RioCan Real Estate Investment Trust Announces Record Operating Funds from Operations of $1.68 Per Unit in 2014

TORONTO, ONTARIO–(Marketwired – Feb. 13, 2015) – RioCan Real Estate Investment Trust (TSX:REI.UN) –

RioCan’s HIGHLIGHTS for the year ended December 31, 2014 were:

• RioCan’s Operating FFO increased 5.1% to $517 million for the year ended December 31, 2014 compared to $492 million for the same period in 2013. On a per unit basis, Operating FFO increased by $0.05 or 3.1% to $1.68 compared to $1.63 during 2013;
• RioCan’s Operating FFO increased by 4.5% to $130 million for the three months ending December 31, 2014 (“fourth quarter”) compared to $124 million in the fourth quarter of 2013. On a per unit basis, Operating FFO increased 2.4% to $0.42 from $0.41 in the same period of 2013;
• During the fourth quarter, RioCan and Tanger celebrated the successful Grand Openings of the expanded Tanger Factory Outlets in Cookstown, Ontario and the Tanger Factory Outlets Centre in Kanata, Ontario, which is the first newly constructed outlet centre by RioCan and Tanger;
• For the year ended December 31, 2014, RioCan transferred approximately one million square feet of development space at RioCan’s interest to the income producing portfolio;
• RioCan’s concentration of rental revenue in Canada’s six major markets at December 31, 2014 increased to 73.3% from 71.7% at December 31, 2013. When incorporating RioCan’s acquisition and disposition activities completed subsequent to year-end, RioCan’s concentration of rental revenue in Canada’s six major markets is 73.9%;
• Overall occupancy improved to 97.0% as of December 31, 2014, compared to 96.9% at December 31, 2013;
• For the year ended December 31, 2014, RioCan renewed 4.2 million square feet in the Canadian portfolio at an average rent increase of $1.84 per square foot, representing an increase of 11.4%. RioCan renewed 0.6 million square feet in the Canadian portfolio during the fourth quarter at an average rent increase of $2.45 per square foot, representing an increase of 11.8%;
• For the year ended December 31, 2014, RioCan’s same store growth was 2.0% in Canada and 3.0% in the U.S.. During the fourth quarter, RioCan’s same store growth was 0.6% in Canada and 4.4% in the U.S.;
• As at December 31, 2014, RioCan had ownership interests in 15 properties under development that will, upon completion, comprise approximately 7.0 million square feet (3.9 million at RioCan’s interest), all located in major markets in Canada;
• During the quarter, RioCan completed the offering of 4.8 million Trust units at $26.25 per Unit for gross proceeds of $126 million;
• Subsequent to the year-end, RioCan announced the offering of $300 million Series W senior unsecured debentures. The debentures carry a coupon of 3.287% and will mature on February 12, 2024. RioCan also announced the redemption of US$100 million Series N debentures and $225 million Series N debentures; and
• Subsequent to the year-end, RioCan announced that it has appointed Cynthia Devine as Chief Financial Officer of RioCan Effective March 16, 2015.

RioCan Real Estate Investment Trust (“RioCan”) today announced its financial results for the year ended December 31, 2014.

“Our 2014 results once again demonstrate the strength and stability of RioCan. In the past year, RioCan has generated more Funds From Operations than any year in its history. RioCan’s growth is provided from multiple facets, including acquisitions, the one million square feet of development that was transferred into the income property portfolio during the year, and the more than four million square feet of renewal leasing which contributed to the solid same store growth of 2% in Canada and 3% in the U.S.” said Edward Sonshine, Chief Executive Officer of RioCan. “The current year is shaping up as one that will not be without its challenges. However, the strength of the Trust’s management team, the quality of its portfolio, and the opportunities that are generated as a result of our strategic relationships will provide the foundation for continued growth again in 2015.”

Financial Highlights

All figures in Canadian dollars unless otherwise noted. RioCan’s results are prepared in accordance with International Financial Reporting Standards (“IFRS”). Consistent with RioCan’s management framework, management uses certain financial measures to assess RioCan’s financial performance, which are not generally accepted accounting principles (GAAP) under IFRS. For a full definition of these measures, please refer to the “Use of Non-GAAP Measures” in RioCan’s fourth quarter 2014 Management Discussion and Analysis.

Operating FFO at RioCan’s interest for the year ended December 31, 2014 was $517 million or $1.68 per Unit, compared to $492 million or $1.63 per Unit for the same period in 2013, representing an increase of $25 million or 5.1%. On a per Unit basis, Operating FFO increased by $0.05 per Unit or 3.1%.

