9 0 2 r o real estate p investment e n a n afterthestorm · afterthestorm real estate investment...

RIOCANANNUALREPORT2009

AFTER THE STORM

REALESTATEINVESTMENTTRUST

P r e s i d e n t ’ s R e p o r t t o U n i t h o l d e r s

RIOCAN REAL ESTATE INVESTMENT TRUST ANNUAL REPORT 20092

capitalizing on opportunities.

Our strategy is built on strength,experience, and a conservativeapproach. As the past eighteenmonths have shown, RioCan’sstrategy has been tested,and proven sound. RioCanmanages the best retail portfolioin Canada, carefully acquired

and developed over the lastsixteen years. Your Trust’sstrategy is based on owningprime retail locations acrossCanada’s core markets wherethe majority of the populationresides and where the mostpopulation growth occurs.Most Canadians are located

RioCan’s ability to access capitalduring a period of limitedliquidity and our substantial cashbalance is a strong foundation forconservative and disciplinedexpansion. We have weathered thestorm, and are poised to seize theinitiative. Your Trust will do thisby building on our strengths and

The recent economic storm powerfully tested RioCan, Canada’s largest real estateinvestment trust. Although we experienced some challenges throughout the year, we haveemerged strong, specifically with steady occupancy, improving rental rates on an ever morediversified tenant base, strong cash reserves, and a conservative balance sheet.

Edward Sonshine, Q.C.President and Chief Executive Officer,RioCan Real Estate Investment Trust

in the many cases are the sametenants we deal with here inCanada. In so doing, we willenlarge the RioCan footprint,as well as our revenues, earningsand profits. And this expansionemploys a strategy to owngrocery-anchored centres indensely populated markets, whichare subject to fewer fluctuationsin discretionary income.

RioCan will always remainproudly Canadian. While RioCanhas engaged a very capableAmerican partner in themanagement of our USproperties we intend to beactively involved in acquisitionsand operations. This recentportfolio expansion represents asmall portion of RioCan’s totalassets. Consider: approximately97% of our rental revenue isgenerated north of the border.However, the current opportunityin the US sets the stage forRioCan to generate significantgrowth in the long term.

Finally, with changes to theIncome Trust rules coming intoeffect at the end of the year,I would like to reassure ourunitholders that it is RioCan’sintention to qualify for the REITexemption under the currentlegislation as we enter 2011.

We thank you, our unitholdersfor your continuing confidence.

Edward Sonshine, Q.C.President and Chief Executive Officer,RioCan Real Estate Investment Trust

new acquisitions. The value ofCanadian real-estate assets hasremained relatively consistent,especially compared to morevolatile markets south ofthe border.

Many of the properties comingavailable in the US are ofexceptional quality, and arecurrently being held by stressedvendors, constrained by a lack ofliquidity. These vendors are notdisposed to sell due to issues withthe property. Rather, many ofthese operators have difficultymeeting demands of lendersand satisfying more stringentconditions on accessing capital.As such, acquisitions can bemade at considerably less thanreplacement costs. In fact, webelieve that the next 12 to 18months are a time of uniqueopportunities for your Trust.

The United States is a very largecountry and must actually beconsidered as several differentmarkets. We have chosen to focusfirst on the Northeast, a proven,stable region. This is not an areacharacterized by booms orbubbles but is a mature,consistent market with a stableeconomic performance; a perfectfoothold for RioCan. Consider:the six states in the northeastalone have a population of60 million or almost double thatof Canada. With 14–15 millionpeople, Pennsylvania itselfhas approximately half thepopulation of Canada. YourTrust has the ability to recognizethe value of existing propertiesand the capital reserves to seizethese historic opportunities as wellas evaluating the tenants, who

within close proximity to aRioCan shopping centre.

