HY20 Results release

6 February 2020

2020 Half year results – Continuing to benefit from office occupier and investor demand

Dexus today announced its result for the half year and upgraded its guidance for distribution per security growth from circa 5% to circa 5.5% for FY20. 

Dexus Chief Executive Officer, Darren Steinberg said: “We continue to make significant progress towards our vision of being globally recognised as Australia’s leading real estate company. Urbanisation continues to drive demand for quality space in Australian cities and the growth in pension capital is increasingly chasing the favourable returns that real estate can offer. We are responding by remaining focused on enhancing the attractiveness of our properties, while leveraging our market intel and capabilities to create spaces where our customers want to be, while at the same time partnering with like-minded third party capital to invest alongside in our core markets. 

“For the first six months of the financial year we have continued to benefit from office occupier and investor demand for quality properties in our core markets, achieving record Melbourne rents and strong asset valuation uplifts. Our funds business has seen a significant increase in interest from offshore investors seeking to invest directly in quality office properties. These factors combined with recent transactional evidence and the lower for longer interest rate environment, reinforce our view that there will be further increases in asset values.”

FINANCIAL HIGHLIGHTS 

• Net profit after tax of $994.2 million, up 36.9% primarily due to net revaluation gains of investment properties being higher than those recognised in the previous corresponding period
• Underlying Funds From Operations¹ (FFO) per security of 31.9 cents, up 1.9% on the previous corresponding period
• Distribution per security of 27.0 cents, consistent with the previous corresponding period
• NTA² per security increased by 5.9% over the six-month period to $11.10 
• Gearing (look-through)³ remains conservative at 25.5%
• Successfully completed the issue of $200 million of Medium-Term Notes with a 10-year tenor and post 31 December 2019, completed a further $500 million issue of Medium-Term Notes with a 12-year tenor at an attractive all-in rate 

OPERATIONAL HIGHLIGHTS 

• Maintained high occupancy⁴ of 97.4% for Dexus office and 96.0% for Dexus industrial portfolios 
• Completed the 240 St Georges Terrace development in Perth and progressed the group’s $11.2 billion development pipeline 
• Dexus Wholesale Property Fund (DWPF) raised circa $180 million of new equity and continued to outperform its benchmark across all time periods
• Exercised the second tranche rights for GIC to acquire an additional 24% interest in the Dexus Australian Logistics Trust (DALT) core portfolio⁵ 
• Realised $27.8 million of trading profits (net of tax), driven by the sale of the first tranche of 201 Elizabeth Street in Sydney 
• Recognised as the Global Industry Leader for the Real Estate Sector by DJSI, Global Sector Leader in GRESB and achieved A list status in the latest CDP results