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GRANITE REIT 77 King St. W. , Suite 4010 P.O. Box 159 Toronto , Ontario Canada M5K 1H1 GRANITE ANNOUNCES 2021 FIRST QUARTER RESULTS May 5 , 2021 , Toronto , Ontario , Canada Granite Real Estate Investment Trust and Granite REIT Inc. ( TSX : GRT.UN ; NYSE : GRP.U ) ( " Granite " or the " Trust " ) announced today its combined results for the three month period ended March 31 , 2021 . FIRST QUARTER 2021 HIGHLIGHTS Highlights for the three month period ended March 31 , 2021 , are set out below : Financial : • Granite's net operating income ( " NOI " ) was $ 81.5 million in the first quarter of 2021 compared to $ 67.9 million in the prior year period , an increase of $ 13.6 million primarily as a result of acquisition activity beginning in the first quarter of 2020 ; • Same property NOI - cash basis ( 4 ) increased by 2.6 % for the three month period ended March 31 , 2021 , excluding the impact of foreign exchange ; • Funds from operations ( " FFO " ) ( ¹ ) was $ 57.1 million ( $ 0.93 per unit ) in the first quarter of 2021 compared to $ 56.8 million ( $ 1.05 per unit ) in the first quarter of 2020. Included in FFO this quarter are $ 4.0 million of early redemption premium related to the 2021 Debentures and $ 0.5 million of accelerated amortization of original financing costs related to the refinancing of Granite's credit facility . Excluding these refinancing costs , FFO per unit for the first quarter would have been $ 1.00 per unit ; • Adjusted funds from operations ( " AFFO " ) ( ² ) was $ 54.7 million ( $ 0.89 per unit ) in the first quarter of 2021 compared to $ 55.6 million ( $ 1.03 per unit ) in the first quarter of 2020 . Excluding the above - mentioned financing costs , AFFO per unit for the first quarter would have been $ 0.96 per unit ; • AFFO payout ratio ( ³ ) was 78 % for the first quarter of 2021 compared to 70 % in the first quarter of 2020 ; • Granite recognized $ 209.5 million in net fair value gains on investment properties in the first quarter of 2021 driven by lower capitalization rates and terminal capitalization rates and / or higher market rents observed across Granite's portfolio , but largely attributable to the Greater Toronto Area and U.S.A. The fair value gains on investment properties were partially offset by unrealized foreign exchange losses of $ 140.4 million resulting from the relative strengthening of the Canadian dollar against the US dollar and Euro ; and • Granite's net income attributable to stapled unitholders increased to $ 230.1 million in the first quarter of 2021 from $ 81.3 million in the prior year period primarily due to a $ 173.5 million increase in net fair value gains on investment properties and a $ 13.6 million increase in net operating income as noted above , partially offset by a $ 26.3 million increase in income tax expense and a $ 8.2 million increase in interest expense and other financing costs . Operations : • On January 28 , 2021 , Granite disposed of one property located in Redditch , United Kingdom for gross proceeds of $ 10.6 million ( £ 6.0 million ) ; and 1