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Dream Industrial: Strong Market Fundamentals Will Drive Growth For This 6.1%-Yielding REIT

Published Wed, 15 May 2019 15:24:57 -0400 on Seeking Alpha

Investment Thesis
Dream Industrial REIT (OTC:DREUF) (TSX:DIR.UN) delivered an OK Q1 2019, with positive same property net operating income growth. We believe strong demand for industrial properties will continue to drive rental revenue growth for the REIT especially in Quebec and Ontario. Dream Industrial continues to trade at an attractive valuation to its peers. It also offers a 6.1%-yielding dividend. We believe Dream Industrial is a good investment choice for investors seeking both capital appreciation and dividend income.

Data by YCharts
Recent Developments: Q1 2019 Highlights
Dream Industrial had a good Q1 2019. The company saw its SPNOI grew by 0.4% year over year. The growth was primarily driven by growth in its Ontario and Quebec portfolio. Its SPNOI growth rates in Quebec and Ontario increased by 5.4% and 1.6% respectively. While Q1’s SPNOI growth rate was only modest, management reiterated its 2019 SPNOI growth guidance of 2% ~ 3%. Management also expects the growth rate to accelerate as the year unfolds.
Earnings and Growth Analysis
Strong market fundamentals
The rise of e-commerce and the demand for fast delivery has created strong demand for warehouses and fulfillment centres. In order for retailers to deliver products to the consumers quickly, these warehouses and fulfillment centres need to be located near urban centres. Unfortunately, industrial lands near larger cities are scarce, and in strong demand. This is exactly what PwC’s... Read more


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