RioCan Announces First Quarter Results for 2021

  • 1.1 million sq. ft. of new and renewed leases with new leasing spread of 14.2% and blended spread of 8.1%;
  • Net income increased to $106.7 million from $102.8 million for pre-pandemic Q1 2020;
  • FFO/unit (excluding debenture prepayment costs) of $0.36, impacted by $5.8 million of one-time G&A costs;
  • Committed occupancy improved 10 bps from Q4 2020 to 95.8% and 30 bps to 96.0% as of May 3, 2021;
  • Capital recycling program remains robust with $543.1 million of closed, firm and conditional deals year-to-date.

TORONTO, May 04, 2021 (GLOBE NEWSWIRE) — RioCan Real Estate Investment Trust (“RioCan” or the “Trust”) (TSX: REI.UN) announced today its financial results for the three months ended March 31, 2021 (the “First Quarter”).

“While we have seen volatility in the retail sector throughout the pandemic, I am proud of how we have come through. The operating environment is becoming more favourable for a portfolio like RioCan’s, as evidenced by our strong leasing spreads, increased leasing velocity and occupancy and our rent collections,” said Jonathan Gitlin, President and CEO of RioCan. “Our strong team will continue to create value through our well-positioned income producing portfolio and development pipeline. As vaccines begin to take hold, we look ahead beyond this exceptional moment in time poised to capitalize on pent-up consumer activity that will benefit our tenants, RioCan and ultimately, our Unitholders.”

    Three months ended March 31,
(in millions except percentages, square feet and per unit values)   2021     2020
           
Financial Highlights          
Net income   $ 106.7     $ 102.8
Weighted average Units outstanding – diluted (in thousands)   317,758     317,725
FFO (i)   $ 106.0     $ 144.6
FFO (excluding debenture prepayment costs) (i)   $ 113.1     $ 144.6
FFO per unit – diluted (i)   $ 0.33     $ 0.46
FFO per unit – diluted (excluding debenture prepayment costs) (i)   $ 0.36     $ 0.46
           
           
Operation Highlights          
Same property NOI (decline) growth – overall portfolio (i)   (4.6)%     3.0%
Six major markets – % of total annualized revenue (ii)   90.4%     90.2%
Greater Toronto Area – % of total annualized revenue (ii)   51.0%     51.0%
Occupancy – committed six major markets (ii)   96.1%     97.3%
Occupancy – committed (ii)   95.8%     96.8%
Blended leasing spread   8.1%     5.6%
New leasing spread   14.2%     6.7%
Renewal leasing spread   5.0%     5.3%
           
           
Development Highlights          
Development completions – sq ft in thousands   30.0     133.0
Development expenditures (iii)   $ 87.5     $ 103.0
Properties under development and residential inventory as a percentage of consolidated gross book value of assets (maximum permitted: 15%) (ii) (iii)   10.7%     9.4%
           
           
    March 31, 2021     December 31, 2020
           
Balance Sheet Strength Highlights          
Debt to Adjusted EBITDA (i) (iv)   10.02x     9.47x
Ratio of total debt to total assets (i) (ii) (iv)   45.3%     45.0%
Unencumbered assets (i) (ii) (iv)   $ 8,719     $ 8,727
Unencumbered assets to unsecured debt (i) (ii) (iv)   221%     215%
           
(i)   A Non-GAAP measurement. For definitions and the basis of presentation of RioCan’s Non-GAAP measures, refer to the Non-GAAP Measures section in RioCan’s Management’s Discussion and Analysis (MD&A) for the three months ended March 31, 2021.
(ii)   Information presented as at respective periods then ended.
(iii)   Includes costs incurred for various properties under development and for residential inventory in respective reporting periods.
(iv)   At RioCan’s proportionate share.
     

