Dexus (ASX: DXS)
ASX release
17 August 2022
2022 Annual Report
Dexus release its 2022 Annual Report, which will be mailed to Security holders who have elected to
receive a hard copy in mid-September 2022.
Authorised by the Board of Dexus Funds Management Limited
For further information please contact:
Investors
Rowena Causley
Head of Listed Investor Relations
+61 2 9017 1390
+61 416 122 383
rowena.causley@dexus.com
Media
Louise Murray
Senior Manager, Corporate Communications
+61 2 9017 1446
+61 403 260 754
louise.murray@dexus.com
About Dexus
Dexus (ASX: DXS) is one of Australia’s leading fully integrated real estate groups, managing a high-quality Australian
property portfolio valued at $44.3 billion. We believe that the strength and quality of our relationships will always be
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 $18.4 billion of office, industrial and healthcare properties, and
investments. We manage a further $25.9 billion of office, retail, industrial and healthcare properties for third party clients.
The group’s $17.7 billion development pipeline provides the opportunity to grow both portfolios and enhance future
returns. Sustainability is integrated across our business, and our sustainability approach is the lens we use to manage
emerging ESG risks and opportunities for all our stakeholders. Dexus is a Top 50 entity by market capitalisation listed
on the Australian Securities Exchange and is supported by more than 29,000 investors from 24 countries. With over
35 years of expertise in property investment, funds management, asset management and development, we have a
proven track record in capital and risk management 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
Annual
Report 2022
Creating spaces where people thrive
Chapter
1
Overview
FY22 highlights
About Dexus
Chair and CEO review
Decade of Dexus
Approach
How we create value
Megatrends
Strategy
Key resources
Key business activities
Key risks
2
2
4
6
10
12
12
14
16
18
20
22
Dexus 2022 Annual Reporting suite
Performance
28
Directors’ report
28
Financial
42
Properties
People and capabilities
52
Customers and communities 56
62
Environment
Governance
Governance
Board of Directors
Group Management
Committee
70
70
74
77
Remuneration report
Directors’ report
Financial report
Financial report
Investor information
Investor information
Integrated Reporting
Content Elements Index
78
78
78
112
112
192
194
200
Annual
Report 2022
Creating spaces where people thrive
Annual Results
Presentation 2022
Sustainability
Report 2022
Creating spaces where people thrive
Chapter
1
Annual Report 2022
Annual Results
Presentation 2022
Sustainability
Report 2022
Financial
Statements 2022
Corporate
Governance
Statement 2022
Modern Slavery
Statement 2022
Financial
Statements 2022
Corporate Governance
Statement 2022
Modern Slavery
Statement 2022*
About this report
The 2022 report is a consolidated
summary of Dexus’s performance
for the financial year ended
30 June 2022. It should be read in
conjunction with the reports that
comprise the 2022 Annual Reporting
Suite available from www.dexus.com/
investor-centre. In this report, unless
otherwise stated, references to ‘Dexus’
‘the group’, ‘we’, ‘us’ and ‘our’ refer to
Dexus comprising the ASX listed entity
and the funds management business.
Any reference in this report to a ‘year’
relates to the financial year ended
30 June 2022. All dollar figures are
expressed in Australian dollars unless
otherwise stated.
The Board acknowledges its
responsibility for the 2022 Annual
Report and has been involved in its
development and direction from
the beginning. The Board reviewed,
considered and provided feedback
during the production process and
approved the Annual Report at its
August 2022 board meeting.
Refer to page 202 for scope of this
report.
* The 2022 Modern Slavery Statement
will be available in December 2022.
Dexus is one of Australia’s leading
fully integrated real estate
groups, managing a high-quality
Australian property portfolio
valued at $44.3 billion.
Dexus acknowledges the
Traditional Custodians of the
lands on which our business and
assets operate, and recognises
their ongoing contribution to
land, waters and community.
We pay our respects to First
Nations Elders past, present
and emerging.
Artwork
Artist
Amy Allerton, Indigico Creative,
a Gumbaynggir Bundjalung, and
Gamilaraay woman
Artwork
The Places Where We Thrive
Artwork description
The artwork tells the story of a vision for
our communities, both large and small,
where they are all thriving and strong as
they build lives, homes and legacies for
present and future generations. Every
community is connected by spirit and
by country, surrounded by flourishing
waterways and vibrant land that is
enriched and cared for by its people.
Communities are empowered to find new
ways to build and expand, as they dream
and innovate to create the places where
we thrive.
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1
OverviewOverview
FY22 highlights
Throughout the year we continued momentum
on maximising property portfolio income and
performance while growing and diversifying
our funds management business.
Financial
Properties
Page 28
Page 42
Maintaining strong financial
performance by delivering on
our strategy
Developing, managing and transacting
properties to create a high-quality
portfolio across Australia’s key cities
98.1%
Dexus industrial
portfolio
occupancy
2
$1,615.9mNet profit after taxFY21: $1,138.4m53.2centsAFFO and Distribution per security FY21: 51.8 cents$81.7mManagement operations FFOFY21: $57.7m$44.3bnValue of group property portfolio95.6%Dexus office portfolio occupancy$17.7bnGroup development pipeline Dexus 2022 Annual Report Customers and communities
People and capabilities
Customers and communities
People and
capabilities
Customers and
communities
Environment
Page 52
Page 56
Page 62
Attracting, retaining and developing
an engaged and capable workforce,
within an inclusive environment that
delivers on our strategy
Supporting the success of our
customers, the wellbeing of building
occupants, the strength of our local
communities and the capabilities
of our suppliers
Assessing the efficiency and resilience
of our portfolio to minimise our
environmental footprint and ensure
it is positioned to thrive in a climate
affected future
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FY22 highlights
3
70%Employee engagement score36%Females in senior andexecutive management rolesFY21: 35%+43Customer Net Promoter ScoreFY21: +46>$0.8mCommunity contribution valueFY21: $0.8mNet zeroAchieved net zero emissions for building operations across the group managed portfolio100%of electricity sourced from on-site and off-site renewable sources in FY22 across the group managed portfolio4.9starAverage NABERS Indoor Environment rating across the group office portfolioOverview
4
Dexus 2022 Annual Report
Dexus group$44.3bnFunds under management 394Properties6.4mSquare metres across the group647EmployeesTop 50Entity on ASX$9.6bnMarket capitalisation at 30 June 2022 About Dexus
Dexus is one of Australia’s leading fully
integrated real estate groups, managing
a high-quality Australian property
portfolio valued at $44.3 billion.
Dexus is a Top 50 entity by market
capitalisation listed on the Australian
Securities Exchange (trading code:
DXS) and is supported by more than
29,000 investors from 24 countries.
We believe the strength and quality
of our relationships will always be
central to our success and we are
deeply committed to working with
our customers to provide spaces that
engage and inspire.
With more than 35 years of expertise in
property investment, development and
asset management, Dexus has a proven
track record in managing capital and
risk and delivering superior risk-adjusted
returns for its investors. We invest in
Australia, and directly own $18.4 billion
of office, industrial and healthcare
properties and investments.
We manage a further $25.9 billion of
office, retail, industrial and healthcare
properties in our funds management
business, which provides third party
capital with exposure to quality sector
specific and diversified real estate
investment products. The funds within
this business have a strong track
record of delivering outperformance
and benefit from Dexus’s capabilities.
The group’s $17.7 billion development
pipeline provides the opportunity to
grow both portfolios and enhance
future returns.
We consider sustainability to be an
integral part of our business with
the objectives of Leading Cities,
Future Enabled Customers, Strong
Communities, Thriving People and an
Enriched Environment supporting our
overarching goal of Sustained Value.
Office
$23.9bn
Industrial
$11.6bn
Townsville
Brisbane
Retail
$6.0bn
Sydney
Melbourne
Healthcare
$1.5bn
Real estate
securities and
investments
$1.3bn
About Dexus
5
Group portfolio composition
Perth
Adelaide
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Overview
Chair and CEO review
Dexus’s purpose is to
create spaces where
people thrive. This
purpose is critical to
the creation of spaces
which meet the needs
of our customers and
our communities.
6
2022 was the year we emerged
from the lockdowns. Restrictions
progressively eased, having varied
levels of impact across Australian
cities and presenting new challenges
in our operating environment. Despite
ongoing disruptions, vaccines were
successfully rolled out across Australia,
and governments and businesses
began to transition to a business-as-
usual approach. Australia’s economic
activity has been supported by
government stimulus, high vaccination
rates and the easing of international
travel restrictions, with growing
employment numbers, strong
retail spending and a rebound in
business confidence.
Our diversified business model and
strategy have enabled us to deliver
stable or growing distributions
despite impacts from the pandemic.
In this environment, our focus is on
our strategic objectives of delivering
resilient property portfolio income while
growing and diversifying our funds
management business.
This year we implemented major
strategic initiatives which grew the
funds management business and
positioned it for further growth including
integrating APN Property Group onto
our platform and acquiring Jandakot
Airport industrial precinct. We also
secured $1.6 billion2 of investment onto
our funds platform as we welcomed a
number of new investors.
The year culminated in the
announcement that we had entered
into an agreement with AMP to acquire
AMP Capital’s real estate and domestic
infrastructure and equity business,
which includes up to $21.1 billion1 of
funds under management.
This transaction is expected to
complete in the first half of FY23, with
planning for the integration of AMP
Capital’s platform well advanced.
The transaction has been structured
in a way whereby the earn out
consideration payable is dependent
on the total assets under management
to be transitioned to Dexus.
Last month, AMP Capital Wholesale
Office Fund (AWOF) unitholders voted
in favour of a change of the trustee
of the Fund. The initial proposal to
replace the Fund’s trustee commenced
during 2021, prior to Dexus entering
into the agreement with AMP.
As a result of the vote outcome,
the maximum potential price has
reduced. The reduction in potential
funding commitments for the AWOF
component of the acquisition enables
Dexus to deploy that funding into
other opportunities.
We remain focused on completing
the transaction which, regardless
of this outcome, will transform our
product offering to investors, with new
capabilities and significant scale across
retail and infrastructure real assets.
Despite the trend of flexible working
being accelerated by the pandemic,
office leasing and occupancy remained
strong, underpinned by a flight to quality
and customers acting on their post
pandemic growth plans. The industrial
portfolio continues to benefit from
strong rental reversions and underlying
structural trends. We also took the
opportunity to selectively recycle assets
and make investments to support future
growth which involved over
$10 billion of industrial, office and
healthcare transactions across
the group.
1 Based on AMP Capital’s FUM as at 30 June 2022 net of the known transition of circa $10 billion
of FUM from AMP Capital’s platform.
2 Includes Dexus participation in funds equity raising.
Dexus 2022 Annual Report i
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L-R: Richard Sheppard, Chair and
Darren Steinberg, Chief Executive Officer.
Our ESG performance continues to
be acknowledged against external
benchmarks. Dexus outperformed real
estate companies globally for the third
consecutive year to become the only
real estate company to achieve a Gold
Class distinction in the S&P Global
Sustainability Yearbook 2022, retaining
its position as a sustainability leader by
the Dow Jones Sustainability Index.
For more than a decade, we have
been focused on energy efficiency as
well as reducing the group’s emissions
and environmental footprint. We are
pleased to have achieved net zero
emissions for our building operations
across our group managed portfolio.
Transitioning to net zero across our
building operations reinforces our
commitment to act to limit global
warming to 1.5°C and delivers on our
customers’ and investors’ desire for
strong climate action and low
carbon investments.
Dexus was named as an Employer
of Choice for Gender Equality by
the Workplace Gender Equality
Agency for the fifth consecutive year,
demonstrating our active commitment
to, and progress towards, gender
equality across our workforce.
Our Reflect Reconciliation Action
Plan was endorsed by Reconciliation
Australia. This is an important early
step on our reconciliation journey with
Australia’s First Nations peoples.
A decade of growth
and evolution
A decade ago, Dexus reset its strategy
to embark on the next phase of
its evolution.
We built on our strengths of office
ownership, divesting our exposure to
offshore properties and reinvesting
in high-quality assets located in
Australia’s major cities where we have
strong expertise and deep customer
relationships. In tandem, we have
grown and diversified our funds
management business to include new
partnerships with global investors in the
office, industrial and healthcare sectors.
Ten years ago, Dexus managed
$12.9 billion in assets, which included
$7.0 billion on the balance sheet
and a $5.9 billion third party funds
management business across
four funds.
Today, we manage a $44.3 billion
diversified platform of high-quality
assets comprising a $18.4 billion
balance sheet portfolio and a
$25.9 billion funds management
business across 19 funds.
This includes a diversified pool of
vehicles incorporating wholesale pooled
funds, listed REITs and joint ventures
across the traditional real estate sectors
as well as healthcare, real estate
securities funds, opportunistic funds
and venture capital.
Our embedded $17.7 billion group
development pipeline provides the
opportunity to grow both portfolios and
enhance future returns.
Dexus’s next phase of growth will be
underpinned by the acquisition of the
AMP Capital platform which is expected
to complete later this calendar
year. Subject to the final assets under
management outcome, this acquisition
has the potential to add a further
$21.1 billion1 to the group portfolio.
This acquisition accelerates
achievement of our business model
evolution which is premised on the
provision of attractive products and
returns for investors. As our investor
base allocates more capital to real
assets, our platform will provide a
complete offering for third party capital
partners.
Chair and CEO review
7
Overview
We have created a leading, diversified
Australian real estate group positioned
to capitalise on underlying structural
trends in the Australian real estate
market to generate long-term
investment performance.
People are fundamental to any
business, and at Dexus our people
are our strength. Our workforce is
made up of people who have the
capabilities to support our customers
and communities.
The capability we have across the
spectrum of commercial real estate,
along with our diverse and engaged
workforce, enables us to drive
investment performance.
Our city-shaping development
pipeline includes Waterfront Brisbane,
60 Collins Street, Melbourne, Central
Place Sydney and Atlassian Central,
Sydney which is due to commence
construction shortly.
Our committed industrial pipeline is
active across seven development
projects owned by Dexus and its third
party capital partners, of which the
majority have secured leases.
Financial result
Dexus’s activity drove a solid financial
result for the year. Our initial market
guidance for distribution growth of
not less than 2% was upgraded in the
second half to growth of not less than
2.5%. The full year distribution was
53.2 cents per security, reflecting
2.7% growth and resulting in a
4.7% compound annual growth rate
since FY12. The distribution payout
ratio remains in line with free cash
flow for which AFFO is a proxy, and in
accordance with Dexus’s distribution
policy.
New opportunities
We continue to transition the portfolio
into higher returning investment
opportunities, many of which are being
undertaken alongside third party
capital partners and enhance our
group development pipeline.
In FY22, these opportunities included
investing in Jandakot Airport industrial
precinct in Perth, which has provided
a meaningful industrial footprint in
Western Australia to service our growing
customer base and scope to enhance
returns through industrial development.
This acquisition was undertaken
alongside Dexus Industria REIT and
Cbus Super as a new joint venture
investor, supporting growth in funds
management.
The group’s $17.7 billion development
pipeline provides the opportunity to
create value enhancing projects by
growing the core property portfolio and
those portfolios managed on behalf of
our third party capital partners.
During the year new restaurants
opened and Theatre Royal Sydney was
revived at 25 Martin Place in Sydney,
which has been transformed into a
premium retail, dining and cultural
hub. The development is due to be
completed by the end of 2022.
8
History of Dexus distribution per security
(Cents per security)
32.1
36.00
37.56
41.04
43.51
45.47
47.8
50.2
50.3
51.8
53.2
FY12*
FY13*
FY14*
FY15
FY16
FY17
FY18
FY19
FY20
FY21
FY22
* Adjusted for the one-for-six security consolidation completed in FY15.
This result was achieved despite the
ongoing COVID-19 lockdowns in Sydney
and Melbourne, which impacted the
economy and the ability for business to
trade normally.
The Omicron variant of COVID-19
created further challenges in supply
chains and delayed the new year return
to the office into 2022. While people
continue to work flexibly, the return of
people to offices gained momentum,
particularly in core CBD markets.
The S&P/ASX 200 Property Accumulation
(A-REIT) Index declined by 12.3% during
the year, impacted by rising bond
yields. Dexus performed in line with the
A-REIT index over this time period and
maintains its outperformance over the
ten-year time horizon, delivering an
annual compound return of 10.3% over
the past ten years.
Gearing (look-through)1 of 26.9% sits
below our target range of 30-40%.
Dexus has a weighted average hedge
maturity of 5.9 years and was
65% hedged on average for FY22.
Further details in relation to our
financial result can be found on
pages 28-41.
1 Gearing adjusted for cash and debt in equity
accounted investments, excluding Dexus’s
share of co-investments in pooled funds.
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Artist impression:
60 Collins Street, Melbourne VIC.
During the year, Dexus has reviewed
its remuneration structure for Group
Management Committee members and
consulted intensively with investors.
As a result, Dexus has made a number
of changes to its remuneration structure
which are set out in the Remuneration
report.
Based on current expectations
regarding interest rates, continued
asset sales and barring unforeseen
circumstances, Dexus expects
distributions of 50.0-51.5 cents per
security for the 12 months ended
30 June 20231, below the 53.2 cents per
security delivered in FY22.
Further details relating to the Board
and our governance practices can be
found from page 71, as well as in the
Corporate Governance Statement
available at www.dexus.com.
Summary and outlook
Our priorities in the year ahead include
integrating the AMP Capital portfolio
and people onto the Dexus platform,
and pursuing our strategic objectives
of generating resilient income streams
and being identified as the real estate
investment partner of choice. We will
continue our active leasing strategies
to maximise property portfolio cash
flow generation and progress our
development pipeline.
We anticipate that it will be a
challenging period over the next two
years with rising interest rates, ongoing
supply chain disruptions, a global
energy crisis and geopolitical risks
contributing to continued economic
uncertainty. Recycling assets has
enabled us to maintain a strong
balance sheet, while allocating capital
towards our city-shaping development
pipeline to further enhance our high-
quality portfolio.
Dexus is well positioned in this
environment and we expect to emerge
as one of the leading real asset
managers in the Asia-Pacific region.
We are encouraged by the continued
demand for high-quality space. We
have confidence in the future of cities
and our ability to deliver sustained
value for all our stakeholders over the
long term.
On behalf of the Board and
management, we extend our
appreciation to our people across
Australia for their commitment and
significant contribution to this year’s
result. We also thank our third party
capital partners for entrusting us with
the management of their investments,
and our customers for their loyalty
and commitment across our property
portfolio.
Importantly, we thank you, our investors,
for your continued investment in Dexus
and we look forward to delivering
sustained performance.
Richard Sheppard
Chair
Darren Steinberg
Chief Executive Officer
1 Assumes average floating rates of
2.75%-3.75% (90-day BBSW), the transition of
circa $21 billion of FUM from the acquisition
of the AMP Capital real estate and domestic
infrastructure equity platform and circa
$50-$55 million of trading profits (post-tax).
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Chair and CEO review
9
Governance
Dexus is a trusted custodian of our
investors’ capital with a reputation
for strong corporate governance and
highly regarded ESG credentials.
We have well established frameworks,
processes and policies developed over
decades that underpin our standing as
a leading real estate fund manager in
Australia. We recognise the importance
of ESG principles to all our stakeholders,
including our investors, customers, our
people and the broader community.
The business has strong governance
and risk management practices, and
the Board actively seeks feedback from
our people to ensure it stays connected
to the culture of the organisation
and collects deeper insights into
our operations.
Our Board comprises seven non-
executive directors and one executive
director, and we seek to maintain
Board diversity across gender, skills
and experience. Tonianne Dwyer
will be retiring from the Board at the
2022 AGM after more than 11 years of
service. Tonianne has been a valuable
member of various committees
including the Board Risk Committee
where she is Chair, and the Board Audit
Committee and Board Nomination
Committee. We would like to
acknowledge and thank Tonianne for
her significant contribution to Dexus
over the past decade.
Overview
Rialto Towers, Melbourne VIC.
10
FY12FY22Funds under management$12.9bn$44.3bnThird party platform – number of funds4 funds19 funds Type of fundsPooled funds, joint ventures/ mandatesPooled funds, joint ventures/mandates, listed funds, retail fundsSectorsRetail, office, industrial, offshoreOffice, industrial, retail, healthcare, real estate securitiesDevelopment pipeline$1.2bn$17.7bn People269647Market capitalisation$4.4bn$9.6bn Dexus 2022 Annual Report Dexus – a decade
of growth
It has been 10 years since we revised
our strategy to deliver superior risk-adjusted
returns from high-quality Australian real estate
in Australia’s major cities.
Our strategy was revised in 2012 to build
on our strengths of delivering resilient
income streams and being the real
estate investment partner of choice,
while enhancing our position in the
Australian property market.
We divested our exposure to offshore
properties and reinvested in high-
quality assets located in Australia’s
major cities, while at the same time
growing and diversifying our funds
management business to include new
partnerships with global investors in the
office, industrial and healthcare sectors.
Over the past decade, our group
portfolio has more than tripled to
$44.3 billion, while over the same
time period we have enhanced
portfolio quality through active asset
management, asset recycling and
development.
Our third party funds platform has
grown at an average 16% per annum to
$25.9 billion today.
We have upweighted our exposure to
the industrial and healthcare sectors
which benefit from strong tailwinds.
On completion of the AMP Capital
transaction, Dexus will diversify further
into the infrastructure real asset
class which is both attractive
and complementary to the real
estate sector.
Our group development pipeline now
stands at $17.7 billion, providing the
opportunity to create future value
across the group.
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$44.3bn
$25.9bn
$44.3bn
$18.4bn
FY22
Decade of Dexus
11
$44.3bn
3%
3%
13%
26%
54%
FY22
Balance sheet
Third party
$12.9bn
$5.9bn
$7.0bn
FY12
$12.9bn
6%
24%
19%
52%
FY12
Group funds under management +13% CAGRGroup FUM +16% CAGRThird party FUM +10% CAGRBalance sheetOverview
How we create value
Operating
environment
Our
strategy
Key
resources
Page 16
Page 18
Key business
activities
Page 20
Dexus Sustainability
Approach
Value creation
outcomes
Value
drivers
Sustainability Report 2022
Megatrends
• Urbanisation
• Growth in pension
capital funds flow
• Social and
demographic
change
• Technological
change
• Climate change
• Growth in
sustainable
investment
Page 14
Key risks
Outlines the key
risks and controls in
place for mitigation
Page 22
Vision
To be globally
recognised as
Australia’s leading
real estate company
Strategy
Delivering superior
risk-adjusted returns
for investors from
high-quality real
estate in Australia’s
major cities
Strategic
objectives
• Generating resilient
income streams
• Being identified as
the real estate
investment
partner of choice
12
Financial
Properties
People and
capabilities
Customers and
communities
Environment
g
Inv e stin
T
r
a
n
s
a
c
t
i
n
g
Office
Industrial
Retail
Healthcare
&
tra
ding
M
a
n
a
g
i
n
g
g
D evelopin
Sustained Value
Superior long-term performance for our
investors and third party capital partners,
supported by an integrated approach
to ESG within our business model
• Financial performance
• Capital management
• Corporate governance
Pages 28-41
Leading Cities
A high-quality portfolio that contributes
to economic prosperity and supports
sustainable urban development across
Australia’s key cities
Pages 42-51
• Portfolio scale
and occupancy
• Economic contribution
• Development pipeline
• Industry collaboration
Thriving People
An engaged, capable and
high-performing workforce, within
an inclusive environment, that delivers
on our strategy
Pages 52-55
• Employee engagement
• Inclusion and diversity
• Health, safety and
wellbeing
Future Enabled Customers
and Strong Communities
A strong network of value chain partners
(customers, communities and suppliers)
who support and are positively impacted
by Dexus
Pages 56-61
Enriched Environment
An efficient and resilient portfolio that
minimises our environmental footprint
and is positioned to thrive in a
climate-affected future
Pages 62-69
• Customer experience
• Community contribution
• Supply chain focus
• Resource efficiency
• Climate resilience
• Green buildings
Dexus 2022 Annual Report
How we create value
Operating
environment
Our
strategy
Key
resources
Dexus Sustainability
Approach
Value creation
outcomes
Value
drivers
Page 16
Page 18
Sustainability Report 2022
Key business
activities
Page 20
Megatrends
• Urbanisation
• Growth in pension
capital funds flow
• Social and
demographic
change
• Technological
change
• Climate change
• Growth in
sustainable
investment
Page 14
Key risks
Outlines the key
risks and controls in
place for mitigation
Page 22
Vision
To be globally
recognised as
Australia’s leading
real estate company
Strategy
Delivering superior
risk-adjusted returns
for investors from
high-quality real
estate in Australia’s
major cities
Strategic
objectives
• Generating resilient
income streams
• Being identified as
the real estate
investment
partner of choice
Financial
Properties
People and
capabilities
Customers and
communities
Environment
g
Inv e stin
M
a
n
a
g
i
n
g
T
r
a
n
s
a
c
t
i
n
g
Healthcare
&
tra
ding
g
D evelopin
Office
Industrial
Retail
Sustained Value
Superior long-term performance for our
investors and third party capital partners,
supported by an integrated approach
to ESG within our business model
Pages 28-41
• Financial performance
• Capital management
• Corporate governance
Leading Cities
A high-quality portfolio that contributes
to economic prosperity and supports
sustainable urban development across
Australia’s key cities
Pages 42-51
• Portfolio scale
and occupancy
• Economic contribution
• Development pipeline
• Industry collaboration
Thriving People
An engaged, capable and
high-performing workforce, within
an inclusive environment, that delivers
on our strategy
Pages 52-55
• Employee engagement
• Inclusion and diversity
• Health, safety and
wellbeing
Future Enabled Customers
and Strong Communities
A strong network of value chain partners
(customers, communities and suppliers)
who support and are positively impacted
by Dexus
Pages 56-61
Enriched Environment
An efficient and resilient portfolio that
minimises our environmental footprint
and is positioned to thrive in a
climate-affected future
Pages 62-69
• Customer experience
• Community contribution
• Supply chain focus
• Resource efficiency
• Climate resilience
• Green buildings
How we create value
13
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Megatrends
Megatrends shape our operating environment, generating
both risks and opportunities that impact how we create value
through our business model.
Megatrends
Growth in sustainable
investment
Growth in pension
capital fund flows
Urbanisation
Social and
demographic change
Climate
change
Technological
change
Description
A growing recognition that
environmental, social, and
governance (ESG) factors
are also economic issues
driving an investment
revolution. To gain access to
sustainable investment flows,
businesses need to address
the environmental, social
and governance issues that
are material to their ability
to create value. Investors are
also demanding better, more
transparent ESG reporting
and measurement.
Funds under management
within pension funds are
expected to increase
significantly as populations in
developed nations continue to
age. Real estate is expected
to receive a higher share of
capital allocation and benefit
from cross border capital flows.
Urbanisation in major cities
is increasing with population
growth leading to infrastructure
investment and vibrant
communities. This creates
challenges for social equity, the
environment, transport systems
and city planning.
Connection to
key resources
Financial
Environment
Financial
Properties
Implications
for our business
model and how
we are
responding
14
We have welcomed the
increasing interest from our
investors, third party capital
partners and customers
about how we are managing
ESG issues. The Dexus
Sustainability Approach is the
lens that we use to effectively
address emerging ESG risks
and opportunities. We have
integrated the reporting of
our ESG performance into our
Annual Report to enhance
communication with our
stakeholders and support
the further integration of ESG
into our business model. We
benchmark our ESG approach
using investor surveys and
have established globally-
leading positions according to
the Principles for Responsible
Investment, Global Real Estate
Sustainability Benchmark, Dow
Jones Sustainability Index and
CDP Climate Change.
Dexus is a leading Australian
real estate fund manager. Our
funds management business
provides third party capital
with exposure to quality,
sector-specific and diversified
real estate investment
products. These funds also
have a strong track record of
performance and benefit from
leveraging the leasing, asset
and property management
capabilities provided by Dexus.
In response to the growth in
pension capital fund flows,
we are strengthening our
funds management business
by attracting new third party
capital and expanding existing
funds. We also expect to
benefit from this megatrend
by launching new investment
products where we believe a
competitive advantage can
be obtained.
Financial
Properties
Environment
Our investments in quality
properties in key CBD locations
benefit from the concentration
of knowledge industries. In
addition, we are undertaking
city-shaping developments to
serve vibrant communities. Our
active industrial development
pipeline also supports the
growth in e-commerce
businesses which is driving
significant growth in demand
for industrial property. We
work closely with our third
party capital partners,
public authorities, real estate
consultants, technology
providers and the wider
community in undertaking
these activities.
The increase in remote working
It is now widely recognised
and a growing focus on
that climate change is a risk
Technological advancements in
artificial intelligence, automation,
workplace health and wellbeing
to financial stability and is
big data and analytics are
are accelerating broader
intensifying other environmental
creating new jobs and driving
demographic trends associated
challenges such as resource
with the rise of millennials and
scarcity. Climate-related
mobility and collaboration in
workplaces. The adoption of
an ageing population. These
challenges include impacts from
technological solutions is also
social and demographic
extreme weather as well as
changes have implications for
longer-term impacts on global
increasingly required to meet
stakeholder expectations for
the design of workspaces and
supply chains, and human and
sustainability performance.
the spending on healthcare.
ecosystem health. To manage
these challenges, the transition to
a low carbon economy remains
top of mind for governments and
businesses alike.
Customers & communities
People & capabilities
Financial
Environment
Properties
Properties
Customers & Communities
People & capabilities
Workforce composition is
increasingly diverse, and
expectations for a seamless
experience that enables
never been greater. Ageing
demographics will continue
to underpin strong growth
in healthcare spending and
For over a decade, we have
enhanced the environmental
performance and reduced the
Technological advancement
brings opportunities to further
support our customers in their
carbon footprint of our portfolio
growth and productivity goals.
to energy and water efficiency.
innovations that deliver a better
In recognition of the need to
take action addressing the
customer experience and
optimise workforce productivity.
impacts of climate change, we
Our smart buildings strategy
collaboration and flexibility has
through targeted improvements
Our new developments feature
demand for healthcare services
accelerated our net zero goal
enables connectivity and
such as hospitals, medical
centres, and medical office
buildings. As our customers
to achieve net zero emissions for
flexibility across workplace
our building operations across
locations. The COVID-19
the group managed portfolio at
experience has increased our
adapt to these changes, they
30 June 2022. Our ambition is
focus on touchless and virtual
are increasingly adopting
to go beyond net zero emissions
technology and enhanced air
mobile technology and focusing
and have integrated risks and
quality, the adoption of which
on health and wellbeing.
In response, our focus is on
delivering ‘simple and easy’
opportunities from climate
makes our properties more
change to increase the resilience
attractive to our customers.
of our assets and operations.
Investing in next generation
experiences and developing new
As part of this ambition, we are
services that reduce pain points
working with stakeholders in our
technology solutions will
be required to meet our
for customers and promote the
value chain to address Scope 3
sustainability ambitions and
health and wellbeing of people
emissions through our materials,
those of our customers.
and communities.
waste and procurement
decisions.
Dexus 2022 Annual Report Megatrends
Growth in sustainable
Urbanisation
investment
Growth in pension
capital fund flows
Social and
demographic change
Climate
change
Technological
change
There are various megatrends that could impact Dexus’s strategy and outlook, and we actively review
them as the nature and potential of these trends can change over time. Since 2019, we have aligned
our Annual Report with the Integrated Reporting Framework to meet increasing market demands
to demonstrate how Dexus leverages ESG to create long-term value. The material topics from our
materiality assessment (page 27) define the ‘value drivers’ within the value creation framework on pages
12-13 and are aligned to the megatrends identified.
Description
A growing recognition that
environmental, social, and
governance (ESG) factors
are also economic issues
driving an investment
revolution. To gain access to
sustainable investment flows,
businesses need to address
the environmental, social
and governance issues that
are material to their ability
to create value. Investors are
also demanding better, more
transparent ESG reporting
and measurement.
Funds under management
within pension funds are
expected to increase
Urbanisation in major cities
is increasing with population
growth leading to infrastructure
significantly as populations in
investment and vibrant
developed nations continue to
communities. This creates
age. Real estate is expected
to receive a higher share of
challenges for social equity, the
environment, transport systems
capital allocation and benefit
and city planning.
from cross border capital flows.
The increase in remote working
and a growing focus on
workplace health and wellbeing
are accelerating broader
demographic trends associated
with the rise of millennials and
an ageing population. These
social and demographic
changes have implications for
the design of workspaces and
the spending on healthcare.
It is now widely recognised
that climate change is a risk
to financial stability and is
intensifying other environmental
challenges such as resource
scarcity. Climate-related
challenges include impacts from
extreme weather as well as
longer-term impacts on global
supply chains, and human and
ecosystem health. To manage
these challenges, the transition to
a low carbon economy remains
top of mind for governments and
businesses alike.
Technological advancements in
artificial intelligence, automation,
big data and analytics are
creating new jobs and driving
mobility and collaboration in
workplaces. The adoption of
technological solutions is also
increasingly required to meet
stakeholder expectations for
sustainability performance.
Connection to
key resources
Financial
Environment
Financial
Properties
Financial
Properties
Environment
Customers & communities
People & capabilities
Financial
Environment
Properties
Implications
for our business
model and how
we are
responding
about how we are managing
with exposure to quality,
We have welcomed the
increasing interest from our
investors, third party capital
partners and customers
ESG issues. The Dexus
Sustainability Approach is the
lens that we use to effectively
address emerging ESG risks
and opportunities. We have
integrated the reporting of
our ESG performance into our
Annual Report to enhance
communication with our
stakeholders and support
Dexus is a leading Australian
Our investments in quality
real estate fund manager. Our
properties in key CBD locations
funds management business
provides third party capital
benefit from the concentration
of knowledge industries. In
addition, we are undertaking
sector-specific and diversified
city-shaping developments to
real estate investment
products. These funds also
serve vibrant communities. Our
active industrial development
have a strong track record of
pipeline also supports the
performance and benefit from
growth in e-commerce
leveraging the leasing, asset
and property management
capabilities provided by Dexus.
In response to the growth in
pension capital fund flows,
businesses which is driving
significant growth in demand
for industrial property. We
work closely with our third
party capital partners,
the further integration of ESG
we are strengthening our
public authorities, real estate
into our business model. We
benchmark our ESG approach
using investor surveys and
have established globally-
funds management business
by attracting new third party
consultants, technology
providers and the wider
capital and expanding existing
community in undertaking
funds. We also expect to
these activities.
leading positions according to
benefit from this megatrend
the Principles for Responsible
by launching new investment
Investment, Global Real Estate
products where we believe a
Sustainability Benchmark, Dow
competitive advantage can
Jones Sustainability Index and
be obtained.
CDP Climate Change.
Workforce composition is
increasingly diverse, and
expectations for a seamless
experience that enables
collaboration and flexibility has
never been greater. Ageing
demographics will continue
to underpin strong growth
in healthcare spending and
demand for healthcare services
such as hospitals, medical
centres, and medical office
buildings. As our customers
adapt to these changes, they
are increasingly adopting
mobile technology and focusing
on health and wellbeing.
In response, our focus is on
delivering ‘simple and easy’
experiences and developing new
services that reduce pain points
for customers and promote the
health and wellbeing of people
and communities.
For over a decade, we have
enhanced the environmental
performance and reduced the
carbon footprint of our portfolio
through targeted improvements
to energy and water efficiency.
In recognition of the need to
take action addressing the
impacts of climate change, we
accelerated our net zero goal
to achieve net zero emissions for
our building operations across
the group managed portfolio at
30 June 2022. Our ambition is
to go beyond net zero emissions
and have integrated risks and
opportunities from climate
change to increase the resilience
of our assets and operations.
As part of this ambition, we are
working with stakeholders in our
value chain to address Scope 3
emissions through our materials,
waste and procurement
decisions.
Properties
Customers & Communities
People & capabilities
Technological advancement
brings opportunities to further
support our customers in their
growth and productivity goals.
Our new developments feature
innovations that deliver a better
customer experience and
optimise workforce productivity.
Our smart buildings strategy
enables connectivity and
flexibility across workplace
locations. The COVID-19
experience has increased our
focus on touchless and virtual
technology and enhanced air
quality, the adoption of which
makes our properties more
attractive to our customers.
Investing in next generation
technology solutions will
be required to meet our
sustainability ambitions and
those of our customers.
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Megatrends
15
Strategy
Our strategy remains focused on our core strengths of owning
and managing high-quality real estate in Australia’s major
cities to deliver superior risk-adjusted returns for investors.
We have built a fully integrated real estate platform and are focused on leveraging
our cross-sector asset management and development expertise to drive more
capital efficient returns for investors, while remaining true to our identity as a
long-term investor in high quality Australian real estate.
WHAT SETS
DEXUS APART?
Our strategic objectives:
– Generating resilient income streams
Investing in income streams that
provide resilience through the cycle
– Being identified as the real estate
investment partner of choice
Expanding and diversifying the
funds management business
Our purpose:
To create spaces where people thrive
Our values:
Openness and trust, empowerment,
integrity
Our vision:
To be globally recognised as Australia’s
leading real estate company
Our strategy:
To deliver superior risk-adjusted returns
for investors from high-quality real
estate in Australia’s major cities
Sustained
Value
Vision
Our
Purpose
Enriched
Environment
Strategy
Leading
Cities
Quality real estate portfolio
located across key Australian
cities
High performing funds
management business with
diverse sources of capital
Globally recognised leader
in sustainability
City-shaping development
pipeline
Strategic
objectives
Superior transaction and
trading capabilities
Future Enabled
Customers and Strong
Communities
Thriving
People
Talented engaged, inclusive
and diverse workforce
16
Dexus 2022 Annual Report
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We believe that scale supports
the generation of investment
outperformance for both Dexus
investors and our third party capital
partners through broader customer
insights, provision of a greater range
of workspace solutions and increased
capacity to invest in people, systems
and technologies that enhance our
customers’ experience.
We have invested in having a
superior operating platform and will
continue this focus to build a world-
class business. The size of Dexus’s
balance sheet, deep access to pools
of capital and an agile, solution-
based culture are key enablers of our
strategy, supported by our prudent
approach to capital management
and an embedded commitment to
Environmental, Social and Governance
(ESG) outcomes.
Our objectives of generating resilient
income streams and being identified
as the real estate investment partner
of choice complement each other. Our
success has been demonstrated by
the attraction of investment partners
in the office, industrial and healthcare
property sectors, in turn providing
the opportunity to drive investment
performance while obtaining scale in
our core markets.
25 Martin Place, Sydney NSW.
Our approach to ESG
The Dexus Sustainability Approach is
the framework for how we integrate
ESG risks and opportunities into our
strategy, asset management and
funds management.
It provides a lens through which
we address ESG issues to support
long-term value creation for our
stakeholders.
The approach guides the delivery
of our value creation outcomes of:
– Sustained Value
– Leading Cities
– Thriving People
– Future Enabled Customers and
Strong Communities
– Enriched Environment
Strategy
17
Key resources
We rely on our key resources and relationships
to create value now and into the future.
Key resources
How our key resources are linked to value creation
The value that is created
How we measure value
Our financial resources are the pool of funds available to us for deployment, which includes
debt and equity capital, as well as profits retained from our property, funds management, co-
investments, development and trading activities. This also includes the financial capital from our
third party capital partners which we invest on their behalf.
Financial
Our prudent management of financial capital underpins the delivery of superior risk adjusted
returns to Dexus investors. Our policy is to pay distributions to Security holders in line with free
cash flow for which AFFO is a proxy.
As a real estate company, our properties are central to how we create value. We actively
manage our property portfolio to enhance its potential, while unlocking value through
development to further enhance quality, or for higher and better uses.
Our portfolio is concentrated in Australia’s major cities, which we contribute to shaping as
leading destinations to live, work and play.
Properties
People and capabilities
People and
capabilities
Our people’s knowledge and expertise are key inputs to how we create value.
We are a passionate and agile team who want to make a difference. We focus on sustaining
a high-performing workforce supported by an inclusive and diverse culture.
Our intellectual capital enables us to instil strong corporate governance, sound risk
management and maintain a focus on health and safety at all levels of our business.
An engaged, capable and high performing
– Employee engagement: Employee
workforce, within and inclusive environment, that
Engagement Score
delivers on our strategy.
Our capacity to create value depends on strong relationships with our customers, local
communities and suppliers.
We work in partnership with our customers to provide engaging and productive spaces in our
buildings that satisfy their evolving needs.
We support the communities in which we operate in recognition of their contribution to the
activity and vibrancy of our spaces.
We partner with our suppliers to deliver our development projects and manage our properties
more efficiently, while maintaining a proactive focus on health and safety.
Customers and communities
Customers and
communities
Customers and communities
The efficient use of natural resources and sound management of environmental risks supports
our creation of value through delivering cost efficiencies and operational resilience.
An efficient and resilient portfolio that
– Climate resilience: Greenhouse gas
We understand, monitor and manage our environmental impact, setting short-term and
long-term measurable environmental performance targets.
We prepare for the physical impacts of climate change, while harnessing opportunities that
support the transition to a low carbon economy.
Environment
18
Superior long-term performance for our
– Distribution per security
investors and third party capital partners,
supported by integration of ESG issues into
our business model.
– Adjusted Funds From Operations (AFFO)
per security
– Return on Contributed Equity (ROCE)
– Performance against ESG benchmarks
Page 28
A high-quality portfolio that contributes to
– Scale: value of property portfolio
economic prosperity and supports sustainable
urban development across Australia’s
– Customer demand and space use:
portfolio occupancy
key cities.
– Economic contribution: construction jobs
supported and Gross Value Added (GVA) to
the economy from development projects
– Development pipeline: value of group
development pipeline
Page 42
– Gender diversity: female representation in
senior and executive management roles
– Health and safety: workplace safety
audit score
Page 52
– Community contribution: total value
contributed
– Supply chain economic contribution:
number of supplier partnerships
Page 56
emissions reductions
– Resource efficiency: energy and water
reductions and waste management
– Performance ratings: NABERS and Green
Star ratings
Page 62
Satisfied and successful customers supported
– Customer experience: customer Net
by high-performing workspaces and a
Promoter Score
comprehensive customer product and service
offering. Well connected, prosperous and
strong communities within and around
our properties.
A network of capable and effective supplier
relationships that ensures ESG standards,
including modern slavery compliance, are
maintained throughout our supply chain.
minimises our environmental footprint and
is positioned to thrive in a climate-affected
future.
Dexus 2022 Annual Report Key resources
How our key resources are linked to value creation
The value that is created
How we measure value
Our financial resources are the pool of funds available to us for deployment, which includes
debt and equity capital, as well as profits retained from our property, funds management, co-
investments, development and trading activities. This also includes the financial capital from our
third party capital partners which we invest on their behalf.
Our prudent management of financial capital underpins the delivery of superior risk adjusted
returns to Dexus investors. Our policy is to pay distributions to Security holders in line with free
cash flow for which AFFO is a proxy.
As a real estate company, our properties are central to how we create value. We actively
manage our property portfolio to enhance its potential, while unlocking value through
development to further enhance quality, or for higher and better uses.
Our portfolio is concentrated in Australia’s major cities, which we contribute to shaping as
leading destinations to live, work and play.
Our people’s knowledge and expertise are key inputs to how we create value.
We are a passionate and agile team who want to make a difference. We focus on sustaining
a high-performing workforce supported by an inclusive and diverse culture.
Our intellectual capital enables us to instil strong corporate governance, sound risk
management and maintain a focus on health and safety at all levels of our business.
Our capacity to create value depends on strong relationships with our customers, local
communities and suppliers.
We work in partnership with our customers to provide engaging and productive spaces in our
buildings that satisfy their evolving needs.
We support the communities in which we operate in recognition of their contribution to the
activity and vibrancy of our spaces.
We partner with our suppliers to deliver our development projects and manage our properties
more efficiently, while maintaining a proactive focus on health and safety.
The efficient use of natural resources and sound management of environmental risks supports
our creation of value through delivering cost efficiencies and operational resilience.
We understand, monitor and manage our environmental impact, setting short-term and
long-term measurable environmental performance targets.
We prepare for the physical impacts of climate change, while harnessing opportunities that
support the transition to a low carbon economy.
Superior long-term performance for our
investors and third party capital partners,
supported by integration of ESG issues into
our business model.
A high-quality portfolio that contributes to
economic prosperity and supports sustainable
urban development across Australia’s
key cities.
Sustained
value
Leading
cities
An engaged, capable and high performing
workforce, within and inclusive environment, that
delivers on our strategy.
Satisfied and successful customers supported
by high-performing workspaces and a
comprehensive customer product and service
offering. Well connected, prosperous and
strong communities within and around
our properties.
A network of capable and effective supplier
relationships that ensures ESG standards,
including modern slavery compliance, are
maintained throughout our supply chain.
An efficient and resilient portfolio that
minimises our environmental footprint and
is positioned to thrive in a climate-affected
future.
People and capabilities
Thriving people
Thriving
people
Customers and communities
Future Enabled Customers
and Strong Communities
Future enabled
customers
and strong
communities
Customers and communities
Future Enabled Customers
and Strong Communities
Enriched
environment
– Distribution per security
– Adjusted Funds From Operations (AFFO)
per security
– Return on Contributed Equity (ROCE)
– Performance against ESG benchmarks
Page 28
– Scale: value of property portfolio
– Customer demand and space use:
portfolio occupancy
– Economic contribution: construction jobs
supported and Gross Value Added (GVA) to
the economy from development projects
– Development pipeline: value of group
development pipeline
Page 42
– Employee engagement: Employee
Engagement Score
– Gender diversity: female representation in
senior and executive management roles
– Health and safety: workplace safety
audit score
Page 52
– Customer experience: customer Net
Promoter Score
– Community contribution: total value
contributed
– Supply chain economic contribution:
number of supplier partnerships
Page 56
– Climate resilience: Greenhouse gas
emissions reductions
– Resource efficiency: energy and water
reductions and waste management
– Performance ratings: NABERS and Green
Star ratings
Page 62
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Key resources
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Key business
activities
We create value for all our stakeholders
through utilising our investment and asset
management, development, transaction
and trading capabilities.
Key
resources
Key business
activities
Dexus Sustainability
Approach
Value creation
outcomes
g
Inve stin
T
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&
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Office
Industrial
Retail
Healthcare
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M
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D evelo
Sustained Value
Pages 28-41
Leading Cities
Pages 42-51
Thriving People
Pages 52-55
Future Enabled
Customers and Strong
Communities
Pages 56-61
Enriched Environment
Pages 62-69
Financial
Properties
People and
capabilities
Customers and
communities
Environment
20
Dexus 2022 Annual Report
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25 Martin Place, Sydney NSW.
Our current operations comprise four
key business activities of investing,
managing, developing, transacting and
trading high-quality properties located
in Australia’s major cities, each of which
seeks to maximise cash flow and unlock
value over the investment lifecycle.
Our investment track record has
enabled Dexus to attract third party
capital partners in the office, industrial
and healthcare property sectors, in
turn providing the opportunity to drive
investment performance while obtaining
scale in our core markets. We believe
that scale supports the generation of
investment outperformance for both
Dexus investors and our third party
capital partners through broader
customer insights, the provision of a
greater range of workspace solutions
and increased capacity to invest in
people, systems and technologies that
enhance our customers’ experience.
Investing
Dexus invests in a directly held property
portfolio, which is the largest driver
of financial value (86%1 of Funds From
Operations (FFO) for the financial year
ended 30 June 2022), containing the
Dexus owned office, industrial and
healthcare portfolios. At 30 June
2022, Dexus directly owns a portfolio
of 187 properties valued at $18.4 billion.
1 FFO is calculated before finance costs, group
corporate costs and other (including tax).
Managing
Dexus manages $44.3 billion of
Australian real estate investments
across the office, industrial, retail
and healthcare asset classes. This
includes $25.9 billion of assets under
management on behalf of third
capital partners.
We utilise our asset and property
management expertise to maximise
cash flow for assets managed across
the group. This active approach seeks
to add value through leasing to diversify
the customer mix and capitalise on the
stage that we are at in the property
cycle. Our in-house project delivery
group assists in effectively managing
downtime and delivering capital works
projects in a timely manner.
Our ability to attract key strategic
capital partners is testament to our
experience and leading market position.
We seek to be identified as the real
estate investment partner of choice in
Australia and have a strong track record
of driving investment performance for
our third party capital partners. We
believe this track record positions us
well to continue to attract like-minded
investors into our funds management
business.
Developing
Dexus focuses on development
opportunities that will enhance future
returns and improve portfolio quality
and diversification through leveraging
our integrated real estate platform.
At 30 June 2022, the group has a
$17.7 billion group development pipeline.
The pipeline includes committed and
uncommitted projects across major
Australian cities that support long-term
growth for Dexus and our third party
capital partners.
Development also delivers on our third
party capital partners’ strategies and
provides organic growth in assets
under management, and therefore
revenue potential to Dexus. Dexus’s
direct share of the development
pipeline is $10.3 billion with the
remaining $7.4 billion across our funds
management portfolio.
Transacting and trading
Dexus utilises its multi-disciplinary
expertise to identify, evaluate, and
execute acquisition and divestment
opportunities across a range of sectors
and asset types. We invest alongside
our third party capital partners to
access real estate with the objectives
of improving portfolio quality and
performance and achieving scale in
our core markets.
We have a strong track record of
investing capital at the right time in
the property cycle, acting quickly
and evolving our approach to secure
opportunities while adhering to strict
investment criteria. Our in-house trading
capabilities support the identification,
origination, evaluation and execution of
opportunities across the office, industrial,
healthcare and retail sectors and
leverages our capabilities to achieve
trading profits. Trading activities are
undertaken with the intention of realising
profits from the direct repositioning
of assets in the short to medium term.
These assets can either be acquired
specifically for trading or identified within
our existing portfolio as having a higher
and better use through undertaking
repositioning and trading activities. We
have delivered $475 million in trading
profits (pre-tax) since FY12, achieving an
average unlevered internal rate of return
(pre-tax) of circa 30% per annum from
our trading activities.
Key business activities
21
Key risks
Dexus recognises that effective risk management
requires an understanding of risks during all phases
of the investment life cycle.
BOARD FOCUS
The Board Risk Committee is
responsible for overseeing the
group’s risk management practices,
including the review of the Risk
Management Framework, and the
adequacy and implementation of
risk management processes and risk
management resources. Areas of
focus in FY22 included:
Key risks, controls and mitigants,
and measures set out in the
Dexus Risk Appetite Statement
Our People, particularly risks and
opportunities relating to health,
safety and wellbeing, culture
(including engagement), talent
and capability were considered
with the Board People and
Remuneration Committee
Cyber and data security
including the adequacy of
controls and disaster recovery
testing to mitigate these risks
Development risks arising from
supply chain and contractor
risk management
Project integration for corporate
acquisitions and projects
Independent review of
fraud and corruption risk as
part of ongoing diligent risk
management
Strategic risks and opportunities
Effective risk management is critical
in enabling the delivery of high-
quality products and services to
customers and maximising investor
returns We are committed to high
standards of risk management in
the way we conduct business and
actively identify and manage risks
that may impact the realisation of
our strategy.
Dexus will bring this risk
management focus to the
integration of AMP Capital in FY23.
Our key risks incorporate insights and
material topics relating to ESG from
our materiality assessment process,
described on page 27.
22
Key risk
Health, safety and wellbeing
Providing an environment that ensures the safety and
wellbeing of employees, customers, contractors and the
public at Dexus properties and responding to events that
have the potential to disrupt business continuity.
Strategic and financial performance
Capital management
Ability to meet market guidance, achieve the group’s
Positioning the capital structure of the business to withstand
strategic objectives, generate value and deliver superior
unexpected changes in equity and debt markets.
risk-adjusted performance.
Potential
impacts
– Death or injury at Dexus properties
– Loss of broader community confidence
– Reduced investor sentiment (equity and debt)
– Constrained capacity to execute strategy
– Loss of broader community confidence
– Increased cost of funding (equity and debt)
– Costs or sanctions associated with regulatory response
– Reduced credit ratings and availability of
– Fluctuations in interest rates which could impact the cost
– Costs associated with criminal or civil proceedings
– Costs associated with remediation and/or restoration
– Inability to sustainably perform or deliver objectives
– Increased employee turnover or absenteeism
Link to key
resources
Properties
Customers & communities
People & capabilities
debt financing
on the economy
Financial
Properties
Customers & communities
– Sustained inflation and recessionary pressures
– Fluctuations in foreign exchange rates which could
of debt
impact profitability
Financial
– Reduced investor sentiment (equity and debt)
– Reduced credit ratings and availability of debt financing
How
Dexus is
responding
As a priority we focus on the health, safety and wellbeing of
our employees and the people in our buildings. We adopt a
series of measures to ensure building and workplace health
and safety is maintained in and around our properties.
This includes ongoing monitoring and testing at existing
assets and regular training provided to both employees and
service providers.
We apply comprehensive work health and safety programs
and enforce compliance requirements by site contractors
and employees, in accordance with Dexus’s ISO 45001
certified Occupational Health and Safety Management
System.
We engage external consultants to identify and remediate
health and safety issues relating to the fabric of properties
across the portfolio, including facades.
We maintain a business continuity management framework
to mitigate safety threats, including the adoption of
plans relating to crisis management, business continuity
and emergency management. Responsiveness at each
property is regularly tested through scenario exercises.
Key performance indicators for reporting and resolution of
security issues are embedded into contractor agreements
at Dexus-managed assets. Our Safe & Well program
supports the mental, physical, financial and work wellbeing
of our people. Safe & Well provides a breadth of resources,
designed to help our people to develop and maintain a
healthy level of wellbeing.
We have processes in place to monitor and manage
Our prudent management of capital, including regular
performance and risks that may impact on performance.
sensitivity analysis and periodic independent reviews of the
Our strategy and risk appetite are approved annually
Treasury Policy, assists in positioning Dexus’s balance sheet in
by the Board and reviewed throughout the year
relation to unexpected changes in capital markets.
by management.
We maintain a strong balance sheet with diversified sources
The Investment Committee is responsible for the
of capital. Ongoing monitoring of capital management is
consideration, approval or endorsement, subject to
undertaken to ensure metrics are within risk appetite thresholds
delegated authority, of material investment decisions.
benchmarks and/or limits outlined within the Treasury Policy.
Detailed due diligence is undertaken for all investment
Further information relating to financial risk management is
and divestment proposals and major capital expenditure
detailed in Note 13 of the Financial Statements.
before approval or endorsement of each investment
decision.
We have a high-quality office portfolio with scale in key
Australian CBDs and a diversified development pipeline
across sectors and locations.
Major capital projects are monitored by control groups to
assess delivery and performance outcomes.
Dexus 2022 Annual Report Key risk
Health, safety and wellbeing
Providing an environment that ensures the safety and
wellbeing of employees, customers, contractors and the
public at Dexus properties and responding to events that
have the potential to disrupt business continuity.
Strategic and financial performance
Ability to meet market guidance, achieve the group’s
strategic objectives, generate value and deliver superior
risk-adjusted performance.
Capital management
Positioning the capital structure of the business to withstand
unexpected changes in equity and debt markets.
Potential
impacts
– Death or injury at Dexus properties
– Loss of broader community confidence
– Reduced investor sentiment (equity and debt)
– Constrained capacity to execute strategy
– Loss of broader community confidence
– Increased cost of funding (equity and debt)
– Costs or sanctions associated with regulatory response
– Reduced credit ratings and availability of
– Fluctuations in interest rates which could impact the cost
– Costs associated with criminal or civil proceedings
– Costs associated with remediation and/or restoration
– Inability to sustainably perform or deliver objectives
– Increased employee turnover or absenteeism
debt financing
of debt
– Sustained inflation and recessionary pressures
– Fluctuations in foreign exchange rates which could
on the economy
impact profitability
– Reduced investor sentiment (equity and debt)
– Reduced credit ratings and availability of debt financing
Financial
Properties
Customers & communities
Financial
We have processes in place to monitor and manage
performance and risks that may impact on performance.
Our strategy and risk appetite are approved annually
by the Board and reviewed throughout the year
by management.
The Investment Committee is responsible for the
consideration, approval or endorsement, subject to
delegated authority, of material investment decisions.
Detailed due diligence is undertaken for all investment
and divestment proposals and major capital expenditure
before approval or endorsement of each investment
decision.
We have a high-quality office portfolio with scale in key
Australian CBDs and a diversified development pipeline
across sectors and locations.
Major capital projects are monitored by control groups to
assess delivery and performance outcomes.
Our prudent management of capital, including regular
sensitivity analysis and periodic independent reviews of the
Treasury Policy, assists in positioning Dexus’s balance sheet in
relation to unexpected changes in capital markets.
We maintain a strong balance sheet with diversified sources
of capital. Ongoing monitoring of capital management is
undertaken to ensure metrics are within risk appetite thresholds
benchmarks and/or limits outlined within the Treasury Policy.
Further information relating to financial risk management is
detailed in Note 13 of the Financial Statements.
Link to key
resources
Properties
Customers & communities
People & capabilities
How
Dexus is
responding
As a priority we focus on the health, safety and wellbeing of
our employees and the people in our buildings. We adopt a
series of measures to ensure building and workplace health
and safety is maintained in and around our properties.
This includes ongoing monitoring and testing at existing
assets and regular training provided to both employees and
service providers.
We apply comprehensive work health and safety programs
and enforce compliance requirements by site contractors
and employees, in accordance with Dexus’s ISO 45001
certified Occupational Health and Safety Management
System.
We engage external consultants to identify and remediate
health and safety issues relating to the fabric of properties
across the portfolio, including facades.
We maintain a business continuity management framework
to mitigate safety threats, including the adoption of
plans relating to crisis management, business continuity
and emergency management. Responsiveness at each
property is regularly tested through scenario exercises.
Key performance indicators for reporting and resolution of
security issues are embedded into contractor agreements
at Dexus-managed assets. Our Safe & Well program
supports the mental, physical, financial and work wellbeing
of our people. Safe & Well provides a breadth of resources,
designed to help our people to develop and maintain a
healthy level of wellbeing.
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Key risks
23
Key risk
Potential
impacts
Development
Achieving strategic development objectives
that provides the opportunity to grow
Dexus’s and our third party capital partners’
portfolios and enhance future returns.
Third party capital partners
Real estate investment partner of choice for third party
capital.
Cyber and data security
Environmental and social sustainability
Ability to access, protect and maintain systems and respond
Commitment to climate resilience and responding to the
to major incidents including data loss, cyber security threats or
impacts of climate change, as well as focusing on having a
breaches to information systems.
positive social impact in the communities in which
we operate.
– Fund mandates negatively impacted
– Change in strategy and/or capacity of existing third
– Lack of resilience in our response to cyber security threats
– Increased costs associated with global and domestic
– Leasing outcomes impacting on
completion valuations
party capital partners
– Impact to our customers and/or third party capital
energy crisis
– Inability to attract new third party capital partners
partners
– Fluctuations in construction costs
– Loss of confidence in governance structure and
– Loss of broader community confidence
– Negative impacts on supply chain
channels (cost and availability
of resources)
– Reputational damage
service delivery
– Loss of funds management income
– Financial losses
– Data integrity compromised
– Loss or damage to systems or assets
– Increased costs associated with physical risks
(e.g. asset damage from extreme weather)
– Increased costs associated with transition risks (e.g.
carbon regulation, requirements for building efficiency)
– Inability to maintain access to capital due to
reputational damage
– Increased reputational risk for not supporting the
community and social causes
– Increased difficulties in leasing assets due to
heightened risk of climate change impact
Link to key
resources
Financial
Properties
Financial
Properties
Customers & communities
People & capabilities
Properties
Customers & communities
Environment
Customers & communities
How
Dexus is
responding
Dexus has a strong development
capability with a proven track record of
delivering projects with a focus on quality,
sustainability and returns that satisfy
the evolving needs of our growing
customer base.
