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DEXUS — Capital/Financing Update 2015
Dec 10, 2015
64807_rns_2015-12-10_ee7c1218-46e2-4b04-8f1f-aa90ccc35905.pdf
Capital/Financing Update
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DEXUS Property Group (ASX: DXS)
ASX release
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11 December 2015
Significant increase in valuations across the DEXUS portfolio
DEXUS Property Group (DEXUS) today announced that 40 of its 102 properties, comprising 35 office properties and 5 industrial properties have been externally valued as at 31 December 2015, reflecting 79%[1] of the DEXUS portfolio. Combined with internal valuations across the remainder of the portfolio, this has resulted in an estimated $450 million or 4.8% increase on prior book values.
This valuation increase adds to the $40 million uplift booked on valuations as at 30 September 2015 and announced to the ASX on 22 October 2015.
Darren Steinberg, CEO of DEXUS said: “This valuation period has seen some considerable cap rate tightening flow through for quality properties driven primarily from recent comparable market transactions, combined with leasing success.
On average cap rates have tightened 40 basis points across the total portfolio to 6.48%, with the weighted average cap rate of the office portfolio tightening 41 basis points from 6.71% at 30 June 2015 to 6.30% at 31 December 2015. The industrial portfolio weighted average cap rated tightened 19 basis points from 7.77% to 7.58%.”
5 Martin Place, Sydney achieved a 28.0% increase in value following the completion of the development and further leasing success, increasing the valuation by $30.4 million and resulting in a 62 basis point tightening in the property’s capitalisation rate to 5.13%.
The 16.7% decrease in value at 240 St Georges Terrace in Perth reflected the impending vacancy by Woodside in 2019 and the soft market fundamentals of the Perth office market.
Strong leasing success, tenant retention and growth in market rents at 1 Farrer Place, Sydney has contributed to a $108.3 million or 14.9% increase in value and resulted in a 96 basis point tightening in the property’s capitalisation rate to 5.29%.
Darren Steinberg said: “Continued strong investment demand for quality properties combined with a low interest rate environment are expected to result in cap rates remaining around these levels for the foreseeable future.”
For further information please contact: Investor relations Media relations Rowena Causley T: +61 2 9017 1390 Louise Murray T: +61 2 9017 1446 M: +61 416 122 383 M:+61 403 260 754 E: [email protected] E: [email protected]
About DEXUS
DEXUS Property Group is one of Australia’s leading real estate groups, investing directly in high quality Australian office and industrial properties. With $19.6 billion of assets under management, the Group also actively manages office, industrial and retail properties located in key Australian markets on behalf of third party capital partners. The Group manages an office portfolio of 1.7 million square metres located predominantly across Sydney, Melbourne, Brisbane and Perth and is the largest owner of office buildings in the Sydney CBD, Australia’s largest office market. DEXUS is a Top 50 entity by market capitalisation listed on the Australian Securities Exchange under the stock market trading code ‘DXS’ and is supported by more than 32,000 investors from 21 countries. With 30 years of expertise in property investment, development and asset management, the Group has a proven track record in capital and risk management, providing service excellence to tenants and delivering superior risk-adjusted returns for its investors. www.dexus.com
Download the DEXUS IR app to your preferred mobile device to gain instant access to the latest stock price, ASX Announcements, presentations, reports, webcasts and more.
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DEXUS Funds Management Ltd ABN 24 060 920 783, AFSL 238163, as Responsible Entity for DEXUS Property Group (ASX: DXS)
1 By total portfolio value.
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DEXUS Property Group (ASX: DXS)
ASX release
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APPENDIX 1 - DEXUS office portfolio independent valuations for the period ending 31 December 2015
| Property | DXS ownership |
External valuation2,3 |
Variance to book value ($m)3 |
Variance to book value (%)3 |
Prior cap rate |
New cap rate |
