MANAGEMENT INVESTOR PRESENTATION Second Quarter 2018 August 9, 2018
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 June 30, 2018. RioCan uses these measures to better assess the Trust s underlying performance and provides these additional measures so that investors may do the same. PEER DATA PRESENTATION 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 www.sedar.com. 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. RioCan data and statistics are based on June 30, 2018 information. Peer group included published results where provided from First Capital Realty Corp. (FCR), SmartCentres REIT (SRU.UN), Choice Properties REIT (CHP.UN), CT REIT (CRT.UN), and Crombie REIT (CRR.UN). Certain slides contain a peer comparison that was based on the respective issuer s reported information as at June 30, 2018. 2 2
ABOUT RIOCAN GROWTH DRIVEN BY INSIGHT Enterprise Value BC Quick Facts One of Canada s largest REITs, focused on the ownership, management and development of high quality, necessity based retail, increasingly mixed-use properties in Canada s six major markets Founded in 1993 25 year track record Robust 26.2 M sf development pipeline, 12.1 M sf or 46% already approved for zoning mostly mixed-use Diversified and evolving tenant mix $13.7 B Number of Properties 267 Net Leasable Area (NLA) 41.9M sf Same Property NOI (Q2 2018) 2.1% Major Market Same Property NOI (Q2 2018) 2.5% Committed Occupancy 96.8% Major Market Committed Occupancy 98.0% GTA Focus - % of Annualized Rental Revenue 43.5% Peer Average 1 24.0% Revenue from National Tenants 84.3% Average Net Rent $18.20 Renewal Spread Q2 2018 4.2% Rated BBB with stable outlook by S&P and BBB (high) by DBRS 1. Source: company reports; Peers: FCR, CHP, CRT; no data on CRR and SRU Annualized Revenue from Six Major Market: 81.4% Vancouver 4.8% ON RioCan NLA 5.5% Edmonton Calgary 10.1% 11.9% Ottawa RioCan NLA including incremental NLA from Development* Montreal Toronto 5.6% 43.5% Robust Development Program Tremendous source of future NAV growth 22.2M incremental NLA or 56% of existing NLA 2 39.8M existing IPP NLA 2. Includes incremental NLA of 22.2M sf plus 4.0M sf that is currently income producing. Assumes all development projects per the MD&A for the period ended June 30, 2018 are completed and assumes no additional development, acquisitions, or dispositions
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 58.3% of annualized NOI 4
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 CANADA S MAJOR MARKET 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 5
CANADA S SIX MAJOR MARKETS WHERE THE POPULATION GROWTH IS Cumulative Population Growth 2006 as Base Year 64.6% 26.2% 8.7% 3.7% 8.1% 17.8% 2006 2011 2017 2036 Forecast Six Major Markets Secondary markets Cumulative population growth between 2006 and: 2017 2036 Forecast Six major markets 26.2% 64.6% Secondary markets 8.1% 17.8% By 2036, more than half of Canadians will live in Canada s six major markets 2006, 2017 Data: Statistics Canada 2036 Data: Statistics Canada, Provincial and Municipal population forecasts 6
CANADA S MAJOR MARKET PORTFOLIO WHERE CANADIANS SHOP, LIVE AND WORK Closed/Firm/Conditional Dispositions Disposition Progress as of Aug. 7, 2018 Transaction type Value (M) 58% of Disposition Target Closed and Firm $876 Conditional $279 Total to Date $1,155 Weighted Average Cap Rate 6.52% Sale prices to-date are materially in line with IFRS value $1.2B progress since the October 2017 announcement representing approximately 60% of the $2.0B disposition target Dispositions span a broad range of secondary markets 7
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. 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. 8
CANADA S MAJOR MARKET PORTFOLIO WHERE CANADIANS SHOP, LIVE AND WORK Major Market Revenue 81.4% >90% GTA Revenue Focus 43.5% >50% Avg. Age Portfolio (yrs.) 24 19 Q2 2018 Vision Q2 2018 Vision Q2 2018 Vision Higher concentration of revenue from the fastest growing markets in Canada Higher concentration of revenue from the GTA, Canada s largest and most important financial market Enhanced growth profile Improved cost structure 9
GREATER TORONTO AREA (GTA) FOCUS PERCENTAGE OF RENT FROM THE GTA EXCEEDS OUR PEERS REI Peer Average 41.9% 42.8% 41.7% 41.7% 40.9% 43.5%* 34.6% 36.8% 32.0% 24.0% CONSISTENTLY ABOVE 95% 25.2% 25.6% 22.0% 23.1% 23.3% 24.0% 2011 2012 2013 2014 2015 2016 2017 Q2 2018 Source: company reports; Peers: FCR, CHP, CRT; no data on CRR and SRU * Effective Jan 1 2018, the Trust includes Hamilton in the GTA as the Trust believes that Hamilton is a high growth market that forms part of the contiguous urban region and has strong rapid transit connections to Toronto. Strong, consistent, industry leading presence in the Greater Toronto Area, which has one of the highest population and economic growth profiles in the country 10
