Dexus managed trusts portfolio dip

THE Dexus Industria REIT (ASX: DXI) and Dexus Convenience Retail REIT (DXC) have announced June valuations resulting in a decrease in book values of $30.7 million and $9.6 million respectively.

All 89 of DXI’s assets have been externally valued as at 30 June 2024, with the estimated net devaluation reflecting a 2.2% decrease in book values.

The weighted average capitalisation rate across the DXI total portfolio was up 21 basis points over the six months from 5.77% at 31 December 2023 to 5.98% at 30 June 2024.

“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,” said Gordon Korkie, fund manager at DXI.

Last month, DXI upgraded its previous FY24 guidance for funds from operation per security to 17.4 cents, up from the previous guidance of 17.1 cents per security.

With its guidance for distributions remaining unchanged at 16.4 cents per security.

Back in February, Dexus Industria REIT posted a statutory net loss after tax of $10.2 million due to $36.1 million in valuation losses on investment properties, equivalent to 2.5% of total portfolio value and derivatives.

Meanwhile, 51 of DXC’s 100 assets were externally valued as at 30 June 2024, with the remainder subject to internal valuations, reflecting a 1.3% decrease on book values.

The weighted average capitalisation rate across DXC’s total portfolio was up 10 basis points over the six months from 6.30% at 31 December 2023 to 6.40% at 30 June 2024.

“DXC continues to deliver a resilient income stream with embedded rental growth, providing ongoing asset valuation support despite moderate cap rate expansion,” said Jason Weate, fund manager at DXC.

“Transaction volumes for fuel and convenience assets remains relatively robust, reflecting investor demand for properties with strong income characteristics backed by high quality tenant covenants.”

The fall comes after DXC’s portfolio of service and convenience stations saw a valuation fall of $8.7 million in December last year, or a 1.1% in a loss to book value.