ROOTED IN THE MAJOR MARKETS RIOCAN REAL ESTATE …s1.q4cdn.com/847730316/files/RioCan_Q3_2008_full_v6np.pdf · Real Estate Portfolio Fact Sheet R I O C A N R E A L E S T A T E I N

ROOTED IN THE MAJOR MARKETS

CANADA’S MAJOR MARKET REIT

RIOCAN REAL ESTATE INVESTMENT TRUST

THIRD QUARTER REPORT 2008

3RioCan Real Estate Investment TrustRioCan Yonge Eglinton Centre2300 Yonge Street, Suite 500 P.O. Box 2386, Toronto, Ontario M4P IE4T 416-866-3033 or 1-800-465-2733F 416-866-3020W www.riocan.com

Senior Management , Board o f Trus tees and Uni tho lder In format ion

Senior Management

Edward Sonshine, Q.C.President and Chief Executive Officer

Frederic A. WaksExecutive Vice President and Chief Operating Officer

Raghunath DavloorSenior Vice President and Chief Financial Officer

Donald MacKinnonSenior Vice President, Real Estate Finance

Jordan RobinsSenior Vice President, Planning and Development

Jeff RossSenior Vice President, Leasing

John BallantyneVice President, Asset Management

Michael ConnollyVice President, Construction

Therese CornelissenVice President and Chief Accounting Officer

Jonathan GitlinVice President, Investments

John HoVice President, Property Accounting

Danny KissoonVice President, Operations

Suzanne MarineauVice President, Human Resources

Maria RicoVice President, Financial Reporting and Risk Management

Kenneth SiegelVice President, Leasing

Board of Trustees

Paul Godfrey, C.M. 1,2,3,4

(Chairman of Board of Trustees)President and Chief Executive Officer,Toronto Blue Jays Baseball Club

Clare R. Copeland 1,2

Chair of Toronto Hydro Corporation

Raymond Gelgoot 4

Partner, Fogler, Rubinoff LLP

Frank W. King, O.C. 1,2

President, Metropolitan Investment Corporation

Dale H. Lastman 3

Co-Chair and Partner, Goodmans LLP

Ronald W. Osborne 1

Corporate Director

Sharon Sallows 3,4

Partner, Ryegate Capital Corporation

Edward Sonshine, Q.C.President and Chief Executive Officer,RioCan Real Estate Investment Trust1 member of the Audit Committee2 member of the Human Resources & Compensation Committee3 member of the Nominating & Governance Committee4 member of the Investment Committee

Unitholder Information

Head Office

RioCan Real Estate Investment TrustRioCan Yonge Eglinton Centre, 2300 Yonge Street, Suite 500P.O. Box 2386, Toronto, Ontario M4P 1E4Tel: 416-866-3033 or 1-800-465-2733Fax: 416-866-3020Website: www.riocan.comE-mail: [email protected]

Unitholder and Investor Contacts

Debra ChanDirector, Investor RelationsTel: 416-864-6483E-mail: [email protected]

Nancy MedlockInvestor Relations AdministratorTel: 416-306-2406E-mail: [email protected]

Auditors

Ernst & Young LLP

Transfer Agent and Registrar

CIBC Mellon Trust CompanyP.O. Box 7010, Adelaide Street Postal Station, Toronto, Ontario M5C 2W9Answerline: 1-800-387-0825 or 416-643-5500Fax: 416-643-5501Website: www.cibcmellon.comE-mail: [email protected]

Unit Listing

The units are listed on the Toronto Stock Exchange under the symbol REI.UN.

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RioCan’s results for the third quarter of 2008 were solid, despite the dramatic turmoil the world’s financial and real estatemarkets are experiencing. RioCan was created and structured to withstand this type of uncertainty and as I sometimes joke, “RioCan was built for safety, not for speed.” This is certainly a time when our unitholders and investors generally,desire safety.

We believe that the fundamentals of the RioCan portfolio are of a nature that will stand up well to the recession that themedia and the markets tell us is inevitable. In fact, we experienced strong leasing activity during the third quarter, and, as a result, our occupancy remained stable quarter over quarter at 97% and our retention ratio of renewals was 93.9%.

Our basic approach to the real estate business hasn’t changed over the years. We seek the best locations, tenant them with the strongest retailers in Canada, and then manage them to maximize income for ourselves and our tenants.

RioCan’s financial position is strong. We have a conservative debt profile with low leverage, as well as adequate sources of financing, which will allow us to act on any opportunities that may arise. RioCan’s leverage at September 30 was at 54.6% of historical cost, well below the 60% allowed by our Declaration of Trust. On this basis, we could incur additionalindebtedness of approximately $800 million and still not exceed the 60% leverage limit. And as we are certain that our assets are worth far more than book, even in the current uncertain market, we believe our actual leverage is under 45% of fair market value.

The diversification of our revenue sources has never been better. Our top 25 tenancies include most of the best Canadianand American retailers. We have an excellent portfolio of over 5,500 tenancies that are well diversified. Currently ourlargest tenant represents only 5.4% of our annualized rental revenue and once you move beyond our top 15 revenuesources, no one tenant represents more than 1%. We have reduced our exposure through geographical diversification, by staggering lease maturities and ensuring that a considerable portion, about 83%, of our rental revenue is earned fromnational and anchor tenants.

In Canada, there are typically no more than a handful of major players in each retail market segment and often only one or two. Although this could be viewed as a negative due to less competition with the attendant slower rent growth, thepositive, is that these dominant retailers are well financed and able to weather any economic storms.

And finally, one of our basic strategies is to establish and maintain relationships with the best possible partners. Some of our current partners include Kimco Realty Corporation, Sun Life Assurance Company of Canada and CPP Investment Board(“CPPIB”) – all stellar names. On October 23, we announced another development with CPPIB at East Hills in Calgary. Thisagreement follows a previous announcement made in June 2008 that we sold an ownership interest in two developments to CPPIB including Jacksonport located in Calgary and St. Clair Avenue and Weston Road located in Toronto. In addition tothese three developments, we enjoy an existing relationship with CPPIB at three other RioCan developed properties locatedin Calgary, Edmonton and Oakville.

RioCan has created a unique vehicle, with a solid base to access the best possible opportunities for our unitholders. The dynamics of the financial markets and global economy are constantly changing, and RioCan is in an excellent position to weather any uncertainties that may come our way.

Once again, please let me take this opportunity to thank you, our unitholders, for your continued confidence in us.


October 28, 2008

Dear Fe l low Uni tho l der :

Edward Sonshine, Q.C.President and ChiefExecutive Officer,RioCan Real Estate Investment Trust


Real Es ta te P or t f o l i o Fact S heet

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Total Net Leasable Area (“NLA”) (sq. ft.): Retail Office TotalIncome producing properties 31,180,298 1,583,391 32,763,689Properties under development 3,095,318 3,095,318

Total 34,275,616 1,583,391 35,859,007

Number of Tenancies 5,560

Occupancy:Retail occupancy 97.0%Office occupancy 98.0%

Total Occupancy 97.0%

Geographic DiversificationNumber of properties

Percentage of annualized Income producing Properties underrental revenue properties development Total

Ontario 63.6% 145 12 157Quebec 16.5% 34 34Alberta 10.1% 19 2 21British Columbia 5.8% 13 13New Brunswick 2.1% 7 7Saskatchewan 0.5% 1 1Manitoba 0.5% 1 1Prince Edward Island 0.4% 1 1Newfoundland 0.4% 2 2Nova Scotia 0.1% 1 1

100.0% 224 14 238

Anchor and National TenantsPercentage of annualized Percentage

rental revenue of total NLA

anchor and national tenants 83.6% 82.9%

Top Ten Sources of Revenue by TenantPercentage of annualized Weighted average

Ranking Tenant rental revenue remaining lease term (yrs)

1. Metro/A&P/Super C/Loeb/Food Basics 5.4% 9.42. Famous Players/Cineplex/Galaxy Cinemas 5.4% 14.43. Canadian Tire/PartSource/Mark’s Work Wearhouse 4.0% 12.24. Zellers/The Bay/Home Outfitters 3.6% 9.35. Loblaws/No Frills/Fortinos/Zehrs/Maxi 3.4% 6.66. Wal-Mart 3.3% 9.67. Winners/HomeSense 3.3% 5.88. Staples/Business Depot 2.5% 8.69. Reitmans/Penningtons/Smart Set/Addition-Elle/Thyme Maternity 2.0% 5.1

10. Harveys’s/Swiss Chalet/Kelsey’s/Montana’s/Milestone’s 1.7% 9.9Total 34.6%

Lease Expiries Lease expiries (NLA)

Retail Class Total NLA 2008 (1) 2009 2010 2011 2012

New format retail 14,839,988 118,536 754,768 999,620 1,407,679 1,086,1520.8% 5.1% 6.7% 9.5% 7.3%

Grocery anchored centre 6,878,721 106,777 830,632 912,076 987,612 1,057,4821.6% 12.1% 13.3% 14.4% 15.4%

Enclosed shopping centre 6,410,150 148,662 491,618 802,662 777,746 458,0612.3% 7.7% 12.5% 12.1% 7.1%

Non-grocery anchored centre 1,739,930 18,050 108,346 124,165 141,079 126,6071.0% 6.2% 7.1% 8.1% 7.3%

Urban retail 1,311,509 103,913 86,716 71,630 77,061 136,0687.9% 6.6% 5.5% 5.9% 10.4%

Office 1,583,391 34,189 181,494 272,808 336,227 63,010 2.2% 11.5% 17.2% 21.2% 4.0%

Total 32,763,689 530,127 2,453,574 3,182,961 3,727,404 2,927,3801.6% 7.5% 9.7% 11.4% 8.9%

Average net rent per square foot $14.32 $16.04 $15.47 $14.16 $14.32 $15.98

(1) Tenant lease expires for the three months ended December 31, 2008.

At September 30, 2008

Table of Contents3 Consolidated Balance Sheets4 Consolidated Statements of Unitholders’ Equity5 Consolidated Statements of Earnings and Comprehensive Income (Loss)6 Consolidated Statements of Cash Flows7 Notes to Consolidated Financial Statements7 Significant Accounting Policies7 Basis of Accounting7 Changes in Accounting Policies7 Future Accounting Changes7 Income Properties8 Amortization8 Properties Under Development9 Capitalization of Carrying Costs9 Mortgages and Loans Receivable10 Receivables and Other Assets10 Mortgages Payable11 Debentures Payable12 Accounts Payable and Other Liabilities12 Trust Units13 Unit Based Compensation Plans13 Incentive Unit Option Plan14 Trustees’ Restricted Equity Unit Plan14 Employee Future Benefits15 Investments in Co-ownerships15 Changes in Non-cash Operating Items and Other15 Income Taxes17 Segmented Disclosures and Additional Information17 Capital Management19 Financial Instruments19 Fair Value of Financial Instruments19 Risk Management19 Credit Risk20 Interest Rate and Liquidity Risks21 Related Party Transaction21 Contingencies and Commitments21 Guarantees21 Contractual Obligations on Real Estate Investments21 Litigation

22 Management’s Discussion and Analysis22 Overview and Highlights24 Vision and Business Strategy26 Outlook27 2008 Objectives28 Asset Profile28 Income Properties36 Capital Expenditures on Income Properties37 Co-Ownership Activities Included in Income Properties40 Equity Investments in Income Properties40 Properties Under Development42 Properties Under Development47 Properties Held for Resale48 Mortgages and Loans Receivable49 Capital Structure50 Debt50 Revolving Lines of Credit51 Debentures Payable51 Mortgages Payable52 Aggregate Debt Maturities53 Trust Units54 Other Capital Commitments and Contingencies55 Future Income Taxes56 Off Balance Sheet Liabilities and Guarantees56 Liquidity57 Distributions to Unitholders58 Difference between Cash Flows Provided by Operating Activities

and Distributions to Unitholders59 Difference between Net Earnings and Distributions

to Unitholders60 Results of Operations60 Net Operating Income63 Other Revenue63 Fees and Other Income64 Interest Income64 Other Expenses64 Interest64 General and Administrative65 Amortization66 Other Items66 Funds from Operations66 Significant Accounting Policies67 Changes in Accounting Policies67 Future Changes in Significant Accounting Policies67 Goodwill and Intangible Assets67 International Financial Reporting Standards (“IFRS”)67 Risks and Uncertainties68 Tenant Concentrations69 Interest Rate and Other Debt and Equity Related Risks70 Liquidity Risk of Real Estate Investments70 Unexpected Costs or Liabilities Related to the

Acquisition of Real Estate Investments70 Construction Risk70 Environmental Risk71 Unitholder Liability71 Income Taxes72 Selected Quarterly Consolidated Information

FINANCIALREVIEW

(unaudited – in thousands)As at As at

September December 30, 31,

2008 2007

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Consol ida ted B al ance S heet s

AssetsReal estate investments

Income properties (Note 2) $ 4,623,953 $ 4,419,473

Properties under development (Note 4) 368,090 390,160

Mortgages and loans receivable (Note 6) 179,187 210,564

5,171,230 5,020,197

Receivables and other assets (Note 7) 144,976 105,322

Cash and short term investments 19,539 124,537

$ 5,335,745 $ 5,250,056

LiabilitiesMortgages payable (Note 8) $ 2,351,144 $ 2,251,506

Debentures payable (Note 9) 874,874 983,742

Accounts payable and other liabilities (Note 10) 179,453 193,076

Future income taxes (Note 16) 150,000 144,000

3,555,471 3,572,324

Unitholders’ equityUnitholders’ equity 1,780,274 1,677,732

$ 5,335,745 $ 5,250,056

The accompanying notes are an integral part of the consolidated financial statements

Trust units (Note 11)

Balance, beginning of period $ 2,427,367 $ 2,201,241 $ 2,240,078 $ 1,976,868

Unit issue proceeds, net 17,168 17,191 203,238 241,035

Future income taxes (Note 16) – – 700 –

Value associated with unit option grants exercised – – 519 529

Balance, end of period 2,444,535 2,218,432 2,444,535 2,218,432

Value associated with unit option grants

Balance, beginning of period 8,050 5,278 6,882 4,185

Value associated with compensation expense for unit options granted 710 680 2,397 2,302

Value associated with unit option grants exercised – – (519) (529)

Balance, end of period 8,760 5,958 8,760 5,958

Cumulative earningsBalance, beginning of period 1,411,211 1,234,936 1,336,001 1,301,522

Transition adjustment – financial instruments – – – 2,121

Net earnings (loss) 41,603 35,917 116,813 (32,790)

Balance, end of period 1,452,814 1,270,853 1,452,814 1,270,853

Cumulative distributions to unitholders

Balance, beginning of period (2,050,800) (1,765,017) (1,905,229) (1,628,541)

Distributions to unitholders (75,035) (69,168) (220,606) (205,644)

Balance, end of period (2,125,835) (1,834,185) (2,125,835) (1,834,185)

Total unitholders’ equity $ 1,780,274 $ 1,661,058 $ 1,780,274 $ 1,661,058

Units issued and outstanding (Note 11) 220,996 209,859 220,996 209,859


For the three months ended September 30, For the nine months ended September 30,2008 2007 2008 2007

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Consol ida ted S t a t ement s o f U ni t ho l der s ’ Equi ty

(unaudited – in thousands)

RevenueRentals $ 173,090 $ 160,559 $ 516,075 $ 483,824

Fees and other 6,981 3,784 14,316 10,456

Interest 3,994 3,761 12,468 11,122

Gains on properties held for resale (Note 4) 1,472 4,389 20,430 21,088

Total revenue 185,537 172,493 563,289 526,490

ExpensesProperty operating costs 56,660 53,010 181,048 164,784

Interest (Note 5) 41,312 38,102 124,619 116,025

General and administrative 6,257 5,352 22,249 18,561

Amortization (Note 3) 38,705 33,112 111,860 102,910

Total expenses 142,934 129,576 439,776 402,280

Earnings before income taxes 42,603 42,917 123,513 124,210

Future income tax expense (Note 16) 1,000 7,000 6,700 157,000

Net earnings and comprehensive income (loss) $ 41,603 $ 35,917 $ 116,813 $ (32,790)

Net earnings (loss) per unit – basic and diluted $ 0.19 $ 0.17 $ 0.54 $ (0.16)

Weighted average number of units outstanding – basic 220,626 209,531 216,862 207,735


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Consol ida ted S t a t ement s o f Ear n i ngs and Com prehensive Incom e (Loss )

(unaudited – in thousands, except per unit amounts)


(unaudited – in thousands, except per unit amounts)

For the three months For the nine monthsended September 30, ended September 30,

2008 2007 2008 2007

Consol ida ted S t a t ement s o f C ash F l ow s

Cash Flows Provided By (Used In):Operating activitiesNet earnings (loss) $ 41,603 $ 35,917 $ 116,813 $ (32,790)

Items not affecting cashAmortization 39,045 33,431 113,676 103,824 Recognition of rents on a straight-line basis (1,692) (2,977) (5,130) (6,151)Amortization of the differential between

contractual and market rents on in-place leases (896) (1,240) (2,608) (1,977)

Future income tax expense 1,000 7,000 6,700 157,000 Properties held for resale 6,705 11,055 88,523 15,698 Acquisition and development of properties

held for resale (4,028) (15,350) (45,972) (48,603)Changes in non-cash operating items and

other (Note 15) (9,535) (15,390) (39,022) (36,127)

Cash flows provided by operating activities 72,202 52,446 232,980 150,874

Investing activitiesAcquisition of income properties and

properties under development (56,750) (12,104) (122,025) (202,852)Capital expenditures on income properties (2,855) (4,046) (5,399) (9,153)Capital expenditures on properties

under development (40,511) (24,094) (122,003) (84,368)Tenant installation costs (3,543) (6,833) (12,160) (16,645)Mortgages and loans receivable

Advances (37,452) (21,355) (109,074) (46,881)Repayments 65,087 3,117 124,923 4,760

Proceeds on sale of investments – 3,104 – 6,881

Cash flows used in investing activities (76,024) (62,211) (245,738) (348,258)

Financing activitiesMortgages payable

Borrowings 134,821 147,811 338,214 349,992 Repayments (111,380) (47,141) (304,774) (200,666)Repayments made against line of credit – (27,121) – –

Issue (repayment) of debentures payable – 119,005 (110,000) 119,005 Distributions paid (74,384) (69,084) (218,918) (204,612)Units issued under distribution

reinvestment plan 17,237 17,191 53,970 51,065 Issue of units (70) – 149,268 168,969

Cash flows provided by (used in) financing activities (33,776) 140,661 (92,240) 283,753

Increase (decrease) in cash and equivalents (37,598) 130,896 (104,998) 86,369 Cash and equivalents, beginning of period 57,137 2,576 124,537 47,103

Cash and equivalents, end of period $ 19,539 $ 133,472 $ 19,539 $ 133,472

Supplemental cash flow informationAcquisition of real estate investments through

assumption of liabilities $ – $ 11,720 $ 80,577 $ 76,748 Acquisition of real estate investments

through issuance of exchangeable limited partnership units – – – 21,000

Mortgages and loans taken back on property dispositions – (6,525) (306) (18,036)

Interest paid 54,432 51,290 149,001 137,280 Cash equivalents, end of period – 115,706 – 115,706 Distributions to unitholders per unit 0.340 0.330 1.015 0.990

The accompanying notes are an integral part of the consolidated financial statementsRIO

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Notes to Consol i da t ed F i nanci a l S t a t ements

1. Significant Accounting Policies

(a) Basis of accounting

RioCan Real Estate Investment Trust’s (the “Trust” or “RioCan”) unaudited interim consolidated financial statementshave been prepared in accordance with Canadian generally accepted accounting principles (“GAAP”) and areconsistent with the significant accounting policies reported in the Trust’s audited consolidated financial statementsfor the two years ended December 31, 2007 and 2006, except as described in Note 1 (b) below. Under GAAP,additional disclosures are required in annual financial statements; therefore, these unaudited interim consolidatedfinancial statements should be read in conjunction with the Trust’s audited consolidated financial statements for thetwo years ended December 31, 2007 and 2006.

Certain comparative figures have been reclassified to conform to the current period’s financial statement presentation.

(b) Changes in accounting policies

The Canadian Institute of Chartered Accountants (“CICA”) issued three new accounting standards that are effectivefor the Trust’s fiscal year commencing January 1, 2008: Section 1535, Capital Disclosures; Section 3862, FinancialInstruments – Disclosures; and Section 3863, Financial Instruments – Presentation.

Section 1535 includes required disclosures of an entity’s objectives, policies and processes for managing capital,and quantitative data about what the entity regards as capital (Note 18).

Sections 3862 and 3863 replace the existing Section 3861, Financial Instruments – Disclosure and Presentation.These new sections revise and enhance disclosure requirements, and carry forward unchanged existing presentationrequirements. These new sections require disclosures about the nature and extent of risks arising from financialinstruments and how the entity manages those risks (Note 19).

The new standards have no impact on the classification and valuation of the Trust’s financial instruments.

(c) Future accounting changes

The CICA has issued a new accounting standard, Section 3064, Goodwill and Intangible Assets, which clarifies thatcosts can be capitalized only when they relate to an item that meets the definition of an asset. The Trust is in theprocess of evaluating the impact of this standard on its consolidated financial statements. Section 1000, FinancialStatement Concepts, was also amended to provide consistency with this new standard. The new and amendedstandards will be effective for the Trust’s 2009 fiscal year, and will be adopted on a retroactive basis withrestatement of the prior years.

2. Income PropertiesNet

Accumulated carryingSeptember 30, 2008 Cost amortization amount

Land $ 1,080,999 $ – $ 1,080,999

Buildings 3,669,326 (457,826) 3,211,500

Leasing costs 274,235 (74,866) 199,369

Intangible assets 166,721 (42,918) 123,803

Equity investments in properties (Note 4) 8,282 – 8,282

$ 5,199,563 $ (575,610) $ 4,623,953

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(unaudited – tabular amounts in thousands, except per unit amounts and other data)

As at September 30, 2008

NetAccumulated carrying

December 31, 2007 Cost amortization amount

Land $ 1,024,285 $ – $ 1,024,285

Buildings 3,473,522 (387,852) 3,085,670

Leasing costs 241,123 (60,862) 180,261

Intangible assets 155,695 (34,782) 120,913

Equity investments in properties (Note 4) 8,344 – 8,344

$ 4,902,969 $ (483,496) $ 4,419,473

3. Amortization


Buildings $ 25,413 $ 23,126 $ 73,583 $ 68,801

Leasing costs 8,538 7,303 24,905 20,590

Intangible assets 4,754 2,683 13,372 13,519

$ 38,705 $ 33,112 $ 111,860 $ 102,910

4. Properties Under DevelopmentSeptember 30, 2008 December 31, 2007

Properties under development $ 307,948 $ 316,055

Properties held for resale 60,142 74,105

$ 368,090 $ 390,160

Gains on properties held for resale during the periods are comprised of the following:


Proceeds $ 6,799 $ 11,689 $ 86,347 $ 39,150

Gains on properties held for resale 1,472 4,389 20,430 21,088

Share of gains earned from equityaccounted for investments included in gains on properties held for resale 1,540 1,127 1,540 2,962

Notes to Consol i da t ed F i nanci a l S t a t ementsRI

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5. Capitalization of Carrying Costs


Interest Interest expense $ 46,776 $ 43,644 $ 139,063 $ 130,342

Capitalized to real estate investments (5,464) (5,542) (14,444) (14,317)

Net interest expense $ 41,312 $ 38,102 $ 124,619 $ 116,025

6. Mortgages and Loans Receivable

At September 30, 2008 mortgages and loans receivable bear interest at effective rates ranging between 4.09% and 8% (contractual rates between 0% and 8%) per annum with a weighted average quarter end rate of 6.77%(contractual rate of 6.35%) per annum, and mature between 2008 and 2015. Future repayments are as follows:

For the year ending December 31: 2008 (i) $ 57,181

2009 35,376

2010 35,837

2011 13,783

2012 19,310

Thereafter 18,162

Contractual mortgages and loans receivable 179,649

Unamortized differential between contractual and market interest rates on mortgages and loans receivable (462)

$ 179,187

(i) The 2008 principal maturities include $45,613,000 of mortgages and loans receivable that are due on demand.

