TORONTO, ONTARIO--(Marketwire - July 29, 2010) - RioCan Real Estate Investment Trust ("RioCan" or the "Trust") (TSX:REI.UN) today announced its financial results for the three and six months ended June 30, 2010.

HIGHLIGHTS FOR THE SECOND QUARTER:

• Funds from operations ("FFO") increased by 37% to $92.8 million in the second quarter of 2010 compared to $67.9 million in the second quarter of 2009. On a per unit basis FFO increased 26% to $0.38 per unit from $0.30 per unit in the same period of 2009;

• FFO increased by 29% in the first six months of 2010 to $179 million compared to $138.5 million for the same period in 2009. On a per unit basis FFO increased 19% to $0.74 per unit from $0.62 per unit in the same period of 2009;

• Second quarter net operating income ("NOI") increased 17% or $20.4 million versus the second quarter of 2009 and increased 17% or $39.4 million for the first six months of 2010 versus the same period in 2009;

• Announced the execution of firm contracts with Inland Western Retail Real Estate Trust, Inc. ("Inland Western") to acquire eight grocery anchored and new format retail properties in the Texas markets of Dallas-Fort Worth, Houston, and Austin;

• Completed the acquisition of six properties in Canada and the US aggregating 665,466 square feet at a purchase price of $86.4 million at a weighted average cap rate of 7.9%;

• Maintained strong occupancy rate of 97.0%; and

• RioCan had cash on hand of $65.3 million at quarter end.

"RioCan continues to make good progress towards all our targets for 2010," said Edward Sonshine, Q.C., President & CEO. "Our acquisition platform in the US is gaining traction and we are seeing a number of high quality assets presented to us both in the US, and to a lesser extent Canada. As well, we are seeing material organic growth within the portfolio and expect to see more with the completion of some of our Greenfield Developments in the coming quarters."

Financial Highlights

FFO for the three months ended June 30, 2010 ("Second Quarter"), was $92.8 million ($0.38 per unit) compared to $67.9 million ($0.30 per unit) in the second quarter of 2009. The primary differences between net earnings and FFO are amortization and future income taxes. The primary reasons for this increase were: a $20.4 million increase in NOI, which is due to acquisitions, same store growth of 1.9%, the completion of Greenfield Developments, intensification of existing properties, and increased lease cancellation fees of $5 million. Additional factors that contributed to RioCan's FFO in the second quarter include: an increase of $7.4 million in transaction gains and an increase of $2.8 million in fees and other income. These increases to FFO were partially offset by a $4.0 million increase in interest expense, and higher G&A expenses, including $0.8 million of non-recurring International Financial Reporting Standards and Bill C-52 related costs during the Second Quarter.

RioCan reported net earnings for the Second Quarter of $46.9 million ($0.20 per unit) compared to $27.2 million ($0.12 per unit) for the same period in 2009, representing an increase of 72% (67% on a per unit basis).

For the six months ended June 30, 2010 FFO was $179 million ($0.74 per unit) compared to $138.5 million ($0.62 per unit) in 2009. The primary reasons for this increase were: a $39.4 million increase in NOI largely due to acquisitions and same store growth of 2.4%, and increased lease cancellation fees of $6.9 million. Additional factors that influenced RioCan's FFO in the first six months include: an increase of $14.3 million in transaction gains and an increase of $0.9 million in fees and other income. These increases to FFO were partially offset by a $12.7 million increase in interest expense.

For the six months ended June 30, 2010, RioCan reported net earnings of $84.4 million ($0.35 per unit) compared to $57.9 million ($0.26 per unit) for the same period in 2009, representing an increase of 46% (35% on a per unit basis).

Same property NOI for the Second Quarter increased by 2.7% year over year and increased 0.6% quarter over quarter. Same store NOI for the Second Quarter increased 1.9% year over year and increased 0.6% quarter over quarter. Same property and same store NOI gains were due largely to fixed rent steps, new and renewal leasing, lower bad debt expenses and a reduction in the number of unanticipated vacancies. Same store income was positively impacted by higher rental revenues and lower bad debt expenses of $2.8 million offset by vacancies of $2.1 million.

