Investor Presentation Third Quarter 2012 DISCIPLINED GROWTH

Transcription

1 Investor Presentation Third Quarter 2012 DISCIPLINED GROWTH

2 Forward Looking Statements 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 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 One of North America s Largest Retail REITS 338 retail properties in Canada & U.S. 80 million sqft total portfolio 51 million sqft owned $ 8.3 billion market cap $ 13.9 billion enterprise value ~7,350 tenancies ~86% revenue generated by national and anchor tenants 3

4 Investment Highlights Strong, reliable distribution yield provided to investors Stable, dominant, and geographically diversified portfolio of national retail tenants Disciplined growth strategy in Canada and U.S. Conservative balance sheet / financial strength and access to capital Positioned to benefit from robust acquisition activity Experienced, performance driven management team 4

5 Property Portfolio BC GTA AB SA MB ON QC QC NB NFLD 289 retail properties 44 million sqft 86.5% annualized rental revenue 49 retail properties 7.3 million sqft 13.5% annualized rental revenue PA VA MA CT TX 5 As at Sept. 30, 2012 at RioCan s interest

6 Property Portfolio - Canada Annualized Rental Revenue by Major Market Rest of Canada, 32.6% Major markets combined, 67.4% BC 3.8% 6.2% AB Vancouver 3.5% Edmonton Calgary ON QC 8.1% 37.2% Ottawa 8.6% Montreal Toronto 6 As at Sept. 30, 2012

7 Property Portfolio U.S. Regional Market Strategy & Focus Annualized Rental Revenue by State TX 53.7% 2.5% 22.9% 2.3% NH NY MA CT PA NJ MD VA RI 7.9% 0.8% 2.3% 3.7% 0.9% 3.0% 7 As at Sept. 30, 2012

8 8 Strong Tenant Relationships

9 Strong Tenant Relationships Top 10 Canada & US Combined As at Sept. 30, 2012 Top 10 Tenant Name Annualized Rental Revenue Number Of Locations Total Area Occupied (Sq. Ft. In 000s) Weighted Avg Remaining Lease Term (Yrs) 1 Walmart 4.3% 32 3, Canadian Tire Corporation (i) 4.3% 104 2, Famous Players/Cineplex/Galaxy Cinemas 3.8% 30 1, Metro/Super C/Loeb/Food Basics 3.7% 58 2, Winners/HomeSense/Marshalls 3.0% 72 1, Loblaws/No Frills/Fortinos/Zehrs/Maxi 2.5% 31 1, Staples/Business Depot 1.9% 50 1, Future Shop/Best Buy 1.8% Target Corporation 1.8% 24 1, Shoppers Drug Mart 1.7% (i) Canadian Tire Corporation includes Canadian Tire/PartSource/Mark's Work Wearhouse/Sport Mart/Sport Chek/Sports Experts/National Sports/Atmosphere

10 Strong Tenant Relationships Top 10 Canada As at Sept. 30, 2012 Top 10 Tenant Name Annualized Rental Revenue Number Of Locations Total Area Occupied (Sq. Ft. In 000s) Weighted Avg Remaining Lease Term (Yrs) 1 Canadian Tire Corporation (i) 4.9% 103 2, Walmart 4.7% 29 3, Famous Players/Cineplex/Galaxy Cinemas 4.3% 30 1, Metro/Super C/Loeb/Food Basics 4.3% 58 2, Winners/HomeSense/Marshalls 3.2% 66 1, Loblaws/No Frills/Fortinos/Zehrs/Maxi 2.9% 31 1, Staples/Business Depot 2.2% Target Corporation 2.1% 24 1, Shoppers Drug Mart 1.9% Reitmans/Penningtons/Smart Set/Addition-Elle/ Thyme Maternity 1.7% (i) Canadian Tire Corporation includes Canadian Tire/PartSource/Mark's Work Wearhouse/Sport Mart/Sport Chek/Sports Experts/National Sports/Atmosphere

