Riocan Real Estate Investment Trust · TSX:REI.UN
Riocan Real Estate Investment Trust — Investor Day (April 2018)
82 slides from Riocan Real Estate Investment Trust's investor day presentation, Apr 18, 2018
Slide 1: Investor Day April 18, 2018
RIO*CAN REAL VISION, SOLID GROUND. Investor Day April 18, 2018
Slide 2: Non-GAAP Measures and Forward Looking Information
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 3: Today's Agenda
TODAY’S AGENDA A Opening Remarks Ed Sonshine B Disposition Program Jonathan Gitlin The Current Operating Environment • RioCan’s Strategic & Operational Advantages Rags Davloor, John C • Operations – Driving Organic Growth Ballantyne, & Jeff Ross • Leasing Market & Supporting RioCan’s Strategic Growt
Slide 4: Opening Remarks
OPENING REMARKS Ed Sonshine Founder and CEO 4
Slide 5: RioCan's Value Proposition and Four Strategic Pillars
RIOCAN’S VALUE PROPOSITION AND FOUR STRATEGIC PILLARS REAL VISION, SOLID GROUND CANADA’S MAJOR MARKET PORTFOLIO • High quality, necessity based retail, and increasingly mixed-use major markets portfolio • Diversified, strong national tenant base • Significant upside on rent growth • Base for signifi
Slide 6: Unmatched Portfolio of Urban Mixed-Use Development Properties
UNMATCHED PORTFOLIO OF URBAN MIXED-USE DEVELOPMENT PROPERTIES eCentral at ePlace King Portland Centre (Kingly) Sunnybrook Plaza Yonge Sheppard Centre (Pivot) Gloucester Residential Phase I (Frontier) 6
Slide 7: Leadership Team
LEADERSHIP TEAM EXPERIENCE, INTEGRITY AND FORESIGHT • Strong executive bench with a wealth of experience and proven track record • Trusted and respected, with deep industry knowledge and Ed Sonshine O.Ont., Rags Davloor Qi Tang, relationships Q.C. Founder and President and COO SVP and CFO CEO 25 yea
Slide 8: Disposition Program Update
DISPOSITION PROGRAM UPDATE Jonathan Gitlin Senior Vice President, Investments and Residential 8
Slide 9: Progress to Date
PROGRESS TO DATE Disposition Progress as of March 29, 2018 Transaction type Value ($m) Closed and Firm $537.3 Conditional $74.7 Total to Date $612.0 Weighted Average Cap Rate 6.22% • Sale prices to-date and cap rates achieved have been in line with IFRS value • $612M progress to-date in six months s
Slide 10: Disposition Update: Map of Dispositions
DISPOSITION UPDATE MAP OF FIRM OR CLOSED DISPOSITIONS TO DATE The properties disposed to date span a broad geographical range of secondary markets 10
Slide 11: Disposition Update: Buyer Profile (REITs)
DISPOSITION UPDATE BUYER PROFILE REITs • Strategic buyers, such as CT REIT, who are looking to acquire assets where their retail banner is already a tenant. They know these assets well and recognize the advantage of controlling properties in which their associate retail banners operate. • Geographic
Slide 12: Disposition Update: Buyer Profile (Private and Institutional)
DISPOSITION UPDATE BUYER PROFILE Private Individual Buyers • Objectives include capital preservation and stable, risk-adjusted returns. • These buyers have local expertise or presence in particular secondary markets, and therefore covet these assets. Private Equity and Investment Managers • Objectiv
Slide 13: The Current Operating Environment
THE CURRENT OPERATING ENVIRONMENT RIOCAN’S STRATEGIC & OPERATIONAL ADVANTAGES CONSISTENTLY ABOVE 95% Rags Davloor President & COO 13
Slide 14: Driven by Insight
