A general view of the hemicycle at the European Parliament in Brussels, Belgium, February 24, 2016. REUTERS/Yves Herman/File Photo
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BRUSSELS, June 7 (Reuters) – The European Parliament will vote this week on a raft of EU climate change policies designed to cut Europe’s emissions over the next decade, with proposals facing multiple amendments and the outcome uncertain for some of the most ambitious plans.
The plans aim to put the 27-country European Union – the world’s third-largest economy – on track for its goal of reducing net greenhouse gas emissions 55% by 2030, from 1990 levels.
Under the EU’s complex lawmaking process, parliament will debate eight proposals on Tuesday and vote on them on Wednesday, to confirm its position for negotiations with EU countries on the final legislation.
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Members of the parliament are having to consider hundreds of amendments that could increase or weaken the impact of the EU’s climate policies.
One proposal represents the biggest overhaul of the EU carbon market since its launch in 2005. This would reinforce the scheme to cut emissions for the sectors it covers by 61% by 2030, under an original plan by the European Commission, which drafts EU laws.
Some lawmakers will attempt to strengthen that to a 67% emissions cut. Peter Liese, the parliament’s lead negotiator on the carbon market reform, said he was “optimistic” a compromise for a 63% emissions cut would win majority support.
Liese also predicted a “controversial vote” on the EU’s world-first plan to impose a CO2 levy on imports of carbon-intensive goods like steel and cement, with lawmakers split over how quickly the scheme should replace the free CO2 permits those industries currently receive.
Options up for the vote on Wednesday include a phase-out of free CO2 permits by 2030, 2032 or 2035. Industries have urged lawmakers not to pull forward the date, which would hike the price they pay to pollute. read more
Another is the EU’s plan for a 100% cut in CO2 emissions from new cars by 2035 – effectively banning new combustion engine car sales in the EU. Some amendments would weaken that to a 90% CO2 cut in 2035.
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Reporting by Kate Abnett. Editing by Jane Merriman
Our Standards: The Thomson Reuters Trust Principles.
TORONTO–(BUSINESS WIRE)–DREAM OFFICE REAL ESTATE INVESTMENT TRUST (D.UN-TSX) or (“Dream Office REIT”, the “Trust” or “we”) today announced its financial results for the three months ended March 31, 2022 and provided a business update related to the COVID-19 pandemic.
Number of active properties
Number of properties under development
Gross leaseable area (“GLA”) (in millions of sq. ft.)
Investment properties value
Occupancy rate – including committed (period-end)
Occupancy rate – in-place (period-end)
Average in-place and committed net rent per square foot (period-end)
Weighted average lease term (“WALT”) (years)
See footnotes at end.
Three months ended
Funds from operations (“FFO”)(3)
Net rental income
Comparative properties net operating income (“NOI”)(4)
Per unit amounts
See footnotes at end.
“Our business has continued to navigate through uncertainties in the economy and recovery from the pandemic with resilience,” said Michael Cooper, Chief Executive Officer of Dream Office REIT. “We think our strategy of focusing on our best assets to improve their quality, reducing carbon emissions, animating the retail and common areas and making our office communities more inclusive will be very well received by our tenants as they return to work and will add value to the portfolio.”
Net income for the quarter: For the three months ended March 31, 2022, the Trust generated net income of $52.3 million. Included in net income for the three months ended March 31, 2022 are net rental income totalling $25.9 million, share of net income from investment in Dream Industrial REIT totalling $42.9 million and positive fair value adjustments to investment properties totalling $19.4 million primarily due to fair value gains at four properties valued by qualified external valuation professionals. Partially offsetting these items were negative fair value adjustments to financial instruments for the three months ended March 31, 2022 totalling $20.3 million primarily due to the revaluation of the subsidiary redeemable units as a result of appreciation in the Trust’s unit price.
Diluted FFO per unit(5) for the quarter: For the three months ended March 31, 2022, diluted FFO per unit increased to $0.39 per unit relative to $0.38 per unit in Q1 2021 as NOI from our completed development at 1900 Sherwood Place in Regina (+$0.02), higher FFO from our investment in Dream Industrial REIT (+$0.02) and the effect of accretive unit repurchases under our Normal Course Issuer Bid (“NCIB”) program (+$0.01) were partially offset by lower comparative properties NOI (-$0.03) and other items (-$0.01).
Net rental income for the quarter: Net rental income for the three months ended March 31, 2022 decreased by $0.4 million relative to the prior year comparative quarter primarily due to lower weighted average occupancy in Toronto downtown and lower rents on renewals and new leases in the regions that we collectively refer to as Other markets, comprising our properties located in Calgary, Saskatchewan, Mississauga, Scarborough and the United States. Partially offsetting the year-over-year decrease were net rental income from our completed property under development at 1900 Sherwood Place in Regina, higher net rents on renewals and new leasing in Toronto downtown and higher parking revenues.
Comparative properties NOI(4) for the quarter: For the three months ended March 31, 2022, comparative properties NOI decreased by 4.8%, or $1.4 million, over the prior year comparative quarter, primarily driven by declines in weighted average occupancy in Toronto downtown and lower in-place rents in the Other markets region. Partially offsetting the declines were higher rates on renewals and new leases in Toronto downtown, higher weighted average occupancy in the Other markets region and favourable parking revenues of $0.2 million across the portfolio.
Over the course of the COVID-19 pandemic, we saw significant reductions in leasing activity and building traffic relative to historical norms, leading to declines in occupancy and parking income as a result of repeated states of emergency in Toronto. Despite the public health measures enacted in response to the Omicron variant in December 2021 and January 2022, we continue to anticipate that many companies will return their employees to the office during 2022 and, with that, leasing activity and traffic flow to our properties will improve and our comparative properties NOI and parking revenues will begin to normalize.
We are actively managing our assets in the Toronto downtown region, which represent 82% of our active portfolio investment property fair values, to improve the quality of the buildings and to continue to improve rental rates in this market. For our assets in the Other markets region, which make up the remaining 18% of our total portfolio investment properties fair value, we are repositioning these assets to improve occupancy and liquidity in the private market.
In-place occupancy: Total portfolio in-place occupancy on a quarter-over-quarter basis decreased by 1.2% relative to Q4 2021 to 81.7%. In Toronto downtown, 95,000 square feet of early terminations and 42,000 square feet of expiries were partially offset by 19,000 square feet of new leasing activity and 10,000 square feet of renewals. Within the 95,000 square feet of early terminations, 80,000 square feet relates to a negotiated tenant downsize on renewal for a lease expiring in Q4 2022. The Trust has leased 54,000 square feet of the returned space for a ten-year term commencing in the first half of 2023 with a leading provider of flexible workspace for enterprise clients for its first Canadian location and is in advanced negotiations for a further 13,000 square feet of the remaining space. Under the terms of the lease, the Trust is entitled to a share of the tenant’s net revenues plus additional rents. The Trust expects to achieve revenues from the space equal to or higher than the equivalent market rental rate on a stabilized basis. The renewing tenant retained 82,000 of its 139,000 square feet for a period of ten years with initial rents on the retained space 36% higher than expiring rates with progressive rent steps to a 68% increase over expiring rates by the end of the term. The remaining 57,000 square feet of space is currently sublet and the Trust is in advanced negotiations with those subtenants for 45,000 square feet of the subleased space. The Trust is actively marketing the remaining 25,000 square feet to prospective tenants.
In the Other markets region, 53,000 square feet of new leasing activity and 13,000 square feet of renewals were partially offset by 23,000 square feet of expiries.