11 Strong Tenant Relationships Top 10 U.S. As at Sept. 30, 2012 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) 12.0% Best Buy 4.7% PetSmart 3.3% Ross Dress for Less 2.0% Walmart 1.8% Sports Authority 1.7% Lowes 1.7% Michael s 1.7% Bed Bath & Beyond 1.6% Staples 1.6%

12 Lease Rollover Profile Broadly Distributed Lease Expiries Canadian Portfolio As at Sept. 30, s Square Feet % % Square Feet expiring / portfolio NLA 4,211 4,259 4,709 2, % 10.4% 10.6% 11.7% U.S. Portfolio As at Sept. 30, s Square Feet % % % % 3.8%

13 Occupancy since 1996 Historical Occupancy Rates 1996 to Q % 97.1% 97.7% 97.6% 96.9% 97.6% 97.4% 97.4% 96.9% 97.4% 97.3% 96.3% 96.3% 96.1% 95.8% 95.6% 95.4% 95.0% 95.0% Q1 Q2 Q As at Sept. 30,

14 Financial Highlights Q3 2012

15 Financial Highlights RioCan s Operating FFO increased by 19% to a record $115 million for the three months ending September 30, 2012, ( Third Quarter ) compared to $97 million in the third quarter of On a per unit basis, Operating FFO increased 8% to $0.40 per unit from $0.37 per unit in the same period of 2011; RioCan s Operating FFO increased by 16% to $325 million for the nine months ended September 30, 2012 compared to $280 million for the same period in On a per unit basis, Operating FFO increased 6% to $1.13 per unit from $1.07 per unit for the same period in 2011; During the quarter, RioCan acquired Georgian Mall, a 604,600 square foot regional mall. The property features tenants such as The Bay, H&M, and Disney Store and was purchased for $318 million at a 5.5% capitalization rate. The acquisition was financed with a first mortgage in the amount of $185 million with an interest rate of 3.09% for a term of six years; RioCan renewed 2.9 million square feet in the Canadian portfolio during the nine months ended September 30, 2012 at an average rent increase of $1.96 per square foot, representing an increase of 12.0%, compared to 10.1% for the same period in 2011; and Subsequent to the quarter end, RioCan has dissolved its joint venture agreement with Cedar Realty Trust ( Cedar ) and acquired the remaining 20% interest in 21 properties previously owned jointly with Cedar. Concurrently, RioCan sold its 80% interest in Franklin Village, also previously owned with Cedar. RioCan expects to assume the property management activities in the first quarter of RioCan, Allied Properties and Diamond Corp announced in November 2012 that they had entered into a joint venture arrangement to acquire the Globe and Mail site in downtown Toronto at a purchase price of $136 million (at 100%). 15

16 Financial Highlights Revenues (in millions of $ except per unit amounts) Operating FFO* Operating FFO* Per Unit Years ended December 31st * Note: FFO reported under IFRS for 2010 & 2011, excludes trading gain income

17 Quarterly Financial Highlights Operating FFO Revenues (in millions of $ except per unit amounts) Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q Operating FFO Per Unit Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 As at Sept. 30, Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q

18 Financial Highlights Net Operating Income (in millions of $) Net Operating Income Q Q As at Sept. 30, 2012 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q Mos. Ended Sept. 30

19 Financial Highlights Distributions to Unitholders (in millions of $ except per unit amounts) Distributions to Unitholders per Unit Distributions to Unitholders net of DRIP Distributions per Unit net of DRIP 19 As at Sept. 30, 2012

