Okay, good morning. It's 10:00, and we will now call the meeting to order. My name is Vincenza Sera, and I'm Chair of the Board of Dream Industrial REIT. Welcome to our annual and special meeting. I will act as Chair of the Meeting. Rob Hughes will act as Secretary of the meeting. With the consent of the Meeting, I appoint Daniela Munoz and Mohamed Syed of Computershare Trust Company of Canada as scrutineers for the meeting. We will proceed with our formal business. To expedite the formal part of the meeting, Rob Hughes, a unitholder, will move, and Shannon Macri, a unitholder, will second all motions. After our formal business is concluded, our management team will make a brief presentation, and then there will be an opportunity to ask questions. Please hold questions that do not relate to the formal business of the meeting until that time.
I have an affidavit from Computershare as to the mailing of the notice of availability of proxy materials and the form of proxy. Our circular and other meeting materials were made available through the notice and access system. I would ask the secretary to place the affidavit before the meeting and to keep the affidavit with the REIT's records. The scrutineers have advised that there are at least two individuals present who are unitholders or who represent by proxy unitholders who hold at least 25% of the votes attached to all outstanding REIT units. We have a requisite quorum of unitholders present, and I declare the meeting to be properly constituted for the transaction of business. The first item of business is the presentation of the REIT's 2025 Annual Report, which contains the REIT's audited financial statements for 2025 and the report of auditors thereon.
I note that the Secretary has placed before the meeting a copy of the 2025 Annual Report. The next item of business is the election of Trustees. As stated in our circular, eight Trustees are to be elected at the meeting, and eight nominees are named. They are Dr. R. Sacha Bhatia, Michael Cooper, Armen Farian, Jane Gavan, Alison Harnick, Alexander Sannikov, Vicky Schiff, and Jennifer Scoffield. Rob, will you please propose the nominees for election?
I nominate the individuals listed in the management information circular dated April 16th, 2026, for election as Trustees of the REIT to hold office for the upcoming term.
I second the motion.
Thank you. Are there any further nominations? Since there are no further nominations, I declare the nominations closed. Are there any questions on this motion? Seeing none, based on the proxies received, I would mention that each of the eight nominees received a majority of votes cast in favor of their election as Trustee. After the meeting, we will issue a press release with detailed voting results. Given the proxies received and as the number of persons nominated for election as a Trustee is equal to the number of Trustees to be elected, I propose with the consent of the meeting not to take a formal vote on the election of Trustees. Therefore, I confirm that the motion has been carried and the eight persons who were nominated have been elected as Trustees by acclamation. The next item of business is the appointment of auditors.
The Audit Committee and the Board have recommended the reappointment of PricewaterhouseCoopers LLP, chartered professional accountants as auditors. Can I have a motion?
I move that PricewaterhouseCoopers be appointed auditors of the REIT and its subsidiaries for the ensuing year and that the Board of Trustees be authorized to fix their remuneration.
I second the motion.
Are there any questions on this motion? Seeing none, this meeting will now vote on the motion. I propose to take the vote by a show of hands. I would ask those registered unitholders and duly appointed proxy holders who are in favor of the motion to please raise your hand. Any votes withheld? The motion is carried. PricewaterhouseCoopers LLP have been reappointed as auditors and the trustees authorized to fix their remuneration. The next item of business is to vote on a special resolution, which I'll refer to as the DOT Special Resolution, authorizing certain modernization amendments to the REIT's declaration of trust, such amendments described in the circular dated April 16th, 2026. If approved, the declaration of trust of the REIT will be amended and restated in full to reflect these amendments that were set out in the circular.
In order to be effective, the resolution must be approved by at least 66 and two-thirds of the votes cast by unitholders who vote on this resolution. Can I have a motion?
I move to approve the DOT Special Resolution in the form set out starting on page 20 of the circular.
I second the motion.
Are there any questions on this motion? I have been advised by the scrutineers that a majority of the proxies received by management prior to the meeting have been voted and that in excess of two-thirds of the proxies received by management prior to the meeting for the units have been voted for the DOT Special Resolution. I propose to take the vote by a show of hands. I would ask those registered unitholders and duly appointed proxy holders who are in favor of the motion to please raise your hand. Any contrary? The motion is carried. I declare that the DOT Special Resolution has been passed.
