Borealis Retail REIT Confirms 5.4% Increase In Monthly Distribution, Announces Earnings Conference Call.

TORONTO -- Borealis Retail REIT (TSX:BRE.UN) announced today that its monthly distribution will increase by 5.4% effective August 16, 2004, for unitholders of record on July 30, 2004. The new payment will be 9 cents per unit, and represents an increase after only one year of operations.

Borealis Retail REIT, which invests in shopping malls that dominate secondary markets and mid-market malls in large urban centres, has announced financial results ahead of forecast. It also completed approximately $250 million of acquisitions, bringing the net book value of its nine-property portfolio to $687 million.

The acquisitions have improved the risk profile to equity investors
by:
- Increasing the scale and income stability of operations;
- Improving geographic diversification across four provinces (British
  Columbia, Alberta, Saskatchewan and Ontario);
- Smoothing the lease maturity profile; and
- Lengthening the weighted average term to maturity of indebtedness.

Investors who participated in the REIT's Initial Public Offering in July 2003 have received a 10.25% income return at the initial distribution rate. In addition, investors earned capital appreciation of 17.5%, measured to the closing price on Friday, July 16h of $11.75, for a one-year total return of 27.75%

Borealis Retail REIT will announce its second quarter financial results after the close of markets on Thursday, August 12, 2004.We invite you to participate in a conference call that will be held on Friday, August 13 at 10 am EST to discuss these results. Senior management will speak to the results and provide a brief corporate update.

Teleconference: The telephone numbers for the conference are: 416-405-9328 (within Toronto) or toll-free 1-800-387-6216 (outside Toronto). Replay: An audio recording of the teleconference will be available after the call until 11.59 pm EST on August 20, 2004. You can access the replay by dialing 416-695-5800 or 1-800-408-3053 and using the pass code 3081616#.

The REIT has a Distribution Reinvestment Plan ("DRIP") that permits unitholders to use their monthly cash distributions to purchase additional units directly from the REIT. Unitholders participating in the DRIP receive a further distribution, payable in units, equal to 3% of each cash distribution reinvested by them. The price at which units will be purchased with such cash distributions is based on a weighted average trading price of units for the 20 trading days prior to the relevant distribution date, normally the 15th of each month. Unitholders wishing to enroll in the DRIP should contact the brokerage house or financial institution where their units are held and complete the required authorization form.

Borealis Retail REIT is a TSX listed real estate investment trust (TSX:BRE.UN).Borealis Retail REIT owns 9 shopping centres comprising approximately 4.5 million square feet located in Canada. As of June 28, 2004 the REIT had 30,557,701 units issued and outstanding.