RioCan Real Estate Investment Trust Announces 16% Growth in Operating FFO in 2012

RioCan Real Estate Investment Trust Announces 16% Growth in Operating FFO in 
2012 
TORONTO, ONTARIO -- (Marketwire) -- 02/14/13 -- RioCan Real Estate
Investment Trust ("RioCan") (TSX:REI.UN) -  
HIGHLIGHTS for 2012:  
All figures in Canadian dollars unless otherwise noted. RioCan's
results are prepared in accordance with International Financial
Reporting Standards ("IFRS").  


 
--  RioCan's Operating FFO increased by 16% to $ 116 million for the three
    months ending December 31, 2012 ("Fourth Quarter") compared to $ 100
    million in the fourth quarter of 2011. On a per unit basis, Operating
    FFO increased 8% to $ 0.39 per unit from $ 0.36 per unit in the same
    period of 2011;
    
    
--  RioCan's Operating FFO increased by 16% to $ 440 million for the year
    ended December 31, 2012 compared to $ 380 million for the same period in
    2011. On a per unit basis, Operating FFO increased 6% to $ 1.52 per unit
    from $ 1.43 per unit for the same period in 2011; 
    
    
--  Overall occupancy was 97.4% at December 31, 2012, compared to 97.3% at
    September 30, 2012 and 97.6% at December 31, 2011; 
    
    
--  RioCan renewed 586,000 square feet in the Canadian portfolio during the
    Fourth Quarter at an average rent increase of $3.32 per square foot,
    representing an increase of 18.4%, compared to 14.5% for the same period
    in 2011; 
    
    
--  RioCan renewed 3.5 million square feet in the Canadian portfolio during
    the twelve months ended December 31, 2012 at an average rent increase of
    $2.19 per square foot, representing an increase of 13.2%, compared to
    11.0% for the same period in 2011; 
    
    
--  During the Fourth Quarter, RioCan acquired interests in 31 income
    properties in Canada and the US aggregating to 2.0 million square feet
    at an purchase price of approximately $378 million at RioCan's interest
    at a weighted average capitalization rate of 6.4%; 
    
    
--  For the year, RioCan acquired interests in 43 income properties in
    Canada and the US aggregating to 3.5 million square feet at an purchase
    price of approximately $926 million at RioCan's interest at a weighted
    average capitalization rate of 6.1%; 
    
    
--  In 2012, RioCan raised $531 million of equity capit
al through 2
    offerings that totalled $423 million and $108 million of equity issued
    through RioCan's distribution reinvestment plan. RioCan also issued $575
    million of unsecured debentures at an effective average interest rate of
    3.77%; 
    
    
--  During the Fourth Quarter, RioCan dissolved its joint venture with Cedar
    Realty Trust, Inc. ("Cedar"). As part of the dissolution, RioCan
    purchased Cedar's 20% interest in 21 properties owned by the
    RioCan/Cedar joint venture for US$120 million, and the assumption of
    Cedar's share of the existing in-place mortgage financing of US$54
    million. In turn, RioCan conveyed its 80% interest in Franklin Village
    to Cedar for US$60 million (less debt assumed by Cedar from RioCan in
    the amount of US$35 million). RioCan has established a US property
    management platform based in Mount Laurel, New Jersey (suburban
    Philadelphia) and effective February 1, 2013, RioCan commenced property
    management of the northeastern US portfolio; 
    
    
--  On February 7, 2013 RioCan sold its entire position of 9.4 million
    shares of Cedar for total proceeds of approximately US$48 million; 
    
    
--  RioCan has entered into a conditional purchase and sale agreement with
    Primaris REIT to acquire a 50% managing interest in Burlington Mall and
    a 100% interest in Oakville Place at an aggregate purchase price of $362
    million; 
    
    
--  RioCan is currently in the process of marketing for sale fourteen non-
    core Canadian properties located in secondary markets. The fair value of
    these properties as at December 31, 2012 calculated in accordance with
    IFRS is in excess of $645 million. The debt associated with these
    properties is approximately $230 million; and 
    
    
--  Beginning January 2013, RioCan increased its monthly distribution by 2%
    to $0.1175 per unit ($1.41 per unit annualized from $1.38 per unit). 