The next item of business is to vote on a resolution, which I will refer to as the DOT Ordinary Resolution, to provide for the ability of the Trustees to declare an extraordinary distribution of cash, units, or property of the REIT in specie, such amendments described in the circular. If approved, the declaration of trust of the REIT will be amended and restated in full to reflect these substantive amendments that were set out in the circular. In order to be effective, the resolution must be approved by more than 50% of votes cast by unitholders who vote on this resolution. Can I have a motion?
I move to approve the DOT Ordinary Resolution in the form set out starting on page 22 of the circular.
I second the motion.
Are there any questions on this motion? I have been advised by the scrutineers that a majority of the proxies received by management prior to the meeting have been voted, and that more than 50% of the proxies received by management prior to the meeting for the units have been voted for the DOT Ordinary Resolution. I propose to take the vote by a show of hands. I would ask those registered unitholders and duly appointed proxy holders who are in favor of the motion to please raise your hand. Any contrary? The motion is carried. I declare that the DOT Ordinary Resolution has been passed.
The next item of business is to vote on a resolution to amend the REIT Deferred Unit Incentive Plan to increase the number of deferred trust units and income deferred trust units that may be granted or credited under the plan by a further 1,200,000 units. Can I have a motion?
I move to approve the resolution amending the Deferred Unit Incentive Plan as set out starting on page 24 of the REIT's Management Information Circular.
I second the motion.
Are there any questions on this motion? I have been advised by the scrutineer that a majority of the proxies received by management prior to the meeting have been voted, and that more than 50% of the proxies received by management prior to the meeting for the units have been voted for the Deferred Unit Incentive Plan amendment resolution. Therefore, I propose to take the vote by a show of hands. I would ask those registered unitholders and duly appointed proxy holders who are in favor of the motion to please raise your hand. Any contrary. The motion is carried. I declare that the resolution in the circular relating to the amendment of the REIT's Deferred Unit Incentive Plan to increase the number of deferred trust units and income deferred trust units that may be granted or credited under the plan by a further 1,200,000 units is approved.
The formal items of business as set out in the notice of meeting have now been dealt with. As there is no further business to come before the meeting, I declare the formal part of the meeting to be concluded and the formal meeting adjourned. I now invite the management team to make their short presentation. After their presentation, we will have a question period.
Good morning, everyone. Thank you for joining us today for Dream Industrial REIT's 2026 AGM. Before I get into the company presentation, I'd like to take a moment to thank Vincenza for all of her contributions as a Board Member since the IPO of the REIT in 2012, and as Chair for over a decade. Under Vin's leadership, we have grown from a CAD 300 million REIT with 16 million sq ft portfolio at IPO to become one of the largest industrial platforms in Canada, with global reach and diverse access to capital. Most importantly, DIR is on a great trajectory to achieve even more and continue delivering strong results to unitholders. Thank you, Vin, for your guidance and leadership. On behalf of the entire team, we wish you all the very best. Now, let's talk about that trajectory, and opportunities ahead, and our results.
2025 was marked by significant volatility, ongoing shifts in global trade environment. Despite this backdrop, our business continued to demonstrate resilience with stable cash flows and sustained organic growth. Over the past several years, we've grown our platform nearly 10-fold through several strategic transactions, adding scale, diversifying our footprint, and strengthening our market positioning. We have enhanced the quality of our portfolios through capital recycling, targeted acquisitions, and development of best-in-class industrial buildings. At the same time, we have expanded our private ventures, advanced our power procurement initiatives, strengthened our balance sheet, and access to capital. Today, our industrial platform represents CAD 16 billion of gross asset value, comprising over 74 million sq ft of high-quality urban industrial space in key markets across North America and Europe. Our business is built on a scalable organic growth model supported by four key pillars.
