Management Presentation June 8, 2011

Transcription

1 Management Presentation June 8, 2011

2 Forward Looking Statements 2 Certain information included in this presentation contains forwardlooking 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 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.

3 Overview

4 About RioCan Largest REIT in Canada with 300 properties, including 8 under development, owned interests totalling over 43 million sq. ft. and an enterprise value in excess of $11 billion Able to prosperously grow in all cycles of the market using prudent strategies, core competencies, right partners and staying ahead of trends in commercial real estate Focused on retail real estate with experience in office and mixed use real estate Management team of RioCan has experience in all the sectors of commercial real estate Full service real estate entity with property management, asset management, leasing, acquisitions, development and financing capabilities with 611 employees Able to undertake any task within the real estate business Conservative balance sheet and strong debt metrics Unmatched breadth of tenant relationships in Canada Approximately 6,750 tenants, no tenant representing over 4.6% of annualized rental revenue Experienced asset manager with strong partners Completed a number of successful JVs and enjoyed a continued demand for its asset management expertise from existing and new partners 4

5 RioCan A proven performer 5 Source: Green Street Advisors as at 05/19/2011

6 Portfolio Fundamentals As at March 31, 2011 High proportion of national tenants Approximately 86.8% of our annualized rental revenue is derived from national and anchor tenants Stable occupancy levels at 97.4% (total portfolio) and solid leasing activity For the quarter ended March 31, 2011, RioCan retained approximately 87.1% of our expiring leases at an average net rent increase of 8.7% US Expansion: Focus on grocery anchored strip centres 98.0% occupancy at March 31, 2011 As a % of Rental Revenue 6

7 Portfolio Fundamentals As at March 31, 2011 Focus on the six Canadian high growth markets, which are: Toronto, Ottawa, Montreal, Calgary, Edmonton, and Vancouver Only six metropolitan markets within Canada have in excess of one million people Approximately two-thirds of our revenue is from properties within the six high growth major Canadian markets Annualized Rental Revenue - Canada Net Leasable Area - Canada 7

8 8 Top Ten Tenants

9 Unmatched Breadth of Tenant Relationships Top 10 Canada & US 6,750 tenancies capturing the top Canadian and American retailers No tenant represents more than 4.6% of annualized rental revenue TOP 10 TENANT NAME ANNUALIZED RENTAL REVENUE NUMBER OF LOCATIONS TOTAL AREA OCCUPIED (sq. ft. in 000s) WEIGHTED AVG REMAINING LEASE TERM (yrs) 1 Famous Players/Cineplex/Galaxy Cinemas 4.6% 29 1, Walmart 4.6% 27 3, Metro/A&P/Super C/Loeb/Food Basics 4.5% 56 2, Canadian Tire/PartSource/Mark's Work Wearhouse 3.6% 59 1, Zellers/The Bay/Home Outfitters 3.3% 42 2, Winners/HomeSense/Marshalls 2.9% 60 1, Loblaws/No Frills/Fortinos/Zehrs/Maxi 2.6% 25 1, Staples/Business Depot 2.2% Reitmans/Penningtons/Smart Set/Addition-Elle/Thyme Maternity 1.7% Harvey's/Swiss Chalet/Kelsey's/Montana's/Milestone's (Cara) 1.7% Target has agreed to take 21 of the 34 Zellers stores in RioCan s portfolio in their first round of selections. Based on the portfolio today Target would be RioCan s 8th largest tenant representing 1.7% of annualized rental revenue and would occupy 2.3 million square feet.

10 Target Entry to Canada Target has selected the initial tranche of locations that they wish to acquire. Included in this first tranche of 105 locations are 21 locations across five provinces that are owned by RioCan and its partners currently occupied by Zellers. All 21 of these locations will be converted to, and open as, Target stores. Target has committed substantial capital to remodel and renovate the selected locations, which will serve to modernize and bring the stores to a format that is in keeping with a typical Target store. RioCan will be Target s largest landlord in Canada. Any remaining locations not selected by Target will continue to be leased by Zellers until the end of the term of the current lease. 10 This transaction highlights the intrinsic value in our portfolio, and will bring tremendous potential for repositioning and the opportunity to further enhance value and cash flow growth in our centres. Edward Sonshine, President and CEO of RioCan