COVID-19 Pandemic and Its Impacts on RioCan Property Operations

  • The First Quarter saw a series of government mandated changes to pandemic-related restrictive measures, with certain restrictions loosened or lifted in February followed by the reinstatement or tightening of restrictions in late March in response to the rise of the third wave of the pandemic in Ontario and certain other provinces. The number of tenants opened or closed varied through the quarter in accordance with changing government requirements. Approximately 9% of tenants were closed at the quarter end and nearly 20% of tenants were closed as of May 3, 2021 given the post quarter end tightened restrictions. Despite the challenges, as of May 3, 2021, the Trust collected 93.9% of its First Quarter billed gross rents in cash.
  • The Canadian government continues to provide support for businesses impacted by the pandemic with the Canada Emergency Rent Subsidy (CERS) program and other programs. The CERS funding is provided directly to tenants without a landlord rent abatement requirement and is currently in effect until June 2021. Subject to legislative approvals, the recently announced federal budget extends the CERS program to September 25, 2021 with certain changes to the qualification requirements and maximum basic subsidy rates.
  • The Trust’s collections of billed gross rents as of May 3, 2021 are summarized as follows:
  Q1 2021 Q4 2020 Q3 2020 Q2 2020
Total cash collected (i) 93.9% 95.1% 94.5% 89.6%
Deferred rents with definitive payment schedule 0.5% 0.7% 0.2% 2.9%
Provision for rent abatements and bad debts 2.4% 3.4% 5.3% 6.8%
Remaining rent to be collected 3.2% 0.8% —% 0.7%
Total 100.0% 100.0% 100.0% 100.0%
(i)   Includes $2.9 million of security deposits applied in Q3 2020, representing approximately 1.1% of billed gross rents for that quarter. Total cash collected includes CECRA funding received in Q2 2020 and Q3 2020. The CECRA program ended in September 2020 and was replaced by the CERS program.
  • Most tenants with deferred rents have been paying based on definitive payment schedules. RioCan is confident in the collectability of its deferred rents and remaining rents to be collected post its provision for rent abatements and bad debts (“pandemic-related provision”). The Trust accrued $6.4 million of such provision for the First Quarter.
  • Based on annualized net rent as of March 31, 2021, approximately 78.8% of the Trust’s tenants are classified as “strong” or “stable” and 97.6% of total gross rents billed to these tenants in the First Quarter have been collected in cash. Cash rent collection from the remaining “potentially vulnerable” tenants was 81.4% as they are more impacted by the pandemic. The timing of tenants’ submissions for CERS and the administrative process required for eligible tenants to receive CERS funding could have had an impact on the cash rent collection from these tenants in the short-term. RioCan’s cash collection results are expected to improve as its tenants receive CERS funding in arrears for prior months.
Tenant Composition % of Annualized
Net Rent
Q1 2021 Cash Rent
Collection %
Strong (i) 61.2% 99.1%
Stable (ii) 17.6% 92.7%
Subtotal 78.8% 97.6%
Potentially Vulnerable (iii) 21.2% 81.4%
Total 100.0% 93.9%
(i)   Strong is represented by, or includes, national office tenants and essential / necessity / value / and specialty retail tenants that have strong rent paying ability in the current pandemic impacted environment and also includes residential tenants.
(ii)   Stable is represented by, or includes, tenants with reasonably strong uses and good rent paying ability or tenants with medium uses in the current environment but strong rent paying ability.
(iii)   Potentially Vulnerable, particularly under COVID-19, includes tenants with uses that are significantly impacted by the pandemic (such as movie theatres, gyms, sit-down restaurants) as well as uses that were of concern prior to the pandemic (such as apparel) or tenants whom the Trust has concerns over tenant rent paying ability under the COVID-19 circumstances.
  • As of May 3, 2021, the Trust has collected 93.6% of the billed April gross rents in cash despite that nearly 20% of the Trust’s tenants were closed due to the extensive and more restrictive closures mandated in certain provinces post the quarter end. While the length and extent of such mandated closures are difficult to predict, the strength of the Trust’s tenant base offers significant downside protection. The recent acceleration of vaccination roll-outs are also expected to significantly improve the operating environment.
  • Furthermore, RioCan holds approximately $29.6 million of security deposits and approximately $4.6 million in letters of credit from a number of tenants which can serve to offset rents owed on a tenant-by-tenant basis in the event of unresolved tenant defaults.
  • The Trust continues to work with tenants whose businesses have been affected by the pandemic. In the limited circumstances where abatement is provided in favor of a tenant, other than in the case of the CECRA program in 2020, RioCan typically receives concessions of value in exchange, such as development rights, lease term extensions or waiver of exclusivity provisions.

