Dexus

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DEXUS Property Group’s statutory net profit fell more than 10 percent for the half-year ended December 2016 from the previous corresponding period, though the company raised its market outlook for the 2017 financial year.
The group, which invests directly in Australian office and industrial properties, said its development and leasing activities offset the impact of asset sales.
DEXUS’s underlying business (excluding trading profits) delivered FFO (funds from operations) per security of 29.7 cents, up 10.6% on the previous corresponding period. 
Statutory net profit after tax of $716.0 million was hurt by lower revaluations and lower trading profits which also drove down FFO, Adjusted Funds from Operations (AFFO) and distribution compared to the previous corresponding period, it said in an ASX release.
<img src="https://www.urban.com.au/images/2017/02/15/DexusFinResults.png" alt="">
The group said it settled on $688 million of asset sales, including the sale of 39 Martin Place, Sydney.
“We have significantly reduced our gearing as a result of the settlement of asset sales over the past six months,” said Alison Harrop, the chief financial officer. 
 <img src="https://www.urban.com.au/images/2017/02/15/DexusGearing.png" alt="">
Chief executive Darren Steinberg said: “Income growth from leasing activity and development completions during FY16 helped to offset the impact of recent asset sales, driving a solid underlying result.”
“We’ve progressed priority projects in our trading pipeline as well as opportunities to restock the future pipeline and we’re confident that the remaining forecast trading profits will be realised in the coming months, delivering on our FY17 target.” 
Dexus said it delivered “a strong” one-year total return of 13.9% across its office portfolio, helped by strong leasing deals in Sydney and gains from the sale of investment properties.  
It started construction of the core of 100 Mount Street, North Sydney and added new projects to the uncommitted development pipeline including 201 Elizabeth Street, Sydney.
Dexus has $22.7 billion of assets under management. The group manages an office portfolio of 1.7 million sqm primarily across Sydney, Melbourne, Brisbane and Perth. 
“While property fundamentals continue to improve in Sydney and Melbourne, we expect to see underlying valuation assumptions improving and further capitalisation rate compression for Prime properties over the next 12 months which will continue to support values in our key markets over 2017,” Steinberg said.
In summary, Steinberg was optimistic, saying Dexus has raised its market outlook for growth in underlying FFO per security from 3.0-3.5% to circa 4%, growth in FFO per security to circa 1% and distributions will be paid in line with free cash flow, delivering distribution per security growth of 3.5-4.5% for the 12 months ending 30 June 2017.
<img src="https://www.urban.com.au/images/2017/02/15/DexusPortfolio.png" alt="">
 
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Dexus first half profit falls 10 percent, hurt by lower revaluations

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Dexus has launched its new brand.
It is suggested the brand reinforces Dexus as a property group that is innovative and customer focused.
Darren Sternberg, Dexus chief executive officer, said it will take a phased approach to rebrand its buildings over the coming months.
"Our new brand has been created to represent who we are today and our future aspirations.
"Our new brand provides an opportunity to lift awareness, shift conversation and enhance value by demonstrating Dexus's point of difference in an undifferentiated market.
"We are redefining the work place through progressive thinking and the courage to innovate; listening, learning, understanding and responding; being active now and in the future; and making the complex simple.
"The core concept behind the brand is that we bring multiple perspectives together, and embrace life in full colour."
The brand video is available <a href="https://www.youtube.com/watch?v=nhJFkCUm8-A&amp;feature=youtu.be" target="_blank">here</a>.
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Dexus unveils its new brand

