Slide 1: HY24 results presentation
Dexus (ASX: DXS) ASX release 14 February 2024 HY24 results presentation Dexus provides its 2024 half year results presentation. An investor conference call will be held at 9.30am (AEDT) today, which will be webcast via the Dexus website at www.dexus.com/investor-centre and available for download lat
Slide 2: Half year results
Half year results 14 February 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 Darren Steinberg, CEO 02 Financial results Keir Barnes, CFO 03 Funds management Deborah Coakley, EGM Funds Management 04 Investments Office portfolio Andy Collins, EGM Office Industrial portfolio Stewart Hutcheon, EGM Industrial, Healthcare & Alternatives Transactions and Developm
Slide 5: Our strategy
Our strategy Our vision To be globally recognised as Australasia’s leading real asset manager Our strategy To deliver superior risk-adjusted returns for investors from high-quality real estate and infrastructure assets Strategic objectives Delivered Resilient income streams Investment manager of cho
Slide 6: HY24 highlights
HY24 highlights Resilient income streams Investment manager of choice Achieved final completion of $292.4m AFFO $1.3 billion Dexus $1.3 billion divestments AMP Capital’s Statutory domestic infrastructure equity and fund divestments $597.2m net loss after tax real estate business Settled in HY24, enh
Slide 7: Sustainability leadership and strategy
Sustainability leadership and strategy Global recognition Global leader 2023 GRESB leadership 4.9 Star 4.5 Star 4.9 Star Top 10% S&P Global DHPF - Global non-listed sector leader - S&P Global Sustainability Healthcare, Development Yearbook 2024 Powerco - Infrastructure asset sector leader NABERS Ene
Slide 8: Financial results
02 Financial results 7 | Dexus 2024 half year results
Slide 9: Key earnings drivers and valuations
Key earnings drivers and valuations Diversified earnings composition Key earnings drivers Property portfolio valuations Earnings HY24 December 2023 Valuation Capitalisation rate driver composition1 value2 six-months movement3 six-months movement 83% of FFO Total portfolio $15.8bn 60% Office Property
Slide 10: HY24 financial results
HY24 financial results Delivered Underlying FFO growth, with lower AFFO driven by lower trading profits HY24 $m HY23 $m Change % Investments Office property FFO decreased primarily due to the impact of divestments, partly offset by fixed rent increases Office property FFO 283.9 294.9 3.7% Industrial
Slide 11: Strong financial position
Strong financial position Managing gearing and hedging to maintain balance sheet strength and fund future commitments Diversified sources of debt Look-through gearing below Substantial headroom High hedging provides 30-40% target range, with manageable near- material protection against provides capa
Slide 12: Funds management
03 Funds management 11 | Dexus 2024 half year results
Slide 13: Dexus funds platform
Dexus funds platform A real asset platform of scale, diversity and organic growth opportunities Funds under management ($bn)1 43.8 0.1 0.3 41.3 45 (1.1) (1.6) (0.2) 30 Investors outside Retail and HNW Prudent capital of top 5 account for investors account for structures with 15 72% of FUM 11% of FUM
Slide 14: HY24 key achievements
Funds management HY24 key achievements Achieved Final Completion of Delivering for investors Harnessing pockets of ESG recognition the AMP platform1 acquisition investor interest Real estate and infrastructure equity - Satisfied circa $720 million of - Launched Dexus Real Estate Multiple funds and i
Slide 15: Market capital flows and investor sentiment
Market capital flows and investor sentiment Soft capital raising backdrop with pockets of opportunity Market capital raising for Asia-Pac real estate funds reduced Investor sentiment in CY23 Capital raised - AUM growth2 for the top 150 real estate investment managers turned Number of funds negative