FFO per Unit (excluding debenture prepayment costs) and Net Income

  • FFO per unit for the First Quarter (excluding the $7.0 million debenture prepayment costs) was $0.36, $0.03 per unit lower than Q4 2020. One-time $5.8 million general and administrative expenses such as the accelerated expensing of certain unit-based compensation costs accounted for a $0.02 FFO per unit decrease while lower residential inventory gains and lower lease cancellation fees, partially offset by a lower pandemic-related provision, accounted for the remaining change.
  • The FFO payout ratio (excluding debenture prepayment costs), calculated on a twelve-month rolling basis, was 90.8% which included only a partial benefit from the one-third reduction in distributions effective January 2021. Based on distributions declared during the quarter and quarterly FFO, instead of on a rolling twelve-month basis, the FFO payout ratio (excluding debenture prepayment costs) for the quarter was 67.5%.
  • The Trust reported net income of $106.7 million for the First Quarter, a $41.1 million increase from Q4 2020. The change in fair value gains (losses) on investment properties was the primary reason for this increase, with the First Quarter reporting net marginal fair value gains of $8.9 million while Q4 2020 reported net fair value losses of $42.3 million. The Trust estimated no major pandemic-related adjustments were warranted for the IFRS value of its investment properties in the First Quarter.

Same Property NOI – Commercial

  • Same property NOI decreased by 4.6% for the First Quarter for the overall commercial portfolio when compared to the same respective period in 2020 mainly due to the pandemic-related provision.
  • Excluding the pandemic-related provision, same property NOI would have decreased by 1.1% for the First Quarter. This decrease was primarily driven by certain other effects of the pandemic on property operations such as on occupancy.

Operations – Commercial

  • The Trust completed 1.1 million (at 100% ownership interest) square feet of new and renewed leases during the quarter. It achieved new leasing spreads of 14.2% for the overall portfolio and 18.6% for major market properties, both more than doubling the pre-pandemic Q1 2020 results. Combined with a renewal leasing spread of 5.0%, the blended leasing spread was 8.1% for the overall portfolio and 9.8% for the major market portfolio, both exceeding the pre-pandemic Q1 2020 results.
  • Despite the fluctuations in the mandated business closures during the First Quarter, committed and in-place occupancy at RioCan’s commercial properties increased by 10 basis points and 20 basis points to 95.8% and 95.1%, respectively by the quarter end. Retail committed occupancy held steady at 96.1% from the year end while office committed occupancy increased by 30 basis points to 91.4%. Retail in-place occupancy increased by 30 basis points to 95.4%.
  • Since the end of the First Quarter, the Trust has further improved the committed and in-place occupancy by 20 basis points each to 96.0% and 95.3% as of May 3, 2021.
  • RioCan continues to evolve its property mix and tenant mix as it anticipates, and adapts to, the ever changing retail landscape. As of the quarter end, 90.8% of RioCan’s annualized rental revenue is from Grocery Anchored, Mixed-Use / Urban and Open Air Centres. The Grocery Anchored Centre proportion increased by 50 basis points from the previous quarter to 42.5%, while the Enclosed Centres proportion further decreased by 30 basis points to 9.2%.
  • With respect to tenant mix, RioCan increased its grocery/pharmacy/liquor tenant mix by 10 basis points to 17.0% while its exposure to apparel decreased by 20 basis points to 6.7%, when compared to the 2020 year end.

Operations – Residential

  • The Trust’s growing purpose-built RioCan LivingTM residential rental portfolio currently includes 1,218 residential rental units (at 100%) across four buildings – eCentralTM and PivotTM in Toronto, FrontierTM in Ottawa, and BrioTM in Calgary. Frontier has achieved stabilized occupancy while the three remaining rental towers are in various phases of lease-up.
  • As of May 3, 2021, Frontier was 98.7% leased and eCentral was 84.5% leased. While the significant slowdown in immigration and wider spread of household consolidation during the pandemic have impacted current residential leasing, RioCan’s well-located and professionally managed RioCan Living residential rental assets will benefit from the reversal of these short-term trends post the pandemic. The Trust remains confident in the long-term strategic importance and net asset value growth prospect of its residential rental business. This is further supported by the successful closing of the sale of a 50% non-managing interest in eCentral and the commercial component of ePlace during the quarter at attractive 3.6% and 4.6% capitalization rates, respectively, based on stabilized NOI.
  • Despite being launched during the pandemic, lease-up of Brio and Pivot continues to trend well, highlighting the resilience of well-located and well-designed buildings. As of May 3, 2021, Brio was 74.1% leased, up 14.8% from the previous quarter report, while Pivot was 20.8% leased since its initial launch in December 2020, up 10.0% from the previous quarter report.
  • The Trust collected 98.2% of the First Quarter’s billed residential rents as of May 3, 2021.

