67
Management Presentation December 8, 2008
Management Presentation
December 8, 2008,
Forward Looking Statementsg
Certain information included in this presentation contains forward-looking statements within the meaning ofCertain information included in this presentation contains forward-looking statements within the meaning of applicable securities laws including, among others, statements concerning our 2008 objectives, our strategies to achieve those objectives, as well as statements with respect to management's beliefs, plans, estimates, and intentions, and similar statements concerning anticipated future events, results, circumstances, performance or expectations that are not historical facts. Certain material factors, estimates or assumptions were applied in drawing a conclusion or making a forecast or projection as reflected in these statements and actual results could g g p jdiffer materially from such conclusions, forecasts or projections.
Additional information on the material risks that could cause our actual results to differ materially from the conclusions, forecast or projections in these statements and the material factors, estimates or assumptions that were applied in drawing a conclusion or making a forecast or projection as reflected in the forward-looking i f ti b f d i l i f ti f d l t th t il bl b it d tinformation can be found in our annual information form and annual report that are available on our website and at www.sedar.com.
Except as required by applicable law, RioCan undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.
2
Market Overview
Only six metropolitan markets within Canada have inOnly six metropolitan markets within Canada have in excess of
one million people
4
Canada’s Six High Growth Marketsg
1996 2006Market 1996 2006
1996-2006% change change
Toronto, Ontario 4,263,759 5,113,149 19.92% 849,390
Montréal, Quebec 3,326,447 3,635,571 9.29% 309,124
Vancouver, British Columbia 1,831,665 2,116,581 15.56% 284,916
Ottawa-Gatineau, Ontario/Quebec 998,718 1,130,761 13.22% 132,043
Calgary, Alberta 821,628 1,079,310 31.36% 257,682
Edmonton, Alberta 862,597 1,034,945 19.98% 172,348
Total 12,104,814 14,110,317 16.57% 2,005,503
Source - Statistics Canada
5
Stable Growth in GLA Across the Top 6 Markets*
Increase in total GLA equal to population growth
Canadian GLA per Capita: 16.35
U.S. GLA per Capita: 19.5
Space fundamentals are strong with retail inventory per capita at lower levels relative to the US
*Edmonton
*CalgaryVancouver *
* Montreal
*Source CBRE - CB Richard Ellis
* Toronto* Ottawa
Montreal
6
Sales Productivity*
Canada & US Enclosed Mall Sales Productivity Per SF(2000 to 2007)
$600
Sales Productivity (PSF)
Canada consistently outperforms the US in mall sales productivity
$300
$400
$500
$600
$542
$616$643
$480
$568
$457$421
$300
$400
$500
$600
$700
$-
$100
$200
2000 2001 2002 2003 2004 2005 2006 2007$-
$100
$200
$300
Canada B.C. Alberta Praries Ontario Quebec Atlantic
• Aug-2007 – Aug-2008 figures: AB posting negative growth and SK & MF coming into their own
Canada US
Change in Canadian Retail Sales(Aug 2008 YoY)
11.67%12.00%
14.00%
growth and SK & MF coming into their own.
• Forecast – weaker central and stronger east coast as Hibernia and other oil strengthens.
• In Canada, there is considerable stability in our largest tenants 25% of the retail market is under
0.63%
2.81% 2.99%4.09%
4.93%5.49% 5.61% 5.61% 6.08% 6.44%
7.38%
8.87%
0 00%
2.00%
4.00%
6.00%
8.00%
10.00%
largest tenants – 25% of the retail market is under the control of three groups (Weston Group, Wal-Mart, Sobeys).
