MANAGEMENT PRESENTATION August 2009

Transcription

1 MANAGEMENT PRESENTATION August 2009

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 2009 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 ABOUT RIOCAN

4 ABOUT RIOCAN Largest REIT in Canada Enterprise value of over $7.1 billion Ownership interests in 247 properties Over 59 million sq ft under management Total tenancies 5, properties under development Revenue of $187 million in Q National and anchor tenants represent 84.6% Over 14% compounded annual return since IPO 9.4 million sq ft of development Experienced and deep property management team Strong Joint Venture Partnerships Diversified tenant base $3.5 billion of debt under management Distribution per unit increase every year Leader in corporate governance Over $2.3 billion distributed to unitholders since the IPO 4

5 ABOUT RIOCAN Largest REIT in Canada with 247 properties, including 13 under development, owned interests totalling over 36 million sq. ft. and over $7.1 of enterprise value 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 over 600 employees Able to undertake any task within the real estate business Conservative use of leverage Investment grade entity rated BBB and BBB (high) by S&P and DBRS, respectively Unmatched breadth of tenant relationships in Canada Of 5,600 tenants, no tenant representing over 5.3% 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 5

6 MARKET OVERVIEW

7 Canada. Weathering the Storm The effect of the turmoil on the Canadian financial system is, so far, milder than in other G7 economies. Interbank money markets remained functional. No injections of public capital into banks were necessary. The resilience appears particularly striking given the close economic and financial links between Canada and the United States. Source: International Monetary Fund; Canada: Selected Issues May 2009 Canadian housing market slowed, but the lack of a subprime market and exotic residential mortgage structures limited foreclosures and thus value correction has not been as severe. Securitization and private equity remained a small portion of the Canadian market, even at its peak, tempering gains and leverage. Leveraged M&A activity in the REIT sector during the peak was non-existent ie. No transactions like Arden, Equity Office, or General Growth. Variable rate short term financing in the commercial market was used very rarely. 7

8 Only six metropolitan markets within Canada have in excess of one million people 8

9 CANADA S SIX HIGH GROWTH MARKETS MARKET % Change Change Toronto, Ontario 4,263,759 5,113, % 849,390 Montréal, Quebec 3,326,447 3,635, % 309,124 Vancouver, British Columbia 1,831,665 2,116, % 284,916 Ottawa-Gatineau, Ontario/Quebec 998,718 1,130, % 132,043 Calgary, Alberta 821,628 1,079, % 257,682 Edmonton, Alberta 862,597 1,034, % 172,348 Total 12,104,814 14,110, % 2,005,503 Source - Statistics Canada 9

10 STABLE GROWTH IN GLA ACROSS TOP 6 MARKETS * Increase in total GLA equal to population growth Canadian GLA per Capita: U.S. GLA per Capita: 19.5 BRITISH COLUMBIA 21.7 SF p.c. NEWFOUNDLAND & LABRADOR 14.0 SF p.c. ALBERTA SASKATCHEWAN Edmonton MANITOBA QUEBEC 13.3 SF p.c. Vancouver Calgary 15.7 SF p.c SF p.c. ONTARIO 18.6 SF p.c SF p.c. PRINCE EDWARD ISLAND 17.2 SF p.c. Space fundamentals are strong with retail inventory per capita at lower levels relative to the US Ottawa Montreal Toronto NEW BRUNSWICK 14.0 SF p.c. NOVA SCOTIA 18.2 SF p.c. * Source CBRE - CB Richard Ellis 10

