RioCan Real Estate Investment Trust Announces 17% Growth in Operating Funds From Operations in First Half of 2013

RioCan Real Estate Investment Trust Announces 17% Growth in Operating Funds 
From Operations in First Half of 2013 
TORONTO, ONTARIO -- (Marketwired) -- 07/31/13 -- RioCan Real Estate
Investment Trust (TSX:REI.UN) -  
HIGHLIGHTS for the three and six months ended June 30, 2013: 
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 14% to $121 million for the three
    months ending June 30, 2013 ("Second Quarter") compared to $106 million
    in the second quarter of 2012. On a per unit basis, Operating FFO
    increased 8% to $0.40 per unit from $0.37 per unit in the same period of
    2012; 
--  RioCan's Operating FFO increased by 17% to $245 million for the six
    months ended June 30, 2013 compared to $209 million for the same period
    in 2012. On a per unit basis, Operating FFO increased 9% to $0.81 per
    unit from $0.74 per unit for the same period in 2012; 
--  RioCan's concentration in Canada's six major markets has increased to
    72.1% from 67.5% at December 31, 2012; 
--  Overall occupancy was 96.7% at June 30, 2013, compared to 97.4% at June
    30, 2012. The decline in occupancy was largely due to five Zellers
    stores totalling 466,000 square feet that were returned to RioCan on
    April 1, 2013; 
--  RioCan renewed 956,000 square feet in the Canadian portfolio during the
    Second Quarter at an average rent increase of $2.14 per square foot,
    representing an increase of 12.0%, compared to 13.4% for the same period
    in 2012; 
--  RioCan renewed 1.8 million square feet in the Canadian portfolio during
    the six months ended June 30, 2013 at an average rent increase of $2.04
    per square foot, representing an increase of 12.5%, compared to 11.6%
    for the same period in 2012; 
--  During the Second Quarter, RioCan acquired interests in seven income
    properties in Canada and the US aggregating 1.1 million square feet at
    an aggregate purchase price of approximately $460 million at RioCan's
    interest at a weighted average capitalization rate of 5.2%; 
--  During the quarter RioCan sold four properties located in secondary
    markets aggregating 1.6 million square feet at a total sale price of
    $364 million; 
--  During the quarter, RioCan redeemed its $150 million Series M debentures
    that carried an interest rate of 5.65% and issued $200 million Series T
    ten year senior unsecured debentures at an interest rate of 3.725%; 
--  During the quarter, RioCan entered into an agreement to effectively
    dissolve its joint venture arrangement with Retail Properties of
    America, Inc. ("RPAI"). Under the terms of the dissolution, RPAI will
    convey its 20% managing interest in eight properties to RioCan. RioCan
    will, in turn, convey its 80% interest in the remaining five properties
    to RPAI. The transaction is expected to close on October 1, 2013; 
--  RioCan entered into agreements to effectively dissolve its joint venture
    agreements with Dunhill Partners,Inc. ("Dunhill") after the quarter end.
    Under the terms of the dissolution, RioCan will acquire Dunhill's
    interests in six properties at a total purchase price of $83.5 million,
    which equates to a capitalization rate of 6.4%. The transaction is
    expected to close in phases during the third and fourth quarters of
    2013; In addition to its office in the northeastern US, RioCan is in the
    process of establishing a second US office to be located in Dallas,
    Texas, and intends to assume the management duties for its Texas
    Portfolio; and 
--  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.

 
RioCan Real Estate Investment Trust ("RioCan") today announced its
financial results for the three and six months ended June 30, 2013. 
"I am very pleased with the strength of our results this past
quarter. We have been able to generate significant growth in our
funds from operations despite the drag on the portfolio from nine
vacated Zellers locations, which became vacant over the first half of
the year. This space is already 62% leased with 102% of the former
rental income in place to come back on stream over the next year. We
expect to see continued improvement in RioCan's cash flow into 2014
from our multiple growth drivers that include growth from development
completions, organic growth from within the portfolio and
intensification of our existing properties," said Edward Sonshine,
Chief Executive Officer of RioCan. "With a series of purchases in the
Toronto area, and sales in secondary markets such as Thunder Bay and
Moncton, we increased the percentage of RioCan's Canadian assets
situated in the six major markets of this country to over 72%. With
virtually all of our development projects being in Toronto and
Calgary, this percentage will continue to increase." 
Financial Highlights 
In millions except percentages and per unit values 