-0.42%-2.00%
0.00%
AB
BC
PE
I
NW
T
CA
N
ON
YK
NS
QU
NB
NU
N
MB
NFL
D
SK
*Source CBRE - CB Richard Ellis
7
Market Share of Retailers*
Market Share of Grocery Stores in Canada (2007)
Market Share of General Merchandise Stores in Canada
Wal-Mart rapidly became dominant in department store sales
( )
30.00%
35.00%
40.00%
45.00%
are
20%
25%
30%
Shar
e
0 00%
5.00%
10.00%
15.00%
20.00%
25.00%
Mar
ket S
h
0%
5%
10%
15%
Mar
ket S
1995
Eatons
LATEST AVAILABLE
0.00%Loblaw Sobeys Metro Safeway Other Wal-Mart
0%Wal-Mart Costco Canadian Tire Sears
Department Store Sales Market Share
Eatons 13%
Sears 21%
Wal-Mart
The Bay 18%
Wal-Mart Sears
The Bay20%
Zellers27%
Wal Mart 21%
a a t 50%
Zellers20%
Sea s 20%
*Source CBRE - CB Richard Ellis
8
Retail Space Fundamentals – Power Retail*
Power Centre Distribution in Canada (2007)
Growth of Power Centres in Canada (1999 to 2007)
160 000
51 4 MSF
135 MSF410 PC
80
100
120
140
160
mill
ions
)
80,714
116,418
135,000129,540
99,27690,296
70 24180,000
100,000
120,000
140,000
160,000
(000
s)
8 MSF20 PC
10.9 MSF29 PC
15.2 MSF58 PC
24 MSF66 PC
25 MSF61 PC
51.4 MSF176 PC
0
20
40
60
Canada Ontario Alberta Quebec BC Prarie Atlantic
SF
(m70,241
46,388
28,095
-
20,000
40,000
60,000
1999 2000 2001 2002 2003 2004 2005 2006 2007
SF
1999 2000 2001 2002 2003 2004 2005 2006 2007
Growth in Size of the Big Boxes
Change1000
1200
1400
xes
1999 2007 Change SF Change %
Freestanding 45,067 57,284 12,217 27%
Located in a Mall 30,734 29,589 -1,145 -4%
C %
Big Box Location Type
200
400
600
800
1000
Num
ber
of B
ig B
ox
Located in a Power Centre 33,237 33,029 -208 -1%
All Big Boxes 33,789 34,642 853 3%
01999 2000 2001 2002 2003 2004 2005 2006 2007
Total # of Big Boxes Freestanding In Malls In Power Nodes
*Source CBRE - CB Richard Ellis
9
Retailers Store Growth by Type of Unit*
Retailers are focused on Power Centre Growth
Total Mall Free Standing
Power Centre Total Mall Free
StandingPower Centre # % change Mall %
change
Free Standing % change
Power Centre % change
A&P 93 59 31 3 70 46 22 2 -23 -25% -22% -29% -33%American Eagle Outfitters 6 6 0 0 66 66 0 0 60 1000% 1000% 0% 0%
Chain
2001 Stores 2006 Stores Store Change 2001 - 2006
Black's Photography 181 164 11 6 135 117 11 7 -46 -25% -29% 0% 17%Business Depot / Staples 183 42 52 89 252 65 67 120 69 38% 55% 29% 35%Canadian Tire 451 82 292 77 468 76 279 113 17 4% -7% -4% 47%Costco 60 0 32 28 68 1 35 32 8 13% + 1 9% 14%Food Basics 80 64 16 0 116 83 27 6 36 45% 30% 69% + 6Future Shop 91 22 20 49 122 21 24 77 31 34% -5% 20% 57%Grand & Toy 98 63 35 0 60 48 10 2 -38 -39% -24% -71% + 2G a d & oy 98 63 35 0 60 8 0 38 39% % %Home Outfitters 14 5 1 8 56 12 3 41 42 300% 140% 200% 413%HomeSense 9 1 0 8 58 17 3 38 49 544% 1600% + 3 375%La Senza 156 155 1 0 185 164 5 16 29 19% 6% 400% + 16Loblaws 84 38 32 14 91 28 47 16 7 8% -26% 47% 14%No Frills 105 57 45 3 133 64 65 4 28 27% 12% 44% 33%Office Depot 37 8 15 14 31 5 13 13 -6 -16% -38% -13% -7%Old Navy 16 11 0 5 60 31 6 23 44 275% 182% + 6 360%Old Navy 16 11 0 5 60 31 6 23 44 275% 182% + 6 360%Price Chopper 64 44 20 0 118 67 49 2 54 84% 52% 145% + 2Shoppers Drug Mart / Pharmaprix 819 466 338 15 935 465 437 33 116 14% 0% 29% 120%Sport Chek 91 74 4 13 116 82 6 28 25 27% 11% 50% 115%Winners 124 65 9 50 186 91 14 81 62 50% 40% 56% 62%Zehrs 58 36 16 6 51 31 14 6 -7 -12% -14% -13% 0%Zellers 327 291 13 23 292 257 10 25 -35 -11% -12% -23% 9%Total 3,147 1,753 983 411 3,669 1,837 1,147 685 522 17% 5% 17% 67%
*Source CBRE - CB Richard Ellis
10
About RioCan
About RioCan
Largest REIT in Canada
Enterprise value of over $
Ownership interests in
238in Canada $6.2 billion 238 properties
14 properties under
58.5 million sq ft under Over 5,500
t i
Revenue of $719.9 illi iunder
developmentsq ft under
management tenancies million in 2007
3.1 million sq ft of
Over 19% compounded
National and anchor tenants sq ft of
development
pannual return
since IPOrepresent
83.6%
Experienced and deep Managing
billions of $3.3 million
sq ft of $3.2 billion property
management team
billions of $ for JV
partners
sq ft of development
pipeline
of debt under management
Over $1.8 billion
di t ib t d tLeader inDistribution it distributed to
unitholders since the
IPO
Leader in corporate
governance
per unit increase
every year
12
About RioCan
Largest REIT in Canada with 238 properties, including 14 under development, totalling 58.5 million sq. ft. $ 1and over $6.2 B of enterprise value1
