RioCan Real Estate Investment Trust Announces Results for Fourth Quarter and Year Ended December 31, 2010

TORONTO, ONTARIO--(Marketwire - Feb. 28, 2011) -

HIGHLIGHTS for 2010:

All figures in Canadian dollars unless otherwise noted

• Funds from operations ("FFO") increased by 29% for the year ended December 31, 2010 to $357 million compared to $276 million for the year ended December 31, 2009. On a per unit basis, FFO increased 21% to $1.45 per unit from $1.20 per unit in 2009;

• FFO increased by 35% to $89 million in the fourth quarter of 2010 compared to $66 million in the fourth quarter of 2009. On a per unit basis, FFO increased 25% to $0.35 per unit from $0.28 per unit in the same period of 2009;

• Acquired interests in 48 properties in Canada and the US aggregating 5.7 million square feet at a purchase price of approximately $986 million at a weighted average cap rate of 7.6%;

• Obtained approximately $885 million in new mortgage financings at an average rate of 4.8%, which generated net proceeds to RioCan of about $525 million;

• Completed a US$100 million debenture offering at 4.1% and subsequent to the year-end issued a $225 million debenture offering at 4.5%;

• Completed two public offerings of a total of approximately 13.6 million units for total gross proceeds of $289 million;

• Redeemed all $200 million of the outstanding Series F debentures (bearing interest at 4.9%) due March 8, 2011, on January 20, 2011. Also, RioCan redeemed all $180 million of the outstanding Series L debentures (bearing interest at 8.3%) due April 3, 2014 on February 24, 2011; 

• Improved occupancy at year end of 97.4% from 97.1% at September 30, 2010;

• Subsequent to the year-end RioCan issued 5 million Cumulative Rate Reset Preferred Trust Units for gross proceeds of $125 million at a distribution yield of 5.25%. RioCan was the first REIT in Canada to issue preferred units; and

• Subsequent to year-end RioCan announced that it has signed a letter of intent to form an exclusive joint venture agreement with Tanger Outlet Centers, Inc. to develop U.S. style outlet centres in Canada.

RioCan Real Estate Investment Trust ("RioCan") (TSX:REI.UN) today announced its financial results for the fourth quarter and year ended December 31, 2010.

"We are pleased with our performance in 2010. RioCan has generated material growth this past year, through strong same property growth and through a substantial acquisitions platform that has added more than 5.7 million square feet at RioCan's interest to the portfolio. These acquisitions will provide a solid foundation for growth again in 2011 and 2012," said Edward Sonshine, President & CEO. "This past year has been a transformational year for RioCan. RioCan has managed legislative changes with the arrival of the SIFT rules, prepared for new accounting standards, and has successfully integrated into our portfolio a large number of assets, with multiple partners, in new markets for RioCan."

Financial Highlights

FFO for the three months ended December 31, 2010 ("Fourth Quarter"), was $89 million ($0.35 per unit) compared to $66 million ($0.28 per unit) in the fourth quarter of 2009. The primary differences between net earnings and FFO are amortization and future income taxes. The primary reasons for this increase were: a $31 million increase in net operating income ("NOI"), which was due to acquisitions, same store growth of 3.8%, the completion of greenfield developments, intensification of existing properties, increased lease cancellation fees of $0.5 million, and increased transaction gains of $5 million. These increases to FFO were partially offset by a $6 million increase in interest expense and $2.0 million of non-recurring International Financial Reporting Standards ("IFRS") and SIFT related costs during the Fourth Quarter.

RioCan reported net earnings for the Fourth Quarter of $179 million ($0.72 per unit) compared to $28 million ($0.11 per unit) for the same period in 2009, representing an increase of 551% (555% on a per unit basis). Net earnings increased significantly due to the $150 million one-time non-cash reversal in the Fourth Quarter of the future income taxes as a result of RioCan's completion of its restructuring to be compliant with the REIT exemption.

