RioCan's HIGHLIGHTS for the year ended December 31, 2016:

• For the year ended December 31, 2016, Operating income increased to $700 million from $664 million or 5.3% from the prior year. Operating income grew by 8.3% for the three months ended December 31, 2016 ("Fourth Quarter") to $181 million from $167 million for the quarter ended December 31, 2015;
• Revenue increased 4.2% for the year ended December 31, 2016 as compared to 2015;
• On a continuing operations basis, Operating Funds From Operations ("OFFO") increased $53 million, or 11.9% to $497 million for the year ended December 31, 2016, as compared to $444 million in 2015. In the Fourth Quarter on a continuing operations basis, OFFO increased $20 million, or 17.8% to $132 million as compared to $112 million in the fourth quarter of 2015;
• For the year, same property Net Operating Income ("NOI") increased 0.5% or $2.7 million in 2016 as compared to 2015. Same property NOI grew by 2.2%, or $3.3 million in the Fourth Quarter as compared to the same period in 2015;
• Committed occupancy improved 160 basis points to 95.6% at December 31, 2016 as compared to 94.0% at December 31, 2015;
• RioCan's Total Debt to Total Assets ratio was 39.7% as at December 31, 2016 as compared to 46.1%, providing financial capacity for RioCan to pursue its development and intensification program. With the proceeds from the sale of the Trust's U.S. operations, RioCan reduced its Total Debt by approximately $1.8 billion in 2016;
• As part of RioCan's ongoing capital recycling program, RioCan sold a portion of its marketable securities and recognized a gain of $14 million related to the sale in 2016; and
• Subsequent to year end, RioCan completed the offering of $300 million Series Y senior unsecured debentures that mature in October 2022 with a 2.83% coupon rate.

RioCan Real Estate Investment Trust ("RioCan") (TSX:REI.UN) today announced its financial results for the three months and year ended December 31, 2016.

"2016 was the beginning of a transformational time for RioCan. With the completion of the sale of our U.S. portfolio, we once again became a completely Canadian focused REIT. The transformation of RioCan will continue in 2017 as we complete the re-tenanting of the space formerly occupied by Target and move forward with our intensification program," said Edward Sonshine, Chief Executive Officer of RioCan. "Operationally the portfolio is performing well, we have essentially completed the backfill of the space and replacing more than the rental revenue that was lost from Target, occupancy levels are returning to more historical norms and we are establishing same property NOI growth. Interest rates remain favourable, and I am confident in our capabilities and capacity for continued growth in our Canadian operations, organically and through disciplined investment in our development pipeline."

Financial Highlights

All figures are expressed in Canadian dollars unless otherwise noted. For further information about RioCan's results for the year ended December 31, 2016, this earnings release should be read in conjunction with our audited consolidated financial statements ("Consolidated Financial Statements"), as well as Management's Discussion and Analysis for the year ended December 31, 2016.

RioCan's Consolidated Financial Statements are prepared in accordance with International Financial Reporting Standards ("IFRS"). Consistent with RioCan's management framework, management uses certain financial measures to assess RioCan's financial performance, which are not generally accepted accounting principles (GAAP) under IFRS. For full definitions of these measures, please refer to the "Use of Non-GAAP Measures" in RioCan's December 31, 2016 Management's Discussion and Analysis. As a result of the sale of the U.S. operations, we have reported our former U.S. geographic segment performance as "discontinued operations" with comparative income statement amounts adjusted to reflect this change, unless otherwise noted.

Net income from continuing operations attributable to unitholders

Continuing Operations

2016

Net income from continuing operations attributable to unitholders for the year ended December 31, 2016 is $683 million compared to $417 million during the same period in 2015, representing an increase of $266 million or 64%. Excluding fair value adjustments in both periods and the effects of the Target settlement in 2015, net income from continuing operations attributable to unitholders for the year ended December 31, 2016 would be $500 million compared to $420 million in 2015, representing an increase of $80 million or 19%.

This increase of $80 million is largely the effect of $42 million of income primarily due to property acquisitions (net of dispositions), higher same property performance and completed developments, net of $7.0 million lower lease cancellation fees, $14 million in gains related to the sale of marketable securities, $9.9 million in lower debt redemption costs, $8.7 million in gross investment property transaction gains, $7.2 million in interest savings, and $5.1 million in higher deferred tax recoveries. These gains were partly offset by $3.5 million in lower property and management fees mainly related to lost management fees due to the purchase of our partners' interests in several properties, $2.5 million in lower income associated with our residential inventory sales, and $2.4 million in higher leasing and general and administrative expenses.