We have platform-wide expertise that
drives our development performance and
objectives, including design and costing,
leasing, risk and compliance and insurance
coverage.
The Investment Committee is responsible
for the consideration, approval or
endorsement, subject to delegated
authority, of material investment decisions.
Detailed due diligence is undertaken
for all developments before approval or
endorsement of each investment decision.
Our funds management model includes strong governance
principles and processes designed to build and strengthen
relationships with existing and prospective third party
capital partners.
Our active approach to engagement across the business
enables employees to understand the interests of third
party capital partners and design strategies to maintain
partner satisfaction.
Our Funds Management team also undertakes a periodic
client survey to understand perceptions and identify areas
for improvement.
We aim to have the most efficient systems and processes,
We use scenario analysis to understand the broad range of
including financial accounting and operational systems.
climate-related issues that may impact our business and
Regular reviews of policies and procedures on information
focus on enhancing the resilience of our properties while
security are undertaken and align to the National Institute of
implementing energy efficiency initiatives and renewable
Standards and Technology (NIST) Cyber Security Framework.
energy projects.
We have comprehensive Business Continuity and Disaster
Dexus’s approach to climate change risk management is
Recovery plans in place which are tested annually.
Regular training, testing and disaster recovery activities are
conducted, along with the employment of data security
software, to assist in reducing the risk of threats or breaches
disclosed in accordance with the recommendations of
the Task Force on Climate-related Financial Disclosures
across our Annual Reporting Suite (see page 43 in the
2022 Sustainability Report).
to data. Mitigation strategies are in place to address potential
We established a Social Impact Strategic Framework in
cyber security threats to, or via, our assets. We also educate
FY22 that is designed to streamline community activities
and train our people on how to best protect their data.
and maximise the value created for Dexus and the
communities in which it operates.
We are committed to ensuring our operations provide
quality jobs with the right conditions and collaborate with
our suppliers to understand how we can contribute to
upholding human rights across our supply chain, including
addressing modern slavery.
24
Dexus 2022 Annual Report Potential
impacts
– Leasing outcomes impacting on
completion valuations
party capital partners
Key risk
Development
Third party capital partners
Achieving strategic development objectives
Real estate investment partner of choice for third party
that provides the opportunity to grow
capital.
Dexus’s and our third party capital partners’
portfolios and enhance future returns.
Cyber and data security
Ability to access, protect and maintain systems and respond
to major incidents including data loss, cyber security threats or
breaches to information systems.
Environmental and social sustainability
Commitment to climate resilience and responding to the
impacts of climate change, as well as focusing on having a
positive social impact in the communities in which
we operate.
– Fund mandates negatively impacted
– Change in strategy and/or capacity of existing third
– Lack of resilience in our response to cyber security threats
– Increased costs associated with global and domestic
– Impact to our customers and/or third party capital
energy crisis
– Fluctuations in construction costs
– Loss of confidence in governance structure and
– Loss of broader community confidence
– Inability to attract new third party capital partners
partners
– Negative impacts on supply chain
service delivery
channels (cost and availability
– Loss of funds management income
of resources)
– Reputational damage
– Financial losses
– Data integrity compromised
– Loss or damage to systems or assets
– Increased costs associated with physical risks
(e.g. asset damage from extreme weather)
– Increased costs associated with transition risks (e.g.
carbon regulation, requirements for building efficiency)
– Inability to maintain access to capital due to
reputational damage
– Increased reputational risk for not supporting the
community and social causes
– Increased difficulties in leasing assets due to
heightened risk of climate change impact
Link to key
resources
Financial
Properties
Financial
Properties
Customers & communities
People & capabilities
Properties
Customers & communities
Environment
Customers & communities
How
Dexus is
responding
Dexus has a strong development
Our funds management model includes strong governance
capability with a proven track record of
principles and processes designed to build and strengthen
delivering projects with a focus on quality,
relationships with existing and prospective third party
sustainability and returns that satisfy
capital partners.
the evolving needs of our growing
customer base.
Our active approach to engagement across the business
enables employees to understand the interests of third
We have platform-wide expertise that
party capital partners and design strategies to maintain
drives our development performance and
partner satisfaction.
Our Funds Management team also undertakes a periodic
client survey to understand perceptions and identify areas
for improvement.
objectives, including design and costing,
leasing, risk and compliance and insurance
coverage.
The Investment Committee is responsible
for the consideration, approval or
endorsement, subject to delegated
authority, of material investment decisions.
Detailed due diligence is undertaken
for all developments before approval or
endorsement of each investment decision.
We aim to have the most efficient systems and processes,
including financial accounting and operational systems.
Regular reviews of policies and procedures on information
security are undertaken and align to the National Institute of
Standards and Technology (NIST) Cyber Security Framework.
We have comprehensive Business Continuity and Disaster
Recovery plans in place which are tested annually.
Regular training, testing and disaster recovery activities are
conducted, along with the employment of data security
software, to assist in reducing the risk of threats or breaches
to data. Mitigation strategies are in place to address potential
cyber security threats to, or via, our assets. We also educate
and train our people on how to best protect their data.
We use scenario analysis to understand the broad range of
climate-related issues that may impact our business and
focus on enhancing the resilience of our properties while
implementing energy efficiency initiatives and renewable
energy projects.
Dexus’s approach to climate change risk management is
disclosed in accordance with the recommendations of
the Task Force on Climate-related Financial Disclosures
across our Annual Reporting Suite (see page 43 in the
2022 Sustainability Report).
We established a Social Impact Strategic Framework in
FY22 that is designed to streamline community activities
and maximise the value created for Dexus and the
communities in which it operates.
We are committed to ensuring our operations provide
quality jobs with the right conditions and collaborate with
our suppliers to understand how we can contribute to
upholding human rights across our supply chain, including
addressing modern slavery.
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Key risks
25
Key risk
Potential
impacts
Compliance and
regulatory
Maintaining market leading
governance and compliance
practices.
Organisational culture
Ability to maintain a respectful,
open and inclusive culture
which reflects our values and
embraces diversity of thought.
Talent and capability
Ability to attract and retain the
best talent to deliver business
results.
– Sanctions impacting on
business operations
– Decreased business
– Decreased business
performance
performance
– Reduced investor sentiment
– Inappropriate conduct
– Negative impact to
(equity and debt)
– Loss of broader community
leading to reputational or
financial loss
customer relationships
– Decline in workforce
confidence
– Reduced investor sentiment
productivity
– Increased compliance costs
(equity and debt)
– Increased workforce costs
– Loss of corporate knowledge
and experience
– Poor employer branding
leading to inability to attract
talent
– Unplanned employee
turnover and associated
increased costs and time
to resource
Link to key
resources
How
Dexus is
responding
People & capabilities
People & capabilities
People & capabilities
Our compliance monitoring
program supports our
comprehensive compliance
policies and procedures that are
regularly updated to ensure the
business operates in accordance
with regulatory expectations.
Our employees and service
providers receive training on their
compliance obligations and are
encouraged to raise concerns
where appropriate.
We maintain grievance,
complaints and whistleblower
mechanisms for employees and
stakeholders to safely, confidently
and anonymously raise concerns.
Independent industry experts are
appointed to undertake reviews
where appropriate.
We foster a culture and employee
experience that aligns and
continually reinforces the group’s
purpose statement, including
our aspirations, values and
behaviours. Our employee
listening strategy enables
employees to provide real-time
feedback on their experience,
as well as anecdotal and
anonymous feedback via regular
pulse surveys throughout the
year. Insights gained are used to
understand organisational culture
and identify potential challenges
that may require additional
focus. Psychological safety and
inclusion are central to the design
of employee experiences, policies
and protocols. Our employee
reference groups are empowered
to implement organisational
initiatives to build a culturally
inclusive workplace, such as our
LGBTI+ TRIBE employee network
and the RAP working group. We
also invest in our employees’
development and reward their
achievement of sustainable
business outcomes that add value
to our stakeholders.
We aim to attract, develop and
retain an engaged and capable
workforce that can deliver our
business results both today
and in the future. Professional
development is undertaken
at all organisational levels to
drive continuous learning and
engagement of our employees.
Talent reviews are conducted
at regular intervals to monitor
and respond to emerging talent
risks and opportunities and to
inform succession plans for key
and critical roles. External talent
mapping is undertaken for
critical roles.
As a part of the broader Dexus
value proposition and integral on
how we attract and retain talent,
our people are offered with the
opportunity to have an ownership
interest in Dexus and in doing so,
promote a tangible link between
the interests of employees, Dexus
and its investors. All eligible
employees are allocated a
number of DXS securities with an
aggregate equivalent cash value
of $1,000.
While this section highlights key risks, we are unable to foresee all risks, opportunities and outcomes that will materially affect our ability to create value
over the long term.
26
Dexus 2022 Annual Report Materiality assessment
The concept of materiality supports
Dexus’s approach to managing
ESG risks and opportunities because it:
– Ensures that the business focuses
on the issues of greatest importance
to its particular industry and
business model
– Communicates to the market
that the business has a strong
understanding of how ESG impacts
value creation, which in turn
increases market confidence
Recognising this, Dexus has completed
regular materiality assessments since
2011 to inform its approach to ESG
and reporting, as detailed in the 2022
Sustainability Report on pages 6-7.
Our most recent external materiality
assessment was completed in 2020.
In the years between comprehensive
materiality assessments, Dexus
completes materiality reviews to confirm
the continued relevance of its material
ESG issues. In 2022, a materiality review
was conducted to consider changes
to Dexus’s operating environment,
additions to the Dexus portfolio, and
evolving stakeholder expectations since
its latest comprehensive materiality
assessment in 2020.
Dexus consulted with representatives
from the following teams during its
2022 materiality review:
– Senior leadership
– Listed Funds
– Funds Management
– Research
– Property Management
The process revealed that the key
megatrends and material ESG issues
identified in 2020 remain relevant for
Dexus. Of the nine material topics, five
were emphasised in the 2022 Materiality
Management Review and are indicated
in the table below. These material
issues help structure our reporting and
are a major consideration for how we
evolve our approach to ESG over time.
To reflect changes in Dexus’s operating
environment since 2020, updates to
megatrend descriptions were made and
are reflected in the Megatrends section
on pages 14-15.
Our material ESG issues formed the
basis for identifying material matters
for value creation as defined by the
International Integrated Reporting
Council Framework, which are
disclosed as ‘value drivers’ within
our value creation framework on
pages 12-13.
Megatrend
Material topic
Value drivers
Growth in sustainable investment
Upholding a social licence to operate
by meeting stakeholder expectations
for sustainability performance
– Corporate governance
– Green buildings
– Climate resilience
– Community and supply chain
partnerships
Growth in pension capital
fund flows
Ensuring high standards of corporate
governance and transparency
– Corporate governance
Urbanisation
Expanding our economic impact
on Australian cities
– Portfolio scale and occupancy
– Economic contribution
– Development pipeline
– Green buildings
Social and demographic
Championing an inclusive and
high-performing culture
– Employee engagement
– Inclusion and diversity
Prioritising safety and wellbeing in our
workplace and at our assets
– Health and safety
– Customer experience
Climate change
Maintaining a portfolio resilient to the
physical impacts of climate change
– Climate resilience
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Technological change
Managing the use of resources
efficiently
Supporting the transition to a
low carbon economy through
decarbonisation
Deploying smart building technology
along with mobile and virtual
technology to enhance the customer
experience
– Resource efficiency
– Resource efficiency
– Customer experience
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Unchanged
Increased emphasis in 2022
Materiality assessment
27
How we are creating
Sustained Value
$1,615.9m
Net profit after tax
FY21: $1,138.4m
$81.7m
Management operations FFO
FY21: $57.7m
53.2cents
AFFO and Distribution per security
FY21: 51.8 cents
9.7%
Return on Contributed Equity
28
Dexus 2022 Annual Report
Financial
Our conservative and active management
of financial capital underpins the delivery of
superior risk-adjusted returns to investors.
BOARD FOCUS
Financial performance is a key
focus area for the Board and
Board Audit Committee. In FY22,
the Board and Board Audit
Committee were involved in:
Considering and approving
Dexus’s financial reports, audit
reports, market guidance,
distribution details, funding
requirements and liquidity,
as well as property portfolio
valuation movements and
the implementation of the
internal audit program
Approving the group’s
Financial KPIs and scorecard,
in addition to annual and
half year results materials
Approving the group’s capital
management initiatives
Approving enhancements to
segment reporting for fund
co-investments
Endorsing the review of
the external tax service
provider model
Approving up to $1.9 billion
of new bank facilities and
$850 million in aggregate of
bank facility extensions in FY22
Approving Dexus entering into
a Share Sale and Purchase
Agreement to acquire AMP
Capital’s real estate and
domestic infrastructure
equity business
Approving the variations
to the Australian Financial
Services Licence
Approving the extension
of auditor term
Overseeing the 2022
materiality assessment
Our financial resources are the pool of
funds available to us for deployment,
which includes debt and equity capital,
as well as asset recycling activities
and profits retained from our property,
funds management, co-investments,
development and trading activities.
This also includes the financial capital
from our third party capital partners
which we invest on their behalf.
During the year, we maintained our
focus on the strategic objectives
of investing in income streams that
provide resilience through the cycle and
expanding and diversifying the funds
management business.
The scale of our balance sheet and
deep access to pools of capital are
key enablers of our strategy, supported
by our prudent approach to capital
management.
Earnings drivers
Our earnings are driven by four
key areas:
– Property portfolio: the largest
driver of financial value, comprising
revenue from the Dexus owned
office and industrial portfolio
– Funds management: a driver of
financial value, providing access
to predominantly wholesale
sources of financial capital, and
enabling a growing income
stream as well as enhancing
returns for Dexus investors
– Co-investment income: a
growing driver of financial
value, comprising income from
investments in pooled property
and real estate securities funds
– Trading: an established driver of
financial value that involves the
packaging and sale of properties
to generate trading profits
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Financial
29
How we measure
financial performance
When measuring financial performance,
we focus on growth in Adjusted
Funds From Operations (AFFO) and
distribution per security, as well as
Return on Contributed Equity to
measure the returns achieved for our
Security holders.
Group performance
Dexus’s activity drove a solid financial
result for the year. FY22 guidance
provided at the FY21 annual results was
subsequently upgraded in May 2022 to
deliver distribution per security growth
of not less than 2.5%. This guidance was
delivered upon, with the achievement
of a full year distribution of 53.2 cents
per security, reflecting 2.7% growth
compared to FY21.
This result was also achieved despite
the delayed return to office by the
Omicron outbreak and severe weather
impacts. In addition, the rapid increase
in interest rates amid rising inflation
presented a high degree of uncertainty
both in the transaction and financial
markets.
Despite the challenging operating
environment, FY22 was characterised
by resilient portfolio occupancy, strong
rent collections, selective recycling
of assets and reinvestment into
quality acquisition and development
opportunities, as well as several
initiatives to enhance our funds
management business.
Dexus’s group development pipeline
now stands at a cost of $17.7 billion, of
which $10.3 billion sits within the Dexus
portfolio and $7.4 billion within third
party funds.
Net profit after tax was $1,615.9 million, up
41.9% on the prior year. This movement
was primarily driven by fair value gains
on investment properties, share of net
profit of equity accounted investments
and, a favourable net fair value
movement of derivatives and foreign
currency interest bearing liabilities.
30
The external independent valuations
resulted in a total $926.0 million or circa
5.6% increase on prior book values for
the 12 months to 30 June 2022. These
revaluation gains primarily drove the
86 cent or 7.5% increase in net tangible
asset (NTA) backing per security during
the year to $12.28 at 30 June 2022. Post
completion of the AMP Capital platform
acquisition, NTA is expected to reduce
given the consideration in connection
with management rights which are
classified as intangible assets.
Operationally, Underlying Funds From
Operations (excluding trading profits)
of $734.2 million was 10.1% higher than
the prior year. AFFO of $572.2 million was
1.9% higher than the prior year, driven by
acquisitions including Capital Square and
Jandakot in Perth, non-recurring income
on development impacted properties
and significant growth in Management
operations FFO and co-investment
income from pooled funds. These positive
impacts were partly offset by higher
maintenance capex and incentives, and
lower trading profits.
Key drivers included:
– Property FFO increased by
$27.5 million driven by acquisitions
including Capital Square and
Jandakot in Perth and non-
recurring income on development
impacted properties, partially
offset by divestments including
Grosvenor Place in Sydney. Rent
relief outcomes associated with
the pandemic were better than
expected and rent collections were
strong at 98.5% in FY22
– Management operations FFO
increased by $24.0 million
supported by platform growth,
including the APN acquisition, a
full-year contribution of the merger
of ADPF with DWPF, establishment
of the Jandakot joint venture and
growth in a number of new and
existing funds
– Net finance costs reduced by
$11.3 million, primarily due to an
interest reimbursement received
from the delayed settlement of
Grosvenor Place in Sydney, interest
income on Capital Square in Perth
and lower cost of debt, partially
offset by increased debt to fund
acquisitions and development
spend
– Income from co-investments in
pooled funds increased by
$21.0 million, driven by investments
in Dexus Industria REIT and Dexus
Convenience Retail REIT, a full-
year contribution from Dexus’s
investment in Australian Unity
Healthcare Property Trust (AUHPT),
as well as income growth from DHPF
– Other FFO reduced by $5.6 million,
predominantly driven by higher tax
on underlying FFO
AFFO was $572.2 million or 1.9% higher
than the prior year driven by:
– Trading profits of $23.4 million (net
of tax) were $27.0 million lower than
the prior year, with four trading
projects contributing to the
FY22 result in line with expectations.
Six properties have been identified
as trading opportunities, with the
potential to contribute to future
earnings
– Maintenance capex and incentives
of $185.4 million were $30.1 million
higher than the prior year driven by
the cumulative impact from rent
abatement on leasing done during
COVID-19 where incentives were
elevated
– On a per security basis, AFFO and
distributions per security were 53.2
cents, up 2.7% on the prior year. The
distribution payout ratio remains
in line with free cash flow for which
AFFO is a proxy, in accordance with
Dexus’s distribution policy
– We continued to maintain a strong
and conservative balance sheet
with gearing (look-through)1 of
26.9% remaining below our target
range of 30-40%
1 Adjusted for cash and debt in equity
accounted investments and excluding
Dexus’s share in co-investments in pooled
funds. Look-through including Dexus’s share
of co-investments in pooled funds was
27.8% as at 30 June 2022.
Dexus 2022 Annual Report
$81.7m
$57.7m
FY21
FY22
30
25
20
15
10
5
0
339%
$25.9bn
$1.1bn
$2.2bn
$6.6bn
$16.0bn
$5.9bn
$2.0bn
$3.9bn
$3.8bn
FY12
FY22
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Valuation movements
Total FY22
30 Jun 2022
31 Dec 2021
Office portfolio
Industrial portfolio
Total portfolio1
Weighted average
capitalisation rate
Office portfolio
Industrial portfolio
Total portfolio
$422.8m
$482.4m
$926.0m
$275.8m
$152.3m
$439.5m
$147.0m
$330.1m
$486.6m
30 Jun 2022
30 Jun 2021
Change
4.75%
4.29%
4.64%
4.91%
4.92%
4.91%
-16bps
-63bps
-27bps
1 Valuation movement excludes co-investments in pooled funds and financial assets. Includes
healthcare and other property revaluation gain of $20.8m and excludes leased assets and right
of use assets revaluation gain of $0.8m.
86% of FFO from
property portfolio1
Office property FFO
Industrial property FFO
Management operations
Co-investments in pooled funds
Change
Trading profits (net of tax)
70%
16%
9%
3%
2%
1 FFO is calculated before finance costs,
group corporate costs and other
(including tax).
COMMITMENTS
Based on expectations
regarding interest rates,
continued asset sales
and barring unforeseen
circumstances, Dexus
expects distributions of
50.0-51.5 cents per security
for the 12 months ended
30 June 20231, below the
53.2 cents per security
delivered in FY22
Maintain a strong and
diversified balance sheet
Focus areas
Maintaining leadership in
ESG benchmarks
We continued to maintain a strong financial position with low gearing
and enhanced liquidity.
Key financials
Funds From Operations (FFO) ($m)
Net profit after tax ($m)
AFFO per security (cents)
Distribution per security (cents)
Net tangible asset backing per
security ($)
Return on Contributed Equity (%)
Gearing (look-through)1 (%)
FFO composition
Office property FFO
Industrial property FFO
Total property FFO
Management operations4
Group corporate
Net finance costs
Co-investments in pooled funds5
Other (including tax)6
Underlying FFO
Trading profits (net of tax)
FFO
FY22
757.6
1,615.9
53.2
53.2
12.28
9.7
26.92
FY22
$m
655.6
152.4
808.0
81.7
(44.7)
(118.4)
29.1
(21.5)
734.2
23.4
757.6
FY21
717.0
1,138.4
51.8
51.8
11.42
8.3
26.7
FY21
$m3
658.3
122.2
780.5
57.7
(34.1)
(129.7)
8.1
(15.9)
666.6
50.4
717.0
5.7%
41.9%
2.7%
2.7%
7.5%
1.4ppt
0.2ppt
Change
%
(0.4%)
24.7%
3.5%
41.6%
31.1%
(8.7%)
259.3%
35.2%
10.1%
(53.6%)
5.7%
1 Adjusted for cash and debt in equity accounted investments.
2 Excluding Dexus’s share of co-investments in pooled funds. Look-through gearing including
Dexus’s share of co-investments in pooled funds is 27.8% as at 30 June 2022.
3 FY21 amounts have been restated to reflect the impact resulting from presentational changes
made during FY22 to separately disclose segment information relating to co-investments.
4 Management operations FFO includes development management fees.
5
Includes distribution income from Dexus’s co-investment stakes in pooled funds and excludes
joint venture and partnership income which is proportionately consolidated in Note 1 Operating
Segments within Dexus’s Financial Statements.
6 Other FFO includes non-trading related tax expense, directly owned healthcare property
and other miscellaneous items.
1 Assumes average floating rates of 2.75%-3.75%
(90-day BBSW), the transition of circa $21 billion
of FUM from the acquisition of the AMP Capital
real estate and domestic infrastructure equity
platform and circa $50-$55 million of trading
profits (post-tax).
LEARN MORE
To learn more about our progress against
our FY22 Sustained Value approach and
commitments, refer to the 2022 Sustainability
Report available at www.dexus.com
Financial
31
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% p.a.
12%
10%
8%
6%
4%
2%
0%
% p.a.
16
15
14
13
12
11
10
11.2% 11.2%
11.1%
9.1%
9.3%
9.6%
4.8%
3.3%
3.0%
1 year
3 years
5 years
14.7%
14.1%
12.9%
13.0%
13.1%
12.7%
13.5%
13.0%
11.8%
1 year
3 years
5 years
Group outlook
Dexus has demonstrated resilience,
growing or holding distributions over
the past few years despite the impacts
of the COVID-19 pandemic. Recycling
assets has enabled us to maintain a
strong balance sheet, giving us capital
to fund our development pipeline and
growing funds management business.
We anticipate a challenging period
over the next two years with rising
interest rates, ongoing supply chain
disruptions, a global energy crisis
and geopolitical risks contributing to
continued economic uncertainty. Higher
interest rates are expected to impact
our results in FY23.
Based on current expectations
regarding interest rates, continued
asset sales and barring unforeseen
circumstances, Dexus expects
distributions of 50.0–51.5 cents per
security for the 12 months ended
30 June 20231, below the 53.2 cents per
security distribution delivered in FY22.
In the year ahead, we will integrate
AMP Capital’s real estate and domestic
infrastructure equity platform. Looking
beyond FY23, we are set to emerge as
one of the leading real asset managers
in the Asia-Pacific region positioned
to capitalise on underlying structural
trends, and we are confident of
continuing to deliver long-term value.
1 Assumes average floating rates of
2.75%-3.75% (90-day BBSW), the transition of
circa $21 billion of FUM from the acquisition
of the AMP Capital real estate and domestic
infrastructure equity platform and circa
$50-$55 million of trading profits (post-tax).
Gateway, 1 Macquarie Place, Sydney NSW.
Statutory profit reconciliation
FY22
$m
FY21
$m1
Statutory AIFRS Net profit after tax
1,615.9
1,138.4
Gains from sales of investment property
2.0
(6.0)
Fair value gain on investment property
(926.0)
(583.4)
Fair value (gain)/loss on the mark-to-market of derivatives
Incentives amortisation and rent straight-line2
Non-FFO tax expense/(benefit)
Share of co-investment adjustments
Other unrealised or one-off items
Funds From Operations (FFO)3
Maintenance capital expenditure
Cash incentives and leasing costs paid
Rent free incentives
Adjusted Funds From Operations (AFFO)4
Distribution
AFFO Payout ratio (%)
37.8
152.6
(20.3)
(39.2)
(65.2)
757.6
(72.4)
(37.0)
(76.0)
572.2
572.2
100.0
102.4
154.7
3.2
(16.2)
(76.1)
717.0
(72.0)
(29.9)
(53.4)
561.7
561.0
99.9
1 FY21 amounts have been restated to reflect the impacts resulting from presentational changes made
during FY22 to separately disclose segment information relating to co-investments.
2 Including cash, rent free and fit out incentives amortisation.
3 Including Dexus share of equity accounted investments.
4 AFFO is in line with the Property Council of Australia definition.
32
Dexus 2022 Annual Report Funds management
performance
Dexus manages $25.9 billion of funds on
behalf of a diversified mix of investors.
Our strategic objective of being the real
estate investment partner of choice in
Australian property and track record
of driving investment performance
enables us to attract long-term and
stable capital partners to invest
alongside through the cycle. Dexus
remains an attractive Australian real
estate partner of choice across the
office, industrial, retail and healthcare
sectors.
All funds delivered solid performance
to 30 June 2022. DWPF continued to
outperform its benchmark over one,
three, five, seven and ten years.
DHPF delivered strong performance,
achieving a one-year return of
20.4%. Dexus Australian Logistics Trust
(DALT) delivered a 28.9% one-year
return and 20.7% return since inception.
Management operations earnings
grew significantly in FY22, as a result
of delivering on a number of growth
initiatives, including:
– The merger of ADPF and DWPF
– The acquisition of the APN Property
Group
– Establishing the $1.3 billion
Jandakot joint venture alongside
DXI, and introducing Cbus Super
prior to final settlement
– Organic growth delivered across
a number of vehicles
DHPF successfully raised $250 million1
of new equity and acquired Arcadia
Pittwater Private Hospital and
day rehabilitation facility located
in Warriewood on the Northern
Beaches of Sydney. DHPF’s funds
under management now stands at
$949 million across 10 assets with an
on-completion value of $1.5 billion.
In DALT, Blackstone’s Core+ Real Estate
strategy in Asia acquired GIC’s 49%
joint venture interest in the partnership,
with the existing management
arrangements for DALT remaining
unchanged.
$57.7m
Dexus also established the Dexus
Real Estate Partnership 1 (DREP1),
the first in a planned series of closed
end opportunity funds. The fund is
approaching its $300 million equity
commitment target and has secured
its first four investments while actively
pursuing further opportunities. Dexus
expects to launch the second fund in
this series during 2023.
DWPF raised $200 million of new equity
during the year. Dexus continues
to work through the ADPF legacy
redemption requests, having fulfilled
approximately $1.8 billion to date.
$81.7m
Dexus integrated the listed and unlisted
funds that comprised APN Property
Group onto the Dexus platform.
Both Dexus Convenience Retail
REIT (DXC) and Dexus Industria REIT
(DXI) were able to leverage Dexus’s
platform capabilities, with both funds
undertaking acquisitions supported
by successful equity raisings during
the year. Both funds have also taken
the opportunity to divest assets and
initiated on-market securities buyback
programs to enhance Securityholder
returns amidst market volatility.
1 Includes Dexus participation in funds equity
raising.
FY21
FY22
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Joint ventures
Listed REITS
Real estate securities and other
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Management operations FFO
Third party FUM
$81.7m
$57.7m
30
25
20
15
10
5
339%
$25.9bn
$1.1bn
$2.2bn
$6.6bn
$16.0bn
$5.9bn
$2.0bn
$3.9bn
FY21
FY22
0
$3.8bn
FY12
FY22
1
Includes Dexus ownership interest on completion value of assets under development
$16.0bn
9.1%
9.3%
9.6%
11.2% 11.2%
11.1%
1 year
3 years
5 years
339%
$25.9bn
$1.1bn
$2.2bn
$6.6bn
$5.9bn
$2.0bn
$3.9bn
$3.8bn
FY12
4.8%
FY22
3.3%
3.0%
% p.a.
15
30
25
20
12%
10
10%
5
8%
6%
0
4%
2%
0%
% p.a.
16
15
14
13
12
11
10
11.2% 11.2%
11.1%
14.7%
14.1%
9.1%
9.3%
9.6%
12.9%
13.0%
13.1%
12.7%
13.5%
13.0%
11.8%
4.8%
3.3%
3.0%
1 year
3 years
5 years
1 year
3 years
5 years
% p.a.
12%
10%
8%
6%
4%
2%
0%
% p.a.
16
15
14
13
12
11
10
14.7%
14.1%
12.9%
13.0%
13.1%
12.7%
13.5%
13.0%
11.8%
1 year
3 years
5 years
Dexus funds management
business composition
Sub-sector split
$25.9bn
$81.7m
Diversified management business
Our suite of unlisted vehicles is shown below and
$81.7m
includes open-ended funds, listed funds, joint ventures
or partnerships, and real estate securities funds.
$57.7m
Unlisted
Institutional Pooled
Funds
$57.7m
$81.7m
Direct Unlisted
$57.7m
FY21
FY22
External FUM
$16.0bn
External FUM
$0.1m
FY21
FY22
Office
$10.6bn
Industrial
$7.3bn
Healthcare $0.9bn
Retail
$5.9bn
Real estate
securities
$1.0bn
Opportunistic $0.2bn
Investor
type
Super Funds
52%
Multi-Manager 16%
Sovereign Funds 14%
Retail and High
Net Worth
Insurance
Other
8%
7%
3%
30
DWPF
25
30
20
25
15
20
30
10
DHPF
15
25
5
10
20
0
$3.8bn
5
15
0
10
$3.8bn
DREP1
FY21
FY22
DDF2
$25.9bn
$1.1bn
$2.2bn
$6.6bn
$25.9bn
$1.1bn
$2.2bn
$6.6bn
$16.0bn
DRPF
$25.9bn
$1.1bn
$2.2bn
$16.0bn
$6.6bn
FY22
$16.0bn
FY22
339%
339%
339%
$5.9bn
$2.0bn
$3.9bn
$5.9bn
FY12
$2.0bn
$3.9bn
FY12
$5.9bn
Broadly classified as ‘pooled funds’
$2.0bn
5
Investor
location
$3.9bn
0
$3.8bn
FY12
FY22
Dexus FUM in pooled funds $1.0bn1
1 Reflects Dexus’s share of FUM within pooled funds, except for Real Estate Securities
funds and AUHPT, which are reflected at Dexus’s equity stake in each fund.
11.2% 11.2%
11.1%
9.1%
9.3%
9.6%
9.1%
9.3%
9.6%
11.2% 11.2%
11.1%
11.2% 11.2%
11.1%
9.1%
9.3%
9.6%
3 years
5 years
3 years
5 years
Australia
% p.a.
Offshore
12%
70%
30%
4.8%
4.8%
4.8%
10%
% p.a.
34
12%
8%
10%
6%
12%
6%
2%
10%
4%
0%
8%
2%
6%
0%
4%
2%
0%
% p.a.
% p.a.
8%
4%
3.3%
3.0%
3.3%
3.0%
1 year
3.3%
1 year
3.0%
15
% p.a.
14.7%
1 year
3 years
5 years
14.1%
14.1%
14.1%
3 years
12.9%
14.7%
13.0%
13.1%
12.7%
13.5%
13.0%
% p.a.
14
12
12.9%
13.0%
13.1%
12.7%
13.0%
14.7%
1 year
12.9%
13.0%
13.1%
12.7%
13.0%
1 year
3 years
5 years
11.8%
13.5%
11.8%
11.8%
5 years
13.5%
16
16
14
15
13
16
13
11
15
12
10
14
11
13
10
12
11
10
1 year
3 years
5 years
Dexus 2022 Annual Report
Listed Funds
Real Estate
Securities
Venture Capital
Institutional Joint Ventures
External FUM
$2.2bn
External FUM
$1.0bn
External FUM
$6.6bn
DXI
AREIT Fund
Taronga Ventures
Partnership
DOTA
DALT
DXC
Asian REIT Fund
DACT
AIP
Global REIT Income Fund
MDAP
DITA
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1 Reflects Dexus’s share of FUM within pooled funds, except for Real Estate Securities
funds and AUHPT, which are reflected at Dexus’s equity stake in each fund.
Property for Income
Funds 1 & 2
Jandakot joint venture
Dexus FUM in JVs $5.2bn
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Acquisition of AMP Capital’s
platform
In April 2022, Dexus agreed to acquire
AMP Capital’s real estate and domestic
infrastructure equity business. This
transaction positions Dexus as a
leading real asset manager, with
new capabilities and an expanded
product offering, underpinned by
its best practice governance and
risk management framework.
The structure and pricing of the
acquisition were agreed having
regard to the final FUM that will
be transitioned to Dexus.
In July 2022, the unit holders of the
AMP Capital Office Fund (AWOF) voted
in favour of a change of trustee of
AWOF. Consequently the maximum
funds under management (FUM)
to be acquired is up to $21.1 billion1,
comprising $10.9 billion in real estate
and $10.2 billion in infrastructure.
As a result of AWOF exiting the
AMP Capital platform, the earn
out amount payable will reduce
to a maximum of approximately
$75 million2, taking the maximum
potential price to approximately
$325 million including the $250
million upfront cash payment.
In addition, Dexus will no longer
acquire AMP Capital’s committed
co-investment stakes in AWOF
totalling circa $270 million.
1 Based on AMP Capital’s FUM as at
30 June 2022 net of known transition
of circa $10 billion of FUM from
AMP Capital’s platform.
2 Subject to customary completion
adjustments. Earn out consideration to be
finally assessed at the end of nine months
following completion of the Transaction. The
maximum potential price of $550 million will
not be achieved given the known transition
of circa $10 billion of FUM from AMP Capital’s
platform.
36
Jandakot Airport industrial precinct, Perth WA.
Co-investment income
Dexus receives distribution income from
investments in pooled property and
real estate securities funds. Investments
in pooled funds are predominantly
represented by attractive yielding
investments in quality property
portfolios.
In FY22, Dexus received $29.1 million in
co-investment income, a significant
increase from $8.1 million in FY21. This
was driven by investments in Dexus
Industria REIT and Dexus Convenience
Retail REIT, a full-year contribution from
Dexus’s investment in AUHPT, as well as
growth from DHPF.
Funds management outlook
We are pleased to have progressed
a number of large scale strategic
initiatives during the year,
accelerating the growth and
diversification of our funds platform.
Our third party funds under
management is currently 41% in office
properties, 28% in industrial properties,
23% in retail properties, 4% in healthcare
properties, 4% in real estate securities
and 1% opportunistic strategies.
The integration of the AMP Capital
platform will position Dexus as a real
asset manager with meaningful scale
and capabilities and a market leader in
each of the sub sectors we operate in.
While valuations in the June 2022
quarter were generally firm, rising
interest rates have fuelled conjecture
about real estate pricing going
forward given a narrowing of yield
spreads. Market volatility has led to
investors becoming more cautious
and transaction volumes are slowing.
Such periods of uncertainty are
not uncommon in real estate, and
they can create opportunities for
capable, well capitalised managers.
Office and industrial property
performance is expected to be
influenced by the key indicators
described on page 38.
Dexus 2022 Annual Report $81.7m
$57.7m
FY21
FY22
$81.7m
$57.7m
FY21
FY22
30
339%
25
20
15
10
5
0
$25.9bn
$1.1bn
$2.2bn
$6.6bn
$16.0bn
$5.9bn
$2.0bn
$3.9bn
$3.8bn
FY12
FY22
$81.7m
$57.7m
FY21
30
FY22
339%
$25.9bn
$1.1bn
$2.2bn
$6.6bn
$16.0bn
25
20
15
10
5
$5.9bn
$2.0bn
$3.9bn
0
$3.8bn
FY12
FY22
339%
$25.9bn
$1.1bn
$2.2bn
$6.6bn
CASE STUDY
$16.0bn
$5.9bn
$2.0bn
$3.9bn
% p.a.
Jandakot Airport, Perth
$3.8bn
FY12
12%
10%
8%
6%
4%
2%
9.1%
9.3%
0%
FY22
Leveraging our integrated platform
to facilitate growth and enhance returns
9.3%
9.6%
9.1%
11.2% 11.2%
11.1%
The Jandakot Airport and industrial precinct is strategically
located approximately 20km south of the Perth CBD and
25km south west of Perth airport. The location appeals
to both first mile and last mile industrial customers due to
its proximity to Freemantle Port, major road networks and
nearby amenity.
4.8%
3.0%
11.2% 11.2%
11.1%
3.3%
9.6%
The precinct comprises a high-quality stabilised industrial
portfolio of 53 income producing industrial properties, circa
80 hectares of developable land, of which circa
17 hectares and the remaining circa 63 hectares is approved
under a current master plan, and a general aviation airport
operating business.
3 years
1 year
5 years
Dexus acquired Jandakot in joint venture with Dexus
Industria REIT. Australian superannuation fund Cbus Super
was subsequently welcomed as a new joint venture investor
on Dexus’s funds management platform, with Cbus Super
agreeing to purchase a 33.3% interest in the Jandakot joint
venture.
Jandakot is performing in line with underwrite expectations.
The $780 million development underwrite across 373,700
square metres is expected to be delivered at a run rate of
circa 60,000 square metres p.a. from FY23 to FY28 at an
estimated 5–6% yield on cost.
4.8%
3.3%
3.0%
1 year
5 years
% p.a.
3 years
16
% p.a.
3 years
16
12.9%
15
14
13
12
11
5 years
Off-market acquisition1
1 November 2021
14.7%
– Quality portfolio with scale
14.1%
– Secured using balance sheet strength
– Highly competitive industrial sector
13.0%
13.1%
– Portfolio of 53 industrial assets,
80 hectares of developable
land and a commercial airport
operating business
Co-investment with DXI
19 November 2021
Introduction of Cbus Super
1 April 2022
– Benefit for DXI – a transformational
acquisition with a successful
13.5%
$350 million equity raising2
13.0%
– Benefit for DXS – facilitating growth
and enhancing diversification of the
funds management business
11.8%
12.7%
– New joint venture investor on
funds management platform
– Preserving capacity to fund high
returning development pipeline
and other opportunities
14.7%
Ownership:
14.1%
10
12.9%
13.0%
13.1%
12.7%
13.0%
1 year
13.5%
3 years
5 years
$1.3bn3
11.8%
$1.3bn3
$1.3bn
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1 year
3 years
Dexus
100%
5 years
Dexus
DXI
66.7%
33.3%
Dexus
DXI
33.4%
33.3%
Cbus Super
33.3%
12.9%
13.0%
13.1%
12.7%
13.5%
13.0%
11.8%
1 year
3 years
5 years
1 DXI committed to acquire 33.3% shortly after initial settlement.
2 $350 million equity raising proceeds used to partially fund the acquisition
of a 33.3% interest in Jandakot Airport, 100% interest in 2 Maker Place, Truganina VIC
and a 50% interest in Lot 2, 884-928 Mamre Road, Kemps Creek NSW.
3 Gross price paid.
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30
25
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15
10
5
0
4.8%
3.3%
3.0%
11.2% 11.2%
11.1%
9.1%
9.3%
0%
9.6%
1 year
% p.a.
12%
10%
8%
6%
4%
2%
15
14
13
12
11
10
% p.a.
12%
10%
8%
6%
4%
2%
0%
% p.a.
16
15
14
13
12
11
10
In the face of a
complex health and
economic environment
we remained focused
on supporting our
customers and
maximising the
performance of the
property portfolio.
Property portfolio
performance
We remained focused on maximising
the performance of the property
portfolio through maintaining high
occupancy, with the property portfolio
contributing to 86% of FFO in FY221.
Office portfolio performance
Dexus manages a high-quality
$23.9 billion group office portfolio,
$13.3 billion of which sits in the
Dexus portfolio.
During the year, we leased 152,877
square metres of office space across
292 transactions, as well as 96,749
square metres of space across 12 office
developments deals, locking in future
income streams.
Office portfolio occupancy was
maintained above 95% with vacancy
concentrated in Melbourne which has
been more adversely impacted by
extended lockdowns. We achieved
strong leasing with average terms of
new leases at circa 5.6 years across our
stabilised portfolio.
38
5 Martin Place, Sydney NSW.
Dexus’s high-quality portfolio continues
to benefit from flight to quality. Across
new leasing transactions, circa
50% of the space leased represented
customers upgrading the quality of
their office space.
Face rental growth remained positive
across Dexus’s core CBD markets.
Incentive levels have remained stable in
our Sydney leasing deals over the past
18 months and we expect incentives to
begin moderating over
the next six months.
Office portfolio like-for-like income
growth was +2.7% (FY21: +2.3%)
excluding the impact of rent relief
measures and provisions for expected
credit losses (including these impacts:
FY22 +4.4% and FY21 +0.9%).
Office portfolio key metrics
95.6%
Occupancy
FY21: 95.2%
4.7yrs
WALE
FY21: 4.6 years
152,877sqm
Space leased2
+2.7%
Effective LFL income3
FY21: +2.3%
29.4%
Average incentives2
FY21: 24.9%
1 FFO is calculated before finance costs, group
corporate costs and other (including tax).
2 Excluding development leasing of
96,749 square metres across 12 transactions.
3 Excluding rent relief measures and a provision
for expected credit losses. Including these
impacts: Effective +4.4% and Face +3.0%.
Dexus 2022 Annual Report Industrial portfolio performance
Dexus manages a growing, high-
quality $11.6 billion group industrial
portfolio, $4.3 billion of which sits in the
Dexus portfolio.
During the year, we leased an
exceptional 373,301 square metres
of industrial space across 75
transactions, as well as 330,097 square
metres of space across 21 industrial
developments.
Portfolio occupancy increased to 98.1%,
driven by successful leasing in the core
logistics portfolios. Weighted average
lease expiry by income and committed
space at key developments also
increased.
Industrial portfolio key metrics
98.1%
Occupancy
FY21: 97.7%
4.7yrs
WALE
FY21: 4.4 years
373,301sqm
Space leased1
+3.1%
Effective LFL income2
FY21: +3.7%
13.5%
Average incentives
FY21: 17.8%
1 Excluding development leasing of
330,097 square metres across 21 transactions.
2 Excludes business parks, rent relief and
provision for expected credit losses. Including
business parks, effective LFL was 2.1% and
face LFL was +4.0%. Including business parks,
rent relief and provision for expected credit
losses, effective LFL was +2.4% and face LFL
was +4.1%.
Industrial portfolio like-for-like income
growth2 was +3.1% (FY21: +3.7%)
excluding the impact of business parks,
rent relief measures and provisions
for expected credit losses (including
business parks and these impacts: FY22
+2.4% and FY21 +4.5%).
Property market outlook
Most office demand indicators are
positive, however the outlook may
be subject to economic uncertainty.
Business conditions surveys are positive,
the labour market is expanding and
job advertisements are at record highs.
While leasing inquiry levels improved in
the June 2022 quarter, easing business
confidence could become a factor for
leasing markets over the next 12 months.
Industrial leasing activity is expected to
be supported by a continued build-up
of inventories from below trend levels
and by retailers enacting long-term
plans to invest in multi-channel supply
chains. However, interest rate risks could
slow retail spending and impact
leasing activity.
Trading performance
Trading is a capability that involves
the identification of opportunities,
repositioning to enhance value, and
realising value through divestment.
Trading properties are either acquired
with the direct purpose of repositioning
or development, or they are identified
in Dexus’s existing portfolio as having
value-add potential and subsequently
transferred into the trading trust to be
repositioned, and then sold.
We realised $23.4 million of trading
profits (post tax) in FY22, in line with
expectations, through:
– Completing the sale of Laverton
assets, Truganina VIC and 11 Lord
Street (Botany Quarter), Botany
NSW to DALT
– Exercising the option to sell
436-484 Victoria Road, Gladesville,
NSW in August 2021
– Exercising the option to sell
22 Business Park Drive, Ravenhall
VIC in November 2021
Further, we have identified six
opportunities within the existing
portfolio to replenish the trading
pipeline, with the potential to
contribute to trading profits in
future years.
18 Momentum Way, Ravenhall VIC.
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39
Artist impression: Central Place
Sydney NSW.
30 Jun 2022
$m
30 Jun 2021
$m
13,295
3,956
137
874
1,816
20,078
(5,050)
(1,821)
13,207
13,895
2,904
67
396
836
18,098
(5,003)
(815)
12,280
Office investment properties
Industrial investment properties
Healthcare and other investment properties
Co-investment properties
Other1
Total tangible assets
Borrowings
Other liabilities
Net tangible assets
Total number of securities on issue
1,075,565,246
1,075,565,246
NTA2 ($)
12.28
11.42
1 Adjusted for cash and debt in equity accounted investments. Excludes the $117.4m (FY21: $76.6m)
deferred tax liability on management rights.
2 Post the completion of the AMP Capital’s platform acquisition, NTA is expected to reduce given the
consideration in connection with the acquisition of management rights which are classified as an
intangible asset.
Financial position
– Total look-through assets increased
by $1,980 million primarily due to
$1,500 million of acquisitions,
$874 million of co-investment
properties, $359 million of
development capital expenditures
and $926 million of property
valuation increases, partially offset
by $2,224 million of divestments
– Total look-through borrowings
increased by $47 million due to
funding required for acquisitions
and development capital
expenditure, partly offset by
divestments
– 65% of debt was hedged on
average across FY22, with a
weighted average hedge maturity
of 5.9 years
40
Dexus 2022 Annual Report $81.7m
$57.7m
Capital management
We continued to maintain a strong and conservative balance sheet with gearing
(look-through)1,2 of 26.9% below our target range of 30-40%, and $1.9 billion of cash
and undrawn debt facilities.
FY22
FY21
Dexus has manageable debt expiries over the next 12 months. We remain within all
of our debt covenant limits and continue to retain our strong credit rating of
A-/A3 from S&P and Moody’s respectively.
Our balance sheet strength combined with continued focus on strategic asset
recycling provides capacity to deliver on our strategic objectives and capitalise on
future opportunities.
30
25
20
15
10
5
0
339%
Key metrics
Gearing (look-through)1 (%)
$25.9bn
Cost of debt3 (%)
$1.1bn
$2.2bn
Average maturity of debt (years)
$6.6bn
Hedged debt4 (incl caps) (%)
Average maturity of hedged debt (years)
30 Jun 2022
30 Jun 2021
26.92
2.7
5.5
65
5.9
26.7
3.2
6.2
81
5.1
S&P/Moody’s credit rating
A-/A3
A-/A3
1 Adjusted for cash and debt in equity accounted investments.
$16.0bn
2 Excluding Dexus’s share of co-investments in pooled funds. Look-through gearing including Dexus’s
share of co-investments in pooled funds was 27.8% as at 30 June 2022.
3 Weighted average for the year, inclusive of fees and margins on a drawn basis.
4 Average for the year. Hedged debt (excluding caps) was 68% for the 12 months to 30 June 2021
and 58% for the 12 months to 30 June 2022.
$5.9bn
$2.0bn
$3.9bn
$3.8bn
FY12
FY22
Diversified sources
of debt
USPP
Exchangeable Notes
MTN
Commercial Paper
Bank Facilities
Bank Debt
Debt Capital Markets
23%
6%
15%
1%
55%
55%
45%
% p.a.
12%
10%
8%
6%
4%
2%
0%
% p.a.
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15
14
13
12
11
10
11.2% 11.2%
11.1%
9.1%
9.3%
9.6%
4.8%
3.3%
3.0%
1 year
3 years
5 years
14.7%
14.1%
12.9%
13.0%
13.1%
12.7%
13.5%
13.0%
11.8%
1 year
3 years
5 years
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Financial
41
How we are creating
Leading Cities
95.6%
Dexus office portfolio
occupancy
98.1%
Dexus industrial portfolio
occupancy
8,603
Construction jobs
supported
$44.3bn
Value of group property
portfolio
$1.34bn
Gross value added to the
Australian economy
$17.7bn
Group development
pipeline
Artist impression:
Atlassian Central, Sydney NSW.
42
Dexus 2022 Annual Report
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Properties
Dexus is one of Australia’s largest owners and
managers of real estate, making a significant
contribution to the creation of leading cities.
BOARD FOCUS
From a property perspective,
the Board approves
acquisitions, divestments, and
developments. In FY22, the
Board was involved in:
Monitoring the performance
of underlying portfolio
Approving the acquisition
of a 100% interest of the
McPhee Portfolio comprising
2 Maker Place, Truganina
VIC, 116-130 Gilmore Road,
Berrinba QLD and 1-21
McPhee Drive, Berrinba QLD
Approving the acquisition
of 884 Mamre Road, Kemps
Creek NSW; the acquisition
of Jandakot Airport; the
nomination of Dexus
Industria REIT (DXI) as the
purchaser of 2 Marker Place,
Truganina VIC and to offer
DXI to participate in Mamre
Road and Jandakot
Approving the sell down
of an interest in Jandakot
Airport to Cbus Super
Approving the divestments
of Dexus’s interests in
383 Kent Street, Sydney NSW
(DXS 100%), 309-321 Kent
Street, Sydney NSW (DXS
50%), and 12 Creek Street,
Brisbane QLD (50% DWPF,
50% DXS)
Approving the execution
of Subscription Close
documentation to secure
a circa 65% interest in
Atlassian’s new Australian
headquarters
Approving delivery of the
proposed redevelopment
of 123 Albert Street and
execution of leasing strategy
Contributing to
leading cities
Our investments and value creation
potential are closely linked to the
success of Australia’s major cities which
are recognised for their amenity, ease
of access and place to do business.
Our office portfolio comprises prime
CBD offices in Australia’s gateway cities
and includes some of the country’s
most iconic buildings. Our industrial
portfolio is strategically located in
highly accessible markets, servicing
the growing demand of e-commerce
customers. As we expand our footprint
in healthcare real estate, we are
meeting the demand of a growing
population for quality healthcare
infrastructure.
With our $17.7 billion group development
pipeline, we have a strong platform for
organic growth and value-creating
opportunities for Dexus and our third
party capital partners. Our scale and
strategic focus on Australian cities
means we can play a leading role in
delivering world-class urban precincts,
helping shape our cities for the future as
desirable places to live, work and play,
while contributing to job creation and
economic growth.
As a real estate
company, our
properties are central
to how we create value.
LEARN MORE
To learn more about our progress against our
FY22 Leading Cities commitments, refer to
the 2022 Sustainability Report available at
www.dexus.com
Properties
43
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CASE STUDY
25 Martin Place – transformation of a city icon
Underpinned by our
customer-centric
approach, we utilise
our diversified platform
experience and
expertise to deliver
city-shaping projects
in gateway Australian
CBDs and generate
social and economic
value.
Working together
to create value
Together with our capital partner
DWPF, we are making a significant
investment in a great city asset to
ensure 25 Martin Place continues to
contribute to the CBD for years
to come.
Working with our investors, government,
retailers and theatre operator, the
transformation of 25 Martin Place into a
vibrant CBD destination is generating
new jobs, supporting the culture of
the city and helping to drive economic
growth into the future.
On completion, it is estimated 25 Martin
Place will generate over 300 new
retail, hospitality, and theatre jobs and
attract tens of thousands of locals and
tourists to the centre of Sydney daily.
At 25 Martin Place, we are reimagining
a key Sydney CBD precinct through the
creation of a vibrant retail and dining
precinct that supports the success of
the re-opened Theatre Royal and the
many workers and visitors to the area
every day.
In March 2019, Dexus and Dexus
Wholesale Property Fund (DWPF)
announced they had jointly acquired
the remaining 50% interest in the
MLC Centre – now 25 Martin Place
– in Sydney, providing Dexus with full
management and operational control
of one of the largest freehold sites in
the Sydney CBD and paving the way
for a transformational development of
the dining, retail and cultural precinct.
The Harry Seidler designed MLC Centre
has been a Sydney landmark since
the 1970s and now, after an extensive
development, is making its mark as a
symbol of the city’s renewal. Over
40 years on, 25 Martin Place celebrates
its new identity for a new generation of
customers, while still in keeping with the
building’s integrity and legacy.
FY20
Development commenced
11,000sqm
of retail, dining and cultural spaces
offering new retailer experiences and
a refurbished Theatre Royal.
FY23
Expected completion
$211million
Project cost
Strong leasing
Dining: 6 new restaurants
and bars now open
Luxury retail: 3 new premium
international luxury retail spaces
leased
Theatre Royal Sydney: re-opened,
supported by a 55-year lease with
the NSW Government
44
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25 Martin Place, Sydney NSW.
25 Martin Place will
deliver a retail, dining
and cultural precinct
to create a thriving
community.
Creating spaces
where people thrive
An exciting dining experience
A highlight of the 25 Martin Place is
the new restaurant and bar al fresco
precinct that overlooks Martin Place,
where people can come together to
socialise and connect as part of the
CBD’s day and night time economy. The
first of the new restaurants and bars
opened in late 2021, coinciding with the
re-opening of Theatre Royal Sydney,
with the completed dining precinct
launching in July 2022.
A contemporary runway
of luxury retail
World renowned Italian luxury fashion
houses, Missoni and Brunello Cucinelli,
will unveil their flagship Australian stores
at 25 Martin Place, joining a line up of
premium brands including international
luxury fashion house Valentino. These
premium and contemporary boutiques
will reinforce Castlereagh Street as
Sydney’s premier luxury retail precinct.
Re-opening the
Theatre Royal Sydney
A 55-year lease to the NSW
Government has paved the way for
a private theatre operator to run the
theatre and bring Australia’s oldest
theatre institution back to life. Reviving
the Theatre Royal has helped NSW
attract headline shows to Sydney,
supporting the night-time economy,
the arts community and bringing the
world’s best blockbuster musicals to
the theatre-going public.
Partnering to build a
future generation of
female property leaders
The Girls in Property program is a
property industry initiative which
raises awareness amongst high
school students about the raft of
career paths the property industry
offers, encouraging greater female
participation.
Dexus partnered with the Property
Council of Australia on this initiative,
providing female high school students
the opportunity to attend a behind the
scenes tour of 25 Martin Place. Here
they heard from our all-female project
leadership team about the challenges
and opportunities that a career in the
industry might present.
By supporting talented young women
to consider building their career in
property, we are helping to create a
sustainable pipeline of talent for the
growing industry.
Properties
45
OUR APPROACH TO
LEADING CITIES
Our Leading Cities approach
involves:
Developing world-class
office properties that
deliver customer focused,
sustainable workspaces,
which enhance the amenity
and vibrancy of CBDs
Developing high-quality
industrial facilities to meet
the growing demands of
ecommerce business and
other growth industries
Contributing to the long-
term viability of cities by
integrating sustainable
outcomes into developments
Building mutual city
partnerships through
collaboration with industry
associations
Central Place Sydney NSW.
Urbanisation is a key
megatrend influencing
our business model.
Urbanisation
Our investment and value creation
potential is closely linked to the success
of Australia’s major cities.
The top city centres across the world
are recognised for their amenity, ease
of access, and place to do business
that draw individuals to work and
connect. They are diversified locations
that attract and maintain talent while
also providing tourists and residents
with distinct experiences.
They are also the drivers of economic
growth and opportunity. In Australia,
our major cities contribute around 80%
to national GDP. CBDs are the engine
room for most of this economic activity,
supporting businesses
and jobs.
Urbanisation is supported by the
growth drivers of strong long-term
population growth and record levels
of infrastructure investment which
enhance our cities’ accessibility,
liveability and sustainability.
The pandemic induced lockdowns had
a significant impact on our CBDs, but
once lockdowns were lifted, workers
and visitors began to transition back
to CBDs. According to a Productivity
Commission report released in
September 2021, while most businesses
are moving towards a more flexible
hybrid working model, CBDs will remain
attractive hubs of economic activity
and the central workplace will be the
dominant model for the foreseeable
future.
Delivering city-shaping
projects
Our group $17.7 billion development
pipeline includes iconic next generation
office buildings in prime locations in the
east coast of Australia’s CBDs.
Many of our projects are being
undertaken in partnership with funds
management capital partners, who
along with our customers, have an
increasing focus on sustainability
credentials and ensuring the built form
and location supports new ways of
working in the post pandemic world.
There is significant activity and growth
in our development business beyond
the major CBD projects. Our industrial
development business delivered
322,100sqm of gross lettable area in
FY22 in partnership with our funds. We
are also making good progress on
healthcare projects, securing a number
of exclusive positions on key parcels of
land in current and emerging health
precincts.
46
Dexus 2022 Annual Report COMMITMENTS
CASE STUDY
Maintain office portfolio
occupancy above the
Property Council of Australia
market average
Grow industrial precincts by
more than 200,000 square
metres in FY23 to meet the
demand for high-quality,
highly accessible logistics
facilities across Australia
Progress city-shaping precinct
projects in FY23 across
Sydney, Brisbane, Melbourne,
Adelaide and Perth to improve
the amenity and vibrancy
of Australia’s CBDs
Focus areas
Contribute to economic
growth through the
generation of employment
and contribution to
gross value added from
development projects
Our development
pipeline provides
value-creating
opportunities for Dexus
and our third party
capital partners.
Horizon 3023 - a new era in
industrial development
Our active industrial development
pipeline supports the growth in
e-commerce business is driving
significant growth in demand for
industrial property.
Horizon 3023 in Ravenhall, Victoria is
strategically located to service the
growing demands of e-commerce
businesses.
Positioned in Melbourne’s Western
Growth Corridor, Horizon 3023
boasts strong connectivity for both
commuters and freight services,
located in proximity to Melbourne’s
CBD, the airport, Port of Melbourne
and the proposed Western Interstate
Freight Terminal.
The 134-hectare master planned
estate has attracted innovation driven
customers such as Amazon, Hello
Fresh, eStore Logistics, Scalzo Foods,
Myer and Electrolux. The estate will be
operational 24 hours per day,
7 days per week, with access to high-
capacity telecommunications to cater
for increasing ecommerce demands.
The Horizon 3023 development is
expected to complete in 2025.
Dexus’s first 6 Star Green
Star certified industrial
property
Horizon 3023 is home to Dexus’s first
6 Star Green Star industrial property.
The Electrolux facility, which reached
practical completion in February
2022, includes more than 20,000
square metres of warehouse, office
and showroom space. The customised
warehouse was built utilising
sustainable materials including
engineered timber products, low or no
VOC paints, adhesives and sealants,
with best practice applied to avoid air
leakage in the office and showroom
space.
The facility features a 200kW solar
array, electric vehicle charging
bays, and water reuse and recycling
infrastructure to supply irrigation
and bathroom amenities. Acoustic
noise and glare reduction to enhance
worker comfort was also achieved
through strong collaboration between
our customer Electrolux and delivery
partners.
Horizon 3023, 64 Momentum Way, Ravenhall VIC.
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2
2
0
2
3
2
0
2
Australian Bragg
Centre, Adelaide
4
2
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2
Development pipeline
Under construction
Australian Bragg Centre,
Adelaide
A landmark, large-scale, state-of-
the-art clinical and research facility
within Adelaide’s BioMed City precinct,
incorporating research facilities and
lab and office space. The building will
house Australia’s first proton therapy
unit specialising in next generation
cancer treatment.
