Dexus Property Group post strong 2016 financial result

DEXUS Property Group (DEXUS) has posted a strong 2016 financial result.

Dexus are Australia's largest office landlord with 1.8 million sqm of office space under management.

They have grown their third party funds from $5.6 billion in FY12 to $11.2 billion.

“Four years ago we reset our strategy to focus our business on Australian office property and third party funds management," said DEXUS CEO Darren Steinberg.

"Over the past four years, we have improved our efficiency reducing our Management Expense Ratio from 67 basis points to 35 basis points.

"At the same time, we have continued to maintain a strong balance sheet, and with recent divestments this further strengthens our position.

“We have fostered a culture of innovation and continuous improvement, invested in our people to build their capabilities and enhanced our customers’ experience, delivering new products and services.

“We have expanded our development pipeline and identified trading opportunities, positioning the portfolio for future growth.

Darren said DEXUS are expecting to deliver a solid result in FY17 despite recent divestments.

"We expect underlying FFO per security to grow by 3.0-3.5 percent and distribution per security by 2.5-3.5 percent.”

DEXUS FY17 Highlights

Funds from Operations1 (FFO) of $610.8 million, up 12 percent on FY15

Adjusted Funds from Operations2 (AFFO) of $413.9 million, up 12 percent on FY15

Statutory net profit of $1,259.8 million, up 104 percent on FY15, driven primarily by revaluations

FFO per security of 63.1 cents and distribution per security of 43.51 cents, both up 6 percent on FY15

Return on Equity3 of 19.3 percent and an average of 12.2 percent over the past four years

Group Management Expense Ratio4 of 35bps, down 6bps from 41bps at FY15

Net tangible assets (NTA) per security of $7.53 at 30 June 2016, up 13 percent or 85 cents from 30 June 2015

Gearing5 of 30.7 percent8