HY18 Review

Dear Security holders,

We are pleased to report that Dexus delivered a strong result in the first six months of FY18 and upgraded its guidance for distribution per security growth for FY18.

Financial performance

Net profit after tax of $997.1 million was up $281.1 million from HY17, driven by revaluation gains of investment properties combined with an increase in Funds from Operations. Distribution per security for the six months ended 31 December 2017 was 23.7 cents, up 9.2% on the previous corresponding period.

Property values continued to grow in the six months to 31 December 2017, with our office and industrial portfolio recording a $730.2 million or 6.4% increase on prior book values, $334.2 million higher than the previous corresponding period. Most of the valuation uplift was due to further capitalisation rate compression experienced in both Sydney and Melbourne, supported by market sales evidence, with the remainder from market rent growth.

We continued our active approach to managing our capital, enhancing our duration of debt to seven years through the completion of our largest ever debt raising.

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