Investor Presentation Q3 2020 | October 2020
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BUILDING FOR
STRENGTHENING TODAY,
TOMORROW
Investor Presentation Q3 2020 | October 2020
90.2%
1
Retail:
8.1%
1
About RioCan Office:
~78%
Residential: 1.7%
1
High quality portfolio of tenants
concentrated in
Canada’s major Increasingly Providing Strong or
markets with a strong, Mixed-Use Portfolio Stable Income
diversified and largely
defensive tenant base
~42M Sq. Ft. 96.0%
Development Pipeline Committed Occupancy during
Global Pandemic
Embedded With Significant
Value Creation Room to Grow to
Potential Market Rents
1. Based on annualized rental revenues as of Sept. 30, 2020 Investor Presentation Q3 2020 | RioCan | 2
Why Invest in RioCan
• 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
Investor Presentation Q3 2020 | RioCan | 3
Deep
%
Highly compelling investment opportunity
Discount
Current negative sentiment will shift when health crisis dissipates
18.0x
Dislocated trading
price represents 15.0x
tremendous value
12.0x 5-year avg
in RioCan units FFO Multiple: 9.0x1
Current 5-yr Avg 13.2x
FFO Multiple Vs FFO Multiple 9.0x
9.0x1 13.2x
6.0x
27/Oct/16 27/Oct/17 27/Oct/18 27/Oct/19 27/Oct/20
1. Priced as of October 27, 2020 based on 1-year forward FFO/unit consensus estimate
Investor Presentation Q3 2020 | RioCan | 4
High Quality,
Sustainable Income
RioCan locations – Where Canadians Live, Work and Shop
Concentrated in transit corridors of Canada’s fastest growing major markets
Dense Population
201,3261 People
Strong Household Incomes
$117,9181
Last Mile Hub
Ideal for micro-fulfillment and
Buy Online Pick-up In Store
Residential Development
Potential
Highest and best use redevelopment
addressing rental supply gap
Percentage of annualized rental revenue as of Q3 2020
1. Population and average household income within 5Km of RioCan center, respectively;
Source: DemoStats – 2020 - Trends, ©2020 Environics Analytics
Investor Presentation Q3 2020 | RioCan | 5
High Quality,
Rent Collection during COVID-191
Sustainable Income
Positive trend through the quarter with 93%2 of tenants currently open
Rent Collection Trend Rent Collection by Tenant Type
(% billed gross rent) (% billed gross rent)
~94%
~91%
0.5% 78% of tenants
~6%
~61%
~93%
97%
Q3 cash rent collection
~85% ~17%
85%
~22%
Q3 cash rent collection
Q2 2020 Q3 2020
Strong tenants Stable tenants Potentially Vulnerable
National office and Tenants with strong or tenants
Cash Rent Collection Approved Deferrals essential / necessity medium consumer Tenants significantly
/ value and specialty offering combined with impacted by pandemic and
retail tenants with good or strong rent uses or tenants that were of
1. As of October 28, 2020
strong rent paying paying ability concern prior to pandemic
2. Based on occupied net leasable area
ability
Investor Presentation Q3 2020 | RioCan | 6
High Quality,
Sustainable Income
Strategic leasing that provides necessities for communities
Complementary necessity-based and value-oriented tenancies mitigate risks
Low Exposure to
Increasing Exposure Declining Retail Concepts
% of Annualized Confirmed closures
Retailers restructuring
total rental as % of annualized
since March 31, 2020
revenue total rental revenue
1
Globo Shoes 0.2% -%
L'Aubainerie 0.1% 0.1%
2
Reitmans 0.9% 0.3%
3
Stern Group 0.2% 0.1%
GNC 0.1% 0.1%
4
Laura 0.4% -%
Moores 0.3% 0.1%
Reducing Exposure Le Chateau
5
0.1%
0.5%
0.1%
0.1%
Others
Total RioCan Exposure 2.8% 0.9%
( as of Oct 28, 2020)
1) Globo Shoes includes Aldo, Call it Spring and Globo
2) Reitmans includes Penningtons, RW&CO., Addition Elle and Thyme Maternity
3) Stern Group includes Ricki’s, Cleo and Bootlegger
4) Laura includes Laura and Melanie Lyne
5) 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.