DRIVEN BY INSIGHT EXPERIENCE, INTEGRITY AND FORESIGHT • Best in class management team • Widely integrated cross functional management approach Asset Management Asset Management Operations Marketing Sustainability Rags Davloor Leasing Leasing Tenant Construction Development Permitting/ Design and Pla
Slide 15: Canada's Major Market Portfolio
CANADA’S MAJOR MARKET PORTFOLIO WHERE CANADIANS SHOP, LIVE AND WORK CANADA’S MAJOR MARKET PORTFOLIO • High quality, necessity based retail, and increasingly mixed-use major markets portfolio • Diversified, strong national tenant base • Significant upside on rent growth • Base for significant NAV gro
Slide 16: Canada's Major Market Portfolio: 2017 vs Vision
CANADA’S MAJOR MARKET PORTFOLIO WHERE CANADIANS SHOP, LIVE AND WORK GTA Revenue Focus Major Market Revenue Avg. Age Portfolio (yrs.) 24 >90% >50% 19 40.9% 76.1% 2017 Vision 2017 Vision 2017 Vision 16
Slide 17: Greater Toronto Area (GTA) Focus
GREATER TORONTO AREA (GTA) FOCUS INDUSTRY LEADING PRESENCE IN THE TORONTO CORE AND… RioCan First Capital SmartCentre REIT 17
Slide 18: Canada's Major Market Portfolio: Demographics
CANADA’S MAJOR MARKET PORTFOLIO WHERE CANADIANS SHOP, LIVE AND WORK Avg. Income Avg. Population (5km radius) (5km radius) ~$120k ~212k ~205k ~$111k ~$102k ~157k 2017 - All Markets 2017 - Major 2020 2017 - All Markets 2017 - Major 2020 Markets Markets • Improved operating efficiencies, newer assets,
Slide 19: Sources of Tremendous NAV Growth
SOURCES OF TREMENDOUS NAV GROWTH ROBUST DEVELOPMENT PIPELINE 70 60 22.2M incremental 50 NLA1 or 53% of existing NLA2 40 30 20 41.8M existing IPP NLA 10 0 RioCan NLA RioCan NLA including Incremental NLA from Millions sf. Development* • Strong, major market, urban focused development pipeline • High q
Slide 20: Tremendous Sources of Cash Flow & NAV Growth
TREMENDOUS SOURCES OF CASH FLOW & NAV GROWTH PIPELINE IS EXPECTED TO CONTINUE TO GROW Total Pipeline by Zoning Status Total Pipeline by Project Type (26.3M* sf) Zoned, 12.3m sf, 46.7% Future est. Residential & density, 8.7m Air Rights sf, 33.2% Mixed-Use 17.2m sf, Residential 65.3% 25.1m sf, 95.6% C
Slide 21: Selected Development Completions Over the Next Three Years
TREMENDOUS SOURCES OF CASH FLOW & NAV GROWTH SELECTED DEVELOPMENT COMPLETIONS OVER THE NEXT THREE YEARS At RioCan’s Interest 2018 2019 2020 Annual Completed NLA 693,000 813,000 1,302,000 Cumulative NLA 693,000 1,506,000 2,808,000 % of NLA* 1.7% 3.6% 6.7% Number of Rental Units 0 688 799 NOI (million
Slide 22: Intensification Strategy
INTENSIFICATION STRATEGY DEVELOPMENT PROCESS FOR EXISTING INCOME PRODUCING PROPERTY Project Evaluation and Market Research Leasing Strategy Development Planning Zoning, Design, Planning Development & Construction Income Producing Asset Until Development Commences Year 1 Year 2 - 3 Year 4-5 Year 6-7
Slide 23: Organic Growth
ORGANIC GROWTH OPERATIONS AND ASSET MANAGEMENT OVERVIEW CONSISTENTLY ABOVE 95% John Ballantyne Senior Vice President, Asset Management 23
Slide 24: Focussed on Driving Same Property NOI & FFO
FOCUSSED ON DRIVING SAME PROPERTY NOI (SPNOI) & FFO LEVERAGING SCALE, EXPERIENCE AND OUR MAJOR MARKET PORTFOLIO Strategically manage and position each asset for its highest and best use 1 Operational efficiencies • Experienced Asset Management team with diversified strength in retail, development an
Slide 25: Driving SPNOI, FFO & NAV
