building for tomorrow · investor presentation q3 2020 | riocan | 5. percentage of annualized...

Investor Presentation Q3 2020 | October 2020

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Retail: 90.2%Office: 8.1%Residential: 1.7%

Increasingly Mixed-Use Portfolio

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About RioCanHigh quality portfolio concentrated in Canada’s major markets with a strong, diversified and largely defensive tenant base

~78%of tenants

Providing Strong or Stable Income

1. Based on annualized rental revenues as of Sept. 30, 2020

~42M Sq. Ft.Development Pipeline

Embedded Value Creation

Potential

96.0% Committed Occupancy during

Global Pandemic

With Significant Room to Grow to

Market Rents

Investor Presentation Q3 2020 | RioCan | 2

• High quality, sustainable income given our tenant composition, low enclosed mall exposure and major market concentration

• NAV creation and additional income through scaled development program with in-house expertise and advanced zoning entitlements ahead of peers

• Balance sheet strength and ample liquidity

• Deeply discounted unit price trading at record low FFO multiple despite strong Q3/20 cash rent collection of 93.4% amidst the pandemic

Why Invest in RioCan


%

6.0x

9.0x

12.0x

15.0x

18.0x

27/Oct/16 27/Oct/17 27/Oct/18 27/Oct/19 27/Oct/20

Current negative sentiment will shift when health crisis dissipatesHighly compelling investment opportunity

5-year avgFFO Multiple: 13.2x

Dislocated trading price represents tremendous value in RioCan units


CurrentFFO Multiple

9.0x1

5-yr AvgFFO Multiple

13.2xVs

9.0x1

1. Priced as of October 27, 2020 based on 1-year forward FFO/unit consensus estimate

% Deep Discount

Concentrated in transit corridors of Canada’s fastest growing major marketsRioCan locations – Where Canadians Live, Work and Shop


Percentage of annualized rental revenue as of Q3 2020

Dense Population 201,3261 People

1. Population and average household income within 5Km of RioCan center, respectively; Source: DemoStats – 2020 - Trends, ©2020 Environics Analytics

Strong Household Incomes $117,9181

Last Mile HubIdeal for micro-fulfillment and Buy Online Pick-up In Store

Residential Development PotentialHighest and best use redevelopment addressing rental supply gap

High Quality, Sustainable Income

Q2 2020 Q3 2020

Cash Rent Collection Approved Deferrals

Positive trend through the quarter with 93%2 of tenants currently openRent Collection during COVID-191


Rent Collection Trend (% billed gross rent)

~6%

~93%~85%

~91%~94%

0.5% 78% of tenants

~61%

~17%

~22%

Rent Collection by Tenant Type (% billed gross rent)

Strong tenantsNational office and essential / necessity / value and specialty retail tenants with strong rent paying ability

Stable tenantsTenants with strong or medium consumer offering combined with good or strong rent paying ability

Potentially Vulnerable tenantsTenants significantly impacted by pandemic and uses or tenants that were of concern prior to pandemic

85% Q3 cash rent collection

97%Q3 cash rent collection


1. As of October 28, 20202. Based on occupied net leasable area

Complementary necessity-based and value-oriented tenancies mitigate risksStrategic leasing that provides necessities for communities


Increasing Exposure

Reducing Exposure

Low Exposure to Declining Retail Concepts

1) Globo Shoes includes Aldo, Call it Spring and Globo2) Reitmans includes Penningtons, RW&CO., Addition Elle and Thyme Maternity3) Stern Group includes Ricki’s, Cleo and Bootlegger4) Laura includes Laura and Melanie Lyne5) Others include Anna Bella, Ascena Group Inc., Brooks Brothers, Chuck E. Cheese,

Coats Co., Davids Tea, Dr. Bernstein Health and Diet Clinic, Garage, Henry’s, Infinity Dental, Jack & Jones, J. Crew, Lucky Brand, Mendocino, Mountain Equipment Co-Operative, Solutions and Swimco.


