-cash operating items    9,369        (2,848)       12,217
    Unit-based compensation expense         (12)          (11)           (1)
    Amortization of deferred financing
     charges                               (517)         (323)         (194)
    Amortization of swap settlements       (455)            -          (455)
    Maintenance capital expenditures       (918)       (2,481)        1,563
    -------------------------------------------------------------------------
    AFFO                                $14,069       $11,916        $2,153
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Cash Flow

    -------------------------------------------------------------------------
                                        Quarter       Quarter
                                          Ended         Ended
                                        June 30,      June 30,
    (In thousands of dollars)              2009          2008      Variance
    -------------------------------------------------------------------------
    Cash provided by (used in):
    Operating activities                 $6,412       $16,480      $(10,068)
    Financing activities                $(3,364)     $378,614     $(381,978)
    Investing activities                $(3,216)    $(395,094)     $391,878
    -------------------------------------------------------------------------

    Operating Activities
    --------------------

    -------------------------------------------------------------------------
                                        Quarter       Quarter
                                          Ended         Ended
                                        June 30,      June 30,
    (In thousands of dollars)              2009          2008      Variance
    -------------------------------------------------------------------------
    Cash provided by (used in):
    Net income and non-cash items       $17,085       $17,403         $(318)
    TI and leasing costs                 (1,304)       (3,771)        2,467
    Non-cash working capital             (9,369)        2,848       (12,217)
    -------------------------------------------------------------------------
    Cash provided by operating
     activities                          $6,412       $16,480      $(10,068)
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Fluctuations in cash provided by operating activities are largely
influenced by the change in non-cash working capital which can be affected by
the timing of receipts and payments. The details of the TI and leasing costs
during the second quarter of 2009 are outlined in the "Tenant Improvements and
Capital Expenditures" section of the MD&A.

    Financing Activities
    --------------------

    -------------------------------------------------------------------------
                                        Quarter       Quarter
                                          Ended         Ended
                                        June 30,      June 30,
    (In thousands of dollars)              2009          2008      Variance
    -------------------------------------------------------------------------
    Cash provided by (used in):
    Net issue of units                  $64,574       $59,215        $5,359
    Net issue (repayment) of
     commercial property debt           (57,102)      328,567      (385,669)
    Payment of distributions            (11,655)      (10,952)         (703)
    Other items (net)                       819         1,784          (965)
    -------------------------------------------------------------------------
    Cash provided by (used in)
     financing activities               $(3,364)     $378,614     $(381,978)
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Cash used in financing activities for the quarter ended June 30, 2009 was
$381,978 lower than the quarter ended June 30, 2008 primarily due to the issue
of the Term Facility and the public issue of Units related to the Portfolio
Acquisition in the quarter ended June 30, 2008 , partially offset by the gross
proceeds of $66,855 from the public offering of Units and the private
placement of Class B LP Units with Empire Subsidiaries on June 25, 2009 that
was used to reduce commercial property debt.

    Investing Activities
    --------------------

    Cash used in investing activities for the quarter ended June 30, 2009 was
$3,216. Of this, $3,192 was used for additions to commercial properties. Cash
used in investing activities for the quarter ended June 30, 2008 of $395,094
was primarily due to the Portfolio Acquisition.

    Tenant Improvement and Capital Expenditures
    -------------------------------------------

