NON-GAAP MEASURES FORWARD LOOKING INFORMATION

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2 NON-GAAP MEASURES RioCan s consolidated financial statements are prepared in accordance with IFRS. Consistent with RioCan s management framework, management uses certain financial measures to assess RioCan s financial performance, which are not generally accepted accounting principles (GAAP) under IFRS. The following measures, RioCan s Proportionate Share (or Interest), Funds From Operations ( FFO ), Net Operating Income ( NOI ), Adjusted Earnings before interest, taxes, depreciation and amortization ( Adjusted EBITDA ), Debt to Adjusted EBITDA, Same Property NOI, Interest Coverage, Debt Service Coverage, Fixed Charge Coverage, and Total Enterprise Value as well as other measures discussed in this presentation, do not have a standardized definition prescribed by IFRS and are, therefore, unlikely to be comparable to similar measures presented by other reporting issuers. Non-GAAP measures should not be considered as alternatives to net earnings or comparable metrics determined in accordance with IFRS as indicators of RioCan s performance, liquidity, cash flow, and profitability. For a full definition of these measures, please refer to the Non-GAAP Measures in RioCan s Management s Discussion and Analysis for the period ended December 31, RioCan uses these measures to better assess the Trust s underlying performance and provides these additional measures so that investors may do the same. FORWARD LOOKING INFORMATION Certain information included in this presentation contains forward-looking statements within the meaning of applicable securities laws including, among others, statements concerning our objectives, our strategies to achieve those objectives, as well as statements with respect to management's beliefs, plans, estimates, and intentions, and similar statements concerning anticipated future events, results, circumstances, performance or expectations that are not historical facts. Certain material factors, estimates or assumptions were applied in drawing a conclusion or making a forecast or projection as reflected in these statements and actual results could differ materially from such conclusions, forecasts or projections. Additional information on the material risks that could cause our actual results to differ materially from the conclusions, forecast or projections in these statements and the material factors, estimates or assumptions that were applied in drawing a conclusion or making a forecast or projection as reflected in the forward-looking information can be found in our most recent annual information form and annual report that are available on our website and at Except as required by applicable law, RioCan undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise. 2

3 TODAY S AGENDA A Opening Remarks Ed Sonshine B Disposition Program Jonathan Gitlin C D The Current Operating Environment RioCan s Strategic & Operational Advantages Operations Driving Organic Growth Leasing Market & Supporting RioCan s Strategic Growth Platform Development Program Overview & RioCan Living Development Expertise & Approach Residential Growth Strategy Rags Davloor, John Ballantyne, & Jeff Ross Andrew Duncan & Jonathan Gitlin E Capital Structure and Financing Strategy Qi Tang F Closing Remarks Ed Sonshine G Q&A 3

4 OPENING REMARKS Ed Sonshine Founder and CEO 4

5 RIOCAN S VALUE PROPOSITION AND FOUR STRATEGIC PILLARS REAL VISION, SOLID GROUND CANADA S MAJOR MARKET PORTFOLIO High quality, necessity based retail, and increasingly mixed-use major markets portfolio Diversified, strong national tenant base Significant upside on rent growth Base for significant NAV growth tremendous intrinsic value to be unlocked Strong executive bench with wealth of experience and proven track record DRIVING ORGANIC GROWTH UNLOCKING INTRINSIC VALUE STRATEGIC ACQUISITIONS STRONG BALANCE SHEET Evolving tenant mix and revenue growth Improving operating efficiency and cost structure Redeveloping prime assets Optimize pads by adding additional GLA Drive ancillary revenues Continuous portfolio pruning Focusing on transitoriented urban intensification in major markets Mostly mixed-use with residential rental and/or condo development Strategic alliances to mitigate risk and create steady fee stream Robust and growing pipeline of well located sites with substantial zoning approved Acquire only the best locations in the six major markets Opportunities to acquire partners interests in today s tight market Highly selective acquisitions of development sites, leveraging existing properties Low leverage Low cost of debt Laddered debt maturity and mostly fixed rate Access to multiple sources of capital Large unencumbered assets pool generating 56.7% of annualized NOI 5

6 UNMATCHED PORTFOLIO OF URBAN MIXED-USE DEVELOPMENT PROPERTIES ecentral at eplace King Portland Centre (Kingly) Sunnybrook Plaza Yonge Sheppard Centre (Pivot) Gloucester Residential Phase I (Frontier) 6