20 Financial Summary Revenues Three Months Ended Sept. 30, Nine Months Ended Sept. 30, (in millions of $ except per unit amounts) Total Revenues $283 $246 $826 $721 Operating FFO $115 $97 $325 $280 Operating FFO per Unit $0.40 $0.37 $1.13 $1.07 Distributions to unitholders $101 $91 $298 $272 Distributions to unitholders per Unit $0.345 $0.345 $1.035 $1.035 Distributions to unitholders net of distribution reinvestment plan (DRIP) $73 $70 $220 $211 Distributions to unitholders net of DRIP per Unit (last 12 mos.) $1.04 $1.08 $1.04 $1.08 Unit issue proceeds under distribution reinvestment plan $28 $21 $78 $61 Distribution reinvestment plan participation rate 27.2% 22.9% 26.0% 22.5% As at Sept. 30, 2012 Sept. 30, 2012 Dec. 31, 2011 Sept. 30, 2011 Total assets $12,249 $10,767 $9,906 Debt (mortgages and debentures payable) $5,352 $5,034 $4,749 Debt to Total Assets 43.2% 46.4% 47.8% Debt to total capitalization 38.5% 39.7% 40.0% Interest coverage ratio* 2.98x** 2.60x 2.45x 2.42x Debt service coverage ratio* 2.19x** 1.94x 1.86x 1.85x Fixed charge coverage ratio* 1.10x** 1.02x 0.99x 0.99x Net Operating debt to Adjusted Operating EBITDA* 6.98x** 7.07x 7.04x 6.97x Market capitalization $8,262 $7,377 $7,010 Total capitalization (incl. Preferred Units) $13,899 $12,690 $11, *Coverage figures calculated on a twelve month rolling basis ** Coverage figures calculated for the quarter ended

21 Financial Summary Net Operating Income Three months ended Sept. 30 Canadian Portfolio (thousands of dollars) As at Sept. 30, 2012 Net Operating Income Increase (decrease) Same store 1 $133,907 $133,901 0% Land use intensification $551 $175 nm Same properties 2 $134,458 $134, % Acquisitions $8,740 - nm Dispositions (1) (5) nm Greenfield development $3,904 $2, % NOI before adjustments $147,101 $136, % Lease cancellation fees $7,357 $12 nm Straight-lining of rents $673 $1,613 (58.3%) NOI $155,131 $138, % nm not meaningful. 1 Same store refers to those income properties that were owned by RioCan and had consistent leasable area in both periods. 2 Same properties refer to those income properties that were owned by RioCan throughout both periods. 21

22 Financial Summary Net Operating Income Nine months ended September 30 Canadian Portfolio (thousands of dollars) As at Sept. 30, 2012 Net Operating Income Increase (decrease) Same store 1 $398,739 $394, % Land use intensification $1,164 $599 nm Same properties 2 $399,903 $395, % Acquisitions $24,923 - nm Dispositions $3 $1 nm Greenfield development $11,187 $6, % NOI before adjustments $436,016 $402, % Lease cancellation fees $8,849 $754 nm Straight-lining of rents $2,118 $5,650 (62.5%) NOI $446,983 $408, % nm not meaningful. 1 Same store refers to those income properties that were owned by RioCan and had consistent leasable area in both periods. 2 Same properties refer to those income properties that were owned by RioCan throughout both periods. 22

23 Financial Summary Net Operating Income Q US Portfolio (thousands of dollars) Three Months ended Sept. 30, Nine Months ended Sept. 30, Increase (decrease) Increase (decrease) Base rent US$ $16,251 $16, % $41,648 $41, % Property tax and operating cost recoveries US$ $4,354 $4, % $11,011 $11,126 (1.0%) Other US$ $186 $78 nm $277 $117 Nm Rental revenue US$ $20,791 $20, % $52,936 $52, % Property operating costs US$ $5,552 $5, % $13,945 $13, % Same store and same properties 12 US$ $15,239 $15,285 (0.3%) $38,991 $38, % Foreign currency translation adjustment $20 ($338) nm $177 ($873) nm Same store and same properties 12 CDN$ $15,259 $14, % $39,168 $38, % Acquisitions $8,037 $15 nm $28,310 $46 nm NOI before adjustments $23,296 $14, % $67,478 $38, % Straight-lining of rents $674 $438 nm $2,346 $1,332 Nm NOI $23,970 $15, % $69,824 $39, % nm not meaningful. 1 Same store refers to those income properties that were owned by RioCan and had consistent leasable area in both periods. 2 Same properties refer to those income properties that were owned by RioCan throughout both periods.. 23