Expected project cost
Circa $460 million
Ownership
50% Dexus, 50% DHPF
Expected completion
Late 2023
Horizon 3023, Ravenhall
Located in Melbourne’s Western
Growth Corridor, Horizon 3023 is a
134-hectare master planned estate in
close proximity to key transport links,
offering custom built, high-quality
warehouses for industrial lots ranging
5,000-100,000sqm.
Expected project cost
Circa $510 million
Ownership
25.5% Dexus, 24.5% Dexus Australian
Logistics Partner, 50% DWPF
Expected completion
Mid 2025
48
Dexus 2022 Annual Report 5
2
0
2
Horizon 3023,
Ravenhall
6
2
0
2
Atlassian
Central, Sydney
Committed developments
Jandakot Airport, Perth
Jandakot Airport includes a portfolio of
53 modern prime industrial properties,
circa 80 hectares of developable land
and an operating airport.
Expected project cost
Circa $780 million
Ownership
33.4% Dexus, 33.3% Dexus Industria REIT,
33.3% Cbus Super
Expected completion
Late 2027
Atlassian Central, Sydney
Dexus has an agreement with Atlassian
which provides a framework to fund,
develop and invest in their new
headquarters, located adjacent to the
Central Place Sydney development
and within the State Government-
led Tech Central precinct. The
development incorporates a market
leading, sustainable office tower
representing the future of workplace,
with retail amenities and new YHA
accommodation space at its base,
as well as a new public realm around
Central Station.
Expected project cost
Circa $1.4 billion
Ownership
60-65% Dexus, 35-40% Atlassian
Expected completion
2026
Properties
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7
2
0
2
Waterfront Brisbane
(first tower)
Jandakot Airport,
Perth
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2
0
2
Future developments
60 Collins Street,
Melbourne
A shovel-ready development
incorporating the consolidation of two
adjacent sites, 60 and 52 Collins Street,
to create Premium grade office space
over 37 levels. Located at the ‘Paris
end’ of Collins Street, the site benefits
from two prime street frontages with
a quintessential Melbourne laneway
to the north, and close proximity to
restaurant, shopping and entertainment
precincts.
Expected project cost:
Circa $1.0 billion
Ownership
100% Dexus
Expected completion
2026
Waterfront Brisbane
A major project that will transform
the Eagle Street Pier and Waterfront
Place precinct sites, making way for
two office towers and unlocking the
considerable potential of this Brisbane
CBD gateway site. Waterfront Brisbane
will be a great outcome for Brisbane
with the renewal of the city’s premium
business district, a vibrant retail and
public space, activation of the river and
improvements to the Riverwalk.
Expected project cost
Circa $2.5 billion
Ownership
50% Dexus, 50% DWPF
Expected completion of
the first office tower
2027
50
Dexus 2022 Annual Report 9
2
0
2
Pitt and Bridge Precinct,
Sydney
0
3
0
2
Central Place Sydney,
Sydney
Central Place Sydney,
Sydney
Dexus is progressing its exclusive position
to integrate the NSW Government’s
plans to revitalise Sydney’s Central
Station through the redevelopment of
our Lee Street properties and Henry
Deane Plaza in partnership with Frasers
Property Australia. The project will be
the largest integrated workplace in the
NSW Government’s Tech Central global
innovation precinct, creating circa
130,000 square metres of world-leading
sustainable designed workspace across
two premium office towers. The project
will also feature a new public realm,
integrating retail, dining, entertainment,
community and public spaces.
Expected project cost
Circa $3.0 billion
Ownership
25% Dexus, 25% Dexus Office Partner
Expected completion
2030
Pitt and Bridge Precinct,
Sydney
A potential office development for
Dexus and the Dexus Office Partner on
a large 3,300 square metre site located
in the financial core of the Sydney CBD.
Expected project cost
Circa $3.1 billion
Ownership
50% Dexus, 50% Dexus Office Partner
Expected completion
2029
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51
How we are creating
Thriving People
People and capabilities
Thriving people
70%
99.7%
Employee engagement
score
Safety audit score across
Dexus workspaces
36%
Female representation
in senior and executive
management roles
647
Dexus employees
1 Bligh Street, Sydney NSW.
52
Dexus 2022 Annual Report
People and capabilities
People and
capabilities
Our strength as an organisation is intrinsically
linked to our ability to leverage the diverse
thinking, skills, backgrounds, experience and
leadership styles of our people.
Championing an inclusive
and high-performing
culture
Building strength and resilience
through diverse thinking
Our approach to inclusion and diversity
allows us to actively encourage
different perspectives for better
decision-making, as well as build a
diverse workforce that reflects our
customers and communities.
This year, we retained our Employer of
Choice for Gender Equality citation,
reflecting our continued commitment to
gender equity.
In 2021, we committed to achieving
40% female, 40% male, and 20% either/
other representation (the 40:40:20
target) across senior and executive
management roles by FY23.
At 30 June 2022, female representation
in the combined cohort of senior and
executive management roles was
36%. We are mindful that we have
not met our target, and we continue
to put in place strategies to increase
female representation both within our
organisation and across industry.
BOARD FOCUS
The Board People &
Remuneration Committee
oversees all aspects of human
resource management as
well as Director and Executive
remuneration. For further details
on the key focus areas during
FY22, refer to the Remuneration
Report starting on page 78 or
the 2022 Corporate Governance
Statement available at
www.dexus.com
Our people are central to how we
deliver on our strategy and their
knowledge and expertise are key inputs
to how we create value.
By understanding the diverse
demographic profile of the communities
we serve, we can better meet the needs
and preferences of our customers and
their stakeholders to create spaces
where people thrive.
Our people are also central to
implementing our approach to ESG in
our operations and across our projects.
Our goal is to provide an inclusive and
meaningful employee experience, with
our people contributing to impactful
environmental and social outcomes in
their daily work.
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People and capabilities
53
Our Safe & Well employee health and wellness
framework focuses on the pillars of mental,
physical, financial, and work wellbeing as the
key to a thriving workforce.
Investing in our people to foster
a high-performance culture
An engaged workforce is critical to
delivering on our strategy. Through
listening to our people and curating
inspiring workspaces and experiences,
we motivate our people to deliver on
our purpose to create spaces where
people thrive.
This year, we implemented a new
survey platform with updated employee
engagement measures, moving away
from our previously reported employee
net promoter score metric. By making
this change to the way we measure
engagement, we can compare
our internal results with external
benchmarking, deliver real-time
reporting for our team leaders, allowing
them to respond in a timely manner.
The average overall engagement
score in FY22 was 70%. This is a
positive result for our business as we
acclimatise to new ways of working
after the pandemic. The new real-
time reporting platform allows us to
monitor engagement and address
issues promptly so we can continuously
improve this result.
We actively support internal career
planning, development and learning
opportunities for our people.
During the year we placed internal
candidates in 25% of available roles.
We also support professional
development opportunities, ensuring
our people are equipped with the
skills necessary to further develop
their talents.
In December 2019, we launched Lead
@ Dexus, a program designed to
instil self-awareness, motivation and
strategies required for our people
to improve their leadership skills. In
FY22, we progressed our commitment
to roll out the program to all people
managers.
At 30 June 2022, 92% of people
managers had participated in the
program. Looking ahead to FY23, we
will continue to run Lead @ Dexus so
that all new and emerging leaders have
a clear understanding of the leadership
behaviours and actions expected of
them. A range of activities designed
to continually reinforce these skills and
behaviours in daily operations will also
be implemented in FY23.
Prioritising safety and
wellbeing in our workplace
and at our assets
Employees increasingly demand
workspaces that support mental health,
psychological wellbeing and physical
wellness that is built on a foundation
of sound work health and safety
management. The safety and wellness
of our people is essential to our ability
to create value for our stakeholders.
Government restrictions continued to
vary across locations into early 2022.
In response, we continued to have
protocols in place in our workplaces in
line with government guidelines and
advice from our independent safety
consultant to maintain safe business
operations for our people and
our customers.
To support our people during the
lockdowns, we provided a range of
wellbeing benefits and support tools.
As the restrictions eased, we turned
our focus to our future way of
working, adopting an autonomous
hybrid working model following a
comprehensive pilot program across
the organisation (refer to the ‘Adopting
a hybrid working model’ case study on
this page).
We continue to support our employees
with young families and other caring
responsibilities. More than half of our
people are parents or guardians of
a child aged between 0-17, or act
as a carer for someone. This year we
updated our parental leave policy
entitlements to better support families
by providing inclusive parental leave
assistance for employees. The updated
policy increases leave entitlements
for primary and secondary carers,
establishes no tenure requirement to
access benefits, and allows leave to
be taken in any continuous or non-
continuous format.
Our LGBTI+ employee network
TRIBE remained a force for inclusion,
implementing initiatives, and
celebrating and acknowledging dates
of significance throughout the year. In
May 2022, Dexus was recognised as a
Bronze Employer by Pride in Diversity’s
Australian Workplace Equality Index for
the second consecutive year.
In FY22, Dexus’s Reflect Reconciliation
Action Plan (RAP) was endorsed
by Reconciliation Australia. This
is an important early step on our
reconciliation journey with Australia’s
First Nations peoples. During National
Reconciliation Week, we launched
a compulsory cultural awareness
online training module, designed in
partnership with PwC Indigenous
Consulting. The training provides our
people with an understanding of the
diversity of Aboriginal and Torres Strait
Islander peoples across Australia
and what they can do to support our
commitment to reconciliation within
their role.
LEARN MORE
More information on our Reflect
Reconciliation Action Plan is publicly
available at www.dexus.com.
54
Dexus 2022 Annual Report National Safe Work Month
Dexus hosted its annual Risk roadshow
during National Safe Work Month in
October 2021. The theme ‘Think safe.
Work safe. Be safe’ created awareness of
the priority we place on safety across our
operations and workplaces, and how the
business continues to adapt and respond
to the external environment.
The Risk roadshow hosted webinars
covering Work, Health, Safety &
Environment risk topics, including
mental health in the workplace
covering stress and anxiety
management, providing practical
steps to implement core concepts of
wellbeing into daily life.
The webinars, which were attended by
a total of 1,049 participants, provided
information sessions on vaccinations,
our COVID-19 risk management
plan, effective communication, our
FY25 sustainability targets and what
they mean, and delivered emergency
and crisis management training.
Addressing mental health
Addressing mental health is part of
our broader commitment to supporting
a safety culture across our business,
demonstrated through the inclusion
of health and safety in our group
Scorecard.
Across our business, our people face
different challenges and environments.
Our mental health training is tailored to
these different needs.
During the year we rolled out mental
health training across the business, with
78% of People Managers completing the
training. The take up by non-people
managers was lower at 25%. To ensure
completion by the end of the 2022
calendar year, online mental health
training will be offered by our community
partner, The Black Dog Institute.
COMMITMENTS
CASE STUDY
Target an employee
engagement score at or
above 70% at the end of FY23
Achieve 40:40:20 gender
representation in senior and
executive management roles
by FY25
Focus areas
Enhancing our approach to
employee wellbeing, including
education and benefits
Increasing workforce diversity
and a culture of inclusion,
including setting targets
beyond gender
Adopting a hybrid working model
Flexible working has been a part of
how we work for a number of years.
The pandemic provided us with
the opportunity to test our culture
through many workplace models
drawing on the experiences
of working from home and the
technology available to a modern
workplace. While the situations we
have worked through had been
thrust upon us, this year we had
the opportunity to partner with our
workplace change consultancy, Six
Ideas by Dexus, to better understand
what the Dexus workplace should
look like – when we have choice.
Following a pilot study which included
various teams across the business,
we were able to understand the
experience, preferences and ideas
of our people to inform our future
way of working. Over 90% of the
pilot group were in favour of an
autonomous hybrid working model
which has since been adopted as
the best fit for Dexus.
The model is driven by work
requirements and empowers our
people to make decisions about work
time and location. Implementing
the model in practice is an evolving
process and finding the right balance
will ensure it is comprehensively
adopted and that we work effectively
as distributed teams.
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To learn more about our progress against our
FY22 People and Capabilities commitments,
refer to the 2022 Sustainability Report available
at www.dexus.com
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People and capabilities
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How we are creating
Future Enabled Customers
and Strong Communities
Customers and communities
Customers and communities
Future Enabled Customers
and Strong Communities
+43
Customer Net Promoter
Score
4,466
Customers
>$0.8m
Value of community
contribution
1,576
Supplier partnerships
25 Martin Place, Sydney NSW.
56
Dexus 2022 Annual Report
Customers and communities
Customers and
communities
Our ability to create value relies on enabling
leading customer and community experiences
and influencing sustainability practices
through our supply chain.
Our initiatives relating to customers
and communities recognise the
many different ways our spaces
shape and impact peoples’ lives.
Listening to our customers’ needs and
leveraging our projects to support
local communities is fundamental
to our long-term success. We also
recognise the benefits of empowering
our supply chain to demonstrate
clear sustainability performance to
our investors and extend our positive
impact.
BOARD FOCUS
Our customers and communities
are a focus area for the Board.
In FY22 the Board were involved
in:
Reviewing and discussing
the annual customer survey
results and associated
actions
Reviewing customer
complaints (including those
received during COVID-19
and rent relief requests)
Overseeing healthy
buildings’ initiatives,
including system upgrades
and technology pilots
Discussing actions to
prevent modern slavery
and overseeing supplier
engagement on modern
slavery risk
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480 Queen Street, Brisbane QLD.
Customers
We create workplaces with customer
productivity in mind and offer a range
of supporting products and services
that are aimed at enhancing the
performance and wellbeing of our
diverse customer base.
Supporting customer wellbeing
with healthy buildings
There is a growing emphasis
on wellbeing and how the built
environment plays a pivotal role in
people’s health and safety. This is driven
by a transition to more flexible working
arrangements and the responsibility
for property managers to play a part in
public health. Investing, and adopting
technology solutions is one element of
our focus on creating healthy buildings
to enhance the customer experience
and promote productive working
environments.
To support Dexus’s healthy buildings
initiative we have committed to
delivering an average 5 Star NABERS
Indoor Environment rating across the
group office portfolio by FY25.
This year, Dexus nominated 45 office
assets that are Dexus owned and
managed to undertake the WELL
Health and Safety rating. The rating is
under review by the certification body,
International WELL Building Institute.
Our Health-Safety rating of 45 Dexus
properties is now subject to the second,
final round of review.
As well as pursuing the highest
standards in our existing assets, we
are integrating WELL ratings into the
design of the Waterfront Brisbane,
Central Place Sydney and Atlassian
Central, Sydney developments. These
leading developments are committed
to delivering WELL certifications.
Smart building technology
The adoption of smart building
technology along with mobile and
virtual technology to enhance the
customer experience remains a priority
for our business.
Deploying these technologies to benefit
our customers is critical to meeting
our purpose of creating spaces where
people thrive.
Our focus is on delivering ‘simple and
easy’ experiences and developing new
services that reduce pain points for
customers and promote the health and
wellbeing of people and communities.
Focusing on health and
customer experience
As COVID-19 continues to impact
working environments, we know we can
further demonstrate our focus on the
health and safety of our customers in
our buildings. Dexus buildings already
deploy above industry standard air
filters. We have developed a scalable
End-of-Trip Occupancy Management
System to optimise social distancing
and cleaning at One Margaret Street,
Sydney. The system displays how many
people are in the end-of-trip facility
and provides messaging to prevent
over-occupancy. The system also has
the ability for users to scan a QR code,
provide feedback and report if cleaning
is required outside of schedule.
58
Dexus 2022 Annual Report CASE STUDY
Trialling bipolar ionisation technology
We have been working in the background
since then to assess numerous global air
filtration technologies, with a clear focus
on a technology that can work in the
occupied space and is safe for
our customers.
Over 11 months, we worked alongside
Sydney University’s Indoor Air Quality
Lab, CETEC (our independent air quality
consultant) and Clean Air Technology
Australia to scope, test and verify
the results.
The results showed that the technology
could achieve a reasonable level
efficacy in a commercial office
application with improvements in air
quality measured.
In FY23, we will offer our customers the
option to include bipolarisation as a
paid service within their tenancy.
Following extensive research, we
identified bipolar ionisation as a
technology that has the potential to
enhance the air quality in our buildings
even further above their current
high standards.
This emerging technology is relatively
new to office space in Australia with
limited real world information available.
With the pandemic lockdowns offering
us the opportunity to test in relatively
empty buildings, we set up testing in
our Sydney building, One Margaret
Street.
Following a successful trial of bipolar
ionisation, we will be offering this clean air
technology as a customer offering.
Our focus on health and customer
experience was also demonstrated
by trialling air quality sensors and
purification technologies. At One
Margaret Street, Sydney we completed
Australia’s first successful trial of Bipolar
ionisation technology in a real-world live
commercial building environment.
Even before COVID-19, we were looking at
air quality in our buildings. The air quality
within our buildings is above industry
standard, but during the 2020 bushfire
season air quality was compromised.
We determined that strong odour and
fine sub-micron particles were largely
unable to be filtered efficiently, resulting
in an appetite to explore options for more
intensive indoor air purification.
One Margaret Street, Sydney NSW.
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Our 2022 Sustainability Report goes
into more detail about our customer
initiatives – including our customer and
retailer engagement and how we support
customers’ future workspace needs.
Available at www.dexus.com
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Customers and communities
59
Supply chain
Our approach to collaborating with our
suppliers recognises that our supply
chain is an extension of our business
and forms part of our social licence
to operate.
Our capacity to create value depends
on understanding and influencing our
suppliers of products and services.
Dexus’s Board ESG Committee, investors
and customers also increasingly expect
us to monitor, measure, and manage
ESG factors in our supply chain.
Collaborating with our suppliers
How we manage modern slavery risks in
our supply chain has been a particular
focus for the Board and management
this year.
We made significant progress in FY22,
increasing the visibility of modern slavery
risks in our supply chain by implementing
an annual Supplier Code of Conduct
attestation process through our
contractor management system.
This process requires suppliers to
formally identify their subcontractors,
allowing us to go beyond Tier 1 suppliers
and identify key Tier 2 suppliers. Where
a subcontractor is a direct contractor
of Dexus or in a high-risk category,
the supplier is invited to complete the
Property Council of Australia’s modern
slavery due diligence questionnaire,
with the results used to inform Dexus’s
supply chain risk mapping.
The independent review of our supply
chain conducted by KPMG was also
completed. While no modern slavery
was identified, the audit highlighted
that the internal processes and policies
of the suppliers reviewed could be
enhanced. In FY23, we will continue to
collaborate and support these suppliers
in enhancing their practices. This is an
annual program with results reported to
the Board ESG Committee.
To go beyond legal requirements and
align with best practice, we engaged
EcoVadis to help us implement a
proactive approach to managing our
supply chain both in Australia and in
other geographies. In future, we will
initially require preferred suppliers to
be audited on an annual basis until
they achieve an acceptable EcoVadis
benchmark score. Once this benchmark
score has been attained, we will extend
the audit frequency to once every
three years.
Where opportunities to enhance
supplier policies, procedures and
practices are identified, the Technical
Services and Supply Chain Team will
lead the supplier engagement process
in collaboration with members of the
Anti-Modern Slavery Working Group
and other business stakeholders. The
team will use tools and action plans
provided by EcoVadis to engage with
suppliers to address underperforming
areas identified in the audit.
LEARN MORE
Our 2022 Sustainability Report goes into
more detail about our supplier initiatives
including how we require our design
consultants to consider modern slavery
in the supply chain of the materials
and products and influencing other
sustainability outcomes. Available at
www.dexus.com
More information on our Modern Slavery
Management Framework is available
in our 2021 Modern Slavery Statement
available at www.dexus.com. Our 2022
Modern Slavery Statement will be
available in December 2022.
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Dexus 2022 Annual Report i
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>$0.8m
contributed to communities
across Australia
621 hours
of employee volunteering
$2.0m
spent with Supply Nation Certified
or Registered Companies
Communities
Our ability to create value and
uphold a social license to operate
hinges on successfully engaging local
communities in and around
our properties.
Leveraging development projects
to support our communities
Dexus’s capacity to create value
is influenced by the strength of its
relationships with the communities
in which it operates. With 4,466
customers across our platform, and a
transformative development pipeline,
we have an important platform to drive
positive social change.
In June 2022, we hosted a Planet Ark
Circular Economy education session in
Brisbane, the content of which was then
shared nationally. The session educated
our customers on how their companies
can reduce waste, re-use materials and
leverage renewable energy.
Amplifying our social impact
through community partnerships
Over the year we contributed over
$0.8 million financially and in-kind to
communities across Australia through
initiatives such as:
– Black Dog Institute: Dexus
employees raised $9,600 in our
annual Christmas auction with
Dexus matching this amount. This
resulted in a total of $20,000 being
donated to the Black Dog Institute
– Planet Ark: Each week properties
across our portfolio auction the
decorative flowers in our lobbies,
rather than sending them to landfill,
to raise money for our charity
partners
We dedicated 145 weekly flower
auctions across 24 properties to
Planet Ark during FY22, raising over
$7,500.
– Food Bank: Dexus customers and
staff donated over a tonne of
non-perishable items and raised
$6,600 in monetary donations. This
equates to over 15,000 meals for
people in need
– STEPtember: Over 570 Dexus
customers and employees
participated in the challenge,
raising nearly $120,000 for our
charity partner – the Cerebral Palsy
Alliance
COMMITMENTS
Maintain a Customer Net
Promoter Score for the portfolio
at or above +40
Harness technology and
innovation to improve
customer experience in
FY23 by progressing advanced
indoor air quality filtration
and mobile access control
customer offerings
Advise customers on nature
and effective implementation
of hybrid work practices by
completing a workplace
research project in FY23
and developing five tailored
workplace strategies
Continue to support customer
wellbeing by delivering
initiatives such as a WELL health
and safety portfolio certification
Implement EcoVadis supplier
verification across preferred
suppliers, targeting coverage of
80% of preferred supplier spend
engaged on the platform
by FY24
Focus areas
Progressing the implementation
of our Reflect RAP
Delivering supply chain
engagement and risk
assessment activities across
Tier 1 suppliers and beyond
Delivering anti-modern slavery
initiatives including a pilot
audit against the Cleaning
Accountability Framework
Supporting the communities
in which we operate through
charitable contributions
LEARN MORE
Our 2022 Sustainability Report goes
into more detail about our community
activities including our Reconciliation
Action Plan, our community partnerships,
and the Future Leaders in Property
program. Available at www.dexus.com
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Customers and communities
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Customers and communities
Customers and communities
Future Enabled Customers
and Strong Communities
How we are creating an
Enriched Environment
Net zero
Achieved net zero emissions for
building operations across the
group managed portfolio
100%
of electricity sourced from
renewable sources in FY22 across
our group managed portfolio
5.0NABERS
Energy average rating across our
group office portfolio
4.7NABERS
Water average rating across our
group office portfolio
4.9NABERS
Indoor Environment average
rating across our group office
portfolio
62
Dexus 2022 Annual Report
Customers and communities
Environment
Our capacity to create value depends on our
ability to develop and manage assets which have
a positive impact on the health of both people
and the natural environment.
BOARD FOCUS
Environmental sustainability
is a focus area for the Board
and Board ESG Committee. In
FY22, the Board and Board ESG
Committee were involved in:
Endorsing the advancement
of Dexus’s net zero
commitment and transition
to net zero emissions in FY22
Endorsing Dexus to set a
waste target to deliver a
NABERS Waste 4 star office
portfolio average by FY25
Endorsing Dexus to target
a 10% reduction in energy
and water intensity across its
group office portfolio by
FY25 against a 2019 baseline
Overseeing progress on
Dexus’s approach to climate
resilience
Our Environment objective recognises
the central role the built environment
must play in responding to climate
change. In a rapidly changing physical
environment, the efficient use of natural
resources is a crucial element in building
resilience to environmental risks in the
locations where we operate.
We also aim to demonstrate leadership
in the transition to a low carbon
economy, with our managed assets
operating on a net zero basis.
Decarbonising our portfolio
Dexus has achieved net zero emissions
for its building operations across the
group managed portfolio. This meets the
30 June 2022 target which was brought
forward in FY21 from the original
2030 target.
Transitioning the Dexus portfolio to
achieve operational net zero ensures
reinforces our commitment to act to
limit global warming to 1.5°C, which is
aligned with the Science-Based Targets
initiative. In doing so, we are delivering
on our customers’ and investors’ desire
for strong climate action and low-
carbon investments. Our focus on
emissions reductions helps futureproof
our operations from the transitional risks
associated with climate change and
demonstrates that emissions reductions
need not come at the expense of
business success.
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To learn more about our progress against
our FY22 Environment commitments, refer
to the 2022 Sustainability Report available
at www.dexus.com
Environment
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Transitioning to renewable
electricity
Our use of renewable energy through
a combination of on-site renewable
energy installations and purchasing
off-site renewable energy sources, was
a key component in achieving our net
zero target.
In FY22, we reached our renewable
energy target of sourcing at least
70% of electricity from on-site and
off-site renewable sources across
the group’s managed portfolio, three
years ahead of schedule. This result
has been achieved through increasing
electricity self-generation, progressively
integrating renewable electricity
purchasing into supply agreements and
sourcing accredited GreenPower to
complement these agreements.
In January 2022, we extended our
renewable electricity supply agreement
with Iberdrola Australia to provide
early access to renewable electricity
via Iberdrola Australia’s Cherry Tree
Wind Farm in Victoria, with Dexus
now receiving large-scale generation
certificates from July 2021 until 2030.
We also re-tendered electricity for our
Western Australian portfolio, renewing
our partnership with Synergy via a
renewable energy supply agreement
with generation being sourced from
the Warradarge Wind Farm – a local
WA GreenPower accredited generator.
This exciting partnership complements
similar generation-sourced linked
agreements across key CBD markets,
while providing an effective price hedge
in times of high energy price volatility.
In FY22, we continued to add solar
photovoltaic (PV) systems as a standard
amenity for incoming industrial
customers across new development
precincts such as Horizon 3023 and
Freeman Road, Richlands. In FY23, we
will look to expand the rollout of rooftop
solar to existing industrial customers
seeking cost-effective, renewable
power for their premises, through the
Dexus - Shell Energy solar partnership.
The collective efforts of procuring
renewable electricity and the
deployment of onsite solar PV
systems in new and existing assets
contributed to the achievement of our
RE100 commitment of sourcing 100%
renewable energy by 2030.
Our pathway to net zero
To deliver on our commitment to
achieve net zero emissions for
building operations across our
group managed portfolio, we have:
– Reduced our footprint by
reducing emissions through
continued investment in
optimising building performance
and resource efficiency
– Transitioned to 100% renewable
electricity by establishing
long-term renewable electricity
supply agreements for base
building operations that provide
renewable energy in the form
of Large-scale Generation
Certificates (LGCs) together
with transitional purchases of
Green Power
– Balanced remaining emissions
by investing in certified carbon
offsets for our remaining
emissions, targeting nature-
based offsets to account for
emissions from natural gas,
wastewater, refrigerants, and
waste/recycling
Since FY08 we have been working
to continuously improve energy
efficiency and associated emission
reductions. As of FY22, we reduced
emissions by around 62%. Of the
remaining emissions, around 81%
was avoided by transitioning to
renewable electricity and the
remaining 19% was balanced
through carbon offsets.
CO2
0
Net zero
emissions
Optimising building
performance and
resource efficiency
Sourcing 100%
renewable
electricity
Investing in
nature-based
solutions
Dexus portfolio net emissions intensity
120
100
80
60
40
20
0
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Water, waste/recycling
& corporate operations
)
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-20
FY08
FY10
FY12
FY14
FY16
FY18
FY20
FY22
-40
-60
Indirect
Electricity
Fossil Fuels
12%
81%
7%
Natural gas and diesel
Renewable electricity
GreenPower and Power
Purchase Agreements
81%
Net emissions
—— FY08 BAU
Carbon offsets
19%
Investment in certified
Carbon abatement and
removalprojects
120
100
80
60
40
20
0
Dexus 2022 Annual Report
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Balancing our remaining
emissions
Due to cost, operational, and
technological constraints, in some
cases across our portfolio it is not
feasible to reduce emissions to zero.
To balance these emissions, we have
procured accredited carbon credit
units to offset the remaining building-
related emissions from sources including
consumption of fossil fuels and water,
waste generated from operations and
air conditioning refrigerants.
We have sourced carbon credit
units through a mix of domestic and
international projects, with a focus on
transitioning towards nature-based
solutions. For Australian-based projects,
this involves targeting bush regeneration
and tree planting to establish
permanent native vegetation on land
that was previously cleared, and where
regrowth has been suppressed. These
offsets have been sourced from projects
in New South Wales, Queensland and
Western Australia. Acknowledging
our responsibility to protect natural
environments globally, we have also
incorporated international nature-
based projects into our purchasing
strategy, together with projects that
deliver carbon abatement through
fuel efficiency and renewable
energy generation.
Beyond net zero: what’s next?
Approach to managing
emissions moving forward
While it is important to celebrate
the net zero milestone, this is by no
means the end of our journey. Our
pathway has been designed for
ongoing net zero emissions across our
group managed portfolio’s building
operations over the long-term.
However, our portfolio is evolving.
Our priorities in the year ahead
include integrating the AMP Capital
portfolio. As this and other new funds
and mandates are welcomed to the
platform, we commit to working with
our investment partners to align to
our commitment to net zero.
Looking towards 2030, we have
several key areas of focus to amplify
impact across our value chain:
– Operational emissions continuing
to seek ways to reduce emissions
across the portfolio through
optimising asset performance,
leveraging new technology
partnerships to transition away
from fossil fuels and decarbonising
our supply chains, ultimately
reducing the purchase of offsets
– Upfront emissions tackling
the embodied emissions within
materials and during the
construction process by
leveraging learnings from
exemplar live projects such
Atlassian Central, Sydney
– Downstream tenancy emissions
supporting our customers with
their own emissions journey
through insights and solutions
towards smarter workspaces,
low carbon fit outs, minimising
material waste and sourcing
renewable electricity
– Financed emissions collaborating
with investors to access
sustainable finance linked to
delivering on decarbonisation
goals
– Investing in nature continuing
to invest in accredited offset
projects in line with our needs,
with a view to prioritise domestic
carbon removal projects that
seek to provide biodiversity and
social benefits, with the option to
progress our own projects
Environment
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60 Castlereagh Street, Sydney NSW.
Advancing resource efficiency
As part of our efforts to balance
our emissions, asset-level resource
efficiency remains an ongoing priority
for creating value, helping to conserve
natural resources while benefiting
customers through lower occupancy
costs. We are on track to meet our
FY25 energy and water efficiency
targets. As the pandemic continues
to affect building occupancy levels,
we have remained agile in the face
of periodic lockdowns to control or
switch off equipment when not in use,
and have continued to implement
energy efficiency projects with a view
to maintain improved performance
as buildings start to revert to a post
COVID-19 ‘new normal’ working
environment.
66
Valuing materials and the
circular economy
Optimising waste management
practices with the support of our
customers is an important step towards
decarbonising building operations.
Our waste management program
aims to go beyond waste diversion to
embrace circular economy principles
that promote efficient resource use by
keeping materials at their highest value.
We have continued to make progress
towards our FY25 4 star NABERS waste
target by engaging with customers to
share information and insights to help
improve waste recycling performance.
At QV Melbourne we partnered with
customers, cleaners, Sustainability
Victoria and a leading circular economy
partner to review current waste
practices and workshop opportunities
to transition from a traditional
single-use and disposal model. The
project highlights the importance
of collaboration in applying circular
economy principles across mixed-use
precincts and demonstrates a practical
approach for redesigning systems to
reduce consumption and avoid waste.
COMMITMENTS
Reduce energy intensity by
10% across the managed
office portfolio by FY25
against a 2019 baseline
Reduce water intensity by
10% across the managed
office portfolio by FY25
against a 2019 baseline
Deliver an average 5 star
NABERS Indoor Environment
rating across the group
office portfolio by FY25,
delivering initiatives to
enhance occupant health
and wellbeing
Achieve an average 4 star
NABERS waste rating by
FY25 across the group
office portfolio
Focus areas
Looking beyond net zero to
amplify impact across our
value chain in line with our
1.5 degree decarbonisation
journey and 2030 Science
Based Target trajectories
Sourcing 100% of electricity
from renewable sources
across the group’s managed
portfolio in the longer-term
as a RE100 signatory
Dexus 2022 Annual Report Climate resilience
Addressing climate-related risks and
opportunities is essential to meeting
our strategic objectives, and we remain
committed to disclosing in accordance
with the Task Force on Climate-
related Financial Disclosures (TCFD)
recommendations.
Being a real estate investment partner
of choice requires us to understand how
both the physical and transitional risks
posed by climate change will impact
our ability to create and maintain value.
Our climate resilience strategy enables
us to proactively respond to climate-
related risks and opportunities and
broadly aligns with the requirements
of the TCFD.
Governance
We take a collaborative approach to
managing climate-related impacts
across the group’s operations. Climate
change has been incorporated into
relevant group policies and procedures
to provide guidance to employees
and inform all stakeholders of our
commitment to managing climate-
related issues.
Our corporate governance framework
supports a culture that understands
the importance of sustainability and
ensures that climate-related issues are
addressed appropriately at board and
management levels:
– The Dexus Board oversees all
strategic risks including climate
change
– The Board ESG Committee oversees
the group’s approach to addressing
climate-related issues
– The Board Risk Committee
oversees the group enterprise risk
management practices and key
risk register, which includes
climate change
– The Sustainability team oversees
the group’s management response
and reporting, presenting on a
quarterly basis to the Board ESG
Committee on progress against
targets, and to the Board as key
topics emerge
ESG objectives are integrated into
the roles and responsibilities of
executives, management and other
employees through inclusion in the
Group Scorecard. Remuneration is
linked to the successful delivery of
these objectives through the evaluation
of progress against ESG-related
commitments and targets within
the Scorecard.
Strategy
Climate-related issues present risks
and opportunities across our entire
operations, along with potential
strategic opportunities. To support
a comprehensive understanding
of climate-related issues, we have
incorporated a wide range of scenarios
into our climate risk management
approach.
Dexus’s Towards Climate Resilience
report explains the use of scenario
analysis, summarises the identified
climate-related risks and opportunities,
and explores ways that we can evolve
our strategy to enhance the resilience
of our operations and meet our
strategic objectives.
Our climate resilience strategy responds
to a range of climate-related issues
that have been identified through
our scenario analysis and risk
management processes.
The strategy comprises four themes:
1. Reducing our impact through
decarbonisation, energy efficiency and
renewable energy with the remaining
emissions achieved by nature-based
offsets. These elements underpinned
our achievement of net zero emissions
for building operations across our group
managed portfolio. For more details on
the achievement of our net zero target
refer to pages 63-65 of this report, or
our 2022 Sustainability Report.
We are undertaking a range of programs
and initiatives that contribute to
reducing our climate impact, including:
– Partnering with Shell Energy to
activate opportunities for rooftop
solar PV across industrial properties
– Entering into Renewable Electricity
Supply Agreements (also known as
Power Purchase Agreements) across
Australia to source renewable
electricity
– Operating a robust waste
management system to promote
waste recycling
– Consistently achieve 80% materials
diversion across office tenancy
de-fit projects by repurposing
items in other assets across the
portfolio, and offering items for free
to customers or for sale to outside
businesses for a fee or charitable
donation
– Developing feasibility for a future
staged rollout of destination EV
charging stations
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Environment
67
Climate-related issues present risks and
opportunities across our entire operations,
along with potential strategic opportunities.
2. Adapting to climate change through
addressing physical and transition risks
relevant to our properties, people, and
operations, and leveraging climate
change-related opportunities.
We adopt a risk-based approach
to managing climate change
resilience which considers assets
across acquisition, development
and operations stages, and have
integrated climate resilience within our
Environment Management System,
which is certified to ISO 37301:2015.
We seek to mitigate climate-related
impacts from:
– Direct physical risks to property and
infrastructure as a result of extreme
weather events such as floods,
storms and heatwaves, potentially
resulting in significant impacts
to operations
– Indirect physical climate risks where
climate events disrupt systems
upon which an asset relies (e.g.
energy supplies, communications,
transport), resulting in impacts
on both building operations
and customers
– Transitional risks such as the
potential impacts of technological
and market shifts, business model
risks and political decision-making
on operational goals for both
individual properties and the overall
Dexus business
68
3. Influencing our value chain by
engaging and working with customers,
suppliers and other key stakeholders
to reduce climate impacts. We
collaborate across our value chain to
broaden our positive impact and to
enhance climate resilience by:
– Designing a climate responsive
precinct at Waterfront Place in
Brisbane, which goes beyond being
net zero in operation to:
–
–
Incorporate a passive-façade,
electrified design to harness
renewable electricity and
maximises on-site renewables
to reduce grid-demand
Include flood resilience initiatives
to respond to the threat of
rising sea levels and increasing
catastrophic weather events
– Divert over 80% of waste away
from landfill by adopting a
circular economy approach to
waste management
– Employ responsible
construction and environmental
management procedures,
including sustainable
procurement, life cycle impacts
optimisation, and minimisation
of embodied carbon
– Partnering with Atlassian to deliver
their visionary headquarters in
Sydney, which includes:
– A goal to achieve 50% reduction
in embodied carbon for
structure, superstructure and
façades for the ‘cradle to gate’
phases of the development
– Operating using 100%
renewable electricity
– All-electric design, eliminate the
need for fossil fuels to retail and
commercial kitchens
– Partnering with office customers in
Queensland and Western Australia
to access renewable electricity
for their tenancies by trialling a
GreenPower buyers group
4. Climate governance to support
a culture that understands and
appropriately acts on climate-related
issues at board and management
levels.
We recognise our fiduciary duty to
ensure effective governance and
risk management procedures are
implemented to integrate climate
risks and opportunities across the
group’s operations.
For further details on our approach to
governance see pages 70-77 of this
report, and page 13 of the 2022 Dexus
Sustainability Report.
Risk management
To ensure climate-related issues are
identified and managed in a systematic
and timely way, we integrate climate
change as a material topic into our
Risk Management Framework (aligned
to the principles of ISO 31000:2018).
Our climate-related risks are assessed
based on an overall risk evaluation
informed by likelihood, consequence,
and effectiveness of controls.
The Risk team oversees the group’s
Risk Management Framework, which
includes our risk appetite in relation
to climate change and monitoring of
relevant tolerances. The Sustainability
team is responsible for day-to-day
operationalisation of carbon reduction
and climate resilience activities across
the group, including regular review of
climate-related risks and opportunities
through scenario analysis. The Property
Operations and Development teams
are responsible for applying the
Dexus risk management framework
to appropriately manage and plan
for property-related risks including
climate change, with support from
Sustainability and Risk.
Dexus 2022 Annual Report 30 The Bond, Sydney NSW.
Addressing physical risk
Addressing transition risk
Since 2011, Dexus has conducted
periodic group-wide physical climate
risk assessments to determine the
magnitude of climate risks across
the portfolio. Properties which have
been identified as high risk through
the portfolio-wide climate risk
assessment have site-specific climate
risk assessments undertaken to
evaluate significant climate-related
vulnerabilities and adaptation actions.
During the year, we expanded our
site-specific climate risk assessments
to evaluate, mitigate and manage
significant climate-related
vulnerabilities and adaptation activities
at high-risk properties. A total of 11 site-
specific climate risk assessments were
carried out across the group
in FY22.
The assessment process involves
sensitivity analysis and determination of
climate risk level based on the inherent
risk, with reference to recent and
historical natural disaster events and
geographical factors, while factoring in
climate change projections and data
on previous economic losses. Site-
specific climate risk assessments consist
of a site inspection, on-site risk and
adaptation assessment workshop and
development of a detailed climate risk
register for the property.
Management of physical risks at the
asset level has been integrated into
the Dexus Environmental Management
System (EMS), which is certified to
ISO 14001:2015. Climate change is listed
as an aspect within the EMS, which
provides a structured framework for
considering physical risk factors, such
as higher temperatures, into the
day-to-day business activities across
the group.
We recognise that to understand how
climate change will impact our business
model, and build resilience against
these impacts, we must evaluate the
impact of climate-related transition
events on the economy and
our customers.
In 2020, we expanded our use of
scenario analysis to test how the
business could enhance our resilience
to climate impacts that extend beyond
our individual properties. Scenario
analysis enables us to examine possible
impacts related to these futures so
we can enhance our preparedness.
The outcomes and detailed strategic
directions for Dexus from the scenario
analysis are detailed in Dexus’s report,
Towards Climate Resilience.
Leveraging our existing climate risk
approach and the climate scenario
analysis disclosed in its Towards
Climate Resilience report, in 2021 we
commissioned an economic advisory
firm to conduct an economic analysis of
the climate-related transition impacts
relevant to our customer base over the
next 10 years. The economic analysis
explored the implications of transition
risks to our customer base and the
drivers of financial performance relating
to specific economic indicators, such
as white-collar employment, industry
output, interest rates and Consumer
Price Index.
The analysis focused on the risk
and opportunity to rental income
by evaluating how customer sector
outlooks are economically impacted
based on their exposure to physical
and transitional climate impacts. This
analysis was undertaken to understand
changes in customer demand for space
and the economic outlook of all sectors
(based on their sectoral impacts to
climate change), highlighting which
industry sectors are the climate winners
and losers, and what is the associated
impact on their demand for office space.
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The economic modelling aligns with the
‘Dedication and delivery’ and “Delay
and disruption” scenarios from Dexus’s
Towards Climate Resilience report and
modelled climate-adjusted changes to
the macro-economic environment.
The climate-adjusted economic
analysis will be used to:
– Better understand potential future
financial impacts to revenue arising
from customer-related transition
risks and opportunities.
– Integrate into our broader strategy
– Identify suitable metrics for ongoing
monitoring of climate transition risk
– Indicate a pathway to future
climate-related financial disclosures
(such as climate-adjusted
valuations and integration into the
financial statements)
Metrics and targets
We are committed to enhancing
operational efficiency across our
property portfolio to deliver savings in
resource consumption and associated
greenhouse gas emissions, and to
meet current and future environmental
targets. We monitor and report on
absolute, like-for-like greenhouse
gas emissions and emissions
intensity for all properties under our
operational control. We obtain external
assurance over selected sustainability
performance data, with progress
against environmental targets and
other climate-related metrics being
disclosed in the 2022 Sustainability
Report.
LEARN MORE
Our 2022 Sustainability Report
goes into more detail about our
environment activities, available at
dexus.com/investor-centre
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Environment
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70
Dexus 2022 Annual Report Governance
A high standard of corporate governance
is the foundation for the long-term success
of the group.
Our Board and Group Management
Committee are committed to
excellence in corporate governance
and aspire to the highest standards
of conduct and disclosure. To support
this aspiration, we have embedded a
framework that enhances corporate
performance and protects the interests
of all key stakeholders. Our Board
believes that a high standard of
corporate governance supports:
– A culture of ethical behaviour
resulting in an organisation
that acts with integrity
– Improved decision-making
processes
– Better controls and
risk management
– Improved relationships
with stakeholders
– Accountability and transparency
We continue to focus on organisational
culture by encouraging an environment
where our people and stakeholders
feel comfortable in raising issues and
ensuring our Board and Management
are kept informed of incidents that may
impact the business.
Our Board and its Board Committees
have overall responsibility for
corporate governance and are
collectively focused on the long-
term success of the group. Areas of
specific responsibility include financial
performance, setting strategy and
overseeing its implementation,
providing leadership and direction
on workforce culture and values, and
agreeing and overseeing the risk
framework and risk appetite.
Our Board regularly reviews its
corporate governance policies
and processes to ensure they are
appropriate and meet industry best
practice, governance standards and
regulatory requirements.
For the 2022 financial year, the group’s
governance practices complied
with the ASX Corporate Governance
Council’s Corporate Governance
Principles and Recommendations
(fourth edition) and addressed
additional aspects of governance
which the Board considers important.
Further details are set out in the
Corporate Governance Statement,
which outlines key aspects of our
corporate governance framework
and practices, which is available at
www.dexus.com/corporategovernance
Governance for Funds
Management
Dexus uses its expertise, scale and
knowledge of the Australian real estate
market to create and manage property
investments for these third party capital
partners and investors.
A high standard of corporate
governance is vital for attracting,
retaining and reinforcing the confidence
of these third party capital partners
and investors.
Demonstrating this importance,
Dexus’s unlisted pooled funds have
in place a best practice corporate
governance model in consultation
with their respective investor base.
These funds have Responsible
Entity Boards that are comprised
predominantly of non-executive
directors that are independent of
Dexus. In addition, these funds each
have Advisory Committees in place
comprising Unitholder appointed
representatives. The Responsible Entity
Boards are responsible for reviewing
and approving recommendations with
respect to each Fund’s major decisions,
including acquisitions, divestments,
developments, major capital
expenditure and the annual
Investment Plan.
71
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Governance
Board skills and experience
Our Board has determined the skills,
expertise and experience required as a
collective to ensure diversity of thought
and vigorous debate on key decisions.
This is regularly reviewed when
recruiting new Directors and assessed
by the Board on an ongoing basis. The
collective experience of the current
Directors has been outlined against the
areas of skill and expertise on page 73.
In 2022, Dexus engaged an independent
expert to gauge progress on
improvements identified in the 2021
Board performance evaluation. The
expert also facilitated a detailed review
of Dexus’s Board Skills Matrix. The Board
believes that its composition meets or
exceeds the minimum requirements in
each category.
Dexus also acknowledges the
importance of effective corporate
governance practices in relation to
its third party capital partners. Firm
policies are in place to manage
conflicts of interest and related
party transactions.
In managing conflicts of interest, Dexus
has established a structure whereby the
responsibility for the investment vehicle
is separated from the other Funds or
investment vehicles involved for which
Dexus provides services.
The Fund Manager for each Fund or
investment vehicle will, at all times,
act in the best interests of the Fund
or investment vehicle. In addition,
staff involved in managing a Fund are
dedicated to the funds management
business, rather than to other activities.
Following the acquisition of APN
Property Group in July last year, Dexus
also manages the two listed funds and
applies many of the same governance
arrangements. These funds will also
benefit from leveraging Dexus’s funds
and property management expertise
to drive growth and performance.
Board of Directors
Our Board comprises a majority of
Independent Directors with all directors
other than the CEO being Independent
Non-Executive Directors. The Board
currently consists of seven Independent
Non-Executive Directors and one
Executive Director. The Board renewal
process over the past several years
has produced an experienced Board
of Directors with a broad and diverse
skill set. Our Board has determined
that, along with individual Director
performance, openness, trust, integrity,
teamwork, emotional intelligence,
and diversity are important attributes
to a well-functioning board. We also
acknowledge that an effective Board
relies on board members with different
tenures.
The members of the Board of Directors
and the relevant business and
management experience the Directors
bring to the Board is detailed on page
74 and available at www.dexus.com.
The Dexus Board and Board Committee membership at 30 June 2022
Director
Board
Audit
Committee
Risk
Committee
People &
Remuneration
Committee
Nomination
Environmental
Social and
Governance
Committee
Richard Sheppard
Darren Steinberg
Patrick Allaway
Penny Bingham-Hall
Tonianne Dwyer
Mark Ford
Warwick Negus
The Hon. Nicola Roxon
Chair and member
Member
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Dexus 2022 Annual Report Dexus board skills matrix
Areas of skill and expertise
Experience
Leadership and Governance
Strategy
Property and Infrastructure investment
Funds management
Capital management
Finance
Culture, People & Remuneration
Risk management and Compliance
Sustainability and Stakeholder engagement
Extensive experience as a director and leader including in public
listed companies of similar size and complexity. Deep understanding
of relevant legal, compliance and regulatory frameworks and
sound capability in governance and protecting and enhancing the
company’s reputation.
Experience in developing, executing and successful delivery of
strategy, and oversight against strategic objectives; includes
extensive experience in merger and acquisition activities,
integrations and organisational transformations.
Experience in and understanding of economic drivers and trends,
markets and customer needs and driving returns from investment in
real estate (including offices, industrial, retail and health care) and
infrastructure. Good understanding of the risks and opportunities of
larger scale development projects.
Experience in and good understanding of the drivers of the
successful management of third party funds including a deep
understanding of, and engagement with, institutional and other
fund investors. Understanding of the global and local trends in the
management of third party funds and sources of capital.
Proficiency in and strong understanding of raising capital and
investment banking including experience in allocating and
managing equity and debt capital to optimise the organisation’s
returns whilst ensuring appropriate financial strength and liquidity.
Good understanding of accounting standards and trends and
proficient at interpreting and analysing financial statements for
organisations of similar size and complexity. Sound understanding of
budgeting, forecasting and drivers of financial performance. Ability
to evaluate the effectiveness of internal controls.
Experience in influencing organisation culture shaped by ‘tone from
the top’ that promotes high engagement, diversity and inclusion.
Deep experience in leadership development, talent management,
succession planning and in remuneration frameworks and reporting
for large listed companies.
Experience in and understanding of risk management frameworks
and controls; the identification, assessment and management of
risks, including managing compliance across complex regulated
financial services organisations. Includes experience in workplace
health and safety and understanding of cyber and technological
risk management.
Experience and expertise in sustainability best practices relevant to
the property sector; demonstrable understanding of environmental
and social impacts of the business on communities. Good
understanding of community and stakeholder engagement, as well
as related governance.
73
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Governance
Board of Directors
BOARD FOCUS
The key areas of focus
for the Board and Board
Committees during FY22
are aligned to each of
our key resources.
Financial
The Board and Board Audit
Committee are involved
in focusing on financial
performance.
Pages 28-41
Properties
The Board is involved in
approving transactions and
developments across the
portfolio.
Pages 42-51
People and capabilities
The Board and Board People
& Remuneration Committee
are involved in aspects
relating to employees.
Pages 52-55
Customers and
communities
The Board and Board ESG
Committee are involved in
reviewing aspects relating to
customers and community
related activities.
Pages 56-61
Environment
The Board and Board ESG
Committee are involved in
reviewing aspects relating
to climate change and the
environment.
Pages 62-69
Risk
The Board and Risk
Committee are involved in
reviewing and monitoring our
key risks.
Pages 22-26
74
Richard Sheppard
Chair and Independent Director
BEc (Hons), FAICD
Patrick Allaway
Independent Director
BA/LLB
Appointed to the Board on
1 January 2012, Richard Sheppard is
both Chair and Independent Director
of Dexus Funds Management Limited,
Chair of the Board Nomination
Committee and a member of the Board
People & Remuneration Committee.
Appointed to the Board on
1 February 2020, Patrick Allaway is an
Independent Director of Dexus Funds
Management Limited and a member
of the Board Nomination Committee,
Board Audit Committee and Board
Risk Committee.
Richard is a Director of Star
Entertainment Group.
Richard brings to the Dexus Board
extensive experience in banking
and finance and as a director and
Chairman of listed and unlisted
property trusts. He was Managing
Director and Chief Executive Officer of
Macquarie Bank Limited and Deputy
Managing Director of Macquarie
Group Limited from 2007 until late 2011.
Following seven years at the Reserve
Bank of Australia, Richard joined
Macquarie Group’s predecessor, Hill
Samuel Australia in 1975, initially working
in Corporate Finance. Richard became
Head of the Corporate Banking Group
in 1988 and headed a number of
the Bank’s major operating Groups,
including the Financial Services Group
and the Corporate Affairs Group. He
was a member of the Group Executive
Committee since 1986 and Deputy
Managing Director since 1996. Richard
was also Chairman of the Australian
Government’s Financial Sector Advisory
Council, Macquarie Group Foundation,
Eraring Energy and Green State Power
Pty Limited. He was also a director of
Snowy Hydro Limited.
Patrick is Chairman of the Bank of
Queensland and a Non-Executive
Director of Allianz Australia and is
on the Advisory Board of Adobe
International.
Patrick brings over 30 years’
experience in financial services across
financial markets, capital markets,
and corporate advisory. Patrick’s
executive career was in financial
services with Citibank and Swiss Bank
Corporation (now UBS) working in
Sydney, New York, Zurich and London.
Patrick was also Managing Director
of SBC Capital Markets & Treasury.
Patrick has over 15 years Non-
Executive Director experience across
financial services, property, media,
and retail. Patrick was formerly a
Non-Executive Director of Macquarie
Goodman Industrial Trust, Metcash
Limited, Fairfax Media, Woolworths
South Africa, David Jones, Country
Road Group, Domain Limited and Nine
Entertainment Co. Holdings Limited.
He was also Chair of the Audit &
Risk Committees for Metcash, David
Jones, and Country Road Group.
Dexus 2022 Annual Report
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Mark Ford
Independent Director
Dip. Tech (Commerce), CA, FAICD
Appointed to the Board on
1 November 2016, Mark Ford is an
Independent Director of Dexus Funds
Management Limited and Dexus
Wholesale Property Limited, Chair of
the Board Audit Committee and a
member of the Board Environmental,
Social & Governance Committee and
Board Nomination Committee.
Mark is Chair of Kiwi Property Group
and is a Director of Prime Property
Fund Asia.
Mark has extensive property industry
experience and has been involved in
Real Estate Funds Management for over
25 years. He was previously Managing
Director, Head of DB Real Estate
Australia, where he managed more
than $10 billion in property funds and
sat on the Global Executive Committee
for Deutsche Bank Real Estate and
RREEF. Mark was also a Director in the
Property Investment Banking division
of Macquarie and was involved in
listing the previous Macquarie Office
Fund. His previous directorships include
Comrealty Limited, Property Council of
Australia, Deutsche Asset Management
Australia and he was also Founding
Chair of Cbus Property Pty Limited
and Chair of South East Asia Property
Company. Mark previously held senior
roles with Price Waterhouse and
Macquarie Bank.
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Board of Directors
75
Penny Bingham-Hall
Independent Director
BA (Industrial Design), FAICD, SF Fin
Tonianne Dwyer
Independent Director
BJuris (Hons), LLB (Hons)
Appointed to the Board on
10 June 2014, Penny Bingham-Hall
is an Independent Director of Dexus
Funds Management Limited, Chair
of the Board People & Remuneration
Committee and a member of the Board
Nomination Committee and Board
Environmental, Social & Governance
Committee.
Penny is a Non-Executive Director of
Fortescue Metals Group Ltd, Supply
Nation and the Crescent Foundation.
Penny is also Chair of Vocus Group
Limited, Taronga Conservation Society
Australia, and the Advisory Committee
for the Climate Governance Initiative
Australia.
Penny has broad industry experience
in construction, property and
infrastructure development and brings
extensive experience as a company
director in publicly listed, government
and not-for-profit organisations. She
has developed deep expertise in
the oversight of people, culture and
remuneration issues and has been
a vocal advocate for sustainability,
workplace safety and ESG issues for
more than a decade.
Penny was a senior executive at
Leighton Holdings Limited (now CIMIC
Group) and is a former director of
BlueScope Steel Limited, Australia Post,
Port Authority of NSW and Macquarie
Specialised Asset Management. Penny
was also Chair of the NSW Freight and
Logistics Advisory Council, the inaugural
Chair of Advocacy Services Australia,
Deputy Chair and Life Member of
the Tourism & Transport Forum and a
director of Infrastructure Partnerships
Australia, SCEGGS Darlinghurst Limited
and the Global Foundation.
Appointed to the Board on
24 August 2011, Tonianne Dwyer is an
Independent Director of Dexus Funds
Management Limited and Dexus
Wholesale Property Limited, Chair
of the Board Risk Committee and a
member of the Board Audit Committee
and Board Nomination Committee.
Tonianne is a Director of OZ Minerals
Limited, ALS Limited and Incitec Pivot
Limited. She is also Deputy Chancellor
and a member of the Senate of the
University of Queensland, and she is
on the Board of the Sir John Monash
Foundation.
Tonianne brings to the Board significant
experience as a company director
and executive working in listed
property, funds management and
corporate strategy across a variety
of international markets. She was a
Director from 2006 until 2010 of Quintain
Estates and Development – a listed
United Kingdom property company
comprising funds management,
investment and urban regeneration –
and was Head of Funds Management
from 2003. Prior to joining Quintain,
Tonianne was a Director of Investment
Banking at Hambros Bank, SG Cowen
and Societe Generale based in
London. She also held directorships on
Metcash Limited, Queensland Treasury
Corporation and Cardno Limited, the
Bristol & Bath Science Park Stakeholder
Board, and on a number of boards
associated with Quintain’s funds
management business including the
Quercus, Quantum and iQ Property
Partnerships.
Darren Steinberg
Chief Executive Officer and
Executive Director
BEc, FRICS, FAPI, FAICD
Appointed to the Board on
1 March 2012, Darren Steinberg is the
CEO of Dexus and an Executive Director
of Dexus Funds Management Limited.
Darren has over thirty years’ experience
in the property and funds management
industry with an extensive background
in office, industrial and retail property
investment and development. He
has a Bachelor of Economics from
the University of Western Australia.
Darren is a Fellow of the Australian
Institute of Company Directors, the
Royal Institution of Chartered Surveyors
and the Australian Property Institute.
He is a Life Member and former
National President of the Property
Council of Australia, and a founding
member of Property Champions
of Change Coalition. He is also a
Director of Sydney Swans Limited.
Warwick Negus
Independent Director
BBus (UTS), MCom (UNSW), SF Fin
The Hon. Nicola Roxon
Independent Director
BA/LLB (Hons), GAICD
Appointed to the Board on
1 February 2021, Warwick Negus is an
Independent Director of Dexus Funds
Management Limited and a member
of the Board Nomination Committee,
Board Audit Committee and Board
Risk Committee.
Warwick is Chair of Pengana Capital
Group and a Non-Executive Director
of Washington H. Soul Pattinson, the
Bank of Queensland, Virgin Australia
Holdings Limited, Terrace Tower Group,
New South Wales Rugby Union Limited
and Tantallon Capital Advisors. He
is also Deputy Chancellor and a
member of the Council of UNSW.
Warwick has more than 30 years of
funds management, finance and
property industry experience in
Australia, Europe and Asia. His most
recent executive roles included Chief
Executive Officer of Colonial First State
Global Asset Management, Chief
Executive Officer of 452 Capital, and
Goldman Sachs Managing Director
in Australia, London, and Singapore.
Warwick was formerly Chair of UNSW
Global and a Non-Executive Director
of FINSIA.
Appointed to the Board on
1 September 2017, Nicola Roxon is
an Independent Director of Dexus
Funds Management Limited, Chair
of the Board Environmental, Social
& Governance Committee and
a member of the Board People
& Remuneration Committee and
Board Nomination Committee.
Nicola is an Independent Chair
of HESTA (the health sector
superannuation fund) and VicHealth
(a health promotion statutory
authority). She is also a Non-Executive
Director of Lifestyle Communities
Limited and on the Board of
charity, Health Justice Australia.
Nicola is a lawyer by training and prior
to her non-executive career, served in
the Commonwealth Parliament for
15 years, including as Minister for Health
and as Australia’s first female Attorney-
General. Nicola brings more than
20 years experience in government,
health and law. Since commencing
her non-executive roles, Nicola has
focused on for purpose businesses,
charities and the ESG footprint of
the organisations she works with. Her
insights into public policy, strategy
and government adds diversity to the
Board’s perspectives on stakeholder
& community engagement as well as
risk management and governance.
76
Dexus 2022 Annual Report Board composition
Group Management Committee
Tenure
The Board has appointed a Group
Management Committee (GMC) comprising
9+ years 37.5
Dexus’s most senior executives. The
GMC is responsible for implementing
6–9 years 12.5
our strategy, maintaining our high
3–6 years 25
standards of governance, driving culture
and engagement, achieving objectives,
0–3 years 25
and ensuring the prudent financial
and risk management of the group.
