• 5.0 million sq. ft. of new and renewed leases with new leasing spread of 12.3% and blended spread of 9.0%
• Strong tenant demand delivered retail committed occupancy of 97.9% and renewal retention ratio of 91.5%
TORONTO, Feb. 15, 2023 (GLOBE NEWSWIRE) -- 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, 2022 (the "Fourth Quarter").
“RioCan's well-positioned assets, strong and stable tenant mix and delivery of exceptional developments drove strong results in 2022,” said Jonathan Gitlin, President and CEO of RioCan. “RioCan has proven the stability and resilience of our portfolio and our ability to deliver on our growth strategy. We are poised to succeed in any environment and benefit from the favourable supply / demand dynamics within the Canadian retail real estate sector. At the same time, our established development platform continues to fuel future growth. With confidence in our competitive advantages, I am pleased to announce a distribution increase aligned with our goal to deliver consistent, sustainable growth for our unitholders."
| Three months ended December 31 | Years ended December 31 | |||||||||||||||
| (in millions, except where otherwise noted, and per unit values) | 2022 | 2021 | 2022 | 2021 | ||||||||||||
| Financial Highlights | ||||||||||||||||
| FFO 1 | $ | 127.6 | $ | 146.5 | $ | 524.7 | $ | 507.0 | ||||||||
| FFO per unit - diluted 1 | $ | 0.42 | $ | 0.46 | $ | 1.71 | $ | 1.60 | ||||||||
| Net income (loss) | $ | (5.0 | ) | $ | 208.8 | $ | 236.8 | $ | 598.4 | |||||||
| Weighted average Units outstanding - diluted (in thousands) | 302,423 | 315,733 | 306,247 | 317,284 | ||||||||||||
| Net book value per unit 2 | $ | 25.73 | $ | 25.54 | $ | 25.73 | $ | 25.54 | ||||||||
| 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. |
| 2. | Information presented as at respective periods then ended. |
FFO per Unit and Net Income
- Full year FFO per unit was $1.71, an increase of $0.11 per unit or 7% over the prior year. Same Property NOI1 growth of 4.3% contributed an $0.08 increase in FFO per unit. Completed commercial developments drove FFO per unit higher by $0.02. Residential NOI1 accounted for $0.03 per unit of the FFO increase. Higher interest expense, which was partially insulated by hedges and higher interest income, resulted in a net $0.01 decrease in FFO per unit. The $0.07 reduction in FFO per unit from properties sold was mostly offset by a $0.06 FFO per unit accretion from Normal Course Issuer Bid (NCIB) activity.
- Net income for the year of $236.8 million was $361.6 million lower than the prior year due to fair value loss on investment properties of $241.1 million compared to a $124.1 million fair value gain in 2021. The fair value loss in 2022 was driven by increased capitalization rate assumptions, an impact of $408.5 million loss, partially offset by the positive impact of $167.4 million from higher property level NOI due to strong leasing. Over the long-term, underlying fundamentals are expected to drive cash flow growth offsetting short-term interest rate volatility that is currently impacting portfolio valuation.
- Net book value per unit was $25.73, an increase of $0.19 over the prior year, as the above fair value losses were offset by retained earnings, after distributions, gains from hedging activities and the accretive benefit of unit buybacks.
- Our FFO Payout Ratio of 59.0%, Liquidity1 of $1.5 billion, Unencumbered Asset1 pool of $8.3 billion, floating rate debt at 8.0% of total debt and staggered debt maturities, all contribute to our financial flexibility and balance sheet strength.
- RioCan's Board of Trustees has approved a 6% increase to the monthly distribution to Unitholders from $0.085 to $0.090 per unit commencing with the February 2023 distribution, payable on March 7, 2023 to Unitholders of record as at February 28, 2023. This brings RioCan's annualized distribution to $1.08 per unit.
- For 2023, we anticipate FFO per unit to be within the range of $1.77 to $1.80, SPNOI growth of 3%, and an FFO Payout Ratio of between 55% to 65%. Development Spending1 of $400 million to $450 million.
| 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 | ||||||||||||||
| 2022 | 2021 | 2022 | 2021 | ||||||||||||
| Operation Highlights (i) | |||||||||||||||
| Occupancy - committed (ii) | 97.4 | % | 96.8 | % | 97.4 | % | 96.8 | % | |||||||
| Blended leasing spread | 8.8 | % | 4.6 | % | 9.0 | % | 6.3 | % | |||||||
| New leasing spread | 11.8 | % | 3.8 | % | 12.3 | % | 8.6 | % | |||||||
| Renewal leasing spread | 8.3 | % | 5.0 | % | 8.2 | % | 5.4 | % | |||||||
(i) Includes commercial portfolio only.
(ii) Information presented as at respective periods then ended.
- Same Property NOI for 2022 grew by 4.3% driven by increases in occupancy, rent growth from contractual rent steps, increases in rent upon renewal and a lower pandemic-related provision, partially offset by certain 2021 favourable items which did not recur in 2022.
- Retail committed occupancy improved to 97.9%, driving committed occupancy for the commercial portfolio up to 97.4%. In the Fourth Quarter, the tenant retention ratio reached a new high of 93.5%, reflecting strong tenant demand for high quality, well-located retail space that is in short supply.
- The commercial blended leasing spread for the year of 9.0% was bolstered by new leasing spreads of 12.3%. Renewal leasing spreads were 8.2% or 9.2% excluding the impact of fixed renewals.
RioCan Living Update 1
- As at February 15, 2023, the RioCan Living™ residential rental portfolio is comprised of 2,219 purpose-built completed units across 10 buildings located in Toronto, Montreal, Ottawa and Calgary, including Rhythm™ which was completed in the Fourth Quarter. The eight stabilized buildings are 95.7% leased. The two most recently completed buildings, Luma™ and Rhythm, are currently in lease-up.
