RioCan is a leading REIT for retail real estate in Canada. It is a closed trust without legal personality. As one of Canada’s largest real estate mutual funds, RioCan owns, manages, and develops mixed-use retail properties in prime, densely populated areas in leading cities such as Vancouver, Calgary, Edmonton, Toronto, Ottawa, and Montreal.

Each RioCan location is strategically selected to meet the demographic and geographic needs of its retailers. The REIT generates ~ 90% of its revenue in six of Canada’s top markets, including over 51% in the GTA.

RioCan has a balanced but diversified and trusted tenant base made up of the largest retail companies in Canada. The portfolio includes more than 200 properties spanning 38 million square feet across Canada, with prime tenants being some of the leading national retailers such as Walmart, Canadian Tire, Cineplex, Loblaws and Metro.

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Investment data

Sales growth and market exposure

Over the past 25 years of existence, RioCan has built strong relationships with its tenants and suppliers. It has increasingly focused on expanding the rent of needs-based tenants. Most tenant relationships have existed for a long time. RioCan today obtains 78.8% of its total rent from strong and stable tenants. Around 96% of the properties are available for retail sale in six main markets. By type of business, grocery, pharmacy, and liquor retailers (~ 17% of rent) and value retailers (~ 14%) are the largest. followed by essential personal services (~ 12%), specialist dealers (~ 11%), other personal services (~ 10%), furniture (~ 9%), etc.

Since exiting the US market and completing the secondary market divestment program, RioCan’s portfolio has been primarily focused on the Canadian market. Given the uncertainty surrounding retail stores, the company is focusing on increasing its focus on condominiums and mixed-use properties.

The REIT has trimmed its exposure to gated centers, which account for just 9.5% of its annualized rental income, and reduced its exposure to declining retail concepts, with apparel now accounting for 6.9% of annualized rental income, compared to 8.2% last year and by more than 8.2% 50% since 2007.

RioCan has a strong focus on key markets in Canada. RioCan’s focus on fast growing, high income areas will strengthen its leading large market portfolio. The aim is also to develop environmentally friendly properties in accessible areas with a balanced variety of tenants.

RioCan processed 1.2 million square feet of new leases and made progress with 14 key developments in 2020. Rental income fell slightly by 0.3%, and the NOI for the same property was also down 6.5% year over year last year. The REIT has 42 million square feet of development pipeline. A wealth of experience, a strong large market portfolio and a solid balance sheet should help RioCan drive its organic growth in the future.


RioCan has an attractive dividend yield of 4.8% but poor payout growth of 0.70%, 0.42% and 0.57% over the 3, 5 and 10 year periods. FFO growth has posted a CAGR of 8.5% over the past three years. RioCan’s sales status has been declining over the past year.

A good mix of retail and mixed-use properties in Canada’s main markets helps diversify RioCan’s portfolio well. Because of its low leverage, RioCan is well positioned to withstand an increasing interest rate environment. RioCan has built a solid tenant base for needs-based and value-oriented goods and services and generates almost 90% of its income from real estate in major Canadian cities.

A world-class balance sheet also enables RioCan to access lower debt costs compared to peers. The sizeable asset base, strategic relationship with reliable tenants and long-term rental agreements ensure sufficient cash flow transparency. Projections like more than 1.2 million immigrants scheduled to come to Canada in the next three years and ~ 30% of immigrants scheduled to make Toronto their home are a major tailwind for the REIT.

Leading large market portfolio, robust development pipeline and a strong balance sheet are the strong competitive advantages of RioCan.

RioCan earnings history
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Note that REITs pay a distribution, not a dividend. Be aware of the tax differences.


Canada’s solid retail tenant base with solid financial strength will benefit the country’s retail property market over the long term. As such, it offers developers an attractive and highly competitive real estate market.

The success of a REIT is highly dependent on the location of its properties, and RioCan’s national presence, focused on Canada’s largest markets, gives it a strong competitive advantage over its peers.

RioCan competes with other real estate investors, managers, and owners. CT REIT, SmartCentres REIT, Choice Properties, and Plaza Retail REIT are some of the other leading retail REITs in Canada.

Bottom line

RioCan’s size and dominant position in Canada’s six major markets make it good for capitalizing on opportunities in the country’s economic and retail environment. It has developed rapidly over the years and adapted to the ever-changing real estate environment.

Organic growth should continue thanks to RioCan’s diversified and high quality portfolio driven by its strategy of accelerating the market and timely project delivery. Reducing exposure to declining retail concepts and increasing mixed-use properties in its portfolio position the REIT well for the future.

RioCan is strategically positioned to take advantage of attractive growth opportunities and create future value for stakeholders.

RioCan PE story
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