DEXUS — Investor Presentation 2014

May 7, 2014

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DEXUS Property Group (ASX: DXS)
ASX release
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8 May 2014

Macquarie Australia Conference presentation

DEXUS Property Group today releases an overview presentation that will be presented at the 2014 Macquarie Australia Conference which is being held at Sheraton on the Park, 161 Elizabeth Street, Sydney.

For further information please contact: Investor relations Media relations David Yates T: +61 2 9017 1424 Louise Murray T: +61 2 9017 1446 M: +61 418 861 047 M:+61 403 260 754 E: david.yates@dexus.com E: louise.murray@dexus.com

About DEXUS

DEXUS Property Group (DEXUS) is one of Australia’s leading real estate groups, investing directly in high quality Australian office and industrial properties. With $17.6 billion of assets under management, DEXUS also actively manages office, industrial and retail properties located in key Australian markets on behalf of third party capital partners. DEXUS manages an office portfolio of 1.4 million square metres across Sydney, Melbourne, Brisbane and Perth and is the largest institutional 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 30,000 investors from 21 countries. With nearly 30 years of expertise in property investment, development and asset management, DEXUS has a proven track record in capital and risk management, providing service excellence to tenants and delivering superior risk-adjusted returns to 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)

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DEXUS PROPERTY GROUP MACQUARIE AUSTRALIA CONFERENCE PRESENTATION - MAY 2014

DEXUS Funds Management Limited ABN 24 060 920 783 AFSL 238163 as responsible entity for DEXUS Property Group DEXUS Property Group 2014 Macquarie Australia Conference presentation

Slide 1

AGENDA

 Overview

 Strategy

• Commonwealth Property Office Fund (CPA) transaction

 Portfolio overview

 Third party funds management

 Capital management

 Market outlook

 Summary

Note: All figures in Australian dollars as at 31 March 2014, and all portfolio figures include the CPA transaction unless otherwise stated.

Slide 2

DEXUS Property Group 2014 Macquarie Australia Conference presentation

OVERVIEW

Group property portfolio including third party funds

bn $17.6

Total funds under management

$9.1bn $8.5bn DXS portfolio Third Party Funds investments Management

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$11.7bn $2.5bn $3.4bn
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Slide 3

DEXUS Property Group 2014 Macquarie Australia Conference presentation

STRATEGY

A clear and focused strategy

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Slide 4

DEXUS Property Group 2014 Macquarie Australia Conference presentation

COMMONWEALTH PROPERTY OFFICE FUND (CPA) TRANSACTION Overview

• DEXUS and Canada Pension Plan Investment Board (CPPIB) joint takeover of CPA now completed

• Compulsory acquisition of CPA Units concluded on 14 April 2014

• Transition of management of the CPA portfolio progressing well and expected to be finalised by 1 July 2014

• The CPA portfolio increases Group FUM by $3.4bn and adds a portfolio of 21 office properties

• The transaction reinforces DEXUS‘s objective of leadership in Australian office, brings together two complementary office portfolios and provides earnings accretion to security holders

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Slide 5

DEXUS Property Group 2014 Macquarie Australia Conference presentation

PORTFOLIO OVERVIEW Scale in key CBD office markets

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PCA CBD Definition[1 ] DEXUS Core Target Market

DEXUS property

DEXUS Office Partnership property

• 1.AUM includes assets owned by DEXUS and DEXUS Third Party managed funds. Represents assets within the CBD, as defined by the Property Council of Australia (PCA) Office Market Report plus DEXUS Core Target Markets of Kings Square, Perth and Southbank, Melbourne. Values based on book values as at 30 June 2013.

• 2.NLA represents Net Lettable Area. Proportional for ownership percentage.

• 3.Represents the percentage of total NLA in Prime Grade assets within each CBD market in which the merged entity will have a representation via assets under management. Calculation excludes developments in progress and is not proportional to ownership percentage. Total market NLA sourced from PCA July 2013 Office Market Report and company filings. Market includes PCA defined boundaries plus DEXUS Core Target Markets of Kings Square, Perth and Southbank, Melbourne.

Slide 6

DEXUS Property Group 2014 Macquarie Australia Conference presentation

PORTFOLIO OVERVIEW

Direct office portfolio — 82% of balance sheet with 87% prime grade

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• T: Australia Square, 264-278 George Street, Sydney A-grade $311m (50% interest) B: Grosvenor Place, 225 George Street, Sydney Premium grade $291m (25% interest)

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1 Bligh Street, Sydney, Premium grade $251m
(33% interest)
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Governor Phillip & Macquarie Towers 1 Farrer Place, Sydney Premium grade $674m (50% interest)

Note: all values are at DXS ownership level.

