Q1 2025 Dream Industrial Real Estate Investment Trust Earnings Call
Welcome to the Dream Industrial Read first quarter conference call for Wednesday, May 7, 2025.
Please be advised that all participants are currently in lesson 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 than one on your telephone keypad. Should you need assistance during the conference call, you may signal an operator by pressing star than zero.
During this call, management of dream industrial reap 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 reach control that could cause actual results to differ materially from those that are disclosed in or implied by such forward-looking information.
including its latest annual information form and MDNA. These filings are also available on Dream Industrial Real Reads website at www.dreamindustrialreet.ca
Speaker Change: Your host for today will be Mr. Alexander Sannikov, CEO of Dream Industrial Read. Mr. Sannikov, please proceed.
Speaker Change: Thank you. Good morning everyone. Thank you for joining us today for Dream Industrial Reads first quarter 2025 conference call. Here with me today is Lenis Quan, our chief financial
Speaker Change: We started off 2025 with healthy operating and financial results. For the quarter, we delivered 5.8% year-of-a-year We started off with healthy operating and financial results. For the quarter, we delivered 5.8% year-of-a-year
We continue to observe stable activity in leasing and leasing market [inaudible]
Speaker Change: So far in 2025, we have signed 1.5 million square feet of leases. So far in 2025, we have signed 1.5 million square feet of leases.
Speaker Change: Rental spreads were healthy at 57 and 51% in Ontario and Quebec respectively.
Speaker Change: In the West, where we have seen a meaningful increase in leasing activity, the spreads have been consistent with prior quarters at 9%.
Speaker Change: In Europe , leasing momentum remains steady as we signed over 700,000 square feet of leases at an average spread of 16%, including the lease-up of our 140,000 square foot vacancy in France, which pushed occupancy up to the same level as a year ago at 96.9% [inaudible]
Speaker Change: We ended the quarter within place and commuted occupancy at 95.4% and a stable tenant retention ratio.
Speaker Change: Our first quarter results highlight the strength and the resilience of our business, supported by a robust down-cheat [inaudible]
Speaker Change: When considering the current economic climate, the contractual rent growth in an upward folio is a key driver over resilient cash flows.
Speaker Change: The average rent steps in our Canadian portfolio are over 3% in Europe . Our portfolio is well protected against inflation with 85% of Lisa's index directly to CPI and the remainder subject to fixed contractual escalators. [inaudible]
Speaker Change: We have already seen the advantage of growing organically with CPI during high inflationary periods of 2022 and 2023 when our European portfolio delivered approximately 10% organic growth.
Speaker Change: We have taken a proactive approach in reviewing our tenant base for tariff exposure.
Speaker Change: We found that a portfolio generally has limited direct exposure across a diverse tenet mix.
Turning over to the Occupyamarket
Speaker Change: The positive momentum we have observed in late 24 carried into early 25, with leasing activity remaining healthy, particularly amongst the small and mid-bay users while the large bay segment show the gradual rebound. [inaudible]
Speaker Change: In March and April , we observed slower new leasing activity and longer decision timelines across Ontario and Quebec largely influenced by the uncertainty surrounding terror discussions as select occupiers adopted and weighed and see approach.
Speaker Change: As we move into May, we're starting to see an encouraging sign of leasing activity picking up again.
Speaker Change: Meanwhile, renewal activity across our various markets has remained healthy and we are achieving our targeted net rents.
Speaker Change: At the same time, we have seen robust, leasing the momentum in Western Canada, exceeding our expectations.
Speaker Change: Over last quarter. We're also making progress on development leasing with over 450,000 square feet of leases and active negotiations at our recent, at our recently completed BALZAC developments, which will lift the occupancy at those projects to over 90%.
Speaker Change: Europe has remained consistently strong throughout this period, supported by sustained occupied demand and limited new supply.
Speaker Change: Well, today's environment presents a higher degree of uncertainty. It is creating new opportunities as well. We are beginning to observe pockets of leasing demand across Canada driven by the shifting trade dynamics.
