DEXUS — Investor Presentation 2020

May 4, 2020

Dexus (ASX: DXS)

ASX release

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5 May 2020

2020 Macquarie Australia Conference

Dexus releases the attached presentation to be presented virtually at the 2020 Macquarie Australia Conference today.

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

For further information please contact:

Investors

Jessica Johns Senior Manager, Investor Relations +61 2 9017 1368 +61 427 706 994 jessica.johns@dexus.com

Media

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

Disclaimer

This presentation was prepared against the backdrop of the unfolding disruption caused by the outbreak of COVID-19 and the resultant deterioration in business conditions. It is apparent that there are potential implications from the outbreak for the global and domestic economy, volatility in equity markets, liquidity in credit markets and impact on the appetite for and pricing of real estate assets which are uncertain and unquantifiable at this time. This presentation should be read and considered in light of that uncertainty.

About Dexus

Dexus is one of Australia’s leading real estate groups, proudly managing a high-quality Australian property portfolio valued at $33.8 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 $16.8 billion of properties, with a further $17.0 billion of properties managed on behalf of third-party clients. The group’s $11.2 billion development pipeline provides the opportunity to grow both portfolios and enhance future returns. With 1.8 million square metres of office workspace across 55 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 35 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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Macquarie Australia Conference Ross Du Vernet, CIO 5 May 2020

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

Agenda

• COVID-19 and Dexus

• March 2020 portfolio update

• Well positioned heading into this crisis

• Dexus’s response

• Growth through the cycle

• COVID-19 and the office market outlook

• Summary

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Rialto Towers, 525 Collins Street, Melbourne VIC.
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Office portfolio at 31 March 2020 Portfolio in a robust position and yet to show impact of crisis

Leased[1]

33,284sqm

Occupancy[2] 97.2% 31 Dec 2019: 97.4%

Incentives[3] 16.9% 31 Dec 2019: 16.2%

WALE[4] 4.4 years 31 Dec 2019: 4.5 years

1. Including Heads of Agreement.

2. By Income.

3. Average.

4. Weighted average lease expiry.

5. DXS balance sheet as at 31 December 2019.

6. Canberra assets held for sale at Dec-19 not shown on map.

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$14.1 billion [5]
Office portfolio [6]
12%
6%
65%
16%
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Industrial portfolio at 31 March 2020 Portfolio in a robust position and yet to show impact of crisis

Leased[1]

21,094sqm

Occupancy[2]

96.0%

31 Dec 2019: 96.0%

Incentives[3] 13.0% 31 Dec 2019: 13.3%

WALE[4] 4.4 years 31 Dec 2019: 4.6 years

1. Including Heads of Agreement. 2. By Income.

2. Average.

3. Weighted average lease expiry. 5. DXS balance sheet as at 31 December 2019.

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$2.5 billion [5]
Industrial portfolio
9%
1%
54%
36%
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Well positioned heading into this crisis Property portfolio is in strong shape and underpinned by a strong balance sheet

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High Portfolio Occupancy [1] High Quality Office Portfolio [2]
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Diversified Office customer/tenant base[2]

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Prime Grade
89%
Premium
Grade 33%
Office 97.2%
Industrial 96.0% 89% Prime
Grade
Development
& Other 6%
A-Grade
56%
B-Grade
5%
Strong balance sheet at 30 April 2020
Gearing [3] Headroom and liquidity Duration of debt Diverse sources of debt
38% bank
25.4% [4] $1.7bn 7.1 years
62% capital markets
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1. At 31 March 2020 and by income.

2. As at 31 December 2019.

3. Target gearing range of 30-40%.

4. Proforma 31 March 2020 look-through gearing including the settlement of GIC's additional interest in the Dexus Australian Logistics Trust core portfolio and acquisition of Rialto Towers (before transaction costs) previously announced on 1 April 2020 and 6 April 2020, respectively.