Total portfolio in-place occupancy on a year-over-year basis decreased from 85.8% at Q1 2021 to 81.7% this quarter due to net negative absorption in Toronto downtown partially offset by the reclassification of 1900 Sherwood Place to active properties in Q3 2021 and net positive absorption in Other markets during Q4 2021 and Q1 2022.
Lease commencements for the quarter: For the three months ended March 31, 2022, 71,000 square feet of leases commenced, not including temporary leases. In Toronto downtown, 22,000 square feet of leases commenced at $35.13 per square foot, or 28.3% higher than the previous rent in the same space. In the Other markets region, 49,000 square feet of leases commenced at $11.43 per square foot or 35.5% lower than the previous rents in the same space as rental rates on new and renewed leasing rolled down to market rates. The renewal and relocation rate to expiring rate spread for the three months ended March 31, 2022 was 4.7% above expiring rates on 23,000 square feet of renewals.
Tenant profile: As illustrated in the chart below, the Trust has a diversified and stable tenant mix.
See Figure 1, Estimated Annualized Gross Rental Revenue by Tenant Industry
Our top ten tenants make up approximately 38% of gross rental revenue, and 50% of our top tenants have credit ratings of A- or higher.
As at March 31, 2022, the Trust had approximately $280 million of available liquidity(6), $170 million of unencumbered assets(7) and a level of debt (net total debt-to-net total assets)(8) of 41.9%. As at March 31, 2022, the Trust had $2.6 billion of investment properties, $8.3 million of cash and cash equivalents, $271.3 million of undrawn credit facilities, $3.1 billion of total assets and $1.3 billion of total debt.
The novel coronavirus (“COVID-19”) pandemic continues to disrupt the Canadian economy. Repeated states of emergency and lockdowns as a result of emerging variants, most recently public health measures due to the Omicron variant in December 2021 and January 2022, have made it difficult for businesses to plan for the future. The full impact that these disruptions will have on the market for office space in the near term and the wider economy in general is unclear and difficult to predict. However, we believe that there will continue to be demand for high-quality and well-located office space in urban markets in Canada, especially in Toronto, when the economy normalizes. The Trust has ample financial resources to absorb near-term operational challenges and a program to drive value in the business through capital improvements and redevelopments to deliver best-in-class boutique office space to our tenants.
The COVID-19 pandemic delayed the construction timelines for the planned Bay Street corridor revitalization, but we are near completion of the interior renovation work, and façade improvements are scheduled to be finished this year. Since 2020, our successful redevelopment program has completed two projects on time and on budget that have significantly increased the value of the redeveloped properties and delivered significant incremental income to the Trust. 357 Bay Street in Toronto downtown was completed in Q4 2020 and in Q1 2022 contributed $3.0 million of annualized comparative properties NOI. Q3 2021 marked the completion of 1900 Sherwood Place in Regina, Saskatchewan, and the commencement of the 25-year Co-operators lease at the property. 1900 Sherwood Place generated $5.2 million of annualized NOI over Q1 2022. We are currently in the process of revitalizing 366 Bay Street in Toronto by fully modernizing the building’s systems, improving the building’s floorplates and upgrading the quality of the common areas. We are targeting a LEED Gold certification, among other certifications, as part of this development project. In addition, we have received zoning approval for 250 Dundas Street West in Toronto, have a zoning application underway for our property at Eglinton Avenue East and Birchmount Road in Scarborough, and are working on a development plan for 212 and 220 King Street West in Toronto.
We hold a stake in Dream Industrial REIT which continues to provide a meaningful contribution to our FFO as a result of the REIT’s successful European expansion and value-add strategy and the monthly distributions provide steady, predictable cash flow to the Trust at a time of uncertainty.
The effect of public health measures put in place as a response to the Omicron variant resulted in fewer property tours, lower building traffic and reduced parking lot utilization relative to Q4 2021. However, we believe that these effects are transitory and that the improvements in the latter half of 2021 will re-emerge during 2022.
During Q1 2022, the Trust executed leases totalling approximately 159,000 square feet across our portfolio. In Toronto downtown, the Trust executed 131,000 square feet of leases including the 54,000 square foot flexible workspace lease discussed previously. The remaining 78,000 square feet of leases were executed at a weighted average net rent of $32.07 per square foot, or 26.0% higher than the weighted average prior net rent per square foot on the same space, with a weighted average lease term of 5.2 years.
In the Other markets region we executed leases totalling 28,000 square feet at a weighted average net rent of $19.42 per square foot, an increase of 0.7% from the weighted average prior net rent on the same space, with a weighted average lease term of 7.2 years. To date, the Trust has secured commitments for approximately 659,000 square feet, or 82%, of 2022 full-year natural lease expiries, consistent with pre-COVID leasing trends. In Toronto downtown, 63,000 square feet, or approximately 1.8% of the region’s gross leaseable area, was being held intentionally vacant for retail repositioning and property improvement purposes as at March 31, 2022 of which the Trust has deals that were subsequently completed, are conditional or are in an advanced state of negotiation totalling 19,000 square feet.
Approximately 2% of the Trust’s total portfolio is currently sublet, with a weighted average in-place net rent of just over $25 per square foot.
The following table summarizes selected operational statistics with respect to the trailing four quarters and the month of April 2022 as at May 5, 2022, all presented as a percentage of recurring contractual gross rent:
* Deferral arrangements are presented net of subsequently received cash receipts.
Over the course of the COVID-19 pandemic, we have worked collaboratively with our tenants to help them manage the challenges within their businesses and be set up for long-term success when the pandemic has passed. The Canadian Emergency Rent Subsidy program ended during Q4 2021 and the Hardest-Hit Business Recovery Program was introduced. While the new program is harder for tenants to qualify for, we have not seen any significant change in rent collection patterns since its introduction. In certain instances, the Trust has granted deferrals and rent repayment arrangements to select tenants on a case-by-case basis.
For the three months ended March 31, 2022, the Trust recorded COVID-related provisions totalling approximately $0.6 million which are included in the line item “COVID-related provisions and adjustments” within net rental income. These provision balances represent an estimate of potential credit losses on our trade receivables for all uncollected rent during the three months ended March 31, 2022.
KEY FINANCIAL PERFORMANCE METRICS
Weighted average face rate of interest on debt (period-end)(9)
Interest coverage ratio (times)(10)
Net total debt-to-normalized adjusted EBITDAFV ratio (years)(11)
Level of debt (net total debt-to-net total assets)(8)
Average term to maturity on debt (years)
Undrawn credit facilities, available liquidityand unencumbered assets
Undrawn credit facilities
Available liquidity (in millions)(6)
Unencumbered assets (in millions)(7)
Total number of REIT A and LP B units (in millions)(12)
Net asset value (“NAV”) per unit(13)
See footnotes at end.
Canada Infrastructure Bank Commercial Building Retrofit Initiative: On March 31, 2022, the Trust entered into an unsecured non-revolving credit facility and term credit facility with the Canada Infrastructure Bank under its Commercial Building Retrofit Initiative. Under the facility, the Canada Infrastructure Bank will lend the trust up to $112.9 million, representing 80% of the cost of commercial property retrofits in order to achieve certain energy efficiency savings and greenhouse gas (“GHG”) emission reductions. The non-revolving credit facility is available until the earlier of March 31, 2027 or the completion of all funded projects, at which point the aggregate drawings are converted to a 20-year amortizing term credit facility. During the five-year non-revolving credit facility period, the accumulated drawings bear interest at an annual fixed rate of 2.147%. Subsequent to conversion, the 20-year amortizing term credit facility will bear interest at an annual fixed rate between 1.0% and 3.0% determined at the time of conversion based on the assessed GHG emission reductions achieved in aggregate with the financed projects.
