Good morning, everyone. Thank you for joining us today for Dream Industrial REIT 2021, fourth quarter end year-end conference call.

Speaking with me today is Lenis Quan, our Chief Financial Officer, and Alex Sannikov, our Chief Operating Officer. The DIR team continues to successfully execute on his long-term strategy.

And our operating results for the fourth quarter in the year were strong and ahead of our guidance. We reported a 13% increase in FFO per unit for the quarter led by strong CP NOI growth, lower cost of debt, and a robust pace of capital deployment.

For the full year, we reported over 15% FFO per unit growth. Our pace of CP NOI growth rose to a new record high of 7.6% in Q4, with Ontario leading the year-over-year growth at 17%.

For the full year, we reported CP NOI growth of 5.4% driven by solid rental rate and occupancy growth. This was at the upper end of our guidance issued at the beginning of the year.

We expect the pace of CP NOI growth to accelerate further in 2022. Our pace of capital deployment remained robust with $499 million of acquisitions closed during the quarter and over $2.4 billion of acquisitions closed during the year.

In addition, we are under contract or in advanced negotiations on approximately $400 million of additional acquisitions located in Canada and Europe. We have advanced our development pipeline with approximately 850,000 square feet of projects currently underway with an additional 1.6 million square feet of projects that are in advanced planning stages.

Looking forward to 2022, we are well-positioned to continue to execute on our strategic pillars, which are continued organic growth, expanding our development program, focused capital deployment, optimizing our cost of capital, and executing our ESG strategy. We have made significant progress on each of these pillars and our business is firing on all cylinders with a long runway for growth ahead.

Our acquisition pipeline has been an important driver for us to add high-quality assets to our core markets in North America and Europe. Our local on-the-ground teams have been very successful in sourcing industrial assets that are above the average quality of our portfolio and have an attractive return profile.

2021 was a milestone year for the REIT with over $2.4 billion of acquisitions completed during the year at an average cap rate of 4.2%, which added 15 million square feet of GLA across our operating markets. In Europe alone, we added over $1.7 billion of assets during the year.

We expect the yields on these acquisitions to continue to grow, as nearly all the current leases are indexed to CPI, which is accelerating. For example, in the Netherlands, the CPI increased 5.7% year-over-year in December 2021 and 6.4% in January 2022.

In addition, the market rent for our European portfolio was 7% higher than in-place rents at year-end 2021 and we expect market rents to continue to grow in Europe. Since Q3, 2021, we have renewed over $1.3 million square feet of leases in Europe at a 12% spread over expiring rents.

In addition, the new leases are indexed to CPI. Our European portfolio now totals over $2 billion and we have achieved significant scale in the region to execute on development and asset management strategies, which will provide a strong platform for us to continue to build long-term value.

We added over 1.3 million square feet of development potential through our acquisitions in Europe in 2021, which we intend to access over time. In Canada, we continue to build on our attractive market positioning in our core markets of the Greater Toronto Area and Greater Montreal area through high-quality acquisitions, as well as executing on our development and intensification pipeline.

Our acquisition criteria focuses on acquiring assets with the potential to generate strong total returns over time. We acquired over $650 million or $560 million of income producing assets in these two markets during the year at an average cap rate of 4.4%.

Current market rents on these assets exceed in-place rents by over 15%, which should support robust rental rate growth as leases roll and market rents continue to trend higher. In addition, we acquired over a 175,000 square feet of vacancy, which has already been leased at rental rates significantly higher than underwriting.

More over these assets offer the potential to develop over 570,000 square feet of access density over time, and we are already underway on some of these projects. In addition to income producing assets, we also expanded our Greenfield development program with the acquisition of over 65 acres of land in the GTA in Cambridge, which should add over 1 million square feet in the next 24 to 36 months.

Our investment pipeline continues to be strong across all our operating regions and we have approximately $400 million in acquisitions that are under-contract or in varying stages of due diligence. We believe that our development program is a key driver for DIR's next chapter of growth.

Over the course of the next -- sorry, over the course of the past 12 months, we have acquired or under contract on nearly a 150 acres of land in our Greenfield development segment that would yield over 2.2 million square feet of modern logistics product. These sites are located in the GTA, Cambridge and Calgary.

