Thank you. Good morning, everyone.

Thank you for joining us today for Dream Industrial REIT's second quarter 26 conference call. Here with me today is Gordon Wadley, our Chief Operating Officer and Lenis Quan, our Chief Financial Officer.

We delivered another quarter of strong operating and financial results and achieved some significant milestones during the quarter. For the quarter, we delivered 10.3% year over year comparative properties NOI growth driven by healthy leasing activity, leasing spreads and strong occupancy.

The strong pace of organic growth drove per unit growth nearly 8% over last year. We also announced a 2.5% increase in our distribution.

First since 2013. This increase is supported by our robust operating and financial performance to date, the progress we have made in establishing various growth drivers for our business, our solid balance sheet and most importantly, the confidence we have in the outlook for the business.

It is also consistent with our objective of increasing the distribution over time at a pace that represents a portion of our free cash flow growth so that the amount of retained cash flow available to be reinvested in our business continues to compound. We are executing on our strategic priorities, and a key focus this year is redeploying the proceeds from the initial portfolio sale to the DCI Venture with CPP Investments, which was completed in 2 tranches earlier this year.

We have made good progress on the redeployment front. In addition to our NCIB activity, since the beginning of the year, we have completed or placed under contract over $515 million of acquisitions across our wholly owned portfolio at accretive returns.

Within our wholly owned portfolio, we have completed $332 million of acquisitions so far this year, adding over 2 million square feet of urban infill small bay and mid bay assets across Canada and Europe. These assets were acquired at a going in yield of approximately 6.3% with strong embedded rental growth through to translate into mark to market yield of approximately 7.4%.

More recently, we completed the acquisition of an 11 asset portfolio located across major German urban areas, with and place rents approximately 20% below market. We have further $140 million of acquisitions under contract, in exclusive negotiations across Canada and Europe that are expected to close in the third quarter at similar going in yields and mark to market potential.

In addition, we announced the Chancery Gate transaction last week. This transaction helps us achieve multiple strategic objectives for our European business.

Are entering The U.K. multilet industrial sector, which is under underpinned by strong structural demand tailwinds and constrained urban land supply.

It is a natural extension of the small and mid bay strategy we have been executing across our markets. We are entering the market with a high quality wholly owned portfolio of recently completed development assets in addition to 2 projects currently underway.

We expect to invest $150 million in these assets at an expected yield on cost of 8%. Lastly, we are adding immediate scale to our private ventures in Europe through existing vehicles and the new programmatic JV.

For the existing vehicles, we are acquiring just over $40 million of co investment interest alongside institutional partners and several JVs with a gross asset value of over $2 billion. These assets are expected to generate stabilized unlevered yield on cost of 7.5%.

Given the scale of these JVs in The U.K., we will explore opportunities to establish a property management platform in this market to grow our recurring revenue further. In addition, we are in advanced negotiations to set up a new partnership with a target gross asset value of $800 million also focusing on multilet industrial assets, primarily in Continental Europe.

DIR is expected to have a 5% stake in this new JV and provide property management and leasing services in Germany and the Netherlands, where we have an in-house Platform. Our existing Private Ventures segment is performing well and continues to scale and contribute to our overall earnings.

Operationally, the performance is in line with our business plan as we see improving fundamentals across our markets. Since the beginning of 2025,, these JVs have completed over $660 million of acquisitions in addition to the recapitalization of the seed portfolio by the DCI JV.

And our net Property Management income grew nearly 28% year over-year this quarter. The acquisition pipeline remains robust for our JVs, through marketed and off market opportunities, And in addition, we continue to recycle capital out of nonstrategic assets.

at accretive returns. Lastly, we are making progress on our power procurement program with select assets that we have identified as candidates for data center development.

We are responding to various RFPs from occupiers and we have seen the level of engagement generally increasing over the past quarter. In parallel, we are working with various utilities to put in place formal agreements for power delivery timelines.

We will report back with more details as we make progress. Overall, we are encouraged by our financial results operational progress and advancement of our strategic initiatives.

I will now turn it over to Gordon to discuss our operational highlights.

Thank you, Alexander. The industrial sector is demonstrating resilience despite ongoing volatility from macro events.

The Canadian industrial market strengthened over the prior quarter, National availability declined quarter over quarter with most major markets posting flat or reduced availability. Moreover, the new supply pipeline continues to moderate supporting leasing fundamentals in major markets nationally.