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7. Receivables and Other AssetsSeptember 30, 2008 December 31, 2007

Straight-line rental revenue in excess of base rents currently due in accordance with lease agreements $ 39,089 $ 34,225

Prepaid property taxes 27,279 1,731

Maintenance capital expenditures recoverable from tenants 25,014 23,491

Contractual rents receivable 13,194 6,657

Other 12,915 6,618

Fees receivable 12,482 14,369

Prepaid property operating expenses 8,030 10,571

Capital assets, net of accumulated amortization 4,588 4,189

Unamortized differential between contractual and above-marketrents for in-place leases at acquisition of income properties 2,385 2,134

Deposits on property acquisitions – 1,337

$ 144,976 $ 105,322

8. Mortgages Payable

At September 30, 2008 mortgages payable bear interest at effective rates ranging between 4.36% and 8.73%(contractual rates between 0% and 11.88%) per annum with a weighted average quarter end rate of 6.18%(contractual rate of 6.19%) per annum, and mature between 2008 and 2034. Future repayments are as follows:

Scheduledprincipal Principal Total

amortization maturities repayments

For the year ending December 31: 2008 $ 16,552 $ 20,054 $ 36,606

2009 61,600 235,372 296,972

2010 54,214 247,548 301,762

2011 49,915 69,061 118,976

2012 48,451 201,866 250,317

Thereafter 183,824 1,157,941 1,341,765

Contractual obligations $ 414,556 $ 1,931,842 2,346,398

Unamortized differential between contractual and market interest rates on liabilities assumed at the acquisition of properties 10,813

Unamortized debt financing costs (6,067)

$ 2,351,144

At September 30, 2008 the Trust has secured revolving lines of credit totalling $313,500,000 (December 31, 2007 –$203,500,000) with Canadian financial institutions against which $58,589,000 (December 31, 2007 – $57,251,000) ofletters of credit were drawn.

These facilities bear interest at the bank’s prime rate or, at the Trust’s option, the banker’s acceptances rate plus0.95%. $110,000,000 of this facility matures on December 31, 2008. The remaining amount of this facility is due upon six months notice by the lender if not in default.


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9. Debentures Payable

The Trust has the following series of debentures outstanding:

(i) $110,000,000 Series D senior unsecured, maturity on September 21, 2009, bearing contractual interest at 5.29% perannum, and payable semi-annually.

(ii) $200,000,000 Series F senior unsecured, maturity on March 8, 2011, bearing contractual interest at 4.91% perannum, and payable semi-annually.

(iii) $150,000,000 Series G senior unsecured, maturity on March 11, 2013, bearing contractual interest at 5.23% perannum, and payable semi-annually.

(iv) $100,000,000 Series H senior unsecured, maturity on June 15, 2012, bearing contractual interest at 4.70% perannum, and payable semi-annually.

(v) $100,000,000 Series I senior unsecured, maturity on February 6, 2026, bearing contractual interest at 5.953% perannum, and payable semi-annually.

(vi) $100,000,000 Series J senior unsecured, maturity on March 24, 2010, bearing contractual interest at 4.938% perannum, and payable semi-annually.

(vii) $120,000,000 Series K senior unsecured, maturity on September 11, 2012, bearing contractual interest at 5.70% perannum, and payable semi-annually.

On January 4, 2008 the Trust repaid the $110,000,000 Series E debentures at their maturity.

At September 30, 2008 debentures payable bear interest at a weighted average quarter end effective rate of 5.49%(contractual rate of 5.22%) per annum. Future repayments are as follows:

For the year ending December 31: 2009 $ 110,000

2010 100,000

2011 200,000

2012 220,000

Thereafter 250,000

Contractual obligations 880,000

Unamortized debt financing costs (5,126)

$ 874,874

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10. Accounts Payable and Other Liabilities September 30, 2008 December 31, 2007

Development costs and other capital expenditures $ 52,894 $ 62,197

Distributions to unitholders 25,319 23,631

Unamortized differential between contractual and below-marketrents for in-place leases at acquisition of income properties 24,701 23,766

Property operating costs 23,371 24,761

Interest on mortgages and debentures payable 17,109 27,078

Property taxes 16,811 5,367

Deferred income 5,864 5,075

Tenant installation costs 5,035 8,461

Other 4,344 9,467

Employee pension benefits (Note 13) 3,222 2,694

Trustees’ restricted equity unit plan (Note 12) 783 579

$ 179,453 $ 193,076

11. Trust Units

For the three months ended September 30 2008 2007

Units $ Units $

Units outstanding, beginning of period 220,106 $ 2,427,367 209,101 $ 2,201,241

Units issued:

Distribution reinvestment and direct purchase plans 887 17,410 758 17,241

Unit option plan 3 40 – –

Unit issue costs – (282) – (50)

Units outstanding, end of period 220,996 $ 2,444,535 209,859 $ 2,218,432

For the nine months ended September 30 2008 2007

Units $ Units $

Units outstanding, beginning of period 210,883 $ 2,240,078 199,647 $ 1,976,868

Units issued:

Public offering 7,130 150,087 6,600 166,650

Exchangeable limited partnership units (i) – – 829 21,000

Distribution reinvestment and direct purchase plans 2,688 54,172 2,136 51,248

Unit option plan 295 5,527 647 9,381

Value associated with unit option grants exercised – 519 – 529

Unit issue costs – (6,548) – (7,244)

Future income taxes (Note 16) – 700 – –

Units outstanding, end of period 220,996 $ 2,444,535 209,859 $ 2,218,432


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(i) RioCan acquired an income property for consideration including the issuance to the vendors of exchangeablelimited partnership units (“LP units”). RioCan is the general partner of the limited partnership. The LP units areentitled to distributions equivalent to distributions on RioCan units, must be exchanged for RioCan units on aone-for-one basis, and are exchangeable at any time at the option of the holder. No LP units have beenexchanged by the vendors for RioCan units.

12. Unit Based Compensation Plans

(i) Incentive unit option plan

The Trust’s incentive unit option plan (the “plan”) provides for option grants to a maximum of 19,200,000 units.At September 30, 2008: 10,167,000 unit options were granted and exercised; 5,847,000 unit options were grantedand remain outstanding; and 3,186,000 unit options remain available for issuance. Each option has an exerciseprice equal to the closing price of the Trust’s units at the date prior to the day the option is granted, and anoption’s maximum term is 10 years. All options granted through December 31, 2003 vest at 20% per annum from the grant date, becoming fully vested after four years. All options granted after December 31, 2003 vest at 25% per annum commencing on the first anniversary of the grant, becoming fully vested after four years.

A summary of unit options granted under the plan at September 30, 2008 and 2007 is as follows:

For the three months ended September 30 2008 2007

Weighted average Weighted averageOptions Units exercise price Units exercise price

Outstanding, beginning of period 5,850 $ 20.65 5,054 $ 20.40

Exercised (3) 10.45 – –

Outstanding, end of period 5,847 $ 20.66 5,054 $ 20.40

Options exercisable at end of period 2,544 $ 18.52 1,782 $ 16.87

For the nine months ended September 30 2008 2007

Weighted average Weighted averageOptions Units exercise price Units exercise price

Outstanding, beginning of period 4,867 $ 20.62 4,342 $ 17.80

Granted 1,575 21.17 1,360 25.88

Exercised (295) 18.68 (648) 14.47

Forfeited (300) 24.62 – –

Outstanding, end of period 5,847 $ 20.66 5,054 $ 20.40

Options exercisable at end of period 2,544 $ 18.52 1,782 $ 16.87

Weighted average fair value per unitof options granted during the period $ 1.75 $ 2.69

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The Trust accounts for its unit based compensation plan using the fair value method, under which compensationexpense is measured at the grant date and recognized over the vesting period. Unit based compensationexpense and assumptions utilized in the calculation thereof using the Black-Scholes Model for option valuationare as follows:


Unit based compensation expense $ 710 $ 680 $ 2,397 $ 2,302

Unit options granted – – 1,575 1,360

Unit option holding period (years) – – 7 7

Volatility rate – – 18.7% 16.6%

Distribution yield – – 6.4% 5.0%

Risk free interest rate – – 3.6% 4.0%

(ii) Trustees’ restricted equity unit plan

The restricted equity unit plan provides for an allotment of restricted equity units (“REUs”) to each non-employeetrustee (“member”). The value of REUs allotted appreciate or depreciate with increases or decreases in themarket price of the Trust’s units. Members are also entitled to be credited with REUs for distributions paid inrespect of units of the Trust based on an Average Market Price of the units pursuant to the plan. REUs vest andare settled three years from the date of issue by a cash payment equal to the number of vested REUs credited tothe member based on an Average Market Price of the Trust’s units at the settlement date. At September 30, 2008accounts payable and other liabilities included accrued compensation costs relating to the REUs of $783,000(December 31, 2007 – $579,000).

13. Employee Future Benefits

The Trust maintains several pension plans for its employees.

(i) A defined contribution pension plan incurred current service costs in the amount of $394,000 for the nine monthsended September 30, 2008 (three months ended September 30, 2008 – $135,000) and $313,000 for the nine monthsended September 30, 2007 (three months ended September 30, 2007 – $113,000).

(ii) The defined benefit pension plans’ benefits are based on a specified length of service, up to a stated maximum.A summary of the defined benefit pension plans is as follows:

Defined benefit pension plans’ information

September 30, 2008 December 31, 2007

Fair value of plan assets $ 630 $ 883

Accrued employee pension benefits 3,222 2,694

Statements of Earnings (Loss)


Defined Benefit Pension expense $ 211 $ 224 $ 609 $ 699


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14. Investments in Co-ownerships

Summary financial information relating to the Trust’s share of proportionately consolidated co-ownerships is as follows:

Balance Sheets


Assets $ 1,445,358 $ 1,244,276

Liabilities 903,180 747,631

Contingencies and commitments (Note 21)

Statements of Earnings (Loss)


Revenue $ 46,526 $ 37,885 $ 150,926 $ 113,967

Net earnings 10,536 9,444 45,966 26,101

At September 30, 2008 mortgages and loans receivable include $135,877,000 (December 31, 2007 – $120,342,000)receivable from co-owners.

15. Changes in Non-cash Operating Items and Other

For the three months ended September 30, For the nine months ended September 30,Cash flows provided by (used in) 2008 2007 2008 2007

Amounts receivable $ 3,777 $ (1,667) $ (5,103) $ (1,572)

Prepaid expenses and other assets (2,759) (3,875) (32,075) (29,754)

Accounts payable and other liabilities (11,369) (10,172) (3,563) (6,059)

Other 816 324 1,719 1,258

$ (9,535) $ (15,390) $ (39,022) $ (36,127)

16. Income Taxes

The Trust currently qualifies as a mutual fund trust for income tax purposes. The Trust is required by its Declarationof Trust (“Declaration”) to distribute all of its taxable income to unitholders and is entitled to deduct such distributionsfor income tax purposes. Accordingly, no provision for current income taxes payable is required.

Future income taxes are accounted for using the liability method. This method requires the Trust to: (i) determine itstemporary differences; (ii) determine the periods over which those temporary differences are expected to reverse;and (iii) apply the tax rates enacted at the balance sheet date that will apply in the periods those temporarydifferences are expected to reverse.

Bill C-52, the Budget Implementation Act, 2007 (“Bill C-52”) received Royal Assent on June 22, 2007. Bill C-52 is notexpected to apply to RioCan until 2011 as it provides for a transition period for publicly traded entities that existedprior to November 1, 2006. Bill C-52 will not apply to impose a tax on an entity that meets specific defined requirementsunder the legislation for the real estate investment trust exemption (the “REIT Exemption”). RioCan intends to takethe necessary steps to qualify for the REIT Exemption prior to 2011.

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Where an entity does not qualify for the REIT Exemption certain distributions will not be deductible by that entity incomputing its income for tax purposes. As a result, the entity will be subject to tax at a rate substantially equivalentto the general corporate income tax rate. Distributions paid in excess of taxable income will continue to be treatedas a return of capital to unitholders.

GAAP requires RioCan to recognize future income tax assets and liabilities based on temporary differences expectedto reverse after January 1, 2011, and on the basis of its structure at the balance sheet date. GAAP does not permitthe Trust to consider future changes to its structure that it will make to enable it to qualify for the REIT Exemption.The impact (including the reversal of the Trust’s future income taxes set out below) of any changes undertaken bythe Trust to qualify for the REIT Exemption will not be recognized in the consolidated financial statements until suchtime as it so qualifies.

Components of future income taxes on the Balance Sheets


Tax effected temporary differences between accounting and tax basis of:

Real estate investments $ 146,000 $ 139,000

Other 4,000 5,000

Future income taxes $ 150,000 $ 144,000


Statements of Earnings (Loss)Current income taxes at Canadian

statutory tax rate $ – $ – $ – $ –

Increase in future income taxes resulting from a change in tax status with enactment of Bill C-52 on June 22, 2007 – – – 150,000

Increase in future income taxes resulting from a change during the period in temporary differences expected to reverse after 2010 1,000 7,000 6,700 7,000

Future income tax expense $ 1,000 $ 7,000 $ 6,700 $ 157,000

Statements of Unitholders’ EquityImpact of future income taxes

resulting from a change during the period in temporary differences from unit issue costsexpected to reverse after 2010 $ – $ – $ (700) $ –


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17. Segmented Disclosures and Additional Information

The Trust owns, develops and operates shopping centres located in Canada. Management, in measuring the Trust’sperformance, does not distinguish or group its operations on a geographical or other basis. Accordingly, the Trusthas a single reportable segment for disclosure purposes in accordance with GAAP.

No single tenant accounts for 10% or more of the Trust’s rental revenue.

Additional information on the Trust’s activities in Canadian provinces providing more than 10% of rental revenue andnet carrying amount of income properties is as follows:

Rental revenue for the three Rental revenue for the ninemonths ended September 30, months ended September 30,

Province 2008 2007 2008 2007

Ontario $ 108,906 $ 100,885 $ 322,231 $ 300,747

Quebec 29,558 26,406 89,631 83,030

Alberta 17,289 16,152 52,130 48,176

All others 17,337 17,116 52,083 51,871

$ 173,090 $ 160,559 $ 516,075 $ 483,824

Net carrying amount of income properties as at Province September 30, 2008 December 31, 2007

Ontario $ 2,840,396 $ 2,719,375

Quebec 811,543 762,795

Alberta 495,225 472,060

All others 476,789 465,243

$ 4,623,953 $ 4,419,473

18. Capital Management

The Trust defines capital as the aggregate of unitholders’ equity and debt. The Trust’s capital management frameworkis designed to maintain a level of capital that: complies with investment and debt restrictions pursuant to RioCan’sDeclaration; complies with existing debt covenants; enables the Trust to achieve target credit ratings; funds itsbusiness strategies; and builds long-term unitholder value. The key elements of RioCan’s capital managementframework are approved by its unitholders as related to the Trust’s Declaration and by its Board of Trustees (“Board”)through their annual review of the Trust’s strategic plan and budget, supplemented by periodic Board and BoardCommittee meetings. Capital adequacy is monitored by the Trust by assessing performance against the approvedannual plan throughout the year, which is updated accordingly, and by monitoring adherence to investment and debtrestrictions contained in the Declaration and debt covenants.

RioCan’s Declaration provides for maximum total debt levels up to 60% of Aggregate Assets (herein referred to as“Debt to Aggregate Assets ratio” with Aggregate Assets defined in the Declaration as total assets plus accumulatedamortization of income properties as recorded by the Trust and calculated in accordance with GAAP). As incomeproperties are not defined in the Declaration or in GAAP, RioCan considers income properties to include thosecomponents in Note 2, with certain exceptions. As a matter of policy, RioCan would not likely incur indebtednesssignificantly beyond 58% of Aggregate Assets.

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Additionally, RioCan’s Declaration contains provisions that have the effect of limiting capital expended by the Trustfor, among other items, the following:

• Direct and indirect investments (net of related mortgages payable) in non-income producing properties(including greenfield developments and mortgages receivable to fund the Trust’s co-owners’ share of suchdevelopments) to no more than 15% of the Adjusted Unitholders’ Equity of the Trust (herein referred to as the“Basket ratio” with Adjusted Unitholders’ Equity defined in the Declaration as total unitholders’ equity plusaccumulated amortization of income properties as recorded by the Trust and calculated in accordance withGAAP). The Trust is in compliance with this restriction;

• Total investment by the Trust in mortgages receivable, other than mortgages taken back by the Trust on thesale of its properties, to no more than 30% of the Adjusted Unitholders’ Equity of the Trust. The Trust is incompliance with this restriction;

• Any property acquired by the Trust, directly or indirectly, if the cost to the Trust of such acquisition (net of theamount of mortgages payable assumed) exceeds 10% of the Adjusted Unitholders’ Equity of the Trust. The Trustis in compliance with this restriction;

• Subject to the Basket ratio, securities of an entity other than to the extent that such securities would, for thepurpose of the Declaration, constitute an investment in real estate. The Trust is in compliance with thisrestriction; and

• The amount of space which can be leased or subleased to any tenant, with certain exceptions, to a maximumspace having an aggregate gross leasable area of 20% of the aggregate gross leasable area of all real estateinvestments held by the Trust. The Trust is in compliance with this restriction.

The Trust’s Declaration also requires it to distribute to its unitholders in each year an amount not less than theTrust’s income for the year, as calculated in accordance with the Income Tax Act (Canada) (the “Act”) after allpermitted deductions under the Act have been taken. RioCan’s trustees rely upon forward looking cash flowinformation, including forecasts and budgets, to establish the level of cash distributions.

The Trust’s debentures payable have covenants that are consistent with the Debt to Aggregate Assets ratio asdiscussed above, maintenance of at least $1 billion of Adjusted Book Equity (defined as unitholders’ equity plusaccumulated building amortization calculated in accordance with GAAP), and maintenance of at least an interestcoverage ratio of 1.65 times. Interest coverage is defined as GAAP net earnings for a rolling twelve month period,before net interest expense, income taxes and income property amortization (including provisions for impairment)divided by total interest expense (including interest that has been capitalized).

IncreaseSeptember 30, 2008 December 31, 2007 (decrease)

Capital

Mortgages payable (Note 8) $ 2,351,144 $ 2,251,506 $ 99,638

Debentures payable (Note 9) 874,874 983,742 (108,868)

Unitholders’ equity 1,780,274 1,677,732 102,542

Total capital $ 5,006,292 $ 4,912,980 $ 93,312

Debt to Aggregate Assets ratio 54.6% 56.3% (1.7%)

Basket ratio 8.7% 6.0% 2.7%

The period over period decrease in the Debt to Aggregate Assets ratio primarily arises as a result of the issuance bythe Trust of 7,130,000 units in April 2008.


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The period over period increase in the Basket ratio is consistent with new non-income producing developmentproperties acquired, development expenditures incurred, and mortgages receivable to fund the Trust’s co-owners’share of such development projects by RioCan during the period.

For the twelve month period ended September 30 2008 2007 Decrease

Interest coverage ratio 2.6 2.7 (0.1)

The period over period decrease in the interest coverage ratio arises as a result of increased aggregate indebtednessduring the periods which proceeds were partially used to fund the Trust’s ongoing development pipeline, which isnot yet income producing.

19. Financial Instruments

(i) Fair value of financial instruments

The Trust’s amounts receivable, mortgages and loans receivable, cash and short term investments, guarantees,and accounts payable and other liabilities are substantially carried at amortized cost, which approximates fairvalue. The fair value of other financial instruments is based upon discounted future cash flows using discountrates that reflect current market conditions for instruments with similar terms and risks. Such fair value estimatesare not necessarily indicative of the amounts the Trust might pay or receive in actual market transactions.Potential transaction costs have also not been considered in estimating fair value.


Carrying Fair Carrying Fair value value value value

Mortgages payable $ 2,351,144 $ 2,376,385 $ 2,251,506 $ 2,316,954

Debentures payable 874,874 821,209 983,742 957,165

(ii) Risk management

The main risks arising from the Trust’s financial instruments are credit, interest and liquidity risk. The Trust’sapproach to managing these risks is summarized below.

(a) Credit risk

Credit risk arises from the possibility that tenants may experience financial difficulty and be unable to fulfilltheir lease commitments. Further risks arise in the event that borrowers default on the repayment of theirmortgages to the Trust.

As discussed in Note 18, RioCan’s Declaration contains provisions that have the effect of limiting the amountof space which can be leased to one tenant and its investment in mortgages receivable.

Additionally, the Trust mitigates tenant credit risk through geographical diversification (Note 17), staggeredlease maturities, diversification of revenue sources resulting from a large tenant base, avoiding dependenceon any single tenant by ensuring no individual tenant contributes a significant percentage of the Trust’sgross revenue, ensuring a considerable portion of the Trust’s revenue is earned from national and anchortenants, and conducting credit assessments for new tenants.

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As at September 30, 2008:

• Minimum annualized rentals (exclusive of recoverable property operating costs and taxes) for tenant leases expiring in each of the next five years ending December 31 are as follows: 2008 – $8,504,000; 2009 – $37,963,000; 2010 – $45,056,000; 2011 – $53,370,000; and 2012 – $46,775,000.

The above aggregate renewals over the next five years represent annual lease payments of$191,668,000 based on current contractual rental rates. For every such tenancies renewed uponmaturity at an aggregate rental rate differential of 100 basis points, the Trust’s operations would be impacted by approximately $2,000,000 annually.

• The Trust has a net leasable area of 32,764,000 square feet and a portfolio occupancy rate of 97%.Based on RioCan’s current annualized rental revenue on a weighted average portfolio basis ofapproximately $22 per square foot, for every fluctuation in the Trust’s occupancy by a differential of 100 basis points, its operations would be impacted by approximately $7,000,000 annually.

• No individual tenant comprises more than 5.4% of the Trust’s annualized rental revenue as comparedto 5.7% for the comparative period of 2007.

• Approximately 83.6% of the Trust’s annualized rental revenue is derived from national and anchortenants (which tenant covenants are expected to be of higher credit quality than other tenants) ascompared to 82.6% for the comparative period of 2007.

(b) Interest rate and liquidity risks

The Trust is exposed to interest rate risk on its borrowings. Liquidity risk arises from the possibility of not havingsufficient debt and equity capital available to the Trust to fund its growth program and refinance its debts asthey mature. In the current economic climate and given the relatively small size of the Canadian marketplace,accessing domestic capital may become increasingly more difficult.

Additionally, the Trust’s lenders may have suffered losses related to their lending and other financialrelationships, especially because of the general weakening of the economy and the increased financialinstability of many borrowers. As a result, lenders may continue to tighten their lending standards whichcould make it more difficult for RioCan to obtain financing on favorable terms, or at all. The Trust’s financialcondition and results of operations would be adversely affected if it were unable to obtain financing, orobtain cost-effective financing.

As discussed in Note 18, RioCan’s Declaration establishes a Debt to Aggregate Assets ratio limit of 60%.

Additionally, the Trust mitigates interest rate and liquidity risk by staggering the maturity dates (see Notes8 and 9 for Aggregate Debt) of its long term debt and by limiting the use of floating rate debt.

As at September 30, 2008:

• The Trust’s Aggregate Debt has a 5.3 year weighted average term to maturity bearing interest at a weighted average contractual interest rate of 5.92% per annum;

• 0.7% of its Aggregate Debt is at floating interest rates as compared to 2.5% as at December 31, 2007;

• The Trust’s undrawn lines of credit are $255,000,000; and

• The Trust’s Debt to Aggregate Assets ratio is 54.6% and the Trust could, therefore, incur additionalindebtedness of approximately $800,000,000 and still not exceed the Debt to Aggregate Assets ratiolimit of 60% (which additional borrowing calculation assumes that additional borrowings will beused to add to RioCan’s asset base).

At September 30, 2008 the Trust has aggregate contractual debt principal maturities through toDecember 31, 2010 of approximately $742,100,000 (23% of RioCan’s Aggregate Debt) with aweighted average contractual interest rate of 6.48%. For every such amount refinanced uponmaturity at an aggregate interest rate differential of 100 basis points, the Trust’s operations wouldbe impacted by approximately $7,000,000 annually.


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20. Related Party Transaction

The Trust acquired an additional 12.5% of an income property for approximately $9,400,000 (which considerationincludes the assumption of $5,100,000 in a mortgage payable) from a co-owner. This acquisition increased the Trust’sinterest from 50% to 62.5%.

21. Contingencies and Commitments

(a) Guarantees

The Trust provides guarantees on behalf of third parties, including co-owners and partners. In addition, theTrust’s guarantees remain in place for certain debts assumed by purchasers in connection with propertydispositions, and will remain until such debts are extinguished or the lenders agree to release the Trust’scovenants. Recourse would be available to the Trust under these guarantees in the event of a default by the borrowers, in which case the Trust’s claim would be against the underlying real estate investments. AtSeptember 30, 2008 such guarantees amount to approximately $513,000,000 and expire between 2008 and 2034.No liability in excess of the fair value of the guarantees has been recognized in these financial statements asthe estimated fair value of the borrowers’ interests in the real estate investments is greater than the mortgagespayable for which the Trust provided guarantees.

(b) Contractual obligations on real estate investments

(i) In February 2008, the Trust completed the final closing of its acquisition of a 50% interest in a developmentproperty. At any time within three years after the final closing of this transaction, the vendor had the rightto sell the whole or part of its remaining 50% interest to the Trust at fair market value. In July 2008 thevendor released the Trust from this obligation.

(ii) The Trust has entered into an agreement for the sale of interests (ranging from 22.5% to 50%) in three realestate investments. These dispositions are being completed in stages as leasable area is occupied bytenants. The sale prices are determined by valuing such areas at predetermined multiples of net operatingincome, plus predetermined per square foot amounts for additional buildable density. At September 30, 2008the estimated remaining selling prices under this agreement for the years ending December 31 are: 2008 –$11,000,000; and 2009 – $1,600,000.