DRIVING SPNOI, FFO & NAV Drive SPNOI and FFO and leverage scale through: • Occupancy and rent growth • Operational efficiency: o Concentrate maintenance contracts with national major market vendors o Sustainable business practices • Ancillary revenue o Digital signage o Pop up stores and activations
Slide 26: Portfolio Capital Planning & Optimization
PORTFOLIO CAPITAL PLANNING & OPTIMIZATION VALUE ADDED CAPEX Leverage capital to strategically redevelop and reposition assets to tap into their highest and best use • Rebrand and redevelop assets to differentiate and resonate with the communities they serve o Expanded food courts o Improved common a
Slide 27: Case Study – Burlington Mall
DRIVING ORGANIC GROWTH CASE STUDY – BURLINGTON MALL BURLINGTON MALL, BURLINGTON, ON Location: On of the busiest intersections in Burlington (Canada’s best mid-sized city 5 years in a row). Three GO train stations within a 10 KM radius and easily accessible from the QEW Acquisition: 2013 Ownership: 5
Slide 28: Case Study – Burlington Mall
DRIVING ORGANIC GROWTH CASE STUDY – BURLINGTON MALL • Strategic repositioning as the destination for locals to find everything the want, need and love in Burlington • Remerchandised with a compelling tenant mix with strong convenience offering • Expanded food court with stronger food offering • Upgr
Slide 29: Case Study – Burlington Mall
DRIVING ORGANIC GROWTH CASE STUDY – BURLINGTON MALL 29
Slide 30: Case Study – Burlington Mall: NOI Increase
DRIVING ORGANIC GROWTH CASE STUDY – BURLINGTON MALL NOI will increase by 42% At Capital Anticipated Metric Acquisition Invested Stabilized (2013) Value $206.5M $55M $287.5 M NOI $9.9M - $14.1M 30
Slide 31: Case Study – Yonge Eglinton Centre
DRIVING ORGANIC GROWTH CASE STUDY – YONGE EGLINTON CENTRE YONGE EGLINTON CENTRE, TORONTO Intersection: Yonge St. and Eglinton Avenue East Acquisition: 2007 Ownership: 100% Total GLA: 1,056,285 sf Property Concept: Mixed-use Project Completion: 2016 Demographics (5km radius): Population 138K Avg. Hou
Slide 32: Case Study – Yonge Eglinton Centre
DRIVING ORGANIC GROWTH CASE STUDY – YONGE EGLINTON CENTRE 32
Slide 33: Driving Engagement: Ancillary Revenue and Experiential Marketing
DRIVING ENGAGEMENT ANCILLARY REVENUE AND EXPERIENTIAL MARKETING 33
Slide 34: Case Study – Yonge Eglinton Centre: Value Creation
DRIVING ORGANIC GROWTH CASE STUDY – YONGE EGLINTON CENTRE 73% increase in value over total costs At Capital Stabilized Metric Acquisition Invested (2017) (2007) Value $223M $110M $574M NOI $13M - $26M Avg. net $12.73 - $17.76 rent PSF 34
Slide 35: Leasing Market & Supporting RioCan's Strategic Growth Platform
ORGANIC GROWTH & STRATEGIC DEVELOPMENT LEASING MARKET & SUPPORTING RIOCAN’S STRATEGIC GROWTH PLATFORM CONSISTENTLY ABOVE 95% Jeff Ross Senior Vice President, Leasing and Tenant Construction 35
Slide 36: Leasing Platform & Team
LEASING PLATFORM & TEAM Leasing Team • Dedicated team with specialized sub leasing groups with expertise in their segment • Supporting organic growth and finding new sources of cash flow through smaller intensification opportunities Unenclosed Food & Lifestyle & Enclosed Mall Intensification Retail
Slide 37: 2017 Leasing Results
DRIVING ORGANIC GROWTH 2017 LEASING RESULTS New Leasing Renewal Leasing Completed 2.0 million square feet of new leasing in Renewed 4.5 million square feet in 2017 at $18.99 2017 at $19.61 per square foot per square foot, an increase of 5.8% compared to 2016 $19.61 $19.22 91.1% 85.8% 2016 2017 2016
