REI.UN RioCan Real Estate Investment Trust

RioCan Real Estate Investment Trust (“RioCan" or the "Trust”) (TSX: REI.UN) announced today its financial results for the three months and year ended December 31, 2024.

• High demand locations generate new leasing spreads of 36.7% for 2024; blended leasing spreads of 18.7%
• Record-breaking committed occupancy at 98.0%; retail committed occupancy at high water mark of 98.7%
• 98% completion of the 372 expected Fourth Quarter condominium and townhouse interim closings to date
• Adjusted Debt to Adjusted EBITDA improved to 8.98x from 9.28x at the end of the prior year

"RioCan had another exceptional year, continuing its trend of achieving its operational and financial objectives, reaching record occupancy and leasing spreads”, said Jonathan Gitlin, President and CEO of RioCan. "RioCan is well positioned to capitalize on the favourable retail real estate fundamentals in the under supplied Canadian market. Our recent Unit buybacks and the Board of Trustees’ decision to increase our distribution for the fourth consecutive year demonstrate confidence in our core business and our team’s ability to maximize asset value while strategically managing capital."

Financial Highlights

 

 

 

 

 

 

 

 

 

 

 

 

Three months ended December 31

 

Years ended December 31

(in millions, except where otherwise noted, and per unit values)

 

 

2024

 

 

 

2023

 

 

 

2024

 

 

 

2023

 

 

 

 

 

 

 

 

 

 

 

 

FFO Adjusted per unit - diluted 1

 

$

0.47

 

 

$

0.44

 

 

$

1.81

 

 

$

1.77

FFO per unit - diluted 1

 

$

0.45

 

 

$

0.44

 

 

$

1.78

 

 

$

1.77

Net income (loss) per unit - diluted

 

$

0.42

 

 

$

(0.39)

 

 

$

1.58

 

 

$

0.13

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

As at

 

 

 

 

 

 

 

December 31, 2024

 

 

December 31, 2023

 

 

 

 

 

 

 

 

 

 

 

 

Net book value per unit

 

 

 

 

 

 

 

$

25.16

 

 

$

24.76

 

 

 

 

 

 

 

 

 

 

 

 

• Full year FFO Adjusted per unit was $1.81, an increase of $0.04 per unit or 2.3% compared to the prior year. This growth resulted from strong operating performance and completed developments, partially offset by reduced NOI related to the sale of lower growth commercial properties. Higher residential inventory gains and increases in interest income were offset by higher interest expense.
• Net income per unit for the year of $1.58, was $1.45 per unit higher than the prior year. In addition to the FFO items described above, net income included a $29.4 million reduction in the fair value of investment properties, compared to a fair value loss of $450.4 million in the prior year, contributing $1.40 per unit to the year-over-year increase.
• Adjusted Debt to Adjusted EBITDA1 improved to 8.98x, FFO Payout Ratio1 was 61.9% and Liquidity1 was $1.7 billion.

1. A non-GAAP measurement. For 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.

Distribution increase and Outlook

• RioCan's Board of Trustees approved a 4.3% increase to the monthly distribution to Unitholders from $0.0925 to $0.0965 per unit commencing with the February 2025 distribution, payable on March 7, 2025 to Unitholders of record as at February 28, 2025. This brings RioCan's annualized distribution to $1.16 per unit marking its fourth consecutive annual distribution increase.
• Based on our FFO guidance for 2025, we expect to maintain a payout ratio within our long-term target range of 55%-65%:

 

Outlook 2025 (i)

FFO per unit (ii)

$1.89 to $1.92

FFO Payout Ratio

~ 60%

Commercial Same Property NOI growth (ii) 1

~3.5%

(i)

The Trust continuously reviews its longer-term targets in the context of ever-evolving macroeconomic and business environments. This Outlook assumes normalized economic conditions and does not reflect any potential negative impact of tariffs, which could significantly alter economic conditions and market dynamics.

(ii)

Refer to the Outlook section of the Management Discussion and Analysis for the year ended December 31, 2024 for further details.

 

 

1.

A non-GAAP measurement. For 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. FFO Adjusted excludes $0.5 million net debt prepayment costs and $7.9 million restructuring costs from FFO. FFO is a non-GAAP measurement.

