DEXUS — Investor Presentation 2015

Oct 20, 2015

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DEXUS Property Group (ASX: DXS)
ASX release
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21 October 2015

ASX Investor Series presentation

DEXUS Property Group (DEXUS) today releases an overview presentation that will be presented at the 2015 ASX Investor Series being held at Exchange Centre, 20 Bridge Street, Sydney at 12.30pm today.

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: rowena.causley@dexus.com E: louise.murray@dexus.com

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 $19.1 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)

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DEXUS PROPERTY GROUP

– ASX INVESTOR SERIES PRESENTATION 21 OCTOBER 2015

DEXUS Funds Management Limited ABN 24 060 920 783 AFSL 238163 as responsible entity for DEXUS Property Group DEXUS Property Group – ASX Investor Series 2015 Slide 1

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IMPORTANT INFORMATION

• 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.

All data as at 30 June 2015 unless otherwise stated.

Slide 2

DEXUS Property Group – ASX Investor Series 2015

DEXUS TODAY

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L-R: 1 Bligh Street, Australia Square and Grosvenor Place, Sydney NSW.
DEXUS Property Group – ASX Investor Series 2015 Slide 3
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DEXUS TODAY

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L-R: 385 Bourke Street, Southgate Complex and QV, 180-222 Lonsdale Street, Melbourne, VIC.
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Slide 4

DEXUS Property Group – ASX Investor Series 2015

DEXUS TODAY

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L-R: 123 Albert Street, 480 Queen Street development, 10 Eagle Street and 12 Creek Street, Brisbane, QLD.

DEXUS Property Group – ASX Investor Series 2015 Slide 5

DEXUS TODAY

Australia’s largest prime office portfolio A significant and growing Third Party Funds Management business A deep pipeline of value enhancement opportunities

8.6% p.a. growth in distributions and 15.8% p.a. TSR[1] since FY12

Underpinned by a strong balance sheet

1. Compound annual total security holder return over the three years to 30 June 2015.

Slide 6

DEXUS Property Group – ASX Investor Series 2015

DEXUS TODAY – Key earnings drivers

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PROPERTY FUNDS MANAGEMENT TRADING
PORTFOLIO & PROPERTY SERVICES
Maximising Driving performance Delivering trading
performance from and generating profits from
the DEXUS property revenue from funds identified properties
portfolio management and
property services
80-90% of FFO [1] 10-20% of FFO [1]
UNDERLYING BUSINESS TRADING
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1. Represents target contribution to FFO before Finance costs and Group Corporate costs. FFO means Funds from Operations. As previously announced, DEXUS adopted FFO as defined by the PCA White Paper “Voluntary Best Practice Guidelines for disclosing Funds from Operations (FFO) and Adjusted Funds from Operations (AFFO)” for its reporting from 1 July 2014.

DEXUS Property Group – ASX Investor Series 2015

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Slide 7
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– PROPERTY PORTFOLIO DEXUS office - 82% of balance sheet assets

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$7.8bn >85%
Prime office portfolio Prime grade portfolio composition
95.3% 6.71%
Occupancy (by income) Average capitalisation rate
DEXUS Property Group – ASX Investor Series 2015 Slide 8
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– – PROPERTY PORTFOLIO DEXUS industrial 18% of balance sheet assets

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Lakes Business Park, Lord Street, Botany
$1.7bn
Prime industrial portfolio
92.4%
Occupancy (by income)
7.77%
Average capitalisation rate
57-75 Templar Road, Erskine Park Quarry at Greystanes, 1 Basalt Road, Greystanes
DEXUS Property Group – ASX Investor Series 2015 Slide 9
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– PROPERTY PORTFOLIO Office development

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5 Martin Place, Sydney Kings Square, Perth 480 Queen Street, Brisbane
29% forecast project IRR 15% forecast project IRR 17% forecast project IRR
7.3% yield on cost 8.2% yield on cost 7.0-7.2% yield on cost
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Slide 10

