Riocan Real Estate Investment Trust · TSX:REI.UN
Riocan Real Estate Investment Trust — Q1 2025 Earnings Presentation
31 slides from Riocan Real Estate Investment Trust's earnings presentation, May 6, 2025
Slide 1: Strength in Retail - First Quarter 2025 Investor Presentation
STRENGTH IN RETAIL FIRST QUARTER 2025 INVESTOR PRESENTATION East Hills May 5, 2025 Calgary, AB
Slide 2: RioCan At a Glance
RioCan At a Glance Committed 98.0% Occupancy(3) 177 properties ~32M Sq. Ft. aggregate net leasable area(3) ~21M Sq. Ft. VANCOUVER pipeline 4 assets 1.1M sq.ft.(1) (3) 4.7% (2) (3) zoned for development BBB CALGARY 16 assets MONTREAL 18 assets 1.9M sq.ft. (1) (3) 3.6M sq.ft. (1) (3) investment-grade
Slide 3: Key Takeaways - Q1 2025
Key Takeaways- Q1 2025 CONTINUED DEMAND FOR HIGH-QUALITY RIOCAN SPACE $0.49 98.0% (5) 8.9% growth over the Maintaining high comparable period last year occupancy with retail FUNDS FROM COMMITTED OPERATIONS (“FFO”) supported by strong operating OCCUPANCY essentially full at 98.7% PER UNIT (1) results
Slide 4: 2025 Outlook
(1) 2025 Outlook STRONG 2024 RESULTS UNDERPIN GROWTH IN 2025 $1.85 to $1.88 ~ 62% FFO per unit (1)(2)(3) FFO Payout Ratio (2) ~ 4% increase The lowest payout ratio from prior year (4) among the peer set, enabling significant cash flow retention to re-invest in the business (5) 1) The Trust continuou
Slide 5: Commercial Same Property NOI (SPNOI)
(1) Commercial Same Property NOI (SPNOI) COMPONENTS OF GROWTH Contractual Rent Steps Same-property tenant pool rent RioCan's leasing strategy includes a Contractual Rent Steps steps which contribute to focus on embedding contractual rent Commercial SPNOI growth ~50% steps into every lease. 2025 SPNO
Slide 6: Favourable Market Dynamics
Favourable Market Dynamics LONG-TERM MACRO-TRENDS PRESENT MEANINGFUL DEMAND DRIVERS Shortage of Quality Supply Evolving Retail / Demand Population / Demand ◦ Lack of quality new retail supply ◦ Full omni-channel experience combines ◦ Population fuels demand for real estate exacerbated by high replac
Slide 7: Canadian Retail Real Estate is Supply Constrained
Canadian Retail Over the last five years, newly Real Estate is constructed retail represents Supply only ~1% of existing supply Constrained 0.9% 1.0% 0.1% With replacement costs for well- 0.9% 0.6% ~17Sq. located retailFt. well over market values, supply constraints are In Millions of Sq. Ft. expect
Slide 8: Sustainable Demand
Sustainable Demand Square Feet of Retail per Capita(2) RETAIL REAL ESTATE SUPPLY HAS NOT KEPT PACE WITH POPULATION GROWTH IN CANADA (‘000s) Population growth in Canada is fueled by qualified and productive immigrants Post pandemic, Canada exceeded its immigration plan targets and welcomed 16.7 Sq. f
Slide 9: Major Market Advantage
Major Market Advantage RIOCAN'S MAJOR URBAN CENTRE PRESENCE OUTPACES PEER AVERAGE % of rent from Canada's six major markets 94% 92% (1) 74% 68% 68% 69% 66% (2) 2017 Q1 2025 RioCan Peer Average (includes CRR, CRT, FCR and SRU) 1) Major market exposure not widely disclosed in 2017. Represents a subset
Slide 10: Dominant Core Toronto Position
Dominant Core Toronto position 7.3M SQ. FT. OF OPERATING ASSETS, WITH AN ADDITIONAL 6.6M SQ. FT (1) OF ZONED DENSITY NLA in Metropolitan Toronto (in millions of sq. ft.) (2) RioCan properties within Metropolitan Toronto RioCan First Capital Choice Properties SmartCentres CT Crombie — 5.0 10.0 1) Squ