- Leasing velocity was excellent across the portfolio given increased demand and constrained supply in major markets.
- As of December 31, 2022, 2,575 condominium and townhouse units are under construction. Between 2023 and 2026, these projects are expected to generate combined sales revenue of over $860.0 million that can be redeployed to fund our development pipeline. Of RioCan’s six active condominium construction projects, 85% of the total units have been pre-sold, representing 95% of pro-forma revenues.
| 1. | Units at 100% ownership interest. |
Development Highlights
| Three months ended December 31 | Years ended December 31 | ||||||||||||||
| (in millions except square feet) | 2022 | 2021 | 2022 | 2021 | |||||||||||
| Development Highlights | |||||||||||||||
| Development Completions - sq. ft. in thousands (i) | 258.0 | 86.0 | 651.0 | 243.0 | |||||||||||
| Development Spending (ii) | $ | 114.6 | $ | 95.4 | $ | 427.1 | $ | 437.9 | |||||||
| Development Projects Under Construction - sq. ft. in thousands (iii) | 1,945.0 | 2,082.0 | 1,945.0 | 2,082.0 | |||||||||||
| i. | At RioCan's ownership. Represents net leasable area (NLA) of property under development completions. Excludes NLA of residential inventory completions. |
| ii. | Effective Q1 2022, the definition of total Development Spending was revised to include RioCan's share of Development Spending from equity-accounted joint ventures, accordingly, the comparative periods have been restated. |
| iii. | Information presented as at the respective periods then ended, includes properties under development and residential inventory, equity-accounted joint ventures and represents gross floor area of the respective projects. |
- In 2022, our development team continued to execute on our projects under construction with the Value of Development Deliveries1 reaching $688.2 million. We completed 651,000 square feet of NLA, including four residential rental buildings - Latitude™, Luma and Rhythm in Ottawa, as well as Strada™ in Toronto - which added a combined 246,000 square feet or 650 residential units to the RioCan Living portfolio. In addition, 608 condominium units were completed which generated revenue of $118.7 million and residential inventory gains of $22.4 million in 2022.
- At The Well™, office and parking construction are substantially complete and the retail will follow in the coming months. Approximately 1,023,000 square feet (at 100% ownership interest) is in tenant possession and 11 tenants are now operating in their respective units.
- The 592 rental residential units at FourFifty The Well™ will be completed in phases starting in mid-2023, through to early-2024. Pre-leasing of this building is scheduled to commence in Q1 2023.
- During 2022, we commenced construction at our Verge™ and Queen & Ashbridge™ mixed-use projects, both in Toronto, bringing the total number of mixed-use development projects under construction to 11.
- In parallel, our team continued to advance our pipeline of future development. Zoning approvals were obtained at RioCan Leaside Centre, Shoppers World Brampton, 2323 Yonge Street and RioCan Grand Park, solidifying approximately 5.5 million square feet of zoned density. Our total zoned square footage was 15.0 million at the end of 2022.
- The Trust continues to unlock value by advancing the development opportunities embedded within the existing portfolio, which has long term potential of 42.9 million square feet. With many opportunities to advance, we have chosen five on which to prioritize our efforts. These Focus Five sites are large scale, transit-oriented, mixed-use developments in the Greater Toronto Area that we are currently advancing through zoning and the site plan approval process. The projects, to be built in phases, have the potential to yield 20.2 million square feet, which could include as many as 23,126 residential units. The scale of these projects provides optionality to create value through development, partnerships and air rights sales, driving growth for many years to come.
- Our Focus Five projects are as follows:
| Developable Acreage | GFA (in '000 sf) (i) | Residential Units (ii) | Zoning Status | Progress | |||||||||
| Focus Five Sites | |||||||||||||
| RioCan Leaside Centre, Toronto, ON (iii) | 9 | 990 | 1,452 | Zoned | Site Plan Application submitted | ||||||||
| Shoppers World Brampton, ON | 52 | 4,129 | 4,728 | Zoned | Site Plan Application submitted (Phase 1) | ||||||||
| RioCan Scarborough Centre (Golden Mile), Toronto, ON | 26 | 4,271 | 4,983 | Zoning By-law Amendment submitted | Zoning By-law Amendment approved by City of Toronto with final zoning expected in 2023. Site Plan Application submission (Phase 1) in 2023 | ||||||||
| RioCan Hall, Toronto, ON | 1 | 858 | 693 | Zoning By-law Amendment submitted | Zoning By-law Amendment approved by City of Toronto with final zoning expected in 2023 | ||||||||
| RioCan Colossus Centre, Vaughan, ON | 62 | 10,000 | 11,270 | Official Plan Amendment application submitted | Zoning By-law Amendment submission in 2023 | ||||||||
| Total | 150 | 20,248 | 23,126 | ||||||||||
| i. | GFA includes commercial and residential development and is presented at RioCan's ownership interest. |
| ii. | Residential units are at 100% ownership. |
| iii. | Residential units are presented at 100% ownership but are comprised of 809 rental units which are 100% owned by RioCan and 643 condominium units, which are 25% owned by RioCan. |
| 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. |
Capital Management Update
- RioCan redeemed, in full, its $300.0 million, 2.83% Series Y unsecured debenture upon maturity on October 3, 2022. The repayment was primarily funded through six mortgages for a combined total of $295.5 million at a weighted average hedged interest rate of 3.67%.
- The Trust settled a total of $500 million of bond forward contracts during 2022, which resulted in a weighted average interest rate reduction of 109 basis points or a weighted average hedged interest rate of 3.68% for $507.5 million of 7-year debt.
- The Trust entered into bond forward contracts on November 24, 2022 to sell $200.0 million of Government of Canada Bonds due June 1, 2030 with an effective bond yield of 2.876% in April 2023, to hedge the anticipated issuance of fixed rate debt.
