Document:

EX-4.4

Table of Contents

 Exhibit 4.4 
  

 
 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 4, 2020 

and 
 MANAGEMENT INFORMATION CIRCULAR /
PROXY STATEMENT 
 April 24, 2020 

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
	 	 	20	 
		
	 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
	 	 	21	 
		
	 TRUSTEE / DIRECTOR COMPENSATION
	 	 	22	 
		
	 Director Compensation Table
	 	 	23	 
		
	 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
	 	 	30	 
		
	 Executive Compensation Objectives and Philosophy
	 	 	31	 
		
	 Compensation, Governance and Nominating Committee
	 	 	32	 
		
	 Management of Risks Associated with Compensation Policies and Practices
	 	 	33	 
		
	 President and CEO Stapled Unit Ownership Guidelines
	 	 	35	 
		
	 Executive Compensation Review Process
	 	 	36	 
		
	 Elements of Executive Compensation
	 	 	38	 
		
	 Employment Agreements
	 	 	46	 
		
	 Performance Graph
	 	 	48	 

  
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	 Summary Compensation Table
	 	 	49	 
		
	 Incentive Plan Awards
	 	 	51	 
		
	 Change of Control and Termination Provisions
	 	 	52	 
		
	 Equity Compensation Plan Information
	 	 	56	 
		
	 STATEMENT OF CORPORATE GOVERNANCE PRACTICES
	 	 	59	 
		
	 Applicable Governance Requirements and Guidelines
	 	 	59	 
		
	 Board of Trustees of Granite REIT and Board of Directors of Granite GP
	 	 	59	 
		
	 Board Mandates
	 	 	60	 
		
	 Board Committees
	 	 	61	 
		
	 Position Descriptions
	 	 	67	 
		
	 Orientation and Continuing Education
	 	 	70	 
		
	 Ethical Business Conduct
	 	 	72	 
		
	 Risk Management Oversight
	 	 	73	 
		
	 Succession Planning
	 	 	73	 
		
	 Sustainability Planning
	 	 	73	 
		
	 INTERESTS OF INFORMED PERSONS IN MATERIAL TRANSACTIONS
	 	 	74	 
		
	 MANAGEMENT CONTRACTS
	 	 	74	 
		
	 OTHER MATTERS
	 	 	74	 
		
	 ADDITIONAL INFORMATION REGARDING GRANITE
	 	 	75	 
		
	 Contacting the Boards
	 	 	75	 
		
	 APPENDIX “A”
	 	 	A-1	 
		
	 APPENDIX “B”
	 	 	B-1	 

  

  
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 April 24, 2020 
 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 4, 2020. 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. 
 This year, due to unprecedented public health restrictions related to coronavirus disease (“COVID-19”) including the emergency order issued by the Government of Ontario prohibiting organized public events and social gatherings of more than five people, registered shareholders and unitholders
and duly appointed proxyholders are being asked to attend the meetings by live audio webcast at https://web.lumiagm.com/240668827, which will enable registered shareholders and unitholders and duly appointed proxyholders to listen to
the Meetings, submit questions, and vote online. Non-registered shareholders and unitholders holding Stapled Units beneficially through an intermediary may listen to the live audio webcast of the Meetings
at https://web.lumiagm.com/240668827, 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. 
 2019 was another active and successful year for Granite, represented by strong
operating results, a significant increase in net asset value and further improvements to the quality and diversification of the portfolio. In addition, Granite made important enhancements to its platform, adding Teresa Neto as CFO and appointing
Witsard Schaper and Jon Sorg as the new Head of Europe and the U.S., respectively, improving our capacity to grow and drive asset performance in our target markets. 

In accordance with our strategic objectives for 2019, Granite acquired over $900 million in modern
e-commerce and distribution assets and disposed of over $100 million of non-core assets, while generating year-over-year growth in funds from operations (FFO) per
Stapled Unit(1) of 3.8% and maintaining a conservative balance sheet with approximately $800 million of liquidity as at December 31, 2019. 

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 also announced an increase in its annual distribution by 3.6% to $2.90 per Stapled Unit for 2020, its eighth consecutive annual increase. 

Corporate governance and sustainability were in focus in 2019. Granite introduced multiple new policies and practices to enhance governance, and the
election of Fern Grodner and Sheila Murray as Trustees further improved board diversity. Granite also announced its Sustainability Plan in 2019, outlining our principles and actions to incorporate sustainability in our decision-making processes
across our organization and portfolio. 

  
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 In closing, the COVID-19 and various government interventions
and policies, including widespread self-isolation orders, have had a major impact on virtually all businesses globally, including real estate. Although we are well positioned by virtue of our strong liquidity to weather this downturn, which is
expected to be temporary but severe, Granite will not be immune to its effect. Consequently, we are implementing appropriate measures to ensure that we are conducting business in a safe and effective manner. As of the date of this letter, all of our
employees are working remotely from their homes, and we are working diligently with our service providers to continue to fulfill our obligations through these difficult circumstances. 

We hope you can attend the Meetings virtually, but in any case, your vote is important, and your Stapled Units should be represented at the Meetings. 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 4, 2020. 
  

			
	 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 4, 2020 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, 2019 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 24, 2020 (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. This year, due to unprecedented public health restrictions related to coronavirus disease
(“COVID-19”), including the emergency order issued by the Government of Ontario prohibiting organized public events and social gatherings of more than five people, registered shareholders and
unitholders and duly appointed proxyholders are being asked to attend the Meetings by live audio webcast at https://web.lumiagm.com/240668827, 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/240668827, but will not have the ability to vote virtually or ask questions. The accompanying form(s) 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/240668827. 
  

	 	●	 	 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 “granite2020”. 

  
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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 “granite2020”. 

 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.

 The location of the Meetings for the purposes of provisions of the Business Corporations Act (British Columbia) applicable
to Granite GP is Granite’s head office located at 77 King Street West, Suite 4010, Toronto, Ontario; however, in light of COVID-19, securityholders will not be permitted to attend the Meetings at such location, and will be permitted to attend
only by live audio webcast as described above. 
 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, 2019, 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 receive Meeting Materials in connection with the Meetings under the Notice-and-Access Procedures, and will not receive paper copies of the Meeting Materials and accompanying form(s) of proxy or voting instruction form. Shareholders and
unitholders may obtain paper copies of the Meeting Materials free of charge, or more information about the Notice-and-Access Procedures by contacting Granite’s
registrar and transfer agent, Computershare Investor Services Inc., at 1-866-962-0498 (toll free in North America) or 514-982-8716 (outside North America). 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 21, 2020. 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 2, 2020, or not less than 

  
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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 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 2, 2020, 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. Granite is actively monitoring the public health concerns relating to COVID-19 and the advisories and mandates issued by
federal, state, provincial and local governments, and related agencies. In the event that it is not possible or advisable to hold the Meetings as currently planned, Granite will announce the decision via a press release, and by posting
details on our website that will also be filed on SEDAR as proxy materials. 
  

			
	 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 24, 2020 
 Toronto, Ontario 

  
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 MANAGEMENT INFORMATION CIRCULAR / PROXY STATEMENT

  
 The Meeting
Materials 
 This joint Management Information Circular / Proxy Statement dated April 24, 2020 (the
“Circular”), the accompanying Joint Notice of Annual General Meetings (the “Notice”), the accompanying form(s) 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 4, 2020, 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 24, 2020. 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, 2019,
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 receive Meeting Materials in connection with the Meetings under the Notice-and-Access Procedures, and will not receive paper copies of the Meeting Materials other than the Notice and accompanying form(s) of proxy. Unitholders may obtain paper
copies of the Meeting Materials free of charge, or more information about the Notice-and-Access 

  
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Procedures by contacting Granite’s registrar and transfer agent, Computershare Investor Services Inc., at 1-866-962-0498 (toll free in North America) or 514-982-8716 (outside North America). 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 21, 2020. 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 
 This year, due to unprecedented public health restrictions related to coronavirus
disease (“COVID-19”) including the emergency order issued by the Government of Ontario prohibiting organized public events and social gatherings of more than five people, Unitholders are being asked
to attend the Meetings by live audio webcast at https://web.lumiagm.com/240668827, which will enable 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/240668827, 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”. The location of the Meetings for
the purposes of provisions of the Business Corporations Act (British Columbia) applicable to Granite GP is Granite’s head office located at 77 King Street West, Suite 4010, Toronto, Ontario; however, in light of COVID-19, Unitholders will not be permitted to attend the Meetings at such location, and will be permitted to attend only by live audio webcast as described below. 

Granite is not aware of any items of business to be brought before the Meetings other than those described in the Circular. Granite
is actively monitoring the public health concerns relating to COVID-19 and the advisories and mandates issued by federal, state, provincial and local governments, and related agencies. ln the event that it is
not possible or advisable to hold the Meetings as currently planned, Granite will announce the decision to do so via a press release, and by posting details on our website that will also be filed on SEDAR as proxy materials. 

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/240668827. 
  

	 	●	 	 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. 

  
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	 	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 “granite2020”. 

  

	 	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 “granite2020”. 

 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/240668827 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 “granite2020”. 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 2, 2020. You will
receive a confirmation of your registration by e-mail after we receive your registration materials. Once this 

  
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process is complete, you may attend the Meetings and vote your shares at https://web.lumiagm.com/240668827 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 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/240668827 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 2, 2020, 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(s) 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”). 

  
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 Unitholders desiring to be represented at the Meetings by proxy must return their
forms 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 2, 2020 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 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 holders 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 

  
 - 5 - 

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	 	(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. 

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; 

  
 - 6 - 

Table of Contents

	 	(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; 

  

	 	(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 24, 2020 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, 2020, there were issued and outstanding 53,583,190 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, 2020, 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. 

  
 - 7 - 

Table of Contents

 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”). 

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 table sets 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, 2020. 

  
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Table of Contents

													
	  
 Peter
Aghar
  
 

  
 Residence: Ontario, Canada

 
 Age: 52
  

Status: Independent
  

Joined Board: June 15, 2017
  

Areas of Expertise:
 Real estate, REIT,

finance/investment analysis,
 accounting, strategy and

business leadership
  

2019 Annual Meeting:
 Votes
for:               99.83%
 Votes withheld:      0.17%

 
	 	  

Mr. Aghar is the founder and President of Crux Capital Corporation (“Crux”), a value-add real
estate investor, developer and venture capital investor active across Canada. Since 2013, Crux and its partners have purchased over three million square feet of commercial property and are participating in over one million square feet of
development. Mr. Aghar has a successful 20-year track record as an opportunistic value investor on an institutional scale, having been responsible for more than 100 real estate transactions totaling over
$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. He is a CPA, CMA and is a graduate of the University of Waterloo with an Honors degree in Mathematics.

 

	 	 Other Current Public Directorships
	 	
Since:

	 	 Pro Real Estate Investment Trust (TSX Venture
Exchange:PRV)
	 	
June 9, 2015

	 	
Granite Securities Owned, Controlled or Directed, as at March 31, 2020

	 	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)
	 	 8,292
	 	 41,604
	 	 49,896
	 	 2,900,454
	 	 23x
	 	
Yes

	 	Current Board / Committee Membership	 	 2019

Meeting
Attendance
	 	Attendance
Total
	 	 Board
	 	 7/7
	 	 
	 	 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, 2020, being $58.13. 

  

	(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: 54
  

Status: Independent
  

Joined Board: June 15, 2017
  

Areas of Expertise:
 Real estate, REIT,

finance/investment analysis, strategy and business leadership
  

2019 Annual Meeting:
 Votes
for:               99.85%
 Votes
withheld:      0.15%
  
	 	  

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, 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 $37 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 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, 2020

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

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

Base Retainer
	 	Ownership
Requirement
Met(3)
	 	 7,474
	 	 23,000
	 	 30,474
	 	 1,771,454
	 	 14x
	 	
Yes

	 	Current Board / Committee Membership	 	 2019

Meeting
Attendance(4)
	 	Attendance
Total
	 	 Board
	 	 7/7
	 	 
	 	 Investment Committee of Granite GP
	 	 2/2
	 	 
	 	 Audit Committee of Granite REIT and Granite GP
	 	 2/2
	 	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, 2020, being $58.13. 

  

	(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 June 13, 2019, Mr. Daal ceased to be a member of the Investment Committee of Granite GP and was
appointed to the Audit Committees of Granite REIT and Granite GP. 

  
 - 10 - 

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Kevan Gorrie
  
 

  
 Residence: Ontario, Canada

 
 Age: 51
  

Status: Not Independent
  

Joined Board: August 1, 2018
  

Areas of Expertise:
 Real estate, REIT,

finance/investment analysis, strategy and business leadership
  

2019 Annual Meeting: 
 Votes
for:               99.96%
 Votes withheld:      0.04%

 
	 	  

Mr. Gorrie joined Granite as its President and Chief Executive Officer on August 1, 2018 and was appointed 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 Ivanhoé 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 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, 2020

	 	 Restricted
Stapled
Units(1)
 (#)
	 	 Performance
Stapled

Units (1)

(#)
	 	Stapled
Units
(#)	 	Total
Restricted
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)

	 	 44,477
	 	 25,921
	 	 44,553
	 	 114,951
	 	 2,585,448
	 	 1,506,788
	 	 2,589,866
	 	 6,682,104
	 	 8x
	 	
Yes

	 	Current Board / Committee Membership	 	 2019

Meeting
 Attendance
	 	
Attendance
 Total

	 	 Board
	 	 7/7
	 	
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, 2020, being $58.13. 

  

	(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”. 

  
 - 11 - 

Table of Contents

													
	  
 Fern
Grodner
  
 

  
 Residence: Washington State, U.S.A.

 
 Age: 66
  

Status: Independent
  

Joined Board: June 13, 2019
  

Areas of Expertise:
 Real estate, accounting, 
strategy and business

leadership
 2019 Annual Meeting: 
Votes for:               99.96%

Votes withheld:      0.04%
  
	 	  

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, Inc. 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, 2020

	 	 Deferred Share
Units(1)
 (#)
	 	 Stapled Units

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

Met(3)

	 	 1,454
	 	 —
	 	 1,454
	 	 84,521
	 	 0.6x
	 	 Not
yet required

	 	Current Board / Committee Membership	 	 2019

Meeting
Attendance(4)
	 	Attendance
Total
	 	 Board
	 	 4/4
	 	 
	 	 Investment Committee of Granite GP
	 	 2/2
	 	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, 2020, being $58.13. 

  

	(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. 

  

	(4)	 Effective June 13, 2019, Ms. Grodner was elected as a member to the Boards and appointed to the Investment
Committee of Granite GP. 

  
 - 12 - 

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 Kelly
Marshall
  
 

  
 Residence: Ontario, Canada

 
 Age: 54
  

Status: Independent
  

Joined Board: June 15, 2017
  

Areas of Expertise:
 Real estate, REIT,

finance/investment analysis, strategy and business leadership
  

2019 Annual Meeting:
 Votes
for:               99.84%
 Votes withheld:      0.16%

 
	 	  

Since November 1, 2017, Mr. Marshall has been Executive Vice President of Strategic Partnerships at Ontario Municipal Employee Retirement System
(‘‘OMERS’’) where he leads 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, 2020

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

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

	 	 10,566
	 	 —
	 	 10,566
	 	 614,202
	 	 4x
	 	
Yes

	 	Current Board / Committee Membership	 	 2019

Meeting
Attendance
	 	Attendance
Total
	 	 Board (Chair)
	 	 7/7
	 	 
	 	 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, 2020, being $58.13. 

  

	(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

													
	  
 Al
Mawani
  
 

  
 Residence: Ontario, Canada

 
 Age: 68
  

Status: Independent
  

Joined Board: June 15, 2017
  

Areas of Expertise:
 Real estate, REIT,

finance/investment analysis, 
accounting, legal, strategy, 
business leadership and human resources

 
 2019 Annual Meeting:

Votes for:               95.65%

Votes withheld:      4.35%
  
	 	  

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/ Smart 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 and Human Resources Committees
	 	 December 1,

2017

	 	 First Capital Real Estate Investment Trust (TSX:FCR.UN) (Until
January 2020, First Capital Realty Inc. – TSX: FCR) – Director and Chair of Audit Committee
	 	
May 29, 2018

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

	 	
Granite Securities Owned, Controlled or Directed, as at March 31, 2020

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

	 	 9,207
	 	 8,000
	 	 17,207
	 	 1,000,243
	 	 8x
	 	
Yes

	 	Current Board / Committee Membership	 	 2019

Meeting
Attendance
	 	Attendance
Total
	 	 Board
	 	 7/7
	 	 
	 	 Audit Committee of Granite REIT and Granite GP
	 	 4/4
	 	 
	 	 CGN Committee of Granite GP (Chair)
	 	 9/9
	 	
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, 2020, being $58.13. 

  

	(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. 

  
 - 14 - 

Table of Contents

													
	  
 Gerald
Miller
  
 

  
 Residence: British Columbia, Canada

 
 Age: 64
  

Status: Independent
  

Joined Board: June 30, 2011(1)

 
 Areas of Expertise:

Real estate, REIT,
 finance/investment analysis,

accounting, strategy, business leadership and human resources
  

2019 Annual Meeting:
 Votes
for:               99.85%
 Votes withheld:      0.15%

 
	 	  

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 30 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:WFT)
	 	 April 19,
2012

	 	
Granite Securities Owned, Controlled or Directed, as at March 31, 2020

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

Base Retainer
	 	
Ownership
Requirement
 Met(4)

	 	 20,726
	 	 4,500
	 	 25,226
	 	 1,466,387
	 	 12x
	 	
Yes

	 	Current Board / Committee Membership	 	 2019

Meeting
Attendance
	 	Attendance
Total
	 	 Board
	 	 7/7
	 	 
	 	 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, 2020, being $58.13. 

  

	(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: 64
  

Status: Independent
  

Joined Board: June 13, 2019
  

Areas of Expertise:
 Finance / investment analysis; legal; strategy; business
leadership; and human resources
  
 2019 Annual Meeting:

Votes for:               99.96%

Votes withheld:      0.04%
  
	 	  

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 practised 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, currently teaches Securities Regulation at Queen’s
University 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 has been a director of the SickKids 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)

	 	
Granite Securities Owned, Controlled or Directed, as at March 31, 2020

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

Base Retainer
	 	
Ownership
Requirement
 Met(4)

	 	 2,716
	 	 —
	 	 2,716
	 	 157,881
	 	 1.3x
	 	 Not
yet required

	 	Current Board / Committee Membership	 	 2019

Meeting
Attendance(5)
	 	Attendance
Total
	 	 Board
	 	 3/4
	 	 
	 	 CGN Committee of Granite GP
	 	 5/5
	 	89%

  
 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, 2020, being $58.13. 

  

	(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. 

  

	(5)	 Effective June 13, 2019, Ms. Murray was elected as a member of the Boards and appointed to the CGN Committee
of Granite GP. 

  
 - 16 - 

Table of Contents

													
	  
 Jennifer
Warren
  
 

  
 Residence: New York, U.S.A.

 
 Age: 55
  

Status: Independent
  

Joined Board: June 14, 2018
  

Areas of Expertise:
 Real estate, REIT, legal,

strategy, business leadership
 and human resources

 
 2019 Annual Meeting:

Votes for:               99.96%

Votes withheld:      0.04%
  
	 	  

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 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. Ms. Warren is a member of the National Association of Corporate Directors. 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, 2020

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

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

Base Retainer
	 	
Ownership
Requirement
 Met(3)

	 	 4,732
	 	 —
	 	 4,732
	 	 275,071
	 	 2.2x
	 	 Not
yet required

	 	Current Board / Committee Membership	 	 2019

Meeting
Attendance
	 	Attendance
Total
	 	 Board
	 	 7/7
	 	 
	 	 CGN Committee of Granite GP
	 	 9/9
	 	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, 2020, being $58.13. 

  

	(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. Warren was elected as trustee of Granite REIT and
director of Granite GP on June 14, 2018; accordingly she will have until June 14, 2021 to meet the unit-based ownership guideline. 

