Dundee REIT Posts 18% Increase in Q1 Adjusted Funds From Operations Per Unit

TORONTO, ONTARIO, May 11 (MARKET WIRE) --
This news release contains forward looking information that is based upon
assumptions and is subject to risks and uncertainties as indicated in the
cautionary note contained within this press release.

DUNDEE REIT (TSX: D.UN) today posted strong financial results for the
quarter ended March 31, 2009. Dundee REIT's management team will discuss
the Trust's financial results at its annual and special meeting, being
held today at 4:00 p.m. (EST) at the Toronto Board of Trade, East
Ballroom, First Canadian Place, Suite 350, 100 King Street West in
Toronto.

WEBCAST

The meeting will also be webcast. To access the simultaneous webcast,
please visit our website at www.dundeereit.com and click on the link for
News & Events, then click on Calendar of Events. The webcast will be
archived within two hours after the end of the meeting and will be
available for 90 days.

FINANCIAL HIGHLIGHTS

- Q1 rental property revenues up 13% over Q1 2008 to $50.0 million

- Q1 net operating income ("NOI") up 13% to $30.5 million; comparative
properties NOI up 9% to $25.0 million

- Q1 funds from operations ("FFO") per unit up 9% to $0.81

- Q1 adjusted funds from operations ("AFFO") per unit up 18% to $0.59

- Occupancy remains high at 96.5%

- Strong interest coverage ratio of 2.36 times

- Strong balance sheet with $124 million of cash and available borrowing
lines at quarter end

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SELECTED FINANCIAL INFORMATION
(unaudited) ($000's except Three Months Three Months Three Months
unit and per unit amounts) Ended Ended Ended
March 31, 2009 Dec. 31, 2008 March 31, 2008
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Rental property revenues $ 49,976 $ 50,419 $ 44,044
Net operating income
("NOI")(1) 30,533 30,756 26,981
Funds from operations
("FFO")(2) 16,924 16,985 15,697
Adjusted funds from
operations ("AFFO")(3) 12,290 11,745 10,635
Book value of rental
properties 1,133,681 1,139,071 1,085,192
Debt 869,077 872,314 794,446

Per unit data (basic)
FFO 0.81 0.82 0.74
AFFO 0.59 0.57 0.50
Distributions 0.55 0.55 0.55

Units (period end)
REIT Units, Series A 17,248,270 16,947,240 17,143,922
REIT Units, Series B 16,316 16,316 476,316
LP Class B Units, Series 1 3,454,188 3,454,188 3,354,851
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Total number of units 20,718,774 20,417,744 20,975,089
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Occupied and committed space 96.5% 96.7% 95.0%
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"Overall, our business is in excellent shape. We continue to maintain
significant liquidity and our financial results this quarter are among
our best ever," said Michael Cooper, Vice Chairman and Chief Executive
Officer.

FINANCIAL HIGHLIGHTS

- Rental properties NOI up 13% to $30.5 million - rental properties NOI
increased by 13% over the prior year first quarter. Significant growth in
our comparative portfolio and properties acquired in 2008 were the
primary drivers behind this growth.

- Comparative properties NOI up 9% to $25.0 million - comparative NOI
increased by 9% over the prior year first quarter, mainly reflecting
higher in-place occupancy, increases in rental rates on renewals and
contractual rent increases.

- Funds from operations per unit grew by 9% to $0.81 - on a per unit
basis, FFO increased by 9% to $0.81 compared to the same period in 2008,
primarily due to rising rental rates and high occupancy.

- Adjusted funds from operations per unit increased by 18% to $0.59 - for
the quarter, AFFO per unit increased significantly to $0.59 from $0.50,
primarily due to strong performance from our portfolio as well as our
property management function.

OPERATIONAL HIGHLIGHTS

- Portfolio occupancy remains strong at 96.5% - the overall percentage of
occupied and committed space remains strong at 96.5%. Our average
in-place net rent increased by 10% to $15.55 per square foot compared to
the same quarter last year and by 1.6% compared to the fourth quarter of
2008. "We are pleased with the progress we have made so far this year
with respect to new leasing and renewals. While market rents have
declined overall, we continue to lease space at rates higher than our
expiring rates" said Michael Knowlton, President and Chief Operating
Officer.

