Tag: DXS

FY20 results were below Citi’s estimates. The FY20 distribution was revised up to 50.3c to be in line with free cash flow.

Falling market rents have caused Citi to lower office income forecasts. While Sydney and Melbourne entered the pandemic restrictions in a strong position, with rents near historical highs and vacancies at their lows, economic conditions have deteriorated.

Morgan Stanley believes Dexus is “ideal” for taking shelter its market volatility. The leases are underpinned by fixed 3.5-4%/year increases, while a tight Sydney office market should cushion the impact of uncertainties.

The company has marginally upgraded guidance at the first half result, which was broadly in line with expectations.

Dexus management announced it has externally revalued 109 of its 114 assets, resulting in an estimated $250m valuation uplift, or a 1.6% increase to its December 2018 book value.

Dexus and DWPF have exercised their rights to acquire the remainder of MLC tower, taking ownership to 50% each.

The company delivered first-half results that were ahead of expectations, largely because of a positive skew in trading profits.

Dexus has reported revaluation gains of $405m, or a 3.1% increase to its June 2018 book value. Deutsche Bank believes office cap rates will continue to compress over the next 12 months and retail cap rates should start softening.

Dexus, which currently owns three office assets in Perth, believes the office market there has bottomed and is forecasting 2-4% effective rental growth. Assumptions are supported by limited office supply until 2023 and a recovery in mining employment.

Earnings growth is being adversely affected by dilutive asset sales and a reduced trading profit contribution, Macquarie observes.

Deutsche Bank believes, since the appointment of new CEO in 2012, the sale of offshore assets in favour of Sydney office assets has proven positive.

Positive Sydney CBD re-leasing spreads could be the catalyst which drives upgrades to FY17 comparable net operating income, Morgan Stanley believes.

Improving fundamentals in the Sydney CBD should be the main driver of 3-4% growth in net operating income for office over the next three years, Morgan Stanley believes, as 30% of the company’s portfolio is re-set at improving rents.

The proposed merger with Investa Office ((IOF)) is not proceeding but Macquarie would not discount further M&A. The broker expects this theme to prevail over 2016.

Dexus has announced a $450m equity raising and $400m institutional placement with a $50m security purchase plan.

DXS – JP Morgan rates the stock as Upgrade to Overweight from Neutral

Dexus reaffirmed guidance at its investor day and revealed contract exchanges imply FY15 profit is now secured.

DXS – Macquarie rates the stock as Upgrade to Outperform from Neutral

The broker considers the acquisition of Commonwealth Property ((CPA)) a strategic positive as the greater exposure to A-grade assets broadens the tenant base and provides for increased market intelligence . The broker is resuming coverage with a Neutral rating and $1.11 target.

DXS – Macquarie rates the stock as Re-initiate Coverage with Outperform rating

Dexus and CPPIB in a 50:50 JV have made an indicative non-binding proposal to the responsible entity of Commonwealth Property ((CPA)). The offer is for the acquisition of units other than those to which Dexus is already entitled by way of an informal trust scheme.

UBS rates the stock as Neutral

Dexus is to repurchase some hybrid securities and Deutsche estimates the decision will be slightly earnings accretive in FY13.

Target $0.97 (was $0.94). Interim earnings were slightly better than the broker had forecast and results in minor changes to its estimates and price target.

Dexus’ strong balance sheet, minimal active earnings and mostly domestic exposure has assisted in it outperforming the A-REIT sector by 15.6% over the past month, analysts at Credit Suisse report. They add the relative outperformance amounts to a whopping 24.7% on a rolling annual basis.

The broker notes recent press speculation has Dexus looking at offshore M&A, which in this environment has spooked the market somewhat. The broker doesn’t buy it, and suggests that with an 8% yield and an 18% discount to asset value the now weakened stock becomes a Buy.

The broker has downgraded to a Neutral rating on the stock on valuation grounds, while it also expects the stock will perform broadly in line with peers given rising cap. rates and development risk from its projects.

Analysts from Credit Suisse have upgraded the rating for Dexus Property Group from Neutral to Outperform as they believe management has clearly performed over the past 12 months, reducing gearing to 31.3%, removing all pre-emptives from the portfolio, and establishing a 100% internally managed structure.

The broker has noted that the stock has year-to-date underperformed the XPJ by -1.6% from being the top performer in the REIT sector in 2007.