Should you buy DEXUS Property Group for a higher income?

The quarterly update from DEXUS Property Group (ASX:DXS) is reinforcing my view that the “confession season” won’t be as bad as some fear. Here’s why.

| More on:
a woman

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The latest quarterly result from DEXUS Property Group (ASX: DXS) makes for anything but exciting reading, but at the very least the update should bring further comfort to equity markets about the health of corporate Australia.

The office and industrial property focused group said it continues to see “positive leasing momentum” in Sydney and Melbourne, with net absorption for east coast CBD office space hitting a four-year high in the three months to end March.

Absorption rate refers to the amount of available office space that is leased out in a specific period and management is confident that the positive trend will continue.

What’s also noteworthy is the drop in incentives that the landlord has to offer to secure tenants. The average incentive dropped to 15.4% in the March quarter, compared with 16.1% in the December quarter.

DEXUS’ positive update gels nicely with Stockland Corporation Ltd’s (ASX: SGP) quarterly results, which also painted an upbeat picture for the retail and building materials sectors.

It will be interesting to see what Scentre Group Ltd (ASX: SCG) reports in its quarterly over the next few weeks. Scentre develops and owns Westfield branded shopping malls in Australia and New Zealand.

Shares in DEXUS are up 0.7% at $7.58 and Scentre is 1.9% higher at $3.82 during lunch time trade, while Stockland gave up early gains to trade flat at $4.51.


While I am pleased to see good results and updates from the sector, I am not a buyer of these investments as I think it’s hard to find value after property stocks outperformed strongly.

The S&P/ASX 200 Australian Real Estate Investment Trust (A-REIT) Index has increased by a quarter of its value over the past year compared with a 7.6% gain by the broader top 200 stock index.

I suspect this gap will close over the next six months.

If you are looking for a better value income stock, sign up for free below to see what the experts at the Motley Fool have uncovered.

Motley Fool contributor Brendon Lau has no position in any stocks mentioned. Follow me on Twitter - The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on ⏸️ Investing

Close up of baby looking puzzled
Retail Shares

What has happened to the Baby Bunting (ASX:BBN) share price this year?

It's been a volatile year so far for the Aussie nursery retailer. We take a closer look

Read more »

woman holds sign saying 'we need change' at climate change protest

3 ASX ETFs that invest in companies fighting climate change

If you want to shift some of your investments into more ethical companies, exchange-traded funds can offer a good option

Read more »

a jewellery store attendant stands at a cabinet displaying opulent necklaces and earrings featuring diamonds and precious stones.
⏸️ Investing

The Michael Hill (ASX: MHJ) share price poised for growth

Investors will be keeping an eye on the Michael Hill International Limited (ASX: MHJ) share price today. The keen interest…

Read more »

ASX shares buy unstoppable asx share price represented by man in superman cape pointing skyward
⏸️ Investing

The Atomos (ASX:AMS) share price is up 15% in a week

The Atomos (ASX: AMS) share price has surged 15% this week. Let's look at what's ahead as the company build…

Read more »

asx share price competitions represented by businessmen arm wrestling
Retail Shares

How does the Temple & Webster (ASX:TPW) share price stack up against Nick Scali (ASX:NCK)?

How does the Temple & Webster (ASX: TPW) share price stack up against rival furniture retailer Nick Scali Limited (ASX:…

Read more »

A medical researcher works on a bichip, indicating share price movement in ASX tech companies
Healthcare Shares

The Aroa (ASX:ARX) share price has surged 60% since its IPO

The Aroa (ASX:ARX) share price has surged 60% since the Polynovo (ASX: PNV) competitor listed on the ASX in July.…

Read more »

asx investor daydreaming about US shares
⏸️ How to Invest

How to buy US shares from Australia right now

If you have been wondering how to buy US shares from Australia to gain exposure from the highly topical market,…

Read more »

person reading news on mobile phone
⏸️ Investing

Why Fox (NASDAQ:FOX) might hurt News Corp (ASX:NWS) shareholders

News Corporation (ASX: NWS) might be facing some existential threats from its American cousins over the riots on 6 January

Read more »