HR.UN H and R Real Estate Investment Trust

NOT FOR DISTRIBUTION TO U.S. NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE
UNITED STATES. ANY FAILURE TO COMPLY WITH THIS RESTRICTION MAY CONSTITUTE A
VIOLATION OF U.S. SECURITIES LAW.


H&R Real Estate Investment Trust ("H&R") (TSX:HR.UN) has announced that it has
entered into an agreement to sell, to a syndicate of underwriters led by CIBC
World Markets Inc. and RBC Capital Markets, on a bought deal basis, a
combination of $100 million principal amount 6.65% convertible unsecured
subordinated debentures ("Debentures") and 7,595,000 trust units ("Trust Units")
at a price of $19.75 per unit to raise, in aggregate, gross proceeds of
approximately $250 million. H&R has granted the underwriters an over-allotment
option, exercisable in whole or in part up to 30 days after closing, to purchase
an additional $15 million of Debentures and an additional 15% of Trust Units at
the same offering prices. Should the over-allotment option be fully exercised,
the total gross proceeds of the financing will be approximately $287.5 million.
Closing is expected to occur on or about June 6, 2008, subject to regulatory
approval.


The net proceeds of the offering will be used to fund future developments
including The Bow development in Calgary, Alberta and Phase III expansion of
Bell Canada's office complex in Mississauga, Ontario and in the interim reduce
bank indebtedness.


The Debentures bear interest at a rate of 6.65% per annum payable semi-annually
in arrears on June 30 and December 31 in each year commencing on December 31,
2008, and will mature on June 30, 2013 (the "Maturity Date"). The Debentures
will be convertible at the holder's option into units of H&R (the "Units") at
any time prior to the earlier of the Maturity Date and the date fixed for
redemption at a conversion price of $23.11 per Unit (the "Conversion Price").
The Debentures will not be redeemable on or before June 30, 2011. After June 30,
2011 and prior to June 30, 2012, the Debentures may be redeemed in whole or in
part from time to time at H&R's option provided that the volume weighted average
trading price for the Units is not less than 125% of the Conversion Price. On
and after June 30, 2012 and prior to the Maturity Date, the Debentures may be
redeemed in whole or in part from time to time at H&R's option at a price equal
to their principal amount plus accrued interest. Subject to regulatory approval,
H&R may satisfy its obligation to repay the principal amount of the Debentures
on redemption or at maturity, in whole or in part, by delivering that number of
Units equal to the amount due divided by 95% of the market price for the units
at that time, plus accrued interest in cash.


The first distribution for which purchasers of the Trust Units offered hereunder
will be entitled to receive is the distribution expected to be paid June 30,
2008 to holders of record on June 19, 2008.


About H&R

H&R REIT is a TSX-listed, open-ended real estate investment trust, which owns a
North American portfolio of 35 office, 124 industrial and 141 retail properties
comprising approximately 44.2 million square feet, with a net book value of $4.7
billion. The foundation of the REIT's success is a disciplined strategy that
leads to consistent and profitable growth.


Additional information regarding H&R REIT is available at www.hr-reit.com.

The securities being offered have not been, nor will be, registered under the
United States Securities Act of 1933, as amended, and may not be offered or sold
in the United States absent registration or applicable exemption from the
registration requirement of such Act. This release does not constitute an offer
for sale of securities in the U.S. and any public offering of securities in the
U.S. will be made by means of a prospectus.


Certain information in this news release may contain forward-looking statements
within the meaning of applicable securities laws including, among others,
statements relating to the REIT's objectives, strategies to achieve those
objectives, the REIT's beliefs, plans, estimates and intentions, and similar
statements concerning anticipated future events, results, circumstances,
performance or expectations that are not historical facts. Forward-looking
statements generally can be identified by words such as "outlook", "objective",
"may", "will", "expect", "intend", "estimate", "anticipate", "believe",
"should", "plans" or "continue" or similar expressions suggesting future
outcomes or events. Such forward-looking statements reflect the REIT's current
beliefs and are based on information currently available to management.
Forward-looking statements are provided for the purpose of presenting
information about management's current expectations and plans relating to the
future and readers are cautioned that such statements may not be appropriate for
other purposes. 

These statements are not guarantees of future performance and are based on the
REIT's estimates and assumptions that are subject to risks and uncertainties,
including those described under "Risk Factors" in the REIT's annual information
form and those discussed in the REIT's materials filed with the Canadian
securities regulatory authorities from time to time, which could cause the
actual results and performance of the REIT to differ materially from the
forward-looking statements contained in this news release. Those risks and
uncertainties include, among other things, risks related to: the tax position
and consequence unique to each unitholder; the failure to obtain all approvals
required to implement the Reorganization; Unit prices; availability of cash for
distributions; development and financing relating to the Bow Development; credit
risk and tenant concentration; interest rate and other debt related risks; tax
risk; ability to access capital markets; dilution; lease rollover risk;
construction risks; real property ownership; currency risk; government
regulation; investment eligibility; unitholder liability; co-ownership interest
in properties; dependence on key personnel; mezzanine financing credit risk;
competition for real property investments; influence of H&R Property Management
Ltd. over the REIT; potential conflicts of interest; redemption right; and
statutory remedies. Material factors or assumptions that were applied in drawing
a conclusion or making an estimate set out in the forward looking statements
include that the information utilized by the REIT to determine the tax
consequences of the Reorganization to the REIT and its unitholders is accurate
and remains unchanged, the general economy remains stable; interest rates are
relatively stable; and equity and debt markets continue to provide access to
capital. The REIT cautions that this list of factors is not exhaustive. Although
the forward looking statements contained in this news release are based upon
what the REIT believes are reasonable assumptions, there can be no assurance
that actual results will be consistent with these forward looking statements.
All forward looking statements in this news release are qualified by these
cautionary statements. The forward looking statements are made only as of the
date that such statements are made and the REIT, except as required by
applicable law, assumes no obligation to update or revise them to reflect new
information or the occurrence of future events or circumstances.

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