  
 - 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:

  

																	
	  	 	
Real        

Estate        
	 	REIT        	 	Finance/        
Investment       
 
Analysis        	 	Accounting        	 	Legal        	 	Strategy        	 	Business        
Leadership       
 	 	Human        
Resources    
    
	 	 	 	 	 	 	 	 	 
	
Peter Aghar
	 	✓	 	✓	 	✓	 	✓	 	 	 	✓	 	✓	 	 
	 	 	 	 	 	 	 	 	 
	
Remco Daal
	 	✓	 	✓	 	✓	 	 	 	 	 	✓	 	✓	 	 
	 	 	 	 	 	 	 	 	 
	
Kevan Gorrie
	 	✓	 	✓	 	✓	 	 	 	 	 	✓	 	✓	 	 
	 	 	 	 	 	 	 	 	 
	
Fern Grodner
	 	✓	 	✓	 	 	 	✓	 	 	 	✓	 	✓	 	 
	 	 	 	 	 	 	 	 	 
	
Kelly Marshall
	 	✓	 	✓	 	✓	 	 	 	 	 	✓	 	✓	 	 
	 	 	 	 	 	 	 	 	 
	
Al Mawani
	 	✓	 	✓	 	✓	 	✓	 	✓	 	✓	 	✓	 	✓
	 	 	 	 	 	 	 	 	 
	
Gerald Miller
	 	✓	 	✓	 	✓	 	✓	 	 	 	✓	 	✓	 	✓
	 	 	 	 	 	 	 	 	 
	
Sheila A. Murray
	 	 	 	✓	 	✓	 	 	 	✓	 	✓	 	✓	 	✓
	 	 	 	 	 	 	 	 	 
	
Jennifer Warren
	 	✓	 	✓	 	 	 	 	 	✓	 	✓	 	✓	 	✓

 Cease Trade Order and Bankruptcies 

To the knowledge of Granite, as at March 31, 2020, 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; 

  
 - 18 - 

Table of Contents

	 	(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. 

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, 2020. 
 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. 

  
 - 19 - 

Table of Contents

 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 4, 2020. 

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. 
 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. 

  
 - 20 - 

Table of Contents

 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
2020 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, 2019 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 Granite’s 2019 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. 

  
 - 21 - 

Table of Contents

 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 Granite’s 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. Warren was elected to the Boards on June 14, 2018 and is not required to meet the unit-based ownership requirement until
June 14, 2021. 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. 
 The following chart sets out the standard compensation arrangements for Directors for the year ending
December 31, 2019: 
  

			
	  Position	 	  Annual Retainer and Fees
  ($)
 

	 	 
	
Chairman
	 	 100,000(1)

	 	 
	
Director-at-large
	 	 60,000(1)

	 	 
	
Audit Committee Chair
	 	
40,000

	 	 
	
CGN Committee Chair
	 	
20,000

	 	 
	
Investment Committee Chair
	 	
20,000

	 	 
	
Audit Committee member-at-large and Investment Committee member-at-large
	 	
20,000

	 	 
	
CGN Committee member-at-large
	 	
10,000

	 	 
	
Per meeting fee (in person or teleconference)
	 	
2,000

	 	 
	
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. Commencing January 1, 2019, 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.

  
 - 22 - 

Table of Contents

 Effective January 1, 2020 the Boards adopted a flat fee structure for trustee
compensation to more appropriately compensate trustees for their time and commitment to providing advice and oversight both at regularly scheduled meetings and throughout the year. The following chart sets out the revised compensation arrangements
for Directors commencing January 1, 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.

 Director Compensation Table 

The following tables provide information regarding compensation earned by individuals who were Directors during the financial year ended
December 31, 2019, 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
($)(3)	 	All Other
Compensation
($)	 	Total
($)
	 	 	 	 	 	 	 	 
	
Peter Aghar
	 	 75,000
	 	 30,000
	 	 -----
	 	 -----
	 	 -----
	 	 -----
	 	 105,000

	 	 	 	 	 	 	 	 
	
Donald Clow(4)
	 	 39,000
	 	 15,000
	 	 -----
	 	 -----
	 	 -----
	 	 -----
	 	 54,000

	 	 	 	 	 	 	 	 
	
Remco Daal
	 	 82,000
	 	 30,000
	 	 -----
	 	 -----
	 	 -----
	 	 -----
	 	 112,000

	 	 	 	 	 	 	 	 
	
Fern Grodner(5)
	 	 41,000
	 	 15,000
	 	 -----
	 	 -----
	 	 -----
	 	 -----
	 	 56,000

	 	 	 	 	 	 	 	 
	
Samir Manji(4)
	 	 38,000
	 	 15,000
	 	 -----
	 	 -----
	 	 -----
	 	 -----
	 	 53,000

	 	 	 	 	 	 	 	 
	
Kelly Marshall
	 	 85,000
	 	 50,000
	 	 -----
	 	 -----
	 	 -----
	 	 -----
	 	 135,000

	 	 	 	 	 	 	 	 
	
Al Mawani
	 	 111,000
	 	 30,000
	 	 -----
	 	 -----
	 	 -----
	 	 -----
	 	 141,000

	 	 	 	 	 	 	 	 
	
Gerry Miller
	 	 107,000
	 	 30,000
	 	 -----
	 	 -----
	 	 -----
	 	 -----
	 	 137,000

	 	 	 	 	 	 	 	 
	
Sheila Murray(5)
	 	 34,000
	 	 15,000
	 	 -----
	 	 -----
	 	 -----
	 	 -----
	 	 49,000

	 	 	 	 	 	 	 	 
	
Jennifer Warren
	 	 73,000
	 	 30,000
	 	 -----
	 	 -----
	 	 -----
	 	 -----
	 	 103,000

  
 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, $72,000; Mr. Clow, $33,000; Mr. Daal, $67,000; Ms. Grodner, $32,000; Mr. Manji, $32,000; Mr. Marshall,
$82,000; Mr. Mawani, $108,000; 

  
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Mr. Miller, $nil; Ms. Murray, $34,000; and Ms. Warren, $70,000. 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. For Directors who have elected to receive additional deferred
share units in lieu of cash in respect of meeting fees, such awards are made in advance in respect of scheduled meetings, but will expire unvested in respect of fees for any meeting the Director failed to attend. 

 

	(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)	 Mr. Clow and Mr. Manji did not stand for re-election as trustees of
Granite REIT or as directors of Granite GP at Granite’s annual general meeting of unitholders on June 13, 2019. 

  

	(5)	 Ms. Grodner and Ms. Murray were Directors for only a portion of 2019, having joined the Boards on
June 13, 2019. 

  
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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, 2019 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, 2019 for
Directors. 
  

					
	 	 	 
	 Name

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

 

	 	 	 
	
Peter Aghar
	    	 5,954
	    	 396,953

	 	 	 
	
Donald Clow(2)
	    	 -----
	    	 -----

	 	 	 
	
Remco Daal
	    	 5,519
	    	 367,952

	 	 	 
	
Fern Grodner(3)
	    	 500
	    	 33,335

	 	 	 
	
Samir Manji(2)
	    	 -----
	    	 -----

	 	 	 
	
Kelly Marshall
	    	 7,828
	    	 521,893

	 	 	 
	
Al Mawani
	    	 6,858
	    	 457,223

	 	 	 
	
Gerald Miller
	    	 19,568
	    	 1,304,599

	 	 	 
	
Sheila Murray(3)
	    	 810
	    	 54,003

	 	 	 
	
Jennifer Warren
	    	 2,806
	    	 187,076

  
 Notes: 

	 	(1)	 This figure represents or applies to all deferred share units held by the Director as of December 31, 2019. 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, 2019, which was $66.67, by the applicable number of deferred share units. 

 

	 	(2)	 Mr. Clow and Mr. Manji did not stand for re-election as trustees of
Granite REIT or as directors of Granite GP at Granite’s annual general meeting of unitholders on June 13, 2019. 

  

	 	(3)	 Ms. Grodner and Ms. Murray were Directors for only a portion of 2019, having joined the Boards on
June 13, 2019. 

 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, 2019. 

INDEBTEDNESS OF TRUSTEES, DIRECTORS AND EXECUTIVE OFFICERS 

 
  

As at March 31, 2020, 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. 

  
 - 25 - 

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 No individual who is, or at any time during the financial year ended December 31,
2019 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, 2019 has been, indebted to Granite or any of its subsidiaries whether 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, 2019 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 Unitholder: 
 On behalf
of the CGN Committee and the Board, we are pleased to share with you our approach to executive compensation for 2019 and decisions that have been made with respect to executive compensation for 2020, 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. In 2019,
Granite introduced a new program for the administration of the long-term incentive plan (“LTIP”) for the organization to more closely align compensation with Granite’s financial performance. To support our objectives, 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. The CGN Committee is committed to strong corporate governance, and as a part of this commitment, the CGN Committee and the Board have
determined to hold a say-on-pay advisory vote at this year’s Meetings. 

Highlights of 2019 

2019 marked another successful year for Granite. Some of the key financial and operational developments included the following: 

Unitholder Return and Increased Distribution 
  

	 	●	 Granite delivered a strong total return in 2019 of approximately 30% for Unitholders (vs. 23% for both the S&P/TSX
Capped REIT Index and the S&P/TSX Composite Index) and a 3.6% year-over-year increase in the annual amount distributed to Unitholders to $2.90 per Stapled Unit for 2020, marking our eighth consecutive annual distribution increase.

  
 - 26 - 

Table of Contents

 Strategic Allocation of Capital 

 

	 	●	 $927 million invested in modern assets in key e-commerce and distribution
markets in Canada, the United States and the Netherlands at an average in-going yield of 5.5%; 

  

	 	●	 Approximately $540 million in unsecured committed term facilities were extended and refinanced at a weighted
average term of 6.1 years and bearing a weighted average fixed interest rate of 0.98%; 

  

	 	●	 $525 million in gross proceeds from two equity offerings, including the full exercise of the underwriters’
over-allotment option on each offering, with 83% of the offered securities sold to institutional investors; and 

  

	 	●	 Closed the year with a net leverage ratio of 21% providing approximately $900 million in debt capacity and
$800 million in available liquidity. 

 Portfolio Enhancement & Tenant
Diversification 
  

	 	●	 Acquired 12 properties totaling 8.5 million square feet with an average age of 6.1 years in key distribution
markets in Mississauga, the United States and the Netherlands; 

  

	 	●	 Disposed of 12 non-core properties and one parcel of land for
$105.8 million; and 

  

	 	●	 Consistent with Granite’s strategy, reduced Magna concentration from 47% to 35% as a percentage of gross leasable
area and 54% to 42% as a percentage of annualized revenue. 

 Financial & Operational
Performance 
  

	 	●	 Funds from operations (“FFO”)(1) and adjusted
funds from operations (“AFFO”)(1) per unit year-over-year change of (1.63%) and 17.3%, respectively (excluding certain foreign exchange gains and tenant allowance paid in 2018,
and lease termination and close-out fees, 3.8% and 17%, respectively);  

  

	 	●	 Same-property net operating income year-over-year growth, on a constant currency basis, of 4.5%;

  

	 	●	 2.8 million square feet of space renewed or re-leased at an average
increase in base rent of 7.7%; and 

  

	 	●	 Occupancy rate as at December 31, 2019 of 99.0%. 

Organizational Improvements and Environmental, Social and Governance  

 

	 	●	 Appointed a Head of Europe and Head of U.S. and opened a new Amsterdam office in July. These appointments have
enhanced Granite’s capacity to respond to opportunities and challenges in Europe and the U.S.; 

  

	 	●	 Implemented a Sustainability Plan, with over $1.7 million spent on energy-conservation and climate change
adaption measures in 2019 alone; and 

  
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	 	●	 Introduced
“notice-and-access” procedures for Granite’s annual meetings to reduce the environmental impact associated with providing printed materials.

 Compensation Changes 

Following the appointment of Mr. Kevan Gorrie as President and CEO in August of 2018, the CGN Committee began a comprehensive
review of Granite’s compensation program across the organization. The CGN Committee ultimately recommended to the Board certain compensation-related changes designed to better align executive compensation with the creation of long-term
Unitholder value. 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. 

Below are highlights of the changes approved by the Board in 2019: 

 

	 	●	 implemented a new LTIP program for executives and senior management to increase employee ownership and enhance
alignment with Unitholders; 

  

	 	●	 adopted defined performance targets and objectives for executives; 

 

	 	●	 extended annual grants of performance stapled units, as part of Granite’s LTIP, beyond the President and CEO to
all NEOs and other senior employees; 

  

	 	●	 in connection with Granite’s compensation risk mitigation strategy, adopted a compensation “claw-back”
policy applicable to certain designated officers, including the President and CEO, which would allow Granite to require the disgorgement of certain bonuses or incentives in the event of a restatement of financial statements; 

 

	 	●	 adopted updated guidelines pursuant to which the President and CEO is required to (i) hold Stapled Units, RSUs or
PSUs having an aggregate market value equal to at least three times his annual base salary while employed by Granite, and (ii) hold Stapled Units for a period of one year after he retires or resigns; and 

 

	 	●	 entered into new employment agreements with NEOs consistent with Granite’s new LTIP program, providing for annual
RSU and PSU grants based on a pre-determined percentage of base salary. 

As part of the ongoing review of our compensation program, the Board has also approved guidelines pursuant to which the NEOs other than
the President and CEO (who is subject to a different guideline) are required to hold Stapled Units, RSUs or PSUs having an aggregate market value equal to at least one times their annual base salary while employed by Granite.  

  
 - 28 - 

Table of Contents

 Looking Ahead 

We continue our commitment to implement 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. For the first time, at this year’s Meetings the Board is introducing a
say-on-pay resolution to be voted on by Unitholders. The CGN Committee and the Board believe this non-binding advisory resolution
is an important part of the ongoing process of engagement between the Board and Unitholders on executive compensation. 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, 
  

			
	 

  
 Al Mawani
	  	 

  
 Kelly Marshall

	Chair, Compensation, Governance and Nominating Committee	  	 Chairman

		  	
	 Granite REIT Inc.
	  	 Granite Real Estate Investment Trust and

	 	  	 Granite REIT Inc.

  
 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, 2019. 

  
 - 29 - 

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 2019, Granite’s NEOs were: 
  

			
	 	 
	
Name
	  	
Position

	 	 
	
Kevan Gorrie
	  	 President and Chief
Executive Officer

	 	 
	
Teresa Neto(1)
	  	 Chief Financial
Officer

	 	 
	
Lorne Kumer
	  	 Executive Vice
President, Head of Global Real Estate

	 	 
	
Ilias Konstantopoulos (2)
	  	 Former Chief Financial
Officer

  
 Notes: 

	(1)	 Ms. Neto was appointed Granite’s Chief Financial Officer effective July 8, 2019. 

 

	(2)	 Mr. Konstantopoulos departed Granite on May 30, 2019. 

  
 - 30 - 

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:  
  
 

 

  
 - 31 - 

Table of Contents

 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. The CGN Committee is comprised of the following three directors: 

 

					
	 	 	 
	  Name of Member      	  	 Independent
(Yes/No)

 
	  	Experience in Governance and Executive Compensation
	 	 	 
	
  Al Mawani

  (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 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 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.
  

 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. 

  
 - 32 - 

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 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;

  

	 	●	 	 review and approve organizational goals and objectives relevant to President and Chief Executive Officer
(“CEO”) 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, Executive Vice President and Head of Global Real Estate, and all other officers appointed by the Board and, if advisable, recommend for Board approval, 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; and 

  

	 	●	 	 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 

  
 - 33 - 

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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. 
 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 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; 

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

  

	 	●	 	 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, in May 2019, Granite 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, 2020, Mr. Gorrie exceeded this requirement by holding a
combination of stapled units, RSUs and PSUs having a market value in excess of eight 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, 2020, Ms. Neto and Mr. Kumer both 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, 1.9 times her base salary, and (ii) in the case of Mr. Kumer, 4.5 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. 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 2019, the CGN Committee retained
the services of Hugessen Consulting to review and provide input on the executive compensation and the introduction of annual grants of PSUs as part of Granite’s LTIP program for executive management and eligible employees below the executive
level. 

  
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 The following chart summarizes the fees paid to Hugessen Consulting in 2019: 

 

							
	 	 	 	 
	 Year

 
	 	 Services
  
	  	 Executive Compensation
Related Fees
($)

 
	  	 All Other Fees
($)

 

	 2019
	 	 Review of executive compensation and Granite’s long-term incentive plan program.

 
	  	$40,432.39	  	------
	 2018(1)
	 	 Review of Granite’s long-term incentive plan program.

 
	  	$3,758.10	  	------

  
 Notes: 

	(1)	 Information is in respect of services provided by Hugessen from August 2018, when it was first retained by the CGN
Committee, to December 31, 2018. 

 Compensation Peer Group 

For 2019, 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 2019 were selected based on several criteria and factors, including: 

 

	 	(a)	 issuers with asset size (by value) of not less than one-third and not more
than three times the size of Granite with the larger size of some peers offsetting 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: 

 

					
	  

2019 Peer Comparator Group
  

	 		 
	
•     Allied Properties REIT
	  	•     Artis REIT	  	•     Chartwell Retirement Residences
	 		 
	
•     Cominar REIT
	  	•     Crombie REIT	  	•     CT REIT
	 		 
	
•     First Capital Real Estate Investment Trust
	  	•     H&R REIT	  	•     Killam Apartment REIT
	 		 
	
•     SmartCentres REIT(1)
	  	•     Summit Industrial Income REIT	  	 
	 	  	 	  	 

  
 Note: 

	(1)	 Considered for NEO compensation other than in respect of the compensation of Granite’s President and CEO.

 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 nine countries, which offers opportunities for
prospective growth, but also involves a tax, legal and cash management structure not typical of a Canadian REIT; 

  
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	 	●	 	 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 New York Stock Exchange, requiring additional compliance requirements in governance, audit
and investor relations. 

 Elements of Executive Compensation 

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

			
	

	  	

  

							
	  

  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 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 comprised
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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 Disclosure regarding Mr. Ilias Konstantopoulos, the former Chief Financial
Officer of Granite, is included in the section “— Change of Control and Termination Provisions — Arrangements Regarding Departure of Former Chief Financial Officer” and is otherwise excluded from this Compensation
Discussion and Analysis due to his departure in 2019. 
 2019 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 2019, the annualized base salaries for the NEOs currently employed by Granite are as follows: 

 

							
	 	 	 	 
	  NEO	 	 2019 Base Salary
($)

 
  
	 	 2018 Base Salary
($)

 
  
	 	
Increase from 2018
(%)
  

 

	 	 	 	 
	   Kevan
Gorrie(1)
  
	 	 800,000

 
	 	 800,000

 
	 	 0%

 

	 	 	 	 
	   Teresa
Neto(2)
  
	 	 425,000

 
	 	 ----

 
	 	 n/a

 

	 	 	 	 
	   Lorne
Kumer
  
	 	 425,000

 
	 	 415,125

 
	 	 2.4%

 

  
 Notes: 

	(1)	 Mr. Gorrie joined Granite as President and Chief Executive Officer on August 1, 2018. Mr. Gorrie’s
base salary was pro-rated in 2018 for the period of his employment by Granite. 

  

	(2)	 Ms. Neto joined Granite as Chief Financial Officer on July 8, 2019. Ms. Neto’s base salary was pro-rated in 2019 for the period of her employment by Granite. 

 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 their 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: 
  
 

 

  
 - 39 - 

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 For 2019, the following tables reflect the performance measurement categories for each
NEO currently employed by Granite: 
 Kevan Gorrie, President and Chief Executive Officer 

 

																	
	  	 	  	 	 	  	 	  

2019 Performance Goals
  

 
	 	  	 	  
	
Corporate Measure
  
	 	
    Weight    
  
	 	 Threshold

 
	 	 Target

 
	 	 Maximum

 
	 	 2019 Actual
Performance

 
	 	
Calculated
Performance
Score
  

	 AFFO modified(1) per Stapled Unit
	 	 	  70%  		 	35%   	 	$3.35	 	$3.45	 	$3.60	 	$3.65	 	Exceeded
 Maximum

	 NAV per Stapled Unit(2)
  
	 	25%   	 	$61.00	 	$62.00	 	$65.00	 	$65.67	 	Exceeded
 Maximum 

	 Acquisitions/
Development(3)
	 	10%   	 	  $500 million  	 	  $750 million  	 	  $900 million  	 	$721.50 million	 	Exceeded
 Threshold

 

	 Dispositions – Single-tenant Concentration Reduction % (by
GLA)
	 	10%   	 	4.5%	 	6.0%	 	8.0%	 	4.0%	 	Below
Threshold
	 Complete Financings
	 	10%   	 	 	 	 	 	 	 	 Refinanced debt and completed two equity raises

 
	 	Exceeded
Target
	 Average Occupancy

 
	 	10%   	 	97.0%	 	98.0%	 	99.0%	 	99.1%	 	Exceeded
Maximum
	  

  Individual Performance Measure
  

	  Strategy Planning and 
  Strategic Execution	 	  
  
	  

30%
	 	Enhance platform capabilities in US/Europe  
	 	 The CGN Committee considered these specific performance
measures and determined that the President and CEO’s targets were met or exceeded in 2019.
  

	 	 Establish and implement sustainability plan

 

	 	 Foster engaged corporate culture

 

	 Total
Target
	 	 	100%	 	 	 	
Achieved STIP bonus of 145% of base salary
  

  
 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)	 Net asset value (“NAV”) per Stapled Unit is a non-IFRS
financial measure that is used internally by the CGN Committee and the Board to measure performance against pre-set targets. NAV per Stapled Unit is defined as the fair value of investment properties less
(i) total interest-bearing debt; (ii) lease obligations recognized in accordance with IFRS 16, Leases; (iii) the fair value of any cross currency interest rate swap liabilities; and (iv) any
non-controlling interests, plus (v) cash and cash equivalents and (vi) the fair value of any assets held for sale, divided by the total number of Stapled Units outstanding, all adjusted on a constant
currency basis. 

