Document:

EX-4.5

Table of Contents

 Exhibit 4.5 
  

 
 GRANITE REAL ESTATE INVESTMENT TRUST 

and 
 GRANITE REIT INC. 

JOINT NOTICE OF ANNUAL GENERAL MEETINGS OF 

HOLDERS OF STAPLED UNITS 
 (CONSISTING OF
TRUST UNITS OF GRANITE REAL ESTATE INVESTMENT TRUST 
 AND COMMON SHARES OF GRANITE REIT INC.) 

TO BE HELD ON THURSDAY, JUNE 10, 2021 

and 
 MANAGEMENT INFORMATION CIRCULAR /
PROXY STATEMENT 
 April 12, 2021 

Table of Contents

 TABLE OF CONTENTS 

 

			
	 	  	Page

					
		
	 MANAGEMENT INFORMATION CIRCULAR / PROXY STATEMENT
	 	 	1	 
		
	 The Meeting Materials
	 	 	1	 
		
	 VOTING INFORMATION AND GENERAL PROXY MATTERS
	 	 	2	 
		
	 Special Measures Related to
COVID-19
	 	 	2	 
		
	 Attending and Voting Virtually at the Meetings
	 	 	3	 
		
	 Registered Holders
	 	 	4	 
		
	 Non-Registered Holders
	 	 	5	 
		
	 Revocation
	 	 	6	 
		
	 Signature of Proxy
	 	 	6	 
		
	 Voting of Proxies
	 	 	6	 
		
	 Exercise of Discretion of Proxy
	 	 	7	 
		
	 Record Date
	 	 	7	 
		
	 VOTING SECURITIES AND THEIR PRINCIPAL HOLDERS
	 	 	7	 
		
	 MATTERS TO BE ACTED UPON AT THE MEETINGS
	 	 	7	 
		
	 Election of Trustees of Granite REIT
	 	 	7	 
		
	 Election of Directors of Granite GP
	 	 	19	 
		
	 Re-appointment of Auditor of Granite
REIT
	 	 	20	 
		
	 Re-appointment of Auditor of Granite
GP
	 	 	21	 
		
	 Advisory Vote on Granite’s Approach to Executive Compensation
	 	 	21	 
		
	 Review and Consideration of Financial Statements
	 	 	21	 
		
	 INTERESTS OF CERTAIN PERSONS IN THE MATTERS TO BE CONSIDERED AT THE
MEETINGS
	 	 	22	 
		
	 TRUSTEE / DIRECTOR COMPENSATION
	 	 	22	 
		
	 Director Compensation Table
	 	 	24	 
		
	 Director Incentive Plan Awards
	 	 	25	 
		
	 INDEBTEDNESS OF TRUSTEES, DIRECTORS AND EXECUTIVE OFFICERS
	 	 	25	 
		
	 COMPENSATION DISCUSSION AND ANALYSIS
	 	 	26	 
		
	 Letter to Unitholders
	 	 	26	 
		
	 Named Executive Officers
	 	 	29	 
		
	 Executive Compensation Objectives and Philosophy
	 	 	30	 
		
	 Compensation, Governance and Nominating Committee
	 	 	31	 
		
	 Management of Risks Associated with Compensation Policies and Practices
	 	 	33	 
		
	 President and CEO Stapled Unit Ownership Guidelines
	 	 	35	 
		
	 NEO Stapled Unit Ownership Guidelines
	 	 	35	 
		
	 President and CEO Post-Employment Ownership Guideline
	 	 	36	 
		
	 Executive Compensation Review Process
	 	 	36	 
		
	 Elements of Executive Compensation
	 	 	38	 

  
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	 Employment Agreements
	 	 	49	 
		
	 Cost of Management
	 	 	50	 
		
	 President and CEO Compensation — Look-Back Table
	 	 	51	 
		
	 Performance Graph
	 	 	52	 
		
	 Summary Compensation Table
	 	 	53	 
		
	 Incentive Plan Awards
	 	 	55	 
		
	 Change of Control and Termination Provisions
	 	 	56	 
		
	 Equity Compensation Plan Information
	 	 	60	 
		
	 STATEMENT OF CORPORATE GOVERNANCE PRACTICES
	 	 	63	 
		
	 Applicable Governance Requirements and Guidelines
	 	 	63	 
		
	 Board of Trustees of Granite REIT and Board of Directors of Granite GP
	 	 	63	 
		
	 Board Mandates
	 	 	64	 
		
	 Board Committees
	 	 	65	 
		
	 Position Descriptions
	 	 	71	 
		
	 Orientation and Continuing Education
	 	 	74	 
		
	 Ethical Business Conduct
	 	 	77	 
		
	 Related Party Transactions
	 	 	77	 
		
	 Risk Management Oversight
	 	 	78	 
		
	 Succession Planning
	 	 	78	 
		
	 Diversity — Board and Management Representation
	 	 	79	 
		
	 Sustainability Planning
	 	 	79	 
		
	 INTERESTS OF INFORMED PERSONS IN MATERIAL TRANSACTIONS
	 	 	80	 
		
	 MANAGEMENT CONTRACTS
	 	 	80	 
		
	 OTHER MATTERS
	 	 	80	 
		
	 ADDITIONAL INFORMATION REGARDING GRANITE
	 	 	81	 
		
	 Engagement with Unitholders — Contacting the Boards
	 	 	81	 
		
	 APPENDIX “A”
	 	 	A-1	 
		
	 APPENDIX “B”
	 	 	B-1	 

  
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 April 12, 2021 
 Dear Granite Unitholders:

 On behalf of our trustees, directors and management, we are pleased to invite you to the joint annual general meetings of holders of stapled units
(“Stapled Units”) of Granite Real Estate Investment Trust (“Granite REIT”) and Granite REIT Inc. (“Granite GP” and, together with Granite REIT, “Granite”). The joint annual general
meetings will consist of the annual general meeting of unitholders of Granite REIT and the annual general meeting of shareholders of Granite GP (collectively, the “Meetings”), to be held concurrently at 10:00 a.m. (Toronto time) on
Thursday, June 10, 2021. The Meetings have been called to provide unitholders and shareholders with the opportunity to vote on those matters described in the accompanying joint notice of annual general meetings and management information
circular / proxy statement. 
 Due to public health restrictions related to the COVID-19 pandemic and in
order to mitigate potential health and safety risks to the community, shareholders, unitholders, employees and other stakeholders, the Meetings will be conducted virtually. Unitholders and duly appointed proxyholders are being asked to attend the
Meetings by live audio webcast at https://web.lumiagm.com/420649348, which will enable registered unitholders and duly appointed proxyholders to listen to the Meetings, submit questions, and vote online.
Non-registered unitholders holding Stapled Units beneficially through an intermediary may listen to the live audio webcast of the Meetings at https://web.lumiagm.com/420649348, but will not have the ability to
vote virtually or ask questions. The accompanying joint notice of annual general meetings and management information circular / proxy statement include detailed instructions on how to attend and vote virtually at the Meetings. 

2020 was certainly a challenging year for all of us, both personally and professionally, as COVID-19 impacted
economies and societies globally. Notwithstanding these challenges, Granite’s cash flow stability and conservative balance sheet once again helped drive strong operating results and a significant increase in net asset value, and allowed us to
successfully execute on our strategic priorities for 2020. 
 In accordance with our strategic objectives for 2020, Granite invested over
$1.0 billion in the acquisition and development of modern distribution assets and disposed of three non-core assets, while generating year-over-year growth in funds from operations (FFO) per Stapled Unit(1) of 9.9% and maintaining a conservative balance sheet with approximately $1.5 billion of liquidity as at March 31, 2021. 

From a capital markets perspective, Granite delivered strong total return performance relative to both the S&P/TSX Composite Index and the
S&P/TSX Capped REIT Index. Granite was the top real estate investment trust in North America for total-return performance in 2020, providing a total return for Unitholders of approximately 23%. Granite also announced that its annual distribution
for 2021 has been increased by 3.4%, to $3.00 per Stapled Unit, its ninth consecutive annual increase. 
 Environmental, Social and Governance
(“ESG”) matters were a major priority for Granite in 2020. We published our ESG Overview, which summarized our progress to date against a number of objectives outlined in the Sustainability Plan we adopted in 2019. We also established our
Green Bond Framework and issued a $500 million green bond in 2020, and to date have already committed over $340 million to eligible green projects as defined in the framework. 

  
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 Ensuring the safety of our employees remains another top priority for Granite. The majority of our
employees continue to work remotely from home, and are doing so very effectively, thereby allowing us to continue to successfully execute on our strategy and manage the safe operation of the portfolio. 

In closing, we hope you can attend the Meetings virtually, but in any case, your vote is important. If you are unable to participate in the virtual
Meetings, please complete, date and sign the proxy form sent to you by mail, and return it in accordance with the instructions set out in the proxy form. Even if you plan to participate in the Meetings virtually, you may find it convenient to
express your views in advance by completing and returning the proxy form. 
 We look forward to connecting with you at the Meetings on June 10,
2021. 
  

			
	 Yours truly,
  
 

  
 Kelly Marshall
	  	 

  
 Kevan Gorrie

		
	 Chairman
 Granite Real Estate Investment Trust and

Granite REIT Inc.
	  	 President and Chief Executive Officer
 Granite Real Estate
Investment Trust and
 Granite REIT Inc.

  
 Note: 

	(1)	 FFO is a measure not defined by International Financial Reporting Standards. For a description of FFO see
“Compensation Discussion and Analysis”. 

  
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 JOINT NOTICE OF ANNUAL GENERAL MEETINGS OF HOLDERS OF STAPLED UNITS 

JOINT NOTICE is hereby given that the Annual General Meetings of holders of stapled units (collectively, the
“Meetings”), being the annual general meeting of unitholders of Granite Real Estate Investment Trust (“Granite REIT”) and the annual general meeting of shareholders of Granite REIT Inc. (“Granite
GP” and, together with Granite REIT, “Granite”), will be held concurrently at 10:00 a.m. (Toronto time), on Thursday, June 10, 2021 for the following purposes: 

 

	(a)	 to receive and consider the annual report of Granite, including the audited combined financial statements of Granite
for the financial year ended December 31, 2020 and the auditor’s report on those statements; 

  

	(b)	 to elect the trustees of Granite REIT for the ensuing year; 

 

	(c)	 to elect the directors of Granite GP for the ensuing year; 

 

	(d)	 to re-appoint Deloitte LLP the auditor of Granite REIT for the ensuing year,
based on the recommendation of the Audit Committee and the board of trustees of Granite REIT; 

  

	(e)	 to re-appoint Deloitte LLP the auditor of Granite GP for the ensuing year,
based on the recommendation of the Audit Committee and the board of directors of Granite GP, and authorize the directors to fix the auditor’s remuneration; 

 

	(f)	 to consider, and if thought advisable, to pass a non-binding advisory
resolution on Granite’s approach to executive compensation; and 

  

	(f)	 to transact such further or other business or matters as may properly come before the Meetings or any adjournment(s)
or postponement(s) thereof. 

 For disclosure related to each of these matters please refer to “Matters to be Acted Upon at the
Meetings” in the Circular. Only shareholders and unitholders of record at the close of business on April 12, 2021 (the “Record Date”), being the record date for the Meetings, will be entitled to receive notice of,
to attend and to vote at the Meetings or any adjournment(s) or postponement(s) thereof. Due to public health restrictions related to the COVID-19 pandemic and in effort to mitigate potential health and
safety risks to the community, shareholders, unitholders, employees and other stakeholders, the Meetings will be conducted virtually. Shareholders and unitholders and duly appointed proxyholders are being asked to attend the Meetings by live audio
webcast at https://web.lumiagm.com/420649348, which will enable registered shareholders and unitholders and duly appointed proxyholders to listen to the Meetings, submit questions, and vote online.
Non-Registered Holders (as defined below) may listen to the live audio webcast of the Meetings at https://web.lumiagm.com/420649348, but will not have the ability to vote virtually or ask questions. The
accompanying form of proxy or voting instruction form include detailed instructions on how to attend and vote virtually at the Meetings. 

INSTRUCTIONS FOR ATTENDING THE MEETINGS VIA LIVE AUDIO WEBCAST: Shareholders and unitholders, and duly appointed proxyholders, are
invited to attend the Meetings virtually via live audio webcast, by going to https://web.lumiagm.com/420649348. 
  

	 	●	 	 Registered shareholders and unitholders and duly appointed proxyholders can participate in the Meetings by clicking
“I have a login” and entering a username and password before the start of the Meetings. 

  

	 	o	 Registered shareholders and unitholders: The 15-digit control number
located on the form of proxy or in the e-mail notification you received is the username and the password is “granite2021”. 

  
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	 	o	 Duly appointed proxyholders: Computershare Investor Services Inc. will provide the proxyholder with a username
after the voting deadline has passed. The password to the Meetings is “granite2021”. 

 It is important
that you are connected to the internet at all times during the Meetings in order to vote when balloting commences. 
  

	 	●	 	 Only registered shareholders and unitholders and duly appointed proxyholders will be able to vote and ask questions at
the Meetings. Non-Registered Holders who have not appointed themselves may attend (but not participate in) the Meetings by clicking “I am a guest” and completing the online form.

 Notice-and-Access 

In an effort to reduce the environmental impact and cost associated with providing printed materials, Granite is using the “notice-and-access” procedures adopted by the Canadian Securities Administrators (the
“Notice-and-Access Procedures”) for distribution of its Management Information Circular / Proxy Statement (the “Circular”) to both
registered shareholders and unitholders and non-registered shareholders and unitholders holding stapled units beneficially through an intermediary
(“Non-Registered Holders”). The Notice-and-Access Procedures allow reporting issuers to post electronic versions
of proxy related materials, such as the Circular (collectively, the “Meeting Materials”) online, via the System for Electronic Document Analysis and Retrieval (“SEDAR”) and one other website, rather than
mailing paper copies of such materials. Electronic copies of the Meeting Materials and the annual report of Granite, including the audited combined financial statements and management’s discussion and analysis of Granite for the financial year
ended December 31, 2020, may be found on Granite’s SEDAR profile at www.sedar.com and also on Granite’s website at https://granitereit.com/investors/unitholder-shareholder-meetings/. 

Shareholders and unitholders as of the Record Date will not receive a paper copy of the Meeting Materials in connection with the Meetings under the Notice-and-Access Procedures but will receive paper copies of the accompanying form of proxy or voting instruction form. Shareholders and unitholders may obtain paper copies
of the Meeting Materials free of charge by contacting Granite’s registrar and transfer agent, Computershare Investor Services Inc., at
1-866-962-0498 (toll free North America) or
514-982-8716 (outside North America). For more information about the Notice-and-Access
Procedures, please contact Computershare Investor Services Inc. toll free at 1-866-964-0492 or at
www.computershare.com/noticeandaccess. In order to receive paper copies of the Meeting Materials in advance of the deadline for submission of proxies and the date of the Meeting, your request must be received by May 27, 2021. Printed
copies of the Circular will also be available for inspection by shareholders and unitholders at Granite GP’s records office located at Three Bentall Centre, Suite 2600, 595 Burrard Street, Vancouver, British Columbia during statutory business
hours on any business day between the date hereof and the date of the Meetings.  
 Voting by Proxy, Telephone or Online 

Shareholders and unitholders are reminded to review the Meeting Materials before voting. Although the Meeting Materials are posted
electronically, the “joint notice package” also includes a form of proxy or voting instruction form. Registered shareholders and unitholders should complete, date and sign the proxy and return it in the enclosed envelope provided for that
purpose in accordance with the instructions for completion and delivery contained in the form of proxy. To be effective, proxies must be received by 10:00 a.m. (Toronto time) on June 8, 2021, or not less than 48 hours (excluding
Saturdays, Sundays and holidays) before the time the Meetings, if adjourned, are reconvened, or, if the Meetings are postponed, are convened. The Chair of the Meetings may waive 

  
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or extend the proxy cut-off without notice. Proxies must be returned to the Chief Executive Officer of Granite REIT and Granite GP c/o the Proxy Department
of Computershare Investor Services Inc., Granite’s registrar and transfer agent, at 100 University Avenue, 8th Floor, Toronto, Ontario, Canada M5J 2Y1. Shareholders and unitholders may also elect to vote by use of the telephone or via the
internet in accordance with the instructions on the applicable form of proxy. 
 Non-Registered Holders wishing
to be represented by proxy at the Meeting or any adjournment thereof must have deposited their duly completed voting instruction form in accordance with the directions provided on the voting instruction form. 

Shareholders and unitholders, including Non-Registered Holders, who wish to appoint a third party proxyholder to
represent them at the Meetings must submit their proxy or voting instruction form (as applicable) prior to registering their proxyholder. Registering the proxyholder is an additional step once the shareholder or unitholder has submitted their
proxy or voting instruction form. Failure to register a duly appointed proxyholder will result in the proxyholder not receiving a username that would allow them to participate in the online Meetings. To register a proxyholder, shareholders and
unitholders MUST visit http://www.computershare.com/GraniteREIT and provide Computershare Investor Services Inc. with their proxyholder’s contact information by 10:00 a.m. (Toronto time) on June 8, 2021, so that Computershare
Investor Services Inc. may provide the proxyholder with a username via e-mail. In order to participate online, shareholders and unitholders must have a valid 15-digit
control number and proxyholders must have received an e-mail from Computershare Investor Services Inc. containing a username. 

Other Matters 
 Granite is not aware of any items of business
to be brought before the Meetings other than those described in the Circular. 
  

			
	 BY ORDER OF THE BOARD OF TRUSTEES OF GRANITE REAL ESTATE INVESTMENT TRUST
	  	 BY ORDER OF THE BOARD OF DIRECTORS OF GRANITE REIT INC.

		
	 

  
  

KEVAN GORRIE
 President and Chief Executive Officer

Granite Real Estate Investment Trust
	  	 

  
  

KEVAN GORRIE
 President and Chief Executive Officer

Granite REIT Inc.

 April 12, 2021 

Toronto, Ontario 

  
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 MANAGEMENT INFORMATION CIRCULAR / PROXY STATEMENT

  
 The Meeting
Materials 
 This joint Management Information Circular / Proxy Statement dated April 12, 2021 (the
“Circular”), the accompanying Joint Notice of Annual General Meetings (the “Notice”), the accompanying form of proxy and all attachments thereto (collectively, the “Meeting Materials”) are furnished
to owners (“Unitholders”) of stapled units (“Stapled Units”) (each consisting of one trust unit (a “REIT Unit”) of Granite Real Estate Investment Trust (“Granite REIT”) and one
common share (a “GP Share”) of Granite REIT Inc. (“Granite GP”)) in connection with the solicitation by and on behalf of the management of Granite REIT and Granite GP (“Management”) of
proxies to be used at the Annual General Meetings of Unitholders (the “Meetings”) to be held concurrently at 10:00 a.m. (Toronto time) on Thursday, June 10, 2021, and at any adjournment(s) or postponement(s) thereof, for the
purposes set forth in the Notice. 
 This Circular contains information about both Granite REIT and Granite GP in accordance with
exemptions granted by Canadian securities regulatory authorities dated December 21, 2012. For periods prior to January 3, 2013, the date upon which Granite Real Estate Inc. (“Granite Co.”) converted from a corporate
structure to a stapled unit real estate investment trust structure pursuant to the Business Corporations Act (Québec) (the “2013 Arrangement”), this Circular also contains information about Granite Co. Throughout this
Circular, unless otherwise specified or the context otherwise indicates, “we”, “us”, “our” and “Granite” refer to the combined Granite REIT and Granite GP and their subsidiaries and
investees and, for periods prior to implementation of the 2013 Arrangement, their predecessor Granite Co. and its predecessors and subsidiaries. 

As provided in the Amended and Restated Declaration of Trust of Granite REIT dated December 20, 2017 (the “Granite REIT
Declaration of Trust”) and the articles of Granite GP, each REIT Unit is “stapled” to a GP Share (and each GP Share is “stapled” to a REIT Unit) such that they trade together as Stapled Units (unless and until an
“Event of Uncoupling”, as defined in the Granite REIT Declaration of Trust, occurs). References in this Circular to “Unitholders” refer to holders of Stapled Units including, as applicable and as the context may require, to such
persons as holders of REIT Units and/or holders of GP Shares comprising Stapled Units. 
 The Meeting Materials are being provided to
Unitholders of record as of the close of business on April 12, 2021. In an effort to reduce the environmental impact and cost associated with providing printed materials, Granite is using the “notice-and-access” procedures adopted by the Canadian Securities Administrators (the “Notice-and-Access
Procedures”) for distribution of the Meeting Materials to both registered and non-registered (or beneficial) Unitholders. 

The Notice-and-Access Procedures allow reporting issuers
to post electronic versions of proxy related materials, such as the Meeting Materials online, via the System for Electronic Document Analysis and Retrieval (“SEDAR”) and one other website, rather than mailing paper
copies of such materials. Electronic copies of the Meeting Materials and the annual report of Granite, including the audited combined financial statements and management’s discussion and analysis
of Granite for the financial year ended December 31, 2020, may be found on Granite’s SEDAR profile at www.sedar.com and also on Granite’s website at
https://granitereit.com/investors/unitholder-shareholder-meetings/. 
 Unitholders as of the
Record Date will not receive a paper copy of the Meeting Materials in connection with the Meetings under the Notice-and-Access Procedures but will receive paper copies
of the accompanying form of proxy or voting instruction form. Unitholders may obtain paper copies 

  
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of the Meeting Materials free of charge by contacting Granite’s registrar and transfer agent, Computershare Investor Services Inc., at 1-866-962-0498 (toll free North America) or 514-982-8716 (outside North America). For
more information about the Notice-and-Access Procedures, please contact Computershare Investor Services Inc. toll free at 1-866-964-0492 or at www.computershare.com/noticeandaccess. In order to receive paper copies of the Meeting Materials in advance of the deadline for submission of
proxies and the date of the Meeting, your request must be received by May 27, 2021. Printed copies of the Circular will also be available for inspection by Unitholders at Granite GP’s records office located at Three Bentall Centre,
Suite 2600, 595 Burrard Street, Vancouver, British Columbia during statutory business hours on any business day between the date hereof and the date of the Meetings. 

Granite will bear all costs associated with the preparation and mailing of the Meeting Materials, as well as the cost of the
solicitation of proxies. The solicitation will be primarily by mail; however, officers and employees of Granite may also directly solicit proxies (but not for additional compensation) personally, by telephone, by facsimile or by other means of
electronic transmission. Banks, brokerage houses and other custodians and nominees or fiduciaries will be requested to forward the Meeting Materials to their principals and to obtain authorizations for the execution of proxies and will be reimbursed
for their reasonable expenses in doing so. 
 All monetary amounts referred to in this Circular are presented in Canadian dollars,
unless otherwise noted. 
 VOTING INFORMATION AND GENERAL PROXY MATTERS 

 
 Special Measures Related to COVID-19 
 Due to public health restrictions related to the
COVID-19 pandemic and in order to mitigate potential health and safety risks to the community, Unitholders, employees and other stakeholders, the Meetings will be conducted through a virtual only format.
Unitholders and duly appointed proxyholders are being asked to attend the meetings by live audio webcast at https://web.lumiagm.com/420649348 which will enable registered Unitholders and duly appointed proxyholders to listen to the Meetings, submit
questions, and vote online. Non-Registered Holders (as defined below) may listen to the live audio webcast of the Meetings at https://web.lumiagm.com/420649348, but will not have the ability to vote virtually
or ask questions. For a detailed description of the procedures for attending and voting virtually at the Meetings, please see “— Attending and Voting Virtually at the Meetings”. 

Granite is not aware of any items of business to be brought before the Meetings other than those described in the Circular. 

INSTRUCTIONS FOR ATTENDING THE MEETINGS VIA LIVE AUDIO WEBCAST: Unitholders and duly appointed proxyholders
are invited to attend the Meetings virtually via live audio webcast, by going to https://web.lumiagm.com/420649348. 
  

	 	●	 	 Registered Unitholders and duly appointed proxyholders can participate in the Meetings by clicking “I have a
login” and entering a username and password before the start of the Meetings. 

  

	 	o	 Registered Unitholders: The 15-digit control number located on the form
of proxy or in the e-mail notification you received is the username and the password is “granite2021”. 

  
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	 	o	 Duly appointed proxyholders: Computershare Investor Services Inc. will provide the proxyholder with a username
after the voting deadline has passed. The password to the Meetings is “granite2021”. 

 It is important that you are
connected to the internet at all times during the Meetings in order to vote when balloting commences. 
  

	 	●	 	 Only registered Unitholders and duly appointed proxyholders will be able to vote and ask questions at the Meetings. Non-Registered Holders who have not appointed themselves may attend (but not participate in) the Meetings by clicking “I am a guest” and completing the online form. 

Attending and Voting Virtually at the Meetings 

A summary of the information Unitholders will need to attend the Meetings by live audio webcast is provided below: 

 

	 	●	 	 Registered Unitholders that have a 15-digit control number, along with duly
appointed proxyholders who were assigned a username by Computershare Investor Services Inc., will be able to vote and submit questions during the Meetings. To do so, please go to https://web.lumiagm.com/420649348 prior to the start of the Meetings
to login. Click on “I have a login” and enter your 15-digit control number or username along with the password “granite2021”. Non-Registered Holders
who have not appointed themselves to vote at the Meetings may login as a guest, by clicking on “I am a guest” and complete the online form. 

  

	 	●	 	 Non-Registered Holders wishing to attend the Meetings virtually who do not have
a 15-digit control number or username will only be able attend as a guest, which allows them to listen to the Meetings but not to vote or submit questions. Please see the information under the heading “Non-Registered Holders” for an explanation of why certain Unitholders may not receive a form of proxy, and how Non-Registered Holders may appoint themselves as
proxy should they wish to attend and vote at the Meetings via the live audio webcast. 

  

	 	●	 	 United States Non-Registered Holders: To attend and vote at the Meetings
virtually, you must first obtain a valid legal proxy from your broker, bank or other agent and then register in advance to attend the Meetings. Follow the instructions from your broker or bank included with the proxy materials, or contact your
broker or bank to request a legal proxy form. After first obtaining a valid legal proxy from your broker, bank or other agent, to then register to attend the Meetings, you must submit a copy of your legal proxy to Computershare Investor Services
Inc. Requests for registration should be directed to Computershare Investor Services Inc., 100 University Avenue, 8th Floor, Toronto, Ontario, M5J 2Y1 or by
e-mail at uslegalproxy@computershare.com. Requests for registration must be labeled as “Legal Proxy” and be received no later than 10:00 a.m. (Toronto time) on June 8, 2021. Once this process is
complete, you may attend the Meetings and vote your shares at https://web.lumiagm.com/420649348 during the Meetings. Please note that you are required to register your appointment at http://www.computershare.com/GraniteREIT. 

 

	 	●	 	 If you are using a 15-digit control number to login to the live audio webcast
and you accept the terms and conditions, you will be revoking any and all previously submitted proxies. However, in such a case, you will be provided the opportunity to vote by ballot

  
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on the matters put forth at the Meetings. If you DO NOT wish to revoke all previously submitted proxies, do not accept the terms and conditions, in which case you can only enter the Meetings as a
guest. 

  

	 	●	 	 If you are eligible to vote at the Meetings, it is important that you are connected to the internet at all times during
the Meetings in order to vote when balloting commences. It is your responsibility to ensure connectivity for the duration of the Meetings. 

Voting at the Meetings 
 Each
registered Unitholder, and each Non-Registered Holder who has appointed themself or a third party proxyholder to represent them at the Meetings, will appear on a list of Unitholders prepared by Granite’s
registrar and transfer agent, Computershare Investor Services Inc. To have their Stapled Units voted at the Meetings, each Registered Unitholder or proxyholder will be required to enter their control number or username provided by Computershare
Investor Services Inc. at https://web.lumiagm.com/420649348 prior to the start of the Meetings if attending virtually. In order to vote, Non-Registered Holders who appoint themselves as a proxyholder
MUST register with Computershare Investor Services Inc. at http://www.computershare.com/GraniteREIT after submitting their voting instruction form in order to receive a username (please see the information under the headings
“— Registration of Proxyholders” below for details). 
 Registration of Proxyholders 

Unitholders who wish to appoint a third party proxyholder to represent them at the live audio webcast must submit their proxy or
voting instruction form (as applicable) prior to registering their proxyholder. Registering your proxyholder is an additional step once you have submitted your proxy or voting instruction form. Failure to register the proxyholder will result in the
proxyholder not receiving a username that would allow them to participate in the Meetings. To register a proxyholder, Unitholders MUST visit http://www.computershare.com/GraniteREIT and provide Computershare Investor Services Inc. with their
proxyholder’s contact information by 10:00 a.m. (Toronto time) on June 8, 2021, so that Computershare Investor Services Inc. may provide the proxyholder with a username via e-mail. 

Registered Holders 

The persons named as the appointed proxyholder in the accompanying form(s) of proxy are Management appointees and are officers of
Granite. A Unitholder has the right to appoint a person (who need not be a Unitholder) to attend and act for and on such Unitholder’s behalf at the Meetings other than the Management appointees named in the accompanying form of
proxy. This right may be exercised by inserting in the blank space the name of the person the Unitholder wishes to appoint as proxyholder, or by completing, signing and submitting another proper form of proxy naming such person as proxyholder,
and, in either case, then registering the proxyholder at http://www.computershare.com/GraniteREIT (see “— Registration of proxyholders”). 

Unitholders desiring to be represented at the Meetings by proxy must return their form of proxy to the President and Chief Executive
Officer of Granite REIT and Granite GP c/o the Proxy Department of Computershare Investor Services Inc., Granite’s registrar and transfer agent, at 100 University Avenue, 8th Floor, Toronto, Ontario, Canada M5J 2Y1, by 10:00 a.m.
(Toronto time) on June 8, 2021 or not less than 48 hours (excluding Saturdays, Sundays and holidays) before the time any adjourned Meeting is reconvened or any postponed Meeting is convened. A revocation of proxy may also be deposited with the
Chair of the Meetings on the day of the Meetings, or any adjournment(s) or postponement(s) thereof. If a Unitholder who has submitted a proxy attends the 

  
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Table of Contents

 
Meetings via the live audio webcast and accepts the terms and conditions when entering the Meetings online, any votes cast by such Unitholder on a ballot will be counted and the submitted proxy
will be disregarded. 
 Rather than returning the proxy by mail or hand delivery, registered Unitholders may also elect to vote by
telephone or via the internet. Those registered Unitholders electing to vote by telephone require a touch-tone telephone to transmit their voting preferences. Registered Unitholders electing to vote by telephone or via the internet must follow the
instructions included in the form(s) of proxy received from Granite. 
 If a registered Unitholder who has submitted a proxy attends
the Meetings via the live audio webcast using a 15-digit control number or username and accepts the terms and conditions when entering the Meetings online, any votes cast by such Unitholder on a ballot will be
counted and the submitted proxy will be disregarded. Without a username, proxyholders will not be able to participate in the live audio webcast of the Meetings. 

Non-Registered Holders 

Only registered Unitholders and persons appointed as proxyholders are permitted to attend and vote at the Meetings. However, in many
cases, Stapled Units beneficially owned by a Unitholder (a “Non-Registered Holder”) are registered either: 
  

	 	(a)	 in the name of an intermediary that the Non-Registered Holder deals with in
respect of the Stapled Units, such as, among others, banks, trust companies, securities dealers or brokers and trustees or administrators of registered plans; or 

 

	 	(b)	 in the name of a clearing agency (such as CDS Clearing and Depository Services Inc. and, in the United States, The
Depository Trust Company) in which the intermediary is a participant. 

 The Meeting Materials are being sent to
both registered and non-registered owners of Stapled Units. In accordance with National Instrument 54-101 — Communication with
Beneficial Owners of Securities of a Reporting Issuer, Granite is delivering the Meeting Materials directly to depositories and other intermediaries for onward distribution to Non-Registered Holders.
Typically, intermediaries will use a service company to forward the Meeting Materials to, and to obtain voting instructions from, beneficial owners. 

If you are a Non-Registered Holder, you should follow the instructions received from the
intermediary through which your Stapled Units are held. Generally, Non-Registered Holders will receive either: 
  

	 	(a)	 a voting instruction form (a “VIF”), which must be completed and signed by the Non-Registered Holder in accordance with the directions set out on the VIF (which may, in some cases, allow for voting by telephone or internet); or 

 

	 	(b)	 less typically, a proxy that has already been signed by the intermediary (usually by way of a facsimile, stamped
signature), that is restricted as to the number of Stapled Units beneficially owned by the Non-Registered Holder, but that is otherwise not fully completed. In this case, the
Non-Registered Holder who wishes to submit the proxy should otherwise properly complete and deposit it with Computershare Investor Services Inc., as described above. 

  
 - 5 - 

Table of Contents

 The purpose of these procedures is to permit
Non-Registered Holders to direct the voting of the Stapled Units they beneficially own. Non-Registered Holders that wish to vote via the live audio webcast platform at
the Meetings must insert their name in the space provided on the form of proxy or VIF and adhere to the signing and return instructions provided on the form, as well as the additional instructions for registering a proxyholder set out below under
“— Registration of Proxyholders”. If you are a Non-Registered Holder, you should follow the instructions herein and on the document you receive and contact your intermediary promptly if you need
assistance. 
 Revocation 

A registered Unitholder may revoke a proxy that has already been deposited by: 

 

	 	(a)	 completing and signing a proxy bearing a later date and depositing it with Granite or Computershare Investor Services
Inc. as described under “ — Registered Holders” above; 

  

	 	(b)	 depositing an instrument in writing executed by the Unitholder or by the Unitholder’s attorney authorized in
writing at Granite’s registered office at any time up to and including the last business day preceding the day of the Meetings, or any adjournment(s) or postponement(s) of the Meetings, at which the proxy is to be used, or with the Chair of the
Meetings on the day of the Meetings, or any adjournment(s) or postponement(s) thereof; or 

  

	 	(c)	 in any other manner permitted by law. 

A Non-Registered Holder who wishes to revoke his or her proxy or VIF must make appropriate
arrangements with the intermediary through which his or her Stapled Units are held. 
 Signature of Proxy 

A form of proxy must be executed by the Unitholder or his or her attorney authorized in writing, or if the Unitholder is a corporation,
the form of proxy should be signed in its corporate name by an authorized officer. A proxy signed by a person acting as attorney or in some other representative capacity should reflect such person’s capacity following his or her signature and
should be accompanied by the appropriate instrument evidencing qualification and authority to act (unless such instrument has been previously filed with Granite). 

Voting of Proxies 

The persons named in the accompanying form of proxy will vote the Stapled Units in respect of which they are appointed in accordance
with the direction of the Unitholder appointing them. Where a choice for a matter is not specified, Stapled Units will be voted as the proxyholder sees fit. Unless contrary instructions are provided, Stapled Units represented by proxies received
by Management will be voted as follows: 
  

	 	(a)	 FOR the election of trustees of Granite REIT as set out in this Circular; 

 

	 	(b)	 FOR the election of directors of Granite GP as set out in this Circular; 

 

	 	(c)	 FOR the re-appointment of Deloitte LLP as the auditor of Granite REIT,
based on the recommendation of the Audit Committee and the board of trustees of Granite REIT; 

  
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	 	(d)	 FOR the re-appointment of Deloitte LLP as the auditor of Granite GP,
based on the recommendation of the Audit Committee and the board of directors of Granite GP, and the authorization of the directors to fix the auditor’s remuneration; and 

 

	 	(e)	 FOR the non-binding advisory resolution on Granite’s approach to
executive compensation. 

 Exercise of Discretion of Proxy 

The accompanying form(s) of proxy confers discretionary authority upon the persons named therein with respect to any amendments or
variations to matters identified in the Notice and with respect to such other business or matters which may properly come before the Meetings or any adjournment(s) or postponement(s) thereof. As of the date of this Circular, Granite is not aware of
any such amendments or variations or any other matters to be addressed at the Meetings. 
 Record Date 

The board of trustees of Granite REIT and the board of directors of Granite GP (the “Boards”) have each fixed the close
of business on April 12, 2021 as the record date (the “Record Date”) for the Meetings. Only holders of record of REIT Units and GP Shares (forming Stapled Units) at the close of business on the Record Date are entitled to
receive notice of and to vote at the Meetings. 
 VOTING SECURITIES AND THEIR PRINCIPAL HOLDERS

  
  

As at March 31, 2021, there were issued and outstanding 61,705,484 Stapled Units. Holders of REIT Units are entitled to cast one
vote per REIT Unit held by them on each matter to be acted on by holders of REIT Units at the Meetings, and holders of GP Shares are entitled to cast one vote per GP Share held by them on each matter to be acted on by holders of GP Shares at the
Meetings. 
 As at March 31, 2021, the trustees, directors and officers of Granite are not aware of any Unitholders that
beneficially own, or exercise control or direction over, directly or indirectly, 10% or more of the issued and outstanding Stapled Units. 
 MATTERS TO BE ACTED UPON AT THE MEETINGS 
  

 
 Election of Trustees of
Granite REIT 
 The Granite REIT Declaration of Trust provides for a number of trustees to be fixed by the trustees from time to
time, subject to a minimum of three and a maximum of 15 trustees. The number of trustees is currently set at nine. The term of office of each currently-serving trustee expires at the time of the Meetings unless successors are not elected, in which
case the trustees remain in office until their successors are elected or appointed in accordance with applicable law and the Granite REIT Declaration of Trust. Nine persons are being nominated for election as trustees at this time. 

Management proposes to nominate, and the persons named in the accompanying forms of proxy will, in the absence of instructions to the
contrary, vote for the election as trustees of the nine persons whose names are set forth below (the “Proposed Trustees”). 

  
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 Management does not contemplate that any of the Proposed Trustees will be unable to
serve as a trustee. If, as a result of circumstances not now contemplated, any Proposed Trustee is unavailable to serve as a trustee, the proxy will be voted for the election of such other person or persons as Management may select. Each trustee
elected will hold office until the conclusion of the next annual general meeting of unitholders of Granite REIT, or until his/her respective successor is elected or appointed in accordance with applicable law and the Granite REIT Declaration of
Trust. 
 The Boards have adopted a majority voting policy (the “Majority Voting Policy”). Pursuant to the Majority
Voting Policy, a nominee for election as a trustee of Granite REIT or a director of Granite GP shall immediately tender his or her resignation to the Boards if, in an uncontested election, such nominee receives a greater number of votes
“withheld” from his or her election than votes “for” such election. The Majority Voting Policy provides that the Boards will consider a recommendation of the Compensation, Governance and Nominating Committee (the “CGN
Committee”) of the board of directors of Granite GP with respect to such resignation and determine whether to accept or reject such resignation within 90 days following the applicable election. The CGN Committee shall recommend
acceptance of the resignation, and the Board shall accept the resignation, except in situations where exceptional circumstances would warrant the trustee or director continuing to serve on the Board. Following the applicable Board’s decision on
the resignation, the Board will promptly disclose, via press release, its decision whether to accept the resignation offer, and if the Board decides to reject the resignation, the press release will fully state the reasons for that decision. 

The following tables set forth information with respect to each of the Proposed Trustees, including the number and value of securities
of Granite REIT and Granite GP beneficially owned, directly or indirectly, or over which control or direction is exercised by each such Proposed Trustee as at March 31, 2021. 

  
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 Peter
Aghar
  
 

  
 Residence: Ontario, Canada

 
 Age: 53
  

Status: Independent
  

Joined Board: June 15, 2017
  

Areas of Expertise:
 Real estate, capital markets, risk management,
audit/accounting, legal, strategy, business leadership and corporate governance
  
 2020 Annual
Meeting:
 Votes for:                  99.98%

Votes withheld:        0.02%
  
	 	  

Mr. Aghar is the founder and President of Crux Capital Corporation (“Crux”), a boutique value-add
real estate partner, developer and venture capital investor active across Canada. Since 2013, Crux and its partners have purchased, developed or have under development over five million square feet of commercial and residential property.
Mr. Aghar has a successful 25-year track record as a value-add investor on an institutional scale, having led more than 100 real estate transactions totaling far in
excess of $10 billion in value. Mr. Aghar’s transaction experience consists of investments in Canada, the United States and internationally, including equity investments, developments, joint ventures, structured and mezzanine debt,
open and closed end private equity funds as well as the privatization and launch of several public entities. Mr. Aghar was formerly President and Chief Investment Officer of KingSett Capital and a Managing Director of Institutional Accounts at
GE Capital Real Estate.
  
 Mr. Aghar is a board member of a
number of companies and investment funds as well a member of YPO.
  

	 	 Other Current Public Directorships
	 	
Since:

	 	 Pro Real Estate Investment Trust (TSX:PRV.UN)
	 	
June 9, 2015

	 	
Granite Securities Owned, Controlled or Directed, as at March 31, 2021

	 	Deferred Share
Units(1)
(#)	 	Stapled Units(2)
(#)	 	Total Deferred
Share Units and
Stapled Units
(#)	 	Total Value(3)
($)	 	 Multiple of

Base Retainer
	 	Ownership
Requirement
Met(4)
	 	 10,884
	 	 41,604
	 	 52,488
	 	 $4,011,133
	 	 32x
	 	
Yes

	 	Current Board / Committee Membership	 	 2020

Meeting
Attendance
	 	Attendance
Total
	 	 Board
	 	 12/12
	 	 
	 	 Investment Committee of Granite GP (Chair)
	 	 4/4
	 	
100%

  
 Notes: 

	(1)	 Deferred share units are issued under the Granite GP Non-Employee
Directors’ Deferred Share Unit Plan. See “Trustee / Director Compensation” for details. 

  

	(2)	 Represents Stapled Units held by Mr. Aghar and Crux, over which Mr. Aghar exercises control or direction.

  

	(3)	 Value means the dollar value of the deferred share units and Stapled Units owned, controlled or directed, based on the
closing price of the Stapled Units on the Toronto Stock Exchange (the “TSX”) on March 31, 2021, being $76.42. 

  

	(4)	 Trustees and directors are subject to a requirement that each trustee/director hold, within three years of becoming a
trustee and director, Stapled Units, deferred share units or a combination thereof having an aggregate market value of at least three times the amount of his or her annual Board retainer. 

  
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Table of Contents

													
	  
 Remco
Daal
  
 

 
  
 Residence: British Columbia, Canada

 
 Age: 55
  

Status: Independent
  

Joined Board: June 15, 2017
  

Areas of Expertise:
 Real estate, risk management, audit/accounting,
strategy, business leadership and compensation/human resources
  
 2020 Annual Meeting:

Votes for:                 99.98%

Votes withheld:        0.02%

 
	 	  

Mr. Daal has been President of Canadian Real Estate for QuadReal Property Group since its establishment in June 2016, responsible for the
company’s domestic operations, including investment, lending, development, and the management operation of the Canadian property portfolio. QuadReal is a global real estate company owned by the British Columbia Investment Management Corporation
(BCI), one of Canada’s largest institutional investors, and has managed assets valued at over $44 billion.
  

From 2000 to 2016, Mr. Daal worked at Bentall Kennedy Group, one of North America’s largest real estate investment advisors and Canada’s
largest property manager, most recently as President and Chief Operating Officer, from 2009 to 2016. Prior to joining Bentall Kennedy, Mr. Daal held senior positions at CIBC Development Corporation and a private Toronto-based development
company. Mr. Daal has over 30 years of experience in the real estate sector.
  

Mr. Daal holds a Bachelor of Commerce degree from Wilfrid Laurier University and a Master of Business Administration degree from European University.
He currently serves on the board of REALPAC, Parkbridge Lifestyle Communities Inc. as well as the Faculty Advisory Board of UBC’s Sauder School of Business.

	 	 Other Current Public Directorships
	 	
Since:

	 	 None
	 	 n/a

	 	
Granite Securities Owned, Controlled or Directed, as at March 31, 2021

	 	Deferred Share
Units(1)
(#)	 	Stapled Units
(#)	 	 Total Deferred
Share Units and

Stapled Units
(#)
	 	Total Value(2)
($)	 	 Multiple of

Base Retainer
	 	Ownership
Requirement
Met(3)
	 	 9,581
	 	 23,000
	 	 32,581
	 	 $2,489,840
	 	 19x
	 	
Yes

	 	Current Board / Committee Membership	 	 2020

Meeting
Attendance
	 	Attendance
Total
	 	 Board
	 	 12/12
	 	 
	 	 Audit Committee of Granite REIT and Granite GP
	 	 4/4
	 	100%

  
 Notes: 

	(1)	 Deferred share units are issued under the Granite GP Non-Employee
Directors’ Deferred Share Unit Plan. See “Trustee / Director Compensation” for details. 

  

	(2)	 Value means the dollar value of the deferred share units and Stapled Units owned, controlled or directed, based on the
closing price of the Stapled Units on the TSX on March 31, 2021, being $76.42. 

  

	(3)	 Trustees and directors are subject to a requirement that each trustee/director hold, within three years of becoming a
trustee and director, Stapled Units, deferred share units or a combination thereof having an aggregate market value of at least three times the amount of his or her annual Board retainer. 

