- Net income of $598.4 million and FFO per unit 1 of $1.60
- Distribution increase of 6.25% to $1.02 per unit annually effective February 2023
TORONTO, Feb. 09, 2023 (GLOBE NEWSWIRE) — RioCan Real Estate Investment Trust (“RioCan” or the “Trust”) announced today its financial results for the three months and year ended December 31, 2023 (the “Fourth Quarter”).
“In 2023, RioCan delivered strong results demonstrating once again the quality of our portfolio, the resilience of our tenants and the talent of our people. The critical nature of our centres has been emphasized through the merger of physical and online retail. Tenants continued to seize the opportunity to lease our well-located space and our development pipeline remained on track to deliver new and dynamic space,” said Jonathan Gitlin, President and CEO of RioCan. “Having proven our ability to execute in the face of unprecedented challenges, we maintain our focus on our long-term strategy to maximize the value of our portfolio and grow our business. The distribution increase announced today is a clear indication of our confidence in our people, our assets and our strategy, which will deliver sustainable growth and robust returns for our Unitholders.”
| Three months ended December 31 |
Years ended December 31 |
|||||||||||||||
| (in millions, except where otherwise noted, and per unit values) | 2021 | 2020 | 2021 | 2020 | ||||||||||||
| Financial Highlights | ||||||||||||||||
| Net income (loss) | $ | 208.8 | $ | 65.6 | $ | 598.4 | $ | (64.8 | ) | |||||||
| Weighted average Units outstanding – diluted (in thousands) | 315,733 | 317,739 | 317,284 | 317,725 | ||||||||||||
| FFO 1 | $ | 146.5 | $ | 124.1 | $ | 507.0 | $ | 507.4 | ||||||||
| FFO (excluding net debt prepayment costs and one-time compensation costs) 1 | $ | 150.4 | $ | 124.1 | $ | 524.0 | $ | 507.4 | ||||||||
| FFO per unit – diluted 1 | $ | 0.46 | $ | 0.39 | $ | 1.60 | $ | 1.60 | ||||||||
| FFO per unit (excluding net debt prepayment costs and one-time compensation costs) – diluted 1 | $ | 0.48 | $ | 0.39 | $ | 1.65 | $ | 1.60 | ||||||||
FFO per Unit and Net Income
- FFO per unit of $0.46 for the quarter was $0.07 per unit or 18% higher than the same period last year of which $0.02 per unit was driven by Same Property NOI1 and $0.01 per unit contributed by NOI from completed properties under developments1. The remaining $0.04 per unit increase was due to higher residential inventory gains of $22.8 million, mainly from selling a 75% interest in the condominium component of Leaside Centre mixed-use project in Toronto, partially offset by a reduction in NOI from properties sold1 of $5.1 million, lower lease cancellation fees of $4.8 million and debt prepayment costs of $3.9 million.
- FFO per unit for the year was $1.60, unchanged from the prior year, and included increases of $0.06 per unit driven by Same Property NOI and $0.02 per unit of NOI from completed development projects. This was partially offset by a reduction in NOI from commercial properties sold of $0.03 per unit, debt prepayment costs of $0.03 per unit and one-time compensation costs of $0.02 per unit. The $12.9 million increase in residential inventory gains in the year was mostly offset by $11.1 million lower realized gains on the sale of marketable securities and dividend income.
- Net income for the year and Fourth Quarter was $598.4 million and $208.8 million and exceeded the comparable periods last year by $663.2 million and $143.2 million, respectively, mainly due to fair value gains of $124.1 million and $72.3 million recognized in 2023, compared to fair value losses of $526.8 million and $42.3 million in 2020.
1. A non-GAAP measurement. For definitions, reconciliations and the basis of presentation of RioCan’s non-GAAP measures, refer to the Basis of Presentation and Non-GAAP Measures section in this News Release.
Distributions
- RioCan’s Board of Trustees has approved an increase to the monthly distributions to Unitholders of 6.25% to $0.085 cents per unit commencing with the February 2023 distribution, payable on March 7, 2023 to Unitholders of record as at February 28, 2023. This increase brings RioCan’s annualized distribution to $1.02 per unit. The Trust’s objectives include providing sustainable distribution increases supported by FFO per unit growth while maintaining a FFO Payout Ratio1 of approximately 55% to 65% over the long-term. This enables us to provide a growing income stream to our Unitholders while retaining the cash flow required to fund future growth. With a FFO per unit growth target of 5% to 7% for 2023, the Trust expects to achieve its payout ratio objective.
Progress at The Well
- Solid progress continued on The Well™, with the construction of the commercial component, which includes office and retail, at approximately 82% complete, excluding fixturing. Retail leasing has gained momentum and, as of February 9, 2023, approximately 50% of the retail space has firm leases with that number increasing to 62% when including leases in advanced discussions with tenants. Grand opening of the retail component is expected in the spring of 2023. As of February 9, 2023, 90% of the office component of the space is leased and 638,000 square feet was handed over to tenants for fixturing with first cash rents to start in the second half of 2023. The purpose-built residential rental building, FourFifty The Well™, is also advancing as planned and is expected to be complete in 2023.
Capital Recycling
- In 2023, the Trust completed $848.6 million of dispositions at a weighted average capitalization rate of 3.75%, a testament to the quality and demand for the Trust’s assets.
- As of February 9, 2023, the Trust has firm or conditional deals that were in-place at or entered into after year end and deals that closed subsequent to year end to sell full or partial interests in a number of properties totaling $98.0 million.
Capital Management Update
- In 2023, the Trust advanced it’s objectives to have 70% of total debt unsecured and to extend the weighted average term to maturity of its total debt portfolio.
- On November 8, 2023, RioCan issued $450.0 million, 2.829% of Series AE senior unsecured green bond debentures with a seven-year term.
- On November 30, 2023, RioCan redeemed, in full, its $250.0 million, 3.746% Series V unsecured debentures due May 30, 2023 in accordance with their terms, at a total redemption price of $253.8 million.
- The Trust also prepaid $344.5 million of mortgages and unwound the associated interest rate swap hedges for a net prepayment cost of $0.1 million. An additional $41.0 million mortgage was repaid on the disposition of Kennedy Commons. In total, $385.5 million of mortgages were repaid in the quarter.
- On December 14, 2023, the Trust entered into $300.0 million of bond forward contracts maturing on September 15, 2023 and subsequent to year end, entered into an additional $200.0 million of bond forwards maturing on April 28, 2023. These bond forward contracts are a hedge of the Trust’s exposure to movements in underlying risk-free interest rates associated with the anticipated refinancing of the $300.0 million Series Y debentures maturing on October 3, 2023 and future anticipated financings, respectively.
- During the Fourth Quarter, the Trust acquired and cancelled 7,973,045 units at a weighted average purchase price of $22.32 per unit, for a total cost of $178.1 million.
- To provide additional financial liquidity, subsequent to year end on February 2, 2023, the Trust increased the credit limit on its revolving unsecured operating line of credit by $250.0 million to $1.3 billion.
1. A non-GAAP measurement. For definitions, reconciliations and the basis of presentation of RioCan’s non-GAAP measures, refer to the Basis of Presentation and Non-GAAP Measures section in this News Release.