Globo Shoes1 0.2% -%L'Aubainerie 0.1% 0.1%Reitmans2 0.9% 0.3%Stern Group3 0.2% 0.1%GNC 0.1% 0.1%Laura4 0.4% -%Moores 0.3% 0.1%Le Chateau 0.1% 0.1%Others5 0.5% 0.1%Total RioCan Exposure 2.8% 0.9%( as of Oct 28, 2020)

Retailers restructuring since March 31, 2020

% of Annualized total rental

revenue

Confirmed closures as % of annualized total rental revenue

Strong leasing activity despite pandemicWell-positioned portfolio retains and attracts tenants


Retention Ratio

(%)

83.1%89.4% 88.4%

Q1 2020 Q2 2020 Q3 2020

Renewal Leasing Spread

(%)

Blended Leasing Spread

(%)


NewLeasing Spread

(%)6.7%

19.8%

9.2%

Q1 2020 Q2 2020 Q3 2020

5.3% 4.6% 4.6%

Q1 2020 Q2 2020 Q3 2020

5.6% 5.8% 5.5%

Q1 2020 Q2 2020 Q3 2020

1. Q2 2020 New leasing spread primarily driven by higher concentration of smaller, specialty tenants executing new leases and a pet store releasing space formerly occupied by a value retailer

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RioCan has access to various avenues to generate income and cash flowAdditional sources bolster traditional income stream


Diversity of asset types:• Mixed-use developments increasingly

expanding our exposure to office and residential NOI

Inherent value in portfolio provides:• Inventory gains through condo /

townhouse developments or through sale of certain development land

• Third-party fees for RioCan expertise


20.5M SF, 49%

7.3M SF, 17%

14.3M SF, 34%

• ~100% located in Canada’s six major markets

• ~73% located in the GTA

• ~99% of projects are mixed-use residential projects

• ~60% located on transit

• Completed / In development1

~5,400 residential rental units ~2,900 condo/townhouse units

With highest zoning entitlements among peersValue creation through mixed-use development


Total Pipeline by Zoning Status

Zoning Approved

Zoning Applications Submitted

Future Estimated Density

42MSF

NAV Creation

1. In development includes projects in various stages of development with construction currently underway or starting by 2022

Development is a key driver of future growth and NAV expansion

RioCan’s development program offers multiple benefits


Enhancing quality and security of income with diversification into residential rental

Yield Enhancement - exampleDevelopmentYield based

on IFRS Cost5.5%

Levered Development

Yield8.3%

Corp Leverage

42%

CHMC financing

1.7%

Residential vs Commercial - exampleResidential Development

Development Yield: 5.5%Cap rate: 3.5%

NAV Growth over Cost57%

Commercial Development

Development Yield: 5.5%Cap rate: 5.0%

NAV Growth over Cost10%

Asset Diversification

NOI Creation

NAV Creation

NAV Creation

Total estimates as of Q3 2020 for five recently completed development projectsProven mixed-use experience and value creation

12

$574.9M Total

Estimated Net Project Costs

$32.1M Estimated Stabilized

NOI

$752.3MEstimated

Future Stabilized Value 1

5.6%Estimated Yield on

Total Costs

$203.6MTotal Estimated

Incremental Value Creation2

King and Portland Centre, Toronto

Top 10 most Influential Buildings of the 2010s (Urban Toronto)

ePlace, Toronto

With direct links to two subway linesFrontier, Ottawa

Bathurst College Centre, Toronto

Sage Hills, Calgary

1. Excludes condo gains; 2.Includes $26.2M of condo gains.

NAV Creation

Unlocking the full potential of transit-oriented locations


RioCan’s selected developments mapped to Toronto transit system

NAV Creation

Under Construction: 2.3M sf

Completed Development: 0.8M sf

Future Development: 28.5M sf

Total (at RioCan’s Interest): 31.6M sf

Legend1

Demographics, 5km radius

Average population1: ~320K

Average household income1: ~$132K

Post-secondary education: ~62%

TTC – Existing

TTC – Under Development

TTC – Station

Planned Rapid Transit Line

Billy Bishop Toronto City Airport

CN Tower

Toronto PearsonInternational Airport

UnionStation

1. Square footage accounts for mixed-used residential development projects throughout the Greater Toronto Area at RioCan’s interest

