Ann: Asset divestments enhancing balance sheet flexibility, page-5

DXI only holds Industrial properties. There may be a few rats and mice lying around but not material. They sold the disastrous Rhodes property that was more like a complex of office spaces. Loss was large and I hope they stick to their knitting ie pure industrial. I reckon they were desperate to expand asset base and management fees to Dexus. Pure hubris and sucking up to DXS management IMHO. DXI needs to get gearing down from circa 30% to 20% so property losses from rising cap rates are not exaggerated by high gearing. It's great in a falling interest rate environment but when the worm turned it can get ugly. Just look at URW. The Lowys (ex-Westfield shopping) were smart dudes offloading Westfield to now URW and OZ shopping to Vicinity. URW borrowed a bucketload to fund purchases but failed to see the writing on the wall in online retailing. URW's SP was circa $12. Now around $4. Hubris again.

We SHs in DXI need to keep reminding management that the "I" in DXI is short for Industrial and stay within their lane. DXS needs to be kept in check. Whilst they want increased management fees they can't do this by taking on more risk and gearing. If DXI sees a great investment then just do a rights issue. Simple and conservative. Getting caught with 30% gearing in a rising interest rate environment should have resulted in heads rolling.