Leading real estate investment trust Dexus (ASX:DXS) has today released results for the half year ended 31 December 2022.
The Company secured $49 million in trading profits in FY23, whilst announcing $773 million balance sheet divestments, redirecting its capital opportunities with higher returns.
The office leasing incentives increased from 29.4% to 31.8%, while industrial occupancy fell slightly, with incentives decreasing from 13.5% to 10.9% at June 2022.
The Company’s balance sheet remains strong, with gearing an acceptable 25.6%, and 85% of debt hedged, representing a 20% increase since June 2022.
In response, Winston Sammut, Investment Manager at Sequoia Financial Group (ASX: SEQ), commented, “Notwithstanding the negative environment facing office markets in general, reaction to today’s Dexus result has been positive coming in slightly ahead of expectations and aided by Dexus’s office portfolio cap rate only rising 14bps to 4.89% from 4.75%, whilst the industrial cap rate rose 17bps to 4.46% from 4.29% at Jun-22.”
As cap rates represent the ratio of net operating income (NOI) to property value, a higher cap rate implies a lower property value, all other things being equal.
These better-than-expected results, “were assisted by high trading profits, as well as a contribution from funds management offset by higher interest costs, and tax,” he stated.
