Dexus Portfolio Up 0.7% with 19.3c Estimated Distribution for H2 2025

Portfolio Valuation Update

Dexus, a leading Australasian real estate group, has announced a positive update on its portfolio valuation as of 31 December 2025. The draft external valuations covering 174 of its 175 assets indicate an overall increase of approximately $83 million, or 0.7%, on book values. This marks the second consecutive six-month period of valuation growth, reflecting resilience in both office and industrial property segments.

The office portfolio saw a modest 0.4% uplift, primarily driven by market rental growth, although this was slightly offset by marginal increases in capitalisation and discount rates. Meanwhile, the industrial portfolio outperformed with a 1.4% increase, benefiting from stronger rental growth and firmer capitalisation rates. These trends underscore the ongoing demand for well-located, high-quality properties in both sectors.

Capitalisation Rate Movements

The weighted average capitalisation rate across Dexus’s stabilised portfolio edged up by one basis point to 6.04%. Breaking this down, the office portfolio’s rate expanded by three basis points to 6.21%, while the industrial portfolio’s rate tightened slightly by one basis point to 5.55%. These subtle shifts suggest a nuanced market environment where industrial assets continue to attract strong investor interest, even as office assets face marginally higher yield expectations.

Distribution Outlook

Alongside the valuation update, Dexus announced an estimated distribution of 19.3 cents per security for the six months ending 31 December 2025. The distribution will be paid by Dexus Property Trust, with key dates set for record on 31 December 2025 and payment on 27 February 2026. Investors can expect the final distribution details to be confirmed in the upcoming HY26 results announcement scheduled for 18 February 2026.

Ross Du Vernet, Dexus Group CEO and Managing Director, highlighted the positive momentum, noting that well-located, high-quality properties are expected to continue outperforming the broader market. This outlook aligns with Dexus’s strategic focus on quality assets and sustainable growth, supported by its extensive Australasian portfolio valued at over $50 billion.

Looking Ahead

While the valuation gains are encouraging, the slight expansion in capitalisation rates for office assets signals cautious investor sentiment amid evolving market conditions. The industrial sector’s continued strength offers a counterbalance, reflecting broader trends in logistics and warehousing demand. Investors will be watching closely for the HY26 results to gain clarity on final valuations and distribution figures, as well as insights into rental growth sustainability and capitalisation rate trajectories.