Dream Industrial REIT Reports Strong Q1 2025 Financial Results

This press release contains forward-looking information that is based upon assumptions and is subject to risks and uncertainties as indicated in the cautionary note contained within this press release. All dollar amounts are in Canadian dollars unless otherwise indicated.TORONTO–(BUSINESS WIRE)–Dream Industrial Real Estate Investment Trust (DIR.UN-TSX) or (the “REIT” or “Trust” or “Dream Industrial REIT” or “DIR” or “we” or “us”) today announced its financial results for the three months ended March 31, 2025. Management will host a conference call to discuss the financial results on May 7, 2025 at 11:00 a.m. (ET).HIGHLIGHTSDiluted funds from operations (“FFO”) per Unit(1) was $0.26 in Q1 2025, a 5.8% increase when compared to $0.24 in Q1 2024.Comparative properties net operating income (“CP NOI”) (constant currency basis)(2) was $96.5 million in Q1 2025, a 3.1% increase when compared to $93.6 million in Q1 2024.Closed on over $460 million of acquisitions across the Trust ’s wholly-owned portfolio and private ventures since the beginning of 2025, adding over 1.2 million square feet of GLA and over 31 acres of land to the Trust’s owned and managed portfolio.Signed 1.5 million square feet of new leases and renewals across the Trust’s wholly-owned portfolio at a weighted average rental spread of 23.1% from the beginning of 2025 until April 30, 2025, driven by rental rate spread of 57.2% in Ontario, 51.4% in Québec, 8.8% in Western Canada and 16.4% in Europe.Addressed approximately 50% of the total debt maturity of $850 million due in 2025, and currently evaluating various alternatives for the remaining maturity.Net rental income was $91.7 million in Q1 2025, a 6.8% increase when compared to $85.9 million in Q1 2024, driven by 14.3% in Ontario, 7.1% in Québec, 6.4% in Western Canada and 5.3% in Europe, excluding disposed investment properties.Net income was $47.5 million in Q1 2025 , a 36.3% decrease when compared to $74.6 million in Q1 2024. The net income in Q1 2025 was comprised of net rental income of $91.7 million, fair value loss in investment properties of $18.9 million, fair value gain in financial instruments of $4.5 million and other net expenses of $29.8 million.Total assets were $8.1 billion as at March 31, 2025, consistent with December 31, 2024, driven by investments in the Dream Summit JV(3) and development projects, partially offset by the disposition of certain non-core assets.1.Diluted FFO per Unit and NAV per Unit are non-GAAP ratios. For further information on this non-GAAP ratio, please refer to the statements under the heading “Non-GAAP financial measures, ratios and supplementary financial measures” in this press release.2.CP NOI (constant currency basis) and Total equity (including LP B Units) are non-GAAP financial measures. The tables included in the Appendices section of this press release reconcile these non-GAAP financial measures with their most directly comparable IFRS financial measures. For further information on this non-GAAP financial measure, please refer to the statements under the heading “Non-GAAP financial measures, ratios and supplementary financial measures” in this press release.3.A joint venture between GIC and the Trust in which the Trust has a 10% interest.Total equity (per condensed consolidated financial statements) was $4.8 billion as at March 31, 2025, a 1.8% increase when compared to $4.7 billion as at December 31, 2024.Total equity (including LP B Units)(2) was $4.9 billion as at March 31, 2025 , consistent with December 31, 2024.Implemented a normal course issuer bid (“NCIB”) program effective March 10, 2025, with 1,918,566 REIT Units purchased for cancellation at a weighted average price of $10.42 per REIT Unit subsequent to the quarter to May 6, 2025.Net asset value (“NAV”) per Unit(1) was $16.76 as at March 31, 2025, relatively consistent with NAV per Unit of $16.79 as at December 31, 2024.FINANCIAL HIGHLIGHTSSELECTED FINANCIAL INFORMATION(unaudited)Three months endedMarch 31,March 31,(in thousands of dollars except per Unit amounts)20252024Operating resultsNet rental income$91,710$85,861Comparative properties net operating income (“NOI”) (constant currency basis)(1)$96,500$93,554Net income$47,488$74,575Funds from operations (“FFO”)(2)$74,602$69,303FFO – diluted per Unit(3)(4)$0.26$0.24Distribution rate per Unit$0.17$0.17FFO payout ratio(3)69.0%73.2%See footnotes at end.PORTFOLIO INFORMATIONAs atMarch 31,December 31,March 31,(in thousands of dollars)202520242024Total portfolioNumber of assets(5)(6)336335345Investment properties fair value$7,134,982$7,031,713$6,966,554Gross leasable area (“GLA”) (in millions of sq. ft.)