DXI - Dexus Industria REIT

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Industria REIT is a new Australian real estate investment trust (REIT) to be listed on the ASX. Industria is seeking to raise up to $225.0 million through the offer of securities at an offer price of $2.00 per security.

Industria will own interests in a workspace focussed portfolio of 18 established, high quality industrial, technology park and business park assets located across Sydney, Melbourne, Brisbane and Adelaide, and which have been independently valued at $378.0 million.

http://www.industriareit.com.au

Industria REIT Fund (IDR) is scheduled to list on the ASX on December 3rd, 2013.

 

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On February 20th, 2019, Industria REIT (IDR) changed its name and ASX code to APN Industria REIT (ADI).

 

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On October 5th, 2021, APN Industria REIT changed its name to Dexus Industria REIT.

 

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On December 1st, 2021, Dexus Industria REIT changed its ASX code from ADI to DXI.

 

[divs4ever]

7 February 2024

Further strengthened balance sheet, guidance on track and leasing success at BTP Dexus Industria REIT (DXI) today announced its results for the half year ended 31 December 2023, confirming a distribution of 8.2 cents per security.
Summary
• On track to deliver FY24 guidance with HY24 Funds From Operations (FFO) per security of 8.6 cents and distributions of 8.2 cents
• Statutory net loss after tax of $10.2 million, resulting from net fair value losses on investment properties and derivatives, offset by strong operating performance
• Executed $135 million of divestments1 to repay debt and provide balance sheet resilience and redeployment optionality
• Enhanced capital position with pro forma look-through gearing of 26.2%2 which is below the target range, and average hedged debt of 77% during the half
• Portfolio like-for-like income growth of 7.3%3, with strong growth expected to be maintained for FY24
• Significantly increased occupancy at Brisbane Technology Park from 85.7% to 95.7% (by income)
• Received development approval for a 17,900 square metre project in Moorebank, and 18,000 square metres of high-quality developments were completed at Jandakot, fully leased to Marley Spoon and Caddy Gordon Korkie,
DXI Fund Manager said: “We continued to divest properties during the half to ensure the balance sheet is well capitalised, and to provide the flexibility to invest in higher-returning opportunities. We remain on track to deliver FY24 guidance which is in line with FY23 notwithstanding the impact of higher interest rates.” Strategy “Today’s result demonstrates the benefits of our active management approach.
“We have leased 163,700 square metres4 of space over the last 18 months which has reduced upcoming expiries amidst an uncertain economic environment and supported income growth through averaging double-digit re-leasing spreads.
“Across the same time period, we have sold almost $300 million1 of assets which has reduced gearing to below the target range and enhanced our interest rate hedging position.
We are well placed to fund our future commitments, including the development pipeline at target yields on cost of 6% and above.”
Financial result

The statutory result reflected a net loss after tax of $10.2 million, impacted by net fair value losses on investment properties and derivatives.
FFO increased 0.5% to $27.3 million (8.6 cents per security).
Strong portfolio like-for-like growth of 7.3%3 was offset by reduced property income from divestments resulting in property FFO decreasing 2.6%.
Savings in net finance costs were achieved by a lower average debt balance from asset sale proceeds, partially offset by a higher cost of debt due to higher interest rates.
All assets were independently valued in the six months to 31 December 20235.
The external independent valuations resulted in a like-for-like devaluation of $36.1 million, representing a 2.5% decrease on prior book values.
The weighted average cap rate expanded 37 basis points on a like-for-like basis to 5.77%.
Net Tangible Assets per security decreased 12 cents, or 3.5%, to $3.326.
Pro forma look-through gearing was 26.2%2, below the target range of 30 – 40%.
Hedged debt for the half averaged 77%, and the weighted average maturity of hedges is 2.2 years.
The average cost of debt increased 50 basis points half-on-half, driven by higher interest rates.
DXI has substantial liquidity of $146 million and a weighted average debt maturity of 2.8 years.
Property portfolio and asset management DXI’s property portfolio comprises interests in 91 properties valued at $1.4 billion with a weighted average capitalisation rate of 5.77%.
The portfolio generates a secure income yield, underpinned by a weighted average lease expiry of 6.1 years and occupancy of 99.0%. The portfolio generates embedded rental growth, with 46% of the portfolio generating average fixed rental growth of 3.2% per annum, and the remainder tied to CPI-linked increases.
During the half, the portfolio achieved an average rent review of 4.8%.