For the year ended December 31, 2010, FFO was $357 million ($1.45 per unit) compared to $276 million ($1.20 per unit) in 2009. The primary reasons for this increase were: a $92 million increase in NOI largely due to acquisitions, same store growth of 2.4%, the completion of greenfield developments, intensification of existing properties and increased lease cancellation fees of $13 million. Additional factors that influenced RioCan's FFO for the year include: an increase of $22 million in transaction gains and an increase of $1 million in fees and other income. These increases to FFO were partially offset by a $22 million increase in interest expense and $5 million of non-recurring IFRS and SIFT related costs during 2010.

For the year ended December 31, 2010, RioCan reported net earnings of $303 million ($1.23 per unit) compared to $114 million ($0.49 per unit) for 2009, representing an increase of 166% (151% on a per unit basis). Net earnings increased largely due to the $140 million one-time non-cash reversal of the future income taxes as a result of RioCan's completion of its restructuring to be compliant with the REIT exemption.

Same property NOI during the Fourth Quarter increased by 3.7%, while same store NOI increased 3.8% when compared to the same period in 2009. Same property and same store NOI gains were due largely to fixed rent steps, new and renewal leasing, lower bad debt expense and a reduction in the number of unanticipated vacancies. Same store income was also positively impacted by higher rental revenues of $1 million and lower bad debt expenses of $1 million offset by vacancies of $2 million.

For the year ended December 31, 2010, same property NOI increased by 3.1% and same store NOI increased 2.4% compared 2009. Same property and same store NOI gains were due largely to fixed rent steps, new and renewal leasing, lower bad debt expenses and a reduction in the number of unanticipated vacancies. Same store income was also positively impacted by higher rental revenues of $8 million and lower bad debt expenses of $3.5 million partially offset by vacancies of $9 million.

Sequentially, same property NOI increased 1.5% and same store NOI for the Fourth Quarter increased 1.6% compared to the third quarter of 2010 for the Canadian portfolio. Sequentially, base rent for the US portfolio increased 2% compared to the third quarter of 2010. Same store and same property NOI decreased 4% compared to the third quarter of 2010 for the US portfolio due to the timing of the recognition of realty tax recoveries during the year.

Portfolio Stability

As at December 31, 2010:

• The Canadian occupancy rate was approximately 97.3%, up from 97.0% at September 30, 2010 (97.4% as at December 31, 2009), and RioCan's US occupancy rate was about 98.2% compared to 98.1% at September 30, 2010 resulting in an overall occupancy rate of 97.4% compared to 97.1% at September 30, 2010 (97.4% as at December 31, 2009);

• The portfolio economic occupancy rate represents the occupied net leaseable area for which tenants are paying rent. The portfolio economic occupancy rate was approximately 96.4%. There is approximately 407,000 square feet of space that has been leased to tenants that are not yet paying rent. The annualized rental impact once these tenants commence paying rent over the next four quarters is about $9.2 million;

• In the Fourth Quarter, RioCan retained approximately 93.3% of expiring leases compared to a renewal retention rate of approximately 89.8% in the fourth quarter of 2009;

• For the year ended December 31, 2010, RioCan retained approximately 90.9% of expiring leases compared to a renewal retention rate of approximately 92.1% for 2009;

• Approximately 950,000 square feet were renewed during the Fourth Quarter at an average rent increase of 4.5% or $0.57 per square foot (including anchor tenants);

• Approximately 3.8 million square feet were renewed during 2010 at an average rent increase of 8.6% or $1.21 per square foot (including anchor tenants);

• During 2010, unanticipated vacancies were 440,000 square feet at RioCan's interest, a significant improvement from the 692,000 square feet at RioCan's interest incurred in 2009;

• RioCan's Canadian portfolio is concentrated in Canada's six high growth markets (including Calgary, Edmonton, Montreal, Ottawa, Toronto and Vancouver). Assets in these markets account for about 65.2% of RioCan's Canadian annualized rental revenue;

• National and anchor tenants represented about 85.9% of annualized rental revenue at December 31, 2010, compared to 84.5% at December 31, 2009;

• Approximately 59.6% of annualized rental revenue was derived from RioCan's 50 largest tenants; and

• No individual tenant comprised more than 4.6% of annualized rental revenue.

