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)(TSX:HR.DB)(TSX:HR.DB.B) is
pleased to announce that it has signed a definitive agreement that provides H&R
with the opportunity to redeem up to 28,571,429 warrants (the "Warrants") issued
to Fairfax Financial Holdings Limited and an affiliate (collectively,
"Fairfax"). The Warrants were issued to Fairfax on April 24, 2009, pursuant to a
warrant indenture, and have an exercise price of $7.00 per stapled unit (the
"Stapled Units") and an expiry date of April 24, 2014. Subject to regulatory
approval, which H&R expects to receive, the redemption will occur no later than
January 29, 2010 (the "Redemption Date"), at a cash redemption price of $6.50
per Warrant (representing a fixed reference price of $13.50 per Stapled Unit
less the Warrant exercise price of $7.00). The net amount payable by H&R to
Fairfax would be approximately $185.7 million assuming redemption of all of the
Warrants (the "Net Redemption Value"). The redemption of the Warrants will
simplify H&R's capital structure and is accretive to H&R's net asset value
("NAV") and AFFO on a fully diluted per unit basis.


H&R intends to fund the Net Redemption Value with funds available from
operations and other available sources of financing, which may include a portion
of the net proceeds from the Convertible Debenture offering (described below).


H&R has also entered into an agreement to sell, to a syndicate of underwriters
co-led by RBC Capital Markets and CIBC World Markets, on a bought deal basis,
$150 million principal amount of 6.00% convertible unsecured subordinated
debentures due June 30, 2017 (the "Convertible Debentures"). Closing is expected
to occur on or about December 30, 2009, subject to regulatory approval. The net
proceeds from the offering will be utilized for general trust purposes, and to
the extent necessary, fund a portion of the Net Redemption Value.


H&R's President & CEO Tom Hofstedter said, "We are very pleased to have entered
into this agreement with Fairfax, a company that we have worked with for many
years and for whom we have the highest regard. We believe that redeeming the
Warrants and the issuance of cost effective long-term financing provides
significant benefits to our unitholders. In particular, H&R is redeeming the
Warrants utilizing a reference price of $13.50, while issuing Convertible
Debentures with a conversion price of $19.00. In addition, the redemption is
accretive to internal and financial analyst NAV estimates and AFFO on a fully
diluted per unit basis."


The Convertible Debentures will bear interest at a rate of 6.00% per annum
payable semi-annually in arrears on June 30 and December 31 in each year
commencing on June 30, 2010, and will mature on June 30, 2017 (the "Maturity
Date"). The Debentures will be convertible at the holder's option into Stapled
Units at any time prior to the earlier of the Maturity Date and the date fixed
for redemption at a conversion price of $19.00 per Stapled Unit (the "Conversion
Price"). The Debentures will not be redeemable on or before June 30, 2013. On
and after June 30, 2013 and prior to June 30, 2015, 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 Stapled Units is greater than 125%
of the Conversion Price. On and after June 30, 2015 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.


The offering is being made under H&R's existing short from base shelf prospectus
dated May 11, 2009, as amended. The terms of the offering will be described in a
prospectus supplement to be filed with Canadian securities regulators by no
later than December 21, 2009.


The Fairfax agreement also provides that any Warrants remaining outstanding
after the Redemption Date will be automatically exercised on a cashless basis,
based on a redemption price of $13.50 per Stapled Unit.


Forward-looking Statements

Certain information in this news release contains forward-looking information
within the meaning of applicable securities laws (also known as forward-looking
statements) including, among others, statements relating to the objectives of
H&R REIT ("H&R"), strategies to achieve those objectives, H&R's beliefs, plans,
estimates, and intentions, and similar statements concerning anticipated future
events, results, circumstances, performance or expectations that are not
historical facts including, in particular, H&R's expectation regarding future
developments in connection with the offering of the Convertible Debentures and
the redemption of the warrants pursuant to the Fairfax Agreement..
Forward-looking statements generally can be identified by words such as
"outlook", "objective", "may", "will", "expect", "intend", "estimate",
"anticipate", "believe", "should", "plans", "project", "budget" or "continue" or
similar expressions suggesting future outcomes or events. Such forward-looking
statements reflect H&R's current beliefs and are based on information currently
available to management. 

These statements are not guarantees of future performance and are based on H&R's
estimates and assumptions that are subject to risk and uncertainties, including
those discussed in H&R's materials filed with the Canadian securities regulatory
authorities from time to time, which could cause the actual results and
performance of H&R 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 completion of the offering of the
Convertible Debentures and the redemption of the Warrants; the offering of the
Convertible Debentures not being completed such that the redemption of the
Warrants may not occur, conditions of the Fairfax Agreement not being satisfied;
prices and market value of securities of H&R; availability of cash for
distributions; development and financing relating to The Bow development;
restrictions pursuant to the terms of indebtedness; liquidity; credit risk and
tenant concentration; interest rate and other debt related risk; tax risk;
ability to access capital markets; dilution; lease rollover risk; construction
risks; currency risk; unitholder liability; co-ownership interest in properties;
mezzanine financing credit risk; competition for real property investments;
environmental matters; reliance on one corporation for management of
substantially all H&R's properties; changes in legislation and indebtedness of
H&R. 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
general economy is stable; local real estate conditions are stable; interest
rates are relatively stable; and equity and debt markets continue to provide
access to capital. H&R cautions that this list of factors is not exhaustive.
Although the forward-looking statements contained in this news release are based
upon what H&R believes are reasonable assumptions, including assumptions
regarding achievable income property acquisition opportunities available to H&R
and the terms of available financing in connection with such acquisitions, 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. These forward-looking statements
are made as of today, and H&R, 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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