RioCan Real Estate Investment Trust
TSX : REI.UN

RioCan Real Estate Investment Trust

July 31, 2014 07:00 ET

RioCan Real Estate Investment Trust Strong Renewal Leasing Contributes to 5% Growth in Operating Funds From Operations Per Unit in Second Quarter of 2014

TORONTO, ONTARIO--(Marketwired - July 31, 2014) - RioCan Real Estate Investment Trust ("RioCan") (TSX:REI.UN) -

RioCan's HIGHLIGHTS for the three and six months ended June 30, 2014 were:

  • RioCan's Operating FFO increased by 5% to $127 million for the three months ending June 30, 2014 ("second quarter") compared to $121 million in the second quarter of 2013. On a per unit basis, Operating FFO increased 5% to $0.42 from $0.40 in the same period of 2013;
  • RioCan's Operating FFO increased 4% to $254 million for the first six months of 2014 compared to $245 million for the same period in 2013. On a per unit basis, Operating FFO increased by $0.02 or 2% to $0.83 compared to $0.81 during the same period of 2013;
  • RioCan's concentration of rental revenue in Canada's six major markets increased to 73.0% from 71.7% at December 31, 2013;
  • Overall occupancy improved to 96.9% as of June 30, 2014, compared to 96.8% at March 31, 2014;
  • RioCan renewed 1.2 million square feet in the Canadian portfolio during the second quarter at an average rent increase of $2.26 per square foot, representing an increase of 13.9%;
  • During the second quarter, RioCan's same store growth was 2.0% in Canada and 1.4% in the US;
  • As at June 30, 2014, RioCan had ownership interests in 16 properties under development that will, upon completion, comprise approximately 9.7 million square feet (5.1 million at RioCan's interest), all located in major markets in Canada;
  • During the second quarter, RioCan acquired interests in two income properties in Canada at an aggregate purchase price of approximately $23 million at RioCan's interest at a weighted average capitalization rate of 7.0%; and
  • During the quarter, RioCan completed the offering of $150 million Series V debentures, which carry a coupon of 3.746% and maturity date of May 30, 2022.

RioCan Real Estate Investment Trust ("RioCan") today announced its financial results for the three and six months ended June 30, 2014.

"I am pleased with our results through the first half of the year. Despite some headwinds in certain areas of the Canadian retail landscape, we continue to experience strong tenant retention and double digit rent spreads on our Canadian lease renewals. The interest rate environment remains attractive with rates that remain at or near historic lows, and we expect to see continued interest savings on our refinancing activities well into 2015," said Edward Sonshine, Chief Executive Officer of RioCan. "Our urban development pipeline is progressing as expected. The Cube, at RioCan's head office is taking shape, and the demolition at our site directly across the street at the northeast corner of Yonge and Eglinton began in earnest this past April. In Western Canada, construction has begun on the Walmart at RioCan's Sage Hill development in Calgary. Since the quarter end, RioCan has also received approvals on two projects in Toronto, in the College and Bathurst area, and we recently submitted our application for approval at our Dupont Street site also in Toronto. These sites all feature great urban retail together with other uses such as office, residential or in some cases both."

Financial Highlights

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

In millions except percentages and per unit values Three months ended
June 30,
Six months ended
June 30,
2014 2013 %
change
2014 2013 %
change
Operating FFO $ 127 $ 121 5 % $ 254 $ 245 4 %
Operating FFO per Unit $ 0.42 $ 0.40 5 % $ 0.83 $ 0.81 2 %
In millions except percentages and per unit values Three months ended
June 30,
Six months ended
June 30,
2014 2013 %
change
2014 2013 %
change
Net earnings attributable to common and preferred unitholders $ 159 $ 153 4 % $ 330 $ 316 4 %
Net earnings per Unit attributable to common Unitholders - basic $ 0.51 $ 0.50 2 % $ 1.06 $ 1.03 3 %
In $millions. As at June 30, 2014 June 30, 2013
Total enterprise value (1) 14,876 13,774
Total assets - at RioCan's interest(1) 13,977 13,207
Debt(1) (mortgages and debentures payable - at RioCan's interest) 6,200 5,851
(1) Based on RioCan's proportionate share including joint ventures accounted for under the equity method of accounting

Operating FFO for the second quarter was $127 million ($0.42 per unit) compared to $121 million ($0.40 per unit) in the second quarter of 2013 or an increase of 5%. The primary reason for this increase was an increase in NOI from rental properties of $5 million, which includes the impact of the following items: higher rental income as a result of acquisitions, net of dispositions, completion of development projects, same store growth of 2.0% for Canada and 1.4% for the US portfolio, the benefit of $3 million in favourable foreign currency gains from US operations, and a decrease in interest expense of $3 million net of a $0.2 million unfavourable impact of foreign exchange. These increases to Operating FFO were partially offset by an increase in general and administrative costs of $2 million due primarily to increased information technology costs associated with the Trust's implementation of a new ERP and financial reporting system during the first half of 2014 as well as professional fees related to the introduction of a new senior executive incentive compensation plan, and a new deferred equity unit plan for non-employee Trustees.