  

	(3)	 The acquisitions and development metric excluded the acquisition of 1301 Chalk Hill Road. 

  
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 Teresa Neto(1), Chief
Financial Officer 
  

																	
	  	 	  	 	 	  	 	  

2019 Performance Goals
  

 
	 	  	 	  
	
Corporate Measure
  
	 	
    Weight    
  
	 	 Threshold

 
	 	 Target

 
	 	 Maximum

 
	 	 2019 Actual
Performance

 
	 	
Calculated
Performance
Score
  

	 AFFO modified(2) per Stapled Unit
	 	 	  60%  		 	35%   	 	$3.35	 	$3.45	 	$3.60	 	$3.65	 	Exceeded
 Maximum

	 NAV per Stapled Unit(3)
	 	25%   	 	$61.00	 	$62.00	 	$65.00	 	$65.67	 	Exceeded
 Maximum 

	 Acquisitions/
Development(4)
	 	10%   	 	  $500 million  	 	  $750 million  	 	  $900 million  	 	$721.50 million	 	Exceeded
 Threshold

 

	 Dispositions – Single-tenant Concentration Reduction %
(by GLA)
	 	10%   	 	4.5%	 	6.0%	 	8.0%	 	4.0%	 	Below
Threshold
	 Complete Financings
	 	10%   	 	 	 	 	 	 	 	 Refinanced debt and completed two equity raises

 
	 	Exceeded
Target
	 Average Occupancy
	 	10%   	 	97.0%	 	98.0%	 	99.0%	 	99.1%	 	Exceeded
Maximum
	  

  Individual Performance Measure
  

	  Strategy Planning and 
  Strategic Execution	 	  
  
	  

40%
	 	Enhance financial reporting disclosures, both external and internal  
	 	The CGN Committee considered these specific performance measures and determined that the Chief Financial
Officer’s targets were met or exceeded for 2019.
	 	 Develop Finance leaders and engage staff;
develop a teamwork
culture
  

	 	 Enhance the information technology
platform

 

	 	 Active engagement with key stakeholders

 

	 	 Seek process improvements and
efficiencies

 

	 Total
Target
	 	 	100%	 	 	 	
Achieved STIP bonus of 90% of annualized base salary, pro-rated for the period of her employment(1)
  

  
 Notes: 

	(1)	 Teresa Neto joined Granite as Chief Financial Officer on July 8, 2019. 

 

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

  

	(3)	 See note (2) in the table above under “— Kevan Gorrie, President and Chief Executive Officer”
regarding NAV. 

  

	(4)	 The acquisitions and development metric excluded the acquisition of 1301 Chalk Hill Road. 

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

 

																	
	  	 	  	 	 	  	 	  

2019 Performance Goals
  

 
	 	  	 	  
	
Corporate Measure
  
	 	
    Weight    
  
	 	 Threshold

 
	 	 Target

 
	 	 Maximum

 
	 	 2019 Actual
Performance

 
	 	
Calculated
Performance
Score
  

	 AFFO modified(1) per Stapled Unit
	 	 	  60%  		 	35%   	 	$3.35	 	$3.45	 	$3.60	 	$3.65	 	Exceeded
 Maximum

	 NAV per Stapled Unit(2)
	 	25%   	 	$61.00	 	$62.00	 	$65.00	 	$65.67	 	Exceeded
 Maximum 

	 Acquisitions/
Development(3)
	 	10%   	 	  $500 million  	 	  $750 million  	 	  $900 million  	 	$721.50 million	 	Exceeded
 Threshold

 

	 Dispositions – Single-tenant Concentration Reduction % (by
GLA)
	 	10%   	 	4.5%	 	6.0%	 	8.0%	 	4.0%	 	Below
Threshold
	 Complete Financings
	 	10%   
	 	 	 	 	 	 	 	 Refinanced debt and completed two equity raises

 
  
	 	Exceeded
Target
	 Average Occupancy
	 	10%   	 	97.0%	 	98.0%	 	99.0%	 	99.1%	 	Exceeded
Maximum
	  

  Individual Performance Measure
  

	   Strategy Planning and

  Strategic Execution
	 	  
  
	  

40%
	 	Portfolio/asset management  
	 	 The CGN Committee considered these specific performance
measures and determined that the EVP, Head of Global Real Estate’s targets were met or exceeded for 2019.

	 	 Capex management and tenant relations

 

	 	 Organization and platform

 

	 	 Leasing

 

	 	 Strategic objectives

 

	 Total
Target
	 	 	100%	 	 	 	
Achieved STIP bonus of 87% of base salary
  

  
 Notes: 

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

  

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

  

	(3)	 The acquisitions and development metric excluded the acquisition of 1301 Chalk Hill Road. 

Other Considerations in Respect of STIP Awards 

In addition to the performance measurement categories noted above, the Trustees considered each NEO’s contribution to the overall
performance of Granite in 2019 including the role of such NEO in the achievement of the factors discussed under “— Long-Term Incentive Plan (LTIP)”. 

  
 - 42 - 

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 STIP – Summary Table 

For 2019, the following table summarizes the STIP award made to each NEO currently employed by Granite: 

 

											
	  

Executive
	 	  

2019 Potential STIP Award (as a % of    
Base Salary)

 
	 	
    2019 Actual STIP Award    

 

	 	  

Minimum         
	 	  

Target         
	 	  

Maximum         
	 	  

$ Value         
	 	  

% of Base         

Salary         

	
  Kevan Gorrie
  
	 	
0%          
	 	
100%          
	 	
200%          
	 	
1,157,840          
	 	
145%          

	
  Teresa Neto(1)

 
	 	
0%          
	 	
50%          
	 	
100%          
	 	
183,776          
	 	
90%          

	
  Lorne Kumer
  
	 	
0%          
	 	
50%          
	 	
100%          
	 	
370,133          
	 	
87%          

  
 Notes: 

	(1)	 Ms. Neto’s STIP award was pro-rated for the period of her employment
by Granite. 

 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. 

In 2019, Granite introduced a new LTIP program. Under the new program, executives receive annual awards of restricted stapled units
(“RSUs”) and performance stapled units (“PSUs”) on the basis of a percentage of base salary. This new approach 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. 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% 

  
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 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 2019: 

 

									
	 	 	 	 	 
	  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”. 

  
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 The following table sets out the RSUs granted in respect of the 2019 year to the NEOs
currently employed by Granite: 
  

					
	  

Executive
  
	 	  

  RSU Grant Date Fair Value(1)

 
	 	  

  Number of RSUs Awarded
  

	  

Kevan Gorrie
  
	 	  

  $280,000
  
	 	  

  4,535
  

	  

Teresa Neto(2)

 
	 	  

  $461,625(3)
  
	 	  

  7,476
  

	  

Lorne Kumer
  
	 	  

  $158,596
  
	 	  

  2,476
  

  
 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. 

  

	(2)	 Ms. Neto joined Granite as Chief Financial Officer on July 8, 2019. 

 

	(3)	 Pursuant to an entitlement in her employment agreement, upon joining Granite Ms. Neto received a one-time special RSU grant of $400,000. Such RSUs vest as to one-third of the total amount on each of August 12, 2020, August 12, 2021 and August 12, 2022.
Additionally, Ms. Neto received a regular annual LTIP award of $61,625 in RSU awards in respect of 2019, being a pro-rated amount for the period during which she was employed by Granite.

 PSU Awards 

For 2019, 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 2022 on the date on which the Board approves Granite’s 2021 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, 2021. 

  

	 	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%

  
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	●	 	 Net Asset Value: 50% weighting will be given to Granite’s NAV at vesting compared to a target NAV of $67.00
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. 

The following table sets out the PSUs granted in respect of the 2019 year to the NEOs currently employed by Granite: 

 

							
	 	 	 	 
	 Executive

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

	 Kevan Gorrie

 
	 	 $640,000
	 	 11,686
	 	
The date in 2022 on which the Board approves Granite’s 2021 annual financial statements.

 

	 Teresa Neto

 
	 	 $92,650
	 	 1,501

	 Lorne Kumer

 
	 	 $237,894
	 	 3,714

  
 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 2019 included health benefits and other limited, customary executive perquisites. 
 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 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. 

  
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Table of Contents

 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

 
	  	 	  	 	  	 	  	 	 
	 				 
	  	  	  	  	 2019(1)

 
	  	 2018(2)

 
	  	 2017

 
	 
	 	 	 	 	 
	 Total CEO compensation
	  	A	  	2.9	  	3.1	  	 	1.3	 
	 	 	 	 	 
	 Total NEO compensation
	  	B	  	4.8	  	5.7	  	 	5.5	 
	 	 	 	 	 
	 FFO(3)
	  	C	  	177.5	  	168.9	  	 	153.2	 
	 	 	 	 	 
	 Market capitalization as of
December 31(4)
	  	D	  	3,566.4	  	2,430.9	  	 	2,310.0	 
	 	 	 	 	 
	 CEO
Compensation:
	  		  		  		  			 
	 	 	 	 	 
	 Cost of management ratio (based
on FFO)
	  	A/C	  	1.62%	  	1.83%	  	 	0.84%	 
	 	 	 	 	 
	 Cost of management ratio (based
on market capitalization)
	  	A/D	  	0.08%	  	0.13%	  	 	0.06%	 
	 	 	 	 	 
	 NEO
Compensation:
	  		  		  		  			 
	 	 	 	 	 
	 Cost of management ratio (based
on FFO)
	  	B/C	  	2.70%	  	3.35%	  	 	3.59%	 
	 	 	 	 	 
	
Cost of management ratio (based on market capitalization)
	  	B/D	  	0.13%	  	0.23%	  	 	0.24%	 

  
 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 Kevan 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, 2019.

  

	(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. 

  
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 Performance Graph 

The following graph compares the total cumulative Unitholder return for the period from December 31, 2014 to December 31, 2019
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 $100.000 Invested on December 31, 2014 
  

 
  

													
	 	 	 	 	 	 	 
	 Fiscal Period
End
  
	 	 December 31,
2014

 
	 	 December 31,
2015

 
	 	 December 31,
2016

 
	 	 December 31,
2017

 
	 	 December 31,
2018

 
	 	 December 31,
2019

 

	 	 	 	 	 	 	 
	
Granite REIT Stapled

Units(1)(2)
	 	$100.00	 	$97.32	 	$122.08	 	$141.46	 	$161.86	 	$209.86
	 	 	 	 	 	 	 
	
S&P/TSX Composite

TR Index(2)
	 	$100.00	 	$91.67	 	$111.00	 	$121.08	 	$110.32	 	$135.52
	 	 	 	 	 	 	 
	
S&P/TSX Capped

REIT TR Index(2)
	 	$100.00	 	$95.35	 	$112.16	 	$123.21	 	$131.00	 	$160.85

  
 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, 2014 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, 2014 to December 31, 2019 for
$100.00 invested in Stapled Units was $209.86, compared to $135.52 for the S&P/TSX Composite Index and $160.85 for the S&P/TSX Capped REIT Index. 

Between January 1, 2015 and December 31, 2019, the total cumulative return to Unitholders per $100.00 invested, as a
percentage, has been significantly greater than the percentage increase in 

  
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average compensation paid to NEOs in 2019 as compared to 2015. 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, 2019, 2018 and 2017 by each of Granite’s NEOs. Unless indicated otherwise, all amounts were paid or are payable in Canadian dollars. 

 

																																					
	  

Name and
 Principal Position
	 	 Year

 
	 	 	 Salary ($)

 
	 	 	 Share-
Based
Awards ($)(1)
  
	 	 	
Option-
Based
Awards
($)
  
	 	 	  

Non-Equity Incentive
Plan Compensation ($)

 
	 	 	 Pension
Value
($)(3)
  
	 	 	 All Other
Compensation

($)(4)

 
	 	 	 Total
Compensation
($)

 
	 
	  
	 	  

Annual
Incentive
Plans(2)

 
	 	 	  

Long-Term
Incentive
Plans

 
	 
	 	 	 	 	 	 	 	 	 	 
	
Kevan Gorrie
  

President and Chief

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

 
  
	  

2017
  
	  

 
  
	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 

	 	 	 	 	 	 	 	 	 	 
	  

Teresa Neto
  

Chief Financial

Officer
	 	 	2019	 	 	 	204,599(7)	 	 	 	554,275(8)	 	 	 	—	 	 	 	183,776	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	942,650	 
	 	 	2018	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 
	 	  

 
  
	  

2017
  
	  

 
  
	 	  

 
  
	  

—
  
	  

 
  
	 	  

 
  
	  

—
  
	  

 
  
	 	  

 
  
	  

—
  
	  

 
  
	 	  

 
  
	  

—
  
	  

 
  
	 	  

 
  
	  

—
  
	  

 
  
	 	  

 
  
	  

—
  
	  

 
  
	 	  

 
  
	  

—
  
	  

 
  
	 	  

 
  
	  

—
  
	  

 
  

	 Ilias

Konstantopoulos
  

Former Chief

Financial Officer
	 	 	2019	 	 	 	171,321(9)	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	2,202,500	 	 	 	2,373,821	 
	 	 	2018	 	 	 	415,000	 	 	 	400,000	 	 	 	—	 	 	 	500,000	 	 	 	—	 	 	 	—	 	 	 	8,743	 	 	 	1,323,743	 
	 	  

 
  
	  

2017
  
	  

 
  
	 	 	415,000	 	 	 	300,000	 	 	 	—	 	 	 	311,250	 	 	 	—	 	 	 	—	 	 	 	8,670	 	 	 	1,034,920	 

	  

Lorne Kumer
  

Executive Vice

President, Head of

Global Real Estate
	 	 	2019	 	 	 	425,000	 	 	 	396,490(10)	 	 	 	—	 	 	 	370,133	 	 	 	—	 	 	 	—	 	 	 	8,833	 	 	 	1,200,456	 
	 	 	2018	 	 	 	415,125	 	 	 	400,000	 	 	 	—	 	 	 	411,344	 	 	 	—	 	 	 	—	 	 	 	8,743	 	 	 	1,235,212	 
	 	  

 
  
	  

2017
  
	  

 
  
	 	 	415,125	 	 	 	600,000(11)	 	 	 	—	 	 	 	311,344	 	 	 	—	 	 	 	—	 	 	 	8,670	 	 	 	1,335,139	 

  
 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 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 2019 were paid as a lump sum in the first quarter of 2020. 

  
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Table of Contents

	(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 Mr. Kumer and for Mr. Konstantopoulos in respect of 2017 and 2018, the amounts reflect Granite’s contribution towards the NEO’s registered retirement savings plan.
Mr. Konstantopoulos ceased to be Chief Financial Officer on May 30, 2019 and was awarded severance of $2,179,963 and $16,919 of unused vacation days settled in cash. Of the $2,179,963 severance, $779,383 was paid by
September 2019 and the remainder is being paid in equal monthly instalments over 14 months, beginning in October 2019. Mr. Konstantopoulos also received $5,618 in contributions to his registered retirement savings plan prior to
May 30, 2019. 

  

	(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 as to one-third of the total amount on each of August 12, 2020, August 12, 2021, and August 12, 2022. 

  

	(9)	 On an annualized basis for 2019, Mr. Konstantopoulos’ base salary would have been $415,000.

  

	(10)	 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. 

 

	(11)	 Mr. Kumer received a regular annual LTIP award of $300,000 in respect of 2017. In addition, in March 2017 the
Board approved a one-time grant of RSUs to Mr. Kumer in the amount of $300,000 for retention purposes. 

  
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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, 2019 for each NEO. There are no option-based awards outstanding as of December 31, 2019 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
		59,426		3,961,931		-
	 	 		 
	
Teresa Neto(3)

Chief Financial Officer
		9,105		607,030		-
	 	 		 
	
Lorne Kumer

Executive Vice President,

Head of Global Real Estate
		25,411		1,694,151		-
	 	 		 
	 Ilias
Konstantopoulos
 Former Chief Financial Officer

 
		 - 
		 - 
		-

  
 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, 2019, which was $66.67, by the applicable number of RSUs and PSUs. Subject to blackout restrictions, vested RSUs and PSUs are generally settled within 60 days. 

 

	(3)	 Ms. Neto joined Granite as Chief Financial Officer on July 8, 2019. 

  
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Table of Contents

 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, 2019. 
  

																
	 	 	 	 
	 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
earned during the year
 ($)(3)
  

	 	 		 
	
Kevan Gorrie

President and Chief Executive Officer
		-		1,003,065		1,157,840
	 	 		 
	
Teresa Neto

Chief Financial Officer
		-		-		183,776(4)
	 	 		 
	
Lorne Kumer

Executive Vice President,

Head of Global Real Estate
		-		251,856		370,133
	 	 		 
	 Ilias Konstantopoulos(5)
 Former Chief Financial Officer

 
		-		184,577		-

  
 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 2019.

  

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

  

	(4)	 Ms. Neto’s STIP award was pro-rated for the period of her employment
by Granite. 

  

	(5)	 In addition to the amount shown, on September 30, 2019, Mr. Konstantopoulos’ outstanding RSUs, having a
value of $1,054,596, vested and were settled in cash. 

 Change of Control and Termination Provisions 

The employment agreements entered into with each NEO, other than Mr. Konstantopoulos, 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, 2019, see “— Summary of Change
of Control and Termination Benefits” below. See also “— Employee Agreements” for more details. See “— Arrangements Regarding Departure of Former Chief Financial Officer” for a discussion of the departure
of Mr. Konstantopoulos. 
 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) all necessary approvals are received to authorize the dissolution and liquidation of Granite, or (iv) in connection with a contested election of directors, the persons who
were directors of Granite before such election shall cease to constitute a majority of the Board), then he will be entitled to receive base 

  
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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, 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) the award under the STIP to him in
respect of the most recent year, and (y) the average of the awards under the STIP granted to him in respect of the most recent two completed years, respectively; 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 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.

 The change of control provisions in the employment agreements for Ms. Neto and Mr. Kumer provide that if Granite
terminates the NEO’s employment without just cause following “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 has occurred), then such NEO will be entitled to receive base salary, medical and other benefits, expenses and
accrued vacation up to the last day of her employment, a STIP award, based on such NEO’s target STIP award, on a pro-rata basis up to the last day of his or her employment, as well as a payment
equal to 18 months’ compensation in the case of Ms. Neto, and 24 months’ compensation in the case of Mr. Kumer. “Compensation”, for the purpose of the prior sentence, means (a) such NEO’s base salary; (b)
(i) in the case of Ms. Neto, if Ms. Neto’s employment has lasted less than one year, a STIP award equal to her target STIP award; or (ii) in respect of Mr. Kumer, and Ms. Neto if Ms. Neto’s employment has
lasted one year or more, the greater of (x) the award under the STIP to such NEO in respect of the most recent year, and (y) the average of the awards under the STIP granted to such NEO in respect of the most recent two completed years,
respectively; 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 executive’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 

  
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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) the award under the STIP to him in respect of the most recent year, and (y) the average of the awards under the STIP granted to him in respect of the most recent two completed years, respectively; 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 or Mr. Kumer’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 and Mr. Kumer 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 or Mr. Kumer 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, on a pro-rata basis up to the last day of his or her employment, as well as a payment equal to 18 months’ compensation in the
case of Ms. Neto, and 24 months’ compensation in the case of Mr. Kumer. “Compensation”, for the purpose of the prior sentence, means (a) such NEO’s base salary; (b) (i) in the case of Ms. Neto, if
Ms. Neto’s employment has lasted less than one year, a STIP award equal to her target STIP award; or (ii) in respect of Mr. Kumer, and Ms. Neto if Ms. Neto’s employment has lasted one year or more, the greater of
(x) the award under the STIP to such NEO in respect of the most recent year, and (y) the average of the awards under the STIP granted to such NEO in respect of the most recent two completed years, respectively; 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 

  
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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 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 and Mr. Kumer, “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; and (viii) in the case of
Mr. Kumer, Granite GP or Granite REIT is no longer a reporting issuer. 
 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, 2019 in connection with a “Change of Control” as described above, and (ii) in the event of termination by Granite (without cause) on December 31, 2019 other than in
connection with a Change of Control. 
  

