Slide 1: ASX release: Board investor presentation
Dexus (ASX: DXS) ASX release For personal use only 15 October 2019 Board investor presentation Dexus provides the attached presentation which will be used as a basis of discussion in investor lunch sessions with members of the Dexus Board in Sydney and Melbourne. For further information please conta
Slide 2: Board investor presentation Melbourne and Sydney
For personal use only Board investor presentation Melbourne and Sydney October 2019 Dexus Funds Management Limited ABN 24 060 920 783 AFSL 238163 as responsible entity for Dexus
Slide 3: Dexus Research: 7 key themes to take us forward
For personal use only Dexus Research 7 key themes to take us forward… 2 Board investor presentation – Melbourne and Sydney
Slide 4: Uncertainty is the one thing we can be certain about
Theme 1 Uncertainty is the one thing we can be certain about For personal use only The good… The bad… Outcomes for FY20… Volatility in share markets Softer occupier demand outlook Lower for longer interest rates Downward pressure on cap rates on quality assets 3 Board investor presentation – Melbour
Slide 5: Occupier demand likely to be influenced by confidence
Theme 2 Occupier demand likely to be influenced by confidence For personal use only Office net absorption (qtly) 2009 – 2019, ‘000sqm Syd CBD Melb CBD Bris CBD Perth CBD 4CBDs 150 100 50 0 -50 -100 -150 Sep-09 Sep-10 Sep-11 Sep-12 Sep-13 Sep-14 Sep-15 Sep-16 Sep-17 Sep-18 Sep-19 Source: JLL Research
Slide 6: Sydney CBD office net absorption
Sydney CBD office net absorption Employment growth still solid, Government decentralising For personal use only Large occupiers net take-up by industry Employment growth NSW 000sqm Finance & Insurance Property & Business Services Total employment White collar industries Information Technology Govern
Slide 7: Melbourne CBD office net absorption
Melbourne CBD office net absorption Demand being boosted by super-strong population and jobs growth For personal use only Large occupiers net take-up by industry Population growth Employment growth Finance & Insurance Property & Business Services Per Per 000sqm 5.0% annum 5.0% annum Information Tech
Slide 8: Low vacancy rates give office markets resilience
Theme 3 Low vacancy rates give office markets a high degree of resilience For personal use only Vacancy and net supply forecasts – selected markets FY19 – FY23, % of stock 15% Net supply (RHS, % of stock) Vacancy 20yr average 15% 10% 10% 7.8% 7.4% 5% 5% 4.1% 3.8% 0% 0% -5% -5% FY21 FY21 FY22 FY23 FY
Slide 9: Office markets are at different points in their cycles
Theme 4 Office markets are at different points in their cycles For personal use only Prime net effective rental growth FY19 % pa, FY19 vs previous three years average growth 20.6% FY15-18 CAGR FY19 11.2% 11.6% 9.9% 10.0% 8.6% 4.6% 3.4% 2.7% 1.3% -1.9% -8.3% Syd CBD Melb CBD Parramatta North Syd Bris
Slide 10: People will keep flocking to CBDs and inner city areas
Theme 5 People will keep flocking to CBDs and inner city areas For personal use only NSW employment growth by region State Greater City Focus on attracting talent Index - Millennials & Gen Z Inner City - Live/work/play 160 - Vibrant precincts - Public transport 150 - Best technology 140 3.3%pa Provi
Slide 11: Lower-for-longer interest rates will underpin investment demand
Theme 6 Lower-for-longer interest rates will underpin investment demand For personal use only Cash rate, ten year bond yield and discount rate % Cash rate 10 yr bond Office discount rate 15% Implied IRR expectations for 10% different levels of ‘normalised’ bond yields: Current valuers’ Bond yield Im
Slide 12: Real estate just became more affordable
Yield spreads Real estate just became more affordable For personal use only Property yields by sector (average prime) Property yield spread to Government bonds Sept 1999 – Sept 2019, % Sept 1999 – Sept 2019, 10 Yr Australian Government Bonds Syd CBD Office 11% 6% Regional retail Syd CBD Office OWSyd
Slide 13: Australian office property doesn't appear expensive on a global scale
Relative value Australian office property doesn’t appear expensive on a global scale For personal use only Office effective yield* spread to government bonds % 3.0% 2.0% 1.0% 0.0% Source: Savills, JLL, Trading Economics, Knight Frank, Dexus Research. *Effective yields are based on A-grade office spa
Slide 14: Australia has the best demographics in the developed world
Theme 7 Australia has the best demographics in the developed world For personal use only Growth in working age population to 2040 Proportion of working age population in 2040 %pa %pa Japan -0.9% Japan 54% Republic of Korea -0.9% Republic of Korea 56% Germany -0.6% Germany 57% China -0.6% France 57%
Slide 15: Environmental, Social and Governance (ESG) factors
For personal use only Environmental, Social and Governance (ESG) factors 14 Board investor presentation – Melbourne and Sydney
Slide 16: ESG benchmarks
ESG benchmarks Leading performance For personal use only – Achieved strong results across leading global ESG benchmarks in 2019 – Strong sustainability credentials have also recently earned Dexus a place on ESG-focused investable indices, including MSCI ACWI Climate Change Index and S&P/ASX 200 ESG
Slide 17: How Dexus creates value
How Dexus creates value For personal use only 16 Board investor presentation – Melbourne and Sydney Source: Dexus 2019 Annual Report.
Slide 18: Environment – our focus areas
Environment – our focus areas For personal use only Transition to a low carbon economy - Targeting net zero emissions by 2030 – minimising transition risk, creating Increasing renewable benefits for the bottom line, and aligning with the ambitions of our third party energy capital partners - Achieve
Slide 19: Social – our focus areas
Social – our focus areas For personal use only Responding to customer needs Modern Slavery Act (suppliers) – Offering products and services curated to enhance Achieved strong – Dexus has undertaken work to understand modern the performance and wellbeing of our diverse slavery risks in its operations
Slide 20: Governance – our focus areas
Governance – our focus areas For personal use only - Conducted a detailed review of our Who we are - We are a passionate and agile corporate governance framework and have team who want to make a established a dedicated Dexus difference Governance team Why we come to work - Established a new Board ES
Slide 21: Important information
Important information For personal use only - This presentation is issued by Dexus Funds Management Limited (DXFM) in its capacity as responsible entity of Dexus (ASX:DXS). It is not an offer of securities for subscription or sale and is not financial product advice. - Information in this presentati
Slide 22: For personal use only
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