Operating FFO at RioCan's interest for the first six months of 2014 was $254 million or $0.83 per Unit, compared to $245 million or $0.81 per Unit for the same period in 2013, representing an increase of $9 million or 4%. On a per Unit basis, Operating FFO increased by $0.02 per Unit or 2%. The $9 million increase in Operating FFO at RioCan's interest for the first six months of 2014 as compared to the same period in 2013 is primarily due to an increase in NOI from rental properties of $11 million, which includes the impact of the following items: higher rental income as a result of acquisitions, net of dispositions, completion of development projects, same store growth of 2.7% for Canada and 2.1% for the US portfolio and the benefit of a $6 million favourable foreign currency gain from US operations, partially offset by lower lease cancellation fees and straight-line rent of $2 million. Operating FFO for the six months ended also benefited from a decrease in interest expense of $6 million net of a $0.7 million unfavourable impact of foreign exchange. These gains were partly offset by a decrease in fees and other income of $3 million primarily due to lower development fees generated on joint venture projects, and an increase in general and administrative costs of $4 million due primarily to increased information technology costs associated with the Trust's implementation of a new ERP and financial reporting system during the first half of 2014, as well as professional fees related to the introduction of a new senior executive incentive compensation plan, and a new deferred equity unit plan for non-employee Trustees.

Same Store and Same Property NOI

Canada Three months ended
June 30, 2014
year over year
Same Store Growth 2.0 %
Same Property Growth 1.7 %
United States
Same Store & Property Growth 1.4 %

Leasing and Operational Highlights:

2014 2013 2012
(thousands of square feet, millions of dollars) Second
quarter
First
quarter
Fourth
quarter
Third
quarter
Second
quarter
First
quarter
Fourth
quarter
Third
quarter
Committed occupancy 96.9 % 96.8 % 96.9 % 97.0 % 96.7 % 97.0 % 97.4 % 97.3 %
Economic occupancy 95.9 % 95.7 % 95.8 % 95.5 % 95.4 % 95.8 % 95.9 % 95.5 %
NLA leased but not paying rent 520 519 542 716 642 615 711 855
Annualized rental impact $ 15.3 $ 13.0 $ 14.0 $ 17.0 $ 15.0 $ 15.0 $ 15.0 $ 18.0
Retention rate - Canada 88.8 % 91.2 % 97.0 % 91.1 % 95.9 % 68.3 % 94.3 % 84.8 %
% increase in average net rent per sq ft - Canada 13.9 % 7.0 % 8.8 % 11.2 % 12.0 % 13.4 % 18.4 % 12.9 %
Retention rate - US 97.3 % 86.4 % 98.2 % 98.4 % 92.0 % 98.8 % 87.6 % 96.3 %
% increase in average net rent per sq ft - US 7.0 % 8.3 % 4.8 % 3.8 % 4.3 % 2.3 % 5.1 % 6.0 %
Average in place rent $ 16.00 $ 16.01 $ 16.08 $ 16.07 $ 15.77 $ 15.77 $ 15.70 $ 15.85
Same store growth (i) - Canada 2.0 % 3.1 % 2.7 % 2.2 % 0.6 % 0.1 % 0.2 % 0.0 %
Same store growth (i) - US 1.4 % 3.0 % 1.7 % 0.9 % 1.4 % 1.4 % 1.9 % -0.3 %

(i) Refers to same store NOI growth on a year over year basis.

