Dream Industrial Reports 2.5% Growth in AFFO Per Unit and 1.5% Growth in Net Operating Income

TORONTO, ONTARIO--(Marketwired - May 5, 2015) -

This news release contains forward- looking information that is based upon assumptions and is subject to risks and uncertainties as indicated in the cautionary note contained within this press release.

DREAM INDUSTRIAL REIT (TSX:DIR.UN) today announced its financial results for the three months ended March 31, 2015.

HIGHLIGHTS

• Adjusted Funds From Operations ("AFFO") per unit increased by 2.5% over Q1 2014 - Diluted AFFO for the three months ended March 31, 2015 was 20.2 cents compared to 19.7 cents for the three months ended March 31, 2014 and 20.2 cents for the three months ended December 31, 2014.
• Comparative Properties Net Operating Income increased by 1.5% over Q1 2014 - Driven by an increase in occupancy and positive lease spreads in our Western Canada portfolio.
• Strong leasing pipeline maintained - Approximately 614,000 square feet of new leasing and renewals commenced in the first quarter at rates 9.9% higher than rates on expiries and terminations. To date, commitments have been obtained for over 1 million square feet of new leasing and renewals commencing in the remainder of 2015 compared to 2.1 million square feet of expiries.
• Stable capital structure - Leverage remained stable at 52.4%, with interest coverage ratio of 3.0 times and a weighted average term to maturity on debt of 3.9 years.

SELECTED FINANCIAL INFORMATION
(unaudited)	Three Months Ended
($000's except unit and per unit amounts)	March 31, 2015			December 31, 2014			March 31, 2014
Investment properties revenue	$	43,940		$	44,588		$	40,914
Net operating income ("NOI")(1)		29,703			29,989			27,215
Funds from operations ("FFO")(1)		18,621			18,833			17,044
Adjusted funds from operations ("AFFO")(1)		15,603			15,541			14,006
Investment properties value		1,684,542			1,681,781			1,532,065
Debt		910,846			921,293			836,061
Per unit data(1), (2)
AFFO - diluted		0.202			0.202			0.197
FFO - diluted(1)		0.237			0.240			0.234
Distributions		0.175			0.175			0.175
FFO payout ratio (%)(1), (3)		73.8	%		72.9	%		74.8	%
AFFO payout ratio (%)(1), (3)		86.6	%		86.6	%		88.8	%
Units (period-end)
REIT Units		58,196,975			58,035,125			55,063,083
LP Class B Units		18,551,855			18,551,855			16,282,096
Total number of units		76,748,830			76,586,980			71,345,179
Portfolio gross leasable area (square feet)		16,944,061			16,942,899			15,599,084
Occupied and committed space		95.3	%		96.0	%		96.3	%
Average occupancy for the period		94.7	%		94.6	%		94.9	%
See footnotes on page 3.

"The Canadian industrial market remains fundamentally strong. Dream Industrial delivered solid results for the first quarter," said Brent Chapman, President and Chief Executive Officer. "We continue to be on track to meet our leasing and growth targets for the year. Our Western Canada portfolio has performed strongly in Q1 with 97.8% occupancy and a 78% tenant retention ratio. We expect our Ontario and Eastern Canada portfolios to benefit from the positive outlook in the Canadian manufacturing and export sectors."

FINANCIAL HIGHLIGHTS

• AFFO Growth - AFFO for the quarter was $15.6 million or 20.2 cents on a per unit basis. AFFO per unit for the quarter was 2.5% higher than during the same period in the prior year, primarily due to acquisitions completed in September 2014 and an increase in comparative properties NOI. AFFO per unit for the quarter remained stable compared to the fourth quarter of 2014.
• Increase in FFO per unit - FFO for the quarter was $18.6 million or 23.7 cents per unit. FFO per unit for the quarter increased by approximately 1.3% when compared to the same period in the prior year due to comparative properties NOI growth and acquisitions completed in September 2014. FFO per unit for the quarter decreased by 1.3% compared to the fourth quarter of 2014, due largely to a decrease in NOI offset by interest savings on refinancing activities.
• Total NOI of $29.7 million for the quarter - Total NOI has grown 9.1% for the quarter compared to the same period last year, as a result of acquisitions completed in the third quarter of 2014 and comparative properties NOI growth of 1.5%. Compared to the fourth quarter of 2014, NOI decreased slightly due to the sale of properties in February 2015.

OPERATIONAL HIGHLIGHTS

• Leasing profile - Leasing activity during the first quarter included 159,000 square feet of new leases, 455,000 square feet of renewals, and lease commitments of 180,000 square feet, compared to 782,000 square feet of expiries and early terminations. At period-end, the Trust had 983,000 square feet of vacant space, of which 180,000 square feet is committed for future occupancy. The Trust has already leased 53% of the 2.1 million square feet of space expiring in the remainder of 2015. The average remaining lease term at March 31, 2015 is 4.3 years. In April 2015, we completed a 60,000 square foot lease in Quebec for a term of five months which is expected to contribute $0.3 million to NOI. This short-term lease has not been included in committed occupancy.
• Portfolio occupancy at 95.3% - Overall occupancy (including committed space) was 95.3% compared to 96.0% at the end of the fourth quarter of 2014 and 96.3% at March 31, 2014. Leasing commitments on vacant space for the quarter totalled 180,000 square feet.
• Positive leasing spreads on renewals - In-place rents increased to $7.10 per square foot compared with $7.05 at December 31, 2014, as a result of positive spreads on leasing and contractual rent steps. Renewals were completed at $7.60 per square foot which is $0.37 above the expiring rates for those spaces.
• Estimated market rents 3.9% above average in-place rents - At quarter-end, estimated market rents were approximately 3.9% above the Trust's current average in-place rental rate of $7.10 per square foot. The 3.9% difference between in-place and market rent provides the Trust with opportunities for continued rental rate growth.