We expect these trends to support continued absorption and rent growth expectations across most of our operating markets. These trends and improving market dynamics are reflected in our operating results.

Committed occupancy in Canada was 96.8% at quarter end. Up 150 basis points from a year ago.

While our in place occupancy of 96% is 200 basis points higher year over year. This absorption is driven by the lease up of several vacancies in Quebec, and our recently completed development in Alberta, which is now 100% leased.

We are seeing more deal velocity, including development leasing, We have completed 247 deals for over 6.1 million square feet across the whole platform, inclusive of private ventures since January 2026. Of this,, 173 deals for 3.3 million square feet were leased across our wholly owned DIR portfolio at a weighted average rental spread of 21.1% over prior or expiring rents, including 1.1 million square feet of new leasing.

Leasing economics remain disciplined Waltz continued to be stable with average lease terms of 4.1 years. Compared to 2025, we are seeing a reduction in lease incentives across major markets resulting in continued growth in net effective rents portfolio wide.

This trend is strongest in Calgary, where we are starting to see a healthy pace of rental growth and upward pressure on rental escalators. We are also seeing it impact the GTA, as surplus availability in that market gets absorbed.

We expect incentives to normalize further in turn putting upward pressure on net effective rents and ultimately translating to higher face rents. Our development leasing momentum also accelerated.

During the quarter, we signed over 370 thousand square feet of leases at projects across our broader industrial platform. Including the Greater Toronto Area and the Kitchener Waterloo corridor.

Notably, we signed a 265 thousand square foot 10 year lease with a global automotive manufacturer at a project in Cambridge, Ontario, bringing the property to 100% occupancy starting in the third quarter. This project has now generated an unlevered yield on cost of 6.7%.

Subsequent to the quarter, we entered into a binding lease for 127 thousand square feet at a recently completed redevelopment project in Whitby, and are in advanced negotiations for another 110 thousand square feet which would lift occupancy at the property to over 60%. Over in Europe, leasing velocity for urban Mid Bay assets has remained resilient and we continue to see positive absorption in that segment.

While absorption timelines for larger bay products have been somewhat slower. In place occupancy in Europe was 92.5% at quarter end.

Primarily reflecting an anticipated transitory vacancy in Spain. As well as the vacant value add asset in The Netherlands that we acquired last quarter.

We are in advanced negotiations to lease up both vacancies. The leasing pipeline remains strong with multiple ongoing negotiations.

Despite the temporary occupancy pressure, our European portfolio delivered solid comparative properties NOI growth of 5.6% year over year in the quarter. This growth was supported by CPI linked rent increases higher rents on new and renewed leases, and contributions from completed intensification projects.

Importantly, our European leases are indexed to local CPI or include contractual rent steps, providing embedded annual growth across the portfolio. As those indexation provisions reset, they provide potential upside to NOI in 2027.

In addition, our transitory vacancies are attracting good lease discussions in tours. Which when leased would set us up well for the strong operating performance in our European portfolio to continue into next year.

In terms of occupancy, and CPNOI growth. Overall, our leasing pipeline remains healthy with over 35 deals in 2.5 million square feet in various stages of negotiations coupled with continued tour velocity and deal economics.

We are encouraged by the trajectory of our occupancy across the portfolio for the balance of 2026. I will now turn it over to Lenis to discuss our financial highlights.

Thank you, Gordon. Our portfolio delivered comparative properties NOI growth of 10.3% for the quarter.

Led by 14.6% growth in the Canadian portfolio and 5% growth in Europe. This strong pace of organic growth, along with higher property management income, contributions from acquisitions and development lease up and the benefit of our NCIB activity drove diluted FFO per unit to $0.28 for the second quarter.

7.8% higher than the prior year quarter. These factors more than offset the impact of refinancing at higher interest rates and operating at lower leverage following the asset sales to the DCI JV.

Our net asset value at 0.25 end was $16.76 per unit in line with the prior quarter, reflecting stable investment property values. At the end of June, we closed the second tranche sale of assets to the DCI venture for net proceeds of $353 million.

The proceeds were used to partially repay our revolving credit facility and to fund acquisitions completed subsequent to the quarter. We ended the quarter with approximately $750 million in available liquidity leverage of 35.8% and a net debt to EBITDA ratio of 6.6 times.

