Thank you. Good morning, everyone.

Thank you for joining us today for Dream Industrial REIT second quarter 2026 conference call. Here with me today is Gord 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 FFO 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 two 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 $550 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 translating 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 in-place rents approximately 20% below market.

We have further $140 million of acquisitions under contract or 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 Chancerygate transaction last week.

This transaction helps us achieve multiple strategic objectives for our European business. We're entering the UK multi-let industrial sector, which is 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're entering the market with a high-quality, wholly owned portfolio of recently completed development assets, in addition to two 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 venture segment in Europe through existing vehicles and a new programmatic JV.

For the existing vehicles, we are acquiring just over $40 million of co-investment interests alongside institutional partners in 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 UK, we will explore opportunities to establish a property management platform in this market to grow our recurring revenue further. In addition, we're in advanced negotiations to set up a new partnership with a target gross asset value of $800 million, also focusing on multi-let 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 Netherlands, where we have an in-house platform. Our existing private venture 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 non-strategic assets at accretive returns. Lastly, we're making progress on our power procurement program for select assets that we have identified as candidates for data center development.

We are responding to various RFPs from occupiers and have seen the level of engagement generally increasing over the past quarter. In parallel, we're 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 Gord to discuss our operational highlights.

Thank you, Alex. 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 in 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 of 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. WALTs continue to be stable with average lease terms of 4.1 years.

Compared to 2025, we're 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 has also accelerated. During the quarter, we signed over 370,000 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 265,000-square-foot, 10-year lease with a global automotive manufacturer at our 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 127,000 square feet at our recently completed redevelopment project in Whitby, and are in advanced negotiations for another 110,000 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 and 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 CP NOI growth.

Overall, our leasing pipeline remains healthy, with over 35 deals and 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, Gord. Our portfolio delivered comparative properties NOI growth of 10.3% for the quarter, led by 14.6% growth in the Canadian portfolio and 5.6% 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 28 cents 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 quarter 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-7 times range. The 2.5% distribution increase will take effect with our September 15th distribution, bringing the annualized rate to 71.75 cents 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 $1.08 to $1.10 is intact, and we are now expecting the results to be slightly above the midpoint. The Chancerygate assets are not expected to have a significant impact on 2026 FFO.

We expect them to start contributing to FFO as they are stabilized and 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 Alex to wrap up.

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

Our results this quarter highlight the evolution of the total return model DIR offers to its unitholders. We remain focused on delivering sustainable and growing free cash flow that we'll look to reinvest back into the business 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're in advanced discussions on, I'm 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, Brad. The investment strategy will be focused on multi-let industrial assets, similar profile to what Chancerygate already owns and manages.

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

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

It's generally focused on new acquisitions. We're not contemplating seeding this JV with any of the assets right now, but there's always possibility to have conversations.

Nothing is ongoing at the moment.

Okay. Just for my understanding, on Chancerygate, what's the pre-leasing rate of the assets either substantially completed or under construction, just to get a sense of what leasing is left to do if any?

These are multi-let assets. As such, they don't get pre-let during construction.

The leasing starts generally when the assets are built. Out of the just under 300,000 square feet of assets that are the most advanced phase of the construction, just over 100,000 has been built and delivered in Q1, and so that asset has been in lease-up.

There we are just about to finalize a lease for about 30% of the space and in advanced negotiations for another 15%. It's going quite well and the asset was just delivered in the first quarter, just highlighting the leasing velocity for this kind of product.

Then the other two assets are going to be delivered in September. Leasing marketing is starting, but the lease-up will likely start ramping up then.

What would be generally your expectations for the timeline for a full lease-up process to reach stabilization once the construction is completed for these type of assets?

It would be gradual over next 12 months, maybe shorter. It would be gradually ramping up for these assets.

Okay. Thanks, I'll turn it back.

Hello, do we have a next question?

Thank you. Congrats 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 haven't 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're making, whether it's the same-property NOI pace, whether it's additional revenue sources are contributing. Our 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 '27 and into '28, and so we are encouraged by that and encouraged by the overall trajectory of the earnings growth.

