Earnings call transcript: Dexus Industria REIT posts stronger FY 2026 FFO

Dexus Industria REIT reported stronger-than-expected FY 2026 funds from operations (FFO) of AUD 55.7 million, or AUD 0.176 per security, surpassing upgraded guidance. This outperformance was fueled by robust rent growth, high occupancy, and a robust leasing pipeline, despite higher debt costs and the sale of a property. The distribution per security stood at AUD 0.166, with a payout ratio of 94.4%.

Shares remained unchanged at $2.46. Like-for-like income rose 5.3%, supported by rent reviews and positive reversion, while re-leasing spreads reached 21.4%. Occupancy remained high at 98.8%. Management raised the buyback program to 5%, with execution progressing as planned. For FY 2027, reported FFO is expected to be flat, with distributions remaining at AUD 0.166 per security, resulting in a payout ratio of around 98%.

The FY 2027 outlook highlights offsetting factors, including higher interest costs, hedge restructuring, and the impact of the BTP sale. Despite the challenging outlook, management remains optimistic, highlighting ongoing asset management, a committed development pipeline, and a focus on maintaining a differentiated combination of secure income and embedded growth.