Good morning, and welcome to H&R REIT's 2020 annual general meeting of unitholders. I'm Tom Hofstedter, the REIT's President and CEO. Hopefully, everyone spent less time figuring out how to connect into this meeting remotely than it took you to travel to the meeting last year. I'd like to start by acknowledging the difficult situations faced by many members of our community, our tenants, our partners, our investors, and our team at H&R. I'd like to particularly thank our employees for their extraordinary efforts to deliver outstanding continuity under adverse conditions. Our first priority has been the safety and wellbeing of our employees, tenants, and visitors to our properties. We've adopted all recommended behaviors, including social distancing. Many of our employees have been practicing remote working, and we have increased cleaning protocols among other precautionary practices. As you're aware, this is a virtual unitholders meeting.
In the light of the unprecedented public health impact of the COVID-19 pandemic, and to mitigate risks to the health and safety of our communities, unitholders, employees, and other stakeholders, the REIT has decided that this virtual-only format is the safest method of hosting this meeting while still allowing us to reach the greatest number of our unitholders as possible. We thank you for joining us. We have ensured that this virtual meeting offers unitholders and duly appointed proxyholders the opportunity to participate at the meeting. As in past years, we expect that the vast majority of all votes have been cast in advance of the meeting by proxy. However, registered unitholders and duly appointed proxyholders will be allowed to vote online at the meeting in accordance with instructions to be provided. Only duly appointed proxyholders and validated unitholders may ask questions in the designated field in the web portal.
Out of consideration for others, please limit yourselves to one question. Questions can be submitted by typing the text of your question in the Ask a Question box and clicking the Submit button. Given the virtual format of the meeting, and in order for us to expediently undertake discussions on any matter proposed for a vote, we ask that any questions or comments you have that specifically relate to a formal item of business be submitted now. When doing so, please make sure you clearly identify the applicable formal item of business to which your submission relates. During the course of this meeting, such submissions will be addressed at the appropriate time prior to voting on the applicable motion.
Before beginning the meeting, I'd like to remind unitholders that certain statements and responses to questions that arise in today's meeting may contain forward-looking information, which reflect the current expectations of management regarding future events and performance, and speak only as of today's date. Forward-looking information requires management to make assumptions or rely on certain material factors and is subject to inherent risks and uncertainties, and actual results could differ materially from the statements in the forward-looking information. Additional information about the material factors, assumptions, risks, and uncertainties that could cause actual results to differ materially from the statements in the forward-looking information and the material factors assumptions that may have been applied in making such statements is described in more detail in the REIT's public filings, which can be found on our website and at www.sedar.com.
I now call the meeting in order, and this formal part of it will go relatively quickly as we do the previous years. I now call the meeting to order. With the consent of the trustees of the REIT and of the meeting, I will act as chair of the meeting. Will Fung of Blake, Cassels & Graydon, legal counsel to the REIT, will act as secretary of the meeting. Broadridge Investor Communications Corporation by its representatives, Jerry Trotter, Alicia Mohammed, will act as scrutineer of the meeting. A general question and answer session will be available at the end of the meeting. The notice calling the meeting and the other requisite materials have been sent to those persons as required. The reading of those notices of meetings will accordingly be waived. I received the scrutineer's preliminary report on attendance.
As the scrutineer's report indicates that there are not less than two unitholders or proxyholders present and holding or representing in the AGM, not less than 25% of the combined total number of outstanding units and special voting units of the REIT enjoying voting rights at this meeting. As a result, I declare a quorum for the meeting through presence. I therefore declare the meeting to be regularly constituted. I'd now like to refer you to the financial statements of the REIT for its financial year ended December 31st, 2019, together with the report of the auditors thereon, and the management's reports to the unitholders. I do not propose that these statements or reports be read. They are publicly available and have been sent to unitholders through notice and access.
I will now present the meetings to be voted at the meeting, being the election of trustees, the appointment and remuneration of auditors, and the advisory vote regarding executive compensation. The voting of today's meeting will be conducted by online ballot for all matters. If you are a registered unitholder or a duly appointed proxyholder that has already submitted a completed proxy, there is no need for you to vote online as your vote will be recorded in accordance with your proxy instructions. However, if you wish to change your vote or if you are a registered unitholder or a duly appointed proxyholder that has already voted, you may view your available voting options and submit your vote by clicking on the Vote Here button on your screen and selecting one of the voting choices displayed on your screen.