Normal Course Issuer Bid (“NCIB”): For the three months ended March 31, 2022, the Trust purchased for cancellation 1,036,163 REIT A Units under the NCIB at a cost of $26.5 million. The Trust’s current NCIB program is now complete.
NAV per unit(13): As at March 31, 2022, our NAV per unit increased to $32.63 when compared to $31.49 at December 31, 2021. The increase in NAV per unit relative to December 31, 2021 was primarily due to cash flow retention (diluted FFO net of distributions), fair value gains on investment properties in Toronto downtown for four properties valued by qualified external valuation professionals, incremental income from our investment in Dream Industrial REIT and the effect of accretive unit repurchases under our NCIB program. As at March 31, 2021, equity per the condensed consolidated financial statements was $1.6 billion.
“Our partnership with the Canada Infrastructure Bank provides the Trust with a great source of capital to continue to improve our assets to a higher standard while doing our part to reduce greenhouse gas emissions in our portfolio,” said Jay Jiang, Chief Financial Officer of Dream Office REIT. “The facility will also enhance our liquidity and flexibility of our balance sheet so that we are able to reduce risk while remaining opportunistic.”
Dream Office REIT holds semi-annual conference calls following the release of second and fourth quarter results.
Information appearing in this press release is a selected summary of results. The condensed consolidated financial statements and Management’s Discussion and Analysis (“MD&A”) of the Trust are available at www.dreamofficereit.ca and on www.sedar.com.
Dream Office REIT is an unincorporated, open-ended real estate investment trust. Dream Office REIT is a premier office landlord in downtown Toronto with over 3.5 million square feet owned and managed. We have carefully curated an investment portfolio of high-quality assets in irreplaceable locations in one of the finest office markets in the world. We intend to enhance these properties to elevate their desirability to tenants and investors and improve the overall community experience. For more information, please visit our website at www.dreamofficereit.ca.
Excludes joint ventures that are equity accounted at the end of each period.
Excludes properties under development and joint ventures that are equity accounted at the end of each period.
FFO is a non-GAAP financial measure. The most directly comparable financial measure to FFO is net income. The tables included in the Appendices section of this press release reconcile FFO for the three months ended March 31, 2022 and March 31, 2021 to net income. For further information on this non-GAAP measure please refer to the statements under the heading “Non-GAAP Financial Measures, Ratios and Supplementary Financial Measures” in this press release.
Comparative properties NOI is a non-GAAP financial measure. The most directly comparable financial measure to comparative properties NOI is net rental income. The tables included in the Appendices section of this press release reconcile comparative properties NOI for the three months ended March 31, 2022 and March 31, 2021 to net rental income. For further information on this non-GAAP measure please refer to the statements under the heading “Non-GAAP Financial Measures, Ratios and Supplementary Financial Measures” in this press release.
Diluted FFO per unitis a non-GAAP ratio. Diluted FFO per unit is calculated as FFO (a non-GAAP financial measure) divided by weighted average number of units. For further information on this non-GAAP ratio, please refer to the statements under the heading “Non-GAAP Financial Measures, Ratios and Supplementary Financial Measures” in this press release. A description of the determination of the weighted average number of units can be found in the Trust’s Management’s Discussion and Analysis for the three months ended March 31, 2022 in the section “Supplementary Financial Measures and Other Disclosures” under the heading “Weighted average number of units”.
Available liquidity is a non-GAAP financial measure. The most directly comparable financial measure to available liquidity is undrawn credit facilities. The tables included in the Appendices section of this press release reconcile available liquidity to undrawn credit facilities as at March 31, 2022 and December 31, 2021. For further information on this non-GAAP financial measure please refer to the statements under the heading “Non-GAAP Financial Measures, Ratios and Supplementary Financial Measures” in this press release.
Unencumbered assets is a supplementary financial measure. For further information on this supplementary financial measure, please refer to the statements under the heading “Non-GAAP Financial Measures, Ratios and Supplementary Financial Measures” in this press release.
Level of debt (net total debt-to-net total assets) is a non-GAAP ratio. Net total debt-to-net total assets comprises net total debt (a non-GAAP financial measure) divided by net total assets (a non-GAAP financial measure). The tables in the appendices section reconcile net total debt and net total assets to total debt and total assets, respectively, as at March 31, 2022 and December 31, 2021. For further information on this non-GAAP ratio, please refer to the statements under the heading “Non-GAAP Financial Measures, Ratios and Supplementary Financial Measures” in this press release.
Weighted average face rate of interest on debt is calculated as the weighted average face rate of all interest-bearing debt balances excluding debt in joint ventures that are equity accounted.
Interest coverage ratio (times) is a non-GAAP ratio. Interest coverage ratio comprises trailing 12-month adjusted EBITDAFV divided by trailing 12-month interest expense on debt. Adjusted EBITDAFV, trailing 12-month Adjusted EBITDAFV and trailing 12-month interest expense on debt are non-GAAP measures. The tables in the Appendices section reconcile adjusted EBITDAFV to net income for the three months ended March 31, 2022 and March 31, 2021 and for the year ended December 31, 2021 and trailing 12-month adjusted EBITDAFV and trailing 12-month interest expense to adjusted EBITDAFV and interest expense, respectively, for the trailing 12-month period ended March 31, 2022. For further information on this non-GAAP ratio, please refer to the statements under the heading “Non-GAAP Financial Measures and Ratios and Supplementary Financial Measures” in this press release.
Net total debt-to-normalized adjusted EBITDAFV ratio (years) is a non-GAAP ratio. Net total debt-to-normalized adjusted EBITDAFV comprises net total debt (a non-GAAP financial measure) divided by normalized adjusted EBITDAFV (a non-GAAP financial measure). Normalized adjusted EBITDAFV comprises adjusted EBITDAFV (a non-GAAP measure) adjusted for NOI from sold properties in the quarter. For further information on this non-GAAP ratio, please refer to the statements under the heading “Non-GAAP Financial Measures and Ratios and Supplementary Financial Measures” in this press release.
Total number of REIT A and LP B units includes 5.2 million LP B Units which are classified as a liability under IFRS.
NAV per unit is a non-GAAP ratio. NAV per unit is calculated as Total equity (including LP B Units) divided by the total number of REIT A and LP B units outstanding as at the end of the period. Total equity (including LP B Units) is a non-GAAP measure. The most directly comparable financial measure to total equity (including LP B Units) is equity. The tables included in the appendices section of this press release reconcile total equity (including LP B Units) to equity as at March 31, 2022 and December 31, 2021. For further information on this non-GAAP measure please refer to the statements under the heading “Non-GAAP Financial Measures, Ratios and Supplementary Financial Measures” in this press release.