 
RioCan Real Estate Investment Trust ("RioCan") today announced its
financial results for the year ended December 31, 2012. 
"We are very pleased with the performance of the portfolio through
what was, as anticipated, a challenging year. We are excited about
the opportunities for continued growth in the portfolio on multiple
fronts as we enter RioCan's 20th year as a publicly traded REIT,"
said Edward Sonshine, Chief Executive Officer of RioCan. "Including
RioCan's $89 million of development property acquisitions, RioCan
completed more than $1 billion of total acquisitions in 2012.
RioCan's transformational growth over the past few years, the
improved stability of our cashflow stream, and management's
confidence in the future growth of RioCan were all contributing
factors in the decision to increase RioCan's distribution in 2013." 
Financial Highlights 
Operating Funds from operations ("Operating FFO") 
RioCan's Operating FFO represents the recurring cash flow generated
through the ownership and management of income properties. This is
the basis for determining RioCan's Adjusted Funds From Operations. In
contrast to Funds From Operations ("FFO"), Operating FFO also
excludes transactional gains from the sale of real estate as well as
the expenditures related to development activities that in
management's view forms part of the cost of its development projects,
and are no longer capitalized under IFRS.  
Operating FFO for the Fourth Quarter was $ 116 million ($ 0.39 per
unit) compared to $ 100 million ($ 0.36 per unit) in the fourth
quarter of 2011. The primary reasons for this increase were: a $20
million increase in net operating income ("NOI"), which was due to
acquisitions, lease cancelation fees of $4 million, with same
property growth of 0.2% in Canada and 1.9% in the US, and the
completion of greenfield developments. Operating FFO also benefited
from lower interest expenses of $1 million and lower general and
administrative expenses of $1 million in the Fourth Quarter. These
increases to Operating FFO were partially offset by reduced other
revenue of $7 million and increased preferred unit distributions of
$1 million during the Fourth Quarter.  
Operating FFO for the year ended December 31, 2012 was $ 440 million
($ 1.52 per unit) compared to $ 380 million ($ 1.43 per unit) in
2011. The primary reasons for this increase were: a $91 million
increase in net operating income ("NOI"), which was due to higher
lease cancelation fees of $12 million, along with same property
growth of 1.0% in Canada and 0.5% in the US, and the completion of
greenfield developments. These increases to Operating FFO were
partially offset by increased interest expense of $6 million, which
included $2 million of costs associated with the early repayment of
$90 million of secured debt in the second quarter (which carried an
interest rate of 5.9%), increased preferred unit distributions of $7
million, higher general and administrative expenses of $3 million,
and lower fees and other income of $13 million during 2012.  
Net Earnings 
RioCan reported net earnings attributable to unitholders for the
Fourth Quarter of $468 million ($1.55 per common unit) compared to
$241 million ($0.87 per common unit) for the same period in 2011, an
increase of $227 million ($0.68 on a per c
ommon unit basis).
Excluding the impact of taxes and fair value gains on investment
properties, net earnings for the Fourth Quarter were $123 million as
compared to $98 million during the same period in 2011. RioCan's
increase in net earnings was due to an increase in the fair value of
its investment properties as well as the same contributing factors as
those which impacted RioCan's Operating FFO in the Fourth Quarter.
Fair value gains for the Fourth Quarter were $348 million, a $202
million increase over the same period in 2011, due to increased
property level NOI as well as a decline in capitalization rates,
which decreased by 12 bps, on average, as compared to September 30,
2012.  
RioCan reported net earnings attributable to unitholders for the year
ended December 31, 2012 of $1.34 billion ($4.59 per common unit)
compared to $873 million ($3.26 per common unit) for the same period
in 2011, an increase of $471 million ($1.33 on a per common unit
basis). Excluding the impact of taxes and fair value gains on
investment properties, net earnings for the year ended December 31,
2012 were $446 million as compared to $351 million in the same period
of 2011. RioCan's increase in net earnings was due to an increase in
the fair value of its investment properties as well as the same
contributing factors as those which impacted RioCan's Operating FFO
for the year. RioCan's fair value gains on investment properties were
$913 million for the year ended December 31, 2012 as compared to $533
million in 2011, an increase of $380 million due to increased
property level NOI and a decline in capitalization rates, which
decreased 52 bps on average during the year. 
Same Store and Same Property NOI 
Same store and same property NOI increased by 0.2% in the Fourth
Quarter in Canada, compared to the same period in 2011, due largely
to new leasing which favourably impacted NOI by $3.3 million, renewal
and fixed rent steps which increased NOI by $1.6 million, and the
leasing of space vacated due to bankruptcy or lease cancellations,
which increased NOI by $2.3 million. The increases to same store and
same property NOI were partially offset by the impact of vacancy
caused by normal course turnover of $4.3 million, unanticipated
vacancies that reduced NOI by $1.2 million, and $0.4 million in lower
NOI from lease buyouts that have occurred in the last year.  
Same store and same property NOI for year ended December 31, 2012 in
Canada increased by 0.9% and 1.0% respectively, compared to 2011, due
largely to new leasing which favourably impacted NOI by $15.0
million, renewal and fixed rent steps which increased NOI by $6.0
million, leasing of space vacated due to bankruptcy or lease
cancellations which increased NOI by $5.7 million. The increases to
same store and same property NOI were partially offset by the impact
of vacancy caused by normal course turnover of $14.0 million,
unanticipated vacancies that reduced NOI by $5.4 million and $1.5
million of lower NOI from lease buyouts that have occurred in the
last year.  
Sequentially, same store and same property NOI in Canada increased by
1.9% and 1.7% respectively for the Fourth Quarter compared to the
third quarter of 2012. This was primarily due to an increase in NOI
of $1.9 million due to new, renewal leasing and fixed rent steps
which positively impacted NOI by $0.5 million, and leasing of space
vacated due to bankruptcy or lease cancellations, which increased NOI
by $0.4 million. The increases to same store and same property NOI
were partially offset by reduced NOI due to vacancies caused by
normal course turnover of $1.4 million. 
On a US dollar basis, the US same store and same property NOI during
the Fourth Quarter increased by 1.9% when compared to the same period
in 2011. On the same basis, same property NOI for the year ended
December 31, 2012 increased by 0.5% when compared to the same period
in 2011 due to new and renewal leasing and fixed rent steps. Same
store and same property NOI increased by 0.2% for the Fourth Quarter
compared to the third quarter of 2012 primarily due to increased NOI
as a result of new leasing, renewal rent increases and rent steps. 
Portfolio Stability 
As at December 31, 2012 : 