Highlights:

  • During the second quarter, RioCan renewed 1.2 million square feet (2013 - 956,000 square feet) in the Canadian portfolio at an average rent increase of $2.26 per square foot (2013 - $2.14 per square foot), representing an increase of 13.9% and a renewal retention rate of 88.8%;
  • RioCan's Canadian portfolio is concentrated in Canada's six high growth markets (consisting of Calgary, Edmonton, Montreal, Ottawa, Toronto and Vancouver). Assets in these markets contribute about 73.0% of RioCan's Canadian annualized rental revenue (71.7% at December 31, 2013). The increase was accomplished through developments and the sale of certain assets in secondary markets;
  • National and anchor tenants represented about 86.5% of RioCan's total annualized rental revenue at June 30, 2014, a slight increase compared to 85.9% at June 30, 2013; and
  • No individual tenant comprised more than 4.1% of annualized rental revenue. At June 30, 2014, Loblaws (which includes Shoppers Drug Mart) was RioCan's largest revenue source.

Portfolio Activity and Acquisition Pipeline

During the second quarter, RioCan completed two acquisitions of interests in income producing properties for a total purchase price of $23 million in Canada with a weighted average capitalization rate of 7.0%. There were no purchases in the US during the second quarter.

Acquisitions Completed in the Second Quarter

Canada

  • RioCan purchased University Plaza for $22 million at a capitalization rate of 6.8%. University Plaza is an open format retail centre anchored by Shoppers Drug Mart located in Hamilton, Ontario with NLA of 113,000 square feet. The property was acquired free and clear of financing. This property integrates well with RioCan's existing shopping centre, Miracle Plaza, a 84,000 square foot centre anchored by a Metro grocery store, allowing RioCan to create management and operating efficiencies on both of these assets.
  • RioCan acquired a 50% interest in a piece of land adjacent to its IGA Plaza (Centre Rene Robert) for $1 million at a capitalization rate of 9.8%. The land, once developed by Sobeys, will form part of RioCan's existing grocery anchored shopping centre located in suburban Montreal in Ste Therese, Quebec.

Acquisitions Under Contract (Firm)

Three income properties (two in Canada and one in the US) that would represent acquisitions of $70 million, at a weighted average capitalization rate of 5.7%.

Canada

  • RioCan has the acquisition of the remaining 50% interest in 845 Eglinton Avenue East under firm contract at a purchase price of approximately $32 million, representing a capitalization rate of 5.5%. 845 Eglinton Avenue East is a 133,000 square foot non-grocery anchored shopping centre located in Toronto, Ontario, In connection with the acquisition, RioCan would assume $16 million in mortgage financing carrying interest at approximately 3.34%, maturing in March 2017. As part of the transaction, the vendor is entitled to additional consideration of up to approximately $6 million if RioCan is successful in its efforts to rezone the property to permit a mixed use project. The acquisition is expected to close in the first quarter of 2015.
  • RioCan has the acquisition of a 75% interest in four retail pads under firm contract at a purchase price of approximately $9 million, representing a capitalization rate of 5.3%. The retail pads, which are tenanted by Wendy's, Tim Horton's, TD Bank and ScotiaBank, would be acquired free and clear of financing and the acquisition is expected to close in the third quarter of 2014. Chapman Mills Marketplace is a 547,000 square foot new format centre that was completed in 2006. Trinity owns a 25% interest in the existing site and will acquire a 25% interest in the additional retail pads. The site is anchored by a Walmart and a Loblaws, which owns its own premises but operates as part of the shopping centre.

US

  • RioCan has the acquisition of a 100% interest in Riverwalk Market under firm contract at a purchase price of approximately US$29 million, representing a capitalization rate of 6.1%. Riverwalk Market is a 91,000 square foot grocery anchored shopping centre anchored by Market Street grocery located in Flower Mound (a suburb of Dallas Fort-Worth), Texas. The property would be acquired free and clear of financing and the acquisition is expected to close in the third quarter of 2014.

Acquisitions Under Contract (Conditional)

RioCan has income property acquisitions under contract in Canada and the US where conditions have not yet been waived that, if completed, will represent acquisitions of $79 million, at RioCan's interest. These transactions are undergoing due diligence procedures and while efforts will be made to complete the transactions, no assurance can be given.

Acquisition Pipeline

RioCan is currently in negotiations regarding property acquisitions in Canada that, if completed, represent approximately $54 million of additional acquisitions at RioCan's interest. These transactions are in various stages of negotiations and while efforts will be made to complete these negotiations, no assurance can be given.

Property Dispositions Under Contract

RioCan did not complete any property dispositions during the second quarter. As at the date of this report, RioCan has one disposition of a land parcel under firm contract at a sales price of $0.2 million.

RioCan has dispositions of land parcels under conditional contracts where conditions have not yet been waived for $11 million. These land parcels are free and clear of financing.