For the six months ended June 30, 2010, same property NOI increased by 3.4% and same store NOI increased 2.4% versus 2009. Same property and same store NOI gains were due largely to fixed rent steps, new and renewal leasing, lower bad debt expenses and a reduction in the number of unanticipated vacancies. Same store income was positively impacted by higher rental revenues and lower bad debt expenses of $5.5 million offset by vacancies of $3.8 million.

Portfolio Stability

As at June 30, 2010:

• The Canadian occupancy rate was approximately 97.0%, unchanged from March 31, 2010 (97.1% as at June 30, 2009), and RioCan's US occupancy rate was approximately 96.2% compared to 95.1% at March 31, 2010 resulting in an overall occupancy rate of 97.0% compared to 97.0% at March 31, 2010 (97.1% as at June 30, 2009);

• The portfolio economic occupancy rate represents the occupied net leaseable area for which tenants are paying rent. The portfolio economic occupancy rate was approximately 95.7%. There is approximately 476,000 square feet of space that has been leased to tenants that are not yet paying rent. The annualized rental impact once these tenants commence paying rent over the next four quarters is approximately $11.6 million;

• In the Second Quarter, RioCan retained approximately 90% of expiring leases compared to the second quarter of 2009, which had a renewal retention rate of approximately 93%;

• Approximately 924,000 square feet were renewed during the Second Quarter at an average rent increase of 10.3% or $1.48 per square foot (including anchor tenants) and 12.6% or $2.03 per square foot (excluding fixed rent options);

• Vacancies in the Second Quarter as a result of unanticipated tenant bankruptcies or store closures were 137,000 square feet at RioCan's interest, a significant improvement from the 174,000 square feet at RioCan's interest incurred in the same period in 2009. Total vacancies in the Second Quarter were 217,000 square feet at RioCan's interest up from 187,000 square feet at RioCan's interest of vacancies in 2009;

• Year to date, vacancies as a result of unanticipated tenant bankruptcies or store closures were 219,000 square feet at RioCan's interest, a significant improvement from the 454,000 square feet at RioCan's interest incurred in the same period in 2009;

• Vacancies as a result of unanticipated tenant bankruptcies for the six months ended June 30, 2010 were also lower than the level of tenant bankruptcies or store closures experienced for the same period in 2008;

• RioCan's Canadian portfolio is concentrated in Canada's six high growth markets (including Calgary, Edmonton, Montreal, Ottawa, Toronto and Vancouver). Assets in these markets account for approximately 65.8% of annualized rental revenue;

• National and anchor tenants represented approximately 85.5% of annualized rental revenue at June 30, 2010, compared to 84.6% at June 30, 2009;

• Approximately 61% of annualized rental revenue was derived from RioCan's 50 largest tenants; and

• No individual tenant comprised more than 5.0% of annualized rental revenue.

Portfolio Acquisition Activity

RioCan completed three acquisitions in Canada and three acquisitions in the US during the Second Quarter.

Canadian Investment

Acquisitions completed in Canada during the Second Quarter included the following:

• Halton Hills Shopping Centre is a 76,000 square foot grocery anchored shopping centre located in the suburban GTA market of Georgetown  anchored by a 36,000 square foot Food Basics, that was built in 1979.  The property was acquired at a purchase price of $10.3 million at a cap rate of 7.2%.

• Clappison Crossing in Flamborough, Ontario, is a 272,000 square foot new format retail centre on a 29 acre site that has been developed through a joint venture with Trinity. RioCan acquired Trinity's 50% interest in the property, which brings RioCan's ownership to 100%. The site is currently anchored by a newly opened 151,000 square foot Walmart on a ground lease and a 98,000 square foot Rona. The remaining tenants at the property include LCBO and Bank of Nova Scotia. An additional 54,000 square feet of retail space will be developed at the property as leasing is completed. The remaining interest in the property was acquired at a purchase price of $21.2 million at a cap rate of 7.25%.

• Corbett Centre in Fredricton, New Brunswick, is a 26 acre site that was developed through a joint venture with Trinity. The new format retail centre, when fully developed will comprise 473,000 square feet (including shadow anchors), of which 358,000 square feet has been completed. RioCan acquired Trinity's 37.5% interest in the property, which brings RioCan's ownership to 100%. The site is anchored by Home Depot which owns its own store and operates as part of the overall site.