• Able to prosperously grow in all cycles of the market using prudent strategies, core competencies, right partners and staying ahead of trends in commercial real estate
Focused on retail real estate with experience in office and mixed use real estateM t t f Ri C h i i ll th t f i l l t t• Management team of RioCan has experience in all the sectors of commercial real estate
Full service real estate entity with property management, asset management, leasing, acquisitions, development and financing capabilities with 640 employees• Able to undertake any task within the real estate business
Conservative use of leverage• Investment grade entity rated “BBB” and “BBB (high)” by S&P and DBRS, respectively
Unmatched breadth of tenant relationships in Canada• Over 5,500 tenants with no tenant representing over 5.4% of annualized rental revenueOver 5,500 tenants with no tenant representing over 5.4% of annualized rental revenue
Experienced asset manager with strong partners• Completed a number of successful JVs and enjoyed a continued demand for its asset management
expertise from existing and new partners
13
1 Calculated using unit price of $13.43 at December 5, 2008
Portfolio Overview
Portfolio Overview
High proportion of national tenantsApproximately 83% of our annualized rental revenue is derived from national and anchor tenants
The fundamentals of RioCan’s portfolio remain strong
pp yLargest exposure to any single tenant comprises only 5.4% of our annualized rental revenue
High occupancy levels, which have been stable at 97.0%
Strong leasing activityD i h hi d Ri C i d i l 93 9% (84% d ) f i i lDuring the third quarter, RioCan retained approximately 93.9% (84% year to-date) of our expiring leases at an average net rent increase of 12% (11.7% year to-date)Approximately 2.3 million square feet have been renewed during 2008 to-date
Focus on the six Canadian high growth marketsApproximately two-thirds of our revenue is from properties within the six high growth major Canadian markets
Toronto, Ontario34%
Montreal, Quebec10%
Toronto, Ontario28%
Montreal, Quebec11%
Approximately two-thirds of our revenue is from properties within the six high growth major Canadian markets
10%
Ottawa, Ontario9%
Calgary, Alberta6%
Vancouver British
All other markets34%
Ottawa, Ontario8%
Calgary, Alberta6%
Vancouver, British Columbia
3%
All other markets42%
Vancouver, British Columbia
4%
Edmonton, Alberta3%
3%Edmonton, Alberta
2%Net Leasable AreaAs at September 30, 2008
Rental revenue for the nine months ended September 30,
2008
15
15
Unmatched Breadth of Tenant Relationshipsp
% ofWeighted Average
5,600 tenancies capturing the top Canadian and American retailers
No tenant represents over 5.4% of annualized rental revenue
Tenant Name
% of Annualized
Rental Revenue
Total Area Occupied
# of Locations
Average Remaining Lease Term
(in years)1 Metro/A&P/Super C/Loeb/Food Basics 5.4% 1,983,625 52 9.42 Famous Players/Cineplex/Galaxy Cinemas 5.4% 1,265,413 28 14.43 Canadian Tire/Mark's Work Wearhouse/PartSource 4.0% 1,331,904 57 12.24 Zellers/The Bay/Home Outfitters 3 6% 2 556 003 37 9 34 Zellers/The Bay/Home Outfitters 3.6% 2,556,003 37 9.35 Loblaws/No Frills/Fortinos/Zehrs/Maxi 3.4% 1,172,280 27 6.66 Wal-Mart 3.3% 1,803,547 19 9.67 Winners/HomeSense 3.3% 1,197,953 53 5.88 Staples/Business Depot 2.5% 902,188 44 8.69 Reitmans/Penningtons/Smart Set/Addition-Elle/Thyme Maternity 2.0% 495,852 121 5.1
10 Harvey's/Swiss Chalet/Kelsey's/Montana's/Milestone's 1.7% 322,905 77 9.911 Shoppers Drug Mart 1 7% 381 921 36 11 111 Shoppers Drug Mart 1.7% 381,921 36 11.112 Future Shop/Best Buy 1.6% 429,755 20 7.713 Chapters/Indigo 1.4% 317,744 24 5.314 Sport Mart/Sport Chek/Sports Experts/National Sports/Coast Mountain Sports 1.3% 365,469 41 6.115 Sears 1.1% 547,562 15 4.116 Bluenotes/Stitches/Suzy Shier/Urban Planet 1.0% 230,254 57 7.617 Petsmart 1.0% 264,390 20 6.218 Safeway 1.0% 377,637 12 7.9y ,19 Dollarama 1.0% 350,928 43 7.120 Premier Fitness 0.8% 276,235 9 9.521 Rona/Revy/Reno 0.8% 325,833 5 14.822 TD Canada Trust 0.6% 108,063 29 8.823 LCBO 0.6% 129,638 18 6.124 Michaels 0.6% 187,836 14 6.625 London Drugs 0.6% 204,775 10 8.8
Total 49.7% 17,529,710
Total NLA (at September 30, 2008) 32,763,689
% of Total NLA 53.5%
16
Top Ten Tenants
17
