Mr. Huw Thomas reports

CALLOWAY REIT IMPACT OF FUTURE SHOP STORE CLOSURES

Calloway Real Estate Investment Trust has provided an update with respect to a recent tenant announcement on store closures.

Given the recent tenant announcement by Best Buy/Future Shop on its store program in Canada, Calloway wishes to provide information on the expected impact on its portfolio.

Future Shop currently leases 19 stores across Canada on various Calloway sites. As announced by Best Buy on March 28, it expects to close a total of 66 Future Shop stores, of which eight were identified as being within a Calloway shopping centre. In anticipation of this, Calloway is already in negotiation with tenants for three of these spaces. The following comments are relevant to an understanding of the potential financial impact on Calloway of the closure of the remaining five sites.

• Best Buy has confirmed to Calloway that Future Shop will honour all rental payments for the full term of all leases for stores that are being closed;
• The five stores that are closing represent 0.4 per cent of Calloway's rent and gross leasable area, and the lease expiries are spread over the next five years;
• Calloway intends to work closely with its partner, Best Buy, during this process to assist it in repositioning its store offering to maximize value.

"We are always sorry to lose a tenant in any of our locations," said Huw Thomas, president and chief executive officer of Calloway. "But the evolution of retail concepts is an inevitable part of the broad retail landscape. We are very confident in the quality of our portfolio of principally Walmart-anchored shopping centres, and already this morning we have received calls from national retailers interested in taking over a number of the remaining Future Shop spaces, reflecting the quality of the spaces and of our centres," added Mr. Thomas.