11 PORTFOLIO FUNDAMENTALS REMAIN STRONG As at June 30, 2009 High proportion of national tenants Approximately 85% of our annualized rental revenue is derived from national and anchor tenants Stable occupancy levels at 97.1% Solid leasing activity For the six months ended June 30, 2009, RioCan retained approximately 93.4% or 1.5 million sq. ft. (80.0% for the six months ended June 30, 2008) of our expiring leases at an average net rent increase of 5.8% (9.4% for the six months ended June 30, 2008) Focus on the six Canadian high growth markets Approximately two-thirds of our revenue is from properties within the six high growth major Canadian markets Annualized Rental Revenue Net Leasable Area 33.8% 2.7% 3.7% 6.2% 8.4% 11.0% 34.2% Toronto, Ontario Montreal, Quebec Ottawa, Ontario Calgary, Alberta Vancouver, British Columbia Edmonton, Alberta All other markets 41.1% 2.5% 3.2% 5.5% 7.8% 28.4% 11.5% Toronto, Ontario Montreal, Quebec Ottawa, Ontario Calgary, Alberta Vancouver, British Columbia Edmonton, Alberta All other markets 11

12 GEOGRAPHIC DIVERSIFICATION As a % of Annualized Rental Revenue (As at June 30, 2009) 17.9% 62.3% 10.0% 5.7% 2.1% 0.5% 0.5% 0.5% 0.4% 0.1% Ontario Quebec Alberta British Columbia New Brunswick Saskatchewan Prince Edward Island Manitoba Newfoundland Nova Scotia 12

13 PORTFOLIO OVERVIEW

14 14 TOP TEN TENANTS

15 UNMATCHED BREADTH OF TENANT RELATIONSHIPS 5,600 tenancies capturing the top Canadian and American retailers Only two tenants represent more than 5.0% 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 5.3% 28 1, Metro/A&P/Super C/Loeb/Food Basics 5.2% 52 1, Canadian Tire/PartSource/Mark's Work Wearhouse 4.0% 57 1, Zellers/The Bay/Home Outfitters 3.6% 38 2, Wal-Mart 3.4% 20 1, Winners/HomeSense 3.2% 53 1, Loblaws/No Frills/Fortinos/Zehrs/Maxi 3.0% 23 1, Staples/Business Depot 2.5% Reitmans/Penningtons/Smart Set/Addition-Elle/Thyme 1.9% Maternity 10 Harvey's/Swiss Chalet/Kelsey's/Montana's/Milestone's 1.8%

16 ANNUALIZED RENTAL REVENUE By Property Type (As at June 30, 2009) 4.2% 8.2% 4.8% New Format Retail Grocery Anchored Centre 14.6% 47.9% Enclosed Shopping Centre Non-Grocery Anchored Centre Urban Retail 20.3% Office 16

17 LEASE ROLLOVER PROFILE As at June 30, s Square Feet 4,000 % Square Feet expiring / portfolio NLA 3,748 3,000 3,023 2,917 2,949 2, % 11.2% 8.7% 8.8% 1, %

18 STABLE OCCUPANCY Historical Occupancy Rates 1996 to Q2 2009* 96.9% 95.0% 95.0% 95.4% 96.1% 95.6% 95.8% 96.3% 96.3% 97.1% 97.7% 97.6% 96.9% 97.1% * 18

19 FINANCIAL HIGHLIGHTS Three Months Ended June 30, 2009 Six Months Ended June 30, 2009 Six Months Ended June 30, 2008 Total Revenue ($) $187, , ,752 Net Operating Income 117, , ,285 Operating Margin 62.5% 60.7% 57.8% Same Property NOI Growth (Year Over Year) 1.5% 0.7% 0.7% FFO (in thousands) 67, , ,152 FFO per unit AFFO Payout Ratio (net of DRIP) 107.7% 95.0% 74.8% Expiring Lease Rate Growth 7.0% 5.8% 9.4% Tenant Retention Ratio 93.2% 92.4% 80.0% DRIP Participation 16.4% 18.3% 25.3% June 30, 2009 Dec. 31, 2008 June 30, 2009 Total Assets 5,721,699 5,337,491 5,339,442 Debt 3,567,355 3,260,295 3,200,783 Debt to Aggregate Assets 55.8% 54.9% 54.5% Debt to Total Capitalization 49.9% 51.8% 42.3% Interest Coverage Ratio 2.5x 2.6x 2.7x Debt Service Ratio 1.9x 2.0x 2.0x Market Capitalization 3,579,264 3,033,094 4,371,305 Total Capitalization 7,146,619 6,293,389 7,572,088 19