24 Conservative Debt Profile Debt to Total Assets of 43.2% at September 30, 2012; Total operating lines $429 million with approximately $404 million available at September 30, 2012 Unencumbered pool has a fair value of $647 million Floating rate debt 5.9% of total debt Strong coverage ratios EBITDA interest coverage approaching 3x Debt service coverage in excess of 2.0x and Fixed charge coverage in excess of 1.0x 24

25 Modest Leverage, Strong Interest Coverage RioCan has consistently adhered to a conservative debt policy even through periods of considerable growth 60% max permitted under covenant Interest coverage well in excess of the 1.65x maintenance covenant Leverage Interest Coverage 2.9x 2.9x 2.6x 2.6x 2.7x 2.8x 2.9x 2.7x 2.6x 2.2x 2.5x 2.5x 3.0x 47.3% 48.2% 51.9% 53.1% 53.8% 53.9% 56.6% 56.3% 54.9% 55.6% 49.1% 46.4% 43.2% Q3 25

26 RioCan Capital Structure Total Assets $12.2 Billion Total Enterprise Value $13.9 Billion 100% 100% 75% 52.1% 75% 59.3% 50% 25% 2.3% 8.9% 36.7% 50% 25% 2.1% 7.6% 31.0% 0% 0% Book Value Market Value Mortgages & Lines of Credit - $4.3 billion Debentures - $1.0 billion Preferred Units - $284 million market capitalization Common Units million units outstanding 26

27 Leverage and Coverage Ratios & Targets 3 Months Rolling 12 Months Targeted Ratios Sept. Sept. Sept. Sept. 30/ /12 30/ /12 Dec. 31/11 Interest coverage ratio 1 >2.5x 2.98x Debt service coverage ratio 2 >2.0x Fixed charge coverage ratio 3 >1.1x Net operating debt to adjusted operating EBITDA ratio 4 <6.5x (1) Interest coverage defined as: Adjusted EBITDA for the period, divided by total interest expense (including interest that has been capitalized). (2) 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). (3) 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. (4) Net operating debt to Adjusted Operating EBITDA is defined as: the average debt outstanding (net of cash) for the period less debt related to property under development divided by Adjusted EBITDA excluding amounts related to property under development (5) Adjusted to exclude prepayment costs of $2.3 million related to the early repayment of secured debt. (6) Adjusted to exclude interest capitalized. 27

28 Growth Strategy

29 Future Growth Drivers Acquisitions Organic Growth Development Pipeline Future Growth Drivers Institutional Relationships Land Use Intensification 29

30 Square Feet ( 000s) Rent PSF Organic Growth Canadian Portfolio Ability to add growth through rental renewals with 42% of leases renewing over next five years. In Q achieved renewal rent increases of 12.9% or $2.32 psf with an average renewal rate of $20.25 ($18.25 ytd) Retention rate of 84.8% (88.8% ytd) 4,900 4,200 3,500 2,800 2,100 1, RioCan Lease Maturity Schedule and Renewal History st 9 mos remain $20 $19 $18 $17 $16 $15 $14 $13 $12 Square feet renewed/expiring (left axis) Achieved Renewal Rent PSF Expiring Rent PSF Lease Expires (thousands except psf and % amounts Portfolio NLA Total 40, ,821 4,211 4,259 4,709 Square Feet expiring/portfolio NLA 2.2% 7.0% 10.4% 10.6% 11.7% Total average net rent psf $15.83 $19.28 $17.42 $16.01 $15.88 $

