Dexus recently announced its intention to acquire APN Property Group ((APD)) for $320m, to be funded by existing liquidity.
Macquarie notes as of 31 December 2020, APN Property had $2.9bn of funds under management of which 51% consisted of listed equities and 44% was accounted for by two listed REITs – APN Industria REIT ((ADI)) and APN Convenience Retail REIT ((AQR)).
At the current price, the broker notes Dexus seems to be paying a higher multiple for the funds management business and that Dexus will need to grow its assets under management to justify the price.
Outperform retained with a target of $10.60.
Sector: Real Estate.
Target price is $10.60.Current Price is $10.01. Difference: $0.59 – (brackets indicate current price is over target). If DXS meets the Macquarie target it will return approximately 6% (excluding dividends, fees and charges – negative figures indicate an expected loss).