Our strategy

Dexus’s strategy is to deliver superior risk-adjusted returns for investors from high quality real estate in Australia’s major cities.

Delivering superior risk-adjusted returns means outperforming the relevant three and five year benchmarks in each market in which Dexus owns or manages properties while providing Dexus Security holders with sustainable and growing distributions.

We have two strategic objectives that underpin this strategy:
  • Leadership in office: being the leading owner and manager of Australian office property
  • Funds management partner of choice: being the wholesale partner of choice in Australian property

Leadership in office is an aspiration that is supported by our scale. As the largest office owner and manager in Australia, we have scale that provides many advantages.

Our scale supports the generation of investment outperformance, through providing valuable customer insights and the opportunity to invest in people, systems and technologies that enhance our customers’ experience. It also enhances our ability to find the ideal workspace solution for customers and generates cost efficiencies.

Our objectives of leadership in office and funds management partner of choice complement each other. Our success in the office sector has enabled Dexus to attract investment partners not just in office, but also in the industrial, and healthcare sectors, in turn providing the opportunity to drive investment performance for those clients.

To be globally recognised as Australia’s leading real estate companyTo deliver superior risk-adjusted returns for investors from high quality real estate in Australia’s major citiesVisionStrategyStrategic objectivesLeadership in officeFunds management partner of choiceBeing the wholesale partner of choice in Australian propertyBeing the leading owner and manager of Australian office property
How our business creates value

Our strategy is underpinned by our business activities of developing, managing and transacting properties.

To generate superior risk-adjusted returns for investors it is necessary that for each asset we own or manage, we maximise cash flow and unlock value over the investment lifecycle.

We do this through applying our transactional, asset and property management expertise to drive earnings and create value across three areas of focus:
  • Property portfolio - the largest driver of value and contains the Dexus office and industrial portfolios
  • Funds Management - provides access to wholesale sources of capital and a steady annuity-style income stream
  • Trading - packaging of investment opportunities to generate trading profits
What sets Dexus apart?
  • High performing, engaged and diverse workforce
  • Quality real estate portfolio across key Australian cities
  • Funds management business with access to diverse sources of capital
  • Pipeline of development opportunities to create value over the long term
  • Customer centric focus
These overarching activities drive earnings and create value across our key earnings driversProperty portfolioFunds managementTradingDevelopingUnlocking value from existing and acquired assetsAcquiring and selling propertiesUtilising asset and property management expertise to maximise the AFFO yield of stabilised assetsTransactingManaging
Long-term value creation

To support long-term value creation, we consider corporate responsibility and sustainability an integral part of our business activities. Our approach supports our strategy through the overarching goal of delivering sustained value for all stakeholders. The outcomes we seek to achieve are as follows:

infographic2Future Enabled CustomersPreparing our customers for the future through enabling enhanced productivity and supporting future growthNurturing well-connected, prosperous and supported communities in and around our buildingsOptimising the environmental performance and resilience of our buildingsEnhancing the wellbeing of our people and those in our propertiesPlaying a leading role in shaping Australia’s cities for the future as desirable places to work, live and playStrong CommunitiesLeading CitiesEnriched EnvironmentThriving People
To learn more about our approach to managing these areas as well as our FY18 achievements and performance visit our website

Performance against strategy

We achieved strong performance against our strategic objectives and key focus areas, delivering sustained value for Security holders.

Leadership in office

Dexus’s owned and group office portfolios achieved IPD outperformance over the 1, 3 and 5 years to 31 March 2018. Supporting our strategic objective of leadership in office, leasing success enabled us to maintain high portfolio occupancy and lock in future income streams across the development pipeline. From a development perspective, two office projects were activated in Melbourne and Brisbane, and we successfully leased1 51% of the space at 240 St Georges Terrace in Perth, where development works commenced in July 2018.

Funds management partner of choice

Supporting our strategic objective of being the wholesale partner of choice in Australian property, we achieved strong performance for our wholesale investors and clients, with DWPF outperforming over 1, 3, 5, 7 and 10 year time periods. In addition, the first round equity raise for the Healthcare Wholesale Property Fund was completed. The $2.0 billion funds management development pipeline was progressed, and a number of transactions were undertaken to meet our clients’ investment objectives.

Dexus office portfolio performance vs IPD2
1 year3 years5 yearsDexus portfolioDexus Group portfolioIPD16.
Third party funds under management

We achieved strong outcomes across our key focus areas of Customer, People and Environment. These results assist us in fulfilling our strategic objectives and delivering sustained value for Security holders.

Untitled-33Improved overall customer Net Promoter Score to CustomersPeopleEnvironmentImproved customer satisfaction score to Workplace Gender Equality Agency recognised Dexus as an Employer of Choice forImproved employeeengagement score to Achieved Launched new goal to achieve ranking in global listed oce category and 3rd overall in the 2017 GRESB surveycarbon emissions across the group’s managed property portfolio by 2030+328.3/10Gender Equality87%1stNet Zero
Creating value from earnings drivers

The FY18 contribution for our earnings drivers and outlook for FY19 is outlined below.

infographic4TradingFunds managementProperty portfolioDriverFY18 contributionFY19 outlookProperty AFFOof $568.7 million4.5% oce LFL income growth3.0% industrial LFL income growth4-5% oce LFL income growth2.5-3.5% industrial LFL income growthFFO of $52.5 millionTrading profits of $36.6 million from the sale of 105 Phillip Street and 140 George Street, ParramattaFFO broadly in line with FY18Trading profits of $35-40 million455
  1. Including Heads of Agreement signed post 30 June 2018, with 57% of the impending Woodside vacancy now solved.
  2. As at 31 March 2018.
  3. Net Promoter Score (NPS) is calculated as the difference between the percentage of Promoters and Detractors. The NPS is expressed as an absolute number between -100 and +100.
  4. Adjusted funds from operations.
  5. Net of tax.
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