Investors

Investors

MARKET LEADERSHIP, SUSTAINABLE GROWTH, FINANCIAL PERFORMANCE AND CAPITAL MANAGEMENT 

FY14 PERFORMANCE AGAINST COMMITMENTS

= Achieved , = Not achieved, = Underway

COMMITMENT	STATUS	FY14 ACHIEVEMENTS
INVESTORS
Deliver FFO earnings of 8.15 cents per security		Delivered FFO of 8.34 cents per security exceeding the 8.15 cents per security Refer to the CEO's report and Financial Highlights sections
Deliver a return on equity of 9-10%		Delivered return on equity (ROE) of 8.7%, slightly below the target range of 9-10% through the cycle (including the impact of the CPA transaction ROE was 6.7%) Refer to the CEO's report and Financial Highlights sections
Deliver long term top quartile return performance relative to Dexus's target peer group, industry benchmarks and global indices		Deliver long term top quartile return performance relative to Dexus's target peer group, industry benchmarks and global indices Refer to the CEO's report
Capital management
Maintain strong credit rating metrics		Achieved credit ratings upgrades from Standard & Poor's and Moody's Refer to the Capital Management section
Optimise cost of debt		Reduced cost of debt by 50bps to 5.4% Refer to the Capital Management section
Utilise on-market securities buy-back, where accretive to investor returns		Acquired 73.7m Dexus securities at an 8.1% discount to NTA through an on-market securities buy back, providing accretive investor returns Refer to the Capital Management section
OFFICE AND INDUSTRIAL
Deliver like-for-like income growth of circa 4% in the office portfolio		Delivered 3.6% like-for-like income growth in the office portfolio, in line with circa 4% target Refer to Dexus Office and Financial Highlights sections
Reduce the Sydney office portfolio lease expires in FY15 and FY16 to under 7.5% and 10.0% respectively		Reduced Sydney office portfolio lease expiries to 7.5% for FY15 and 10.4% for FY16 relative to the 7.5% and 10.0% respective targets Refer to Dexus Office section
Deliver like-for-like income growth of circa 2% in the industrial portfolio		Delivered 1.5% like-for-like income growth in the industrial portfolio, marginally below the 2% target Refer to Dexus Industrial and Financial Highlights sections
Deliver over 75,000sqm of industrial developments and complete over 65,000sqm of industrial development leasing		Delivered 90,214sqm of industrial development and secured 41,034sqm of industrial development leasing Refer to Dexus Industrial and Developments sections
Deliver trading profits of circa $4-5m		Delivered $4.3m in trading profits within the targeted range of $4?5m Refer to the Trading section
Generate additional income of $1.5m from alternative income opportunities		Generated $0.7m of additional income through the PLATFORM by Dexus initiative, below the $1.5m target Refer to the Dexus Office section
Maintain a focus on selectively divesting non-strategic properties when supported by investment fundamentals		Selectively divested $588m of properties Refer to the Dexus Office and Dexus Industrial sections
THIRD PARTY FUNDS MANAGEMENT
Continue to drive the performance of capital partners		DWPF achieved top quartile performance over 3 and 5 years and Dexus continued to deliver on its capital partners' investment objectives Refer to the DWPF section
Seek further investment opportunities with capital partners		The Group acquired 30 properties for $2.3bn on behalf of its capital partners and in line with its investment objectives Refer to the Third Party Funds Management, Retail and DWPF sections
Attract additional sources of capital for long term co-investment		Dexus secured two new capital partners for long term co-investment Refer to the Delivering on Strategy, CEO's report and Third Party Funds Management sections

Dexus PORTFOLIO SNAPSHOT

1. Reduction is due to the sale of the US and European portfolios.
2. 7.68% on a like-for-like basis excluding discontinued operations.
3. Industrial US west coast portfolio only at FY11.

*The Industrial US portfolio was completely sold as at 30 June 2013.

COMMONWEALTH PROPERTY OFFICE FUND TRANSACTION

The Commonwealth Property Office Fund (CPA) transaction leveraged the Group's core capabilities across many areas of the business and increased the scale of the Dexus office portfolio to $7.7 billion and total office properties under management to $11.9 billion.

Dexus identified value in CPA in late FY13, progressively acquiring units and then announcing a 14.9% interest in CPA via an efficient derivative structure in July 2013.

Recognising the benefits and synergies of the properties in the CPA portfolio, Dexus formed a partnership with Canada Pension Plan Investment Board (CPPIB) (the Consortium) in October 2013 to launch a proposal to acquire the remaining units in CPA.

Dexus undertook due diligence and, following an offer from a competing party, the Consortium's initial proposal developed into an off-market takeover offer (Dexus Offer) in December 2013. The Dexus Offer gained the endorsement of CPA's responsible entity, Commonwealth Managed Investments Limited (CMIL).

In January 2014 the Consortium entered into an agreement to sell four of the 25 CPA properties to a wholesale fund associated with the competing party for $679 million, reducing the likelihood of the competing party's offer being increased.

The Dexus Offer gained the acceptance of more than 90% of CPA unitholders in March 2014, enabling Dexus to become the responsible entity and allowing the Consortium to commence compulsory acquisition of the remaining CPA units, resulting in the creation of the Dexus Office Partnership.

As a result of the CPA transaction, Dexus manages 24% of prime grade property in Sydney's CBD and has a strong presence in the core CBD office markets of Melbourne, Brisbane and Perth.

Dexus successfully completed the transition of asset and facilities management systems for each of the 21 remaining CPA properties onto the Group's platform in July 2014.

1. Forecast 10 year unlevered Internal Rate of Return on properties acquired.

FINANCIAL HIGHLIGHTS

1. Adjusted for cash and for debt in equity accounted investments. Refer to glossary for gearing definition. For more financial information refer to the 2014 Annual Report.

Dexus PERFORMANCE AGAINST A-REIT INDEX

DXS total security holder return

Capital management

1. Weighted average across the period, inclusive of fees and margins on a drawn basis.
2. Adjusted for cash and for debt in equity accounted investments. Refer to glossary for gearing definition.
3. Undrawn facilities plus cash.

Debt maturity profile¹

1. Including domestic MTNs in equity accounted investments.

Diversified mix of debt¹

1. Including domestic MTNs in equity accounted investments.

INTEREST RATE HEDGING MATURITY PROFILE

INTEREST RATE HEDGING PROFILE

1. Average amount during the period.
2. Gross fixed coupon debt less the amount converted to floating rate basis via coupon-matched swaps.
3. Weighted average rate of fixed debt, swaps and caps for the period. Caps included at a rate equal to the lower of cap strike and forecast floating rate for the applicable period.

DEBT FACILITIES¹

1. Debt facilities do not include $150m of Dexus forward start facilities and Medium Term Notes in an equity accounted investment: A$101.1m March 2016, A$73.6m December 2019, A$11.0m December 2022.
2. 144A and USPP amount shown at the cross currency swap contract rate.
3. USPP maturities: US$78m December 2014, US$11m March 2015, US$19m December 2016, US$22m March 2017.
4. Maturity date of commercial paper standby facility.