Strong leasing velocity amidst the pandemicRioCan Living – High Quality Rental Residences


eCentral, Toronto, ON Frontier, Ottawa, ON Brio, Calgary, AB

• 466 units, 36-storey building

• ~92% leased as of Oct. 28, 2020

• Rents averaging $3.90 per sf (for market rental units)

• Stabilization expected in Q4 2020

• 228 unit, 23-storey building

• 100% of Phase One, Frontier, isleased as of Oct. 28, 2020

• Rents averaging $2.50 per sf

• Phase Two Latitude is under construction with expected completion date in 2021

• 163 unit, 12-storey building

• Despite lease-up commencing in midst of COVID-19 and in Calgary, which has also been impacted by the prolonged oil crisis, ~53% leased as of Oct. 28, 2020

• Rents averaging $2.53 per sf

NAV Creation

Strong pre-sales for condos and townhomes despite the pandemicCondo / Townhouse development and value creation


Yorkville Condos (11YV)~99% of the 586 units pre-sold as of Oct. 28, 2020 with first possession anticipated in 2024. Estimated inventory gains1 of $65.0M-$71.0M

Windfield Townhomes (U.C. Uptowns) Effectively all 153 units pre-sold as of Oct. 28, 2020 with first possession anticipated in 2022. Estimated inventory gains1 of $5.0M-$5.5M

Windfield Condos (U.C. Tower)~95% of the 503 units pre-sold as of Oct. 28, 2020 with first possession anticipated in 2023. Estimated inventory gains1 of $14.0M-$16.0M

NAV Creation

1. Estimated inventory gains are at RioCan’s interest

Ample liquidity bolstered by large pool of unencumbered assets

Disciplined and prudent balance sheet management


Capital Structure MetricsTarget Q3 20201

Liquidity n/a $803MDebt to Adjusted EBITDA <8.0x 9.13x2

Debt to Total Assets 38% - 42% 44.8%Interest Coverage >3.0x 3.22xDebt Service Coverage >2.25x 2.71xFixed Charge Coverage >1.10x 1.06xUnencumbered Assets N/A $8.7BUnencumbered Assets to Unsecured Debt >2.0x 2.21xNOI % from Unencumbered Assets >50% 57.1%Unsecured vs. Secured Debt 60% / 40% 57% / 43%Ratio of Floating Rate Debt to Total Debt <15% 6.4%FFO Payout Ratio <80% 86.2%1. Metrics are calculated based on RioCan’s proportionate share2. Excluding an average development cost balance of $1.4B, debt-to-adjusted

EBITDA would be 7.2x

Balance SheetStrength

APPENDIX AND FEATURE PROJECTS

2323 Yonge St.

2345 Yonge St.


Development pipeline: 59 projects delivering 42M square feet of NLAValue creation underway


• 21 projects already under construction and on track for completion in the near to mid-term

• $1.2B invested to-date to drive further income diversification and creating net asset value for the long term

• Only $81.3M of cumulative fair value recognized as of Sept 30, 2020

(thousands of sq. ft.)# of projects Commercial Residential

Rental Air Rights Sale Residential Inventory Total

Under constructionMixed-use residential 10 1,012 862 1,030 211 3,115Greenfield Development 2 432 - - - 432Expansion & Redevelopment 9 114 - - - 114