Our multi-layered strategy isdesigned to flourish in the goodtimes, and preserve our positionin difficult ones. As a result, astable income stream is providedto Unitholders. During the storm,our focus was on strengtheningand preserving our balance sheet.Now that a recovery seems tobe under way albeit slow andsomewhat fragile, RioCan isrefocusing on income growththrough acquisitions, selectivenew development and organicrevenue growth throughincreased rental rates andproperty intensification.

Now is the time to assert ourselvesin our areas of expertise with ourproven approach of discipline,prudence and an eye toopportunity in retail real estate.Accordingly, at the end of 2009,including early February 2010, weexpanded our portfolio with theaddition of more than 2.4 millionsquare feet through acquisitionsthat invested more than $530million. These acquisitions thatwere completed at attractivecapitalization rates, will providefor solid income growth in 2010,have further strengthenedRioCan’s portfolio inWestern Canada.

Expansion in theUnited StatesAs the real estate market presentsopportunities in times of distresssouth of the border, we have beenclosely studying that market.

In fact, we have been closelyfollowing that market for the lastseveral years. Canada presentsrelatively few opportunities for


A f t e r t h e S t o r m


A WINNING PROPOSITION


97% OCCUPANCY

RioCan’s tenant list is comprisedlargely of the dominant retailerwithin the market. Of note,RioCan’s tenant portfoliois diverse, with no tenantrepresenting more than 5%of total rental revenue. In total,RioCan’s top 25 tenants generateapproximately 49.8% of totalrevenues. This diversity providesRioCan and its unitholders astable cash flow stream andgreatly reduces the exposureto any one particular tenant.

RioCan’s top 25 tenants areCanadian retail leaders andrepresent a spectrum ofconsumer products and services.Canada’s retail environment isconsiderably more concentratedthan in the US. In Canada,

1 Metro/A&P/Super C/Loeb/Food Basics

2 Famous Players/Cineplex/Galaxy Cinemas

3 Walmart

4 Canadian Tire/PartSource/Mark’s Work Wearhouse

5 Zellers/The Bay/Home Outfitters

6 Winners/HomeSense

7 Loblaws/No Frills/Fortinos/Zehrs/Maxi

8 Staples/Business Depot

9 Reitmans/Penningtons/Smart Set/Addition-Elle/Thyme Maternity

10 Shoppers Drug Mart

11 Harvey’s/Swiss Chalet/Kelsey’s/Montana’s/Milestone’s

12 Future Shop/Best Buy

13 Sport Mart/Sport Chek/Sports Experts/National Sports/Coast Mountain Sports


14 Sobeys/IGA/Price Chopper/Empire Theatres

15 Chapters/Indigo

16 Dollarama

17 TD Bank

18 PetSmart

19 The Brick

20 Blue Notes/Stitches/Suzy Shier/Urban Planet

21 Safeway

22 Sears

23 Lowe’s

24 Premier Fitness

25 Rona/Revy/Reno



RioCan generates continuedgrowth in Canada throughacquisitions, asset intensification,and Greenfield development.

Building the Portfolio ThroughDesirable AcquisitionsRioCan constantly monitors theCanadian market for acquisitions.In 2009, however, the acquisitionmarket was challenging. Whenassets do become available,RioCan can use its substantialliquidity position to acquire primeproperties, at favourable prices.

In late 2009, the acquisitionmarket heated up. For instance,the acquisition of three Walmartanchored properties in WesternCanada, strengthened RioCan’s

to 2008 where RioCan completed$163 million.

RioCan typically provides propertymanagement, development andleasing services for co-ownedproperties. Over the long-term, thesejoint ventures produce consistent,third-party fees from long-establishedincome properties.

Your Trust has a number of solidand expanding relationships withmany of Canada’s largest investmentfunds and institutional investors.

DevelopmentTo maintain leadership in oursector, RioCan adapts to ever-changing retail opportunities.RioCan’s platform is based on twoprimary forms of development;

land use intensification andGreenfield development.

