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Real estate investment group Dexus (ASX: DXS) has entered a joint venture with building materials giant Boral to transform 630 hectares of land at Ravenhall in Melbourne's west into what Dexus describes as the largest institutionally held logistics precinct in Australasia, with a potential lettable area of 2.5 million square metres.
The joint venture, announced today, will see Dexus and future third-party capital partners hold a combined 50 per cent interest in the development, with Boral retaining the other half.
Dexus expects to retain a minimum 10 per cent look-through principal interest in each "superlot" as the precinct is progressively developed.
The Ravenhall site owned by Boral sits 20km from Melbourne's CBD and the venture is subject to rezoning approval and business plan sign-off.
"This partnership reflects the strength of our platform and relationship with Boral to deliver one of the most significant logistics precincts in Australia," says Dexus Group CEO Ross Du Vernet.
"Opportunities of this scale are rare, with the potential to secure a generation of industrial growth in one of Australia's most important logistics corridors."
Du Vernet says the joint-venture structure aligns with the group's strategy to build a diversified and capital-efficient platform.
"The phased development approach will enable us to progressively bring third-party capital into each stage to deliver returns for our securityholders while creating significant investment opportunities for our fund clients," he says.
"This is the kind of opportunity our integrated platform is built to originate and execute."
The deal bolsters Dexus's industrial pipeline at a time when Melbourne's western corridor faces sustained demand for logistics space.
The Victorian Government's 10-year industrial land plan projects Melbourne industrial land take-up at 330 hectares per year over the next decade, with 5,805 hectares of unzoned greenfield land identified as future supply.
That plan lists Ravenhall quarry land as a future greenfield precinct programmed to commence from 2034-35 with capacity for 1,500 jobs.
Dexus manages a total portfolio valued at $51.5 billion as at 31 December 2025, comprising a $15.3 billion listed portfolio and $36.2 billion in funds management.
Operationally, Dexus's existing industrial portfolio is running at 96.9 per cent occupancy, with releasing spreads of 16.1 per cent recorded in the March quarter. Office occupancy has also firmed, rising to 93.1 per cent from 92.2 per cent.
Despite the strategic expansion, Du Vernet struck a cautious tone on the broader economic outlook in an update to the market today.
"FY27 will be a more challenging year with an immaterial contribution from performance fees and trading profits, which are meaningful in FY26," he says.
"Transitioning our business to be more diversified and capital efficient is a multi-year process, and the benefits of this approach are not yet reflected in our performance.
"We are taking direct action to address near-term challenges and position for the future by optimising asset performance, strengthening funds management and improving efficiency."
Dexus has reiterated its FY26 adjusted funds from operations guidance of 44.5 to 45.5 cents per security, with distributions of 37 cents per security.
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