Slide 1: 2024 Annual results presentation and property synopsis
Dexus (ASX: DXS) ASX release 20 August 2024 2024 Annual results presentation and property synopsis Dexus provides its 2024 Annual results presentation. An investor conference call will be webcast at 9.30am today on www.dexus.com/investor-centre The 2024 property synopsis excel workbook is also avail
Slide 2: 2024 Annual results
2024 Annual results 20 August 2024 Dexus Funds Management Limited | ABN 24 060 920 783 AFSL 238163 as responsible entity for Dexus
Slide 3: Acknowledgement of Country
Acknowledgement of Country Dexus acknowledges the Traditional Custodians of the lands on which our business and assets operate, and recognises their ongoing contribution to land, waters and community. We pay our respects to First Nations Elders past and present. Artist: Amy Allerton, Indigico Creati
Slide 4: Agenda
Agenda 01 Overview Ross Du Vernet, Group CEO & Managing Director 02 Financial results Keir Barnes, CFO 03 Investments Office portfolio Andy Collins, EGM Office Industrial portfolio Chris Mackenzie, EGM Industrial 04 Funds management Ross Du Vernet, Group CEO & Managing Director 05 Priorities & summa
Slide 5: Dexus today
Dexus today Established investment management model with sector-specific business units Total platform funds under management: $54.5bn Dexus portfolio: $14.8bn Third party FUM: $39.7bn Investment performance underpinned by sector-specific business units with focused strategies Office Industrial Reta
Slide 6: Our strategy
Our OUR VISION To be globally recognised as Australasia’s leading real asset manager strategy HOW WE WILL By delivering superior risk-adjusted returns for Dexus Security holders and our capital partners by ACHIEVE THIS owning, managing and developing quality real estate and infrastructure assets WHY
Slide 7: FY24 performance
FY24 performance Solid year of achievements and progress on CEO priorities in a challenging environment Dexus Funds Platform $516.3m AFFO DWPF (Dexus Wholesale Property Fund) outperformed Delivered CEO priorities its benchmark across all time periods $(1,583.8)m Statutory net loss after tax Refined
Slide 8: Sustainability leadership
Sustainability leadership Progressing strategic priorities: Case study: Waterfront Brisbane Customer Climate Enhancing The Waterfront Brisbane development is underpinned by prosperity action communities circular economy principles with the goal of Improved indoor maximising diversion of demolition a
Slide 9: Financial results
02 Financial results 8 | Dexus 2024 Annual Results Presentation
Slide 10: Key earnings drivers
Key earnings drivers Diversified and resilient earnings underpinned by high quality portfolio and funds business FY24 AFFO was lower driven predominantly by lower trading profits FY24 AFFO excluding trading profits was marginally above FY23, demonstrating resilience FY24 FFO1 composition Management
Slide 11: FY24 financial results
FY24 financial results Underlying FFO resilient, with lower AFFO driven by lower trading profits FY24 $m FY23 $m Change Office property FFO decreased primarily due to the impact of divestments, partly offset by fixed rent increases and development completion at 123 Albert Street Investments Industri
Slide 12: Property portfolio valuations
Property portfolio valuations Office portfolio valuation has reduced by c.25%1 since peak 12-month Total portfolio Total portfolio valuation attribution Stabilised CBD office yield spread over nominal AUS 10-year bond yield vs 20-year movement2 val movement3 cap rate historical average and range4 7%
Slide 13: Strong financial position
Strong financial position Managing gearing and hedging to maintain balance sheet strength Pro forma look-through Executed $1bn of debt High hedging providing $1.8bn committed developments estimated cost to completion gearing at the lower end extensions and maintained material protection of the 30-40