 
-------------------------------------------------------------------------
                               Three months ended        Six months ended
                                         June 30,                June 30,
-------------------------------------------------------------------------
                                                %                       %
                             2013    2012  change    2013    2012  change
-------------------------------------------------------------------------
Operating FFO                $121    $106     14%    $245    $209     17%
-------------------------------------------------------------------------
Operating FFO per Unit      $0.40   $0.37      8%   $0.81   $0.74      9%
-------------------------------------------------------------------------
----------------------------------------------------------------------------
                                        Three months ended  Six months ended
In $millions                                      June 30,          June 30,
----------------------------------------------------------------------------
                                             2013     2012     2013     2012
----------------------------------------------------------------------------
Net earnings attributable to common and                                     
 preferred unit holders                      $153     $409     $316     $751
----------------------------------------------------------------------------
Net earnings before taxes and fair value                                    
 adjustment                                   112      106      238      223
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                                     June 30,       June 30,
In $millions. As at                                      2013           2012
----------------------------------------------------------------------------
Total enterprise value (1)                             13,774         13,559
----------------------------------------------------------------------------
Total assets - at RioCan's interest(1)                 13,195         11,698
----------------------------------------------------------------------------
Debt(1) (mortgages and debentures payable - at          
                    
 RioCan's interest)                                     5,851          5,155
----------------------------------------------------------------------------
 
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 $121 million ($0.40 per
unit) compared to $106 million ($0.37 per unit) in the Second Quarter
of 2012. The primary reasons for this increase were: a $17 million
increase in net operating income ("NOI"), which was due to
acquisitions, same property growth of 0.4% in Canada and 1.4% in the
US, and the completion of greenfield developments. Operating FFO also
benefited from lower interest expense of $1 million in the Second
Quarter. These increases to Operating FFO were partially offset by
increased higher general and administrative expenses of $3 million
and lower fees and other income of $1 million during the Second
Quarter.  
Operating FFO for the six months ended June 30, 2013 was $245 million
($0.81 per unit) compared to $209 million ($0.74 per unit) in 2012.
The primary reasons for this increase were: a $35 million increase in
net operating income ("NOI"), as a result of acquisitions, higher
lease cancelation fees, same property growth of 0.3% in Canada and
the completion of greenfield developments, net of dispositions.
Operating FFO was also positively impacted by higher fees and other
income of $4 million. These increases to Operating FFO were partially
offset by increased general and administrative expenses of $4
million.  
Same Store and Same Property NOI 


 
----------------------------------------------------------------------------
                                Three months       Six months               
                                       ended            ended     Sequential
                               June 30, 2013    June 30, 2013        quarter
Canada                        year over year   year over year   over quarter
----------------------------------------------------------------------------
Same Store Growth                       0.6%             0.3%           1.3%
----------------------------------------------------------------------------
Same Property Growth                    0.4%             0.3%           1.1%
----------------------------------------------------------------------------
United States                                                               
----------------------------------------------------------------------------
Same Store & Property                                                       
 Growth                                 1.4%             0.9%           1.0%
----------------------------------------------------------------------------

 
Leasing and Operational Highlights: 


 
                  2013                    2012                    2011      
----------------------------------------------------------------------------
(thousands                                                                  
 of square                                                                  
 feet,                                                                      
 millions of  Second   First  Fourth   Third  Second   First  Fourth   Third
 dollars)    quarter quarter quarter quarter quarter quarter quarter quarter
----------------------------------------------------------------------------
Committed                                                                   
 occupancy     96.7%   97.0%   97.4%   97.3%   97.4%   96.9%   97.6%   97.5%
Economic                                                                    
 occupancy     95.4%   95.8%   95.9%   95.5%   95.5%   95.7%   96.6%   96.3%
NLA leased                                                                  
 but not                                                                    
 paying rent     640     615     711     855     871     542     466     541
Annualized                                                                  
 rental                                                                     
 impact       $15.00  $15.00  $15.00  $18.00  $18.00  $12.00  $11.00  $12.00
Retention                                                                   
 rate -                                                                     
 Canada        95.9%   68.3%   94.3%   84.8%   89.9%   91.2%   90.5%   88.9%
% increase                                                                  
 in average                                                                 
 net rent                                                                   
 per sq ft -                                                                
 Canada        12.0%   13.4%   18.4%   12.9%   13.4%   10.0%   14.5%    7.2%
Retention                                                                   
 rate - US     92.0%   98.8%   87.6%   96.3%   84.2%   83.1%   95.7%   89.9%
% increase                                                                  
 in average                                                                 
 net rent                                                                   
 per sq ft -                                                                
 US             4.3%    2.3%    5.1%    6.0%    7.3%    7.2%    8.9%    6.4%
Average in                                                                  
 place rent   $15.77  $15.77  $15.70  $15.85   15.33  $15.37  $15.14  $15.09
Same store                                                                  
 growth -                                                                   
 Canada         0.6%    0.1%    0.2%    0.0%    1.5%    1.5%    1.9%    1.3%
Same store                                                                  
 growth - US    1.4%    1.4%    1.9%  (0.3%)    1.3%  (0.6%)    1.3%    1.0%
----------------------------------------------------------------------------
----------------------------------------------------------------------------

