The Dream Industrial Real Estate Investment Trust, known as Dream Industrial REIT or DIR, has unveiled impressive results for the second quarter of 2026. Diluted funds from operations (FFO) per unit hit $0.28, marking a 7.8% year-over-year increase compared to the same quarter in 2025. In addition, the Trust plans to raise its distribution by 2.5%, setting the annualized rate at about $0.7175 per unit. This adjustment kicks in with the September 15, 2026 distribution. The Trust explains the distribution increase as a response to stronger cash flow, a stable balance sheet, and confidence in its long-term strategy and future business outlook.
Net operating income rises sharply in Q2 2026
Comparative properties net operating income, or CP NOI, in the second quarter of 2026 increased by 10.3% year-over-year to $103.7 million. For the same period in 2025, CP NOI stood at $94.0 million. The growth was even more pronounced in the Canadian portfolio, which saw a 14.6% increase. Ontario, Québec, and Western Canada each contributed to the success, with Québec experiencing a 27.2% surge in CP NOI, followed by Western Canada at 17.2%, and Ontario at 7.8%. Over the first half of 2026, CP NOI (constant currency basis) totaled $201.4 million, up from $184.9 million in the first six months of 2025, reflecting 8.9% growth.
Portfolio reshaped by strategic asset moves
The Trust carried out $370 million in asset dispositions during the second quarter of 2026. These dispositions were part of a joint venture between the Trust and CPP Investments, where the Trust sold the second tranche of assets in the initial portfolio. Net proceeds from the sale were used to partially repay the unsecured revolving credit facility and to fund additional acquisitions that followed the quarter. At the same time, the Trust invested $332 million in new acquisitions for its wholly-owned real estate portfolio. These additions expanded the portfolio by over 2 million square feet.
In its private ventures, the Trust completed $170 million in acquisitions from the start of 2026 up to the second quarter. Of this, the Trust had a direct share of $17 million. These new assets added over 1 million square feet to its managed portfolio, further supporting its growth strategy.
Occupancy levels remained strong, with in-place occupancy for the Trust’s wholly-owned real estate portfolio reaching 94.2% as of June 30, 2026. This is nearly the same as 94.1% recorded at the end of the second quarter in 2025. When including both in-place and committed tenants, occupancy rose slightly to 95.0%. However, it fell just short of the 96.1% level seen in the previous year. During the second quarter, the Trust secured over 2 million square feet of new leases and renewals. Ontario delivered the highest rental spread at 41.6%, while Western Canada followed with a 20.9% spread.
In the first half of 2026, the downtown Toronto office market (which represents 84% of the Trust’s active properties by fair value) realized 2.2 million square feet of positive absorption and overall market occupancy improved by 180 basis points to 85.9% over that period. This represents six consecutive quarters of improving occupancy since Q4 2024, when market occupancy was 81.0%. In downtown Toronto, sublet space decreased by 0.5 million square feet in the first half, bringing the total amount of sublease space in that market down to 2.0 million square feet(6), consistent with increased need for office space as Canadian companies, led by major financial institutions, proceed with return-to-office initiatives. The new office construction pipeline in downtown Toronto remains low, with just 0.4 million square feet currently under construction(6). For the three months ended June 30, 2026, comparative properties NOI for the Trust’s total comparative properties portfolio increased by 6.2%, or $1.5 million, over the prior year comparative quarter, as higher weighted average occupancy driven by leasing activity in Toronto downtown was slightly offset by lower weighted average occupancy and in-place rents in Other markets. Comparative properties NOI(4) in Toronto downtown increased by 9.2%, or $1.8 million, over the prior year comparative quarter, driven by higher weighted average occupancy from new leasing. For the three months ended June 30, 2026, the Trust secured 83,000 square feet of leasing.
As of June 30, 2026, the Trust held total assets worth $8.1 billion, down slightly from $8.4 billion as of December 31, 2025. The drop was primarily due to asset dispositions. However, the Trust was able to offset some of the decrease through the increased value of its investment properties, acquisitions, and foreign exchange adjustments.
For Q2 2026, the Trust reported a net income of $29.7 million, compared to $46.6 million in the second quarter of 2025. The decrease was largely due to higher expenses, including $24.0 million in interest on debt, $24.7 million in negative fair value adjustments to investment properties, and an additional $24.0 million in other net expenses.
The Trust plans to host a conference call on August 5, 2026, at 11:00 a.m. ET to discuss the results in more detail. Attendees can expect a breakdown of the financial highlights, including the CP NOI growth, net rental income increase, and the impact of strategic dispositions and acquisitions.