Dream Industrial REIT (DIR) 2013年年度報告「TSX」.pdf

《Dream Industrial REIT (DIR) 2013年年度報告「TSX」.pdf》由會員分享，可在線閱讀，更多相關《Dream Industrial REIT (DIR) 2013年年度報告「TSX」.pdf（83頁珍藏版）》請在三個皮匠報告上搜索。

1、Dundee Industrial REIT2013 Annual ReportDUNDEE INDUSTRIAL REIT 2013 ANNUAL REPORTStarting May 12,2014,Dundee Industrial reits new name will be Dream Industrial reit.Better Communities to Work InWed like to take the opportunity to thank all our stakeholders for being part of our conti nued success.Be

2、cause of all the hard work and dedication to keep doing things better,2013 was a strong year for us.Dundee Industrial reit has been around since 2012,and weve been dedicated to building a national pure-play portfolio of light industrial properties in key mar kets across Canada.This is so that we can

3、 pro vide our investors with stable and predictable cash flows that generate high yields.Just a few years later,were happy to announce that we are moving into a new and exciting time in our bu si ness.Wed like to let everyone know that star ting May 12,2014,Dundee Industrial reits name will be Dream

4、 In dus trial reit.This change is exciting for us because we are now bringing more clarity to our sto ry and aligning all our efforts around one core belief creating better communities for Canadians to work in which will result in a better investment for our unit-holders.This sums up what we do and

5、why we do it,and we think its a bet ter articulation of who we are,which has been such an inte gral part of our cul ture,our work and our companys ob jectives since the beginning.Stock Exchange ListingOn the Toronto Stock Exchange,Dream Industrial REIT will continue to trade under these listing symb

6、ols:REIT Units:DIR.UN5.5%Convertible Debentures:DIR.DBOur industrial buildings are equal to 300 football fields and they are full of everything we use We are pleased to report solid financial results for the three months ended December 31,2013,which marks the completion of our first full fiscal year

7、 of operations since our IPO on October 4,2012.The fourth quarters results include the results of operations for our stabilized portfolio of assets which establish our run rate.In the five quarters since the IPO,we have grown the portfolio to 15.7 million square feet comprising$1.5 billion of assets

8、,maintaining our leverage at 52.6%while growing our quarterly adjusted funds from operations(“AFFO”)to the current 19 cents per unit.This growth has allowed the Trust to increase the annualized distribution from 67.5 cents per unit at the time of our IPO to the current rate of 70 cents per unit.The

9、fundamentals of our business remain strong:Vacancy rates are decreasing in most of our core markets,while market rents are increasing.Our leasing velocity is increasing with 751,000 square feet of leasing completed in the fourth quarter,representing 35%of the total completed in 2013.We have complete

10、d over 1.1 million square feet of leasing with terms commencing in 2014,representing 53%of our 2014 expiries.New construction of competing multi-tenant industrial space remains limited in our core markets.In-place rents per square foot are approximately 6.4%below current estimated market rates,provi

11、ding opportunities for rent growth as our leases roll over.Economic fundamentals for the industries from which we draw our tenant base are stable or improving.Management remains focused on continuing to deliver solid operating performance,growth in funds from operations(“FFO”)and AFFO per unit and,u

12、ltimately,a strong and growing distribution for our unitholders.Specifically,we will continue to:Leverage and develop the strengths of our leasing,operations and finance teams;Manage our tenant renewal rate by continuing to solidify relationships with tenants;Enhance the speed and effectiveness with

13、 which we complete new leasing transactions;and Streamline our operations to keep an efficient cost structure.The work we have completed in 2013 provides us with a solid foundation to optimize our portfolio composition through capital recycling and redevelopment and intensification opportunities at

14、certain properties.We believe we are well positioned to opportunistically grow our portfolio leveraging our management platform as we move into the next phase of the Trusts development.In May,we will be introducing our new platform-wide branding and the renaming of our Trust to Dream Industrial REIT

15、.For a preview,please refer to the insert in the inside front cover of the printed annual report,or visit our website at .We are looking forward to continuing to execute on enhancing the strength of our business and we thank our unitholders for their continued support.Randy Cameron President and Chi

16、ef Executive Officer March 15,2014Letter to unitholders At-a-glanceAVERAGE TENANT SIzE(square feet)AVERAGE REMAINING LEASE TERM(years)OF NET OPERATING INCOME MuLTi-TenAnT PRoPeRTieSOCCUPANCyGROSS LEASAbLE AREA(millions of square feet)MARKET RENTS AbOVE in-PLACe RenTS11,900 4.7 67%95.7%15.7 6.4%Rent

17、Growth Potential Market rent/GLA In-place in-place rent Province(in 000 square feet)rent(%)Alberta 3,447$8.82 11.9%Nova Scotia 2,676$7.21 5.0%Ontario 4,825$6.07 0.8%Qubec 3,733$5.94 4.9%Saskatchewan 830$7.28 15.1%Other 152$7.00 2.4%Total 15,663$6.92 6.4%Building Type Diversification Market rent/Weig

18、hted GLA Average in-place rent averageType (in 000 square feet)tenant size (%)lease termMulti-tenant buildings 10,206 8,000 7.3%3.7Single-tenant buildings 5,457 82,400 4.2%6.5Total 15,663 11,900 6.4%4.7AFFO/Distributions(%payout ratio)$0.12$0.14$0.16$0.18$0.20Q4-13Q3-13Q2-13Q1-13Q4-12AFFODistributio

19、ns per unit91%PAYOUT(Q4 2013)Dundee Industrial REIT is an owner and operator of 15.7 million square feet of geographically diversified light industrial properties across Canada,with a property mix that provides both exposure to near-term rent growth opportunities for multi-tenant assets and lower ma

20、nagement costs for single-tenant assets.Geographic Diversification(%net operating income)INTEREST COVERAGE RATIOWEIGHTED AVERAGE DeBT MATuRiTy(years)2.9x4.128%ALBERTA27%ONTARIO19%QUBEC19%EASTERNCANADA6%SASKATCHEWAN1%BRITISH COLUMBIAPhotos(left to right,top to bottom):1421 rue Nobel,Sainte-Julie;2240

21、 Premier Way,Edmonton;10001 Metropolitan East,Montral;120 Troop Avenue,Halifax;650 rue Bergeron,Drummondville;3250 Sunridge Way,CalgaryBalanced Lease Expiries0.0%5.0%10.0%15.0%20.0%25.0%20182017201620152014Multi-TenantSingle-TenantTotal Table of contentsManagements discussion and analysis 1Managemen

22、ts responsibility for financial statements 35Independent auditors report 36Consolidated financial statements 37Notes to the consolidated financial statements 41Trustees and officers IBCCorporate information IBCPhotos(top to bottom):1400 Castlefield Avenue,Toronto;320 Wright Avenue,Halifax;970 Fraser

23、 Drive,Burlington 1 Managements discussion and analysis (All dollar amounts in our tables are presented in thousands of Canadian dollars,except rental rates,unit and per unit amounts)SECTION I OBJECTIVES AND FINANCIAL HIGHLIGHTS BASIS OF PRESENTATION Our discussion and analysis of the financial posi

24、tion and results of operations of Dundee Industrial Real Estate Investment Trust(“Dundee Industrial REIT”or“Dundee Industrial”or the“Trust”)should be read in conjunction with the audited consolidated financial statements of Dundee Industrial for the year ended December 31,2013.This managements discu

25、ssion and analysis(“MD&A”)is dated as at February 25,2014.The year ended December 31,2013 is the Trusts first full fiscal year since formation on July 20,2012 and commencing operations on October 4,2012.The results and operations of the Trust are therefore not directly comparable to the prior period

26、 ended December 31,2012 in part due to the time periods covered and in part due to the significant growth in the size of the Trust as described in the Investing activities section of the MD&A.As a result,the commentary in this document that compares the results of operations is focused primarily on

27、quarter-over-quarter changes,as year-over-year changes are explained by the time periods covered and growth in the portfolio.For simplicity,throughout this discussion,we may make reference to the following:“REIT Units”,meaning the REIT Units “LP B Units”and“subsidiary redeemable units”,meaning the L

28、P Class B Units “Units”,meaning REIT Units and LP B Units Certain information herein contains or incorporates comments that constitute forward-looking information within the meaning of applicable securities legislation.Forward-looking information is based on a number of assumptions and is subject to

29、 a number of risks and uncertainties,many of which are beyond the Trusts control,which could cause actual results to differ materially from those disclosed in or implied by such forward-looking information.These risks and uncertainties include,but are not limited to,general and local economic and bu

30、siness conditions;the financial condition of tenants;our ability to refinance maturing debt;leasing risks,including those associated with the ability to lease vacant space;our ability to source and complete accretive acquisitions;and interest rates.Although the forward-looking statements contained i

31、n this MD&A are based on what we believe are reasonable assumptions,there can be no assurance that actual results will be consistent with these forward-looking statements.Factors that could cause actual results to differ materially from those set forth in the forward-looking statements and informati

32、on include,but are not limited to,general economic conditions;local real estate conditions,including the development of properties in close proximity to the Trusts properties;timely leasing of vacant space and re-leasing of occupied space upon expiration;dependence on tenants financial condition;the

33、 uncertainties of acquisition activity;the ability to effectively integrate acquisitions;interest rates;availability of equity and debt financing;our continued compliance with the REIT exemption under the specified investment flow-through trust(“SIFT”)legislation;and other risks and factors describe

34、d from time to time in the documents filed by the Trust with securities regulators.All forward-looking information is as of February 25,2014.Dundee Industrial does not undertake to update any such forward-looking information whether as a result of new information,future events or otherwise.Additiona

35、l information about these assumptions,risks and uncertainties is contained in our filings with securities regulators.Certain filings are also available on our web site at .2 BACKGROUND Dundee Industrial REIT is an unincorporated,open-ended real estate investment trust that was formed to provide inve

36、stors with the opportunity to invest in a Canadian focused,pure-play industrial REIT.Dundee Industrial was founded on July 20,2012 by Dundee Real Estate Investment Trust(“Dundee REIT”),which had a retained investment of 22.8%at February 25,2014.Our REIT Units are listed on the Toronto Stock Exchange

37、 under the trading symbol DIR.UN.On October 4,2012,we completed our initial public offering(“IPO”),and acquired a portfolio of 77 industrial properties comprising 6.0 million square feet(the“Initial Properties”)from subsidiaries of Dundee REIT and affiliates of Return On Innovation Capital Ltd.(“ROI

38、”).Including the Initial Properties,we completed the following acquisitions since our IPO:Number of Acquired GLA Occupancy on Purchase Date acquired properties (sq.ft.)acquisition(%)price(1)Initial Properties October 4,2012 77 6,007,984 97$646,871 Lone Oak/Chrislea,GTA November 30,2012 2 172,823 100

39、 17,182 KingSett Portfolio December 19,2012 79 5,257,894 95 488,275 CanFirst Portfolio April 24,2013 22 1,625,844 96 155,650 C2C Portfolio May 15,2013 25 2,528,658 95 231,257 Lingard Road,Cambridge,ON June 7,2013 1 70,154 100 5,350 Total 206 15,663,357 96$1,544,585(1)Includes transaction costs.Discu

40、ssion of the acquisitions of the Initial Properties,Lone Oak and Chrislea,and the KingSett Portfolio can be found in the MD&A in the Trusts annual report for the period ended December 31,2012,which is available on our web site at or on SEDAR at .Discussion of the CanFirst and C2C Portfolio acquisiti

41、ons as well as the Lingard Road property can be found under the heading Investing activities.Cumulatively,the acquisitions have been financed through the issuance of approximately$726 million of Units and the assumption and/or issuance of$816 million of debt.At December 31,2013,we owned 206 light in