•  Other major tenants include Michaels, Winners, Dollarama and PetSmart. An additional 115,000 square feet of retail space will be developed at the property as leasing is completed. The remaining interest in the property was acquired at a purchase price of $8.7 million at a cap rate of 7.25%.

Subsequent to the quarter end, RioCan has waived conditions and expects to complete the acquisition of:

• Keswick Walmart is a 162,748 square foot newly developed new format retail property located in Keswick, Ontario a suburb north of Toronto. The property, which is in the final stages of completion, is anchored by a 151,000 square foot Walmart (lease expiry 2030) and Bank of Nova Scotia.

• Repentigny Shoppers Drug Mart is a 17,000 single tenant Shoppers Drug Mart shopping centre in the Greater Montreal Area market of Repentigny, Quebec. The property was built in 2009 and is tenanted by Shoppers Drug Mart (lease expiry 2024).

• Niagara Square is a 382,291 square foot new format retail centre located in Niagara Falls, Ontario. The property was built in 1977 and was renovated in 1987 and again in 2008. The property is anchored by Cineplex. Other major tenants include Winners, Sport Chek, and Future Shop. RioCan is acquiring an additional 15% interest in this property, which will bring its ownership interest to 30%.

• Vaudreuil Shopping Centre is a 118,330 square foot new format retail property in the Greater Montreal Area market of Vaudreuil, Quebec. The property was built in two phases in 2006 and 2007 and is shadow anchored by a Canadian Tire and Super C grocery store. Major tenants in the property include Bureau en Gros (Staples), Golf Town, and Rona.

The purchase price for these four properties is approximately $57.3 million at a weighted average cap rate of approximatel 7.4%. Completion of these acquisitions is expected during the third and fourth quarters.

US Investment

During the Second Quarter, RioCan waived conditions and expects to complete the acquisition of Exeter Commons through its joint venture arrangement with Cedar Shopping Centers, Inc. ("Cedar") as announced in an earlier press release dated May 11, 2010 and has completed the purchase of an 80% interest in the following properties:

• Loyal Plaza: Loyal Plaza is a 293,825 square foot grocery-anchored shopping centre located in Williamsport, PA, anchored by 66,935 square foot Giant Foods (lease expiry 2019). The property was built in 1969 and renovated in 2000. Other major tenants include K-Mart, Staples, and Eckerd Drugs. The property was acquired at a purchase price of US$21.6 million at a cap rate of 8.5%.

• Stop & Shop Plaza: Stop & Shop Plaza is a free standing 54,511 square foot single tenant Stop & Shop supermarket (lease expiry 2026) located in Bridgeport, CT. The property was built in 2006. The property was acquired at a purchase price of US$7.2 million at a cap rate of 8.5%.

• Shaw's Plaza: Shaw's Plaza is a 176,610 square foot grocery-anchored shopping centre located in Raynham, MA, and is anchored by a 60,748 square foot Shaw's Supermarket (lease expiry 2023). The property was built in 1984. Other major tenants include Marshalls, and CVS. The property was acquired at a purchase price of US$16.3 million at a cap rate of 8.5%.

Also during the Second Quarter, RioCan announced that it had entered into definitive agreements with Inland Western to purchase an 80% interest in eight properties located in three core markets in Texas; Dallas-Fort Worth, Houston, and Austin. In aggregate, these three markets have a total population in excess of 14 million people, and together provide a diverse economic base with exposure to energy, government services, and technology sectors; with a large concentration of corporate headquarters.

The total consideration to be paid by RioCan is approximately US$123.3 million resulting in a net equity investment of US$55.1 million after the assumption of US$68.2 million of property level mortgage debt (RioCan's share) on the portfolio. The existing non-recourse first mortgage financing has a weighted average interest rate of 5.6%. The weighted average cap rate for the portfolio will be approximately 7.7%. Subsequent to the end of the Second Quarter RioCan has waived conditions and expects to complete the acquisition of these eight properties with Inland Western during the third and fourth quarters of 2010 as announced in an earlier press release dated July 13, 2010.