Selected Financial and Operational Highlights (i)

(in millions, except where otherwise noted, and percentages)

Three months ended December 31

 

Years ended December 31

 

 

2024

 

 

 

2023

 

 

 

2024

 

 

 

2023

Occupancy - committed (ii)

 

 

98.0 %

 

 

 

97.4 %

 

 

 

98.0 %

 

 

 

97.4 %

Retail occupancy - committed (ii)

 

 

98.7 %

 

 

 

98.4 %

 

 

 

98.7 %

 

 

 

98.4 %

Blended leasing spread

 

 

25.5 %

 

 

 

9.0 %

 

 

 

18.7 %

 

 

 

10.7 %

New leasing spread

 

 

52.5 %

 

 

 

13.2 %

 

 

 

36.7 %

 

 

 

14.7 %

Renewal leasing spread

 

 

17.6 %

 

 

 

8.7 %

 

 

 

13.1 %

 

 

 

9.8 %

 

 

 

 

 

 

 

 

 

 

 

 

Development Completions - sq. ft. in thousands (iii)

 

 

43.0

 

 

 

272.0

 

 

 

180.0

 

 

 

599.0

Development Spending (iv) 1

 

$

85.1

 

 

$

94.4

 

 

$

349.4

 

 

$

399.9

 

 

 

 

 

 

 

 

 

 

 

 

As at

 

 

 

 

 

 

 

December 31, 2024

 

 

December 31, 2023

Liquidity (iv) 1

 

 

 

 

 

 

 

$

1,694

 

 

$

1,964

Adjusted Debt to Adjusted EBITDA (iv) 1

 

 

 

 

 

 

 

8.98x

 

 

9.28x

Unencumbered Assets (iv) 1

 

 

 

 

 

 

 

$

8,201

 

 

$

8,090

 

 

 

 

 

 

 

 

 

 

 

 

(i)

Includes commercial portfolio only.

(ii)

Information presented as at respective periods then ended.

(iii)

At RioCan's ownership. Represents net leasable area (NLA) of property under development completions. Excludes NLA of residential inventory completions.

(iv)

At RioCan's proportionate share.

• Leasing Spreads: In 2024, RioCan achieved a record blended leasing spread of 18.7% with a new leasing spread of 36.7% and a renewal leasing spread of 13.1%. Leasing momentum grew steadily throughout the year, culminating in a strong Fourth Quarter performance and four consecutive quarters of double-digit leasing spreads.
• Occupancy: Strong demand for space in RioCan's premium portfolio drove committed occupancy and retail committed occupancy to record highs of 98.0% and 98.7%.
• Leasing Progress: 4.8 million square feet were leased in 2024, including 1.5 million square feet of new leases. Our ongoing initiatives to continuously improve tenant quality and the productivity of our shopping centres, included the following:
  • seven new grocery leases, three of which transformed retail assets into highly valued grocery-anchored centres;
  • a 135,000 square foot lease with Canadian Tire in the GTA; and
  • 40,000 square feet leased to Royal Bank of Canada including office space and a store front unit formally occupied by a fashion tenant at Yonge Eglinton Centre.

An additional land lease for a 158,000 square foot Costco was finalized at RioCan Centre Burloak, replacing less resilient fashion-focused tenants with a strong, serviced-base anchor.

