RioCan Real Estate Investment Trust

Good day, ladies and gentlemen, and welcome to the Rio Can Real Estate Investment Trust Q1 2022 Conference Call and Webcast. At this time, all participants are in a listen-only mode. Later, we will conduct a question and answer session and instructions will follow at that time. If anyone should require assistance during the conference, please press star then zero on your touchtone telephone. As a reminder, this conference call is being recorded. I would now like to turn the conference over to your host, Ms. Jennifer Suess, Senior Vice President, General Counsel, and Corporate Secretary. Ms. Suess, you may begin.

Thank you, and good morning, everyone. I am Jennifer Suess, Senior Vice President, General Counsel, and Corporate Secretary for RioCAN. Before we begin, I would like to draw your attention to the presentation materials that we will refer to in today's call, which were posted together with the MD&A and financials on RioCan's website yesterday evening. Before turning the call over, I am required to read the following cautionary statement. In talking about our financial and operating performance, and in responding to your questions, we may make forward-looking statements, including statements concerning RioCan's objectives, its strategies to achieve those objectives, as well as statements with respect to management's beliefs, plans, estimates, and intentions, and similar statements concerning anticipated future events, results, circumstances, performance, or expectations that are not historical facts. These statements are based on our current estimates and assumptions and are subject to risks and uncertainties that could cause our actual results to differ materially from the conclusions in these forward-looking statements. In discussing our financial and operating performance and in responding to your questions, We will also be referencing certain financial measures that are not generally accepted accounting principle measures, GAAP, under IFRS. These measures do not have any standardized definition prescribed by IFRS and are therefore unlikely to be comparable to similar measures presented by other reporting issuers. Non-GAAP measures should not be considered as alternatives to net earnings or comparable metrics determined in accordance with IFRS as indicators of RioCAN's performance, liquidity, cash flows, and profitability. RioCamp's management uses these measures to aid in assessing the Trust's underlying core performance and provides these additional measures so that investors may do the same. Additional information on the material risks that could impact our actual results and the estimates and assumptions we applied in making these forward-looking statements, together with details on our use of non-GAAP financial measures, can be found in the financial statements for the period ended March 30, 2022, and management's discussion and analysis related thereto as applicable, together with RioCan's most recent annual information form that are all available on our website and at www.cdar.com. Jonathan, I'll now turn it over to you.