(c) Litigation

The Trust is involved with litigation and claims which arise from time to time in the normal course of business.In the opinion of management, any liability that may arise from such contingencies will not have a significantadverse effect on its consolidated financial statements.

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The terms “RioCan”, “the Trust”, “we”, “us” and “our” in the following Management’s Discussion and Analysis(“MD&A”) refer to RioCan Real Estate Investment Trust and its consolidated financial position and results of operationsfor the three and nine months ended September 30, 2008 and 2007. Our MD&A dated October 28, 2008 should beread in conjunction with our audited consolidated financial statements for the two years ended December 31, 2007and 2006, a copy of which can be obtained on SEDAR at www.sedar.com. Historical results and percentagerelationships contained in our interim and annual consolidated financial statements and MD&A, including trendswhich might appear, should not be taken as indicative of our future operations.

Advisory: Certain information included in this MD&A contains forward-looking statements within the meaning ofapplicable securities laws. These statements include, but are not limited to, statements made in “Vision and BusinessStrategy”, “Assets Profile”, “Capital Structure”, “Outlook”, and other statements concerning our 2008 objectives, ourstrategies 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”, “expect”, “intend”, “estimate”,“anticipate”, “believe”, “should”, “plans”, “continue”, or similar expressions suggesting future outcomes or events.Such forward-looking statements reflect management’s current beliefs and are based on information currently availableto management.

These statements are not guarantees of future performance and are based on our estimates and assumptions thatare subject to risks and uncertainties, including those described under Risks and Uncertainties in this MD&A, whichcould cause our actual results to differ materially from the forward-looking statements contained in this MD&A.Those risks and uncertainties include risks associated with real property ownership, financing and interest rates,environmental matters, construction, unitholder liability, and income taxes. Material factors or assumptions thatwere applied in drawing a conclusion or making an estimate set out in the forward-looking information include: an increasing divergence in the general economy between eastern and western Canada; a less robust retailenvironment than we have seen for the last few years; interest costs to us remain relatively stable; acquisitioncapitalization rates increase and land costs for greenfield development decrease; a continuing and acceleratingtrend towards land use intensification in high growth markets; and equity and debt capital markets will continue toprovide access to capital to fund at acceptable costs our future growth program and refinance our debts as theymature. Although the forward-looking information contained in this MD&A is based upon what management believesare reasonable assumptions, there can be no assurance that actual results will be consistent with these forward-looking statements. Certain statements included in this MD&A may be considered “financial outlook” for purposesof applicable securities laws, and such financial outlook may not be appropriate for purposes other than this MD&A.

Bill C-52, the Budget Implementation Act, 2007 (“Bill C-52”) received Royal Assent on June 22, 2007. Bill C-52 is notexpected to apply to RioCan until 2011 as it provides for a transition period for publicly traded entities that existedprior to November 1, 2006. In addition, Bill C-52 will not apply to an entity that meets specific defined requirementsunder the legislation for the real estate investment trust exemption (“the REIT Exemption”). RioCan intends to takethe necessary steps to qualify for the REIT Exemption prior to 2011, and as a result, certain statements contained in this MD&A may be modified.

All forward-looking statements in this MD&A are qualified by these cautionary statements. Except as required byapplicable law, RioCan undertakes no obligation to publicly update or revise any forward-looking statement, whetheras a result of new information, future events or otherwise.

Overview and Highlights

We are an unincorporated “closed-end” trust governed by the laws of the Province of Ontario and constitutedpursuant to a Declaration of Trust (“Declaration”). We are publicly traded and listed on the Toronto Stock Exchangeunder the symbol REI.UN. We are Canada’s largest REIT as measured by the book value of our assets and total stockmarket capitalization.

Our net earnings for the third quarter of 2008 are $41.6 million (19 cents per unit) compared to $35.9 million (17 centsper unit) for the same period of 2007. The difference between net earnings (loss) and funds from operations (“FFO”)is amortization expense and future income taxes (see our FFO discussion below for a reconciliation to net earnings).

Management ’s D i scuss i on and A nal ys i sRI

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Management ’s D i scuss i on and A nal ys i s

Our FFO for the third quarter of 2008 is $81.3 million (37 cents per unit) compared to $76 million (36 cents per unit) forthe same period of 2007. This $5.3 million (1 cent per unit) increase in FFO is primarily comprised of:

• An increase in property net operating income of $8.9 million (refer to our discussion in Net Operating Income);

• An increase in disposition-dependent performance and other fees of $2.6 million (refer to our discussion in Feesand Other Income); offset by

• A decrease in gains on properties held for resale of $2.9 million (refer to our discussion in Properties UnderDevelopment); and

• Increased interest expense of $3.2 million (refer to our discussion in Interest Expense).

Our net earnings for the nine months ended September 30, 2008 are $116.8 million (54 cents per unit) compared to anet loss of $32.8 million (a loss of 16 cents per unit) for the same period of 2007. Our FFO for the first three quartersof 2008 is $235.4 million ($1.09 per unit) compared to $227.1 million ($1.09 per unit) for the same period of 2007. This$8.3 million increase is primarily comprised of:

• An increase in property net operating income (before certain adjustments including lease cancellation fees) of$24.3 million, offset by higher lease cancellation fees of $7.9 million during the same period of 2007 (refer to ourdiscussion in Net Operating Income);

• An increase in fee revenue of $3.8 million (refer to our discussion in Fees and Other Income); offset by

• An increase in interest expense of $8.6 million (refer to our discussion in Interest Expense); and

• An increase in general and administrative expense of $3.7 million arising primarily from head office movingrelated costs (see our discussion in General and Administrative Expenses).

For the nine months ended September 30, 2008 our weighted average units outstanding are 216.9 million units ascompared to 207.7 million units for the comparative period of 2007. This 9.2 million unit change is primarily a resultof the 7.1 million units we issued in April 2008. As discussed below, the net proceeds from this issue have resulted in some dilution of our net earnings and FFO per unit.

Other operational and financial highlights discussed throughout this MD&A as at and for the nine months endedSeptember 30 are as follows:

(thousands of square feet, except other data)

As at and for the nine months ended September 30 2008 2007

Operational Information

Number of properties:

Income producing 224 195

Under development (i) 14 12

Portfolio occupancy 97.0% 97.6%

Net leasable area (“NLA”):

Total portfolio 32,764 30,956

Completed greenfield development and land use intensification activities during the period 399 294

Acquired during the period 857 1,150

Greenfield development pipeline upon completion:

Total project NLA 8,754 7,985

RioCan’s owned interest of project NLA 3,467 3,408

Percentage of portfolio rental revenue derived from:Six Canadian high growth markets (ii) 66.4% 65.1%

National and anchor tenants (annualized) 83.6% 82.6%

Largest tenant (annualized) 5.4% 5.7%

Number of employees (excluding seasonal) 640 700

(i) The number of properties under development excludes those properties with phased development where tenancies have already commencedoperations. These properties are included in the number of income properties.

(ii) See our discussion in Vision and Business Strategy.

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(thousands of dollars, except other data)

As at September 30 2008 2007

Financial Information

Total assets $ 5,335,745 $ 5,122,095

Debt (mortgages and debentures payable) $ 3,226,018 $ 3,125,173

Debt to Aggregate Assets (i) 54.6% 56.2%

Debt to Total Capitalization (ii) 41.9% 37.5%

Unitholders’ equity $ 1,780,274 $ 1,661,058

Units outstanding 220,996 209,859

Closing Market Price $ 20.21 $ 24.85

Market Capitalization (iii) $ 4,466,329 $ 5,214,996

Total Capitalization (iv) $ 7,692,347 $ 8,340,169

Three months ended September 30, Nine months ended September 30,2008 2007 2008 2007

Total revenue $ 185,537 $ 172,493 $ 563,289 $ 526,490

Net earnings (loss) (v) $ 41,603 $ 35,917 $ 116,813 $ (32,790)

Net earnings (loss) per unit– basic and diluted $ 0.19 $ 0.17 $ 0.54 $ (0.16)

FFO (vi) $ 81,308 $ 76,029 $ 235,373 $ 227,120

FFO per unit (vi) $ 0.37 $ 0.36 $ 1.09 $ 1.09

Distributions to unitholders $ 75,035 $ 69,168 $ 220,606 $ 205,644

Distributions to unitholders per unit $ 0.340 $ 0.330 $ 1.015 $ 0.990

Distributions per unit (annualized) $ 1.38 $ 1.32

Unit issue proceeds under distribution reinvestment plan $ 17,410 $ 17,241 $ 54,172 $ 51,248

Distribution reinvestment plan participation rate 23.2% 24.9% 24.6% 24.9%

(i) A non generally accepted accounting principle (“GAAP”) measurement defined in our Declaration (see our discussion in Capital Structure).(ii) A non-GAAP measurement. Calculated by us as debt divided by total capitalization. Our method of calculating debt to total capitalization

may differ from other issuers’ methods and accordingly may not be comparable to such amounts reported by other issuers.(iii) A non-GAAP measurement. Calculated by us as closing market price multiplied by units outstanding. Our method of calculating market

capitalization may differ from other issuers’ methods and accordingly may not be comparable to such amounts reported by other issuers.(iv) A non-GAAP measurement. Calculated by us as debt plus market capitalization. Our method of calculating total capitalization may differ

from other issuers’ methods and accordingly may not be comparable to such amounts reported by other issuers.(v) Net earnings (loss) for the three and nine months ended September 30, 2008 includes a future income tax expense of $1 million and

$6.7 million, respectively (2007 – $7 million and $157 million, respectively).(vi) A non-GAAP measurement for which a reconciliation to net earnings (loss) can be found in our discussion under FFO.

Vision and Business Strategy

Our purpose is to deliver to our unitholders stable and reliable cash distributions that will increase over the longterm. We do so by following a strategy of owning, developing and operating retail real estate, as well as mixed usereal estate with a significant retail component.

Approximately 45% of the Canadian population resides, and 64% of the population growth has occurred in the lastfive years, in Calgary, Alberta; Edmonton, Alberta; Montreal, Quebec; Ottawa, Ontario; Toronto, Ontario; andVancouver, British Columbia based on Statistics Canada 2006 Census reports.


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These six high population growth markets (“high growth markets”) for RioCan’s purposes include the above citiesand surrounding areas. As growth in population dictates growth in retail sales, which in turn results in more demandfor space and higher rents, increasingly our focus is to own properties mainly in those high growth markets havingin excess of one million people. Shopping centres located in high growth markets also offer more opportunities forextracting value, for example, by rezoning sites for even higher and better uses. RioCan also owns properties instrong secondary markets where our goal is to own the dominant unenclosed centre(s) in those markets, examplesof which are Kingston, Ontario and Quebec City, Quebec. However, the above focus will not preclude our acquisitionof retail properties outside high population growth areas.

Our core investment strategy is to focus on stable, low risk, predominantly retail properties in the high growth marketsto satisfy our purpose of creating stable and growing cash flows from our property portfolio.

The specific retail assets in which we currently invest are:

• New format retail centres

New format retail centres are large aggregations of dominant retailers grouped together at high traffic and easilyaccessible locations. These unenclosed campus-style centres are generally anchored by supermarkets and juniordepartment stores and may include entertainment (movie theatres, large-format bookstores and restaurants) andfashion components.

• Neighbourhood convenience unenclosed centres

Neighbourhood convenience unenclosed centres are generally supermarket and/or junior department storeanchored shopping centres, typically comprising between 60,000 to 250,000 square feet of leasable area. Otherconvenience-oriented tenants generally include drug stores, restaurants and other service providers.

• Urban retail properties

Urban retail properties are high-quality, innovative, multi-level format retail centres located in major urban markets.The centres are situated in high-density locations and may sometimes be part of a multi-use complex.

As discussed in Future Income Taxes below, unless further substantive technical changes are made to Bill C-52prior to 2011, to qualify for the REIT Exemption RioCan, among other items, will essentially be required to ensure that95% of revenue it earns is derived from rental revenue from long-lived income properties (those income propertiesconsistent with RioCan’s core investment strategy) and fee income from such properties in which we have an interest.Prior to 2011, and on the assumption there have been no substantive technical Bill C-52 legislative changes, we willisolate those activities that generate non-qualifying income and review how best to restructure so as to continuesuch activities in a taxable entity or discontinue such activities if appropriate, with the purpose of ensuring thatRioCan will comply with the requirements of Bill C-52, while generating the maximum benefit to our unitholders.Accordingly, our current strategy is to:

• Focus on growing our rental and fee income from long-lived properties. This growth from rental and fee incomewill be achieved through:

• Maintaining and further increasing the supply of greenfield development projects and land useintensification activities in high growth markets;

• Targeting the acquisition of properties in the high growth markets;

• Targeting the acquisition of properties that may not necessarily be of the same quality as RioCan’s existingincome property portfolio, but where we believe that we can obtain substantial rental growth from theenhancement of these properties;

• Selective acquisition of retail properties outside high population growth areas where national and anchortenant profiles are consistent with those in RioCan’s overall portfolio; and

• Acquisitions and developments with long term strategic partners that will generate predictable andrecurring fee income streams and higher returns on our capital invested.

• Continue leveraging our in-house expertise to earn fees and gains from properties held for resale through to the end of 2010, including from the completion of the (re)development of our current properties held for resaleportfolio and from our ongoing urban land use intensification program. As discussed above, prior to 2011 we willisolate those activities that generate this type of income and review how best to restructure so as to continuethese activities in a taxable entity or discontinue such activities if appropriate, with the purpose of ensuringRioCan will comply with the requirements of Bill C-52, while generating the maximum benefit to our unitholders.

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In light of recent changes in world financial and real estate market conditions, RioCan believes that there is asignificant investment opportunity in the North American real estate marketplace to acquire properties on anopportunistic basis. We are currently reviewing a variety of structures to determine how best to take advantage of the opportunities, while still considering the impact of Bill C-52.

In summary our goal over the next few years is to continue generating both income from fees and gains on propertiesheld for resale, while focusing on achieving growth in our income from our long-lived income property base.

We expect these growth drivers to continue to consist of:

Organic growth in our existing property portfolio.

Our organic growth is expected to come from rental growth on renewals and releasing of existing space as tenantleases expire. Additionally, to the extent our properties are not fully occupied, we can generate growth from leasingsuch space and increasing our occupancy ratio.

Intensification programs consisting of extracting more value from the land component of our existing property portfolio.

The trend in the high growth markets towards densification of existing urban locations is driven by, among otherfactors, prohibitive costs of expanding infrastructure beyond urban boundaries, environmental concerns andmaximizing use of mass transit.

Land use intensification opportunities arise from the fact that retail centres are generally built with lot coverage ofapproximately 25% of the underlying land; therefore, particularly in urban markets, we can obtain additional density(retail or otherwise) on our existing property portfolio and, since we already own the underlying land, are able toachieve relatively high returns on new capital invested.

Additionally, as a normal part of our business, we also expand and redevelop (components of) existing shoppingcentres to create and/or extract additional value. One of our goals is to add annually between 200,000 and 300,000square feet of retail space from this activity to our existing property portfolio.

Our ongoing greenfield development program.

At September 30, 2008 greenfield development projects comprise approximately 8.8 million square feet, of which ourownership interest will be approximately 3.5 million square feet. Additionally, we have interests in 3.3 million squarefeet of conditional greenfield development projects in our development pipeline.

Opportunistic acquisitions of income properties.

The tightening in the credit markets arising from current economic conditions (which impact access to both debtand equity markets) is creating an environment where a significant number of buyers who were previously activeacquirers may no longer be able to participate and an environment where sellers may view the disposition of realestate as an affordable means of raising capital. This may create a market where there are more sellers than buyers.This imbalance should cause acquisition capitalization rates to increase (more significantly in secondary and tertiarymarkets) and land costs for greenfield development to decrease. This environment should create more opportunitiesfor us to acquire real estate.

The key measures by which management will evaluate its success in the achievement of its objectives are thegrowth and stability of cash flows from our property portfolio as measured by growth in: (i) FFO, with a separatemeasure that focuses on long-lived property rental revenue and fee income; and (ii) cash distributions to unitholders.

Outlook

The global financial and real estate markets have recently experienced dramatic changes. These changes haveresulted in a great deal of uncertainty in the global financial and real estate markets and have resulted in significantconstraints on access to capital (which impacts both debt and equity markets), tighter lending standards and slowerlease commitments from tenants. Notwithstanding these factors, we believe that the fundamentals in our portfoliogenerally remain strong due to the high proportion of national tenants, high occupancy levels and strong leasing activity,as we retained approximately 94% of our expiring leases during the third quarter. At September 30, 2008 our occupancyremained stable at 97% as compared to June 30, 2008.


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RioCan’s capital management framework limits our maximum indebtedness to less than 60% of our Aggregate Assets ona book value basis. We believe that based on the fair market value of our portfolio, our leverage is substantially lower.

This debt policy has also resulted in approximately 15% of our properties being unencumbered by debt on an NLAbasis, providing us with access to a pool of assets for obtaining additional secured debt. At the end of the thirdquarter our interest coverage ratio remained consistent at 2.6 times. Further, our leverage level provides us with theability to access debt markets even when these markets are tight and difficult, as they have been for the past year.For the current year, we had approximately $330 million of debt maturities. To date, we have refinanced or entered intocommitments for new financing aggregating approximately $543 million.

In October 2008 we repurchased approximately $26 million of our $110 million Series D debentures which mature onSeptember 21, 2009, and $5 million of our $100 million Series J debentures which mature on March 24, 2010.

In April 2008 we issued 7.1 million units for gross proceeds of $150 million. At September 30, 2008 our Debt toAggregate Assets ratio is 54.6%, as compared to 54.5% at June 30, 2008. On this basis we could therefore incuradditional indebtedness of approximately $800 million (this calculation assumes that additional amounts borrowedwill be added to the asset base) and still not exceed the 60% leverage limit. This provides us with additional financialliquidity and flexibility, and allows us to continue our greenfield development program and seek out opportunisticacquisitions of income properties, as discussed above.

While having relatively low debt leverage exposure is important in current economic conditions, the quality of ourrental revenue available to service our debt and pay distributions to our unitholders is equally important. We reduceour exposure to rental revenue risk in our shopping centre portfolio through geographical diversification, staggeredlease maturities, diversification of revenue sources resulting from a large tenant base, avoiding dependence on anysingle tenant by ensuring no individual tenant contributes to a significant percentage of our gross revenue, andensuring a considerable portion of our rental revenue is earned from national and anchor tenants.

At September 30, 2008, 83.6% of our annualized rental revenue is derived from national and anchor tenants, with ourlargest exposure to any single tenant comprising only 5.4% of our annualized rental revenue.

Additionally, as discussed above we made a strategic decision several years ago to focus on the six Canadian highgrowth markets. We are now at the point where approximately two-thirds of our revenue is derived from propertieswithin these high growth markets and it is expected that over time, properties within these markets will have higherrental increases and higher occupancy rates, as well as providing ongoing opportunities for expansion and landuse intensification.

It is through the implementation of our greenfield development and land use intensification programs, organic growth atexisting properties, and risk mitigation strategies, among other items, that we expect to continue to achieve growth. Anexample of risk mitigation for our greenfield development projects is that we form co-ownerships at the commencementof the project with established institutional partners, including the CPP Investment Board (“CPPIB”) and Sun LifeAssurance Company of Canada (“Sun Life”) (see Risks and Uncertainties).

2008 Objectives

We established our 2008 objectives at the end of 2007, as follows:

• Continue enhancing the quality of our real estate portfolio as measured by the stability, reliability and growth ofthe resulting cash flows;

• Achieve growth in our FFO per unit, with a separate measure that focuses on long-lived property rental revenueand fee income;

• Continue to identify opportunities for land use intensification activities in high growth markets; and

• Continue to maintain and further increase the supply of greenfield development projects in our development pipeline.

In forming these objectives we have relied on, among other factors, the following assumptions:

• An increasing divergence in the general economy between eastern and western Canada;

• A less robust retail environment than we have seen for the last few years;

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• Interest costs to us remain relatively stable;

• Acquisition capitalization rates increase and land costs for greenfield development decrease;

• Continuing and accelerating trend towards land use intensification in high growth markets; and

• Equity and debt capital markets will continue to provide access to capital to fund, at acceptable costs, our futuregrowth program and refinance our debts as they mature.

To further these objectives, in April 2008 we issued 7.1 million units on a bought-deal basis at $21.05 per unit for grossproceeds of approximately $150 million. These proceeds are expected to be/have been used, among other items, torepay indebtedness incurred under our operating credit facilities, to fund our acquisition and development programsand potential future property acquisitions and development activities, and the balance for general trust purposes.

As discussed above in Vision and Business Strategy, the current environment should create more opportunities forus to acquire real estate.

Additional initiatives already commenced by RioCan to pursue these objectives, while adhering to our strategy of owning properties in high growth markets, include: (i) new format retail development projects undertaken both with and without partners; (ii) continued focus on land use intensification at our existing properties; and (iii) opportunistic acquisitions of shopping centre portfolios. Further details relating to these objectives aredescribed throughout this MD&A.

The achievement of our objectives is partially dependent on successful mitigation of business risks, which isdiscussed below in Risks and Uncertainties. RioCan believes it has identified and mitigated such risks to the extentpractical and is committed to identifying and implementing the actions required to achieve its objectives.

Asset Profile

At September 30, 2008:

• We have ownership interests in a portfolio of 224 shopping centres comprising 32.8 million square feet with aportfolio occupancy rate of 97%.

• We have ownership interests in 14 greenfield development projects that will upon completion comprise approximately8.8 million square feet, of which our ownership interest will be approximately 3.5 million square feet.

Income Properties

The changes in our net carrying amount of income properties are as follows:

Three months ended September 30, Nine months ended September 30,(thousands of dollars) 2008 2007 2008 2007


Acquisitions 64,455 – 167,825 268,381

Completion of properties under development 56,363 21,940 165,925 67,857

Tenant installation costs 3,903 6,317 14,988 16,701

Transfers to properties under development (7,815) (2,746) (32,841) (42,890)

Other (i) 2,237 (507) 443 606

Amortization expense (38,705) (33,112) (111,860) (102,910)

Balance, end of period $ 4,623,953 $ 4,248,896 $ 4,623,953 $ 4,248,896

(i) During the first quarter of 2008, RioCan exercised its option to acquire a 50% co-ownership interest in a substantially completed greenfielddevelopment project. The development project was funded by RioCan through a participating mortgage structure. Prior to the exercise of its option, RioCan was required under applicable accounting rules relating to variable interest entities to show 100% of the related assets and liabilities of the project on its balance sheet, as for accounting purposes we were identified as the primary beneficiary (see Note 1 (b) of the consolidated financial statements for the two years ended December 31, 2007 and 2006). After we exercised our option, the applicableaccounting rules require the inclusion of only our 50% share of the related assets and liabilities. Accordingly, non-cash adjustments haveresulted in real estate investments decreasing by $21.9 million, mortgages receivable increasing by $5.9 million, mortgages payable decreasingby $17.8 million and working capital decreasing by $1.8 million.