In the GTA, with high-quality assets trading at record high valuations and often above replacement cost, we believe that building is an important driver of generating enhanced returns, while adding scale and high-quality space, in one of the most attractive industrial markets globally. The Kitchener-Waterloo-Cambridge sub-market is becoming an increasingly attractive location for logistics companies, especially in locations that are close proximity to Highway 401.

Attractively located between the manufacturing hubs in Southwestern Ontario in the GTA, with easy access to labor, this region is poised for significant rental rate growth in the near to medium-term. In 2021, we have already seen market rent growth of over 20% in this region.

The site totals 28 acres and should support a 420,000 square foot building. With a total cost base in the low 200s per square foot, we are forecasting an unlevered yield on cost in the mid-5% range.

With respect to Calgary, we've been long-term investors in the market. We believe the region has become a key distribution hub in Western Canada, given us attractive location close to a large population base.

And the outlook for industrial fundamentals is attractive. Market availability has declined by over 350 basis points in 2021 with rental rates increasing throughout the year.

There's limited new supply with nearly 70% of new projects under construction already pre-leased. We recently acquired a 50-acre site in the Balzac sub-market for $14 million and are under contract on a 20-acre site in close proximity to the first site for $12 million.

Balzac is one of the most sought after sub-markets in the region, with new development from Amazon, Walmart, and several other high-quality occupiers. The sites are well-located with excellent connectivity to the airport as well as downtown Calgary.

They should support the development of nearly 800,000 square feet of modern logistics space. With a cost basis in the high 100s per square foot, we expect an approximately 6% unlevered yield on cost.

We're underwriting high single-digit rents, which we believe provides for further upside in yields. Overall, we see significant long-term value in acquiring land, that we can entitle and build on in the future.

In addition to our greenfield development program, we have made considerable progress on our redevelopment and intensification pipeline. Our predominantly urban portfolio with significant access -- excess density provides us a unique opportunity to add GLA or redeveloped certain buildings to accommodate more modern distribution uses.

These sites are mostly located in the GTA, GMA and strong urban markets in Germany, France, and the Netherlands. Including our greenfield program, our immediate development pipeline will allow us to add approximately 2.4 million square feet of incremental GLA in the next 24 to 36 months.

With an overall development costs, including land of approximately $500 million, we are currently forecasting an unlevered yield on cost of approximately 6%, which is significantly higher compared to cap rates on comparable quality stabilized properties. These projects are poised to significantly improved the overall quality of our portfolio and provide an attractive source of cash flow and NAV growth over the long-term.

Overall, our capital allocation strategy has enabled us to amass a high-quality portfolio with significant embedded growth opportunities for the long-term. I will turn it over to Alex to talk about our organic growth outlook and operations.

Thank you, Brian and good morning, everyone. As Brian mentioned, our global predominantly urban portfolio continues to be attractive to logistics occupiers and private market investors.

During the quarter, the value of our assets increased by $167 million, reflecting lower capitalization rates, as well as higher market rents in Ontario and Quebec. Largely driven by the increase in asset values, DIR's NAV per unit increased to $15.13 or a 21% increase year-over-year and a 5% increase compared to Q3 2021.

Leasing momentum on our portfolio accelerated during Q4 and we reported 7.6% year-over-year same property NOI growth this quarter, driven by a 4.8% increase in in-place rents from strong rental uplift, as well as contractual rent growth. And 190 basis points increase in average occupancy.

For the full year, we reported 5.4% CP NOI growth, a record pace of growth for DIR, and at the upper end of our guidance. Looking ahead, the industrial markets across our operating regions continues to strengthen and our asset management strategies have enhanced the loan from organic growth outlook for DIR.

Occupancy across our portfolio remains strong at over 98%, nearly 300 basis points higher than the prior year. And our leasing momentum has accelerated over the past quarter, especially in Europe.

Since the end of Q3 2021, we have already addressed approximately 1.9 million square feet of 2022 expiries across two markets. In Europe, we signed 1.3 million square feet of leases expected to commence in 2022 at an average spread of 12%.

In Canada, the Trust signed approximately 600,000 square feet of leases, expected to commence in 2022 at an average price of 30%. In addition, we leased nearly a 150,000 square feet of vacancies with the leases commencing in Q4 2021 and 2022.