  
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Table of Contents

																					
	  

Kevan Gorrie
  
 

  
 Residence: Ontario, Canada

 
 Age: 52
  

Status: Not Independent
  

Joined Board: August 1, 2018
  

Areas of Expertise:
 Real estate, capital markets, risk management, strategy and
business leadership
  
 2020 Annual Meeting: 

Votes for:               99.97%

Votes withheld:      0.03%
  
	 	  

Mr. Gorrie joined Granite as its President and Chief Executive Officer on August 1, 2018 and was appointed a Trustee and Director of Granite
effective August 1, 2018. With over 20 years of corporate real estate experience in Canada, the United States and Germany, Mr. Gorrie most recently served as the President and Chief Executive Officer of Pure Industrial Real Estate Trust
(‘‘PIRET’’) where he successfully grew and led the business until its strategic sale to Blackstone Property Partners and Ivanhoe ́ Cambridge in May, 2018.

 
 Prior to joining PIRET, Mr. Gorrie led the industrial business
for Oxford Properties Group, the real estate investment arm of a major Canadian pension fund, where he built a platform comprising 13 million square feet of income producing properties and development projects across major Canadian industrial
markets, encompassing acquisition, asset management, leasing, operations and development.
  

Mr. Gorrie is a graduate of the civil engineering program at the University of Toronto. He currently serves on the board of REALPAC and is a member
of the Institute of Corporate Directors (ICD.D).
  

	 	 Other Current Public Directorships
	 	
Since:

	 	 None
	 	 n/a

	 	
Granite Securities Owned, Controlled or Directed, as at March 31, 2021

	 	 Restricted
Stapled
Units(1)
 (#)
	 	 Performance
Stapled

Units(1)

(#)
	 	Stapled
Units
(#)	 	Total
Restricted
Stapled
Units/
Performance
Stapled Units
and
Stapled
Units
(#)	 	Total Value of
Restricted
Stapled
Units(2)
($)	 	Total Value of
Performance
Stapled
Units(2)
($)	 	 Total Value of
Stapled
Units(2)
 ($)
	 	Total
Value(2)
($)	 	Multiple of
Annual Base
Salary	 	
Ownership
 Requirement
Met(3)

	 	 27,496
	 	 31,076
	 	 59,339
	 	 117,911
	 	 $2,101,244
	 	 $2,374,828
	 	 $4,534,686
	 	 $9,010,759
	 	 11x
	 	
Yes

	 	Current Board / Committee Membership	 	 2020

Meeting
 Attendance
	 	
Attendance
 Total

	 	 Board
	 	 12/12
	 	
100%

  
 Notes: 

	(1)	 Restricted stapled units and performance stapled units are issued under Granite’s Executive Deferred Stapled Unit
Plan. See “Compensation Discussion and Analysis — Elements of Executive Compensation” for details. 

  

	(2)	 Value means the dollar value of the restricted stapled units, performance stapled units and Stapled Units owned,
controlled or directed, based on the closing price of the Stapled Units on the TSX on March 31, 2021, being $76.42. 

  

	(3)	 Mr. Gorrie is subject to a unit-based ownership requirement described below under “Compensation Discussion
and Analysis — President and CEO Stapled Unit Ownership Guidelines”. 

  
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 Fern
Grodner
  
 

  
 Residence: Washington State, U.S.A.

 
 Age: 67
  

Status: Independent
  

Joined Board: June 13, 2019
  

Areas of Expertise:
 Real estate, strategy and

business leadership
  

2020 Annual Meeting: 
Votes for:               99.97%

Votes withheld:      0.03%
  
	 	  

With over 25 years of corporate real estate experience, Ms. Grodner most recently served as Senior Manager, Global Real Estate and Facilities for
Amazon.com from 2014 through 2019. At Amazon.com, Ms. Grodner was responsible for large, complex real estate transactions in the Americas in which she oversaw transactions totaling in excess of US$4 billion. Her expertise also extends to
strategic planning, design, and construction of corporate space.
  

Prior to joining Amazon, Ms. Grodner spent seven years with JDS Uniphase Corporation overseeing all real estate aspects of an international portfolio
of office and manufacturing sites. From 2002 to 2007, Ms. Grodner served as Vice President, Corporate Real Estate, at Wachovia Corporation, responsible for the growth of Wachovia Securities locations in the Western United States. During the
early 2000 tech boom, Ms. Grodner served as Director of Real Estate for Relera, Inc. with a focus on co-location data centers. Ms. Grodner began her career with Bank of America Corporation, Corporate
Real Estate, where during her seven-year tenure she was responsible for site selection, transactions, design, and construction for the bank’s portfolio.
  

Ms. Grodner holds a Masters of Corporate Real Estate (MCR) and Senior Leader Corporate Real Estate (SLCR) designations from CoreNet Global, an
international non-profit corporate real estate association for executives who manage the real estate assets of large corporations. She also served on the CoreNet Global Bay Area Chapter board for four
years.
  
 Ms. Grodner graduated from Indiana University with
Honors with a degree in Psychology.
  

	 	 Other Current Public Directorships
	 	
Since:

	 	 None
	 	 n/a

	 	
Granite Securities Owned, Controlled or Directed, as at March 31, 2021

	 	 Deferred Share
Units(1)
 (#)
	 	 Stapled Units

(#)
	 	Total Stapled Units
and Deferred Share
Units
(#)	 	 Total Value(2)
 ($)
	 	Multiple of
Base Retainer	 	
Ownership
 Requirement

Met(3)

	 	3,314	 	—	 	3,314	 	$253,256	 	2x	 	Not yet required
	 	Current Board / Committee Membership	 	 2020

Meeting
Attendance(4)
	 	Attendance Total
	 	 Board
	 	 12/12
	 	 
	 	 Investment Committee of Granite GP
	 	 4/4
	 	100%

  
 Notes: 

	(1)	 Deferred share units are issued under the Granite GP Non-Employee
Directors’ Deferred Share Unit Plan. See “Trustee / Director Compensation” for details. 

  

	(2)	 Value means the dollar value of the deferred share units and Stapled Units owned, controlled or directed, based on the
closing price of the Stapled Units on the TSX on March 31, 2021, being $76.42. 

  

	(3)	 Trustees and directors are subject to a requirement that each trustee/director hold, within three years of becoming a
trustee and director, Stapled Units, deferred share units or a combination thereof having an aggregate market value of at least three times the amount of his or her annual Board retainer. Ms. Grodner was elected as trustee of Granite REIT and
director of Granite GP on June 13, 2019; accordingly, she will have until June 13, 2022 to meet the unit-based ownership guideline. 

  
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Kelly Marshall
  
 

  
 Residence: Ontario, Canada

 
 Age: 55
  

Status: Independent
  

Joined Board: June 15, 2017
  

Areas of Expertise:
 Real estate, capital markets, strategy, business leadership
and corporate governance
  
 2020 Annual Meeting:

Votes for:               99.98%

Votes withheld:      0.02%
  
	 	  

From November 2017 to September 2020, Mr. Marshall served as the Executive Vice President of Strategic Partnerships at Ontario Municipal
Employee Retirement System (‘‘OMERS’’) where he led the growth of the pension fund’s strategic partnerships, including its relationships with third-party organizations, co-investors
and other finance partners. Prior to OMERS, Mr. Marshall served as Managing Partner, Corporate Finance at Brookfield Asset Management Inc. (‘‘Brookfield Management’’) where he was responsible for the global corporate finance
activities and oversaw all financings in each core region and business line. Throughout his 16 years with Brookfield Management, he completed in excess of US$100 billion in debt and equity transactions. Those transactions involved corporate and
asset level issuances in North and South America, Europe, UK, Australia and India for all of Brookfield Management’s real estate, renewable power and infrastructure businesses.

 
 Mr. Marshall has over 25 years of finance experience, which was
initially developed working for Olympia and York Developments Ltd. at Canary Wharf. This was followed by periods of employment with Citibank, in its real estate asset management group, and then two prominent U.S.-based real estate finance investment
companies, Fortress Investment Group and Lonestar Opportunity Fund.
  

Mr. Marshall graduated from Wilfrid Laurier University with an Honours degree in Business Administration.

 

	 	 Other Current Public Directorships
	 	
Since:

	 	 None
	 	 n/a

	 	
Granite Securities Owned, Controlled or Directed, as at March 31, 2021

	 	Deferred Share
Units(1)
(#)	 	Stapled Units
(#)	 	 Total Stapled

Units and
Deferred Share
Units
(#)
	 	Total Value(2)
($)	 	Multiple of
Base Retainer	 	
Ownership
Requirement
 Met(3)

	 	13,895	 	—	 	13,895	 	$1,061,856	 	5x	 	Yes
	 	Current Board / Committee Membership	 	 2020

Meeting
Attendance
	 	Attendance Total
	 	 Board (Chair)
	 	 12/12
	 	 
	 	 CGN Committee of Granite GP (Chair) (4)
	 	 N/A(4)
	 	 
	 		 	 
	 	 	 Investment Committee of Granite GP
	 	 4/4
	 	100%

  
 Notes: 

	(1)	 Deferred share units are issued under the Granite GP Non-Employee
Directors’ Deferred Share Unit Plan. See “Trustee / Director Compensation” for details. 

  

	(2)	 Value means the dollar value of the deferred share units and Stapled Units owned, controlled or directed, based on the
closing price of the Stapled Units on the TSX on March 31, 2021, being $76.42. 

  

	(3)	 Trustees and directors are subject to a requirement that each trustee/director hold, within three years of becoming a
trustee and director, Stapled Units, deferred share units or a combination thereof having an aggregate market value of at least three times the amount of his or her annual Board retainer. 

 

	(4)	 Effective January 1, 2021, Mr. Marshall was appointed Chair of the CGN Committee of Granite GP.

  
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Table of Contents

													
	  

Al Mawani
  
 

  
 Residence: Ontario, Canada

 
 Age: 69
  

Status: Independent
  

Joined Board: June 15, 2017
  

Areas of Expertise:
 Real estate, capital markets, risk management,
audit/accounting, strategy, business leadership and corporate governance
  
 2020 Annual
Meeting:
 Votes for:               99.93%

Votes withheld:      0.07%
  
	 	  

Mr. Mawani is currently a Principal of Exponent Capital Partners Inc., a private equity investor and real estate advisory firm. Mr. Mawani has
over 35 years of experience in the commercial real estate industry. His 15-year c-suite experience includes: 11 years as Executive Vice President & Chief
Financial Officer of then TSX-listed Oxford Properties Group from 1989 to 2001, President & Chief Executive Officer of TSX-listed Calloway/ SmartCentres REIT
from 2011 to 2013, and President & CEO of privately-owned Rodenbury Investments in 2015 and 2016. He was an executive at a private equity investment firm from 2002 to 2004.

 
 Mr. Mawani has served on many
TSX-listed boards since 2002 including serving as chair of audit committees and governance and compensation committees. Mr. Mawani has also been a director of Extendicare Inc. since December 2017 and
a trustee of First Capital Real Estate Investment Trust (formerly First Capital Realty Inc.) since May 2018.
  

Mr. Mawani is a CPA and CA and has a Master of Business Administration from University of Toronto and a Masters in Law from York University.

 

	 	 Other Current Public Directorships
	 	
Since:

	 	 Extendicare Inc. (TSX:EXE) – Director and Chair of
Investment Committee and member of Audit Committee
	 	 December 1,

2017

	 	 Extendicare Inc. (TSX:EXE) – Member of Human Resources
Committee
	 	
January 2020

	 	 First Capital Real Estate Investment Trust (TSX:FCR.UN)
–Trustee and Chair of Audit Committee
	 	
May 29, 2018

	 	 First Capital Real Estate Investment Trust (TSX:FCR.UN) –
Member of Compensation Committee
	 	 January 2020

	 	
Granite Securities Owned, Controlled or Directed, as at March 31, 2021

	 	Deferred Share
Units(1)
(#)	 	Stapled Units
(#)	 	Total Stapled Units
and Deferred Share
Units
(#)	 	Total Value(2)
($)	 	Multiple of
Base Retainer	 	
Ownership
Requirement
 Met(3)

	 	 10,582
	 	 8,000
	 	 18,582
	 	 $1,420,036
	 	 11x
	 	
Yes

	 	Current Board / Committee Membership	 	 2020

Meeting
Attendance
	 	Attendance
Total
	 	 Board
	 	 12/12
	 	 
	 	 Audit Committee of Granite REIT and Granite GP
	 	 4/4
	 	 
	 		 	 
	 	 	 CGN Committee of Granite GP (Chair)(4)
	 	 5/5
	 	
100%

  
 Notes: 

	(1)	 Deferred share units are issued under the Granite GP Non-Employee
Directors’ Deferred Share Unit Plan. See “Trustee / Director Compensation” for details. 

  

	(2)	 Value means the dollar value of the deferred share units and Stapled Units owned, controlled or directed, based on the
closing price of the Stapled Units on the TSX on March 31, 2021, being $76.42. 

  

	(3)	 Trustees and directors are subject to a requirement that each trustee/director hold, within three years of becoming a
trustee and director, Stapled Units, deferred share units or a combination thereof having an aggregate market value of at least three times the amount of his or her annual Board retainer. 

 

	(4)	 Effective January 1, 2021, Mr. Mawani resigned from the CGN Committee due to work commitments and ceased to
be Chair of the CGN Committee of Granite GP. 

  
 - 14 - 

Table of Contents

													
	  
 Gerald
Miller
  
 

  
 Residence: British Columbia, Canada

 
 Age: 65
  

Status: Independent
  

Joined Board: June 30, 2011(1)

 
 Areas of Expertise:

Risk management, audit/accounting, strategy, business leadership, compensation/human resources and corporate governance

 
 2020 Annual Meeting:

Votes for:               99.98%

Votes withheld:      0.02%
  
	 	  

Mr. Miller was Executive Vice President, Finance and Chief Financial Officer of West Fraser Timber Co. Ltd. (‘‘West
Fraser’’) from January 2009 until his retirement in July 2011. Mr. Miller has been a director of West Fraser since April 2012. From February 2007 to December 2008, Mr. Miller’s principal occupation was Executive Vice
President, Operations of West Fraser. Prior to that, since 1986, Mr. Miller held several other senior finance, administration and operations offices at West Fraser, including Vice-President, Corporate Controller; Vice-President, Administration;
and Executive Vice-President, Pulp and Paper.
  
 Mr. Miller is
an experienced CPA, CA and has been a member of the Chartered Professional Accountants of British Columbia and the Chartered Professional Accountants of Canada for over 40 years. Prior to joining West Fraser in 1986, he was a Senior Audit and Tax
Manager with one of the major Canadian Chartered Professional Accounting firms.
  

Mr. Miller holds a Bachelor of Commerce degree from the University of British Columbia.

 

	 	 Other Current Public Directorships
	 	
Since:

	 	 West Fraser Timber Co. Ltd. (TSX/NYSE:WFG) – Director and
member of the Audit Committee and Health, Safety and   Environment Committee
	 	 April 19,
2012

	 	
Granite Securities Owned, Controlled or Directed, as at March 31, 2021

	 	Deferred Share
Units(2)
(#)	 	Stapled Units
(#)	 	Total Stapled Units
and Deferred Share
Units
(#)	 	Total Value(3)
($)	 	 Multiple of

Base Retainer
	 	
Ownership
Requirement
 Met(4)

	 	 22,576
	 	 4,500
	 	 27,076
	 	 $2,069,148
	 	 16x
	 	
Yes

	 	Current Board / Committee Membership	 	 2020

Meeting
Attendance
	 	Attendance
Total
	 	 Board
	 	 12/12
	 	 
	 	 Audit Committee of Granite REIT and Granite GP (Chair of
each)
	 	 4/4
	 	100%

  
 Notes: 

	(1)	 Refers to time served as a trustee of Granite REIT, a director of Granite GP and a director of their predecessor,
Granite Co. 

  

	(2)	 Deferred share units were issued under the Non-Employee Director Share-Based
Compensation Plan of Granite Co. (prior to the 2013 Arrangement) and the Granite GP Non-Employee Directors’ Deferred Share Unit Plan (after completion of the 2013 Arrangement). See “Trustee /
Director Compensation” for details. 

  

	(3)	 Value means the dollar value of the deferred share units and Stapled Units owned, controlled or directed, based on the
closing price of the Stapled Units on the TSX on March 31, 2021, being $76.42. 

  

	(4)	 Trustees and directors are subject to a requirement that each trustee/director hold, within three years of becoming a
trustee and director, Stapled Units, deferred share units or a combination thereof having an aggregate market value of at least three times the amount of his or her annual Board retainer. 

  
 - 15 - 

Table of Contents

													
	  

Sheila A. Murray
  
 

  
 Residence: Ontario, Canada

 
 Age: 65
  

Status: Independent
  

Joined Board: June 13, 2019
  

Areas of Expertise:
 Capital markets, risk management, legal, strategy, business
leadership, compensation/human resources and corporate governance
  
 2020 Annual
Meeting:
 Votes for:               99.98%

Votes withheld:      0.02%
  
	 	  

Ms. Murray is the former President of CI Financial Corp., a position she held from 2016-2019. Previously, she had been Executive Vice-President,
General Counsel and Secretary since 2008, following a 25-year career at Blake, Cassels & Graydon LLP, where she practiced securities law with an emphasis on mergers and acquisitions, corporate finance
and corporate reorganizations. Ms. Murray played a key role in directing the operations and setting corporate strategy for CI Financial Corp. and its operating companies, including CI Investments Inc. and Assante Wealth Management. Her role
included leading CI’s mentoring program, which fosters the advancement of high-potential female employees.
  

Ms. Murray is past Chair of the Dean’s Council at Queen’s University Law School, and taught Securities Regulation at Queen’s
University last year and has taught Securities Regulation and Corporate Finance at the University of Toronto’s Global Professional Master of Laws in Business Law Program for several years.

 
 Ms. Murray is Chair of the Board of Directors of Teck Resources
Limited, a director of CI Financial Corp. and a director of BCE and Bell Canada and has been a director of the SickKids Foundation, the Toronto Symphony Foundation and a director of a number of other private and public companies.

 
 Ms. Murray received her Bachelor of Commerce and Bachelor of Laws
degrees from Queen’s University.
  

	 	 Other Current Public Directorships
	 	
Since:

	 	 CI Financial Corp. (TSX:CIX)
	 	 June 18,
2018

	 	 Teck Resources Limited (TSX/NYSE:TECK) –
Director
	 	 April 25,
2018

	 	 Teck Resources Limited (TSX/NYSE:TECK) – Board
Chair
	 	 September 4, 2019(1)

	 	  
 BCE Inc. –
(TSX/NYSE:BCE) – Director and member of the Management Resources and Compensation Committee and the   Risk and Pension Fund Committee
  
	 	  

May 2020

	 	
Granite Securities Owned, Controlled or Directed, as at March 31, 2021

	 	Deferred Share
Units(2)
(#)	 	Stapled Units
(#)	 	Total Stapled Units
and Deferred Share
Units
(#)	 	Total Value(3)
($)	 	 Multiple of

Base Retainer
	 	
Ownership
Requirement
 Met(4)

	 	 4,629
	 	 —
	 	 4,629
	 	 $353,748
	 	 2x
	 	 Not
yet required

	 	Current Board / Committee Membership	 	 2020

Meeting
Attendance
	 	Attendance
Total
	 	 Board
	 	 12/12
	 	 
	 		 	 
	 	 	 CGN Committee of Granite GP
	 	 5/5
	 	100%

  
 Notes: 

	(1)	 Ms. Murray was appointed Acting Board Chair of Teck Resources Limited on September 4, 2019, and was appointed
Board Chair effective February 7, 2020. 

  

	(2)	 Deferred share units are issued under the Granite GP Non-Employee
Directors’ Deferred Share Unit Plan. See “Trustee / Director Compensation” for details. 

  

	(3)	 Value means the dollar value of the deferred share units and Stapled Units owned, controlled or directed, based on the
closing price of the Stapled Units on the TSX on March 31, 2021, being $76.42. 

  

	(4)	 Trustees and directors are subject to a requirement that each trustee/director hold, within three years of becoming a
trustee and director, Stapled Units, deferred share units or a combination thereof having an aggregate market value of at least three times the amount of his or her annual Board retainer. Ms. Murray was elected as trustee of Granite REIT and
director of Granite GP on June 13, 2019; accordingly she will have until June 13, 2022 to meet the unit-based ownership guideline. 

  
 - 16 - 

Table of Contents

													
	  
 Jennifer
Warren
  
 

  
 Residence: New York, U.S.A.

 
 Age: 56
  

Status: Independent
  

Joined Board: June 14, 2018
  

Areas of Expertise:
 Real estate, risk management, legal, strategy, business
leadership, compensation/human resources and corporate governance
  
 2020 Annual
Meeting:
 Votes for:               99.75%

Votes withheld:      0.25%
  
	 	  

Jennifer Warren is CEO Issuer Services, North America at Computershare, a global leader in diversified financial, corporate governance and stakeholder
communication for public and private companies. Ms. Warren joined Computershare in December 2018 as Head of U.S. Issuer Services. Prior to this role, Ms. Warren was with Canadian Imperial Bank of Commerce (from 2006 to 2017), first as
General Counsel (Canada) and finally as Managing Director and Head, U.S. Region and President and CEO of CIBC World Markets Corp.
  

Ms. Warren began her career as a business lawyer with Blake, Cassels & Graydon LLP and from there joined Rogers Communications Inc,
where she worked for a decade in increasingly senior roles as a member of Rogers Cable management and the RCI deal team.
  

Ms. Warren has been a director of a number of U.S. and Canadian private companies. Today, she sits on the board of Rogers Bank, a subsidiary of
Rogers Communications Inc. and the board of United Way of New York City. She is also an Entrepreneur Mentor at the Fintech Innovation Lab at the Partnership for New York City.

 
 Ms. Warren received her Bachelor of Science and Bachelor of Laws
from the University of Toronto.
  

	 	 Other Current Public Directorships
	 	
Since:

	 	 None
	 	 n/a

	 	
Granite Securities Owned, Controlled or Directed, as at March 31, 2021

	 	Deferred Share
Units(1)
(#)	 	Stapled Units
(#)	 	 Total Stapled

Units and
Deferred Share
Units
(#)
	 	Total Value(2)
($)	 	 Multiple of

Base Retainer
	 	
Ownership
Requirement
 Met(3)

	 	 6,726
	 	 —
	 	 6,726
	 	 $514,001
	 	 4x
	 	
Yes

	 	Current Board / Committee Membership	 	 2020

Meeting
Attendance
	 	Attendance
Total
	 	 Board
	 	 12/12
	 	 
	 	 CGN Committee of Granite GP
	 	 5/5
	 	100%

  
 Notes: 

	(1)	 Deferred share units are issued under the Granite GP Non-Employee
Directors’ Deferred Share Unit Plan. See “Trustee / Director Compensation” for details. 

  

	(2)	 Value means the dollar value of the deferred share units and Stapled Units owned, controlled or directed, based on the
closing price of the Stapled Units on the TSX on March 31, 2021, being $76.42. 

  

	(3)	 Trustees and directors are subject to a requirement that each trustee/director hold, within three years of becoming a
trustee and director, Stapled Units, deferred share units or a combination thereof having an aggregate market value of at least three times the amount of his or her annual Board retainer. 

  
 - 17 - 

Table of Contents

 To the knowledge of Granite, there are no arrangements or understandings between any
Proposed Trustee and any other person or company, except the trustees, directors and executive officers of Granite acting solely in such capacity, pursuant to which any Proposed Trustee is to be elected as a trustee of Granite REIT or as a director
of Granite GP. 
 Board Skills Matrix 

The following chart demonstrates the relevant skills and experience of each Proposed Trustee for election as a trustee of Granite REIT:

  

																			
	Name	 	
Real        

Estate        
	 	Capital        
Markets       
 	 	Risk        
Management       
 	 	
Audit/        

Accounting        
	 	Legal        	 	Strategy        	 	Business        
Leadership       
 	 	    Compensation/        
Human 
Resources      	 	
Corporate         

  Governance         

	 	 	 	 	 	 	 	 	 	 
	
Peter Aghar
	 	✓	 	✓	 	✓	 	✓	 	✓	 	✓	 	✓	 	 	 	  ✓
	 	 	 	 	 	 	 	 	 	 
	
Remco Daal
	 	✓	 	 	 	✓	 	✓	 	 	 	✓	 	✓	 	  ✓	 	 
	 	 	 	 	 	 	 	 	 	 
	
Kevan Gorrie
	 	✓	 	✓	 	✓	 	 	 	 	 	✓	 	✓	 	 	 	 
	 	 	 	 	 	 	 	 	 	 
	
Fern Grodner
	 	✓	 	 	 	 	 	 	 	 	 	✓	 	✓	 	 	 	 
	 	 	 	 	 	 	 	 	 	 
	
Kelly Marshall
	 	✓	 	✓	 	 	 	 	 	 	 	✓	 	✓	 	 	 	  ✓
	 	 	 	 	 	 	 	 	 	 
	
Al Mawani
	 	✓	 	✓	 	✓	 	✓	 	 	 	✓	 	✓	 	 	 	  ✓
	 	 	 	 	 	 	 	 	 	 
	
Gerald Miller
	 	 	 	 	 	✓	 	✓	 	 	 	✓	 	✓	 	  ✓	 	  ✓
	 	 	 	 	 	 	 	 	 	 
	
Sheila A. Murray
	 	 	 	✓	 	✓	 	 	 	✓	 	✓	 	✓	 	  ✓	 	  ✓
	 	 	 	 	 	 	 	 	 	 
	
Jennifer Warren
	 	✓	 	 	 	✓	 	 	 	✓	 	✓	 	✓	 	  ✓	 	  ✓

 Board Tenure 

As detailed below in “— CGN Committee of Granite GP — Term Limits” Granite believes that the composition of the
Board should reflect a balance between experience and knowledge, on the one hand, and the need for renewal and fresh perspectives, on the other hand. The average tenure of the Proposed Trustee’s is 3.9 years. The following chart shows the
tenure of the Board as of April 12, 2021: 
  
 

 
  
 Notes: 

	(1)	 Independent trustees/directors only. Excludes Mr. Gorrie, Granite’s President and CEO. See “— Board
of Trustees of Granite REIT and Board of Directors of Granite GP” below for details. 

  
 - 18 - 

Table of Contents

 Cease Trade Order and Bankruptcies 

To the knowledge of Granite, as at March 31, 2021, none of the Proposed Trustees: 

 

	 	(a)	 is or has been within the last 10 years, a director, chief executive officer or chief financial officer of any company
(including Granite) that was subject to a cease trade order or similar order or an order that denied the relevant company access to any exemption under securities legislation, that was in effect for a period of more than 30 consecutive days:

  

	 	(i)	 that was issued while the Proposed Trustee was acting in the capacity as director, chief executive officer or chief
financial officer; or 

  

	 	(ii)	 that was issued after the Proposed Trustee ceased to be a director, chief executive officer or chief financial officer
and which resulted from an event that occurred while that person was acting in the capacity as director, chief executive officer or chief financial officer; 

  

	 	(b)	 is or has been within the last 10 years, a director or executive officer of any company (including Granite) that,
while that person was acting in that capacity, or within a year of that person ceasing to act in that capacity, became bankrupt, made a proposal under any legislation relating to bankruptcy or insolvency or was subject to or instituted any
proceedings, arrangement or compromise with creditors or had a receiver, receiver manager or trustee appointed to hold its assets; 

  

	 	(c)	 has, within the last 10 years, become bankrupt, made a proposal under any legislation relating to bankruptcy or
insolvency, or become subject to or instituted any proceedings, arrangement or compromise with creditors, or had a receiver, receiver manager or trustee appointed to hold the Proposed Trustee’s assets; or 

 

	 	(d)	 has been subject to: 

  

	 	(i)	 any penalties or sanctions imposed by a court relating to securities legislation or by a securities regulatory
authority or has entered into a settlement agreement with a securities regulatory authority, or 

  

	 	(ii)	 any other penalties or sanctions imposed by a court or regulatory body that would likely be considered important to a
reasonable securityholder in deciding whether to vote for a Proposed Trustee. 

 Election of Directors of Granite GP

 Under the articles of Granite GP, the board of directors is to consist of a minimum of three directors and the board is
authorized to determine the number of directors of Granite GP by resolution from time to time. The number of directors of Granite GP is currently set at nine, and accordingly, nine persons are being nominated for election as directors of Granite GP
at this time. The term of office of each currently-serving director expires at the time of the Meetings unless successors are not elected, in which case the directors remain in office until their successors are elected or appointed in accordance
with applicable law and the articles of Granite GP. 
 Management proposes to nominate, and the persons named in the accompanying
forms of proxy will, in the absence of instructions to the contrary, vote for the election as directors of the nine persons who are Proposed Trustees and whose names are set forth above under the heading “— Election of Trustees of
Granite REIT” (the “Proposed Directors”). See “— Election of Trustees of Granite REIT” for details. 

  
 - 19 - 

Table of Contents

 Management does not contemplate that any of the Proposed Directors will be unable to
serve as a director. If, as a result of circumstances not now contemplated, any Proposed Director is unavailable to serve as a director, the proxy will be voted for the election of such other person or persons as Management may select. Each director
elected will hold office until immediately before the election of directors at the next annual general meeting of shareholders of Granite GP, or until his/her respective successor is elected or appointed in accordance with applicable law and the
articles of Granite GP. 
 The table in the section entitled “— Election of Trustees of Granite REIT” sets
forth information with respect to each of the Proposed Directors, including the number and value of securities of Granite REIT and Granite GP beneficially owned or over which control or direction is exercised, directly or indirectly, by each such
Proposed Director, as at March 31, 2021. 
 To the knowledge of Granite, there are no arrangements or understandings between any
Proposed Director and any other person or company, except the trustees, directors and executive officers of Granite acting solely in such capacity, pursuant to which any Proposed Director is to be elected as a director of Granite GP or a trustee of
Granite REIT. 
 Board Skills Matrix 

See “— Election of Trustees of Granite REIT — Board Skills Matrix” for details that are also
applicable to the Proposed Directors. 
 Cease Trade Orders and Bankruptcies 

See “— Election of Trustees of Granite REIT — Cease Trade Orders and Bankruptcies” for details that
are also applicable to the Proposed Directors. 
 Re-appointment of Auditor of Granite REIT

 At the Meetings, Unitholders will be asked to re-appoint Deloitte LLP as the
independent external auditor (the “Auditor”) of Granite REIT, based on the recommendation of the Audit Committee of Granite REIT and the board of trustees. Under the Granite REIT Declaration of Trust, the trustees have the authority
to determine the Auditor’s remuneration. 
 The board of trustees, through the Audit Committee of Granite REIT, have negotiated
the Auditor’s remuneration on an arm’s length basis, with reference to the resources and time required for, and the complexity of, the work undertaken by the Auditor. Factors considered in connection with the foregoing include
Granite’s listing on the New York Stock Exchange (the “NYSE”) and its significant operations in the United States and Europe. The Boards believe that the remuneration payable to the Auditor is within market norms and is
reasonable in the circumstances. A summary of the fees paid to the Auditors for each of the last two financial years can be found in Granite REIT’s Annual Information Form dated March 3, 2021. 

The persons named in the accompanying forms of proxy will, in the absence of instructions to the contrary, vote for the re-appointment of Deloitte LLP as the Auditor of Granite REIT to hold office until the next annual general meeting of unitholders of Granite REIT. 

Representatives of Deloitte LLP are expected to attend the Meetings, will have an opportunity to make a statement if they so desire, and
are expected to be available to respond to appropriate questions. 

  
 - 20 - 

Table of Contents

 Re-appointment of Auditor of Granite GP 

At the Meetings, Unitholders will be asked to re-appoint Deloitte LLP as the Auditor of Granite
GP, based on the recommendation of the Audit Committee of Granite GP and the board of directors. 
 The persons named in the
accompanying forms of proxy will, in the absence of instructions to the contrary, vote for the re-appointment of Deloitte LLP as the Auditor of Granite GP to hold office until the next annual general meeting
of shareholders of Granite GP and for authorizing the directors to fix the Auditor’s remuneration. 
 Representatives of
Deloitte LLP are expected to attend the Meetings, will have an opportunity to make a statement if they so desire, and are expected to be available to respond to appropriate questions. 

Advisory Vote on Granite’s Approach to Executive Compensation 

At the Meetings, Unitholders will be asked to consider, and if thought advisable, to pass a
non-binding advisory resolution (the “Say-on-Pay Resolution”) on Granite’s approach to executive
compensation, which is described under “Compensation Discussion and Analysis” in this Circular. 
 Pay for performance is a
core principle of Granite’s approach to executive compensation. Granite’s compensation plan is designed to attract, motivate and retain high-achieving executives who are dedicated to the creation, protection and growth of long-term
Unitholder value and to recognize and reward the successful execution of Granite’s annual business and strategic objectives. 

As an advisory vote, the results will not be binding, but will be taken into account by the CGN Committee and the Board when considering
Granite’s compensation philosophy. Granite will disclose the voting results of the Say-on-Pay Resolution as a part of its report on voting results for Meetings.
Details about Granite’s executive compensation program are set out in this Circular, including in the “Compensation Discussion and Analysis” section.  

The form of Say-on-Pay Resolution to be submitted to the
Unitholders at the Meeting will be substantially in the form below: 
 “Resolved, on an advisory basis, and not to diminish the
role and responsibilities of the Board of Directors of Granite REIT Inc., that the Unitholders accept the approach to executive compensation disclosed in the joint Management Information Circular / Proxy Statement delivered in advance of the
2021 annual general meeting of unitholders of Granite Real Estate Investment Trust and the annual general meeting of shareholders of Granite REIT Inc.” 

The persons named in the accompanying forms of proxy will, in the absence of instructions to the contrary, vote for the non-binding advisory resolution on Granite’s approach to executive compensation. 
 Review
and Consideration of Financial Statements 
 Management, on behalf of the trustees of Granite REIT and the directors of Granite
GP, will submit to the Unitholders at the Meetings the audited combined financial statements of Granite REIT and Granite GP for the financial year ended December 31, 2020 and the auditor’s report of Deloitte LLP thereon, but no vote by the
Unitholders with respect thereto is required or proposed to be taken. The audited combined financial statements and auditor’s report of Deloitte LLP are included in 

  
 - 21 - 

Table of Contents

 
Granite’s 2020 annual report, which is available on Granite’s website at www.granitereit.com and on the Canadian Securities Administrators’ System for Electronic Document Analysis
and Retrieval (“SEDAR”) at www.sedar.com. 
 INTERESTS OF CERTAIN PERSONS IN THE
MATTERS TO BE CONSIDERED AT THE MEETINGS 
  
  

Except as otherwise disclosed in this Circular, Management is not aware of any person who has been a trustee, director or executive
officer of Granite at any time since the beginning of Granite’s last completed financial year or any nominee for election as a trustee or director, nor any associate or affiliate of any of the foregoing persons, having any material interest,
direct or indirect, by way of beneficial ownership of securities or otherwise, in any matter to be acted upon at the Meetings other than the election of trustees and directors. 

TRUSTEE / DIRECTOR COMPENSATION 

 
  

Granite’s Board has approved a trustee and director compensation program that rewards
non-executive trustees and directors (for purposes of this section, “Directors”) for the time and effort they are expected to devote to Granite matters. This compensation covers activities of
Directors both as trustees of Granite REIT and as directors of Granite GP. 
 The program emphasizes the alignment of Directors with
the interests of Unitholders. Directors (other than Mr. Gorrie, who, as President and CEO, is subject to a unit-based ownership requirement described below under “Compensation Discussion and Analysis — President and CEO
Stapled Unit Ownership Guidelines”) are subject to a unit-based ownership requirement that they hold, within three years of becoming a Director, Stapled Units, deferred share units or a combination thereof having an aggregate market value of at
least three times the amount of their annual Board retainer. Ms. Grodner and Ms. Murray were elected to the Boards on June 13, 2019 and are not required to meet the unit-based ownership requirement until June 13, 2022. Each of
the other Directors currently surpasses this ownership requirement. See “Matters to be Acted upon at the Meetings — Election of Trustees of Granite REIT” above for the total number and value of Stapled Units and deferred share
units held by each Director proposed to be elected at the Meetings. 

  
 - 22 - 

Table of Contents

 The following chart sets out the standard compensation arrangements for Directors for
the year ended December 31, 2020: 
  

			
	  Position	 	  Annual Retainer and Fees
  ($)
 

	 	 
	
Chairman
	 	 175,000(1)

	 	 
	
Director-at-large
	 	 125,000(1)

	 	 
	
Audit Committee Chair
	 	
35,000

	 	 
	
CGN Committee Chair
	 	
25,000

	 	 
	
Investment Committee Chair
	 	
25,000

	 	 
	
Per meeting fee (in person or teleconference)
	 	
Nil

	 	 
	
Air travel fee per meeting, if any
	 	 3,000(2)

	 	 
	 Travel
expenses per meeting
	 	 Reimbursed in accordance

with Granite’s policy

  
 Notes: 

	(1)	 Pursuant to Granite’s trustee and director compensation program, one-half
of this amount is paid in deferred share units. Grants are made yearly in advance, and vest as to one quarter of such grants at the end of each quarter of the year in which they are made (except for the second quarter, for which grants vest on the
date of the annual meeting of Unitholders), provided that the grantee was a non-employee Director at any time during the applicable quarter. See also Note 2 under “— Director Compensation
Table”. 

  

	(2)	 The air travel fee per meeting only applies for those who must travel more than two hours by air to attend a meeting.

 Effective January 1, 2021 the Boards adjusted the compensation of the Chair and the chairs of the CGN
Committee and the Investment Committee to more appropriately reflect Granite’s increased market capitalization and to reflect the time and commitment provided by such Directors. The following chart sets out the revised compensation arrangements
for Directors effective January 1, 2021: 
  

			
	  Position	 	  Annual Retainer and Fees
  ($)
 

	 	 
	
Chairman
	 	 210,000(1)

	 	 
	
Director-at-large
	 	 125,000(1)

	 	 
	
Audit Committee Chair
	 	
35,000

	 	 
	
CGN Committee Chair
	 	 35,000(2)

	 	 
	
Investment Committee Chair
	 	
35,000

	 	 
	
Per meeting fee (in person or teleconference)
	 	
Nil

	 	 
	
Air travel fee per meeting, if any
	 	 3,000(3)

	 	 
	 Travel
expenses per meeting
	 	 Reimbursed in accordance

with Granite’s policy

  
 Notes: 

	(1)	 Pursuant to Granite’s trustee and director compensation program, one-half
of this amount is paid in deferred share units. Grants are made yearly in advance, and vest as to one quarter of such grants at the end of each quarter of the year in which they are made (except for the second quarter, for which grants vest on the
date of the annual meeting of Unitholders), provided that the grantee was a non-employee Director at any time during the applicable quarter. See also Note 2 under “— Director Compensation
Table”. 

  

	(2)	 For 2021 Mr. Marshall has waived his fee as Chair of the CGN Committee. 

 

	(3)	 The air travel fee per meeting only applies for those who must travel more than two hours by air to attend a meeting.

  
 - 23 - 

Table of Contents

 Director Compensation Table 

The following tables provide information regarding compensation earned by individuals who were Directors during the financial year ended
December 31, 2020, other than Mr. Gorrie, who was an NEO and whose compensation is discussed below under “Compensation Discussion and Analysis” and “Elements of Executive Compensation —Summary Compensation
Table”. 
  

															
	 	 	 	 	 	 	 	 
	Name	 	Fees
Earned
($)(1)	 	Share-
Based
Awards
($)(2)	 	Option-
Based
Awards
($)	 	Non-Equity
Incentive Plan
Compensation
($)	 	Pension
Value
($)(3)	 	All Other
Compensation
($)(4)	 	Total
($)
	 	 	 	 	 	 	 	 
	
Peter Aghar
	 	 $87,500
	 	 $62,500
	 	 -----
	 	 -----
	 	 -----
	 	 $15,000
	 	 $165,000

	 	 	 	 	 	 	 	 
	
Remco Daal
	 	 $65,500
	 	 $62,500
	 	 -----
	 	 -----
	 	 -----
	 	 $15,000
	 	 $143,000

	 	 	 	 	 	 	 	 
	
Fern Grodner
	 	 $65,500
	 	 $62,500
	 	 -----
	 	 -----
	 	 -----
	 	 $15,000
	 	 $143,000

	 	 	 	 	 	 	 	 
	
Kelly Marshall
	 	 $87,500
	 	 $87,500
	 	 -----
	 	 -----
	 	 -----
	 	 $15,000
	 	 $190,000

	 	 	 	 	 	 	 	 
	
Al Mawani
	 	 $87,500
	 	 $62,500
	 	 -----
	 	 -----
	 	 -----
	 	 $15,000
	 	 $165,000

	 	 	 	 	 	 	 	 
	
Gerald Miller
	 	 $100,500
	 	 $62,500
	 	 -----
	 	 -----
	 	 -----
	 	 $15,000
	 	 $178,000

	 	 	 	 	 	 	 	 
	
Sheila A. Murray
	 	 $62,500
	 	 $62,500
	 	 -----
	 	 -----
	 	 -----
	 	 $15,000
	 	 $140,000

	 	 	 	 	 	 	 	 
	
Jennifer Warren
	 	 $62,500
	 	 $62,500
	 	 -----
	 	 -----
	 	 -----
	 	 $15,000
	 	 $140,000

  
 Notes: 

	(1)	 Of the aggregate fees earned, the following Directors elected to receive, in lieu of cash in the following
specified amounts, additional deferred share units under the Director Plans (defined in Note (2)): Mr. Aghar, $87,500; Mr. Daal, $62,500; Ms. Grodner, $nil; Mr. Marshall, $87,500; Mr. Mawani, $87,500; Mr. Miller, $nil;
Ms. Murray, $62,500; and Ms. Warren, $62,500. These deferred share unit amounts are not included in the figures shown in the “Share-Based Awards” column above, which represent amounts that are required to be paid in deferred
share units pursuant to Granite’s trustee and director compensation program. 

  

	(2)	 Effective November 3, 2003, Granite Co. established a deferred share unit plan for
non-employee directors. In connection with the 2013 Arrangement, Granite GP adopted a similar non-employee directors’ deferred unit plan and Granite Co.’s plan
was amended (these plans, collectively, the “Director Plans”). The Director Plans provide for a deferral of up to 100% of each Director’s total annual cash remuneration from Granite Co. and Granite GP, as applicable, at
specified levels elected by each Director, until such Director ceases to be a director (or officer or employee) of Granite Co. or Granite GP, as applicable, or of any affiliate of Granite Co. or Granite GP, as applicable, for any reason. The amounts
deferred are reflected in notional deferred share units whose value in the case of deferred share units credited under the Granite Co. plan prior to January 3, 2013 depended on the fair market value of the Granite Co. common shares, and whose
value under both Director Plans from and after January 3, 2013 depends on the fair market value of preferred shares of Granite Co. Based on the terms of the Granite Co. preferred shares, it is expected that the fair market value of those shares
will track the value of Stapled Units. The value of a deferred share unit will appreciate or depreciate with changes in the value of these preferred shares. The Director Plans also take into account any distributions paid on the Stapled Units from
and after January 3, 2013 in that they provide for the crediting of additional deferred share units to Directors’ accounts in respect of such distributions. Similarly, prior to January 3, 2013, the Granite Co. directors’ deferred
share unit plan provided for the crediting of additional deferred share units in respect of dividends paid on the common shares of Granite Co. The Director Plans also allow for discretionary grants of deferred share units in addition to the deferred
share units credited to a Director pursuant to his or her election to defer their remuneration as described above. Under the Director Plans, when a Director leaves the Board, he or she receives (within a prescribed period of time) a cash payment
equal to the then value of his or her accrued deferred share units, which, in turn, depends on the value of the Granite Co. preferred shares at that time, net of withholding taxes. The grant date fair value of a deferred share unit is equal to, in
Canadian dollars, the volume-weighted average trading price per Stapled Unit on the stock exchange on which the highest volume of Stapled Units was traded on the relevant days during the five trading days immediately preceding the grant date of the
deferred share unit. The value shown for these awards is the same as the grant date fair value determined in accordance with IFRS without any adjustment for subsequent distribution-equivalent grants. Commencing January 1, 2019 the Director
Plans were amended to provide that grants of deferred share units are made yearly in advance, and vest as to one quarter of the yearly award at the end of each quarter of the year in which they are made (except for the second quarter, which vest on
the date of the annual meeting of Unitholders), provided that the grantee was a non-employee Director at any time during the applicable quarter. 

 

	(3)	 None of the Directors participate in any defined benefit, defined contribution, actuarial, or any other form of plan
provided by Granite that provides for payments or benefits at, following, or in connection with retirement. 

  

	(4)	 In recognition of the extensive time commitment, oversight and contributions provided by the Board relating to COVID-19, each Director was awarded on January 1, 2021 a one-time grant of deferred share units in the amount of $15,000. 

  
 - 24 - 

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 Director Incentive Plan Awards 

Outstanding Share-Based Awards 
 The
following table lists all share-based awards that were outstanding as of December 31, 2020 that have been made by Granite or one of its subsidiaries to the Directors, other than Mr. Gorrie, who was an NEO and whose compensation is
discussed below under “Compensation Discussion and Analysis” and “Elements of Executive Compensation — Summary Compensation Table”. There were no option-based awards outstanding as of December 31, 2020 for
Directors. 
  

