The ASX dividend stock Dexus Industria REIT (ASX: DXI) could be one of the most underrated businesses for passive income that Australians can buy, in my view.
As the name suggests, this business is a real estate investment trust (REIT) that owns a portfolio of industrial properties/warehouses across major Australian cities. It aims to provide sustainable income and longer-term capital growth.
Its portfolio includes 88 properties that were valued at $1.4 billion at 31 December 2025. Let's get into what makes it an appealing option for passive income.
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Compelling ASX dividend stock
The business regularly tells investors what passive income it expects to pay to investors.
For the 2026 financial year, it expects to deliver an annual distribution of 16.6 cents per security, representing a forecast distribution payout ratio of 95.4% of its net rental profit (funds from operations – FFO). This translates into a distribution yield of 6.9% at the time of writing.
The payout ratio being under 100% shows the business has a sustainable level of passive income and it's maintaining a bit of profit that can be used to improve the business.
Why this is a good investment for the long-term
The business has evolved its portfolio into a focused Australian industrial REIT following the divestment of the Brisbane Technology Park. It has re-weighted its portfolio (including acquisitions) towards high-quality, well-located, growth-oriented industrial assets.
The REIT notes that vacancy rates remain low across core industrial markets, with high land and construction costs putting pressure on the supply pipeline. It suggested that the sector will be supported by a growing population and limited available supply of more properties.
Most (87%) of the ASX dividend stock's property portfolio has fixed rental increases, which helps the business deliver rising overall rental income – a key input for growing rental profit and higher distributions.
Its portfolio is almost entirely leased, with an occupancy rate of 99.7%, assuring it's maximising the rental income it can deliver. During the FY26 half-year period, it delivered an underlying like-for-like increase of 5.6%, supported by contracted rental escalations, strong re-leasing spreads (new rental contracts) and higher average occupancy throughout the period.
The business looks undervalued partly because it has seen its unit price fall by approximately 20% since September 2025.
It reported its net tangible assets (NTA) were $3.39 per unit as at 31 December 2025. That essentially tells investors what the property portfolio is worth, on a per-unit basis, minus the loans and including all other tangible assets and liabilities.
The latest Dexus Industria REIT unit price is valued at a 29% discount to its NTA. That's a big and attractive discount!