Capital Recycling

  • The Trust’s capital recycling program provides one of the most efficient and effective sources of capital to fund value creation initiatives such as developments and strengthening the Trust’s balance sheet. During the quarter, $176.6 million of dispositions were closed, of which $155.6 million were income producing assets at a weighted average capitalization rate of 4.19% based on in-place NOI and the remaining $21.0 million were development properties with no in-place NOI. As of May 3, 2021, the Trust further closed or entered into firm or conditional agreements to dispose 100% or partial interests in a number of properties for total sales proceeds of $366.5 million.
  • In aggregate, closed, firm and conditional deals since the beginning of 2021 totaled $543.1 million, consisting of $421.2 million of income producing properties at a weighted average capitalization rate of 5.15% based on in-place NOI and $121.8 million of development properties.
  • Certain of these transactions involve the sale of partial interests in development properties or future density, as well as closing of prearranged air rights sales. They allow the Trust to not only realize inherent density value, recycle capital to fund its mixed-use development program, but also to mitigate risk, share costs, earn additional fee income, and attract new partners or strengthen existing partner relationships. The quality of RioCan’s assets are evident in the pricing achieved and in the well-respected and established partners attracted despite uncertainty during challenging pandemic circumstances.

Development Highlights

  • Purpose-built RioCan Living residential rental properties, as well as condominium and townhouse projects, remain a cornerstone of RioCan’s development program. Residential development represents 82.8% or 34.6 million square feet of the Trust’s current estimated development pipeline of 41.8 million square feet. During the quarter, the Trust completed 30,000 square feet of development, primarily related to the first phase of the 100% owned Windfields Farm Commercial project in Oshawa, Ontario. This project is 89% leased to grocery and other necessity-based retailers with the remaining construction to be completed this year. It complements and serves the Windfields Farm residential community which RioCan is developing with its partner, Tribute Communities. The residential project includes three phases or 392 units of townhouses (first phase or 170 units have been completed and second phase or 153 units are 100% pre-sold with construction underway) and three condominium towers comprised of 1,500 units (first tower with 503 units is 100% pre-sold with construction underway and pre-sale of the 601-units second tower to start in July 2021). The success of the retail leasing and condominium and townhouse sales with profit margins of up to 23% illustrate the attractiveness of this growing community and RioCan’s ability to generate net asset value growth for its Unitholders.
  • Construction of the 36 storey office tower at The Well™ remains on track for initial tenant possession in 2021. The steel canopy is being installed over the multi-level retail galleria while approximately a third of the 340,000 square feet of retail space has been leased to forward-thinking tenants that are characteristic of the vibrant nature of the King West neighbourhood. With respect to the residential component, the tower concrete structure has reached level 11 for the 592-unit residential rental building at FourFifty The WellTM and on April 7, 2021, the air rights transaction for this building was completed. As a result, Woodbourne Canada Partners (“Woodbourne”) and RioCan each owns 50% of the development property. Air rights sales for three of the six residential buildings are now complete with conveyance of the air rights of the three remaining buildings on track to be completed in 2021.
  • The Well community will ultimately be comprised of 1,700 condominium and purpose-built rental units including the towers that Tridel Builders Inc. (“Tridel”) and Woodbourne will develop on their own, in addition to the 340,000 feet of gross leasable retail space and the 1.2 million square feet of gross leasable office space which is 85% pre-leased to strong covenant tenants such as Shopify. By providing housing options for young professionals, growing families and empty nesters, Tridel has pre-sold 84% of its condominium inventory released, further underscoring the desirability and demand for this mixed-use community.
  • The majority of RioCan’s development projects were not materially impacted by the pandemic during the First Quarter. As of March 31, 2021, properties under development and residential inventory accounted for 10.7% of the Trust’s consolidated gross book value of assets, well under the 15% limit permitted under its unsecured operating line of credit and other credit facilities agreements. The Trust’s long-term goal is to keep this ratio at 10% or lower. With the completion of a significant portion of The Well in 2021 as well as staggered development starts, and sharing of development costs and risks with existing and future strategic partners, the Trust expects future annual development spend to be lower than its 2021 target of $500 million.