NON-GAAP FINANCIAL MEASURES, RATIOS AND SUPPLEMENTARY FINANCIAL MEASURES
The Trust’s condensed consolidated financial statements are prepared in accordance with International Financial Reporting Standards (“IFRS”). In this press release, as a complement to results provided in accordance with IFRS, the Trust discloses and discusses certain non-GAAP financial measures, including FFO, comparative properties NOI and available liquidity, and non-GAAP ratios, including diluted FFO per unit, level of debt (net total debt-to-net total assets), interest coverage ratio, net total debt-to-normalized adjusted EBITDAFV and NAV per unit, as well as other measures discussed elsewhere in this release. These measures and ratios are not standardized financial measures under IFRS and might not be comparable to similar financial measures disclosed by other issuers. The Trust has presented such non-GAAP measures and non-GAAP ratios as Management believes they are relevant measures of the Trust’s underlying operating and financial performance. Certain additional disclosures such as the composition, usefulness and changes, as applicable, of the non-GAAP financial measures and ratios included in this press release have been incorporated by reference from the management’s discussion and analysis of the financial condition and results from operations of the Trust for the three months ended March 31, 2022, dated May 5, 2022 (the “MD&A for the first quarter of 2022”) and can be found under the section “Non-GAAP Financial Measures and Ratios” and respective sub-headings labelled “Funds from operations and diluted FFO per unit”, “Comparative properties NOI”, “Level of debt (net total debt-to-net total assets)”, “Net total debt-to-normalized adjusted EBITDAFV ratio (years)”, “Interest coverage ratio”, “Available liquidity” and “Net asset value (“NAV”) per Unit”. The composition of supplementary financial measures included in this press release have been incorporated by reference from the MD&A for the first quarter of 2022 and can be found under the section “Supplementary financial measures and ratios and other disclosures”. The MD&A for the first quarter of 2022 is available on SEDAR at www.sedar.com under the Trust’s profile and on the Trust’s website at www.dreamofficereit.ca under the Investors section. Non-GAAP measures should not be considered as alternatives to net income, net rental income, cash flows generated from (utilized in) operating activities, cash and cash equivalents, total assets, non-current debt, total equity, or comparable metrics determined in accordance with IFRS as indicators of the Trust’s performance, liquidity, leverage, cash flow, and profitability. Reconciliations to the nearest comparable financial measure are contained at the end of this press release.
This press release may contain forward-looking information within the meaning of applicable securities legislation, including, but not limited to, statements regarding our objectives and strategies to achieve those objectives, our ability to increase the desirability, occupancy and liquidity of our buildings; the effect of building improvements on tenant experience and building quality and performance; our expectations regarding the COVID-19 pandemic and the timing of current and prospective tenants’ return to the office and its effect on our business and financial metrics, including in respect of leasing, building traffic and our revenues; our expectations regarding future demand for office space in urban markets in Canada; our ability to achieve building certifications; anticipated financial performance of tenants with percentage rent arrangements; our development, redevelopment and intensification plans and timelines, and the effect of these plans on the value and quality of our portfolio; our future capital requirements and ability to meet those requirements; our asset management strategies and prospective leasing activity and our overall financial performance, profitability and liquidity for future periods and years. Forward-looking statements generally can be identified by words such as “outlook”, “objective”, “may”, “will”, “would”, “expect”, “intend”, “estimate”, “anticipate”, “believe”, “should”, “could”, “likely”, “plan”, “project”, “budget”, or “continue” or similar expressions suggesting future outcomes or events. Forward-looking information is based on a number of assumptions and is subject to a number of risks and uncertainties, many of which are beyond Dream Office REIT’s control, which could cause actual results to differ materially from those that are disclosed in or implied by such forward-looking information. These risks and uncertainties include, but are not limited to, general and local economic and business conditions; the impact of the COVID-19 pandemic on the Trust; the effect of government restrictions on leasing and building traffic; employment levels; mortgage and interest rates and regulations; the uncertainties around the timing and amount of future financings; leasing risks, including those associated with the ability to lease vacant space; rental rates on future leasing; and interest and currency rate fluctuations. Our objectives and forward-looking statements are based on certain assumptions, including that the general economy remains stable, interest rates remain stable, conditions within the real estate market remain consistent, that government restrictions due to COVID-19 on the ability of us and our tenants to operate their businesses at our properties will continue to ease and will not be re-imposed in any material respects, competition for acquisitions remains consistent with the current climate, and that the capital markets continue to provide ready access to equity and/or debt. All forward-looking information in this press release speaks as of the date of this press release. Dream Office REIT does not undertake to update any such forward-looking information whether as a result of new information, future events or otherwise except as required by law. Additional information about these assumptions and risks and uncertainties is contained in Dream Office REIT’s filings with securities regulators, including its latest annual information form and MD&A. These filings are also available at Dream Office REIT’s website at www.dreamofficereit.ca.
Funds from operations and diluted FFO per unit
Three months ended March 31,
Net income for the period
Share of net income from investment in Dream Industrial REIT
Share of FFO from investment in Dream Industrial REIT
Depreciation and amortization
Costs (recovery) attributable to sale of investment properties(1)
Interest expense on subsidiary redeemable units
Fair value adjustments to investment properties
Fair value adjustments to investment properties held in joint ventures
Fair value adjustments to financial instruments and DUIP included in G&A expenses
Internal leasing costs
Principal repayments on finance lease liabilities
Deferred income taxes expense (recovery)
FFO for the period
Diluted weighted average number of units(2)
FFO per unit – diluted
Includes both continuing and discontinued operations.
Diluted weighted average number of units includes the weighted average of all REIT A Units, LP B Units, vested but unissued and unvested deferred trust units and associated income deferred trust units.
Comparative properties NOI
Three months ended
Comparative properties NOI
1900 Sherwood Place
Property under development
Property management and other service fees
COVID-related provisions and adjustments
Amortization of lease incentives
Lease termination fees and other
Net rental income from continuing operations
Undrawn credit facilities
Cash and cash equivalents
Level of debt (net total debt-to-net total assets)
Amounts included in condensed consolidated financial statements
Less: Cash on hand
Net total debt
Less: Cash on hand
Net total assets
Net total debt-to-net total assets
Three months ended
Net income for the period
Interest – debt
Interest – subsidiary redeemable units
Current and deferred income taxes expense (recovery), net
Depreciation on property and equipment
Fair value adjustments to investment properties
Fair value adjustments to financial instruments
Share of net income from investment in Dream Industrial REIT
Distributions received from Dream Industrial REIT
Share of net loss from investment in joint ventures
Non-cash items included in investment properties revenue(1)
Government assistance and COVID-related provisions
Lease termination fees and other
Net losses (gains) on transactions and other items(2)
Adjusted EBITDAFV for the period
Includes adjustments for straight-line rent and amortization of lease incentives.
Includes both continuing and discontinued operations.
Trailing 12-month Adjusted EBITDAFV and trailing 12-month interest expense on debt
Trailing 12-month period
ended March 31, 2022
Adjusted EBITDAFV for the three months ended March 31, 2022
Add: Adjusted EBITDAFV for the year ended December 31, 2021
Less: Adjusted EBITDAFV for the three months ended March 31, 2021
Trailing 12-month Adjusted EBITDAFV
Trailing 12-month period
ended March 31, 2022
Interest expense on debt for the three months ended March 31, 2022
Add: Interest expense on debt for the year ended December 31, 2021
Less: Interest expense on debt for the three months ended March 31, 2021
Trailing 12-month interest expense on debt
Interest coverage ratio (times)
For the trailing 12-month period ended
Trailing 12-month Adjusted EBITDAFV
Interest expense on debt
Interest coverage ratio (times)
Net total debt-to-normalized adjusted EBITDAFV ratio (years)
Less: Cash on hand(1)
Net total debt
Adjusted EBITDAFV – quarterly
Less: NOI of disposed properties for the quarter
Normalized adjusted EBITDAFV – quarterly
Normalized adjusted EBITDAFV – annualized
Net total debt-to-normalized adjusted EBITDAFV ratio (years)
Cash on hand represents cash on hand at period-end, excluding cash held in co-owned properties and joint ventures that are equity accounted.
NAV per unit
March 31, 2022
December 31, 2021
Number of Units
Number of Units
Accumulated other comprehensive income (loss)
Equity per condensed consolidated financial statements
LONDON — When Jakob Bitner was 7, he left Russia for Germany with his parents and sister. Twenty-eight years later, he is set on solving a vexing green-energy problem that could help Germany end its dependence on imported energy from Russia, or anywhere.