    -------------------------------------------------------------------------
                                                      Quarter       Quarter
                                                        Ended         Ended
                                                      June 30,      June 30,
     (In thousands of dollars)                           2009          2008
    -------------------------------------------------------------------------
    Total additions to commercial properties           $3,192        $5,803
    Less: amounts recoverable from ECL                      -        (2,084)
    -------------------------------------------------------------------------
    Net additions to commercial properties              3,192         3,719
    Less: productive capacity enhancements             (2,274)       (1,238)
    -------------------------------------------------------------------------
    Maintenance capital expenditures                     $918        $2,481
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    -------------------------------------------------------------------------
    (In thousands of dollars)                         Quarter       Quarter
                                                        Ended         Ended
                                                      June 30,      June 30,
                                                         2009          2008
    -------------------------------------------------------------------------
    Total additions to TI and leasing costs            $1,304        $3,771
    Less: amounts recoverable from ECL                   (159)       (1,099)
    -------------------------------------------------------------------------
    Net additions to TI and leasing costs               1,145         2,672
    Less: productive capacity enhancements                (31)            -
    -------------------------------------------------------------------------
    Maintenance TI and leasing costs                   $1,114        $2,672
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    The lower maintenance capital expenditures are primarily as a result of
the cautious outlook on capital intensive projects during the current economic
environment. The lower maintenance TI and leasing costs are primarily as a
result of fewer new leases being signed as tenants are being more cautious in
the current environment.
    Productive capacity enhancements during the quarter consisted of the
redevelopment of Valley Mall in Corner Brook, Newfoundland and Labrador and
the conversion of Fort Edward Mall in Windsor, Nova Scotia from a retail
enclosed property to a retail plaza.

    Changes in Accounting Policies

    Effective January 1, 2009 Crombie adopted two new accounting standards
that were issued by the CICA in 2008 and the Emerging Committee Abstract
issued by the CICA in January 2009. These accounting policy changes have been
adopted in accordance with the transitional provisions.

    The new standards and accounting policy changes are as follows:

    Goodwill and Intangible Assets
    ------------------------------

    Effective January 1, 2009, the accounting and disclosure requirements of
the CICA's two new accounting standards were adopted: "Handbook Section 3064,
Goodwill and Intangible Assets" and "Handbook Section 3450, Research and
Development Costs."
    These standards are effective for annual and interim financial statements
related to fiscal years beginning on or after October 1, 2008 and are
applicable for Crombie's first quarter of fiscal 2009. Section 3064 states
that intangible assets may be recognized as assets only if they meet the
definition of an intangible asset. Section 3064 also provides further
information on the recognition of internally generated intangible assets,
(including research and development).
    These standards have been applied retrospectively with restatement of
prior periods. The adoption of these new standards resulted in an increase of
$233 to depreciation of commercial properties and a decrease of $233 to
property expenses in the consolidated Statements of Income for the three
months ended June 30, 2008 and an increase of $462 to depreciation of
commercial properties and a decrease of $462 to property expenses for the six
months ended June 30, 2008. In the consolidated Balance Sheets, there was an
increase of $3,946 to commercial properties, an increase of $38 to
receivables, a decrease of $4,246 to prepaid expenses, and a decrease of $220
to payables and accruals at December 31, 2008, and a decrease of $20 to
non-controlling interest and a decrease of $22 to unitholders' equity at
January 1, 2008.

    Financial instruments - recognition and measurement
    ---------------------------------------------------

    In January 2009, the CICA issued Emerging Issue Committee Abstract 173
("EIC 173"), "Credit Risk and the Fair Value of Financial Assets and Financial
Liabilities". EIC 173 requires that a company take into account its own credit
risk and the credit risk of its counterparty in determining the fair value of
financial assets and financial liabilities. This Abstract must be applied
retrospectively without restatement of prior periods to all financial assets
and liabilities measured at fair value in interim and annual financial
statements for periods ending on or after January 20, 2009. The adoption of
EIC 173 did not have a significant impact on the Crombie's financial results,
position or disclosures.

    Effect of New Accounting  Policies Not Yet Implemented

    International Financial Reporting Standards
    -------------------------------------------

