Dexus Posts Modest Portfolio Gains Amid Legal Uncertainty Over APAC Dispute

Portfolio Valuations Show Resilience

Dexus, a leading Australasian real estate group, announced a modest increase in the valuation of its property portfolio as of 30 June 2025. The total portfolio, comprising 177 assets including office and industrial properties, saw an estimated uplift of approximately $55 million, or 0.4%, compared to book values six months prior.

The office segment experienced a 0.3% rise, primarily driven by market rental growth, although this was slightly offset by marginal increases in capitalisation and discount rates. The industrial portfolio outperformed with a 0.9% increase, benefiting from rental growth and slightly lower discount rates despite higher capitalisation rates. This nuanced movement reflects the ongoing demand for well-located, high-quality assets in both sectors.

Distribution and Financial Outlook

Alongside valuation updates, Dexus declared an estimated distribution of 18.0 cents per security for the first half of 2025. This aligns with the updated distribution policy introduced in August 2024 and signals steady income returns for investors. The distribution is scheduled for payment on 29 August 2025, with record and ex-distribution dates set for 30 June and 27 June respectively. Final distribution figures will be confirmed in the FY25 results due in August.

Legal Proceedings Cast a Shadow

On the legal front, Dexus provided an update on ongoing court proceedings involving its interest in Australia Pacific Airports Corporation (APAC). The New South Wales Supreme Court has postponed hearings to November 2025, following amended pleadings and cross-claims by Dexus Bloc Shareholders challenging the validity of a notice issued by APAC.

The dispute centers on allegations that APAC’s notice was invalid and oppressive, potentially breaching shareholder agreements and the Corporations Act. The outcome remains uncertain, with possible ramifications including invalidation of the notice, cost awards, or damages. Dexus has committed to covering legal costs for most shareholders involved, but the ultimate financial and operational impact is yet to be determined.

Looking Ahead

While the portfolio’s valuation growth and distribution estimate provide positive signals, the unresolved legal dispute introduces an element of risk. Investors will be watching closely for the final FY25 results and any further updates on the APAC proceedings, which could influence Dexus’s strategic positioning and shareholder returns.