Dundee Industrial REIT Reports Solid Q1 2013 Results

Dundee Industrial REIT Reports Solid Q1 2013 Results 
TORONTO, ONTARIO -- (Marketwired) -- 05/07/13 --  
This news release contains forward-looking information that is based
upon assumptions and is subject to risks and uncertainties as
indicated in the cautionary note contained within this press release. 
DUNDEE INDUSTRIAL REIT (TSX:DIR.UN) today announced its financial
results for the three months ended March 31, 2013. 

--  Occupancy and rental rate increases - 96.5% occupancy rate, well ahead
    of national average. More than 340,000 square feet of GLA leased during
    the quarter at incrementally higher rental rates. Estimated market rents
    remain 6% above expiring rents. 
--  Bench strength continues to grow - Dedicated team members continue to be
    added across the company with key leadership roles being filled in both
    Eastern and Western Canada. 
--  Strengthened capital structure through debt financings - $98.6 million
    of new mortgage financing for an average term of 8.5 years and with an
    average 3.8% interest rate. Eliminated variable rate debt and paid down
    credit facility. 
--  Focused execution of growth strategy - Dundee Industrial continues to
    expand its national footprint, committing to approximately $378 million
    of high quality acquisitions during the quarter, further diversifying
    its portfolio and strengthening its cash flow. Acquisitions include the
    $151.5 million purchase of a 22 building portfolio from CanFirst Capital
    Management that closed on April 24, 2013 and the proposed take-over of
    C2C Industrial Properties and its 2.5 million square foot portfolio. 
--  Increased enterprise value and market cap - issued 10.5 million units at
    $11.00 per unit during the quarter, contributing to an 85% increase in
    market capitalization and 92.7% increase in enterprise value since
    initial public offering. Pro forma closing the proposed takeover of C2C
    Industrial Properties market capitalization will increase to
    approximately $767.0 million and enterprise value will increase to $1.6
SELECTED FINANCIAL INFORMATION                                              
(unaudited)                                              Three Months Ended 
($000's except unit and per unit                                            
 amounts)                                March 31, 2013   December 31, 2012 
Investment properties revenue       $            29,250 $            17,202 
Net operating income ("NOI") (1)                 19,892              12,535 
Funds from operations ("FFO") (1)                11,993               8,452 
Adjusted funds from operations                                              
 ("AFFO") (1)                                     9,275               6,492 
Investment properties value                   1,148,845           1,147,410 
Debt                                            659,504             649,845 
Per unit data (basic)                                                       
FFO                                                0.22                0.22 
AFFO                                               0.17                0.17 
Distributions                                      0.17                0.16 
Units (period end)                                                          
REIT Units                                   46,749,543          36,257,538 
LP Class B Units, Series 1                   16,282,096          16,198,747 
Total number of units                        63,031,639          52,456,285 
Portfolio gross leasable area (sq.                                          
 ft.)                                        11,434,418          11,438,195 
Occupied and committed space                       96.5%               96.3%
See footnotes on page 4                                                     

"We are very pleased with the high quality of the properties being
acquired and the contribution that they will make to our business
going forward," said Randy Cameron, President and CEO, Dundee
Industrial REIT. "In addition to providing cash flow growth,
increased scale allows us to better meet the changing needs of our
tenants and to also better manage geographic and tenant exposure,"
said Mr. Cameron. 

--  First full quarter of operations and financial results are in-line with
    expectations - Q1 2013 was the Trust's first full quarter of operations
    and also reflects a full quarter of results for all of the properties
    acquired in Q4 2012. AFFO for the quarter was $9.3 million or $0.17 per
    unit, representing an increase of $2.8 million or 42.9% over the prior
    operating period (October 4, 2012 to December 31, 2012) and no change on
    a per unit basis over the prior period. The increase in AFFO is largely
    due to a full quarter of earnings from the KingSett Portfolio, acquired
    on December 19, 2012, as well as a full quarter of earnings for the
    Initial Properties, acquired on October 4, 2012. Per unit results were
    flat over the prior period; however Q1 results included approximately
    $0.01 per unit of temporary dilution relating to delayed deployment of
    the proceeds from the March 6, 2013 equity offering. 
--  Q1 2013 FFO was $12.0 million or $0.22 per unit, representing an
    increase of $3.5 million or 41.9% over the prior period and no change on
    a per unit basis over the prior period. For the reasons noted above, FFO
    increased largely due to the timing of acquisitions, and on a per unit
    basis was partially diluted from cash related to the equity offering
    which was not deployed in the quarter. 
--  Q1 2013 NOI was $19.9 million, representing an increase of $7.4 million
    or 58.7% over the prior period due mainly to the timing of the KingSett
    Portfolio acquisition in Q4 2012. 