For the full year 2021, we have signed 3.6 million square feet of leases across our Canadian portfolio at an average spread of 21% and 1.2 million square feet in Europe at an average spread of 10.5%. In addition to the strong rental uplift, contractual rent steps as well is an important driver of steady CP NOI growth.

Currently embedded rent steps equated 2.4% annual contractual rent growth in our Canada leases and in our recent leases, we have been able to negotiate significantly higher growth; 4% in the GTA and approximately 3% in the GMA. In Europe, 90% of our leases are indexed to CPI and recent CPI numbers suggest a strong increase in our rents on our European leases in 2022.

In addition, 8% of the leases in Europe have fixed rental rate escalators of 2%. Furthermore, the market rents for our properties have risen significantly and are -- we are well-positioned to achieve and even out performed market rents as leases roll.

Currently, the spread between in-place and estimated market rents equates to 19% considerably higher than 9% a year ago. As a result, the outlook for CP NOI growth remain strong in 2022 and beyond.

Our comparative properties portfolio for the full year 2022, will include all acquisitions completed prior to 2021, and we expect that the pace of same-property NOI growth will accelerate. For the full year 2022, we are currently expecting the pace of gross to be over 7%.

In addition to CP NOI growth, we continue to see several drivers of NOI growth across our portfolio. We have made significant progress in our development pipeline and are already seeing strong results from our initial slate of projects.

At our 401 Marie-Curie property in Montreal, we have substantially completed their 130,000 square foot Phase 1 expansion. We have already leased the entire space with starting rents in the low double-digit range at record.

A record for the sub-market, resulting in an un -levered yield on cost of approximately 9%, the lease commences in April 2022. During 2022, we will commence construction on over 1 million square feet of projects, primarily in the GTA and GMA, and on these projects, we expect to achieve an un -levered yield on cost of over 6%.

With most project expected to reach stabilization in the next 24 months. In addition to our development pipeline, we are also advancing value-add refurbishments in the existing properties where we can generate strong yields.

In Kitchener, we acquired a 100,000 square foot property in Q2 2021, at a total purchase price of $12 million. The property was vacant at the time of acquisitions.

During the underwriting, we saw the opportunity to invest capital in the building to adapt it to more modern logistics uses. We are forecasting in total spend of approximately $2 million this month, we signed a lease for 100% of the building at a starting rent of $10.75.

The lease up will result in an expected un -levered yield loan cost of approximately 7.5% on the overall investment of $14 million. We're also actively looking to add solar panels on existing properties across Canada and Europe, which should add significant long-term revenue over time.

We're currently in advance stages of finalizing 10 projects that will add 16,000 solar panels. We have an additional 14,000 solar panels that are in planning stages.

We expect overall capital outlay to be approximately $15 million with un -levered yield on cost above 8%. We expect this income to come online in phases starting in the second half of 2022.

Finally, our U.S. property management and leasing platform is expected to be a more meaningful driver of our operating results.

We expect more substantial contribution to income during the quarters when significant leasing is completed, and as a result, the income is expected to be lumpy. Overall, we expect an operating profit of approximately $1.5 million in 2022.

Overall, we believe that DIR has significant opportunities to drive CP NOI and NAP growth this year, both of which should further enhance the quality of our business. I will now turn it over to Lenis, who will provide our financial update.

Thank you, Alex. Our financial results for the fourth quarter was strong.

Diluted funds from operations was $0.21 per unit for the quarter, 13% higher than the prior year comparative quarter due to higher NOI from our comparative properties. Successful deployment of our balance sheet capacity was over $2.4 billion of acquisitions over the past 12 months and lower boring costs as we executed on our European debt strategy.

For the full year, we reported $0.81 in FFO per unit of over 15% year-over-year and ahead of our initial expect -- initial guidance at the beginning of the year. 2021, was a significant year for advancing our capital strategy, we were able to issue a total of $1.1 billion of unsecured debt at an average rate of 40 basis points, after swapping to euros.

To partially fund our $2.4 billion of acquisitions, while keeping leverage within our targeted levels. The REIT operates primarily within unsecured financing model, and this has significantly improved the overall financial flexibility of DIR's balance sheet and allowed us to significantly reduce our average cost of debt.

In 2021, we repaid approximately $434 million of secured mortgages at an average interest rate of 3.6%. This has lowered the proportion of secured debt to less than 3% of total debt from 100% 18 months ago.