0–3 years
3–6 years
6–9 years
9+ years
25%
25%
12.5%
37.5%
Members of the GMC in FY22 include:
Gender1
Darren Steinberg
Keir Barnes
Melanie Bourke
Chief Executive Officer
and Executive Director
Chief Financial Officer
Chief Operating Officer
Men
Women
57%
43%
1 Non-Executive Directors only.
Brett Cameron
Deborah Coakley
Ross Du Vernet
General Counsel and
Company Secretary
EGM, Funds
Management
Chief Investment Officer
Law 30%
Commerce/ Accounting 30%
Professional
qualifications
Other 10%
MBA 10%
Kevin George
Jonathan Hedger
Stewart Hutcheon
EGM, Office
Economics 20%
EGM, Group Strategy
EGM, Industrial,
Retail and Healthcare
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MBA
Other
Commerce/ Accounting
Law
20%
10%
10%
30%
30%
EGM = Executive General Manager
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Board of Directors
77
78
Dexus 2022 Annual Report Directors’
report
Remuneration report
Dear Security holder,
On behalf of the Board, I am pleased to
present the Remuneration Report for
the year ended 30 June 2022 (FY22).
Dexus has delivered another strong
year of performance, including
significant initiatives across our Funds
Management business, completing
a number of strategic transactions.
Dexus’s ability to execute on
complex transactions is one of our
competitive advantages and places
us in a good position to continue
generating value for Security holders.
Our ESG performance continues to
be acknowledged against external
benchmarks and we achieved our goal
of Net Zero emissions across the group
managed portfolio by 30 June 2022.
Strong financial performance has
been reflected in Adjusted Funds From
Operations (AFFO) per security and
distributions per security growing
by 2.7%. This result is particularly
pleasing given our initial market
guidance for distribution growth of not
less than 2% which was upgraded in the
second half to growth of not less
than 2.5%.
Over the past five years, both AFFO and
distributions per security have grown by
an average 3.2% per annum, including
the years of the COVID-19 pandemic.
Over the same time period, our third
party funds under management have
more than doubled, while we have also
diversified the product offering and
attracted new investors to the platform.
We also continue to invest in our strong
development pipeline across the
group portfolio.
Our key financial and non-financial
highlights for FY22 were:
– Agreeing to acquire AMP Capital’s
real estate and domestic
infrastructure equity business, with
up to $21.1 billion1 of assets under
management
– Partnering with Atlassian to develop
a $1.4 billion project for its new
40 level office headquarters
in Sydney
– Expanding our group industrial
portfolio with a $1.5 billion portfolio
acquisition alongside APN Industria
REIT, with Cbus Super later
introduced as a partner in the
Jandakot joint venture
– Achieving a customer net promoter
score (NPS) of +43
– Upholding the highest safety
standards with a 99.7% safety audit
score at Dexus workplaces and
zero fatalities
– Achieving our goal of Net Zero
emissions across the group
managed portfolio and being
recognised as an ESG sector leader
by external benchmarks
FY22 was another year of significant
progress for Dexus’s business. However,
we recognise that Security holders have
seen a negative Total Securityholder
Return (TSR) on their investment in Dexus
over the past 12 months, in line with the
S&P/ASX 200 A-REIT Index, with sector
pricing impacted negatively by the
uncertain economic environment and
rising interest rates.
The Board will continue to monitor
long-term TSR when assessing the
appropriateness of remuneration
outcomes.
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1 Based on AMP Capital FUM as at
30 June 2022, net of the known transition
of circa $10 billion of FUM from the platform.
79
Directors’ report
FY22 remuneration outcomes
Another strong year of company
financial performance and non-
financial performance resulted in an
outcome of 98.7% of maximum being
achieved in the Group performance
scorecard. After considering individual
performance, the final short-term
incentive (STI) outcome was 94.8% of
maximum for the CEO and 82.9%-94.8%
of maximum for other Executive Key
Management Personnel (KMP).
For the long-term incentive (LTI)
tranches which were tested on 1 July
2022, the vesting outcomes for the
second tranche of the FY19 LTI and first
tranche of the FY20 LTI were 70.0% and
50%, respectively. As foreshadowed
in last year’s Report, this is materially
lower than vesting outcomes in prior
years, largely reflecting the impact
of the COVID-19 pandemic on the
business over the performance period.
As flagged in my Chair letter last year,
effective 1 July 2021 we increased
fixed remuneration for the EGM, Funds
Management and Chief Investment
Officer by 10.3% and 6.7%, respectively.
This was informed by external
benchmarking data that remuneration
for these roles was below market and to
recognise the expanded responsibility
in both roles. Ms Barnes was promoted
from within the organisation to the
role of CFO on 1 October 2021. At that
time, the Board provided her with a
transitional increase to remuneration.
No other Executive KMP roles received a
fixed remuneration increase in FY22.
Response to first strike at the
2021 AGM and changes to
remuneration for FY23
At the 2021 AGM, it was clear that the
remuneration decisions disclosed in
our 2021 Remuneration Report did not
meet the expectations of external
stakeholders, resulting in a first strike
against the Report.
Following the AGM, the Board has
consulted extensively with investors and
proxy advisors to understand their key
concerns and conducted a thorough
remuneration framework review to
ensure that the concerns raised are
addressed holistically within the
context of our broader business and
remuneration strategy.
External stakeholders identified the
following primary areas of concern:
– The retention awards granted to
three of our Executive KMP including
the CEO
– Persistently high STI and LTI
outcomes over multiple years
– The setting of low financial targets
in the STI and LTI
As part of addressing these concerns,
against the backdrop of a stabilising
COVID-19 environment, a more fit-for-
purpose remuneration structure for our
Senior Executives will be implemented
from FY23 onwards. A key change
will be to reweight our Executives’
remuneration packages away from STI
towards LTI, to better align with the
long-term nature of our business model.
The changes for FY23 are aimed
at having the right balance in our
remuneration mix between short
and long-term, while still being able
to attract and retain high calibre
executives.
The Board acknowledges that the
labour market generally, and with
in-demand skills in particular, is highly
competitive at the moment with
elevated staff turnover rates and
pressure on fixed pay levels.
The key changes being made to our
Senior Executive structure are:
– Lowering our STI and increasing
our LTI opportunity levels to place
greater emphasis on rewarding
long-term performance. This
change will decrease the annual
cash component available to our
executives while increasing the
equity component to provide a
stronger alignment with our
Security holders
– Removing tranche vesting in the
STI by simplifying our deferral period
to 12 months
– Removing the STI’s Individual
Contribution Factor and assessing
performance against individual
KPIs within the STI scorecard that
reflect the accountabilities of our
executives
– Replacing Absolute Total Security
Holder Return (ATSR) with Relative
Total Security Holder Return (RTSR)
in our FY23 LTI grant to reward
outperformance relative to our
ASX A-REIT peers
– Setting hurdles at the “through the
cycle” range for our ROCE measure
in the LTI (rather than setting hurdles
within the range)
No further retention awards were made
during FY22 and the Board does not
intend to grant any retention awards
in FY23.
See Section 3 and 4 for more detail
on how we have responded and the
changes to our FY23 remuneration
framework.
We have also sought to enhance the
readability of the 2022 Remuneration
Report following the first strike by
changing its structure, to ensure we
have responded clearly to concerns
raised and provided transparent
disclosure.
We welcome your feedback on our
remuneration framework and look
forward to your support at our
2022 AGM.
Sincerely
Penny Bingham-Hall
Chair – People and Remuneration
Committee
80
Dexus 2022 Annual Report BOARD FOCUS
The main objective of the Board People
and Remuneration Committee (PRC)
is to assist the Board in fulfilling its
responsibilities of developing remuneration
strategy, framework and policies for Board
approval for the following groups:
– Non-Executive Directors (NEDs)
– Executive Key Management Personnel
(Executive KMP), including the Chief
Executive Officer (CEO)
– Group Management Committee
(GMC)
In FY22, the PRC also undertook a range of
activities relating to broader people and
remuneration issues including:
– Delivering the Director/Employee
engagement program
– Endorsing the design of FY22 Group
Scorecard and LTI performance hurdles
to the Board for approval
– Approving performance objectives
and Key Performance Indicators for
the CEO, Executive KMP and other
executives
– Endorsed increases in Chair and
Director fees in FY22 to the Board for
approval
– Approving the Inclusion and Diversity
strategic priorities and targets
– Approving the FY23 Fixed
Remuneration parameters for all
Dexus employees
– Monitoring the organisational culture,
employee engagement and corporate
culture metrics
– Reviewing talent development
programs and succession planning
– Responding to the 2021 Remuneration
strike by engaging an independent
remuneration consultant and
consulting extensively with key
stakeholders regarding proposed
changes to the LTI Plan for FY23
– Endorsing the proposed gender
equality targets, including pay equity
and workforce representation
CONTENTS
1.
Introduction
2. Remuneration snapshot
3. Response to the “first strike”
at the 2021 AGM
4. FY23 remuneration changes
5. Company performance
6. FY22 performance and
remuneration outcomes
7. FY22 remuneration framework
8. Executive KMP contractual
agreements
9. Remuneration governance
10. NED remuneration
11. Statutory disclosures
This Remuneration Report forms part of
the Directors’ Report and outlines the
remuneration framework and outcomes
for KMP in FY22.
This report has been prepared and audited in accordance
with section 308(3C) of the Corporations Act 2001.
1.
Introduction
1.1 Key Management Personnel (KMP)
In this report, KMP are those individuals having the authority and
responsibility for planning, directing and controlling the activities
of the Group, either directly or indirectly.
They comprise:
– Non-Executive Directors (NEDs)
– Executive Directors (i.e. the CEO)
– Other Executives considered KMP
The CEO and other Executives considered KMP are referred to collectively
as “Executive KMP” in this report. Outlined below are the KMP of the Group
during FY22.
There have been no changes to KMP since the end of FY22 up to the
date of the signing of the Directors report.
Name
Role
Richard Sheppard
Non-Executive Chair
Patrick Allaway
Non-Executive Director
Penny Bingham-Hall
Non-Executive Director
Tonianne Dwyer
Non-Executive Director
Mark H Ford
Non-Executive Director
Warwick M Negus
Non-Executive Director
Term
Full year
Full year
Full year
Full year
Full year
Full year
The Hon. Nicola Roxon
Non-Executive Director
Full year
Executive Director
and KMP
Darren J Steinberg
Other Executive KMP
Deborah C Coakley
Executive Director &
Chief Executive Officer (CEO)
Full year
Executive General Manager
(EGM), Funds Management
Full year
Ross G Du Vernet
Chief Investment Officer (CIO)
Full year
Kevin L George
Executive General Manager,
Office
Full year
Keir L Barnes
Chief Financial Officer (CFO)
Appointed
1 October 2021
Alison C Harrop
Former Chief Financial Officer Resigned on
30 September 2021
81
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Directors’ report
2 Remuneration snapshot
Link between business strategy and remuneration framework
Our Vision
Our Strategy
Our Remuneration Strategy
To be globally recognised as Australia’s
leading real estate company.
To deliver superior risk-adjusted returns
for investors from high quality real estate
in Australia’s major cities, by:
– Generating sustainable income
streams
– Being identified as the real estate
investment partner of choice
To attract, retain and motivate the
best people to create a great culture
that delivers our business strategy and
contributes to sustainable long- term
returns.
Remuneration principles
Culture
Alignment to
performance
Market
competitive
We align reward to
our strong risk, high
performance, diverse
and inclusive culture
We reward for
performance aligned to
our business strategy
with an emphasis on
equity ownership
We position reward
opportunity to
attract and retain the
best talent
Sustainable
We appropriately
reward for both
financial and
non-financial
outcomes
Simple and
Transparent
We keep it simple
and set clear
expectations
Executive remuneration components
Fixed Remuneration (FR)
Short-Term Incentive (STI)
Long-Term Incentive (LTI)
Attract and retain Executives with
the capability and experience to
deliver our strategy.
Reward for performance against
annual financial and non-
financial objectives.
Appropriately compensate
Executives for driving a great
culture and delivering on the
business strategy.
Attract and retain the best
people based upon the
competitive landscape among
relevant peers.
Provide competitive fixed
remuneration against our S&P/
ASX100 A-REIT peers for similar
roles.
Strategic annual objectives are
embedded in each Executive’s
personalised scorecard to reward
year-on-year performance
achieved in a balanced and
sustainable manner.
Align performance focus with
the long-term business strategy
to drive sustained earnings and
Security holder returns.
Performance hurdles are set
over 3- and 4-year periods to
encourage delivery of sustained
Security holder value.
The award is delivered wholly in
equity to align with the Security
holder returns.
Subject to meeting a behavioural
gateway, performance is
assessed against financial (75%)
and non-financial measures
(25%).
Performance is assessed against
a mix of financial and non-
financial measures, subject to
meeting minimum behavioural
standards.
Individual performance is
assessed via the Individual
Contribution Factor, adjusting
each Executive’s outcome
(0-125%).
ATSR, 40%
ROCE, 40%
Strategic,
20%
Purpose
Link to
remuneration
principles
FY22 approach
82
Dexus 2022 Annual Report
FY22 remuneration structure
Year 1
Year 2
Year 3
Year 4
Base Salary,
Superannuation and
Other Benefits
Assesses against a
Group scorecard over
12 months, subject to
meeting a behavioural
gateway. Final outcome
modified by the Individual
Contribution Factor
Cash
(75%)
Deferred Security
Rights (12.5%)
Deferred Security Rights (12.5%)
Performance Rights tested at end year 3 against performance measures (50%)
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Performance Rights tested at end year 4 against performance measures (50%)
Performance testing
Payment vesting
Minimum security holding requirement
CEO: 150% of FR
Other Executive KMP: 75% of FR
FY22
performance
and
remuneration
outcomes
A fixed remuneration increase of
10.3% and 6.7% was provided to
the EGM, Funds Management
and Chief Investment Officer.
This aimed to increase the
competitiveness of their
package as benchmarking
data indicated they were below
market against their ASX 100
A-REIT peers.
Upon meeting the behavioural
gateway, the following STI
outcomes were achieved:
– CEO: 94.8% of maximum
– Other KMP: 82.9%-94.8% of
maximum
See Section 6.1 for details on
performance outcomes against
the Group Scorecard.
Target is 100% of fixed
remuneration. Maximum is
125% of fixed remuneration
Maximum is 150% of fixed
remuneration for CEO or 75%
of fixed Remuneration for other
Executive KMP.
The following LTI tranches were
tested on 1 July 2022 against
the AFFO per security growth
and average ROCE measures,
as follows:
– The second tranche of the
FY19 LTI vested at 70%
– The first tranche of the
FY20 LTI vested at 50%
See Section 6.3-6.4 for details
on LTI vesting outcomes.
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Executive KMP pay mix at maximum
CEO (FY22)
27%
25%
8%
40%
Other Executive KMP (FY22)
33%
31%
10%
25%
Fixed remuneration (Cash)
Max STI (Cash)
Max STI Deferred (Security Rights)
Max LTI (Performance Rights)
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3. Response to the “first strike” at the 2021 AGM
Following the “first strike” at the 2021 AGM, we have outlined below the key concerns raised by investors and how we have
responded. For more detail on the changes to our Senior Executive remuneration framework for FY23, please see Section 4.
Key concern raised
Retention awards
How we have responded and why
Grant of Retention Rights to three Executives
– Awards were made in May 2021 to three senior Executive KMP, including the
– The high quantum of Retention Rights to the
CEO, EGM, Funds Management and CIO
– The CEO’s Rights vesting in a single tranche
after 3 years
CEO, to retain our most senior executives during a period of much change
in our industry and the uncertainty presented by COVID-19 to execute on
Dexus’s long-term strategy.
– These awards have achieved their intent as none of the three executives
have left Dexus. These awards were one-off in nature and no further
retention awards have been granted in FY22 nor do we intend granting any
more in FY23
– For the CEO, in addition to a service requirement, he must meet
additional performance conditions for any awards to vest. Detailed
disclosure of performance against these strategic hurdles will be provided
annually (see section 6.5)
STI plan
Low variability of STI outcomes over multiple
years
– FY21 STI outcomes were high with Executives
receiving at least 85% of maximum
– Since FY16, STI outcomes have been
consistently high
– From FY23, changes to the STI will be made to simplify the framework
and better differentiate between individual Executives’ performance
against key accountabilities. This includes the introduction of business
unit financial measures for our EGMs in addition to the Group financial
measures and replacing the existing Individual Contribution Factor
multiplier with individual objectives in the scorecard to increase the link
between STI outcomes and individual accountabilities and objectives
– While STI outcomes have historically been high, we believe this is a
reflection of sustained strong performance in a challenging environment.
Security holder wealth generation has been delivered with distributions
and AFFO increasing by 3.2% per annum on average for the past 5 years
– Lower AFFO per security growth hurdles were set in the FY21 STI due to the
economic uncertainty of COVID-19. Our FY22 hurdles were more closely
aligned with prior years and we achieved target performance.
– Our FY22 STI AFFO range was 2-3% (compared to 0-3% in FY21).
Lower FY21 target for the AFFO metric
– Targets were set lower than FY20
LTI plan
ATSR metric may not reflect performance
– While the Board felt an ATSR growth measure (measuring share price
– ATSR outcomes may be affected by
market sentiment, rather than Executives’
performance
Strategic metrics reward “day job”
responsibilities
– Newly introduced strategic metrics are not
sufficiently stretching
increases and distributions) was in the interests of Security holders as the
impacts of COVID were at a peak, investor feedback has led the Board to
replace the ATSR measure with a RTSR measure in the LTI for FY23
– RTSR will reward our relative performance against our real estate peers in
the S&P/ASX200 A-REIT Index on both share price and dividends
– Strategic measures (20% weighting) comprise of financial and non-
financial targets to ensure Executives are focused on achieving Dexus’s
long-term strategy in a sustainable manner
– To ensure transparency on our assessment of strategic measures, we
have provided an annual update of performance against this component
in Section 6.5
– The majority of the LTI in FY23 will continue to be assessed against
traditional financial measures (RTSR (40%) and ROCE (40%))
Lower FY21 target for the AFFO metric
– Due to the economic uncertainty of COVID-19, the Board elected to
– The threshold AFFO target for the FY21 LTI
grant allows for vesting below the “through
the cycle” range
introduce a threshold AFFO hurdle set lower than our “through the cycle”
AFFO range of 3.0-5.0%, where 25% of the award would vest at threshold.
This was a once-off approach
– For FY22 onwards, AFFO has been removed from the LTI in response to
concerns that our incentive remuneration was too heavily weighted to
AFFO. AFFO remains a key measure in our STI
84
Dexus 2022 Annual Report
4. FY23 remuneration changes
Based on feedback from external and internal stakeholders and the outcomes of the executive remuneration framework review
conducted during the year, we have outlined the changes to our framework for FY23 below, with further detail to be included in
the 2022 Notice of Meeting and 2023 Remuneration Report.
In making the changes below, the key rationale revolved around:
– Responding to key concerns raised by investors following a “first strike” at the 2021 AGM
– Continuing to offer competitive remuneration to our Senior Executives in a volatile labour market while rebalancing our
remuneration mix away from STI, towards a greater weighting on the LTI, reflective of the long-term nature of our business
model and strategy, where executive performance is better reflected over multi-year time horizons
Change
FY22 approach
FY23 approach
Rationale
Rebalancing pay mix
towards the LTI, away from
STI
– CEO: maximum STI
– CEO: no change
opportunity of 125% of FR
and LTI opportunity
of 150% of FR
– Other Executive KMP:
maximum STI opportunity
of 125% of FR and LTI
opportunity of 75% of FR
– Other Executive KMP:
maximum STI opportunity
of 100% of FR and LTI
opportunity of 120% of FR
– All KMP: Fixed remuneration
will not increase for FY23,
except for the CFO
– Reducing the weighting on
the STI and increasing the
weighting on LTI to focus
Executives on the long-
term and align more closely
to the CEO’s pay mix
– Reducing the cash
component and increasing
the weighting towards
equity, to better align with
Security holder interests
Executive KMP pay mix at maximum
CEO (FY22 & FY23)
27%
25%
8%
40%
Other Executive KMP (FY22)
33%
31%
10%
25%
Other Executive KMP (FY23)
31%
23%
8%
38%
Fixed Remuneration (Cash)
Max STI (Cash)
Max STI Deferred (Security Rights)
Max LTI (Performance Rights)
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Directors’ report
Change
STI plan
Assessing individual
performance in the
scorecard and removing
the Individual Contribution
Factor (ICF)
FY22 approach
FY23 approach
Rationale
– Individual performance is
assessed via the ICF and
a single Group scorecard
applies to all Executives
– The ICF outcome is a
modifier to the Group
scorecard outcome
(0-125%)
– Removal of the ICF as
– Simplifies our STI
a modifier to the Group
scorecard outcome
– Introducing individual
performance assessment
approach into an all-in-
one scorecard
objectives (20% weighting)
in the scorecard which
includes business unit
financial measures for the
EGMs.
– Will allow for more
differentiation in the
STI scorecard to reflect
individual accountabilities
across the Executive KMP
Deferral period simplified
– Deferred STI vests after
1 year (50%) and 2 years
(50%)
– Deferred STI vests after
– Simplifies our STI deferral
1 year (100%)
structure
– Balanced with the
reduction in opportunity
levels
– In response to external
stakeholder preference
for a relative measure,
to ensure Executives
are rewarded for
outperformance against
our real estate peers
– Removes impact of market
conditions influencing ATSR
– Balances the use of internal
vs external measures and
financial vs non-financial
strategic measures to
assess performance
holistically in the LTI
– Increases consistency
and simplifies our annual
approach to target setting
– In a low point of the cycle,
the new 7-10% range
will make it “harder” for
Executives to achieve
outperformance
– In a high point of the
cycle, while vesting will
commence at a lower
threshold, the upper end
of the range must still be
achieved for maximum
vesting
LTI plan
Replacing ATSR with RTSR
– LTI is assessed against
ATSR (40%), ROCE (40%)
and strategic metrics (20%)
– RTSR replacing ATSR, using
a S&P/ASX200 A-REIT peer
group
– ROCE and strategic metrics
remain unchanged
Setting “through the cycle”
hurdle ranges
– ROCE targets are set within
a “through the cycle” range
of 7-10% p.a., depending on
which stage of the property
cycle Dexus is in. E.g. In a
low point of the cycle, a
range of 7-8% p.a. may be
set and at a high point a
range of 8.5-10% may be
set
– Rather than setting hurdles
within the “through the
cycle” range of 7-10% for
ROCE, we will set target
and stretch hurdles at
7% and 10%, respectively,
to cover both the low and
high points of the property
cycle
– The Board will review
and confirm the
appropriateness of that
range annually, having
regard to both macro-
economic factors and
company strategy on
our expected capital
returns. For example, it has
become more difficult to
meet hurdles in the current
challenging macro-
economic environment,
however as our funds
platform grows, this should
drive ROCE enhancement
to partly offset the impact
of higher interest rates
86
Dexus 2022 Annual Report 5. Company performance
Historical performance outcomes
5.1
The following table outlines Dexus’s historical financial performance. These results flow into the Group scorecard outcomes for
the STI, as well as LTI vesting results.
Five-year financial performance
Funds From Operations (FFO)
Adjusted Funds From Operations (AFFO)
Net Profit After Tax (NPAT)
AFFO per security
AFFO per security growth
Distribution per security (DPS)
Return on Contributed Equity (ROCE)
Closing Dexus security price
NTA per security
CEO’s STI outcome (% of maximum)
($m)
($m)
($m)
(cents)
(%)
(cents)
(%)
($)
($)
(%)
FY22
757.6
572.2
FY21
717.0
561.7
1,615.9
1,138.4
53.2
2.7
53.2
9.7
8.88
12.28
94.8
51.8
3.0
51.8
8.3
10.67
11.42
100
FY20
730.2
550.5
927.71
50.3
0
50.3
9.0
9.20
10.86
57
FY19
681.5
517.2
FY18
653.3
485.5
1,281.0
1,728.9
50.3
5.5
50.2
10.1
12.98
10.48
100
47.7
5.1
47.8
7.6
9.71
9.64
92
1 Includes a prior year $10.3m (post tax) restatement of IFRIC SaaS customisation expenses.
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Distribution per Security v
CEO’s STI Outcome
Distribution per Security v
CEO’s STI Outcome
AFFO v CEO’s STI Outcome
as % of maximum
AFFO v CEO’s STI Outcome
as % of maximum
Distribution per security
CEO’s STI outcome (% of maximum)
Distribution per security
CEO’s STI outcome (% of maximum)
AFFO
AFFO
CEO’s STI outcome (% of maximum)
CEO’s STI outcome (% of maximum)
Average ROCE v
LTI Outcome
t
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Average ROCE
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LTI Tranche 2
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100%
$600
$500
80%
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60
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80%
60%
40%
20%
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50
40
30
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80%
60%
40%
20%
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50
40
30
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0
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FY21 FY22
FY18 FY19 FY20
FY21 FY22
FY18 FY19 FY20
60%
40%
$400
$300
$200
20%
$100
0%
FY21 FY22
$0
FY18 FY19 FY20
$400
$300
$200
$100
$0
FY21 FY22
Average ROCE v
LTI Outcome
Average ROCE
LTI Tranche 1
LTI Tranche 2
12.0%
LTI Tranche 1
12.0%
10.0%
10.0%
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FY21 FY22
FY18 FY19 FY20
FY21 FY22
FY18 FY19 FY20
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87
Directors’ report
Total Security holder Return performance
The S&P/ASX 200 Property Accumulation (A-REIT) Index declined by 12.3% during the year, impacted by rising bond yields.
Dexus performed in line with the A-REIT index over this time period.
Year ended 30 June 2022
Dexus
S&P/ASX 200 Property Accumulation Index
S&P/ASX 200 Accumulation Index
Source: UBS Australia at 30 June 2022.
1 year
% p.a.
-12.3
-12.3
-6.5
3 year*
% p.a.
5 year*
% p.a.
10 year*
% p.a.
-7.4
-2.8
3.3
3.6
4.4
6.8
10.3
9.2
9.3
The graph below provides an overview of Dexus’s TSR performance over the past 10 years, with Dexus maintaining its
outperformance against both the S&P/ASX 200 Property Accumulation (A-REIT) Index and the broader S&P/ASX 200
Accumulation Index over this time horizon, delivering an annual compound return of 10.3% per annum.
Dexus 10 year total return
Dexus total return
S&P/ASX 200 Accumulation Index
S&P/ASX 200 Property Accumulation Index
400%
350%
300%
250%
200%
150%
100%
50%
0%
2
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Source: UBS Australia at 30 June 2022.
6. FY22 performance and remuneration outcomes
The following section outlines Dexus’s performance outcomes and subsequent remuneration outcomes for Executive KMP.
Group scorecard performance outcomes
6.1
10-year TSR graph – Dexus vs S&P/ASX 200 A-REIT Index
As the uncertainty of COVID-19 ‘s impact started to subside in FY22, the Board reverted to its usual approach of setting targets
at the commencement of the performance period. For the FY22 STI, the Board considered a range of financial and non-
financial performance measures and hurdles that, if achieved, would be key indicators of company performance and drivers of
Security holder value.
Upon assessment of whether each Executive KMP met Dexus’s values and expectations, the Board determined that the
behavioural gateway was met and each Executive was eligible to receive a STI award in FY22.
Group performance against each measure in the scorecard has been provided below, including where outcomes landed
relative to threshold, target and maximum.
88
Dexus 2022 Annual Report
6.1
Group scorecard performance outcomes (continued)
Category & link
to remuneration
principles
Financial (75%)
Measures
Threshold (75%)
Target (100%)
Outperform
(125%)
Result
(% of target) Highlights
FY22 Targets
Group performance
(50%)
–
AFFO per security
growth
Threshold
2.0%
Target
2.5%
Outperform
3.0%
50%
AFFO per security of 53.2 cents,
reflecting 2.7% growth on FY21, above
the target of at least 2.5% growth.
Sector contribution
to AFFO (8.3%)
–
Sector performance
- AFFO vs budget
Threshold
2 out of 4 sectors
exceeding
expectations
Target
3 out of
4 sectors
exceeding
expectations
Maximum
All sectors
exceeding
expectations
8.3%
Three out of four sectors exceeded
expectations. One sector met
expectations
Funds’ performance
(8.3%)
–
Performance relative
to respective fund
benchmark, hurdle
rate or investment
plan objective
Threshold
60%
Target
70%
(9 funds
outperform)1
(10 funds
outperform)1
Maximum
80%
(12 funds
outperform)1
Developments
(8.3%)
–
Progressing the
group development
pipeline
Targets
– Development milestones
– Development completions
–
Pipeline additions
Non-financial (25%)
8.3%
8.3%
11 out of 151 funds outperformed their
external benchmarks or the financial
objectives and measures agreed with
fund partners.
Completed 322,000square metres of
developments. Added >$500m of group
industrial committed projects to the
pipeline. Agreed to develop and invest in
Atlassian’s new headquarters.
Customer (5%)
– Customer net
promoter score (NPS)
Threshold
> +30
Target
> +41
Maximum
> +45
3.8%
Customer NPS +43 across our office,
industrial and healthcare portfolios.
Capital partners
(5%)
– Diversification
Targets
5.0%
and new investor
capital for the
funds management
business
– Diversifying type of funds
– Diversifying investor base
–
New investors on platform
Added a number of funds to the
platform, welcomed two new
institutional investors, and diversified
the investor base with the addition
of high net worth and retail investors.
Dexus agreed with AMP to acquire the
AMP Capital real estate and domestic
infrastructure equity business comprising
up to $21.1bn2 funds under management.
People (5%)
–
Employee
engagement score
Targets
–
Engagement measures to align to external
benchmarking
3.8%
Achieved employee engagement
score 70%.
Safety (5%)
–
Safety audit score
and zero fatalities
from incidents
Threshold
85%
Safety score
Target
90%
Safety score
Maximum
95%
Safety score
6.3%
Dexus achieved a 99.7% safety audit
score at Dexus workplaces and zero
fatalities.
Zero fatalities
Environment
(5%)
–
Performance
relative to four ESG
benchmarks (PRI,
GRESB, DJSI & CDP)
Threshold
Strong
performance
across all
benchmarks
Target
Leading in
2 out of 3
benchmarks
Maximum
Leading in
3 out of 3
benchmarks
5.0%
Dexus retained its leading performance
on 2 out of 3 ESG benchmarks and
achieved a Gold Class distinction
in the S&P Global Sustainability
Yearbook 2022.
Group scorecard outcome
(% of maximum)
98.7%
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Link to remuneration
principles
Culture
Alignment to
performance
FY22 Result
Threshold
Target
Sustainable
Outperform
Simple and
transparent
Market
competitive
1 Reflects number of funds with a formal benchmark available.
2 Based on AMP Capital’s FUM as at 30 June 2022 net of the known transition of circa $10 billion of FUM from AMP Capital’s platform.
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Directors’ report
FY22 STI remuneration outcomes
6.2
The Board’s People and Remuneration Committee (PRC) reviewed FY22 STI outcomes against company performance and
determined that the Group scorecard outcome was 98.7% of target (or 94.8% of maximum). As part of the FY22 performance
assessment, the PRC considered whether any discretion on the STI outcomes should be applied, however the PRC was
comfortable that these results were consistent with Dexus’s financial and non-financial performance in FY22. As such, there was
no exercise of any discretion (upward or downward) to adjust the FY22 Group scorecard outcome.
Additionally, the Executive KMPs’ Individual Contribution Factors ranged from 105% to 120% and were determined with reference
to each Executive KMP’s personal scorecard of performance measures and leadership contribution during FY22.
This resulted in the Board awarding the CEO 94.8% of the maximum STI in FY22. For other Executive KMP, the STI awards ranged
82.9% to 94.8% of maximum STI.
The STI awards made to each Executive KMP with respect to their performance during the year ended 30 June 2022 are
provided below.
Executive KMP
Darren J Steinberg
Deborah C Coakley
Ross G Du Vernet
Kevin L George
Keir L Barnes
STI target
% of FR
STI max
% of FR
Actual FY22 STI
awarded $
% of target STI
awarded
% of maximum
STI awarded
% of maximum
STI forfeited
100%
100%
100%
100%
100%
125%
125%
125%
125%
125%
$1,895,040
$947,520
$947,520
$779,232
$651,420
118.4%
118.4%
118.4%
103.6%
118.4%
94.8%
94.8%
94.8%
82.9%
94.8%
5.2%
5.2%
5.2%
17.1%
5.2%
LTI awards which vested during FY22
6.3
On 1 July 2021, the second tranche of the FY18 LTI plan and the first tranche of the FY19 LTI plan were eligible for vesting for
participating Executive KMP.
Results of each performance measure within tranche 2 of the FY18 LTI plan over the four-year performance period:
Performance measure
Weighting
Minimum
(50% vests)
Maximum
(100% vests)
Group result
Vesting outcome
AFFO per security growth
Average ROCE
Overall result
50%
50%
3.0%
7.5%
4.0%
8.0%
3.9%
8.8%
94.7%
100%
97.4%
Results of each performance measure within tranche 1 of the FY19 LTI plan over the three-year performance period:
Performance measure
Weighting
Minimum
(50% vests)
Maximum
(100% vests)
Group result
Vesting outcome
AFFO per security growth
Average ROCE
Overall result
50%
50%
3.0%
8.5%
4.0%
9.5%
3.1%
9.2%
56.4%
82.5%
69.5%
90
Dexus 2022 Annual Report LTI awards which will vest in FY23
6.4
On 1 July 2022, the second tranche of the FY19 LTI plan and first tranche of the FY20 LTI plan were eligible for vesting for
participating KMP.
As foreshadowed in last year’s Remuneration Report, due to the impact of COVID-19, AFFO growth and ROCE performance was
adversely affected and as expected, vesting for LTI grants whose performance periods overlapped with COVID-19 have a lower
level of vesting than our historical LTI outcomes pre-COVID-19.
Results of each performance measure within tranche 2 of the FY19 LTI plan over the four-year performance period:
Performance measure
Weighting
Minimum
(50% vests)
Maximum
(100% vests)
Group result
Vesting outcome
AFFO per security growth
Average ROCE
Overall result
50%
50%
3.0%
8.5%
4.0%
9.5%
3.0%
9.3%
50%
90%
70%
Results of each performance measure within tranche 1 of the FY20 LTI plan over the three-year performance period:
Performance measure
Weighting
Minimum
(50% vests)
Maximum
(100% vests)
Group result
Vesting outcome
AFFO per security growth
Average ROCE
Overall result
50%
50%
3.5%
8.5%
4.5%
9.0%
1.5%
9.0%
0%
100%
50%
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Directors’ report
Strategic measures
6.5
Following the introduction of strategic measures (financial and non-financial) into the FY22 LTI, we provide an annual progress
update below on FY22 performance in the interests of transparency. The strategic measures selected for FY22 are key
objectives that the Board believes are fundamental to Dexus creating value for Security holders over the period ahead and
include a focus on navigating the challenges in the office market and maintaining a market leading position in ESG. These
strategic measures are aligned with the performance conditions for the CEO retention award.
While management has performed strongly against these objectives in FY22 and are currently on-track to achieve this
component of the LTI, given these measures are intended to be long-term, the strategic component will be holistically assessed
at the end of the 3 year (50%) and 4 year (50%) performance period for the FY22 LTI – the same time the other LTI metrics are
tested.
Category
Description
Key achievements in FY22
Funds Management
Diversification of capital
partners and investors, and
overall growth in Funds
Management
– We added listed funds, real estate securities funds and direct unlisted
funds to our platform and diversified investor base during the year
with the addition of high net worth investors, family offices and new
institutional investors
Transactions
Strategic acquisitions and
divestments of assets across the
Dexus investment portfolio
Developments
Progressing the Group
development pipeline
– We welcomed Cbus Super as a new investor in the $1.3 billion Jandakot
joint venture and securing Mercer Alternatives as a cornerstone investor
in the Dexus Real Estate Partnership 1
– As recently announced, we have entered into an agreement with AMP
to acquire AMP Capital’s real estate and domestic infrastructure equity
business, with up to $21.3 billion1 of funds under management. This
transaction expands and diversifies our Funds Management business
and investor base and provides a scalable platform for growth
– Continuing to grow our Healthcare platform to over $1.5 billion
(approximately increasing 25% year-on-year), to complement our
office, industrial and retail portfolios
– Completed $5.0 billion of group acquisitions and $5.7 billion of group
divestments (exchanged or settled post 1 July 2021)
– Expansion of our industrial platform (26% of our group funds under
management) with a $1.5 billion acquisition of industrial properties
alongside Dexus Industria REIT including Jandakot Airport Perth, Lot 2
884-928 Mamre Rd Kemps Creek NSW and 2 Maker Place Truganina
Victoria
– Key divestments include 140 & 150 George Street Parramatta, 309-321
Kent St Sydney, 383 Kent St Sydney, 12 Creek Street Brisbane and 201
Miller Street North Sydney
– Key acquisitions include Capital Square Tower 1, Perth, 116-130 Gilmore
Road Berrinba Queensland and industrial opportunities in Brooklyn,
Victoria and Chester Hill, New South Wales
– $17.7 billion development pipeline with over $500 million of committed
projects across the group industrial pipeline after completing 322,000
square metres in FY22
– Agreement with Atlassian to develop and invest in its new headquarters
in Sydney – a 40 level office tower occupied under a 15 year lease.
Construction is due to commence shortly and completion is expected
in 2026
– Securing unconditional Heads of Agreement with two major customers
across 23,800 square metres at Waterfront Brisbane
Sustainability
– Achieved net zero emissions for building operations across the group
managed portfolio by 30 June 2022
– Achieving an S&P Global Gold Class distinction in the S&P Global
Sustainability Yearbook 2022, and Dexus and Dexus Office Trust
receiving a 1st ranking in the Global Real Estate Sustainability
Benchmark’s 2021 Real Estate Assessment
1 Based on AMP Capital FUM as at 30 June 2022 net of known transition of circa $10 billion of FUM from AMP Capital’s platform which has reduced the
maximum potential price and consideration. Refer to ASX announcement dated 27 April 2022 for details relating to the AMP Capital acquisition.
92
Dexus 2022 Annual Report Actual remuneration based on performance and service through FY22
6.6
These values differ from the Executive statutory remuneration table (provided in section 11.1), which has been prepared in
accordance with statutory requirements and accounting standards.
Incentive awards have been calculated as follows:
– Deferred STI vested –The value of the deferred STI from prior years that vested on 1 July 2022 (being the number
of Security Rights that vested multiplied by the VWAP for the five days prior to the vesting date)
– LTI vested – The value of Performance Rights that vested in relation to the LTI on 1 July 2022 (being the number
of Performance Rights that vested multiplied by the VWAP for the five days prior to the vesting date)
Executive KMP
Base salary
($)
Superannuation
benefits
($)
Short-term
benefits
($)
STI cash
payment
($)
Deferred STI
vested
($)
LTI vested
($)
Total
($)
Darren J Steinberg
1,576,432
Deborah C Coakley
Ross G Du Vernet
Kevin L George
Keir L Barnes1
Alison C Harrop
776,432
776,432
728,332
394,824
182,083
23,568
23,568
23,568
23,568
17,676
11,784
6,116
1,421,280
374,065
1,185,514
4,586,975
2,639
2,665
7,292
1,532
2,209
710,640
164,848
231,818
1,909,945
710,640
584,424
488,565
175,353
172,562
63,996
277,852
1,966,510
277,852
1,794,030
-
966,593
-
156,668
271,767
624,511
1 Ms Keir Barnes was appointed as CFO on 1 October 2021. Her remuneration has been pro-rated to reflect that she was KMP for part of the year.
2 Ms Alison Harrop resigned from Dexus and ceased to be a KMP effective 30 September 2021. Her remuneration has been pro-rated to reflect that she
was KMP for part of the year.
7. FY22 remuneration framework
7.1 Fixed remuneration
The Group’s fixed remuneration strategy is to offer market competitive rates to attract and retain our experienced and
accomplished management team. Remuneration levels are set based on role size, complexity, scope and leadership
accountability. Dexus is committed to continue adhering to the principle of pay equity, which has achieved gender pay
equity across like-for-like roles. To determine fixed remuneration levels, Dexus benchmarks externally against A-REIT
ASX100 companies for directly comparable roles, as well as other large ASX peers for relevant roles.
As highlighted last year, Deborah Coakley (EGM, Funds Management) and Ross Du Vernet (CIO) received a 10.3% and 6.7%
increase effective on 1 July 2021, respectively. These changes aim to increase our market competitiveness against comparable
roles in the ASX100 A-REIT sector and ASX investment roles, and to reflect the rapid growth of our funds management business.
Given the tight labour market, where there have been a large number of executive movements in the real estate sector in the
past 12 months, we believe these increases place us in the best position to ensure continuity in our management team.
No other Executive KMP members received a fixed remuneration increase other than the legislated superannuation increase of
0.5% in FY22.
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Directors’ report
The annual fixed remuneration levels for Executive KMP in FY21 and FY22 were as follows:
Executive KMP
Darren J Steinberg
Deborah C Coakley
Ross G Du Vernet
Kevin L George
Keir L Barnes
Alison C Harrop
FY21 fixed remuneration ($)
FY22 fixed remuneration ($)
1,600,000
725,000
750,000
750,000
N/A
750,000
1,600,000
800,000
800,000
751,900
550,000
751,900
Ms Barnes was promoted from within the organisation to the role of CFO on 1 October 2021. At that time, and having regard to
the ongoing impacts of the COVID-19 pandemic on our tenants and our business, the Board provided her with a transitional
increase to remuneration.
During her time in role, Ms Barnes has exceeded performance expectations and, in line with our policy of pay equity and market
competitive rates, the Board has increased her fixed remuneration to $800,000. Whilst this is a significant increase, it brings her
fixed pay to just below the median of the CFOs in our ASX 21-70 and ASX 100 A-REIT peer groups, and her total remuneration
package (assuming maximum vesting of STI and LTI) to the 51st percentile of peers. Particularly in the current environment of
a tight labour market and escalating costs, the Board felt it was appropriate to make a significant one-off increase to this
member of the executive team.
To illustrate our approach to benchmarking, we set out data below for the CEO against the ASX21-70 and ASX100 A-REIT
peers. Mr Steinberg’s fixed and total remuneration sits at approximately the middle of the ASX peer group and his A-REIT peers,
acknowledging that he is one of the longest serving CEOs in the ASX100 A-REIT sector having held the role since 2012. The
CEO has not received a fixed remuneration increase since FY17 and will not receive an increase in FY23, given his remuneration
is currently market competitive.
Dexus vs Peer CEO Remuneration
$9,000
$8,000
$7,000
$6,000
$5,000
$4,000
)
s
’
0
0
0
$
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$1,300
$1,400
$1,500
$1,600
$1,700
$1,800
$1,900
$2,000
Fixed remuneration ($000’s)
ASX100 A REIT CEOs
Dexus CEO
ASX21-70CEOs – median
ASX21-70CEOs– 75th percentile
94
Dexus 2022 Annual Report
Short-Term Incentive (STI)
7.2
The STI plan is aligned to Security holder interests by:
– Encouraging Executives to achieve year-on-year performance improvement in a balanced and sustainable manner
– Mandatory deferral of 25% of each STI award into Security Rights deferred over one and two years, acting as a retention
mechanism and providing further alignment with Security holders’ interest
From FY23 onwards, changes will be made to the STI plan below, following the completion of an executive remuneration
framework review during the year. These changes are outlined in section 4.
75% Financial
Adjusted Funds From Operations (AFFO)
Office and funds management
financial outcomes (relative measures)
$
25% Non-Financial
Customer, culture, environmental
sustainability and safety measures
Short-Term Incentive (at risk)
Cash
Annual cash payment (75%)
Equity
Deferred Security Rights (25%)
12.5%
1 year
12.5%
2 years
Subject to behavioural gateway
hurdles and continued employment
during the vesting period.
Fixed
Remuneration
STI Target
Group Result on
Financial and
Non- financial
performance
measures
Individual
Contribution
Factor
Individual STI Outcome
(Capped at 125% of Target)
Each Executive KMP is awarded an individual STI outcome between zero and 125% of their target.
Individual STI outcomes are based on Group performance and an Individual Contribution Factor, subject to meeting a behavioural gateway.
The target STI opportunity for all Executive KMP is 100% of FR and maximum STI opportunity is 125% of FR (outperformance).
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Directors’ report
The additional terms of the STI plan are outlined below.
Term
Detail
Behavioural
gateway
For any STI award to pay out, a minimum standard of performance must be met by the individual via the
behavioural gateway. This seeks to align Executive KMP performance with Dexus’s values and expectations
of Executives.
The gateway requires that there is no material financial misstatement, no workplace fatality or actions that
are not in keeping with the commercial or ethical standards expected by the Board and our stakeholders.
Group scorecard
assessment
Group performance is measured against a scorecard comprising of financial (75%) and non-financial
(25%) measures.
Financial (75%)
These comprise the majority of the scorecard to ensure the overall focus of Executive KMP is on achieving
the financial hurdles outlined by the annual business plans.
– AFFO per security growth reflects the Group’s overall financial performance and cash flow
– Property and Funds Management financial measures incentivise each business area to achieve market
competitive results relative to industry benchmarks
Non-financial (25%)
The non-financial performance measures provide the Board with a mechanism to enhance the sustainability
of annual results and make sure Dexus’s environmental, people and customer objectives are reflected in
Executive KMP’s remuneration outcomes and ensure a balance with achieving financial outcomes.
Section 6.1 provides details on FY22 performance outcomes against financial and non-financial measures
in the scorecard.
Individual
contribution factor
(ICF)
The ICF enables Dexus to vary STI outcomes based on individual performance.
The ICF is a multiplier that applies to the Group scorecard result and can range between 0% and 125%. At the
end of the year, the CEO assesses Executive KMP performance to determine their ICF outcome (in the case of
the CEO, the Board Chair assesses his performance).
The ICF outcome is determined by assessing the performance of the individual in relation to the unique
challenges they faced that year, as well as individual performance objectives set at the start of the
performance year. These objectives can include a combination of strategic, people, safety and risk,
leadership, governance and financial measures that are specific to that Executive.
The overall STI outcome for any individual is capped at 125% of target.
Allocation
methodology
Face value.
The number of Security Rights granted to Executive KMP for the deferred portion of the STI is determined by
dividing the Deferred STI value by the VWAP of Dexus Securities 10 trading days either side of the first trading
day of the new financial year.
Distribution rights
For the portion of STI deferred as Security Rights, participants are entitled to the benefit of distributions paid
on the underlying Dexus Securities prior to vesting through the issue of additional Security Rights at the time
of vesting.
Leaver provisions
Forfeiture will occur should the participant’s employment terminate within six months of the grant date for any
reason, or if the participant voluntarily resigns or is terminated for cause prior to the vesting date.
Notwithstanding the above, if a participant’s employment is terminated and they are deemed a “Good
Leaver” (i.e. in circumstances of retirement, redundancy, death, illness, serious disability or permanent
incapacity, or other unforeseen circumstances), the PRC may recommend that the Board exercise its discretion
to vest some or all of the Security Rights at the time of termination.
Malus provisions
The Board has the discretion to adjust STI outcomes upward or downward, including to zero, where:
– The STI scorecard outcome does not reflect the actual participant’s performance or conduct, the
performance of the Executive KMP’s business unit or functional unit, or the overall Group performance such
as in the case of significant misconduct or material misstatement of performance
– There have been unintended consequences or outcomes as a result of the Executive KMP’s actions,
including where the original performance outcomes are later found to have been unrealised or not in line
with the original performance assessment
– The STI outcomes are materially misaligned with the experience of Security holders
96
Dexus 2022 Annual Report 7.3 Long-Term Incentive (LTI)
The LTI plan is aligned to Security holders’ interests in the following ways:
– Encourages Executives to make sustainable business decisions within the Board-approved strategy of the Group
– Aligns the financial interests of Executives participating in the LTI Plan with Security holders through exposure to Dexus
Securities
From FY23 onwards, changes will be made to the LTI plan below, following the completion of an executive remuneration
framework review during the year. These changes are outlined in Section 4.
We note that the outgoing CFO, Alison Harrop, did not participate in the FY22 LTI plan.
40% Absolute Total Security
Holder Return (ATSR)
40% Average Return on
Contributed Equity (ROCE)
20% Strategic measures
(financial and non-financial)
Long-Term Incentive (at risk)
Equity
Performance Rights with
allocation calculated at
Face Value
50%
3-year Performance Period
50%
4-year Performance Period
Fixed
Remuneration
LTI Opportunity
40% Average ROCE
40% ATSR
20% Strategic
(financial and non-financial)
Subject to behavioural standards
being met, hurdles and continued
employment during the vesting
period
Individual LTI Outcome
(Capped at 100% of
opportunity)
Each Executive KMP is allocated an LTI opportunity subject to performance hurdles. The award may vest between 50% to 100% of the
allocation amount based on performance. LTI awards do not vest if performance targets are not met with no retesting permitted.
The maximum LTI opportunity for the CEO is 150% of FR, and for other Executive KMP is 75% of FR.
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Directors’ report
The additional terms of the LTI plan are outlined below.
Term
Detail
Absolute Total Security Holder Return (ATSR) (40%)
In FY22, while the full economic impact of COVID-19 was uncertain, ATSR was introduced to ensure a link
between Security holder returns and Executive incentive outcomes, noting Dexus had used ROCE however,
had not used any TSR metric in the years leading up to the pandemic.
In FY23, the ATSR metric will be replaced with Relative Total Security Holder Return (RTSR) to reflect feedback
from external stakeholder discussions.
ATSR is measured using a compound annual growth rate (CAGR) with distributions considered to be reinvested
over the 3- and 4-year performance periods.
It is calculated as (closing price x distribution reinvestment factor / starting price) -1.
As disclosed in the 2021 Notice of Meeting, the Board set a “through the cycle” target range of 6-12% for
ATSR. Based on a range of factors at the start of FY22 including the macroeconomic environment, expected
distribution growth, Security price with reference to NTA and our status as a yield Security (rather than growth
Security), the ATSR vesting schedule for the FY22 LTI grant, set within the target range, is below.
Vesting schedule
Performance target
Vesting outcome
Below Threshold Performance
Threshold performance
Between Threshold and
Outperformance
<6% CAGR
6% CAGR
0%
50%
6-9% CAGR
Straight-line pro-rata vesting
Outperformance
9% CAGR
100%
Average ROCE (40%)
Consistent with prior years, average ROCE has been selected to ensure that management has a regard
for generating returns on Security holder equity through a combination of improving earnings and capital
management.
ROCE is measured as the simple average return on contributed equity, calculated as a percentage,
comprising AFFO together with the net tangible asset impact from completed developments, divided by the
weighted average contributed equity during the period. ROCE is measured as the per annum average at the
respective conclusion of the 3- and 4-year performance periods.
As disclosed previously, the “through the cycle” target range for ROCE is 7-10%. Based on a range of factors at
the start of FY22 including the economic environment and forecasted development pipeline, the ROCE vesting
schedule for the FY22 LTI grant, set within the target range, is below.
Vesting schedule
Performance target
Vesting outcome
Below Threshold Performance
Threshold performance
Between Threshold and
Outperformance
Outperformance
<7.5% p.a.
7.5% p.a.
7.5-9% p.a.
9% p.a.
0%
50%
Straight-line pro-rata vesting
100%
Strategic (financial and non-financial) (20%)
Strategic measures have been newly introduced in FY22 to ensure management remains focused on Dexus’s
long-term growth ambitions. To ensure the strategic measures are stretching and quantifiable, we have
outlined examples of the key targets set for management. We have also provided an annual progress update
of performance against these measures in Section 6.5, with a formal assessment taking place at the end of
the 3- and 4-year performance periods.
Performance
measures and
vesting schedule
98
Dexus 2022 Annual Report
The additional terms of the LTI plan are outlined below.
Term
Detail
Performance
measures and
vesting schedule
Strategic (financial and non-financial) (20%)
Strategic measures have been newly introduced in FY22 to ensure management remains focused on Dexus’s
long-term growth ambitions. To ensure the strategic measures are stretching and quantifiable, we have
outlined examples of the key targets set for management. We have also provided an annual progress update of
performance against these measures in Section 6.5, with a formal assessment taking place at the end of the
3 and 4-year performance periods.
Category
Description
Examples of assessment criteria
Funds
Management
Diversification of capital
partners and investors, and
overall growth in Funds
Management
– Number of new capital partners and funds
– Investor composition of Funds Management business
– Group funds under management growth
– Performance of funds against benchmarks and/or hurdle
rates
Transactions
Strategic acquisitions
and divestments of
assets across the Dexus
investment portfolio
– Volume and value of completed transactions
– Original business case met or exceeded for transactions
– Achievement of portfolio and fund objectives via
transactional activity
Developments
Progressing the Group
development pipeline
– Milestone delivery for committed major projects
– Amount of income growth attributable to completed
projects
– Successful conversion of non-committed Group pipeline
– Securing development partnerships with capital partners
and funds
Allocation
methodology
Face value.
The number of Performance Rights granted is equal to the participant’s LTI opportunity (based on a
percentage of fixed remuneration) divided by the VWAP of Dexus Securities 10 trading days either side of the
first trading day of the new financial year.
Distribution rights
No distribution rights on underlying Dexus Securities during the performance period prior to vesting.
Leaver provisions
Forfeiture will occur should the participant’s employment terminate within 12 months of the grant date for any
reason, or if the participant voluntarily resigns or is terminated for cause prior to the vesting date.
Notwithstanding the above, if a participant’s employment is terminated and they are deemed a “Good
Leaver” (i.e. in circumstances of retirement, redundancy, death, illness, serious disability or permanent
incapacity, or other unforeseen circumstances), the PRC may recommend that the Board exercise its discretion
to vest some or all of the Performance Rights at the time of termination.
Malus provisions
The Board has the discretion to adjust LTI outcomes upward or downward, including to zero, where:
– The LTI outcome does not reflect the participant’s performance or conduct, the performance of the
Executive KMP’s business unit or functional unit, or the overall Group performance, such as in the case of
significant misconduct or material misstatement of performance
– There have been unintended consequences or outcomes as a result of the Executive KMP’s actions,
including where the original performance outcomes are later found to be unrealised or not in line with the
original performance assessment
– The LTI outcome is materially misaligned with the experience of Security holders
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Minimum Security holding guidelines for Executive KMP
7.4
A minimum Security holding guideline was introduced on 1 July 2018, with all Executive KMP and Group Management
Committee (GMC) members targeting to attain the minimum Security holding at the later of/within five years of this date,
or their appointment to the GMC. The value is calculated by reference to the 12-month average fixed remuneration for the
relevant financial year of the guideline’s introduction or appointment date.
The CEO is expected to hold Dexus Securities to the value of 150% of FR and Other Executive KMP are expected to hold Dexus
Securities to the value of 75% of FR.
8. Executive KMP contractual agreements
Outgoing CFO’s arrangements
8.1
Ms. Alison Harrop ceased in her role as CFO on 30 September 2021 in-line with the ASX announcement made on 1 September
2021. In addition to her contractual entitlements, the Board determined that she would retain her deferred STI Security Rights
and unvested LTI Performance Rights (subject to performance conditions being met) to vest in the ordinary course. There was
no accelerated vesting of awards on termination.
Terms of Executive KMP service agreements
8.2
Executive KMP service agreements detail the individual terms and conditions of employment applying to Executive KMP, with
the termination scenarios and other key employment terms detailed below.
CEO
Other Executive KMP
Employment agreement
An ongoing Executive Service Agreement.
An ongoing Executive Service Agreement or
individual contract.
Resignation by
the Executive
6-month notice period.
3-month notice period.
The Group may choose to place the CEO on leave
or make a payment in lieu of notice at the Board’s
discretion.
The Group may choose to place the Executive
on leave or make a payment in lieu of notice at
the Board’s discretion.
All unvested incentives awards are forfeited.
In the case of resignation through mutual agreement (e.g. retirement), the Board has the ability to treat
the Executive KMP as a “Good Leaver”, which may result in the Executive KMP retaining some or all of
the unvested deferred STI or LTI grants.
Termination by the
Group without cause
If the Group terminates an Executive KMP without cause, they are entitled to a combined maximum
notice and severance payment of 12 months’ fixed remuneration. The Board may (in its absolute
discretion) also approve a pro-rata STI payment.
Depending on the circumstances, the Board has the ability to treat the Executive as a “Good Leaver”,
which may result in the Executive retaining some or all of the unvested incentive awards.
Termination by the
Group with cause
No notice or severance is payable. All unvested incentive awards are forfeited.
100
Dexus 2022 Annual Report 9. Remuneration governance
The diagram below displays the interaction between the Board, Committees, management and external advisors, when
discussing remuneration strategy, framework and outcomes.
Audit Committee
Review the calculation of
financial performance measures
within incentive plans.
Independent external advisors
The Board’s independent remuneration
advisor, SW Corporate, was engaged to
conduct a remuneration framework review
in FY22. This included provision of market
practice insights and trends, benchmarking
data and indicative quantum modelling in
relation to Executive remuneration. SW
Corporate did not make any remuneration
recommendations in FY22.
Board
Approves and has oversight of
Dexus’s Remuneration Policy, NED
and Executive KMP remuneration
and culture indicators.
People & Remuneration
Committee
Members
Penny Bingham-Hall
The Hon. Nicola Roxon
Richard Sheppard
Risk Committee
Advises the PRC of material risk issues,
behaviours and/or compliance breaches.
Two joint meetings are held each
year with the PRC to review Risk
Culture frameworks, metrics and
audit information.
Management
Propose Executive appointments,
succession plans, policies, remuneration
structures and remuneration outcomes
to the PRC for review and approval or
recommendation to the Board.
People & Remuneration Committee (PRC)
The PRC is responsible for developing the remuneration strategy, framework and policies for NEDs, Executive KMP and the GMC
for Board approval.
The responsibilities of the PRC are outlined in the PRC’s Terms of Reference, available at www.dexus.com/boardcommittees,
which is reviewed and approved annually by the Board. The primary accountabilities of the PRC are:
– Reviewing and recommending to the Board for approval Dexus’s Remuneration practices, which covers Executive KMP, GMC
members and all other Dexus employees
– Reviewing and approving the Group Scorecard, annual performance objectives and KPIs of the CEO and GMC members
– Recommending to the Board for approval CEO and GMC members’ remuneration and incentive payments
– Reviewing and approving aggregate fixed remuneration changes and annual incentive payments for all
– Reviewing and recommending to the Board for approval the Code of Conduct and other key policies
– Reviewing and recommending to the Board for approval the Diversity Principles, including identification of measurable
objectives for achieving gender diversity and progress towards those objectives
– Reviewing and approving processes and information on talent assessments, leadership development and succession
planning
– Reviewing processes and metrics for measuring culture and behaviours, including risk culture areas
– Overseeing general people and culture practices including the risk of gender or other bias in remuneration of Directors,
GMC members and other employees
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Directors’ report
Members
The PRC members have experience in remuneration, people, leadership, human resources, risk management and compliance
which enables effective oversight and governance of Dexus’s remuneration framework.
Meetings
The PRC is required to meet at least three times per year. In FY22, the PRC met 11 times to discuss and review remuneration, and
people and culture related matters.
Committee papers are provided to all PRC members prior to meetings to enable timely, considered and effective decision
making. The PRC may request additional information from management or external advisors where required.