As we deploy our available balance sheet capacity over the remainder of the year, we expect leverage to trend back towards our targeted high 30% range and our run rate net debt to EBITDA to trend towards the mid-7x range. The 2.5% distribution increase will take effect with our September 15th distribution bringing the annualized rate to $0.75 per unit.

With an FFO payout ratio of 63% this quarter, the increase is well covered. We intend for future distribution increases to be sized at a level below the pace of FFO per unit growth ensuring the business continues to grow its retained cash flow.

Our first half performance demonstrates the strength of our business. And we remain confident in our growth trajectory for the balance of the year.

For the full-year 2026, we continue to expect average in place occupancy in the high 94% to low 96% range. With our strong results for the first half of the year and the healthy leasing momentum across the portfolio, we are raising our full year expectations for comparative properties NOI growth to be 7% to 8% well above the 5.7% growth we delivered in 2025.

Based on the pace of our capital deployment, we expect full year FFO per unit to come slightly ahead of our previous outlook. Overall, the previously communicated range of $1 to $1.10 is intact and we are now expecting the results to be slightly above the midpoint.

The Chancery Gate assets are not expected to have a significant impact on 2026 FFO. We expect them to start contributing to FFO as they are stabilized become income producing over the next 6 to 18 months depending on their stage of development completion.

As always, our FFO growth expectation is predicated on current foreign exchange rates and interest rate expectations. I will turn it back to Alexander to wrap up.

Thank you, Lenis. Dream Industrial's business is anchored by a functional, high quality portfolio supported by a diverse occupier base meaningful new revenue streams.

Our results this quarter highlight the evolution of the total return model for DIR, DIR offers to its unitholders. We remain focused on delivering sustainable and growing free cash flow that we will look to reinvest back into the business as opportunity as our opportunity set continues to expand.

We will now open it up for questions.

Hey, good morning. On the new Pan European JV that you are in advanced discussion on, I am just curious if you can give a little bit of color in terms of if it gets consummated, what the investment strategy and return profile could look like for that new fund?

Thank you, Bradley. Well, the investment strategy will be focused on multilet industrial assets, so similar profile to what Chancery Gate already owns or and manages.

It will be a mix of assets and development with an overall value add return levels. And know, geographically geared towards Continental Europe.

Would you consider--would there be potential to be seeding some of that portfolio with the wholly owned assets you own today? Or would it be strictly more of a third party acquisition vehicle?

It generally focused on new acquisitions. We are not contemplating seeding this JV with any of the assets right now, but there is always possibility to have a conversation No, nothing is--nothing is ongoing at the moment.

Okay. And just for my understanding on Chancery Gate what is the pre leasing rate of the assets either substantially completed or under construction, to just get a sense of what leasing is left to do, if any?

Yeah. So these are multi let assets, as such they do not get pre let during construction, they get the leasing starts generally when the assets are built.

So out of the 300 thousand-square-foot of assets that are the most advanced vis a vis construction. A 100 just over 100 thousand has been built and delivered in Q1.

So that asset has been in lease up. And there we are just about to finalize the lease for about 30% of the space.

And in advanced negotiations for another 15%. So it is going quite well, and the asset was just delivered in the first quarter, just highlighting the leasing velocity for this kind of product.

And then the other 2 assets are going to be delivered in September. So leasing, marketing is starting, but the lease up will likely start ramping up then.

And so what will be generally your expectations for the timeline for a full lease up process to reach stabilization once construction is completed for these type of assets?

It will be gradual over the next 12 months. Maybe shorter.

It will be gradually ramping up for these assets.

Okay. Thanks.

I will turn it back.

Thank you. Congratulations on the good results in the quarter.

And securing the opportunities to deploy the capital from the DCI JV. With the sort of slightly raised guidance for this year, Just wondering how that makes you think about the trends going into 2027, both on same property and FFO growth.

Thank you, Sam. I think the trajectory is intact.

We have not provided a formal outlook for 2027 yet. But the overall trajectory is consistent and the drivers are all intact and are compounding as hopefully, you can see from our results and the progress we are making.

But it is the same property NOI. Pace, whether it is additional revenue sources, are contributing and are in place cost of debt is getting closer and closer to our marginal cost of debt.

Therefore, the refinancing headwinds are going to be less pronounced into 2027 and into 2028. And so we are encouraged by that and encouraged by the overall trajectory of the earnings growth.