• Same Property NOI: Commercial Same Property NOI excluding provision1 improved in the fourth quarter to 3.5% as the benefits of backfills at higher rents and leasing began to contribute. We expect this positive trend to continue in 2025. For 2024, the increase of 2.2% over the prior year was below our long-term target of 3.0% mainly due to 261,000 square feet of vacancies earlier in the year.
• RioCan Living - Residential Rental: Residential rental operations generated $29.2 million of NOI, an increase of $7.7 million or 36.1% over last year. Residential Same Property NOI1 grew by 5.1% over the prior year. The 13 operating buildings have a fair value of $0.9 billion. Upon completion of construction at FourFifty The WellTM in the second quarter of 2024, capitalization of related costs ceased, leading to a short-term negative FFO impact of $2.1 million in 2024. We expect a positive contribution in 2025 as the NOI from the property ramps up.
• RioCan Living - Residential Inventory: On a proportionate share basis, approximately $73.3 million of sales revenue and $12.0 million of residential inventory gains were generated on the interim closing of 356 units in the Fourth Quarter. As a condition of interim occupancy, purchasers must show proof of sufficient funds to close the transaction once the buildings are registered. As of February 18, 2025, 98% of the 372 expected Fourth Quarter condominium and townhouse interim occupancies were completed.
• Approximately $534 million of sales revenue is expected from the remaining units in the five active condominium construction projects. Approximately $427 million of this expected revenue, or 85% of units, has been pre-sold. These pre-sales are expected to close between 2025 and 2026 and are pursuant to legally binding contracts. They were primarily executed at prices below current market values, with an average deposit of 20%, motivating buyers to complete their purchases.
• During 2024, the Trust sold 25.0% of its interest in the 11YV project through two transactions, reducing its interest in the project to 12.5% and generating gains of $23.9 million. These transactions accelerated $180 million of the approximate $800 million of total condominium and townhouse sales revenue expected at the beginning of 2024, mitigating our exposure to condominiums and preserving capital as purchasers assume the costs-to-complete and debt obligations.
• Restructuring: As part of its ongoing responsible cost management and resource optimization, RioCan reduced its workforce by 9.5% resulting in a $7.9 million charge in 2024 or $0.03 FFO per unit. This charge is excluded from FFO Adjusted per unit. We anticipate annualized cash savings of approximately $8 million, with a net G&A impact of approximately $4 million.
• Development Completions: For the full year, $225.8 million or 180,000 square feet of properties under development were transferred to income producing properties. In Q2 2024, the Wellington Market opened, significantly increasing foot traffic at The WellTM.
• Capital Recycling: As of February 18, 2025, closed, firm and conditional dispositions totalled $189.3 million. Closed dispositions in 2024 totaled $132.7 million, including the sale of Strada, a co-owned residential property in downtown Toronto. Other closed dispositions in 2024 included an enclosed centre, a cinema-anchored property and several lower-growth assets as we continue to recycle capital into more accretive uses.
• Normal Course Issuer Bid (NCIB): Subsequent to year end, the Trust acquired and cancelled 3.2 million Units at a weighted average price of $18.51 per unit for a cost of $60.0 million. Proceeds from the sale of two low growth assets were or will be used to fund the purchases: RioCan Centre Vaughan, which closed in Q4 2024 and North Edmonton Cineplex Centre which is firm and scheduled to close in Q1 2025. These purchases were made pursuant to the automatic securities purchase plan adopted in connection with the Trust's 2024/2025 NCIB. The Trust believes that the market price of its units does not fully reflect the underlying value and future prospects of its business, making purchasing its own units an attractive investment opportunity.
• Investing: RioCan issued $190.2 million of new loans under its real estate lending program in 2024 earning an average interest rate of 11.0%. Additionally, $42.4 million of existing loans were repaid. Subsequent to year end, RioCan completed $51.2 million of previously announced acquisitions of residential rental assets located in Calgary and, in a non-cash deal, acquired its partner's 75% interest in the condominium lands at RioCan Leaside Centre in Toronto.
• Balance Sheet and Liquidity: As of December 31, 2024, the Trust's Adjusted Debt to Adjusted EBITDA ratio improved to 8.98x from 9.28x at the end of 2023, in line with its target range of 8.0x - 9.0x. The Trust has $1.7 billion of Liquidity to meet its financial obligations including a fully undrawn $1.25 billion revolving operating line of credit.
• Financing: The Trust successfully completed its 2024 financing plan, meeting its financial obligations while improving its debt metrics and financial flexibility. As of December 31, 2024, the weighted average term to maturity of its debt portfolio was extended to 3.72 years from 2.97 years, and the Ratio of Unsecured Debt to Total Contractual Debt1 increased to 55.7% from 54.3%, both compared to the end of 2023 and on a proportionate share basis.
• During the Fourth Quarter, the Trust issued $700.0 million aggregate principal amount of senior unsecured debentures in two series at an all-in weighted average interest rate of 4.60% per annum with a weighted average term to maturity of 5.8 years. The net proceeds were used to redeem, at par, the $300.0 million Series AI senior unsecured debentures that carried a coupon of 6.488%, and repay the $252.0 million drawn balance on the revolving operating line of credit. The Trust also extended the maturity date of the $200.0 million non-revolving unsecured credit facility to January 31, 2030 at a hedged annual all-in fixed interest rate of 4.47%.
• Subsequent to year end, the Trust issued $550.0 million of senior unsecured debentures in two series: $250.0 million floating rate Series AN senior unsecured debentures which were swapped to fixed rates, and $300.0 million fixed rate Series AO senior unsecured debentures. The all-in weighted average interest rate for the $550.0 million of debentures was 4.05% per annum inclusive of the interest rate swap, with a weighted average term to maturity of 4.8 years. The net proceeds were used to redeem the $500.0 million Series AB senior unsecured debentures upon maturity. Additionally, the Trust repaid $131.5 million of maturing mortgages. These financing activities improved the Ratio of Unsecured Debt to Total Contractual Debt to 57.0% and increased the Unencumbered Assets pool by $286.2 million.

1.

A non-GAAP measurement. For 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 Wednesday, February 19, 2025 at 10:00 a.m. (ET). Participants will be required to identify themselves and the organization on whose behalf they are participating.

To access the conference call, click on the following link to register at least 10 minutes prior to the scheduled start of the call: Pre-registration link. Participants who pre-register at any time prior to the call will receive an email with dial-in credentials including a login passcode and PIN to gain immediate access to the live call. Those that are unable to pre-register may dial-in for operator assistance by calling 1-833-950-0062 and entering the access code: 155981.

For those unable to participate in the live mode, a replay will be available at 1-866-813-9403 with access code: 526178.