7 LEADERSHIP TEAM EXPERIENCE, INTEGRITY AND FORESIGHT Strong executive bench with a wealth of experience and proven track record Ed Sonshine O.Ont., Q.C. Founder and CEO Rags Davloor President and COO 25 years in Real Estate, Operations & Finance Qi Tang, SVP and CFO 20 years in Finance & Real Estate Trusted and respected, with deep industry knowledge and relationships Jonathan Gitlin, SVP Investments & Residential 18 years in Real Estate Jeff Ross, SVP Leasing & Tenant Construction 30 years in Real Estate John Ballantyne, SVP Asset Management 24 years in Real Estate Andrew Duncan SVP Developments 18 years in Development, 12 years in Real Estate Danny Kissoon SVP Operations 32 years in Real Estate Jennifer Suess SVP General Counsel & Corporate Secretary 16 years in Law with a focus on Real Estate 7

8 DISPOSITION PROGRAM UPDATE Jonathan Gitlin Senior Vice President, Investments and Residential 8

9 PROGRESS TO DATE Disposition Progress as of March 29, 2018 Transaction type Value ($m) Closed and Firm $537.3 Conditional $74.7 Total to Date $612.0 Weighted Average Cap Rate 6.22% Sale prices to-date and cap rates achieved have been in line with IFRS value $612M progress to-date in six months since the October 2017 announcement representing approximately 31% of the $2.0B disposition target 9

10 DISPOSITION UPDATE MAP OF FIRM OR CLOSED DISPOSITIONS TO DATE The properties disposed to date span a broad geographical range of secondary markets 10

11 DISPOSITION UPDATE BUYER PROFILE REITs Strategic buyers, such as CT REIT, who are looking to acquire assets where their retail banner is already a tenant. They know these assets well and recognize the advantage of controlling properties in which their associate retail banners operate. Geographically focused REITs looking to expand footprint in a particular region. Small cap REITs looking for growth and accretive acquisitions, which would otherwise be unavailable in major markets. 11

12 DISPOSITION UPDATE BUYER PROFILE Private Individual Buyers Objectives include capital preservation and stable, risk-adjusted returns. These buyers have local expertise or presence in particular secondary markets, and therefore covet these assets. Private Equity and Investment Managers Objectives include deploying a robust supply of capital in a low-interest rate environment. Increasingly looking at secondary markets in the core to value-add risk range due to limited supply of product in primary markets. 12

13 THE CURRENT OPERATING ENVIRONMENT RIOCAN S STRATEGIC & OPERATIONAL ADVANTAGES CONSISTENTLY ABOVE 95% Rags Davloor President & COO 13

14 DRIVEN BY INSIGHT EXPERIENCE, INTEGRITY AND FORESIGHT Best in class management team Widely integrated cross functional management approach Asset Management Asset Management Operations Marketing Sustainability Rags Davloor Leasing Leasing Tenant Construction Development Planning/Zoning Permitting/ Permissions Design and Development Construction 14

15 CANADA S MAJOR MARKET PORTFOLIO WHERE CANADIANS SHOP, LIVE AND WORK CANADA S MAJOR MARKET PORTFOLIO High quality, necessity based retail, and increasingly mixed-use major markets portfolio Diversified, strong national tenant base Significant upside on rent growth Base for significant NAV growth tremendous intrinsic value to be unlocked Strong executive bench with wealth of experience and proven track record 15

16 CANADA S MAJOR MARKET PORTFOLIO WHERE CANADIANS SHOP, LIVE AND WORK GTA Revenue Focus 40.9% >50% Major Market Revenue 76.1% >90% Avg. Age Portfolio (yrs.) Vision 2017 Vision 2017 Vision 16

17 GREATER TORONTO AREA (GTA) FOCUS INDUSTRY LEADING PRESENCE IN THE TORONTO CORE AND RioCan First Capital SmartCentre REIT 17

18 CANADA S MAJOR MARKET PORTFOLIO WHERE CANADIANS SHOP, LIVE AND WORK Avg. Income (5km radius) Avg. Population (5km radius) ~$102k ~$111k ~$120k ~205k ~212k ~157k All Markets Major Markets All Markets Major Markets 2020 Improved operating efficiencies, newer assets, and less capex Improved portfolio demographics higher population growth, more disposable income Source: Based on Environics data 18