Slide 16: Investments
04 Investments 15 | Dexus 2024 half year results
Slide 17: Office portfolio
Office portfolio 16 | Dexus 2024 half year results
Slide 18: Office portfolio performance
Office portfolio performance High quality portfolio with 94.5% occupancy Occupancy of 94.5% remains well above Weighted average lease term of 5.6 years on $22.4 billion $10.9 billion market average of 86.5%4. Sydney CBD leasing deals across the stabilised portfolio Platform Dexus office portfolio pr
Slide 19: Staggered expiry profile and diversified tenant base
Staggered expiry profile and diversified tenant base Supporting resilient income streams Dexus office portfolio lease expiry profile (by income)1 Diversified tenant base with limited concentration risk Sydney Melbourne Brisbane Perth 15% 13% target threshold Top customer Woodside Energy Limited repr
Slide 20: Industrial portfolio
Industrial portfolio 19 | Dexus 2024 half year results
Slide 21: Industrial portfolio performance
Industrial portfolio performance Retained high occupancy, with under-renting supporting future rent growth Portfolio occupancy remained high at 99.0% Portfolio 14.9% under-rented, benefiting $11.0 billion $3.6 billion from continued market rent growth Platform Dexus industrial portfolio across key m
Slide 22: Industrial take-up moderating, supply also reduced
Industrial take-up moderating, supply also reduced Growth in population will increase space requirements, well in excess of current supply Lower levels of market supply forecast over the 2024 calendar year Dexus leasing observations Under construction (committed) Vacancy remains low, driven by e-com
Slide 23: Transactions & Developments
Transactions & Developments 22 | Dexus 2024 half year results
Slide 24: Continued focus on capital recycling
Continued focus on capital recycling Continued divestments despite lower market transaction volumes CY23 market transaction volumes1 slowed significantly across $2.8 billion all major real-estate sub-sectors Total platform real asset $ billion Office Industrial Retail Healthcare transactions 90 80 C
Slide 25: Developments and Trading
Developments and Trading Developments enhance portfolio quality and provide organic FUM growth City-shaping developments will create next generation assets in prime Trading: locations not available on-market and enhance portfolio quality Secured $9.0 million post tax trading profits from industrial
Slide 26: Summary
05 Summary 25 | Dexus 2024 half year results
Slide 27: The Dexus investment proposition
The Dexus investment proposition High-quality portfolio with embedded potential from funds management and development Fully integrated real asset platform of scale and deep capability Investment Funds management Development $15.8bn $41.3bn $16.9bn1 capital invested third party real estate and infras
Slide 28: Summary
Summary Leading real asset manager with balance sheet of scale and strength Dexus has demonstrated strategic execution: – Maintained a strong balance sheet through asset recycling – Property portfolio continues to benefit from flight to quality – Integration of AMP Capital platform to complete by 30
Slide 29: Appendices
06 Appendices 28 | Dexus 2024 half year results
Slide 30: Dexus today
Dexus today $57.1 billion – total platform funds under management Dexus portfolio Funds management portfolio 28% <1% 2% 1% 1% 2% 2% 3% 3% 69% $15.8bn 18% $41.3bn 26% 23% 22% Office Infrastructure Office Industrial Healthcare Retail Industrial Retail Opportunity Infrastructure Healthcare Real estate
Slide 31: Reconciliation to statutory (loss)/profit
Financial results Reconciliation to statutory (loss)/profit 31 Dec 2023 31 Dec 2022 $m $m Statutory AIFRS net (loss)/profit after tax (597.2) 23.1 Investment property and inventory (Gain)/loss from sales of investment property (0.1) 0.5 Fair value (gain)/loss on investment properties 687.3 236.7 Fai
