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ANNUAL REPORTANNUAL 2019 DELIVERING VALUE TODAY, BUILDING FOR TOMORROW Yonge Eglinton Centre Corporate PROFILE Welcome to RioCan, Canada’s preeminent, major market real estate investment trust (REIT). RioCan is one of Canada’s largest real estate investment trusts with a total enterprise value of approximately $15.0 billion as of December 31, 2019. RioCan owns, manages and develops retail- focused, increasingly mixed-use properties located in prime, high-density transit-oriented areas where Canadians shop, live and work. Our portfolio is comprised of 220 properties with an aggregate Net Leasable Area (NLA) of approximately 38.4 million square feet (at RioCan’s interest) including office, residential rental and 14 development properties. Furthermore, we have zoned density to accommodate 14.6 million square feet of additional mixed-use urban properties. To learn more about how we deliver real vision on solid ground, visit www.riocan.com. Canada’s preeminent 01 major market, urban mixed-use focused REIT. 90.1% and 52.4% 02 of total annualized rental revenue from the six major markets and GTA. Robust 29M sq. ft. 03 development pipeline 50.3% of which has zoning approvals. Consistently strong balance sheet 04 and disciplined capital allocation. 26 years of driving success 05 and adding value through a highly experienced, deep executive bench. 01 RioCan Annual Report 2019 Strategic Canadian Table of MAJOR MARKET CONTENTS POSITIONING 01 Corporate Profile 02 Strategic Canadian Major ED R LIZ EV A E Market Positioning U N N U N E 03 Letter from the CEO A * 07 Senior Management and F 90.1% R S Balance Sheet Highlights O T M E K 08 Yonge Sheppard Centre 6 R MA MA JOR 09 Yonge Eglinton Centre, eCentral, e8, e2, and 2323 Yonge Street 10 Sustainability and Colossus Centre 11 Frontier 12 The Well and King Portland Centre 13 Property Portfolio 22 Management’s Discussion and Analysis 102 Audited Annual Consolidated Edmonton Montreal Financial Statements 12 assets 19 assets 2.2M SF 2.6M SF IBC Corporate Information 6.6%* 4.7%* Calgary Ottawa 14 assets 35 assets 3.4M SF 4.7M SF 9.0%* 12.5%* Vancouver 7 assets Toronto 1.8M SF 89 assets 4.9%* 16.4M SF 52.4%* * Percentage of annualized rental revenue KEY METRICS in Canada’s Six Major Markets 176 31.1M 2.5% assets1 SF 1 SPNOI growth2 30.6% 14.6M 97.7% increase in SF zoned committed avg. population for mixed-use occupancy1 development within 5 km of assets since 20163 1 Includes commercial income-producing properties only and excludes 14 active properties currently Bathurst College Centre under development On cover: Yonge Sheppard Centre 2 If completed properties under development are included, SPNOI increased by 3.7% when compared to 2018 3 Source: DemoStats – 2019 - Trends, ©2020 Environics Analytics 02 Letter from Letter THE CEO Delivering value today, building for tomorrow Dear Unitholders, As RioCan completed its 26th year of operation, I am proud to report on our progress to establish RioCan as Canada’s preeminent, major market, urban mixed-use focused REIT. To that end, I am pleased that we have achieved two of our very important milestones: deriving 90.1% of our annualized rental revenue from Canada’s six major markets (Greater Toronto Area (GTA), Ottawa, Montreal, Vancouver, Edmonton, and Calgary), and 52.4% of our annualized rental revenue from the GTA. We are now in a position where we have created an almost endless pipeline of value creation opportunities while maintaining and growing a solid revenue stream. We have evolved our inherently value-rich portfolio to consist primarily of necessity-based retail and urban mixed-use properties positioned in the transit corridors in some of Canada’s most desirable, high-density locations. Our locations, commercial tenant mix, and diversity of revenue sources allow us to consistently produce a high quality of income with sustainable growth, resilient in the face of macroeconomic pressures. In addition, our balance sheet provides the flexibility, stability and financial strength necessary to execute our growth strategy, access low cost of debt and help insulate RioCan from broader market volatility. 03 RioCan Annual Report 2019 I am also delighted to note that RioCan made significant strides in its ongoing commitment to sustainability by, among other initiatives, MAJOR publishing our inaugural Sustainability Report and achieving a 77% improvement in the Global Real Estate Sustainability Benchmark MARKET (GRESB) Assessment over our 2017 score. Asset Classification % of NLA Annualized Rental Revenue Grocery Anchored Centre* 48.9% Leveraging dynamic consumer and 42.6% demographic trends to drive success Open Air Centre* 27.4% RioCan’s major market strategy is influenced by evolving consumer and 24.6% demographic trends that directly impact the commercial real estate landscape. Changing consumer spending habits and the proliferation Mixed-Use / Urban* of technology have resulted in the most dynamic retail environment 15.9% in history. It is easy to point to the growth of online shopping as an 23.7% influential catalyst; however, RioCan looks beyond the obvious changes such as where people are transacting. We also analyze what they buy Enclosed Centre* and how they spend their income. 