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The changes in NLA of our income properties are as follows:

Three months ended September 30, Nine months ended September 30,(square feet in thousands) 2008 2007 2008 2007

NLA, beginning of period 32,538 30,908 31,719 29,645

Acquisitions of income properties 209 – 857 1,150

Completed greenfield development and land use intensification 90 85 399 294

Dispositions and other adjustments (73) (37) (211) (133)

NLA, end of period 32,764 30,956 32,764 30,956

The breakdown of our portfolio by property type is as follows:

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New Format Retail 52.4%

Grocery Anchored Centre 20.3%

Enclosed Shopping Centre 13.8%

Urban Retail 5.8%

Non-Grocery Anchored Centre 4.1%

Office 3.6%

Annualized rental revenue by propertytype at September 30, 2008

New Format Retail 45.3%

Grocery Anchored Centre 21.0%

Enclosed Shopping Centre 19.6%

Non-Grocery Anchored Centre 5.3%

Office 4.8%

Urban Retail 4.0%

NLA by property type atSeptember 30, 2008

A summary of our 2008 acquisition activity is as follows:

NLA (in sf) RioCan’sQuarter at RioCan’s ownership

Property name and location acquired interest Major tenants interest

Portfolio acquisition:

1208/1216 Dundas Street East, Q3 9,293 Swiss Chalet 100%Whitby, ON

1910 Bank Street, Ottawa, ON Q3 6,140 Swiss Chalet 100%

2335 Lapiniere Boulevard, Brossard, QC Q3 2,259 Harvey’s 100%

2422 Fairview Street, Burlington, ON Q3 6,140 Swiss Chalet 100%

2955 Bloor Street West, Toronto, ON Q3 8,777 Swiss Chalet 100%

2990 Eglinton Avenue East, Q3 6,140 Swiss Chalet 100%Scarborough, ON

3736 Richmond Road, Nepean, ON Q3 2,938 Harvey’s 100%

410 King Street North, Waterloo, ON Q3 2,067 Harvey’s 100%

5008/5020 97th Street NW, Edmonton, AB Q3 8,340 Swiss Chalet, Harvey’s 100%

541 Saint-Joseph Boulevard, Gatineau, QC Q3 2,584 Harvey’s 100%

6666 Lundy’s Lane, Niagara Falls, ON Q3 6,140 Swiss Chalet 100%

735 Queenston Road, Hamilton, ON Q3 6,140 Swiss Chalet 100%

1650-1660 Carling Avenue, Ottawa, ON Q3 142,188 Canadian Tire, 100%Mark’s Work Wearhouse

209,146

Portfolio acquisition:

720 Maloney Boulevard, Gatineau, QC Q2 141,939 Wal-Mart, Canadian 50%Tire and Super C

857 Cecile Boulevard, Hawkesbury, ON Q2 28,375 Price Chopper 50%

900 Aberdeen Avenue, Hawkesbury, ON Q2 8,516 Shoppers Drug Mart 50%

1160 Desserte Ouest, Montreal, QC Q2 60,049 Zellers 50%

1345 Huron Street, London, ON Q2 45,106 Shoppers Drug Mart 50%

Chain Lake Drive, Halifax, NS Q2 69,047 Wal-Mart 50%

Gates of Fergus, Fergus, ON Q2 53,478 Zellers 50%

King George Square, Belleville, ON Q2 35,965 A&P and Rogers Video 50%

Nortown Centre, Chatham, ON Q2 35,712 Food Basics, PartSource 50%and CIBC

Viewmount, Ottawa, ON Q2 65,458 Loeb, Best Buy and 50%Linens ‘N’ Things

RioCan Elgin Mills Crossing, Q2 31,016 Additional 12.5% 62.5%Richmond Hill, ON interest

574,661

Shoppers on Topsail, St. John’s, NF Q1 29,689 Shoppers Drug Mart 100%

Quartier DIX30, Autoroute 10 & 30, Q1 43,326 Final closing of forward 50%Brossard, QC purchase

73,015

856,822


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• The acquisition of a portfolio of twelve properties located primarily in central and eastern Canada and one inwestern Canada aggregating approximately 67,000 square feet for a purchase price of $21 million and capitalizationrate of 7.5%. Two additional properties located in Cambridge, Ontario and Edmonton, Alberta will be acquired inJanuary 2009 at a cost of $8 million at the same capitalization rate. The overall leasable area of the fourteenproperty portfolio is approximately 97,200 square feet. The tenancies include existing Harvey’s, Swiss Chalet,Montana’s and Milestone with a lease term of 15 years with the exception of Harvey’s locations, which are for10 years. All leases feature 10% rental increases every five years. The portfolio was acquired unencumbered,providing us with the opportunity to generate capital through mortgage financings as and when required.

As part of this acquisition, RioCan has the option of building out additional density of approximately 3,000 squarefeet in Whitby, approximately 7,000 square feet in Ottawa and approximately 5,000 square feet in Edmonton.

• In July 2008 we acquired 1650-1660 Carling Avenue, in Ottawa, Ontario from Canadian Tire Real Estate Limited(“CTREL”) for a purchase price of $40 million and capitalization rate of 6.4%. 1650-1660 Carling Avenue features anewly constructed 142,188 square foot two-storey urban retail concept. The property is anchored by a CanadianTire that is located on the second level, a Mark’s Work Wearhouse that is located on the first level, as well astwo additional tenancies. The entire facility is subject to a headlease by CTREL, which provides for a lease termof fifteen years and the net rental rate is subject to a 10% increase every five years. The property was acquiredfor cash and is free of debt, providing us with the opportunity to generate capital through mortgage financing asand when required.

• In June 2008 we acquired on a 50/50 basis, through the creation of a second joint venture partnership (RioKim II) withKimco Realty Corporation (“Kimco”), a ten property portfolio located in central and eastern Canada aggregatingapproximately 1.1 million square feet of new format and other retail centres. The transaction was completed at acapitalization rate of 7.7% with a portfolio purchase price of approximately $156 million, and $82.6 million of mortgagedebt was assumed on the transaction with a weighted average term of 8.1 years and a weighted average interestrate of 6.17%.

• During the second quarter of 2008 we increased our interest in RioCan Elgin Mills Crossing by 12.5% to 62.5% from50%. The purchase price was approximately $9.4 million at a capitalization rate of 6.25%. The transaction alsoresulted in the assumption of $5.1 million of construction financing at a rate of bank prime plus 0.75%. This acquisitionis considered a related party transaction for GAAP purposes. This site is currently being developed into a 441,000square foot new format retail centre as a joint venture with Trinity Development Group Inc. (“Trinity”) and TamuzInvestments which own 37.5%. The site is anchored by Costco (land lease), which commenced operations in thefourth quarter of 2007 and by Home Depot, which owns its own store and operates as part of the overall site. Thecentre has a strong mix of national tenants that include PetSmart, Staples/Business Depot, Michaels, Mark’s WorkWearhouse, Scotiabank and TD Canada Trust. The centre was substantially completed in the third quarter of 2008.

• During the first quarter of 2008 we acquired a 29,700 square foot non-grocery anchored centre featuring aShoppers Drug Mart located in St. John’s, Newfoundland for $5.6 million at a capitalization rate of 7.62%.

• During the first quarter of 2008 we completed the acquisition from Devimco Group Inc. (“Devimco”) of the finalphase of our 50% interest in Quartier DIX30 located in Brossard, Quebec. This regional lifestyle centre is comprisedof approximately 2 million square feet of retail space. The site is anchored by a 180,000 square foot Wal-Mart anda 100,000 square foot Rona (both retailer owned). In addition, a 60,000 square foot Maxi (Loblaws) is expected tobe constructed in 2009 (also retailer owned). Additional anchor tenants at the site include a 91,000 square footCanadian Tire, a 59,000 square foot Cineplex Odeon Cinemas and a 52,000 square foot Winners/HomeSense store.The remainder of the site is occupied by strong national tenants including Future Shop, Staples/Business Depot,Indigo, Sports Experts, TD Canada Trust and Pier 1 Imports.

This acquisition was closed in phases at an aggregate cost, including closing costs, of approximately $153 million ata capitalization rate of 6.83%. We purchased the first phase of the property, consisting entirely of a 59,000 squarefoot Cineplex theatre, in July 2006. Seventy-six additional tenancies totalling 405,000 square feet were purchasedin the second phase in November 2006. Sixty-three more tenancies totalling 566,000 square feet were acquired byus in the third phase in December 2007. The last thirty tenancies, totalling 116,000 square feet (of which 29,000square feet remain in properties under development) were purchased in the final phase in February 2008.

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During the nine months ended September 30, 2008 we completed 399,000 square feet of (re)development, of whichapproximately 36,000 square feet pertains to additional NLA added at existing properties, and 363,000 square feetpertains to the completion of greenfield development projects. A summary of our 2008 completed greenfielddevelopment projects and land use intensification activity includes:

NLA (in sf) RioCan’sQuarter at RioCan’s ownership

Property location completed interest interest

RioCan Beacon Hill, Calgary, AB Q3 3,022 40%

RioCan Elgin Mills Crossing, Richmond Hill, ON Q3 7,307 62.5%

RioCan Meadows, Edmonton, AB Q3 1,945 50%

RioCan Centre Milton, Milton, ON Q3 29,324 100%

Corbett Centre, Fredericton, NB Q3 48,281 62.5%

89,879


RioCan Centre Burloak, Oakville, ON Q2 51,587 50%

RioCan Elgin Mills Crossing, Richmond Hill, ON Q2 33,805 62.5%


Land use intensification Q2 8,989 100%

128,769


RioCan Centre Burloak, Oakville, ON Q1 46,567 50%

RioCan Elgin Mills Crossing, Richmond Hill, ON Q1 28,592 50%


RioCan Centre Kingston II, Kingston, ON Q1 15,336 100%

RioCan Centre Milton, Milton, ON Q1 4,600 100%

Land use intensification Q1 26,561 60% to 100%

180,377

399,025

• RioCan Beacon Hill, Calgary, Alberta – This centre, which is substantially complete, contains a total leasable areaof 787,000 square feet of new format retail space. Existing anchor tenants include Canadian Tire (94,000 squarefeet), Winners/HomeSense (51,000 square feet), The Brick (40,000 square feet), Future Shop (30,000 square feet),Linens ‘N’ Things (28,000 square feet), Sport Chek (28,000 square feet), Michaels (24,000 square feet), Mark’sWork Wearhouse (20,000 square feet), Golf Town (18,000 square feet) and Shoppers Drug Mart (17,500 squarefeet). In addition, Home Depot (108,000 square feet) and Costco (153,000 square feet) own their own premises and operate as part of the shopping centre. A 50% interest in this property was sold to CPPIB in September 2006(which is being closed in phases) and a 10% interest has been retained by Trinity, our development partner. Wecontinue to own a 40% interest in the site.

• RioCan Centre Burloak, Oakville, Ontario – The development aggregates 552,000 square feet of new format retailspace. Anchored by a 98,000 square foot Home Depot (retailer owned), the site also includes a 45,500 square footFamous Players (Cineplex) Theatre, a 51,000 square foot Longo’s Supermarket and a 34,500 square foot HomeOutfitters. We sold a 50% interest in the property in September 2006 to CPPIB which is being closed in phases.The centre is complete.

• RioCan Elgin Mills Crossing, Richmond Hill, Ontario – As discussed under Income Properties above, during the secondquarter of 2008, our ownership interest increased by 12.5% to 62.5% from 50%. The centre is substantially complete.


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.• RioCan Meadows, Edmonton, Alberta – Upon substantial completion, the site will contain a total leasable area of502,000 square feet. Existing anchor tenants include Winners, Staples/Business Depot, Mark’s Work Wearhouse,PetSmart, Best Buy, Reitmans, Sleep Country, Swiss Chalet, Montana’s and a Real Canadian Superstore (whichowns its own premises and is currently under development). In addition, a 98,500 square foot Home Depot (landlease) operates as part of the site. A 50% interest in this property was sold to the CPPIB in September 2006 whichis being closed in phases. The centre is expected to be substantially complete in the first quarter of 2009.

• RioCan Centre Kingston I & II, Kingston, Ontario – This new format retail centre comprises approximately 752,000square feet of gross leasable area. The first phase of the centre totals approximately 518,000 square feet and isanchored by a Home Depot (which owns its own premises) and also includes such retail tenants as Sears,Staples/Business Depot, Future Shop, Cineplex Odeon Cinemas, Sport Mart, Winners, HomeSense, Old Navy,Danier Leather, La Vie En Rose and Mexx. The second phase of the centre comprises approximately 234,000square feet and is tenanted by The Brick, Home Outfitters, Best Buy, TD Canada Trust, PetSmart, JYSK, Golf Townand East Side Mario’s, as well as a number of smaller national retailers. The centre is complete.

• RioCan Centre Milton, Milton, Ontario – This 31.55 acre site is currently being developed into a 291,000 squarefoot new format retail centre. The site is anchored by an 85,000 square foot Home Depot and a 35,000 square footPrice Chopper (Sobeys) both of which own their own sites but will operate as part of the centre. Additionaltenants include a 31,000 square foot Cineplex Odeon Cinemas and a 40,000 square foot Premier Fitness. The centre is substantially complete.

• Corbett Centre, Fredericton, New Brunswick – This 26 acre site, acquired by way of a 66-year long-term land lease,is currently being developed into a 471,000 square feet new format retail centre. The site is anchored by HomeDepot which owns its own store and operates as part of the overall site. In addition, other retailers includeMichaels, Winners, Dollarama and Petcetera. A Costco, which also owns its own store, will be developed in 2009.RioCan’s ownership interest in the property is 62.5%. The site is being developed with our partner, Trinity and isexpected to be substantially complete by the end of the second quarter of 2009.

As discussed under Vision and Business Strategy it is our focus to own properties mainly in high growth markets.The geographical diversification of our retail property portfolio on this basis is as follows:

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Toronto, Ontario 34.2%

Montreal, Quebec 10.4%

Ottawa, Ontario 8.9%

Calgary, Alberta 6.2%

Vancouver, British Columbia 3.9%

Edmonton, Alberta 2.8%

All other markets 33.6%








Rental revenue for the nine months ended September 30, 2008

NLA at September 30, 2008

NLA at September 30, 2007 Rental revenue for the nine months ended September 30, 2007















At September 30, 2008 our lease expiries for the portfolio by property type for the years ending December 31 are as follows:

Lease expiries

(in thousands, except psf and percentage amounts) Portfolio NLA 2008 (ii) 2009 2010 2011 2012

Square feet:

New format retail 14,840 118 755 999 1,408 1,086

Grocery anchored centre 6,879 107 831 912 987 1,057

Enclosed shopping centre 6,410 149 491 803 778 458

Non-grocery anchored centre 1,740 18 108 124 141 127

Urban retail 1,312 104 87 72 77 136

Office 1,583 34 182 273 336 63

Total 32,764 530 2,454 3,183 3,727 2,927

Square feet expiring/portfolio NLA 1.6% 7.5% 9.7% 11.4% 8.9%

Average net rent psf (i):

New format retail $ 15.86 $ 18.97 $ 17.40 $ 18.43 $ 16.64 $ 17.42

Grocery anchored centre 13.77 16.15 14.50 13.68 14.22 13.82

Enclosed shopping centre 11.07 13.22 14.76 9.88 10.60 14.00

Non-grocery anchored centre 12.42 21.67 12.66 14.46 13.30 13.02

Urban retail 20.10 15.32 26.43 28.70 21.60 32.00

Office 10.65 13.51 10.28 8.70 12.23 13.05

Total average net rent psf $ 14.32 $ 16.04 $ 15.47 $ 14.16 $ 14.32 $ 15.98

(i) Net rent is primarily contractual basic rent pursuant to tenant leases.(ii) Tenant lease expiries for the three months ending December 31, 2008.

Our portfolio leasing activity during the three and nine months ended September 30, 2008 is comprised of the following:

Three months ended Nine months endedSeptember 30, 2008 September 30, 2008

Average net Average net(in thousands, except psf amounts) Square feet rent psf Square feet rent psf

Renewals 712 $ 17.33 2,282 $ 14.36

New leasing on existing portfolio (i) 288 16.80 991 16.39

(i) Prior quarter figures have been reclassified to the current quarter’s presentation.

During the three months ended September 30, 2008 our portfolio leasing activity by property type is as follows:

New leasing on Renewals existing portfolio (i)


New format retail 264 $ 21.32 74 $ 24.78

Grocery anchored centre 244 14.28 74 15.07

Enclosed shopping centre 128 13.46 75 12.10

Non-grocery anchored centre 39 14.97 39 14.42

Urban retail 15 31.17 2 34.89

Office 22 20.61 24 14.68

Total 712 $ 17.33 288 $ 16.80

(i) Prior quarter figures have been reclassified to the current quarter’s presentation.


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During the nine months ended September 30, 2008 our portfolio leasing activity by property type is as follows:

New leasing on Renewals existing portfolio


New format retail 616 $ 19.77 337 $ 18.31

Grocery anchored centre 468 15.37 163 19.43

Enclosed shopping centre 835 10.02 313 12.82

Non-grocery anchored centre 151 15.01 67 15.58

Urban retail 137 11.41 15 27.30

Office 75 15.91 96 15.07

Total 2,282 $ 14.36 991 $ 16.39

During the third quarter we retained approximately 93.9% of our expiring leases at an average net rent increase of$1.89 per square foot. The components of our renewal activity for the three months ended September 30, 2008, whichincludes anchor tenants, by property type are as follows:

New Grocery Enclosed Non-groceryformat anchored shopping anchored Urban

(in thousands, except psf amounts) Total retail centre centre centre retail Office

Renewals at market rental rates:

Square feet expired 287 69 102 55 28 11 22

Average net rent psf $ 21.55 $ 30.10 $ 19.24 $ 16.81 $ 14.68 $ 31.57 $ 20.61

Increase in average net rent psf $ 3.37 $ 5.78 $ 2.00 $ 2.80 $ 0.97 $ 7.41 $ 4.60

Fixed rental rate options in favour of our tenants:

Square feet expired 425 195 142 73 11 4 –

Average net rent psf $ 14.47 $ 18.17 $ 10.68 $ 11.00 $ 15.73 $ 30.00 $ –

Increase in average net rent psf $ 0.88 $ 1.34 $ 0.54 $ 0.32 $ 1.33 $ – $ –

Total:




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During the first nine months of 2008 we retained approximately 84.1% of our expiring leases at an average net rentincrease of $1.50 per square foot. The components of our renewal activity for the first three quarters of 2008, whichincludes anchor tenants, by property type are as follows:

New Grocery Enclosed Non-groceryformat anchored shopping anchored Urban

(in thousands, except psf amounts) Total retail centre centre centre retail Office

Renewals at market rental rates:




Fixed rental rate options in favour of our tenants:

Square feet expired 1,411 468 180 595 54 114 –

Average net rent psf $ 10.78 $ 16.80 $ 10.33 $ 6.53 $ 13.94 $ 7.50 $ –

Increase in average net rent psf $ 0.63 $ 1.27 $ 0.54 $ 0.23 $ 0.98 $ – $ –

Total:

Square feet expired 2,282 616 468 835 151 137 75



Capital Expenditures on Income Properties

Capital spending for new property acquisitions, greenfield developments and the redevelopment of our existingproperties to create and/or extract additional value are expected to improve the overall earnings capacity of ourproperty portfolio. As a result, we do not expect such expenditures to be funded from cash flows from operatingactivities and do not consider such amounts as a key determinant in setting the amount we distribute to our unitholders.

Maintenance capital expenditures refer to capital expenditures that are necessary to maintain the existing earningscapacity of our property portfolio. Such expenditures are considered in determining the amount we distribute to ourunitholders and primarily consist of:

• Tenant installation costs.

Our portfolio requires ongoing investments of capital for tenant installation costs related to new and renewaltenant leases. During the nine months ended September 30, 2008 we incurred tenant installation costs ofapproximately $15 million, of which $3.2 million pertains to the office component lease up/renewals of the RioCanYonge Eglinton Centre (“YEC”). Tenant installation costs consist of tenant improvements and other leasing costs,including certain costs associated with our internal leasing professionals (primarily compensation costs).

Based on our income property portfolio at September 30, 2008 and our expectations for that portfolio, weestimate that for the next twelve months our annual investments of capital for tenant installation costs arebetween $20 million and $22 million. Included in the annualized leasing costs are approximately $2.8 millionrelating to the office component lease up/renewals of YEC.

Investments of capital for tenant installation costs for our income properties are dependent upon many factors,including, but not limited to, our lease maturity profile, unforeseen tenant bankruptcies and the location of ourincome properties.

• Recoverable and non-recoverable maintenance capital expenditures.

We also invest capital on a continuous basis to physically maintain our income properties. Typical costs incurred


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are for roof replacement programs and the repaving of parking lots. Tenant leases generally provide for our abilityto recover a significant portion of such costs from tenants over time as property operating costs. Where suchamounts are not recoverable under tenant leases, we expense or capitalize these amounts to income properties,as appropriate.

As our portfolio is located in Canada, the majority of such activities occur when weather conditions are favorable.As a result, these expenditures are not consistent throughout the year. The timing of such expenditures for ourwestern Canada properties is further impacted by the availability of construction trades.

Expenditures for recoverable and non-recoverable maintenance capital for our income properties are as follows:


Maintenance capital expenditures:

Recoverable from tenants $ 1,578 $ 2,731 $ 3,732 $ 4,469

Non-recoverable 1,404 1,095 3,271 2,659

$ 2,982 $ 3,826 $ 7,003 $ 7,128

For the nine months ended September 30, 2008, property operating costs include amortization of deferredmaintenance capital expenditures recoverable from tenants of $3.1 million ($1.1 million for the three monthsended September 30, 2008) as compared to $2.5 million for the same period of 2007 ($900,000 for the threemonths ended September 30, 2007).

Based on our income property portfolio at September 30, 2008 and our expectations for that portfolio, we estimatethat for the next twelve months our recoverable annual maintenance capital expenditures will be between $7 millionand $9 million, and our non-recoverable annual maintenance capital expenditures will be between $3.5 million and $5.5 million.

Maintenance capital expenditures for our income properties are dependent upon many factors, including, but notlimited to, the number, age and location of our income properties. At September 30, 2008 the estimated weightedaverage age of our income property portfolio was 13.8 years.

Co-Ownership Activities Included in Income Properties

Co-ownership activities represent real estate investments in which RioCan owns an undivided interest and where wehave joint control with our partners. We record our proportionate share of assets, liabilities, revenue and expenses ofall co-ownerships in which we participate.

Our joint venture platforms are important to RioCan not only for their future potential but also in carrying forward ourstrategy of creating reliable, long term third party streams of fee income from long-lived income properties in which weown an interest. RioCan generally provides property management, development and leasing services for all propertiesthat are owned through co-ownership activities.

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Summary financial information relating to proportionately consolidated co-ownerships is as follows:

Total Assets by Co-ownership(thousands of dollars) September 30, 2008 December 31, 2007

RioKim $ 624,658 $ 558,657

Trinity 379,936 305,238

CPPIB 79,595 54,251

CPPIB/Trinity 67,415 44,855

Devimco 154,284 148,225

Other 139,470 133,050

$ 1,445,358 $ 1,244,276

Net Operating Income byCo-ownership (see Revenues) Three months ended September 30, Nine months ended September 30,(thousands of dollars) 2008 2007 2008 2007

RioKim $ 16,461 $ 14,990 $ 45,914 $ 44,438

Trinity 6,502 5,747 19,148 16,463

CPPIB 1,743 138 3,925 243

CPPIB/Trinity 942 317 2,042 909

Devimco 2,667 1,149 7,922 3,453

Other 2,963 2,997 8,964 9,583

$ 31,278 $ 25,338 $ 87,915 $ 75,089

The above co-ownership groupings may include a component that is co-owned with multiple partners.

RioKim:

We have joint investments with Kimco, a U.S. REIT listed on the New York Stock Exchange. Highlights of our jointinvestments (“RioKim”) include:

• As discussed above, we acquired a portfolio on a 50/50 basis with Kimco through RioKim II. RioKim II is a non-exclusive partnership with Kimco. Additional properties may be acquired under this venture as opportunitiesarise but there are currently no further acquisitions being contemplated and RioCan is under no obligation withrespect to any further additional acquisitions.

• At September 30, 2008 the aggregate joint investments in RioKim and RioKim II comprise interests in 45 propertiesaggregating approximately 9.2 million square feet (8.9 million square feet is owned on a 50/50 basis and 300,000square feet is owned on a 1/3 basis by each of RioCan, Kimco and Trinity). As a normal part of our business, RioCanprovides guarantees on behalf of third parties, including certain partners and co-owners for their share of mortgagespayable. At September 30, 2008 RioCan, on behalf of Kimco, provided guarantees on approximately $255.2 millionof mortgages payable for Kimco’s share of properties held through RioKim, for which we receive fees (see OffBalance Sheet Liabilities and Guarantees).

Trinity:

Our joint investments with Trinity include interests in seven completed income properties aggregating approximately2.5 million square feet, and greenfield development projects which upon substantial completion will comprise 3.8 millionsquare feet. Our co-ownership interests range from 31.25% to 75%. Our relationship with Trinity is strategic as alarge component of our development pipeline was sourced through this partner. As part of the relationship, we lend to


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Trinity a substantial portion of their development costs on assets we jointly develop, amounting to $135.9 million atSeptember 30, 2008, which are reflected in mortgages receivable. These mortgages bear contractual interest ratesranging from 5.25% to 8% per annum, and are typically due upon substantial completion of the development. We alsopay Trinity certain fees for construction management and leasing. Upon completion, we are the property and leasingmanager for these assets. The completed income properties in this joint investment were acquired as part of ourdevelopment program. At September 30, 2008 RioCan, on behalf of Trinity, provided guarantees on approximately$68.1 million of mortgages payable for their share of properties held through the co-ownerships, for which wereceive fees (see Off Balance Sheet Liabilities and Guarantees).

CPPIB:

We entered into an agreement during 2006 for the sale of interests (ranging from 22.5% to 50%) ultimately comprisingapproximately 499,000 square feet in three income properties to CPPIB. These dispositions are being completed instages as leasable area is occupied by tenants. The sale prices are determined by valuing such areas at predeterminedmultiples of net operating income, plus predetermined per square foot amounts for additional buildable density. AtSeptember 30, 2008 the estimated remaining sale proceeds under this agreement for the years ending December 31are: 2008 – $11 million (representing 28,000 square feet); and 2009 – $1.6 million (representing 3,000 square feet). Duringthe nine months ended September 30, 2008, $38 million of disposition proceeds were recognized under this agreementand the resulting gains have been included in gains on properties held for resale (see Properties Held for Resale).

One of the above three income properties is also co-owned with Trinity (see CPPIB/Trinity discussion below). AtSeptember 30, 2008 the joint CPPIB investments comprise interests in two properties which aggregate approximately800,000 square feet.