20 FINANCIAL HIGHLIGHTS (thousands of dollars, except per Unit amounts) Three months ended June 30, Increase (decrease) Rental revenue $ 180,574 $ 169,863 6% Property operating costs 63,570 59,980 6% Net operating income 117, ,883 6% Fees and other income 3,041 3,690 (18%) Interest income 4,311 4,037 7% Gains on properties held for resale (574) 16,795 (103%) 123, ,405 (8%) Interest expense 48,532 41,575 17% General and administrative expense 7,328 5,965 23% FFO 67,922 86,865 (22%) Amortization expense 41,910 36,414 15% Future income tax expense (recovery) (1,200) 5,700 (121%) Net earnings $ 27,212 $ 44,751 (39%) Net earnings per Unit - basic and diluted $ 0.12 $ 0.21 FFO per Unit $ 0.30 $

21 FINANCIAL HIGHLIGHTS Same Property Net Operating Income (thousands of dollars) Three months ended June 30, Increase Six months ended June 30, (decrease) Increase (decrease) Same properties (i) $ 104,181 $ 102, % $ 203,726 $ 202, % 2009 and 2008 acquisitions 3, nm 6, nm 2009 and 2008 dispositions nm nm Greenfield development 5,852 4, % 13,705 9, % NOI before adjustments 113, , % 224, , % Lease cancellation fees nm nm Straight-lining of rents 1,480 1,729 (14.4%) 2,890 3,441 (16.0%) Differential between contractual and market rents (2.4%) 1,587 1,711 (7.2%) NOI $ 117,004 $ 109, % $ 229,670 $ 218, % "nm" - not meaningful. (i) Same properties refer to those income properties that were owned by RioCan throughout both periods. 21

22 FINANCIAL HIGHLIGHTS Net Operating Income Quarter over Quarter (thousands of dollars, except per Unit amounts) June 30, 2009 March 31,2009 Increase (decrease) Same properties (i) $ 107,833 $ 105, % Acquisitions 1, nm Dispositions (2) - nm Greenfield development 4,800 4, % NOI before adjustments 113, , % Lease cancellation fees nm Straight-lining of rents 1,480 1, % Differential between contractual and market rents % NOI $ 117,004 $ 112, % nm not meaningful. (i) Same properties refer to those income properties that were owned by RioCan throughout both periods. 22

23 CAPITAL STRUCTURE

24 CONSERVATIVE DEBT PROFILE Debt-to-Gross Book Value (historical cost) of 55.8% at June 30, 2009 Total operating lines - $293.5 million with approximately $193 million available Cash on hand as at June 30, 2009 approximately $300 million 11% of properties unencumbered by debt on a net leasable area basis At June 30, 2009, interest coverage was in excess of 2.5x and debt service coverage was 1.9x In April 2009, repurchased $4.6 million of Series D debentures maturing in September 2009 and $50.4 million Series J debentures maturing in March 2010 In 2009, S&P affirmed RioCan s issuer credit rating of BBB and issue rating of BBB- relating to its senior unsecured debentures payable; DBRS provided a credit rating of BBB (high) relating to RioCan s debentures 24

25 FISCAL CONSERVATISM % Payout of FFO % Payout of FFO excl DRIP 100% 97.4% 95% 90% 93.0% 88.9% 87.1% 86.7% 88.2% 88.9% 89.6% 87.9% 92.1% 85% 80% 76.3% 80.0% 75% 70% 72.0% 66.7% 72.5% 72.4% 73.0% 70.5% 65.9% 70.2% 65% 60% Note: 2005 FFO adjusted to exclude impact of costs of early extinguishment of debentures 25