    On February 13 2008, the Accounting Standards Board of Canada announced
that GAAP for publicly accountable enterprises will be replaced by
International Financial Reporting Standards ("IFRS"). IFRS must be adopted for
interim and annual financial statements related to fiscal years beginning on
or after January 1, 2011, with retroactive adoption and restatement of the
comparative fiscal year ended December 31, 2010. Accordingly, the conversion
from Canadian GAAP to IFRS will be applicable to Crombie's reporting for the
first quarter of fiscal 2011 for which the current and comparative information
will be prepared under IFRS.
    Crombie, with the assistance of its external advisors, have launched an
internal initiative to govern the conversion process and is currently
evaluating the potential impact of the conversion to IFRS on its financial
statements. At this time, the impact on Crombie's future financial position
and results of operations is not reasonably determinable or estimatable.
Crombie expects the transition to IFRS to impact accounting, financial
reporting, internal control over financial reporting, information systems and
business processes.
    Crombie has developed a formal project governance structure, and is
providing regular progress reports to senior management and the audit
committee. Crombie has also completed a diagnostic impact assessment, which
involved a high level review of the major differences between current GAAP and
IFRS, as well as establishing an implementation guideline. In accordance with
this guideline Crombie has established a staff training program and is in the
process of completing analysis of the key decision areas and making
recommendations on the same.
    Crombie will continue to assess the impact of the transition to IFRS and
to review all of the proposed and ongoing projects of the International
Accounting Standards Board to determine their impact on Crombie. Additionally,
Crombie will continue to invest in training and resources throughout the
transition period to facilitate a timely conversion.
    In order to assist Crombie with its transition to IFRS the Unitholders
approved amendments to Crombie's Declaration of Trust, at Crombie's Annual
General and Special Meeting held on May 7, 2009, to allow the Trustees to make
future amendments to the Declaration of Trust without the requirement to
obtain Unitholder approval. These changes are in the same manner as the
Declaration of Trust currently permits Trustees to act as it relates to the
changes in taxation laws.
    An example of a potential change to the Declaration of Trust in order to
comply with IFRS standards as they are currently drafted include the fact that
Crombie's units may be regarded under IFRS as a "liability" rather than
"equity" (as they are currently recognized under Canadian GAAP). This
interpretation is influenced principally by the requirement in the Declaration
of Trust that Crombie "shall" distribute in each year an amount at least equal
to its taxable income. Under IFRS, the units would be classified as a
liability if they contain "a contractual obligation to deliver cash or another
financial asset to another entity".
    The amendments will not result in any material change to the Unitholders,
but rather were contemplated in order to assist Crombie to implement changes
that will assist in its transition to IFRS. Trustees will be obligated to
determine whether any such change is necessary or desirable in the
circumstances, and all other matters that are currently required to be
approved by Unitholders pursuant to the Declaration of Trust will remain
unchanged.

    Related Party Transactions

    As at June 30, 2009, Empire, through its wholly-owned subsidiary ECL,
holds a 47.4% indirect interest in Crombie. Crombie uses the exchange amount
as the measurement basis for the related party transactions.
    For a period of five years commencing March 23, 2006, certain executive
management individuals and other employees of Crombie will provide general
management, financial, leasing, administrative, and other administration
support services to certain real estate subsidiaries of Empire on a cost
sharing basis. The costs assumed by Empire pursuant to the agreement during
the three months ended and six months ended June 30, 2009 were $278 and $575
(three months ended and six months ended June 30, 2008 - $386 and $841
respectively) and were netted against general and administrative expenses
owing by Crombie to Empire.
    For a period of five years, commencing March 23, 2006, certain on-site
maintenance and management employees of Crombie will provide property
management services to certain real estate subsidiaries of Empire on a cost
sharing basis. In addition, for various periods, ECL has an obligation to
provide rental income and interest rate subsidies. The costs assumed by Empire
pursuant to the agreement during the three months ended and six months ended
June 30, 2009 were $273 and $649 (three months ended and six months ended June
30, 2008 - $484 and $1,173 respectively) and was netted against property
expenses owing by Crombie to Empire. The head lease subsidy during the three
months ended and six months ended June 30, 2009 were $154 and $404 (three
months ended and six months ended June 30, 2008 - $231 and $629 respectively).
    Crombie also earned rental revenue of $18,650 for the three months ended
June 30, 2009 and $33,210 for the six months ended June 30, 2009 (three months
ended and six months ended June 30, 2008 - $13,135 and $19,497 respectively)
from Sobeys Inc., Empire Theatres and ASC Commercial Leasing Limited ("ASC").
These companies were all subsidiaries of Empire until September 8, 2008 when
ASC was sold. Property revenue from ASC is included in this note disclosure
until the sale date.
    Empire has provided Crombie with a $13,800 floating rate demand credit
facility on substantially the same terms and conditions that govern the
floating rate revolving credit facility. During the first quarter of 2009,
$10,000 outstanding at December 31, 2008 was repaid to the demand credit
facility.
    On June 1, 2009, Crombie acquired 1.1 acres of land adjacent to the Avalon
Mall, Newfoundland and Labrador, for $3,527 plus additional closing costs from
ECL General Partner Limited, an affiliate of Empire. ECL General Partner
Limited provided debt of $3,527 at a fixed rate of 8.00% and a term of 20
years.
    On June 25, 2009, concurrent with the public offering, in satisfaction of
its pre-emptive right, ECL purchased $30,000 of Class B LP Units and the
attached Special Voting Units, on a private-placement basis.

