Revenue from income properties rose 7.8% to $74.2 million for the three months ended June 30, 2006 compared to $68.9 million in the same period last year. For the first six months of 2006, revenue increased 4.0% to $147.8 million compared to $142.1 million in the prior year. The increases are due primarily to acquisitions and increased average rents in the current year. Included in second quarter revenue was lease termination income of $1.0 million compared to $0.1 million in the same period last year. For the six months ended June 30, 2006, lease termination income was $1.1 million compared to $1.3 million last year.

For the three months ended June 30, 2006, revenue from mortgages receivable was $0.9 million compared to $1.0 million last year. For the first six months of 2006, revenue from mortgages receivable was $1.9 million compared to $1.7 million last year. As at June 30, 2006, Summit had committed approximately $33.4 million in mezzanine financing and advanced approximately $27.9 million. These mortgages bear interest at rates between 9% and 10% per annum.

Net operating income ("NOI") in the second quarter of 2006 increased 9.1% to $49.0 million compared to $44.9 million in the same period last year. NOI for the six months ended June 30, 2006 rose 4.7% to $95.8 million from $91.5 million in the prior year period. For the same properties owned in both 2006 and 2005, NOI for the six months ended June 30, 2006 increased 1.1% for the total portfolio and 1.0% for Summit's Canadian light industrial portfolio. The increases in same property performance are due to higher average rents, a slight increase in occupancy, and increases in other income. Same property NOI in the second quarter decreased marginally by 0.9% and 1.0% for the total portfolio and Canadian light industrial portfolio respectively. As expected, the decline in the second quarter is due to a small number of leases at rental rates considerably higher than market renewing at lower rates during the period. As at June 30, 2006, occupancy for Summit's total portfolio increased to 95.7% from 95.3% at the same time last year and 95.6% at March 31, 2006. For the Canadian industrial portfolio, occupancy increased to 95.6% compared to 95.2% at June 30, 2005 and 95.5% at March 31, 2006.

"We are pleased with our operating performance through the first six months of 2006 as our proactive property management programs are resulting in higher tenant retention, improved occupancies, increased rents, and stable same property NOI," commented Lou Maroun, President and CEO. "Looking ahead, we believe we can continue to generate steady operating performance as we increase the size and scale of our property portfolio through acquisitions, developments, expansions and our mezzanine financing programs."

Funds from operations ("FFO") in the second quarter ended June 30, 2006 increased 13.1% to $33.0 million ($0.480 per Unit) from $29.2 million ($0.469 per Unit) over the same period last year. Per Unit amounts in the second quarter of 2006 were impacted by a 10.7% increase in the weighted average number of Units outstanding compared to the same period in the prior year. Summit's average leverage ratio at June 30, 2006 was also significantly reduced to 50%, compared to 54% at the same time last year. For the first six months of 2006, FFO increased to $64.3 million ($0.943 per Unit) compared to $59.3 million ($0.955 per Unit) last year. FFO per Unit has been impacted in 2006 by lower lease termination income compared with the prior year and the 9.9% increase in the weighted average number of Units outstanding in the first six months of 2006 compared to the same period last year.

"Despite the increase in the weighted average number of Units outstanding, and the resulting significant reduction in our leverage ratio compared to the prior year, we were pleased to have generated solid accretive growth in the second quarter of 2006," Mr. Maroun stated. "As we further employ our capital in additional growth opportunities and our leverage ratio moves toward our target mid-fifty percent level, we are confident this accretion will continue."

During the first six months of 2006, Summit completed the acquisition of five properties totaling approximately 698,000 square feet for a total purchase price of $47.5 million. In addition, pursuant to its strategy to focus on the light industrial sector of the Canadian real estate market, Summit sold three non-core properties, including one in the United States, generating a net gain on the dispositions, including realized foreign exchange losses, of approximately $1.1 million.

Subsequent to the end of the quarter, Summit announced that it will acquire three properties currently under development, through its mezzanine financing program adding approximately 620,000 square feet to the portfolio for a total cost of approximately $40 million. With these acquisitions, $12 million in mezzanine loans will be repaid. These transactions are expected to close during the third quarter of 2006. In addition, two parcels of land in Edmonton, Alberta were purchased on which Summit will construct light industrial buildings aggregating 307,000 square feet. To facilitate these and other future acquisitions, Summit increased its acquisition line of credit to $200 million from $125 million.

