Dexus · ASX:DXS
Dexus — DEXUS Property Group — Morgan Stanley 14th Annual Asia Pacific Summit 2015
36 slides from Dexus's conference presentation, Nov 18, 2015
Slide 1: Morgan Stanley 14th Annual Asia Pacific Summit presentation
DEXUS Property Group (ASX: DXS) ASX release 18 November 2015 Morgan Stanley 14th Annual Asia Pacific Summit presentation For personal use only DEXUS Property Group (DEXUS) provides an overview presentation which will be used as a basis of discussion at the Morgan Stanley 14th Annual Asia Pacific Sum
Slide 2: DEXUS Property Group Morgan Stanley Asia-Pacific Summit Presentation
DEXUS PROPERTY GROUP MORGAN STANLEY ASIA-PACIFIC SUMMIT PRESENTATION – NOVEMBER 2015 For personal use only DEXUS Funds Management Limited ABN 24 060 920 783 DEXUS AFSL Property 238163 Group – Morgan as responsible entity Stanley Asia-Pacific for DEXUS Summit 2015 Property Group Slide 1
Slide 3: Agenda
AGENDA DEXUS today For personal use only Property portfolio Property portfolio – Development Property Portfolio – Recent transactions Third party funds management Trading Market outlook Summary All data as at 30 June 2015 unless otherwise stated. DEXUS Property Group – Morgan Stanley
Slide 4: DEXUS today
DEXUS TODAY Australia’s largest prime office portfolio For personal use only A significant and growing Third Party Funds Management business A deep pipeline of value enhancement opportunities 8.6% average growth in distributions p.a. and 15.8% p.a. TSR1 since FY12 Underpinned by a strong balance she
Slide 5: DEXUS today
DEXUS TODAY– DEXUS today THIRD PARTY FUNDS TOTAL For personal use only DEXUS PORTFOLIO1 PORTFOLIO2 GROUP PORTFOLIO1,2 $9.5bn $10.1bn $19.6bn Management of a diverse DEXUS owned and managed portfolio of office, industrial and portfolio of Australian office retail properties on behalf of and industria
Slide 6: DEXUS today – Key earnings drivers
DEXUS TODAY – Key earnings drivers For personal use only PROPERTY FUNDS MANAGEMENT TRADING PORTFOLIO & PROPERTY SERVICES Maximising Driving performance Delivering trading performance from and generating profits from the DEXUS property revenue from funds identified properties portfolio management and
Slide 7: Property portfolio – DEXUS office
PROPERTY PORTFOLIO – DEXUS office – 82% of balance sheet assets $7.8bn >85% For personal use only Prime office portfolio Prime grade portfolio composition 94.1%1 6.71% Occupancy (by income) Average capitalisation rate 1. Occupancy was 93.7% at 30 September 2015 and increased to 94.1% at 22 October 2
Slide 8: Property portfolio – Office occupancy and lease expiry profile
PROPERTY PORTFOLIO – DEXUS office occupancy and lease expiry profile Maintained office occupancy rates well above Historical outperformance vs. National office occupancy rates3 For personal use only National average and 90%1 since 2004 100% No more than 12.1%1 of the Group’s existing 95% office
Slide 9: Property portfolio – DEXUS industrial
PROPERTY PORTFOLIO – DEXUS industrial – 18% of balance sheet assets Lakes Business Park, Lord Street, Botany $1.7bn For personal use only Prime industrial portfolio 93.4%1 Occupancy (by income) 7.77% Average capitalisation rate 1 Foundation Place, Greystanes Quarry at Greystanes, 1 Basalt Road, Grey
Slide 10: Property portfolio – Development pipeline as at June 2015
PROPERTY PORTFOLIO – Development pipeline as at 30 June 2015 $3.5bn Group development pipeline For personal use only $1.2bn $2.3bn DEXUS portfolio Third Party Funds $808m $420m committed projects uncommitted projects $296m committed projects remaining spend FY16 FY17 FY18+ 5 Martin Place, Sydney $11
Slide 11: Property portfolio – Key office developments