Operation Highlights
| Three months ended December 31 |
Years ended December 31 |
||||||||||||||
| 2021 | 2020 | 2021 | 2020 | ||||||||||||
| Operation Highlights (i) | |||||||||||||||
| Occupancy – committed (ii) | 96.8 | % | 95.7 | % | 96.8 | % | 95.7 | % | |||||||
| Blended leasing spread | 4.6 | % | 3.8 | % | 6.3 | % | 5.0 | % | |||||||
| New leasing spread | 3.8 | % | 5.1 | % | 8.6 | % | 7.9 | % | |||||||
| Renewal leasing spread | 5.0 | % | 3.6 | % | 5.4 | % | 4.4 | % | |||||||
| Rent collection (iii) | 98.6 | % | 96.2 | % | 98.0 | % | 94.4 | % | |||||||
| (i) | Includes commercial overall portfolio only. |
| (ii) | Information presented as at respective periods then ended. |
| (iii) | Represents percentage of total billed gross rents for the Fourth Quarter and three quarters of 2020 which has been collected in cash as of February 9, 2023. Year ended December 31, 2020 includes billed gross rents for the period from April 1, 2020 to December 31, 2020. |
- Same Property NOI grew by 4.9% in Q4 2023 when compared to the same period last year. Same Property NOI excluding the pandemic-related provision1 was positive at 1.0%. RioCan collected 98.6% of billed gross rents for Q4 2023, which resulted in the pandemic-related provision falling from $9.0 million in Q4 2020 to $2.9 million in the Fourth Quarter. Same Property NOI for full year 2023 grew by 3.4% despite the one quarter of pre-pandemic results included in 2020. The pandemic-related provision for the year fell from $42.5 million in 2020 to $17.2 million in 2023 despite the significant impact lockdowns had on our tenants throughout the year.
- Committed occupancy for the total portfolio of 96.8% showed solid improvement, increasing by 40 basis points when compared to Q3 2023. Retail committed occupancy ended the year at 97.2% and in the Greater Toronto Area jumped by 80 bps in Q4 2023, fuelling a 50 basis point increase in total portfolio retail committed occupancy. Committed occupancy for the total portfolio climbed steadily throughout 2023 from strong demand for our prime locations resulting in a 110 basis point year-over-year increase.
- New and renewed leases totalled 4.7 million square feet (at 100% ownership interest) for the year at a blended leasing spread of 6.3%. New leasing of 1.7 million square feet exceeded pre-pandemic levels at new leasing spreads for the overall portfolio of 8.6%. Renewed leases of 3.0 million square feet were completed at renewal leasing spreads of 5.4%, for the overall portfolio.
1. A non-GAAP measurement. For definitions, reconciliations and the basis of presentation of RioCan’s non-GAAP measures, refer to the Basis of Presentation and Non-GAAP Measures section in this News Release.
RioCan Living Update
| Residential Rental Buildings in Operation | Number of total units |
Date of lease launch |
% of leased units as of February 9, 2023 |
% of leased units as of November 9, 2023 |
|||||||||
| Stabilized (i) | |||||||||||||
| eCentral (Yonge Eglinton Northeast Corner, Toronto) | 466 | December 2018 | 95.9 | % | 92.5 | % | |||||||
| Frontier (Ottawa) | 228 | May 2019 | 95.6 | % | 97.4 | % | |||||||
| Brio (Brentwood Village, Calgary) | 163 | April 2020 | 93.8 | % | 97.5 | % | |||||||
| Market (Montreal) (ii) | 139 | December 2020 | 97.1 | % | n/a | ||||||||
| In lease-up | |||||||||||||
| Pivot (Yonge Sheppard Centre, Toronto) | 361 | October 2020 | 84.8 | % | 72.0 | % | |||||||
| Litho. (Toronto) | 210 | July 2023 | 61.9 | % | 37.1 | % | |||||||
| Latitude (Ottawa) | 209 | July 2023 | 27.4 | % | 16.8 | % | |||||||
| Strada (Toronto) | 61 | November 2023 | 27.9 | % | — | % | |||||||
| Condominium Projects in Pre-construction (iii) | Number of total units |
Date of sales launch |
% of pre-sold units released as of February 9, 2023 |
% of pre-sold units released as of November 9, 2023 |
|||||||||
| U.C. Towns 2, Oshawa, ON | 65 | August 2023 | 100.0 | % | 100.0 | % | |||||||
| U.C. Tower 2, Oshawa, ON (iv) | 993 | August 2023 | 89.6 | % | 78.4 | % | |||||||
| Queen & Ashbridge, Toronto, ON | 399 | September 2020 | 95.4 | % | 95.1 | % | |||||||
| Verge (Phase One), Toronto, ON (iv) | 197 | July 2023 | 97.3 | % | 96.0 | % | |||||||
| Verge (Phase Two), Toronto, ON (iv) | 335 | October 2023 | 94.6 | % | 88.4 | % | |||||||
| (i) | A property is considered to have reached stabilization the earlier of (i) achieving 95% occupancy or (ii) 24 months after first occupancy. |
| (ii) | Market Phase One was acquired on February 8, 2023. |
| (iii) | Excludes a total of 1,194 condominium units under construction at the 11 YV, U.C. Uptowns and U.C. Tower projects and 48 units in interim occupancy at U.C. Uptowns. |
| (iv) | For U.C. Tower 2 (Phase One), Verge (Phase One) and Verge (Phase Two) only 606, 184 and 276 of the number of total units have been released for sale, respectively. The second phase of U.C. Tower 2 is expected to be released for sale in April 2023. |
- As of February 9, 2023, the Trust’s residential rental portfolio, overseen by RioCan Living™, is comprised of 1,698 purpose-built completed units (at 100% ownership interest) across seven buildings located in Toronto, Ottawa and Calgary. The portfolio includes the recent completion of two multi-unit properties, Latitude™, the 209-unit project in Ottawa and Strada™, the 61-unit project in Toronto. Occupancy at these two buildings commenced in Q1 2023. Leasing velocity in all new properties in the start-up leasing phase was strong. Litho™ is now at 61.9% leased, up 24.8% since last reported, and Strada, which launched in November of 2023, is already 27.9% leased.
- On February 8, 2023, the Trust acquired a 90% interest in the first phase of Market, a new apartment complex in Montreal, for a purchase price of $46.8 million at a 4.06% capitalization rate. The building contains 139 income producing residential rental units. RioCan will also acquire a 90% interest in 297 units in two additional phases under construction upon stabilization at a 4.16% capitalization rate. Financing of the acquisitions will be a combination of asset level mortgages and existing liquidity.
- During the Fourth Quarter, RioCan sold a 75% interest in the condominium component of RioCan Leaside Centre mixed-use project to a joint venture partner for sale proceeds of $54.4 million, representing approximately $145 per square foot of 0.4 million square feet of future density, and recognized $25.3 million of inventory gains. RioCan owns 100% of the remaining development including approximately 0.6 million square feet of multi-use residential and 0.2 million square feet of commercial space. RioCan Leaside Centre in Toronto will be transformed into a 1.2 million square foot mixed-use community with a light rail transit station situated on the site.