 
Highlights: 


 
--  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 72.1% of RioCan's
    Canadian annualized rental revenue (67.5% at December 31, 2012). The
    increase in the past quarter was accomplished through a combination of
    the sale of certain assets in secondary markets and the acquisition of
    two large enclosed shopping centres in the Greater Toronto Area;
 
--  National and anchor tenants represented about 85.9% of RioCan's total
    annualized rental revenue at June 30, 2013, a slight increase compared
    to 85.8% at June 30, 2012; and
 
--  No individual tenant comprised more than 3.7% of annualized rental
    revenue. At June 30, 2013, Walmart was RioCan's largest revenue source.

 
Portfolio Activity and Acquisition Pipeline 
During the Second Quarter, RioCan completed seven acquisitions of
interests in income producing properties in Canada with a weighted
average capitalization rate of 5.2%.  
In addition to the interests in fourteen properties to be acquired in
the US as part of the effective dissolution of the joint venture
arrangements with RPAI and Dunhill, RioCan has one income property
under firm contract t
hat, if completed, will represent an acquisition
of $58 million at RioCan's interest. Conditions have been waived and
it is expected that this transaction will close during the third
quarter of 2013. Additionally, RioCan has five income property
acquisitions in Canada and the Unites States under conditional
contract for a purchase price of $108 million (at RioCan's interest)
where conditions have not yet been waived.  
Acquisitions Completed in the Second Quarter 
Canada  


 
--  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 458,000 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 purchased a 100%
    interest in the property at a purchase price of $259 million. In
    connection with the purchase, RioCan assumed the in place 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 is 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, 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 was $206 million at 100% ($103 million at RioCan's
    interest). In connection with the purchase, the parties assumed the in
    place mortgage financing of $105 million ($52.5 million at RioCan's
    interest) which carries an interest rate of 3.8%, maturing in 2016. 
--  South Cambridge Centre is a 190,000 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. RioCan purchased a 100% interest in the property at a purchase
    price of $35 million. In connection with the purchase, RioCan assumed
    the in place mortgage financing of $19.5 million which carries an
    interest rate of 5.5% maturing in June 2016.

 
The acquisition of Oakville Place, Burlington Mall and South
Cambridge Centre were part of the successful completion of the
amended arrangement between H&R REIT and Primaris.  


 
--  On May 1, 2013, RioCan acquired an additional 50% interest in March Road
    Shopping Centre in Ottawa, Ontario at a purchase price of $21 million,
    which equates to a capitalization rate of 5.3%. RioCan now holds a 100%
    interest in the property. March Road is a 109,000 square foot grocery
    anchored retail shopping centre anchored by Sobeys. In connection with
    the purchase, RioCan assumed the other 50% of the in place first
    mortgage financing of $11 million, which carries an interest rate of
    4.0%, maturing in September 2021. 
--  On May 3, 2013, RioCan acquired an additional 35.2% interest in Shoppers
    City East Shopping Centre in Ottawa, Ontario at purchase price of $10
    million, which equates to a capitalization rate of 5.6% and was acquired
    free and clear of financing. Combined with RioCan's initial acquisition
    of a 27.6% interest in the property in the fourth quarter of 2012,
    RioCan now holds a 62.8% interest in the property. Shoppers City East is
    a 148,000 square foot non grocery anchored retail shopping centre
    anchored by Giant Tiger. Other notable tenants include Staples and
    Shoppers Drug Mart. The site area is 19.4 acres and RioCan is
    considering redevelopment of the site. 
--  On June 6, 2013, RioCan acquired a 100% interest in Dufferin Plaza in
    Toronto, Ontario at a purchase price of $27 million, which equates to a
    capitalization rate of 5.4%. Dufferin Plaza is a 65,000 square
    foot unenclosed shopping centre on 3.8 acres located on Dufferin Street
    just north of Lawrence Avenue in Toronto. The shopping centre is
    tenanted by Staples, TD Bank and Swiss Chalet, among others. In
    connection with the purchase, RioCan assumed mortgage financing of $11
    million, which carries an interest rate of 5.5%, maturing in June 2017.

