RioCan Announces Third Quarter 2022 Results

• 1.4 million sq. ft. of latest and renewed leases with new leasing unfold of 15.9% and blended unfold of seven.9%

TORONTO, Nov. 03, 2022 (GLOBE NEWSWIRE) — RioCan Real Estate Investment Trust (“RioCan” or the “Trust”) (TSX: REI.UN) introduced at this time its monetary outcomes for the three and 9 months ended September 30, 2022 (the “Third Quarter”).

“The strength of our results is a reflection of our strategically curated portfolio and tenant mix that provide the resiliency to perform in any business environment,” mentioned Jonathan Gitlin, President and CEO of RioCan. “With little supply available, retail real estate like RioCan’s, in major market locations with attractive demographics that facilitate last kilometre delivery, is in high demand. Our predominantly open air, grocery anchored and mixed-use portfolio is driving strong new tenant demand, and maintaining favourable pricing power, even in the current inflationary environment. We have the balance sheet, the team and the longstanding reputation to continue to draw tenants to our best-in-class offerings. At the same time, we continue to enhance the quality of our portfolio and income as we recycle capital from lower growth assets to higher return uses, all of which should lead to greater free cash flow and visible earnings growth.”

FFO per Unit and Net Income

• FFO per unit of $0.44 for the Third Quarter was $0.04 per unit or 10% greater than the identical interval final yr. Strong operational efficiency drove Same Property NOI¹ development which contributed $0.02 to the rise in FFO per unit. Higher residential rental NOI contributed an extra $0.01 per unit, whereas residential stock positive aspects and payment earnings mixed contributed one other $0.03 per unit. The accretion advantage of NCIB exercise during the last 12 months elevated FFO per unit by $0.02. These will increase had been partially offset by the affect of property bought, $0.02 per unit, and decrease straight-line lease and better curiosity prices of $0.01 per unit every. The FFO Payout Ratio¹ of 56.7% was in-line with the long-term goal vary of 55% to 65%.
• Our main market, necessity-based portfolio continued to show resilient, producing robust working outcomes. Our FFO Payout Ratio of 56.7%, ample Liquidity¹ of $1.6 billion, sizable Unencumbered Asset¹ pool of $9.0 billion, low proportion of floating price debt at 7.9% of complete debt and staggered debt maturities, all contribute to the Trust’s monetary flexibility and steadiness sheet power.
• RioCan reaffirms 2022 FFO per unit development steering of 5% to 7% and is anticipating to be on the greater finish of the vary.
• Development Spending¹ for 2022 is anticipated to be on the decrease finish of the $425 million to $475 million vary.
• Net earnings for the Third Quarter of $3.2 million, was $134.4 million decrease than the identical interval final yr primarily as a result of a web honest worth loss on funding properties of $118.8 million in comparison with a $20.0 million honest worth achieve. The weighted common portfolio capitalization price elevated by 4 foundation factors from final quarter from elevated capitalization charges on sure property, web of the affect of the disposition of sure properties valued at comparatively greater capitalization charges. Higher stabilized NOI on sure properties as a result of robust operational and leasing exercise offset, partly, the honest worth affect of the upper weighted common portfolio capitalization price.

Operation Highlights

• Same Property NOI grew by 5.1% within the Third Quarter when in comparison with the identical interval final yr and was pushed by will increase in occupancy, lease development from contractual lease steps, will increase in lease upon renewal and a decrease pandemic-related provision, web of sure 2021 beneficial gadgets which didn’t recur in 2022. Adjusted Same Property NOI¹ development was 3.9% after adjusting for the affect of the pandemic-related provision and authorized and CAM/property tax settlements.
• Committed occupancy for the industrial portfolio elevated to 97.3%, pushed by improved retail dedicated occupancy, which elevated by 20 foundation factors to 97.8% as in comparison with the second quarter of this yr. Occupancy enhancements resulted from robust tenant retention and sturdy leasing exercise from excessive tenant demand for top of the range, well-located retail area that’s briefly provide.
• New and renewed leases generated a blended leasing unfold of seven.9%. New leasing of 0.3 million sq. toes was accomplished at new leasing spreads of 15.9%. Renewed leases of 1.1 million sq. toes representing a retention ratio of 90.9% had been accomplished at leasing spreads of 6.6%.
• At The Well roughly 91% of the whole industrial area together with workplace and retail has been leased, or 94% together with retail leases nearing finalization and in superior negotiations. Achieved common lease per sq. foot has exceeded professional forma. Subsequent to the Third Quarter, a long-term settlement for indoor and out of doors digital promoting was executed with a premier world promoting firm enhancing the property income stream and enabling digital activation on website.