Acquisition Pipeline

Currently, RioCan has a number of additional acquisitions under consideration in both Canada and the US. The acquisitions under consideration are in various stages of due diligence, and as more information becomes available, RioCan will provide updates as to the details and expected timing of these acquisitions.

Liquidity and Capital

In selecting appropriate funding choices, RioCan's objective is to manage its capital structure in such a way as to diversify its funding sources while minimizing its funding costs and risks. RioCan had cash on hand of approximately $65.3 million at June 30, 2010 and has $260.8 million available to be drawn on its facilities.

During the Second Quarter, RioCan has renegotiated its lines of credit with two banks increasing the maximum that can be borrowed to $300 million. These lines are secured by a charge on certain income producing properties, have fixed terms of 3 years and are non callable. One of the facilities can be drawn in either Canadian or US funds. Subsequent to the quarter end, RioCan converted a term financing into a line of credit arrangement. The $78 million facility has a fixed term of two years and is currently fully drawn. These renegotiated facilities give RioCan added flexibility in managing its cash balances. Going forward, RioCan intends to reduce the dilution on the income statement of holding large amounts of cash by using its lines to access cash needed on a short term basis.

In addition, RioCan negotiated a $50 million US dollar facility with two banks for RioCan's Cedar joint venture.

Going forward, RioCan expects that coverage ratios such as interest coverage will be of increasing importance as they provide a better measure of credit worthiness and are more comparable than a leverage calculation. As at June 30, 2010, EBITDA interest coverage for RioCan in the Second Quarter was 2.55x. RioCan's indebtedness was 57.0% of aggregate assets (56.6% net of cash).

Mortgage Financing

During the Second Quarter, RioCan obtained approximately $111.5 million of mortgage financing at an average interest rate of approximately 5.3%. Year to date, RioCan has obtained approximately $382.3 million of mortgage financing at an average interest rate of approximately 5.0% and an average term of 5.2 years. Subsequent to the quarter end RioCan will repay $96.6 million of financings that were part of various CMBS issuances that carry an interest rate of 7.33%. RioCan has had little difficulty finding new sources of mortgage financing and has experienced interest savings as debt comes due and is refinanced at an average rate that is approximately 200 bps lower than the maturing mortgages. On an annualized basis the interest savings are expected to be in excess of $5 million.

RioCan has the continued flexibility to generate additional funds in 2010 through financing maturing loan balances as well as repay additional balloon balances to increase the size of RioCan's pool of unencumbered assets. As at June 30, 2010, RioCan had 60 properties that are unencumbered with a book value of $513 million.

RioCan's Consolidated Financial Statements, Management's Discussion and Analysis and a Supplemental Information Package for the three and six months ended June 30, 2010 are available on RioCan's website at www.riocan.com.

RioCan's Receipt of Below Market Mini-Tender Offer from TRC Capital Corporation

On July 20, 2010, RioCan issued a press release announcing that RioCan had received a copy of an unsolicited below market "mini-tender" offer made by TRC Capital Corporation ("TRC") to RioCan unitholders to purchase up to 4 million units, representing 1.64% of RioCan's outstanding units.

The offer price of $18.75 per unit represents a 4.48% discount to the $19.63 closing price of RioCan's units on the TSX on July 14, 2010, the last trading day prior to the date of the offer and a 5.64% discount to the most recent closing price of $19.87 of RioCan's units on July 28, 2010.

RioCan recommends that unitholders NOT tender their units in response to TRC's unsolicited below market mini-tender offer. TRC has made numerous below market unsolicited mini-tender offers for the units or shares of other companies. Mini-tender offers are widely-disseminated offers to purchase a small percentage of a company's outstanding units or shares, thereby avoiding many of the filing, disclosure, and procedural requirements applicable to most bids under Canadian securities laws.

For further information, please refer to RioCan's initial press release on this matter issued on July 20, 2010 and is available on our website at: https://riocan.com/_bin/pressReleases/recent.cfm.

