Primaris REIT with H&R REIT and KingSett Capital Led Consortium Announces Amended Transaction Offering Superior Value to

  Primaris REIT with H&R REIT and KingSett Capital Led Consortium Announces
     Amended Transaction Offering Superior Value to Primaris Unitholders

PR Newswire

TORONTO, Feb. 5, 2013

New Offer Made by H&R REIT and KingSett Capital Led Consortium

Highlights of the Amended Transaction

  *An increase in aggregate consideration to Primaris unitholders comprised
    of a cash election of $28.00 per Primaris unit (total cash consideration
    of $1.28 billion increased from $700 million in the previous H&R/Primaris
    transaction); or a unit election of 1.166 H&R Units per Primaris unit
    (increased from 1.13 in the previous H&R/Primaris transaction)
  *The value of total consideration received (assuming full proration) will
    be $27.98 per Primaris unit, consisting of $12.58 in cash and 0.642 H&R
    Units (valued at $15.40 based on H&R's 20-day VWAP ended January 15, 2013,
    the last trading day prior to the previously announced H&R/Primaris
    transaction)
  *An increase in cash consideration, facilitated by the inclusion of the
    KingSett Capital led consortium, represents approximately 45 percent of
    total consideration and provides additional liquidity for Primaris
    unitholders
  *H&R is acquiring Primaris' operating platform together with 25 shopping
    centres (including Primaris' Alberta acquisitions announced on February 1,
    2013) valued in the aggregate at approximately $3.1 billion, at an overall
    5.6 percent capitalization rate. A complete list of the asset allocation
    for the transaction is included as appendix to this news release
  *KingSett Capital led consortium will acquire the remaining 18 properties
    in the Primaris portfolio valued at approximately $1.9 billion
  *The Amended and Restated Arrangement has received unanimous approval by
    the Boards of Trustees of both H&R and Primaris
  *The previously announced offer by KS Acquisition II LP has been withdrawn
    and affiliates of KingSett Capital owning approximately 7 percent of
    Primaris units outstanding have agreed to support the amended transaction
  *There will be no acquisition, disposition or property management fees
    payable to H&R's property manager in connection with this transaction

Investor presentation is available at http://www.hr-reit.com and
http://www.primarisrealvalue.com/

TORONTO, Feb. 5, 2013 /PRNewswire/ - H&R Real Estate Investment Trust and H&R
Finance Trust (collectively "H&R") (TSX: HR.UN) and Primaris Retail Real
Estate Investment Trust ("Primaris") (TSX: PMZ.UN) and the KingSett Capital
led consortium today announced that H&R and Primaris, together with PRR
Investments Inc., have amended their previously announced arrangement
agreement (dated January 16, 2013). Under the amended agreement (the "Amended
Agreement") the KingSett Capital led consortium will participate in the
transaction by acquiring certain properties from Primaris. The KingSett
Capital led consortium, which consists of certain KingSett Capital managed
funds, Ontario Pension Board and RioCan REIT, will acquire 18 Primaris
properties pursuant to separate purchase agreements between Primaris and the
consortium members.

Tom Hofstedter, CEO of H&R said, "We have created a stronger transaction for
both H&R and Primaris unitholders. With this transaction, H&R will become
Canada's largest and leading diversified real estate investment trust,
emulating the preferred real estate investment model adopted by large pension
plans worldwide. The revised transaction will be accretive to H&R's funds from
operations, reduce its overall leverage ratio and increase market
capitalization and liquidity, while allowing H&R to acquire a portfolio of
high quality Canadian shopping centres and a valuable management platform.
Overall, this is a transformational transaction for H&R that provides
considerable benefits for our unitholders."

John Morrison, CEO of Primaris said, "From the onset of our process we set out
to deliver superior value for our unitholders. The result of the two bidders
for Primaris joining in this amended transaction has created an opportunity
that provides a higher price than what was previously agreed upon. For the
benefit of our unitholders, our process has clearly maximized value. The
higher cash consideration in the amended transaction provides increased
liquidity, meanwhile for those unitholders electing H&R Units, the transaction
allows them the ability to maintain their investment in the REIT sector in a
tax efficient manner. We are pleased with the Amended Agreement and the value
delivered through the process for our unitholders and other stakeholders."

Jon Love, Managing Partner of KingSett Capital said, "We are pleased to be
partnering with H&R and working with Primaris on this amended transaction. We
believe this is a very good outcome for all involved."

KingSett Capital led consortium members Ontario Pension Board and RioCan also
commented on the amended transaction:

Mark Fuller, CEO of Ontario Pension Board said, "The amended transaction
agreement continues to meet our deal objectives of acquiring high quality real
estate assets in support of our long-term investment strategyto increase our
exposure to private market investments."