Slide 14: Continued focus on capital recycling
Continued focus on capital recycling Enhancing portfolio quality and balance sheet strength Demonstrated ability to recycle assets despite challenging transactions market1 Portfolio composition enhanced $bn 3 Dexus acquisitions Office portfolio composition c.$0.7 billion 2 Dexus divestments FY19 FY2
Slide 15: Investments
Co-investments & other Office 14% 65% Industrial 21% 04 Investments 14 | Dexus 2024 Annual Results Presentation
Slide 16: Office portfolio
Office portfolio 15 | Dexus 2024 Annual Results Presentation
Slide 17: Office portfolio performance
Office portfolio performance High quality portfolio with 94.8% occupancy $20.3 billion $9.8 billion Occupancy of 94.8% remains well above Average incentives were 27.9%5 Platform Dexus office portfolio market average of 86.4%4 outperforming the market and lower office portfolio than FY23 due to leasi
Slide 18: Office property portfolio expiry profile
Office property portfolio expiry profile Staggered expiry profile and diversified tenant base support resilient income streams Dexus office portfolio lease expiry profile (by income)1 Sydney Melbourne Brisbane Perth 15% 13% target threshold 12.7% 11.7% 9.5% 9.0% 9.6% 10% 5.2% 5% 0% Available FY25 FY
Slide 19: Office portfolio: market leading and resilient operating metrics
Office portfolio: market leading and resilient operating metrics Underpinned by superior location, asset quality and customer diversification Key attributes of the Dexus office portfolio… …underpin the resilient operating performance › Circa 74% is located in core CBDs, where occupancy and Location
Slide 20: Sydney CBD occupancy
Sydney CBD occupancy 30 The Bond Premium occupancy higher in the core 36 The Bond Australia Square One Farrer Walsh Bay The market occupancy rate of Premium space in the core of the Sydney CBD remains high Premium occupancy 92% Core Premium stock 270,054sqm Premium occupancy 92% Dexus Premium buildi
Slide 21: Industrial portfolio
Industrial portfolio 20 | Dexus 2024 Annual Results Presentation
Slide 22: Industrial portfolio performance
Industrial portfolio performance Solid operating metrics despite isolated vacancies, under-renting to support future rent growth $10.6 billion $3.6 billion Effective LFL growth was +3.9%, impacted by Portfolio 15.4% under-rented, Platform Dexus industrial portfolio lower portfolio occupancy at 96.8%
Slide 23: Industrial portfolio: a national and customer centric platform
Industrial portfolio: a national and customer centric platform Well-located, high-quality assets and ability to grow with our customers High-quality portfolio income › Long-term and multi-lease relationships with high value, Focus on growing customers Dexus industrial portfolio FY24 income by custom
Slide 24: Funds management
03 Funds management 23 | Dexus 2024 Annual Results Presentation
Slide 25: Dexus funds platform
Dexus funds platform A real asset platform of scale and diversity that is well placed when the market stabilises $39.7 billion FUM FUM by sector exposure FUM by investor type Platform support FUM diversified by sector and investor type Office 26% Super & pension funds 130+ unlisted institutional
Slide 26: Funds management: FY24 key achievements
Funds management FY24 key achievements Delivering for investors Harnessing investor appetite Independent recognition ESG recognition - Of the funds with benchmarks, 84% by - Leveraged platform to harness Institutional investors: Peter Lee survey Multiple funds and investments FUM outperformed benchm
Slide 27: Meaningful alignment capital to support funds growth
Meaningful alignment capital to support funds growth Co-investments in pooled funds increasingly diversified and now contribute to 8% of FFO1 $1.5 bn of co-investments in pooled funds contribute to >70% of the balance sheet is invested alongside capital partners, 8% of FFO and are increasingly diver