For example,
Speaker Change: Some tenants are rerouting their supply chains or capitalizing on the increasing domestic demand for goods imported from Asia and Europe in response to additional costs from tariffs.
Speaker Change: Additionally, the high tariffs recently imposed by the U.S. on certain countries, relative to Canada's more moderate trade position, are leading some occupiers, particularly those in consumer packaged goods, chemical and automotive sectors.
Speaker Change: to choose Canadian distribution hubs as strategic alternatives for servicing the North American markets.
Speaker Change: We are already seeing this in our recent leasing velocity with increased tenant inquiries and an uptick in RFP activity in the past few weeks.
Speaker Change: Put this into perspective on a February call with highlighted two million square feet of new visas signed or in advance negotiations.
Speaker Change: Over the past two months, we have successfully converted over 1.2 million square feet of that pipeline into new leases, with additional 60,000 square feet of potential new lease opportunities added to the pipeline.
Speaker Change: Our Ancillary Revenue Program is growing and increasingly contributing to our results.
Speaker Change: We have made significant progress on our solar program. During the quarter we substantially completed a project in the Netherlands at an estimated yield on cost of 10%, and commenced construction on four new projects with an expected yield on cost of over 8%.
Speaker Change: A near-term solar pipeline is comprised of 80 projects in various stages of feasibility, representing over $100 million in investments at an average yield on cost of 8-10%.
Speaker Change: In addition, we have been actively exploring distributed generation opportunities which would allow us to sell surplus energy back to the grid in some of our Canadian markets, translating into meaningful additional scale of our solar program.
Speaker Change: A focus on private capital partnerships remains a key source of long-term recurring and diversified revenue, a property management and leasing platform generated $3 million in net fees for the quarter, 19% higher than the prior year.
Speaker Change: We expect these fees to grow as we add scale to our ventures and with our recently completed acquisitions in the dream sum adventure we expect to add more than $2 million in incremental revenue on a run rate basis.
Speaker Change: We're also executing on our strategy to upgrade the power capacity at select sites across our portfolio for data center users.
A pilot program,
Speaker Change: We're highly encouraged by this initial feedback. At the proposed power levels, we believe that these sites will be attractive to a wide range of data center users, and we intend to commence leasing discussions over the coming months as we advance our power procurement work.
With that, we remain committed to discipline capital allocation.
Speaker Change: Supported by a balance sheet strength, we have been actively deploying capital into our private ventures at compelling returns [inaudible]
Speaker Change: Despite the ongoing economic uncertainty, we continue to see evidence of strong private market demand and healthy pricing for our assets.
Speaker Change: Over the course of late March and April , we engage in discussions or have received bids on over 20 potential non-strategic dispositions, representing more than $350 million in values, across a wholly owned portfolio and private ventures.
at pricing in line or above appraised values.
Speaker Change: Subsequent to the quarter, we repurchased 1.9 million units at an weighted average price of $10.42 for total consideration of $20 million.
Speaker Change: Looking ahead to the rest of the year and to 2026, we have strong conviction that our core business is underpinned by multiple growth drivers capable of delivering consistent organic growth.
Speaker Change: I will now turn it over to Lenis to discuss our financial highlights [inaudible]
Lenis Quan: Thank you, Alex. Our business continues to deliver stable and consistent growth. We reported diluted FFO per unit of 26 cents for the first quarter, which was 5.8% higher than the prior year quarter.
Lenis Quan: The solid year-over-year growth was primarily driven by comparative properties NOI growth of 3.1% for the quarter, led by 4.2% growth in Canada and 1.6% in Europe .
Lenis Quan: In addition, early renewals from existing tenants lease up of newly completed development and fee income generated from our property management platform contributed to our overall FFO growth
Lenis Quan: Our net asset value per unit a quarter end was $16.76, relatively consistent from the prior quarter.
Lenis Quan: Due to increased market volatility, we continue to actively monitor our tenant receivables and any arrears.
Lenis Quan: Our bad debt provision levels remain in line with prior year, although we are currently managing an isolated dispute with a tenant which is unrelated to recent terror developments, translating into increased provisions in the quarter.