The polls will be open for all items of business to be voted on at the same time. This will allow you to vote on each item immediately, or if you prefer, you may wait until the conclusion of discussions on each item prior to casting your vote. The polls will close immediately following the conclusion of the last matter of regular business. If you have not already done so, unitholders and duly appointed proxyholders who wish to submit questions or comments specific to these motions should do so now. Appropriate questions or comments will be read and responded to prior to the close of voting for these matters. Once discussion has concluded on all items of business, we will pause briefly so you can enter your votes. I will then declare voting closed on all matters of business.
The results of the votes will be announced after the close of the meeting. I now declare the polls are open on all items of business. I will now proceed with the election of trustees of the REIT. The number of trustees of the REIT to be elected today has been set by the Board of Trustees at nine. The REIT nominees, namely myself, Tom Hofstedter, Alex Avery, Robert Dickson, Edward Gilbert, Brenna Haysom, Lawrence Lebovic, Juli Morrow, Martin Rubner, and Ronald Rutman, are to be elected at the meeting to hold office until the close of the 2021 annual meeting of unitholders of the REIT. As the REIT did not previously receive timely notice of any further nominations of persons for election as trustees of the REIT as required by the advance notice provisions of the REIT's declaration of trust, I declare the nominations closed.
I'll ask someone to nominate the REIT trustees. For your information, proxies submitted prior to the meeting were voted in favor of each of the nominees, with votes in favor ranging from approximately 85%-98%.
I nominate Tom Hofstedter, Alex Avery, Robert Dickson, Edward Gilbert, Brenna Haysom, Lawrence Lebovic, Juli Morrow, Marvin Rubner, and Ronald Rutman as trustees of the REIT for the term as previously stated.
Thank you. Mr. Blumenthal, I have any questions or comments coming from unitholders specifically on this item?
Mr. Chairman, I confirm that we have not received any questions or comments from unitholders specifically relating to this item.
Thank you. We'll now proceed to the next item of business. The next item of business is appointment of auditors of the REIT for the current year at such remuneration as may be fixed for the proceeds of the REIT. I will now ask that someone move a resolution to appoint the REIT's current auditors, KPMG. For your information, approximately 92% of the voting units represented by proxies submitted prior to the meeting have voted in favor of such resolution.
I move that KPMG be appointed auditors of the REIT to hold office until the close of the next annual meeting of unitholders at such remuneration as may be fixed by the trustees of the REIT.
Thank you, Mr. Blumenthal. Any questions or comments in from unitholders specifically on this item?
Mr. Chairman, I confirm that we have not received any questions or comments from unitholders specifically relating to this item.
Thank you. We'll now proceed to the next item of business. The next item of business to consider and, if deemed advisable, approve the non-binding advisory resolution to accept the approach to executive compensation as disclosed in the management information circular dated May 4, 2020. I will now ask that someone move a resolution approving the non-binding advisory resolution. For your information, approximately 83% of the voting units represented by proxies submitted prior to the meeting have voted in favor of such resolution.
I move that the unitholders adopt the following resolution. Resolve, on an advisory basis and not to diminish the role and responsibilities of the Board of Trustees, that the unitholders accept the approach to executive compensation disclosed in the management information circular delivered in advance of the 2020 annual meeting of unitholders.
Thank you, Ms. Blum. Blumenthal, any questions or comments?
Mr. Chairman, I confirm that we have not received any questions or comments from unitholders specifically relating to this item.
Thank you. We have now discussed all matters to be voted upon at the meeting, and as everyone has had the opportunity to vote, I declare the polls for this afternoon annual meeting of unitholders of the REIT closed. The scrutineer has provided me with the preliminary scrutineer report regarding election of the trustees based on ballots cast at the beginning and during the course of the meeting. Based on the scrutineer report, which has been provided, I declare that each of those individual nominees Trustees are elected Trustees. I have also received the preliminary scrutineer report on the resolution regarding the appointment and remuneration of the auditors of the REIT and the non-binding advisory resolution to accept their approach to executive compensation as disclosed in the Management Information Circular dated May 4, 2020.
The report shows that each such resolution received a majority of the votes cast in favor of such resolution. I declare both resolutions carried. The specific results of the individual votes for each trustee and the result for the non-binding advisory resolution will be reported as part of the voting results filed under applicable securities legislation. Mr. Blumenthal, any further business?
Mr. Chairman, I confirm that we have not received any comments from unitholders specifically relating to additional items of business that may not be properly brought before the meeting.
