Why invest in Dexus
Dexus is one of Australia’s leading fully integrated real estate groups, managing a high-quality Australian property portfolio valued at $44.3 billion
Delivering quality, sustainable returns for investors
As property innovators, we are deeply committed to working with our customers to provide spaces that engage and inspire, as well as delivering quality, sustainable returns for our investors. Delivering to the needs of our customers and the strength and quality of our relationships will always be central to our success.
We invest only in Australia and directly own $18.4 billion of properties while managing a further $25.9 billion of properties on behalf of third party capital partners. The group’s $17.7 billion group development pipeline provides the opportunity to grow both portfolios and enhance future returns.
Our revenues are built from property
The majority of our earnings are derived from rental income received from our Australian property portfolio and investments valued at $18.4 billion. Our portfolio is predominantly weighted to the eastern seaboard CBD office markets, where vacancy is at low levels and the supply pipeline over the next few years is modest. Our funds management business provides Dexus with a steady income stream driven by management fees from the $25.9 billion of assets under management on behalf of third party capital partners.
We actively seek to optimise returns
As active asset managers, we are constantly evaluating opportunities to optimise the performance of the properties we own and manage. This approach has assisted us in maintaining high office portfolio occupancy rates over time. Enhancing the predictability of our returns, our lease terms generally contain fixed annual increases of between 3%-4%.
Long-term value creation
Our investment strategy is focused on the long term. Across the group, we manage a development pipeline valued at $17.7 billion which is purposefully created to deliver future potential revenue streams while adding further depth and flexibility to the spaces we can offer our customers. We add value through:
Dexus’s development pipeline
Enhances portfolio quality and returns with target year-one yields and project internal rate of return generally at more favourable metrics than what can be achieved through direct acquisition
Dexus’s trading pipeline
Promotes financial value creation through developing, acquiring and repositioning assets to sell for a profit. Dexus has strong track record in delivering trading profits for investors
Funds management development pipeline
Provides organic growth in assets under management while enhancing the third party funds management portfolio's quality and returns, In addition, it enhances Dexus's future revenue potential
- Delivered a compound annual growth rate (CAGR) in distribution per security of 5.5% from FY12 to FY21 with a target for Adjusted Funds From Operations (AFFO) per security growth of 3-5% through the cycle
- Target return on contributed equity (ROCE) of 7-10% p.a. through the cycle
Strong Balance Sheet
- We aim to maintain a strong balance sheet through conservative financial and operational risk management
Financial Risk Management
- Strong investment grade credit rating of ‘A-‘ from S&P and ‘A3’ from Moody’s
- Gearing (look-through) of 26.9%, below 30-40% target range
- Diversified mix of debt facilities with weighted average maturity of debt of 5.5 years
- Distribution policy aligned with free cash for which AFFO is a proxy
Operational Risk Management
- Dexus adheres to strict investment criteria for acquisitions, divestments and development
- Up to 15% of funds under management limit on capital deployed into development/trading opportunities
- Lean Management Expense Ratio (MER) of 34bps
Information as at 30 June 2022 unless otherwise stated and past performance is not an indication of future performance.
- This information is issued by Dexus Funds Management Limited (DXFM) in its capacity as responsible entity of Dexus (ASX: DXS). It is not an offer of securities for subscription or sale and is not financial product advice.
- The information including, without limitation, any forward-looking statements or opinions (the Information) may be subject to change without notice. To the extent permitted by law, DXFM, Dexus and their officers, employees and advisers do not make any representation or warranty, express or implied, as to the currency, accuracy, reliability or completeness of the Information and disclaim all responsibility and liability for it (including, without limitation, liability for negligence). Actual results may differ materially from those predicted or implied by any forward-looking statements for a range of reasons outside the control of the relevant parties.
- The Information should not be considered to be comprehensive or to comprise all the information which a Dexus security holder or potential investor may require in order to determine whether to deal in Dexus stapled securities. This information does not take into account the financial situation, investment objectives and particular needs of any particular person.
- The repayment and performance of an investment in Dexus is not guaranteed by DXFM, any of its related bodies corporate or any other person or organisation.
This investment is subject to investment risk, including possible delays in repayment and loss of income and principal invested.
For more information on investing with Dexus, please contact us and our team who will assist with your enquiry.