- May 25, 2022
- Posted by: Mainframe Consulting
TORONTO–(BUSINESS WIRE)–Dream Industrial Real Estate Investment Trust (TSX: DIR.UN) (the “Trust” or the “REIT”) announced an update on its sustainability initiatives that are currently underway across its portfolio.
Net Zero Strategy
The Trust continues to progress towards its goal of achieving net zero on Scope 1 and 2 emissions by 2035 and select scope 3 emissions by 2050, in alignment with science-based targets outlined in the Paris Agreement. In 2021, the Trust became official supporters of the Taskforce on Climate-related Financial Disclosures (“TCFD”), which provides guidance and recommendations on climate-related risk and opportunity disclosures and committed to the United Nations Principles for Responsible Investment (“UNPRI”) and the Net Zero Asset Managers (“NZAM”) initiative. Recently, the Trust published its Net Zero Action Plan (link), which outlines the proposed strategy and course of action to achieve net zero within the targeted timeline.
In alignment with its net zero target, the Trust is finalizing development plans for its inaugural net zero redevelopment expected to commence later in 2022. The Trust intends to redevelop a cluster of three buildings on a 10-acre site located in the Great Toronto Area (“GTA”), in close proximity to Highways 401 and 410, into a 209,000 square foot best-in-class facility with construction completion expected in 2023. The Trust expects the new facility to be designed to include energy efficient roof insulation, heating and ventilation equipment, as well as a reinforced roof to support solar panels on up to 70% of the roof area. The building is expected to receive Canada Green Building Council’s (“CaGBC”) Zero Carbon Building Standard certification upon completion.
Net zero redevelopment – GTA, Canada
(See Figure 1)
Green Lease Program
The Trust has established and executed a green lease program that includes commitments to tenant energy disclosures, low carbon construction practices, the purchase of on-site renewable energy (if available), and tenant energy efficiency engagement and training, and cost recovery clauses for energy efficiency upgrades.
Recently, the Trust achieved Gold Level recognition by the Green Lease Leaders (“GLL”) program during the Better Buildings, Better Plants Summit, by the Institute for Market Transformation (“IMT”) and the U.S. Department of Energy’s (“DOE”) Better Buildings Alliance.
“We are pleased to be recognized by GLL for our significant efforts in driving sustainability initiatives across our portfolio,” said Alexander Sannikov, Chief Operating Officer of Dream Industrial REIT. “We continue to incorporate sustainability into our investment decision-making, which allows us to further enhance the quality of our portfolio and business. Our solar panel installation program is well underway with several projects already online or expected to come online in the coming months. Our growing development program is expected to significantly enhance the sustainability profile of our portfolio.“
The scope and scale of the Trust’s renewable energy program continues to gain momentum, and the Trust has commenced the construction on several projects across its portfolio.
- In Canada, the Trust is currently executing on seven projects that will add over 6,000 panels generating over 2.6 MW of renewable energy;
- In Europe, the Trust is currently underway on six projects that will add 15,400 solar panels generating over 7.0 MW of renewable energy; and
- The Trust is currently in the advanced stages of evaluating the feasibility of eleven additional projects that could add an additional 35,000 solar panels.
Pro forma these projects, the Trust will have over 75,000 solar panels encompassing over five million square feet of gross leasable area (“GLA”) across its portfolio.
Overall, the Trust expects its capital investment for the 13 projects currently underway to total approximately $11 million with a forecast unlevered yield on cost of over 8.7%. During Q1-2022, the Trust’s first solar installation project in Alberta achieved substantial completion and the tenant is now using solar-generated power to operate the building. The Trust is currently in the process of obtaining a LEED certification on the building.
Solar panel array in Canada and the Netherlands
(See Figure 2 and Figure 3)
Below, the Trust has provided an update on other sustainability initiatives across its portfolio.
The Trust’s criteria for new investments includes acquiring assets that are more energy-efficient than the average stock in their respective markets. To date, the Trust has invested over $220 million to acquire buildings that are Green-certified (BREEAM, LEED, DGNB). Moreover, the Trust has acquired $73 million of assets in Europe that carry an Energy Performance Certificate (“EPC”) Label B or higher.
Sustainable buildings – Green certified
(See Figure 4 and Figure 5)
In addition, several assets in the Trust’s portfolio are already built to green standards and it is currently in the process of obtaining green certifications on these assets. In 2021, the Trust acquired a 159,000 square foot modern distribution facility in the Netherlands. The asset carries an A++ EPC Label with significant energy efficiency characteristics such as rooftop solar panels, LED lighting with motion sensors and water efficient washroom fixtures. In addition, the building offers secure bicycle parking, electric vehicle (“EV”) charging stations and natural daylight for the building occupants. The Trust is in the process of obtaining a BREEAM Very Good certification on the asset.
Overall, the Trust is in the process of acquiring Green certifications on seven existing assets as well as seven ongoing developments and expansions across Canada and Europe spanning 2.5 million square feet.