Ample Liquidity and Balance Sheet Strength

  • RioCan continued to maintain ample liquidity. As of March 31, 2021, the Trust had $1.3 billion of liquidity in the form of cash and cash equivalents and undrawn lines of credit on a proportionate share basis. RioCan had a large unencumbered asset pool of $8.7 billion as of the quarter end on a proportionate share basis, which generated 59.5% of RioCan’s annualized NOI and provided 2.21x coverage over its unsecured debt.
  • On April 23, 2021, the Trust successfully extended the maturity of its revolving unsecured operating line of credit by two years to May 31, 2026. All other terms and conditions remained the same.
  • Of the Trust’s $380.0 million mortgage maturities in 2021, only $102.1 million have yet to be refinanced or do not have refinancing commitments in place as of May 3, 2021. They mature in the remainder of the year and are expected to be refinanced in due course.
  • Debt to Adjusted EBITDA was 10.02x and debt to total assets was 45.3% as of March 31, 2021, both on a proportionate share basis. The increase in debt to Adjusted EBITDA relative to the 2020 year end was primarily because this is a twelve-month trailing metric and thus the ratio for the current quarter included four quarters under the pandemic while the year end ratio included only three quarters under the pandemic. The change in debt to total assets was marginal.
  • The Trust’s long-term goal remains to lower the two above metrics to its target ranges of 8.0x or lower and 38%-42%, respectively. These metrics are expected to marginally increase in the near-term during the pandemic, but disposition sale proceeds and continuous operations improvements will bring them down in the medium-term.
  • Over the long-term, the Trust also targets to shift its unsecured/secured debt composition to 70/30 (56/44 as of March 31, 2021 on proportionate share basis).
  • On January 15, 2021, RioCan redeemed, in full, its $250.0 million, 3.716% Series R unsecured debenture due December 13, 2021. Total prepayment costs were $7.0 million including the write-off of unamortized deferred financing costs.
  • On April, 9, 2021, RioCan redeemed, in full, its $300.0 million, 2.194% Series Z unsecured debentures upon maturity.

Environmental, Social and Governance (ESG) Progress

  • During the quarter, the Trust continued to make progress towards its commitment to leading the way in ESG best practices with a number of ongoing initiatives.
  • The Trust published its first green bond report for its inaugural green bond Series AC unsecured debentures issued on March 10, 2020. As reported, the Trust fully allocated the use of the net proceeds of $348.4 million from this green bond issue. Sustainalytics, a leading third party ESG research, ratings and data firm, provided the verification of the use of the net proceeds in compliance with RioCan’s Green Bond Framework.
  • The Trust completed its key Diversity, Equity and Inclusion (DEI) initiatives such as development of the DEI Charter, the governing document outlining its DEI Council’s goals and missions, finalization of the DEI strategy, conducting of its first ever DEI survey to form a baseline and determine focus areas for continuous improvement, launch of the DEI homepage on the RioCan intranet site and creation of a DEI mailbox to encourage communications and ongoing dialogues.
  • RioCan announced a new partnership with Context, in collaboration with the City of Toronto and Toronto Community Housing Corporation (“TCHC”) to develop a mixed-use master plan community at Queen & Coxwell in Toronto, Ontario. The project will contribute to the revitalization of the neighbourhood, provide much-needed housing for all income levels including affordable rental units and introduce vital retail amenities to serve this growing neighbourhood. Further, the project will invest in the community it serves and make contributions to the City’s Community Economic Development Initiatives including a $100,000 scholarship fund for TCHC tenants, a $250,000 economic and social development fund and a minimum of $500,000 in value for job opportunities. The partners have started condominium pre-sales with 88.6% (325 units) pre-sold as of May 3, 2021 (at 100%), despite the pandemic.
  • RioCan maintained open communication channels and feedback loops with investors through its Board outreach program.
  • In April 2021, RioCan was recognized as one of Canada’s Greenest Employers 2021, a designation awarded to employers that lead the nation in creating a culture of environmental awareness as part of the annual Canada’s Top 100 Employers project.