Geographic Diversification as a % of Annualized Rental Revenue As at September 30, 2008As at September 30, 2008
Ontario 63.6% Quebec 16.5% Alberta 10.1%British Columbia 5.8% New Brunswick 2.1% Saskatchewan 0.5%Manitoba 0.5% PEI 0.4% Newfoundland 0.4%Nova Scotia 0.1%
18
Annualized Rental Revenue by Property TypeAs at September 30, 2008As at September 30, 2008
New Format Retail 52.4% Grocery Anchored Centre 20.3%
Enclosed Shopping Centre 13.8% Urban Retail 5.8%
Non-Grocery Anchored Centre 4.1% Office 3.6%
19
Lease Rollover Profile (As at September 30, 2008)( p , )
11.4%
3 000 0003,500,0004,000,000
7.5%
9.7%8.9%
1 500 0002,000,0002,500,0003,000,000
0500,000
1,000,0001,500,000
530,127
2,453,5743,182,961 3,727,404
2,927,380
1.6%
0
2008(i) 2009 2010 2011 2012
(1) T t l i i f th th th d d D b 31 2008(1) Tenant lease expiries for the three months ended December 31, 2008
20
Stable Occupancy
100%
Historical Occupancy Rates 1996 to Q3 2008
p y
94%
96%
98%96.0%
95.0% 95.0% 95.4%96.1%
95.6% 95.8% 96.3% 96.3% 97.1% 97.7%97.0% 97.0%
86%
88%
90%
92%
80%
82%
84%
86%
21
Strong Development Pipeline
Greenfield developments through in-house capabilities and with partners, such as Trinity and Canada Pension Plan Investment Board (CPPIB)
g p p
At September 30, 2008Total greenfield developments comprise 8.8 million square feet, excluding shadow anchorsRioCan’s owned interest consists of 3.5 million square feetTotal estimated project cost is $1.6 billionp j $Total acquisition and development expenditures incurred to-date are $442 millionTotal estimated remaining construction expenditures to complete:
RioCan - $489.5 millionPartners’ - $653.9 million
G % % f % %Generate unlevered yield between 7% to 11%, at a weighted average of 8.5% to 9.5%
Strategic sales to CPPIBIn June 2008, RioCan and Trinity sold a 50% non-managing interest in the Jacksonport development in Calgary and St..Clair Avenue and Weston Road in Toronto development to CPPIB g y pIn October 2008, CPPIB purchased at 37.5% non-managing ownership interest in two of three phases in East Hills in CalgarySignificantly reduced development exposure on the three projects of $1.0 billionThe sales to CPPIB enabled RioCan to recoup 100% of its equity in these projectsThe sales further strengthened our existing relationship to Canada’s largest pension fundThe sales further strengthened our existing relationship to Canada s largest pension fund
22
22
Capital Structure
Conservative Debt ProfileAs at September 30, 2008As at September 30, 2008
Debt to Gross Book Value of 54.6% at September 30, 2008 (55.4% at December 5, 2008)
Total operating lines - $290 million ($240 million available)
15% of properties unencumbered by debt on a net leasable area basis
At September 30, 2008, interest coverage was in excess of 2.6x, well above the current 1.65x maintenance test
In October 2008, repurchased $25.7 million of Series D debentures maturing in September 2009 and $5 million Series J debentures maturing in March 2010
Repaid $110,000,000 Series E debentures at their maturity in January 2008
At September 30, 2008, S&P provided RioCan with an entity credit rating of BBB and a credit rating of BBB- relating to its senior unsecured debentures payable; DBRS provided a credit rating of BBB (high) relating to RioCan’s debentures
24
Capital Structure p
Book Value = $5 0 billionBook Value $5.0 billionEnterprise Value = $6.2 billion*
13.7%
38.0%
47.1%
51.7%
48.3%
35.7%
16.9%
Mortgages
Debentures
Equity
*Based on a share price of $13.43 on December 5, 2008
25
Liquidity and Debt Maturity Profile
In millions
$700
$800
$900
$1,000
$300
$400
$500
$600
$840
$-
$100
$200
$300
2008
$0 $84 $95 $200 $220
$150
$37
$301 $320 $126
$273
$315
$1272008 2009 2010 2011 20122013
20142015+
$0 $100
$127
Mortgagesg g
Unsecured Debentures
26
262009 Business Plan, Board of Trustees, December 3, 2008
Consistent Moderate Leverage
60.0% 56.6% 56.3% 54 6%
45.0%
50.0%
55.0%
47.3% 48.2%51.9%
53.1% 53.8% 53.9% 54.6%
30 0%
35.0%
40.0%
20.0%
25.0%
30.0%
000
001
002
003
004
005
006
007
-08
20 20 20 20 20 20 20 20
30-S
ep-
Declaration of Trust limits max. indebtedness to <60% of Aggregate Assets on a book value basis
27
Leverage at Historic Cost and MarketAs at December 5, 2008
60 0%
As at December 5, 2008
50.0%
55.0%
60.0% 55.4%52.4%
40.0%
45.0%
30.0%
35.0%
20.0%
25.0%
Historic Cost Market*