To access the simultaneous webcast, visit RioCan’s website at 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, mixed-use properties located in prime, high-density transit-oriented areas where Canadians want to shop, live and work. As at December 31, 2024, our portfolio is comprised of 178 properties with an aggregate net leasable area of approximately 32 million square feet (at RioCan's interest). 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 ("2024 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 2024 Annual Consolidated Financial Statements and MD&A for the three months and year ended December 31, 2024, which are available on RioCan's website at www.riocan.com and on SEDAR+ at www.sedarplus.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”), FFO Adjusted, FFO per unit, FFO Adjusted per unit, Net Operating Income ("NOI"), Same Property NOI, Commercial Same Property NOI ("Commercial SPNOI"), Commercial Same Property NOI excluding provision, Residential Same Property NOI ("Residential SPNOI"), Development Spending, Ratio of Unsecured Debt to Total Contractual Debt, Liquidity, Adjusted Debt to Adjusted EBITDA, RioCan's Proportionate Share, 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 income 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, 2024.

The reconciliations for non-GAAP measures included in this News Release are outlined as follows:

RioCan's Proportionate Share

The following table reconciles the consolidated balance sheets from IFRS to RioCan's proportionate share basis as at December 31, 2024 and December 31, 2023:

As at

December 31, 2024

December 31, 2023

(thousands of dollars)

IFRS basis

Equity- accounted investments

RioCan's proportionate share

IFRS basis

Equity- accounted investments

RioCan's proportionate share

Assets

 

 

 

 

 

 

Investment properties

$

13,839,154

$

425,690

$

14,264,844

$

13,561,718

$

411,811

$

13,973,529

Equity-accounted investments

 

408,588

 

(408,588)

 

—

 

383,883

 

(383,883)

 

—

Mortgages and loans receivable

 

470,729

 

(5,321)

 

465,408

 

289,533

 

(6,707)

 

282,826

Residential inventory

 

284,050

 

337,920

 

621,970

 

217,186

 

407,946

 

625,132

Assets held for sale

 

16,707

 

—

 

16,707

 

19,075

 

—

 

19,075

Receivables and other assets

 

262,573

 

77,571

 

340,144

 

246,652

 

50,681

 

297,333

Cash and cash equivalents

 

190,243

 

9,890

 

200,133

 

124,234

 

14,506

 

138,740

Total assets

$

15,472,044

$

437,162

$

15,909,206

$

14,842,281

$

494,354

$

15,336,635

 

 

 

 

 

 

 

Liabilities

 

 

 

 

 

 

Debentures payable

$

4,088,654

$

—

$

4,088,654

$

3,240,943

$

—

$

3,240,943

Mortgages payable

 

2,851,602

 

160,701

 

3,012,303

 

2,740,924

 

158,292

 

2,899,216

Lines of credit and other bank loans

 

383,658

 

198,682

 

582,340

 

879,246

 

231,963

 

1,111,209

Accounts payable and other liabilities

 

589,792

 

77,779

 

667,571

 

543,398

 

104,099

 

647,497

Total liabilities

$

7,913,706

$

437,162

$

8,350,868

$

7,404,511

$

494,354

$

7,898,865

 

 

 

 

 

 

 

Equity

 

 

 

 

 

 

Unitholders’ equity

 

7,558,338

 

—

 

7,558,338

 

7,437,770

 

—

 

7,437,770

Total liabilities and equity

$

15,472,044

$

437,162

$

15,909,206

$

14,842,281

$

494,354

$

15,336,635

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, 2024 and 2023:

 

Three months ended December 31, 2024

Three months ended December 31, 2023

(thousands of dollars)

IFRS basis

Equity- accounted investments

RioCan's proportionate share

IFRS basis

Equity- accounted investments

RioCan's proportionate share

Revenue

 

 

 

 

 

 

Rental revenue

$

293,327

$

8,231

$

301,558

$

276,510

$

8,124

$

284,634

Residential inventory sales

 

59,670

 

18,902

 

78,572

 

13,789

 

11,365

 

25,154

Property management and other service fees

 

4,606

 

(375)

 

4,231

 

6,611

 

—

 

6,611

 

 

357,603

 

26,758

 

384,361

 

296,910

 

19,489

 

316,399

Operating costs

 

 

 

 

 

 

Rental operating costs

 

 

 

 

 

 

Recoverable under tenant leases

 

101,997

 

923

 

102,920

 

94,445

 

881

 

95,326

Non-recoverable costs

 

10,989

 

693

 

11,682

 

7,397

 

605

 

8,002

Residential inventory cost of sales

 

48,644

 

16,764

 

65,408

 

8,994

 

9,117

 

18,111

 

 

161,630

 

18,380

 

180,010

 

110,836

 

10,603

 

121,439

Operating income

 

195,973

 

8,378

 