The problem: how to make wind and solar energy available 24 hours a day, seven days a week, even if the sun is not shining or the wind not blowing.
The company that Mr. Bitner co-founded in Munich in 2016, VoltStorage, found some success selling storage battery packs for solar power to homeowners in Europe. Now the company is developing much larger batteries — each about the size of a shipping container — based on a chemical process that can store and discharge electricity over days, not just hours like today’s most popular battery technology.
These ambitions to overcome the unreliable nature of renewable energy fit perfectly with Europe’s targets to reduce dependence on fossil fuels. But Mr. Bitner’s company is facing a frustrating reality that threatens to undercut Europe’s plans and poses a wider challenge in the global fight against climate change: a lack of money to finish the job.
plenty of capital available globally for the multitrillion-dollar task of funding this transition to greener energy.
Europe’s Shift Away From Fossil Fuels
The European Union has begun a transition to greener forms of energy. But financial and geopolitical considerations could complicate the efforts.
The war in Ukraine has made Europe’s energy transition even more urgent. The European Union has said it will cut imported Russian natural gas by two-thirds this year and completely by the end of the decade. While some of that supply will be made up by imports from other countries, such as the United States and Qatar, expanding domestic renewable energy capacity is a critical pillar to this plan.
But attracting investors to projects trying to move beyond mature technologies like solar and wind power is tough. Venture capitalists, once cheerleaders of green energy, are more infatuated with cryptocurrencies and start-ups that deliver groceries and beer within minutes. Many investors are put off by capital-intensive investments. And governments have further muddied the water with inconsistent policies that undermine their bold pledges to reduce carbon emissions.
Venture capitalists’ other interests
Tony Fadell, who spent most of his career trying to turn emerging technologies into mainstream products as an executive at Apple and founder of Nest, said that even as the world faced the risks of climate change, money was flooding into less urgent developments in cryptocurrency, the so-called metaverse and the digital art collections sold as NFTs. Last year, venture capitalists invested $11.9 billion in renewable energy globally, compared with $30.1 billion in cryptocurrency and blockchain, according to PitchBook.
Of the $106 billion invested by venture capitalists in European start-ups last year, just 4 percent went into energy investments, according to PitchBook.
“We need to get real,” said Mr. Fadell, who now lives in Paris and has proposed ideas on energy policy to the French government. “Too many people are investing in the things that are not going to fix our existential problems. They are just investing in fast money.”
It has not helped that the industry has been burned before by a green tech boom. About 15 years ago, environmentally conscious start-ups were seen as the next big thing in Silicon Valley. One of the premier venture capital firms, Kleiner Perkins Caufield & Byers, made former Vice President Al Gore a partner and pledged that clean energy would eventually make up at least a third of its total investments.Instead, Kleiner became a cautionary tale about the risks of investing in energy-related companies as the firm missed out on early backing of social media companies like Facebook and Twitter.
There is evidence that these old fears are receding. Two years ago 360 Capital, a venture capital firm based in Paris and Milan dealing in early-stage investment, introduced a dedicated fund investing in clean energy and sustainability companies. The firm is now planning to open up the fund to more investors, expanding it to €150 million from a €30 million fund.
There are a growing number of dedicated funds for energy investments. But even then there is a tendency for the companies in them to be software developers, deemed less risky than builders of larger-scale energy projects. Four of the seven companies backed by 360 Capital’s new fund are artificial intelligence companies and software providers.
Still, the situation has changed completely since the company’s first major green-energy investment in 2008, Fausto Boni, the firm’s founder, said. “We see potentially lots of money coming into the sector, and so many of the issues we had 15 years ago are on their way to being overcome,” he said. But the availability of bigger investments needed to help companies expand in Europe still lags behind, he added.
The funding gap
Breakthrough Energy Catalyst, which is backed by Bill Gates, is trying to fill the gap. It was formed in late 2021 to help move promising technology from development to commercial use. In Europe, it is a $1 billion initiative with the European Commission and European Investment Bank to support four types of technologies — long-duration energy storage, clean hydrogen, sustainable aviation fuels and direct air capture of carbon dioxide — that it believes need to scale quickly.
In Europe, there are “significant difficulties with the scaling-up phase,” said Ann Mettler, the vice president for Europe at Breakthrough Energy and a former director general at the European Commission. There is money for start-ups, but when companies become reasonably successful and a bit larger, they are often acquired by American or Chinese companies, she said. This leaves fewer independent companies in Europe focused on the energy problems they set out to solve.
Companies that build complex — and often expensive — hardware, like Mr. Bitner’s batteries for long-duration energy storage, have an especially hard time finding investors willing to stomach the risks. After a few investment rounds, the companies are too big for early-stage investors but too small to appeal to institutional investors looking for safer places to park large amounts of cash.
“If you look at typical climate technologies, such as wind and solar and even the lithium-ion batteries, they took well over four decades to go from the early R&D to the large-scale commercialization and cost competitiveness,” Ms. Mettler said, referring to research and development. “Four decades — which obviously we don’t have.”
What investors want
There are some signs of improvement, including more funds focused on clean energy or sustainability and more companies securing larger investment rounds. But there is a sense of frustration as investors, companies and European governments agree that innovation and adoption of new technology need to happen much more quickly to reduce carbon emissions sharply by 2030.
“You won’t find a place in the world that is more attuned to what is needed than Europe,” Ms. Mettler said. “It’s not for lack of ambition or vision — it’s difficult.”
But investors say government policy can help them more. Despite climate pledges, the regulations and laws in place haven’t created strong enough incentives for investments in new technologies.
Industries like steel and concrete have to be forced to adopt greener methods of production, Mr. Boni, the 360 Capital founder, said.
For energy storage, hydrogen, nuclear power and other large-scale projects, the government should expedite permitting, cut taxes and provide matching funds, said Mr. Fadell, who has put his personal fortune into Future Shape, which backs start-ups addressing societal challenges.
“There are few investors willing to go all in to put up $200 million or $300 million,” Mr. Fadell said. “We need to know the government is on our side.”
At the Siemens Gamesa factory in Aalborg, Denmark, where the next generation of offshore wind turbines is being built, workers are on their hands and knees inside a shallow, canoe-shaped pod that stretches the length of a football field. It is a mold used to produce one half of a single propeller blade. Guided by laser markings, the crew is lining the sides with panels of balsa wood.
The gargantuan blades offer a glimpse of the energy future that Europe is racing toward with sudden urgency. The invasion of Ukraine by Russia — the European Union’s largest supplier of natural gas and oil — has spurred governments to accelerate plans to reduce their dependence on climate-changing fossil fuels. Armed conflict has prompted policymaking pledges that the more distant threat of an uninhabitable planet has not.
Smoothly managing Europe’s energy switch was always going to be difficult. Now, as economies stagger back from the second year of the pandemic, Russia’s attack on Ukraine grinds on and energy prices soar, the painful trade-offs have crystallized like never before.
Moving investments away from oil, gas and coal to sustainable sources like wind and solar, limiting and taxing carbon emissions, and building a new energy infrastructure to transmit electricity are crucial to weaning Europe off fossil fuels. But they are all likely to raise costs during the transition, an extremely difficult pill for the public and politicians to swallow.
unwinding efforts to shut coal mines and stop drilling new oil and gas wells to replace Russian fuel and bring prices down.
proposed a carbon tax on imports from carbon-producing sectors like steel and cement.
And it has led the way in generating wind power, especially from ocean-based turbines. Siemens Gamesa Renewable Energy, for example, has been instrumental in planting rows of colossal whirligigs at sea that can generate enough green energy to light up cities.