 
United States 


 
--  On June 3, 2013, RioCan acquired a 100% interest in two pads totaling
    4,000 square feet at Timber Creek Crossing in Dallas, Texas. The
    aggregate purchase price for the pads was US$5 million, which equates to
    a capitalization rate of 5.6%. In 2011, RioCan acquired an 80% interest
    in Timber Creek Crossing, a 470,354 square foot power centre anchored by
    Walmart, Sam's Club and JC Penny. The pads were acquired free and clear
    of financing and are triple net ground leases.

 
Acquisitions Completed subsequent to the Second Quarter 
Subsequent to the quarter end RioCan completed the acquisition of one
property in the US. 


 
--  First Colony Shopping Center located in California, Maryland is a 98,186
    square foot grocery anchored shopping centre. It is anchored by a Giant
    Supermarket and also includes tenants such as Michael's and Pier One and
    is shadow anchored by Target and Lowe's. The property was acquired at a
    purchase price of US$20 million which equates to a capitalization rate
    of 6.3%. The property was acquired free and clear of financing. The
    acquisition is the subject of a reverse 1031 transaction such that it
    will be held by an intermediary until such time as RioCan completes the
    disposition of assets to Retail Properties of America. 

 
Acquisitions Under Contract (Firm) 
In addition to RioCan's agreements with RPAI and Dunhill, RioCan
currently has one income property in Canada where conditions have
been waived as follows:  


 
--  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 acquire the site
    on a forward purchase basis in phases at an approximate 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 50,200 square foot Whole Foods. The initial
    acquisition is expected to close during the third quarter of 2013, with
    the remaining portions to be paid on an earn-out basis upon completion
    of the project.