Notes:* Market Value per unit of $13.43 based on the closing price of RioCan’s units on the TSX on Friday December 5, 2008
28
Fiscal Conservatism
From 1999 to present, RioCan has decreased its payout ratio
Note: 2005 FFO adjusted to exclude impact of costs of early extinguishment of debentures
29
Q3 2008 Highlights
Q3 2008 Highlights
Operating Highlights
(unaudited 000s, except per share amounts)
Q3 2008 Q3 2007 Change YTD 2008 YTD 2007 Change
Net Operating Income $ 116,430 $ 107,549 8% $ 335,027 $ 319,040 5%
Fees and Other Income 6,981 3,784 84% 14,316 $ 10,456 37%
Gains on Properties Held for Resale
1,472 4,389 (66%) 20,430 $ 21,088 (3%)
General and Administrative 6,257 5,352 17% 22,249 $ 18,561 20%General and Administrative Expense
6,257 5,352 17% 22,249 $ 18,561 20%
Funds from Operations (FFO) 81,308 76,029 7% 235,373 $ 227,120 4%
FFO per unit $ 0.37 $ 0.36 $ 1.09 $ 1.09
31
Q3 2008 Highlights (continued)
NOI on Same Property Basis
Increase Increase2008 2007 (decrease) 2008 2007 (decrease)
Same properties 103 056$ 100 097$ 3 0% 298 171$ 291 175$ 2 4%
Three months ended September 30,
Nine months ended September 30,
(thousands of dollars)
Same properties 103,056$ 100,097$ 3.0% 298,171$ 291,175$ 2.4%
2008 and 2007 acquisitions 4,492 115 3,806.1% 12,018 1,916 527.2%
2008 and 2007 dispositions 199 532 (62.6%) 594 1,966 (69.8%)
Greenfield development 5,727 2,492 129.8% 15,226 6,634 129.5%
NOI before adjustments 113,474 103,236 9.9% 326,009 301,691 8.1%
Lease cancellation fees 367 260 41.2% 1,276 9,151 (86.1%)
Straight-lining of rents 1,696 3,004 (43.5%) 5,137 6,221 (17.4%)
893 1 049 (14 9%) 2 605 1 977 31 8%Differential between contractual and market rents
93 9% renewal/retention in Q3 (84 1% year-to date)
893 1,049 (14.9%) 2,605 1,977 31.8%
NOI 116,430$ 107,549$ 8.3% 335,027$ 319,040$ 5.0%
market rents
93.9% renewal/retention in Q3 (84.1% year-to date)12% increase in rents on renewals in Q3 and year-to-date
32
Q3 2008 Highlights (continued)g g ( )
Stable Occupancy Rates Over Past Eight Quarters
33
Future Growth Drivers
Organic growth
Land use intensification
G fi ld d l tGreenfield development
Acquisitions
34
Organic Growth – Lease ExpiriesAs at September 30, 2008p ,
Total NLA 2008 (1) 2009 2010 2011 2012Lease expiries (NLA)
Total NLA 2008 2009 2010 2011 2012Total square feet 32,763,689 530,127 2,453,574 3,182,961 3,727,404 2,927,380
1.6% 7.5% 9.7% 11.4% 8.9%Average net rent per square foot (psf) $14.32 $16.04 $15.47 $14.16 $14.32 $15.98Square feet expiring/portfolio NLA
Lease expiries (NLA)Total NLA 2008 (1) 2009 2010 2011
New Format Retail 14,839,988 118,536 754,768 999,620 1,407,6790.8% 5.1% 6.7% 9.5%
Grocery Anchored Centre 6,878,721 106,777 830,632 912,076 987,6121.6% 12.1% 13.3% 14.4%
Lease expiries (NLA)
Enclosed Shopping Centre 6,410,150 148,662 491,618 802,662 777,7462.3% 7.7% 12.5% 12.1%
Non-Grocery Anchored Centre 1,739,930 18,050 108,346 124,165 141,0791.0% 6.2% 7.1% 8.1%
Urban Retail 1,311,509 103,913 86,716 71,630 77,0617 9% 6 6% 5 5% 5 9%7.9% 6.6% 5.5% 5.9%
Office 1,583,391 34,189 181,494 272,808 336,2272.2% 11.5% 17.2% 21.2%
(1) T t l i i f th th th d d D b 31 2008(1) Tenant lease expiries for the three months ended December 31, 2008
35
Organic Growth – Lease ExpiriesAs at September 30, 2008
Lease expiries (in thousands, except psf and percentage amounts) Portfolio NLA 2008 (i) 2009 2010 2011 2012Square feet: New Format Retail 14,840 118 755 999 1,408 1,086 Grocery Anchored Centre 6,879 107 831 912 987 1,057 Enclosed Shopping Centre 6,410 149 491 803 778 458
Lease expiries
Non-Grocery Anchored Centre 1,740 18 108 124 141 127 Urban Retail 1,312 104 87 72 77 136 Office 1,583 34 182 273 336 63 Total 32,764 530 2,454 3,183 3,727 2,927 Square feet expiring/portfolio NLA 1.6% 7.5% 9.7% 11.4% 8.9%
Average rent psf (ii): New Format Retail 15.86$ 18.97$ 17.40$ 18.43$ 16.64$ 17.42$ Grocery Anchored Centre 13.77 16.15 14.50 13.68 14.22 13.82 Enclosed Shopping Centre 11.07 13.22 14.76 9.88 10.60 14.00
Non-Grocery Anchored Centre 12 42 21 67 12 66 14 46 13 30 13 02 Non Grocery Anchored Centre 12.42 21.67 12.66 14.46 13.30 13.02 Urban Retail 20.10 15.32 26.43 28.70 21.60 32.00 Office 10.65 13.51 10.28 8.70 12.23 13.05 Total weighted average psf 14.32$ 16.04$ 15.47$ 14.16$ 14.32$ 15.98$
(i) Tenant lease expiries for the three months ending December 31, 2008.(ii) Net rent is primarily contractual basic rent pursuant to tenant leases.