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Property group Dexus' suite strategy is paying off, with its Collins Street building in Melbourne experienced a surge in leasing deals.
There have been 20 transactions for a total of more than 7,000 sqm at 360 Collins Street during the past six months, with tenancies ranging from 190 sqm to 900 sqm, according to leasing agency Colliers International.
Recent deals include Eblueprint, which leased 321 sqm on level 12, WBP Property Group, which secured 373 sqm on level 15, and Hatch, which secured 288 sqm on level 11.
Colliers International’s Adam Davy, Ben Christie and Stephanie Hawkins secured the deals.
Dexus' suite strategy involves cutting up whole floors and refurbishing facilities to accommodate and attract a greater number and range of occupiers.
Hawkins said the upgrades were a key drawcard for new and existing tenants.
<img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2017/07/25/Dexus2.jpg" alt="">
In other deals, investor and media relations advisory firm Market Eye has taken a new lease for 240 sqm on level eight while iBuildNew has committed to 162sqm on level nine after the space was created in a subdivision for two larger leases to CH2M Hill and Intralink Wealth Management.
Level eight was divided to accommodate three tenants as part of the building’s suite leasing strategy, which was a selling point for Market Eye, Davy said.
Apt Wealth Partners has committed to 480 sqm, also on level eight, relocating from 411 Collins Street in a flight to quality.
Davy, who negotiated the five-year lease, said the onsite amenity for Apt Wealth Partners’ clients at 360 Collins Street drove the move to the A-grade asset.
“The building provides a grand new lobby, casual meeting areas, resort-quality end-of-trip facilities and new restaurants,” Davy said. 
“The floor was subdivided to accommodate Apt Wealth Partners’ specific leasing requirements,” he said.
Davy negotiated the deal at a record rental rate for the building.
Recently, Dexus also entered into an agreement to acquire the landmark heritage office building at <a href="https://www.realcommercial.com.au/property-offices-nsw-pyrmont-502222974" target="_blank">100 Harris Street</a> in <a href="https://www.urban.com.au/expert-insights/investing/72001-dexus-to-buy-iconic-pyrmont-building-for-327-5-million" target="_blank">Sydney’s Pyrmont for $327.5 million</a>, the largest office transaction in the suburb’s history.
 
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Tenants seek out Dexus' 360 Collins Street office development in Melbourne

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Dexus have purchased a South Granville infill site for $61.5 million.
Marketing agents Darren Curry and Ray Trimboli of Savills Australia have said it represents the largest 100% freehold land sale in Western Sydney of the year so far.
The 10-hectare site at 54-68 Ferndell Street was sold by a private vendor, Grand Sasanqua Pty Ltd, following an expressions of interest campaign with seven offers received.
Curry said Dexus have the intention of converting the area to incorporate up to 56,000 square metres of gross floor area.
“The site will give e-commerce companies a competitive edge for 'last mile' and 'just in time' delivery capability due to its prime location,” he said.
Trimboli said the property’s location as a major seling point and the site was one of the few remaining large-scale land-bank opportunities remaining in the area.
“The site is well positioned to get freight and product to the Sydney metro region, with less congestion compared to the many outlying industrial areas,” he said.
“Precincts such as Regents Park and Chullora hold a similar appeal for many occupiers.”
Curry said the strength of the Western Sydney industrial development market had been “well and truly tested”.
“These transactions have included Boral’s Greystanes sale to ISPT for $60million, a Goodman sale to Direct Freight Express for $30million at Oakdale, and now the $61.5million South Granville sale to Dexus,” he said.
“We expect the industrial land sales market to continue to perform highly in Sydney, as supply and demand forces are creating healthy competition among purchasers.
“Both owner-occupiers and developers are wishing to acquire zoned, serviced and well-positioned land within close proximity of major existing and under-construction infrastructure projects.”
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Dexus picks up South Granville infill site for $61.5 million

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Dexus and GIC, Singapore’s sovereign wealth fund, have joined forces for a new unlisted trust.
The circa $2 billion fund will be known as the Dexus Australian Logistics Trust (DALT) and will look to invest in logistics properties in Australia.
The venture will be with a $1.4 billion logistics portfolio of assets mostly located in Sydney and Melbourne.
The weighted average lease expiry of the portfolio is 5.3 years with occupancy at 98%.
DALT will also add three further sites with development potential and a total future completion value of $0.5 billion.
Subject to FIRB approval, GIC will be DALT’s foundation investor, taking an initial 25% investment in the core portfolio, with put and call rights to acquire an additional 24% by June 2020.
Lee Kok Sun, Chief Investment Officer, Real Estate, said: “This investment reflects GIC’s confidence in the long-term potential of Australia’s logistics sector.
“We believe the structural and consumption growth in Australia, particularly from favourable demographics and growth in e-commerce, will continue to drive demand for logistics properties.
“This portfolio of quality assets in strong locations is well-positioned to capitalise on this and generate steady income over the long term.
“We look forward to partnering Dexus, a leading manager and developer of industrial properties in Australia, to establish and scale this venture.”
4 Turnbull Close, Greystanes, NSW (pictured above)
<img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2018/11/26/27%20Distribution%20Drive%20Truganina%20VIC.jpg" alt="">
27 Distribution Drive, Truganina, VIC (pictured above)
<img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2018/11/26/50%20Foundation%20Road%20Truganina%20VIC.jpg" alt="">
50 Foundation Road, Truganina, VIC (pictured above)
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Dexus joins with Singapore sovereign wealth fund for logistics focused unlisted REIT

