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RioCan Announces Second Quarter 2022 Results - Portfolio Quality Delivers Continued Growth

·36-min read
RioCan Real Estate Investment Trust
RioCan Real Estate Investment Trust
  • Net income of $78.5 million and FFO per unit 1 of $0.43

  • 1.5 million sq. ft. of new and renewed leases with renewal leasing spread of 11.2% and blended spread of 10.5%

TORONTO, Aug. 08, 2022 (GLOBE NEWSWIRE) -- RioCan Real Estate Investment Trust (“RioCan" or the "Trust”) (TSX: REI.UN) announced today its financial results for the three and six months ended June 30, 2022 (the "Second Quarter").

“Our strong results for the quarter reflect our capacity to generate quality income and growth in any environment,” said Jonathan Gitlin, President and CEO of RioCan. “Focused on our strategy to drive growth and create value over the long-term, we will continuously evolve our portfolio to meet ever-changing market demands with more essential and resilient tenants. The quality and positioning of our portfolio combined with our balance sheet strength will continue to drive performance. As we enter into the second half of the year, we remain confident in our growth trajectory and the ongoing demand for the quality real estate that defines RioCan.”

 

Three months ended June 30

 

Six months ended June 30

(in millions, except where otherwise noted, and per unit values)

 

 

2022

 

 

 

2021

 

 

 

2022

 

 

 

2021

Financial Highlights

 

 

 

 

 

 

 

 

 

 

 

Net income

 

$

78.5

 

 

$

145.3

 

 

$

238.5

 

 

$

252.0

Weighted average Units outstanding - diluted (in thousands)

 

 

308,537

 

 

 

317,882

 

 

 

309,324

 

 

 

317,771

FFO 1

 

$

131.7

 

 

$

127.5

 

 

$

262.2

 

 

$

233.6

FFO per unit - diluted 1

 

$

0.43

 

 

$

0.40

 

 

$

0.85

 

 

$

0.73

 

 

 

 

 

 

 

 

 

 

 

 

FFO per Unit and Net Income

  • FFO per unit of $0.43 for the Second Quarter was $0.03 per unit or 7% higher than the same period last year. Strong operational performance drove Same Property NOI1 growth to 6.2%, which contributed $0.03 to the increase in FFO per unit. Higher residential NOI, residential inventory gains and fee income combined contributed another $0.03 of incremental FFO per unit. These increases were partially offset by the reduction in FFO from assets sold and restructuring costs. The FFO Adjusted per unit, which excludes the impact of the restructuring costs, was $0.44 for the quarter. FFO Payout Ratio1 for the quarter of 57.3% was in-line with the long-term target range of 55% to 65%.

  • Net income for the Second Quarter was $78.5 million, lower than the comparable period last year by $66.8 million, as the items described above were offset by a net loss related to the fair value of investment properties of $42.3 million compared to a $22.9 million fair value gain in the same period last year. The average portfolio capitalization rate increased 8 basis points, the impact of which was partially offset by higher stabilized NOI, as well as gains in certain properties under development as projects advanced.

  • Our major market, necessity-based portfolio continued to prove resilient, generating strong operating results despite the broader macro-economic volatility during the quarter. Our FFO Payout Ratio of 57.3%, ample Liquidity1 of $1.4 billion, large Unencumbered Asset1 pool of $9.2 billion, which can be used to obtain secured financing, low proportion of floating rate debt at 8.0% of total debt and staggered debt maturities all contribute to the Trust's financial flexibility.

  • For 2022, RioCan reaffirms FFO per unit growth guidance of 5% to 7%. Development Spend for 2022 is now estimated to be in the $425 million to $475 million range, down from $475 million to $525 million in the previous guidance due to minor timing shifts.

1.

A non-GAAP measurement. For definitions, reconciliations and the basis of presentation of RioCan's non-GAAP measures, refer to the Basis of Presentation and Non-GAAP Measures section in this News Release.

Operation Highlights

 

Three months ended June 30

 

Six months ended June 30

 

 

2022

 

 

 

2021

 

 

 

2022

 

 

 

2021

 

 

 

 

 

 

 

 

 

 

 

 

 

Operation Highlights (i)

 

 

 

 

 

 

 

 

 

 

 

Occupancy - committed (ii)

 

97.2

%

 

 

96.1

%

 

 

97.2

%

 

 

96.1

%

Blended leasing spread

 

10.5

%

 

 

5.4

%

 

 

9.8

%

 

 

6.5

%

New leasing spread

 

6.8

%

 

 

9.2

%

 

 

11.1

%

 

 

11.8

%

Renewal leasing spread

 

11.2

%

 

 

4.2

%

 

 

9.3

%

 

 

4.5

%

 

 

 

 

 

 

 

 

 

 

 

 


(i)

Includes commercial portfolio only.

(ii)

Information presented as at respective periods then ended.

  • Same Property NOI grew by 6.2% in the Second Quarter when compared to the same period last year and was driven by occupancy gains, rent growth and a lower pandemic-related provision partially offset by certain 2021 favourable items which did not recur in 2022. Adjusted Same Property NOI1 growth was 3.0% after adjusting predominantly for the impact of the pandemic-related provision and legal and property tax settlements.

  • Committed occupancy improved for the sixth consecutive quarter and returned to the pre-pandemic level of 97.2%. Increases of 110 basis points when compared to the same period last year and 20 basis points when compared to Q1 2022, were driven by improved retail committed occupancy, which currently stands at 97.6%.

  • New and renewed leases generated a blended leasing spread of 10.5% and the volume of 1.5 million square feet (at 100% ownership interest) was up 9.4% over the same period last year. Renewed leases of 1.1 million square feet representing a 93.3% retention ratio were completed at leasing spreads of 11.2%. New leasing of 0.4 million square feet was completed at new leasing spreads of 6.8%.

  • Our strong and stable tenants, which are largely comprised of national, necessity-based retail tenants represent 85.7% of our portfolio measured as a percentage of annualized net rent.

  • Leasing momentum at The Well™ continued into Q2 2022 and accounted for the majority of new property under development leases with retail leasing at 67% completed or 81% including leases nearing finalization and in advanced negotiations. For the office component, only 30,000 of the 1.2 million square feet (at 100% ownership interest) remains to be leased. Achieved average rent per square foot has exceeded pro forma.

  • Given recent inflationary pressures, the resulting increased asset replacement costs are expected to limit an already tight supply of quality retail assets and exacerbate a supply/demand imbalance. RioCan's well-positioned assets will benefit from demand shifting in their favour, which is expected to lead to positive tension in lease negotiations and ultimately rising rents.

1.