11 Target Entry to Canada Locations Selected in First Round 11 Location Approx. Size of current Zellers Store Alberta Millwoods Shopping Centre, Edmonton, AB 113,000 RioCan Shawnessey, Calgary, AB 123,000 RioCan Signal Hill, Calgary, AB 112,000 British Columbia Abbotsford Power Centre, Abbotsford, BC 115,000 Tillicum Mall, Victoria, BC 121,000 Ontario County Fair Mall, Smith Falls, ON 93,000 Five Points Shopping Centre, Oshawa, ON 89,000 Gates of Fergus, Fergus, ON 96,000 Millcroft Shopping Centre, Burlington, ON 116,000 Orillia Square, Orillia, ON 91,000 RioCan Durham Centre, Ajax, ON 121,000 RioCan Flamborough, Flamborough, ON 116,000 RioCan St. Laurent, Ottawa, ON 86,000 Shoppers World Brampton, Brampton, ON 121,000 Shoppers World Danforth, Toronto, ON 135,000 South Hamilton Square, Hamilton, ON 89,000 Stratford Shopping Centre, Stratford, ON 89,000 Sudbury Place, Sudbury, ON 85,000 Trinity Common Brampton, Brampton, ON 118,000 Prince Edward Island Charlottetown Mall, Charlottetown, PEI 108,000 Quebec RioCan Notre Dame, Laval, QC 116,000 TOTAL 2,253, of RioCan s 34 Zellers locations selected by Target in the first round Second round of selections is expected in September 2011 RioCan is contemplating an capital improvement program for those locations where it feels cash flow can eventually be increased as a result. Certain sites such as RioCan Notre Dame, Montreal, QC and RioCan Flamborough, Hamilton, ON have additional density that may be developed depending on tenant demand.

12 Target and RioCan s Development Pipeline St. Clair & Weston Road The St. Clair and Weston development benefits from a well-established urban node at the intersection of St. Clair Avenue and Weston Road. RioCan has completed the rezoning for its St. Clair and Weston Road development with Trinity and Canada Pension Plan Investment Board ( CPPIB ) in Toronto. Construction is anticipated to commence in The 20 acre site is ultimately expected to feature a 484,000 square foot property situated within a unique two storey retail. format Target has signed letter of intent be the anchor tenant at the site A 50% interest in this property was sold to the CPPIB in June 2008 and a 25% interest has been retained by each of Trinity and RioCan. 12

13 Unmatched Breadth of Tenant Relationships US Top Ten Tenants As at March 31, 2011, RioCan s Ten largest tenants in the US for completed acquisitions: TOP 10 TENANT NAME ANNUALIZED RENTAL REVENUE NUMBER OF LOCATIONS TOTAL AREA OCCUPIED (sq. ft. in 000s) WEIGHTED AVG REMAINING LEASE TERM (yrs) 1 Giant Food Stores/ Stop & Shop (Royal Ahold) 21.3% Lowes 3.7% HEB Grocery Stores 3.3% Bed Bath & Beyond 3.1% Best Buy 2.7% Safeway 2.6% PetSmart 2.5% Kohl's 1.9% L.A. Fitness 1.9% Home Depot 1.8% % 45 1, Giant Food Stores, RioCan s largest US tenant ranks as #12 overall in RioCan s overall portfolio and represents 1.6% of total annualized rental revenue. 13

14 Lease Rollover Profile As at March 31, 2011 Canadian Portfolio 000s Square Feet % Square Feet expiring / portfolio NLA 5.4% 9.0% 8.6% 11.1% 12.0% 14

15 Stable Occupancy Historical Occupancy Rates 1996 to Q

16 Financial Highlights Q Highlights RioCan s Operating FFO increased by 15% for the quarter ended March 31, 2011 to $90 million compared to $78 million for the same period in On a per unit basis, Operating FFO increased 9% to $0.35 per unit from $0.32 per unit for the same period in 2010; Standard & Poor s Ratings Service confirmed RioCan s corporate credit rating of BBB and revised its Outlook to Stable from Negative; Steady occupancy at March 31, 2011 of 97.4% compared to year-end 2010 and up from 97.0% March 31, 2010; Acquired interests in 9 properties in Canada at an aggregate purchase price of approximately $87 million at a weighted average cap rate of 6.6% during the quarter and subsequent to the quarter end purchased 3 properties (2 Canada, one US) at an aggregate purchase price of approximately $64 million at a weighted average cap rate of 7.0%, with an additional $153 million of assets under contract; Completed a $225 million debenture offering at 4.5% and redeemed all $200 million of the outstanding Series F debentures (bearing interest at 4.9%) due March 8, 2011, on January 20, As well, RioCan redeemed all $180 million of the outstanding Series L debentures (bearing interest at 8.3%) due April 3, 2014 on February 24, 2011; RioCan issued equity in the form of 5 million Cumulative Rate Reset Preferred Trust Units for gross proceeds of $125 million at a distribution yield of 5.25%. RioCan was the first REIT in Canada to issue preferred units; and 16 RioCan announced that it has signed a letter of intent to form an exclusive joint venture agreement with Tanger Outlet Centers, Inc. ( Tanger ) to develop U.S. style outlet centres in Canada and announced the location for its first development project with Tanger.

