MISSISSAUGA, ONTARIO--(Marketwire - July 21, 2011) - TransGlobe Apartment Real Estate Investment Trust (TSX:TGA.UN) (the "REIT") announced today that it has entered into agreements to internalize the asset and property management functions of the REIT, to indirectly acquire a portfolio of 57 properties (the "Acquisition Properties") from TransGlobe Investment Management Ltd. and its affiliates (collectively, "TGIM") and co-owners thereof, and to sell approximately $175 million of subscription receipts at a price of $11.25 per subscription receipt and $50 million aggregate principal amount of extendible convertible unsecured subordinated debentures to partially finance the acquisition.

HIGHLIGHTS:

• The REIT agrees to acquire, from TGIM and its co-owners, a portfolio of 56 residential properties aggregating 7,518 suites predominantly located in markets where the REIT currently owns other properties, one commercial building and instalment notes, for an aggregate purchase price of approximately $740 million.
• The REIT agrees to sell two residential properties for an aggregate sale price of approximately $24 million to TGIM, representing a premium to their appraised value.
• The acquisition is expected to be immediately accretive to the REIT's AFFO per unit.
• The REIT agrees to acquire for nominal consideration from TGIM all assets required to fully internalize the asset and property management of the REIT and its properties.
• The REIT will sell, on a bought-deal basis, approximately $175 million of subscription receipts and $50 million aggregate principal amount of extendible convertible unsecured subordinated debentures to partially finance the cash component of the purchase price and acquisition costs.
• TGIM will take approximately $83 million of Class B units of new REIT limited partnerships at the subscription receipt offering price, increasing its effective interest in the REIT from approximately 16% to 21%.
• The acquisition (including the sale) and the internalization must be approved by the affirmative vote of a majority of minority REIT unitholders at a meeting scheduled for August 31, 2011.
• A special committee of independent REIT trustees was established and retained CB Richard Ellis and Stonecap Securities to, among other things, prepare independent valuations of the Acquisition Properties, the sale properties and the instalment notes and provide a fairness opinion on the acquisition (including the sale) and the internalization.
• The independent trustees of the REIT unanimously recommend that unitholders vote in favour of the acquisition, the sale and the internalization.

"With the completion of these transactions, TransGlobe Apartment REIT will be transformed into one of Canada's largest multi-family landlords, with a total portfolio of 151 high quality properties aggregating 20,262 residential suites," commented Kelly Hanczyk, the REIT's Chief Executive Officer. "In addition, with the internalization of the asset and property management functions of the REIT, we will have full control of our portfolio and be in a position to continue to enhance cash flows and build value for our unitholders over the long term."

The Acquisition

The REIT has agreed to acquire a portfolio of 57 properties comprising 33 high rise, 31 mid rise and 30 low rise residential buildings and three townhouse complexes in total aggregating 7,518 residential suites, and one commercial building, located in the Provinces of Alberta, Ontario, Québec and Nova Scotia and predominantly situated in urban centres and geographic areas where the REIT has an established presence. The Acquisition Properties are currently operated and owned or co-owned by TGIM. Additionally, in consideration for the REIT assuming certain mortgages secured by the Acquisition Properties, TGIM will make instalment payments to the REIT pursuant to instalment notes (the "Notes") in order to achieve an effective weighted average interest rate of 3.5% per annum on such mortgages.

The purchase price for the Acquisition Properties and the Notes (the "Acquisition") of approximately $740 million implies a capitalization rate on the purchase price attributable to the Acquisition Properties of approximately 6.0% and will be satisfied by a combination of the following:

• Approximately $217 million from the net proceeds of the public offerings described below.
• Approximately $170 million from the proceeds of new mortgages to be secured on certain Acquisition Properties, which the REIT expects to have in place prior to closing.
• The assumption of approximately $263 million aggregate principal amount of mortgage debt on certain Acquisition Properties, which will have an effective weighted average interest rate, after giving effect to the payments to be made on the Notes, of 3.6% per annum and an expected weighted average term to maturity of 2.3 years.
• The issuance to TGIM of approximately $83 million of Class B units of new limited partnerships (the "New LPs") to be formed by the REIT to hold the Acquisition Properties at the $11.25 offering price (which will be economically equivalent to and exchangeable for REIT units) and accompanying special voting units of the REIT. Following completion of the Acquisition, it is expected that TGIM will hold an approximate 21% effective interest in the REIT through its ownership of REIT units and Class B units of limited partnerships controlled by the REIT, including the New LPs (collectively, the "REIT LPs").
• The net cash proceeds from the sale (the "Sale") of 411 Ellerdale Street, Saint John, New Brunswick and 100 Rideau Street, Oshawa, Ontario (the "Sale Properties") by the REIT to TGIM, and cash on hand.

In addition, upon closing of the Acquisition, availability under the REIT's credit facility will increase by $40 million to $65 million.

The Acquisition (including the Sale) is expected to close on or about September 1, 2011 and is subject to a unitholder vote and customary closing conditions, including satisfactory due diligence, lender and regulatory consents.

Management Internalization

TGIM has agreed to transfer to the REIT for nominal consideration all of the assets, and assume certain obligations, required to fully internalize the asset and property management of the REIT and its properties and terminate its management relationships with the REIT (the "Internalization").

The Internalization will provide for the following upon closing:

• the removal of TGIM's right to separately appoint trustees under the REIT's declaration of trust;
• the resignation of Messrs. Daniel Drimmer and Alon Ossip, being the current TGIM appointed trustees, from the REIT's board of trustees;
• the termination of the non-competition agreement (which among other things contained a right of first opportunity in favour of the REIT to purchase properties owned or co-owned by TGIM) and the services agreement with TGIM;
• the removal of TGIM's affiliate as a general partner of all of the REIT LPs resulting in TGIM no longer being entitled to any further payment calculated with reference to gross book value or revenue from the REIT LPs;
• the REIT's covenant to refrain from amending its rights plan in a manner that materially adversely affects TGIM or including terms in any successor plan that materially adversely affect TGIM;
• the assignment of all "TransGlobe" trademarks and domain names to the REIT and the corresponding termination of the license agreement with TGIM;
• the continuation of the acquisition fee contained in the existing services agreement except that the fee will also apply to properties owned or co-owned by TGIM; and
• the process pursuant to which employees of TGIM which are required by the REIT in respect of the Internalization are transferred to the REIT.

The Internalization is expected to close on or about September 1, 2011 concurrently with the closing of the Acquisition and is subject to a unitholder vote and customary closing conditions.

Public Offerings

In order to partially finance the cash component of the purchase price of the Acquisition and acquisition costs, the REIT has agreed to sell, on a bought-deal basis, approximately $175 million of subscription receipts (the "Subscription Receipts") at a price of $11.25 per Subscription Receipt and $50 million aggregate principal amount of extendible convertible unsecured subordinated debentures (the "Debentures") to a syndicate of underwriters led by CIBC. The REIT has also granted the underwriters an over-allotment option to purchase up to an additional 2,333,333 Subscription Receipts (or, in certain circumstances, REIT units) at the same offering price, exercisable no later than 30 days after the closing of the offering.

On closing of the Acquisition, (i) one REIT unit will be automatically issued in exchange for each Subscription Receipt (subject to customary anti-dilution protections), without payment of additional consideration, (ii) an amount per Subscription Receipt equal to the amount per REIT unit of any cash distributions made by the REIT for which record dates have occurred during the period that the Subscription Receipts are outstanding will become payable in respect of each Subscription Receipt, and (iii) the proceeds from the sale of the Subscription Receipts will be released from escrow to the REIT.

The Debentures will have an initial maturity date of October 31, 2011 which will be extended to September 30, 2018 upon closing of the Acquisition. The Debentures will have an interest rate of 5.4% per annum payable semi-annually in arrears on March 31 and September 30 in each year commencing March 31, 2012. Each $1,000 principal amount of Debentures is convertible into approximately 63.4921 REIT units at any time following completion of the Acquisition, at the option of the holder, representing a conversion price of $15.75 per REIT unit.

