TORONTO, ONTARIO--(Marketwired - May 3, 2013) - RioCan Real Estate Investment Trust (TSX:REI.UN) - HIGHLIGHTS for three months ended March 31, 2013: All figures in Canadian dollars unless otherwise noted. RioCan's results are prepared in accordance with International Financial Reporting Standards ("IFRS").
RioCan Real Estate Investment Trust ("RioCan") today announced its financial results for the three months ended March 31, 2013. "I am pleased with our results for the first quarter and we are on course to achieve our goals for the year. So far in 2013, RioCan has accessed the unsecured debt markets twice, at attractive rates and has been able to proactively manage our debt maturity schedule by redeeming our 2015 maturity," said Edward Sonshine, Chief Executive Officer of RioCan. "Our program of paring RioCan's assets to improve the overall portfolio and to secure the best growth prospects in the long term is progressing well and is providing the necessary capital to complete a number of exciting enclosed mall acquisitions. In addition, we have a number of exciting and high profile development projects in our pipeline that will secure future growth for RioCan." Financial Highlights Operating Funds from operations ("Operating FFO")
Operating FFO for the First Quarter was $124 million ($0.41 per unit) compared to $103 million ($0.37 per unit) in the first quarter of 2012. The primary reasons for this increase were: a $19 million increase in net operating income ("NOI"), which was due to acquisitions, same property growth of 0.3% in Canada and 1.4% in the US, and the completion of greenfield developments. Operating FFO also benefited from higher development fees of $5 million in the First Quarter. These increases to Operating FFO were partially offset by increased interest expenses of $2 million related to acquisitions and higher general and administrative expenses of $1 million during the First Quarter. Same Store and Same Property NOI
Highlights for Same Store and Property Growth - year over year: Canada
Offset by:
Highlights for Same Store and Property Growth - year over year: United States
Offset by:
Leasing and Operational Highlights:
Highlights:
Portfolio Activity and Acquisition Pipeline During the First Quarter, RioCan completed two acquisitions of interests in income producing properties (one in Canada and one in the US) at an aggregate purchase price of $19 million, at RioCan's interest with a weighted average capitalization rate of 6.3%. Acquisitions Completed in the First Quarter Canada
United States
Acquisitions Completed subsequent to the First Quarter Canada
The acquisitions of Burlington Mall, Oakville Place, and South Cambridge Centre were completed as part of the H&R REIT and KingSett Consortium acquisition of Primaris REIT. Acquisitions Under Contract (Firm) RioCan currently has two income properties in Canada under contract where conditions have been waived that, if completed, represents $68 million of acquisitions at RioCan's interest, at a weighted average capitalization rate of 5.4%. Canada In Canada, RioCan has waived conditions pursuant to a purchase and sale agreement with respect to two properties as follows:
Acquisitions Under Contract (Conditional) RioCan has $27 million of income property acquisitions (at RioCan's interest) under contract where conditions have not yet been waived. These transactions are in various stages of due diligence and while efforts will be made to complete these transactions, no assurance can be given. Acquisition Pipeline RioCan is currently in negotiations regarding property acquisitions in Canada and the US that, if completed, represent approximately $25 million of additional acquisitions at RioCan's interest (calculated taking into account the US dollar transactions at an exchange rate of par). These transactions are in various stages of negotiations and while efforts will be made to complete these negotiations, no assurance can be given. Disposition Pipeline During the three months ended March 31, 2013, RioCan completed the disposition of St. Clair Beach Shopping Centre, a 76,000 square foot retail centre located in Windsor, Ontario, at a sales price of $10.5 million. Subsequent to the quarter, RioCan completed the disposition of RioCan Centre Thunder Bay, a 334,000 square foot retail centre located in Thunder Bay, Ontario, at a sales price of $62.8 million. The property had approximately $11 million of debt associated with it at the time of sale, which was assumed by the purchaser. RioCan has three property dispositions under firm contracts where conditions have been waived pursuant to purchase and sale agreements at an aggregate sales price of $301.0 million. Subsequent to the quarter end, RioCan has discharged one mortgage of approximately $59 million associated with these properties, resulting