Slide 7

DEXUS Property Group 2014 Macquarie Australia Conference presentation

PORTFOLIO OVERVIEW Direct office portfolio

bn $7.5

Prime quality office portfolio

 Largest listed office portfolio in Australia

• Largest institutional owner of office in Sydney CBD with 25% share

• DEXUS direct portfolio (DXS) owns interests in 54 office buildings

• DEXUS and its capital partners own interests in four of the seven premium grade towers in Sydney

 March 2014 quarter achievements:

• Leased[2] 47,965sqm during the quarter and 115,975sqm financial year to date, across 125 transactions

• Launched sales campaign for 50 Carrington Street, Sydney following successful repositioning of this trading property

• Secured 15 year commitment with Powercor across 11,615 square metres at its existing tenancy at 40 Market Street, Melbourne

• Including Canberra, Adelaide and Auckland, NZ.

Property type by book value

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Development
2%
Carparks Office parks
3% 2%
B-grade
6%
Premium
$7.5bn 34%
54 properties
A-grade
53%
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Geographical weighting by book value

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Other [1]
4%
Perth
9%
Sydney
Brisbane 61%
11%
$7.5bn
54 properties
Melbourne
15%
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1. At 100%, including Heads of Agreement (HOA).

Slide 8

DEXUS Property Group 2014 Macquarie Australia Conference presentation

PORTFOLIO OVERVIEW Direct office portfolio — lease expiry profile

Lease expiry profile[1] by income as at 31 March 2014

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14%
13.2% [2 ]
12%
11.6%
10% 9.6% [2 ]
10.2%
8%
8.3%
7.9%
6% 5.6% [2 ]
5.1%
4%
2%
2.1%
0%
Vacant FY14 FY15 FY16 FY17 FY18
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1. Excluding CPA portfolio. 2. 30 June 2013 position.

Slide 9

DEXUS Property Group 2014 Macquarie Australia Conference presentation

PORTFOLIO OVERVIEW

Direct industrial portfolio — 18% of balance sheet

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T: DEXUS Industrial Estate, 27 Distribution Drive, Laverton North $9.2m (50% interest) B: Quarry Industrial Estate, 1 Bellevue Circuit, Greystanes $15.4m (50% interest)

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• T: DEXUS Industrial Estate, 1-3 Distribution Drive, Laverton North $6.0m (50% interest) B: Quarry Industrial Estate, 3 Basalt Road, Greystanes, $14.3m (50% interest)

Note: all values are at DXS ownership level.

Slide 10

DEXUS Property Group 2014 Macquarie Australia Conference presentation

PORTFOLIO OVERVIEW Direct industrial portfolio

bn $1.5

Prime quality industrial portfolio

• Focused on major industrial hubs and arterial roadways in Sydney, Melbourne and Brisbane

• Allocation to value add/repositioning and development

 March 2014 quarter achievements:

• Leased[1] 20,364sqm during the quarter and 93,051sqm year to date

• Completed the sale of two trading properties delivering a combined trading profit of $4.4 million

• Pre-leased two further facilities at Quarry at Greystanes totalling 7,900sqm with construction to commence later this year

Geographical weighting by book value

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Adelaide
Brisbane 2%
5%
Sydney
53%
Melbourne $1.5bn
40% 48 properties
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Property type by book value

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Data centre Developments
4% 2%
Land
3%
Business parks
27%
Distribution
centres
24% $1.5bn
48 properties
Industrial
estates
40%
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1. At 100%, including Heads of Agreement (HOA).

Slide 11

DEXUS Property Group 2014 Macquarie Australia Conference presentation

PORTFOLIO OVERVIEW

Development and fund-through pipeline — Group

$3.0bn

Total Group development pipeline

 DEXUS allocates up to 15% of funds under management on its balance sheet to development and value-add opportunities