Investor Presentation Q3 2020 | RioCan | 7
High Quality,
Sustainable Income
Well-positioned portfolio retains and attracts tenants
Strong leasing activity despite pandemic
19.8%
89.4% 88.4%
83.1%
New
Retention Leasing 9.2%
Ratio Spread 6.7%
(%) (%)
Q1 2020 Q2 2020 Q3 2020 1
Q1 2020 Q2 2020 Q3 2020
Renewal Blended
Leasing 5.3% 4.6% 4.6% Leasing 5.6% 5.8% 5.5%
Spread Spread
(%) (%)
Q1 2020 Q2 2020 Q3 2020 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
Investor Presentation Q3 2020 | RioCan | 8
High Quality,
Sustainable Income
Additional sources bolster traditional income stream
RioCan has access to various avenues to generate income and cash flow
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
Investor Presentation Q3 2020 | RioCan | 9
NAV
Creation
Value creation through mixed-use development
With highest zoning entitlements among peers
Total Pipeline by Zoning Status • ~100% located in Canada’s six major
markets
7.3M
SF, 17% Zoning • ~73% located in the GTA
Approved
• ~99% of projects are mixed-use
Zoning residential projects
42M 14.3M
Applications
SF, 34% • ~60% located on transit
SF Submitted
Future • Completed / In development1
Estimated
20.5M SF, Density ~5,400 residential rental units
49%
~2,900 condo/townhouse units
1. In development includes projects in various stages of development
with construction currently underway or starting by 2022
Investor Presentation Q3 2020 | RioCan | 10NAV
Creation
Enhancing quality and security
of income with diversification into
RioCan’s residential rental
Asset
development Diversification
program offers Yield Enhancement - example
multiple Development
Yield based
Corp CHMC
Levered
Development
Leverage financing
benefits on IFRS Cost
5.5%
42% 1.7%
Yield
8.3%
Development is a key NOI Creation
driver of future growth Residential vs Commercial - example
and NAV expansion
Residential Development Commercial Development
Development Yield: 5.5% Development Yield: 5.5%
Cap rate: 3.5% Cap rate: 5.0%
NAV Growth over Cost NAV Growth over Cost
NAV Creation 57% 10%
Investor Presentation Q3 2020 | RioCan | 11NAV
Proven mixed-use experience and value creation
Creation
Total estimates as of Q3 2020 for five recently completed development projects
$574.9M $32.1M 5.6% $752.3M $203.6M
Total Estimated Estimated Yield on Estimated Total Estimated
Estimated Net Stabilized Total Costs Future Stabilized Incremental
Project Costs NOI Value 1 Value Creation2
1. Excludes condo gains; 2.Includes $26.2M of condo gains.
Bathurst College Centre, Toronto
ePlace, Toronto King and Portland Centre, Toronto
Frontier, Ottawa
With direct links to two subway lines Top 10 most Influential Buildings
of the 2010s (Urban Toronto) Sage Hills, Calgary 12NAV
Creation
Unlocking the full potential of transit-oriented locations
RioCan’s selected developments mapped to Toronto transit system
Demographics, 5km radius
Toronto Pearson Average population1: ~320K
International Airport
Average household income1: ~$132K
Post-secondary education: ~62%
Legend1
Under Construction: 2.3M sf
Completed Development: 0.8M sf
Future Development: 28.5M sf
Total (at RioCan’s Interest): 31.6M sf
Union
Station TTC – Existing
TTC – Under Development
CN Tower
Billy Bishop TTC – Station
Toronto City Airport
Planned Rapid Transit Line
1. Square footage accounts for mixed-used residential development projects throughout the Greater Toronto Area at RioCan’s interest
