DEXUS — Investor Presentation 2018

Oct 1, 2018

Dexus (ASX: DXS)

ASX release

==> picture [123 x 43] intentionally omitted <==

2 October 2018

Investor roadshow presentation

Dexus provides the attached presentation that is being used as a basis of discussion with institutional investors in Singapore and Hong Kong.

For further information please contact:

Investor Relations Media Relations Rowena Causley David Yates +61 2 9017 1390 +61 2 9017 1146 +61 416 122 383 +61 418 861 047 rowena.causley@dexus.com david.yates@dexus.com

About Dexus

Dexus is one of Australia’s leading real estate groups, proudly managing a high quality Australian property portfolio valued at $27.2 billion. We believe that the strength and quality of our relationships is central to our success, and are deeply committed to working with our customers to provide spaces that engage and inspire. We invest only in Australia, and directly own $13.3 billion of office and industrial properties. We manage a further $13.9 billion of office, retail, industrial and healthcare properties for third party clients. The group’s $4.2 billion development pipeline provides the opportunity to grow both portfolios and enhance future returns. With 1.7 million square metres of office workspace across 53 properties, we are Australia’s preferred office partner. Dexus is a Top 50 entity by market capitalisation listed on the Australian Securities Exchange (trading code: DXS) and is supported by 27,000 investors from 20 countries. With more than 30 years of expertise in property investment, development and asset management, we have a proven track record in capital and risk management, providing service excellence to tenants and delivering superior risk-adjusted returns for investors. www.dexus.com

Download the Dexus IR app

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.

Dexus Funds Management Ltd ABN 24 060 920 783, AFSL 238163, as Responsible Entity for Dexus (ASX: DXS)

Investor

roadshow presentation

Singapore and Hong Kong, 2-4 October 2018

==> picture [362 x 124] intentionally omitted <==

----- Start of picture text -----

Dexus Funds Management Limited
ABN 24 060 920 783
AFSL 238163 as responsible entity for Dexus
----- End of picture text -----

Dexus

Two key mega-trends that support Dexus’s strategy

1. Growth in cities and urbanisation

• 58% of Australians currently live in Sydney, Melbourne, Brisbane or Perth…but these locations will get 75% of the population growth[1] going forward

==> picture [165 x 101] intentionally omitted <==

----- Start of picture text -----

Australian cities by 2056
Sydney and
Melbourne
will grow to
cities of
8 million
----- End of picture text -----

1. Source: Infrastructure Australia.

2. Growth in global pension and superannuation flows

• Global pension funds are expanding rapidly and allocation to real assets and alternatives has increased from 4% to 25% for top P7 countries

==> picture [220 x 142] intentionally omitted <==

----- Start of picture text -----

Pension funds as % of GDP [2] Australia has the world’s 2 [nd] largest
pension sector as % of GDP and 4 [th] in
the world overall. Growth over past
decade has been 12.1% per annum
----- End of picture text -----

1. Source: Willis Towers Watson, Global pension assets study 2018. 2 Investor roadshow presentation

Dexus

What sets Dexus apart?

• Quality real estate portfolio across key Australian cities

• Strong performing Funds management business with access to diverse sources of capital

• Customer centric focus

• Pipeline of development opportunities to create value over the long term

• High performing, engaged and diverse workforce

33

Conversation with Dexus ManagementInvestor roadshow presentation

==> picture [276 x 184] intentionally omitted <==

==> picture [67 x 27] intentionally omitted <==

==> picture [510 x 397] intentionally omitted <==

----- Start of picture text -----

Chair
overview
4 Investor roadshow presentation
----- End of picture text -----

Strategy

==> picture [398 x 123] intentionally omitted <==

5 Investor roadshow presentation

==> picture [67 x 27] intentionally omitted <==

==> picture [26 x 6] intentionally omitted <==

----- Start of picture text -----

DRAFT
----- End of picture text -----

Dexus has ownership or management of 26 Sydney CBD and CBD Fringe assets valued at $10.7 billion[1]

==> picture [202 x 15] intentionally omitted <==

----- Start of picture text -----

1. Based on Dexus and Dexus managed fund ownership share t 30 June 2018 (including North Sydney properties).
6 Investor roadshow presentation
----- End of picture text -----

Funds Management

Diversified platform leverages core capabilities with strong outlook

==> picture [437 x 174] intentionally omitted <==

----- Start of picture text -----

Diversified Funds Management platform Leverages core capabilities and has a strong outlook
-
$13.9bn Leverages Dexus’s transactional, development, asset and property
+148% on behalf of management expertise to deliver on clients’ investment objectives
Growth in FUM over
73 clients from -
past six years 9 countries Supported by best practice corporate governance principles and alignment
of interests via Dexus co-ownership in direct properties or in Funds
1%
- Established investment into growing healthcare property sector, through
37% launch of Healthcare Wholesale Property Fund in 2017
$5.6bn -
11% Planning underway that will see the launch of new unlisted funds or
3% partnerships over the next 12-18 months
54% 51%
11%
32%
2012 2018 Funds Management – Active projects in retail, office, industrial and healthcare sectors
Office Industrial Retail US Industrial Healthcare development pipeline $2.0bn – $1.3 billion uncommitted
----- End of picture text -----