 
Joint Venture Activities 
Retail Properties of America, Inc. (RPAI) 
During the quarter announced that it has entered into an agreement to
effectively dissol
ve its joint venture arrangement with RPAI. Since
2010, RioCan and RPAI have amassed a high quality portfolio of 13
properties in Dallas, Houston, Austin, San Antonio and Temple, Texas
that are owned on an 80/20 basis (80% owned by RioCan and 20% owned
by RPAI). Under the terms of the dissolution, RPAI will convey its
20% managing interest in eight properties to RioCan. RioCan will, in
turn, convey its 80% interest in the remaining five properties to
RPAI. The transaction is expected to close on October 1 2013.  
The gross purchase price for the 20% interest in the eight properties
to be acquired by RioCan is $96.6 million, representing a
capitalization rate of 6.9%. Under the terms of the transaction,
RioCan will assume RPAI's share of the existing in place mortgage
financing on five of the properties aggregating $41.8 million, which
carries an average interest rate of 3.7% and has an average term to
maturity of 2.9 years. Three of the properties will be acquired free
and clear of financing. The properties to be acquired have an average
occupancy of 94.4%. 
The gross sale price for the 80% interest in the five properties
owned by RioCan is $102.8 million, representing a capitalization rate
of 6.8% and represents a total of approximately 600,000 square feet
(at a 100% interest). RPAI will assume RioCan's portion of the in
place mortgage financing of $54.3 million that carries a weighted
average interest rate of 4.8%.  
Dunhill Partners Inc. (Dunhill)  
RioCan has entered into an agreement to effectively dissolve its
joint venture agreement with Dunhill. Under the terms of the
dissolution, RioCan will acquire its partner's interests in six
properties for a total purchase price of US$83.5 million, which
equates to a capitalization rate of 6.4%. The six properties are;
Arbor Park, Las Colinas Village, Las Palmas Marketplace, Lincoln
Square, Louetta Central and Timber Creek Crossing.  
Under the terms of the transaction, RioCan will assume Dunhill's
share of the existing in place mortgage financing on the six
properties aggregating to approximately US$42 million, which carries
an average interest rate of 4.97% and has an average term to maturity
of 8.2 years. The properties to be acquired have an average occupancy
of 97.1%. The transaction is expected to close on a property by
property basis over the third and fourth quarters of 2013. 
Acquisitions Under Contract (Conditional) 
RioCan has $108 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. 
Acquisition Pipeline 
RioCan is currently in negotiations regarding property acquisitions
in Canada and the US that, if completed, represent approximately $145
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 
As a further means of raising and re-cycling capital, the Trust
intends to selectively sell assets as part of a process of actively
managing the portfolio and a means of increasing the portfolio
weighting to the urban markets in Canada. RioCan had dispositions of
$364 million during the quarter and dispositions of $374 million
during the six months ended June 30, 2013. Subsequent to the quarter
end, RioCan sold one property in Canada at a sale price of $4
million. RioCan has two property dispositions in Canada under firm
contract where conditions have been waived pursuant to a purchase and
sale agreement at a sale price of $13 million. Additionally, RioCan
has two property dispositions under conditional contract where
conditions have not yet been waived pursuant to purchase and sale
agreements at an aggregate sale price of $9 milli
on. RioCan is also
in the process of marketing for sale two other properties in Canada.  
Development Portfolio 
As at June 30, 2013, RioCan had ownership interests in 15 greenfield
development projects that will, upon completion, comprise about 11
million square feet (5.0 million square feet at RioCan's interest).
In addition to its development projects, RioCan continues its urban
intensification activities, primarily in the Toronto, Ontario market. 
Development acquisitions completed during the Second Quarter 
During the three months ended June 30, 2013, RioCan acquired
interests in three development properties at an aggregate purchase
price of $40 million, at RioCan's interest.  
Details of the current quarter development site acquisitions are as
follows. 


 
--  The April 8, 2013 acquisition of Calgary East Village, a 2.8 acre site
    located in the East Village area of downtown Calgary, Alberta. The site
    is one of downtown Calgary's few remaining privately owned full city
    blocks. The site was acquired on a 50/50 joint venture basis between
    RioCan and KingSett at a purchase price of $20 million ($10 million at
    RioCan's interest). The site was acquired free and clear of financing
    and RioCan will develop, lease and manage the property on behalf of the
    joint venture. The joint venture is contemplating the development of
    560,000 square feet of mixed use retail and office space, with
    development anticipated to commence in the spring of 2014. An executed
    Letter of Intent with Loblaws is in place to lease 100,000 square feet
    of space on the second floor of the development and expressions of
    interest have been received from several other potential tenants. 
 
--  The April 23, 2013 acquisition of West Kanata Lands, a 52.5 acre parcel
    of land located in Kanata, Ontario, approximately 20 kilometers west of
    Ottawa, Ontario. The site was acquired on a 50/50 joint venture basis
    between RioCan and Tanger at a purchase price of $29.4 million ($14.7
    million at RioCan's interest). The site was acquired free and clear of
    financing and RioCan acquired a managing interest in the development
    property. It is anticipated that the site will be developed into an
    estimated 347,000 square foot outlet centre, with development having
    commenced in the second quarter of 2013. 
 
--  The April 30, 2013 acquisition of phase II of the Downtown West (Globe &
    Mail lands) development site, a 1.2 acre piece of land adjacent to the
    6.47 acres acquired in Q4 2012, located west of Spadina Avenue, between
    Front Street West and Wellington Street West, in Toronto, Ontario.
    Consistent with the acquisition of phase I, phase II was acquired on a
    40/40/20 joint venture basis among RioCan, Allied and Diamond Corp. The
    purchase price was $37 million ($15 million at RioCan's interest). In
    connection with the purchase, the parties assumed vendor take-back
    mortgage financing of approximately $22 million ($9 million at RioCan's
    interest) at an interest rate of 2.0% (interest only) for a five year
    term. It is expected that the total site will be redeveloped into a
    mixed use retail, office and residential space. 

 
Development Property Acquisitions under Contract  
RioCan currently has one development site in Canada under firm
contract where conditions have been waived that, if completed,
represents an acquisition of $14 million at RioCan's interest. 


