Dexus Industrial (DXI): The industrial REIT reported its results for 2025, which demonstrated continued demand for industrial real estate assets. The HNW Income Portfolio has a 2.8% weight to DXI.
Key Points:
- Profit up: Funds from operations (FFO) up +5% to $58M million, with income growth of 6% offset by divestments. Operationally, DXI is performing well with full occupancy and a six-year weighted average lease term. DXI have been busy over the year leasing 210K m² of industrial space, double the rate of last year,
- Distribution: Distributions were in line with last year at 16.4 cents per security.
- Valuation: NTA $3.34 per share, a 3% increase from last year. 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 increased FY26 distribution guidance to 16.6 cents per share, a positive outcome given that DXI also announced the sale of Brisbane Technology Park (BTP) for $ 155 million. This will transform DXI into a pure industrial REIT, which is expected to experience a valuation uplift.
Portfolio Strategy: DXI is a well-managed industrial REIT, owning a diversified portfolio of industrial real estate valued at $1.5b 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 5.9% yield paid quarterly.
DXI fell -3.4% to $2.83.