31 Organic Growth U.S. Portfolio Ability to add growth through rental renewals with 23% of leases renewing over next five years. In Q achieved renewal rent increases of 6.0% or $1.21 psf with an average renewal rental rate of $21.33 ($16.68 ytd) Maintained a retention rate of 96.3% (85.8% ytd) Square Feet expiring/portfolio NLA 100% Leases Expiring Total Portfolio Cumulative 50% 0% Lease Expires (thousands except psf and % amounts Portfolio NLA Total 7, Square Feet expiring/portfolio NLA 1.6% 4.1% 8.4% 5.0% 3.8% Total average net rent psf $15.96 $21.12 $19.52 $14.99 $17.71 $

32 Debt Maturity Schedule $ Millions 1,600 1,400 1,200 1, Scheduled principal amortization Mortgages payable Debentures payable Weighted average interest rate 1, % 5.59% % % 4.72% 4.14% 4.95% Thereafter 7.00% 6.50% 6.00% 5.50% 5.00% 4.50% 4.00% 3.50% 3.00% Weighted Avg. Interest Rate on Maturing Debt 32 Long term, staggered debt maturity profile 4.8% Overall WAIR and 4.6 Year weighted avg. term to maturity Low floating rate debt exposure (5.9% of total debt) Mortgage financings currently 3.0% to 4.0% (dependent on term) In April 2012, RioCan made an early repayment of $90.3 million originally due in 2015, which carried an interest rate of 5.91% without yield maintenance penalties

33 Acquisitions Track Record Acquisitions 2010 Q Location Cap Rate RioCan s Purchase Price (millions) Canada 7.3% 432 United States 7.9% Acquisitions 7.6% $986 Canada 6.4% 506 United States 6.9% Acquisitions 6.6% $1,073 Canada 5.7% 445 United States 7.0% First Nine Months Acquisitions 6.0% $548 33

34 RioCan Cedar Dissolution - Transaction Highlights RioCan and Cedar Realty Trust have entered into an agreement to dissolve their joint venture formed in late RioCan has acquired from Cedar a 20% interest in 21 properties to increase its ownership to 100% and Cedar has acquired from RioCan an 80% interest in Franklin Village to increase its ownership to 100% in the property. The gross purchase price for the 21 properties is $120 million, representing a capitalization rate of 6.5%. Under the terms, RioCan assumed Cedar s share of the currently in place mortgage financing of $54.4 million, which carries an average interest rate of 5.2% and has an average term to maturity of 5.2 years. The purchase price for the 21 properties net of financing and mark to market adjustment on debt was $64.4 million. RioCan sold its 80% ownership in Franklin Village at a gross purchase price of $60.1 million ($25.4 million net of financing). Net cash investment by RioCan of approximately $39 million. Cedar will continue to provide property management services for a period of up to one year, which may be terminated on 90 days notice. RioCan has delivered notice that it will terminate its property management agreement with Cedar. 34 RioCan continues to hold its position of 9.4 million shares of Cedar, however has relinquished its right to a seat on Cedar s Board of Directors. Figures in US dollars

35 RioCan Cedar Dissolution A successful history Portfolio RioCan s interest June 30, 2012 IFRS Value of the 21 properties where RioCan acquired an additional 20% $596.9 million $477.5 million Original purchase price of the 21 properties where RioCan acquired an additional 20% $485.6 million $388.4 million IFRS Value increase since acquisition $111.3 million $89.1 million Return 22.9% Franklin Village RioCan s interest Sale price of Franklin Village $75.1 million $60.1 million Original purchase price for Franklin Village $54.1 million $43.3 million Gain on sale $21.0 million $16.8 million Return 38.7% 35

36 Recent Acquisitions - Georgian Mall In July 2012, RioCan announced that agreed to purchase Georgian Mall in Barrie, Ontario for $318 million at a 5.5% cap rate Obtained first mortgage financing of $185 million at a 3.1% interest rate RioCan s largest acquisition by dollar amount A dominant regional mall in a quickly growing market with solid demographics Extends RioCan s retail reach to develop deeper relationships with fashion tenants and could create additional opportunities at RioCan s urban properties and Outlet Centres. 36