Slide 28: Priorities and summary
05 Priorities and summary 27 | Dexus 2024 Annual Results Presentation
Slide 29: Capital allocation
Capital allocation Core principles guiding our decisions over the long term Guiding principles for capital allocation Alignment with group strategy & vision › Investment preferences and target divestments established based on Capital structure Portfolio settings Asset allocation CAPITAL capital and
Slide 30: Capital allocation: settings and proposed actions
Capital allocation Settings and proposed actions based on our current assessment Settings CAPITAL DISCIPLINE & 30-40% target gearing range 7-9% investment portfolio total returns INVESTMENT MANAGEMENT <50% exposure to any single sector over time <15% exposure to developments Net capital generation E
Slide 31: Strategic priority areas
Strategic priority areas Refreshed strategy with clear action items identified to support our medium-term priorities Transitioning Maximising Unlocking deep balance sheet funds contribution sector expertise Improve capital efficiency by investing Support fund clients by providing liquidity Emb
Slide 32: Summary and outlook
Summary and outlook Leading real asset manager with resilient platform As the interest rate outlook becomes more certain, we expect direct investors will gain greater confidence to deploy capital. Markets remain challenging however we expect well-located quality assets to continue to outperform Cons
Slide 33: Appendices
06 Appendices 32 | Dexus 2024 Annual Results Presentation
Slide 34: Dexus today
Dexus today $54.5 billion – total platform funds under management Dexus portfolio Funds management portfolio 26% 1% 1% 1% 2% 2% 3% 4% 3% 66% $14.8bn 18% $39.7bn 27% 24% 22% Office Infrastructure Office Industrial Healthcare Retail Retail Industrial Infrastructure Alternatives Healthcare Real estate
Slide 35: Reconciliation to statutory (loss)/profit
Financial results Reconciliation to statutory (loss)/profit 30 Jun 2024 30 Jun 2023 $m $m Statutory AIFRS net (loss)/profit after tax (1,583.8) (752.7) Investment property and inventory (Gain)/loss from sales of investment property - 0.6 Fair value (gain)/loss on investment properties 1,633.6 1,144.
Slide 36: Management operations profit
Financial results Management operations profit FY24 Funds Property Development Management ($m) management management management operations Revenue 242.5 89.0 26.1 357.6 Operating expenses (109.0) (70.9) (35.1) (215.0) FY24 net profit 133.5 18.1 (9.0) 142.6 FY24 margin 55% 20% (35)% 40% FY23 margin 6
Slide 37: Cash flow reconciliation
Financial results Cash flow reconciliation 30 Jun 2024 30 Jun 2023 $m $m Cash flow from operating activities 613.5 770.9 add back: payment for inventory acquisition and capex 104.8 10.9 less: cost of sale of inventory (118.6) (61.0) less: tax on trading profits not yet paid (4.4) (21.5) add back: ca
Slide 38: Interest reconciliation
Financial results Interest reconciliation 30 Jun 2024 30 Jun 2023 $m $m Total statutory finance costs 169.3 174.1 Less: Debt modification and movements related to exchangeable notes (2.1) (23.1) Add: Finance costs attributable to investments accounted for using the equity method1 0.7 8.0 Less: AASB
Slide 39: Change in net tangible assets and revaluations
Financial results Change in net tangible assets and revaluations Valuation Weighted %of portfolio $m $ps Investment portfolio change average FUM $m cap rate Opening net tangible assets (30 June 2023) 11,706.1 10.88 Dexus office portfolio5 (1,790.3) 6.05% 66% Revaluation of real estate (1,634.5) (1.5
Slide 40: Property portfolio book value movements
Financial results Property portfolio book value movements Office1 Industrial1 Other1 Dexus total1 Trading assets2 (inventory) $m $m $m $m $m Opening property portfolio 11,945.0 3,686.4 22.5 15,653.9 56.3 3 Lease incentives 115.1 11.3 - 126.4 - Maintenance capex 64.1 4.8 - 68.9 - Acquisitions/transfe