Ed Sonshine, CEO of RioCan REIT added: "We are pleased to be participating in
the amended transaction and the acquisition of interests in two prominent
regional malls within the GTA. The properties we have committed to purchase
are fully aligned with our strategy and will further strengthen RioCan's
portfolio of enclosed malls."

Transaction Details

Pursuant to the Amended Agreement, unitholders of Primaris will be entitled to
elect to receive $28.00 in cash, subject to an aggregate cash consideration of
approximately $1.28 billion or 1.166 stapled units of H&R ("H&R Units"), with
approximately 65.2 million H&R Units to be issued in aggregate.

  *In the event that Primaris unitholders elect either more or less cash or
    H&R Units than are available, the total consideration shall be prorated,
    with the actual consideration mix to be received by each unitholder
    adjusted to reflect the total elections
  *Assuming full proration (all Primaris unitholders elect cash or all
    Primaris unitholders elect H&R Units), Primaris unitholders will receive
    $12.58 in cash and 0.642 H&R Units for each Primaris unit
  *Based on H&R's 20-day VWAP ended January 15, 2013 (the last trading day
    prior to the announcement of the prior H&R/Primaris transaction) of
    $23.99, the value of the fully prorated consideration received under the
    Amended Agreement will be $27.98 per Primaris unit, which represents a
    premium of approximately 21.4 percent to Primaris' closing price of $23.04
    on December 4, 2012 (the last trading day before KS Acquisition II LP
    announced its intention to make an offer for Primaris). Upon completion of
    the amended transaction, Primaris unitholders will own approximately 25
    percent of H&R
  *The amended transaction is structured so holders of Primaris units who are
    resident in Canada and who hold their Primaris units as capital property
    will receive their H&R Units on a substantially tax-deferred rollover (the
    receipt of H&R Finance Trust units, expected to be less than 4 percent of
    the total unit consideration, will be taxable)

H&R will acquire a $2.7 billion portfolio of 17 of Primaris' existing shopping
centres along with a further 9 properties valued at approximately $377 million
that Primaris intends to acquire in advance of the close of the H&R and
KingSett transaction. The remaining properties in Primaris' existing portfolio
will be acquired by members of the KingSett Capital led consortium and are
valued at approximately $1.9 billion, including assumed debt.

The previously announced KingSett Capital led consortium offer has been
withdrawn in accordance with its terms and affiliates of KingSett Capital that
own approximately 7 percent of Primaris units have agreed to support the
Amended Agreement.

The Board of Trustees of Primaris and H&R have unanimously agreed to vote
their units in favour of the Amended Agreement and to recommend that their
respective unitholders vote in favour of the transaction.

Benefits to Primaris

  *The amended transaction is financially superior for Primaris unitholders
    with the value of the consideration (assuming full proration) to be
    received per Primaris unit increased to $27.98, compared to $27.33 under
    the prior agreement (based on H&R's 20-day ended January 15, 2013)
  *Provides Primaris unitholders with an option to retain ownership in the
    Canadian enclosed shopping centre asset class or to elect to receive an
    immediate cash payment, subject to proration, described above
  *The increase in aggregate cash consideration of approximately $578 million
    provides additional liquidity for those Primaris unitholders that elect to
    receive cash consideration
  *Improves distributions by 24 percent from the current annualized rate of
    $1.27 to $1.57 for those Primaris units that are exchanged for H&R Units
  *Substantially preserves the value of the professional management platform
    developed over the last 10 years

Benefits to H&R

  *Unique opportunity to acquire a portfolio of 25 high quality Canadian
    shopping centres along with a strong professional management platform
  *Financially attractive transaction that is expected to be approximately
    $0.02 accretive to Funds From Operations per unit and results in a
    deleveraging of H&R's balance sheet from 52.1 percent to approximately
    51.1 percent Debt to Fair Value
  *Maintains H&R's liquidity with cash available from undrawn bank facilities
    of approximately $550 million
  *Broader portfolio diversification by geographic region, asset class and
    tenant base
  *Increased market capitalization will result in substantially enhanced
    liquidity for unitholders
  *Combines two businesses having similar philosophies with respect to asset
    and tenant qualities and a disciplined approach to real estate investing

