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Investor Presentation

Investor Presentation. Q1 2006. 32.7. $289. $1.91. $1.33. 1.3. $11. Jan 1, 96. Dec 05. 96. 05. 96. 05. Ten Years of Growth. Portfolio (sq. ft. millions). Revenue ($ millions). FFO per Unit. 10 Years of Growth. Ten-Year Average Annual Return 1996 - 2005. 05. 19.2%. 19.2%.

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Investor Presentation

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  1. Investor Presentation Q1 2006

  2. 32.7 $289 $1.91 $1.33 1.3 $11 Jan 1, 96 Dec 05 96 05 96 05 Ten Years of Growth Portfolio (sq. ft. millions) Revenue ($ millions) FFO per Unit

  3. 10 Years of Growth Ten-Year Average Annual Return 1996 - 2005 05 19.2% 19.2% 96

  4. Profile Summit generated record results in 2005…

  5. 31% 84% 31% A Successful Transition (% of annualized net operating income) Dec. 31, 2000 March 31, 2006 Light Industrial Light Industrial • Approximately 33 million square feet • Real estate assets of approximately $2.0 billion

  6. #1 industrial landlord in Canada Canada’s Largest Industrial Landlord

  7. #1 #2 Top 5 Major Presence in Key Markets Edmonton Calgary Winnipeg Montreal Ottawa Halifax Kitchener/Waterloo Toronto Cambridge

  8. Geographic Diversification Breakdown of annualized net operating income (March 31, 2006) 1% 25% 3% 8% 14% 48% BC NovaScotia Alberta Sask./Man. Quebec Ontario >1% U.S.

  9. Strong Market Presence  Benefits ü Higher tenant retention and occupancy ü Synergies and economies of scale ü Strong acquisition pipeline ü Geographic and tenant diversity for investors

  10. Consistent High Occupancy 97% = economic full occupancy

  11. Approximately 3,000 Tenants –A Broad and Diverse Revenue Base At December 31, 2005 No single industrial tenant >2% of base rent

  12. Generates value for investors Solid track record of success Industry leader with “best-in-class” service In-house expertise Full Service Real Estate Platform

  13. Financial Review Summit generated record results in 2005…

  14. Operating revenues Net operating income (“NOI”) Same property NOI Same property NOI – Cdn. industrial portfolio Funds from operations Funds from operations per Unit 2005 Performance Highlights Year ended, December 31, 2005* 10.7% 10.9% 1.5% 1.3% 15.1% 3.8% *Compared to the year ended December 31, 2004

  15. Increased Cash Distributions, Improved Payout Ratio FFO Payout Ratio Cash Distributions High after tax return: 85% tax deferred

  16. Invested $196M in targeted growth regions New space, third-party developers Internal developments and expansions 2005 Highlights 1.9 1.9 million sq. ft. purchased 1.8 1.8 million sq. ft. under constructionor pre-leasing 0.5 0.5 million sq. ft.

  17. Increased focus on light industrial target sector– disposed of 7 non-core properties Issued 4.7 million Units Issued senior unsecured debentures 2005 Highlights 92% 92% GLA $108M $108M raised $100M $100M raised

  18. Leverage reduced Capacity to acquire new properties 2005 return for Unitholders 2005 Highlights 51% 51% $500M $500M 45% 45% – highest of allCanadian REITs

  19. Q1 2006 Q1 2005 Operating revenues $73.6M $73.2M Net operating income $46.8M $46.6M Same property NOI Same property NOI – Cdn. industrial portfolio +2.2% Funds from operations $31.3M $30.1M Occupancy 95.6% 95.2% Progress Continued in Q1, 2006 +2.4% 1.6% 1.5%

  20. Debt % of gross book value As of March 31, 2006 Interest rate (%) – weighted average Term to maturity – weighted average (yrs) Interest coverage Solid Financial Position 50% 6.03% 4.6 3.0x

  21. Continuing strength of light industrial sector…

  22. 1-2 story buildings 1-2 story buildings Aroundmajor cities Aroundmajor cities Warehousing, storage, light assembly, logistics Warehousing, storage, light assembly, logistics No heavy industry No heavy industry

  23. Factors Driving Strong Industrial Performance Key factor Performance Broad customer base Stable cash flow Type of activities Low maintenance and capex Positively affected by high Canadian dollar Domestic business focus Steady economic growth High occupancy

  24. Vacancies Down, Rents Increasing National Industrial Asking Net Rent(1) National Industrial Vacancy Rate(1) Note 1: All Canadian metro markets Source: Cushman & Wakefield LePage

  25. We grew during a time of change

  26. While the Acquisition Market has Heated Up… • Canadian demand for properties remains strong • Foreign investors showing greater interest • Property values still have room to grow

  27. … Our Growth will Continue A three-point growth plan – not just acquisitions 1. Acquisitions 2. Expansions 3. Developments + +

  28. Strategy at Work:Impressive Results from Mezzanine Financing Program $81M $81M • Invested $43M in mezz financings – $7M in interest and fee income– 5 properties acquired – 1.3M sq ft 23.8% 23.8% • Increase in combined value since acquisitions $150M $150M • Q1, 2006 properties in development – 8 properties– Will add 2.0M sq ft