Intensification Projectsin the Urban CoreGiven the prohibitive costsassociated with expanding majorinfrastructure outside of urbanlocations, environmental issuesand scarce transit dollars, optimaluse of mixed-use space in urbancentres is increasingly a priority.And RioCan will be at theforefront of these opportunities.

An example of RioCan’s urbanintensification projects is theinnovative joint venture developmentin Toronto, located at a one acresite at Queen and Portland, justwest of the downtown core.

The project is a joint venture withTribute Communities, a homebuilder which develops, marketsand owns the residential component.The site will be a mixed-use fourstorey building featuring a residentialcomponent and three stories ofapproximately 92,000 square feetof retail space. RioCan has a40% profit participation rightin connection with sale of theresidential units. Your Trust ownsand manages the retail portion ofthe property, which is currentlyleased to three major retailers:Winners, Loblaws, and Joe Fresh.Construction on the site hascommenced and RioCan anticipatesthat this project will be completedin fourth quarter of 2010.

portfolio in these expandingand vital markets. Two of theproperties were acquired with apartner. In 2009, RioCan completedtotal acquisitions of $348 millionthat added approximately 1.8million square feet to RioCan’sportfolio and by early February 2010had completed an additional $184million of acquisitions that addedapproximately 641,000 square feet.

Partnerships through joint venturesallow your Trust to increase thescale of its acquisitions andenhance returns from additionalfees. Indicative of the success ofRioCan’s acquisition team in a yearof challenges, acquisitions amountedto $348 million last year compared


The New Shape ofUrban IntensificationRetail centres are typically builtwith lot coverage of approximately25% of the underlying land.Where tenant demand exists andplanning rules permit, RioCanendeavours to obtain additionaldensity on its existing propertyportfolio. Indeed, expanding andredeveloping existing shoppingcentres is part of RioCan’smandate, so that our propertiesremain premiere retail destinations.Further, since the Trust alreadyowns the underlying land,development risk is relatively lowerwhich can enable stronger returnson new invested capital.



COVERINGOUR MARKETS


Nearly 25 million Canadians,or 80% of the population, residein urban markets. RioCan aimsto develop a comprehensivepresence in these core urbanareas. In Canada, there are sixurban centres that havepopulations of more than onemillion,: Montreal, Ottawa/Hull, Toronto, Calgary,Edmonton and Vancouver.Combined, these six cities havea population of 13.6 millionresidents, or 45% of Canada’spopulation, based on StatisticsCanada 2006 Census reports. Tocapitalize on population growth,

the dominant, unenclosedshopping centre(s).

Occupancy

The occupancy rate is a keymeasure of successful retail spacemanagement. A high occupancyrate reflects RioCan’s siteselection, property managementand marketing. The numberstell the story. For the last eightquarters, RioCan’s occupancyhas been around 97%.Throughout 16 years of operation,RioCan’s occupancy has neverfallen below 95%. RioCan’sconsistent track record of stable

occupancy serves as a strongfoundation for RioCan torealize its goal to provideunitholders with stable andreliable distributions.

Leasing

RioCan has a capable andexperienced leasing team,marketing high demand propertiesand established portfolios. Ofnote, the leasing group had aproductive and rewarding year in2009. During the year RioCanleased more than 4.1 millionsquare feet through new leasing onthe existing portfolio and renewals.

RioCan operates in these centresand the adjacent areas.

Population growth drives retail sales,which in turn enhances demand forpremium retail space and increasedrents. RioCan has assembled aportfolio with a powerful presencein each of these markets with almosttwo thirds of RioCan’s rentalrevenue generated in these sixmarkets. High-growth markets offerother opportunities for enhancedvalue, such as rezoning for furtherdevelopment and growth.

When outside of these primarymarkets, RioCan seeks to own


Moreover, the rent spreads uponrenewal leases in 2009 werepositive, enhancing stable andreliable cash flows.

Greenfield DevelopmentAs part of RioCan’s conservativeand disciplined strategy,Greenfield development is animportant source for growth.New development projects orthe addition of new phases toa RioCan project are onlyinitiated when a project hasbeen substantially pre-leased.

