Dream Industrial REIT Reports Q1 2021 Financial Results and Strong Year-Over-Year Growth

Acquisitions Closed During Q1 2021


Dream Industrial REIT (DIR.UN-TSX) or (the “Trust” or “DIR” or the “REIT” or “we”) today announced its financial results for the three months ended March 31, 2021. Management will host a conference call to discuss the financial results on May 5, 2021 at 11:00 a.m. (ET).

This press release features multimedia. View the full release here: https://www.businesswire.com/news/home/20210504006345/en/

Acquisitions Closed During Q1 2021 (Photo: Business Wire)


  • Strong net income, diluted FFO per Unit (1) and NAV per Unit (1) growth:
    • Net income was $95 million in Q1 2021, compared to $42 million in Q1 2020;
    • Diluted funds from operations (“FFO”) per Unit (1) was $0.19 in Q1 2021, a 10% increase when compared to Q1 2020;
    • Net rental income in Q1 2021 was $47 million, an increase of 17.4%, compared to $40 million in Q1 2020;
    • Comparative properties NOI (“CP NOI”) (constant currency basis) (1) in Q1 2021 increased by 3.1%, when compared to Q1 2020. The Canadian portfolio posted 2.0% CP NOI growth, predominantly driven by a 6.1% CP NOI increase in Ontario. The U.S. portfolio CP NOI increased by 6.7% on a constant currency basis, resulting from an increase in occupancy rate of 2.0% and an increase in in-place rent of 2.4%;
    • Investment property values increased by $75 million in Q1 2021 reflecting higher market rents, strong leasing activity in Ontario, and compression in capitalization rates mainly in Québec; and
    • Net asset value per Unit (1) was $12.82 in Q1 2021, an increase of 2.2%, compared to $12.55 in Q4 2020.
  • Maximizing rental rate growth across the portfolio:
    • Since the end of Q4 2020, the Trust has signed approximately 1.1 million square feet of new leases at a 19% spread over prior rents; and
    • In addition, the Trust completed nearly 0.9 million square feet of renewals at a 20% spread over expiring rents since the end of Q4 2020.
  • Continued portfolio high-grading and increased financial flexibility:
    • Over $350 million of acquisitions completed to date in 2021, including $41 million of income-producing assets and a 30-acre parcel of land for $35 million in the Greater Toronto Area (“GTA”) that closed subsequent to quarter-end;
    • An additional $155 million of acquisitions that are firm, under contract or in exclusivity in the Trust’s target markets in Canada, the U.S., Germany, and the Netherlands; and
    • Robust balance sheet – The Trust’s net total-debt-to-assets ratio (1) was 28.7% as at March 31,2021. The Trust continues to increase focus towards operating with an unsecured financing model with its unencumbered asset pool totalling approximately $2.05 billion, representing over 57% of investment properties value as at March 31, 2021.








Three months ended



March 31,


March 31,

(in thousands of dollars except per Unit amounts)





Operating results





Net income





Funds from operations (“FFO”) (1)





Net rental income





CP NOI (constant currency basis) (1)(2)





Per Unit amounts





Distribution rate





FFO – diluted (1)(3)





See footnotes at end.








As at


March 31,

December 31,

(in thousands of dollars)





Total portfolio



Number of assets (4)





Investment properties fair value





Gross leasable area (“GLA”) (in millions of sq. ft.)





Occupancy rate – in-place and committed (period-end)





Occupancy rate – in-place (period-end)





See footnotes at end.










As at



March 31,


December 31,

(in thousands of dollars except per Unit amounts)





Credit rating- DBRS


BBB (mid)


BBB (mid)

Net total debt-to-assets ratio (1)


28.7 %



Net total debt-to-adjusted EBITDAFV (years) (1)





Interest coverage ratio (times) (1)





Weighted average face interest rate on debt (period-end)


2.44 %



Weighted average remaining term to maturity on debt (years)





Unencumbered assets (period-end) (1)





Available liquidity (period-end) (1)





Net asset value (“NAV”) per Unit (period-end) (1)



See footnotes at end.





