Highlights

• FY26 AFFO was A$483.9 million, or 45.0 cents per security, while the distribution was maintained at 37.0 cents per security.

• Dexus reported a A$15.3 billion property portfolio, including A$9.8 billion of office Assets and A$3.6 billion of industrial assets.

• Look-through gearing was 33.4%, with A$2.5 billion of cash and undrawn facilities and 91% of Debt hedged.

• FY27 AFFO guidance is 37.5 to 39.5 cents per security, while distribution guidance remains 37.0 cents per security.

Dexus (ASX:DXS) is an Australian property group with office and industrial investments alongside a funds management platform. Its FY26 result showed stable cash Earnings and an unchanged distribution, but the FY27 outlook points to lower AFFO as financing costs rise and performance fees and trading profits ease. This places greater focus on payout cover, Capital recycling and project execution.

FY26 Earnings and Distribution

For the year ended 30 June 2026, Dexus reported AFFO of A$483.9 million, equivalent to 45.0 cents per security. Distributions totalled A$397.4 million, or 37.0 cents per security, representing a Payout Ratio of 82.1% of AFFO. Statutory net profit after tax was A$482.2 million. Because statutory profit includes property valuation movements, AFFO is the more relevant measure for recurring cash earnings and distribution coverage.

Portfolio Performance

At the end of FY26, Dexus owned a A$15.3 billion property portfolio. Office assets accounted for A$9.8 billion and industrial assets for A$3.6 billion. Office occupancy was 95.7% by income, industrial occupancy was 94.6%, and rent collections were 99.7%. Office funds from operations were A$517.5 million, while industrial funds from operations reached A$140.4 million. Industrial like-for-like income growth was 8.3%.

Funds Management and Development

Dexus also manages capital for third-party investors. During FY26 it raised A$2.0 billion of third-party equity, including a A$500 million commitment to a development fund. Its broader development pipeline was A$12.8 billion across balance-sheet assets and partner funds. The management Business contributed A$128 million of funds from operations, although fee and performance income eased during the year.

Balance Sheet and Capital Recycling

Look-through gearing was 33.4%, within the 30% to 40% target range. Dexus reported A$2.5 billion of cash and undrawn facilities, while 91% of debt was hedged at a weighted average rate of 3.0%. The weighted average debt Maturity was 4.2 years. The group also exchanged or settled A$1.9 billion of divestments during FY26 and restarted its securities buyback, making asset recycling an important part of funding developments and capital management.

FY27 Guidance and Key Variables

For FY27, Dexus guided to AFFO of 37.5 to 39.5 cents per security and distributions of 37.0 cents per security. The lower earnings range reflects expected reductions in performance fees and trading profits, higher financing costs and the impact of major project completions. The group is also reviewing A$7.3 billion of infrastructure funds, with potential outcomes including restructuring or consolidation.

Key Insights

Dexus enters FY27 with a stable distribution but a narrower earnings buffer. Portfolio occupancy remains high, industrial property continues to contribute growth and gearing remains within the stated range. However, lower guided AFFO means financing costs, asset sales, project timing and funds management income will carry more weight. Office Demand and valuation movements also remain important variables for the year.