in remaining debt of approximately $55.9 million, which will be assumed by the purchaser. The properties have a gross leasable area of 1.25 million square feet. RioCan has four property dispositions under conditional contracts where conditions have not been waived pursuant to purchase and sale agreements at an aggregate sales price of $35.7 million. The properties are free and clear of financing and have a gross leasable area of 433,000 square feet. These transactions are in various stages of due diligence and while efforts will be made to complete these transactions, no assurance can be given. Additionally, RioCan is currently in the process of marketing for sale two other non-core Canadian properties. The properties have gross leasable area of 186,000 square feet. The fair value of the portfolio as at March 31, 2013 calculated in accordance with IFRS was approximately $13.4 million and the properties are free and clear of financing. RioCan is under no obligation to proceed with such proposed dispositions which, if completed, will be done to facilitate its objective of paring its portfolio and focusing on major markets. Development Portfolio As at March 31, 2013, RioCan had ownership interests in 11 development projects. RioCan's development projects will, upon completion, comprise about 10.5 million square feet (4.8 million square feet at RioCan's interest). In addition to its development projects, RioCan continues its urban intensification activities, primarily in the Toronto, Ontario market. During the three months ended March 31, 2013, RioCan acquired a 50% interest in Sage Hill Crossing, a 34 acre Greenfield development site located in Northwest Calgary, Alberta, at a purchase price of $32 million ($16 million at RioCan's interest) with KingSett on a 50/50 joint venture basis. Once completed, the anticipated gross leasable area is 378,000 square feet of retail use. A Letter of Intent is in place with Wal-Mart for a land lease and a binding offer to lease has been executed with Loblaws for a 45,000 square foot store. Development is expected to commence during the summer of 2013. The site was acquired free and clear of financing and RioCan will develop and manage the asset on behalf of the joint venture. Development acquisitions completed subsequent to the First Quarter The April 8, 2013 acquisition of Calgary East Village, a 2.8 acre site located in the East Village area of downtown Calgary, Alberta. The site is one of downtown Calgary's few remaining privately owned full city blocks. The site was acquired on a 50/50 joint venture basis between RioCan and KingSett at a purchase price of $20 million ($10 million at RioCan's interest). The site was acquired free and clear of financing and RioCan will develop, lease and manage the property on behalf of the joint venture. The joint venture is contemplating the development of 560,000 square feet of mixed use retail and office space, with development anticipated to commence in the spring of 2014. An executed Letter of Intent with Loblaws is in place to lease 100,000 square feet of space on the second floor of the development and expressions of interest have been received from several other potential tenants. The April 23, 2013 acquisition of West Kanata Lands, a 52.5 acre parcel of land located in Kanata, Ontario, approximately 20 kilometers west of Ottawa, Ontario. The site was acquired on a 50/50 joint venture basis between RioCan and Tanger at a purchase price of $29.4 million ($14.7 million at RioCan's interest). The site was acquired free and clear of financing and RioCan acquired a managing interest in the development property. It is intended that the site will be developed into an estimated 347,000 square foot outlet centre with the development expected to commence in the second quarter of 2013. The April 30, 2013 acquisition of phase II of the Globe & Mail lands development site, a 1.2 acre piece of land adjacent to the 6.47 acres acquired in Q4 2012, located west of Spadina Avenue, between Front Street West and Wellington Street West, in Toronto, Ontario. Consistent with the acquisition of phase I, phase II was acquired on a 40/40/20 joint venture basis between RioCan, Allied and Diamond Corp. The purchase price was $37 million ($15 million at RioCan's interest). In connection with the purchase, the parties assumed vendor take-back mortgage financing of approximately $22 million ($9 million at RioCan's interest) at an interest rate of 2.0% (interest only) for a five year term. The site will be redeveloped into mixed use retail, office and residential space. Development property acquisitions under contract RioCan currently has one development site in Canada under firm contract where conditions have been waived that, if completed, represents $29 million of acquisitions at RioCan's interest.