26 MODEST LEVERAGE, STRONG INTEREST COVERAGE RioCan has consistently adhered to a conservative debt policy even through periods of considerable growth Leverage of 55.8% at June 30, 2009; 55.3% proforma** based on historic cost 60% max permitted under covenant Interest coverage well in excess of the 1.65x maintenance covenant Historical Leverage (@ Book) And EBITDA Interest Coverage 2.9x 2.9x Leverage 47.3% 48.2% 2.6x 2.6x Interest Coverage 51.9% 2.7x 2.8x 53.1% 53.8% 53.9% 2.7x 2.9x 2.6x 2.5x 56.6% 56.3% 55.8% 54.9% 55.3% 26 * June 30, 2009 ** June 30, 2009 adjusted for repayment from cash of debentures due September 2009

27 LEVERAGE AT HISTORIC COST & STOCK MARKET VALUE As at June 30, % 55.3% 53.5% 50.0% Historic Cost* Proforma** Proforma** net of cash Market * June 30, 2009 ** June 30, 2009 adjusted for debenture repayments on maturity 27

28 CAPITAL STRUCTURE Book Value = $5.4 billion 1 Gross Book Value = $6.1 billion 1 Enterprise Value = $7.1 billion % 41.2% 36.4% 18.0% 16.0% 13.6% 48.2% 42.9% 50.1% Mortgages= $2.6 billion Debentures = $969 million Equity = 234 million units outstanding 1) Based on a unit price of $

29 LIQUIDITY & DEBT MATURITY PROFILE As at June 30, 2009 In millions $1,200 $1,000 Mortgages Unsecured Debentures $800 $600 $400 $200 $0 7.4% $185 $311 $80 $ % 9.4% $ % 15.0% 13.5% $335 $386 $301 $942 $200 $220 $150 $180 $

30 CONSERVATIVE COMMITMENTS TO DEVELOPMENT PIPLINE As at June 30, 2009 In millions $70 $60 $50 $40 $30 $1 $11 $2 $2 $17 $18 Co-Ownerships - Other Co-Ownerships - CPPIB Co-Ownerships - Trinity RioCan Owned Developments $20 $10 $0 $31 $30 $2 $3 $

31 DEBT MATURITIES BY LENDER (thousands of dollars) Scheduled Principal Amortization Contractual Principal Balance by Type of Lender Life Insurance Industry Mortgage Conduit Banks Pension Funds Other Unsecured Debentures As at June 30, 2009: For the year ended Dec ,476 57,306-87,082-7,067 79, , ,204 44, ,904 11,750 13,975 20,938 44, , ,736 8,940 53,952 12,651 4, , , ,123 59, , , , , , , , ,450-8, , , ,402 62,080 6, ,510-11, , ,584 Thereafter 109, , , ,867 41,862 1, ,000 1,041, , , , ,120 60,516 48, ,300 3,571,265 Total 31

32 ACCESS TO CAPITAL MARKETS Unsecured Debenture Offering: Closed $180 million principal amount of Series L senior unsecured debentures issued on April 3, 2009 Debentures carry a coupon rate of 8.33% and will mature on April 3, 2014 Trust Unit Offering: Closed $150 million Trust Unit Offering on June 10, 2009 Issued 10,345,000 Units The net proceeds from the offerings were used to: Repurchase, at par, $4.6 million of its September 21, 2009, 5.29% Series D and $50.4 million of its March 24, 2010, 4.938% Series J senior unsecured debentures; Provide additional financial flexibility to its substantial liquidity position; Repay indebtedness incurred under its operating credit facilities; Fund development activities and future property acquisitions, and; General trust purposes. 32