PROPERTY PORTFOLIO – Key office developments 5 Martin Place, Sydney1 Kings Square, Perth2 480 Queen Street, Brisbane2 For personal use only 29% forecast project IRR 15% forecast project IRR 17% forecast project IRR 7.3% yield on cost 8.2% yield on cost 7.0-7.2% yield on cost 1. Jointly owned by DEXU
Slide 12: Property portfolio – Industrial development
PROPERTY PORTFOLIO – Industrial development Quarry1 at Greystanes and Quarrywest2 For personal use only 319,000 square metres of prime industrial facilities 1. Jointly owned by DEXUS and Australian Industrial Partner. 2. Jointly owned by DEXUS and DEXUS Industrial Partner. DEXUS Property Group – Mor
Slide 13: Property portfolio – Recent transactions
PROPERTY PORTFOLIO – Recent transactions Acquisition of Waterfront Place Complex, Brisbane1 Sale of 36 George Street, Burwood2 For personal use only Acquisition price: $635m Sale price: $95m Favourable rate of $9,644/sqm 44% premium to book value Long term core investment Achieved a 32% IRR on inves
Slide 14: Third party funds management – Platform set up for organic growth
THIRD PARTY FUNDS MANAGEMENT – Platform set up for organic growth $10.1bn1 48 For personal use only Third Party Funds under management Investors from seven countries >70% $2.3bn Growth in third party funds since June 20121 Development pipeline Management operations profit Growing investor/fund base1
Slide 15: Trading
TRADING Since 2010, DEXUS has had a trading strategy and included trading profits in FFO For personal use only Already settled on properties that comprise FY16 trading profits to deliver approximately $60 million (post tax) In late October 2015, entered into an agreement to sell 57-65 Templar
Slide 16: Trading pipeline
TRADING PIPELINE For personal use only FY15 FY16 FY17 FY18+ 30 Distribution Drive, Laverton1 Sold for $19m ($1m profit, 16.3% IRR) 50 Carrington Street, Sydney1 Sold for $88m ($12m profit 13.2% IRR) 40 Market Street, Melbourne1 Sold for $105m ($17m profit 26% IRR) Trading profits settled/secured 5-1
Slide 17: Market outlook – Sydney CBD vacancy to fall below 6.5% by FY18
MARKET OUTLOOK – Sydney CBD vacancy to fall below 6.5% by FY18 DEXUS EXPECTATIONS For personal use only 444,000sqm of 281,000sqm of 240,000sqm of Flight to quality Vacancy to supply withdrawals net absorption above average take increase in FY16 over the next 3 years over the next 3 years over the ne
Slide 18: Summary
SUMMARY Solid operating business set up to deliver growth through the cycle For personal use only Delivering consistent performance Third party funds management business is set up for strong organic growth FY16 guidance1 for growth in FFO and distribution per security of 5.5-6.0% from FY15 D
Slide 19: Appendices
APPENDICES For personal use only DEXUS Property Group – Morgan Stanley Asia-Pacific Summit 2015 Slide 18
Slide 20: Capital management – Improved diversity, duration and cost of debt
CAPITAL MANAGEMENT – Improved diversity, duration and cost of debt Key metrics 30 Jun 15 30 Jun 14 Diversified mix of facilities5 For personal use only Gearing (look-through)1 28.5%2 33.7% Cost of debt3 5.2% 5.4% 144A 8% Duration of debt 5.7 years 5.2 years Hedged debt (ex caps)4 69% 51% S&P/Moody’s
Slide 21: Sydney CBD Office Portfolio
SYDNEY CBD OFFICE PORTFOLIO For personal use only DEXUS Property Group – Morgan Stanley Asia-Pacific Summit 2015 Slide 20
Slide 22: Sydney CBD Office Portfolio
SYDNEY CBD OFFICE PORTFOLIO For personal use only L-R: 5 Martin Place, Australia Square and Governor Phillip and Governor Macquarie Towers, Sydney NSW. DEXUS Property Group – Morgan Stanley Asia-Pacific Summit 2015 Slide 21
Slide 23: Sydney CBD