    Critical Accounting Estimates

    Critical accounting estimates are discussed under the section "Critical
Accounting Estimates" in the 2008 Annual Report.

    Commitments and Contingencies

    There are various claims and litigation, which Crombie is involved with,
arising out of the ordinary course of business operations. In the opinion of
management, any liability that would arise from such contingencies would not
have a significant adverse effect on these financial statements.
    Crombie has agreed to indemnify its trustees and officers, and particular
employees, in accordance with Crombie's policies. Crombie maintains insurance
policies that may provide coverage against certain claims.
    Crombie has entered into a management cost sharing agreement with a
subsidiary of Empire.
    Crombie has land leases on certain properties. These leases have annual
payments of $969 per year over the next five years. The land leases have terms
of between 15.8 and 76.2 years remaining, including renewal options.
    Crombie obtains letters of credit to support our obligations with respect
to construction work on our commercial properties and defeasing commercial
property debt. In connection with the defeasance of the discontinued
operations commercial property debt, Crombie has issued a standby letter of
credit in the amount of $1,715 in favour of the mortgage lender. In addition,
Crombie has $145 in standby letters of credit for construction work that is
being performed on its commercial properties. Crombie does not believe that
any of these standby letters of credit are likely to be drawn upon.

    Risk Management

    In the normal course of business, Crombie is exposed to a number of
financial risks that can affect its operating performance. These risks, and
the action taken to manage them, are as follows:

    Credit risk
    -----------

    Credit risk arises from the possibility that tenants may experience
financial difficulty and be unable to fulfill their lease commitments.
Crombie's credit risk is limited to the recorded amount of tenant receivables.
An allowance for doubtful accounts is taken for all anticipated problem
accounts.
    Crombie mitigates credit risk by geographical diversification, utilizing
staggered lease maturities, diversifying both its tenant mix and asset mix and
conducting credit assessments for new and renewing tenants. As at June 30,
2009;

    - Excluding Sobeys (which accounts for 33.0% of Crombie's minimum rent),
      no other tenant accounts for more than 2.2% of Crombie's minimum rent,
      and

    - Over the next five years, no more than 9.3% of the gross leaseable area
      of Crombie will expire in any one year.

    Crombie earned rental revenue of $18,650 for the three months ended June
30, 2009 and $33,210 for the six months ended June 30, 2009 (three months
ended and six months ended June 30, 2008 - $13,135 and $19,497 respectively)
from subsidiaries of Empire.