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

Are you capturing growth earlier than expected or is the absolute growth?

No, we're not capturing growth earlier than expected on same-property side. If anything, we're capturing the growth that we are delivering with kind of occupancy levels that are generally below the run rate, there is more potential from occupancy going up.

As Gord suggested in his remarks, we're 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, the rental growth should be an added driver as that trend continues.

Great. Maybe on the intention to establish a property management platform in the UK, 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 wouldn't say that that's the intention. It's an opportunity.

We underwrote the Chancerygate transaction primarily on the basis of the assets that we're buying and the returns that we're buying, and then obviously that opens up the opportunity set for us to continue deploying in the UK through an established operation both in development and standing assets. When we looked at the existing ventures, the returns that we're getting there is compelling and attractive, and so that's how we underwrote it.

The opportunity to establish a property management platform is going to be additive to that, and then we're putting emphasis on this new JV that is going to be ramping up in the markets where we're already present from property management capability standpoint.

Okay. Last question for me is on the property management margin.

I think previously you had communicated some sort of five-year guidance on how that margin could grow. Now with the Chancerygate announcement made and the new JV being created, do you have a new kind of growth target for the property management fee margin?

We'll provide that when we communicate the guidance for '27, but generally it's intact, with perhaps slightly better as we're seeing more scale to that business.

Great. Thank you.

I'll turn it back.

Thanks, Sam.

Thank you, and good morning. Guidance was increased on same-property NOI growth for this year.

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

Thank you, Himanshu. On the Spain vacancy, it's not materially impacting our NOI outlook.

Rents in Spain are growing, but they're still relatively low. While this is impacting the occupancy numbers, especially occupancy numbers for Europe optically, it doesn't really change the NOI all that much given the rents are still relatively low.

We are in advanced negotiations there, as Gord suggested, for the occupancy to commence this year, but it doesn't change our outlook dramatically. 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 '25, despite relatively strong first half of '26 being expected, we kind of baked in some reserves for timing of lease-up.

Now we're seeing contracted leasing coming through, strong retention, we are confident to increase that outlook, and that's across the board, really. It's not driven by any particular region.

Fair enough. Thank you.

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?

Good question, Himanshu. It's Gord.

We're seeing some NER compression right across the portfolio. It's most pronounced in Western Canada, but as the new supply starts to dry up, which it has been, and get absorbed in Toronto, we're starting to even see reductions as well too in the GTA.

Where we're noticing the reductions in Western Canada has predominantly been driven by direct deals of our leasing team, we're mitigating commission costs and then also too, we've been mitigating some deal and allowance costs. In the GTA, we're predominantly seeing less free rent in deals, and the other spot where we've been doing quite well as an operating team is on renewals.

We're 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. We're 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.

All right. In Montreal also, you're seeing that trend coming through, lease incentives reduction?

No, not necessarily lease incentive reductions, but we are starting to see more absorption. This was one quarter, if you look at some of the national stats, where Montreal has had some positive absorption, we're starting to see more good deal flow.

The small- and mid-bay sector in the GMA has been quite good and quite resilient, we're seeing more competitive deals there. Traditionally, as we've advised over the last few quarters, Himanshu, the larger bay is still quite competitive and soft in the region.

Got it. Thank you, Gord.

Then just moving to capital deployment, bunch of these acquisitions announced. Are the proceeds from CPP disposition, is that fully deployed now?

Once we include the post-quarter acquisition, Chancerygate, and the under-due-diligence acquisitions?

Thanks for that follow-up, Himanshu. We're 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. We have a little bit more capacity to go.

Okay. Fair enough.

Then just looking at the acquisitions, almost $200 million in Germany, I think, post-quarter. You mentioned 20% below market, in-place rents.

What is the lease term for that particular acquisition in Germany?

It's relatively short lease term, 3 to 5 years, depending on the assets, but on average, I think in the 3 and change range. Good assets, urban, mid-box product in major markets, strong, diverse occupier base.