42、dustrial income-producing buildings totalling 15.7 million square feet of gross leasable area(“GLA”)located in primary and secondary markets in seven Canadian provinces.OUR OBJECTIVES We are committed to:Managing our business to provide growing cash flow and stable and sustainable returns,through ad

43、apting our strategy and tactics to changes in the real estate industry and the economy;Building and maintaining a diversified,growth-oriented portfolio of light industrial properties in major Canadian markets,based on an established platform;Providing predictable and sustainable cash distributions t

44、o unitholders while prudently managing distributions over time;and Maintaining a REIT that satisfies the REIT exception under the SIFT legislation in order to provide certainty to unitholders with respect to taxation of distributions.3 Distributions Effective April 30,2013,our annualized distributio

45、n rate increased to$0.70 per unit,or$0.058 per unit on a monthly basis,an increase of 2.5 cents from the original annualized distribution rate of$0.675,or$0.056 on a monthly basis.At December 31,2013,approximately 9.7%of our total Units were enrolled in the Distribution Reinvestment and Unit Purchas

46、e Plan(“DRIP”)(see a description of Our equity on page 19).December 31,September 30,June 30,March 31,December 31,2013 2013 2013 2013 2012 Annualized distribution rate$0.70$0.70$0.70$0.675$0.675 Monthly distribution rate$0.058$0.058$0.058$0.056$0.056 Period-end closing price$8.85$8.74$9.08$10.82$11.2

47、0 Annualized distribution yield on closing price(%)7.9%8.0%7.7%6.2%6.0%OUR STRATEGY Dundee Industrial REIT is a growth-oriented owner of income-producing light industrial properties across Canada providing stable and predictable distributions to unitholders on a tax-efficient basis.Our strategy is t

48、o grow our portfolio and the distributable income that it generates on a per unit basis,and to do so in a manner that minimizes risk.We will continue to review and modify our strategy to meet the ever changing real estate and economic conditions.Our strategy includes:Optimizing the performance,value

49、 and cash flow of our portfolio We actively manage our assets to optimize performance,maintain value,retain and attract tenants and maximize cash flows to our unitholders.Dundee Industrial REIT employs experienced staff in all markets where we are active.We strive to ensure that our assets are the m

50、ost attractive and cost-effective premises for our tenants.Maintaining and strengthening our conservative financial profile We operate our business in a disciplined manner with a strong focus on maintaining a conservative financial structure.We actively manage our mortgage maturity profile,maintain

51、a conservative debt ratio and generate cash flows sufficient to fund our distributions.Growing and diversifying our portfolio to reduce risk We seek to grow and diversify our portfolio to increase value on a per unit basis,further improve the sustainability of our distributions,strengthen our tenant

52、 profile and mitigate risk.We anticipate that growing our portfolio will also reduce our cost of capital,allowing us to both refinance existing mortgages at lower rates and increase our ability to competitively bid on acquisition opportunities.We have experience in each of Canadas key real estate ma

53、rkets and across all asset classes,which we believe will provide us with the flexibility to pursue acquisitions in whichever markets offer compelling investment opportunities.Seeking accretive growth opportunities Dundee Industrial REIT seeks to invest in desirable,highly functional properties locat

54、ed in major industrial centres that are well-leased on a long-term basis to quality tenants.When evaluating acquisitions we consider a variety of criteria,including per unit accretion,replacement cost of the asset,its functionality and appeal to future tenants,and how it complements our existing por

55、tfolio.4 OUR PROPERTIES Dundee Industrial REIT owns and manages high-quality light industrial properties located in primary and secondary markets across Canada.Today,our portfolio consists of 206 properties comprising 15.7 million square feet of GLA.Our properties are located in desirable business p

56、arks,situated close to highways,and generally considered functional and well suited for their respective markets.The occupancy rate across our portfolio is 95.7%.Our occupancy rate includes lease commitments totalling approximately 208,000 square feet for space that is currently being readied for oc

57、cupancy but for which rent is not yet being recognized.Rent recognition on approximately 63%of this space is expected to commence in the first quarter of 2014 and 24%in the second quarter of 2014,with the remaining commencing in the second half of 2014.Our properties are geographically diversified a

58、s follows:December 31,2013 December 31,2012 Number of Owned GLA%of owned Number of Owned GLA%of owned Province properties(sq.ft.)GLA properties(sq.ft.)GLA British Columbia 1 17,405 0.1 1 17,405 0.2 Alberta 69 3,447,114 22.0 67 3,277,555 28.6 Saskatchewan 6 830,085 5.3 6 829,815 7.3 Ontario 58 4,825,

59、231 30.8 25 1,917,401 16.8 Qubec 33 3,732,891 23.8 28 3,204,516 27.9 New Brunswick 2 134,704 0.9 2 134,704 1.2 Nova Scotia 37 2,675,927 17.1 29 2,056,799 18.0 Total 206 15,663,357 100.0 158 11,438,195 100.0 Our portfolio consists of multi-tenant buildings totalling 10.2 million square feet,or compri

60、sing 65.0%of total GLA,and single-tenant buildings totalling 5.5 million square feet,or 35.0%of total GLA.Of the 5.5 million square feet of single-tenant space,4.8 million is located in Ontario and Qubec.Multi-tenant space is distributed more evenly throughout the provinces in the portfolio,with a r

61、elatively higher concentration of 3.9 million square feet in Alberta and Saskatchewan.The differences between single-and multi-tenant buildings can be seen in the following operating metrics:Average tenant size single tenants typically occupy significantly more space on an individual basis than thos

62、e tenants in multi-tenant buildings;Average lease term single tenants typically have lease terms that are significantly longer than in multi-tenant buildings,which tends to offset the concentration risk of having a large single tenant in a building;and Average in-place rents per square foot which ar

63、e typically moderately higher in multi-tenant buildings.Multi-tenant buildings with shorter lease terms allow a landlord to bring rents to market rates on a more regular basis,thereby taking advantage of supply-constrained market conditions.Small bay multi-tenant buildings tend to have higher constr

64、uction costs and tend to be located in denser urban markets,which increases the barriers to competition from new supply.Selective ownership of single-tenant buildings provides a source of stable cash flow with relatively less management effort required.In addition to the geographic distribution,main

65、taining a balance of the two building types in the portfolio is part of our diversification strategy.5 KEY PERFORMANCE INDICATORS Performance is measured by these and other key indicators:Three Three Period from months ended months ended Year ended July 20,2012 to December 31,September 30,December 3

66、1,December 31,2013 2013 2013 2012 Operations Occupancy rate(period-end)95.7%95.1%96.3%Average in-place base rent per sq.ft.(period-end)$6.92$6.89$7.12 Weighted average remaining lease term 4.7 4.8 5.4 Operating results Investment properties revenue$41,149$37,842$142,944$17,202 Net operating income(“

67、NOI”)(1)(2)27,060 27,221 98,927 12,535 Funds from operations(“FFO”)(1)(3)16,859 17,126 61,550 8,452 Adjusted funds from operations(“AFFO”)(1)(4)13,630 13,729 49,164 6,492 Fair value(decrease)increase to investment properties (1,308)1,599 1,151 6,048 Distributions Declared distributions$12,450$12,430

68、$46,250$6,846 Distributions paid in cash 11,247 11,460 43,033 4,171 DRIP participation rate 9.7%7.8%7.0%39.0%Financing Weighted average effective interest rate on debt(period-end)3.84%3.83%3.72%Weighted average face interest rate on debt(period-end)4.18%4.18%4.19%Weighted average remaining term to m

69、aturity of debt (period-end)(years)4.1 4.4 4.1 Interest coverage ratio(5)2.9 times 2.9 times 2.9 times 3.0 times Per unit amounts(6)Distribution rate$0.17$0.17$0.69$0.16 Basic:FFO(1)0.24 0.24 0.93 0.22 AFFO(1)(7)0.19 0.19 0.74 0.17 Diluted FFO(1)0.23 0.24 0.91 0.21 Payout ratio(%)(8)FFO 70.8%70.8%74

70、.2%72.7%AFFO 89.5%89.5%93.2%94.1%(1)NOI,FFO and AFFO(non-GAAP measures)are key measures of performance used by real estate operating companies;however,they are not defined by IFRS,and do not have standard meanings and may not be comparable with other industries or income trusts.(2)NOI(non-GAAP measu

71、re)is defined as net rental income.The reconciliation of NOI to net rental income can be found on page 23.(3)FFO(non-GAAP measure)The reconciliation of FFO to net income can be found on page 25.(4)AFFO(non-GAAP measure)The reconciliation of AFFO to cash generated from operating activities can be fou

72、nd on page 26.(5)Interest coverage ratio(non-GAAP measure)The calculation of the interest coverage ratio is included in the“Non-GAAP measures”section of the MD&A.(6)A description of the determination of basic and diluted amounts per unit can be found on page 30.(7)AFFO per unit is shown on a basic b

73、asis only,as the convertible debentures are anti-dilutive to AFFO.(8)Payout ratio for FFO and AFFO are calculated as the ratio of distribution rate to basic FFO and AFFO per unit,respectively.6 FINANCIAL OVERVIEW We have completed our first full fiscal year of operations since our IPO,during which o

74、ur portfolio increased from 11.4 million square feet in December 2012 to 15.7 million square feet in December 2013.AFFO and FFO per unit for the year were 74 cents and 93 cents,respectively,which represents approximately 9%and 6%growth over annualized fourth quarter 2012 results.This growth was acco

75、mplished while increasing the diversification and quality of our portfolio and maintaining a conservative and stable capital structure.AFFO for the fourth quarter of 2013 was consistent with the third quarter on a per unit basis at 19 cents or$13.6 million in total.AFFO for the fourth quarter increa

76、sed to 19 cents per unit,up 12%compared to the same period in the prior year,reflecting the impact of accretive acquisitions completed in 2013 and 2012 as well as growth in comparative property NOI.Occupancy of the portfolio increased from 95.1%at the end of Q3 2013 to 95.7%.This reflects the effort

77、s of our leasing team in renewing 70%of our expiring tenancies and securing new tenancies,together totalling 696,000 square feet of leasing activity,as well as a net increase in future commitments of 55,000 square feet.The improving outlook for our leasing velocity reflects the increasing depth of o

78、ur leasing team and strengthening tenant relationships,as well as the improving fundamentals in many of our key markets.In-place rent was$6.92 per square foot compared to$6.89 at September 30,2013,which we estimate is approximately$0.44 or 6.4%below the current rental market rates.The multi-tenant n

79、ature of two-thirds of our portfolio and its associated relatively short weighted average lease term of 3.7 years provides the Trust with a good opportunity for rent growth in the short to medium term.Our portfolio size was stable in the quarter at 15.7 million square feet,with total investment prop

80、erties of$1.5 billion at fair value,reflecting a weighted average capitalization rate of 6.73%on stabilized net operating income,which is stable compared to September 30,2013.Financing metrics remained stable during the quarter with secured debt comprising 44.4%of total assets excluding convertible

81、debentures.Our leverage stood at 52.6%at December 31,2013,including the convertible debentures.The weighted average remaining term on our debt was 4.1 years and the weighted average face interest rate on our debt was 4.2%,which is modestly higher than what we are currently seeing in the market for c

82、omparable mortgage debt.Subsequent to year-end,on February 24,2014,the Trust completed a$56 million refinancing of maturing mortgages on a portfolio of eight of its properties in Halifax(“the Halifax Portfolio Refinancing”).Net proceeds after repayment of the existing mortgage amounted to$21 million