A non-GAAP measurement. For definitions, reconciliations and the basis of presentation of RioCan's non-GAAP measures, refer to the Basis of Presentation and Non-GAAP Measures section in this News Release. 

RioCan Living Update

 

 

 

 

 

 

 

 

 

 

 

 

 

Residential Rental Buildings in Operation

 

Number of
total units

 

 

Date of
lease launch

 

 

% of leased
units as of
August 8, 2022

 

 

% of leased
units as of
May 9, 2022

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stabilized(i)

 

996

 

 

December 2018 to
December 2020

 

 

96.7

%

 

 

96.3

%

 

In lease-up

 

 

 

 

 

 

 

 

 

 

 

 

Pivot (Yonge Sheppard Centre, Toronto)

 

361

 

 

October 2020

 

 

97.0

%

 

 

91.4

%

 

Litho. (Toronto)

 

210

 

 

July 2021

 

 

90.0

%

 

 

75.7

%

 

Latitude (Ottawa)

 

209

 

 

July 2021

 

 

87.5

%

 

 

62.5

%

 

Strada (Toronto)

 

61

 

 

November 2021

 

 

98.4

%

 

 

62.3

%

 

Luma (Ottawa) (ii)

 

168

 

 

March 2022

 

 

36.3

%

 

 

11.9

%

 

Rhythm (Ottawa) (iii)

 

214

 

 

June 2022

 

 

3.7

%

 

 

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 


(i)

A property is considered to have reached stabilization upon the earlier of (i) achieving 95% occupancy or (ii) 24 months after first occupancy as of the quarter end reporting date. Stabilized properties include eCentral, Frontier, Brio, and Market Phase One which was acquired on February 8, 2022. Units shown in the table above are at 100% ownership interest.

(ii)

Luma was substantially complete as of August 8, 2022 and had some early move-ins during Q2 2022.

(iii)

Substantial completion of Rhythm is expected in Q4 2022. Pre-leasing commenced in Q2 2022.

  • As of August 8, 2022, the RioCan Living™ residential rental portfolio is comprised of 2,005 purpose-built completed units (at 100% ownership interest) across nine buildings located in Toronto, Montreal, Ottawa and Calgary. In the Second Quarter, the leasing velocity was very strong across stabilized buildings and buildings in lease-up. An additional 214 units at Rhythm™ are scheduled to be completed in Q4 2022. The 592 units at FourFifty The Well™ will be completed in phases with first move-ins scheduled to commence in late-2023 and ongoing lease-up is expected to occur through to early 2024.

  • RioCan Living also oversees condominium and townhouse developments that generated residential inventory gains of $5.1 million in the Second Quarter.

  • As of August 8, 2022, 2,627 condominium and townhouse units (at 100% ownership interest) are either under construction or in the process of interim closing and an additional 451 units are in pre-sale. Of RioCan’s five active construction projects, 95% of the total units have been sold while 98% of our pro-forma revenues have been achieved.

Development Highlights

 

Three months ended June 30

 

Six months ended June 30

(in millions except square feet)

 

 

2022

 

 

 

2021

 

 

 

2022

 

 

 

2021

 

 

 

 

 

 

 

 

 

 

 

 

Development Highlights

 

 

 

 

 

 

 

 

 

 

 

Development Completions - sq. ft. in thousands

 

 

69.0

 

 

 

30.0

 

 

 

214.0

 

 

 

60.0

Development Spending (i)1

 

$

139.6

 

 

$

118.2

 

 

$

231.5

 

 

$

205.9

Under Active Development - sq. ft. in thousands (ii) (iii)

 

 

2,320.0

 

 

 

2,419.0

 

 

 

2,320.0

 

 

 

2,419.0

 

 

 

 

 

 

 

 

 

 

 

 


(i)

Effective Q1 2022, the definition of total Development Spending was revised to include RioCan's share of Development Spending from equity-accounted joint ventures, accordingly, the comparative period has been restated.

(ii)

Information presented as at the respective periods then ended and includes properties under development and residential inventory.

(iii) 

As at June 30, 2022, excludes a total of 0.5 million square feet of completed phases and includes 0.8 million square feet of residential inventory (June 30, 2021 - 1.4 million square feet and 0.5 million square feet, respectively).

  • RioCan's in-house development team delivered 0.2 million square feet of completions during the first half of 2022. The total embedded development potential within the Trust's portfolio is 42.4 million square feet, of which 23.7 million square feet are currently zoned or have submitted applications.

  • Our development pipeline includes 16.0 million square feet of permitted projects, of which 2.3 million square feet is currently under development. Construction at our largest development project, The Well, continued to progress during the Second Quarter. Approximately 867,000 square feet (at 100% ownership interest), is undergoing tenant fixturing and three tenants are now operating in their respective units. Cash rents remain on track to commence in the second half of 2022.

  • The Trust's Development Spending target for 2022 is estimated to be in the $425 million to $475 million range, excluding acquisitions for purposes of development. The decrease in the estimated annual development spending range for 2022 from that previously reported is mainly a result of minor construction delays caused by a series of work stoppages by various trades. In 2022, the Trust expects to deliver projects with costs of $625 million to $675 million, the largest amount of annual cost transfers since the inception of this development program.

1.

A non-GAAP measurement. For definitions, reconciliations and the basis of presentation of RioCan's non-GAAP measures, refer to the Basis of Presentation and Non-GAAP Measures section in this News Release.

Balance Sheet Strength

(in millions except percentages)
As at

 

June 30, 2022

 

December 31, 2021

 

 

 

 

 

 

 

Balance Sheet Strength Highlights

 

 

 

 

 

 

Total assets

 

 

$

15,474

 

 

$

15,177

Total debt

 

 

$

6,878

 

 

$

6,611

Liquidity (i) 1

 

 

$

1,440

 

 

$

1,010

Adjusted Debt to Adjusted EBITDA (i) 1

 

 

9.41x

 

 

9.59x

Total Adjusted Debt to Total Adjusted Assets (i) 1

 

 

 

45.0%

 

 

 

43.9%

Ratio of Unsecured Debt and Secured Debt (i) 1

 

 

58.7% / 41.3%

 

 

59.4% / 40.6%

Unencumbered Assets (i) 1

 

 

$

9,205

 

 

$

9,392

Unencumbered Assets to Unsecured Debt (i) 1

 

 

 

219%

 

 

 

231%

 

 

 

 

 

 

 

(i)   At RioCan's proportionate share.

  • The Trust had $1.4 billion of Liquidity in the form of $1.0 billion undrawn revolving lines of credit, $0.4 billion undrawn construction lines and other bank loans and $0.1 billion cash and cash equivalents.