Industrial:
The industrial portfolio delivered average rent reviews of 4.9%.
Like-for-like income growth was 6.0%7, with strong growth expected to be maintained for FY24. Following a record year of leasing in FY23, leasing for the half totalled 23,600 square metres8.
Jandakot Airport industrial precinct delivered like-for-like income growth of 5.2%9, supported by 59% of income linked to CPI escalations.
Brisbane Technology Park:
At Brisbane Technology Park, occupancy (by income) increased 10 percentage points to 95.7% following 4,400 square metres of leasing. Positive leasing outcomes supported like-for-like growth of 15.4%10.
Retention rates were also strong with 84% of space retained or backfilled within 3 months.
Brisbane Technology Park generates an income yield of 7.5%, with incentives circa 15 percentage points below the broader Brisbane CBD office market.
Development DXI has circa $167 million of spend remaining on its total development pipeline, of which $42 million is committed.
The total pipeline is valued at $269 million and equates to interests in 331,400 square metres in major hubs in Sydney and Perth, providing additional income upside.
At Jandakot Airport industrial precinct, two projects were completed over 18,000 square metres and are fullyleased to Marley Spoon and Caddy.
In Sydney, development approval was received on a 17,900 square metre multi-estate, last mile development project in Moorebank.
The project is expected to be delivered in FY25 at a 6.0 – 6.5% yield on cost.
Environmental, Social and Governance (ESG)
DXI is committed to delivering meaningful sustainability outcomes and aligns to the Dexus sustainability strategy, including an aspiration to unlock the potential of real assets to create lasting positive impact and a more sustainable tomorrow.
This also includes delivering against the sustainability priority areas of Customer Prosperity, Climate Action and Enhancing Communities. Recognising the importance of climate action, DXI maintained a carbon neutral position across its business operations and controlled building portfolio for FY23 under the Climate Active Standard11.
DXI maintains a 4.9 star NABERS Energy and 4.8 star NABERS Water rating across its portfolio. DXI’s focus on customer prosperity has seen 140 kW of onsite solar installed during the half and approvals progressing on a further 2.0 MW.
At Brisbane Technology Park, a waste diversion program, with a customer awareness campaign and site interventions, supported a 20%+ improvement in recycling rates12.

Overview and outlook

DXI will remain focused on executing its proposition to investors of generating superior risk-adjusted returns over the long term by:
• enhancing portfolio attributes that deliver organic income growth
• maintaining a strong capital position (including managing gearing towards the lower end of the target range)
• continuing an active approach to portfolio management (including a disciplined approach to delivering the development pipeline)
• leveraging Dexus’s capabilities across transactions, leasing development and asset management.

Despite continued uncertainty in the macroeconomic environment, DXI’s earnings for FY24 are expected to remain resilient underpinned by embedded fixed and CPI linked rental escalations, minimal near-term lease expiries and forecast full-year average hedged debt above 80%13.
Barring unforeseen circumstances, DXI reiterates FY24 guidance for FFO of 17.1 cents per security and for distributions of 16.4 cents per security, reflecting a distribution yield of 6.0%14.

Authorised by the Boards of Dexus Asset Management Limited and Industria Company No. 1 Limited

i hold DXI

 

[divs4ever]

Portfolio valuation update

Dexus Industria REIT (DXI) today announced all of its 89 assets have been externally valued as at30 June 2024.
The draft valuations have resulted in an estimated net devaluation of $30.7 million for the six months to 30 June 2024, representing a 2.2% decrease on book values.

The weighted average capitalisation rate across the total portfolio expanded 21 basis points over the six months from 5.77% at 31 December 2023 to 5.98% at 30 June 2024.
Gordon Korkie, DXI Fund Manager, said: “DXI’s high-quality portfolio continues to demonstrate resilience in valuations.
Solid rental growth, driven by relatively constrained supply and low market vacancy, has partly offset the impact of capitalisation rate expansion.”

Further details on the final valuations for the portfolio for the period will be included in DXI’s FY24 results which will be released on Wednesday, 14 August 2024.

Authorised by the Boards of Dexus Asset Management Limited and Industria Company No. 1 Limited

i hold DXI

 

[finicky]

Solid rental growth, driven by relatively constrained supply and low market vacancy, has partly offset the impact of capitalisation rate expansion.”

WTF? Isn't cap rate expansion good?
Means yield on assets is outpacing interest and other costs? Albeit at price of devaluation.

Does DXI have any interests in data centres like GMG?

Not Held

 

[divs4ever]

WTF? Isn't cap rate expansion good?
Means yield on assets is outpacing interest and other costs? Albeit at price of devaluation.

Does DXI have any interests in data centres like GMG?

Not Held

am not sure on data centre exposure although if customers used 'hot aisle ' technology , that could happen quickly ( as opposed to dedicated data centres ) with 'hot aisle ' any shed with a decent power feed with do ,

as IDR they used to be mostly industrial sheds ( and that was when i bought them )

seems they do at

Brisbane Technology Park

other customers in include Amazon ( in WA ) and Westrac and buildings near the Adelaide airport