- As announced on November 3, 2022, RioCan renewed its Normal Course Issuer Bid, to acquire up to a maximum of 30,247,803 Units, subject to a daily maximum of 207,826.
- During 2022, 9,539,675 Units were acquired and cancelled at a weighted average purchase price of $21.36 per unit for a total cost of $203.9 million.
- RioCan established an automatic securities purchase plan on December 12, 2022 which allows for the purchase of Units under the NCIB at times when RioCan would ordinarily not be permitted to purchase Units due to regulatory restrictions and customary self-imposed blackout periods. There is no obligation to buy under this plan unless the Trust provides instructions to do so prior to each blackout period.
- On January 31, 2023, RioCan refinanced its $200 million non-revolving unsecured credit facility with a weighted average annual all-in fixed rate of 4.93% through interest rate swaps and a maturity date of February 5, 2025 with an option to extend to January 30, 2026, all other terms were similar to the matured facility.
Investing and Capital Recycling
- In 2022, the Trust completed $459.8 million of dispositions at a weighted average capitalization rate of 7.7%. These dispositions, which include two enclosed centres and certain non-core and secondary market assets, improve our overall portfolio quality and generate capital that can be recycled into more productive uses.
- As of February 15, 2023, the Trust has $43.0 million of firm or conditional deals or deals that closed subsequent to year end.
- Total Acquisitions1 during 2022 totalled $193.9 million including 139 income producing residential rental units acquired by RioCan through its purchase of a 90% interest in the first phase of Market, a new apartment complex in the heart of Laval, Montreal's largest suburban area. Market is RioCan Living's first acquisition of an operational multi-unit residential building and contributes to the diversification of RioCan's asset base and income stream.
| 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. |
Balance Sheet Strength
| (in millions except percentages) As at | December 31, 2022 | December 31, 2021 | ||||||||
| Balance Sheet Strength Highlights | ||||||||||
| Total assets | $ | 15,102 | $ | 15,177 | ||||||
| Total debt | $ | 6,742 | $ | 6,611 | ||||||
| Liquidity (i) 1 | $ | 1,548 | $ | 1,010 | ||||||
| Adjusted Debt to Adjusted EBITDA (i) 1 | 9.51x | 9.59x | ||||||||
| Total Adjusted Debt to Total Adjusted Assets (i) 1 | 45.2% | 43.9% | ||||||||
| Ratio of Unsecured Debt and Secured Debt (i) 1 | 53.9% / 46.1% | 59.4% / 40.6% | ||||||||
| Unencumbered Assets (i) 1 | $ | 8,257 | $ | 9,392 | ||||||
| Unencumbered Assets to Unsecured Debt (i) 1 | 218% | 231% | ||||||||
(i) At RioCan's proportionate share.
- As at December 31, 2022, the Trust had $1.5 billion of Liquidity in the form of a $1.1 billion undrawn revolving line of credit, $0.3 billion undrawn construction lines and other bank loans and $0.1 billion cash and cash equivalents. Pursuant to the terms of its credit agreement, the Trust has a $250 million option to increase its commitment under the revolving line of credit.
- RioCan’s unencumbered asset pool of $8.3 billion, which can be used to obtain secured financing to provide additional liquidity, generated 55.9% of Annual Normalized NOI1 and provided 2.18x coverage over Unsecured Debt1.
- Adjusted Debt to Adjusted EBITDA1 was 9.51x on a proportionate share basis, as at December 31, 2022, compared to 9.59x as at the end of 2021. The decrease was primarily due to higher Adjusted EBITDA due to growth in earnings from operations and development deliveries, partially offset by higher average Total Adjusted Debt balances, as development activities were partially funded with incremental debt.
| 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 16, 2023 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: https://www.netroadshow.com/events/login?show=a354a1be&confId=45471. Participants who pre-register 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: 887284.
For those unable to participate in the live mode, a replay will be available at 1-866-813-9403 with access code 334986.
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, 2022, our portfolio is comprised of 193 properties with an aggregate net leasable area of approximately 33.6 million square feet (at RioCan's interest) including office, residential rental and 10 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 ("2022 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 2022 Annual Consolidated Financial Statements and MD&A for the three months and year ended December 31, 2022, which are 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”), FFO per unit, FFO Adjusted per unit, Net Operating Income ("NOI"), Same Property NOI, Adjusted Same Property NOI, Development Spending, Value of Development Deliveries, Total Acquisitions, Liquidity, Adjusted Debt to Adjusted EBITDA, Total Adjusted Debt to Total Adjusted Assets, RioCan's Proportionate Share, Ratio of Unsecured Debt to Total Contractual Debt, Ratio of Secured Debt to Total Contractual 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 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 three months and year ended December 31, 2022.