The $25 million increase in Operating FFO at RioCan’s interest for the year ended December 31, 2014 as compared to the same period in 2013 is primarily due to the following:

• an increase in NOI from rental properties of $25 million, which includes the impact of the following items: acquisitions, net of dispositions (completed over the last 12 months); additional income property NLA resulting from completion of development projects (including the Tanger Cookstown expansion, Tanger Ottawa and The Stockyards openings); Canadian and U.S. same property NOI growth; and a $10 million higher foreign currency gain from U.S. operations as compared to the same period in 2013;
• an increase in fees and other income of $3.6 million due to an increase in investment income and financing fees on joint venture projects earned during 2014, partially offset by lower development fees generated on joint venture projects; and
• a decrease in interest expense of $8.4 million, net of $3.3 million unfavourable impact of foreign exchange; partly offset by
• lower interest income of $6.4 million due primarily to the impact of the settlement of certain mezzanine loans during the first quarter of 2014 in connection with the acquisition of interests in three development projects; and
• an increase in general and administrative costs of $7.2 million due primarily to increased information technology costs, depreciation and amortization associated with the launch of a new ERP platform in 2014; professional fees related to the introduction of a new senior executive incentive compensation plan and consulting fees related to certain activities undertaken to optimize the Trust’s U.S. legal entity and tax structure; and headcount increases associated with the increased complexity of operations and the inclusion of certain salary costs in 2014 that were previously capitalized over the development phase of RioCan’s ERP system project.

Highlights

• For the year ended December 31, 2014, RioCan renewed 4.2 million square feet in the Canadian portfolio at an average rent increase of $1.84 per square foot, representing an increase of 11.4%. RioCan renewed 0.6 million square feet in the Canadian portfolio during the fourth quarter at an average rent increase of $2.45 per square foot, representing an increase of 11.8%;
• RioCan’s retention rate was 90.2% for the year ended December 31, 2014 in Canada and 85.0% in the fourth quarter. In the U.S., RioCan’s retention rate was 93.4% for the year ended December 31, 2014 and 78.3% in the fourth quarter;
• RioCan’s Canadian portfolio is concentrated in Canada’s six high growth markets (consisting of Calgary, Edmonton, Montreal, Ottawa, Toronto and Vancouver). Assets in these markets contribute approximately 73.3% of RioCan’s Canadian annualized rental revenue (71.7% at December 31, 2013). The increase was accomplished through developments and the sale of certain assets in secondary markets;
• National and anchor tenants represented about 86.4%of RioCan’s total annualized rental revenue at December 31, 2014, a slight increase compared to 86.2% at December 31, 2013; and
• No individual tenant comprised more than 4.1% of annualized rental revenue. At December 31, 2014, Loblaws (which includes Shoppers Drug Mart) was RioCan’s largest revenue source.

Target Canada

On January 15, 2015, Target Corporation (Target) announced plans to discontinue its Canadian operations through its indirect wholly-owned subsidiary, Target Canada, and that it was utilizing the Companies’ Creditors Arrangement Act (Canada) (“CCAA”) to wind down its operations. As at December 31, 2014, RioCan has 26 locations under lease with Target Canada representing approximately 1.9% of RioCan’s total annualized rental revenue with an average remaining lease term of approximately 12.7 years. All but one of these leases are guaranteed through an indemnity arrangement with Target, generally for the lesser of (i) the remaining term of each lease and (ii) ten years. The one lease that is not covered by the Target indemnity is guaranteed by Walmart Canada.

Portfolio Activity and Acquisition Pipeline

During the fourth quarter, RioCan completed acquisitions of interests in three income properties aggregating to $62 million representing RioCan’s share of the purchase price with a weighted average capitalization rate of 5.7%.

