MANAGEMENT INVESTOR PRESENTATION - First Quarter 2018 May 22, 2018
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MANAGEMENT INVESTOR PRESENTATION First Quarter 2018 May 22, 2018
NON-GAAP MEASURES FORWARD LOOKING
INFORMATION
RioCan’s consolidated financial statements are prepared in
accordance with IFRS. Consistent with RioCan’s management Certain information included in this presentation contains
framework, management uses certain financial measures to assess forward-looking statements within the meaning of applicable
RioCan’s financial performance, which are not generally accepted securities laws including, among others, statements concerning
accounting principles (GAAP) under IFRS. our objectives, our strategies to achieve those objectives, as well
as statements with respect to management's beliefs, plans,
The following measures, RioCan’s Proportionate Share (or estimates, and intentions, and similar statements concerning
Interest), Funds From Operations (“FFO”), Net Operating anticipated future events, results, circumstances, performance or
Income (“NOI”), Adjusted Earnings before interest, taxes, expectations that are not historical facts. Certain material
depreciation and amortization (“Adjusted EBITDA”), Debt to factors, estimates or assumptions were applied in drawing a
Adjusted EBITDA, Same Property NOI, Interest Coverage, Debt conclusion or making a forecast or projection as reflected in
Service Coverage, Fixed Charge Coverage, and Total these statements and actual results could differ materially from
Enterprise Value as well as other measures discussed in this such conclusions, forecasts or projections.
presentation, do not have a standardized definition prescribed by
IFRS and are, therefore, unlikely to be comparable to similar
measures presented by other reporting issuers. Additional information on the material risks that could cause our
actual results to differ materially from the conclusions, forecast
Non-GAAP measures should not be considered as alternatives to or projections in these statements and the material factors,
net earnings or comparable metrics determined in accordance with estimates or assumptions that were applied in drawing a
IFRS as indicators of RioCan’s performance, liquidity, cash flow, conclusion or making a forecast or projection as reflected in the
and profitability. For a full definition of these measures, please refer forward-looking information can be found in our most recent
to the “Non-GAAP Measures” in RioCan’s Management’s annual information form and annual report that are available on
Discussion and Analysis for the period ended March 31, 2018. our website and at www.sedar.com.
RioCan uses these measures to better assess the Trust’s
underlying performance and provides these additional measures so
that investors may do the same. 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
PEER DATA PRESENTATION or otherwise.
RioCan data and statistics are based on March 31, 2018
information. Peer group included published results where provided
from First Capital Realty Corp. (FCR), SmartCentres REIT
(SRU.UN), Choice Properties REIT (CHP.UN), CT REIT (CRT.UN),
and Crombie REIT (CRR.UN). Certain slides contain a peer
comparison that was based on the respective issuer’s reported
information as at March 31, 2018 (with the exception of CRR.UN
and SRU.UN, which have not yet released Q1 2018 results at the
time of this presentation).
2
2
ABOUT RIOCAN
GROWTH DRIVEN BY INSIGHT
Quick Facts
Enterprise Value $13.7 B Annualized Revenue from Six Major Market: 80.0%
Number of Properties 284
Net Leasable Area (NLA) 43.3M sf 5.0%
Same Property NOI 2.6%
Major Market Same Property NOI 3.3% Edmonton
11.9% 5.6%
Committed Occupancy 96.6% Calgary
Major Market Committed Occupancy 97.9% Vancouver
Ottawa Montreal
GTA Focus - % of Annualized Rental Revenue 43.7% 8.8%
Peer Average1 23.2% 5.0% Toronto
Revenue from National Tenants 84.6% 43.7%
Average Net Rent BC $17.93
Renewal Spread Q1 2018 4.3% Robust Development Program
Tremendous source of future NAV growth
• One of Canada’s largest REITs, focused on the ownership,
management and development of high quality, necessity 22.2M
based retail, increasingly mixed-use properties in Canada’s incremental
NLA or 54% of
six major markets ON existing NLA2
• Founded in 1993 – 25 year track record
• Robust 26.2 M sf development pipeline, 12.2 M sf or nearly 41.1M
50% already approved for zoning – mostly mixed-use existing
IPP NLA
• Diversified and evolving tenant mix
• Rated BBB with stable outlook by S&P and BBB (high) by
DBRS RioCan NLA RioCan NLA including
incremental NLA from
Development*
2. Includes incremental NLA of 22.2M sf plus 4.0M sf that is currently income producing.
1. Source: company reports; Peers: FCR, CHP, CRT; no data on CRR and SRU Assumes all development projects per the MD&A for the period ended March 31, 2018 are
completed and assumes no additional development, acquisitions, or dispositions
VALUE PROPOSITION AND FOUR STRATEGIC PILLARS
REAL VISION, SOLID GROUND
CANADA’S MAJOR MARKET PORTFOLIO
• High quality, necessity based retail, and increasingly mixed-use major markets portfolio
• Diversified, strong national tenant base
• Significant upside on rent growth
• Base for significant NAV growth – tremendous intrinsic value to be unlocked
• Strong executive bench with wealth of experience and proven track record
DRIVING ORGANIC UNLOCKING STRATEGIC STRONG
GROWTH INTRINSIC VALUE ACQUISITIONS BALANCE SHEET
• Evolving tenant mix • Focusing on transit- • Acquire only the best • Low leverage
and revenue growth oriented urban locations in the six • Low cost of debt
• Improving operating intensification in major major markets • Laddered debt
efficiency and cost markets • Opportunities to maturity and mostly
structure • Mostly mixed-use with acquire partners’ fixed rate
• Redeveloping prime residential rental interests in today’s • Access to multiple
assets and/or condo tight market sources of capital
• Optimize pads by development • Highly selective • Large
adding additional • Strategic alliances to acquisitions of unencumbered
GLA mitigate risk and development sites, assets pool
• Drive ancillary create steady fee leveraging existing generating 58.4% of
revenues stream properties annualized NOI
• Continuous portfolio • Robust and growing
pruning pipeline of well located
sites with substantial
zoning approved
4
CANADA’S MAJOR MARKET PORTFOLIO
WHERE CANADIANS SHOP, LIVE AND WORK
CANADA’S MAJOR MARKET PORTFOLIO
• High quality, necessity based retail, and increasingly mixed-use major markets portfolio
CANADA’S MAJOR MARKET PORTFOLIO
• Diversified, strong national tenant base
• Significant upside on rent growth
• Base for significant NAV growth – tremendous intrinsic value to be unlocked
• Strong executive bench with wealth of experience and proven track record
5
CANADA’S SIX MAJOR MARKETS
WHERE THE POPULATION GROWTH IS
Cumulative Population Growth
2006 as Base Year
64.6%
26.2%
8.7%
17.8%
8.1%
3.7%
2006 2011 2017 2036 Forecast
Six Major Markets Secondary markets
Cumulative population growth between 2006 and: 2017 2036 Forecast
Six major markets 26.2% 64.6%
Secondary markets 8.1% 17.8%
• By 2036, more than half of Canadians will live in Canada’s six major markets
2006, 2017 Data: Statistics Canada 6
2036 Data: Statistics Canada, Provincial and Municipal population forecasts
CANADA’S MAJOR MARKET PORTFOLIO
WHERE CANADIANS SHOP, LIVE AND WORK
Disposition Progress as of May 8, 2018
Transaction type Value (M)
Closed and Firm $583.4
Conditional $224.8
Total to Date $808.2
Weighted Average Cap Rate 6.40%
• Sale prices to-date are in line with IFRS value
• $808M progress since the October 2017 announcement representing
approximately 40% of the $2.0B disposition target
• Dispositions span a broad range of secondary markets
7
DISPOSITION UPDATE
BUYER PROFILE
REITs
• Strategic buyers, such as CT REIT, who are looking to acquire assets where their retail
banner is already a tenant. They know these assets well and recognize the advantage of
controlling properties in which their associate retail banners operate.
