Real estate investment trusts are favoured for their steady dividends, but what if you could get a high dividend and also capital gains?
The analyst team at Bell Potter has run the ruler over Dexus Industria REIT (ASX: DXI)'s recent results announcement and are forecasting just that.
I'll get to the specific numbers shortly. First, let's look at what Dexus announced this week.
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Solid operating result from Dexus
The trust announced this week that it had outperformed its FY26 guidance, with funds from operations per security coming in at 17.6 cents compared to its upgraded guidance of 17.4 cents.
Distributions per security were in line with guidance at 16.6 cents.
Net profit of $74.4 million was down from $84.2 million the previous year, with the movement primarily due to lower property valuation gains.
Portfolio income growth was "strong" at 5.3%, supported by rent increases and high occupancy of 98.8%.
The trust also has an ongoing buyback in place, with 60% of the initial 2.5% target completed and the buyback target doubled to 5%.
Dexus Fund Manager Jason Weate said regarding the result:
DXI has outperformed its upgraded guidance for the year primarily driven by strong leasing outcomes. Our active management approach continues to drive performance through proactive forward leasing and positive re-leasing spreads of 21.4%. With the benefit of our strong balance sheet, we remain focused on the momentum of our development pipeline and delivering on the buy back program which commenced in the second half of FY26. Occupier demand has remained resilient through 2026, as evidenced by leasing activity notwithstanding ongoing global uncertainty. Well-located, high-quality assets remain best placed to capture income and valuation growth through the cycle.
The trust's gearing ratio sat at 31.2%, at the lower end of the target range of 30% to 40%.
Dexus said it now had a portfolio with interests in 90 properties.
During the year, it acquired four industrial assets in Glendenning NSW, Dandenong South VIC, and Moorebank NSW.
The trust said re these purchases:
Since acquiring these assets, DXI has delivered the repositioning at Glendenning and secured a leasing pre-commitment across 100% of the asset, secured a renewal at 50 Jayco Drive, Dandenong South, and leased up an additional unit at Moorebank. These acquisitions demonstrate the Fund's ability to drive value through active management strategies.
High yield and price gains tipped
Bell Potter said in its note to clients that it was expecting a dividend yield of 7.1% from Dexus, and the broker has a price target of $2.70 on the securities, compared to $2.35 currently.
The broker said the trust had an improved earnings outlook and a compelling valuation.