83、,which were used to repay other maturing mortgages and the outstanding balance on the demand revolving credit facility.The interest rate was fixed at 3.31%for a term of five years.As a result of the repayment of mortgages subsequent to year-end,our unencumbered assets grew by$16 million to$138 milli

84、on from$122 million at year-end.Overall,the Trust has performed in line with managements expectations for the quarter and year.7 OUTLOOK Market fundamentals are continuing to improve for industrial real estate in most of our major markets.The GTA,Alberta and Saskatchewan markets are especially suppl

85、y-constrained for smaller bay multi-tenant assets.We expect this will translate into continued market rent growth and strong leasing volumes.The fourth quarter of 2013 was our strongest quarter yet on the leasing front,with over 750,000 square feet of new and renewal leasing.In 2014,we will be focus

86、ed on:Continuing to enhance our operations and strengthen our relationships with tenants;Exploring value-add intensification opportunities within our existing portfolio;and Recycling capital from non-core assets into assets that meet our investment criteria and enhance the quality of our portfolio.W

87、e are expecting to have continued success in growing our AFFO and enhancing the quality and stability of our cash flows in 2014.8 SECTION II EXECUTING THE STRATEGY OUR OPERATIONS The following key performance indicators related to our operations influence the cash generated from operating activities

88、.December 31,2013 December 31,2012 Multi-tenant Single-tenant Multi-tenant Single-tenant Performance indicators buildings buildings Total buildings buildings Total Occupancy rate 94.6%97.9%95.7%94.5%99.0%96.3%Average in-place base rental rates(per sq.ft.)$7.14$6.53$6.92$7.24$6.94$7.12 Tenant maturit

89、y profile average term to maturity(years)3.7 6.5 4.7 3.6 8.0 5.4 Owned GLA(in millions of sq.ft.)10.2 5.5 15.7 7.0 4.4 11.4 Occupancy At December 31,2013,the overall percentage of occupied and committed space across our portfolio remained high at 95.7%,which was 0.6%higher than occupancy at Septembe

90、r 30,2013 and 0.6%lower than occupancy at December 31,2012.December 31,September 30,December 31,(percentage)2013 2013 2012 Western Canada 96.7 94.7 95.8 Central Canada 96.1 95.6 97.3 Eastern Canada 93.0 94.2 94.8 Total 95.7 95.1 96.3 Portfolio size(millions of sq.ft.)15.7 15.7 11.4 Our leasing volum

91、es have increased significantly over the past quarter,as reflected in our 0.6%increase in occupied and committed space since September 30,2013.This positive trend has been highlighted by continued strength in the Ontario and Alberta markets.Vacancy schedule During the quarter,vacancy decreased by ap

92、proximately 43,000 square feet.Leasing activity included approximately 447,000 square feet of renewals,approximately 249,000 square feet of new leases and a net increase in space committed for future occupancy of 55,000 square feet.Three months ended%of total Year ended%of total(in sq.ft.)December 3

93、1,2013 GLA December 31,2013 GLA Available for lease 766,732 4.9 427,806 3.7 Vacancy committed for future occupancy 153,139 1.0 83,687 0.7 Vacant space at beginning of period 919,871 5.9 511,493 4.5 Acquired vacancy -200,676 1.3 Vacant space reflecting acquisitions 919,871 5.9 712,169 4.5 Remeasureme

94、nts 839 -5,898 -Expiries 640,861 4.1 1,999,899 12.8 Early terminations and bankruptcies 11,431 0.1 170,196 1.1 New leases (249,470)(1.6)(609,538)(3.9)Renewals (446,528)(2.9)(1,401,620)(8.9)Vacant space December 31,2013 877,004 5.6 877,004 5.6 Vacancy committed for future occupancy 208,261 1.3 208,26

95、1 1.3 Available for lease December 31,2013 668,743 4.3 668,743 4.3 9 The committed occupancy at December 31,2013 totalled 208,000 square feet.Of this committed space,132,000 square feet is expected to commence prior to March 31,2014.By December 31,2014,all 208,000 square feet of currently committed

96、space is expected to be generating revenue.In-place rental rates At December 31,2013,estimated current market rents were 6.4%higher than portfolio average in-place base rents,presenting us with the opportunity to capture gains when space is renewed or newly leased.While market rents remained consist

97、ent with September 30,2013,our average in-place rents increased,reflecting our ability to capture these market rents as our leases expire.December 31,2013 September 30,2013 December 31,2012 Average Market rent/Average Market rent/Average Market rent/in-place Market in-place rent in-place Market in-p

98、lace rent in-place Market in-place rent Total portfolio base rent rent(1)(%)base rent rent(%)base rent rent(2)(%)Western Canada$8.60$9.66 12.3$8.54$9.72 13.8$8.40$9.37 11.6 Central Canada 6.01 6.16 2.5 6.03 6.17 2.3 6.21 6.24 0.5 Eastern Canada 7.11 7.45 4.8 7.04 7.44 5.7 6.87 7.34 6.8 Total$6.92$7.

99、36 6.4$6.89$7.36 6.8$7.12$7.57 6.3(1)Estimate only;based on current market rents with no allowance for increases in future years.Subject to changes in market condition in each market.(2)Comparative figures have been restated to conform with the current period presentation.Leasing and tenant profile

100、The average remaining lease term and other portfolio information are detailed in the following table.Overall,our average remaining lease term is 4.7 years and our average tenant size is 12,000 square feet.Our single-tenant buildings have an average remaining lease term of 6.5 years and our multi-ten

101、ant buildings have an average remaining lease term of 3.7 years.The weighted average lease term of our top ten tenants,weighted by annualized base rent,is 8.2 years.December 31,2013 September 30,2013 December 31,2012 Average Average Average Average Average Average remaining Average in-place remainin

102、g Average in-place remaining Average in-place lease term tenant size base rent lease term tenant size base rent lease term tenant size base rent (years)(sq.ft.)(per sq.ft.)(years)(sq.ft.)(per sq.ft.)(years)(sq.ft.)(per sq.ft.)Western Canada 4.32 8,830$8.60 4.36 8,604$8.54 3.88 8,611$8.40 Central Can

103、ada 5.22 20,771 6.01 5.31 21,035 6.03 7.33 30,748 6.21 Eastern Canada 3.54 6,569 7.11 3.68 6,521 7.04 3.72 6,237 6.87 Total 4.68 11,855$6.92 4.76 11,748$6.89 5.41 11,541$7.12 10 The following table details our lease maturity profile by region at December 31,2013.The table distinguishes between lease

104、 maturities that have yet to be renewed or re-leased and maturities for which we have leasing commitments.The uncommitted line should be referenced when considering future leasing risks or opportunities,and the committed line should be referenced when considering the impact of leasing activity.In 20

105、14,2,152,000 square feet will expire,of which 633,000 square feet,or 29%,has already been committed for future occupancy.Our current maturity profile is well balanced with 14%of leases expiring in 2014,15%expiring in 2015 and 14%expiring in 2016.Current Current monthly 2019 to (in sq.ft.)vacancy ten

106、ancies 2014 2015 2016 2017 2018 2027 Total Western Canada Uncommitted 139,814 -549,077 550,067 574,335 565,549 472,329 1,024,596 3,875,767 Committed -211,537 133,668 1,278 43,854 28,500 -418,837 Total Western Canada 139,814 -760,614 683,735 575,613 609,403 500,829 1,024,596 4,294,604 Central Canada

107、Uncommitted 332,935 -557,968 1,110,614 1,031,919 954,672 976,020 3,127,341 8,091,469 Committed -383,363 20,047 63,243 -466,653 Total Central Canada 332,935 -941,331 1,130,661 1,095,162 954,672 976,020 3,127,341 8,558,122 Eastern Canada Uncommitted 195,994 7,989 411,960 457,010 539,959 260,563 280,28

108、3 552,571 2,706,329 Committed -38,067 18,461 -2,685 45,089 104,302 Total Eastern Canada 195,994 7,989 450,027 475,471 539,959 260,563 282,968 597,660 2,810,631 Total uncommitted 668,743 7,989 1,519,005 2,117,691 2,146,213 1,780,784 1,728,632 4,704,508 14,673,565 Total committed -632,967 172,176 64,5

109、21 43,854 31,185 45,089 989,792 Total 668,743 7,989 2,151,972 2,289,867 2,210,734 1,824,638 1,759,817 4,749,597 15,663,357 The following table details expiring rents across our portfolio as well as our estimate of average market rents based on current leasing activity in similar properties at Decemb

110、er 31,2013.Expiring rents and market rents represent base rates and do not include the impact of lease incentives.Currently,2014 estimated market rents are 5.2%above expiring rents and estimated 2015 market rents are 5.5%above expiring rents,representing an opportunity to increase rents as space is

111、re-leased.Current monthly (per sq.ft.)tenancies 2014 2015 2016 2017 2018 Expiring rents(1)Western Canada$-$8.70$9.13$8.00$9.64$10.67 Central Canada -6.37 5.86 5.50 6.07 6.11 Eastern Canada 2.29 6.69 6.55 7.35 7.59 8.20 Portfolio average$2.29$7.30$6.86$6.63$7.42$7.69 Market rents(2)Western Canada$-$9

112、.34$10.50$9.10$10.08$10.82 Central Canada -6.41 5.75 5.72 6.13 6.11 Eastern Canada 6.89 7.20 6.93 7.61 7.63 7.83 Market rent average$6.89$7.68$7.24$7.10$7.61$7.68 (1)Expiring rents include the effects of contractual rent steps built into tenant leases.(2)Estimate only;based on current market rents w

113、ith no allowance for increases in future years.Subject to changes in market conditions in each market.11 Initial direct leasing costs and lease incentives Initial direct leasing costs include leasing fees and related costs,broker commissions,and internal leasing costs related to negotiating and arra

114、nging tenant leases.Lease incentives include costs incurred to make leasehold improvements to tenant spaces and cash allowances.Initial direct leasing costs and lease incentives are dependent upon asset type,lease terminations and expiries,the mix of new leasing activity compared to renewals,portfol

115、io growth and general market conditions.Short-term leases generally have lower costs than long-term leases.During the year ended December 31,2013,a total of 2,011,000 square feet was leased and occupied with related costs of$6.7 million,representing an average rate of$3.31 per square foot leased.Per

116、formance indicators Total Operating activities Portfolio size(sq.ft.)15,663,357 Occupied and committed 95.7%Square footage leased and occupied in 2013 2,011,158 Lease incentives and initial direct leasing costs for square footage leased and occupied in 2013$6,653 Tenant base profile Our tenant base

117、consists of a diverse range of high-quality businesses and,with 1,266 tenants,we believe our exposure to any single large lease or tenant is low.The average size of our tenants is 12,000 square feet,averaging 82,000 square feet across our single-tenant buildings and 8,000 square feet across our mult

118、i-tenant buildings.The following table outlines the contributions of our top ten tenants to our rental revenue.Gross annualized Weighted average Owned area Owned area base rent remaining lease term Tenant (sq.ft.)(%)(%)(years)Spectra/Premium Industries Inc.642,368 4.1 4.1 11.4 TC Transcontinental 52

119、3,345 3.3 3.6 8.3 Molson Breweries 225,000 1.4 2.4 9.0 The Brick 327,000 2.1 2.3 10.4 Royal Group 346,035 2.2 1.9 4.0 Clean Harbors Industrial 99,432 0.6 1.7 4.8 United Agri Products Canada Inc.275,335 1.8 1.4 9.8 Nellson Nutraceutical 210,710 1.3 1.3 5.8 Array Canada Inc.209,754 1.3 1.2 7.0 McKesso