GREATER TORONTO AREA (GTA) FOCUS INDUSTRY LEADING PRESENCE IN THE TORONTO CORE AND GTA RioCan First Capital SmartCentre REIT 11
CANADA S MAJOR MARKET PORTFOLIO WHERE CANADIANS SHOP, LIVE AND WORK Avg. Income (5km radius) Avg. Population (5km radius) ~$102k ~$111k ~$120k ~157k ~205k ~212k 2017 - All Markets 2017 - Major Markets 2020 2017 - All Markets 2017 - Major Markets 2020 Higher concentration (~30% increase in average population density) of a more desirable demographic with stronger household income Improved portfolio quality; operating efficiencies, newer assets, and less capex * Vision represents the average population and average income within a 5km radius of RioCan properties after completion of the Trust s over $2.0B disposition targets. The 2017 data are based on RioCan s portfolio as at December 31, 2017. Source: Environics Analytics. 12
CONSISTENT GROWTH IN FUNDS FROM OPERATIONS FROM CONTINUING OPERATIONS 3-Year CAGR for Continuing Operations FFO/Unit*: 9.9% $2.50 $2.00 $1.50 85.5% 84.8% $1.65 $1.94 83.6% $1.68 $1.79 78.8% 78.0% 86.0% 84.0% 82.0% 80.0% 78.0% $1.00 $0.50 $1.34 Includes $88.3M (or $0.28/unit) Target Settlement $1.62 $1.53 Well-timed exit from U.S. retail market $1.78 $0.92 76.0% 74.0% 72.0% 70.0% $0.00 2014 2015 2016 2017 6 mths 2018 Continuing Operations FFO/Unit Discontinued Operations FFO/Unit (US) FFO Payout Ratio** 68.0% * Continuing and discontinued operations FFO per unit is calculated based on disclosed total continuing and discontinued operations FFO, respectively, divided by the weighted average number of units (diluted) for the respective years. ** FFO Payout Ratio calculated on a rolling 12 month basis 13
OPTIMIZING PORTFOLIO FOR CURRENT MARKET ENVIRONMENT GROWING Home Furnishings, Food, Fitness, Beauty and Value Retailers continue to be bright spots in the retail landscape, with numerous brands adding additional physical locations Small format service-oriented retail performing well, numerous tenants expanding Continued urban centre growth from national gym operators and expansion of smaller, boutique-type operators. Quick Service Restaurants aggressively growing Value retailers such as Winners, Marshalls, Dollarama, etc. are rapidly expanding New specialty grocers are appearing and others, such as Nations and Farm Boy are expanding EVOLVING Shifting demand for large formats Some pressure from the larger format tenants upon renewal as they have options to relocate and right-size their existing boxes Relocations open up opportunities for large format, value retailers who are aggressively growing (e.g. TJX and Lowe s) DECLINING Full price fashion continues to struggle Department stores reporting soft fashion sales Bankruptcies continue both north and south of the border Small format fashion retailers not opening new locations 14
CHANGING TRENDS IN HOUSEHOLD SPENDING Source: GWL Realty What is driving change in the retail sector beyond online shopping March 14, 2018 15
EVOLVING & RESILIENT TENANT MIX ADAPTING TO THE EVER CHANGING RETAIL ENVIRONMENT Retailer Category % of Rent Q2 2018 Change since 2007 Key Brands Grocery/ Pharmacy Liquor/ Restaurant 28.0% 3.5% Personal Services 20.3% 4.2% Value Retailers 14.6% 2.0% Specialty Retailers 10.2% 0.1% Furniture and Home 10.1% 1.7% Department Stores/ Apparel 8.9% (7.4%) Movie Theatres 4.6% (1.7%) Entertainment and Hobby 3.3% (2.4%) 16
STAGGERED LEASE MATURITY WITH RENT GROWTH OPPORTUNITY LEASE MATURITY AND EXPIRING RENT $24.00 Lease Maturity Expiring Rent 30.0% $22.00 $21.14 25.0% $20.00 $20.03 $19.12 $19.29 $18.88 20.0% $18.00 $16.00 12.1% 10.8% 12.1% 9.6% 15.0% 10.0% $14.00 $12.00 3.0% 5.0% $10.00 2018 remainder 2019 2020 2021 2022 0.0% Favorable expiry profile that balances stability with opportunity for growth on renewal Average lease term for Top 30 tenants 7.4 years 17
CONSISTENTLY HIGH OCCUPANCY COUPLED WITH STRONG RENT GROWTH 110.0% Target Departure 100.0% 97.4% 97.6% 97.4% 96.9% 97.0% 94.0% 95.6% 96.6% 96.8% 19 90.0% $18.20 18 80.0% 70.0% $16.69 $17.11 $17.59 $17.75 17 60.0% $15.70 $16.08 16 50.0% $14.82 $15.21 15 40.0% 30.0% 14 20.0% 2010 2011 2012 2013 2014 2015 2016 2017 Q2 2018 13 Committed Occupancy Average Net Rent Average net rent growth also reflects the improvements in the overall quality of the portfolio as RioCan increased its major market focus over time 18