RioCan is in the process of marketing for sale one income property and land parcels with a total fair value as at June 30, 2014 calculated in accordance with IFRS of approximately $43 million, at RioCan's interest. RioCan's mortgage obligation related to these properties is $14 million. RioCan is under no obligation to proceed with the proposed dispositions which, if completed, will be done to facilitate its objective of paring its portfolio and focusing on major markets.

Additionally, RioCan and its partner, KingSett, have entered into a conditional agreement with developer, Embassy BOSA Inc., to sell up to $30 million in air rights (representing 600,000 square feet) above the CPA development site, along with approximately $40 million in cost reimbursement for infrastructure works. The transaction is subject to a number of both mutual and unilateral conditions. The intention is for two residential towers to be erected upon the planned retail podium. The transaction contemplates that Embassy BOSA Inc. be responsible, on a cost to complete basis, for all incremental costs associated with the residential component of the overall project.

Development Portfolio

As at June 30, 2014, RioCan had ownership interests in 16 development projects that will, upon completion, comprise about 10 million square feet (5 million square feet at RioCan's interest). In addition to its development projects, RioCan continued its urban intensification activities, primarily in the Toronto, Ontario market.

During the second quarter, RioCan transferred from properties under development to income producing properties $27 million in costs pertaining to 189,000 square feet of completed greenfield development or expansion and redevelopment projects. For the six months ended June 30, 2014, RioCan transferred $141 million in costs pertaining to 477,000 square feet.

Development Project Updates - recent events

During the second quarter, RioCan acquired Trinity's 40% interest (as described below) in the 1.3 acre site located just west of the downtown core in Toronto near Bathurst Street and College Street. This project recently received approval for a 145,000 square foot, four storey mixed use building with two floors of office, two floors of retail and three levels of underground parking totalling 300 spaces. The total retail space is expected to be 75,000 square feet of retail with a maximum single user size of 45,000 square feet, and 70,000 square feet of office space.

RioCan and Allied's site located just west of the downtown core in Toronto includes 551-555 College Street, formerly owned exclusively by Allied, and 547 and 549 College Street formerly owned exclusively by RioCan. Given the strategic downtown location of each respective property, Allied and RioCan formed a 50-50 joint venture partnership to create one 64,000 square foot site with 185 feet of frontage on College Street. The joint venture recently received municipal approval to intensify the site with a new 62,000 square foot building including 5,800 square feet of retail and 77 residential units in an eight storey mixed use complex.

During the second quarter, RioCan commenced demolition around the existing Toronto-Dominion Bank ("TD Bank") branch (currently under contract as described below) at its Northeast Corner, Yonge and Eglinton site in Toronto, Ontario. The land assembly was acquired in 2011 with Metropia and Bazis for the purpose of redeveloping it into a mixed-use retail and residential property. It is anticipated that the project will contain two residential towers totalling 58 and 36 floors, an office component, as well as a 54,000 square foot retail component upon completion. The property will feature a flagship TD Bank branch at the corner of Yonge and Eglinton. RioCan's ownership interest in the property is 50%.

Subsequent to the quarter end, RioCan submitted an Official Plan and rezoning application for 740 Dupont with the City of Toronto. This 1.4 acre site, located on Dupont Street near Christie Avenue, north-west of the downtown core of Toronto is expected to be developed into 277,000 square foot mixed use urban retail building that includes two floors of retail space under eleven floors of residential space. RioCan has a 100% ownership interest in the site.

Development Acquisitions Completed During the Second Quarter

During the Second Quarter, RioCan acquired interests in two development properties in Canada at an aggregate purchase price of $23 million (including closing costs), at RioCan's interest as follows:

  • On April 14, 2014, the Trust acquired the remaining 40% interest in the College & Bathurst land assembly located in Toronto, Ontario (referenced above) from Trinity at a purchase price of approximately $11 million. The consideration received by Trinity was used to repay, in full, the outstanding mezzanine financing principal and accrued interest in the amount of approximately $7 million on the project, in conjunction with the transaction closing.
  • On May 9, 2014, the Trust acquired its partner's interests in a land parcel at RioCan Centre Vaughan, located in Vaughan, Ontario, which is part of the Greater Toronto Area. The acquisition comprised 100% of the industrial component and 50% of the retail component at a total purchase price of approximately $12 million. As a result of this transaction, RioCan now has a 100% ownership interest in the industrial component and an 81% ownership interest in the retail component. The consideration received by the partner was used to repay, in full, the outstanding mezzanine financing in the amount of approximately $11 million on the project, in conjunction with the transaction closing. The land parcel acquired is adjacent to RioCan's existing shopping centre at RioCan Centre Vaughan, which is a 262,000 square foot centre anchored by Walmart. The existing site comprises 54 acres and is being developed into a new format retail centre.