204,351

 

186,074

 

8,886

 

194,960

Other income (loss)

 

 

 

 

 

 

Interest income

 

12,301

 

568

 

12,869

 

6,401

 

618

 

7,019

Income (loss) from equity-accounted investments

 

3,977

 

(3,977)

 

—

 

(7,190)

 

7,190

 

—

Fair value gain (loss) on investment properties, net

 

2,004

 

(1,855)

 

149

 

(222,921)

 

(13,506)

 

(236,427)

Investment and other income (loss), net

 

3,782

 

(282)

 

3,500

 

4,459

 

(25)

 

4,434

 

 

22,064

 

(5,546)

 

16,518

 

(219,251)

 

(5,723)

 

(224,974)

Other expenses

 

 

 

 

 

 

Interest costs, net

 

66,040

 

2,723

 

68,763

 

58,940

 

3,108

 

62,048

General and administrative

 

19,070

 

37

 

19,107

 

15,459

 

23

 

15,482

Internal leasing costs

 

3,262

 

—

 

3,262

 

3,156

 

—

 

3,156

Transaction and other costs

 

4,017

 

72

 

4,089

 

6,945

 

32

 

6,977

 

 

92,389

 

2,832

 

95,221

 

84,500

 

3,163

 

87,663

Income (loss) before income taxes

$

125,648

$

—

$

125,648

$

(117,677)

$

—

$

(117,677)

Current income tax recovery

 

—

 

—

 

—

 

(18)

 

—

 

(18)

Net income (loss)

$

125,648

$

—

$

125,648

$

(117,659)

$

—

$

(117,659)

 

Year ended December 31, 2024

Year ended December 31, 2023

(thousands of dollars)

IFRS basis

Equity- accounted investments

RioCan's proportionate share

IFRS basis

Equity- accounted investments

RioCan's proportionate share

Revenue

 

 

 

 

 

 

Rental revenue

$

1,137,127

$

32,672

$

1,169,799

$

1,091,105

$

33,609

$

1,124,714

Residential inventory sales

 

84,483

 

166,952

 

251,435

 

13,789

 

63,222

 

77,011

Property management and other service fees

 

17,916

 

(1,320)

 

16,596

 

18,977

 

—

 

18,977

 

 

1,239,526

 

198,304

 

1,437,830

 

1,123,871

 

96,831

 

1,220,702

Operating costs

 

 

 

 

 

 

Rental operating costs

 

 

 

 

 

 

Recoverable under tenant leases

 

397,042

 

3,453

 

400,495

 

374,149

 

3,549

 

377,698

Non-recoverable costs

 

37,147

 

2,723

 

39,870

 

26,320

 

2,338

 

28,658

Residential inventory cost of sales

 

64,389

 

137,710

 

202,099

 

8,994

 

49,476

 

58,470

 

 

498,578

 

143,886

 

642,464

 

409,463

 

55,363

 

464,826

Operating income

 

740,948

 

54,418

 

795,366

 

714,408

 

41,468

 

755,876

Other income (loss)

 

 

 

 

 

 

Interest income

 

42,469

 

2,163

 

44,632

 

25,131

 

2,559

 

27,690

Income from equity-accounted investments

 

38,507

 

(38,507)

 

—

 

18,383

 

(18,383)

 

—

Fair value loss on investment properties, net

 

(29,353)

 

(3,582)

 

(32,935)

 

(450,408)

 

(14,123)

 

(464,531)

Investment and other income (loss), net

 

17,531

 

(2,769)

 

14,762

 

8,501

 

(339)

 

8,162

 

 

69,154

 

(42,695)

 

26,459

 

(398,393)

 

(30,286)

 

(428,679)

Other expenses

 

 

 

 

 

 

Interest costs, net

 

257,544

 

11,544

 

269,088

 

208,948

 

11,339

 

220,287

General and administrative

 

59,847

 

86

 

59,933

 

60,367

 

56

 

60,423

Internal leasing costs

 

13,293

 

—

 

13,293

 

11,919

 

—

 

11,919

Transaction and other costs

 

6,747

 

93

 

6,840

 

9,344

 

(213)

 

9,131

 

 

337,431

 

11,723

 

349,154

 

290,578

 

11,182

 

301,760

Income before income taxes

$

472,671

$

—

$

472,671

$

25,437

$

—

$

25,437

Current income tax recovery

 

(794)

 

—

 

(794)

 

(13,365)

 

—

 

(13,365)

Net income

$

473,465

$

—

$

473,465

$

38,802

$

—

$

38,802

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, 2024 and 2023:

 

Three months ended December 31

Years ended December 31

(thousands of dollars)

 

2024

 

2023

 

2024

 

2023

Operating Income

$

195,973

$

186,074

$

740,948

$

714,408

Adjusted for the following:

 

 

 

 

Property management and other service fees

 

(4,606)

 

(6,611)

 

(17,916)

 

(18,977)

Residential inventory gains

 

(11,026)

 

(4,795)

 

(20,094)

 

(4,795)

Operational lease revenue from ROU assets, net (i)

 

3,889

 

1,638

 

9,218

 

6,717

NOI

$

184,230

$

176,306

$

712,156

$

697,353

(i)

Includes $2.1 million straight-line rent from operational lease revenue from ROU assets for three months and year ended December 31, 2024.