Average In-place
Occupancy Net Rent (per sq. ft.)
------------------------------- ------------------------------
March 31, Dec. 31, March 31, March 31, Dec. 31, March 31,
2009 2008 2008 2009 2008 2008
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Office 96.4% 96.6% 96.0% $18.19 $ 17.94 $ 16.82
Industrial 96.9% 97.0% 92.3% 7.49 7.35 6.86
Total 96.5% 96.7% 95.0% 15.55 15.30 14.12
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CAPITAL INITIATIVES

Debt - The Trust's average interest rate continues to be low at 5.81%, a
further decrease compared to 5.83% at December 31, 2008 (March 31, 2008 -
5.93%). The year-to-date interest coverage ratio remains strong at 2.4
times (December 31, 2008 - 2.3 times; March 31, 2008 - 2.4 times).

Information appearing in this news release is a select summary of
results. The financial statements and management's discussion and
analysis for the Trust, as well as its Supplementary Information Package
are available at www.dundeereit.com and on www.sedar.com.

Dundee REIT is an unincorporated, open-ended real estate investment trust
and provides high quality, affordable business premises. It is focused on
owning, acquiring, leasing and managing mid-sized urban and suburban
office and industrial properties in Canada. Dundee REIT's portfolio
currently consists of approximately 7.0 million square feet of gross
leasable area, located primarily in Western Canada. Dundee REIT's
portfolio is well diversified by geographic location and tenant mix. For
more information, please visit www.dundeereit.com.

FOOTNOTES

(1) NOI - rental property operating revenue less rental property
operating expenses excluding redevelopment properties and discontinued
operations.

(2) FFO - net income, adjusted for future income tax, depreciation and
amortization, gain (loss) on sale, internalization of property manager,
non-controlling interest and other amortization from continuing and
discontinued operations.

(3) AFFO - distributable income (as defined in Dundee REIT's Declaration
of Trust) adjusted for the Trust's estimates of normalized leasing costs
and normalized non-recoverable recurring capital expenditures.

NOI, FFO and AFFO are key measures of performance used by real estate
operating companies; however, they are not defined by generally accepted
accounting principles (GAAP), do not have standard meanings and may not
be comparable with other industries or income trusts.

This press release may contain forward-looking information within the
meaning of applicable securities legislation. Forward looking information
is based on a number of assumptions and is subject to a number of risks
and uncertainties, many of which are beyond Dundee REIT's control, that
could cause actual results to differ materially from those that are
disclosed in or implied by such forward-looking information. These risks
and uncertainties include, but are not limited to, general and local
economic and business conditions; the financial condition of tenants; our
ability to refinance maturing debt; leasing risks, including those
associated with the ability to lease vacant space; and interest and
currency rate functions. Our objectives and forward-looking statements
are based on certain assumptions, including that the general economy
remains stable, interest rates remain stable, conditions within the real
estate market remain consistent, competition for acquisitions remains
consistent with the current climate and that the capital markets continue
to provide ready access to equity and/or debt. All forward-looking
information in this press release speaks as of the date of this press
release. Dundee REIT does not undertake to update any such
forward-looking information whether as a result of new information,
future events or otherwise. Additional information about these
assumptions and risks and uncertainties is contained in Dundee REIT's
filings with securities regulators, including its latest annual
information form and MD&A. These filings are also available at Dundee
REIT's website at www.dundeereit.com.

Contacts:
Dundee REIT
Michael J. Cooper
Vice Chairman and Chief Executive Officer
(416) 365-5145
mcooper@dundeereit.com

Dundee REIT
J. Michael Knowlton
President and Chief Operating Officer
(416) 365-2325
mknowlton@dundeereit.com

Dundee REIT
Mario Barrafato
Senior Vice-President and Chief Financial Officer
(416) 365-4132
mbarrafato@dundeereit.com
www.dundeereit.com

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