Our unencumbered asset pool has increased by over $2.7 billion year-over-year, and was approximately $4.2 billion as of December 31st, 2021, representing approximately 73% of total investment properties value. We continue to allocate substantial capital towards sustainable initiatives across our existing portfolio and towards acquisitions of green buildings.

During the year, we issued $650 million of green bonds, including the $250 million Series D unsecured debentures issued during the fourth quarter at an average interest rate of 54 basis points after swapping to euros. We have already deployed or committed approximately $500 million of green bond proceeds towards eligible green projects.

We also established an aftermarket equity program in 2021 as an additional tool and cost-effective source of equity capital to fund individual acquisitions, developments, and other value-add initiatives. In Q4 2021, we utilized the ATM program to raise approximately $56 million at an average unit price of $16.64.

Subsequent to the quarter-end, we have raised a further $43 million through the ATM program at an average unit price of $16.27. During the fourth quarter, we also completed a $288 million equity offering and an issue price of $16.50.

The net proceeds from the offering were utilized to fund our acquisition pipeline as well as development costs. We ended the year with leverage at 31% and approximately $511 million of liquidity.

Our pipeline of opportunities is strong and we are under contract on various stages of due diligence on approximately $400 million of assets in Canada and Europe. We currently have acquisition capacity of approximately $500 million before we reach our target leverage.

We have sufficient capacity to execute on our acquisitions and development program, while maintaining a healthy and flexible balance sheet. As we deploy our balance sheet, we expect our leverage to go up to the mid to high 30% range, as we closed on our acquisitions in our pipeline and fund our development projects.

We currently have approximately C$300 million of Euro debt capacity, and we expect it to grow -- it to grow as we complete more acquisitions in Europe. While interest rates have increased since the beginning of the year, we have only $33 million of debt maturing this year.

And we continue to see interest rates on Europe equivalent debt about 160 to 180 basis points cheaper than North American debt. We are currently seeing five-year euro equivalent debt in the mid 1% range, which along with our leverage -- with leverage below our targeted levels should continue to support our capital deployment strategy.

For 2022, our FFO per unit growth will be primarily driven by strong comparative properties NOI growth, which is expected to be over 7%. Interest expense savings from our European debt strategy completed acquisitions and the timing of getting our balance sheet to the target leverage range.

We are currently expecting FFO per unit to be in the high $0.80 to $0.90 range, depending on average leverage for the year. Over the past several years, we have transformed DIR into a high-quality business that can produce strong FFO and NAV growth over the long term.

And we believe that our trajectory of growing and improving portfolio quality remains strong. I will turn it back to Brian to wrap up.

Thank you, Lenis. 2021 has been an incredibly exciting time for DIR, and we've taken significant steps to position DIR as the premier industrial REIT in each of our operating markets.

We will now open it up for questions. Thank you.

Thanks and good morning, everyone. Just wanted to start off on IFRS fair values, and maybe we'll look at on Ontario just to start.

I saw the low end of the cap rate range is -- was down 25 basis points on the quarter to 4% even. Just wondering if there is a reason you're not going lower given the recent transactions that we've seen in the marketplace?

Hi, Sam -- Alex, thanks for your question. What we see with IFRS values is they largely needs to be supported by external appraisals and valuation metrics provided by external appraisers.

And sometimes it takes our external appraisers time to reflect that market comparables in their suggested ranges. So that's the primary factor for the metrics that you are observing.

What we're trying to do with our disclosure for the GTA and other regions is to provide certain metrics, such as prices per square foot or implied values per square foot, implied cap rate for the current quarter, so that you can then compare that with more live transactional evidence you see in the market.

Okay. And I guess a similar thing over in Europe where there's been some large portfolio M&A of late.

Just wondering what your thoughts were on those assets. Certainly being priced on a per square meter basis well above where DIR's caring European portfolio.

If you see those portfolios as being comparable overall, or how you view marketplace of the trend in investment activity in Europe these days.

It is hard to compare these large portfolios in terms of the assets. That said, what is -- what we implied from the recent activity in Europe is that there is significant investor confidence in the region vis a vis rental growth potential, capital value growth potential, and the general outlook for European logistics, whether it's last mile logistics or general logistics for the region.

Okay, last question for me is on -- would be on the same property. I guess, the guidance for 7% plus is a nice pick up from 2021.