Thank you. There being no further business to come before the meeting, the formal portion of the meeting is now over. Okay, with the formal portion of the meeting completed, let me provide an update on how our business is performing. Starting with June rent collections. To date, we have collected 82% of total June rents, which is consistent with the strong rent collection experience at this point in the month of May. By segment, we've collected 99% of office rents, 92% of residential rents, 54% of retail rents, and 97% of industrial rents. As those statistics highlight, the vast majority of our portfolio has seen minimal disruption with industry-leading rent collection rates in our office, multi-residential, and industrial portfolios, and strong collections from unenclosed retail properties. Where we've seen the most disruption has been in our closed shopping center portfolios.
We have been working closely with all of our tenants to accommodate optimal financing and operating solutions for the short and long-term success of our properties, particularly our retail tenants. We are pleased to see gradual steps towards a more normal operating environment with nearly all of our properties having fully reopened. Dufferin Mall is the only property that remains closed by government mandate, yet even there, more than 1/3 of the tenants by sq ft are open as essential services, including Walmart, Dollarama, No Frills, The Beer Store, the LCBO, and among others. As the properties that have closed have reopened over the past few weeks, we have been in close communication with our tenants, providing all of the support we can to ensure the success of our properties. Feedback has been positive. Many retailers have reported surprisingly strong sales and solid consumer traffic.
Our team has been particularly busy in recent days and weeks completing and submitting CECRA applications for those of our tenants that qualify and have chosen to make applications for government rent assistance. The majority of the applications are being completed on behalf of retail tenants in our enclosed mall portfolio. We are working to complete applications for 643 retail tenants aggregating CAD 4.3 million of monthly rents payable, which represents around 18% of total enclosed mall rents. Broadly speaking, we are pleased with how the portfolio has performed in these highly unusual circumstances and how our team has responded to extremely challenging conditions. Turning to the balance sheet. We have taken steps to safeguard the business, increasing our liquidity through four distinct actions. Firstly, in arranging a new CAD 500 million unsecured credit facility. Secondly, through a CAD 100 million 10-year mortgage.
Thirdly, through a reduction in our distribution rate of CAD 0.69 per unit annually. Most recently, through a CAD 400 million unsecured debenture offering that closed yesterday. Our current liquidity totals CAD 1 billion. Well more than enough to satisfy all of the contractual debt maturities, development capital expenditures, any rental income shortfall, and any re-tenanting costs through the end of 2021, and importantly, without increasing the REIT's leverage. The reduction of our distribution announced with our first quarter results was a significant and difficult decision. As discussed on our first quarter call, the board and management spent a great deal of time considering the pros and cons of different distribution policies in regards to the REIT's capital structure, cost of capital, investor preferences, strategy, and organizational structure.
Following this comprehensive review, the board unanimously concluded that the best course of action was to reduce the distribution to safeguard the REIT's capital structure, optimize the REIT's cost of capital, and position H&R's best to take advantage of opportunities in the future. Simply put, we believe a lower distribution rate was the right thing to do for the business and for our unitholders. Also, with Q1 results, we recognized the significant CAD 1.3 billion fair market value adjustment to the carrying value of our portfolio. This non-cash reduction to the fair value of REIT's assets reduced the IFRS NAV to CAD 22.26 per H&R REIT unit. As it turns out, most of other Canadian REITs did not make significant changes to their market values, at least not yet. Difference in approach is understandable.
The current pandemic is really the first significant market disruption since Canada adopted IFRS accounting standards in 2010. The argument for not changing fair value is that in a volatile market, transaction volume is low, and market pricing is difficult to assess. The argument for making changes to fair market values is that while market pricing might prove to be unchanged once the market returns to a more normal state, the price at which assets might sell in this current environment is uncertain, and therefore, a conservative approach suggests reflecting a lower value. Only in hindsight will we be able to know whether asset values will emerge from the current crisis in line with values prior to the pandemic. In the interim, we are confident that we have reflected conservative fair values of our portfolio.
This conservatism is consistent with H&R's approach to its overall business, as reflected by the long-term average lease term focused on high credit quality tenants and well-located property portfolio. It also reflects our view that for IFRS fair value to be meaningful, it needs to be responsive to changing market dynamics and as objective as possible. Typically, the annual general meeting is an opportunity to review the significant events of the prior year. While that seems a little less relevant this year than it has been in prior years, there are two notable significant developments in the office portfolio from 2019 worth highlighting here today. The first took place early in the year with the completion of 10-year extensions to the REIT's portfolio of well-tenanted office buildings aggregating 2.4 million square feet.
Following the extensions, the average remaining lease term stands at 14 and a half years as of March 31st, 2020. This early renewal significantly reduced near-term lease maturity exposure in the portfolio while also adding annual rental escalations into the leases. The second notable event from 2019 was the sale of the 1 million sq ft Atrium Office and Retail property at Yonge and Dundas in downtown Toronto. From the REIT's perspective, the selling price was attractive, and the sale also significantly reduced lease maturity exposure over the next few years. The result of these two transactions is that as at March 31st, 2020, our office portfolio is over 99% leased with a weighted average remaining lease term of over 12 years, with 87.4% of its rents coming from investment-grade tenants.