Lenis Quan: We continue to actively pursue financing initiatives to optimize our cost of debt and maintain a strong and flexible balance sheet with ample liquidity.
Lenis Quan: To date, we have addressed approximately half of our 2025 debt maturities.
Lenis Quan: During the quarter, we repaid $60 million of European mortgages and amended our US $250 million unsecured term facility, extending that maturity to February 20, 19, inclusive of a one year extension option at our discretion.
Lenis Quan: At an all in rate of 3.17%, there are no other changes to terms and covenants.
Lenis Quan: We also 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.
Lenis Quan: We expect the industry to be around 3% and the first draw to be in late June .
Lenis Quan: RQ-1 credit metrics, illustrator solid financial position with leverage and are targeted mid-30% range and net debt to EBITDA ratio of 8.2 times.
Lenis Quan: We are actively evaluating several refinancing options for the remaining $450 million debt maturity, which is in December 2025.
Lenis Quan: We are currently observing rates in the low 4% range in the Canadian unsecured market with Euro equivalent debt 40 to 50 basis points lower.
Lenis Quan: With growing cash flow generated from the business and total available liquidity of over $750 million, we retain sufficient capital to fund or value add and strategic initiatives, including funding or development pipeline solar program and contributing to our private capital partnership.
Lenis Quan: Our first quarter performance demonstrates the resilience of our business and we remain confident in our growth trajectory for the balance of the year and into 2026.
Lenis Quan: Given the uncertainty in the current economic and political environment, it is difficult to predict the impact on our tenants' businesses and their operational decisions.
Lenis Quan: We do expect it will increase the variability in the pace at which leasing decisions are made. As such, we issued a wider range for our 2025 outlook this past February .
Lenis Quan: Alongside the embedded organic growth drivers in our existing portfolio, we have integrated additional drivers of growth including development, a property management and leasing platform, solar and other instillery revenue streams.
Lenis Quan: These initiatives have already proven to contribute meaningfully to our business and position us well for long term sustainable growth.
Lenis Quan: While we have a high degree of visibility on our near-term renewals and are making solid progress on new leasing activity, it is difficult to predict the impact on the leasing velocity in any given quarter, especially from a prolonged, from prolonged tariff uncertainty.
Lenis Quan: Accordingly, the expected growth outlined in our outlook was weighted towards the second half of the year, reflecting our expectation of some occupancy variability in the first half.
Lenis Quan: With that, the upper end of our initial range for 2025 comparative properties NOI and FFO is currently less likely, and the 2025 comparative properties in FFO per unit growth is more likely to land at around the lower end of the outlook range.
Lenis Quan: Our outlook for 2026 is to a degree greater degree informed by our ability to capture market rents, execute on our growth drivers and maintain occupancy at the long-term average levels.
Lenis Quan: 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 [inaudible]
Alex: Thank you, Lenis. Dream Industrial has been navigating economic uncertainty over the past few years, while delivering solid FFO and same property and OI growth and reliable cash flows to our unit holders.
Alex: To put our results in outlook and context, we expect to deliver robust effort for unit growth in 25 and 26, well above the average for Canadian REITs, while refinancing our debt at higher interest rates.
Alex: A unit price reflects a highly compelling and plight cap rate of over 7.5% for the conservative balance sheet and a payout ratio of below 70%.
We will now open it up for questions.
Speaker Change: We will now begin the question and answer session. To join the question queue, you may press star then one on your telephone keypad. You will hear a tone acknowledging your request. If you are using to speak your phone, please pick up your handset before pressing any keys. To withdraw your question, please press star then two. We will pause for a moment as colors join the queue.
Speaker Change: And your first question comes from Frank Liu with BMO Capital Markets. Please go ahead.
Good morning, guys.
Speaker Change: In the fourth quarter, we communicated in February that we expect average occupants for the year to be consistent with year-end 24 and that broadly remains the expectation.
So, what we owe...
Speaker Change: What we communicate in this February is that broader range for NOI and FFO growth and I think Lenis just commented that we expect to land at around the lower end of the range currently, or we think that that end of the range is more likely.