How much of that is coming from the acquisitions that were completed in 2020? They will be rolled into the same property pool.

And I'm also curious how Europe is going to play into that, just given the accelerating same property NOI growth that your portfolio seen over the last few quarters?

So we expect that the acquisitions completed in 2020 will be on average in line with the rest of the portfolio. There will be some assets that will be contributing more than others.

For example, we bought, if you recall, one assets largely vacant in Mississauga. That will be contributing a little bit more than average for Ontario, but overall, we expect it to be in line.

Our Kitchener portfolio is going to be part of our same-property pool for 2021, 2022. Brian mentioned that that region is seeing considerable strength and that we've seen that in our operating results and we just announced the value-add project completion in Kitchener as well with rents that are -- exceeded our underwriting and resulted in very strong un -levered yields.

In terms of Europe, we expect Europe to be in the mid-single-digit range. And that inflation -- increased inflation outlook is not fully factored in.

Now, the European portfolio that is included in the same property pool is the 2020 acquisitions that -- all the 2021 acquisitions, which is the majority of our European holdings today is not part of our same-property pool.

Okay. Thank you.

That's helpful. I'll turn it back.

Thanks, thanks. Good morning.

Brian, you spoke about acquisitions and in markets are properties that are above average quality for the portfolio, can you give some more information and your thoughts on where cap rates are for those types of properties in the accretion, you would need to justify those acquisitions versus the strong growth in the current portfolio? Is it accretion based off of now, where you think you can get to -- over the next year or two to same property growth?

Or is it just the benefit of being bigger and having higher-quality properties?

Hi Mark, so we judge quality a lot of ways; location, functionality, rent growth. We're looking at total returns when we talk about the financial outlook.

So some of the acquisitions have opportunities to add density, as I mentioned in the opening remarks, some of them have value-add just by rolling to market leases that are in place. We're seeing a lot of opportunities in Canada, for example, to buy at cap rates that are low.

So you asked about cap rates, but cap rates are kind of one leg of a three-legged stool. We look at cap rates, we look at placement cost and we look at in-place rents.

So for example, a property in the GTA, for example, that's at a low cap rate, but has a significant mark-to-market and a short walt would be a great opportunity for us, because the going in cap rate is not really representative of our total return. Same thing if we can add density to that.

What we're seeing is, we're continuing to invest in markets where we see a runway of growth. We talked earlier in the Q&A about IFRS versus currently what's in the market.

All of that IFRS is backwards looking, in the current market activity it's pointing to significantly a high rent growth and value growth going forward. And that's evidenced through the private market transactions that are happening.

So we're seeing that, we are looking to capitalize on that, Mark, and participate in a particularly, in our target markets in Europe, GTA, Montreal. We think the development pipeline we have will allow us to participate in that.

So it is some immediate accretion on the acquisitions that we do, but we're very focused on really the long-term value and long-term quality of our portfolio.

Okay. Great.

That's helpful. Thanks so much.

Hi there. I wonder if you could provide a little bit more context on the amendments to the external management agreement, what the rationale would have been or what prompted the review and the, I guess, the evaluation to the amendment and whether or not that would've included a review on potential internalization.

Hi, Brad. Let me just -- the asset management amendments are pretty innocuous.

Let me just run through them. They're switching from a fiscal year to a calendar year, they are switching from AFFO, which we don't report anymore to FFO, so that's a much more transparent metric, and thirdly, it's breaking out our regions.

So Canada and Europe will have a separate agreements and same economics, but there's nothing anticipated, but allows for flexibility in the future should we need it. And then more importantly, the fourth comment is to add -- clearly add construction costs to our historic costs when looking at the incentive fee.

So that was less than totally clear. And as we focus on developments going forward, I mentioned the -- a tremendous part of our growth and a big part of our focus is development.

We're out of scale now where we're doing development in all of our regions, we're looking to do more development and complement our portfolio. The amendment now clearly states, which is beneficial certainly for holders, that the historic costs will include the construction costs of development, not just the land.

So it was meant to clear that up and so it's a little bit of -- while we're at it, I want just to clear all these things up, like the calendar year and those kinds of things. So does that answer your question, Brad?

And sorry, maybe I missed it, but in terms of -- okay, you cleared up the -- cleaned up some of the metrics in the contract, but would have internalization has been part of that review process as well, or how should we think about that?

