NOVEMBER 1, 2006. TORONTO, ONT. –The Department of Finance proposed yesterday a new “Tax Fairness Plan” designedto tax income trusts in the same manner as corporations. Under the proposedlegislation income trusts will be taxed at corporate tax rates beforedistributions, and distributions will subsequently be treated as dividends. TheDepartment of Finance has formally acknowledged that Real Estate InvestmentTrusts (REIT) will be exempt from the Tax Fairness Plan, and will not beimpacted, due to “the unique history and role of collective real estateinvestment vehicles” provided that the REIT qualifies under the new CanadianREIT definition. In order to qualify for tax exemption under the newdefinition, a Canadian REIT must :

o   At no time in the yearhold any “non-portfolio” property other than real properties situated inCanada;

o   Have as not less than 95%of its income for the year income from properties (whether in Canada or abroad,and including dividends, interest, rents, etc. and taxable capital gains fromdispositions of real properties);

o   Have as not less than 75%of its income for the year income that is directly or indirectly attributableto rents from, mortgages on, or gains from the disposition of, real propertiessituated in Canada; and

o   Hold throughout the yearreal properties situated in Canada, cash, and debt or other obligations of Governmentsin Canada (including Crown corporations, etc.) with a total fair market valuethat is not less than 75% of its equity value.

TimbercreekREIT currently qualifies under each of these criteria. It will, therefore, notbe negatively impacted by the new proposed tax legislation. While the public’sinitial reaction may cause volatility in publicly traded Canadian REIT unitprices, there likely will be no long-term negative impact to this sector.Indeed, it is possible that REIT’s will become even more attractive asinvestments due to the unique nature of this vehicle. Timbercreek REIT willcontinue to provide a private real estate investment opportunity to investorscharacterized by a unit price that correlates directly with the appraised valueof the assets held in the portfolio, and thus maintaining steady, tax advantagedquarterly distributions in the range of 8 – 9% (annualized)..

About Timbercreek:

TimbercreekAsset Management Inc. (“TAMI”) is one of Canada’s fastest growing alternative assetclass investment managers. TAMI has a value oriented investment philosophy, andspecializes in providing conservatively managed, risk adverse private investmentopportunities to institutions, trusts and endowment funds, discretionaryinvestment advisors and qualified individuals. Timbercreek AssetManagement Inc. is the exclusive asset manager for Timbercreek Investments Inc.and Timbercreek REIT, which collectively own a portfolio of multi-familyreal estate with a total asset value of approximately $250 million.

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