CPPIB/Trinity:

In June 2008 RioCan and Trinity sold a 50% non-managing interest in two developments to CPPIB. The two developmentsare Jacksonport located in Calgary, Alberta and St. Clair Avenue and Weston Road located in Toronto, Ontario. Thetotal development cost of the two projects is expected to aggregate approximately $375 million. RioCan and Trinityeach retained a 25% ownership interest in these two developments. RioCan recognized a $15.4 million gain on propertiesheld for resale during the second quarter as a result of this transaction.

At September 30, 2008, our joint investments with CPPIB/Trinity include interests in one income property whichaggregates approximately 528,000 square feet, and the two above mentioned development projects which uponcompletion will comprise approximately 1.7 million square feet. RioCan’s co-ownership interests range from 25% to 40%.

Additionally, in October 2008 CPPIB purchased a 37.5% non-managing ownership interest in East Hills, Calgary, Alberta.The purchase price is $28.5 million subject to holdback conditions. RioCan owned 50% of phase I and III while Trinityand the original vendor each owned 25%. RioCan, Trinity and the original vendor reduced their ownership intereststo 37.5%, 12.5% and 12.5% respectively, with CPPIB acquiring a 37.5% non-managing ownership interest.

Devimco:

Our 50% joint investment with Devimco, and its Quebec based pension fund partners, comprises approximately 1.1million square feet. At September 30, 2008 RioCan, on behalf of Devimco, provided a guarantee on approximately $6.8million of a mortgage payable for their share of the property held through the co-ownership, for which we received afee (see Off Balance Sheet Liabilities and Guarantees).

Devimco completed the sale of a 20% interest in Quartier DIX30 to a Quebec based pension fund. As part of thistransaction, Devimco’s option requiring RioCan to purchase its 50% co-ownership interest has been terminated.

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Other joint investments:

Other joint investments comprise interests in eight properties aggregating approximately 3.4 million square feet. Our ownership interests range from 20% to 50% with a variety of partners, including Sun Life, Canada Mortgage and Housing Corporation and First Gulf Corporation, with our owned interest comprising 1.3 million square feet. AtSeptember 30, 2008 RioCan, on behalf of these co-owners, provided guarantees on approximately $35.9 million ofmortgages payable for such co-owners’ share of properties held through the co-ownerships, for which we receivefees (see Off Balance Sheet Liabilities and Guarantees).

Equity Investments in Income Properties

Equity investments are comprised of real estate investments where we exercise significant influence (but not controlor joint control) over the investment, and are accounted for using the equity method. This method adjusts the originalcost of our investment for RioCan’s share of net earnings, capital advances and distributions receivable or received.Equity accounted for investments are $8.3 million at both September 30, 2008 and December 31, 2007.

We have a 15% equity interest ($5.6 million at September 30, 2008) in RioCan Retail Value L.P. (“RRVLP”). RRVLP wasformed in 2003 with a 60% participation by the Teachers Insurance and Annuity Association-College RetirementEquities Fund and a 25% participation by the Ontario Municipal Employees Retirement System. The business ofRRVLP is to acquire underperforming shopping centres in Canada that have the potential for significant value-added,redevelopment or repositioning opportunities and then to sell these assets over a number of years. RRVLP providesRioCan with a vehicle that enables it to benefit as a minority investor in pursuing value-added opportunities and toearn asset management, property management, development and leasing fees in addition to incentive compensationfor out-performance.

By December 31, 2005 the partners had committed the full capital resources of RRVLP, which capital was invested in 12 centres aggregating approximately 3.4 million square feet. Ten properties have been sold (which gains werereported as properties held for resale) as at September 30, 2008, of which one property was sold during the thirdquarter of 2008 (for which RioCan’s 15% share of disposition gains was $1.5 million). The partners have agreed tomonetize the two remaining investments in RRVLP by November 2009.

Properties Under Development

We have a greenfield development program primarily focused on new format and urban retail centres. The provisionsof our Declaration have the effect of limiting direct and indirect investments (net of related mortgage debt) in non-income producing properties to no more than 15% of our Adjusted Unitholders’ Equity of the Trust (defined in theDeclaration as unitholders’ equity plus accumulated amortization of income properties as recorded by us andcalculated in accordance with GAAP). We undertake such developments on our own, or on a co-ownership basis withestablished developers to whom we generally provide mezzanine financing. With some exceptions, from time to time,for land in the high growth markets, generally we will not acquire or fund significant expenditures for undeveloped landunless it is zoned and an acceptable level of space has been pre-leased/pre-sold. An advantage of unenclosed, newformat retail is that it lends itself to phased construction keyed to leasing levels, which avoids the creation of meaningfulamounts of vacant space.

As a normal part of our business, we also expand and redevelop (components of) existing shopping centres to createand/or extract additional value (see Vision and Business Strategy).

The costs related to these (re)development activities are comprised of acquisition costs, third party and internal costsdirectly related to the development and initial leasing of the properties, including applicable salaries and other directcosts, property taxes, interest on both specific and general debt, and all incidental property revenue and expenses.


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The change in our net carrying amount is as follows:


Properties under development:Balance, beginning of period $ 318,155 $ 333,174 $ 316,055 $ 228,912 Acquisitions – 18,763 36,062 57,576 Development expenditures 38,683 23,849 112,232 95,071 Completion of properties

under development (56,363) (21,940) (165,925) (67,857)Transfers from income properties 7,815 2,746 32,841 42,890

Dispositions and other (i) (342) – (23,317) –

Properties under development, end of period 307,948 356,592 307,948 356,592

Properties held for resale:Balance, beginning of period 59,559 59,815 74,105 29,281 Acquisition and development

expenditures 6,595 17,818 52,053 58,364

Dispositions (6,012) (7,203) (66,016) (17,215)

Properties held for resale, end of period 60,142 70,430 60,142 70,430

Balance, end of period $ 368,090 $ 427,022 $ 368,090 $ 427,022

(i) Refer to footnote discussion in Income Properties.

At September 30, 2008 we have ownership interests in 14 greenfield development projects that will upon completioncomprise approximately 8.8 million square feet, of which our ownership interest will be approximately 3.5 millionsquare feet. The change in our owned interest in our greenfield development pipeline is as follows:

Three months ended September 30, Nine months ended September 30,(thousands of square feet) 2008 2007 2008 2007

Properties under development:Balance, beginning of period 3,249 2,986 3,044 2,785 Acquisitions – 210 1,156 506 Substantial completion of greenfield

development projects (582) (321) (1,576) (321)Other (8) 101 35 6

Properties under development, end of period 2,659 2,976 2,659 2,976

Properties held for resale (i):Balance, beginning of period 851 334 486 207 Acquisitions – 200 646 348 Substantial completion of greenfield

development projects – – – (17)Dispositions (28) (99) (477) (99)Other (15) (3) 153 (7)

Properties held for resale, end of period 808 432 808 432

Balance, end of period 3,467 3,408 3,467 3,408

(i) As discussed under Income Properties, Co-ownership Activities, we are disposing of 499,000 square feet of certain development propertiesto CPPIB on a forward sale basis. These square footage amounts relating to the forward sales have not been included in the aboveproperties held for resale square footage amounts.

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Properties Under Development

Developments that were previously completed are discussed above under Income Properties. During the first ninemonths of 2008 our owned interest in developments that we acquired during the first nine months of 2008, will uponsubstantial completion, comprise 1.8 million square feet, and include the following properties:

• Jacksonport, located in Calgary, Alberta is a 105 acre development that will consist predominately of new formatretail. Negotiations with a number of national anchor tenants are well advanced and strong expressions of interesthave been received from a wide range of tenants. The aggregate cost of the development is expected to beapproximately $183 million and upon completion, will feature approximately 1.1 million square feet of retail space.Site servicing commenced in June 2008 and tenant turnover is expected to commence by June 2010, with overallproject completion by late 2011. As discussed above, during the second quarter RioCan and Trinity sold a 50%interest in the development to CPPIB, each retaining a 25% ownership interest in the development.

• St. Clair and Weston benefits from a well-established urban node at the intersection of St. Clair Avenue andWeston Road in the “Stockyards” area of Toronto, Ontario. The development features over 19 acres, with 1,182feet of frontage on Weston Road and 828 feet of frontage on St. Clair Avenue West. This urban retail project willultimately feature approximately 570,000 square feet of retail space. The project concept features a unique urban,two-storey retail prototype that has been successfully utilized in the United States. A number of national tenantshave expressed interest in the site. The aggregate cost of the development is expected to be approximately $192million. Pending municipal approvals, it is anticipated that site servicing will commence in June 2009 and overallproject completion by late 2010. As discussed above, during the second quarter RioCan and Trinity sold a 50%interest in the development to CPPIB, with each retaining a 25% ownership interest in the development.

• East Hills, Calgary, Alberta, consists of three phases. Phase I and III comprise approximately 115 acres, and phase IIcomprises approximately 40 acres. The acquisition of phase II is expected to close in the third quarter of 2009. Theaggregate cost of the total development is expected to be approximately $344 million. Upon completion, it is expectedthat the site will feature almost 1.6 million square feet of new format retail space, with substantial completion of thedevelopment to be staggered between late 2010 (phase I) and late 2012 (phase III). In October 2008 RioCan, Trinityand the original vendor reduced their ownership interests in phases I and III to 37.5%, 12.5% and 12.5% respectively,with CPPIB acquiring a 37.5% non-managing ownership interest.

• Our site on Hazeldean Road, Ottawa, Ontario, is currently being developed into a 389,000 square foot new formatretail centre as a joint venture with Trinity and Shenkman Corporation. The centre is expected to be substantiallycomplete in the fourth quarter of 2010.

• Windfield Farms, located in Oshawa, Ontario is a 157 acre site intended to be developed into a 1.2 million squarefoot regional new format retail centre. RioCan’s ownership interest in the property is 33.3%. The site is beingdeveloped with two partners with the first phase expected to be substantially complete by 2014.

Other development activities (see also Income Properties) that occurred during 2008 include:

• Queen and Portland is situated on a one acre site in downtown Toronto, Ontario located in an area bound byRichmond Street to the south, Portland Street to the east, and Queen Street to the north. This site will be developedinto a mixed-use building featuring a four-storey residential component as well as approximately 91,000 square feetof retail space on three storeys. The property will be anchored by a 75,000 square foot Home Depot. The site will bedeveloped with Tribute Communities, which owns the residential component. RioCan will own and manage the retailcomponent of the development. The retail component is expected to be substantially complete by the end of thesecond quarter of 2010. A total of 90 residential units are available, of which, 53 (59%) are sold.

• Construction has commenced on our development located at the northeast corner of Avenue Road and FairlawnAvenue in one of the busiest nodes in the City of Toronto. The Avenue Road development comprises over 1.5 acres.The existing retail facility will be redeveloped to accommodate a mixed-use building featuring a 5.5 storey residentialcomponent, along with 25,000 square feet of single storey retail street-front space. The residential component, whichis owned, developed and marketed by Tribute Communities, has a total of 80 units, of which, 63 (79%) are sold.RioCan will manage all aspects of the retail component of the development. The retail component of the project isexpected to be completed by the fourth quarter of 2010.


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• We entered into two land lease agreements with Lowe’s Companies Canada (“Lowe’s”) to open two new homeimprovement stores in Ontario. The first agreement to lease is for a Lowe’s store that will form part of our greenfielddevelopment site situated at Taunton Road and Garrard Road in Whitby, Ontario. Upon completion, the developmentwill feature Lowe’s, a Canadian chartered bank and two additional commercial retail buildings. Site work hasalready commenced with an anticipated opening date of the Lowe’s store in early 2009.

The second agreement to lease is for a Lowe’s store that will form part of an existing property, RioCan WardenCentre, located at Warden Avenue and Eglinton Avenue in Toronto, Ontario, which is adjacent to our developmentproperty at Eglinton Avenue and Warden Avenue. The centre is a 250,000 square foot new format retail centrefeaturing a number of national retailers. In order to accommodate Lowe’s, the former Wal-Mart store wasdemolished and a new Lowe’s store will be constructed in its place with an anticipated opening date in 2009.

• RioCan Centre Vaughan, Vaughan, Ontario – The development, a joint venture project with Trinity and StrathallenCapital Corp., is located at the southwest corner of Highway 27 and Langstaff Road at the Highway 427 Extension.RioCan’s co-ownership interest is 31.25%. Upon full completion, this new format retail centre will compriseapproximately 520,000 square feet of leasable area. Phase one of the project features approximately 262,000square feet. A Wal-Mart Supercentre (land lease) will occupy approximately 213,000 square feet and the remainderof the phase one retail space has been pre-leased to a number of national tenants. Construction of the Wal-MartSupercentre is underway with an anticipated opening of January 2009.

On an individual development basis, the yields are estimated to be approximately 7% to 11%. On an aggregate basiswe expect our development projects to generate a weighted average net operating income yield of 8.5% to 9.5%.Capital expenditures for greenfield development projects for the fourth quarter through the end of 2009 are estimatedto be between $110 million and $115 million (net of construction financing). In addition, we expect to fund between$60 million to $70 million of certain partners’ costs under our mezzanine lending program, primarily Trinity.

Our estimated development project square footage and development costs are subject to change, which may bematerial, as assumptions regarding, among other items, anchor tenants, land sales to shadow anchors, tenant rents,building sizes, project completion timelines and project costs, are updated periodically based on revised site plans,our cost tendering process and continuing tenant negotiations.

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Highlights of our development pipeline at September 30, 2008 are as follows:

As at September 30, 2008 Estimated square feet upon completion of the development project

RioCan’s RioCan’s interest

Total Retail and Income Under(thousands of square feet, RioCan’s % estimated owned partners’ producing development Total Totalexcept percentage amounts) ownership development anchors (iv) interests (“IPP”) (“PUD”) RioCan partner

Riocan owned:

Barrie Essa Road, Barrie, ON (i) 100% 288 – 288 72 216 288 –

Eglinton Avenue & Warden 100% 163 – 163 – 163 163 – Avenue, Toronto, ON

Queen Street & Portland 100% 91 – 91 – 91 91 – Street, Toronto, ON

RioCan Renfrew Centre, 100% 210 74 136 45 91 136 – Renfrew, ON

Taunton Road & Garrard Road, 100% 147 – 147 – 147 147 – Whitby, ON (i)

899 74 825 117 708 825 –

Co-ownerships:

Trinity

Clappison's Crossing, Hamilton, ON 50% 323 – 323 52 110 162 161

Corbett Centre, Fredericton, NB 62.5% 471 231 240 48 102 150 90

Gravenhurst, ON 33.3% 311 – 311 – 104 104 207

Hazeldean Road, Ottawa, ON 33.3% 389 121 268 – 89 89 179

Highway 401 & Thickson Road 25% 205 – 205 25 26 51 154 – Phase I, Whitby, ON

March Road, Ottawa, ON (i) 60% 103 50 53 – 32 32 21

Paris, ON 62.5% 174 – 174 – 109 109 65

RioCan Centre Vaughan, 31.25% 520 – 520 – 162 162 358 Vaughan, ON

Stouffville, ON 34% 179 – 179 – 61 61 118

2,675 402 2,273 125 795 920 1,353

CPPIB

RioCan Meadows, 50% 502 165 337 130 39 169 168 Edmonton, AB (ii)

CPPIB/Trinity

East Hills, Calgary, AB (i) (iii) 50% 1,586 – 1,586 – 793 793 793

Jacksonport, Calgary, AB 25% 1,141 427 714 – 178 178 536

St. Clair Avenue and Weston 25% 570 – 570 – 143 143 427Road, Toronto, ON

3,297 427 2,870 – 1,114 1,114 1,756

Other

Westney Road & Taunton Road, 20% 156 – 156 – 31 31 125 Ajax, ON (i)

Windfield Farms, Oshawa, ON (i) 33.3% 1,225 – 1,225 – 408 408 817

1,381 – 1,381 – 439 439 942

8,754 1,068 7,686 372 3,095 3,467 4,219

(i) Included (or a portion thereof) in properties held for resale.(ii) As discussed under Income Properties, Co-ownership Activities, 50% of this development is subject to a forward sale to CPPIB. As a result,

only RioCan’s interest is reported.(iii) Ownership percentage reflects RioCan’s share at September 30, 2008. In October 2008 RioCan, Trinity and the original vendor reduced their

ownership interests to 37.5%, 12.5% and 12.5% respectively, with CPPIB acquiring a 37.5% non-managing ownership interest. (iv) Retailer owned anchors include both completed and sale transactions under contract.


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As at September 30, 2008 Anticipateddate of

(thousands of square feet, RioCan’s % Leasing % Leasing substantial Anticipatedexcept percentage amounts) ownership activity (iv) activity completion anchors (v)

Riocan owned:

Barrie Essa Road, Barrie, ON (i) 100% 219 76% Q2 2009 Loblaws, Lowe's

Eglinton Avenue & Warden Avenue, 100% 135 83% Q2 2009 ZellersToronto, ON

Queen Street & Portland Street, 100% 75 82% Q2 2010 Home DepotToronto, ON

RioCan Renfrew Centre, Renfrew, ON 100% 53 39% Q3 2010 Loblaws*, Staples

Taunton Road & Garrard Road, 100% 147 100% Q1 2009 Lowe'sWhitby, ON (i)

629 76%

Co-ownerships:

Trinity

Clappison's Crossing, Hamilton, ON 50% 114 35% Q2 2009 Rona

Corbett Centre, Fredericton, NB 62.5% 88 37% Q2 2009 Home Depot*, Costco*

Gravenhurst, ON 33.3% 125 40% Q2 2009 Canadian Tire, Sobeys

Hazeldean Road, Ottawa, ON 33.3% 37 14% Q4 2010

Highway 401 & Thickson Road 25% 99 48% Q4 2009 Rona– Phase I, Whitby, ON

March Road, Ottawa, ON (i) 60% – – Q2 2010 Sobeys*

Paris, ON 62.5% – – Q4 2009

RioCan Centre Vaughan, 31.25% 246 47% Q1 2010 Wal-MartVaughan, ON

Stouffville, ON 34% 8 4% Q4 2009

717 32%

CPPIB

RioCan Meadows, Edmonton, AB (ii) 50% 296 88% Q1 2009 Loblaws*, Home Depot, Staples,Winners, Best Buy

CPPIB/Trinity

East Hills, Calgary, AB (i) (iii) 50% – – Q4 2010

Jacksonport, Calgary, AB 25% – – Q4 2011

St. Clair Avenue and Weston Road, 25% – – Q4 2010 Toronto, ON

– –

Other

Westney Road & Taunton Road, Ajax, ON (i) 20% 8 5% Q1 2010

Windfield Farms, Oshawa, ON (i) 33.3% – – Q4 2014 (vi)

8 1%

1,650 21%

(i) Included (or a portion thereof) in properties held for resale.(ii) As discussed under Income Properties, Co-ownership Activities, 50% of this development is subject to a forward sale to CPPIB. As a result,

only RioCan’s interest is reported.(iii) Ownership percentage reflects RioCan’s share at September 30, 2008. In October 2008 RioCan, Trinity and the original vendor reduced their

ownership interests to 37.5%, 12.5% and 12.5% respectively, with CPPIB acquiring a 37.5% non-managing ownership interest. (iv) Leasing activity includes leasing that is conditional on receiving municipal approvals and meeting construction deadlines.(v) Anchors that are retailer owned are designated with an asterisk (*).(vi) The first phase is expected to be substantially complete by Q4 2014.

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As at September 30, 2008

Estimated Amount Amount Land Remaining(thousands RioCan’s % project cost included in included in Partners’ RioCan’s Partners’ acquisition Advanced to beof dollars) ownership (iv) IPP PUD Total interest Total interest interest Total VTB(v) to date advanced

RioCan owned:

Barrie Essa Road, 100% $ 44,427 $ 9,759 $ 15,639 $ 25,398 $ – $ 25,398 $ 19,029 $ – $ 19,029 $ – $ – $ –Barrie, ON (i)

Eglinton Avenue 100% 37,231 – 16,708 16,708 – 16,708 20,523 – 20,523 – – –& Warden Avenue, Toronto, ON

Queen Street & 100% 45,854 – 14,258 14,258 – 14,258 31,596 – 31,596 – – –Portland Street, Toronto, ON

RioCan Renfrew 100% 28,979 8,591 4,514 13,105 – 13,105 15,874 – 15,874 – – – Centre,Renfrew, ON

Taunton Road & 100% 12,950 – 9,235 9,235 – 9,235 3,715 – 3,715 – – – Garrard Road, Whitby, ON (i)

169,441 18,350 60,354 78,704 – 78,704 90,737 – 90,737 – – –

Co-ownerships:

Trinity

Clappison's Crossing, 50% 50,733 9,613 4,094 13,707 13,707 27,414 11,660 11,659 23,319 – – –Hamilton, ON

Corbett Centre, 62.5% 46,577 9,724 2,665 12,389 7,431 19,820 16,723 10,034 26,757 – 7,562 27,438Fredericton, NB

Gravenhurst, ON 33.3% 60,627 – 6,223 6,223 12,447 18,670 13,986 27,971 41,957 – – (vi)

Hazeldean Road, 33.3% 63,050 – 5,620 5,620 11,240 16,860 15,397 30,793 46,190 – – –Ottawa, ON

Highway 401 & 25% 40,465 4,679 741 5,420 16,260 21,680 4,696 14,089 18,785 6,500 – –Thickson Road – Phase I, Whitby, ON

March Road, 60% 16,332 – 3,746 3,746 2,497 6,243 6,053 4,036 10,089 – – –Ottawa, ON (i)

Paris, ON 62.5% 35,947 – 1,336 1,336 802 2,138 21,131 12,678 33,809 – – –

RioCan Centre 31.25% 72,452 – 13,084 13,084 33,629 46,713 8,044 17,695 25,739 2,710 14,611 10,889Vaughan, Vaughan, ON

Stouffville, ON 34% 43,492 – 6,328 6,328 12,282 18,610 8,459 16,423 24,882 – – –

429,675 24,016 43,837 67,853 110,295 178,148 106,149 145,378 251,527 9,210 22,173 38,327

CPPIB

RioCan Meadows, 50% 34,196 22,304 7,195 29,499 – 29,499 4,697 – 4,697 – – –Edmonton, AB (ii)

CPPIB/Trinity

East Hills, 50% 343,976 – 19,587 19,587 19,587 39,174 152,401 152,401 304,802 21,204 – –Calgary, AB (i) (iii)

Jacksonport, 25% 183,366 – 11,928 11,928 35,025 46,953 34,103 102,310 136,413 – – –Calgary, AB

St. Clair Avenue 25% 192,179 – 6,996 6,996 20,987 27,983 41,049 123,147 164,196 – – –and Weston Road, Toronto, ON

719,521 – 38,511 38,511 75,599 114,110 227,553 377,858 605,411 21,204 – –

Other

Westney Road & 20% 37,222 – 2,528 2,528 10,112 12,640 4,917 19,665 24,582 – – –Taunton Road,Ajax, ON (i)

Windfield Farms, 33.3% 195,723 – 9,744 9,744 19,489 29,233 55,497 110,993 166,490 24,000 – –Oshawa, ON (i)

232,945 – 12,272 12,272 29,601 41,873 60,414 130,658 191,072 24,000 – –

$1,585,778 $ 64,670 $ 162,169 $ 226,839 $ 215,495 $ 442,334 $ 489,550 $ 653,894 $1,143,444 $ 54,414 $ 22,173 $ 38,327

(i) Included (or a portion thereof) in properties held for resale.(ii) As discussed under Income Properties, Co-ownership Activities, 50% of this development is subject to a forward sale to CPPIB. As a result, only RioCan’s

interest is reported.(iii) Ownership percentage reflects RioCan’s share at September 30, 2008. In October 2008 RioCan, Trinity and the original vendor reduced their ownership

interests to 37.5%, 12.5% and 12.5% respectively, with CPPIB acquiring a 37.5% non-managing ownership interest. (iv) Proceeds from sales to shadow anchors reduce estimated project costs.(v) At the acquisition of the land, the vendor granted RioCan and certain co-owners a vendor-take-back mortgage (“VTB”) outside of the co-ownership.(vi) In October 2008 we obtained $31.5 million of construction financing on this asset.

RioCan’s Interest


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Acquisition and development expenditures incurred to dateEstimated remaining construction

expenditures to complete Development financing


Properties Held for Resale

• As discussed above (see Vision and Business Strategy), we will continue our strategy of leveraging our in-housereal estate expertise by pursuing opportunities where value-added potential exists, but the resulting assets wouldnot be core investments or will be owned on a joint basis with partners. Prior to 2011, we will isolate those activitiesthat generate this type of income and review how best to restructure so as to continue these activities in a taxableentity or discontinue such activities if appropriate, with the purpose of ensuring RioCan will comply with therequirements of Bill C-52. Properties held for resale are properties acquired or developed for which we have nointention of their being used on a long term basis or plan to reduce our interest through the sale to a partner. Ourplan is to dispose of all or part of such properties in the ordinary course of business. We expect to earn a return onthese assets through a combination of property operating income earned during the relatively short holding period(which is included in net earnings) and sales proceeds. No amortization is recorded on properties held for resale.

