Dream Industrial Real Estate Investment Trust

Good afternoon, ladies and gentlemen. Welcome to the DREAM Industrial REIT first quarter conference call for Wednesday, May 3, 2023. During this call, management of DREAM Industrial REIT may make statements containing forward-looking information within the meaning of applicable securities legislation. 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 REITs control that could cause actual results to differ materially from those that are disclosed in or implied by such forward-looking information. Additional information about these assumptions and risks and uncertainties is contained in DREAM Industrial REITs filings with securities regulators, including its latest annual information form and MD&A. These filings are also available on DREAM Industrial REITs website at www.dreamindustrialrete.ca. Later in the presentation, we will have a question and answer session. To queue up for a question, please press star 1-1 on your telephone keypad. Your host for today will be Mr. Brian Pauls, CEO of Dream Industrial REIT. Mr. Pauls, please go ahead.

Good afternoon, everyone. Thank you for Thank you for joining us today for Dream Industrial REIT's first quarter 2023 conference call. Speaking with me today is Linus Kwon, our Chief Financial Officer, and Alex Santakoff, our President and Chief Operating Officer. DIR had an active start to the year. We completed significant strategic initiatives during the quarter that enhanced our growth trajectory going forward. In February, we acquired a 10% interest in the $6 billion acquisition of Summit in partnership with GIC who acquired the remaining share. At the same time, we established a programmatic JV with GIC to pursue additional investment opportunities in the Canadian industrial market. This transaction was a significant milestone for DIR and positioned us as one of the largest industrial platforms in the country with over 43 million square feet co-owned or managed in Canada and over 70 million square feet across North America and Europe. We now provide property management and leasing services for 33 million square feet of industrial assets across Canada and the U.S. held in private capital partnerships with institutional clients. These partnerships provide significant opportunities to grow creatively while requiring limited equity capital from DIR. Turning to the results for the quarter, we had a great start to the year and our operating and financial results have never been better. We reported 13% comparative properties NOI growth during the quarter. FFO per unit was $0.25 in Q1, up 13% year-over-year, largely driven by CP NOI growth. We completed and leased a 120,000 square foot expansion in Montreal, which resulted in an unlevered yield on cost of 8.4%. In the last 12 months, we've completed 700,000 square feet of developments and achieved an unlevered yield on cost of 7.8%. Looking forward, all our growth drivers remain intact. Demand for industrial space has stayed strong through the volatile economic environment. With availability in the low single-digit range across all our markets, we continue to see strong organic growth for DIR's portfolio. The overall macroeconomic sentiment in Europe has improved considerably over the last few months. Occupier fundamentals continue to be strong with rising rents and low supply. Our European spread to expiry this quarter averaged 13%. Overall, our outlook for 2023 and beyond remains positive. Our near-term focus is on execution across various initiatives, which include delivering on our organic growth targets, advancing our development pipeline and achieving accretive yields, integrating the Dream Summit operations and delivering on our accretion targets, as well as maintaining a strong and flexible balance sheet. I will now turn it over to Alex to provide additional color on our business.

Thank you, Brian. Good afternoon, everyone. Industrial fundamentals in our core markets remain strong, with rents increasing quarter over quarter and vacancy in the low single-digit range. In Canada, we're seeing limited new supply delivered to the market with a lower proportion of pre-leasing compared to a year ago. While this increases availability temporarily, we continue to see tenant demand remain strong and rents continue growing. Within our portfolio, a strong leasing momentum from last year has carried forward to 2023. During Q1, we transacted 9% 145,000 square feet of leases across our portfolio, achieving a rental spread of over 40%. We signed approximately 440,000 square feet of leases in Ontario and Quebec, with rental spreads in the 75% to 80% range. In Europe, we signed 250,000 square feet of leases at a 13% spread over prior rents. Within the Dream Summit JV, we completed over half a million square feet of leases during the quarter. On these leases, we achieved an average spread of 150% over prior rents. These spreads are in line with our underwriting and validate our thesis on significant mark-to-market opportunity embedded in the Dream Summit portfolio. For the quarter, we reported 13% comparative properties NOI growth. In Canada, we achieved CP NOI growth of 14.3%, led by Ontario at over 22% and high single-digit growth in Quebec and Western Canada. In Europe, our leasing momentum remains robust and is also supported by CPI indexation across the portfolio. For the quarter, we reported a 12% increase in European CP NOI. We expect 2023 CP NOI growth in Europe to remain strong in the mid-to-high single-digit range, assuming mid-single-digit inflation in 2023. Overall, we expect our 2023 comparative properties and OI growth to be at the high end of our initial guidance range of 8% to 10%. Turning to our development program, we're close to completing our 154,000 square foot ground-up development in Caledon. We are seeing strong interest from occupiers. We are in very advanced negotiations with a prospective tenant for a portion of the building at terms that are in line with our underwriting. In addition to Abbotside, we have four projects totaling 690,000 square feet at our share currently underway. Construction is progressing well, and we continue to receive interest from occupiers. In addition to these projects, we are about to commence construction on two new projects totaling approximately 1,000 square feet. We're in final planning stages for our redevelopment project in Merville. The 24-acre site was acquired in early 2020 We intend to rebuild once the existing 10 decades. We intend to rebuild the site with two modern and zero-hybrid logistics buildings for over $380,000. We're planning to start construction in Q3 2023 with a targeted and legally long-term cost of approximately $7 million, including land. We're forecasting a construction cost of approximately $75 million. We are also finalizing plans to commence construction at our 50-acre site in Balzac Dub Market in Calgary, which was acquired last year. We have been able to increase our density forecast to 650,000 square feet from 475,000 square feet in our underwriting. We expect construction costs of around $90 million, with a targeted unlevered yield on cost in the mid-6% range, including the land costs. We're starting to leverage our sizable industrial platform in Canada and globally as we proactively engage with our occupiers across multiple properties to drive synergies for our customers' business and our entire industrial platform. Our property management and leasing platform allows us to generate strong and growing net margins. For the quarter, we reported $1.6 million of net margins from this business, which included six weeks' contribution from the Dream Summit JV. I will now turn it over to Lennis to talk about our financial highlights.