Chief Financial Officer (CFO) Transition

  • RioCan is progressing well in its search for a CFO to succeed Qi Tang. As previously announced, Ms. Tang has decided to pursue other leadership opportunities and will resign from her current role as the Senior Vice President and CFO effective May 12, 2021. The Trust anticipates announcing a permanent successor by the third quarter of 2021.
  • As the Trust completes its search for a permanent CFO, Franca Smith, current Vice President Finance of RioCan, will serve as Interim CFO effective upon Ms. Tang’s resignation. Ms. Smith brings a wealth of experience with over 25 years of finance and accounting expertise and leadership. Ms. Smith joined RioCan in 2017 and currently oversees financial reporting, development accounting, payroll and total rewards, and internal controls. Prior to joining RioCan, Ms. Smith held the position of VP Finance & Accounting at the Dream group of companies. Previously, she served as Senior Vice President, Controller at George Weston Limited. Ms. Smith received her Bachelor of Commerce from the University of Toronto and holds the CPA CA designation.
  • During her 5-year tenure at RioCan, Ms. Tang has made significant contributions through her leadership in financial and capital management, strategy development, investor relations, reporting and compliance, among others. Since announcing her resignation on March 2, 2021, Ms. Tang has focused on a seamless transition working with Ms. Smith and other RioCan executives while carrying out her CFO duties. Ms. Smith is a respected leader with exceptional knowledge of the Trust and the real estate industry. She is well-suited to managing RioCan’s balance sheet in a disciplined and prudent way. She has a proven track record and has demonstrated her commitment to supporting RioCan’s value creation initiatives.

Conference Call and Webcast

Interested parties are invited to participate in a conference call with management on Tuesday, May 4, 2021 at 10:00 a.m. (ET). Participants will be required to identify themselves and the organization on whose behalf they are participating.

In order to participate, please dial 647-427-3230 or 1-877-486-4304. For those unable to participate in the live mode, a replay will be available at 1-855-859-2056, passcode 3289283#.

For a copy of the slides to be used for the conference call or, to access the simultaneous webcast, visit RioCan’s website at http://investor.riocan.com/investor-relations/events-and-presentations/ and click on the link for the webcast.

About RioCan

RioCan is one of Canada’s largest real estate investment trusts. RioCan owns, manages and develops retail-focused, increasingly mixed-use properties located in prime, high-density transit-oriented areas where Canadians want to shop, live and work. As at March 31, 2021, our portfolio is comprised of 223 properties with an aggregate net leasable area of approximately 38.0 million square feet (at RioCan’s interest) including office, residential rental and 15 development properties. To learn more about us, please visit www.riocan.com.

Basis of Presentation and Non-GAAP Measures

All figures included in this News Release are expressed in Canadian dollars unless otherwise noted. RioCan’s unaudited interim condensed consolidated financial statements (“Condensed Consolidated Financial Statements”) are prepared in accordance with International Financial Reporting Standards (IFRS). Financial information included within this News Release does not contain all disclosures required by IFRS, and accordingly should be read in conjunction with the Trust’s Condensed Consolidated Financial Statements and MD&A for the three months ended March 31, 2021, which is available on RioCan’s website at www.riocan.com and on SEDAR at www.sedar.com.

Consistent with RioCan’s management framework, management uses certain financial measures to assess RioCan’s financial performance, which are not in accordance with generally accepted accounting principles (GAAP) under IFRS. Funds From Operations (“FFO”) and FFO (excluding debenture prepayment costs), Same Property NOI, Debt to Adjusted EBITDA, Ratio of Total Debt to Total Assets, RioCan’s Proportionate Share, Unencumbered Assets to Unsecured Debt and Total Enterprise Value, as well as other measures that may be discussed elsewhere in this News Release, do not have a standardized definition prescribed by IFRS and are, therefore, unlikely to be comparable to similar measures presented by other reporting issuers. RioCan supplements its IFRS measures with these Non-GAAP measures to aid in assessing the Trust’s underlying performance and reports these additional measures so that investors may do the same. 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 full definitions of these measures, please refer to the “Non-GAAP Measures” section in RioCan’s MD&A for the three months ended March 31, 2021.

