15 February 2017

2017 Half year results – Delivering growth in underlying business

Dexus (Dexus) today announced that it had achieved strong operational results, delivering growth in its underlying business, and has upgraded market guidance for the 2017 financial year.

Darren Steinberg, Dexus Chief Executive Officer, said: “Our commitment to delivering value for investors has seen us remain active through leasing, development and transactional activity.

“Income growth from leasing activity and development completions during FY16 helped to offset the impact of recent asset sales, driving a solid underlying result.

“We’ve progressed priority projects in our trading pipeline as well as opportunities to restock the future pipeline and we’re confident that the remaining forecast trading profits will be realised in the coming months, delivering on our FY17 target.”

HIGHLIGHTS

  • Increased underlying Funds from Operations (FFO) to $287.7 million, up $27.1 million or 10.4% on the previous corresponding period
  • Improved the Group Management Expense Ratio2 to 36 bps, down 4 bps from the previous corresponding period
  • Increased Net Tangible Assets (NTA) per security by 6.9% or 52 cents from 30 June 2016 to $8.05 at 31 December 2016
  • Achieved gearing of 26.5%, down 4.2 percentage points from 30 June 2016

Dexus property portfolio

  • Delivered a strong one-year total return of 13.9% across the Dexus Office portfolio
  •  Achieved significant leasing volumes, with 225 leasing transactions undertaken across 327,938 square metres, including record levels of leasing across the Dexus Industrial portfolio
  •  Improved the Dexus Industrial portfolio’s occupancy by 4.5 percentage points to 94.9%

Development

  • Commenced construction of the core of 100 Mount Street, North Sydney
  • Added new projects to the uncommitted development pipeline including 201 Elizabeth Street, Sydney
  •  Post period end, secured 39,112 square metres of industrial development pre-commitments

Funds Management

  •  Delivered outperformance against respective benchmarks for all third party clients
  •  Acquired Carillon City retail centre in Perth CBD on behalf of Dexus Wholesale Property Fund (DWPF)
  •  Opened the new Gateway and Grosvenor Place food/restaurant precincts in Sydney, enhancing investor returns and improving the amenity for our office tenants

Trading

  • Delivered $8.3 million of trading profits in HY17. In January 2017, secured a further $17 million towards the FY17 trading profit target of $45-50 million
  • Progressed priority trading projects and focussed on opportunities to restock the future trading pipeline, receiving local Council and Regional Planning Panel endorsement of a concept scheme for an office building at 140 George Street, Parramatta
  • Transactions Settled on $688 million of asset sales, including the sale of 39 Martin Place, Sydney
  • Acquired The Mill in Alexandria, expanding Dexus’s customer offering and providing the opportunity to activate underutilised floor space and capture rental growth