19 SOURCES OF TREMENDOUS NAV GROWTH ROBUST DEVELOPMENT PIPELINE M incremental NLA 1 or 53% of existing NLA M existing IPP NLA 10 0 Millions sf. RioCan NLA RioCan NLA including Incremental NLA from Development* Strong, major market, urban focused development pipeline High quality projects in prime locations, predominantly transit oriented 1. Total development pipeline of 26.3M sf includes incremental NLA of 22.2M sf plus 4.1M sf that is currently income producing 2. Assumes all development projects per the MD&A for the period ended December 31, 2017 are completed and assumes no additional development, acquisitions, or dispositions 19

20 TREMENDOUS SOURCES OF CASH FLOW & NAV GROWTH PIPELINE IS EXPECTED TO CONTINUE TO GROW Total Pipeline by Zoning Status (26.3M* sf) Total Pipeline by Project Type Zoned, 12.3m sf, 46.7% Future est. density, 8.7m sf, 33.2% Application submitted, 5.3m sf, 20.1% Commercial 1.1m sf, 4.4% Mixed-Use Residential 25.1m sf, 95.6% Residential & Air Rights 17.2m sf, 65.3% Commercial, 7.0m sf, 27.8% Residential Inventory 1.0m sf, 3.9% Nearly 50% or 12.3M sf with zoning approved and 100% is located in the six major markets Uncertainty in Ontario regarding transition to the newly implemented Local Planning Appeal Tribunals given that its mandate is unclear, which makes zoned density more valuable * Includes 22.2M sf of incremental NLA and 4.1M sf of NLA which is currently income producing. All data at RioCan s interest. 20

21 TREMENDOUS SOURCES OF CASH FLOW & NAV GROWTH SELECTED DEVELOPMENT COMPLETIONS OVER THE NEXT THREE YEARS At RioCan s Interest Annual Completed NLA 693, ,000 1,302,000 Cumulative NLA 693,000 1,506,000 2,808,000 % of NLA* 1.7% 3.6% 6.7% Number of Rental Units NOI (millions) $23.9 $16.8 $13.6 Completions of 2.8M sf through 2020 are expected to generate approx. $54M of annualized NOI at RioCan s interest * Income producing NLA of 41,807k sf as at December 31,

22 INTENSIFICATION STRATEGY DEVELOPMENT PROCESS FOR EXISTING INCOME PRODUCING PROPERTY Project Evaluation and Market Research Leasing Strategy Development Planning Zoning, Design, Planning Development & Construction Income Producing Asset Until Development Commences Year 1 Year 2-3 Year 4-5 Year

23 ORGANIC GROWTH OPERATIONS AND ASSET MANAGEMENT OVERVIEW CONSISTENTLY ABOVE 95% John Ballantyne Senior Vice President, Asset Management 23

24 FOCUSSED ON DRIVING SAME PROPERTY NOI (SPNOI) & FFO LEVERAGING SCALE, EXPERIENCE AND OUR MAJOR MARKET PORTFOLIO Strategically manage and position each asset for its highest and best use Experienced Asset Management team with diversified strength in retail, development and residential Best in class Operations team that provides local management for 280+ properties Operational efficiencies Capital planning Strategic asset repositioning & redevelopment 24

25 DRIVING SPNOI, FFO & NAV Drive SPNOI and FFO and leverage scale through: Occupancy and rent growth Operational efficiency: o o Concentrate maintenance contracts with national major market vendors Sustainable business practices Ancillary revenue o o o o Digital signage Pop up stores and activations Sponsorships Cell tower income Fee generation 25

26 PORTFOLIO CAPITAL PLANNING & OPTIMIZATION VALUE ADDED CAPEX Leverage capital to strategically redevelop and reposition assets to tap into their highest and best use Rebrand and redevelop assets to differentiate and resonate with the communities they serve o Expanded food courts o Improved common areas and amenities Drive experience, engagement and reasons to visit o Experiential offerings o Technology (wifi, charging stations) Maximize FFO pre-development 26

27 DRIVING ORGANIC GROWTH CASE STUDY BURLINGTON MALL BURLINGTON MALL, BURLINGTON, ON Location: On of the busiest intersections in Burlington (Canada s best mid-sized city 5 years in a row). Three GO train stations within a 10 KM radius and easily accessible from the QEW Acquisition: 2013 Ownership: 50% Total GLA: 738,000 sf Property Concept: Enclosed Shopping Centre Project Completion: 2018 Demographics (5km radius): Population 138K Avg. Household Income $116K Redevelopment and rebranding to Burlington Centre 27