Development Highlights
| Three months ended December 31 |
Years ended December 31 |
|||||||||||||||
| (in millions except square feet) | 2021 | 2020 | 2021 | 2020 | ||||||||||||
| Development Highlights | ||||||||||||||||
| Development Completions – sq. ft. in thousands | 86.0 | 320.0 | 243.0 | 529.0 | ||||||||||||
| Development Spending1 | $ | 93.8 | $ | 141.4 | $ | 427.5 | $ | 493.4 | ||||||||
| Under Active Development – sq. ft. in thousands (i)(ii) | 2,082.0 | 2,439.0 | 2,082.0 | 2,439.0 | ||||||||||||
| (i) | Information presented as at respective periods then ended and includes properties under development and residential inventory. |
| (ii) | For 2023, excludes a total of 1.5 million square feet of completed phases and air rights sold (2020 – 1.4 million square feet). |
- RioCan’s in-house development team delivered 243,000 square feet of completions during 2023, including Litho., retail space at Windfields Farm in Oshawa, Lincoln Fields Shopping Centre in Ottawa and RioCan Shawnessy in Calgary. The total embedded development potential within the Trust’s portfolio is 43.1 million square feet of which 21.0 million square feet are currently zoned or have submitted applications.
- Our development pipeline includes 13.8 million square feet of permitted projects of which 2.1 million square feet is currently under development. Construction projects include The Well, as discussed earlier in this release, and two residential rental projects in Ottawa, Luma™ and Rhythm™, which are on schedule for completion by Q2 2023 and Q4 2023, respectively.
- The Trust’s Development Spending target for 2023 is estimated to be in the $475 million to $525 million range. In 2023, the Trust expects to deliver projects with cost of $675 million to $725 million, the largest amount of annual cost transfers since the inception of this development program.
Balance Sheet Strength
| (in millions except percentages) As at |
December 31, 2023 | December 31, 2020 | |||||||||||||
| Balance Sheet Strength Highlights | |||||||||||||||
| Total assets | $ | 15,177 | $ | 15,268 | |||||||||||
| Total debt | $ | 6,611 | $ | 6,928 | |||||||||||
| Liquidity (i) 1 | $ | 1,010 | $ | 1,577 | |||||||||||
| Adjusted Debt to Adjusted EBITDA (i) 1 | 9.59x | 9.47x | |||||||||||||
| Total Adjusted Debt to Total Adjusted Assets (i) 1 | 43.9 | % | 45.0 | % | |||||||||||
| Ratio of Unsecured Debt and Secured Debt (i) 1 | 59.4% / 40.6% | 57.2% / 42.8% | |||||||||||||
| Unencumbered Assets (i) 1 | $ | 9,392 | $ | 8,727 | |||||||||||
| Unencumbered Assets to Unsecured Debt (i) 1 | 231 | % | 215 | % | |||||||||||
| (i) | At RioCan’s proportionate share. |
- The Trust ended 2023 with $1.0 billion of Liquidity in the form of cash and cash equivalents and undrawn lines of credit, increasing to $1.3 billion after accounting for the increase in the unsecured operating line of credit on February 2, 2023.
- RioCan’s unencumbered asset pool was $9.4 billion, which generated 64.9% of Annual Normalized NOI1 and provided 2.31x coverage over Unsecured Debt. This pool increased from the prior year as the Trust proactively repaid mortgages.
- The Trust’s Total Adjusted Debt to Total Adjusted Assets at RioCan’s proportionate share improved from December 31, 2020 mainly due to year-over-year decrease of $239.9 million in proportionate total debt balances at the current year end as the Trust has utilized proceeds from asset sales to reduce debt over the course of 2023.
- Adjusted Debt to Adjusted EBITDA was 9.59x on a proportionate share basis, as at December 31, 2023. The increase in Adjusted Debt to Adjusted EBITDA from prior year end was primarily due to the net impact of higher average Total Adjusted Debt balances, as debt was used to fund development, partially offset by higher Adjusted EBITDA. This ratio has improved since Q3 2023 as Adjusted EBITDA has continued to improve.
1. A non-GAAP measurement. For definitions, reconciliations and the basis of presentation of RioCan’s non-GAAP measures, refer to the Basis of Presentation and Non-GAAP Measures section in this News Release.
Conference Call and Webcast
Interested parties are invited to participate in a conference call with management on Thursday, February 10, 2023 at 10:00 a.m. (ET). Participants will be required to identify themselves and the organization on whose behalf they are participating.
In order to participate, please dial 647-427-3230 or 1-877-486-4304. For those unable to participate in the live mode, a replay will be available at 1-855-859-2056, passcode 5956476#.
For a copy of the slides to be used for the conference call or to access the simultaneous webcast, visit RioCan’s website at http://investor.riocan.com/investor-relations/events-and-presentations/ and click on the link for the webcast.
About RioCan
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 December 31, 2023, our portfolio is comprised of 207 properties with an aggregate net leasable area of approximately 36.4 million square feet (at RioCan’s interest) including office, residential rental and 13 development properties. To learn more about us, please visit www.riocan.com.
Basis of Presentation and Non-GAAP Measures
All figures included in this News Release are expressed in Canadian dollars unless otherwise noted. RioCan’s annual audited consolidated financial statements (“2023 Annual Consolidated Financial Statements”) are prepared in accordance with International Financial Reporting Standards (IFRS). Financial information included within this News Release does not contain all disclosures required by IFRS, and accordingly should be read in conjunction with the Trust’s 2023 Annual Consolidated Financial Statements and MD&A for the three months and year ended December 31, 2023, which is available on RioCan’s website at www.riocan.com and on SEDAR at www.sedar.com.
Consistent with RioCan’s management framework, management uses certain financial measures to assess RioCan’s financial performance, which are not in accordance with generally accepted accounting principles (GAAP) under IFRS. Funds From Operations (“FFO”) and FFO (excluding net debt prepayment costs and one-time compensation costs), FFO per unit and FFO per unit (excluding net debt prepayment costs and one-time compensation costs), Net Operating Income (“NOI”), Same Property NOI, Development Spending, Total Contractual Debt, Liquidity, Adjusted Debt to Adjusted EBITDA, Total Adjusted Debt to Total Adjusted Assets, RioCan’s Proportionate Share, Unsecured Debt, Secured Debt, Unencumbered Assets to Unsecured Debt and Percentage of Normalized NOI Generated from Unencumbered Assets, as well as other measures that may be discussed elsewhere in this News Release, do not have a standardized definition prescribed by IFRS and are, therefore, unlikely to be comparable to similar measures presented by other reporting issuers. RioCan supplements its IFRS measures with these Non-GAAP measures to aid in assessing the Trust’s underlying performance and reports these additional measures so that investors may do the same. Non-GAAP measures should not be considered as alternatives to net earnings or comparable metrics determined in accordance with IFRS as indicators of RioCan’s performance, liquidity, cash flow, and profitability. For full definitions of these measures, please refer to the “Non-GAAP Measures” section in RioCan’s MD&A for the three months and year ended December 31, 2023.