Sustainable building with green certification in progress
(See Figure 6)
Furthermore, the Trust has a target of obtaining green-building certifications on all new developments commencing in 2022. Consequently, as the Trust executes on its development strategy, there is a significant opportunity for the Trust to enhance its portfolio quality as well as the sustainability profile of its overall portfolio.
The Trust is currently underway on a 242,000 square foot expansion at its property in Dresden, Germany, where the Trust is building a freestanding building on excess land at the site. The Trust is expected to achieve a German DGNB Gold certification on the development with the new building designed with the ability to install solar panels in the future.
Sustainable development – Dresden, Germany
(See Figure 7)
The Trust is currently underway on several initiatives to improve energy efficiency across its existing portfolio. The Trust is focused on transitioning the interior and exterior lighting across its portfolio to LED lighting which provides more illumination while requiring substantially less energy than conventional lighting. Since the beginning of 2021, the Trust has upgraded 1.2 million square feet of LED lighting and will continue looking for opportunities to further enhance energy efficiency across its portfolio.
Tenant engagement initiatives
With the vast majority of emissions for industrial buildings coming from tenant-controlled sources, the Trust continues to actively work with its tenants to benchmark tenant sustainability priorities and goals, identify priority initiatives and assets for sustainability investments, and provide insight into opportunities to broker new sustainability-related partnerships, as it progresses towards reducing the carbon footprint within its portfolio. The Trust conducts quarterly tenant surveys on a rotational basis. The survey results provide significant insight into tenant interest in initiatives including renewable energy, LED lighting, green building certifications and EV charging stations, and inform the prioritization of property-specific sustainability initiatives.
Green financing update
With significant capital being invested towards sustainability investments and initiatives, the Trust continues to access green financing as a source of capital to fund these projects. To date, the Trust has issued $850 million of green bonds. In 2021, the Trust deployed $295 million towards eligible green projects and identified $250 million in additional eligible green projects, with a further $300 million of projects in feasibility or preliminary stages. On April 14, 2022, the Trust published its inaugural annual Green Bonds Use of Proceeds report, which can be found on the Trust’s website here.
About Dream Industrial Real Estate Investment Trust
Dream Industrial REIT is an unincorporated, open-ended real estate investment trust. As at March 31, 2022, Dream Industrial REIT owns, manages and operates a portfolio of 244 industrial assets (358 buildings) comprising approximately 44.4 million square feet of gross leasable area in key markets across Canada, Europe, and the U.S. Dream Industrial REIT’s objective is to continue to grow and upgrade the quality of its portfolio which primarily consists of distribution and urban logistics properties and to provide attractive overall returns to its unitholders. For more information, please visit www.dreamindustrialreit.ca.
Forward Looking Information
This press release contains forward-looking information within the meaning of applicable securities legislation, including statements regarding the Trust’s plan to achieve net zero on scope 1 and 2 emissions by 2035 and select scope 3 emissions by 2050; the Trust’s intention to report its progress on achieving net zero greenhouse gas emissions annually; the Trust’s support and commitment in respect of certain initiatives, including with respect to sustainability and financial disclosure; the Trust’s development and redevelopment plans, including in respect of achieving net zero emissions for certain projects, implementing energy efficiency features and other upgrades that improve building sustainability, square footage, and completion dates; the Trust’s ability to fulfill its commitments under its green lease program; the enhancement of the Trust’s portfolio quality and sustainability, including by incorporating sustainability into investment decision-making and implementing certain retrofits and upgrades; the Trust’s plans to install solar panels at certain of its projects, including GLA covered, number of panels to be installed, investment costs, and energy output and unlevered yield to result from such panels; the Trust’s plans to achieve certain green building certifications; expectations regarding the Trust’s engagement with tenants on sustainability matters; and the Trust’s capacity to continue accessing green financing options to fund sustainability investments and initiatives. Forward-looking information generally can be identified by the use of forward-looking terminology such as “objective”, “will”, “expect”, “intend”, “believe”, “should”, “plans”, “allow” or “continue”, or similar expressions suggesting future outcomes or events. 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 the Trust’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; employment levels; mortgage and interest rates and regulations; uncertainties around the timing and amount of future financings; uncertainties surrounding the COVID-19 pandemic; geopolitical events, including disputes between nations, war and international sanctions; the financial condition of tenants; leasing risks; rental rates and the strength of rental rate growth on future leasing; and interest and currency rate fluctuations. The Trust’s 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, rising replacement costs in the Trust’s operating markets remain steady, 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. The Trust does not undertake to update any such forward-looking information whether as a result of new information, future events or otherwise except as required by law. Additional information about these assumptions and risks and uncertainties is contained in the Trust’s filings with securities regulators, including its latest annual information form and management discussion and analysis. These filings are also available at the Trust’s website at www.dreamindustrialreit.ca.
Published at Wed, 25 May 2022 11:36:00 +0000