Creating Sustained Value by adopting an approach that embraces connectivity, liveability and resilience, and is integrated across our value chain.

 

FY16 Performance Against Commitments

 = Achieved   = Not achieved  = Underway
Commitment Status FY16 Achievements
INVESTORS
Deliver FFO and distribution per security growth of 5.5%-6.0% Delivered 6% FFO and distribution growth per security for FY16
Refer to the Chair and CEO's Review and Operating and Financial Review
Deliver a return on equity of 9-10% Delivered a return on equity of 19.3% for the year to 30 June 2016 exceeding the 9-10% target
Refer to the Chair and CEO's Review and Operating and Financial Review
OFFICE         
Maintain >95% occupancy in the Dexus office portfolio

Achieved 96.3% office portfolio occupancy by income for the Dexus office portfolio 
Refer to Delivering FY16 Commitments and Office

Reduce the Sydney office portfolio lease expires in FY16-FY17 to under 8.5% and 9.5% respectively Reduced office FY16 expiries to 8.8% and FY17 expiries to 12.7%. The FY17 expiry target was revised upward to 10.5% against the respective targets of 8.5% and 9.5%, due to the impact of short term leasing
Refer to Delivering FY16 Commitments and Office
THIRD PARTY FUNDS MANAGEMENT
Continue to deliver on investment plans and objectives for third party partners Delivered on investment objectives for third party clients achieving strong outperformance, improved valuations and expanded the $3.0 billion third party development pipeline
Refer to Delivering FY16 Commitments and Funds Management
TRADING
Progress the high priority opportunities in the trading pipeline   Delivered $63.3 million in trading profits net of tax in FY16 and identified six priority projects earlier in the year to generate trading profits in the future
Refer to Trading           

Dexus Portfolio Snapshot

Key Metrics FY12 FY13 FY14
(Pre-CPA)
FY14
(Post-CPA)
FY15  FY16
Portfolio value ($A) Dexus portfolio $6.9bn $7.4bn $7.3bn $9.1bn $9.5bn $11.0bn
Office $4.7bn $5.9bn $5.7bn $7.7bn $7.8bn $9.2bn
Industrial $1.7bn $1.4bn $1.6bn $1.4bn $1.7bn $1.8bn
Industrial US* (US$) $549.5m - - - -
Net lettable area (sqm) Dexus portfolio 2,468,446¹ 1,724,800 1,775,487¹ 1,993,729 2,697,990 2,842,797
Office 759,737 951,380 682,207 1,490,070 1,403,255 1,566,111 
Industrial 1,239,101 1,251,152 1,254,588 1,254,588 1,294,735 1,276,685
Industrial US* (sqf) 6.4m - - - -
Funds From Operations³ Office n/a n/a n/a $455.4m $533.3m $567.2m 
Industrial n/a n/a n/a $122.8m $112.3m $106.1m
Like-for-like income growth Office 5.4% 3.6% 1.8% - 0.2% 1.0%
Industrial (1.6%) 1.5% 1.1% 1.5% 0.7% (7.1%) 
Industrial US* 3.8% - - - - -
Occupancy
(by income)
Dexus portfolio 95.8% 94.7% 94.9% - -  -
Office 96.8% 95.2% 94.6% 94.6% 95.3% 96.3%
Industrial 92.8% 93.0% 96.1% 93.0% 92.4% 90.4%
Industrial US* 98.2% - - - - -
Occupancy
(by area)
Dexus portfolio 93.4% 94.1% 95.3% - -             -
Office 97.1% 94.7% 94.4% 94.3% 95.5% 96.3% 
Industrial 91.7% 93.1% 95.9% 93.1% 91.7% 91.7% 
Industrial US* 97.1% - - - -
Lease duration (by income) Dexus portfolio 4.7 years 4.7 years 4.8 years - -  -
Office 4.9 years 4.9 years 5.0 years 4.7 years 4.3 years 4.7 years
Industrial 4.4 years 4.0 years 4.1 years 4.0 years 4.0 years 4.1 years 
Industrial US* 4.4 years - - - - -
Weighted average capitalisation rate Dexus portfolio 7.51%2 7.13% 7.47% - 6.88% 6.33%
Office 7.30% 6.87% 7.17% - 6.71% 6.16%
Industrial 8.59% 8.32% 8.55% 8.32% 7.77% 7.38%
Industrial US* 6.3% - - - -
1 year total return Office 9.5% 9.2% 10.6% - 9.6% 16.0% 
Industrial 8.0% 9.0% 8.8% 9.0% 11.3% 16.0% 
Industrial US* 10.0% - - - - -
  1. Reduction is due to the sale of the US and European portfolios.
  2. 7.68% on a like-for-like basis excluding discontinued operations.
  3. FFO in accordance with guidelines provided by the Property Council of Australia (PCA): comprises net profit/loss after tax attributable to stapled security holders calculated in accordance with Australian Accounting Standards and adjusted for: property revaluations, impairments, derivative and FX mark-to-market impacts, fair value movements of interest bearing liabilities, amortisation of tenant incentives, gain/loss on sale of certain assets, straight line rent adjustments, deferred tax expense/benefit, transaction costs, amortisation of intangible assets, rental guarantees and coupon income.

 * The Industrial US portfolio was completely sold as at 30 June 2013.