(6)72.671.871.8Occupancy rate – in-place and committed (period-end)(7)95.4%95.8%96.4%Occupancy rate – in-place (period-end)(7)94.5%95.3%95.7%See footnotes at end.FINANCING AND CAPITAL INFORMATION(unaudited)As atMarch 31,December 31,March 31,(in thousands of dollars except per Unit amounts)202520242024FINANCINGCredit rating – DBRSBBB (mid)BBB (mid)BBB (mid)Net total debt-to-total assets (net of cash and cash equivalents) ratio(8)36.9%36.1%36.1%Net total debt-to-normalized adjusted EBITDAFV ratio (years)(9)8.27.08.5Interest coverage ratio (times)(10)5.25.25.5Weighted average face interest rate on debt (period-end)2.78%2.47%2.51%Unencumbered investment properties (period-end)(11)$5,986,352$5,799,700$5,560,492Unencumbered investment properties as a percentage of investment properties(11)83.9%82.3%79.8%Total assets$8,143,318$8,122,554$7,995,745Cash and cash equivalents$35,707$80,277$116,054Available liquidity(12)$751,325$822,395$608,949CAPITALTotal equity (per condensed consolidated financial statements)$4,818,351$4,731,073$4,635,461Total equity (including LP B Units)(13)$4,902,575$4,888,696$4,811,369Total number of Units (in thousands)(14)292,512291,167287,829Net asset value (“NAV”) per Unit(15)$16.76$16.79$16.72Unit price$11.30$11.81$13.18See footnotes at end.“DIR continued to execute on its goal of driving organic growth and maintaining a resilient balance sheet. Our highly diversified and urban portfolio delivered 6% FFO per unit growth and 3% comparative properties NOI growth in the first quarter, while addressing half of our 2025 debt maturities,” said Alexander Sannikov, President & Chief Executive Officer of Dream Industrial REIT. “Leasing momentum remains healthy with 2.3 million square feet of new leases completed or in advanced negotiations across our platform. We remain committed to disciplined capital allocation, balancing a conservative balance sheet with pursuing accretive opportunities including selective Unit buybacks. With all of our growth drivers intact, we are confident in the ongoing resilience of our business.”ORGANIC GROWTHContinued strong leasing momentum at attractive rental spreads – From January 1, 2025 through to April 30, 2025, the Trust has transacted 1.5 million square feet of leases across its wholly-owned portfolio at a weighted average rental rate spread of 23.1% over prior or expiring rents.In Canada, the Trust signed over 0.7 million square feet of leases, achieving a weighted average rental rate spread to expiry of 30.2% and average annual contractual rent growth of 3.1%.In Europe, the Trust signed over 0.7 million square feet of leases at a weighted average rental rate spread of 16.4%. All of the leases are fully indexed to local consumer price indices (“CPI”) or have contractual rent steps.Overall, the leasing activity across the Trust’s wholly-owned portfolio and private ventures remained robust in 2025.In Ontario and Québec, the Trust signed 1.6 million square feet of new leases and renewals (0.4 million square feet at the Trust’s share) at a weighted average rental spread of 55.6% over prior rent.In Western Canada, the Trust signed 0.7 million square feet of new leases and renewals (0.5 million square feet at the Trust’s share) at a weighted average rental spread of 10.8% to prior rent. The Trust is in active new lease negotiations on 690,000 square feet, including 450,000 square feet at its recently completed Balzac developments. Pro forma these pending new leases, the occupancy at those projects would exceed 90%.In Europe, over 0.7 million square feet of new leases and renewals were signed at a weighted average rental spread of 16.4% to prior rent, including the lease-up of a 141,000 square foot vacancy in France.As at March 31, 2025, estimated market rents exceeded the average in-place rent by 28.2% and 5.6% across the Trust’s wholly-owned portfolio in Canada and Europe, respectively. Along with capturing substantial rental rate growth, the Trust systematically adds contractual annual rental rate escalators to its leases resulting in consistently growing CP NOI (constant currency basis) over time. Currently, the average contractual annual rental rate growth embedded