    Interest rate risk
    ------------------

    Interest rate risk is the potential for financial loss arising from
increases in interest rates. Crombie mitigates interest rate risk by utilizing
staggered debt maturities, limiting the use of permanent floating rate debt
and utilizing interest rate swap agreements. As at June 30, 2009:

    - Crombie's weighted average term to maturity of the fixed rate mortgages
      was 5.8 years, and

    - Crombie's exposure to floating rate debt, including the impact of the
      fixed rate swap agreements discussed below, was 20.0% of the total
      commercial property debt. Excluding the floating rate term facility,
      which is to be replaced with permanent fixed rate financing during the
      next seven months, the exposure to floating rate debt is 2.1%

    From time to time, Crombie has entered into interest rate swap agreements
to manage the interest rate profile of its current or future debts without an
exchange of the underlying principal amount. Recent turmoil in the financial
markets has materially affected interest swap rates. This effect was
especially pronounced during the fourth quarter of 2008 and the first quarter
of 2009. The interest swap rates are based on Canadian bond yields, plus a
premium, called the swap spread, which reflects the risk of trading with a
private counterparty as opposed to the Canadian government. During the fourth
quarter 2008, the swap spread turned negative and remained negative throughout
the first quarter of 2009. While the swap spreads turned positive during the
second quarter of 2009, they still remain below historical average values. The
effect of the abnormally low swap spreads, combined with the decline in the
Canadian bond yields has resulted in a significant deterioration of the
mark-to-market values for the interest rate swap agreements. At June 30, 2009,
the mark-to-market exposure on the interest rate swap agreements was
approximately $31,831. There is no immediate cash impact from the
mark-to-market adjustment. The unfavourable difference in the mark-to-market
amount of these interest rate swap agreements is reflected in other
comprehensive income (loss) rather than net income as the swaps are all
designated and effective hedges. The breakdown of the swaps in place as part
of the interest rate management program, and their associated mark-to-market
amounts are as follows:

    - Crombie has entered into a fixed interest rate swap to fix the amount
      of interest to be paid on $50,000 of the revolving credit facility.
      The fair value of the fixed interest rate swap at June 30, 2009, had an
      unfavourable mark-to-market exposure of $3,674 (June 30, 2008 -
      unfavourable $957) compared to its face value.  The change in this
      amount has been recognized in other comprehensive income (loss).  The
      mark-to-market amount of fixed interest rate swaps reduce to $Nil upon
      maturity of the swaps.

    - Crombie has entered into a number of delayed interest rate swap
      agreements of a notional amount of $100,334 (June 30, 2008 - $118,689)
      with settlement dates between February 1, 2010 and July 2, 2011,
      maturing between February 1, 2019 and July 2, 2021 to mitigate exposure
      to interest rate increases for mortgages maturing in 2010 and 2011.
      The fair value of these delayed interest rate swap agreements had an
      unfavourable mark-to-market exposure of $12,774 compared to the face
      value June 30, 2009 (June 30, 2008 - unfavourable $8,468).  The change
      in these amounts has been recognized in other comprehensive income
      (loss).

    - In relation to the acquisition of a portfolio of 61 retail properties
      from subsidiaries of Empire, Crombie has entered into a number of
      delayed interest rate swap agreements of a notional amount of $138,000
      (June 30, 2008 - $280,000) with a settlement date of August 1, 2009 to
      mitigate exposure to interest rate increases prior to replacing the
      floating rate term facility with long-term financing.  The fair value
      of these agreements had an unfavourable mark-to-market exposure of
      $15,383 compared to their face value on June 30, 2009 (June 30, 2008 -
      $1,782).  The change in these amounts has been recognized in other
      comprehensive income (loss).

    During the first quarter of 2009, Crombie settled an interest rate swap
agreement related to a notional amount of $42,000 for a settlement amount of
$4,535. This settlement amount has been recognized in other comprehensive
income (loss) since the inception of the interest rate swap agreements. This
loss will be reclassified to interest expense using the effective interest
rate method.
    Crombie estimates that $897 of other comprehensive income (loss) will be
reclassified to interest expense during the remaining two quarters of 2009
based on interest rate swap agreements settled to June 30, 2009.
    A fluctuation in interest rates would have an impact on Crombie's net
earnings and other comprehensive income (loss) items. Based on the previous
year's rate changes, a 0.5% interest rate change would reasonably be
considered possible. The changes would have had the following impact:

                                      Quarter ended          Quarter ended
                                      June 30, 2009          June 30, 2008
                                 --------------------------------------------
                                    0.5%        0.5%        0.5%        0.5%
                               increase    decrease    increase    decrease
    -------------------------------------------------------------------------
    Impact on net income of
     interest rate changes the
     floating rate revolving
     credit facility              $(244)       $244       $(340)       $340
    -------------------------------------------------------------------------

                                     Six months ended      Six months ended
                                      June 30, 2008          June 30, 2008
                                 --------------------------------------------
                                    0.5%        0.5%        0.5%        0.5%
                               increase    decrease    increase    decrease
    -------------------------------------------------------------------------
    Impact on net income of
     interest rate changes the
     floating rate revolving
     credit facility              $(514)       $514       $(365)       $365
    -------------------------------------------------------------------------

                                      June 30, 2009           June 30, 2008
                                 --------------------------------------------
                                    0.5%        0.5%        0.5%        0.5%
                               increase    decrease    increase    decrease
    -------------------------------------------------------------------------
    Impact on other compre-
     hensive income and non-
     controlling interest items
     due to changes in fair
     value of derivatives
     designated as a cash
     flow hedge                  $8,764     $(9,151)    $13,129    $(13,735)
    -------------------------------------------------------------------------

    Crombie does not enter into these interest rate swap transactions on a
speculative basis. Crombie is prohibited by its Declaration of Trust in
purchasing, selling or trading in interest rate future contracts other than
for hedging purposes.

    Liquidity risk
    --------------

    The real estate industry is highly capital intensive. Liquidity risk is
the risk that Crombie may not have access to sufficient debt and equity
capital to fund the growth program and/or refinance the debt obligations as
they mature.
    Cash flow generated from operating the property portfolio represents the
primary source of liquidity used to service the interest on debt, fund general
and administrative expenses, reinvest into the portfolio through capital
expenditures, as well as fund tenant improvement costs and make distributions
to Unitholders. Debt repayment requirements are primarily funded from
refinancing Crombie's maturing debt obligations. Property acquisition funding
requirements are funded through a combination of accessing the debt and equity
capital markets.
    There is a risk that the debt capital markets may not refinance maturing
debt on terms and conditions acceptable to Crombie or at any terms at all.
Crombie seeks to mitigate this risk by staggering the debt maturity dates.
There is also a risk that the equity capital markets may not be receptive to
an equity issue from Crombie with financial terms acceptable to Crombie.
Crombie mitigates its exposure to liquidity risk utilizing a conservative
approach to capital management.
    Access to the Revolving Credit Facility is also limited to the amount
utilized under the facility, plus any negative mark-to-market position on the
interest rate swap agreements, not exceeding the security provided by Crombie.
The mark-to-market adjustment on the interest rate swap agreements reached an
out-of-the-money position of approximately $31,831 at June 30, 2009. The
deterioration in the mark-to-market position may have the impact of reducing
Crombie's available credit in the Revolving Credit Facility.
    Crombie has secured a $13,800 floating rate Empire Demand Facility under
essentially the same terms and conditions that govern the Revolving Credit
Facility. This demand facility has been put in place to ensure Crombie
maintains adequate liquidity in order to fund its daily operating activities
while the volatility in the financial markets continues, while also mitigating
the risk of Crombie not being in compliance with covenants under the Revolving
Credit Facility.
    Crombie has no mortgages maturing in fiscal 2009 and during the second
quarter of 2009 completed the extension of the Term Facility from the original
maturity date of October 2009 to May 2011.

    Subsequent Event

    On July 22, 2009, Crombie declared distributions of 7.417 cents per unit
for the period from July 1, 2009, to and including, July 31, 2009. The
distribution will be payable on August 17, 2009 to Unitholders of record as at
July 31, 2009.