==> picture [89 x 5] intentionally omitted <==

----- Start of picture text -----

7 Investor roadshow presentation
----- End of picture text -----

==> picture [67 x 27] intentionally omitted <==

Corporate Governance at Dexus Committee structure

==> picture [436 x 208] intentionally omitted <==

----- Start of picture text -----

Board of Directors
Dexus Funds Management Limited
Board Risk Committee Board Audit Committee Board Nomination Committee Board People & Remuneration
Committee
Group Management Committee Property Executive Committee
Corporate Responsibility, Inclusion
Group Risk Committee
& Diversity Committee
Strategic Projects Committee Continuous Disclosure Committee
Investment Committee Capital Markets Committee
8 Investor roadshow presentation
----- End of picture text -----

Sustainability focus

Net zero emissions by 2030

==> picture [436 x 207] intentionally omitted <==

----- Start of picture text -----

Latest achievements New energy, new opportunities
Progressed minimum 2018 survey results Launched goal to achieve net zero
5 star NABERS Energy
position for all carbon emissions across
rating across First managed property portfolio by 2030
89% Australia / Office / Listed category
for Dexus Office Trust Pathway involves
of the office portfolio towards
target of 1,000,000sqm by 2020
+
Improving energy Increasing
892,000sqm efficiency renewables
rated 5 stars or above across
Reduction in energy Uptake of renewables
35 properties 10 years usage by up to 50% from within properties (on-site)
of consistent recognition on DJSI World today and through leveraging
and Top 1% of real estate industry globally market procurement
opportunities off-site
for Dexus
GRESB is the Global Real Estate Sustainability Benchmark.
9 Investor roadshow presentation
----- End of picture text -----

Deep pipeline of value enhancement opportunities Planning for the future for Dexus and our Funds Management clients

==> picture [400 x 8] intentionally omitted <==

----- Start of picture text -----

Completed 2011 to 2017 Underway [1] Future potential concept opportunities
----- End of picture text -----

==> picture [49 x 71] intentionally omitted <==

==> picture [53 x 70] intentionally omitted <==

==> picture [56 x 82] intentionally omitted <==

==> picture [52 x 77] intentionally omitted <==

==> picture [53 x 71] intentionally omitted <==

==> picture [59 x 70] intentionally omitted <==

==> picture [51 x 70] intentionally omitted <==

==> picture [60 x 72] intentionally omitted <==

==> picture [52 x 71] intentionally omitted <==

==> picture [105 x 140] intentionally omitted <==

==> picture [88 x 140] intentionally omitted <==

==> picture [89 x 14] intentionally omitted <==

----- Start of picture text -----

1. Expected completions due in 2019 to 2021.
10 Investor roadshow presentation
----- End of picture text -----

==> picture [67 x 27] intentionally omitted <==

Maintaining strong capital management approach Conservative balance sheet to fund future development pipeline

==> picture [387 x 171] intentionally omitted <==

----- Start of picture text -----

Track record of conservative gearing
40%
24.1%
Gearing
35% 33.7%
4.2% 30.7%
Cost of 30% 29.8% 28.4% 29.0% 28.5%
debt
27.2%
26.7%
25% 24.1%
7.0 years
Duration of debt
20% FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY171 FY18
----- End of picture text -----

1. FY17 pro forma gearing is adjusted for the acquisitions of MLC Centre Sydney, 100 Harris Street Pyrmont, 90 Mills Road Braeside and the sales of 30-68 Taras Avenue, Altona North and 46 Colin Street, West Perth, including the impact of transactions costs. Actual gearing (look-through) is 22.1% at 30 June 2017.

11 Investor roadshow presentation

==> picture [67 x 27] intentionally omitted <==

==> picture [510 x 397] intentionally omitted <==

----- Start of picture text -----

Australian
office market
dynamics
12 Investor roadshow presentation
----- End of picture text -----

National office market

Lead indicators are positive

==> picture [438 x 207] intentionally omitted <==

----- Start of picture text -----

-
National enquiries up 10% on FY17 by number [1] Dexus group office portfolio exposure
-
- Key four CBDs
National enquiries up 13% on FY17 by area [1]
- - 39 assets
Average enquiry size is around 1,000sqm
- - $15.7 billon
White collar employment is on the rise
- Business conditions and confidence remain elevated - 1.4 million sqm
Total employment Business conditions & confidence
%pa Index
8.0% 20
6.0% 15
4.0% 10
5
2.0% 0
0.0% -5
-2.0% -10
-4.0% -15
-20
-6.0%Jun-08 Jun-10 Jun-12 Jun-14 Jun-16 Jun-18 -25Jun-08 Jun-10 Jun-12 Jun-14 Jun-16 Jun-18
White Collar Total Employment
Business conditions Business confidence
1. Colliers August 2018 Office Leasing newsletter.
13 Investor roadshow presentation
----- End of picture text -----

National office market

CBD office market to benefit from ‘cities’ thematic

==> picture [448 x 181] intentionally omitted <==

----- Start of picture text -----

-
Employment growth in inner city areas and CBDs is faster than other regions Infrastructure spend by state
State budget commitments – total infrastructure spend next four years [1]
-
CBDs to benefit from new infrastructure investment – creating employment in
the near term and resulting in enhanced amenity
-
Evidence of tenant migration into the CBDs
-
Businesses value CBD locations for attracting and retaining talent
-
CBDs foster ideas, collaboration and productivity
NSW Employment growth by region
Index State Greater City Inner City
150
140
130
120
110
100
90
Aug-08 Nov-09 Feb-11 May-12 Aug-13 Nov-14 Feb-16 May-17 Aug-18
----- End of picture text -----