Thanks. And just I guess more specifically, would the slightly higher growth this year in any way sort of take away from the potential next year?

The Like, are you capturing growth earlier than expected or is it the absolute growth?

No. We are earlier than expected on same property side.

It is if anything, we are capturing the growth that we are delivering with kind of occupancy levels that are generally below the run rate. So there is more potential from occupancy going up.

And as Gordon suggested in his remarks, we are starting to see more evidence of rental growth, especially in Alberta. Starting to see net effective rents moving positively in markets like GTA.

We continue to see rental growth in certain pockets in Europe, so the rental growth should be an added driver. As that trend continues.

Great. And maybe on the intention to establish a property management platform, in The U.K.

Do you have a timeline on that as to when I guess, the expenses might ramp up and revenues start to be recognized.

Sam, I would not say that it is actually an intention; it is an opportunity. So we underwrote the Chancery Gate transaction primarily on the base of the assets that we are buying and the returns that we are buying, and then, obviously, that opens up the opportunity set for us to continue deploying in The U.K.

through an established operation. Both in development and standing assets.

When we looked at the existing ventures, the returns that we are getting there is compelling and attractive and so that is how we underwrote it. The opportunity to establish a property management platform.

Is going to be additive to that. And then we are putting emphasis on this new JV that is going to be ramping up in the markets where we are already present.

From property management capability standpoint. Okay.

And last question for me is on the property management margin. I think previously you communicated some sort of 5 year guidance on how that margin could grow.

And now with the Chancery Gate announcement made and the new JV being created, do you have a new kind of growth target for the property management fee margin?

We will provide that when we maybe communicate the guidance for 2027, but generally it is intact. So perhaps slightly better as we are seeing more scale to the to that business.

Okay, great. Thank you.

I will turn it back.

Thank you and good morning. So guidance was increased on same property NOI growth for this year.

Which region is driving that increase in expectations? And then on this Spain vacancy, do you see that being backfilled in your guidance?

Thank you Himanshu. On the Spain vacancy, it is not materially impacted our NOI outlook.

Rent in Spain is growing, but they are still relatively low. So while this is impacting the occupancy numbers, especially the occupancy numbers for Europe, optically it does not really change the NOI all that much given the rents are still relatively low.

We are in advanced negotiations there, as Gordon suggested, to potentially commence for the for the to commence this year, but it does not change our outlook dramatically. And regionally, as we communicated when we issued the same property NOI outlook earlier in the year, when we said that it would be stronger than 2025 despite a relatively strong first half of 2026 being expected.

We kind of baked in some reserves for timing of lease up. And now we are seeing the leases contracted leasing coming through.

Strong retention. So we are confident to increase that outlook in that across the board, really.

it is not driven by any particular region.

Okay. Fair enough.

Thank you. And then on the lease incentives, how do you see that evolving?

I know you made a comment in your prepared remarks on incentives. Just wondering what was the peak and where are we now specifically in the GTA?

Yep. Good question, Himanshu.

it is Gordon. We are seeing some net effective rent compression right across the portfolio.

it is most pronounced in Western Canada. But as the new supply starts to dry up, which it has been and gets absorbed in Toronto, we are starting to see reductions as well too in the GTA.

Where we are noticing the most of the reductions in Western Canada has predominantly been driven by direct deals of our leasing teams. So we are mitigating commission costs And then also, too, we have been mitigating some deal and allowance costs.

In the GTA, we are predominantly seeing less free rent in deals. And the other spot where we have been doing quite well as an operating team is on renewals.

We are having a number of tenants exercise their option to renew given the low supply And in many of those cases, costs associated are being reduced. So we are seeing that predominantly in Western Canada, The GTA and some marginal tightening as well too as the supply gets absorbed in the Greater Montreal area.

Got it. And sorry, in Montreal also you are seeing that trend coming through these incentives reduction?

No, not necessarily. These incentive reductions, but we are starting to see more absorption This was 1 quarter if you look at some of the national stats where Montreal has had some positive absorption.

So we are starting to see more bid flow. More good deal flow The small and mid-bay sector in the GMA has been quite good and quite resilient.

So we are seeing more competitive deals there. But traditionally, as we have advised over the last few quarters, Himanshu, the larger bay is still quite competitive and soft in the region.

Got it. Thank you.

