A one-off, or the first of what could be a few upgrades from the property sector – especially CBD building owners and investors after Dexus revealed a 3% rise in forecast distribution for the year to June 30?
Dexus is the country’s biggest commercial property landlord and investor and the 3% growth in distributions per security for the year to June erases the previous guidance for flat outcome.
The company told the ASX on Monday that it has lifted its outlook after saying previously it would keep its payout in line with last year at 50.3 cents.
That guidance came earlier in the year when the outlook for the property sector, especially retail and CBD wasn’t as optimistic as it is now with a step up in leasing inquiries and new agreements.
The country’s largest office landlord earlier this month said it was experiencing an increasing level of inquiry, particularly for smaller tenancies from customers in Sydney and Melbourne, which translated to a higher level of leasing during the quarter.
The revised forecast means Dexus now expects to pay a distribution of about 51.8 cents a security for the full year
Dexus paid an interim distribution of 28.8 cents a security earlier in the year and before the new update, had been looking for a second half figure of 21.8 cents. Now that is up 1.5 cents to 23.2 cents a security.
Analysts are watching to see if this is a one-off peculiar to Dexus or the start of upgrades from the sector and from groups like GPT (for its interim) and Mirvac and Stockland (for the full June 30 years).
“Today’s upgrade is a result of better-than-expected outcomes across the underlying property portfolio, as well as delayed settlements for asset sales and other initiatives across the business,” chief executive Darren Steinberg said.
Dexus said it will announce its full-year results on Tuesday, August 17.
Dexus securities rose 0.48% to $10.43 yesterday.