There's some single assets there, but also one portfolio deal that 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.

On the German assets overall, we're 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.

Maybe just the last one, how does Germany compare to the UK, in terms of market rent growth expectations? I know you just entered the UK with the Chancerygate.

Just wondering, do you rank one over the other in your outlook?

Look, we look at every opportunity and we compare the total return underwriting amongst all acquisitions that we pursue. 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 to put in, the higher the risk of that underwriting.

What we like about Germany is that we can get to attractive total returns without necessarily putting a lot of stress into the underwriting model. From our existing portfolio, we've seen strong evidence of rental growth in urban nodes, especially for these mid-sized footprints, and so we expect that that will continue because we're not seeing a lot of supply of this kind of product.

We're not really seeing how that pressure on the occupier markets is going to be changed. When we look at the UK, well, part of the reasons why it took us a while to enter the UK market is we were looking at opportunities that would provide a return premium relative to deploying in our existing markets that we know well already.

With Chancerygate, we found that, where we're acquiring very high-quality assets at target 8% yield on cost, and that's untrended yield on cost. We think that that's attractive.

We also think that the UK opportunity offers differentiated growth profile through the rent review mechanism that doesn't exist on the continent, doesn't exist in Canada. We expect that that is going to be additive to our contractual rental growth opportunities.

Rental growth-wise, again, as it is everywhere in our markets at least, there's no widespread rental growth, they're pockets of rental growth. In Canada, we're seeing Calgary emerging as a market that is seeing the strongest rental growth, for example.

As Gord suggested, we're seeing pockets of that in GTA, and similar in Europe. We're seeing pockets of that in our current portfolio, and in the UK, some markets are doing better than others, and we think that the markets that we're getting exposed to are going to outperform just given the lower starting point.

Great color. Thank you so much, and I'll turn it back.

Thank you, Himanshu.

Thanks. Morning, everyone.

It was interesting to see the REIT be much more active with on-balance sheet acquisitions versus growth within the various JVs. I'm just curious, what's 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?

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

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

Okay. No, that makes sense.

It was small, but within the DSI JV, there was the GTA West disposition and the pricing at roughly, just over 500 bucks 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 a shift in kind of the private market value of assets in the GTA West?

Just love your thoughts there.

Strong pricing. Thank you for picking that up.

We like that price. It's a good asset.

It has a fair bit of land, older asset that sits on larger plot, and that the value there is reflective of that. Also sort of reflective of just strength of the private market overall for these kinds of assets or for assets that we own, strength of the user market.

Kind of is very consistent with the theme that we've been communicating over the past few quarters now.

Fair enough. Then just the last one for me, you've given a lot of good color on the call so far, but how would you classify the kind of occupier or leasing environment today?

Are you seeing elevated RFP activity? How is that maybe changed or not changed year-to-date?

It's regionally specific, Kyle. It's Gord.

Still Western Canada is strong. Tour activity has been strong.

GTA, we're seeing increased activity. Where we take solace in and we've been quite optimistic on is our development opportunities.

We've been seeing really good activity, RFP activity. We did a couple of big deals in Q2.

There's tours. Type of users that we're seeing are more touring around big-box in the GTA, but we're seeing a lot of 3PLs out in the market, we're seeing some people in the trucking industry.

Government is still quite active, and then subsidiaries of government use. You're seeing contracts being announced regularly.

We're seeing a lot of those subsidiary users out in the market as well too in the GTA. It's been quite good activity.

We've 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. Just following up on that, that was the 35 active deals, that's on the wholly owned portfolio, or is that everything in Canada?

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

65%. Okay.

Great. Thank you very much, I'll turn it back.

Thanks. Just hopefully a couple of quick ones for me, but just it doesn't seem like it, but I'm just curious if you can 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 timelines in Canada?

Then as well if you're seeing any changes in the behavior in Europe as this Iran conflict sort of continues to unfold?

