1 October we become SureStone CapitalSame team, same ABN. Our website and email addresses move to surestone.com.au.
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Key points:
Strong occupancy, long WALE and major national/international tenants underpin portfolio income Development pipeline, led by assets like Glasshouse Mountains, targeted for low-teens IRR and diversification On-market buyback and disciplined gearing used to address discount to NTA
Pat De Maria, Fund Manager of Dexus Convenience Retail REIT (ASX:DXC) outlines a positive outlook for the portfolio, highlighting full-year FY26 distributions of 20.9 cents per security and funds from operations of $28.7 million. De Maria points to like-for-like income growth of 3%, supported by average rent reviews of 3.3% and occupancy of 99.2%, as indications of a resilient income stream. For FY27, distributions are planned to be maintained at 20.9 cents, implying a yield of around 7.8%, which De Maria characterises as consistent with the fund’s income-led focus.
De Maria cites the Glasshouse Mountains Northbound development, which delivers a 17% IRR, as an example of the type of project targeted, noting that future development returns are expected to sit in the low teens. He states that long-term portfolio quality, tenant diversity and long weighted average lease expiry of 7.6 years underpin confidence in income sustainability, despite higher interest rates and hedging transitions.
On valuation, De Maria notes Dexus Convenience REIT (ASX:DXC) is trading at a significant discount to NTA and attributes this partly to smaller scale and being outside the ASX 300. He highlights the on-market buyback, disciplined capital allocation and gearing in the 30–35% range as key tools to close the valuation gap.