RioCan Living Update¹

• As of November 3, 2022, the RioCan Living™ residential rental portfolio is comprised of two,005 purpose-built accomplished items throughout 9 buildings situated in Toronto, Montreal, Ottawa and Calgary. Seven buildings are stabilized and are 96.8% leased. Two further accomplished buildings, Latitude™ and Luma™, are presently in lease-up.
• In the Third Quarter, the leasing velocity was very sturdy throughout the portfolio given elevated demand and constrained provide in main markets. An further 214 items at Rhythm, that are presently in lease-up, are scheduled to be accomplished in This autumn 2022. The 592 items at FourFifty The Well™ will likely be accomplished in phases beginning in mid-2023, by means of to early-2024.
• RioCan Living condominium and townhouse developments generated residential stock positive aspects of $7.8 million within the Third Quarter.
• As of November 3, 2022, 2,692 condominium and townhouse items are both below development or within the strategy of interim closing and an extra 386 items are in pre-sale. Between 2022 and 2026, these 3,078 items mixed are anticipated to generate $816.1 million of proceeds and residential stock positive aspects within the $209.0 million to $222.0 million vary, together with $11.8 million in stock positive aspects at U.C. Tower acknowledged in the course of the first three quarters of 2022. Of RioCan’s six energetic development initiatives, 95% of the whole items have been bought whereas 99% of our pro-forma revenues have been achieved.

Development Highlights

• RioCan’s in-house improvement crew delivered 393,000 sq. toes of completions in the course of the first three quarters of 2022 together with 173,000 sq. toes throughout three residential rental buildings and 141,000 sq. toes at The Well. The complete embedded improvement potential throughout the Trust’s portfolio is 42.4 million sq. toes.
• Our improvement pipeline contains 16.7 million sq. toes of entitled initiatives, of which 2.2 million sq. toes are presently below improvement. Construction at our largest improvement venture, The Well, continued to progress in the course of the Third Quarter. Approximately 875,000 sq. toes (at 100% possession curiosity) is present process tenant fixturing and 6 tenants at the moment are working of their respective items. Cash rents are anticipated to ramp up in the course of the the rest of the yr.
• In 2022, the Trust expects the Value of Development Deliveries¹, together with properties below improvement and residential stock, to be between $700 million to $750 million, the most important annual Value of Development Deliveries because the inception of this improvement program. To the top of the Third Quarter, the Value of Development Deliveries is $415.0 million.

Balance Sheet Strength

• The Trust had $1.6 billion of Liquidity within the type of a $1.1 billion undrawn revolving line of credit score, $0.4 billion undrawn development traces and different financial institution loans and $0.1 billion money and money equivalents. Pursuant to the phrases of its credit score settlement, the Trust has a $250 million possibility to extend its dedication below the revolving line of credit score.
• RioCan’s unencumbered asset pool of $9.0 billion, which can be utilized to acquire secured financing to offer further liquidity, generated 60.8% of Annual Normalized NOI¹ and supplied 2.20x protection over Unsecured Debt¹.
• Adjusted Debt to Adjusted EBITDA¹ was 9.28x on a proportionate share foundation, as at September 30, 2022, in comparison with 9.59x as on the finish of 2021. The lower was primarily as a result of greater Adjusted EBITDA partially offset by greater common Total Adjusted Debt balances.
• The Trust’s Total Adjusted Debt to Total Adjusted Assets at RioCan’s proportionate share elevated from December 31, 2021 primarily as a result of greater Total Adjusted Debt ensuing from the timing of debt attracts for capital deployment actions.

Capital Management Update

• On October 3, 2022, RioCan redeemed, in full, its $300.0 million, 2.83% Series Y unsecured debenture upon maturity. The compensation was primarily funded by means of six mortgages for a mixed complete of $295.5 million at a weighted common hedged rate of interest of three.67%. Two mortgages totalling $86.0 million had been funded in September 2022 at a weighted common hedged rate of interest of 4.22%, and the remaining mortgages funded in October 2022 at a weighted common hedged rate of interest of three.44%.
• In conjunction with the above-mentioned mortgage financing, in the course of the Third Quarter the Trust settled the remaining $250.0 million of bond ahead contracts entered into on December 14, 2021, because it had locked rates of interest for these new mortgages. As at September 30, 2022, the Trust has no bond ahead contracts excellent. During 2022, the Trust settled a complete of $500 million of bond ahead contracts, which resulted in a weighted common rate of interest discount of 109 bps or a weighted common hedged rate of interest of three.68% for $507.5 million of 7-year debt.
• After factoring within the mortgage financing and the redemption of the $300.0 million Series Y debentures accomplished subsequent to quarter finish, the unencumbered asset pool fell to $8.6 billion and its protection over Unsecured Debt rose to 2.22x.
• During the Third Quarter, the Trust renewed its Base Shelf Short Form Prospectus which gives for the issuance of as much as $3.0 billion in debt securities, Trust Units and most popular items as much as September 30, 2024.
• As introduced on November 3, 2022, RioCan renewed its Normal Course Issuer Bid (the 2022/2023 NCIB), to amass as much as a most of 30,247,803 Units, topic to a present each day most of 207,826. The 2022/2023 NCIB expires on November 6, 2023.

