DCT Industrial Trust, Inc. (NYSE:DCT)

DCT Industrial Trust is a real estate investment trust (REIT) which owns, acquires, develops and manages bulk distribution and light industrial properties located in 24 of the highest volume distribution markets in the United States. The company is in a move to expand its presences in Mexico. In addition, the company manages and has interests in industrial properties through its institutional capital management program.

The demand for warehouse is characterized by growth in manufacturing sector. The stability in energy prices will push up the momentum in manufacturing sector. This in turn will enhance the demand for bulk warehouse. This should further shrunk down the vacancy rate for warehouse, which is currently hovering below 10%. Moreover, the industrial markets located near seaports, airports and major intermodal facilities is gaining importance. This goes well with DCT, which as a part of its strategy has its property placed in these areas.

DCT through its continuous acquisition spree has increased its portfolio to 379 owned operating properties from 264 in fiscal 2005. However acquisitions of properties with higher vacancy has negatively impacted their overall occupancy rate by 60 bps to 92.5%. While the company managed to realize a higher rental which grew by 7.4% during the year. Moreover, the retention rate remained strong with 79% of tenants renewed their agreement.

The company expects its funds from operations (FFO) for fiscal 2007 to be around $0.67-$0.72 per diluted share, an increase of at least 11%. The increasing demand for warehouse space should enable DCT to achieve its FFO guidance. Looking at these positive aspects it seems that DCT should outwit the market in the coming fiscal year.