17 Financial Highlights IFRS Update RioCan has elected to use the fair value model for the valuation of its income properties and properties under development (collectively, Investment Property ) as provided under International Financial Reporting Standards ( IFRS ) ; The Trust determined the fair value of each income property based upon the direct capitalization income approach method of valuation. The fair value was determined by applying a capitalization rate to stabilized NOI, which incorporates allowances for vacancy, management fees and structural reserves for capital expenditures for the property. The resulting capitalized value was further adjusted, where appropriate, for extraordinary costs to stabilize the income and non recoverable capital expenditures. Individual properties were valued using capitalization rates in the range of 5.5% to 9.0% applied to stabilized net operating income ( NOI ), resulting in an overall weighted average capitalization rate for the portfolio of approximately 6.7%. Overall Portfolio March 31, 2011 December 31, 2010 January 1, 2010 Weighted Range Weighted Range Weighted Range Average Cap. Rate* Average Cap. Rate* Average Cap. Rate* Enclosed Shopping 7.40% 6.25% % 7.50% 6.50% % 8.00% 7.00% % Centre Mixed Use 6.90% 5.75% % 7.00% 6.00% % 7.20% 6.00% % Grocery Anchored 6.80% 5.75% % 7.00% 6.00% % 7.30% 6.50% % Shopping Centre Non-Grocery Anchored 6.90% 5.75% % 7.10% 6.00% % 7.30% 6.00% % Centre New Format Retail 6.40% 5.75% % 6.70% 6.00% % 6.80% 6.25% % Urban Retail 6.10% 5.50% % 6.30% 5.75% % 6.70% 6.00% % Total Weighted Average 6.70% 5.50% % 6.90% 5.75% % 7.10% 6.00% % * at RioCan s Interest 17

18 Financial Highlights Content quarter ended Dec. 31 (in millions of $ except per unit amounts) March 31, 2011 December 31, 2010 March 31, 2010 Total Revenues $237 $234 $213 Operating FFO $90 $83 $78 Operating FFO per Unit $0.35 $0.33 $0.32 Distributions to unitholders $90 $88 $85 Distributions to unitholders per Unit $0.345 $0.345 $0.345 Distributions to unitholders net of distribution reinvestment plan $71 $71 $70 Distributions to unitholders net of distribution reinvestment plan per Unit $0.27 $0.29 $0.28 Unit issue proceeds under distribution reinvestment plan $19 $17 $15 Distribution reinvestment plan participation rate 21.1% 19.3% 17.9% 18 Total assets 9,281 8,886 7,694 Debt (mortgages and debentures payable) 4,418 4,410 3,881 Debt to Total Assets 47.1% 49.1% 49.7% Debt to total capitalization 39.9% 43.6% 51.8% Interest coverage ratio n/c Debt service coverage ratio n/c Fixed charge coverage ratio n/c Net debt to Adjusted EBITDA n/c Market capitalization 6,659 5,716 4,494 Total capitalization (incl. Preferred Units) 11,207 10,126 8,375

19 Financial Highlights Net Operating Income Year over Year (Canada) nm not meaningful. (i) Same store refers to those income properties that were owned by RioCan and had consistent leasable area in both periods. (ii) Same properties refer to those income properties that were owned by RioCan throughout both periods. 19

20 Financial Highlights Net Operating Income Sequential Quarter over Quarter (Canada) nm not meaningful. (i) Same store refers to those income properties that were owned by RioCan and had consistent leasable area in both periods. (ii) Same properties refer to those income properties that were owned by RioCan throughout both periods. 20

21 Financial Highlights 2011 Outlook 21 Robust acquisition activity that was completed in 2010 will have an impact in 2011 and In the first quarter RioCan completed total acquisitions of $87 million at an average cap rate of 6.6% Additional $198 million under contract or completed since March 31, 2011 at a weighted average cap rate of 7% at RioCan s interest Additional $350 million of acquisitions in Canada and US in various stages of negotiations, Budgeted $600 million of acquisitions in Canada and the US for 2011 In 2010, RioCan completed total acquisitions of $986 million at an average cap rate of 7.6% Contractual Rent Steps of $4 million expected in 2011 Increased development activity is expected in 2011 and 2012 US tenant invasion A number of US tenants have announced their entry into Canada Target, Marshall s, J. Crew, Kohl s, Bed Bath & Beyond, Dick s Sporting Goods Interest savings on maturing debt are expected to continue in 2011 Mortgage debt maturing in 2011 currently carries an average interest rate of 5.55% providing an opportunity for RioCan to reduce interest expense at current interest rates During Q1 2011, RioCan redeemed the $180 million Series L unsecured debentures due April 2014, which carried a coupon of 8.33% and issued $225 million series O unsecured debentures with a five year term and a coupon of 4.499% resulting in annual interest savings of $6.9 million per annum RioCan has satisfied all of its debenture maturities for 2011

