TORONTO, ONTARIO--(MARKET WIRE)--Jul 28, 2008 -- RioCan Real Estate Investment Trust ("RioCan")(Toronto:REI-UN.TO - News) today announced its financial results for the three and six months ended June 30, 2008.

Financial Highlights

RioCan reported net earnings for the quarter ended June 30, 2008 of $44,926,000 (21 cents per unit basic and diluted) as compared to a net loss of $106,107,000 (a loss of 51 cents per unit basic and diluted) for the three months ended June 30, 2007. For the six months ended June 30, 2008, RioCan reported net earnings of $75,210,000 (35 cents per unit basic and diluted) as compared to a net loss of $68,707,000 (a loss of 33 cents per unit basic and diluted) for the comparable period in 2007. The increase in net earnings for both the three and six months ended June 30, 2008 is primarily related to growth in net operating income due to growth in the portfolio, gains realized from the partial disposition of interests in two development properties, and a lower non-cash charge for future income taxes.

For the quarter ended June 30, 2008, rental revenue was $169,863,000 as compared to $158,309,000 for the three months ended June 30, 2007. Rental revenue for the six months ended June 30, 2008 was $342,985,000 versus $323,265,000 for the comparable period in 2007.

Funds from operations ("FFO") for the quarter ended June 30, 2008 was $86,399,000 (40 cents per unit) as compared to $79,753,000 (38 cents per unit) for the three months ended June 30, 2007. For the six months ended June 30, 2008, FFO was $154,065,000 (72 cents per unit) as compared to $151,091,000 (73 cents per unit) for the six months ended June 30, 2007.

RioCan's Unaudited Interim Consolidated Financial Statements, Management's Discussion and Analysis and a Supplemental Information Package as at and for the three and six months ended June 30, 2008 are available on RioCan's website at www.riocan.com.

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

Portfolio Stability

As at June 30, 2008:

- Portfolio occupancy was 97.0%;

-66.6% of rental revenue was derived from properties located in Canada's six high growth markets (including and surrounding Calgary, Edmonton, Montreal, Ottawa, Toronto and Vancouver);

- 83.5% of annualized rental revenue was derived from, and 82.9% of space was leased to, national and anchor tenants; and

- No individual tenant comprised more than 5.4% of annualized rental revenue.

Portfolio Activity

Today's acquisition market continues to remain extremely competitive. Despite this, on June 4, 2008, RioCan announced that it had agreed to acquire a ten property portfolio located in central and eastern Canada, totalling approximately 1.1 million square feet of new format and strip retail centres. The portfolio was acquired on a 50/50 basis with Kimco on June 26, 2008 through the creation of a second joint venture partnership, RioKim II.

RioKim II is a non-exclusive partnership with Kimco. RioCan will source, lease, asset and property manage any property in the joint venture and will be paid market fees for so doing. Additional properties may be acquired under this partnership as opportunities arise but there are currently no further acquisitions being contemplated and RioCan is under no obligation with respect to any further additional acquisitions.

The portfolio features several new format retail centres in a number of primary markets including Montreal and Ottawa, and is complemented by a number of neighbourhood strip centres in Halifax, Gatineau, Hawkesbury, Belleville, Fergus, London and Chatham. The weighted average lease term of the portfolio is 9.3 years and approximately 90% of the portfolio is comprised of national and regional tenants such as Wal-Mart, Zellers, Canadian Tire, Metro Inc., Shoppers Drug Mart, Best Buy, Linens 'N' Things and Price Chopper.

Development Activity

RioCan's development program remained robust throughout the second quarter. Approximately 10.2 million square feet was under development, of which RioCan's interest upon completion will be approximately 4.1 million square feet. In addition to the 10.2 million square feet of current developments, an additional 4.1 million square feet is in the development pipeline. Highlights for some of these projects include:

- Lowe's Agreements - On April 4, 2008, RioCan announced that it had entered into two agreements to lease with Lowe's Companies Canada ("Lowe's") to open two new home improvement stores in Ontario. Both agreements are land leases, with the tenant building the store at its own expense. The first agreement to lease is for a Lowe's store that will form part of RioCan's greenfield shopping centre development site situated at Taunton Road and Garrard Road in Whitby, Ontario. Upon completion, the development will feature Lowe's, a Canadian chartered bank and two additional commercial retail buildings. Site work has already 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 RioCan's existing property, RioCan Warden Centre, located at Warden Avenue and Eglinton Avenue in Toronto, Ontario, which is adjacent to our development property at Eglinton Avenue and Warden Avenue. RioCan Warden Centre is a 250,000 square foot new format retail centre featuring a number of national retailers. In order to accommodate Lowe's, the former Wal-Mart premises was demolished and a new Lowe's store will be constructed in its place with an anticipated opening date in 2009.

- Vaughan, Ontario - On May 26, 2008, RioCan announced that it had commenced development of its greenfield site in Vaughan, Ontario. The development, a joint venture project with Trinity Development Group Inc. ("Trinity") and Strathallen Capital Corp., is located at the southwest corner of Highway 27 and Langstaff Road at the Highway 427 Extension.

