Partners Real Estate Investment Trust Provides Holyrood Transaction Update and Property Sale Update

BARRIE, ONTARIO--(Marketwired - Sept. 1, 2014) - Partners Real Estate Investment Trust ("Partners REIT" or "Partners" or "REIT") (TSX:PAR.UN) is pleased to provide an update on both the unwinding of its purchase of three retail centres from Holyrood Holdings ("Holyrood") and its sale of a small portfolio of Ontario properties. These items were discussed in detail within a press release entitled "Partners REIT Announces Strategic Steps to Improve Financial Position," disseminated on August 14, 2014.

HOLYROOD TRANSACTION UPDATE

Partners REIT has previously announced that it entered into a Rescission Agreement dated June 6, 2014 with Holyrood providing for the rescission of the April 2014 transaction in which the REIT acquired three Ontario retail centres (in Hamilton, London and Kemptville) from Holyrood for an aggregate purchase price of $83.2 million. Partners satisfied the purchase price for the three properties by assuming mortgage debt and directing its subsidiary, Partners Ontario Limited Partnership, to issue 4,813,517 exchangeable LP Units to Holyrood. Concurrently, Holyrood subscribed for 1,188,188 units of Partners REIT at $5.80 per unit and issued a promissory note to the REIT in payment. The purpose of the proposed rescission is to reverse all these transactions and put the parties, to the extent possible, back into the position they were in prior to the Holyrood transaction.

The REIT and Holyrood have now commenced an application to the Ontario Superior Court for an Order rescinding the original Agreement of Purchase and Sale together with the related agreements. The REIT has been advised by Holyrood that it is in the process of arranging for the release of the units of Partners Ontario LP and Partners REIT that it had pledged as collateral for a loan following the Holyrood transaction in April 2014. This release of the pledged units will allow the units to be cancelled upon the completion of the rescission. There are a number of conditions that must be satisfied before the rescission can be completed, including obtaining the Order from the Ontario Superior Court. Although Partners REIT and Holyrood are both very confident that they have the appropriate grounds to apply for the Court Order, there is no assurance that the rescission will be completed until all of the conditions are satisfied and the appropriate Court Order is received.