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Real estate management group Dexus (ASX: DXS) has seen its profit slip by 27.2 per cent despite its "productive" half year.
During the first half of FY19 Dexus' NPAT was down 27.2 per cent to $726.4 million because of net revaluation gains of investment properties being lower than those recognised in the previous corresponding period.
The company is optimistic for the rest of FY19, especially on the back of its funds from operations which were up 9.8 per cent to $353.3 million.
Dexus CEO Darren Steinberg (pictured) praised the company for a strong six months.
"It has been a productive six-month period where we have added value through enhancing our development pipeline and attracting new investors to our funds management business," says Steinberg.
"This has all been achieved while maintaining low balance sheet gearing."
At the end of the first half Dexus now owns $13.9 billion of office and industrial properties, manages $15 billion of office, retail, industrial and healthcare properties for third party clients, and has $5.2 billion worth of projects in development.
During the half the company saw a valuation uplift of its 111 office and industrial assets which Dexus says is because of further capitalisation rate compression and increasing market rents (in Sydney particularly).
Distribution per security for the six months to December 31, 2018 was 27.2 cents, up 14.8 per cent on the previous corresponding period. The dividend will be paid to Dexus shareholders on February 28, 2019.
In terms of the company's pipeline projects, Dexus secured a prime office development site in the Melbourne CBD, which, along with their development in Parramatta, increased Dexus' development pipeline to $2.8 billion.
Chief investment officer Ross Du Vernet says the developments in Melbourne are a unique opportunity for the company.
"The Melbourne acquisitions provide Dexus with a presence in the rightly held 'Paris end' of Collins Street in the CBD," says Du Vernet.
"They also present a unique opportunity to undertake an office development creating long term value for investors in the next supply cycle, in a prime location where Dexus receives significant enquiry from its existing customer base."
The company also continued with its construction works in Perth, North Sydney, Truganina and Greystanes.
Shares in Dexus are down 1.06 per cent to $11.62 per share at 10.38am AEDT.
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