Dexus fund sells $155.5m of offices to go all in on industrial
A Dexus-managed trust is selling off unwanted assets to focus on the hot industrial sector.
A Dexus satellite trust has finalised deals that will see it offload its last office assets – at Brisbane Technology Park in Eight Mile Plains – for $155.5m.
The listed Dexus Industria REIT has struck option agreements to divest its final business assets at the park for a net price of $155.5m via two separate transactions.
The move, flagged by The Australian, is part of the fund’s shift into a focused industrial property REIT rather than also owning business parks and is aimed at helping it win fresh support to grow. The divestment is structured across two transactions.
Funds house Corval has entered into an agreement to acquire 11 of the 13 properties for a net price of $110.7m and another group, Exceed Capital, has entered into an agreement to acquire the remaining properties for a net price of $44.8m.
Dexus had turned around the performance of BTP through active leasing, lifting occupancy from 85.7 per cent in June 2023 to 98.2 per cent at December 2024, making it a compelling asset.
CBRE’s Jack Morrison and Peter Chapple and MP Commercial’s Peter Court and Mike Walsh negotiated the sale.
Both transactions are subject to capital raising, though the managers are confident they will be completed. Dexus Industria has taken a non-refundable deposit of $5.6m on the first transaction, with settlement anticipated in late August. Settlement of the second transaction is expected by October, and may be terminated if the first transaction does not go ahead.
The total sales price reflects a 4.2 per cent discount to an independent valuation at the end of June, showing the still difficult environment in fringe markets. The sales are expected to initially be dilutive to the Dexus-run trust’s Funds from Operations due to the relatively high passing yield generated by the BTP assets.
The impact after taking into account capital expenditure is expected to be broadly neutral, due to the more capital-intensive nature of suburban office assets compared to industrial assets.
Dexus is hopeful the fund will win support as a focused industrial REIT. The trust has bought one property and says the deal will see gearing reduced by about five percentage points, allowing the trust to maintain reinvestment capacity, while remaining below the target gearing range of 30-40 per cent.