The reconciliations for each non-GAAP measure included in this News Release are outlined as follows:
RioCan’s Proportionate Share
The following table reconciles the consolidated balance sheet from IFRS to RioCan’s proportionate share basis as at December 31, 2023 and 2020:
| As at | December 31, 2023 | December 31, 2020 | ||||||||||||||||
| (in thousands) | IFRS basis | Equity- accounted investments |
RioCan’s proportionate share |
IFRS basis | Equity- accounted investments |
RioCan’s proportionate share |
||||||||||||
| Assets | ||||||||||||||||||
| Investment properties | $ | 14,021,338 | $ | 409,794 | $ | 14,431,132 | $ | 14,063,022 | $ | 243,677 | $ | 14,306,699 | ||||||
| Equity-accounted investments | 327,335 | (327,335 | ) | — | 209,676 | (209,676 | ) | — | ||||||||||
| Mortgages and loans receivable | 237,790 | — | 237,790 | 160,646 | — | 160,646 | ||||||||||||
| Residential inventory | 217,043 | 121,291 | 338,334 | 214,181 | 82,331 | 296,512 | ||||||||||||
| Assets held for sale | 47,240 | — | 47,240 | 198,094 | — | 198,094 | ||||||||||||
| Receivables and other assets | 248,959 | 35,367 | 284,326 | 183,633 | 28,202 | 211,835 | ||||||||||||
| Cash and cash equivalents | 77,758 | 9,113 | 86,871 | 238,456 | 2,203 | 240,659 | ||||||||||||
| Total assets | $ | 15,177,463 | $ | 248,230 | $ | 15,425,693 | $ | 15,267,708 | $ | 146,737 | $ | 15,414,445 | ||||||
| Liabilities | ||||||||||||||||||
| Debentures payable | $ | 2,990,692 | $ | — | $ | 2,990,692 | $ | 3,340,278 | $ | — | $ | 3,340,278 | ||||||
| Mortgages payable | 2,334,016 | 166,368 | 2,500,384 | 2,797,066 | 108,337 | 2,905,403 | ||||||||||||
| Lines of credit and other bank loans | 1,285,910 | 48,049 | 1,333,959 | 790,539 | 28,716 | 819,255 | ||||||||||||
| Accounts payable and other liabilities | 655,501 | 33,813 | 689,314 | 604,852 | 9,684 | 614,536 | ||||||||||||
| Total liabilities | $ | 7,266,119 | $ | 248,230 | $ | 7,514,349 | $ | 7,532,735 | $ | 146,737 | $ | 7,679,472 | ||||||
| Equity | ||||||||||||||||||
| Unitholders’ equity | 7,911,344 | — | 7,911,344 | 7,734,973 | — | 7,734,973 | ||||||||||||
| Total liabilities and equity | $ | 15,177,463 | $ | 248,230 | $ | 15,425,693 | $ | 15,267,708 | $ | 146,737 | $ | 15,414,445 | ||||||
The following tables reconcile the consolidated statements of income (loss) from IFRS to RioCan’s proportionate share basis for the three months and years ended December 31, 2023 and 2020:
| Three months ended December 31, 2023 | Three months ended December 31, 2020 | |||||||||||||||||
| (in thousands) | IFRS basis | Equity- accounted investments |
RioCan’s proportionate share |
IFRS basis | Equity- accounted investments |
RioCan’s proportionate share |
||||||||||||
| Revenue | ||||||||||||||||||
| Rental revenue | $ | 266,899 | $ | 7,071 | $ | 273,970 | $ | 276,422 | $ | 4,300 | $ | 280,722 | ||||||
| Residential inventory sales | 65,620 | 965 | 66,585 | 4,712 | 831 | 5,543 | ||||||||||||
| Property management and other service fees | 3,920 | — | 3,920 | 4,050 | — | 4,050 | ||||||||||||
| 336,439 | 8,036 | 344,475 | 285,184 | 5,131 | 290,315 | |||||||||||||
| Operating costs | ||||||||||||||||||
| Rental operating costs | ||||||||||||||||||
| Recoverable under tenant leases | 93,346 | 588 | 93,934 | 95,452 | 400 | 95,852 | ||||||||||||
| Non-recoverable costs | 9,019 | 609 | 9,628 | 14,995 | 331 | 15,326 | ||||||||||||
| Residential inventory cost of sales | 39,286 | 289 | 39,575 | 1,143 | 270 | 1,413 | ||||||||||||
| 141,651 | 1,486 | 143,137 | 111,590 | 1,001 | 112,591 | |||||||||||||
| Operating income | 194,788 | 6,550 | 201,338 | 173,594 | 4,130 | 177,724 | ||||||||||||
| Other income (loss) | ||||||||||||||||||
| Interest income | 3,842 | 566 | 4,408 | 3,500 | 347 | 3,847 | ||||||||||||
| Income from equity-accounted investments | 6,503 | (6,503 | ) | — | 421 | (421 | ) | — | ||||||||||
| Fair value gain (loss) on investment properties, net | 72,255 | 1,480 | 73,735 | (42,286 | ) | (2,852 | ) | (45,138 | ) | |||||||||
| Investment and other income (loss) | (696 | ) | (144 | ) | (840 | ) | 967 | (19 | ) | 948 | ||||||||
| 81,904 | (4,601 | ) | 77,303 | (37,398 | ) | (2,945 | ) | (40,343 | ) | |||||||||
| Other expenses | ||||||||||||||||||
| Interest costs, net | 42,403 | 1,819 | 44,222 | 44,841 | 1,173 | 46,014 | ||||||||||||
| General and administrative | 11,924 | 16 | 11,940 | 12,941 | 10 | 12,951 | ||||||||||||
| Internal leasing costs | 2,982 | — | 2,982 | 2,901 | — | 2,901 | ||||||||||||
| Transaction and other costs | 6,779 | 114 | 6,893 | 1,510 | 2 | 1,512 | ||||||||||||
| Debt prepayment costs, net | 3,896 | — | 3,896 | — | — | — | ||||||||||||
| 67,984 | 1,949 | 69,933 | 62,193 | 1,185 | 63,378 | |||||||||||||
| Income before income taxes | $ | 208,708 | $ | — | $ | 208,708 | $ | 74,003 | $ | — | $ | 74,003 | ||||||
| Current income tax recovery | (68 | ) | — | (68 | ) | (711 | ) | — | (711 | ) | ||||||||
| Deferred income tax expense | — | — | — | 9,105 | — | 9,105 | ||||||||||||
| Net income | $ | 208,776 | $ | — | $ | 208,776 | $ | 65,609 | $ | — | $ | 65,609 | ||||||
| Year ended December 31, 2023 | Year ended December 31, 2020 | |||||||||||||||||
| (in thousands) | IFRS basis | Equity- accounted investments |
RioCan’s proportionate share |
IFRS basis | Equity- accounted investments |
RioCan’s proportionate share |
||||||||||||
| Revenue | ||||||||||||||||||
| Rental revenue | $ | 1,066,562 | $ | 26,836 | $ | 1,093,398 | $ | 1,090,732 | $ | 17,162 | $ | 1,107,894 | ||||||
| Residential inventory sales | 93,727 | 6,474 | 100,201 | 36,347 | 6,718 | 43,065 | ||||||||||||
| Property management and other service fees | 14,772 | — | 14,772 | 16,584 | — | 16,584 | ||||||||||||
| 1,175,061 | 33,310 | 1,208,371 | 1,143,663 | 23,880 | 1,167,543 | |||||||||||||
| Operating costs | ||||||||||||||||||
| Rental operating costs | ||||||||||||||||||
| Recoverable under tenant leases | 367,297 | 2,089 | 369,386 | 377,787 | 1,495 | 379,282 | ||||||||||||
| Non-recoverable costs | 40,753 | 2,544 | 43,297 | 64,751 | 1,599 | 66,350 | ||||||||||||
| Residential inventory cost of sales | 65,346 | 2,371 | 67,717 | 20,842 | 3,567 | 24,409 | ||||||||||||
| 473,396 | 7,004 | 480,400 | 463,380 | 6,661 | 470,041 | |||||||||||||