28 DRIVING ORGANIC GROWTH CASE STUDY BURLINGTON MALL Strategic repositioning as the destination for locals to find everything the want, need and love in Burlington Remerchandised with a compelling tenant mix with strong convenience offering Expanded food court with stronger food offering Upgraded washrooms 28

29 DRIVING ORGANIC GROWTH CASE STUDY BURLINGTON MALL 29

30 DRIVING ORGANIC GROWTH CASE STUDY BURLINGTON MALL NOI will increase by 42% Metric At Acquisition (2013) Capital Invested Anticipated Stabilized Value $206.5M $55M $287.5 M NOI $9.9M - $14.1M 30

31 DRIVING ORGANIC GROWTH CASE STUDY YONGE EGLINTON CENTRE YONGE EGLINTON CENTRE, TORONTO Intersection: Yonge St. and Eglinton Avenue East Acquisition: 2007 Ownership: 100% Total GLA: 1,056,285 sf Property Concept: Mixed-use Project Completion: 2016 Demographics (5km radius): Population 138K Avg. Household Income $116K+ Strategically transitioned the property into a destination centre that better aligns to the community needs 31

32 DRIVING ORGANIC GROWTH CASE STUDY YONGE EGLINTON CENTRE 32

33 DRIVING ENGAGEMENT ANCILLARY REVENUE AND EXPERIENTIAL MARKETING 33

34 DRIVING ORGANIC GROWTH CASE STUDY YONGE EGLINTON CENTRE 73% increase in value over total costs Metric At Acquisition (2007) Capital Invested Stabilized (2017) Value $223M $110M $574M NOI $13M - $26M Avg. net rent PSF $ $

35 ORGANIC GROWTH & STRATEGIC DEVELOPMENT LEASING MARKET & SUPPORTING RIOCAN S STRATEGIC GROWTH PLATFORM CONSISTENTLY ABOVE 95% Jeff Ross Senior Vice President, Leasing and Tenant Construction 35

36 LEASING PLATFORM & TEAM Leasing Team Dedicated team with specialized sub leasing groups with expertise in their segment Supporting organic growth and finding new sources of cash flow through smaller intensification opportunities Unenclosed Retail Food & Beverage Lifestyle & Fitness Enclosed Mall Intensification 36

37 DRIVING ORGANIC GROWTH 2017 LEASING RESULTS $19.22 New Leasing Completed 2.0 million square feet of new leasing in 2017 at $19.61 per square foot $19.61 Renewal Leasing Renewed 4.5 million square feet in 2017 at $18.99 per square foot, an increase of 5.8% compared to % 91.1%

38 RETAILERS ADAPTING TO CURRENT MARKET ENVIRONMENT Retailers are still adapting to find right mix of e-commerce and bricks & mortar strategy Consumers have more access to information than ever before The successful retailers will be the ones that merge the Physical World with the Digital World 38

39 EVOLVING & RESILIENT TENANT MIX ADAPTING TO THE EVER CHANGING RETAIL ENVIRONMENT Retailer Category % of Rent 2017 Change since 2007 Key Brands Grocery/ Pharmacy Liquor/ Restaurant 27.8% 3.3% Personal Services 20.3% 4.2% Value Retailers 15.2% 2.6% Specialty Retailers 10.2% 0.1% Furniture and Home 9.9% 1.5% Department Stores/ Apparel 8.9% (7.4%) Entertainment and Hobby 3.1% (2.6%) Movie Theatres 4.6% (1.7%) 39

40 LANDLORDS MUST ADAPTING ALSO THE RIGHT SETTING EXPERIENCE, ENGAGEMENT & CONVENIENCE Providing tenants with space where they can provide experiential environments Restaurant growth is strong Shopping centres will become more of a social gathering place than ever before 40

41 THE NEW RETAIL ENVIRONMENT Provide flexible space as retailers find the right tenant mix for our properties - Lifestyle/Restaurants/Leisure - Pop-up retail - Omni channel Case Study: Lululemon Pop-Up to long term lease at Georgian Mall Provided a short term storefront as a test location The successful launch translated into a long term lease 41

