RioCan Real Estate Investment Trust Announces Fourth Quarter and 2006 Results

2006 HIGHLIGHTS

- Net earnings increased 23% to $164 million
- Total rental revenue increased 3% to $580 million
- FFO increased 11% to $287 million
- FFO per unit increased 9% to $1.45
- RDI per unit increased 2% to $1.4456
- Occupancy increased to 97.7%
- $208 million in acquisitions

RioCan Real Estate Investment Trust ("RioCan") today announced its financial results for the three and twelve months ended December 31, 2006.

Financial Highlights

For the twelve months ended December 31, 2006, RioCan reported net earnings of $163,812,000 ($0.83 per unit basic and diluted) as compared to $132,574,000 ($0.68 per unit basic and diluted) for the comparable period in 2005. Net earnings for the quarter ended December 31, 2006, increased to $43,435,000 ($0.22 per unit basic and diluted) from $37,308,000 ($0.19 per unit basic and diluted) for the three months ended December 31, 2005.

Total rental revenue for the twelve months ended December 31, 2006, was $580,472,000 versus $563,739,000 for the comparable period in 2005. For the quarter ended December 31, 2006, total rental revenue was $151,181,000 as compared to $138,949,000 for the three months ended December 31, 2005.

Distributable income ("RDI") for the year ended December 31, 2006, was $286,440,000 ($1.4456 per unit) as compared to $275,046,000 ($1.4167 per unit) for 2005. For the quarter ended December 31, 2006, RDI was $77,421,000 ($0.3883 per unit) versus $66,052,000 ($0.3375 per unit) for the three months ended December 31, 2005.

Funds from operations ("FFO") for the year ended December 31, 2006, increased to $286,555,000 ($1.45 per unit) from $257,358,000 ($1.33 per unit) for 2005. For the quarter ended December 31, 2006, FFO was $77,115,000 ($0.39 per unit) as compared to $66,455,000 ($0.34 per unit) for the three months ended December 31, 2005.

RioCan's Consolidated Financial Statements, Management's Discussion and Analysis and a Supplemental Information Package for the year ended December 31, 2006, along with 2006 Income Tax Information, are available on RioCan's website at www.riocan.com.

Both RDI and FFO are widely accepted supplemental measures of a Canadian real estate investment trust's performance. RDI and FFO should not be construed as an alternative to net earnings or cash flow from operating activities determined in accordance with the Canadian generally accepted accounting principles. RioCan's method of calculating RDI and FFO may differ from certain other issuers' methods and accordingly may not be comparable to measures reported by other issuers.

Portfolio Stability

At the end of 2006:

- Portfolio occupancy was 97.7%;

- Over 63% of annualized rental revenue was derived from properties located in six Canadian high population growth markets (including and surrounding, Calgary, Edmonton, Montreal, Ottawa, Toronto and Vancouver);

- 82.8% of annualized rental revenue was derived from, and 82.5% of space was leased to, national and anchor tenants;

- Over 51.1% of annualized rental revenue was derived from our 25 largest tenants; and

- No individual tenant comprised more than 5.9% of annualized rental revenue.

Leasing Activities

Leasing activities remained strong throughout the year and RioCan continues to be the dominant retail landlord in Canada with almost 5,000 tenancies from coast-to-coast. Although the total number of new leasing agreements decreased slightly to 454 (1,983,000 square feet) in 2006 from 458 (2,067,000 square feet) in 2005, total annualized net operating income of the new leasing agreements increased 3.8% to $31,958,000 in 2006 from $30,798,000 in 2005, indicative of a trend towards higher rents. The total number of new leasing agreements to national and anchor tenants ("nationals") increased 14.5% to 253 (1,532,000 square feet) in 2006 from 221 (1,510,000 square feet) in 2005, which increased total annualized net operating income from the new leasing agreements to nationals by 6.6% to $24,696,000 in 2006 from $23,159,000 in 2005.

In 2006, RioCan entered into three lease agreements and one land sale agreement with Wal-Mart where it will become a shadow anchor of a larger centre. Two of the lease agreements and the sale agreement are signed and are at various stages of satisfaction of conditions. The other lease is for a store expansion at RioCan's Wal-Mart Belleville location in Ontario. The current 127,300 square foot store will be expanded to accommodate Wal-Mart's superstore format totalling approximately 186,000 square feet. Owning the dominant new format retail centre in Belleville solidifies RioCan's presence in this strong secondary market.