| Operating income | 701,665 | 26,306 | 727,971 | 680,283 | 17,219 | 697,502 | ||||||||||||
| Other income (loss) | ||||||||||||||||||
| Interest income | 13,666 | 2,160 | 15,826 | 14,602 | 1,383 | 15,985 | ||||||||||||
| Income from equity-accounted investments | 19,189 | (19,189 | ) | — | 3,985 | (3,985 | ) | — | ||||||||||
| Fair value gain (loss) on investment properties, net | 124,052 | (1,113 | ) | 122,939 | (526,775 | ) | (9,613 | ) | (536,388 | ) | ||||||||
| Investment and other income (loss) | 2,743 | (806 | ) | 1,937 | 8,216 | (166 | ) | 8,050 | ||||||||||
| 159,650 | (18,948 | ) | 140,702 | (499,972 | ) | (12,381 | ) | (512,353 | ) | |||||||||
| Other expenses | ||||||||||||||||||
| Interest costs, net | 171,521 | 7,026 | 178,547 | 180,811 | 4,788 | 185,599 | ||||||||||||
| General and administrative | 51,400 | 60 | 51,460 | 40,524 | 42 | 40,566 | ||||||||||||
| Internal leasing costs | 11,807 | — | 11,807 | 10,192 | — | 10,192 | ||||||||||||
| Transaction and other costs | 17,343 | 272 | 17,615 | 2,934 | 8 | 2,942 | ||||||||||||
| Debt prepayment costs, net | 10,914 | — | 10,914 | — | — | — | ||||||||||||
| 262,985 | 7,358 | 270,343 | 234,461 | 4,838 | 239,299 | |||||||||||||
| Income (loss) before income taxes | $ | 598,330 | $ | — | $ | 598,330 | $ | (54,150 | ) | $ | — | $ | (54,150 | ) | ||||
| Current income tax recovery | (59 | ) | — | (59 | ) | (275 | ) | — | (275 | ) | ||||||||
| Deferred income tax expense | — | — | — | 10,905 | — | 10,905 | ||||||||||||
| Net income (loss) | $ | 598,389 | $ | — | $ | 598,389 | $ | (64,780 | ) | $ | — | $ | (64,780 | ) | ||||
NOI and Same Property NOI
The following table reconciles operating income to NOI and Same Property NOI to NOI for the three months and years ended December 31, 2023 and 2020:
| Three months ended December 31 |
Years ended December 31 |
|||||||||||
| (thousands of dollars) | 2021 | 2020 | 2021 | 2020 | ||||||||
| Operating Income | $ | 194,788 | $ | 173,594 | $ | 701,665 | $ | 680,283 | ||||
| Adjusted for the following: | ||||||||||||
| Property management and other service fees | (3,920 | ) | (4,050 | ) | (14,772 | ) | (16,584 | ) | ||||
| Residential inventory gains | (26,334 | ) | (3,569 | ) | (28,381 | ) | (15,505 | ) | ||||
| Operational lease revenue and (expenses) from ROU assets | 1,264 | 1,065 | 4,799 | 3,983 | ||||||||
| NOI | $ | 165,798 | $ | 167,040 | $ | 663,311 | $ | 652,177 | ||||
| Three months ended December 31 |
Years ended December 31 |
|||||||||||
| (thousands of dollars) | 2021 | 2020 | 2021 | 2020 | ||||||||
| Same Property NOI | $ | 156,439 | $ | 149,120 | $ | 612,463 | $ | 592,196 | ||||
| NOI from income producing properties: | ||||||||||||
| Acquired (i) | 39 | 7 | 3,479 | 2,727 | ||||||||
| Disposed (i) | 1,104 | 6,234 | 15,002 | 25,637 | ||||||||
| 1,143 | 6,241 | 18,481 | 28,364 | |||||||||
| NOI from completed properties under development | 3,755 | 1,591 | 9,925 | 4,198 | ||||||||
| NOI from properties under de-leasing under development | 1,153 | 1,461 | 4,999 | 5,715 | ||||||||
| Lease cancellation fees | 394 | 5,199 | 6,457 | 6,284 | ||||||||
| Straight-line rent adjustment | 1,050 | 1,458 | 6,928 | 7,177 | ||||||||
| NOI from residential rental | 1,864 | 1,970 | 4,058 | 8,243 | ||||||||
| NOI | $ | 165,798 | $ | 167,040 | $ | 663,311 | $ | 652,177 | ||||
| (i) | Includes properties acquired or disposed during the periods being compared. |
Same Property NOI including completed PUD
| Three months ended December 31 |
Years ended December 31 |
|||||||||||||||
| (thousands of dollars) | 2021 | 2020 | % change | 2021 | 2020 | % change | ||||||||||
| Same Property NOI | $ | 156,439 | $ | 149,120 | 4.9 | % | $ | 612,463 | $ | 592,196 | 3.4 | % | ||||
| Add: | ||||||||||||||||
| NOI from completed properties under development | 3,755 | 1,591 | 9,925 | 4,198 | ||||||||||||
| Same Property NOI including completed PUD | $ | 160,194 | $ | 150,711 | 6.3 | % | $ | 622,388 | $ | 596,394 | 4.4 | % | ||||
Same Property NOI excluding the pandemic-related provision
| Three months ended December 31 |
Years ended December 31 |
|||||||||||||||
| (thousands of dollars) | 2021 | 2020 | % change | 2021 | 2020 | % change | ||||||||||
| Same Property NOI | $ | 156,439 | $ | 149,120 | 4.9 | % | $ | 612,463 | $ | 592,196 | 3.4 | % | ||||
| Add back: | ||||||||||||||||
| Same property pandemic-related provision | 2,962 | 8,663 | 16,856 | 40,715 | ||||||||||||
| Same Property NOI excluding the pandemic-related provision | $ | 159,401 | $ | 157,783 | 1.0 | % | $ | 629,319 | $ | 632,911 | (0.6 | )% | ||||
FFO and FFO (excluding net debt prepayment costs and one-time compensation costs)
The following table reconciles net income (loss) attributable to Unitholders to FFO for the three months and years ended December 31, 2023 and 2020:
| Three months ended December 31 |
Years ended December 31 |
|||||||||||
| (thousands of dollars, except where otherwise noted) | 2021 | 2020 | 2021 | 2020 | ||||||||
| Net income (loss) attributable to Unitholders | $ | 208,776 | $ | 65,609 | $ | 598,389 | $ | (64,780 | ) | |||
| Add back/(Deduct): | ||||||||||||
| Fair value (gains) losses, net | (72,255 | ) | 42,286 | (124,052 | ) | 526,775 | ||||||
| Fair value (gains) losses included in equity-accounted investments | (1,480 | ) | 2,852 | 1,113 | 9,613 | |||||||
| Deferred income tax expense | — | 9,105 | — | 10,905 | ||||||||
| Internal leasing costs | 2,982 | 2,901 | 11,807 | 10,192 | ||||||||
| Transaction losses on investment properties, net (i) | 901 | 121 | 402 | 503 | ||||||||
| Transaction costs on sale of investment properties | 6,324 | 1,003 | 14,391 | 768 | ||||||||
| Change in unrealized fair value on marketable securities | — | — | — | 10,219 | ||||||||
| Current income recovery | (68 | ) | (711 | ) | (59 | ) | (275 | ) | ||||
| Operational lease revenue from ROU assets | 887 | 710 | 3,308 | 2,572 | ||||||||
| Operational lease expenses from ROU assets in equity-accounted investments | (11 | ) | (7 | ) | (42 | ) | (28 | ) | ||||
| Capitalized interest on equity-accounted investments (ii) | 465 | 235 | 1,725 | 930 | ||||||||
| FFO | $ | 146,521 | $ | 124,104 | $ | 506,982 | $ | 507,394 | ||||
| Add back: | ||||||||||||
| Debt prepayment costs, net | 3,896 | — | 10,914 | — | ||||||||