|---|---|---|---|---|---|---|
| Office | ||||||
| Finlay Crisp Centre, Canberra ACT | 50% | $39.9m | -$2.8m | -6.5% | 9.25% | 10.58% |
| 1 Margaret Street, Sydney NSW | 100% | $239.0m | $17.3m | 7.8% | 6.50% | 6.00% |
| 45 Clarence Street, Sydney NSW | 100% | $328.0m | $26.5m | 8.8% | 7.00% | 6.13% |
| 201-217 Elizabeth Street, Sydney NSW | 50% | $184.0m | $15.1m | 8.9% | 6.50% | 6.00% |
| 44 Market Street, Sydney NSW | 100% | $285.0m | $16.9m | 6.3% | 6.75% | 6.38% |
| 309-321 Kent Street, Sydney NSW | 50% | $233.3m | $26.7m | 12.9% | 6.83% | 6.33% |
| Governor Phillip & Macquarie Towers, 1 Farrer Place, SydneyNSW |
50% | $833.0m | $108.3m | 14.9% | 6.25% | 5.29% |
| 1 Bligh Street, Sydney NSW | 33% | $293.3m | $0.9m | 0.3% | 5.25% | 5.25% |
| 2 & 4 Dawn Fraser Avenue, Olympic Park NSW | 75% | $116.6m | -$13.7m | -10.5% | 7.75% | 7.50% |
| Grosvenor Place, 225 George Street, Sydney NSW | 37.5% | $516.8m | $53.1m | 11.4% | 6.00% | 5.50% |
| 60 Castlereagh Street, Sydney NSW | 50% | $167.0m | $20.4m | 13.9% | 6.50% | 5.88% |
| 175 Pitt Street, Sydney NSW | 50% | $166.0m | $27.0m | 19.4% | 6.68% | 6.03% |
| 56 Pitt Street, Sydney NSW | 50% | $111.0m | $17.3m | 18.5% | 6.75% | 6.13% |
| 101 George Street, Parramatta NSW | 50% | $52.3m | -$0.4m | -0.8% | 8.00% | 7.25% |
| 130 George Street, Parramatta NSW | 100% | $99.0m | $13.0m | 15.1% | 8.25% | 7.00% |
| 201 Miller Street, North Sydney NSW | 50% | $50.0m | $2.3m | 4.9% | 8.00% | 7.25% |
| 5 Martin Place, Sydney NSW | 25% | $139.0m | $30.4m | 28.0% | 5.75% | 5.13% |
| Australia Square, 264-278 George Street, Sydney NSW |
50% | $376.0m | $38.5m | 11.4% | 6.69% | 5.72% |
| 383-395 Kent Street, Sydney NSW | 100% | $179.0m | $18.6m | 11.6% | 7.00% | 6.13% |
| 383-395 Kent Street, Sydney NSW (car park) | 100% | $78.5m | $12.7m | 19.3% | 8.25% | 6.75% |
| 39 Martin Place, Sydney NSW | 50% | $111.0m | $16.6m | 17.6% | 6.62% | 5.88% |
| 11 Talavera Road, Macquarie Park NSW | 100% | $172.0m | $15.7m | 10.1% | 8.50% | 7.50% |
| 123 Albert Street, Brisbane QLD | 100% | $430.0m | $7.1m | 1.7% | 6.75% | 6.50% |
| 12 Creek Street, Brisbane QLD | 50% | $138.8m | $3.8m | 2.8% | 6.75% | 6.50% |
| 480 Queen Street, Brisbane QLD | 50% | $235.6m | $13.5m | 6.1% | 6.75% | 6.50% |
| 10 Eagle Street, Brisbane QLD | 50% | $108.5m | $4.0m | 3.8% | 7.25% | 6.75% |
| 145 Ann Street, Brisbane QLD | 50% | $133.8m | $3.0m | 2.3% | 6.63% | 6.50% |
| Waterfront Place Complex, 1 Eagle Street, Brisbane QLD |
50% | $348.5m4 | $0.2m4 | 0.0%4 | 6.90% | 6.44% |
| 108 North Terrace, Adelaide SA | 50% | $43.1m | $0.0m | 0.1% | 8.00% | 8.25% |
| 385 Bourke Street, Melbourne VIC | 50% | $225.0m | $19.7m | 9.6% | 6.75% | 6.25% |
| Southgate Complex, 3 Southgate Avenue, Southbank VIC |
100% | $482.2m | $10.6m | 2.2% | 7.45% | 6.41% |
| 240 St Georges Terrace, Perth WA | 100% | $400.0m | -$80.4m | -16.7% | 7.00% | 7.00% |
| 58 Mounts Bay Road, Perth WA | 25% | $57.8m | -$2.1m | -3.5% | 7.25% | 7.00% |
| 46 Colin Street, West Perth WA | 50% | $15.5m | -$2.0m | -11.3% | 8.50% | 8.50% |
| Kings Square Towers 1-3, 556-562 Wellington Street, Perth WA |
50% | $226.5m | $1.5m | 0.7% | 7.23% | 7.01% |
2 Valuations and variance to book value are estimated for period ending 31 December 2015.
3 Represents DEXUS’s share of value.
4 Compared to acquisition valuation in June 2015 and including acquisition costs.
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DEXUS Property Group (ASX: DXS)
ASX release
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APPENDIX 2 - DEXUS industrial portfolio independent valuations for the period ending 31 December 2015
| Property | DXS Ownership |
External valuation5,6 |
Variance to book value6 ($m) |
Variance to book value (%) |
Prior cap rate |
New cap rate |
|---|---|---|---|---|---|---|
| Industrial | ||||||
| Axxess Corporate Park, Corner Ferntree Gully & GilbyRoads,Mt WaverleyVIC |
100% | $192.8m | $0.9m | 0.5% | 8.43% | 7.46% |
| 2-4 Military Road, Matraville NSW | 100% | $69.2m | $5.4m | 9.5% | 7.25% | 6.75% |
| 131 Mica Street, Carole Park QLD | 100% | $25.0m | $1.3m | 5.7% | 7.00% | 6.75% |
| Knoxfield Industrial Estate, Henderson Road,Knoxfield VIC |
100% | $44.3m | $3.2m | 7.7% | 8.00% | 7.75% |
| Lakes Business Park North, Botany NSW | 100% | $110m | -$6.1m | -5.3% | n/a | 6.75% |
5 Valuations and variance to book value are estimated for period ending 31 December 2015.
6 Represents DEXUS’s share of value.
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