					
	  Name  
	 	  

Estimated Change of Control         

Termination Payment         

($)         

 
	 	  

Estimated Termination         

Payment         

($)         

 

	 	 	 
	
Kevan Gorrie
 President and Chief Executive
Officer
  
	 	4,796,400(1)         
	 	4,796,400(1)       
	 	 	 
	
Teresa Neto
 Chief Financial Officer

 
	 	1,434,375(1)         
	 	1,434,375(1)       
	 	 	 
	 Lorne
Kumer
 Executive Vice President, Head of Global Real Estate
  
	 	2,268,977(1)         	 	2,268,977(1)       

  
 Note: 

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

 Arrangements Regarding Departure of Former Chief Financial Officer 

On May 30, 2019, Ilias Konstantopoulos ceased to be Chief Financial Officer of Granite. In connection with
Mr. Konstantopoulos’ departure, Mr. Konstantopoulos will receive a severance payment in an aggregate amount of $2,179,963, together with $16,919 of unused vacation days settled in cash, in accordance with the terms of his employment
agreement. Of the $2,179,963 severance, $779,383 was paid by September 2019 and the remainder is being paid in equal monthly instalments over 14 months, beginning in October 2019. In addition, on September 30, 2019,
Mr. Konstantopoulos’ outstanding RSUs, having a value of $1,054,596, vested and were settled in cash. 

  
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 Equity Compensation Plan Information 

The following table provides information on Granite’s equity compensation plans as at December 31, 2019. 

 

																
	 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
  
	 	 146,165 
	 	 — 
	 	 613,441 

	 	 	 	 
	
Total
  
	 	146,165  
	 	—  
	 	2,499,985  

  
 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 1.9% of Granite’s outstanding Stapled Units as of December 31, 2019. As at December 31, 2019, 204,764 Stapled Units had been issued under settled RSUs, and 146,165 Stapled Units were issuable under outstanding RSUs and
PSUs, representing approximately 0.4%, and 0.3%, 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,
613,441 Stapled Units remain available to be issued under the Executive Deferred Stapled Unit Plan as of December 31, 2019, representing approximately 1.1% of Granite’s outstanding Stapled Units as of December 31, 2019. 

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 0.20% in 2019, 0.20% in 2018 and 0.09% in 2017. 

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 comprised 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 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 2019, seven 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 meetings held in 2019. Meetings of independent trustees and directors are also separately called as necessary. 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 seven meetings in
2019. Each director and trustee attended all Board meetings held in 2019 while such person was a director and trustee, other than Ms. Murray who attended three of four meetings held while she was a director and trustee, and Mr. Manji, who
attended two of three meetings held while he was a director and trustee. The attendance record of each proposed trustee and 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. Mawani (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. 
 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. 

  
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 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; 

 

	 	●	 	 monitor conflicts of interest (real or perceived) of members of the Boards and Management in accordance with the Code of
Conduct; 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. 

 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 

  
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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. The Board recognizes that gender diversity is a significant aspect of diversity and acknowledges the important role that women with relevant
competencies and skills can play in contributing to diversity of perspective in the boardroom. 
 The Boards’ Diversity Policy
includes provisions relating to the identification and nomination of women trustees and directors. As set out in the Diversity Policy, Granite has set a target that women represent more than 20% of the total membership on the Boards by June 30,
2019. Granite first adopted its Diversity Policy in 2015, at which time, Granite had zero women out of seven directors and trustees. As of the date of this Circular, Granite has three women out of nine directors and trustees, representing
approximately 33% of its trustees and directors. It is an objective of the Diversity Policy that diversity be considered in determining the optimal composition of the Boards. The 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 Policy provides that the CGN Committee will periodically assess the effectiveness of the Board nomination process at achieving Granite’s diversity objectives. 

In March 2020, 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. 
 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 

  
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corporate governance policies and documents in March 2020 as well as conducted an assessment survey of the Boards in March 2020. 

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 March 2020.  

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 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. 

  
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 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 4, 2020. 
 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 operation; 

 

	 	●	 	 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; and 

  

	 	●	 	 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. 

  
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 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 4, 2020
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. 
 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

  
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	 	●	 	 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; 

 

	 	●	 	 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 

  
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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; 

  

	 	●	 	 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. 

  
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 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 

  

	 	●	 	 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. 

  
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 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. On May 6 2019, CBRE presented to the Boards and executive officers on the US industrial market outlook, including in regards to capital flows, investor demands, and
industrial space supply and demand. In addition, on November 4, 2019 BMO presented to the Boards and executive officers on the global automotive industry, including the evolution of the supply chain, the impact of technology and supply and
demand fundamentals. 
 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. As part of Board orientation initiatives, in 2019, Ms. Grodner, Ms. Murray and Ms. Warren toured several of Granite’s Austrian properties. 

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, 2019 and December 31, 2019 as part of their continuing education. 
  

					
	 	 	 
	Presented / Hosted by	  	Topic / Event	  	Attended by
	 	 	 
	Informa Exhibitions	  	RealREIT 2019	  	Mr. Gorrie
	 	 	 
	Informa Exhibitions	  	Toronto Real Estate Forum	  	Mr. Gorrie
	 	 	 
	YPO	  	Trusting your Gut: The How & Why of Making Intuitive Decisions	  	Mr. Aghar
	 	 	 
	CBRE	  	Canadian Market Outlook Breakfast 2018	  	Mr. Aghar
	 	 	 
	Informa Exhibitions	  	Real Capital Forum	  	Mr. Aghar
	 	 	 
	CIBC	  	CIBC Annual Real Estate Conference	  	Mr. Aghar
	 	 	 
	YPO	  	Retail: Past, Present and Future	  	Mr. Aghar
	 	 	 
	Informa Exhibitions	  	RealREIT 2019	  	Mr. Aghar
	 	 	 
	DC Finance	  	Toronto Real Estate Family Office and High Net Worth Conference	  	Mr. Aghar
	 	 	 
	YPO	  	Diversity of Learnings: Engineering & Construction – War Story	  	Mr. Aghar
	 	 	 
	Canadian Club	  	Delivering the Future: Exclusive YPO/VIP Conversation with John Ferguson	  	Mr. Aghar

  
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	Presented / Hosted by	  	Topic / Event	  	Attended by
	 	 	 
	Informa Exhibitions	  	Toronto Real Estate Forum	  	Mr. Aghar
	 	 	 
	Informa Exhibitions	  	Toronto Real Estate Forum	  	Mr. Daal
	 	 	 
	Informa Exhibitions	  	Vancouver Real Estate Forum (Vancouver)	  	Mr. Daal
	 	 	 
	Informa Exhibitions	  	Global Property Market Conference (Toronto)	  	Mr. Daal
	 	 	 
	REALPAC	  	REALPAC Chief Executive Summit (Calgary)	  	Mr. Daal
	 	 	 
	Corenet Global Organization	  	Corenet Global Summit 2019	  	Ms. Grodner
	 	 	 
	CIBC Asset Management	  	2019 Economic & Investment Outlook – What the Experts Say	  	Mr. Mawani
	 	 	 
	MNP LLP	  	Financial & Auditor Reporting Update	  	Mr. Mawani
	 	 	 
	CIBC Investment Banking	  	2019 Annual Real Estate Conference	  	Mr. Mawani
	 	 	 
	Deloitte Canada	  	Be Your Own Activist	  	Mr. Mawani
	 	 	 
	Blake, Cassels & Graydon LLP	  	Six Cases Every Leasing Professional Should Know	  	Mr. Mawani
	 	 	 
	EY Canada	  	GTA Audit Committee Roundtable	  	Mr. Mawani
	 	 	 
	Hugessen Consulting	  	Executive Pay Trends and Issues	  	Mr. Mawani
	 	 	 
	Oslers	  	A Primer on D&O Insurance	  	Mr. Mawani
	 	 	 
	CPAB Real Estate Industry Forum	  	CPAB Inspections & Issues Facing Audit Committees of RE Companies in Canada	  	Mr. Mawani
	 	 	 
	McCarthy Tetrault	  	Annual Disclosure and Governance Seminar	  	Mr. Mawani
	 	 	 
	Rotman Business School	  	Real Estate Experts Speaker Series	  	Mr. Mawani
	 	 	 
	CPA British Columbia	  	Legal Responsibilities of Officers and Directors	  	Mr. Miller
	 	 	 
	CPA British Columbia	  	Bringing Artificial Intelligence to the Financial Audit	  	Mr. Miller
	 	 	 
	CPA British Columbia	  	Canada Planning Across the Enterprise	  	Mr. Miller
	 	 	 
	CPA Canada	  	Canada Canadian Public Company Financial Reporting Update	  	Mr. Miller
	 	 	 
	CPA Canada	  	AcSB Domestic Standards Update for Part II and Part III	  	Mr. Miller
	 	 	 
	CPA Canada	  	Technology, Investors and the Evolving Financial Information Landscape	  	Mr. Miller
	 	 	 
	CPA Canada	  	AcSB Framework for Reporting Performance Measures	  	Mr. Miller
	 	 	 
	CPA Canada	  	Introduction to Anti-Money Laundering	  	Mr. Miller
	 	 	 
	CPA Canada	  	Fraud Prevention for Professionals	  	Mr. Miller
	 	 	 
	CPA Canada	  	Canada Emerging Ethical Challenges for CPAs	  	Mr. Miller
	 	 	 
	Blake, Cassels & Graydon LLP	  	Negotiating Skills	  	Ms. Murray
	 	 	 
	Blake, Cassels & Graydon LLP	  	Diversity and Acquisition Trends	  	Ms. Murray

  
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	Presented / Hosted by	  	Topic / Event	  	Attended by
	 	 	 
	Blake, Cassels & Graydon LLP	  	Mergers and Acquisitions	  	Ms. Murray
	 	 	 
	Blake, Cassels & Graydon LLP	  	Shareholder Activism	  	Ms. Murray
	 	 	 
	Computershare	  	Creating Positive Shareholder Experiences	  	Ms. Warren
	 	 	 
	Computershare	  	Environmental, Social and Governance: Now and Next	  	Ms. Warren
	 	 	 
	Computershare	  	Protecting Data in a Cyber World	  	Ms. Warren
	 	 	 
	Computershare	  	Corporate Governance and Proxy Season Trends 2019	  	Ms. Warren

 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 CGN Committee of the Board of 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

  
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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. 

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 no female executive officers. Granite has not adopted a target regarding women in executive officer positions as the Board believes that such arbitrary targets are not in the best interests of
Granite. 
 Sustainability Planning 

In May 2019, Granite adopted a sustainability plan setting out its plan to pursue environmental, social and governance initiatives that
promote sustainability and returns for Unitholders. The principal objectives of the plan are to: (a) promote energy efficiency and sustainable 

  
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practices at Granite’s current properties; (b) exceed required environmental standards where feasible in Granite’s developments and major replacement projects; (c) reduce use
of resources and increase waste diversion; (d) promote volunteerism and community support; and (e) foster employee well-being. Granite expects to publish its first annual report summarizing its progress with respect to its sustainability
initiatives in 2020 on its website at www.granitereit.com. 
 INTERESTS OF INFORMED PERSONS IN
MATERIAL TRANSACTIONS 
  
  

To the knowledge of Granite, as at March 31, 2020, 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. 
 Information stated in this Circular is dated as at
March 31, 2020 except where otherwise indicated. The contents and the mailing of this Circular have been approved by the Boards. 

  
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 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. 
 Contacting the Boards 

Unitholders may engage with the Boards at any time during the year by contacting Mr. Marshall, Chairman of the Boards by e-mail at chairman@granitereit.com or by mail addressed to the Chairman of the Boards of Granite at 77 King Street West, Suite 4010, P.O. Box 159,
Toronto-Dominion Centre, Toronto, Ontario, M5K 1H1. 
  

			
	 

	  	 

	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. 

  
 - A-1 - 

Table of Contents

 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. 

  
 - A-2 - 

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
retain external legal counsel, consultants or other advisors to assist it in fulfilling its responsibilities and to set and pay the respective reasonable compensation of these advisors. 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. 

  
 - A-3 - 

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. 

 

  
 - A-4 - 

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. 

  
 - B-1 - 

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 manage these risks. 
 Verification of Controls 

The Board shall verify that internal, financial, non-financial and business control and
management information systems have been established 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. 

  
 - B-2 - 

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. 

  
 - B-3 - 

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 retain external legal counsel, consultants or other advisors to 

  
 - B-4 - 

Table of Contents

 
assist it in fulfilling its responsibilities and to set and pay the respective reasonable compensation of these advisors. 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 and terms
of employment of all senior management reporting directly to the CEO, 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-4.5

 Exhibit 4.5 
  

 
 

 
 Condensed Combined Financial Statements 

of Granite Real Estate Investment Trust 
 and Granite REIT
Inc. 
 For the three and nine months ended September 30, 2020 and 2019 

 Condensed Combined Balance Sheets 

(Canadian dollars in thousands) 
 (Unaudited) 

 

													
	As at	 	Note	 	    	September 30,
2020	 	  	December 31,
2019	 
	 ASSETS
	 				    				  			
				
	 Non-current assets:
	 				    				  			
	 Investment properties
	 	 	4	 	    	$	5,338,887	 	  	$	4,457,899	 
	 Construction funds in escrow
	 	 	6	 	    	 	8,797		  	 	16,767	
	 Deferred tax assets
	 				    	 	4,063		  	 	4,057	
	 Fixed assets, net
	 				    	 	3,029		  	 	2,119	
	 Other assets
	 	 	6	 	    	 	4,671		  	 	1,273	
		 				    	 	5,359,447		  	 	4,482,115	
				
	 Current assets:
	 				    				  			
	 Other receivable
	 	 	7		    	 	—	 	  	 	11,650	
	 Accounts receivable
	 				    	 	7,783		  	 	7,812	
	 Income taxes receivable
	 				    	 	479		  	 	315	
	 Prepaid expenses and other
	 				    	 	4,939		  	 	3,387	
	 Cash and cash equivalents
	 	 	15(d)	 	    	 	539,677		  	 	298,677	
	 Total assets
	 	 	 	 	    	$	5,912,325	 	  	$	4,803,956	 
				
	 LIABILITIES AND EQUITY
	 				    				  			
				
	 Non-current liabilities:
	 				    				  			
	 Unsecured debt, net
	 	 	8(a)	 	    	$	1,441,449	 	  	$	1,186,994	 
	 Cross currency interest rate swaps
	 	 	8(b)	 	    	 	75,484		  	 	30,365	
	 Long-term portion of lease obligations
	 	 	9	 	    	 	33,167		  	 	32,426	
	 Deferred tax liabilities
	 	 	 	 	    	 	367,464		  	 	320,972	
		 				    	 	1,917,564		  	 	1,570,757	
				
	 Current liabilities:
	 				    				  			
	 Unsecured debt, net
	 	 	8(a)	 	    	 	249,814		  	 	—	 
	 Cross currency interest rate swaps
	 	 	8(b)	 	    	 	17,626		  	 	—	 
	 Deferred revenue
	 	 	10	 	    	 	8,016		  	 	5,804	
	 Accounts payable and accrued liabilities
	 	 	10	 	    	 	64,943		  	 	50,183	
	 Distributions payable
	 	 	11	 	    	 	13,999		  	 	13,081	
	 Short-term portion of lease obligations
	 	 	9	 	    	 	827		  	 	619	
	 Income taxes payable
	 	 	 	 	    	 	17,107		  	 	15,402	
	 Total liabilities
	 	 	 	 	    	 	2,289,896		  	 	1,655,846	
				
	 Equity:
	 				    				  			
	 Stapled unitholders’ equity
	 	 	12	 	    	 	3,620,343		  	 	3,146,143	
	 Non-controlling
interests
	 	 	 	 	    	 	2,086		  	 	1,967	
	 Total equity
	 	 	 	 	    	 	3,622,429		  	 	3,148,110	
	 Total liabilities and equity
	 	 	 	 	    	$	5,912,325	 	  	$	4,803,956	 

 Commitments and contingencies (note 18) 

See accompanying notes 

  
 2    Granite REIT 2020 Third
Quarter Report 

 Condensed Combined Statements of Net Income 

(Canadian dollars in thousands) 
 (Unaudited) 

 

																					
	  	 	  	 	 	Three Months Ended
September 30,	 	  	Nine Months Ended
September 30,	 
	  	 	Note	 	 	2020	 	  	2019	 	  	2020	 	  	2019	 
	 Rental revenue
	 	 	13(a)	 	 	$	87,900		  	$	68,817	 	  	$	246,958	 	  	$	199,292	 
	 Lease termination and
close-out fees
	 	 	 	 	 	 	—	 	  	 	—	 	  	 	—	 	  	 	855	
	 Revenue
	 				 	 	87,900		  	 	68,817		  	 	246,958		  	 	200,147	
	 Property operating costs
	 	 	13(b)	 	 	 	11,417		  	 	8,677		  	 	31,428		  	 	25,711	
	 Net operating income
	 				 	 	76,483		  	 	60,140		  	 	215,530		  	 	174,436	
						
	 General and administrative expenses
	 	 	13(c)	 	 	 	9,572		  	 	6,902		  	 	24,285		  	 	23,412	
	 Depreciation and amortization
	 				 	 	286		  	 	243		  	 	794		  	 	676	
	 Interest income
	 				 	 	(535	) 	  	 	(2,288	) 	  	 	(1,810	) 	  	 	(7,892	) 
	 Interest expense and other financing costs
	 	 	13(d)	 	 	 	10,587		  	 	7,553		  	 	24,995		  	 	22,906	
	 Foreign exchange (gains) losses, net
	 				 	 	(247	) 	  	 	423		  	 	(2,989	) 	  	 	1,189	
	 Fair value gains on investment properties, net
	 	 	4	 	 	 	(62,045	) 	  	 	(78,226	) 	  	 	(132,586	) 	  	 	(197,876	) 
	 Fair value (gains) losses on financial instruments, net
	 	 	13(e)	 	 	 	(1,048	) 	  	 	(1,946	) 	  	 	4,737		  	 	(190	) 
	 Loss on sale of investment properties
	 	 	5	 	 	 	164		  	 	652		  	 	164		  	 	2,035	
	 Income before income taxes
	 				 	 	119,749		  	 	126,827	 	  	 	297,940	 	  	 	330,176	 
	 Income tax expense
	 	 	14	 	 	 	14,513		  	 	12,199		  	 	35,650	 	  	 	38,543	 
	 Net income
	 	 	 	 	 	$	105,236		  	$	114,628		  	$	262,290		  	$	291,633	
						
	 Net income attributable to:
	 				 				  				  				  			
	 Stapled unitholders
	 				 	$	105,199		  	$	114,528	 	  	$	262,152	 	  	$	291,451	 
	 Non-controlling
interests
	 	 	 	 	 	 	37		  	 	100		  	 	138		  	 	182	 
	 	 	 	 	 	 	$	105,236		  	$	114,628		  	$	262,290		  	$	291,633	

 See accompanying notes 

  
 Granite REIT 2020 Third Quarter
Report    3 

 Condensed Combined Statements of Comprehensive Income 

(Canadian dollars in thousands) 
 (Unaudited) 

 

																					
	  	 	  	 	 	Three Months Ended
September 30,	 	 	Nine Months Ended
September 30,	 
	  	 	Note	 	 	2020	 	 	2019	 	 	2020	 	 	2019	 
	 Net income
	 				 	$	105,236		 	$	114,628		 	$	262,290		 	$	291,633	
						
	 Other comprehensive (loss) income:
	 				 				 				 				 			
	 Foreign currency translation adjustment(1)
	 				 	 	(24,631	) 	 	 	(22,824	) 	 	 	139,517		 	 	(144,663	) 
	 Unrealized (loss) gain on net investment hedges, includes income
taxes of nil(1)
	 	 	8	(b) 	 	 	(15,930	) 	 	 	31,382	 	 	 	(60,276	) 	 	 	82,666	 
	 Total other comprehensive (loss) income
	 	 	 	 	 	 	(40,561	) 	 	 	8,558	 	 	 	79,241	 	 	 	(61,997	) 
	 Comprehensive income
	 	 	 	 	 	$	64,675	 	 	$	123,186	 	 	$	341,531	 	 	$	229,636	 
	  
 (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 attributable to:
	 				 				 				 				 			
						
	 Stapled unitholders
	 				 	$	64,641	 	 	$	123,141	 	 	$	341,376	 	 	$	229,559	 
	 Non-controlling
interests
	 	 	 	 	 	 	34		 	 	45		 	 	155		 	 	77	
	 	 	 	 	 	 	$	64,675	 	 	$	123,186	 	 	$	341,531	 	 	$	229,636	 

 See accompanying notes 

  
 4    Granite REIT 2020 Third
Quarter Report 

 Condensed Combined Statements of Unitholders’ Equity 

(Canadian dollars in thousands) 
 (Unaudited) 

 