Slide 41: Co-investments in pooled funds
Financial results Co-investments in pooled funds Dexus Dexus FY24 Ownership stake Passing distribution WALE WACR co-investment value co-investment income Occupancy (%) (%) yield (%)2 (years) (%) ($m)1 ($m) Real estate DHPF 16.1% $219.8 $8.9 3.9% 99.7% 17.6 5.0% AUHPT3 7.0% $166.4 $8.2 3.5%4 94.9% 15
Slide 42: Capital management
Capital management FY24 position $m Debt maturity profile Key metrics 30 Jun 2024 30 Jun 2023 2,000 Total debt1 $4,910m $5,310m 1,800 Headroom2 $2.5bn $2.5bn 1,600 Pro forma gearing (look-through)3 32.0%4 27.9%5 1,400 Covenant gearing (covenant6 <55%) 31.6% 29.4% 1,200 1,000 Interest cover (covenant
Slide 43: Interest rate hedging profile
Capital management Interest rate hedging profile $m Hedge profile Hedging profile 30 Jun 2024 30 Jun 2023 5,000 4.0% 4,500 Average amount of debt hedged including caps 92% 86% 3.5% 4,000 Average amount of debt hedged excluding caps 75% 69% 3,500 3.0% 3,000 Weighted average interest rate on hedged de
Slide 44: Debt facilities
Capital management Debt facilities1 Facility limit Drawn Maturity Currency Facility limit Drawn A$m A$m A$m A$m Bilateral bank debt 450 400 FY26 A$ Sub total 7,326 4,689 600 500 FY27 A$ Currency translation and fair value adjustments 278 278 1,250 8 FY28 A$ 875 198 FY29 A$ Deferred borrowing costs a
Slide 45: Funds management – real estate product offering
Funds management – real estate product offering Institutional pooled funds Retail / HNW pooled funds Listed securities Listed funds JVs and mandates DWPF DWSF DHPF DREP1 & 2 DWAPF DCPF RES ASX:DXI ASX:DXC Office Dexus Wholesale Property Fund Dexus Wholesale Shopping Centre Fund Dexus Healthcare Prop
Slide 46: Funds management – infrastructure product offering
Funds management – infrastructure product offering Institutional pooled funds Retail / HNW pooled funds JVs and mandates DDIT CommIF DWAF DCIF APAFs 5 other Dexus Diversified Dexus Community Dexus Wholesale Dexus Core Series of Melbourne Separately Managed Infrastructure Trust Infrastructure Fund Ai
Slide 47: Funds management development pipeline
Funds management Development pipeline $8.2 billion Funds management development pipeline1 $2.7 billion $5.2 billion Committed projects Uncommitted projects FY25-FY28+ uncommitted project costs in funds management business 1. Includes $0.3 billion concept projects. 46 | Dexus 2024 Annual Results Pres
Slide 48: Office and Industrial key metrics
Property portfolio Office and Industrial key metrics Key metrics Office Industrial Amount of space leased1 160,400sqm2 170,500sqm3 No. of leasing transactions 2712 403 Occupancy by income 94.8% 96.8% Occupancy by area 94.7% 97.3% Average incentives 27.9%4 16.5%4 No. of effective deals 75 6 Weighted
Slide 49: Office portfolio diversification
Property portfolio Office portfolio diversification Office by asset type Office by location Sydney CBD/fringe Prime grade 45% 96%1 55% 13% 14% $9.8bn $9.8bn 51% 4% 22% 41% Sydney suburban 6% Premium A grade B grade and other VIC QLD WA NSW 1. Prime grade buildings represent 96% of the office portfol
Slide 50: Melbourne CBD occupancy
Melbourne CBD occupancy Premium occupancy higher Civic in the Eastern core Docklands Occupancy 79% North Eastern Premium stock 31,411sqm Occupancy 81% Occupancy 94% Premium stock 450,689sqm DXS prime occupancy 98.2% Premium stock 58,500sqm The market occupancy rate of Premium space in the core of th
Slide 51: Office portfolio lease expiry profiles by region
Property portfolio Office portfolio lease expiry profiles by region1 By income By area Melbourne CBD By income By area Sydney CBD 20% 20% 14.9% 14.7% 15% 13.5% 15% 12.9% 11.9% 12.2% 11.5% 10.9%10.4% 9.1% 10.2% 8.6% 10.4% 9.8% 10.3% 9.5% 10.4% 10% 8.6% 7.8% 8.4% 10% 7.1% 5.1% 5.5% 5% 5% 2.6% 0% 0% Av
Slide 52: Top customers represent 17.4% of total portfolio income