“We continue to focus on increasing the quality of our portfolio by adding larger buildings with high-quality tenants, in strong markets with significant rental rate growth potential,” said Brian Pauls, Chief Executive Officer of Dream Industrial REIT. “Thus far in 2021, we have already closed or contracted over $500 million of assets and our focus going forward will continue to be growing through high-quality acquisitions and developing best-in-class assets on properties we currently own and land acquired in our target markets. Overall, our goal is to create a more resilient, valuable, and growing business for our unitholders.”


Acquisitions – Since the end of Q4 2020, the Trust has closed on 12 income-producing assets and one land parcel across Canada, the U.S., and Europe totalling approximately $350 million, at a going-in weighted average capitalization rate (“cap rate”) of 4.5%. The income-producing asset acquisitions add 1.8 million square feet of high-quality, well-located and functional logistics space to the Trust’s portfolio. Built on average in the mid-2000s, these assets are above the average quality of the Trust’s portfolio, with an average clear ceiling height of 30 feet. The acquisitions were funded by cash-on-hand and proceeds from the equity offering completed in January 2021. Assuming leverage of 37.5% on the assets, and access to euro-equivalent debt at an all-in interest rate of 0.50%, the Trust’s going-in levered yield on the income-producing assets is expected to be approximately 6.5%.

The pipeline for future acquisitions remains strong with over $155 million of assets under contract or in exclusivity that are likely to close in the next 45 to 60 days, subject to satisfactory due diligence. Pro forma these acquisitions, the Trust will have acquired over $500 million of assets in 2021, adding 3.0 million square feet of high-quality GLA to the Trust’s portfolio.

Acquisitions closed during Q1 2021

See images at top

Development pipeline – The Trust has initiated a structured development program that allows the Trust to add high-quality assets to its portfolio. The Trust is focused on building and executing on a development program that capitalizes on its predominantly urban portfolio across North America and Europe. The Trust has commenced two projects totalling nearly 700,000 square feet in Las Vegas, Nevada and Montréal, Québec, and expects to be in a position to commence on approximately 300,000 square feet of additional projects in 2021. Please refer to the Trust’s press release ( link ) dated April 15, 2021 for further details on the Trust’s development and intensification activities.

Subsequent to quarter-end, the Trust closed on a 30-acre parcel of land located in Brampton, Ontario for $35 million, representing an attractive valuation of approximately $1.2 million per acre. The site is expected to support the development of 550,000 square feet of prime logistics space in one of the strongest industrial sub-markets in Canada. The Trust intends to commence construction in the next 18 to 30 months and expects to achieve an unlevered yield on cost of approximately 6% on the project, which represents a spread of at least 200 basis points compared to cap rates for comparable stabilized properties and should result in meaningful NAV per unit growth.

Capital strategy – The Trust continues to focus on increasing financial flexibility. On January 29, 2021, the Trust closed on a $259 million equity offering, and utilized the net proceeds to pre-pay approximately $131 million of Canadian mortgages with an average interest rate of 3.59% on February 1, 2021. Subsequent to quarter-end, the Trust early repaid a US$22 million loan secured by a U.S. property without any prepayment penalty. Pro forma the repayment of this mortgage and closing of assets that are currently firm, under contract, or in exclusive negotiations, the Trust’s unencumbered asset pool is expected to total $2.3 billion, representing over 60% of the Trust’s total investment properties value. Thus far in 2021, the Trust has deployed over $500 million of capital towards acquisitions and repayment of secured debt, with over $245 million of additional capital earmarked for acquisitions that are firm, under contract, or in exclusive negotiations, as well as planned development projects. On April 26, 2021, the Trust completed a $201 million equity offering, which will allow the Trust to continue to execute on its growth strategy while keeping leverage in the Trust’s targeted range.