| One-time compensation costs | — | — | 6,057 | — | ||||||||
| FFO (excluding net debt prepayment costs and one-time compensation costs) | $ | 150,417 | $ | 124,104 | $ | 523,953 | $ | 507,394 | ||||
| FFO per unit – basic | $ | 0.46 | $ | 0.39 | $ | 1.60 | $ | 1.60 | ||||
| FFO per unit – diluted | $ | 0.46 | $ | 0.39 | $ | 1.60 | $ | 1.60 | ||||
| FFO per unit (excluding net debt prepayment costs and one-time compensation costs) – diluted | $ | 0.48 | $ | 0.39 | $ | 1.65 | $ | 1.60 | ||||
| Weighted average number of Units – basic (in thousands) | 315,534 | 317,739 | 317,201 | 317,725 | ||||||||
| Weighted average number of Units – diluted (in thousands) | 315,733 | 317,739 | 317,284 | 317,725 | ||||||||
| Distributions paid | $ | 317,497 | $ | 457,521 | ||||||||
| FFO Payout Ratio | 62.6 | % | 90.2 | % | ||||||||
| FFO payout ratio (excluding net debt prepayment costs and one-time compensation costs) | 60.6 | % | 90.2 | % | ||||||||
| (i) | Represents net transaction gains or losses connected to certain investment properties during the period. |
| (ii) | This amount represents the interest capitalized to RioCan’s equity-accounted investment in WhiteCastle New Urban Fund, LP, WhiteCastle New Urban Fund 2, LP, WhiteCastle New Urban Fund 3, LP, WhiteCastle New Urban Fund 4, LP, WhiteCastle New Urban Fund 5, LP, RioCan-Fieldgate JV, RC (Queensway) LP and RC (Leaside) LP- Class B. This amount is not capitalized to properties under development under IFRS, but is allowed as an adjustment under REALPAC’s definition of FFO. |
Development Spending
Total Development Spending for the three months and years ended December 31, 2023 and 2020 are as follows:
| Three months ended December 31 |
Years ended December 31 |
|||||||||||
| (thousands of dollars) | 2021 | 2020 | 2021 | 2020 | ||||||||
| Development expenditures: | ||||||||||||
| Properties under development | $ | 79,457 | $ | 129,801 | $ | 365,120 | $ | 457,109 | ||||
| Residential inventory | 14,330 | 11,604 | 62,351 | 36,304 | ||||||||
| Total Development Spending | $ | 93,787 | $ | 141,405 | $ | 427,471 | $ | 493,413 | ||||
Total Adjusted Debt and Total Contractual Debt
The following tables reconcile total debt to Total Adjusted Debt, total assets to Total Adjusted Assets, and total debt to Total Contractual Debt as at December 31, 2023 and 2020:
| As at | December 31, 2023 | December 31, 2020 | ||||||||||||||||
| (thousands of dollars, except where otherwise noted) | IFRS basis | Equity- accounted investments |
RioCan’s proportionate share |
IFRS basis | Equity- accounted investments |
RioCan’s proportionate share |
||||||||||||
| Debentures payable | $ | 2,990,692 | $ | — | $ | 2,990,692 | $ | 3,340,278 | $ | — | $ | 3,340,278 | ||||||
| Mortgages payable | 2,334,016 | 166,368 | 2,500,384 | 2,797,066 | 108,337 | 2,905,403 | ||||||||||||
| Lines of credit and other bank loans | 1,285,910 | 48,049 | 1,333,959 | 790,539 | 28,716 | 819,255 | ||||||||||||
| Total debt | $ | 6,610,618 | $ | 214,417 | $ | 6,825,035 | $ | 6,927,883 | $ | 137,053 | $ | 7,064,936 | ||||||
| Cash and cash equivalents | 77,758 | 9,113 | 86,871 | 238,456 | 2,203 | 240,659 | ||||||||||||
| Total Adjusted Debt | $ | 6,532,860 | $ | 205,304 | $ | 6,738,164 | $ | 6,689,427 | $ | 134,850 | $ | 6,824,277 | ||||||
| Total assets | $ | 15,177,463 | $ | 248,230 | $ | 15,425,693 | $ | 15,267,708 | $ | 146,737 | $ | 15,414,445 | ||||||
| Cash and cash equivalents | 77,758 | 9,113 | 86,871 | 238,456 | 2,203 | 240,659 | ||||||||||||
| Total Adjusted Assets | $ | 15,099,705 | $ | 239,117 | $ | 15,338,822 | $ | 15,029,252 | $ | 144,534 | $ | 15,173,786 | ||||||
| Total Adjusted Debt to Total Adjusted Assets | 43.3% | 43.9% | 44.5% | 45.0% | ||||||||||||||
| As at | December 31, 2023 | December 31, 2020 | ||||||||||||||||
| (thousands of dollars) | IFRS basis | Equity- accounted investments |
RioCan’s proportionate share |
IFRS basis | Equity- accounted investments |
RioCan’s proportionate share |
||||||||||||
| Total debt | $ | 6,610,618 | $ | 214,417 | $ | 6,825,035 | $ | 6,927,883 | $ | 137,053 | $ | 7,064,936 | ||||||
| Less: | ||||||||||||||||||
| Unamortized debt financing costs, premiums and discounts on | (16,414 | ) | (386 | ) | (16,800 | ) | (16,819 | ) | (294 | ) | (17,113 | ) | ||||||
| origination and debt assumed, and modifications | ||||||||||||||||||
| Total Contractual Debt | 6,627,032 | 214,803 | 6,841,835 | 6,944,702 | 137,347 | 7,082,049 | ||||||||||||
Liquidity
As at December 31, 2023, RioCan had approximately $1.0 billion of liquidity as summarized in the following table:
| As at | December 31, 2023 | December 31, 2020 | ||||||||||||||||
| (thousands of dollars, except where otherwise noted) | IFRS basis | Equity- accounted investments |
RioCan’s proportionate share |
IFRS basis | Equity- accounted investments |
RioCan’s proportionate share |
||||||||||||
| Undrawn revolving unsecured operating line of credit | $ | 634,080 | $ | — | $ | 634,080 | $ | 1,000,000 | $ | — | $ | 1,000,000 | ||||||
| Undrawn construction lines and other bank loans | 241,883 | 47,641 | 289,524 | 291,332 | 44,698 | 336,030 | ||||||||||||
| Cash and cash equivalents | 77,758 | 9,113 | 86,871 | 238,456 | 2,203 | 240,659 | ||||||||||||
| Liquidity | $ | 953,721 | $ | 56,754 | $ | 1,010,475 | $ | 1,529,788 | $ | 46,901 | $ | 1,576,689 | ||||||
| Total Contractual Debt | $ | 6,627,032 | $ | 214,803 | $ | 6,841,835 | $ | 6,944,702 | $ | 137,347 | $ | 7,082,049 | ||||||
| Liquidity as percentage of Total Contractual Debt | 14.4% | 14.8% | 22.0% | 22.3% | ||||||||||||||
| Liquidity as at December 31, 2023 | $ | 953,721 | $ | 56,754 | $ | 1,010,475 | ||||||||||||
| Increase subsequent to year end: | ||||||||||||||||||
| Borrowing capacity in revolving unsecured operating line of credit | 250,000 | — | 250,000 | |||||||||||||||
| Liquidity as of February 9, 2023 | $ | 1,203,721 | $ | 56,754 | $ | 1,260,475 | ||||||||||||
Unsecured Debt and Secured Debt
The following table reconciles total Unsecured Debt and Secured Debt to Total Contractual Debt as at December 31, 2023 and 2020:
| As at | December 31, 2023 | December 31, 2020 | ||||||||||||||||
| (thousands of dollars, except where otherwise noted) | IFRS basis | Equity- accounted investments |
RioCan’s proportionate share |
