2019 Annual Results Release

14 August 2019

2019 Annual results – Securing opportunities. Adding value

Dexus today announced that it had achieved 5.5% Adjusted Funds From Operations (AFFO) per security growth and 5.0% distribution per security growth for FY19, and confirmed its guidance of circa 5% distribution per security growth for FY20.

Dexus Chief Executive Officer, Darren Steinberg said: “We entered the year with a clear strategy and readiness to respond to both market opportunities and challenges. Our focus on maintaining a leading position in the Australian property market has been achieved through the performance of our property portfolio, selective acquisitions with future value-add, growth in our funds management business and the delivery of trading profits, all contributing to our strong financial result.

“We have performed well across all areas of the business, meeting our distribution guidance while remaining focused on creating sustained value.

“In a year of significant transaction activity, we secured $3.1 billion of quality acquisition opportunities, increasing our office exposure in core markets and enhancing our embedded pipeline of office development projects in both the Melbourne and Sydney CBDs. This was achieved while maintaining our strong and conservative balance sheet.

“Our office portfolio continued to outperform the MSCI office benchmark over three and five years through driving higher rents and lower incentives. Our $16.2 billion funds management business grew through the introduction of new third party capital partners, and importantly, all funds achieved strong performance.

“The strength of our results is testament to our workforce, and our people continued to demonstrate high levels of engagement reflected through the employee Net Promoter Score of +40.”

FINANCIAL HIGHLIGHTS

• AFFO per security of 50.3 cents, up 5.5% on FY18
• Distribution per security of 50.2 cents, up 5.0% on FY18
• Net profit after tax of $1.28 billion, down 25.9% primarily due to net revaluation gains of investment properties being lower than those recognised in FY18
• Return on Contributed Equity (ROCE) of 10.1%
• Gearing (look-through) of 24.0%

OPERATIONAL HIGHLIGHTS

Property portfolio

• Leased a total of 567,039 square metres across the total Dexus portfolio, maintaining high portfolio occupancy of 98.0% for Dexus office and 97.0% for Dexus industrial portfolios
• Dexus office portfolio continued to outperform the MSCI office benchmark over three and five years, with Dexus industrial outperforming the MSCI industrial benchmark over one and three years
• Achieved strong leasing outcomes at key developments located in North Sydney and Perth
• Enhanced the group’s circa $9.3 billion development and concept pipeline

Funds Management

• Established the circa $2 billion Dexus Australian Logistics Trust (DALT) and attracted new investors across three other managed funds
• Achieved strong performance across all funds with Dexus Wholesale Property Fund (DWPF) continuing its outperformance over one, three, five, seven and ten years

Trading

• Delivered $34.7 million of trading profits (post-tax) in FY19
• Significantly de-risked trading profits for FY20 and FY21

People, customers, communities and the environment

• Achieved a strong employee Net Promoter Score of +40 and customer Net Promoter Score of +46
• Achieved a strong score of 98% on independent external safety audits of Dexus’s corporate and management workplaces across Australia
• Achieved our 2020 target to reduce like-for-like energy use and emissions by 10% (FY15 base year)
• Progressed our goal to achieve net zero carbon emissions by 2030, securing one of Australia’s first supply-linked renewable Energy Supply Agreement