Dream Industrial Real Estate Investment Trust T.DIR.UN

Alternate Symbol(s): DREUF

Dream Industrial Real Estate Investment Trust is a Canada-based open-ended real estate investment trust. The Company owns, manages and operates a portfolio of 339 assets totaling approximately 71.9 million square feet of gross leasable area in key markets across Canada, Europe and the United States. The Company owns and operates a diversified portfolio of distribution, urban logistics and light industrial properties across key markets in Canada, Europe and the United States. Across its regions, its portfolio consists of distribution, urban logistics and light industrial buildings: distribution buildings, urban logistics buildings and light industrial buildings. The Company’s properties include Trillium Industrial Business Park, West Mall Cluster, Kennedy/Coopers Avenue Cluster, Terrebonne Cluster, Boucherville Cluster, Sunridge Park, Chestermere Industrial Park, Zac de Satolas Green, 310 Hoffer Drive (McDonald Business Centre), among others.

TSX:DIR.UN - Post by User

Dream Industrial Real Estate Investment Trust

<< Previous

Bullboard Posts

Next >>

Post by retiredcfon Nov 06, 2024 8:34am

54 Views

Post# 36298401

RBC

November 5, 2024

Dream Industrial REIT
Q3 as expected; organic growth moderates, but still on pace

TSX: DIR.UN | CAD 13.36 | Outperform | Price Target CAD 16.00

Sentiment: Neutral

Our view: DIR reported Q3/24 FFOPU of $0.26, largely in line with RBC/Street at $0.25E/$0.25E, vs. $0.25 last year (+4% YoY). On balance, our read is largely neutral. The variance to our call was nominal (<$0.005/unit) and mainly from higher NOI. SP NOI growth (+3.3% YoY) and leasing spreads moderated in the quarter, though YTD SP NOI growth (+5.1%) is tracking in line with DIR’s prior mid-single-digit % 2024 guidance. As well, the slight sequential uptick in occupancy was mainly driven by a transfer of a QC property to developments; excluding the transfer, in-place occupancy was down slightly, consistent with DIR's prior indication for some Q3 slippage. The IFRS NAV and leverage held relatively stable. CC Nov-6 @ 11 am ET (1-844-763-8274).

Highlights:

Excl. expansions, SP NOI rose 3.2% YoY (+4.8% YTD), as higher rents more than offset lower occupancy. Including expansions, SP NOI was +3.3% YoY (+5.1% YTD), led by Canada (+5.9% YoY) and the US (+4%), while Europe (-0.5%) slipped on vacancies in Spain & Germany. In Canada, ON led (+8.9%), followed by QC (+4.4%) and the West (+1.2%). Summit JV was +3.4% YoY.
Committed occupancy edged up to 95.5% (+10 bps QoQ, -170 bps YoY), with in place at 95.1% (+10 bps QoQ, -180 bps YoY). CDA sits at 95.4% committed (+40 bps QoQ), Europe at 95.7% (+10 bps), US at 95.4% (-20 bps), and Summit JV a 94.7% (-300 bps). While strong leasing in ON drove CDA higher, the transfer of a 225K sf Montreal property to PUDs also helped.
Leasing spreads strong, yet moderated. Since the end of Q2/24, DIR has leased 1.9MM sf at a blended new/renewal spread of +25% (vs. 56% last quarter), incl. +39% in Canada and +10% in Europe. Market rents for the portfolio are ~30% above in-place.
IFRS NAVPU at $16.73 (flat QoQ and YoY). IFRS cap rate stable at 6.1% (flat QoQ, +18 bps YoY) vs. current 6.3% implied cap.
A bit of capital recycling. In Q3 and Q4 to date, DIR has sold $24MM of assets in Montreal ($20MM) and the Netherlands ($4MM) at 16% above book value. Post-Q3, the Summit JV sold a GTA asset for $49MM ($380/sf), while $226MM of acquisitions are under contract ($35MM at DIR share), including a 32-acre development site in Brampton through the development JV.
Debt/GBV at 36.3% (+40 bps QoQ, +120 bps YoY), with debt/EBITDA 8.0x (-0.1x QoQ, -0.2x YoY). Liquidity totals $820MM from cash ($79MM) and undrawn lines ($742MM).