Why Dexus Industria REIT Is Selling Brisbane Tech Park for $155.5M

Strategic Divestment Marks Evolution

Dexus Industria REIT (DXI) has taken a decisive step in refining its portfolio by entering into option agreements to divest its final business park assets located at Brisbane Technology Park (BTP) in Queensland. The total net sale price of $155.5 million underscores DXI’s commitment to evolving into a focused industrial property REIT, shedding its suburban office footprint to concentrate on higher-growth industrial assets.

Two-Transaction Structure and Financial Implications

The divestment is structured as two separate transactions – Corval will acquire 11 of the 13 properties for $110.7 million, while Exceed Capital will purchase the remaining two properties for $44.8 million. Settlement for the Corval transaction is anticipated by late August 2025, with Exceed’s settlement expected by early November, contingent on the first transaction proceeding. Notably, the sale price reflects a 4.1% discount to the independent valuation as of June 30, 2025.

While the divestment is expected to be initially dilutive to DXI’s Funds from Operations (FFO) due to the relatively high yield of the BTP assets, the impact is forecasted to be broadly neutral after accounting for capital expenditure. This nuance reflects the more capital-intensive nature of suburban office assets compared to industrial properties, suggesting a strategic trade-off in portfolio quality and growth potential.

Portfolio Enhancement and Balance Sheet Strengthening

Following completion, DXI’s portfolio metrics are set to improve, with higher occupancy rates and longer weighted average lease expiries (WALE). The divestment, combined with the recent acquisition of the Glendenning industrial asset, will increase DXI’s weighting toward high-quality, well-located industrial properties, aligning with its long-term growth strategy.

Importantly, the sale is expected to reduce DXI’s look-through gearing by approximately seven percentage points. When combined with the Glendenning acquisition, gearing is projected to decrease by around five percentage points, positioning DXI comfortably within its target gearing range of 30-40%. This financial flexibility supports ongoing reinvestment capacity and development initiatives.

Management Perspective and Outlook

DXI Fund Manager Gordon Korkie described the sale as a "pivotal step" in the REIT’s evolution, emphasizing the benefits of a sole industrial focus. He highlighted the fund’s strengthened balance sheet and its readiness to fund existing development pipelines and pursue higher-growth industrial opportunities. Investors will be keenly awaiting the FY26 guidance, which DXI plans to release alongside its FY25 results on August 13, 2025, for further clarity on the financial trajectory post-divestment.