in the Trust’s Canadian portfolio equates to over 3.1%. In the Trust’s European portfolio, approximately 85% of the leases are indexed to the local consumer price index with the remainder of the portfolio having contractual rent steps.Solid pace of CP NOI (constant currency basis)(1) growth – CP NOI (constant currency basis) for the three months ended March 31, 2025 was $96.5 million, compared $93.6 million for the three months ended March 31, 2024, representing an increase of 3.1% compared to the prior year comparative quarter.The Canadian portfolio posted year-over-year CP NOI (constant currency basis) growth of 4.2% for the three months ended March 31, 2025, driven by 11.1% CP NOI growth in Ontario, partially offset by a 4.4% decrease in CP NOI growth in Québec and relatively flat year-over-year CP NOI growth in Western Canada.In Europe, year-over-year CP NOI (constant currency basis) increased by 1.6% for the three months ended March 31, 2025. The increase was driven by higher rental rates on new and renewed leases, in addition to CPI indexation.Healthy occupancy levels – The Trust’s in-place and committed occupancy was 95.4% as at March 31, 2025, relatively stable compared to 95.8% as at December 31, 2024. The Trust continues to be in active discussions with prospective tenants and it expects significant opportunities to capture strong income growth as spaces are leased.Growing property management and leasing platform – The Trust’s private ventures have completed over $1 billion of acquisitions over the past 24 months. Net property management and leasing margin for the three months ended March 31, 2025 was $3.0 million, representing an increase of $0.5 million or 18.9%, relative to the comparative prior year quarter. The increase was mainly driven by organic revenue growth and the increase in scale of the private ventures in 2025 and 2024.Continued growth in net rental income for the quarter – Net rental income for the three months ended March 31, 2025 was $91.7 million, compared to $85.9 million for the three months ended March 31, 2024, representing an increase of $5.8 million or 6.8%, relative to the comparative prior year quarter. Year-over-year net rental income increased by 14.3% in Ontario, 7.1% in Québec, 6.4% in Western Canada and 5.3% in Europe, excluding disposed investment properties. The increase was mainly driven by strong CP NOI (constant currency basis) growth over the past year, early lease renewals and lease-up at our development projects.ACQUISITIONS AND DISPOSITIONS UPDATEDuring the quarter, the Dream Summit JV closed on the previously announced $400 million of acquisitions ($40 million at DIR’s share). Subsequent to the quarter, the Dream Summit JV completed the acquisition of an asset for total gross purchase price of $59 million ($5.9 million at DIR’s share). The property is situated in Oakville, the Greater Toronto Area (“GTA”) West submarket, offering excellent access to major highways and is fully occupied. The site features substantial power capacity, making it well-suited for a broad spectrum of users such as manufacturers, small data centers and other high-power demand consumers. The low site coverage of 34% on a 17.3-acre lot provides future opportunity to generate additional revenue through trailer parking, outside storage or long-term redevelopment.The Trust expects these acquisitions to add over $2 million of incremental revenue to its property management and leasing platform on a run-rate basis.See Figure 1, Oakville, OntarioFurthermore, the Trust acquired a 3.8-acre land parcel for total gross purchase price of $4.1 million located in the Netherlands. The parcel is located directly adjacent to the REIT’s existing 289,000 square foot building in Helmond for which the Trust has entered into an agreement on a build-to-suit expansion and refurbishment with an expected unlevered yield on cost of 7%. The Trust will be adding over 120,000 square feet of high-quality distribution space to the property, improving the asset’s sustainability via the installation of solar roof panels and extending the existing tenant’s lease by an additional ten years, permitting the consolidation of the tenant’s operations within the REIT’s portfolio at this site.Additionally, during the quarter, the Trust completed the disposition of a non-strategic asset totalling 69,000 square feet located in the Netherlands for total gross proceeds of $11.4 million.VALUE-ADD