Acquisitions Completed in the Fourth Quarter

Canada

• On October 24, 2014, RioCan completed the acquisition of a 40.34% interest in the 47,000 square foot medical office building at Mill Woods Town Centre at a purchase price of approximately $5 million, representing a capitalization rate of 6.1%. In connection with the acquisition, RioCan assumed approximately $2 million in mortgage financing carrying interest at 4.40%, maturing in December 2015. RioCan owns a 40.34% interest in Mill Woods Town Centre, which is a 538,000 square foot single-level enclosed shopping centre located in Edmonton, Alberta, anchored by Target, Canadian Tire and Safeway. Partner Bayfield Realty Advisors holds the remaining interests in both the shopping centre and medical office building, and was the vendor of the 40.34% interest that RioCan acquired in the medical office building.
• On December 12, 2014, RioCan completed the acquisition of the remaining 80% interest in Meadow Ridge Plaza located in Ajax, Ontario, at a purchase price of approximately $30 million, representing a capitalization rate of 5.6%. This acquisition, which brings RioCan’s ownership interest in the property to 100%, was completed free and clear of financing. The centre is comprised of a 46,000 square foot Sobeys and single tenant pads occupied by McDonald’s Restaurant, Bank of Nova Scotia and Beer Store as well as a multi-tenant strip. Future development plans are being contemplated, as the property is zoned to accommodate an additional 62,000 square feet of retail density.
• On December 12, 2014, RioCan completed the acquisition of an additional 20% interest in Mayfield Common located in Edmonton, Alberta, at a purchase price of approximately $27 million, representing a capitalization rate of 5.8%. This acquisition, which brings RioCan’s ownership interest in the property to 50%, was completed free and clear of financing. Mayfield Common is a 430,000 square foot new format retail centre located at the Stoney Plain Road and Mayfield Road intersection, near the West Edmonton Mall. The centre is anchored by a 54,000 square foot Save-On-Foods and a 62,000 square foot Winners/HomeSense. Other national tenants include World Health, Value Village, Reitman’s, Roots, The Shoe Company and Pro Hockey Life.

Acquisitions Completed Subsequent to the Year End

• On January 15, 2015, RioCan completed the acquisition of a 100% interest in an 18 property portfolio at a purchase price of approximately $50 million, representing a capitalization rate of 5.5%. The properties, which are all single-tenant units occupied by the Bank of Montreal totalling 174,000 square feet, were acquired free and clear of financing. 11 of the properties are located in Ontario, six are located in British Columbia and one is located in Quebec.
  The portfolio benefits from a high quality cash flow stream, and the leases are all triple net leases that provide for modest rent growth over the remaining lease term. Many of these properties are well located within the downtown cores of their respective markets. The individual lease terms of the portfolio are all ten years or longer with a weighted average lease term of 12.7 years for the overall portfolio.
• On January 15, 2015, RioCan completed the acquisition of the remaining 50% interest in RioCan Leaside Centre, in Toronto, Ontario from Kimco Realty Corporation (“Kimco”). This 133,000 square foot new format centre is anchored by Canadian Tire. Other tenants include PetSmart, Pier One Imports, and Alexanian Carpet & Flooring. The property is well located at the corner of Eglinton Avenue and Laird Avenue along the Eglinton Light Rail (“LRT”) line, currently under construction. The site is planned to host a secondary entrance to the LRT stop at the southeast corner of Eglinton Avenue and Laird Avenue. The 50% interest in the centre was acquired from Kimco at a purchase price of $32 million, which equates to a capitalization rate of 5.5%. RioCan assumed Kimco’s $16 million interest in the debt on the property, which carries an interest rate of 3.34% and matures in 2017.

Acquisitions Under Contract

RioCan does not have any income property acquisitions under firm or conditional contract.

Pipeline Acquisitions

RioCan is currently in negotiations, including with respect to potential joint venture arrangements, regarding various income property acquisitions in Canada that, if completed, would represent approximately $445 million of additional acquisitions at RioCan’s interest. These transactions are in various stages of negotiations and while efforts will be made to complete these negotiations, no assurance can be given with respect to the completion of the arrangements or acquisitions.

Property Dispositions

During the fourth quarter RioCan did not complete any property dispositions. Subsequent to December 31, 2014, RioCan completed the dispositions of five income properties in Canada totalling $120 million, representing a weighted average capitalization rate of 6.8%. The Trust’s mortgage obligation related to these properties was approximately $21 million.

Property Dispositions Under Contract and Being Marketed

Income property dispositions

RioCan no longer has any income property dispositions under conditional contracts, but is in the process of marketing for sale an income property with a fair value as at December 31, 2014 calculated in accordance with IFRS of approximately $11 million, at RioCan’s interest. This income property is free and clear of financing. RioCan is under no obligation to proceed with the proposed disposition which, if completed, will be done to facilitate its objective of paring its portfolio and focusing on major markets.