--  Portfolio occupancy remains ahead of national industry average - At
    March 31, 2013, the overall percentage of occupied and committed space
    across the Trust's portfolio was strong at 96.5%, well above the
    national industry average of 94.2%. 
--  Leasing Profile - Leasing activity during the first quarter included
    approximately 101,100 square feet of new leases and approximately
    240,400 square feet of renewals, more than offsetting approximately
    316,700 square feet of expiries and early terminations. At period-end,
    the Trust had approximately 486,700 square feet of vacant space, of
    which 92,000 square feet is committed for future occupancy. The average
    remaining lease term at March 31, 2013 is 5.1 years. 
--  Average in-place rents 6% below market rents - At quarter-end, the
    portfolio average in-place rent was $7.18 per square foot (December 31,
    2012 - $7.12), approximately 6% below estimated market rents. 
                      GLA   Occupancy    Average   Average in-     Estimated
                 (sq. ft.)        (%) lease term    place rent   market rent
                                         (years) (per sq. ft.) (per sq. ft.)
Western Canada   4,121,299       96.4       3.85 $        8.46 $        9.44
Central Canada   5,121,917       97.3       6.75          6.29          6.22
Eastern Canada   2,191,202       95.0       3.55          6.85          7.25
Total           11,434,418       96.5       5.10 $        7.18 $        7.58
--  Bench strength continues to grow - Dedicated team members continue to be
    added across the company with key leadership roles being filled in both
    Eastern and Western Canada. The Trust has hired Joe Iadeluca as Senior
    Vice President, Eastern Canada. Joe has more than 25 years of experience
    in commercial real estate and is based in Montreal. Prior to joining
    Dundee, Joe spent six years at GE Real Estate. Between 1998 and 2007,
    Joe held a similar leadership position with Dundee REIT, until his
    employment was transferred to GE Real Estate as part of a portfolio
    sale. The Trust has also hired Yanick Frappier as Vice President,
    Western Canada. Yanick has 15 years of experience in commercial real
    estate. Prior to joining Dundee, he worked for SITQ/Ivanhoe Cambridge.
    Also in place are dedicated leasing teams for both the Eastern and
    Western Canada portfolios. 


--  New equity issue helps increase market capitalization to $673.6 million
    - On March 6, 2013, the Trust completed a public offering of 10,465,000
    Units issued at a price of $11.00 per unit for gross proceeds of $115.1
    million. Since completing its Initial Public Offering in October 2012,
    the Trust has completed two equity offerings, each at successively
    higher prices, increasing the public float by approximately 130% and,
    together with higher trading prices, resulting in an 85% increase in
    total market capitalization. 
--  Strengthened capital structure through debt financings - During the
    quarter, the Trust secured $50.0 million in 7-year mortgage financing at
    a fixed face interest rate of 3.68% and $48.6 million in 10-year
    mortgage financing at 3.95%. The proceeds of these financings were used
    to repay $42.0 million in promissory notes due to Dundee REIT, as well
    as the $32.5 million variable rate bridge loan used to partially fund
    the KingSett Portfolio acquisition and $10.0 million drawn on its
    revolving credit facility. As a result, the Trust has eliminated its
    variable rate debt, lowered is effective interest rate and lengthened
    its term to maturity. 

Key performance indicators(2)            March 31, 2013   December 31, 2012 
Level of debt (debt-to-gross book                                           
 value)(3)                                         50.1%               54.3%
Interest coverage ratio(4)                    2.7 times           3.0 times 
Average face interest rate                         4.25%               4.19%
Debt - average term to maturity (years)             5.0                 4.1 
See footnotes on page 4                                                     

Subsequent to completing the CanFirst Portfolio acquisition and the
acquisition of C2C Industrial Properties, the Trust's debt ratio will
return to approximately 54%. 
The Trust continues to pursue strategic acquisitions. During the
quarter, the Trust sourced and conducted due diligence on a portfolio
of 22 properties comprising 1.6 million square feet of gross leasable
area in key industrial nodes and situated along major transportation
corridors in the Greater Toronto Area (the "CanFirst Portfolio"). The
CanFirst Portfolio complements the REIT's existing assets in terms of
asset type and quality, as well as other key portfolio metrics. The
Portfolio has a current in-place occupancy rate of 96%, a weighted
average lease term of approximately 3.7 years and an average in-place
rent of $5.83 per square foot. The acquisition was completed
subsequent to quarter-end, on April 24, 2013, for a total purchase
price of approximately $(151.5) million. 
In addition, on March 19, 2013, the Trust announced that it had
entered into a support agreement pursuant to which it had agreed to
make an offer to acquire all of the issued and outstanding shares of
C2C Industrial Properties Inc. ("C2C") in exchange for units of
Dundee Industrial REIT. The C2C portfolio comprises 25 properties
totalling 2.5 million square feet of gross leasable area located
primarily in Halifax, Edmonton, Greater Toronto Area and Greater
Montreal Area, and complements the Trust's existing assets in terms
of asset type and quality, as well as other key portfolio metrics.
The portfolio has a current occupancy rate of 96%, a weighted average
lease term of approximately 3.7 years and an average in-place rent of
$5.65 per square foot. The take-over bid circular and the offer to
acquire the outstanding shares of C2C was mailed to C2C shareholders
on April 5, 2013 and expires on May 11, 2013. 
The pro forma impact of the acquisition on Dundee Industrial REIT's
key portfolio metrics is detailed below: 