Slide 38: Retailers Adapting to Current Market Environment
RETAILERS ADAPTING TO CURRENT MARKET ENVIRONMENT • Retailers are still adapting to find right mix of e-commerce and bricks & mortar strategy • Consumers have more access to information than ever before • The successful retailers will be the ones that merge the Physical World with the Digital World 3
Slide 39: Evolving & Resilient Tenant Mix
EVOLVING & RESILIENT TENANT MIX ADAPTING TO THE EVER CHANGING RETAIL ENVIRONMENT Change % of Rent Retailer Category since Key Brands 2017 2007 Grocery/ Pharmacy Liquor/ 27.8% 3.3% Restaurant Personal Services 20.3% 4.2% Value Retailers 15.2% 2.6% Specialty Retailers 10.2% 0.1% Furniture and Home 9.9
Slide 40: Landlords Must Also Adapt: Experience, Engagement & Convenience
LANDLORDS MUST ADAPTING ALSO THE RIGHT SETTING – EXPERIENCE, ENGAGEMENT & CONVENIENCE • Providing tenants with space where they can provide experiential environments • Restaurant growth is strong • Shopping centres will become more of a social gathering place than ever before 40
Slide 41: The New Retail Environment
THE “NEW” RETAIL ENVIRONMENT Provide flexible space as retailers find the right tenant mix for our properties - Lifestyle/Restaurants/Leisure - Pop-up retail - Omni channel Case Study: Lululemon Pop-Up to long term lease at Georgian Mall • Provided a short term storefront as a test location • The su
Slide 42: Well Diversified National Tenant Base
WELL DIVERSIFIED NATIONAL TENANT BASE NO SINGLE TENANT OVER-EXPOSURE Weighted Avg Annualized Rental Number Of NLA (Sq. Ft. in Top 10 Tenant Name Remaining Lease Revenue Locations '000s) Term (Yrs) 1 4.8 % 80 2,067 7.5 2 4.3 % 82 2,050 4.8 Top Ten Tenants are all 3 4.2 % 29 3,607 9.3 sound operators
Slide 43: Leveraging Current Relationships and Forging New Ones
LEVERAGING CURRENT RELATIONSHIPS AND FORGING NEW ONES WITH CANADA’S MAJOR MARKET PORTFOLIO WE CAN DELIVER • Major Market focus and presence to offer an avenue to introduce new concepts across a variety of retail formats • Able to support the full range of tenant opportunities Toronto, ON Ottawa, ON
Slide 44: Leveraging Current Relationships and Forging New Ones
LEVERAGING CURRENT RELATIONSHIPS AND FORGING NEW ONES WITH CANADA’S MAJOR MARKET PORTFOLIO WE CAN DELIVER • Major Market focus and presence to offer an avenue to introduce new concepts across a variety of retail formats • Able to support the full range of tenant opportunities Vancouver, ON Calgary,
Slide 45: Development and Residential Initiative
DEVELOPMENT AND RESIDENTIAL INITIATIVE UNLOCKING THE INTRINSIC VALUE Andrew Duncan Senior Vice President, Developments 45
Slide 46: Unlocking Intrinsic Value
UNLOCKING INTRINSIC VALUE REALIZING THE FULL POTENTIAL OF OUR CORE ASSETS CANADA’S MAJOR MARKET PORTFOLIO UNLOCKING INTRINSIC VALUE • Focusing on transit-oriented urban intensification in major markets • Mostly mixed-use with residential rental and/or condo development • Strong residential team with
Slide 47: Development Team
DEVELOPMENT TEAM • Balanced, experienced talented team • Established strong industry relations • Identify opportunities in robust pipeline of urban, transit-oriented sites • 33 team members – Planners, Engineers, Construction Managers, Analysts • Three office locations – Toronto, Calgary, Montreal P
Slide 48: Development Has Been Instrumental to Long Term Growth