Property portfolio Top 10 customers represent 17.4% of total portfolio income Office top 10 customers Diversity of office customers (by income) 0% 5% 10% 15% 20% % of total Credit property Financial and insurance services 18.4% Office customers1 rating2 portfolio Income3 Legal services 15.1% Profess
Slide 53: Industrial portfolio diversification
Property portfolio Industrial portfolio diversification Industrial by asset type Industrial by location 14% 1% 77% 9% 4% $3.6bn $3.6bn 47% 13% 29% 6% Industrial estate Business park Distribution centre Land and other NSW VIC QLD SA WA 52 | Dexus 2024 Annual Results Presentation
Slide 54: Industrial portfolio lease expiry profile by income
Property portfolio Industrial portfolio lease expiry profile by income 20% 15% 14.1% 14.0% 13.3% 9.9% 10% 9.3% 5% 3.2% 0% Available FY25 FY26 FY27 FY28 FY29 Key vacancies FY25 Key expiries FY26 Key expiries FY27 Key expiries FY28 Key expiries FY29 Key expiries Kings Park Ind Estate (1.7%) Distributi
Slide 55: Industrial portfolio lease expiry profiles by region
Property portfolio Industrial portfolio lease expiry profiles by region1 Sydney Brisbane Income Area Income Area 30% 30% 22.3% 22.7% 21.7% 19.5% 20% 17.0% 20% 15.0% 11.1% 11.1% 11.1% 10.2% 12.0% 11.6% 10.9% 8.8% 8.3% 9.2% 9.3% 9.3% 10% 5.7% 6.4% 10% 4.2% 4.7% 4.0% 2.9% - - Available FY25 FY26 FY27 F
Slide 56: Top customers represent 4.1% of total portfolio income
Property portfolio Top 10 customers represent 4.1% of total portfolio income Industrial top 10 customers Diversity of industrial customers3 (by income) - 10% 20% 30% 40% % of total property Transport, Postal and Warehousing 34.6% Industrial customers1,3 portfolio income2 Retail trade 18.4% Manufactu
Slide 57: Environmental metrics
Environmental metrics Office portfolio sustainability metrics Dexus platform managed net emissions Office NABERS energy ratings1 Office NABERS water ratings1 Operational Emission sources FY08 BAU Net emissions 120 5.5 stars 5 stars (Location-based) 4.5 stars Emissions intensity (kg CO2-e/sqm) 100 21
Slide 58: Dexus completed developments
Development Dexus completed developments Building area1 Project costs2 Yield on cost Leased Completion Third party partner Pipeline sqm $m % % date interest % Office 123 Albert Street, Brisbane QLD 39,200 597 c.5.1% 100% Jun 2024 0% Total office 39,200 597 Industrial Palm Springs Road, Ravenhall VIC
Slide 59: Dexus committed developments and fund-throughs
Development Dexus committed developments and fund-throughs Est cost to Pipeline Building area1 Project costs2 completion2 Yield on cost3 Leased Completion Third party partner sqm $m $m % % due interest % Office Stage 1, Waterfront Brisbane QLD 76,500 825 679 5-6% 52% Early 2028 50% Atlassian Central
Slide 60: Dexus uncommitted developments
Development Dexus uncommitted developments Building area1,2 Project costs3 Yield on cost4 Third party partner Pipeline5 sqm $m % interest % Office Stage 2, Waterfront Brisbane QLD 57,500 c.450 c.5-6% 50% 60 Collins Street, Melbourne VIC 43,200 c.1,100 c.5-6% 0% Central Place Sydney NSW 137,800 c.815
Slide 61: Trading profit opportunities
Trading profit opportunities Commenced restocking the pipeline Trading projects Trading strategy FY25 FY26 FY27+ Key Unsecured 28 Yarrunga Street, Prestons NSW Industrial development 14 Walker Street, Werrington NSW1 Industrial land subdivision 149 Orchard Rd, Chester Hill NSW2 Industrial developmen
Slide 62: Real asset transactions
Real asset transactions Dexus transactions Acquisition price2 Interest Sale price2 Interest Dexus acquisitions1 Settlement Dexus divestments1 Settlement $m % $m % 220 Riding Boundary Road, Ravenhall VIC3 33.2 50.1% May-25 84 Lahrs Road, Ormeau QLD 33.0 100.0% 07-Jul-23 All other acquisitions 9.3 Nov
Slide 63: Office demand indicators