Conference Call and Webcast

Interested parties are invited to participate in a conference call with management on Thursday, July 29, 2010 at 10:00 a.m. eastern time. You will be required to identify yourself and the organization on whose behalf you are participating.

In order to participate, please dial 416-695-6616 or 1-800-766-6630. If you cannot participate in the live mode, a replay will be available until August 27, 2010. To access the replay, please dial 416-695-5800 or 1-800-408-3053 and enter passcode 7145427#.

Scheduled speakers include Edward Sonshine, Q.C., President and Chief Executive Officer, Fred Waks, Executive Vice President and Chief Operating Officer and Rags Davloor, Senior Vice President and Chief Financial Officer. Management's presentation will be followed by a question and answer period. To ask a question, press "star 1" on a touch-tone phone. The conference call operator will be notified of all requests in the order in which they are made and will introduce each questioner.

Alternatively, to access the simultaneous webcast, go to the following link on RioCan's website https://riocan.com/_bin/presentations/webcast.cfm and click on the link for the webcast. The webcast will be archived 24 hours after the end of the conference call and can be accessed for 120 days.

About RioCan

RioCan is Canada's largest real estate investment trust with a total capitalization of approximately $8.6 billion as at June 30, 2010. It owns and manages Canada's largest portfolio of shopping centres with ownership interests in a portfolio of 265 retail properties, including 11 under development, containing an aggregate of over 60 million square feet. RioCan owns an 80% interest in eight grocery anchored shopping centres in the United States and owns a 14% equity interest in Cedar Shopping Centers, Inc., a real estate investment trust focused on supermarket-anchored shopping centres and drug store-anchored convenience centres located predominantly in the Northeastern United States. For further information, please refer to RioCan's website at www.riocan.com.

Non-GAAP Measures

As noted in RioCan's MD&A under "Use of Non-GAAP Measures" RioCan's financial statements are prepared in accordance with GAAP however certain measures, including FFO discussed in this News Release, do not have a standardized definition prescribed by GAAP and are, therefore, unlikely to be comparable to similar measures presented by other reporting issuers. RioCan uses these measures to better assess the Trust's underlying performance and provides these additional measures so that investors may do the same.

Forward-Looking Information

This news release contains forward-looking statements within the meaning of applicable securities laws. These statements include, but are not limited to, statements made in this News Release (including the sections entitled "US Investment", "Acquisition Pipeline" and "Liquidity and Capital"), and other 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. Forward-looking statements 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 statements reflect management's current beliefs and are based on information currently available to management. All forward-looking statements in this News Release are qualified by these cautionary statements.

These statements are not guarantees of future events or performance and, by their nature, are based on RioCan's estimates and assumptions, which are subject to risks and uncertainties, including those described under "Risks and Uncertainties" in the MD&A complemented by those contained in RioCan's current Annual Information Form, which could cause actual events or results to differ materially from the forward-looking statements contained in this News Release. Those risks and uncertainties include, but are not limited to, those related to: liquidity in the global marketplace associated with current economic conditions, tenant concentrations, occupancy levels, access to debt and equity capital, interest rates, joint ventures/partnerships, the relative illiquidity of real property, unexpected costs or liabilities related to acquisitions, construction, environmental matters, legal matters, reliance on key personnel, unitholder liability, and income taxes, the conditions to the transactions not being satisfied resulting in the failure to complete some or all of the proposed transactions described herein, the trading price of the securities of Cedar, lack of availability of acquisition opportunities for the joint venture and exposure to economic, real estate and capital market conditions in the United States and US currency. Material factors or assumptions that were applied in drawing a conclusion or making an estimate set out in the forward-looking information may include: a less robust retail environment than has been seen for the last several years; relatively stable interest costs; an increase in acquisition capitalization rates; a decrease in land costs for Greenfield Development; a continuing trend towards land use intensification in high growth markets; and more limited but available access to equity and debt capital markets to fund, at acceptable costs, the future growth program and to enable the Trust to refinance debts as they mature and the availability of purchase opportunities for the joint venture with Cedar. 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 these forward-looking statements. Certain statements included in this News Release may be considered "financial outlook" for purposes of applicable securities laws, and such financial outlook may not be appropriate for purposes other than this News Release.