36
Organic Growth – Leasing ActivityFor the nine months ended September 30, 2008
New Grocery Enclosed Non-groceryformat anchored shopping anchored Urban
(in thousands, except psf amounts) Total retail centre centre centre retail OfficeRenewals at market rental rates: Square feet expired 871 148 288 240 97 23 75
Average net rent psf 20 14$ 29 13$ 18 51$ 18 67$ 15 61$ 30 84$ 15 91$ Average net rent psf 20.14$ 29.13$ 18.51$ 18.67$ 15.61$ 30.84$ 15.91$ Increase in average net rent psf 2.92$ 6.47$ 1.96$ 2.25$ 1.16$ 6.61$ 2.88$ Fixed rental rate options in favour of tenants: Square feet expired 1,411 468 180 595 54 114 - Average net rent psf 10.78$ 16.80$ 10.33$ 6.53$ 13.94$ 7.50$ -$ Increase in average net rent psf 0.63$ 1.27$ 0.54$ 0.23$ 0.98$ -$ -$ Total: Square feet expired 2,282 616 468 835 151 137 75 Average net rent psf 14.36$ 19.77$ 15.37$ 10.02$ 15.01$ 11.41$ 15.91$ Increase in average net rent psf 1.50$ 2.53$ 1.41$ 0.81$ 1.10$ 1.11$ 2.88$
37
Yonge Eglinton Centre, Toronto, Ontario
One of RioCan’s largest acquisitions at $223 million (acquired in January 2007)
• 750,126 sq. ft. of office area and 264,479 sq. ft. of retail area
RioCan has launched a thorough revitalization and expansion plan that will capitalize on the area’s residential intensification
• improvements to parking increased revenues by $500,000
• 46,000 sq. ft. of new retail, and a connection to the office towers and ingress/egress to the food court and subway
• a combined 12-storey, 210,000 sq. ft. expansion of the office towers
RioCan’s leasing and capital improvement efforts have resulted in significant increases in NOI and occupancy
• NOI of $13.3 million at purchase, forecast to increase to $18.6 million by year-end 2008 (ROI increasing from 5.85% to 7.71%)
• combined office and retail occupancy rate has increased from 87.8% at purchase, to forecasted 97.8% by year-end of 2008
38
Creating New Cash Flow Sources RioCan Yonge Eglinton Centre, Toronto, ONg g , ,
39
Creating New Cash Flow Sources RioCan Yonge Eglinton Centre, Toronto, ON – Proposed Retail AdditionRioCan Yonge Eglinton Centre, Toronto, ON Proposed Retail Addition
40
Creating New Cash Flow Sources RioCan Yonge Eglinton Centre, Toronto, ON – Proposed Retail AdditionRioCan Yonge Eglinton Centre, Toronto, ON Proposed Retail Addition
41
Creating New Cash Flow Sources RioCan Yonge Eglinton Centre, Toronto, ON – Proposed Vertical Additiong g p
Potential to add 210,000 square feet of office space
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Land Use Intensification
Capitalize on trend in Canada’s six high growth markets towards “densifying” existing urban locations, driven by:
• Prohibitive costs of expanding infrastructure beyond urban boundaries
• Environmental concerns
• Maximizing use of mass transit
Generate high yields as land is already owned
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1717 Avenue Road, Toronto – Urban Intensification,
Rezoning urban properties to accommodate mixed use projects became RioCan REIT’s focus in the last several years– currently almost 100 acres of urban property in either active rezoning process or in the exploration of rezoning
potential stage
Avenue Road, Toronto
Assembled a city block over four year period located in one of the busiest nodes in Toronto on Avenue Road, between Fairlawn Avenue and St Germain AvenueFairlawn Avenue and St. Germain Avenue
The block is made up of four, one story, properties, the largest being 25,000 sq. ft. strip centre anchored by an LCBO and Blockbuster
Ideal property for redevelopment into a mixed-use facility, in
In 2005, commenced an application to rezone the property to permit five stories of condominium above ground floor retail
R id ti l i i ht ld t T ib t C iti h ill
keeping with the trend of urban intensification
Residential air rights sold to Tribute Communities, who will develop this mixed use property
RioCan REIT retained ownership of the retail portion and shares in a portion of the profits created on the sale of the condominiums
The residential component is 79% sold
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Land Use Intensification 1717 Avenue Road Toronto ON1717 Avenue Road, Toronto, ON
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Queen & Portland, Toronto – Urban Intensification,
Queen & Portland TorontoQueen & Portland, Toronto
One acre parking lot acquired in January 2006
Southwest corner of Queen and Portland Streets, occupying the entire length of the block
Ideal property for redevelopment into a mixed use facility inIdeal property for redevelopment into a mixed-use facility, in keeping with the trend of urban intensification and the demand from “big-box retailers” for stores in urban locations
