How Is Dexus Industria REIT Driving Income Growth Through Strategic Acquisitions?
Dexus Industria REIT has slightly upgraded its FY26 funds from operations guidance, driven by robust portfolio income growth and strategic acquisitions in key industrial hubs. The REIT’s active management and development pipeline underpin its confidence in delivering secure, growing income.
- FY26 FFO guidance upgraded to 17.4 cents per security
- HY26 FFO of 8.9 cents and distributions of 8.3 cents per security
- 7.4% like-for-like portfolio income growth with 99.7% occupancy
- Completion of 24,100 sqm developments at ASCEND Jandakot
- Acquisition of four industrial assets in Sydney and Melbourne infill markets
Strong Half-Year Performance
Dexus Industria REIT (DXI) has reported a solid first half for FY26, delivering funds from operations (FFO) of 8.9 cents per security and distributions of 8.3 cents. Despite a statutory net profit after tax of $43.4 million, down from $53.7 million in the prior corresponding period due to lower property valuation gains, the REIT’s underlying portfolio performance remains robust.
The portfolio saw a 7.4% like-for-like income growth, supported by rental escalations, strong re-leasing spreads, and an exceptionally high occupancy rate of 99.7%. This performance reflects DXI’s active asset management and leasing strategies, which have helped maintain a resilient income stream amid a normalising industrial property market.
Strategic Acquisitions and Development Pipeline
DXI has enhanced its portfolio quality and growth potential through the acquisition of four industrial assets located in Sydney’s Glendenning and Moorebank precincts, as well as Melbourne’s Dandenong South. These acquisitions align with the REIT’s strategy to focus on well-located, high-growth industrial infill markets.
Complementing these acquisitions, DXI completed 24,100 square metres of high-quality developments at the ASCEND Industrial Estate in Jandakot. The active development pipeline now totals 75,400 square metres of committed projects, with over 77% pre-leased and an estimated total project cost of $225 million. These developments are expected to deliver attractive yields on cost above 6.25%, further supporting income growth through FY26 to FY30.
Financial Strength and Outlook
DXI’s balance sheet remains strong, with look-through gearing at 26.2%, comfortably below the target range of 30–40%. The REIT refinanced approximately $150 million in debt facilities during the period, extending maturities with no expiries until FY28 and maintaining a weighted average debt maturity of 3.8 years.
Reflecting these positive developments, DXI has slightly upgraded its FY26 FFO guidance to 17.4 cents per security while reaffirming distribution guidance at 16.6 cents, representing a distribution yield of 6.6%. The upgrade is primarily driven by leasing progress in Glendenning and Moorebank, partially offset by higher floating interest rates.
Sustainability and Long-Term Value
DXI continues to prioritise sustainability, integrating solar installations and green building features across its portfolio, including EV charging infrastructure and Green Star ratings at its Jandakot developments. These initiatives align with broader environmental and social goals, aiming to create lasting value for tenants, investors, and communities.
Overall, DXI’s results underscore its disciplined approach to capital allocation, active portfolio management, and commitment to sustainable growth in Australia’s industrial real estate sector.
Bottom Line?
DXI’s upgraded guidance and strategic moves position it well for sustained income growth amid evolving industrial market dynamics.
Questions in the middle?
- How will rising interest rates impact DXI’s cost of debt and future FFO?
- What is the potential upside from the uncommitted portion of the development pipeline?
- How might DXI’s increased exposure to Sydney and Melbourne infill markets affect portfolio risk and returns?
