Granite Completes REIT Conversion

                      Granite Completes REIT Conversion

PR Newswire

TORONTO, Jan. 3, 2013

TORONTO, Jan. 3, 2013 /PRNewswire/ - Granite Real Estate Inc. (TSX: GRT; NYSE:
GRP) ("Granite Co.") announced today that effective January 3, 2013, it has
completed its conversion from a corporate structure to a stapled unit Real
Estate Investment Trust ("REIT") structure.

The conversion was implemented pursuant to a plan of arrangement under the
Business Corporations Act (Quebec). Under the plan of arrangement, all of the
common shares of Granite Co. have been exchanged, on a one-for-one basis, for
stapled units, each of which consists of one unit of Granite Real Estate
Investment Trust ("Granite REIT") and one common share of Granite REIT Inc.
("Granite REIT Co."; together with Granite REIT, "Granite"). Beginning on
January 4, 2013, the stapled units will trade on the Toronto Stock Exchange
under the symbol "GRT.UN" and on the New York Stock Exchange under the symbol
"GRP.U." Granite REIT and Granite REIT Inc. will be reporting issuers under
Canadian provincial and U.S. securities laws and, through Granite REIT
Holdings Limited Partnership ("Granite LP") and its subsidiaries, will
continue to carry on the business previously conducted by Granite Co. and its
subsidiaries.

Under the plan of arrangement,

(i)  Granite Co. acquired and cancelled 46,832,908 of its common shares,
      being 100% of the issued and outstanding common shares of Granite Co. at
      the effective time of the Conversion Transaction; and
     
(ii) through a series of steps, Granite LP acquired 10,771,569 Class X shares
      of Granite Co., being 100% of such shares, which were then converted
      into 10,771,569 common shares of Granite Co., and acquired an additional
      2,302,815 common shares. Granite LP now owns 100% of the issued and
      outstanding common shares of Granite Co. at the completion of the REIT
      conversion.

The securities referred to above were acquired and cancelled by Granite Co.,
and acquired by Granite LP, as a result of and for the consideration provided
in the particular transaction steps of the plan of arrangement. The closing
price of the Granite Co. common shares on the Toronto Stock Exchange on
January 3, 2013, was C$38.59 per common share.

Granite Co. acquired and cancelled, and Granite LP acquired, the securities
referred to above for the purpose of effecting Granite Co.'s conversion from a
corporate structure to a stapled unit REIT structure. The head office address
of Granite, Granite Co. and Granite LP is 77 King Street West, Suite 4010,
Toronto, Ontario M5K 1H1. To obtain a copy of the early warning report filed
under securities laws in connection with these transactions, contact Jennifer
Tindale, EVP, General Counsel and Secretary, at647-925-7500.

For U.S. taxpayers, C$1.00 of the value of each stapled unit issued will be
considered a deemed dividend (subject to, in the case of an individual U.S.
taxpayer, the new maximum 20% tax rate on qualified dividends and the new 3.8%
unearned income Medicare contribution tax) and, unless an Internal Revenue
Service Form W-9 was filed prior to the effective time of the plan of
arrangement, will be subject to backup withholding tax at a rate of 28%. Any
amounts so withheld may be refunded or credited against the U.S. taxpayer's
U.S. federal income tax liability.

ABOUT GRANITE

Granite is a Canadian-based REIT engaged in the ownership and management of
predominantly industrial properties in Canada, the United States, Mexico and
Europe. The REIT owns and manages approximately 28 million square feet in 104
rental income properties. Our tenant base currently includes operating
subsidiaries of Magna International Inc. as our largest tenants, together with
tenants from other industries.

OTHER INFORMATION

Copies of financial data and other publicly filed documents are available
through the internet on Canadian Securities Administrators' Systems for
Electronic Document Analysis and Retrieval (SEDAR) which can be accessed at
www.sedar.com and on the United States Securities and Exchange Commission's
Electronic Data Gathering, Analysis and Retrieval System (EDGAR) which can be
accessed at www.sec.gov. For further information about Granite, please see our
website at www.granitereit.com.

FORWARD-LOOKING STATEMENTS

This press release may contain statements that, to the extent they are not
recitations of historical fact, constitute ''forward-looking statements''
within the meaning of applicable securities legislation, including the United
States Securities Act of 1933 and the United States Securities Exchange Act of
1934. Forward-looking statements may include, among others, statements
regarding Granite's future plans, goals, strategies, intentions, beliefs,
estimates, costs, objectives, economic performance or expectations, or the
assumptions underlying any of the foregoing. Words such as ''may'', ''would'',
''could'', ''will'', ''likely'', ''expect'', ''anticipate'', ''believe'',
''intend'', ''plan'', ''forecast'', ''project'', ''estimate'' and similar
expressions are used to identify forward-looking statements. Forward-looking
statements should not be read as guarantees of future events, performance or
results and will not necessarily be accurate indications of whether or the
times at or by which such future performance will be achieved. Undue reliance
should not be placed on such statements. In particular, Granite cautions that
there can be no assurance that the anticipated reduction in cash income taxes
payable following the REIT conversion will be realized. Forward-looking
statements are based on information available at the time and/or management's
good faith assumptions and analyses made in light of our perception of
historical trends, current conditions and expected future developments, as
well as other factors we believe are appropriate in the circumstances, and are
subject to known and unknown risks, uncertainties and other unpredictable
factors, many of which are beyond Granite's control, that could cause actual
events or results to differ materially from such forward-looking statements.
Important factors that could cause such differences include, but are not
limited to, the inability to realize the anticipated reduction in cash income
taxes payable following the REIT conversion and the risks set forth in the
''Risk Factors'' section in Granite Co.'s management information
circular/proxy statement with respect to the REIT conversion and in Granite
Co.'s Annual Information Form for 2011, each filed on SEDAR at www.sedar.com
and on EDGAR at www.sec.gov, which investors are strongly advised to review.
The ''Risk Factors'' sections also contain information about the material
factors or assumptions underlying such forward-looking statements.
Forward-looking statements speak only as of the date the statements were made
and unless otherwise required by applicable securities laws, Granite expressly
disclaims any intention and undertakes no obligation to update or revise any
forward-looking statements contained in this press release to reflect
subsequent information, events or circumstances or otherwise.









SOURCE Granite Real Estate Inc.

Contact:

Please contact Tom Heslip, Chief Executive Officer, at 647-925-7539 or Michael
Forsayeth, Chief Financial Officer, at 647-925-7600.
 
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