Thank you, Gordon. And then just moving to capital deployment, bunch of these acquisitions announced So are the proceeds from CPP disposition, I mean, is that fully deployed now?

Like, once we include the post-quarter acquisition, Chancery Gate and the under due diligence acquisitions.

Thanks for that follow-up. We still have we are we are largely through the redeployment.

There still have some acquisition capacity to get to our target leverage on the debt to EBITDA basis. And well, to get back to the leverage that we were at prior to the transaction.

So we have a little bit more capacity to go.

Okay. Okay.

Fair enough. And then just looking at the acquisitions, I mean almost $200 million in Germany, I think post quarter.

You mentioned 20% below market, I mean, in place lines. What is the lease term for that particular acquisition doing in Germany?

it is relatively short lease term, you know, sort of 3 to 3 to 5 years to depending on the assets, but on average, I think, in the 3-and-change range. Good assets, know, mid box product in major markets, strong diverse occupier base, you know, there is some single assets there, but also some are a portfolio.

Was it 1 portfolio deal we just completed We are very much enthusiastic about the profile of this acquisition. Given the strong going in yield and the mark to market potential.

So we are looking at kind of on the German assets overall, we are looking at about 6.3 going in cap rate with mark to market cap rate taking us to kind of mid-7 range, which we think is a compelling profile.

Got it. Thank you.

And maybe just the last 1. I mean, does Germany compare to The UK?

Like, in terms of market and growth expectations? And I know you just entered The U.K.

with the Chancery you get. So just wondering, do you rank 1 over the other?

Look, we look at every opportunity and we will compare the total return underwriting between well, amongst all acquisitions that we pursue. And we also try to look at sort of the risk adjusted returns vis a vis the assumptions that we need to put into our model to get to that level of total return, and so the more assumptions that we need put in, the higher the risk of that underwriting.

So with what we like about Germany is that, you know, we can get to attractive total returns without necessarily putting in a lot of stress into the underwriting model. And from our existing portfolio, we have seen strong evidence of rental growth.

In the urban nodes, especially for these midsized footprints. And so we expect that, that will continue because we are not seeing a lot of supply of this kind of product.

And so we do not we are not really seeing how that pressure on the occupier markets is going to be is going to be changed. When we look at The U.

K, well, part of the reasons why it took us a while to enter the U.K. market is we were at opportunities that would provide a return premium relative to deploying in our existing markets that we know well already.

And so with Chancery Gate opportunity, we found that where we acquiring their high quality assets target 8% yield on costs. And that is untrended yield on cost.

So we think that is attractive. Also think that The UK opportunity offers differentiated growth profiles through the rent review mechanism that does not exist on the continent, does not exist in Canada.

So we expect that is going to be additive to our contractual rental growth opportunities. And rental growth wise, again, as it is everywhere, in our markets at least, there is no widespread rental growth.

There are pockets of rental growth. In Canada, we are seeing Calgary emerging as a market that is seeing the strongest rental growth, for example.

there is of course--suggests we are seeing pockets of that in GTA. And similar in Europe, we are seeing pockets of that in our current portfolio and in The UK.

Some markets are doing better than others, we think that the markets that we are getting exposed to are going to outperform just given lower starting point.

Great color. Thank you so much and I will turn it back.

Thanks. Good morning, everyone.

So it was interesting to see the REIT be much more active with on balance sheet acquisitions versus growth within the various JVs. So I am just curious, what is the driver of how that capital is being deployed?

Just trying to understand, I guess the strategic decision-making on how the capital is kind of invested across the various, buckets at this point?

Well, we are trying to do both, Kyle, and timing wise, it just so happened that we have been able to redeploy more capital on balance sheet, but there is a long and pretty active pipeline for our private ventures, which we are not in a position right now to announce any deals, but there is meaningful pipeline that we are pursuing. In Canada across our private ventures.

So we expect to do well for our own balance sheet program vis a vis hitting deployment targets, and we expect to do well for our partners as well.

Okay. No.

That makes sense. It was small, but within the DCI JV, there was the GTA West disposition and the pricing at roughly, you know, just over $500 a square foot.

I was just curious, what was the type of asset type of buyer, just thoughts on the value achieved? Just wondering, is that reflective of you know, a shift in kind of the private market value of assets in the GTA?

Just love your thoughts there.

Strong pricing. Thank you for picking that up.

We like that price. A good asset.