Portfolio Activity and Acquisition Pipeline

RioCan had a very active year in 2010, acquiring a number of attractive properties in Canada and the US. During the Fourth Quarter RioCan completed the acquisition of 19 properties aggregating $320 million. For the year RioCan acquired an interest in 48 properties (19 in Canada and 29 in the US) for an aggregate purchase price of $986 million ($432 million in Canada and $554 in the US).

Acquisitions completed in Canada during the Fourth Quarter included the following:

• Brant Power Centre, a 115,000 square foot new format retail centre in the GTA market of Burlington, Ontario. The property was built in 2004 and is tenanted by Home Outfitters (the Bay) and Best Buy. The property has a weighted average remaining lease term of 7 years. RioCan has acquired a 50% managing interest in the property for a purchase price of $15.1 million at a cap rate of 7.65%. In conjunction with the purchase RioCan assumed $10 million of first mortgage financing (at its interest) that carries an interest rate of 5.4% and matures in June 2015;

• Keswick Walmart: RioCan has acquired a 75% interest in Keswick Walmart, a 151,000 square foot newly developed new format retail property located in Keswick, Ontario, a suburb north of Toronto. The recently completed property is anchored by a 151,000 square foot Walmart (lease expiry 2030). There is also the potential for additional density on the site by way of two additional pads totaling approximately 11,748 square feet. Such density is subject to earn-out rights in favour of the vendor whereby consideration is to be paid if and when leases are in place with tenants open for business. RioCan acquired the property at a purchase price of $17.9 million (at RioCan's interest) at a cap rate of 7.0% and will manage the property on behalf of the co-ownership. RioCan has secured financing, at its interest, of $11.9 million for a ten-year term at a rate of 4.97%;

• Mill Woods Town Centre: RioCan completed its acquisition of a 40.34% co-ownership interest in the retail component of Mill Woods Town Centre, Edmonton, Alberta, for a purchase price of $34.7 million at a cap rate of 7.6%. The remaining interest is held by Bayfield Realty Advisors. Mill Woods is a 534,865 square foot enclosed mall anchored by a Safeway, Canadian Tire and Zellers. The property was acquired with financing in the amount, at RioCan's interest, equal to $22.7 million based on a five year term at a rate of 4.42%. RioCan will manage the retail component of the property on behalf of the co-ownership;

• Queensway Cineplex: a 110,700 square foot new format retail property located in Toronto, Ontario. The property, which was built in 2000, is anchored by an 87,510 square foot Cineplex on a land lease (lease expiry 2025). Other major tenants at the property include Bank of Nova Scotia, Kelsey's, Montana's, and Milestones. RioCan acquired a 50% managing interest in the property at a purchase price of $15.7 million equating to a cap rate of 6.0%. In conjunction with the purchase RioCan assumed $7 million of first mortgage financing (at its interest) that carries an interest rate of 7.1% and matures in December 2013; and

• 740 Dupont Road: Located in Toronto, the property is approximately 1.4 acres and currently houses a 25,000 square foot building occupied by Grand Touring Automobiles. RioCan acquired the property at a purchase price of $10.9 million equating to a cap rate of 7.7%. The property has been acquired free and clear of financing.

Subsequent to year end RioCan has completed one acquisition in Canada. Pembroke Shoppers Drug Mart in Pembroke, Ontario was completed at a purchase price of approximately $5 million at a cap rate of 7.3%.

US Acquisitions

Acquisitions completed in the US during the Fourth Quarter included the following:

Texas Region

Inland Western

In the Fourth Quarter, RioCan through its joint venture agreement with Inland Western Retail REIT ("Inland Western") completed the previously announced acquisition of an 80% interest in eight properties in Texas. In the Fourth Quarter, five of the eight properties were purchased for a total price of $92 million at a cap rate of 7.7%. The five properties purchased are: Coppell Town Center, Great Southwest Crossing, Suntree Square, Riverpark Shopping Center I & II, and Southpark Meadows I. Two of the five properties acquired during the Fourth Quarter are subject to existing third party financing, which totals $15 million at RioCan's interest and has a weighted average interest rate of 5.5% and matures in May 2012. In connection with the closing, $18 million of first mortgage financing at RioCan's interest was arranged on two of the five properties with a weighted average interest rate of 5.4%. Inland Western will continue to manage the properties on behalf of the joint venture. RioCan announced the agreement to purchase eight properties with Inland Western in Texas on May 20, 2010.