STRONG RETENTION RATIO 95.0% 90.0% 85.0% 88.1% 89.7% 85.7% 85.8% 91.1% 91.8% 80.0% 75.0% 70.0% 65.0% CONSISTENTLY ABOVE 95% 60.0% 2013 2014 2015 2016 2017 Q2 2018 RioCan has maintained a consistent strong retention rate Strong track record of tenant retention averaging 87.9 % since 2013 No peer comparison available as most peers no longer report this statistic 19
WELL DIVERSIFIED NATIONAL TENANT BASE NO SINGLE TENANT OVER-EXPOSURE As at June 30, 2018 Top 10 Tenant Name Annualized Rental Revenue Number Of Locations NLA (Sq. Ft. in '000s) Weighted Avg Remaining Lease Term (Yrs) 1 5.0 % 76 1,994 7.7 2 4.3 % 75 1,885 6.4 3 4.1 % 27 1,431 7.7 4 4.1 % 70 1,885 6.5 5 3.6 % 24 2,896 9.9 6 3.4 % 45 1,872 7.6 Recipe Unlimited (formerly Cara) (i) (ii) 7 1.8 % 96 471 7.6 8 1.7 % 12 1,419 10.1 9 1.7 % 78 708 5.8 10 1.7 % 23 823 8.5 TOTAL 31.4% 526 15,384 7.7 Peer Average (iii) 62.3%* -- -- -- (i) Loblaws includes Shoppers Drug Mart, No Frills, Fortinos, Zehrs and Maxi. (ii) Canadian Tire Corporation includes Canadian Tire/PartSource/Mark s/sport Mart/ Sport Chek/Sports Experts/National Sports/Atmosphere. (iii) Source: company reports; Peers: FCR, CHP, CRT, CRR and SRU as at June 30, 2018 20
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 Andrew Duncan SVP Developments 18 years in Development, 12 years in Real Estate Jonathan Gitlin, COO 18 years in Real Estate Jeff Ross, SVP Leasing & Tenant Coordination 30 years in Real Estate Qi Tang, SVP and CFO 20 years in Finance & Real Estate John Ballantyne, SVP Asset Management 24 years in Real Estate Fully integrated REIT with all disciplines in-house including: Investments Leasing Asset Management Development & Construction Property Management Finance, Legal and Human Resources Trusted and respected, with deep industry knowledge and relationships 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 21
STRATEGIC PILLAR ONE: DRIVING ORGANIC GROWTH OPTIMIZING AND FUTURE PROOFING OUR PORTFOLIO CANADA S MAJOR MARKET PORTFOLIO DRIVING ORGANIC GROWTH Evolving tenant mix and revenue growth Improving operating efficiency and cost structure Redeveloping prime assets Optimize pads and add additional GLA Drive ancillary revenues Continuous portfolio pruning 22
DRIVING ORGANIC GROWTH CASE STUDY Burlington Mall, Burlington Ontario 2018 $65M redevelopment and renovation of this iconic centre in Canada s Best Mid-Sized City (voted five years in a row) Rebranded to Burlington Centre Renovated food court Strategically remerchandised (former Target location): Confirmed new tenancies include Indigo, Denninger s Foods of the World, Sportchek and Winners Metric NOI will increase by 42% At Acquisition (2013) Capital Invested Anticipated Stabilized Value $206.5M $55M $287.5 M NOI $9.9M - $14.1M 23
DRIVING ORGANIC GROWTH CASE STUDY RIOCAN YONGE EGLINTON CENTRE, TORONTO Intersection: Yonge St. and Eglinton Avenue East Ownership: 100% Total GLA: 1,056,285 sf Property Concept: Mixed-use Project Completion: 2016 Surfacing Value: Purchase Price (2007): $223 million Capital Invested $110 million Current Value: $574 million NOI at acquisition: $13 million Value Stabilized NOI: $26 million 73% increase in value over costs Strategically evolved tenant mix to meet consumer needs Incremental revenue through leasing of the digital screens on the building interior and exterior 24
CAPITALIZING ON RE-LEASING OPPORTUNITIES TARGET RE-LEASING & SEARS UPDATE Target Re-leasing Re-leasing of former Target space 1.7 M sf Substantially completed Q4 2017 Annual net rent revenue from releasing tenants: $14.0 M Annual rent revenue paid by Target of $10.6 million Annual net rent increase over Target rent: $3.4 million or 32.1% Significant capital recovered by way of settlement with Target of $88.3M (at RioCan s interest) Greater customer appeal and traffic Stronger, more diversified tenants Sears Update Sears departure left 313,000 sf of space to re-lease at RioCan s interest (vs. Target 1.7M sf) Completed leases, conditional leases or leases in advanced negotiations to replace 126% of the net revenue and while only representing 82% of the former Sears GLA Leasing is much less complex than leasing former Target spaces Replacement tenants will be stronger and more diversified Properties will have broader customer appeal and replacement tenants will drive incremental traffic 25
COMPLETED DEVELOPMENTS CASE STUDY SAGE HILL CROSSING, CALGARY AB Location Located in a growing residential suburbs in Northwestern Calgary Ownership Structure 50% (JV with KingSett) Property Type New format retail Substantially completed in Q4 2017 380,000 sf Walmart and Loblaws anchored centre The first Loblaws City Market banner in Calgary Excellent mix of strong national tenants: London Drugs, Dollarama, Scotiabank, McDonalds, Royal Bank of Canada Demographics in 5km radius: Population: 95k Average household income: $145k 26