42 WELL DIVERSIFIED NATIONAL TENANT BASE NO SINGLE TENANT OVER-EXPOSURE Top 10 Tenant Name Annualized Rental Revenue Number Of Locations NLA (Sq. Ft. in '000s) Weighted Avg Remaining Lease Term (Yrs) % 80 2, % 82 2, % 29 3, % 27 1, % 72 1, % 49 1, % % 13 1, % % Top Ten Tenants are all sound operators and leaders in their segments Majority are growing especially value focused tenants Largely resilient to e- commerce disruption TOTAL 31.3% , (i) (ii) Loblaws includes Shoppers Drug Mart, No Frills, Fortinos, Zehrs and Maxi. Canadian Tire Corporation includes Canadian Tire/PartSource/Mark s/sport Mart/ Sport Chek/Sports Experts/National Sports/Atmosphere. 42

43 LEVERAGING CURRENT RELATIONSHIPS AND FORGING NEW ONES WITH CANADA S MAJOR MARKET PORTFOLIO WE CAN DELIVER Major Market focus and presence to offer an avenue to introduce new concepts across a variety of retail formats Able to support the full range of tenant opportunities Toronto, ON Ottawa, ON Montreal, QC 43

44 LEVERAGING CURRENT RELATIONSHIPS AND FORGING NEW ONES WITH CANADA S MAJOR MARKET PORTFOLIO WE CAN DELIVER Major Market focus and presence to offer an avenue to introduce new concepts across a variety of retail formats Able to support the full range of tenant opportunities Vancouver, ON Calgary, AB Edmonton, AB 44

45 DEVELOPMENT AND RESIDENTIAL INITIATIVE UNLOCKING THE INTRINSIC VALUE Andrew Duncan Senior Vice President, Developments 45

46 UNLOCKING INTRINSIC VALUE REALIZING THE FULL POTENTIAL OF OUR CORE ASSETS CANADA S MAJOR MARKET PORTFOLIO UNLOCKING INTRINSIC VALUE Focusing on transit-oriented urban intensification in major markets Mostly mixed-use with residential rental and/or condo development Strong residential team with a wealth of experience capable of managing complex development projects from design to completion Strategic alliances to mitigate risks and create steady fee stream Robust and growing pipeline of well located sites with substantial zoning approved 46

47 DEVELOPMENT TEAM Balanced, experienced talented team Established strong industry relations Identify opportunities in robust pipeline of urban, transit-oriented sites 33 team members Planners, Engineers, Construction Managers, Analysts Three office locations Toronto, Calgary, Montreal Planning Design Analytics Residential Construction 47

48 DEVELOPMENT HAS BEEN INSTRUMENTAL TO LONG TERM GROWTH Development has been an internalized function for RioCan since 2003 Increased RioCan s presence in Canada s six major markets Grown in expertise to handle mixeduse retail and residential development Added strength to handle complex development in urban locations 48

49 UNMATCHED EXPERTISE AND DEPTH Mixed-use projects include: o o o o o Strada (College & Manning, Toronto) Litho. (740 Dupont, Toronto) Frontier (Gloucester, Ottawa) Brio (Brentwood Village, Calgary) The Well (Front & Spadina, Toronto) Forged strong strategic relationships with leading industry participants Allied, Boardwalk, Killam, Concert, and others 49

50 HEALTHY PIPELINE Constantly analyze portfolio for sites near transit infrastructure Pursuing site plan approvals or development permits in GTA, Ottawa and Calgary Perfectly positioned to execute on RioCan s long-term growth strategy OTTAWA CALGARY GTA 50

51 INNOVATION AT THE WELL RioCan continues to pursue innovative design elements in its projects The Well will utilize deep water lake cooling that harnesses Lake Ontario s capacity for its heating and cooling system 51

52 INNOVATION AT GLOUCESTER (FRONTIER) Frontier will employ a geothermal system for its heating and cooling system that capitalizes on its location above a geothermal source which reduces operating costs 52

53 RESIDENTIAL PROJECTS Litho. 740 Dupont Interior design and amenities pay homage to a neighbourhood steeped in craftsmanship, history and creativity Clean design, natural materials such as concrete, infused with bold pop of colour throughout common spaces Retail Design: o Structural design suitable for retail use, with a grocery tenant focus o Loading efficiencies captured for grocery logistics o Integration with below-grade parking and retail circulation 53