											
	 	 	 
	 Name

 
		
Number of deferred
share units
(#)(1)

 
		
Market or payout
value of deferred
share units
($)(1)

 

	 	 	 
	
Peter Aghar
		 8,549
		
$669,045

	 	 	 
	
Remco Daal
		 7,705
		
$602,993

	 	 	 
	
Fern Grodner
		 1,499
		
$117,312

	 	 	 
	
Kelly Marshall
		 10,893
		
$852,486

	 	 	 
	
Al Mawani
		 9,492
		
$742,844

	 	 	 
	
Gerald Miller
		 21,367
		
$1,672,181

	 	 	 
	
Sheila A. Murray
		 2,801
		
$219,206

	 	 	 
	
Jennifer Warren
		 4,877
		
$381,674

  
 Notes: 

	(1)	 This figure represents or applies to all deferred share units held by the Director as of December 31, 2020. As
noted under “— Director Compensation Table”, under the Director Plans, when a Director leaves the Board, he or she receives (within a prescribed period of time) a cash payment equal to the then value of his or her accrued deferred
share units, net of withholding taxes. Deferred share units are rounded to the nearest single unit. The indicated value is calculated, in Canadian dollars, by multiplying the volume-weighted average trading price per Stapled Unit on the stock
exchange on which the highest volume of Stapled Units was traded on the relevant days during the five trading days preceding December 31, 2020, which was $78.26, by the applicable number of deferred share units. 

Incentive Plan Awards — Value Vested or Earned During the Year for Directors 

No option-based or share-based awards vested for Directors, and no non-equity incentive plan
compensation was earned by Directors, during the financial year ended December 31, 2020. 

INDEBTEDNESS OF TRUSTEES, DIRECTORS AND EXECUTIVE OFFICERS 

 
  

As at March 31, 2021, there was no indebtedness owing to Granite or any of its subsidiaries, excluding routine indebtedness, by
present or former executive officers, trustees, directors or employees of Granite or any of its subsidiaries, nor was any indebtedness of any such person, excluding routine indebtedness, the subject of a guarantee, support agreement, letter of
credit or other similar arrangement or understanding provided by Granite or any of its subsidiaries. 
 No individual who is, or at
any time during the financial year ended December 31, 2020 was a trustee, a director or executive officer of Granite, no Proposed Trustee or Proposed Director, and no associate of any such trustee, director, executive officer, Proposed Trustee
or Proposed Director (i) is, or at any time since January 1, 2020 has been, indebted to Granite or any of its subsidiaries whether 

  
 - 25 - 

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or not under a securities purchase program or any other program, excluding routine indebtedness, or (ii) has had any indebtedness to any other entity, excluding routine indebtedness, that
is, or at any time since January 1, 2020 has been, the subject of a guarantee, support agreement, letter of credit or other similar arrangement or understanding provided by Granite or any of its subsidiaries whether or not under a securities
purchase program or any other program. 
 COMPENSATION DISCUSSION AND ANALYSIS 

 
  

Unless otherwise specified or the context otherwise indicates, in this Compensation Discussion and Analysis, references to the
“Board” refer to the board of directors of Granite GP. 
 Letter to Unitholders 

Dear Granite Unitholders: 
 On
behalf of the CGN Committee and the Board, we are pleased to share with you our approach to executive compensation for 2020 and some changes that have been made for 2021, and to describe how these align with Granite’s strategic, financial and
operational performance. 
 Our executive compensation program is designed to attract, motivate and retain high-achieving executives
who are dedicated to the creation, protection and growth of long-term Unitholder value and to recognize and reward the successful execution of Granite’s annual business and strategic objectives. The CGN Committee is committed to continually
reviewing and refining Granite’s approach to executive compensation to ensure that the program guides and rewards the achievement of results and is consistent with best governance practices. Granite’s short-term incentive plan
(“STIP”) and long-term incentive plan (“LTIP”) are both designed to align compensation closely with Granite’s financial performance. We tie a significant portion of our executive pay to the achievement of
objectives that drive Unitholder value. The CGN Committee assesses and makes recommendations to the Board on the setting of performance measures and targets under Granite’s executive compensation program, which reflect both the short- and
long-term strategic priorities of Granite. We believe that Granite is unique in the Canadian REIT marketplace due in part to its geographic reach and its listings on both the TSX and the NYSE, and the design of Granite’s compensation program
reflects that. 
 The CGN Committee is committed to strong corporate governance, and as a part of this commitment, the CGN Committee
and the Board introduced a say-on-pay advisory vote at last year’s Meetings. We believe this non-binding advisory resolution
is an important part of the ongoing process of engagement between the Board and Unitholders on executive compensation. We were pleased that in 2020, 95.45% of shareholder votes were in favour of our approach to compensation. Once again at this
year’s Meetings we will be asking Unitholders to consider this important vote. 
 Highlights of 2020 

Granite successfully executed on its stated priorities for 2020. Some of the key financial and operational developments included the
following: 
 Unitholder Return and Increased Distribution 

 

	 	●	 	 Delivered a strong total return for Unitholders in 2020 of approximately 23% (as compared to 13% for the S&P/TSX
Capped REIT Index and 6% for the S&P/TSX Composite Index) and a 3.4% year-over-year increase in the annual distribution to Unitholders to $3.00 per Stapled Unit for 2021, marking our ninth consecutive annual distribution increase.

  
 - 26 - 

Table of Contents

 Strategic Allocation of Capital 

 

	 	●	 	 Invested $1.03 billion in modern assets in key e-commerce and distribution
markets in the GTA, the United States and the Netherlands at an average stabilized yield of 5.1%. 

  

	 	●	 	 Raised $1.0 billion in new unsecured debt from two debenture offerings, including Granite’s first ten-year bond and lowest coupon rate of 2.378%, issued at a weighted average term of 8.5 years and swapped into U.S. dollar and Euro-denominated loans bearing a weighted average fixed interest rate of 2.0%.

  

	 	●	 	 Raised $577.4 million from two equity offerings, including fully exercised over-allotment options.

  

	 	●	 	 Closed the year with a net leverage ratio of 25%, providing approximately $900 million in debt capacity and
$1.3 billion in available liquidity. 

 Portfolio Enhancement and Tenant Diversification

  

	 	●	 	 Acquired 26 properties totaling 9.2 million square feet with an average age of 6.1 years in key distribution
markets in the GTA, the United States and the Netherlands. 

  

	 	●	 	 Disposed of three non-core properties and one parcel of land for
$31.3 million. 

  

	 	●	 	 Reduced Magna concentration from 35% to 27% as a percentage of gross leasable area and from 42% to 36% as a percentage
of annualized revenue. 

 Financial and Operational Performance 

 

	 	●	 	 Recognized $273.4 million in net fair value gains. 

 

	 	●	 	 Grew funds from operations (“FFO”)(1) and adjusted
funds from operations (“AFFO”)(1) per unit year-over-year by 9.9% and 8.2%, respectively. 

 

	 	●	 	 Grew same-property net operating income year-over-year, on a constant currency basis, by 3.7%. 

 

	 	●	 	 Renewed or released 2.5 million square feet of space at an average increase in base rent of 8.4%.

  

	 	●	 	 Achieved an occupancy rate of 99.6% as at December 31, 2020. 

 

	 	●	 	 Collected 100% of rent due for the 2020 fiscal year with no recognition of bad debt expense. 

Organizational Improvements and Environmental, Social and Governance  

 

	 	●	 	 Implemented work-from-home transition plan and office safety protocols for employees. 

 

	 	●	 	 Added 13 new employees and opened a new office in Dallas, Texas. 

 

	 	●	 	 Amended long-term incentive plan for senior management to increase employee ownership and enhance alignment with
Unitholders. 

  
 - 27 - 

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	 	●	 	 Published ESG Overview and Green Bond Framework. 

 

	 	●	 	 Issued $500 million green bond and allocated 69% of the net proceeds to Eligible Green Projects, as defined by the
Green Bond Framework. 

 2020 Compensation 

The compensation program is designed to align executive compensation with Granite’s execution of its strategic initiatives and
financial performance, including Unitholder returns. In 2020, the individual and collective performance of the management team was reflected in Granite’s unit price, which saw Granite ranked as the top performing real estate investment trust in
North America for total-return performance in 2020. In recognition of Granite’s achievements, the Board approved a discretionary, one-time corporate STIP adjustment for each NEO to reflect Granite’s
achievements in 2020 notwithstanding the impacts of COVID-19. In making its determination, the Board took into account a number of factors, including Granite’s overall performance and the Management
team’s proactive approach to rent collections, as discussed further below in “— Other Considerations in Respect of STIP Awards”. 

Compensation Changes 

As part of the ongoing review of our compensation program, the CGN Committee is focused on ensuring that Granite maintains a
compensation program that enables Granite to attract and retain high-achieving executives and is competitive with market and industry practices. Effective for 2021, the CGN Committee approved a revised compensation program for all NEO’s, other
than the CEO. The revisions are intended to further align executive compensation with Granite’s financial and operational performance by increasing the percentage of at-risk compensation. Consistent with
the program that was already in place for CEO compensation, the new program provides that a significant portion of compensation for other executives be comprised of LTIP awards, including performance-based awards tied to Granite’s achievement
of longer-term objectives and performance. 
 Looking Ahead 

We will continue our commitment to implementing compensation policies and practices that will attract, retain and motivate executives,
strengthen the link between pay and performance over the long term and drive long-term Unitholder value. The CGN Committee and the Board are committed to continuing to review and refine the executive compensation program on an ongoing basis to
ensure that our pay practices achieve these goals and are consistent with best governance practices. We look forward to your continued support for Granite. 

Yours truly, 
  

			
	 

  
 Kelly Marshall
	  	 

  
 Al Mawani

	Chairman and Chair, Compensation, Governance and Nominating Committee	  	 Former Chair, Compensation, Governance and Nominating Committee

  
 Note: 

	(1)	 FFO and AFFO are measures not defined by International Financial Reporting Standards. For a description of FFO, see
“— Cost of Management”. For a description of AFFO, see Granite’s Management’s Discussion and Analysis of Results of Operations and Financial Position for the year ended December 31, 2020. 

  
 - 28 - 

Table of Contents

 Named Executive Officers 

This Compensation Discussion and Analysis outlines the compensation philosophy, policies and practices related to Granite’s named
executive officers (“NEOs”). For 2020, Granite’s NEOs were: 
  

			
	 	 
	 Name
	  	
Position

	 	 
	 Kevan Gorrie
	  	 President and Chief
Executive Officer

	 	 
	 Teresa Neto
	  	 Chief Financial
Officer

	 	 
	 Lorne Kumer
	  	 Executive Vice
President, Head of Global Real Estate

	 	 
	 Michael A. Ramparas (1)
	  	 Executive Vice
President, Global Real Estate and Head of Investments

	 	 
	 Lawrence
Clarfield
	  	 Senior Vice President,
Legal Counsel and Corporate Secretary

  
 Notes: 

	(1)	 Mr. Ramparas was appointed Executive Vice President, Global Real Estate and Head of Investments effective
January 1, 2021. 

  
 - 29 - 

Table of Contents

 Executive Compensation Objectives and Philosophy 

Granite’s compensation plan is designed to attract, motivate and retain high-achieving executives who are dedicated to the
creation, protection and growth of long-term Unitholder value and to recognize and reward the successful execution of Granite’s annual business and strategic objectives. The key principles underlying Granite’s compensation philosophy are
as follows: 
  
 

 

  
 - 30 - 

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 Compensation, Governance and Nominating Committee 

The CGN Committee is responsible for overseeing compensation for Granite’s Board and executive officers and making recommendations
in respect thereof to the Board, consistent with Granite’s compensation philosophy and corporate governance objectives. During the period commencing January 1, 2020, the following directors have been members of the CGN Committee: 

 

					
	 	 	 
	  Name of Member      	  	Independent
(Yes/No)	  	Experience in Governance and Executive Compensation
	 	 	 
	   Kelly
Marshall(1)
   (Chair)
	  	Yes	  	 Former Executive Vice President of Strategic Partnerships at
Ontario Municipal Employee Retirement System.
  
 Over 25 years of corporate finance and strategic
leadership experience including the structuring and development of corporate governance and compensation management platforms as former Managing Partner, Corporate Finance of TSX-listed Brookfield Asset
Management
  

	 	 	 
	   Al
Mawani(1)
   (Former Chair)
	  	Yes	  	 Former Executive Vice President-Chief Financial Officer of TSX-listed Oxford Properties Group Inc.
  
 Worked with boards to
design and improve governance and compensation systems in the following roles:
 ●   Former Chief Executive Officer of TSX-listed Calloway / SmartCentres REIT, a large national owner-operator of retail shopping centres;

●   Former Chair of the Compensation,
Governance and Nominating Committee and Former Chair of Audit Committee of Board of Boardwalk REIT, a large national owner-operator of apartments;

●   Current Audit Committee chair and
member of Compensation Committee of Board of First Capital Real Estate Investment Trust and former Audit Committee chair of several other real estate investment trusts; and

●   Current member of Human Resources
Committee of board of Extendicare Inc.
  

	 	 	 
	   Sheila
A. Murray
	  	Yes	  	 Former President of
TSX-listed CI Financial Corp.
  
 Over 25 years of
securities law experience including governance and regulatory compliance in the following roles:
 ●   Current member of Board of CI Financial Group;

●   Current Chair of the Board of Teck
Resources;
 ●   Current member of the
Management Resources and Compensation Committee of the Board of BCE and Bell Canada;
 ●   Former professor with Queen’s University teaching Securities Regulation;

●   Formerly on the Board of SickKids
Foundation;
 ●   Past Chair of the
Dean’s Council at Queen’s University Law School; and

●   Former Executive Vice President,
General Counsel and Secretary to CI Financial Group.
  

	 	 	 
	   Jennifer
Warren
	  	Yes	  	 Has two decades of cross-border senior legal, governance and
regulatory compliance experience in the following roles:

●   Former member of Risk and Audit
Committee and Board of Directors of CIBC Mellon, a joint venture between CIBC and BNY Mellon;
 ●   Former Chair of Audit Committee and member of Board of Directors of Atlantic Trust, National Association, a US-based national trust bank;
and
 ●   Current member of Risk,
Audit and Corporate Governance Committees of Rogers Bank, a Schedule 1 Bank that is a wholly-owned subsidiary of Rogers Communications Inc.
  

 Notes: 

	(1)	 Effective January 1, 2021, due to work commitments Mr. Mawani resigned from the CGN Committee and
Mr. Marshall was appointed Chair of the CGN Committee. 

  
 - 31 - 

Table of Contents

 Each CGN Committee member has the skills and diverse experience with respect to
executive compensation to contribute to the CGN Committee’s achievement of its objectives and to help formulate its recommendations related to Granite’s compensation policies and practices. No member is an officer, employee or former
officer or employee of Granite, and each member of the CGN Committee is independent within the meaning of National Instrument 58-101 — Disclosure of Corporate Governance Practices and the
applicable rules and regulations of the United States Securities and Exchange Commission (the “SEC”) and the NYSE. 

The mandate of the of the CGN Committee is set out in its charter as described in “Statement of Corporate Governance
Practices — Board Committees — CGN Committee of Granite GP”. The responsibilities of the CGN Committee with respect to compensation include: 
  

	 	●	 	 at least annually, report to the Board concerning Granite’s approach to executive compensation;

  

	 	●	 	 periodically review and advise the Board (supported in the discretion of the Committee, by internal or external
resources) on (i) current trends in industry-wide compensation practices in Granite’s industry and such jurisdictions in which a material portion of its business is conducted, and (ii) how Granite’s compensation programs and
practices compare to those of comparable issuers in the industry, and in discharging this responsibility, the Committee shall take into account factors it deems appropriate from time to time, including Granite’s business strategy and whether
the effects of the compensation program create risks that are reasonably likely to have a material adverse effect on Granite and its business; 

  

	 	●	 	 review and approve organizational goals and objectives relevant to the CEO’s compensation; 

 

	 	●	 	 periodically evaluate the CEO’s performance in light of those organizational goals and objectives, and
determine/make recommendations to the Board with respect to the CEO’s compensation level based on its evaluation; 

  

	 	●	 	 periodically review and make recommendations to the Board with respect to the CEO’s position description;

  

	 	●	 	 review the recommendations to the CGN Committee of the CEO respecting the compensation and other terms of employment of
the Chief Financial Officer and all other officers appointed by the Board and, if advisable, approve, with or without modifications, any such compensation and other terms of employment; 

 

	 	●	 	 recommend to the Boards of Granite REIT and Granite GP the remuneration (fees and/or retainer) to be paid to and the
benefits to be provided to trustees and directors; 

  

	 	●	 	 review compensation disclosure before it is publicly disclosed, including disclosure of the process undertaken by the
CGN Committee in its review and preparation of recommendations to the Board in respect of compensation; 

  

	 	●	 	 review the terms and administration of Granite’s equity-based compensation plans and, if advisable, recommend plans
and grants thereunder for approval of the Board; 

  

	 	●	 	 review on a periodic basis the operation of compensation programs to determine whether they are properly coordinated and
administered; and 

  
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	 	•	 review and assess the adequacy of the CGN Committee’s charter from time to time to ensure compliance with any
rules or regulations promulgated by any regulatory body and recommend to the Board for its approval any modifications to the CGN Committee’s charter as are considered appropriate. 

See also “Statement of Corporate Governance Practices — Board Committees — CGN Committee of Granite GP”.

 Management of Risks Associated with Compensation Policies and Practices 

In performing its duties, the CGN Committee considers the implications of the possible risks associated with Granite’s compensation
policies and practices. This includes identifying any such policies or practices that may encourage executive officers to take inappropriate or excessive risks, identifying risks arising from such policies and practices that could have a material
adverse effect on Granite, and considering the possible risk implications of Granite’s compensation policies and practices and any proposed changes to them. 

The CGN Committee annually reviews and assesses Granite’s compensation policies and practices in relation to such risks, including
assessing such policies and practices in light of practices identified by the Canadian Securities Administrators as potentially encouraging executive officers to expose Granite to inappropriate or excessive risks. It is the CGN Committee’s view
that Granite’s compensation policies and practices do not encourage inappropriate or excessive risk-taking. 

  
 - 33 - 

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 The following chart outlines certain potential risks associated with Granite’s
compensation policies and practices, as well as the characteristics of Granite’s compensation structure designed to mitigate these risks: 
  

									
	 	 	 	 	 
	  Type of Risk	 	 Nature of Risk
	 	  	  	Characteristics of Granite’s Compensation Program 
Designed to Mitigate Compensation Risks	 	  
	 		 		 
	
  Compensation   Philosophy
	 	 Risk that executive compensation philosophy is inconsistent with the
business model and strategy
	 	 	  	 Compensation mix is structured to meet the following objectives:

•  align employees’ financial interests with those of Unitholders;

 
 •  link
compensation to Granite’s short-term and long-term strategic objectives; and
  

•  ensure that a significant portion of executive compensation is
“at-risk”.
  
	 	 
	 		 		 
	
  Pay Mix
	 	 Risk that the pay mix encourages behaviour and short-term decision making
that is inconsistent with Granite’s strategic long-term objectives
	 	 	  	 •  The variable
elements of Granite’s compensation program include both short-term and long-term incentives.
  

•  Significant proportion of “at-risk”
compensation to motivate executives and other employees of Granite to focus on both short-term and long-term results and performance criteria.
  

•  As a whole, the compensation elements are designed to achieve a balance in the mix of fixed
and variable compensation, short-term and long-term incentives and cash versus equity.
  

•  Proportion of equity-based compensation increases with the executive’s level of
responsibility.
  

•  A significant portion of executive pay is awarded in the Board’s discretion based on
operational and market-based metrics, achievement of organizational objectives and individual performance aligned with Granite’s strategic goals.
  
	 	 
	 		 		 
	
  Performance   Measures
	 	 Risk that performance measures are either:

•   unachievable; or

•   too easy to achieve.
	 	 	  	 •  Each year, the
CGN Committee reviews market compensation levels and also reviews and sets performance measures and targets for the short-term incentive plan (“STIP”) and for grants under the long-term incentive plan (“LTIP”) that
are aligned with Granite’s annual budget and its strategic plan in accordance with the CGN Committee’s risk assessment to ensure such measures and targets continue to be relevant and total compensation is competitive.

 
 •  Structure
includes specific performance measures with achievable targets derived from Granite’s thorough budget approval process.
  

•  Based on a balanced approach designed to prevent an over-emphasis on a single performance
measurement.
  
	 	 

 Additionally, the following measures have been implemented to avoid excessive or inappropriate risk taking: 

 

	 	●	 	 STIP awards are directly tied to a mix of corporate and individual performance measures; 

 

	 	●	 	 a substantial portion of executive compensation is in the form of long-term incentives which vest over time (generally a
three-year period); 

  
 - 34 - 

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	 	●	 	 all trustees and directors and NEOs are subject to unit-ownership requirements; 

 

	 	●	 	 the President and CEO is required to hold Stapled Units for a period of one year after he retires or resigns;

  

	 	●	 	 trustees, directors and employees are prohibited from purchasing financial instruments that are designed to hedge or
offset a decrease in the market value of units held, as more particularly described below under “— Anti-Hedging Policy”; and 

  

	 	●	 	 Granite has a compensation “claw-back” policy, as more particularly described below under “—
Compensation Claw-Back Policy”. 

 Anti-Hedging Policy 

Granite’s trustees, directors, officers and employees are prohibited under Granite’s Insider Trading and Blackout Policy from
purchasing financial instruments that are designed to hedge or offset a decrease in market value of equity securities granted as compensation or held, directly or indirectly, by the trustee, director or employee. 

Compensation Claw-Back Policy 
 In
connection with Granite’s compensation risk mitigation strategy, Granite has adopted a “claw-back policy” applicable to certain designated officers, including the President and CEO. The policy provides that Granite may require
disgorgement of specified portions (which may be all or a portion) of the annual cash incentive bonus or equity-based compensation awarded or granted to the designated officers, in the event that Granite is required to publicly issue a restatement
of all or a portion of its interim quarterly or annual financial statements, due to material non-compliance with any financial reporting requirement under applicable Canadian securities laws. 

President and CEO Stapled Unit Ownership Guidelines 

Granite has adopted a guideline whereby within two years from Mr. Gorrie’s appointment as President and CEO on August 1,
2018, he is required to hold Stapled Units, deferred stapled units (i.e., RSUs or PSUs) or a combination thereof having an aggregate market value equal to at least three times his annual base salary as at the date upon which he asserts that he has
complied with such requirement, unless permitted by the Board to do otherwise. Within the required two-year period, and as at March 31, 2021, Mr. Gorrie exceeded this requirement by holding a
combination of stapled units, RSUs and PSUs having a market value in excess of eleven times his base salary. 
 NEO Stapled Unit
Ownership Guidelines 
 Granite has adopted a guideline whereby within three years from appointment as an NEO, each NEO is
required to hold Stapled Units, deferred stapled units (i.e., RSUs or PSUs) or a combination thereof having an aggregate market value equal to at least one times his or her annual base salary as at the date upon which he or she asserts that he or
she has complied with such requirement, unless permitted by the Board to do otherwise. Within the required three-year period, and as at March 31, 2021, each NEO exceeded this requirement by holding a combination of stapled units, RSUs and PSUs
having a market value in excess of (i) in the case of Ms. Neto, three times her base salary, (ii) in the case of Mr. Kumer, six times his base salary, (iii) in the case of Mr. Ramparas, three times his base salary, and
(iv) in the case of Mr. Clarfield, two times his base salary. 

  
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 President and CEO Post-Employment Ownership Guideline 

Granite has adopted a guideline whereby the President and CEO is required to maintain a minimum ownership of Stapled Units having an
aggregate market value equal to his annual base salary prior to his resignation or retirement for a period of one year following the date of his resignation or retirement, unless permitted by the Board to do otherwise.  

Executive Compensation Review Process 

The CGN Committee executes its mandate to oversee compensation for the Boards and executive officers and makes recommendations to the
Board with respect to the same in consultation with Management and any independent compensation consultants that may be retained from time to time. The Board, however, makes the ultimate decisions with respect to compensation, following
consideration of the CGN Committee’s recommendations. 
 With respect to overall organizational performance, the Board assesses
Granite’s achievements relative to its strategic objectives. The Board also considers Granite’s performance against pre-established metrics described below. With respect to individual performance,
the Board evaluates each executive officer’s performance in the areas of Granite’s business for which the executive is responsible, together with, but not limited to, risk management, leadership, teamwork and culture, and recognizes the
individual’s key responsibilities and contributions toward Granite’s overall performance. The Board exercises discretion in its annual review of performance. 

Role of Management 
 The CEO together
with other members of the Management team assist the CGN Committee in executing its duties by compiling information to be used by the CGN Committee in its determinations and reporting on historical compensation levels, methods of compensation,
evidence of organizational and individual performance, and recent compensation trends and regulatory initiatives. The CEO also makes recommendations with respect to equity-based grants for eligible employees below the executive level. 

The CGN Committee consults the CEO for input into its review of the performance of the other executive officers, which performance
assessment affects both short-term and long-term incentive awards. Given the close working relationship between the CEO and the other executive officers, the CGN Committee believes the CEO’s assessment of the performance and contribution of the
other executives is valuable. While the CEO may be invited to attend CGN Committee meetings, he is not present during in camera sessions of the CGN Committee or when the CGN Committee is considering his performance or compensation. 

Compensation Consultants 
 From time
to time the CGN Committee will engage an outside advisor that it determines to be necessary to permit it to carry out its duties. The CGN Committee is responsible for engaging compensation consultants and overseeing their work as necessary.
Before retaining such an advisor, the CGN Committee considers the independence of such advisor. In 2020, the CGN Committee did not retain a compensation consultant. 

  
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 Compensation Peer Group 

For 2020, the CGN Committee conducted a comparison of compensation practices by peer issuers in the real estate industry. The CGN
Committee uses the full peer comparator group for pay benchmarking and compensation structuring and design purposes. The peer issuers for 2020 were selected based on several criteria and factors, including: 

 

	 	(a)	 asset values and market capitalization, with the higher market capitalization of some issuers offsetting the fact that
such issuers may not have the geographical complexities of Granite; 

  

	 	(b)	 internally managed issuers, as the CGN Committee felt that externally managed issuers may not require similar levels
of responsibility and effort of executive officers as an internally managed issuer; and 

  

	 	(c)	 the nature of the issuers’ operations and their geographic footprint as well as their asset mix and other
financial considerations. 

 Based on the above criteria the CGN Committee chose the following peer issuers for the
purpose of its review, although the CGN Committee did not specifically identify a median or percentile for total compensation of Granite’s executives relative to the identified peers: 

 

					
	  

2020 Peer Comparator Group
  

	 		 
	
•     Allied Properties REIT
	  	•     Artis REIT	  	•     Chartwell Retirement Residences
	 		 
	
•     Choice REIT
	  	•     Cominar REIT	  	•     Crombie REIT
	 		 
	
•     CT REIT
	  	•     First Capital Real Estate Investment Trust	  	•     H&R REIT
	 		 
	
•     Killam Apartment REIT
	  	•     RioCan REIT	  	•     Summit Industrial Income REIT

 The CGN Committee also considered certain factors that the Board believes make Granite unique in the
Canadian REIT marketplace. The Board believes the following factors require Granite to have a Management team and board with specific skills, experience and expertise: 
  

	 	●	 	 Granite’s global footprint with real estate operations in seven countries, which offers opportunities for
prospective growth, but also involves a tax, legal and cash management structure not typical of a Canadian REIT; 

  

	 	●	 	 Granite’s stated objective of reducing its proportion of special purpose properties and manufacturing facilities
and increasing the proportion of warehousing and distribution assets; and 

  

	 	●	 	 Granite’s listing on the NYSE, requiring additional compliance requirements in governance, audit and investor
relations. 

  
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 Elements of Executive Compensation 

Overview 
 As described in more detail
below, Granite’s compensation program consists of the elements described in the following charts: 
  
  

 
  
  
  

 

  
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 Notes: 

	(1)	 Reflects 2020 NEO targets. See “— 2021 Compensation Changes” below for details regarding adjustments to
2021 NEO compensation targets. 

  

	(2)	 Mr. Ramparas was appointed Executive Vice President, Global Real Estate and Head of Investments effective
January 1, 2021. 

  

							
	  

Component
  
	 	  

Form
  
	 	  

Performance Period
  
	 	  

Objectives and Purpose
  

	  

Base Salary
	 	  

Cash
	 	  
 n/a
	 	  

•  Reflects level of responsibility and experience.

 

•  Competitiveness in the market.

 

	STIP	 	Cash	 	Annual	 	
•  Recognizes and rewards performance.

 
 •  Provides
alignment with Granite’s performance.
  

•  Component of “at-risk” compensation.

 

	 LTIP
	 	RSUs	 	Annual vesting over 
three-year vesting period	 	
•  Aligns compensation with increases in Unitholder value.

•  Promotes retention.

 

	 	 	PSUs	 	Three-year performance period	 	
•  Aligns compensation with longer term strategic objectives and increases in Unitholder
value.
  

•  Links payouts to Granite’s net asset value and Granite’s total return performance
relative to total return of benchmark S&P/TSX Capped REIT Index.
  

•  Component of “at-risk” compensation.

 

 The CGN Committee believes these elements of compensation, when combined, form an appropriate mix of
compensation. These elements provide competitive compensation, link a significant portion of Granite’s executives’ compensation to organizational objectives and individual performance (which induces and rewards behaviour that creates
long-term value for Unitholders) and encourage retention with time-based vesting attached to long-term equity-based incentives. Over time, the CGN Committee has considered it appropriate to increase the proportion of total executive compensation
that is composed of equity-based compensation. The CGN Committee considers each element independently of the other elements, and also reviews the totality of the elements to ensure an appropriate mix and level of compensation. 

  
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Table of Contents

 2020 Compensation Elements 

Base Salary 
 The CGN Committee believes that
the base salaries of Granite’s executives must be sufficiently competitive in the market to enable recruitment and encourage retention while reflecting the scope of responsibility, skill, experience and overall performance of each executive, as
well as internal equity considerations. Base salaries are reviewed annually by the CGN Committee. Increases to base salaries have been approved by the Board, on recommendation from the CGN Committee, from time to time as a result of
(i) performance which has exceeded expectations, (ii) changes in an executive’s duties and responsibilities, (iii) contributions to Granite’s overall performance, and (iv) competitive factors. 

For 2020, the annualized base salaries for the NEOs currently employed by Granite are as follows: 

 

							
	 	 	 	 
	NEO	 	2020 Base Salary
($)	 	2019 Base Salary
($)	 	Increase from 2019
(%)
	 	 	 	 
	
Kevan Gorrie
	 	800,000	 	800,000	 	0%
	 	 	 	 
	
Teresa Neto
	 	425,000	 	425,000	 	0%
	 	 	 	 
	
Lorne Kumer
	 	425,000	 	425,000	 	0%
	 	 	 	 
	
Michael A. Ramparas
	 	360,000	 	325,000	 	10.8%
	 	 	 	 
	
Lawrence Clarfield
	 	315,000	 	275,000	 	14.5%

 Short-Term Incentive Plan (STIP) 

Granite’s STIP consists of a performance-based annual cash bonus dependent upon the Board’s assessment of overall
organizational and individual performance, as set out in further detail in the tables below. The assessment focuses in part on the specific performance metrics set out in the tables below, and in part on the executive’s performance in executing
Granite’s strategy. The exercise of discretion by each of the CGN Committee and the Board in its performance assessment is not formally restricted by a minimum or maximum STIP amount. 

Granite’s STIP is intended to incentivize executive performance and promote the alignment of personal compensation with the
successful execution of key components of Granite’s strategy. 
 Payouts under Granite’s STIP are based on the following
formula: 
  
  
 

 

  
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Table of Contents

 For 2020, the following tables reflect the performance measurement categories for each
NEO currently employed by Granite: 
 Kevan Gorrie, President and Chief Executive Officer 

 

															
	  	 	  	 	  

2020 Performance Goals
  
	 	  	 	  
	
Corporate Measure
  
	 	 Weight  

 
	 	
Threshold
  
	 	 Target

 
	 	 Maximum

 
	 	 2020 Actual
Performance

 
	 	
Calculated
Performance
Score
  

	 AFFO
modified(1) per Stapled Unit
	 	70%  	 	35%  	 	$3.56  	 	$3.74  	 	$3.89  	 	$3.75	 	Exceeded
 Target

	SPNOI – cash basis(2)	 	15%  	 	2.5%  	 	3.3%  	 	4.0%  	 	2.9%	 	Exceeded
Minimum
	 Average occupancy
	 	10%  	 	98.0%  	 	98.5%  	 	100.0%  	 	99.1%	 	Exceeded
Target
	Debt to EBITDA – end of year	 	10%  	 	7.0x  	 	6.6x  	 	6.0x  	 	5.4x	 	Exceeded
Maximum
	Acquisitions & development	 	20%  	 	$600 million  	 	$800 million  	 	$1 billion  	 	$1.063 billion	 	Exceeded
 Maximum

	 Dispositions – Single tenant concentration reduction % (by GLA)

 
	 	5%  	 	34.3%  	 	33.3%  	 	32.0%  	 	33.9%	 	Exceeded
Target
	 ESG objectives
	 	5%  	 	 	 	 	 	 	 	 Issued 2020 ESG  

update and raised  

inaugural $500  

million green bond  
	 	Exceeded
Maximum
	  

Individual Performance Measure
  

	Strategy Planning and Strategic Execution	 	  

30%  
	 	Provide effective leadership and foster a cohesive and engaged corporate culture
 
	 	The CGN Committee considered these specific performance measures and determined that the President and
CEO’s targets were met or exceeded in 2020.
	 	Enhance platform capabilities in US and Europe
 

	 	Oversee effective allocation of capital
 

	 	Further develop ESG program and improve sustainability metrics
 

	 	Manage general and administrative expenses  

	 Total
Target
	 	100%  	 	 	 	
Achieved STIP bonus of 174% of base salary(3)

  
 Notes: 

	(1)	 “AFFO modified” is a measure not defined by International Financial Reporting Standards
(“IFRS”). AFFO modified is an internal measure of operating performance used by the CGN Committee and the Board to measure organizational performance against pre-set targets. Granite
calculates AFFO modified as FFO adjusted for unusual and non-recurring items and the annualized impact of any unbudgeted dispositions in the performance period, all adjusted on a constant currency basis. Since
non-IFRS measures do not have standardized meanings prescribed by IFRS, they may not be comparable to similar measures reported by other issuers. For a discussion of FFO, see “— Cost of
Management”. 

  

	(2)	 “SPNOI — cash basis” (same property net operating income) is a measure not defined by IFRS. SPNOI cash
basis refers to the net operating income on a cash basis for those properties owned by Granite throughout the entire current and prior year periods under comparison. SPNOI — cash basis excludes properties that were acquired, disposed of,
classified as properties under or held for development or assets held for sale during the periods under comparison. 

  

	(3)	 See “— Other Considerations in Respect of STIP Awards” below. 

  
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 Teresa Neto, Chief Financial Officer 

 

															
	  	 	  	 	
2020 Performance Goals
  
	 	  	 	  
	
Corporate Measure
  
	 	 Weight  

 
	 	
Threshold
  
	 	 Target

 
	 	 Maximum

 
	 	 2020 Actual
Performance

 
	 	
Calculated
Performance
Score
  

	 AFFO
modified(1) per Stapled Unit
	 	60%  	 	35%  	 	$3.56  	 	$3.74  	 	$3.89  	 	$3.75	 	Exceeded
 Target

	 SPNOI – cash basis(2)
	 	15%  	 	2.5%  	 	3.3%  	 	4.0%  	 	2.9%	 	Exceeded
Minimum
	 Average occupancy
	 	10%  	 	98.0%  	 	98.5%  	 	100.0%  	 	99.1%	 	Exceeded
Target
	 Debt to EBITDA – end of year
	 	10%  	 	7.0x  	 	6.6x  	 	6.0x  	 	5.4x	 	Exceeded
Maximum
	Acquisitions & development	 	20%  	 	$600 million  	 	$800 million  	 	$1 billion  	 	$1.063 billion	 	Exceeded
 Maximum

	 Dispositions – Single tenant concentration reduction % (by
GLA)
	 	5%  	 	34.3%  	 	33.3%  	 	32.0%  	 	33.9%	 	Exceeded
Target
	 ESG objectives
	 	5%  	 	 	 	 	 	 	 	 Issued 2020 ESG  

update and raised  

inaugural $500  

million green bond  
  
	 	Exceeded
Maximum

	  

Individual Performance Measure
  

	Strategy Planning and Strategic Execution	 	  

40%
	 	Global systems implementation with go-live execution January 1, 2021
 
	 	The CGN Committee considered these specific performance measures and determined that the Chief Financial
Officer’s targets were met or exceeded in 2020.
	 	Manage cash general and administrative costs as a percentage of revenue
 

	 	Execute financing transactions to effectively fund growth strategy
 

	 	Achieve continued back-office efficiencies
 

	 	Improve internal management reporting
 

	 	Enhance HR resources and policies including compliance with local public health guidelines in respect of Covid-19  

	 	Enhance I.T. policies and procedures  

	 Total
Target
	 	100%	 	 	 	
Achieved STIP bonus of 118% of base
salary(3)

  
 Notes: 

	(1)	 See note (1) in the table above under “— Kevan Gorrie, President and Chief Executive Officer”
regarding AFFO modified. 

  

	(2)	 See note (2) in the table above under “— Kevan Gorrie, President and Chief Executive Officer”
regarding SPNOI – cash basis. 

  

	(3)	 See “— Other Considerations in Respect of STIP Awards” below. 

  
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 Lorne Kumer, Executive Vice President, Head of Global Real Estate 

 

															
	  	 	  	 	
2020 Performance Goals
  
	 	  	 	  
	
Corporate Measure
  
	 	 Weight  

 
	 	
Threshold
  
	 	 Target

 
	 	 Maximum

 
	 	 2020 Actual
Performance

 
	 	
Calculated
Performance
Score
  

	 AFFO
modified(1) per Stapled Unit
	 	60%	 	35%  	 	$3.56  	 	$3.74  	 	$3.89  	 	$3.75	 	Exceeded
Target
	 SPNOI – cash basis(2)
	 	15%  	 	2.5%  	 	3.3%  	 	4.0%  	 	2.9%	 	Exceeded
Minimum
	 Average occupancy
	 	10%  	 	98.0%  	 	98.5%  	 	100.0%  	 	99.1%	 	Exceeded
Target
	 Debt to EBITDA – end of year
	 	10%  	 	7.0x  	 	6.6x  	 	6.0x  	 	5.4x	 	Exceeded
Maximum
	 Acquisitions/

development
	 	20%  	 	$600 million  	 	$800 million  	 	$1 billion  	 	$1.063 billion	 	Exceeded
 Maximum

	 Dispositions – Single tenant concentration reduction % (by
GLA)
	 	5%  	 	34.3%  	 	33.3%  	 	32.0%  	 	33.9%	 	Exceeded
Target
	 ESG objectives
	 	5%  	 	 	 	 	 	 	 	 Issued 2020 ESG update and raised  
inaugural $500 million green bond  
  
	 	Exceeded
Maximum
	  

Individual Performance Measure
  

	 Strategy Planning and Strategic
Execution
	 	  

40%  
	 	Oversee asset management, development and leasing
 
	 	The CGN Committee considered these specific performance measures and determined that the Executive Vice
President, Head of Global Real Estate’s targets were met or exceeded in 2020.
	 	Enhance capex management and tenant relations
 

	 	Active engagement with stakeholders
 

	 	Enhance organization and platform capabilities  

	 Total
Target
	 	100%  	 	 	 	
Achieved STIP bonus of 118% of base salary(3)

  
 Notes: 

	(1)	 See note (1) in the table above under “— Kevan Gorrie, President and Chief Executive Officer”
regarding AFFO modified. 

  

	(2)	 See note (2) in the table above under “— Kevan Gorrie, President and Chief Executive Officer”
regarding SPNOI – cash basis. 

  

	(3)	 See “— Other Considerations in Respect of STIP Awards” below. 

  
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 Michael A. Ramparas, Executive Vice President, Global Real Estate and Head of
Investments 
  

															
	  	 	  	 	  

2020 Performance Goals
  
	 	  	 	  
	
Corporate Measure
  
	 	 Weight  

 
	 	
Threshold
	 	 Target

 
	 	 Maximum

 
	 	 2020 Actual
Performance

 
	 	
Calculated
Performance
Score
  

	 AFFO modified(1) per Stapled Unit
	 	50%	 	35%   	 	$3.56  	 	$3.74  	 	$3.89  	 	$3.75	 	Exceeded
 Target

	 SPNOI – cash basis(2)
	 	15%   	 	2.5%  	 	3.3%  	 	4.0%  	 	2.9%	 	Exceeded
 Minimum 

	 Average occupancy
	 	10%   	 	98.0%  	 	98.5%  	 	100.0%  	 	99.1%	 	Exceeded
 Target 

	 Debt to EBITDA – end of year
	 	10%   	 	7.0x  	 	6.6x  	 	6.0x  	 	5.4x	 	Exceeded
 Maximum 

	 Acquisitions/
development
	 	20%   	 	$600 million  	 	$800 million  	 	$1 billion  	 	$1.063 billion	 	Exceeded
 Maximum

	 Dispositions – Single tenant
concentration reduction % (by GLA)
  
	 	5%   	 	34.3%  	 	33.3%  	 	32.0%  	 	33.9%	 	Exceeded
Target
	 ESG
objectives
	 	5%   	 	 	 	 	 	 	 	Issued 2020 ESG
update and raised
inaugural $500

million green bond   
	 	Exceeded
Maximum
	  

  Individual Performance Measure
  

	  Strategy Planning and   Strategic Execution	 	  
 50%  
	 	Oversight of investments globally  
	 	The CGN Committee considered these specific performance measures and determined that the Executive Vice President, Global Real
Estate and Head of Investments’ targets were met or exceeded in 2020.
	 	 Support asset management, development and
leasing

 

	 	 Enhance organization and platform
capabilities  

 

	 	 Active engagement with stakeholders

 

	 Total
Target
	 	100%	 	 	 	 	 	Achieved STIP bonus of 106% of base salary(3)  

  
 Notes: 

	(1)	 See note (1) in the table above under “— Kevan Gorrie, President and Chief Executive Officer”
regarding AFFO modified. 

  

	(2)	 See note (2) in the table above under “— Kevan Gorrie, President and Chief Executive Officer”
regarding SPNOI – cash basis. 

  

	(3)	 See “— Other Considerations in Respect of STIP Awards” below. 

  
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Table of Contents

 Lawrence Clarfield, Senior Vice President, Legal Counsel and Corporate
Secretary 
  

															
	  	 	  	 	
2020 Performance Goals
  
	 	  	 	  
	
Corporate Measure
  
	 	 Weight  

 
	 	
Threshold
  
	 	 Target

 
	 	 Maximum

 
	 	 2020 Actual
Performance

 
	 	
Calculated
Performance
Score
  

	 AFFO
modified(1) per Stapled Unit
	 	50%	 	35%  	 	$3.56  	 	$3.74  	 	$3.89  	 	$3.75	 	Exceeded
 Target

	 SPNOI – cash basis(2)
	 	15%  	 	2.5%  	 	3.3%  	 	4.0%  	 	2.9%	 	Exceeded
Minimum
	 Average occupancy
	 	10%  	 	98.0%  	 	98.5%  	 	100.0%  	 	99.1%	 	Exceeded
Target
	 Debt to EBITDA – end of year
	 	10%  	 	7.0x  	 	6.6x  	 	6.0x  	 	5.4x	 	Exceeded
Maximum
	 Acquisitions/

development
	 	20%  	 	$600 million  	 	$800 million  	 	$1 billion  	 	$1.063 billion	 	Exceeded
 Maximum

	 Dispositions – Single tenant concentration reduction % (by GLA)
	 	5%  	 	34.3%  	 	33.3%  	 	32.0%  	 	33.9%	 	Exceeded
Target
	 ESG objectives
	 	5%  	 	 	 	 	 	 	 	 Issued 2020 ESG
update and raised inaugural $500 million green bond  
  
	 	Exceeded
Maximum

	  

Individual Performance Measure
  

	Strategy Planning and Strategic Execution	 	  

50%  
	 	Effective oversight of regulatory compliance and overall risk management
 
	 	 The CGN Committee considered these specific performance
measures and determined that the Senior Vice President, Legal Counsel and Corporate Secretary’s targets were met or exceeded in 2020.
  

	 	Provide effective governance support to management and the Board of Trustees
 

	 	Improve overall efficiency of legal department  

	 Total
Target
	 	100%  	 	 	 	
Achieved STIP bonus of 95% of base salary(3)

  
 Notes: 

	(1)	 See note (1) in the table above under “— Kevan Gorrie, President and Chief Executive Officer”
regarding AFFO modified. 

  

	(2)	 See note (2) in the table above under “— Kevan Gorrie, President and Chief Executive Officer”
regarding SPNOI – cash basis. 

