DEXUS — Investor Presentation 2020

Nov 15, 2020

Dexus (ASX: DXS)

ASX release

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16 November 2020

UBS Australasia Virtual Conference

Dexus releases the attached presentation to be referred to in investor meetings at the 2020 UBS Australasia Conference today.

Authorised by Brett Cameron, General Counsel and Company Secretary of Dexus Funds Management Limited

For further information please contact:

Investors

Merren Favretto Senior Manager, Investor Relations +61 2 9080 1559 +61 427 986 355 merren.favretto@dexus.com

Media

Louise Murray Senior Manager, Corporate Communications +61 2 9017 1446 +61 403 260 754 louise.murray@dexus.com

About Dexus

Dexus is one of Australia’s leading real estate groups, managing a high-quality Australian property portfolio valued at $32.0 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 $16.5 billion of office and industrial properties. We manage a further $15.5 billion of office, retail, industrial and healthcare properties for third party clients. The group’s $10.4 billion development pipeline provides the opportunity to grow both portfolios and enhance future returns. With 1.8 million square metres of office workspace across 51 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 29,000 investors from 21 countries. With 36 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

Dexus Funds Management Ltd ABN 24 060 920 783, AFSL 238163, as Responsible Entity for Dexus (ASX: DXS) Level 25, 264 George Street, Sydney NSW 2000

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Dexus Funds Management Limited ABN 24 060 920 783 AFSL 238163 as responsible entity for Dexus

Dexus overview

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Embedded value across key parts of the business

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-
$16.5 billion directly owned - $14.2bn office, $2.2bn industrial and $0.1bn healthcare
-
$10.86 NTA [1] per security
Property -
High quality portfolio comprising 94% prime-grade office buildings
portfolio - Staggered lease expiry profile
- Fixed rent reviews of 3.5%-4.0% for office and 3.0%-3.5% for industrial
+
-
Diversified annuity-style income stream
-
Funds $15.5 billion of funds under management
-
management Built in organic growth in existing and new funds
-
Accelerating opportunities to expand the funds platform
+
- Circa $95 million of trading profits [2] to be realised over FY21 and FY22 [3]
Trading -
Profits derived from multiple asset classes
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Embedded value in
$10.4 billion
Development group
+ development
(core)
pipeline with
minimal current
commitments
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Capital management

Maintain diverse sources of capital and a strong balance sheet

1. Net tangible asset backing.

2. Pre-tax.

3. During FY20, Dexus sold a 25% interest in 201 Elizabeth Street, Sydney for $157.5 million and entered into a put and call option to sell the remaining 25% interest. Dexus exercised the put option in July 2020 for a further $157.5 million. During FY20, Dexus also sold the North Shore Health Hub on a fund-through basis to HWPF and will continue to manage the development, with trading profits realised across FY20 and FY21, with the amount for each financial year dependent on the progress of the development and leasing. Post 30 June 2020, Dexus contracted to sell six trading assets to Dexus Australian Logistics Trust which are expected to realise circa $35 million of trading profits (pre-tax) in FY21 and FY22 (in the event the options are exercised). Dexus has exchanged contracts to sell the first tranche of the portfolio in October 2020 and entered into put and call options to sell the second tranche in mid-2021.

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Track record of delivering distributions FY21 distribution per security guidance

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• Subject to there being no reinstatement of any major lockdowns or unforeseen circumstances, Dexus expects an FY21 full year distribution per security amount that is consistent with FY20

• In FY20, Dexus delivered a full year distribution of 50.3 cents per security

• Current pricing reflects an income distribution yield[2] of 5.3%

History of Dexus distribution per security

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cents
5.8%
55
CAGR [1]
50.2 50.3 50.3
FY12-FY20
50 47.8
45.47
45 43.51
41.04
40
37.56
36.00
35
32.10
30
25
20
FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21
(Guidance)
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1. Compound Annual Growth Rate (CAGR) is calculated over eight years. Adjusted for the one-for-six security consolidation in FY15.

