RioCan Real Estate Investment Trust Announces Conditional Agreement to Acquire Two Regional Malls in the Greater Toronto Area

RioCan Real Estate Investment Trust Announces Conditional Agreement to Acquire 
Two Regional Malls in the Greater Toronto Area 
TORONTO, ONTARIO -- (Marketwire) -- 02/05/13 -- RioCan Real Estate
Investment Trust ("RioCan") (TSX:REI.UN) is pleased to announce that
it has entered into a conditional agreement with Primaris Retail REIT
("Primaris") to purchase a 50% interest in Burlington Mall in
Burlington, Ontario and a 100% interest in Oakville Place in
Oakville, Ontario. The purchase is conditional on the successful
completion of the H&R REIT and KingSett Consortium acquisition of
Primaris, which pursuant to its Board supported agreement was
announced earlier today. RioCan will purchase the assets as part of
the KingSett Capital led Consortium. 
The aggregate gross purchase price for these two properties is
approximately $362 million (at RioCan's interest). In connection with
the purchase, RioCan will assume, at its interest, the in place first
mortgage financing of approximately $165 million in aggregate. The
purchase price will be reduced by a mark-to-market adjustment on
closing in consideration of the debt's above market interest rate,
which is currently estimated at approximately $8 million. RioCan will
fund this acquisition through cash on hand and existing operating
These properties will add to RioCan's growing enclosed mall portfolio
that includes such properties as Georgian Mall, RioCan Yonge Eglinton
Centre, RioCan Sheppard Centre and Shoppers World Brampton, all
located in the GTA and surrounding markets. The acquisition of
Oakville Place and Burlington Mall will allow RioCan to gain a
stronger foothold in the enclosed mall sector, specifically in the
GTA, a segment otherwise difficult to enter. As well as strengthening
RioCan's market leading retail platform, there are additional
opportunities for organic growth within both shopping centres, which
RioCan believes it can realize with its deep infrastructure and
management strength. It is expected that the purchase will be
completed in early April.  
"This acquisition represents an excellent opportunity to acquire two
prominent regional malls, in communities with excellent demographics,
high barriers to entry, and great potential to create additional
value for our unitholders. We look forwa
rd to working with KingSett,
our partners, who have done an excellent job in bringing this
transaction into reality," said Edward Sonshine, CEO of RioCan.
"These two properties strengthen RioCan's portfolio of enclosed
malls, and will reinforce our competitive position in the GTA,
Canada's largest market. RioCan's expanding enclosed mall portfolio
with its strong fashion component will further support RioCan's
relationships with its growing North American tenant base. RioCan is
uniquely positioned to offer our tenants the opportunity to locate
within multiple locations and retail formats." 
Oakville Place is located directly off of Queen Elizabeth Way
("QEW"), the major highway running through Ontario's "Golden
Horseshoe", in Oakville, Ontario. Oakville is a fast growing
community with a strong, diversified economic base, and possesses one
of Canada's highest income demographics with an average household
income statistic that is well above the national average. Oakville
Place is a fashion focused, two level regional mall containing
approximately 455,000 square feet of gross leasable area. The
property was built in 1981 and has undergone significant renovations
in 2004 and 2008. Oakville Place is 100% occupied and is anchored by
The Bay and Sears. Other major retail tenants at Oakville Place
include American Eagle, H&M, Jacob, Birks, Roots, Laura, Mexx and
Shoppers Drug Mart. At September 30, 2012, the property's Commercial
Retail Units ("CRU") generated average sales of approximately $493
per square foot. Approximately 94% of the gross rent is generated by
national and regional tenants. RioCan will purchase a 100% interest
in the property at a purchase price of $259 million. In connection
with the purchase, RioCan will assume the in place first mortgage
financing of $112 million which carries an interest rate of 4.7%,
maturing in 2021.  
Burlington Mall, located near the QEW at Guelph Line and Fairview
Street, is a 782,000 square foot enclosed mall. The property will be
owned on a 50/50 joint venture basis with the KingSett Canadian Real
Estate Investment Fund. Burlington Mall was constructed in 1968 and
has undergone significant renovations in 2001, 2004 and 2006. The
property is 99% occupied and is anchored by Target (opening Spring
2013), Canadian Tire and Winners/HomeSense, and is shadow anchored by
The Bay. Other major tenants include Dollarama, Old Navy, Shoppers
Drug Mart and SportChek. At September 30, 2012, the property's CRU
generated average sales of approximately $386 per square foot.
Approximately 87% of the gross rent is generated by national and
regional tenants. RioCan will provide asset and property management
functions for the property. The purchase price for the property is
$206 million at 100% ($103 million at RioCan's interest).In
connection with the purchase, the parties will assume the in place
first mortgage financing of $105 million ($52.5 million at RioCan's
interest) which carries an interest rate of 3.8%, maturing in 2016. 
This acquisition is in conjunction with, and subject to the
successful completion of, the amended arrangement (the "Amended
Arrangement") between H&R REIT and Primaris announced earlier today.
Pursuant to the Amended Arrangement, KingSett Capital and certain
other parties including RioCan have agreed to purchase certain
properties from Primaris. The previously announced property
acquisition agreements with KingSett Capital have been terminated
and, as a result, the previously announced financing agreements with
The Toronto-Dominion Bank for an aggregate amount of $635 million,
which would have been used to finance said transaction have also been
About RioCan  
RioCan is Canada's largest real estate investment trust with a total
capitalization of approximately $13.9 billion as at September 30,
2012. It owns and manages Canada's largest portfolio of shopping
centres with ownership interests in a portfolio of 338 retail
properties containing more than 80 million square feet, including 49
grocery anchored and new format retail centres containing 12.4
million square feet in the United States through various joint
venture arrangements as at September 30, 2012. RioCan's portfolio
also includes 10 properties under development in Canada. For further
information, please refer to RioCan's website at 
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, 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 latest financial statements and
management's discussion and analysis for the three and nine months
ending September 30, 2012, 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 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
The Income Tax Act (Canada) (the "Act") contains legislation
affecting the tax treatment of publicly traded trusts (the "SIFT
Legislation"). 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
RioCan Real Estate Investment Trust
Edward Sonshine O.Ont., Q.C.
Chief Executive Officer
(416) 866-3018
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