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 sheet from IFRS to RioCan's proportionate share basis as at December 31, 2022 and December 31, 2021:
| As at | December 31, 2022 | December 31, 2021 | ||||||||||||
| (in thousands) | IFRS basis | Equity-accounted investments | RioCan's proportionate share | IFRS basis | Equity-accounted investments | RioCan's proportionate share | ||||||||
| Assets | ||||||||||||||
| Investment properties | $ | 13,807,740 | $ | 398,701 | $ | 14,206,441 | $ | 14,021,338 | $ | 409,794 | $ | 14,431,132 | ||
| Equity-accounted investments | 364,892 | (364,892 | ) | — | 327,335 | (327,335 | ) | — | ||||||
| Mortgages and loans receivable | 269,339 | — | 269,339 | 237,790 | — | 237,790 | ||||||||
| Residential inventory | 272,005 | 214,536 | 486,541 | 217,043 | 121,291 | 338,334 | ||||||||
| Assets held for sale | 42,140 | — | 42,140 | 47,240 | — | 47,240 | ||||||||
| Receivables and other assets | 259,514 | 37,779 | 297,293 | 248,959 | 35,367 | 284,326 | ||||||||
| Cash and cash equivalents | 86,229 | 8,001 | 94,230 | 77,758 | 9,113 | 86,871 | ||||||||
| Total assets | $ | 15,101,859 | $ | 294,125 | $ | 15,395,984 | $ | 15,177,463 | $ | 248,230 | $ | 15,425,693 | ||
| Liabilities | ||||||||||||||
| Debentures payable | $ | 2,942,051 | $ | — | $ | 2,942,051 | $ | 2,990,692 | $ | — | $ | 2,990,692 | ||
| Mortgages payable | 2,659,180 | 172,100 | 2,831,280 | 2,334,016 | 166,368 | 2,500,384 | ||||||||
| Lines of credit and other bank loans | 1,141,112 | 89,187 | 1,230,299 | 1,285,910 | 48,049 | 1,333,959 | ||||||||
| Accounts payable and other liabilities | 630,624 | 32,838 | 663,462 | 655,501 | 33,813 | 689,314 | ||||||||
| Total liabilities | $ | 7,372,967 | $ | 294,125 | $ | 7,667,092 | $ | 7,266,119 | $ | 248,230 | $ | 7,514,349 | ||
| Equity | ||||||||||||||
| Unitholders’ equity | 7,728,892 | — | 7,728,892 | 7,911,344 | — | 7,911,344 | ||||||||
| Total liabilities and equity | $ | 15,101,859 | $ | 294,125 | $ | 15,395,984 | $ | 15,177,463 | $ | 248,230 | $ | 15,425,693 | ||
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, 2022 and 2021:
| Three months ended December 31, 2022 | Three months ended December 31, 2021 | |||||||||||||||||||||||||
| (in thousands) | IFRS basis | Equity-accounted investments | RioCan's proportionate share | IFRS basis | Equity-accounted investments | RioCan's proportionate share | ||||||||||||||||||||
| Revenue | ||||||||||||||||||||||||||
| Rental revenue | $ | 268,864 | $ | 7,516 | $ | 276,380 | $ | 266,899 | $ | 7,071 | $ | 273,970 | ||||||||||||||
| Residential inventory sales | 33,873 | — | 33,873 | 65,620 | 965 | 66,585 | ||||||||||||||||||||
| Property management and other service fees | 3,450 | — | 3,450 | 3,920 | — | 3,920 | ||||||||||||||||||||
| 306,187 | 7,516 | 313,703 | 336,439 | 8,036 | 344,475 | |||||||||||||||||||||
| Operating costs | ||||||||||||||||||||||||||
| Rental operating costs | ||||||||||||||||||||||||||
| Recoverable under tenant leases | 95,258 | 836 | 96,094 | 93,346 | 588 | 93,934 | ||||||||||||||||||||
| Non-recoverable costs | 9,060 | 606 | 9,666 | 9,019 | 609 | 9,628 | ||||||||||||||||||||
| Residential inventory cost of sales | 26,448 | — | 26,448 | 39,286 | 289 | 39,575 | ||||||||||||||||||||
| 130,766 | 1,442 | 132,208 | 141,651 | 1,486 | 143,137 | |||||||||||||||||||||
| Operating income | 175,421 | 6,074 | 181,495 | 194,788 | 6,550 | 201,338 | ||||||||||||||||||||
| Other income (loss) | ||||||||||||||||||||||||||
| Interest income | 6,272 | 599 | 6,871 | 3,842 | 566 | 4,408 | ||||||||||||||||||||
| Income (Loss) from equity-accounted investments | (3,864 | ) | 3,864 | — | 6,503 | (6,503 | ) | — | ||||||||||||||||||
| Fair value (loss) gain on investment properties, net | (115,507 | ) | (8,404 | ) | (123,911 | ) | 72,255 | 1,480 | 73,735 | |||||||||||||||||
| Investment and other income (loss) | 240 | 324 | 564 | (696 | ) | (144 | ) | (840 | ) | |||||||||||||||||
| (112,859 | ) | (3,617 | ) | (116,476 | ) | 81,904 | (4,601 | ) | 77,303 | |||||||||||||||||
| Other expenses | ||||||||||||||||||||||||||
| Interest costs, net | 48,320 | 2,394 | 50,714 | 42,403 | 1,819 | 44,222 | ||||||||||||||||||||
| General and administrative | 12,845 | 23 | 12,868 | 11,924 | 16 | 11,940 | ||||||||||||||||||||
| Internal leasing costs | 3,306 | — | 3,306 | 2,982 | — | 2,982 | ||||||||||||||||||||
| Transaction and other costs | 3,236 | 40 | 3,276 | 6,779 | 114 | 6,893 | ||||||||||||||||||||
| Debt prepayment costs, net | — | — | — | 3,896 | — | 3,896 | ||||||||||||||||||||
| 67,707 | 2,457 | 70,164 | 67,984 | 1,949 | 69,933 | |||||||||||||||||||||