Q4 2016

Net income from continuing operations attributable to unitholders for the fourth quarter of 2016 is $178 million compared to $200 million during the same period in 2015, representing a decrease of $21 million. Excluding fair value adjustments in both periods and the effects of the Target settlement in 2015, net income from continuing operations attributable to unitholders for the fourth quarter of 2016 would be $134 million compared to $110 million in 2015, representing an increase of $24 million or 22%.

This increase of $24 million in the quarter is largely explained by $18 million of income primarily due to contributions from property acquisitions (net of dispositions), increased same property performance, net of lower lease cancellation fees, $4.4 million in lower interest expenses, $3.7 million in gains related to the sale of marketable securities, $4.4 million in higher deferred tax recoveries, and $2.6 million in lower transaction costs relating to decreased property acquisition and disposition activity. These gains were partially offset by $4.6 million in lower other income primarily due to a fourth quarter 2015 net transaction gain related to the transfer of certain assets and liabilities to form the RioCan-HBC joint venture, $2.5 million in lower income associated with our residential inventory sales due to cost adjustments, and $2.7 million in lower property and asset management fees, and lower dividend income.

Discontinued Operations

As a result of the sale of our U.S. Operations, net income excluding fair value adjustments, net of taxes for the year ended December 31, 2016 decreased by $76 million. The net loss from discontinued operations attributable to unitholders is $14 million this quarter compared to $378 million in 2015 due to the sale of our U.S. property portfolio.

Funds From Operations ("FFO") & OFFO

(i) A non-GAAP measurement. A reconciliation to net earnings can be found under "Results of Operations" in RioCan's Management's Discussion and Analysis for the period ending December 31, 2016.

2016

OFFO for 2016 is $545 million compared to $557 million in 2015, representing a decrease of $11 million or approximately 2.0%. On a per unit basis, OFFO is $1.68 compared to $1.74, representing a decrease of approximately 3.8%. The decline in OFFO in the current quarter and for the full year is primarily related to the sale of our U.S. portfolio. FFO for the full year is $548 million compared to $622 million in 2015, representing a decrease of $74 million. The key differences between FFO and OFFO are the inclusion of certain transaction gains and the Target settlement in FFO. In 2016, FFO includes gains on the sale of marketable securities of $14 million, which is not included in OFFO, and in 2015 FFO included $88 million of aggregate net cash proceeds relating to the Target settlement.

OFFO for 2016 from continuing operations increased $53 million, primarily due to higher NOI of $48 million (at RioCan's proportionate share) mainly as a result of net acquisition activity, $4.9 million in lower Series A preferred unit dividends and $5.8 million in lower interest costs, partly offset by lower property and asset management fees of $3.5 million and higher general and administrative expenses of $1.2 million.

Q4 2016

OFFO for the fourth quarter of 2016 is $132 million compared to $142 million during the same period in 2015, representing a decrease of $11 million or approximately 7.3%. Excluding $30 million of OFFO from discontinued operations from this decrease, OFFO from continuing operations for the fourth quarter of 2016 is $132 million compared to $112 million in 2015, representing an increase of $20 million or 18%. On a per unit basis, OFFO is $0.40 compared to $0.44, representing a decrease of approximately 8.6% due primarily to the sale of our US portfolio. FFO for the Fourth Quarter is $132 million compared to $221 million in same period of 2015, representing a decrease of $89 million. In the Fourth Quarter, FFO includes gains in marketable securities of $3.7 million, which is not included in OFFO, and in the fourth quarter of 2015 FFO included $88 million of aggregate net cash proceeds relating to the Target settlement.

OFFO from continuing operations increased $20 million in the Fourth Quarter, primarily due to higher NOI of $18 million (at RioCan's proportionate share) as a result of acquisition activity, net of dispositions, and higher same property performance, $1.6 million in lower Series A preferred unit dividends and $4.4 million in lower interest costs, partly offset by lower property and asset management fees of $1.4 million and less investment income from marketable securities of $1.3 million.

Operational Performance

Same Store and Same Property NOI Growth

Refers to same store and same property NOI growth on a year over year basis.