• Geographically focused REITs looking to expand footprint in a particular region.
• Small cap REITs looking for growth and accretive acquisitions, which would otherwise be
unavailable in major markets.
Private Individual Buyers
• Objectives include capital preservation and stable, risk-adjusted returns.
• These buyers have local expertise or presence in particular secondary markets, and
therefore covet these assets.
Private Equity and Investment Managers
• Objectives include deploying a robust supply of capital in a low-interest rate environment.
• Increasingly looking at secondary markets in the core to value-add risk range due to limited
supply of product in primary markets.
8
CANADA’S MAJOR MARKET PORTFOLIO
WHERE CANADIANS SHOP, LIVE AND WORK
Major Market GTA Revenue Avg. Age Portfolio
Revenue Focus (yrs.)
24
>90% >50%
43.7% 19
80.0%
Q1 2018 Vision Q1 2018 Vision Q1 2018 Vision
• Higher concentration of revenue from the fastest growing markets
in Canada
• Higher concentration of revenue from the GTA, Canada’s largest
and most important financial market
• Resilience to the changing retail environment
• Enhanced growth profile
• Improved cost structure
9
GREATER TORONTO AREA (GTA) FOCUS
PERCENTAGE OF RENT FROM THE GTA EXCEEDS OUR PEERS
REI Peer Average
42.8% 43.7%*
41.9% 41.7% 41.7% 40.9%
36.8%
34.6%
32.0%
23.1% 23.3% 23.2%
CONSISTENTLY
25.2% 25.6% ABOVE 95%
22.0%
24.0%
2011 2012 2013 2014 2015 2016 2017 Q1 2018
Source: company reports; Peers: FCR, CHP, CRT; no data on CRR and SRU
* Effective Jan 1 2018, the Trust includes Hamilton in the GTA as the Trust believes that Hamilton is a high growth market that forms part of the contiguous urban
region and has strong rapid transit connections to Toronto. Excluding Hamilton, the Trust’s GTA revenue % would have been 41.6%.
• Strong, consistent, industry leading presence in the Greater Toronto Area, which has one
of the highest population and economic growth profiles in the country
10GREATER TORONTO AREA (GTA) FOCUS
INDUSTRY LEADING PRESENCE IN THE TORONTO CORE AND GTA
RioCan
First Capital
SmartCentre REIT
11CANADA’S MAJOR MARKET PORTFOLIO
WHERE CANADIANS SHOP, LIVE AND WORK
Avg. Income Avg. Population
(5km radius) (5km radius)
~$120k ~212k
~205k
~$102k ~$111k
~157k
2017 - All 2017 - Major 2020 2017 - All 2017 - Major 2020
Markets Markets Markets Markets
• Higher concentration (~30% increase in average population
density) of a more desirable demographic with stronger
household income
• Improved portfolio quality; operating efficiencies, newer assets,
and less capex
* Vision represents the average population and average income within a 5km radius of RioCan properties after completion of the Trust’s
over $2.0B disposition targets. The 2017 data are based on RioCan’s portfolio as at December 31, 2017. Source: Environics Analytics.
12CONSISTENT GROWTH IN FUNDS FROM OPERATIONS
FROM CONTINUING OPERATIONS
3-Year CAGR for Continuing Operations FFO/Unit*: 9.9%
$2.50 Well-timed
exit from U.S.
retail market
$1.94
$2.00
$1.79
$1.65 $1.68
$1.50 Includes
$88.3M (or
$0.28/unit)
Target
$1.00 Settlement
$1.78
$1.62 $1.53
$1.34
$0.50
$0.00
2014 2015 2016 2017
Continuing Operations FFO/Unit Discontinued Operations FFO/Unit (US)
* Continuing and discontinued operations FFO per unit is calculated based on disclosed total continuing and discontinued operations FFO,
respectively, divided by the weighted average number of units (diluted) for the respective years.