Our core portfolio of urban mid-bay industrial assets drive significant embedded growth through mark-to-market and capturing contractual escalators. Our development pipeline allows us to deliver modern, functional assets that generate attractive returns while enhancing the quality of our business. Our private venture strategy enables us to scale our platform alongside leading global institutions while generating recurring fee incomes through property management and leasing capabilities. Lastly, as power becomes more important for occupiers, we're investing in renewable energy and other power procurement initiatives to unlock additional value across the portfolio. All of these strategic pillars are underpinned by an investment-grade balance sheet, which provides a solid foundation for us to pursue the growth opportunities ahead. While we firmly believe in our core strategic pillars going forward, it is important to highlight that they're already producing meaningful results. Let's talk about our results.
Our urban infill portfolio continues to outperform the market in terms of occupancy. Occupancy in our wholly owned portfolio in Canada is 96.8% as of Q1, 240 basis points higher than a year ago, and 95% in Europe. This is driven by solid leasing velocity and tenant retention. Over the past few quarters, we have seen consistent re-acceleration in our comparative NOI growth, totaling 5.7% year-over-year in 2025 and 9% in Q1 2026. While we retain significant free cash flow after distributions, allowing us to fund our growth initiatives, we're focusing on capital recycling to drive further accretion. A growing private venture segment enhances our capital recycling opportunities. Since the beginning of 2025, we completed or firmed up on over CAD 840 million of dispositions at premium to our carrying values.
This includes the recent recapitalization of a 3.6 million sq ft Canadian portfolio from the REIT to a recently formed joint venture with CPP Investments. These capital recycling initiatives allow us to continuously upgrade our portfolio, return capital to unitholders through NCIB program, while re-enhancing our cash flow metrics and total returns on a leverage-neutral basis. To support all of our strategic initiatives, we maintain one of the strongest balance sheets in Canadian REIT sector. Our debt-to-EBITDA was 7.3 x as of Q1 2026, down from 8x a year ago, and our leverage remained within our target mid to high 30% range. Our focus on balancing strengths and liquidity has been recognized over the past year with a credit rating upgrade by DBRS Morningstar to BBB ( high).
All of this has translated into solid FFO growth of 4.9% in 2025, reducing our payout ratio further to 67%, and our current 5% distribution yield remains well-covered and supported by stable and recurring cash flows. With our strategic drivers already contributing meaningful to our results, I'll take a few moments to walk through each one of them in a bit more detail. Let's start with our urban portfolio. Our assets are located in close proximity to major population centers with key transportation networks offering highly versatile space suitable for a variety of uses, including warehousing, last-mile logistics, and industrial outside storage. Many of these sites also have long-term value creation potentials for redevelopment, repositioning, and continue to experience steady demand from a diverse mix of occupiers. We have highlighted some of our key customers on this page, many of whom have multi-location footprints with us.
Growing these relationships is a key focus for us. As a result of the urban nature of our assets, we prioritize mid-bay properties, which are outperforming the market on average, given the sustained demand and limited supply. Let's unpack what this means in the next few slides. This is our portfolio in key Canadian markets. As you can see, we have meaningful scale in each of our markets, allowing us to capture opportunities with occupiers. Our average occupier size and unit size is below 30,000 sq ft in all of our markets, which allows us to drive mark- to- market and retention. The diversification of our occupied base leads to stability, with no leasing decision impacting the broader portfolio performance.
Our occupancy metrics speaks for themselves as we outperform the market materially, not only as a result of our vertically integrated platform, the quality of our assets, but also a small and big bay segment of the market exhibits stronger fundamentals than the broader industrial market on average. Let's talk about fundamentals. Canadian markets are robust and balanced, with vacancy rates substantially below North American averages. This is a result of constrained supply, which we will discuss on the next slide, and sustained demand. Within these already balanced industrial markets, as you can see, small and mid-bay segments are materially tighter as supply of this product is even more constrained. This balanced demand with tighter vacancy rates are starting to translate into rental growth.
We're seeing this in Western Canada already and starting to see more evidence of rental growth in some sub-markets in the GTA, with smaller formats leading the way. We spoke about constraints on supply, and this chart illustrates new developments in our Canadian markets. New supply and construction pipeline is currently less than 3% in Calgary, with very high pre-leasing rates and below 1% in GTA and GMA with some pre-leasing within that. While this supply is already limited, most of the new supply is focusing on larger formats, big boxes, and supply of our target product is significantly tighter. We believe that these low supply metrics will continue to translate into healthy fundamentals in Canadian markets in the future. In Europe, our focus is in the Netherlands, Germany, and France, where we are allocating capital to mid-size infill assets near a major metropolitan area.