																																	
	Nine Months Ended September 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
	 	 	—	 	 	 	—	 	 	 	—	 	 	 	262,152		 	 	—	 	 	 	262,152		 	 	138		 	 	262,290	
	 Other comprehensive income
	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	79,224		 	 	79,224		 	 	17		 	 	79,241	
	 Stapled unit offering, net of issuance costs (note 12(c))
	 	 	4,255		 	 	276,918		 	 	—	 	 	 	—	 	 	 	—	 	 	 	276,918		 	 	—	 	 	 	276,918	
	 Distributions (note 11)
	 	 	—	 	 	 	—	 	 	 	—	 	 	 	(121,054	) 	 	 	—	 	 	 	(121,054	) 	 	 	(130	) 	 	 	(121,184	) 
	 Contributions from non-controlling interests
	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	94		 	 	94	
	 Units issued under the stapled unit plan (note 12(a))
	 	 	31		 	 	1,977		 	 	—	 	 	 	—	 	 	 	—	 	 	 	1,977		 	 	—	 	 	 	1,977	
	 Units repurchased for cancellation (note 12(b))
	 	 	(491	) 	 	 	(23,689	) 	 	 	(1,328	) 	 	 	—	 	 	 	—	 	 	 	(25,017	) 	 	 	—	 	 	 	(25,017	) 
	 As at September 30, 2020
	 	 	57,847		 	$	2,863,256	 	 	$	53,326	 	 	$	508,347	 	 	$	195,414	 	 	$	3,620,343	 	 	$	2,086	 	 	$	3,622,429	 

  

																																	
	Nine Months Ended September 30, 2019	 	 	  	 	 	  	 	 	  	 	 	  	 	 	  	 
	  	 	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, 2019
	 	 	45,685		 	$	2,063,778	 	 	$	95,787	 	 	$	124,501	 	 	$	211,452	 	 	$	2,495,518	 	 	$	1,467	 	 	$	2,496,985	 
	 Net income
	 	 	—	 	 	 	—	 	 	 	—	 	 	 	291,451		 	 	—	 	 	 	291,451		 	 	182		 	 	291,633	
	 Other comprehensive loss
	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	(61,892	) 	 	 	(61,892	) 	 	 	(105	) 	 	 	(61,997	) 
	 Stapled unit offering, net of issuance costs (note 12(c))
	 	 	3,749		 	 	220,378		 	 	—	 	 	 	—	 	 	 	—	 	 	 	220,378		 	 	—	 	 	 	220,378	
	 Distributions (note 11)
	 	 	—	 	 	 	—	 	 	 	—	 	 	 	(101,062	) 	 	 	—	 	 	 	(101,062	) 	 	 	(150	) 	 	 	(101,212	) 
	 Special distribution paid in units and immediately consolidated (note 11)
	 	 	—	 	 	 	41,128		 	 	(41,128	) 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 
	 Units issued under the stapled unit plan (note 12(a))
	 	 	20		 	 	1,207		 	 	—	 	 	 	—	 	 	 	—	 	 	 	1,207		 	 	—	 	 	 	1,207	
	 Units repurchased for cancellation (note 12(b))
	 	 	(1	) 	 	 	(35	) 	 	 	(5	) 	 	 	—	 	 	 	—	 	 	 	(40	) 	 	 	—	 	 	 	(40	) 
	 As at September 30, 2019
	 	 	49,453		 	$	2,326,456	 	 	$	54,654	 	 	$	314,890	 	 	$	149,560	 	 	$	2,845,560	 	 	$	1,394	 	 	$	2,846,954	 

 See accompanying notes 

  
 Granite REIT 2020 Third Quarter
Report    5 

 Condensed Combined Statements of Cash Flows 

(Canadian dollars in thousands) 
 (Unaudited) 

 

																					
	  	  	  	 	 	Three Months Ended
September 30,	 	 	Nine Months Ended
September 30,	 
	  	  	Note	 	 	2020	 	 	2019	 	 	2020	 	 	2019	 
	 OPERATING ACTIVITIES
	  				 				 				 				 			
						
	 Net income
	  				 	$	105,236		 	$	114,628		 	$	262,290	 	 	$	291,633	
	 Items not involving operating cash flows
	  	 	15(a)	 	 	 	(48,497	) 	 	 	(66,750	) 	 	 	(91,827	) 	 	 	(156,014	) 
	 Leasing commissions paid
	  				 	 	(2,535	) 	 	 	(598	) 	 	 	(2,535	) 	 	 	(822	) 
	 Tenant allowances paid
	  				 	 	(349	) 	 	 	—	 	 	 	(590	) 	 	 	(204	) 
	 Current income tax expense
	  	 	14(a)	 	 	 	2,159		 	 	1,776		 	 	5,535		 	 	5,373	
	 Income taxes paid
	  				 	 	(4,789	) 	 	 	(2,014	) 	 	 	(4,766	) 	 	 	(5,697	) 
	 Interest expense
	  				 	 	10,094		 	 	7,217		 	 	23,678		 	 	21,819	
	 Interest paid
	  				 	 	(5,597	) 	 	 	(6,174	) 	 	 	(17,901	) 	 	 	(20,261	) 
	 Changes in working capital balances
	  	 	15(b)	 	 	 	10,388		 	 	(5,289	) 	 	 	12,016		 	 	(2,497	) 
	 Cash provided by operating activities
	  	 	 	 	 	 	66,110		 	 	42,796		 	 	185,900		 	 	133,330	
						
	 INVESTING ACTIVITIES
	  				 				 				 				 			
						
	 Investment properties:
	  				 				 				 				 			
	 Property acquisitions
	  	 	3	 	 	 	(114,713	) 	 	 	(51,570	) 	 	 	(565,346	) 	 	 	(469,254	) 
	 Working capital acquired on acquisitions
	  				 	 	(7,252	) 	 	 	—	 	 	 	(7,252	) 	 	 	—	 
	 Proceeds from disposals, net
	  	 	4, 5	 	 	 	35,468		 	 	12,610		 	 	35,468		 	 	38,238	
	 Capital expenditures
	  				 				 				 				 			
	 — Maintenance or improvements
	  				 	 	(1,431	) 	 	 	(847	) 	 	 	(4,749	) 	 	 	(2,632	) 
	 — Developments or expansions
	  				 	 	(7,830	) 	 	 	(7,203	) 	 	 	(33,433	) 	 	 	(11,884	) 
	 — Costs to complete acquired property
	  	 	4		 	 	(2,012	) 	 	 	—	 	 	 	(8,603	) 	 	 	—	 
	 Construction funds in escrow
	  	 	6		 	 	2,012		 	 	—	 	 	 	8,603		 	 	—	 
	 Mortgage receivable proceeds
	  	 	5	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	16,845	
	 Acquisition deposits
	  				 	 	—	 	 	 	(1,325	) 	 	 	—	 	 	 	(1,325	) 
	 Fixed asset additions
	  	 	 	 	 	 	(314	) 	 	 	(44	) 	 	 	(1,048	) 	 	 	(132	) 
	 Cash used in investing activities
	  	 	 	 	 	 	(96,072	) 	 	 	(48,379	) 	 	 	(576,360	) 	 	 	(430,144	) 
						
	 FINANCING ACTIVITIES
	  				 				 				 				 			
						
	 Monthly distributions paid
	  				 	 	(41,994	) 	 	 	(34,564	) 	 	 	(120,134	) 	 	 	(100,187	) 
	 Special distribution paid
	  	 	11		 	 	—	 	 	 	—	 	 	 	—	 	 	 	(13,710	) 
	 Proceeds from unsecured debentures, net of financing costs
	  	 	8(a)	 	 	 	(999	) 	 	 	—	 	 	 	496,895		 	 	—	 
	 Repayment of lease obligations
	  	 	9		 	 	(198	) 	 	 	(656	) 	 	 	(642	) 	 	 	(1,508	) 
	 Financing costs paid
	  				 	 	—	 	 	 	—	 	 	 	(30	) 	 	 	(25	) 
	 Distributions to non-controlling interests
	  				 	 	—	 	 	 	—	 	 	 	(130	) 	 	 	(150	) 
	 Proceeds from stapled unit offerings, net of issuance costs
	  	 	12(c)	 	 	 	(593	) 	 	 	—	 	 	 	276,918		 	 	220,378	
	 Repurchase of stapled units
	  	 	12(b)	 	 	 	—	 	 	 	(3	) 	 	 	(25,017	) 	 	 	(40	) 
	 Cash (used in) provided by financing activities
	  	 	 	 	 	 	(43,784	) 	 	 	(35,223	) 	 	 	627,860		 	 	104,758	
	 Effect of exchange rate changes on cash and cash
equivalents
	  	 	 	 	 	 	(3,825	) 	 	 	(642	) 	 	 	3,600		 	 	(10,776	) 
	 Net (decrease) increase in cash and cash equivalents during the period
	  				 	 	(77,571	) 	 	 	(41,448	) 	 	 	241,000		 	 	(202,832	) 
	 Cash and cash equivalents, beginning of period
	  	 	 	 	 	 	617,248		 	 	496,862		 	 	298,677		 	 	658,246	
	 Cash and cash equivalents, end of period
	  	 	 	 	 	$	539,677	 	 	$	455,414	 	 	$	539,677	 	 	$	455,414	 

 See accompanying notes 

  
 6    Granite REIT 2020 Third
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 November 4, 2020. 
  

	
	 2.  SIGNIFICANT
ACCOUNTING POLICIES

  

	(a)	 Basis of Presentation and Statement of Compliance 

The condensed combined financial statements for the three and nine month periods ended September 30, 2020 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, 2019. 
  

	(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 subsidiaries continue to be consolidated until the date that such control ceases. Control exists 

  
 Granite REIT 2020 Third Quarter
Report    7 

 
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, 2019. 
  

	(d)	 Future Accounting Policy Changes 

As at September 30, 2020, there are no new accounting standards issued but not yet applicable to the condensed combined financial statements except
for the following: 
 Agenda Decision — IFRS 16, Leases 

In December 2019, the IFRS Interpretations Committee issued a final agenda decision in regards to the determination of the lease term for cancellable or
renewable leases under IFRS 16, Leases (the “Decision”) and whether the useful life of any non-removable leasehold improvements is limited to the lease term of the related lease. As of
September 30, 2020, the Trust completed the impact assessment and determined that there is no material impact from the adoption of this interpretation on its combined financial statements. 

 

	(e)	 COVID-19 Pandemic 

During the nine month period ended September 30, 2020, 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 and weakness 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 nine month periods ended September 30, 2020, there has not been any significant impact on Granite’s
operations, assets or liabilities as a result of COVID-19. Granite has received 100% of rents due in the third quarter of 2020 and 99.9% of October rents. Granite has not recognized any provisions for
uncollected rent at this time as it expects any outstanding rent to be received. Granite reviewed its future cash flow projections and the valuation of its properties considering the impacts of the COVID-19
pandemic during the nine month period ended September 30, 2020 and Granite does not expect, at this time, that COVID-19 will have a significant impact to the fair value of its investment property
portfolio. In addition, there have not been any significant fair value losses on investment properties recorded in the three and nine month periods ended September 30, 2020. 

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 September 30, 2020 (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 the reinstatement of emergency measures, cannot be predicted. As such, the length and
full scope of the economic 

  
 8    Granite REIT 2020 Third
Quarter Report 

 
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. 
  

	
	
3.  ACQUISITIONS

 During the nine month periods ended September 30, 2020 and 2019, property acquisitions consisted of the following:

 Acquisitions During The Nine Months Ended September 30, 2020 
  

																					
	Property	 	Location	 	 	Date acquired	 	 	Property
purchase
price	 	 	Transaction
costs	 	 	Total
acquisition
cost	 
	 Property under development:
	 				 				 				 				 			
	 Aquamarijnweg 2(1)
	 	 
	Bleiswijk,
Netherlands	 
 	 	 	March 13, 2020	 	 	$	35,632	 	 	$	145	 	 	$	35,777	 
	 Income-producing properties:
	 				 				 				 				 			
	 Oude Graaf 15
	 	 	Weert, Netherlands	 	 	 	May 1, 2020	 	 	 	31,910		 	 	297		 	 	32,207	
	 De Kroonstraat 1
	 	 
	Tilburg,
Netherlands	 
 	 	 	July 1, 2020	 	 	 	71,716		 	 	646		 	 	72,362	
	 Francis Baconstraat 4
	 	 	Ede, Netherlands	 	 	 	July 1, 2020	 	 	 	21,403		 	 	243		 	 	21,646	
	 8995 Airport Road
	 	 	Brampton, ON	 	 	 	September 1, 2020	 	 	 	22,173		 	 	452		 	 	22,625	
	 555 Beck Crescent
	 	 	Ajax, ON	 	 	 	September 30, 2020	 	 	 	15,350		 	 	335		 	 	15,685	
						
	 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		 	 	491		 	 	112,081	
						
	 Midwest portfolio (five 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		 	 	785		 	 	178,432	
	 5415 Centerpoint Parkway
	 	 	Obetz, OH	 	 	 	July 8, 2020	 	 	 	45,092		 	 	252		 	 	45,344	
						
	 Mississauga portfolio (four properties):
	 				 				 				 				 			
	 5600, 5610, 5620 and 5630 Timberlea Boulevard
	 	 	Mississauga, ON	 	 	 	September 28, 2020	 	 	 	19,450		 	 	473		 	 	19,923	
						
	 Development land:
	 				 				 				 				 			
	 5005 Parker Henderson Road
	 	 	Fort Worth, TX	 	 	 	June 8, 2020	 	 	 	8,932		 	 	332		 	 	9,264	
	 	 	 	 	 	 	 	 	 	 	$	560,895	 	 	$	4,451	 	 	$	565,346	 

  

	(1)	 	 The development in Bleiswijk, Netherlands was completed during September 2020 and subsequently transferred to
income-producing properties. The property purchase price includes a tenant allowance of $6.8 million (€4.4 million) paid in September 2020 associated with the acquisition.

  
 Granite REIT 2020 Third Quarter
Report    9 

 Acquisitions During The Nine Months Ended September 30, 2019 

 
  

																					
	Property	 	Location	 	  	Date acquired	 	  	Property
purchase
price	 	  	Transaction
costs	 	  	Total
acquisition
cost	 
	 Income-producing properties:
	 				  				  				  				  			
	 201 Sunridge Boulevard
	 	 	Wilmer, TX	 	  	 	March 1, 2019	 	  	$	58,087	 	  	$	223	 	  	$	58,310	 
	 3501 North Lancaster Hutchins Road
	 	 	Lancaster, TX	 	  	 	March 1, 2019	 	  	 	106,120	 	  	 	222	 	  	 	106,342	 
	
2020 & 2095 Logistics Drive(1)
	 	 	Mississauga, ON	 	  	 	April 9, 2019	 	  	 	174,106		  	 	487		  	 	174,593	
	 1901 Beggrow Street
	 	 	Columbus, OH	 	  	 	May 23, 2019	 	  	 	71,607		  	 	267		  	 	71,874	
	 Heirweg 3
	 	 
	Born,
Netherlands	 
 	  	 	July 8, 2019	 	  	 	25,704		  	 	1,627		  	 	27,331	
	 1222 Commerce Parkway
	 	 	Horn Lake, MS	 	  	 	August 1, 2019	 	  	 	24,492		  	 	116		  	 	24,608	
		 				  				  				  				  			
	 Development land:
	 				  				  				  				  			
	 8320 Stedman Street
	 	 	Houston, TX	 	  	 	July 1, 2019	 	  	 	33,361		  	 	295		  	 	33,656	
	 	 	 	 	 	  	 	 	 	  	$	493,477	 	  	$	3,237	 	  	$	496,714	 

  

	(1)	 	 Includes right-of-use asset related to
ground lease of $20.5 million. 

 During the nine month period ended September 30, 2020, the transaction costs of
$4.5 million (2019 — $3.2 million), which included land transfer taxes and legal and advisory costs were first capitalized to the cost of the respective property 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	  	September 30,
2020	 	  	December 31,
2019	 
	 Income-producing properties
	  	$	5,270,271	 	  	$	4,377,623	 
	 Properties under development
	  	 	29,518		  	 	51,310	
	 Land held for development
	  	 	39,098		  	 	28,966	
	 	  	$	5,338,887	 	  	$	4,457,899	 

  
 10    Granite REIT 2020 Third
Quarter Report 

 Changes in investment properties are shown in the following table: 

 

																																	
	  	 	Nine Months Ended
September 30, 2020	 	 	  	 	 	  	 	 	Year Ended
December 31, 2019	 
	  	 	Income-
producing
properties	 	 	Properties
under
development	 	 	Land held
for
development	 	 	  	 	 	  	 	 	Income-
producing
properties	 	 	Properties
under
development	 	 	Land held
for
development	 
	 Balance, beginning of period
	 	$	4,377,623	 	 	$	51,310	 	 	$	28,966	 	 			 	 				 	$	3,415,786	 	 	$	17,009	 	 	$	3,984	 
	 Maintenance or improvements
	 	 	3,161		 	 	—	 	 	 	—	 	 			 	 				 	 	3,272		 	 	—	 	 	 	—	 
	 Leasing commissions
	 	 	2,535		 	 	—	 	 	 	—	 	 			 	 				 	 	1,079		 	 	—	 	 	 	—	 
	 Tenant allowances
	 	 	644		 	 	—	 	 	 	—	 	 			 	 				 	 	515		 	 	—	 	 	 	—	 
	 Developments or expansions
	 	 	58		 	 	36,427		 	 	270		 			 	 				 	 	3,641		 	 	27,250		 	 	—	 
	 Acquisitions (note 3)
	 	 	520,305		 	 	35,777		 	 	9,264		 			 	 				 	 	951,065		 	 	8,932		 	 	24,939	
	 Costs to complete acquired property (note 6)
	 	 	8,603		 	 	—	 	 	 	—	 	 			 	 				 	 	—	 	 	 	—	 	 	 	—	 
	 Disposals (note 5)
	 	 	(23,500	) 	 	 	—	 	 	 	—	 	 			 	 				 	 	—	 	 	 	—	 	 	 	—	 
	 Transfer to income-producing properties
	 	 	97,733		 	 	(97,733	) 	 	 	—	 	 			 	 				 	 	—	 	 	 	—	 	 	 	—	 
	 Classified as assets held for sale (note 5)
	 	 	—	 	 	 	—	 	 	 	—	 	 			 	 				 	 	(61,120	) 	 	 	—	 	 	 	—	 
	 Amortization of straight-line rent
	 	 	6,262		 	 	—	 	 	 	—	 	 			 	 				 	 	5,074		 	 	—	 	 	 	—	 
	 Amortization of tenant allowances
	 	 	(3,963	) 	 	 	—	 	 	 	—	 	 			 	 				 	 	(5,122	) 	 	 	—	 	 	 	—	 
	 Other changes
	 	 	(89	) 	 	 	—	 	 	 	—	 	 			 	 				 	 	189		 	 	—	 	 	 	—	 
	 Fair value gains (losses), net
	 	 	133,063		 	 	(145	) 	 	 	(332	) 	 			 	 				 	 	243,351		 	 	(135	) 	 	 	557	
	 Foreign currency translation, net
	 	 	147,836		 	 	3,882		 	 	930		 	 	 	 	 	 	 	 	 	 	(180,107	) 	 	 	(1,746	) 	 	 	(514	) 
	 Balance, end of period
	 	$	5,270,271	 	 	$	29,518		 	$	39,098		 	 	 	 	 	 	 	 	 	$	4,377,623	 	 	$	51,310		 	$	28,966	 

 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 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. 

