04 Mar 2020

Transition of Australian Mandate

4 March 2020

Transition of Australian Mandate

Dexus advises it will cease the management of the Australian Mandate, comprising a $1.6 billion property portfolio from 30 June 2020.

The diversified Australian Mandate comprises properties managed by Dexus on behalf of NSW Treasury Corporation (“TCorp”) for more than 30 years, and TCorp remains a long-term investor on the platform via other vehicles.

The Australian Mandate has achieved outperformance versus benchmark over 1, 3, 5, 7 and 10 years1.

Dexus’s funds management business has achieved significant growth since FY12 and has recently attracted new like-minded partners such as GIC and M&G Real Estate to invest alongside through the cycle.

There are currently several opportunities in the pipeline for Dexus to onboard investors with open investment periods and growth strategies.

The transition of the Australian Mandate is expected to have no impact on either Dexus's Adjusted Funds From Operations or distribution per security in FY20, with market guidance2  of distribution per security growth maintained at circa 5.5% for the 12 months ended 30 June 2020.

  1. MSCI Benchmark as at 31 December 2019
  2. Barring unforeseen circumstances, guidance is supported by the following assumptions: Impacts of announced divestments and acquisitions; FFO per security growth of circa 4%, underlying FFO per security growth of circa 4%, underpinned by Dexus office portfolio like-for-like income growth of 4.5-5.5%, Dexus industrial portfolio like-for-like income growth (excluding one-offs) of 3-4%, management operations FFO of circa $60 million, cost of debt of mid-3%; trading profits of $35-45 million net of tax; maintenance capex, cash incentives, leasing costs and rent free incentives of $170-180 million; and excluding any further transactions.

 

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