DEVELOPMENT HAS BEEN INSTRUMENTAL TO LONG TERM GROWTH • Development has been an internalized function for RioCan since 2003 • Increased RioCan’s presence in Canada’s six major markets • Grown in expertise to handle mixed- use retail and residential development • Added strength to handle complex deve
Slide 49: Unmatched Expertise and Depth
UNMATCHED EXPERTISE AND DEPTH • Mixed-use projects include: o Strada (College & Manning, Toronto) o Litho. (740 Dupont, Toronto) o Frontier (Gloucester, Ottawa) o Brio (Brentwood Village, Calgary) o The Well (Front & Spadina, Toronto) • Forged strong strategic relationships with leading industry par
Slide 50: Healthy Pipeline
HEALTHY PIPELINE • Constantly analyze portfolio for sites near transit infrastructure • Pursuing site plan approvals or development permits in GTA, Ottawa and Calgary • Perfectly positioned to execute on RioCan’s long-term growth strategy OTTAWA CALGARY GTA 50
Slide 51: Innovation at The Well
INNOVATION AT THE WELL • RioCan continues to pursue innovative design elements in its projects • The Well will utilize deep water lake cooling that harnesses Lake Ontario’s capacity for its heating and cooling system 51
Slide 52: Innovation at Gloucester (Frontier)
INNOVATION AT GLOUCESTER (FRONTIER) • Frontier will employ a geothermal system for its heating and cooling system that capitalizes on its location above a geothermal source which reduces operating costs 52
Slide 53: Residential Projects: Litho. – Dupont
RESIDENTIAL PROJECTS Litho. – 740 Dupont • Interior design and amenities pay homage to a neighbourhood steeped in craftsmanship, history and creativity • Clean design, natural materials such as concrete, infused with bold pop of colour throughout common spaces • Retail Design: o Structural design su
Slide 54: Residential Intensification – Yonge Sheppard Centre
UNLOCKING INTRINSIC VALUE RESIDENTIAL INTENSIFICATION – YONGE SHEPPARD CENTRE YONGE SHEPPARD CENTRE, TORONTO, ON Location: Located at the thriving intersection Yonge & Sheppard, with access to 2 subway lines and highway 401 Property Type: Mixed-use with incremental 156k sf retail, as well as 258k sf
Slide 55: Residential Intensification: Pivot – Yonge Sheppard Centre
UNLOCKING INTRINSIC VALUE RESIDENTIAL INTENSIFICATION Pivot – Yonge Sheppard Centre PIVOT (YONGE SHEPPARD CENTRE), TORONTO, ON • Renovation and expansion of retail space • Intensification through the addition of a new 36 storey residential tower containing 361 residential rental units • Adding 100,0
Slide 56: Development and Residential Initiative
DEVELOPMENT AND RESIDENTIAL INITIATIVE UNLOCKING THE INTRINSIC VALUE Jonathan Gitlin Senior Vice President, Investments and Residential 56
Slide 57: Current Active Residential Projects
DEVELOPMENT AND RESIDENTIAL INITIATIVE CURRENT ACTIVE RESIDENTIAL PROJECTS Building Property/City/Province Rental Units Condo Units Yonge & Eglinton, Toronto, Ontario 466 623 King & Portland, Toronto, Ontario - 134 Gloucester, Ottawa 222 - Brentwood Village, Calgary 163 - Yonge Sheppard Centre, Toro
Slide 58: Unparalleled Major Market Pipeline: Urban Toronto
UNPARALLELED MAJOR MARKET PIPELINE URBAN TORONTO HIGHLIGHTS: SELECTED HIGH DENSITY, LOCATIONS 1 Demographics, 5km radius Dense population*: • 481,000 people Desirable demographic*: • HH Income: $130,000+ • Post-secondary education: 65%+ Selected Urban Toronto '000s sf RioCan Developments (100%) 9 Yo
Slide 59: Unparalleled Major Market Pipeline: Urban Highlights