13OPTIMIZING PORTFOLIO FOR CURRENT MARKET
ENVIRONMENT
Home Furnishings, Food, Fitness, Beauty and Value Retailers continue to be
bright spots in the retail landscape, with numerous brands adding additional
physical locations
• Small format service-oriented retail performing well, numerous tenants expanding
• Continued urban centre growth from national gym operators and expansion of
GROWING smaller, boutique-type operators. Quick Service Restaurants aggressively growing
• Value retailers such as Winners, Marshalls, Dollarama, etc. are rapidly expanding
• New specialty grocers are appearing and others, such as Nations and Farm Boy are
expanding
Shifting demand for large formats
• Some pressure from the larger format tenants upon renewal as they have options to
relocate and right-size their existing boxes
• Relocations open up opportunities for large format, value retailers who are
EVOLVING aggressively growing (e.g. TJX and Lowe’s)
Full price fashion continues to struggle
• Department stores reporting soft fashion sales
• Bankruptcies continue both north and south of the border
DECLINING • Small format fashion retailers not opening new locations
14CHANGING TRENDS IN HOUSEHOLD SPENDING
Source: GWL Realty – “What is driving change in the retail sector beyond online shopping” March 14, 2018
15EVOLVING & RESILIENT TENANT MIX
ADAPTING TO THE EVER CHANGING RETAIL ENVIRONMENT
% of
Change
Retailer Rent
since Key Brands
Category Q1
2007
2018
Grocery/
Pharmacy
Liquor/
27.8% 3.3%
Restaurant
Personal Services 20.3% 4.2%
Value Retailers 15.1% 2.5%
Specialty
Retailers
10.1% 0.0%
Furniture and
Home
10.0% 1.6%
Department
Stores/ Apparel
8.8% (7.5%)
Entertainment and
Hobby
3.3% (2.4%)
Movie Theatres 4.6% (1.7%)
16STAGGERED LEASE MATURITY WITH RENT GROWTH OPPORTUNITY
LEASE MATURITY AND EXPIRING RENT
$22.00 30.0%
Lease Maturity Expiring Rent
$20.36
$19.90
$20.00 25.0%
$18.74 $18.55
$17.91
$18.00 20.0%
$16.00 15.0%
12.6% 11.7% 11.9%
10.1%
$14.00 10.0%
5.6%
$12.00 5.0%
$10.00 0.0%
2018 remainder 2019 2020 2021 2022
• Favorable expiry profile that balances stability with opportunity for growth on renewal
• Average lease term for Top 30 tenants – 7.4 years
17CONSISTENTLY HIGH OCCUPANCY
COUPLED WITH STRONG RENT GROWTH
Target Departure
110.0% 19
100.0% 97.4% 97.6% 97.4% 96.9% 97.0% 96.6% 96.6%
95.6%
94.0%
18
$17.93
90.0% $17.75
$17.59
80.0% $17.11 17
$16.69
70.0%
$16.08 16
60.0% $15.70
$15.21
50.0% 15
$14.82
40.0%
14
30.0%
20.0% 13
2010 2011 2012 2013 2014 2015 2016 2017 Q1 2018
Committed Occupancy Average Net Rent
• Average net rent growth also reflects the improvements in the overall
quality of the portfolio as RioCan increased its major market focus over time
18STRONG RETENTION RATIO
OUTPERFORMING AND WIDENING THE GAP RELATIVE TO PEERS
REI Peers - Weighted Average
91.1%
88.1% 89.7%
85.7% 87.0%
85.8%
86.2%
84.8%
78.5%
75.9%
72.5%
CONSISTENTLY ABOVE 95%
61.7%
2013 2014 2015 2016 2017 Q1 2018
Source: company reports; Peers: CHP and SRU (no data for FCR, CRR, CRT)
Peer average calculation is weighted by square feet renewed
• RioCan has maintained a consistent strong retention rate and continues to broaden the gap
with our peers
• Strong track record of tenant retention averaging 87.9 % since 2013 relative to 79.6%* for
the peer average
* Average to March 31, 2018 19WELL DIVERSIFIED NATIONAL TENANT BASE
NO SINGLE TENANT OVER-EXPOSURE
As at March 31, 2018
Weighted Avg
Annualized Rental Number Of NLA (Sq. Ft. in
Top 10 Tenant Name Remaining Lease
Revenue Locations '000s)
Term (Yrs)
1 4.9 % 79 2,063 7.7
2 4.1 % 27 3,358 9.2
3 4.1 % 78 1,902 6.6
4 4.0 % 28 1,456 7.8
5 3.9 % 72 1,919 6.6
6 3.5 % 49 1,999 6.7
7 1.8 % 102 494 6.8
8 1.8 % 13 1,517 10.2
9 1.6 % 80 724 5.8
10 1.6 % 23 823 8.6
TOTAL 31.3% 551 16,255 7.5
Peer Average (iii) 67.6%* -- -- --
(i) Loblaws includes Shoppers Drug Mart, No Frills, Fortinos, Zehrs and Maxi.
(ii) Canadian Tire Corporation includes Canadian Tire/PartSource/Mark’s/Sport Mart/ Sport Chek/Sports Experts/National Sports/Atmosphere.
(iii) Source: company reports; Peers: FCR, CHP, CRT, CRR and SRU as at March 31, 2018
20LEADERSHIP TEAM
EXPERIENCE, INTEGRITY AND FORESIGHT
• Strong executive bench
with a wealth of
experience and proven
Ed Sonshine Rags Davloor, Qi Tang,
O.Ont., Q.C. President and COO SVP and CFO
track record
Founder and CEO 25 years in Real Estate, 20 years in Finance
Operations & Finance & Real Estate • Fully integrated REIT
with all disciplines in-
house including:
• Investments
• Leasing
• Asset Management
Jonathan Gitlin, Jeff Ross, John Ballantyne, • Development &
SVP Investments & SVP Leasing & Tenant SVP Asset Construction
Residential Coordination Management
18 years in Real Estate 24 years in Real Estate
• Property Management
30 years in Real Estate
• Finance, Legal and
Human Resources
• Trusted and respected,
with deep industry
knowledge and
Andrew Duncan Danny Kissoon Jennifer Suess relationships
SVP Developments SVP Operations SVP General Counsel
18 years in 32 years in Real & Corporate Secretary
Development, 12 years Estate 16 years in Law with a 21
in Real Estate focus on Real EstateSTRATEGIC PILLAR ONE: DRIVING ORGANIC GROWTH
OPTIMIZING AND FUTURE PROOFING OUR PORTFOLIO
CANADA’S MAJOR MARKET PORTFOLIO
DRIVING ORGANIC
GROWTH
• Evolving tenant mix and revenue growth
• Improving operating efficiency and cost
structure
• Redeveloping prime assets
• Optimize pads and add additional GLA
• Drive ancillary revenues
• Continuous portfolio pruning
22DRIVING ORGANIC GROWTH
CASE STUDY
Burlington Mall, Burlington Ontario – 2018 NOI will increase by 42%
• $65M redevelopment and renovation of this iconic centre in At
Capital Anticipated
Metric Acquisition
Canada’s Best Mid-Sized City (voted five years in a row) Invested Stabilized
(2013)
• Rebranded to Burlington Centre
• Renovated food court Value $206.5M $55M $287.5 M
• Strategically remerchandised (former Target location):