2. Reflecting Dexus closing price as at 13 November 2020 and FY21 distribution per security guidance.

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Scalable and expanding funds management business $15.5 billion of diversified funds under management

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Dexus Wholesale Healthcare Wholesale Dexus Office Partnership Dexus Australian Dexus Industrial Australian Industrial Dexus Australian Logistics
Property Fund Property Fund Commercial Trust Partnership Partnership Trust
$5.4bn [1]
$10.3bn $0.9bn [2] Office partnership $0.6bn $0.4bn [1] $0.4bn $2.1bn [1]
Diversified fund Healthcare fund › Established 2013 Office partnership Industrial partnership Industrial partnership Logistics trust
› Established 1995 › Launched 2017 › 21 properties › Launched in 2020 › Established 2014 and › Established 2012 › Launched November
› 43 properties › $903m portfolio across › Acquired and de-listed › 50% interest in iconic recapitalised in 2019 › 20 properties 2018
› Outperform benchmark 5 properties CPA portfolio April 2014 prime-grade Rialto › Core strategy with › Strong performance › Growth strategy
Towers, located in growth mandate through develop to
over 1, 3, 5, 7 & 10 years Melbourne CBD since inception core and acquisitions
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Future focus – launch unlisted opportunity fund series

All figures as at 30 June 2020 unless otherwise stated.

1. Includes Dexus ownership interest.

2. Comprised of the Calvary Adelaide Hospital ($375 million), North Shore Health Hub ($225 million on an 'as-if-complete' basis), GP Plus Health Care Centre ($43.0 million), SAHMRI 2 ($223.1 million - representing HWPF's 50% share) and College Junction ($36.5 million), which is due for settlement on 30 November 2020.

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Embedded organic growth prospects for funds Supported by diversified development pipeline

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• Third party capital has demonstrated its resilience to look through cycles and put capital to work in prior downturns

• City-shaping development projects to be activated at the right time, subject to tenant pre-commitment

• Minimal upfront capital required in order to retain optionality to create longer-dated and income producing projects

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Group development pipeline $10.4 billion
Funds management development pipeline $5.2 billion
$540 million $4.0 billion $650 million
Total committed projects Total uncommitted projects Concept projects
North Shore Health Hub Horizon 3023 Industrial Estate Central Place Waterfront Place Ward Street Masterplan
St Leonards NSW Ravenhall VIC Sydney NSW Brisbane QLD North Sydney NSW
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Fundamentals supporting growth of industrial in funds Industrial take-up driven by food and e-commerce sectors

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• Demand has been driven by online retailing as well as defensive players including food and beverage retailers and logistics firms - Online sales increased by approximately 69% in the year to September 2020 (ABS)

Solid growth in online sales, benefiting customers like Amazon

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Food Household goods Pharmaceuticals Online Total sales
Index
200
180
160
140
120
100
80
Sep-19 Dec-19 Mar-20 Jun-20 Sep-20
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Progressing key development projects to support growing customers

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Horizon 3023, Ravenhall will contribute circa
400,000sqm of space built out to 2025
37,000sqm
commitment
from Amazon
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Source: ABS, JLL Research. Key markets include Outer West Sydney, South West Sydney, West Melbourne, South East Melbourne, South Brisbane , Australian Trade Coast and East Perth.

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Increasing exposure to healthcare asset class Latest acquisition increases group exposure to over $1 billion

Healthcare Wholesale Property Fund (HWPF)

HWPF portfolio composition[1]

• In October, Dexus and the HWPF acquired (50/50) the Australian Bragg Centre (SAHMRI 2) in Adelaide - one of the largest single-asset healthcare acquisitions in Australia

• Completed significant development of Calvary Adelaide Hospital

• Acquired North Shore Health Hub, St Leonards which is targeting a 5 star Green Star design rating

• Portfolio WALE of 26.9 years and weighted average capitalisation rate of 5.31%

• Delivered a one-year return of 14.5% to 30 September 2020

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ABC (SAHMRI 2)
25%
Calvary Adelaide
Hospital
41%
College Junction
4%
North Shore
GP Plus Health Care
Health Hub
Centre
25%
5%
FY20
FUM [1]
new equity
$903m
$80m
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1. As at 30 September 2020. Includes both ABC (SAHMRI 2) and the North Shore Health Hub on their respective 'as-if-complete' valuations and includes College Junction (settlement expected in November 2020).

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We believe offices and cities will remain relevant As employment growth resumes post COVID-19

• Australia’s CBDs contribute circa 80% to national GDP supporting hundreds of thousands of businesses and millions of jobs

• Dexus does not believe the ongoing megatrend of urbanisation will shift as CBDs and the concentration of activity continues to drive innovation and collaboration

• Australian office markets will continue to benefit from urbanisation, growth in capital cities and growth in the white-collar service sector. For example over the next 10 years Deloitte[1] forecast capital city white collar employment to grow by 1.9% per annum, comprising of 1.28 million jobs

Office buildings will continue to play a pivotal role in developing culture, and fostering collaboration and innovation

• Physical occupancy rose in all CBD markets (except Melbourne) in October 2020 as Australians working in cities commence return to their workplaces[2]

Physical office occupancy levels

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Perth 77%
Brisbane 61%
Sydney 40%
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1. Deloitte - Capital cities white collar employment Q2 2020.

