Company posts increase in like-for-like net property income growth to 2.9%
SYDNEY: Dexus Convenience Retail REIT (DXC) announced its full-year results for the period ending June 30, 2025, confirming a distribution of 20.7 cents per security.
This figure is slightly above the company’s guidance of 20.6 cents per security. The results highlighted an increase in like-for-like net property income growth to 2.9%, supported by average rent reviews of 3.1% and a 99.9% occupancy rate.
According to Jason Weate, the DXC Fund Manager, the company successfully delivered on its FY25 guidance for Funds From Operations (FFO) and distributions. Weate stated that the portfolio continues to generate defensive income with built-in rental growth. He added that the company enhanced its portfolio quality and strengthened its balance sheet by making strategic divestments, which in turn created capacity for reinvesting capital into higher-returning ventures.
The company’s balance sheet is now positioned for growth with gearing at 29.4%, which is at the low end of its target range of 25-40%. This provides the funding necessary for existing development opportunities and pipeline restocking. The statutory net profit after tax was $39.4 million, a significant increase from $3.4 million in the previous year. This was primarily due to property valuation gains in the current year, in contrast to valuation losses in the prior year.
The company’s portfolio valuation also saw an uplift, which contributed to a 2.2% increase in Net Tangible Assets (NTA) per security. The NTA increased by eight cents to $3.64 per security. This was driven by a net revaluation uplift of $16.6 million, a 2.3% increase over the previous year’s book values. The revaluation was a result of contracted rent growth and an eight basis point capitalization rate compression, which is the first instance of such compression since 2022.
Looking forward, the company is focused on its two-stage redevelopment project at Glass House Mountains. The Northbound site is on schedule to be completed in early 2026 and is fully pre-leased on an average lease term of 18 years.
The design for the Southbound site is progressing, and tenant negotiations are in progress. Sustainability initiatives, such as plans for EV charging stations, rooftop solar, and rainwater harvesting, have been incorporated into the design for the Northbound site. The company also provided FY26 guidance for FFO and distributions of 20.9 cents per security.