DEXUS Wholesale Property Fund’s A/Stable rating will remain unaffected by the fund’s $231 million industrial portfolio acquisition.
Standard & Poor’s Ratings Services said the fund’s acquisition of 13 industrial assets from Colonial Direct Property Investment Fund which will be completely funded by debt, will increase DWPF’s gearing to outside its preferred gearing range of 10%–20% in the short term.
However, S&P expects DWPF will reduce leverage and operate within its target gearing range in the medium-to-long term.
“In our view, the transaction will provide the fund with meaningful sector diversity and more closely align DWPF’s portfolio with its target sector allocation.
“The transaction will increase DWPF’s industrial asset exposure to 11%, which is within the fund’s medium-to-long term industrial sector target allocation of 10%-20%.
“Following the transaction, DWPF’s other sector exposures will be: retail assets (57%) and office assets (32%); we note these exposures are also within the fund’s target sector allocation of 40%–60% and 30%–40%, respectively,” S&P said.
Australian Property Journal
