Dexus Industria REIT secures full ownership of Sydney logistics asset for $49.6 million
Dexus Industria REIT (ASX: DXI) has acquired Dexus’s 50% stake in 12 Church Road, Moorebank, consolidating to 100% freehold ownership in a transaction valued at $49.6 million. The Dexus Industria Moorebank acquisition reflects a capitalisation rate of 5.25% and forms part of DXI’s capital redeployment strategy following the Brisbane Technology Park divestment.
The transaction, which simultaneously exchanged and settled on 9 February 2026, consolidates ownership of a modern small-unit industrial estate in Sydney’s supply-constrained Inner Southwest precinct. The property is currently 63% occupied with a Weighted Average Lease Expiry (WALE) of 2.8 years. Dexus will provide income support for vacant space during FY26, with the acquisition expected to be broadly neutral to funds from operations (FFO) in FY26.
The purchase price aligns with the independent valuation as at 31 December 2025, reflecting institutional-grade pricing in a tight Sydney industrial market. The 5.25% capitalisation rate signals confidence in the asset’s quality and location within a precinct experiencing strong tenant demand and limited new supply.
| Metric | Detail |
|---|---|
| Purchase Price | $49.6 million |
| Cap Rate | 5.25% |
| Occupancy | 63% |
| WALE | 2.8 years |
| Ownership | 100% freehold |
| Settlement Date | 9 February 2026 |
What is a capitalisation rate and why does it matter?
A capitalisation rate (cap rate) represents the ratio of a property’s net operating income to its purchase price, expressed as a percentage. This metric helps investors assess whether an acquisition price represents fair value relative to the asset’s income-generating potential.
Lower cap rates typically indicate higher-quality assets in stronger markets with lower perceived risk. A 5.25% cap rate in the context of Sydney’s Inner Southwest industrial precinct suggests institutional-grade pricing for a modern logistics facility in a supply-constrained location.
For DXI securityholders, the cap rate provides a benchmark for comparing this acquisition against alternative investment opportunities and helps contextualise the transaction’s strategic rationale within the broader portfolio.
Asset specifications and location advantages
The 12 Church Road property comprises a modern, high-clearance warehouse facility with a small-unit industrial format. The asset achieved practical completion in February 2025 and has since secured material leasing success, reducing near-term occupancy risk.
The facility benefits from strategic positioning adjacent to the Moorebank intermodal terminal with direct connectivity to the M5 Motorway. This location provides access to 93% of Sydney’s population within 60 minutes, positioning the asset to capture demand from logistics operators, e-commerce tenants, and freight-dependent businesses.
Key location and specification highlights include:
- Direct M5 Motorway access for arterial connectivity
- Adjacent positioning to Moorebank intermodal terminal
- Small-unit format capturing demand from smaller logistics operators
- Modern, high-clearance warehouse specifications
- Located in Sydney’s supply-constrained Inner Southwest precinct
The small-unit format differentiates the property from larger big-box logistics facilities, capturing a segment of tenant demand that values flexibility and proximity to Sydney’s population centres. Supply constraints in the Inner Southwest precinct support rental growth potential as available industrial land diminishes.
Current occupancy and leasing outlook
The property’s 63% occupancy rate reflects progress since practical completion in February 2025, with management focused on continuing to lease up the remaining vacant space. The 2.8-year WALE indicates a relatively short lease profile, presenting re-leasing opportunities at potentially higher market rents as leases expire.
Dexus’s commitment to provide income support for vacant space during FY26 mitigates near-term earnings impact while leasing activity progresses. This arrangement de-risks the acquisition by ensuring the transaction remains broadly FFO neutral in FY26, allowing DXI to capture the asset’s long-term value without immediate dilution to distributions.
The combination of current vacancy and low WALE presents an active asset management opportunity. As leasing progresses and leases expire, DXI can capture rental growth in a supply-constrained market where tenant demand for modern, well-located industrial space continues to strengthen.
Balance sheet impact and gearing position
The acquisition will be funded through existing debt facilities, increasing look-through gearing by approximately 2.3 percentage points. Pro forma gearing is expected to remain below the 30% to 40% target range, demonstrating disciplined capital management while pursuing portfolio growth.
The modest gearing increase preserves balance sheet flexibility for future opportunities. DXI retains headroom within its target gearing range, allowing management to pursue additional acquisitions or fund capital expenditure without breaching conservative leverage thresholds.
This approach balances growth objectives with financial prudence, a consideration for securityholders evaluating the REIT’s capacity to execute its capital redeployment strategy while maintaining a resilient balance sheet through economic cycles.
Fund Manager outlines strategic rationale
Jason Weate, DXI Fund Manager, framed the acquisition within the broader capital redeployment programme following the Brisbane Technology Park divestment.
Jason Weate, DXI Fund Manager
“This transaction continues the successful redeployment of capital following the divestment of Brisbane Technology Park, with proceeds reinvested into quality industrial assets across Sydney and Melbourne’s supply-constrained markets. The asset’s quality specifications and positioning within Sydney’s core logistics precinct support long-term value creation for securityholders. With material leasing success since practical completion of the development in February 2025, DXI remains focused on continuing to lease up the asset.”
The commentary reinforces management’s strategic focus on core industrial markets where supply constraints and population growth support rental growth and capital appreciation. By concentrating capital in Sydney and Melbourne, DXI aims to capture demand from Australia’s two largest industrial and logistics markets.
The emphasis on continuing to lease up the asset signals an active asset management approach, where DXI’s operational capability and Dexus’s property management platform can drive occupancy improvements and rental growth over the medium term.
Portfolio context
DXI’s investment property portfolio is valued at $1.5 billion as at 30 June 2025, positioned across major Australian cities with a focus on high-quality industrial warehouses. The fund maintains a target gearing range of 30% to 40%, providing flexibility to pursue accretive acquisitions while preserving balance sheet resilience.
DXI is managed by Dexus (ASX: DXS), an integrated real asset group with over four decades of expertise in real estate investment, funds management, asset management, and development. This management platform provides operational capability to execute leasing strategies, manage tenant relationships, and optimise asset performance across the portfolio.
The Moorebank acquisition represents a strategically aligned addition to DXI’s portfolio, consolidating ownership of a modern logistics asset in a supply-constrained precinct where the fund already held a 50% stake. Full ownership simplifies asset management, eliminates co-ownership complexities, and positions DXI to capture the full upside from leasing improvements and rental growth as the Sydney industrial market tightens.
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