Dexus and Boral partner in $10bn project

Dexus has announced a joint venture with Boral to develop a major logistics precinct in Melbourne's western corridor with a potential lettable area of 2.5 million square metres.

Dexus chief executive Ross Du Vernet confirmed on the sidelines of the Macquarie conference today the expected end asset value will exceed $10 billion.

The project will transform a 630-hectare site at Ravenhall, about 20 kilometres from the CBD, into what is likely to become the largest institutionally held logistics precinct in Australasia.

Du Vernet said opportunities of this scale were rare, positioning the partnership to capture long-term demand for logistics and industrial space in a key growth corridor.

The joint venture has been designed to optimise capital efficiency. Dexus and third-party investors will collectively hold a 50% stake, with Boral retaining the remaining half through staged land contributions once rezoning is secured.

Dexus expects to maintain at least a 10% interest in each development stage, with additional capital sourced from institutional partners. Each phase, or "superlot" will be progressively developed and may incorporate external funding and leverage.

The group will take on multiple roles across the project, including development, property and investment management, generating fee income and each stage is executed. Dexus said the project reflects continued investor demand for large-scale logistics assets, driven by ecommerce growth, supply chain optimisation and population expansion in major urban centres.

Dexus also provided and update on it's March quarter performance.

Office occupancy rose to 93.1% and industrial occupancy was at 96.9%.

The Dexus Wholesale Property Fund continued to outperform benchmarks over multiple time frames, while significant third-party equity commitments totalling approximately $1.75 billion have been raised since FY25.

Looking ahead, Dexus anticipates FY27 is expected to present challenges with diminished contributions from performance fees.

The firm said it is focused on optimising asset performance and executing a disciplined buyback strategy to enhance long-term value for security holders, particularly in high-quality, well-located assets. Overall, the Australian office market is experiencing improved demand, particularly in Sydney and Brisbane CBDs.