Homburg Canada Real Estate Investment Trust Announces $110 Million Bought Deal Financing

MONTREAL, QUEBEC--(Marketwire - Feb. 23, 2011) -

NOT FOR DISTRIBUTION TO U.S. NEWS WIRE SERVICES OR DISSEMINATION IN THE UNITED STATES.

Homburg Canada Real Estate Investment Trust (the "REIT") (TSX:HCR.UN) and Homburg Invest Inc. (the "Selling Unitholder") have entered into an agreement to sell 9,650,000 units of the REIT (the "Units") on a bought deal basis at a price of $11.40 per Unit to a syndicate of underwriters co-led by TD Securities Inc., CIBC, Desjardins Securities Inc. and Scotia Capital Inc. (the "Underwriters"). The REIT will issue 7,150,000 Units for gross proceeds to the REIT of $81,510,000, and the Selling Unitholder will sell 2,500,000 Units for gross proceeds to the Selling Unitholder of $28,500,000. The REIT has granted to the Underwriters an over-allotment option to purchase up to an additional 1,447,500 Units at the same price, exercisable in whole or in part at any time for a period of up to 30 days following closing of the offering.

The REIT will use the net proceeds from the offering to fund future acquisitions and for general trust purposes. The REIT will not receive any proceeds from the Units sold by the Selling Unitholder. The Selling Unitholder and its affiliates currently own a 40.1% interest in the REIT through the ownership of 14,313,866 Units and 2,745,502 Class B limited partnership units of Homburg Canada REIT Limited Partnership ("Class B LP Units"). Upon completion of the offering, but before giving effect to the over-allotment option, it is anticipated the Selling Unitholder and its affiliates will own 11,813,866 Units and 2,745,502 Class B LP Units, representing an interest of approximately 29.3% in the REIT. 

"Consistent with our strategy and in the normal course of business, we are engaged in discussions with respect to possible acquisitions of new properties," said James Beckerleg, Chief Executive Officer. "This financing enables us to pursue current and future discussions with confidence."

Closing of the offering is expected to occur on or about March 15, 2011. The offering is subject certain conditions, including customary regulatory approvals. The terms of the offering will be described in a short form prospectus to be filed with the securities commissions and other similar regulatory authorities in each of the provinces of Canada on or about March 1, 2011.

This press release is not an offer of securities for sale in the United States. The units being offered have not been and will not be registered under the United States Securities Act of 1933 and accordingly are not being offered for sale and may not be offered, sold or delivered, directly or indirectly within the United States, its possessions and other areas subject to its jurisdiction or to, or for the account or for the benefit of a U.S. person, except pursuant to an exemption from the registration requirements of that Act.

About Homburg Canada Real Estate Investment Trust

Homburg Canada Real Estate Investment Trust is an unincorporated open-ended real estate investment trust established pursuant to a declaration of trust under the laws of the Province of Quebec. Managed internally, the REIT owns a portfolio of Canadian income-producing commercial properties, consisting mainly of retail and office properties with certain industrial properties, as well as certain income-producing multi-family residential properties. The properties comprise approximately 6.9 million square feet of commercial gross leasable area and 1,725 multi-family residential units located in Quebec, Atlantic Canada, Western Canada and Ontario.

Forward-Looking Statements

This news release may contain forward-looking information within the meaning of applicable securities legislation. Forward-looking information is based on a number of assumptions and is subject to a number of risks and uncertainties, many of which are beyond the REIT's control that could cause actual results and events to differ materially from those that are disclosed in or implied by such forward-looking information. Such risks and uncertainties include, but are not limited to, the factors discussed under "Risk Factors" in the prospectus of the REIT dated May 14, 2010.

The REIT's objectives and forward-looking statements are based on certain assumptions, including that (i) the REIT will receive financing on favourable terms; (ii) the future level of indebtedness of the REIT and its future growth potential will remain consistent with the REIT's current expectations; (iii) there will be no changes to tax laws adversely affecting the REIT's financing capacity or operations; (iv) the impact of the current economic climate and the current global financial conditions on the REIT's operations, including its financing capacity and asset value, will remain consistent with the REIT's current expectations; (v) the performance of the REIT's investments in Canada will proceed on a basis consistent with the REIT's current expectations; and (vi) capital markets will provide the REIT with readily available access to equity and/or debt.