Kimco

Las Palmas Marketplace

Las Palmas is a 638,000 square foot new format retail center that was built in phases from 2002 to 2008 and is anchored by a 179,000 square foot Lowe's Home Improvement Warehouse and an 86,800 square foot Kohl's. Other major tenants at the property include Walgreens, Ross Dress for Less, Babies R'Us, Bed Bath & Beyond, Office Depot, and Michael's. The property is 98% leased and has an average lease term of approximately 7 years at an average lease rate of about US$10. The property was acquired for $27 million at RioCan's interest at a cap rate of 7.5%. Las Palmas has been acquired on a joint venture basis with RioCan (31.7%), Kimco (31.7%), and Dunhill Partners (36.6%). Coincident with the acquisition of this property non-recourse first mortgage financing of US$16.1 million at RioCan's interest was arranged carrying an interest rate of 5.4% and a term of 12 years. Dunhill Partners will continue to manage the property on behalf of the joint venture.

Northeast Region:

Edens and Avant Portfolio Acquisition

RioCan completed the purchase of a portfolio of five grocery anchored and new format retail properties for a total purchase price of about $74 million at RioCan's 80% interest at a cap rate of approximately 7.8%. The portfolio is 96% occupied and Giant Supermarket (a subsidiary of Royal Ahold), the largest tenant, contributes approximately 18% of the rental revenues. The average lease term for these five properties is 5.8 years and the average lease rate is about US$12 per square foot. RioCan has acquired this portfolio through its joint venture platform with Cedar on the same basis (80% RioCan and 20% Cedar) as previous joint venture acquisitions. Subsequent to acquiring the properties RioCan and Cedar arranged first mortgage non-recourse financing in the aggregate amount of $40 million (at RioCan's interest) at an interest rate of 5.1% for a 10 year term.

Cross Keys Place

Cross Keys Place is located in Turnersville, NJ, a suburb of Philadelphia, PA. The property is a 148,000 square foot new format retail centre that is tenanted by national tenants such as a 42,000 square foot Sports Authority, a 35,000 square foot Bed Bath & Beyond, a 21,000 square foot AC Moore, a 19,000 square foot Old Navy, and a 16,000 square foot Petco. The property is shadow anchored by a Home Depot. The property has a weighted average lease term of approximately 7.8 years. RioCan has acquired this property through its joint venture platform with Cedar on the same basis (80% RioCan and 20% Cedar) as previous joint venture acquisitions. The purchase price was $22 million at a cap rate of 8.2%. The property was acquired unencumbered. Subsequent to acquiring the property RioCan and Cedar arranged first mortgage non-recourse financing in the amount of $11.7 million (at RioCan's interest) at an interest rate of 5.1% for a 10 year term.

Canadian and US Acquisition Pipeline

Currently, RioCan has various acquisitions under contract. The aggregate purchase would be approximately $46 million and if acquired, would add approximately 318,000 square feet to the Trust's portfolio. The centres are located in Quebec, Ontario and Massachusetts. The Trust has waived all material conditions with respect to these properties and expects to close these transactions during the first quarter of 2011.

Additionally, RioCan has acquisitions under contract to increase its ownership interest in five properties owned with Trinity. The aggregate purchase price for the additional interest in these properties would be approximately $59 million and if completed, would add 360,000 square feet to the Trust's portfolio. These centres are located in Ontario.

RioCan previously indicated its intention to purchase two properties that were part of the initial portfolio of the Inland portfolio acquisition (Red Rose Commons and Whitehall Mall); however, due to a change in circumstances, management has determined that they will no longer be pursuing these acquisitions.

