Dexus Industrial (DXI): The industrial REIT reported its results for first half 2026, which were pretty solid demonstrated continued demand for industrial real estate assets. The HNW Income Portfolio has a 2.5% weight to DXI.
Key Points:
- Profit steady: Funds from operations (FFO) down -2% to $28M million, with rental growth of +7.4% offset by divestments. Operationally, DXI is performing well with full occupancy and a five-year weighted average lease term. Selling the low rise offices in Brisbane for $155M improves the overall quality of DXI’s assets and reduced gearing to 18%.
- Distribution: First half distributions were up slightly to 8.3 cents a good outcome given asset sales.
- Valuation: NTA $3.39 per share, a 1.5% increase from June. 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. DXI trades at a 14% discount to NTA and on a 6.6% yield paid quarterly. DXI trades at a 25% discount to NTA, which seems excessive given its low gearing and asset quality.
DXI gained +0.5% to $2.54