==> picture [241 x 114] intentionally omitted <==

----- Start of picture text -----

NSW Employment growth by region
Index State Greater City Inner City
150
140
130
120
110
100
90
Aug-08 Nov-09 Feb-11 May-12 Aug-13 Nov-14 Feb-16 May-17 Aug-18
1. Source: NSW, Victoria, QLD, WA 2018-19 State Budgets.
14 Investor roadshow presentation
----- End of picture text -----

==> picture [67 x 27] intentionally omitted <==

Sydney CBD office market Stronger for longer

==> picture [37 x 36] intentionally omitted <==

• Sydney enquiries up 100% on FY17 by area[1]

==> picture [171 x 34] intentionally omitted <==

----- Start of picture text -----

Sydney CBD office market At 30 June 2018
Total net lettable area 5.04 million sqm
Prime vacancy average 5.2%
----- End of picture text -----

• Supported by state economy and continued growth in finance, co-working and technology

• Large businesses coming to market early and looking to expand, driving demand in Sydney CBD

==> picture [161 x 115] intentionally omitted <==

In FY18

Largest market deal:

• �50,000sqm (pre-commit: Macquarie Bank at 55 Hunter Street)

• �9,527sqm (pre-Commit: Henry Davis York/Norton Rose Fulbright at Sixty Martin Place)

• �10,820sqm (Pre-Commitment: Allianz at Wynyard Place)

• Effective rental growth: +12.5% (JLL)

FY19-FY23

Projected supply over the medium-term is on par with 10-year average:

• 5-year projected average gross supply: 103,000sqm per year

• 10-year historic average gross supply: 102,000sqm per year

• Source: Colliers August 2018 Office Leasing newsletter. 15 Investor roadshow presentation

==> picture [67 x 27] intentionally omitted <==

Sydney CBD office market Past and future supply

Vacancy to fall below 3.5% in FY19 before rising to

Sydney CBD gross supply

==> picture [403 x 162] intentionally omitted <==

----- Start of picture text -----

Total Completions
(‘000s) Total Completions (Forecast)
sqm Pre-commitments
250
200
102,000sqm
150 10-yr average
100
50
–
FY98 FY99 FY00 FY01 FY02 FY03 FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22 FY23
----- End of picture text -----

4.6% in FY21

and remain below long term average of 7.9%

==> picture [103 x 17] intentionally omitted <==

----- Start of picture text -----

102,000sqm 103,000sqm
10-yr average 5-yr average
forecast
----- End of picture text -----

==> picture [67 x 27] intentionally omitted <==

==> picture [89 x 5] intentionally omitted <==

----- Start of picture text -----

16 Investor roadshow presentation
----- End of picture text -----

Sydney CBD office market

Rents in perspective

• Sydney not as expensive as many other global office markets

• Companies have steadily increased the density of workers per sqm of office space – so rent paid goes further now than in the past

==> picture [436 x 169] intentionally omitted <==

----- Start of picture text -----

Gross prime face rents Sydney prime gross effective rent
AUD/sqm $/sqm
$4,000 $1,000
$900 Nominal rent
$3,000 $800
$700
$2,000
$600
$1,000 $500
$400 Rents adjusted for inflation
$-
$300
$200
Adjusted for workspace density
$100
1987 1990 1993 1996 1999 2002 2005 2008 2011 2014 2017
17 Investor roadshow presentation
----- End of picture text -----

Melbourne CBD office market

More upside captured

==> picture [37 x 37] intentionally omitted <==

==> picture [398 x 50] intentionally omitted <==

----- Start of picture text -----

- Melbourne enquiries up 50% on FY17 by area [1] Melbourne CBD office market At 30 June 2018
- Favourable leasing market over the medium-term Total net lettable area 4.73 million sqm
underpinned by highest national population growth, infrastructure
Prime vacancy average 4.2%
spend and broad confidence
-
Diverse sources of enquiry including co-working and education
----- End of picture text -----

==> picture [178 x 127] intentionally omitted <==

In FY18

• Largest market deal:

• �65,000sqm (pre-commit: NAB at 405 Bourke Street) �21,574sqm (pre-commit: Energy Australia at Two Melbourne Quarter) �20,088sqm (pre-commit: NBN at Melbourne Central) Effective rental growth: +10.7% (JLL)

FY19-FY23

Over the next 3 years, net supply (149,000sqm) is manageable compared to average net absorption over the past 3 years (136,000sqm) Projected supply over the medium-term is above 10-year average: - 5-year projected average gross supply: 126,000sqm per year - 10-year historic average gross supply: 104,000sqm per year

==> picture [67 x 27] intentionally omitted <==

==> picture [102 x 14] intentionally omitted <==

----- Start of picture text -----

1. Source: Colliers August 2018 Office Leasing newsletter.
18 Investor roadshow presentation
----- End of picture text -----

Melbourne CBD office market

Past and future supply

==> picture [436 x 220] intentionally omitted <==

----- Start of picture text -----

Vacancy to fall below
4.0% in FY19
Melbourne CBD gross supply Total Completions before rising to
(‘000s)sqm Total Completions (Forecast)Pre-commitments 6.2% in FY21
250 and remain below long term
average of 7.9%
200
104,000sqm
10-yr average 126,000sqm
150 5-yr average
forecast
100
50
–
FY98 FY99 FY00 FY01 FY02 FY03 FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22 FY23
19 Investor roadshow presentation
----- End of picture text -----