  

	(3)	 See “— Other Considerations in Respect of STIP Awards” below. 

Other Considerations in Respect of STIP Awards  

In addition to the performance measurement categories noted above, the Board considered each NEO’s contribution to the overall
performance of Granite in 2020 including the role of such NEO in the achievement of the factors discussed under “— Long-Term Incentive Plan (LTIP)”. 

For 2020, the Board approved a discretionary, one-time STIP adjustment for each NEO to reflect
Granite’s achievements in 2020 notwithstanding the ongoing impacts of COVID-19. The Board determined that an adjustment was warranted on the basis of, amongst other considerations: 

 

	 	●	 	 the transition of Granite’s employees to work from home and the conversion to electronic processes;

  

	 	●	 	 100% rent collection, with no bad debts and Management’s proactive approach and resolution of multiple tenant rent
deferral/abatement requests; 

  
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	 	●	 	 implementation of new information technology systems by Granite’s employees entirely remotely;

  

	 	●	 	 the impacts of the COVID-19 on Granite’s disposition, development and
leasing programs; 

  

	 	●	 	 increased stakeholder engagement; and 

 

	 	●	 	 continued platform enhancements including expansion of Granite’s global offices in the United States and the
Netherlands. 

 STIP – Summary Table  

The following table summarizes the STIP award made to each NEO for 2020: 

 

											
	  

  Executive
	 	
2020 Potential STIP Award (as a % of     
Base Salary)

 
	 	
2020 Actual STIP Award(1)

 

	 	  

Minimum         
	 	  

Target         
	 	  

Maximum         
	 	  

$ Value         
	 	  

% of Base         
Salary         

 

	   Kevan
Gorrie
  
	 	
0%          
	 	
100%          
	 	
200%          
	 	
$1,394,400          
	 	
174%          

	   Teresa
Neto
  
	 	
0%          
	 	
50%          
	 	
100%          
	 	
$500,000          
	 	
118%          

	   Lorne
Kumer
  
	 	
0%          
	 	
50%          
	 	
100%          
	 	
$500,000          
	 	
118%          

	   Michael A.
Ramparas
  
	 	
0%          
	 	
40%          
	 	
80%          
	 	
$380,000          
	 	
106%          

	   Lawrence
Clarfield
  
	 	
0%          
	 	
40%          
	 	
80%          
	 	
$300,000          
	 	
95%          

  
 Notes: 

	 	(1)	 See “— Other Considerations in Respect of STIP Awards” above. 

Long-Term Incentive Plan (LTIP) 

Granite’s LTIP is designed to achieve the following objectives: 

 

	 	i)	 align employees’ financial interests with those of Unitholders, as the value of the awards are directly tied to
Granite’s Stapled Unit price; 

  

	 	ii)	 promote the long-term retention of key employees, through multi-year vesting; and 

 

	 	iii)	 link compensation to long-term performance. 

Under a LTIP program introduced in 2019, executives receive annual awards of restricted stapled units (“RSUs”) and
performance stapled units (“PSUs”) on the basis of a percentage of base salary. This program is intended to retain executives and induce and reward behaviour that creates long-term value for Unitholders by aligning the interests of
executives with those of Unitholders. For 2020, based on the terms of the applicable employment agreement for each NEO, the annual LTIP grant levels and mix of RSUs and PSUs is as follows: 

 

							
	  

  Executive
  
	 	  

LTIP Grant
 (% of salary)

 
	 	  

LTIP MIX
  

	 	  

Portion in RSUs
  
	 	  

Portion in PSUs
  

	
  Kevan Gorrie
  
	 	 115% 
	 	 30% 
	 	 70% 

	
  Teresa Neto
  
	 	 75% 
	 	 40% 
	 	 60% 

	
  Lorne Kumer
  
	 	 75% 
	 	 40% 
	 	 60% 

	
  Michael A. Ramparas
  
	 	 60% 
	 	 40% 
	 	 60% 

	
  Lawrence Clarfield
  
	 	 60% 
	 	 40% 
	 	 60% 

  
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Table of Contents

 Summary of RSUs and PSUs  

The chart below summarizes the key features of the RSUs and PSUs granted to NEOs and other senior employees in 2020: 

 

									
	 	 	 	 	 
	  Key Features	 	 RSUs
	 	  	  	PSUs	 	  
	 	  	 	 	 
	 	 		 	 
	   Vesting
Schedule
	 	 Annual vesting over three-year period
	 	 	  	 Cliff vesting

(upon the approval by the Board of Granite’s annual financial statements for the third calendar year following the date of grant, subject to
achievement relative to performance measures, as specified below)
  
	 	 
	 	  	 	 	 
	 	 	 
	
  Grant/Award Determination
	 	 Grant amounts are provided for in each NEO’s employment
agreement as a specified percentage of base salary
  
	 	 
	 	  	 	 	 
	 	 		 	 
	
  Performance Multiplier
	 	 None
	 	 	  	 Payouts can range from 0 – 200% of the target award value, based on
achievement of set performance measures.
	 	 
	 	  	 	 	 
	 	 		 	 
	
  Performance Measurement
	 	 None
	 	 	  	 1) 50% – Granite’s Total Unitholder Return relative to the
S&P/TSX Capped REIT Index over three years; and
 2) 50% – Granite’s Net Asset Value (“NAV”) relative to NAV target established
at time of grant, both as more particularly described below under “PSU Awards”.
  
	 	 
	 	  	 	 	 
	 	 	 
	
  Distributions
	 	 Units accrue credit for distributions

 
	 	 

 RSU Awards  

The future value of the RSU awards tracks the value of Granite’s Stapled Units and the RSU awards generally do not fully vest until
the conclusion of three years following the grant date. For a description of the Executive Deferred Stapled Unit Plan under which the RSUs are awarded, please see “— Equity Compensation Plan Information”. 

The following table sets out the RSUs granted to each NEO for 2020: 

 

					
	  

Executive
  
	 	  

  RSU Grant Date Fair Value(1)

 
	 	  

  Number of RSUs Awarded
  

	  

Kevan Gorrie
  
	 	  

  $280,000
  
	 	  

  4,215
  

	  

Teresa Neto
  
	 	  
   $127,500

 
	 	  

  1,920
  

	  

Lorne Kumer
  
	 	  

  $127,500
  
	 	  

  1,920
  

	  

Michael A. Ramparas
  
	 	  
   $86,400

 
	 	  

  1,301
  

	  

Lawrence Clarfield
  
	 	  

  $75,600
  
	 	  

  1,139
  

  
 Notes: 

	(1)	 The grant date fair value of an RSU is equal to, in Canadian dollars, the volume-weighted average trading price per
Stapled Unit on the stock exchange on which the highest volume of Stapled Units was traded on the relevant days during the five trading days immediately preceding the grant date of the RSU. The value shown for these awards is the same as the grant
date fair value without any adjustment for subsequent distribution-equivalent grants. 

  
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Table of Contents

 PSU Awards 

For 2020, Granite granted PSUs to each NEO in accordance with the provisions of Granite’s Executive Deferred Stapled Unit Plan. For
a description of the Executive Deferred Stapled Unit Plan under which the PSUs are awarded, please see “— Equity Compensation Plan Information”. 

Such PSUs represent the right to receive, as determined by the CGN Committee, either Stapled Units (including accrued distribution
equivalents) or a cash payment having an equivalent market value to the Stapled Units subject to the award when such PSUs vest in 2023 on the date on which the Board approves Granite’s 2022 annual financial statements, in each case after taking
into account the applicable performance multiplier. A performance multiplier of 0% to 200% of the target will be applied to determine the final number of vested PSUs. Such performance multiplier will be the average of two separate multipliers
determined by reference to two metrics, weighted equally and calculated on a per Stapled Unit basis, as follows: 
  

	 	●	 	 Total Unitholder return (“TUR”) of Granite vs. total unitholder return of the
S&P/TSX Capped REIT Index: 50% weighting will be given to Granite’s TUR compared to the TUR achieved by the constituents of the S&P/TSX Capped REIT Index (or its successor in the event S&P/TSX revises the Index) for the period
commencing on the grant date and ending December 31, 2022. 

  

	 	o	 This multiplier will be based on Granite’s total return percentile ranking within the constituents of the
S&P/TSX Capped REIT Index and calculated as follows: 

  

							
	 	 	 	 
	 Percentile

 
	 	 < 25th percentile

 
	 	3 25th percentile or £
75th percentile  
	 	> 75th percentile  

	 Multiplier in respect of

the TUR test
  
	 	0%	 	 0% to 200% (calculated
linearly)
	 	200%

  

	 	●	 	 Net Asset Value: 50% weighting will be given to Granite’s NAV at vesting compared to a target NAV of $71.00
per Stapled Unit less aggregate current income tax paid or payable per Stapled Unit on asset sales during the vesting period (the “Target NAV”). 

 

	 	o	 This multiplier is calculated as follows: 

 

							
	 	 	 	 
	 Achievement

 
	 	
< Threshold(1)
  
	 	3 Threshold (1) or < 
Maximum(2)  
	 	3 Maximum(2)  

	 Multiplier in respect of

the NAV test
  
	 	0%	 	 0% to 200% (calculated
linearly)
	 	200%

  

Notes: 

	 	(1)	 “Threshold” means an actual NAV figure of 90% of the Target NAV. In the event Granite elects to
declare a special distribution in certain circumstances, the NAV per unit shall be adjusted by any cash component of such special distribution. 

  

	 	(2)	 “Maximum” means an actual NAV figure of 110% of the Target NAV. In the event Granite elects to declare
a special distribution in certain circumstances, the NAV per unit shall be adjusted by any cash component of such special distribution. 

  
 - 48 - 

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 The following table sets out the PSUs granted to each NEO for 2020: 

 

							
	 	 	 	 
	Executive	 	PSU Grant Date Fair
Value(1)
 
	 	Number of Units 
Awarded  
	 	Vesting Date
	 Kevan Gorrie

 
	 	 $640,000
	 	 9,634
	 	
The date in 2023 on which the Board approves Granite’s 2022 annual financial statements.

	 Teresa Neto

 
	 	 $191,250
	 	 2,879

	 Lorne Kumer

 
	 	 $191,250
	 	 2,879

	 Michael A. Ramparas

 
	 	 $129,600
	 	 1,951

	 Lawrence Clarfield

 
	 	 $113,400
	 	 1,708

  
 Note: 

	(1)	 The grant date fair value of a PSU is equal to, in Canadian dollars, the volume-weighted average trading price per
Stapled Unit on the stock exchange on which the highest volume of Stapled Units was traded on the relevant days during the five trading days immediately preceding the grant date of the PSU. The value shown for these awards is the same as the grant
date fair value without any adjustment for subsequent distribution-equivalent grants. 

 Perquisites and Other Benefits 

Perquisites and other benefits do not represent a significant portion of the overall compensation of Granite’s executives. The
perquisites provided to the executives in 2020 included health benefits and other limited, customary executive perquisites. 
 2021 Compensation Changes 

In 2020, the Board approved changes to Granite’s executive compensation program to ensure that the program remains competitive with
market practices for senior executives. The revised program, which became effective in 2021, is intended to further align executive compensation with Granite’s financial and operational performance by increasing the percentage of at-risk compensation and providing a significant portion of executive compensation in the form of LTIP awards tied to Granite’s longer-term objectives and performance. Revisions were approved for all NEOs, with
the exception of the CEO, as there were no changes to CEO compensation. The following table summarizes NEO target compensation for 2021 under the revised program: 
  

													
	   Executive

 
  
	  	
2021
Potential STIP Award (as a % of
Base Salary)

 
	 	
2021 LTIP Award
  

	  
	  	 Minimum
  

 
	 	 Target
  

 
	 	 Maximum
  

 
	 	 LTIP Grant

  (% of salary)  
  
	 	 LTIP MIX

 

	  
	 	   Portion in  

RSUs
	 	   Portion in  

PSUs

	   Kevan
Gorrie
  
	  	 0% 
	 	 100%   
	 	 200% 
	 	 115% 
	 	 30% 
	 	 70% 

	   Teresa Neto

 
	  	 0% 
	 	   75%   
	 	 150% 
	 	 95% 
	 	 37% 
	 	 63% 

	   Lorne Kumer

 
	  	 0% 
	 	   75%   
	 	 150% 
	 	 95% 
	 	 37% 
	 	 63% 

	   Michael A. Ramparas

 
	  	 0% 
	 	   75%   
	 	 150% 
	 	 95% 
	 	 37% 
	 	 63% 

	   Lawrence
Clarfield
  
	  	 0% 
	 	   60%   
	 	 120% 
	 	 75% 
	 	 47% 
	 	 53% 

 Employment Agreements 

Each NEO currently employed by Granite is party to an employment agreement with Granite. Each such employment agreement establishes the
NEO’s base salary and right to participate in Granite’s STIP, LTIP and benefit programs and provides for certain payments and benefits on their involuntary termination without cause. 

Each such NEO is required by his or her employment agreement not to solicit employees of Granite and certain other individuals for 12
months following the termination of his employment. Pursuant to their employment agreements, all NEOs are also required to maintain the confidentiality 

  
 - 49 - 

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of Granite’s confidential information. The employment agreement of each NEO also restricts the NEO from engaging in certain activities that would be competitive with Granite’s business
for a period of six months after the end of his or her active employment with Granite. 
 For amounts payable to NEOs on a change of
control or the termination of their employment, see “— Change of Control and Termination Provisions”. 
 Cost of
Management 
 The following table shows Granite’s cost of management ratios, representing the total of all compensation paid
or awarded to the President and CEO and to the NEOs (including the President and CEO) as reflected in the Summary Compensation Table in Granite’s management information circular in respect of each indicated year, expressed as a percentage of
both Granite’s FFO and market capitalization. 
  

											
	 	 	 	 	 
	 Cost of Management, $ millions

 
	 	  	  	 2020

 
	 	 2019(1)

 
	 	 2018(2)

 
	 
	 	 	 	 	 
	 Total CEO
compensation
	 	 A    
	  	 3.1
	 	 2.9
	 	  
	 3.1
	  

	 	 	 	 	 
	 Total NEO
compensation
	 	 B    
	  	 7.4
	 	 6.3
	 	  
	 6.9
	  

	 	 	 	 	 
	 FFO(3)
	 	 C    
	  	 225.4
	 	 177.5
	 	  
	 168.9
	  

	 	 	 	 	 
	 Market
capitalization as of December 31(4)
	 	 D    
	  	 4,805.5
	 	 3,566.4
	 	  
	 2,430.9
	  

	 	 	 	 	 
	 CEO
Compensation:
	 	     
	  		 		 			 
	 	 	 	 	 
	 Cost of
management ratio (based on FFO)
	 	 A/C    
	  	 1.38%
	 	 1.62%
	 	  
	 1.83
	 % 

	 	 	 	 	 
	 Cost of
management ratio (based on market capitalization)
	 	 A/D    
	  	 0.06%
	 	 0.08%
	 	  
	 0.13
	 % 

	 	 	 	 	 
	 NEO
Compensation:(5)
	 	     
	  		 		 			 
	 	 	 	 	 
	 Cost of
management ratio (based on FFO)
	 	 B/C    
	  	 3.28%
	 	 3.55%
	 	  
	 4.11
	 % 

	 	 	 	 	 
	
Cost of management ratio (based on market capitalization)
	 	 B/D    
	  	 0.15%
	 	 0.18%
	 	  
	 0.29
	
% 

  
 Notes: 

	(1)	 2019 Total NEO compensation excludes (i) severance and other payments totaling $2.2 million made to
Granite’s former CFO, Ilias Konstantopoulos, as a result of his departure on May 30, 2019, and (ii) a one-time $400,000 RSU grant made to Ms. Neto in connection with her appointment as
Chief Financial Officer on July 8, 2019. 

  

	(2)	 Amounts include compensation paid by Granite in 2018 to both Mr. Gorrie (who was appointed President and CEO on
August 1, 2018) and Michael Forsayeth (who was CEO during the first part of 2018), but exclude a one-time $2.5 million RSU grant made to Mr. Gorrie on August 1, 2018. 

 

	(3)	 Funds from operations (“FFO”) is a non-IFRS performance
measure that is widely used by the real estate industry in evaluating the operating performance of real estate entities. Figures shown for Granite’s peer group represent FFO as reported by such issuers; however, since non-IFRS measures do not have standardized meanings prescribed by IFRS, they may not be comparable to similar measures reported by other issuers, and each issuer may calculate FFO differently. Granite calculates FFO
as net income attributable to stapled unitholders excluding fair value gains (losses) on investment properties and financial instruments, gains (losses) on sale of investment properties including the associated current income tax, acquisition
transaction costs, deferred income taxes and certain other items, net of non-controlling interests in such items. The Trust’s determination of FFO follows the definition prescribed by the Real Estate
Property Association of Canada (“REALPAC”) White Paper on Funds From Operations & Adjusted Funds From Operations for IFRS dated February 2019 and as subsequently amended. Granite considers FFO to be a meaningful supplemental
measure that can be used to determine the Trust’s ability to service debt, fund capital expenditures and provide distributions to stapled unitholders. FFO is reconciled to net income, which is the most directly comparable IFRS measure. FFO
should not be construed as an alternative to net income or cash flow generated from operating activities determined in accordance with IFRS. For a further discussion of FFO and a quantitative reconciliation to net income, see Granite’s
Management’s Discussion and Analysis of Results of Operations and Financial Position for the year ended December 31, 2020. 

  
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Table of Contents

	(4)	 Represents the total number of outstanding Stapled Units divided by the closing price of the Stapled Units on the TSX
as at December 31 of each year. 

  

	(5)	 NEO compensation for 2018 to 2020 includes compensation paid to Mr. Ramparas and Mr. Clarfield in each of
those years. Mr Ramparas and Mr. Clarfield became NEOs for the first time in 2020 and their compensation was therefore not included in NEO compensation previously disclosed for 2018 or 2019. 

President and CEO Compensation – Look-Back Table 

A primary objective of Granite’s compensation program is to align executive compensation with the financial interests of
Unitholders. The following chart compares the grant date value of compensation awarded to the President and CEO with the actual value realized (or realizable) in respect of such compensation. The chart also compares the compensation earned by the
President and CEO from 2018 to 2020 to the total cumulative Unitholder return over the same period. Mr. Gorrie, the current President and CEO of Granite was appointed on August 1, 2018. 

 

																					
	  
	 	  	 	 	  	 	 	  

Value of $100
  
	 
	   Year

 
	 	 Total Direct
Compensation
Awarded (1)
  
	 	 	  
 Actual
Total
Compensation
Realized or
Realizable as
at
December 31,
2020(2)
  
	 	 	 Period

 
	 	 	 President &
Chief
Executive
Officer(3)
  
	 	 	 Unitholder(4)

 
	 
	 	 	 	 	 	 
	
  2018(5)
	 	 $
	 3,829,166
	 (6) 
	 	 $
	 4,696,015
	  
	 	  
	
August 1 – December 31, 2018
	  
	 	 $
	 123
	  
	 	 $
	 161
	
 

	 	 	 	 	 	 
	
  2019
	 	 $
	 2,877,840
	  
	 	 $
	 3,732,618
	  
	 	  
	
January 1 – December 31, 2019
	  
	 	 $
	 130
	  
	 	 $
	 159
	
 

	 	 	 	 	 	 
	
  2020
	 	 $
	 3,114,400
	  
	 	 $
	 3,314,608
	  
	 	  
	 January 1 – December 31, 2020
	  
	 	 $
	 106
	  
	 	 $
	 123
	
 

	 			 	 	 
	 	 	 	 	 	 	 	 	 	 	  
	 Average
	  
	 	 $
	 120
	  
	 	 $
	 148
	
 

  
 Notes: 

	(1)	 Includes salary, short-term cash incentive payments, and long-term incentive compensation awarded during the period
indicated (as reflected in the Summary Compensation Table below). The 2018 period includes a one-time RSU grant of $2,500,000 as further described in footnote (6) below. 

 

	(2)	 Includes base salary, short-term cash incentive payments, the value of vested RSUs granted in the period indicated
(plus the accumulated re-invested distributions applicable to such vested RSUs), and the fair value of unvested RSUs and PSUs granted in the period indicated (plus the accumulated re-invested distributions applicable to such unvested RSUs and PSUs). Fair value has been determined by multiplying the number of outstanding RSUs and PSUs by $77.90, which was the closing price of the Units as at
December 31, 2020. The outstanding PSUs are included at a multiple of one. 

  

	(3)	 Represents the actual value realized (or realizable) as at December 31, 2020 for each $100 awarded to the CEO in
total direct compensation during the respective period indicated. 

  

	(4)	 Represents the cumulative value as at December 31, 2020 of a $100 investment in Units made on the first day of the
period indicated, assuming the reinvestment of distributions. 

  

	(5)	 Mr. Gorrie was appointed President and CEO on August 1, 2018. 

 

	(6)	 Pursuant to his employment agreement, upon joining Granite, Mr. Gorrie was awarded a one-time special RSU grant of $2,500,000 on the basis of various criteria, including to offset compensation Mr. Gorrie forfeited by changing employers in 2018. Such RSUs vest or vested as to one-third of the total amount on each of August 1, 2019, August 1, 2020, and August 1, 2021. 

  
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 Performance Graph 

The following graph compares the total cumulative Unitholder return for the period from December 31, 2015 to December 31, 2020
with the cumulative total returns of the S&P/TSX Composite Index and the S&P/TSX Capped REIT Index for such period. 
 Cumulative Total
Returns 
 Value of $100.00 Invested on December 31, 2015 
  

 
 

 
  

																															
	 	 	 	 	 	 	 
	Fiscal Period End		 December 31,
2015

 
		 December 31,
2016

 
		 December 31,
2017

 
		 December 31,
2018

 
		 December 31,
2019

 
		
December 31,
2020
  

	 	 	 	 	 	 	 
	
Granite REIT Stapled

Units(1)(2)
		$100.00		$125.45		$145.36		$166.32		$215.64		$265.20
	 	 	 	 	 	 	 
	
S&P/TSX Composite

TR Index(2)
		$100.00		$121.08		$132.08		$120.34		$147.83		$156.11
	 	 	 	 	 	 	 
	
S&P/TSX Capped

REIT TR Index(2)
		$100.00		$117.63		$129.22		$137.99		$168.69		$146.62

  
 Notes: 

	(1)	 Values herein represent total return with dividends and distributions reinvested. 

 

	(2)	 Source of data: Bloomberg. 

The trends identified by the performance graph above show a strong cumulative Unitholder return since December 31, 2015 and that
the Stapled Units have significantly outperformed the total returns of the S&P/TSX Composite Index and the S&P/TSX Capped REIT Index during that period. The total cumulative return from December 31, 2015 to December 31, 2020 for
$100.00 invested in Stapled Units was $265.20, compared to $156.11 for the S&P/TSX Composite Index and $146.62 for the S&P/TSX Capped REIT Index. 

  
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 Between January 1, 2016 and December 31, 2020, the total cumulative return
to Unitholders per $100.00 invested, as a percentage, has been significantly greater than the percentage increase in average compensation paid to NEOs in 2020 as compared to 2016. As noted above, Granite’s compensation philosophy is in part
intended to align executive interests with those of Unitholders by emphasizing “at-risk” compensation tied to Granite’s Stapled Unit price. Part of the total compensation for all NEOs has been
paid in RSUs and, beginning in 2018 for the President and CEO, and in 2019 for all other NEOs, PSUs. These types of compensation provide a direct alignment of Management and Unitholder interests. Furthermore, one of the metrics used in the
calculation of the payout value of the PSUs (and, previously, in the determination of payments under the STIP) has been Granite’s total Unitholder return in a given period compared to the total return of the S&P/TSX Capped REIT Index over
the same period. 
 Summary Compensation Table 

The following table provides information respecting compensation received in or in respect of the financial years ended
December 31, 2020, 2019 and 2018 by each of Granite’s NEOs. 
  

																																					
	  	 	 Year

 
	 	 	 Salary ($)

 
	 	 	
Share-
Based
Awards ($)(1)

 
	 	 	
Option-
Based
Awards
($)
  
	 	 	  

Non-Equity Incentive
 Plan Compensation ($) 

 
	 	 	  Pension 
Value
($)(3)
  
	 	 	 All Other
Compensation

($)(4)

 
	 	 	 Total
Compensation
($)

 
	 
	 Name and

Principal Position
  
	 	  

Annual
Incentive
Plans(2)

 
	 	 	  

 Long-Term 
Incentive
Plans

 
	 
	 	 	 	 	 	 	 	 	 	 
	
Kevan Gorrie
  

President and Chief

Executive Officer
	 	 	2020	 	 	 	800,000	 	 	 	920,000	 	 	 	—	 	 	 	1,394,400	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	3,114,400	 
	 	 	2019	 	 	 	800,000	 	 	 	920,000	 	 	 	—	 	 	 	1,157,840	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	2,877,840	 
	 	 	2018	 	 	 	333,333(5)	 	 	 	3,083,333(6)	 	 	 	—	 	 	 	412,500	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	3,829,166	 
	 	 	 	 	 	 	 	 	 	 
	
Teresa Neto
  

Chief Financial Officer
	 	 	2020	 	 	 	425,000	 	 	 	318,750	 	 	 	—	 	 	 	500,000	 	 	 	—	 	 	 	—	 	 	 	9,077	 	 	 	1,252,827	 
	 	 	2019	 	 	 	204,599(7)	 	 	 	554,275(8)	 	 	 	—	 	 	 	183,776	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	942,650	 
	 	 	2018	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 
	 Lorne Kumer

 
 Executive Vice

President, Head

of Global Real

Estate
	 	 	2020	 	 	 	425,000	 	 	 	318,750	 	 	 	—	 	 	 	500,000	 	 	 	—	 	 	 	—	 	 	 	9,077	 	 	 	1,252,827	 
	 	 	2019	 	 	 	425,000	 	 	 	396,490(9)	 	 	 	—	 	 	 	370,133	 	 	 	—	 	 	 	—	 	 	 	8,833	 	 	 	1,200,456	 
	 	 	2018	 	 	 	415,125	 	 	 	400,000	 	 	 	—	 	 	 	411,344	 	 	 	—	 	 	 	—	 	 	 	8,743	 	 	 	1,235,212	 
	 Michael A. Ramparas(10)
  

Executive Vice

President, Global Real

Estate and Head of

Investments
	 	 	2020	 	 	 	360,000	 	 	 	216,000	 	 	 	—	 	 	 	380,000	 	 	 	—	 	 	 	—	 	 	 	9,077	 	 	 	965,077	 
	 	 	2019	 	 	 	325,000	 	 	 	244,492(11)	 	 	 	—	 	 	 	236,535	 	 	 	—	 	 	 	—	 	 	 	8,833	 	 	 	814,860	 
	 	 	2018	 	 	 	275,000	 	 	 	200,000	 	 	 	—	 	 	 	250,000	 	 	 	—	 	 	 	—	 	 	 	8,250	 	 	 	733,250	 
	 Lawrence Clarfield

 
 Senior Vice President,

Legal Counsel and

Corporate Secretary
	 	 	2020	 	 	 	315,000	 	 	 	189,000	 	 	 	—	 	 	 	300,000	 	 	 	—	 	 	 	—	 	 	 	9,077	 	 	 	813,077	 
	 	 	2019	 	 	 	275,000	 	 	 	206,919(12)	 	 	 	—	 	 	 	200,145	 	 	 	—	 	 	 	—	 	 	 	8,250	 	 	 	690,314	 
	 	 	2018	 	 	 	225,000	 	 	 	150,000	 	 	 	—	 	 	 	175,000	 	 	 	—	 	 	 	—	 	 	 	6,750	 	 	 	556,750	 

  
 Notes: 

	(1)	 Share-based awards represent grants of RSUs and PSUs under the Executive Deferred Stapled Unit Plan, as determined by
the Board. The grant date fair value of an RSU and a PSU is equal to, in Canadian dollars, the volume-weighted average trading price per Stapled Unit on the stock exchange on which the highest volume of Stapled Units was traded on the relevant days
during the five trading days immediately preceding the grant date of the RSU 

  
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or PSU. The Executive Deferred Stapled Unit Plan provides for the accrual of distribution-equivalent amounts based on distributions paid on the Stapled Units. The value shown for these awards is
the same as the grant date fair value without any adjustment for subsequent distribution-equivalent grants. See “— Long-Term Incentive Plan (LTIP)”. 

 

	(2)	 Generally, each NEO is awarded an annual cash bonus based on Granite’s compensation practices and policies, as
described above under “— Short-Term Incentive Plan (STIP)”. Cash bonuses relating to performance during 2020 were paid as a lump sum in the first quarter of 2021. 

 

	(3)	 None of the NEOs participate in any defined benefit, defined contribution, actuarial, or any other form of plan
provided by Granite that provides for payments or benefits at, following, or in connection with, retirement. 

  

	(4)	 Perquisites and other personal benefits for each NEO did not exceed the lesser of $50,000 or 10% of his or her
respective total annual salary during 2017, 2018 or 2019. For Ms. Neto, Mr. Kumer, Mr. Ramparas and for Mr. Clarfield, the amounts reflect Granite’s contribution towards the NEO’s registered retirement savings plan.

  

	(5)	 Mr. Gorrie was appointed President and CEO on August 1, 2018. On an annualized basis for 2018,
Mr. Gorrie’s base salary would have been $800,000. No amounts of Mr. Gorrie’s compensation were received for services as a trustee and director. 

 

	(6)	 Pursuant to his employment agreement, upon joining Granite, Mr. Gorrie was awarded a one-time special RSU grant of $2,500,000 on the basis of various criteria, including to offset compensation Mr. Gorrie forfeited by changing employers in 2018. Such RSUs vest or vested as to one-third of the total amount on each of August 1, 2019, August 1, 2020, and August 1, 2021. 

  

	(7)	 Ms. Neto was appointed Chief Financial Officer effective July 8, 2019. On an annualized basis for 2019,
Ms. Neto’s base salary would have been $425,000. 

  

	(8)	 Pursuant to her employment agreement, upon joining Granite, Ms. Neto was awarded a
one-time special RSU grant of $400,000 on the basis of various criteria, including to offset compensation Ms. Neto forfeited by changing employers in 2019. Such RSUs vest or vested as to one-third of the total amount on each of August 12, 2020, August 12, 2021, and August 12, 2022. 

  

	(9)	 In addition to Mr. Kumer’s annual LTIP entitlement equal to 75% of his base salary, in conjunction with
entering into his amended employment agreement in 2019, he received a one-time grant of RSUs and PSUs with a grant date value of $77,740. 

 

	(10)	 Mr. Ramparas was appointed Executive Vice President, Global Real Estate and Head of Investments effective
January 1, 2021. 

  

	(11)	 In addition to Mr. Ramparas’ annual LTIP entitlement equal to 60% of his base salary, in conjunction with
entering into his amended employment agreement in 2019, he received a one-time grant of RSUs and PSUs with a grant date value of $49,492. 

 

	(12)	 In addition to Mr. Clarfield’s annual LTIP entitlement equal to 60% of his base salary, in conjunction with
entering into his amended employment agreement in 2019, he received a one-time grant of RSUs and PSUs with a grant date value of $41,919. 

  
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 Incentive Plan Awards 

Outstanding Share-Based Awards 
 The
following table provides information regarding the incentive plan awards outstanding as of December 31, 2020 for each NEO. There are no option-based awards outstanding as of December 31, 2020 for NEOs. 

 

																
	 	 	 	 
	 Name

 
		 Number of Shares or

Units of Shares that
 Have Not Vested

(#)(1)

 
		 Market or Payout Value of

Share-Based Awards that
 Have Not Vested

($)(2)

 
		 Market or Payout Value
of
 Vested Share-Based
 Awards Not Paid
Out or
 Distributed
 ($)(2)
  

	 	 		 
	
Kevan Gorrie

President and Chief Executive Officer
		55,566		$4,348,595		-
	 	 		 
	
Teresa Neto

Chief Financial Officer
		11,835		$926,207		-
	 	 		 
	
Lorne Kumer

Executive Vice President,

Head of Global Real Estate
		17,444		$1,365,167		-
	 	 		 
	
Michael A. Ramparas

Executive Vice President, Global Real

Estate and Head of Investments
		9,860		$771,644		-
	 	 		 
	 Lawrence Clarfield

Senior Vice President, Legal Counsel

and Corporate Secretary
  
		8,341		$652,767		-

  
 Notes: 

	(1)	 The numbers in this column represent entitlements under the Executive Deferred Stapled Unit Plan and include
share-based awards that were received as distribution equivalents payable on share-based awards. References to “shares” should be read as references to “Stapled Units”. 

 

	(2)	 The indicated value is calculated, in Canadian dollars, by multiplying the
five-day volume-weighted average trading price per Stapled Unit on the stock exchange on which the highest volume of Stapled Units was traded on the relevant days during the five trading days immediately
preceding December 31, 2020, which was $78.26, by the applicable number of RSUs and PSUs. Subject to blackout restrictions, vested RSUs and PSUs are generally settled within 60 days. 

  
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 Value Vested or Earned During the Year 

The following table provides information regarding all option-based or share-based awards that have vested, and all non-equity incentive plan compensation earned, during the financial year ended December 31, 2020. 
  

																
	 	 	 	 
	 Name

 
		 Option-based awards-
Value vested
during
 the year
 ($)(1)
  
		 Share-based awards —
Value vested during
the year

($)(2)

 
		 Non-equity incentive plan
compensation-Value
 vested during the year

($)(3)

 

	 	 		 
	
Kevan Gorrie

President and Chief Executive Officer
		-		1,513,306		1,394,400
	 	 		 
	
Teresa Neto

Chief Financial Officer
		-		201,630		500,000
	 	 		 
	
Lorne Kumer

Executive Vice President,

Head of Global Real Estate
		-		803,181		500,000
	 	 		 
	 Michael A. Ramparas

Executive Vice President, Global Real Estate and Head of Investments
		-		286,286		380,000
	 	 		 
	 Lawrence Clarfield

Senior Vice President, Legal Counsel and Corporate Secretary
		-		265,586		300,000

  
 Notes: 

	(1)	 No options have been granted under the stock option plan since August 10, 2010. Granite no longer grants stock
options under the stock option plan. 

  

	(2)	 The indicated value is calculated, in Canadian dollars, by multiplying the volume-weighted average trading price per
Stapled Unit on the stock exchange on which the highest volume of Stapled Units was traded on the relevant days during the five trading days immediately preceding the vesting date of the RSUs by the number of vested RSUs. No PSUs vested in 2020.

  

	(3)	 These are the same amounts as disclosed under the “Annual Incentive Plans” column in the Summary Compensation
Table above. 

 Change of Control and Termination Provisions 

The employment agreements entered into with each NEO contain the termination and change in control benefits that are summarized below.
For a table setting out the estimated termination and change of control payments that would be payable by Granite if the triggering event occurred on December 31, 2020, see “— Summary of Change of Control and Termination
Benefits” below. See also “— Employee Agreements” for more details. 
 Change of Control Benefits 

The change of control provisions in the employment agreement for Mr. Gorrie provide that if Granite terminates
Mr. Gorrie’s employment without just cause following a “Change in Control” (generally defined as (i) the acquisition of more than 50% of the equity securities of Granite by a third party, (ii) the sale of all or
substantially all of the assets of Granite to a third party, (iii) the receipt of all necessary approvals to authorize the dissolution and liquidation of Granite, or (iv) in connection with a contested election of directors, persons who
were directors of Granite before such election ceasing to constitute a majority of the Board), then he will be entitled to receive base salary, medical and other benefits, expenses and accrued vacation up to the last day of his employment; a STIP
award, based on his target STIP award, on a pro-rata basis up to the last day of his employment; and 

  
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a payment equal to 18 months’ compensation plus two months’ compensation for each year of completed service, to a maximum of 24 months’ compensation after three years of completed
service. “Compensation”, for the purpose of the prior sentence, means (a) Mr. Gorrie’s base salary; (b) the greater of (x) his STIP award in respect of the most recent year, and (y) the average of his STIP
awards in respect of the most recent two completed years; and (c) the regular annual LTIP award provided for in Mr. Gorrie’s employment agreement (calculated, in respect of PSUs, at 100%, i.e. without any increase or decrease on the
basis of performance conditions). Upon such a termination, any unvested RSUs and PSUs will vest immediately, provided that in respect of RSUs and PSUs awarded in the year in which such termination occurs, a
pro-rata portion of the RSUs and PSUs, calculated on the basis of the portion of the calendar year remaining after such termination, will expire unvested. PSUs that vest in such circumstances will vest giving
effect to any increase or decrease in Mr. Gorrie’s entitlement in respect to such PSUs on the basis of the performance conditions of such PSUs up to the date of termination. 

The change of control provisions in the employment agreements for Ms. Neto, Mr. Kumer, Mr. Ramparas and
Mr. Clarfield provide that if Granite terminates the NEO’s employment without just cause following a “Change in Control” (generally defined as (i) the acquisition of more than 50% of the equity securities of Granite by a
third party, (ii) the sale of all or substantially all of the assets of Granite to a third party, or (iii) an event that the Board determines to be a change in control), then such NEO will be entitled to receive base salary, medical and
other benefits, expenses and accrued vacation up to the last day of such NEO’s employment; a STIP award, based on such NEO’s target STIP award (or in the case of Mr. Ramparas and Mr. Clarfield not less than 50% of his base
salary), on a pro-rata basis up to the last day of such NEO’s employment; and a payment equal to 18 months’ compensation in the case of Ms. Neto, 24 months’ compensation in the case of
Mr. Kumer, 15 months’ compensation in the case of Mr. Ramparas and 15 months’ compensation in the case of Mr. Clarfield. “Compensation”, for the purpose of the prior sentence, means (a) such NEO’s base
salary; (b) a STIP award equal the greater of (x) the NEO’s STIP award in respect of the most recent year, and (y) the average of the NEO’s STIP awards in respect of the most recent two completed years; and (c) the
regular annual LTIP award provided for in such NEO’s employment agreement (calculated, in respect of PSUs, at 100%, i.e., without any increase or decrease on the basis of performance conditions). Upon such a termination, any unvested RSUs and
PSUs will vest immediately, provided that in respect of RSUs and PSUs awarded in the year in which such termination occurs, a pro-rata portion of the RSUs and PSUs, calculated on the basis of the portion of
the calendar year remaining after such termination, will expire unvested. PSUs that vest in such circumstances will vest giving effect to any increase or decrease in the NEO’s entitlement in respect to such PSUs on the basis of the performance
conditions of such PSUs up to the date of termination. 
 Termination Benefits 

Upon any termination of Mr. Gorrie’s employment, his employment agreement provides that he is entitled to receive his base
salary, medical and other benefits, expenses and accrued vacation up to the last day of his employment. 
 Mr. Gorrie’s
employment agreement provides that Mr. Gorrie may resign, or his employment may be terminated by Granite for just cause, without any additional payments or benefits, other than the foregoing. If Mr. Gorrie terminates his employment for
“good reason”, or if Granite terminates his employment without cause or because of a disability that has caused him to be unable to fulfil his duties, Mr. Gorrie would be entitled to receive a STIP award, based on his target
STIP award, on a pro-rata basis up to the last day of his employment, as well as a payment equal to 18 months’ compensation plus two months’ compensation for each year of completed service, to a
maximum of 24 months’ compensation after three years of completed service. “Compensation”, for the purpose of the prior sentence, means (a) Mr. Gorrie’s base salary; (b) the greater of (x) his STIP award in

  
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respect of the most recent year, and (y) the average of this STIP awards in respect of the most recent two completed years; and (c) the regular annual LTIP award provided for in
Mr. Gorrie’s employment agreement (calculated, in respect of PSUs, at 100%, i.e., without any increase or decrease on the basis of performance conditions). Upon such a termination, any unvested RSUs and PSUs will vest immediately, provided
that (a) in respect of RSUs and PSUs awarded in the year in which such termination occurs, a pro-rata portion of the RSUs and PSUs, calculated on the basis of the portion of the calendar year remaining
after such termination, will expire unvested; and (b) in the case of termination because of the occurrence of a disability, any outstanding RSUs issued as a signing bonus will vest on a pro-rata basis,
calculated with regard to the period of time between the date on which such RSUs most recently vested and the last day of employment. PSUs that vest in such circumstances will vest giving effect to any increase or decrease in the executive’s
entitlement in respect to such PSUs on the basis of the performance conditions of such PSUs up to the date of termination. 
 For
purposes of Mr. Gorrie’s employment agreement, “good reason” means the occurrence of any of the following: (i) the assignment to Mr. Gorrie of any duties materially inconsistent with Mr. Gorrie’s position,
duties and responsibilities with Granite, except in connection with the termination of Mr. Gorrie’s employment for just cause; (ii) any material reduction in Mr. Gorrie’s base salary, benefits or perquisites; (iii) a
material reduction in Mr. Gorrie’s ability to earn incentive compensation or bonuses, excluding a reduction caused by the failure of Mr. Gorrie to meet incentive compensation targets or goals, and except where Granite provides a
comparable form of remuneration; (iv) the location of Granite’s facilities where Mr. Gorrie is based is relocated more than 100 kilometers from its current location and more than 100 kilometers from Mr. Gorrie’s current
residence; (v) Mr. Gorrie is no longer reporting to the Board or is not nominated for election as a director at any annual general meeting of shareholders of Granite GP; and (vi) the removal of duties from Mr. Gorrie in his
capacity as CEO which is inconsistent with the duties of a CEO of a public real estate investment trust. 
 Upon any termination of
Ms. Neto’s, Mr. Kumer’s, Mr. Ramparas’ or Mr. Clarfield’s employment, their respective employment agreements provide that they are entitled to receive their base salary, medical and other benefits, expenses
and accrued vacation up to the last day of their employment. 
 The employment agreements of each of Ms. Neto, Mr. Kumer,
Mr. Ramparas and Mr. Clarfield provide that they may resign, or their employment may be terminated by Granite for just cause, without any additional payments or benefits, other than the foregoing. If Ms. Neto, Mr. Kumer,
Mr. Ramparas or Mr. Clarfield terminate their employment for “good reason”, or if Granite terminates their employment without cause or because of a disability that has caused them to be unable to fulfil their respective duties,
then such NEO will be entitled to receive base salary, medical and other benefits, expenses and accrued vacation up to the last day of his or her employment; a STIP award, based on such NEO’s target STIP award (or in the case of
Mr. Ramparas and Mr. Clarfield not less than 50% of his base salary), on a pro-rata basis up to the last day of his or her employment; and a payment equal to 18 months’ compensation in the case
of Ms. Neto, 24 months’ compensation in the case of Mr. Kumer, 15 months’ compensation in the case of Mr. Ramparas and 15 months’ compensation in the case of Mr. Clarfield. “Compensation”, for the purpose
of the prior sentence, means (a) such NEO’s base salary; (b) a STIP award equal to the greater of (x) the NEO’s STIP in respect of the most recent year, and (y) the average of the NEO’s STIP awards in respect of
the most recent two completed years; and (c) the regular annual LTIP award provided for in such NEO’s employment agreement (calculated, in respect of PSUs, at 100%, i.e., without any increase or decrease on the basis of performance
conditions). Upon such a termination, any unvested RSUs and PSUs will vest immediately, provided that in respect of RSUs and PSUs awarded in the year in which such termination occurs, a pro-rata portion of the
RSUs and PSUs, 

  
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calculated on the basis of the portion of the calendar year remaining after such termination, will expire unvested. PSUs that vest in such circumstances will vest giving effect to any increase or
decrease in the executive’s entitlement in respect to such PSUs on the basis of the performance conditions of such PSUs up to the date of termination. 

For purposes of the employment agreements of Ms. Neto, Mr. Kumer, Mr. Ramparas and Mr. Clarfield, “good
reason” means the occurrence of any of the following: (i) the assignment to such NEO, of any duties materially inconsistent with the NEO’s position, duties and responsibilities with Granite, except in connection with the termination
of the NEO’s employment; (ii) any material reduction in the NEO’s base salary, benefits or perquisites; (iii) a material reduction in the NEO’s ability to earn incentive compensation or bonuses, excluding a reduction caused
by the failure of the NEO or Granite to meet incentive compensation targets or goals, and except where Granite provides a comparable form of remuneration; (iv) the location of Granite’s facilities where the NEO is based is relocated more
than 100 kilometers from its current location and more than 100 kilometers from the NEO’s current residence; (v) the NEO is no longer reporting to the CEO; (vi) in the case of Ms. Neto, the removal of duties from Ms. Neto in
her capacity as Chief Financial Officer which is inconsistent with the duties of a Chief Financial Officer of a public real estate investment trust; (vii) in the case of Mr. Kumer, the removal of material duties or responsibilities from
his role; (viii) in the case of Mr. Kumer, Granite GP or Granite REIT is no longer a reporting issuer; (ix) in the case of Mr. Ramparas, the removal of duties from Mr. Ramparas, in his capacity as Executive Vice President,
Global Real Estate and Head of Investments which is inconsistent with the duties of an Executive Vice President, Global Real Estate and Head of Investments of a public real estate investment trust; and (x) in the case of
Mr. Clarfield, the removal of duties from Mr. Clarfield, in his capacity as Senior Vice President, Legal Counsel and Corporate Secretary which is inconsistent with the duties of a Senior Vice President, Legal Counsel and Corporate
Secretary of a public real estate investment trust. 
 Summary of Change of Control and Termination Benefits 

The following table provides details regarding the estimated payments to each of the NEOs currently employed by Granite (i) in the
event of termination (without cause) on December 31, 2020 in connection with a “Change of Control” as described above, and (ii) in the event of termination by Granite (without cause) on December 31, 2020 other than in
connection with a Change of Control. 
  