  
 Granite REIT 2020 Third Quarter
Report    11 

 Included in investment properties is $25.5 million (December 31, 2019 — $18.9 million) of
net straight-line rent receivable 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 18). 
 Tenant
minimum rental commitments payable to Granite on non-cancellable operating leases as at September 30, 2020 are as follows: 
  

					
	 Year ended September 30,
	  	 	 	 
	 2021
	  	$	309,280	
	 2022
	  	 	304,458	
	 2023
	  	 	276,380	
	 2024
	  	 	208,062	
	 2025
	  	 	172,342	
	 2026 and thereafter
	  	 	840,113	
	 	  	$	2,110,635	

 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	 	September 30, 2020	 	 	  	 	 	  	 	 	December 31, 2019	 
	  	 	Weighted
average(1)	 	 	Maximum	 	 	Minimum	 	 	  	 	 	  	 	 	Weighted
average(1)	 	 	Maximum	 	 	Minimum	 
	 Canada
	 				 				 				 				 				 				 				 			
	 Discount rate
	 	 	5.74%	 	 	 	6.25%	 	 	 	5.25%	 	 				 				 	 	5.90%	 	 	 	8.75%	 	 	 	5.25%	 
	 Terminal capitalization rate
	 	 	5.27%	 	 	 	5.75%	 	 	 	5.00%	 	 				 				 	 	5.55%	 	 	 	8.00%	 	 	 	5.00%	 
						 			
	 United States
	 				 				 				 				 				 				 				 			
	 Discount rate
	 	 	6.36%	 	 	 	9.50%	 	 	 	5.00%	 	 				 				 	 	6.41%	 	 	 	9.50%	 	 	 	5.00%	 
	 Terminal capitalization rate
	 	 	5.82%	 	 	 	8.75%	 	 	 	4.75%	 	 				 				 	 	6.23%	 	 	 	8.75%	 	 	 	5.25%	 
						 			
	 Germany
	 				 				 				 				 				 				 				 			
	 Discount rate
	 	 	7.01%	 	 	 	9.00%	 	 	 	5.50%	 	 				 				 	 	6.83%	 	 	 	8.25%	 	 	 	5.70%	 
	 Terminal capitalization rate
	 	 	5.94%	 	 	 	8.00%	 	 	 	4.50%	 	 				 				 	 	6.31%	 	 	 	8.75%	 	 	 	5.00%	 
						 			
	 Austria
	 				 				 				 				 				 				 				 			
	 Discount rate
	 	 	8.50%	 	 	 	10.50%	 	 	 	8.00%	 	 				 				 	 	7.96%	 	 	 	10.00%	 	 	 	7.00%	 
	 Terminal capitalization rate
	 	 	7.29%	 	 	 	9.75%	 	 	 	6.75%	 	 				 				 	 	7.34%	 	 	 	9.75%	 	 	 	6.75%	 
						 			
	 Netherlands
	 				 				 				 				 				 				 				 			
	 Discount rate
	 	 	5.15%	 	 	 	6.75%	 	 	 	4.00%	 	 				 				 	 	5.24%	 	 	 	6.00%	 	 	 	4.70%	 
	 Terminal capitalization rate
	 	 	5.41%	 	 	 	7.55%	 	 	 	3.75%	 	 				 				 	 	6.14%	 	 	 	7.55%	 	 	 	5.60%	 
						 			
	 Other
	 				 				 				 				 				 				 				 			
	 Discount rate
	 	 	7.49%	 	 	 	9.50%	 	 	 	6.75%	 	 				 				 	 	8.25%	 	 	 	10.00%	 	 	 	7.25%	 
	 Terminal capitalization rate
	 	 	6.91%	 	 	 	10.00%	 	 	 	5.75%	 	 				 				 	 	8.20%	 	 	 	9.75%	 	 	 	6.25%	 
						 			
	 Total
	 				 				 				 				 				 				 				 			
	 Discount rate
	 	 	6.54%	 	 	 	10.50%	 	 	 	4.00%	 	 				 				 	 	6.60%	 	 	 	10.00%	 	 	 	4.70%	 
	 Terminal capitalization rate
	 	 	5.93%	 	 	 	10.00%	 	 	 	3.75%	 	 	 	 	 	 	 	 	 	 	 	6.32%	 	 	 	9.75%	 	 	 	5.00%	 

  

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

  
 12    Granite REIT 2020 Third
Quarter Report 

	
	 5.  ASSETS HELD FOR SALE
AND DISPOSITIONS

 During the nine month period ended September 30, 2020, Granite disposed of two properties located in Canada. The
disposed properties consist of the following: 
  

									
	Property	  	Location	  	Date disposed	  	Sale price	 
	 201 Patillo Road
	  	Tecumseh, ON	  	September 14, 2020	  	$	17,000	
	 2032 First Street Louth
	  	St. Catharines, ON	  	September 14, 2020	  	 	6,500	
	 	  	 	  	 	  	$	23,500	

 During the three and nine month periods ended September 30, 2020, Granite incurred $0.6 million (2019 —
$0.7 million) and $0.6 million (2019 — $2.0 million), respectively, of broker commissions and legal and advisory costs associated with the disposal or planned disposal of the assets held for sale which are included in the loss on sale of
investment properties on the condensed combined statements of net income. In connection with the disposal of a property in South Carolina in September 2018, on July 22, 2020, Granite settled the associated obligation in cash. Upon receipt of
the proceeds receivable (note 10) a resulting gain of $0.4 million was realized which is included in loss on sale of investment properties on the condensed combined statements of net income. 

During the nine month period ended September 30, 2019, Granite disposed of seven properties located in Canada and the United States for gross
proceeds totaling $56.9 million. The gross proceeds associated with four properties disposed of included a vendor take-back mortgage of $16.8 million (US$12.7 million) which was repaid on June 18, 2019. 

At September 30, 2020 and December 31, 2019, there were no investment properties classified as assets held for sale. 

 

	
	
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 September 30, 2020,
$8.8 million (US$6.6 million) remained in escrow (December 31, 2019 — $16.8 million (US$12.9 million)). As construction is completed, the construction costs are capitalized to the cost of the investment property. During the nine month
period ended September 30, 2020, $8.6 million (US$6.3 million) was released from escrow and capitalized to the property (note 4). 

  
 Granite REIT 2020 Third Quarter
Report    13 

 Other Assets 
  

									
	As at	  	September 30,
2020	 	  	December 31,
2019	 
	 Deferred financing costs associated with the revolving credit facility
	  	$	677	 	  	$	885	 
	 Long-term receivables
	  	 	374		  	 	388	
	 2027 Cross Currency Interest Rate Swap (note 8(b))
	  	 	3,620		  	 	—	 
	 	  	$	4,671	 	  	$	1,273	 

  

	
	 7.  CURRENT
ASSETS

 Other Receivable 
 On
July 22, 2020, the full amount of the proceeds receivable of $12.1 million (US$9.0 million) associated with the disposal of a property in South Carolina in September 2018 was received. The estimated sale price for the property in 2018 was
determined using an income approach that assumed a forecast consumer price index inflation factor at the date of disposition. Accordingly, the proceeds receivable was subject to change and was dependent upon the actual consumer price index inflation
factor as at December 31, 2019. As at December 31, 2019, the proceeds receivable was $11.7 million (US$9.0 million). 
  

	
	 8.  UNSECURED DEBT AND
CROSS CURRENCY INTEREST RATE SWAPS

  

	(a)	 Unsecured Debentures and Term Loans, Net 

 

																					
	As at	 	  	 	 	September 30, 2020	 	 	December 31, 2019	 
	  	 	Maturity Date	 	 	Amortized
Cost(1)	 	 	Principal
issued and
outstanding	 	 	Amortized
Cost(1)	 	 	Principal
issued and
outstanding	 
	 2021 Debentures
	 	 	July 5, 2021	 	 	$	249,814		 	$	250,000		 	$	249,646		 	$	250,000	
	 2023 Debentures
	 	 	November 30, 2023	 	 	 	398,986		 	 	400,000		 	 	398,746		 	 	400,000	
	 2027 Debentures
	 	 	June 4, 2027	 	 	 	497,025		 	 	500,000		 	 	—	 	 	 	—	 
	 2024 Term Loan
	 	 	December 19, 2024	 	 	 	245,930		 	 	246,494		 	 	239,153		 	 	239,816	
	 2026 Term Loan
	 	 	December 11, 2026	 	 	 	299,508		 	 	300,000		 	 	299,449		 	 	300,000	
	 	 	 	 	 	 	$	1,691,263	 	 	$	1,696,494	 	 	$	1,186,994	 	 	$	1,189,816	 

  

	(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	  	September 30,
2020	 	  	December 31,
2019	 
	 Unsecured Debentures and Term Loans, Net
	  				  			
	 Non-current
	  	$	1,441,449		  	$	1,186,994	
	 Current
	  	 	249,814		  	 	—	 
	 	  	$	1,691,263	 	  	$	1,186,994	 

 On June 4, 2020, Granite REIT Holdings Limited Partnership (“Granite LP”), a wholly-owned subsidiary of
Granite, issued at par $500.0 million aggregate principal amount of 3.062% Series 4 

  
 14    Granite REIT 2020 Third
Quarter Report 

 
senior debentures due June 4, 2027 (the “2027 Debentures”). Interest on the 2027 Debentures is payable semi-annually in arrears on June 4 and December 4 of each year.
Deferred financing costs of $3.1 million were incurred in connection with the issuance of the 2027 Debentures and are recorded as a reduction against the principal owing. 

The 2027 Debentures are redeemable, in whole or in part, at Granite’s option at any time and from time to time, at a price equal to accrued and
unpaid interest plus the greater of (a) 100% of the principal amount of the 2027 Debentures to be redeemed; and (b) the Canada Yield Price. The Canada Yield Price means, in respect of a 2027 Debenture, a price equal to which, if the 2027
Debenture were to be issued at such price on the redemption date, would provide a yield thereon from the redemption date to its maturity date equal to 65.0 basis points above the yield that a non-callable
Government of Canada bond, trading at par, would carry if issued on the redemption date with a maturity date of June 4, 2027. Granite also has the option to redeem the 2027 Debentures at par plus any accrued and unpaid interest within 30 days
of the maturity date of June 4, 2027. 
  

	(b)	 Cross Currency Interest Rate Swaps 

 

									
	As at	  	September 30,
2020	 	  	December 31,
2019	 
	 Financial asset at fair value
	  				  			
	 2027 Cross Currency Interest Rate Swap (note 6)
	  	$	3,620		  	$	—	
	 Financial liabilities at fair value
	  				  			
	 2021 Cross Currency Interest Rate Swap
	  	$	17,626		  	$	3,630	
	 2023 Cross Currency Interest Rate Swap
	  	 	35,629		  	 	24,298	
	 2024 Cross Currency Interest Rate Swap
	  	 	14,755		  	 	1,202	
	 2026 Cross Currency Interest Rate Swap
	  	 	25,100		  	 	1,235	
	 	  	$	93,110		  	$	30,365	

  

									
	As at	  	September 30,
2020	 	  	December 31,
2019	 
	 Financial liabilities at fair value
	  				  			
	 Non-current
	  	$	75,484		  	$	30,365	
	 Current
	  	 	17,626		  	 	—	 
	 	  	$	93,110		  	$	30,365	

 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 debentures that mature in 2021 (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 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 debentures that mature in 2023 (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 

  
 Granite REIT 2020 Third Quarter
Report    15 

 
LIBOR plus margin monthly interest payments from the term loan that matures in 2024 (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 term loan that matures in 2026 (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. 

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 are assessed quarterly. Gains and losses associated with the effective portion of the hedges are recognized in other comprehensive income. For the three and nine month periods ended September 30, 2020, the Trust has assessed the
net investment hedge associated with each cross currency interest rate swap, except for a portion of the 2024 Cross Currency Interest Rate Swap, to be effective. 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 and the fair value gains or losses on all other cross currency interest rate swaps are recorded in other comprehensive income. For the three and nine month periods ended September 30, 2020, 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 $1.4 million and a fair value loss of $5.7 million is recognized in fair value losses on financial
instruments, net (note 13(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. 
  

	
	 9.  LEASE
OBLIGATIONS

 As at September 30, 2020, 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. During the nine month period ended September 30, 2020, Granite recorded an additional right-of-use asset and related lease
obligation of $0.6 million for office space in the United States. 

  
 16    Granite REIT 2020 Third
Quarter Report 

 Future minimum lease payments relating to the right-of-use assets as at September 30, 2020 in aggregate for the next five years and thereafter are as follows: 
  

					
	 Remainder of 2020
	  	$	149	
	 2021
	  	 	862	
	 2022
	  	 	559	
	 2023
	  	 	275	
	 2024
	  	 	264	
	 2025 and thereafter
	  	 	31,885	
	 	  	$	33,994	 

 During the three and nine month periods ended September 30, 2020, the Trust recognized $0.4 million (2019
— $0.4 million) and $1.2 million (2019 — $0.9 million) of interest expense, respectively, related to lease obligations (note 13(d)). 
  

	
	 10. 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 February 1, 2018, the Trust entered into an unsecured revolving credit facility in the amount of $500.0 million that is available by way of
Canadian dollar, US dollar or Euro denominated loans or letters of credit and matures on February 1, 2023. The Trust has the option to extend the maturity date by one year to February 1, 2024 subject to the agreement of lenders in respect
of a minimum of 66 2/3% of the aggregate amount committed under the facility. The credit facility provides the Trust with the ability to increase the amount of the commitment by an additional aggregate principal amount of up to $100.0 million
with the consent of the participating lenders. As at September 30, 2020, the Trust had no amounts drawn (December 31, 2019 — nil) from the credit facility and $1.0 million (December 31, 2019 — $1.0 million) in letters of credit
issued against the facility. 
 Accounts Payable and Accrued Liabilities 
  

									
	As at	  	September 30,
2020	 	  	December 31,
2019	 
	 Accounts payable
	  	$	9,653	 	  	$	6,840	 
	 Tenant security deposits
	  	 	4,768		  	 	3,978	
	 Employee unit-based compensation
	  	 	6,241		  	 	5,586	
	 Trustee/director unit-based compensation
	  	 	4,786		  	 	3,301	
	 Accrued salaries, incentives and benefits
	  	 	4,374		  	 	5,416	
	 Accrued interest payable
	  	 	12,832		  	 	6,507	
	 Accrued construction payable
	  	 	7,223		  	 	5,933	
	 Accrued professional fees
	  	 	2,797		  	 	3,822	
	 Accrued property operating costs
	  	 	11,579		  	 	6,376	
	 Accrual associated with a property disposal (note 7)
	  	 	—	 	  	 	1,944	
	 Other accrued liabilities
	  	 	690		  	 	480	
	 	  	$	64,943	 	  	$	50,183	 

  
 Granite REIT 2020 Third Quarter
Report    17 

 In connection with the disposal of a property in South Carolina in September 2018, Granite retained an
obligation to make certain repairs to the building. Accordingly, a liability was recorded at the time the property was disposed of, as determined using a third-party report. On July 22, 2020 in conjunction with the receipt of the proceeds
receivable for this property disposal (note 7) Granite settled the obligation in cash. 
  

	
	 11. DISTRIBUTIONS TO STAPLED
UNITHOLDERS

 Total distributions declared to stapled unitholders in the three month period ended September 30, 2020 were
$42.0 million (2019 — $34.6 million) or 72.6 cents per stapled unit (2019 — 69.9 cents per stapled unit). Total distributions declared to stapled unitholders in the nine month period ended September 30, 2020 were
$121.1 million (2019 — $101.1 million) or $2.18 per stapled unit (2019 — $2.10 per stapled unit). Distributions payable at September 30, 2020 of $14.0 million, representing the September 2020 distribution, were paid on
October 15, 2020. Distributions payable at December 31, 2019 of $13.1 million were paid on January 15, 2020 and represented the December 2019 monthly distributions. 

On October 16, 2020, distributions of $14.0 million or 24.2 cents per stapled unit were declared and will be paid on November 16, 2020.

 Granite paid a special distribution on January 15, 2019 of $1.20 per stapled unit, which comprised of 30.0 cents per unit payable in cash of
$13.7 million and 90.0 cents per unit payable by the issuance of stapled units. Immediately following the issuance of the stapled units, the stapled units were consolidated such that each unitholder held the same number of stapled units after
the consolidation as each unitholder held prior to the special distribution. In January 2019, upon the issuance of the stapled units, the stapled units account increased and contributed surplus decreased by $41.1 million, respectively. 

 

	
	 12. 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 September 30, 2020 and December 31, 2019, there were no options outstanding under this plan. 

  
 18    Granite REIT 2020 Third
Quarter Report 

 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: 
  

																					
	  	  	2020	 	  	  	 	  	2019	 
	  	  	Number
(000s)	 	  	Weighted Average
Grant Date
Fair Value	 	  	  	 	  	Number
(000s)	 	 	Weighted Average
Grant Date
Fair Value	 
	 DSUs outstanding, January 1
	  	 	50		  	$	48.01	 	  				  	 	44		 	$	46.01	 
	 Granted
	  	 	13		  	 	66.73		  				  	 	13		 	 	55.02	 
	 Settled
	  	 	—	 	  	 	—	 	  	 	 	 	  	 	(11	) 	 	 	51.57	
	 DSUs outstanding, September 30
	  	 	63		  	$	51.87	 	  	 	 	 	  	 	46		 	$	47.19	 

 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: 
  

																					
	  	 	2020	 	  	  	 	  	2019	 
	  	 	Number
(000s)	 	 	Weighted Average
Grant Date
Fair Value	 	  	  	 	  	Number
(000s)	 	 	Weighted Average
Grant Date
Fair Value	 
	 RSUs and PSUs outstanding, January 1
	 	 	145		 	$	55.93	 	  				  	 	117		 	$	50.34	 
	 New grants(1) 
	 	 	53		 	 	66.61		  				  	 	84		 	 	61.83	
	 Forfeited
	 	 	(1	) 	 	 	67.66		  				  	 	(1	) 	 	 	47.06	
	 Settled in cash
	 	 	(33	) 	 	 	55.70		  				  	 	(35	) 	 	 	52.91	
	 Settled in stapled units
	 	 	(31	) 	 	 	55.70		  	 	 	 	  	 	(20	) 	 	 	52.91	
	 RSUs and PSUs outstanding, September 30(1)
	 	 	133		 	$	60.18	 	  	 	 	 	  	 	145		 	$	56.83	 

  

	(1)	 	 New grants include 20,816 RSUs and 26,546 PSUs granted during the nine month period ended September 30, 2020 (2019
— 54,145 RSUs and 24,587 PSUs). Total restricted stapled units outstanding at September 30, 2020 include a total of 75,569 RSUs and 57,332 PSUs granted (2019 — 116,038 RSUs and 28,784 PSUs). 

The fair value of the outstanding RSUs was $3.6 million at September 30, 2020 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 10). 

The fair value of the outstanding PSUs was $2.6 million at September 30, 2020 and is recorded as a liability in the employee unit-based
compensation payables (note 10). The fair value is calculated using the Monte-Carlo simulation model based on the assumptions below as well as a 

  
 Granite REIT 2020 Third Quarter
Report    19 

 
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, 2020, January 1, August 12, September 24, 2019 and
November 16, 2018	 
	 PSUs granted
	  	 	54,863	
	 Term to expiry
	  	 	2.2 years	 
	 Average volatility rate
	  	 	41.0%	 
	 Weighted average risk free interest rate
	  	 	0.2%	 

 The Trust’s unit-based compensation expense recognized in general and administrative expenses was: 

 

																	
	  	  	Three Months Ended
September 30,	 	    	Nine Months Ended
September 30,	 
	  	  	2020	 	    	2019	 	    	2020	 	    	2019	 
	 DSPs for trustees/directors(1)
	  	$	855		    	$	386	 	    	$	1,485	 	    	$	1,269	 
	 Restricted Stapled Unit Plan for executives and employees
	  	 	2,394		    	 	1,276		    	 	4,768		    	 	4,062	
	 Unit-based compensation expense
	  	$	3,249		    	$	1,662	 	    	$	6,253	 	    	$	5,331	 
	 Fair value remeasurement expense included in the above:
	  				    				    				    			
	 ● DSPs for trustees/directors 
	  	$	522		    	$	131	 	    	$	638	 	    	$	459	
	 ● Restricted
Stapled Unit Plan for executives and employees
	  	 	886		    	 	306		    	 	1,145		    	 	1,011	
	 Total fair value remeasurement expense
	  	$	1,408		    	$	437	 	    	$	1,783	 	    	$	1,470	

  

	(1)	 	 In respect of fees mandated and elected to be taken as DSUs. 

 

	(b)	 Normal Course Issuer Bid 

On May 19, 2020, 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
5,344,576 of Granite’s issued and outstanding stapled units. The NCIB commenced on May 21, 2020 and will conclude on the earlier of the date on which purchases under the bid have been completed and May 20, 2021. Pursuant to the
policies of the TSX, daily purchases made by Granite through the TSX may not exceed 58,842 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, 2019 to May 20,
2020. 
 During the nine month period ended September 30, 2020, Granite repurchased 490,952 stapled units (2019 — 700 stapled units) at an
average stapled unit cost of $50.95 for total consideration of $25.0 million (2019 — less than $0.1 million). The difference between the repurchase price and the average cost of the stapled units of $1.3 million (2019 — less than
$0.1 million) was recorded to contributed surplus. 

  
 20    Granite REIT 2020 Third
Quarter Report 

	(c)	 Stapled Unit Offerings 

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. 
 On April 30,
2019, Granite completed an offering of 3,749,000 stapled units at a price of $61.50 per unit for gross proceeds of $230.6 million, including 489,000 stapled units issued pursuant to the exercise of the over-allotment option granted to the
underwriters. Total costs related to the offering totaled $10.2 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
$220.4 million. 
  

	(d)	 Accumulated Other Comprehensive Income 

Accumulated other comprehensive income consists of the following: 
  

									
	As at September 30,	  	2020	 	 	2019	 
	 Foreign currency translation gains on investments in subsidiaries, net of related hedging activities and non-controlling interests(1)
	  	$	292,320	 	 	$	183,019	 
	 Fair value losses on derivatives designated as net investment
hedges
	  	 	(96,906	) 	 	 	(33,459	) 
	 	  	$	195,414	 	 	$	149,560	 

  

	(1) 	 	 Includes foreign currency translation gains and losses from non-derivative
financial instruments designated as net investment hedges. 