22 22 Impact of IFRS to Balance Sheet

23 23 Impact of IFRS to Income Statement (unaudited Canadian dollars, in millions, except per share amounts)

24 Acquisition Activity

25 Acquisition Activity Acquisitions - Canada Content 25

26 26 Acquisition Activity 2010 Acquisitions

27 Capital Structure

28 Conservative Debt Profile Debt-to-Total Assets of 47.1% at March 31, 2011; Total operating lines - $422 million with approximately $384 million available 63 properties unencumbered by debt with a fair value of $732 million as at March 31, 2011 On a rolling 12 month basis as at March 31, 2011, interest coverage was approximately 2.5x and debt service coverage was 1.9x Fixed Charge Coverage including distributions was 1.00x Net Debt to Adjusted EBITDA was 6.95x Floating rate debt - 2.2% of total debt 28

29 Leverage and Coverage Ratios & Targets (i) Interest coverage defined as: Adjusted EBITDA for the period, divided by total interest expense (including interest that has been capitalized). (ii) Debt service coverage defined as: Adjusted EBITDA for the period, divided by total interest expense and scheduled mortgage principal amortization (including interest that has been capitalized). (iii) Fixed charge coverage is defined as: Adjusted EBITDA for the period, divided by total interest expense (including interest that has been capitalized) and distributions to common and preferred unitholders. (iv) Net debt to Adjusted EBITDA is defined as: the average debt outstanding (net of cash) for the period divided by Adjusted EBITDA * adjusted to exclude interest capitalized. 29

30 Modest Leverage, Strong Interest Coverage RioCan has consistently adhered to a conservative debt policy even through periods of considerable growth Leverage of 47.1% at historical book cost at March 31, 2011; 60% max permitted under covenant Interest coverage well in excess of the 1.65x maintenance covenant IFRS 30

31 Debt Maturity Schedule Long-term, staggered debt maturity profile 5.4% Overall WAIR 4.8 Year weighted avg. term to maturity Minimal floating rate debt exposure (2.2% of total debt) Financing mortgages today at around 4.5% (dependent on term) 31

32 Leverage at Fair Value & Stock Market Value As at March 31, Net of cash

33 Capital Structure March 31, 2011 Total Assets = $9.3 billion Enterprise Value = $11.2 billion 33 Mortgages= $3.5 billion Debentures = $0.9 billion Equity = 262 million units outstanding

34 Borrowings in Q Mortgages Payable Quarter ended Dec. 31, 2010 (millions of dollars, except % data) Contractual Debt Weighted Average Contractual Interest Rate New borrowings: Fixed rate term mortgages Canada $ %* Fixed rate term mortgages US % Floating rate term mortgages - - Construction % Total $ % * includes $140 million of CMBS mortgage debt with a rate of 5.48% 34

35 Assets Available to Finance PRINCIPAL BALANCE OF DEBT MATURING (in millions except # properties) NUMBER OF PROPERTIES Fair Value of IPP At March 31, Collateral Income Properties Encumbered Assets with Debt Maturing in 2011 Encumbered Assets with Debt Maturing in 2012 Unencumbered Assets at March 31, 2011 Construction Financing on Properties Under Development (1) Unsecured Debt Maturity TOTAL 97 1, (1) Projects include components that are income producing at March 31, FV shown represents amounts in IPP only 35

36 Looking Ahead

37 37 Future Growth Drivers Organic Growth Contractual Rent Steps contractual rent steps should generate $4 million in the remaining 9 months of 2011 and $3 million in 2012 Positive leasing spreads on maturing leases should provide positive same property NOI growth US tenant demand providing additional rent growth and conversion of Zellers to Target will increase demand at those centres Closing the gap economic occupancy versus committed occupancy provides an annual NOI impact of approximately $11.7 million Acquisition Activity RioCan intends to continue to be an active acquirer in 2011 $986 million was completed in 2010 At RioCan's interest: $87 million completed in Q1 with additional $198 million completed or under contract after Mar. 31, 2011 to date RioCan is very well positioned with a strong balance sheet to capitalize on acquisition opportunities expected in 2010 and 2011 Greenfield Development completions in 2011 will begin to provide additional income New projects are expected to commence in (St. Clair & Weston, YEC) As at March 31, 2011, active development projects comprise approximately 2.6 million square feet, of which RioCan s ownership interest is approximately 1.8 million square feet. Once complete these developments should generate strong returns and improve the overall quality of the portfolio. Intensification of Existing Sites RioCan's intensification projects at Avenue Road and its Queen and Portland project are nearing completion and will come on line in 2011 YEC intensification expected to begin in 2011

