DEXUS Wholesale Property Fund

The stable outlook reflects our expectation that DWPF will continue to grow and manage its high-quality asset base. We anticipate that DWPF will maintain a conservative approach to development exposure and capital management to support the 'A' credit profile over the next two years. This includes maintaining funds from operations (FFO) to debt at more than 15%, which is consistent with the fund's target gearing range of 10%-20% (debt to gross assets). Downward pressure could occur if the fund's growth strategy were to become more aggressive, such as materially expanding its development activity or investing in higher-risk asset classes or geographies. The rating could also come under pressure if debt levels exceed the upper-end of the fund's target gearing level

...Dexus Wholesale Property Fund's (DWPF) high-quality portfolio of diversified office, retail, and industrial property assets supports the fund's relatively stable cash flows.The geographic composition of the A$10.5 billion asset portfolio is concentrated to the Australian eastern seaboard. In our view, the portfolio's solid lease maturity profile and high occupancy of a very well-diversified tenancy base will continue to support its high quality. DWPF's portfolio diversification, with exposure across multiple property sectors, helps to alleviate the impact of a softening retail segment. Strong demand for office and industrial space has supported the tightening of capitalization rates and bolstered asset values. The increased exposure to positive rent reversions (higher rents on lease renewals) in the Sydney and Melbourne office markets, along with a growing logistics exposure, positions the fund well for continued growth. In our view, DWPF is well positioned to prudently fund its development...

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