Remuneration decision making
For remuneration concerning the Executive KMP, not including the CEO, the CEO’s input was sought to help guide discussions
and provide input on Executive KMP performance throughout the year. The CEO’s remuneration was considered separately to
manage conflicts of interest.
The PRC uses a range of inputs when assessing Executive KMP performance and determining remuneration outcomes:
– Financial performance – measured using audited financial measures
– Management providing detailed examples of how non- financial outcomes have been achieved
– Demonstrated leadership of the Dexus values and behaviours
– External remuneration benchmarking and market practice provided by independent external advisors
– Under certain circumstances, the PRC and Board may adjust proposed remuneration outcomes for Executive KMP and the
GMC or require a forfeit of unvested Security Rights or Performance Rights issued under the Dexus LTI or STI Plans
10. NED remuneration
NED fees are reviewed annually by the Committee using information from a variety of sources, including:
– Publicly available remuneration data from ASX-listed companies with similar market capitalisation and complexity
– Publicly available remuneration data from ASX 100 A-REITs
– Information supplied by external remuneration advisors (where required)
Other than the Chair, who receives a single base fee, NEDs receive a base fee plus additional fees for membership of Board
Committees. NEDs do not participate in incentive plans or receive any retirement benefits other than statutory superannuation
contributions.
The total fees paid to NEDs for the year ended 30 June 2022 remained within the aggregate fee pool of $2,500,000 per annum,
which was approved by Security holders at the AGM in October 2017.
10.1 Fee structure
The Board fee structure (inclusive of statutory superannuation contributions) for FY21 and FY22 is provided below, noting
that the Board made the decision to increase FY22 Board and Committee fees by approximately 2% and the Chair fee by
approximately 5%, which reflects the Board’s desire to make incremental changes to NED fees in-line with general market
movements. The fee increase for the Dexus Wholesale Property Limited (DWPL) Board was larger ($15,000), to reflect the
increase in workload following the merger between the Dexus Wholesale Property Fund (DWPF) and the AMP Capital Diversified
Property Fund in 2021, significantly increasing the size of the DWPF.
Prior to this, NED fees were last increased in FY20. There are no NED fee increases proposed for FY23.
102
Dexus 2022 Annual Report Base fees
Board Risk Committee
Board Audit Committee
Board Nomination Committee2
Board People & Remunerations Committee
Board Environmental, Social & Governance Committee
DWPL Board
Year
FY22
FY21
FY22
FY21
FY22
FY21
FY22
FY21
FY22
FY21
FY22
FY21
FY22
FY21
Chair
($)
475,0001
450,000
35,700
35,000
35,700
35,000
N/A
N/A
35,700
35,000
35,700
35,000
N/A
N/A
Member
($)
178,500
175,000
17,850
17,500
17,850
17,500
N/A
N/A
17,850
17,500
17,850
17,500
50,000
35,000
1 The Board Chair receives a single fee for service, including service on Board Committees.
2 No fees applied to the Board Nomination Committee in FY22.
10.2 Minimum Security holding requirement and NED fee salary sacrifice plan
NEDs are expected to hold the equivalent of 100% of their base fees in Dexus Securities, to be acquired over five years from
appointment date. To further facilitate NEDs’ ability to acquire Dexus equity, NEDs may sacrifice a percentage of their pre-tax
base fees in return for a grant of Rights to the equivalent value.
The minimum percentage a NED can sacrifice is 20% of base fees, up to a maximum of 100%. The number of Rights allocated
is calculated based on the VWAP of Securities over the first 5 trading days of the Trading Window immediately following the
release of full-year results. Rights vest in two equal tranches over the subsequent 6-month and 12-month period.
10.3 Security movements
The table below outlines the movement in NED Security holdings for FY22.
NED
Richard Sheppard
Patrick Allaway
Penny Bingham-Hall
Tonianne Dwyer
Mark H Ford
Warwick M Negus
The Hon. Nicola Roxon
Number of Securities
held at 1 July 2021
Movement
Number of Securities
held at 30 June 2022
Meets minimum
Requirement
100,000
20,000
32,773
22,500
10,000
-
21,297
–
–
–
–
7,339
25,000
3,372
100,000
20,000
32,773
22,500
17,339
25,000
24,669
Yes
Yes
Yes
Yes
Yes
Yes
Yes
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10.4 NED statutory remuneration
This summary of the actual cash and benefits received by each NED for the year ended 30 June 2022 is prepared in
accordance with AASB 124 Related Party Disclosures.
NED
Current
W Richard Sheppard
Patrick Allaway
Penny Bingham-Hall2
Tonianne Dwyer
Mark H Ford
Warwick M Negus3
The Hon. Nicola Roxon4
Former
Peter St George5
John C Conde AO6
Total
Year
FY22
FY21
FY22
FY21
FY22
FY21
FY22
FY21
FY22
FY21
FY22
FY21
FY22
FY21
FY22
FY21
FY22
FY21
FY22
FY21
Short term
benefits1
($)
Post-employment
benefits
(superannuation)
$
Other long-term
benefits
$
463,216
428,306
194,727
188,994
232,050
227,500
260,556
242,985
258,482
235,299
209,332
66,591
226,776
227,500
–
191,781
–
35,821
1,845,139
1,844,776
11,784
21,694
19,473
17,954
–
–
23,568
21,694
23,568
21,368
4,868
6,326
5,274
–
–
18,219
–
3,403
88,535
110,658
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
Total
$
475,000
450,000
214,200
206,948
232,050
227,500
284,124
264,679
282,050
256,667
214,200
72,917
232,050
227,500
–
210,000
–
39,224
1,933,674
1,955,435
Includes Director fees and insurance contributions.
1
2 Penny Bingham-Hall received a superannuation guarantee exemption in FY21.
3 Warwick M Negus joined the Board on 1 February 2021. His remuneration has been pro-rated to reflect he served part of FY21 as KMP.
4 Nicola Roxon’s FY21 short term benefits include a salary sacrifice amount under the NED fee sacrifice program and a superannuation guarantee
exemption for FY21.
5 Peter St George retired from the Board on 30 June 2021.
6 John Conde retired from the Board on 2 September 2020. The figures in the above table represent earnings for the portion of the year that John Conde
was a director of the Board.
104
Dexus 2022 Annual Report 11. Statutory disclosures
Statutory remuneration
11.1
The total remuneration paid to Executive KMP for FY21 and FY22 is calculated in accordance with AASB 124 Related Party
Disclosures.
Short term benefits
Long term benefits
Security-based benefits
Annual
leave
movement1
STI
award
Other
short
term
benefits
Super-
annuation
benefits
Termination
benefits
Long
service
leave
movement1
Deferred
STI plan
accrual
LTI plan
accrual
Once-off
incentive
awards
accrual2
Total
Executive
KMP
Year
Base
salary
Current
Darren J
FY22
1,576,432
1,421,280
39,458
6,116
23,568
Steinberg
FY21
1,578,306
1,500,000
9,053
6,489
21,694
Deborah
FY22
776,432
710,640
37,450
2,639
23,568
C Coakley
FY21
703,308
679,688
19,636
2,950
21,694
Ross G
FY22
776,432
710,640
34,426
2,665
23,568
Du Vernet
Kevin L
George
Keir L
Barnes3
Former
FY21
728,306
703,125
-21,049
2,621
21,694
FY22
728,332
584,424
9,898
7,292
23,568
FY21
728,306
703,125
-1,498
7,190
21,694
FY22
394,824
488,565
18,222
1,532
17,676
FY21
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
41,843
441,946
759,204
1,025,116
5,334,963
45,344
404,713
1,561,533
78,596
5,205,728
30,362
208,170
229,826
368,224
2,387,311
23,394
173,424
335,574
199,749
2,159,417
29,479
213,154
233,084
368,224
2,391,672
20,662
189,712
368,749
199,749
2,213,569
21,314
195,478
259,409
18,778
182,974
363,566
–
–
-
81,685
100,921
–
–
25,348
33,046
–
–
–
–
–
–
1,829,715
2,024,135
1,103,425
–
641,428
1,905,281
Alison C
FY22
182,083
16,900
2,209
11,784
370,058
Harrop4
FY21
728,306
597,375
13,924
5,847
21,694
–
13,891
167,191
357,053
Total
FY22
4,434,535
3,915,549
156,354 22,453
123,732
370,058
122,998
1,165,781 1,615,490
1,761,564
13,688,514
FY21
4,466,532
4,183,313
20,066 25,097
108,470
–
122,069
1,118,014 2,986,475
478,094
13,508,130
1 The accounting value of leave movements may be negative; for example, where an Executive’s annual leave balance decreases as a result of taking
more than the 20 days’ annual leave they accrue during the current year. Long service leave accrues from five years of service and the accrual may
seem high in the first year.
2 The once-off incentive awards reflect the CEO Incentive Award and Retention Equity Award disclosed in the 2021 Remuneration Report.
3 Ms. Keir Barnes was appointed as CFO on 1 October 2021. Her FY22 remuneration has been pro-rated to reflect that she was KMP for part of the year.
4 Ms. Alison Harrop was CFO until 30 September 2021. Her FY22 remuneration has been pro-rated to reflect that she was KMP for part of the year.
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11.2 Deferred STI and LTI awards which vested during FY22
The summary below outlines the number of Rights which vested under the Deferred STI and LTI plans during FY221.
The vesting date for all Rights was 1 July 2021.
Executive KMP
Plan name
Grant date3
Tranche
Darren J Steinberg
Deferred STI
LTI
Deborah C Coakley
Deferred STI
LTI
Ross G Du Vernet
Deferred STI
LTI
Kevin L George
Deferred STI
LTI
Alison C Harrop
Deferred STI
LTI
12/12/19
22/12/20
06/12/17
16/11/18
12/12/19
22/12/20
06/12/17
16/11/18
12/12/19
22/12/20
06/12/17
16/11/18
12/12/19
22/12/20
06/12/17
16/11/18
12/12/19
22/12/20
06/12/17
16/11/18
2
1
2
1
2
1
2
1
2
1
2
1
2
1
2
1
2
1
2
1
Number of Rights
which vested
Market value at
vesting ($)2
20,366
220,657
15,504
167,980
95,866
1,038,670
84,433
914,798
7,637
82,744
6,541
70,869
17,226
186,637
15,831
171,523
9,547
103,438
7,268
78,746
20,970
227,202
19,789
214,406
8,401
91,021
6,978
75,604
20,970
227,202
19,789
214,406
8,121
87,988
6,978
75,604
18,724
202,867
19,129
207,255
1 Or during the period for which the Executive was a KMP if shorter.
2 Market value at vesting is the VWAP of DXS Securities for the 5-day period before the vesting date.
3 The Grant Dates disclosed are updated to reflect the Grant Date as defined by AASB 2 Share-based Payment.
106
Dexus 2022 Annual Report 11.3 Deferred STI in respect of FY22 STI
The below details the number of Security Rights to be granted to Executive KMP based on performance during FY22 under the
Deferred STI plan, using a VWAP of $9.1390.
Executive KMP
Darren J Steinberg
Deborah C Coakley
Ross G Du Vernet
Kevin L George
Keir L Barnes
Value of
deferred STI
$
Number of
Security
Rights
granted
1st
vesting
date
50%
2nd
vesting
date
50%
473,760
236,880
236,880
194,807
162,855
51,839
25,919
25,919
21,316
17,819
1 July
2023
1 July
2024
11.4 LTI grant with respect to the FY22 LTI
The table below details the number of Performance Rights3 granted to Executive KMP on 29 November 20214 under the FY22 LTI
plan.
Grant
value as
a %
of FR
Performance
measure
Number of
Performance
Rights granted
VWAP
value per
Performance
Right
Fair value
per
Performance
Right1
Maximum
total value of
grant2
1st
vesting
date
50%
2nd
vesting
date
50%
Executive
KMP
Darren J
Steinberg
150%
ROCE
ATSR
Strategic
measures
Deborah C
75%
ROCE
Coakley
Ross G
Du Vernet
Kevin L
George
Keir L
Barnes
ATSR
Strategic
measures
75%
ROCE
ATSR
Strategic
measures
75%
ROCE
ATSR
Strategic
measures
75%
ROCE
ATSR
Strategic
measures
90,002
90,002
45,001
22,500
22,500
11,251
22,500
22,500
11,251
21,148
21,148
10,573
15,469
15,469
7,734
$10.67
$10.67
$10.67
$10.67
$10.67
$10.67
$10.67
$10.67
$10.67
$10.67
$10.67
$10.67
$10.67
$10.67
$10.67
$9.30
837,019
$3.18
286,206
$9.30
418,509
$9.30
209,250
$3.18
71,550
$9.30
104,634
$9.30
209,250
$3.18
71,550
$9.30
104,634
$9.30
196,676
$3.18
$9.30
$9.30
$3.18
$9.30
67,251
98,329
143,862
49,191
71,926
1 July
2024
1 July
2025
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1 Fair value for the LTI reflects the average valuation of Tranche 1 ($9.53) and Tranche 2 ($9.07) for ROCE and Strategic Measures and the average
valuation of Tranche 1 ($3.30) and Tranche 2 ($3.06) for ATSR. Valuations were provided by EY under the Black-Scholes Analytic model.
2 The maximum total value of the grant reflects the numbers of Performance Rights granted multiplied by the fair value per Right.
3 Numbers reflect actual performance rights granted to KMP.
4 The Grant Dates disclosed are updated to reflect the Grant Date as defined by AASB 2 Share-based Payment.
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Directors’ report
11.5 LTI grant with respect to the FY23 LTI
The table below details the number of Performance Rights granted to Executive KMP under the FY23 LTI plan, noting the CEO
grant is subject to Security holder vote at the 2022 Annual General Meeting and acceptance of rights by KMP.
Grant
value
as a %
of FR
Performance
measure
Number of
Performance
Rights granted
VWAP
value per
Performance
Right
Fair value
per
Performance
Right1
Maximum
total
value of
grant2
Vesting
date 50%
Vesting
date 50%
Executive
KMP
Darren J
Steinberg
150%
ROCE
RTSR
Strategic
measures
Deborah C
120%
ROCE
Coakley
Ross G
Du Vernet
Kevin L
George
Keir L
Barnes
RTSR
Strategic
measures
120%
ROCE
RTSR
Strategic
measures
120%
ROCE
RTSR
Strategic
measures
120%
ROCE
RTSR
Strategic
measures
105,044
105,044
52,522
42,018
42,018
21,008
42,018
42,018
21,008
39,491
39,491
19,746
42,018
42,018
21,008
$9.14
$9.14
$9.14
$9.14
$9.14
$9.14
$9.14
$9.14
$9.14
$9.14
$9.14
$9.14
$9.14
$9.14
$9.14
$7.46
$2.82
$7.46
$7.46
$2.82
$7.46
$7.46
$2.82
$7.46
$7.46
$2.82
$7.46
$7.46
$2.82
$7.46
783,103
295,699
391,552
313,244
118,281
156,615
313,244
118,281
156,615
294,405
111,167
147,206
313,244
118,281
156,615
1 July
2025
1 July
2026
1 Fair value for the LTI reflects the average valuation of Tranche 1 ($7.64) and Tranche 2 ($7.27) for ROCE and Strategic Measures and the average valuation
of Tranche 1 ($2.98) and Tranche 2 ($2.65) for RTSR. Valuations were provided by EY under the Black-Scholes Analytic model.
2 The maximum total value of the grant reflects the numbers of Performance Rights granted multiplied by the fair value per Right.
108
Dexus 2022 Annual Report 11.6 Executive KMP unvested Rights outstanding
The table below shows the number of unvested Rights held by Executive KMP as at 30 June 2022 under the Deferred STI and
LTI plans. The STI and LTI awards in respect of which the elements below are deferred elements which were disclosed in prior
year Remuneration Reports.
Executive KMP
Plan name
Grant date1
Vesting date
Tranche
Number of Rights
Deferred STI
Darren J
Steinberg
LTI
Retention Award
Deferred STI
Deborah C
Coakley
LTI
Retention Award
Deferred STI
Ross G
Du Vernet
LTI
Retention Award
22.12.20
29.11.21
29.11.21
16.11.18
12.12.19
12.12.19
22.12.20
22.12.20
29.11.21
29.11.21
01.06.21
22.12.20
29.11.21
29.11.21
16.11.18
12.12.19
12.12.19
22.12.20
22.12.20
29.11.21
29.11.21
14.12.20
14.12.20
22.12.20
29.11.21
29.11.21
16.11.18
12.12.19
12.12.19
22.12.20
22.12.20
29.11.21
29.11.21
14.12.20
14.12.20
01.07.22
01.07.22
01.07.23
01.07.22
01.07.22
01.07.23
01.07.23
01.07.24
01.07.24
01.07.25
01.07.24
01.07.22
01.07.22
01.07.23
01.07.22
01.07.22
01.07.23
01.07.23
01.07.24
01.07.24
01.07.25
14.12.23
14.12.24
01.07.22
01.07.22
01.07.23
01.07.22
01.07.22
01.07.23
01.07.23
01.07.24
01.07.24
01.07.25
14.12.23
14.12.24
2
1
2
2
1
2
1
2
1
2
1
2
1
2
2
1
2
1
2
1
2
1
2
2
1
2
2
1
2
1
2
1
2
1
2
14,770
23,438
23,438
121,487
89,047
89,047
124,381
124,380
112,503
112,502
356,335
6,231
10,620
10,620
22,778
18,783
18,783
28,180
28,179
28,126
28,125
76,740
76,740
6,923
10,987
10,986
28,473
20,870
20,870
29,152
29,151
28,126
28,125
76,740
76,740
109
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Directors’ report
Executive KMP
Plan name
Grant date1
Vesting date
Tranche
Number of Rights
Deferred STI
Kevin L George
LTI
Keir L Barnes
Deferred STI
LTI
Other2
Deferred STI
Alison C Harrop
LTI
22.12.20
29.11.21
29.11.21
16.11.18
12.12.19
12.12.19
22.12.20
22.12.20
29.11.21
29.11.21
22.12.20
29.11.21
29.11.21
29.11.21
29.11.21
22.12.20
22.12.20
22.12.20
29.11.21
29.11.21
16.11.18
12.12.19
12.12.19
22.12.20
22.12.20
01.07.22
01.07.22
01.07.23
01.07.22
01.07.22
01.07.23
01.07.23
01.07.24
01.07.24
01.07.25
01.07.22
01.07.22
01.07.23
01.07.24
01.07.25
01.07.22
01.07.23
01.07.22
01.07.22
01.07.23
01.07.22
01.07.22
01.07.23
01.07.23
01.07.24
2
1
2
2
1
2
1
2
1
2
2
1
2
1
2
1
2
2
1
2
2
1
2
1
2
6,646
10,987
10,986
28,473
20,870
20,870
29,152
29,151
26,435
26,434
2,500
4,037
4,037
19,336
19,336
7,774
7,773
6,646
9,334
9,334
27,524
20,870
20,870
29,152
29,151
1 The Grant Dates disclosed are updated to reflect the Grant Date as defined by AASB 2 Share-based Payment.
2 Other refers to unvested plans (includes KTEP, however does not include DSTI or LTI) granted to executive before becoming a KMP. The Key Talent Equity
Plan (KTEP) is a mid-term incentive plan which aims to retain individuals identified as key talent and further align them to the interests of Dexus and its
investors through increased security holding. KTEP participants are granted performance rights that do not receive distributions until vesting occurs. The
plan vests in two tranches equally over a two and three-year period.
110
Dexus 2022 Annual Report 11.7 Equity investments
The table below outlines the movement in Executive KMP’s Security holdings and deferred Rights for FY22.
Held at 1 July 20211
Net change
Held at 30 June 20224
Securities
Deferred
Rights
Total
balance
Securities
Deferred
Rights
Total
balance
Securities
Deferred
Rights
Total
balance
Market value
as at 30 June
20222 $
Meets
minimum
requirement3
990,998
48,091
1,039,089
216,169
13,555
229,724
1,207,167
61,646
1,268,813
$ 11,609,766
88,303
172,898
261,201
20,454
8,053
28,507
108,757
180,951
289,708
$ 2,650,857
101,844
176,023
277,867
32,569
6,353
38,922
134,413
182,376
316,789
$ 2,898,651
118,966
20,945
139,911
-28,862
7,674
-21,188
90,104
28,619
118,723
$ 1,086,327
Yes
Yes
Yes
Yes
2,811
20,548
23,359
-
5,573
5,573
2,811
26,121
28,932
$ 264,731
N/A
88,507
20,690
109,197
52,952
4,624
57,576
141,459
25,314
166,773
$ 1,525,990
N/A
Darren J
Steinberg
Deborah C
Coakley
Ross G
Du Vernet
Kevin L
George
Keir L
Barnes
Alison C
Harrop
1 Held at the late of 1 July 2021 or at time the time of appointment to KMP.
2 Market value as at 30 June 2022 is the VWAP of Dexus Securities for the 5-day period up to and including 30 June 2022 being $9.1501.
3 A minimum Security holding guideline was introduced on 1 July 2018, with all Executive KMP expected to attain the minimum Security holding within five
years of this date or of their appointment to GMC. The following Securities are included in the balance for the purpose of the guideline (1) Any Dexus
Securities that the Executive or their related person or entity hold (e.g. Family Trust), (2) Securities that the Executive acquires on vesting of awards
granted under Dexus’s equity incentive plans; and (3) Unvested equity granted that the Executive holds under Dexus’s equity incentive plans which are
not subject to performance hurdles (e.g. deferred short-term incentives and Retention Equity Award for CIO and EGM, Funds Management).
4 Or at such time the Executive ceased being a KMP.
11.8 Loans
No loans were provided to KMP or related parties.
11.9 Other transactions
There were no transactions involving an equity instrument (other than share based payment compensation) to KMP or
related parties.
11.10 Dexus Securities Trading Policy
The Securities Trading Policy provides guidance to Directors, Employees (including KMP), Contractors and Associates for
ongoing compliance with legal obligations relating to trading or investing in financial products managed by Dexus.
The Policy prohibits employees from trading in financial products while they are in possession of Inside Information (non-public
price sensitive information) and hedging their exposure to unvested Dexus Securities. Trading in Dexus Securities or related
products is only permitted with the permission of the Chair (for Directors and the CEO) or the CEO (for Other Executive KMP).
The Group also has Conflict of Interest and Insider Trading policies in place which extend to family members and associates
of employees.
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111
Directors’ report
112
Dexus 2022 Annual Report Financial
report
Contents
Directors’ Report
Auditor’s Independence Declaration
Consolidated Statement of Comprehensive Income
Consolidated Statement of Financial Position
Consolidated Statement of Changes in Equity
Consolidated Statement of Cash Flows
Notes to the Consolidated Financial Statements
Group performance
Note 1 Operating segments
Note 2
Property revenue and expenses
Note 3 Management operations, corporate and administration expenses
Note 4 Finance costs
Note 5
Taxation
Note 6
Earnings per unit
Note 7 Distributions paid and payable
Property portfolio assets
Note 8
Investment properties
Note 9
Investments accounted for using the equity method
Note 10 Inventories
Note 11 Non-current assets classified as held for sale
Note 12 Financial assets at fair value through profit or loss
Capital and financial risk management and working capital
Note 13 Capital and financial risk management
Note 14 Lease liabilities
Note 15 Interest bearing liabilities
Note 16 Commitments and contingencies
Note 17 Contributed equity
Note 18 Reserves
Note 19 Working capital
Other disclosures
Note 20 Intangible assets
Note 21 Business combination
Note 22 Audit, taxation and transaction service fees
Note 23 Cash flow information
Note 24 Security-based payments
Note 25 Related parties
Note 26 Parent entity disclosures
Note 27 Subsequent events
Directors’ Declaration
Independent Auditor’s Report
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125
129
129
135
136
136
137
139
139
141
141
146
154
155
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Financial report
Directors’ Report
The Directors of Dexus Funds Management Limited (DXFM) as Responsible Entity of Dexus Property Trust (DPT or the Trust)
present their Directors’ Report together with the Consolidated Financial Statements for the year ended 30 June 2022. The
Consolidated Financial Statements represents DPT and its consolidated entities, which are referred to as Dexus (DXS or the
Group).
The Trust, together with Dexus Operations Trust (DXO), form the Dexus stapled security.
Directors and Secretaries
Directors
The following persons were Directors of DXFM at all times during the year and to the date of this Directors’ Report, unless
otherwise stated:
Directors
W Richard Sheppard, BEc (Hons), FAICD
Patrick N J Allaway, BA/LLB
Penny Bingham-Hall, BA (Industrial Design), FAICD, SF Fin
Tonianne Dwyer, BJuris (Hons), LLB (Hons)
Mark H Ford, Dip. Tech (Commerce), CA, FAICD
Warwick Negus, BBus (UTS), MCom (UNSW), SF Fin
The Hon. Nicola L Roxon, BA/LLB (Hons), GAICD
Darren J Steinberg, BEc, FRICS, FAPI, FAICD
Appointed
1 January 2012
1 February 2020
10 June 2014
24 August 2011
1 November 2016
1 February 2021
1 September 2017
1 March 2012
Company Secretaries
The names and details of the Company Secretaries of DXFM
as at 30 June 2022 are as follows:
Scott Mahony BBus (Acc), Grad Dip (Business
Administration), MBA (eCommerce), Grad Dip (Applied
Corporate Governance) FGIA, FCIS
Appointed: 5 February 2019
Scott is the Head of Governance of Dexus and is responsible
for the development, implementation and oversight of
Dexus’s governance policies and practices. Prior to being
appointed the Head of Governance in 2018, Scott had
oversight of Dexus’s risk and compliance programs.
Scott joined Dexus in October 2005 after two years with
Commonwealth Bank of Australia as a Senior Compliance
Manager. Prior to this, Scott worked for over 11 years for
Assure Services & Technology (part of AXA Asia Pacific) where
he held various management roles.
Brett D Cameron LLB/BA (Science and Technology),
GAICD, FGIA
Appointed: 31 October 2014
Brett is the General Counsel and a Company Secretary of
Dexus companies and is responsible for the legal function,
company secretarial services and compliance and
governance systems and practices across the Group.
Prior to joining Dexus, Brett was Head of Legal for Macquarie
Real Estate (Asia) and has held senior legal positions at
Macquarie Capital Funds in Hong Kong and Minter Ellison in
Sydney and Hong Kong. Brett has 24 years' experience as
inhouse counsel and in private practice in Australia and in
Asia, where he worked on real estate structuring and
operations, funds management, mergers and acquisitions,
private equity and corporate finance across a number of
industries.
Brett graduated from The University of New South Wales and
holds a Bachelor of Laws and a Bachelor of Arts (Science and
Technology) and is a member of the Law Societies of New
South Wales and Hong Kong. Brett is also a graduate of the
Australian Institute of Company Directors and a Fellow of the
Governance Institute of Australia.
114
114
Dexus 2022 Annual Report
Attendance of Directors at Board Meetings and Board Committee Meetings
The number of Directors’ meetings held during the year and each Director’s attendance at those meetings is set out in the
table below. The Directors met 18 times during the year, of which six were a special meeting.
Main meetings held
Main meetings
attended
Special meetings
held
Special meetings
attended
W Richard Sheppard
Patrick N J Allaway
Penny Bingham-Hall
Tonianne Dwyer
Mark H Ford
Warwick Negus
The Hon. Nicola L Roxon
Darren J Steinberg
12
12
12
12
12
12
12
12
11
12
12
12
12
11
12
12
6
6
6
6
6
6
6
6
6
6
6
5
6
6
6
6
Special meetings are held at a time to enable the maximum number of Directors to attend and are generally held to consider
specific items that cannot be held over to the next scheduled main meeting.
The table below shows Non-Executive Directors’ attendances1 at Board Committee meetings of which they were a member
during the year ended 30 June 2022.
Board Audit
Committee
Board Risk
Committee
Board
Nomination
Committee
Board
People and
Remuneration
Committee
Board
Environmental,
Social and
Governance
Committee
Joint
“Organisational
Risk” Session
Held Attended Held Attended Held Attended Held Attended Held Attended Held Attended
W Richard Sheppard
Patrick N J Allaway
Penny Bingham-Hall
Tonianne Dwyer
Mark H Ford
Warwick Negus
The Hon. Nicola L Roxon
-
4
-
4
4
4
-
-
4
-
4
4
3
-
-
4
-
4
-
4
-
-
4
-
4
-
3
-
5
5
5
5
5
5
5
5
5
5
4
5
4
5
9
-
9
-
-
-
9
9
-
9
-
-
-
9
-
-
4
-
4
-
4
-
-
4
-
4
-
4
2
2
2
2
2
2
2
2
2
2
2
2
2
2
1 All Non-Executive Directors have a standing invitation to attend any or all Board Committee meetings.
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Financial report
Directors’ relevant interests
The relevant interests of each Director in DXS stapled securities as at the date of this Directors’ Report are shown below:
Directors
W Richard Sheppard
Patrick N J Allaway
Penny Bingham-Hall
Tonianne Dwyer
Mark H Ford
Warwick Negus
The Hon. Nicola L Roxon1
Darren J Steinberg2
No. of securities
100,000
20,000
32,773
22,500
17,339
25,000
24,669
1,207,167
Includes interests held directly and through Non-Executive Director (NED) Plan rights.
1
2 Includes interests held directly and through performance rights (refer to note 24).
Operating and financial review
Information on the operations and financial position of the Group and its business strategies and prospects is set out on
pages 28 to 69 of the Annual Report and forms part of this Directors’ Report.
Remuneration Report
The Remuneration Report is set out on pages 78 to 111 of the Annual Report and forms part of this Directors’ Report.
Directors’ directorships in other listed entities
The following table sets out directorships of other ASX listed entities (unless otherwise stated), not including DXFM, held by the
Directors at any time in the three years immediately prior to the end of the year, and the period for which each directorship
was held.
Directors
Company
W Richard Sheppard
Star Entertainment Group
Patrick N J Allaway
Bank of Queensland
Penny Bingham-Hall
BlueScope Steel Limited1
Allianz Australia
Tonianne Dwyer
Fortescue Metals Group Ltd
Metcash Limited2
ALS Limited
Oz Minerals Limited
Incitec Pivot Limited
Mark H Ford
Warwick Negus
Kiwi Property Group Limited3
Pengana Capital Group Limited (Chairman)
Date appointed
21 November 2012
1 May 2019
1 July 2020
29 March 2011
16 November 2016
24 June 2014
1 July 2016
21 March 2017
20 May 2021
16 May 2011
1 June 2017
Bank of Queensland
22 September 2016
Washington H. Soul Pattison and Company Ltd
1 November 2014
The Hon. Nicola L Roxon
Lifestyle Communities Limited
Darren J Steinberg
VGI Partners Limited4
1 September 2017
12 May 2019
1 Penny Bingham-Hall retired from the Board of BlueScope Steel Limited, effective 31 October 2021.
2 Tonianne Dwyer retired from the Board of Metcash Limited, effective 28 June 2021.
3 Listed for trading on the New Zealand Stock Exchange.
4 Darren Steinberg retired from the Board of VGI Partners Limited, effective 3 June 2022.
116
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Dexus 2022 Annual Report
Principal activities
During the year the principal activities of the Group were to:
– Own, manage and develop high quality real estate assets
– Invest in Australian managed funds
– Manage real estate funds on behalf of third party
investors
– Invest in the operations of Jandakot Airport and related
infrastructure
There were no significant changes in the nature of the
Group’s activities during the year.
Total value of Trust assets
The total value of the assets of the Group as at 30 June 2022
was $19,192.1 million (2021: $18,099.6 million). Details of the
basis of this valuation are outlined in the Notes to the
Consolidated Financial Statements and form part of this
Directors’ Report.
Likely developments and expected
results of operations
In the opinion of the Directors, disclosure of any further
information regarding business strategies and future
developments or results of the Group, other than the
information already outlined in this Directors’ Report or the
Consolidated Financial Statements accompanying this
Directors’ Report would be unreasonably prejudicial to the
Group.
Significant changes in the state of affairs
During the financial year, the Group announced the following
significant corporate transactions:
1. On 6 July 2021, Dexus implemented the Simplification
from a quadruple stapled trust structure (comprised of
Dexus Diversified Trust (DDF), Dexus Industrial Trust (DIT),
Dexus Office Trust (DOT) and DXO) to a dual stapled trust
structure. This was achieved by “top-hatting” three of the
existing trusts (DDF, DIT and DOT) with a newly
established trust, DPT. Effective from this date, the
Simplified Group now comprises a unit in each of DXO
and DPT, with DXFM appointed as the Responsible Entity
of DPT.
2. On 27 July 2021, APN Property Group (APN) security
holders approved the Scheme of Arrangement for Dexus
to acquire all of the stapled securities in APN for an all
cash-consideration of 90 cents per security. On 13 August
2021, the Scheme was implemented. Effective from this
date, APN and its controlled entities are now wholly
owned subsidiaries of Dexus.
3. On 1 November 2021, Dexus Holdings Pty Limited acquired
100% of Jandakot City Holdings Pty Limited (JCH) and
49% of Jandakot Airport Holdings Pty Limited (JAH)
through the newly established Jandakot City Holdings
Trust (JCHT) and Jandakot Airport Holdings Trust (JAHT).
On 19 November 2021, shortly after initial settlement,
Dexus Industria REIT (DXI) acquired a 33.3% interest in
JCHT and a 68% interest in JAHT.
On 1 April 2022, Dexus Projects Pty Limited settled on the
remaining 51% interest of JAH through the establishment
of Jandakot Airport Domestic Trust (JADT), with Cbus
Super acquiring a 33.3% interest in each of JCH and JAH
by acquiring a 33.3% interest in JCHT and a 65.3% interest
in JADT. The joint venture which owns 100% of Jandakot
airport, Perth, is held in the following proportions: Dexus
33.4%, DXI 33.3% and Cbus Super 33.3%. The existing
structure included senior asset-level debt of $405 million,
reflecting a combined equity commitment of $895 million
excluding acquisition costs.
4. On 23 March 2022, Dexus announced it had conditionally
exchanged binding transaction documents with Atlassian
to fund, develop and invest in Atlassian’s new
headquarters in Sydney. The total project costs are
expected to be circa $1.4 billion. On 20 July 2022, the
transaction achieved financial close. It is expected the
development will reach completion in 2026.
5. On 27 April 2022, Dexus agreed to acquire AMP Capital’s
real estate and domestic infrastructure equity business.
This transaction positions Dexus as a leading real asset
manager, with new capabilities and an expanded
product offering, underpinned by its best practice
governance and risk management framework.
AMP Capital’s real estate and domestic infrastructure
equity business comprises a high-quality platform of
pooled funds and separately managed accounts.
In July 2022, the unit holders of the AMP Capital Office
Fund (AWOF) voted in favour of a change of trustee of
AWOF. Consequently, the maximum potential funds
under management (FUM) that will be transferred across
to Dexus now is $21.1 billion, comprising $10.9 billion in real
estate and $10.2 billion in infrastructure.
The structure and pricing of the acquisition were agreed
having regard to the final FUM that will be transitioned to
Dexus. As a result of AWOF exiting the AMP Capital
platform, the earn out amount payable will reduce to a
maximum of approximately $75 million, taking the
maximum potential price to approximately $325 million
including the $250 million upfront cash payment.
In addition, Dexus will no longer acquire AMP Capital’s
committed co-investment stakes in AWOF totalling circa
$270 million.
The acquisition of AMP Capital is underpinned by a
compelling strategic rationale for Dexus:
– Further diversifies Dexus’s fund management platform
with an expanded investor base
– Expanded capabilities to drive an enhanced offering
and asset performance
– Provides a scalable platform for growth, underpinned
by Dexus’s best practice governance and risk
management framework
– Long-term value creation potential for Dexus security
holders and funds management partners
117
117
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Financial report
The Group has implemented systems and processes for the
collection and calculation of the data required and
submitted its 2021 report to the Greenhouse and Energy
Data Officer on 31 October 2021 and will submit its 2022
report by 31 October 2022. During the 12 month period ending
30 June 2022, the Group complied with all the relevant
requirements as set out by the NGER Act.
Information regarding the Group’s participation in the NGER
program is available at: www.dexus.com/sustainability
Indemnification and insurance
The insurance premium for a policy of insurance indemnifying
Directors, Officers and others (as defined in the relevant
policy of insurance) is paid by DXFM’s immediate parent
entity, Dexus Holdings Pty Limited (DXH).
Subject to specified exclusions, the liabilities insured are for
costs that may be incurred in defending civil or criminal
proceedings that may be brought against Directors and
Officers in their capacity as Directors and Officers of DXFM,
its subsidiaries or such other entities, and other payments
arising from liabilities incurred by the Directors and Officers in
connection with such proceedings.
PricewaterhouseCoopers (PwC or the Auditor), is indemnified
out of the assets of the Group pursuant to the Dexus Specific
Terms of Business agreed for all engagements with PwC, to
the extent that the Group inappropriately uses or discloses a
report prepared by PwC. The Auditor is not indemnified for
the provision of services where such an indemnification is
prohibited by the Corporations Act 2001.
Audit
Auditor
PricewaterhouseCoopers continues in office in accordance
with section 327 of the Corporations Act 2001. In accordance
with section 324DAA of the Corporations Act 2001, the
Group’s lead auditor and review auditor must be rotated
every five years unless the Board grants approval to extend
the term for up to a further two years.
Lead audit partner rotation
On 23 June 2022, the Board granted approval to extend the
term of the current lead auditor for one year, to include the
audit for the year ending 30 June 2023 in light of the
significant business and operational changes undertaken by
the Group which are ongoing and are expected to impact
the 2023 audit.
The Board Audit Committee and Board were satisfied that
such an extension was consistent with maintaining the
quality of the audit provided to the Group and would not
give rise to a conflict of interest situation, as defined in the
Corporations Act 2001 and thereby impair the independence
of the lead audit partner. PwC has provided written
confirmation that this extension would not give rise to a
conflict of interest situation and appropriate safeguards are
in place to ensure appropriate objectivity and independence
are maintained.
Matters subsequent to the end of the
financial year
On 29 July 2022, settlement occurred for the disposal of
383-395 Kent Street, Sydney NSW for $385.0 million excluding
transaction costs.
On 29 July 2022, settlement occurred for the disposal of
140 and 150 George Street, Parramatta NSW for $77.2 million
excluding transaction costs.
Since the end of the year, other than the matters disclosed
above, the Directors are not aware of any matter or
circumstance not otherwise dealt with in their Directors’
Report or the Consolidated Financial Statements that has
significantly or may significantly affect the operation of the
Group, the results of those operations, or state of the
Group’s affairs in future financial periods.
Distributions
Distributions paid or payable by the Group for the year
ended 30 June 2022 were 53.2 cents per security which
amounted to $572.2 million (2021: 51.8 cents per security,
$561.0 million) as outlined in note 7 of the Notes to the
Consolidated Financial Statements.
DXFM fees
Details of fees paid or payable by the Group to DXFM are
eliminated on consolidation for the year ended 30 June 2022.
Details are outlined in note 25 of the Notes to the
Consolidated Financial Statements and form part of this
Directors’ Report.
Interests in DXS securities
The movement in securities on issue in the Group during the
year and the number of securities on issue as at 30 June
2022 are detailed in note 17 of the Notes to the Consolidated
Financial Statements and form part of this Directors’ Report.
The number of interests in the Group held by DXFM or its
associates as at the end of the financial year is nil (2021: nil).
The DXFM Board has approved a grant of performance rights
of DXS stapled securities to eligible participants. Details of
the performance rights awarded during the financial year are
outlined in note 24 of the Notes to the Consolidated
Financial Statements. The Group did not have any options on
issue as at 30 June 2022 (2021: nil).
Environmental regulation
The Board Risk Committee oversees the policies, procedures
and systems that have been implemented to ensure the
adequacy of its environmental risk management practices. It
is the opinion of this Committee that adequate systems are
in place for the management of its environmental
responsibilities and compliance with its various licence
requirements and regulations. Further, the Committee is not
aware of any material breaches of these requirements.
The Group is subject to the reporting requirements of the
National Greenhouse and Energy Reporting Act 2007 (NGER
Act). The NGER Act requires the Group to report its annual
greenhouse gas emissions and energy use.
118
118
Dexus 2022 Annual Report
Non-audit services
The Group may decide to employ the Auditor on
assignments, in addition to its statutory audit duties, where
the Auditor’s expertise and experience with the Group are
important.
Directors’ authorisation
The Directors’ Report is made in accordance with a
resolution of the Directors. The Consolidated Financial
Statements were authorised for issue by the Directors on
16 August 2022.
W Richard Sheppard
Chair
16 August 2022
Darren J Steinberg
Chief Executive Officer
16 August 2022
Details of the amounts paid or payable to the Auditor for
audit and non-audit services provided during the year are
set out in note 22 of the Notes to the Consolidated Financial
Statements.
The Board Audit Committee is satisfied that the provision of
non-audit services provided during the year by the Auditor
(or by another person or firm on the Auditor’s behalf) is
compatible with the standard of independence for auditors
imposed by the Corporations Act 2001.
The reasons for the Directors being satisfied are:
– All non-audit services have been reviewed by the Board
Audit Committee to ensure that they do not impact the
impartiality and objectivity of the Auditor
– None of the services undermine the general principles
relating to auditor independence as set out in APES 110
Code of Ethics for Professional Accountants
The above Directors’ statements are in accordance with the
advice received from the Board Audit Committee.
Auditor’s Independence Declaration
A copy of the Auditor’s Independence Declaration as
required under section 307C of the Corporations Act 2001 is
set out on page 120 and forms part of this Directors’ Report.
Corporate governance
DXFM’s Corporate Governance Statement is available at:
www.dexus.com/corporategovernance
Rounding of amounts and currency
As the Group is an entity of the kind referred to in ASIC
Corporations (Rounding in Financial/Directors’ Reports)
Instrument 2016/191, the Directors have chosen to round
amounts in this Directors’ Report and the accompanying
Financial Report to the nearest hundred thousand, unless
otherwise indicated. All figures in this Directors’ Report and
the Consolidated Financial Statements, except where
otherwise stated, are expressed in Australian dollars.
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119
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Financial report
Auditor’s Independence Declaration
[DECLARATION GOES HERE]
Auditor’s Independence Declaration
As lead auditor for the audit of Dexus Property Trust (the Trust) for the year ended 30 June 2022, I
declare that to the best of my knowledge and belief, there have been:
(a) no contraventions of the auditor independence requirements of the Corporations Act 2001 in
relation to the audit; and
(b) no contraventions of any applicable code of professional conduct in relation to the audit.
This declaration is in respect of the Trust and the entities it controlled during the year.
Matthew Lunn
Partner
PricewaterhouseCoopers
Sydney
16 August 2022
PricewaterhouseCoopers, ABN 52 780 433 757
One International Towers Sydney, Watermans Quay, Barangaroo, GPO BOX 2650, SYDNEY NSW 2001
T: +61 2 8266 0000, F: +61 2 8266 9999, www.pwc.com.au
Level 11, 1PSQ, 169 Macquarie Street, Parramatta NSW 2150, PO Box 1155 Parramatta NSW 2124
T: +61 2 9659 2476, F: +61 2 8266 9999, www.pwc.com.au
Liability limited by a scheme approved under Professional Standards Legislation.
120
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Dexus 2022 Annual Report
Consolidated Statement of Comprehensive Income
For the year ended 30 June 2022
Revenue from ordinary activities
Property revenue
Development revenue
Interest revenue
Management fees and other revenue
Total revenue from ordinary activities
Net fair value gain of investment properties
Share of net profit of investments accounted for using the equity method
Net gain on sale of investment properties
Net fair value gain of foreign currency interest bearing liabilities
Net fair value gain of financial assets at fair value through profit or loss
Reversal of impairment on inventories
Other income
Total income
Expenses
Property expenses
Development costs
Finance costs
Impairment of intangibles
Impairment of investments accounted for using the equity method
Net fair value loss of derivatives
Net foreign exchange loss
Transaction costs
Management operations, corporate and administration expenses
Total expenses
Profit/(loss) before tax
Income tax expense
Profit/(loss) for the year
Other comprehensive income/(loss):
Items that may be reclassified to profit or loss
Changes in the fair value of cash flow hedges
Changes in the foreign currency basis spread reserve
Total comprehensive income/(loss) for the year
Profit/(loss) for the year attributable to:
Unitholders of the parent entity1
Unitholders of other stapled entities (non-controlling interests)2
Profit/(loss) for the year
Total comprehensive income/(loss) for the year attributable to:
Unitholders of the parent entity1
Unitholders of other stapled entities (non-controlling interests)2
Total comprehensive income/(loss) for the year
Note
2
10
8
9
12
2
10
4
20
9
13(c)
3
5(a)
18
18
Earnings per unit on profit/(loss) attributable to unitholders of the Trust (parent entity)1
Basic earnings per unit
Diluted earnings per unit
Earnings per stapled security on profit/(loss) attributable to stapled security holders
Basic earnings per security
Diluted earnings per security
6
6
6
6
2022
$m
464.6
172.0
2.4
235.3
874.3
437.0
845.7
0.1
173.0
6.5
-
10.1
2,346.7
(142.1)
(138.6)
(141.8)
(1.9)
(0.9)
(40.2)
(0.2)
(63.8)
(186.1)
(715.6)
1,631.1
(15.2)
1,615.9
7.4
10.7
1,634.0
1,583.0
32.9
1,615.9
1,601.1
32.9
1,634.0
Cents
147.18
145.38
150.24
148.36
2021
$m
523.8
316.6
1.3
174.2
1,015.9
273.7
565.6
0.3
115.2
-
4.7
1.7
1,977.1
(165.1)
(244.6)
(131.7)
-
-
(102.4)
(0.1)
(10.3)
(143.2)
(797.4)
1,179.7
(41.3)
1,138.4
(14.5)
(1.5)
1,122.4
525.0
613.4
1,138.4
509.0
613.4
1,122.4
Cents
48.41
47.18
104.97
104.73
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1 As a result of the simplification of the stapled group structure implemented on 6 July 2021, DPT is deemed the new parent entity for financial reporting
purposes. The parent entity for the comparative year was DDF. Refer to the Basis of preparation within the Notes to the Consolidated Financial
Statements for further information.
2 As a result of the simplification of the stapled group structure implemented on 6 July 2021, non-controlling interests comprise DXO for financial
reporting purposes. Non-controlling interests for the comparative period comprise DIT, DOT and DXO. Refer to the Basis of preparation within the
Notes to the Consolidated Financial Statements for further information.
The above Consolidated Statement of Comprehensive Income should be read in conjunction with the accompanying notes.
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Financial report
Consolidated Statement of Financial Position
As at 30 June 2022
Current assets
Cash and cash equivalents
Receivables
Non-current assets classified as held for sale
Inventories
Derivative financial instruments
Current tax receivable
Other
Total current assets
Non-current assets
Investment properties
Plant and equipment
Right-of-use assets
Inventories
Investments accounted for using the equity method
Derivative financial instruments
Intangible assets
Financial assets at fair value through profit or loss
Loans with related parties
Other
Total non-current assets
Total assets
Current liabilities
Payables
Interest bearing liabilities
Lease liabilities
Derivative financial instruments
Current tax liabilities
Provisions
Loans with related parties
Other
Total current liabilities
Non-current liabilities
Interest bearing liabilities
Lease liabilities
Derivative financial instruments
Deferred tax liabilities
Provisions
Other
Total non-current liabilities
Total liabilities
Net assets
Equity
Equity attributable to unitholders of the Trust (parent entity)1
Contributed equity
Reserves
Retained profits
Parent entity unitholders' interest
Equity attributable to unitholders of other stapled entities2
Contributed equity
Reserves
Retained profits
Other stapled unitholders' interest
Total equity
Note
19(a)
19(b)
11
10
13(c)
19(c)
8
10
9
13(c)
20
12
25
25
19(d)
15
14
13(c)
19(e)
25
15
14
13(c)
5(e)
19(e)
17
18
17
18
2022
$m
75.3
166.5
385.0
54.4
12.6
-
53.5
747.3
8,295.7
11.7
16.9
-
8,881.9
457.9
488.0
186.5
33.7
72.5
18,444.8
19,192.1
180.4
-
4.2
1.2
16.0
315.9
33.1
4.3
555.1
4,882.3
22.7
40.5
102.2
3.4
18.7
5,069.8
5,624.9
13,567.2
7,048.0
17.3
6,159.4
13,224.7
107.1
33.8
201.6
342.5
13,567.2
2021
$m
43.5
121.0
272.8
137.2
13.8
21.2
28.3
637.8
8,476.8
10.1
13.6
41.0
8,070.4
333.3
305.4
180.5
30.7
-
17,461.8
18,099.6
173.8
50.0
3.5
7.2
-
291.2
-
7.8
533.5
4,874.7
20.5
42.9
92.9
2.7
23.4
5,057.1
5,590.6
12,509.0
2,341.4
(0.8)
1,463.9
3,804.5
4,813.7
37.4
3,853.4
8,704.5
12,509.0
1 As a result of the simplification of the stapled group structure implemented on 6 July 2021, DPT is deemed the new parent entity for financial reporting
purposes. The parent entity for the comparative year was DDF. Refer to the Basis of preparation within the Notes to the Consolidated Financial
Statements for further information.
2 As a result of the simplification of the stapled group structure implemented on 6 July 2021, non-controlling interests comprise DXO for financial
reporting purposes. Non-controlling interests for the comparative period comprise DIT, DOT and DXO. Refer to the Basis of preparation within the
Notes to the Consolidated Financial Statements for further information.
The above Consolidated Statement of Financial Position should be read in conjunction with the accompanying notes.
122
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Dexus 2022 Annual Report
Consolidated Statement of Changes in Equity
For the year ended 30 June 2022
Attributable to unitholders of the
Trust (parent entity)1
Attributable to unitholders of
other stapled entities2
Con-
tributed
equity
Reserves
Retained
profits
Total
Con-
tributed
equity
Reserves
Retained
profits
Total
Total
equity
Note
$m
$m
$m
$m
$m
$m
$m
$m
$m
2,381.4
15.2
1,051.9
3,448.5
4,909.5
35.4
3,716.9
8,661.8
12,110.3
-
-
-
-
-
-
(29.1)
(29.1)
(29.1)
18
17
18
18
7
18
18
18
7
2,381.4
15.2
1,051.9
3,448.5
4,909.5
35.4
3,687.8
8,632.7
12,081.2
-
-
-
525.0
525.0
(16.0)
-
(16.0)
-
(16.0)
525.0
509.0
-
-
-
-
-
613.4
613.4
1,138.4
-
-
(16.0)
-
613.4
613.4
1,122.4
-
-
-
(40.0)
-
-
-
-
(40.0)
(95.8)
-
-
(95.8)
(135.8)
-
-
-
-
-
(113.0)
(113.0)
-
-
-
(7.3)
9.3
-
-
(7.3)
(7.3)
9.3
9.3
-
(447.9)
(447.9)
(561.0)
(40.0)
-
(113.0)
(153.0)
(95.8)
2.0
(447.9)
(541.7)
(694.8)
2,341.4
(0.8)
1,463.9
3,804.5
4,813.7
37.4
3,853.4
8,704.5
12,509.0
2,341.4
(0.8)
1,463.9
3,804.5
4,813.7
37.4
3,853.4
8,704.5
12,509.0
4,706.6
-
3,634.7
8,341.3
(4,706.6)
-
(3,634.7)
(8,341.3)
-
7,048.0
(0.8)
5,098.6
12,145.8
107.1
37.4
218.7
363.2
12,509.0
-
-
-
-
-
-
-
-
1,583.0
1,583.0
18.1
-
18.1
18.1
1,583.0
1,601.1
-
-
-
-
-
32.9
32.9
1,615.9
-
-
18.1
-
32.9
32.9
1,634.0
-
-
-
-
-
-
-
(522.2)
(522.2)
-
(15.1)
-
(15.1)
(15.1)
-
-
11.5
-
11.5
11.5
-
(50.0)
(50.0)
(572.2)
-
(522.2)
(522.2)
-
(3.6)
(50.0)
(53.6)
(575.8)
7,048.0
17.3
6,159.4
13,224.7
107.1
33.8
201.6
342.5
13,567.2
Opening balance as at
1 July 2020
Change in accounting
policy
Restated opening
balance as at
1 July 2020
Net profit for the year
Other comprehensive
income/(loss) for the
year
Total comprehensive
income for the year
Transactions with
owners in their capacity
as owners
Buy-back of
contributed equity, net
of transaction cost
Purchase of securities,
net of transaction costs
Security-based
payments expense
Distributions paid or
provided for
Total transactions with
owners in their
capacity as owners
Closing balance as at
30 June 2021
Opening balance as at
1 July 2021
Capital reorganisation3
Restated opening
balance as at 1 July
2021
Net profit for the year
Other comprehensive
income/(loss) for the
year
Total comprehensive
income for the year
Transactions with
owners in their capacity
as owners
Purchase of securities,
net of transaction costs
Security-based
payments expense
Distributions paid or
provided for
Total transactions with
owners in their
capacity as owners
Closing balance as at
30 June 2022
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1 As a result of the simplification of the stapled group structure implemented on 6 July 2021, DPT is deemed the new parent entity for financial reporting
purposes. The parent entity for the comparative year was DDF. Refer to the Basis of preparation within the Notes to the Consolidated Financial
Statements for further information.
2 As a result of the simplification of the stapled group structure implemented on 6 July 2021, non-controlling interests comprise DXO for financial
reporting purposes. Non-controlling interests for the comparative period comprise DIT, DOT and DXO. Refer to the Basis of preparation within the
Notes to the Consolidated Financial Statements for further information.
3 The simplification from a quadruple stapled trust structure to a dual stapled trust structure is viewed for accounting purposes as a capital
reorganisation as it was merely a change in the legal structure of the Group. There was no change to the assets or liabilities of the Group on
implementation of the Simplification, excluding the impact of transaction costs. Refer to the Basis of preparation within the Notes to the Consolidated
Financial Statements for further information.
The above Consolidated Statement of Changes in Equity should be read in conjunction with the accompanying notes.
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Financial report
Consolidated Statement of Cash Flows
For the year ended 30 June 2022
Cash flows from operating activities
Receipts in the course of operations (inclusive of GST)
Payments in the course of operations (inclusive of GST)
Interest received
Finance costs paid
Distributions received from investments accounted for using the equity method
Income tax paid
Proceeds from sale of property classified as inventory and development services
Payments for property classified as inventory and development services
Net cash inflow/(outflow) from operating activities
Note
23
Cash flows from investing activities
Proceeds from sale of investment properties
Proceeds from sale of investments accounted for using the equity method
Payments for capital expenditure on investment properties
Payments for investments accounted for using the equity method
Payments for financial assets at fair value through profit or loss
Payments for acquisition of investment properties
Payments for plant and equipment
Payments for intangibles
Payment for acquisition of subsidiary, net of cash acquired
Net cash inflow/(outflow) from investing activities
Cash flows from financing activities
Borrowings provided to related parties
Proceeds from borrowings
Repayment of borrowings
Proceeds from loan with related party
Payment of lease liabilities
Payments for buy-back of contributed equity, net of transaction costs
Purchase of securities for security-based payments plans
Distributions paid to security holders
Net cash inflow/(outflow) from financing activities
Net increase/(decrease) in cash and cash equivalents
Cash and cash equivalents at the beginning of the year
Cash and cash equivalents at the end of the year
2022
$m
781.3
(458.5)
2.4
(159.2)
245.5
(8.6)
172.0
(14.8)
560.1
750.1
1,528.9
(98.6)
(1,578.4)
-
(202.5)
(4.8)
(1.5)
(352.0)
41.2
(0.8)
18,648.7
(18,681.0)
33.1
(4.6)
-
(16.3)
(548.6)
(569.5)
31.8
43.5
75.3
2021
$m
762.1
(315.6)
1.3
(147.4)
478.1
(59.6)
367.1
(86.7)
999.3
534.9
-
(110.7)
(727.8)
(180.5)
(197.5)
(0.7)
(15.7)
-
(698.0)
-
8,405.0
(7,983.3)
-
(0.3)
(135.8)
(7.3)
(567.9)
(289.6)
11.7
31.8
43.5
The above Consolidated Statement of Cash Flows should be read in conjunction with the accompanying notes.
124
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Dexus 2022 Annual Report
Notes to the Consolidated
Financial Statements
In this section
This section sets out the basis upon which the Group’s Consolidated Financial Statements are prepared.
Specific accounting policies are described in their respective Notes to the Consolidated Financial Statements.
Basis of preparation
The Consolidated Financial Statements are general purpose
financial reports which have been prepared in accordance
with the requirements of the Constitutions of the entities
within the Group, the Corporations Act 2001, AASB’s issued
by the Australian Accounting Standards Board and
International Financial Reporting Standards adopted by the
International Accounting Standard Board.
Unless otherwise stated the Consolidated Financial
Statements have been prepared using consistent
accounting policies in line with those of the previous financial
year and corresponding interim reporting period. Where
required, comparative information has been restated for
consistency with the current year’s presentation.
The Consolidated Financial Statements are presented in
Australian dollars, with all values rounded to the nearest
hundred thousand dollars in accordance with ASIC
Corporations (Rounding in Financial/Directors’ Reports)
Instrument 2016/191, unless otherwise stated.
The Consolidated Financial Statements have been prepared
on a going concern basis using historical cost conventions,
except for investment properties, investment properties
within equity accounted investments, derivative financial
instruments, security-based payments, financial assets at
fair value through profit or loss and other liabilities which are
stated at their fair value.
Dexus Simplification
On 6 July 2021, Dexus implemented the Simplification from a
quadruple stapled trust structure (comprised of DDF, DIT,
DOT and DXO) to a dual stapled trust structure comprised of
DPT and DXO. This was achieved by “top-hatting” three of
the existing trusts (DDF, DIT and DOT) with a newly
established trust, DPT. Effective from this date, the Simplified
Group now comprises a unit in each of DXO and DPT, with
DXFM appointed as the Responsible Entity of DPT.
In accordance with AASB 3 Business Combinations, the
change in stapled structure from four stapled trusts to two,
requires the Directors to reassess which trust is the deemed
parent for the purpose of preparing Consolidated Financial
Statements for Dexus, post simplification. Dexus has
determined that DPT is the deemed parent entity for Dexus
post simplification on the basis that:
– DPT, although being a newly established trust, is the legal
parent and vehicle for owning the interests in DDF, DIT
and DOT
– DPT represented 97% of the equity and 95% of total assets
of DXS at 30 June 2021, and is larger in relative size than
DXO
This transaction had no impact on the assets or liabilities of
Dexus (excluding transaction costs) and is deemed a capital
reorganisation rather than a business combination (as
defined in AASB 3 Business Combinations).
On implementation of the Simplification, the total equity
balance of Dexus (Contributed equity, Reserves and
Retained earnings) remained unchanged (excluding the
impact of transaction costs). However, the allocation
between Equity attributable to Unitholders of the Trust
(parent entity) and Equity attributable to Unitholders of other
stapled entities changed. The portion of total equity
attributable to each of the parent entity and other stapled
entities has been determined by applying the predecessor
method, whereby the consolidated Contributed equity,
Reserves and Retained earnings of the existing head trusts
have been reallocated between those attributable to DPT
and those attributable to DXO. Prior period comparatives
have not been restated to reflect the impact of the current
year restructure.
Dexus stapled securities are quoted on the Australian
Securities Exchange under the “DXS” code, and from 7 July
2021 comprise a unit in each of DPT and DXO.
In accordance with Australian Accounting Standards, the
entities within the Group must be consolidated for financial
reporting purposes. DPT is the parent entity and deemed
acquirer of DXO. These Consolidated Financial Statements
therefore represent the consolidated results of DPT and
include DPT and its controlled entities, and DXO and its
controlled entities. All entities within the Group are for-profit
entities.
