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Dexus boosts dividend distribution

Dexus Property Group (ASX: DXS) announced (link opens in PDF) today that it is dishing out 3.11 cents per share in dividends for the six months ending 30 June. Compared to its most recent 2.89 cent March distribution, this newest number represents a 7.6% increase.

The move comes as part of the corporation’s decision to increase its payout ratio from 75% of funds from operations (FFO) to 80%. Dexus’ initial plans to keep payouts at 75% changed when the company completed a number of net effective rent basis leasing agreements, effectively increasing its overall cash flow. These transactions, along with “prudent and active management” of capital expenditure, were enough to push Dexus’ distribution up five percentage points.

Although this new increase will add to shareholders’ direct returns this winter, Dexus’ fiscal 2013 distribution guidance currently remains unchanged at 7.75 cents, representing a 77.4% payout ratio. At current prices, that amounts to a 7.4% yield.

The new distribution will be available to investors owning Dexus shares before 24 June, and will be distributed on 30 August.

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Motley Fool contributor Justin Loiseau has no position in any stocks mentioned in this article. You can follow him on Twitter @TMFJLo.

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