Europe, too, is on the verge of investing billions in hydrogen, potentially the multipurpose clean fuel of the future, which might be generated by wind turbines.
halted approval of Nord Stream 2, an $11 billion gas pipeline under the Baltic Sea that directly links Russia to northeastern Germany.
As Ursula von der Leyen, the European Commission president, said when she announced a plan on March 8 to make Europe independent of Russian fossil fuels: “We simply cannot rely on a supplier who explicitly threatens us.” The proposal calls for member nations to reduce Russian natural gas imports by two-thirds by next winter and to end them altogether by 2027 — a very tall order.
This week, European Union leaders are again meeting to discuss the next phase of proposals, but deep divisions remain over how to manage the current price increases amid anxieties that Europe could face a double whammy of inflation and recession.
On Monday, United Nations Secretary General António Guterres warned that intense focus on quickly replacing Russian oil could mean that major economies “neglect or kneecap policies to cut fossil fuel use.”
price of palladium, used in automotive exhaust systems and mobile phones, has been soaring amid fears that Russia, the world’s largest exporter of the metal, could be cut off from global markets. The price of nickel, another key Russian export, has also been rising.
Financial turmoil. Global banks are bracing for the effects of sanctions intended to restrict Russia’s access to foreign capital and limit its ability to process payments in dollars, euros and other currencies crucial for trade. Banks are also on alert for retaliatory cyberattacks by Russia.
Mr. Rasmussen and other executives added that identifying suitable areas for wind turbines and obtaining permits required for construction take “far too long.” Challenges are based on worries that the vast arrays of turbines will interfere with fishing, obstruct naval exercises and blight views from summer houses.
To Kadri Simson, Europe’s commissioner for energy, renewable energy projects should be treated as an “overriding public interest,” and Europe should consider changing laws to facilitate them.
“We cannot talk about a renewables revolution if getting a permit for a wind farm takes seven years,” Ms. Simson said.
Still, environmental regulations and other rules relating to large infrastructure installations are usually the province of countries rather than European Union officials in Brussels.
And steadfast opposition from communities and industries invested in fossil fuels make it hard for political leaders to fast-track energy transition policies.
In Upper Silesia, Poland’s coal basin, bright yellow buses display signs that boast they run on 100 percent electric, courtesy of a grant from the European Union. But along the road, large billboards mounted before the invasion of Ukraine by state-owned utilities — erroneously — blame Brussels for 60 percent of the rise in energy prices.
Down in the Wujek coal mine, veterans worry if their jobs will last long enough for them to log the 25 years needed to retire with a lifelong pension. Closing mines not only threatens to devastate the economy, several miners said, but also a way of life built on generations of coal mining.
“Pushing through the climate policy forcefully may lead to a drastic decrease in the standard of living here,” said Mr. Kolorz at Solidarity’s headquarters in Katowice. “And when people do not have something to put on the plate, they can turn to extreme populism.”
Climate pressures are pushing at least some governments to consider steps they might not have before.
German officials have determined that it is too costly to keep the country’s last three remaining nuclear power generators online past the end of the year. But the quest for energy with lower emissions is leading to a revival of nuclear energy elsewhere.
Britain and France say they plan to invest in smaller nuclear reactors that can be produced in larger numbers to bring down costs.
Britain might even build a series of small nuclear fusion reactors, a promising but still unproven technology. Ian Chapman, chief executive of the U.K. Atomic Energy Authority, said every route to clean energy must be tried if there is to be any hope of reaching net zero emissions in three decades, the deadline for avoiding catastrophic climate change. “We’ve got to do everything we possibly can,” he said.
In the short term, much of what the European Union is proposing involves switching the source of fossil fuels, and, in particular, natural gas, from Russia to other suppliers like the United States, Qatar and Azerbaijan, and filling up storage facilities as a buffer. The risk is that Europe’s actions will further raise prices, which are already about five times higher than a year ago, in a market where supplies are short in part because companies are wary of investing in a fuel that the world ultimately wants to phase out.
Over the longer term, Europe and Britain seem likely to accelerate their world-leading rollout in renewable energy and other efforts to cut emissions despite the enormous costs and intense disruptions.
“The E.U. will almost certainly throw hundreds of billions of euros at this,” said Henning Gloystein, a director for energy and climate at Eurasia Group, a political risk firm. “Once the trains have left the station, they can’t be reversed.”
The appeal of off-grid homes has grown in part because utilities have become less reliable. As natural disasters linked to climate change have increased, there have been more extended blackouts in California, Texas, Louisiana and other states.
A Critical Year for Electric Vehicles
The popularity of battery-powered cars is soaring worldwide, even as the overall auto market stagnates.
Californians are also upset that electricity rates keep rising and state policymakers have proposed reducing incentives for installing solar panels on homes connected to the grid. Installing off-grid solar and battery systems is expensive, but once the systems are up and running, they typically require modest maintenance and homeowners no longer have an electric bill.
RMI, a research organization formerly known as the Rocky Mountain Institute, has projected that by 2031 most California homeowners will save money by going off the grid as solar and battery costs fall and utility rates increase. That phenomenon will increasingly play out in less sunny regions like the Northeast over the following decades, the group forecasts.
David Hochschild, chairman of the California Energy Commission, a regulatory agency, said the state’s residents tend to be early adopters, noting that even a former governor, Jerry Brown, lives in an off-grid home. But Mr. Hochschild added that he was not convinced that such an approach made sense for most people. “We build 100,000 new homes a year in California, and I would guess 99.99 percent of them are connected to the grid,” he said.
Some energy experts worry that people who are going off the grid could unwittingly hurt efforts to reduce greenhouse gas emissions. That is because the excess electricity that rooftop solar panels produce will no longer reach the grid, where it can replace power from coal or natural gas plants. “We don’t need everybody to cut the cord and go it alone,” said Mark Dyson, senior principal with the carbon-free electricity unit of RMI.
Solar Panels and a View
Pepe Cancino moved from Santa Monica to Nevada County in 2020 after he and his wife, Diane, lost their jobs during the pandemic. They bought five acres with spectacular views of snow-capped mountains. Mr. Cancino, 42, a former home health care worker, picked up a chain saw and an ax and began learning how to build a house and generate his own power.
When they finish their two-bedroom, two-and-a-half-bathroom home this fall, the family, including their 15-year-old daughter, will generate electricity and use a well for water.
Sales of cars powered solely by batteries surged in the United States, Europe and China last year, while deliveries of fossil fuel vehicles were stagnant. Demand for electric cars is so strong that manufacturers are requiring buyers to put down deposits months in advance. And some models are effectively sold out for the next two years.
Battery-powered cars are having a breakthrough moment and will enter the mainstream this year as automakers begin selling electric versions of one of Americans’ favorite vehicle type: pickup trucks. Their arrival represents the biggest upheaval in the auto industry since Henry Ford introduced the Model T in 1908 and could have far-reaching consequences for factory workers, businesses and the environment. Tailpipe emissions are among the largest contributors to climate change.
While electric vehicles still account for a small slice of the market — nearly 9 percent of the new cars sold last year worldwide were electric, up from 2.5 percent in 2019, according to the International Energy Agency — their rapid growth could make 2022 the year when the march of battery-powered cars became unstoppable, erasing any doubt that the internal combustion engine is lurching toward obsolescence.
The proliferation of electric cars will improve air quality and help slow global warming. The air in Southern California is already a bit cleaner thanks to the popularity of electric vehicles there. And the boom is a rare piece of good news for President Biden, who has struggled to advance his climate agenda in Congress.
more than a dozen new electric car and battery factories just in the United States.