Office demand indicators White collar industries showing resilience amid moderating business conditions Professional services firms hiring intentions Business conditions remain positive ‘000 Vacancies Job Ads Professional job vacancies ‘000 jobs NAB Business confidence NAB Business Conditions SA Ind
Slide 64: High-quality properties expected to continue to outperform
High-quality properties expected to continue to outperform Premium assets expected to continue outperforming lower grades in the current climate Capitalisation rates for premium office properties have been more stable than secondary over time › The spread between premium and secondary properties con
Slide 65: Office market outlook – flight to quality and core
Office market outlook – flight to quality and core We are observing a flight to both high-quality property and core locations › Flight-to-quality is a major theme for office markets as occupiers seek high quality centrally located offices with amenities that appeal to staff › Net absorption of premi
Slide 66: Office market outlook
Office market outlook Two thirds of vacancy is concentrated within 10% of buildings Vacancy rates in CBD office markets Office vacancy concentration in CBD office markets1 Syd CBD Melb CBD Bris CBD Perth CBD 25% 18% 30% of buildings comprise of 10% of buildings comprise of 44% of buildings have no 1
Slide 67: Industrial market outlook
Industrial market outlook Rent growth normalising, population growth to continue underpinning space requirements Lack of available space has led to a rapid growth in rents Population growth will lead to structurally higher demand Millions sqm Total national takeup Rents $/sqm Last 12 months: Project
Slide 68: Healthcare sector
Healthcare sector Healthcare has outperformed other sectors since inception of the index Growing institutional demand drives healthcare transactions higher Indexed returns by sector1 (December 2004 =100) Hospitals/Medical centres Seniors housing and nursing homes Retail Industrial Office Healthcare
Slide 69: Sydney CBD supply – market outlook
-40 60 140 -60 0 20 -20 40 100 120 80 33 Alfred St. ‘000 square metres 121 Castlereagh St (David Jones) Source: JLL Research, Dexus Research. 333 Kent St FY25 FY25-FY27 68 | Dexus 2024 Annual Results Presentation Parkline Place OSD - 256 Pitt St (Oxford) York & Co Market outlook - 80% of supply is p
Slide 70: Melbourne CBD supply – market outlook
-10 30 60 -30 0 20 50 -20 10 40 70 Orion House - 22 William St (Fidinam) 299 Bourke St / 280 Little Collins (Newmark) '000 square metres FY25-FY27 Source: JLL Research, Dexus Research. Invicta House (Fidinam) FY25 69 | Dexus 2024 Annual Results Presentation 85-91 Spring Steet (Proprium) - 19% of sup
Slide 71: Office markets
Office markets Dexus’s position in CBD office CBD office market Sydney Melbourne Brisbane Perth Total NLA 5,283,203 5,371,581 2,293,893 1,826,753 Prime vacancy average 16.7% 21.1% 8.4% 13.2% Dexus CBD exposure Total NLA 440,518 397,398 259,579 182,820 Number of properties 12 7 5 4 Occupancy (by area
Slide 72: Other information
Other information Exchange and securities used in statutory accounts 30 Jun 2024 31 Dec 2023 30 Jun 2023 Closing rates for Statement of Financial Position USD 0.6624 0.6840 0.6630 Average rates for Statement of Comprehensive Income USD 0.6556 0.6526 0.6734 12 mths to 6 mths to 12 mths to Post consol
Slide 73: Glossary
Glossary Distribution payout policy: Policy for FY24 is to distribute in line with free cash flow for which AFFO is a proxy. FFO is in line with Property Council of Australia definition and comprises net profit/loss after tax attributable to stapled security holders, calculated in accordance with Au
Slide 74: Disclaimer
Disclaimer This presentation is issued by Dexus Funds Management Limited (DXFM) in its capacity as responsible entity of Dexus (ASX code: DXS) comprising Dexus Property Trust ARSN 648 526 470 and Dexus Operations Trust ARSN 110 521 223. It is not an offer of securities for subscription or sale and i
Slide 75: Dexus
dexus