Dexus Industria REIT Upgrades FY25 FFO Guidance to 18.2 Cents Amid Strong Leasing
Dexus Industria REIT has upgraded its FY25 financial guidance, reporting strong profit growth and advancing its transition to a focused industrial portfolio. The REIT’s robust leasing activity and development pipeline underpin a confident outlook for FY26.
- Upgraded FY25 Funds From Operations to 18.2 cents per security, up 4.6%
- Statutory net profit after tax of $84.2 million driven by property valuation gains
- Portfolio occupancy remains high at 98.6% with 5.9% like-for-like income growth
- Strategic divestment of Brisbane Technology Park and acquisition of Glendenning warehouse
- Strong balance sheet with look-through gearing at 29%, no debt maturities until FY27
Robust Financial Performance and Upgraded Guidance
Dexus Industria REIT (DXI) has delivered a solid financial performance for the full year ended 30 June 2025, surpassing its initial guidance with Funds From Operations (FFO) per security rising 4.6% to 18.2 cents. This upgrade reflects the REIT’s ability to generate resilient income growth, supported by a statutory net profit after tax of $84.2 million, a significant turnaround from the prior year’s loss. The uplift was largely driven by positive property valuations and strong leasing outcomes.
Distributions per security were maintained at a healthy 16.4 cents, underscoring DXI’s commitment to delivering steady returns to investors. The Net Tangible Asset (NTA) per security increased by 3.1% to $3.34, reflecting the underlying value growth within the portfolio.
Portfolio Strength and Leasing Momentum
DXI’s industrial property portfolio remains a cornerstone of its success, with occupancy holding firm at 98.6% and like-for-like income growth of 5.9%. Average rent reviews of 3.5% and positive re-leasing spreads have contributed to this steady income expansion. Leasing activity more than doubled compared to the previous year, with 209,600 square metres secured, including a notable 93,100 square metres of development leasing.
Key developments include the completion of 44,000 square metres of new industrial space at ASCEND Industrial Estate at Jandakot Airport and Moorebank, both of which are expected to drive further income growth in the coming years. The ASCEND pipeline alone, valued at $230 million, is heavily pre-leased and positioned to deliver attractive yields above 6.25% on cost.
Strategic Portfolio Evolution
DXI is actively reshaping its portfolio to focus on high-quality industrial assets, exemplified by the expected divestment of Brisbane Technology Park (BTP) and the acquisition of an urban logistics warehouse in Glendenning, NSW. This strategic reweighting enhances exposure to the Sydney industrial infill market, which benefits from strong demand drivers such as population growth and increasing online retail penetration.
The divestment of BTP, which has shown strong operational improvements and income growth, signals DXI’s intent to sharpen its industrial focus. Meanwhile, the Glendenning acquisition complements this strategy by adding a well-located asset with potential for refurbishment and value creation.
Financial Position and Outlook
DXI’s balance sheet remains robust, with look-through gearing at a conservative 29%, below its target range of 30–40%. The REIT has no debt maturities until FY27, providing financial flexibility to pursue growth initiatives and capitalise on development opportunities. Recent refinancing and new facilities have been secured at competitive rates, with 70% of debt hedged.
Looking ahead, DXI expects FY26 FFO per security of 17.3 cents and distributions of 16.6 cents, reflecting a distribution yield of 5.8%. This outlook assumes continued rental growth supported by embedded contractual increases and a stable interest rate environment.
Commitment to Sustainability
DXI continues to prioritise environmental, social, and governance (ESG) initiatives, maintaining carbon neutrality for its controlled operations and sourcing 100% renewable electricity where possible. The REIT achieved strong NABERS Energy and Water ratings and has installed rooftop solar capacity across several assets, reinforcing its commitment to sustainable property management.
These efforts align with Dexus’s broader sustainability strategy, aiming to create lasting positive impacts through real asset stewardship.
Bottom Line?
DXI’s upgraded guidance and strategic portfolio moves position it well for continued income growth, but investors will watch closely how market conditions and execution of divestments shape its next phase.
Questions in the middle?
- How will the divestment of Brisbane Technology Park impact DXI’s income stability and valuation?
- What are the risks and opportunities associated with the Glendenning acquisition and refurbishment plans?
- How sensitive is DXI’s outlook to potential changes in interest rates and industrial market dynamics?