| Income (Loss) before income taxes | $ | (5,145 | ) | $ | — | $ | (5,145 | ) | $ | 208,708 | $ | — | $ | 208,708 | ||||||||||||
| Current income tax recovery | (184 | ) | — | (184 | ) | (68 | ) | — | (68 | ) | ||||||||||||||||
| Net income (loss) | $ | (4,961 | ) | $ | — | $ | (4,961 | ) | $ | 208,776 | $ | — | $ | 208,776 | ||||||||||||
| Year ended December 31, 2022 | Year ended December 31, 2021 | |||||||||||||||||
| (in thousands) | IFRS basis | Equity-accounted investments | RioCan's proportionate share | IFRS basis | Equity-accounted investments | RioCan's proportionate share | ||||||||||||
| Revenue | ||||||||||||||||||
| Rental revenue | $ | 1,074,192 | $ | 29,221 | $ | 1,103,413 | $ | 1,066,562 | $ | 26,836 | $ | 1,093,398 | ||||||
| Residential inventory sales | 118,659 | 936 | 119,595 | 93,727 | 6,474 | 100,201 | ||||||||||||
| Property management and other service fees | 20,996 | — | 20,996 | 14,772 | — | 14,772 | ||||||||||||
| 1,213,847 | 30,157 | 1,244,004 | 1,175,061 | 33,310 | 1,208,371 | |||||||||||||
| Operating costs | ||||||||||||||||||
| Rental operating costs | ||||||||||||||||||
| Recoverable under tenant leases | 376,914 | 2,889 | 379,803 | 367,297 | 2,089 | 369,386 | ||||||||||||
| Non-recoverable costs | 27,955 | 2,394 | 30,349 | 40,753 | 2,544 | 43,297 | ||||||||||||
| Residential inventory cost of sales | 96,286 | 422 | 96,708 | 65,346 | 2,371 | 67,717 | ||||||||||||
| 501,155 | 5,705 | 506,860 | 473,396 | 7,004 | 480,400 | |||||||||||||
| Operating income | 712,692 | 24,452 | 737,144 | 701,665 | 26,306 | 727,971 | ||||||||||||
| Other income (loss) | ||||||||||||||||||
| Interest income | 20,902 | 2,326 | 23,228 | 13,666 | 2,160 | 15,826 | ||||||||||||
| Income from equity-accounted investments | 2,349 | (2,349 | ) | — | 19,189 | (19,189 | ) | — | ||||||||||
| Fair value (loss) gain on investment properties, net | (241,128 | ) | (16,208 | ) | (257,336 | ) | 124,052 | (1,113 | ) | 122,939 | ||||||||
| Investment and other income (loss) | (1,842 | ) | 277 | (1,565 | ) | 2,743 | (806 | ) | 1,937 | |||||||||
| (219,719 | ) | (15,954 | ) | (235,673 | ) | 159,650 | (18,948 | ) | 140,702 | |||||||||
| Other expenses | ||||||||||||||||||
| Interest costs, net | 180,365 | 8,242 | 188,607 | 171,521 | 7,026 | 178,547 | ||||||||||||
| General and administrative | 54,437 | 74 | 54,511 | 51,400 | 60 | 51,460 | ||||||||||||
| Internal leasing costs | 12,204 | — | 12,204 | 11,807 | — | 11,807 | ||||||||||||
| Transaction and other costs | 8,274 | 182 | 8,456 | 17,343 | 272 | 17,615 | ||||||||||||
| Debt prepayment costs, net | — | — | — | 10,914 | — | 10,914 | ||||||||||||
| 255,280 | 8,498 | 263,778 | 262,985 | 7,358 | 270,343 | |||||||||||||
| Income before income taxes | $ | 237,693 | $ | — | $ | 237,693 | $ | 598,330 | $ | — | $ | 598,330 | ||||||
| Current income tax expense (recovery) | 921 | — | 921 | (59 | ) | — | (59 | ) | ||||||||||
| Net income | $ | 236,772 | $ | — | $ | 236,772 | $ | 598,389 | $ | — | $ | 598,389 | ||||||
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, 2022 and 2021:
| (thousands of dollars) | Three months ended December 31 | Years ended December 31 | ||||||||||
| 2022 | 2021 | 2022 | 2021 | |||||||||
| Operating Income | $ | 175,421 | $ | 194,788 | $ | 712,692 | $ | 701,665 | ||||
| Adjusted for the following: | ||||||||||||
| Property management and other service fees | (3,450 | ) | (3,920 | ) | (20,996 | ) | (14,772 | ) | ||||
| Residential inventory gains | (7,425 | ) | (26,334 | ) | (22,373 | ) | (28,381 | ) | ||||
| Operational lease revenue from ROU assets | 1,516 | 1,264 | 5,666 | 4,799 | ||||||||
| NOI | $ | 166,062 | $ | 165,798 | $ | 674,989 | $ | 663,311 | ||||
| Three months ended December 31 | Years ended December 31 | |||||||
| (thousands of dollars) | 2022 | 2021 | 2022 | 2021 | ||||
| Same Property NOI | $ | 149,771 | $ | 146,405 | $ | 600,529 | $ | 575,707 |
| NOI from income producing properties: | ||||||||
| Acquired (i) | 85 | — | 574 | 110 | ||||
| Disposed (i) | 3,665 | 9,923 | 26,227 | 49,699 | ||||
| 3,750 | 9,923 | 26,801 | 49,809 | |||||
| NOI from completed properties under development | 4,867 | 3,677 | 16,927 | 9,683 | ||||
| NOI from properties under de-leasing under development | 2,458 | 2,485 | 10,107 | 10,669 | ||||
| Lease cancellation fees | 391 | 394 | 5,119 | 6,457 | ||||
| Straight-line rent adjustment | 806 | 1,050 | 1,884 | 6,928 | ||||
| NOI from residential rental | 4,019 | 1,864 | 13,622 | 4,058 | ||||
| NOI | $ | 166,062 | $ | 165,798 | $ | 674,989 | $ | 663,311 |
(i) Includes properties acquired or disposed during the periods being compared.