ENVIRONMENTAL SOCIAL AND GOVERNANCE AT RIOCAN EMBEDDING SUSTAINABILITY Well defined sustainability policy and sustainability governance structure Participation in the Global Real Estate Sustainability Benchmark ("GRESB") Survey Inclusion of a new performance indicator for management RioCan was recently included in the MSCI Canada IMI Women s Leadership Select Index Employee survey was conducted to collect feedback on sustainability drivers Establishment of a baseline for sustainability: energy, water and Greenhouse Gas ("GHG") emissions Establishment of sustainability standards for our income producing properties and development projects Pursuing Toronto Green Standard (TGS) Tier II for The Well and Sunnybrook Plaza projects, and LEED Gold & TGS Tier II for its Yonge Sheppard Centre project Extension of Enwave s existing Deep Lake Water Cooling network via a new 12 million-litre energy storage facility at The Well (see image) to provide a low-carbon, resilient cooling and heating option for the property and Proposed the surrounding communities Geothermal energy system for heating and cooling to be incorporated at RioCan s Gloucester project in Ottawa Proposed 27
STRATEGIC PILLAR TWO: UNLOCKING INTRINSIC VALUE REALIZING THE 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 Strategic alliances to mitigate risks and create steady fee stream Robust and growing pipeline of well located sites with substantial zoning approved Strong development team with a wealth of experience in mixed-use residential development projects from planning, design to completion 28
SOURCES OF TREMENDOUS NAV GROWTH ROBUST DEVELOPMENT PIPELINE 22.2M incremental NLA 1 or 56% of existing NLA 2 39.8M existing IPP NLA RioCan NLA RioCan NLA including incremental NLA from Development* Strong, major market, urban focused development pipeline with high quality projects in prime locations, predominantly transit oriented Risk mitigation via staggered development starts and the use of strategic alliances Maintain a disciplined approach to capital allocation and maintain leverage in the 38%-42% debt to asset range, although leverage as of a quarter end may temporarily exceed the upper target due to NCIB and disposition timing 1. Total development pipeline of 26.2M sf includes incremental NLA of 22.2M sf plus 4.0M sf that is currently income producing 2. Assumes all development projects per the MD&A for the period ended June 30, 2018 are completed and assumes no additional development, acquisitions, or dispositions 29
TREMENDOUS SOURCES OF CASH FLOW & NAV GROWTH PIPELINE IS EXPECTED TO CONTINUE TO GROW Total Pipeline by Zoning Status (26.2M sf) Total Pipeline by Project Type Future est. density, 8.7m sf, 33.1% Zoned, 12.1m sf, 46.3% Mixed-use Residential 25.2m sf: 96.3% Residential & Air Rights 17.1m sf: Commercial 7.1m sf: Application submitted, 5.4m sf, 20.6% Commercial 1.0m sf: 3.7% Residential Inventory 1.0m sf: 46% or 12.1M sf with zoning approved and nearly 100% is located in the six major markets Particularly valuable in today s more challenging regulatory environment Uncertainty in Ontario regarding transition to the newly implemented Local Planning Appeal Tribunals given that its mandate is unclear * Includes 22.2M sf of incremental NLA and 4.0M sf of NLA which is currently income producing. All data at RioCan s interest. 30
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 6-7 31
TREMENDOUS SOURCES OF CASH FLOW & NAV GROWTH SELECTED DEVELOPMENT COMPLETIONS OVER THE NEXT THREE YEARS Yonge & Eglinton Northeast Corner (ecentral) Gloucester Phase I (Frontier) Dupont Street (Litho) King Portland Centre (Kingly) Bathurst College Centre Brentwood Village (Brio) College & Manning (Strada) At RioCan s Interest 2018 Q3-Q4 2019 2020 Est. Completed NLA ( 000s sf) 1 523 652 461 Est. PUD Completions (millions) 2 $382 $331 $294 Annualized stabilized NOI from active projects with detailed costs estimates to be completed between Q3 2018 and end of 2020 is expected to be approximately $50 million at RioCan's interest. The annualized stabilized NOI of a project is an estimate of stabilized NOI following completion of a project on a full year basis. NOI to be reported for the remainder of 2018 to 2020 will be different from this range, due to the partial year effect in a given year as a result of project completion timing and the effect of property lease up period. 1. Estimated NLA completions are NLA transferred to IPP upon projects completion in each period, which are estimated as 90% of gross floor area (GFA) 2. Estimated PUD cost completions are fully loaded IFRS costs including land that are to be transferred to IPP upon projects completion in each period, net of land and air rights sales for active projects with detailed cost estimates 32