Additional Details

  *The transaction continues to be structured as a Plan of Arrangement and is
    subject to the approval of 66 ⅔ percent 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
  *Primaris to pay cash proceeds to its unitholders by way of a redemption of
    units using the proceeds from the KingSett asset sale transactions
  *Special unitholder meetings of Primaris and H&R expected to be held in
    late March
  *The transaction is subject to regulatory approvals (including under the
    Competition Act (Canada)), court approvals, required consents and other
    customary closing conditions. Assuming the requisite approvals are
    received and other conditions are met or waived, the transaction is
    expected to be completed in early April
  *H&R and KingSett are entitled to an aggregate all-cash break fee of $100
    million in certain circumstances, including the acceptance by Primaris of
    an unsolicited superior proposal from a third party
  *H&R is entitled to receive customary deal protection provisions including
    a right to match any superior proposal that is received by Primaris on an
    unsolicited basis
  *No acquisition, disposition or property management fees shall be payable
    to H&R's property manager with respect to this transaction or for any
    future acquisition of enclosed shopping centres in Canada
  *Holders of Primaris convertible debentures, prior to closing, will be
    entitled to convert their debentures in accordance with their terms and
    participate in the arrangement on the same basis as other unitholders and
    following closing, will be entitled to receive H&R Units upon conversion
    based on the exchange ratio contemplated by the transaction
  *The circular to be mailed to Primaris unitholders will describe the
    material Canadian federal income tax considerations associated with the
    transaction. Primaris unitholders are urged to carefully review these tax
    considerations and to consult their own tax advisors to determine the
    particular tax effects to them of the transaction, having regard to their
    own particular circumstances

Primaris Independent Committee

Canaccord Genuity, a financial advisor to the Primaris Independent Committee,
has provided the Board of Trustees of Primaris with an opinion to the effect
that, as of the date of the opinion and based upon and subject to the
limitations and qualifications therein, the consideration to be received under
the Amended Agreement is fair, from a financial point of view, to Primaris
unitholders.

The Independent Committee carefully considered a number of factors, including
the terms of the transaction, the assets and business of H&R, the outcome of
the global search process conducted, including the Independent Committee's
belief that it is very unlikely that a superior offer will emerge for all the
outstanding units of Primaris, and the opinion of Canaccord Genuity in
recommending the transaction to the Board of Trustees of Primaris.

Based in part on the recommendation of the Independent Committee and the other
factors noted herein, the Board of Trustees of Primaris determined that the
consideration to be received by Primaris unitholders under the Amended
Agreement is fair, from a financial point of view, and it would be in the best
interests of Primaris to enter into the Amended Agreement.

Advisors

Canaccord Genuity and Evercore Partners were engaged by the Primaris
Independent Committee as its financial advisors. McCarthy Tétrault LLP was
engaged as counsel to the Independent Committee and to Primaris, and Cassels
Brock & Blackwell LLP was retained as counsel to Primaris.

Blake, Cassels & Graydon LLP was retained by H&R as its legal counsel.

TD Securities Inc. and CIBC World Markets were engaged by KingSett Capital as
its financial advisors. Osler, Hoskin & Harcourt LLP and Bennett Jones LLP
were retained as its legal advisors.

Stikeman Elliott LLP and Fogler, Rubinoff LLP were retained by RioCan REIT as
legal advisors.

About H&R

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's REIT 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
financing.

H&R Finance Trust is an unincorporated investment trust, which primarily
invests in notes issued by a U.S. corporation, which is a subsidiary of H&R
REIT. The current note receivable is U.S. $162.5 million. In 2008, H&R REIT
completed an internal reorganization, which resulted in each issued and
outstanding H&R unit trading together with a unit of H&R Finance Trust as a
"Stapled Unit" on the Toronto Stock Exchange.

About Primaris

Primaris is a TSX listed real estate investment trust that specializes in
owning and operating Canadian enclosed shopping centres that are dominant in
their local trade areas. Merchandising for each property is dynamic in order
to meet the unique needs of its local customers and the community. Primaris
maintains a high occupancy rate at its shopping centres and has retail tenants
that offer new and exciting brands. Primaris owns 35 income-producing
properties comprising approximately 14.7 million square feet located in
Canada. As of December 31, 2012, Primaris had 100,346,768 units issued and
outstanding (including exchangeable units for which units have yet to be
issued).

About KingSett Capital

KingSett Capital is Canada's leading private equity real estate investment
business, co-investing with pension fund and high net worth individual
clients. KingSett Capital invests through a series of growth funds, mortgage
funds and a core investment income fund, each with its own risk/return
strategy. KingSett Capital has executed transactions valued at over $12.5
billion in the past 10 years.

About Ontario Pension Board

Ontario Pension Board administers Ontario's Public Service Pension Plan, a
defined benefit pension plan serving more than 42,000 members and their
employers as well as more than 40,000 pensioners and deferred members. With
more than $17 billion in assets, it is one of Canada's largest pension plans.
Over the last 20 years, Ontario Pension Board has become one of Canada's
leading direct owners of high quality shopping centres.

About RioCan

RioCan is Canada's largest real estate investment trust with a total
capitalization of approximately $13.9 billion as at September 30, 2012. It
owns and manages Canada's largest portfolio of shopping centres with ownership
interests in a portfolio of 338 retail properties containing more than 80
million square feet, including 49 grocery anchored and new format retail
centres containing 12.4 million square feet in the United States through
various joint venture arrangements as at September 30, 2012. RioCan's
portfolio also includes 10 properties under development in Canada. For further
information, please refer to RioCan's website at www.riocan.com.

