Dexus Convenience Retail REIT 2024 Annual Results: Strong Income Resilience and Strategic Growth
DXC (DXC) Share Update August 2024 Sunday 11th
Dexus Convenience Retail REIT Releases 2024 Annual Results
Dexus Convenience Retail REIT (ASX:DXC) has released its 2024 annual results, showcasing a strong performance in income resilience and strategic growth initiatives. The REIT continues to provide investors with a defensive income stream, backed by high-quality tenant covenants and a diversified portfolio.
Instant Summary:
- FFO & distributions of 21.0 cents per security, at the upper end of the guidance range.
- 3.4% average rent review achieved.
- 2.8% like-for-like income growth.
- Gearing of 32.9%, around the midpoint of the target range.
- Portfolio valued at approximately $741 million.
- High occupancy rate of 99.7% by income.
Financial Overview
Dexus Convenience Retail REIT reported Funds From Operations (FFO) and distributions of 21.0 cents per security, landing at the upper end of the guidance range of 20.8 – 21.1 cents. This strong performance is driven by a 3.4% average rent review and a 2.8% like-for-like income growth.
The REIT's balance sheet remains robust with a gearing of 32.9%, which is well within the target range of 25 – 40%. This is supported by $57 million in divestments over the past two years, including $23.3 million in FY24 alone. The portfolio is valued at approximately $741 million, with a high occupancy rate of 99.7% by income.
Strategic Growth and Portfolio Management
Dexus Convenience Retail REIT continues to explore capital recycling opportunities and strategic growth beyond fuel and convenience retail. The Glass House Mountains redevelopment is a key project, expected to deliver strong returns with new sustainability initiatives, including 10 EV charging bays and rooftop solar.
The REIT has also maintained a long average debt maturity of 4.2 years, following $130 million of facility extensions and the retirement of a $30 million surplus facility to optimize debt costs. The portfolio reflects valuable landbank skewed to the eastern seaboard, with 89% of zoning to high-value land uses.
Sustainability and Tenant Commitment
Dexus Convenience Retail REIT is committed to sustainability, with initiatives such as sourcing 100% renewable electricity for controlled assets and engaging with major tenants to progress solar PV and EV charging rollout across 22 sites. The REIT has maintained a carbon-neutral position for FY23.
Top tenants, including Chevron, 7-Eleven, and Viva Energy, continue to reinvest in their sites, enhancing the convenience retail offering and supporting long-term site performance. The REIT's diverse and high-quality tenant base is a testament to its strong portfolio management.
The strong financial performance and strategic growth initiatives of Dexus Convenience Retail REIT are likely to have a positive impact on the company's stock. The high occupancy rate and secure income backed by high-quality tenant covenants provide a stable investment proposition. The focus on sustainability and tenant commitment further enhances the REIT's attractiveness to investors.
Investor Reaction:
Analysts are expected to react positively to the REIT's strong financial performance and strategic growth initiatives. The high occupancy rate and secure income stream are likely to be viewed favorably, while the focus on sustainability and tenant commitment may attract long-term investors.
Conclusion:
Investors should consider the strong financial performance and strategic growth initiatives of Dexus Convenience Retail REIT as a positive indicator for future returns. The REIT's focus on sustainability and tenant commitment further enhances its investment proposition. Investors are encouraged to monitor the REIT's ongoing developments and assess the potential long-term impacts on their portfolios.