DEVELOPMENT TEAM DEVELOPMENT TEAM STRONG EXPERIENCED AND CAPABLE TEAM OF PROFESSIONALS 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 & Zoning Process Design Analytics Residential Construction 33
DEVELOPMENT TEAM 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 34
UNLOCKING THE VALUE OF TRANSIT-ORIENTED ASSETS 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%+ 7 Selected Urban Toronto RioCan Developments 1 2 3 4 5 6 7 8 9 10 '000s sf (100%) Yonge-Sheppard Centre 362 555 College 108 King Portland Centre 423 Yonge & Eglinton 712 The Well & Building 6 2,955 740 Dupont 180 Sunnybrook Plaza 316 Queensway 538 Dufferin Plaza 449 RioCan Leaside Centre 1,324 11 12 13 14 Lawrence Square 94 RioCan Hall 736 491 College - complete 24 Bathurst College Centre 139 SELECTED URBAN TORONTO 8,360 13 Legend Under Development Completed Development Future Development Potential TTC Existing TTC Under Development TTC Station Planned Rapid Transit Line *Average demographics within a 5km radius of RioCan Urban Toronto development sites 35
UNLOCKING THE VALUE OF TRANSIT-ORIENTED ASSETS BRAMPTON/MISSISSUAGA HIGHLIGHTS: SELECTED HIGH DENSITY LOCATIONS Selected Brampton/Mississauga RioCan Future Development Potential '000s sf (100%) 1 1 2 3 Shoppers World Brampton 4,178 RioCan Sandalwood Square (Ph. I) 180 RioCan Grand Park 330 Selected Brampton/Mississauga TOTAL 4,668 With three shopping centres and approximately 82 acres of land on this LRT line, RioCan is uniquely positioned to take advantage of future intensification opportunities 2 Demographics, 5km radius Dense population*: 270,000 people+ Desirable demographic*: HH Income: $100,000+ Post-secondary education: 50%+ 3 *Average demographics within a 5km radius of selected RioCan Brampton/Mississauga development sites 36
UNLOCKING THE VALUE OF TRANSIT-ORIENTED ASSETS CALGARY HIGHLIGHTS: SELECTED HIGH DENSITY LOCATIONS 1 2 3 1 2 3 Selected Calgary RioCan Future Development Potential 1 2 3 '000s sf (100%) Brentwood Village (Phase I) 145 5 th & Third East Village 758 Southland Crossing 972 Selected Calgary TOTAL 1,875 Demographics, 5km radius Dense population*: 170,000 people+ Desirable demographic*: HH Income: $137,000+ Post-secondary education: ~60% *Average demographics within a 5km radius of selected RioCan Calgary development sites 37
UNLOCKING THE VALUE OF TRANSIT-ORIENTED ASSETS OTTAWA HIGHLIGHTS: SELECTED HIGH DENSITY LOCATIONS 2 1 Selected Ottawa RioCan Development Potential 1 2 '000s sf (100%) Gloucester/Frontier 657 Lincoln Fields 825 SELECTED OTTAWA POTENTIAL TOTAL Legend 1,482 Under Development Future Development Potential Demographics, 5km radius Dense population*: 150,000 people+ Desirable demographic*: HH Income: ~ $100,000 Post-secondary education: ~60% *Average demographics within a 5km radius of selected RioCan Ottawa development sites 38 38
UNLOCKING INTRINSIC VALUE RESIDENTIAL INTENSIFICATION GLOUCESTER RESIDENTIAL PHASE I, OTTAWA Location: Located on a 7.1 acre portion of RioCan's Gloucester Silver City Shopping Centre along new Confederation LRT line at the Blair Station in Ottawa Ownership: 50% (JV with Killam Apartment REIT) Property Type: Rental Residential, Phase I contains a 23 storey tower with 222 units (at 100%) Zoning status: Zoned Project Completion: 2019 Estimated PUD Costs (RioCan s interest): $42.6M Surfacing Value: Zoning approved for three additional residential towers containing the potential for up to 840 units Transitioned use from 77,000 sf of struggling fashion retail to a 23 story desirable rental residential building. Retail mix at our adjacent shopping centre was evolved and now includes a strong, diverse mix of tenants including Cineplex theatre, Indigo, Goodlife and numerous restaurants Proposed Demographics in a 5km radius: Population: 450k Daytime population: 457k Average household income: $164k+ Adjacent to CSIS headquarters: 2,000+ employees Leading edge development that will maximize efficiency via a geothermal energy system for heating and cooling 39
UNLOCKING INTRINSIC VALUE RESIDENTIAL INTENSIFICATION, GLOUCESTER OTTAWA (Including future phases) Proposed Zoning approved for four residential towers containing the potential for up to 840 units on a 7.1 acre portion of RioCan's Gloucester Silver City Shopping Centre 40