 
--  RioCan's overall occupancy rate was stable at 97.4% compared to
    September 30, 2012 at 97.3%, and relatively flat compared to 97.6% as at
    December 31, 2011;
    
    
--  RioCan's Canadian occupancy rate declined to 97.2%, from 97.5% at
    December 31, 2011; 
    
    
--  RioCan's US occupancy rate was flat compared to December 31, 2011 at
    98.1%; 
    
    
--  The portfolio economic occupancy rate represents the occupied net
    leaseable area for which tenants are paying rent. The portfolio economic
    occupancy rate was approximately 95.9% compared to 96.6% at December 31,
    2011. There is approximately 711,000 square feet for which lease
    payments are scheduled to start at future dates. The annualized rental
    revenue for this space is expected to be $15 million, with 92% of this
    revenue expected to begin paying rent during the next three quarters;
    
    
--  In the Fourth Quarter, RioCan's Canadian retention ratio was 94.3% of
    expiring leases, compared to a retention ratio of approximately 84.8% in
    the third quarter of 2012. For the year ended December 31, 2012,
    RioCan's retention ratio was 89.7% of expiring leases; 
    
    
--  RioCan renewed 586,000 square feet in the Canadian portfolio during the
    Fourth Quarter at an average rent increase of $3.32 per square foot,
    representing an increase of 18.4%, compared to 14.5% for the same period
    in 2011. RioCan renewed 3.5 million square feet in the Canadian
    portfolio during the twelve months ended December 31, 2012 at an average
    rent increase of $2.19 per square foot, representing an increase of
    13.2%, compared to 11.0% for the same period in 2011; 
    