Slide 32: Management operations profit
Financial results Management operations profit HY24 Funds Property Development Management ($m) management management management operations Revenue 123.2 45.9 13.0 182.1 Operating expenses (54.8) (39.7) (15.1) (109.6) HY24 net profit 68.4 6.2 (2.1) 72.5 HY24 margin 56% 14% (16)% 40% HY23 margin 62% 1
Slide 33: Cash flow reconciliation
Financial results Cash flow reconciliation 31 Dec 2023 31 Dec 2022 $m $m Cash flow from operating activities 108.2 294.1 add back: payment for inventory acquisition and capex 37.8 10.0 less: cost of sale of inventory (30.8) (62.1) less: tax on trading profits not yet paid (3.9) (20.9) add back: capi
Slide 34: Interest reconciliation
Financial results Interest reconciliation 31 Dec 2023 31 Dec 2022 $m $m Total statutory finance costs 87.5 75.7 Less: Debt modification and movements related to exchangeable notes (8.7) (5.0) Add: Finance costs attributable to investments accounted for using the equity method1 (0.6) 3.9 Less: AASB 1
Slide 35: 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 assets1 (1 July 23) 11,706.1 10.88 Dexus office portfolio (613.6) 5.53% 69% Revaluation of real estate (687.3) (0.64) Dexu
Slide 36: Property portfolio book value movements
Financial results Property portfolio book value movements Office1 Industrial1 Other1 Dexus total1 Trading assets2 (inventory) $m $m $m $m $m Opening property portfolio 11,945.0 3,686.4 22.5 15,653.9 30.6 3 Lease incentives 53.6 5.6 - 59.2 - Maintenance capex 12.2 0.7 - 12.9 - Acquisitions/transfers
Slide 37: Co-investments in pooled funds
Financial results Co-investments in pooled funds Dexus Dexus HY24 Ownership stake Passing distribution WALE WACR co-investment value co-investment income Occupancy (%) (%) yield (%)2 (years) (%) ($m)1 ($m) Real estate DHPF 16.2% $230.3 $4.4 3.5% 99.7% 18.3 4.9% AUHPT3 7.0% $177.1 $4.2 3.8%4 97.9% 16
Slide 38: Capital management
Capital management HY24 position $m Debt maturity profile1 Key metrics 31 Dec 2023 30 Jun 2023 2,500 $4,694m Total debt2 $5,310m Headroom3 $3.1bn $2.5bn 2,000 Gearing (look-through)4 29.4% 27.9%6 1,500 Covenant gearing (covenant5 <55%) 28.1% 29.4% Interest cover (covenant5 >2.0x) 4.0x 4.4x 1,000 Pri
Slide 39: Capital management: interest rate hedging profile
Capital management Interest rate hedging profile $m Hedge profile Hedging profile 31 Dec 2023 30 June 2023 5,000 4.0% Hedged debt (incl caps)1 95% 86% 4,500 3.5% 4,000 Weighted average interest rate on hedged debt2 2.0% 1.9% 3,500 3.0% 3,000 Cost of debt3 3.9% 3.7% 2,500 2.5% Weighted average maturi
Slide 40: Capital management: debt facilities
Capital management Debt facilities1 Facility limit Drawn Maturity Currency Facility limit Drawn A$m A$m A$m A$m Bilateral bank debt 600 250 FY25 A$ Sub total 7,685 4,513 450 200 FY26 A$ Currency translation and fair value adjustments 255 255 750 79 FY27 A$ 1,350 - FY28 A$ Deferred borrowing costs an
Slide 41: 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 DWAPF DCPF RES ASX:DXI ASX:DXC Office Dexus Wholesale Property Fund Dexus Wholesale Shopping Centre Fund Dexus Healthcare Property
Slide 42: Funds management – infrastructure product offering
Funds management – infrastructure product offering Institutional pooled funds Retail / HNW pooled funds JVs and mandates DDIT CommIF WAF DCIF APAFs 5 other Dexus Diversified Dexus Community Wholesale Dexus Core Series of Melbourne Separately Managed Infrastructure Trust Infrastructure Fund Airport F
Slide 43: Funds management development pipeline
Funds management Development pipeline $8.5 billion Funds management development pipeline1 $2.3 billion $5.2 billion Committed projects Uncommitted projects FY25-FY27+ uncommitted project costs in funds management business 1. Includes $1.0 billion concept projects. 42 | Dexus 2024 half year results
