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TSX SYMBOL: HR.UN

TORONTO, Oct. 1 /CNW/ - H&R Real Estate Investment Trust (the "REIT") (TSX: HR.UN) announced today that the internal reorganization (the "Reorganization") of the REIT, which was approved by the REIT's unitholders at a special meeting on September 19, 2008, has been successfully completed. The Reorganization was approved by the Court of Queen's Bench of Alberta on September 26, 2008.

The Reorganization has resulted in the following:
  (i)  the completion of certain transactions in the course of which each
       unitholder received, for each REIT unit held, a unit of a
       "sister" trust ("H&R Finance Trust"). Each issued and outstanding
       REIT unit now trades together with a unit of H&R Finance Trust as
       a "Stapled Unit" on the Toronto Stock Exchange under the symbol
       HR.UN; and
  (ii) the completion of certain transactions whereby H&R TT (LP) Inc., a
       wholly-owned subsidiary of the REIT, ultimately transferred all of
       its assets (which primarily consisted of an interest in a
       partnership that holds the Telus Tower in Calgary, Alberta) to the
       REIT.

As described in more detail in the management information circular of the REIT dated August 20, 2008 (the "Circular"), Part XIII.2 of the Income Tax Act (Canada) (the "Tax Act") imposes a tax on each holder of REIT units that is neither a person resident in Canada for purposes of the Tax Act nor a "Canadian partnership" for purposes of the Tax Act (a "Non-Resident Holder") equal to 15% of the fair market value of the units of H&R Finance Trust distributed to such Non-Resident Holder at the time of their distribution. It is estimated that each unit of H&R Finance Trust had a fair market value of approximately $0.91 at the effective time of the Reorganization, and therefore Part XIII.2 non-resident withholding tax of approximately $0.14 is required to be withheld in respect of each unit of H&R Finance Trust distributed to Non-Resident Holders. As described in the Circular, registered REIT unitholders who do not complete and deliver a letter of transmittal, as mailed to registered unitholders of the REIT with the Circular, in accordance with the instruction set out therein, on or prior to October 31, 2008, will be treated by the REIT as Non-Resident Holders for purposes of remittance by the REIT of non-resident withholding tax under the Tax Act (including, for the avoidance of doubt, tax under Part XIII.2 of the Tax Act). Non-Resident Holders are encouraged to consult their broker or investment adviser with regard to arrangements for remittance of any applicable Part XIII.2 non-resident withholding tax. Unitholders are encouraged to review in detail the management information circular of the REIT dated August 20, 2008 for more information.

About H&R REIT

The REIT is a TSX-listed, open-ended real estate investment trust, which owns a North American portfolio of 34 office, 124 industrial and 129 retail properties comprising 43 million square feet, with a net book value of $4.4 billion. The foundation of the REIT's success is a disciplined strategy that leads to consistent and profitable growth.

Additional information regarding the REIT is available on the REIT's website at: www.hr-reit.com.