Same store NOI in 2016 increased 0.6% or $3.2 million as compared to 2015 as explained by the following aggregate changes:

• $25.4 million of higher NOI comprising $14.8 million from new leasing (including re-leased space due to bankruptcies and lease cancellations), $6.4 million increased rent from renewals and rent steps, $3.5 million in percentage rent and a decrease of $0.7 million in Target co-tenancy losses; partially offset by
• $22.2 million of lower NOI resulting from vacancies (including the impact of previously agreed upon lease cancellations).

Same property NOI increased 0.5% or $2.7 million in 2016 primarily due to the reasons cited above as well as the 18 disclaimed Target properties that have been in development since July 1, 2015, partially offset by the completion of other development properties.

Same store NOI increased 1.8% or $2.5 million in the Fourth Quarter compared to the same period in 2015 as explained by the following aggregate changes:

• $8.1 million of higher NOI comprising $4.2 million from new leasing (including re-leased space due to bankruptcies and lease cancellations), $1.4 million increased rent from renewals and rent steps, $1.3 million increase in percentage rent and a decrease of $1.2 million in Target Co-Tenancy losses; partially offset by
• $5.6 million of lower NOI due to increased vacancies (including the impact of previously agreed upon lease cancellations)

The impact of Target co-tenancy losses on same store NOI was favourable this quarter due to the reduction in the number of tenants that are entitled to rent abatement provisions as compared to prior periods.

Same property NOI increased 2.2% or $3.3 million this quarter primarily driven by the reasons cited above, as well as the completion of other development properties, including a portion of Target backfill on three locations.

The key performance indicators related to operating and leasing for the Canadian portfolio over the last eight quarters is as follows:

Other Operating Statistics

• Since Target's departure, RioCan has essentially completed the backfill leasing on the vacated space with 47 leases that are either committed leases, conditional lease agreements, or in advanced negotiations on leases that collectively represent approximately $14.2 million versus $11.6 million of total base rental revenue lost through Target's departure (at RioCan's proportionate share) not including the enhanced common area maintenance and realty tax recoveries; and
• Consistent with RioCan's stated strategy, its portfolio is concentrated in Canada's six major markets (consisting of Toronto, Ottawa, Calgary, Edmonton, Montreal and Vancouver). Assets in these markets contribute approximately 75.5% of RioCan's annualized rental revenue as at December 31, 2016 (74.8% at December 31, 2015). The increase was driven by RioCan's acquisition of Kimco's and CPPIB's share of assets located primarily in these six major markets.

Portfolio Activity

Acquisitions

During the year ended December 31, 2016, RioCan purchased interests in 17 income properties aggregating $595 million at a weighted average capitalization rate of 5.7%, comprised of approximately 1.8 million square feet. In connection with these acquisitions, RioCan assumed mortgage financing of $48 million at a weighted average interest rate of 3.8%. During the Fourth Quarter, RioCan did not complete any income property acquisitions.

Dispositions

During the year ended December 31, 2016, we sold interests in nine income properties aggregating $126 million representing a weighted average capitalization rate of 6.1%, comprised of approximately 711,000 square feet. Our mortgage obligations related to these properties was $29 million. During the Fourth Quarter, RioCan did not complete any income property dispositions.

Development Activities

As at December 31, 2016, RioCan had ownership interests in 15 development projects that represents approximately 6.4 million square feet upon completion (3.8 million square feet at RioCan's interest). In addition to its development projects, RioCan continued its urban intensification activities, primarily in the Toronto and Ottawa, Ontario and Calgary, Alberta markets. In 2016, RioCan transferred properties under development with a carrying value of $274 million to income producing properties pertaining to 733,000 square feet of completed greenfield development or expansion and redevelopment projects.

Some of the larger projects that were transferred from properties under development included:

• RioCan Scarborough Centre II, Toronto, ON, 116,000 square feet leased to Costco;
• RioCan Colossus Centre, Vaughan, ON, 114,000 square feet leased to Bed, Bath & Beyond, Buy Buy Baby, Staples, Chop;
• 1860 Bayview Avenue, Toronto, ON, 76,000 square feet leased to Whole Foods, Shoppers Drug Mart, TD Bank;
• Lawrence Square, Toronto, ON, 62,000 square feet leased to HomeSense, Marshalls, PetSmart;
• East Hills, Calgary, AB, 57,000 square feet, leased to Sport Chek, Bed, Bath & Beyond, Dollarama, Michaels, Marshalls;
• Sage Hill, Calgary, AB 51,000 square feet leased to McDonald's, Liquor Max, Bulk Barn, London Drugs, Bank of Nova Scotia.