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Dexus made a half yearly net profit after tax of $726.4 million, down 27%, mainly due to net revaluation gains of investment properties being lower, according to their half year results.
The funds from operation, the more accurate measure for real estate investment trusts, was $353 million, up 9.8 per cent on the previous corresponding period.
They have restated a goal/guidance for distribution per security growth of circa 5% for FY2019.
Dexus Chief Executive Officer, Darren Steinberg said it had been a productive six-month period where the company added value through enhancing our development pipeline and attracting new investors to our funds management business.
"This has all been achieved while maintaining low balance sheet gearing."
“In our office portfolio we continue to outperform the MSCI office benchmark over one, three and five years through driving higher rents and lower incentives, particularly in Sydney which has been reflected in property valuations during the period."
“In our funds management business, we now have $15 billion under management with investors and partners that can invest alongside us through the cycle, reinforcing our objective of being the wholesale partner of choice in Australian property,” he concluded.
<img src="https://www.urban.com.au/images/2019/2/6/Dexus%20Office%20Portfolio.JPG" alt="">
Funds from Operations (FFO) reached $353.3 million, up 9.8% on the previous corresponding period.
Gearing was down to 23.7% from 24.1% at 30 June 2018.
There was a one-year unlevered total return of 13% in the Dexus office portfolio and 15.5% in the Dexus industrial portfolio
Office portfolio occupancy increased to 97.3% with Sydney office leasing spreads of +18%.
The group’s $5.2 billion development pipeline progressed, replenishing both the industrial and office development pipelines.
Dexus established a new circa $2 billion unlisted trust that invests in Australian logistics properties seeded from Dexus’s existing portfolio.
They delivered $34.7 million of trading profits (post-tax).
Dexus shares closed up 1¢ to $11.85 per security.
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Dexus net profit down 27% due to revaluation on investment properties

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Dexus has struck an agreement with Red Energy to supply their NSW building portfolio with renewable energy.
It claims it is Australia’s first supply-linked renewable Energy Supply Agreements (“ESA”).
Dexus, Australia’s largest office landlord, and Red Energy, which is 100% owned by Snowy Hydro, have signed a Memorandum of Understanding for a seven-year renewable contract, to commence from January 2020. 
Dexus will purchase renewable energy off-site to power the base building services of more than 40 buildings. 
This will be achieved through the procurement of renewable energy generation and presents a new lever for Dexus and the property industry to achieve net zero emissions. 
Dexus’ strategy aims to eliminate emissions from its portfolio and create value for Dexus’s customers and investors.
“This is a first for an Australian real estate investment trust and supports our ambition to achieve net zero emissions by 2030,” said David Yates, Executive General Manager for Sustainability at Dexus. 
“We have worked collaboratively with Red Energy to establish a new energy supply model which will deliver renewable energy sourced off-site. Importantly it provides long-term price certainty to insulate our customers from electricity market volatility, while driving down energy costs and supporting our collective carbon reduction goals.
“The ESA satisfies the demand from customers and investors for more reliable, environmentally responsible energy. 
“Over seven years, we expect to source more than 300 gigawatt hours (GWh) of renewable energy via this ESA, which is equivalent to the energy consumed by 38,000 households for a year.”
Paul Wall, Head of Group Sustainability and Energy at Dexus, said: “This agreement allows us to hedge a portion of our power price, providing a buffer against energy market uncertainty. The deal has been struck at below current market rates and leverages the large-scale generation certificates subsidies, resulting in a fixed price for 50% of our energy load over the next seven years. 
“This means we can pass the savings directly to our customers, while operating our buildings using a responsible, emission-free source of energy. 
“This new deal is expected to reduce the retail energy rate which we pass onto our customers through outgoings by more than 10% compared to existing contracted rates.” 
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Dexus signs renewable energy supply agreement 