37 Recent Acquisitions Campus Estates Guelph, ON Chahko Mika Mall Nelson, BC 37

38 Square feet ( 000s) Development Activity Development History From 2006 through Sept. 30, 2012: RioCan s development pipeline has added 4.3 million square feet to the portfolio 3,500 3,000 2,500 Development Buildout History & Pipeline at RioCan s Interest Invested $1.2 billion of total capital (development costs and land acquisition costs) 2,000 1,500 1,000 Average cost psf including land of projects completed from 2006 to 500 Sept was approximately 0 $280 psf Pipeline* * Subject to preleasing and market conditions 38

39 Development Activity - Current Portfolio Property Type as a % of Development Portfolio Development Portfolio by Geographic Diversification 1% 13% 9% New Brunswick 3% Ottawa 11% Suburban GTA 26% 77% Alberta 33% Ontario 64% Toronto 15% Other Ontario 12% Power Centre Convenience Retail Main Street/Urban Excess Land 39

40 Development Activity Target will open 24 locations in RioCan s portfolio First 15 locations, 9 are anticipated to open in Spring 2013 The majority to open throughout the remainder of 2013 Target will be the anchor tenant at RioCan s St Clair and Weston road project Stockyards Canada s first purpose built Target location opening spring 2014 RioCan is contemplating an extensive capital improvement program for those locations where it feels the cash flow can be improved 40

41 Development Activity Development Pipeline Greenfield developments through in house capabilities and with partners, such as Trinity and Canada Pension Plan Investment Board (CPPIB) At Sept. 30, 2012 Total developments comprise 8.8 million square feet, including shadow anchors RioCan s interest consists of 4.6 million square feet (7.3 million square feet with partners) Total estimated project cost is $1.7 billion, with RioCan s interest being approx. $1.0 billion Invested $494 million in these projects RioCan s funding obligations, before construction financing, is $517 million ($61 million is for current development and $456 million is for potential future development) In addition, RioCan will fund approx. $120 million under mezzanine lending program to certain partners, primarily Trinity Developments ($22 million is for current development and $98 million is for potential future development) Generate unlevered yield between 7% to 11%, at a weighted average of 8.5% to 9.5% Recent Urban Development acquisitions include Yonge & Eglinton Northeast corner, Bathurst & College, and 740 Dupont in the GTA and Herongate Mall in Ottawa, ON In July 2012, RioCan formed a JV with Allied Property REIT to develop sites in major markets across Canada In November 2012 RioCan, Allied Properties and Diamond Corp announced that they had entered into a joint venture arrangement to acquire the Globe and Mail site in downtown Toronto at a purchase price of $136 million (at 100%). Substantially completed in 2011 RioCan s Urban intensification projects at 1717 Avenue Road and Queen & Portland have been completed. Cimarron Shopping Centre, Okotoks AB(Phase I) and Grant Crossing, Ottawa, ON 41

42 Development Pipeline St. Clair & Weston, Toronto 555,000 sqf. two storey retail Projected Completion 2014 Anchor Tenant - Target Development Partners: Trinity and Canada Pension Plan Investment Board ( CPPIB ) 42

43 Development Pipeline RioCan & Allied Properties REIT Joint Venture RioCan and Allied Properties announced in July 2012 that they had entered into a joint venture arrangement to acquire sites in the urban areas of major Canadian cities that are suitable for mixed use intensification King Street The joint venture will be structured on a 50/50 basis between RioCan and Allied. RioCan and Allied would act as joint development and construction managers. Upon completion of any projects RioCan would act as property manager for any retail portion of the property and Allied would act as property manager for any office portion College and Manning First two sites to be developed are: College and Manning which will be developed into a mixed use complex with approx. 125,000 square feet and King and Portland which will be developed into a mixed use complex with approx. 400,000 square feet in Toronto, Ontario. 43 Photo Source: Google