RioCan is also currently in negotiations, including with respect to potential joint venture arrangements, regarding various income property dispositions in Canada that, if completed, would represent dispositions of approximately $297 million at RioCan’s interest. These transactions are in negotiations and while efforts will be made to complete the negotiations, no assurance can be given with respect to the completion of these dispositions.

Land dispositions

RioCan has dispositions of land parcels under conditional contracts where conditions have not yet been waived for approximately $18 million, at RioCan’s interest. These land parcels are free and clear of financing.

RioCan is also in the process of marketing for sale land parcels with an aggregate fair value as at December 31, 2014 calculated in accordance with IFRS of approximately $41 million, at RioCan’s interest. These land parcels are free and clear of financing. RioCan is under no obligation to proceed with the proposed dispositions which, if completed, will be done to facilitate its objective of paring its portfolio and focusing on major markets.

Development Portfolio

As at December 31, 2014, RioCan had ownership interests in 15 development projects that will, upon completion, comprise about 7.0 million square feet (3.9 million square feet at RioCan’s interest). In addition to its development projects, RioCan continued its urban intensification activities, primarily in the Toronto, Ontario and Calgary, Alberta markets.

During the fourth quarter, RioCan transferred from properties under development to income producing properties $33 million in costs pertaining to 6 thousand square feet of completed greenfield development or expansion and redevelopment projects. For the year ended December 31, 2014, RioCan transferred $363 million in costs pertaining to one million square feet.

Residential Development

RioCan is committed to ensuring that the individual properties in its portfolio are utilized to their highest and best use. While there are numerous ways to utilize its existing properties beyond their current use of conventional retail centres, RioCan has focused on mixed use projects containing predominantly multi-residential rental buildings. RioCan has identified 50 properties that it deems to be strong intensification opportunities. These are in the six major urban markets and are typically located in the vicinity of substantive transit infrastructure. RioCan’s objective is to develop approximately 19,000 apartment units over the course of the next ten years. Given the early stage of the evolution of this strategy, there can be no assurance that any of these developments will be undertaken, and if they are, on what terms.

There are numerous attributes that attracted RioCan to the multi-unit residential sector. The addition of a residential component will enhance the value of the underlying retail element of the property. It is a sector that allows a steady and continuous income stream with a growth profile that will serve as a hedge against inflation. The residential rental sector serves as a healthy diversification to RioCan’s retail portfolio. Given the extent of this initiative, RioCan will possess a scale that will result in numerous efficiencies going forward. RioCan owns the underlying land, often at irreplaceable locations, thus giving it the unique opportunity to create a tremendous amount of value. Finally, residential rental will typically attract favourable financing terms based on the availability of CMHC insurance.

RioCan has established a team to carry forward the residential rental initiative, drawing from its existing areas of expertise. The team is comprised of existing RioCan executives as well as third-party consultants. As the initiative continues to grow, additional resources will be added to the platform to facilitate such growth.

To date, RioCan has filed applications for rezoning eight projects which, upon completion, should comprise a total of 5.8 million square feet, of which 2.7 million square feet will be residential rental units held for long-term rental income, 1.0 million square feet will be condominiums for sale and 2.1 million square feet will be incremental commercial gross leasable area. This would permit RioCan to have an interest in approximately 3,369 residential units. The majority of these properties are located directly on, or in close proximity, to major transit lines such as the existing Toronto Transit Commissions’ subway lines or The Crosstown Eglinton LRT line, which is currently under construction. The ability to intensify its existing retail properties into transit-oriented mixed use developments is indicative of both the locational attributes of RioCan’s land holdings and the strength of its management platform. The figures in the chart below and those noted herein are at 100% interest and as at February 12, 2015. In some cases, RioCan has partners and, therefore, does not hold a 100% interest.

RioCan intends to file applications to rezone 17 additional properties by the end of 2015. These proposed redevelopments are expected to produce approximately 8.6 million square feet, of which 6.2 million square feet is expected to be residential. This would permit RioCan to have an interest in an additional 8,713 residential units. As these projects are in preliminary stages, there can be no assurance that any of these developments will be undertaken and if so, on what terms.