38 Future Growth Drivers Organic Growth Acquisitions Greenfield Development Land Use Intensification Institutional Relationships

39 New Entrants to Canadian Market Target Corporation On January 13, 2011 Target announced that it had agreed to acquire up to 220 Zellers leasehold interests from Zellers Inc. and the Hudson Bay Company Target has selected the initial tranche of locations that they wish to acquire. Included in this first tranche of 105 locations are 21 locations across five provinces that are owned by RioCan and its partners currently occupied by Zellers RioCan is contemplating an extensive capital improvement program for those locations where it feels cash flow can eventually be increased as a result All are committed to open as Target stores Current Zellers stores selected in this round represent 2.3 million square feet 39 Letter of intent to be the anchor tenant at RioCan s St. Clair & Weston Road development site

40 Portfolio Leasing Activity In Q1 2011, in Canada RioCan has renewed 1.3 million square feet at and average rent increase of $1.17 per square foot or 8.7% Excluding fixed rent renewals, RioCan renewed 0.7 million square feet at an average rent increase of $1.40 per square foot, or 9.5% Retained 87.1% of expiring leases in Q Vacancies during Q were 269,000 square feet at RioCan s interest, of which, 327,000 square feet has been leased 40

41 Portfolio Leasing Activity Canadian portfolio 41

42 Portfolio Leasing Activity Canadian portfolio Lease Expiries for

43 Organic Growth Lease Expires Canadian Portfolio US Portfolio 43

44 Occupancy Analysis As at March 31, 2011 RioCan s committed occupancy rate of 97.4%. Included in this rate is 470,000 square feet of leased but not yet open space, resulting in an economic occupancy rate of 96.3% The gap of leased but not yet paying rent represents an additional $11.7 million of annualized rental revenue 44

45 Interest Savings RioCan s debt ladder staggers maturities such that there are no single years with a large exposure to maturing debt. This enables RioCan to take advantage of low interest rate environments and insulates the impact of higher interest rate environments. In 2010, by refinancing maturing debt with an interest rate in excess of 7% into debt with an average interest rate of 4.8% RioCan has generated annual interest savings in excess of $6 million on refinanced mortgage debt. Subsequent to the year end RioCan redeemed the $180 million Series L debentures which carried a coupon of 8.33% and issued $225 million series O debentures with a coupon of 4.499% resulting in annual interest savings of $6.9 million and extended the term 45

46 Debt Maturity Schedule Long-term, staggered debt maturity profile 5.4% Overall WAIR 4.8 Year weighted avg. term to maturity Minimal floating rate debt exposure (2.2% of total debt) Financing mortgages today at around 4.5-5% (dependent on term) In $ millions Mortgage Maturities in 2011 Average Interest Rate Potential Interest Savings if refinanced at 4.5% 4.75% 5.0% $ % $2.1 $1.6 $ As at March 31, 2011

47 Future Growth Drivers Organic Growth Acquisitions Greenfield Development Land Use Intensification Institutional Relationships

48 Future Growth Drivers Acquisitions $87 million completed in Q1 with additional $198 million completed or under contract after Mar. 31, 2011 to date Additional $350 million of acquisitions in Canada and US in various stages of negotiations $600 million of total acquisitions in Canada and the US forecasted for 2011 RioCan completed almost $1 billion of acquisitions in 2010 at a weighted average cap rate of 7.6% Financing used to complete these acquisitions has been completed at interest rates below 5% Capitalization Rate Purchase Price ($ millions) NLA Canada 7.3% 432 1,818,643 US 7.9% 554 3,839,778 Total % 986 5,658,421 48

49 Acquisition Activity 2010 Acquisitions Edmonton West Retail Centre, Edmonton, AB Gatineau Walmart, Gatineau, QC Summerwood Shopping Centre, Sherwood Park, AB 49

50 Acquisition Activity 2010 Acquisitions United States Selected Photos Riverpark Shopping Center, Houston, TX Suntree Square, Dallas-Fort Worth, TX Monroe Marketplace, Sellinsgrove, PA Creekview Centre, Warrington, PA 50

51 Future Growth Drivers Organic Growth Acquisitions Greenfield Development Land Use Intensification Institutional Relationships