Urban Intensification Activities

In total, RioCan has currently identified nearly 50 properties that it considers to be strong possible intensification opportunities, all of which are in the six major markets and are typically located in the vicinity of substantive transit infrastructure. These locations will provide a pipeline of development opportunities for RioCan as it redevelops and intensifies these properties to enhance future cash flow growth and diversify the Trust's sources of rental revenue. Our development plans will be implemented in a prudent manner so as to manage the balance sheet and the cash flows of the Trust in order to maintain our growth targets for the business. Furthermore, as Canada's major markets continue to grow and improve transit infrastructure we believe that additional opportunities will present themselves.

Since the introduction of this intensification strategy, RioCan has obtained approvals for 12 projects and has begun construction at four of the sites with plans to begin construction on another two sites in 2017. There are 11 properties where RioCan has submitted an application for redevelopment with an additional 25 properties that RioCan has identified as ones with potential for intensification. Of these applications, RioCan anticipates that it will receive approvals at six of these sites in 2017.

Liquidity and Capital

RioCan's debt and leverage metrics are disclosed below to help facilitate an understanding of RioCan's leverage and its ability to service such leverage. The definitions that management uses, as well as the calculation methodology for the ratios included in the table below are described in RioCan's Management's Discussion and Analysis for the year ended December 31, 2016.

Coverage metrics include results from both continuing and discontinued operations except for (i) which is calculated on a continuing operations basis.

Interest and debt service coverage ratios calculated for the year ended December 31, 2016 have improved compared to December 31, 2015 mainly due to lower interest and debt service costs, partially offset by lower adjusted EBITDA as a result of the sale of the U.S. portfolio.

Debt to adjusted EBITDA has decreased to 8.10x for the year ended December 31, 2016 mainly as a result of lower average debt outstanding, which more than offset a decline in adjusted EBITDA during the year in connection with the U.S. portfolio sale. This ratio is expected to show continued improvement over the next 12 to 18 months as gains on the sale of marketable securities, the annualized impact of acquisitions and same property growth more than offset the loss of EBITDA from the U.S. property portfolio sale.

The unencumbered assets to unsecured debt ratio increased from 166% as of December 31, 2015 to 240% as of December 31, 2016, above our target ratio of 200%. The percentage NOI expected to be generated from unencumbered assets has also improved from 25.1% as of December 31, 2015 to 49.5% as of December 31, 2016. The improvements are a result of the following:

• the sale of our U.S. portfolio and repayment of related mortgages,
• the utilization of U.S. net sales proceeds to pay down secured Canadian mortgages, and
• the conversion from a secured credit facility to unsecured credit facility during June 2016, which enabled RioCan to unencumber multiple investment properties that were previously designated as collateral for the former secured credit facilities.

Selected Financial Information

The following includes financial information prepared by management in accordance with IFRS and based on the Trust's 2016 Audited Consolidated Financial Statements. This financial information does not contain all disclosures required by IFRS, and accordingly should be read in conjunction with the Trust's Audited Consolidated Financial Statements and Management's Discussion and Analysis for the period ended December 31, 2016, which is available on RioCan's website and on SEDAR.

Conference Call and Webcast

Interested parties are invited to participate in a conference call with management on Thursday, February 16, 2017 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 416-340-2216 or 1-866-223-7781. If you cannot participate in the live mode, a replay will be available until March 16, 2017. To access the replay, please dial 905-694-9451 or 1-800-408-3053 and enter passcode 3238528#.

Scheduled speakers include Edward Sonshine, O.Ont. Q.C., Chief Executive Officer, Rags Davloor, President and Chief Operating Officer and Cynthia Devine, Executive Vice President, Chief Financial Officer and Corporate Secretary. 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 http://investor.riocan.com/investor-relations/events-and-presentations/events/ 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 enterprise value of approximately $14.6 billion as at December 31, 2016. RioCan owns and manages Canada's largest portfolio of shopping centres with ownership interests in a portfolio of 300 Canadian retail and mixed use properties, including 15 properties under development, containing an aggregate net leasable area of 47 million square feet. For further information, please refer to RioCan's website at www.riocan.com.