				Total estimatedproject cost	Total estimatedproject cost	Total estimatedproject cost	Total estimatedproject cost	Total estimatedproject cost	Total estimatedproject cost	Total estimatedproject cost	Total estimatedproject cost	Total estimatedproject cost
DXS developments and fund-throughs	Total est cost1	Est cost to **complete1 **		FY14			FY15			FY16+
DEXUS Industrial Estate, Laverton North	$122m	$97m			$122m
Quarry at Greystanes	$77m	$46m			$40m					$37m
5 Martin Place, Sydney2	$107m	$67m			$107m
105 Phillip Street, Parramatta	$120m	$112m					$120m
12 Creek St, Brisbane2	$19m	$19m					$19m
180 Flinders Street, Melbourne	$230m	$148m								$230m
480 Queen Street, Brisbane2	$272m	$194m			$272m
Kings Square, Perth2	$217m	$158m			$217m
DXS pipeline	$1,164m	$841m
									3
Completed developments for trading	$34m	$4m				DXS value-add and repositioning			**Inventory **
DXS pipeline including trading	$1,198m	$845m				50 Carrington Street, Sydney			$59m
Third party development pipeline	$1,342m	$1,179m				40 Market Street, Melbourne			$47m
						1-15 Roseber Avenue Roseber			$59m
Third party fund-through pipeline	$489m	$381m				y , y
						25-55 Rothschild Avenue Rosebery			$37m
Total Group pipeline	$3,029m	$2,405m				,
						154 O’Riordan Street, Mascot			$14m
Developments underway Uncommitted developmentpipeline						Total DXS value-addproperties			$216m
Fund-through office investments

1. Costs shown at 100%, including land.

2. DXS share.

3. Acquisition or transfer price excluding costs and does not represent the trading price for the property.

Slide 12

DEXUS Property Group 2014 Macquarie Australia Conference presentation

THIRD PARTY FUNDS MANAGEMENT Overview

bn $8.5

Third party funds management platform

• DEXUS strives to be the wholesale partner of choice in Australian office, industrial and retail

• Substantial funds management platform including

• $4.9bn DEXUS Wholesale Property Fund (DWPF) - diversified

• $1.6bn Australian mandate – diversified

• $0.3bn[1] Australian Industrial Partnership with global pension fund

• New $1.7bn[1] Australian Office Partnership

• Third party funds represents 48% of total Group FUM

• Continued to deliver top quartile index performance and benchmark outperformance at 31 March 2014

47 Institutional investors

Third party funds under management post CPA transaction

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Australian Office
Partner DWPF
$1.7bn $4.9bn
Australian Industrial
Partner
$0.3bn $8.5bn
Australian
Mandate
$1.6bn
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1. Portfolio value shown at 50% to represent 50:50 joint partnership with DEXUS direct portfolio.

Slide 13

DEXUS Property Group 2014 Macquarie Australia Conference presentation

THIRD PARTY FUNDS MANAGEMENT Delivering on strategy

57%

Growth in third party funds since June 2012

• Proven track record in attracting third party capital

• Launched two new partnerships since October 2012 representing $2 billion in new capital

• In addition, DWPF has raised $2.7 billion since 2010

• Demonstrated ability to manufacture and secure attractive investment opportunities

• Acquired over $1 billion of office, industrial and retail property across third party platform during 2013

• — $1.2 billion third party development pipeline in addition to two fund-through investments underway

Growth in funds under management since 2012

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10
57% growth 8.5
9 1.7
8
6.8
1.1
7
5.4 0.3
6
5
4
3
2
30 Jun 12 Formation of AIP Existing Fund 31 Dec 13 CPPIB 31 Mar 14 1
Growth
$bn
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1. Including CPA transaction.

Slide 14

DEXUS Property Group 2014 Macquarie Australia Conference presentation

CAPITAL MANAGEMENT

Prudent and disciplined approach to capital management

 March 2014 quarter achievements:

— Reduced cost of debt to 5.6%, down 30 bps since 30 June 2013

• S&P credit rating upgraded from BBB+ to A-

• Sourced $1.3 billion of new funding commitments for CPA transaction

	Key metrics	31 Mar 13
	Gearing1	34.6%
	Cost of debt2	5.6%
	Duration of debt	5.6 years
	Headroom (approx.)	$0.5bn
	S&P/Moody’s credit rating	A-/Baa1

• Settled US$200m US Private Placement transaction

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Historical gearing ratio [1 ] Diversified mix of facilities
CP
MTN 2%
11%
40.0%
144A
6%
30.0%
Bank -
Target Range USPP unsecured
20.0% 33.2% 34.6% Gearing 15% 53%
31.2% 29.8% 28.4% 27.2% 29.0% 30.6%
10.0%
CPA
acquisition
0.0% bridge
Jun 08 Jun 09 Jun 10 Jun 11 Jun 12 Jun 13 Dec 13 Mar 14 13%
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1. Pro-forma including the impact of the CPA transaction and committed property disposals.