Similarly to Canada, our assets outperforming the market from occupancy and rental growth standpoint. Supply of urban mid-bay industrial is even more constrained in Europe, especially in core Western Europe, compared to Canada. This limited supply and consistent demand from e-commerce, reshoring, and growing defense spending is consistently putting pressure on rents. Illustrated here is rental growth differential between urban mid-bay assets and big box assets. We expect this trend to continue in these Western European markets as they remain undersupply relative to tenant demand, resulting in low vacancy rates, rising rents, and increasing institutional capital allocation to the sector. All of these trends are evident in our operating results. Our occupancy has remained consistently strong for over a decade, and our retention has also remained high in 70%-80% range, very consistently, reflecting, again, the quality of our assets and our ongoing focus on long-term relationships with our occupiers.
We spoke about the stability of our results. This stability is not taking away from growth. Since 2021, our in-place rents in our portfolio have grown consistently in Canada and in Europe, even through periods of market volatility. Canada has delivered strong growth at approximately 8.5% annually, while Europe has experienced growth of 4.5%, supported by CPI indexation in our leases. We have more drivers of growth, including embedded mark-to-market opportunities, contractual rent steps, which stand at 3% in our Canadian portfolio, and CPI indexation of the European leases. All of this positions the portfolio well to deliver strong results going forward. Moving to development and intensification. Since 2021, we have delivered or substantially completed approximately 2.7 million sq ft of high-quality industrial product at an average yield on cost of 6.7%. This translates into CAD 36 million of annualized NOI on a run-rate basis.
We currently have a robust pipeline of projects allowing us to leverage our extensive line bank at attractive returns. Our third pillar centers on our strategic private ventures, which have grown significantly over the last four years, enhancing both the scale and profitability of the overall platform. This capital-light strategy allows us to scale in a disciplined manner, deepening our presence in existing markets, expanding into new ones while preserving balance sheet flexibility. As co-investors alongside our leading global institutions, we continue to participate in NOI growth and long-term value creation while sharing risk. These ventures also enhance our capital recycling opportunities. A recent example of the CAD 800 million initial portfolio that we seeded into the DCI joint venture, which was transacted at a premium to IFRS and reinforced the intrinsic value of our assets. This also allowed us to redeploy proceeds on an accretive basis, including selective buybacks.
Importantly, as we continue to grow our private business, the fee revenue we generate from these assets has potential to scale materially over time. In 2025, we generate over CAD 21 million in gross fees and over CAD 24 million on annualized basis today. These represent a compounded annual growth rate of approximately 80% over this period. Lastly, our power procurement initiatives provide an additional lever for earnings and NAV growth over time. As we highlighted earlier, power is becoming increasingly important for our occupiers, and one of our key advantages is our urban portfolio and our potential to capitalize on this opportunity. We're actively investing in value-add initiatives including solar energy, EV charging infrastructure, and battery storage to enhance the income generated from our existing assets. To date, we have already deployed significant capital, completing 32 projects with 26 MW, achieving a 12% yield on cost.
Additionally, we have a strong pipeline of CAD 140 million targeting yields of 8%-10% on incremental costs. In addition to strong returns, this program allows us to partner with our occupiers, enhancing retention and growth prospects. In addition to renewable energy, we're also making good progress on our power procurement initiatives for data center purposes. We're in advanced dialogue on over 200 MW of capacity in the GTA. Over near to medium term, we have identified 30 sites in Canada and Europe for continued evaluation. I want to highlight that this initiative is purely additive to our core business and could unlock meaningful value and NOI potential as we advance the dialogue with utilities, potential users or joint venture partners. I will now turn it over to Lenis to talk about our financial performance.