“We continue to deploy capital at a robust pace while maintaining significant financial flexibility,” said Lenis Quan, Chief Financial Officer of Dream Industrial REIT. “Our pipeline of opportunities is strong, and our geographical diversity allows us to allocate capital towards the most attractive opportunities across our markets, and to access capital at the most optimal cost for the REIT. We expect proceeds from the recent equity raise to be fully deployed by the end of Q2 2021 and we will retain sufficient capacity for our acquisition pipeline and planned development projects.”


  • Robust leasing momentum at attractive rental spreads – Strong demand from high-quality occupiers continues to result in significant rental rate growth across the Trust’s portfolio. Since the end of Q4 2020, the Trust has signed approximately 2.0 million square feet of new leases and renewals at an average spread of 20% over prior rates.
    Leasing highlights since reporting Q4 2020 results include:
    • The Trust signed a 32,000 square foot renewal with a tenant in the Greater Montréal Area, that expanded to a neighbouring 15,000 square foot unit, while achieving a 20% spread over the average expiring rent;
    • The Trust continues to maximize rental rate growth in the GTA. During the quarter, the Trust signed three leases totalling nearly 60,000 square feet at its properties in Mississauga, at rental rates that were more than double the prior rates;
    • In the U.S., the Trust signed three leases in Columbus for nearly 73,000 square feet at an average 30% spread to the expiring rent;
    • At the Laval distribution facility vacated by Spectra Premium Industries Inc. at the start of 2021, the Trust optimized the building space to accommodate more modern distribution requirements, resulting in a new five-year lease with a national logistics tenant for 165,000 square feet at higher rent, in addition to 2.5% annual contractual rental growth, which was absent in the prior lease. The new lease will commence on June 1, 2021; and
    • In the Netherlands, the Trust signed a 196,000 square foot renewal commencing January 1, 2022, with a 20% rental rate spread to expiring rent.
  • Strong rent collections – The Trust’s portfolio has remained resilient through market disruptions and rent collections have essentially returned to pre-pandemic levels. The Trust has collected over 99% of recurring contractual gross rent during Q1 2021. In addition, the Trust has collected substantially all of the contractual gross rent for Q4 2020 and Q3 2020. The Trust has not entered any rent deferral arrangements since Q2 2020. To-date, the Trust has received nearly 95% of the $2.3 million of contractual gross rent deferred during Q2 2020.

The following table summarizes selected operational statistics with respect to the last three quarters, all presented as a percentage of recurring contractual gross rent as at May 4, 2021:



Q3 2020

Q4 2020

Q1 2021

Cash collected from tenants




CECRA cash collected from government




Sub-total of cash collected from tenants and government*

98.6 %

99.4 %

99.1 %

CECRA (the Trust's portion)




Sub-total of cash collected, adjusted for CECRA and deferrals granted*

99.7 %

99.4 %

99.1 %

Remaining to be collected





100.0 %

100.0 %

100.0 %

* Includes applicable taxes

“Our strong operating results continue to demonstrate the resilience of our assets and tenant base as well as the rent growth potential embedded in our predominantly urban portfolio,” said Alexander Sannikov, Chief Operating Officer of Dream Industrial REIT. “We expect our pace of organic growth to strengthen further as leases signed since the second half of 2020 continue to take effect. With a positive outlook for organic growth, we have increased our focus on advancing a structured development program for the REIT. The recently acquired land parcel in Brampton enables us to initiate greenfield development in Canada, which is expected to be a complement to our significant redevelopment and intensification pipeline in the existing portfolio.”


  • Net income for the quarter – For the three months ended March 31, 2021, the Trust recorded net income of $95 million consisting of net rental income of $47 million and fair value adjustments to investment properties of $75 million, partially offset by cumulative other income and expenses of $27 million.