Same Property NOI including completed properties under development (PUD)
| Three months ended December 31 | Years ended December 31 | |||||||||||
| (thousands of dollars,except where otherwise noted) | 2022 | 2021 | % change | 2022 | 2021 | % change | ||||||
| Same Property NOI | $ | 149,771 | $ | 146,405 | 2.3 | % | $ | 600,529 | $ | 575,707 | 4.3 | % |
| Add: | ||||||||||||
| NOI from completed properties under development | 4,867 | 3,677 | 16,927 | 9,683 | ||||||||
| Same Property NOI including completed PUD | $ | 154,638 | $ | 150,082 | 3.0 | % | $ | 617,456 | $ | 585,390 | 5.5 | % |
Adjusted Same Property NOI
| Three months ended December 31 | Years ended December 31 | ||||||||||||||
| (thousands of dollars,except where otherwise noted) | 2022 | 2021 | % change | 2022 | 2021 | % change | |||||||||
| Same Property NOI | $ | 149,771 | $ | 146,405 | 2.3 | % | $ | 600,529 | $ | 575,707 | 4.3 | % | |||
| Add (exclude): | |||||||||||||||
| Same property pandemic-related provision (recovery) | 1,281 | 2,742 | 1,104 | 16,175 | |||||||||||
| Legal and CAM/property tax settlements | 1,022 | (741 | ) | (90 | ) | (5,929 | ) | ||||||||
| Adjusted Same Property NOI | $ | 152,074 | $ | 148,406 | 2.5 | % | $ | 601,543 | $ | 585,953 | 2.7 | % | |||
FFO
The following table reconciles net income (loss) attributable to Unitholders to FFO for the three months and years ended December 31, 2022 and 2021:
| Three months ended December 31 | Years ended December 31 | |||||||||||
| (thousands of dollars, except where otherwise noted) | 2022 | 2021 | 2022 | 2021 | ||||||||
| Net income (loss) attributable to Unitholders | $ | (4,961 | ) | $ | 208,776 | $ | 236,772 | $ | 598,389 | |||
| Add back/(Deduct): | ||||||||||||
| Fair value losses (gains), net | 115,507 | (72,255 | ) | 241,128 | (124,052 | ) | ||||||
| Fair value losses (gains) included in equity-accounted investments | 8,404 | (1,480 | ) | 16,207 | 1,113 | |||||||
| Internal leasing costs | 3,306 | 2,982 | 12,204 | 11,807 | ||||||||
| Transaction losses on investment properties, net (i) | 560 | 901 | 1,027 | 402 | ||||||||
| Transaction costs on sale of investment properties | 2,652 | 6,324 | 5,734 | 14,391 | ||||||||
| Change in unrealized fair value on marketable securities | 382 | — | 3,782 | — | ||||||||
| Current income (recovery) expense | (184 | ) | (68 | ) | 921 | (59 | ) | |||||
| Operational lease revenue from ROU assets | 1,120 | 887 | 4,086 | 3,308 | ||||||||
| Operational lease expenses from ROU assets in equity-accounted investments | (12 | ) | (11 | ) | (46 | ) | (42 | ) | ||||
| Capitalized interest on equity-accounted investments (ii) | 869 | 465 | 2,863 | 1,725 | ||||||||
| FFO | $ | 127,643 | $ | 146,521 | $ | 524,678 | $ | 506,982 | ||||
| Add back: | ||||||||||||
| Debt prepayment costs, net | — | 3,896 | — | 10,914 | ||||||||
| One-time compensation costs | — | — | — | 6,057 | ||||||||
| Restructuring costs | 510 | — | 4,289 | — | ||||||||
| FFO Adjusted | $ | 128,153 | $ | 150,417 | $ | 528,967 | $ | 523,953 | ||||
| FFO per unit - basic | $ | 0.42 | $ | 0.46 | $ | 1.71 | $ | 1.60 | ||||
| FFO per unit - diluted | $ | 0.42 | $ | 0.46 | $ | 1.71 | $ | 1.60 | ||||
| FFO Adjusted per unit - diluted | $ | 0.42 | $ | 0.48 | $ | 1.73 | $ | 1.65 | ||||
| Weighted average number of Units - basic (in thousands) | 302,321 | 315,534 | 306,069 | 317,201 | ||||||||
| Weighted average number of Units - diluted (in thousands) | 302,423 | 315,733 | 306,247 | 317,284 | ||||||||
| FFO for last 4 quarters | $ | 524,678 | $ | 506,982 | ||||||||
| Distributions paid for last 4 quarters | $ | 309,416 | $ | 317,497 | ||||||||
| FFO Payout Ratio | 59.0 | % | 62.6 | % | ||||||||
| (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, RC (Leaside) LP- Class B and PR Bloor Street LP. 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, 2022 and 2021 are as follows:
| Three months ended December 31 | Years ended December 31 | |||||||
| (thousands of dollars) | 2022 | 2021 | 2022 | 2021 | ||||
| Development expenditures on balance sheet: | ||||||||
| Properties under development | $ | 78,282 | $ | 79,457 | $ | 298,409 | $ | 365,120 |
| Residential inventory | 33,631 | 14,330 | 112,597 | 62,351 | ||||
| RioCan's share of Development Spending from equity-accounted joint ventures | 2,639 | 1,619 | 16,062 | 10,456 | ||||
| Total Development Spending (i) | $ | 114,552 | $ | 95,406 | $ | 427,068 | $ | 437,927 |
| (i) | Beginning in Q1 2022, the definition of total Development Spending was revised to include RioCan's share of Development Spending from equity-accounted joint ventures accordingly, the comparative period has been restated. |
Value of Development Deliveries
Total Value of Development Deliveries for the three months and years ended December 31, 2022 and 2021 are as follows:
| Three months ended December 31 | Years ended December 31 | |||||||
