DXI’s Strategic Shift: What Risks Lurk in Divesting Brisbane Offices for Industrial Assets?
Dexus Industria REIT has acquired a $40 million warehouse in Sydney’s Glendenning, aiming to enhance its industrial portfolio through strategic refurbishment and increased lettable space.
- Acquisition of circa 10,000 sqm warehouse in Glendenning for $40 million
- Plans to refurbish and subdivide into three prime grade tenancies
- Gross lettable area to increase to approximately 11,555 sqm post-refurbishment
- Aligns with DXI’s strategy to focus on industrial infill assets
- Intends to divest Brisbane office assets to concentrate on industrial portfolio
Strategic Expansion in Sydney’s Industrial Market
Dexus Industria REIT (DXI) has taken a significant step in reinforcing its presence in Sydney’s industrial sector with the acquisition of a warehouse at 32 Cox Place, Glendenning, for $40 million. Situated in a land-constrained, high-demand precinct in northwest Sydney, this asset offers excellent connectivity to major transport routes such as the Westlink M7, positioning it well to serve growing population corridors.
Value-Add Potential Through Refurbishment
The existing circa 10,000 square metre warehouse is slated for a transformation into three smaller, prime grade tenancies, potentially increasing the gross lettable area to around 11,555 square metres. This refurbishment, subject to necessary approvals, is expected to commence in late 2025. The repositioning aims to create a modern, flexible logistics facility that appeals to a broad tenant base, addressing the undersupply in Sydney’s industrial infill market.
Portfolio Repositioning and Strategic Focus
DXI’s Fund Manager, Gordon Korkie, highlighted the acquisition as a rare opportunity to secure a well-located asset with strong upside potential. This move aligns with DXI’s broader strategy to evolve into a focused industrial REIT by investing in infill and established middle-ring industrial precincts. Concurrently, DXI plans to divest its office assets at Brisbane Technology Park, Eight Mile Plains, Queensland, signaling a clear pivot towards high-quality industrial properties.
Leveraging the Dexus Platform
The acquisition underscores DXI’s ability to leverage the extensive Dexus platform to source attractive opportunities that enhance portfolio quality and deliver sustainable income growth. With a portfolio valued at $1.4 billion as of December 2024, DXI continues to focus on assets that promise long-term value creation for its investors.
Looking Ahead
While the refurbishment plans are still subject to approvals, the strategic acquisition and portfolio repositioning signal DXI’s commitment to capitalising on Sydney’s industrial market dynamics. Investors will be watching closely for updates on the refurbishment timeline and the progress of the Brisbane office divestment.
Bottom Line?
DXI’s $40 million acquisition marks a decisive shift towards industrial infill assets, setting the stage for potential rental growth and portfolio transformation.
Questions in the middle?
- When will DXI secure approvals and commence the warehouse refurbishment?
- What are the expected rental yields and tenant demand post-refurbishment?
- How will the divestment of Brisbane office assets impact DXI’s overall portfolio risk and return profile?
