Dream Industrial Real Estate Investment Trust

Good day, everyone, and welcome to the Dream Industrial REIT second quarter conference call for Wednesday, August 6, 2025. Please be advised that all participants are currently in a listen-only mode, and the conference is being recorded. After the presentation, there will be an opportunity to ask questions. To join the question queue, you may press star and then one on your telephone keypads. Should you need assistance during the conference call, you may signal an operator by pressing star and zero. 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 REIT's 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 REIT's filings with securities regulators, including its latest annual information form and MDNA. These filings are also available on Dream Industrial REIT's website at www.dreamindustrialreit.ca. Your host for today will be Mr. Alexander Santacost. CEO of Dream Industrial REIT. Mr. Santakoff, please proceed.

Thank you. Good morning, everyone. Thank you for joining us today for Dream Industrial REIT's second quarter 2025 conference call. Here with me today is Linus Quan, our Chief Financial Officer. In the second quarter, we delivered healthy operating and financial results supported by strong leasing spreads and healthy growth in CP NOI. For the quarter, we delivered 4% year-over-year FFO per unit growth and 5% comparative properties NOI growth, driven by 9.5% increase in in-place rents. Since the end of Q1, we have signed 3.3 million square feet of leases at an average spread of 20%, which lifted our occupancy to 96%, 60 basis points higher than last quarter, and led to approximately 70% tenant retention. We're actively executing on our capital recycling strategy to high-grade our portfolio, completing $80 million of acquisitions on the REITs balance sheet and $59 million through the Dream Summit Venture since the end of Q1. These investments were complemented by a $19 million non-core asset disposition in the Dream Summit Venture with an additional $100 million in disposition pipeline. Our balance sheet remains strong with conservative leverage and ample liquidity. Our second quarter results underscored the strengths of our assets and the resilience of our business. Renewal activity across the portfolio remained healthy and we are achieving our targeted rents. Leasing momentum on vacancies was strong through late Q4 2024 and into early 2025. While activity moderated between February and April amid trade disruption headwinds, since May we have seen a notable uptick in activity with RFP volumes strengthening considerably in the past month. Since the end of Q1, we signed leases for 1.1 million square feet on vacant or newly developed space and successfully retained 2.2 million square feet of previously uncommitted expiries, driving occupancy gains across all regions. On the development leasing front, we continue seeing good traction. In the quarter, we signed a 78,000 square foot lease at our redevelopment property located near the Port of Montreal, representing approximately 35% of space, commencing in November. The lease signed with an existing tenant in our European portfolio now anchors our repositioning strategy for the asset. In Bolzac, we signed a 53,000 square foot lease for a 20-acre greenfield development increasing occupancy to 76% at the nearby 50-acre greenfield development, which secured a 108,000-square-foot lease, bringing occupancy to 62%. This last deal was driven specifically by shifting trade dynamics as the tenant transitioned from routing goods through the U.S. to shipping directly into Canada, which prompted their expansion in Alberta and highlights how evolving supply chains are creating new leasing opportunities. Both leases are scheduled to commence in Q4, and we continue to see a strong pipeline at both sites, with leases in negotiation expected to push occupancy above 90% by the year end. Additionally, we are engaged in various stages of negotiations on 1.7 million square feet of space across developments within our wholly owned portfolio and private ventures in Canada. So overall, operationally, we are seeing encouraging trends in terms of leasing velocity, which combined with shrinking supply pipeline informs our constructive outlook on the occupier fundamentals in our key markets. Turning over to capital allocation, where we are pursuing a balanced approach to deploying our retained cash flow and proceeds from dispositions while preserving balance sheet strength and flexibility. We're actively executing on our capital recycling program and have observed increased interest in the private market with demand translating into attractive pricing for our assets. In July, the Dream7 Ventures sold a non-strategic asset in Western Canada for $19 million, which was well above its carrying value. We have approximately $100 million of assets under letters of intent or in advanced negotiations with users and investors across our owned and managed portfolio, all at compelling valuations. We are reinvesting these proceeds into accretive opportunities that drive long-term cash flow and NAV growth. Earlier this quarter, we took advantage of the unit price volatility and repurchased 1.9 million units at a weighted average price of $10.42 under our NCIB program. During the quarter, we completed the acquisition of a 178,000 square foot asset in the Netherlands for $19 million. With approximately 80% of the space having rolled over, we are pursuing a value-add redevelopment strategy for the asset. We expect to stabilize the property at an attractive yield on purchase price of just under 10%. When factoring in the capital investment we anticipate making, the overall yield on cost we expect is 8.5%. In July, We acquired a 192,000 square foot asset in Richmond Hill for $60 million, representing a 6% going in cap rate. The asset is fully leased to four tenants, two of which are on long-term leases at market rents with three to three and a half annual rent steps, while the remaining two offer strong mark-to-market upside as their leases roll. This positions the asset to deliver nearly 6% average annual NOI growth over the next five years. Strategically located in a high-demand GTA North submarket where we already have a sizable half a million square foot portfolio, this acquisition is a strong complement to our urban portfolio strategy. The GTA North submarket has performed consistently well with low availability and strong barriers to entry due to high replacement costs. The attractive basis on this acquisition compares favorably to several inbound offers on our existing assets in the area. We remain focused on growing our private ventures as well. This quarter, the Dream Summit Venture acquired an asset in Oakville for $59 million, and we also recently entered into exclusivity on another opportunity and are actively underwriting additional deals. On the development front, we are actively pursuing built-to-suit opportunities across our land holdings and excess land portfolio. and we have been adding scale to our solar program, both in Canada and in Europe, with nine projects currently underway and over 80 projects in various stages of feasibility. With multiple growth drivers in place, the strengths of our portfolio, along with a conservative balance sheet, positions us well to continue delivering resilient, long-term organic growth and strong returns to our unit holders. I will now turn it over to Lennis to discuss our financial highlights.

