DEXUS (DXS) H1 2025 earnings summary

Executive summary

• AFFO for the half was AUD 251.8 million, with a distribution of 19.0 cents per security and a payout ratio of 81.2%, in line with updated policy.

• Platform funds under management reached $53.4bn, with $14.5bn in direct investments and $38.9bn in third-party FUM.

• Office and industrial portfolios maintained high occupancy (office: 93.5%, industrial: up to 97.4%), with office occupancy above market average.

• Progressed AUD 515–665 million in divestments since the full-year result, part of a AUD 2 billion divestment plan.

• Sustainability leadership continued, with multiple funds achieving top global ESG ratings.

Financial highlights

• AFFO declined 13.9% year-over-year to AUD 251.8 million, mainly due to lower trading profits and higher maintenance/leasing capex.

• Statutory net profit after tax was $10.3 million, a significant improvement from a $597.2 million loss in HY24.

• Distribution payout ratio reduced to 81.2% of AFFO, compared to 98.2% in HY24.

• Pro forma gearing (look-through) was 31.3%, at the lower end of the 30–40% target range.

• NTA per security decreased to $8.81 from $8.97 at 30 Jun 2024, reflecting valuation declines.

Outlook and guidance

• AFFO guidance for FY25 reiterated at 44.5–45.5 cents per security; distributions expected to be circa 37.0 cents per security.

• Market conditions are stabilising as the interest rate cycle shifts towards easing, with office market recovery factors emerging.

• Office occupancy expected to step down to around 90% by year-end due to concentrated expiries.

• Continued focus on capital recycling, with $2bn of divestments earmarked for FY25–27 and $665m already exchanged or settled since 30 Jun 2024.

• Positive signs for industrial demand in 2025, with constrained supply and rising online spending.