Development Acquisitions Completed During the Fourth Quarter

• On November 3, 2014, RioCan completed the acquisition of a 50% interest in the site where TD Bank is currently located at the northeast corner of Yonge Street and Eglinton Avenue in Toronto, Ontario, at a purchase price of $12 million ($6 million at RioCan’s interest). The acquisition, which was completed free and clear of financing, forms part of the existing Northeast Yonge Eglinton land assembly, acquired in 2011 with Metropia and Bazis for the purpose of redeveloping into a mixed-use retail and residential property. RioCan and its partners obtained zoning approval and the redevelopment commenced in April 2014.
• On December 5, 2014, RioCan completed the acquisition of 499 Adelaide Street West located in Toronto, Ontario, at a purchase price of $0.6 million, at RioCan’s interest. The asset was acquired free and clear of financing and will be fully redeveloped as part of the multi-parcel land assembly at the intersection of King Street West and Portland Street in Toronto, Ontario. This acquisition forms part of the King and Portland Joint Venture with Allied Properties Real Estate Investment Trust, with the intention to intensify the site by creating a mixed-use office, retail and residential complex.
• On December 10, 2014, RioCan completed the acquisition of a 50% interest in a 4-acre parcel of land adjacent to RioCan Centre Burloak located in Oakville, Ontario, at a purchase price of approximately $4 million ($2 million at RioCan’s interest). The property was acquired free and clear of financing. Together with a contiguous residual 8.5 acre land parcel, the combined 12.5 acre land parcel will be re-designated and re-zoned in the second quarter of 2015 and an additional 141,000 square feet of retail space will be available for development on the site. RioCan Centre Burloak is a 553,000 new format retail centre situated on an 89-acre parcel of land anchored by Cineplex Theatre, Longo’s Supermarket and a retailer-owned Home Depot. The entire site is owned on a 50%/50% joint venture basis with partner CPPIB.

Development Acquisitions Completed Subsequent to the Year-end

On February 6, 2015, RioCan completed the acquisition of an 81.25% interest in a 5.8 acre land parcel at RioCan Centre Vaughan, located in Vaughan, Ontario, at a purchase price of $4 million ($3 million at RioCan’s interest). Trinity acquired the remaining 18.75% interest and the property was acquired free and clear of financing. The land parcel acquired is adjacent to RioCan’s existing shopping centre at RioCan Centre Vaughan.

Development Property Acquisitions Under Contract

RioCan does not have any development property acquisitions under contract.

Liquidity and Capital

Financing Highlights for the Fourth Quarter

Unencumbered Assets

As at December 31, 2014, RioCan’s unencumbered asset pool was comprised of 100 assets with an aggregate fair value of $2.8 billion.

Credit Facilities

At December 31, 2014, RioCan has five revolving lines of credit in place having an aggregate capacity of $718 million with $565 million available to be drawn.

Term Financing

Canada

• RioCan obtained approximately $98 million fixed-rate mortgage financing during the quarter at an average interest rate of 3.17% and an average term to maturity of 5.85 years.
• Subsequent to the year-end, RioCan announced the early redemption of Series N debentures due September 21, 2015. The Series N Debentures will be redeemed on March 9, 2015, in accordance with their terms, at a total redemption price of US$101.8 million plus accrued and unpaid interest of US$1.9 million up to but excluding the redemption date.
• Subsequent to the year-end, RioCan announced the early redemption of Series O debentures due January 21, 2016. The Series O Debentures will be redeemed on March 11, 2015, in accordance with their terms, at a total redemption price of $231.8 million plus accrued and unpaid interest of $1.4 million up to but excluding the redemption date.
• Subsequent to the year-end, RioCan announced the offering of $300 million Series W senior unsecured debentures. The debentures carry a coupon of 3.287% and will mature on February 12, 2024.

U.S.

• RioCan did not obtain any new term financing in the U.S. during the fourth quarter.

Trust Units

During the fourth quarter, RioCan completed the offering of 4.8 million Trust units at $26.25 per Unit for gross proceeds of $126 million.

RioCan’s Consolidated Financial Statements, Management’s Discussion and Analysis for the three months and year ended December 31, 2014 is available on RioCan’s website at www.riocan.com.

Conference Call and Webcast

Interested parties are invited to participate in a conference call with management on Friday, February 13, 2015 at 10:00 a.m. eastern time. You will be required to identify yourself and the organization on whose behalf you are participating.

In order to participate, please dial 416-340-2216 or 1-800-355-4959. If you cannot participate in the live mode, a replay will be available until March 13, 2015. To access the replay, please dial 905-694-9451 or 1-800-408-3053 and enter passcode 5177814#.