| (thousands of dollars) | 2022 | 2021 | 2022 | 2021 | ||||
| Transfers PUD to IPP at fair value IFRS basis | $ | 239,297 | $ | 71,041 | $ | 569,494 | $ | 174,159 |
| Revenue from residential inventory sales IFRS basis | 33,873 | 65,620 | 118,659 | 93,727 | ||||
| Total Value of Development Deliveries | $ | 273,170 | $ | 136,661 | $ | 688,153 | $ | 267,886 |
Total Acquisitions
Total Acquisitions for the three months and years ended December 31, 2022 and 2021 are as follows:
| Three months ended December 31 | Years ended December 31 | |||||||
| (thousands of dollars) | 2022 | 2021 | 2022 | 2021 | ||||
| Income producing properties | $ | 5,011 | $ | — | $ | 96,031 | $ | 11,482 |
| Properties under development | — | — | 11,946 | 5,563 | ||||
| Residential inventory | — | — | 19,440 | — | ||||
| RioCan's share of acquisitions from equity-accounted joint ventures | — | — | 66,497 | — | ||||
| Total Acquisitions | $ | 5,011 | $ | — | $ | 193,914 | $ | 17,045 |
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, 2022 and 2021:
| As at | December 31, 2022 | December 31, 2021 | ||||||||||||||
| (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 | $ | 2,942,051 | $ | — | $ | 2,942,051 | $ | 2,990,692 | $ | — | $ | 2,990,692 | ||||
| Mortgages payable | 2,659,180 | 172,100 | 2,831,280 | 2,334,016 | 166,368 | 2,500,384 | ||||||||||
| Lines of credit and other bank loans | 1,141,112 | 89,187 | 1,230,299 | 1,285,910 | 48,049 | 1,333,959 | ||||||||||
| Total debt | $ | 6,742,343 | $ | 261,287 | $ | 7,003,630 | $ | 6,610,618 | $ | 214,417 | $ | 6,825,035 | ||||
| Cash and cash equivalents | 86,229 | 8,001 | 94,230 | 77,758 | 9,113 | 86,871 | ||||||||||
| Total Adjusted Debt | $ | 6,656,114 | $ | 253,286 | $ | 6,909,400 | $ | 6,532,860 | $ | 205,304 | $ | 6,738,164 | ||||
| Total assets | $ | 15,101,859 | $ | 294,125 | $ | 15,395,984 | $ | 15,177,463 | $ | 248,230 | $ | 15,425,693 | ||||
| Cash and cash equivalents | 86,229 | 8,001 | 94,230 | 77,758 | 9,113 | 86,871 | ||||||||||
| Total Adjusted Assets | $ | 15,015,630 | $ | 286,124 | $ | 15,301,754 | $ | 15,099,705 | $ | 239,117 | $ | 15,338,822 | ||||
| Total Adjusted Debt to Total Adjusted Assets | 44.3 | % | 45.2 | % | 43.3 | % | 43.9 | % | ||||||||
| As at | December 31, 2022 | December 31, 2021 | ||||||||||||||||
| (thousands of dollars) | IFRS basis | Equity-accounted investments | RioCan's proportionate share | IFRS basis | Equity-accounted investments | RioCan's proportionate share | ||||||||||||
| Total debt | $ | 6,742,343 | $ | 261,287 | $ | 7,003,630 | $ | 6,610,618 | $ | 214,417 | $ | 6,825,035 | ||||||
| Less: | ||||||||||||||||||
| Unamortized debt financing costs, premiums and discounts on origination and debt assumed, and modifications | (15,634 | ) | (690 | ) | (16,324 | ) | (16,414 | ) | (386 | ) | (16,800 | ) | ||||||
| Total Contractual Debt | $ | 6,757,977 | $ | 261,977 | $ | 7,019,954 | $ | 6,627,032 | $ | 214,803 | $ | 6,841,835 | ||||||
Liquidity
As at December 31, 2022, RioCan had $1.5 billion of Liquidity as summarized in the following table:
| As at | December 31, 2022 | December 31, 2021 | ||||||||||
| (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 | $ | 1,116,351 | $ | — | $ | 1,116,351 | $ | 634,080 | $ | — | $ | 634,080 |
| Undrawn construction lines and other bank loans | 267,562 | 70,094 | 337,656 | 241,883 | 47,641 | 289,524 | ||||||
| Cash and cash equivalents | 86,229 | 8,001 | 94,230 | 77,758 | 9,113 | 86,871 | ||||||
| Liquidity | $ | 1,470,142 | $ | 78,095 | $ | 1,548,237 | $ | 953,721 | $ | 56,754 | $ | 1,010,475 |
Unsecured Debt and Secured Debt
The following table reconciles total Unsecured Debt and Secured Debt to Total Contractual Debt as at December 31, 2022 and 2021:
| As at | December 31, 2022 | December 31, 2021 | ||||||||||||||
| (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 | $ | 3,783,649 | $ | — | $ | 3,783,649 | $ | 4,065,920 | $ | — | $ | 4,065,920 | ||||
| Total Secured Debt | 2,974,328 | 261,977 | 3,236,305 | 2,561,112 | 214,803 | 2,775,915 | ||||||||||
| Total Contractual Debt | $ | 6,757,977 | $ | 261,977 | $ | 7,019,954 | $ | 6,627,032 | $ | 214,803 | $ | 6,841,835 | ||||
| Percentage of Total Contractual Debt: | ||||||||||||||||
| Unsecured Debt | 56.0 | % | 53.9 | % | 61.4 | % | 59.4 | % | ||||||||
| Secured Debt | 44.0 | % | 46.1 | % | 38.6 | % | 40.6 | % | ||||||||
Adjusted EBITDA
The following table reconciles consolidated net income attributable to Unitholders to Adjusted EBITDA:
| 12 months ended | ||||||||||||||||
| As at | December 31, 2022 | December 31, 2021 | ||||||||||||||
| (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 | $ | 236,772 | $ | — | $ | 236,772 | $ | 598,389 | $ | — | $ | 598,389 | ||||
| Add (deduct) the following items: | ||||||||||||||||
| Income tax expense (recovery): | ||||||||||||||||
