Mr. Brian Pauls reports

DREAM INDUSTRIAL REIT ANNOUNCES CONTINUED PORTFOLIO TRANSFORMATION, DEVELOPMENT UPDATE AND $175 MILLION EQUITY OFFERING

Dream Industrial Real Estate Investment Trust today provided an update on its robust pace of capital deployment, the progress on its development pipeline and the REIT has launched a $175-million equity offering.

"Over the past four years, we have identified several priorities to transform Dream Industrial into a high-quality, geographically diverse entity. We have acquired $1.3-billion of assets in Europe, Ontario, Quebec and the U.S., divested assets in Atlantic Canada, and have initiated a large-scale development program. NAV growth over this time period has been 34 per cent and the REIT has significantly reduced its leverage and balance sheet risk. Our portfolio is now more modern and logistics oriented, with buildings that are on average 25-per-cent larger and leased to tenants that are 75-per-cent larger, with over 40 per cent of our base rent coming from tenants occupying spaces larger than 100,000 square feet," said Brian Pauls, chief executive officer of Dream Industrial REIT. "With our seasoned platform in North America and Europe and our strong balance sheet, the REIT is very well positioned to capitalize on the momentum and strong industrial fundamentals in a postpandemic environment. Our current acquisition and development pipeline is exceptionally strong and presents a unique opportunity to drive further improvements in quality and value for the REIT and our investors over the long term."

Acquisition update

In 2021, the trust has completed or waived conditions on 13 acquisitions valued at $329-million in Canada, the U.S. and Europe. These include $138-million of acquisitions announced with our Q4 2020 results and $191-million of new acquisitions, which include:

• A 366,000-square-foot Class A distribution and warehousing asset in the Greater Montreal Area (GMA) for $62-million. Built in 2003, the building was expanded by 138,000 square feet of 32-feet-clear warehouse space in 2020. The property is fully occupied by tenants primarily in the logistics and health care industries. With the average in-place rent 10 per cent below the current market rent and with a weighted average remaining lease term of 3.5 years, the trust expects to generate significant rental rate growth as leases roll.
• A brand-new mid-bay logistics facility in Arnhem, Netherlands, for 21 million euros ($31-million). The property spans 159,000 square feet with a clear ceiling height of 48 feet. The asset is well located, having access to major Dutch and German markets, and is fully occupied by a logistics tenant with 10 years remaining on the fully indexed lease.
• Five assets closed for $51-million and three assets where all conditions have been waived for $47-million in Ontario, Quebec and Europe, which added 671,000 square feet to the portfolio, and enabled the trust to execute on its clustering strategy within its existing markets.

These 2021 acquisitions add 1.9 million square feet of high-quality, well-located and functional logistics space to the trust's portfolio. Built on average in the mid-2000s, these assets are above the average quality of the trust's portfolio, with an average clear ceiling height of 30 feet.

The trust is also currently under contract or in exclusive negotiations on approximately $160-million of assets in the trust's target markets of Ontario in Canada, Midwestern United States, as well as Germany and Netherlands in Europe. These acquisitions are expected to close in the next 45 to 60 days, subject to completion of due diligence.

The trust's acquisition pipeline remains strong with over $300-million of acquisitions being currently underwritten across North America and Europe.

Development update

The trust continues to focus on building and executing on a development pipeline across its three operating regions. The trust is in the final predevelopment stages on projects totalling approximately one million square feet in 2021. The trust has provided some highlights on its near-term development activities below:

• The trust expects to commence construction of a 460,000-square-foot Class A distribution facility on its 24.5-acre site in North Las Vegas in Q2 2021. The trust estimates that the yield on cost on this development will exceed 6 per cent.
• At the trust's recently acquired 527,000-square-foot property in the GMA, the trust intends to expand the property by 220,000 square feet. The intensification is expected to occur over two phases, and the trust expects to commence construction of phase 1 in April, 2021. The trust continues to advance phase 2 of the project with construction anticipated to start in Q3 2021. The trust expects to achieve a yield on construction costs of over 6.5 per cent on this project.
• The trust has entered into construction agreements to expand its current 110,000-square-foot asset located in the Greater Toronto Area by an additional 43,000 square feet. The trust intends to commence construction in Q3 2021 and expects to achieve a yield on construction costs of approximately 8 per cent.
• In Germany, the trust intends to add over 200,000 square feet of gross leasable area to its recently acquired property in Dresden. The trust expects to be in a position to commence construction in Q4 2021, with an estimated yield on construction costs of over 6 per cent.