  • RioCan’s unencumbered asset pool was $9.2 billion, which can be used to obtain secured financing to provide additional liquidity, generated 62.6% of Annual Normalized NOI1 and provided 2.19x coverage over Unsecured Debt1.

  • Adjusted Debt to Adjusted EBITDA1 was 9.41x on a proportionate share basis, as at June 30, 2022, compared to 9.59x as at the end of 2021. The decrease was primarily due to higher Adjusted EBITDA partially offset by higher average Total Adjusted Debt balances.

  • The Trust's Total Adjusted Debt to Total Adjusted Assets at RioCan's proportionate share increased from December 31, 2021 mainly due to higher Total Adjusted Debt resulting from the timing of debt draws for capital deployment activities.

1.

A non-GAAP measurement. For definitions, reconciliations and the basis of presentation of RioCan's non-GAAP measures, refer to the Basis of Presentation and Non-GAAP Measures section in this News Release.  

Capital Management Update

  • The Trust has $250.0 million of bond forward contracts remaining as at June 30, 2022 with an effective 7-year government of Canada bond yield of 1.46% to hedge its exposure to changes in the risk-free interest rates on anticipated refinancings.

  • On June 9, 2022, Standard and Poor's revised its Outlook on RioCan from Negative to Stable and affirmed its Issuer Credit Rating of BBB. The Stable Outlook reflects improvements in the Trust’s operating performance and credit-protection measures over the past year, and expected improvement in credit metrics from development completions supported by sound operating performance despite macro-economic headwinds.

  • On April 18, 2022, RioCan issued $250.0 million, Series AF senior unsecured debentures with a 7-year term. Inclusive of the benefit of bond forward hedges, the all-in interest rate of the Series AF debentures is 3.829%. This issuance provides additional liquidity to RioCan to support its strategy, pursue opportunities and manage potential risks.

  • Pursuant to its current Normal Course Issuer Bid, the Trust acquired and cancelled 6.0 million units at a weighted average purchase price of $21.52 per unit, for a total cost of $128.8 million during the Second Quarter. This is in additional to the 8.0 million units repurchased in Q4 2021.

Investing and Capital Recycling

  • As of August 8, 2022, closed, firm or conditional dispositions totaled $375.8 million at a weighted average capitalization rate of 6.7%, including $123.0 million of completed dispositions during the first half of 2022. These dispositions include several non-core and secondary market assets, which improves our portfolio quality while bringing in capital that can be recycled into more productive uses.

  • Total Acquisitions1 including land assemblies and properties acquired within equity-accounted joint ventures were $187.8 million on a year-to-date basis.

1.

A non-GAAP measurement. For definitions, reconciliations and the basis of presentation of RioCan's non-GAAP measures, refer to the Basis of Presentation and Non-GAAP Measures section in this News Release.

Conference Call and Webcast

Interested parties are invited to participate in a conference call with management on Tuesday, August 9, 2022 at 10:00 a.m. (ET). Participants will be required to identify themselves and the organization on whose behalf they are participating.

To access the conference call, click on the following link to register at least ten minutes prior to the scheduled start of the call: https://ige.netroadshow.com/registration/q4inc/11247/riocan-real-estate-investment-trust-second-quarter-earnings-conference-call-and-webcast/. Participants who pre-register at any time prior to the call will receive an email with dial-in credentials including login passcode and PIN to gain immediate access to the live call. Those that are unable to pre-register may dial-in for operator assistance by calling 1-833-950-0062 and entering the access code: 185791.

For those unable to participate in the live mode, a replay will be available at 1-866-813-9403 with access code 294296.

To access the simultaneous webcast, visit RioCan’s website at http://investor.riocan.com/investor-relations/events-and-presentations/ and click on the link for the webcast.

About RioCan

RioCan is one of Canada’s largest real estate investment trusts. RioCan owns, manages and develops retail-focused, increasingly mixed-use properties located in prime, high-density transit-oriented areas where Canadians want to shop, live and work. As at June 30, 2022, our portfolio is comprised of 202 properties with an aggregate net leasable area of approximately 35.9 million square feet (at RioCan's interest) including office, residential rental and 12 development properties. To learn more about us, please visit www.riocan.com.

Basis of Presentation and Non-GAAP Measures

All figures included in this News Release are expressed in Canadian dollars unless otherwise noted. RioCan’s unaudited interim condensed consolidated financial statements ("Condensed Consolidated Financial Statements") are prepared in accordance with International Financial Reporting Standards (IFRS). Financial information included within this News Release does not contain all disclosures required by IFRS, and accordingly should be read in conjunction with the Trust's Condensed Consolidated Financial Statements and MD&A for the three and six months ended June 30, 2022, which are available on RioCan's website at www.riocan.com and on SEDAR at www.sedar.com.

Consistent with RioCan’s management framework, management uses certain financial measures to assess RioCan’s financial performance, which are not in accordance with generally accepted accounting principles (GAAP) under IFRS. Funds From Operations (“FFO”), FFO per unit, FFO Adjusted per unit, Net Operating Income ("NOI"), Same Property NOI, Development Spending, Total Acquisitions, Liquidity, Adjusted Debt to Adjusted EBITDA, Total Adjusted Debt to Total Adjusted Assets, RioCan's Proportionate Share, Ratio of Unsecured Debt to Total Contractual Debt, Ratio of Secured Debt to Total Contractual Debt, Unencumbered Assets to Unsecured Debt and Percentage of Normalized NOI Generated from Unencumbered Assets, as well as other measures that may be discussed elsewhere in this News Release, do not have a standardized definition prescribed by IFRS and are, therefore, unlikely to be comparable to similar measures presented by other reporting issuers. RioCan supplements its IFRS measures with these Non-GAAP measures to aid in assessing the Trust’s underlying performance and reports these additional measures so that investors may do the same. Non-GAAP measures should not be considered as alternatives to net income or comparable metrics determined in accordance with IFRS as indicators of RioCan’s performance, liquidity, cash flow, and profitability. For full definitions of these measures, please refer to the "Non-GAAP Measures” section in RioCan’s MD&A for three and six months ended June 30, 2022.