Subtotal under construction 21 1,558 862 1,030 211 3,661

Approved ZoningMixed-use residential 15 2,612 7,059 - 961 10,632

Zoning applications submittedMixed-use residential 7 667 6,161 - 446 7,274

Total Active Projects 43 4,837 14,082 1,030 1,618 21,567

Future estimated densityMixed-use residential 16 2,092 18,179 0 180 20,451

Total development pipeline 59 6,929 32,261 1,030 1,798 42,018

Estimated Density (NLA) at RioCan's Interest

Projects under construction on track to deliver value creation over the next four years

Value creation underway


Mixed-used Residential Projects Currently Under Construction

LocationRioCan Ownership

% (Partner)('000s sq.

ft)

Total NLA at Riocan Interest

# of residential

units at 100%

Cost to date at RioCan Interest

Total Est. Cost at RioCan Interest

Inventory gain ($M)

Anticipated date of

Completion

Yonge Sheppard Centre Residential (Pivot) Toronto, ON 100% 258 258 361 $218.3 $237.8 2020Windfield Farm U.C. Towns Oshawa, ON 50% (Tribute) 166 34.0 35.1 $12.9 2020

Dupont Street (Litho) Toronto, ON 50% (Woodbourne) 177 89 210 48.5 77.6 2021Fifth and Third East Village (5th & THIRD) Calgary, AB 100% 754 754 - 114.0 118.2 2021College & Manning (Strada) Toronto, ON 50% (Allied) 108 54 61 30.1 42.2 2021Gloucester - Phase Two (Latitude) Gloucester, ON 50% (Killam) 160 80 209 23.7 45.6 2021

The Well Toronto, ON50% commercial (Allied);

40% residential (Allied/Diamond)

2,615 1,200 na 517.0 888.4 2021 - 2023

Elmvale Acres - Phase One (Luma) Ottawa, ON 50% (Killam) 135 68 168 18.0 45.3 2022Windfield Farm U.C. Uptowns Oshawa, ON 50% (Tribute) 153 2.8 30.2 $5.0 - $5.5 2022

Westgate - Phase One (Rhythm) Ottawa, ON 100% 165 165 213 23.0 98.5 2022 - 2023The Well - (FourFifty The Well) Toronto, ON 50% (Woodbourne) 393 196 592 10.1 143.6 2023Windfield Farm U.C. Tower Oshawa, ON 50% (Tribute) 503 13.3 72.6 $14.0 - $16.0 2023

Rental units and retail 80 40 81 15.0 48.4 2024Condominium (11YV) 422 211 586 85.2 258.4 $65.0 - $71.0 2024

Total Under Construction 5,267 3,115 3,303 $1,152.9 $2,142.0 $96.9 - $105.4

Completed Projects

Yonge Eglinton N/E (eCentral & eCondos) Toronto, ON50% condo

(Metropia/Bazis) 712 356 1,089 na na $14.5 2019Gloucester Phase One (Frontier) Gloucester, ON 50% (Killam) 185 93 228 na na na 2019

Office and retail na na na na na naCondominium (Kingly) 421 210 132 na na $11.70 2019

Brentwood Village (Brio) Calgary, AB 50% (Brookfield) 144 72 163 na na na 2020

Total Completed 1,462 731 1,612 na na $26.2

Total Completed and Under Construction 6,729 3,846 4,915 na na $123.1 - $131.6

50% (CD Capital/Metropia)

Projects

($ in millions and thousands of sq. ft.)