“It’s one of the biggest industrial transformations probably in the history of capitalism,” Scott Keogh, chief executive of Volkswagen Group of America, said in an interview. “The investments are massive, and the mission is massive.”
But not everyone will benefit. Makers of mufflers, fuel injection systems and other parts could go out of business, leaving many workers jobless. Nearly three million Americans make, sell and service cars and auto parts, and industry experts say producing electric cars will require fewer workers because the cars have fewer components.
Over time, battery ingredients like lithium, nickel and cobalt could become more sought after than oil. Prices for these materials are already skyrocketing, which could limit sales in the short term by driving up the cost of electric cars.
The transition could also be limited by the lack of places to plug in electric cars, which has made the vehicles less appealing to people who drive long distances or apartment residents who can’t charge at home. There are fewer than 50,000 public charging stations in the United States. The infrastructure bill that Congress passed in November includes $7.5 billion for 500,000 new chargers, although experts say even that number is too small.
could take decades unless governments provide larger incentives to car buyers. Cleaning up heavy trucks, one of the biggest sources of greenhouse gas emissions, could be even harder.
Still, the electric car boom is already reshaping the auto industry.
The biggest beneficiary — and the biggest threat to the established order — is Tesla. Led by Elon Musk, the company delivered nearly a million cars in 2021, a 90 percent increase from 2020.
Tesla is still small compared with auto giants, but it commands the segment with the fastest growth. Wall Street values the company at about $1 trillion, more than 10 times as much as General Motors. That means Tesla, which is building factories in Texas and Germany, can easily expand.
“At the rate it’s growing now, it will be bigger than G.M. in five years,” said John Casesa, a former Ford executive who is now a senior managing director at Guggenheim Securities, at a Federal Reserve Bank of Chicago forum in January.
Most analysts figured that electric vehicles wouldn’t take off until they became as inexpensive to buy as gasoline models — a milestone that is still a few years away for moderately priced cars that most people can afford.
But as extreme weather makes the catastrophic effects of climate change more tangible, and word gets around that electric cars are easy to maintain, cheap to refuel and fun to drive, affluent buyers are increasingly going electric.
outsold diesel cars in Europe for the first time. In 18 countries, including Britain, more than 20 percent of new cars were electric, according to Matthias Schmidt, an independent analyst in Berlin.
Inevitably, a transition this momentous will cause dislocation. Most new battery and electric car factories planned by automakers are in Southern states like Georgia, Kentucky, North Carolina and Tennessee. Their gains could come at the expense of the Midwest, which would lose internal combustion production jobs.
Toyota, a pioneer in hybrid vehicles, will not offer a car powered solely by batteries until later this year. Ram does not plan to release a competitor to Ford’s Lightning until 2024.
Chinese companies like SAIC, which owns the British MG brand, are using the technological shift to enter Europe and other markets. Young companies like Lucid, Rivian and Nio aim to follow Tesla’s playbook.
Old-line carmakers face a stiff learning curve. G.M. recalled its Bolt electric hatchback last year because of the risk of battery fires.
The companies most endangered may be small machine shops in Michigan or Ontario that produce piston rings and other parts. At the moment, these businesses are busy because of pent-up demand for all vehicles, said Carla Bailo, chief executive of the Center for Automotive Research in Ann Arbor, Mich.
“A lot of them kind of have blinders on and are not looking that far down the road,” Ms. Bailo said “That’s troubling.”
That number is growing quickly. Amazon is several years — and tens of billions of dollars — into a huge push to deliver packages, shifting away from relying on large carriers like UPS. To begin the expansion, Amazon ordered 20,000 diesel Sprinter vans from Mercedes-Benz.
Through its network of contractors, Amazon now delivers more than half of its orders globally, and far more in the United States. Amazon has six times as many delivery depots now as it did in 2017, with at least 50 percent more new facilities set to open this year, according to data from MWPVL, a logistics consultancy.
That logistics boom, accelerated by the pandemic’s shift to online shopping, multiplies the challenges the company faces in meeting its pledge to reduce its climate impact. Its vow to make half of its deliveries carbon-neutral by 2030 is part of the company’s broader pledge to be net-carbon-neutral by 2040.
“Electrification of their delivery fleet is a really important part of that strategy,” said Anne Goodchild, who leads the University of Washington’s work on supply chain, logistics and freight transportation.
Delivery vans are well suited to electric propulsion because they usually travel 100 miles or under in a day, which means they don’t need large battery packs that add to the cost of electric cars. Delivery trucks are often used during the day and can be recharged overnight, and usually require less maintenance than gasoline trucks. Electric vehicles don’t have transmissions and certain other mechanical components that wear out quickly in the heavy stop-and-go typical in delivery routes.
In September 2019, when Mr. Bezos announced Amazon’s huge Rivian order — the largest ever order of electric vehicles — he positioned it as central to Amazon’s commitment to reduce its carbon footprint. At the time, he said he expected the 100,000 vans to be on the road “by 2024.”
Amazon invested at least $1.3 billion in Rivian, which Amazon says is supposed to make 10,000 vans as early as this year. Amazon also locked up exclusive rights to Rivian’s commercial vans for four years, with the right of first refusal for two years after that. The companies have been testing the vans for almost a year.
Even if you didn’t experience the famine personally you must have been deeply aware of it and affected by it.
A thousand percent. First of all, you have to remember we come from massive families. My mom has 24 siblings. And you grow up very much aware of it. I grew up in a country where fuel was rationed, where food, sugar, toilet paper was rationed no matter who you are. It didn’t matter if you lived in Addis or outside of Addis. When toilet paper shortages happened during Covid and everybody was running to stock up, I was like, “I don’t know why you’re stocking up. I have like 80 rolls of toilet paper.”
People were like, “Why do you have 80 rolls of toilet paper?” And I was like, “Is that not how one lives in life? In fear that things might run out?” But it is how we were raised, very much aware that you can’t take anything for granted, that anything can disappear. We had neighbors that disappeared.
How did you wind up coming to the United States for college?
I studied really, really hard. I wanted to get out. My parents sacrificed absolutely everything to send us to the best school in the country, and I knew every day that my obligation to them was to do well, because they gave up most of their income to make sure we went to that school.
Also, my dad was born in an Italian prison. My grandfather orchestrated the plot to kill General Graziani when Mussolini tried to colonize Ethiopia, and it ended up costing his life. They assassinated my grandfather when my grandmother was pregnant with my dad, and they took her as a prisoner of war to Italy, and she gave birth to my dad in an Italian prison. So I was raised in a pretty strong family, in that fighting for survival kind of way, and I just felt like I owed it to my family to do well in life.
When you joined Morgan Stanleydid you figure you wanted to be in finance for the rest of your life, or were you saying, “I got to get out of here as fast as I can”?
I decided that the only job I would take in finance would be to work in commodities. It was the only section of finance that I felt was connected to the real world and all the things I cared about. One day I got up and I decided I was ready to trade. So I went to my boss and said, “Hey, you’re going to hire me to trade natural gas.” He was like, “I’m not hiring.” And I was like, “No, no, you’re going to hire me.” And he did, so I started trading gas, and then he got promoted, and I took over that business.
Leaders of more than 100 countries, including Brazil, China and the United States, vowed on Monday at climate talks in Glasgow to end deforestation by 2030, seeking to preserve forests crucial to absorbing carbon dioxide and slowing the rise in global warming.
The pledge will demand “transformative further action,” the countries’ declaration said, and it was accompanied by several measures intended to help put it into effect. But some advocacy groups criticized them as lacking teeth, saying they would allow deforestation to continue.