The reconciliations for non-GAAP measures included in this News Release are outlined as follows:

RioCan's Proportionate Share

The following table reconciles the consolidated balance sheet from IFRS to RioCan's proportionate share basis as at June 30, 2022 and December 31, 2021:

As at

June 30, 2022

December 31, 2021

(in thousands)

IFRS basis

Equity-
accounted
investments

RioCan's
proportionate
share

IFRS basis

Equity-
accounted
investments

RioCan's
proportionate
share

Assets

 

 

 

 

 

 

Investment properties

$

14,113,109

$

409,394

 

$

14,522,503

$

14,021,338

$

409,794

 

$

14,431,132

Equity-accounted investments

 

368,277

 

(368,277

)

 

 

327,335

 

(327,335

)

 

Mortgages and loans receivable

 

242,127

 

 

 

242,127

 

237,790

 

 

 

237,790

Residential inventory

 

272,520

 

202,182

 

 

474,702

 

217,043

 

121,291

 

 

338,334

Assets held for sale

 

96,800

 

 

 

96,800

 

47,240

 

 

 

47,240

Receivables and other assets

 

309,025

 

36,150

 

 

345,175

 

248,959

 

35,367

 

 

284,326

Cash and cash equivalents

 

71,864

 

8,101

 

 

79,965

 

77,758

 

9,113

 

 

86,871

Total assets

$

15,473,722

$

287,550

 

$

15,761,272

$

15,177,463

$

248,230

 

$

15,425,693

 

 

 

 

 

 

 

Liabilities

 

 

 

 

 

 

Debentures payable

$

3,240,688

$

 

$

3,240,688

$

2,990,692

$

 

$

2,990,692

Mortgages payable

 

2,387,532

 

166,745

 

 

2,554,277

 

2,334,016

 

166,368

 

 

2,500,384

Lines of credit and other bank loans

 

1,249,496

 

93,079

 

 

1,342,575

 

1,285,910

 

48,049

 

 

1,333,959

Accounts payable and other liabilities

 

649,791

 

27,726

 

 

677,517

 

655,501

 

33,813

 

 

689,314

Total liabilities

$

7,527,507

$

287,550

 

$

7,815,057

$

7,266,119

$

248,230

 

$

7,514,349

 

 

 

 

 

 

 

Equity

 

 

 

 

 

 

Unitholders’ equity

 

7,946,215

 

 

 

7,946,215

 

7,911,344

 

 

 

7,911,344

Total liabilities and equity

$

15,473,722

$

287,550

 

$

15,761,272

$

15,177,463

$

248,230

 

$

15,425,693


The following tables reconcile the consolidated statements of income from IFRS to RioCan's proportionate share basis for the three and six months ended June 30, 2022 and 2021:

 

Three months ended June 30, 2022

Three months ended June 30, 2021

(in thousands)

IFRS basis

 

Equity-
accounted
investments

 

RioCan's
proportionate
share

 

IFRS basis

 

Equity-
accounted
investments

 

RioCan's
proportionate
share

 

Revenue

 

 

 

 

 

 

Rental revenue

$

267,302

 

$

7,363

 

$

274,665

 

$

265,846

 

$

6,807

 

$

272,653

 

Residential inventory sales

 

35,005

 

 

 

 

35,005

 

 

28,107

 

 

1,860

 

 

29,967

 

Property management and other service fees

 

6,112

 

 

 

 

6,112

 

 

3,731

 

 

 

 

3,731

 

 

 

308,419

 

 

7,363

 

 

315,782

 

 

297,684

 

 

8,667

 

 

306,351

 

Operating costs

 

 

 

 

 

 

Rental operating costs

 

 

 

 

 

 

Recoverable under tenant leases

 

92,129

 

 

661

 

 

92,790

 

 

89,127

 

 

498

 

 

89,625

 

Non-recoverable costs

 

5,521

 

 

575

 

 

6,096

 

 

10,693

 

 

723

 

 

11,416

 

Residential inventory cost of sales

 

29,857

 

 

 

 

29,857

 

 

26,059

 

 

649

 

 

26,708

 

 

 

127,507

 

 

1,236

 

 

128,743

 

 

125,879

 

 

1,870

 

 

127,749

 

Operating income

 

180,912

 

 

6,127

 

 

187,039

 

 

171,805

 

 

6,797

 

 

178,602

 

Other income (loss)

 

 

 

 

 

 

Interest income

 

4,885

 

 

574

 

 

5,459

 

 

3,325

 

 

562

 

 

3,887

 

Income from equity-accounted investments

 

1,165

 

 

(1,165)

 

 

 

 

4,971

 

 

(4,971)

 

 

 

Fair value (loss) gain on investment properties, net

 

(42,270)

 

 

(3,476)

 

 

(45,746)

 

 

22,929

 

 

(695)

 

 

22,234

 

Investment and other income (loss)

 

(1,379)

 

 

(149)

 

 

(1,528)

 

 

1,513

 

 

197

 

 

1,710

 

 

 

(37,599)

 

 

(4,216)

 

 

(41,815)

 

 

32,738

 

 

(4,907)

 

 

27,831

 

Other expenses

 

 

 

 

 

 

Interest costs, net

 

43,659

 

 

1,807

 

 

45,466

 

 

42,838

 

 

1,829

 

 

44,667

 

General and administrative

 

16,400

 

 

16

 

 

16,416

 

 

11,699

 

 

17

 

 

11,716

 

Internal leasing costs

 

2,825

 

 

 

 

2,825

 

 

2,767

 

 

 

 

2,767

 

Transaction and other costs

 

1,517

 

 

88

 

 

1,605

 

 

2,272

 

 

44

 

 

2,316

 

 

 

64,401

 

 

1,911

 

 

66,312

 

 

59,576

 

 

1,890

 

 

61,466

 

Income before income taxes

$

78,912

 

$

 

$

78,912

 

$

144,967

 

$

 

$

144,967

 

Current income tax expense (recovery)

 

452

 

 

 

 

452

 

 

(307)

 

 

 

 

(307)

 

Net income

$

78,460

 

$

 

$

78,460

 

$

145,274

 

$

 

$

145,274

 


 

Six months ended June 30, 2022

Six months ended June 30, 2021

(in thousands)

IFRS basis

 

Equity-
accounted
investments

 

RioCan's
proportionate
share

 

IFRS basis

 

Equity-
accounted
investments

 

RioCan's
proportionate
share

 

Revenue

 

 

 

 

 

 

Rental revenue

$

539,433

 

$

14,301

 

$

553,734

 

$

539,470

 

$

12,783

 

$

552,253

 

Residential inventory sales

 

50,974

 

 

936

 

 

51,910

 

 

28,107

 

 

2,701

 

 

30,808

 

Property management and other service fees

 

11,993

 

 

 

 

11,993

 

 

6,906

 

 

 

 

6,906

 

 

 

602,400

 

 

15,237

 

 

617,637

 

 

574,483

 

 

15,484

 

 

589,967

 

Operating costs

 

 

 

 

 

 

Rental operating costs

 

 

 

 

 

 

Recoverable under tenant leases

 

192,251

 

 

1,284

 

 

193,535

 

 

186,414

 

 

947

 

 

187,361

 

Non-recoverable costs

 

11,577

 

 

1,163

 

 

12,740

 

 

23,103

 