Brisbane CBD office market

Recovery underway

==> picture [37 x 36] intentionally omitted <==

==> picture [397 x 41] intentionally omitted <==

----- Start of picture text -----

- Enquiries supported by improving Queensland economy, strong Brisbane CBD office market At 30 June 2018
employment growth and major infrastructure projects Total net lettable area 2.25 million sqm
-
Brisbane market activity focused on larger tenants
- Prime vacancy average 9.6%
Effective rents to rise as the market moves further into recovery
----- End of picture text -----

==> picture [174 x 131] intentionally omitted <==

In FY18

==> picture [67 x 8] intentionally omitted <==

----- Start of picture text -----

Largest market deal:
----- End of picture text -----

==> picture [198 x 44] intentionally omitted <==

----- Start of picture text -----

�8,122sqm (occupier move: State Government at 306-310 Ann Street)
�8,024sqm (occupier move: Allianz at 306-310 Ann Street)
�7,200sqm (occupier move: WeWork at 192 Ann Street)
Effective rental growth: +0.5% (JLL)
FY19-FY23
----- End of picture text -----

==> picture [219 x 47] intentionally omitted <==

----- Start of picture text -----

Over the next 3 years, net supply (60,000sqm) is low compared to net
absorption over the past 3 years (105,000sqm), allowing vacancy to decline
Projected supply over the medium-term well below 10-year average:
- 5-year projected average gross supply: 31,000sqm per year
- 10-year historic average gross supply: 62,000sqm per year
----- End of picture text -----

==> picture [67 x 27] intentionally omitted <==

==> picture [89 x 5] intentionally omitted <==

----- Start of picture text -----

20 Investor roadshow presentation
----- End of picture text -----

Perth CBD office market

Signs of recovery

==> picture [37 x 37] intentionally omitted <==

• Enquiries at increased levels

• Underpinned by improving economy sentiment and business investment

• Market has bottomed with positive take-up and vacancy declining

In FY18

Largest market deal:

• �3,790sqm (pre-commit: CBH at 240 St Georges Terrace)

• �3,720sqm (occupier move: undisclosed at 40 The Esplanade)

• �3,494sqm (occupier move: Alinta at Raine Square and Bankwest Place)

• Effective rental growth: +1.8% (JLL)

FY19-FY23

Over the next 3 years, net supply (50,000sqm – fully pre-committed) is manageable compared to net absorption over the past 2 years (65,000sqm), allowing vacancy to decline

Projected supply over the medium-term well below 10-year average:

• 5-year projected average gross supply: 20,000sqm per year

• 10-year historic average gross supply: 52,000sqm per year

Perth CBD office market At 30 June 2018 Total net lettable area 1.77 million sqm Prime vacancy average 16.2%

==> picture [178 x 133] intentionally omitted <==

21 Investor roadshow presentation

Co-working

Continues to rapidly expand in office markets across the world

Co-working penetration by market % of total, by location

==> picture [230 x 98] intentionally omitted <==

----- Start of picture text -----

5.0
4.0
2.3 2.4
2.0 2.0
Market
Share
(%)
Sydney London Manhattan Beijing Shanghai Singapore
----- End of picture text -----

Size of Australian co-working market

NLA sqm / No of facilities

==> picture [224 x 129] intentionally omitted <==

----- Start of picture text -----

200,000 No. of facilities 350
NLA Growth in Australia has
been rapid during the past 5
years 300
150,000
250
200
100,000
150
100
50,000
50
0 0
2011 2012 2013 2014 2015 2016 2017
----- End of picture text -----

Source: Cushman Wakefield, Colliers, Knight Frank, and Dexus analysis.

22 Investor roadshow presentation

==> picture [67 x 27] intentionally omitted <==

Co-working

The office space spectrum

• Co-working tenants[1] occupy approximately 2% of Dexus’s group office portfolio

==> picture [445 x 191] intentionally omitted <==

----- Start of picture text -----

Short-term workspace Long-term workspace
DEXUS PLACE CO-WORKING SUITEX FITTED SUITES VACANT FLOOR
SERVICED OFFICES VACANT SUITES
1. Includes traditional serviced office and co-working tenants.
23 Investor roadshow presentation
----- End of picture text -----

==> picture [510 x 397] intentionally omitted <==

----- Start of picture text -----

Capital markets
24 Investor roadshow presentation
----- End of picture text -----

Transaction capitalisation rates

Healthy spread to bonds remains

• Capitalisation rates continue to compress across all sectors, falling to new historic lows

• Relative pricing to bonds remains attractive with wide spreads still evident

==> picture [436 x 159] intentionally omitted <==

----- Start of picture text -----

Capitalisation rates by sector Capitalisation rate spread to Government bonds
12% 8%
Office
11% IndustrialRetail 6%
All Healthcare
10%
4%
9%
2%
8%
0%
7% Office
Industrial
6% -2% Retail
All Healthcare
5% -4%
Jun-94 Jun-98 Jun-02 Jun-06 Jun-10 Jun-14 Jun-18 Jun-94 Jun-98 Jun-02 Jun-06 Jun-10 Jun-14 Jun-18
Source: MSCI, Dexus Research
1. Capitalisation rates represent national averages for each asset class.
25 Investor roadshow presentation
----- End of picture text -----

Pricing in Australia remains attractive Healthy spread to bonds

• Relative pricing and rent growth for Australian office markets compare favourably to global cities