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Real estate markets are well positioned Office vacancy rates below 10-year averages in most markets

Office vacancy rates by location % of NLA

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24%
Current market prime vacancy rate (Mar-20)
10-year average market prime vacancy rate
20% DXS office portfolio vacancy rate by income (Mar-20)
16%
14%
12%
11%
10%
8%
5%
4%
2%
1%
0%
Sydney CBD Melbourne CBD Brisbane CBD Perth CBD North Sydney Parramatta
Dexus Portfolio Weighting
56% 16% 12% 6% 5% 2%
(Dec-19)
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Source: JLL, company information.

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Dexus’s response Supporting the sustainability of our SME customer (tenant) base

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Consistent with Dexus’s Sustainability approach “Future enabled customers” is about building constructive, enduring relationships with tenants to create value

Focused on supporting the viability of our small business customers

• −In April 2020, the Australian Government introduced a commercial code of conduct[1] and set of principles which applies to commercial tenancies (including retail, office and industrial) for small and medium enterprise tenants (SMEs) with turnover of less than $50 million experiencing financial stress or hardship as a result of the COVID-19 pandemic

• −Dexus’s immediate priority is to support SMEs, including the city retailers that support the office community, who have been significantly impacted by the coronavirus pandemic, and is progressing discussions with these customers on forms of rental relief

• −From those customers who have requested rental relief, Dexus estimates SMEs (office, retailers and industrial) with turnover of less than $50 million to comprise approximately 8% of total property portfolio income and is working through if they qualify for relief

• −Focused on ensuring the health safety and wellbeing of our workforce, customers and people in our buildings −Implemented government guidelines to reduce the spread of COVID-19 at properties

Other corporate measures

• −Enhanced liquidity, securing additional bank debt facilities[2] totalling $550 million with a weighted average tenor of 5.0 years providing further funding flexibility in the current environment

• −Implemented freeze on recruitment and non-essential consultancy spend, as well as temporary reductions in Director and Executive remuneration

−Focused on initiatives to prepare for return to work

1. The code of conduct is available at https://www.pm.gov.au/sites/default/files/files/national-cabinet-mandatory-code-ofconduct-sme-commercial-leasing-principles.pdf

2. Post issuance of the $500 million of 12-year Medium Term Notes and since the HY20 results.

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Growth through the cycle Continuing to progress development pipeline and grow the funds business

City defining projects: uncommitted, longer dated and all currently income producing

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$11.2 billion
pipeline
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Waterfront Precinct $2.3 billion - uncommitted Dexus 50%, DWPF 50%

Pitt & Bridge Street

$3.0 billion - uncommitted Dexus 50%, Dexus Office Partner 50%

Central Place Sydney

$1.1 billion - uncommitted Dexus 25%, Dexus Office Partner 25%

60 Collins Street

$550 million - uncommitted Dexus 100% interest

Funds Management: continued demand from capital partners providing capital through the cycle

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189% growth in FUM since FY12
$16.2bn
$16
$14
$12
$10 $5.6bn
$8
$6
$4
$2
$-
FY12 FY19 Rialto Towers, 525 Collins Street, Melbourne VIC.
Office Industrial Retail US Industrial Healthcare
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• Attracted over $9 billion of third-party equity since FY12

• Established network of 79 investors as at December 2019

• Continued demand from our partners during this period including the establishment of a new Joint Venture with GIC that has

• exchanged contracts to acquire a 50% interest in Rialto Towers, Melbourne

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COVID-19 and the office market outlook

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COVID-19 will accelerate evolution of office markets Megatrends remain in place but new risks and opportunities to emerge

• Benefits Risks Opportunities

• − − − Australia well placed to emerge Wider adoption of flexible Co-working arrangements under strongly vs. other geographies working arrangements – several pressure – potential to offer due to fast COVID-19 response mitigating factors to support flexible physical and contractual

• − office demand arrangements Premium assets will benefit from − −

• “flight to quality” during times of Accelerated adoption of Heightened stakeholder financial difficulty technology driving efficiency – attention on health, safety and

• − likely to impact back and middle sustainability – ability to use our Reduction in pressure on office strong track record

• workplace density given greater − −

• focus on employee wellbeing Lengthened timelines to activate Leaders in innovation will be development projects – benefit able to tailor product offerings to from having flexibility be meet changing customer demands