 

1,364

 

 

24,467

 

Residential inventory cost of sales

 

43,793

 

 

422

 

 

44,215

 

 

26,059

 

 

1,011

 

 

27,070

 

 

 

247,621

 

 

2,869

 

 

250,490

 

 

235,576

 

 

3,322

 

 

238,898

 

Operating income

 

354,779

 

 

12,368

 

 

367,147

 

 

338,907

 

 

12,162

 

 

351,069

 

Other income (loss)

 

 

 

 

 

 

Interest income

 

8,946

 

 

1,144

 

 

10,090

 

 

6,254

 

 

1,030

 

 

7,284

 

Income from equity-accounted investments

 

5,255

 

 

(5,255)

 

 

 

 

8,600

 

 

(8,600)

 

 

 

Fair value (loss) gain on investment properties, net

 

(6,838)

 

 

(4,266)

 

 

(11,104)

 

 

31,795

 

 

(1,207)

 

 

30,588

 

Investment and other income (loss)

 

(1,563)

 

 

(207)

 

 

(1,770)

 

 

1,734

 

 

64

 

 

1,798

 

 

 

5,800

 

 

(8,584)

 

 

(2,784)

 

 

48,383

 

 

(8,713)

 

 

39,670

 

Other expenses

 

 

 

 

 

 

Interest costs, net

 

85,425

 

 

3,648

 

 

89,073

 

 

86,762

 

 

3,371

 

 

90,133

 

General and administrative

 

27,863

 

 

31

 

 

27,894

 

 

29,530

 

 

31

 

 

29,561

 

Internal leasing costs

 

5,810

 

 

 

 

5,810

 

 

5,619

 

 

 

 

5,619

 

Transaction and other costs

 

2,692

 

 

105

 

 

2,797

 

 

6,828

 

 

47

 

 

6,875

 

Debt prepayment costs, net

 

 

 

 

 

 

 

7,018

 

 

 

 

7,018

 

 

 

121,790

 

 

3,784

 

 

125,574

 

 

135,757

 

 

3,449

 

 

139,206

 

Income before income taxes

$

238,789

 

$

 

$

238,789

 

$

251,533

 

$

 

$

251,533

 

Current income tax recovery

 

271

 

 

 

 

271

 

 

(470)

 

 

 

 

(470)

 

Net income

$

238,518

 

$

 

$

238,518

 

$

252,003

 

$

 

$

252,003

 


NOI and Same Property NOI

The following table reconciles operating income to NOI and Same Property NOI to NOI for the three and six months ended June 30, 2022 and 2021:

(thousands of dollars, except where otherwise noted)

Three months ended June 30

 

Six months ended June 30

 

 

2022

 

 

2021

 

 

2022

 

 

2021

 

Operating Income

$

180,912

 

$

171,805

 

$

354,779

 

$

338,907

 

Adjusted for the following:

 

 

 

 

Property management and other service fees

 

(6,112)

 

 

(3,731)

 

 

(11,993)

 

 

(6,906)

 

Residential inventory gains

 

(5,148)

 

 

(2,048)

 

 

(7,181)

 

 

(2,048)

 

Operational lease revenue and (expenses) from ROU assets

 

1,386

 

 

1,221

 

 

2,731

 

 

2,326

 

NOI

$

171,038

 

$

167,247

 

$

338,336

 

$

332,279

 


 

Three months ended June 30

Six months ended June 30

(thousands of dollars)

 

2022

 

2021

 

2022

 

2021

Same Property NOI

$

157,609

$

148,470

$

311,410

$

296,480

NOI from income producing properties:

 

 

 

 

Acquired (i)

 

133

 

 

261

 

49

Disposed (i)

 

229

 

7,216

 

2,773

 

16,127

 

 

362

 

7,216

 

3,034

 

16,176

NOI from completed properties under development

 

4,056

 

1,922

 

8,245

 

3,726

NOI from properties under de-leasing under development

 

2,579

 

3,258

 

5,070

 

5,417

Lease cancellation fees

 

2,671

 

4,196

 

3,554

 

5,944

Straight-line rent adjustment

 

359

 

1,648

 

1,274

 

3,334

NOI from residential rental

 

3,402

 

537

 

5,749

 

1,202

NOI

$

171,038

$

167,247

$

338,336

$

332,279

(i)   Includes properties acquired or disposed during the periods being compared.

Same Property NOI including completed PUD

 

Three months ended June 30

Six months ended June 30

(thousands of dollars)

 

2022

 

2021

% change

 

 

2022

 

2021

% change

 

Same Property NOI

$

157,609

$

148,470

6.2%

 

$

311,410

$

296,480

5.0%

 

Add:

 

 

 

 

 

 

NOI from completed properties under development

 

4,056

 

1,922

 

 

8,245

 

3,726

 

Same Property NOI including completed PUD

$

161,665

$

150,392

7.5%

 

$

319,655

$

300,206

6.5%

 


Adjusted Same Property NOI 

 

Three months ended June 30

Six months ended June 30

(thousands of dollars)

 

2022

 

 

2021

 

% change

 

 

2022

 

 

2021

 

% change

 

Same Property NOI

$

157,609

 

$

148,470

 

6.2%

 

$

311,410

 

$

296,480

 

5.0%

 

Add (exclude):

 

 

 

 

 

 

Same property pandemic-related provision (recovery)

 

(662)

 

 

4,853

 

 

 

(662)

 

 

11,126

 

 

Legal and CAM/property tax settlements

 

(749)

 

 

(1,630)

 

 

 

(1,349)

 

 

(6,230)

 

 

Adjusted Same Property NOI

$

156,198

 

$

151,693

 

3.0%

 

$

309,399

 

$

301,376

 

2.7%

 


FFO

The following table reconciles net income attributable to Unitholders to FFO for the three and six months ended June 30, 2022 and 2021:

 

Three months ended June 30

 

Six months ended June 30

 

(thousands of dollars, except where otherwise noted)

 

2022

 

 

2021

 

 

2022

 

 

2021

 

Net income attributable to Unitholders

$

78,460

 

$

145,274

 

$

238,518

 

$

252,003

 

Add back/(Deduct):

 

 

 

 

Fair value losses (gains), net

 

42,270

 

 

(22,929)

 

 

6,838

 

 

(31,795)

 

Fair value losses included in equity-accounted investments

 

3,476

 

 

695

 

 

4,266

 

 

1,207

 

Internal leasing costs

 

2,825

 

 

2,767

 

 

5,810

 

 

5,619

 

Transaction (gains) losses on investment properties, net (i)

 

353

 

 

(888)

 

 

736

 

 

(733)

 

Transaction costs on sale of investment properties

 

713

 