DEXUS Property Group – ASX Investor Series 2015

– PROPERTY PORTFOLIO Industrial development

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Quarry [[1]] at Greystanes and Quarrywest [[2]]
319,000 square metres of prime industrial facilities
1. Jointly owned by DEXUS and Australian Industrial Partner.
2. Jointly owned by DEXUS and DEXUS Industrial Partner.
DEXUS Property Group – ASX Investor Series 2015 Slide 11
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Quarry [[1]] at Greystanes and Quarrywest [[2]]
319,000 square metres of prime industrial facilities
1. Jointly owned by DEXUS and Australian Industrial Partner.
2. Jointly owned by DEXUS and DEXUS Industrial Partner.
DEXUS Property Group – ASX Investor Series 2015 Slide 11
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– PROPERTY PORTFOLIO Recent transactions

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Sale of 36 George Street, Burwood [2]
Sale price: $95m
44% premium to book value
Achieved a 32% IRR on investment
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Acquisition of Waterfront Place Complex, Brisbane [1]
Acquisition price: $635m
Favourable rate of $9,644/sqm
Long term core investment
Eagle Street Pier offers one of the best
future development sites in Brisbane CBD
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1. Jointly owned 50/50 by DEXUS and DEXUS Wholesale Property Fund. 2. DEXUS Office Partnership, in which DEXUS has a 50% interest, announced on 29 September 2015 that it had entered into an agreement to sell the property. DEXUS Property Group – ASX Investor Series 2015 Slide 12

– THIRD PARTY FUNDS MANAGEMENT Platform set up for organic growth

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$9.6bn 48
Third Party Funds under management Investors from seven countries
>60% $2.3bn
Growth in third party funds since June 2012 Development pipeline
Management operations profit
$45-50m
$37.9m
$27.9m
$20.8m
$17.9m
FY12 FY13 FY14 FY15 FY16
Actual Forecast
DEXUS Property Group – ASX Investor Series 2015 Slide 13
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TRADING

• ‘Trading’ is the activity of developing/repositioning assets with a view to selling for profit

• Since 2010, DEXUS has had a trading strategy and included trading profits in FFO

• Already settled on properties that comprise FY16 trading profits to deliver approximately $60 million (post tax)

History of delivering trading profits

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Approx. $60.0m
$42.6m
$5.8m
$4.3m
$1.5m
FY12 FY13 FY14 FY15 FY16
Trading profits delivered Forecast
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Slide 14

DEXUS Property Group – ASX Investor Series 2015

SUMMARY

• Solid operating business set up to deliver growth through the cycle

• Delivering consistent performance

• Third party funds management business is set up for strong organic growth

• FY16 guidance[1] for growth in distribution per security of 5.5-6.0% from FY15

Distribution growth – cents per security

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42.0
Four year average growth rate
40.0 of 8.6% p.a. to 30 June 2015
38.0
36.0
Growth of
34.0 41.04 5.5-6.0%
32.0 37.56
36.00
30.0
32.10
28.0
26.0
FY12 FY13 FY14 FY15 FY16
guidance
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• 1.Barring unforeseen circumstances guidance is supported by the following assumptions: flat like-for-like income across the DEXUS combined portfolio, weighted average cost of debt of circa 4.9%, trading profits of approximately $60m net of tax, Management Operations FFO of $45-50m (including third party development management fees), approximately $150m net proceeds from non-core property divestments during FY16, excluding any buy-back of DEXUS securities, and excluding any further transactions.

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DEXUS Property Group – ASX Investor Series 2015 Slide 15
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DEXUS PROPERTY GROUP

– ASX INVESTOR SERIES PRESENTATION 21 OCTOBER 2015

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DEXUS Funds Management Limited ABN 24 060 920 783 AFSL 238163 as responsible entity for DEXUS Property Group DEXUS Property Group – ASX Investor Series 2015

Slide 16