120、n Canada Corporation 181,000 1.2 0.9 4.0 Total 3,039,979 19.3 20.8 8.2 On an annualized base rent basis,no single tenant represents more than 5%of total revenue of the portfolio,and the weighted average remaining lease term stands strong at 8.2 years.12 OUR RESOURCES AND FINANCIAL CONDITION Investme

121、nt properties At December 31,2013,the fair value of our investment property portfolio was$1.5 billion,reflecting a weighted average capitalization rate(“cap rate”)of 6.73%on stabilized NOI,excluding property management income.Fair values were determined using the direct capitalization method and/or

122、the discounted cash flow method.The direct capitalization method applies a cap rate to stabilized NOI and incorporates allowances for vacancy and management fees.The resulting capitalized value is further adjusted for extraordinary costs to stabilize income and non-recoverable capital expenditures,w

123、here applicable.Individual properties were valued using cap rates in the range of 6.00%to 8.75%.The discounted cash flow method discounts the expected future cash flows,generally over a term of ten years,and uses discount rates and terminal capitalization rates specific to each property.The fair val

124、ue of our investment properties excluding land is set out below.Total portfolio December 31,September 30,December 31,2013 2013 2012 Western Canada$561,442$558,241$523,683 Central Canada 706,898 706,403 425,017 Eastern Canada 271,429 270,459 198,710 Total$1,539,769$1,535,103$1,147,410 The key valuati

125、on metrics for investment properties are set out in the table below:Capitalization rates Total portfolio December 31,2013 September 30,2013 December 31,2012 Range(%)Weighted average(%)Range(%)Weighted average(%)Range(%)Weighted average(%)Western Canada 6.00 8.25 6.48 6.00 8.25 6.48 5.85 8.25 6.52 Ce

126、ntral Canada 6.00 8.75 6.83 6.00 8.75 6.83 6.03 8.75 7.02 Eastern Canada 6.50 7.75 7.01 6.50 7.75 7.01 6.03 8.50 7.07 Total 6.00 8.75 6.73 6.00 8.75 6.73 5.85 8.75 6.80 Investing activities The following acquisitions were completed during the year ended December 31,2013:Purchase price Interest Acqui

127、red Occupancy allocated to acquired GLA on acquisition investment (%)(sq.ft.)(1)(%)properties(2)Date acquired CanFirst Portfolio 100 1,625,844 96$155,650 April 24,2013 C2C Portfolio(3)100 2,528,658 95 231,257 May 15,2013 Lingard Road,Cambridge,ON 100 70,154 100 5,350 June 7,2013 Total 100 4,224,656

128、95$392,257 (1)Remeasured GLA as at December 31,2013.(2)Includes transaction costs.(3)The Trust acquired approximately 95%ownership of C2C on May 15,2013 and acquired the remaining 5%on July 19,2013.13 Dundee Industrial REIT seeks to invest in highly functional properties located in major industrial

129、centres that are well leased on a long-term basis to quality tenants.When evaluating acquisition opportunities,we consider a variety of criteria,including per unit accretion;replacement cost of the asset,its functionality and appeal to future tenants;and how the asset complements our existing portfo

130、lio.On April 24,2013,we acquired a portfolio of 22 properties(“CanFirst Portfolio”)comprising 1.6 million square feet of gross leasable area located across the GTA in key industrial markets and situated along major transportation corridors providing direct highway access.The total purchase price was

131、$151.5 million before transaction costs.The acquisition was funded by assumed debt with a fair value of$62.0 million with an average term of 1.9 years,with the balance funded by cash from the equity issue that closed on March 6,2013.The effective interest rate on the assumed debt is approximately 3.

132、09%after giving effect to the vendors buy-down of existing rates.In addition,on May 15,2013,we acquired approximately 95%of the outstanding common shares of C2C Industrial Properties Inc.(“C2C”,or the“C2C Portfolio”)in exchange for Units of Dundee Industrial.The C2C Portfolio comprises 2.5 million s

133、quare feet of GLA located primarily in Halifax,Edmonton,the Greater Toronto Area and the Greater Montreal Area.As part of this transaction,we have assumed mortgages with a fair value of$115.6 million with an average term of 4.6 years and convertible debentures with a fair value of$21.6 million at 6.

134、75%face rate with 4.4 years to maturity.Subsequent to the announcement,but prior to closing,a tenant occupying 39,000 square feet negotiated the early termination of the lease,with the payment of a$150,000 lease termination fee,which is reflected in the purchase price allocation of C2C assets.The fo

135、llowing acquisitions were completed during the period from July 20,2012 to December 31,2012:Purchase price Interest Acquired Occupancy allocated to acquired GLA on acquisition investment (%)(sq.ft.)(2)(%)properties(3)Date acquired Initial Properties(1)100 6,007,984 97$646,871 October 4,2012 Lone Oak

136、/Chrislea 100 172,823 100 17,182 November 30,2012 KingSett Portfolio 100 5,257,894 95 488,275 December 19,2012 Total 100 11,438,701 96$1,152,328 (1)Acquired all properties at 100%except for one property that was acquired at 50%.(2)Remeasured GLA as at December 31,2013.(3)Includes transaction costs.T

137、he Initial Properties portfolio included an attractive mix of flex,warehouse and distribution,and light manufacturing assets.The Initial Properties were well leased and well tenanted at the time of acquisition,provided us with immediate scale and presence in established industrial markets across the

138、 country and provided a strong platform for organic growth as well as for future acquisitions.The KingSett Portfolio broadened the geographic diversity of our portfolio and also provided additional scale in the Greater Toronto and Greater Montreal Areas,as well as significant scale in Calgary and Ha

139、lifax,two attractive markets where investment product is very tightly held.In keeping with the Initial Portfolio,these assets are highly appealing to tenants,they are well-located within markets that we know and we believe that they will continue to enjoy high occupancy and increasing net operating

140、income.14 Building improvements and leasing costs The table below represents costs incurred towards building improvement and leasing costs during the year ended December 31,2013 and for the period from July 20,2012 to December 31,2012.Period from Year ended July 20,2012 to December 31,December 31,20

141、13 2012 Building improvements:Recoverable capital expenditures$2,035$-Other capital expenditures 180 -Initial leasing costs and lease incentives:Leasing costs 4,748 -Landlords work 1,590 83 Tenant improvements 2,512 479 Total$11,065$562 During the year,building improvements and leasing costs were pr

142、oportionately higher than our longer-term expectations due to:$0.7 million incurred to convert a single-tenant building to multi-tenant use,including the subsequent lease up;$0.6 million of costs related to recent acquisitions to reposition certain spaces in the portfolio to our standards;A relative

143、ly high level of external leasing costs relative to the portfolio size due to staffing up throughout of the year;Higher than normal tenant turnover as we absorbed the new portfolios;and Specific management decisions to offer incentives to brokers and tenants to lease up vacant spaces in a short peri

144、od of time.The majority of these costs were identified as part of our underwriting at the time of acquiring the portfolios.15 OUR FINANCING Liquidity and capital resources Dundee Industrials primary sources of capital are cash generated from operating activities,credit facilities,mortgage financing

145、and refinancing,and equity and debt issues.Our primary uses of capital include the payment of distributions,costs of attracting and retaining tenants,recurring property maintenance,major property improvements,debt principal repayments,interest payments and property acquisitions.We expect to meet all

146、 of our ongoing obligations with current cash and cash equivalents,cash flows generated from operations,conventional mortgage refinancings and,as growth requires and when appropriate,new equity or debt issues.Financing activities Our debt strategy includes managing our maturity schedule to help miti

147、gate interest rate risk and limit exposure in any given year,as well as fixing the rates and extending loan terms as long as possible when interest rates are favourable.Debt The key performance indicators in the management of our capital are as follows:December 31,2013 December 31,2012 Financing act

148、ivities Debt$840,382$649,845 Average effective interest rate(1)3.84%3.72%Average face interest rate 4.18%4.19%Level of debt(debt-to-total assets)(2)52.6%54.2%Interest coverage ratio(3)2.9 3.0 Maximum proportion of debt maturities due in any one year 17.1%(2015)18.2%(2019)Debt average term to maturit

149、y(years)4.1 4.1 Variable rate debt as percentage of total debt 1.4%6.5%(1)Average effective interest rate is calculated as the weighted average interest rate of all interest bearing debt including issue costs and mark-to-market adjustments.(2)Level of debt(non-GAAP measure)is determined as total deb

150、t before deferred financing costs and mark-to-market adjustments,divided by total assets.The calculation for level of debt can be found under the section Non-GAAP measures.(3)The interest coverage ratio(non-GAAP measure)for the year ended December 31,2013 and for the period ended December 31,2012 is

151、 calculated as net rental income plus interest and fee income,less general and administrative expenses,plus deferred unit compensation expense,all divided by interest expense on debt excluding deferred financing and mark-to-market adjustments.Please see the section Non-GAAP measures for the detailed

152、 calculation of interest coverage ratio.We currently use cash flow performance and debt level indicators to assess our ability to meet our financing obligations.Our current interest coverage ratio is 2.9 times,demonstrating our ability to more than adequately cover interest expense requirements.At D

153、ecember 31,2013,our weighted average face rate of interest is 4.18%and,after accounting for market adjustments and financing costs,the weighted average effective interest rate for outstanding debt is 3.84%.At December 31,2013,$11.3 million(December 31,2012$10.0 million)was drawn on our revolving cre

154、dit facility.The outstanding balance on the credit facility at year-end primarily resulted from a decision to not refinance certain mortgage maturities and repayments in 2013.Management was in the process of obtaining a commitment on the Halifax Portfolio Refinancing which ultimately generated$21.0

155、million in net proceeds,negating the need to refinance these smaller mortgages.The assets that were not refinanced increased our unencumbered assets pool by$10.2 million in the quarter to$122.2 million at year-end.This unencumbered assets pool provides the Trust with additional financing flexibility

156、 and we intend to continue to work to grow this pool as we refinance maturing debt.At December 31,2012,a$32.5 million variable rate bridge loan had been used to acquire the KingSett Portfolio and$10.0 million was drawn on our revolving credit facility.As a result,variable rate debt as a percentage o

157、f total debt as at December 31,2012 was 6.5%.In January 2013,$50.0 million in mortgage financing was secured for a term of seven years at a fixed face interest rate of 3.68%,which was used to repay our variable rate bridge loan facility and the$10.0 million drawn on the revolving credit facility.16

158、December 31,2013 December 31,2012 Fixed Variable Total Fixed Variable Total Mortgages$703,502$-$703,502$462,359$-$462,359 Promissory note payable -42,000 -42,000 Demand revolving credit facility -12,114 12,114 -10,000 10,000 Unsecured non-revolving bridge facility -32,394 32,394 Convertible debentur

159、es 124,766 -124,766 103,092 -103,092 Total$828,268$12,114$840,382$607,451$42,394$649,845 Percentage 98.6%1.4%100.0%93.5%6.5%100.0%Mortgages payable are recorded net of$10.9 million of fair value adjustments upon initial recognition and$1.2 million of financing costs.At December 31,2013,amounts recor

160、ded for the convertible debentures are net of a$2.6 million discount allocated to their conversion features on issuance and net of financing costs of$3.3 million.The fair value adjustments,discounts and financing costs are amortized to interest expense over the term to maturity of the related debt u

161、sing the effective interest rate method.Debt financing activities New and assumed mortgages are highlighted in the table below.Three months ended December 31,2013 Year ended December 31,2013 Weighted Weighted Average Weighted average Average Weighted average term to average effective term to average

162、 effective maturity interest rate interest rate maturity interest rate interest rate Amount(years)(%)(%)Amount(years)(%)(%)New mortgages$-$113,106 8.0 3.8 4.0 New mortgages assumed on investment property acquisition and business combination -175,425 3.8 3.7 3.3 Overall$-$288,531 5.4 3.7 3.6 We close