Thank you, Alex. Our business continues to deliver stable and consistent growth. We reported diluted SFO per unit of $0.26 for the second quarter, 4% higher than the prior year quarter. The solid year-over-year growth was primarily driven by Comparative Properties' NOI growth of 5% for the quarter, led by 8% growth in Canada. lease up of newly completed developments and fee income generated from our property management platform contributed to our overall FFO growth. Our net asset value at quarter end was $16.69 per unit, which has remained fairly stable this year. We continue to actively pursue financing initiatives to optimize our cost of debt and maintain a strong and flexible balance sheet with ample liquidity. We ended Q2 with leverage in our targeted range and net debt to EBITDA ratio of 8.2 times. To date, we have effectively addressed approximately 70% of our 2025 debt maturities. In July, we closed on the issuance of our $200 million Series G unsecured debentures at an all-in rate of 4.29%. We will swap the proceeds to euros at an effective rate of 3.73% starting December 22, 2025. The proceeds were partly used to repay the outstanding balance on our credit facility with the remainder earmarked towards pre-funding our remaining $450 million maturity in December and for general trust purposes. We continue to evaluate several refinancing options to address the remaining debt maturity balance and are currently observing rates in the low 4% range in the Canadian unsecured market with Euro equivalent debt 60 to 70 basis points lower. Including our recent $200 million bond issuance, we retain over $900 million in total available liquidity. Combined with the growing cash flow generated by the business, we are well positioned to fund our value add and strategic initiatives, including our development pipeline solar program and contributing to our private capital partnerships. Our second quarter performance highlights the resilience of our business and we remain confident in our growth trajectory for the balance of the year and into 2026. We maintain the outlook for both 2025 comparative properties, NOI growth and FFO per unit growth that was communicated in May. Over the past three years, we have grown our rents by over 9% compounded annually while lower weighted average occupancy has offset some of this growth for the past nine quarters. Despite the occupancy pressure, we have reported healthy organic growth, and when our in-place occupancy stabilizes, we expect the business to produce even stronger NOI growth. Our leasing commitments at the end of the second quarter represent 190 basis points of additional occupancy. which is a leading indicator of future in-place occupancy upside. We do not expect significant in-place occupancy pressures for the remainder of the year, and as such, we expect our CP NOI and FFO growth to pick up for the second half of 2025. Looking ahead, we continue to expect a strong pace of FFO per unit growth into 2026. Our FFO growth expectations for 2025 and 2026 continue to be predicated on current foreign exchange rates, leverage levels, and interest rate expectations, as well as expected timing of the lease up of our transitory vacancies. I will turn it back to Alex to wrap up.