Of interest to your Trust isGreenfield Development on

land that has not been previouslydeveloped. During 2009RioCan completed approximately696,000 square feet of Greenfielddevelopment and as ofDecember 31, 2009, hadGreenfield Development projectsthat will, upon completion,comprise approximately 8.5million square feet, of whichRioCan’s ownership interestwill be approximately 3.0 millionsquare feet. These developmentsgenerate positive returns andimprove the diversity and qualityof the portfolio.

with an owner who hasan in-depth knowledge of thelocal market. Our expansionrecognizes that in the UnitedStates, there are some tremendousinvestment opportunities, withowners who require capital.RioCan’s US Investment strategyleverages our partner’s localmarket expertise with the strengthof our balance sheet. With properexecution of our strategy, thereturns in the United States canexceed those of Canada.

Consistent with our Canadianstrategy, RioCan is partneringwith Cedar Shopping Centres, Inc

(“Cedar”), a US real estateinvestment trust. Cedar’s focus issupermarket-anchored shoppingcentres and drug-store anchoredconvenience centres primarilylocated in the north-eastern andMid-Atlantic states of the US.

Under the terms of theagreement, RioCan has formeda joint venture for the acquisitionof retail real estate in the US tobe owned 80% by RioCan and20% by Cedar. In addition,RioCan has acquiredapproximately a 14% equityinterest in Cedar. This enablesRioCan to be active in

assets, such as grocery-anchoredshopping centres. Of note,approximately 40% of RioCan’sUS rental revenue is generatedfrom grocery tenants. Investmentswill be made prudently and are,on a percentage basis, a relativelysmall portion of RioCan’soverall portfolio.

RioCan recognizes that theUnited States is a distinct marketwith many sub-markets thatdiffer from Canada. To this end,RioCan is not attempting tosimply transplant or transposeour business model in theUnited States, but rather partner

management, strategy anddecisions to ensure the successof our investment. The Trust’smandate is to deliver tounitholders consistent and reliablecash distributions that increaseover the long term. To do this, theTrust develops and implements astrategy of developing, owning,operating and managing retail realestate, mixed-use, and office realestate. RioCan has grown itsbusiness by using prudentstrategies, core competencies andconservative financial leverage.The strategy is complemented bylong-term strategic partnerships

RioCan has enjoyed very stronggrowth in Canada since itsinception in 1993. However, fora number of years, RioCan hasclosely monitored the UnitedStates’ market, so that any movein it is both calculated andstrategic. The purpose ofRioCan’s investment in theUnited States is to provide aplatform for additional growthopportunities in major marketsoutside of Canada. Consistentwith RioCan’s philosophy inCanada, investments will bemade on a disciplined basis witha preference towards defensive



and adapting to key trends incommercial real estate. Ourgrasp of key trends is facilitatedwith our commonalities withlarger tenants on both sides ofthe border, providing us with“trans-national” perspectives.Overall, we have a complementarymix of tenants with ourCanadian portfolio.

In closing, the combination ofassets in Canada’s fastest growingmarkets with a stabilized portfolioof high quality retail assets inthe US positions RioCan as oneof North America’s leadingretail landlords.


EXPERIENCE


S e n i o r M a n a g e m e n t

From left to right

Raghunath DavloorFrederic A. Waks

Edward Sonshine, Q.C.Jeff Ross

Michael ConnollyJordan RobinsMaria Rico

Kenneth SiegelJane Plett

Suzanne MarineauJonathan Gitlin

Donald MacKinnonDanny KissoonOliver Harrison

Therese CornelissenJohn Ballantyne

B o a r d o f T r u s t e e s

Dale H. Lastman

Mr. Lastman is a co-chair andpartner at Goodmans LLP. Hepractices corporate, commercialand securities law and providescounsel in connection with publicofferings, mergers andacquisitions, and businessrestructurings. Mr. Lastmanearned a LL.B. from Osgoode HallLaw School in 1982 and sits on theboard of Maple Leaf Sports andEntertainment Ltd., Ontario Lotteryand Gaming Corporation, and theHospital for Sick Children.