    
--  RioCan renewed approximately 29,000 square feet of space in the US
    portfolio during the Fourth Quarter, at an average rent increase of
    $1.21 per square foot, representing an increase of 5.1%. The retention
    ratio for expiring leases was 87.6%. RioCan renewed approximately
    361,000 square feet of space in the US portfolio for the twelve months
    ended December 31, 2012, at an average rent increase of $1.11 per square
    foot, representing an increase of 6.8% with a retention rate of 85.9%; 
    
    
--  During the Fourth Quarter, at RioCan's interest, new vacancies excluding
    lease buyouts were 166,000 square feet, (166,000 square feet in the
    fourth quarter of 2011). During the quarter 196,000 square feet of
    vacant space was leased to new tenants;
    
    
--  For the twelve months ended, at RioCan's interest, new vacancies were 1
    million square feet (779,000 square feet in the same period of 2011).
    During the twelve months, approximately 669,000 square feet of vacant
    space was leased to new tenants;
    
    
--  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 67.5% of RioCan's
    Canadian annualized rental revenue (65.9% at Dec. 31, 2011);
    
    
--  National and anchor tenants represented about 86.1% of RioCan's total
 
    annualized rental revenue at December 31, 2012, which increased from
    85.7% at December 31, 2011; and
    
    
--  No individual tenant comprised more than 4.3% of annualized rental
    revenue. At December 31, 2012, Walmart was RioCan's largest tenant. 

 
Portfolio Activity and Acquisition Pipeline 
During the Fourth Quarter, RioCan completed 31 acquisitions of
interests in income producing properties (six in Canada and 25 in the
US) at an aggregate purchase price of $378 million, at RioCan's
interest (calculated taking into account the US dollar transactions
at an average exchange rate of CAN$1 = US$1.013), with a weighted
average capitalization rate of 6.4%.  
For the year, RioCan completed 43 acquisitions of interests in income
producing properties (14 in Canada and 29 in the US) at an aggregate
purchase price of $926 million, at RioCan's interest (calculated
taking into account the US dollar transactions at an average exchange
rate of CAN$1 = US$1.007), with a weighted 
average capitalization
rate of 6.1%. 
In addition, RioCan has two income producing properties in Canada and
the US with an aggregate purchase price of $61 million (calculated
taking into account the US dollar transactions at an exchange rate of
par) under contract where conditions have been waived pursuant to
purchase and sale agreements that are expected to be completed during
the first and second quarters of 2013.  
Acquisitions Completed in the Fourth Quarter 
Canada  


 
--  On October 1, 2012, RioCan completed the acquisition of the remaining
    50% interest in the freehold interest of Westgate Shopping Centre at a
    purchase price of $9 million. Westgate Shopping Centre is a 165,842
    square foot non-grocery anchored retail shopping centre located in
    Ottawa, Ontario. RioCan now has a 100% interest in the property. 
    
    
--  On November 1, 2012, RioCan and Tanger Outlet Centers, Inc. ("Tanger")
    completed the acquisition of Les Factoreries St. Sauveur on a 50/50
    basis at a purchase price of $54 million and at a capitalization rate of
    5.3%. RioCan provides development and property management services and
    Tanger provides leasing and marketing services. Les Factoreries St.
    Sauveur is located approximately 60 km northwest of Montreal, Quebec
    directly off of Highway 15 in the town of St. Sauveur, Quebec. The
    property was built in 1980, and expanded in 2006, and is approximately
    116,000 square feet with the potential to expand the property on the
    adjacent 1.1 acres of land which will also be acquired if certain
    conditions are met. This outlet centre features many national brands
    such as, Nike, Tommy Hilfiger Outlet, Reebok, Guess and Parasuco. As
    part of the acquisition, the joint venture assumed the aggregate in
    place financing in the amount of $19 million with a weighted average
    interest rate of 5.7% and maturities in 2015 and 2020. 
    