• Confirmed new tenancies include Indigo, Denninger’s
Foods of the World, Sportchek and Winners NOI $9.9M - $14.1M
23DRIVING ORGANIC GROWTH
CASE STUDY
RIOCAN YONGE EGLINTON CENTRE,
TORONTO
Intersection: Yonge St. and Eglinton Avenue East
Ownership: 100%
Total GLA: 1,056,285 sf
Property Concept: Mixed-use
Project Completion: 2016
Surfacing Value:
• Purchase Price (2007): $223 million
• Capital Invested $110 million
• Current Value: $574 million
• NOI at acquisition: $13 million
• Value Stabilized NOI: $26 million
73% increase in value over costs
• Strategically evolved tenant mix to meet consumer
needs
• Incremental revenue through leasing of the digital
screens on the building interior and exterior
24CAPITALIZING ON RE-LEASING OPPORTUNITIES
TARGET RE-LEASING & SEARS UPDATE
Target Re-leasing
• Re-leasing of former Target space 1.7 M sf
• Substantially completed Q4 2017
• Annual net rent revenue from releasing tenants: $14.0 M
• Annual rent revenue paid by Target of $10.6 million
• Annual net rent increase over Target rent: $3.4 million or 32.1%
• Significant capital recovered by way of settlement with Target of
$88.3M (at RioCan’s interest)
• Greater customer appeal and traffic
• Stronger, more diversified tenants
Sears Update
• Sears departure left 381,000 sf of space to re-lease at RioCan’s interest (vs. Target 1.7M sf)
• Completed leases, conditional leases or leases in advanced negotiations to replace 133% of the net
revenue and while only representing 85% of the former Sears GLA
• Leasing is much less complex than leasing former Target spaces
• Replacement tenants will be stronger and more diversified
• Properties will have broader customer appeal and replacement tenants will drive incremental traffic
25COMPLETED DEVELOPMENTS
CASE STUDY
SAGE HILL CROSSING, CALGARY AB
Location – Located in a growing residential
suburbs in Northwestern Calgary
Ownership Structure – 50% (JV with
KingSett)
Property Type – New format retail
• Substantially completed in Q4 2017
• 380,000 sf Walmart and Loblaws
anchored centre
• The first Loblaws City Market banner in
Calgary
• Excellent mix of strong national
tenants: London Drugs, Dollarama, • Demographics in 5km radius:
• Population: 95k
Scotiabank, McDonalds, Royal Bank of • Average household income: $145k
Canada
26ENVIRONMENTAL SOCIAL AND GOVERNANCE AT RIOCAN
EMBEDDING SUSTAINABILITY
• Well defined sustainability policy and sustainability governance
structure
• Participation in the Global Real Estate Sustainability Benchmark
("GRESB") Survey
• Inclusion of a new performance indicator for management
• RioCan was recently included in the MSCI Canada IMI
Women’s Leadership Select Index
• Employee survey was conducted to collect feedback on
sustainability drivers
• Establishment of a baseline for sustainability: energy, water
and Greenhouse Gas ("GHG") emissions
• Establishment of sustainability standards for our income
producing properties and development projects
• Pursuing Toronto Green Standard (TGS) Tier II for The
Well and Sunnybrook Plaza projects, and LEED Gold &
TGS Tier II for its Yonge Sheppard Centre project
• Extension of Enwave’s existing Deep Lake Water
Cooling network via a new 12 million-litre energy storage
facility at The Well (see image) to provide a low-carbon,
resilient cooling and heating option for the property and
Proposed
the surrounding communities
• Geothermal energy system for heating and cooling to be
incorporated at RioCan’s Gloucester project in Ottawa
Proposed
27STRATEGIC PILLAR TWO: UNLOCKING INTRINSIC VALUE
REALIZING THE POTENTIAL OF OUR CORE ASSETS
CANADA’S MAJOR MARKET PORTFOLIO
UNLOCKING INTRINSIC
VALUE
• Focusing on transit-oriented urban
intensification in major markets
• Mostly mixed-use with residential rental
and/or condo development
• Strategic alliances to mitigate risks and
create steady fee stream
• Robust and growing pipeline of well
located sites with substantial zoning
approved
• Strong development team with a wealth
of experience in mixed-use residential
development projects from planning,
design to completion
28SOURCES OF TREMENDOUS NAV GROWTH
ROBUST DEVELOPMENT PIPELINE
22.2M incremental
NLA1 or 54% of
existing NLA2
41.1M existing
IPP NLA
RioCan NLA RioCan NLA including incremental NLA
from Development*
• Strong, major market, urban focused development pipeline with high quality projects in prime
locations, predominantly transit oriented
• Risk mitigation via staggered development starts and the use of strategic alliances
• Maintain a disciplined approach to capital allocation and maintain leverage in the 38%-42% debt to
asset range , although leverage as of a quarter end may temporarily exceed the upper target due to
NCIB and disposition timing
1. Total development pipeline of 26.2M sf includes incremental NLA of 22.2M sf plus 4.0M sf that is currently income producing
2. Assumes all development projects per the MD&A for the period ended March 31, 2018 are completed and assumes no
additional development, acquisitions, or dispositions
29TREMENDOUS SOURCES OF CASH FLOW & NAV GROWTH
PIPELINE IS EXPECTED TO CONTINUE TO GROW
Total Pipeline by Zoning Status Total Pipeline by Project Type
(26.2M* sf)
Zoned, 12.2m sf,
Future est. 46.5%
Residential & Air
density, Rights
8.5m sf, Mixed-Use 17.2m sf,
32.4% Residential
25.2m sf,
96.1%
Commercial
7.0m sf,
Commercial
1.0m sf,
Application 3.9% Residential
submitted, Inventory
5.5m sf, 21.1% 1.0m sf
• Nearly 50% or 12.2M sf with zoning approved and nearly 100% is located in the
six major markets
• Particularly valuable in today’s more challenging regulatory environment
• Uncertainty in Ontario regarding transition to the newly implemented Local Planning
Appeal Tribunals given that its mandate is unclear
* Includes 22.2M sf of incremental NLA and 4.0M sf of NLA which is currently income producing. All data at RioCan’s interest.
