Dexus (ASX:DXS) shares gain over 13% in a year. Here’s why

Image Source: © Jirsak | Megapixl.com

Highlights

  • Real estate giant Dexus has marked a significant rise on the ASX in last 12 months.
  • The company has exchanged contracts to sell Brisbane based 32-level, A-grade office building.
  • DXS’s NPAT jumped 82% on pcp in HY22.

Australian real estate group, Dexus (ASX:DXS) has been on investors’ radar of late.

On Tuesday, Dexus shares traded marginally lower at AU$10.640 at 12:45 PM AEDT today. Let’s look at why investors are keeping the stock on their radar. 

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 Recent developments with DXS 

In late February, DXS conditionally exchanged contracts to sell Brisbane based 12 Creek Street, with Dexus Wholesale Property Fund to own the remaining 50% interest.

12 Creek Street is a 32-level, A-grade office building and includes The Annex, which comprises a new boutique office space. BDO Services, Moray & Agnew and AFSA are among key customers.

With this, the company anticipates a further AU$391 million, which will be used to repay debt.

Apart from this, DXS has further settled the sale of 201 Miller Street which was sold for AU$152.4 million.

DXS financial performance 

The real estate company has delivered a strong financial performance in HY22, indicating an active start to the year despite COVID-19 impacts. This can be a possible reason why investors are looking for this stock.

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Image source – © Darren4155 | Megapixl.com

As per DXS’s HY22 report released in February, the company reported 82% jump (on pcp) in its net profit after tax at AU$803.2 million. This was majorly driven by net revaluation gains of investment properties that stood at AU$486.2 million.

It maintained a robust balance sheet with gearing of 31.1% at the lower end of the 30-40% target range.

Despite COVID-19, the company reported rent collections of 97.9% for HY22, ensuring the viability of the small business customer base.

Although the company is receiving fewer rent relief requests, it continues to work with customers on the requests.

Apart from this, DXS’s office property, industrial property, and management operations FFO witnessed a significant increase of 2.5%, 20.3% & 36.3%, respectively.

Dexus has continued to show strong performance across its funds management business. It has raised around AU$1.3 billion across funds in HY22.  

Moreover, Dexus retained its guidance to deliver distribution per security growth of not less than 2% for 12 months ended on 30 June 2022. 

DXS share price performance 

While the stock has gained 13.33% in the last 12 months, it has dropped 5% on YTD this year and 4% in the previous three months. Meanwhile, the stock gained 1% in the last week, showing a slight improvement.


 


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