2. Weighted average across the period, inclusive of fees and margins on a drawn basis.

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DEXUS Property Group 2014 Macquarie Australia Conference presentation

MARKET OUTLOOK Why office demand will improve from FY15

• Demand to improve in FY15 due to

DEXUS Office Demand Barometer points to improvement

• Economy responding to easing monetary policy and lower AUD

• Improving business conditions and confidence

• Recovery in employment to be led by business services, accounting, legal, IT, education and pharmaceuticals

• Tenant migration into CBD areas

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Actual demand
12% % of stock (annualised) Barometer
8%
4%
0%
-4%
-8%
Dec-03 Dec-05 Dec-07 Dec-09 Dec-11 Dec-13
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• Sydney and Melbourne to lead improvement with Brisbane and Perth to follow

Office demand in the four main CBDs vs employment growth

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PER BRI MEL SYD NAT WC (RHS)
'000 sqm
500 5%
400 4%
300 3%
200 2%
100 1%
0 0%
-100 -1%
-200 -2%
-300 -3%
FY03 FY05 FY07 FY09 FY11 FY13 FY15 FY17
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Source: Jones Lang LaSalle, Bloomberg, NAB, DEXUS Research.

DEXUS Office Barometer includes five variables: S&P/ASX 200 Index, NAB Business Confidence Index, ANZ job ads, US ISM Manufacturing Index and short-term business travel departures.

Slide 16

DEXUS Property Group 2014 Macquarie Australia Conference presentation

MARKET OUTLOOK Industrial markets relatively stable

• Lead indicators for demand now improving (business confidence, consumer confidence)

• Demand to be driven by tenants consolidating and seeking efficiencies eg. logistics and retail

• Limited availability of prime space

• Rents flat in FY14, then upside in medium term

• Melbourne very competitive

• Sydney subdued but stable

• Brisbane has paused but could recover quickly

Consumption – to drive rental growth

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% p.a. NSW consumption spending RHS Outer West Rent Growth
12% 6%
forecast
8% 4%
4% 2%
0% 0%
-4% -2%
-8% -4%
FY01 FY03 FY05 FY07 FY09 FY11 FY13 FY15 FY17
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National prime vacancy remains low

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Prime Secondary
8%
6%
4%
2%
0%
H208 H109 H209 H110 H210 H111 H211 H112 H212 H113
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Source: Jones Lang LaSalle, Savills, Deloitte Access Economics, DEXUS Research.

Slide 17

DEXUS Property Group 2014 Macquarie Australia Conference presentation

SUMMARY

 Continue to deliver on strategy

• Expect office market conditions to improve in FY15

• Focus moving forward:

• Ensure CPA portfolio is successfully integrated

• Continue to drive earnings from existing business

 Market guidance for FY14[1]

• FFO of 8.34 cents per security, representing 7.6% growth from FY13

• Distribution of 6.26 cents per security

• Barring unforeseen circumstances. Assumptions include: 75% payout ratio, delivering 2.5-3.5% like-for-like income growth across the office and industrial portfolios, $4-5m in trading profits and circa 5.6% cost of debt.

1 Bligh Street, Sydney NSW

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DEXUS Property Group 2014 Macquarie Australia Conference presentation

IMPORTANT INFORMATION Disclaimer

• This presentation is issued by DEXUS Funds Management Limited (DXFM) in its capacity as responsible entity of DEXUS Property Group (ASX:DXS). It is not an offer of securities for subscription or sale and is not financial product advice.

• Information in this presentation including, without limitation, any forward looking statements or opinions (the Information) may be subject to change without notice. To the extent permitted by law, DXFM, DEXUS Property Group and their officers, employees and advisers do not make any representation or warranty, express or implied, as to the currency, accuracy, reliability or completeness of the Information and disclaim all responsibility and liability for it (including, without limitation, liability for negligence). Actual results may differ materially from those predicted or implied by any forward looking statements for a range of reasons outside the control of the relevant parties.

• The information contained in this presentation should not be considered to be comprehensive or to comprise all the information which a DEXUS Property Group security holder or potential investor may require in order to determine whether to deal in DEXUS Property Group stapled securities. This presentation does not take into account the financial situation, investment objectives and particular needs of any particular person.

• The repayment and performance of an investment in DEXUS Property Group is not guaranteed by DXFM, any of its related bodies corporate or any other person or organisation.

• This investment is subject to investment risk, including possible delays in repayment and loss of income and principal invested.

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DEXUS Property Group 2014 Macquarie Australia Conference presentation