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Australia is well placed to emerge strongly from COVID-19 Unprecedented stimulus response will enhance our strong global position

Fiscal stimulus package (GFC vs. COVID-19) % of GDP

Liveability of Australia’s major cities EIU Liveability Rankings

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20%
~$320bn federal and
state stimulus
package represents GFC
15% ~16% of GDP COVID-19
10%
5%
0%
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All of Australia’s
major cities are
ranked in the top
20 most liveable
cities globally
#18 Brisbane
#14 Perth
#3 Sydney
#10 Adelaide
#2 Melbourne
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Source: Dexus Research, Economist Intelligence Unit 2019 Report.

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Premium assets benefit from “flight to quality” Dexus has historically outperformed market occupancy

Office net absorption – Sydney CBD NLA ‘000 sqm, y-o-y ending June

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400 Average 1999-2008 2009-2019
Prime assets have
Prime +84k +49k
persistently
300 Secondary -24k -20k outperformed, including
in periods of crisis
Tech Wreck GFC
200
100
0
-100
-200
-300
1999 2001 2003 2005 2007 2009 2011 2013 2015 2017 2019
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Office occupancy rate – Australia % NLA occupied

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Dexus occupancy rates
consistently above
market – underpinned
by our high-quality
100% portfolio
Dexus [(1)]
96%
92% Market
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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Pressure on workplace density in recent years Likely to ease given greater focus on employee health and wellbeing

Office floor space ratio – Sydney CBD Sqm per worker

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Floor space ratios
have declined in
recent years as
workspace density has
17.4
increased
If floor space ratios return
to 2012 levels, this would
result in additional demand
of ~800k sqm [(1)] , or
~16% of the current
Sydney CBD market
14.2
2012 2017
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Recent Dexus fit-outs

Sqm per desk

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Waterfront Place – 1:11 2 Dawn Fraser Ave – 1:15
Brisbane Sydney
240 St Georges Terrace- 1:12 30 The Bond – 1:12
Perth Sydney
327 Ferntree Gully Road – 1:12 1 Margaret Street – 1:10
Melbourne Sydney
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Source: Sydney City Council. (1) Assumes the number of workers are held at 2017 levels.

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Wider adoption of flexible working arrangements However, several mitigating factors to support office demand

Level of intended remote working post-COVID

% of companies permanently shifting workforce remotely

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74% of companies intend
40% to permanently shift a
portion of their workforce
remotely post-COVID-19
30%
27%
26%
25%
20%
17%
10%
5%
0%
0% 5% 10% 20% ≥50%
% of workforce to shift remotely permanently
% of Companies
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There are several mitigating factors that will support office demand going forward

Working from home >2.5 days per week shown to negatively impact knowledge transfer

Knowledge jobs forecast to increase significantly over the next 20 years – place high value on collaboration

Office space to continue as a talent attraction and retention tool – likely to benefit prime locations

Easing of workplace density due to increased focus on employee wellbeing – “hot-desking” will be challenged

Source: Gartner Survey – April 2020.

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Summary

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Summary Well positioned heading into the crisis and for the recovery

• Dexus has entered this period of uncertainty in a solid position

• owning and managing a quality property portfolio with high occupancy

• maintaining a strong balance sheet

• Priority is to support the ongoing viability of small business customers (tenants) post this crisis

• Continued focus on growth opportunities through

• investing on behalf of capital partners

• progressing $11.2 billion group development pipeline

• Continued debate on how COVID-19 will accelerate evolution of office markets

• On 26 March 2020, Dexus’s FY20 full year guidance for distribution per security growth and the detailed assumptions were withdrawn – Dexus continues to assess the impact of COVID-19

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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.

• This presentation was prepared during the disruption caused by the outbreak of COVID-19 and the resultant deterioration in business conditions. It is apparent that there are implications from the outbreak for the global and domestic economy, volatility in equity markets, liquidity in credit markets and impact on the appetite for and pricing of real estate assets which are uncertain and unquantifiable at this time. This presentation should be read and considered in light of that uncertainty.

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