2. Property Council Australia.

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The role of the office

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Importance in building culture, collaboration, innovation and more

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A productive workplace
leads to profitability
Collaboration Social Interaction Wellbeing & Upskilling
99%
72% 90%
of Executives believe that fostering of Executives believe that of learning is a combination of
innovation [1] is best done
building culture is more experiential and social, which is
face-to-face or a combination of
effectively done in the office better done face-to-face [2]
face-to-face and online
environment [1]
Innovation Culture Employee Retention
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1. Dexus customer C-Suite survey with 153 respondents (June 2020). 2. Global Knowledge – The 70:20:10 Model. Source: Dexus Research.

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Accelerated evolution of the workspace Dexus delivers a flexible and seamless experience

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Traditional spaces Fitted spaces Flexible spaces Meeting spaces
7 years+ 2 years+ 6 months + 1 hour+
Dominant portfolio offering. Fully fitted out suites with shorter SuiteX provides high quality Dexus Place provides meeting, video
Customer demand expected to lease terms. Targeted at workspace that enables conferencing and training facilities that
remain, however, customer reducing the pain points companies to remain agile while facilitate cost effective interaction and
requirements for flexibility will associated with real estate having access to turn-key collaboration across physical and virtual
continue to evolve over time. occupation for SMEs. solutions to support growth. environments.
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We will continue to work with our customers on the future of workspace

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Australia remains an attractive investment destination Long-term fundamentals for real estate remain favourable

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Growth is subdued,
GDP growth forecasts by country [1] however less volatility
in Australia vs other
% pa 2020 2021 global markets
10% 8.2%
5.9%
5.2% 4.4% 5.0% 4.2%
5% 2.3% 3.1% 3.0% 1.9%
0%
-5%
-4.3% -4.2%
-5.3%
-6.1% -6.0% -6.0%
-7.1%
-10%
-9.8%
-15%
United Canada New Singapore Germany Japan United Australia China
Kingdom Zealand States
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Australia leading developed world in population growth (2011-2020, %p.a.)[2]

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1.5%
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1.1%
0.7% 0.7%
0.5%
0.2%
(0.2%)
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1. IMF October 2020.

2. World Data Bank.

3. Global liveability ranking, The Economist, released in August 2019.

4. Real interest rate calculated using expected inflation (10-year). Source: RBA, ABS, MSCI as at October 2020.

Highly liveable cities attractive to global talent[3]

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All of Australia’s
five largest
capital cities are #18 Brisbane
ranked in the top
20 most liveable
cities globally
#14 Perth
#3 Sydney
#10 Adelaide
#2 Melbourne
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Real estate yield spreads to real interest rate [4] record low interest High spreads &
rates implies
12.0% 25 year avg. spread 4.7% favourable timing to
deploy capital
Current spread 5.1%
10.0%
8.0%
6.0%
4.0%
2.0%
0.0%
1995 2000 2005 2010 2015 2020
-2.0%
Spread Office yield Real interest rate Industrial Yield Retail Yield
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Optimising the composition of Dexus’s office portfolio Selective asset recycling to drive stronger investor returns

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- Recent asset sales support current book values

• Reinforcing the disconnect between the public and private markets

Circa $7.4 billion in asset sales1 since FY15	Circa $7.4 billion in asset sales1 since FY15	Circa $7.4 billion in asset sales1 since FY15	Circa $7.4 billion in asset sales1 since FY15	Circa $7.4 billion in asset sales1 since FY15	Circa $7.4 billion in asset sales1 since FY15	Circa $7.4 billion in asset sales1 since FY15	Circa $7.4 billion in asset sales1 since FY15	Circa $7.4 billion in asset sales1 since FY15	Circa $7.4 billion in asset sales1 since FY15	Circa $7.4 billion in asset sales1 since FY15	Circa $7.4 billion in asset sales1 since FY15	Circa $7.4 billion in asset sales1 since FY15
FY15		FY16		FY17		FY18		FY19		FY20		Post 30 June 2020
$933m 79% DXS share		$1.1bn 85% DXS share		$706m 62% DXS share		$408m 62% DXS share		$2.1bn 95% DXS share		$1.0bn 100% DXS share		$1.1bn 44% DXS share