Leases aggregating only 13% of this portfolio mature over the next five years, and nearly half of total property operating income, H&R's office portfolio forms the core of the REIT's business and provides a very solid foundation for the future. Turning to our growing Lantower multi-residential business, 2019 also saw the stabilization of Jackson Park, our 50%-owned trophy multi-residential property in New York City with 1,871 units. This completion increased Lantower's REIT count to 7,777 as at March 31st, 2020, with 22% of the income-producing properties by value. Lantower's role in the REIT is poised to expand significantly again over the coming year with the REIT's 100%-owned River Landing development project near downtown Miami nearly complete, with residential lease-up expected to commence later this year. Pro forma, River Landing's completion multi-residential property will account for more than 25% of our income-producing portfolio.
Before I conclude my prepared remarks and open the call to investor questions, there are three additional topics I would like to comment on. Firstly, on the topic of ESG, we are proud to have published H&R's inaugural sustainability report, which can be found on our website under the presentations and other filings section. This report provides a detailed examination of H&R's environmental, social, and governance policies and practices, and importantly, forms the basis for which we can begin a process of continuous improvement. As we noted in our letter to unit holders earlier this year, H&R's commitment is to build on our established policy to enhance the disclosure of our successes in these fronts. With this milestone in disclosure accomplished, we plan to focus further advancing on our practices and policies.
On that front, today marks another milestone as we welcome Brenna Haysom and Marvin Rubner to our board of trustees. Their arrival provides board renewal and a diversity of perspective, ensuring the governance of our REIT continues to evolve and keep pace with best practices. Brenna is the first U.S. citizen to be a member of our board, adding to the range of perspectives at the table, particularly as the portion of our portfolio located in the United States continues to grow. Marvin brings 40 years of private market real estate experience, including significant urban property repositioning and redevelopment expertise. Despite recent progress, H&R anticipates further board renewal in the coming year, balancing the need for renewal and progress with the preservation of continuity and institutional memory.
New trustee nominees are expected to bring strong professional backgrounds and experiences, a diversity of perspectives, and fresh eyes to add to the conversation around the boardroom table. Stay tuned. Finally, as alluded to on the REIT's first quarter conference call, management of the board have been exploring opportunities to further take advantage of the REIT's scale and capabilities. Over 24 years, the REIT has developed significant asset and property management capabilities, spanning office, retail, industrial, and residential properties across North America. The REIT has a number of existing and previous capital partners, including relationships with capital partners, including pension funds, private equity partners, and public REITs, among others. H&R plans to further explore opportunities to leverage management capabilities with new and existing partners to take advantage of opportunities that arise in the market, particularly as property markets adapt to changing economic conditions over the next few years.
In support of these initiatives, I'm pleased to announce that our trustee, Alex Avery, has joined the REIT's management team as Executive Vice President, Asset Management and Strategic Initiatives. Alex's role has been evolving over the past few years, beginning as a trustee, working as a consultant, and now as a member of our management. We look forward to sharing more about our asset management initiatives and Alex's activities in the near future. Before turning it over to the operator, I'd like to also take this opportunity to thank Stephen Sender, who did not stand for re-election as a trustee at this meeting, for his years of service and significant contributions to H&R REIT.
Steven's diligence and capital markets insights are well known across Bay Street, and his perspectives added a lot to this discussion around our boardroom table. Operator, please open the lines for questions.
Ladies and gentlemen, if you have a question or a comment at this time, please press the star and the one key on your touch-tone telephone.
First question was, do we have any plans to buy back our shares at these prices? I don't think it's appropriate to cut distributions. Reasons to cut distributions, as was mentioned, was to be conservative, to have a strong balance sheet, and to get through the pandemic as best as we can, considering we don't see a light at the end of the pandemic tunnel at this point in time. I think it's very inappropriate to take that cash and buy back your shares if you just cut distributions. I think the point of a strong balance sheet is to have a strong balance sheet and to weather the storm. At this point in time, we do not have any plans to buy back our own shares, although I must tell you it is very enticing.
In closing, I'd like to sincerely thank everyone who has logged on to this, our 24th annual general meeting, to exercise your rights as unitholders and hear an update on our business. Thank you and enjoy the summer.
Ladies and gentlemen, this concludes today's presentation. You may now disconnect and have a wonderful day.