  

	
	 13. RENTAL REVENUE, RECOVERIES,
COSTS AND EXPENSES

  

	(a)	 Rental revenue consists of: 

 

																					
	  	  	Three Months Ended
September 30,	 	 	  	 	    	Nine Months Ended
September 30,	 
	  	  	2020	 	    	2019	 	 	  	 	    	2020	 	    	2019	 
	 Base rent
	  	$	75,086	 	    	$	60,850	 	 				    	$	214,769	 	    	$	176,201	 
	 Straight-line rent amortization
	  	 	3,337		    	 	1,061		 				    	 	6,262		    	 	3,749	
	 Tenant incentive amortization
	  	 	(1,377	) 	    	 	(1,261	) 	 				    	 	(3,963	) 	    	 	(3,857	) 
	 Property tax recoveries
	  	 	7,728		    	 	5,668		 				    	 	20,229		    	 	15,833	
	 Property insurance recoveries
	  	 	742		    	 	538		 				    	 	1,941		    	 	1,594	
	 Operating cost recoveries
	  	 	2,384		    	 	1,961		 	 	 	 	    	 	7,720		    	 	5,772	
	 	  	$	87,900		    	$	68,817		 	 	 	 	    	$	246,958	 	    	$	199,292	

  
 Granite REIT 2020 Third Quarter
Report    21 

	(b)	 Property operating costs consist of: 

 

																					
	  	  	Three Months Ended
September 30,	 	  	  	 	    	Nine Months Ended
September 30,	 
	  	  	2020	 	    	2019	 	  	  	 	    	2020	 	    	2019	 
	 Non-recoverable from tenants:
	  				    				  				    				    			
	 Property taxes and utilities
	  	$	253		    	$	232		  				    	$	723		    	$	987	
	 Legal
	  	 	32		    	 	66		  				    	 	107		    	 	210	
	 Consulting
	  	 	29		    	 	38		  				    	 	29		    	 	74	
	 Environmental and appraisals
	  	 	22		    	 	—	 	  				    	 	259		    	 	370	
	 Repairs and maintenance
	  	 	210		    	 	165		  				    	 	538		    	 	572	
	 Other
	  	 	170		    	 	142		  	 	 	 	    	 	493		    	 	497	
	 	  	$	716		    	$	643	 	  	 	 	 	    	$	2,149	 	    	$	2,710	 
	 Recoverable from tenants:
	  				    				  				    				    			
	 Property taxes and utilities
	  	$	8,012		    	$	6,075	 	  				    	$	21,881		    	$	16,927	 
	 Property insurance
	  	 	781		    	 	589		  				    	 	2,177		    	 	1,743	
	 Repairs and maintenance
	  	 	1,122		    	 	826		  				    	 	2,591		    	 	2,005	
	 Property management fees
	  	 	734		    	 	507		  				    	 	1,964		    	 	1,420	
	 Other
	  	 	52		    	 	37		  	 	 	 	    	 	666		    	 	906	
	 	  	$	10,701		    	$	8,034	 	  	 	 	 	    	$	29,279	 	    	$	23,001	 
	 Property operating costs
	  	$	11,417		    	$	8,677		  	 	 	 	    	$	31,428		    	$	25,711	

  

	(c)	 General and administrative expenses consist of: 

 

																					
	  	  	Three Months Ended
September 30,	 	  	  	 	    	Nine Months Ended
September 30,	 
	  	  	2020	 	    	2019	 	  	  	 	    	2020	 	    	2019	 
	 Salaries, incentives and benefits
	  	$	4,061		    	$	2,801	 	  				    	$	11,105	 	    	$	10,184	 
	 Audit, legal and consulting
	  	 	801		    	 	998		  				    	 	2,591		    	 	3,475	
	 Trustee/director fees including distributions, revaluations and expenses(1)
	  	 	895		    	 	475		  				    	 	1,635		    	 	1,534	
	 RSU and PSU compensation expense including distributions and revaluations(1)
	  	 	2,394		    	 	1,276		  				    	 	4,768		    	 	4,062	
	 Other public entity costs
	  	 	510		    	 	397		  				    	 	1,446		    	 	1,587	
	 Office rents including property taxes and common area maintenance costs
	  	 	111		    	 	99		  				    	 	309		    	 	280	
	 Capital tax
	  	 	290		    	 	120		  				    	 	630		    	 	242	
	 Information technology costs
	  	 	289		    	 	238		  				    	 	785		    	 	716	
	 Other
	  	 	221		    	 	498		  	 	 	 	    	 	1,016		    	 	1,332	
	 	  	$	9,572		    	$	6,902	 	  	 	 	 	    	$	24,285		    	$	23,412	 

  

	(1)	 	 For fair value remeasurement expense amounts see note 12(a). 

During the three and nine month periods ended September 30, 2020, Granite incurred less than $0.1 million and $0.1 million of expenses
relating to COVID-19, respectively. 

  
 22    Granite REIT 2020 Third
Quarter Report 

	(d)	 Interest expense and other financing costs consist of: 

 

																					
	  	  	Three Months Ended
September 30,	 	 	  	 	    	Nine Months Ended
September 30,	 
	  	  	2020	 	    	2019	 	 	  	 	    	2020	 	    	2019	 
	 Interest and amortized issuance costs and modification losses relating to debentures and term loans
	  	$	9,798		    	$	6,671	 	 				    	$	22,677	 	    	$	20,472	 
	 Amortization of deferred financing costs and other interest expense and charges
	  	 	561		    	 	564		 				    	 	1,680		    	 	1,599	
	 Interest expense related to lease obligations (note 9)
	  	 	402		    	 	392		 	 	 	 	    	 	1,195		    	 	909	
		  	$	10,761		    	$	7,627		 				    	$	25,552		    	$	22,980	
	 Less: Capitalized interest
	  	 	(174	) 	    	 	(74	) 	 	 	 	 	    	 	(557	) 	    	 	(74	) 
	 	  	$	10,587		    	$	7,553		 	 	 	 	    	$	24,995		    	$	22,906	

  

	(e)	 Fair value (gains) losses on financial instruments, net, consist of: 

 

																					
	  	  	Three Months Ended
September 30,	 	 	  	 	    	Nine Months Ended
September 30,	 
	  	  	2020	 	    	2019	 	 	  	 	    	2020	 	    	2019	 
	 Foreign exchange forward contracts, net (note 16(a))
	  	$	215	 	    	$	(1,866	) 	 				    	$	226	 	    	$	(110	) 
	 Foreign exchange collar contracts, net (note 16(a))
	  	 	185		    	 	—	 	 				    	 	(1,192	) 	    	 	—	 
	 Cross currency interest rate swap (note 8(b))
	  	 	(1,448	) 	    	 	(80	) 	 	 	 	 	    	 	5,703		    	 	(80	) 
	 	  	$	(1,048	) 	    	$	(1,946	) 	 	 	 	 	    	$	4,737	 	    	$	(190	) 

 For the three and nine month periods ended September 30, 2020, the Trust recorded a fair value gain of
$1.4 million and a fair value loss of $5.7 million, respectively, related to the fair value change of the 2024 Cross Currency Interest Rate Swap associated with interest and other movements which has not been designated in a hedging
relationship and is therefore recognized in the condensed combined statements of net income (note 8(b)). 
  

	
	 14. INCOME
TAXES

  

	(a)	 The major components of the income tax expense are: 

 

																					
	  	  	Three Months Ended
September 30,	 	  	  	 	    	Nine Months Ended
September 30,	 
	  	  	2020	 	    	2019	 	  	  	 	    	2020	 	    	2019	 
	 Current income tax expense
	  	$	2,159	 	    	$	1,776	 	  				    	$	5,535		    	$	5,373	
	 Deferred income tax expense
	  	 	12,354		    	 	10,423		  	 	 	 	    	 	30,115		    	 	33,170	
	 Income tax expense
	  	$	14,513		    	$	12,199	 	  	 	 	 	    	$	35,650	 	    	$	38,543	 

  
 Granite REIT 2020 Third Quarter
Report    23 

 (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
September 30,	 	 	  	 	    	Nine Months Ended
September 30,	 
	  	  	2020	 	    	2019	 	 	  	 	    	2020	 	    	2019	 
	 Income before income taxes
	  	$	119,749		    	$	126,827		 	 	 	 	    	$	297,940		    	$	330,176	
	 Expected income taxes at the Canadian statutory tax rate of 26.5% (2019 — 26.5%)
	  	$	31,733	 	    	$	33,609	 	 				    	$	78,954	 	    	$	87,496	
	 Income distributed and taxable to unitholders
	  	 	(14,937	) 	    	 	(18,623	) 	 				    	 	(40,251	) 	    	 	(43,172	) 
	 Net foreign rate differentials
	  	 	(2,887	) 	    	 	(2,163	) 	 				    	 	(6,336	) 	    	 	(6,227	) 
	 Net change in provisions for uncertain tax positions
	  	 	443		    	 	430		 				    	 	466		    	 	1,238	
	 Net permanent differences
	  	 	(21	) 	    	 	(813	) 	 				    	 	(70	) 	    	 	(643	) 
	 Withholding taxes and other
	  	 	182		    	 	(241	) 	 	 	 	 	    	 	2,887		    	 	(149	) 
	 Income tax expense
	  	$	14,513	 	    	$	12,199	 	 	 	 	 	    	$	35,650	 	    	$	38,543	 

  

	
	 15. DETAILS OF CASH
FLOWS

  

	(a)	 Items not involving operating cash flows are shown in the following table: 

 

																					
	  	  	Three Months Ended
September 30,	 	 	  	 	    	Nine Months Ended
September 30,	 
	  	  	2020	 	    	2019	 	 	  	 	    	2020	 	    	2019	 
	 Straight-line rent amortization
	  	$	(3,337	) 	    	$	(1,061	) 	 				    	$	(6,262	) 	    	$	(3,749	) 
	 Tenant incentive amortization
	  	 	1,377		    	 	1,261		 				    	 	3,963		    	 	3,857	
	 Unit-based compensation expense (note 12(a))
	  	 	3,249		    	 	1,662		 				    	 	6,253		    	 	5,331	
	 Fair value gains on investment properties
	  	 	(62,045	) 	    	 	(78,226	) 	 				    	 	(132,586	) 	    	 	(197,876	) 
	 Depreciation and amortization
	  	 	286		    	 	243		 				    	 	794		    	 	676	
	 Fair value losses on financial instruments, net (note 13(e))
	  	 	(1,048	) 	    	 	(1,946	) 	 				    	 	4,737		    	 	(190	) 
	 Loss on sale of investment properties
	  	 	164		    	 	652		 				    	 	164		    	 	2,035	
	 Amortization of issuance costs and modification losses relating to debentures and term loans
	  	 	303		    	 	218		 				    	 	714		    	 	651	
	 Amortization of deferred financing costs
	  	 	78		    	 	78		 				    	 	234		    	 	234	
	 Deferred income taxes (note 14(a))
	  	 	12,354		    	 	10,423		 				    	 	30,115		    	 	33,170	
	 Other
	  	 	122		    	 	(54	) 	 	 	 	 	    	 	47		    	 	(153	) 
	 	  	$	(48,497	) 	    	$	(66,750	) 	 	 	 	 	    	$	(91,827	) 	    	$	(156,014	) 

  
 24    Granite REIT 2020 Third
Quarter Report 

	(b)	 Changes in working capital balances are shown in the following table: 

 

																					
	  	  	Three Months Ended
September 30,	 	 	  	 	    	Nine Months Ended
September 30,	 
	  	  	2020	 	    	2019	 	 	  	 	    	2020	 	    	2019	 
	 Accounts receivable
	  	$	7,011	 	    	$	(1,767	) 	 				    	$	8,395	 	    	$	(1,544	) 
	 Prepaid expenses and other
	  	 	725		    	 	(2,227	) 	 				    	 	676		    	 	(1,842	) 
	 Accounts payable and accrued liabilities
	  	 	1,941		    	 	174		 				    	 	829		    	 	(672	) 
	 Deferred revenue
	  	 	711		    	 	(1,519	) 	 				    	 	2,116		    	 	1,516	
	 Restricted cash
	  	 	—	 	    	 	50		 	 	 	 	    	 	—	 	    	 	45	
	 	  	$	10,388	 	    	$	(5,289	) 	 	 	 	 	    	$	12,016	 	    	$	(2,497	) 

  

	(c)	 Non-cash investing and financing activities 

During the nine month period ended September 30, 2020, 31 thousand stapled units (2019 — 20 thousand stapled units) with a value of
$2.0 million (2019 — $1.2 million) were issued under the Restricted Stapled Unit Plan (note 12(a)) and are not recorded in the condensed combined statements of cash flows. In addition, the condensed combined statement of cash flows for the
nine month period ended September 30, 2019 does not include the right-of-use asset and lease obligation of $20.5 million, associated with the acquisition of
the leasehold interest in two Canadian properties (note 3) and the issuance and consolidation of stapled units associated with the special distribution in the amount of $41.1 million (note 11). 

 

	(d)	 Cash and cash equivalents consist of: 

 

									
	As at	  	September 30, 2020	 	  	December 31, 2019	 
	 Cash
	  	$	464,469	 	  	$	248,499	 
	 Short-term deposits
	  	 	75,208		  	 	50,178	
	 	  	$	539,677	 	  	$	298,677	 

  
 Granite REIT 2020 Third Quarter
Report    25 

	
	 16. 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 September 30, 2020 and December 31, 2019: 

 

																	
	As at	  	September 30, 2020	 	  	December 31, 2019	 
	  	  	Carrying
Value	 	  	Fair Value	 	  	Carrying
Value	 	 	Fair Value	 
	 Financial assets
	  				  				  				 			
	 Construction funds in escrow
	  	$	8,797	 	  	$	8,797	 	  	$	16,767	 	 	$	16,767	
	 Other assets
	  	 	374	(1) 	  	 	374		  	 	388	(1) 	 	 	388	
	 Other assets
	  	 	3,620	(2) 	  	 	3,620	 	  	 	—	 	 	 	—	 
	 Other receivable
	  	 	—	 	  	 	—	 	  	 	11,650	 	 	 	11,650	
	 Accounts receivable
	  	 	7,783	 	  	 	7,783		  	 	7,812	 	 	 	7,812	
	 Prepaid expenses and other
	  	 	1,192	(3) 	  	 	1,192		  	 	120	(3) 	 	 	120	
	 Cash and cash equivalents
	  	 	539,677	 	  	 	539,677		  	 	298,677	 	 	 	298,677	
	 	  	$	561,443	 	  	$	561,443	 	  	$	335,414	 	 	$	335,414	 
	 Financial liabilities
	  				  				  				 			
	 Unsecured debentures, net
	  	$	1,145,825	(4) 	  	$	1,225,285	 	  	$	648,392	 	 	$	669,090	 
	 Unsecured term loans, net
	  	 	545,438	 	  	 	545,438		  	 	538,602	 	 	 	538,602	
	 Cross currency interest rate swaps
	  	 	93,110	(5) 	  	 	93,110		  	 	30,365	 	 	 	30,365	
	 Accounts payable and accrued liabilities
	  	 	64,810	 	  	 	64,810		  	 	50,156	 	 	 	50,156	
	 Accounts payable and accrued liabilities
	  	 	133	(6) 	  	 	133		  	 	27	(6) 	 	 	27	
	 Distributions payable
	  	 	13,999	 	  	 	13,999		  	 	13,081	 	 	 	13,081	
	 	  	$	1,863,315	 	  	$	1,942,775	 	  	$	1,280,623	 	 	$	1,301,321	 

  

	(1) 	 	 Long-term receivables included in other assets (note 6). 

	(2) 	 	 The 2027 Cross Currency Interest Rate Swap included in other assets (note 6). 

	(3)	 	 Foreign exchange collars and forward contracts included in prepaid expenses. 

	(4) 	 	 Balance includes current and non-current portions (note 8(a)).

	(5) 	 	 Balance includes current and non-current portions (note 8(b)).  

	(6) 	 	 Foreign exchange forward contracts included in accounts payable and accrued liabilities. 

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 value of the other receivable associated with proceeds from a 2018 property disposal approximates its carrying amount as the amount is revalued at each
reporting period. 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. 

  
 26    Granite REIT 2020 Third
Quarter Report 

 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 September 30, 2020, the Trust held one outstanding foreign exchange forward contract (December 31, 2019 — seven contracts
outstanding). The foreign exchange forward contract represents one contract to sell €2.0 million and purchase US$2.2 million. For the three and nine month periods ended
September 30, 2020, the Trust recorded a net fair value loss of $0.2 million (2019 — net fair value gain of $1.9 million) and $0.2 million (2019 — net fair value gain of $0.1 million), respectively, related to outstanding
foreign exchange forward contracts (note 13(e)). At September 30, 2020, the Trust held 12 outstanding foreign exchange collar contracts (December 31, 2019 — nil) with a notional value of 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 nine outstanding foreign exchange collar contracts (December 31, 2019 — nil) with a notional value of
€18.0 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 nine month periods
ended September 30, 2020, the Trust recorded a net fair value loss of $0.2 million (2019 — nil) and a net fair value gain of $1.2 million (2019 — nil), related to the outstanding foreign exchange collar contracts (note
13(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 2020 Third Quarter
Report    27 

 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 September 30, 2020	  	Level 1	 	 	Level 2	 	 	Level 3	 
	 ASSETS AND LIABILITIES MEASURED OR DISCLOSED AT FAIR VALUE
	  				 				 			
				
	 Assets measured at fair value
	  				 				 			
	 Investment properties
	  	$	—		 	$	—		 	$	5,338,887	
	 Cross currency interest rate swap included in other assets (note 6)
	  	 	—	 	 	 	3,620		 	 	—	 
	 Foreign exchange collars included in prepaid expenses and other
	  	 	—	 	 	 	1,192		 	 	—	 
				
	 Liabilities measured or disclosed at fair value
	  				 				 			
	 Unsecured debentures, net (note 8)
	  	 	1,225,285		 	 	—	 	 	 	—	 
	 Unsecured term loans, net (note 8)
	  	 	—	 	 	 	545,438		 	 	—	 
	 Cross currency interest rate swaps (note 8)
	  	 	—	 	 	 	93,110		 	 	—	 
	 Foreign exchange forward contracts included in accounts payable and
accrued liabilities
	  	 	—	 	 	 	133		 	 	—	 
	 Net (liabilities) assets measured or disclosed at fair
value
	  	$	(1,225,285	) 	 	$	(633,869	) 	 	$	5,338,887	 

  

													
	As at December 31, 2019	  	Level 1	 	 	Level 2	 	 	Level 3	 
	 ASSETS AND LIABILITIES MEASURED OR DISCLOSED AT FAIR VALUE
	  				 				 			
				
	 Assets measured at fair value
	  				 				 			
	 Investment properties
	  	$	—		 	$	—		 	$	4,457,899	
	 Short-term proceeds receivable associated with a property disposal included in accounts receivable (note
7)
	  	 	—	 	 	 	—	 	 	 	11,650	
	 Foreign exchange forward contracts included in prepaid expenses and other
	  	 	—	 	 	 	120		 	 	—	 
				
	 Liabilities measured or disclosed at fair value
	  				 				 			
	 Unsecured debentures, net (note 8)
	  	 	669,090		 	 	—	 	 	 	—	 
	 Unsecured term loans, net (note 8)
	  	 	—	 	 	 	538,602		 	 	—	 
	 Cross currency interest rate swaps (note 8)
	  	 	—	 	 	 	30,365		 	 	—	 
	 Foreign exchange forward contracts included in accounts payable and
accrued liabilities
	  	 	—	 	 	 	27		 	 	—	 
	 Net (liabilities) assets measured or disclosed at fair
value
	  	$	(669,090	) 	 	$	(568,874	) 	 	$	4,469,549	 

 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 nine
month periods ended September 30, 2020 and the year ended December 31, 2019, there were no transfers between the levels. 

  
 28    Granite REIT 2020 Third
Quarter Report 

	(c)	 Risk Management 

Foreign exchange risk 
 As at
September 30, 2020, 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 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 September 30, 2020, the Trust’s foreign currency denominated net assets are $4.2 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 $25.7 million and $15.3 million, respectively, to comprehensive income. 

