Dexus Industria REIT Reports 17.6c FFO Per Security and 5.3% Income Growth in FY26

Robust Income Growth and Leasing Drive Outperformance

Dexus Industria REIT (DXI) has outpaced its upgraded FY26 guidance, reporting funds from operations (FFO) per security of 17.6 cents, narrowly beating the 17.4 cents forecast. This was underpinned by a high-performing portfolio boasting 98.8% occupancy and an impressive 21.4% positive re-leasing spread, reflecting strong tenant demand and effective asset management.

The portfolio’s like-for-like income growth of 5.3% was supported by a blend of fixed and CPI-linked rental escalations, with around 87% of income subject to these contractual reviews. DXI secured 169,693 square metres of leasing deals during the year, including 89,414 square metres across the stabilised portfolio, further de-risking income streams.

Development Pipeline and Capital Recycling in Focus

Development activity remained a key growth driver, with 45,200 square metres of high-quality industrial space completed at ASCEND Industrial Estate at Jandakot, delivering a strong average yield on cost of 7.0%. The committed development pipeline now totals 54,200 square metres; over two-thirds pre-leased; with total potential extending to 219,000 square metres and an estimated project cost of $217 million, set to complete through FY30.

Capital recycling continued with strategic acquisitions in growth-oriented industrial hubs, including Glendenning NSW, Dandenong South VIC, and Moorebank NSW, where DXI consolidated ownership and secured leasing pre-commitments. These moves demonstrate the REIT’s active management approach to enhance portfolio quality and income stability.

Balance Sheet Strength and Buy-Back Program

DXI’s look-through gearing stood at a conservative 31.2%, comfortably within its 30–40% target range, with no debt maturities until FY28. Approximately $358 million of new and extended debt facilities were secured at competitive rates during FY26, supporting funding flexibility for growth initiatives.

The REIT’s on-market securities buy-back program, initiated with a 2.5% target, has been well received, with 60% completed by year-end. The target was recently increased to 5%, reflecting management’s confidence in capital allocation amid a valuation gap between listed securities and direct property assets.

Sustainability Commitments and Outlook

DXI maintained its net zero status for Scope 1 and 2 emissions and sourced 100% renewable electricity for operationally controlled assets. The portfolio now hosts over 1.8MW of installed solar capacity, with further installations underway, aligning with Dexus’s broader climate action strategy.

Looking ahead, the REIT expects FY27 FFO of 17.0 cents per security and distributions of 16.6 cents, maintaining a distribution yield of approximately 6.8%. While a recent zero-cost hedge restructure is expected to temper near-term FFO, it provides clearer medium-term earnings visibility.

The combination of secure income, a robust development pipeline, disciplined capital management, and sustainability initiatives positions DXI to navigate ongoing market uncertainties and pursue value accretive growth.