INITIATIVES UPDATEThe Trust continues to advance its solar program with the completion of one project in the Netherlands at an estimated yield on cost of 10% during the quarter. Furthermore, the Trust commenced construction on four new projects in the Netherlands and added 28 projects to its feasibility pipeline, translating into over $110 million of potential additional investment volume at a targeted yield on cost of over 8% as the projects get delivered.The Trust is actively exploring new solar initiatives including the buyback of third-party solar rooftop systems on existing buildings and the repowering of existing solar installations with the objective of enhancing revenue generation. Subsequent to the quarter, the Trust entered into an agreement to acquire the existing rooftop solar system at an asset in Ottawa. The Trust plans to facilitate the repowering and upgrade of the system, enabling increased energy generation. With a total expected investment of $2 million, the Trust expects to achieve a yield on cost of 15% to 18%.Additionally, the Trust is advancing its strategy to upgrade power capacity at select properties within its portfolio for data centre uses. Recently, the Trust received positive preliminary feedback from utility providers for up to 180 megawatts (“MW“) of additional power capacity across three of its sites in Ontario and up to 40 MW of additional power capacity on one of its joint venture assets. Availability of this power is expected in phases over the next few years. The Trust intends to continue advancing its power procurement initiatives to surface additional value across its portfolio.CAPITAL STRATEGYThe Trust continues to maintain significant financial flexibility as it executes on its strategic initiatives. The Trust’s proportion of secured debt(16) is 5.3% of total assets and represents 14.3% of total debt(17) . The Trust’s unencumbered asset pool(11) totalled $6.0 billion as at March 31, 2025, representing 83.9% of the Trust’s investment properties value as at March 31, 2025.During the quarter, the Trust repaid $60 million of European mortgages and amended its US$250 million unsecured term loan by extending the maturity to February 28, 2029, inclusive of a 1-year extension option at the REIT’s discretion, at an all-in rate of 3.166%. All other terms and covenants remain unchanged.On March 31, 2025, the Trust entered into an unsecured credit facility with a Canadian financial institution for up to $50 million to fund commercial property retrofits related to energy efficiency savings and greenhouse gas emission reductions.During the quarter, the Trust implemented an NCIB program. Under the program, the Trust has the ability to purchase for cancellation up to a maximum of 10% of the Trust’s public float. Subsequent to the quarter to May 6, 2025, the Trust purchased for cancellation 1,918,566 REIT Units under the NCIB at a weighted average price of $10.42 per REIT Unit for a total cost of $20.0 million.The Trust ended Q1 2025 with available liquidity(12) of $751.3 million, including $35.7 million of cash and cash equivalents, and an additional $250 million that could be exercised through the accordion on its unsecured credit facility. The Trust’s net total debt-to-normalized adjusted EBITDAFV ratio was 8.2x and net total debt-to-total assets (net of cash and cash equivalents) ratio was 36.9% as at March 31, 2025.“With the repayment of a maturing European mortgage and extension of the term loan, we have addressed 50% of our 2025 debt maturities and are currently evaluating several options to address the remaining $450 million December maturity,” said Lenis Quan, Chief Financial Officer of Dream Industrial REIT. “We continue to focus on disciplined capital allocation and maintaining the resilience of the business. With over $750 million of available liquidity, we are well-positioned to execute on value-add initiatives that improve the growth profile of our business.”CONFERENCE CALLSenior management will host a conference call to discuss the financial results on Wednesday, May 7, 2025, at 11:00 a.m. (ET). To access the conference call, please dial 1-844-763-8274 in Canada or 647-484-8814 elsewhere. To access the conference call via webcast, please go to Dream Industrial REIT’s website at www.dreamindustrialreit.ca and click on the link for News, then click on Events. A taped replay of the conference call and the webcast will be available