33 BORROWINGS TO JUNE 30, 2009 At outset of 2009, RioCan had $230.5 million of mortgage principal maturities at a weighted average contractual interest rate of 5.9% and $849.3 million of unsecured debentures maturing between 2009 and 2026 Remaining maturities for balance of the year $264.5 million Mortgages Payable As at June 30, 2009 Six months ended June 30, 2009 (thousands of dollars, except other data) Contractual Debt Weighted Average Contractual Interest Rate Contractual Debt Weighted Average Contractual Interest Rate Average Term to Maturity (years) New borrowings: Fixed rate term mortgages 94, % 203, % 5.7 Floating rate term mortgages 84, % 84, % 3.0 Construction 7, % 10, % 1.1 Assumed/granted on the acquisition of properties $185, % $298, % - 33

34 ASSETS AVAILABLE TO FINANCE PRINCIPAL BALANCE OF DEBT MONITORING (in thousands) NUMBER OF PROPERTIES NBV of IPP At June 30, ANNUALIZED NOI (1) Collateral Income Properties Encumbered Assets with Debt Maturing in 2009 Encumbered Assets with Debt Maturing in 2010 Unencumbered Assets at June 30, ,821 25, , ,576 52, , ,814 33, Construction Financing on Properties Under 3 17,413 1,352 13,695 3,709 Development (2) VTB on Properties Under Development Unsecured Debt Maturity 2 5, , ,681 44,619 TOTAL 98 1,187, , , ,876 (1) Excluding impact of straight-line rents and the differential between contractual and market rents (2) Projects include components that are income producing at December 31, NBV shown represents amounts in IPP only. 34

35 CAPITAL STRUCTURE LOOKING AHEAD

36 SIFT LEGISLATION In order to qualify for the REIT Exemption commencing in 2011, RioCan is developing a REIT exemption Qualification Plan The Qualification Plan will identify permitted assets and activities that would not qualify under the REIT Exemption and potential restructuring solutions Under the Qualification Plan, RioCan will continue, directly or indirectly through subsidiary entities, to hold such assets and engage in such activities that are permitted to be held and/or performed by RioCan under the REIT Exemption. As part of the Qualification Plan, RioCan is currently considering the establishment of a new entity (the "New Entity") which will, directly or indirectly through subsidiary entities, hold such assets and engage in such activities that RioCan is not permitted to engage in under the REIT Exemption (i.e., non-compliant assets and activities) Under the current version of the Qualification Plan that RioCan is considering, it is contemplated that RioCan s unitholders will hold securities of RioCan and the New Entity in the form of stapled units 36

37 FUTURE GROWTH DRIVERS Organic Growth Greenfield Development Land use Intensification Acquisitions Fund Activities 37

38 PORTFOLIO LEASING ACTIVITY For the Six Months Ended June 30, 2009 Six Months ended June 30, 2009 (in thousands, except per square foot (psf) amounts) Total New Format Retail Grocery Anchored Centre Enclosed Shopping Centre Non-Grocery Anchored Centre Urban Retail Office Renewals at market rental rates Square feet renewed Average net rent psf Increase in average net rent psf Fixed rental rate options in favour of our tenants Square feet renewed Average net rent psf Increase in average net rent psf Total: Square feet renewed 1, Average net rent psf Increase in average net rent psf Percent Increase

39 ORGANIC GROWTH LEASING ACTIVITY For the Quarter Ended June 30, 2009 in thousands, except per square foot (psf) amounts Renewals at market rates Total New Format Retail Grocery Anchored Centre Enclosed Shopping Centre Non-Grocery Anchored Centre Urban Retail Square feet renewed Average net rent psf Increase in average net rent psf Office Fixed rental rate options in favour of our tenants Square feet renewed Average renewal net rent psf Increase in average net rent psf Total: Square feet renewed Average net rent psf Increase in average net rent psf Percent Increase

