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 underpin the fund's credit quality. The geographic composition of the A$10.4 billion asset portfolio as of September 2020 is heavily concentrated to the Australian eastern seaboard, with approximately 95.1% of assets in New South Wales, Victoria, and Queensland. In our view, the portfolio's solid lease maturity profile and ability to maintain high occupancy of a well-diversified tenancy base support its credit quality. We consider that DWPF's portfolio of high-quality assets provides a competitive advantage relative to peers. We expect DWPF's exposure across multiple property sectors to partly temper the recessionary and structural forces that are a drag on its property sectors. Efforts to contain the COVID-19 outbreak resulted in the Australian economy entering into recession. Australian consumer spending has substantially dropped due to the "stay at home" requirements....

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