 

1,678

 

 

1,314

 

 

5,315

 

Change in unrealized fair value on marketable securities

 

1,401

 

 

 

 

1,401

 

 

 

Current income recovery

 

452

 

 

(307)

 

 

271

 

 

(470)

 

Operational lease revenue from ROU assets

 

985

 

 

824

 

 

1,930

 

 

1,587

 

Operational lease expenses from ROU assets in equity-accounted investments

 

(11)

 

 

(11)

 

 

(23)

 

 

(19)

 

Capitalized interest on equity-accounted investments (ii)

 

733

 

 

414

 

 

1,169

 

 

838

 

FFO

$

131,657

 

$

127,517

 

$

262,230

 

$

233,552

 

Add back:

 

 

 

 

Debt prepayment costs, net

 

 

 

 

 

 

 

7,018

 

One-time compensation costs

 

 

 

211

 

 

 

 

6,057

 

Restructuring costs

 

3,170

 

 

 

 

3,780

 

 

 

FFO Adjusted

$

134,827

 

$

127,728

 

$

266,010

 

$

246,627

 

 

 

 

 

 

FFO per unit - basic

$

0.43

 

$

0.40

 

$

0.85

 

$

0.73

 

FFO per unit - diluted

$

0.43

 

$

0.40

 

$

0.85

 

$

0.73

 

FFO Adjusted per unit - diluted

$

0.44

 

$

0.40

 

$

0.86

 

$

0.78

 

Weighted average number of Units - basic (in thousands)

 

308,312

 

 

317,764

 

 

309,070

 

 

317,761

 

Weighted average number of Units - diluted (in thousands)

 

308,537

 

 

317,882

 

 

309,324

 

 

317,771

 

 

 

 

 

 

FFO for last 4 quarters

 

 

$

535,661

 

$

486,461

 

Distributions paid for last 4 quarters

 

 

$

306,986

 

$

393,998

 

FFO Payout Ratio

 

 

 

57.3%

 

 

81.0%

 


(i)

Represents net transaction gains or losses connected to certain investment properties during the period.

(ii)

This amount represents the interest capitalized to RioCan's equity-accounted investment in WhiteCastle New Urban Fund, LP, WhiteCastle New Urban Fund 2, LP, WhiteCastle New Urban Fund 3, LP, WhiteCastle New Urban Fund 4, LP, WhiteCastle New Urban Fund 5, LP, RioCan-Fieldgate JV, RC (Queensway) LP, RC (Leaside) LP- Class B and PR Bloor Street LP. This amount is not capitalized to properties under development under IFRS, but is allowed as an adjustment under REALPAC’s definition of FFO.


Development Spending

Total Development Spending for the three and six months ended June 30, 2022 and 2021 are as follows:

 

Three months ended June 30

Six months ended June 30

(thousands of dollars)

 

2022

 

2021

 

2022

 

2021

Development expenditures on balance sheet:

 

 

 

 

Properties under development

$

96,106

$

93,282

$

157,271

$

167,528

Residential inventory

 

35,363

 

16,792

 

63,708

 

30,121

RioCan's share of Development Spending from equity-accounted joint ventures

 

8,136

 

8,135

 

10,510

 

8,265

Total Development Spending (i)

$

139,605

$

118,209

$

231,489

$

205,914


(i)

Beginning in Q1 2022, the definition of total Development Spending was revised to include RioCan's share of Development Spending from equity-accounted joint ventures accordingly, the comparative period has been restated.


Total Acquisitions

Total Acquisitions for the three and six months ended June 30, 2022 and 2021 are as follows:

 

Three months ended June 30

Six months ended June 30

(thousands of dollars)

 

2022

 

2021

 

2022

 

2021

 

 

 

 

 

Income producing properties

$

$

$

89,948

$

11,482

Properties under development

 

 

5,563

 

11,946

 

5,563

Residential inventory

 

 

 

19,440

 

RioCan's share of acquisitions from equity-accounted joint ventures

 

 

 

66,497

 

Total Acquisitions

$

$

5,563

$

187,831

$

17,045


Total Adjusted Debt and Total Contractual Debt

The following tables reconcile total debt to Total Adjusted Debt, total assets to Total Adjusted Assets, and total debt to Total Contractual Debt as at June 30, 2022 and December 31, 2021:

As at

June 30, 2022

December 31, 2021

(thousands of dollars, except where otherwise noted)

IFRS basis

 

Equity-
accounted
investments

RioCan's
proportionate
share

 

IFRS basis

 

Equity-
accounted
investments

RioCan's
proportionate
share

 

Debentures payable

$

3,240,688

 

$

$

3,240,688

 

$

2,990,692

 

$

$

2,990,692

 

Mortgages payable

 

2,387,532

 

 

166,745

 

2,554,277

 

 

2,334,016

 

 

166,368

 

2,500,384

 

Lines of credit and other bank loans

 

1,249,496

 

 

93,079

 

1,342,575

 

 

1,285,910

 

 

48,049

 

1,333,959

 

Total debt

$

6,877,716

 

$

259,824

$

7,137,540

 

$

6,610,618

 

$

214,417

$

6,825,035

 

Cash and cash equivalents

 

71,864

 

 

8,101

 

79,965

 

 

77,758

 

 

9,113

 

86,871

 

Total Adjusted Debt

$

6,805,852

 

$

251,723

$

7,057,575

 

$

6,532,860

 

$

205,304

$

6,738,164

 

 

 

 

 

 

 

 

Total assets

$

15,473,722

 

$

287,550

$

15,761,272

 

$

15,177,463

 

$

248,230

$

15,425,693

 

Cash and cash equivalents

 

71,864

 

 

8,101

 

79,965

 

 

77,758

 

 

9,113

 

86,871

 

Total Adjusted Assets

$

15,401,858

 

$

279,449

$

15,681,307

 

$

15,099,705

 

$

239,117

$

15,338,822

 

 

 

 

 

 

 

 

Total Adjusted Debt to Total Adjusted Assets

 

44.2%

 

 

 

45.0%

 

 

43.3%

 

 

 

43.9%

 


As at

June 30, 2022

December 31, 2021

(thousands of dollars)

IFRS basis

 

Equity-
accounted
investments

 

RioCan's
proportionate
share

 

IFRS basis

 

Equity-
accounted
investments

 

RioCan's
proportionate
share

 

Total debt

$

6,877,716

 

$

259,824

 

$

7,137,540

 

$

6,610,618

 

$

214,417

 

$

6,825,035

 

Less:

 

 

 

 

 

 

Unamortized debt financing costs, premiums and discounts on origination and debt assumed, and modifications

 

(16,819)

 

 

(595)

 

 

(17,414)