UNLOCKING INTRINSIC VALUE RESIDENTIAL INTENSIFICATION 740 DUPONT AVE., TORONTO, ON Location Toronto, Ontario Property Type Mixed-use retail and residential. 9-storey project with 210 rental units and 31,000 square feet of retail GLA. Firm lease with Farm Boy (23,000sf) to anchor the retail portion of the site. Ownership - 50% (JV with Woodbourne) Zoning status: Zoned Project Start / Anticipated Completion 2017 / 2020 Estimated PUD Costs (RioCan s interest): $77.0M Surfacing Value Site was acquired in 2010, formerly occupied by Grand Touring automobile until November 2017 Well located along a busy thoroughfare in a densely populated area of Toronto. A short walk to the Bloor- Danforth subway line Proposed Demographics in 5km radius: Population: ~700k Average household income: ~ $120k 41
UNLOCKING INTRINSIC VALUE RESIDENTIAL INTENSIFICATION BRENTWOOD VILLAGE, CALGARY, AB Location Located along the Northwest LRT line and adjacent to the Crowchild Parkway in Northwestern Calgary in close proximity to the University of Calgary Property Type Mixed-use retail residential, 12-storey, 165 rental units with approximately 10,000sf of retail GLA Ownership - 50% (JV with Boardwalk REIT) Zoning status: Zoned Project Start / Anticipated Completion 2018 / 2020 Estimated PUD Costs (RioCan s interest): $38.6M Surfacing Value Extracting additional value through the redevelopment of an underutilized retail portion of the site to include additional residential uses RioCan will retain a 100% interest in the remainder of the shopping centre Proposed Demographics in 5km radius: Population: ~160k Average household income: $141k+ Well located with easy access to downtown Calgary, the University of Calgary, McMahon Stadium and Foothills Hospital 42
UNLOCKING INTRINSIC VALUE RESIDENTIAL INTENSIFICATION YONGE & EGLINTON NORTHEAST CORNER, TORONTO, ON Location: At the heart of one of Toronto s busiest and most popular intersections. Unparalled access to the Yonge subway and new Eglinton Crosstown LRT Property Type: Mixed-use with retail, residential tower with 466 units and condominium tower with 623 units Ownership: 50% (JV with Metropia and Bazis) Leasing/Sales: All 623 condominium units have been presold. Retail is 88% leased (anchored by TD Bank) Proposed Rental Residential Units: 466 Units Zoning Status: Zoned Anticipated Completion: 2018 & 2019 Estimated PUD Costs (RioCan s interest): $106.3M Surfacing Value Agreement in place to acquire the partners 50% interest in the 466 unit rental residential tower at cost plus $10M Agreement in place to acquire partner s 50% interest in the retail NLA at a 7% capitalization rate upon completion of the project Demographics in 5km radius: Population: 495k Daytime population: 489k Average household income: $156k+ Condo portion of the project is 100% pre-sold Proposed 43
UNLOCKING INTRINSIC VALUE RESIDENTIAL INTENSIFICATION KING PORTLAND CENTRE, TORONTO, ON Location: Prime location in trendy Toronto s downtown west with direct access to transit Property Type: Mixed-use with office, retail and condominiums Leasing/Sales: 132 condominium units fully sold out ahead of price expectations. New office 256,000 sf (at 100%) 100% leased to Shopify and Indigo: retail all but 7,000 sf leased. Existing 55,000 sf of office space adjacent to the building is 100% leased with substantial rent upside upon project completion Ownership: 50% (JV with Allied Properties REIT) Incremental Commercial NLA: 165,000 sf at RioCan s Interest Zoning Status: Zoned Project Start / Anticipated Completion: 2016/ Late 2018 Estimated PUD Costs (RioCan s interest): $85.8M Demographics in 5km radius: Daytime population: 823k Average household income: $115k+ Office tower is targeted LEED platinum Proposed 44
UNLOCKING INTRINSIC VALUE RESIDENTIAL INTENSIFICATION SUNNYBROOK PLAZA, TORONTO, ON Location: Located on new Eglinton LRT in an affluent neighbourhood in midtown Toronto Ownership: 50% (JV with Concert Properties) Property Type: Mixed-use with one 16 storey and one 11 storey rental residential towers (approx. 427 units) Commercial NLA: 22,000 sf at RioCan s Interest Project Start / Anticipated Completion: 2020/2023 Surfacing Value: Concert paid RioCan $26.3 million in June 2017 for a 50% interest in the development. RioCan acquired the centre in 2007 for $22.8 million (100%) More than doubled the value in ten years, before significant value creation upon this project s completion. Demographics in 5km radius: Population: 450k Daytime population: 457k Average household income: $164k+ Proposed 45