52 Potential Development Activity A number of US retailers have recently announced that they will be opening stores in Canada over the next five years RioCan is in a prime position to assist these tenants with their growth needs to develop new space in Canada 52

53 Canadian Outlet Center Development On January 24, 2011 RioCan Announced that it had entered into a letter of intent to form an exclusive joint venture for the acquisition, development and leasing of sites across Canada that are suitable for development or redevelopment as outlet shopping centres similar in concept and design to those within the existing Tanger U.S. portfolio. On March 14, 2011 RioCan announced that through the joint venture it has entered into a purchase and sale agreement for a 35 acre parcel located in the GTA market of Halton Hills. 53

54 54 Tanger Portfolio Examples

55 Tanger Joint Venture Halton Hills Site Halton Hills Site 35 acre site zoned for retail Located at 401 and James Snow Parkway Excellent access to Brampton, Mississauga and Metro Toronto Development expected to begin in 2011 with completion targeted for

56 Strong Development Pipeline Greenfield developments through in-house capabilities and with partners, such as Trinity and Canada Pension Plan Investment Board (CPPIB) At March 31, 2011 Total developments comprise 8.2 million square feet, including shadow anchors RioCan s owned interest consists of 3.3 million square feet Total estimated project cost is $1.5 billion, with RioCan s interest being approx. $744 million Invested $349 million in these projects RioCan s funding obligations, before construction financing is $387 million ($37 million is for current development and $352 million is for potential future development) In addition, RioCan will fund approx. $152 million under mezzanine lending program to certain partners, primarily Trinity Developments ($15 million is for current development and $137 million is for potential future development) Generate unlevered yield between 7% to 11%, at a weighted average of 8.5% to 9.5% Projects Coming on Stream in 2011 RioCan s Urban intensification projects at Queen & Portland and 1717 Avenue Road are anticipated to be open and contributing to RioCan s results in Grant Crossing, Okotoks and Lowe s Centre Orleans are nearing completion and will begin to contribute in

57 Strong Development Pipeline St. Clair & Weston RioCan has completed the rezoning for its St. Clair and Weston Road development with Trinity and Canada Pension Plan Investment Board ( CPPIB ) in Toronto. Construction is anticipated to commence in The 20 acre site is ultimately expected to feature a 484,000 square foot property situated within a unique two storey retail. format Target has signed letter of intent be the anchor tenant at the site 57

58 Strong Development Pipeline RioCan Centre Belcourt RioCan is nearing completion of its 39 acre site at Lowe s Centre Orleans at Innes Road and Belcourt Boulevard in Ottawa, Ontario into a 398,000 square foot new format retail centre. This joint venture development with our partner, Trinity, is anchored by Lowe s Home Improvement Warehouse which owns its own location and has commenced operations. Other major tenants at the property include Allstate Insurance, CIBC, and Empire Theatres, which have all commenced operations. Construction is expected to commence in 2011 on an additional phase, which will feature a national supermarket tenant of approximately 35,000 square feet. Grant Crossing Construction has commenced at RioCan s joint venture development on Hazeldean Road, in Ottawa. This 33 acre site is currently being developed into a 403,000 square foot new format retail centre. The site will be anchored by Lowe s Home Improvement Warehouse, which will own its own store. Lowe s opened in late RioCan has also commenced construction of the first phase of this property which will include Michael s, Winners, HomeSense, and Bouclair. 58

59 Strong Development Pipeline Cimarron Shopping Centre RioCan has commenced construction at its Okotoks site in Okotoks, Alberta, located approximately 40 kilometres south of Calgary. This 31 acre property is a joint venture development with Trinity and is currently being developed into a 434,000 square foot new format retail centre. The site is anchored by a 93,000 square foot Home Depot, which owns its own store. Costco, which will also own its own location and opened in the third quarter of A 25,000 square foot Winners commenced operations in the first quarter of

60 Strong Development Pipeline East Hills This 148 acre site located in Calgary, Alberta is currently being developed into a 1.6 million square foot regional new format retail centre. The East Hills development is planned in three phases. Phases I and III comprise approximately 111 acres. Phase I of the property will be coowned with CPP 37.5%, Trinity, and Lansdowne 12.5%. Phase II, comprises approximately 37 acres, and will be co-owned with CPP, Tristar, Trinity and Lansdowne. Jacksonport Jacksonport, located at 36th Street NE and Country Hills Boulevard NE in Calgary, is a 105 acre development site. Will be developed into a new format retail centre with CPPIB and Trinity Upon completion, the development is expected to feature approximately 1.1 million square feet of retail space. 60