					
	  Name  
	 	  

Estimated Change of Control         

Termination Payment         

($)(1)         

 
	 	  

Estimated Termination         

Payment         

($)(1)         

 

	 	 	 
	
Kevan Gorrie
 President and Chief Executive
Officer
  
	 	7,028,800         	 	7,028,800       
	 	 	 
	
Teresa Neto
 Chief Financial Officer

 
	 	2,078,125         	 	2,078,125       
	 	 	 
	
Lorne Kumer
 Executive Vice President, Head of
Global Real Estate
  
	 	2,700,000         	 	2,700,000       
	 	 	 
	
Michael Ramparas
 Executive Vice President,
Global Real Estate and Head of Investments
  
	 	1,375,000         	 	1,375,000       
	 	 	 
	 Lawrence
Clarfield
 Senior Vice President, Legal Counsel and Corporate Secretary

 
	 	1,162,500         	 	1,162,500       

  
 Note: 

	(1)	 In addition, all unvested RSUs or other unvested equity-based compensation will accelerate and vest.

  
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 Equity Compensation Plan Information 

The following table provides information on Granite’s equity compensation plans as at December 31, 2020. 

 

							
	 Plan Category

 
	 	  

Number of Securities to be         

Issued upon Exercise of         

Outstanding Options or         

Upon Settlement of Share         

Rights         

 
	 	  

Weighted-Average         

Exercise Price of         

Outstanding Options         

($)         

 
	 	  

Number of Securities     

Remaining Available for     

Future Issuance under     

Equity Compensation Plans     

(Excluding Securities to be     

Issued upon Exercise of     

Outstanding Options or     

Upon Settlement of Share     
Rights)     

 

	 	 	 	 
	
Stock option plan approved by securityholders(1)

 
	 	 — 
	 	 — 
	 	 1,886,544 

	 	 	 	 
	
Executive Deferred Stapled

Unit Plan approved by securityholders

 
	 	 128,338 
	 	 — 
	 	 635,957 

	 	 	 	 
	
Total
  
	 	128,338  
	 	—  
	 	2,522,501  

  
 Note: 

	(1)	 No options have been granted under the stock option plan since August 10, 2010. Granite no longer grants stock
options under the stock option plan.  

 Description of the Executive Deferred Stapled Unit Plan 

The following is a summary of the material features of the Executive Deferred Stapled Unit Plan. 

Effective August 7, 2011, the board of directors of Granite Co. adopted the Executive Share Unit Plan (now the Executive Deferred
Stapled Unit Plan), which is designed to provide equity-based compensation in the form of deferred stapled units to employees of Granite or any of Granite’s subsidiaries, partnerships, trusts or other controlled entities who are, by the nature
of their position or job, in a position to contribute to the success of Granite (the “Participants”) as determined by the CGN Committee. The Executive Deferred Stapled Unit Plan was approved by the shareholders of Granite Co. at the
annual general and special meeting held on June 13, 2012. 
 The Executive Deferred Stapled Unit Plan entitles a Participant to
receive grants of deferred stapled units (“Grants”), at the discretion of the CGN Committee, in the form of PSUs (each representing the right to receive one Stapled Unit or the market value thereof for each PSU that vests as
described below under “— Vesting and Settlement”) or RSUs (each representing the right to receive one Stapled Unit or the market value thereof as described below under “— Vesting and Settlement” and
“— Grant Terms”), which will vest either after the attainment of certain performance conditions (in the case of PSUs) or after a continuous period of employment (in the case of RSUs). The specific vesting conditions for each PSU
or RSU shall be determined by the CGN Committee and approved by the Board. 
 Purposes of the Executive Deferred Stapled Unit Plan 

The purposes of the Executive Deferred Stapled Unit Plan are to promote a further alignment of interests between employees and the
Unitholders; to associate a portion of employees’ compensation with the returns achieved by Unitholders; and to recruit and retain employees with the knowledge, experience and expertise required by Granite. 

  
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 Securities Issuable 

Up to 1,000,000 previously unissued Stapled Units may be issued under the Executive Deferred Stapled Unit Plan, representing
approximately 1.62% of Granite’s outstanding Stapled Units as of December 31, 2020. As at December 31, 2020, 235,705 Stapled Units had been issued under settled RSUs, and 128,338 Stapled Units were issuable under outstanding RSUs and
PSUs, representing approximately 0.38%, and 0.21%, respectively, of the number of outstanding Stapled Units. Accounting for RSUs previously settled, and assuming the settlement of all outstanding RSUs and PSUs in previously unissued Stapled Units,
635,957 Stapled Units remain available to be issued under the Executive Deferred Stapled Unit Plan as of December 31, 2020, representing approximately 1.0% of Granite’s outstanding Stapled Units as of December 31, 2020. 

The “burn rate” (calculated by dividing the number of awards granted during the applicable year, by the weighted average
number of basic securities outstanding for the applicable year) for the Executive Deferred Stapled Unit Plan was 0.09% in 2020, 0.20% in 2019 and 0.20% in 2018. 

No one Participant may receive any Grants which together with all Grants then held by such Participant would permit such Participant to
be issued a number of Stapled Units which would be greater than 1% of all Stapled Units outstanding. In addition: (i) the number of Stapled Units issuable to insiders of Granite at any time, under all security based compensation arrangements of
Granite, shall not exceed 10% of the total outstanding Stapled Units; and (ii) the number of Stapled Units issued to any insiders, within any one year period, under all security based compensation arrangements of Granite, shall not exceed 10%
of the total outstanding Stapled Units. 
 Vesting and Settlement 

A deferred stapled unit shall be settled, upon or as soon as practicable after its vesting, in cash (in an amount equal to the market
value of the relevant Stapled Units), in Stapled Units delivered from a trust established to acquire and hold Stapled Units purchased from third parties or in previously unissued Stapled Units issued by Granite, or any combination thereof, as
determined by the CGN Committee. Market value for the purposes of settling a deferred stapled unit in cash on any settlement date shall generally be based on the volume-weighted average trading price per Stapled Unit on the stock exchange on which
the highest volume of Stapled Units is traded on the relevant day(s) during the five trading days immediately preceding the settlement date. Vesting conditions in respect of a Grant are determined by the CGN Committee at the time the Grant is made
and may result in the vesting of more or less than 100% of the number of deferred stapled units included in a Grant at the time the Grant is made where a multiplier applies to such deferred stapled units based on the extent to which such vesting
conditions are met. 
 The Executive Deferred Stapled Unit Plan also provides for the accrual of dividend/distribution equivalent
amounts based on dividends/distributions paid on the Stapled Units. 
 Grant Terms 

The CGN Committee determines the terms and conditions of Grants to any Participant, including, without limitation: the type of deferred
stapled unit; the number of RSUs or PSUs subject to a Grant; the vesting period(s) applicable to a Grant; the conditions to the vesting of any deferred stapled units granted, including terms relating to performance conditions to be met or conditions
relating to continued service with Granite or its affiliate; any multiplier that may apply to deferred stapled units subject to a Grant in connection with the achievement of vesting conditions and which may result in the number of deferred stapled
units that vest being more or less than the number of deferred stapled units included in the Grant at the time the Grant is made; the performance period 

  
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for PSUs and the conditions, if any, upon which vesting of any deferred stapled unit will be waived or accelerated without any further action by the CGN Committee; the circumstances in which a
deferred stapled unit shall be forfeited or cancelled or expire; the consequences of a grantee’s termination with respect to a deferred stapled unit; whether and the terms upon which any Stapled Units delivered upon exercise or settlement of a
deferred stapled unit must continue to be held by a Participant for any specified period; and whether and the extent to which any performance conditions or other criteria applicable to the vesting of a deferred stapled unit have been satisfied or
shall be waived or modified. The Executive Deferred Stapled Unit Plan provides that the number of deferred stapled units to be covered by a Grant shall generally be determined by dividing the value of the Grant by the volume-weighted average trading
price per Stapled Unit on the stock exchange on which the highest volume of Stapled Units is traded on the relevant day(s) during the five trading days immediately preceding the grant date for such Grant, rounded up to the next whole number. 

Assignability and Cessation of Entitlement 

Subject to the terms of the relevant Participant’s employment agreement, in the event that a Participant’s employment is
terminated without cause or the Participant dies or experiences certain disability events prior to the vesting date of any Grant, such Participant’s deferred stapled units will thereupon become vested in an amount equal to the product of
(i) the number of deferred stapled units which have not previously vested plus any dividend/distribution equivalent deferred stapled units in respect thereof (assuming, in the case of PSUs, that the relevant Participant was employed until the
end of the applicable vesting period and taking into account the extent to which the applicable performance conditions were achieved), multiplied by (ii) a fraction, the numerator of which is the number of months between (A) the first day
of the relevant vesting period or, if the deferred stapled units are subject to more than one vesting date in a single vesting period, the most recent vesting date that precedes the date of termination, death or disability and (B) the date the
employee is terminated, dies or becomes disabled, and the denominator of which is the total number of months between the date determined for the purposes of clause (A), above, and the last day in the relevant vesting period. 

Subject to the terms of a Participant’s written employment agreement, in the event a Participant’s employment is terminated
for cause or if the Participant resigns, no deferred stapled units which have not vested and settled prior to the date of the Participant’s termination or resignation, as the case may be, including dividend/distribution equivalent deferred
stapled units in respect of such deferred stapled units, shall vest, and all such deferred stapled units shall be forfeited immediately. 

Other than by designating a beneficiary to receive any benefits that are payable under the Executive Deferred Stapled Unit Plan upon the
death of a Participant, or by operation of law, a Participant shall not be permitted to assign or transfer any deferred stapled units. 
 Amendment of the
Executive Deferred Stapled Unit Plan 
 The Executive Deferred Stapled Unit Plan and any Grants made pursuant thereto may be
amended, modified or terminated by the Board without approval of Unitholders. Such changes could include accelerating the vesting of a Grant. Notwithstanding the foregoing, the Executive Deferred Stapled Unit Plan or any Grant may not be amended
without Unitholder approval to: 
  

	 	(a)	 increase the number of Stapled Units issuable on settlement of outstanding deferred stapled units;

  

	 	(b)	 permit a Participant to transfer or assign deferred stapled units to a new beneficial holder other than to a
beneficiary in the event of the Participant’s death; 

  
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	 	(c)	 increase the number of Stapled Units that may be issued to insiders above the restrictions contained in the Executive
Deferred Stapled Unit Plan; 

  

	 	(d)	 add additional categories of Participants; or 

 

	 	(e)	 amend the Executive Deferred Stapled Unit Plan to delete any of the limitations on amendments described in
(a) through (d) above. 

 In addition, no amendment to the Executive Deferred Stapled Unit Plan or Grants made
pursuant thereto may be made without the consent of a Participant if it adversely alters or impairs the rights of the Participant in respect of any Grant previously granted to such Participant, except that Participant consent shall not be required
where the amendment is required for purposes of compliance with applicable law. 
 STATEMENT OF
CORPORATE GOVERNANCE PRACTICES 
  

Granite has adopted certain structures and procedures to ensure that effective corporate governance practices are followed and that the
Boards of Granite REIT and Granite GP function independently of Management. The following describes Granite’s approach to corporate governance. 
 
Applicable Governance Requirements and Guidelines 
 Granite is subject to a number of legislative and regulatory corporate
governance requirements and guidelines, including those of the TSX, the Canadian Securities Administrators, the NYSE and the SEC. These include the Corporate Governance Listing Standards of the NYSE, the Sarbanes-Oxley Act of 2002, and the
guidelines contained in National Policy 58-201 — Corporate Governance Guidelines (“National Policy 58-201”).
Granite’s website, www.granitereit.com, contains various charters and policies that have been adopted by Granite pursuant to corporate governance requirements and guidelines, as well as information on its compliance with the NYSE’s
corporate governance standards. Management, the CGN Committee and the Boards will continue to monitor corporate governance developments and initiatives with a view to continuing to make all necessary and appropriate changes to Granite’s
corporate governance structures and procedures as required from time to time. 
 In this Statement of Corporate Governance Practices
Section, references to the “Board” or “Boards” refer to the board of trustees of Granite REIT and/or the board of directors of Granite GP, as applicable. 

The following is a statement of Granite’s existing corporate governance practices with specific reference to the guidelines
contained in National Policy 58-201 and the disclosure required by National Instrument 58-101 — Disclosure of Corporate Governance
Practices. 
 Board of Trustees of Granite REIT and Board of Directors of Granite GP 

The Boards of Granite REIT and Granite GP are composed of the same nine individuals. It is the policy of Granite that a majority of
Board members be “independent” (as defined in National Instrument 52- 110 — Audit Committees (“NI 52-110”), as well as in the
NYSE corporate governance standards applicable to boards of directors). The Boards have considered the circumstances of each of their current members and have concluded that eight of such members (Messrs. Aghar, Daal, Marshall, Mawani and Miller and
Ms. Grodner, Ms. Murray and Ms. Warren) are “independent” based 

  
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on the applicable tests. In reaching these conclusions, the Boards determined that each such person is free from any direct or indirect material relationship — being a relationship
which could reasonably interfere with his or her independent judgment — with Granite. Mr. Gorrie, the President and CEO of Granite REIT and Granite GP, is a member of Management and, as a result, not an independent trustee or
director. Mr. Marshall, an independent trustee and director, is currently the chair of each of the Boards (the “Chair”). 

The Boards are committed to facilitating open and candid discussion among their independent trustees and directors. An in camera
session of independent trustees and directors is scheduled at each Board meeting to provide the independent trustees and directors the opportunity to discuss matters without Management present. In 2020, six such in camera sessions of
independent trustees and directors were held. The independent trustees and directors met without Management present at each of the regularly scheduled Board and committee meetings held in 2020. Meetings of independent trustees and directors are also
separately called as necessary. In addition to the regularly scheduled board and committee meetings, in 2020, the Board held six additional meetings to monitor the emerging risks of
COVID-19, its impact on Granite’s business and Granite’s response to the pandemic. Granite believes that the size of the Board facilitates direct and immediate communication among independent
trustees and directors (and between such trustees and directors and the full Board and Management) and permits the direct involvement by individual Board members in specific matters where their personal inclination or experience will assist the
Board and Management in dealing with a specific issue. 
 As noted above, the Boards held a total of 12 meetings in 2020. Each
director and trustee attended all Board meetings held in 2020. The attendance record of each Proposed Trustee and Proposed Director is also detailed above under “Matters to be Acted Upon at the Meetings — Election of Trustees of
Granite REIT”. 
 Board Mandates 

Granite REIT 
 In general, the Board
of Granite REIT is responsible for the stewardship of Granite REIT (which is a limited partner of Granite REIT Holdings Limited Partnership (“Granite LP”), the principal subsidiary of Granite). As a limited partner of Granite LP,
the activities of the Board of Granite REIT are more limited than those of the Board of Granite GP. The Board of Granite REIT oversees the affairs of Granite REIT and establishes and approves overall policies for Granite REIT as required. The Board
of Granite REIT operates pursuant to its written charter (the full text of which is posted on Granite’s website at www.granitereit.com, and attached as Appendix “A” to this Circular), as well as the Granite REIT Declaration of Trust
and applicable law. According to its charter, the Board of Granite REIT bears principal responsibility for, among other things: 
  

	 	●	 	 reviewing reports of the CGN Committee from time to time concerning Granite REIT’s approach to governance;

  

	 	●	 	 periodically reviewing Granite REIT’s disclosure policy and its compliance with it, and approving any material
amendments to the policy; 

  

	 	●	 	 communicating with Unitholders through an annual report, an annual information form, quarterly interim reports and
periodic press releases; and 

  

	 	●	 	 appointing an audit committee and other committees of the Board of Granite REIT as considered appropriate from time to
time. 

  
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 Granite GP 

In general, the Board of Granite GP is responsible for the stewardship of Granite GP (which acts as general partner of Granite LP, the
principal subsidiary of Granite) and the establishment of Granite’s strategic direction. The Board of Granite GP oversees the business and affairs of Granite GP and the day to day conduct of business by Management, establishes and approves
overall corporate policies as required and involves itself jointly with Management in pursuing the creation of Unitholder value and preserving and protecting Granite’s assets. The Board of Granite GP operates pursuant to its written charter
(the full text of which is posted on Granite’s website, www.granitereit.com, and attached as Appendix “B” to this Circular), as well as Granite GP’s articles and applicable law. According to its charter, the Board of Granite GP
bears principal responsibility for, among other things: 
  

	 	●	 	 reviewing reports of the CGN Committee from time to time concerning Granite GP’s approach to governance;

  

	 	●	 	 periodically reviewing Granite GP’s disclosure policy and its compliance with it, and approving any material
amendments to the policy; 

  

	 	●	 	 communicating with Unitholders through an annual report, annual information form, quarterly interim reports and periodic
press releases; 

  

	 	●	 	 appointing an audit committee and other committees of the Board of Granite GP as considered appropriate from time to
time; 

  

	 	●	 	 periodically reviewing and, if advisable, approving Granite’s strategic planning process and Granite’s
strategic plan; in discharging this responsibility, the Board of Granite GP shall review the plan in light of Management’s assessment of emerging trends, the competitive environment, the opportunities and risks of the business, and business
practices in the industry; 

  

	 	●	 	 periodically reviewing and, if advisable, approving Granite’s business and capital plans; in discharging this
responsibility, the Board of Granite GP shall consider any recommendation made to it by the Investment Committee of the Board relating to the authorization of major investments and significant allocation of capital; 

 

	 	●	 	 periodically reviewing reports of the CGN Committee concerning Granite’s approach to executive compensation and
Board compensation; and 

  

	 	●	 	 reviewing reports provided by the Audit Committee of principal risks associated with Granite’s business and
operations and the systems implemented to manage these risks. 

 Board Committees 

CGN Committee of Granite GP 
 The
Board of Granite GP has formed a CGN Committee which is currently composed of Mr. Marshall (Chair), Ms. Murray and Ms. Warren, each of whom is considered by the Board to be “independent” according to the provisions of NI 52-110 and the applicable NYSE corporate governance standards. Mr. Marshall joined the CGN Committee as Chair effective January 1, 2021, replacing the previous Chair, Mr. Mawani, who is also
considered by the Board to be “independent” according to the provisions of NI 52-110 and the applicable NYSE corporate governance standards. 

  
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 The CGN Committee operates pursuant to its written charter, as well as Granite
GP’s articles and applicable law. The full text of the CGN Committee charter is posted on Granite’s website, www.granitereit.com. 

Responsibilities of the CGN Committee include (i) the nomination of persons for election to the Boards, and (ii) the corporate
governance of Granite. The CGN Committee also has certain responsibilities with respect to compensation, which are described above under “Compensation Discussion and Analysis — Compensation, Governance and Nominating
Committee”. Granite believes that “corporate governance” means the process and structure used to oversee the management of the business affairs of Granite REIT and Granite GP in the best interests of Granite REIT and Granite GP. The
process and structure define the division of power between, and establish mechanisms for achieving accountability of, the Boards and the executive team. 

Subject to the powers and duties of the Board, the Board has delegated certain powers and duties to be performed by the CGN Committee on
behalf of and for the Board. 
 In exercising its powers and discharging its duties with respect to governance and nominating, the CGN
Committee shall: 
  

	 	●	 	 periodically undertake an examination of the size of the Boards and standards of independence, with a view to
determining the impact of the number of trustees and directors (including the number of independent trustees and directors) on the effectiveness of the Boards and the ability of the Boards to act independently of Management in fulfilling their
respective duties, and recommend to the Boards, if necessary, a reduction or increase in the size of the Boards and/or the number of independent trustees and directors; 

 

	 	●	 	 in consultation with the Chair of the Board, endeavour to ensure that an appropriate system is in place to evaluate the
effectiveness of the Boards as a whole, as well as the committees of the Boards and individual trustees and directors, with a view to ensuring that they are fulfilling their respective responsibilities and duties and working effectively together as
a unit; 

  

	 	●	 	 review the disclosure in Granite’s public disclosure documents relating to corporate governance practices and
prepare recommendations to the Boards regarding any reports required or recommended on corporate governance; 

  

	 	●	 	 periodically review the disclosure policy of Granite, any proposed material amendments to which shall be recommended to
the Boards; 

  

	 	●	 	 review, monitor and make recommendations regarding new trustee and director orientation and the ongoing development of
existing trustees and directors; 

  

	 	●	 	 review from time to time, as required, the Board charters and the charters for each committee of the Boards, together
with the position descriptions of each of the Chair of the Boards, the Chair of each committee of the Boards and the President and CEO, and where necessary recommend changes to the Boards; and 

 

	 	●	 	 if applicable, promptly consider any resignation offer from a member of the Boards and make a recommendation to the
Boards pursuant to the majority voting policy of Granite. 

  
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 Identifying New Candidates for Board Nomination 

Based on the guidelines referred to in the CGN Committee charter, the CGN Committee shall, annually or as required, recruit and identify
individuals qualified to become new Board members and recommend to the Boards trustee and director nominees for the next annual general meetings of holders of REIT Units and holders of GP Shares. 

The CGN Committee shall, annually or as required, recommend to the Board the individual trustees and directors to serve on the various
committees of the Boards and as Chair of the various committees of the Boards. 
 In making its recommendations, the CGN Committee
shall consider the competencies and skills that the Board considers to be necessary for the Board as a whole to possess, the competencies and skills that the Board considers each existing trustee and director to possess, and the competencies and
skills each new nominee will bring to the boardroom, as well as the objectives of the Diversity Policy of Granite. The CGN Committee shall also consider the amount of time and resources that nominees have available to fulfill their duties as Board
members or committee members, as applicable. 
 The Board believes that diversity is important to ensure that Board members provide
the necessary range of perspectives, experience and expertise required to achieve Granite’s objectives. Granite’s Diversity Policy defines diversity as, amongst other things, any characteristic or quality that can be used to differentiate
groups and people from one another and includes gender expression/identity, sexual orientation, age, nationality, race, culture and other ethnic distinctions, language, education, regional or industry experience, and expertise and status as a member
of a “designated group” as defined in the Employment Equity Act (Canada), which includes women, Indigenous peoples, persons with disabilities and members of visible minorities. The Boards’ Diversity Policy includes provisions
relating to the identification and nomination of women trustees and directors. Granite first adopted its Diversity Policy in 2015, at which time, none of Granite’s seven directors and trustees were women. At the time Granite had set a target
that women represent more than 20% of the total membership on the Boards by June 30, 2019. Currently, three (or approximately 33%) of Granite’s nine directors and trustees, are women. Earlier this year, Granite revised its Diversity Policy
and set a new target which provides that women represent more than 30% of the total membership on the Boards. 
 It is an objective of
the Diversity Policy that diversity be considered in determining the optimal composition of the Boards. The Diversity Policy provides that in reviewing composition of the Boards and identifying suitable candidates for nomination for election to the
Boards, candidates will be selected based on merit and against objective criteria, and due consideration will be given to diversity in identifying candidates and selecting candidates. The Diversity Policy provides that the CGN Committee will
periodically assess the effectiveness of the Board nomination process at achieving Granite’s diversity objectives. 
 In early
2021, the CGN Committee considered and discussed with the full Board (i) the competencies and skills that the Board considers to be necessary for the Board as a whole to possess, (ii) the competencies and skills that the Board considers
each existing trustee and director to possess, (iii) ways in which the Board could be supplemented, including with a view to achieving the objectives of Granite’s Diversity Policy and (iv) the amount of time and resources that
nominees have available to fulfill their duties as Board members or committee members, as applicable. Based on the foregoing, the Board determined to maintain the size of the Board at nine trustees and directors. To facilitate the Board’s
succession plans and to allow for transition periods among trustees and directors, the Board will consider temporarily increasing the size of the Board from time to time. 

  
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 Assessments 

The CGN Committee, in consultation with the Chair, is responsible for ensuring that an appropriate system is in place to evaluate the
effectiveness of the Boards as a whole, as well as the committees of the Boards and individual trustees and directors, with a view to ensuring that they are fulfilling their respective responsibilities and duties. The CGN Committee will, from time
to time, review the Board charters and the charters for each committee of the Boards, together with the position descriptions of the Chair of each of the Boards, the Chair of each committee of the Boards and the President and CEO, and where
necessary recommend changes to the Boards. The CGN Committee most recently conducted a review of the Board and committee charters and certain other corporate governance policies and documents, as well as an assessment survey of the Boards, in early
2021. 
 In carrying out its assessment function, the CGN Committee solicits feedback from trustees and directors, including the
President and CEO, on the performance of the Boards as a whole, as well the performance of each committee and the contributions of each individual Board member. Each of the Boards, the committees thereof and individual trustees and directors are
evaluated on their effectiveness on an annual basis. Each trustee and director is provided with an anonymous survey to be completed. The survey covers the effectiveness and contribution of: (i) the Boards as a whole; (ii) each of the
committees of the Boards; and (iii) individual trustees and directors. In particular, the survey seeks subjective comment in relevant areas, including the composition of the Boards, areas for improvement and important issues relevant to the
Boards and/or the committees thereof, and the effectiveness and contribution of each individual trustee and director. The survey allows trustees and directors to comment on areas for improvement to ensure the continued effectiveness of the Boards
and the committees thereof. The results from the survey are reported to the CGN Committee and any matters raised through the evaluations are summarized by the Chair of the CGN Committee. The CGN Committee chair discusses results in detail with the
Chair of the Board and feedback is provided to the Board and the individual trustees. The CGN Committee most recently conducted an assessment survey of the Boards in early 2021.  

The CGN Committee considers the results of recent Board effectiveness assessments when reporting to the Board on its findings as to the
role, size, composition, competencies, skills and structure of the Boards and the committees. 
 Term Limits 

The term of office of each of Granite’s trustees and directors expires not later than the next annual general meetings of
Unitholders unless successors are not elected, in which case the trustees remain in office until their successors are elected or appointed in accordance with applicable law and the Granite REIT Declaration of Trust. 

The Boards have established a term limit policy that provides that non-executive directors and
trustees may serve for up to nine years on the Boards, unless otherwise determined by the Boards in their discretion. The President and Chief Executive Officer, if a trustee and director, is not subject to a term limit. 

Granite believes that the composition of the Board should reflect a balance between experience and knowledge, on the one hand, and the
need for renewal and fresh perspectives, on the other hand. Granite does not have a retirement age policy. 
 Trustees and
directors are generally expected to serve a maximum of nine years, subject to performance assessments every year, annual re-election by Unitholders and the other requirements

  
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of Granite’s governance guidelines. If deemed appropriate by the Boards, a trustee and director may be nominated for re-election for further
terms beyond the noted nine-year guideline. The Boards believe that their thorough and rigorous annual performance assessment of trustees and directors enables the Boards to assess whether trustees and directors continue to make valuable
contributions to Granite, its Boards and its business. After careful consideration, based on a favourable performance assessment, including peer reviews, and in recognition of his continuing contributions to Granite, the Boards have requested that
Mr. Gerald Miller stand for re-election to the Boards at the Meetings. 
 Audit Committee of Granite REIT and
Granite GP 
 The Audit Committee of each of Granite REIT and Granite GP is currently composed of Messrs. Miller (Chair), Daal
and Mawani, each of whom is considered by the Boards to be “independent” according to the provisions of NI 52-110 and the applicable NYSE corporate governance standards. The Boards have also
determined that each of Messrs. Miller, Daal and Mawani is an “audit committee financial expert” within the meaning of the rules of the SEC under the Sarbanes-Oxley Act of 2002 and that all members of the Audit Committees are financially
literate, as such term is defined in NI 52-110. 
 The Audit Committees each operate pursuant
to a written charter, as well as the Granite REIT Declaration of Trust (in the case of Granite REIT) and the articles of Granite GP (in the case of Granite GP) and applicable law. The full text of the Audit Committee charters is posted on
Granite’s website, www.granitereit.com, and is attached as an appendix to Granite REIT’s Annual Information Form dated March 3, 2021. 

In accordance with the Audit Committee charters, each Audit Committee shall oversee the accounting and financial reporting processes of
Granite and the audits of Granite’s financial statements and exercise the responsibilities and duties set out therein. Pursuant to each Audit Committee Charter, the Audit Committee shall, among other things: 

 

	 	●	 	 oversee Granite’s financial statements and financial disclosures; 

 

	 	●	 	 review and, if advisable, recommend for Board approval the annual audited and interim combined financial statements of
Granite REIT and Granite GP, the external auditor’s audit or review report thereon and the related management’s discussion and analysis of Granite’s financial condition and results of operations; 

 

	 	●	 	 review and, if advisable, recommend for Board approval financial disclosure in a prospectus or other securities offering
document of Granite, press releases disclosing, or based upon, financial results of Granite and any other material financial disclosure in a document to be publicly disseminated; 

 

	 	●	 	 oversee the work of the Auditor, including the external Auditor’s work in preparing or issuing an audit report,
performing other audit, review or attest services or any other related work; 

  

	 	●	 	 review and, if advisable, select and recommend for Board approval the external auditor to be nominated and the
compensation of the Auditor; 

  

	 	●	 	 periodically discuss with the Auditor such matters as are required by applicable auditing standards to be discussed by
the external auditor with the Audit Committee; 

  
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	 	●	 	 review any complaints and concerns that may be received pursuant to Granite’s Internal Reporting Procedures, which
include any potential violations of Granite’s Code of Conduct and Ethics and Anti-Bribery Policy, and, if it determines that the matter requires further investigation, it will direct the Chair of the Audit Committee to engage outside advisors,
as necessary or appropriate, to investigate the matter and will work with Management to reach a satisfactory conclusion. The Chair of the Audit Committee is also a contact for purposes of any employee complaints regarding Granite’s Internal
Reporting Procedures; and 

  

	 	●	 	 review Granite’s policies relating to the avoidance of conflicts of interest and monitor conflicts of interest
(real or perceived) of members of the Boards and Management in accordance with Granite’s Code of Conduct and Ethics. The Audit Committee will review and approve all payments to be made pursuant to any related party transactions involving
executive officers and members of the Boards as may be necessary or desirable under appliable securities laws. The Audit Committee shall consider the results of any review of these policies and procedures by Granite’s external auditors.

 Before the Auditor issues its report on annual financial statements, the Audit Committee shall obtain from the
Auditor a formal written statement describing all relationships between the Auditor and Granite; discuss with the Auditor any disclosed relationships or services that may affect the objectivity and independence of the Auditor; and obtain written
confirmation from the Auditor that it is objective and independent within the meaning of the applicable Rules of Professional Conduct / code of ethics adopted by the provincial institute or order of chartered professional accountants to which
the Auditor belongs and other applicable requirements. The Audit Committee shall take appropriate action to oversee the independence of the Auditor. The Audit Committee shall have ultimate authority to approve all audit engagement terms, including
the Auditor’s audit plan. 
 Each Audit Committee is responsible for reviewing its charter from time to time and recommending any
amendments to the Board. 
 Each Audit Committee is responsible for overseeing the identification and assessment of the principal
risks to the operations of Granite REIT or Granite GP and the establishment and management of appropriate systems to manage such risks. See “— Risk Management Oversight” for details. 

Each Audit Committee is also responsible for: pre-approval of
non-audit services by the external Auditor; approving Granite’s hiring policies for partners, employees and former partners and employees of the present and former external Auditor; and review, evaluation
and approval of appropriate systems of internal controls in accordance with applicable law. 
 Further information relating to the
Audit Committees, including disclosure required under NI 52-110, can be found under the heading “Audit Committee” in the Annual Information Form of Granite REIT dated March 3, 2021
available on SEDAR at www.sedar.com. 
 Investment Committee of Granite GP 

The Board of Granite GP has formed an Investment Committee that is currently composed of Mr. Aghar (Chair), Mr. Marshall and
Ms. Grodner, each of whom is considered by the Board to be “independent” according to the provisions of NI 52-110 and the applicable NYSE corporate governance standards. 

The Investment Committee operates pursuant to its written charter, as well as Granite GP’s articles and applicable law. The full
text of the Investment Committee charter is posted on Granite’s website, www.granitereit.com. 

  
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 In accordance with the Investment Committee charter, the Investment Committee shall
review and make recommendations to the Boards regarding the investment objectives of Granite and proposed direct or indirect acquisitions, investments, dispositions and borrowings of Granite. The objective of the Investment Committee is to ensure an
effective allocation of capital that is consistent with Granite’s strategic plan while balancing financial and operational risks with a view to maximizing the long-term value of Granite. 

Pursuant to its charter, the Investment Committee shall, among other things: 

 

	 	●	 	 at least annually, review Management’s assessment of Granite’s properties, taking into account property type,
location, lease profile, risk, and marketability; 

  

	 	●	 	 periodically review and make recommendations to the Boards regarding the investment objectives of Granite; and

  

	 	●	 	 review and make recommendations to the Boards regarding certain prescribed (a) proposed acquisitions, investments
and dispositions by Granite or its subsidiaries and (b) proposed borrowings and assumption or granting of any mortgage or other security interest in real property (other than renewals of existing mortgages or security interests, which need not
be approved by the Investment Committee), including any assignment of rents and other monies derived from or related to real property. 

 
Position Descriptions 
 Chair of the Board 

Each of the Boards has developed a written position description for the Chair of the Board. The Chair of the Board is principally
responsible for overseeing the operations and affairs of the Board. In fulfilling his or her duties, the Chair is responsible for: 
  

	 	●	 	 providing leadership to foster the effectiveness of the Board; 

 

	 	●	 	 ensuring there is an effective relationship between the Board and the executive team, including by acting as a liaison
between the Board and the executive team; 

  

	 	●	 	 acting as an advisor to the executive team in matters concerning the interests of Granite; 

 

	 	●	 	 ensuring that the appropriate committee structure is in place and assisting the CGN Committee in making recommendations
for appointment to such committees; 

  

	 	●	 	 in consultation with the other members of the Board and the President and CEO, preparing the agenda for each meeting of
the Board; 

  

	 	●	 	 ensuring that trustees or directors receive the information required for the proper performance of their duties,
including information relevant to each meeting of the Boards; 

  

	 	●	 	 chairing Board meetings and sessions of independent trustees or directors, including stimulating debate, providing
adequate time for discussion of issues, facilitating consensus, encouraging full participation and discussion by individual directors or trustees, and confirming that decisions are reached and accurately recorded; 

 

	 	●	 	 chairing all Unitholder general meetings; 

  
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	 	●	 	 together with the CGN Committee, ensuring that an appropriate system is in place to evaluate the performance of the
Boards as a whole, the Boards’ committees and individual trustees or directors, with a view to ensuring that they are fulfilling their respective responsibilities and duties, and making recommendations to the CGN Committee for changes when
appropriate; 

  

	 	●	 	 consulting with the CGN Committee on candidates for nomination or appointment to the Boards; 

 

	 	●	 	 working with the President and CEO to ensure that each Board is provided with the resources to permit it to carry out
its responsibilities and bringing to the attention of the President and CEO any issues that are preventing the Board from being able to carry out its responsibilities; and 

 

	 	●	 	 providing additional services required by the Boards. 

Chair of Each Board Committee 

Position descriptions for the Chairs of the Audit Committee of each Board, the CGN Committee of the Board of Granite GP and the
Investment Committee of the Board of Granite GP which set out the key responsibilities of each Chair of these committees have also been approved by the applicable Boards. Each Chair is an independent trustee or director and works with the respective
committee and Management to ensure the effective functioning of the committee. A committee chair is principally responsible for overseeing the operations and affairs of his or her particular committee. In fulfilling his or her duties, the chair of a
committee is responsible for: 
  

	 	●	 	 providing leadership to foster the effectiveness of the committee; 

 

	 	●	 	 ensuring there is an effective relationship between the Board and the committee; 

 

	 	●	 	 reporting to the Board on significant committee deliberations and discussions, and on the committee’s
recommendations; 

  

	 	●	 	 ensuring that an appropriate charter for the committee is in effect and assisting the CGN Committee in making
recommendations for amendments to such committee’s charter; 

  

	 	●	 	 taking the principal initiative in scheduling meetings of the committee; 

 

	 	●	 	 preparing the agenda for each meeting of the committee (in consultation with the other members of the committee and the
Board, where appropriate); 

  

	 	●	 	 ensuring that all committee members receive the information required for the proper performance of their duties,
including information relevant to each meeting of the committee; 

  

	 	●	 	 chairing committee meetings, including stimulating debate, providing adequate time for discussion of issues,
facilitating consensus, encouraging full participation and discussion by individual members, and confirming that decisions are reached and accurately recorded; 

 

	 	●	 	 together with the CGN Committee, ensuring that an appropriate system is in place to evaluate the performance of the
committee as a whole and the committee’s individual members, and making recommendations to the CGN Committee for changes when appropriate; 

  
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	 	●	 	 working with the President and CEO to ensure that the committee is provided with the resources to permit it to carry out
its responsibilities and bringing to the attention of the President and CEO any issues that are preventing the committee from being able to carry out its responsibilities; and 

 

	 	●	 	 providing additional services required by the Board and the committee. 

President and Chief Executive Officer 

The Boards have developed a written position description and mandate for the President and CEO. The President and CEO is primarily
responsible for the overall management of the business and affairs of Granite REIT and Granite GP. In this capacity, the President and CEO shall establish the strategic and operational priorities of Granite and provide leadership for the effective
overall management of Granite. The President and CEO is directly responsible to the Unitholders, through the Boards, for all activities of Granite. 

In fulfilling his or her duties, the President and CEO is responsible for: 

 

	 	●	 	 developing for the Granite GP Board’s approval a long-term strategy and vision for Granite that is consistent with
creating securityholder value; 

  

	 	●	 	 developing for the Granite GP Board’s approval annual business plans and budgets that support Granite’s
long-term strategy; 

  

	 	●	 	 consistently striving to achieve Granite’s short and long-term financial and operating goals and objectives;

  

	 	●	 	 providing leadership and vision, and maintaining a high level of employee morale and motivation, with a view to ensuring
the implementation of Granite’s strategy; 

  

	 	●	 	 fostering a corporate culture that promotes integrity and ethical values throughout the organization, including setting
the tone by meeting the highest ethical standards; 

  

	 	●	 	 developing and incentivizing the executive officers and senior Management of Granite and providing overall management to
ensure the effectiveness of the leadership team; 

  

	 	●	 	 making recommendations to Granite GP’s CGN Committee respecting the appointment of the Chief Financial Officer,
Executive Vice President and Head of Global Real Estate and all other officers appointed by the Granite GP Board, after consideration of the objectives of Granite’s Diversity Policy; 

 

	 	●	 	 making recommendations to Granite GP’s CGN Committee respecting the compensation and other terms of employment of
the Chief Financial Officer, Executive Vice President and Head of Global Real Estate, and all other officers appointed by the Granite GP Board; 

  

	 	●	 	 ensuring that succession plans are in place for Granite which reflect consideration of the objectives of Granite’s
Diversity Policy; 

  

	 	●	 	 serving as Granite’s chief spokesperson and ambassador; 

 

	 	●	 	 ensuring compliance by Granite with all applicable laws, rules and regulations, as well as Granite’s Code of
Conduct and Ethics and any other policies of the Board of Granite REIT or the Board of Granite GP in effect from time to time; and 

  
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	 	●	 	 ensuring that each of the Boards remains fully informed through direct communication with the Chair of such Board for
all significant matters, and dealing with such Boards in a manner that ensures that such Boards are able to provide the best counsel and advice possible. 

Orientation and Continuing Education 

Granite ensures that new Board members are provided with a basic understanding of Granite’s business, the role of the Boards, their
committees and their trustees and directors to assist them in contributing effectively to the Boards. In addition, Granite provides access to an online trustee / director resource centre containing comprehensive trustee / director orientation
information as well as historical disclosure materials. This online trustee / director resource centre is periodically updated with publications and other information relevant to the continuing education of the trustees and directors of Granite.

 Granite’s ongoing Board education initiatives include frequent business and industry updates from Management as well as
presentations from Granite’s independent advisors and guest speakers. During 2020, due to the COVID-19 pandemic and in the interest of trustee and Management safety, planned market and property tours were
postponed. On March 3, 2020, Granite’s Management team presented to the Boards and executive officers on Granite’s environmental, social and governance (“ESG”) initiatives and the evolution of ESG within the real estate
industry. 
 Beginning in 2019 Granite became a corporate member of The Institute of Corporate Directors (“ICD”). The ICD
membership, which includes individual memberships for each trustee and director, provides access to resources, education and professional development programs on corporate governance, board effectiveness and related matters. 

The CGN Committee is responsible for reviewing, monitoring and making recommendations regarding trustee and director orientation and the
ongoing development of existing trustees and directors. 
 The table below lists some of the third-party conferences, seminars,
courses, webinars and presentations on a broad range of topics that were attended by individual directors and trustees of Granite between January 1, 2020 and December 31, 2020 as part of their continuing education. 

 

					
	 	 	 
	Presented / Hosted By	 	Topic / Event	 	Attended By
	 	 	 
	SVN Rock Advisors	 	New apartment and rent collection updates and webinars	 	Peter Aghar
	 	 	 
	Altus Group	 	Various state of the market real estate and property type focused webinars	 	Peter Aghar
	 	 	 
	Informa — Canadian Real Estate Forums	 	RealCapital Conference	 	Peter Aghar
	 	 	 
	YPO	 	Various Canadian and international economic, health, real estate and political focused webinars	 	Peter Aghar
	 	 	 
	CBRE/JLL	 	Various Canadian, US and international real estate focused COVID update webinars	 	Peter Aghar
	 	 	 
	RBC/BMO/TD/CIBC	 	 Various Canadian and international focused health, economic, health and
investing webinars
  
	 	Peter Aghar

  
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	Presented / Hosted By	 	Topic / Event	 	Attended By
	 	 	 
	Canadian Real Estate Forums	 	 Various Canadian and global real estate focused leadership panels, discussion groups and interviews

 
	 	Peter Aghar
	 	 	 
	Realpac	 	2020 Virtual CEO Summit	 	Remco Daal
	 	 	 
	TD Securities Inc.	 	Real Estate CEO Outlook Panel	 	Kevan Gorrie (speaker)
	 	 	 
	Scotiabank	 	Taking a Lead Role in Adopting ESG Practices	 	Kevan Gorrie (speaker)
	 	 	 
	CIBC	 	Impact of Covid-19 on Global Supply Chains	 	Kevan Gorrie
	 	 	 
	CBRE	 	Real Estate Investment	 	Kevan Gorrie (speaker)
	 	 	 
	RBC Capital Markets	 	Capital Markets Conference	 	Kevan Gorrie
	 	 	 
	Realpac/Informa	 	RealREIT Conference	 	Kevan Gorrie
	 	 	 
	RBC Capital Markets	 	Fixed Income Conference	 	Kevan Gorrie
	 	 	 
	Realpac/Informa	 	Toronto Real Estate Forum	 	Kevan Gorrie
	 	 	 
	Deloitte LLP	 	Economic Outlook for Board Directors	 	Al Mawani
	 	 	 
	Fasken	 	Issues and Trends for Public Companies in the COVID-19 Context	 	Al Mawani
	 	 	 
	Nasdaq	 	Redefining Crisis – The Board’s Opportunity to Create a New Normal	 	Al Mawani
	 	 	 
	Hugessen Consulting	 	Executive Pay Trends and Issues	 	Al Mawani
	 	 	 
	Fasken	 	The Impact of Covid-19 on the Real Estate Industry	 	Al Mawani
	 	 	 
	Blake, Cassels & Graydon LLP	 	Securities Litigation in 2020 and Beyond	 	Al Mawani
	 	 	 
	Rotman Business School	 	Implications of Covid-19 for the Future of Supply Chains	 	Al Mawani
	 	 	 
	BMO Capital Markets	 	Real Estate Conference	 	Al Mawani
	 	 	 
	Canadian Public Accountability Board	 	Audit Committee Forum	 	Al Mawani
	 	 	 
	Canadian Public Accountability Board	 	Real Estate Industry Forum	 	 
	 	 	 
	Blake, Cassels & Graydon LLP	 	Environmental Issues as We Emerge from the Covid-19 Crisis	 	Al Mawani
	 	 	 
	Osler	 	Hot Topics in Canadian Commercial Leasing and Retail	 	Al Mawani
	 	 	 
	McCarthy Tetrault	 	Annual Disclosure and Governance Seminar	 	Al Mawani
	 	 	 
	Ernst & Young	 	Latest Developments in Financial Reporting for Public Companies	 	Al Mawani
	 	 	 
	Ernst & Young	 	Financial Reporting for Public Companies – Real Estate	 	Al Mawani
	 	 	 
	Deloitte LLP	 	 2020 Real Estate Industry Accounting Update

 
	 	Al Mawani

  
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	Presented / Hosted By	 	Topic / Event	 	Attended By
	 	 	 
	Fasken	 	 2020: Hindsight +Insight=Foresight

 
	 	Al Mawani
	 	 	 
	CPA Canada	 	Canadian Public Company Financial Reporting Update: Q3 2020	 	Gerald Miller
	 	 	 
	CPA Canada	 	Responding to COVID-19 – Insights for Finance Leaders	 	Gerald Miller
	 	 	 
	Canadian Public Accountability Board	 	CPAB Audit Committee Forum	 	Gerald Miller
	 	 	 
	Canadian Public Accountability Board	 	CPAB Real Estate Industry Forum	 	Gerald Miller
	 	 	 
	CPABC	 	Legal Responsibilities of Officers and Directors	 	Gerald Miller
	 	 	 
	Deloitte LLP	 	Responding to COVID-19: Insights for Audit Committees	 	Gerald Miller
	 	 	 
	Queens University Law School	 	Taught Securities Regulation	 	Sheila A. Murray
	 	 	 
	Blake, Cassels & Graydon LLP	 	Women in Leadership- Diversity and Equity Seminar	 	Sheila A. Murray
	 	 	 
	Blake, Cassels & Graydon LLP	 	Women on Board Round Table Discussion	 	Sheila A. Murray
	 	 	 
	NEO Exchange	 	Ontario Capital Markets Modernization Task Force Seminar	 	 Sheila A. Murray

(panelist)

	 	 	 
	World Economic Forum Community of Chairpersons	 	ESG and the Future of Work	 	Sheila A. Murray
	 	 	 
	Computershare	 	A Global Perspective: Subsidiary Governance Driven Through Enhanced Technology	 	Jennifer Warren
	 	 	 
	Computershare	 	Gain Momentum by Maximizing Your Transfer Agent Partnership	 	Jennifer Warren
	 	 	 
	Computershare	 	The Stakeholder Communications Strategy Mastermind: Attributes of an Agile and Highly Effective Comms Leader	 	Jennifer Warren
	 	 	 
	Computershare	 	How to Mobilize and Enable Shareholder Engagement	 	Jennifer Warren
	 	 	 
	Computershare	 	Company Wellness: The Importance of Environmental, Social and Governance (ESG)	 	Jennifer Warren
	 	 	 
	Computershare	 	Action Required: Preparedness for Activist Investors Today	 	Jennifer Warren
	 	 	 
	Computershare	 	Health and Wealth: Trends Across Global Capital Markets	 	Jennifer Warren
	 	 	 
	Computershare	 	The Fit Enterprise: Entity Compliance at Your Core	 	Jennifer Warren
	 	 	 
	Computershare	 	The M&A Bootcamp: Get in Shape for Future Transactions	 	Jennifer Warren

  
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 Ethical Business Conduct 

The Boards have adopted a Code of Conduct and Ethics (the “Code of Conduct”) that applies to all employees, including
officers and trustees and directors of Granite. A copy of the Code of Conduct is posted on Granite’s website, www.granitereit.com, and will be sent free of charge to any person upon request in writing addressed to the Manager, Legal &
Investor Services at Granite’s principal executive offices set out in this Circular. The Audit Committee of each of Granite REIT and Granite GP is charged with monitoring conflicts of interest (real or perceived) of members of the Boards and
Management in accordance with the Code of Conduct. 
 Waivers of the Code of Conduct may from time to time be granted in limited
circumstances. Any waivers must be granted by the Audit Committee(s) and will be publicly disclosed if required by applicable law, rules and regulations. There have been no such waivers to date. 