                                                Pro forma                   
                                                  CanFirst        Pro forma 
Portfolio                   March 31, 2013       Portfolio   CanFirst & C2C 
Gross leasable area (square                                                 
 feet)                        11.4 million    13.1 million     15.6 million 
Number of properties                   158             180              205 
Average remaining lease                                                     
 term (years)                          5.1             4.9              4.7 
Average in-place rent (per                                                  
 square foot)               $         7.18  $         7.00  $          6.79 
Average market rent (per                                                    
 square foot)               $         7.58  $         7.39  $          7.17 
Average tenant size (square                                                 
 feet)                              11,164          11,353           11,769 
Number of tenants                      990           1,110            1,276 
Proportion NOI from Multi-                                                  
 tenant / Single-tenant           61% / 39%       62% / 38%        66% / 34%
Occupancy rate (%)                      97%             96%              96%

Senior management will host a conference call to discuss the results
tomorrow, May 8, 2013 at 2:00 p.m. (ET). To access the call, please
dial: (647) 317-3471 or toll free at 1-866-551-3680 and using
passcode 65951571#. A taped replay of the call will be available for
30 days. To access the conference call via webcast, please go to
Dundee Industrial REIT's website at www.dundeeindustrial.com and, in
the Investor Centre, click on Calendar of Events. The webcast will be
archived for 90 days. 
Other information 
Information appearing in this news release is a select summary of
results. The consolidated financial statements and management's
discussion and analysis for the Trust, as well as its Supplementary
Information Package will be available at www.dundeeindustrial.com and
on www.sedar.com. 
Dundee Industrial REIT is an unincorporated, open-ended real estate
investment trust. Dundee Industrial REIT owns a portfolio of 180
primarily light industrial properties comprising approximately 13.1
million square feet of gross leasable area in key industrial markets
across Canada. Its objective is to build upon and grow its portfolio
and to provide stable, sustainable and growing cash distributions to
its unitholders. For more information, please visit
(1) NOI, FFO and AFFO - are key measures of performance used by real
estate operating companies; however, they are not defined by
International Financial Reporting Standards ("IFRS"), do not have
standard meanings and may not be comparable with other industries or
income trusts. 
(2) The key performance indicators include the results of operations
for the period from January 1, 2013 to March 31, 2013.  
(3) Level of debt is determined as total debt before deferred
financing costs and mark-to-market adjustments, divided by total
(4) The interest coverage ratio for the period, is calculated as net
rental income plus interest and fee income, less general and
administrative expenses, all divided by interest expense on debt,
excluding deferred financing and mark-to-market adjustments. 
Forward-looking information 
This press release may contain forward-looking information within the
meaning of applicable securities legislation. Forward-looking
information is based on a number of assumptions and is subject to a
number of risks and uncertainties, many of which are beyond Dundee
Industrial REIT's control, which could cause actual results to differ
materially from those that are disclosed in or implied by such
forward-looking information. These risks and uncertainties include,
but are not limited to, general and local economic and business
conditions; the financial condition of tenants; our ability to
refinance maturing debt; leasing risks, including those associated
with the ability to lease vacant space; and interest and currency
rate functions. Our objectives and forward-looking statements are
based on certain assumptions, including that the general economy
remains stable, interest rates remain stable, conditions within the
real estate market remain consistent, competition for acquisitions
remains consistent with the current climate and that the capital
markets continue to provide ready access to equity and/or debt. All
forward-looking information in this press release speaks as of the
date of this press release. Dundee Industrial REIT does not undertake
to update any such forward-looking information whether as a result of
new information, future events or otherwise. Additional information
about these assumptions and risks and uncertainties is contained in
Dundee Industrial REIT's filings with securities regulators,
including its latest annual information form and MD&A. These filings
are also available at Dundee Industrial REIT's website at
Dundee Industrial REIT
Michael Cooper
Chairman, Executive Committee
(416) 365-5145
Dundee Industrial REIT
Randy Cameron
President & Chief Executive Officer (Interim)
(403) 270-2480
Dundee Industrial REIT
Mario Barrafato
Chief Financial Officer
(416) 365-4132
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