Obtained the necessary zoning amendments to permit a mixed-use development of 91,000 sq ft retail space over three levels and a five-storey residential condominium, above the retail
Queen St. W
P
Residential air rights sold to Tribute Communities, who will develop this mixed use property
RioCan REIT retained ownership of the retail portion and shares in a portion of the profits created on the sale of the condominiums
Portland St.
Property will be anchored by 75,000 sq. ft. Home DepotRichmond St. W
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Land Use Intensification Queen and Portland, Toronto, ON
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Tillicum Centre, Victoria, British Columbia, ,
Acquired in July 2002, expansion initiated in 2004
• 62,000 sq. ft. addition anchored by introduction of two , q ymarquee tenants
• Fabricland relocated to a larger store and TD Bank also took occupancy during phase 2
Despite various construction challenges owing to site’s geography, RioCan’s development team was able to deliver on schedule and within budget
Mixed-use expansion scheduled for commencement in 2009, and will feature 300,000 sq. ft. of residential
In addition to improving tenant quality and aesthetics, the return on investment (“ROI”) since acquisition has increased by more than 100 bps
• NOI increased from $5.3 million at purchase to a budgeted annualized NOI of $7.2 million in 2008 (36% increase) $ ( )
• occupancy increased from 96.1% at purchase to 99.1%
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Greenfield Development
Greenfield developments through in-house capabilities and with partners
At September 30, 2008:
• Total greenfield developments = 8.8 million square feet, excluding shadow anchors
• RioCan’s owned interest = 3.5 million square feet
• Total estimated project cost = $1,585,778,000
• Total acquisition and development expenditures incurred to date = $442,334,000
• Total estimated remaining construction expenditures to complete = RioCan $489,550,000 / Partners’ $653,894,000
• Generate unlevered yield between 7% to 11%, at a weighted average of 8.5% to 9.5%
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Greenfield Development RioCan Centre Burloak, Oakville, ON – pre-development
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Greenfield Development RioCan Centre Burloak, Oakville, ON – post-development
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Greenfield Development RioCan Elgin Mills Crossing Richmond Hill ONRioCan Elgin Mills Crossing, Richmond Hill, ON
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Greenfield Development East Hills, Calgary, AB
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Greenfield Development East Hills, Calgary, AB, g y,
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Acquisition Activity As at September 30, 2008p ,
Quarter NLA (sq. ft.) at
RioCan's RioCan's
Ownership Cap Purchase Property Name & Location
1650-1600 Carling Avenue, Ottawa Q3 142,188 100.0% 6.40% $40.0
Cara Portfolio of 12 properties located in central and eastern Canada and one in western Canada
Q3 66,958 100.0% 7.50% 21.0
Total Q3 209 146 61 0
Acquired Interest Interest Rate Price (mil)
Total Q3 209,146 61.0
H&R REIT 10 property portfolio located in central & eastern Canada Q2 543,645 50.0% 7.70% 78.0
RioCan Elgin Mills Crossing, Richmond Hill, ON (additional 12.5%) Q2 31,016 62.5% 6.25% 9.4
Total Q2 574,661 87.4
Sh T il St J h NF Q1 29 689 100 0% 7 62% 5 6Shoppers on Topsail, St. Johns, NF Q1 29,689 100.0% 7.62% 5.6
Quartier DIX30, Autoroute 10 & 30, Brossard, QC Q1 43,326 50.0% 6.83% 153.0
Total Q1 73,015 158.6
Total Acquisitions To-Date 856,822 $307.0
To-date, RioCan has completed total acquisitions in the amount of $307 million
In June 2008, a second joint venture partnership with Kimco Realty Corporation was created (“RioKim II) for the purposes of acquiring, on a 50/50 basis, a ten property portfolio located in central and eastern Canada aggregating 1.1 million square feet
Purchase price for the portfolio was $156 million, with a cap rate of 7.7%$82.6 million of mortgages were assumed with a weighted average term of 8.1 years and a weighted average interest rate of 6.17%
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RioCan’s Proven Track Record - Strong Partnerships
Proven Track Record – Strong Partnershipsg p
In addition to RioKim JV and CPPIB strategic alliance, RioCan REIT maintains numerous other partnerships where partners rely on RioCan’s expertise in leasing, property management and development