Investing and Capital Recycling

• As of November 3, 2022, closed, agency or conditional inclinations totaled $702.1 million at a weighted common capitalization price of 6.8%, together with $219.6 million of accomplished inclinations throughout 2022 and $175.6 million of agency offers. These inclinations are comprised of a number of non-core and secondary market property, together with an enclosed mall in Newfoundland, which improves our portfolio high quality whereas bringing in capital that may be recycled into extra productive makes use of.

Conference Call and Webcast

Interested events are invited to take part in a convention name with administration on Friday, November 4, 2022 at 10:00 a.m. (ET). Participants will likely be required to determine themselves and the group on whose behalf they’re collaborating.

To entry the convention name, click on on the next hyperlink to register at the very least ten minutes previous to the scheduled begin of the decision: https://www.netroadshow.com/events/login?show=4de18b7b&confId=42138. Participants who pre-register at any time previous to the decision will obtain an e mail with dial-in credentials together with login passcode and PIN to realize quick entry to the dwell name. Those which might be unable to pre-register could dial-in for operator help by calling 1-833-950-0062 and coming into the entry code: 420623.

For these unable to take part within the dwell mode, a replay will likely be accessible at 1-866-813-9403 with entry code 457633.

To entry the simultaneous webcast, go to RioCan’s web site at http://investor.riocan.com/investor-relations/events-and-presentations/ and click on on the hyperlink for the webcast.

About RioCan

RioCan is certainly one of Canada’s largest actual property funding trusts. RioCan owns, manages and develops retail-focused, more and more mixed-use properties situated in prime, high-density transit-oriented areas the place Canadians wish to store, dwell and work. As at September 30, 2022, our portfolio is comprised of 198 properties with an mixture web leasable space of roughly 34.8 million sq. toes (at RioCan’s curiosity) together with workplace, residential rental and 11 improvement properties. To study extra about us, please go to www.riocan.com. 

Basis of Presentation and Non-GAAP Measures

All figures included on this News Release are expressed in Canadian {dollars} until in any other case famous. RioCan’s unaudited interim condensed consolidated monetary statements (“Condensed Consolidated Financial Statements”) are ready in accordance with International Financial Reporting Standards (IFRS). Financial info included inside this News Release doesn’t comprise all disclosures required by IFRS, and accordingly must be learn together with the Trust’s Condensed Consolidated Financial Statements and MD&A for the three and 9 months ended September 30, 2022, which can be found on RioCan’s web site at www.riocan.com and on SEDAR at www.sedar.com. 

Consistent with RioCan’s administration framework, administration makes use of sure monetary measures to evaluate RioCan’s monetary efficiency, which aren’t in accordance with typically accepted accounting rules (GAAP) below IFRS. Funds From Operations (“FFO”), FFO per unit, FFO Adjusted per unit, Net Operating Income (“NOI”), Same Property NOI, Adjusted Same Property NOI, Development Spending, Liquidity, Adjusted Debt to Adjusted EBITDA, Total Adjusted Debt to Total Adjusted Assets, RioCan’s Proportionate Share, Ratio of Unsecured Debt to Total Contractual Debt, Ratio of Secured Debt to Total Contractual Debt, Unencumbered Assets to Unsecured Debt and Percentage of Normalized NOI Generated from Unencumbered Assets, in addition to different measures which may be mentioned elsewhere on this News Release, should not have a standardized definition prescribed by IFRS and are, due to this fact, unlikely to be akin to comparable measures offered by different reporting issuers. RioCan dietary supplements its IFRS measures with these Non-GAAP measures to help in assessing the Trust’s underlying efficiency and stories these further measures in order that buyers could do the identical. Non-GAAP measures shouldn’t be thought-about as alternate options to web earnings or comparable metrics decided in accordance with IFRS as indicators of RioCan’s efficiency, liquidity, money circulation, and profitability. For full definitions of those measures, please check with the “Non-GAAP Measures” part in RioCan’s MD&A for 3 and 9 months ended September 30, 2022.