Development Property Acquisitions Under Contract

RioCan currently has three development sites in Canada under firm contract where conditions have been waived that, if completed, represent acquisitions of $23 million at RioCan's interest.

  • The acquisition of lands adjacent to Calaway Park, a 35 acre parcel of land located approximately 25 kilometres west of Calgary, Alberta. The site is to be acquired on a 50/50 joint venture basis between RioCan and Tanger at a purchase price of $28 million ($14 million at RioCan's interest).While due diligence conditions have been waived, the acquisition remains subject to a zoning condition. The site would be acquired free and clear of financing. The intention is to develop the land into an outlet centre of approximately 250,000 to 350,000 square feet. The acquisition is expected to close in the fourth quarter of 2014.
  • The acquisition of a 50% interest in the site where TD Bank is currently located at the northeast corner of Yonge Street and Eglinton Avenue in Toronto, Ontario, at a purchase price of $12 million ($6 million at RioCan's interest). The acquisition, which would be acquired free and clear of financing, will form part of the existing Northeast Yonge Eglinton land assembly, acquired in 2011 with Metropia and Bazis for the purpose of redeveloping into a mixed-use retail and residential property. RioCan and its partners obtained zoning approval and the redevelopment commenced in April 2014. The acquisition is expected to close in the fourth quarter of 2014.
  • The acquisition of an 81% interest in a land parcel at RioCan Centre Vaughan, located in Vaughan, Ontario, at a purchase price of $4 million ($3 million at RioCan's interest). The property would be acquired free and clear of financing. Trinity would acquire the remaining 19% interest in the property. The acquisition is expected to close in the fourth quarter of 2014.The land parcel to be acquired is adjacent to phase II of RioCan's existing shopping centre at RioCan Centre Vaughan.

RioCan has $4 million of development sites in Canada (at RioCan's interest) under contract where conditions have not yet been waived. These transactions are in various stages of due diligence and while efforts will be made to complete these transactions, no assurance can be given.

Development Acquisition Pipeline

RioCan is also in negotiations regarding development property acquisitions in Canada that, if completed, represent approximately $45 million of additional acquisitions at RioCan's interest. These transactions are in various stages of negotiations and while efforts will be made to complete these negotiations, no assurance can be given.

Liquidity and Capital

Quarter Ended (i) Rolling 12 months ended (ii)
June 30,
2014
June 30,
2014
December 31,
2013
Interest coverage ratio - RioCan's interest 3.28x 2.87x 2.83x
Debt service coverage ratio - RioCan's interest 2.40x 2.15x 2.10x
Fixed charge coverage ratio - RioCan's interest 1.12x 1.07x 1.06x
Net debt to Adjusted EBITDA ratio - RioCan's interest 8.11x 7.95x 7.56x
Net Operating debt to Operating EBITDA - RioCan's interest 7.67x 7.56x 7.24x
Unencumbered assets (millions) $ 2,407 $ 2,068
Unencumbered assets to unsecured debt 137 % 142 %
(i) Excludes capitalized interest to properties under development
(ii) Includes capitalized interest to properties under development

Financing Highlights for the Second Quarter

Unencumbered Assets

As at June 30, 2014, RioCan's unencumbered asset pool was comprised of 112 assets with an aggregate fair value of $2.4 billion.

Credit Facilities

At June 30, 2014, RioCan has five revolving lines of credit in place having an aggregate capacity of $712 million with $590 million available to be drawn.

Term Financing

Canada

  • RioCan did not obtain any fixed-rate mortgage financing during the quarter.
  • On May 30, 2014, the Trust issued $150 million of Series V senior unsecured debentures, which mature on May 30, 2022 and carry a coupon rate of 3.746%.

US

  • RioCan obtained approximately $18 million of fixed-rate mortgage financing at a weighted average interest rate of 4.13% with a weighted average term to maturity of 6.9 years.

Trust Units

On July 25, 2013, RioCan announced the TSX approval of its notice of intention to make a normal course issuer bid ("NCIB") for a portion of its Units as appropriate opportunities arise from time to time. During the second quarter RioCan did not make any purchases of Trust Units.