On or before July 26, 2011, the REIT will file with the securities commissions or other similar regulatory authorities in each of the provinces and territories of Canada, a Prospectus Supplement to the Short Form Base Shelf Prospectus dated May 11, 2011 relating to the issuance of the Subscription Receipts and the Debentures. Closing of the offerings is expected to occur on or about July 29, 2011, subject to TSX and other necessary regulatory approvals.

Recommendation of the Board of Trustees of the REIT

As TGIM currently owns an approximately 16% effective interest in the REIT through ownership of the REIT units and Class B units of REIT LPs, the Acquisition, the Sale and certain aspects of the Internalization constitute "related party transactions" under Multilateral Instrument 61-101 - Protection of Minority Security Holders in Special Transactions ("MI 61-101") and therefore must be approved by the affirmative vote of a majority of minority REIT unitholders at a unitholders' meeting scheduled for August 31, 2011. The TSX will also require such unitholder approval due to the issuance of Class B units of New LPs to TGIM. The information circular and form of proxy in respect of such meeting is expected to be mailed to REIT unitholders in early August 2011.

A special committee (the "Special Committee") of independent trustees consisting of Graham Rosenberg (Chair), Michael Knowlton, David Leith, John Brough and Eric Slavens was established by the REIT for the purposes of considering the Acquisition, the Sale and the Internalization. The Special Committee retained Heenan Blaikie LLP as separate legal counsel and, in accordance with MI 61-101, retained CB Richard Ellis, Limited ("CBRE") to prepare independent valuations of the Acquisition Properties (which concluded that the estimated aggregate market value therefore as a portfolio as at June 7, 2011 ranged between $763 million and $778 million) and the Sale Properties and Stonecap Securities Inc. ("Stonecap", and together with CBRE, the "Valuators") to prepare an independent valuation of the Notes and the securities of two TGIM entities that directly hold three Acquisition Properties and which are being purchased by the REIT. The Special Committee also retained Stonecap to act as financial advisor and to provide its opinion (the "Fairness Opinion") regarding the fairness of the Acquisition (including the Sale) and the Internalization to the REIT and its unitholders from a financial point of view. Stonecap has concluded, in the Fairness Opinion, that the transactions are fair, from a financial point of view, to the REIT and its unitholders. The Special Committee has advised the board of trustees of the REIT that, based on a variety of factors, the Acquisition, the Sale and the Internalization are in the best interests of the REIT and has unanimously recommended to the board that the board recommend that REIT unitholders vote in favour of the transactions. The board has, in turn, resolved to recommend that REIT unitholders vote in favour of the transactions.

Description of the Acquisition Properties

"Following the closing of this transaction, the REIT will have grown its portfolio from 8,179 suites at the time of its IPO in May 2010 to 20,262 suites, representing an increase of 148% over approximately 15 months. Through this growth we have been able to increase the diversification of the REIT's portfolio, enhance liquidity for our unitholders and be of a size and scale that internalizing the management of the REIT and our properties is beneficial for our unitholders. Looking ahead, we intend to continue to increase our portfolio value by implementing programs to enhance revenue opportunities and continuing our proactive capital investment programs. We also intend to continue our internal growth by focusing on increasing occupancy and monthly rents and controlling costs, including specifically our energy costs. Finally, we intend to continue to pursue acquisitions to further diversify and strengthen out portfolio." commented Mr. Hanczyk.