Thank you guys, I'll turn it back [inaudible]
Speaker Change: And your next question comes from Fred Blando with Green Street. Please go ahead.
Fred Blondo: Thank you, and good morning. Just looking at demand for space in the Holy On portfolio and in Dream Summocks.
Speaker Change: Are you starting to see some stress from not only larger bait tenants at this stage but also maybe from smaller or medium bait tenants? What would be your base scenario on this for 2025?
Speaker Change: Thank you, Fred. The short answer is no. We're not seeing stress from our occupiers, broadly, or nothing idiosyncratic over the last couple of months, but what we are seeing in...
Speaker Change: March and April is the longest decision timelines especially in Ontario and Quebec when it comes to the new leasing.
Speaker Change: And can you characterize if you saw this more for Roger Baton and so or smaller?
Speaker Change: Okay, and you know, I mean, it looks like you remain relatively positive for the rest of the year in terms of smaller bay tenants. That's fair to say.
Speaker Change: Capturing the rents that we intend to capture. So we remain pre-constructed on that segment of the market. And then geographically there's a wider range, we see as we commented.
Speaker Change: Very healthy activity in Calgary and Edmonton. Stronger than what we expected at the beginning of the year. Europe is pre-consistent Ontario and Quebec started the year very strong. It was a bit of a pause in March April . We started to see that come back. [inaudible]
Speaker Change: Yeah, tell me about it. I may have missed this. I was wondering if you had an update on the European
We continue to engage in various conversations. We were pretty close to...
Speaker Change: We put together a one JV during Q1 but ended up not agreeing on governance terms with a perspective partner and so we continued dialogue with other private market participants.
Speaker Change: Okay, so nothing seems to be too imminent, but should we still expect something in 2025 or, or are you, I mean, we're certainly working towards it. Yeah, okay, perfect. Thank you.
Himanshu Gupta: In your next question, comes from Himanshu Gupta, with Scotiabank. Please go ahead.
Thank you and good morning.
Himanshu Gupta: So on the portfolio occupancy, I mean, it was down in Q1, both Ontario and Quebec. So what's driving those occupancy decline? And then how should we expect for Q2, I mean, given your remark of some slowdown in March and April ?
Thank you, Himanshu.
Himanshu Gupta: We did communicate in February that we expected some occupancy of our ability, so...
Himanshu Gupta: Okay, and how should we think about Q2? I mean, given, you know, we're starting to see some slowdown, I think in March or April , as you mentioned.
Himanshu Gupta: Bradley, for the entire portfolio, we expect Q2 to be flat-ish on the occupancy level.
Okay. Okay. Fair enough.
Himanshu Gupta: Okay, and then if I look at your same property NOI guidance, I'm in now at the low end of the range.
Speaker Change: So, is that reflection of, like, low occupancy expectation, or are you factoring in, like, more market
Speaker Change: It's the delay and anticipated delay in leasing decisions, or we are, it still is a range, but
Speaker Change: What we have communicated, we expect the lower end to be more likely given the pace of recent decisions that we generally observe and unless there's a meaningful certainty added to the market, we expected that
Speaker Change: And maybe the last question is on Q-back.
Speaker Change: I mean, what do you say? This is your weakest market right now. I mean, occupancy of almost 92. So, like, where do we bottom out? And I know, you know, you have some more of these experiences coming in as well for the rest of the year. [inaudible]
Speaker Change: The ranges that we expect for the NOI and the progress is predominantly pace of lease-up of vacancy as opposed to we now have more non-regnuals that we expect compared to February . That makes sense.
Speaker Change: But there is a bit of availability in the large-based segment and obviously these are larger assets and therefore as a percentage of total they impact the occupancy number more materially. When it comes to small mid-based segments we continue to see strong rents.
and strong pace of activity, both new leases and renewals.
Speaker Change: Okay, fellas, thank you, Aleksandr Haldun back. [inaudible]
Speaker Change: And your next question comes from Brad Sturges with Raymond James. Please go ahead.
Take a morning break.