Thanks, Pammi. We are not really seeing a 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 Gord suggested, is a meaningful pick-up in activity in '26 over '25 so far, and we see that in our portfolio, we see that in the market stats that various brokerage houses put out.

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

We're seeing those kind of industries tend to be renewing, as Gord said. We're seeing higher retentions, we're seeing options getting exercised.

Staying put is, in many cases, the decision that these businesses take. 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 being back in the growth mode.

It's not affecting kind of the robust momentum that we're seeing already today. As far as Europe goes, we haven't seen sort of impact on leasing activity so far.

Where we're starting to see movements is construction costs. Construction costs could be under pressure upwards, and that likely means less supply or need to achieve higher rents to justify supply.

That's something that we're watching across our markets. We talked about inflation.

Again, we're not hoping for more inflation in Europe, but our portfolio has inflation protection built in, as you know.

Got it. Okay.

Then just in terms of as you look maybe through the balance of the year or maybe even more so into 2027, are any large known non-renewals that you're anticipating from an occupancy standpoint?

Nothing large. There're obviously going to be some non-renewals, but nothing that is going to be material.

Okay. Then just 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? Then, how are you thinking about 2027 from a spread standpoint on the renewals?

Look, it really is a function of what's rolling. We had relatively low rents rolling in the first quarter, and so that impacted higher spreads, especially in Ontario.

We do provide kind of an outlook of where our expiring rents are by market in our MD&A, and we also disclose where we believe average rents are. On average, that kind of you can model out kind of leasing spreads.

Again, it's primarily a function of expiring rents in any given quarter.

Thanks very much.

Thank you, Pammi.

Hi, guys. With regard to retention, just looking at Europe versus the Canadian portfolio, obviously, Spain had an impact and, to your point, the rents were low, it didn't impact NOI as much, but it seems like you're just generally doing better on retention in the Canadian portfolio than Europe.

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

The European portfolio just has an higher average tenant size than Canadian portfolio, what that means is any given lease decision will be much more pronounced when you look at statistics such as occupancy or retention ratio. We're not really drawing any conclusions there.

Generally, we're seeing healthy retention ratios over time. Any given quarter, yes, there will be swings, but when we look at the portfolio's performance over the last 5 years, retention ratio was pretty consistent in Europe to the Canadian portfolio.

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

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 impacted in Germany.

Is that something that you're seeing in terms of tenants, or tenants have talked about, and I don't 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?

Haven't seen any impact so far, Matt, but we're watching with no evident impact on our occupiers so far. Then

if we look at your market rent disclosure, you're at kind of 10 around $10 in Western Canada, 16 in Ontario, Quebec mid-13s. Can you give a sense if today you were to build in those markets, what kind of rent 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 rents into the market?

It really is a function of product as well as it is a function of rent. For larger bay product or kind of whether it's larger bay or the upper end of mid-box, what we see is you need to kind of see high teens in the market like Toronto to justify, call it, $18-plus, depending obviously on your land basis, whether you're buying land today, whether you bought land a long time ago, you bought land kind of maybe in 2022 20 21, '22 kind of time frame.

Generally speaking, it's in that high teens range. In Western Canada, at the current rent levels, you can be solving to kind of low 6s in terms of development yield, which we think is on the lower end of what we would want to pursue.

We would want to push for as close to 7% as possible in Canadian context, we think that there needs to be some rental growth to get there. What we are seeing that rental growth coming through, we're sort of seeing early signs of it.

The Calgary market is pretty diverse from a product standpoint, you see pretty significant variability in rents from one asset to another. When you're 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.

Makes sense. Maybe last one for me.

There's 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's a bit of a chicken and the egg scenario, but any chickens or eggs out there?

Targeting both.

As our data center or our powered land portfolio is focused on the GTA at the moment. We have opportunities in other markets, including Calgary, or Alberta broadly, including Quebec, but for now, we're focusing on a relatively small, but meaningful sort of relatively small number of assets with meaningful power in the GTA with kind of in the 250-megawatt range across three sites.