Scheduled speakers include Edward Sonshine, O.Ont. Q.C., Chief Executive Officer, and Rags Davloor, President and Chief Operating Officer and Interim Chief Financial Officer. Management’s presentation will be followed by a question and answer period. To ask a question, press “star 1” on a touch-tone phone. The conference call operator will be notified of all requests in the order in which they are made, and will introduce each questioner.

Alternatively, to access the simultaneous webcast, go to the following link on RioCan’s website http://investor.riocan.com/investor-relations/events-and-presentations/events/ and click on the link for the webcast. The webcast will be archived 24 hours after the end of the conference call and can be accessed for 120 days.

About RioCan

RioCan is Canada’s largest real estate investment trust with a total capitalization of approximately $15.1 billion as at December 31, 2014. It owns and manages Canada’s largest portfolio of shopping centres with ownership interests in a portfolio of 340 retail properties containing more than 79 million square feet, including 48 grocery anchored and new format retail centres containing 13 million square feet in the United States as at December 31, 2014. RioCan’s portfolio also includes 15 properties under development in Canada. For further information, please refer to RioCan’s website at www.riocan.com.

Non-GAAP Measures

RioCan’s consolidated financial statements are prepared in accordance with IFRS. Consistent with RioCan’s management framework, management uses certain financial measures to assess RioCan’s financial performance, which are not generally accepted accounting principles (GAAP) under IFRS. The following measures, RioCan’s

Interest, Funds From Operations (“FFO”), Operating Funds From Operations (“Operating FFO”), Adjusted Funds From Operations (“AFFO”), and Adjusted Earnings before interest, taxes, depreciation and amortization (“Adjusted EBITDA”), Operating EBITDA, Net Debt to Operating EBITDA, Net Operating Income (“NOI”), Same Store NOI, Same Property NOI, and Total Enterprise Value as well as other measures discussed elsewhere in this 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 uses these measures to better assess the Trust’s underlying performance and provides 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 a full definition of these measures, please refer to the “Use of Non-GAAP Measures” in RioCan’s fourth quarter 2014 Management Discussion and Analysis.

Forward-Looking Information

This news release contains forward-looking statements within the meaning of applicable securities laws. These statements include, but are not limited to, statements made in this News Release (including the sections entitled “Highlights for the year ended December 31, 2014”, “Financial Highlights”, “Leasing and Operational Highlights”, “Portfolio Activity and Acquisition Pipeline”, “Liquidity and Capital”, and “Development Portfolio”), and other statements concerning RioCan’s objectives, its 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. Forward-looking statements 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 statements reflect management’s current beliefs and are based on information currently available to management. All forward-looking statements in this News Release are qualified by these cautionary statements.

These forward-looking statements are not guarantees of future events or performance and, by their nature, are based on RioCan’s current estimates and assumptions, which are subject to risks and uncertainties, including those described under “Risks and Uncertainties” in RioCan’s Management’s Discussion and Analysis for the year ended December 31, 2014, which could cause actual events or results to differ materially from the forward-looking statements contained in this News Release. Those risks and uncertainties include, but are not limited to, those related to: liquidity and general market conditions; tenant concentrations and related risk of bankruptcy, occupancy levels and defaults; lease renewals and rental increases; retailer competition; access to debt and equity capital; interest rate and financing risk; joint ventures and partnerships; the relative illiquidity of real property; unexpected costs or liabilities related to acquisitions and dispositions; development risk associated with construction commitments, project costs and related approvals; environmental matters; litigation; reliance on key personnel; management information systems; unitholder liability; income and indirect taxes; U.S. investments, property management and foreign currency risk; and credit ratings. 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 stable retail environment; relatively low and stable interest costs; a continuing trend toward land use intensification in high growth markets; access to equity and debt capital markets to fund, at acceptable costs, the future growth program to enable the Trust to refinance debts as they mature; and the availability of purchase opportunities for growth in Canada and the U.S.. 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 these forward-looking statements. Certain statements included in this News Release may be considered “financial outlook” for purposes of applicable securities laws, and such financial outlook may not be appropriate for purposes other than this News Release.

The Income Tax Act (Canada) contains provisions which potentially impose tax on publicly traded trusts (the “SIFT Provisions”). However, the SIFT Provisions do not impose tax on a publicly traded trust which qualifies as a real estate investment trust (“REIT”). RioCan currently qualifies as a REIT and intends to continue to qualify for future years. Should this not occur, certain statements contained in this News Release may need to be modified.

Except as required by applicable law, RioCan under takes no obligation to publicly update or revise any forward- looking statement, whether as a result of new information, future events or otherwise.