 

Three months ended December 31

Years ended December 31

(thousands of dollars)

 

2024

 

2023

 

2024

 

2023

Commercial

 

 

 

 

Commercial Same Property NOI

$

150,744

$

147,307

$

588,278

$

581,360

NOI from income producing properties:

 

 

 

 

Acquired (i)

 

903

 

69

 

5,060

 

1,780

Disposed (i)

 

1,726

 

5,504

 

8,382

 

27,250

 

 

2,629

 

5,573

 

13,442

 

29,030

 

 

 

 

 

NOI from completed commercial developments

 

10,916

 

9,033

 

42,739

 

31,380

NOI from properties under de-leasing (ii)

 

5,415

 

5,239

 

20,297

 

22,955

Lease cancellation fees

 

1,591

 

70

 

4,817

 

5,253

Straight-line rent adjustment (iii)

 

5,226

 

2,638

 

13,359

 

5,898

NOI from commercial properties

 

176,521

 

169,860

 

682,932

 

675,876

Residential

 

 

 

 

Residential Same Property NOI

 

5,362

 

5,426

 

18,008

 

17,139

NOI from income producing properties:

 

 

 

 

Acquired (i)

 

500

 

—

 

3,733

 

1,063

Disposed (i)

 

73

 

145

 

547

 

695

 

 

573

 

145

 

4,280

 

1,758

NOI from completed residential developments

 

1,774

 

875

 

6,936

 

2,580

NOI from residential rental

 

7,709

 

6,446

 

29,224

 

21,477

NOI

$

184,230

$

176,306

$

712,156

$

697,353

(i)

Includes properties acquired or disposed of during the periods being compared.

(ii)

NOI from limited number of properties undergoing significant de-leasing in preparation for redevelopment or intensification.

(iii)

It includes $2.1 million straight-line rent from operational lease revenue from ROU assets for three months and year ended December 31, 2024.

 

Three months ended December 31

Years ended December 31

(thousands of dollars)

 

2024

 

2023

 

2024

 

2023

Commercial Same Property NOI

$

150,744

$

147,307

$

588,278

$

581,360

Residential Same Property NOI

 

5,362

 

5,426

 

18,008

 

17,139

Same Property NOI

$

156,106

$

152,733

$

606,286

$

598,499

Commercial Same Property NOI excluding provision

 

Three months ended December 31

Years ended December 31

(thousands of dollars)

 

2024

 

2023

 

2024

 

2023

Commercial Same Property NOI

$

150,744

$

147,307

$

588,278

$

581,360

Add (exclude):

 

 

 

 

Same property provision for (recovery of) for credit losses

 

884

 

(837)

 

147

 

(5,344)

Commercial Same Property NOI excluding provision

$

151,628

$

146,470

$

588,425

$

576,016

FFO

The following table reconciles net income (loss) attributable to Unitholders to FFO for the three months and years ended December 31, 2024 and 2023:

 

Three months ended December 31

Years ended December 31

(thousands of dollars, except where otherwise noted)

 

2024

 

2023

 

2024

 

2023

Net income (loss) attributable to Unitholders

$

125,648

$

(117,659)

$

473,465

$

38,802

Add back (deduct):

 

 

 

 

Fair value (gains) losses, net

 

(2,004)

 

222,921

 

29,353

 

450,408

Fair value losses included in equity-accounted investments

 

1,855

 

13,506

 

3,584

 

14,124

Internal leasing costs

 

3,262

 

3,156

 

13,293

 

11,919

Transaction (gains) losses on investment properties, net (i)

 

(1,345)

 

1,147

 

534

 

1,182

Transaction gains on equity-accounted investments

 

—

 

(14)

 

(52)

 

(83)

Transaction costs on sale of investment properties

 

2,435

 

5,094

 

3,666

 

5,601

ERP implementation costs

 

—

 

3,503

 

5,368

 

12,032

ERP amortization

 

(484)

 

—

 

(1,302)

 

—

Change in unrealized fair value on marketable securities

 

—

 

(1,846)

 

(4,648)

 

865

Current income tax recovery

 

—

 

(18)

 

(794)

 

(13,365)

Operational lease revenue from ROU assets

 

3,534

 

1,283

 

7,814

 

