Dexus Industrial (DXI): The industrial REIT reported its results for 2026, which were solid and demonstrated continued demand for industrial real estate assets.  HNW Income Fund has a 3% weight to DXI

Key Points:

  • Profit steady: Funds from operations (FFO) down -3% to $56M, with rental growth of +5.3% offset by divestments; this was 2% above guidance. Operationally, DXI is performing well with full occupancy and a five-year weighted average lease term. After selling the lower-quality Brisbane Office park, DXI is a pure-play industrial REIT. Gearing at the low end of the range at 30%.
  • Distribution: Full-year distribution 16.6 cents, up 1.2%, a good outcome given asset sales.
  • Valuation: NTA $3.42 per share, a 2.4% increase from December. Atlas notes that the 5.9% cap rate appears conservative, given that similar industrial assets in Sydney and Melbourne are trading at around 4-4.4%.
  • Guidance: Management maintained FY26 distribution guidance to 16.6 cents per share = 6.6% yield.

Portfolio Strategy:  DXI is a well-managed industrial REIT, owning a diversified portfolio of industrial real estate valued at $1.4b with a development pipeline that will deliver earnings and distribution growth in the future.  The pipeline has been funded by recycling lower-quality assets.

DXI trades at a 14% discount to NTA and on a 6.6% yield paid quarterly.  DXI trades at a 31% discount to NTA, which seems excessive given its low gearing and asset quality, and DXI has been selling assets over the year at 4% over NTA.

 DXI finished down -4% to $2.35