Dexus flags pressure in FY27 outlook

Dexus has delivered on its FY26 guidance, reporting annual funds from operations of $483.9 million and distributions of 37 cents per security as it continues to reposition its property funds and management business.

However, Dexus said FY27 earnings would face pressure from lower trading profits and performance fees, higher finance costs and the practical completion of Atlassian Central.

The group expects adjusted funds from operations (AFFO) of between 37.5 and 39.5 cents per security in FY27, while maintaining distributions at 37 cents per security.

The property group reported AFFO of 45 cents per security for the year to 30 June, while statutory net profit after tax rose to $482.3 million from $136.1 million a year earlier, primarily reflecting stabilising capitalisation rates and positive property revaluations.

Dexus group chief executive and managing director Ross Du Vernet said the group had delivered its guidance despite a volatile economic environment, with its core portfolio continuing to perform strongly.

"We delivered on our guidance in line with expectations in an environment of economic volatility and challenges for our business," Du Vernet said.

The group's office portfolio-maintained occupancy of 95.7%, while industrial occupancy stood at 94.6%, with rent collections remaining strong at 99.7%.

Dexus also raided $2 billion in third party capital during the year, including a $500 million commitment to the Dexus Wholesale Property Fund, while exceeding its divestment target with $2.5 billion of disposals since FY24.

The group also secured a partnership with Boral that provides capital-efficient access to a long-dated development pipeline with potential lettable area of around 2.5 million square metres.

Du Vernet said the initiatives were supporting Dexus's transition towards a more diversified and capital efficient business.

"We remain committed to pursuing our transition to become a diversified and more capital efficient business which will ultimately deliver sustainable earnings growth," he said.