Properties held for resale are comprised of:

• 808,000 square feet included in our greenfield development pipeline;

• 36,000 square feet built and available for sale;

• The remaining 31,000 square feet relating to our forward sales to CPPIB relating to RioCan Centre Burloak,RioCan Meadows and RioCan Beacon Hill; and

• Land use intensification activities. As discussed earlier in this MD&A, land use intensification opportunities arisefrom the fact that retail centres are generally built with lot coverage of approximately 25% of the underlying land;therefore, particularly in urban markets, we can obtain additional density (retail or otherwise) on our existingproperty portfolio and, since we already own the underlying land, are able to achieve relatively high returns on the sale of non-retail use density.

The components of gains on properties held for resale are as follows:


Properties acquired or (re)developed by us for resale without partners and co-owners $ (212) $ 2,778 $ 1,331 $ 17,126

Properties acquired or (re)developed for resale with partners and co-owners 1,684 1,611 19,099 3,962

$ 1,472 $ 4,389 $ 20,430 $ 21,088

As discussed above under Income Properties, Co-ownership Activities, during the second quarter of 2008 werecorded a $15.4 million gain on the sale of interests in two development assets to CPPIB. During the third quarterwe recognized gains of $1.5 million primarily relating to our share of gains from RRVLP as a result of the sale of one of its properties, which was offset in part by an adjustment related to the estimated development costs ondevelopment interests previously sold.

During the first three quarters of 2007 we recorded $11.4 million in gains relating to our land use intensification activities,$4.1 million gain on the sale of interests in our three development assets to CPPIB, and $2.9 million relating to our shareof gains from RRVLP.

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Mortgages and Loans Receivable

Our Declaration contains provisions that have the effect of limiting the aggregate value of the investment by us inmortgages (other than mortgages taken back by us on the sale of our properties) up to a maximum of 30% of ourAdjusted Unitholders’ Equity. Additionally, we are limited to the amount of capital we can invest in non-incomeproducing properties to no more than 15% of the Adjusted Unitholders’ Equity, which limitation applies to both ourgreenfield development projects and mortgages receivable to fund our co-owners’ share of such developments(herein referred to as mezzanine financing).

Mortgages and loans receivable are comprised of the following:

As at September 30 2008 2007

Mezzanine financing to co-owners $ 135,877 $ 89,313

Vendor-take-back and other 43,310 99,857

$ 179,187 $ 189,170

Mortgages and loans receivable for mezzanine financing to co-owners bear interest at contractual rates rangingbetween 5.25% and 8% per annum with a weighted average quarter end rate of 7.11% per annum. These mortgagesand loans receivable from co-owners mature between 2008 and 2015. Prior to maturity, payments on these mortgagesand loans receivable from co-owners will be made from the cash flows generated from operating and capitaltransactions relating to the underlying properties.

The net increase in mortgages and loans receivable for mezzanine financing to co-owners is consistent with theincrease in greenfield development activities with our partners. Transactions with co-owners subsequent to theformation of a co-ownership are considered to be related party transactions under GAAP.

Vendor-take-back and other mortgages and loans receivable bear interest at contractual rates varying from 0% to 7% perannum with a weighted average quarter end rate of 3.99% per annum.

At September 30, 2008 mortgages and loans receivable bear interest at contractual rates ranging between 0% and8% per annum with a weighted average quarter end rate of 6.35% per annum, and mature between 2008 and 2015.Future repayments are as follows:

Mezzanine Vendor-financing take-back

(thousands of dollars) to co-owners and other Total

Year ending December 31: 2008 (i) $ 46,059 $ 11,122 $ 57,181

2009 16,242 19,134 35,376

2010 22,321 13,516 35,837

2011 13,783 – 13,783

2012 19,310 – 19,310

Thereafter 18,162 – 18,162

Contractual mortgages and loans receivable 135,877 43,772 179,649

Unamortized differential between contractual and market interest rates on mortgages and loans receivable – (462) (462)

$ 135,877 $ 43,310 $ 179,187

(i) The 2008 principal maturities include $45.6 million of mortgages and loans receivable that are due on demand.


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The changes in the carrying amount of our mortgages and loans receivable are as follows:


Balance, beginning of period $ 206,724 $ 170,703 $ 211,662 $ 139,607

Principal advances (i) 37,452 21,723 109,074 47,249

Mortgages and loans taken back on property dispositions – 6,525 306 18,036

Principal repayments (i) (65,475) (10,238) (149,258) (18,731)

Interest receivable 948 1,638 1,933 4,190

Other (ii) – – 5,932 –

Contractual mortgages and loans receivable 179,649 190,351 179,649 190,351

Unamortized differential between contractual and market interest rates on mortgages and loans receivable (462) (1,181) (462) (1,181)


(i) Advances and repayments related to properties held for resale are included in cash flows from operating activities (see Distributions toUnitholders below). All other such amounts are included in cash flows used in investing activities.

(ii) Refer to footnote discussion in Income Properties.

Capital Structure

We define capital as the aggregate of unitholders’ equity and debt. Our capital management framework is designed tomaintain a level of capital that: complies with investment and debt restrictions pursuant to our Declaration; complieswith existing debt covenants; enables us to achieve target credit ratings; funds our business strategies; and buildslong-term unitholder value. The key elements of our capital management framework are approved by our unitholdersas related to the Trust’s Declaration and by our Board of Trustees (“Board”) through their annual review of ourstrategic plan and budget, supplemented by periodic Board and Board committee meetings. Capital adequacy ismonitored by us by assessing performance against the approved annual plan throughout the year, which is updatedaccordingly, and by monitoring adherence to investment and debt restrictions contained in the Declaration and debtcovenants (see Note 18 to our interim consolidated financial statements).

Our capital structure is as follows:

Increase(thousands of dollars, except percentage amounts) September 30, 2008 December 31, 2007 (decrease)

Capital:

Mortgages payable $ 2,351,144 $ 2,251,506 $ 99,638

Debentures payable 874,874 983,742 (108,868)

Unitholders’ equity 1,780,274 1,677,732 102,542

Total capital $ 5,006,292 $ 4,912,980 $ 93,312

Debt to Aggregate Assets ratio (i) 54.6% 56.3% (1.7%)

(i) RioCan’s Declaration provides for maximum total debt levels up to 60% of Aggregate Assets (herein referred to as “Debt to AggregateAssets ratio” with Aggregate Assets defined in the Declaration as total assets plus accumulated amortization of income properties asrecorded by us, with some exceptions, and calculated in accordance with GAAP).

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RioCan’s Declaration provides for maximum total debt levels up to 60% of Aggregate Assets. At September 30, 2008 ourindebtedness was 54.6% of Aggregate Assets, and we could therefore incur additional indebtedness of approximately$800 million and still not exceed the 60% leverage limit (this calculation assumes that additional amounts borrowed willbe added to the asset base). As a matter of policy, we would not likely incur indebtedness significantly beyond 58% ofAggregate Assets. On this basis we could therefore incur additional indebtedness of approximately $480 million (thiscalculation assumes that additional amounts borrowed will be added to the asset base).

The decrease in the Debt to Aggregate Assets ratio during the periods primarily arises from our April 2008 issue of 7.1million units on a bought-deal basis at $21.05 per unit for cash proceeds of approximately $150 million. These proceedsare expected to be/have been used, among other items, to repay indebtedness incurred under our operating creditfacilities, to fund our acquisition and development programs and potential future property acquisitions and developmentactivities, and the balance for general trust purposes.

For the twelve month period ended September 30 2008 2007 Decrease

Interest coverage ratio (i) 2.6 2.7 (0.1)

Debt service coverage ratio (ii) 2.0 2.0 –

(i) Interest coverage is defined as GAAP net earnings for a rolling twelve month period, before net interest expense, income taxes and incomeproperty amortization (including provisions for impairment) divided by total interest expense (including interest that has been capitalized).

(ii) We define debt service coverage as GAAP net earnings for a rolling twelve month period, before net interest expense, income taxes andincome property amortization (including provisions for impairment) divided by total interest expense and scheduled mortgage principalamortization.

The decrease in the interest coverage ratio for the period ended September 30, 2008 as compared to 2007 arises as a result of increased aggregate indebtedness during the periods which proceeds were partially used to fund theTrust’s ongoing development pipeline, which is not yet income producing.

Debt

Standard & Poor’s Ratings Services (“S&P”) and Dominion Bond Rating Service Limited (“DBRS”) provide creditratings of debt securities for commercial entities. A credit rating generally provides an indication of the risk that theborrower will not fulfill its obligations in a timely manner with respect to both interest and principal commitments.Rating categories range from highest credit quality (generally AAA) to default in payment (generally D).

At both September 30, 2008 and December 31, 2007 S&P provided us with an entity credit rating of BBB and a creditrating of BBB- relating to RioCan’s senior unsecured debentures payable (“debentures”). A credit rating of BBB byS&P exhibits adequate protection parameters. However, adverse economic conditions or changing circumstancesare more likely to lead to a weakened capacity of the obligor to meet its financial commitment on the obligation.

At both September 30, 2008 and December 31, 2007 DBRS provided us with a credit rating of BBB (high) relating toRioCan’s debentures. A credit rating of BBB by DBRS is generally an indication of adequate credit quality, whereprotection of interest and principal is considered acceptable but the issuing entity is fairly susceptible to adversechanges in financial and economic conditions, or there may be other adverse conditions present which reduce thestrength of the entity and its rated securities.

A credit rating of BBB- or higher is an investment grade rating.

Revolving Lines of Credit

At September 30, 2008 we had the following revolving lines of credit in place with Canadian chartered banks:

• One revolving operating line of credit has a maximum loan amount of $310 million, against which $56.1 million ofletters of credit (“LC”) were drawn. This facility is secured by a charge against certain income properties. Should the aggregate agreed values for lending purposes of such properties fall to a level which would not support aborrowing of $310 million (through reappraisal or sale of the property providing the security), RioCan has theoption to provide substitute income properties as additional security.

$110 million of this facility expires on December 31, 2008. The remaining $200 million of this facility is due upon sixmonths notice by the lender if not in default, and bears interest at the bank’s prime rate or, at our option, the


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banker’s acceptance rate plus 0.95% (with LC stamping fees of 0.875% per annum). Aside from the requirementto not exceed the 60% leverage limit required by our Declaration, this facility is subject to customary terms andconditions which we believe would not limit the distributions we currently expect to distribute to our unitholdersin the foreseeable future.

In October 2008, we entered into an agreement for a $90 million revolving term and LC facility, with maximum cashadvances of $50 million under the revolving term portion of this facility. This facility is secured by a charge against anincome property and bears interest at the bank’s prime rate plus 0.75% or, at our option, the banker’s acceptance rateplus 1.75% (with LC stamping fees of 1.25% per annum). This facility matures on November 30, 2009.

• We have a 50% interest in a RioKim LC facility, which provides for a maximum amount of $7 million against which$5 million of LCs were drawn. The LC stamping fees on this facility are 1% per annum. This facility is subject torepayment not later than one year from the date of issuance of an LC.

Debentures Payable

At September 30, 2008 we had seven series of debentures outstanding totalling $880 million. At December 31, 2007we had eight series of debentures outstanding totalling $990 million.

Our debentures have covenants relating to our 60% leverage limit discussed above, maintenance of a $1 billionAdjusted Book Equity (defined as unitholders’ equity plus accumulated building amortization calculated in accordancewith GAAP), and maintenance of an interest coverage ratio of 1.65 times or better. Our Series I debentures aggregating$100 million have additional covenants in that we have the right at any time to convert these debentures to mortgagedebt (subject to the acceptability of the security given to the debentureholders). In such event, the covenants relatingto our 60% leverage limit, minimum book equity and interest coverage ratio would be eliminated for this debenture.

During the first nine months of 2008 we repaid our $110 million Series E debentures at maturity. During the first ninemonths of 2007 we issued $120 million Series K debentures, maturing September 11, 2012, bearing interest at 5.7%per annum, payable semi-annually.

In October 2008 we repurchased approximately $26 million of our $110 million Series D debentures maturingSeptember 21, 2009 and $5 million of our $100 million Series J debentures maturing March 24, 2010 for a total of $31 million.

At September 30, 2008 our debentures bear interest at contractual rates ranging between 4.7% and 5.953% per annumwith a weighted average quarter end rate of 5.22% per annum, and mature between 2009 and 2026. Changes in thecarrying amount of our debentures payable resulted primarily from the following:


Balance, beginning of period $ 880,000 $ 870,000 $ 990,000 $ 870,000

Issuances (repayments) – 120,000 (110,000) 120,000

Contractual obligations 880,000 990,000 880,000 990,000

Unamortized debt financing costs (5,126) (6,618) (5,126) (6,618)


Mortgages Payable

At September 30, 2008 we had mortgages payable of $2.35 billion as compared to $2.25 billion at December 31, 2007.The vast majority of our mortgage indebtedness provides recourse to the assets of the Trust (as opposed to onlyhaving recourse to the specific property charged). We follow this policy as it generally results in lower interestcosts and higher loan-to-value ratios than would otherwise be obtained.

At September 30, 2008 the contractual interest rates on our mortgages payable ranged from 0% to 11.88% per annumwith a quarter end weighted average interest rate of 6.19% per annum. Changes in the carrying amount of ourmortgages payable resulted primarily from the following:

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Borrowings (i):

New: Term 127,270 136,000 320,745 321,320 Construction 7,151 9,221 19,579 56,343

Net advances on operating line of credit – – 84,734 –

Assumed/granted on the acquisition of properties – 11,720 83,634 76,748

Principal repayments (i):

Scheduled amortization (14,506) (14,107) (43,096) (39,650)

Operating line of credit – – (84,734) –

At maturity: Term (66,569) (28,100) (178,694) (117,443)Construction (27,249) (32,617) (79,927) (76,184)

Other (ii) – – (17,845) –

Contractual obligations 2,346,398 2,131,721 2,346,398 2,131,721

Unamortized differential between contractual and market interest rates on liabilities assumed at the acquisition of properties 10,813 15,390 10,813 15,390

Unamortized debt financing costs (6,067) (5,320) (6,067) (5,320)

Balance, end of period $ 2,351,144 $ 2,141,791 $ 2,351,144 $ 2,141,791

(i) Borrowings and repayments relating to properties held for resale are included in cash flows from operating activities (see Distributions to Unitholders below). All other such amounts are included in cash flows from financing activities.

(ii) Refer to footnote discussion in Income Properties.

At September 30, 2008, $22.7 million (or 0.7%) of our mortgage debt was at floating interest rates.

At the outset of 2008, we had $220 million of mortgage principal maturities at a weighted average contractualinterest rate of 5.98%.

During the three and nine months ended September 30, 2008 we had additional mortgage borrowings as follows:

Three months ended September 30, 2008 Nine months ended September 30, 2008

Weighted Average Weighted Averageaverage term to average term to

contractual maturity contractual maturity(thousands of dollars, except other data) interest rate in years interest rate in years

New borrowings:

Term $ 127,270 5.99% 9.0 $ 320,745 5.72% 6.9

Construction 7,151 4.75% 1.0 19,579 4.86% 0.6

$ 134,421 $ 340,324

Assumed/granted on the acquisition of properties $ – – – $ 83,634 4.80% 4.8

Aggregate Debt Maturities

On a combined basis, our mortgages and debentures payable bear a quarter end weighted average contractualinterest rate of 5.92% with a weighted average term to maturity of 5.3 years, and have future repayments as follows:


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Contractual

Principal maturities

Weighted Weighted WeightedScheduled average average average

(thousands of dollars, principal Mortgages interest Debentures interest interestexcept percentage amounts) amortization payable rate payable rate Total rate

Year ending December 31: 2008 $ 16,552 $ 20,054 8.54% $ – – $ 36,606 8.54%

2009 61,600 235,372 6.50% 110,000 5.29% 406,972 6.13%

2010 54,214 247,548 7.38% 100,000 4.94% 401,762 6.71%

2011 49,915 69,061 7.04% 200,000 4.91% 318,976 5.50%

2012 48,451 201,866 6.49% 220,000 5.25% 470,317 5.87%

Thereafter 183,824 1,157,941 5.81% 250,000 5.52% 1,591,765 5.77%

$ 414,556 $ 1,931,842 $ 880,000 $ 3,226,398

The $20.1 million remaining mortgage principal maturities for 2008 is comprised of two mortgages, each in theamount of $10 million. One mortgage in the amount of $10 million was repaid in cash in October 2008. The other $10 million mortgage is due in December and we anticipate refinancing this mortgage at a higher amount.

Additionally, in October 2008 we financed three unencumbered properties with new borrowings of approximately $90 million at a weighted average contractual interest rate of 5.44% per annum, with a weighted average term tomaturity of 6.1 years.

Of the $345.3 million of debt maturities in 2009, $54.4 million matures during the first six months of 2009. As discussedabove, in October 2008 we repurchased approximately $26 million of our $110 million Series D debentures whichmature on September 21, 2009.

Regarding the 2010 maturities, in October 2008 we also repurchased $5 million of our $100 million Series J debentureswhich mature on March 24, 2010.

Our debt obligations do not provide for any contractual limitations on cash distributions to our unitholders.

As a practical matter, our target indebtedness is slightly over 58% of Aggregate Assets. To obtain and maintain such a level generally requires us to refinance mortgage principal upon maturity. As a result, we do not consider debtprincipal repayments (including scheduled principal amortization) as a key determinant in setting the amount wedistribute to our unitholders.

Considering our current levels of leverage and demonstrated historical access to debt capital markets, we expectthat all maturities will be refinanced or repaid in the normal course of business.

Trust Units

As discussed above, in April 2008 we issued 7.1 million units on a bought-deal basis at $21.05 per unit for cashproceeds of approximately $150 million.

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Unit issuances during the periods are as follows:

Three months ended September 30, Nine months ended September 30,(number of units in thousands) 2008 2007 2008 2007

Units outstanding, beginning of period 220,106 209,101 210,883 199,647

Units issued:

Public offering – – 7,130 6,600

Exchangeable limited partnership (“LP”) units (i) – – – 829

Distribution reinvestment and direct purchase plans 887 758 2,688 2,136

Unit option plan 3 – 295 647

Units outstanding, end of period 220,996 209,859 220,996 209,859

(i) In the first quarter of 2007 we acquired YEC, consideration included the issuance of exchangeable LP units for approximately $21 million tothe vendors . We are the general partner of the LP. The LP units are entitled to distributions equivalent to distributions on RioCan units, mustbe exchanged for RioCan units on a one-for-one basis, and are exchangeable at any time at the option of the holder. As required by GAAP,these exchangeable LP units have been accounted for as unitholders’ equity. To date, no LP units have been exchanged by the vendors forRioCan units.

All trust units outstanding have equal rights and privileges and entitle the holder thereof to one vote for each unit atall meetings of unitholders.

We provide long term incentives to certain employees by granting options through a unit option plan. Options grantedpermit employees to acquire units at an exercise price equal to the closing price of such units under option at the dateprior to the day the option is granted. The objective of granting unit based compensation is to encourage plan membersto acquire an ownership interest in us over time and acts as a financial incentive for such persons to act in the longterm interests of RioCan and its unitholders. At September 30, 2008, 3.2 million units remain available for issuanceunder the unit option plan.

No unit options were granted under the unit option plan for both the three months ended September 30, 2008 and2007. We granted 1.6 million options for the first nine months of 2008 under the unit option plan compared to 1.4million for the same period during 2007. Additionally, we have a Restricted Equity Unit (“REU”) plan which provides for an allotment of REUs to each non-employee trustee. The value of the REUs allotted appreciate or depreciate withincreases or decreases in the market price of the Trust’s units.

On October 28, 2008 we announced our intention to make a normal course issuer bid, subject to the approval ofthe Toronto Stock Exchange, permitting us to purchase up to 11 million units during the twelve-month period endingNovember 6, 2009. We believe that, from time to time, the market price of our units may not reflect their underlyingvalue and that the purchase of our units may represent an appropriate and desirable use of our funds. We intend tofund the purchases out of available cash.

Other Capital Commitments and Contingencies

In February 2008 we completed the final closing of our acquisition of a 50% interest in a completed developmentproperty. At any time within three years after the final closing of this transaction, Devimco had the right to sell the whole or part of its remaining 50% interest (approximately 570,000 square feet) to us at fair market value. In July 2008 Devimco released us from this obligation (refer to our discussion above under Income Properties, Co-ownership Activities).

We are involved with litigation and claims which arise from time to time in the normal course of business. We are ofthe opinion that any liability that may arise from such contingencies will not have a significant adverse effect on ourinterim consolidated financial statements.

Additionally, our Declaration requires us to distribute to our unitholders in each year an amount not less than theTrust’s income for the year, as calculated in accordance with the Income Tax Act (Canada) (the “Act”) after allpermitted deductions under the Act have been taken. We rely upon forward looking cash flow information includingforecasts and budgets to establish the level of cash distributions to our unitholders.


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Future Income Taxes

Bill C-52 is not expected to apply to RioCan until 2011 as it provides for a transition period for publicly traded truststhat existed prior to November 1, 2006. In addition, Bill C-52 will not apply to an entity that meets specific definedrequirements under the legislation for the REIT Exemption. As discussed under Vision and Business Strategy, underthis legislation, for RioCan to qualify for the REIT Exemption we will essentially be required, among other things, toensure that 95% of our revenue is derived from rental revenue from long-lived income properties and fee income fromsuch properties in which we have an interest. RioCan intends to take the necessary steps to qualify for the REITExemption prior to 2011.

GAAP requires us to recognize future income taxes based on our structure at the balance sheet date, and does notpermit us to consider future changes to our structure that we will make to enable us to qualify for the REIT Exemption.The impact (including the reversal of future income taxes previously recorded by us) of any changes undertaken by usto qualify for the REIT Exemption will not be recognized in the financial statements until such time as we so qualify.

Non-cash future income tax charges recorded by us arise from temporary differences between the estimatedaccounting and tax basis of our assets and liabilities expected to reverse after January 1, 2011, and relate primarilyto our real estate investments, the largest component of which is the difference between net book value andundepreciated capital cost for tax purposes. These charges have no current impact on our cash flows or distributions.

A summary of our temporary differences between the accounting and tax basis of our assets and liabilities is as follows:

(thousands of dollars)

Components of Future Income Taxes on the Balance Sheets September 30, 2008 December 31, 2007

Tax effected temporary differences between accounting and tax basis of:

Real estate investments $ 146,000 $ 139,000

Other 4,000 5,000

Future income taxes $ 150,000 $ 144,000

Three months ended September 30, Nine months ended September 30,2008 2007 2008 2007

Statements of Earnings (Loss)Current income taxes at Canadian

statutory tax rate $ – $ – $ – $ –

Increase in future income taxes resulting from a change in tax status with enactment of Bill C-52 on June 22, 2007 – – – 150,000

Increase in future income taxes resulting from a change during the period in temporary differences expected to reverse after 2010 1,000 7,000 6,700 7,000

Future income tax expense $ 1,000 $ 7,000 $ 6,700 $ 157,000

Statements of Unitholders’ EquityImpact of future income taxes

resulting from a change during the period in temporarydifferences from unit issue costs expected to reverse after 2010 $ – $ – $ (700) $ –

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Off Balance Sheet Liabilities and Guarantees

At September 30, 2008 we have real estate investments accounted for using the equity method that could beviewed to give rise to off balance sheet debt of $11.2 million, which would increase our indebtedness to 54.8%of Aggregate Assets.

We provide guarantees on behalf of third parties, including co-owners and partners (for which we generally are paid a fee) as, among other reasons, it generally results in lower interest costs and higher loan-to-value ratios thanwould otherwise be obtained. Also, our guarantees remain in place for certain debts assumed by purchasers inconnection with property dispositions and will remain until such debts are extinguished or lenders agree to releaseRioCan’s covenants. Recourse would be available to us under these guarantees in the event of a default by theborrowers, in which case our claim would be against the underlying real estate investments. At September 30, 2008such guarantees amount to approximately $513 million and expire between 2008 and 2034. We have assessed that theestimated fair value of the borrowers’ interests in the real estate investments is greater than the mortgages payablefor which we have provided guarantees, and therefore we have not provided for any losses on such guarantees in our financial statements.

At September 30, 2008 the parties on behalf of which we have outstanding guarantees are as follows:

(thousands of dollars)

Partners and co-owners

Kimco $ 255,247

Trinity 68,054

Devimco 6,750

Other 35,901

Assumption of mortgages by purchasers on property dispositionsRetrocom mid-market reit 63,672

RRVLP 11,193

Other 72,489

$ 513,306

Liquidity

Liquidity refers to our having and/or generating sufficient amounts of cash and equivalents to fund our ongoingoperational commitments, distributions to unitholders and planned growth in our business.

