Dexus Raises $870M for DREP2, Boosts Westfield Chermside Holding to 50%

Dexus Launches Strategic Investment Trust Series

Dexus has taken a significant step in expanding its funds management platform with the launch of the Dexus Strategic Investment Trust (DSIT) series. The inaugural fund, DSIT1, is seeded by acquiring a 25% interest in Westfield Chermside, Brisbane, for $683 million. This move increases Dexus's overall stake in the iconic shopping centre to 50%, following a previous 25% acquisition earlier in 2025.

Westfield Chermside stands as Australia's second-largest regional shopping centre by sales and gross lettable area, serving one of the fastest-growing metropolitan catchments. The acquisition reflects a market capitalisation rate of 5.0%, underscoring the asset's strong long-term growth prospects.

Fund Structure and Investment Details

Dexus will initially co-invest approximately $170 million into DSIT1, holding a 49% interest, with the remainder contributed by third-party investors. The company anticipates introducing additional third-party equity in the 2026 financial year, aiming to maintain a long-term holding of around $50 million. The transaction is expected to be broadly neutral to Dexus’s adjusted funds from operations (AFFO) and will increase look-through gearing by about 1.3%.

Ross Du Vernet, Dexus Group CEO, highlighted the strategic value of the new fund series, emphasizing its alignment with investors’ long-term objectives and the ability to leverage partnerships to access high-quality Australian assets.

DREP2 Fund Surpasses Equity Targets

In parallel, Dexus announced a substantial increase in equity commitments for its Dexus Real Estate Partnership 2 (DREP2) fund. Since the fiscal year 2025 results, an additional $390 million has been raised, bringing total commitments to approximately $870 million; well above the initial $600 million target. This includes a $200 million co-investment commitment from a new fund investor, enhancing Dexus’s capacity for future acquisitions alongside DREP2.

Jason Howes, Executive General Manager of Fund Capital & Product Development, noted that the strong investor confidence reflects Dexus’s deep market expertise and the fund’s position as one of Australia’s largest and most diversified opportunity funds.

Update on APAC Legal Proceedings

On the legal front, Dexus provided an update regarding the APAC matter. Due to scheduling challenges among involved parties, the New South Wales Supreme Court has rescheduled mediation to no later than March 2026, with the hearing date remaining set for April 2026. Dexus continues to pursue a resolution that serves the best interests of its clients.

As Dexus continues to expand its funds platform and manage complex legal matters, investors will be watching closely how these developments influence its strategic positioning and financial performance in the coming months.