As we commented in our remarks, we've seen more engagement from occupiers. We've responded to more RFPs in Q2 than we have throughout the entire 2025.

We're seeing more engagement and we're advancing the work with various utilities to make that powered opportunity contractual, and we'll keep the market updated as we make progress.

Great. Thanks, guys.

Hey, good morning. It's been a minute obviously since you raised the distribution last.

I'm just wondering if you can talk a little bit about the deliberations on that front and what prompted the change? 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. We've been building out all the various growth drivers in the business.

Our FFO and comparative properties NOI growth has been very consistent and the payout ratio has been reduced as well accordingly. We're now in the low 60s, sort of trending in that low 60s to mid-60% FFO payout ratio.

We've 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'd been several years since the last increase, we felt the business was at a point in time where we were ready to do that. 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's retained in the business, and that way for reinvesting in the business, and so we would look to, if any future increases to be at a rate that is inside of where we think that our FFO and free cash flow is growing.

I would just say, just to be clear, you're not committing to an annual cadence at this point, but it sounds like it's certainly possible.

Exactly. We're not saying it's going to be annual.

I think we've laid the groundwork and the outlook that it is certainly in the realm of consideration. We're 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. It's always under consideration as well.

We'll continue on executing and we'll see 12 12 months from now.

Okay. Then just bigger picture, investors should not be reading any sort of change to investment strategy as a result of this.

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

I wouldn't call it a catch-up, Tal. I think, it's an evolution of the total return model.

We think that growing dividend that is sustainable and allows us that allows us to increase the our retained cash flow is is an important element of our total return model. While we're not committing to it to be annual, we've been laying the groundwork to be able to contemplate that as Lenis suggested, and that's very much is being contemplated.

This is this increase is kind of a start of the a new total return model that DIR is going to look to deliver to unit holders.

Got it. Then I can't remember whether it was you or Gord that made reference earlier to just some of the demand in Canada coming from the governments.

Do you know the exact use there? I think the presumption is that with all the tick up in defense spending that would be the prominent driver, or a predominant driver.

Maybe you can just offer a little bit more color on what they are looking for and why?

Hey, Tal, it's Gord. There's kind of three buckets with the government on activity that we're seeing.

Defense is definitely one of them. They're looking for secure warehousing and storage and some light manufacturing along major corridors across the Trans-Canada.

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

I believe they're called Shared Services Canada. There's some requests in and groups that are doing contracts with them, more around power procurement requests, getting a pulse on what buildings have what 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's not just the federal government, the provincial government has also been relatively active in the GTA.

Got it. That's very helpful.

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. I think if we're looking at the 5-year part of the curve, we're seeing euro-equivalent debt in and around 4% right now, and Canadian equivalents probably in around the 4.15-ish, 4.20-ish range.

Yes, they have been bouncing around, we always try to be opportunistic when we can as well.

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

We do. I think our euro debt ratio is sort of in that low to mid-80% range, we definitely have euro debt capacity, and all-in rates are still lower than the Canadian and also to hedge some of the currency exposure.

Got it. That's great.

Thanks, everybody. Once again, if you have a question, it is *1.

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 one in 13 years, but it almost sounded like it wasn't necessarily going to be a recurring one.

I know you can't commit, but if FFO growth is mid to upper single digits, is there anything preventing the REIT from raising the distribution by some portion of that growth?

Thank you for the follow-up, Sam. I just want to be clear.

The short answer is no, there's nothing prevents us, and we've been building out the balance sheet of DIR over the last 5 years to have low leverage, have low payout ratio, growing FFO so that we could then get to a total return model that includes recurring distribution growth. It's very much what we are looking to do.

It's not something that we're committing to do annually, but this is very much what we're looking to do, and the governor for that will be growth in our free cash flow so that there is the growth that we'll be passing on to our unitholders is sustainable, but the business continues to retain cash that we can reinvest and compound. Just want to be very clear on that.

Thank you for the follow-up.

Yes, it does. Thank you very much for the clarification.

I'll turn back. Thank you.

Thank you.

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.