5,116

Operational lease expenses from ROU assets in equity-accounted investments

 

(18)

 

(16)

 

(69)

 

(55)

Capitalized interest related to equity-accounted investments (ii):

 

 

 

 

Capitalized interest related to properties under development

 

110

 

134

 

426

 

219

Capitalized interest related to residential inventory

 

1,386

 

1,699

 

5,333

 

4,516

FFO

$

134,379

$

132,890

$

535,971

$

531,281

Add back (deduct):

 

 

 

 

Debt prepayment cost, net

 

912

 

—

 

455

 

—

Restructuring costs

 

7,202

 

24

 

7,852

 

1,368

FFO Adjusted

$

142,493

$

132,914

$

544,278

$

532,649

 

 

 

 

 

FFO per unit - basic

$

0.45

$

0.44

$

1.78

$

1.77

FFO per unit - diluted

$

0.45

$

0.44

$

1.78

$

1.77

FFO Adjusted per unit - diluted

$

0.47

$

0.44

$

1.81

$

1.77

Weighted average number of Units - basic (in thousands)

 

300,469

 

300,417

 

300,464

 

300,392

Weighted average number of Units - diluted (in thousands)

 

300,524

 

300,417

 

300,473

 

300,479

 

 

 

 

 

FFO for last four quarters

 

 

$

535,971

$

531,281

Distributions paid for last four quarters

 

 

$

332,011

$

321,414

FFO Payout Ratio

 

 

 

61.9%

 

60.5%

(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 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, RC (Leaside) LP - Class B, PR Bloor Street LP and RC Yorkville LP. This amount is not capitalized to development projects 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, 2024 and 2023 is as follows:

 

Three months ended December 31

Years ended December 31

(thousands of dollars)

 

2024

 

2023

 

2024

 

2023

Development expenditures on balance sheet:

 

 

 

 

Properties under development

$

36,459

$

52,267

$

164,658

$

244,260

Residential inventory

 

34,447

 

26,875

 

128,214

 

127,118

RioCan's share of Development Spending from equity-accounted joint ventures

 

14,175

 

15,223

 

56,512

 

28,568

Total Development Spending

$

85,081

$

94,365

$

349,384

$

399,946

 

Three months ended December 31

Years ended December 31

(thousands of dollars)

 

2024

 

2023

 

2024

 

2023

Mixed-use projects

$

70,261

$

83,271

$

309,440

$

346,956

Retail in-fill projects

 

14,820

 

11,094

 

39,944

 

52,990

Total Development Spending

$

85,081

$

94,365

$

349,384

$

399,946

Total Contractual Debt

The following table reconciles total debt to Total Contractual Debt as at December 31, 2024 and December 31, 2023:

As at

December 31, 2024

December 31, 2023

 

 

(thousands of dollars)

IFRS basis

Equity- accounted investments

RioCan's proportionate share

IFRS basis

Equity- accounted investments

RioCan's proportionate share

Debentures payable

$

4,088,654

$

—

$

4,088,654

$

3,240,943

$

—

$

3,240,943

Mortgages payable

 

2,851,602

 

160,701

 

3,012,303

 

2,740,924

 

158,292

 

2,899,216

Lines of credit and other bank loans

 

383,658

 

198,682

 

582,340

 

879,246

 

231,963

 

1,111,209

Total debt

$

7,323,914

$

359,383

$

7,683,297

$

6,861,113

$

390,255

$

7,251,368

Less:

 

 

 

 

 

 

Unamortized debt financing costs, premiums and discounts on origination and debt assumed, and modifications

 

(35,490)

 

(526)

 

(36,016)

 

(24,019)

 

(484)

 

(24,503)

Total Contractual Debt

$

7,359,404

$

359,909

$

7,719,313

$

6,885,132

$

390,739

$

7,275,871

Unsecured and Secured Debt

The following table reconciles Total Unsecured and Secured Debt to Total Contractual Debt as at December 31, 2024 and December 31, 2023:

As at

December 31, 2024

December 31, 2023

(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

$

4,300,000

$

—

$

4,300,000

$

3,950,000

$

—

$

3,950,000

Total Secured Debt

 

3,059,404

 

359,909

 

3,419,313

 

2,935,132

 

390,739

 

3,325,871

Total Contractual Debt

$

7,359,404

$

359,909

$

7,719,313

$

6,885,132

$

390,739

$

7,275,871

Percentage of Total Contractual Debt:

 

 

 

 

 

Unsecured Debt

 

58.4 %

 

 

55.7 %

 

57.4 %

 

 

54.3 %

Secured Debt

 

41.6 %

 

 

44.3 %

 

42.6 %

 

 

45.7 %

Liquidity

As at December 31, 2024, RioCan had approximately $1.7 billion of Liquidity as summarized in the following table:

As at

December 31, 2024

December 31, 2023

 

(thousands of dollars)

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

$

1,250,000

$

—

$

1,250,000

$

1,250,000

$

—

$

1,250,000

Undrawn construction lines and other bank loans

 

146,024

 

97,892

 

243,916

 

385,715

 

189,563

 

575,278

Cash and cash equivalents

 

190,243

 

9,890

 

200,133

 

124,234

 

14,506

 

138,740

Liquidity

$

1,586,267

$

107,782

$

1,694,049

$

1,759,949

$

204,069

$

1,964,018

Adjusted EBITDA

The following table reconciles consolidated net income attributable to Unitholders to Adjusted EBITDA:

Year ended

December 31, 2024

December 31, 2023

(thousands of dollars)

IFRS basis

Equity- accounted investments

RioCan's proportionate share

IFRS basis

Equity- accounted investments

RioCan's proportionate share

Net income attributable to Unitholders

$

473,465

$

—

$

473,465

$

38,802

$

—

$

38,802

Add (deduct) the following items:

 

 

 

 

 

 

Income tax recovery:

 

 

 

 

 

 

Current

 

(794)

 

—

 

(794)

 

(13,365)

 

—

 

(13,365)

Fair value losses on investment properties, net

 

29,353

 

3,582

 

32,935

 

450,408

 

14,123

 

464,531

Change in unrealized fair value on marketable securities (i)

 

(4,648)

 

—

 

(4,648)

 

865

 

—

 

865

Internal leasing costs

 

13,293

 

—

 

13,293

 

11,919

 

—

 

11,919

Non-cash unit-based compensation expense

 

10,385

 

—

 

10,385

 

10,154

 

—

 

10,154

Interest costs, net

 

257,544

 

11,544

 

269,088

 

208,948

 

11,339

 

220,287

Debt prepayment cost, net

 

455

 

—

 

455

 

—

 

—

 

—

Restructuring costs

 

7,852

 

—

 

7,852

 

1,368

 

—

 

1,368

ERP implementation costs

 

5,368

 

—

 

5,368

 

12,032

 

—

 

12,032

Depreciation and amortization

 

1,450

 

—

 

1,450

 

2,632

 

—

 

2,632

Transaction losses (gains) on the sale of investment properties, net (ii)

 

2

 

(52)

 

(50)

 

1,180

 

(83)

 

1,097

Transaction costs on investment properties

 

3,672

 

1

 

3,673

 

5,606

 

1

 

5,607

Operational lease revenue (expenses) from ROU assets

 

7,814

 

(69)

 

7,745

 

5,116

 

(55)

 

5,061

Adjusted EBITDA

$

805,211

$

15,006

$

820,217

$

735,665

$

25,325

$

760,990

(i)

The fair value gains and losses on marketable securities may include both the change in unrealized fair value and realized gains and losses 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 and losses on the sale of marketable securities in Adjusted EBITDA and excludes unrealized fair value gains and 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:

Year ended

December 31, 2024

December 31, 2023

(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

 

 

 

 

 

 

 

Adjusted Debt to Adjusted EBITDA

 

 

 

 

 

 

Average total debt outstanding

$

7,103,232

$

365,916

$

7,469,148

$

6,879,087

$

317,231

$

7,196,318

Less: average cash and cash equivalents

 

(89,937)

 

(10,307)

 

(100,244)

 

(120,952)

 

(11,408)

 

(132,360)

Average Total Adjusted Debt

$

7,013,295

$

355,609

$

7,368,904

$

6,758,135

$

305,823

$

7,063,958

Adjusted EBITDA (i)

$

805,211

$

15,006

$

820,217

$

735,665

$

25,325

$

760,990

Adjusted Debt to Adjusted EBITDA

 

8.71

 

 

8.98

 

9.19

 

 

9.28

(i)

Adjusted EBITDA is reconciled in the immediately preceding table.

Unencumbered Assets

The tables below summarize RioCan's Unencumbered Assets as at December 31, 2024 and December 31, 2023:

As at

December 31, 2024

December 31, 2023

(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

Investment properties

$

13,839,154

$

425,690

$

14,264,844

$

13,561,718

$

411,811

$

13,973,529

Less: Encumbered investment properties

 

5,704,034

 

359,465

 

6,063,499

 

5,531,177

 

352,425

 

5,883,602

Unencumbered Assets

$

8,135,120

$

66,225

$

8,201,345

$

8,030,541

$

59,386

$

8,089,927

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 can generally 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, 2024 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. 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.

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.

View source version on businesswire.com: https://www.businesswire.com/news/home/20250218171565/en/

RioCan Real Estate Investment Trust Dennis Blasutti Chief Financial Officer 416-866-3033 | www.riocan.com