It has a fair bit of land. So older asset that sits just a larger plot and that the value there is reflective of that.

But you know, so it is sort of reflective of just strengths of the private market overall for these kinds of assets. Or for assets that we own, strengths of the user market, kind of, is very consistent with the theme that we have been communicating over the past few quarters now.

Okay. Fair enough.

And then just last 1 for me. You have given a lot of good color on the call so far, but how would you classify the kind of occupier or leasing environment today?

You know, are you seeing elevated RFP activity? How is that maybe changed or not changed year to date?

it is regionally specific, Kyle. it is, Gordon.

But still Western Canada is strong tour activity has been strong. GTA, we are seeing increased activity where we take solace in we have been quite optimistic on is our development opportunities.

We have been seeing really good activity, RFP activity, and we did a couple of big deals in Q2. So there is tours.

The type of users that we are seeing is of users that we are seeing touring around big box in the GTA. But we are seeing a lot of 3PLs out in the market.

We are seeing some people in the trucking industry. Government is still quite active.

And then subsidiaries of government use, you are seeing contracts being announced regularly. We are seeing a lot of those subsidiary users out in the market.

as well, too, in the GTA. So it is been quite good activity.

We have got a pretty robust pipeline, as I mentioned, as well. About 35 active deals for about 2.5 million square feet to close out the year.

Great. And just following up on that, that was the 35 active deals.

that is on the wholly owned portfolio, or is that everything again?

that is on everything in Canada right now. The wholly owned portfolio makes up about 65% of 65%.

Thank you very much. I will turn it back.

Thanks. Just hopefully a couple of quick ones for me.

But just it does not seem like it, but I am just curious if you could share any commentary on what impact any of these new tariffs or the ongoing tariff discussion or uncertainty there is having on any of the leasing velocity or time lines in Canada? And then as well, if you are seeing any changes in the behavior in Europe as this France conflict sort of continues to unfold?

Thanks, Pammi. We are not really seeing change in behavior from occupiers over the last couple of months.

Certainly, have not seen any material change throughout the year. What we have seen as Gordon suggested, is a meaningful pickup in activity in 2026 over 2025 so far.

And we see that in our portfolio, we see that in the market stats. That various brokerage houses put out.

So that is continuing. The industries that are most affected by existing tariffs, newly contemplated tariffs, are likely out of the market you know, generally from a new leasing standpoint.

We are seeing those kinds of industries tend to be renewing. As Gord said, we are seeing higher retentions.

We are seeing options getting exercised. So staying put is, in many cases, the decision that these businesses take.

But they are already, from a new leasing standpoint, not in the market. And so any resolution there, any clarity will likely be positive.

To having these occupiers have been back in the growth mode. But it is not affecting kind of the robust momentum that we are seeing already.

To date. As far as Europe goes, we have not seen sort of impact on leasing activity so far where we are starting to see movements in these construction So construction costs could be under pressure.

Upwards, and that likely means less supply. Or, you know, you need to achieve higher rent to justify supply.

So that is something that we are watching. You know, across our markets.

And we talked about inflation. Again, we do not we are not hoping for more inflation.

In Europe, but our portfolio has inflation protection built in. As you as you know.

Got it. Okay.

And then just in terms of as you look maybe through the balance of the year or maybe even more so into 2027, are there any large non renewals that you are anticipating from an occupancy standpoint?

Nothing large. There was going to be some non renewals, but nothing that is going to be material.

Okay.

And then just last lastly, the leasing spreads, I think, were tracking lower than where we were through Q1. Was that just a function of the mix of what was rolling?

And then how are you thinking about 2027 from a spread standpoint? On the renewals?

Look, really is a function of what is rolling. So we had relatively low rents rolling in the first quarter.

And so that impacted the higher spreads, especially in Ontario. And, you know, we do provide kind of an outlook of where our expiring rents are by market, our MD and A and we also disclose where we believe average rents are.

So on average, kind of you can model out kind of leasing spread. Again, it is primarily a function of expiring rents.

In any given quarter.

With regard to retention, just looking at Europe versus the Canadian portfolio, I mean, obviously, Spain had impact in your point, the rents were low, so it did not impact NOI as much. But it seems like you are just generally doing better on retention in the Canadian portfolio than Europe.

Is there anything structural there or is it the type of tenant per asset? And should we expect those 2 to be kind of similar from a retention standpoint going forward?

