Q2 2009 Report to Unitholders - English version (PDF 1.78 ... - RioCan

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Edward Sonshine, Q.C. President and Chief Executive Officer, RioCan Real Estate Investment Trust Dear Fellow Unitholder: The economic storm that began in the fall of 2007, picked up steam, and really made landfall in the winter of 2008, has been as strong as anything I have ever encountered. Throughout, RioCan has and will continue to weather the storm; our operations and our balance sheet are as strong as ever, and we feel confident in our position going forward when the clouds lift. The second quarter showed some signs of life and ‘less bad’ became the ‘new good’. Within the context of the overall economy, RioCan performed well in the second quarter of 2009. We took advantage of an opening of liquidity in the capital markets with both equity and debt offerings in the second quarter. Our leverage ratio remains conservative and, with our equity offering that was completed in June, RioCan reduced its leverage ratio from the first quarter. We used a portion of the capital raised to reduce our debt and repay, at par, some of our larger maturities that come due later this year and early next year, to manage any remaining refinancing risk in the unsecured debenture market. The remaining cash on hand will be used to repay maturing debt, fund day to day operations, and if the right opportunity arises, strategic acquisitions. The availability of capital continues to be limited. Since inception, RioCan has taken the approach to be diversified in its sources of capital. This approach has enabled the Trust to keep access to capital open throughout this recession and greatly reduce any dependency to any particular lender, or source of capital. We now have the strongest liquidity position that the Trust has ever had. With a strong cash position, approximately $300 million, and access to an additional $193 million undrawn lines of credit RioCan is in a unique position, and has the flexibility to focus on future opportunities. As RioCan reviews such opportunities, be assured that we will continue to maintain our disciplined approach to any acquisitions in which RioCan may participate. The performance of our assets reveals the inherent stability of RioCan’s portfolio and the strength of our strategy to focus on Canada’s largest markets. Our tenant portfolio has experienced some unexpected departures in the past two quarters, but our unparalleled breadth of tenants, with approximately 5,600 tenancies, has mitigated the effects of any one tenant bankruptcy. In addition, with the strength of our leasing team, we have already made good progress with finding new tenants to fill up the vacated space. For example, in the instance of Linens ‘N Things bankruptcy, eight of the vacated Linens ‘N Things have been leased and there are conditional deals negotiated on the remaining two locations without sacrificing long term rental income and we expect that the final space will be leased in the near future. Finally, our occupancy rate held firm in the second quarter at approximately the same level it was at the start of the year. Once again, let me take this opportunity to thank you, our unitholders, for your continued confidence in us, and hopefully take comfort in the promise of brighter days ahead. Edward Sonshine, Q.C. President and Chief Executive Officer July 27, 2009
REAL ESTATE PORTFOLIO FACT SHEET At June 30, 2009 Total Net Leasable Area (“NLA”) (sq. ft.): Retail Office Total Income Producing Properties 31,952,346 1,583,434 33,535,780 Properties Under Development 2,619,440 2,619,440 Total 34,571,786 1,583,434 36,155,220 Number of Tenancies 5,600 Occupancy: Retail Occupancy 97.2% Office Occupancy 95.3% Total Occupancy 97.1% Geographic Diversification Number of properties Percentage of annualized Income producing Properties under rental revenue properties development Total Ontario 62.3% 148 10 158 Quebec 17.9% 40 40 Alberta 10.0% 20 3 23 British Columbia 5.7% 13 13 New Brunswick 2.1% 7 7 Saskatchewan 0.5% 1 1 Manitoba 0.5% 1 1 Prince Edward Island 0.5% 1 1 Newfoundland 0.4% 2 2 Nova Scotia 0.1% 1 1 100.0% 234 13 247 Anchor and National Tenants Percentage of annualized Percentage rental revenue of total NLA Anchor and National Tenants 84.6% 84.7% Top Ten Sources of Revenue by Tenant Percentage of annualized Weighted average Ranking Tenant rental revenue remaining lease term (yrs) 1. Famous Players/Cineplex/Galaxy Cinemas 5.3% 13.7 2. Metro/A&P/Super C/Loeb/Food Basics 5.2% 8.9 3. Canadian Tire/PartSource/Mark’s Work Wearhouse 4.0% 11.8 4. Zellers/The Bay/Home Outfitters 3.6% 8.9 5. Wal-Mart 3.4% 9.5 6. Winners/HomeSense 3.2% 5.4 7. Loblaws/No Frills/Fortinos/Zehrs/Maxi 3.0% 5.8 8. Staples/Business Depot 2.5% 7.9 9. Reitmans/Penningtons/Smart Set/Addition-Elle/Thyme Maternity 1.9% 4.9 10. Harvey’s/Swiss Chalet/Kelsey’s/Montana’s/Milestone’s 1.8% 10.2 Total 33.9% Lease Expiries Lease expiries (NLA) Retail Class Total NLA 2009 2010 2011 2012 2013 New Format Retail 15,446,739 265,246 910,767 1,442,301 1,031,823 1,308,754 1.7% 5.9% 9.3% 6.7% 8.5% Grocery Anchored Centre 7,353,596 301,320 813,910 980,961 1,112,357 532,291 4.1% 11.1% 13.3% 15.1% 7.2% Enclosed Shopping Centre 6,265,632 284,570 774,421 807,852 477,359 613,872 4.5% 12.4% 12.9% 7.6% 9.8% Non-Grocery Anchored Centre 1,609,776 55,646 114,515 144,775 97,311 177,309 3.5% 7.1% 9.0% 6.0% 11.0% Urban Retail 1,276,603 41,539 64,383 74,981 136,682 156,138 3.3% 5.0% 5.9% 10.7% 12.2% Office 1,583,434 46,834 344,522 296,991 61,202 160,713 3.0% 21.8% 18.8% 3.9% 10.1% Total 33,535,780 995,155 3,022,518 3,747,861 2,916,734 2,949,077 3.0% 9.0% 11.2% 8.7% 8.8% Average net rent per square foot $14.32 $17.16 $14.26 $14.46 $15.89 $16.06 RIOCAN REAL ESTATE INVESTMENT TRUST SECOND QUARTER REPORT 2009 1
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CONSOLIDATED STATEMENTS OF UNITHOLD
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CONSOLIDATED STATEMENTS OF CASH FLO
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SENIOR MANAGEMENT, BOARD OF TRUSTEE
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Q2 2009 Report to Unitholders - English version (PDF 1.78 ... - RioCan

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