Slide 11: Located in Prime, In-Demand and Growing Markets
Located in Prime, In-Demand and Growing Markets COMPELLING DEMOGRAPHIC PROFILE – WITHIN 5KM RADIUS(1) Dense Population Strong Household Income ~ 273,000 ~ $148,000 ~ $102,000 ~ 154,000 +77% +45% (2) (2) 2017 Q1 2025 2017 Q1 2025 1) Within 5km radius. Data is updated annually in the second quarter, w
Slide 12: High-quality, Necessity-based Retail Revenue
High-quality, Necessity-based Retail revenue 98.0% 88.4% Property committed occupancy (2) (6) strong and stable tenants (3) (6) Type (1) (6) z 59.4% 30.5% • Retail: 85.1% grocery anchored mixed-use / • Office: 10.5% centres (4) (6) urban (4) (5) (6) • Residential Rental: 4.4% 1) Percentage of annual
Slide 13: Necessity-based Retail Anchor Tenants
Necessity-based Retail Anchor Tenants A CURATED AND DIVERSIFIED TENANT BASE PROVIDING CONSUMERS CONVENIENT ACCESS TO EVERYDAY NEEDS Other Furniture & Home Tenants ■ Grocery, Pharmacy & Liquor stores are 5.6% 5.0% fundamental components of our necessity-based portfolio, represented by large tenants w
Slide 14: Demand Driven Leasing Activity and Spreads
Demand Driven Leasing Activity and Spreads RESILIENT PORTFOLIO DRIVES HIGH PERFORMANCE (2) (3) (1) (2) Retention Ratios (2) Blended Leasing Spreads Average Net Rent PSF 91.5% 93.5% 19.8% $22.60 87.7% 88.6% 18.7% $22.39 83.8% $21.51 $20.98 10.7% $20.16 9.0% 6.3% 2021 2022 2023 2024 Q1 2025 2021 2022
Slide 15: Lowest Payout Ratio Retains ~$150 Million of Free Cash Flow Annually
Lowest Payout Ratio Retains ~$150 Million of Free Cash Flow Annually WHILE OFFERING ATTRACTIVE TOP TIER YIELDS (2) FFO Payout Ratio (1) Distribution and AFFO yield Peer Average: 73% Peer Average (AFFO Yield): 7.3% 9.4% 84% 8.4% 7.9% 73% 7.5% 68% 70% 70% 7.3% 6.4% 6.3% 61% 6.7% 6.2% 6.0% AFFO Yield 5
Slide 16: Continued Balance Sheet Improvement
Continued Balance Sheet Improvement TARGET (1) Q1 2025 (2) Q4 2024 (2) CAPITAL STRUCTURE METRICS Liquidity (3) N/A $1.4B $1.7B Adjusted Debt to Adjusted EBITDA (4) (5) 8.0x - 9.0x 8.96x 8.98x *NEW METRIC Adjusted Spot Debt to Adjusted EBITDA (5) 8.0x - 9.0x 9.21x 9.12x Unencumbered Assets (6) N/A $8
Slide 17: Deleveraging Plan on Track with Further Improvements Expected
Deleveraging Plan on Track with Further Improvements Expected Key Drivers: • Ramp up of EBITDA – natural Adjusted Debt to Adjusted EBITDA deleveraging from organic growth Within 8.0x - 9.0x Target Range and with new income from recent and near-term development deliveries ~0.5x from 9.59x 9.51x RioCa
Slide 18: Ample Liquidity and Well Distributed Debt Maturity
Ample Liquidity and Well Distributed Debt Maturity Proforma Debt Maturity Profile (1) 2,000 1,800 During the quarter, the Trust repaid During the quarter, the Trust issued 1,600 $500.0 million Series AB senior $250 million Series AN senior unsecured debentures and $134 million unsecured debentures t
Slide 19: Continued Execution of Asset Monetization Strategy
Continued Execution of Asset Monetization Strategy BEST IN-CLASS RESIDENTIAL RENTAL PORTFOLIO 13 (1) Newly built • In Q4 2024, sold our 50% interest in buildings with IFRS avg. age: 4 years Strada in Toronto, at a sale price value of $1.0B (2)(5) above IFRS value 3,099 94.4% (3) • In Q1 2025, entere
Slide 20: Accelerated Capital Recycling