UNLOCKING INTRINSIC VALUE RESIDENTIAL INTENSIFICATION 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 104k sf retail, as well as 258k sf of rental residential Ownership: 50% (JV with KingSett Capital) Zoning Status: Zoned Phased Completion: Retail 2019 Residential 2020 Estimated PUD Costs (RioCan s interest): $243.5M Surfacing Value Renovation and expansion of retail space Intensification through the addition of a new 39 storey residential tower containing 258,000 square feet of residential rental space Retail anchored by Longo s, LA Fitness, Shoppers Drug Mart, Winners, and three major banks LA Fitness took possession of their space in Q2 2018 Proposed Demographics in 5km radius: Proposed Population: 340k Daytime population: 489k Average household income: $133k+ 49,000 people pass through the site as part of their daily commute $250M (at RioCan s interest) renovation underway 46
STRATEGIC PILLAR FOUR: STRATEGIC ACQUISITIONS SELECTIVELY SEIZING OPPORTUNITIES CANADA S MAJOR MARKET PORTFOLIO 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 STRATEGIC ACQUISITIONS 47
STRATEGIC ACQUISITIONS ACQUISITIONS OF PARTNERS INTERESTS HAVE BEEN A KEY SOURCE OF GROWTH POST SALE OF US PORTFOLIO Over $1.5 Billion of Acquisitions from Partners 2015-2017 Acquisitions from other partners, $0.2B Acquisitions from CPPIB of $0.3B Acquisitions from Kimco of $0.9B Proposed Acquired more than $1.5 Billion of assets predominantly in major markets that would otherwise not be available in the market at a weighted average capitalization rate of 5.8% Acquisition from Kimco involved the purchase of a non-managing interest from a motivated seller seeking to re-focus their portfolio in the United States. 48
STRATEGIC ACQUISITIONS MIXED-USE DEVELOPMENT THE WELL TORONTO, ON Proposed 49
STRATEGIC ACQUISITIONS MIXED-USE DEVELOPMENT THE WELL, TORONTO, ON Location: 7.7 acre site situated at the gateway to downtown Toronto, at Front and Spadina. Transit oriented adjacent to the site of a proposed intercity GO Train stop. Ownership Structure: Commercial: 50% (J.V. with Allied Properties REIT Residential: 40% (J.V. Allied Properties REIT and WNUF2*) Residential Building 6: 50% (J.V. with Woodbourne ) Property Type: Mixed-use with ~500,000 sf retail, 1.1 M sf office and ~1,800 residential units (condo and rental) at 100% Zoning Status: Zoned Estimated project completion: Commercial - 2021, Residential Building 6 2022+ Estimated PUD Costs (RioCan s interest): $694.4M** net of sales proceeds from air rights Building 6: $136.4M Proposed Demographics 5KM radius: Population: 485k Average household income: $114k+ Innovative, amenity rich design including a European inspired food hall Office is targeted LEED platinum Teaming with Enwave for the first low-carbon resilient cooling and heating option for the property and surrounding community *WNUF2 holds a 20% interest in the residential portion until the sale of air rights to Tridel and Woodbourne upon completion of the underground and podium structures. ** Total estimated project costs include land costs measured at fair value of the land, soft and hard construction costs, external leasing costs, tenant inducements, construction and development management fees, and capitalized interest and other carrying costs, as well as capitalized development staff compensation and other expenses. 50
STRATEGIC ACQUISITIONS MIXED-USE DEVELOPMENT THE WELL, TORONTO ON Leasing Status Signed lease commitment with Index Exchange for 200,000 sf of office GLA in The Well Tower Lease agreement with another high-calibre office tenant for 125,000 sf of office GLA Finalizing lease agreements with two other office users representing 533,752 sf of office GLA If completed the office component will be 80% leased Surfacing Value RioCan and its partners acquired the former Globe and Mail head office and surrounding land for $170 million in 2012 and 2013 Agreement in place to sell 1.1M sf of air rights to Residential partners Tridel and Woodbourne for approximately $180 million upon completion of the underground and podium structures Upon completion, an estimated 10,000 people will live and work at the property Proposed A comprehensive signage master plan agreement has been approved by the city. Interior and exterior digital signage will generate significant ancillary revenue Proposed 51
STRATEGIC ACQUISITIONS MIXED-USE DEVELOPMENT YORKVILLE, TORONTO, ON 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 0.5M sf of luxury condominium and retail uses and up to up to 82 rental units Ownership: 50/25/25 joint venture among RioCan, Metropia and Capital Developments Zoning Status: Preparing application for ZBA Zoning Bylaw Amendment Project Start/Anticipated Completion: TBD Surfacing Value: As of February 2018 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 Demographics in 5 km radius: Population: 450k Daytime population: 457k Average household income: $164k+ 52