for ninety (90) days following the call.Other informationInformation appearing in this press release is a select summary of financial results. The condensed consolidated financial statements and management’s discussion and analysis for the Trust will be available at www.dreamindustrialreit.ca and on www.sedarplus.com .Dream Industrial REIT is an owner, manager and operator of a global portfolio of well-located, diversified industrial properties. As at March 31, 2025, the REIT has an interest in and manages a portfolio which comprises 336 industrial assets (549 buildings) totalling approximately 72.6 million square feet of gross leasable area in key markets across Canada, Europe, and the U.S. The REIT’s objective is to deliver strong total returns to its unitholders through secure distributions as well as growth in net asset value and cash flow per unit underpinned by its high-quality portfolio and an investment grade balance sheet. Dream Industrial REIT is an unincorporated, open-ended real estate investment trust. For more information, please visit www.dreamindustrialreit.ca .FOOTNOTES1.CP NOI (constant currency basis) is a non-GAAP financial measure. The most directly comparable financial measure to CP NOI (constant currency basis) is net rental income. The table included in the Appendices section of this press release reconcile CP NOI (constant currency basis) for the three months ended March 31, 2025 and March 31, 2024 to net rental income. For further information on this non-GAAP measure, please refer to the statements under the heading “Non-GAAP financial measures, ratios and supplementary financial measures” in this press release.2.FFO is a non-GAAP financial measure. The most directly comparable financial measure to FFO is net income. The tables included in the Appendices section of this press release reconcile FFO for the three months ended March 31, 2025 and March 31, 2024 to net income. For further information on this non-GAAP measure, please refer to the statements under the heading “Non-GAAP financial measures, ratios and supplementary financial measures” in this press release.3.Diluted FFO per Unit and FFO payout ratio are non-GAAP ratios. Diluted FFO per Unit is comprised of FFO (a non-GAAP financial measure) divided by the weighted average number of Units. FFO payout ratio is calculated as total distributions divided by FFO (both non-GAAP financial measures) for the period. For further information on non-GAAP ratios, please refer to the statements under the heading “Non-GAAP financial measures, ratios and supplementary financial measures” in this press release.4.A description of the determination of diluted amounts per Unit can be found in the Trust’s Management’s Discussion and Analysis for the three months ended March 31, 2025 and March 31, 2024, in the section “Supplementary financial measures and ratios and other disclosures”, under the heading “Weighted average number of Units”.5.“Number of assets” comprise a building, or a cluster of buildings in close proximity to one another attracting similar tenants.6.Includes the Trust’s owned and managed properties as at March 31, 2025, December 31, 2024 and March 31, 2024.7.Includes the Trust’s share of equity accounted investments as at March 31, 2025, December 31, 2024 and March 31, 2024.8.Net total debt-to-total assets (net of cash and cash equivalents) ratio is a non-GAAP ratio. Net total debt-to-total assets (net of cash and cash equivalents) ratio is comprised of net total debt (a non-GAAP financial measure) divided by total assets (net of cash and cash equivalents) (a non-GAAP financial measure). The most directly comparable IFRS financial measure to net total debt is non-current debt, and the most directly comparable IFRS financial measure to total assets (net of cash and cash equivalents) is total assets. The tables included in the Appendices section of this press release reconcile net total debt to non-current debt and total assets (net of cash and cash equivalents) to total assets as at March 31, 2025, December 31, 2024 and March 31, 2024. For further information on this non-GAAP ratio and these non-GAAP financial measures, please refer to the statements under the heading “Non-GAAP financial measures, ratios and supplementary financial measures” in this press release.9.Net total debt-to-normalized adjusted EBITDAFV is a non-GAAP ratio. Net total debt-to-normalized adjusted EBITDAFV is comprised of