Dexus · ASX:DXS
Dexus — Investor Presentation (September 2026)
26 slides from Dexus's investor presentation, September 2026
Slide 1: Scarcity creates opportunity
Scarcity creates opportunity Dexus Australian Office House View FY2027 Dexus Research September 2026 Waterfront Brisbane, Qld
Slide 2: Contents
Contents Introduction 3 Key takeaways 4 Chapter 1 5 A clearer recovery Chapter 2 8 The scarcity advantage Chapter 3 12 Asset divergence is accelerating Chapter 4 “Recovery is emerging across parts of 15 Demand is rebuilding the market, but outcomes remain highly selective. The strongest Chapter 5 19
Slide 3: The office debate has shifted
Introduction The key question for office is no longer whether hybrid work has permanently changed the office. The office debate It is whether the market can deliver enough relevant space as demand stabilises and begins to recover. has shifted For five years, investors had to underwrite an unusually
Slide 4: Key takeaways
Key takeaways 01 02 03 04 05 Demand is The supply runway is Scarcity is Smaller occupiers Selection and active improving, but unusually long becoming asset and are rebuilding management will remains selective The forward level-specific demand drive outcomes Three of four major CBDs development pipel
Slide 5: A clearer recovery
Recovery A clearer recovery Demand is improving but the market remains highly selective. Sydney and Brisbane are leading the CBD recovery, while Melbourne remains the Demand is improving, but the market remains clearest demand laggard. highly selective. Demand improved across most CBDs through FY26.
Slide 6: Key insights: office absorption
Recovery Office absorption, 4 CBDs – rolling annual ‘000sqm 400 300 200 100 0 Key insights -100 Positive net absorption was recorded in three of the four -200 major CBDs in the latest FY27 update. -300 Sydney rightsizing is no -400 longer overwhelming positive leasing activity. -500 Melbourne remain
Slide 7: Vacancy will clear unevenly
Recovery Vacancy will clear unevenly Prime office vacancy – CBD markets High vacancy can be reabsorbed where demand is deep and 30% future supply is limited. Low supply alone is not enough where occupier depth is uncertain. 25% 20% Some prime CBD markets are moving beyond the bottom of the cycle, su
Slide 8: The scarcity advantage
Recovery Scarcity The scarcity advantage There is currently a longer runway before supply returns and improving rents will take time to turn into new towers. The normal supply response is delayed, extending the runway for assets that can meet occupier demand today. In a normal recovery, rising rents
Slide 9: Key insights: supply pipeline feasibility
Scarcity CBD office feasibility margin from breakeven by city 20% 15% 10% 5% 0% -5% Key insights -10% -15% The forward office pipeline is -20% 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 around one-third of the Sydney CBD Melbourne CBD Brisbane CBD long-run average. Source: Oxford Economi
Slide 10: The city pipelines are diverging
Scarcity The city pipelines are diverging Sydney supply pipeline 120K Sydney and Melbourne remain highly constrained; Brisbane is the first market where the next supply wave is moving closer. 60K 0K Sydney CBD has few projects that could credibly deliver before the early 2030s beyond those already c
Slide 11: Brisbane CBD is the exception; reposition, repurpose or restock
Scarcity Brisbane CBD is the exception Reposition, repurpose or restock Following strong rental growth, four major projects are expected between FY31 and Scarcity is creating three distinct capital pathways. FY32, around two years earlier than previously assumed. The near-term scarcity case Across t
Slide 12: Asset divergence is accelerating
Recovery Divergence Asset divergence Premium assets lead the recovery, but suitable A- grade space is beginning to capture more is accelerating demand as the best premium options have filled. Across the major CBDs, 2023 and 2024 net absorption The flight to quality is broadening with A-grade joining
Slide 13: Key insights: higher-grade buildings gain share
Divergence Higher-grade buildings continue to gain share ‘000 square metres (rolling annual) 400 Migration of tenants into better quality space 200 Key insights 0 Premium scarcity is redirecting demand to A- grade, broadening where investors can capture rental -200 growth. Sydney premium core net -4
Slide 14: Rent growth is becoming increasingly location-specific