Frank W. King, O.C.

Mr. King is President and ChiefExecutive Officer of MetropolitanInvestment Corporation. He isalso the Chairman of NetworcHealth Inc. and a member of theAudit Committee of NetworcHealth Inc. Mr. King served as theChairman of the Audit Committeeof Wi-Lan Inc. from 1995 to 2002and of Westaim Corporationfrom 2004 to 2009. He was thePresident and Chief ExecutiveOfficer of Turbo Resources Inc.from 1991 to 1992 and was theChairman and Chief ExecutiveOfficer of the Calgary OlympicWinter Games from 1981 to 1988.He has extensive public boardexperience and holds a B.Sc.(Chemical Engineering).

Paul Godfrey, C.M.

Mr. Godfrey is the President andChief Executive Officer of theNational Post and is Chair ofthe Ontario Lottery and GamingCorporation. From 2000 to 2008,Mr. Godfrey was President andChief Executive Officer of theToronto Blue Jays Baseball Club.From 1992 to 2000, Mr. Godfreywas President and Chief ExecutiveOfficer of the Sun MediaCorporation, from 1991 to 1992was the President and ChiefOperating Officer of The TorontoSun Publishing Corporation andfrom 1984 to 1991 he was thepublisher and Chief ExecutiveOfficer of The Toronto Sun. Mr.Godfrey also served as theChairman of the Municipalityof Metropolitan Toronto. Mr.Godfrey serves as a director ofAstral Media Inc. and a trusteeof Cargojet Income Fund.

Edward Sonshine, Q.C.

Mr. Sonshine is President andChief Executive Officer of RioCanReal Estate Investment Trust. Mr.Sonshine has been the ChiefExecutive Officer of RioCan sinceit became a REIT in late 1993 andhas overseen its growth startingfrom an enterprise value of under$100 million to its currententerprise value of approximately$8.5 billion. Mr. Sonshine is amember of the board of directorsof Royal Bank of Canada, CineplexGalaxy Income Fund and is Chairof Chesswood Income Fund.Mr. Sonshine is active in thecommunity and serves as ViceChair of Mount Sinai Hospitaland as Chair of the Isreal BondsOrganization of Canada / Canada-Isreal Securities, Limited.

Raymond Gelgoot

Mr. Gelgoot is a partner at Fogler,Rubinoff LLP where he practicesall aspects of real estate law.Mr. Gelgoot has been recentlyselected by his peers to beincluded in The Best Lawyers in

Canada 2010 in the field of RealEstate. Mr. Gelgoot has been amember of RioCan’s Board ofTrustees since 1996. He earnedan LL.B. from Osgoode Hall LawSchool in 1970 and was calledto the Bar in Ontario in 1972.

Sharon Sallows

Ms. Sallows is currently a memberof the board of directors of OntarioTeachers’ Pension Plan Boardand is Chair of the board ofdirectors of Executive RiskServices Ltd., a private Lloydsof London coverholder specializingin professional liability, tradecredit, privacy & network liabilityinsurance. Ms. Sallows has over25 years of business experiencehaving held numerous high levelbanking, real estate finance, realestate management and advisorypositions. Ms. Sallows is a formerexecutive vice president of MICCProperties Inc. and has previouslyheld various positions at aCanadian chartered bank,including Senior Vice President,Real Estate, Corporate Banking.Ms. Sallows received a B.A.from Carleton University in 1970,an M.Sc. from the London Schoolof Economics in 1973 and a Ph.D.from The Wharton School,University of Pennsylvania in 1978.

