Dexus unscathed by pandemic impacts with occupancy close to full

Dexus unscathed by pandemic impacts with occupancy close to full

A diversified business model has been key to real estate group Dexus' (ASX: DXS) stability through tumultuous times according to the company's CEO, with total portfolio occupancy sitting at around 96 per cent.

As a result, the company remains in the black, posting a profit of $442.9 million for the December half.

Predictions of doom and gloom in the office and industrials real estate sector failed to scratch Dexus, with the company managing to maintain high occupancy of 96 per cent in its office portfolio, and 95.5 per cent in its industrial portfolio.

Rent collections were at 96 per cent for the entire portfolio and all funds performed well, with Dexus Wholesale Property Fund (DWPF) continuing to outperform its benchmark across all time periods, while the Healthcare Wholesale Property Fund (HWPF) achieved a one-year return of 15.3 per cent.

However, the $442.9 million profit was down on the prior corresponding period for the company which focuses on office and industrial real estate assets.

After net profit after tax (NPAT) fell by 23.3 per cent at the end of FY20, the group's profits dived again in the first half of the new financial year by 56 per cent.

Profit reduction was largely driven by net revaluation gains of investment properties of $160.8 million; $563.6 million lower than the same time last year.

Despite the group's NPAT diving, CEO Darren Steinberg said Dexus' results for the half were strong.

"Despite the widespread impact of the pandemic, the first half of FY21 has been characterised by increased leasing activity, relatively strong rent collections, initiatives to grow our funds management business and the selective recycling of assets," Steinberg said.

"The pandemic has reinforced the importance of having a diversified business model and strategy that can deliver through the cycle, demonstrated by our strong cash flow and resilient asset values.

"Our high-quality portfolio, the strength of investment demand for quality assets, and our platform capabilities will enable us to drive performance in this next stage of the real estate cycle."

The company's half was also characterised by key acquisitions and sales, including the acquisition of a food distribution site in Merrifield and the sale of Sydney's Grosvenor Place for $925 million.

Dexus also recently announced it is looking to sell Brisbane's 'Gold Tower'.

The tower, which was the Queensland capital's tallest when completed in 1978, offers approximately 27,826sqm of net lettable area (NLA) in the heart of Brisbane's business precinct.

Shares in Dexus are down 2.46 per cent to $8.52 per share at 12.43pm AEDT.

Never miss a news update, subscribe here. Follow us on LinkedIn, Instagram and Twitter.

Business News Australia

Help us deliver quality journalism to you.
As a free and independent news site providing daily updates
during a period of unprecedented challenges for businesses everywhere
we call on your support

Advertisement

Related Stories

Dexus puts Brisbane's Gold Tower on the market

Dexus puts Brisbane's Gold Tower on the market

After offloading almost $1.5 billion worth of Sydney properties i...

Dexus sells Grosvenor Place stake at discount, cites leasing risk

Dexus sells Grosvenor Place stake at discount, cites leasing risk

Property trust Dexus (ASX: DXS) has announced its third and large...

Online sales war heats up as Amazon announces second Melbourne centre

Online sales war heats up as Amazon announces second Melbourne centre

The war for Australia's retail shopping dollar is heating up ...

Ford distribution centre to be built in Merrifield, Dexus acquires site

Ford distribution centre to be built in Merrifield, Dexus acquires site

Ford Australia has announced today it will open a new autom...