The board has discussed it over the years. Certainly, it's -- would be up to them, but it was not part of this amendment discussion.

And just to clarify the transition from AFFO to FFO is neutral. It's just using a different metric, but having the same economics.

Yep. Thanks.

In terms of the near-term acquisition pipeline, I think you talked about $400 million under review and capacity for $500 million. How should we think about that pipeline right now, in sort of timing?

And then, maybe break it down a little bit more by geography or I guess, stabilized versus development opportunities?

Sure. Unless you want to talk a little bit about when we haven't contract in timing?

Sure. Yeah.

So at the end of the year, we had just over $510 million of liquidity. I'd mentioned we had issued about $43 million on the ATM since the beginning of the year.

We are currently working on about $400 million of acquisitions within them -- in various stages within the pipeline. So I think we've got sufficient capacity to close on those acquisitions, as well as funding our development costs as well.

The timing of those acquisitions were hard to pin down. I think it's going to be weighted a little bit towards end of Q1, a bit more of a shank into Q2.

There isn't a significant portion of those acquisitions that are in Europe. So our Germany acquisitions particularly take a little bit longer to close, just given the process over in Germany.

Was that -- I wasn't sure if I answered all your questions, Brad?

That pipeline would be stabilized opportunities or how do you think about adding more to the development pipeline? And then how much activity you had in terms of -- on the acquisition from that perspective.

So in terms of land, Q - Brad Sturges, we sort to one site that we talked about that isn't closed is part of that pipeline. And in addition to that, we are looking at adding a site right next to another site that we own, immediately adjacent to that.

So that's part of that another very large acquisition, but there's these two parcels in the pipeline.

Okay. Great.

Thanks. I'll turn it back.

Thank you and good morning. So just wondered, 2022 lease expiries, I think, around 1.5 million square feet is coming due in Europe this year.

So what are your thoughts have done and do you expect any space coming back?

Hi, Himanshu. So as you've seen, we've addressed a significant amount of leases expiring in 2022, since we spoke last time.

There's still a couple of leases that is still expiring. We expected the vast majority of them will be renewals.

There will be one or two spaces coming back to us, which is normal course of business and we have strong prospects and good pipeline to replace those tenants.

Got it. And then, in terms of the activities done during the year like, average that can spend up almost 12% in Europe, was it more skill driven by new leases, or you're getting uptick on renewals as well?

I think your question was in terms of the spreads in Europe. Was it new leases or renewals?

The line was breaking up a bit.

That's right. Yeah.

Between new leases and renewals, how is the spend looking like? I think you've given a full number of 12% for $1.3 million leverage, so just wondering, is there a big gap between new leases and renewals state.

The vast majority here were renewals. So we're not seeing a huge gap on those negotiated renewals.

So we're -- it's pretty consistent. In some cases, we were working on opportunities.

For example, we have one lease in Europe for about 200,000 square feet, where we have an opportunity to work with the existing tenants to get the space back earlier. We have another tenant who is interested in that space and they are willing to pay rents close to double of what the existing tenant is paying.

So it's not part of our 2022 expiries this is going to be an additional opportunity. So there are some opportunities like that that we're working on.

Got it. And maybe just to clarify in your European leases, does the tenant have the option to renew a fixed price?

Are there a lot of those leases or it comes to market at the time of renewals?

The vast majority of what we have left will be market discussions.

Okay. So that's fantastic.

And then if I look at the in-place rents per square footage in European portfolio again, it's less than €5 or college is CA$7 per foot. Is there a reason why European rents can't go to $9, $10 range or closer to what North American level scale?

Well, we believe that there's strong upside in European rents over time. And we are starting to see pockets of rental growth emerge in Europe, specifically southern Germany.

We are seeing certain markets grow at mid to high double-digit pace, over the course of 2021. We are seeing that in our own leases, we were seeing that in many pockets across Europe, Spain, pockets in the Netherlands.

So we think that it's a great advantage to have low starting rents and because there's much more upside and downside over time.

And then utilized to CPI rising in Netherlands and Germany, I mean, how has that impacted the cost per barrel in Europe? I think we have done you majority(ph) denominator swaps were like having pricing hospice engage last year.