King and Portland Center Toronto, ON 50% (Allied)

Yorkville Toronto, ON

HWY 400

HWY 7

RIOCAN COLOSSUS CENTREVAUGHAN, ON

HWY 407


RIOCAN COLOSSUS CENTREVAUGHAN, ON


• >50 acre site currently consisting of 571k sq. ft of income producing retail

• ~10M sq. ft. of mixed-use density contemplated involving multi-phase development


THE WELL TORONTO

• 36-storey, 1.1 million square feet1 of office – 84% pre-leased

• ~420k square feet of retail

• 592-unit residential rental under construction

THE WELL TORONTO


YONGE SHEPPARD CENTRE & PIVOTTORONTO

• ~315k sq. ft. of office

• ~305k sq. ft. of retail

• 36-storey, 361 unit residential rental - completed


Frontier & LatitudeGloucester

Frontier, Phase 1 – 100% leased• 33-storey, 228 unit residential rental

Latitude, Phase 2 – under construction based on success of Phase 1• 20-storey, 209 unit residential rental


LithoToronto

• 8-storey, 210 unit residential rental

• ~30.5k sq. ft. of retail

• Under construction for completion Summer 2021


StradaToronto

• 7-storey, 61 unit residential rental

• ~5.6k sq. ft. of retail

• Under construction for completion Spring 2021


RioCan’s consolidated financialstatements are prepared in accordancewith IFRS. Consistent with RioCan’smanagement framework, managementuses certain financial measures toassess RioCan’s financial performance,which are not generally acceptedaccounting principles (GAAP) underIFRS.

The following measures, Funds FromOperations (“FFO”), Net OperatingIncome (“NOI”), Adjusted Earningsbefore interest, taxes, depreciationand amortization (“AdjustedEBITDA”), Debt to Adjusted EBITDA,Same Property NOI, InterestCoverage, Debt Service Coverage,Fixed Charge Coverage, and TotalEnterprise Value as well as othermeasures discussed in this presentation,do not have a standardized definitionprescribed by IFRS and are, therefore,unlikely to be comparable to similarmeasures presented by other reportingissuers.

NON-GAAPMEASURES

Certain information included in this presentation contains forward-looking statements within the meaning of applicablesecurities laws including, among others, statements concerning our objectives, our strategies to achieve those objectives, aswell as statements with respect to management's beliefs, plans, estimates, and intentions, and similar statementsconcerning anticipated future events, results, circumstances, performance or expectations that are not historical facts.Certain material factors, estimates or assumptions were applied in drawing a conclusion or making a forecast or projectionas reflected in these statements and actual results could differ materially from such conclusions, forecasts or projections.

Forward-looking information is not a guarantee of future events or performance and, by its nature, is based on RioCan’scurrent estimates and assumptions, which are subject to numerous risks and uncertainties. Such risks and uncertaintiesinclude, but are not limited to, the effects of COVID-19 on the businesses, operations and financial positions of RioCan andits tenants, as well as on consumer behaviors and the economy in general, including the length, spread and severity of thepandemic; the nature and length of the restrictive measures implemented or to be implemented by various levels ofgovernments in Canada; RioCan’s tenants' ability to pay rents as required under their leases; the availability of varioussupport programs that are or may be offered by the various levels of government in Canada and worldwide; domestic andglobal supply chains; timelines and costs related to the Trust’s development projects; the pace of property lease up andrents and yields achieved upon development completion; potential changes in leasing activities, market rents and propertyvaluations; the availability and extent of rent deferrals offered or to be offered by the Trust; domestic and global credit andcapital markets, and the Trust’s ability to access capital on favourable terms or at all, and its ability to maintain its currentcredit ratings; total market return and the dividend yield of the Trust’s Units; and the health and safety of our employees,tenants and people in the communities that our properties serve. For more information on other risks, uncertainties andassumptions that could cause the Trust's actual results to differ from current expectations, refer to the “Risks andUncertainties” section in RioCan’s Third Quarter 2020 MD&A for the period ended September 30, 2020 and in its mostrecent Annual Information Form, available at www.sedar.com and at www.riocan.com.

The forward looking information contained in this presentation is made as of the date hereof. Except as required byapplicable law, RioCan undertakes no obligation to publicly update or revise any forward-looking statement, whetheras a result of new information, future events or otherwise.

FORWARD LOOKINGINFORMATION


building for tomorrow · investor presentation q3 2020 | riocan | 5. percentage of annualized...

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