In order to ensure compliance with the Code of Conduct, employees of Granite who become aware of a violation of the Code of Conduct by
others within Granite or one of its subsidiaries are responsible for reporting any violations of the Code of Conduct, through “whistleblowing” mechanisms which Granite has established. Employees may report violations of the Code of Conduct
anonymously. The Code of Conduct provides that no one will be penalized, discharged, demoted, suspended or discriminated against for reporting in good faith any violation of the Code of Conduct. 

The Boards have also adopted an Insider Trading and Blackout Policy to establish a standard with respect to the purchase and sale of
Granite’s securities, with which all officers, trustees, directors and employees of Granite and its subsidiaries are expected to comply and a Disclosure Policy to ensure that communications to the public regarding Granite are timely, factual,
accurate, complete, broadly disseminated and, where necessary, filed with regulators in accordance with applicable securities laws. The Boards have also adopted an Anti-Bribery Policy, which prohibits the provision of bribes, kickbacks, favours, or
any other thing of value, directly or indirectly, to any government official. 
 Granite is committed to ensuring that each time the
Boards act on any particular transaction, each trustee or director who casts a vote is free from any material interest in the transaction and any existing or potential material conflict of interest with Granite or its subsidiaries, affiliates or
controlling Unitholders generally. When any transaction is voted on by the Boards, Granite adheres to the requirements of the Granite REIT Declaration of Trust and applicable law that a trustee, director or officer of Granite who: (a) has a
material interest in a material contract or transaction with Granite; or (b) is a director or an officer of, or has a material interest in, a person who has a material interest in a material contract or transaction with Granite, shall disclose
in writing to the Board or request to have entered in the Board minutes the nature and extent of his or her interest, and, unless the contract or transaction is one with an affiliate or between Granite REIT and Granite GP, shall not attend any part
of a meeting of trustees or directors during which the contract or transaction is discussed and shall not vote on any resolution to approve the contract or transaction. In this way, the Boards ensure that trustees and directors act with a view to
the best interests of Granite and are not affected by any relationship that could materially interfere with their ability to exercise independent judgment. 
 
Related Party Transactions 
 The Audit Committee reviews Granite’s policies relating to the avoidance of conflicts of
interest and monitors conflicts of interest (real or perceived) and all proposed related party transactions involving members of the Boards and Management in accordance with Granite’s Code of Conduct and Ethics. In the case of any transaction
or agreement in respect of which any of 

  
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Granite’s trustees and directors or executive officers has a material interest, the trustee and director or officer is required to disclose his or her interest. The Audit Committee will
review and approve all payments to be made pursuant to any related party transactions involving executive officers and members of the Boards as may be necessary or desirable under the applicable securities laws. In connection with its annual review
of director independence the Boards consider any related party transactions. In 2020, there were no related party transactions reviewed by the Audit Committee. 
 
Risk Management Oversight 
 The Audit Committee of each of Granite REIT and Granite GP is entrusted with responsibility for
overseeing the identification and assessment of the principal risks to the operations of Granite and the establishment and management of appropriate systems to manage such risks with a view to achieving a proper balance between risks incurred and
potential return to Unitholders and to the long-term viability of Granite. Each Audit Committee performs this function pursuant to a written charter as described under “— Audit Committee of Granite REIT and Granite GP”.
Each Audit Committee requires Management to report periodically to the Audit Committee, and each committee reports periodically to the Boards, on the principal risks faced by Granite and the steps implemented by Management to manage these risks.

 In fulfilling this risk oversight responsibility, the Audit Committees review a risk matrix prepared and presented by Management to
the Audit Committees on a quarterly basis. This risk matrix identifies risks to Granite and assesses the probability of the risks occurring and the potential severity of the impact, should they occur, as well as mitigation strategies and controls
intended to reduce such potential impact. 
 Pursuant to the Board charters, Granite’s Boards are responsible for verifying that
internal, financial, non-financial and business control and management information systems have been established by Management. 

See “— Board Committees — Audit Committee of Granite REIT and Granite GP”. 

Succession Planning 

The Board of Granite GP is responsible for developing and periodically reviewing the succession plans of Granite for the Chair, the
President and CEO and the other key executive officers of Granite, including the appointment, training and monitoring of such persons, with consideration to the objectives of Granite’s Diversity Policy. The Board has delegated to the CGN
Committee responsibility for periodically reviewing and making recommendations to the Board with respect to general succession planning matters and executive development programs. 

It is an objective of Granite’s Diversity Policy that diversity be considered in connection with succession planning and the
appointment of members of Granite’s executive Management. The Board believes that diversity is important to ensure that the profiles of senior Management provide the necessary range of perspectives, experience and expertise required to achieve
Granite’s objectives. Granite currently has one female executive officer and one executive officer that self identifies as a visible minority. Granite has not adopted diversity targets in executive officer positions as the Board believes that
such arbitrary targets are not in the best interests of Granite. In connection with the identification and selection process for executive officers the Board believes numerous characteristics are to be considered, including diversity, skills and
business experience. 

  
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 Diversity – Board and Management Representation 

In March 2021, Granite surveyed the Board and its senior Management to determine the number of individuals that self-identified as
belonging to one or more of the groups designated in its Diversity Policy. Participation in the survey was voluntary and, as such, the results represent only those individuals who elected to participate and may not be entirely representative of the
designated groups at the Board and senior Management level. 
 The Boards have two director and trustee nominees who identify as being
a visible minority, representing 22% of its trustees and directors, and three director and trustee nominees who identify as women, representing approximately 33% of its trustees and directors. No director and trustee nominee has identified as an
Indigenous person or a person with disabilities. 
 Granite’s senior Management team, which is composed of twelve vice-president
level or higher positions globally, includes: three individuals who have identified as women, representing approximately 25% of senior Management; and one individual who has identified as visible minority, representing approximately 8% of senior
Management. No member of senior Management has identified as an Indigenous person or as a person with disabilities. 
 Granite
recognizes that diversity is an important consideration in creating and maintaining an effective Board and senior Management team. Granite seeks to ensure that it recruits, attracts and retains high achieving trustees and senior Management with the
skills, knowledge, experience and expertise required by Granite to create, protect and grow long-term Unitholder value. As such, diversity is only one of several characteristics considered during the selection process for executive officers. 

Sustainability Planning 

Granite’s vision is to build a blue chip, globally diversified logistics real estate company that thoughtfully incorporates
environmental, social and governance (“ESG”) principles in its portfolio and business practices. 
 In May 2019,
Granite published its first sustainability plan, which states that Granite recognizes the important role building owners can play in fostering the efficient use of resources and respecting our environment. As a good steward for investors, Granite
seeks to practically incorporate sustainability in its actions and decision-making process, while generating returns for its Unitholders. Consistent with this principle, Granite seeks to apply the following practices and measures in its business:

  

	 	●	 	 Promote energy efficiency and sustainable practices at our properties; 

 

	 	●	 	 Exceed required standards where feasible in our developments and major replacement projects; 

 

	 	●	 	 Reduce use of resources and increase waste diversion; 

 

	 	●	 	 Promote volunteerism and community support; and 

 

	 	●	 	 Promote employee well-being. 

Transparency is a critical component of Granite’s sustainability commitment. In June 2020, Granite published an ESG overview which
provided investors with a progress report against the principles outlined in its sustainability plan. Granite expects to issue its first corporate responsibility report, with specific key performance targets, in 2021. 

  
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 In April 2020, Granite completed and issued its Green Bond Framework, which complies
with the Green Bond Principles developed by the International Capital Markets Association as of June 2018. The Green Bond Framework has been and will be used by Granite or any of its subsidiaries for the issuance of green bonds and/or other green
financial instruments. Granite also obtained an independent second party opinion from Sustainalytics on its Green Bond Framework indicating alignment with the Green Bond Principles. 

On June 4, 2020, Granite issued its inaugural Green Bond and as at December 31, 2020 had allocated 69% of the net proceeds
from the Green Bond to Eligible Green Projects as defined in the Green Bond Framework. Details of the use of proceeds towards Eligible Green Projects can be found in Granite’s Green Bond Use of Proceeds report for the period ended
December 31, 2020, which can be found on Granite’s website at: https://granitereit.com/wp-content/uploads/2020/05/Granite-Green-Bond-Framework.pdf. 

Sustainability has been an important part of Granite’s investment strategy, as its investment activity has been defined by adding
sustainable properties to its portfolio. By focusing on quality and modern physical characteristics in the properties it acquires, Granite believes that it can help to minimize the impact on the environment. In 2020, Granite acquired four investment
properties in the Netherlands and completed the development of one property in the United States, all of which have received green building certifications from BREEAM and Green Globes. 

In preparation for the release of its first corporate responsibility report, expected in 2021, in July 2020 Granite completed its first
submission into the GRESB Real Estate Assessment, which will establish a baseline measurement for future reporting. Further, to improve its knowledge of the energy being consumed at its properties, Granite has engaged Measurabl, a leading
sustainability and ESG reporting platform, to facilitate the collection of utility consumption from Granite’s participating tenants, where possible. 

INTERESTS OF INFORMED PERSONS IN MATERIAL TRANSACTIONS 

 
  

To the knowledge of Granite, as at March 31, 2021, no trustee, director or officer of Granite, any person or company who
beneficially owns, or controls or directs, directly or indirectly, voting securities of Granite or a combination of both carrying more than 10 percent of the voting rights attached to all outstanding voting securities of Granite, any Proposed
Trustee or Proposed Director, nor any of their respective associates or affiliates has had a material interest, direct or indirect, in any transaction since the beginning of Granite’s most recently completed financial year or in any proposed
transaction which has materially affected or would materially affect Granite or any of its subsidiaries. 
 
MANAGEMENT CONTRACTS 
  
  

During Granite’s most recently completed financial year, no management functions of Granite or any of its subsidiaries were to any
substantial degree performed by a person or company other than the trustees, directors or executive officers of Granite. 
 
OTHER MATTERS 
  
  

Management is not aware of any amendments or variations to matters identified in the Notice or of any other matters that are to be
presented for action at the Meetings other than those described in the Notice. 

  
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 Information stated in this Circular is dated as at March 31, 2021 except where
otherwise indicated. The contents and the mailing of this Circular have been approved by the Boards. 
 
ADDITIONAL INFORMATION REGARDING GRANITE 
  
  

Granite files reports and other information with the Canadian Securities Administrators. These reports and information are available to
the public free of charge on SEDAR at www.sedar.com. Financial information is provided in Granite’s audited combined financial statements and management’s discussion and analysis for its most recently completed financial year. 

Unitholders may also request copies of these documents from Granite’s Chief Financial Officer by mail addressed to the Chief
Financial Officer of Granite at 77 King Street West, Suite 4010, P.O. Box 159, Toronto-Dominion Centre, Toronto, Ontario, M5K 1H1, by phone at (647) 925-7500, or by e-mail at tneto@granitereit.com. 
 Engagement with Unitholders — Contacting the Boards 

The Boards believe that it is important to have constructive engagement directly with Unitholders and other stakeholders, where
appropriate. Unitholders, employees and other interested parties may communicate directly with the Boards through the Chair by writing to Mr. Marshall at: Chair of the Board of Directors of Granite Real Estate Investment Trust 77 King
Street West, Suite 4010, P.O. Box 159, Toronto-Dominion Centre, Toronto, Ontario, M5K 1H1 or by Email at: kmarshall@granitereit.com. 
  

			
	

	  	

	Kevan Gorrie	  	Teresa Neto
	President and Chief Executive Officer	  	Chief Financial Officer

  
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 APPENDIX “A” 

BOARD CHARTER OF GRANITE REAL ESTATE INVESTMENT TRUST 

GRANITE REAL ESTATE INVESTMENT TRUST 

BOARD OF TRUSTEES CHARTER 
 Purpose 

The members of the Board of Trustees (the “Board”) of Granite Real Estate Investment Trust (the
“Trust”) have the duty to supervise the management of the business and affairs of the Trust. The Board, directly and through its committees and the chair of the Board (the “Chair”), shall provide direction to senior
management, generally through the President and Chief Executive Officer (the “CEO”), to pursue the best interests of the Trust. The Board shall be responsible for exercising its powers and taking such actions as may be necessary or
desirable in order to comply with the provisions of the Declaration of Trust of the Trust, as amended from time to time. 
 Composition 

General 
 The
composition and organization of the Board, including the number, qualifications and remuneration of trustees; the number of Board meetings; Canadian residency requirements; quorum requirements; meeting procedures; and notices of meetings are
governed by applicable laws, rules and regulations and the Declaration of Trust of the Trust. 
 Each trustee must have an
understanding of the Trust’s principal operational and financial objectives, plans and strategies, and financial position and performance. Trustees must have sufficient time to carry out their duties and not assume responsibilities that would
materially interfere with, or be incompatible with, Board membership. Trustees who experience a significant change in their personal circumstances, including a change in their principal occupation, are expected to promptly advise the chair of the
Compensation, Governance and Nominating Committee of the Board of Directors of Granite REIT Inc. (the “Company Board”). 

Independence 
 A
majority of the Board must be independent within the meaning of the provisions of National Policy 58-201 – Corporate Governance Guidelines (“NP
58-201”) of the Canadian Securities Administrators and the applicable rules and regulations of the United States Securities and Exchange Commission and the New York Stock Exchange, each as may be
amended from time to time. 
 Unless the Board decides otherwise, it will endeavour to nominate only independent members to the Board
except for the CEO and, if considered desirable past CEOs, who are considered non-independent under NP-58-201. 

Chair of the Board 

The Chair of the Board shall be an independent trustee. 

Duties and Responsibilities 
 The Board shall
have the specific duties and responsibilities outlined below. 

  
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 Corporate Governance 

General 
 The Board
shall periodically review reports of the Compensation, Governance and Nominating Committee of the Company Board concerning the Trust’s approach to corporate governance. 

Trustee Independence 

The Board shall periodically review reports of the Compensation, Governance and Nominating Committee of the Company Board that evaluate
the trustee independence standards established by the Board (including the definition of independence and the proportion of independent trustees) and the Board’s ability to act independently of management in fulfilling its duties. 

Board of Trustees Charter Review 

The Board shall review and assess the adequacy of this Charter from time to time, as required, to ensure compliance with any rules and
regulations promulgated by any regulatory body and shall make any modifications to this Charter as considered advisable. 
 Communications 

General 
 The Board
has adopted a Disclosure Policy for the Trust. If consensus cannot be reached at a meeting of the disclosure committee created pursuant to the Disclosure Policy, the matter will be brought forward to the Board for consideration. The Board, in
conjunction with the CEO and the Chief Financial Officer, shall periodically review the Trust’s Disclosure Policy, including measures for receiving feedback from the Trust’s stakeholders, and management’s compliance with such policy.
The Board shall be responsible for approving any material amendments to the Disclosure Policy. 
 Unitholders 

The Trust endeavors to keep its unitholders informed of its progress through an annual report, annual information form, quarterly
interim reports and periodic press releases. In addition, the Trust shall maintain on its website a contact email address that will permit unitholders to provide feedback directly to the Chair of the Board. 

Committees of the Board 
 The Board has
established the Audit Committee. Subject to applicable law, the Board may establish other Board committees or merge or dissolve any Board committee at any time. 

Committee Charters 

The Board has approved a charter for the Audit Committee and shall approve charters for any Board committees created in the future. 

Delegation to Committees 

The Board has delegated to the Audit Committee those duties and responsibilities set out in the Audit Committee’s charter. 

  
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Table of Contents

 Committee Composition 

The Board shall appoint, annually or as required, the members of the Audit Committee and the members and a chair of any other Board
committee. 
 Meetings and Resources 
 Meeting
Participation 
 Each trustee is encouraged to use his or her best efforts to attend all meetings of the Board and the
committees of the Board of which such trustee is a member. Trustees will be expected to have read and considered the materials sent to them in advance of each meeting and to actively participate in such meetings. 

Service on Other Boards 

Trustees may serve on the boards of other issuers so long as these commitments do not materially interfere and are compatible with their
ability to fulfill their duties as a member of the Board. Trustees must seek clearance from the Chair in writing in advance of accepting an invitation to serve on the board of another public issuer (other than Granite REIT Inc.). The Chair will
confirm approval by email within 48 hours or indicate the need to discuss with the Compensation, Governance and Nominating Committee and provide a timeline for a response. 

In any case, a trustee who is also an executive officer of a public issuer, including any executive officer of the Trust, must not serve
on the boards of more than two public issuers, including the public issuer of which he or she is an executive officer, and each other trustee must not serve on the boards of more than four public issuers. For greater certainty, the Board and the
Company Board shall count as a single board for the purpose of this paragraph. 
 Additionally, to avoid actual or perceived conflicts
of interest, (i) two or more trustees must not serve together on the boards of more than one public issuer other than the Trust and Granite REIT Inc., (ii) a trustee must not serve on the board of any
non-public issuer if two or more other trustees serve on such board, (iii) a trustee who is a senior officer of the Trust must not serve on the board of an issuer if another trustee of the Trust is a
senior officer of such issuer, and (iv) a trustee who is a senior officer of another issuer must not serve on the Board if a senior officer of the Trust serves on the board of such other issuer. For greater certainty, the Board and the Company
Board shall count as a single board for the purpose of this paragraph. 
 Access to Management and Outside Advisors 

The Board shall have unrestricted access to employees of Granite REIT Inc. and its subsidiaries. The Board shall have the authority to
seek, retain and terminate external legal counsel, consultants or other advisors, from a source independent of management, to assist it in fulfilling its responsibilities and to set and pay the respective reasonable compensation of these advisors
and other retention terms. The Trust shall provide appropriate funding, as determined by the Board, for the services of these advisors. 

Recommendations of Committees of the Company Board 

The Board shall receive and consider any recommendations made to it by the Compensation, Governance and Nominating Committee of the
Company Board with respect to trustee nominations for each annual meeting of unitholders of the Trust and any recommendations with respect to the remuneration to be paid to, and the benefits to be provided to, trustees of the Trust. 

  
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Table of Contents

 Management 

Position Descriptions for Trustees 

The Board has approved position descriptions for the Chair and the chair of the Audit Committee. The Board shall review such position
descriptions from time to time, as required. 
 Position Description for CEO 

The Board has approved a position description for the CEO, which includes delineating management’s responsibilities. 

  
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Table of Contents

 APPENDIX “B” 

BOARD CHARTER OF GRANITE REIT INC. 
 GRANITE
REIT INC. 
 BOARD OF DIRECTORS CHARTER 

Purpose 
 The members of the Board of
Directors (the “Board”) of Granite REIT Inc. (the “Company”) have the duty to supervise the management of the business and affairs of the Company. The Board, directly and through its committees and the chair of the
Board (the “Chair”), shall provide direction to senior management, generally through the President and Chief Executive Officer (the “CEO”), to pursue the best interests of the Company. 

Composition 
 General 

The composition and organization of the Board, including the number, qualifications and remuneration of directors; the number of Board
meetings; Canadian residency requirements; quorum requirements; meeting procedures; and notices of meetings are governed by applicable laws, rules and regulations and the Articles and By-laws of the Company.

 Each director must have an understanding of the Company’s principal operational and financial objectives, plans and
strategies, and financial position and performance. Directors must have sufficient time to carry out their duties and not assume responsibilities that would materially interfere with, or be incompatible with, Board membership. Directors who
experience a significant change in their personal circumstances, including a change in their principal occupation, are expected to promptly advise and discuss with the chair of the Compensation, Governance and Nominating Committee. 

Independence 
 A
majority of the Board must be independent within the meaning of the provisions of National Policy 58-201 – Corporate Governance Guidelines (“NP
58-201”) of the Canadian Securities Administrators and the applicable rules and regulations of the United States Securities and Exchange Commission and the New York Stock Exchange, each as may be
amended from time to time. 
 Unless the Board decides otherwise, it will endeavour to nominate only independent members to the Board
except for the CEO and, if considered desirable, past CEOs, who are considered non-independent under NP-58-201. 

Chair of the Board 

The Chair of the Board shall be an independent director. 

Duties and Responsibilities 
 The Board shall
have the specific duties and responsibilities outlined below. 

  
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Table of Contents

 Strategic Planning 

Strategic Plans 
 The
Board will adopt a strategic plan for the Company. The Board shall periodically review and, if advisable, approve the Company’s strategic planning process and the Company’s strategic plan. In discharging this responsibility, the Board
shall review at least annually the plan in light of management’s assessment of emerging trends, the competitive environment, the opportunities and risks of the business, and business practices in the industry. 

Business and Capital Plans 

The Board shall periodically review and, if advisable, approve the Company’s budget and corporate targets. The Board shall receive
and consider any recommendation made to it by the Investment Committee of the Board relating to the authorization of major investments and significant allocation of capital. 

Risk Management 
 General 

The Board shall periodically review reports provided by the Audit Committee of principal risks associated with the Company’s
business and operations and the systems implemented to identify, assess, manage and mitigate these risks. 
 Verification of Controls

 The Board shall verify that appropriate internal, financial, non-financial and business control and
management information systems have been established and are being maintained by management. 
 Human Resource Management 

General 
 The Board
shall periodically review a report of the Compensation, Governance and Nominating Committee concerning the Company’s approach to executive and Board compensation. 

Succession Review 
 The Board shall
develop and review periodically the succession plans of the Company for the Chair, the CEO and other key executive officers, including the appointment, training and monitoring of such persons, with consideration to the objectives of the Diversity
Policy of the Company and Granite Real Estate Investment Trust (the “Trust”). 
 Integrity of Senior Management 

The Board shall, to the extent feasible, satisfy itself as to the integrity of the CEO and other executive officers of the Company and that the CEO and
other senior officers strive to create a culture of integrity throughout the Company. 

  
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Table of Contents

 Corporate Governance 

General 
 The Board
shall periodically review reports of the Compensation, Governance and Nominating Committee concerning the Company’s approach to corporate governance. 

Director Independence 

The Board shall periodically review reports of the Compensation, Governance and Nominating Committee that evaluate the director
independence standards established by the Board (including the definition of independence and the proportion of independent directors) and the Board’s ability to act independently of management in fulfilling its duties. 

Ethics Reporting 
 The
Board has adopted a written Code of Conduct and Ethics (the “Code”) applicable to directors, officers and employees of the Company, among others. The Board shall periodically review reports of the Audit Committee relating to
compliance with, or material deficiencies from, the Code, and shall review any reports from the Audit Committee concerning investigations and any resolutions of complaints received under the Code. 

Board of Directors Charter Review 

The Board shall review and assess the adequacy of this Charter from time to time, as required, to ensure compliance with any rules and
regulations promulgated by any regulatory body and shall make any modifications to this Charter as considered advisable. 
 Communications 

General 
 The Board
has adopted a Disclosure Policy for the Company. If consensus cannot be reached at a meeting of the disclosure committee created pursuant to the Disclosure Policy, the matter will be brought forward to the Board for consideration. The Board, in
conjunction with the CEO and the Chief Financial Officer, shall periodically review the Company’s Disclosure Policy, including measures for receiving feedback from the Company’s stakeholders, and management’s compliance with such
policy. The Board shall be responsible for approving any material amendments to the Disclosure Policy. 
 Shareholders 

The Company endeavors to keep its shareholders informed of its progress through an annual report, annual information form, quarterly
interim reports and periodic press releases. In addition, the Company shall maintain on its website a contact email address that will permit shareholders to provide feedback directly to the Chair of the Board. 

Committees of the Board 
 The Board has
established the following committees: the Audit Committee, the Investment Committee and the Compensation, Governance and Nominating Committee. Subject to applicable law, the Board may establish other Board committees or merge or dissolve any Board
committee at any time. 

  
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Table of Contents

 Committee Charters 

The Board has approved charters for each established Board committee and shall approve charters for any Board committee established in
the future. 
 Delegation to Committees 

The Board has delegated to the applicable committee those duties and responsibilities set out in each Board committee’s charter.

 Committee Composition 

The Board shall appoint, annually or as required, the members of each committee and a chair of the Audit Committee, the Investment
Committee and the Compensation, Governance and Nominating Committee, after receiving recommendations from the Compensation, Governance and Nominating Committee. 

Meetings and Resources 
 Meeting Participation

 Each director is encouraged to use his or her best efforts to attend all meetings of the Board and the committees of the
Board of which such director is a member. Directors will be expected to have read and considered the materials sent to them in advance of each meeting and to actively participate in such meetings. 

Service on Other Boards 

Directors may serve on the boards of other issuers so long as these commitments do not materially interfere and are compatible with
their ability to fulfill their duties as a member of the Board. Directors must seek clearance from the Chair in writing in advance of accepting an invitation to serve on the board of another public issuer (other than the Trust). The Chair will
confirm approval by email within 48 hours or indicate the need to discuss with the Compensation, Governance and Nominating Committee and provide a timeline for a response. 

In any case, a director who is also an executive officer of a public issuer, including any executive officer of the Company, must not
serve on the boards of more than two public issuers, including the public issuer of which he or she is an executive officer, and each other director must not serve on the boards of more than four public issuers. For greater certainty, the Board and
the Board of Trustees of the Trust shall count as a single board for the purpose of this paragraph. 
 Additionally, to avoid actual
or perceived conflicts of interest, (i) two or more directors must not serve together on the boards of more than one public issuer other than the Company and the Trust, (ii) a director must not serve on the board of any non-public issuer if two or more other directors serve on such board, (iii) a director who is a senior officer of the Company must not serve on the board of an issuer if another director of the Company is a
senior officer of such issuer, and (iv) a director who is a senior officer of another issuer must not serve on the Board if a senior officer of the Company serves on the board of such other issuer. For greater certainty, the Board and the Board
of Trustees of the Trust shall count as a single board for the purpose of this paragraph. 
 Access to Employees and Outside Advisors

 The Board shall have unrestricted access to employees of the Company, and its subsidiaries. The Board shall have the
authority to seek, retain and terminate external legal counsel, consultants or 

  
 - B-4 - 

Table of Contents

 
other advisors, from a source independent of management, to assist it in fulfilling its responsibilities and to set and pay the respective reasonable compensation of these advisors, and other
retention terms. The Company shall provide appropriate funding, as determined by the Board, for the services of these advisors. 
 Management 

Position Descriptions for Directors 

The Board has approved position descriptions for the Chair and the committee chairs. The Board shall review such position descriptions
from time to time, as required. 
 Position Description for CEO 

The Board has approved a position description for the CEO, which includes delineating management’s responsibilities. The Board has
also approved the organizational goals and objectives that the CEO has responsibility for meeting. The Board shall periodically review a report of the Compensation, Governance and Nominating Committee reviewing this position description and such
organizational goals and objectives. 
 Appointment and Terms of Employment of Other Officers 

The Board shall review the recommendations of the Compensation, Governance and Nominating Committee respecting the appointment of the
Chief Financial Officer, and all other officers appointed by the Board and, if advisable, after consideration of the objectives of the Diversity Policy of the Company and the Trust, approve, any such appointment. 

  
 - B-5 - 

Table of ContentsEX-4.6

 Exhibit 4.6 
  

 
 

 
 Condensed Combined Financial Statements 

of Granite Real Estate Investment Trust 
 and Granite REIT
Inc. 
 For the three and six months ended June 30, 2021 and 2020 

 Condensed Combined Balance Sheets 

(Canadian dollars in thousands) 
 (Unaudited) 

 

													
	As at	 	Note	 	    	June 30,
2021	 	  	December 31,
2020	 
	 ASSETS
	 				    				  			
				
	 Non-current assets:
	 				    				  			
	 Investment properties
	 	 	4	 	    	$	6,396,560	 	  	$	5,855,583	 
	 Construction funds in escrow
	 	 	6	 	    	 	8,144		  	 	8,402	
	 Deferred tax assets
	 				    	 	3,242		  	 	4,730	
	 Fixed assets, net
	 				    	 	3,003		  	 	3,290	
	 Cross currency interest rate swap
	 	 	7(b)	 	    	 	48,816		  	 	28,676	
	 Other assets
	 	 	6	 	    	 	3,081		  	 	948	
		 				    	 	6,462,846		  	 	5,901,629	
				
	 Current assets:
	 				    				  			
	 Accounts receivable
	 				    	 	6,835		  	 	6,746	
	 Income taxes receivable
	 				    	 	1,401		  	 	915	
	 Prepaid expenses and other
	 				    	 	12,584		  	 	6,902	
	 Cash and cash equivalents
	 	 	14(d)	 	    	 	678,142		  	 	831,280	
	 Total assets
	 	 	 	 	    	$	7,161,808	 	  	$	6,747,472	 
				
	 LIABILITIES AND EQUITY
	 				    				  			
				
	 Non-current liabilities:
	 				    				  			
	 Unsecured debt, net
	 	 	7(a)	 	    	$	1,922,398	 	  	$	1,928,252	 
	 Cross currency interest rate swaps
	 	 	7(b)	 	    	 	29,471		  	 	97,311	
	 Long-term portion of lease obligations
	 	 	8	 	    	 	32,030		  	 	32,944	
	 Deferred tax liabilities
	 	 	 	 	    	 	460,538		  	 	392,841	
		 				    	 	2,444,437		  	 	2,451,348	
	 Current liabilities:
	 				    				  			
	 Unsecured debt, net
	 	 	7(a)	 	    	 	—	 	  	 	249,870	
	 Cross currency interest rate swaps
	 	 	7(b)	 	    	 	—	 	  	 	16,953	
	 Deferred revenue
	 	 	9	 	    	 	11,701		  	 	11,276	
	 Accounts payable and accrued liabilities
	 	 	9	 	    	 	56,249		  	 	61,197	
	 Distributions payable
	 	 	10	 	    	 	16,421		  	 	15,422	
	 Short-term portion of lease obligations
	 	 	8	 	    	 	726		  	 	829	
	 Income taxes payable
	 	 	 	 	    	 	22,706		  	 	18,373	
	 Total liabilities
	 	 	 	 	    	 	2,552,240		  	 	2,825,268	
				
	 Equity:
	 				    				  			
	 Stapled unitholders’ equity
	 	 	11	 	    	 	4,607,400		  	 	3,920,069	
	 Non-controlling
interests
	 	 	 	 	    	 	2,168		  	 	2,135	
	 Total equity
	 	 	 	 	    	 	4,609,568		  	 	3,922,204	
	 Total liabilities and equity
	 	 	 	 	    	$	7,161,808	 	  	$	6,747,472	 

 Commitments and contingencies (note 17) 

See accompanying notes 

  
 56    Granite REIT 2021 Second
Quarter Report 

 Condensed Combined Statements of Net Income 

(Canadian dollars in thousands) 
 (Unaudited) 

 

																					
	  	 	  	 	 	Three Months Ended
June 30,	 	  	Six Months Ended
June 30,	 
	  	 	Note	 	 	2021	 	  	2020	 	  	2021	 	  	2020	 
	 Rental revenue
	 	 	12(a)	 	 	$	93,963		  	$	81,008	 	  	$	189,905	 	  	$	159,058	 
	 Property operating costs
	 	 	12(b)	 	 	 	13,634		  	 	9,843		  	 	28,030		  	 	20,011	
	 Net operating income
	 				 	 	80,329		  	 	71,165		  	 	161,875		  	 	139,047	
						
	 General and administrative expenses
	 	 	12(c)	 	 	 	8,333		  	 	8,986		  	 	17,154		  	 	14,713	
	 Depreciation and amortization
	 				 	 	360		  	 	271		  	 	691		  	 	508	
	 Interest income
	 				 	 	(550	) 	  	 	(407	) 	  	 	(1,366	) 	  	 	(1,275	) 
	 Interest expense and other financing costs
	 	 	12(d)	 	 	 	9,603		  	 	7,763		  	 	24,397		  	 	14,408	
	 Foreign exchange (gains) losses, net
	 				 	 	(1,077	) 	  	 	18		  	 	(1,795	) 	  	 	(2,742	) 
	 Fair value gains on investment properties, net
	 	 	4	 	 	 	(308,025	) 	  	 	(34,548	) 	  	 	(517,541	) 	  	 	(70,541	) 
	 Fair value losses on financial instruments, net
	 	 	12(e)	 	 	 	149		  	 	3,891		  	 	488		  	 	5,785	
	 Loss on sale of investment properties
	 	 	5	 	 	 	421		  	 	—	 	  	 	576		  	 	—	 
	 Income before income taxes
	 				 	 	371,115		  	 	85,191	 	  	 	639,271	 	  	 	178,191	 
	 Income tax expense
	 	 	13	 	 	 	54,141		  	 	9,549		  	 	92,021	 	  	 	21,137	 
	 Net income
	 	 	 	 	 	$	316,974		  	$	75,642		  	$	547,250		  	$	157,054	
						
	 Net income attributable to:
	 				 				  				  				  			
	 Stapled unitholders
	 				 	$	316,911		  	$	75,657	 	  	$	547,044	 	  	$	156,953	 
	 Non-controlling
interests
	 	 	 	 	 	 	63		  	 	(15	) 	  	 	206		  	 	101	 
	 	 	 	 	 	 	$	316,974		  	$	75,642		  	$	547,250		  	$	157,054	

 See accompanying notes 

  
 Granite REIT 2021 Second Quarter
Report    57 

 Condensed Combined Statements of Comprehensive Income (Loss) 

(Canadian dollars in thousands) 
 (Unaudited) 

 

																					
	  	 	  	 	 	Three Months Ended
June 30,	 	 	Six Months Ended
June 30,	 
	  	 	Note	 	 	2021	 	 	2020	 	 	2021	 	 	2020	 
	 Net income
	 				 	$	316,974		 	$	75,642		 	$	547,250		 	$	157,054	
						
	 Other comprehensive (loss) income:
	 				 				 				 				 			
	 Foreign currency translation adjustment(1)
	 				 	 	(34,117	) 	 	 	(95,491	) 	 	 	(164,079	) 	 	 	164,148	
	 Unrealized gain (loss) on net investment hedges, includes income
taxes of nil(1)
	 	 	7(b)	 	 	 	26,452		 	 	12,433	 	 	 	93,419	 	 	 	(44,346	) 
	 Total other comprehensive (loss) income
	 	 	 	 	 	 	(7,665	) 	 	 	(83,058	) 	 	 	(70,660	) 	 	 	119,802	 
	 Comprehensive income (loss)
	 	 	 	 	 	$	309,309	 	 	$	(7,416	) 	 	$	476,590	 	 	$	276,856	 
	  
 (1)   Items that may be reclassified subsequently to net income if a foreign subsidiary is disposed of or hedges are terminated or no longer assessed as effective.

 
	 
     
 

	 Comprehensive income (loss) attributable to:
	  
	 				 			
						
	 Stapled unitholders
	 				 	$	309,220	 	 	$	(7,399	) 	 	$	476,427	 	 	$	276,735	 
	 Non-controlling
interests
	 	 	 	 	 	 	89		 	 	(17	) 	 	 	163		 	 	121	
	 	 	 	 	 	 	$	309,309	 	 	$	(7,416	) 	 	$	476,590	 	 	$	276,856	 

 See accompanying notes 

  
 58    Granite REIT 2021 Second
Quarter Report 

 Condensed Combined Statements of Unitholders’ Equity 

(Canadian dollars in thousands) 
 (Unaudited) 

 

																																	
	Six Months Ended June 30, 2021	 	 	  	 	 	  	 	 	  	 	 	  	 	 	  	 
	  	 	 Number

of units
 (000s)
	 	 	Stapled
units	 	 	Contributed
surplus	 	 	Retained
earnings	 	 	 Accumulated

other
 comprehensive

income
	 	 	Stapled
unitholders’
equity	 	 	 Non-

controlling
 interests
	 	 	Equity	 
	 As at January 1, 2021
	 	 	61,688		 	$	3,139,194	 	 	$	53,326	 	 	$	631,649	 	 	$	95,900	 	 	$	3,920,069	 	 	$	2,135	 	 	$	3,922,204	 
	 Net income
	 	 	—	 	 	 	—	 	 	 	—	 	 	 	547,044		 	 	—	 	 	 	547,044		 	 	206		 	 	547,250	
	 Other comprehensive loss
	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	(70,617	) 	 	 	(70,617	) 	 	 	(43	) 	 	 	(70,660	) 
	 Stapled unit offering, net of issuance costs (note 11(c))
	 	 	3,979		 	 	303,131		 	 	—	 	 	 	—	 	 	 	—	 	 	 	303,131		 	 	—	 	 	 	303,131	
	 Distributions (note 10)
	 	 	—	 	 	 	—	 	 	 	—	 	 	 	(93,544	) 	 	 	—	 	 	 	(93,544	) 	 	 	(144	) 	 	 	(93,688	) 
	 Contributions from non-controlling interests
	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	14		 	 	14	
	 Units issued under the stapled unit plan (note 11(a))
	 	 	17		 	 	1,317		 	 	—	 	 	 	—	 	 	 	—	 	 	 	1,317		 	 	—	 	 	 	1,317	
	 As at June 30, 2021
	 	 	65,684		 	$	3,443,642	 	 	$	53,326	 	 	$	1,085,149	 	 	$	25,283	 	 	$	4,607,400	 	 	$	2,168	 	 	$	4,609,568	 
									
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Six Months Ended June 30, 2020	 	 	  	 	 	  	 	 	  	 	 	  	 	 	  	 
	  	 	 Number

of units
 (000s)
	 	 	Stapled
units	 	 	Contributed
surplus	 	 	Retained
earnings	 	 	 Accumulated

other
 comprehensive

income
	 	 	Stapled
unitholders’
equity	 	 	 Non-

controlling
 interests
	 	 	Equity	 
	 As at January 1, 2020
	 	 	54,052		 	$	2,608,050	 	 	$	54,654	 	 	$	367,249	 	 	$	116,190	 	 	$	3,146,143	 	 	$	1,967	 	 	$	3,148,110	 
	 Net income
	 	 	—	 	 	 	—	 	 	 	—	 	 	 	156,953		 	 	—	 	 	 	156,953		 	 	101		 	 	157,054	
	 Other comprehensive income
	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	119,782		 	 	119,782		 	 	20		 	 	119,802	
	 Stapled unit offering, net of issuance costs (note 11(c))
	 	 	4,255		 	 	276,918		 	 	—	 	 	 	—	 	 	 	—	 	 	 	276,918		 	 	—	 	 	 	276,918	
	 Distributions (note 10)
	 	 	—	 	 	 	—	 	 	 	—	 	 	 	(79,060	) 	 	 	—	 	 	 	(79,060	) 	 	 	(130	) 	 	 	(79,190	) 
	 Contributions from non-controlling interests
	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	72		 	 	72	
	 Units issued under the stapled unit plan (note 11(a))
	 	 	22		 	 	1,278		 	 	—	 	 	 	—	 	 	 	—	 	 	 	1,278		 	 	—	 	 	 	1,278	
	 Units repurchased for cancellation (note 11(b))
	 	 	(491	) 	 	 	(23,689	) 	 	 	(1,328	) 	 	 	—	 	 	 	—	 	 	 	(25,017	) 	 	 	—	 	 	 	(25,017	) 
	 As at June 30, 2020
	 	 	57,838		 	$	2,862,557	 	 	$	53,326	 	 	$	445,142	 	 	$	235,972	 	 	$	3,596,997	 	 	$	2,030	 	 	$	3,599,027	 

 See accompanying notes 

  
 Granite REIT 2021 Second Quarter
Report    59 

 Condensed Combined Statements of Cash Flows 

(Canadian dollars in thousands) 
 (Unaudited) 

 

																					
	  	  	  	 	 	Three Months Ended
June 30,	 	 	Six Months Ended
June 30,	 
	  	  	Note	 	 	2021	 	 	2020	 	 	2021	 	 	2020	 
	 OPERATING ACTIVITIES
	  				 				 				 				 			
						
	 Net income
	  				 	$	316,974		 	$	75,642		 	$	547,250	 	 	$	157,054	
	 Items not involving operating cash flows
	  	 	14(a)	 	 	 	(254,786	) 	 	 	(19,633	) 	 	 	(422,685	) 	 	 	(43,330	) 
	 Current income tax expense
	  	 	13(a)	 	 	 	4,301		 	 	2,099		 	 	6,303		 	 	3,376	
	 Income taxes (paid) recovered
	  				 	 	(820	) 	 	 	(397	) 	 	 	(1,788	) 	 	 	23	
	 Interest expense
	  				 	 	9,316		 	 	7,365		 	 	19,413		 	 	13,584	
	 Interest paid
	  				 	 	(8,579	) 	 	 	(6,947	) 	 	 	(14,388	) 	 	 	(12,304	) 
	 Changes in working capital balances
	  	 	14(b)	 	 	 	(1,671	) 	 	 	7,040		 	 	(5,065	) 	 	 	1,628	
	 Cash provided by operating activities
	  	 	 	 	 	 	64,735		 	 	65,169		 	 	129,040		 	 	120,031	
						
	 INVESTING ACTIVITIES
	  				 				 				 				 			
						
	 Investment properties:
	  				 				 				 				 			
	 Property acquisitions
	  	 	3	 	 	 	(133,376	) 	 	 	(331,805	) 	 	 	(219,289	) 	 	 	(360,754	) 
	 Proceeds from disposals, net
	  	 	4, 5	 	 	 	12,809		 	 	—	 	 	 	23,204		 	 	—	 
	 Leasing commissions paid
	  				 	 	(390	) 	 	 	—	 	 	 	(880	) 	 	 	—	 
	 Tenant allowances paid
	  				 	 	(144	) 	 	 	—	 	 	 	(301	) 	 	 	(241	) 
	 Additions to income-producing properties
	  				 	 	(783	) 	 	 	(1,083	) 	 	 	(783	) 	 	 	(3,318	) 
	 Additions to properties under development
	  				 	 	(4,865	) 	 	 	(26,122	) 	 	 	(17,286	) 	 	 	(32,194	) 
	 Construction funds released from escrow
	  	 	6		 	 	—	 	 	 	4,291		 	 	28		 	 	6,591	
	 Acquisition deposits
	  				 	 	(1,000	) 	 	 	(72,450	) 	 	 	(1,000	) 	 	 	(89,879	) 
	 Fixed asset additions
	  	 	 	 	 	 	(373	) 	 	 	(156	) 	 	 	(397	) 	 	 	(734	) 
	 Cash used in investing activities
	  	 	 	 	 	 	(128,122	) 	 	 	(427,325	) 	 	 	(216,704	) 	 	 	(480,529	) 
						
	 FINANCING ACTIVITIES
	  				 				 				 				 			
						
	 Monthly distributions paid
	  				 	 	(46,288	) 	 	 	(38,890	) 	 	 	(92,551	) 	 	 	(78,140	) 
	 Proceeds from unsecured debentures, net of financing costs
	  				 	 	—	 	 	 	497,894		 	 	—	 	 	 	497,894	
	 Repayment of lease obligations
	  	 	8		 	 	(177	) 	 	 	(366	) 	 	 	(359	) 	 	 	(444	) 
	 Repayment of unsecured debt, including early redemption premium
	  	 	7(a)	 	 	 	—	 	 	 	—	 	 	 	(253,963	) 	 	 	—	 
	 Settlement of cross currency interest rate swap
	  	 	7(a)	 	 	 	—	 	 	 	—	 	 	 	(18,787	) 	 	 	—	 
	 Financing costs paid
	  	 	6	 	 	 	—	 	 	 	—	 	 	 	(2,914	) 	 	 	(30	) 
	 Distributions to non-controlling interests
	  				 	 	(144	) 	 	 	(130	) 	 	 	(144	) 	 	 	(130	) 
	 Proceeds from stapled unit offerings, net of issuance costs
	  	 	11(c)	 	 	 	303,132		 	 	277,511		 	 	303,132		 	 	277,511	
	 Repurchase of stapled units
	  	 	11(b)	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	(25,017	) 
	 Cash provided by (used in) financing activities
	  	 	 	 	 	 	256,523		 	 	736,019		 	 	(65,586	) 	 	 	671,644	
	 Effect of exchange rate changes on cash and cash
equivalents
	  	 	 	 	 	 	4,295		 	 	1,313		 	 	112		 	 	7,425	
	 Net increase (decrease) in cash and cash equivalents during the period
	  				 	 	197,431		 	 	375,176		 	 	(153,138	) 	 	 	318,571	
	 Cash and cash equivalents, beginning of period
	  	 	 	 	 	 	480,711		 	 	242,072		 	 	831,280		 	 	298,677	
	 Cash and cash equivalents, end of period
	  	 	 	 	 	$	678,142	 	 	$	617,248	 	 	$	678,142	 	 	$	617,248	 

 See accompanying notes 

  
 60    Granite REIT 2021 Second
Quarter Report 

 Notes to Condensed Combined Financial Statements 

(All amounts in thousands of Canadian dollars unless otherwise noted) 

(Unaudited) 
  

	
	 1.  NATURE AND
DESCRIPTION OF THE TRUST

 Effective January 3, 2013, Granite Real Estate Inc. (“Granite Co.”) completed its conversion from a
corporate structure to a stapled unit real estate investment trust (“REIT”) structure. All of the common shares of Granite Co. were exchanged, on a one-for-one
basis, for stapled units, each of which consists of one unit of Granite Real Estate Investment Trust (“Granite REIT”) and one common share of Granite REIT Inc. (“Granite GP”). Granite REIT is an unincorporated, open-ended,
limited purpose trust established under and governed by the laws of the province of Ontario and created pursuant to a Declaration of Trust dated September 28, 2012 and as subsequently amended on January 3, 2013 and December 20, 2017.
Granite GP was incorporated on September 28, 2012 under the Business Corporations Act (British Columbia). Granite REIT, Granite GP and their subsidiaries (together “Granite” or the “Trust”) are carrying on the
business previously conducted by Granite Co. 
 The stapled units trade on the Toronto Stock Exchange and on the New York Stock Exchange. The principal
office of Granite REIT is 77 King Street West, Suite 4010, P.O. Box 159, Toronto-Dominion Centre, Toronto, Ontario, M5K 1H1, Canada. The registered office of Granite GP is Suite 2600, Three Bentall Centre, 595 Burrard Street, P.O. Box 49314,
Vancouver, British Columbia, V7X 1L3, Canada. 
 The Trust is a Canadian-based REIT engaged in the acquisition, development, ownership and management
of logistics, warehouse and industrial properties in North America and Europe. 
 These condensed combined financial statements were approved by the
Board of Trustees of Granite REIT and Board of Directors of Granite GP on August 4, 2021. 
  