FORWARD LOOKING INFORMATION

This press release contains forward looking statements that reflect current
expectations of each of Primaris, H&R and KingSett Capital about their future
results, performance, prospects and opportunities, including with respect to
the closing, costs and benefits of the proposed transaction and all other
statements that are not historical facts. The timing and completion of the
proposed transaction is subject to customary closing conditions, termination
rights and other risks and uncertainties including, without limitation,
required regulatory, court, and unitholder approvals. Accordingly, there can
be no assurance that the proposed transaction will occur, or that it will
occur on the timetable or on the terms and conditions contemplated in this
news release. The proposed transaction could be modified, restructured or
terminated. Readers are cautioned not to place undue reliance on forward
looking information. Each of Primaris, H&R and KingSett Capital 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. By its nature, such forward
looking information necessarily involves known and unknown risks and
uncertainties that may cause actual results, performance, prospects and
opportunities in future periods of Primaris, H&R or KingSett Capital to differ
materially from those expressed or implied by such forward looking statements.

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 "funds from operations" under GAAP. Management of H&R
believes that funds from operations is a meaningful measure of operating
performance. Readers are encouraged to refer to H&R's combined MD&A for
further discussion of this non-GAAP measure."

Appendix: Asset Allocation Under the Amended Agreement

Properties                                           Location
                                                    
H&R REIT                                             
                                                    
Dufferin Mall                                        Toronto, ON
Stone Road Mall                                      Guelph, ON
Cataraqui Centre                                     Kingston, ON
Edinburgh Market Place                               Guelph, ON
Place d'Orleans                                      Orleans, ON
South Cambridge Centre                               Cambridge, ON
Northland Professional Centre                        Calgary, AB
Northland Shoppes                                    Calgary, AB
Northland Village Mall                               Calgary, AB
Park Place Shopping Centre                           Lethbridge, AB
Sunridge Mall                                        Calgary, AB
Orchard Park Shopping Centre                         Kelowna, BC
Garden City                                          Winnipeg, MB
Grant Park                                           Winnipeg, MB
McAllister Place                                     Saint John, NB
Regent Mall                                          Fredericton, NB
Place du Royaume                                     Saguenay, QC
                                                    
NOTE: The 9 properties to be acquired by Primaris as announced on February 1,
2013 will be assumed by H&R
                                                    
KingSett CREIF and OPB (50/50 Joint                  
Venture)
                                                    
Midtown Plaza Shopping Centre                        Saskatoon, SK
Cornwall Centre                                      Regina, SK
                                                    
KingSett CREIF and RioCan REIT (50/50                
Joint Venture)
                                                    
Burlington Mall                                      Burlington, ON
                                                    
OPB (50% Interest)                                   
                                                    
Woodgrove Centre                                     Nanaimo, BC
                                                    
RioCan REIT                                          
                                                    
Oakville Place                                       Oakville, ON
                                                    
KS Acquisition II LP (a 50/50 Joint Venture of KingSett Growth LP No 5 and
OPB)
                                                    
Sugarloaf Mall                                       Atholville, NB
Place Vertu                                          Montreal, QC
Place Fleur de Lys                                   Quebec City, QC
Eglinton Square                                      Toronto, ON
Yonge Street Properties                              Toronto, ON
Lambton Mall                                         Sarnia, ON
Tecumseh Mall                                        Windsor, ON
Heritage Place Shopping Centre                       Owen Sound, ON
Alliston Mills                                       New Tecumseth, ON
St. Albert Centre                                    St. Albert, AB
Driftwood Mall                                       Courtenay, BC
Aberdeen Mall                                        Kamloops, BC
Westbank Shopping Centre                             Kelowna, BC















SOURCE KingSett Capital

Contact:

Primaris Unitholders
Kingsdale Shareholder Services Inc.
1 (866) 581-1571 (English and Français) toll-free in North America
(416) 867-2272 outside of North America (collect calls accepted)
E-mail:contactus@kingsdaleshareholder.com

H&R
Tom Hofstedter
President & Chief Executive Officer (416) 635-7520
Larry Froom
Chief Financial Officer (416) 635-7520

Media Contact for H&R REIT and KingSett Capital
Longview Communications
Louise Kozier (604) 644 6090

Primaris
John Morrison
President & Chief Executive Officer (416) 642-7860
Louis Forbes
Executive Vice President & Chief Financial Officer (416) 642-7810

Media Contact for Primaris Retail REIT
NATIONAL Public Relations
Peter Block (416) 848-1431
Jennifer Lee (416) 848-1383
 
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