Equity attributable to the other trust stapled to DPT is a form
of non-controlling interest and represents the equity of DXO.
The amount of non-controlling interest attributable to
stapled security holders is disclosed in the Consolidated
Statement of Financial Position.
Each entity forming part of the Group continues as a
separate legal entity in its own right under the Corporations
Act 2001 and is therefore required to comply with the
reporting and disclosure requirements under the
Corporations Act 2001 and Australian Accounting Standards.
DXFM as Responsible Entity for DPT and DXO may only
unstaple the Group if approval is obtained by a special
resolution of the stapled security holders.
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Financial report
Despite impacts from the pandemic, it has been an active
year with growth in the funds management business,
continued leasing activity as well as new acquisitions and
selective asset sales. This momentum demonstrates
Dexus’s continued focus on leveraging its platform
capabilities to drive performance across the portfolio and
in its third party funds.
During the year, Dexus leased 152,877 square metres of
office space across 292 transactions, in addition to 96,749
square metres of space across office developments.
Dexus office portfolio occupancy increased to 95.6% (June
2021: 95.2%).
Dexus leased 373,301 square metres of industrial space
across 75 transactions as well as 330,097 square metres of
space across 21 industrial developments. Dexus industrial
portfolio occupancy increased to 98.1% (June 2021: 97.7%).
Retail transactions increased during the year as investor
sentiment improved driven by an increase in discretionary
spending. City retail remains challenged given the
pandemic’s effects on CBD locations across Australia.
Dexus continues to work with impacted tenants to finalise
rent relief packages in accordance with the legislation
and regulations in NSW and Victoria.
In the process of applying the Group’s accounting
policies, management has made a number of judgements
and applied estimates in relation to continued COVID-19
related uncertainties. Additionally, management has
considered the current economic environment noting
recent inflationary impacts and a rising interest rate
climate. Other than these and the estimates and
assumptions used for the measurement of items held at
fair value such as certain financial instruments, other
financial assets at fair value through profit or loss,
investment properties (including those held within
investments accounted for using the equity method),
security-based payments, and the assumptions for
intangible assets and the net realisable value for
inventories, no key assumptions concerning the future or
other estimation of uncertainty at the end of each
reporting period could have a significant risk of causing
material adjustments to the Consolidated Financial
Statements.
Significant change from the previous annual
financial report
During the year, the Group entered into a business
combination to acquire APN. Details of the acquisition are
outlined in note 21 Business combination. The accounting
policy for business combinations and related goodwill is
outlined below.
Business combinations are accounted for using the
acquisition method. The cost of an acquisition is measured
as the aggregate of the consideration transferred, which
is measured at fair value at the acquisition date and
adjusted for the amount of any non-controlling interests in
the acquiree. Identifiable assets acquired and liabilities
and contingent liabilities assumed in a business
combination are initially measured at their fair values at
the acquisition date. The Group recognises any non-
controlling interest in the acquired entity on an
acquisition-by-acquisition basis either at fair value or at
the non-controlling interest’s proportionate share of the
net identifiable assets of the acquired entity. Acquisition
related costs are expensed as incurred.
Goodwill is the sum of the consideration transferred, the
amount of any non-controlling interest in the acquired
entity, and the acquisition date fair value of any previous
equity interest in the acquired entity, less the fair value of
the net identifiable assets acquired. If those amounts are
less than the fair value of the net identifiable assets of the
business acquired, the difference is recognised directly in
profit or loss as a bargain purchase.
After initial recognition, goodwill is measured at cost less
any accumulated impairment losses and is tested for
impairment annually.
Critical accounting estimates
The preparation of the Consolidated Financial Statements
requires the use of certain critical accounting estimates
and management to exercise its judgement in the process
of applying the Group’s accounting policies.
COVID-19
The economic impacts resulting from the Government
imposed restrictions in a response to the COVID-19
pandemic have the potential to impact various financial
statement line items including: Investment properties,
Property revenue and expenses, and Receivables.
The financial year saw the continuation of COVID-19
lockdowns in Sydney and Melbourne, which impacted the
economy and the ability for business to trade normally.
Despite this, the vaccine was successfully rolled out across
Australia enabling the easing of restrictions before
Christmas. Subsequently, the Omicron variant of COVID-19
continues to impact confidence, creating challenges in
supply chains which has persisted for the second half of
the financial year.
126
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Dexus 2022 Annual Report
Climate change
The Group is continuing to develop its assessment of the
impact of climate change in line with emerging industry
and regulatory guidance as it considers the impact of
climate change risks in preparing the Consolidated
Financial Statements. Refer to specific considerations
relating to Investment Properties within note 8 to the
Consolidated Financial Statements.
In March 2022, the International Sustainability Standards
Board (ISSB) released their first two exposure drafts. When
the exposure drafts are issued as standards, these will be
available for voluntary adoption and will not become
mandatory until aligned standards are adopted in
Australia. The Group will assess the potential impact of
these new standards on the Consolidated Financial
Statements once they have been issued by the ISSB and
will continue to monitor developments in Australia.
Principles of consolidation
These Consolidated Financial Statements incorporate the
assets, liabilities and results of all subsidiaries as at
30 June 2022.
a. Controlled entities
Subsidiaries are all entities over which the Group has
control. The Group controls an entity when the Group is
exposed to, or has rights to, variable returns from its
involvement with the entity and has the ability to affect
those returns through its power to direct the activities of
the entity. Subsidiaries are fully consolidated from the
date on which control is transferred to the Group. They are
deconsolidated from the date that control ceases.
b. Joint arrangements
Investments in joint arrangements are classified as either
joint operations or joint ventures depending on the
contractual rights and obligations each investor has,
rather than the legal structure of the joint arrangement.
Joint operations
Where assets are held directly as tenants in common, the
Group’s proportionate share of revenues, expenses,
assets and liabilities are included in their respective items
of the Consolidated Statement of Financial Position and
Consolidated Statement of Comprehensive Income.
Joint ventures
Investments in joint ventures are accounted for using the
equity method. Under this method, the Group’s share of
the joint ventures’ post-acquisition profits or losses is
recognised in the Consolidated Statement of
Comprehensive Income and distributions received from
joint ventures are recognised as a reduction of the
carrying amount of the investment.
c. Employee share trust
The Group has formed a trust to administer the Group’s
security-based employee benefits. The employee share
trust is consolidated as the substance of the relationship
is that the trust is controlled by the Group.
Foreign currency
The Consolidated Financial Statements are presented in
Australian dollars.
Foreign currency transactions are translated into the
Australian dollars functional currency using the exchange
rates prevailing at the dates of the transactions. Foreign
exchange gains and losses resulting from the settlement
of such transactions and from the translation at period
end exchange rates of financial assets and liabilities
denominated in foreign currencies are recognised in the
Consolidated Statement of Comprehensive Income.
As at 30 June 2022, the Group had no investments in
foreign operations.
Goods and services tax
Revenues, expenses and capital assets are recognised
net of any amount of Australian Goods and Services Tax
(GST), except where the amount of GST incurred is not
recoverable. In these circumstances the GST is recognised
as part of the cost of acquisition of the asset or as part of
the expense. Cash flows are included in the Consolidated
Statement of Cash Flows on a gross basis. The GST
component of cash flows arising from investing and
financing activities that is recoverable from or payable to
the Australian Taxation Office is classified as cash flows
from operating activities.
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Financial report
Notes to the Consolidated Financial Statements
The Notes include information which is required to understand the Consolidated Financial Statements and is material and
relevant to the operations, financial position and performance of the Group.
The Notes are organised into the following sections:
Group performance
Property portfolio assets
Capital and financial
risk management and
working capital
Other disclosures
1. Operating segments
8.
Investment properties
13. Capital and financial risk
20. Intangible assets
management
2. Property revenue and
9.
expenses
Investments accounted for
using the equity method
14. Lease liabilities
21. Business combination
3. Management operations,
10. Inventories
15.
Interest bearing liabilities 22. Audit, taxation and
corporate and
administration expenses
transaction service fees
4. Finance costs
11. Non-current assets
classified as held for sale
16. Commitments and
contingencies
23. Cash flow information
5. Taxation
12. Financial assets at fair
17. Contributed equity
24. Security-based payments
value through profit or loss
6. Earnings per unit
7. Distributions paid and
payable
18. Reserves
25. Related parties
19. Working capital
26. Parent entity disclosures
27. Subsequent events
128
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Dexus 2022 Annual Report
Group performance
In this section
This section explains the results and performance of the Group.
It provides additional information about those individual line items in the Consolidated Financial Statements that the
Directors consider most relevant in the context of the operations of the Group, including: results by operating segment,
property revenue and expenses, management operations, corporate and administration expenses, finance costs,
taxation, earnings per unit and distributions paid and payable.
Note 1 Operating segments
Description of segments
The Group’s operating segments have been identified based on the sectors analysed within the management reports
reviewed in order to monitor performance across the Group and to appropriately allocate resources. Refer to the table below
for a brief description of the Group’s operating segments.
Segment
Office
Industrial
Description
Domestic office space with any associated retail space as well as car parks and office
developments owned directly or in joint ventures or partnerships.
Domestic industrial properties, industrial estates and industrial developments owned
directly or in joint ventures or partnerships.
Co-investments
Distribution income earned from investments in pooled property and real estate security
funds.
Property management
Property management services for third party clients and owned assets.
Funds management
Funds management of third party client assets.
Development and trading
Revenue earned and costs incurred by the Group on development services for third party
clients and inventory.
All other segments
Corporate expenses associated with maintaining and operating the Group. This segment
also includes the centralised treasury function and the direct property portfolio value of
other investments.
Revisions to segment results
During the year, Dexus implemented a change to the presentation of its segment financial information. The change related to:
– The creation of a Co-investments segment revenue line item to provide greater visibility of the earnings generated from
Co-investments
– The Co-investments segment includes investments in the following managed funds and strategic ventures: Australian Unity
Healthcare Property Trust, APN Asian REIT Fund, APN Global REIT Income Fund, Dexus Convenience Retail REIT, Dexus
Development Fund No.2, Dexus Healthcare Property Fund, Dexus Industria REIT, Dexus Regional Property Fund, Dexus DREP
1 Co-investment Trust, Divvy Parking Pty Ltd and RealTech Ventures
– The investments in Australian Unity Healthcare Property Trust, Dexus Healthcare Property Fund, Divvy Parking Pty Ltd and
RealTech Ventures have been reallocated from All other segments to the new Co-investments segment
This change impacts the allocation of segment results across segment categories, however it has no impact on the Group’s
overall results or financial position. Comparative segment financial information has been restated to reflect this change.
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Financial report
Note 1 Operating segments (continued)
30 June 2022
Segment performance measures
Property revenue
Property management fees
Development revenue
Management fee revenue
Co-investment income
Total operating segment revenue
Property expenses and property management salaries
Management operations expenses
Corporate and administration expenses
Development costs
Interest revenue
Finance costs
Incentive amortisation and rent straight line
FFO tax expense
Rental guarantees, coupon income and other
Funds From Operations (FFO)
Net fair value gain/(loss) of investment properties
Reversal of impairment of inventories
Net fair value gain/(loss) of derivatives
Transaction costs and other significant items
Net fair value gain/(loss) of financial assets at fair value
Net gain/(loss) on sale of investment properties
Net fair value gain/(loss) of interest bearing liabilities
Incentive amortisation and rent straight line
Amortisation of intangible assets and impairments
Non FFO tax expense
Rental guarantees, coupon income and other
Share of net profit of investments accounted for using the equity method
Distribution income
Co-investment income
Net profit/(loss) attributable to stapled security holders
Investment properties
Non-current assets held for sale
Inventories
Equity accounted investment properties
Equity accounted real estate security funds
Financial assets at fair value through profit or loss
Property portfolio and pooled funds
Office
$m
Industrial
$m
728.2
188.5
-
-
-
-
728.2
(220.0)
-
(13.7)
-
-
-
139.0
-
22.1
655.6
422.8
-
-
-
-
(2.0)
-
(139.0)
-
-
(22.1)
-
-
-
915.3
6,459.5
462.2
-
-
-
-
-
188.5
(46.8)
-
(4.6)
-
-
-
13.6
-
1.7
152.4
482.4
-
-
-
-
-
-
(13.6)
-
-
(1.7)
-
-
-
619.5
1,807.0
-
-
6,373.0
2,094.4
-
-
-
-
13,294.7
3,901.4
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Dexus 2022 Annual Report
Co-
investments
$m
Property
management
$m
Funds
management
$m
Development
and trading
$m
All other
segments
$m
Eliminations
$m
-
-
-
-
29.1
29.1
-
-
-
-
-
-
-
-
-
-
45.0
-
25.8
-
70.8
(24.2)
(38.9)
-
-
-
-
-
-
-
29.1
7.7
-
-
-
119.3
-
119.3
-
(45.6)
-
-
-
-
-
-
2.5
76.2
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
7.7
76.2
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
60.7
7.6
(29.1)
68.3
-
-
-
687.3
10.4
186.5
884.2
-
-
172.0
20.8
-
192.8
-
(23.0)
-
(138.6)
-
-
-
(10.0)
-
21.2
-
-
-
-
-
-
-
-
-
-
-
-
-
-
21.2
-
-
54.4
115.3
-
-
169.7
-
-
-
-
-
-
-
-
(44.7)
-
18.4
(136.8)
-
(25.5)
4.0
(184.6)
21.6
-
(37.8)
(80.8)
6.5
-
173.0
-
(4.3)
20.3
(6.2)
-
-
-
(92.3)
29.2
-
-
52.8
-
-
82.0
(4.5)
-
-
-
-
(4.5)
-
-
4.5
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Total
$m
912.2
45.0
172.0
165.9
29.1
1,324.2
(291.0)
(107.5)
(58.5)
(138.6)
18.4
(136.8)
152.6
(35.5)
30.3
757.6
926.8
-
(37.8)
(80.8)
6.5
(2.0)
173.0
(152.6)
(4.3)
20.3
(30.0)
60.7
7.6
(29.1)
1,615.9
8,295.7
462.2
54.4
9,322.8
10.4
186.5
18,332.0
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Financial report
Note 1 Operating segments (continued)
30 June 2021
Segment performance measures
Property revenue
Property management fees
Development revenue
Management fee revenue
Co-investment income
Total operating segment revenue
Property expenses and property management salaries
Management operations expenses
Corporate and administration expenses
Development costs
Interest revenue
Finance costs
Incentive amortisation and rent straight line
FFO tax expense
Rental guarantees, coupon income and other
Funds From Operations (FFO)
Net fair value gain/(loss) of investment properties
Reversal of impairment of inventories
Net fair value gain/(loss) of derivatives
Transaction costs and other significant items
Net fair value gain/(loss) of financial assets at fair value
Net gain/(loss) on sale of investment properties
Net fair value gain/(loss) of interest bearing liabilities
Incentive amortisation and rent straight line
Amortisation of intangible assets and impairments
Non FFO tax expense
Rental guarantees, coupon income and other
Share of net profit of investments accounted for using the equity method
Distribution income
Co-investment income
Net profit/(loss) attributable to stapled security holders
Investment properties
Non-current assets held for sale
Inventories
Equity accounted investment properties
Equity accounted real estate security funds
Financial assets at fair value through profit or loss
Property portfolio and pooled funds
Office
$m
Industrial
$m
762.3
146.1
-
-
-
-
762.3
(248.0)
-
(13.9)
-
-
-
139.0
-
18.9
658.3
189.5
-
-
-
-
6.0
-
-
-
-
-
146.1
(37.2)
-
(3.4)
-
-
-
15.4
-
1.3
122.2
376.8
-
-
-
-
-
-
(139.0)
(15.7)
-
-
(18.9)
-
-
-
695.9
6,978.3
967.0
-
-
-
-
-
-
-
483.3
1,489.9
-
-
5,950.0
1,235.5
-
-
-
-
13,895.3
2,725.4
132
132
Dexus 2022 Annual Report
Co-
investments
$m
Property
management
$m
Funds
management
$m
Development
and trading
$m
All other
segments
$m
Eliminations
$m
Total
Restated1
$m
-
-
316.6
16.1
-
332.7
-
(15.0)
-
(244.6)
-
-
-
(21.6)
-
51.5
-
4.7
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(34.1)
-
1.5
(131.2)
-
(16.5)
0.6
(179.7)
(0.8)
-
(102.4)
(11.6)
-
-
115.2
(0.1)
(2.2)
(3.2)
6.9
-
-
-
-
-
-
-
8.1
8.1
-
-
-
-
-
-
-
-
-
-
41.7
-
26.3
-
68.0
(26.2)
(30.3)
-
-
-
-
-
-
-
-
-
-
73.2
-
73.2
-
(28.1)
-
-
-
-
-
-
-
8.1
11.5
45.1
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
22.6
1.7
(8.1)
24.3
-
-
-
215.2
-
180.5
395.7
11.5
45.1
56.2
(177.9)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
178.2
-
-
-
178.2
8.6
-
-
73.9
-
-
82.5
(4.8)
-
-
-
-
(4.8)
-
-
4.8
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
903.6
41.7
316.6
115.6
8.1
1,385.6
(311.4)
(73.4)
(46.6)
(244.6)
1.5
(131.2)
154.4
(38.1)
20.8
717.0
565.5
4.7
(102.4)
(11.6)
-
6.0
115.2
(154.8)
(2.2)
(3.2)
(12.0)
22.6
1.7
(8.1)
1,138.4
8,476.8
967.0
178.2
7,474.6
-
180.5
17,277.1
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information relating to Co-investments.
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Financial report
Note 1 Operating segments (continued)
Other segment information
Funds from Operations (FFO)
The Directors consider the Property Council of Australia’s (PCA) definition of FFO to be a measure that reflects the underlying
performance of the Group. FFO comprises net profit/loss after tax attributable to stapled security holders, calculated in
accordance with Australian Accounting Standards and adjusted for: property revaluations, impairments and reversal of
impairments, derivative and foreign exchange mark-to-market impacts, fair value movements on financial assets held at fair
value through profit or loss, fair value movements of interest bearing liabilities, amortisation of tenant incentives, gain/loss on
sale of certain assets, straight line rent adjustments, non-FFO tax expenses, certain transaction costs, one-off significant
items (including write off of IFRIC SaaS customisation expenses), amortisation of intangible assets, movements in right-of-use
assets and lease liabilities, rental guarantees and coupon income.
Reconciliation of segment revenue to the Consolidated Statement of Comprehensive Income
Property lease revenue
Property services revenue
Property revenue
Property management fees
Development revenue
Management fee revenue
Co-investment income
Total operating segment revenue
Share of revenue from joint ventures
Interest revenue
Total revenue from ordinary activities
2022
$m
807.9
104.3
912.2
45.0
172.0
165.9
29.1
1,324.2
(452.3)
2.4
874.3
2021
Restated1
$m
793.9
109.7
903.6
41.7
316.6
115.6
8.1
1,385.6
(371.0)
1.3
1,015.9
1 Restatement of prior year comparatives required to reflect the impacts resulting from presentational changes made during the year ended 30 June
2022, to separately disclose segment information relating to Co-investments.
Reconciliation of segment assets to the Consolidated Statement of Financial Position
Property portfolio and pooled funds1, 2
Right-of-use assets
Cash and cash equivalents
Receivables
Intangible assets
Derivative financial instruments
Plant and equipment
Prepayments and other assets3
Total assets
2022
$m
18,332.0
16.9
75.3
166.5
488.0
470.5
11.7
(368.8)
19,192.1
2021
$m
17,277.1
13.6
43.5
121.0
305.4
347.1
10.1
(18.2)
18,099.6
Includes the Group’s portion of investment properties accounted for using the equity method and investments in Australian managed funds.
1
2 Includes Co-investments in unlisted real estate security funds which are managed by the Group. The principal activity of these funds is to invest in
domestic and global listed real estate investment trusts. The Group is deemed to have significant influence over these managed funds, due to its
ability to influence the decisions made by the Board of the Responsible Entity of these funds, which is a 100% owned subsidiary of the Group.
3 Other assets include the Group's share of total net assets of its investments accounted for using the equity method less the Group's share of the
investment property value which is included in the direct property portfolio, loans with related parties and other non-current assets.
134
134
Dexus 2022 Annual Report
Note 2 Property revenue and expenses
The Group’s main revenue stream is property rental revenue and is derived from holding properties as investment properties
and earning rental yields over time. Rental revenue is recognised on a straight line basis over the lease term for leases with
fixed rent review clauses.
Prospective tenants may be offered incentives as an inducement to enter into operating leases. The costs of incentives are
recognised as a reduction of rental revenue on a straight line basis from the lease commencement date to the end of the
lease term. The carrying amount of the lease incentives is reflected in the fair value of investment properties.
Within its lease arrangements, the Group provides certain services to tenants (such as utilities, cleaning, maintenance and
certain parking arrangements) which are accounted for within AASB 15 Revenue from Contracts with Customers. A portion of
the consideration within the lease arrangements is therefore allocated to services revenue within property revenue.
Rent and recoverable outgoings
Services revenue
Incentive amortisation
Other revenue
Total property revenue
2022
$m
434.3
54.0
(82.0)
58.3
464.6
2021
$m
484.1
61.0
(78.9)
57.6
523.8
Impact of COVID-19 on Property revenue
The rent relief measures outlined in the Australian Government National Code of Conduct (Code of Conduct) and given effect
to by State based legislation and regulations operated over the following periods during the year ended 30 June 2022:
– NSW – For the period 13 July 2021 to 13 March 2022
– VIC – For the period 28 July 2021 to 15 March 2022
Dexus continues to work with impacted tenants to finalise rent relief packages in accordance with the legislation and
regulations in these States.
The various rent relief measures are accounted for as follows in line with ASIC guidance ‘20-157MR Focuses for financial
reporting under COVID-19 conditions’ published on 7 July 2020.
When a rent waiver agreement is made between the landlord and tenant:
– Rent waived that relates to future occupancy is spread over the remaining lease term and recognised on straight line basis
– Rent waived that relates to past occupancy is expensed immediately, except to the extent there exists a pre-existing
provision for expected credit losses relating to unpaid rent
Property revenue has been recognised for occupancy up to the date of a waiver agreement. Where there was no agreement
at 30 June 2022, a provision for expected credit losses per AASB 9 Financial Instruments has been recognised against any
receivable for unpaid rent for past occupancy.
The provision for expected credit losses is recognised with a corresponding expense in Property expenses. The provision
covers the difference between contractual cash flows that are due and cash flows expected to be received. Accordingly, the
provision includes both that part of the rent receivable that is likely to be waived and any additional amount relating to credit
risk associated with the financial condition of the tenant. Refer to note 19 Working capital for the amount of the provision for
expected credit losses recognised at the reporting date.
In the circumstance where the tenant has fully paid rent for the period of occupancy up to balance date, there is no rent
receivable against which to make a provision. Where it is expected that some of the rent already paid by the tenant will be
waived, there is no basis to recognise a liability at balance date.
Rent deferrals, where in substance the deferral is a delay in the timing of payments, have no impact on property revenue
recognition. A separate assessment of the recoverability of rent receivable is performed in accordance with the policy outlined
in note 19 Working capital.
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135
Financial report
Note 2 Property revenue and expenses (continued)
Property expenses
Property expenses include rates, taxes, expected credit losses on receivables and other property outgoings incurred in
relation to investment properties. These expenses are recognised in the Consolidated Statement of Comprehensive Income
on an accrual basis. If these items are recovered from a tenant by the Group, they are recorded within services revenue or
direct recoveries within Property revenue.
Recoverable outgoings
Other non-recoverable property expenses
Total property expenses
2022
$m
107.6
34.5
142.1
Note 3 Management operations, corporate and administration expenses
Audit, taxation, legal and other professional fees
Depreciation and amortisation
Employee benefits expense
Administration and other expenses
Software customisation expenses
Total management operations, corporate and administration expenses
2022
$m
9.0
9.6
127.5
29.2
10.8
186.1
2021
$m
108.0
57.1
165.1
2021
$m
6.7
9.1
95.3
20.9
11.2
143.2
Note 4 Finance costs
Finance costs include interest, amortisation or other costs incurred in connection with arrangement of borrowings, finance
costs on lease liabilities and realised interest rate swaps. Finance costs are expensed as incurred unless they relate to
qualifying assets.
A qualifying asset is an asset under development which takes a substantial period of time, where the works being carried out
to bring it to its intended use or sale are expected to exceed 12 months in duration. Finance costs incurred for the acquisition
and construction of a qualifying asset are capitalised to the cost of the asset for the period of time that is required to
complete the asset. To the extent that funds are borrowed generally to fund development, the amount of borrowing costs to
be capitalised to qualifying assets must be determined by using an appropriate capitalisation rate.
Interest paid/payable
Amount capitalised
Realised (gain)/loss of interest rate derivatives
Finance costs - leases and debt modification
Other finance costs
Total finance costs
2022
$m
123.6
(8.3)
11.0
1.1
14.4
141.8
2021
$m
113.9
(1.8)
22.3
(12.5)
9.8
131.7
The average capitalisation rate used to determine the amount of finance costs eligible for capitalisation is 2.73% (2021: 3.25%).
136
136
Dexus 2022 Annual Report
Note 5 Taxation
Under current Australian income tax legislation, DPT is not liable for income tax provided it satisfies certain legislative
requirements, which were met in the current financial year. DXO is liable for income tax and has formed a tax consolidated
group with its wholly owned and controlled Australian entities. As a consequence, these entities are taxed as a single entity.
Income tax expense is comprised of current and deferred tax expense. Current and deferred tax is recognised in profit or loss,
except to the extent that it relates to items recognised in other comprehensive income or directly in equity, in which case it is
recognised in other comprehensive income or directly in equity, respectively.
Current tax expense represents the expense relating to the expected taxable income at the applicable rate of the financial
year.
Deferred tax expense represents the tax expense in respect of the future tax consequences of recovering or settling the
carrying amount of an asset or liability. Deferred income tax liabilities are recognised for all taxable temporary differences.
Deferred income tax assets are recognised for all deductible temporary differences and unused tax losses, to the extent that
it is probable that future taxable profit will be available to utilise them.
Deferred income tax assets and liabilities are measured at the tax rates that are expected to apply to the year when the
asset is realised or the liability is settled, based on tax rates and tax laws that have been enacted or substantively enacted at
reporting date.
The carrying amount of deferred income tax assets is reviewed at balance sheet date and reduced to the extent that it is no
longer probable that sufficient taxable profit will be available to utilise them.
Attribution managed investment trust regime
Dexus made an election for DPT and its wholly owned subsidiaries (DDF, DIT and DOT) to be attribution managed investment
trusts (AMITs) for the year ended 30 June 2017 and future years. The AMIT regime is intended to reduce complexity, increase
certainty and minimise compliance costs for AMITs and their investors.
a. Income t ax (expense)/benefit
Current income tax expense
Deferred income tax (expense)/benefit
Total income tax expense
Deferred income tax expense included in income tax (expense)/benefit
comprises:
(Decrease)/increase in deferred tax assets
(Increase)/decrease in deferred tax liabilities
Total deferred tax benefit/(expense)
b. Reconciliation of income tax (expense)/benefit to net profit
Profit before income tax
Less: profit attributed to entities not subject to tax
Profit subject to income tax
Prima facie tax expense at the Australian tax rate of 30% (2021: 30%)
Tax effect of amounts which are non-assessable/(non-deductible) in
calculating taxable income:
Non-assessable/(non-deductible) items
Income tax expense
2022
$m
(45.2)
30.0
(15.2)
3.4
26.6
30.0
2022
$m
1,631.1
(1,582.7)
48.4
(14.5)
(0.7)
(15.2)
2021
$m
(40.9)
(0.4)
(41.3)
9.9
(10.3)
(0.4)
2021
$m
1,179.7
(1,045.0)
134.7
(40.4)
(0.9)
(41.3)
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137
Financial report
Note 5 Taxation (continued)
c. Current tax assets/liabilities
Increase/(decrease) in current tax assets
(Increase)/decrease in current tax liabilities
(Increase)/decrease in current tax assets
d. Deferred tax assets
The balance comprises temporary differences attributable to:
Employee provisions
Software expenditure
Other
Total non-current assets - deferred tax assets
Movements:
Opening balance at the beginning of the year
Movement in deferred tax asset arising from temporary differences
(Charged)/credited to the Consolidated Statement of Comprehensive Income
Closing balance at the end of the year
e. Deferred tax liabilities
The balance comprises temporary differences attributable to:
Intangible assets
Investment properties
Other
Total non-current liabilities - deferred tax liabilities
Movements
Opening balance at the beginning of the year
Deferred tax liabilities arising from management rights on business combination1
Movement in deferred tax liability arising from temporary differences
Charged/(credited) to the Consolidated Statement of Comprehensive Income
Closing balance at the end of the year
2022
$m
(21.2)
(16.0)
(37.2)
2022
$m
21.7
13.0
7.8
42.5
39.1
3.4
3.4
42.5
2022
$m
117.4
25.4
1.9
144.7
132.0
39.3
(26.6)
(26.6)
144.7
2021
$m
21.2
21.2
2021
$m
19.1
13.3
6.7
39.1
29.2
9.9
9.9
39.1
2021
$m
76.5
46.5
9.0
132.0
121.7
-
10.3
10.3
132.0
1 Balance represents the deferred tax recognised on management rights acquired in the APN transaction. Refer to note 21 Business combinations for
further details.
f. Net deferred tax liabilities
Deferred tax assets
Deferred tax liabilities
Net deferred tax liabilities
138
138
2022
$m
42.5
144.7
102.2
2021
$m
39.1
132.0
92.9
Dexus 2022 Annual Report
Note 6 Earnings per unit
Earnings per unit are determined by dividing the net profit attributable to unitholders by the weighted average number of
ordinary units outstanding during the year. Diluted earnings per unit are adjusted from the basic earnings per unit by taking
into account the impact of dilutive potential units.
a. Net profit used in calculating basic and diluted earnings per security
Profit attributable to unitholders of the Trust (parent entity)1 for basic earnings
per security
Effect on exchange of Exchangeable Notes
Profit attributable to unitholders of the Trust (parent entity)1 for diluted earnings
per security
Profit attributable to stapled security holders for basic earnings per security
Effect on exchange of Exchangeable Notes
Profit attributable to stapled security holders for diluted earnings per security
2022
$m
1,583.0
21.9
1,604.9
1,615.9
21.9
1,637.8
2021
$m
525.0
-
525.0
1,138.4
27.1
1,165.5
1 As a result of the simplification of the stapled group structure implemented on 6 July 2021, DPT is deemed the new parent entity for financial reporting
purposes. The parent entity for the comparative period was DDF. Refer to the Basis of preparation within the Notes to the Consolidated Financial
Statements for further information.
b. Weighted average number of securities used as a denominator
Weighted average number of units outstanding used in calculation of basic
earnings per unit
Effect on exchange of Exchangeable Notes
Weighted average number of units outstanding used in calculation of diluted
earnings per unit
2022
No. of
securities
2021
No. of
securities
1,075,565,246
1,084,536,777
28,333,333
28,333,333
1,103,898,579
1,112,870,110
Note 7 Distributions paid and payable
Distributions are recognised when they are approved by the Board of Directors and declared.
a. Distribution to security holders
31 December (paid 28 February 2022)
30 June (payable 30 August 2022)
Total distribution to security holders
b. Distribution rate
31 December (paid 28 February 2022)
30 June (payable 30 August 2022)
Total distributions
2022
$m
301.2
271.0
572.2
2021
$m
313.6
247.4
561.0
2022
2021
Cents per security
Cents per security
28.0
25.2
53.2
28.8
23.0
51.8
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139
Financial report
Note 7 Distributions paid and payable (continued)
c. Franked dividends
Opening balance at the beginning of the year
Income tax paid during the year
Franking credits utilised for payment of distribution
Closing balance at the end of the year
2022
$m
132.5
1.7
(21.4)
112.8
2021
$m
94.3
59.6
(21.4)
132.5
140
140
Dexus 2022 Annual Report
Property portfolio assets
In this section
The following table summarises the Group’s direct and indirect exposure to property assets as detailed in this section.
30 June 2022
Note
Investment properties
Investments accounted for
using the equity method
Inventories
Non-current assets classified
as held for sale
Financial assets at fair value
through profit or loss
8
9
10
11
12
Leased
assets
$m
Office
$m
Industrial
$m
Co-
investments
$m
Healthcare
and other
$m
Total
$m
8.0
6,459.5
1,807.0
-
21.2
8,295.7
52.8
6,373.0
2,094.4
687.3
115.3
9,322.8
-
-
-
-
54.4
462.2
-
-
-
-
-
54.4
462.2
-
-
186.5
-
186.5
Total
60.8
13,294.7
3,955.8
873.8
136.5
18,321.6
Property portfolio assets are used to generate the Group’s performance and are considered to be the most relevant to
the understanding of the operating performance of the Group. The assets are detailed in the following notes:
–
Investment properties: relates to investment properties (including ground leases where relevant), both stabilised and
under development
–
Investments accounted for using the equity method: provides summarised financial information on the joint ventures
and investments where the Group has significant influence. The Group’s interests in its joint venture property portfolio
assets are typically held through investments in trusts
Inventories: relates to the Group’s ownership of industrial assets or land held for repositioning, development and sale
–
– Non-current assets classified as held for sale: relates to investment properties and investment properties included
within equity accounted investments which are expected to be sold within 12 months of the reporting date and are
currently being marketed for sale
– Financial assets at fair value through profit or loss: relates to minority interests in unlisted managed property funds
Note 8 Investment properties
The Group’s investment properties consist of properties held for long-term rental yields and/or capital appreciation and
property that is being constructed or developed for future use as investment property. Investment properties are initially
recognised at cost including transaction costs. Investment properties are subsequently recognised at fair value.
The basis of valuations of investment properties is fair value, being the price that would be received to sell the asset in an
orderly transaction between market participants at the measurement date.
Changes in fair values are recorded in the Consolidated Statement of Comprehensive Income. The gain or loss on disposal of
an investment property is calculated as the difference between the carrying amount of the asset at the date of disposal and
the net proceeds from disposal and is included in the Consolidated Statement of Comprehensive Income in the year of
disposal.
Subsequent redevelopment and refurbishment costs (other than repairs and maintenance) are capitalised to the investment
property where they result in an enhancement in the future economic benefits of the property.
Leasing fees incurred and incentives provided are capitalised and amortised over the lease periods to which they relate.
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Financial report
Note 8 Investment properties (continued)
a. Reconciliation
Opening balance at the beginning of the year
Additions
Acquisitions
Lease incentives
Amortisation of lease incentives
Rent straightlining
Disposals
Transfer to non-current assets classified as held
for sale
Transfer (to)/from inventories
Net fair value gain/(loss) of investment
properties1
Closing balance at the end of the year
Note
11
Office
$m
6,978.3
90.7
-
54.8
(79.2)
0.4
(479.0)
(385.0)
-
Industrial
$m
1,489.9
19.0
140.8
6.6
(8.6)
-
-
Other
$m
8.6
2.8
17.9
-
-
-
-
2022
$m
8,476.8
112.5
158.7
61.4
(87.8)
0.4
(479.0)
-
-
-
-
(385.0)
-
2021
$m
8,215.9
101.4
197.5
43.9
(83.8)
(1.2)
(13.0)
(272.8)
6.9
278.5
6,459.5
159.3
1,807.0
(0.1)
29.2
437.7
8,295.7
282.0
8,476.8
1 Comparative excludes the fair value loss recognised on the sale of 60 Miller Street, North Sydney NSW. At 30 June 2021 this asset was recognised as a
part of Non-current assets classified as held for sale.
Leased assets
The Group holds leasehold interests in a number of properties. Leasehold land that meets the definition of investment property
under AASB 140 Investment Property is measured at fair value and presented within Investment property. The leased asset is
measured initially at an amount equal to the corresponding lease liability. Subsequent to initial recognition, the leased asset is
recognised at fair value in the Consolidated Statement of Financial Position. Refer to note 14 for details of the Lease liabilities.
Acquisitions
2 Chilvers Street, Baldivis WA, was acquired as part of the APN acquisition for $1.9 million excluding transaction costs. Refer to
note 21 Business combinations for further details.
On 5 October 2021, settlement occurred for the acquisition of 53 Old Pacific Highway, North Pimpama QLD for $6.8 million
excluding acquisition costs.
On 5 October 2021, settlement occurred for the acquisition of 18 Andrews Street, Cannon Hill QLD for $8.4 million excluding
acquisition costs.
On 7 December 2021, settlement occurred for the acquisition of Stage 1 and 2 1-21 McPhee Drive, Berrinba QLD for $46.6 million
excluding acquisition costs.
On 23 February 2022, settlement occurred for the acquisition of 116-130 Gilmore Road, Berrinba QLD for $37.5 million excluding
acquisition costs.
On 20 April 2022, settlement occurred for the acquisition of 28 Jones Road, Brooklyn VIC for $46.0 million excluding acquisition
costs.
Disposals
On 3 August 2021, settlement occurred for the disposal of 60 Miller Street, North Sydney NSW for $275.0 million excluding
transaction costs.
On 29 April 2022, settlement occurred for the disposal of Dexus’s 50% interest in 309-321 Kent Street, Sydney NSW for
$401.3 million excluding transaction costs.
On 28 June 2022, settlement occurred for the disposal of 171 Edward Street, Brisbane QLD for $82.2 million excluding
transaction costs.
142
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Dexus 2022 Annual Report
Note 8 Investment properties (continued)
b. Valuation process
It is the policy of the Group to obtain independent valuations for each individual property at least once every three years by a
member of the Australian Property Institute of Valuers. It has been the Group’s practice in the majority of cases to have such
valuations performed every six months. Each valuation firm and its signatory valuer are appointed on the basis that they are
engaged for no more than three years except for properties under development and co-owned properties where it is deemed
appropriate to extend beyond this term. Independent valuations may be undertaken earlier where the Responsible Entity
believes there is potential for a change in the fair value of the property, being 5% of the asset value. At 30 June 2022, 181 out of
187 investment properties were independently externally valued.
The Group’s policy requires investment properties, including those held within investments accounted for using the equity
method, to be internally valued at least every six months at each reporting period (interim and full-year) unless they have been
independently externally valued. Internal valuations are compared to the carrying value of investment properties at the
reporting date. Where the Directors determine that the internal valuations present a more reliable estimate of fair value the
internal valuation is adopted as book value. Internal valuations are performed by the Group’s internal valuers who hold
recognised relevant professional qualifications and have previous experience as property valuers from major real estate
valuation firms.
An appropriate valuation methodology is utilised according to asset class. In relation to office and industrial assets this
includes the capitalisation approach (market approach) and the discounted cash flow approach (income approach). The
valuation is also compared to, and supported by, direct comparison to recent market transactions. The adopted
capitalisation rates and discount rates are determined based on industry expertise and knowledge and, where possible, a
direct comparison to third party rates for similar assets in a comparable location. Rental revenue from current leases and
assumptions about future leases, as well as any expected operational cash outflows in relation to the property, are also built
into each asset assessment of fair value.
In relation to development properties under construction for future use as investment property, where reliably measurable, fair
value is determined based on the market value of the property on the assumption it had already been completed at the
valuation date (using the methodology as outlined above) less costs still required to complete the project, including an
appropriate adjustment for industry benchmarked profit and development risk.
c. Sustainability valuation considerations
The Group engages independent valuation firms to assist in determining fair value of the investment property assets at each
reporting period. As qualified valuers, they are required to follow the RICS Valuation - Global Standards and accordingly their
valuations are required to take into account the sustainability features of properties being valued and the implications such
factors could have on property values in the short, medium and longer term.
Where relevant, the Group’s independent valuation firms note in their valuation reports that sustainability features are
considered as part of the valuation approach and outline that sustainability features have been influencing value for some
time.
Where the independent valuation firms give consideration to the impacts of sustainability, they are incorporating their
understanding of how market participants include sustainability in their bids and the impact on market valuations, noting that
valuers should reflect markets and not lead them.
d. Fair value measurement, valuation techniques and inputs
The following table represents the level of the fair value hierarchy and the associated unobservable inputs utilised in the fair
value measurement for each class of investment property including investment property held within investments accounted for
using the equity method.
Class of property
Office1
Fair value hierarchy
Level 3
Inputs used to measure fair value
Adopted capitalisation rate
Industrial
Level 3
Leased asset
Level 3
Adopted discount rate
Adopted terminal yield
Net market rental (per sqm)
Adopted capitalisation rate
Adopted discount rate
Adopted terminal yield
Net market rental (per sqm)
Adopted discount rate
1
Includes office developments and excludes car parks, retail and other.
Range of unobservable inputs
2022
4.13% - 6.13%
5.50% - 6.75%
4.50% - 6.50%
$223 - $1,589
3.38% - 9.75%
5.25% - 9.75%
3.63% - 9.75%
$50 - $709
2.26% - 6.40%
2021
4.00% - 6.25%
5.50% - 6.75%
4.25% - 6.50%
$223 - $1,662
3.88% - 9.75%
5.50% - 9.75%
4.13% - 9.75%
$40 - $850
3.50% - 8.15%
143
143
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Financial report
Note 8 Investment properties (continued)
Key estimates: inputs used to measure fair value of investment properties
Judgement is required in determining the following key assumptions:
– Adopted capitalisation rate: The rate at which net market rental revenue is capitalised to determine the value of a
property. The rate is determined with regard to market evidence and the prior external valuation
– Adopted discount rate: The rate of return used to convert cash flows, payable or receivable in the future, into present
value. For industrial and office properties, it reflects the opportunity cost of capital, that is, the rate of return the cash
can earn if put to other uses having similar risk. The rate is determined with regard to market evidence and the prior
external valuation. For leased assets, the discount rate is determined with reference to the Group’s incremental
borrowing rate
– Adopted terminal yield: The capitalisation rate used to convert the future net market rental revenue into an indication
of the anticipated value of the property at the end of the holding period when carrying out a discounted cash flow
calculation. The rate is determined with regard to market evidence and the prior external valuation
– Net market rental (per sqm): The net market rent is the estimated amount for which a property should lease between a
lessor and a lessee on appropriate lease terms in an arm’s length transaction
e. Impact of COVID-19 and economic environment on fair value of investment properties
There is a continuing level of uncertainty regarding the ultimate impact of COVID-19 on the Group’s investment property
valuations. As a result, the independent valuations incorporate a range of assumptions used in determining appropriate fair
values for investment properties as at 30 June 2022. The assumptions that have had the greatest impact on the valuations
are listed below:
– Valuers have adjusted market rental growth, downtime and incentive assumptions within their discounted cashflow (DCF)
– Some valuers have incorporated an allowance for the uncertainty in relation to the payment of rent with regards to the
Government’s Code of Conduct where the tenant pool comprises small to medium enterprises (SMEs) or where operating
hours have been impacted
– Capitalisation and discount rates have generally remained relatively stable for office assets and firmed for industrial assets
Since the end of the year, the Group has considered the current economic environment, noting recent inflationary impacts and
a rising interest rate climate and considers that the assumptions used in the valuations are appropriate for the purposes of
determining fair value of investment properties at 30 June 2022.
f. Sensitivity information
Significant movement in any one of the inputs listed in the table above may result in a change in the fair value of the Group’s
investment properties, including investment properties within investments accounted for using the equity method, as shown
below.
The estimated impact of a change in certain significant unobservable inputs would result in a change in the fair value as
follows:
A decrease of 25 basis points in the adopted capitalisation rate
An increase of 25 basis points in the adopted capitalisation rate
A decrease of 25 basis points in the adopted discount rate
An increase of 25 basis points in the adopted discount rate
A decrease of 5% in the net market rental (per sqm)
An increase of 5% in the net market rental (per sqm)
Office
Industrial
2022
$m
705.1
(634.8)
569.0
(522.3)
(637.1)
637.1
2021
$m
694.0
(626.7)
554.2
(510.4)
(646.4)
646.4
2022
$m
233.7
(207.8)
176.4
(161.2)
(187.5)
187.5
2021
$m
146.0
(131.8)
117.6
(108.3)
(136.3)
136.3
Generally, a change in the assumption made for the adopted capitalisation rate is often accompanied by a directionally
similar change in the adopted terminal yield. The adopted capitalisation rate forms part of the capitalisation approach while
the adopted terminal yield forms part of the discounted cash flow approach.
Under the capitalisation approach, the net market rental has a strong interrelationship with the adopted capitalisation rate as
the fair value of the investment property is derived by capitalising, in perpetuity, the total net market rent receivable. An
increase (softening) in the adopted capitalisation rate may offset the impact to fair value of an increase in the net market
rent. A decrease (tightening) in the adopted capitalisation rate may also offset the impact to fair value of a decrease in the
net market rent. A directionally opposite change in the net market rent and the adopted capitalisation rate may increase the
impact to fair value.
144
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Dexus 2022 Annual Report
Note 8 Investment properties (continued)
f. Sensitivity information (continued)
The discounted cash flow is primarily made up of the discounted cash flow of net income over the cash flow period and the
discounted terminal value (which is largely based upon market rents grown at forecast market rental growth rates capitalised
at an adopted terminal yield). An increase (softening) in the adopted discount rate may offset the impact to fair value of a
decrease (tightening) in the adopted terminal yield. A decrease (tightening) in the discount rate may offset the impact to fair
value of an increase (softening) in the adopted terminal yield. A directionally similar change in the adopted discount rate and
the adopted terminal yield may increase the impact to fair value.
A decrease (softening) in the forecast rental growth rate may result in a negative impact on the discounted cash flow
approach value while a strengthening may have a positive impact on the value under the same approach.
g. Investment properties pledged as security
Refer to note 15 for information on investment properties pledged as security.
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145
145
Financial report
Note 9 Investments accounted for using the equity method
a. Interest in joint ventures and associates
The below entities were formed in Australia and their principal activity is either property investment related in Australia or
investment in Australian and global listed real estate investment trusts.
Ownership interest
Name of entity
Dexus Office Trust Australia (DOTA)
Dexus 80C Trust
Dexus Martin Place Trust
Dexus Australian Logistics Trust (DALT)
Dexus Australian Logistics Trust No.2 (DALT2)
Bent Street Trust
Dexus 480 Q Holding Trust
AAIG Holding Trust1
Dexus Industrial Trust Australia (DITA)
Jandakot City Holdings Trust (JCHT)2
Dexus Kings Square Trust
Dexus Healthcare Property Fund (DHPF)
Dexus Industria REIT (DXI)3
Dexus Australian Logistics Trust No.3 (DALT3)
Site 7 Homebush Bay Trust4
Dexus Australia Commercial Trust (DACT)
Site 6 Homebush Bay Trust4
Dexus Convenience Retail REIT (DXC)5
SAHMRI 2 Holding Trust
Dexus Eagle Street Pier Trust
Mercatus Dexus Australia Partnership (MDAP)6
Dexus Australian Logistics Trust No.4 (DALT4)
Dexus Moorebank Trust
Jandakot Airport Holdings Trust (JAHT)2
Jandakot Airport Domestic Trust (JADT)2
RealTech Ventures
APN Global REIT Income Fund (GREIT)5
Dexus Walker Street Trust
Dexus Real Estate Partnership 1 (DREP1)7
Dexus Regional Property Fund5
Grosvenor Place Holding Trust4,8
APN Asian REIT Fund (ARI)5
Dexus Development Fund No. 25
Dexus Creek Street Trust
Divvy Parking Pty Limited
Total assets - investments accounted for using the equity method9
2022
%
50.0
75.0
50.0
51.0
51.0
33.3
50.0
49.4
50.0
33.4
50.0
23.1
17.5
51.0
50.0
10.0
50.0
9.0
50.0
50.0
10.0
51.0
50.0
32.0
34.7
62.1
55.7
50.0
36.6
3.3
50.0
2.4
4.8
50.0
24.8
2021
%
50.0
75.0
50.0
51.0
51.0
33.3
50.0
-
50.0
-
50.0
23.1
-
51.0
50.0
10.0
50.0
-
50.0
50.0
-
-
-
-
-
62.1
-
50.0
-
-
50.0
-
-
50.0
24.8
2022
$m
2,408.4
1,238.3
993.0
703.1
544.3
386.3
382.1
342.7
300.1
253.0
250.3
243.4
202.8
109.0
90.9
65.1
55.3
49.9
46.5
39.4
38.7
32.2
22.6
21.2
17.3
13.7
9.2
9.1
8.2
1.4
1.4
1.2
1.2
0.6
-
2021
$m
2,573.1
1,154.5
986.7
559.3
373.2
375.6
385.7
-
238.6
-
251.4
-
-
77.0
87.4
62.9
43.8
-
26.1
35.5
-
-
-
-
-
11.5
-
9.2
-
-
454.6
-
-
205.7
1.0
8,881.9
8,070.4
1 On 22 July 2021, Dexus acquired a 49.4% interest in a holding unit trust that owns Capital Square Tower 1 at 98 Mounts Bay Road in Perth for a total
consideration of $339.0 million excluding acquisition costs.
2 On 1 November 2021, Dexus Holdings Pty Limited acquired 100% of Jandakot City Holdings Pty Limited (JCH) and 49% of Jandakot Airport Holdings Pty
Limited (JAH) through the newly established Jandakot City Holdings Trust (JCHT) and Jandakot Airport Holdings Trust (JAHT). On 19 November 2021,
shortly after initial settlement, DXI acquired a 33.3% interest in JCHT and a 68% interest in JAHT. On 1 April 2022, Dexus Projects Pty Limited settled on
the remaining 51% interest of JAH through the establishment of Jandakot Airport Domestic Trust (JADT), with Cbus Super acquiring a 33.3% interest in
each of JCH and JAH by acquiring a 33.3% interest in JCHT and a 65.3% interest in JADT. The joint venture which owns 100% of Jandakot airport, Perth,
is held in the following proportions: Dexus 33.4%, DXI 33.3% and Cbus Super 33.3%. The existing structure included senior asset-level debt of
$405,000,000, reflecting a combined equity commitment of $895,000,000 excluding acquisition costs.
3 The investment in DXI was previously classified as a financial asset at fair value through profit and loss. The APN Property Group acquisition resulted in
the Group obtaining significant influence over the investment and adopting the equity method of accounting. Dexus acquired a further 15.3% interest in
DXI as part of the APN Property Group acquisition (refer to note 21 for further details) and subsequently increased its interest in DXI to 17.5%.
4 These entities are 50% owned by Dexus Office Trust Australia. The Group’s economic interest is 75% when combined with the interest held by DOTA.
5 Acquired as part of the APN Property Group acquisition. Refer to note 21 for further details.
6 On 8 July 2021, Mercatus Dexus Australia Partnership (MDAP), a joint venture with Mercatus Co-operative Limited (Mercatus) settled on the acquisition
of a 33.3% interest in 1 Bligh Street, Sydney for $375.0 million excluding acquisition costs.
7 DREP1 was established on 27 May 2021. Its principal activity is to make investments generating opportunistic returns.
8 On 2 December 2021, settlement occurred for the disposal of Grosvenor Place, 225 George Street, Sydney, NSW.
9 The Group’s share of investment properties in the investments accounted for using the equity method was $9,322.8 million (June 2021: $7,474.6 million).
Additionally, held for sale assets in the investments accounted for using the equity method was $77.2 million (June 2021: $694.2 million). These
investments are accounted for using the equity method as a result of contractual arrangements requiring unanimous decisions on all relevant matters.
146
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Dexus 2022 Annual Report
Note 9 Investments accounted for using the equity method (continued)
b. Impairment assessment on Investments accounted for using the equity method
At each reporting date, management assess whether there is any indication of impairment to the carrying value of
Investments accounted for using the equity method, which in certain instances may include notional goodwill recognised on
acquisition where relevant. As a result, the entire carrying amount of the investment is tested for impairment in accordance
with AASB 136 Impairment of Assets as a single asset, by comparing its recoverable amount (higher of value in use and fair
value less costs to sell) with its carrying amount.
As part of the assessment to determine whether any indicators of impairment exist at the reporting date, the impact of
COVID-19 and the current economic environment, noting recent inflationary impacts and a rising interest rate climate, has
been taken into consideration.
The main risk to the value of the investments accounted for using the equity method is the fair value of the underlying
investment properties. Note 8 gives further explanation of the approach taken to measure the fair value of investment
properties in light of COVID-19. Any fair value movements are recorded within share of net profit of investments accounted for
using the equity method in the Consolidated Statement of Comprehensive Income. During the year, the Divvy Parking Pty
Limited investment was impaired to nil. No impairment losses were recognised for the period ending 30 June 2021.
c. Summarised financial information for individually material joint ventures and associates and equity accounted
investments
The following table provides summarised financial information for the joint ventures and associates and equity accounted
investments which, in the opinion of the directors, are material to the Group. The information disclosed reflects the amounts
presented in the Financial Statements of the relevant joint ventures and associates and not Dexus’ share of those amounts.