Speaker Change: I guess sticking with the leasing theme here, just on looking at…
Speaker Change: What's left of you for expires this year? I guess Q1 retention rate was down, but how do you think about the retention rate for the balance of the year or do you think you get back to kind of closer to the historic leverage or would that be a little bit lower this year? [inaudible]
Speaker Change: and there's another 200,000 square foot non-renewal in November this year in Ontario.
Speaker Change: But broadly, for the total, even factoring in these non-renewals, we expect the retention rate to be at or around historic averages of give it take 70%.
Okay.
Speaker Change: And given the commentary around at least a little bit of a slowdown March April , it's starting to see an uptick again in May, does that change? You're thinking around your leasing strategy, whether you're pursuing a little bit more early renewals or thinking a little bit different about...
Speaker Change: Yeah, that's a fair question, and it's a spectrum, so it's not applicable to every asset, so it's certainly asset-specific, segment-specific.
We are engaging with all of our occupiers proactively.
Speaker Change: to understand their needs, to understand their, the impact on their business and obviously we are commencing renewal discussions with them. So we generally are focused on retention and are not opposed to early renewals, blend and extend, etc.
Speaker Change: With that equate to being more open to short term deals or are you seeing tenants giving the
Speaker Change: short term deals versus long term deals or vice versa, you know wanting to lock in space for a long period of time just curious if there's any sort of trends you're seeing at this point.
Speaker Change: We see maybe a little bit more short-term requests compared to the end of 24.
Speaker Change: I would say that it's 100% or anywhere close to that, but there's a little bit more short-term renewal requests or new lease requests maybe compared to six months ago.
Speaker Change: But we continue to see 10-year deals and 5-year deals. That's pretty common.
Boba.
Speaker Change: Last question, just on, I think you mentioned, you know, receiving some inbound bits for disposition, just curious on sort of, if that was focused within a specific region, or...
Speaker Change: You know, the more a broad base, and then like secondly, would you be more open to doing dispositions with the Holy On Portfolio in order to let's say buy back stocks is given the discount?
Speaker Change: It's pretty broad base. We see in bounds in the West, in Ontario, in Montreal, in Europe .
Speaker Change: Mindful of sort of go forward returns that we're foregoing by selling these assets and versus where we can redeploy the capital.
Speaker Change: If your question is, would we be looking to lean into dispositions, try to sell assets, maybe at suboptimal pricing, given the unit price, we're probably not quite there yet, and we want to stay disciplined with pricing.
Speaker Change: There's an outbound sheet capacity to pursue our capital allocation program otherwise.
Okay, I appreciate it. I'll turn it back.
Kyle Stanley: In your next question, comes from Kyle Stanley, with Deshardin, please go ahead.
Thanks, morning everyone.
Kyle Stanley: Could you elaborate a bit on the outreach you mentioned to clients? I'm just curious, is there an expectation of more or less demand coming on the back of the trade environment?
Kyle Stanley: Maybe in your discussions, what has maybe led to tenants being willing to make a decision now in May versus maybe holding back a bit in March, April ?
Kyle Stanley: short of terms as we commented in response to Brad's question, so trying to be flexible with our occupiers.
Kyle Stanley: Okay, so I guess to sum it up, it seems like there could potentially be more demand on the back of these changes but obviously it's just the timing which is most uncertain today.
Kyle Stanley: for a long uncertainty and increased errors as nothing is not helpful, but what we have seen in Canada is that...
Kyle Stanley: This tariff environment is leading to incremental demands specifically in Canadian assets.
Okay, thank you for that.
Kyle Stanley: Difficult question, I'm sure to answer, but you know, coming into the year, there, you know, ahead of tariffs really being an issue. There was a view that, you know, by mid-year you start to maybe hit peak.
We, I will see whether...
Thank you.
Kyle Stanley: Contributor to the overall strengths of the market. The other metric that is important to note is that the subleasing volume is down materially and so that's also helpful.
I'm out.
Kyle Stanley: It's a good deal, I think that's probably the shorter answer, that's why we like the asset.
Kyle Stanley: Be impacted by tariffs, more than others, we see the SaaS that's pretty resilient and insulated from that.