The following table highlights information about the Acquisition Properties as at July 1, 2011:

Property		Total Suites	Year Built (approx.)	Asset Type	Net Rentable Area (Square Feet)	Occu- pancy(%)	Average Monthly Rent/Suite ($)
Alberta:
	1219 Centre Street, Brooks	24	2003	Low Rise	16,071	91.7%	813
Kitchener, Guelph and Southwestern Ontario:
	740 – 758 Kipps Lane, London	666	1971-78	High Rise	593,237	88.9%	700
	520 – 560 Mornington Avenue, London	418	1969	Mid Rise & High Rise	357,936	97.4%	722
	945 and 955 Huron Street, London	168	1973	Mid Rise	146,510	91.7%	752
	104 Confederation Drive, St. Thomas	118	1979	High Rise	92,583	99.2%	730
	265 Lawrence Avenue, Kitchener	104	2005	Low Rise	81,796	98.1%	847
	59 Ridout Street, London.	76	1955	Mid Rise	44,284	97.4%	622
	89 Willow Road, Guelph	68	1967	Mid Rise	54,125	97.1%	780
	135 Connaught Avenue and 543 Mornington Avenue, London	58	1967-68	Low Rise	49,563	84.5%	738
	351 Eramosa Road, Guelph	55	1970	Mid Rise	43,162	98.2%	801
	558 Durham Crescent, Woodstock	46	1972	Mid Rise	38,619	97.8%	719
	673 – 677 Richmond Street, London(1)	N/A	1993	Commercial
Total Southwestern Ontario		1,777			1,501,815	93.4%	726
Ontario Other:
	165 Ontario Street, St. Catharines	157	1963	High Rise	127,261	93.6%	726
	100 Lancaster Drive, Welland	112	1964	High Rise	82,440	93.8%	852
	363 Geneva Street, St. Catharines	109	1976	High Rise	94,267	99.1%	802
	351 Geneva Street, St. Catharines	106	1976	High Rise	100,615	96.2%	905
Total Ontario Other.		484			404,583	95.5%	812
Greater Toronto Area:
	5 and 15 Tangreen Court, Toronto	428	1968	High Rise	339,960	98.8%	1,189
	2020 Sheppard Avenue West, Toronto	204	1968	High Rise	195,498	95.6%	983
	2180 and 2190 Weston Road, Toronto	138	1964	High Rise	95,367	92.0%	836
	99 Dowling Avenue, Toronto	111	1955	Mid Rise	71,805	99.1%	734
	569 Broadview Avenue and 9 Tennis Crescent, Toronto	102	1925-31	Mid Rise	64,217	100.0%	935
	55 Park Street East, Mississauga	94	1971	High Rise	80,361	100.0%	1,115
	28 Helene Street North, Mississauga	90	1969	High Rise	69,454	97.8%	977
	3122 Hurontario Street, Mississauga	89	1971	High Rise	70,346	97.8%	1,062
	27 Thorncliffe Park Drive, Toronto	86	1960	Mid Rise	73,125	97.7%	936
	4 and 8 Rannock Street and 880 Pharmacy Avenue, Toronto	84	1953	Low Rise	66,613	97.6%	859
	32 – 34 Brookwell Drive, Toronto	82	1966	Low Rise	83,605	96.3%	1,012
	145 Cosburn Avenue, Toronto	80	1964	High Rise	59,021	100.0%	1,000
	211 and 215 Reedaire Court, Whitby	77	1958-73	Low Rise	60,032	100.0%	889
