DXI Reports 99.5% Occupancy and 2.5% NTA Growth in HY25

Strong Half-Year Financial Performance

Dexus Industria REIT (ASX: DXI) has delivered a solid half-year result for the six months ending 31 December 2024, reaffirming its FY25 guidance with Funds From Operations (FFO) per security rising 5.7% to 9.1 cents. The REIT declared a distribution of 8.2 cents per security, reflecting its commitment to providing steady income to investors amid a competitive industrial property market.

The statutory net profit after tax surged to $53.7 million, a marked turnaround from a loss of $10.2 million in the prior corresponding period. This improvement was largely driven by property valuation gains, reversing previous valuation losses and underscoring renewed investor confidence in industrial assets.

Portfolio Quality and Leasing Momentum

DXI’s portfolio, valued at $1.4 billion, maintained an impressive occupancy rate of 99.5%, supported by strong leasing outcomes. The REIT secured leasing deals across 89,160 square metres, including 58,831 square metres of development leasing, highlighting robust tenant demand. Notably, re-leasing spreads across the portfolio averaged +12.1%, signaling the ability to command higher rents on lease renewals.

The industrial segment, which comprises the bulk of the portfolio, was valued at $1.3 billion with a weighted average capitalisation rate of 5.90%. It achieved like-for-like income growth of 2.4%, despite some intra-period vacancy, and re-leasing spreads of +12.2% on stabilised leases. Occupancy in this segment remained exceptionally high at 99.7%, reflecting strong market fundamentals.

Development Pipeline Enhances Portfolio Quality

DXI continues to invest actively in its development pipeline, valued at $269 million, targeting modern, high-quality industrial warehouses in key hubs such as Sydney and Perth. The recent practical completion of 5 Spartan Street at ASCEND at Jandakot, a 20,300 square metre facility, was 100% leased at a yield on cost of 6.6%, exceeding the REIT’s target threshold of 6.25%.

Momentum in development leasing remains strong, with ASCEND at Jandakot’s committed pipeline now 57% pre-leased following pre-commitments from blue-chip tenants. Post-reporting period, additional development deals were secured at ASCEND and Moorebank, further underpinning future income growth.

Balance Sheet Strength and Risk Management

DXI’s look-through gearing stands at a conservative 27.7%, comfortably below its target range of 30-40%, providing flexibility to pursue growth opportunities. The REIT has hedged 81% of its debt at an average rate of 3.5%, mitigating interest rate risk amid a rising rate environment. Debt maturity is well staggered, with no maturities until November 2026, supporting financial stability.

Sustainability and ESG Commitments

DXI continues to integrate sustainability into its operations, sourcing 100% renewable electricity for assets under operational control and maintaining carbon neutrality across its business operations and controlled portfolio. The REIT improved its NABERS energy rating to 5.0 stars and water rating to 4.8 stars, while advancing solar installations and waste management initiatives, reflecting a commitment to environmental stewardship.

Outlook

Looking ahead, DXI reiterates its FY25 guidance with FFO per security expected to grow by 2.3% to 17.8 cents and distributions of 16.4 cents per security, representing a 6.0% yield. The REIT’s disciplined capital allocation, strong leasing pipeline, and resilient portfolio position it well to navigate evolving market conditions and deliver sustainable returns.