40 ORGANIC GROWTH LEASE EXPIRIES As at June 30, 2009 LEASE EXPIRIES (in thousands, except psf and percentage amounts) Portfolio NLA 2009 (1) Square Feet: New Format Retail 15, ,442 1,032 1,309 Grocery Anchored Centre 7, , Enclosed Shopping Centre 6, Non-Grocery Anchored Centre 1, Urban Retail 1, Office 1, Total 33, ,023 3,748 2,917 2,949 Square feet expiring/portfolio NLA 3.0% 9.0% 11.2% 8.7% 8.8% Average rent psf : New Format Retail Grocery Anchored Centre Enclosed Shopping Centre Non-Grocery Anchored Centre Urban Retail Office Total average net rent psf (1) Tenant expiries for the remaining six months of

41 FUTURE GROWTH DRIVERS Organic Growth Greenfield Development Land use Intensification Acquisitions Fund Activities 41

42 STRONG DEVELOPMENT PIPELINE Greenfield developments through in-house capabilities and with partners, such as Trinity and Canada Pension Plan Investment Board (CPPIB) At June 30, 2009 Total greenfield developments comprise 9.4 million square feet, including shadow anchors RioCan s owned interest consists of 3.3 million square feet Total estimated project cost is $ 1.6 billion, with RioCan s interest being approx. $ 690 million Invested $ 261 million in these projects RioCan s funding obligations, before construction financing is $ 645 million ($ 121 million is for current development and $ 524 million is for potential future development) RioCan s share is $ 428 million ($ 94 million is for current development and $ 334 million is for potential future development) In addition, RioCan will fund approx. $ 217 million under mezzanine lending program to certain partners, primarily Trinity Developments ($27 million is for current development and $190 million is for potential future development) Generate unlevered yield between 7% to 11%, at a weighted average of 8.5% to 9.5% Strategic sales to CPPIB In June 2008, RioCan and Trinity sold a 50% non-managing interest in the Jacksonport development in Calgary and St. Clair Avenue and Weston Road in Toronto development to CPPIB In October 2008, CPPIB purchased at 37.5% non-managing ownership interest in two of three phases in East Hills in Calgary Significantly reduced development exposure on the three projects of $700 million The sales to CPPIB enabled RioCan to recoup 100% of its equity in these projects The sales further strengthened our existing relationship to Canada s largest pension fund 42

43 43 GREENFIELD DEVELOPMENT RioCan Centre Burloak, Oakville, ON Pre-development

44 44 GREENFIELD DEVELOPMENT RioCan Centre Burloak, Oakville, ON Post-development

45 45 GREENFIELD DEVELOPMENT RioCan Elgin Mills Crossing, Richmond Hill, ON

46 46 GREENFIELD DEVELOPMENT East Hills, Calgary, AB

47 47 GREENFIELD DEVELOPMENT East Hills, Calgary, AB

48 FUTURE GROWTH DRIVERS Organic Growth Greenfield Development Land use Intensification Acquisitions Fund Activities 48

49 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 49

50 YONGE EGLINTON CENTRE Toronto, Ontario 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 RioCan s leasing and capital improvement efforts have resulted in significant increases in NOI and occupancy NOI of $13.3 million at purchase, forecast to increase to $18.2 million for the year ended December 31, 2009 (ROI increasing from 5.95% to 7.50%) Combined office and retail occupancy rate has increased from 88% at purchase, to 97% at June 30,

51 51 CREATING NEW CASH FLOW SOURCES RioCan Yonge Eglinton Centre, Toronto, ON

52 52 CREATING NEW CASH FLOW SOURCES RioCan Yonge Eglinton Centre Proposed Retail Addition

53 53 CREATING NEW CASH FLOW SOURCES RioCan Yonge Eglinton Centre Proposed Retail Addition

54 CREATING NEW CASH FLOW SOURCES RioCan Yonge Eglinton Centre Proposed Vertical Addition Potential to add 210,000 square feet of office space 54

55 55 LAND USE INTENSIFICATION 1717 Avenue Road, Toronto, ON

56 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 Currently almost 100 acres of urban property in either active rezoning process or in the exploration of rezoning potential stage 1717 Avenue Road, Toronto 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 The residential component is 81% sold 56