Investor Presentation Q3 2020 | RioCan | 13NAV
RioCan Living – High Quality Rental Residences
Creation
Strong leasing velocity amidst the pandemic
eCentral, Toronto, ON Frontier, Ottawa, ON Brio, Calgary, AB
• 466 units, 36-storey building • 228 unit, 23-storey building • 163 unit, 12-storey building
• ~92% leased as of Oct. 28, • 100% of Phase One, Frontier, is • Despite lease-up
2020 leased as of Oct. 28, 2020 commencing in midst of
COVID-19 and in Calgary,
• Rents averaging $3.90 per sf • Rents averaging $2.50 per sf which has also been impacted
(for market rental units) by the prolonged oil crisis,
• Phase Two Latitude is under ~53% leased as of Oct. 28,
• Stabilization expected in construction with expected 2020
Q4 2020 completion date in 2021
• Rents averaging $2.53 per sf
Investor Presentation Q3 2020 | RioCan | 14NAV
Condo / Townhouse development and value creation
Creation
Strong pre-sales for condos and townhomes despite the pandemic
Yorkville Condos Windfield Condos Windfield Townhomes
(11YV) (U.C. Tower) (U.C. Uptowns)
~99% of the 586 units pre-sold as of ~95% of the 503 units pre-sold as of Effectively all 153 units pre-sold as of
Oct. 28, 2020 with first possession Oct. 28, 2020 with first possession Oct. 28, 2020 with first possession
anticipated in 2024. Estimated anticipated in 2023. Estimated anticipated in 2022. Estimated
inventory gains1 of $65.0M-$71.0M inventory gains1 of $14.0M-$16.0M inventory gains1 of $5.0M-$5.5M
1. Estimated inventory gains are at RioCan’s interest Investor Presentation Q3 2020 | RioCan | 15Balance Sheet
Strength
Capital Structure Metrics
Target Q3 20201
Disciplined
Liquidity n/a $803M
and prudent Debt to Adjusted EBITDA 3.0x 3.22x
Debt Service Coverage >2.25x 2.71x
Ample liquidity Fixed Charge Coverage >1.10x 1.06x
bolstered by large pool
of unencumbered Unencumbered Assets N/A $8.7B
assets Unencumbered Assets to Unsecured Debt >2.0x 2.21x
NOI % from Unencumbered Assets >50% 57.1%
Unsecured vs. Secured Debt 60% / 40% 57% / 43%
Ratio of Floating Rate Debt to Total Debt2323
Yonge St.
2345
Yonge St.
APPENDIX AND FEATURE PROJECTS
Investor Presentation Q3 2020 | RioCan | 17Value creation underway
Development pipeline: 59 projects delivering 42M square feet of NLA
• 21 projects already under
Estimated Density (NLA) at RioCan's Interest
# of projects Commercial
Residential
Air Rights Sale
Residential
Total
construction and on track for
Rental Inventory
completion in the near to
(thousands of sq. ft.)
Under construction
Mixed-use residential 10 1,012 862 1,030 211 3,115
Greenfield Development 2 432 - - - 432 mid-term
Expansion & Redevelopment 9 114 - - - 114
Subtotal under construction 21 1,558 862 1,030 211 3,661
Approved Zoning
• $1.2B invested to-date to
Mixed-use residential 15 2,612 7,059 - 961 10,632 drive further income
Zoning applications submitted
Mixed-use residential 7 667 6,161 - 446 7,274
diversification and creating
Total Active Projects 43 4,837 14,082 1,030 1,618 21,567
net asset value for the long
Future estimated density term
Mixed-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
• Only $81.3M of cumulative
fair value recognized as of
Sept 30, 2020
Investor Presentation Q3 2020 | RioCan | 18Mixed-used Residential Projects Currently Under Construction
Projects # of Cost to Total Est.