RioCan's Consolidated Financial Statements, Management's Discussion and Analysis for the three months ended June 30, 2014 is available on RioCan's website at www.riocan.com.

Conference Call and Webcast

Interested parties are invited to participate in a conference call with management on Thursday, July 31, 2014 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 416-340-2218 or 1-866-225-0198. If you cannot participate in the live mode, a replay will be available until August 28, 2014. To access the replay, please dial 905-694-9451 or 1-800-408-3053 and enter passcode 4087793#.

Scheduled speakers include Edward Sonshine, O.Ont. Q.C., Chief Executive Officer, Fred Waks, President and Chief Operating Officer and Rags Davloor, Executive 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 of approximately $14.9 billion as at June 30, 2014. It owns and manages Canada's largest portfolio of shopping centres with ownership interests in a portfolio of 340 retail properties containing approximately 81 million square feet, including 47 grocery anchored and new format retail centres containing 13 million square feet in the United States as at June 30, 2014. RioCan's portfolio also includes 16 properties under development in Canada. For further information, please refer to RioCan's website at www.riocan.com.

Non-GAAP measures

RioCan's consolidated financial statements are prepared in accordance with IFRS. Consistent with RioCan's management framework, management uses certain financial measures to assess RioCan's financial performance, which are not generally accepted accounting principles (GAAP) under IFRS. The following measures, Funds From Operations ("FFO"), Operating Funds From Operations ("Operating FFO"), Adjusted Net Operating Income, and Adjusted Earnings before interest, taxes, depreciation and amortization ("Adjusted EBITDA") as well as other measures discussed elsewhere in this release, do not have a standardized definition prescribed by IFRS and are, therefore, unlikely to be comparable to similar measures presented by other reporting issuers. RioCan uses these measures to better assess the Trust's underlying performance and provides these additional measures so that investors may do the same. Non GAAP measures should not be considered as alternatives to net earnings or comparable metrics determined in accordance with IFRS as indicators of RioCan's performance, liquidity, cash flow, and profitability. For a full definition of these measures, please refer to the "Use of Non-GAAP Measures" in RioCan's second quarter 2014 Management Discussion and Analysis.

Forward-Looking Information

This news release contains forward-looking statements within the meaning of applicable securities laws. These statements include, but are not limited to, statements made in this News Release (including the sections entitled "Highlights for the three and six months ended June 30, 2014", "Financial Highlights", "Leasing and Operational Highlights", "Portfolio Activity and Acquisition Pipeline", "Liquidity and Capital", and "Development Portfolio"), and other statements concerning RioCan's objectives, its strategies to achieve those objectives, as well as statements with respect to management's beliefs, plans, estimates, and intentions, and similar statements concerning anticipated future events, results, circumstances, performance or expectations that are not historical facts. Forward-looking statements generally can be identified by the use of forward-looking terminology such as "outlook", "objective", "may", "will", "would", "expect", "intend", "estimate", "anticipate", "believe", "should", "plan", "continue", or similar expressions suggesting future outcomes or events. Such forward-looking statements reflect management's current beliefs and are based on information currently available to management. All forward-looking statements in this News Release are qualified by these cautionary statements.

These forward-looking statements are not guarantees of future events or performance and, by their nature, are based on RioCan's current estimates and assumptions, which are subject to risks and uncertainties, including those described under "Risks and Uncertainties" in RioCan's Management's Discussion and Analysis for the period ended June 30, 2014, which could cause actual events or results to differ materially from the forward-looking statements contained in this News Release. Those risks and uncertainties include, but are not limited to, those related to: liquidity in the global marketplace associated with 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, development projects, environmental matters, legal matters, reliance on key personnel, unitholder liability, income taxes, the investment in the United States of America ("US"), fluctuations in the currency exchange rate between the Canadian and US dollar 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 stable retail environment; relatively low and stable interest costs; a continuing trend toward land use intensification in high growth markets; access to equity and debt capital markets to fund, at acceptable costs, the future growth program to enable the Trust to refinance debts as they mature; and the availability of purchase opportunities for growth in Canada and the US. Although the forward-looking information contained in this News Release is based upon what management believes are reasonable assumptions, there can be no assurance that actual results will be consistent with these forward-looking statements. Certain statements included in this News Release may be considered "financial outlook" for purposes of applicable securities laws, and such financial outlook may not be appropriate for purposes other than this News Release.

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

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

Contact Information

  • RioCan Real Estate Investment Trust
    Rags Davloor
    Executive Vice President & CFO
    (416) 642-3554
    www.riocan.com