==> picture [462 x 177] intentionally omitted <==

----- Start of picture text -----

Global yield and rent growth comparison Effective yield spread over local government bond
(10yr)
Effective 5% EU Asia US AU Spread to 4% EU Asia US AU
Yield local bonds
Chicago Sydney 3%
4% New York Melbourne Singapore 2% Tokyo Frankfurt
London Paris London Sydney
3% Brisbane San Franscisco 1% Chicago Melbourne Singapore
Tokyo Frankfurt Perth New York Brisbane
Paris 0% Perth San Franscisco
2% Hong Kong Hong Kong
-1%
1% -2%
-2% -1% 0% 1% 2% 3% 4% 5% 6% 7% -2% -1% 0% 1% 2% 3% 4% 5% 6% 7%
Forecast rent growth Forecast rent growth
Source: Savills, JLL, Trading Economics, Dexus Research.
Effective yields are based on A-grade office space.
Forecasts are based on JLL data for average prime net face rents from end 2018 to end 2020 and are not Dexus Research forecasts.
26 Investor roadshow presentation
----- End of picture text -----*

Top global transactions

Sydney remains attractive on a global scale

==> picture [479 x 154] intentionally omitted <==

----- Start of picture text -----

San
Paris Frankfurt Francisco London Chicago Sydney Singapore Hong Kong New York Tokyo
Coeur Campus@3333 600 West Wynyard Asia Square The Center Shiba Park
Defense Tower 185 (Phase 3) UBS HQ Chicago Ave Place (50%) Tower 2 (75%) Chelsea Market (86%)
Sale date Oct-17 Dec-17 Nov-17 Jun-18 Feb-18 Sep-17 Nov-17 May-18 Mar-18 Mar-18
Price ($USD bn) $2.1 $0.9 $0.6 $1.3 $0.5 $0.8 $1.5 $5.1 $2.4 $1.2
Cap rate 4.7% 4.4% 5.9% 4.0% 5.2% 4.8% 3.6% 2.4%-2.5% - -
Spread to bonds 3.9% 3.9% 2.8% 2.5% 2.1% 2.0% 1.0% c0% - -
----- End of picture text -----

Source: RCA, Cushman & Wakefield, Trading Economics, Dexus Research. 27 Investor roadshow presentation

==> picture [67 x 27] intentionally omitted <==

Transaction Internal Rates of Return

Compressed capitalisation rates offset by higher growth expectations

==> picture [451 x 209] intentionally omitted <==

----- Start of picture text -----

KEY:
Transactions in Australia
March 2013- June 2018, IRR%, Note size of bubble = Deal value Office
10.0% R etail
M1 And M2 Industry Parks Portfolio
Rosebud Plaza Super Retail Group Distribution Centre Industrial
Sydney Corporate Park Sugarland Shoppingtown
9.0% Waterfront Place Size = Deal value
Stud Park Shopping Centre Note – the larger the size of
Claremont Quarter Pacific Square Brimbank Shopping CentresClifford Gardens Shopping Centre Towns Square Redbank Plains the bubble the greater the transaction value
8.0% ’Sydney 6’ Portfolio
Westpac Place Cache Logistics Trust acquisition of Blackstone Portfolio
52 Martin Place Casey Central Allied Pinnacle to Qualitas Portfolio Sale
Quay Quarter Tower
7.0% Investa IPT Portfolio Sale Westfield Woden
IOF
1 Shelley Street
GIC Portfolio Sale 420 George Street Rockingham Centre Quay Quarter
6.0% Coles Distribution Centre Highpoint Shopping Centre Westpac Place
1 William Street Indooroopilly Shopping Centre
20 Bridge Street
5.0%
Jan-13 Jul-13 Jan-14 Jul-14 Jan-15 Jul-15 Jan-16 Jul-16 Jan-17 Jul-17 Jan-18 Jul-18
Investa Office Fund estimate based on weighted average discount rate and book value as at 30 June 2018.
Source: Dexus Research, JLL, Various Agents.
28 Investor roadshow presentation
IRR (%)
----- End of picture text -----

==> picture [510 x 396] intentionally omitted <==

----- Start of picture text -----

Developments
(Core & Trading)
29 Investor roadshow presentation
----- End of picture text -----

Infrastructure spend

Significant levels of infrastructure spend to support growth

Major road and rail projects 2012-2022, $mn[1]

==> picture [436 x 185] intentionally omitted <==

----- Start of picture text -----

$ million
18,000
Forecast
16,000 NorthLink WA
% Increase for next
14,000 Gateway North Upgrade +31% Cross River Rail 3yrs over past 3yrs
12,000 Toowoomba Second Range +208% West Gate Tunnel
Crossing
10,000 QLD: 31%
8,000
+4% VIC: 208%
6,000 WestConnex
4,000 Sydney Metro West NSW: 4%
ExpresswaHunter 2,0000 Reliance Rail (Stage 1 of Sydney Metro)Sydney Metro Northwest Sydney Metro City and Southwest (Stage 2 of Sydney Metro)
2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
1. Source: Deloitte Access Economics – Investment Monitor.
30 Investor roadshow presentation
----- End of picture text -----

Infrastructure pipeline supports demand Record NSW investment

==> picture [226 x 200] intentionally omitted <==

----- Start of picture text -----

2
4
6 7 5
3
1
----- End of picture text -----

==> picture [40 x 110] intentionally omitted <==

• What’s already underway? • $87 billion to be spent on transport and infrastructure over the next 4 years

• 1 • Moorebank Intermodal : (2018) $2 billion project providing road and rail freight services for imports and exports

• 2 • NorthConnex : (2019) 9km tunnel that will link the M1 Pacific Motorway to the M2

• 3 • WestConnex : (2019 -2023) $16 billion project from Western Sydney connecting the CBD and Inner City with the M4 & M5

• 4 • Sydney Metro (2024) to deliver 31 metro stations. Metro West (2025+) will : Norwest (2019), Metro City & Southwest provide a direct connection between Parramatta and Sydney CBDs.