Non-GAAP Measures

RioCan's consolidated financial statements are prepared in accordance with IFRS. Consistent with RioCan's management framework, management uses certain financial measures to assess RioCan's financial performance, which are not generally accepted accounting principles (GAAP) under IFRS. The following measures, RioCan's Interest, Funds From Operations ("FFO"), Operating Funds From Operations ("OFFO"), Adjusted Funds From Operations ("AFFO"), and Adjusted Earnings before interest, taxes, depreciation and amortization ("Adjusted EBITDA"), Operating EBITDA, Interest Coverage Ratio, Debt Service Coverage Ratio, Debt to Operating EBITDA, Operating Income ("NOI"), Same Store NOI, Same Property NOI, Total Enterprise Value, and RioCan's Proportionate Share as well as other measures discussed elsewhere in this 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 earnings or comparable metrics determined in accordance with IFRS as indicators of RioCan's performance, liquidity, cash flow, and profitability. For a full definition of these measures, please refer to the "Use of Non-GAAP Measures" in RioCan's Management Discussion and Analysis for the period ending December 31, 2016.

Forward-Looking Information

This news release contains forward-looking information within the meaning of applicable Canadian securities laws. This information includes, but is not limited to, statements made in "Financial Highlights", "Corporate Developments", "Portfolio Activity", "Operational Highlights", "Development Activities", 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 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 under "Risks and Uncertainties" in RioCan's Management's Discussion and Analysis for the period ended December 31, 2016 ("MD&A"), which could cause actual events or results to differ materially from the forward-looking information contained in this News Release. Those risks and uncertainties include, but are not limited to, those related to: liquidity and general market conditions; tenant concentrations and related risk of bankruptcy or restructuring (and the terms of any bankruptcy or restructuring proceeding), occupancy levels and defaults, including the failure to fulfill contractual obligations by the tenant or a related party thereof; lease renewals and rental increases; the ability to re-lease and find new tenants for vacant space; retailer competition; access to debt and equity capital; interest rate and financing risk; joint ventures and partnerships; the relative illiquidity of real property; unexpected costs or liabilities related to acquisitions and dispositions; development risk associated with construction commitments, project costs and related approvals; environmental matters; litigation; reliance on key personnel; unitholder liability; income, sales and land transfer taxes; and credit ratings.

RioCan currently qualifies as a real estate investment trust for Canadian tax purposes and intends to qualify for future years. The Income Tax Act (Canada) contains provisions which potentially impose tax on publicly traded trusts that qualify as specified investment flow-through entities (the SIFT Provisions). However, the SIFT Provisions do not impose tax on a publicly traded trust which qualifies as a REIT. Should RioCan no longer qualify as a Canadian REIT under the SIFT Provisions, certain statements contained in this News Release may need to be modified. RioCan is still subject to Canadian tax in its incorporated Canadian subsidiaries.

Our U.S. subsidiary qualified as a REIT for U.S. income tax purposes up to May 25, 2016, subsequent to the closing date of the sale of our U.S. property portfolio. For U.S. income tax purposes, the subsidiary distributed all of its U.S. taxable income and is entitled to deduct such distributions against its taxable income. The subsidiary's qualification as a REIT depends on the REIT's satisfaction of certain asset, income, organizational, distribution, unitholder ownership and other requirements up until May 25, 2016. Our U.S. subsidiary was subject to a 30% or 35% withholding tax on distributions of its U.S. taxable income to Canada. We do not intend to distribute any withholding taxes paid or payable to our unitholders related to the disposition.

Other factors, such as general economic conditions, including interest rate fluctuations, may also have an effect on RioCan's results of operations. Material factors or assumptions that were applied in drawing a conclusion or making an estimate set out in the forward-looking information may include, but are not limited to: a stable retail environment; relatively low and stable interest costs; a continuing trend toward land use intensification, including residential development in urban markets; access to equity and debt capital markets to fund, at acceptable costs, future capital requirements and to enable our refinancing of debts as they mature; and the availability of investment opportunities for growth. For a description of additional risks that could cause actual results to materially differ from management's current expectations, see "Risks and Uncertainties" in RioCan's MD&A for the period ended December 31, 2016, and in "Risks and Uncertainties" in RioCan's most recent Annual Information Form. 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. Certain statements included in this News Release may be considered "financial outlook" for purposes of applicable Canadian securities laws, and as such the financial outlook may not be appropriate for purposes other than this News Release. The forward-looking information contained in this News Release is made as of the date of this News Release, 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.