61 Strong Development Pipeline Windfield Farms This 160 acre site located in Oshawa, Ontario is currently being developed into a 1.2 million square foot regional new format retail centre. RioCan s ownership interest in the property is 33.3%. The site is being developed with two partners. 61

62 Future Growth Drivers Organic Growth Acquisitions Greenfield Development Land Use Intensification Institutional Relationships

63 Land Use Intensification Capitalize on trend in Canada s six high growth markets towards densifying existing urban locations, driven by: Prohibitive costs of expanding infrastructure beyond urban boundaries Environmental concerns Maximizing use of mass transit Generate high yields as land is already owned 63

64 Land Use Intensification Eglinton Subway Extension Proposed subway extension along Eglinton Avenue through midtown Toronto will provide multiple intensification opportunities for RioCan at its properties along Eglinton. City of Toronto has said that they will rezone areas surrounding new subway stops to permit higher density developments. 64

65 Yonge Eglinton Centre Toronto, Ontario 65 One of RioCan s largest acquisitions at $223 million (acquired in January 2007) 750,126 sq. ft. of office area and 264,391 sq. ft. of retail area RioCan has launched a thorough revitalization and expansion plan that will capitalize on the area s residential intensification Improvements to parking increased revenues by $500,000 46,000 sq. ft. of new retail, and a connection to the office towers and ingress/egress to the food court and subway A combined 12-storey, 210,000 sq. ft. expansion of the office towers received Toronto City Council approval for its development plans and is currently submitting plans for site plan approval, and subject to receipt of all approvals, it is expected that construction can begin in 2011 RioCan s leasing and capital improvement efforts have resulted in significant increases in NOI and occupancy

66 66 Creating New Cash Flow Sources RioCan Yonge Eglinton Centre

67 67 Creating New Cash Flow Sources RioCan Yonge Eglinton Centre Proposed Retail Addition

68 Creating New Cash Flow Sources RioCan Yonge Eglinton Centre Proposed Vertical Addition Potential to add 210,000 square feet of office space 68

69 Urban Intensification 1717 Avenue Road, Toronto, ON Rezoning urban properties to accommodate mixed use projects became RioCan REIT s focus in the last several years 1717 Avenue Road, Toronto 69 Assembled a city block over four year period located in one of the busiest nodes in Toronto on Avenue Road, between Fairlawn Avenue and St. Germain Avenue The block was made up of four, one storey, properties, the largest being 21,000 sq. ft. strip centre anchored by an LCBO and Blockbuster Ideal property for redevelopment into a mixed-use facility, in keeping with the trend of urban intensification Residential air rights sold to Tribute Communities, who are developing this mixed-use property RioCan REIT retained ownership of the retail portion and shares in a portion of the profits created on the sale of the condominiums Bank of Montreal and Pharma Plus commenced operations in March 2011 The residential component is 90% sold The retail component is 90% leased

70 Urban Intensification Queen & Portland, Toronto, ON One acre parking lot acquired in January 2006 Southwest corner of Queen and Portland Streets, occupying the entire length of the block Ideal property for redevelopment into a mixed-use facility, in keeping with the trend of urban intensification Development includes retail footprint - Loblaws occupying the bulk of the ground floor and all of the second floor, with a flagship Joe Fresh store and a Loblaws supermarket, while Winners will be occupying the third floor Total retail space is 91,000 sq ft over three levels - 100% leased Five-storey residential condominium, above the retail, unaffected by change 95% sold Will be substantially complete by the third quarter of Residential air rights sold to Tribute Communities, who will develop this mixed-use property 70 RioCan REIT retained ownership of the retail portion and shares in a portion of the profits created on the sale of the condominiums

71 Tillicum Centre Victoria, BC Acquired in July 2002, expansion initiated in ,000 sq. ft. addition anchored by introduction of two marquee tenants Fabricland relocated to a larger store and TD Bank also took occupancy during phase 2 Mixed-use expansion of will feature 294,000 sq. ft. of residential uses In addition to improving tenant quality and aesthetics, the return on investment ( ROI ) since acquisition has increased by more than 100 bps 71

72 Future Growth Drivers Organic Growth Acquisitions Greenfield Development Land Use Intensification Institutional Relationships

73 Institutional Relationships Through the years RioCan has developed strong institutional relationships Leverage RioCan s capital to enhance returns and increase scale of investments Generate additional revenue streams Property and asset management fees 73

74 74 Institutional Relationships Strong Partnerships

75 Institutional Relationships RioKim Joint Venture RioCan REIT and Kimco Realty Corporation, a U.S. REIT listed on the NYSE which also focuses on the ownership of shopping centres, each have a 50% interest in RioKim joint venture Invested over $1.2 billion in 45 properties since 2001 comprising over 9.3 million sq. ft. of GLA In September 2008, created a second joint venture partnership with Kimco (RioKim II) with the acquisition of a 10 properties portfolio in central and eastern Canada RioCan provides asset and property management, development and leasing services to RioKim Brentwood Village Tillicum Centre 75