Partner Type of Partner Total Property GLA (sf) Partner GLA (sf)
Kimco Public 9,242,391 4,566,534
CMHC Private 370,454 185,227
CPPIB Institutional 1,167,470 631,188
RRVLP (TIAA-CREF, OMERS) Public / Institutional 590,713 502,106
Sun Life Institutional 443,263 310,984
Dale-Vest/Marketvest Private 66,720 40,032
Devimco – Quebec Hydro Private 1,117,346 558,673
Effort Properties Private 147,234 73,617
Bayfield Private 391,413 273,989
Trinity Private 3,467,889 1,207,640
The Wynn Group Private 98,580 49,290
First Gulf Private 386,974 193,487
Frum Development Group Private 276,330 138,165
Total 18,113,714 8,990,663
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Proven Track Record – RioKim
RioKim Joint Venture
RioCan REIT and Kimco Realty Corporation, a U.S. REIT listed on the NYSE which also focuses on the ownership of shopping centres, each have a 50% interest in RioKim joint venture
Invested over $1.3 billion in 45 properties since 2001 comprising over 9.2 million sq. ft. of GLA
In June 2008, created a second joint venture partnership with Kimco (RioKim II) with the acquisition of a 10 properties portfolio in central and eastern Canada
RioCan provides asset and property management, development and leasing services to RioKim
Brentwood Village Tillicum Centre
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Proven Track Record – CPPIB
CPPIB Strategic Alliance
In October 2004, RioCan REIT and CPPIB announced an agreement to acquire premier regional power centres in Canada on a 50/50 basis as a core, long-term holding strategy
T d Ri C d CPPIB t i 1 1 illi ft f l t d i lToday, RioCan and CPPIB are partners in over 1.1 million sq. ft. of completed regional power centres and approximately 3.0 million sq. ft. of planned development projects
RioCan provides property and asset management, leasing, development and construction management services for the co-ownership
RioCan Centre Burloak - Before RioCan Centre Burloak - After
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SummarySummary
Canada’s largest REIT
Seasoned management team
Excellent portfolio, solid tenants and diversified
Focus on urban markets
Over 80% national tenants
Conservative debt profile and access to capital
St i tit ti l l ti hiStrong institutional relationships
Solid development pipeline
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Appendix
Appendix
i
Experienced Management Team
CEO of RioCan REIT since late 1993 and has overseen its growth from an asset base of under $100 million to its current enterprise value which is in excess of $8 billion Previously practiced law for 15 years, during which he was awarded his Queen’s Counsel in 1983Member of the board of directors of Royal Bank of Canada, Chair of Chesswood Income Fund and Chair of Mount Sinai Hospital Foundation
COO of RioCan REIT since 1995Began real estate career in 1981 with Royal LePage, where he earned the honourable designation of Rookie of the Year in the Commercial Division and President’s Round Table In 1984, he joined First Plazas as Vice President of Leasing/Marketing. Moved to Dominion Trust in 1988, where he took on the position of Senior Vice President. From 1993 to 1995, acted as Vice-President, Retail Leasing for Confederation Life.
Edward Sonshine, Q.C. – President & Chief Executive Officer, RioCan REIT
Frederic Waks – Senior Vice President & Chief Operating Officer, RioCan REIT
CFO of RioCan REIT since 2008Over 25 years of real estate, management, finance, accounting and tax experienceBegan his career with Arthur Anderson & Co where he spent 8 years in audit, tax and advisory roles, followed by over 10 years at O&Y Properties and O&Y REIT ultimately becoming CFO, and prior to coming to RioCan at TD Securities as a Vice President and Director in corporate finance for two years, where he was focused on real estate industry coverage.
Rags Davloor, CA – Senior Vice President & Chief Financial Officer, RioCan REIT
Extensive experience in Canadian real estate market• Multi-disciplinary team with experience across a wide spectrum of real estate classes
Appendix – Greenfield Development ProjectsAs at September 30, 2008
ii
Appendix – Greenfield Development Projects (continued)As at September 30, 2008
iii
Appendix– Greenfield Development Projects Descriptions (continued)As at September 30, 2008
iv
v
Appendix– Greenfield Development Projects Descriptions (continued)As at September 30, 2008
RioCan Yonge Eglinton Centre
2300 Yonge Street, Suite 500, PO Box 2386
T t ONToronto, ON
416-866-3033 / 1-800-465-2733
www.riocan.com