Value ($ in millions and thousands of sq. ft.) Location
RioCan Ownership
% (Partner) ft)
Total NLA residential
('000s sq. at Riocan
Interest
units at
100%
date at
RioCan
Interest
Cost at
RioCan
Interest
Inventory gain
($M)
Anticipated
date of
Completion
creation Yonge Sheppard Centre Residential (Pivot)
Windfield Farm U.C. Towns
Toronto, ON
Oshawa, ON
100%
50% (Tribute)
258 258 361
166
$218.3
34.0
$237.8
35.1 $12.9
2020
2020
underway Dupont Street (Litho)
Fifth and Third East Village (5th & THIRD)
College & Manning (Strada)
Toronto, ON
Calgary, AB
Toronto, ON
50% (Woodbourne)
100%
50% (Allied)
177
754
108
89
754
54
210
-
61
48.5
114.0
30.1
77.6
118.2
42.2
2021
2021
2021
Gloucester - Phase Two (Latitude) Gloucester, ON 50% (Killam) 160 80 209 23.7 45.6 2021
Projects under
50% commercial (Allied);
The Well Toronto, ON 40% residential 2,615 1,200 na 517.0 888.4 2021 - 2023
(Allied/Diamond)
construction on Elmvale Acres - Phase One (Luma) Ottawa, ON 50% (Killam) 135 68 168 18.0 45.3 2022
track to deliver Windfield Farm U.C. Uptowns Oshawa, ON 50% (Tribute) 153 2.8 30.2 $5.0 - $5.5 2022
value creation
Westgate - Phase One (Rhythm) Ottawa, ON 100% 165 165 213 23.0 98.5 2022 - 2023
The Well - (FourFifty The Well) Toronto, ON 50% (Woodbourne) 393 196 592 10.1 143.6 2023
Windfield Farm U.C. Tower Oshawa, ON 50% (Tribute) 503 13.3 72.6 $14.0 - $16.0 2023
over the next Yorkville
Rental units and retail
Condominium (11YV)
Toronto, ON
50% (CD
Capital/Metropia)
80
422
40
211
81
586
15.0
85.2
48.4
258.4 $65.0 - $71.0
2024
2024
four years Total Under Construction 5,267 3,115 3,303 $1,152.9 $2,142.0 $96.9 - $105.4
Completed Projects
50% condo
Yonge Eglinton N/E (eCentral & eCondos) Toronto, ON (Metropia/Bazis) 712 356 1,089 na na $14.5 2019
Gloucester Phase One (Frontier) Gloucester, ON 50% (Killam) 185 93 228 na na na 2019
King and Portland Center Office and retail Toronto, ON 50% (Allied) na na na na na na
Condominium (Kingly) 421 210 132 na na $11.70 2019
Brentwood Village (Brio) Calgary, AB 50% (Boardwalk) 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
Investor Presentation Q3 2020 | RioCan | 19HWY 400
HWY 407
HWY 7
VAUGHAN, ON
RIOCAN COLOSSUS CENTRE
Investor Presentation Q3 2020 | RioCan | 20• >50 acre site currently
consisting of 571k sq. ft of
income producing retail
• ~10M sq. ft. of mixed-use
density contemplated involving
VAUGHAN, ON multi-phase development
RIOCAN COLOSSUS CENTRE Investor Presentation Q3 2020 | RioCan | 21• 36-storey, 1.1 million square
feet1 of office – 84% pre-leased
• ~420k square feet
of retail
• 592-unit residential rental
under construction
TORONTO
THE WELL
Investor Presentation Q3 2020 | RioCan | 22TORONTO
THE WELL
Investor Presentation Q3 2020 | RioCan | 23• ~315k sq. ft. of office
• ~305k sq. ft. of retail
• 36-storey, 361 unit residential
rental - completed
TORONTO
YONGE SHEPPARD CENTRE & PIVOT Investor Presentation Q3 2020 | RioCan | 24Frontier, Phase 1 – 100% leased
• 33-storey, 228 unit residential rental
Latitude, Phase 2 – under construction
based on success of Phase 1
Gloucester • 20-storey, 209 unit residential rental
Frontier & Latitude Investor Presentation Q3 2020 | RioCan | 25• 8-storey, 210 unit residential rental
• ~30.5k sq. ft. of retail
• Under construction for
completion Summer 2021
Toronto
Litho Investor Presentation Q3 2020 | RioCan | 26• 7-storey, 61 unit residential rental
• ~5.6k sq. ft. of retail
• Under construction for
completion Spring 2021
Toronto
Strada Investor Presentation Q3 2020 | RioCan | 27NON-GAAP FORWARD LOOKING
MEASURES INFORMATION
RioCan’s consolidated financial Certain information included in this presentation contains forward-looking statements within the meaning of applicable