	7 Elizabeth Street North, Mississauga	76	1968	High Rise	57,366	100.0%	1,074
	2265 Victoria Park, Toronto	71	1961	Mid Rise	50,328	91.5%	935
	270 Sheldon Avenue, Toronto	71	1965	Mid Rise	73,191	100.0%	1,158
	65 Hillside Drive, Toronto	71	1953	Mid Rise	48,796	100.0%	888
	5 – 9 Stag Hill Drive, Toronto	67	1953	Mid Rise	50,025	91.0%	893
	150 Dowling Avenue, Toronto	66	1958	Mid Rise	46,456	98.5%	741
	25 Eccleston Drive, Toronto	61	1958	Mid Rise	45,202	98.4%	873
	26 Thorncliffe Park Drive, Toronto	61	1958	Mid Rise	47,233	98.4%	934
	22 Tinder Crescent, Toronto	59	1950's	Mid Rise	43,675	96.6%	882
	821 Kennedy Road, Toronto.	59	1961	Mid Rise	51,497	100.0%	993
	2300 Marine Drive, Oakville	47	1969	Mid Rise	44,835	100.0%	1,141
	2 Kinsdale Boulevard, Toronto	45	1954	Low Rise	37,505	100.0%	836
	16 St. Joseph Street, Toronto	37	1927	Mid Rise	21,084	100.0%	894
	327 Chisholm Avenue, Toronto	20	1961	Low Rise	11,768	100.0%	900
Total Greater Toronto Area		2,476			1,958,365	97.8%	986
Eastern Ontario:
	Heron Gate 4, Ottawa	754	1967-74	High Rise & Townhouses	686,208	95.6%	962
	Heron Gate 5, Ottawa	478	1967-74	High Rise & Townhouses	471,019	97.1%	977
	Heron Gate 6, Ottawa	87	1967-74	Townhouses	122,262	98.9%	1,175
Total Eastern Ontario		1,319			1,279,489	96.4%	981
Québec:
	395 and 415 Cote Vertu Boulevard, 1105 Jules Poitras Boulevard and 370 Thompson Boulevard, Montréal	244	1963	Low Rise	180,943	95.1%	622
	325 and 365 Cote Vertu Boulevard and 320 and 360 Thompson Boulevard, Montréal	204	1964	Low Rise	142,273	89.2%	681
	55 Laframboise Street, Montréal	143	1988	High Rise	121,464	95.1%	803
	1620 Victoria Avenue, Montréal	73	1972	High Rise	54,346	89.0%	746
Total Québec		664			499,026	92.6%	692
Atlantic Canada:
	2309 – 2334 Brunswick Street and 5214 Gerrish Street, Halifax, Nova Scotia(2)	505	1965-70's	Low & High Rise	366,552	95.5%	844
	15 Kennedy Drive, Dartmouth, Nova Scotia	120	1971	High Rise	96,814	97.5%	570
	7 and 14 Jackson Road, Dartmouth, Nova Scotia	67	1968	Low Rise	29,447	74.6%	550
	104 and 106 Albro Lake Road and 127 Slayter Street, Dartmouth, Nova Scotia	25	1960	Mid & Low Rise	16,627	100.0%	603
	29 Primrose Street, Dartmouth, Nova Scotia	22	1965	Mid Rise	12,289	63.6%	543
	44 Primrose Street, Dartmouth, Nova Scotia	19	1965	Mid Rise	12,334	89.5%	591
	28 and 30 Primrose Street, Dartmouth, Nova Scotia	16	1965	Mid Rise	12,226	93.8%	604
Total Atlantic Canada		774			546,289	93.1%	746
Total		7,518			6,205,638	95.4%	865