30INTENSIFICATION STRATEGY
DEVELOPMENT PROCESS FOR EXISTING INCOME PRODUCING PROPERTY
Project Evaluation
and Market
Research
Leasing Strategy
Development Planning
Zoning, Design, Planning
Development & Construction
Income Producing Asset Until Development Commences
Year 1 Year 2 - 3 Year 4-5 Year 6-7
31TREMENDOUS SOURCES OF CASH FLOW & NAV GROWTH
SELECTED DEVELOPMENT COMPLETIONS OVER THE NEXT THREE YEARS
Bathurst College Centre Gloucester Phase The Well – Phased
I (Frontier) completion 2020-2023
King Portland
Centre (Kingly)
Yonge & Eglinton
Northeast Corner
(eCentral)
Brentwood Village
(Brio)
At RioCan’s Interest 2018 Q2-Q4 2019 2020
Est. Completed NLA (‘000s sf)1 546 784 372
Est. PUD Completions (millions)2 $367 $435 $190
Annualized stabilized NOI from active projects with detailed costs estimates to be completed between Q2 2018 and end of 2020, including Expansion
& Redevelopment projects, is expected to be in the $50 million to $55 million range at RioCan's interest. The annualized stabilized NOI of a project is
an estimate of stabilized NOI following completion of a project on a full year basis. NOI to be reported for the remainder of 2018 to 2020 will be
different from this range, due to the partial year effect in a given year as a result of project completion timing and the effect of property lease up period.
1. Estimated NLA completions are NLA transferred to IPP upon projects’ completion in each period, which are estimated as 90% of gross floor area (GFA)
2. Estimated PUD cost completions are fully loaded IFRS costs including land that are to be transferred to IPP upon projects’ completion in each period, net of land
and air rights sales for active projects with detailed cost estimates
32DEVELOPMENT TEAM
DEVELOPMENT TEAM
STRONG EXPERIENCED AND CAPABLE TEAM OF PROFESSIONALS
• Balanced, experienced talented team
• Established strong industry relations
• Identify opportunities in robust pipeline of urban, transit-oriented sites
• 33 team members – Planners, Engineers, Construction Managers, Analysts
• Three office locations – Toronto, Calgary, Montreal
Planning &
Zoning Design Analytics Residential Construction
Process
33DEVELOPMENT TEAM
DEVELOPMENT TEAM
CROSS FUNCTIONAL COORDINATION ACROSS VARIOUS DISCIPLINES
• Product Development
• Acquisitions/Dispositions/Joint Ventures
Investments & • Branding
Residential • Marketing
RioCan • De-leasing
• Initial planning and
concept Developments
Mixed-Use Leasing
initiatives
• Tenant relations
• Preliminary pro-forma
development
Development • Prospective
tenant
• Land entitlement Team engagement
3rd Party Property Asset • Commercial reporting, if Partner involved
Management, at the Management / • Day-to-day management of commercial
current state Operations component
• Liasing with Partner
34UNLOCKING THE VALUE OF TRANSIT-ORIENTED ASSETS
URBAN TORONTO HIGHLIGHTS: SELECTED HIGH DENSITY, LOCATIONS
Selected Urban Toronto '000s sf
RioCan Developments (100%)
Demographics, 5km radius 1 Yonge-Sheppard Centre 412
Dense population*:
• 481,000 people 2 555 College 108
Desirable demographic*: 3 King Portland Centre 420
• HH Income: $130,000+
• Post-secondary education: 65%+ 4 Yonge & Eglinton 707
5 The Well & Building 6 2,938
6 740 Dupont 180
7 Sunnybrook Plaza 316
8 Queensway 614
9 Dufferin Plaza 582
7
10 RioCan Leaside Centre 1,307
11 Lawrence Square 94
12 RioCan Hall 736
13 491 College 24
14 Bathurst College Centre 139
SELECTED URBAN
8,577
TORONTO
Legend
Under Development
Future Development Potential
TTC – Existing
TTC – Under Development
TTC – Station
Planned Rapid Transit Line
*Average demographics within a 5km radius of RioCan Urban Toronto development sites 35UNLOCKING THE VALUE OF TRANSIT-ORIENTED ASSETS
BRAMPTON/MISSISSUAGA HIGHLIGHTS: SELECTED HIGH DENSITY LOCATIONS
Selected Brampton/Mississauga RioCan
Future Development Potential '000s sf (100%)
1 Shoppers World Brampton 4,200
1 180
2 RioCan Sandalwood Square (Ph. I)
3 RioCan Grand Park 330
Selected Brampton/Mississauga
4,710
TOTAL
With three shopping centres and approximately 82 acres
of land on this LRT line, RioCan is uniquely positioned to
take advantage of future intensification opportunities
Demographics, 5km radius
Dense population*:
• 270,000 people+
2 Desirable demographic*:
• HH Income: $100,000+
• Post-secondary education: 50%+
3
*Average demographics within a 5km radius of selected RioCan Brampton/Mississauga development sites
36UNLOCKING THE VALUE OF TRANSIT-ORIENTED ASSETS
CALGARY HIGHLIGHTS: SELECTED HIGH DENSITY LOCATIONS
1
2
3
1
2
Selected Calgary RioCan Future '000s sf
Development Potential (100%)
1 Brentwood Village (Phase I) 145
2 5th & Third East Village 755
3 Southland Crossing 972
3
Selected Calgary TOTAL 1,872
Demographics, 5km radius
Dense population*:
• 170,000 people+
Desirable demographic*:
• HH Income: $137,000+
• Post-secondary education: ~60%
*Average demographics within a 5km radius of selected RioCan Calgary development sites 37UNLOCKING THE VALUE OF TRANSIT-ORIENTED ASSETS
OTTAWA HIGHLIGHTS: SELECTED HIGH DENSITY LOCATIONS
2
1
Selected Ottawa RioCan '000s sf
Development Potential (100%)
1 Gloucester/Frontier 667
2 Lincoln Fields 1,000
SELECTED OTTAWA POTENTIAL
1,667
TOTAL
Legend
Under Development
Future Development Potential
Demographics, 5km radius
Dense population*:
• 150,000 people+
Desirable demographic*:
• HH Income: ~ $100,000
• Post-secondary education: ~60%
*Average demographics within a 5km radius of selected RioCan Ottawa 38
development sites 38UNLOCKING INTRINSIC VALUE
RESIDENTIAL INTENSIFICATION
GLOUCESTER RESIDENTIAL
PHASE I, OTTAWA
Location: Located on a 7.1 acre portion of
