Why Dexus (ASX:DXS) shares are swelling up?

Highlights

  • Dexus prices were soaring in the early trading hours followed by the ASX announcement.
  • Dexus announced the acquisition of industrial properties portfolio.
  • The acquisition is done as a part of eth Dexus strategic objective to develop its find management business.

Dexus Property Group (ASX:DXS) shares were up by 1.556% to AU$11.090 at 3:00 PM AEST after it announced the acquisition of AU$1.5 billion.

What is acquired by Dexus?

Alongside APN Industria REIR (ADI), Dexus acquired a portfolio of industrial properties as a part of its strategic objective of diversifying and expanding its fund management business.

The acquisition comprises

  • Jandakot Airport that is located in Perth, Western Austrlia (initially 33.3% ADI, 66.7% Dexus) was acquired off-market. The portfolio includes circa 80 hectares of development land, 49 properties and operating airport business. The price of the acquisition is AU$1.3 billion with an equity commitment of AU$895 million.
  • ADI and DXS jointly acquired Lot 2, 884-928 Mamre Road, Kemps Creek, NSW for the total consideration of AU$125.4 million. Both companies will have equal ownership in the acquisition.
  • ADI will acquire 2 Maker Place, Trugania, Victoria for AU$69.0 million.

What is the impact of aquation on Dexus?

Through the debt facility, the combined transaction will be funded by Dexus.

In addition to this, the acquisition will increase Dexus’s Adjusted Funds for Operations for each security in FY22.

What management has to say about acquisition?

Darren Steinberg, CEO of Dexus commented,

SOURCE: ASX Announcement

Ross Du Vernet, a chief investment officer of Dexus commented,

SOURCE: ASX Announcement

Bottom Line

Dexus is one of the largest real estate groups of Australia that deals in property investment, asset management, asset development and funds management. The acquisition of the industrial property portfolio is a move towards achieving the objective developing funds management business. In the ASX announcement, company mentioned that market will be updated with guidance in February 2022. The results will be awaited.

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