Thanks so much, Jennifer, and thanks, everyone, for joining us again today. I'm pleased to report another strong quarter for this trust. Our results once again prove the quality of our portfolio is the resilience of our tenants, and our ability to advance growth initiatives. For the last two years, the impacts of the pandemic have been, well, they've certainly been widespread, but the commercial real estate sector, particularly retail, it's been pressured during mandated shutdowns and capacity restrictions. We have lockdowns and restrictions that carried into the first quarter of this year, lest we forget. RioCAN entered this environment from an advantageous position, and the trust more than held its own through the pandemic. The strength of our foundation and expertise allowed us to successfully navigate the operational challenges, while at the same time we focused on growth initiatives that translate into unit holder value. With the reopening of the nation, Canadians look forward to putting the pandemic well behind us. However, we're now facing different challenges. We're facing rising interest rates, global economic uncertainty based on war tensions, trade disruptions, and unprecedented inflation. Now, we can't control macroeconomic conditions. Instead, RioCAN's management team ensures that we mitigate against the impacts of the volatility that typically accompanies macroeconomic shifts. Our portfolio is built to perform in any economic backdrop. Our balance sheet is structured to absorb rising interest rates. Our culture is curated to retain and attract the best and the brightest. Now we already own the land on which we're developing and it's currently income producing. This positions us competitively in an inflationary environment as if development conditions are less than ideal, we can simply retain the highly productive properties in their current state. The trust's performance over the last two years demonstrates that in any environment, our portfolio, business, and team are well positioned to drive performance, overcome any challenges ahead of us, and emerge even stronger. The strength and stability of our foundation allow us to look beyond short-term turbulence and put sustainable outcomes and long-term unit holder returns at the center of everything we do. I'm now going to highlight our key operating metrics for the quarter. Then I'll discuss our progress towards our five-year plan to deliver total unit holder returns of between 10% and 12% per annum. I'll then turn the call over to our CFO, Dennis Blasuti, to discuss our financial performance. Our leading property portfolio, embedded development pipeline, and necessity-based retail anchor tenants are at the core of our growth strategy. RioCan's first quarter results are a testament to the successful execution of our strategic objectives. We prioritize stability and high quality income. We continue to focus on driving same property NOI growth. How? We're doing it by optimizing our tenant mix and revenue enhancing capital spending. We built on the excellent momentum we saw in previous quarters, and our first quarter operating results are back at pre-pandemic levels. Same property NOI grew by 4.1% when compared to the first quarter of last year. This growth was driven by a number of things, primarily occupancy gains, strong rental spreads, and a lower pandemic related provision. Now, bankruptcies are typically expected in the first quarter of any given year. However, Rio can experience minimal fallout at the beginning of 2022. Increased velocity in new leasing and higher tenant retention led to solid improvement in retail committed occupancy, which reached 97.4% in the first quarter. The quarter's new and renewed leases totaled 1.1 million square feet at a blended leasing spread of 8.9%. 372,000 square feet of new leasing was completed with our new leasing spreads at 13.5%. Leasing momentum at the well continued and accounted for the majority of new property under development leases. The consistent volume of leasing activity and magnitude of leasing spreads clearly demonstrate that well-located, professionally managed spaces like RioCamp centers are highly valued. We continue to evolve our tenant mix to make it more essential and more resilient. We also accelerate growth through the execution of our near-term development program while sensibly diversifying our asset base. We build dynamic and iconic developments that enhance communities and Canada's major markets. Earlier this year, we communicated our ambition to deliver $55 to $60 million in NOI from residential by 2026. Now, we've made significant progress in the first quarter towards this goal. RioCan's in-house development team delivered 145,000 square feet of completions, including two RioCan living rental buildings, Strata in Toronto and Latitude in Ottawa. Demand for these professionally managed, thoughtfully designed towers has been outstanding since they opened in January of 2022. Now, as of May 9th, they're already 62.3 and 62.5% leased, respectively. In addition to these two new assets, the first quarter was incredibly successful for our RioCan Living portfolio, which now has 1,837 operational rental units across eight buildings located in Toronto, Ottawa, Calgary, and Montreal. Rhythm in Ottawa is on schedule for completion in the fourth quarter of this year. Litho on DuPont in Toronto jumped to 75.7% leased as of May 9th. At the intersection of Yonge and Sheppard in Toronto, Pivot is now 91.4% leased and is expected to reach stabilization in the second quarter. Rio Can also recently acquired Market, which is a stabilized 139-unit residential rental property in Laval, Quebec. Market is the first phase of a three-phase development, and upon stabilization, Rio Can Living will acquire a 90% interest in the 297 units currently under construction. Pre-leasing of our newest tower, LUMA, in Ottawa has also begun, with residents expected to start moving in next month. The start of construction is imminent at NEXT, a new purpose-built rental project located in Surrey, British Columbia. And lands at Queen and Ashbridge in Toronto were acquired this quarter, expediting the development of this mixed-use project, which is scheduled for 2025 completion. Rio Can Living also has numerous condo projects underway. Demand at our most recent condo and townhouse development phase at Winfield Farm in Oshawa continues to be strong. All released condo units at the 588-unit UC Tower 2 have sold out, and sales at UC Tower 3 commenced last month, and we're averaging over $1,050 per square foot. An additional 66 townhomes at UC Uptown are now in interim occupancy, generating a $2 million inventory gain in the first quarter. The trust expects to deliver projects with costs of 675 million to 725 million in 2022. This is the largest amount of annual cost transfers since the inception of this development program. This is the flywheel concept that Dennis and I had alluded to in the last quarter call. RioCan also enhances its development pipeline through opportunistic asset acquisitions, including land assembly. For example, in the first quarter, RioCan entered into a 50-50 joint venture partnership with Parallax Properties for development at Bay and Bloor Street in Toronto. Each partner vended in a 50% interest of their respective properties and created additional value by assembling four adjacent properties for a mixed-use residential development on the six assembled properties. As co-development managers, the partnership is seeking approval for a high-rise residential condo building with a luxury streetfront retail component in the exclusive Toronto neighborhood of Yorkville. To summarize, the continuous improvement of our portfolio is happening concurrently with development deliveries. And at the same time, we're making opportunistic acquisitions enhancing value through zoning, and forming strategic partnerships. These partnerships mitigate risk, and they also generate sustainable pipeline of fees. This trend and trajectory will continue to gain momentum in each subsequent year. Now, I'm confident that our unit holders are going to reap the benefit of the resulting NAF and FFO increases long into the future. We do all this while maintaining an unwavering commitment to responsible growth. We placed the highest priority on ESG, culture, and balance sheet management. We continue to lead the way in ESG and were recognized as one of Canada's greenest employers for the second year in a row. Supporting our culture, investment in our people continues to accelerate, and we've introduced numerous initiatives to retain, advance, and further develop our talent. Now, in the face of rapidly changing market conditions, our focus remains on the long-term. The operating environment has stabilized, and this tremendous portfolio of ours will demonstrate its potential. We'll continue to capitalize on the strength of our portfolio, our embedded development pipeline, and our compelling growth prospects to deliver solid performance and maximize unit holder return. Our core strategies are enduring. They make sense in any backdrop. With a clear strategy, entrepreneurial spirit, and an unparalleled track record, We continue to harness Canada's most adaptable property portfolio and development pipeline to create vibrant community spaces where people want to shop, live, and work. We're on a clear path forward. I'm now going to turn the call over to Dennis, who's going to speak about our balance sheet in more detail.