Clare R. Copeland

Mr. Copeland is the Chairmanof Toronto Hydro Corporation,an energy distribution company,since 1999. Mr. Copeland is alsothe Chief Executive Officer ofFalls Management Company,the Developer and Operator ofCasino Niagara and FallsviewCasino Resort since 2005. From2000 to 2002, Mr. Copeland wasChairman and Chief ExecutiveOfficer of OSF Inc. and from 1993to 1999, he was Chief ExecutiveOfficer of Peoples JewellersCorporation. Mr. Copeland alsoserved as Chairman of Sun MediaCorporation from 1997 to 1999,as Chief Operating Officer of ZaleCorporation from 1991 to 1993,and as Chair of Ontario Place from1987 to 1997. Mr. Copeland is alsoa director of Danier Leather Inc.,Chesswood Income Fund,Entertainment One Ltd.,MDC Corporation and Telesat.

Ronald W. Osborne

Mr. Osborne is Chairman of theBoard of Sun Life Financial Inc.and Sun Life Assurance Companyof Canada, Chair of the Board ofGovernors of Roy Thomson Halland The Canadian Media Fund,and is a member of the board ofTim Hortons Inc. and BrookfieldRenewable Power Inc. Mr. Osborneis also a board member of Holcim(Canada) Inc. From 1999 toDecember 2003, Mr. Osborne wasthe President and Chief ExecutiveOfficer of Ontario Power GenerationInc. (“OPG”). Prior to that time heserved as President and ChiefExecutive Officer of Ontario Hydro,OPG’s predecessor. Mr. Osborneearned a Chartered Accountantdesignation in 1972 and became aFellow of The Institute of CharteredAccountants of Ontario in 1998.

Charles M. Winograd

Mr. Winograd is presidentof Winograd Capital Inc., aconsulting and investment firm.Prior to this role, Mr. Winogradheld several executive positionsat Richardson Greenshields, aprivately owned investmentdealer, including President andChief Executive Officer in 1987and Chairman and Chief ExecutiveOfficer in 1991. After theacquisition of RichardsonGreenshields in 1996 by RBCDominion Securities, Mr. Winogradbecame Deputy Chairman andDirector of RBC DominionSecurities, becoming Presidentand Chief Operating Officer in1998. From 2001 to 2008, Mr.Winograd was Chief ExecutiveOfficer of RBC Capital Markets.Mr. Winograd holds an MBA fromthe University of Western Ontarioand is a Chartered FinancialAnalyst (CFA) charterholder.Mr. Winograd is a member of theboard of directors of RBC DexiaInvestor Services, Mount SinaiHospital, Talisman Energy Inc.,James Richardson + Sons,Limited and Tamir Fishman.


United States of America Canada Total

Total Net Leasable Area (“NLA”) (sq. ft.): Retail Retail Office Total

Income Producing Properties 157,997 33,601,534 1,583,434 35,184,968 35,342,965Properties Under Development 2,285,209 2,285,209 2,285,209

Total 157,997 35,886,743 1,583,434 37,470,177 37,628,174

Number of Tenancies 5,890

Occupancy:

United States of America Canada Total

Retail Occupancy 95.8% 97.4% 97.4%Office Occupancy 95.8% 95.8%

Total Occupancy 95.8% 97.4% 97.4%

Geographic DiversificationNumber of properties

Percentage of annualized Income producing Properties underrental revenue properties development Total

Ontario 58.4% 151 8 159Quebec 17.1% 40 40Alberta 12.0% 26 3 29British Columbia 7.5% 14 14New Brunswick 1.8% 6 1 7Saskatchewan 0.5% 1 1Manitoba 1.3% 2 2Prince Edward Island 0.4% 1 1Newfoundland 0.4% 2 2Nova Scotia 0.1% 1 1US 0.5% 2 2

100.0% 246 12 258

Anchor and National TenantsPercentage of annualized Percentage

rental revenue of total NLA

Anchor and National Tenants 84.5% 83.4%

Top Ten Sources of Revenue by Tenant (including US)Percentage of annualized Weighted average