54 UNLOCKING INTRINSIC VALUE RESIDENTIAL INTENSIFICATION YONGE SHEPPARD CENTRE YONGE SHEPPARD CENTRE, TORONTO, ON Location: Located at the thriving intersection Yonge & Sheppard, with access to 2 subway lines and highway 401 Property Type: Mixed-use with incremental 156k sf retail, as well as 258k sf of rental residential Ownership: 50% (JV with KingSett Capital) Zoning Status: Zoned Phased Completion: Retail 2019 Residential

55 UNLOCKING INTRINSIC VALUE RESIDENTIAL INTENSIFICATION Pivot Yonge Sheppard Centre PIVOT (YONGE SHEPPARD CENTRE), TORONTO, ON Renovation and expansion of retail space Intensification through the addition of a new 36 storey residential tower containing 361 residential rental units Adding 100,000 square feet of additional retail space Adding new retail uses in Longo s and LA Fitness Required considerable effort and Proposed expertise to achieve project s success 55

56 DEVELOPMENT AND RESIDENTIAL INITIATIVE UNLOCKING THE INTRINSIC VALUE Jonathan Gitlin Senior Vice President, Investments and Residential 56

57 DEVELOPMENT AND RESIDENTIAL INITIATIVE CURRENT ACTIVE RESIDENTIAL PROJECTS Building Property/City/Province Rental Units Condo Units Yonge & Eglinton, Toronto, Ontario King & Portland, Toronto, Ontario Gloucester, Ottawa Brentwood Village, Calgary Yonge Sheppard Centre, Toronto, Ontario Dupont, Toronto, Ontario College & Manning, Toronto, Ontario 65 - The Well, Toronto, Ontario Total 2, TOTAL ALL 2,828 57

58 UNPARALLELED MAJOR MARKET PIPELINE URBAN TORONTO HIGHLIGHTS: SELECTED HIGH DENSITY, LOCATIONS Demographics, 5km radius Dense population*: 481,000 people Desirable demographic*: HH Income: $130,000+ Post-secondary education: 65%+ 1 Selected Urban Toronto RioCan Developments '000s sf (100%) 9 11 Yonge-Sheppard Centre College 113 King Portland Centre Yonge & Eglinton 707 The Well & Building 6 2, Dupont 181 Sunnybrook Plaza 316 Queensway Dufferin Plaza 582 RioCan Leaside Centre 1, Lawrence Square 94 RioCan Hall College 24 Bathurst College Centre 139 SELECTED URBAN TORONTO 8,588 *Average demographics within a 5km radius of RioCan Urban Toronto development sites 58

59 UNPARALLELED MAJOR MARKET PIPELINE URBAN HIGHLIGHTS: SELECTED HIGH DENSITY, LOCATIONS 59

60 RIOCAN LIVING Each RioCan Living project is supported by: Impeccable management backed by the proven track record of RioCan. Easy access to major commuter routes. Best in class architecture in iconic locations. Animated, community-focused event programming. Best in class communal amenities that cater to you. Retail experiences curated by the retail experts. 60

61 RIOCAN MIXED-USE DEVELOPMENT TEAM CROSS-FUNCTIONAL COORDINATION ACROSS VARIOUS DISCIPLINES Investments & Residential Product Development Acquisitions/Dispositions/Joint Ventures Branding Marketing Initial planning and concept Preliminary pro-forma development Land entitlement Developments RioCan Mixed-Use Development Team Leasing De-leasing initiatives Tenant relations Prospective tenant engagement 3 rd Party Property Management, at the current state Asset Management / Operations Commercial reporting, if Partner involved Day-to-day management of commercial component Liasing with Partner 61

62 BRENTWOOD SHOPPING CENTRE SITE CONTEXT 2008: Air right sale to residential condominium developer (533,000 sq. ft.) for University City project (727 residential units) University City Property Boundary 2016: RioCan achieved zoning approval for an additional 1.1M sq. ft. of density (655,000 sq. ft. of residential, 445,000 sq. ft. of commercial) Brentwood C Train - Calgary LRT BRIO Brentwood Village 2017: Development permits issued for BRIO (phase 1 of Brentwood development) - 145,000 sq. ft. of mixed-use density (135,000 sq. ft. of residential, 10,000 sq. ft. of commercial) RioCan planning future phase adjacent to BRIO University of Calgary Foothills Hospital SA Institute of Technology 62