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Dexus has begun construction on a development to tranform the MLC Centre precinct into a premier space in the heart of the Sydney CBD.
The circa $170 million project (artist rendition pictured in title) will deliver approximately 6,000 sqm of new and improved retail space across four levels and is supported by the existing office tower in Martin Place.
It follows just a few months after <a href="https://www.urban.com.au/expert-insights/investing/96483-dexus-take-control-of-mlc-centre" target="_blank">Dexus implemented a purchase right</a> over the remaining half of the MLC Centre that was <a href="https://www.urban.com.au/expert-insights/investing/94197-half-of-harry-seidler-s-mlc-centre-to-be-sold-by-gpt" target="_blank">first listed in January</a>.
The ASX-listed group already owned half of the building, and it is believed Dexus paid $800 million for the half previously owned by the GPT Group, which has a book value of $725 million.
The new retail offering will include, new luxury and premium retail to Castlereagh and King Streets, a new plaza food and beverage precinct fronting onto Martin Place and a mix of retail and service providers within the building core.
<img src="https://www.urban.com.au/images/2019/6/13/MLC%20Centre%20New%202.JPG" alt="">
Plus a new commercial tower entrance will be established from Castlereagh Street (artist rendition pictured above), improving connectivity for workers and visitors.
The redevelopment also includes plans to revive the Theatre Royal with Dexus entering into a 45 year lease with the NSW Government, paving the way for a private theatre operator to run the theatre.
The MLC Centre, originally designed by architect Harry Seidler, has been a key city landmark since 1978.
Harry Seidler and Associates Director Penelope Seidler said, “I am so excited about the design of the new works proposed for the MLC Centre. The integrity of Harry’s original architecture is to be re-established and contrasted with new geometries of internally illuminated glass. The MLC Centre will become the glowing core of the centre of Sydney.”
Project partners include Probuild (Builder), Woods Bagot (Architect) and Harry Seidler and Associates (peer review).
Throughout the development works the existing MLC Centre car park, food court, IGA Supermarket and several other retailers will remain open and in operation.
The redevelopment of the MLC Centre retail precinct is expected to be completed by the end of 2021. 
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Dexus begins construction on MLC Centre retail precint renewal, Sydney

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Dexus advises it will cease the management of the Australian Mandate, comprising a $1.6 billion property portfolio from June 30, 2020.
The diversified Australian Mandate comprises properties managed by Dexus on behalf of NSW Treasury Corporation (“TCorp”) for more than 30 years, and TCorp remains a long-term investor on the platform via other vehicles.
The Australian Mandate has achieved outperformance versus benchmark over 1, 3, 5, 7 and 10 years as at December 31, 2019. 
Dexus’s funds management business has achieved significant growth since FY12 and has recently attracted new like-minded partners such as GIC and M&amp;G Real Estate to invest alongside through the cycle.
There are currently several opportunities in the pipeline for Dexus to onboard investors with open investment periods and growth strategies.
The transition of the Australian Mandate is expected to have no impact on either Dexus's Adjusted Funds From Operations or distribution per security in FY20, with market guidance of distribution per security growth maintained at circa 5.5 per cent for the 12 months ended June 30, 2020.
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Dexus to end management of $1.6 billion Australian Mandate portfolio

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Parramatta City Council has given the green light to Dexus to develop a 33-storey office tower at 140 George Street, Parramatta adding to the growing number of office developments within Sydney’s fastest growing city.

The 138m tower will be located on the corner of George and Charles Streets, with the design seeking to capitalise on the site’s unique riverside location along a key stretch of the Parramatta River that contains the ferry terminal and provides views to the north over the river as well as back to Sydney’s CBD.