The reconciliations for non-GAAP measures included on this News Release are outlined as follows:

RioCan’s Proportionate Share

The following desk reconciles the consolidated steadiness sheet from IFRS to RioCan’s proportionate share foundation as at September 30, 2022 and December 31, 2021:

The following tables reconcile the consolidated statements of earnings from IFRS to RioCan’s proportionate share foundation for the three and 9 months ended September 30, 2022 and 2021:

NOI and Same Property NOI

The following desk reconciles working earnings to NOI and Same Property NOI to NOI for the three and 9 months ended September 30, 2022 and 2021:

Same Property NOI together with accomplished properties below improvement (PUD)

Adjusted Same Property NOI

FFO

The following desk reconciles web earnings attributable to Unitholders to FFO for the three and 9 months ended September 30, 2022 and 2021:

Development Spending

Total Development Spending for the three and 9 months ended September 30, 2022 and 2021 are as follows:

Value of Development Deliveries

Total Value of Development Deliveries for the three and 9 months ended September 30, 2022 and 2021 are as follows:

Total Adjusted Debt and Total Contractual Debt

The following tables reconcile complete debt to Total Adjusted Debt, complete property to Total Adjusted Assets, and complete debt to Total Contractual Debt as at September 30, 2022 and December 31, 2021:

Liquidity

As at September 30, 2022, RioCan had roughly $1.6 billion of Liquidity as summarized within the following desk:

Unsecured Debt and Secured Debt

The following desk reconciles complete Unsecured Debt and Secured Debt to Total Contractual Debt as at September 30, 2022 and December 31, 2021:

Adjusted EBITDA

The following desk reconciles consolidated web earnings attributable to Unitholders to Adjusted EBITDA:

Adjusted Debt to Adjusted EBITDA Ratio

Adjusted Debt to Adjusted EBITDA is calculated as follows:

Unencumbered Assets

The tables under summarize RioCan’s Unencumbered Assets to Unsecured Debt and Percentage of Normalized NOI Generated from Unencumbered Assets as at September 30, 2022 and December 31, 2021:

Forward-Looking Information

This News Release comprises forward-looking info throughout the which means of relevant Canadian securities legal guidelines. This info displays RioCan’s aims, our methods to attain these aims, in addition to statements with respect to administration’s beliefs, estimates and intentions regarding anticipated future occasions, outcomes, circumstances, efficiency or expectations that aren’t historic information. Forward-looking info typically could be recognized by means of forward-looking terminology resembling “outlook”, “objective”, “may”, “will”, “would”, “expect”, “intend”, “estimate”, “anticipate”, “believe”, “should”, “plan”, “continue”, or comparable expressions suggesting future outcomes or occasions. Such forward-looking info displays administration’s present beliefs and relies on info presently accessible to administration. All forward-looking info on this News Release is certified by these cautionary statements. Forward-looking info is just not a assure of future occasions or efficiency and, by its nature, relies on RioCan’s present estimates and assumptions, that are topic to quite a few dangers and uncertainties, together with these described within the “Risks and Uncertainties” part in RioCan’s MD&A for the three and 9 months ended September 30, 2022 and in our most up-to-date Annual Information Form, which might trigger precise occasions or outcomes to vary materially from the forward-looking info contained on this News Release. General financial circumstances, together with rate of interest fluctuations, may impact RioCan’s outcomes of operations. Material elements or assumptions that had been utilized in drawing a conclusion or making an estimate set out within the forward-looking info could embody, however are usually not restricted to: a gradual restoration and development of the retail atmosphere; a rising rate of interest atmosphere; a unbroken pattern towards land use intensification at cheap prices and improvement yields, together with residential improvement in city markets; the Trust’s skill to redevelop, promote or enter into partnerships with respect to the longer term incremental density it has recognized in its portfolio, entry to fairness and debt capital markets to fund, at acceptable prices, future capital necessities and to allow our refinancing of money owed as they mature; the provision of funding alternatives for development in Canada; the timing and talent of RioCan to promote sure properties; the valuations to be realized on property gross sales relative to present IFRS values; and the Trust’s skill to make the most of the capital achieve refund mechanism. Although the forward-looking info contained on this News Release relies upon what administration believes are cheap assumptions, there could be no assurance that precise outcomes will likely be in keeping with this forward-looking info.

The forward-looking statements contained on this News Release are made as of the date hereof, and shouldn’t be relied upon as representing RioCan’s views as of any date subsequent to the date of this News Release. Management undertakes no obligation, besides as required by relevant regulation, to publicly replace or revise any forward-looking info, whether or not because of new info, future occasions or in any other case.