Dexus (ASX: DXS) – Dexus 2026 Annual Results Report

Dexus has delivered on its 2026 financial guidance with adjusted funds from operations of 45.0 cents per security and distributions of 37.0 cents per security, maintaining portfolio resilience in an operating environment characterised by economic volatility. The real estate investment manager’s office portfolio achieved occupancy of 95.7%, materially above market levels, while its industrial holdings reached 94.6% occupancy, underpinning rent collection rates of 99.7% across the portfolio.

The company’s capital management strategy has yielded tangible progress during the financial year. Dexus raised $2.0 billion in third-party equity across its funds, including a $500 million commitment into its flagship Dexus Wholesale Property Fund, which delivered its strongest one-year return in nearly four years and outperformed its benchmark across all reported time periods. The company has also advanced its divestment program, exchanging or settling approximately $1.9 billion of assets during the year and $2.5 billion since FY24, exceeding its FY25-FY27 divestment target ahead of schedule. This capital flexibility has enabled a return to securities buyback activity in a manner consistent with the company’s capital allocation framework.

A notable strategic development emerged through a partnership with Boral, which provides access to a capital-efficient development pipeline spanning approximately 2.5 million square metres of potential lettable area, subject to rezoning and business plan approvals. This initiative aligns with management’s stated transition toward becoming a more diversified and capital-efficient business. Simultaneously, Dexus has initiated a strategic review of infrastructure funds and mandates that transitioned to the company through its 2023 AMP Capital acquisition, reflecting management’s commitment to address emerging issues and establish a path forward for investors in those vehicles.

Balance sheet metrics remain robust, with gearing at 33.4% positioned toward the lower end of the company’s 30-40% target range. The gearing metric will benefit further from proceeds from asset sales announced after the 30 June reporting date. Customer Net Promoter Scores increased across all sectors, with particularly strong gains in office and healthcare, suggesting that operational improvements are translating to enhanced customer relationships and positioning for future leasing activity.

The financial year ahead presents a mixed picture for investors. Management guidance indicates that FY27 distributions should remain in line with the prior year despite headwinds including lower trading profits, reduced performance fees, and continuing challenges in the infrastructure funds segment. Dexus will also realise the practical completion of Atlassian Central during this period, which will impact earnings comparisons. The sustainability of the 82.1% payout ratio and the trajectory of the infrastructure fund review will warrant close monitoring, alongside the impact of higher finance costs on underlying profitability. This announcement has been designated as price sensitive and flagged as material by the ASX.

View the full ASX announcement (PDF)

About Dexus Limited (ASX: DXS)

Dexus is a leading Australasian property investor, developer and manager operating a diversified real estate and infrastructure portfolio. The company manages a high-quality portfolio of office and industrial properties across Australia and New Zealand, alongside a substantial funds management business overseeing third-party capital. It operates as a major listed property trust (REIT) on the Australian Securities Exchange.

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