Over all, the construction costs on the aforementioned projects are expected to amount to approximately $90-million. The trust has access to an extensive development and redevelopment pipeline beyond these projects which it expects to access over time.

"We look forward to commencing a structured development program and adding brand-new, high-quality properties to the portfolio as a complement to our acquisition strategy," said Alexander Sannikov, chief operating officer of Dream Industrial. "A significant component of our development program is expected to focus on leveraging the REIT's predominantly urban portfolio in North America and Europe, where we have a unique opportunity to add highly sought after industrial product in infill locations with steep barriers to entry and rising land costs. Paired with opportunistic greenfield development, we expect this strategy to result in meaningful NAV and FFO per unit accretion over time."

Financing update

The trust continues to focus on increasing financial flexibility. On April 1, 2021, the trust repaid upon maturity, a $22-million (U.S.) loan secured by a United States property. On a pro forma basis, taking into consideration the repayment of this mortgage and closing of assets that are currently firm, under contract, or in exclusive negotiations, the trust's unencumbered asset pool is expected to total $2.3-billion, representing over 60 per cent of the trust's total investment properties value. In just over 90 days, the trust has deployed nearly $450-million of capital toward acquisitions and repayment of secured debt, with an additional $300-million of capital earmarked for acquisitions that are firm, under contract, or in exclusive negotiations, as well as planned development costs. In addition, the pipeline of investment opportunities continues to be active and the pace of capital deployment is expected to remain robust.

The trust today announced that it has entered into an agreement to sell, on a bought deal basis, 12.92 million units of the trust at a price of $13.55 per unit to a syndicate of underwriters led by TD Securities Inc. for total gross proceeds of approximately $175-million. In addition, the trust has granted the underwriters an overallotment option to purchase up to an additional 1,938,000 units, exercisable in whole or in part, for a period of 30 days following closing of the offering. If the overallotment option is exercised in full, the gross proceeds of the offering will total approximately $201-million. Closing of the offering is subject to certain customary conditions, including the approval of the Toronto Stock Exchange. The offering is expected to close on or about April 26, 2021.

The trust intends to use the net proceeds from the offering, together with cash on hand: (i) to finance acquisition and development opportunities; (ii) to repay indebtedness; and (iii) for general trust purposes.

"This equity offering allows us to continue to execute on our strategy to grow and upgrade portfolio quality," said Lenis Quan, chief financial officer of Dream Industrial. "Net proceeds from the offering are expected to be utilized towards $160-million of acquisitions that are under contract or in exclusivity as well as to fund development costs, and we will gain balance sheet capacity to deploy an additional $300-million, while keeping leverage in our targeted mid-to-high 30-per-cent range."

The units will be offered by way of a shelf prospectus supplement to the trust's base shelf prospectus dated Oct. 11, 2019, to be filed on or about April 19, 2021, with the securities commissions and other similar regulatory authorities in each of the provinces of Canada.

About Dream Industrial Real Estate Investment Trust

Dream Industrial REIT is an unincorporated, open-ended real estate investment trust. As at March 31, 2021, the trust owns and operates a portfolio of 186 assets (280 industrial buildings) comprising approximately 28.9 million square feet of gross leasable area in key markets across North America and a growing presence in strong European industrial markets. The trust's objective is to continue to grow and upgrade the quality of its portfolio and to provide attractive overall returns to its unitholders.

We seek Safe Harbor.