==> picture [42 x 105] intentionally omitted <==

• 5 • Light Rail : Sydney CBD & South East (2019). Parramatta Light Rail (2023+)

• Committed projects

• 6 • Badgerys Creek Airport : $5 billion. First stage due for completion by 2025

==> picture [141 x 43] intentionally omitted <==

----- Start of picture text -----

7 • M12 Motorway : $1.2 billion. Completion due 2022
Source: Draft Greater Sydney Structure Plan 2056.
31 Investor roadshow presentation
----- End of picture text -----

==> picture [67 x 27] intentionally omitted <==

Core pipeline extends across mixed uses and locations $4.2 billion group pipeline + circa $2 billion potential concept opportunities

==> picture [448 x 208] intentionally omitted <==

----- Start of picture text -----

Exposure across Australian CBDs
Industrial Retail Healthcare
Office City retail Mixed use
The Annex, 12 Creek St, Brisbane 175 Pitt Street, Sydney Waterfront Precinct, Brisbane Quarrywest, Greystanes Carillon City, Perth Calvary Adelaide
Dexus and Dexus Wholesale Dexus and Dexus Office Dexus and Dexus Wholesale Dexus and Dexus DWPF Hospital
Property Fund Partner Property Fund Industrial Partner HWPF
$1,860m $218m $540m $942m $320m $325m [1]
($863m committed) ($108m committed) (Uncommitted) ($94m committed) (Uncommitted) (committed)
including: including: including: including: including: including:
100 Mount Street, North Sydney 175 Pitt Street, Sydney Waterfront Precinct, Brisbane Quarrywest, Greystanes Knox City Shopping Ctr Calvary Private Hospital
180 Flinders Street, Melbourne 1 Farrer Place, Sydney Dexus Industrial Estate, Carillon City, Perth
12 Creek Street, Brisbane 44 Market Street, Sydney Laverton North
11 Talavera Road, Macquarie Pk 321 Kent Street, Sydney Recent land bank
Waterfront Precinct, Brisbane acquisitions
62% of the pipeline Circa 7.4% of balance sheet FUM is allocated to development [2] at 30 June 2018
1. Calvary Adelaide Hospital estimated completion value.
2. Includes trading and value-add opportunities.
32 Investor roadshow presentation
----- End of picture text -----

100 Mount Street, North Sydney Committed development project

==> picture [463 x 208] intentionally omitted <==

----- Start of picture text -----

$231m project cost [1] 7-8% yield on cost 42,100 square metres 63% leased [2] Feb-2019 completion
1. Dexus interest in development cost (including cost of land).
2. Includes Heads of Agreement signed post 30 June 2018.
33 Investor roadshow presentation
----- End of picture text -----

180 Flinders Street, Melbourne Committed development project

==> picture [463 x 179] intentionally omitted <==

----- Start of picture text -----

$146m project cost 6-7% yield on cost 20,200 square metres 39% leased [1] Mid 2020 completion
----- End of picture text -----

==> picture [102 x 14] intentionally omitted <==

----- Start of picture text -----

1. Includes Heads of Agreement signed post 30 June 2018.
34 Investor roadshow presentation
----- End of picture text -----

==> picture [67 x 27] intentionally omitted <==

Waterfront Precinct Masterplan, Brisbane Uncommitted development project

==> picture [463 x 199] intentionally omitted <==

----- Start of picture text -----

$675m project cost [1] 139,700 square metres mixed use
1. Dexus share of development cost.
35 Investor roadshow presentation
----- End of picture text -----

140 George Street, Parramatta Uncommitted development project[1]

==> picture [463 x 201] intentionally omitted <==

----- Start of picture text -----

A-grade office development 45,700 square metres commercial
1. Dexus Office Partnership asset (50% DXS).
36 Investor roadshow presentation
----- End of picture text -----

Industrial landbank acquisitions

Uncommitted development pipeline restocked

==> picture [438 x 212] intentionally omitted <==

----- Start of picture text -----

Replenished group industrial pipeline in core locations through $188 million of acquisitions,
with an end value of circa $700 million [1]
11-167 Palm Springs Road, Ravenhall, VIC 54 Ferndell Street, South Granville, NSW 425-479 Freeman Road, Richlands, QLD
Circa $480 million over 5-7 years Circa $140 million over 2 years Circa $80 million over 2-3 years
- 127-hectare site in core West Melbourne - 10-hectare brownfield opportunity in a tightly - 9-hectare brownfield opportunity is located in
industrial precinct held industrial market with constrained land close proximity to DWPF’s Drive Industrial
- DXS 50%, DWPF 50% supply Estate
- Up to 380,000sqm prime commercial and - DXS 100% - DXS 100%
industrial development planned over 5-7 years - 54,000sqm across four buildings with varying - 52,000sqm with a flexible design to suit
tenancy sizes varying tenancy sizes
Over the past eight years, Dexus has demonstrated its ability to develop and lease 730,000 square metres of industrial projects in Sydney, Melbourne and Brisbane.
1. Three acquisitions announced post 30 June 2018 being 11-167 Palm Springs, Ravenhall, VIC, 425-479 Freeman Road, Richlands, QLD and 54 Ferndell Street, South Granville, NSW.
37 Investor roadshow presentation
----- End of picture text -----

