Scott's Real Estate Investment Trust
TSX : SRQ.UN

August 29, 2011 15:17 ET

Scott's Real Estate Investment Trust Announces $12 Million Financing

TORONTO, ONTARIO--(Marketwire - Aug. 29, 2011) -

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN OR INTO THE UNITED STATES

Scott's Real Estate Investment Trust (TSX:SRQ.UN) ("Scott's REIT") today announced that it has entered into an agreement to sell, on a bought deal basis, $12.0 million aggregate principal amount of convertible unsecured subordinated debentures due December 31, 2016 (the "Debentures"). The offering is being underwritten by a syndicate of underwriters led by National Bank Financial Inc. and including Canaccord Genuity Corp., GMP Securities L.P., and HSBC Securities (Canada) Inc.

The Debentures will bear interest at a rate of 8.00 percent per annum payable semi-annually in arrears on December 31 and June 30, with the initial interest payment on December 31, 2011. Scott's REIT shall have the option to pay such interest either in cash or units of Scott's REIT ("Units"), subject to regulatory approval.

The Debentures will be convertible at any time prior to the earlier of December 31, 2016 and the business day immediately preceding the date fixed for redemption at a conversion price of $9.00 per Unit (the "Conversion Price"), being a ratio of approximately 111.1111 Units per $1,000 principal amount of Debentures. The Debentures will not be redeemable prior to December 31, 2014. On and after December 31, 2014 and prior to December 31, 2015, the Debentures may be redeemed in whole or in part from time to time at the option of Scott's REIT provided that the volume weighted average trading price for the Units is not less than 125 per cent of the Conversion Price. On and after December 31, 2015 and prior to the Maturity Date, the Debentures may be redeemed in whole or in part from time to time at the option of Scott's REIT at a price equal to their principal amount plus accrued interest. Subject to regulatory approval, Scott's REIT 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 per cent of the volume weighted average trading price for the Units, plus accrued interest in cash.

Scott's REIT has also granted the underwriters an over-allotment option to purchase up to an additional $1.8 million of Debentures. The over-allotment option may be exercised until 30 days following the closing of the offering.

The net proceeds from the offering of Debentures (after deducting the Underwriters' fee and offering expenses) will be used to fund future property acquisitions and for general corporate purposes.

This press release shall not constitute an offer to sell, or the solicitation of an offer to buy, any securities in any jurisdiction in which such offer, solicitation or sale would be unlawful and is not an offering of securities for sale in the United States. The securities being offered have not been and will not be registered under the U.S. Securities Act of 1933 as amended and may not be offered or sold in the United States absent registration or pursuant to applicable exemption from registration. The offering is subject to normal regulatory approvals including approval of the Toronto Stock Exchange and is expected to close on or about September 20, 2011.

About Scott's Real Estate Investment Trust

Scott's REIT (TSX:SRQ.UN) is Canada's premier small-box retail property owner with 220 properties in seven provinces across Canada. Scott's REIT's properties are well located and geographically diverse across Canada with the majority of all properties containing long-term quadruple net leases. The REIT has an approximately 75.6 per cent interest in Scott's Real Estate LP. To find out more about Scott's Real Estate Investment Trust (TSX:SRQ.UN), visit our website at http://www.scottsreit.com.

Forward-looking Statements

This document contains certain information that may constitute forward-looking information within the meaning of securities laws. In some cases, forward-looking information can be identified by the use of terms such as "may", "will", "should", "expect", "plan", "anticipate", "believe", "intend", "estimate", "predict", "potential", "continue" or other similar expressions concerning matters that are not historical facts. Forward-looking information may relate to management's future outlook and anticipated events or results, and may include statements or information regarding future growth opportunities and potential and expected cash distributions or cash distribution levels. In particular, information regarding the REIT's monthly cash distributions and information relating to the impact of the REIT's recent acquisitions on annual revenues and interest expense is forward-looking information. Forward-looking information is based on certain factors and assumptions regarding, among other things, occupancy rates, property expense and capital expenditures. While the REIT considers these assumptions to be reasonable based on information currently available to it, they may prove to be incorrect. Forward looking-information is subject to certain factors, including risks and uncertainties, which could cause actual results to differ materially from what is currently expected. Such factors include risks relating to the REIT's reliance on Priszm, the REIT's largest tenant, risks associated with investment in real property, competition, reliance on key personnel, financing and refinancing risks, environmental matters, tenant risks, risks related to current economic conditions and other risk factors more particularly described in the REIT's Annual Information Form for the year ended December 31, 2010. You should not place undue importance on forward-looking information and should not rely upon this information as of any other date. Other than as required by applicable Canadian securities law, the REIT does not undertake to update this information at any particular time. Additional information identifying risks and uncertainties is contained in the REIT's filings with the Canadian securities regulators, available at www.sedar.com.

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