57 57 LAND USE INTENSIFICATION Queen and Portland, Toronto, ON

58 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 January 2009, announced $11.5 million lease termination payment from Home Depot in connection with its proposed 75,000 sq ft store on which construction had not yet begun Development to continue with new retail footprint - conditional agreements in place with 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 92,000 sq ft over three levels Five-storey residential condominium, above the retail, unaffected by change 74% sold Residential air rights sold to Tribute Communities, who will develop 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 Queen St. W Portland St. Richmond St. W 58

59 TILLICUM CENTRE Victoria, British Columbia 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 Despite various construction challenges owing to site s geography, RioCan s development team was able to deliver on schedule and within budget Mixed-use expansion scheduled for commencement in 2009, and will feature 300,000 sq. ft. In addition to improving tenant quality and aesthetics, the return on investment ( ROI ) since acquisition has increased by more than 100 bps NOI increased from $5.3 million at purchase to a budgeted annualized NOI of $7.0 million in 2008 (36% increase) Occupancy increased from 96.1% at purchase to 99.6% 59

60 FUTURE GROWTH DRIVERS Organic Growth Greenfield Development Land use Intensification Acquisitions Fund Activities 60

61 ACQUISITION OF ING PORTFOLIO In March 2009, acquired interest in six grocery anchored retail properties in Greater Montreal Area totalling 454,000 square feet for total purchase price of $67.5 million RioCan holds a 100% interest in two of the properties and a 50% interest in four properties RioCan s interest in the properties totals 332,000 square feet Annualized net operating income expected to be generated from the portfolio is approx. $6.1 million (9.1% cap rate) Net purchase price of RioCan s interest in the portfolio was approx. $47.5 million Average price per square foot is $142.78, well below replacement cost for assets of this nature Average age of the portfolio is 14 years Portfolio profile Total occupancy 99% 83% national and regional tenants 74% Supermarket/Pharmacy/Banks Average remaining lease term on grocery leases is 7.9 years Properties Concord Centre, Laval (IGA, Desjardins and Jean Coutu) La Prairie Centre, La Prairie (IGA, Familiprix and Laurentian Bank) Rene-A.-Robert Centre, Ste-Therese (IGA) Sicard Centre, Ste-Therese (IGA, Jean Coutu and Scores) St. Jean, St-Jean-sur-Richelieu (IGA, National Bank and Uniprix) Ste Julie, Ste Julie (IGA) 61

62 ACQUISITION ACTIVITY As at June 30, 2009 Property Name & Location Quarter Acquired NLA (sq. ft.) at Riocan s Interest Portfolio of Six Grocery Anchored Properties in Greater Montreal Area: RioCan's Ownership Interest St. Jean, St. Jean sur Richeliu, QC Q1 103, % Sicard Centre, Ste. Therese, QC Q1 106, % Cancord Tre, Laval, QC Q1 31,649 50% La Prairie, La Prairie. QC Q1 34,541 50% St. Julie Centre, St. Julie, QC Q1 30,097 50% Rene A. Robert Centre, Ste Therese, QC Q1 25,919 50% TOTAL 332,550 Cap Rate Purchase Price ($M) 9.1% $47,483 Portfolio Acquisition: Hespeler Road, Cambridge, ON Q1 10, % 17004/ th Avenue, Edmonton, AB Q1 11, % TOTAL 22, % $5,392 Total Q1 355,303 Total Acquisitions To-Date ,303 In 2008, RioCan completed total acquisitions in the amount of $162.8 million, comprising approximately 857,000 additional square feet 62

