Mr. Michael Forsayeth of Granite reports

GRANITE AND MAGNA AGREE TO RENEW AND EXTEND LEASES FOR 15 PROPERTIES INCLUDING SEVEN SPECIAL PURPOSE PROPERTIES

Granite Real Estate Investment Trust has entered into binding agreements with Magna International Inc. and certain of its Cosma International Group subsidiaries to extend or renew early and extend the leases for 15 properties, including seven special purpose properties that in total represent approximately 7.5 million square feet or 25 per cent of Granite's total income-producing property portfolio as at June 30, 2016.

Granite's stated top strategic priority has been to solidify and extend the cash flow from five special purpose properties with leases expiring before the end of 2018. This key priority has now been achieved and in each case the lease term has been extended beyond the original contractual lease renewal term. In addition, Granite has successfully collaborated with Magna to extend or renew early and extend the leases of another 10 properties, including two additional special purpose properties, and agreed to invest capital to support Magna's overall growth and expansion plans within certain facilities under lease from Granite.

As a result of these agreements, Granite has locked in annual rental revenue in excess of $68-million, 75 per cent of which is for 15 years or longer. Granite's weighted average lease term for the special purpose portion of its portfolio will increase to 11.4 years from 5.9 years as at the beginning of 2016 and the weighted average lease term for Granite's entire income-producing property portfolio will increase to 7.4 years from 4.7 years at the beginning of the year.

Additional highlights of the agreements are set out below:

Karmax (Milton, Ont.) and Formet (St. Thomas, Ont.), two special purpose properties that were previously renewed to Dec. 31, 2029, will be further extended by an additional three years to Dec. 31, 2032.

Presstran (St. Thomas, Ont.), a special purpose property, will be renewed early and extended for a period of approximately 15 years from its lease expiry date of Jan. 13, 2018, to be co-terminus with Formet. Notice for renewal of this lease was originally due by April 13, 2017, and contemplated a five-year renewal term.

Albersdorf (Austria), a special purpose property, will be renewed early and extended for 10 years from its initial term expiring July 31, 2018. Notice for renewal was originally due by Oct. 31, 2017, and contemplated a five-year renewal term.

Modatek (Milton, Ont.), a special purpose property, will be the subject of a new lease for 15 years, 11 months, commencing Feb. 1, 2017. The annual rent will be approximately $6.5-million. In addition, subject to certain conditions, Granite will have the option to repatriate 20 acres of excess land that is part of the leased property.

Karmax Warehouse (Milton, Ont.), will be renewed early and extended for 14 years and four months from its lease expiry date of Aug. 31, 2018. The annual rent at renewal will be the existing rent at expiry. Notice for renewal of this lease was originally due by Nov. 30, 2017, and contemplated a 12-year renewal term.

Granite will invest in and purchase certain building expansions at two U.S. special purpose properties, Bowling Green, Ky., and Drive, S.C., for a total purchase price of approximately $54-million (U.S.). These expansions, representing approximately 525,000 square feet of leaseable area, were recently completed and financed by Magna. In addition to the incremental annual rental revenue of approximately $4.4-million (U.S.), the lease terms for each of these properties will be renewed early and extended to Jan. 31, 2032.

Three Canadian properties in the Greater Toronto Area, including Magna's head office, 2550 Steeles Ave. E., and 50 Casmir Court, that were previously expected to be vacated by Magna, were renegotiated and Magna will continue to occupy these premises. The combined annual rents for these three properties will be approximately $6.5-million. The annual rental rate for both Magna's head office and the 50 Casmir Court properties will commence Jan. 1, 2017. The leases for these two properties will expire Dec. 31, 2022. The 2550 Steeles Ave. E. facility will be renewed for 10 years commencing Jan. 1, 2018.

Four United States properties, representing approximately 700,000 square feet, two of which expire July 31, 2017, and two of which expire July 31, 2019, will be extended to Dec. 31, 2022, and July 31, 2026, respectively. Commencing Nov. 1, 2016, the combined annual rents for these four properties will be $1.7-million (U.S.).

Granite's strategy is to build a high-quality industrial real estate business. With these long-term rental streams in place, Granite will continue to focus on its key priority of deploying its capital as sourced from its operations, debt and divestments, to acquisitions, and development. Management also continues to be focused on all the components of its overhead and cost structure to ensure that Granite's operations are run in a cost-effective and efficient manner.

About Granite

Granite is a Canadian-based REIT engaged in the ownership and management of predominantly industrial, warehouse, and logistics properties in North America and Europe. Granite owns 30 million square feet in 94 rental income properties. Its tenant base includes Magna International.

We seek Safe Harbor.