Liquidity and Capital

In selecting appropriate funding choices, RioCan's objective is to manage its capital structure in such a way as to diversify its funding sources while minimizing its funding costs and risks. RioCan had cash on hand of approximately $92 million at year end. During 2010, RioCan raised approximately $1.3 billion of capital through a combination of equity, mortgage financing, and debenture offerings. Subsequent to the year-end RioCan issued its first series of Preferred Units with the issuance of 5 million Cumulative Rate Reset Preferred Units for gross proceeds of $125 million.

As at December 31, 2010, EBITDA interest coverage for RioCan in the Fourth Quarter was 2.5x. RioCan's indebtedness was 57.1% of aggregate assets (56.5% net of cash). The Trust's leverage ratio of 57.1% at December 31, 2010, based on historical book values, would decrease to 49% upon restatement for the January 1, 2010 IFRS fair value increase. This restated leverage ratio would further decrease using fair values as at December 31, 2010. As part of RioCan's capital management strategy, it is RioCan's objective to further strengthen its balance sheet as well as improve its coverage ratios over time. RioCan's Net Debt to EBITDA for 2010 was 6.8x.

Unit Offerings

During 2010, RioCan completed two public offerings of approximately 13.6 million units, in total, for total gross proceeds of about $289.1 million. In the first unit offering, completed in September 2010, RioCan issued 7.2 million units at $20.75 per unit for total gross proceeds of approximately $149.4 million. In the second unit offering, completed in December 2010, RioCan issued 6.4 million units at $21.75 per unit for total gross proceeds of approximately $139.7 million.

Mortgage Financing

Canada

During the Fourth Quarter, RioCan obtained approximately $193 million of mortgage financing at an average interest rate of 4.4% and approximately $638 million of mortgage financing for the year at a weighted average interest rate of 4.8% with a weighted average term to maturity of about 4.3 years.

US 

During the Fourth Quarter, RioCan received advances of approximately $92 million of mortgage financing at an average interest rate of 5.1% and for the year RioCan received advances of about $232 million of mortgage financing at an average interest rate of 5.0% with a weighted average term to maturity of about 9.5 years.

At the outset of 2010, RioCan had $266.7 million of mortgage principal maturities at a weighted average contractual interest rate of 7.1%. During 2010, RioCan had new term borrowings of $885 million at a weighted average interest rate of 4.8% resulting in additional proceeds of $525 million after considering the effect of the maturity of fixed rate term mortgages and scheduled amortization.

RioCan has the continued flexibility to generate additional funds in 2010 through financing maturing loan balances as well as repay additional maturing loan balances to increase the size of RioCan's pool of unencumbered assets. As at December 31, 2010, RioCan had 72 properties that are unencumbered with a book value of $686 million.

Unsecured Debentures

In September 2010, RioCan raised US$100 million with the issuance of Series N debentures (bearing interest at 4.1%), RioCan's first US dollar denominated issuance.

The $200 million outstanding Series F debentures, which were due on March 8, 2011, were redeemed on January 20, 2011, in accordance with their terms, at a total redemption price of $1,004.89 plus accrued and unpaid interest of $18.02575, both per $1,000 principal amount.

RioCan raised $225 million in gross proceeds through the issuance of its Series O 5-year, senior unsecured debenture offering (bearing interest at 4.5%) in January 2011. The proceeds were partially used to redeem the $180 million principal amount of Series L senior unsecured debentures. The Series L Debentures, which were due on April 3, 2014, were redeemed on February 24, 2011 and resulted in a prepayment penalty in aggregate of $23.7 million, at a total redemption price of $1,131.85 plus accrued and unpaid interest of $32.86356, both per $1,000 principal amount. As a result of this redemption of the Series L debentures that carried an interest rate of 8.3%, RioCan will realize substantial interest savings going forward. 

Lines of Credit

During the fourth quarter of 2010, the RioCan (80%) / Cedar (20%) joint venture entered into a US$50 million senior revolving credit facility. RioCan has five revolving lines of credit in place with three Canadian chartered banks, having an aggregate capacity of $421.5 million (December 31, 2009 – three revolving lines of credit aggregating $293.5 million with two Canadian chartered banks) against which approximately $37 million has been drawn as letters of credit leaving $383 million available for cash draws under the lines of credit.