statements are prepared in accordance securities laws including, among others, statements concerning our objectives, our strategies to achieve those objectives, as
with IFRS. Consistent with RioCan’s well as statements with respect to management's beliefs, plans, estimates, and intentions, and similar statements
management framework, management concerning anticipated future events, results, circumstances, performance or expectations that are not historical facts.
uses certain financial measures to Certain material factors, estimates or assumptions were applied in drawing a conclusion or making a forecast or projection
assess RioCan’s financial performance, as reflected in these statements and actual results could differ materially from such conclusions, forecasts or projections.
which are not generally accepted
accounting principles (GAAP) under Forward-looking information is not a guarantee of future events or performance and, by its nature, is based on RioCan’s
IFRS. current estimates and assumptions, which are subject to numerous risks and uncertainties. Such risks and uncertainties
include, but are not limited to, the effects of COVID-19 on the businesses, operations and financial positions of RioCan and
The following measures, Funds From its tenants, as well as on consumer behaviors and the economy in general, including the length, spread and severity of the
Operations (“FFO”), Net Operating pandemic; the nature and length of the restrictive measures implemented or to be implemented by various levels of
Income (“NOI”), Adjusted Earnings governments in Canada; RioCan’s tenants' ability to pay rents as required under their leases; the availability of various
before interest, taxes, depreciation support programs that are or may be offered by the various levels of government in Canada and worldwide; domestic and
and amortization (“Adjusted global supply chains; timelines and costs related to the Trust’s development projects; the pace of property lease up and
EBITDA”), Debt to Adjusted EBITDA, rents and yields achieved upon development completion; potential changes in leasing activities, market rents and property
Same Property NOI, Interest valuations; the availability and extent of rent deferrals offered or to be offered by the Trust; domestic and global credit and
Coverage, Debt Service Coverage, capital markets, and the Trust’s ability to access capital on favourable terms or at all, and its ability to maintain its current
Fixed Charge Coverage, and Total credit ratings; total market return and the dividend yield of the Trust’s Units; and the health and safety of our employees,
Enterprise Value as well as other tenants and people in the communities that our properties serve. For more information on other risks, uncertainties and
measures discussed in this presentation, assumptions that could cause the Trust's actual results to differ from current expectations, refer to the “Risks and
do not have a standardized definition Uncertainties” section in RioCan’s Third Quarter 2020 MD&A for the period ended September 30, 2020 and in its most
prescribed by IFRS and are, therefore, recent Annual Information Form, available at www.sedar.com and at www.riocan.com.
unlikely to be comparable to similar
measures presented by other reporting The forward looking information contained in this presentation is made as of the date hereof. Except as required by
issuers. applicable law, RioCan undertakes no obligation to publicly update or revise any forward-looking statement, whether
as a result of new information, future events or otherwise.
Investor Presentation Q3 2020 | RioCan | 28You can also read