Ranking Tenant rental revenue remaining lease term (yrs)

1. Metro/A&P/Super C/Loeb/Food Basics 5.0% 9.12. Famous Players/Cineplex/Galaxy Cinemas 4.9% 13.23. Walmart 4.3% 12.74. Canadian Tire/PartSource/Mark’s Work Wearhouse 3.9% 11.65. Zellers/The Bay/Home Outfitters 3.4% 9.36. Winners/HomeSense 3.1% 5.27. Loblaws/No Frills/Fortinos/Zehrs/Maxi 2.6% 5.68. Staples/Business Depot 2.3% 7.59. Reitmans/Penningtons/Smart Set/Addition-Elle/Thyme Maternity 1.9% 4.910. Shoppers Drug Mart 1.8% 11.0

Total 33.2%

Lease Expiries – CanadaLease expiries (NLA)

Retail Class Total NLA 2010 2011 2012 2013 2014

New Format Retail 16,666,521 1,067,976 1,454,655 1,089,276 1,433,049 1,486,6566.4% 8.7% 6.5% 8.6% 8.9%

Grocery Anchored Centre 7,542,658 977,536 1,033,563 1,078,912 542,456 1,180,20813.0% 13.7% 14.3% 7.2% 15.6%

Enclosed Shopping Centre 6,317,934 934,461 827,227 500,317 597,098 679,69114.8% 13.1% 7.9% 9.5% 10.8%

Non-Grocery Anchored Centre 1,779,588 144,569 72,798 101,097 186,717 133,2258.1% 4.1% 5.7% 10.5% 7.5%

Urban Retail 1,294,833 69,604 161,203 71,164 180,597 281,5565.4% 12.4% 5.5% 13.9% 21.7%

Office 1,583,434 381,435 186,402 121,509 130,378 132,92124.1% 11.8% 7.7% 8.2% 8.4%

Total 35,184,968 3,575,581 3,735,848 2,962,275 3,070,295 3,894,257

10.2% 10.6% 8.4% 8.7% 11.1%

Average net rent per square foot $ 14.39 $ 14.68 $ 14.28 $ 15.96 $ 16.29 $ 15.44

Lease Expiries – USLease expiries (NLA)

Retail Class Total NLA 2010 2011 2012 2013 2014

Grocery Anchored Centre 157,997 – – 2,880 1,204 1,280– – 1.8% 0.8% 0.8%

Average net rent per square foot $ 16.56 $ – $ – $ 15.78 $ 15.00 $ 23.00


R e a l E s t a t e P o r t f o l i o F a c t S h e e t

As at December 31, 2009

U n i t h o l d e r I n f o r m a t i o n


Unitholder InformationHead OfficeRioCan Real EstateInvestment TrustRioCan Yonge Eglinton Centre,2300 Yonge Street, Suite 500P.O. Box 2386, Toronto, Ontario M4P 1E4Tel: 416-866-3033 or 1-800-465-2733Fax: 416-866-3020Website: www.riocan.comEmail: [email protected]

Unitholder andInvestor ContactChristian GreenDirector, Investor RelationsTel: 416-864-6483Email: [email protected]

AuditorsErnst & Young LLP

Transfer Agentand Registrar

CIBC Mellon Trust CompanyP.O. Box 7010, Adelaide Street PostalStation, Toronto, Ontario M5C 2W9Answerline: 1-800-387-0825or 416-643-5500Fax: 416-643-5501Website: www.cibcmellon.comEmail: [email protected]

Unit ListingThe units are listed on the Toronto StockExchange under the symbol REI.UN.

Annual MeetingThe 2009 Annual Meeting of RioCan REITwill be held on Friday, June 4, 2010 at10:00 a.m. at SilverCity Theatres located atRioCan Yonge Eglinton Centre, 2300 YongeStreet, Toronto, Ontario. All unitholdersare invited and encouraged to attend.