Financial Highlights

Key Metrics FY12 FY13 FY14 FY15 FY16
Net profit after tax ($m) 181.1 514.5 406.6 618.7 1,259.8 
Funds From Operations ($m) 367.8 365.4 446.6 544.5 610.8
Funds From Operations (cents per security) 7.65 7.75 8.34 59.5² 63.1
Distribution (cents per security) 5.35 6.00 6.26 41.04² 43.51
NTA per security ($) 1.00 1.05 1.06 6.68² 7.53
Gearing (%)¹ 27.0 29.0 33.7 28.5 30.73
Total shareholder return (%) 12.2 22.1 9.9 15.8 30.3%
  1. Adjusted for cash and for debt in equity accounted investments.
  2. Dexus completed a one-for-six Security Consolidation in November 2014.
  3. Gearing is expected to reduce to circa 27% post the receipt of sale proceeds from recent divestments. This includes the sale of 57-65 Templar Road, Erskine Park (trading property); The Zenith, Chatswood; 108 North Terrace, Adelaide; the first 50% tranche of Southgate Complex, Melbourne; and 79-99 St Hilliers Road, Auburn (trading property).

For more financial information refer to the 2016 Dexus Annual Report.

Dexus PERFORMANCE AGAINST A-REIT INDEX


Dexus TOTAL SECURITY HOLDER RETURN

Capital Management

Key Metrics FY12 FY13 FY14 FY15 FY16
Cost of debt¹ 6.1% 5.9% 5.4% 5.2% 4.8% 
Duration of debt 4.2 years 5.4 years 5.2 years 5.7 years 5.5 years
Hedged debt 73% 64% 60% 69% 64%
Gearing² 27.2% 29.0% 33.7% 28.5% 30.7%4
Headroom (approximately)³ $0.6bn $0.3bn $0.5bn $0.8bn $0.4bn
S&P/Moody's credit rating BBB+/Baa1 BBB+/Baa1 A-/A3 A-/A3  A-/A3

  1. Weighted average across the period, inclusive of fees and margins on a drawn basis.
  2. Undrawn facilities plus cash. Excluding forward start commitments.
  3. Average for the year (excluding caps). Average for the year (including caps) was 71%.
  4. Gearing is expected to reduce to circa 27% post the receipt of sale proceeds from recent divestments. This includes the sale of 57-65 Templar Road, Erskine Park (trading property); The Zenith, Chatswood; 108 North Terrace, Adelaide; the first 50% tranche of Southgate Complex, Melbourne; and 79-99 St Hilliers Road, Auburn (trading property).
DEBT MATURITY PROFILE

 

DIVERSIFIED MIX OF DEBT
INTEREST RATE HEDGING MATURITY PROFILE¹
INTEREST RATE HEDGING PROFILE
Interest Rate Hedging¹ FY16 FY17 FY18 FY19 FY20 FY21
A$ net fixed coupon debt² 653 769 701 530 423 371
A$ interest rate caps 232 70 200 200 - -
A$ interest rate swaps 1,380 1,475 1,412 1,232 670 121
Total hedged A$m 2,264 2,314 2,312 1,692 1,093 492
Hedge rate (excluding margin)³ 3.43% 3.43% 3.44% 3.49 3.42% 3.01%
  1. Average amount hedged for the period (excluding caps) was 64%. Average for the full year (including caps) was 71%. Dexus was 70% hedged (including caps) as at 30 June 2016.
  2. Gross fixed coupon less the amount converted to floating rate basis via coupon matched swaps.
  3. Weighted average rate of fixed debt, swaps and caps for the period. Caps included at a rate equal to the lower of cap strike and forecast floating rate for the applicable period.
DEBT FACILITIES1
Facility limit
A$m
Drawn
A$m
Maturity dates Currency
Bilateral bank debt 50.0 50.0 Jan 17 A$
250.0 228.0 Oct 17-Dec 17 A$
300.0 246.0 Jan 18-Mar 18 A$
50.0 47.0 Aug 18 A$
300.0 300.0 Jan 19 A$
525.0 170.0 Nov 19-Jun 20 A$
280.0 265.0 Apr 21-May 21 A$
  100.0 100.0 Aug 22 A$
Commercial paper2 100.0 100.0 Aug 22 A$
Medium term notes 210.0 210.0 Apr 17 A$
205.0 205.0 Sep 18 A$
  50.0  50.0 Nov 22 A$
  109.5 109.5 Nov 25 A$
US senior notes (144A)3  304.9 304.9 Mar 21 US$
US senior notes (USPP)3 39.2 39.2 Dec 16 - Mar 174 US$
290.9 290.9 Jul 23-Jul 28 US$
  225.0 225.0 Feb 24-Feb 27 US$
285.9 285.9 Dec 24 - Dec 26 US$
100.0 100.0 Jun 28 A$
Subtotal 3,770.3 3,326.3
Currency translation and fair value adjustments 373.1 373.1
Deferred borrowing costs (12.6) (12.6)
Total interest bearing liabilities 4,130.8 3,686.8
Bank guarantee utilised   32.1    
Cash   (18.1)    
Headroom including cash   430.0    
  1. Debt facilities do not include Medium Term Notes included in an equity accounted investment: A$74.8m December 2019, A$11.5m December 2022.
  2. Maturity date of commercial paper standby facility.
  3. 144A and USPP amount shown at the cross currency swap contract rate.