    
--  On November 2, 2012, RioCan and Tanger completed the acquisition of
    Bromont Outlet Mall on a 50/50 basis at a purchase price of $40.6
    million and at a capitalization rate of 6.9%. RioCan provides
    development and property management services and Tanger provides leasing
    and marketing services. Bromont Outlet Mall is located approximately 85
    km east of Montreal, Quebec near the eastern townships directly off of
    Highway 10 in the town of Bromont, Quebec. The property was built in
    2004 and expanded through 2011, and is approximately 162,000 square feet
    with the potential to expand the property to approximately 235,000
    square feet. This outlet centre features many national brands such as
    Point Zero, Tommy Hilfiger Outlet, Puma, Mexx, and Urban Planet. 
    
    
--  On November 5, 2012, RioCan completed the acquisition of the remaining
    25% interest in Elgin Mills Crossing in Richmond Hill, Ontario. The
    acquisition increases RioCan's ownership of this property to 100%. Elgin
    Mills Crossing is a 425,157 square foot new format retail shopping
    centre (320,328 square feet owned by RioCan; the remainder owned by a
    tenant) anchored by Costco, Michael's and Staples with Home Depot as a
    shadow anchor. The purchase price for RioCan's additional interest was
    $20 million, which equates to a capitalization rate of 5.8%. In
    connection with the purchase, RioCan has assumed a proportionate share
    of the existing mortgage debt that is in place for this property,
    representing an additional principal amount of $11 million that carries
    an interest rate of 6.1% and matures in October 2018. RioCan benefited
    from a mark to market adjustment of $1 million in consideration of the
    above market interest rate. 
    
    
--  On December 10, 2012, RioCan completed the acquisition of a 100%
    interest in 649 Queen Street West, a 14,200 square foot single-tenant
    property occupied by CB2, the urban version of Crate & Barrel (there is
    an additional 6,450 square feet of basement space). The purchase price
    for the property was $14 million, which equates to a capitalization rate
    of 4.89% and was acquired free and clear of financing. 
    
    
--  On November 9, 2012 RioCan acquired a 27.6% interest in Shoppers City
    East Shopping Centre, in Ottawa, Ontario. Shoppers City East is a
    148,100 square foot non grocery anchored retail shopping centre anchored
    by Giant Tiger. Other notable tenants include Staples and Shoppers Drug
    Mart. The site is 19.4 acres. RioCan's interest was acquired at a
    purchase price of $8 million, which equates to a capitalization rate of
    6.5%. The property was acquired free and clear of financing and
    represents an excellent redevelopment opportunity.  

 
United States 


 
--  On October 10, 2012, and in accordance with the terms of the dissolution
    of the Cedar RioCan/ Realty Trust, Inc. ("Cedar") joint venture, Cedar
    conveyed its 20% interest in 21 properties owned by the RioCan/Cedar
    joint venture to RioCan for a gross purchase price of US$119.5 million,
    representing a capitalization rate of 6.5%. RioCan has assumed Cedar's
    share of the existing in-place mortgage financing of US$54.4 million in
    respect of such 21 properties, which carries a weighted average interest
    rate of 5.2% and a weighted average term to maturity of 5.2 years.
    RioCan benefited from a mark to market adjustment of $750,000 in
    consideration of the above market interest rate. 

 
In turn, RioCan conveyed its 80% interest in Franklin Village
(located in Franklin, Massachusetts) to Cedar for a gross sale price
of US$60.1 million (less debt assumed by Cedar from RioCan in the
amount of US$34.7 million). On October, 31, 2012, RioCan served Cedar
with a notice of cancellation under the property management
agreement, and effective February 1, 2013 RioCan commenced property
management of the northeastern US portfolio. 


 
--  On October 18, 2012, RioCan completed the acquisition of an 85% non-
    managing interest in Arbor Park Shopping Centre with Dunhill Partners,
    Inc. ("Dunhill") for a purchase price of US$26 million at 100% (US$22
    million at RioCan's interest) which equates to a capitalization rate of
    6.7%. Dunhill, who previously owned a 100% managing interest in the
    property, has retained a 15% interest and will manage the property on
    behalf of the joint venture. Arbor Park is a 139,700 square foot new
    format retail centre located near the downtown core of San Antonio,
    Texas. The property, which is currently 98% occupied, was built in 1998
    and has a weighted average remaining lease term of 4.7 years. The
    property is anchored by Sprouts Grocery Store, Ross Dress for Less,
    Office Max and Michaels. Other notable tenants include Dress Barn,
    GameStop and Payless Shoesource. As part of the acquisition, the joint
    venture assumed the existing mortgage in the amount of US$17 million
    (US$14 million at RioCan's interest) with an interest rate of 4.6% and
    maturity date of July 6, 2016. 
    