Slide 44: Office and Industrial key metrics
Property portfolio Office and Industrial key metrics Key metrics Office Industrial Amount of space leased1 66,600sqm2 102,500sqm3 No. of leasing transactions 1352 173 Occupancy by income 94.5% 99.0% Occupancy by area 94.0% 99.5% Average incentives 29.4%4 18.6%4 No. of effective deals 43 2 Weighted a
Slide 45: Office portfolio diversification
Property portfolio Office portfolio diversification Office by asset type Office by location Sydney CBD/fringe 47% Prime grade 95%1 12% 55% 13% $10.9bn $10.9bn 54% <1% 21% 5% 40% Sydney suburban 7% Premium A Grade B Grade Other NSW VIC QLD WA 1. Prime grade buildings represent 95% of the office portf
Slide 46: Sydney CBD occupancy
Sydney CBD occupancy 30 The Bond Premium occupancy higher in the core 36 The Bond Australia Square One Farrer Walsh Bay Occupancy 89% Core The market occupancy rate of Premium space in the core of Premium stock 270,054sqm the Sydney CBD is well above the average for the whole Occupancy 90% Sydney CB
Slide 47: 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% 15% 12.8% 13.3% 14.3% 10.1%10.8% 9.8% 10.4% 15% 11.3% 10.5% 12.2%13.0% 13.0% 10% 9.9% 9.1% 7.4% 6.5% 6.6% 10% 5.5% 5.6% 5.7% 6.2% 5.7% 5% 4.3% 2.8% 5% 0% 0% Available
Slide 48: Top customers represent 19% of total portfolio income
Property portfolio Top 10 customers represent 19% 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 17% Office customers1 rating2 portfolio Income3 Legal services 14% Rental, hirin
Slide 49: Industrial portfolio diversification
Property portfolio Industrial portfolio diversification Industrial by asset type Industrial by location 13% 1% 76% 10% $3.6bn 3% $3.6bn 47% 13% 2% 29% 6% Industrial estate Business park Data centre Distribution centre Land NSW VIC QLD SA WA 48 | Dexus 2024 half year results
Slide 50: Industrial portfolio lease expiry profile by income
Property portfolio Industrial portfolio lease expiry profile by income 20% 16.0% 15% 14.5% 12.9% 10% 8.1% 5% 4.3% 1.0% 0% Available FY24 FY25 FY26 FY27 FY28 Key vacancies FY24 Key expiries FY25 Key expiries FY26 Key expiries FY27 Key expiries FY28 Key expiries 1 Garigal Road, Belrose (0.3%) Kings Pa
Slide 51: Industrial portfolio lease expiry profiles by region
Property portfolio Industrial portfolio lease expiry profiles by region1 Sydney Brisbane Income Area Income Area 30% 30% 23.2% 22.6% 21.0% 20% 17.7% 20% 16.0% 17.1% 11.5% 10.7% 10.0% 9.1% 8.4% 8.6% 8.5% 8.0% 8.1% 8.5% 9.1% 10% 6.9% 10% 3.3% 3.1% 1.6% 1.0% 1.1% 1.2% - - Available FY24 FY25 FY26 FY27
Slide 52: Top customers represent 4.3% of total portfolio income
Property portfolio Top 10 customers represent 4.3% of total portfolio income Industrial top 10 customers Diversity of industrial customers3 (by income) - 10% 20% 30% 40% % of total Industrial customers1,3 property portfolio Transport, Postal and Warehousing 34.7% income2 Retail trade 18.5% Reece Aus
Slide 53: Office portfolio sustainability metrics
Environmental metrics Office portfolio sustainability metrics Dexus office net emissions FY08 BAU Office NABERS energy ratings Office NABERS water ratings sources (Location-based) Net emissions 120 Operational Emission 9% - Indirect Emissions intensity (kg CO2-e/sqm) 5.5 stars 5.5 stars 5 stars 100
Slide 54: Dexus completed developments
Development Dexus completed developments Building area1 Project costs2 Yield on cost Leased Completion Third party partner Pipeline sqm $m % % date interest % Industrial Jandakot Airport, Perth WA 18,000 16 5.3% 100% Jul-23 67% Palm Springs Road, Ravenhall VIC 58,900 22 6.0% 100% Jul-23 75% Total in
Slide 55: Dexus committed developments and fund-throughs
