RioCan Real Estate Investment Trust announced Thursday its financial results for the three months ended June 30.
“RioCan delivered another quarter of strong results and sustained leasing momentum, highlighted by exceptional leasing spreads and a high retention rate. The continued demand from high-quality retailers underscores the strength of the RioCan portfolio and reinforces our position as the landlord of choice. We continue to simplify our business, progress our capital recycling initiatives, and successfully execute our de-leveraging plan. These initiatives sharpen the operational focus of the Trust and enhance our financial flexibility to drive sustained growth,” said Jonathan Gitlin, President and CEO of RioCan.
RioCan said it meets the everyday shopping needs of Canadians through the ownership, management and development of necessity-based and mixed-use properties in densely populated communities. As at June 30, its portfolio is comprised of 178 properties with an aggregate net leasable area of approximately 32 million square feet (at RioCan’s interest).
Highlights:
- FFO per unit increased to $0.47, up $0.04 or 9.3% from the same period last year. This growth was driven by strong operating performance, reduced G&A expenses, accretion from unit buybacks in the current year and higher residential inventory gains. Higher interest expense partially offset these increases in FFO.
- Net income per unit of $0.49 was $0.08 per unit higher than the same period last year, reflecting greater fair value gains of $15.9 million on investment properties, compared to $5.9 million in the prior year quarter, in addition to the items noted for FFO above.
- Adjusted Debt to Adjusted EBITDA improved to 8.88x, ratio of unsecured to secured debt reached 61% to 39% and the FFO Payout Ratio was 60.5%. RioCan’s strong balance sheet, reinforced by $1.3 billion of Liquidity and $9.0 billion in Unencumbered Assets, enables flexibility and optimization of capital allocation.
- Leasing Progress: 1.3 million square feet were leased in the Second Quarter, including 1.2 million square feet of renewals.
- Leasing Spreads: In the Second Quarter, RioCan achieved a blended leasing spread of 20.6% with a new leasing spread of 51.5% and a renewal leasing spread of 17.4%, marking three consecutive quarters of leasing spreads at least in the high-teens. RioCan continued to capitalize on mark-to-market opportunities, achieving an average blended leasing spread of 23.5% on market deals. 72% of renewals were at market rates, while retaining high-quality essential retailers, including the renewal of eight grocery anchors in the quarter. The retention ratio of 91.6% reflects an effective balance between upgrading tenant quality and preserving strong tenancies, with elevated leasing spreads confirming the success of this strategy.
- Same Property NOI: Commercial Same Property NOI growth was 2.0% in the Second Quarter. Excluding the impact of higher legal and CAM/property tax settlements and a provision reversal in the prior year, Commercial Same Property NOI growth is 4.0%. Full year guidance for SPNOI is unchanged at ~3.5%.
- Occupancy: RioCan’s committed occupancy and retail committed occupancy were strong at 97.5% and 98.2%. Committed occupancy benefited from strong, more resilient retailers replacing transitional tenants who were paying under-market rents and offset the impact of recently vacated HBC units at Georgian Mall, Oakville Place and Tanger Ottawa. Our leasing team is actively working toward backfilling these units.
- Market Demographics: Average population and household income within a five-kilometre radius of RioCan’s portfolio increased by 1% and 5% to 277,000 and $155,000, respectively from the previous year.
- RioCan Living – Residential Rental: Residential rental operations generated $9.0 million of NOI, an increase of $1.8 million or 25.0% over the same period last year. As of June 30, 2025, there are 14 buildings in operation with a total fair value of $1.1 billion. RioCan continues to execute on its strategy of unlocking the value in its residential portfolio.
- RioCan Living – Residential Condominium: The construction loan for U.C. Tower 2 & 3 was fully repaid in the Second Quarter. The outstanding balance on the 11YV construction loan was reduced to $3.6 million reflecting payments made through to August 7, 2025. As a result, as of August 7, 2025, RioCan’s debt decreased by $124.2 million, and its outstanding guarantees related to 11YV declined by $298.0 million compared to Q1 2025. Full repayment of the remaining 11YV construction loan balance is expected in Q3 2025. Interim closings have commenced at Queen & Ashbridge and U.C. Tower 3.
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