163、d a seven-year$50.0 million term mortgage at an interest rate of 3.68%in January 2013,the proceeds of which were used to repay the$32.5 million bridge facility bearing interest at 3.48%related to the KingSett Portfolio acquisition.Additionally,we closed on a ten-year$48.6 million term mortgage at a

164、face interest rate of 3.95%in January 2013,the proceeds of which were used to repay the$42.0 million promissory note due to Dundee REIT.As part of the acquisition of the CanFirst Portfolio on April 24,2013,we assumed$62.0 million in mortgages,which includes fair value adjustments of$0.1 million.In a

165、ddition,as part of the acquisition of C2C on May 15,2013,we assumed$115.6 million in mortgages,which includes fair value adjustments of$2.1 million.We also repaid a$7.1 million variable rate mortgage assumed as part of the C2C acquisition on June 19,2013.No prepayment penalties were incurred on the

166、repayment of this mortgage.In September 2013,we refinanced two mortgages in aggregate for$14.5 million for a term of five years at an interest rate of 3.84%,the proceeds of which were used to repay another mortgage for$6.9 million,which was carried at an interest rate of 5.80%.On October 31,2013,we

167、repaid a$1.3 million variable rate mortgage.We also repaid at maturity a$2.8 million mortgage,which was carried at an interest rate of 3.0%.17 Demand revolving credit facility On October 4,2012,we entered into a$35.0 million demand revolving credit facility with a Canadian chartered bank.Draws under

168、 the revolving credit facility are in the form of one-month bankers acceptances(“BAs”)bearing interest at the BA rate plus 1.90%or at the banks prime rate(3.0%at December 31,2013)plus 0.90%at the Trusts option.On December 19,2012,the Trust increased the available capacity under the demand revolving

169、credit facility to$50.0 million,to coincide with the acquisition of the KingSett Portfolio,while all other terms of the facility remained unchanged.At December 31,2013,15 properties were secured as first-ranking mortgages on the facility,and$11.3 million was drawn on the facility.As of December 31,2

170、013,the Trust has outstanding letters of credit totalling$0.5 million issued by the bank under the facility to secure the Trusts obligations under certain contractual arrangements.Based upon the security provided,the amount available to draw under this facility as at December 31,2013 is$37.5 million

171、.The facility expires on October 4,2014.The outstanding balance on the demand revolving credit facility was paid off on February 25,2014 using the net proceeds from the Halifax Portfolio Refinancing.Changes in debt levels are as follows:Three months ended December 31,2013 Demand revolving Convertibl

172、e Mortgages credit facility debentures Total Debt as at September 30,2013$713,561$-$124,590$838,151 New debt placed -12,114 -12,114 Scheduled repayments (5,194)-(5,194)Lump sum repayments (4,051)-(4,051)Other adjustments(1)(814)-176 (638)Debt as at December 31,2013$703,502$12,114$124,766$840,382(1)O

173、ther adjustments include amortization of finance costs and fair value adjustments.Year ended December 31,2013 Promissory Demand Unsecured notes revolving non-revolving Convertible Mortgages payable credit facility bridge facility debentures Total Debt as at December 31,2012$462,359$42,000$10,000$32,

174、394$103,092$649,845 New debt assumed on investment property acquisition and business combination 175,425 -20,125 195,550 New debt placed 113,106 -12,114 -125,220 Scheduled repayments (18,163)-(18,163)Lump sum repayments(1)(26,909)(42,000)(10,000)(32,500)(705)(112,114)Other adjustments(2)(2,316)-106

175、2,254 44 Debt as at December 31,2013$703,502$-$12,114$-$124,766$840,382(1)Lump sum repayments include the tender of the 6.75%Debentures in connection with the offer to purchase that expired on June 26,2013.(2)Other adjustments include finance costs on new debt placed,fair value adjustments,write-off

176、 of fair value adjustments on debt lump sum repayments and amortization of finance costs and fair value adjustments.18 Our current debt profile is balanced with maturities well-distributed over the next nine years.The following is our debt maturity profile as at December 31,2013:Weighted Weighted Sc

177、heduled average effective average principal interest rate on face rate on Debt repayments on balance due balance due maturities non-maturing debt Amount%at maturity(%)at maturity(%)2014$90,022$19,674$109,696 13.11 3.11 3.82 2015 126,625 17,178 143,803 17.19 3.07 3.66 2016 93,270 13,634 106,904 12.78

178、 3.19 4.26 2017 101,479 10,879 112,358 13.43 3.89 4.50 2018 80,709 6,631 87,340 10.44 3.62 3.36 2019 and thereafter 258,993 17,538 276,531 33.05 4.81 4.69 Total$751,098$85,534$836,632 100.00 3.86 4.19 Financing costs (4,547)Fair value adjustments 8,297 Total$840,382 Convertible debentures The total

179、principal amounts outstanding for all of the convertible debentures are as follows:Outstanding Outstanding REIT Units principal principal if converted Conversion December 31,February 25,February 25,Date issued Maturity date price 2013 2014 2014 5.25%Debentures December 13,2012 December 31,2019$13.80

180、$86,250$86,250 6,250,000 5.25%Debentures December 19,2012 December 31,2019 13.80 25,000 25,000 1,811,594 6.75%Debentures May 15,2013(1)November 30,2017 12.37 19,420 19,420 1,569,346 Total$130,670$130,670 9,630,940(1)The 6.75%Debentures were assumed as part of the C2C acquisition on May 15,2013.The f

181、air value of the conversion feature of the convertible debentures is remeasured each period,with changes in fair value being recorded in comprehensive income(loss).At December 31,2013,the conversion feature amounted to$1.0 million(December 31,2012$6.2 million)and was included in non-current liabilit

182、ies on the consolidated balance sheet.Commitments and contingencies We are contingently liable with respect to guarantees that are issued in the normal course of business and with respect to litigation and claims that may arise from time to time.In the opinion of management,any liability that may ar

183、ise from such contingencies would not have a material adverse effect on our consolidated financial statements.Dundee Industrial did not enter into any operating or finance leases as the lessee during this reporting period.As at December 31,2013,the Trust has entered into lease agreements with tenant

184、s that may require leasing and tenant improvement costs of approximately$3.4 million(December 31,2012$0.3 million).Subsequent events On February 24,2014,the Trust completed the Halifax Portfolio Refinancing.The refinanced mortgage carries a variable interest rate of monthly Canadian Dealer Offered R

185、ate(“CDOR”)plus 1.4%for an initial term of five years.In order to hedge the interest rate risk on the variable interest rate,the Trust also entered into a five-year interest rate swap agreement with a Canadian Chartered Bank for a notional value of$56 million,which effectively fixed the interest rat

186、e on this mortgage at 3.31%for the five-year term.Net proceeds after repayment of the existing mortgage amounted to$21 million,which were used to repay other maturing mortgages and the outstanding balance on the demand revolving credit facility.19 OUR EQUITY Our discussion of equity includes LP Clas

187、s B Units,which are economically equivalent to REIT Units.Pursuant to International Financial Reporting Standards(“IFRS”),the LP B Units are classified as a liability in our consolidated financial statements as subsidiary redeemable units.Unitholders equity December 31,2013 December 31,2012 Number o

188、f Units Amount Number of Units Amount REIT Units 54,921,726$570,816 36,257,538$326,211 Add:LP B Units 16,282,096 144,096 16,198,747 181,426 Total 71,203,822$714,912 52,456,285$507,637 Our Declaration of Trust authorizes the issuance of an unlimited number of two classes of units:REIT Units and Speci

189、al Trust Units.The Special Trust Units may only be issued to holders of LP B Units,are not transferable separately from these Units,and are used to provide voting rights with respect to Dundee Industrial REIT to persons holding LP B Units.The LP B Units are held by wholly owned subsidiaries of Dunde

190、e REIT.Both the REIT Units and Special Trust Units entitle the holder to one vote for each Unit at all meetings of the unitholders.The LP B Units are exchangeable on a one-for-one basis for REIT Units at the option of the holder.The LP B Units and corresponding Special Trust Units together have econ

191、omic and voting rights equivalent in all material respects to REIT Units.The REIT Units have economic and voting rights equivalent in all material respects to each other.At December 31,2013,Dundee REIT,indirectly through its wholly owned subsidiaries,held 16,282,096 LP B Units,representing a total o

192、wnership interest of approximately 22.9%.The following table summarizes the changes in our outstanding equity.REIT Units LP B Units Total Total Units outstanding on January 1,2013 36,257,538 16,198,747 52,456,285 Units issued pursuant to public offering 10,465,000 -10,465,000 Units issued pursuant t

193、o C2C acquisition 7,460,654 -7,460,654 Units issued pursuant to C2C amalgamation 387,399 -387,399 Units issued pursuant to Distribution Reinvestment and Unit Purchase Plan(“DRIP”)323,789 83,349 407,138 Units issued pursuant to Unit Purchase Plan 2,784 -2,784 Units issued pursuant to Deferred Unit In

194、centive Plan(“DUIP”)24,562 -24,562 Total Units outstanding on December 31,2013 54,921,726 16,282,096 71,203,822 Percentage of all Units 77.1%22.9%100.0%Units issued pursuant to Unit Purchase Plan 491 -491 Units issued pursuant to DRIP on January 15,2014 45,489 -45,489 Units issued pursuant to DRIP o

195、n February 15,2014 33,848 -33,848 Units vested and issued pursuant to DUIP on February 19,2014 22,456 -22,456 Total Units outstanding on February 25,2014(1)55,024,010 16,282,096 71,306,106 Percentage of all Units 77.2%22.8%100.0%(1)The date of this report.On July 19,2013,the Trust issued 387,399 REI

196、T Units to purchase the remaining outstanding common shares of C2C by way of an amalgamation.On May 15,2013,in connection with the acquisition of C2C,the Trust issued 7,460,654 REIT Units to purchase approximately 95%of the outstanding common shares of C2C.On March 6,2013,the Trust completed a publi

197、c offering of 10,465,000 REIT Units,at a price of$11.00 per unit for gross proceeds of$115.1 million,including 1,365,000 REIT Units pursuant to the exercise of the over-allotment option granted to the underwriters.Costs related to the offering of$5.1 million(including costs of the over-allotment opt

198、ion)were charged directly to unitholders equity.20 On December 19,2012,we issued 2,358,491 REIT Units to an affiliate of KingSett as partial consideration for the KingSett Portfolio.Costs related to the issuance to KingSett of$0.1 million were charged directly to unitholders equity.On December 13,20

199、12,we completed a public offering of 13,570,000 REIT Units,at a price of$10.60 per unit for gross proceeds of$143.8 million,including 1,770,000 REIT Units issued pursuant to the exercise of the over-allotment option granted to the underwriters.Costs related to the offering of$6.2 million were charge

200、d directly to unitholders equity.On October 4,2012,the Trust completed its IPO,issuing 15,500,000 REIT Units at a price of$10.00 per unit for gross proceeds of$155.0 million.Concurrently with the IPO,Dundee Corporation and Michael Cooper,Chief Executive Officer of DREAM Asset Management Corp.,former

201、ly known as Dundee Realty Corporation,a subsidiary of DREAM Unlimited Corp.,purchased 1,750,000 REIT Units and 750,000 REIT Units,respectively,at a price of$10.00 per unit for total gross proceeds of$25.0 million.On October 17,2012,an additional 2,325,000 REIT Units were issued,pursuant to the exerc