Development Dexus committed developments and fund-throughs Est cost to Building area1 Project costs2 Yield on cost3 Leased Completion Third party Pipeline completion2 sqm $m % % due partner interest % $m Office 123 Albert Street, Brisbane QLD 39,100 597 120 c. 5% 100% Mid 2024 0% Atlassian Central,
Slide 56: 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% - Central Place, Sydney NSW4 137,800
Slide 57: Dexus transactions
Transactions Dexus transactions Sale price2 Interest Dexus divestments1 Settlement $m % 84 Lahrs Road, Ormeau QLD 33.0 100.0% 07-Jul-23 44 Market Street, Sydney NSW 393.1 100.0% 01-Aug-23 Axxess Corporate Park, Mount Waverley VIC 306.2 100.0% 07-Aug-23 20 Distribution Drive, Truganina VIC - Lot CC 4
Slide 58: Office demand indicators
Office demand indicators Professional services industry 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
Slide 59: High quality properties likely to outperform
High quality properties likely to outperform Premium assets expected to outperform lower grades in the current investment climate › Capitalisation rates for premium office properties have been more stable than secondary over time › The spread between premium and secondary properties is starting to w
Slide 60: 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 61: Office market outlook
Office market outlook Office leasing inquiry driven by smaller occupiers Vacancy rates in CBD office markets Office vacancy concentration in CBD office markets Syd CBD Melb CBD Bris CBD Perth CBD 18% 25% 30% of buildings comprise of 10% of buildings comprise of 1% of buildings comprise of 16% 43% of
Slide 62: Industrial market outlook
Industrial market outlook Rent growth beginning to taper as vacancy normalises Lack of available space has led to a rapid growth in rents Vacancy rates low across all markets Last 12 Rents $/sqm months: Sydney Melbourne Brisbane Perth Adelaide $230 Outer West Sydney 10% $210 +11% West Melbourne 9% $
Slide 63: Healthcare sector
Healthcare sector Healthcare has outperformed other sectors over the past decade Growing institutional demand drives healthcare transactions higher Indexed returns by sector over 15 years1 (September 2008=100) Hospitals/Medical centres Seniors housing and nursing homes Medical office Industrial rese
Slide 64: Sydney CBD – supply FY25-FY27 largely pre-committed
40 100 80 -60 0 -20 120 -40 60 20 32-36 32-26 York St. St '000 square metres FY24 Central Place 63 | Dexus 2024 half year results 121 Castlereagh St (David Jones) Source: JLL Research, Dexus Research. FY25-FY27 33 33 Alfred Alfred St. St 333 Kent St FY25 Martin Place Metro - North Tower Market outlo
Slide 65: Melbourne CBD – net supply in FY25-FY27 is below average
40 80 0 -20 -40 60 20 NAB House - 500 Bourke St (ISPT) '000 square metres 140 Lonsdale St (Charter Hall) FY24 64 | Dexus 2024 half year results Source: JLL Research, Dexus Research. 299 Bourke St / 280 Little Collins (Newmark) FY25-FY27 Invicta House (Fidinam) 85-91 Spring Steet (Proprium) Market ou
Slide 66: Dexus's position in CBD office
Office markets Dexus’s position in CBD office CBD office market Sydney Melbourne Brisbane Perth Total NLA 5,182,708 5,302,081 2,305,938 1,885,341 Prime vacancy average 14.9% 16.6% 12.4% 15.6% Dexus CBD exposure Total NLA 485,566 396,814 261,038 183,645 Number of properties 13 7 5 4 Occupancy (by are
Slide 67: Other information
Other information Exchange and securities used in statutory accounts 31 Dec 2023 30 Jun 2023 31 Dec 2022 Closing rates for Statement of Financial Position USD 0.6840 0.6630 0.6775 Average rates for Statement of Comprehensive Income USD 0.6526 0.6734 0.6752 6 mths to 12 mths to 6 mths to Post consoli
Slide 68: Glossary
Glossary Distribution payout policy: Policy 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 Australian A
Slide 69: 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 70: dexus
dexus