RioCan's Gloucester Silver City Shopping Centre along
new Confederation LRT line at the Blair Station in
Ottawa
Ownership: 50% (JV with Killam Apartment REIT)
Property Type: Rental Residential, Phase I contains a
23 storey tower with 222 units (at 100%)
Zoning status: Zoned
Project Completion: 2019
Estimated PUD Costs (RioCan’s interest): $41.9M
Surfacing Value:
• Zoning approved for three additional residential
towers containing the potential for up to 840 units
Proposed
• Transitioned use from 77,000 sf of struggling
fashion retail to a 23 story desirable rental
residential building. • Demographics in a 5km radius:
• Population: 450k
• Retail mix at our adjacent shopping centre was • Daytime population: 457k
evolved and now includes a strong, diverse mix of • Average household income: $164k+
tenants including Cineplex theatre, Indigo, • Adjacent to CSIS headquarters: 2,000+ employees
Goodlife and numerous restaurants • Leading edge development that will maximize efficiency
via a geothermal energy system for heating and cooling
39UNLOCKING INTRINSIC VALUE
RESIDENTIAL INTENSIFICATION, GLOUCESTER OTTAWA (Including future phases)
Proposed
Zoning approved for four residential towers containing the potential for up to 840 units on a 7.1
acre portion of RioCan's Gloucester Silver City Shopping Centre
40UNLOCKING INTRINSIC VALUE
RESIDENTIAL INTENSIFICATION
740 DUPONT AVE.,
TORONTO, ON
Location – Toronto, Ontario
Property Type – Mixed-use retail and residential. 9-storey
project with 210 rental units and 31,000 square feet of retail
GLA. Firm lease with Farm Boy (23,000sf) to anchor the retail
portion of the site.
Ownership - 50% (JV with Woodbourne)
Zoning status: Zoned
Project Start / Anticipated Completion 2017 / 2021
Estimated PUD Costs (RioCan’s interest): $69.9M Proposed
Surfacing Value
• Site was acquired in 2010, formerly occupied by Grand • Demographics in 5km radius:
Touring automobile until November 2017 • Population: ~700k
• Well located along a busy thoroughfare in a densely • Average household income: ~ $120k
populated area of Toronto. A short walk to the Bloor-
Danforth subway line
41UNLOCKING INTRINSIC VALUE
RESIDENTIAL INTENSIFICATION
BRENTWOOD VILLAGE,
CALGARY, AB
Location – Located along the Northwest LRT line and
adjacent to the Crowchild Parkway in Northwestern Calgary in
close proximity to the University of Calgary
Property Type – Mixed-use retail residential, 12-storey, 165
rental units with approximately 10,000sf of retail GLA
Ownership - 50% (JV with Boardwalk REIT)
Zoning status: Zoned
Project Start / Anticipated Completion 2018 / 2020
Estimated PUD Costs (RioCan’s interest): $38.1M Proposed
Surfacing Value
• Demographics in 5km radius:
• Extracting additional value through the redevelopment of an
• Population: ~160k
underutilized retail portion of the site to include additional
• Average household income: $141k+
residential uses
• Well located with easy access to downtown Calgary,
• RioCan will retain a 100% interest in the remainder of the the University of Calgary, McMahon Stadium and
shopping centre Foothills Hospital
42UNLOCKING INTRINSIC VALUE
RESIDENTIAL INTENSIFICATION
YONGE & EGLINTON NORTHEAST
CORNER, TORONTO, ON
Location: At the heart of one of Toronto’s busiest and most
popular intersections. Unparalled access to the Yonge subway
and new Eglinton Crosstown LRT
Property Type: Mixed-use with retail, residential tower with
466 units and condominium tower with 623 units
Ownership: 50% (JV with Metropia and Bazis)
Leasing/Sales: All 623 condominium units have been pre-
sold. Retail is 88% leased (anchored by TD Bank)
Proposed Rental Residential Units: 466 Units
Zoning Status: Zoned
Anticipated Completion: 2018 & 2019
Estimated PUD Costs (RioCan’s interest): $118.1M
Proposed
Surfacing Value
• Agreement in place to acquire the partners’ 50% interest in
the 466 unit rental residential tower at cost plus $10M • Demographics in 5km radius:
• Population: 495k
• Agreement in place to acquire partner’s 50% interest in the • Daytime population: 489k
retail NLA at a 7% capitalization rate upon completion of • Average household income: $156k+
the project • Condo portion of the project is 100% pre-sold
43UNLOCKING INTRINSIC VALUE
RESIDENTIAL INTENSIFICATION
KING PORTLAND CENTRE,
TORONTO, ON
Location: Prime location in trendy Toronto’s downtown
west with direct access to transit
Property Type: Mixed-use with office, retail and
condominiums
Leasing/Sales: 132 condominium units fully sold out
ahead of price expectations. New office 256,000 sf (at
100%) 100% leased to Shopify and Indigo: retail all but
7,000 sf leased. Existing 55,000 sf of office space
adjacent to the building is 100% leased with substantial
rent upside upon project completion
Ownership: 50% (JV with Allied Properties REIT)
Incremental Commercial NLA: 163,000 sf at RioCan’s
Interest
Zoning Status: Zoned Proposed
Project Start / Anticipated Completion: 2016/ Late
2018 • Demographics in 5km radius:
• Daytime population: 823k
Estimated PUD Costs (RioCan’s interest): $83.2M
• Average household income: $115k+
• Office tower is targeted LEED platinum
44UNLOCKING INTRINSIC VALUE
RESIDENTIAL INTENSIFICATION
SUNNYBROOK PLAZA,
TORONTO, ON
Location: Located on new Eglinton LRT in an affluent
neighbourhood in midtown Toronto
Ownership: 50% (JV with Concert Properties)
Property Type: Mixed-use with one 16 storey and one 11
storey rental residential towers (approx. 427 units)
Commercial NLA: 22,000 sf at RioCan’s Interest
Project Start / Anticipated Completion: 2020/2023
Surfacing Value:
• Concert paid RioCan $26.3 million in June 2017 for a
50% interest in the development.