Where are the leads now? Although the cost of borrowing in Europe,

OK. I mentioned it was a little hard to hear you, but I think you were asking about our cost of debt, is that right?

That is correct. Yeah, exactly, I mean the incision picking up and CPI goes up, any back there.

Sure. I mean, we're continuing to see the cost of European debt being significantly lower than North America debt.

And for five-year equivalent, we're seeing in both mid 1%.

Okay. Thank you.

And with the last question is on the land development. You have now land in Europe, Cambridge, Caledon, Calgary as well now.

Will all these be built on speculative basis?

Primarily, it will be on speculator basis. We might find tenants who are interested in taking space early, but it's primarily going to be on speculator basis.

But what we seeing is, that as we break ground, we start negotiating leases with tenants. So for example, with Mariah Carey, we signed the lease there, well advanced over the completion on another expansion in the GTA.

We already are talking to a prospect tenant for a completion in September, October on another Greenfield project in the GTA. We already started talking to tenants with delivery expected end of 2022 or early 2023.

Same in Germany, where we are building a freestanding expansion. So we are seeing that we're -- that we will be entering into leasing discussions with tenants before completion.

So it's highly likely that many of our projects will be leased leading to completion. And the reason we like that strategy is we're generally seeing much higher rents as a result compared to pre -leasing that.

Got it. And then you in terms of getting development or mode's or getting it done, is it any different between GTA and Calgary?

Is the pace of construction of that increased on any different from say GTA and Calgary? Much you did already done in Calgary, like you compare to Samsung for example?

It's very site-specific, depends on whether you need to go through the resilience process or not. Whether your site is -- has the zoning in place, as far as site approval process.

It's a bit shorter in Calgary than it is in the GTA. Rezoning might move -- might be different for different -- different properties.

Fair enough. And my last question is, Europe exposure is almost 40% of portfolio, based on G&A.

And then upper ceiling you want your -- to have exposure to be?

While -- sorry, European exposure isn't in that 40% range, we expect it's going to be in that range with Canada being targeted as majority of our company. But it will move around over time.

As we say often, opportunities don't always come in perfect time and perfect sizes. So it will move around, but generally, the long-term target is that Canada and GTA, GMA primarily are the majority of the portfolio.

Got it. Fair enough.

Thank you, guys, and I'll turn it back.

Thanks. Good morning.

Just firstly a question on renewal of the diamond in Western Canada in the quarter. They were coming in on a flat basis, which is, I guess, an improvement over the prior quarters.

Just wondering if that was specific to the leases that rolled. Are you seeing more of a broader improvement in that market?

Thanks Maya. This is the spread in the quarter were primarily relating to specifics of the leases.

What we're generally seeing is that, there is improvement in the market. The rents are starting to trend upwards.

We're starting to put higher rent escalators in our leases. As we do renewals and new leases, we're seeing strong leasing momentum in the region, in terms of absorption and vacancy.

So we're very encouraged by the fundamentals overall.

Okay. And then just more broadly in terms of market presence and mix, are you happy with your current European footprint?

Or could you see potentially exiting some of the markets where you don't necessarily have scale there?

Yes , we're very happy with the markets that we're in. Many of the markets that we'd like to add scale.

We do look at all of our assets regularly. So every quarter we go through asset plans and look at recycling assets that we think have lower growth profile, our growth outlook then other opportunities.

So I would say it's a constant work in progress where we're looking to recycle small portions of the portfolio within all of the regions and add more in areas where we see more growth. For example, we're doing certainly more development in the markets that I mentioned earlier.

And we are continuing to look at recycling some assets that have a lower growth profile or maybe where we've created all the value that we plan to, we will recycle out of some of those and invest more in the more opportunistic areas. So we're happy with the allocation we have right now, but we'll continue to look to reinvest and grow in our target markets.

Alright, makes sense. And then just last question from me is just on the NOI margins, which have come up quite a bit, probably helped by occupancy.

But just wondering if the full-year level in the mid-seventies is a good run rate to go with?

Hi, . Yeah, I think that's definitely a good run rate to continue using.

I mean, obviously as we increase the scale of our portfolios, as well as up the quality in the portfolio, it's definitely showing through in our margins and obviously our European portfolio have slightly higher margin than in North America, just with the cost base structure. The operating cost structure in Europe is a little bit lower than what it is in North America.

Right. Okay.

