DEXUS (DXS) H1 2026 earnings summary

Executive summary

• AFFO for HY26 reached $253.3 million (23.6 cps), with distributions of 19.3 cps and a payout ratio of 82%, while statutory net profit after tax surged to $348.5 million, mainly due to fair valuation gains.

• Managed assets total AUD 51 billion, with third-party funds under management at 2.4x the investment portfolio, and funds management FUM grew to $36.2 billion, supported by new fund launches and strong flagship fund performance.

• Over $950 million in equity raised, $1.4 billion in divestments secured since June 2024, and $1.3 billion in acquisitions, supporting capital efficiency and portfolio quality.

• Office portfolio occupancy remained high at 92.2%, with strong leasing volumes, while industrial occupancy reached 97.0% and like-for-like income grew 8.7%.

• Property portfolio valuations increased for the second consecutive half, with a 1.0% uplift overall and NTA per security rising to $8.95.

Financial highlights

• AFFO increased 0.6% year-over-year to $253.3 million, with distributions per security at 19.3 cents and a payout ratio of 82%.

• FFO rose 4.3% to $352.2 million, while trading profits of $40.9 million (post-tax) were realized, mainly from asset sales and development activity.

• Office FFO declined 8% due to divestments and lower occupancy, while industrial FFO rose 9.7% on higher occupancy and development completions.

• Portfolio valuations increased by 1% for the six months to December 31, with office up 0.7% and industrial up 1.6%.

• Finance costs remained flat, with higher debt costs offset by increased interest income.

Outlook and guidance

• AFFO guidance for FY26 reaffirmed at 44.5–45.5 cents per security, with distributions expected at 37.0 cents per security.

• On-market securities buyback of up to 10% activated to address valuation disconnect and enhance capital efficiency.

• Performance fees and trading profits expected to be materially lower in FY27 compared to FY26.

• High threshold for new development projects, with yield on cost requirements above 5%-6%.

• Guidance is subject to asset sales, performance fees, trading profits, APAC litigation outcomes, and no material deterioration in market conditions.