 

 

(16,414)

 

 

(386)

 

 

(16,800)

 

Total Contractual Debt

$

6,894,535

 

$

260,419

 

$

7,154,954

 

$

6,627,032

 

$

214,803

 

$

6,841,835

 


Liquidity

As at June 30, 2022, RioCan had approximately $1.4 billion of Liquidity as summarized in the following table:

As at

June 30, 2022

December 31, 2021



(thousands of dollars, except where otherwise noted)

IFRS basis

 

Equity-
accounted
investments

RioCan's
proportionate
share

 

IFRS basis

 

Equity-
accounted
investments

RioCan's
proportionate
share

 

Undrawn revolving unsecured operating line of credit

$

996,891

 

$

$

996,891

 

$

634,080

 

$

$

634,080

 

Undrawn construction lines and other bank loans

 

311,338

 

 

51,912

 

363,250

 

 

241,883

 

 

47,641

 

289,524

 

Cash and cash equivalents

 

71,864

 

 

8,101

 

79,965

 

 

77,758

 

 

9,113

 

86,871

 

Liquidity

$

1,380,093

 

$

60,013

$

1,440,106

 

$

953,721

 

$

56,754

$

1,010,475

 

Total Contractual Debt

$

6,894,535

 

$

260,419

$

7,154,954

 

$

6,627,032

 

$

214,803

$

6,841,835

 

Liquidity as percentage of Total Contractual Debt

 

20.0%

 

 

 

20.1%

 

 

14.4%

 

 

 

14.8%

 


Unsecured Debt and Secured Debt

The following table reconciles total Unsecured Debt and Secured Debt to Total Contractual Debt as at June 30, 2022 and December 31, 2021:

As at

June 30, 2022

December 31, 2021

(thousands of dollars, except where otherwise noted)

IFRS basis

 

Equity-
accounted
investments

RioCan's
proportionate
share

 

IFRS basis

 

Equity-
accounted
investments

RioCan's
proportionate
share

 

Total Unsecured Debt

$

4,203,109

 

$

$

4,203,109

 

$

4,065,920

 

$

$

4,065,920

 

Total Secured Debt

 

2,691,426

 

 

260,419

 

2,951,845

 

 

2,561,112

 

 

214,803

 

2,775,915

 

Total Contractual Debt

$

6,894,535

 

$

260,419

$

7,154,954

 

$

6,627,032

 

$

214,803

$

6,841,835

 

 

 

 

 

 

 

 

Percentage of Total Contractual Debt:

 

 

 

 

 

 

Unsecured Debt

 

61.0%

 

 

 

58.7%

 

 

61.4%

 

 

 

59.4%

 

Secured Debt

 

39.0%

 

 

 

41.3%

 

 

38.6%

 

 

 

40.6%

 


Adjusted EBITDA

The following table reconciles consolidated net income attributable to Unitholders to Adjusted EBITDA:

 

12 months ended

As at

June 30, 2022

December 31, 2021

(thousands of dollars)

IFRS basis

 

Equity-
accounted
investments

 

RioCan's
proportionate
share

 

IFRS basis

 

Equity-
accounted
investments

 

RioCan's
proportionate
share

 

Net income attributable to Unitholders

$

584,904

 

$

 

$

584,904

 

$

598,389

 

$

 

$

598,389

 

Add (deduct) the following items:

 

 

 

 

 

 

Income tax expense (recovery):

 

 

 

 

 

 

Current

 

682

 

 

 

 

682

 

 

(59)

 

 

 

 

(59)

 

Fair value losses (gains) on investment properties, net

 

(85,419)

 

 

4,172

 

 

(81,247)

 

 

(124,052)

 

 

1,113

 

 

(122,939)

 

Change in unrealized fair value on marketable securities (i)

 

1,401

 

 

 

 

1,401

 

 

 

 

 

 

 

Internal leasing costs

 

11,998

 

 

 

 

11,998

 

 

11,807

 

 

 

 

11,807

 

Non-cash unit-based compensation expense

 

8,254

 

 

 

 

8,254

 

 

12,546

 

 

 

 

12,546

 

Interest costs, net

 

170,184

 

 

7,303

 

 

177,487

 

 

171,521

 

 

7,026

 

 

178,547

 

Debt prepayment costs, net

 

3,896

 

 

 

 

3,896

 

 

10,914

 

 

 

 

10,914

 

One-time cash compensation costs

 

 

 

 

 

 

 

1,932

 

 

 

 

1,932

 

Restructuring costs

 

3,779

 

 

 

 

3,779

 

 

 

 

 

 

 

Depreciation and amortization

 

3,897

 

 

 

 

3,897

 

 

4,022

 

 

 

 

4,022

 

Transaction losses on the sale of investment properties, net (ii)

 

1,871

 

 

 

 

1,871

 

 

402

 

 

 

 

402

 

Transaction costs on investment properties

 

10,360

 

 

30

 

 

10,390

 

 

14,363

 

 

28

 

 

14,391

 

Operational lease revenue and expenses from ROU assets

 

3,651

 

 

(46)

 

 

3,605

 

 

3,308

 

 

(42)

 

 

3,266

 

Adjusted EBITDA

$

719,458

 

$

11,459

 

$

730,917

 

$

705,093

 

$

8,125

 

$

713,218

 


(i)

The fair value gains and losses on marketable securities may include both the change in unrealized fair value and realized gains and losses on the sale of marketable securities. By adding back the change in unrealized fair value on marketable securities, RioCan effectively continues to include realized gains and losses on the sale of marketable securities in Adjusted EBITDA and excludes unrealized fair value gains and losses on marketable securities in Adjusted EBITDA.

(ii)

Includes transaction gains and losses realized on the disposition of investment properties.