202、ise of the over-allotment option granted to the underwriters,for total gross proceeds of$23.3 million.Costs related to the IPO of$14.5 million(including costs of the over-allotment option)were charged directly to unitholders equity.In connection with the IPO,Dundee Industrial Limited Partnership(“DI

203、LP”)issued 16,034,631 LP B Units to wholly owned subsidiaries of Dundee REIT in partial consideration for the acquisition of the Initial Properties.Short form base shelf prospectus On November 27,2012,the Trust issued a short form base shelf prospectus,which is valid for a 25-month period,during whi

204、ch time the Trust may offer and issue,from time to time,units,debt and debt securities convertible into or exchangeable for Units of the Trust,or any combination thereof,having an aggregate offering price of up to$1.0 billion.As at December 31,2013,$168.8 million in REIT Units and$111.3 million in d

205、ebt securities have been issued under the short form base shelf prospectus.Distribution policy Our Declaration of Trust provides our trustees with the discretion to determine the percentage payout of income that would be in the best interest of the Trust.Amounts retained in excess of the declared di

206、stributions are used to fund leasing costs and capital expenditure requirements.Given that working capital tends to fluctuate over time and should not affect our distribution policy,we disregard the fluctuations when determining distributable income.We also normalize leasing costs,which fluctuate wi

207、th lease maturities,renewal terms and the type of asset being leased.We evaluate the impact of leasing activity based on averages for our portfolio over a two-to three-year time frame.We also exclude the impact of transaction costs expensed on business combinations.Three months ended December 31,201

208、3 Year ended December 31,2013 Declared 3%bonus Declared 3%bonus distributions distributions(2)Total distributions distributions(2)Total 2013 distributions Paid in cash or reinvested in Units$8,296$24$8,320$42,096$85$42,181 Payable at December 31,2013 4,154 -4,154 4,154 -4,154 Total distributions(1)$

209、12,450$24$12,474$46,250$85$46,335 2013 reinvestment Reinvested to December 31,2013$810$24$834$2,824$85$2,909 Reinvested on January 15,2014 393 12 405 393 12 405 Total distributions reinvested$1,203$36$1,239$3,217$97$3,314 Distributions paid in cash$11,247$43,033 Reinvestment to distribution ratio 9.

210、7%7.0%Cash payout ratio 90.3%93.0%(1)Includes distributions on LP B Units.(2)Unitholders registered in the DRIP are also eligible to receive a bonus distribution of Units equal to 3%of the amount of the cash distribution reinvested pursuant to the DRIP.21 Distributions declared for the three months

211、ended December 31,2013 were$12.5 million.Distributions declared for the year ended December 31,2013 were$46.3 million.Of the distributions declared for the three months ended December 31,2013,$1.2 million,or approximately 10%,was reinvested in additional Units resulting in a cash payout ratio of 90%

212、,and for the year ended December 31,2013,$3.2 million,or approximately 7%,was reinvested in additional Units resulting in a cash payout ratio of 93%(60.9%for the period from October 4,2012 to December 31,2012).As required by National Policy 41-201,“Income Trusts and Other Indirect Offerings”,the fol

213、lowing table outlines the differences between cash flow from operating activities and cash distributions,as well as the differences between net income and cash distributions,in accordance with the guidelines.Cash flows from operating activities can fluctuate significantly from period to period becau

214、se of timing of payments and receipts.Net income contains a number of non-cash items,the effect of which are shown in the table below.Three Three Period from months ended months ended Year ended July 20,2012 to December 31,September 30,December 31,December 31,2013 2013 2013 2012 Net income(loss)$11,

215、432$20,660$83,981$(20,873)Cash flows from operating activities 7,666 20,872 49,721 10,241 Add(deduct):Investment in lease incentives and initial direct leasing costs 4,355 2,011 8,850 562 Change in non-cash working capital 3,834 (6,894)(1,126)(3,424)Adjusted cash flows from operating activities 15,8

216、55 15,989 57,445 7,379 Distributions paid and payable(1)12,474 12,457 46,335 6,926 Add(deduct):Distributions on Units issued on March 6 -(1,062)-Distributions on Units issued for C2C on May 15 -(211)-Adjusted distributions paid and payable 12,474 12,457 45,062 6,926 Adjusted cash flows from operatin

217、g activities over adjusted distributions paid and payable 3,381 3,532 12,383 453(1)Includes distributions on LP B Units.Excess(shortfall)of net income(loss)over distributions paid and Payable$(1,042)$8,203$37,646$(27,799)Excess(shortfall)of cash flows from operating activities over distributions pai

218、d and payable (4,808)8,415 3,386 3,315 For the three months ended December 31,2013,adjusted cash flows from operating activities exceeded adjusted distributions paid and payable by$3.4 million($12.4 million for the year ended December 31,2013).In the table above,for comparison purposes,distributions

219、 paid and payable were adjusted to remove the distributions related to the Units issued pursuant to the equity offering completed on March 6,2013 and the Units issued for acquiring the common shares of C2C on May 15,2013.The proceeds from the Units issued on March 6,2013 were not deployed until the

220、acquisition of CanFirst Portfolio on April 24,2013,and accordingly,the cash flow from operations related to those Units only commenced from April 25,2013.Distributions on the Units issued for acquiring the common shares of C2C reflect the period from May 1,2013 to December 31,2013.However,cash flow

221、from operations associated with these Units only commenced on May 16,2013.The net income is net of distributions paid and payable on subsidiary redeemable units of$2.9 million and$11.3 million,respectively,for the three months and year ended December 31,2013($2.7 million for the period from July 20,

222、2012 to December 31,2012).Net income is not used as a proxy for distributions as it includes fair value changes on investment properties and fair value changes on financial instruments,which are not reflective of the Trusts ability to make distributions.22 OUR RESULTS OF OPERATIONS Three Three Perio

223、d from months ended months ended Year ended July 20,2012 to December 31,September 30,December 31,December 31,2013 2013 2013 2012(1)Investment properties revenue$41,149$37,842$142,944$17,202 Investment properties operating expenses 14,089 10,621 44,017 4,667 Net rental income 27,060 27,221 98,927 12,

224、535 Other income and expenses General and administrative (2,052)(2,009)(7,346)(855)Fair value adjustments to investment properties (1,308)1,599 1,151 6,048 Acquisition related costs -(11,018)(11,528)Interest:Debt (8,100)(8,084)(30,100)(3,244)Subsidiary redeemable units (2,848)(2,850)(11,295)(2,711)O

225、ther items (9)21 234 16 Fair value adjustments to financial instruments (1,775)6,114 44,588 (21,134)Income(loss)before income taxes 10,968 22,012 85,141 (20,873)Deferred income taxes 464 (1,352)(1,160)-Net income(loss)and comprehensive income(loss)$11,432$20,660$83,981$(20,873)(1)The Trust was forme

226、d on July 20,2012 with no operating activity from July 20,2012 to October 3,2012.The Trust completed its IPO on October 4,2012.Thus,prior year period reflected operating results from October 4,2012 to December 31,2012.Investment properties revenue Investment properties revenue includes net rental in

227、come from investment properties as well as the recovery of operating costs and property taxes from tenants.Investment properties revenue totalled$142.9 million for the year,an increase of$125.7 million compared to the period from July 20,2012 to December 31,2012,due to accretive acquisitions complet

228、ed during 2013 and 2012 as well as comparative properties NOI growth.Investment properties revenue totalled$41.1 million for the quarter,increased by$3.3 million,or 8.7%over the prior quarter ended September 30,2013,primarily due to higher recovery revenues recorded in the fourth quarter.Higher reco

229、very revenues are reflective of the typically higher operating costs during the winter months as well as the year-end finalization of adjustments recorded on recovery estimates billed to the tenants during the year.Investment properties operating expenses Operating expenses comprise occupancy costs

230、and property taxes as well as certain expenses that are not recoverable from tenants,the majority of which are related to leasing.Operating expenses fluctuate with changes in occupancy levels,weather,utility costs,realty taxes,and repairs and maintenance.Investment properties operating expenses incr

231、eased by$39.4 million compared to the period from July 20,2012 to December 31,2012,due to accretive acquisitions completed during 2013 and 2012 as well as comparative properties NOI growth.Investment properties operating expenses increased by$3.5 million,or 32.7%,over the prior quarter ended Septemb

232、er 30,2013,primarily due to higher utilities and snow removal,which is typical of the winter months,timing of the incurrence of certain expenses,and finalization of estimates of certain recoverable operating expenses.General and administrative General and administrative expenses primarily comprise e

233、xpenses related to corporate management,trustees fees and expenses,investor relations,and asset management fees.For the year ended December 31,2013,general and administrative expenses included$3.5 million in asset management fees,$1.3 million in professional fees,$1.3 million of general corporate ex

234、penses and$1.2 million related to the DUIP.General and administrative expenses increased by$6.5 million from December 31,2012 due to completion of the first full fiscal year along with higher fees resulting from the growth of the portfolio.23 For the three months ended December 31,2013,general and a

235、dministrative expenses remained stable from Q3 2013 at$2.0 million,comprising$1.0 million in asset management fees,$0.3 million in professional fees,$0.4 million of general corporate expenses and$0.3 million related to the DUIP.Fair value adjustments to investment properties For the year ended Decem

236、ber 31,2013,a fair value gain of$1.2 million was recorded,primarily reflecting modest cap rate compression.For the quarter ended December 31,2013,a fair value loss of$1.3 million was recorded,primarily relating to minor adjustments to stabilized NOI and other valuation assumptions.Interest expense D

237、ebt Interest expense on debt for the year increased by$26.9 million compared to the period from July 20,2012 to December 31,2012.The increase in interest expense resulted from new debt assumed on investment properties acquired in 2012 and 2013 as well as new debt entered into during the year.For the

238、 three months ended December 31,2013,interest expense on debt remained stable from Q3 2013 at$8.1 million.Fair value adjustments to financial instruments Fair value adjustments to financial instruments include fair value adjustments on the conversion features of convertible debt,remeasurement of the

239、 carrying value of subsidiary redeemable units and remeasurement of the deferred trust units.For the year ended December 31,2013,we recognized gains of$38.3 million and$6.3 million on the remeasurement of the subsidiary redeemable units and the remeasurement of the conversion feature on the converti

240、ble debentures,respectively,primarily due to a decline in the trading value of REIT Units at the end of Q4 2013 compared to the prior year ended December 31,2012.Related party transactions Dundee Industrial and its subsidiaries enter into transactions with related parties that are conducted under no

241、rmal commercial terms and as disclosed in Note 23 to the consolidated financial statements.Pursuant to the Asset Management Agreement,during Q4 2013,we paid$1.2 million($5.3 million for the year ended December 31,2013),comprising$1.0 million reported in general and administrative expenses for asset

242、management fees($2.9 million for the year ended December 31,2013),$0.1 million related to acquisition costs($2.0 million for the year ended December 31,2013),and$0.1 million recorded as financing costs($0.4 million for the year ended December 31,2013).Net operating income We define NOI as the total

243、of investment property revenue less investment property operating expenses.NOI is an important measure used by management in evaluating property operating performance;however,it is not defined by IFRS,does not have a standard meaning and may not be comparable with similar measures presented by other

244、 income trusts.Three Three Period from months ended months ended Year ended July 20,2012 to December 31,September 30,December 31,December 31,2013 2013 2013 2012 Total portfolio Western Canada$9,496$9,471$36,756$6,371 Central Canada 12,446 12,901 44,402 5,138 Eastern Canada 5,118 4,849 17,769 1,026 N

245、et operating income$27,060$27,221$98,927$12,535 For the year ended December 31,2013,net operating income was$98.9 million,an increase of$86.4 million compared to the period from July 20,2012 to December 31,2012.The increase is attributable to income generated by investment properties acquired in 201