• RioCan acquired the centre in 2007 for $22.8 million Proposed
(100%)
• More than doubled the value in ten years, before • Demographics in 5km radius:
significant value creation upon this project’s • Population: 450k
completion. • Daytime population: 457k
• Average household income: $164k+
45UNLOCKING INTRINSIC VALUE
RESIDENTIAL INTENSIFICATION
YONGE SHEPPARD CENTRE,
TORONTO, ON
Location: Located at the thriving intersection Yonge &
Sheppard, with access to 2 subway lines and highway 401
Property Type: Mixed-use with incremental 156k sf retail,
as well as 258k sf of rental residential
Ownership: 50% (JV with KingSett Capital)
Zoning Status: Zoned
Phased Completion: Retail – 2019
Residential – 2020
Estimated PUD Costs (RioCan’s interest): $249.1M
Surfacing Value
• Renovation and expansion of retail space
• Intensification through the addition of a new 39 storey
residential tower containing 258,000 square feet of
residential rental space Proposed
• Retail anchored by Longo’s, LA Fitness, Shoppers Drug
Mart, Winners, and three major banks • Demographics in 5km radius:
• Population: 340k
Proposed
• Daytime population: 489k
• Average household income: $133k+
• 49,000 people pass through the site as part of their
daily commute
• $250M (at RioCan’s interest) renovation underway
46STRATEGIC PILLAR FOUR: STRATEGIC ACQUISITIONS
SELECTIVELY SEIZING OPPORTUNITIES
CANADA’S MAJOR MARKET PORTFOLIO
STRATEGIC
ACQUISITIONS
• Acquire only the best locations in the six
major markets
• Opportunities to acquire partners’ interests
in today’s tight market
• Highly selective acquisitions of
development sites, leveraging existing
properties
47STRATEGIC ACQUISITIONS
ACQUISITIONS OF PARTNERS’ INTERESTS HAVE BEEN A KEY SOURCE OF GROWTH POST SALE
OF US PORTFOLIO
Over $1.5 Billion of Acquisitions from Partners 2015 - 2017
Acquisitions from
other partners,
$0.2B
Acquisitions from CPPIB Acquisitions from Kimco
of $0.3B of $0.9B
Proposed
Acquired more than $1.5 Billion of assets predominantly in major markets that would
otherwise not be available in the market at a weighted average capitalization rate of 5.8%
• Acquisition from Kimco involved the purchase of a non-managing interest from a motivated seller seeking
to re-focus their portfolio in the United States.
48STRATEGIC ACQUISITIONS
MIXED-USE DEVELOPMENT
THE WELL TORONTO, ON
Proposed
49STRATEGIC ACQUISITIONS
MIXED-USE DEVELOPMENT
THE WELL,
TORONTO, ON
Location: 7.7 acre site situated at the gateway to
downtown Toronto, at Front and Spadina. Transit
oriented adjacent to the site of a proposed intercity
GO Train stop.
Ownership Structure:
Commercial: 50% (J.V. with Allied Properties REIT
Residential: 40% (J.V. Allied Properties REIT and
WNUF2*)
Residential Building 6: 50% (J.V. with Woodbourne )
Property Type: Mixed-use with ~500,000 sf retail, 1.1
M sf office and ~1,800 residential units (condo and
rental) at 100%
Zoning Status: Zoned Proposed
• Demographics 5KM radius:
Estimated project completion: • Population: 485k
Commercial - 2021, Residential Building 6 – 2022+ • Average household income: $114k+
• Innovative, amenity rich design including a European inspired
Estimated PUD Costs (RioCan’s interest): food hall
• Office is targeted LEED platinum
$675.9M**
• Teaming with Enwave for the first low-carbon resilient cooling
Building 6: $129.5M and heating option for the property and surrounding community
*WNUF2 holds a 20% interest in the residential portion until the sale of air rights to Tridel and Woodbourne upon completion of the
underground and podium structures .
** Project costs estimated as $600.3M net of sales proceeds from air rights sales
50STRATEGIC ACQUISITIONS
MIXED-USE DEVELOPMENT
THE WELL,
TORONTO ON
Surfacing Value
• RioCan and its partners acquired the
former Globe and Mail head office and
surrounding land for $170 million in 2012
and 2013
• Agreement in place to sell 1.1M sf of air
rights to Residential partners Tridel and
Woodbourne for approximately $180 million
upon completion of the underground and
podium structures
• Upon completion, an estimated 10,000
people will live and work at the property
• A comprehensive signage master plan
agreement has been approved by the city.
Interior and exterior digital signage will
generate significant ancillary revenue
Proposed
Proposed
51STRATEGIC ACQUISITIONS
MIXED-USE DEVELOPMENT
YORKVILLE,
TORONTO, ON
Location: Transit oriented and in the heart of prestigious
Yorkville, one of Toronto’s most high-end shopping and
residential areas.
Property Type: Mixed-use with potential for 0.5M sf of luxury
condominium and retail uses and up to up to 82 rental units
Ownership: 50/25/25 joint venture among RioCan, Metropia
and Capital Developments
Zoning Status: Preparing application for ZBA Zoning Bylaw
Amendment
Project Start/Anticipated Completion: TBD
Surfacing Value:
• As of February 2018 the partners have completed
acquisitions of adjacent properties substantially required
for the intensification project
• Demographics in 5 km radius:
• RioCan has agreed to purchase the partners’ interest in
• Population: 450k
the retail portion upon completion at a 6% cap rate and
• Daytime population: 457k
has the right of first opportunity to acquire the residential
• Average household income: $164k+
rental units
52STRATEGIC ACQUISITIONS
MIXED-USE DEVELOPMENT
BATHURST COLLEGE
CENTRE, TORONTO
Location: Situated in the western downtown
corridor in Toronto, at Bathurst Street and College
Avenue. Directly across street from Toronto General
Hospital
Ownership Structure: 100%
Property Type: 139,000 sf mixed-use office and
retail
Leasing status: 79% pre-leased
Anchor Tenants: University Health Network
(UHN), Fresh Co (Sobeys), Winners
Zoning status: Zoned
Estimated project completion: 2019
Estimated PUD Costs (RioCan’s interest):
$108.0M Proposed
Proposed
53STRATEGIC ACQUISITIONS
MIXED-USE DEVELOPMENT
5th & THIRD,
CALGARY, AB
Location: Well located in the East Village area of
downtown Calgary with direct access to the LRT
Ownership Structure: 100% retail, Residential air
rights sold to Embassy BOSA
Property Type: Mixed-use with 158,000 sf of retail
and 597,000 sf residential sold as air rights
Lead Tenants : Loblaw’s City Market, Shoppers Drug
Mart
Leasing status: 70% pre-leased
Zoning status: Zoned
Estimated project completion: 2021
Estimated PUD Costs (RioCan’s interest): $128.9M
Proposed
Proposed
54STRONG BALANCE SHEET
THE FINANCIAL RESOURCES TO FUEL GROWTH AND WEATHER MARKET TURMOIL
CANADA’S MAJOR MARKET PORTFOLIO
STRONG BALANCE
SHEET
Low
• Low leverage
Leverage
• Low cost of debt
• Laddered debt maturity and mostly fixed rate Multiple
Capital
• Access to multiple sources of capital Sources
• Large unencumbered assets pool generating Strong
58.4% of annualized NOI Growth
55MEASURED APPROACH TO DEVELOPMENT
As at
Max.