    Internal Control Over Financial Reporting

    Management is responsible for establishing and maintaining adequate
control over financial reporting ("ICFR") to provide reasonable assurance
regarding the reliability of financial reporting and the preparation of
financial statements for external purposes in accordance with GAAP. The
control framework Management used to design ICFR is COSO, which is the
Committee of Sponsoring Organizations of the Treadway Commission. The Chief
Executive Officer and Chief Financial Officer have evaluated the effectiveness
of Crombie's ICFR and have concluded as at June 30, 2009 that Crombie's ICFR
were designed and operated effectively, and that there are no material
weaknesses relating to the design or operation of Crombie's ICFR. There were
no changes to Crombie's ICFR for the quarter ended June 30, 2009 that have
materially affected, or are reasonably likely to materially affect Crombie's
ICFR.

    Disclosure Controls and Procedures

    Management is responsible for establishing and maintaining disclosure
controls and procedures ("DC&P") to provide reasonable assurance that material
information relating to Crombie is made known to Management by others,
particularly during the period in which the annual filings are being prepared,
and that information required to be disclosed by Crombie in its annual
filings, interim filings or other reports filed or submitted by it under
securities legislation is recorded, processed, summarized and reported with
the time periods specified in securities legislation. The Chief Executive
Officer and Chief Financial Officer have evaluated the effectiveness of
Crombie's DC&P and have concluded as at June 30, 2009 that these DC&P were
designed and operated effectively, and that there are no material weaknesses
relating to the design or operation of Crombie's DC&P.

    Quarterly Information

    The following table shows information for revenues, net income, AFFO, FFO,
distributions and per unit amounts for the eight most recently completed
quarters.

                  -----------------------------------------------------------
                                                 Quarter Ended
                  -----------------------------------------------------------
    (In thousands
    of dollars,
    except per      Jun. 30,    Mar. 31,    Dec. 31,    Sep. 30,    Jun. 30,
    unit amounts)      2009        2009        2008        2008        2008
    -------------------------------------------------------------------------
    Property
     revenue        $50,893     $52,992     $52,522     $51,044     $47,315
    Property
     expenses        17,258      19,971      19,649      18,634      16,776
    -------------------------------------------------------------------------
    Property net
     operating
     income          33,635      33,021      32,873      32,410      30,539
    -------------------------------------------------------------------------
    Expenses:
      General
      and adminis-
      trative         3,646       1,644       2,701       2,004       1,979
      Interest       11,272      10,730      11,318      11,449       9,965
      Depreciation
      and amorti-
      zation         10,803      12,491      12,499      12,535      10,757
    -------------------------------------------------------------------------
                     25,721      24,865      26,518      25,988      22,701
    -------------------------------------------------------------------------
    Income from
     continuing
     operations
     before other
     items,
     income taxes
     and non-
     controlling
     interest         7,914       8,156       6,355       6,422       7,838
    Other items           -          92          55          27          97
    -------------------------------------------------------------------------
    Income from
     continuing
     operations
     before income
     taxes and non-
     controlling
     interest         7,914       8,248       6,410       6,449       7,935
      Income
      taxes
      expense
      - Future            -         200      (3,450)        859         701
    -------------------------------------------------------------------------
    Income from
     continuing
     operations
     before
     non-con-
     trolling
     interest         7,914       8,048       9,860       5,590       7,234
    Gain/(loss)
     on sale of
     discontinued
     operations           -           -         487        (895)          -
    Income from
     discontinued
     operations           -           -          24         226         136
    -------------------------------------------------------------------------
    Income before
     non-con-
     trolling
     interest         7,914       8,048      10,371       4,921       7,370
    Non-con-
     trolling
     interest         3,786       3,856       4,968       2,358       3,531
    -------------------------------------------------------------------------
    Net income       $4,128      $4,192      $5,403      $2,563      $3,839
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Basic and
     diluted
     net income
     per unit         $0.15       $0.15       $0.20       $0.09       $0.15
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    -------------------------------------------------------------------------
                                                 Quarter Ended
    -------------------------------------------------------------------------
    (In thou-
     sands of
     dollars,
     except per
     unit           Jun. 30,    Mar. 31,    Dec. 31,    Sep. 30,    Jun. 30,
     amounts)          2009        2009        2008        2008        2008
    -------------------------------------------------------------------------
    AFFO            $14,069     $16,026     $14,681     $12,457     $11,916
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    FFO             $18,717     $20,739     $18,933     $19,200     $18,812
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Distribu-
     tions          $12,294     $11,649     $11,649     $11,649     $11,879
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    AFFO per
     unit(1)          $0.27       $0.31       $0.28       $0.24       $0.24
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    FFO per
     unit(1)          $0.35       $0.40       $0.36       $0.37       $0.38
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Distribu-
     tions per
     unit(1)          $0.23       $0.22       $0.22       $0.22       $0.23
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