44 Development Pipeline RioCan & Allied Properties REIT Joint Venture RioCan, Allied Properties and Diamond Corp announced in November 2012 that they had entered into a joint venture arrangement to acquire the Globe and Mail site in downtown Toronto. Globe & Mail Lands Acquired at a purchase price of $136 million (at 100%). The joint venture will be structured on a 40/40/20 basis between RioCan, Allied and Diamond. RioCan and Allied would act as joint development and construction managers. Upon completion of any projects RioCan would act as property manager for any retail portion of the property and Allied would act as property manager for any office portion Source: RBC 44

45 Development Pipeline RioCan Centre Belcourt, Ottawa 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, Food Basics and Empire Theatres, which have all commenced operations. Grant Crossing, Ottawa Construction is nearing completion 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 is anchored by a 128,000 square foot Lowe s that commenced operations in the first quarter of Lowe s owns its own store which operates as part of the overall site. A 31,000 square foot Winners, a 26,000 square foot Homesense and a 22,000 square foot Michael s commenced operations in the fourth quarter of

46 Development Pipeline East Hills, Calgary This 148 acre site located in Calgary, Alberta is currently being developed into a 1.6 million square foot regional new format retail centre. Jacksonport, Calgary Will be developed into a new format retail centre with CPPIB and Trinity and is expected to feature approximately 1.1 million square feet of retail space. 46

47 Development Pipeline Sage Hill, Calgary RioCan has waived conditions for the acquisition of Sage Hill Crossing, a 32 acre greenfield development site in Northwest Calgary. The purchase price for the lands, which will be serviced and zoned at the time of closing, will be $32 million ($16 million at RioCan s interest). RioCan will own the development on a 50/50 basis with KingSett Capital. Once completed, the anticipated gross leasable area is 347,000 square feet of retail use. The anticipated closing date is September, Development is expected to commence in Windfield Farms, Oshawa 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 acquired its partners interests in July RioCan now owns 100% of this development site. 47

48 Canadian Outlet Centre Development In 2011, RioCan entered into 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. In December 2011, RioCan and Tanger acquired the Cookstown Outlet Mall, located about 45 minutes north of Toronto. A 161,000 square foot outlet centre with the potential to add a further 160,000 square feet of retail space. In November 2012, RioCan and Tanger acquired two sites in the Montreal area, Les Factoreries Saint-Sauveur, and Le Carrefour Champetre (Bromont Outlet Centre). The Montreal sites are existing centres which will be expanded and re-branded as Tanger Outlet Centers. The joint venture currently has a site in Kanata, Ontario under contract and is pursuing a site in the Calgary market. 48

49 Development Pipeline Cookstown Outlet Mall Purchased in December 2011 with Tanger Factory Outlet Centers. 161,000 square foot outlet centre with the potential to add a further 160,000 square feet of retail space 49

50 Development Pipeline Tanger Opportunities Les Factoreries, St-Sauveur Tanger Outlet Centre Currently under contract with Tanger Factory Outlet Centers. 116,000 square foot outlet centre with the potential to add a further 15,000 square feet of retail space Well established outlet centre in suburban Montreal 50

51 Development Pipeline Tanger Opportunities Bromont Tanger Outlet Centre Bromont, Quebec Recently acquired with Tanger Factory Outlet Centers. 162,000 square foot outlet centre with the potential to add a further 89,000 square feet of retail space Established outlet centre located 85kms east of Montreal, near the eastern townships 51

52 Land Use Intensification and Urban Development 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 52

53 Densifying existing urban locations Yonge Eglinton Centre - Toronto, Ontario RioCan s acquired the property for $223 million launched revitalization and expansion plan to capitalize on area s residential intensification significant increases in NOI and occupancy 53

54 Creating New Cash Flow Sources RioCan Yonge Eglinton Centre The Cube Today Location: Toronto, Ontario Intersection: Yonge & Eglinton Total Proposed GLA: 45,000 square feet Design Concept: Urban Retail Construction Start: 2012 Proposed 54