Mar. 31, Target
Permitted
2018
Properties Under Development (“PUD”) & Inventory
- $1.4 B N/A
PUD and Inventory as % of Gross Assets – per Line of Credit Covenant 15% 9.6% ~ 10%*
Investment in Greenfield Development and Inventory as % of Unitholder Equity
- per Declaration of Trust 15% 4.5% N/A
$300M - $400M $300M - $600MSELF FUNDING DEVELOPMENT
NOT DEPENDENT ON EQUITY OFFERINGS OR INCREASING LEVERAGE
Sources of Funding for Development:
• Disposition net proceeds
• Sales proceeds from condominium/townhouse developments or air rights
sales
• Strategic alliances toCONSISTENTLY ABOVE 95%
reduce capital requirements and mitigate risks
• Excess operating cash flows
• Sale of marketable securities
57PRUDENT MANAGEMENT OF DEVELOPMENT RISKS
• Laddered development
• Pre-leasing requirement for commercial development and sound market studies for
residential development
• Well-established internal control process for development approvals and
construction management
• Strategic alliances to reduce capital requirements and mitigate risks
• Dedicated and experienced development team but not over-staffed
CONSISTENTLY ABOVE 95%
o No overhead pressure to take on projects
o Residential property management currently outsourced until we reach scale
• Already own the assets, which are income producing
o We can better control development starts especially in today’s environment of rising construction costs
• Limited condominium development
58STRONG BALANCE SHEET
PRUDENT CAPITAL MANAGEMENT & FLEXIBLE CAPITAL STRUCTURE
Capital Structure Metrics
Target Q1 2018*
Leverage 38% - 42% 42.4%
Debt/EBITDA 3.0x 3.85x
Debt Service Coverage >2.25x 3.12x
Fixed Coverage CONSISTENTLY ABOVE 95%
>1.10x 1.18x
Unencumbered Assets N/A $8.1B
Unencumbered Assets to Unencumbered Debt >2.0x 2.20x
NOI % from Unencumbered Assets >50% 58.4%
Unsecured vs. Secured Debt 60%/40% 59%/41%
FFO Payout RatioINDUSTRY LEADING FINANCIAL PROFILE
Leverage Debt to EBITDA
47.6% 8.7x
42.4% 7.6x
Debt Service Coverage Interest Coverage
3.1x 3.9x
2.6x 3.1x
Source: company reports; Peers: Mar. 31, 2018 - FCR, CHP, CRR, CRT, SRU
60INDUSTRY LEADING FINANCIAL PROFILE
CAPITAL STRUCTURE PROFILE: CANADA VS. U.S.
Historical Background and Stronger Demand for Yield:
o Canadian REITs have a shorter history and higher demand for yield
o US Retail REITs have much higher institutional ownership (~86%*)
Less Risky Retail Operating Environment
o Less retail space per capita in Canada
o Stricter development regulations and municipal bylaws in Canada
o Retail in Canada has less competition, more financially stable anchor tenants
CONSISTENTLY ABOVE 95%
More Conservative Lending Practices
o Canada: recourse borrowing and higher proportion of secured financing
o U.S.: Non-recourse borrowing and more reliance on unsecured financing
o Canadian financial institutions have more conservative, on-balance sheet
lending practices
61CAPITAL MANAGEMENT STRATEGY
PRUDENT CAPITAL MANAGEMENT & FLEXIBLE CAPITAL STRUCTURE
• Maintain strong balance sheet with leverage in the 38% - 42% range
• Maximize unit repurchases under NCIB subject to our leverage target
• Self-fund development
• Balance unsecured and secured debt ratio in the ~60/40 split range
• Maintain financial flexibility by managing revolving line of credit
utilization
and balance between debenture issuance and line of credit utilization
CONSISTENTLY ABOVE 95%
• Balance debt maturities and limit variable rate debt to manage interest
rate risk
• Maintain and develop lender relationships and continue to utilize
diversified funding sources
• Utilize CMHC funding for mixed-use residential properties
62STAGGERED DEBT MATURITY AND LOW COST OF DEBT
LESS IMPACTED BY RISING INTEREST RATES
Scheduled principal amortization Mortgages payable
Floating Rate Mortgages and Lines of Credit Debentures payable
Weighted average interest rate
$ ‘000s
Weighted Avg. Interest Rate on Maturing Debt
2,400 6.0%
2,000 5.0%
1,600 3.62% 3.57% 4.0%
3.44% 3.48% 3.03%
3.23%
1,200 3.0%
934 873 1,542
911 1,232
800 604 2.0%
400 1.0%
0 0.0%
2018 2019 2020 2021 2022 Thereafter
63CONTACT INFORMATION
Edward Sonshine, O.Ont., Q.C.
Chief Executive Officer
Rags Davloor
President & Chief Operating Officer
Qi Tang
Senior Vice President & Chief Financial Officer
Contact Information
RioCan Yonge Eglinton Centre
2300 Yonge Street
P.O. Box 2386
Toronto, ON
M4P 1E4
Proposed
Email: ir@riocan.com
(T) 1-800-465-2733 or (416) 866-3033
Proposed
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