H&R REIT to increase unitholders' distributions 5% commencing in January 2008

    TORONTO, Dec. 19 /CNW/ - H&R Real Estate Investment Trust (TSX: HR.UN)
("H&R" or "the REIT") announced today an increase to its cash distributions to
its unitholders commencing in January 2008 and modifications to its landmark
development project in Calgary called The Bow.

    Distribution Increase

    H&R's Board of Trustees has approved a 5.1% or approximately $0.07 per
unit increase in cash distributions to its unitholders to $1.44 on an annual
basis. The first two monthly cash distributions of $0.12 per unit will be
scheduled as follows.

                          Record date    Distribution date
    January 2008           January 22           January 31
    February 2008         February 19          February 29

    Development of The Bow Project

    H&R is pleased to provide the following update on The Bow project:

    -   The REIT has received the initial building permits for the project,
        excavation of the North block is almost complete and the pouring of
        the foundation footings has commenced.
    -   An increase in the projected budgeted costs has been mostly offset by
        a further agreement with EnCana Corporation to increase H&R's rental
        income. Based on its current assumptions, the REIT does not expect
        the economics of the project to materially change for the REIT as a
        result of the foregoing and consequently H&R has waived its rights to
        unwind the transaction.

    H&R President and CEO Tom Hofstedter said, "H&R's current portfolio
continues to be virtually fully leased, generally on a long-term basis with
contractual rent escalations and the average mortgage term to maturity is in
excess of 10 years. We are therefore pleased to increase distributions to
unitholders by 5% commencing in 2008. Meanwhile, the fundamental drivers of
The Bow project remain sound: the tenant is highly creditworthy with
investment-grade ratings; the triple-net, 25-year lease will represent
Canada's largest single-tenant lease and as several of the major components of
the building's development have been awarded we have improved confidence in
the current budgeted cost of the project. We expect to initiate discussions
for debt and equity participation in the new year."

    About H&R REIT

    H&R REIT is a TSX-listed, open-ended real estate investment trust, which
owns a North American portfolio of 35 office, 125 industrial and 142 retail
properties comprising 43 million square feet, with a net book value of
$4.5 billion. The foundation of H&R's success since inception in 1996 has been
a disciplined strategy that leads to consistent and profitable growth.
Additional information regarding H&R REIT is available at www.hr-reit.com and
on www.sedar.com.

    This news release contains forward-looking statements with the meaning of
applicable securities laws, including statements relating to the Trust's
objectives, and strategies to achieve those objectives, and similar statements
concerning anticipated future events, results, circumstances, performance or
expectations that are not historical facts. Such forward-looking statements
reflect the Trust's current beliefs and are based on information currently
available to management. These statements are not guarantees of future
performance and are based on the Trust's estimates and assumptions that are
subject to risk and uncertainties, including those discussed in the Trust's
materials filed with the Canadian securities regulatory authorities from time
to time, which could cause the actual results and performance of the Trust to
differ materially from the forward-looking statements contained in this news
release. Those risks and uncertainties include, among other things, risks
related to: price of the units; real property ownership; availability of cash
flow; competition for real property investments; government regulation;
interest rates and financing; environmental matters; redemption of the units;
unitholder liability; co-ownership interest in properties; reliance on one
corporation for management of a significant number of the Trust's properties;
dependence on key personnel; potential conflicts of interest; changes in
legislation; investment eligibility; construction risks; currency risk; tax
treatment of income trusts; dilution; ability to access capital markets; cash
distributions; indebtedness of the Trust; and statutory remedies. 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 remains stable; interest rates are relatively stable; acquisition
capitalization rates are stable; competition for acquisitions of high quality
office, industrial and retail properties remains strong; and equity and debt
markets continue to provide access to capital. The Trust cautions that this
list of factors is not exhaustive. Although the forward-looking statements
contained in this news release are based upon what the Trust 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.
The forward-looking

    %SEDAR: 00002857E

For further information:

For further information: Larry Froom, Chief Financial Officer, H&R REIT,
(416) 635-7520, or e-mail info@hr-reit.com

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