| Current | 921 | — | 921 | (59 | ) | — | (59 | ) | ||||||||
| Fair value losses (gains) on investment properties, net | 241,128 | 16,208 | 257,336 | (124,052 | ) | 1,113 | (122,939 | ) | ||||||||
| Change in unrealized fair value on marketable securities (i) | 3,783 | — | 3,783 | — | — | — | ||||||||||
| Internal leasing costs | 12,204 | — | 12,204 | 11,807 | — | 11,807 | ||||||||||
| Non-cash unit-based compensation expense | 9,056 | — | 9,056 | 12,546 | — | 12,546 | ||||||||||
| Interest costs, net | 180,365 | 8,242 | 188,607 | 171,521 | 7,026 | 178,547 | ||||||||||
| Debt prepayment costs, net | — | — | — | 10,914 | — | 10,914 | ||||||||||
| One-time cash compensation costs | — | — | — | 1,932 | — | 1,932 | ||||||||||
| Restructuring costs | 4,289 | — | 4,289 | — | — | — | ||||||||||
| Depreciation and amortization | 4,774 | — | 4,774 | 4,022 | — | 4,022 | ||||||||||
| Transaction losses on the sale of investment properties, net (ii) | 1,024 | — | 1,024 | 402 | — | 402 | ||||||||||
| Transaction costs on investment properties | 5,734 | 3 | 5,737 | 14,363 | 28 | 14,391 | ||||||||||
| Operational lease revenue (expenses) from ROU assets | 4,086 | (46 | ) | 4,040 | 3,308 | (42 | ) | 3,266 | ||||||||
| Adjusted EBITDA | $ | 704,136 | $ | 24,407 | $ | 728,543 | $ | 705,093 | $ | 8,125 | $ | 713,218 | ||||
| (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:
| 12 months ended | ||||||||||||||||||
| As at | December 31, 2022 | December 31, 2021 | ||||||||||||||||
| (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 | $ | 6,756,628 | $ | 251,888 | $ | 7,008,516 | $ | 6,773,147 | $ | 192,804 | $ | 6,965,951 | ||||||
| Less: average cash and cash equivalents | (74,871 | ) | (8,791 | ) | (83,662 | ) | (119,400 | ) | (5,639 | ) | (125,039 | ) | ||||||
| Average Total Adjusted Debt | $ | 6,681,757 | $ | 243,097 | $ | 6,924,854 | $ | 6,653,747 | $ | 187,165 | $ | 6,840,912 | ||||||
| Adjusted EBITDA | $ | 704,136 | $ | 24,407 | $ | 728,543 | $ | 705,093 | $ | 8,125 | $ | 713,218 | ||||||
| Adjusted Debt to Adjusted EBITDA | 9.49 | 9.51 | 9.44 | 9.59 | ||||||||||||||
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, 2022 and 2021:
| As at | December 31, 2022 | December 31, 2021 | |||||||||||||||
| (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 | $ | 8,200,280 | $ | 56,228 | $ | 8,256,508 | $ | 9,332,833 | $ | 59,433 | $ | 9,392,266 | |||||
| Total Unsecured Debt | $ | 3,783,649 | $ | — | $ | 3,783,649 | $ | 4,065,920 | $ | — | $ | 4,065,920 | |||||
| Unencumbered Assets to Unsecured Debt | > 200% | 217 | % | 218 | % | 230 | % | 231 | % | ||||||||
| Annual Normalized NOI - total portfolio (i) | $ | 646,540 | $ | 23,488 | $ | 670,028 | $ | 649,208 | $ | 22,688 | $ | 671,896 | |||||
| Annual Normalized NOI - Unencumbered Assets (i) | $ | 370,804 | $ | 3,440 | $ | 374,244 | $ | 432,820 | $ | 3,440 | $ | 436,260 | |||||
| Percentage of Normalized NOI Generated from Unencumbered Assets | > 50.0% | 57.4 | % | 55.9 | % | 66.7 | % | 64.9 | % | ||||||||
(i) Annual Normalized NOI are reconciled in the table below.
| Three months ended December 31, 2022 | Three months ended December 31, 2021 | |||||||||||||||
| (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) | $ | 166,062 | $ | 5,872 | $ | 171,934 | $ | 165,798 | $ | 5,672 | $ | 171,470 | ||||
| Adjust the following: | ||||||||||||||||
| Miscellaneous revenue | (802 | ) | — | (802 | ) | (540 | ) | — | (540 | ) | ||||||
| Percentage rent | (3,234 | ) | — | (3,234 | ) | (2,562 | ) | — | (2,562 | ) | ||||||
| Lease cancellation fees | (391 | ) | — | (391 | ) | (394 | ) | — | (394 | ) | ||||||
| Normalized NOI - total portfolio | $ | 161,635 | $ | 5,872 | $ | 167,507 | $ | 162,302 | $ | 5,672 | $ | 167,974 | ||||
| Annual Normalized NOI - total portfolio(ii) | $ | 646,540 | $ | 23,488 | $ | 670,028 | $ | 649,208 | $ | 22,688 | $ | 671,896 | ||||
| NOI from unencumbered assets | $ | 94,957 | $ | 860 | $ | 95,817 | $ | 110,517 | $ | 860 | $ | 111,377 | ||||
| Adjust the following for Unencumbered Assets: | ||||||||||||||||
| Miscellaneous revenue | (518 | ) | — | (518 | ) | (253 | ) | — | (253 | ) | ||||||
| Percentage rent | (1,430 | ) | — | (1,430 | ) | (1,852 | ) | — | (1,852 | ) | ||||||
| Lease cancellation fees | (308 | ) | — | (308 | ) | (207 | ) | — | (207 | ) | ||||||
| Normalized NOI - Unencumbered Assets | $ | 92,701 | $ | 860 | $ | 93,561 | $ | 108,205 | $ | 860 | $ | 109,065 | ||||
| Annual Normalized NOI - Unencumbered Assets (ii) | $ | 370,804 | $ | 3,440 | $ | 374,244 | $ | 432,820 | $ | 3,440 | $ | 436,260 | ||||
(i) Refer to the NOI and Same Property NOI table of this section for reconciliation from NOI to operating income.
(ii) Calculated by multiplying Normalized NOI by a factor of 4.
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, 2022 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.