Prime Minister Boris Johnson of Britain was scheduled to announce the deforestation agreement at an event on Tuesday morning attended by President Biden and the president of Indonesia, Joko Widodo.
“These great teeming ecosystems — these cathedrals of nature — are the lungs of our planet,” Mr. Johnson is expected to say.
climate summit, known as COP26. Intact forests and peatlands, for example, are natural storehouses of carbon, keeping it sealed away from the atmosphere. But when these areas are logged, burned or drained, the ecosystems switch to releasing greenhouse gases.
If tropical deforestation were a country, it would be the third-biggest emitter of greenhouse gases in the world, according to the World Resources Institute, after China and the United States. Much of the world’s deforestation is driven by commodity agriculture as people fell trees to make room for cattle, soy, cocoa and palm oil.
even make rain, supporting agriculture elsewhere. They are fundamental to sustaining biodiversity, which is suffering its own crisis as extinction rates climb.
Previous efforts to protect forests have struggled. One program recognized in the Paris climate accord seeks to pay forested nations for reducing tree loss, but progress has been slow.
Previous promises to end deforestation also have failed. A United Nations plan announced in 2017 made similar commitments. An agreement in 2014 to end deforestation by 2030, the New York Declaration on Forests, set goals without a means to achieve them, and deforestation continued.
The same will happen this time, some environmentalists predicted.
“It allows another decade of forest destruction and isn’t binding,” said Carolina Pasquali, executive director of Greenpeace Brazil. “Meanwhile, the Amazon is already on the brink and can’t survive years more deforestation.”
Supporters of the new pledge point out that it expands the number of countries and comes with specific steps to save forests.
“What we’re doing here is trying to change the economics on the ground to make forests worth more alive than dead,” said Eron Bloomgarden, whose group, Emergent, helps match public and private investors with forested countries and provinces looking to receive payments for reducing deforestation.
The participating governments promised “support for smallholders, Indigenous Peoples and local communities, who depend on forests for their livelihoods and have a key role in their stewardship.”
have begun emitting more carbon than they store.
China is one of the biggest signatories to the deforest declaration, but the country’s top leader, Xi Jinping, did not attend the climate negotiations in Glasgow. China suffered heavy forest losses as its population and industry grew over the past decades, but more recently, it has pledged to regrow forests and to expand sustainable tree farming.
By China’s estimate, forests now cover about 23 percent of its landmass, up from 17 percent in 1990, according to the World Bank. Though some research has questioned the scale and the quality of that expanded tree cover, the government has made expanded reforestation a pillar of its climate policies, and many areas of the country are notably greener than they were a couple of decades ago.
Still, China’s participation in the new pledge may also test its dependence on timber imported from Russia, Southeast Asia and African countries, including large amounts of illegally felled trees.
In a written message to the Glasgow meeting, Mr. Xi “stressed the responsibility of developed countries in tackling climate change, saying that they should not only do more themselves, but should also provide support to help developing countries do better,” Xinhua news agency reported.
LONDON — As Britain prepares to host a landmark climate summit in Glasgow this week, the milestones of its own evolution to a more climate-friendly economy are on vivid display along the railroad line from London to Scotland.
Near Gainsborough, a river town 150 miles north of the capital, one of Britain’s last coal-fired power plants still spews carbon dioxide and other gases into the air. Another 150 miles north, off the coast of the seaside port of Blyth, the slender blades of five turbines in an offshore wind farm turn lazily in the breeze.
The two plants, both owned by the French utility giant EDF, illustrate how far Britain has come. The coal station, restarted recently to cover a shortfall in electricity, is slated to be taken out of operation next year, while the company plans to install experimental floating turbines in the waters off Blyth.
“We’re talking about a huge transition,” said Paul Spence, the director of strategy and corporate affairs at EDF, referring to Britain’s goal of being a carbon-neutral economy by 2050. “A lot of things need to happen to keep the lights on.”
climate meeting, known as COP26, it has a credible claim to being a global leader in climate policy. The birthplace of the Industrial Revolution, Britain became the first country to legally mandate reductions in greenhouse-gas emissions through the Climate Change Act in 2008. Its high-tech windmills and superannuated smokestacks are only the most visible evidence of a three-decade campaign.
Having built the world’s largest offshore wind industry, Britain has reduced emissions by 44 percent from 1990 levels. Its target to cut them by at least 68 percent by 2030 is one of the most ambitious of any major economy, according to the Climate Action Tracker, a scientific analysis of the policies of countries.
If Britain achieves that target, which is far from clear, it would be one of a handful of countries doing enough to fulfill the key goal of the Paris Agreement: limiting the long-term rise in the planet’s temperatures to 1.5 degrees Celsius.
showdown with striking coal miners in 1984. By crushing the union and slashing subsidies for the coal industry, Mrs. Thatcher accelerated Britain’s search for alternative energy sources, namely natural gas.
“She got rid of the coal miners for a combination of political and economic reasons,” said Tom Burke, the chairman of E3G, an environmental think tank, and a former government adviser. “But it gave the U.K. a degree of freedom of action that wasn’t available to other countries.”
she said to the United Nations.
Mrs. Thatcher planted the seed for a bipartisan cause, as Conservative and Labour governments sought to burnish their green credentials. British diplomats played key roles in brokering climate deals in Rio de Janeiro and Kyoto, Japan. Britain installed climate attachés in its embassies around the world.
In 2006, a British government adviser, Nicholas Stern, produced a seminal study of the economic effects of climate change, which framed the debate before the 2009 summit in Copenhagen and set the stage for the Climate Act, passed under a Labour prime minister, Gordon Brown.
When the Conservatives came to power in 2010, they viewed climate policy as a way to appeal to younger voters, many of whom viewed the Tories as a tightfisted party in thrall to business interests. Parliament created a climate change committee, which prodded the government to adopt policies that would help Britain meet its goals. Several of its policies were mimicked by fellow European Union members. “We basically ran the E.U. on climate policy,” Mr. Burke said.
Then came the Brexit vote in 2016, and “we lost our most important tool for influencing other countries, which was the E.U,” he said.
Mr. Johnson, who once scoffed that wind farms would “barely pull the skin off a rice pudding,” now speaks about climate change with the zeal of the converted. Allies say he has been convinced of the need for action by his third wife, Carrie Johnson, who campaigns against plastic pollution.
But critics say Mr. Johnson’s bracing words are belied by his actions. The Climate Action Tracker, while praising Britain’s ambitions, criticized its financial commitment to achieving them, calling it “highly insufficient.”
“It’s accurate to say that this is a betrayal of a national commitment by the current government,” Mr. Burke said.
Mr. Johnson’s pro-Brexit government, he said, depends on support from the libertarian wing of the Tory party, which opposes far-reaching climate initiatives, while his anti-business messaging hinders partnerships with the private sector.
For private companies, the government’s messaging has been muddled. EDF said it would like to build more onshore wind farms, but local resistance and lack of incentives has made it less attractive. And the government has struggled to line up financing for a new generation of nuclear plants.
“We’re only a quarter of the way toward the decarbonized energy system that the prime minister set as a goal for 2035,” said Mr. Spence, of EDF. “We need all the answers, faster than we’ve ever done them before, if we’re going to get anywhere close to a 1.5-degree world.”
For all of Britain’s agenda-setting, there is also a sense among activists and experts that there is only so much a midsize country can do to solve a planetary problem. Its total emissions account for barely 1 percent of the world’s total. China accounts for nearly 30 percent, and the United States for 14 percent.
“Imagine if these policies had been picked up in 1997 by the United States,” said David King, a former climate envoy and scientific adviser to Prime Minister Tony Blair. “The world would be a very different place.”