_______________________________
(1)	Suite 3 at 673 – 677 Richmond Street, London, Ontario will be subject to a lease with TGIM. As at July 1, 2011, suite 3 at 673 – 677 Richmond Street was vacant.
(2)	2309 – 2334 Brunswick Street and 5214 Gerrish Street, Halifax, Nova Scotia will be subject to a lease with TGIM and the occupancy level shown accounts for such lease obligation. As at July 1, 2011, the aggregate occupancy level at 2309 – 2334 Brunswick Street and 5214 Gerrish Street was 83.2%.

Financial Update

As at June 30, 2011, the REIT's overall occupancy rate was approximately 96%, consistent with its March 31, 2011 occupancy rate. In addition, the REIT expects that its FFO and AFFO for the second quarter of 2011 will be approximately $0.25 per unit and $0.20 per unit, respectively.

About TransGlobe Apartment Real Estate Investment Trust

TransGlobe Apartment Real Estate Investment Trust is an unincorporated, open-ended real estate investment trust owning a growing portfolio of high quality apartment and town house properties well-located in urban centres in Alberta, Ontario, Québec, New Brunswick and Nova Scotia.

Forward-looking Statements

Certain statements contained in this press release constitute forward-looking information within the meaning of applicable securities laws. Forward-looking information may relate to the REIT's future outlook and anticipated events or results and may include statements regarding the financial position, business strategy, budgets, litigation, projected costs, capital expenditures, financial results, taxes, plans and objectives of or involving the REIT. Particularly, statements regarding future results, performance, achievements, prospects or opportunities for the REIT or the real estate industry are forward-looking statements. In some cases, forward-looking information can be identified by such terms such as "may", "might", "will", "could", "should", "would", "occur", "expect", "plan", "anticipate", "believe", "intend", "estimate", "predict", "potential", "continue", "likely", "schedule", or the negative thereof or other similar expressions concerning matters that are not historical facts. Some of the specific forward-looking statements in this press release include, but are not limited to, statements with respect to the following: the expected completion of the Acquisition and Sale; the expected return to be realized by the REIT as a result of the Acquisition; the effect of the Acquisition on the financial performance of the REIT; the Internalization; the REIT's arrangements with TGIM; TGIM's retained interest; and the REIT's intention with respect to, and ability to execute, its internal and external growth strategies and capital investment programs.

The REIT has based these forward-looking statements on factors and assumptions about future events and financial trends that it believed at the time of making such statements may affect its financial condition, financial performance, cash flows, business strategy and financial needs, including that the Internalization would be completed on the terms and basis set out herein, the Canadian economy would remain stable, that inflation would remain relatively low, that interest rates would remain stable, that conditions within the real estate market, including competition for acquisitions, would be consistent with the then-current climate and that the Canadian capital markets would provide the REIT with access to equity at reasonable prices and/or debt at reasonable rates when required.

Although the forward-looking statements contained in this press release are based upon assumptions that management of the REIT believed were reasonable at the time of making such statements, based on information then-available to management, there can be no assurance that actual results will be consistent with these forward-looking statements. Forward-looking statements necessarily involve known and unknown risks and uncertainties, many of which are beyond the REIT's control, that may cause the REIT's or the industry's actual results, performance, achievements, prospects and opportunities in future periods to differ materially from those expressed or implied by such forward-looking statements. These risks and uncertainties include, among other things, those indentified in the REIT's materials filed with Canadian securities regulatory authorities from time to time.

The forward-looking statements made in this press release relate only to events or information as of the date hereof. Except as required by applicable Canadian law, the REIT undertakes no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise, after the date on which the statements are made or to reflect the occurrence of unanticipated events.

Non-IFRS Measures

Certain terms used in this press release such as Funds from Operations (FFO), Adjusted Funds from Operations (AFFO) and capitalization rate are not measures defined under International Financial Reporting Standards ("IFRS"), do not have standardized meanings prescribed by IFRS, and FFO and AFFO should not be construed as alternatives to profit/loss, cash flow from operating activities or other measures of financial performance calculated in accordance with IFRS. FFO, AFFO and capitalization rate as computed by the REIT are unlikely to be comparable to similar measures as reported by other trusts or companies in similar or different industries. FFO is a measure of operating performance based on the funds generated from the business of the REIT before reinvestment or provision for other capital needs. FFO is presented in this press release because management considers this non-IFRS measure to be an important measure of the REIT's operating performance. AFFO is presented in this press release because management considers this non-IFRS measure to be an important performance measure to determine the sustainability of future distributions paid to REIT unitholders after provision for maintenance capital expenditures. AFFO should not be interpreted as an indicator of cash generated from operating activities as it does not consider changes in working capital. Capitalization rate represents the ratio between NOI produced by a property or portfolio of properties and the purchase price therefor, expressed as a percentage. Capitalization rate is presented because management considers this non-GAAP measure, which is commonly used in the real estate market, to be an useful measure in valuing a property or portfolio of properties. Examples of reconciliations of FFO and AFFO to the most directly comparable measure calculated in accordance with IFRS are provided in the MD&A of the REIT for the three months ended March 31, 2011 and the period from May 14, 2010 to December 31, 2010.