Ravenhall - over 1.2 million people within 30 minute trucking time 30 minutes or less to Port of Melbourne, CBD and Melbourne Airport

==> picture [320 x 200] intentionally omitted <==

----- Start of picture text -----

Melbourne
Airport
24.4km
26mins
Ravenhall
10min
20min CBD
25.4km 28.5km
30min 23mins Port 30mins
Melbourne
Source: Esri - ArcGIS, Dexus Research.
38 Investor roadshow presentation
----- End of picture text -----

==> picture [67 x 27] intentionally omitted <==

Ravenhall - favourable compared to other precincts Site is comparable to West Melbourne but with improved highway access

==> picture [445 x 214] intentionally omitted <==

----- Start of picture text -----

Ravenhall West Melbourne North Melbourne South-east Melbourne
59.6km
77mins
25.6km
24.4km 27mins
26mins
35.2km
Ravenhall 22.7km 48mins
29mins 16.2km
28.5km 22mins 37.5km
30mins 51mins
18.3km
20mins
25.4km
23mins
23.6km
27km 35mins
33mins
Avg. market rent - $75/sqm Avg. market rent - $75/sqm Avg. market rent - $80/sqm Avg. market rent - $88/sqm
Source: Esri - ArcGIS, JLL, Dexus Research.
Market rents based on average prime existing nominal net rents for West, North and South-east Melbourne for Q2-18 sourced from JLL.
39 Investor roadshow presentation
----- End of picture text -----*

Ravenhall - closer to regional Victoria than other precincts With quickest access to regional locations to the north and west

	Origin / Destination	Ballarat	Bendigo	Geelong	Warrnambool
	Ravenhall	62min 90km	103min 141km	55min 74km	176min 264km
	West Melb.	+5mins +6kms	+8mins +11kms	-3mins -14kms	-4mins -13kms		103mins
	North Melb.	+26mins +29kms	+3mins -6kms	+18mins +19kms	+17mins +19kms		62mins
	South-east	+45mins	+33mins	+29mins	+28mins
	Melb.	+57kms	+48kms	+32kms	+33kms
						176mins
								55mins

Source: Esri - ArcGIS, Dexus Research.

Investor roadshow presentation

==> picture [67 x 27] intentionally omitted <==

40

Ravenhall - adjacent to large residential catchment

==> picture [30 x 5] intentionally omitted <==

----- Start of picture text -----

Ravenhall
----- End of picture text -----

==> picture [168 x 64] intentionally omitted <==

----- Start of picture text -----

Source: Esri - ArcGIS, ABS, Dexus Research.
41 Investor roadshow presentation
----- End of picture text -----

==> picture [67 x 27] intentionally omitted <==

Granville - around 3.2 million people within 40 minute trucking time Over 70% of total Sydney metropolitan population

==> picture [388 x 203] intentionally omitted <==

----- Start of picture text -----

40min
30min
20min
10min
CBD
Granville
Port &
Airport
Source: Esri - ArcGIS, Dexus Research.
42 Investor roadshow presentation
----- End of picture text -----

Granville - favourable compared to other Sydney precincts 42-45 minutes required from western sites to serve an equal amount of people

==> picture [436 x 187] intentionally omitted <==

----- Start of picture text -----

Origin / Destination Sydney CBD Port Botany Sydney Airport 40min
Granville 39min 44min 46min
25km 32km 30km
Outer West + 6mins + 5mins + 4mins
Sydney + 30kms + 22kms + 22kms
South West + 11mins - 2mins 0mins
Sydney + 22kms + 10kms + 9kms 40min
Population
within 40min Granville
Granville 3.21mil
Outer West Sydney 3.06mil
South West Sydney 2.73mil
40min
----- End of picture text -----

==> picture [89 x 14] intentionally omitted <==

----- Start of picture text -----

Source: Esri - ArcGIS, Dexus Research.
43 Investor roadshow presentation
----- End of picture text -----

Granville

More affluent population located within 40 minute catchment

==> picture [407 x 209] intentionally omitted <==

----- Start of picture text -----

CBD
Granville
Port &
Airport
Source: Esri - ArcGIS, Dexus Research.
44 Investor roadshow presentation
----- End of picture text -----

Trading opportunity

201 Elizabeth Street, Sydney

==> picture [463 x 180] intentionally omitted <==

----- Start of picture text -----

410 room luxury hotel280 residential apartments high-end retail Stage 1 DA granted
----- End of picture text -----

==> picture [89 x 5] intentionally omitted <==

----- Start of picture text -----

45 Investor roadshow presentation
----- End of picture text -----

==> picture [67 x 27] intentionally omitted <==

Trading opportunity

12 Frederick Street, St Leonards (Stage 1)

• North Shore Health Hub - specialist healthcare facility

• Innovative design solution including elevated bridge link to adjoining North Shore Private Hospital

• Pre-commitments with leading Australian healthcare providers including Ramsay Healthcare, Genesis Cancer Care and North Shore Radiology