  29. Looking ahead…

  30. 1. Acquisitions 2. Expansions 3. Developments + + Continue to Execute Successful Strategies Profitable Growth

  31. 2006 2007 2008 2009 2010 Solid Organic Growth Lease expiries (March 31, 2006) • Well staggered lease maturity schedule • Historical tenant retention ratio at lease maturity in excess of 70% Industrial Portfolio GLA (million sq ft) 3.24 4.49 3.41 2.80 4.33 In Place Rent $5.81 $5.24 $5.82 $5.69 $5.70 % of Industrial 11.1% 15.4% 11.7% 9.6% 14.9% Total Portfolio GLA (million sq ft) 3.37 5.04 3.63 3.01 4.49 In Place Rent $6.11 $6.07 $6.31 $6.36 $5.95 % of Total Portfolio 10.7% 16.0% 11.5% 9.7% 14.3% Market rents at or above face rents in leases expiring over the next 5 years

  32. Strategy 1. Acquisitions 2. Expansions 3. Developments + + Strategy Builds Critical Mass, Drives Cash Flow • Grow tenantbase • Increases critical mass • Operating synergies • Expanded features • Cash flow

  33. Our Goal is to Double The Business Market Share(1) Long term goal Today 7-10% 3% 50-70 million sq. ft. 33 million sq. ft. Investing $200M in 2006 Note 1: Total leaseable industrial real estate in Canada

  34. 1 Track Record – 10 years Light Industrial – most profitable and stable Resources to Grow – financial, management 4 2 Diverse Portfolio – geographic, tenants 3 Four Attributes Set Summit Apart

  35. Investor Presentation Q1 2006

  36. Cautionary Statement This presentation may contain forward-looking statements with respect to Summit REIT and its operations, strategy, financial performance and condition. These statements generally can be identified by use of forward-looking words such as “may”, “will”, “expect”, “estimate”, “anticipate”, “intends”, “believe” or “continue” or the negative thereof or similar variations. Summit’s actual results and performance discussed herein could differ materially from those expressed or implied by such statements. Such statements are qualified in their entirety by the inherent risks and uncertainties surrounding future expectations. Important factors that could cause actual results to differ materially from expectations include, among other things, general economic and market factors, competition, changes in government regulation and the factors described under “Risk Factors” in Summit REIT’s annual information form and other securities regulatory filings. The cautionary statements qualify all forward-looking statements attributable to Summit REIT and persons acting on its behalf. Unless otherwise stated, all forward-looking statements speak only as of the date to which this presentation refers, and the parties have no obligation to update such statements. Funds from operations is not a measure recognized under Canadian generally accepted accounting principles ("GAAP") and does not have a standardized meaning prescribed by GAAP.  Funds from operations is presented in this presentation because management believes that this non-GAAP measure is a relevant measure of its ability to earn and distribute cash returns to Unitholders.  Funds from operations computed by Summit REIT may differ from similar computations as reported by other similar organizations and, accordingly, may not be comparable to funds from operations reported by such organizations.  Funds from operations is calculated by reference to net income on a consolidated basis, as determined in accordance with GAAP.

  37. Appendix

  38. 54.4% 54.1% 53.4% 52.1% 51.3% 50.5% 5.0%* 4.7%* 5.7%** 10.2%** 43.7% Secured debt 35.6% Secured debt Consistent Moderate Leverage • Throughout an extended period of significant growth, Summit has adhered to a conservative debt policy Leverage @ Gross Book Value Note: Includes Convertible Debentures that have been classified as debt on the balance sheet * Convertible Debentures ** Unsecured Debentures

  39. Leverage at Market Value Summit’s strong ability to create value has resulted in a leverage ratio that, on a Market Value basis, is even more conservative Leverage – Book vs. Market (Dec. 31, 2005) 45.8% Excluding $98MM of Convertible Debentures 34.4% Excluding $98MM of Convertible Debentures Note: Market value based on unit price of $24.57 at December 31, 2005

  40. Favourable Debt Repayment Schedule (December 31, 2005) Convertible Debentures Wtd Avg Interest Rate Mortgages Unsecured Debentures ($mm) 16.2% 14.9% 10.7% 9.8% 11.3% 16.0% 11.6% 11.4% 9.7% 16.3% 7.6% 7.4% 11.5% 7.8% 11.6% 7.5% 6.4% 4.0% 4.1% 3.6% 0.2% 1.0% thereafter • Weighted average term to maturity of 4.6 years • Weighted average interest rate of 6.03% 16.5% 15.2% 9.5% 0.0%

  41. Strong Interest Coverage Interest Coverage

  42. Coverage Stability (at December 31, 2005) • At the current 2.90x coverage and the 1.65x maintenance covenant, EBITDA would have to decline by a sizable 42% before the threshold would be reached • Staggered lease maturity profile, record of strong EBITDA growth, the stability of industrial properties and high tenant demand make any significant drop in EBITDA unlikely • Further comfort is provided by the fact that at the current WAIR of 6.05% and an average term to maturity of 4.8 years, Summit’s debt is approx. 80 bps over market. • STA-3 (mid) stability rating by DBRS

  43. Strong Equity Base • Adjusted book equity of $962 million at December 31, 2005 • Market capitalization of $1.65 billion based on Unit price of $24.57 at December 31, 2005 Adjusted Unitholders’ Equity

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