Adjusted Debt to Adjusted EBITDA
Ratio

Adjusted Debt to Adjusted EBITDA is calculated as follows:

 

12 months ended

As at

June 30, 2022

December 31, 2021

(thousands of dollars)

IFRS basis

 

Equity-
accounted
investments

 

RioCan's
proportionate
share

 

IFRS basis

 

Equity-
accounted
investments

 

RioCan's
proportionate
share

 

 

 

 

 

 

 

 

Adjusted Debt to Adjusted EBITDA

 

 

 

 

 

 

Average total debt outstanding

$

6,740,402

 

$

228,546

 

$

6,968,948

 

$

6,773,147

 

$

192,804

 

$

6,965,951

 

Less: average cash and cash equivalents

 

(87,182)

 

 

(7,288)

 

 

(94,470)

 

 

(119,400)

 

 

(5,639)

 

 

(125,039)

 

Average Total Adjusted Debt

$

6,653,220

 

$

221,258

 

$

6,874,478

 

$

6,653,747

 

$

187,165

 

$

6,840,912

 

Adjusted EBITDA

$

719,458

 

$

11,459

 

$

730,917

 

$

705,093

 

$

8,125

 

$

713,218

 

Adjusted Debt to Adjusted EBITDA

 

9.25

 

 

 

9.41

 

 

9.44

 

 

 

9.59

 


Unencumbered Assets

The tables below summarize RioCan's Unencumbered Assets to Unsecured Debt and Percentage of Normalized NOI Generated from Unencumbered Assets as at June 30, 2022 and December 31, 2021:

As at

 

June 30, 2022

December 31, 2021

(thousands of dollars, except where otherwise noted)

Targeted
Ratios

IFRS basis

 

Equity-
accounted
investments

RioCan's
proportionate
share

 

IFRS basis

 

Equity-
accounted
investments

RioCan's
proportionate
share

Unencumbered Assets

 

$

9,146,773

 

$

58,542

$

9,205,315

 

$

9,332,833

 

$

59,433

$

9,392,266

Total Unsecured Debt

 

$

4,203,109

 

$

$

4,203,109

 

$

4,065,920

 

$

$

4,065,920

Unencumbered Assets to Unsecured Debt

> 200%

 

218%

 

 

 

219%

 

 

230%

 

 

 

231%

 

 

 

 

 

 

 

 

Annual Normalized NOI - total portfolio (i)

 

$

662,052

 

$

23,700

$

685,752

 

$

649,208

 

$

22,688

$

671,896

Annual Normalized NOI - Unencumbered Assets (i)

 

$

426,044

 

$

3,444

$

429,488

 

$

432,820

 

$

3,440

$

436,260

Percentage of Normalized NOI Generated from Unencumbered Assets

> 50.0%

 

64.4%

 

 

 

62.6%

 

 

66.7%

 

 

 

64.9%

(i)  Annual Normalized NOI are reconciled in the table below.

 

Three months ended 
June 30, 2022

Three months ended
December 31, 2021

(thousands of dollars, except where otherwise noted)

IFRS basis

 

Equity-
accounted
investments

RioCan's
proportionate
share

 

IFRS basis

 

Equity-
accounted
investments

RioCan's
proportionate
share

NOI (i)

$

171,038

 

$

5,925

$

176,963

 

$

165,798

 

$

5,672

$

171,470

Adjust the following:

 

 

 

 

 

 

Miscellaneous revenue

 

(960)

 

 

 

(960)

 

 

(540)

 

 

 

(540)

Percentage rent

 

(1,894)

 

 

 

(1,894)

 

 

(2,562)

 

 

 

(2,562)

Lease cancellation fees

 

(2,671)

 

 

 

(2,671)

 

 

(394)

 

 

 

(394)

Normalized NOI - total portfolio

$

165,513

 

$

5,925

$

171,438

 

$

162,302

 

$

5,672

$

167,974

Annual Normalized NOI - total portfolio(ii)

$

662,052

 

$

23,700

$

685,752

 

$

649,208

 

$

22,688

$

671,896

 

 

 

 

 

 

 

NOI from unencumbered assets

$

110,819

 

$

861

$

111,680

 

$

110,517

 

$

860

$

111,377

Adjust the following:

 

 

 

 

 

 

Miscellaneous revenue- Unencumbered Assets

 

(385)

 

 

 

(385)

 

 

(253)

 

 

 

(253)

Percentage rent- Unencumbered Assets

 

(1,261)

 

 

 

(1,261)

 

 

(1,852)

 

 

 

(1,852)

Lease cancellation fees- Unencumbered Assets

 

(2,662)

 

 

 

(2,662)

 

 

(207)

 

 

 

(207)

Normalized NOI - Unencumbered Assets

$

106,511

 

$

861

$

107,372

 

$

108,205

 

$

860

$

109,065

Annual Normalized NOI - Unencumbered Assets (ii)

$

426,044

 

$

3,444

$

429,488

 

$

432,820

 

$

3,440

$

436,260


(i)

Refer to the NOI and Same Property NOI table of this section for reconciliation from NOI to operating income.

(ii)

Calculated by multiplying Normalized NOI by a factor of 4.


Forward-Looking Information
This News Release contains forward-looking information within the meaning of applicable Canadian securities laws. This information reflects RioCan’s objectives, our strategies to achieve those objectives, as well as statements with respect to management’s beliefs, estimates and intentions concerning anticipated future events, results, circumstances, performance or expectations that are not historical facts. Forward-looking information generally can be identified by the use of forward-looking terminology such as “outlook”, “objective”, “may”, “will”, “would”, “expect”, “intend”, “estimate”, “anticipate”, “believe”, “should”, “plan”, “continue”, or similar expressions suggesting future outcomes or events. Such forward-looking information reflects management’s current beliefs and is based on information currently available to management. All forward-looking information in this News Release is qualified by these cautionary statements. Forward-looking information is not a guarantee of future events or performance and, by its nature, is based on RioCan’s current estimates and assumptions, which are subject to numerous risks and uncertainties, including those described in the “Risks and Uncertainties” section in RioCan's MD&A for the three and six months ended June 30, 2022 and in our most recent Annual Information Form, which could cause actual events or results to differ materially from the forward-looking information contained in this News Release. General economic conditions, including interest rate fluctuations, may also have an effect on RioCan’s results of operations. Material factors or assumptions that were applied in drawing a conclusion or making an estimate set out in the forward-looking information may include, but are not limited to: a gradual recovery and growth of the retail environment and the general economy over 2022; a rising interest rate environment; a continuing trend toward land use intensification at reasonable costs and development yields, including residential development in urban markets; the Trust’s ability to redevelop, sell or enter into partnerships with respect to the future incremental density it has identified in its portfolio, access to equity and debt capital markets to fund, at acceptable costs, future capital requirements and to enable our refinancing of debts as they mature; the availability of investment opportunities for growth in Canada; the timing and ability of RioCan to sell certain properties; the valuations to be realized on property sales relative to current IFRS values; and the Trust's ability to utilize the capital gain refund mechanism. Although the forward-looking information contained in this News Release is based upon what management believes are reasonable assumptions, there can be no assurance that actual results will be consistent with this forward-looking information.

The forward-looking statements contained in this News Release are made as of the date hereof, and should not be relied upon as representing RioCan’s views as of any date subsequent to the date of this News Release. Management undertakes no obligation, except as required by applicable law, to publicly update or revise any forward-looking information, whether as a result of new information, future events or otherwise.

CONTACT: Contact Information RioCan Real Estate Investment Trust Dennis Blasutti Chief Financial Officer 416-866-3033 | www.riocan.com