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Financial report
Note 9 Investments accounted for using the equity method (continued)
d. Summarised financial information for individually material joint ventures and associates
Summarised Statement of Financial Position
Current assets
Cash and cash equivalents
Non-current assets classified as held for sale
Other current assets
Total current assets
Non-current assets
Investment properties
Investments accounted for using the equity
method
Other non-current assets
Total non-current assets
Current liabilities
Provision for distribution
Borrowings
Other current liabilities
Total current liabilities
Non-current liabilities
Borrowings
Other non-current liabilities
Total non-current liabilities
Net assets
Reconciliation to carrying amounts:
Opening balance at the beginning of the
year
Additions
Profit for the year
Distributions received/receivable
Closing balance at the end of the year
Group's share in $m
Capitalised transaction costs
Notional goodwill
Group's carrying amount
Dexus Office
Trust Australia
Dexus 80C
Trust
Dexus Martin
Place Trust
2022
$m
57.7
-
170.6
228.3
2021
$m
47.2
-
20.0
67.2
2022
$m
6.6
-
29.0
35.6
2021
$m
5.4
-
48.2
53.6
2022
$m
14.3
-
4.8
19.1
2021
$m
4.5
-
5.2
9.7
4,479.8
4,559.8
1,664.0
1,566.5
1,996.9
1,920.5
147.5
49.3
4,676.6
585.7
48.4
5,193.9
-
-
1,664.0
-
-
1,566.5
-
-
1.8
1,998.7
76.0
1,996.5
30.0
22.9
35.2
88.1
-
-
-
-
33.1
0.1
59.1
92.3
-
22.6
-
22.6
3.9
-
44.6
48.5
-
-
-
-
2.8
-
78.0
80.8
-
-
-
-
0.3
-
31.6
31.9
-
-
-
-
6.7
-
26.2
32.9
-
-
-
-
4,816.8
5,146.2
1,651.1
1,539.3
1,985.9
1,973.3
5,146.2
5,392.8
1,539.3
1,106.8
1,973.3
1,853.0
142.2
321.5
(793.1)
4,816.8
2,408.4
-
-
64.2
235.8
(546.6)
5,146.2
2,573.1
-
-
35.3
122.0
(45.5)
1,651.1
1,238.3
-
-
436.1
52.8
(56.4)
1,539.3
1,154.5
-
-
70.0
30.6
(88.0)
1,985.9
993.0
-
-
116.0
50.4
(46.1)
1,973.3
986.7
-
-
2,408.4
2,573.1
1,238.3
1,154.5
993.0
986.7
Summarised Statement of Comprehensive Income
Property revenue
Property revaluations
Gain/(loss) on sale of investment properties
Interest income
Share of net profit of investments accounted
for using the equity method
Other income
Property expenses
Finance costs
Income tax expense
Other expenses
Net profit/(loss) for the year
Total comprehensive income/(loss) for the
year
228.0
143.5
-
-
38.3
1.3
(72.8)
(1.5)
-
(15.3)
321.5
278.3
50.3
-
-
16.4
0.7
(92.4)
(1.5)
-
(16.0)
235.8
64.8
88.8
-
-
-
-
(22.6)
-
-
(9.0)
122.0
46.6
29.5
-
0.1
-
(0.1)
(14.9)
-
-
(8.4)
52.8
81.9
(11.6)
-
0.1
-
-
82.2
(3.8)
11.4
-
-
0.1
(28.7)
(28.9)
-
-
(11.1)
30.6
-
-
(10.6)
50.4
321.5
235.8
122.0
52.8
30.6
50.4
148
148
Dexus 2022 Annual Report
Dexus Australian
Logistics Trust
Dexus Australian
Logistics Trust No.2
Bent Street Trust
Dexus 480 Q Holding
Trust
2022
$m
16.6
-
4.6
21.2
2021
$m
10.6
-
3.8
14.4
2022
$m
9.4
-
2.7
12.1
2021
$m
35.7
-
1.2
36.9
2022
$m
4.6
-
1.0
5.6
2021
$m
3.8
-
2.1
5.9
2022
$m
2.8
-
2.1
4.9
2021
$m
5.6
-
3.0
8.6
1,372.6
1,096.6
1,071.0
719.9
1,166.0
1,130.0
773.5
775.5
-
0.6
-
0.6
-
-
-
-
-
-
-
-
1,373.2
1,097.2
1,071.0
719.9
1,166.0
1,130.0
-
0.2
773.7
-
0.2
775.7
8.5
-
7.3
15.8
-
-
-
-
8.4
-
6.5
14.9
-
-
-
-
5.5
-
10.4
15.9
-
-
-
-
1.5
-
23.6
25.1
-
-
-
-
3.8
-
8.9
12.7
-
-
-
-
4.6
-
4.4
9.0
-
-
-
-
3.5
-
11.0
14.5
-
-
-
-
4.5
-
8.4
12.9
-
-
-
-
1,378.6
1,096.7
1,067.2
731.7
1,158.9
1,126.9
764.1
771.4
1,096.7
912.0
6.4
313.9
(38.4)
-
237.0
(52.3)
731.7
92.8
259.0
(16.3)
1,378.6
1,096.7
1,067.2
703.1
559.3
544.3
-
-
-
-
-
-
255.1
277.3
203.1
(3.8)
731.7
373.2
-
-
1,126.9
1,076.3
4.5
69.6
(42.1)
1,158.9
386.3
-
-
20.2
89.4
(59.0)
1,126.9
375.6
-
-
771.4
3.3
31.1
(41.7)
764.1
382.1
-
-
780.1
-
31.4
(40.1)
771.4
385.7
-
-
703.1
559.3
544.3
373.2
386.3
375.6
382.1
385.7
64.4
272.2
-
-
-
0.1
62.3
195.2
30.3
237.6
-
-
-
-
-
-
-
-
(16.9)
(16.4)
(5.8)
-
-
(5.9)
313.9
-
-
(4.1)
237.0
-
-
(3.1)
259.0
7.9
197.9
-
0.1
-
(0.1)
(1.4)
-
-
(1.3)
203.1
313.9
237.0
259.0
203.1
56.1
33.8
56.6
47.4
48.4
1.4
49.9
1.9
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(14.8)
(14.6)
(14.4)
(16.0)
-
-
(5.5)
69.6
69.6
-
-
-
89.4
89.4
-
-
(4.3)
31.1
31.1
-
-
(4.4)
31.4
31.4
i
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v
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149
149
Financial report
Note 9 Investments accounted for using the equity method (continued)
d. Summarised financial information for individually material joint ventures and associates (continued)
AAIG Holding Trust
Dexus Industrial
Trust Australia
Jandakot City Holdings
Trust
Summarised Statement of Financial Position
Current assets
Cash and cash equivalents
Non-current assets classified as held for sale
Other current assets
Total current assets
Non-current assets
Investment properties
Investments accounted for using the equity
method
Other non-current assets
Total non-current assets
Current liabilities
Provision for distribution
Borrowings
Other current liabilities
Total current liabilities
Non-current liabilities
Borrowings
Other non-current liabilities
Total non-current liabilities
Net assets
Reconciliation to carrying amounts:
Opening balance at the beginning of the
year
Additions
Profit for the year
Distributions received/receivable
Closing balance at the end of the year
Group's share in $m
Capitalised transaction costs
Notional goodwill
Group's carrying amount
Summarised Statement of Comprehensive Income
Property revenue
Property revaluations
Gain/(loss) on sale of investment properties
Interest income
Share of net profit of investments accounted
for using the equity method
Other income
Property expenses
Finance costs
Income tax expense
Other expenses
Net profit/(loss) for the year
Total comprehensive income/(loss) for the
year
2022
$m
24.5
-
36.0
60.5
979.1
-
159.7
1,138.8
47.7
-
8.4
56.1
-
450.0
(1.0)
449.0
694.2
-
684.5
58.3
(48.6)
694.2
342.7
-
-
342.7
68.6
0.2
-
14.0
-
-
(12.8)
(9.2)
-
(2.5)
58.3
58.3
2021
$m
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
2022
$m
7.6
-
1.2
8.8
2021
$m
8.4
-
0.9
9.3
2022
$m
17.7
-
4.0
21.7
598.0
474.9
1,295.3
-
0.2
-
-
-
0.3
598.2
474.9
1,295.6
4.8
-
2.0
6.8
-
-
-
-
4.7
-
2.4
7.1
-
-
-
-
600.2
477.1
39.9
-
383.1
423.0
-
-
146.5
146.5
747.8
477.1
436.8
-
-
-
142.0
(18.9)
600.2
300.1
-
-
90.5
(50.2)
477.1
238.6
-
-
803.6
(15.9)
(39.9)
747.8
249.8
3.2
-
300.1
238.6
253.0
24.5
124.2
24.0
72.6
43.8
(34.9)
-
-
-
(0.1)
(4.9)
-
-
(1.7)
142.0
-
-
-
-
(4.7)
-
-
(1.4)
90.5
-
-
-
-
(9.5)
(11.8)
-
(3.5)
(15.9)
142.0
90.5
(15.9)
2021
$m
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
150
150
Dexus 2022 Annual Report
Dexus Kings Square
Trust
Dexus Healthcare
Property Fund
Dexus Industria REIT
Dexus Australian
Logistics Trust No.3
2022
$m
2.3
-
1.1
3.4
2021
$m
3.5
-
0.7
4.2
2022
$m
1.9
-
4.4
6.3
2021
$m
9.2
-
10.2
19.4
2022
$m
5.6
-
22.1
27.7
504.7
507.5
1,140.1
888.0
1,319.4
-
-
-
-
46.4
33.0
26.0
30.6
317.0
51.6
504.7
507.5
1,219.5
944.6
1,688.0
2.9
-
4.5
7.4
-
-
-
-
3.6
-
5.4
9.0
-
-
-
-
9.6
-
7.1
16.7
-
131.0
20.9
151.9
500.7
502.7
1,057.2
502.7
1.3
25.0
(28.3)
500.7
250.3
-
-
469.0
-
60.8
(27.1)
502.7
251.4
-
-
683.3
250.0
162.5
(38.6)
1,057.2
243.4
-
-
7.5
-
7.1
14.6
-
246.3
19.8
266.1
683.3
453.6
170.0
84.8
(25.1)
683.3
157.6
-
-
13.7
0.3
20.9
34.9
-
475.9
51.4
527.3
1,153.5
-
1,034.8
169.4
(50.7)
1,153.5
202.8
-
-
250.3
251.4
243.4
157.6
202.8
37.5
1.5
36.4
38.3
-
-
-
-
-
-
-
-
(11.2)
(11.2)
-
-
(2.8)
25.0
25.0
-
-
(2.7)
60.8
60.8
50.3
110.9
-
2.2
19.8
-
(7.2)
(6.9)
-
(6.6)
162.5
162.5
30.7
67.0
-
1.3
(0.3)
-
(3.1)
(6.0)
-
(4.8)
84.8
84.8
72.5
114.7
-
-
-
17.8
(15.3)
(9.0)
(3.7)
(7.6)
169.4
169.4
2021
$m
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
2022
$m
2.5
-
12.9
15.4
2021
$m
5.3
-
11.4
16.7
203.7
140.5
-
-
-
-
203.7
140.5
1.8
-
2.8
4.6
-
-
-
2.4
-
2.8
5.2
-
-
-
214.5
152.0
152.0
42.1
27.0
(6.6)
214.5
109.0
-
-
-
150.5
3.9
(2.4)
152.0
77.0
-
-
109.0
77.0
10.5
20.7
-
-
-
-
2.6
2.2
-
-
-
-
(3.4)
(0.8)
-
-
(0.8)
27.0
27.0
-
-
(0.1)
3.9
3.9
i
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t
s
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v
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I
151
151
Financial report
Note 9 Investments accounted for using the equity method (continued)
d. Summarised financial information for individually material joint ventures and associates (continued)
Summarised Statement of Financial
Position
Current assets
Cash and cash equivalents
Non-current assets classified as held for
sale
Other current assets
Total current assets
Non-current assets
Investment properties
Investments accounted for using the equity
method
Other non-current assets
Total non-current assets
Current liabilities
Provision for distribution
Borrowings
Other current liabilities
Total current liabilities
Non-current liabilities
Borrowings
Other non-current liabilities
Total non-current liabilities
Net assets
Site 7 Homebush
Bay Trust
Dexus Australian
Commercial Trust
Site 6 Homebush
Bay Trust
2022
$m
3.7
-
0.3
4.0
2021
$m
3.9
-
0.1
4.0
2022
$m
12.4
-
1.9
14.3
2021
$m
13.5
-
1.7
15.2
2022
$m
2.0
-
0.2
2.2
2021
$m
2.4
-
-
2.4
186.5
180.0
650.0
627.5
110.5
87.0
-
-
-
-
-
0.2
-
0.4
-
-
-
-
186.5
180.0
650.2
627.9
110.5
87.0
6.4
-
1.6
8.0
-
0.8
0.8
0.8
-
8.5
9.3
-
-
-
4.9
-
7.1
12.0
-
-
-
-
-
13.0
13.0
-
-
-
0.3
-
1.2
1.5
-
0.6
0.6
0.6
-
1.3
1.9
-
-
-
181.7
174.7
652.5
630.1
110.6
87.5
Reconciliation to carrying amounts:
Opening balance at the beginning of the
year
Additions
Profit for the year
Distributions received/receivable
Closing balance at the end of the year
Group's share in $m
Capitalised transaction costs
Notional goodwill
Group's carrying amount
Summarised Statement of Comprehensive Income
Property revenue
Property revaluations
Gain/(loss) on sale of investment properties
Interest income
Share of net profit of investments
accounted for using the equity method
Other income
Property expenses
Finance costs
Income tax expense
Other expenses
Net profit/(loss) for the year
Total comprehensive income/(loss) for the
year
174.7
0.5
12.9
(6.4)
181.7
90.9
-
-
124.2
5.9
47.0
(2.4)
174.7
87.4
-
-
630.1
-
27.4
(5.0)
652.5
65.1
-
-
686.4
(0.8)
(51.5)
(4.0)
630.1
62.9
-
-
87.5
-
29.9
(6.8)
110.6
55.3
-
-
92.6
-
1.5
(6.6)
87.5
43.8
-
-
90.9
87.4
65.1
62.9
55.3
43.8
10.9
5.3
5.4
44.5
31.9
9.1
34.7
(72.2)
9.2
23.4
9.1
(4.9)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(2.7)
(2.4)
(11.2)
(11.3)
(2.4)
(2.4)
-
-
(0.6)
12.9
-
-
(0.5)
47.0
-
-
(2.4)
27.4
-
-
(2.7)
(51.5)
-
-
(0.3)
29.9
-
-
(0.3)
1.5
12.9
47.0
27.4
(51.5)
29.9
1.5
152
152
Dexus 2022 Annual Report
Dexus Convenience
Retail REIT
Grosvenor Place
Holding Trust
Dexus Creek
Street Trust
Other1
Total
2022
$m
2021
$m
5.2
-
4.9
10.1
850.0
-
13.0
863.0
8.0
-
10.0
18.0
299.6
1.0
300.6
554.5
-
503.9
82.6
(32.0)
554.5
49.9
-
-
49.9
50.3
30.8
-
0.1
-
18.2
(7.6)
(3.4)
-
(5.8)
82.6
82.6
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
2022
$m
48.8
-
(0.3)
48.5
-
-
-
-
(0.4)
-
46.2
45.8
-
-
-
2021
$m
1.3
-
927.5
928.8
-
-
0.1
0.1
16.1
-
3.6
19.7
-
-
-
2022
$m
2.6
-
(0.4)
2.2
-
-
-
-
0.6
-
0.4
1.0
-
-
-
2.7
909.2
1.2
411.4
909.2
966.4
21.3
33.7
(961.5)
2.7
1.4
-
-
-
(15.7)
(41.5)
909.2
454.6
-
-
411.4
11.3
(20.2)
(401.3)
1.2
0.6
-
-
399.0
6.0
21.0
(14.6)
411.4
205.7
-
-
2021
$m
3.0
-
1.9
4.9
2022
$m
40.2
-
46.8
87.0
2021
$m
16.4
-
4.9
21.3
2022
$m
2021
$m
289.0
-
349.9
638.9
179.7
-
1,042.8
1,222.5
418.0
532.8
227.5
20,893.9
15,319.7
-
0.2
518.5
104.3
0.1
9.5
1,029.4
414.2
611.8
166.0
418.2
1,155.6
237.1
22,337.5
16,097.5
4.7
-
7.0
11.7
-
-
-
9.8
12.6
24.6
47.0
142.5
80.5
223.0
972.6
161.8
769.5
57.9
(16.6)
972.6
258.5
-
3.4
1.9
0.5
11.6
14.0
16.9
65.7
82.6
205.5
35.8
668.9
910.2
1,499.0
300.7
1,799.7
103.9
0.6
268.9
373.4
285.8
85.5
371.3
161.8
20,266.5
16,575.3
93.6
33.9
35.9
(1.6)
161.8
80.2
-
3.1
16,575.3
15,097.7
4,477.3
1,940.2
(2,726.3)
1,279.3
1,178.1
(979.8)
20,266.5
16,575.3
8,875.3
8,067.3
3.2
3.4
-
3.1
1.4
454.6
0.6
205.7
261.9
83.3
8,881.9
8,070.4
25.2
(4.8)
-
17.8
-
0.1
46.3
(48.8)
-
-
-
-
16.5
(23.4)
(4.0)
-
-
-
(4.6)
(13.2)
(7.0)
-
-
-
33.7
33.7
-
-
-
(15.7)
(15.7)
-
-
(2.3)
(20.2)
(20.2)
22.4
9.1
-
-
-
0.1
(8.3)
-
-
(2.3)
21.0
21.0
11.1
35.7
-
0.1
38.7
0.4
(7.4)
(1.1)
0.2
(19.8)
57.9
6.4
36.6
-
-
-
2.5
(6.8)
(0.2)
-
(2.6)
35.9
1,036.7
1,179.1
(4.0)
34.3
96.8
37.8
(283.2)
(42.9)
(3.5)
(110.9)
1,940.2
801.8
662.8
11.4
1.5
16.1
3.2
(248.8)
(7.7)
-
(62.2)
1,178.1
57.9
35.9
1,940.2
1,178.1
1 The Group also has interests in a number of immaterial joint ventures that are accounted for using the equity method.
153
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Note 10 Inventories
Development properties held for repositioning, construction and sale are recorded at the lower of cost or net realisable value.
Cost is assigned by specific identification and includes the cost of acquisition, and development and holding costs such as
borrowing costs, rates and taxes. Holding costs incurred after completion of development are expensed.
Development revenue includes proceeds on the sale of inventory and revenue earned through the provision of development
services on assets sold as inventory. Revenue earned on the provision of development services is recognised using the
percentage complete method. The stage of completion is measured by reference to costs incurred to date as a percentage
of estimated total costs for each contract. Where the project result can be reliably estimated, development services revenue
and associated expenses are recognised in profit or loss. Where the project result cannot be reliably estimated, profits are
deferred and the difference between consideration received and expenses incurred is carried forward as either a receivable
or payable. Development services revenue and expenses are recognised immediately when the project result can be reliably
estimated.
Transfers from investment properties to inventories occur when there is a change in intention regarding the use of the property
from an intention to hold for rental income or capital appreciation purposes to an intention to develop and sell. The transfer
price is recorded as the fair value of the property as at the date of transfer. Development activities will commence
immediately after they transfer.
Key estimates: Net Realisable Value (NRV) of inventories
NRV is determined using the estimated selling price in the ordinary course of business less estimated costs to bring
inventories to their finished condition, including marketing and selling expenses. NRV is based on the most reliable
evidence available at the time and the amount the inventories are expected to be realised. These key assumptions are
reviewed annually or more frequently if indicators of impairment exist. No impairment provisions have been recognised.
2022
$m
54.4
54.4
-
-
54.4
2022
$m
178.2
-
-
(138.6)
-
14.8
54.4
2021
$m
137.2
137.2
41.0
41.0
178.2
2021
$m
335.8
(6.9)
9.6
(176.2)
4.7
11.2
178.2
Note
8
a. Development properties held for sale
Current assets
Development properties held for sale
Total current assets - inventories
Non-current assets
Development properties held for sale
Total non-current assets - inventories
Total assets - inventories
b. Reconciliation
Opening balance at the beginning of the year
Transfer from/(to) investment properties
Acquisitions
Disposals
Reversal of impairment
Additions
Closing balance at the end of the year
154
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Dexus 2022 Annual Report
Note 10 Inventories (continued)
Disposals
On 9 August 2021, settlement occurred for the disposal of 436-484 Victoria Road, Gladesville NSW for $55.0 million excluding
transaction costs.
On 4 November 2021, settlement occurred for the disposal of a 49% interest in 7 Custom Place, Truganina VIC, 9 Custom Place,
Truganina VIC, 8 Felstead Drive, Truganina VIC, and 58 Foundation Drive, Truganina VIC, for gross proceeds of $56.0 million
excluding transaction costs.
On 17 November 2021, settlement occurred for the disposal of 22 Business Park Drive, Ravenhall VIC for $13.5 million excluding
transaction costs.
On 2 December 2021, settlement occurred for the disposal of a 50% interest in 11 Lord Street, Botany NSW for gross proceeds
of $48.0 million excluding transaction costs.
Impact of COVID-19 on Inventories
An assessment of whether the project result is impacted as a result of COVID-19 has been performed. There has been minimal
impact on development services revenue and expenses as a result of project delays, changes in assessments related to future
sales prices or changes in costs expected to be incurred to complete projects.
Key estimates used to determine the Net Realisable Value (NRV) of inventories have been reviewed and updated in light of
COVID-19. No impairment provisions have been recognised.
Note 11 Non-current assets classified as held for sale
Non-current assets are classified as held for sale if their carrying amount will be recovered principally through a sale
transaction rather than through continuing use, and a sale is considered highly probable.
Non-current assets classified as held for sale are presented separately from the other assets in the Consolidated Statement
of Financial Position. Non-current assets classified as held for sale relate to investment properties measured at fair value.
At 30 June 2022, the balance related to 383-395 Kent Street, Sydney NSW.
At 30 June 2021, the balance related to 60 Miller Street, North Sydney NSW.
Note 12 Financial assets at fair value through profit or loss
The Group's investments in financial assets consists of minority equity interests in Australian managed property funds. Financial
assets are initially recognised at cost, excluding transaction costs. Transaction costs are expensed as incurred in the
Consolidated Statement of Comprehensive Income. Financial assets are subsequently measured at fair value with any
realised or unrealised gains being recognised in the Consolidated Statement of Comprehensive Income in the period in which
they arise.
a. Classification of financial assets at fair value through profit or loss (FVPL)
Non-current assets
Equity investments in Australian managed funds
Total current financial assets at fair value through profit or loss
b. Amounts recognised in profit or loss
During the year, the following gains/(losses) were recognised in profit or loss:
Fair value gains/(losses) on equity investments in Australian managed funds
Total gains/(losses) at fair value through profit or loss
2022
$m
186.5
186.5
2022
$m
6.5
6.5
2021
$m
180.5
180.5
2021
$m
-
-
155
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Note 12 Financial assets at fair value through profit or loss (continued)
c. Fair value measurement
Refer to note 13 for the methods used in the determination and disclosure of the fair value of financial instruments.
Equity investments in Australian managed funds are measured at Level 3 using unit prices which are based on the net assets
of the relevant fund, which is largely comprised of investment property held at fair value. Recent arm’s length transactions, if
any, are also taken into consideration. During the year, there were no transfers between Level 1, 2 and 3 fair value
measurement.
d. Equity price risks
The Group is exposed to equity price risk arising from investments held and classified as at fair value through profit or loss. The
exposure to equity price risk at the end of the reporting period, assuming equity prices had been 10% higher or lower while all
other variables were held constant, would increase/decrease net profit by $18.6 million (June 2021: $18.0 million).
156
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Dexus 2022 Annual Report
Capital and financial risk management
and working capital
In this section
The Group’s overall risk management program focuses on reducing volatility from impacts of movements in financial
markets and seeks to minimise potential adverse effects on the financial performance of the Group.
Note 13 Capital and financial risk management outlines how the Group manages its exposure to a variety of financial risks
(interest rate risk, foreign currency risk, liquidity risk and credit risk) and details the various derivative financial instruments
entered into by the Group.
The Board determines the appropriate capital structure of the Group, how much is borrowed from financial institutions and
capital markets (debt), and how much is raised from security holders (equity) in order to finance the Group’s activities both
now and in the future. This capital structure is detailed in the following notes:
– Debt: Lease liabilities in note 14, Interest bearing liabilities in note 15, and Commitments and contingencies in note 16
– Equity: Contributed equity in note 17 and Reserves in note 18
Note 19 provides a breakdown of the working capital balances held in the Consolidated Statement of Financial Position.
Note 13 Capital and financial risk management
Capital and financial risk management is carried out through a centralised treasury function which is governed by a Board
approved Treasury Policy. The Group has an established governance structure which consists of the Group Management
Committee and Capital Markets Committee.
The Board has appointed a Group Management Committee responsible for achieving Dexus’ goals and objectives, including
the prudent financial and risk management of the Group. A Capital Markets Committee has been established to advise the
Group Management Committee.
The Capital Markets Committee is a management committee that is accountable to the Board. It convenes at least quarterly
and conducts a review of financial risk management exposures including liquidity, funding strategies and hedging. It is also
responsible for the development of financial risk management policies and funding strategies for recommendation to the
Board, and the approval of treasury transactions within delegated limits and powers.
a. Capital risk management
The Group manages its capital to ensure that entities within the Group will be able to continue as a going concern while
maximising the return to owners through the optimisation of the debt and equity balance.
The capital structure of the Group consists of debt, cash and cash equivalents and equity attributable to security holders. The
Group continuously monitors its capital structure and it is managed in consideration of the following factors:
– The cost of capital and the financial risks associated with each class of capital
– Gearing levels and other debt covenants
– Potential impacts on net tangible assets and security holders’ equity
– Potential impacts on the Group’s credit rating
– Other market factors
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Financial report
Note 13 Capital and financial risk management (continued)
a. Capital risk management (continued)
The Group has a stated target gearing level of 30% to 40%. The table below details the calculation of the gearing ratio in
accordance with its primary financial covenant requirements.
Total interest bearing liabilities1
Total tangible assets2
Gearing ratio
Gearing ratio (look-through)3
2022
$m
4,653.8
18,232.3
25.5%
26.9%4
2021
$m
4,629.1
17,447.1
26.5%
26.7%
1 Total interest bearing liabilities excludes deferred borrowing costs and includes the impact of foreign currency fluctuations of cross-currency swaps.
2 Total tangible assets comprise total assets less intangible assets, derivatives and deferred tax balances.
3 Adjusted for cash and debt in equity accounted investments.
4 Excluding Dexus’s share of co-investments in pooled funds. Look-through gearing including Dexus’s share of co-investments in pooled funds was 27.8%
as at 30 June 2022.
The Group is rated A- by Standard & Poor’s (S&P) and A3 by Moody’s. The Group is required to comply with certain financial
covenants in respect of its interest bearing liabilities. During the 2022 and 2021 reporting periods, the Group was in compliance
with all of its financial covenants.
DXFM is the Responsible Entity for the managed investment schemes (DPT and DXO) that are stapled to form the Group. DXFM
has been issued with an Australian Financial Services Licence (AFSL). The licence is subject to certain capital requirements
including the requirement to maintain liquidity above specified limits. DXFM must also prepare rolling cash projections over at
least the next 12 months and demonstrate it will have access to sufficient financial resources to meet its liabilities that are
expected to be payable over that period. Cash projections and assumptions are approved, at least quarterly, by the Board of
the Responsible Entity.
Dexus Wholesale Property Limited (DWPL), a wholly owned entity, has been issued with an AFSL as it is the responsible entity
for Dexus Wholesale Property Fund (DWPF) and Dexus ADPF (DADPF). Dexus Wholesale Management Limited (DWML), a wholly
owned entity, has been issued with an AFSL as it is the trustee of third party managed funds. Dexus Wholesale Funds Limited
(DWFL), a wholly owned entity, has been issued with an AFSL as it is the responsible entity for Dexus Healthcare Property Fund
(DHPF). Dexus Investment Management Limited (DIML), a wholly owned entity, has been issued with an AFSL as the responsible
entity for Dexus Industrial Fund (DIF), a wholly owned entity. Dexus Asset Management Limited (DXAM), a wholly owned entity,
has been issued with an AFSL as it is the responsible entity of third party managed funds. Dexus RE Limited (DXRE), a wholly
owned entity, has been issued with an AFSL as the responsible entity for APD Trust, a wholly owned entity. These entities are
subject to the capital requirements described above.
b. Financial risk management
The Group’s overall risk management program focuses on the unpredictability of financial markets and seeks to minimise
potential adverse effects on the financial performance of the Group. The Group’s principal financial instruments, other than
derivatives, comprise cash, bank loans and capital markets issuance. The main purpose of financial instruments is to manage
liquidity and hedge the Group’s exposure to financial risks namely:
– Interest rate risk
– Foreign currency risk
– Liquidity risk
– Credit risk
The Group uses derivatives to reduce the Group’s exposure to fluctuations in interest rates and foreign exchange rates. These
derivatives create an obligation or a right that effectively transfers one or more of the risks associated with an underlying
financial instrument, asset or obligation. Derivative financial instruments that the Group may use to hedge its risks include:
– Interest rate swaps and interest rate options (together interest rate derivatives)
– Cross-currency interest rate swaps and foreign exchange contracts
– Other derivative contracts
The Group does not trade in interest rate or foreign exchange related derivative instruments for speculative purposes. The
Group uses different methods to measure the different types of risks to which it is exposed, including monitoring the current
and forecast levels of exposure and conducting sensitivity analysis.
158
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Dexus 2022 Annual Report
Note 13 Capital and financial risk management (continued)
b. Financial risk management (continued)
i. Market risk
Interest rate risk
Interest rate risk arises from interest bearing financial assets and liabilities that the Group utilises. Non-derivative interest
bearing financial instruments are predominantly short term liquid assets and long term debt issued at fixed rates which expose
the Group to fair value interest rate risk as the Group may pay higher interest costs than if it were at variable rates. The
Group’s borrowings which have a variable interest rate give rise to cash flow interest rate risk due to movements in variable
interest rates.
The Group’s risk management policy for interest rate risk seeks to minimise the effects of interest rate movements on its asset
and liability portfolio through active management of the exposures. The policy prescribes minimum and maximum hedging
amounts for the Group, which is managed on a portfolio basis.
The Group maintains a mix of offshore and local currency fixed rate and variable rate debt, as well as a mix of long term and
short term debt. The Group primarily enters into interest rate derivatives and cross-currency interest rate swap agreements to
manage the associated interest rate risk. The Group hedges the interest rate and currency risk on its foreign currency
borrowings by entering into cross-currency swaps, which have the economic effect of converting foreign currency borrowings
to local currency borrowings at contracted rates. The derivative contracts are recorded at fair value in the Consolidated
Statement of Financial Position, using standard valuation techniques with market inputs.
As at 30 June 2022, 68% (2021: 76%) of the interest bearing liabilities of the Group were hedged. The average hedged
percentage for the financial year was 64% (2021: 82%) and on a look-through basis 65% (2021:81%).
Interest rate derivatives require settlement of net interest receivable or payable generally each 90 or 180 days. The settlement
dates coincide with the dates on which the interest is payable on the underlying debt. The receivable and payable legs on
interest rate derivative contracts are settled on a net basis. The net notional amount of average fixed rate debt and interest
rate derivatives in place in each year and the weighted average effective hedge rate is set out below:
A$ fixed rate debt
A$ interest rate derivatives
Combined fixed rate debt and derivatives (A$
equivalent)
Hedge rate (%)
June 2023
$m
1,795.0
2,208.3
June 2024
$m
1,653.3
2,214.6
June 2025
$m
1,370.0
1,950.0
June 2026
$m
1,246.7
535.4
June 2027
$m
1,163.3
200.0
4,003.3
3,867.9
3,320.0
1,782.1
1,363.3
1.77%
1.69%
1.67%
1.95%
1.96%
Amounts do not include fixed rate debt that has been swapped to floating rate debt through cross-currency swaps.
Sensitivity analysis on interest expense
The table below shows the impact on the Group’s net interest expense of a 100 basis point movement in market interest rates.
The sensitivity on cash flow arises due to the impact that a change in interest rates will have on the Group’s floating rate debt
and derivative cash flows on average during the financial year. Net interest expense is only sensitive to movements in market
rates to the extent that floating rate debt is not hedged.
+/- 1% (100 basis points)
Total A$ equivalent
The movement in interest expense is proportional to the movement in interest rates.
2022
(+/-) $m
20.0
20.0
2021
(+/-) $m
15.6
15.6
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Financial report
Note 13 Capital and financial risk management (continued)
b. Financial risk management (continued)
i. Market risk (continued)
Interest rate risk (continued)
Sensitivity analysis on fair value of interest rate derivatives
The sensitivity analysis on interest rate derivatives below shows the effect on net profit or loss of changes in the fair value of
interest rate derivatives for a 100 basis point movement in short-term and long-term market interest rates. The sensitivity on
fair value arises from the impact that changes in market rates will have on the valuation of the interest rate derivatives.
The fair value of interest rate derivatives is calculated as the present value of estimated future cash flows on the instruments.
Although interest rate derivatives are transacted for the purpose of providing the Group with an economic hedge, the Group
has elected not to apply hedge accounting to these instruments. Accordingly, gains or losses arising from changes in the fair
value are reflected in the profit or loss.
+/- 1% (100 basis points)
Total A$ equivalent
2022
(+/-) $m
63.2
63.2
2021
(+/-) $m
56.0
56.0
Sensitivity analysis on fair value of cross-currency swaps
The sensitivity analysis on cross-currency interest rate swaps below shows the effect on net profit or loss for changes in the fair
value for a 100 basis point increase and decrease in market rates. The sensitivity on fair value arises from the impact that
changes in short-term and long-term market rates will have on the valuation of the cross-currency swaps. The sensitivity
analysis excludes the impact of hedge accounted cross-currency swaps.
+/- 1% (100 basis points)
Total A$ equivalent
Foreign currency risk
US$ (A$ equivalent)
2022
(+/-) $m
0.2
0.2
2021
(+/-) $m
1.8
1.8
Foreign currency risk refers to the risk that the value or the cash flows arising from a financial commitment, or recognised asset
or liability will fluctuate due to changes in foreign currency rates. The Group’s foreign currency risk arises primarily from
borrowings denominated in foreign currency.
The objective of the Group’s foreign exchange risk management policy is to ensure that movements in exchange rates have
minimal adverse impact on the Group’s foreign currency assets and liabilities. Refer to note 15 for the US$ foreign currency
exposures and management thereof via cross-currency interest rate swaps.
Foreign currency assets and liabilities
Where foreign currency borrowings are used to fund Australian investments, the Group transacts cross-currency swaps to
reduce the risk that movements in foreign exchange rates will have an impact on security holder equity and net tangible
assets.
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Dexus 2022 Annual Report
Note 13 Capital and financial risk management (continued)
b. Financial risk management (continued)
ii. Liquidity risk
Liquidity risk is associated with ensuring that there are sufficient funds available to meet the Group’s financial commitments as
and when they fall due and planning for any unforeseen events which may curtail cash flows. The Group identifies and
manages liquidity risk across the following categories:
– Short-term liquidity management covering the month ahead on a rolling basis with continuous monitoring of forecast and
actual cash flows
– Medium-term liquidity management of liquid assets, working capital and standby facilities to cover Group cash
requirements over the next 1-24 month period. The Group maintains a level of committed borrowing facilities above the
forecast committed debt requirements (liquidity headroom buffer). Committed debt includes future expenditure that has
been approved by the Board or Investment Committee (as required within delegated limits)
– Long-term liquidity management through ensuring an adequate spread of maturities of borrowing facilities so that
refinancing risk is not concentrated in certain time periods and ensuring an adequate diversification of funding sources
where possible, subject to market conditions
Refinancing risk
Refinancing risk is the risk that the Group:
– Will be unable to refinance its debt facilities as they mature
– Will only be able to refinance its debt facilities at unfavourable interest rates and credit market conditions (margin price
risk)
The Group’s key risk management strategy for margin price risk on refinancing is to spread the maturities of debt facilities over
different time periods to reduce the volume of facilities to be refinanced and the exposure to market conditions in any one
period. An analysis of the contractual maturities of the Group’s interest bearing liabilities and derivative financial instruments is
shown in the table below. The amounts in the table represent undiscounted cash flows.
2022
Between
one and
two
years
$m
Between
two and
five
years
$m
After five
years
$m
Within
one
year
$m
2021
Between
one and
two
years
$m
Between
two and
five
years
$m
After five
years
$m
-
-
-
(173.8)
(3.5)
(11.6)
(11.3)
(3.5)
-
(3.7)
-
-
(9.0)
(6.4)
Within
one
year
$m
(180.4)
(4.2)
(184.6)
(3.5)
(11.6)
(11.3)
(177.3)
(3.7)
(9.0)
(6.4)
(129.6)
(107.9)
(123.7)
(2,068.8)
(1,846.2)
(183.6)
(389.3)
(1,551.6)
(2,492.1)
(811.2)
(1,014.5)
(138.9)
(31.7)
(344.9)
(967.1)
(149.3)
(237.5)
(934.9)
(3,083.3)
(1,985.1)
(215.3)
(734.2)
(2,518.7)
(2,641.4)
119.4
197.4
1,117.0
845.2
74.1
74.8
640.2
1,218.8
(118.2)
(191.5)
(924.1)
(765.7)
(52.0)
(52.9)
(505.9)
(1,143.0)
1.2
5.9
192.9
79.5
22.1
21.9
134.3
75.8
Payables
Lease liabilities
Total payables and lease
liabilities
Interest bearing liabilities &
interest
Fixed interest rate liabilities
Floating interest rate liabilities
Total interest bearing liabilities
& interest1
Derivative financial liabilities
Cash receipts
Cash payments
Total net derivative financial
instruments2
1 Refer to note 15. Excludes deferred borrowing costs but includes estimated fees and interest.
2 The notional maturities on derivatives are shown for cross-currency interest rate swaps (refer to interest rate risk) as they are the only instruments
where a principal amount is exchanged. For interest rate derivatives, only the net interest cash flows (not the notional principal) are included. Refer to
note 13(c) for fair value of derivatives. Refer to note 16(b) for financial guarantees.
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Financial report
Note 13 Capital and financial risk management (continued)
b. Financial risk management (continued)
iii. Credit risk
Credit risk is the risk that the counterparty will not fulfil its obligations under the terms of a financial instrument and will cause
financial loss to the Group. The Group has exposure to credit risk on all financial assets included in the Group’s Consolidated
Statement of Financial Position.
The Group manages this risk by:
– Adopting a process for determining an approved counterparty, with consideration of qualitative factors as well as the
counterparty’s credit rating
– Regularly monitoring counterparty exposure within approved credit limits that are based on the lower of an S&P and
Moody’s credit rating. The exposure includes the current market value of in-the-money contracts and the potential
exposure, which is measured with reference to credit conversion factors as per APRA guidelines
– Entering into International Swaps and Derivatives Association (ISDA) Master Agreements once a financial institution
counterparty is approved
– For some trade receivables, obtaining collateral where necessary in the form of bank guarantees and tenant bonds
– Regularly monitoring loans and receivables on an ongoing basis
A minimum S&P rating of A– (or Moody’s equivalent) is required to become or remain an approved counterparty unless
otherwise approved by the Dexus Board.
The Group is exposed to credit risk on cash balances and on derivative financial instruments with financial institutions. The
Group has a policy that sets limits as to the amount of credit exposure to each financial institution. New derivatives and cash
transactions are limited to financial institutions that meet minimum credit rating criteria in accordance with the Group’s policy
requirements.
Financial instrument transactions are spread among a number of approved financial institutions within specified credit limits to
minimise the Group’s exposure to any one counterparty. As a result, there is no significant concentration of credit risk for
financial instruments. The maximum exposure to credit risk at 30 June 2022 is the carrying amounts of financial assets
recognised on the Consolidated Statement of Financial Position.
The Group is exposed to credit risk on trade receivable balances. The Group has a policy to continuously assess and monitor
the credit quality of trade debtors on an ongoing basis. Given the historical profile and exposure of the trade receivables, it
has been determined that no significant concentrations of credit risk exists for receivables balances. The maximum exposure
to credit risk at 30 June 2022 is the carrying amounts of the trade receivables recognised on the Consolidated Statement of
Financial Position.
iv. Fair value
The Group uses the following methods in the determination and disclosure of the fair value of financial instruments:
Level 1: The fair value is calculated using quoted prices in active markets.
Level 2: The fair value is determined using inputs other than quoted prices included in Level 1 that are observable for the asset
or liability, either directly (i.e., as prices) or indirectly (i.e., derived from prices).
Level 3: The fair value is estimated using inputs for the asset or liability that are not based on observable data.
Equity investments in Australian managed funds are measured at Level 3 having regard to unit prices which are determined by
giving consideration to the unit prices and net assets of the relevant fund. The unit prices and net asset values are largely
driven by the fair values of investment properties and derivatives held by the funds. Recent arm’s length transactions, if any,
are also taken into consideration. The fair value of investments in associates at fair value through profit or loss is impacted by
the price per security of the investment. An increase to the price per security results in an increase to the fair value of the
investment.
All derivative financial instruments were measured at Level 2 for the periods presented in this report.
During the year, there were no transfers between Level 1, 2 and 3 fair value measurements.
162
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Dexus 2022 Annual Report
Note 13 Capital and financial risk management (continued)
b. Financial risk management (continued)
iv. Fair value (continued)
Since cash, receivables and payables are short-term in nature, their fair values are not materially different from their carrying
amounts. For the majority of the borrowings, the fair values are not materially different to their carrying amounts, since the
interest payable on those borrowings is either close to current market rates or the borrowings are of a short-term nature.
Material differences are identified only for the following borrowings:
Type
USD borrowing
USD borrowing
USD borrowing
USD borrowing
USD borrowing
USD borrowing
USD borrowing
MTN
MTN
MTN
MTN
MTN
MTN
AUD USPP
AUD USPP
AUD USPP
AUD USPP
Fixed bank debt
Exchangeable note
2022
Carrying Amount
($m)
64.9
158.4
225.5
445.1
175.0
291.0
237.8
-
186.6
129.1
198.3
500.0
30.0
100.0
50.0
100.0
75.0
-
407.2
Maturity
2024
2025
2026
2027
2029
2030
2033
2023
2026
2027
2030
2032
2039
2028
2030
2033
2039
2022
2026
2022
Fair Value
($m)
66.1
161.6
230.5
452.6
175.0
291.0
241.0
-
190.9
132.3
180.5
455.8
32.0
104.0
52.0
106.5
80.6
-
425.0
2021
Carrying Amount
($m)
63.1
157.4
224.1
452.1
179.7
302.5
254.0
161.3
186.8
129.0
198.2
500.0
30.0
100.0
50.0
100.0
75.0
150.0
403.1
2021
Fair Value
($m)
65.0
162.6
232.7
466.5
184.9
306.4
254.0
167.6
209.8
147.1
202.7
512.9
36.0
113.4
56.6
117.4
89.7
155.2
425.0
Key assumptions: fair value of derivatives and interest bearing liabilities
The fair value of derivatives and interest bearing liabilities has been determined based on observable market inputs
(interest rates) and applying a credit or debit value adjustment based on the current credit worthiness of counterparties
and the Group.
v. Offsetting financial assets and financial liabilities
Financial assets and liabilities are offset and the net amount reported in the Consolidated Statement of Financial Position
where there is a legally enforceable right to set-off the recognised amounts and there is an intention to settle on a net basis,
or realise the asset and settle the liability simultaneously. No financial assets and liabilities are currently held under netting
arrangements.
Master Netting arrangements – not currently enforceable
Agreements with derivative counterparties are based on an ISDA Master Agreement. Under the terms of these arrangements,
where certain credit events occur (such as default), the net position owing/receivable to a single counterparty in the same
currency will be taken as owing and all the relevant arrangements terminated. As the Group does not presently have a legally
enforceable right of set-off, these amounts have not been offset in the Consolidated Statement of Financial Position.
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Financial report
Note 13 Capital and financial risk management (continued)
c. Derivative financial instruments
A derivative is a type of financial instrument typically used to manage risk. A derivative’s value changes over time in response
to an underlying benchmark, such as interest rates, exchange rates, or asset values, and is entered into for a fixed period. A
hedge is where a derivative is used to manage an underlying exposure.
Written policies and limits are approved by the Board of Directors of the Responsible Entity, in relation to the use of financial
instruments to manage financial risks. The Responsible Entity regularly reviews the Group’s exposures and updates its treasury
policies and procedures. The Group does not trade in interest rate or foreign exchange related derivative instruments for
speculative purposes.
The Group uses derivative contracts as part of its financial and business strategy. Derivative contracts may cover interest rate, foreign
currency and equity market movements but also include option contracts embedded in the Group’s Exchangeable note borrowings.
1.
Interest rate derivative contracts – the Group uses interest rate derivative contracts to manage the risk of movements in
variable interest rates on the Group’s Australian dollar denominated borrowings.
2. Cross-currency swap contracts – the Group uses cross-currency swap contracts to manage the risk of movements in
interest rates and fair values of foreign currencies associated with its foreign denominated borrowings.
3. Other derivative contracts – other derivative contracts include embedded option contracts within the Group's
Exchangeable note borrowings (see note 15(e)).
Derivatives are measured at fair value with any changes in fair value recognised either in the Statement of Comprehensive
Income, or directly in equity where hedge accounted.
At inception the Group can elect to formally designate and document the relationship between certain hedge derivative
instruments and the associated hedged items, along with its risk management objectives and its strategy for undertaking
various hedge transactions.
The only derivatives designated by the Group in hedge relationships are cross-currency interest rate swap contracts used to
hedge foreign denominated borrowings.
The Group also documents its assessment, both at hedge inception and on an ongoing basis, of whether the financial
instrument is effective in offsetting changes in fair values or cash flows of the hedged item attributable to the hedged risk. The
hedging relationship is deemed effective when all of the following requirements are met:
– There is an economic relationship between the hedged item and the hedging instrument
– The effect of credit risk does not dominate the changes in value that result from that economic relationship
– The hedge ratio of the hedging relationship is the same as that resulting from the quantity of the hedged item that the
Group actually hedges and the quantity of the hedging instrument that the Group actually uses to hedge that quantity of
hedged item
The Group uses cross-currency interest rate swap contracts to hedge interest rate risk and foreign exchange risk associated
with foreign denominated borrowings issued by the Group. The Group designates the cross-currency interest rate swap
contracts as:
– Fair value hedges against changing interest rates on foreign denominated borrowings
– Cash flow hedges or fair value hedges against foreign currency exposure on foreign denominated borrowings
The foreign currency basis spread of a cross-currency interest rate swap is excluded from the designation of that financial
instrument as the hedging instrument. Changes in the fair value of the foreign currency basis spread of a financial instrument
are accumulated in the foreign currency basis spread reserve and are amortised to profit or loss on a rational basis over the
term of the hedging relationship.
As the critical terms of the cross-currency interest rate swap contracts and their corresponding hedged items match, the
Group performs a qualitative assessment of effectiveness. The main source of hedge ineffectiveness in these hedge
relationships is the effect of the counterparty and the Group’s own credit risk on the fair value of the cross-currency interest
rate swap contracts, which is not reflected in the fair value of the hedged item attributable to the change in interest rates. No
other sources of ineffectiveness emerged from these hedging relationships.
The Group has applied the hedge ratio of 1:1 to all hedge relationships.
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Dexus 2022 Annual Report
Note 13 Capital and financial risk management (continued)
c. Derivative financial instruments (continued)
Fair value hedge – cross-currency swap contracts
A fair value hedge is a hedge of the exposure to changes in fair value of an asset or liability that is attributable to a particular
risk and could affect the Consolidated Statement of Comprehensive Income. Changes in the fair value of cross-currency swap
contracts that are designated as fair value hedges are recorded in profit or loss, together with any changes in the fair value of
the interest rates on foreign denominated borrowings, and fair value of the foreign denominated borrowings themselves.
If the hedge no longer meets the criteria for hedge accounting, the adjustment to the carrying amount of a hedged item for
which the effective interest method is used is amortised to profit or loss over the period to maturity using a recalculated
effective interest rate.
Cash flow hedge – cross-currency swap contracts
A cash flow hedge is a hedge of the exposure to variability in cash flows attributable to a particular risk to a highly probable
forecast transaction pertaining to an asset or liability. The effective portion of changes in the fair value of cross-currency swap
contracts that are designated as cash flow hedges is recognised in other comprehensive income in equity via the cash flow
hedge reserve. Amounts accumulated in equity are reclassified to profit or loss in the periods when the payments associated
with the underlying foreign denominated borrowings affect profit or loss. Any gain or loss related to ineffectiveness is
recognised in profit or loss immediately.
Hedge accounting is discontinued when each cross-currency swap contract expires, is terminated, is no longer in an effective
hedge relationship, is de-designated, or the forecast underlying payments are no longer expected to occur. The fair value
gain or loss of derivatives recorded in equity is recognised in profit or loss over the period that the forecast payments are
recorded in profit or loss. If the forecast payments are no longer expected to occur, the cumulative gain or loss in equity is
recognised in profit or loss immediately.
Current assets
Interest rate derivative contracts
Cross-currency swap contracts
Total current assets - derivative financial instruments
Non-current assets
Interest rate derivative contracts
Cross-currency swap contracts
Total non-current assets - derivative financial instruments
Current liabilities
Interest rate derivative contracts
Cross-currency swap contracts
Total current liabilities - derivative financial instruments
Non-current liabilities
Interest rate derivative contracts
Cross-currency swap contracts
Other derivative contracts
Total non-current liabilities - derivative financial instruments
Net derivative financial instruments
2022
$m
1.6
11.0
12.6
143.3
314.6
457.9
1.2
-
1.2
-
7.2
33.3
40.5
428.8
2021
$m
-
13.8
13.8
-
333.3
333.3
4.4
2.8
7.2
17.2
0.3
25.4
42.9
297.0
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Financial report
Note 13 Capital and financial risk management (continued)
c. Derivative financial instruments (continued)
The table below details a breakdown of the net fair value gain on derivatives in the Consolidated Statement of
Comprehensive Income.
Net fair value gain/(loss) of derivatives
Cross-currency swap contracts
Interest rate swap contracts
Exchangeable note contracts
Total net fair value gain/(loss) of derivatives
2022
$m
(178.7)
146.4
(7.9)
(40.2)
2021
$m
(120.1)
29.6
(11.9)
(102.4)
Effects of hedge accounting on the financial position and performance – Quantitative information
The following table details the notional principal amounts and remaining terms of the hedging instrument (cross-currency
interest rate swap) at the end of the financial year:
Notional Amount of the Hedging Instrument ($m)
Under 1 year
1-2 years
2-5 years
Over 5 years
Foreign exchange risk and interest rate risk - Cross currency interest rate swap (hedging foreign currency debt)1
Average contracted FX rate (AUD/USD)
Average contracted fixed USD rate
Average notional amount
0.8699
2.4922
1,304.7
0.8676
2.4875
1,256.4
Interest rate risk - Cross currency interest rate swap (hedging foreign currency debt)1
Average contracted fixed USD rate
Average notional amount
1.3906
1,304.7
1.3821
1,256.4
0.8172
2.3478
624.1
1.3705
624.1
0.8172
2.3478
624.1
1.3705
624.1
1 Cross-currency interest rate swaps totalling $1,135.0 million (notional) have been split into cash flow hedge and fair value hedge relationships.
The following tables detail information regarding the cross-currency interest rate swaps designated in cash flow hedge or fair
value hedge relationships at the end of the reporting period and their related hedged items.
Current notional principal value of the hedging instrument
Carrying amount of the hedging instrument assets/(liabilities)1
Cumulative change in fair value of the hedging instrument used for calculating hedge
ineffectiveness
Current fair value notional amount of the hedged item
Cumulative change in value of the hedged item used for calculating hedge
ineffectiveness
Balance in cash flow hedge reserve
Hedge ineffectiveness recognised in the Consolidated Statement of Comprehensive
Income2
Cash flow hedges
Fair value hedges
Cross currency
interest rate swaps
$m
1,304.7
Cross currency
interest rate swaps
$m
1,304.7
17.2
16.8
(16.8)
24.8
(16.8)
-
285.4
284.9
(1,597.7)
(293.0)
-
1.5
1 The carrying amount is included in the “Derivative financial instruments” line items in the Consolidated Statement of Financial Position.
2 Included in the “Net fair value loss of derivatives” line item in the Consolidated Statement of Comprehensive Income.
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Dexus 2022 Annual Report
Note 13 Capital and financial risk management (continued)
c. Derivative financial instruments (continued)
The cash flow hedge reserve represents the cumulative amount of gains and losses on hedging instruments deemed effective
in cash flow hedges. The cumulative deferred gain or loss on the hedging instrument is recognised in profit or loss only when
the hedged transaction impacts the profit or loss.
Cash flow hedge reserve and foreign currency basis spread
Balance at 1 July 2021 (before tax)
Movement
Gain/(loss) arising on changes in fair value of hedging instruments during the period
Changes in fair value of foreign currency basis spread during the period
Transfer out
(Gain)/loss reclassified to profit or loss – hedged item has affected profit or loss
(Gain)/loss arising on changes in fair value of foreign currency basis spread during the period
Balance at 30 June 2022 (before tax)
Foreign
exchange risk
$m
(0.9)
11.0
6.0
(3.6)
4.7
17.2
Note 14 Lease liabilities
Under AASB 16 Leases, as a Lessee, the Group recognises a right-of-use asset and lease liability on the Consolidated
Statement of Financial Position for all material leases. In relation to leases of low value assets, such as IT equipment, small
items of office furniture or short-term leases with a term of 12 months or less, the Group has elected not to recognise right-of-
use assets and lease liabilities.
The Group recognises the lease payments associated with these leases as an expense in the Consolidated Statement of
Comprehensive Income on a straight line basis over the lease term. The Group recognises a right-of-use asset and lease
liability on the lease commencement date. The right-of-use asset is initially measured at cost, and subsequently at cost less
any accumulated depreciation and impairment losses, adjusted for any remeasurements of the lease liability. The cost of the
right-of-use asset includes:
– The amount of initial measurement of the lease liability
– Any lease payments made at or before the commencement date, less any lease incentives received, any initial direct costs
– Makegood costs
Right-of-use assets are depreciated on a straight line basis from the commencement date of the lease to the earlier of the
end of the useful life of the asset or the end of the lease term, unless they meet the definition of an investment property.
The Group tests all right-of-use assets for impairment where there is an indicator that the asset may be impaired. If an
impairment exists, the carrying amount of the asset is written down to its recoverable amount as per the requirements of
AASB 136 Impairment of Assets.
The lease liability is initially measured at the present value of the lease payments, discounted using the interest rate implicit in
the lease or, if that rate cannot be readily determined, the Group’s incremental borrowing rate. Generally, the Group uses its
incremental borrowing rate as the discount rate. The weighted rate applied was 3.22%. Variable lease payments that depend
on an index or rate are included in the lease liability, measured using the index or rate as at the date of lease commencement.
The lease liability is subsequently increased by the interest cost on the lease liability and decreased by lease payments made.
The liability is remeasured when there is a change in future lease payments arising from a change in index or rate or changes
in the assessment of whether an extension option is reasonably certain to be exercised or a termination option is reasonably
certain not to be exercised. Interest costs and variable lease payments not included in the initial measurement of the lease
liability are recognised in the Consolidated Statement of Comprehensive Income in the period to which they relate.
The Group has applied judgement to determine the lease term for contracts which include renewal and termination options.
The Group’s assessment considered the facts and circumstances that create an economic incentive to exercise a renewal
option or not to exercise a termination option.
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Financial report
Note 14 Lease liabilities (continued)
The following table details information relating to leases where the Group is a lessee.
Current
Lease liabilities - ground leases
Lease liabilities - other property leases
Total current liabilities - lease liabilities
Non-current
Lease liabilities - ground leases
Lease liabilities - other property leases
Total non-current liabilities - lease liabilities
Total liabilities - lease liabilities
a. Lease liabilities – ground leases
Note
(a)
(b)
(a)
(b)
2022
$m
0.8
3.4
4.2
7.2
15.5
22.7
26.9
2021
$m
0.8
2.7
3.5
7.8
12.7
20.5
24.0
Lease liabilities include ground leases at Parkade, 34-60 Little Collins Street, Melbourne and Waterfront Place, 1 Eagle Street,
Brisbane. Refer to note 8 Investment properties where the corresponding leased asset is included in the total value of
investment properties.
b. Lease liabilities – other property leases
Lease liabilities relating to property leases predominantly relate to Dexus offices and Dexus Place property leases. Refer to
the Consolidated Statement of Financial Position for disclosure of the corresponding right-of-use asset.
Note 15 Interest bearing liabilities
Borrowings are initially recognised at fair value net of transaction costs and subsequently measured at amortised cost using
the effective interest rate method. Under the effective interest rate method, any transaction fees, costs, discounts and
premiums directly related to the borrowings are capitalised to borrowings and amortised in profit or loss over the expected life
of the borrowings.
If there is a substantial debt modification, the financial liability is derecognised from the Consolidated Statement of Financial
Position and residual capitalised costs expensed to the Consolidated Statement of Comprehensive Income. If there is a non-
substantial debt modification, the balance on the Consolidated Statement of Financial Position is adjusted and the difference
between the fair value of the new facility and carrying value of the original facility is recognised in the Consolidated
Statement of Comprehensive Income.
If there is an effective fair value hedge of borrowings, a fair value adjustment will be applied based on the mark to market
movement in the benchmark component of the borrowings. This movement is recognised in profit or loss. Refer to note
13 Capital and financial risk management for further detail.
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Dexus 2022 Annual Report
Note 15 Interest bearing liabilities (continued)
All borrowings with contractual maturities greater than 12 months after reporting date are classified as non-current liabilities.
Current
Unsecured
Bank loans
Total unsecured
Total current liabilities - interest bearing liabilities
Non-current
Unsecured
US senior notes1
Bank loans
Commercial paper
Medium term notes
Exchangeable notes
Total unsecured
Deferred borrowing costs
Total non-current liabilities - interest bearing liabilities
Total interest bearing liabilities
Note
(b)
(a)
(b)
(c)
(d)
(e)
2022
$m
-
-
-
1,922.7
1,430.2
100.0
1,043.9
407.2
4,904.0
(21.7)
4,882.3
4,882.3
2021
$m
50.0
50.0
50.0
1,957.8
1,229.2
100.0
1,205.3
403.1
4,895.4
(20.7)
4,874.7
4,924.7
1
Includes cumulative fair value adjustments amounting to $49.9 million (2021: $123.1 million) in relation to effective fair value hedges.
Financing arrangements
The following table summarises the maturity profile of the Group’s financing arrangements:
Type of facility
US Senior notes (USPP)1
US Senior notes (USPP)
Multi-option revolving credit facilities
Commercial paper
Medium term notes
Exchangeable note
Total
Bank guarantee in place
Unused at balance date
Notes
(a)
(a)
(b)
(c)
(d)
(e)
Currency
US$
Security
Unsecured
Maturity Date
Jul-23 to Nov-32
Utilised
$m
1,647.6
Facility
Limit
$m
1,647.6
A$
Unsecured
Jun-28 to Oct-38
325.0
325.0
Multi
Currency
A$
A$
A$
Unsecured
Unsecured
Unsecured
Unsecured
Oct-23 to Jun-29
1,439.8
3,425.0
Apr-24
100.0
100.0
Nov-25 to Aug-38
1,043.9
1,043.9
Jun-26
407.3
407.3
4,963.6
6,948.8
(114.1)
1,871.1
1
Includes drawn amounts and excludes fair value adjustments recorded in interest bearing liabilities in relation to effective fair value hedges.
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Financial report
Note 15 Interest bearing liabilities (continued)
Each of the Group’s unsecured borrowing facilities are supported by guarantee arrangements and have negative pledge
provisions which limit the amount and type of encumbrances that the Group can have over their assets and ensures that all
senior unsecured debt ranks pari passu.
a. US senior notes (USPP)
This includes a total of US$1,135.0 million and A$325.0 million (A$1,972.6 million) of US senior notes with a weighted average
maturity of February 2029. US$1,135.0 million is designated as an accounting hedge using cross-currency interest rate swaps
with the same notional value.
b. Multi-option revolving credit facilities
This includes A$3,425.0 million of facilities maturing between October 2023 and June 2029 with a weighted average maturity
of March 2026. A$114.1 million is utilised as bank guarantees for AFSL requirements and other business requirements including
developments.
c. Commercial paper
This includes a total of A$100.0 million of Commercial paper which is supported by a standby facility of A$100.0 million with a
maturity of April 2024. The standby facility has same day availability.
d. Medium term notes
This includes a total of A$1,045.0 million of Medium term notes with a weighted average maturity of February 2030. The
remaining A$1.1 million is the net discount on the issue of these instruments.
e. Exchangeable notes
This includes exchangeable notes with a face value totalling $425.0 million. The notes are exchangeable based on the
exchange price (currently $15.00 representing approximately 28.3 million securities) on the exchange date, at the election of
the holder, until 19 March 2024. The holders have an option to put the notes to the issuer for face value 60 days prior but not
later than 30 days after 19 March 2024. On expiration of the put option, the notes continue to be exchangeable until 10 days
prior to maturity on 19 June 2026. Any securities issued on exchange will rank equally with existing securities. As at 30 June
2022, no notes have been exchanged.
Exchange price1
Coupon (per annum)
Notes on issue at 30 June 2022
$15.00
2.3%
4,250,000.0
1 The exchange price has been adjusted for any subsequent equity raises completed at greater than 5% discount to the five-day VWAP prior to the
raise. The price will also be adjusted in the event of any Dexus distributions which exceed quoted thresholds in the Exchangeable note terms and
conditions.
Note 16 Commitments and contingencies
a. Commitments
Capital commitments
The following amounts represent capital expenditure on investment properties and inventories as well as committed fitout or
cash incentives contracted at the end of each reporting period but not recognised as liabilities payable:
Investment properties
Inventories and development management services
Investments accounted for using the equity method
Total capital commitments
2022
$m
108.9
1.9
128.4
239.2
2021
$m
87.1
0.7
311.5
399.3
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Dexus 2022 Annual Report
Note 16 Commitments and contingencies (continued)
Lease receivable commitments
The future minimum lease payments receivable by the Group are:
Within one year
Later than one year but not later than five years
Later than five years
Total lease receivable commitments
b. Contingencies
2022
$m
413.2
1,232.2
577.4
2,222.8
2021
$m
467.0
1,398.5
592.9
2,458.4
DPT, together with DXO, is a guarantor of A$6,948.8 million (June 2021: A$5,918.1 million) of interest bearing liabilities (refer to
note 15 Interest bearing liabilities). The guarantees have been given in support of debt outstanding and drawn against these
facilities and may be called upon in the event that a borrowing entity has not complied with certain requirements such as
failure to pay interest or repay a borrowing, whichever is earlier. During the period no guarantees were called.
The Group has bank guarantees of A$114.1 million, comprising A$70.2 million held to comply with the terms of the Australian
Financial Services Licences (AFSL) and A$43.9 million largely in respect of developments.
The above guarantees are issued in respect of the Group and represent an additional liability to those already existing in
interest bearing liabilities on the Consolidated Statement of Financial Position.
The Directors of the Responsible Entity are not aware of any other contingent liabilities in relation to the Group, other than
those disclosed in the Consolidated Financial Statements, which should be brought to the attention of security holders as at
the date of completion of this report.
Outgoings are excluded from contingencies as they are expensed when incurred.
Note 17 Contributed equity
Opening balance at the beginning of the year
Buy-back of contributed equity
Closing balance at the end of the year
2022
No. of
securities
1,075,565,246
-
1,075,565,246
2021
No. of
securities
1,091,202,163
(15,636,917)
1,075,565,246
Each stapled security ranks equally with all other stapled securities for the purposes of distributions and on termination of the
Group.
Each stapled security entitles the holder to vote in accordance with the provisions of the Constitutions and the Corporations
Act 2001.
Transaction costs arising on the buy-back of equity instruments are recognised directly in equity (net of tax) as a reduction of
the proceeds of the equity instruments to which the costs relate. Transaction costs are the costs that are incurred directly in
connection with the buy-back of those equity instruments and which would not have been incurred had those instruments not
been bought back.
On 23 October 2019, Dexus announced plans to initiate an on-market securities buy-back of up to 5% of Dexus securities on
issue over the next 12 months, as part of its active approach to capital management.
On 13 October 2020, Dexus announced an extension of the buy-back for a period of 12 months commencing on 23 October
2020.
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On 22 October 2021, Dexus announced a further extension of the buy-back for a period of 12 months commencing on
25 October 2021.
During the 12 months to 30 June 2022, there were no Dexus securities acquired or cancelled.
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Financial report
Note 18 Reserves
Asset revaluation reserve
Cash flow hedge reserve
Foreign currency basis spread reserve
Security-based payments reserve
Treasury securities reserve
Total reserves
Movements:
Asset revaluation reserve
Opening balance at the beginning of the year
Closing balance at the end of the year
Cash flow hedge reserve
Opening balance at the beginning of the year
Changes in the fair value of cash flow hedges
Closing balance at the end of the year
Foreign currency basis spread reserve
Opening balance at the beginning of the year
Changes in cost of hedge reserve
Closing balance at the end of the year
Security-based payments reserve
Opening balance at the beginning of the year
Issue of securities to employees
Security-based payments expense
Closing balance at the end of the year
Treasury securities reserve
Opening balance at the beginning of the year
Issue of securities to employees
Purchase of securities
Closing balance at the end of the year
Nature and purpose of reserves
Asset revaluation reserve
2022
$m
42.7
16.8
0.4
13.3
(22.1)
51.1
42.7
42.7
9.4
7.4
16.8
(10.3)
10.7
0.4
10.6
(8.8)
11.5
13.3
(15.8)
8.8
(15.1)
(22.1)
2021
$m
42.7
9.4
(10.3)
10.6
(15.8)
36.6
42.7
42.7
24.0
(14.5)
9.4
(8.8)
(1.5)
(10.3)
9.8
(8.5)
9.3
10.6
(17.1)
8.6
(7.3)
(15.8)
The asset revaluation reserve is used to record the fair value adjustment arising on a business combination.