Thanks, Alex. Good morning, everyone. We have been successfully executing on all our key growth drivers. As a result, our portfolio has produced consistent and growing comparative properties NOI growth over the past five years, with an average growth rate of approximately 7.5%. This steady growth has been driven primarily by capturing higher rents on lease rollovers and contractual rent escalators or CPI indexation built into our leases. This is evidenced by strong in-place rent growth of approximately 7% annually since 2021. In Q1 2026, we delivered 9% year-over-year CPNOI growth. The outlook for organic growth within our business remains intact, and we expect the pace of CPNOI growth for the full year 2026 to be stronger than that of full year 2025. Our robust organic growth has translated into consistent FFO growth. Since 2020, our FFO per unit has grown at over 8% annually.
It's worthwhile highlighting that this growth has been achieved despite refinancing CAD 1.6 billion of low-cost euro debt in a more challenging interest rate environment. During this period, we have absorbed over 200 basis points of increase in our weighted average cost of debt while continuing to deliver steady FFO per unit growth. Our average in-place cost of debt is currently 3.19%, which is close to our estimated current marginal cost of debt. As the gap between our in-place and marginal cost of debt continues to narrow, refinancing headwinds going forward will lessen and could even become a slight tailwind, which sets us up well for continued strong FFO per unit growth beyond 2026.
At the same time, we have strengthened our balance sheet, reducing leverage and lowering our payout ratio to 67% in 2025, which allows us to retain free cash flow after distributions every year and reinvest back into the business. We remain focused on maintaining a robust balance sheet and disciplined capital allocation. With total available liquidity of over CAD 600 million, leverage in our targeted mid to high 30% range and debt to EBITDA in the mid seven times range, we retain sufficient capacity to execute on our strategic initiatives. The continued delivery of successful results from all our strategic pillars, along with a disciplined approach to capital allocation, has supported our track record of delivering strong total returns to our unitholders. We have consistently outperformed the broader TSX REIT Index. I will now turn it back to Alex to wrap up.
Thank you, Lenis. Dream Industrial's functional high-quality urban portfolio and diverse occupied base provide us with several opportunities to enhance revenue and value, as we discussed today. Together with the scale and resilience of our operating platform, our business is well-positioned to successfully navigate ever-changing economic cycles while we deliver robust FFO per unit growth and continue creating value for unitholders. I'd like to take a moment to thank our employees and our team for their dedication and enthusiasm. I'd like to thank our Board for their support and guidance, and on behalf of the management team and the Board, I'd like to thank our unitholders for their support. Thank you very much. We'll now open up for questions. Sir.
Okay. The annual report. I'm Paul Durnin from Burlington.
Good morning.
On page 1, Management's Discussion and Analysis, down at the bottom there, it shows a sharp drop in net income from 2024 to 2025. It fell from CAD 259,000 to CAD 170,000. Is that a change in depreciation numbers that has caused that? That's not in line with the kind of growth you've just discussed. What's the reason for that?
Thank you for that question. I don't have the MD&A in front of me, but I believe you're referring to the overall net income, which includes IFRS gains in any period. As values of our assets change, we would recognize that change in value in our net income. It's not cash earnings. The metrics that we tend to focus on from a performance standpoint is FFO per unit, which is an earnings metric, but that does not take into account changes in fair value of assets or other instruments. That's a more meaningful metric that is less prone to volatility.
Okay. Yeah, I understand that. Now, I haven't got it in front of me, but it's in the book. Compared to the TSX REIT Index, you showed just a minute ago up on the screen that it's outperforming. The chart shows it underperforming, not a lot, but from 2020 until present, it's underperforming the TSX REIT Index.
I think the chart that we showed just now is the total return chart, so that takes into account.
No, that it's total return as well.
I think when it comes to measuring performance against index, obviously it changes any day, and so the starting point really makes a difference sometimes. I think what matters is consistency over long periods of time. On our chart, we just highlighted year -to- date, one- year, five- year, and 10- year outperformance. I'm not sure with the chart that you're referring to, but there might be periods of time where we're performing in line. Again, performance any given day or any given month is hard to control, but what we're focusing is long-term performance, long-term value.
Okay. Thank you.
Thank you, sir. Doesn't look like we have any further questions. Again, thank you very much for joining us today, and we look forward to reporting back next year. Thank you.