The European portfolio just has an average higher average tenant size than Canadian portfolio. So what that means is any given lease decision will be much more pronounced when you look statistics such as occupancy or retention ratio.

So we are not really drawing any conclusions there. Generally, we are seeing a healthy retention ratios over time.

Any given quarter, there is going to be there will be swings, but when we look at that portfolio's performance over the last 5 years, retention ratio was pretty consistent. Consistent in Europe to the Canadian portfolio.

In any given quarters, you will just see some more swings given average tenant size, average unit size is larger.

Okay. Makes sense.

Also Europe and again, this is kind of new news and the climate's changing quickly everywhere. But there was an article today talking about the Rhine River being at, like, all time lows and shipping is being in impacted in Germany.

Like is that something that you are seeing in terms of tenants or tenants of talked about? And I do not know if you can quantify your exposure or how you think about that.

But just interested if anything's happened on the tenant front with regards to that avenue for transportation.

Have not seen any impact so far. Matt or I think the we are watching Azure.

Watching with no m for me. Act on our so far.

And then, if we look at your market rent disclosure, you are at kind of 10 around $10 in Western Canada, 16 and on Quebec mid-$13s. Can you give us a sense if today you were to build in those markets, what kind of rents you would need to make construction work Just trying to get a sense once kind of existing supply has been soaked up where the natural gravitation would be.

In terms of where you can deliver rent into the market.

Well, it really is a function of products as well as it is a function of rent, So for larger bay product or kind of whether it is larger bay or the upper end of mid box, what we see is we need to kinda see high teens in the market like Toronto. To justify call it 18 plus depending obviously on your land basis, whether you are buying land today, whether you bought land a long time ago, you bought land kind of maybe in 21, 2022 kind of time frame.

But generally speaking, it is in that high teens range. In Western Canada, at the current rent levels, you can be solving to kind of low sixes in terms of development yield.

Which we think is on the lower end of what we would want to pursue. We would want push for close to 7% as possible in Canadian context.

So we think that there is there needs to be some rental growth to get there. And what we are seeing that rental coming through, we are sort of seeing early signs of it.

You know, the Calgary market is pretty diverse from a product standpoint, and you see pretty significant variability in rents from 1 asset to another. So when you are looking at headlines, the picture might be kind of misleading a little bit.

You really need to look at every asset and look at what is available and what the asking rents are for each asset. To then draw conclusions about rental growth.

Okay. Makes sense.

Maybe last 1 for me. Has been some splashy announcements in Western Canada around the data center front, but can you give us a sense as to where you guys stand on that initiative?

I know it is a bit of chicken and egg scenario, but any chickens or eggs up there?

Targeting both. As you know, our data center or our power land portfolio is focused on the GTA at the moment.

We have up opportunities in other markets, including Calgary, or Alberta broadly including Quebec, but for now, we are focusing on the on a relatively small but meaningful relatively small number of assets with meaningful power in the GTA with just kind of in the 250-megawatt range across 3 sites. As we commented in our remarks, we are seeing more engagement from occupiers.

We have responded to more RFPs in Q2 than we have throughout the entire 2025. So we are seeing more engagement.

And we are advancing the work with various utilities to make that powered opportunity contractual and we will we will keep the market updated as we make progress.

Okay. Fair.

Thanks, guys.

Hey, good morning. it is been a minute, obviously, since you raised the distribution last.

I am just wondering if you can talk a little about the deliberations on that front and what prompted the change and Lenis, based on your sort of commentary, it sounds like investors might be able to expect a more frequent cadence of increase going forward?

Sure. Thanks, Tal.

Mean, certainly, we have been building out all the various growth drivers in the business. Our FFO and comparative properties NOI growth has been very consistent And payout ratio has been reduced as well accordingly.

So we are now in the low 60s, sort of trending in that low 60s to mid-60 percent FFO payout ratio. So we have made a lot of progress in terms of the business itself.

And just sort of given the confidence that we have in the outlook and the progress on the growth drivers. We just felt it was it had been several years since the last increase, so we felt the was at a point in time where it was it was we were ready to do that.

And I think we also communicated in terms of how we think about going forward is that we want to continue growing the cash flow that is retained in the business in that way for reinvesting in the business and so we would look to any future increases to be at a rate that is inside of where we think that our FFO and free cash flow is growing.