    
--  On October 22, 2012, RioCan acquired a 100% interest in Deptford
    Landing, a 517,057 square foot new format retail centre located in
    Deptford Township, New Jersey. The purchase price for the property was
    US$65 million, which equates to a capitalization rate of 6.6%. As part
    of the acquisition, RioCan assumed the existing mortgage in the amount
    of US$33 million with an interest rate of 6.1% and maturity date of
    January 1, 2021. RioCan benefited from a mark to market adjustment of
    $4.2 million in consideration of the above market interest rate. 
    
    
--  On November 21, 2012, RioCan acquired an 85% non-managing interest in
    Louetta Central for a purchase price of US$31 million at 100% (US$26
    million at RioCan's interest) which equates to a capitalization rate of
    6.9%. Dunhill acquired the remaining 15% interest and manages the
    property on behalf of the joint venture. Louetta Central is a 179,995
    square foot non-grocery anchored retail centre located in Spring, Texas.
    The property, which is currently 100% occupied, has a weighted average
    remaining lease term of 6.4 years and is anchored by Kohl's, Ross Dress
    for Less and Michaels. Financing of US$17 million (US$14 million at
    RioCan's interest) was procured on closing at an interest rate of 3.7%
    and a maturity date of November 2022. 
    
    
--  On December 28, 2012 RioCan acquired a 100% interest in The Commons for
    a purchase price of US$52 million which equates to a capitalization rate
    of 7.0%. The Commons is a 277,300 square foot new format retail centre
    located in Martinsburg, West Virginia. The property, which is currently
    97% occupied, was built in 2009 and has a weighted average remaining
    lease term of 6.4 years. Notable tenants include Dick's Sporting Goods,
    Best Buy and TJ Maxx. The property was acquired free and clear of
    financing. 

