DEXUS PROPERTY GROUP S EPTEMBER 2013 QUARTERL Y UPDATE DEXUS Funds Management Limited ABN 24 060 920 783 Slide 1 DEXUS Property Group September 2013 Quarterly Update AFSL 238163 as responsible entity for DEXUS Property Group
AGENDA Overview Darren S teinberg Capital management Michael Christensen Portfolio update Kevin George, Richard Garing, Andy Collins, Mark Cuddy, S cott Travers, Amanda Kenny S trategy – core capabilities Jim Jones, Joseph S tokes Market outlook Peter S tudley S ummary Darren S teinberg Slide 2 DEXUS Property Group September 2013 Quarterly Update
OVERVIEW Key achievement s for t he quart er ended 30 S ept ember 2013 Capital Third party funds Property portfolio Transactions management management CPA 30.9 % DWPF 67,592 sqm Gearing 14.9% economic interest, outperformed its Leased in total 1 benchmark to 30 Sep 13 lodged DXS/ CPPIB proposal $71.5 m 10.2 % $26 m 74 m securities bought back Non-strategic properties Office total return Partnered with AIP on a divested 2 since 1 July 2013 further property 3 12 months to 30 Sep 13 1. Includes Heads of Agreement (HOA). 2. 10-16 South Street, Rydalmere ($43.25m) and 40 Talavera Road, Macquarie Park ($28.2m). 3. Forecast completion price at 100% . Slide 3 Slide 3 DEXUS Property Group September 2013 Quarterly Update DEXUS Property Group September 2013 Quarterly Update
TITLE SLIDE HEADER CAPITAL MANAGEMENT Slide 4 DEXUS Property Group 2013 Half Year Results Presentation — DEXUS Property Group September 2013 Quarterly Update Slide 4
CAPITAL MANAGEMENT Updat e $245 million (5% ) buy-back announced 2 July 13 Key metrics 30 Sep 13 30 Jun 13 Gearing 30.9% 29.0% — $75.3 million or 73.7 million securit ies bought back t o dat e, 2 1 Cost of debt 5.8% 5.9% 31% complet ed at weight ed average price of $1.0211 Duration of debt 5.2 years 5.4 years Cost of debt was 10bps lower driven by reduced floating rates Headroom $0.2bn $0.3bn Debt duration remains above 5 years S &P/ Moody’ s credit rating BBB+/ Baa1 BBB+/ Baa1 — Issued short -t erm commercial paper – new low cost funding, access new invest or base Diversified mix of facilities — Complet ed part ial buy-back of short -dat ed Medium Term Not es CP Debt maturity profile 4% 144A 10% A$m Bank - 1,000 unsecured 51% 800 US PP 16% 600 Bank 400 DCM MTN 200 19% - Dec-14 Jun-15 Dec-15 Jun-16 Dec-16 Jun-17 Dec-17 Jun-18 FY19+ 1. Weighted average across the year to 30 June 2013, inclusive of fees and margins on a drawn basis. 2. As at 30 September 2013. Slide 5 DEXUS Property Group September 2013 Quarterly Update
TITLE SLIDE HEADER PORTFOLIO UPDATE Slide 6 DEXUS Property Group 2013 Half Year Results Presentation — DEXUS Property Group September 2013 Quarterly Update Slide 6
PORTFOLIO UPDATE Tot al DXS port folio Total DXS portfolio composition 84 1.8 million sqm 4.8 stars Office Properties Net lettable area NABERS Energy $5.7bn 78% $7.3bn 94.5 % 4.7 years 2 7.6 % Industrial Occupied 1 WALE Average cap rate $1.6bn 22% 1. By area at 30 September 2013. Occupancy by income at 30 September was 94.8% . 2. By income. Slide 7 Slide 7 DEXUS Property Group September 2013 Quarterly Update DEXUS Property Group September 2013 Quarterly Update
PORTFOLIO UPDATE Office port folio — solid operat ing performance Achievements DXS office portfolio 30 Jun 13 30 Sep 13 Occupancy by area 94.7% 94.4% Achieved total return of 10.2% including 3.0% capital Occupancy by income 95.0% 94.6% return Number of leasing transactions 1 45 130 Solid leasing activity securing 32,557sqm 1 of space Average incentive 16.7% 12.2% across 45 transactions Average rental increase 4.5% (0.1% ) Retention rate YTD 80% 72% — IBM ext ended lease over 11,485sqm at S out hgat e, Melbourne Retention rate 12 months 72% 72% for furt her five years unt il December 2020 Weighted average lease expiry 3 4.9 years 5.0 years — Lumley General Insurance ext ended lease over 5,283sqm at Total return – 1 year 10.2% 10.6% 88 S hort land S t reet , Auckland unt il Oct ober 2020 — S ecured seven new or renewed leases t ot alling 2,613sqm at Flinders Gat e, Melbourne on average t erms of 3.1 years — S ecured six new or renewed leases t ot alling 2,011sqm at 39 Mart in Place, S ydney on average t erms of 6.7 years Increased occupancy 2 to 94.7% Valuation uplift of $13.9m secured from two properties, generating a 3.0% increase on prior book values 1. At 100% including HOA. 2. By area. 3. By income. Slide 8 DEXUS Property Group September 2013 Quarterly Update