On peut obtenir une version françaisedu présent rapport annuel sur le siteweb de RioCan: www.riocan.com.A French language version of this annualreport is available on RioCan’s website:www.riocan.com.

Forward-Looking Statement Advisory

The terms “RioCan” and the “Trust” in this document refer to RioCan Real Estate Investment Trust and should be read inconjunction with RioCan’s audited consolidated financial statements and Management’s Discussion and Analysis for thetwo years ended December 31, 2009 and 2008. Certain information included in this Annual Report contains forward-lookingstatements within the meaning of applicable securities laws. These statements include, but are not limited to, statementsmade in “Seizing the Initiative”, “RioCan’s Top 25 Retailers”, “Operations Report Canada”, “Operations Report United States”,and other statements concerning RioCan’s objectives, its strategies to achieve those objectives, as well as statements withrespect to management’s beliefs, plans, estimates, and intentions, and similar statements concerning anticipated future events,results, circumstances, performance or expectations that are not historical facts. Forward-looking statements generally can beidentified by the use of forward-looking terminology such as “outlook”, “objective”, “may”, “will”, “would”, “expect”, “intend”,“estimate”, “anticipate”, “believe”, “should”, “plan”, “continue”, or similar expressions suggesting future outcomes or events.Such forward-looking statements reflect management’s current beliefs and are based on information currently available tomanagement. All forward-looking statements in this Annual Report are qualified by these cautionary statements.

These statements are not guarantees of future events or performance and, by their nature, are based on RioCan’sestimates and assumptions, which are subject to risks and uncertainties, including those described under “Risks andUncertainties” in RioCan’s MD&A dated February 5, 2010, which could cause actual events or results to differ materially fromthe forward-looking statements contained in this Annual Report. Those risks and uncertainties include, but are not limited to,those related to: liquidity in the global marketplace associated with current economic conditions, tenant concentrations,occupancy levels, access to debt and equity capital, interest rates, joint ventures/partnerships, the relative illiquidity of realproperty, unexpected costs or liabilities related to acquisitions, construction, environmental matters, legal matters, relianceon key personnel, unitholder liability, income taxes and the investment in the United States of America (“US”) and US currency.Material factors or assumptions that were applied in drawing a conclusion or making an estimate set out in the forward-looking information may include: a less robust retail environment than has been seen for the last several years; relativelystable interest costs; an increase in acquisition capitalization rates from several years ago; a decrease in land costs forGreenfield Development; a continuing trend toward land use intensification in high growth markets; and access to equity anddebt capital markets to fund, at acceptable costs, the future growth program and to enable the Trust to refinance debts asthey mature, and the availability of purchase opportunities for growth in Canada and the US. Although the forward-lookinginformation contained in this Annual Report is based upon what management believes are reasonable assumptions, there canbe no assurance that actual results will be consistent with these forward-looking statements. Certain statements included inthis Annual Report may be considered “financial outlook” for purposes of applicable securities laws, and such financial outlookmay not be appropriate for purposes other than this Annual Report.

The Income Tax Act (Canada) (the “Act”) contains legislation affecting the tax treatment of publicly traded trusts (the “SIFTLegislation”). The SIFT Legislation provides for a transition period until 2011 for publicly traded trusts, such as RioCan, whichexisted prior to November 1, 2006. In addition, the SIFT Legislation will not impose tax on a trust which qualifies under suchlegislation as a real estate investment trust (the “REIT Exemption”). Accordingly, RioCan intends to qualify for the REITExemption prior to 2011. If this occurs, certain statements contained in this Annual Report may need to be modified.

Except as required by applicable law, RioCan undertakes no obligation to publicly update or revise any forward-lookingstatement, whether as a result of new information, future events or otherwise.

RioCan Yonge Eglinton Centre2300 Yonge Street, Suite 500P.O. Box 2386, Toronto, Ontario M4P IE4T 416 866 3033 or 1 800 465 2733F 416 866 3020W www.riocan.com

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