Upon full completion, this new format retail centre will total approximately 520,000 square feet of leasable area. Phase one of the project features approximately 262,000 square feet. A Wal-Mart Supercentre (land lease) will occupy approximately 213,000 square feet and the remainder of the phase one retail space has been pre-leased to a number of national tenants. Construction of the Wal-Mart Supercentre is underway with an anticipated opening of January 2009.

- CPPIB Joint Venture - On June 25, 2008, RioCan, Trinity and CPPIB announced that they had entered into a firm agreement for RioCan and Trinity to sell a 50% non-managing interest in two developments to CPPIB. This deal closed prior to quarter end. RioCan, along with its development partner Trinity, will manage all aspects of the development, construction and leasing of the properties and will earn market based fees for doing so. Upon completion, RioCan will be responsible for property management, asset management and leasing.

The two developments are Jacksonport located in Calgary, Alberta and St. Clair Avenue and Weston Road located in Toronto, Ontario. Jacksonport is a 100-acre development that will consist predominately of new format retail. The St. Clair and Weston development features over 19 acres and will ultimately feature approximately 570,000 square feet of retail space. The total development cost of the two projects is expected to aggregate approximately $375 million. Under the agreement, RioCan and Trinity will each retain a 25% ownership interest in the two developments.

This new joint venture expands RioCan's relationship with one of Canada's largest pension funds. RioCan and CPPIB are currently partners at three other RioCan projects including RioCan Beacon Hill located in Calgary, Alberta, RioCan Centre Burloak located in Oakville, Ontario, and RioCan Meadows located in Edmonton, Alberta.

Financing Transactions

In April 2008, RioCan completed its issuance of 6,200,000 trust units for $21.05 per unit for gross proceeds of $130,510,000. In addition, the underwriters purchased an additional 930,000 units at $21.05 per unit pursuant to their over-allotment option. The gross proceeds of the over-allotment exercise were $19,576,500. The underwriting syndicate for the offering was co-led by RBC Capital Markets and BMO Capital Markets.

On July 9, 2008, RioCan announced that it has received payment for its $30 million secured convertible debenture from Retrocom. The debenture bore interest at a rate of 4.5% and arose as partial consideration from the sale by RioCan of seven enclosed mid-market mall shopping centres to Retrocom in 2005.

"RioCan's current cash position remains strong. We have refinanced or committed virtually all mortgages maturing in 2008 at overall interest rates lower than the debt being repaid. The recent equity offering, along with the repayment of our $30 million secured debenture from Retrocom, has put RioCan in an enviable position to react quickly and aggressively on acquisition opportunities," said Edward Sonshine, Q.C., President and CEO of RioCan.

Conference Call and Webcast

Interested parties are invited to participate in a conference call with management on Tuesday, July 29, 2008 at 11:00 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 416-641-6120 or 1-866-303-7746. If you cannot participate in the live mode, a replay will be available until August 12, 2008. To access the replay, please dial 416-695-5800 or 1-800-408-3053 and enter passcode 3265095#.

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

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

About RioCan

RioCan is Canada's largest real estate investment trust with a total capitalization of approximately $7.6 billion. It owns and manages Canada's largest portfolio of shopping centres with ownership interests in a portfolio of 227 retail properties, including 15 under development, containing an aggregate of almost 59 million square feet. For further information, please refer to RioCan's website at www.riocan.com.

Forward-Looking Information

This news release contains forward-looking statements within the meaning of applicable securities laws. These statements include, but are not limited to, statements concerning our objectives, our strategies to achieve those objectives, as well as statements with respect to management's beliefs, plans, estimates, and intentions, and similar statements concerning anticipated future events, results, circumstances, performance or expectations that are not historical facts. Forward-looking statements generally can be identified by the use of forward-looking terminology such as "outlook", "objective", "may", "will", "expect", "intend", "estimate", "anticipate", "believe", "should", "plans" or "continue", or similar expressions suggesting future outcomes or events. Such forward-looking statements reflect management's current beliefs and are based on information currently available to management.

These statements are not guarantees of future performance and are based on our estimates and assumptions that are subject to risks and uncertainties, including those described under Risks and Uncertainties in the MD&A available on www.sedar.com, which could cause our actual results to differ materially from the forward-looking statements contained herein. 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 that were 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 retail environment than we have seen for the last few years; interest costs to us remain relatively stable; acquisition capitalization rates increase and land costs for greenfield development decrease; a 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 future growth program and refinance our debts as they mature. Although the forward-looking information contained herein is based upon what management believes are reasonable assumptions, there can be no assurance that actual results will be consistent with these forward-looking statements. All forward-looking statements in this press release are qualified by these cautionary statements. Except as required by applicable law, RioCan undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.

     Contacts:
     RioCan Real Estate Investment Trust
     Rags Davloor
     Senior Vice President & CFO
     (416) 642-3554
     Website: http://www.riocan.com