246、2 being included for the full year of operations for the year ended December 31,2013 and income generated by investment properties acquired in 2013.Net operating income for the three months ended December 31,2013 remained stable at$27.1 million compared to the prior quarter ended September 30,2013.2

247、4 NOI BY REGION(Three months ended December 31,2013)NOI comparative properties Net operating income shown below details comparative and non-comparative items to assist in understanding the impact each component has on NOI.The comparative properties disclosed in the following table are properties acq

248、uired prior to October 1,2013.Comparative properties NOI excludes lease termination fees,straight-line rents,bad debt expenses and amortization of lease incentives.Comparative properties NOI remained stable at$26.3 million compared to the prior quarter.A slight decrease in average in-place occupancy

249、 for the quarter was offset by positive operating costs recoveries adjustments.Three Three months ended months ended December 31,September 30,Growth 2013 2013 Amount%Western Canada$9,154$9,186$(32)-Central Canada 12,148 12,428 (280)(2)Eastern Canada 5,041 4,743 298 6 Comparative properties 26,343 26

250、,357 (14)-Lease termination fees and other items 36 -36 Straight-line rent 784 823 (39)Bad debt expenses(recovery)(83)67 (150)Amortization of tenant inducements (20)(26)6 NOI$27,060$27,221$(161)(1)35%46%19%Western CanadaCentral CanadaEastern Canada 25 Funds from operations and adjusted funds from op

251、erations Three Three Period from months ended months ended Year ended July 20,2012 to December 31,September 30,December 31,December 31,2013 2013 2013 2012 Net income(loss)$11,432$20,660$83,981$(20,873)Add(deduct):Amortization and depreciation 21 71 116 -Interest expense on subsidiary redeemable unit

252、s 2,848 2,850 11,295 2,711 Acquisition related costs -11,018 11,528 Fair value adjustments to investment properties 1,308 (1,599)(1,151)(6,048)Fair value adjustments to financial instruments 1,775 (6,114)(44,588)21,134 Fair value adjustments of DUIP included in general and administrative expenses (6

253、1)(71)(191)-FFO share related to non-controlling interest of C2C -(23)(90)-Deferred income taxes (464)1,352 1,160 -FFO$16,859$17,126$61,550$8,452 Funds from operations$16,859$17,126$61,550$8,452 Add(deduct):Amortization of fair value adjustments on assumed debt (812)(877)(3,298)(819)Deferred unit co

254、mpensation expense excluding fair value adjustments 351 378 1,434 46 Straight-line rent (784)(823)(3,135)(400)Debt settlement gains(losses)13 (49)(36)-FFO share related to non-controlling interest of C2C -23 90 -AFFO share related to non-controlling interest of C2C -(20)(76)-15,627 15,758 56,529 7,2

255、79 Deduct:Normalized initial direct leasing costs and lease incentives 1,248 1,267 4,602 562 Normalized recurring capital expenditures 749 762 2,763 225 AFFO$13,630$13,729$49,164$6,492 26 Funds from operations Three Three Period from months ended months ended Year ended July 20,2012 to December 31,S

256、eptember 30,December 31,December 31,2013 2013 2013 2012 FFO$16,859$17,126$61,550$8,452 FFO per unit basic$0.24$0.24$0.93$0.22 FFO per unit diluted$0.23$0.24$0.91$0.21 For the three months ended December 31,2013,FFO per diluted unit was$0.23,a 9.5%increase over the prior year comparative period,refle

257、cting investment properties acquired during 2013.For the year ended December 31,2013,FFO per diluted unit was$0.91,a 333.3%increase compared to the period from July 20,2012 to December 31,2012,reflecting the investment properties acquired in 2012 being included for the full year and acquisitions com

258、pleted in 2013.Adjusted funds from operations Three Three Period from months ended months ended Year ended July 20,2012 to December 31,September 30,December 31,December 31,2013 2013 2013 2012 AFFO$13,630$13,729$49,164$6,492 AFFO per unit basic$0.19$0.19$0.74$0.17 AFFO was$13.6 million,or$0.19 per un

259、it.The increase over the prior year comparative quarter is due to the effects of acquisitions completed in 2013.AFFO is not defined by IFRS and,therefore,may not be comparable to similar measures presented by other real estate investment trusts.In compliance with Canadian Securities Administrators S

260、taff Notice 52-306(Revised),“Non-GAAP Financial Measures”,the table below reconciles AFFO to cash generated from operating activities.Three Three Period from months ended months ended Year ended July 20,2012 to December 31,September 30,December 31,December 31,2013 2013 2013 2012 Cash generated from

261、operating activities$7,666$20,872$49,721$10,241 Add(deduct):Initial direct leasing costs and lease incentives incurred 4,355 2,011 8,850 562 Change in non-cash working capital 3,834 (6,894)(1,126)(3,424)Amortization of financing costs on debt (228)(211)(852)(100)AFFO share related to non-controlling

262、 interest of C2C -(20)(76)-Normalized initial direct leasing costs and lease incentives (1,248)(1,267)(4,602)(562)Normalized recurring capital expenditures (749)(762)(2,763)(225)Other -12 -AFFO$13,630$13,729$49,164$6,492 27 SELECTED ANNUAL INFORMATION The following table provides selected financial

263、information for the:Period from Year ended July 20,2012 to December 31,December 31,2013 2012 Investment properties revenue$142,944$17,202 Income(loss)before income taxes 85,141 (20,873)Net income(loss)83,981 (20,873)Total assets 1,589,805 1,191,866 Debt 840,382 649,845 Distributions declared 35,040

264、4,215 Units outstanding REIT Units 54,921,726 36,257,538 LP B Units 16,282,096 16,198,747 28 QUARTERLY INFORMATION The following tables show quarterly information since October 4,2012.Q4 Q3 Q2 Q1 Q4 2013 2013 2013 2013 2012 Investment properties revenue$41,149$37,842$34,703$29,250$17,202 Investment

265、properties operating expenses 14,089 10,621 9,949 9,358 4,667 Net rental income 27,060 27,221 24,754 19,892 12,535 Other income and expenses General and administrative (2,052)(2,009)(1,903)(1,382)(855)Fair value adjustments to investment properties (1,308)1,599 283 577 6,048 Acquisition related cost

266、s -(11,018)-(11,528)Interest:Debt (8,100)(8,084)(7,365)(6,551)(3,244)Subsidiary redeemable units (2,848)(2,850)(2,849)(2,748)(2,711)Debt settlement gains (13)49 -Depreciation and amortization (1)(45)-Interest and fee income 5 17 186 36 16 Fair value adjustments to financial instruments (1,775)6,114

267、32,149 8,100 (21,134)Income(loss)before income taxes 10,968 22,012 34,237 17,924 (20,873)Deferred income taxes 464 (1,352)(272)-Net income(loss)and comprehensive income(loss)$11,432$20,660$33,965$17,924$(20,873)Calculation of funds from operations Q4 Q3 Q2 Q1 Q4 2013 2013 2013 2013 2012 NET INCOME(L

268、OSS)$11,432$20,660$33,965$17,924$(20,873)Add(deduct):Amortization and depreciation 21 71 20 4 -Interest expense on subsidiary redeemable units 2,848 2,850 2,849 2,748 2,711 Acquisition related costs -11,018 -11,528 Fair value adjustments to investment properties 1,308 (1,599)(283)(577)(6,048)Fair va

269、lue adjustments to financial instruments 1,775 (6,114)(32,149)(8,100)21,134 Fair value adjustments of DUIP included in general and administrative expenses (61)(71)(53)(6)-FFO share related to non-controlling interest of C2C -(23)(67)-Deferred income taxes (464)1,352 272 -FFO$16,859$17,126$15,572$11,

270、993$8,452 FFO per unit basic(1)$0.24$0.24$0.23$0.22$0.22 FFO per unit diluted(1)(2)$0.23$0.24$0.23$0.22$0.21(1)The LP B Units are included in the calculation of basic and diluted FFO per unit.(2)Diluted FFO for Q4 2013,Q3 2013,Q2 2013,Q1 2013 and Q4 2012 excludes$2.0 million,$2.0 million,$1.8 millio

271、n,$1.7 million and$0.3 million in interest on convertible debentures,respectively.29 Q4 Q3 Q2 Q1 Q4 2013 2013 2013 2013 2012 FUNDS FROM OPERATIONS$16,859$17,126$15,572$11,993$8,452 Add(deduct):Amortization of fair value adjustment on assumed debt (812)(877)(924)(685)(819)Deferred unit compensation e

272、xpense excluding fair value adjustments 351 378 493 212 46 Straight-line rent (784)(823)(801)(727)(400)Debt settlement gains 13 (49)-FFO share related to non-controlling interest of C2C -23 67 -AFFO share related to non-controlling interest of C2C -(20)(56)-15,627 15,758 14,351 10,793 7,279 Adjusted

273、 for:Normalized initial direct leasing costs and lease incentives 1,248 1,267 1,138 949 562 Normalized recurring capital expenditures 749 762 683 569 225 Adjusted funds from operations$13,630$13,729$12,530$9,275$6,492 AFFO per unit basic(1)$0.19$0.19$0.19$0.17$0.17 Weighted average Units outstanding

274、 for FFO and AFFO Basic(in thousands)71,133 70,931 66,930 55,561 39,320(1)The LP B Units are included in the calculation of basic AFFO per unit.NON-GAAP MEASURES The following non-GAAP measures are important measures used by management in evaluating the Trusts underlying operating performance and de

275、bt management.These non-GAAP measures are not defined by IFRS,do not have a standardized meaning and may not be comparable with similar measures presented by other income trusts.Funds from operations Management believes FFO is an important measure of our operating performance.This non-GAAP measureme

276、nt is a commonly used measure of performance of real estate operations;however,it does not represent net income or cash flow from operating activities,as defined by GAAP,and is not necessarily indicative of cash available to fund Dundee Industrial REITs needs.In compliance with Canadian Securities A

277、dministrators Staff Notice 52-306(Revised),“Non-GAAP Financial Measures”,FFO has been reconciled to net income under the heading“Funds from operations and adjusted funds from operations”.Adjusted funds from operations Management believes AFFO is an important measure of our economic performance and i

278、s indicative of our ability to pay distributions.This non-GAAP measurement is commonly used for assessing real estate performance;however,it does not represent cash flow from operating activities,as defined by GAAP,and is not necessarily indicative of cash available to fund the Trusts needs.In the c

279、alculation of AFFO,the Trust assumes 8%of NOI,adjusted for straight-line rent and property management income for normalized initial direct leasing costs and recurring capital expenditures.This assumption will be re-evaluated from time to time based on actual experience as our expenditure pattern is

280、established in the future.In compliance with Canadian Securities Administrators Staff Notice 52-306(Revised),“Non-GAAP Financial Measures”,AFFO has been reconciled to cash generated from operating activities under the heading“Funds from operations and adjusted funds from operations”.30 Weighted aver

281、age number of Units The basic weighted average number of Units outstanding used in the FFO and AFFO calculations includes the weighted average of all REIT Units,LP B Units,and vested but unissued deferred trust units and income deferred trust units.The diluted weighted average number of Units assume

282、s the conversion of the convertible debentures.Three Three Three Period from months ended months ended months ended Year ended July 20,2012 to December 31,September 30,December 31,December 31,December 31,2013 2013 2012 2013 2012 Weighted average Units outstanding for basic per unit amounts(in thousa

283、nds)71,133 70,931 39,320 66,195 39,320 Weighted average Units outstanding for diluted per unit amounts(in thousands)80,955 80,761 40,828 75,467 40,828 Level of debt(debt-to-total assets)Management believes this non-GAAP measurement is an important measure in the management of our debt levels.Level o