63 BRIO PROJECT RENDERS BRIO is a joint-venture project between Boardwalk REIT and RioCan 12 storey, 163 unit residential rental building with retail at grade Construction underway, expected completion in 2020 Contemporary design, premium living, and condostyle amenities Redefining Brentwood Village into a vibrant mixed-use community complementing neighbouring institutional uses 63

64 CURATED COMMUNITIES RioCan enhances the living experience of its residents through: Impeccable management backed by the proven track record of RioCan. Easy access to major commuter routes. Best in class architecture in iconic locations. Animated, communityfocused event programming. Best in class communal amenities that cater to our tenants. Retail experiences curated by the retail experts. 64

65 PARTNERSHIPS TO LEVERAGE EXPERTISE AND MITIGATE RISKS BEST IN CLASS PARTNERS AND IMPECCABLE MANAGEMENT Carefully selected partners in specific regions Frontier - Gloucester Brio Brentwood Village Litho. 740 Dupont 65

66 EXAMPLE OF CURATED COMMUNITIES: STRADA Strada College & Manning Classic red-brick façade at street level and interior design details and amenities that fit into the Italian heritage of Toronto s Little Italy Exposed brick details, smoked mirror and antique architectural details found throughout common spaces Classic Italian suite finishes: o Open-kitchen designs with butcher-block details o Marble tiles laid in timeless herringbone patterns o Stainless steel chimney hood fans Technology Forward o Connectivity and Security o CRM software & solutions Amenities curated to appeal to a target who is known to enjoy spending discretionary income upholding their lifestyle and social life: o Speakeasy o Party Room and rooftop lounge o Fitness room 66

67 RESIDENTIAL PROJECTS Litho. 740 Dupont Interior design and amenities pay homage to a neighbourhood steeped in craftsmanship, history and creativity Clean design, natural materials such as concrete, infused with bold pop of colour throughout common spaces Modern suite design with industrial touches: o Black hardware and sliding doors o Exposed metal-leg island detail o Stainless steel appliances Ensure selected features and finishes are durable Amenities curated to appeal to the young, urban, creative class: o Community Room o Creative Studio o Fitness Centre o Private Dining/Boardroom 67

68 STRATEGIC ACQUISITIONS AND PARTNERSHIPS SEIZING OPPORTUNITIES AND MANAGING RISK CANADA S MAJOR MARKET PORTFOLIO SELECTIVE ACQUISITIONS WITH PARTNERS With the best locations in the six major markets Creates opportunities for partners to contribute to the project o Expertise development and managing partners on the residential side proved the opportunity for RioCan to learn best practise and acquire management expertise in a new asset class o Capital/Risk Management through the sale of interests in projects RioCan is able to develop more projects than it could on its own and spreads risk across projects and multiple partners 68

69 STRATEGIC ACQUISITIONS AND PARTNERSHIPS COMBINING THE BEST IN RETAIL WITH BEST IN CLASS PARTNERS TO CREATE LANDMARK COMMUNITIES Through strategic acquisitions and partnerships, RioCan owns the best locations in the six major markets, and utilizes best-in-class partner expertise to maximize value for Unitholders The Well Sunnybrook Gloucester City Centre Participant(s) Participant(s) Participant(s) JV Timing Initial Acquisition Risk Mitigation and Partner Expertise JV Timing Post-Zoning, Pre-Construction Crystalizing Value of Zoned Density and Premier Purpose-Built Rental Developer JV Timing Post-Zoning, Under Construction One of the Largest Residential Landlords and Local Expertise 69

70 STRATEGIC ACQUISITIONS YORKVILLE Location: Transit oriented and in the heart of prestigious Yorkville, one of Toronto s most high-end shopping and residential areas. Property Type: Mixed-use with potential for up to 0.5M sf of luxury condominium and retail uses and up to 82 rental units Ownership: 50/25/25 joint venture among RioCan, Metropia and Capital Developments Zoning Status: Zoning Bylaw Amendment (ZBA) submitted April 2018 Surfacing Value: The partners have completed acquisitions of adjacent properties substantially required for the intensification project RioCan has agreed to purchase the partners interest in the retail portion upon completion at a 6% cap rate and has the right of first opportunity to acquire the residential rental units 21 Yorkville 19 Yorkville 18 Cumberland 11 Yorkville 17 Yorkville 16 Cumberland 70