Additionally, RioCan has $54 million of development sites in Canada (at RioCan's interest) under contract where conditions have not yet been waived. These transactions are in various stages of due diligence and while efforts will be made to complete these transactions, no assurance can be given. Liquidity and Capital
Financing Highlights for the First Quarter Canada
US
RioCan's Consolidated Financial Statements, Management's Discussion and Analysis and a Supplemental Information Package for the three months ended March 31, 2013 are available on RioCan's website at www.riocan.com. Conference Call and Webcast Interested parties are invited to participate in a conference call with management on Friday, May 3, 2013 at 11:00 a.m. eastern time. You will be required to identify yourself and the organization on whose behalf you are participating. In order to participate, please dial 416-340-2218 or 1-866-226-1793 If you cannot participate in the live mode, a replay will be available until May 31, 2013. To access the replay, please dial 905-694-9451 or 1-800-408-3053 and enter passcode 5417299#. Scheduled speakers include Edward Sonshine, O.Ont. Q.C., Chief Executive Officer, Fred Waks, President and Chief Operating Officer and Rags Davloor, Executive Vice President and Chief Financial Officer. Management's presentation will be followed by a question and answer period. To ask a question, press "star 1" on a touch-tone phone. The conference call operator will be notified of all requests in the order in which they are made, and will introduce each questioner. Alternatively, to access the simultaneous webcast, go to the following link on RioCan's website http://investor.riocan.com/Investor-Relations/Events-Webcasts/default.aspx and click on the link for the webcast. The webcast will be archived 24 hours after the end of the conference call and can be accessed for 120 days. About RioCan RioCan is Canada's largest real estate investment trust with a total capitalization of approximately $14.4 billion as at March 31, 2013. It owns and manages Canada's largest portfolio of shopping centres with ownership interests in a portfolio of 344 retail properties containing more than 84 million square feet, including 50 grocery anchored and new format retail centres containing 13.7 million square feet in the United States through various joint venture arrangements as at March 31, 2013. RioCan's portfolio also includes 11 properties under development in Canada. For further information, please refer to RioCan's website at www.riocan.com. Non-IFRS measures RioCan's consolidated financial statements are prepared in accordance with IFRS. The following measures, Funds From Operations ("FFO"), Operating Funds From Operations ("Operating FFO"), and Adjusted Earnings before interest, taxes, depreciation and amortization ("Adjusted EBITDA") as well as other measures discussed elsewhere in this 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 uses these measures to better assess the Trust's underlying performance and provides these additional measures so that investors may do the same. For a full definition for these measures please refer to RioCan's Management's Discussion and Analysis for the period ended March 31, 2013. Forward-Looking Information This news release contains forward-looking statements within the meaning of applicable securities laws. These statements include, but are not limited to, statements made in this News Release (including the sections entitled "Highlights for the three months ended March 31, 2013", "Financial Highlights", "Portfolio Stability", "Portfolio Activity and Acquisition Pipeline", "Development Portfolio", and "Liquidity and Capital"), and other statements concerning RioCan's objectives, its strategies to achieve those objectives, as well as statements with respect 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 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 statements reflect management's current beliefs and are based on information currently available to management. All forward-looking statements in this News Release are qualified by these cautionary statements. These forward-looking statements are not guarantees of future events or performance and, by their nature, are based on RioCan's current estimates and assumptions, which are subject to risks and uncertainties, including those described under "Risks and Uncertainties" in RioCan's Management's Discussion and Analysis for the period ended March 31, 2013, which could cause actual events or results to differ materially from the forward-looking statements contained in this News Release. Those risks and uncertainties include, but are not limited to, those related to: liquidity in the global marketplace associated with economic conditions, tenant concentrations, occupancy levels, access to debt and equity capital, interest rates, joint ventures/partnerships, the relative illiquidity of real property, unexpected costs or liabilities related to acquisitions, construction, environmental matters, legal matters, reliance on key personnel, unitholder liability, income taxes, the investment in the United States of America ("US"), fluctuations in the currency exchange rate between the Canadian and US dollar and RioCan's qualification as a real estate investment trust for tax purposes. 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 stable retail environment; relatively low and stable interest costs; a continuing trend toward land use intensification in high growth markets; access to equity and debt capital markets to fund, at acceptable costs, the future growth program to enable the Trust to refinance debts as they mature; the availability of purchase opportunities for growth in Canada and the US; and the impact of accounting principles adopted by the Trust effective January 1, 2012 under International Financial Reporting Standards ("IFRS"). 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 these forward-looking statements. Certain statements included in this News Release may be considered "financial outlook" for purposes of applicable securities laws, and such financial outlook may not be appropriate for purposes other than this News Release. The Income Tax Act (Canada) contains provisions which potentially impose tax on publicly traded trusts (the "SIFT Provisions"). However, the SIFT Provisions do not impose tax on a publicly traded trust which qualifies as a real estate investment trust ("REIT"). RioCan currently qualifies as a REIT and intends to continue to qualify for future years. Should this not occur, certain statements contained in this News Release may need to be modified. Except as required by applicable law, RioCan under takes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.
Contact Information: RioCan Real Estate Investment Trust Rags Davloor Executive Vice President & CFO (416) 642-3554 www.riocan.com | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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