7.8% 9.1% Our 26 years of experience provides a powerful competitive edge as it enables RioCan to anticipate patterns before they * Percentage of total major market portfolio become trends, to identify influential shifts as they develop, and to adapt our strategy accordingly. Successfully executed our Major Market strategy Since the advent of the iPhone in 2007, average household spending % of Annualized % of Annualized on communications, including connectivity, has increased by more than Rental Revenue in Rental Revenue 60%, leaving close to a thousand dollars less per household per year Major Markets in GTA to spend on apparel and other expenses. Simultaneously, experiences 90.1% have become more important than physical goods, which is highlighted 69.4% by the increase in spending on restaurants, gyms and services. In 52.4% addition, time is now valued at a premium with consumers aiming to 29.0% save as much of it as possible, in some cases sourcing everything they Peer RioCan Peer RioCan need in a single location – whether physical or virtual. Average* 2019 Average* 2019 * Peers include First Capital * Peers include First Capital At the same time, the Canadian population is urbanizing with more Realty, SMART REIT, and CT Realty and CT REIT; based REIT; based on company reports on company reports as of than 70% of the Canadian population living in a census metropolitan as of December 31, 2019 December 31, 2019 area. Among Canada’s six major markets, the GTA is the fastest growing, and Toronto is a leading city in population growth among the High occupancy and strong net central cities in all of North America. rent growth consistently delivering high quality income* In response to these consumer and demographic trends, RioCan purposefully concentrated its portfolio in the highest Net rent PSF CAGR since 2015: + 3.7% growth regions of Canada, with a focus on the GTA. $19.75 100% $19.07 $20 $17.59 $17.75 $17.11 $18 The success of this initiative is evident in the increase in population 97.2% 95% 96.6% 97.1% 95.6% $16 density in the areas immediately surrounding RioCan’s properties; the 94.0% average population in the five-kilometre trade areas around RioCan’s 90% $14 2015 2016 2017 2018 2019 assets is more than 30% higher than it was in 2016. Committed Occupancy Average Net Rent PSF * Canadian commercial properties only 04 In addition, RioCan strategically tailored its portfolio to serve the RENT growing number of consumers that wish to live, work, shop, and play in high-quality, urban mixed-use properties located in the most BREAKDOWN compelling major market transportation hubs. As these locations 2019 are highly attractive to a growing consumer base, they are by proxy compelling to the strongest tenants allowing RioCan to carefully curate our tenant portfolio to include the most resilient of retailers. As a result, 74.5% of our annualized net rental revenue is now derived from necessity-based and service-oriented tenants, and just over 50% of 74.5%* tenants are in the grocery, pharmacy, liquor, restaurant, or service sector. of rent from In parallel, we have reduced our exposure to more internet-sensitive necessity-based & service-oriented tenants such as department stores and apparel to 8.4% of tenants our annualized net rental revenue. Taking early action in response to strategic foresight has produced a powerful, stable, and productive retail portfolio designed to meet near- and long-term consumer needs. With consistently high occupancy levels and a track record of delivering Grocery/Pharmacy/ a high quality of income, RioCan can confidently say it has one of the Liquor/Restaurants 28.2% (+4% since 2007) strongest, best positioned portfolios in Canada. Personal Services 22.0% (+6% since 2007) Value Retailers 13.6% The future is Urban Mixed-Use Specialty Retailers 10.7% We could have rested satisfied with the knowledge that we have curated a major market retail portfolio capable of delivering stable and Furniture/Home 9.6% continuous high-quality income. Department Stores/Apparel However, we knew that by proactively identifying and 8.4% (-8% since 2007) capitalizing on inherent value-add opportunities, our portfolio Movie Theatres could generate stronger Net Asset Value (NAV) growth and 4.4% deliver even higher returns for our unitholders. Entertainment/Hobby/ Electronics/Books We understood that the urbanization noted earlier, along with 3.1% increasing immigration and migration to the major markets and aging residential rental stock would put pressure on the already * Annualized net rental revenue undersupplied purpose-built residential rental market.