	
	 2.  SIGNIFICANT
ACCOUNTING POLICIES

  

	(a)	 Basis of Presentation and Statement of Compliance 

The condensed combined financial statements for the three and six month periods ended June 30, 2021 have been prepared in accordance with
International Accounting Standard 34, Interim Financial Reporting (“IAS 34”) as issued by the International Accounting Standards Board (“IASB”). These interim condensed combined financial statements do not include all the
information and disclosures required in the annual financial statements, which were prepared in accordance with International Financial Reporting Standards (“IFRS”), and should be read in conjunction with the Trust’s annual financial
statements as at and for the year ended December 31, 2020. 
  

	(b)	 Combined Financial Statements and Basis of Consolidation 

As a result of the REIT conversion described in note 1, the Trust does not have a single parent; however, each unit of Granite REIT and each share of
Granite GP trade as a single stapled unit and accordingly, Granite REIT and Granite GP have identical ownership. Therefore, these financial statements have been prepared on a combined basis whereby the assets, liabilities and results of Granite GP
and Granite REIT have been combined. The combined financial statements include the subsidiaries of Granite GP and Granite REIT. Subsidiaries are fully consolidated by Granite GP or Granite REIT from the date of acquisition, being the date on which
control is obtained. The 

  
 Granite REIT 2021 Second Quarter
Report    61 

 
subsidiaries continue to be consolidated until the date that such control ceases. Control exists when Granite GP or Granite REIT have power, exposure or rights to variable returns and the ability
to use their power over the entity to affect the amount of returns it generates. 
 All intercompany balances, income and expenses and unrealized gains
and losses resulting from intercompany transactions are eliminated. 
  

	(c)	 Accounting policies 

The condensed combined financial statements have been prepared using the same accounting policies as were used for the Trust’s annual combined
financial statements and the notes thereto for the year ended December 31, 2020. 
  

	(d)	 Future Accounting Policy Changes 

As at June 30, 2021, there are no new accounting standards issued but not yet applicable to the condensed combined financial statements. 

 

	(e)	 COVID-19 Pandemic 

The coronavirus disease (“COVID-19”) pandemic has resulted in governments across Granite’s
operating markets enacting emergency measures to combat the spread of the virus. These measures, which include the implementation of travel bans, self-imposed quarantine periods and social distancing, have caused material disruption to businesses
globally resulting in an economic slowdown. Global equity and capital markets have also experienced significant volatility during this time. Governments across the globe have reacted with significant monetary and fiscal interventions designed to
stabilize economic conditions. Granite is continuing to monitor the impact of the COVID-19 pandemic on its business, liquidity and results of operations. 

During the three and six month periods ended June 30, 2021, there has not been any significant impact on Granite’s operations, assets or
liabilities as a result of COVID-19. Throughout the pandemic thus far, Granite has collected 100% of rents due and therefore has not recognized any provisions for uncollected rent at this time. Granite
reviewed its future cash flow projections and the valuation of its properties considering the impacts of the COVID-19 pandemic during the six month period ended June 30, 2021 and Granite does not expect,
at this time, that COVID-19 will have a significant negative impact to the fair value of its investment property portfolio. 

Granite continues to review its future cash flow projections and the valuation of its investment properties in light of the COVID-19 pandemic. The carrying value of Granite’s investment properties reflects its best estimate for the highest and best use as at June 30, 2021 (note 4). The duration of the COVID-19 pandemic, and the potential for further waves of new infections in the markets where Granite operates that could lead to additional emergency measures, cannot be predicted. As such, the length and full
scope of the economic impact of COVID-19 and other consequential changes it will have on Granite’s business and operations in the long-term cannot be forecasted with certainty at this time. Certain
aspects of Granite’s business and operations that could potentially be impacted include rental income, occupancy, capital expenditures, future demand for space and market rents, all of which ultimately impact the underlying valuation of
investment properties. 

  
 62    Granite REIT 2021 Second
Quarter Report 

	
	
3.  ACQUISITIONS

 During the six month period ended June 30, 2021 and 2020, Granite made the following property acquisitions: 

Acquisitions During The Six Months Ended June 30, 2021 
  

																					
	Property	  	Location	 	  	Date acquired	 	  	Property
purchase
price	 	  	 Transaction

costs
	 	  	Total
acquisition
cost	 
	 Income-producing properties:
	  				  				  				  				  			
	 3090 Highway 42(1)
	  	 
	Locust Grove,
GA	 
 	  	 	March 12, 2021	 	  	$	85,512	 	  	$	401	 	  	$	85,913	 
	 3801 Rock Creek Blvd.
	  	 	Joliet, IL	 	  	 	June 25, 2021	 	  	 	30,247		  	 	75		  	 	30,322	
	 3900 Rock Creek Blvd.
	  	 	Joliet, IL	 	  	 	June 25, 2021	 	  	 	34,673		  	 	85		  	 	34,758	
	 1695-1701 Crossroads Dr.
	  	 	Joliet, IL	 	  	 	June 25, 2021	 	  	 	50,657		  	 	118		  	 	50,775	
		  				  				  	 	201,089		  	 	679		  	 	201,768	
	 Property under development:
	  				  				  				  				  			
	 2120 Logistics Way
	  	 
	Murfreesboro,
TN	 
 	  	 	June 30, 2021	 	  	 	17,308		  	 	213		  	 	17,521	
	 	  	 	 	 	  	 	 	 	  	$	218,397	 	  	$	892	 	  	$	219,289	 

  

	(1) 	 	 The Trust acquired the leasehold interest in the property which resulted in the recognition of a right-of-use asset, including transaction costs, of $85,913. The Trust will acquire freehold title to the property on December 1, 2028. 

The property under development in Murfreesboro, Tennessee is expected to be completed by September 2022. As at June 30, 2021, the remaining costs to
complete the development are expected to be approximately $64.7 million (US$52.2 million) and are included in the commitments and contingencies note (note 17). 

Acquisitions During The Six Months Ended June 30, 2020 
  

																					
	Property	 	Location	 	 	Date acquired	 	 	Property
purchase
price	 	 	 Transaction

costs
	 	 	Total
acquisition
cost	 
	 Property under development:
	 				 				 				 				 			
	 Aquamarijnweg 2
	 	 
	Bleiswijk,
Netherlands	 
 	 	 	March 13, 2020	 	 	$	28,804	 	 	$	145	 	 	$	28,949	 
	 Income-producing properties:
	 				 				 				 				 			
	 Oude Graaf 15
	 	 	Weert, Netherlands	 	 	 	May 1, 2020	 	 	 	31,910		 	 	173		 	 	32,083	
	 Midwest portfolio (four properties):
	 				 				 				 				 			
	 6201 Green Pointe Drive South,
8779 Le Saint Drive,
8754 Trade Port Drive and
445 Airtech
Parkway
	 	 

	Groveport, OH,
Hamilton, OH,
West Chester, OH,
and Indianapolis, IN	 

 
 	 	 	June 18, 2020	 	 	 	177,647		 	 	757		 	 	178,404	
	 Memphis portfolio (three properties):
	 				 				 				 				 			
	 4460 E. Holmes Road,
4995 Citation Drive and
8650 Commerce Drive
	 	 
	Memphis, TN,
and Southaven, MS	
 	 	 	June 18, 2020	 	 	 	111,590		 	 	464		 	 	112,054	
		 				 				 	 	321,147		 	 	1,394		 	 	322,541	
	 Development land:
	 				 				 				 				 			
	 5005 Parker Henderson Road
	 	 	Fort Worth, TX	 	 	 	June 8, 2020	 	 	 	8,932		 	 	332		 	 	9,264	
	 	 	 	 	 	 	 	 	 	 	$	358,883	 	 	$	1,871	 	 	$	360,754	 

  
 Granite REIT 2021 Second Quarter
Report    63 

 During the six month period ended June 30, 2021, transaction costs of $0.9 million (2020
— $1.9 million), which included legal and advisory costs, were first capitalized to the cost of the respective properties and then subsequently expensed to net fair value gains on investment properties on the condensed combined statements of
net income as a result of measuring the properties at fair value. 
  

	
	 4.  INVESTMENT
PROPERTIES

  

									
	As at	  	June 30,
2021	 	  	December 31,
2020	 
	 Income-producing properties
	  	$	6,307,725	 	  	$	5,786,338	 
	 Properties under development
	  	 	60,949		  	 	31,488	
	 Land held for development
	  	 	27,886		  	 	37,757	
	 	  	$	6,396,560	 	  	$	5,855,583	 

 Changes in investment properties are shown in the following table: 

 

																																	
	  	 	 Six Months Ended

June 30, 2021
	 	 	  	 	 	  	 	 	 Year Ended

December 31, 2020
	 
	  	 	Income-
producing
properties	 	 	Properties
under
development	 	 	Land held
for
development	 	 	  	 	 	  	 	 	Income-
producing
properties	 	 	 Properties

under
development
	 	 	Land held
for
development	 
	 Balance, beginning of period
	 	$	5,786,338	 	 	$	31,488	 	 	$	37,757	 	 				 				 	$	4,377,623	 	 	$	51,310	 	 	$	28,966	 
	 Maintenance or improvements
	 	 	1,582		 	 	—	 	 	 	—	 	 				 				 	 	3,997		 	 	—	 	 	 	—	 
	 Leasing commissions
	 	 	177		 	 	—	 	 	 	—	 	 				 				 	 	3,449		 	 	—	 	 	 	—	 
	 Tenant allowances
	 	 	301		 	 	—	 	 	 	—	 	 				 				 	 	1,784		 	 	—	 	 	 	—	 
	 Developments or expansions
	 	 	2,071		 	 	4,745		 	 	—	 	 				 				 	 	12,582		 	 	39,083		 	 	458	
	 Acquisitions (note 3)
	 	 	201,768		 	 	17,521		 	 	—	 	 				 				 	 	1,000,618		 	 	35,777		 	 	9,264	
	 Costs to complete acquired property (note 6)
	 	 	28		 	 	—	 	 	 	—	 	 				 				 	 	8,622		 	 	—	 	 	 	—	 
	 Disposals (note 5)
	 	 	(23,780	) 	 	 	—	 	 	 	—	 	 				 				 	 	(31,276	) 	 	 	—	 	 	 	—	 
	 Transfer to properties under development
	 	 	—	 	 	 	8,952		 	 	(8,952	) 	 				 				 	 	—	 	 	 	—	 	 	 	—	 
	 Transfer to income-producing properties
	 	 	—	 	 	 	—	 	 	 	—	 	 				 				 	 	97,733		 	 	(97,733	) 	 	 	—	 
	 Amortization of straight-line rent
	 	 	4,847		 	 	—	 	 	 	—	 	 				 				 	 	8,842		 	 	—	 	 	 	—	 
	 Amortization of tenant allowances
	 	 	(2,599	) 	 	 	—	 	 	 	—	 	 				 				 	 	(5,321	) 	 	 	—	 	 	 	—	 
	 Other changes
	 	 	203		 	 	—	 	 	 	—	 	 				 				 	 	(16	) 	 	 	—	 	 	 	—	 
	 Fair value gains (losses), net
	 	 	517,541		 	 	—	 	 	 	—	 	 				 				 	 	273,914		 	 	(145	) 	 	 	(332	) 
	 Foreign currency translation, net
	 	 	(180,752	) 	 	 	(1,757	) 	 	 	(919	) 	 	 	 	 	 	 	 	 	 	 	33,787		 	 	3,196		 	 	(599	) 
	 Balance, end of period
	 	$	6,307,725	 	 	$	60,949		 	$	27,886		 	 	 	 	 	 	 	 	 	$	5,786,338	 	 	$	31,488		 	$	37,757	 

 The Trust determines the fair value of an income-producing property based upon, among other things, rental income from
current leases and assumptions about rental income from future leases reflecting market conditions and lease renewals at the applicable balance sheet dates, less future cash outflows in respect of such leases. Fair values are primarily determined by
discounting the expected future cash flows, generally over a term of 10 years, plus a terminal value based on the application of a capitalization rate to estimated year 11 cash flows. The fair values of properties

  
 64    Granite REIT 2021 Second
Quarter Report 

 
under development are measured using a discounted cash flow model, net of costs to complete, as of the balance sheet date. The Trust measures its investment properties using valuations prepared
by management. The Trust does not measure its investment properties based on valuations prepared by external appraisers but uses such external appraisals as data points, together with other external market information accumulated by management, in
arriving at its own conclusions on values. Management uses valuation assumptions such as discount rates, terminal capitalization rates and market rental rates applied in external appraisals or sourced from valuation experts; however, the Trust also
uses its historical renewal experience with tenants, its direct knowledge of the specialized nature of certain of Granite’s portfolio and tenant profile and its knowledge of the actual condition of the properties in making business judgments
about lease renewal probabilities, renewal rents and capital expenditures. There has been no change in the valuation methodology during the period. 

Refer to note 2(e) for a discussion of the impact of the COVID-19 pandemic on the Trust’s business and
operations, including the valuation of investment properties. 
 Included in investment properties is $31.2 million (December 31, 2020 —
$27.2 million) of net straight-line rent receivables arising from the recognition of rental revenue on a straight-line basis over the lease term. 

Details about contractual obligations to purchase, construct and develop properties can be found in the commitments and contingencies note (note 17).

 Valuations are most sensitive to changes in discount rates and terminal capitalization rates. The key valuation metrics for income-producing
properties by country are set out below: 
  

																																	
	As at	 	June 30, 2021	 	 	  	 	 	  	 	 	December 31, 2020	 
	  	 	Weighted
average(1)	 	 	Maximum	 	 	Minimum	 	 	  	 	 	  	 	 	Weighted
average(1)	 	 	Maximum	 	 	Minimum	 
	 Canada
	 				 				 				 				 				 				 				 			
	 Discount rate
	 	 	5.38%	 	 	 	5.75%	 	 	 	4.75%	 	 				 				 	 	5.71%	 	 	 	6.25%	 	 	 	5.25%	 
	 Terminal capitalization rate
	 	 	4.80%	 	 	 	5.25%	 	 	 	4.25%	 	 				 				 	 	5.22%	 	 	 	5.50%	 	 	 	4.75%	 
	 United States
	 				 				 				 				 				 				 				 			
	 Discount rate
	 	 	5.87%	 	 	 	9.25%	 	 	 	5.00%	 	 				 				 	 	6.18%	 	 	 	9.25%	 	 	 	5.00%	 
	 Terminal capitalization rate
	 	 	5.22%	 	 	 	8.50%	 	 	 	4.25%	 	 				 				 	 	5.58%	 	 	 	8.50%	 	 	 	4.75%	 
	 Germany
	 				 				 				 				 				 				 				 			
	 Discount rate
	 	 	6.73%	 	 	 	9.75%	 	 	 	5.25%	 	 				 				 	 	6.85%	 	 	 	9.00%	 	 	 	5.50%	 
	 Terminal capitalization rate
	 	 	5.63%	 	 	 	8.75%	 	 	 	4.25%	 	 				 				 	 	5.83%	 	 	 	8.25%	 	 	 	4.50%	 
	 Austria
	 				 				 				 				 				 				 				 			
	 Discount rate
	 	 	8.58%	 	 	 	10.50%	 	 	 	8.25%	 	 				 				 	 	8.58%	 	 	 	10.50%	 	 	 	8.25%	 
	 Terminal capitalization rate
	 	 	7.47%	 	 	 	9.75%	 	 	 	7.00%	 	 				 				 	 	7.47%	 	 	 	9.75%	 	 	 	7.00%	 
	 Netherlands
	 				 				 				 				 				 				 				 			
	 Discount rate
	 	 	4.59%	 	 	 	6.50%	 	 	 	3.70%	 	 				 				 	 	4.99%	 	 	 	6.25%	 	 	 	4.40%	 
	 Terminal capitalization rate
	 	 	5.24%	 	 	 	7.75%	 	 	 	3.90%	 	 				 				 	 	5.58%	 	 	 	7.40%	 	 	 	4.80%	 
	 Other
	 				 				 				 				 				 				 				 			
	 Discount rate
	 	 	6.85%	 	 	 	7.00%	 	 	 	6.75%	 	 				 				 	 	7.32%	 	 	 	7.50%	 	 	 	7.00%	 
	 Terminal capitalization rate
	 	 	6.30%	 	 	 	6.50%	 	 	 	6.00%	 	 				 				 	 	6.97%	 	 	 	9.75%	 	 	 	6.00%	 
	 Total
	 				 				 				 				 				 				 				 			
	 Discount rate
	 	 	6.05%	 	 	 	10.50%	 	 	 	3.70%	 	 				 				 	 	6.38%	 	 	 	10.50%	 	 	 	4.40%	 
	 Terminal capitalization rate
	 	 	5.45%	 	 	 	9.75%	 	 	 	3.90%	 	 	 	 	 	 	 	 	 	 	 	5.82%	 	 	 	9.75%	 	 	 	4.50%	 

  

	(1)	 	 Weighted based on income-producing property fair value. 

  
 Granite REIT 2021 Second Quarter
Report    65 

	
	
5.  DISPOSITIONS

 During the six month period ended June 30, 2021, Granite disposed of two properties located in the United Kingdom
and Austria. The details of the disposed properties are as follows: 
  

													
	Property	  	Location	 	  	Date disposed	 	  	Sale price	 
	 Hedera Road, Ravensbank Business Park
	  	 	Redditch, United Kingdom	 	  	 	January 28, 2021	 	  	$	10,550	 
	 Puchberger Straße 267
	  	 	Weikersdorf, Austria	 	  	 	June 30, 2021	 	  	 	13,230	
	 	  	 	 	 	  	 	 	 	  	$	23,780	 

 There were no property dispositions during the six month period ended June 30, 2020. 

During the three and six month periods ended June 30, 2021, Granite incurred $0.4 million (2020 — nil) and $0.6 million (2020 —
nil), respectively, of broker commissions and legal and advisory costs associated with the disposal which are included in loss on sale of investment properties on the condensed combined statements of net income. 

 

	
	
6.  NON-CURRENT ASSETS

 Construction Funds In Escrow 

On November 19, 2019, Granite acquired a developed property located at 1301 Chalk Hill Road, Dallas, Texas which had outstanding construction work.
Consequently, $20.5 million (US$15.5 million) of the purchase price was placed in escrow to pay for the remaining construction costs. The funds are released from escrow as the construction is completed. As at June 30, 2021,
$8.1 million (US$6.6 million) remained in escrow (December 31, 2020 — $8.4 million (US$6.6 million)). As construction is completed, the construction costs are capitalized to the cost of the investment property. During the six month
period ended June 30, 2021, less than $0.1 million (less than US$0.1 million) was released from escrow and capitalized to the property (note 4) (2020 — $6.6 million (US$4.8 million)). 

Other Assets 
  

									
	As at	  	June 30,
2021	 	  	December 31,
2020	 
	 Deferred financing costs associated with the revolving credit facility
	  	$	2,760	 	  	$	599	 
	 Long-term receivables
	  	 	321		  	 	349	
	 	  	$	3,081	 	  	$	948	 

 On March 31, 2021, the Trust amended its existing unsecured revolving credit facility agreement to extend the
existing maturity date from February 1, 2023 to March 31, 2026 and increased its borrowing capacity under the credit facility from $0.5 billion to $1.0 billion (note 9), resulting in financing costs of $2.9 million being
incurred. In addition, during the six month period ended June 30, 2021, Granite recorded an acceleration of $0.5 million amortization for its original credit facility’s financing costs (note 12(d)) (2020 — nil). 

  
 66    Granite REIT 2021 Second
Quarter Report 

	
	 7.  UNSECURED DEBT AND
CROSS CURRENCY INTEREST RATE SWAPS

  

	(a)	 Unsecured Debentures and Term Loans, Net 

 

																					
	As at	 	  	 	 	June 30, 2021	 	 	December 31, 2020	 
	  	 	Maturity Date	 	 	Amortized
Cost(1)	 	 	 Principal

issued and
outstanding
	 	 	Amortized
Cost(1)	 	 	 Principal

issued and
outstanding
	 
	 2021 Debentures
	 	 	July 5, 2021	 	 	$	—		 	$	—		 	$	249,870		 	$	250,000	
	 2023 Debentures
	 	 	November 30, 2023	 	 	 	399,226		 	 	400,000		 	 	399,066		 	 	400,000	
	 2027 Debentures
	 	 	June 4, 2027	 	 	 	497,397		 	 	500,000		 	 	497,179		 	 	500,000	
	 2030 Debentures
	 	 	December 18, 2030	 	 	 	497,189		 	 	500,000		 	 	497,060		 	 	500,000	
	 2024 Term Loan
	 	 	December 19, 2024	 	 	 	229,019		 	 	229,483		 	 	235,419		 	 	235,949	
	 2026 Term Loan
	 	 	December 11, 2026	 	 	 	299,567		 	 	300,000		 	 	299,528		 	 	300,000	
	 	 	 	 	 	 	$	1,922,398	 	 	$	1,929,483	 	 	$	2,178,122	 	 	$	2,185,949	 

  

	(1)	 	 The amounts outstanding are net of deferred financing costs and, in the case of the term loans, debt modification losses.
The deferred financing costs and debt modification losses are amortized using the effective interest method and are recorded in interest expense. 

  

									
	As at	  	June 30,
2021	 	  	December 31,
2020	 
	 Unsecured Debentures and Term Loans, Net
	  				  			
	 Non-current
	  	$	1,922,398		  	$	1,928,252	
	 Current
	  	 	—	 	  	 	249,870	
	 	  	$	1,922,398	 	  	$	2,178,122	 

 On January 4, 2021, the Trust redeemed in full the outstanding $250.0 million aggregate principal amount of
the 2021 Debentures. Granite incurred early redemption premium of $4.0 million, which have been recorded in interest expense and other financing costs in the condensed combined statement of net income (note 12(d)). In conjunction with the
redemption, the 2021 Cross Currency Interest Rate Swap was terminated on January 4, 2021, and the related mark to market liability of $18.8 million was settled. 
  

	(b)	 Cross Currency Interest Rate Swaps 

 

									
	As at	  	June 30,
2021	 	 	December 31,
2020	 
	 Financial assets at fair value
	  				 			
	 2027 Cross Currency Interest Rate Swap
	  	$	38,300		 	$	28,676	
	 2030 Cross Currency Interest Rate Swap
	  	 	10,516		 	 	—	 
		  	$	48,816		 	$	28,676	
	 Financial liabilities at fair value
	  				 			
	 2021 Cross Currency Interest Rate Swap
	  	$	—	 	 	$	16,953	
	 2023 Cross Currency Interest Rate Swap
	  	 	12,351		 	 	36,540	
	 2030 Cross Currency Interest Rate Swap
	  	 	—	 	 	 	10,545	
	 2024 Cross Currency Interest Rate Swap
	  	 	16,300		 	 	25,370	
	 2026 Cross Currency Interest Rate Swap
	  	 	820		 	 	24,856	
	 	  	$	29,471		 	$	114,264	

  
 Granite REIT 2021 Second Quarter
Report    67 

									
	As at	  	June 30,
2021	 	  	December 31,
2020	 
	 Financial liabilities at fair value
	  				  			
	 Non-current
	  	$	29,471		  	$	97,311	
	 Current
	  	 	—	 	  	 	16,953	
	 	  	$	29,471		  	$	114,264	

 On July 3, 2014, the Trust entered into a cross currency interest rate swap (the “2021 Cross Currency Interest
Rate Swap”) to exchange the 3.788% semi-annual interest payments from the 2021 Debentures for Euro denominated payments at a 2.68% fixed interest rate. In addition, under the terms of the swap, the Trust will pay principal proceeds of €171.9 million in exchange for which it will receive $250.0 million on July 5, 2021. On January 4, 2021, the 2021 Cross Currency Interest Rate Swap was terminated in conjunction
with the redemption of the 2021 Debentures (note 7(a)). 
 On December 20, 2016, the Trust entered into a cross currency interest rate swap (the
“2023 Cross Currency Interest Rate Swap”) to exchange the 3.873% semi-annual interest payments from the 2023 Debentures for Euro denominated payments at a 2.43% fixed interest rate. In addition, under the terms of the swap, the Trust will
pay principal proceeds of €281.1 million in exchange for which it will receive $400.0 million on November 30, 2023. 

On September 24, 2019, in conjunction with a refinancing, the Trust entered into a new cross currency interest rate swap (the “2024 Cross
Currency Interest Rate Swap”) to exchange the LIBOR plus margin monthly interest payments from the 2024 Term Loan for Euro denominated payments at a 0.522% fixed interest rate. In addition, under the terms of the 2024 Cross Currency Interest
Rate Swap, Granite will pay principal proceeds of €168.2 million in exchange for which it will receive US$185.0 million on December 19, 2024. 

On November 27, 2019, also in conjunction with a refinancing, the Trust entered into a new cross currency interest rate swap (the “2026 Cross
Currency Interest Rate Swap”) to exchange the CDOR plus margin monthly interest payments from the 2026 Term Loan for Euro denominated payments at a 1.355% fixed interest rate. In addition, under the terms of the swap, the Trust will pay
principal proceeds of €205.5 million in exchange for which it will receive $300.0 million on December 11, 2026. 

On June 4, 2020, the Trust entered into a cross currency interest rate swap (the “2027 Cross Currency Interest Rate Swap”) to exchange
the $500.0 million proceeds and the 3.062% semi-annual interest payments from the 2027 Debentures for US$370.3 million and US dollar denominated interest payments at a 2.964% fixed interest rate. In addition, under the terms of the swap,
the Trust will pay principal proceeds of US$370.3 million in exchange for which it will receive $500.0 million on June 4, 2027. 
 On
December 18, 2020, the Trust entered into a cross currency interest rate swap (the “2030 Cross Currency Interest Rate Swap”) to exchange the 2.378% semi-annual interest payments from the 2030 Debentures for Euro denominated interest
payments at a 1.045% fixed interest rate. In addition, under the terms of the swap, the Trust will pay principal proceeds of €319.4 million in exchange for which it will receive
$500.0 million on December 18, 2030. 
 The cross currency interest rate swaps are designated as net investment hedges of the Trust’s
investments in foreign operations. The effectiveness of the hedges is assessed quarterly. Gains 

  
 68    Granite REIT 2021 Second
Quarter Report 

 
and losses associated with the effective portion of the hedges are recognized in other comprehensive income. For the three and six month periods ended June 30, 2021, the Trust has assessed
the net investment hedge associated with each cross currency interest rate swap, except for the 2021 Cross Currency Interest Rate Swap and a portion of the 2024 Cross Currency Interest Rate Swap, to be effective. 

On December 18, 2020, as a result of the designation of the 2030 Cross Currency Interest Rate Swap, the Trust
de-designated the 2021 Cross Currency Interest Rate Swap. Since the Trust did not employ hedge accounting for the 2021 Cross Currency Interest Rate Swap from the period January 1 to January 3, 2021,
a fair value loss of $0.7 million is recognized in fair value losses on financial instruments, net (note 12(e)) in the condensed combined statement of net income. 

With the refinancing of the 2024 Term Loan in 2019, the Trust has assessed only the foreign exchange movements associated with the fair value change of
the 2024 Cross Currency Interest Rate Swap to be effective. Accordingly, the change in fair value relating to foreign exchange movements on the 2024 Cross Currency Interest Rate Swap is recorded in other comprehensive income. For the three and six
month periods ended June 30, 2021, since there is no effective hedge for the interest and other movements associated with the fair value change of the 2024 Cross Currency Interest Rate Swap, a fair value gain of $0.6 million and
$0.9 million is recognized in fair value losses on financial instruments, net (note 12(e)), respectively, in the condensed combined statements of net income. 

The Trust has elected to record the differences resulting from the lower interest rates associated with the cross currency interest rate swaps in the
condensed combined statements of net income. 
  

	
	 8.  LEASE
OBLIGATIONS

 As at June 30, 2021, the Trust had leases for the use of office space, office and other equipment, and ground leases
for the land upon which four income-producing properties in Europe and Canada are situated. The Trust recognized these leases as right-of-use assets and recorded related
lease liability obligations. 
 Future minimum lease payments relating to the
right-of-use assets as at June 30, 2021 in aggregate for the next five years and thereafter are as follows: 

 

					
	 Remainder of 2021
	  	$	427	
	 2022
	  	 	535	
	 2023
	  	 	321	
	 2024
	  	 	294	
	 2025
	  	 	261	
	 2026 and thereafter
	  	 	30,918	
	 	  	$	32,756	 

 During the three and six month periods ended June 30, 2021, the Trust recognized $0.3 million (2020 — $0.4
million) and $0.8 million (2020 — $0.8 million) of interest expense, respectively, related to lease obligations (note 12(d)). 

  
 Granite REIT 2021 Second Quarter
Report    69 

	
	 9.  CURRENT
LIABILITIES

 Deferred Revenue 
 Deferred
revenue relates to prepaid and unearned revenue received from tenants and fluctuates with the timing of rental receipts. 
 Bank Indebtedness 

On March 31, 2021, the Trust amended its existing unsecured revolving credit facility agreement to extend the existing maturity date of
February 1, 2023 to March 31, 2026. In addition, the credit facility’s limit increased from $0.5 billion to $1.0 billion. Draws on the credit facility are available by way of Canadian dollar, US dollar or Euro denominated
loans or Canadian dollar or US dollar denominated letters of credit. The credit facility provides Granite the ability to increase the amount of the commitment by an additional aggregate principal amount of up to $500.0 million with the consent
of the participating lenders. As at June 30, 2021, the Trust had no amounts drawn (December 31, 2020 — nil) from the credit facility and $1.7 million (December 31, 2020 — $1.0 million) in letters of credit issued against the
facility. 
 Accounts Payable and Accrued Liabilities 
  

									
	As at	  	June 30,
2021	 	  	December 31,
2020	 
	 Accounts payable
	  	$	2,256	 	  	$	3,849	 
	 Commodity tax payable
	  	 	5,807		  	 	4,337	
	 Tenant security deposits
	  	 	6,143		  	 	6,793	
	 Employee unit-based compensation
	  	 	7,824		  	 	7,118	
	 Trustee/director unit-based compensation
	  	 	6,291		  	 	5,219	
	 Accrued salaries, incentives and benefits
	  	 	3,328		  	 	5,783	
	 Accrued interest payable
	  	 	2,952		  	 	7,956	
	 Accrued construction payable
	  	 	1,985		  	 	6,285	
	 Accrued professional fees
	  	 	1,621		  	 	2,620	
	 Accrued property operating costs
	  	 	10,849		  	 	8,878	
	 Other tenant related liabilities
	  	 	3,624		  	 	1,690	
	 Other accrued liabilities
	  	 	3,569		  	 	669	
	 	  	$	56,249	 	  	$	61,197	 

  

	
	 10.  DISTRIBUTIONS TO
STAPLED UNITHOLDERS

 Total distributions declared to stapled unitholders in the three month period ended June 30, 2021 were
$47.3 million (2020 — $39.9 million) or 75.0 cents per stapled unit (2020 — 72.6 cents per stapled unit). Total distributions declared to stapled unitholders in the six month period ended June 30, 2021 were $93.5 million
(2020 — $79.1 million) or $1.50 per stapled unit (2020 — $1.45 per stapled unit). 
 Distributions payable at June 30, 2021 of
$16.4 million (25.0 cents per stapled unit), representing the June 2021 monthly distribution, were paid on July 15, 2021. Distributions payable at December 31, 2020 of $15.4 million were paid on January 15, 2021 and
represented the December 2020 monthly distribution. 
 Subsequent to June 30, 2021, the distributions declared in July 2021 in the amount of
$16.4 million or 25.0 cents per stapled unit will be paid on August 16, 2021. 

  
 70    Granite REIT 2021 Second
Quarter Report 

	
	 11.  STAPLED
UNITHOLDERS’ EQUITY

  

	(a)	 Unit-Based Compensation 

Incentive Stock Option Plan 
 The Incentive Stock Option Plan
allows for the grant of stock options or stock appreciation rights to directors, officers, employees and consultants. As at June 30, 2021 and December 31, 2020, there were no options outstanding under this plan. 

Director/Trustee Deferred Share Unit Plan 
 The Trust has two Non-Employee Director Share-Based Compensation Plans (the “DSPs”) which provide for a deferral of up to 100% of each non-employee director’s total annual
remuneration, at specified levels elected by each director. A reconciliation of the changes in the notional deferred share units (“DSUs”) outstanding is presented below: 

 

																					
	  	  	2021	 	  	  	 	  	2020	 
	  	  	Number
(000s)	 	  	Weighted Average
Grant Date
Fair Value	 	  	  	 	  	Number
(000s)	 	  	Weighted Average
Grant Date
Fair Value	 
	 DSUs outstanding, January 1
	  	 	67		  	$	52.93	 	  				  	 	50		  	$	48.01	 
	 Granted
	  	 	9		  	 	78.22		  	 	 	 	  	 	8		  	 	66.31	
	 DSUs outstanding, June 30
	  	 	76		  	$	56.01	 	  	 	 	 	  	 	58		  	$	50.70	 

 Executive Deferred Stapled Unit Plan 

The Executive Deferred Stapled Unit Plan (the “Restricted Stapled Unit Plan”) of the Trust provides for the issuance of Restricted Share Units
(“RSUs”) and Performance Share Units (“PSUs”) and is designed to provide equity-based compensation in the form of stapled units to executives and other employees (the “Participants”). A reconciliation of the changes in
notional stapled units outstanding under the Restricted Stapled Unit Plan is presented below: 
  

																					
	  	 	2021	 	  	  	 	  	2020	 
	  	 	Number
(000s)	 	 	 Weighted Average
Grant Date

Fair Value
	 	  	  	 	  	Number
(000s)	 	 	 Weighted Average

Grant Date
 Fair Value
	 
	 RSUs and PSUs outstanding, January 1
	 	 	128		 	$	59.83	 	  				  	 	145		 	$	55.93	 
	 New grants and distributions(1) 
	 	 	49		 	 	78.24		  				  	 	52		 	 	66.39	
	 Forfeited
	 	 	—	 	 	 	—	 	  				  	 	(1	) 	 	 	67.66	
	 Settled in cash
	 	 	(13	) 	 	 	60.09		  				  	 	(23	) 	 	 	55.35	
	 Settled in stapled units
	 	 	(17	) 	 	 	60.09		  	 	 	 	  	 	(22	) 	 	 	55.35	
	 RSUs and PSUs outstanding, June 30(2)
	 	 	147		 	$	65.58	 	  	 	 	 	  	 	151		 	$	59.57	 

  

	(1)	 	 Includes 18.7 RSUs and 25.0 PSUs granted during the six month period ended June 30, 2021 (2020 — 20.8 RSUs and
26.5 PSUs). 

	(2)	 	 Total restricted stapled units outstanding at June 30, 2021 include a total of 69.8 RSUs and 76.8 PSUs granted (2020
— 94.1 RSUs and 56.8 PSUs). 

  
 Granite REIT 2021 Second Quarter
Report    71 

 The fair value of the outstanding RSUs was $4.9 million at June 30, 2021 and is based on the
market price of the Trust’s stapled unit. The fair value is adjusted for changes in the market price of the Trust’s stapled unit and recorded as a liability in the employee unit-based compensation payables (note 9). 

The fair value of the outstanding PSUs was $2.9 million at June 30, 2021 and is recorded as a liability in the employee unit-based
compensation payables (note 9). The fair value is calculated using the Monte-Carlo simulation model based on the assumptions below as well as a market adjustment factor based on the total unitholder return of the Trust’s stapled units relative
to the S&P/TSX Capped REIT Index. 
  

					
	Grant Date	  	January 1, 2021, January 1, 2020, January 1, August 12 and
September 24, 2019	 
	 PSUs granted
	  	 	76,100	
	 Term to expiry
	  	 	2.5 years	 
	 Average volatility rate
	  	 	34.5%	 
	 Weighted average risk free interest rate
	  	 	0.4%	 

 The Trust’s unit-based compensation expense recognized in general and administrative expenses was: 

 

																					
	  	 	
Three Months Ended

June 30,
	 	  	  	 	  	
Six Months Ended

June 30,
	 
	  	 	2021	 	  	2020	 	  	  	 	  	2021	 	    	2020	 
	 DSUs for trustees/directors (1)
	 	$	742		  	$	1,147	 	  				  	$	1,045	 	    	$	630	 
	 Restricted Stapled Unit Plan for executives and employees
	 	 	1,727		  	 	2,079		  	 	 	 	  	 	3,227		    	 	2,374	
	 Unit-based compensation expense
	 	$	2,469		  	$	3,226	 	  	 	 	 	  	$	4,272	 	    	$	3,004	 
	 Fair value remeasurement expense included in the above:
	 				  				  				  				    			
	 ● DSUs for trustees/directors 
	 	$	420		  	$	853	 	  				  	$	310	 	    	$	116	 
	 ● Restricted
Stapled Unit Plan for executives and employees
	 	 	624		  	 	1,021		  	 	 	 	  	 	621		    	 	259	
	 Total fair value remeasurement expense
	 	$	1,044		  	$	1,874	 	  	 	 	 	  	$	931		    	$	375	 

  

	(1)	 	 In respect of fees mandated and elected to be taken as DSUs. 

 

	(b)	 Normal Course Issuer Bid 

On May 19, 2021, Granite announced the acceptance by the Toronto Stock Exchange (“TSX”) of Granite’s Notice of Intention to Make a
Normal Course Issuer Bid (“NCIB”). Pursuant to the NCIB, Granite proposes to purchase through the facilities of the TSX and any alternative trading system in Canada, from time to time and if considered advisable, up to an aggregate of
6,154,057 of Granite’s issued and outstanding stapled units. The NCIB commenced on May 21, 2021 and will conclude on the earlier of the date on which purchases under the bid have been completed and May 20, 2022. Pursuant to the
policies of the TSX, daily purchases made by Granite through the TSX may not exceed 46,074 stapled units, subject to certain exceptions. Granite had entered into an automatic securities purchase plan with a broker in order to facilitate repurchases
of the stapled units under the NCIB during specified blackout periods. Pursuant to a previous notice of intention to conduct a NCIB, Granite received approval from the TSX to purchase stapled units for the period May 21, 2020 to May 20,
2021. 

  
 72    Granite REIT 2021 Second
Quarter Report 

 During the six month period ended June 30, 2021, there were no stapled unit repurchases under the
NCIB. During the six month period ended June 30, 2020, Granite repurchased 490,952 stapled units at an average stapled unit cost of $50.95 for total consideration of $25.0 million. The difference between the repurchase price and the
average cost of the stapled units of $1.3 million was recorded to contributed surplus. 
  

	(c)    Stapled	 Unit Offerings 

On June 9, 2021, Granite completed an offering of 3,979,000 stapled units at a price of $79.50 per unit for gross proceeds of $316.3 million,
including 519,000 stapled units issued pursuant to the exercise of the over-allotment option granted to the underwriters. Total costs related to the offering totaled $13.2 million and were recorded as a reduction to stapled unitholders’
equity. The net proceeds received by Granite after deducting the total costs related to the offering were $303.1 million. 
 On June 2, 2020,
Granite completed an offering of 4,255,000 stapled units at a price of $68.00 per unit for gross proceeds of $289.3 million, including 555,000 stapled units issued pursuant to the exercise of the over-allotment option granted to the
underwriters. Total costs related to the offering totaled $12.4 million and were recorded as a reduction to stapled unitholders’ equity. The net proceeds received by Granite after deducting the total costs related to the offering were
$276.9 million. 
  

	(d)    Accumulated	 Other Comprehensive Income 

Accumulated other comprehensive income consists of the following: 
  

									
	As at June 30,	  	2021	 	 	2020	 
	 Foreign currency translation gains on investments in subsidiaries, net of related hedging activities and non-controlling interests(1)
	  	$	30,599	 	 	$	311,565	 
	 Fair value losses on derivatives designated as net investment
hedges
	  	 	(5,316	) 	 	 	(75,593	) 
	 	  	$	25,283	 	 	$	235,972	 

  

	(1) 	 	 Includes foreign currency translation gains and losses from non-derivative
financial instruments designated as net investment hedges. 