  
 Granite REIT 2020 Third Quarter
Report    29 

	
	 17. 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 September 30, 2020	 
	  	  	Granite REIT	 	  	Granite GP	 	  	Eliminations/
Adjustments	 	 	Granite REIT and
Granite GP
Combined	 
	 ASSETS
	  				  				  				 			
	 Non-current assets:
	  				  				  				 			
	 Investment properties
	  	$	5,338,887	 	  				  				 	$	5,338,887	 
	 Investment in Granite LP(1)
	  	 	—	 	  	 	24		  	 	(24	) 	 	 	—	 
	 Other non-current
assets
	  	 	20,560		  	 	 	 	  	 	 	 	 	 	20,560	
		  	 	5,359,447		  	 	24		  	 	(24	) 	 	 	5,359,447	
					
	 Current assets:
	  				  				  				 			
	 Other current assets
	  	 	13,186		  	 	15		  				 	 	13,201	
	 Intercompany receivable(2)
	  	 	—	 	  	 	12,491		  	 	(12,491	) 	 	 	—	 
	 Cash and cash equivalents
	  	 	539,438		  	 	239		  	 	 	 	 	 	539,677	
	 Total assets
	  	$	5,912,071	 	  	 	12,769		  	 	(12,515	) 	 	$	5,912,325	 
					
	 LIABILITIES AND EQUITY
	  				  				  				 			
	 Non-current liabilities:
	  				  				  				 			
	 Unsecured debt, net
	  	$	1,441,449	 	  				  				 	$	1,441,449	 
	
Other non-current liabilities
	  	 	476,115		  	 	 	 	  	 	 	 	 	 	476,115	
		  	 	1,917,564		  				  				 	 	1,917,564	
					
	 Current liabilities:
	  				  				  				 			
	 Unsecured debt, net
	  	 	249,814		  				  				 	 	249,814	
	 Intercompany payable(2)
	  	 	12,491		  				  	 	(12,491	) 	 	 	—	 
	 Other current liabilities
	  	 	109,773		  	 	12,745		  	 	 	 	 	 	122,518	
	 Total liabilities
	  	 	2,289,642		  	 	12,745		  	 	(12,491	) 	 	 	2,289,896	
					
	 Equity:
	  				  				  				 			
	 Stapled unitholders’ equity
	  	 	3,620,319		  	 	24		  				 	 	3,620,343	
	 Non-controlling
interests
	  	 	2,110		  	 	 	 	  	 	(24	) 	 	 	2,086	
	 Total liabilities and equity
	  	$	5,912,071	 	  	 	12,769		  	 	(12,515	) 	 	$	5,912,325	 

  

	(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.

  
 30    Granite REIT 2020 Third
Quarter Report 

																	
	Balance Sheet	 	As at December 31, 2019	 
	  	 	Granite REIT	 	 	Granite GP	 	 	Eliminations/
Adjustments	 	 	Granite REIT and
Granite GP
Combined	 
	 ASSETS
	 				 				 				 			
	 Non-current assets:
	 				 				 				 			
	 Investment properties
	 	$	4,457,899	 	 				 				 	$	4,457,899	 
	 Investment in Granite LP(1)
	 	 	—	 	 	 	21		 	 	(21	) 	 	 	—	 
	 Other non-current
assets
	 	 	24,216		 	 	 	 	 	 	 	 	 	 	24,216	
		 	 	4,482,115		 	 	21		 	 	(21	) 	 	 	4,482,115	
					
	 Current assets:
	 				 				 				 			
	 Other current assets
	 	 	23,144		 	 	20		 				 	 	23,164	
	 Intercompany receivable(2)
	 	 	—	 	 	 	11,828		 	 	(11,828	) 	 	 	—	 
	 Cash and cash equivalents
	 	 	298,385		 	 	292		 	 	 	 	 	 	298,677	
	 Total assets
	 	$	4,803,644	 	 	 	12,161		 	 	(11,849	) 	 	$	4,803,956	 
					
	 LIABILITIES AND EQUITY
	 				 				 				 			
	 Non-current liabilities:
	 				 				 				 			
	 Unsecured debt, net
	 	$	1,186,994	 	 				 				 	$	1,186,994	 
	
Other non-current liabilities
	 	 	383,763		 	 	 	 	 	 	 	 	 	 	383,763	
		 	 	1,570,757		 				 				 	 	1,570,757	
					
	 Current liabilities:
	 				 				 				 			
	 Intercompany payable(2)
	 	 	11,828		 				 	 	(11,828	) 	 	 	—	 
	 Other current liabilities
	 	 	72,949		 	 	12,140		 	 	 	 	 	 	85,089	
	 Total liabilities
	 	 	1,655,534		 	 	12,140		 	 	(11,828	) 	 	 	1,655,846	
					
	 Equity:
	 				 				 				 			
	 Stapled unitholders’ equity
	 	 	3,146,122		 	 	21		 				 	 	3,146,143	
	 Non-controlling
interests
	 	 	1,988		 	 	 	 	 	 	(21	) 	 	 	1,967	
	 Total liabilities and equity
	 	$	4,803,644	 	 	 	12,161		 	 	(11,849	) 	 	$	4,803,956	 

  

	(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.

  
 Granite REIT 2020 Third Quarter
Report    31 

																	
	Income Statement	 	Three Months Ended September 30, 2020	 
	  	 	Granite REIT	 	 	Granite GP	 	 	Eliminations/
Adjustments	 	 	Granite REIT and
Granite GP
Combined	 
	 Revenue
	 	$	87,900	 	 				 				 	$	87,900	
					
	 General and administrative expenses
	 	 	9,572		 				 				 	 	9,572	
	 Interest expense and other financing costs, net
	 	 	10,587		 				 				 	 	10,587	
	 Other costs and expenses, net
	 	 	10,921		 				 				 	 	10,921	
	 Share of (income) loss of Granite LP
	 	 	—	 	 	 	(1	) 	 	 	1		 	 	—	 
	 Fair value gains on investment properties, net
	 	 	(62,045	) 	 				 				 	 	(62,045	) 
	 Fair value gains on financial instruments, net
	 	 	(1,048	) 	 				 				 	 	(1,048	) 
	 Loss on sale of investment properties
	 	 	164		 	 	 	 	 	 	 	 	 	 	164	
	 Income before income taxes
	 	 	119,749		 	 	1		 	 	(1	) 	 	 	119,749	
	 Income tax expense
	 	 	14,513		 	 	 	 	 	 	 	 	 	 	14,513	
	 Net income
	 	 	105,236		 	 	1		 	 	(1	) 	 	 	105,236	
	 Less net income attributable to
non-controlling interests
	 	 	38		 	 	 	 	 	 	(1	) 	 	 	37	
	 Net income attributable to stapled unitholders
	 	$	105,198	 	 	 	1		 	 	—	 	 	$	105,199	

  

																	
	Income Statement	 	Three Months Ended September 30, 2019	 
	  	 	Granite REIT	 	 	Granite GP	 	 	Eliminations/
Adjustments	 	 	Granite REIT and
Granite GP
Combined	 
	 Revenue
	 	$	68,817	 	 				 				 	$	68,817	 
					
	 General and administrative expenses
	 	 	6,902		 				 				 	 	6,902	
	 Interest expense and other financing costs, net
	 	 	7,553		 				 				 	 	7,553	
	 Other costs and expenses, net
	 	 	7,055		 				 				 	 	7,055	
	 Share of (income) loss of Granite LP
	 	 	—	 	 	 	(1	) 	 	 	1		 	 	—	 
	 Fair value gains on investment properties, net
	 	 	(78,226	) 	 				 				 	 	(78,226	) 
	 Fair value gains on financial instruments, net
	 	 	(1,946	) 	 				 				 	 	(1,946	) 
	 Loss on sale of investment properties
	 	 	652		 	 	 	 	 	 	 	 	 	 	652	
	 Income before income taxes
	 	 	126,827		 	 	1		 	 	(1	) 	 	 	126,827	
	 Income tax expense
	 	 	12,199		 	 	 	 	 	 	 	 	 	 	12,199	
	 Net income
	 	 	114,628		 	 	1		 	 	(1	) 	 	 	114,628	
	 Less net income attributable to
non-controlling interests
	 	 	101		 	 	 	 	 	 	(1	) 	 	 	100	
	 Net income attributable to stapled unitholders
	 	$	114,527	 	 	 	1		 	 	—	 	 	$	114,528	 

  
 32    Granite REIT 2020 Third
Quarter Report 

																	
	Income Statement	 	Nine Months Ended September 30, 2020	 
	  	 	Granite REIT	 	 	Granite GP	 	 	Eliminations/
Adjustments	 	 	Granite REIT and
Granite GP
Combined	 
	 Revenue
	 	$	246,958	 	 				 				 	$	246,958	 
					
	 General and administrative expenses
	 	 	24,285		 				 				 	 	24,285	
	 Interest expense and other financing costs
	 	 	24,995		 				 				 	 	24,995	
	 Other costs and expenses, net
	 	 	27,423		 				 				 	 	27,423	
	 Share of (income) loss of Granite LP
	 	 	—	 	 	 	(3	) 	 	 	3		 	 	—	 
	 Fair value gains on investment properties, net
	 	 	(132,586	) 	 				 				 	 	(132,586	) 
	 Fair value losses on financial instruments, net
	 	 	4,737		 				 				 	 	4,737	
	 Loss on sale of investment properties
	 	 	164		 	 	 	 	 	 	 	 	 	 	164	
	 Income before income taxes
	 	 	297,940		 	 	3		 	 	(3	) 	 	 	297,940	
	 Income tax expense
	 	 	35,650		 	 	 	 	 	 	 	 	 	 	35,650	
	 Net income
	 	 	262,290		 	 	3		 	 	(3	) 	 	 	262,290	
	 Less net income attributable to
non-controlling interests
	 	 	141		 	 	 	 	 	 	(3	) 	 	 	138	
	 Net income attributable to stapled unitholders
	 	$	262,149	 	 	 	3		 	 	—	 	 	$	262,152	 

  

																	
	Income Statement	 	Nine Months Ended September 30, 2019	 
	  	 	Granite REIT	 	 	Granite GP	 	 	Eliminations/
Adjustments	 	 	Granite REIT and
Granite GP
Combined	 
	 Revenue
	 	$	200,147	 	 				 				 	$	200,147	 
					
	 General and administrative expenses
	 	 	23,412		 				 				 	 	23,412	
	 Interest expense and other financing costs
	 	 	22,906		 				 				 	 	22,906	
	 Other costs and expenses, net
	 	 	19,684		 				 				 	 	19,684	
	 Share of (income) loss of Granite LP
	 	 	—	 	 	 	(3	) 	 	 	3		 	 	—	 
	 Fair value gains on investment properties, net
	 	 	(197,876	) 	 				 				 	 	(197,876	) 
	 Fair value gains on financial instruments, net
	 	 	(190	) 	 				 				 	 	(190	) 
	 Loss on sale of investment properties
	 	 	2,035		 	 	 	 	 	 	 	 	 	 	2,035	
	 Income before income taxes
	 	 	330,176		 	 	3		 	 	(3	) 	 	 	330,176	
	 Income tax expense
	 	 	38,543		 	 	 	 	 	 	 	 	 	 	38,543	
	 Net income
	 	 	291,633		 	 	3		 	 	(3	) 	 	 	291,633	
	 Less net income attributable to
non-controlling interests
	 	 	185		 	 	 	 	 	 	(3	) 	 	 	182	
	 Net income attributable to stapled unitholders
	 	$	291,448	 	 	 	3		 	 	—	 	 	$	291,451	 

  
 Granite REIT 2020 Third Quarter
Report    33 

																	
	Statement of Cash Flows	 	Three Months Ended September 30, 2020	 
	  	 	Granite REIT	 	 	Granite GP	 	 	Eliminations/
Adjustments	 	 	Granite REIT and
Granite GP
Combined	 
	 OPERATING ACTIVITIES
	 				 				 				 			
					
	 Net income
	 	$	105,236	 	 	 	1		 	 	(1	) 	 	$	105,236	 
	 Items not involving current cash flows
	 	 	(48,497	) 	 	 	(1	) 	 	 	1		 	 	(48,497	) 
	 Changes in working capital balances
	 	 	10,254		 	 	134		 	 	—	 	 	 	10,388	
	 Other operating activities
	 	 	(1,017	) 	 	 	 	 	 	 	 	 	 	 	(1,017	) 
	 Cash provided by operating activities
	 	 	65,976		 	 	134		 	 	—	 	 	 	66,110	
	 INVESTING ACTIVITIES
	 				 				 				 			
	 Property acquisitions
	 	 	(114,713	) 	 				 				 	 	(114,713	) 
	 Proceeds from disposals, net
	 	 	35,468		 				 				 	 	35,468	
	 Investment property capital additions
	 				 				 				 			
	 — Maintenance or improvements
	 	 	(1,431	) 	 				 				 	 	(1,431	) 
	 — Developments or expansions
	 	 	(7,830	) 	 				 				 	 	(7,830	) 
	 — Costs to complete acquired property
	 	 	(2,012	) 	 				 				 	 	(2,012	) 
	 Other investing activities
	 	 	(5,554	) 	 	 	 	 	 	 	 	 	 	 	(5,554	) 
	 Cash used in investing activities
	 	 	(96,072	) 	 	 	—	 	 	 	—	 	 	 	(96,072	) 
	 FINANCING ACTIVITIES
	 				 				 				 			
	 Distributions paid
	 	 	(41,994	) 	 				 				 	 	(41,994	) 
	 Other financing activities
	 	 	(1,790	) 	 	 	 	 	 	 	 	 	 	 	(1,790	) 
	 Cash used in financing activities
	 	 	(43,784	) 	 	 	—	 	 	 	—	 	 	 	(43,784	) 
	 Effect of exchange rate changes
	 	 	(3,825	) 	 	 	 	 	 	 	 	 	 	 	(3,825	) 
	 Net (decrease) increase in cash and cash equivalents during
the period
	 	$	(77,705	) 	 	 	134		 	 	—	 	 	$	(77,571	) 

  

																	
	Statement of Cash Flows	 	Three Months Ended September 30, 2019	 
	  	 	Granite REIT	 	 	Granite GP	 	 	Eliminations/
Adjustments	 	 	Granite REIT and
Granite GP
Combined	 
	 OPERATING ACTIVITIES
	 				 				 				 			
					
	 Net income
	 	$	114,628	 	 	 	1		 	 	(1	) 	 	$	114,628	 
	 Items not involving current cash flows
	 	 	(66,750	) 	 	 	(1	) 	 	 	1		 	 	(66,750	) 
	 Changes in working capital balances
	 	 	(5,660	) 	 	 	371		 	 	—	 	 	 	(5,289	) 
	 Other operating activities
	 	 	207		 	 	 	 	 	 	 	 	 	 	207	
	 Cash provided by operating activities
	 	 	42,425		 	 	371		 	 	—	 	 	 	42,796	
	 INVESTING ACTIVITIES
	 				 				 				 			
	 Property acquisitions
	 	 	(51,570	) 	 				 				 	 	(51,570	) 
	 Proceeds from disposals, net
	 	 	12,610		 				 				 	 	12,610	
	 Investment property capital additions
	 				 				 				 			
	 — Maintenance or improvements
	 	 	(847	) 	 				 				 	 	(847	) 
	 — Developments or expansions
	 	 	(7,203	) 	 				 				 	 	(7,203	) 
	 Acquisition deposits
	 	 	(1,325	) 	 				 				 	 	(1,325	) 
	 Other investing activities
	 	 	(44	) 	 	 	 	 	 	 	 	 	 	 	(44	) 
	 Cash used in investing activities
	 	 	(48,379	) 	 	 	—	 	 	 	—	 	 	 	(48,379	) 
	 FINANCING ACTIVITIES
	 				 				 				 			
	 Distributions paid
	 	 	(34,564	) 	 				 				 	 	(34,564	) 
	 Other financing activities
	 	 	(659	) 	 	 	 	 	 	 	 	 	 	 	(659	) 
	 Cash used in financing activities
	 	 	(35,223	) 	 	 	—	 	 	 	—	 	 	 	(35,223	) 
	 Effect of exchange rate changes
	 	 	(642	) 	 	 	 	 	 	 	 	 	 	 	(642	) 
	 Net (decrease) increase in cash and cash equivalents during
the period
	 	$	(41,819	) 	 	 	371		 	 	—	 	 	$	(41,448	) 

  
 34    Granite REIT 2020 Third
Quarter Report 

																	
	Statement of Cash Flows	 	Nine Months Ended September 30, 2020	 
	  	 	Granite REIT	 	 	Granite GP	 	 	Eliminations/
Adjustments	 	 	Granite REIT and
Granite GP
Combined	 
	 OPERATING ACTIVITIES
	 				 				 				 			
					
	 Net income
	 	$	262,290	 	 	 	3		 	 	(3	) 	 	$	262,290	 
	 Items not involving operating cash flows
	 	 	(91,827	) 	 	 	(3	) 	 	 	3		 	 	(91,827	) 
	 Changes in working capital balances
	 	 	12,068		 	 	(52	) 	 				 	 	12,016	
	 Other operating activities
	 	 	3,421		 	 	 	 	 	 	 	 	 	 	3,421	
	 Cash provided by (used in) operating activities
	 	 	185,952		 	 	(52	) 	 	 	—	 	 	 	185,900	
	 INVESTING ACTIVITIES
	 				 				 				 			
	 Property acquisitions
	 	 	(565,346	) 	 				 				 	 	(565,346	) 
	 Proceeds from disposals, net
	 	 	35,468		 				 				 	 	35,468	
	 Investment property capital additions
	 				 				 				 			
	 — Maintenance or improvements
	 	 	(4,749	) 	 				 				 	 	(4,749	) 
	 — Developments or expansions
	 	 	(33,433	) 	 				 				 	 	(33,433	) 
	 — Costs to complete acquired property
	 	 	(8,603	) 	 				 				 	 	(8,603	) 
	 Other investing activities
	 	 	303		 	 	 	 	 	 	 	 	 	 	303	
	 Cash used in investing activities
	 	 	(576,360	) 	 	 	—	 	 	 	—	 	 	 	(576,360	) 
	 FINANCING ACTIVITIES
	 				 				 				 			
	 Distributions paid
	 	 	(120,134	) 	 				 				 	 	(120,134	) 
	 Other financing activities
	 	 	747,994		 	 	 	 	 	 	 	 	 	 	747,994	
	 Cash provided by financing activities
	 	 	627,860		 	 	—	 	 	 	—	 	 	 	627,860	
	 Effect of exchange rate changes
	 	 	3,600		 	 	 	 	 	 	 	 	 	 	3,600	
	 Net increase (decrease) in cash and cash equivalents during
the period
	 	$	241,052	 	 	 	(52	) 	 	 	—	 	 	$	241,000	 

  

																	
	Statement of Cash Flows	 	Nine Months Ended September 30, 2019	 
	  	 	Granite REIT	 	 	Granite GP	 	 	Eliminations/
Adjustments	 	 	Granite REIT and
Granite GP
Combined	 
	 OPERATING ACTIVITIES
	 				 				 				 			
					
	 Net income
	 	$	291,633	 	 	 	3		 	 	(3	) 	 	$	291,633	 
	 Items not involving operating cash flows
	 	 	(156,014	) 	 	 	(3	) 	 	 	3		 	 	(156,014	) 
	 Changes in working capital balances
	 	 	(2,288	) 	 	 	(209	) 	 				 	 	(2,497	) 
	 Other operating activities
	 	 	208		 	 	 	 	 	 	 	 	 	 	208	
	 Cash provided by (used in) operating activities
	 	 	133,539		 	 	(209	) 	 	 	—	 	 	 	133,330	
	 INVESTING ACTIVITIES
	 				 				 				 			
	 Property acquisitions
	 	 	(469,254	) 	 				 				 	 	(469,254	) 
	 Proceeds from disposals, net
	 	 	38,238		 				 				 	 	38,238	
	 Investment property capital additions
	 				 				 				 			
	 — Maintenance or improvements
	 	 	(2,632	) 	 				 				 	 	(2,632	) 
	 — Developments or expansions
	 	 	(11,884	) 	 				 				 	 	(11,884	) 
	 Acquisition deposits
	 	 	(1,325	) 	 				 				 	 	(1,325	) 
	 Other investing activities
	 	 	16,713		 	 	 	 	 	 	 	 	 	 	16,713	
	 Cash used in investing activities
	 	 	(430,144	) 	 	 	—	 	 	 	—	 	 	 	(430,144	) 
	 FINANCING ACTIVITIES
	 				 				 				 			
	 Distributions paid
	 	 	(100,187	) 	 				 				 	 	(100,187	) 
	 Other financing activities
	 	 	204,945		 	 	 	 	 	 	 	 	 	 	204,945	
	 Cash provided by financing activities
	 	 	104,758		 	 	—	 	 	 	—	 	 	 	104,758	
	 Effect of exchange rate changes
	 	 	(10,776	) 	 	 	 	 	 	 	 	 	 	 	(10,776	) 
	 Net decrease in cash and cash equivalents during the
period
	 	$	(202,623	) 	 	 	(209	) 	 	 	—	 	 	$	(202,832	) 

  
 Granite REIT 2020 Third Quarter
Report    35 

	
	 18. 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 September 30, 2020, the Trust’s contractual commitments totaled $65.9 million and comprised of
construction and development projects of $54.1 million and the remaining construction costs associated with the property in Tilburg, Netherlands acquired in July 2020 for $11.8 million
(€7.6 million) (note 3). 
 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. 
  

	
	 19. SUBSEQUENT
EVENTS

 (a)    On October 16, 2020, the Trust declared monthly distributions for October 2020 of
$14.0 million (note 11). 
 (b)    On October 23, 2020, the Trust disposed of one property located in Barcelona, Spain
for gross proceeds of $7.8 million (€5.0 million). 
 (c)    On
October 23, 2020, the Trust agreed to acquire an income-producing property located in Atlanta, Georgia, for approximately $107 million (US$80.3 million). The acquisition is subject to customary closing conditions and is expected to close
in the fourth quarter of 2020. 

  
 36    Granite REIT 2020 Third
Quarter Report

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