Kyle Stanley: Focused Industrial Program, so we'd like to have this for many reasons.
Speaker Change: Okay, thanks for that, and I lied. One last one, just on the data center side. It looks like, obviously, very solid progress on the power procurement.
Kyle Stanley: But just, you know, actually getting the power to the site to the point that then you're able to, to make leasing discussions like, what kind of timeline will we be looking at, you know, to actually have the power ready to go on the sites?
Kyle Stanley: Okay, so would you theoretically be able to make kind of leasing or have spaces delist or ready to, you know, sell in advance of the power being there? Or is this really just kind of a three to five year program before we start to really see progress?
Kyle Stanley: On, we expect us to be able to start commencing, we think discussions much sooner than that. It takes at least two years to develop a data center so three to five year window is not that long in that context.
Kyle Stanley: Okay, thank you for that clarification, I will turn it back [inaudible]
© The Bulletproof Executive 2013
Speaker Change: And your next question comes from Matt Kornack with National Bank Financial. Please go ahead.
Speaker Change: that some of your transitory vacancy has been product that had maybe a higher market to market potential.
Matt Kornack: So I'm just I'm trying to engage whether you still think that Mark to market is attainable and maybe some of your leasing process around it has been to preserve that Mark to market and that's why you're taking some time in in leasing those assets. Is that a fair characterization?
Thank you. Bye.
Matt Kornack: Indeed, some of the trans story vacancies have very high market potential, we got an asset back in Mrs. Saga at their...
Matt Kornack: and high single digit rents. It's high teams in terms of market, same in Montreal. When it comes to the pace of leasing,
Matt Kornack: but also capture the right user and address the right audience with the assets. And in some cases we have, you know, users looking to buy these assets at highly compelling pricing, so we're pursuing multiple angles.
Matt Kornack: when it comes to our leasing strategy and trying to position the assets to compete.
Well, in the specific segments of the market.
Matt Kornack: where we see the most demand. So if we have a larger Bay asset come back to us that demise as well into smaller units we will pursue that to then capture the most demand at the highest rents.
Speaker Change: Yes, this quarter was a bit higher from a provision standpoint. I don't know if any of that has actually been realized, but how should we think about that in terms of your forecast going forward? I don't think we have any bad debt in our forecast. So it seems to be episodic at some point, but should we be running kind of a provision each quarter for this year, or is it?
Is it one of? [inaudible]
Speaker Change: So in the prepared remarks, it did allude to, you know, just higher bad debts related to an isolated one situation we have with a tenant.
Speaker Change: But we did include additional reserves in our prior outlook and continue to carry that as well in our update.
Difficult to predict
Speaker Change: from development stuff that's already done this year versus the lease-up of some vacant space as well as stuff that's yet to be complete.
Speaker Change: So in terms of developments that are generally complete and not fully leased, that's our Calgary developments that are roughly at 50% leased right now and as we commented.
Speaker Change: We have a pretty good pipeline to take the occupancy there to close to 90 percent.
and we'll have our Cambridge development that is...
2nd half towards Q4.
Speaker Change: This year, and we're expecting to complete our WIP development this year as well and then we're kind of in the lease-up mode for that development. That's about 400,000 square feet across two buildings.
Speaker Change: And then just a quick clarification, but for the substantially complete but not I guess fully leased, so I guess it's Balzak, Cambridge and Balzak, are those in your aggregate?
Speaker Change: Occupancy figures, or they kind of still carved out. They're carved out. There's still some works being finished on the site, etc.
Speaker Change: No, that's fair enough. That's how we're modeling it. Just wanted to make sure. Okay, thanks guys.
Speaker Change: And the next question comes from Pammi Birr, with RBC Capital Markets. Please go ahead.
Speaker Change: Thanks, good morning. Just in terms of the private partnerships, Q1 was obviously very active. But as you move forward, the appetite changed at all, or is the JV still looking to maybe expand at a fairly rapid clip?
Speaker Change: The JV is still looking to expand. The pace of which the JV is going to expand is opportunity-driven. Obviously it's a again unprecedented economic environment.