net total debt (a non-GAAP financial measure) divided by normalized adjusted EBITDAFV (a non-GAAP financial measure). The most directly comparable IFRS financial measure to normalized adjusted EBITDAFV is net income. The tables included in the Appendices section of this press release reconcile adjusted EBITDAFV to net income (loss) for the three months ended March 31, 2025, December 31, 2024 and March 31, 2024. For further information on this non-GAAP ratio and this non-GAAP financial measure, please refer to the statements under the heading “Non-GAAP financial measures and ratios and supplementary financial measures” in this press release.10.Interest coverage ratio is a non-GAAP ratio. Interest coverage ratio is comprised of trailing 12-month period adjusted EBITDAFV (a non-GAAP financial measure) divided by trailing 12-month period interest expense on debt and other financing costs. The most directly comparable IFRS financial measure to adjusted EBITDAFV is net income. For further information on this non-GAAP ratio and non-GAAP financial measure, please refer to the statements under the heading “Non-GAAP financial measures and ratios and supplementary financial measures” in this press release.11.Unencumbered investment properties and unencumbered investment properties as a percentage of investment properties are supplementary financial measures. For further information on these supplementary financial measures, please refer to the statements under the heading “Non-GAAP financial measures, ratios and supplementary financial measures” in this press release.12.Available liquidity is a non-GAAP financial measure. The most directly comparable financial measure to available liquidity is cash and cash equivalents. The tables included in the Appendices section of this press release reconcile available liquidity to cash and cash equivalents as at March 31, 2025, December 31, 2024 and March 31, 2024. For further information on this non-GAAP financial measure, please refer to the statements under the heading “Non-GAAP financial measures, ratios and supplementary financial measures” in this press release.13.Total equity (including LP B Units or subsidiary redeemable units) is a non-GAAP financial measure. The most directly comparable financial measure to total equity (including LP B Units) is total equity (per condensed consolidated financial statements). The tables included in the Appendices section of this press release reconcile total equity (including LP B Units) to total equity (per condensed consolidated financial statements) as at March 31, 2025, December 31, 2024 and March 31, 2024. For further information on this non-GAAP measure, please refer to the statements under the heading “Non-GAAP financial measures, ratios and supplementary financial measures” in this press release.14.Total number of Units includes 7.5 million LP B Units that are classified as a liability under IFRS Accounting Standards.15.NAV per Unit is a non-GAAP ratio. NAV per Unit is comprised of total equity (including LP B Units) (a non-GAAP financial measure) divided by the total number of Units. For further information on this non-GAAP ratio, please refer to the statements under the heading “Non-GAAP financial measures, ratios and supplementary financial measures” in this press release.16.Secured debt is a supplementary financial measure and secured debt as a percentage of total assets is a supplementary financial ratio. Please refer to the statements under the heading “Non-GAAP financial measures, ratios and supplementary financial measures” in this press release.17.Total debt is a non-GAAP financial measure. The most directly comparable financial measure to total debt is non-current debt. The tables included in the Appendices section of this press release reconcile total debt to non-current debt as at March 31, 2025, December 31, 2024 and March 31, 2024. For further information on this non-GAAP financial measure, please refer to the statements under the heading “Non-GAAP financial measures, ratios and supplementary financial measures” in this press release.ContactsFor further information, please contact:Dream Industrial REITAlexander Sannikov President & Chief Executive Officer(416) 365-4106asannikov@dream.caLenis Quan Chief Financial Officer(416) 365-2353lquan@dream.caRead full story hereDer Beitrag Dream Industrial REIT Reports Strong Q1 2025 Financial Results erschien zuerst auf subcablenews.com .