    For the three months ended March 31, 2020, the Trust recorded net income of $42 million consisting of net rental income of $40 million and fair value adjustment to financial instruments of $57 million, partially offset by fair value adjustments to investment properties of $37 million (of which $26 million attributable to write-off of acquisition related costs) and cumulative other income and expenses of $18 million.
  • Diluted FFO per Unit (1) for the quarter – Diluted FFO per Unit for the three months ended March 31, 2021 and March 31, 2020 was $0.19 and $0.17, respectively. During the quarter, diluted FFO per Unit increased as a result of strong CP NOI (constant currency basis) (1) growth, income from acquisitions closed in Q1 2021 and 2020, and lower borrowing costs.
  • Net rental income for the quarter – Net rental income for the three months ended March 31, 2021 and March 31, 2020 was $47 million and $40 million, respectively, representing an increase of $7 million or 18%. The increase in net rental income was mainly attributed to investment properties acquired during 2020 and Q1 2021.
  • CP NOI (constant currency basis) (1) – CP NOI (constant currency basis) increased 3.1% for the three months ended March 31, 2021 compared to the prior year comparative quarter. CP NOI (constant currency basis) was positively impacted by increasing average in-place rental rates of approximately 3.8% across the portfolio, for the three months ended March 31, 2021, led by the Trust’s Ontario portfolio where the average in-place base rent increased by 9.2% compared to the prior year comparative quarter.
  • NAV per Unit (1) – NAV per Unit as at March 31, 2021 increased by $0.27, or 2.2%, to $12.82 from $12.55 as at December 31, 2020, largely reflecting an increase in investment property values across the Trust’s portfolio as private market demand for industrial assets remains robust.



Senior management will host a conference call to discuss the financial results on Wednesday, May 5, 2021 at 11:00 a.m. (ET). To access the conference call, please dial 1-888-465-5079 in Canada or 416-216-4169 elsewhere and use passcode 6843 075#. 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 & Events, then click on Calendar of Events. A taped replay of the conference call and the webcast will be available for ninety (90) days following the call.

Other information

Information 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.sedar.com.

Dream Industrial REIT is an unincorporated, open-ended real estate investment trust. As at March 31, 2021, Dream Industrial REIT owns and operates a portfolio of 186 industrial assets (280 properties) comprising approximately 28.8 million square feet of gross leasable area in key markets across North America and a growing presence in strong European industrial markets. Dream Industrial REIT’s objective is to continue to grow and upgrade the quality of its portfolio and to provide attractive overall returns to its unitholders. For more information, please visit www.dreamindustrialreit.ca.



FFO, diluted FFO per Unit, NAV per Unit, CP NOI (constant currency basis), net total debt-to-assets ratio, net total debt-to-adjusted EBITDAFV, interest coverage ratio, unencumbered assets and available liquidity are non-GAAP measures used by Management in evaluating operating and financial performance. Please refer to the cautionary statements under the heading “Non-GAAP Measures” in this press release.


CP NOI (constant currency basis) for the three months ended March 31, 2021 and March 31, 2020 excludes properties acquired after January 1, 2020 and properties held for sale or disposed of prior to the current quarter.



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 ended March 31, 2021, in the section “Non-GAAP measures and other disclosures”, under the heading “Weighted average number of Units”.


Number of assets has been restated in comparative period to conform to current period presentation. An asset has been redefined to include a building or a cluster of buildings in close proximity to one another attracting similar tenants.