Thank you. I'll turn it back.

Hi, guys. I just wanted to quickly ask a few questions on the guidance.

Is the occupancy level assumed, I guess, on an average basis consistent with where it was at 98% in Q4? And then how should we think of the CPI that you have forecasted in this guidance?

Does it blend to about 3% in terms of rent escalators annually when you take into account both the Canadian and the European portfolio?

So as far as occupancy, Matt, we expect that occupancy is going -- for the comparative portfolio will widen largely constant. There's going to be some movements, but nothing significant.

Just part of normal course of lease rollover, transitory vacancies, new lease is taking effect, etc. but largely stable overall.

When it comes to contractual growth outlooks for Canada, we've quantified that as we said about 8% of leases in Europe have contractual steps. When it comes to the CPI index leases.

Majority of leases in Netherlands have an annual indexation. So at IDN versus the lease, the rent gets adjusted, there are leases in some other markets such as Germany that have threshold, so the index needs to reach a certain level before the rent gets adjusted.

So to say this threshold can be set at 5% to 10%. And as soon as the cumulative index reaches that level then the entire 5% or 10% or 80% or 90% of that, depending on the lease, gets reflected in the rent escalator.

So that might -- that would be a bit lumpy as a result of the structure, which is similar to, for example, when -- what Global had with the lease.

Fair enough. Remember those days.

Okay, so some lumpiness there. On the development side, just wanted to thank you guys for the incremental disclosure, it's very helpful.

But also in terms of the CapEx, it looks like most of this CapEx is still taking place in the IPP portfolio because it's expansions versus Greenfield development. Is any of that CapEx related to other expansionary, but maybe not adding GLA type investments in the portfolio or is the bulk of it development at this point?

A significant component that is development is sort of being expansions. There is some CapEx relating to refurbishments.

So, for example, that Kitchener assets we've talked about, we did not add GLA, but rather we took a building that was not really ready to be occupied by modern logistics tenants and refurbished the interior, did some exterior work, and signed the lease. So it was more of a value at refurbishment.

So things like that would be part of that number as well.

Okay. But if I'm looking at ongoing portfolio CapEx, I should be excluding the $30 million that you've spent in the last two quarters because it seems like it's one-time in nature or related to that development.

Yes, that's correct, Matt.

Okay. Perfect.

Thank you and congrats on a good quarter in a very solid outlook.

Thank you Matt.

Thank you.

Thank you. Just a quick confirmation, I think the answer doesn't but the $400 million of product that you have in the pipeline, does that contemplate any additional investment through the U.S.

fund, would be put one? Second question is, when you're thinking about the U.S.

fund, maybe to the best of your ability is just give us an update in terms of what the growth outlook is there and what the opportunity for additional investments would be in the next 12 months? Done, so, thank you.

So , the $400 million does not include the U.S. fund contributions.

We do have some capital that is committed to the vehicle, hasn't been called, but the $400 million doesn't included that.

Yeah. And then ongoing, , it's Brian here.

You we're waiting to see the funds’ performance for Q4. We're expecting them to do well as logistics is doing well everywhere, and we anticipate the fund to do quite a lot of development.

And in value-add in some new liquid markets. And we'll look to participate in that, as we see the results and as we see fit.

We think it'll be a good compliment to everything we're doing. Certainly, as we enhance our yields through property management and leasing, that helps us quite a lot.

So we anticipate growing with the fund to roughly the 25% level as they continue to expand.

And --

I am just to follow-up on -- sorry.

Okay. , I just want to also clarify that we do have sufficient debt and balance sheet capacity for the $400 million of acquisitions, the development spending that we're planning for the year, as well as the commitment for the U.S.

fund.

Okay. Thank you.

And then Alex --

And Michael, I was going to add that to reiterate, the property management and leasing platform operating profit that is rising and will be more meaningful as the fund scales up, and we're already seeing that and we guided roughly about $1.5 billion of operating profit in 2022 and we expect that will scale up as the fund grows.

Okay, thanks for highlighting that. The $1.5 million that you said Alex, was that all flowing down to the bottom line or is there some outsourcing that simple ?

That's net operating profit.

Net operating profit. Okay.

That's great. Thanks so much.

Thank you everyone for your time today. We look forward to speaking again soon and in the meantime, stay healthy and stay safe.

Take care.