Okay. But that is I would just say like just to be clear like you are not you are not committing to an annual cadence at this point, but it sounds like it is certainly possible.

Exactly. We are not we are not saying it is gonna be annual.

I think we have got we have laid the groundwork and the outlook that it is certainly in the realm of consideration, but we are not committing to that. We want to again, execute on the growth drivers and see that progress on the FFO and free cash flow growth.

And it is always under consideration as well. We will continue on executing and we will see 12 months from now.

Okay. And then just bigger picture, it is not really signaling any kind of change in investment like, investors should not be reading any of change to investment strategy as a result of this.

This is should be sort of more viewed as, like, a catch up after several years of not or sort of reorienting the business to its new model.

I would not call it a catch up, I think, you know Yep. it is an evolution of the total return model.

We think that growing dividend that is sustainable and allows us that allows us to increase the retained cash flow is an important element of our total return model. While we are not committing to the annual we have been laying the groundwork to be able to contemplate that as I suggested, and that is very much is being contemplated This is this increase is kind of a start of the a new total return model that DIR is gonna to look to deliver to unitholders.

Got it.

And then I cannot remember if was you or Gord, That made reference earlier to just some of the demand in Canada coming from the governments. Do you know, like, the exact use there?

I mean, I think the presumption is that, you know, with all the tick up in defense spending that would be prominent driver or the predominant driver. But maybe you can just offer a little bit more color on what they are looking for and why.

Yeah. Hey, Tal.

it is Gordon. there is there is kind of 3 buckets with the government.

On activity that we are seeing. So defense is definitely 1 of them.

They are looking for secure warehousing storage and some light manufacturing along major corridors. Across the Trans-Canada.

The other group that we are seeing is we are seeing requests for some climate controlled space with Health Canada I think, is out looking on different requirements. And then we get some inquiries from groups that work with the tech services group of the federal government.

I believe they are called Shared Services Canada. there is some requests and groups that are doing contracts with them.

Or around power procurement requests, getting a pulse what buildings have output for power. And just a lot of inbound calls, not necessarily translating to RFPs or anything, but we are getting calls and inquiries.

On a variety of different uses. We are seeing some activity from the government.

And it is not just the federal government. The provincial government has also been relatively active in the GTA.

Got it. that is very helpful.

And just lastly, Lenis, yields have been bouncing around all over the place, but can you just talk a little bit about estimated borrowing costs right now in Canadian dollars and in the euro?

Sure. Yeah.

The I think if we are looking at the 5 year part of the curve, we are we are seeing euro equivalent debt in and around 4% right now and Canadian equivalent probably in around 4.15-ish, 4.20 ish range. And yes, they have been bouncing around.

So we always try to be opportunistic when we can as well.

And at the margin, you are still preferring to swap to euros? At this point in time?

Yeah, yeah, yeah, we do. I think we our euro debt ratio is sort of in that low to mid-80 percent range.

So we definitely have euro debt capacity. And it is still and all in rates are still lower than Canadian, and I will just as you know, we hedge some of the currency exposure.

Got it. Okay.

that is great. Thanks, everybody.

Indeed it is. Apologies.

Thank you for taking this last question. I just wanted to clarify from, I guess, the question from 5 minutes ago or so.

There was talk about the distribution. This is the first 1 in 13 years, but it almost sounded like it was not necessarily gonna be a recurring 1.

I know you cannot commit, but like, if FFO growth is, mid- to upper single digits, there anything preventing the REIT from raising the distribution by some portion of that growth.

Yeah. Thanks for the follow-up, Sam.

I just want to be clear. Short answer is no, nothing prevents us.

And we have been building out the balance sheet of DIR over the last 5 years to have low leverage, have low payout ratio, FFO. So that we could then get to a total return model that includes recurring distribution growth.

it is very much what we are looking to do. it is not something that we are committing to do annually.

But this is very much what we are looking to do. And the governor for that will be growth in our free cash flow so that there is the growth that we are passing on to our unit holders is sustainable and but the business continues to retain cash.

That we can reinvest and compound. So I just want to be very clear on that.

Thank you for the follow-up.

I appreciate the clarification. Yes, it does.

Thank you very much for the clarification. I will turn it back.

Thank you. Thank you, everyone, for your interest and support of Dream Industrial REIT.

We look forward to reporting on our progress next quarter. Goodbye.