63 FUTURE GROWTH DRIVERS Organic Growth Greenfield Development Land use Intensification Acquisitions Fund Activities 63

64 RIOCAN S PROVEN TRACK RECORD STRONG PARTNERSHIPS

65 PROVEN TRACK RECORD RRVLP RioCan Retail Value LP ( RRVLP ) RRVLP formed in 2003 with RioCan REIT, TIAA-CREF and OMERS together committing $200 million of equity TIAA-CREF is one of the largest privately owned investment managers in the U.S. with over $420 billion of assets under management which includes over $70 billion of real estate assets OMERS is one of Canada s leading pension funds with over $43 billion in net investment assets RRVLP focuses on the investment in retail assets with the potential for significant value added, redevelopment or repositioning opportunities Invested in 12 properties comprising 3.4 million sq ft over a period of less than 24 months and to date has sold ten properties generating a return of approximately 23% after fees A subsidiary of RioCan REIT acts as a General Partner and provided asset management, property management, leasing, financing and development services to the fund RioCan REIT s performance and the success of RRVLP led to further working relationship between RioCan REIT and a leading investor in this fund 65

66 PROVEN TRACK RECORD Strong Partnerships Partner Type of Partner Total Property GLA (sf) Partner GLA (sf) Kimco Public 8,899,809 4,449,905 CPPIB Institutional 754, ,061 Trinity Private 2,666,400 1,063,326 CPPIB/Trinity Institutional/Private 527, ,760 Kimco/Trinity Public/Private 331, ,866 Kimco/Fieldgate Public/Private 28,100 23,745 RRVLP (TIAA-CREF, OMERS) Public / Institutional 663, ,239 Sun Life Institutional 444, ,984 CMHC Private 370, ,227 Dale-Vest/Marketvest Private 66,720 40,032 Devimco Quebec Hydro Private 1,117, ,673 Effort Properties Private 147,234 73,617 Bayfield Private 391, ,989 The Wynn Group Private 98,580 73,935 First Gulf Private 386, ,359 Tawse Private 244, ,205 Trinity / Otis Private 135,850 90,571 Strathallen Private 240, ,087 Frum Development Group Private 276, ,165 Total 17,790,901 9,241,745 In addition to RioKim JV and CPPIB strategic alliance, RioCan REIT maintains numerous other partnerships where partners rely on RioCan s expertise in leasing, property management and development 66

67 PROVEN TRACK RECORD 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 June 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 67

68 PROVEN TRACK RECORD CPPIB Strategic Alliance 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 68

69 SUMMARY Canada s largest REIT Seasoned management team Excellent portfolio, solid tenants and diversified Focus on urban markets 85% of annualized rental revenue from national tenants Conservative debt profile and access to capital Strong institutional relationships Solid development pipeline 69

70 APPENDIX I

71 EXPERIENCED MANAGEMENT TEAM Extensive experience in Canadian real estate market Multi-disciplinary team with experience across a wide spectrum of real estate classes EDWARD SONSHINE, 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 $7 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 Senior 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. 71

72 APPENDIX II

73 Property Ownership by Geographic Area (square feet) As at June 30, 2009 Provincial RioCan s interest NLA Partners interests Retailer owned anchors Total site NLA Ontario Central 13,161,230 3,744,225 3,046,016 19,951,471 Ontario East 4,344,026 1,040,173 1,015,045 6,399,244 Ontario West 2,654,682 80, ,187 3,385,686 Total Ontario 20,159,938 4,865,215 4,711,248 29,736,401 Quebec 6,605,023 1,281,203 1,656,634 9,542,860 Alberta 3,021,559 1,481,943 1,727,805 6,231,307 British Columbia 1,785,043 1,207, ,074 3,333,161 New Brunswick 1,069, , ,615 1,711,129 Saskatchewan 267, ,667 Newfoundland 212, ,331 Manitoba 178, ,877 Prince Edward Island 166, , ,434 Nova Scotia 69,047 69, ,094 Income Producing Properties 33,535,780 9,242,105 8,907,376 51,685,261 Properties Under Development 2,619,440 4,108,560 1,412,000 8,140,000 Total 36,155,220 13,350,665 10,319,376 59,825,261 73

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