Dexus Property has sold its Kent St asset in Sydney at a 1.3% premium to book value, which Macquarie estimates as being -1% dilutive to annual funds from operations. The REIT will continue to sell down high capital intensity assets.
Funds will be recycled into new development and funds management opportunities. Such recycling will prove FFO accretive in the longer term, the broker notes, and funds management offers upside risk.
Outperform retained, target rises to $11.93 from $11.90.
Sector: Real Estate.
Target price is $11.93.Current Price is $11.15. Difference: $0.78 – (brackets indicate current price is over target). If DXS meets the Macquarie target it will return approximately 7% (excluding dividends, fees and charges – negative figures indicate an expected loss).