UNPARALLELED MAJOR MARKET PIPELINE URBAN HIGHLIGHTS: SELECTED HIGH DENSITY, LOCATIONS 59
Slide 60: RioCan Living
RIOCAN LIVING Each RioCan Living project is supported by: • Impeccable management backed by the proven track record of RioCan. • Easy access to major commuter routes. • Best in class architecture in iconic locations. • Animated, community-focused event programming. • Best in class communal amenities
Slide 61: RioCan Mixed-Use Development Team
RIOCAN MIXED-USE DEVELOPMENT TEAM CROSS-FUNCTIONAL COORDINATION ACROSS VARIOUS DISCIPLINES • Product Development Investments & • Acquisitions/Dispositions/Joint Residential Ventures • Branding • Marketing • Initial planning and RioCan • De-leasing initiatives concept Developments Mixed-Use Leasing •
Slide 62: Brentwood Shopping Centre: Site Context
BRENTWOOD SHOPPING CENTRE SITE CONTEXT • 2008: Air right sale to residential condominium developer (533,000 sq. ft.) for University City project University City (727 residential units) Property Boundary BRIO • 2016: RioCan achieved zoning Brentwood approval for an additional 1.1M C Train - Brentwood
Slide 63: BRIO Project Renders
BRIO PROJECT RENDERS • BRIO is a joint-venture project between Boardwalk REIT and RioCan • 12 storey, 163 unit residential rental building with retail at grade • Construction underway, expected completion in 2020 • Contemporary design, premium living, and condo- style amenities • Redefining Brentwoo
Slide 64: Curated Communities
CURATED COMMUNITIES RioCan enhances the living experience of its residents through: • Impeccable management backed by the proven track record of RioCan. • Easy access to major commuter routes. • Best in class architecture in iconic locations. • Animated, community- focused event programming. • Best
Slide 65: Partnerships to Leverage Expertise and Mitigate Risks
PARTNERSHIPS TO LEVERAGE EXPERTISE AND MITIGATE RISKS BEST IN CLASS PARTNERS AND IMPECCABLE MANAGEMENT Carefully selected partners in specific regions Frontier - Gloucester Brio – Brentwood Village Litho. – 740 Dupont 65
Slide 66: Example of Curated Communities: Strada
EXAMPLE OF CURATED COMMUNITIES: STRADA Strada – College & Manning • Classic red-brick façade at street level and interior design details and amenities that fit into the Italian heritage of Toronto’s Little Italy • Exposed brick details, smoked mirror and antique architectural details found throughou
Slide 67: Residential Projects: Litho. – Dupont
RESIDENTIAL PROJECTS Litho. – 740 Dupont • Interior design and amenities pay homage to a neighbourhood steeped in craftsmanship, history and creativity • Clean design, natural materials such as concrete, infused with bold pop of colour throughout common spaces • Modern suite design with industrial t
Slide 68: Strategic Acquisitions and Partnerships
STRATEGIC ACQUISITIONS AND PARTNERSHIPS SEIZING OPPORTUNITIES AND MANAGING RISK CANADA’S MAJOR MARKET PORTFOLIO SELECTIVE ACQUISITIONS WITH PARTNERS • With the best locations in the six major markets • Creates opportunities for partners to contribute to the project o Expertise – development and mana
Slide 69: Strategic Acquisitions and Partnerships: Best in Class Partners
STRATEGIC ACQUISITIONS AND PARTNERSHIPS COMBINING THE BEST IN RETAIL WITH BEST IN CLASS PARTNERS TO CREATE LANDMARK COMMUNITIES Through strategic acquisitions and partnerships, RioCan owns the best locations in the six major markets, and utilizes best-in-class partner expertise to maximize value for