Our lenders may have suffered losses related to their lending and other financial relationships, especially becauseof the general weakening of the economy and the increased financial instability of many borrowers. As a result,lenders may tighten their lending standards which could make it more difficult for us to obtain financing on favorableterms, or at all. Our financial condition and results of operations would be adversely affected if we were unable toobtain financing, or obtain cost-effective financing.

We retain a portion of our annual operating cash flows to help fund ongoing maintenance capital expenditures,tenant installation costs and long term unfunded contractual obligations, among other items.

Cash on hand, borrowings under our revolving credit facilities, and Canadian equity and debt capital markets also provide the necessary liquidity to fund our ongoing and future capital expenditures and obligations. AtSeptember 30, 2008 we have:

• $19.5 million of cash and short term investments;

• $255 million of undrawn bank lines of credit; and

• Indebtedness is 54.6% of Aggregate Assets, and we could therefore incur additional indebtedness of approximately$800 million and still not exceed the 60% leverage limit. As a matter of policy, we would not likely incur indebtednesssignificantly beyond 58% of Aggregate Assets.


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The $20.1 million remaining mortgage principal maturities for 2008 is comprised of two mortgages, each in theamount of $10 million. One mortgage in the amount of $10 million was repaid in cash in October 2008. The other $10 million mortgage is due in December and we anticipate refinancing this mortgage at a higher amount.

Additionally, in October 2008 we financed three unencumbered properties with new borrowings of approximately $90 million at a weighted average contractual interest rate of 5.44% per annum, with a weighted average term tomaturity of 6.1 years.

Unitholder distributions reinvested through the distribution reinvestment and direct purchase plans also contributecapital to fund our activities (see Distributions to Unitholders below).

Distributions to Unitholders

Distributions to our unitholders are as follows:



Distributions reinvested through the distribution reinvestment and direct purchase plans

(17,410) (17,241) (54,172) (51,248)

$ 57,625 $ 51,927 $ 166,434 $ 154,396

Distributions reinvested through the distribution reinvestment and direct purchase plans as a percentage of distributions to unitholders 23.2% 24.9% 24.6% 24.9%

S&P and DBRS provide stability ratings for REITs and income trusts. A stability rating is intended to provide anindication of both the stability and sustainability of distributions to unitholders.

S&P’s rating categories range from the highest level of distributable cash flow generation stability relative to otherincome funds in the Canadian market place (SR-1) to a very low level of distributable cash flow generation stabilityrelative to other income funds in the Canadian market place (SR-7). On October 20, 2008 S&P reconfirmed RioCan’sstability rating of SR-2. According to S&P this rating category reflects a very high level of distributable cash flowgeneration stability relative to other income funds in the Canadian market place.

DBRS’s rating categories range from highest stability and sustainability of distributions per unit (STA-1) to poorstability and sustainability of distributions per unit (STA-7). At both September 30, 2008 and December 31, 2007RioCan had a DBRS stability rating of STA-2 (low). According to DBRS this rating category reflects very goodstability and sustainability of distributions per unit.

Commencing with the September 2008 distribution, RioCan’s monthly distribution to unitholders is 11.5 cents per unit(payable in October 2008), an increase of 3 cents per unit on an annualized basis from $1.35 per unit to $1.38 per unit.

As discussed above, our Declaration requires us to distribute all of our taxable income to our unitholders.

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A comparison of distributions to unitholders with cash flows provided by operating activities and net earnings is as follows:

Three months Nine monthsended ended

September 30, September 30, Year ended December 31,(thousands of dollars) 2008 2008 2007 2006

Cash flows provided by operating activities $ 72,202 $ 232,980 $ 265,499 $ 286,764

Net earnings $ 41,603 $ 116,813 $ 32,358 $ 163,812


Difference between cash flows provided by operating activities and distributions to unitholders (i) $ (2,833) $ 12,374 $ (11,189) $ 29,771

Difference between net earnings and distributions to unitholders (ii) $ (33,432) $ (103,793) $ (244,330) $ (93,181)

(i) Difference between cash flows provided by operating activities and distributions to unitholders.

We rely upon forward looking cash flow information including forecasts and budgets to establish the level ofour annual cash distributions to unitholders (which are paid monthly).

A summary of certain components of our Statements of Cash Flows included in our interim consolidatedfinancial statements for the periods is as follows:

Three months Nine monthsended ended

(thousands of dollars) September 30, September 30, Year ended December 31,Cash Flows Provided By (Used in) 2008 2008 2007 2006

Cash flows provided by operating activities $ 72,202 $ 232,980 $ 265,499 $ 286,764

Adjust for:

Changes in non-cash operating items and other 9,535 39,022 4,275 6,280

Properties held for resale (6,705) (88,523) (60,053) (37,122)

Acquisition and development of properties held for resale 4,028 45,972 96,451 23,271

$ 79,060 $ 229,451 $ 306,172 $ 279,193


We do not use GAAP defined cash flows provided by operating activities to establish the level of unitholders’distributions because, among other items, it includes the following:

• Generally, the timing of the payment of property tax installments and operating costs do not coincide withcollections pursuant to tenant leases. We typically collect property taxes and operating cost recoveriesfrom our tenants in equal monthly installments (based on annual estimates of such costs), with any shortfallbeing collected from our tenants after the end of the year. This usually results in fluctuations in the timingof the related cash flows during the reporting periods.


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• We also invest in maintenance capital expenditures on a continuous basis to physically maintain ourincome properties. Typical costs incurred are for roof replacement programs and the repaving of parkinglots. Tenant leases generally provide for our ability to substantially recover such costs from tenants overtime as property operating costs. As a result, the cash outflows for maintenance capital expendituresfluctuate during the reporting periods.

• Debenture interest and interest on certain mortgages payable are paid by us semi-annually. As a result,the cash outflows for interest paid fluctuate during the reporting periods.

• As previously discussed under Properties Held For Resale, where we own trading assets with partners wemay also earn out-performance incentive fees for exceeding agreed upon benchmarks. Out-performanceincentive fees in some cases may be earned and recorded but not payable until future reporting periods inaccordance with related agreements. Gains and related performance fees (being disposition-dependent)are not earned in consistent amounts in each and every reporting period. The result is that we generallyexperience fluctuations in our gains from properties held for resale and fees and other income.

• While we consider gains from properties held for resale, among other items, in establishing the level of cashdistributions to unitholders, for this purpose we consider the expenditures (net of third-party financing)relating to these projects as capital in nature. Additionally, on occasion we may finance the purchaser of certain properties held for resale with a vendor-take-back mortgage, with the result that not all theproceeds are received by us upon disposition of such properties until future reporting periods.

As indicated above, in determining the annual level of distributions to unitholders we look at forward looking cashflow information including forecasts and budgets. Furthermore, we do not consider periodic cash flow fluctuationsresulting from items such as the timing of property operating costs and tax installments, maintenance capitalexpenditures and semi-annual debenture and mortgages payable interest payments in determining the level ofdistributions to unitholders. Additionally, as indicated above in establishing the level of cash distributions tounitholders, for this purpose we consider, among other items, the expenditures (net of third-party financing)relating to properties held for resale projects and scheduled amortization of mortgage principal as capital innature. Therefore, our annual distributions to unitholders have been, and are expected to continue to be, funded by cash flows generated from our real estate investments and fee generating activities.

(ii) Difference between net earnings and distributions to unitholders.

We do not use net earnings in accordance with GAAP as the basis to establish the level of unitholders’distributions, as net earnings include, among other items, non-cash expenses for amortization (includingimpairment provisions) related to our income property portfolio and future income taxes. We believe, amongother items, that:

• It is appropriate for the Trust to ignore property related amortization primarily on the basis that the value of our realestate investments generally does not diminish over time, and because consideration is given by us to maintenancecapital expenditures for our property portfolio in establishing the level of our annual distributions to unitholders.

• We are currently not considering future income taxes as it is our intention to qualify for the REIT Exemption priorto 2011 (see Future Income Taxes above).

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RESULTS OF OPERATIONS

The specific components of our net earnings for each respective period are as follows:

(thousand of dollars, Three months ended September 30, Increase Nine months ended September 30, Increaseexcept per unit amounts) 2008 2007 (decrease) 2008 2007 (decrease)

Rental revenue $ 173,090 $ 160,559 8% $ 516,075 $ 483,824 7%

Property operating costs 56,660 53,010 7% 181,048 164,784 10%

Net operating income 116,430 107,549 8% 335,027 319,040 5%Fees and other income 6,981 3,784 84% 14,316 10,456 37%Interest income 3,994 3,761 6% 12,468 11,122 12%

Gains on properties held for resale 1,472 4,389 (66%) 20,430 21,088 (3%)

128,877 119,483 382,241 361,706

Interest expense 41,312 38,102 8% 124,619 116,025 7%

General and administrative expense 6,257 5,352 17% 22,249 18,561 20%

FFO (i) 81,308 76,029 7% 235,373 227,120 4%Amortization expense 38,705 33,112 17% 111,860 102,910 9%Future income tax expense 1,000 7,000 6,700 157,000

Net earnings (loss) $ 41,603 $ 35,917 16% $ 116,813 $ (32,790) 456%

Net earnings (loss) per unit – basic and diluted $ 0.19 $ 0.17 $ 0.54 $ (0.16)

FFO per unit (i) $ 0.37 $ 0.36 $ 1.09 $ 1.09

(i) Refer to our discussion below under FFO.

Net Operating Income

Net operating income (“NOI”) is a non-GAAP measure and is defined by us as rental revenue from income propertiesless property operating costs. Our method of calculating NOI may differ from other issuers’ methods and accordingly,may not be comparable to NOI reported by other issuers.

Rental revenue includes all amounts earned from tenants related to lease agreements, including property tax andoperating cost recoveries, to the extent recoverable under tenant leases. Amounts payable by tenants to terminatetheir lease prior to their contractual expiry date (“lease cancellation fees”) are included in rental revenue.

The geographical diversification of our retail property portfolio by province is as follows:

(i) The portfolio acquisition closed at the end of the second quarter of 2008 (refer to our discussion under Income Properties).


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0.6% Newfoundland 0.5% Prince Edward Island 0.5% Manitoba 0.2% Nova Scotia

Rental revenue for the nine monthsended September 30, 2008

Ontario 60.0%Quebec 18.9%Alberta 9.0%

British Columbia 5.5%New Brunswick 4.0%Saskatchewan 0.8%

0.5% Manitoba 0.4% Newfoundland 0.4% Prince Edward Island 0.0% Nova Scotia (i)

Ontario 62.4% Quebec 17.4%Alberta 10.1%

British Columbia 6.0%New Brunswick 2.2%Saskatchewan 0.6%


No individual tenant comprised more than 5.4% of our portfolio’s annualized rental revenue (see Risks andUncertainties, Tenant Concentrations for a listing of our 25 largest tenants).

The occupancy rate of our portfolio over the last eight quarters is as follows:

Our NOI for the periods is as follows:

Three months ended September 30, Nine months ended September 30, Increase(thousands of dollars) 2008 2007 Increase 2008 2007 (decrease)

Base rent $ 116,072 $ 106,765 9% $ 339,081 $ 314,669 8%

Property taxes and operating cost recoveries 56,651 53,534 6% 175,718 160,004 10%

172,723 160,299 8% 514,799 474,673 8%

Lease cancellation fees 367 260 41% 1,276 9,151 (86%)

Rental revenue 173,090 160,559 8% 516,075 483,824 7%

Recoverable property taxes and operating costs 54,956 51,528 7% 175,610 159,968 10%

Non-recoverable property operating and site administration costs 1,704 1,482 15% 5,438 4,816 13%

Property operating costs 56,660 53,010 7% 181,048 164,784 10%

NOI $ 116,430 $ 107,549 8% $ 335,027 $ 319,040 5%

NOI as a percentage of rental revenue (excluding the impact of lease cancellation fees) 67% 67% 0% 65% 65% 0%

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9.1% Alberta

5.8% British Columbia 4.0% New Brunswick 1.0% Saskatchewan

Newfoundland 0.6%Manitoba 0.6%

Prince Edward Island 0.5%

Ontario 60.1% Quebec 18.3%

Rental revenue for the nine monthsended September 30, 2007

9.9% Alberta

6.4% British Columbia 2.4% New Brunswick

Saskatchewan 0.6%Manitoba 0.5%

Prince Edward Island 0.5%Newfoundland 0.3%

Ontario 62.2%Quebec 17.2%

100.0%

95.0%97.7% 97.1% 97.7% 97.6% 97.6% 96.6% 97.0% 97.0%

Q4 2006 Q1 2007 Q2 2007 Q3 2007 Q4 2007 Q1 2008 Q2 2008 Q3 2008

As discussed under Income Properties, at September 30, 2008 our NLA was 32.8 million square feet, an increase of1.8 million square feet from 31 million square feet at September 30, 2007.

The amount of property taxes and operating costs we can recover from our tenants is impacted by property vacancyand fixed cost recovery tenancies.

Our property operating costs are generally higher during the winter months. During these periods, our NOI margintrends slightly downwards as such amounts are recoverable from our tenants at our cost and are impacted by fixedcost recovery tenancies.

On October 18, 2008, Linens 'N Things (“Linens”) filed a Notice of Intention to Make a Proposal under Section 50.4(1)of the Bankruptcy and Insolvency Act. An orderly liquidation of Linens’ retail inventory from its leased premisescommenced on October 24, 2008 and is contemplated to continue for a period of up to three months. Over thisperiod, Linens intends to search for buyers for its retail locations, which purchaser would also assume the leases.Provided that a single retailer does not buy all the Linens’ Canadian locations, we expect that replacement tenantswill be sourced in the near term.

The majority of the Linens’ premises are located in recently-constructed, new format retail centres located in ornear one of Canada's six primary markets. Linens currently occupies space in ten centres within our portfolio, nine of which we co-own with partners. At our interest, Linens occupies 149,600 square feet contributing annuallyapproximately $3.3 million of rental revenue. Based on conversations with potential replacement tenants, we areconfident that we will either replace or exceed existing rents and will experience limited downtime.

The change in NOI during the periods arises as follows:

Three months ended September 30, Increase Nine months ended September 30, Increase(thousands of dollars) 2008 2007 (decrease) 2008 2007 (decrease)

Same properties $ 103,056 $ 100,097 3.0% $ 298,171 $ 291,175 2.4%2008 and 2007 acquisitions 4,492 115 3,806.1% 12,018 1,916 527.2%2008 and 2007 dispositions 199 532 (62.6%) 594 1,966 (69.8%)

Greenfield development 5,727 2,492 129.8% 15,226 6,634 129.5%

NOI before adjustments 113,474 103,236 9.9% 326,009 301,691 8.1%Lease cancellation fees 367 260 41.2% 1,276 9,151 (86.1%)Straight-lining of rents 1,696 3,004 (43.5%) 5,137 6,221 (17.4%)

Differential between contractual and market rents 893 1,049 (14.9%) 2,605 1,977 31.8%

NOI $ 116,430 $ 107,549 8.3% $ 335,027 $ 319,040 5.0%

Same properties refer to those income properties that were owned by us throughout both periods.

Same property NOI increased during the third quarter by 3% as compared to the same period of 2007 primarily dueto land use intensification and redevelopment activities, step rents and lease renewals at favorable rates, offset by a reduction in occupancy to 97% at September 30, 2008 compared to 97.6% for the comparable period of 2007. In thefirst quarter of 2008 we had net vacancies of 320,000 square feet and during the second quarter we had net absorptionof vacant space of 127,000 square feet, with the third quarter remaining relatively flat.

Same property NOI increased by 2.4% on a year-over-year basis primarily due to land use intensification andredevelopment activities, step rents and lease renewals at favorable rates, offset by a reduction in occupancy to 97% at September 30, 2008 compared to 97.6% for the comparable period of 2007. In the first quarter of 2008 we had net vacancies of 320,000 square feet and during the second quarter we had net absorption of vacant space of127,000 square feet, with the third quarter remaining relatively flat.


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The change in NOI on a consecutive quarter-over-quarter basis is as follows:

Three months Three months ended ended Increase

(thousands of dollars) September 30, 2008 June 30, 2008 (decrease)

Same properties $ 106,025 $ 102,346 3.6%

Acquisitions 2,210 86 2,469.8%

Dispositions 199 154 29.2%

Greenfield development 5,040 4,606 9.4%

NOI before adjustments 113,474 107,192 5.9%

Lease cancellation fees 367 360 1.9%

Straight-lining of rents 1,696 1,729 (1.9%)

Differential between contractual and market rents 893 828 7.9%

NOI $ 116,430 $ 110,109 5.7%

Same property NOI increased during the third quarter by 3.6% as compared to the second quarter of 2008 primarily dueto step rents, replacement tenants and lease renewals at favorable rates and increased recoveries from tenants. Duringthe second and third quarters, occupancy was stable at 97%.

Other Revenue

Fees and Other Income

We hold certain of our interests in various real estate investments through co-ownerships and investmentsaccounted for by the equity method. Generally, we provide asset and property management services for theseinvestments for which we earn market based fees.

As discussed under Vision and Business Strategy, commencing in 2008 our focus will be on growing our rental andfee income from long-lived properties. Prior to 2011, we will isolate those activities that generate period disposition-dependent performance fees and review how best to restructure so as to continue these activities in a taxable entityor discontinue such activities if appropriate, with the purpose of ensuring RioCan will comply with the requirementsof Bill C-52.

The significant sources of fees and other income are as follows:

Three months ended September 30, Increase Nine months ended September 30,(thousands of dollars) 2008 2007 (decrease) 2008 2007 Increase

Property and asset management fees earned from co-ownershipsand partners $ 3,157 $ 2,367 33% $ 7,874 $ 6,271 26%

Property and asset management fees earned from third party activities 299 468 (36%) 1,261 1,206 5%

Disposition-dependent performance fees and other 3,525 949 271% 5,181 2,979 74%

$ 6,981 $ 3,784 84% $ 14,316 $ 10,456 37%

The increase in property and asset management fees earned from co-ownerships and partners primarily arises fromthe completion of greenfield developments and the June 2008 RioKim II portfolio acquisition, resulting in increasedfinancing, property management and other related fees charged to our partners during the periods.

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Subsequent to July 2008, we no longer manage the seven properties we sold to Retrocom in 2005. Third party propertymanagement fees will be impacted by between $1.7 million and $1.8 million annually. In conjunction with Retrocom’s$30 million debenture repayment in July 2008 we were paid a financing facilitation fee of $1.75 million (which amount is included in disposition–dependent performance fees and other).

In addition to including the Retrocom financing facilitation fee as discussed above, disposition–dependentperformance fees and other consist of outperformance incentive fees from RRVLP primarily recognized inconjunction with the $1.5 million gain on properties held for resale (see Properties Held For Resale above).

Interest Income

The changes in interest earned during the three and nine months ended September 30, 2008 as compared to thesame periods of 2007 primarily resulted from higher mortgage and loan receivable balances during the periods,partially offset by lower cash and short term investment balances during the periods.

Other Expenses

Interest

The components of interest expense are as follows:

Three months ended September 30, Increase Nine months ended September 30,(thousands of dollars) 2008 2007 (decrease) 2008 2007 Increase

Interest $ 46,776 $ 43,644 7% $ 139,063 $ 130,342 7%

Capitalized to real estate investments (5,464) (5,542) (1%) (14,444) (14,317) 1%

Net interest expense $ 41,312 $ 38,102 8% $ 124,619 $ 116,025 7%

Percentage capitalized to real estate investments 12% 13% 10% 11%

The increases during the periods in total interest expense resulted primarily from higher debt levels during thecomparative periods. The increased interest expense on this new debt was partially offset by reduced interestexpense resulting from scheduled repayments of mortgage principal (see Debt).

The amounts capitalized to real estate investments are consistent with our continued focus on greenfielddevelopments and land use intensification activities during the periods.

General and Administrative

Certain staffing and related costs for property management activities are directly recoverable from tenants underlease agreements and such costs are included in property operating costs. Additionally, incremental direct internalcosts related to our development activities (to the extent that they are not capital expenditures on properties underdevelopment) and leasing activities (to the extent that they are not included in tenant installation costs) are alsoincluded in property operating costs. Other regional office costs and head office costs are included in general andadministrative expense.


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The components of general and administrative expense are as follows:

Three months ended September 30, Increase Nine months ended September 30, Increase(thousands of dollars) 2008 2007 (decrease) 2008 2007 (decrease)

General and administrative expense:

Public company and other costs $ 1,938 $ 1,822 6% $ 7,262 $ 7,024 3%

Non-recoverable salaries and benefits and unit based compensation 2,824 2,908 (3%) 8,348 9,698 (14%)

Indirectly recoverable regional office costs (i) 1,575 1,210 30% 4,740 3,692 28%

6,337 5,940 7% 20,350 20,414 0%

Head office moving related costs – – 0% 3,031 – 100%

General and administrative expense 6,337 5,940 7% 23,381 20,414 15%

Capitalized to real estate investments (80) (588) (86%) (1,132) (1,853) (39%)

Net general and administrative expense $ 6,257 $ 5,352 17% $ 22,249 $ 18,561 20%

(i) Indirectly recoverable from tenants under lease agreements through an administrative fee.

In February 2008 we moved our head office to YEC, a property that we acquired in 2007. The head office moving-related costs are primarily comprised of the write-off of unamortized leasehold improvements relating to the KingStreet, Toronto space, and costs related to sub-leasing such space for which we are committed under a leaseagreement until October 2013.

Amortization

The components of amortization expense are as follows:

Three months ended September 30, Nine months ended September 30, Increase(thousands of dollars) 2008 2007 Increase 2008 2007 (decrease)

Building amortization $ 25,413 $ 23,126 10% $ 73,583 $ 68,801 7%Amortization of leasing costs 8,538 7,303 17% 24,905 20,590 21%

Amortization of intangible assets 4,754 2,683 77% 13,372 13,519 (1%)

Total amortization $ 38,705 $ 33,112 17% $ 111,860 $ 102,910 9%RI

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The increase during the periods in total amortization is consistent with the full period impact of net acquisitions andcompleted (re)developments of income properties during 2008 and 2007.

For acquisitions initiated after September 12, 2003, GAAP requires a component of the purchase price to beallocated to leasing costs and intangible assets.

Other Items

Gains on properties held for resale are discussed under Properties Under Development.

RioCan may have transactions in the normal course of business with entities whose directors or trustees are alsoour trustees and/or management. Any such transactions are in the normal course of operations and are measured at market based exchange amounts, and are not considered related party transactions for GAAP purposes.

Funds from Operations

FFO is a supplemental non-GAAP financial measure of operating performance widely used by the real estate industry.The Real Property Association of Canada defines FFO as: “Net income (computed in accordance with GAAP),excluding gains (or impairment provisions and losses) from sales of depreciable real estate and extraordinary items,plus depreciation and amortization, plus future income taxes and after adjustments for equity-accounted entities andnon-controlling interests. Adjustments for equity-accounted entities, joint ventures and non-controlling interests arecalculated to reflect FFO on the same basis as the consolidated properties.”

We consider FFO a meaningful additional measure of operating performance as it primarily rejects the assumptionthat the value of real estate investments diminishes predictably over time and it adjusts for items included in GAAPnet earnings that may not necessarily be the best determinants of our operating performance (such as gains orlosses on the sale of, and provisions for impairment against, long-lived income properties).

FFO is a non-GAAP measure and should not be construed as an alternative to net earnings or cash flows provided by operating activities determined in accordance with GAAP. Our method of calculating FFO is in accordance withREALPAC’s recommendations but may differ from other issuers’ methods and accordingly, may not be comparable to FFO reported by other issuers.

A reconciliation of GAAP net earnings to FFO is as follows:

Three months ended September 30, Nine months ended September 30,(thousands of dollars, except per unit amounts) 2008 2007 2008 2007

Net earnings (loss) $ 41,603 $ 35,917 $ 116,813 $ (32,790)

Amortization 38,705 33,112 111,860 102,910

Future income tax expense 1,000 7,000 6,700 157,000

FFO $ 81,308 $ 76,029 $ 235,373 $ 227,120

Per unitFFO per weighted average number

of units outstanding $ 0.37 $ 0.36 $ 1.09 $ 1.09

The explanations for the changes in FFO are the same factors as for GAAP net earnings, excluding the impact ofchanges in amortization expense and future income tax expense.

Significant Accounting Policies

Our unaudited interim consolidated financial statements for the three and nine months ended September 30, 2008 and 2007 are prepared in accordance with GAAP. The significant accounting policies used in the preparation of theinterim consolidated financial statements are consistent with those reported in our audited consolidated financial


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statements for the two years ended December 31, 2007 and 2006 except as identified below in Changes in AccountingPolicies. The preparation of financial statements requires us to make estimates and judgments that affect the reportedamounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financialstatements and the reported amounts of revenue and expenses during the reporting period. Actual results may differfrom those estimates under different assumptions and conditions.