Development Activity

During the three months ended December 31, 2010, RioCan completed 237,000 square feet (three months ended December 31, 2009 – 39,000 square feet) of redevelopment and development activities of which 60,000 square feet pertains to the completion of greenfield development projects in the Fourth Quarter and 178,000 square feet pertains to additional NLA added at existing properties.

For the year ended December 31, 2010, RioCan completed 262,000 square feet (2009 – 929,000 square feet) of redevelopment and development activities of which 80,000 square feet pertains to the completion of greenfield development projects in 2010 and 181,000 square feet pertains to additional NLA added at existing properties.

Subsequent to the year-end RioCan announced that it signed a letter of intent to form an exclusive joint venture with Tanger Factory Outlet Centers, Inc. for the acquisition, development and leasing of sites across Canada that are suitable for development or redevelopment as outlet shopping centres similar to those within the existing Tanger U.S. portfolio. Any projects developed will be co-owned on a 50/50 basis and will be branded as Tanger Outlet Centers. Tanger has agreed to provide leasing and marketing services to the venture and RioCan will provide development and property management services. It is the intention of the joint venture to develop as many as 10 to 15 outlet centres in larger urban markets and tourist areas across Canada, over a five to seven year period. The typical size of a Tanger Outlet Center is approximately 350,000 square feet, but is dependent on tenant demand. Assuming these parameters are suitable and materialize in Canada, on a fully built out basis, the overall investment of the joint venture is anticipated to be as high as $1 billion.

As at December 31, 2010, RioCan had ownership interests in 10 greenfield development projects that will, upon completion, comprise about 8.1 million square feet, of which RioCan's ownership interest will be 3.0 million square feet. 

RioCan's Audited Consolidated Financial Statements, Management's Discussion and Analysis and a Supplemental Information Package for the year ended December 31, 2010 and 2009 are 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 Monday, February 28, 2011 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 1-866-226-1792. If you cannot participate in the live mode, a replay will be available until March 29, 2011. To access the replay, please dial 905-694-9451 or 1-800-408-3053 and enter passcode 3214885#.

Scheduled speakers include Edward Sonshine, President and Chief Executive Officer, Fred Waks, Executive Vice President and Chief Operating Officer and Rags Davloor, Senior Vice President and 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-Webcasts/default.aspx 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 in of approximately $10.1 billion as at December 31, 2010. It owns and manages Canada's largest portfolio of shopping centres with ownership interests in a portfolio of 297 retail properties, including 10 under development, containing an aggregate of over 70 million square feet. RioCan owns an 80% interest in 31 grocery anchored and new format retail centres in the United States through various joint venture arrangements. In addition, RioCan owns a 14% equity interest in Cedar Shopping Centers, Inc., a real estate investment trust focused on supermarket-anchored shopping centres and drug store-anchored convenience centres located predominantly in the Northeastern United States. For further information, please refer to RioCan's website at www.riocan.com.

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 "US Investment", "Acquisition Pipeline" and "Liquidity and Capital"), 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 this News Release, 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 in the global marketplace associated with current economic conditions, tenant concentrations, occupancy levels, access to debt and equity capital, interest rates, joint ventures/partnerships, the relative illiquidity of real property, unexpected costs or liabilities related to acquisitions, construction, environmental matters, legal matters, reliance on key personnel, unitholder liability, income taxes, the investment in the United States of America ("US"), US currency and RioCan's qualification as a real estate investment trust for tax purposes. 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 more robust retail environment compared to recent years; relatively 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; the availability of purchase opportunities for growth in Canada and the US; and the impact of accounting principles to be adopted by the Trust effective January 1, 2011 under International Financial Reporting Standards ("IFRS") which includes application to the Trust's 2010 comparative financial results. 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) (the "Act") contains legislation affecting the tax treatment of publicly traded trusts (the "SIFT Legislation"). The SIFT Legislation provides for a transition period until 2011 for publicly traded trusts, such as RioCan, which existed prior to November 1, 2006. In addition, the SIFT Legislation will not impose tax on a trust which qualifies under such legislation as a real estate investment trust (the "REIT Exception"). RioCan currently qualifies for the REIT Exception 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.