55 Creating New Cash Flow Sources The Sheppard Centre, Toronto Today Location: Intersection: Total Proposed GLA: Design Concept: Toronto, Ontario Yonge & Sheppard 672,854 square feet Urban Retail Potential for both retail and residential expansion Fast growing area of North Toronto 55 Examples of nearby residential developments

56 Creating New Cash Flow Sources NE Yonge Eglinton - Toronto, Ontario Location: Toronto, Ontario Intersection: Yonge & Eglinton Total Proposed GLA: 54,000 square feet Design Concept: Urban Retail Anticipated Completion: 2017 Today Proposed 56

57 Creating New Cash Flow Sources 740 Dupont - Toronto, Ontario Location: Toronto, Ontario Intersection: 740 Dupont Street Total Proposed GLA: 184,000 square feet Design Concept: Urban Retail Anticipated Completion:

58 Creating New Cash Flow Sources 420 Bathurst Street, Toronto Location: Toronto, Ontario Intersection: Bathurst & Dundas Total Proposed GLA: 133,000 square feet Design Concept: Urban Retail Anticipated Completion:

59 Urban Intensification Queen & Portland, Toronto, ON Location: Toronto, Ontario Intersection: Portland & Queen Total Proposed GLA: 91,000 square feet Design Concept: Mixed use facility Construction Completed: 2011 After Before 59

60 Urban Intensification 1717 Avenue Road, Toronto, ON Location: Toronto, Ontario Intersection: 1717 Avenue Road Total Proposed GLA: 91,000 square feet Design Concept: Mixed use facility Construction Completed:

61 Urban Intensification RioCan has a number of Urban Intensification opportunities in the GTA market Sunnybrook Plaza, Toronto, ON Located at the busy intersection of Bayview Avenue and Eglinton Avenue in midtown Toronto The site benefits from excellent demographics and is a probable location for a stop along the proposed Eglinton subway line The property is an excellent location for a redevelopment project similar to what has been accomplished at 1717 Avenue Road Queensway Cineplex, Toronto, ON Located in Western Toronto at the corner of The Queensway and Islington Avenue with access to the Queen Elizabeth Way (QEW) The Currently anchored by Cineplex this centre is an ideal property for additional density and potential redevelopment into a mixed use facility, in keeping with the trend of urban intensification 61

62 Strong 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 RioCan recently entered into a Joint Venture arrangement with KingSett Capital when it acquired the Sheppard Centre RioCan manages the property, acts as leasing manager for the property and will be the development manager in connection with any redevelopment of the property. Currently partnered with KingSett on the acquisition of the Sage Hill development site. 62

63 Strong Institutional Relationships RioKim Joint Venture Brentwood Village 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 including a 10 property portfolio in central and eastern Canada purchased in September RioCan provides asset and property management, development and leasing services to RioKim in Canada. RioCan recently acquired an 80% interest in Montgomery Plaza in Fort Worth, Texas from Kimco, who remains a 20% owner in the property and provides property management and leasing services. Tillicum Centre 63

64 Strong 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 provides property and asset management, leasing, development and construction management services for the co ownership RioCan Centre Burloak After 64

65 Strong 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 529,827 sq. ft. anchored by a 217,278 sq. ft. Walmart RioCan has completed the rezoning for its St. Clair and Weston Road development with Trinity and Canada Pension Plan Investment Board ( CPPIB ) in Toronto. Site work commenced in the fourth quarter of St. Clair & Weston 65

66 Strong Institutional Relationships CPPIB Strategic Alliance 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 with CPPIB and Trinity Upon completion, the development is expected to feature approximately 1.1 million square feet of retail space. 66

67 Investment Highlights Dominant platform, geographically diversified Conservative balance sheet / financial strength Strong, reliable distribution yield provided to investors Stable, diversified portfolio of national retail tenants Disciplined growth strategy in Canada and U.S. Positioned to benefit from robust acquisition activity Experienced, performance driven management team 67

68 Investor Presentation 2012 DISCIPLINED GROWTH