Dexus Convenience Retail REIT (ASX: DXC) released its FY25 Results yesterday. The ASX REIT stock rose more than 4% thanks to delivering Funds From Operation (FFO) and distributions above guidance.
Dexus Convenience Retail REIT is a listed Australian real estate investment trust that owns service stations and convenience retail assets.
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Earnings results
Dexus Convenience Retail reported net profit after tax (NPAT) of $39.4 million, compared to a profit of $3.4 million in the prior year, primarily reflecting property valuation gains recorded this year compared to valuation losses in the prior year.
It also announced distributions of 20.7 cents per security, slightly above guidance of 20.6 cents per security.
The company reported an increased like-for-like net property income growth to 2.9% supported by average rent reviews of 3.1% and increase in occupancy to 99.9%.
Additionally, the report included news that its Glass House Mountains Northbound site is on track for completion in February 2026, fully pre-leased on an average 18-year lease term.
Jason Weate, DXC Fund Manager said the company's portfolio continues to generate defensive income with embedded rental growth.
During FY25, we improved DXC's overall portfolio quality and strengthened our balance sheet through strategic divestments, creating capacity to redeploy capital into higher-returning opportunities.
Today's result demonstrates our ability to deliver on our investment proposition to generate secure and defensive income with embedded growth, supported by prudent capital and active portfolio management.
Is there more upside?
It seems that investors were pleased with the company's results, as DXC shares closed on Monday 4.04% higher.
Its share price has now risen approximately 10% in the last 12 months.
Broker Bell Potter anticipates further increases from Dexus shares.
In a report over the weekend, the broker analysed the ASX REIT market and listed Dexus Convenience Retail REIT shares as a buy.
According to Bell Potter, Australia's retail real estate market is strengthening, with demand rising and vacancy rates falling to 4.9%, while new supply remains well below average.
Strong population growth and better-than-expected retail spending are supporting this trend, creating favourable conditions for retail REITs.
The broker has a price target of $3.35, which indicates an upside of roughly 8.41% from yesterday's closing price.
