H&R REIT and its Property Manager Agree to Fee Waiver for Primaris Transaction

H&R REIT and its Property Manager Agree to Fee Waiver for Primaris Transaction 
TORONTO, Jan. 24, 2013 /CNW/ - H&R Real Estate Investment Trust (TSX: HR.UN) 
("H&R REIT") is pleased to announce that, in connection with its agreement to 
acquire Primaris Retail Real Estate Investment Trust ("Primaris"), H&R REIT 
and its property manager have agreed to the following changes to the current 
omnibus property management agreement between the parties: 

    --  the property manager has waived, in whole, its entitlement to
        the acquisition fee that would otherwise be payable upon
        completion of the acquisition;
    --  the property manager has confirmed that no property management
        fees relating to the Primaris properties will be payable to the
        property manager as it is expected that the Primaris properties
        will be internally managed by the existing Primaris management
        team; and
    --  the property manager has further agreed with H&R REIT that,
        following H&R REIT's acquisition of Primaris, no acquisition
        fees or property management fees will be payable to the
        property manager by H&R REIT in connection with the future
        acquisition by H&R REIT of enclosed shopping centers in Canada.

H&R REIT is also pleased to announce that DBRS Limited has completed its 
review of the Primaris transaction and confirmed on January 17, 2013 that H&R 
REIT's senior unsecured debentures remain rated at BBB with a stable trend.

The Primaris transaction provides H&R REIT unitholders with the following 
    --  High-Quality Portfolio of Scarce Retail Assets: The transaction
        is a unique opportunity to acquire a professional retail
        platform, with an irreplaceable Canadian enclosed shopping
        centre portfolio.
    --  Increased Scale: The transaction creates the largest REIT in
        Canada by enterprise value. The increased scale will provide
        more stability in volatile markets and further improve H&R's
        cost of capital.  In addition, the increased market
        capitalization will result in substantially enhanced liquidity
        for unitholders.
    --  Improved Portfolio Diversification: The addition of Primaris'
        retail properties will broaden H&R REIT's portfolio
        diversification geographically, by asset class and by tenant
    --  Strong Financial Metrics: The REIT's balance sheet will be
        deleveraged to 51.9 per cent Debt/FV (assuming full take-up of
        the cash consideration).  With expected savings from synergies
        of up to $10 million over the next two years, the transaction
        will be accretive to FFO.
    --  Complimentary Management Styles: The transaction combines two
        businesses having similar philosophies with respect to asset
        and tenant quality and their disciplined approach to real
        estate investing.

The Primaris transaction, structured as a plan of arrangement, is subject to 
various closing conditions, including the approval of 66 2/3 per cent of 
Primaris units voted at a special meeting of Primaris unitholders and a 
majority of H&R units voted at a special meeting of H&R unitholders. Each of 
H&R and Primaris will prepare and mail meeting circulars to their respective 
investors in early February and the special unitholder meetings will be held 
in mid-March. The Boards of Trustees of each of H&R and Primaris have 
unanimously agreed to recommend that their respective unitholders vote in 
favour of the transaction.

Assuming the requisite approvals and consents are received and other 
conditions are met or waived, the plan of arrangement is expected to be 
completed by late March.

About H&R REIT

H&R REIT is an open-ended real estate investment trust, which owns a North 
American portfolio of 42 office, 115 industrial and 138 retail properties 
comprising over 45 million square feet and 2 development projects, with a fair 
value of approximately $10 billion. The foundation of H&R REIT's success since 
inception in 1996 has been a disciplined strategy that leads to consistent and 
profitable growth. H&R REIT leases its properties long term to creditworthy 
tenants and strives to match those leases with primarily long-term, fixed-rate 

Forward-looking Statements

Certain statements in this news release contain forward-looking information 
within the meaning of applicable securities laws (also known as 
forward-looking statements) including, in particular, (i) that Primaris and 
H&R will complete the proposed Arrangement in accordance with the terms and 
conditions of the Arrangement Agreement, and (ii) the accuracy of management's 
assessment of the effects of the successful completion of the proposed 
Arrangement. Readers are cautioned not to place undue reliance on forward 
looking statements. H&R has tried to identify these forward looking statements 
by using words such as "may", "will", "should", "expect", "anticipate", 
"believe", "intend", "plan", "estimate", "potentially" and similar 
expressions. Such forward-looking statements reflect current beliefs of 
H&R and are based on information currently available to management of H&R. 
These statements are not guarantees of future performance and are based on 
estimates and assumptions of H&R that are subject to risks and uncertainties, 
including those discussed in materials of H&R filed with the Canadian 
securities regulatory authorities from time to time, which could cause the 
actual results and performance of H&R to differ materially from the 
forward-looking statements contained in this news release. Those risks and 
uncertainties include, among other things, risks related to: prices and market 
value of securities of H&R; availability of cash for distributions; 
development and financing relating to the Bow development of H&R; restrictions 
pursuant to the terms of indebtedness; liquidity; credit risk and tenant 
concentration; interest rate and other debt related risk; tax risk; ability to 
access capital markets; dilution; lease rollover risk; construction risks; 
currency risk; unitholder liability; co-ownership interest in properties; 
competition for real property investments; environmental matters; reliance on 
one corporation for management of substantially all of the properties of H&R 
REIT and changes in legislation and indebtedness of H&R. Material factors or 
assumptions that were applied in drawing a conclusion or making an estimate 
set out in the forward-looking statements include that the general economy is 
stable; local real estate conditions are stable; interest rates are relatively 
stable; and equity and debt markets continue to provide access to capital. H&R 
cautions that this list of factors is not exhaustive. Although the 
forward-looking statements contained in this news release are based upon what 
H&R believes are reasonable assumptions, there can be no assurance that actual 
results will be consistent with these forward-looking statements. All 
forward-looking statements in this news release are qualified by these 
cautionary statements. These forward-looking statements are made as of today, 
and H&R, except as required by applicable law, assumes no obligation to update 
or revise them to reflect new information or the occurrence of future events 
or circumstances.

This press release does not constitute an offer to sell or the solicitation of 
an offer to buy any securities or a solicitation of any vote or approval. The 
distribution of this press release outside of Canada may be restricted by law 
and therefore persons outside of Canada into whose possession this press 
release comes should inform themselves about, and observe, such restrictions. 
Any failure to comply with the restrictions may constitute a violation of the 
securities law of any applicable jurisdiction.

Non-GAAP Measures

The foregoing includes a reference to a non-Generally Accepted Accounting 
Principles ("GAAP") measure that should not be construed as an alternative to 
comprehensive income (loss) or cash provided by operations and may not be 
comparable to similar measures presented by other issuers as there is no 
standardized meaning of FFO under GAAP. Management believes that this is a 
meaningful measure of operating performance. Readers are encouraged to refer 
to H&R's combined MD&A for further discussion of non-GAAP measures presented.

Larry Froom, Chief Financial Officer, H&R REIT (416) 635-7520, or 

SOURCE: H&R Real Estate Investment Trust

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CO: H&R Real Estate Investment Trust
ST: Ontario

-0- Jan/25/2013 00:19 GMT

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