<figure><a class="colorbox colorbox-insert-image" href="https://res.cloudinary.com/dz9xllyip/image/fetch/q_auto:good/https://s3-ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public//pictures/article-images/37446032635_24ebaa980c_b.jpg" rel="gallery-all" title="140 George's street interface along Charles Street. Planning Image: Bates Smart"><img alt="" class="image-article-full-width-580px" height="488" src="/sites/urban.melbourne/files//styles/article_full_width_580px/public/pictures/article-images/37446032635_24ebaa980c_b.jpg?itok=ITXsquIT" title="140 George's street interface along Charles Street. Planning Image: Bates Smart" width="580"></a>

<figcaption>140 George's street interface along Charles Street. Planning Image: Bates Smart</figcaption></figure>140 George Street will deliver 45,700 sqm of A-Grade office space to the Parramatta office market, providing large, open, contiguous floorplates to maximise fit out flexibility, daylight access and views.

<blockquote>
This development will deliver a world-class office building and strongly supports Parramatta’s growth as a place to invest and to do business. Parramatta continues to attract quality tenants who are enticed by the city’s dynamic workforce, interconnected transport options and vibrant lifestyle offerings.

- Ross Du Vernet, Dexus Chief Investment Officer
</blockquote>

The Bates Smart design considers how the building could benefit the overall well-being of its occupants through the incorporation of high-quality services and exercise facilities such as a gymnasium and swimming pool. Retreat spaces are offered with outdoor terraces, a café and open spaces to capture the sun and fresh air.

<blockquote>
The architectural design proposal sets a framework for the building to establish high quality workplace environments through key design principles. This framework creates a comfortable and enjoyable workplace whilst ensuring long term commercial viability of the building.

The floors have excellent daylight penetration via a large facade to core wall ratio, long north facing orientation of floorplate; high levels of air quality through an advanced mechanical ventilation system; excellent outlook and views along Parramatta River to Sydney CBD; inter-floor connectivity through glazed firestair on the floorplate; multi-use spaces within the building with external terraces for relaxation and breakout areas which all contribute to creating a high level of occupant amenity.

- Bates Smart
</blockquote>

In addition, naturally-lit stairs are provided to enable easy movement between each floor. The slender floor plate with an end core will ensure all occupants have great access to natural light and the sweeping views across Parramatta.

At street level, the base of the tower will be activated with a range of facilities offering amenities accessible to all the occupants of the surrounding commercial precinct. 
With a focus on sustainability, the high-quality façade design balances access to natural daylight against thermal performance. The building will target a 5 Star Green Star Design and 5 star NABERS Energy performance.

Parramatta City Council aims to revitalise the river foreshore as part of a staged 20 year redevelopment. A river Quay with an upgraded ferry terminal, new outdoor entertainment area and terraces and a world class public square are part of a new vision to activate Parramatta River.

The draft ‘City River Strategy Master Plan’ encompasses 31 hectares on the Parramatta River foreshore and proposes major changes for the regeneration of Sydney’s second largest CBD. The River City Plan positions Parramatta River at the front and centre of Parramatta City Centre as redevelopment occurs.

The plan proposes a world-class public domain and a high-quality collection of new buildings that are seamlessly knitted together by a dense network of accessible and active spaces.

<figure><a class="colorbox colorbox-insert-image" href="https://res.cloudinary.com/dz9xllyip/image/fetch/q_auto:good/https://s3-ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public//pictures/article-images/parramatta_city_river_plan.jpg" rel="gallery-all" title="Vision for the Parramatta City River Strategy Design and Activation. Image: Parramatta City Council"><img alt="" class="image-article-full-width-580px" height="326" src="/sites/urban.melbourne/files//styles/article_full_width_580px/public/pictures/article-images/parramatta_city_river_plan.jpg?itok=zaGAWpVW" title="Vision for the Parramatta City River Strategy Design and Activation. Image: Parramatta City Council" width="580"></a>

<figcaption>Vision for the Parramatta City River Strategy Design and Activation. Image: Parramatta City Council</figcaption></figure><h2>PROJECT TEAM</h2>

<ul>
<li>Developer: DEXUS</li>
	<li>Architect: Bates Smart</li>
	<li>Project Management: Savills</li>
	<li>Structure: Enstruct</li>
	<li>Facade Engineer/ESD/Waste: Arup</li>
	<li>Traffic: Arup</li>
	<li>Building Services: NDY</li>
	<li>Fire Engineering: Defire</li>
	<li>Quantity Surveyors: Slattery</li>
	<li>Planning: Robinson Urban Planning</li>
	<li>Landscape Architect: Turf</li>
	<li>BCA Steve Watson &amp; Partners</li>
</ul>
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