Dexus Convenience Retail REIT Sees $20.2M Valuation Boost Amid Cap Rate Tightening
Dexus Convenience Retail REIT reports a $20.2 million uplift in portfolio valuation for H2 2025, driven by cap rate compression and steady rental growth. The update signals strong investor demand for stable retail assets.
- Portfolio valuation uplift of approximately $20.2 million (2.7%)
- Weighted average capitalisation rate tightened by nine basis points to 6.23%
- 30 of 91 assets externally valued, remainder internally assessed
- Strong demand for income-generating convenience retail properties
- Final valuation details to be disclosed in HY26 results on 9 February 2026
Portfolio Valuation Update
Dexus Convenience Retail REIT (ASX – DXC) has announced a positive valuation update for the six months ending 31 December 2025. The REIT’s portfolio, which comprises 91 service station and convenience retail assets predominantly located along Australia’s eastern seaboard, saw an estimated net uplift of approximately $20.2 million. This represents a 2.7% increase on the book values recorded at the end of June 2025.
The valuation update is based on external assessments of 30 assets, with the remainder subject to internal valuations. While these figures are preliminary, they reflect a broader trend of cap rate compression and steady rental growth within the sector.
Cap Rate Compression and Market Demand
The weighted average capitalisation rate across the portfolio tightened by nine basis points, moving from 6.32% to 6.23% over the six-month period. This tightening indicates increased investor appetite for stable, income-generating retail assets, particularly those with long lease expiry profiles and contracted rental increases.
Pat De Maria, Fund Manager at DXC, highlighted that the portfolio’s value growth is underpinned by strong transactional market conditions and steady contractual rental growth. He emphasized that demand for these types of assets remains robust, positioning DXC well for future growth opportunities.
Looking Ahead
The REIT’s portfolio was valued at approximately $728 million as of 30 June 2025. With a conservative gearing target between 25% and 40%, DXC maintains a disciplined approach to capital management. Investors can expect a comprehensive breakdown of the final portfolio valuations in the upcoming HY26 results, scheduled for release on 9 February 2026.
This update reinforces DXC’s position as a leading player in the Australian convenience retail property market, supported by a majority independent board and management by Dexus, a seasoned real estate group with over four decades of expertise.
Bottom Line?
As cap rates tighten and valuations rise, DXC’s next financial results will be closely watched for signs of sustained growth momentum.
Questions in the middle?
- How will the remaining 61 assets’ valuations impact the final portfolio figures?
- What are the implications of cap rate compression for DXC’s future acquisition strategy?
- How resilient is DXC’s income stream amid potential market fluctuations?