STRATEGIC ACQUISITIONS MIXED-USE DEVELOPMENT BATHURST COLLEGE CENTRE, TORONTO Location: Situated in the western downtown corridor in Toronto, at Bathurst Street and College Avenue. Directly across street from Toronto General Hospital Ownership Structure: 100% Property Type: 139,000 sf mixed-use office and retail Leasing status: 79% pre-leased Anchor Tenants: University Health Network (UHN), Fresh Co (Sobeys), Winners Zoning status: Zoned Estimated project completion: 2019 Estimated PUD Costs (RioCan s interest): $108.2M Proposed Proposed 53
STRATEGIC ACQUISITIONS MIXED-USE DEVELOPMENT 5th & THIRD, CALGARY, AB Location: Well located in the East Village area of downtown Calgary with direct access to the LRT Ownership Structure: 100% retail, Residential air rights sold to Embassy BOSA Property Type: Mixed-use with 161,000 sf of retail and 597,000 sf residential sold as air rights Lead Tenants : Loblaw s City Market, Shoppers Drug Mart Leasing status: 70% pre-leased Zoning status: Zoned Estimated project completion: 2021 Estimated PUD Costs (RioCan s interest): $129.7M Proposed Proposed 54
STRONG BALANCE SHEET THE FINANCIAL RESOURCES TO FUEL GROWTH AND WEATHER MARKET TURMOIL CANADA S MAJOR MARKET PORTFOLIO Low leverage Low cost of debt STRONG BALANCE SHEET Laddered debt maturity and mostly fixed rate Access to multiple sources of capital Large unencumbered assets pool generating 58.3% of annualized NOI Multiple Capital Sources Low Leverage Strong Growth 55
MEASURED APPROACH TO DEVELOPMENT Properties Under Development ( PUD ) & Inventory Max. Permitted As at June 30, 2018 Target - $1.4 B N/A PUD and Inventory as % of Gross Assets per Line of Credit Covenant 15% 10.1% ~ 10%* Investment in Greenfield Development and Inventory as % of Unitholder Equity - per Declaration of Trust 15% 5.1% N/A $1.4 Billion $300M - $400M $300M - $600M <$1.5 Billion* * In 2018 and 2019, PUD and Inventory balance may exceed the target range of 10% of gross assets or over $1.5B on a quarterly basis before a few large projects (such as YENE condo and rental towers, Kingly, Bathurst & College) are completed in late 2018 and early 2019. 56
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 CONSISTENTLY reduce capital requirements ABOVE 95% and mitigate risks Excess operating cash flows Sale of marketable securities 57
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 Detailed working drawings and costing and utilize fixed price contracts as much as possible Strategic alliances to reduce capital requirements and mitigate risks CONSISTENTLY ABOVE 95% 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 58
STRONG BALANCE SHEET PRUDENT CAPITAL MANAGEMENT & FLEXIBLE CAPITAL STRUCTURE Capital Structure Metrics CONSISTENTLY ABOVE 95% Target Q2 2018* Leverage 38% - 42% 42.4% Debt/EBITDA <8.0x 7.74x Interest Coverage >3.0x 3.78x Debt Service Coverage >2.25x 3.11x Fixed Coverage >1.10x 1.17x Unencumbered Assets N/A $8.0B Unencumbered Assets to Unencumbered Debt >2.0x 2.21x NOI % from Unencumbered Assets >50% 58.3% Unsecured vs. Secured Debt 60%/40% 59%/41% FFO Payout Ratio <80% 78.0% * Coverage and payout ratios calculated on a rolling 12 month basis 59
INDUSTRY LEADING FINANCIAL PROFILE 42.4% Leverage 47.3% Debt to EBITDA 7.7x 9.0x Debt Service Coverage 3.1x 2.5x Interest Coverage 3.8x 3.0x Source: company reports; Peers as at June 30, 2018 : CRR, CRT, FCR, CHP, SRU 60
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 CONSISTENTLY ABOVE 95% 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 61
CAPITAL MANAGEMENT STRATEGY PRUDENT CAPITAL MANAGEMENT & FLEXIBLE CAPITAL STRUCTURE 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 CONSISTENTLY ABOVE 95% 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 62
STAGGERED DEBT MATURITY AND LOW COST OF DEBT LESS IMPACTED BY RISING INTEREST RATES Scheduled principal amortization Floating Rate Mortgages and Lines of Credit Mortgages payable Debentures payable $ 000s Weighted average interest rate 2,400 2,000 1,600 1,200 800 400 0 2,147 3.64% 3.63% 3.23% 3.48% 3.23% 3.40% 938 882 976 653 424 2018 2019 2020 2021 2022 Thereafter 6.0% 5.0% 4.0% 3.0% 2.0% 1.0% 0.0% Weighted Avg. Interest Rate on Maturing Debt 63
CONTACT INFORMATION Proposed Contact Information RioCan Yonge Eglinton Centre 2300 Yonge Street P.O. Box 2386 Toronto, ON M4P 1E4 Email: ir@riocan.com (T) 1-800-465-2733 or (416) 866-3033 Proposed 64