Development Program

Project activities for RioCan's development program were robust throughout the fourth quarter. At the end of the fourth quarter, over 6.5 million square feet was under development, of which RioCan's interest was approximately 3 million square feet. Fourth quarter highlights for some of the developments include:

- Oakville, Ontario - RioCan continues its site work and has entered into construction contracts for its RioCan Centre Burloak development located at the intersection of Burloak Drive and Queen Elizabeth Way. Upon full completion, this new format retail centre will comprise approximately 547,000 square feet of retail space.

Almost 100% of the development has been pre-leased. Anchors include a Home Depot (retailer owned), Cineplex Odeon, Longo's and Home Outfitters. The fashion area will include such names as Urban Planet, Suzy Shier, Jacob, Tommy Hilfiger, Guess, La Vie En Rose, Reitmans, Liz Claiborne and Le Chateau. The property will also feature a number of home furnishing stores including Urban Barn, Kitchen Stuff Plus, Solutions, Structube, Bowring and Benix & Co. Store openings will be phased-in beginning fall 2007.

- Richmond Hill, Ontario - Construction is ongoing at Richmond Green Marketplace, RioCan's development joint venture with Trinity Development Group Inc. This 439,000 square foot new format retail centre will be anchored by a retailer owned Home Depot (121,000 square feet) and will be tenanted by, amongst others, Costco, PetSmart, Staples/Business Depot, Michaels, Mark's Work Wearhouse, Reitmans, The Shoe Company, Kelsey's, Starbucks, Scotiabank and TD Canada Trust. Store openings will be phased-in beginning fall 2007.

Land Use Intensification Program

As part of RioCan's ongoing land use intensification program, the current portfolio is continuously reviewed to identify existing properties that can be redeveloped to maximize value, mainly in Canada's six high growth markets, which have in excess of 1 million people and have experienced consistent population growth. Highlights of some of RioCan's current land use intensification projects include:

- Mississauga, Ontario - RioCan continues the redevelopment of Mississauga Plaza, located at Dixie Road and Dundas Street. The 175,000 square foot plaza is currently under renovation including the conversion of a former Zellers to Premier Fitness, Talize and Thrift Magic. The redevelopment also allows for an expansion of an existing Price Chopper. Tenants are expected to open by spring/summer 2007.

- Mississauga, Ontario - In December 2006, RioCan announced that it had entered into a firm agreement with Spectrum Seniors Housing Development LP ("Spectrum") for the purpose of creating a joint venture to develop a mixed-use building at one of RioCan's existing properties, Clarkson Village. Upon completion of the rezoning process, Chartwell Seniors Housing REIT ("Chartwell") will manage the project.

The property, located at the corner of Lakeshore Road West and Clarkson Road, will be redeveloped to accommodate a mixed-use building featuring approximately 144 seniors housing units, along with approximately 14,000 square feet of retail street-front space. The project will be co-developed by RioCan and Spectrum. Upon completion and stabilization, Chartwell will have the option to acquire a 100% ownership interest in the property.

- Toronto, Ontario - RioCan continues the planning approval process with Tribute Communities to redevelop an existing property located at the corner of Avenue Road and Fairlawn Avenue. Comprising over 1.5 acres, the existing retail facility will be redeveloped to accommodate a mixed-use building featuring a significant residential component, along with at least 25,000 square feet of retail street-front space. The matter is scheduled to come before the Ontario Municipal Board in April.

Conference Call and Webcast

Interested parties are invited to participate in a conference call with management on Wednesday, February 7, 2007 at 9:00 a.m. Eastern Time. You will be required to identify yourself and the organization on whose behalf you are participating.

In order to participate, please dial 416-695-5259 or 1-877-461-2814. If you cannot participate in the live mode, a replay will be available until March 7, 2007. To access the replay, please dial 416-695-5275 or 1-888-509-0081 and enter passcode 638603.

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

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

About RioCan

RioCan is Canada's largest real estate investment trust with a total market capitalization of approximately $8 billion. It owns and manages Canada's largest portfolio of shopping centres with ownership interests in a portfolio of 206 retail properties, including 9 under development, containing an aggregate of over 52.1 million square feet. For further information, please refer to RioCan's website at www.riocan.com.

Website: www.riocan.com