Dexus Industria REIT Reports 19% Profit Drop, Upgrades FFO Guidance

Half-Year Financial Performance

Dexus Industria REIT (ASX, DXI) has released its half-year results for the period ending 31 December 2025, revealing a net profit after tax of $43.4 million. This represents a 19.3% decline compared to the previous corresponding period, primarily driven by lower property valuation gains. Despite this, the REIT’s Funds From Operations (FFO), a key indicator of underlying operational performance, saw only a modest 2.0% decrease to $28.2 million, or 8.9 cents per security.

Distributions to security holders rose slightly by 1.2% to 8.3 cents per security for the half-year, reflecting the REIT’s commitment to delivering steady income streams amid market fluctuations.

Portfolio Strength and Leasing Activity

The industrial property portfolio remains robust, valued at approximately $1.4 billion with an exceptionally low vacancy rate of 0.3% by income. The portfolio benefits from embedded rental growth, with around 87% of income subject to fixed rental increases. Leasing activity was strong, with over 55,000 square metres secured during the half, including significant development leasing at the ASCEND precinct in Jandakot, where 77% of committed projects are pre-leased.

Recent acquisitions in Glendenning (NSW) and Dandenong South (VIC), along with the post-period acquisition of full ownership of Dexus Moorebank Trust, align with DXI’s strategy to enhance portfolio quality and capture rental growth opportunities.

Capital Management and Balance Sheet

DXI’s balance sheet remains conservative with gearing at 18.9%, below its target range of 30–40%, providing significant headroom for future growth. The REIT refinanced approximately $150 million of debt facilities during the period, extending maturities and maintaining a weighted average debt maturity of 3.8 years. Undrawn facilities stood at $77.75 million as of 31 December 2025, supporting liquidity and flexibility.

Sustainability and Development Pipeline

Sustainability remains a core focus, with solar installations totaling nearly 2MW across the portfolio and sustainability-led design features incorporated into new developments. The active development pipeline at ASCEND at Jandakot includes seven committed projects totaling 75,400 square metres, with an estimated cost of $225 million and targeted yields on cost above 6.25%. This pipeline is expected to contribute to income growth over the medium term.

Outlook and Guidance

Looking ahead, DXI has slightly upgraded its FY26 FFO guidance from 17.3 to 17.4 cents per security, driven by leasing progress and development completions, while reaffirming distribution guidance at 16.6 cents per security, representing a 6.6% yield. The REIT remains focused on active portfolio management, disciplined capital deployment, and leveraging Dexus’s integrated real estate capabilities to deliver long-term value.