Non-GAAP Measures

The Trust’s condensed consolidated financial statements are prepared in accordance with International Financial Reporting Standards (“IFRS”). In this press release, as a complement to results provided in accordance with IFRS, the Trust discloses and discusses certain non- GAAP financial measures, including FFO, diluted FFO per Unit, NAV per Unit, CP NOI (constant currency basis), net total debt-to-assets ratio, net total debt-to-adjusted EBITDAFV, interest coverage ratio, unencumbered assets and available liquidity as well as other measures discussed elsewhere in this press release. These non-GAAP measures are not defined by IFRS, do not have a standardized meaning and may not be comparable with similar measures presented by other income trusts. The Trust has presented such non-GAAP measures as Management believes they are relevant measures of the Trust’s underlying operating and financial performance. Non-GAAP measures should not be considered as alternatives to net income, net rental income, cash flows generated from (utilized in) operating activities, cash and cash equivalents, total assets, non-current debt, total equity, or comparable metrics determined in accordance with IFRS as indicators of the Trust’s performance, liquidity, cash flow, and profitability. For a full description of these measures and, where applicable, a reconciliation to the most directly comparable measure calculated in accordance with IFRS, please refer to the “Non-GAAP measures and other disclosures” section in Dream Industrial REIT’s MD&A for the three months ended March 31, 2021.

Forward-looking information

This press release may contain forward-looking information within the meaning of applicable securities legislation, including statements regarding the Trust’s objectives and strategies to achieve those objectives; the Trust’s expectations relating to the benefits to be realized from demand drivers for industrial space; the Trust’s ability to accretively acquire high-quality assets while maintaining a conservatively financed balance sheet; the Trust’s ability to deliver attractive overall returns to its unitholders over the long-term; the Trust’s total acquisitions in 2021 and expected addition of GLA; the effect of acquisitions on its leverage levels; the anticipated timing of closing of the acquisitions referred to in this press release; the expected going-in cap rate and levered yield of the acquisitions; the Trust’s acquisition pipeline and capacity; the Trust’s FFO per Unit in future periods and expected NAV growth; the pro forma composition of the Trust’s portfolio after the completion of the acquisitions and potential development opportunities; the anticipated pace of leasing and organic growth in future periods; the Trust’s development and redevelopment plans and capacity, including the timing of construction, timing of completion of the Trust’s developments and anticipated yields; the Trust’s ability to access debt markets more efficiently in order to continue to execute on its strategy to grow and upgrade the quality of the portfolio; expected interest rates and costs of debt; expected debt and liquidity levels and unencumbered asset pool; expected use of proceeds from equity offering; and the Trust’s expectations of the extent of rent deferrals and repayment from tenants. Forward-looking information is based on a number of assumptions and is subject to a number of risks and uncertainties, many of which are beyond Dream Industrial REIT’s control, which could cause actual results to differ materially from those that are disclosed in or implied by such forward-looking information. These risks and uncertainties include, but are not limited to, general and local economic and business conditions; employment levels; mortgage and interest rates and regulations; the uncertainties around the timing and amount of future financings; uncertainties surrounding the COVID-19 pandemic; the financial condition of tenants; leasing risks, including those associated with the ability to lease vacant space; rental rates on future leasing; and interest and currency rate fluctuations. The Trust’s objectives and forward-looking statements are based on certain assumptions, including that the general economy remains stable, interest rates remain stable, conditions within the real estate market remain consistent, competition for acquisitions remains consistent with the current climate and that the capital markets continue to provide ready access to equity and/or debt. All forward-looking information in this press release speaks as of the date of this press release. Dream Industrial REIT does not undertake to update any such forward-looking information whether as a result of new information, future events or otherwise except as required by law. Additional information about these assumptions and risks and uncertainties is contained in Dream Industrial REIT’s filings with securities regulators, including its latest annual information form and MD&A. These filings are also available at Dream Industrial REIT’s website at www.dreamindustrialreit.ca.

View source version on businesswire.com:https://www.businesswire.com/news/home/20210504006345/en/

CONTACT: Dream Industrial REIT

Brian Pauls

Chief Executive Officer

(416) 365-2365

bpauls@dream.caLenis Quan

Chief Financial Officer

(416) 365-2353

lquan@dream.caAlexander Sannikov

Chief Operating Officer

(416) 365-4106




SOURCE: Dream Industrial REIT

Copyright Business Wire 2021.

PUB: 05/04/2021 06:58 PM/DISC: 05/04/2021 06:58 PM


Copyright Business Wire 2021.

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