 
--  The acquisition of lands adjacent to Calaway Park, a 35 acre parcel of
    land located approximately 25 kilometers 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). The site would be acquired free and clear of financing and
    RioCan would acquire a managing interest in the development property.
    The site represents an opportunity for the RioCan/Tanger joint venture
    to enter the Calgary market with the intention to develop the land into
    an outlet centre of approximately 350,000 square feet. The acquisition
    is expected to close in the third quarter of 2013.

 
Additionally, RioCan has $6 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. 
Liquidity and Capital 


 
----------------------------------------------------------------------------
                                              In millions except percentages
Rolling 12 months ended June 30, 2013                   and coverage metrics
----------------------------------------------------------------------------
                                                     June 30,   December 31,
                                                         2013           2012
----------------------------------------------------------------------------
Interest Coverage - RioCan's interest                   2.81x          2.69x
----------------------------------------------------------------------------
Debt Service Coverage - RioCan's interest               2.08x          1.98x
----------------------------------------------------------------------------
Fixed Charge Coverage - RioCan's interest               1.06x          1.04x
----------------------------------------------------------------------------
Net debt to adjusted EBITDA - RioCan's                                      
 interest                                               7.41x          7.29x
----------------------------------------------------------------------------
Net operating debt to adjusted operating                                    
 EBITDA - RioCan's interest                             7.18x          7.09x
----------------------------------------------------------------------------
Unencumbered assets    
                                $1,863         $1,353
----------------------------------------------------------------------------
Unencumbered assets to unsecured debt                    128%           104%
----------------------------------------------------------------------------

 
Financing Highlights for the Second Quarter 
Canada 


 
--  RioCan obtained approximately $78 million of fixed-rate mortgage
    financing at a weighted average interest rate of 2.98% with a weighted
    average term to maturity of 4.8 years. 
--  During the Second Quarter RioCan redeemed the $150 million Series M
    debentures and issued $200 million Series T ten year senior unsecured
    debentures at an interest rate of 3.725%. 
--  RioCan has four revolving lines of credit in place with three Canadian
    chartered banks, having an aggregate capacity of $428 million. At June
    30, 2013, $14 million has been drawn against these facilities and $23
    million has been drawn as letters of credit, leaving $391 million
    available for cash draws under the lines of credit. 
--  As at June 30, 2013, RioCan's unencumbered asset pool was comprised of
    96 assets with an aggregate fair value of $1.9 billion. 

 
US 


 
--  RioCan did not obtain any US mortgage financing during the Second
    Quarter. 

 
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.
RioCan's NCIB will be made in accordance with the requirements of the
TSX. Under the NCIB, RioCan may acquire up to a maximum of 15,039,156
of its Units, or approximately 5% of its issued and outstanding Units
as of July 9, 2013, for cancellation over the next 12 months
commencing on or about August 3, 2013 until August 4, 2014 (as such
other time as RioCan completes its purchases or provides notice of
termination of such bid). The number of Units that can be purchased
pursuant to the bid is subject to a current daily maximum of 149,016
Units (equal to 25% of the average daily trading volume from January
1, 2013 through to June 30, 2013), subject to RioCan's ability to
make one block purchase of Units per calendar week in excess of such
limits. RioCan intends to fund the purchases out of its available
cash and undrawn credit facilities. 
RioCan's Consolidated Financial Statements, Management's Discussion
and Analysis and a Supplemental Information Package for the three
months ended June 30, 2013 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 Wednesday July 31, 2013 at 9:00 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 1-866-226-1793.
If you cannot participate in the live mode, a replay will be
available until August 28, 2013. To access the replay, please dial
905-694-9451 or 1-800-408-3053 and enter passcode 8849707#. 
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 $13.7 billion as at June 30, 2013. It
owns and manages Canada's largest portfolio of shopping centres with
ownership interests in a portfolio of 348 retail properties
containing more than 83 million square feet, including 50 grocery
anchored and new format retail centres containing 13.7 million square
feet in the United States through various joint venture arrangements
as at June 30, 2013. RioCan's portfolio also includes 15 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"), 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 2013
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, 2013", "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, 2013, 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; 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.  
Contacts:
RioCan Real Estate Investment Trust
Rags Davloor
Executive Vice President & CFO
(416) 642-3554
www.riocan.com