Forward-Looking Information

This News Release contains forward-looking information within the meaning of applicable Canadian securities laws. This information reflects RioCan’s objectives, our strategies to achieve those objectives, as well as statements with respect to management’s beliefs, estimates and intentions concerning anticipated future events, results, circumstances, performance or expectations that are not historical facts. Forward-looking information generally can be identified by the use of forward-looking terminology such as “outlook”, “objective”, “may”, “will”, “would”, “expect”, “intend”, “estimate”, “anticipate”, “believe”, “should”, “plan”, “continue”, or similar expressions suggesting future outcomes or events. Such forward-looking information reflects management’s current beliefs and is based on information currently available to management. All forward-looking information in this News Release is qualified by these cautionary statements. Forward-looking information is not a guarantee of future events or performance and, by its nature, is based on RioCan’s current estimates and assumptions, which are subject to numerous risks and uncertainties, including those described in the “Risks and Uncertainties” section in RioCan’s MD&A for three months ended March 31, 2021 and in our most recent Annual Information Form, which could cause actual events or results to differ materially from the forward-looking information contained in this News Release. General economic conditions, including interest rate fluctuations, may also have an effect on RioCan’s results of operations. Material factors or assumptions that were applied in drawing a conclusion or making an estimate set out in the forward-looking information may include, but are not limited to: a gradual recovery and growth of the retail environment and the general economy over 2021; relatively historically low interest costs; a continuing trend toward land use intensification at reasonable costs and development yields, including residential development in urban markets; access to equity and debt capital markets to fund, at acceptable costs, future capital requirements and to enable our refinancing of debts as they mature; the availability of investment opportunities for growth in Canada; the timing and ability for RioCan to sell certain properties; the valuations to be realized on property sales relative to current IFRS values; and the Trust’s ability to utilize the capital gain refund mechanism. Although the forward-looking information contained in this News Release is based upon what management believes are reasonable assumptions, there can be no assurance that actual results will be consistent with this forward-looking information.

Given the current level of uncertainty arising from the COVID-19 pandemic, there can be no assurance regarding the impact of COVID-19 on the business, operations, and financial performance of RioCan and its tenants, as well as on consumer behaviors and the economy in general. General risks and uncertainties related to the COVID-19 pandemic also include, but are not limited to, the length, spread and severity of the pandemic; the timing of the roll out and efficacy of the vaccines, the nature and length of the restrictive measures implemented or to be implemented by various levels of government in Canada; RioCan’s tenants’ ability to pay rents as required under their leases; the availability of various support programs that are or may be offered by the various levels of government in Canada; the introduction or extension of temporary or permanent rent control or other form of regulation or legislation that may limit the Trust’s ability or its extent to raise rents based on market conditions upon lease renewals or restrict existing landlord rights or landlord’s ability to reinforce such rights; domestic and global supply chains; timelines and costs related to the Trust’s development projects; the pace of property lease-up and rents and yields achieved upon development completion; potential changes in leasing activities, market rents and property valuations; the capitalization rates that arm’s length buyers and sellers are willing to transact on properties; the availability and extent of rent deferrals offered or to be offered by the Trust; domestic and global credit and capital markets, and the Trust’s ability to access capital on favourable terms or at all and its ability to maintain its credit ratings; the total return and dividend yield of RioCan’s Units; and the health and safety of our employees, tenants and people in the communities that our properties serve.

The forward-looking statements contained in this News Release are made as of the date hereof, and should not be relied upon as representing RioCan’s views as of any date subsequent to the date of this News Release. Management undertakes no obligation, except as required by applicable law, to publicly update or revise any forward-looking information, whether as a result of new information, future events or otherwise.

Contact Information
RioCan Real Estate Investment Trust
Qi Tang
Senior Vice President and Chief Financial Officer
416-866-3033 | www.riocan.com

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