 
Acquisi
tions Under Contract (Firm) 
RioCan currently has two income properties in Canada and the US under
contract where conditions have been waived that, if completed,
represent $61 million of acquisitions at RioCan's interest, at a
weighted average capitalization rate of 5.5%.  
Canada  
In Canada, RioCan has waived conditions pursuant to a purchase and
sale agreement with respect to one property as follows:  
- The acquisition of a 100% interest in 1860 Bayview Avenue in
Toronto, Ontario. 1860 Bayview Avenue is a development site located
at the northwest corner of Bayview Avenue and Broadway Avenue in the
Leaside area of Toronto. KingSett and Trinity Development Group are
currently developing a grocery-anchored centre on the site, and
RioCan will be acquiring the completed site on a forward purchase
basis at an expected purchase price of $58 million, at a
capitalization rate of 5.4%. Once completed, the centre will consist
of approximately 74,220 square feet of retail space and will be
anchored by a 50,220 square foot Whole Foods. This acquisition is
expected to close during the second quarter of 2013. 
United States 
In the US, RioCan has waived conditions pursuant to a purchase and
sale agreement with respect to one property as follows:  
- A 100% interest in a 24,000 square foot unit at Monroe Marketplace
in Selinsgrove, Pennsylvania to be occupied by TJ Maxx. Acquired by
RioCan in 2010 (and, with respect to Cedar's 20% interest, 2012),
Monroe Marketplace is a 340,000 square foot power centre anchored by
Giant Foods and Kohl's. The purchase price for the 24,000 square foot
addition is US$2.8 million which equates to a capitalization rate of
7.64% and will be acquired free and clear of financing. 
Acquisitions Under Contract (Conditional) 
RioCan has $397 million of income property acquisitions (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. 
KingSett Capital Led Consortium's bid for Primaris Retail REIT 
Included in the amount above is the 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, which was announced by RioCan on
February 5, 2013. The aggregate gross purchase price for these two
properties is approximately $362 million (at RioCan's interest) and
the properties will be acquired at a capitalization rate estimated to
be approximately 5.0% to 5.25%. In connection with the purchase,
RioCan will assume, at its interest, the in place 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 facilities. 
These properties will add to RioCan's growing enclosed mall portfolio
that includes such properties as Georgian Mall, RioCan Yonge Eglinton
Centre, Lawrence Square, 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.  
Also included in the conditional acquisitions amount is the
acquisition of a 100% interest in South Cambridge Centre in
Cambridge, Ontario, from H&R REIT at a purchase price of $35 million,
which equates to an estimated capitalization rate of approximately
6.75% to 7.0%. This purchase is also conditional on the successful
completion of the H&R REIT and KingSett Capital led consortium
acquisition of Primaris. South Cambridge Centre is a 190,131 square
foot grocery anchored shopping centre. The property is 100% occupied
and is anchored by a Zehrs grocery store (Loblaws). Other major
tenants at the property include the Liquor Control Board of Ontario,
The Beer Store and Home Hardware. In connection with the purchase,
RioCan will assume the in place mortgage financing of $19.7 million
which carries an interest rate of 5.5% maturing in June 2016. 
The purchases of Burlington Mall, Oakville Place and South Cambridge
Centre are conditional on the successful completion of the H&R REIT
and KingSett Capital led consortium acquisition of Primaris. On
February 5, 2013, H&R REIT and H&R Finance Trust (collectively "H&R")
and Primaris and the KingSett Capital led consortium announced that
H&R and Primaris, together with PRR Investments Inc., have amended
their previously announced arrangement agreement (dated January 16,
2013). The transaction is expected to be completed in April 2013. 
Acquisition Pipeline 
RioCan is currently in negotiations regarding property acquisitions
in Canada and the US that, if completed, represent approximately $68
million of additional acquisitions at RioCan's interest (calculated
taking into account the US dollar transactions at an exchange rate of
par). These transactions are in various stages of negotiations and
while efforts will be made to complete these negotiations, no
assurance can be given. 
Disposition Pipeline  
RioCan is currently in the process of selling fourteen non-core
properties in Canada. The properties are located in largely in
secondary markets. The fair value of these properties as at December
31, 2012 calculated in accordance with IFRS is in excess of $645
million. The debt associated with these properties is approximately
$230 million. RioCan is under no obligation to proceed with such
proposed dispositions which, if completed, will be done to facilitate
its objective of paring its portfolio and focusing on major markets. 
On February 7, 2013, RioCan sold all 9.4 million shares of Cedar for
total proceeds of approximately US$48 million. As a result of the
sale of these shares held, RioCan no longer has any equity position
in Cedar. 
Liquidity and Capital 
The 12 month rolling EBITDA interest coverage for RioCan at December
31, 2012 was 2.72x (2.82x for the Fourth Quarter) compared to 2.46x
at December 31, 2011. As at December 31, 2012, RioCan's indebtedness
net of cash was 43.5% of total assets a decrease of 290 bps from year
end (46.4%). RioCan's Net Debt to Adjusted EBITDA at December 31,
2012 was 7.28x up slightly from 7.26x at December 31, 2011. RioCan's
Net Operating Debt to Adjusted Operating EBITDA, which excludes debt
related to properties under development was 7.08x at December 31,
2012 compared to 7.00x at December 2011. As part of RioCan's capital
management strategy, it is RioCan's objective to strengthen its
balance sheet as well as improve its coverage ratios over time.  