Speaker Change: Both public markets and private markets are assessing what this means for capital allocation and pace of capital deployment but generally speaking the JV strategy.
Speaker Change: Some attendants led somewhere on spec, so the venture continues to deploy capital into Canadian Industrial Broadly.
Speaker Change: Okay, and just to clarify that, both the income, the sort of the income-producing and the development in JV, or the more leaning toward the income property.
Speaker Change: I think probably JV has been more active, you know, it's been difficult to find sites that pencil we added the Brampton site to the development JV last year.
Speaker Change: We continue to look for land opportunities, but generally speaking we're not leaning into land acquisitions at the moment.
Speaker Change: Okay, and just last one for me, you know, it's good to see some of the activity on the NCID, but, you know, can you just comment on the appetite, you know, to stay active at these levels, while also sort of being mindful of your leverage and maybe just, you know, how high are you willing to push leverage at this point? Thank you.
Speaker Change: Activity that is well-funded by ongoing cash flow, maybe some dispositions, but definitely not looking to push leverage up.
for a unit by-backed [inaudible]
Thanks very much. I'll turn it back.
Sam Damiani: And your next question comes from Sam Damiani with TD Cowan. Please go ahead.
Sam Damiani: Thank you, good morning everyone. So just maybe to clarify a little bit on the NCID, which obviously
Sam Damiani: was active after the market price for most weeks now in April . Was that the catalyst and if the price stays in the mid-10s or below 11?
in the near future.
Sam Damiani: and, uh, otherwise, kind of, where the acquisition pipeline is or other capital deployment opportunity.
Speaker Change: Perfect, that's helpful. And the other last one for me really, is just on the US fund, it seems to have been active on the disposition front in recent quarters. Is that likely to continue in your turn?
Speaker Change: It could continue in the near term. We achieve very good pricing on select assets there and it makes sense to pursue those dispositions.
It's going to be informed by pricing and... [inaudible]
Speaker Change: We're not necessarily in a disposition mode, if you will, in the US. There was a good opportunity that we pursued.
Perfect, thank you and I'll turn it back [inaudible]
Thank you.
Speaker Change: Once again, if you have a question, please press star then want.
Speaker Change: Your next question comes from Sumayya Sayed with CIBC. Please go ahead.
Sumaya Syed: Thanks, good morning. In your disclosure, there was some commentary around a slight decrease in market rents for Ontario and Quebec. So how would you ballpark that the client would be low single digit or below that range?
Thank you. Bye. Bye.
Thank you. Bye.
Speaker Change: We haven't seen meaningful declines in our assessment of market rents in the quarter.
Speaker Change: Okay, and then there's the odd broker report out there suggesting that these escalators have to are to come down based on the market from let's say high three used to two and a half to three range. Are you seeing any of that? The current your leasing activities as well?
Speaker Change: We continue to see strong escalators for small mid-day segments, and that's 3 to 4% range. Yeah, we're seeing escalators for a larger base segment to be in the three to three and a half percent range generally, so that's what we've been...
Achieving in our in our releasing.
OK.
Speaker Change: And then probably just lastly, I'll actually note that there was good activity in Western Canada. What tenants or category are you seeing being most active there and with the oil prices moving down do you see any headwinds to that demand?
Speaker Change: We've seen very strong activity in the West, and it's not directly connected to oil and gas segment, it's mainly driven by population growth in Western Canada, driven by Calgary and...
in particular becoming a distribution hub. [inaudible]
Speaker Change: Demand, where occupiers are looking to at least larger footprints to address the...
Speaker Change: The opportunities, I guess, that they're seeing in supply chains specifically relating to tariffs that US is looking to impose another country, etc.
Speaker Change: Okay, some more broadpaste. That's all I had. Thank you. Thank you.
Speaker Change: This concludes the question and answer session. I would like to turn the conference back over to Mr. Sannikov for any closing remarks.
Sannikov: Thank you for your interest and support of Dream Industrial Reads. We look forward to reporting on our progress next water. Goodbye.
Sannikov: The call, this brings to a close today's conference call. You may now disconnect. Thank you for participating and have a pleasant day.
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