• Asset recycling proceeds will be used to

• Organically fund key projects in the development pipeline

• Support growth initiatives in the Funds Management business

• Invest in higher returning opportunities

• Buy back Dexus securities via the on-market securities buy back

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Circa 3% In line with Circa 11%
premium to December premium to
June 2020 2020 book June 2020 book
book value value value
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60 Miller Street, North Sydney NSW (100% DXS)	45 Clarence Street, Sydney NSW (100% DXS)		452 Flinders Street, Melbourne VIC (100% DWPF)
Book value at sale $265 million Sale price $273 million Premium to BV Circa +3%	Book value at sale $530 million Sale price $530 million Premium to BV +0%		Book value at sale $397 million Sale price $440 million Premium to BV Circa +11%

1. Asset sales announced or exchanged during the period across the group.

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Summary

• Continue to operate in an uncertain environment

• Will still face significant challenges over the coming year

• Expect an economic recovery, but the timing remains unknown

• In this environment:

• We have a strong third party capital partners to invest alongside

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The Annex, 12 Creek Street, Brisbane.
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• We are focused on leasing and maintaining occupancy levels, which is supported by our high-quality portfolio and diverse customer base

• Underpinned by our strong financial position

• Subject to no unforeseen circumstances, Dexus expects an FY21 full year distribution per security consistent with FY20 of 50.3 cents

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Dunlop 380 Dohertys Road, Truganina.
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Appendices
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Office portfolio snapshot at 30 September 2020 Enquiry and leasing activity despite subdued economic conditions

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$14.2 billion [5]
Office portfolio
13%
6%
63%
18%
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Leased[1] 53,600sqm

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Occupancy [2]
95.4%
30 June 2020: 96.5%
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Incentives [3]
16.8%
30 June 2020: 17.1%
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WALE [4]
4.3 years
30 June 2020: 4.2 years
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1. Including Heads of Agreement.

2. By Income.

3. Average.

4. Weighted average lease expiry. 5. DXS balance sheet as at 30 June 2020. Data as at 30 September 2020 unless otherwise stated.

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Dexus office portfolio position High quality portfolio with staggered expiries & diverse customer base

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High quality office portfolio Office portfolio - staggered lease expiry profile Diversity of office customers with strong covenants
50%
Financial and Insurance Services 15.5%
45%
Other professional, Scientific and Technical… 14.7%
Prime grade Long-dated
94% [1] Public Administration and Safety 12.6%
40% lease expiries
Legal services 11.8%
Rental, Hiring and Real Estate Services 8.2%
35%
Transport, Postal and Warehousing 5.6%
94% 30% Information Media and Telecommunications 4.9%
Prime Mining 4.8%
Grade 25% Accommodation and Food Services 4.0%
Insurance and Superannuation Funds 3.9%
20%
Retail Trade 2.7%
Construction 2.7%
Secondary 15% 13% target threshold
6% Electricity, Gas, Water and Waste Services 2.6%
10% Education and Training 1.9%
Health Care and Social Assistance 1.6%
5% Wholesale Trade 1.0%
Other 1.4%
0%
Available FY21 FY22 FY23 FY24 FY25 FY26+
Government and knowledge related industries
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1. Prime grade buildings represent 94% of the office portfolio including stabilised assets only and excluding development-affected assets and land.

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Prime assets benefit from a ‘flight to quality’ in past cycles Dexus has historically outperformed market office occupancy levels

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Office net absorption yoy – Sydney CBD

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Average 1999-2008 2009-2020 Prime assets have
persistently
Prime +84k +40k outperformed,
Secondary -24k -28k including in
periods of crisis
NLA sqm
250,000
Tech GFC
Wreck
200,000
150,000
100,000
50,000
0
-50,000
-100,000
-150,000
Prime Secondary
-200,000
1999 2001 2003 2005 2007 2009 2011 2013 2015 2017 2019
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Office occupancy rate – Australia
Dexus occupancy
rates consistently
% NLA occupied
above market,
100% underpinned by high-
quality portfolio (94%
Prime)
96% Dexus [(1)]
Market
92%
88%
84%
1999 2001 2003 2005 2007 2009 2011 2013 2015 2017 2019
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Source: JLL, company information.

1. Represents Dexus Office Trust until 2003 and includes acquisition of CPA from 2014 onwards.

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Industrial portfolio snapshot at 30 September 2020 Strong leasing activity across core portfolio and new developments

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$2.2 billion [5]
Industrial portfolio
10%
1%
53%
36%
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Leased[1]

87,788sqm

Occupancy[2] 94.8% 30 June 2020: 95.6%

Incentives[3] 10.8% 30 June 2020: 13.4%

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WALE [4]
4.1 years
30 June 2020: 4.1 years
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1. Including Heads of Agreement.

2. By Income.

3. Average.

4. Weighted average lease expiry. 5. DXS balance sheet as at 30 June 2020. Data as at 30 September 2020 unless otherwise stated.

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Important information

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• 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.

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