scroll

Updated view on Dexus

Advanced Search

Our Q&As are emailed in our Saturday Morning Report, find the answer to this question below.

Ask a question

The Latest Q&A

Question asked 28/10/2023

Updated view on Dexus

I have a question about MM’s position in Dexus. Are you still confident that the stock is still a discount to NTA? It’s tough out there in commercial property land and just looking at some of the private sector transactions and whats seems to be happening in the sector in the real world - do you think Dexus' NTA, in real terms, is actually much lower than being reported, and so the discounted share price isn’t really a discount anymore. What needs to happen for MM to cut the position or buy more?

Answer

Hi Josh,

An excellent question and clearly topical with it being the second one this week on Dexus (DXS). I have addressed your question in bullet points for clarity:

Commercial property is not a liquid asset class making marked-market valuations estimates at best, as you say private sector transactions are suggesting some companies are being optimistic around their valuations which does throw into question Dexus’ NTA, in real terms. While NTA is likely to be stale, the sector is trading on discounts between 20-50%, a level which seems stretched based on recent transactions.
However we hold DXS in our Active Income Portfolio hence while stock maintains a healthy yield we are inclined to be patient at this stage.
We are unlikely to lift our 4% position until we see a clear downturn in bond yields, upswing in property values but if we change our bearish out look on bond yields we will be considering reducing our real estate exposure, including DXS

chart

ASX200 Property Index v Dexus (DXS)

LAST UPDATED 26/10/2023 17:11

Latest Reports

Afternoon report 17/04/2025

The Match Out: ASX strong as energy bounces back, commodity stocks impress on quarterlies

A bullish session after a decent hit to U.S markets overnight, particularly the tech sector which was -3.9% weaker amid further U.S tariff and policy intervention. It was a slow and steady move up over the day, opening flat but climbing ~5-10 points hour after hour.

Morning report 17/04/2025

What Matters Today: Did MM turn neutral towards Gold too early?

The ASX 200 performed well on Wednesday, considering US NASDAQ Futures were down over 2% by 4pm AEST, courtesy of poor news from both sides of the Atlantic before the respective bourses even opened. Global Tech stocks sank on a one-two of bad news for tech goliaths Nvidia and ASML, the last thing the embattled semiconductor sector needed.