SYDNEY CBD For personal use only Aerial view of Sydney CBD, NSW. DEXUS Property Group – Morgan Stanley Asia-Pacific Summit 2015 Slide 22
Slide 24: Sydney CBD
SYDNEY CBD For personal use only View of Sydney CBD from Milsons Point, NSW. DEXUS Property Group – Morgan Stanley Asia-Pacific Summit 2015 Slide 23
Slide 25: Melbourne CBD Office Portfolio
MELBOURNE CBD OFFICE PORTFOLIO For personal use only DEXUS Property Group – Morgan Stanley Asia-Pacific Summit 2015 Slide 24
Slide 26: Melbourne CBD Office Portfolio
MELBOURNE CBD OFFICE PORTFOLIO For personal use only L:R: 385 Bourke Street, Southgate Complex and 180-222 Lonsdale Street, Melbourne, VIC. DEXUS Property Group – Morgan Stanley Asia-Pacific Summit 2015 Slide 25
Slide 27: Brisbane CBD Office Portfolio
BRISBANE CBD OFFICE PORTFOLIO For personal use only DEXUS Property Group – Morgan Stanley Asia-Pacific Summit 2015 Slide 26
Slide 28: Brisbane CBD Office Portfolio
BRISBANE CBD OFFICE PORTFOLIO For personal use only L-R: 123 Albert Street, 480 Queen Street development, 10 Eagle Street and 12 Creek Street, Brisbane, QLD. DEXUS Property Group – Morgan Stanley Asia-Pacific Summit 2015 Slide 27
Slide 29: Perth CBD Office Portfolio
PERTH CBD OFFICE PORTFOLIO For personal use only DEXUS Property Group – Morgan Stanley Asia-Pacific Summit 2015 Slide 28
Slide 30: Perth CBD Office Portfolio
PERTH CBD OFFICE PORTFOLIO For personal use only L-R: 58 Mounts Bay Road, 240 St Georges Terrace and Kings Square development, Perth, WA. DEXUS Property Group – Morgan Stanley Asia-Pacific Summit 2015 Slide 29
Slide 31: Market outlook – Sydney CBD office
MARKET OUTLOOK – Sydney CBD office Sydney CBD office market Sydney CBD office market At 30 June 2015 For personal use only ‘000sqm Total net lettable area 5.00 million sqm 250 12% Prime vacancy average 7.5% 200 9% 150 DEXUS Sydney CBD exposure 6% 100 Net lettable area 594,848 50 3% Number of propert
Slide 32: Market outlook – Melbourne CBD office
MARKET OUTLOOK – Melbourne CBD office Melbourne CBD office market Melbourne CBD office market At 30 June 2015 For personal use only ‘000sqm Total net lettable area 4.57 million sqm 250 12.5% Prime vacancy average 9.8% 200 10.0% DEXUS Melbourne CBD exposure1 150 7.5% Net lettable area 285,273 100 5.0
Slide 33: Market outlook – Brisbane CBD office
MARKET OUTLOOK – Brisbane CBD office Brisbane CBD office market Brisbane CBD office market At 30 June 2015 For personal use only ‘000sqm Total net lettable area 2.15 million sqm 150 18% Prime vacancy average 10.2% 100 12% DEXUS Brisbane CBD exposure1 Net lettable area 460,005 50 6% Number of propert
Slide 34: Market outlook – Perth CBD office
MARKET OUTLOOK – Perth CBD office Perth CBD office market Perth CBD office market At 30 June 2015 For personal use only ‘000sqm Total net lettable area 1.64 million sqm 250 25% Prime vacancy average 15.9% 200 20% DEXUS Perth CBD exposure1 150 15% Net lettable area 422,916 100 10% Number of propertie
Slide 35: Important information
IMPORTANT INFORMATION This presentation is issued by DEXUS Funds Management Limited (DXFM) in its capacity as responsible entity of DEXUS Property Group (ASX:DXS). It is not an offer of securities for subscription or sale and is not financial product advice. For personal use only Information in
Slide 36: DEXUS Property Group Morgan Stanley Asia-Pacific Summit Presentation
DEXUS PROPERTY GROUP MORGAN STANLEY ASIA-PACIFIC SUMMIT PRESENTATION – NOVEMBER 2015 For personal use only DEXUS Funds Management Limited ABN 24 060 920 783 DEXUS AFSL Property 238163 Group – Morgan as responsible entity Stanley Asia-Pacific for DEXUS Summit 2015 Property Group Slide 35
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