"Including these transactions, we will have invested approximately $125 million in our growth initiatives so far in 2006, and we remain confident we will achieve our goal of investing approximately $200 million for the full year," Mr. Maroun concluded. "Our pipeline of potential acquisition opportunities has increased considerably since the same time last year and we expect to be more active through the balance of the year."

Financial Highlights:

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For the period ended June 30 Three Months Six Months

2006 2005 2006 2005

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(dollar amounts in thousands,

except per Unit amounts)

Revenue from income

properties $ 74,197 $ 68,860 $ 147,817 $ 142,103

Property operating expenses 25,184 23,936 52,037 50,597

Net operating income 49,013 44,924 95,780 91,506

Revenue from mortgages

receivable 949 1,042 1,908 1,691

Interest expense 15,880 16,012 31,300 32,363

Trust expenses 669 400 1,258 770

Gain (loss) on real estate

transactions, including

realized foreign exchange

losses 683 (220) 1,145 (396)

Reduction of income

properties to fair value - (3,109) - (3,109)

Net income 19,956 12,756 38,251 29,517

Net income per Unit (basic

and diluted) $ 0.290 $ 0.205 $ 0.560 $ 0.475

Funds from operations 33,013 29,177 64,344 59,320

Funds from operations

per Unit $ 0.480 $ 0.469 $ 0.943 $ 0.955

Funds from operations

payout ratio 82% 82% 83% 80%

Distributions per Unit $ 0.392 $ 0.386 $ 0.782 $ 0.768

Real estate assets 1,994,184 1,860,239 1,994,184 1,860,239

Weighted average Units

outstanding 68,800,574 62,154,429 68,254,148 62,090,928

Debt leverage ratio 50% 54% 50% 54%

Floating rate debt 13% 9% 13% 9%

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Effective with the first quarter of 2006, Summit ceased reporting distributable income and distributable income per Unit as key performance indicators. Management believes that funds from operations is a more appropriate, standardized and comparable measure of the REIT's ability to generate operating cash flows. At Summit's Annual General Meeting held on May 3, 2006, the Unitholders approved an amendment to the Declaration of Trust to delete the definition of distributable income.

Net operating income ("NOI") and funds from operations ("FFO") are widely accepted supplemental measures of a Canadian real estate investment trust's performance and are not measures defined by Canadian generally accepted accounting principles ("GAAP"). Readers are directed to the Management's Discussion and Analysis for the period ended June 30, 2006 for a description of the measure and a reconciliation of the measure to net income. NOI and FFO should not be construed as alternatives to net income or cash flow from operating activities that have been calculated in accordance with GAAP and these measures may not be comparable to similar measures presented by other issuers.

The full financial statements for the period, including Management's Discussion and Analysis about the period's results and Summit's property portfolio, can be obtained from Summit's website at www.summitreit.com.

As one of Canada's largest real estate investment trusts, Summit REIT owns a portfolio of high-quality properties containing approximately 33 million square feet of leaseable space. Focused primarily on the light industrial segment of the Canadian real estate market, Summit is dedicated to maximizing funds from operations and the value of its property portfolio through active property management, accretive acquisitions, innovative financing and selective development opportunities. Summit REIT's Units and convertible debentures are listed on the Toronto Stock Exchange under the symbols SMU.UN and SMU.DB respectively. For more information on Summit REIT, visit our website at www.summitreit.com.

CAUTIONARY STATEMENTS REGARDING FORWARD-LOOKING STATEMENTS

This news release contains forward-looking statements relating to our operations and the environment in which we operate, which are based on our expectations, estimates, forecast and projections. These statements are not guarantees of future performance and involve risks and uncertainties that are difficult to control or predict. Therefore, actual outcomes and results may differ materially from those expressed in these forward-looking statements. Readers, therefore, should not place undue reliance on any such forward-looking statements. Further, a forward-looking statement speaks only as of the date on which such statement is made. Management undertakes no obligation to publicly update any such statement, to reflect new information or the occurrence of future events or circumstances.

For further information: Paul Dykeman, Executive Vice President & Chief Financial Officer, Toll-Free (866) 786-6481 and Fax Toll-Free (866) 786-1300, pdykeman@summitreit.com

Source: newswire