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  withdrawn and affiliates of KingSett Capital owning approximately 7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
strategy to 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 T trault 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