IFRS basis | Equity- accounted investments |
RioCan’s proportionate share |
||||||||||||
| Total Unsecured Debt | $ | 4,065,920 | $ | — | $ | 4,065,920 | $ | 4,050,000 | $ | — | $ | 4,050,000 | ||||||
| Total Secured Debt | 2,561,112 | 214,803 | 2,775,915 | 2,894,702 | 137,347 | 3,032,049 | ||||||||||||
| Total Contractual Debt | $ | 6,627,032 | $ | 214,803 | $ | 6,841,835 | $ | 6,944,702 | $ | 137,347 | $ | 7,082,049 | ||||||
| Percentage of Total Contractual Debt: | ||||||||||||||||||
| Unsecured Debt | 61.4% | 59.4% | 58.3% | 57.2% | ||||||||||||||
| Secured Debt | 38.6% | 40.6% | 41.7% | 42.8% | ||||||||||||||
Adjusted EBITDA
The following table reconciles consolidated net income (loss) attributable to Unitholders to Adjusted EBITDA:
| 12 months ended | ||||||||||||||||||
| As at | December 31, 2023 | December 31, 2020 | ||||||||||||||||
| (thousands of dollars) | IFRS basis | Equity- accounted investments |
RioCan’s proportionate share |
IFRS basis | Equity- accounted investments |
RioCan’s proportionate share |
||||||||||||
| Net income (loss) attributable to Unitholders | $ | 598,389 | $ | — | $ | 598,389 | $ | (64,780 | ) | $ | — | $ | (64,780 | ) | ||||
| Add (deduct) the following items: | ||||||||||||||||||
| Income tax expense (recovery): | ||||||||||||||||||
| Current | (59 | ) | — | (59 | ) | (275 | ) | — | (275 | ) | ||||||||
| Deferred | — | — | — | 10,905 | — | 10,905 | ||||||||||||
| Fair value losses (gains) on investment properties, net | (124,052 | ) | 1,113 | (122,939 | ) | 526,775 | 9,613 | 536,388 | ||||||||||
| Change in unrealized fair value on marketable securities (i) | — | — | — | 10,219 | — | 10,219 | ||||||||||||
| Internal leasing costs | 11,807 | — | 11,807 | 10,192 | — | 10,192 | ||||||||||||
| Non-cash unit-based compensation expense | 12,546 | — | 12,546 | 9,120 | — | 9,120 | ||||||||||||
| Interest costs, net | 171,521 | 7,026 | 178,547 | 180,811 | 4,788 | 185,599 | ||||||||||||
| Debt prepayment costs, net | 10,914 | — | 10,914 | — | — | — | ||||||||||||
| One-time cash compensation costs | 1,932 | — | 1,932 | — | — | — | ||||||||||||
| Depreciation and amortization | 4,022 | — | 4,022 | 4,342 | — | 4,342 | ||||||||||||
| Transaction losses on the sale of investment properties, net (ii) | 402 | — | 402 | 503 | — | 503 | ||||||||||||
| Transaction costs on investment properties | 14,363 | 28 | 14,391 | 768 | — | 768 | ||||||||||||
| Operational lease revenue and expenses from ROU assets | 3,308 | (42 | ) | 3,266 | 2,572 | (28 | ) | 2,544 | ||||||||||
| Adjusted EBITDA | $ | 705,093 | $ | 8,125 | $ | 713,218 | $ | 691,152 | $ | 14,373 | $ | 705,525 | ||||||
| (i) | The fair value gains on marketable securities include both the change in unrealized fair value and realized gains on the sale of marketable securities. By adding back the change in unrealized fair value on marketable securities, RioCan effectively continues to include realized gains or losses on the sale of marketable securities in Adjusted EBITDA and excludes unrealized fair value gains (losses) on marketable securities in Adjusted EBITDA. |
| (ii) | Includes transaction gains and losses realized on the disposition of investment properties. |
Adjusted Debt to Adjusted EBITDA Ratio
Adjusted Debt to Adjusted EBITDA is calculated as follows:
| 12 months ended | ||||||||||||||||||
| As at | December 31, 2023 | December 31, 2020 | ||||||||||||||||
| (thousands of dollars) | IFRS basis | Equity- accounted investments |
RioCan’s proportionate share |
IFRS basis | Equity- accounted investments |
RioCan’s proportionate share |
||||||||||||
| Adjusted Debt to Adjusted EBITDA | ||||||||||||||||||
| Average total debt outstanding | $ | 6,773,147 | $ | 192,804 | $ | 6,965,951 | $ | 6,667,444 | $ | 128,270 | $ | 6,795,714 | ||||||
| Less: average cash and cash equivalents | (119,400 | ) | (5,639 | ) | (125,039 | ) | (111,487 | ) | (1,920 | ) | (113,407 | ) | ||||||
| Average Total Adjusted Debt | $ | 6,653,747 | $ | 187,165 | $ | 6,840,912 | $ | 6,555,957 | $ | 126,350 | $ | 6,682,307 | ||||||
| Adjusted EBITDA | $ | 705,093 | $ | 8,125 | $ | 713,218 | $ | 691,152 | $ | 14,373 | $ | 705,525 | ||||||
| Adjusted Debt to Adjusted EBITDA | 9.44 | 9.59 | 9.49 | 9.47 | ||||||||||||||
Unencumbered Assets
The tables below summarize RioCan’s Unencumbered Assets to Unsecured Debt and Percentage of Normalized NOI Generated from Unencumbered Assets as at December 31, 2023 and 2020:
| As at | December 31, 2023 | December 31, 2020 | |||||||||||||||||
| (thousands of dollars, except where otherwise noted) | Targeted Ratios |
IFRS basis | Equity- accounted investments |
RioCan’s proportionate share |
IFRS basis | Equity- accounted investments |
RioCan’s proportionate share |
||||||||||||
| Unencumbered Assets | $ | 9,332,833 | $ | 59,433 | $ | 9,392,266 | $ | 8,685,469 | $ | 41,885 | $ | 8,727,354 | |||||||
| Total Unsecured Debt | $ | 4,065,920 | $ | — | $ | 4,065,920 | $ | 4,050,000 | $ | — | $ | 4,050,000 | |||||||
| Unencumbered Assets to Unsecured Debt | > 200% | 230% | 231% | 214% | 215% | ||||||||||||||
| Annual Normalized NOI – total portfolio (i) | $ | 649,208 | $ | 22,688 | $ | 671,896 | $ | 631,652 | $ | 13,772 | $ | 645,424 | |||||||
| Annual Normalized NOI – Unencumbered Assets (i) | $ | 432,820 | $ | 3,440 | $ | 436,260 | $ | 370,736 | $ | 2,396 | $ | 373,132 | |||||||
| Percentage of Normalized NOI Generated from Unencumbered Assets | > 50.0% | 66.7% | 64.9% | 58.7% | 57.8% | ||||||||||||||
| (i) | Annual Normalized NOI are reconciled in the table below. |
| Three months ended December 31, 2023 |
Three months ended December 31, 2020 |
|||||||||||||||||
| (thousands of dollars, except where otherwise noted) | IFRS basis |
Equity- accounted investments |
RioCan’s proportionate share |
IFRS basis | Equity- accounted investments |
RioCan’s proportionate share |
||||||||||||
| NOI (i) | $ | 165,798 | $ | 5,672 | $ | 171,470 | $ | 167,040 | $ | 3,443 | $ | 170,483 | ||||||
| Adjust the following: | ||||||||||||||||||
| Miscellaneous revenue | (540 | ) | — | (540 | ) | (1,154 | ) | — | (1,154 | ) | ||||||||
| Percentage rent | (2,562 | ) | — | (2,562 | ) | (2,774 | ) | — | (2,774 | ) | ||||||||
| Lease cancellation fees | (394 | ) | — | (394 | ) | (5,199 | ) | — | (5,199 | ) | ||||||||
