05 May 2020

COVID-19 and March 2020 quarter portfolio update

5 May 2020

COVID-19 and March 2020 quarter portfolio update

Dexus today provides the following update on its COVID-19 response and announces its property portfolio update for the quarter ended 31 March 2020.

Darren Steinberg, Dexus Chief Executive Officer said: “The COVID-19 pandemic has had a profound impact on the economy and the real estate sector, and we acknowledge that no business, including Dexus, will be immune from the impacts of this crisis.

“Fortunately, as at 31 March 2020 our property portfolio is in strong shape and we’ve entered this crisis in a robust position with high portfolio occupancy, limited new supply in our key CBD office markets and a strong balance sheet.

“We know this is a challenging time for many of our valued customers (tenants) and appreciate we are in this together. We are committed to helping our customers and consistent with the government’s Code of Conduct, our focus is on prioritising assistance to support the viability of our small business customers.

“In response to the current environment brought on by COVID-19, we have implemented a broad range of cost reduction measures that are prudent for our business.

“Unfortunately, a number of roles will be impacted, largely as a result of the loss of the Australian Mandate portfolio managed on behalf of the NSW State Treasury Corporation, which will result in some redundancies.”

Dexus has also implemented annual leave initiatives, a freeze on recruitment and non-essential consultancy spend and temporary reductions in remuneration.
The temporary reductions in remuneration affect director and executive level roles and have been approved by the Board for an initial three month period effective 1 April 2020 which will be reviewed at the end of June 2020. These include a:

  • 15% reduction in base fees for Non-Executive Directors
  • 15% reduction in base salary for the CEO
  • 10% reduction in base salary across all other executive level roles

On 26 March 2020, Dexus withdrew its FY20 full year guidance for distribution per security growth and the detailed assumptions associated with this guidance. At this time, Dexus continues to assess the impact of COVID-19 on its operating environment including the assistance that it may need to provide to its tenant base to ensure the portfolio is well placed to perform when this event passes.

March 2020 quarter highlights

  • Leased 33,284 square metres1 of office space across 62 transactions in the core portfolio and at development projects underway or completed, with office portfolio occupancy remaining high at 97.2%
  • Leased 21,094 square metres1 of industrial space across 22 transactions, with industrial portfolio occupancy remaining strong at 96.0%
  • Post 31 March 2020, Dexus announced the settlement of GIC’s additional 24% investment of $366.1 million in the Dexus Australian Logistics Trust in addition to the establishment of a new Joint Venture with GIC that had exchanged contracts to acquire a 50% interest in Rialto Towers, 525 Collins Street, Melbourne for $644 million2
  • At 30 April 2020, Dexus had a debt duration of 7.1 years, $1.7 billion of cash and committed undrawn bank facilities available and circa $400 million of debt maturing in late FY21. Dexus’s proforma gearing3 (look-through) is 25.4% which is below its 30-40% target range
  • Post 31 March 2020, Central Place Sydney, a major commercial development underpinning the delivery of the Sydney Innovation and Technology Precinct, progressed to Stage 3 under the NSW Government’s Unsolicited Proposal process
  • Dexus was named on the CDP Climate A List for 2019, solidifying its position as one of Australia’s leading sustainable investments of choice for real estate and was also recognised by the Workplace Gender Equality Agency being awarded an Employer of Choice for Gender Equality (EOCGE) citation for 2019-20





Rowena Causley

Head of Listed Investor Relations

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