  

	
	 12.  RENTAL REVENUE,
RECOVERIES, COSTS AND EXPENSES

  

	(a)	 Rental revenue consists of: 

 

																			
	  	  	
Three Months Ended

June 30,
	 	 	  	    	 Six Months Ended

June 30,
	 
	  	  	2021	 	  	2020	 	 	  	    	2021	 	  	2020	 
	 Base rent
	  	$	79,924	 	  	$	71,293	 	 		    	$	160,217	 	  	$	139,683	 
	 Straight-line rent amortization
	  	 	1,737		  	 	1,509		 		    	 	4,847		  	 	2,925	
	 Tenant incentive amortization
	  	 	(1,285	) 	  	 	(1,311	) 	 		    	 	(2,599	) 	  	 	(2,586	) 
	 Property tax recoveries
	  	 	8,807		  	 	6,346		 		    	 	17,015		  	 	12,501	
	 Property insurance recoveries
	  	 	751		  	 	620		 		    	 	1,505		  	 	1,199	
	 Operating cost recoveries
	  	 	4,029		  	 	2,551		 	 	    	 	8,920		  	 	5,336	
	 	  	$	93,963		  	$	81,008		 	 	    	$	189,905	 	  	$	159,058	

  
 Granite REIT 2021 Second Quarter
Report    73 

																			
	 (b)  Property operating costs consist of:

 
	 	  	 
	 	 	Three Months Ended
June 30,	 	 	 	    	 Six Months Ended

June 30,
	 
	  	 	2021	 	    	2020	 	 	  	    	2021	 	    	2020	 
	 Non-recoverable from tenants:
	 				    				 		    				    			
	 Property taxes and utilities
	 	$	191		    	$	213		 		    	$	332		    	$	470	
	 Property insurance
	 	 	151		    	 	70		 		    	 	233		    	 	137	
	 Repairs and maintenance
	 	 	78		    	 	183		 		    	 	141		    	 	328	
	 Property management fees
	 	 	61		    	 	87		 		    	 	163		    	 	164	
	 Professional fees
	 	 	70		    	 	—	 	 		    	 	148		    	 	75	
	 Environmental and appraisals
	 	 	63		    	 	87		 		    	 	129		    	 	237	
	 Other
	 	 	51		    	 	(11	) 	 	 	    	 	127		    	 	22	
	 	 	$	665		    	$	629	 	 	 	    	$	1,273	 	    	$	1,433	 
	 Recoverable from tenants:
	 				    				 		    				    			
	 Property taxes and utilities
	 	$	9,647		    	$	6,992	 	 		    	$	18,835		    	$	13,869	 
	 Property insurance
	 	 	1,076		    	 	720		 		    	 	1,982		    	 	1,396	
	 Repairs and maintenance
	 	 	1,522		    	 	819		 		    	 	4,465		    	 	1,469	
	 Property management fees
	 	 	677		    	 	603		 		    	 	1,355		    	 	1,230	
	 Other
	 	 	47		    	 	80		 	 	    	 	120		    	 	614	
	 	 	$	12,969		    	$	9,214	 	 	 	    	$	26,757	 	    	$	18,578	 
	 Property operating costs
	 	$	13,634		    	$	9,843		 	 	    	$	28,030		    	$	20,011	

  

	(c)	 General and administrative expenses consist of: 

 

																			
	  	 	Three Months Ended
June 30,	 	 	  	    	
Six Months Ended

June 30,
	 
	  	 	2021	 	  	2020	 	 	  	    	2021	 	  	2020	 
	 Salaries, incentives and benefits
	 	$	3,601		  	$	3,234	 	 		    	$	8,577	 	  	$	7,044	 
	 Audit, legal and consulting
	 	 	848		  	 	938		 		    	 	1,625		  	 	1,790	
	 Trustee/director fees including distributions, revaluations and expenses(1)
	 	 	782		  	 	1,194		 		    	 	1,125		  	 	740	
	 RSU and PSU compensation expense including distributions and revaluations(1)
	 	 	1,727		  	 	2,079		 		    	 	3,227		  	 	2,374	
	 Other public entity costs
	 	 	658		  	 	562		 		    	 	1,082		  	 	936	
	 Office rents including property taxes and common area maintenance costs
	 	 	84		  	 	99		 		    	 	202		  	 	198	
	 Capital tax
	 	 	144		  	 	257		 		    	 	292		  	 	340	
	 Information technology costs
	 	 	466		  	 	257		 		    	 	902		  	 	514	
	 Other
	 	 	216		  	 	384		 	 	    	 	326		  	 	795	
		 	$	8,526		  	$	9,004	 	 		    	$	17,358		  	$	14,731	 
	 Less: capitalized general and administrative expenses
	 	 	(193	) 	  	 	(18	) 	 	 	    	 	(204	) 	  	 	(18)	 
	 	 	$	8,333		  	$	8,986		 	 	    	$	17,154		  	$	14,713	

  

	(1)	 	 For fair value remeasurement expense amounts see note 11(a). 

During the three and six month periods ended June 30, 2021, Granite incurred less than $0.1 million of general and administrative expenses
relating to COVID-19 (2020 — $0.1 million). 

  
 74    Granite REIT 2021 Second
Quarter Report 

	(d)	 Interest expense and other financing costs consist of: 

 

																			
	  	  	Three Months Ended
June 30,	 	 	  	  	
Six Months Ended

June 30,
	 
	  	  	2021	 	    	2020	 	 	  	  	2021	 	  	2020	 
	 Interest and amortized issuance costs and modification losses relating to debentures and term
loans
	  	$	8,438		    	$	7,090	 	 		  	$	17,780	 	  	$	12,879	 
	 Early redemption premium relating to 2021 Debentures (note 7(a))
	  	 	—	 	    	 	—	 	 		  	 	3,963		  	 	—	 
	 Amortization of deferred financing costs and other interest expense and charges (note 6)
	  	 	890		    	 	532		 		  	 	1,980		  	 	1,119	
	 Interest expense related to lease obligations (note 8)
	  	 	338		    	 	400		 	 	  	 	796		  	 	793	
		  	$	9,666		    	$	8,022		 		  	$	24,519		  	$	14,791	
	 Less: capitalized interest
	  	 	(63	) 	    	 	(259	) 	 	 	  	 	(122	) 	  	 	(383	) 
	 	  	$	9,603		    	$	7,763		 	 	  	$	24,397		  	$	14,408	

  

	(e)	 Fair value losses (gains) on financial instruments, net, consist of: 

 

																			
	  	 	Three Months Ended
June 30,	 	 	  	    	
Six Months Ended

June 30,
	 
	  	 	2021	 	    	2020	 	 	  	    	2021	 	    	2020	 
	 Foreign exchange forward contracts, net (note 15(a))
	 	$	—		    	$	395	 	 		    	$	—		    	$	11	 
	 Foreign exchange collar contracts, net (note 15(a))
	 	 	807		    	 	(1,377	) 	 		    	 	742		    	 	(1,377	) 
	 Cross currency interest rate swaps (note 7(b))
	 	 	(658	) 	    	 	4,873		 	 	    	 	(254	) 	    	 	7,151	
	 	 	$	149	 	    	$	3,891	 	 	 	    	$	488	 	    	$	5,785	 

 For the three month period ended June 30, 2021, the fair value gain of $0.6 million is associated with the fair
value movement of the 2024 Cross Currency Interest Rate Swap. For the six month period ended June 30, 2021, the net fair value gain of $0.2 million is associated with the fair value movements of the 2021 Cross Currency Interest Rate Swap
and 2024 Cross Currency Interest Rate Swap. The Trust did not employ or partially employed hedge accounting for the derivatives and therefore the change in fair value is recognized in fair value losses on financial instruments, net, in the condensed
combined statements of net income (note 7(b)). 
 For the three and six month periods ended June 30, 2020, the fair value losses of
$4.9 million and $7.2 million, respectively, were associated with the fair value movement of the 2024 Cross Currency Interest Rate Swap. The Trust did not employ or partially employed hedge accounting for the derivative and therefore the
change in fair value was recognized in fair value losses on financial instruments, net, in the condensed combined statements of net income. 

  
 Granite REIT 2021 Second Quarter
Report    75 

	
	 13.  INCOME
TAXES

  

	(a)	 The major components of the income tax expense are: 

 

																			
	  	 	Three Months Ended
June 30,	 	 	  	  	
Six Months Ended

June 30,
	 
	  	 	2021	 	  	2020	 	 	  	  	2021	 	  	2020	 
	 Current income tax expense
	 	$	4,301		  	$	2,099		 		  	$	6,303		  	$	3,376	
	 Deferred income tax expense
	 	 	49,840		  	 	7,450		 	 	  	 	85,718		  	 	17,761	
	 Income tax expense
	 	$	54,141		  	$	9,549	 	 	 	  	$	92,021	 	  	$	21,137	 

 (b)    The effective income tax rate reported in the condensed combined statements of net income
varies from the Canadian statutory rate for the following reasons: 
  

																			
	  	 	Three Months Ended
June 30,	 	 	  	  	 Six Months Ended

June 30,
	 
	  	 	2021	 	  	2020	 	 	  	  	2021	 	 	2020	 
	 Income before income taxes
	 	$	371,115		  	$	85,191		 	 	  	$	639,271		 	$	178,191	
	 Expected income taxes at the Canadian statutory tax rate of 26.5% (2020 — 26.5%)
	 	$	98,346	 	  	$	22,576	 	 		  	$	169,407	 	 	$	47,221	
	 Income distributed and taxable to unitholders
	 	 	(36,564	) 	  	 	(12,954	) 	 		  	 	(66,053	) 	 	 	(25,314	) 
	 Net foreign rate differentials
	 	 	(6,775	) 	  	 	(1,095	) 	 		  	 	(10,636	) 	 	 	(3,449	) 
	 Net change in provisions for uncertain tax positions
	 	 	287		  	 	423		 		  	 	450		 	 	23	
	 Net permanent differences
	 	 	(48	) 	  	 	(88	) 	 		  	 	10		 	 	(49	) 
	 Net effect of change in tax rates
	 	 	(1,044	) 	  	 	—	 	 		  	 	(1,044	) 	 	 	—	 
	 Withholding taxes and other
	 	 	(61	) 	  	 	687		 	 	  	 	(113	) 	 	 	2,705	
	 Income tax expense
	 	$	54,141	 	  	$	9,549	 	 	 	  	$	92,021	 	 	$	21,137	 

  
 76    Granite REIT 2021 Second
Quarter Report 

	
	 14.  DETAILS OF CASH
FLOWS

  

	(a)	 Items not involving operating cash flows are shown in the following table: 

 

																			
	  	 	
Three Months Ended

June 30,
	 	 	  	 	 Six Months Ended

June 30,
	 
	  	 	2021	 	 	2020	 	 	  	 	2021	 	 	2020	 
	 Straight-line rent amortization
	 	$	(1,737	) 	 	$	(1,509	) 	 		 	$	(4,847	) 	 	$	(2,925	) 
	 Tenant incentive amortization
	 	 	1,285		 	 	1,311		 		 	 	2,599		 	 	2,586	
	 Unit-based compensation expense (note 11(a))
	 	 	2,469		 	 	3,226		 		 	 	4,272		 	 	3,004	
	 Fair value gains on investment properties
	 	 	(308,025	) 	 	 	(34,548	) 	 		 	 	(517,541	) 	 	 	(70,541	) 
	 Depreciation and amortization
	 	 	360		 	 	271		 		 	 	691		 	 	508	
	 Fair value losses on financial instruments, net (note 12(e))
	 	 	149		 	 	3,891		 		 	 	488		 	 	5,785	
	 Loss on sale of investment properties
	 	 	421		 	 	—	 	 		 	 	576		 	 	—	 
	 Amortization of issuance costs and modification losses relating to debentures and term loans
	 	 	311		 	 	221		 		 	 	739		 	 	411	
	 Amortization of deferred financing costs
	 	 	143		 	 	78		 		 	 	742		 	 	156	
	 Deferred income taxes (note 13(a))
	 	 	49,840		 	 	7,450		 		 	 	85,718		 	 	17,761	
	 Early redemption premium (note 7(a))
	 	 	—	 	 	 	—	 	 		 	 	3,963		 	 	—	 
	 Other
	 	 	(2	) 	 	 	(24	) 	 	 	 	 	(85	) 	 	 	(75	) 
	 	 	$	(254,786	) 	 	$	(19,633	) 	 	 	 	$	(422,685	) 	 	$	(43,330	) 

  

	(b)	 Changes in working capital balances are shown in the following table: 

 

																			
	  	  	
Three Months Ended

June 30,
	 	 	  	  	
Six Months Ended

June 30,
	 
	  	  	2021	 	  	2020	 	 	  	  	2021	 	  	2020	 
	 Accounts receivable
	  	$	2,052	 	  	$	(1,093	) 	 		  	$	(1,024	) 	  	$	1,384	 
	 Prepaid expenses and other
	  	 	1,028		  	 	1,285		 		  	 	(302	) 	  	 	(49	) 
	 Accounts payable and accrued liabilities
	  	 	(4,177	) 	  	 	5,565		 		  	 	(4,431	) 	  	 	(1,112	) 
	 Deferred revenue
	  	 	(574	) 	  	 	1,283		 	 	  	 	692		  	 	1,405	
	 	  	$	(1,671	) 	  	$	7,040	 	 	 	  	$	(5,065	) 	  	$	1,628	 

  

	(c)	 Non-cash investing and financing activities 

During the six month period ended June 30, 2021, 17 thousand stapled units (2020 — 22 thousand stapled units) with a value of
$1.3 million (2020 — $1.3 million) were issued under the Restricted Stapled Unit Plan (note 11(a)) and are not recorded in the condensed combined statements of cash flows. 

 

	(d)	 Cash and cash equivalents consist of: 

 

									
	As at	  	June 30, 2021	 	  	December 31, 2020	 
	 Cash
	  	$	577,620	 	  	$	780,979	 
	 Short-term deposits
	  	 	100,522		  	 	50,301	
	 	  	$	678,142	 	  	$	831,280	 

  
 Granite REIT 2021 Second Quarter
Report    77 

	
	 15.  FAIR VALUE AND RISK
MANAGEMENT

  

	(a)	 Fair Value of Financial Instruments 

The following table provides the measurement basis of financial assets and liabilities as at June 30, 2021 and December 31, 2020: 

 

																	
	As at	  	June 30, 2021	 	  	December 31, 2020	 
	  	  	Carrying
Value	 	 	Fair Value	 	  	Carrying
Value	 	 	Fair Value	 
	 Financial assets
	  				 				  				 			
	 Construction funds in escrow
	  	$	8,144	 	 	$	8,144	 	  	$	8,402	 	 	$	8,402	
	 Other assets
	  	 	321	(1) 	 	 	321		  	 	349	(1) 	 	 	349	
	 Cross currency interest rate swap
	  	 	48,816	 	 	 	48,816	 	  	 	28,676	 	 	 	28,676	
	 Accounts receivable
	  	 	6,835	 	 	 	6,835		  	 	6,746	 	 	 	6,746	
	 Prepaid expenses and other
	  	 	1,885	(2) 	 	 	1,885		  	 	2,627	(2) 	 	 	2,627	
	 Cash and cash equivalents
	  	 	678,142	 	 	 	678,142		  	 	831,280	 	 	 	831,280	
	 	  	$	744,143	 	 	$	744,143	 	  	$	878,080	 	 	$	878,080	 
	 Financial liabilities
	  				 				  				 			
	 Unsecured debentures, net
	  	$	1,393,812	 	 	$	1,435,530	 	  	$	1,643,175	(3) 	 	$	1,737,185	 
	 Unsecured term loans, net
	  	 	528,586	 	 	 	528,586		  	 	534,947	 	 	 	534,947	
	 Cross currency interest rate swaps
	  	 	29,471	 	 	 	29,471		  	 	114,264	(4) 	 	 	114,264	
	 Accounts payable and accrued liabilities
	  	 	56,249	 	 	 	56,249		  	 	61,197	 	 	 	61,197	
	 Distributions payable
	  	 	16,421	 	 	 	16,421		  	 	15,422	 	 	 	15,422	
	 	  	$	2,024,539	 	 	$	2,066,257	 	  	$	2,369,005	 	 	$	2,463,015	 

  

	(1) 	 	 Long-term receivables included in other assets (note 6). 

	(2) 	 	 Foreign exchange collars included in prepaid expenses. 

	(3) 	 	 Balance includes current and non-current portions (note 7(a)).

	(4) 	 	 Balance includes current and non-current portions (note 7(b)).  

 The fair values of the Trust’s construction funds in escrow, accounts
receivable, cash and cash equivalents, accounts payable and accrued liabilities and distributions payable approximate their carrying amounts due to the relatively short periods to maturity of these financial instruments. The fair value of the
long-term receivable included in other assets approximates its carrying amount as the receivable bears interest at rates comparable to current market rates. The fair values of the unsecured debentures are determined using quoted market prices. The
fair values of the term loans approximate their carrying amounts as the term loans bear interest at rates comparable to the current market rates. The fair values of the cross currency interest rate swaps and foreign exchange collars are determined
using market inputs quoted by their counterparties. The fair value of the foreign exchange forward contracts approximate their carrying values as the asset or liability is revalued at the reporting date. 

The Trust periodically purchases foreign exchange collars and forward contracts to hedge specific anticipated foreign currency transactions and to
mitigate its foreign exchange exposure on its net cash flows. At June 30, 2021 and December 31, 2020, the Trust did not have any outstanding foreign exchange forward contracts. For the three and six month periods ended June 30, 2020,
the Trust recorded a net fair value loss of $0.4 million and less than $0.1 million, respectively, related to outstanding foreign exchange forward contracts (note 12(e)). At June 30, 2021, the Trust held six outstanding foreign
exchange collar contracts (December 31, 2020 — 12) with a 

  
 78    Granite REIT 2021 Second
Quarter Report 

 
notional value of US$30.0 million (December 31, 2020 — US$60.0 million) and contracts the Trust to sell US dollars and receive Canadian dollars if specific US dollar exchange rates
relative to the Canadian dollar are met. The Trust also held six outstanding foreign exchange collar contracts (December 31, 2020 — 12) with a notional value of €12.0 million (December
31, 2020 — €24.0 million) and contracts the Trust to sell Euros and receive Canadian dollars if specific Euro exchange rates relative to the Canadian dollar are met. For the three and six
month periods ended June 30, 2021, the Trust recorded a net fair value loss of $0.8 million (2020 — net fair value gain of $1.4 million) and $0.7 million (2020 — net fair value gain of $1.4 million), respectively, related to
the outstanding foreign exchange collar contracts (note 12(e)). The Trust did not employ hedge accounting for these financial instruments. 
  

	(b)	 Fair Value Hierarchy 

Fair value measurements are based on inputs of observable and unobservable market data that a market participant would use in pricing an asset or
liability. IFRS establishes a fair value hierarchy which is summarized below: 
  

	Level 1:	 Fair value determined using quoted prices in active markets for identical assets or liabilities.

  

	Level 2:	 Fair value determined using significant observable inputs, generally either quoted prices in active markets for
similar assets or liabilities or quoted prices in markets that are not active. 

  

	Level 3:	 Fair value determined using significant unobservable inputs, such as pricing models, discounted cash flows or similar
techniques. 

  
 Granite REIT 2021 Second Quarter
Report    79 

 The following tables represent information related to the Trust’s assets and liabilities measured
or disclosed at fair value on a recurring and non-recurring basis and the level within the fair value hierarchy in which the fair value measurements fall. 

 

													
	As at June 30, 2021	  	Level 1	 	 	Level 2	 	 	Level 3	 
	 ASSETS AND LIABILITIES MEASURED OR DISCLOSED AT FAIR VALUE
	  				 				 			
				
	 Assets measured at fair value
	  				 				 			
	 Investment properties (note 4)
	  	$	—		 	$	—		 	$	6,396,560	
	 Cross currency interest rate swap (note 7)
	  	 	—	 	 	 	48,816		 	 	—	 
	 Foreign exchange collars included in prepaid expenses and other
	  	 	—	 	 	 	1,885		 	 	—	 
				
	 Liabilities measured or disclosed at fair value
	  				 				 			
	 Unsecured debentures, net (note 7)
	  	 	1,435,530		 	 	—	 	 	 	—	 
	 Unsecured term loans, net (note 7)
	  	 	—	 	 	 	528,586		 	 	—	 
	 Cross currency interest rate swaps (note 7)
	  	 	—	 	 	 	29,471		 	 	—	 
	 Net (liabilities) assets measured or disclosed at fair
value
	  	$	(1,435,530	) 	 	$	(507,356	) 	 	$	6,396,560	 

  

													
	As at December 31, 2020	  	Level 1	 	 	Level 2	 	 	Level 3	 
	 ASSETS AND LIABILITIES MEASURED OR DISCLOSED AT FAIR VALUE
	  				 				 			
				
	 Assets measured at fair value
	  				 				 			
	 Investment properties (note 4)
	  	$	—		 	$	—		 	$	5,855,583	
	 Cross currency interest rate swap (note 7)
	  	 	—	 	 	 	28,676		 	 	—	 
	 Foreign exchange collars included in prepaid expenses and other
	  	 	—	 	 	 	2,627		 	 	—	 
				
	 Liabilities measured or disclosed at fair value
	  				 				 			
	 Unsecured debentures, net (note 7)
	  	 	1,737,185		 	 	—	 	 	 	—	 
	 Unsecured term loans, net (note 7)
	  	 	—	 	 	 	534,947		 	 	—	 
	 Cross currency interest rate swaps (note 7)
	  	 	—	 	 	 	114,264		 	 	—	 
	 Net (liabilities) assets measured or disclosed at fair
value
	  	$	(1,737,185	) 	 	$	(617,908	) 	 	$	5,855,583	 

 For assets and liabilities that are measured at fair value on a recurring basis, the Trust determines whether transfers
between the levels of the fair value hierarchy have occurred by reassessing categorization (based on the lowest level input that is significant to the fair value measurement as a whole) at the end of each reporting period. For the three and six
month periods ended June 30, 2021 and the year ended December 31, 2020, there were no transfers between the levels. 
  

	(c)	 Risk Management 

Foreign exchange risk 
 As at June 30, 2021, the Trust is
exposed to foreign exchange risk primarily in respect of movements in the Euro and the US dollar. The Trust is structured such that its foreign operations are primarily conducted by entities with a functional currency which is the same as the
economic environment in which the operations take place. As a result, the net income impact of currency risk associated with financial instruments is limited as its financial assets and liabilities are

  
 80    Granite REIT 2021 Second
Quarter Report 

 
generally denominated in the functional currency of the subsidiary that holds the financial instrument. However, the Trust is exposed to foreign currency risk on its net investment in its foreign
currency denominated operations and certain Trust level foreign currency denominated assets and liabilities. At June 30, 2021, the Trust’s foreign currency denominated net assets are $4.9 billion primarily in US dollars and Euros. A
1% change in the US dollar and Euro exchange rates relative to the Canadian dollar would result in a gain or loss of approximately $32.5 million and $16.1 million, respectively, to comprehensive income. 

 

	
	 16.  COMBINED FINANCIAL
INFORMATION

 The condensed combined financial statements include the financial position and results of operations and cash flows of
each of Granite REIT and Granite GP. Below is a summary of the financial information for each entity along with the elimination entries and other adjustments that aggregate to the condensed combined financial statements: 

 

																	
	Balance Sheet	  	As at June 30, 2021	 
	  	  	Granite REIT	 	  	Granite GP	 	  	 Eliminations/

Adjustments
	 	 	Granite REIT and
Granite GP
Combined	 
	 ASSETS
	  				  				  				 			
	 Non-current assets:
	  				  				  				 			
	 Investment properties
	  	$	6,396,560	 	  				  				 	$	6,396,560	 
	 Investment in Granite LP(1)
	  	 	—	 	  	 	30		  	 	(30	) 	 	 	—	 
	 Other non-current
assets
	  	 	66,286		  	 	 	 	  	 	 	 	 	 	66,286	
		  	 	6,462,846		  	 	30		  	 	(30	) 	 	 	6,462,846	
					
	 Current assets:
	  				  				  				 			
	 Other current assets
	  	 	20,795		  	 	25		  				 	 	20,820	
	 Intercompany receivable(2)
	  	 	—	 	  	 	14,092		  	 	(14,092	) 	 	 	—	 
	 Cash and cash equivalents
	  	 	677,888		  	 	254		  	 	 	 	 	 	678,142	
	 Total assets
	  	$	7,161,529	 	  	 	14,401		  	 	(14,122	) 	 	$	7,161,808	 
					
	 LIABILITIES AND EQUITY
	  				  				  				 			
	 Non-current liabilities:
	  				  				  				 			
	 Unsecured debt, net
	  	$	1,922,398	 	  				  				 	$	1,922,398	 
	 Other non-current
liabilities
	  	 	522,039		  	 	 	 	  	 	 	 	 	 	522,039	
		  	 	2,444,437		  				  				 	 	2,444,437	
					
	 Current liabilities:
	  				  				  				 			
	 Intercompany payable (2)
	  	 	14,092		  				  	 	(14,092	) 	 	 	—	 
	 Other current liabilities
	  	 	93,432		  	 	14,371		  	 	 	 	 	 	107,803	
	 Total liabilities
	  	 	2,551,961		  	 	14,371		  	 	(14,092	) 	 	 	2,552,240	
					
	 Equity:
	  				  				  				 			
	 Stapled unitholders’ equity
	  	 	4,607,370		  	 	30		  				 	 	4,607,400	
	 Non-controlling
interests
	  	 	2,198		  	 	 	 	  	 	(30	) 	 	 	2,168	
	 Total liabilities and equity
	  	$	7,161,529	 	  	 	14,401		  	 	(14,122	) 	 	$	7,161,808	 

  

	(1)	 	 Granite REIT Holdings Limited Partnership (“Granite LP”) is 100% owned by Granite REIT and Granite GP.

	(2) 	 	 Represents employee and trustee/director compensation related amounts which will be reimbursed by Granite LP.

  
 Granite REIT 2021 Second Quarter
Report    81 

																	
	Balance Sheet	  	As at December 31, 2020	 
	  	  	Granite REIT	 	  	Granite GP	 	  	 Eliminations/

Adjustments
	 	 	Granite REIT and
Granite GP
Combined	 
	 ASSETS
	  				  				  				 			
	 Non-current assets:
	  				  				  				 			
	 Investment properties
	  	$	5,855,583	 	  				  				 	$	5,855,583	 
	 Investment in Granite LP(1)
	  	 	—	 	  	 	25		  	 	(25	) 	 	 	—	 
	 Other non-current
assets
	  	 	46,046		  	 	 	 	  	 	 	 	 	 	46,046	
		  	 	5,901,629		  	 	25		  	 	(25	) 	 	 	5,901,629	
					
	 Current assets:
	  				  				  				 			
	 Other current assets
	  	 	14,546		  	 	17		  				 	 	14,563	
	 Intercompany receivable(2)
	  	 	—	 	  	 	13,792		  	 	(13,792	) 	 	 	—	 
	 Cash and cash equivalents
	  	 	830,455		  	 	825		  	 	 	 	 	 	831,280	
	 Total assets
	  	$	6,746,630	 	  	 	14,659		  	 	(13,817	) 	 	$	6,747,472	 
				
	 LIABILITIES AND EQUITY
	  
	  				  				 			
	 Non-current liabilities:
	  				  				  				 			
	 Unsecured debt, net
	  	$	1,928,252	 	  				  				 	$	1,928,252	 
	 Other non-current
liabilities
	  	 	523,096		  	 	 	 	  	 	 	 	 	 	523,096	
		  	 	2,451,348		  				  				 	 	2,451,348	
	 Current liabilities:
	  				  				  				 			
	 Unsecured debt, net
	  	 	249,870		  				  				 	 	249,870	
	 Intercompany payable(2)
	  	 	13,792		  				  	 	(13,792	) 	 	 	—	 
	 Other current liabilities
	  	 	109,416		  	 	14,634		  	 	 	 	 	 	124,050	
	 Total liabilities
	  	 	2,824,426		  	 	14,634		  	 	(13,792	) 	 	 	2,825,268	
					
	 Equity:
	  				  				  				 			
	 Stapled unitholders’ equity
	  	 	3,920,044		  	 	25		  				 	 	3,920,069	
	 Non-controlling
interests
	  	 	2,160		  	 	 	 	  	 	(25	) 	 	 	2,135	
	 Total liabilities and equity
	  	$	6,746,630	 	  	 	14,659		  	 	(13,817	) 	 	$	6,747,472	 

  

	(1) 	 	 Granite LP is 100% owned by Granite REIT and Granite GP. 

	(2) 	 	 Represents employee and trustee/director compensation related amounts which will be reimbursed by Granite LP.

  
 82    Granite REIT 2021 Second
Quarter Report 

																	
	Income Statement	  	Three Months Ended June 30, 2021	 
	  	  	Granite REIT	 	 	Granite GP	 	 	 Eliminations/

Adjustments
	 	 	Granite REIT and
Granite GP
Combined	 
	 Revenue
	  	$	93,963	 	 				 				 	$	93,963	
					
	 General and administrative expenses
	  	 	8,333		 				 				 	 	8,333	
	 Interest expense and other financing costs, net
	  	 	9,603		 				 				 	 	9,603	
	 Other costs and expenses, net
	  	 	12,367		 				 				 	 	12,367	
	 Share of (income) loss of Granite LP
	  	 	—	 	 	 	(3	) 	 	 	3		 	 	—	 
	 Fair value gains on investment properties, net
	  	 	(308,025	) 	 				 				 	 	(308,025	) 
	 Fair value losses on financial instruments, net
	  	 	149		 				 				 	 	149	
	 Loss on sale of investment properties
	  	 	421		 	 	 	 	 	 	 	 	 	 	421	
	 Income before income taxes
	  	 	371,115		 	 	3		 	 	(3	) 	 	 	371,115	
	 Income tax expense
	  	 	54,141		 	 	 	 	 	 	 	 	 	 	54,141	
	 Net income
	  	 	316,974		 	 	3		 	 	(3	) 	 	 	316,974	
	 Less net income attributable to
non-controlling interests
	  	 	66		 	 	 	 	 	 	(3	) 	 	 	63	
	 Net income attributable to stapled unitholders
	  	$	316,908	 	 	 	3		 	 	—	 	 	$	316,911	

  

																	
	Income Statement	  	Three Months Ended June 30, 2020	 
	  	  	Granite REIT	 	 	Granite GP	 	 	 Eliminations/

Adjustments
	 	 	Granite REIT and
Granite GP
Combined	 
	 Revenue
	  	$	81,008	 	 				 				 	$	81,008	 
					
	 General and administrative expenses
	  	 	8,986		 				 				 	 	8,986	
	 Interest expense and other financing costs, net
	  	 	7,763		 				 				 	 	7,763	
	 Other costs and expenses, net
	  	 	9,725		 				 				 	 	9,725	
	 Share of (income) loss of Granite LP
	  	 	—	 	 	 	(1	) 	 	 	1		 	 	—	 
	 Fair value gains on investment properties, net
	  	 	(34,548	) 	 				 				 	 	(34,548	) 
	 Fair value losses on financial instruments, net
	  	 	3,891		 	 	 	 	 	 	 	 	 	 	3,891	
	 Income before income taxes
	  	 	85,191		 	 	1		 	 	(1	) 	 	 	85,191	
	 Income tax expense
	  	 	9,549		 	 	 	 	 	 	 	 	 	 	9,549	
	 Net income
	  	 	75,642		 	 	1		 	 	(1	) 	 	 	75,642	
	 Less net loss attributable to
non-controlling interests
	  	 	(14	) 	 	 	 	 	 	 	(1	) 	 	 	(15	) 
	 Net income attributable to stapled unitholders
	  	$	75,656	 	 	 	1		 	 	—	 	 	$	75,657	 

  
 Granite REIT 2021 Second Quarter
Report    83 

																	
	Income Statement	  	Six Months Ended June 30, 2021	 
	  	  	Granite REIT	 	 	Granite GP	 	 	 Eliminations/

Adjustments
	 	 	Granite REIT and
Granite GP
Combined	 
	 Revenue
	  	$	189,905	 	 				 				 	$	189,905	 
					
	 General and administrative expenses
	  	 	17,154		 				 				 	 	17,154	
	 Interest expense and other financing costs
	  	 	24,397		 				 				 	 	24,397	
	 Other costs and expenses, net
	  	 	25,560		 				 				 	 	25,560	
	 Share of (income) loss of Granite LP
	  	 	—	 	 	 	(5	) 	 	 	5		 	 	—	 
	 Fair value gains on investment properties, net
	  	 	(517,541	) 	 				 				 	 	(517,541	) 
	 Fair value losses on financial instruments, net
	  	 	488		 				 				 	 	488	
	 Loss on sale of investment properties
	  	 	576		 	 	 	 	 	 	 	 	 	 	576	
	 Income before income taxes
	  	 	639,271		 	 	5		 	 	(5	) 	 	 	639,271	
	 Income tax expense
	  	 	92,021		 	 	 	 	 	 	 	 	 	 	92,021	
	 Net income
	  	 	547,250		 	 	5		 	 	(5	) 	 	 	547,250	
	 Less net income attributable to
non-controlling interests
	  	 	211		 	 	 	 	 	 	(5	) 	 	 	206	
	 Net income attributable to stapled unitholders
	  	$	547,039	 	 	 	5		 	 	—	 	 	$	547,044	 

  

																	
	Income Statement	  	Six Months Ended June 30, 2020	 
	  	  	Granite REIT	 	 	Granite GP	 	 	 Eliminations/

Adjustments
	 	 	Granite REIT and
Granite GP
Combined	 
	 Revenue
	  	$	159,058	 	 				 				 	$	159,058	 
					
	 General and administrative expenses
	  	 	14,713		 				 				 	 	14,713	
	 Interest expense and other financing costs
	  	 	14,408		 				 				 	 	14,408	
	 Other costs and expenses, net
	  	 	16,502		 				 				 	 	16,502	
	 Share of (income) loss of Granite LP
	  	 	—	 	 	 	(2	) 	 	 	2		 	 	—	 
	 Fair value gains on investment properties, net
	  	 	(70,541	) 	 				 				 	 	(70,541	) 
	 Fair value losses on financial instruments, net
	  	 	5,785		 	 	 	 	 	 	 	 	 	 	5,785	
	 Income before income taxes
	  	 	178,191		 	 	2		 	 	(2	) 	 	 	178,191	
	 Income tax expense
	  	 	21,137		 	 	 	 	 	 	 	 	 	 	21,137	
	 Net income
	  	 	157,054		 	 	2		 	 	(2	) 	 	 	157,054	
	 Less net income attributable to
non-controlling interests
	  	 	103		 	 	 	 	 	 	(2	) 	 	 	101	
	 Net income attributable to stapled unitholders
	  	$	156,951	 	 	 	2		 	 	—	 	 	$	156,953	 

  
 84    Granite REIT 2021 Second
Quarter Report 

																	
	Statement of Cash Flows	  	Three Months Ended June 30, 2021	 
	  	  	Granite REIT	 	 	Granite GP	 	 	 Eliminations/

Adjustments
	 	 	Granite REIT and
Granite GP
Combined	 
	 OPERATING ACTIVITIES
	  				 				 				 			
					
	 Net income
	  	$	316,974	 	 	 	3		 	 	(3	) 	 	$	316,974	 
	 Items not involving current cash flows
	  	 	(254,786	) 	 	 	(3	) 	 	 	3		 	 	(254,786	) 
	 Changes in working capital balances
	  	 	(795	) 	 	 	(876	) 	 				 	 	(1,671	) 
	 Other operating activities
	  	 	4,218		 	 	 	 	 	 	 	 	 	 	4,218	
	 Cash provided by (used in) operating activities
	  	 	65,611		 	 	(876	) 	 	 	—	 	 	 	64,735	
	 INVESTING ACTIVITIES
	  				 				 				 			
	 Property acquisitions
	  	 	(133,376	) 	 				 				 	 	(133,376	) 
	 Proceeds from disposals, net
	  	 	12,809		 				 				 	 	12,809	
	 Additions to income-producing properties
	  	 	(783	) 	 				 				 	 	(783	) 
	 Additions to properties under development
	  	 	(4,865	) 	 				 				 	 	(4,865	) 
	 Other investing activities
	  	 	(1,907	) 	 	 	 	 	 	 	 	 	 	 	(1,907	) 
	 Cash used in investing activities
	  	 	(128,122	) 	 	 	—	 	 	 	—	 	 	 	(128,122	) 
	 FINANCING ACTIVITIES
	  				 				 				 			
	 Distributions paid
	  	 	(46,288	) 	 				 				 	 	(46,288	) 
	 Other financing activities
	  	 	302,811		 	 	 	 	 	 	 	 	 	 	302,811	
	 Cash provided by financing activities
	  	 	256,523		 	 	—	 	 	 	—	 	 	 	256,523	
	 Effect of exchange rate changes
	  	 	4,295		 	 	 	 	 	 	 	 	 	 	4,295	
	 Net increase (decrease) in cash and cash equivalents during
the period
	  	$	198,307	 	 	 	(876	) 	 	 	—	 	 	$	197,431	 

  

																	
	Statement of Cash Flows	  	Three Months Ended June 30, 2020	 
	  	  	Granite REIT	 	 	Granite GP	 	 	 Eliminations/

Adjustments
	 	 	Granite REIT and
Granite GP
Combined	 
	 OPERATING ACTIVITIES
	  				 				 				 			
					
	 Net income
	  	$	75,642	 	 	 	1		 	 	(1	) 	 	$	75,642	 
	 Items not involving current cash flows
	  	 	(19,633	) 	 	 	(1	) 	 	 	1		 	 	(19,633	) 
	 Changes in working capital balances
	  	 	7,084		 	 	(44	) 	 	 	—	 	 	 	7,040	
	 Other operating activities
	  	 	2,120		 	 	 	 	 	 	 	 	 	 	2,120	
	 Cash provided by (used in) operating activities
	  	 	65,213		 	 	(44	) 	 	 	—	 	 	 	65,169	
	 INVESTING ACTIVITIES
	  				 				 				 			
	 Property acquisitions
	  	 	(331,805	) 	 				 				 	 	(331,805	) 
	 Additions to income-producing properties
	  	 	(1,083	) 	 				 				 	 	(1,083	) 
	 Additions to properties under development
	  	 	(26,122	) 	 				 				 	 	(26,122	) 
	 Construction funds released from escrow
	  	 	4,291		 				 				 	 	4,291	
	 Other investing activities
	  	 	(72,606	) 	 	 	 	 	 	 	 	 	 	 	(72,606	) 
	 Cash used in investing activities
	  	 	(427,325	) 	 	 	—	 	 	 	—	 	 	 	(427,325	) 
	 FINANCING ACTIVITIES
	  				 				 				 			
	 Distributions paid
	  	 	(38,890	) 	 				 				 	 	(38,890	) 
	 Other financing activities
	  	 	774,909		 	 	 	 	 	 	 	 	 	 	774,909	
	 Cash provided by financing activities
	  	 	736,019		 	 	—	 	 	 	—	 	 	 	736,019	
	 Effect of exchange rate changes
	  	 	1,313		 	 	 	 	 	 	 	 	 	 	1,313	
	 Net increase (decrease) in cash and cash equivalents during
the period
	  	$	375,220	 	 	 	(44	) 	 	 	—	 	 	$	375,176	 

  
 Granite REIT 2021 Second Quarter
Report    85 

																	
	Statement of Cash Flows	  	Six Months Ended June 30, 2021	 
	  	  	Granite REIT	 	 	Granite GP	 	 	 Eliminations/

Adjustments
	 	 	Granite REIT and
Granite GP
Combined	 
	 OPERATING ACTIVITIES
	  				 				 				 			
					
	 Net income
	  	$	547,250	 	 	 	5		 	 	(5	) 	 	$	547,250	 
	 Items not involving operating cash flows
	  	 	(422,685	) 	 	 	(5	) 	 	 	5		 	 	(422,685	) 
	 Changes in working capital balances
	  	 	(4,494	) 	 	 	(571	) 	 				 	 	(5,065	) 
	 Other operating activities
	  	 	9,540		 	 	 	 	 	 	 	 	 	 	9,540	
	 Cash provided by (used in) operating activities
	  	 	129,611		 	 	(571	) 	 	 	—	 	 	 	129,040	
	 INVESTING ACTIVITIES
	  				 				 				 			
	 Property acquisitions
	  	 	(219,289	) 	 				 				 	 	(219,289	) 
	 Proceeds from disposals, net
	  	 	23,204		 				 				 	 	23,204	
	 Additions to income-producing properties
	  	 	(783	) 	 				 				 	 	(783	) 
	 Additions to properties under development
	  	 	(17,286	) 	 				 				 	 	(17,286	) 
	 Construction funds released from escrow
	  	 	28		 				 				 	 	28	
	 Other investing activities
	  	 	(2,578	) 	 	 	 	 	 	 	 	 	 	 	(2,578	) 
	 Cash used in investing activities
	  	 	(216,704	) 	 	 	—	 	 	 	—	 	 	 	(216,704	) 
	 FINANCING ACTIVITIES
	  				 				 				 			
	 Distributions paid
	  	 	(92,551	) 	 				 				 	 	(92,551	) 
	 Other financing activities
	  	 	26,965		 	 	 	 	 	 	 	 	 	 	26,965	
	 Cash used in financing activities
	  	 	(65,586	) 	 	 	—	 	 	 	—	 	 	 	(65,586	) 
	 Effect of exchange rate changes
	  	 	112		 	 	 	 	 	 	 	 	 	 	112	
	 Net decrease in cash and cash equivalents during the
period
	  	$	(152,567	) 	 	 	(571	) 	 	 	—	 	 	$	(153,138	) 

  

																	
	Statement of Cash Flows	  	Six Months Ended June 30, 2020	 
	  	  	Granite REIT	 	 	Granite GP	 	 	 Eliminations/

Adjustments
	 	 	Granite REIT and
Granite GP
Combined	 
	 OPERATING ACTIVITIES
	  				 				 				 			
					
	 Net income
	  	$	157,054	 	 	 	2		 	 	(2	) 	 	$	157,054	 
	 Items not involving operating cash flows
	  	 	(43,330	) 	 	 	(2	) 	 	 	2		 	 	(43,330	) 
	 Changes in working capital balances
	  	 	1,814		 	 	(186	) 	 				 	 	1,628	
	 Other operating activities
	  	 	4,679		 	 	 	 	 	 	 	 	 	 	4,679	
	 Cash provided by (used in) operating activities
	  	 	120,217		 	 	(186	) 	 	 	—	 	 	 	120,031	
	 INVESTING ACTIVITIES
	  				 				 				 			
	 Property acquisitions
	  	 	(360,754	) 	 				 				 	 	(360,754	) 
	 Additions to income-producing properties
	  	 	(3,318	) 	 				 				 	 	(3,318	) 
	 Additions to properties under development
	  	 	(32,194	) 	 				 				 	 	(32,194	) 
	 Construction funds released from escrow
	  	 	6,591		 				 				 	 	6,591	
	 Other investing activities
	  	 	(90,854	) 	 	 	 	 	 	 	 	 	 	 	(90,854	) 
	 Cash used in investing activities
	  	 	(480,529	) 	 	 	—	 	 	 	—	 	 	 	(480,529	) 
	 FINANCING ACTIVITIES
	  				 				 				 			
	 Distributions paid
	  	 	(78,140	) 	 				 				 	 	(78,140	) 
	 Other financing activities
	  	 	749,784		 	 	 	 	 	 	 	 	 	 	749,784	
	 Cash provided by financing activities
	  	 	671,644		 	 	—	 	 	 	—	 	 	 	671,644	
	 Effect of exchange rate changes
	  	 	7,425		 	 	 	 	 	 	 	 	 	 	7,425	
	 Net increase (decrease) in cash and cash equivalents during
the period
	  	$	318,757	 	 	 	(186	) 	 	 	—	 	 	$	318,571	 

  
 86    Granite REIT 2021 Second
Quarter Report 

	
	 17.  COMMITMENTS AND
CONTINGENCIES

 (a)    The Trust is subject to various legal proceedings and claims that arise in the ordinary course
of business. Management evaluates all claims with the advice of legal counsel. Management believes these claims are generally covered by Granite’s insurance policies and that any liability from remaining claims is not probable to occur and
would not have a material adverse effect on the condensed combined financial statements. However, actual outcomes may differ from management’s expectations. 

(b)    As at June 30, 2021, the Trust’s contractual commitments totaled $182.1 million which comprised of construction
and development projects of $117.4 million, the construction costs associated with a property under development in Murfreesboro, Tennessee of $64.7 million (US$52.2 million) (note 3). 

(c)    In connection with the acquisitions of investment properties located in Palmetto, Georgia on November 12, 2020 and in
Locust Grove, Georgia on March 12, 2021, $120.4 million (US$97.1 million) of bonds were assumed. The authorized amount of the bonds is $129.0 million (US$104.0 million), of which $120.4 million (US$97.1 million) was outstanding
as at June 30, 2021. The bonds provide for a real estate tax abatement for the acquired investment properties. Through a series of transactions, the Trust is both the bondholder and the obligor of the bonds. Therefore, in accordance with IAS
32, the bonds are not recorded in the condensed combined balance sheet. 
 The Trust is involved, in the normal course of business, in discussions, and
has various letters of intent or conditional agreements, with respect to possible acquisitions of new properties and dispositions of existing properties in its portfolio. None of these commitments or contingencies, individually or in aggregate,
would have a material impact on the condensed combined financial statements. 
  

	
	 18.  SUBSEQUENT
EVENTS

 (a)    Subsequent to June 30, 2021, the Trust declared monthly distributions for July 2021 of
$16.4 million (note 10). 

  
 Granite REIT 2021 Second Quarter
Report    87

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