Our MD&A for the two years ended December 31, 2007 and 2006 contains a discussion of our significant accountingpolicies most affected by estimates and judgments used in the preparation of our financial statements, being ouraccounting policies relating to income properties amortization, impairment of real estate investments, guarantees, futureincome taxes, and fair value. We have determined that at September 30, 2008 there is no change to our assessment ofour significant accounting policies most affected by estimates and judgments as detailed in our MD&A for the two yearsended December 31, 2007 and 2006.

Changes in accounting policies

The Canadian Institute of Chartered Accountants (“CICA”) issued three new accounting standards that are effectivefor the Trust’s fiscal year commencing January 1, 2008: Section 1535, Capital Disclosures; Section 3862, FinancialInstruments – Disclosures; and Section 3863, Financial Instruments – Presentation. These standards, and the impacton our financial position and results of operations, are discussed in Note 1 (b) to our unaudited interim consolidatedfinancial statements.

Future Changes in Significant Accounting Policies

We monitor the CICA recently issued accounting pronouncements to assess the applicability and impact, if any, of these pronouncements on our consolidated financial statements and note disclosures.

Goodwill and intangible assets

The CICA has issued a new accounting standard, Section 3064, Goodwill and Intangible Assets, which clarifies thatcosts can be capitalized only when they relate to an item that meets the definition of an asset, and as a result, thebasis of the deferral of maintenance capital expenditures recoverable from tenants may be impacted. We are in theprocess of evaluating the impact of this standard on our consolidated financial statements. Section 1000, FinancialStatement Concepts, was also amended to provide consistency with this new standard. The new and amendedstandards will be effective for the Trust’s 2009 fiscal year, and will be adopted on a retroactive basis with restatementof the prior years.

International financial reporting standards (“IFRS”)

The Canadian Accounting Standards Board (“AcSB”) confirmed that the adoption of IFRS would be effective for theinterim and annual periods beginning on or after January 1, 2011 for Canadian publicly accountable profit-orientedenterprises. IFRS will replace Canada’s current GAAP for these enterprises. Comparative IFRS information for theprevious fiscal year will also have to be reported. These new standards will be effective for us in the first quarter of 2011.

We are currently in the process of evaluating the potential impact of IFRS to our consolidated financial statements.This will be an ongoing process as new standards and recommendations are issued by the International AccountingStandards Board and the AcSB. Our consolidated financial performance and financial position as disclosed in ourcurrent GAAP financial statements may be significantly different when presented in accordance with IFRS.

Risks and Uncertainties

The achievement of our objectives is, in part, dependent on successful mitigation of business risks identifiedconsidering the assumptions set out above in our 2008 Objectives.

All real estate investments are subject to a degree of risk. They are affected by various factors including changes ingeneral economic and in local market conditions, equity capital and credit markets, the attractiveness of the propertiesto tenants, competition from other available space and various other factors. In addition, fluctuations in interest costsmay affect us.

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The value of our real estate and any improvements thereto may also depend on the credit and financial stability ofour tenants. Our financial position would be adversely affected if a significant number of tenants were to becomeunable to meet their obligations to us or if we were unable to lease a significant amount of available space in ourproperties on economically favorable lease terms.

Tenant Concentrations

The principal operating risk facing us is the potential for declining revenue if we cannot maintain the existing highoccupancy levels of our properties should tenants experience financial difficulty and be unable to fulfill their leasecommitments. At September 30, 2008 we have NLA, at our interest, of 32.8 million square feet and a portfolio occupancyrate of 97%. Based on our current annualized rental revenue on a weighted average portfolio basis of approximately$22 per square foot, for every fluctuation in our occupancy by a differential of 100 basis points, our operations would beimpacted by approximately $7 million annually.

We reduce our risks in our shopping centre portfolio through geographical diversification (see Asset Profile and NetOperating Income), staggered lease maturities (see Income Properties), diversification of revenue sources resultingfrom a large tenant base, avoiding dependence on any single tenant by ensuring no individual tenant contributes asignificant percentage of our gross revenue, ensuring a considerable portion of our revenue is earned from nationaland anchor tenants (see Overview and Highlights), and credit assessments are generally conducted for new tenants.The key components of our tenant concentration risk strategy are discussed below or under Asset Profile.

Our lease expiries over the next five years are as follows:

Lease expiries

(in thousands) Portfolio NLA 2008 (i) 2009 2010 2011 2012

Square feet 32,764 530 2,454 3,183 3,727 2,927

Square feet expiring/portfolio NLA 39.1% 1.6% 7.5% 9.7% 11.4% 8.9%

Total average net rent $191,668 $8,504 $37,963 $45,056 $53,370 $46,775

(i) Tenant lease expiries for the three months ending December 31, 2008.

The above aggregate renewals over the next five years represent annual lease payments of approximately $191.7million based on current contractual rental rates. Should such tenancies be renewed upon maturity at an aggregaterental rate differential of 100 basis points, our operations would be impacted by approximately $2 million annually.


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The analysis below excludes retailer owned anchors, the success of which may impact certain income properties.At September 30, 2008 our 25 largest tenants and their NLA are as follows:

Annualized NLA Percentagerental revenue Number of (square feet of total

Ranking Tenant (%) locations in thousands) NLA

1. Metro/A&P/Super C/Loeb/Food Basics 5.4% 52 1,984 6.1%

2. Famous Players/Cineplex/Galaxy Cinemas 5.4% 28 1,265 3.9%

3. Canadian Tire/PartSource/Mark’s Work Wearhouse 4.0% 57 1,332 4.1%

4. Zellers/The Bay/Home Outfitters 3.6% 37 2,556 7.8%

5. Loblaws/No Frills/Fortinos/Zehrs/Maxi 3.4% 27 1,172 3.6%

6. Wal-Mart 3.3% 19 1,804 5.5%

7. Winners/HomeSense 3.3% 53 1,198 3.7%

8. Staples/Business Depot 2.5% 44 902 2.8%

9. Reitmans/Penningtons/Smart Set/Addition-Elle/Thyme Maternity 2.0% 121 496 1.5%

10. Harvey’s/Swiss Chalet/Kelsey’s/Montana’s/Milestone’s 1.7% 77 323 1.0%

11. Shoppers Drug Mart 1.7% 36 382 1.2%

12. Future Shop/Best Buy 1.6% 20 430 1.3%

13. Chapters/Indigo 1.4% 24 318 1.0%

14. Sport Mart/Sport Chek/Sports Experts/National Sports/Coast Mountain Sports 1.3% 41 365 1.1%

15. Sears 1.1% 15 547 1.7%

16. Bluenotes/Stitches/Suzy Shier/Urban Planet 1.0% 57 230 0.7%

17. Petsmart 1.0% 20 264 0.8%

18. Safeway 1.0% 12 378 1.2%

19. Dollarama 1.0% 43 351 1.1%

20. Premier Fitness 0.8% 9 276 0.8%

21. Rona/Revy/Reno 0.8% 5 326 1.0%

22. TD Canada Trust 0.6% 29 108 0.3%

23. LCBO 0.6% 18 130 0.4%

24. Michaels 0.6% 14 188 0.6%

25. London Drugs 0.6% 10 205 0.6%

49.7% 868 17,530 53.8%

We also mitigate our leasing risk by negotiating fixed term leases that will often be from five to ten years. In instanceswhere certain tenants are critical to the viability of a property, we endeavor to lease for even longer terms generallywith pre-negotiated minimum rent escalations. In addition, in order to reduce our exposure to the risks relating to creditand financial stability of our tenants, our Declaration restricts the amount of space which can be leased to any personand that person’s affiliates (other than in respect of leases with or guaranteed by the Government of Canada, a provinceof Canada, a municipality in Canada or any agency thereof and certain corporations, the securities of which meet statedinvestment criteria) to a maximum premises or space having an aggregate gross leasable area of 20% of the aggregategross leasable area of all real property held by us.

Interest Rate and Other Debt and Equity Related Risks

Our lenders may have suffered losses, related to their lending and other financial relationships, especially because ofthe general weakening of the economy and the increased financial instability of many borrowers. As a result, lendersmay tighten their lending standards which could make it more difficult for us to obtain financing on favorable terms, or at all. Our financial condition and results of operations would be adversely affected if we were unable to obtainfinancing, or obtain cost-effective financing.

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At September 30, 2008 our total indebtedness had a 5.3 year weighted average term to maturity bearing a weightedaverage contractual interest rate of 5.92%.

Our operations are impacted by interest rates as interest expense represents a significant cost in the ownership of our real estate investments. At September 30, 2008 we had aggregate contractual debt (“mortgages and debenturespayable”) principal maturities through to December 31, 2010 of $742.1 million (23% of our aggregated debt) with aweighted average contractual interest rate of 6.48%. Should such amounts be refinanced upon maturity at an aggregateinterest rate differential of 100 basis points, our operations would be impacted by approximately $7 million annually.

We seek to reduce our interest rate risk by staggering the maturities of our long term debt and limiting the use offloating rate debt so as to minimize exposure to interest rate fluctuations. At September 30, 2008, 0.7% of ouraggregate debt was at floating interest rates.

A further risk to our growth program and the refinancing of our debt upon its maturity, in the current economicclimate, is that of not having sufficient debt and equity capital available to us. Given the relatively small size of theCanadian marketplace accessing domestic capital may become increasingly more difficult. We work to mitigate this potential risk by constantly seeking out new sources of capital and by staggering the maturities of our long term debt.

Also, certain significant expenditures involved in real property investments, such as property taxes, maintenancecosts and mortgage payments, represent obligations that must be met regardless of whether the property isproducing any income.

Liquidity Risk of Real Estate Investments

Real estate investments are relatively illiquid. This will tend to limit our ability to sell components of our portfoliopromptly in response to changing economic or investment conditions. If we were required to quickly liquidate our assets, there is a risk that we would realize sale proceeds of less than the current book value of our real estate investments.

Unexpected Costs or Liabilities Related to the Acquisition of Real Estate Investments

Although we conduct what we believe to be a prudent and thorough level of investigation in connection with ouracquisition of properties, an unavoidable level of risk remains regarding any undisclosed or unknown liabilities of, or issues concerning, the acquired properties and we may not be indemnified for some or all of these liabilities.Following an acquisition, we may discover that we have acquired undisclosed liabilities, which may be material.

Construction Risk

Our construction commitments are subject to those risks usually attributable to construction projects, which include:(i) construction or other unforeseeable delays; (ii) cost overruns; and (iii) the failure of tenants to occupy and payrent in accordance with existing lease agreements, some of which are conditional. Such risks are minimized throughthe provisions of our Declaration, which have the effect of limiting direct and indirect investments (net of relatedmortgage debt) in non-income producing properties to no more than 15% of the Adjusted Book Value of our unitholders’equity. Such developments may also be undertaken with established developers either on a co-ownership basis or byproviding them with mezzanine financing. With some exceptions, from time to time, for land in the high growth markets,generally we will not acquire or fund significant expenditures for undeveloped land unless it is zoned and an acceptablelevel of space has been pre-leased/pre-sold. An advantage of unenclosed, new format retail is that it lends itself tophased construction keyed to leasing levels, which avoids the creation of meaningful amounts of vacant space.

Environmental Risk

Environmental and ecological related policies have become increasingly important in recent years. Under variousfederal and provincial laws, we, as an owner or operator of real property, could become liable for the costs of removalor remediation of certain hazardous or toxic substances released on or in our properties or disposed of at otherlocations. The failure to remove, remediate such substances, or address through alternative measures prescribed bythe governing authority, may adversely affect our ability to sell such real estate or to borrow using such real estate ascollateral, and could potentially also result in claims against us. We are not aware of any material non-compliance,liability or other claim in connection with any of our properties, nor are we aware of any environmental condition withrespect to any properties that we believe would involve material expenditures by us.


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It is our policy to obtain a Phase I environmental audit conducted by a qualified environmental consultant prior toacquiring any additional property. In addition, where appropriate, tenant leases generally specify that the tenant willconduct its business in accordance with environmental regulations and be responsible for any liabilities arising outof infractions to such regulations. It is our practice to regularly inspect tenant premises that may be subject toenvironmental risk. We maintain insurance to cover a sudden and/or accidental environmental mishap.

Unitholder Liability

Our Declaration provides that no unitholder or annuitant under a plan of which a unitholder acts as trustee or carrier will be held to have any personal liability as such, and that no resort shall be had to the private property of any unitholder or annuitant for satisfaction of any obligation or claim arising out of or in connection with anycontract or obligation of RioCan. Only our assets are intended to be subject to levy or execution.

The following provinces have legislation relating to unitholder liability protection: British Columbia, Alberta,Saskatchewan, Manitoba, Ontario and Quebec. Certain of these statutes have not yet been judicially considered and it is possible that reliance on such statute by a unitholder could be successfully challenged on jurisdictional or other grounds.

Our Declaration further provides that, whenever possible, certain written instruments signed by us must contain aprovision to the effect that such obligation will not be binding upon unitholders personally or upon any annuitantunder a plan of which a unitholder acts as trustee or carrier. In conducting our affairs, we have acquired and mayacquire real property investments subject to existing contractual obligations, including obligations under mortgagesand leases that do not include such provisions. We will use our best efforts to ensure that provisions disclaimingpersonal liability are included in contractual obligations related to properties acquired, and leases entered into, in the future.

Income Taxes

We currently qualify as a mutual fund trust for income tax purposes. We are required by our Declaration to annuallydistribute all of our taxable income to unitholders and are therefore generally not subject to tax on such amounts. Inorder to maintain our current mutual fund trust status, we are required to comply with specific restrictions regardingour activities and the investments held by us. If we were to cease to qualify as a mutual fund trust, theconsequences could be material and adverse.

On June 22, 2007, Bill C-52, which significantly modifies the federal income taxation of certain publicly-traded trusts(such as income trusts and REITs) and partnerships, was enacted into law. The legislative changes apply to a publicly-traded trust that is a specified investment flow-through trust (a “SIFT”) which existed before November 1, 2006 (an“Existing Trust”) commencing with taxation years ending in or after 2011 provided that an Existing Trust does notexceed certain growth limitations (other than those Existing Trusts which qualify for the REIT Exemption).

Certain distributions attributable to a SIFT will not be deductible in computing the SIFT’s taxable income, and theSIFT will be subject to tax on such distributions at a rate that is substantially equivalent to the general tax rateapplicable to Canadian corporations. Distributions paid by a SIFT as returns of capital will not be subject to this tax.In accordance with the normal growth guidelines, released by the Minister of Finance on December 15, 2006, therewill be circumstances where an Existing Trust may lose its transitional relief where the Existing Trust undergoes“undue expansion”.

The new taxation regime will not apply to certain Existing Trusts that qualify for the REIT Exemption as defined in the legislative changes and as amended by draft legislation released on July 14, 2008. Accordingly, unless the REITExemption is applicable to us, the legislative changes could, commencing in 2011, impact the level of cash distributionswhich would otherwise be made by us. The legislative changes do not fully accommodate the current businessstructures used by many Canadian REITs and contain a number of technical tests that many Canadian REITs,including RioCan, will likely find difficult to satisfy. The Minister’s stated intention is to exempt REITs from taxation as SIFTs in recognition of “the unique history and role of collective real estate investment vehicles”. Accordingly, itis possible that changes to these technical tests will be made prior to 2011 in order to accommodate some or all ofthe existing Canadian REITs, including RioCan. Alternatively, if the legislation is not further changed, existing CanadianREITs, including RioCan, may need to restructure their affairs in order to limit the application of the new tax on SIFTs.

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On July 14, 2008, the Department of Finance (Canada) released draft legislation to clarify certain aspects of thelegislative changes which will be effective on January 1, 2011, subject to compliance with the normal growthguidelines. One of the proposed amendments is intended to exempt from the new rules a subsidiary trust orpartnership that (i) is not listed or traded on a stock exchange or other public market, and (ii) is, generally, not heldby any person or partnership other than a real estate investment trust, a taxable Canadian corporation, a SIFT trust, a SIFT partnership, or an excluded subsidiary entity (each as defined in the Income Tax Act). No assurances can begiven that the draft legislation will be implemented in its current form or at all.

In light of the foregoing, it is possible that the legislative changes as enacted, or proposed, will have an adverseeffect on us, commencing in 2011.

Selected Quarterly Consolidated Information

The following is a summary of certain key information:

(thousands of dollars, except per unit amounts)

2008 2007 2006

As at and for the quarter ended Q3 Q2 Q1 Q4 Q3 Q2 Q1 Q4

Total revenue $185,537 $194,385 $183,367 $193,397 $172,493 $179,507 $174,490 $171,088

Net earnings (loss) * 41,603 44,926 30,284 65,148 35,917 (106,107) 37,400 43,435

Net earnings (loss) per unit *

– basic and diluted 0.19 0.21 0.14 0.32 0.17 (0.51) 0.18 0.22

Total assets 5,335,745 5,330,717 5,169,211 5,250,056 5,122,095 4,942,570 4,940,651 4,607,963

Total mortgages

and debentures payable 3,226,018 3,200,783 3,193,454 3,235,248 3,125,173 2,925,770 2,929,440 2,780,587

Total distributions

to unitholders 75,035 74,172 71,399 71,044 69,168 68,851 67,625 65,784

Total distributions

to unitholders per unit 0.3400 0.3375 0.3375 0.3375 0.3300 0.3300 0.3300 0.3300

Net book value per unit ** 8.06 8.16 7.83 7.96 7.92 8.02 8.79 8.28

Market price per unit

– high 22.08 22.25 22.42 25.94 26.06 26.95 27.34 26.78

– low 18.60 19.50 18.10 20.42 21.75 22.80 23.69 22.75

– close 20.21 19.86 20.70 21.82 24.85 23.65 24.84 25.15

* Refer to our annual and interim MD&As issued for the three months ended March 31, 2008 and 2007, the six months ended June 30, 2008 and2007, the nine months ended September 30, 2008 and 2007, and for the years ended December 31, 2007 and 2006 for a discussion andanalysis relating to those periods.During the three and nine months ended September 30, 2008 we recorded non-cash charges for future income taxes to net earnings of $1 million and $6.7 million, respectively. During the four quarters of 2007 we recorded non-cash charges (recoveries) for future income taxes to earnings of $Nil, $150 million, $7 million and ($13) million, respectively. These charges relate to our future income tax liabilitiesrecorded as a result of Bill C-52, which received Royal Assent on September 22, 2007. These non-cash charges relate to temporarydifferences between the accounting and tax basis of our assets and liabilities, primarily relating to our real estate investments. Thesecharges have no current impact on our cash flows or distributions (see Future Income Taxes above).

** A non-GAAP measurement. Calculated by us as unitholders’ equity divided by units outstanding at the end of the period. Our method ofcalculating net book value per unit may differ from other issuers’ methods and accordingly may not be comparable to net book value perunit reported by other issuers.


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Se n io r Ma n a g e m e n t , Bo a rd o f Tru s te e s a n d Un i th o ld e r In fo r ma t i o n

Senior Management


Frederic A. WaksExecutive Vice President and Chief Operating Officer

Raghunath DavloorSenior Vice President and Chief Financial Officer

Donald MacKinnonSenior Vice President, Real Estate Finance

Jordan RobinsSenior Vice President, Planning and Development

Jeff RossSenior Vice President, Leasing

John BallantyneVice President, Asset Management

Michael ConnollyVice President, Construction

Therese CornelissenVice President and Chief Accounting Officer

Jonathan GitlinVice President, Investments

John HoVice President, Property Accounting

Danny KissoonVice President, Operations

Suzanne MarineauVice President, Human Resources

Maria RicoVice President, Financial Reporting and Risk Management

Kenneth SiegelVice President, Leasing

Board of Trustees

Paul Godfrey, C.M. 1,2,3,4

(Chairman of Board of Trustees)President and Chief Executive Officer,Toronto Blue Jays Baseball Club

Clare R. Copeland 1,2

Chair of Toronto Hydro Corporation

Raymond Gelgoot 4

Partner, Fogler, Rubinoff LLP

Frank W. King, O.C. 1,2

President, Metropolitan Investment Corporation

Dale H. Lastman 3

Co-Chair and Partner, Goodmans LLP

Ronald W. Osborne 1

Corporate Director

Sharon Sallows 3,4

Partner, Ryegate Capital Corporation

Edward Sonshine, Q.C.President and Chief Executive Officer,RioCan Real Estate Investment Trust1 member of the Audit Committee2 member of the Human Resources & Compensation Committee3 member of the Nominating & Governance Committee4 member of the Investment Committee

Unitholder Information

Head Office

RioCan Real Estate Investment TrustRioCan Yonge Eglinton Centre, 2300 Yonge Street, Suite 500P.O. Box 2386, Toronto, Ontario M4P 1E4Tel: 416-866-3033 or 1-800-465-2733Fax: 416-866-3020Website: www.riocan.comE-mail: [email protected]

Unitholder and Investor Contacts

Debra ChanDirector, Investor RelationsTel: 416-864-6483E-mail: [email protected]

Nancy MedlockInvestor Relations AdministratorTel: 416-306-2406E-mail: [email protected]

Auditors

Ernst & Young LLP

Transfer Agent and Registrar

CIBC Mellon Trust CompanyP.O. Box 7010, Adelaide Street Postal Station, Toronto, Ontario M5C 2W9Answerline: 1-800-387-0825 or 416-643-5500Fax: 416-643-5501Website: www.cibcmellon.comE-mail: [email protected]

Unit Listing

The units are listed on the Toronto Stock Exchange under the symbol REI.UN.

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RioCan’s results for the third quarter of 2008 were solid, despite the dramatic turmoil the world’s financial and real estatemarkets are experiencing. RioCan was created and structured to withstand this type of uncertainty and as I sometimes joke, “RioCan was built for safety, not for speed.” This is certainly a time when our unitholders and investors generally,desire safety.

We believe that the fundamentals of the RioCan portfolio are of a nature that will stand up well to the recession that themedia and the markets tell us is inevitable. In fact, we experienced strong leasing activity during the third quarter, and, as a result, our occupancy remained stable quarter over quarter at 97% and our retention ratio of renewals was 93.9%.

Our basic approach to the real estate business hasn’t changed over the years. We seek the best locations, tenant them with the strongest retailers in Canada, and then manage them to maximize income for ourselves and our tenants.

RioCan’s financial position is strong. We have a very conservative debt profile with low leverage and good access to capital, which will allow us to act on any opportunities that may arise. RioCan’s leverage at September 30 was at 54.6% of historical cost, well below the 60% allowed by our Declaration of Trust. On this basis, we could incur additionalindebtedness of approximately $800 million and still not exceed the 60% leverage limit. And as we are certain that our assets are worth far more than book, even in the current uncertain market, we believe our actual leverage is under 45% of fair market value.

The diversification of our revenue sources has never been better. Our top 25 tenancies include most of the best Canadianand American retailers. We have an excellent portfolio of over 5,500 tenancies that are well diversified. Currently ourlargest tenant represents only 5.4% of our annualized rental revenue and once you move beyond our top 15 revenuesources, no one tenant represents more than 1%. We have reduced our exposure through geographical diversification, by staggering lease maturities and ensuring that a considerable portion, about 83%, of our rental revenue is earned fromnational and anchor tenants.

In Canada, there are typically no more than a handful of major players in each retail market segment and often only one or two. Although this could be viewed as a negative due to less competition with the attendant slower rent growth, thepositive, is that these dominant retailers are well financed and able to weather any economic storms.

And finally, one of our basic strategies is to establish and maintain relationships with the best possible partners. Some of our current partners include Kimco Realty Corporation, Sun Life Assurance Company of Canada and CPP Investment Board(“CPPIB”) – all stellar names. On October 23, we announced another development with CPPIB at East Hills in Calgary. Thisagreement follows a previous announcement made in June 2008 that we sold an ownership interest in two developments to CPPIB including Jacksonport located in Calgary and St. Clair Avenue and Weston Road located in Toronto. In addition tothese three developments, we enjoy an existing relationship with CPPIB at three other RioCan developed properties locatedin Calgary, Edmonton and Oakville.

RioCan has created a unique vehicle, with a solid base to access the best possible opportunities for our unitholders. The dynamics of the financial markets and global economy are constantly changing, and RioCan is in an excellent position to weather any uncertainties that may come our way.

Once again, please let me take this opportunity to thank you, our unitholders, for your continued confidence in us.


October 28, 2008

Dear Fe l low Uni tho lder :

Edward Sonshine, Q.C.President and ChiefExecutive Officer,RioCan Real Estate Investment Trust



CANADA’S MAJOR MARKET REIT

RIOCAN REAL ESTATE INVESTMENT TRUST

THIRD QUARTER REPORT 2008

3RioCan Real Estate Investment TrustRioCan Yonge Eglinton Centre2300 Yonge Street, Suite 500 P.O. Box 2386, Toronto, Ontario M4P IE4T 416-866-3033 or 1-800-465-2733F 416-866-3020W www.riocan.com

ROOTED IN THE MAJOR MARKETS RIOCAN REAL ESTATE …s1.q4cdn.com/847730316/files/RioCan_Q3_2008_full_v6np.pdf · Real Estate Portfolio Fact Sheet R I O C A N R E A L E S T A T E I N

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