Accelerated Capital Recycling CONDOMINIUM / TOWNHOME DEVELOPMENT EXPECTED TO PROVIDE SALES REVENUE OF $340M - $350M IN 2025 AND $180M - $190M IN 2026 - 2027 U.C. Tower 2 Queen & VergeTM 11YV U.C. Tower 3 AshbridgeTM Sale Status 86% Pre-sold (3) 100% Pre-sold 96% Pre-sold 40% Pre-sold (3) 90% Pre-sol
Slide 21: Long-term Value Enhancing Opportunities Embedded in Sizable Portfolio
Long-term Value Enhancing Opportunities Embedded in Sizable Portfolio PROVEN TRACK-RECORD AND IN-HOUSE EXPERTISE TO UNLOCK VALUE THROUGH EVERY STEP OF THE DEVELOPMENT PROCESS 43.8M SQ. FT. DEVELOPMENT PIPELINE Zoning application Zoning Shovel Underway (1) submitted approved (1) ready (1) 3.0M 18.2M
Slide 22: Embedding Best Practices in Everything We Do
Embedding Best Practices in Everything We Do SELECT ACHIEVEMENTS ENVIRONMENT SOCIAL GOVERNANCE LEED Platinum 2024 Award AA Rating Awarded LEED Platinum Certification at Earned 2024 Waterstone Human Maintained an ESG rating upgrade to The WellTM for the retail and office Capital Canada’s Most Admired
Slide 23: Favourable Market Dynamics
APPENDIX Favourable Market Dynamics RioCan Durham Ajax, ON RIOCAN | INVESTOR PRESENTATION (March 2022) | 23 RIOCAN | INVESTOR PRESENTATION (First Quarter 2025)
Slide 24: Physical Stores - The Hub of Omni-channel
Physical Stores - The Hub of Omni-channel BRICK & MORTAR IS CENTRAL TO SERVING CUSTOMERS HOW, WHERE AND WHEN THEY WANT Distribution Centre Brick & Mortar Store Home Occupancy costs trending higher Located in industrial park Located in heart of community In-store purchase Delivery from store BOPIS (1
Slide 25: Retailers Continue to Expand Their Physical Footprint
Retailers Continue to Expand Their Physical Footprint Gui Loureiro, Regional CEO, “Walmart Canada is on an ambitious growth journey to serve even more Canadians – Walmart Canada, Chile, Mexico better and differently than ever before. This $6.5 billion investment is the largest we’ve and Central Amer
Slide 26: HBC Exposure
APPENDIX HBC Exposure RIOCAN | INVESTOR PRESENTATION ( First Quarter 2025) | 26
Slide 27: Manageable HBC Exposure
Manageable HBC Exposure DISCIPLINED APPROACH TO PRESERVE VALUE AND INCOME As of the year ended 2024, RioCan's Capital will be allocated only to properties that have the potential to investment in the RC-HBC JV (JV) generate incremental value accounted for: ■ 3.3% of Equity 61% Ownership • Oakville P
Slide 28: HBC Guarantees and Loan Summary
HBC Guarantees and Loan Summary Received extensive security packages and valuable lease termination rights in exchange for credit support to the JV BALANCE AS AT MARCH 31, 2025 RIOCAN'S SECURITY Substantial security (inclusive of RioCan's 22% interest in the JV) Pledge of JV interest in: • Yorkdale
Slide 29: Forward-Looking Information
FORWARD-LOOKING INFORMATION All information other than statements of current and historical fact included in this presentation is forward-looking information within the meaning of applicable securities laws. Forward-looking information can generally be identified by the use of forward-looking termin
Slide 30: Non-GAAP Measures
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 I
Slide 31: Head Office
Head Office | RioCan Yonge Eglinton Centre, 2300 Yonge Street, Suite 2200, Box 2386, Toronto, Ontario M4P 1E4 • 1-800-465-2733 • riocan.com RIOCAN | INVESTOR PRESENTATION (First Quarter 2025)
RioCan Real Estate Investment Trust — Q1 2025 Earnings Presentation on 6ix