• Land rezoned and detailed planning applications approved

• Construction commencing Q4 2018 with completion forecast for Q2 2020

==> picture [175 x 118] intentionally omitted <==

==> picture [175 x 117] intentionally omitted <==

46

Investor roadshow presentation

Trading opportunity

12 Frederick Street, St Leonards (Stage 2)

• St Leonards Health and Education Precinct (Stage 2) - combining world-class research facilities with supporting uses

• Dexus-owned and controlled site co-located with the Royal North Shore Hospital, a major NSW public hospital and North Shore Private Hospital

• 85,000sqm Gross Floor Area (subject to rezoning approval)

• Potential uses include healthcare, office, hotel, research/education, key worker housing and retail

• Potential phased delivery to 2025

47

Investor roadshow presentation

==> picture [175 x 116] intentionally omitted <==

==> picture [175 x 117] intentionally omitted <==

==> picture [67 x 27] intentionally omitted <==

Future developments and concept opportunities

==> picture [374 x 58] intentionally omitted <==

----- Start of picture text -----

48 Investor roadshow presentation
----- End of picture text -----

60 and 52 Collins Street, Melbourne

Acquisitions provide a presence in tightly held ‘Paris end’ of the Melbourne CBD

==> picture [463 x 204] intentionally omitted <==

----- Start of picture text -----

Acquired for $230m [1] 35,000 square metre prime grade development opportunity
Concept plans of development opportunity
1. Excluding acquisition costs. Settlement of 60 Collins Street expected to occur by end of October 2018. Settlement of 52 Collins Street expected to occur in July 2019.
49 Investor roadshow presentation
----- End of picture text -----

60 and 52 Collins Street, Melbourne (street scape) Acquisitions provide a presence in tightly held ‘Paris end’ of the Melbourne CBD

==> picture [148 x 171] intentionally omitted <==

50 Investor roadshow presentation

==> picture [152 x 171] intentionally omitted <==

==> picture [161 x 172] intentionally omitted <==

==> picture [67 x 27] intentionally omitted <==

Ward Street precinct, North Sydney Uncommitted development project

==> picture [456 x 203] intentionally omitted <==

----- Start of picture text -----

Dexus Office Partnership 201 Miller Street, 56 and 66 Berry Street, 22 Ward Street
Proposed GFA for Site B
is up to a maximum of
96,424sqm
�201 Miller Street - 100%
�56 Berry Street - 100%
�66 Berry Street - 30%
strata unit ownership
1. Dexus Office Partnership ownership interest.
51 Investor roadshow presentation
----- End of picture text -----*

Potential concept opportunities Shortlisted or exclusive position

==> picture [438 x 176] intentionally omitted <==

----- Start of picture text -----

Victoria Cross, North Sydney - office/retail Central, Sydney - office/ residential
----- End of picture text -----

==> picture [89 x 5] intentionally omitted <==

----- Start of picture text -----

52 Investor roadshow presentation
----- End of picture text -----

==> picture [67 x 27] intentionally omitted <==

Potential concept opportunities

Longer term opportunities controlled by Dexus

==> picture [437 x 208] intentionally omitted <==

----- Start of picture text -----

Norwest – NSW
Axxess Corporate Park - Victoria
3 Brookhollow Avenue, Baulkham Hills
38km north west of Sydney CBD
39 mins to Martin Place (by Metro)
19 mins to Macquarie Park (by Metro)
53 Investor roadshow presentation
----- End of picture text -----

==> picture [510 x 397] intentionally omitted <==

----- Start of picture text -----

Summary
54 Investor roadshow presentation
----- End of picture text -----

Summary

Strategy set up to deliver distribution growth through the cycle

• Strong foundations and well positioned for continued success in a rapidly changing business environment

• Highly engaged workforce continuing to deliver results

• Balance sheet strength provides capacity for current and future development projects

• Market guidance[1] for the 12 months ending 30 June 2019 for distribution per security growth of circa 5%

==> picture [211 x 149] intentionally omitted <==

----- Start of picture text -----

Dexus distribution per security (cents) [2]
6.9%
cps CAGR
50 47.8
45.47
45 43.51
41.04
40 37.56
36.00
35
32.10 Artist’s impression of Calvary Adelaide Hospital
30
25
20
FY12 FY13 FY14 FY15 FY16 FY17 FY18
----- End of picture text -----

1. Barring unforeseen circumstances, guidance is supported by the following assumptions: Impacts of announced divestments and acquisitions; FFO per security growth of circa 3%, underlying FFO per security growth of circa 3% underpinned by Dexus office portfolio like-for-like growth of 4-5%, Dexus industrial portfolio like-for-like income growth of 2.5-3.5%, management operations FFO and cost of debt in line with FY18; trading profits of $35-40 million net of tax; maintenance capex, cash incentives, leasing costs and rent free incentives of $155-165 million; and excluding any further transactions.

2. Adjusted for the one-for-six security consolidation completed in FY15. Compound annual growth rate (CAGR) is calculated over six years 55 Investor roadshow presentation

==> picture [67 x 27] intentionally omitted <==

Important information

• This presentation is issued by Dexus Funds Management Limited (DXFM) in its capacity as responsible entity of Dexus (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 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 security holder or potential investor may require in order to determine whether to deal in Dexus 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 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.

==> picture [67 x 27] intentionally omitted <==

56

Investor roadshow presentation

==> picture [510 x 396] intentionally omitted <==