This article is from the Australian Property Journal archive
DEXUS Property Group has posted a solid full-year result with AFFO with $413.9 million and FFO of $610.8 million, both up 12% on the previous year.
Whilst its office portfolio returned record leasing numbers, there were some softened results in its industrial portfolio.
Its statutory net profit of just under $1.26 billion was up 104% or $641.1 million. This was driven chiefly by $814.4 million of net revaluation gains on investment properties, $573.4 million higher than the gains of the previous year.
“The downward shift in global interest rates together with strong underlying investor demand for quality Australian real estate will continue to underpin future asset valuations,” Dexus CEO Darren Steinberg said.
“We are in a strong position to capitalise on improved conditions along the East Coast CBD office markets, particularly in Sydney, and we have a significant development pipeline with opportunities identified to add value,” he added.
FFO per security of 63.1 cents and distribution per security of 43.51 cents were both up 6%, with the remainder of the FFO increase due to the realization of $63.3 million in trading profits (net of tax), up $20.7 million on the prior year.
Underlying business excluding trading profits delivered FFO per security of 56.5 cents, up 3.1% on the prior year. NTA per security of $7.53, up 13%, and gearing up 30.7%.
The office and industrial portfolios both returned 16%. The office portfolio returned record levels of leasing activity, with 385 deals undertaken across 269,866sqm, with occupancy by income improving to 96.3% and WALE to 4.7 years. Office property FFO increase by 433.9 million 0r 6.4% to $567.2 million.
The industrial portfolio returned mixed results over the year. The group leased 204,238 sqm of industrial space across 73 transactions, of which 42 were new leases, with industrial portfolio WALE remained steady at 4.1 years and average incentives decreased slightly to 9.5%.
Its industrial property FFO decreased by $6.2 million, or 5.5% to $106.1 million, on the back of the sales of its Mascot and Rosebery assets at the start of FY16. In addition, like-for-like income reduced 7.1%, driven by vacancies at Knoxfield, Matraville and Dandenong, coupled with longer downtime. This was tempered by fixed rental increases across the rest of the portfolio and the acquisition of Lakes Business Park, Botany.
Its development portfolio saw a pipeline expansion over the next five years to $4.7 billion. Third party funds under management increased to $11.2 billion, up 17%, driven by acquisitions, developments and revaluations. DWPF achieved a one-year return of 14.7%, and was also successful in raising $658 million of equity from both existing and 10 new investors.
Australian Property Journal