71 CAPITAL STRUCTURE AND FINANCING STRATEGY Qi Tang Senior Vice President and CFO 71

72 MEASURED APPROACH TO DEVELOPMENT Max. Permitted As at Dec. 31, 2017 Target Properties Under Development ( PUD ) & Inventory - $1.2 B $1B +/- $200M PUD and Inventory as % of Gross Assets per Line of Credit Covenant 15% 8.5% ~ 10% Investment in Greenfield Development and Inventory as % of Unitholder Equity - per Declaration of Trust 15% 3.3% N/A $1.2 Billion $300M - $400M $300M - $600M $1.0 Billion +/-$200M Current PUD & Inventory Balance Annual Development Spending Annual Development Completions Annual PUD Balance 72

73 SELF FUNDING DEVELOPMENT NOT DEPENDENT ON EQUITY OFFERINGS OR INCREASING LEVERAGE Sources of Funding for Development: Disposition net proceeds Sales proceeds from condominium/townhouse developments or air rights sales Strategic alliances to reduce capital requirements and mitigate risks Excess operating cash flows Sale of marketable securities 73

74 PRUDENT MANAGEMENT OF DEVELOPMENT RISKS Laddered development Pre-leasing requirement for commercial development and sound market studies for residential development Well-established internal control process for development approvals and construction management Strategic alliances to reduce capital requirements and mitigate risks Dedicated and experienced development team but not over-staffed o o No overhead pressure to take on projects Residential property management currently outsourced until we reach scale Already own the assets, which are income producing o We can better control development starts especially in today s environment of rising construction costs Limited condominium development 74

75 STRONG BALANCE SHEET CONTINUE TO MAINTAIN PRUDENT CAPITAL MANAGEMENT & FLEXIBLE CAPITAL STRUCTURE Capital Structure Metrics Target 2017 Leverage 38% - 42% 41.4% Debt/EBITDA <8.0x 7.57x Interest Coverage >3.0x 3.84x Debt Service Coverage >2.25x 3.06x Fixed Coverage CONSISTENTLY ABOVE 95% >1.10x 1.17x Unencumbered Assets N/A $7.7B Unencumbered Assets to Unencumbered Debt >2.0x 2.26x NOI % from Unencumbered Assets >50% 56.7% Unsecured vs. Secured Debt 60%/40% 57%/43% FFO Payout Ratio <80% 78.8% 75

76 INDUSTRY LEADING FINANCIAL PROFILE RIOCAN VS. PEERS Leverage Debt to EBITDA 41.4% 46.0% 7.6x 8.3x Debt Service Coverage 3.1x 2.6x Interest Coverage 3.9x 3.1x Source: company reports; Peers: FCR, SRU, CHP, CRR, CRT 76

77 INDUSTRY LEADING FINANCIAL PROFILE CAPITAL STRUCTURE PROFILE: CANADA VS. U.S. Historical Background and Stronger Demand for Yield: o Canadian REITs have a shorter history and higher demand for yield o US Retail REITs have much higher institutional ownership (~86%*) Less Risky Retail Operating Environment o o o Less retail space per capita in Canada Stricter development regulations and municipal bylaws in Canada Retail in Canada has less competition, more financially stable anchor tenants More Conservative Lending Practices o o o Canada: recourse borrowing and higher proportion of secured financing U.S.: Non-recourse borrowing and more reliance on unsecured financing Canadian financial institutions have more conservative, on-balance sheet lending practices *Source: RBC Capital Markets 77

78 CAPITAL MANAGEMENT STRATEGY Maintain strong balance sheet with leverage in the 38% - 42% range Maximize unit repurchases under NCIB subject to our leverage target Self-fund development Balance unsecured and secured debt ratio in the 60/40 split range Maintain financial flexibility by managing revolving line of credit utilization and balance between debenture issuance and line of credit utilization Balance debt maturities and limit variable rate debt to manage interest rate risk Maintain and develop lender relationships and continue to utilize diversified funding sources Utilize CMHC funding for mixed-use residential properties 78

79 STRONG BALANCE SHEET THE FINANCIAL RESOURCES TO FUEL GROWTH AND WEATHER MARKET TURMOIL CANADA S MAJOR MARKET PORTFOLIO STRONG BALANCE SHEET Low leverage Low cost of debt Low Leverage Laddered debt maturity and mostly fixed rate Access to multiple sources of capital Large unencumbered assets pool generating 56.7% of annualized NOI Multiple Capital Sources Strong Growth 79

80 CLOSING REMARKS Ed Sonshine Founder and CEO 80

81 Q&A 81

82