PORTFOLIO UPDATE Office port folio — lease expiry profile Lease expiry profile by income as at 30 September 2013 14% 1 13.2% 12% 11.8% 1 10.7% 10% 9.6% 9.5% 9.4% 8% 6% 1 1 5.6% 5.4% 5.0% 4.8% 4% 2% 0% Vacant FY14 FY15 FY16 FY17 FY18 1. 30 June 2013. Slide 9 DEXUS Property Group September 2013 Quarterly Update
PORTFOLIO UPDATE Office port folio — case st udy 45 Clarence Street, Sydney Achieved total return of 12.1% for 12 months to 30 Sep 13 Leasing brought in-house in Sep 12 Occupancy 1 increased by 10.5% — t o 99% Utilised strong tenant and market relationships to relocate tenants from suburban markets and B-grade properties Secured three new tenants on long-term leases Extended lease tenure from 2 to 5 years with a key tenant Valuation increased $12.9 million or 5.0% at 30 Sep 13 45 Clarence Street, Sydney NSW 1. By area. Slide 10 Slide 10 DEXUS Property Group September 2013 Quarterly Update
PORTFOLIO UPDATE Office port folio – case st udy Newly acquired Sydney CBD office properties Secured a total of 23 new tenants 1 over 9,839sqm across three properties since acquisition Occupancy 2 increased through active management — 39 Mart in Place from 74% t o 94% — 50 Carringt on S t reet from 61% t o 82% — Grosvenor Place from 86% t o 89% Average WALE 3 increased 4.4 years to 5.0 years Enhanced quality of portfolio through $6.3 million refurbishment of 50 Carrington Street Grosvenor Place, 225 George Street, Sydney NSW 1. Across the three Sydney CBD properties acquired during the 12 months to 30 September 2013. 2. By area and excludes Martin Place Shopping Circle. 3. By income across the three properties acquired. Slide 11 Slide 11 DEXUS Property Group September 2013 Quarterly Update
PORTFOLIO UPDATE Indust rial port folio Achievements DXS industrial portfolio 30 Jun 13 30 Sep 13 Occupancy by area 94.3% 95.9% Achieved total return of 8.9% Occupancy by income 94.3% 96.1% Solid leasing result in a challenging market Number of leasing transactions 1 16 122 7.4% Average incentive 7.9% — Leased 35,035sqm 1 across 16 transactions Average rental increase 1.1% (2.4% ) – Cot t on On signed HOA over 12,246sqm at Wacol for 10 years Retention rate YTD 59% 70% Retention rate 12 months 74% 70% – Allied Pickfords renewed it s lease over 8,672sqm at Weighted average lease expiry 4 3.9 years 4.1 years Foundat ion Place, Greyst anes for a furt her seven year t erm Total return – 1 year 8.9% 8.8% – Lesandu renewed it s lease over 3,330sqm at Art hur S t reet , Flemingt on for a furt her one year t erm Occupancy 2 down slightly to 94.3% Includes complet ed 11,854sqm 3 speculat ive development at Lavert on Nort h — WALE 4 down slightly to 3.9 years — Impact ed by short t erm deals at Gillman and Axxess Corporat e Park 1. At 100% including HOA. 4. By income. 2. By area. 3. DXS share 5,927sqm. Slide 12 DEXUS Property Group September 2013 Quarterly Update
PORTFOLIO UPDATE Quarry at Greyst anes 100% occupancy at completed developments DXS 50% / AIP 50% DXS 50% / AIP 50% future development DXS land future development Makita – owner occupier Slide 13 Slide 13 DEXUS Property Group September 2013 Quarterly Update DEXUS Property Group September 2013 Quarterly Update
TITLE SLIDE HEADER STRATEGY Slide 14 DEXUS Property Group 2013 Half Year Results Presentation — DEXUS Property Group September 2013 Quarterly Update Slide 14
STRATEGY Core capabilit ies – Plat form by DEXUS Focus on delivering a positive experience for our tenants/ customers through health and well-being campaigns, increased convenience and social networking activities — Digit al screens, car park signage and lift wrap advert ising — Nespresso coffee samples — Office foyer brand awareness campaigns (Maserat i, S amsonit e, Bupa) — Pop-up st ores Other tenant/ customer initiatives — Hot el-st yle concierge in key office buildings — Improved end-of-t rip facilit ies Generating new revenue streams Utilising space not typically considered lettable Slide 15 Slide 15 DEXUS Property Group September 2013 Quarterly Update
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