| Normalized NOI – total portfolio | $ | 162,302 | $ | 5,672 | $ | 167,974 | $ | 157,913 | $ | 3,443 | $ | 161,356 | ||||||
| Annual Normalized NOI – total portfolio(ii) | $ | 649,208 | $ | 22,688 | $ | 671,896 | $ | 631,652 | $ | 13,772 | $ | 645,424 | ||||||
| NOI from unencumbered assets (i) | $ | 110,517 | $ | 860 | $ | 111,377 | $ | 94,956 | $ | 599 | $ | 95,555 | ||||||
| Adjust the following: | ||||||||||||||||||
| Miscellaneous revenue- Unencumbered Assets | (253 | ) | — | (253 | ) | (545 | ) | — | (545 | ) | ||||||||
| Percentage rent- Unencumbered Assets | (1,852 | ) | — | (1,852 | ) | (1,553 | ) | — | (1,553 | ) | ||||||||
| Lease cancellation fees- Unencumbered Assets | (207 | ) | — | (207 | ) | (174 | ) | — | (174 | ) | ||||||||
| Normalized NOI – Unencumbered Assets | $ | 108,205 | $ | 860 | $ | 109,065 | $ | 92,684 | $ | 599 | $ | 93,283 | ||||||
| Annual Normalized NOI – Unencumbered Assets (ii) | $ | 432,820 | $ | 3,440 | $ | 436,260 | $ | 370,736 | $ | 2,396 | $ | 373,132 | ||||||
| (i) | Refer to the NOI and Same Property NOI table of this section for reconciliation from NOI to operating income. |
| (ii) | Applied a factor of 4 to Annual Normalized NOI. |
Forward-Looking Information
This News Release contains forward-looking information within the meaning of applicable Canadian securities laws. This information reflects RioCan’s objectives, our strategies to achieve those objectives, as well as statements with respect to management’s beliefs, estimates and intentions concerning anticipated future events, results, circumstances, performance or expectations that are not historical facts. Forward-looking information generally can be identified 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 information reflects management’s current beliefs and is based on information currently available to management. All forward-looking information in this News Release is qualified by these cautionary statements. Forward-looking information is not a guarantee of future events or performance and, by its nature, is based on RioCan’s current estimates and assumptions, which are subject to numerous risks and uncertainties, including those described in the “Risks and Uncertainties” section in RioCan’s MD&A for the three months and year ended December 31, 2023 and in our most recent Annual Information Form, which could cause actual events or results to differ materially from the forward-looking information contained in this News Release. General economic conditions, including interest rate fluctuations, may also have an effect on RioCan’s results of operations. Material factors or assumptions that were applied in drawing a conclusion or making an estimate set out in the forward-looking information may include, but are not limited to: a gradual recovery and growth of the retail environment and the general economy over 2023; relatively historically low interest costs; a continuing trend toward land use intensification at reasonable costs and development yields, including residential development in urban markets; access to equity and debt capital markets to fund, at acceptable costs, future capital requirements and to enable our refinancing of debts as they mature; the availability of investment opportunities for growth in Canada; the timing and ability for RioCan to sell certain properties; the valuations to be realized on property sales relative to current IFRS values; and the Trust’s ability to utilize the capital gain refund mechanism. Although the forward-looking information contained in this News Release is based upon what management believes are reasonable assumptions, there can be no assurance that actual results will be consistent with this forward-looking information.
Given the current level of uncertainty arising from the COVID-19 pandemic, there can be no assurance regarding the impact of COVID-19 on the business, operations, and financial performance of RioCan and its tenants, as well as on consumer behaviors and the economy in general. General risks and uncertainties related to the COVID-19 pandemic also include, but are not limited to, the length, spread and severity of the pandemic; efficacy of the vaccines and any applicable boosters, the nature and length of the restrictive measures implemented or to be implemented, including any loosening of the restrictive measures, by various levels of government in Canada; RioCan’s tenants’ ability to pay rents as required under their leases; the availability of various support programs that are or may be offered by the various levels of government in Canada; the introduction or extension of temporary or permanent rent control or other forms of regulation or legislation that may limit the Trust’s ability or the extent to which it can raise rents based on market conditions upon lease renewals or restrict existing landlord rights or a landlord’s ability to reinforce such rights; domestic and global supply chains; timelines and costs related to the Trust’s development projects; the pace of property lease-up and rents and yields achieved upon development completion; potential changes in leasing activities, market rents and property valuations; the capitalization rates that arm’s length buyers and sellers are willing to transact on properties; the availability and extent of rent deferrals offered or to be offered by the Trust; domestic and global credit and capital markets, and the Trust’s ability to access capital on favourable terms or at all and its ability to maintain its credit ratings; the total return and dividend yield of RioCan’s Units; and the health and safety of our employees, tenants and people in the communities that our properties serve.
The forward-looking statements contained in this News Release are made as of the date hereof, and should not be relied upon as representing RioCan’s views as of any date subsequent to the date of this News Release. Management undertakes no obligation, except as required by applicable law, to publicly update or revise any forward-looking information, whether as a result of new information, future events or otherwise.
Contact Information
RioCan Real Estate Investment Trust
Dennis Blasutti
Chief Financial Officer
416-866-3033 | www.riocan.com