284、f debt as shown below is determined as total debt before deferred financing costs and mark-to-market adjustments,divided by total assets.In compliance with Canadian Securities Administrators Staff Notice 52-306(Revised),“Non-GAAP Financial Measures”,the table below calculates the level of debt(debt-

285、to-total assets).December 31,December 31,Amounts per consolidated financial statements 2013 2012 Non-current debt$728,341$548,959 Current debt 112,041 100,886 Total debt 840,382 649,845 Add(deduct):Deferred financing costs 4,547 4,349 Mark-to-market adjustments (8,297)(8,055)Total debt before deferr

286、ed financing costs and mark-to-market adjustments 836,632 646,139 Total assets$1,589,805$1,191,866 Debt-to-total assets 52.6%54.2%31 Interest coverage ratio Management believes this non-GAAP measurement is an important measure in determining our ability to cover interest expense based on our operati

287、ng performance.Interest coverage ratio as shown below is calculated as net rental income plus interest and fee income,less general and administrative expenses,plus deferred unit compensation expense,all divided by interest expense on total debt excluding deferred financing and mark-to-market adjustm

288、ents.In compliance with Canadian Securities Administrators Staff Notice 52-306(Revised),“Non-GAAP Financial Measures”,the table below calculates the interest coverage ratio.Three Three Period from months ended months ended Year ended July 20,2012 to December 31,September 30,December 31,December 31,A

289、mounts per consolidated financial statements 2013 2013 2013 2012 Net rental income$27,060$27,221$98,927$12,535 Add(deduct):Interest and fee income 5 17 244 16 General and administrative expenses (2,052)(2,009)(7,346)(855)Deferred unit compensation expense 290 307 1,243 46 25,303 25,536 93,068 11,742

290、 Interest expense incurred,at contractual rate 8,684 8,750 32,546 3,963 Interest coverage ratio(times)2.9 2.9 2.9 3.0 SECTION III DISCLOSURE CONTROLS AND PROCEDURES AND INTERNAL CONTROL OVER FINANCIAL REPORTING For the December 31,2013 financial year-end,the Chief Executive Officer and the Chief Fin

291、ancial Officer(the“Certifiying Officers”),together with other members of management,have evaluated the design and operational effectiveness of Dundee Industrials disclosure controls and procedures,as defined in National Instrument 52-109 Certification of Disclosure in Issuers Annual and Interim Fili

292、ngs(“NI 52-109”).The Certifying Officers have concluded that the disclosure controls and procedures are adequate and effective in order to provide reasonable assurance that material information has been accumulated and communicated to management,to allow timely decisions of required disclosures by D

293、undee Industrial and its consolidated subsidiary entities,within the required time periods.Dundee Industrials internal control over financial reporting(as defined in NI 52-109)is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of the fina

294、ncial statements for external purposes in accordance with generally accepted accounting principles(“GAAP”).Using the framework established in“Risk Management and Governance:Guidance on Control(COCO Framework)”,published by The Canadian Institute of Chartered Accountants,the Certifying Officers,toget

295、her with other members of management,have evaluated the design and operation of Dundee Industrials internal control over financial reporting.Based on that evaluation,the Certifiying Officers have concluded that Dundee Industrials internal control over financial reporting was effective as at December

296、 31,2013.There were no changes in Dundee Industrials internal control over financial reporting during the financial year ended December 31,2013 that have materially affected,or are reasonably likely to materially affect,Dundee Industrials internal control over financial reporting.32 SECTION IV RISKS

297、 AND OUR STRATEGY TO MANAGE Dundee Industrial REIT is exposed to various risks and uncertainties,many of which are beyond our control.The following is a review of the material risks and uncertainties that could materially affect our operations and future performance.Real estate ownership Real estate

298、 ownership is generally subject to numerous factors and risks,including changes in general economic conditions(such as the availability,terms and cost of mortgage financings and other types of credit),local economic conditions(such as an oversupply of industrial properties or a reduction in demand f

299、or real estate in the area),the attractiveness of properties to potential tenants or purchasers,competition with other landlords with similar available space,and the ability of the owner to provide adequate maintenance at competitive costs.An investment in real estate is relatively illiquid.Such ill

300、iquidity will tend to limit our ability to vary our portfolio promptly in response to changing economic or investment conditions.In recessionary times,it may be difficult to dispose of certain types of real estate.The costs of holding real estate are considerable,and during an economic recession we

301、may be faced with ongoing expenditures with a declining prospect of incoming receipts.In such circumstances,it may be necessary for us to dispose of properties at lower prices in order to generate sufficient cash from operations to make distributions and interest payments.Certain significant expendi

302、tures(e.g.,property taxes,maintenance costs,mortgage payments,insurance costs and related charges)must be made throughout the period of ownership of real property,regardless of whether the property is producing sufficient income to pay such expenses.In order to retain desirable rentable space and to

303、 generate adequate revenue over the long term,we must maintain or,in some cases,improve each propertys condition to meet market demand.Maintaining a rental property in accordance with market standards can entail significant costs,which we may not be able to pass on to our tenants.Numerous factors,in

304、cluding the age of the relevant building structure,the material and substances used at the time of construction,or currently unknown building code violations,could result in substantial unbudgeted costs for refurbishment or modernization.In the course of acquiring a property,undisclosed defects in d

305、esign or construction or other risks might not have been recognized or correctly evaluated during the pre-acquisition due diligence process.These circumstances could lead to additional costs and could have an adverse effect on our proceeds from sales and rental income of the relevant properties.Roll

306、over of leases Upon the expiry of any lease,there can be no assurance that the lease will be renewed or the tenant replaced.Furthermore,the terms of any subsequent lease may be less favourable than those of the existing lease.Our cash flows and financial position would be adversely affected if our t

307、enants were to become unable to meet their obligations under their leases or if a significant amount of available space in our properties could not be leased on economically favourable lease terms.In the event of default by a tenant,we may experience delays or limitations in enforcing our rights as

308、lessor and incur substantial costs in protecting our investment.Furthermore,at any time,a tenant may seek the protection of bankruptcy,insolvency or similar laws,which could result in the rejection and termination of the lease of the tenant and,thereby,cause a reduction in the cash flows available t

309、o us.Concentration of properties and tenants Currently,all of our properties are located in Canada and,as a result,are impacted by economic and other factors specifically affecting the real estate markets in Canada.These factors may differ from those affecting the real estate markets in other region

310、s.Due to the concentrated nature of our properties,a number of our properties could experience any of the same conditions at the same time.If real estate conditions in Canada decline relative to real estate conditions in other regions,our cash flows and financial condition may be more adversely affe

311、cted than those of companies that have more geographically diversified portfolios of properties.Financing We require access to capital to maintain our properties as well as to fund our growth strategy and significant capital expenditures.There is no assurance that capital will be available when need

312、ed or on favourable terms.Our access to third party financing will be subject to a number of factors,including general market conditions;the markets perception of our growth potential;our current and expected future earnings;our cash flow and cash distributions and cash interest payments;and the mar

313、ket price of our Units.33 A significant portion of our financing is debt.Accordingly,we are subject to the risks associated with debt financing,including the risk that our cash flows will be insufficient to meet required payments of principal and interest,and that,on maturities of such debt,we may n

314、ot be able to refinance the outstanding principal under such debt or that the terms of such refinancing will be more onerous than those of the existing debt.If we are unable to refinance debt at maturity on terms acceptable to us or at all,we may be forced to dispose of one or more of our properties

315、 on disadvantageous terms,which may result in losses and could alter our debt-to-equity ratio or be dilutive to unitholders.Such losses could have a material adverse effect on our financial position or cash flows.The degree to which we are leveraged could have important consequences to our operation

316、s.A high level of debt will:reduce the amount of funds available for the payment of distributions to unitholders and interest payments on our debentures;limit our flexibility in planning for and reacting to changes in the economy and in the industry,and increase our vulnerability to general adverse

317、economic and industry conditions;limit our ability to borrow additional funds,dispose of assets,encumber our assets and make potential investments;place us at a competitive disadvantage compared to other owners of similar real estate assets that are less leveraged and who,therefore,may be able to ta

318、ke advantage of opportunities that our indebtedness would prevent us from pursuing;make it more likely that a reduction in our borrowing base following a periodic valuation(or redetermination)could require us to repay a portion of then outstanding borrowings;and impair our ability to obtain addition

319、al financing in the future for working capital,capital expenditures,acquisitions,general trust or other purposes.Changes in law We are subject to applicable federal,provincial,municipal,local,and common laws and regulations governing the ownership and leasing of real property,employment standards,en

320、vironmental matters,taxes and other matters.It is possible that future changes in such laws or regulations,or changes in their application,enforcement or regulatory interpretation,could result in changes in the legal requirements affecting us(including with retroactive effect).In addition,the politi

321、cal conditions in the jurisdictions in which we operate are also subject to change.Any changes in investment policies or shifts in political attitudes may adversely affect our investments.Any changes in the laws to which we are subject in the jurisdictions in which we operate could materially affect

322、 our rights and title in and to the properties and the revenues we are able to generate from our investments.Interest rates When entering into financing agreements or extending such agreements,we depend on our ability to agree on terms for interest payments that will not impair our desired profit,an

323、d on amortization schedules that do not restrict our ability to pay distributions on our Units and interest payments on our debentures.In addition to existing variable rate portions of our financing agreements,we may enter into future financing agreements with variable interest rates.An increase in

324、interest rates could result in a significant increase in the amount we pay to service debt,which could limit our ability to pay distributions to unitholders and could impact the market price of the Units and/or the debentures.Increases in interest rates generally cause a decrease in demand for prope

325、rties.Higher interest rates and more stringent borrowing requirements,whether mandated by law or required by banks,could have a significant negative effect on our ability to sell any of our properties.Environmental risk As an owner of real property,we are subject to various federal,provincial and mu

326、nicipal laws relating to environmental matters.Such laws provide a range of potential liability,including potentially significant penalties,and potential liability for the costs of removal or remediation of certain hazardous substances.The presence of such substances,if any,could adversely affect ou

327、r ability to sell or redevelop such real estate or to borrow using such real estate as collateral and,potentially,could also result in civil claims against us.In order to obtain financing for the purchase of a new property through traditional channels,we may be requested to arrange for an environmen

328、tal audit to be conducted.Although such an audit provides us and our lenders with some assurance,we may become subject to liability for undetected pollution or other environmental hazards on our properties against which we cannot insure,or against which we may elect not to insure where premium costs

329、 are disproportionate to our perception of relative risk.We have formal policies and procedures to review and monitor environmental exposure.These policies include the requirement to obtain a Phase I Environmental Site Assessment,conducted by an independent and qualified environmental consultant,bef

330、ore acquiring any real property or any interest therein.34 Competition The real estate market in Canada is highly competitive and fragmented and we compete for real property acquisitions with individuals,corporations,institutions and other entities that may seek real property investments similar to

331、those we desire.An increase in the availability of investment funds or an increase in interest in real property investments may increase competition for real property investments,thereby increasing purchase prices and reducing the yield on them.If competing properties of a similar type are built in

332、the area where one of our properties is located or if similar properties located in the vicinity of one of our properties are substantially refurbished,the net operating income derived from and the value of such property could be reduced.Numerous other developers,managers and owners of properties wi

333、ll compete with us in seeking tenants.To the extent that our competitors own properties that are in better locations,of better quality or less leveraged than the properties owned by us,they may be in a better position to attract tenants who might otherwise lease space in our properties.To the extent that our competitors are better capitalized or financially stronger,they would be in a better posit