76 Institutional Relationships CPPIB Joint Venture RioCan Centre Burloak - Before In October 2004, RioCan REIT and CPPIB announced an agreement to acquire premier regional power centres in Canada on a 50/50 basis as a core, long-term holding strategy Today, RioCan and CPPIB are partners in over 1.3 million sq. ft. of completed regional power centres and approximately 3.0 million sq. ft. of planned development projects RioCan Centre Burloak - After RioCan provides property and asset management, leasing, development and construction management services for the co-ownership 76

77 Institutional Relationships CPPIB Strategic Alliance Grandview Corners Acquired in December 2009 on a basis Unique asset located in the Greater Vancouver Area market of Surrey Diverse and strong tenant mix 42 acre site 529,827 sq. ft. anchored by a 217,278 sq. ft. Walmart Other major tenants include The Brick, Future Shop, Indigo 77

78 Institutional Relationships CPPIB Strategic Alliance - St. Clair & Weston RioCan has completed the rezoning for its St. Clair and Weston Road development with Trinity and Canada Pension Plan Investment Board ( CPPIB ) in Toronto. Construction is anticipated to commence in The 20 acre site is ultimately expected to feature a 484,000 square foot property situated within a unique two storey retail. format Target has signed letter of intent be the anchor tenant at the site 78

79 Institutional Relationships CPPIB Strategic Alliance In September 2008 the Trust and Trinity sold a 50% non-managing interest in two developments to CPP Investment Board. The two developments are Jacksonport located in Calgary, Alberta and St. Clair Avenue and Weston Road located in Toronto, Ontario. Additionally, in October 2008 RioCan and Trinity sold a 37.5% non-managing ownership interest in East Hills, phases I and III, a development featuring approximately 115 acres in Calgary, Alberta, to CPP Investment Board. East Hills RioCan has successfully completed the rezoning requirements for its East Hills development with Trinity, CPPIB and the original vendor in Calgary, Alberta. The East Hills development consists of three phases. Phase I and III comprise approximately 111 acres and Phase II comprises approximately 37 acres. Jacksonport Jacksonport, located at 36th Street NE and Country Hills Boulevard NE in Calgary, is a 105 acre development site. Will be developed into a new format retail centre Upon completion, the development is expected to feature approximately 1.1 million square feet of retail space. 79

80 Summary Canada s largest REIT Seasoned management team Excellent portfolio, solid tenants and diversified Focus on urban markets 87% of annualized rental revenue from national and anchor tenants Conservative debt profile and access to capital Strong institutional relationships Solid development pipeline 80

81 Appendix A Senior Management

82 Experienced Management Team 82 Extensive experience in Canadian real estate market Multi-disciplinary team with experience across a wide spectrum of real estate classes EDWARD SONSHINE, O.Ont., Q.C. President & Chief Executive Officer, RioCan REIT CEO of RioCan REIT since late 1993 and has overseen its growth from an asset base of under $100 million to its current enterprise value which is in excess of $11 billion Previously practiced law for 15 years, during which he was awarded his Queen s Counsel in 1983 Member of the board of directors of Royal Bank of Canada, Chair of Chesswood Income Fund and Chair of Mount Sinai Hospital Foundation FREDERIC WAKS Executive Vice President & Chief Operating Officer, RioCan REIT COO of RioCan REIT since 1995 Began real estate career in 1981 with Royal LePage, where he earned the honourable designation of Rookie of the Year in the Commercial Division and President s Round Table In 1984, he joined First Plazas as Vice President of Leasing/Marketing. Moved to Dominion Trust in 1988, where he took on the position of Senior Vice President. From 1993 to 1995, acted as Vice-President, Retail Leasing for Confederation Life. RAGS DAVLOOR, CA Senior Vice President & Chief Financial Officer, RioCan REIT CFO of RioCan REIT since 2008 Over 25 years of real estate, management, finance, accounting and tax experience Began his career with Arthur Anderson & Co where he spent 8 years in audit, tax and advisory roles, followed by over 10 years at O&Y Properties and O&Y REIT ultimately becoming CFO, and prior to coming to RioCan at TD Securities as a Vice President and Director in corporate finance for two years, where he was focused on real estate industry coverage.

83 Appendix B Supplemental Information Package

84 RioCan Yonge Eglinton Centre 2300 Yonge Street Suite 500, PO Box 2386, Toronto, ON /