Slide 70: Strategic Acquisitions: Yorkville
STRATEGIC ACQUISITIONS YORKVILLE Location: Transit oriented and in the heart of prestigious Yorkville, one of Toronto’s most high-end shopping and residential areas. 11 Yorkville Property Type: Mixed-use with potential for up to 0.5M sf of luxury condominium and retail uses and 19 Yorkville up to 82
Slide 71: Capital Structure and Financing Strategy
CAPITAL STRUCTURE AND FINANCING STRATEGY Qi Tang Senior Vice President and CFO 71
Slide 72: Measured Approach to Development
MEASURED APPROACH TO DEVELOPMENT Max. As at Target Permitted Dec. 31, 2017 Properties Under Development (“PUD”) & Inventory - $1.2 B $1B +/- $200M PUD and Inventory as % of Gross Assets – per Line of Credit Covenant 15% 8.5% ~ 10% Investment in Greenfield Development and Inventory as % of Unitholder
Slide 73: Self Funding Development
SELF FUNDING DEVELOPMENT NOT DEPENDENT ON EQUITY OFFERINGS OR INCREASING LEVERAGE Sources of Funding for Development: • Disposition net proceeds • Sales proceeds from condominium/townhouse developments or air rights sales • Strategic alliances to reduce capital requirements and mitigate risks • Exce
Slide 74: Prudent Management of Development Risks
PRUDENT MANAGEMENT OF DEVELOPMENT RISKS • Laddered development • Pre-leasing requirement for commercial development and sound market studies for residential development • Well-established internal control process for development approvals and construction management • Strategic alliances to reduce c
Slide 75: Strong Balance Sheet
STRONG BALANCE SHEET CONTINUE TO MAINTAIN PRUDENT CAPITAL MANAGEMENT & FLEXIBLE CAPITAL STRUCTURE Capital Structure Metrics Target 2017 Leverage 38% - 42% 41.4% Debt/EBITDA <8.0x 7.57x Interest Coverage >3.0x 3.84x Debt Service Coverage >2.25x 3.06x Fixed Coverage CONSISTENTLY ABOVE 95% >1.10x 1.17x
Slide 76: Industry Leading Financial Profile: RioCan vs. Peers
INDUSTRY LEADING FINANCIAL PROFILE RIOCAN VS. PEERS Leverage Debt to EBITDA 46.0% 8.3x 41.4% 7.6x Debt Service Coverage Interest Coverage 3.1x 3.9x 2.6x 3.1x Source: company reports; Peers: FCR, SRU, CHP, CRR, CRT 76
Slide 77: Industry Leading Financial Profile: Canada vs. U.S.
INDUSTRY LEADING FINANCIAL PROFILE CAPITAL STRUCTURE PROFILE: CANADA VS. U.S. Historical Background and Stronger Demand for Yield: o Canadian REITs have a shorter history and higher demand for yield o US Retail REITs have much higher institutional ownership (~86%*) Less Risky Retail Operating Enviro
Slide 78: Capital Management Strategy
CAPITAL MANAGEMENT STRATEGY • Maintain strong balance sheet with leverage in the 38% - 42% range • Maximize unit repurchases under NCIB subject to our leverage target • Self-fund development • Balance unsecured and secured debt ratio in the 60/40 split range • Maintain financial flexibility by manag
Slide 79: Strong Balance Sheet
STRONG BALANCE SHEET THE FINANCIAL RESOURCES TO FUEL GROWTH AND WEATHER MARKET TURMOIL CANADA’S MAJOR MARKET PORTFOLIO STRONG BALANCE SHEET • Low leverage Low • Low cost of debt Leverage • Laddered debt maturity and mostly fixed rate • Access to multiple sources of capital Multiple • Large unencumbe
Slide 80: Closing Remarks
CLOSING REMARKS Ed Sonshine Founder and CEO 80
Slide 81: RioCan
RIO*CAN
Slide 82: Slide 82
RioCan Real Estate Investment Trust — Investor Day (April 2018) on 6ix