Dexus Convenience Retail REIT (ASX:DXC)

Full Year 2026 Dexus Convenience Retail REIT Earnings Call Transcript

Aug 9, 2026 / 12:00 AM GMT

Release Date Price: A$2.69 (+0.75%)

Transcript

Key Points

Positve

Delivered FFO and distributions in line with guidance at $0.209 per security, supported by 3% like-for-like income growth from contracted rental escalators.
Portfolio quality improved with the completion of Glasshouse Mountains Northbound, which achieved a 17% development project IRR and a 5.8% yield on cost.
Maintained a strong balance sheet with gearing of 30.6%, no debt expiries until FY28, and added approximately $200 million of interest rate hedging to enhance earnings visibility.
Successfully divested three assets above book value, redeploying capital into an upsized 5% on-market securities buyback, which is FFO and value-accretive while trading at a discount to NTA.
Portfolio valuations increased by $27.4 million, with cap rates tightening 14 basis points, supported by contracted rental growth and continued liquidity in the direct property market.
High-quality tenant base with 95% of fuel operator income from large-cap operators, underpinning strong income quality and resilience.
The development pipeline is expected to increase metro and highway exposure to around 90% of the portfolio, enhancing long-term optionality and resilience.

Negative

FY27 FFO is expected to be approximately 3% to 4% down on FY26, with the all-in cost of debt rising about 70 basis points from 4.8% to 5.5%.
The distribution payout ratio is expected to be marginally above 100% of FFO in FY27, which is temporary but indicates earnings are not fully covering distributions.
Higher interest costs and the impact of FY25 divestments partially offset the 3% like-for-like income growth.
The timing of the Glasshouse Mountains Southbound development is uncertain, as lease negotiations with prospective tenants are still ongoing and the project has not yet been committed.
The company trades at a significant 30% discount to NTA, reflecting a disconnect between listed market pricing and direct property values.
Interest rates have increased since the half year, creating a headwind for earnings despite the company's hedging efforts.
Gearing is expected to rise to the mid-30s range upon delivering the development pipeline, which may limit financial flexibility.

Refinitiv StreetEvents Event Transcript
E D I T E D V E R S I O N

DXC.AX - Dexus Convenience Retail REIT
Full Year 2026 Dexus Convenience Retail REIT Earnings Call
Aug 10, 2026 / 12:00AM GMT

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Presentation
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Unidentified_1 [1]
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Thank you for standing by and welcome to the Dexus Convenience Retail REIT FI26 Results Briefing. All participants are in a listen-only mode. There will be a presentation followed by a question-and-answer session. For broker analysts that would like to ask a question, please press *1. I would now like to hand the conference over to Mr. Pat DeMaria, Fund Manager, DXC. Please go ahead.

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Unidentified_2 [2]
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Good morning, everyone. And thank you for joining Dexus Convenience Retail REIT's FY26 results call.

I'm Pat DeMaria,

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