Mr. Jonathan Gitlin reports

RIOCAN'S STRONG FIRST QUARTER 2023 RESULTS REINFORCES CONFIDENCE IN FFO/UNIT GROWTH TARGET FOR THE YEAR

RioCan Real Estate Investment Trust has released its financial results for the three months ended March 31, 2023.

"RioCan had a solid start to 2023 with strong first quarter results. Our occupancy, retention rates and leasing spreads remain high as demand continues to intensify for quality retail space that is short in supply. This operating strength drove same-property NOI while contributions from completed developments also added to our growth," said Jonathan Gitlin, president and chief executive officer of RioCan. "As always, we are prudently managing risk and maintaining a healthy balance sheet with strong liquidity and access to various financing channels. The quality of our properties and tenants, along with our operational excellence, provides us with growing income that supports our asset values, outweighing the volatile macroeconomic environment and reinforcing our confidence to reaffirm our FFO per-unit growth guidance for the year."

FFO per unit and net income:

• FFO per unit was 44 cents, two cents per unit or 4.8 per cent higher than the same period last year:
  • Same-property net operating income (1) growth of 3.4 per cent contributed a two-cent increase in FFO per unit.
  • Additional FFO increases, predominantly from completed commercial developments and residential rental operations, drove FFO per unit higher by two cents.
  • Higher lease cancellation fees increased FFO by an additional one cent per unit.
  • Higher interest expense, net of higher interest income, decreased FFO by one cent.
  • The reduction in FFO per unit from properties sold was partly offset by FFO per-unit accretion from prior-year unit buybacks, a net reduction of two cents per unit.
• Net income for the first quarter of $118.0-million was $42.1-million lower than the comparable period last year mainly due to a fair value loss on investment properties of $17.4-million compared with a $35.4-million fair value gain in 2022.
• Its FFO payout ratio (1) of 59.3 per cent, liquidity (1) of $1.7-billion, unencumbered asset (1) pool of $8.3-billion, floating-rate debt at 5.4 per cent of total debt and staggered debt maturities, all contribute to its financial flexibility and balance sheet strength.
• For 2023, it anticipates FFO per unit to be within the range of $1.77 to $1.80, same-property net operating income growth of 3 per cent and an FFO payout ratio of between 55 per cent and 65 per cent. Development spending (1) is expected to be between $400-million to $450-million.

(1) A non-generally accepted accounting principle measurement.

• Its core retail portfolio continues to produce solid operating results. Same-property NOI grew by 3.4 per cent, driven by increases in rent growth from contractual rent steps, rent upon renewal and occupancy.
• A strong blended leasing spread of 12.3 per cent resulted from new leasing and renewal leasing spreads of 14.8 per cent and 11.6 per cent, respectively. A retention ratio of 91.2 per cent was achieved in the quarter.
• Average net rent per occupied square foot of $21.13 improved 4.4 per cent over the same period last year while new leasing in the first quarter generated average net rent per square foot of $28.57.
• Retail committed occupancy increased by 10 basis points to 98.0 per cent when compared with the previous quarter.
• As at May 10, 2023, 10 of the 13 Bed, Bath and Beyond leases have been sold as a result of court-ordered liquidation resulting in those leases continuing without modification or downtime. With respect to the three leases that were not sold, it has one unit with a completed lease and two leases in final stages of negotiation. While Bed, Bath and Beyond's bankruptcy was not material to RioCan, it highlights this activity as it reaffirms the demand for its well-located retail space.

Conference call and webcast

Interested parties are invited to participate in a conference call with management on Thursday, May 11, 2023, at 10 a.m. ET. Participants will be required to identify themselves and the organization on whose behalf they are participating.

To listen to the conference call, register at least 10 minutes prior to the scheduled start of the call. Participants who preregister at any time prior to the call will receive an e-mail with dial-in credentials including a log-in passcode and PIN to gain immediate access to the live call. Those who are unable to preregister may dial in for operator assistance by calling 1-833-950-0062 and entering the access code 895958.

For those unable to participate in the live mode, a replay will be available at 1-866-813-9403 with access code 642360.

To listen to the simultaneous webcast, visit RioCan's website at events and presentations, and click on the link for the webcast.

About RioCan Real Estate Investment Trust

RioCan is one of Canada's largest real estate investment trusts. RioCan owns, manages and develops retail-focused, increasingly mixed-use properties located in prime, high-density transit-oriented areas where Canadians want to shop, live and work. As at March 31, 2023, its portfolio is composed of 191 properties with an aggregate net leasable area of approximately 33.5 million square feet (at RioCan's interest), including office, residential rental and 11 development properties.

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