March 31, 2015	GLA (million sq. ft.)	Occupancy (%)	Average lease term (years)	Average in-place rent (per sq. ft.)		Estimated market rent (per sq. ft.)
Western Canada	4.8	97.8	4.3	$	8.96	$	9.65
Ontario	5.0	97.1	3.9		6.02		6.11
Quebec	4.3	91.4	5.8		6.13		6.23
Eastern Canada	2.8	93.4	3.1		7.20		7.35
Total	16.9	95.3	4.3	$	7.10	$	7.38

• Disposition of assets - During the quarter, the Trust completed the disposition of four properties in Calgary for total gross proceeds of approximately $10.9 million which was used to repay debt. These dispositions are consistent with our strategy to recycle capital and enhance the quality of our portfolio.

CAPITAL STRUCTURE

The Trust's capital structure remained stable during the quarter, with leverage at 52.4% and interest coverage of 3.0 times.

Key performance indicators	March 31, 2015		December 31, 2014		March 31, 2014
Level of debt (debt-to-total assets)(1)	52.4	%	52.9	%	52.4	%
Interest coverage ratio(1)	3.0 times		3.0 times		2.9 times
Weighted average face interest rate on all debt	4.01	%	4.07	%	4.17	%
Weighted average effective interest rate on all debt	3.83	%	3.85	%	3.86	%
Debt - weighted average term to maturity (years)	3.9		3.9		4.2
See footnotes on page 3

During the quarter, the Trust completed a $33 million mortgage for a term of seven years at a rate of 2.63%, secured by a portfolio of four properties in Regina. The Trust continues to improve its financial metrics, and is strategically looking at opportunities to take advantage of the current favourable interest rate environment, while continuing to maintain a balanced debt maturity profile.

Other information

Information appearing in this news release is a select summary of results. The condensed consolidated financial statements and management's discussion and analysis for the Trust will be available at www.dreamindustrialreit.ca and on www.sedar.com.

Dream Industrial REIT is an unincorporated, open-ended real estate investment trust. Dream Industrial REIT owns a portfolio of 216 primarily light industrial properties comprising approximately 16.9 million square feet of gross leasable area in key industrial markets across Canada. Its objective is to build upon and grow its portfolio and to provide stable, sustainable and growing cash distributions to its unitholders. For more information, please visit www.dreamindustrialreit.ca.

FOOTNOTES

(1)	AFFO, FFO, comparative properties NOI, NOI, level of debt (debt-to-total assets), leverage and interest coverage ratio are non-GAAP measures used by Management in evaluating operating performance and debt management. Please refer to the cautionary statements under the heading "Non-GAAP Measures" in this press release.
(2)	A description of the determination of diluted amounts per unit can be found in our Management's Discussion and Analysis for the three months ended March 31, 2015 under the heading "Non-GAAP Measures and Other Disclosures".
(3)	Payout ratios for FFO and AFFO are calculated as the ratio of distribution rate to diluted FFO and AFFO per unit, respectively.

Non-GAAP Measures

The Trust's condensed consolidated financial statements are prepared in accordance with International Financial Reporting Standards ("IFRS"). In this press release, as a complement to results provided in accordance with IFRS, the Trust discloses and discusses certain non-GAAP financial measures, including net operating income ("NOI"), comparative properties NOI, funds From operations ("FFO"), adjusted funds from operations ("AFFO"), level of debt (debt-to-total assets), leverage and interest coverage ratio as well as other measures discussed elsewhere in this release. These non-GAAP measures are not defined by IFRS, do not have a standardized meaning and may not be comparable with similar measures presented by other income trusts. The Trust has presented such non-GAAP measures as Management believes they are relevant measures of the Trust's underlying operating performance and debt management. Non-GAAP measures should not be considered as alternatives to net income, cash generated from (utilized in) operating activities or comparable metrics determined in accordance with IFRS as indicators of the Trust's performance, liquidity, cash flow, and profitability. For a full description of these measures, please refer to the "Non-GAAP Measures and Other Disclosures" in Dream Industrial REIT's Management's Discussion and Analysis for the three months ended March 31, 2015.

Forward-looking information

This press release may contain 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, which could cause actual results to differ materially from those that are disclosed in or implied by such forward-looking information. These risks and uncertainties include, but are not limited to, general and local economic and business conditions; the financial condition of tenants; our ability to refinance maturing debt; leasing risks, including those associated with the ability to lease vacant space; and interest and currency rate functions. Our objectives and forward-looking statements are based on certain assumptions, including that the general economy remains stable, interest rates remain stable, conditions within the real estate market remain consistent, competition for acquisitions remains consistent with the current climate and that the capital markets continue to provide ready access to equity and/or debt. All forward-looking information in this press release speaks as of the date of this press release. Dream Industrial REIT does not undertake to update any such forward-looking information whether as a result of new information, future events or otherwise except as required by law. 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 MD&A. These filings are also available at Dream Industrial REIT's website at www.dreamindustrialreit.ca.