RioCan has the continued flexibility to generate additional funds in
2013 through financing maturing loan balances as well as repay
additional balloon balances to increase the size of RioCan's pool of
unencumbered assets. As at December 31, 2012, RioCan had 79
properties (including 13 unencumbered properties under development)
that are unencumbered with a fair value of approximately $1.3
billion.  
Mortgage Financing 
Canada  
In 2012, RioCan obtained approximately $449 million of fixed-rate
mortgage financing at a weighted average interest rate of 3.1% with a
weighted average term to maturity of about 5.1 years.  
US  
In 2012, RioCan obtained approximately $92 million of fixed-rate
mortgage financing at a weighted average interest rate of 4.3% with a
weighted average term to maturity of about 6.8 years.  
Unsecured Debentures  
As at December 31, 2012, RioCan had eight series of Debentures
outstanding totalling $1.3 billion (December 31, 2011 - six series
totalling $822 million). During the Fourth Quarter RioCan issued $250
million Series R Senior Unsecured Debentures at a coupon rate of
3.716% for a nine year term ending in 2021. 
Lines of Credit  
RioCan has four revolving lines of credit in place with three
Canadian chartered banks, having an aggregate capacity of $429
million. At December 31, 2012, $73 million has been drawn as a cash
advance and $25 million has been drawn as letters of credit, leaving
$330 million available for cash draws under the lines of credit.  
Development Portfolio 
As at December 31, 2012, RioCan had ownership interests in 11
greenfield development projects that will, upon completion, comprise
about 9.9 million square feet (4.9 million square feet at RioCan's
interest). In addition to its development projects, RioCan continues
its urban intensification activities, primar
ily in the Toronto,
Ontario market.  
During the three months ended December 31, 2012, RioCan acquired an
interest in the Globe and Mail development site in Toronto, Ontario,
at a purchase price of $54 million, at RioCan's interest.  
The acquisition has established the basis for a joint venture (the
"Downtown West JV") between RioCan, Allied and Diamond, with each of
RioCan and Allied having an undivided 40% interest and Diamond having
an undivided 20% interest. RioCan has a beneficial ownership in the
Downtown West JV of 43.9% including its 19.3% participation in
Diamond's Whitecastle New Urban Fund 2. The joint-venture partners
intend to redevelop the Property as a mixed-use retail, office and
residential complex with approximately 2.3 million square feet of
gross floor area.  
In February 2013, the three partners included in the Downtown West JV
entered into a conditional agreement to purchase an additional 1.2
acres adjacent to the 6.47 acres of land previously acquired. This
land is zoned for 450,000 square feet of commercial space, will
provide the partners the opportunity to develop the combined Globe
and Mail parcels beyond the 2.3 million square feet planned for the
first parcel (6.47 acres). This second acquisition is expected to
close in the first quarter of 2013.  
For the year ended December 31, 2012, RioCan acquired interests in
four development sites in Toronto, Ontario, at a purchase price of
$89 million, at RioCan's interest. Additionally, RioCan completed
acquisitions of excess land at a purchase price of $6 million at
RioCan's interest in connection with the acquisitions of interests in
two income properties during the year ended December 31, 2012. In
total, acquisitions of development properties aggregated $95 million
in 2012.  
Subsequent to year end, RioCan acquired a 50% interest in Sage Hill
Crossing, a 34 acre greenfield development site that will be anchored
by Walmart and Loblaws located in Northwest Calgary, Alberta, at a
purchase price of $32 million ($16 million at RioCan's interest) with
KingSett. Once completed, the anticipated gross leasable area is
377,000 square feet of retail use. Development is expected to
commence during the summer of 2013.  
RioCan currently has 2 development sites in Canada under contract
where conditions have been waived that, if completed, represent $29
million of acquisitions at RioCan's interest. 
Additionally, RioCan has $51 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. 
RioCan's Audited Annual Consolidated Financial Statements,
Management's Discussion and Analysis and a Supplemental Information
Package for the three months and year ended December 31, 2012 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 Thursday, February 14, 2013 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 15, 2013. To access the replay, please dial
905-694-9451 or 1-800-408-3053 and enter passcode 9670929#.  
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/Investo
r-Relations/Events-Webcasts/default.aspxand 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 $14.3 billion as at December 31,
2012. It owns and manages Canada's largest portfolio of shopping
centres with ownership interests in a portfolio of 346 retail
properties containing more than 82 million square feet, including 52
grocery anchored and new format retail centres containing 13.6
million square feet in the United States through various joint
venture arrangements as at December 31, 2012. RioCan's portfolio also
includes 11 properties under development in Canada. 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 "Highlights for 2012", "Financial Highlights",
"Portfolio Stability", "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 December 31, 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 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"), 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; 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"). 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. 
Contacts:
RioCan Real Estate Investment Trust
Rags Davloor
Executive Vice President & CFO
(416) 642-3554
www.riocan.com
 
 
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