News

Dream Industrial Real Estate Investment Trust (DIR.UN-TSX) has reported its financial results for the three and nine months ended September 30, 2024, showcasing a robust performance and a promising outlook for the future. The Trust's management team, led by President & Chief Executive Officer Alexander Sannikov, highlighted the strong leasing momentum, organic growth initiatives, and strategic capital allocation as key drivers of the Trust's success.

Unlocking Value Through Strategic Execution

Solid Leasing Activity Fuels Organic Growth

Dream Industrial REIT has demonstrated impressive leasing momentum across its portfolio, with over 1.9 million square feet of leases transacted since the end of Q2 2024. The Trust achieved an average rental rate spread of 25.3% over prior or expiring rents, showcasing its ability to capture the upside in the market. In Canada, the Trust signed 1.2 million square feet of leases, achieving an average rental rate spread to expiry of 38.6% and an average annual contractual rent growth of over 3.0%. In Europe, the Trust signed 0.7 million square feet of leases at an average rental rate spread of 9.9%, with all leases fully indexed to local consumer price indices (CPI) or having contractual rent steps.The Trust's strong leasing performance has contributed to a healthy occupancy level, with in-place and committed occupancy at 95.5% as of September 30, 2024. The Trust continues to be in active discussions with prospective tenants and expects significant opportunities to capture strong income growth as spaces are leased.

Driving Consistent NOI Growth

Dream Industrial REIT's focus on organic growth initiatives has translated into solid performance, with Comparative Properties Net Operating Income (CP NOI) on a constant currency basis growing by 3.3% for the three months ended September 30, 2024, and 5.1% for the nine months ended September 30, 2024, compared to the prior year periods. The Canadian portfolio posted year-over-year CP NOI growth of 5.9% for the three months ended September 30, 2024, driven by strong performance in Ontario, Québec, and Western Canada. In Europe, year-over-year CP NOI growth was 1.9% for the nine months ended September 30, 2024, driven by higher rental rates on new and renewed leases, as well as CPI indexation.

Enhancing Portfolio Quality Through Capital Recycling

During the quarter, the Trust completed the disposition of a non-strategic asset in the Netherlands for total gross proceeds of million, representing an 8% premium over carrying value. Subsequent to the quarter, the Trust also disposed of an asset in Montréal, Québec for total gross proceeds of .3 million, representing a 17% premium over carrying value. These strategic dispositions demonstrate the Trust's focus on continuously upgrading the quality of its portfolio.Additionally, the Trust is currently under contract to acquire 6 million ( million at Dream Industrial's share) of assets located across Canada, including a 32-acre development site in Brampton, Ontario, with the Development JV. These acquisitions are expected to further enhance the Trust's portfolio and drive long-term value creation.

Maintaining a Strong Financial Position

Dream Industrial REIT continues to maintain a robust financial position, with a net total debt-to-total assets (net of cash and cash equivalents) ratio of 36.3% as of September 30, 2024. The Trust's unencumbered asset pool totaled .8 billion as of September 30, 2024, representing 82.2% of the Trust's investment properties value.During the quarter, the Trust extended the maturity date of its 0 million unsecured term loan by two years, from February 2026 to March 2028, to match the associated cross-currency interest rate swap. The Trust also upsized its unsecured revolving credit facility from 0 million to 0 million and extended the maturity to August 2029, further enhancing its liquidity profile.As of the end of Q3 2024, the Trust had available liquidity of 0.5 million, including .7 million in cash and cash equivalents, and an additional 0 million that could be exercised through the accordion on its unsecured credit facility. This strong liquidity position positions the Trust well to execute on its strategic initiatives and capitalize on future growth opportunities.

Outlook: Continued Momentum and Value Creation

Looking ahead, Dream Industrial REIT remains focused on driving organic growth, enhancing its portfolio quality through strategic capital recycling, and maintaining a strong financial position. The Trust's robust leasing activity, development pipeline, and strategic acquisitions are expected to continue fueling its growth trajectory.Lenis Quan, Chief Financial Officer of Dream Industrial REIT, commented, "We have addressed all of our 2024 debt maturities and our total available liquidity of over 0 million positions us well to execute on our strategic initiatives. Looking forward to 2025, we have 0 million of Euro-denominated debt maturing next year at an average rate of 0.6%. We expect the organic NOI growth embedded within our portfolio will continue to outpace the higher interest rates and drive FFO per Unit growth."With its strong operational performance, strategic capital allocation, and prudent financial management, Dream Industrial REIT is well-positioned to deliver on its goal of providing strong total returns to its unitholders through secure distributions and growth in net asset value and cash flow per unit.