Divergence Sydney CBD office net effective rent index Rent growth is becoming increasingly 2019-2026, Sydney CBD, all grades and markets location-specific 130 Sydney's premium core rents are now 120 Sydney CBD around 20% above pre-pandemic levels, Core Premium 110 supported by limited new supply, st
Slide 15: Demand is rebuilding
Recovery Demand Demand is rebuilding The recovery is not being driven by a wave of large corporate expansion. It is emerging from a broad base of smaller occupier decisions. Smaller leases, centralisation and the knowledge economy are shaping the next phase. Sydney shows the change. In FY26, contrac
Slide 16: Key insights: where demand is coming from
Demand Where demand is coming from Tenant moves 2020-2024 Tenant moves FY26 Sydney CBD Sydney CBD 46K -10K -51K 93K -123K 34K 96K 173K 20K 0K -4K -4K -175K -5K -6K 23K -214K Key insights 38K 9K Smaller requirements, -253K centralisation and new entrants are replacing rightsizing as the main sources
Slide 17: Employment growth supports, but does not determine, office demand
Demand Employment growth supports, but does not White-collar employment continues to outpace determine, office demand Index 2011 = 100 160 The structural support comes from growth in 150 knowledge-intensive employment, but recent space- 140 use data cautions against equating more white-collar 130 jo
Slide 18: AI will redistribute office demand
Demand AI will redistribute Employment growth by AI automation exposure Nov-22 to Feb-26 office demand 10% The evidence does not yet support broad For office markets, the more immediate AI-driven displacement of office jobs. impact is likely to be greater workforce and 9.2% Instead, AI is reshaping
Slide 19: The opportunity set
Recovery Opportunity The opportunity set Office is moving beyond broad market calls. Improving demand and limited supply are creating more favourable conditions, but performance will The recovery favours different strategies vary materially across markets, locations and assets. across markets and as
Slide 20: Low supply to support rent growth
Opportunity Low supply to support rent growth Historically, after periods of low supply high rent growth follows Effective rent growth during different supply periods The forward supply pipeline is small in most CBD markets. Completions over Annualised effective rent growth (CAGR) the next five year
Slide 21: Non-core markets: value only with a credible pathway
Opportunity Non-core markets Core and non-core continue diverging Value only with a credible pathway Prime office vacancy – CBD markets High vacancy can create entry opportunity, but it can also signal that 30% low supply is irrelevant to occupiers. 25% 20% North Sydney, Parramatta and other 15% non
Slide 22: Growth outlook: quality and scarcity drive returns
Opportunity Growth outlook Office summary and growth outlook Quality and scarcity drive returns NER 5-year CAGR outlook Rental growth over the next five years is Market Growth outlook Key thematics concentrated in markets where supply is constrained and tenants are competing Weaker Middle Stronger f
Slide 23: Investor implications and signals to watch
Implications Investor implications and Prioritise scarcity with proven demand Prioritise markets where occupier depth overlaps with long signals to watch delivery lead times and limited competition. Low supply without leasing depth may limit downside but does not create growth. Scarcity creates the
Slide 24: Our view
Implications Our view Scarcity is creating opportunity. With new supply constrained across What would change our view most CBD office markets, conditions are in place for stronger rental growth and improved asset performance. Upside indicators Low supply is expected to be a key driver of office mark
Slide 25: Dexus Research
Dexus Research Jonathan Hedger Kimberley Slow James Melville Mia Kasalo Ellen Ives Chief Investment Officer Head of Investment Management & Research Senior Manager, Research Research Analyst Research Analyst Jonathan.Hedger@dexus.com Kimberley.Slow@dexus.com James.Melville@dexus.com Mia.Kasalo@dexus
Slide 26: Disclaimer and important notes
Disclaimer and important notes This document is issued by Dexus Funds Management Limited (ACN 060 920 783, AFSL No. 238163) (“DXFM”). DXFM is a wholly owned subsidiary of Dexus (ASX: DXS). This document has been prepared for informational purposes only and is not an offer, solicitation, or invitatio