                              -----------------------------------------------
                                                 Quarter Ended
                              -----------------------------------------------
    (In thousands of dollars,           Mar. 31,      Dec. 31,      Sep. 30,
     except per unit amounts)              2008          2007          2007
    -------------------------------------------------------------------------
    Property revenue                    $37,262       $36,455       $35,068
    Property expenses                    15,312        14,336        14,682
    -------------------------------------------------------------------------
    Property net operating
     income                              21,950        22,119        20,386
    -------------------------------------------------------------------------
    Expenses:
      General
       and administrative                 1,952         2,492         1,843
      Interest                            6,500         6,577         6,413
      Depreciation and
       amortization                       7,995         8,352         7,575
    -------------------------------------------------------------------------
                                         16,447        17,421        15,831
    -------------------------------------------------------------------------
    Income from continuing
     operations before other
     items, income taxes and
     non-controlling interest             5,503         4,698         4,555
    Other items                               -             -             -
    -------------------------------------------------------------------------
    Income from continuing
     operations before income
     taxes and non-controlling
     interest                             5,503         4,698         4,555
      Income taxes expense
       - Future                             400        (2,994)          718
    -------------------------------------------------------------------------
    Income from continuing
     operations before
     non-controlling interest             5,103         7,692         3,837
    Gain/(loss) on sale of
     discontinued operations                  -             -             -
    Income from discontinued
     operations                             263           132           108
    -------------------------------------------------------------------------
    Income before
     non-controlling interest             5,366         7,824         3,945
    Non-controlling interest              2,583         3,766         1,899
    -------------------------------------------------------------------------
    Net income                           $2,783        $4,058        $2,046
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Basic and diluted
     net income per unit                  $0.13         $0.19         $0.10
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    -------------------------------------------------------------------------
                                                 Quarter Ended
    -------------------------------------------------------------------------
    (In thousands of dollars,
    except per unit amounts)            Mar. 31,      Dec. 31,      Sep. 30,
                                           2008          2007          2007
    -------------------------------------------------------------------------
    AFFO                                 $8,096        $7,761        $6,273
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    FFO                                 $13,839       $13,257       $12,310
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Distributions                        $8,867        $8,867        $8,867
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    AFFO per unit(1)                      $0.19         $0.19         $0.15
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    FFO per unit(1)                       $0.33         $0.32         $0.30
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Distributions per unit(1)             $0.21         $0.21         $0.21
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    (1) AFFO, FFO and distributions per unit are calculated by AFFO, FFO or
        distributions, as the case maybe, divided by the diluted weighted
        average of the total Units and Special Voting Units outstanding of
        52,959,049 for the quarter ended June 30, 2009, 52,351,464 for the
        quarter ended March 31, 2009, 52,351,464 for the quarter ended
        December 31, 2008, 52,351,464 for the quarter ended September 30,
        2008, 49,954,256 for the quarter ended June 30, 2008, 41,728,561 for
        the quarter ended March 31, 2008, 41,728,561 for the quarter ended
        December 31, 2007, 41,728,561 for the quarter ended September 30,
        2007. The quarterly results of these calculations may not add to the
        annual calculations due to rounding.

    Additional information relating to Crombie, including its latest Annual
Information Form, can be found on the SEDAR web site for Canadian regulatory
filings at www.sedar.com.

    Dated: August 6, 2009

    Stellarton, Nova Scotia, Canada
    




For further information:

For further information: Scott Ball, C.A., Vice President, Chief
Financial Officer and Secretary, Crombie REIT, (902) 755-8100


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