Cash flow hedge reserve
The cash flow hedge reserve is used to record the effective portion of changes in the fair value of derivatives that are
designated as cash flow hedges.
Foreign currency basis spread reserve
The foreign currency basis spread reserve is used to record the changes in the fair value of cross-currency derivatives
attributable to movements in foreign currency basis spreads and represents a cost of hedging.
Security-based payments reserve
The security-based payments reserve is used to recognise the fair value of performance rights to be issued under the Deferred
Short Term Incentive Plans (DSTI), Long Term Incentive Plans (LTI) and Senior Management Retention Awards. Refer to note 24
for further details.
Treasury securities reserve
The treasury securities reserve is used to record the acquisition of securities purchased to fulfil the obligations of the Deferred
Short Term Incentive Plans (DSTI), Long Term Incentive Plans (LTI) and Senior Management Retention Awards. As at 30 June
2022, DXS held 2,536,188 stapled securities which includes acquisitions of 1,779,086 and unit vesting of 817,312 (2021: 1,574,324).
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Dexus 2022 Annual Report
Note 19 Working capital
a. Cash and cash equivalents
Cash and cash equivalents include cash on hand, deposits held at call with financial institutions and other short-term, highly
liquid investments with original maturities of three months or less that are readily convertible to known amounts of cash and
which are subject to an insignificant risk of changes in value.
b. Receivables
Rental income and management fees are brought to account on an accrual basis. Dividends and distributions are recognised
when declared and, if not received at the end of the reporting period, reflected in the Consolidated Statement of Financial
Position as a receivable.
Trade and other receivables are recognised initially at fair value and subsequently measured at amortised cost using the
effective interest rate method, less provision for expected credit losses. Trade receivables are required to be settled within 30
days and are assessed on an ongoing basis for impairment. Receivables which are known to be uncollectable are written off
by reducing the carrying amount directly.
A provision for expected credit losses is recognised for expected credit losses on trade and other receivables. The provision for
expected credit losses is the difference between the asset’s carrying amount and the present value of estimated future cash
flows, discounted at the original effective interest rate. Cash flows relating to short-term receivables are not discounted as
the effect of discounting is immaterial.
The calculation of expected credit losses relating to rent and other receivables requires judgement to assess the future
uncertainty of tenants’ ability to pay their debts. Expected credit losses have been estimated using a provision matrix that has
been developed with reference to the Group’s historical credit loss experience, general economic conditions and forecasts,
assumptions around rent relief that may be provided to tenants and tenant risk factors such as size, industry exposure and the
Group’s understanding of the ability of tenants to pay their debts. Accordingly, expected credit losses include both the part of
the rent receivable that is likely to be waived and any additional amount relating to credit risk associated with the financial
condition of the tenant.
In relation to distributions and fees receivables, an assessment has been performed taking into consideration the ability of the
funds and mandates managed by the Group to cash settle their distributions and pay their fees outstanding.
For any provisions for expected credit losses, the corresponding expense has been recorded in the Consolidated Statement of
Comprehensive Income within Property expenses.
Rent receivable1
Less: provision for expected credit losses
Total rent receivables
Distributions receivable
Fees receivable
Other receivables
Total other receivables
Total receivables
1 Rent receivable includes outgoings recoveries.
2022
$m
18.3
(7.6)
10.7
71.6
54.6
29.6
155.8
166.5
2021
$m
35.0
(17.7)
17.3
49.0
51.2
3.5
103.7
121.0
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Financial report
Note 19 Working capital (continued)
b. Receivables (continued)
The provision for expected credit losses for rent receivables (which includes outgoings recoveries) as at 30 June 2022 was
determined as follows:
$m
30 June 2022
0-30 days1
31-60 days
61-90 days
91+ days
Total provision for expected credit losses
1 0-30 days includes deferred rent receivable but not due.
Office
3.0
0.5
0.4
3.0
6.9
Sector
Industrial
-
0.2
0.1
0.4
0.7
Total
3.0
0.7
0.5
3.4
7.6
The provision for expected credit losses for distributions receivable, fees receivable and other receivables that has been
recorded is minimal.
The provision for expected credit losses for rent receivables as at the reporting date reconciles to the opening loss allowances
as follows:
Trade receivables
2022
$m
17.7
(10.1)
7.6
2022
$m
16.8
36.7
53.5
2022
$m
41.0
21.7
54.8
19.6
29.7
13.6
180.4
2021
$m
7.5
10.2
17.7
2021
$m
19.6
8.7
28.3
2021
$m
35.3
21.6
59.4
19.6
27.9
10.0
173.8
Opening provision for expected credit losses
Provision recognised/(reversed) in profit or loss during the year
Closing provision for expected credit losses
c. Other current assets
Prepayments
Other
Total other current assets
d. Payables
Trade creditors
Accruals
Accrued capital expenditure
Prepaid income
Accrued interest
Other payables
Total payables
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Dexus 2022 Annual Report
Note 19 Working capital (continued)
e. Provisions
A provision is recognised when a current obligation exists as a result of a past event and it is probable that a future outflow of
cash or other benefit will be required to settle the obligation.
In accordance with the Trust Constitutions, the Group distributes its distributable income to security holders by cash or
reinvestment. Distributions are provided for when they are approved by the Board of Directors and declared.
Provision for employee benefits relates to the liabilities for wages, salaries, annual leave and long service leave.
Liabilities for employee benefits for wages, salaries and annual leave expected to be settled within 12 months represent
present obligations resulting from employees’ services provided to the end of the reporting period. They are measured based
on remuneration wage and salary rates that the Group expects to pay at the end of the reporting period including related
on-costs, such as workers compensation, insurance and payroll tax.
The provision for employee benefits for long service leave represents the present value of the estimated future cash outflows,
to be made resulting from employees’ services provided to the end of the reporting period.
The provision is calculated using expected future increases in wage and salary rates including related on-costs and expected
settlement dates based on turnover history and is discounted using the Australian Corporate Bond Index rates at the end of
the reporting period that most closely matches the term of the maturity of the related liabilities. The provision for employee
benefits also includes the employee incentives schemes which are shown separately in note 24.
Current
Provision for distribution
Provision for employee benefits
Provision for land tax
Total current provisions
Non-current
Provision for employee benefits
Total non-current provisions
Provision for distribution
Opening balance at the beginning of the year
Additional provisions
Payment of distributions
Closing balance at the end of the year
2022
$m
271.0
44.4
0.5
315.9
2022
$m
3.4
3.4
2022
$m
247.4
572.2
(548.6)
271.0
2021
$m
247.4
37.7
6.1
291.2
2021
$m
2.7
2.7
2021
$m
254.3
561.0
(567.9)
247.4
A provision for distribution has been raised for the period ended 30 June 2022. This distribution is to be paid on
30 August 2022.
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Financial report
Other disclosures
In this section
This section includes information that must be disclosed to comply with the Accounting Standards, the Corporations Act
2001 or the Corporations Regulations, but which are not considered critical in understanding the financial performance or
position of the Group.
Note 20 Intangible assets
The Group's intangible assets comprise management rights, goodwill and capitalised software.
Costs that are directly attributable to the design and testing of identifiable and unique software products controlled by the
Group are recognised as intangible assets. Costs associated with configuration and customisation in a cloud computing
arrangement are recognised as an expense when incurred, unless they are paid to the suppliers of the SaaS arrangement to
significantly customise the cloud-based software for the Group, in which case the costs are recorded as a prepayment for
services and amortised over the expected renewable term of the arrangement. Software is measured at cost and amortised
using the straight line method over its estimated useful life, expected to be three to five years.
Management rights represent the asset management rights owned by Dexus Holdings Pty Limited, a wholly owned subsidiary
of DXO, which entitles it to management fee revenue from both finite life trusts and indefinite life trusts. Those rights that are
deemed to have a finite useful life (held at a value of $0.8 million (2021: $0.4 million)) are measured at cost and amortised using
the straight line method over their estimated remaining useful lives of two to seven years. Management rights that are
deemed to have an indefinite life are held at a value of $433.7 million (2021: $300.5 million).
Goodwill represents the excess of the cost of an acquisition over the fair value of the Group’s share of the net identifiable
assets of the acquired subsidiary at the date of acquisition. Goodwill arising from acquisitions of Investments accounted for
using the equity method is included in the carrying amount of investments in associates or joint ventures. Refer to note 9 for
further details.
Goodwill and management rights with an indefinite useful life are not subject to amortisation and are tested annually for
impairment, or more frequently if events or changes in circumstances indicate that they might be impaired. An impairment loss
is recognised in the Consolidated Statement of Comprehensive Income for the amount by which the asset’s carrying amount
exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value less costs to sell and value in
use. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately
identifiable cash inflows, which are largely independent of the cash inflows from other assets or groups of assets (cash-
generating units).
During the year, management have performed a review of the recoverable amount of its management rights. The Directors
and management have considered the key assumptions adopted and have identified an impairment associated with the
management rights held.
The value in use has been determined using Board approved forecasts in conjunction with growth assumptions in a five-year
discounted cash flow model and applying a terminal value in year five. Forecasts were based on projected returns of the
business in light of current market conditions.
Key assumptions: value in use of management rights
Judgement is required in determining the following key assumptions used to calculate the value in use:
– Terminal capitalisation rate range of 8.3%-20.0% (2021: 8.3%–20.0%) has been applied incorporating an appropriate risk
premium for a management business. A terminal capitalisation rate of 8.3% (2021: 8.3%) has been applied to the majority
of the management rights
– Cash flows have been discounted at a post-tax rate of 9.0% (2021: 8.0%) based on externally published weighted
average cost of capital for an appropriate peer group plus an appropriate premium for risk
– An average growth rate of 6.5% (2021: 3.0%) has been applied to forecast cashflows. The 2022 growth rate reflects the
addition of new management rights recognised as part of the APN Group acquisition
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Dexus 2022 Annual Report
Note 20 Intangible assets (continued)
Management rights
Opening balance at the beginning of the year
Dexus Wholesale Property Fund (indefinite useful life)
Direct Property Funds (indefinite useful life)
Direct Property Funds (finite useful life)
Additions
Dexus Convenience Retail REIT (indefinite useful life)
Dexus Industria REIT (indefinite useful life)
APN Real Estate Security Funds (indefinite useful life) 1
APN Real Estate Security Funds (finite useful life) 1
Direct Property Funds (finite useful life)
Dexus Wholesale Property Fund (indefinite useful life) 2
Impairment of management rights
Amortisation charge
Direct Property Funds (finite useful life)
Closing balance at the end of the year
Cost
Accumulated amortisation
Accumulated impairment
Total management rights
Goodwill
Opening balance at the beginning of the year
Additions3
Closing balance at the end of the year
Cost
Accumulated impairment
Total goodwill
Software
Opening balance at the beginning of the year
Additions
Amortisation charge
Closing balance at the end of the year
Cost
Accumulated amortisation
Cost - Fully amortised assets written off
Accumulated amortisation - Fully amortised assets written off
Total software
Total non-current intangible assets
2022
$m
258.5
42.0
0.4
35.6
75.5
18.8
0.7
2.4
3.4
(1.9)
(0.9)
434.5
445.3
(6.3)
(4.5)
434.5
0.9
49.0
49.9
54.9
(5.0)
49.9
3.6
1.5
(1.5)
3.6
19.1
(15.5)
(16.6)
16.6
3.6
488.0
2021
$m
244.0
42.0
0.5
-
-
-
-
14.5
-
-
(0.1)
300.9
308.9
(5.4)
(2.6)
300.9
0.9
-
0.9
5.9
(5.0)
0.9
4.4
1.2
(2.0)
3.6
17.6
(14.0)
(10.0)
10.0
3.6
305.4
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1 On 13 August 2021 Dexus acquired 100% of APN Property Group, a specialist Australian real estate investment manager. As part of the acquisition
$132.9 million of management rights were recognised. Refer to note 21 Business combination for further details.
2 During the period Dexus incurred costs in connection with Dexus Wholesale Property Limited, a Dexus entity, being appointed as Responsible Entity of
Dexus ADPF.
3 The excess between the cash consideration transferred and the fair value of the net identifiable assets acquired as part of the APN acquisition has
been recorded as goodwill. Refer to note 21 Business combination for further details.
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Financial report
Note 21 Business combination
Acquisition of APN Property Group (APN)
On 27 July 2021, APN security holders approved the Scheme of Arrangement for Dexus to acquire all of the stapled securities in
APN for an all cash-consideration of 90 cents per security.
On 13 August 2021, the Scheme was implemented and Dexus acquired 100% of the issued share capital of APN. APN is a
specialist Australian real estate investment manager and qualifies as a business as defined in AASB 3 Business Combinations.
The acquisition further expands and diversifies Dexus’s funds management business and contributed $2.9 billion of incremental
funds under management to the platform.
The amounts recognised in respect of the consideration paid, identifiable assets acquired, and liabilities assumed are set out
in the table below.
Purchase consideration
Cash consideration
Identifiable assets and liabilities recognised
Cash and cash equivalents
Trade and other receivables
Investments accounted for using the equity method
Investment properties
Property, plant and equipment
Intangible assets: management rights¹
Right of use asset
Trade and other payables
Current tax liabilities
Provisions
Lease liability
Interest bearing liabilities
Deferred tax liabilities
Net identifiable assets acquired
Goodwill²
Net assets acquired
$m
303.6
$m
23.6
7.0
164.6
1.9
0.5
132.9
1.5
(13.9)
(1.3)
(2.0)
(1.7)
(19.9)
(38.6)
254.6
49.0
303.6
1 Recognised in connection with APN managed funds, which include both open ended and closed ended funds.
2 Goodwill is attributable to the people, established business practices and relationships obtained via the acquisition and is not deductible for tax
purposes.
Payment for acquisition of subsidiary
Cash consideration
Less: Cash and cash equivalents acquired
Net outflow of cash from investing activities
Acquisition related costs
$m
303.6
(23.6)
280.0
Acquisition related costs of $8.7 million have been included within transaction costs in the Consolidated Statement of
Comprehensive Income and in Operating cash flows in the Consolidated Statement of Cash Flows.
178
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Dexus 2022 Annual Report
Note 21 Business combination (continued)
Revenue and profit contribution
APN Property Group contributed revenues of $60.1 million and net profit of $53.3 million to the group for the period from
13 August 2021 to 30 June 2022. If the acquisition had occurred on 1 July 2021, consolidated pro-forma revenue and profit for
the year ended 30 June 2022 would have been $61.1 million and $54.2 million respectively.
Acquired receivables
The fair value of trade receivables acquired was $7.0 million and reflects the gross contractual amount for trade receivables
at the acquisition date. Based on management's best estimate on the acquisition date, the total amount was deemed
recoverable and therefore no provision for expected credit losses was recognised.
Note 22 Audit, taxation and transaction service fees
During the year, the Auditor and its related practices earned the following remuneration:
Audit and review services
Auditors of the group - PwC
Financial statement audit and review services
Audit and review fees paid to PwC
Assurance services
Auditors of the group - PwC
Outgoings audits
Regulatory audit and compliance assurance services
Sustainability assurance services
Other assurance services
Assurance fees paid to PwC
Total audit, review and assurance fees paid to PwC
Other services
Auditors of the group - PwC
Transaction services
Other services fees paid to PwC
Total audit, review, assurance and other services fees paid to PwC
2022
$'000
1,331
1,331
88
187
146
644
1,065
2,396
-
-
2,396
2021
$'000
1,366
1,366
100
116
140
509
865
2,231
712
712
2,943
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Financial report
Note 23 Cash flow information
a. Reconciliation of cash flows from operating activities
Reconciliation of net profit for the year to net cash flows from operating activities.
Net profit/(loss) for the year
Capitalised interest
Depreciation and amortisation
Amortisation of incentives and straight line income
Impairment of intangibles
Net fair value (gain)/loss of investment properties
Net fair value (gain)/loss of financial assets at fair value through profit or loss
Share of net (profit)/loss of investments accounted for using the equity
method
Net fair value (gain)/loss of derivatives
Net fair value (gain)/loss of interest rate swaps
Amortisation of deferred borrowing costs
Net (gain)/loss on sale of investment properties
Net fair value (gain)/loss of interest bearing liabilities
Net foreign exchange (gain)/loss
Distributions from investments accounted for using the equity method
Change in operating assets and liabilities
(Increase)/decrease in receivables
(Increase)/decrease in prepaid expenses
(Increase)/decrease in inventories
(Increase)/decrease in other current assets
(Increase)/decrease in other non-current assets
Increase/(decrease) in payables
Increase/(decrease) in current tax receivables
Increase/(decrease) in current liabilities
Increase/(decrease) in other non-current liabilities
Increase/(decrease) in deferred tax liabilities
Net cash inflow/(outflow) from operating activities
b. Net debt reconciliation
Reconciliation of net debt movements:
Opening balance
Changes from financing cash flows
Proceeds from borrowings
Repayment of borrowings
Proceeds from loan with related party
Non cash changes
Movement in deferred borrowing costs and other
The effect of changes in foreign exchange rates
Fair value hedge adjustment
Closing balance
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180
2022
$m
1,615.9
(8.3)
13.8
87.4
1.9
(437.0)
(6.5)
(845.7)
178.7
(138.5)
7.6
(0.1)
(173.0)
0.2
245.5
(12.1)
2.8
123.8
(2.4)
(127.2)
(6.1)
42.0
(0.5)
(6.7)
4.6
560.1
2021
$m
1,138.4
(1.8)
9.1
85.0
-
(273.7)
-
(565.6)
120.1
(17.7)
3.8
(0.3)
(115.2)
0.1
478.1
11.2
(4.7)
157.6
72.3
(61.4)
(6.0)
(18.6)
25.1
(36.9)
0.4
999.3
2022
Interest bearing
liabilities
$m
2021
Interest bearing
liabilities
$m
4,924.7
4,838.0
18,669.8
(18,681.0)
33.1
4.0
137.8
(173.0)
4,915.4
8,405.0
(7,983.3)
-
(13.0)
(144.1)
(177.9)
4,924.7
Dexus 2022 Annual Report
Note 24 Security-based payments
The DXFM Board has approved a grant of performance rights to DXS stapled securities to eligible participants. Awards, via the
Deferred Short Term Incentive Plans (DSTI), Long Term Incentive Plans (LTI) and Senior Management Retention Awards will be in
the form of performance rights awarded to eligible participants which convert to DXS stapled securities for nil consideration
subject to satisfying specific service and performance conditions.
For each Plan, the eligible participants will be granted performance rights, based on performance against agreed key
performance indicators, as a percentage of their remuneration mix. Participants must remain in employment for the vesting
period in order for the performance rights to vest. Non-market vesting conditions, including Adjusted Funds from Operations
(AFFO), Return on Contributed Equity (ROCE), successful delivery of key strategic initiatives identified by the Board and
employment status at vesting, are included in assumptions about the number of performance rights that are expected to vest.
When performance rights vest, the Group will arrange for the allocation and delivery of the appropriate number of securities
to the participant.
The fair value of performance rights granted is recognised as an employee benefit expense with a corresponding increase in
the security-based payments reserve in equity. The total amount to be expensed is determined by reference to the fair value
of the performance rights granted.
Key assumptions: fair value of performance rights granted
Judgement is required in determining the fair value of performance rights granted. In accordance with AASB 2 Share-
based Payment, fair value is determined independently using Binomial and Monte Carlo pricing models with reference to:
– The expected life of the rights
– The security price at grant date
– The expected price volatility of the underlying security
– The expected distribution yield
– The risk free interest rate for the term of the rights and expected total security-holder returns (where applicable)
The total expense is recognised over the vesting period, which is the period over which all of the specified vesting conditions
are to be satisfied. At the end of each period, the Group revises its estimates of the number of performance rights that are
expected to vest based on the non-market vesting conditions. The impact of the revised estimates, if any, is recognised in
profit or loss with a corresponding adjustment to equity.
a. Deferred Short Term Incentive Plan
25% of any award under the Short Term Incentive Plan (STI) for certain participants will be deferred and awarded in the form of
performance rights to DXS securities.
50% of the performance rights awards will vest one year after grant and 50% of the awards will vest two years after grant,
subject to participants satisfying employment service conditions. In accordance with AASB 2 Share-based Payment, the year
of employment in which participants become eligible for the DSTI, the year preceding the grant, is included in the vesting
period over which the fair value of the performance rights is amortised. Consequently, 50% of the fair value of the performance
rights is amortised over two years and 50% of the award is amortised over three years.
The number of performance rights granted in respect of the year ended 30 June 2022 was 432,632 (2021: 423,514) and the fair
value of these performance rights is $8.88 (2021: $10.65) per performance right. The total security-based payments expense
recognised during the year ended 30 June 2022 was $4,871,728 (2021: $1,794,299).
b. Long Term Incentive Plan
50% of the awards will vest three years after grant and 50% of the awards will vest four years after grant, subject to
participants satisfying employment service conditions and performance hurdles. In accordance with AASB 2 Share-based
Payment, the year of employment in which participants become eligible for the LTI, the year preceding the grant, is included in
the vesting period over which the fair value of the performance rights is amortised. Consequently, 50% of the fair value of the
performance rights is amortised over four years and 50% of the award is amortised over five years.
The number of performance rights granted in respect of the year ended 30 June 2022 was 957,207 (2021: 580,350) and the fair
value of these performance rights is $8.88 (2021: $6.53) per performance right. The total security-based payments expense
recognised during the year ended 30 June 2022 was $1,843,901 (2021: $5,651,985).
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181
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Note 24 Security-based payments (continued)
c. Senior Management Retention Awards
CEO Incentive Award
A once-off CEO incentive award was granted to the CEO on 1 June 2020. The award will vest three years after the grant date,
subject to the participant satisfying employment service conditions, governance and behavioural standards and performance
hurdles. Consequently, the fair value of the performance rights is amortised over three years from the grant date.
The number of performance rights granted in respect of the year ended 30 June 2022 was 356,335 (2021: 356,335). The grant
date fair value of these performance rights is $8.03 (2021: $8.93) per performance right. The total security-based payments
expense related to this award recognised during the year ended 30 June 2022 was $1,024,443 (2021: $89,989).
Retention Equity Award
The retention equity award is a once-off award to certain Key Management Personnel which was granted in December 2020.
50% of the once-off retention equity rights will vest three years after the grant date and 50% of the rights will vest four years
after the grant date, subject to participants satisfying employment service conditions and governance and behavioural
standards. Consequently, 50% of the fair value of the equity rights is amortised over three years and 50% of the rights is
amortised over four years from the grant date.
The number of equity rights granted in respect of the year ended 30 June 2022 was 306,960 (2021: 306,960). The fair value of
these equity rights is $8.26 (2021: $8.20) per equity right. The total security-based payments expense related to this award
recognised during the year ended 30 June 2022 was $690,692 (2021: $444,931).
Note 25 Related parties
Responsible Entity and Investment Manager
DXH is the parent entity of DXFM, the Responsible Entity of DPT and DXO, the trustee of Dexus Office Trust Australia (DOTA)
and the investment manager of DOTA and Dexus Industrial Trust Australia (DITA).
DXH is also the parent entity of DWPL, the responsible entity of DWPF and DADPF, DWFL, the responsible entity of DHPF, DIML,
the responsible entity of DIF, DWML, the trustee of third party managed funds, Dexus Asset Management Limited, the
responsible entity of Dexus Convenience Retail REIT (DXC), Dexus Industria REIT (DXI) and other third party managed funds,
and Dexus RE Limited, the responsible entity of APD Trust.
Management Fees
Under the terms of the Constitutions of the entities within the Group, the Responsible Entity and Investment Manager are
entitled to receive fees in relation to the management of the Group. DXFM’s parent entity, DXH, is entitled to be reimbursed for
administration expenses incurred on behalf of the Group. Dexus Property Services Pty Limited (DXPS), a wholly owned
subsidiary of DXH, is entitled to property management fees from the Group.
The Group received Responsible Entity and other management fees from the unlisted property funds managed by DXS during
the financial year.
Related party transactions
Transactions between the consolidated entity and related parties were made on commercial terms and conditions. All
agreements with third party funds and joint ventures are conducted on normal commercial terms and conditions.
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Dexus 2022 Annual Report
Note 25 Related parties (continued)
Transactions with related parties
Responsible entity (investment management fees)
Property management fee income
Development services revenue (DS), Development Management (DM), Project Delivery
Group (PDG), capital expenditure and leasing fee income
Rent paid
Responsible entity fees receivable at the end of each reporting year (included above)
Property management fees receivable at the end of each reporting year (included
above)
DS, DM, PDG, capital expenditure and leasing fees receivable at the end of each
reporting year (included above)
Loans to related parties1
Loans from related parties2
2022
$'000
111,181.0
44,075.5
28,231.8
4,295.9
34,163.1
2021
$'000
71,357.3
41,228.2
108,848.9
5,052.2
19,782.5
4,621.1
3,854.8
15,084.2
33,700.0
33,058.8
12,123.4
30,650.4
-
1 Represents the Dexus share of a subordinated convertible loan which has been provided to the SAHMRI 2 Trust, a wholly owned subsidiary of SAHMRI 2
Holding Trust. This loan accrues interest at 5.5% per annum and matures on the date the development reaches practical completion. Under the
subordination terms, repayment of this loan may only occur once the external construction loan has been repaid. The loan may be settled in cash or
converted into equity at the election of the holders.
2 Represents the loan between a 100% owned subsidiary of DXO and DREP1 for 49.9% of the purchase price of 888 Christies Road Pty Ltd. The loan is
interest free and repayable following DREP’s acquisition of shares in the subsidiary on demand. The fair value of the option deeds acquired in relation
to this transaction is recorded within other non-current assets in the Consolidated Statement of Financial Position for $72.0 million.
Key management personnel compensation
Compensation
Short-term employee benefits
Post-employment benefits
Security-based payments
Total key management personnel compensation
2022
$'000
10,374.0
705.3
4,542.8
15,622.1
2021
$'000
10,604.8
275.7
4,582.6
15,463.1
Information regarding individual Directors’ and Senior Executives’ remuneration is provided in the Remuneration Report on
pages 79 to 111 of the Annual Report.
There have been no other transactions with key management personnel during the year.
Note 26 Parent entity disclosures
The financial information for the parent entity of Dexus Property Trust has been prepared on the same basis as the
Consolidated Financial Statements except as set out below.
Distributions received from associates are recognised in the parent entity’s Statement of Comprehensive Income, rather than
being deducted from the carrying amount of these investments.
Interests held by the parent entity in controlled entities are measured at fair value through profit and loss to reduce a
measurement or recognition inconsistency.
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Financial report
Note 26 Parent entity disclosures (continued)
a. Summary financial information
The individual Financial Statements for the parent entity show the following aggregate amounts:
Total current assets
Total assets
Total current liabilities
Total liabilities
Equity
Contributed equity
Reserves
Retained profits
Total equity
Net profit/(loss) for the year
Total comprehensive income/(loss) for the year
2022
$m
0.1
12,022.5
222.1
525.4
12,022.4
-
(525.3)
11,497.1
3.1
3.1
20211
$m
60.6
5,926.6
163.8
2,122.1
2,341.4
(0.8)
1,463.9
3,804.5
525.0
509.0
1 As a result of the simplification of the stapled group structure implemented on 6 July 2021, DPT is deemed the new parent entity for financial reporting
purposes. The parent entity for the comparative year was DDF. Refer to the Basis of preparation within the Notes to the Consolidated Financial
Statements for further information.
b. Guarantees entered into by the parent entity
There are no guarantees entered into by the parent entity. Refer to note 16 for details of guarantees entered into by the
Group.
c. Contingent liabilities
The parent entity has no contingent liabilities. Refer to note 16 for the Group's contingent liabilities.
d. Capital commitments
The following amounts represent capital expenditure of the parent entity on investment properties contracted at the end of
the reporting period but not recognised as liabilities payable:
Investment properties
Total capital commitments
e. Going concern
2022
$m
-
-
2021
$m
14.7
14.7
The parent entity is a going concern. The Group has unutilised facilities of $1,871.1 (2021: $1,025.9 million) (refer to note 15) and
sufficient working capital and cash flows in order to fund all requirements of the parent entity as at 30 June 2022.
Note 27 Subsequent events
On 29 July 2022, settlement occurred for the disposal of 383-395 Kent Street, Sydney NSW for $385.0 million excluding
transaction costs.
On 29 July 2022, settlement occurred for the disposal of 140 and 150 George Street, Parramatta NSW for $77.2 million
excluding transaction costs.
Since the end of the year, other than the matters disclosed above, the Directors are not aware of any matter or circumstance
not otherwise dealt with in their Directors’ Report or the Consolidated Financial Statements that has significantly or may
significantly affect the operations of the Group, the results of those operations, or state of the Group’s affairs in future
financial periods.
184
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Dexus 2022 Annual Report
Directors’ Declaration
The Directors of Dexus Funds Management Limited as Responsible Entity of Dexus Property Trust declare that the
Consolidated Financial Statements and Notes set out on pages 121 to 184:
i. Comply with Australian Accounting Standards, the Corporations Regulations 2001 and other mandatory professional
reporting requirements; and
ii. Give a true and fair view of the Group’s consolidated financial position as at 30 June 2022 and of its performance, as
represented by the results of its operations and its cash flows, for the year ended on that date.
In the Directors’ opinion:
a. The Consolidated Financial Statements and Notes are in accordance with the Corporations Act 2001
b. There are reasonable grounds to believe that the Group and its consolidated entities will be able to pay their debts as and
when they become due and payable; and
c. the Group has operated in accordance with the provisions of the Constitution dated 15 August 1984 (as amended) during
the year ended 30 June 2022.
The Consolidated Financial Statements also comply with International Financial Reporting Standards as issued by the
International Accounting Standards Board.
The Directors have been given the declarations by the Chief Executive Officer and the Chief Financial Officer required by
section 295A of the Corporations Act 2001.
This declaration is made in accordance with a resolution of the Directors.
[SIGNATURE]
W Richard Sheppard
Chair
16 August 2022
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Financial report
Independent Auditor’s Report
Independent auditor’s report
To the stapled security holders of Dexus Property Trust
Report on the audit of the Group financial report
Our opinion
In our opinion:
The accompanying Group financial report of Dexus Property Trust (the Trust) and its controlled
entities (together the Group) is in accordance with the Corporations Act 2001, including:
(a) giving a true and fair view of the Group's financial position as at 30 June 2022 and of its
financial performance for the year then ended; and
(b) complying with Australian Accounting Standards and the Corporations Regulations 2001.
What we have audited
For the purposes of consolidation accounting, the Trust is the deemed parent entity and acquirer of
Dexus Operations Trust (DXO). The Group financial report represents the consolidated financial
results of the Trust and includes the Trust and its controlled entities and DXO and its controlled
entities.
The Group financial report comprises:
•
•
•
•
•
•
the Consolidated Statement of Financial Position as at 30 June 2022;
the Consolidated Statement of Comprehensive Income for the year then ended;
the Consolidated Statement of Changes in Equity for the year then ended;
the Consolidated Statement of Cash Flows for the year then ended;
the Notes to the Consolidated Financial Statements, which include significant accounting
policies and other explanatory information; and
the Directors’ Declaration.
The Group financial report excludes the Directors’ Report included on pages 114 to 119 of the
annual report.
Basis for opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities
under those standards are further described in the Auditor’s responsibilities for the audit of the
Group financial report section of our report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a
basis for our opinion.
Independence
We are independent of the Group in accordance with the auditor independence requirements of the
Corporations Act 2001 and the ethical requirements of the Accounting Professional & Ethical
Standards Board’s APES 110 Code of Ethics for Professional Accountants (including
PricewaterhouseCoopers, ABN 52 780 433 757
One International Towers Sydney, Watermans Quay, Barangaroo, GPO BOX 2650, SYDNEY NSW 2001
T: +61 2 8266 0000, F: +61 2 8266 9999
Level 11, 1PSQ, 169 Macquarie Street, Parramatta NSW 2150, PO Box 1155 Parramatta NSW 2124
T: +61 2 9659 2476, F: +61 2 8266 9999
Liability limited by a scheme approved under Professional Standards Legislation.
186
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Dexus 2022 Annual Report
Independent Auditor’s Report (continued)
Independence Standards) (the Code) that are relevant to our audit of the Group financial report in
Australia. We have also fulfilled our other ethical responsibilities in accordance with the Code.
Our audit approach
An audit is designed to provide reasonable assurance about whether the Group financial report is
free from material misstatement. Misstatements may arise due to fraud or error. They are
considered material if individually or in aggregate, they could reasonably be expected to influence
the economic decisions of users taken on the basis of the Group financial report.
We tailored the scope of our audit to ensure that we performed enough work to be able to give an
opinion on the Group financial report as a whole, taking into account the geographic and
management structure of the Group, its accounting processes and controls and the industry in
which it operates.
Materiality
Audit scope
Key audit matters
•
For the purpose of our audit
we used overall materiality of
$37.8 million, which
represents approximately
5% of the Group's adjusted
profit before tax (Funds from
Operations or FFO).
• Our audit focused on where
the Group made subjective
judgements; for example,
significant accounting
estimates involving
assumptions and inherently
uncertain future events.
•
The Group is a stapled entity
with operations in Australia.
In a stapled group the
securities of two or more
entities are 'stapled' together
and cannot be traded
separately. In the case of the
Group, the stapled entity
includes the Trust, DXO and
their respective controlled
entities.
• We applied this threshold,
together with qualitative
considerations, to determine
the scope of our audit and
the nature, timing and extent
of our audit procedures and
to evaluate the effect of
misstatements on the Group
financial report as a whole.
• We chose FFO because, in
our view, it is the key
performance measure of the
Group. An explanation of
what is included in FFO is
outlined in Note 1, Operating
segments.
• Amongst other relevant
topics, we communicated the
following key audit matters to
the Board Audit Committee:
−− Valuation of investment
properties, including those
investment properties in
investments accounted for
using the equity method
−− Carrying amount of
indefinite life assets
(Management Rights and
Goodwill)
−− Acquisition Accounting
(APN and Jandakot)
•
These are further described in
the Key audit matters section
of our report.
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Financial report
Independent Auditor’s Report (continued)
• We utilised a 5% threshold
based on our professional
judgement, noting it is within
the range of commonly
acceptable thresholds.
As part of our audit, we also considered the potential impact of climate change on our risk assessment. We
made enquiries of management to develop an understanding of the process that they adopted to assess
the extent of the potential impact of climate change risk on the Group financial report. We considered
management's progress in developing its assessment, and in particular the assessment of the impact on
the fair value of investment properties.
Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance
in our audit of the Group financial report for the current year. The key audit matters were addressed
in the context of our audit of the Group financial report as a whole, and in forming our opinion
thereon, and we do not provide a separate opinion on these matters. Further, any commentary on
the outcomes of a particular audit procedure is made in that context.
Key audit matter
How our audit addressed the key audit matter
Valuation of investment properties, including those investment properties in investments
accounted for using the equity method
(Refer to Notes 8 and 9)
The Group’s investment property portfolio
comprises:
To assess the valuation of investment properties we
performed the following procedures amongst others:
● Directly held properties included in the
Consolidated Statement of Financial
Position as Investment Properties valued
at $8,295.7 million as at 30 June 2022
(2021: $8,476.8 million).
● The Group’s share of investment
properties valued at $9,322.8 million as at
30 June 2022 (2021: $7,474.6 million) held
through associates and joint ventures
included in the Consolidated Statement of
Financial Position as Investments
accounted for using the equity method.
Investment properties are carried at fair value at
reporting date using the Group’s policy as described
in Note 8. The value of investment properties is
dependent on the valuation methodology adopted
and the inputs and assumptions in the valuation
models. The following significant assumptions are
used in establishing fair value:
● Capitalisation rate
● We compared the valuation methodology
adopted by the Group with commonly
accepted valuation approaches used in the
real estate industry for investment
properties, and with the Group’s stated
valuation policy.
● We obtained recent independent property
market reports to develop an understanding
of the prevailing market conditions in which
the Group invests. We leveraged this
knowledge to assess the reasonableness of
movements in selected assumptions used
in the investment property valuations
including capitalisation rates and discount
rates.
● We assessed the design and tested the
operating effectiveness of certain controls
supporting the Group’s investment property
valuation process, including controls
relating to the review and approval of the
valuations adopted.
● We agreed the fair values of all properties
to the external or internal valuation models,
or to the acquisition price for properties
188
Dexus 2022 Annual Report
Independent Auditor’s Report (continued)
● Discount rate
At each reporting period the Group determines the
fair value of its investment property portfolio in line
with the Group’s valuation policy which requires all
properties to be independently valued by a member
of the Australian Property Institute of Valuers at
least once every three years. It has been the
Group's practice in the majority of cases to have
such valuations performed every six months.
We considered the valuation of investment
properties to be a key audit matter due to the:
● Financial significance of investment
properties in the Consolidated Statement
of Financial Position (including those within
investments accounted for using the equity
method).
● Potential for changes in the fair value of
investment properties to have a significant
effect on the Consolidated Statement of
Comprehensive Income.
● The inherently subjective nature of the
assumptions that underpin the valuations,
including the capitalisation and discount
rates.
acquired close to year end where this was
considered to be appropriate evidence of
fair value.
● For selected data inputs to the valuations,
we agreed relevant details to supporting
documentation. For example, on a sample
basis we compared the rental income used
in the investment property valuations to
relevant lease agreements.
● We performed a risk-based assessment of
the investment property portfolio to
determine those properties at greater risk of
being carried at amounts other than fair
value. Our risk-based selection criteria
included qualitative considerations and
quantitative measures which were informed
by our knowledge of each property, its
asset class and our understanding of the
current market conditions.
● For those properties which met our
selection criteria, we performed procedures
to assess the appropriateness of selected
assumptions used in the valuations. These
procedures included, amongst others:
● Discussions held with
management on the specifics of
the selected individual properties
including, where relevant, any
new leases signed during the
year, lease expiries, incentives,
capital expenditure and vacancy
rates.
● Assessing the capitalisation rate
and discount rate used in the
valuations by reference to market
analysis published by industry
experts and recent market
transactions.
● Testing the mathematical
accuracy of the valuation
calculations.
● As the Group engaged independent valuation
firms to assist in the determination of the fair
value of certain investment properties, we
considered the independence, experience and
competency of the independent valuation firms
as well as the results of their work.
● We met with a selection of independent
valuation firms used by the Group to develop an
understanding of their processes, judgements
and observations.
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Financial report
Independent Auditor’s Report (continued)
● We assessed the reasonableness of the
Group’s disclosures in the Group financial report
against the requirements of Australian
Accounting Standards.
Key audit matter
How our audit addressed the key audit matter
Carrying amount of indefinite life assets (Management Rights and Goodwill)
(Refer to Note 20)
The Group’s indefinite life intangible assets
comprises management rights $433.7 million (2021:
$300.5 million) and goodwill $49.9 million (2021:
$0.9 million). The balance increased during the year
as a result of the APN Property Group acquisition.
The Group performed impairment testing at 30 June
2022 of the indefinite life assets by comparing the
recoverable amount of the indefinite life assets to
their carrying amount. The Group concluded that the
indefinite life assets were not impaired.
We consider the carrying amount of indefinite life
assets a key audit matter given the:
● Financial significance of the balance in the
Consolidated Statement of Financial Position.
● Degree of estimation uncertainty and
judgement used in estimating the recoverable
amount of indefinite life assets.
● Sensitivity of the Group’s assessment of the
recoverable amount of indefinite life assets to
changes in assumptions such as terminal
capitalisation rates, discount rates, and the
growth rates applied to forecast cash flows.
We assessed the methodology applied in the
Group’s impairment models (the models) and
evaluated the appropriateness of the significant
assumptions used to determine the recoverable
amount of the indefinite life assets in those models.
Our audit included the following procedures,
amongst others, in conjunction with PwC valuation
experts:
● We assessed whether the allocation of the
Group's management rights and goodwill to
cash generating units (CGU) was in line with
Australian Accounting Standards and
consistent with our knowledge of the Group's
operations.
● We tested the mathematical accuracy of
impairment model calculations.
● We assessed the appropriateness of the
Group’s impairment model methodology
against commonly accepted valuation
practice, and the appropriateness of selected
inputs and assumptions used in the models by
comparison to our knowledge of the Group’s
operations and observable market factors.
These included terminal capitalisation rates,
discount rates and growth rates.
● We evaluated the appropriateness of
forecasted cash flows by reference to Board
approved budgets and tested the
mathematical accuracy of the underlying
calculations. For cash flows beyond year three
that were not covered by formal budgets, we
have assessed the appropriateness of the
growth rates applied.
● We evaluated the Group's historical ability to
forecast future cash flows by comparing a
selection of prior year budgets to reported
actual results.
● We assessed the reasonableness of the
disclosures made in Note 20, including those
related to estimation uncertainty, against the
190
Dexus 2022 Annual Report
Independent Auditor’s Report (continued)
requirements of Australian Accounting
Standards.
Key audit matter
How our audit addressed the key audit matter
Acquisition Accounting (APN and Jandakot)
(Refer to Notes 21 and 9)
On 13 August 2021, the Group acquired 100% of
the issued share capital of APN Property Group
(APN) for total consideration of $303.6 million.
The Group also executed a number of transactions
between November 2021 and April 2022 that
resulted in the Group holding an interest at 30 June
2022 of 33.4% in Jandakot City Holdings Trust, 32%
in Jandakot Airport Holding Trust and 34.7% in
Jandakot Airport Domestic Trust (collectively,
Jandakot).
We consider the acquisition accounting for these
transactions a key audit matter given the:
● Financial significance of the associated
balances in the Consolidated Statement of
Financial Position.
● The judgement required in assessing the
Group’s ability to influence APN and Jandakot’s
financial and operating policies and hence
whether the associated entities should be
accounted for through consolidation or equity
accounting.
● The complexity and judgement required in
assessing the fair value of the assets and
liabilities acquired. The Group engaged
external valuation experts to assist in the
determination of fair values for selected
balances.
● Sensitivity of the Group’s assessment of the
valuation of indefinite life assets to changes in
assumptions such as terminal capitalisation
rates, discount rates, and the growth rate
applied to forecast cash flows.
Our audit included the following procedures,
amongst others:
● Evaluating the appropriateness of the Group’s
accounting for the acquisitions against the
requirements of Australian Accounting
Standards and key transaction agreements.
● Assessing the reasonableness of the fair values
of selected assets and liabilities acquired,
including:
● Evaluating the appropriateness of the
methodology used by the Group in
determining the fair value of indefinite life
assets and the appropriateness of
selected inputs and assumptions used
including:
• Assessing whether the allocation of
the indefinite life assets to cash
generating units (CGU) was in line
with Australian Accounting Standards
and consistent with our knowledge of
the Group's operations.
• Assessing the appropriateness of the
Group’s valuation model methodology
against commonly accepted valuation
practice, and the appropriateness of
selected inputs and assumptions used
in the models by comparison to our
knowledge of the Group’s operations
and observable market factors. These
included the terminal capitalisation
rate, discount rates and growth rates.
• Evaluating the appropriateness of
forecasted cash flows used in the
valuation models and testing the
mathematical accuracy of the
underlying calculations. For cash
flows beyond year three that were not
covered by formal budgets, we
compared the growth rates applied to
observable market expectations.
• Evaluating the Group's historical
ability to forecast future cash flows by
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191
Financial report
Independent Auditor’s Report (continued)
comparing a selection of prior year
budgets to reported actual results.
● Agreeing the fair values of all newly
acquired investment properties and
development land to the relevant external
valuation reports.
● Considering selected purchase price
adjustments in light of the requirements of
Australian Accounting Standards.
● Assessing the competence and capability
of the Group’s independent valuation
experts and the results of their work.
● Testing the mathematical accuracy of the
Group’s purchase price allocation
calculations.
● Assessed the reasonableness of the
financial statement disclosures for against
the requirements of Australian Accounting
Standards requirements.
Other information
The Directors of Dexus Funds Management Limited as the Responsible Entity of the Trust and
DXO (the Directors) are responsible for the other information. The other information comprises the
information included in the annual report for the year ended 30 June 2022, but does not include the
Group financial report and our auditor’s report thereon.
Our opinion on the Group financial report does not cover the other information and accordingly we
do not express any form of assurance conclusion thereon.
In connection with our audit of the Group financial report our responsibility is to read the other
information and, in doing so, consider whether the other information is materially inconsistent with
the Group financial report or our knowledge obtained in the audit, or otherwise appears to be
materially misstated.
If, based on the work we have performed on the other information that we obtained prior to the date
of this auditor’s report, we conclude that there is a material misstatement of this other information,
we are required to report that fact. We have nothing to report in this regard.
Responsibilities of the Directors for the Group financial report
The Directors are responsible for the preparation of the Group financial report that gives a true and
fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 and
for such internal control as the Directors determine is necessary to enable the preparation of the
Group financial report that gives a true and fair view and is free from material misstatement,
whether due to fraud or error.
192
Dexus 2022 Annual Report
Independent Auditor’s Report (continued)
In preparing the Group financial report, the Directors are responsible for assessing the ability of the
Group to continue as a going concern, disclosing, as applicable, matters related to going concern
and using the going concern basis of accounting unless the Directors either intend to liquidate the
Group or to cease operations, or have no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the Group financial report
Our objectives are to obtain reasonable assurance about whether the Group financial report as a
whole is free from material misstatement, whether due to fraud or error, and to issue an auditor’s
report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a
guarantee that an audit conducted in accordance with the Australian Auditing Standards will always
detect a material misstatement when it exists. Misstatements can arise from fraud or error and are
considered material if, individually or in the aggregate, they could reasonably be expected to
influence the economic decisions of users taken on the basis of the Group financial report.
A further description of our responsibilities for the audit of the Group financial report is located at
the Auditing and Assurance Standards Board website at:
https://www.auasb.gov.au/admin/file/content102/c3/ar1_2020.pdf. This description forms part of our
auditor's report.
Report on the remuneration report
Our opinion on the remuneration report
We have audited the remuneration report included in pages 79 to 111 of the Directors Report for
the year ended 30 June 2022.
In our opinion, the remuneration report of Dexus Property Trust for the year ended 30 June 2022
complies with section 300A of the Corporations Act 2001.
Responsibilities
The Directors are responsible for the preparation and presentation of the remuneration report in
accordance with section 300A of the Corporations Act 2001. Our responsibility is to express an
opinion on the remuneration report, based on our audit conducted in accordance with Australian
Auditing Standards.
PricewaterhouseCoopers
Matthew Lunn
Partner
Sydney
16 August 2022
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Financial report
194
Dexus 2022 Annual Report
Investor
information
Dexus recognises the importance of effective
communication with existing and potential
institutional investors, sell-side analysts and
retail investors.
Our Executives and the Investor
Relations team maintain a strong
rapport with the investment community
through proactive and regular
engagement initiatives. We are
committed to delivering high levels
of transparency and disclosure by:
– Releasing accurate and relevant
information to investors to ensure
they can make informed
investment decisions
– Providing regular access to senior
management through one-on-one
meetings, presentations, property
tours, conferences, dedicated
investor roadshows, conference
calls and webcasts
We adopt strong governance practices
including a policy that ensures a
minimum of two Dexus representatives
participate in any institutional
investor or sell-side broker meetings
and that a record of the meeting is
maintained on an internal customer
relationship management database.
During FY22, senior management
together with the Investor Relations
team held 192 engagements with
investor/broker groups to discuss
the group’s business strategy,
operational, financial and ESG
performance. These engagements
were undertaken across a wide
range of investor activities including
telephone calls, conferences, site visits,
roadshows, one-on-one meetings,
investor briefings and roundtables.
Investor contact
method (by number)
Conferences & panels
Roadshow
Director engagement meetings
Security holders
Property tours
by geography
One-on-one meetings
Group meetings
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One-on-one meetings
Property tours
Director engagement meetings
Roadshows
Conferences & panels
9
135
10
25
2
11
Australia
UK
North America
Europe (ex UK)
Asia
Rest of world
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11%
24%
14%
9%
2%
195
Rest of world
Asia
Europe (ex UK)
North America
UK
Australia
Investor information
2023 Reporting calendar1
2022 Annual General Meeting
2023 Half year results
2023 Annual results
2023 Annual General Meeting
Distribution calendar1
Period end
Ex-distribution date
Record date
Payment date
26 October 2022
14 February 2023
16 August 2023
25 October 2023
31 December 2022
30 June 2023
29 December 2022
29 June 2023
30 December 2022
30 June 2023
28 February 2023
30 August 2023
1 Please note that these dates are indicative and are subject to change without prior notice.
Any changes in our key dates will be published on our website at www.dexus.com/investor-centre.
We encourage all Security holders
and proxyholders to participate in
the Meeting, either by attending the
meeting in person, or via a virtual online
meeting platform or by a webcast at
www.dexus.com/investor-centre.
Details relating to the meeting
and how it will be conducted will
be provided in the 2022 Notice of
Annual General Meeting when its
released in September 2022.
Distribution payments
Dexus’s payout policy is to distribute
in line with free cash flow for which
AFFO is a proxy.
Distributions are paid for the six-month
periods to 31 December and 30 June
each year. Distribution statements are
available in print and electronic formats
and distributions are paid only by direct
credit into nominated bank accounts
for all Australian and New Zealand
Security holders and by cheque for
other international Security holders.
To update the method of receiving
distributions, please visit the investor
login facility at www.dexus.com/update
Unclaimed distribution income
Unpresented cheques or unclaimed
distribution income can be claimed
by contacting the Dexus Infoline on
+61 1800 819 675. For monies
outstanding greater than seven years,
please contact the NSW Office of
State Revenue on +61 1300 366 016,
8.30am-5.00pm Monday to Friday
or use their search facility at
www.revenue.nsw.gov.au/unclaimed-
moneyosr.nsw.gov.au/ucm or email
unclaimedmoney@revenue.nsw.gov.au
AMMA Statement (previously
the Annual Taxation Statement)
An Attribution Managed Investment
Trust Member Annual Statement
(AMMA) is sent to investors at the end
of August each year. The statement
summarises distributions provided
during the financial year and includes
information required to complete
your tax return. AMMA statements
are also available online at
www.dexus.com/update
We participated in a number of
virtual and in-person conferences
which were attended by domestic
and international institutional investors.
These conferences enabled access
to potential new investors and
assisted with strengthening existing
relationships with long term investors.
We regularly commission independent
investor perception studies to gather
feedback from the institutional
investment community. These studies
involve independent surveys and
interviews with institutional investors
and sell-side brokers to measure
perceptions on a number of attributes
and report on the findings. The
results help the Board and Executive
team understand the investment
community’s views and concerns
and assists in the enhancement
of the group’s investor relations
and communications activities.
Our Treasury team held presentations
with institutional debt investors
in August 2021 and February and
March 2022. In addition, the team
participated in the Property Treasurers’
Round Table events facilitated by
the Property Council of Australia
and regularly met with banks, rating
agencies and other credit investors
through the course of the year.
Annual General Meeting
Dexus’s Annual General Meeting
will be held on Wednesday
26 October 2022 commencing
at 2.00pm.
As we resume ‘normal’ life post the
worst of the COVID-19 pandemic,
we are planning to host a hybrid
Annual General Meeting (AGM) with
an in person meeting and utilising
Link Market Services virtual online
meeting platform for Security holders
who cannot join us in Sydney.
As the health and safety of our
Security holders, our employees, all
of their families, and the broader
community, is paramount, this
decision will be reviewed as we get
closer to the date of the AGM.
196
Dexus 2022 Annual Report MAKING CONTACT
If you have any questions regarding
your Security holding or wish to
update your personal or distribution
payment details, please contact
the Registry by calling the Dexus
Infoline on +61 1800 819 675.
This service is available from
8.30am to 5.30pm (Sydney time) on
all business days. All correspondence
should be addressed to:
Dexus
C/- Link Market Services Limited
Locked Bag A14
Sydney South NSW 1235
Phone: +61 1800 819 675
Email:
dexus@linkmarketservices.com.au
We are committed to delivering a
high level of service to all investors.
If you feel we could improve our
service or you would like to make
a suggestion or a complaint,
your feedback is appreciated.
Our contact details are:
Investor Relations
Dexus
PO Box R1822
Royal Exchange NSW 1225
Email: ir@dexus.com
Go electronic for
convenience and speed
Did you know that you can receive
all or part of your security holder
communications electronically?
You can change your communication
preferences at any time by logging
in at www.dexus.com/update or by
contacting Link Market Services on
+61 1800 819 675.
Investor communications
We are committed to ensuring
all investors have equal access
to information. In line with our
commitment to long term integration of
sustainable business practices, investor
communications are provided via
various electronic methods including:
Dexus website
www.dexus.com
Other investor tools available include:
Online enquiry
www.dexus.com/get-in-touch
Scroll down to the investor section
to get in touch with us.
Investor login
www.dexus.com/update
Enables investors to update their
details and download statements.
Subscribe to alerts
www.dexus.com/subscribe
Enables investors to receive Dexus
communications immediately after
release.
Key dates
Notifies investors on key events
and reporting dates.
LinkedIn
We engage with our followers on
LinkedIn at www.dexus.com/LinkedIn
and click follow us.
Complaints handling process
Dexus has a complaints handling policy
to ensure that all Security holders
are dealt with fairly, promptly and
consistently.
Any Security holder wishing to lodge
a complaint, can do so verbally
by calling the Dexus Infoline on
+612 1800 819 675 or in writing to:
Dispute Resolutions Officer
Dexus Funds Management Limited
PO Box R1822
Royal Exchange NSW 1225 or
Email: ir@dexus.com
Dexus Funds Management Limited is
a member of the Australian Financial
Complaints Authority (AFCA), an
independent dispute resolution scheme
which may be contacted at:
Australian Financial Complaints
Authority Limited
GPO Box 3
Melbourne VIC 3001
Phone: +61 1800 931 678
(free call within Australia)
Fax: +61 3 9613 6399
Email: info@afca.org.au
Website: www.afca.org.au
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Investor information
Additional information
Top 20 Security holders at 29 July 2022
Rank Name
Number of stapled
securities
% of issued
capital
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
HSBC Custody Nominees (Australia) Limited
JP Morgan Nominees Australia Pty Limited
Citicorp Nominees Pty Limited
BNP Paribas Nominees Pty Limited
National Nominees Limited
Citicorp Nominees Pty Limited
BNP Paribas Nominees Pty Ltd
HSBC Custody Nominees (Australia) Limited
Medich Capital Pty Ltd
Artmax Investments Limited
HSBC Custody Nominees (Australia) Limited - A/C 2
Pacific Custodians Pty Limited Performance Rights Plan Trust
Australian Executor Trustees Limited
HSBC Custody Nominees (Australia) Limited-GSCO ECA
Netwealth Investments Limited
BNP Paribas Nominees Pty Ltd ACF Clearstream
HSBC Custody Nominees (Australia) Limited
Pelmavigel Pty Ltd
DJS Investment Holdings Pty Ltd
20
BNP Paribas Nominees (NZ) Ltd
Sub total
Balance of register
Total of issued capital
490,499,050
243,181,650
114,457,944
42,100,238
36,393,135
10,895,096
9,852,382
5,905,679
3,402,012
3,273,924
2,876,462
2,444,626
2,054,100
2,040,655
2,040,120
1,893,878
1,515,307
1,322,954
1,207,167
1,203,773
978,560,152
97,005,094
1,075,565,246
45.60
22.61
10.64
3.91
3.38
1.01
0.92
0.55
0.32
0.30
0.27
0.23
0.19
0.19
0.19
0.18
0.14
0.12
0.11
0.11
90.98
9.02
100.00
Substantial holders at 29 July 2022
The names of substantial holders, at 29 July 2022 that have notified the Responsible Entity in accordance with section 671B of
the Corporations Act 2001, are:
Date
21 April 2022
28 July 2021
Name
Blackrock Group
Vanguard Group
4 November 2021
State Street Corporation
Number of
stapled securities
117,798,795
109,255,969
90,161,016
% voting
10.95%
10.16%
8.38%
Class of securities
Dexus has one class of stapled security trading on the ASX with Security holders holding stapled securities at 29 July 2022.
198
Dexus 2022 Annual Report Spread of securities at 29 July 2022
Range
100,001 and over
50,001 to 100,000
10,001 to 50,000
5,001 to 10,000
1,001 to 5,000
1 to 1,000
Total
Securities
995,162,493
3,505,119
20,039,436
18,492,055
32,833,529
5,532,614
%
92.52
0.33
1.86
1.72
3.05
0.51
1,075,565,246
100.00
No. of Holders
63
52
1,156
2,653
13,521
11,980
29,425
At 29 July 2022, the number of security holders holding less than a marketable parcel of 53 Securities ($500) was 704 and they
held a total of 11,756 securities.
Voting rights
At meetings of the Security holders of Dexus Property Trust and Dexus Operations Trust, being the Trusts that comprise Dexus,
on a show of hands, each Security holder of each Trust has one vote. On a poll, each Security holder of each Trust has one vote
for each dollar of the value of the total interests they have in the Trust.
There are no stapled securities that are restricted or subject to voluntary escrow.
On-market buy-back
Dexus announced that it was continuing its on-market securities buy-back program on 22 October 2021 for up to 5% of
DXS securities. In the 12 months to 30 June 2022, Dexus did not buy-back any securities under the buy-back program.
As at the date of this report the buy-back program is closed.
Cost base apportionment
For capital gains tax purposes, the cost base apportionment details for Dexus securities for the 12 months ended 30 June 2022
are:
Date
1 Jul 2021 to 31 Dec 2021
1 Jan 2022 to 30 Jun 2022
Dexus Property Trust
Dexus Operations Trust
97.18%
97.06%
2.82%
2.94%
Historical cost base details are available at www.dexus.com/investor-centre
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Investor information
Integrated Reporting Content Elements Index
An Integrated Report includes eight Content Elements, posed in the form of questions to be answered. The purpose of this
Index is to allow readers to understand how and where we have addressed these integrated reporting content elements
throughout this Annual Report. PwC has been engaged to provide limited assurance as to whether the Content Elements of
the Integrated Reporting Framework have been addressed in this report as described in this Index. This assurance is focused on
whether these Content Elements have been included in this report but does not extend to assessing the accuracy or validity of
any statement made throughout this report.
Content Elements
A. Organisational overview and external environment
What does the organisation do and what are the
circumstances under which it operates?
External environment
B. Governance
How does the organisation’s governance structure
support its ability to create value in the short,
medium and long term?
C. Business model
An integrated report should answer the question:
What is the organisation’s business model including
key; inputs, business activities, outputs and
outcomes?
Reference
About Dexus
Chair and CEO review
How we create value
Megatrends
Strategy
Case study - 25 Martin Place - transformation of a city icon
Key business activities
People and capabilities
Customers and communities
Governance
About Dexus
Chair and CEO review
Decade of Dexus
How we create value
Megatrends
Strategy
Key risks
Financial
People and capabilities
Customer and communities
Environment, Climate resilience
About this report and report scope
Governance
Chair and CEO review
Key resources
Key risks
People and capabilities
Customers and communities
Environment, Climate resilience
Commitments
Governance
Board focus areas
Group Management Committee
Remuneration report
FY22 highlights
About Dexus
Chair and CEO review
How we create value
Megatrends
Strategy
Key resources
Key business activities
Key risks
Materiality assessment
Climate resilience
Performance:
– Financial
– Properties
– People and capabilities
– Customer and communities
– Environment
Collaborating with our suppliers, Modern slavery
Future commitments
Transitioning to renewable electricity, Balancing our remaining emissions
Advancing resource efficiency, valuing materials and the circular economy
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22-26
27
67-69
28-41
42-51
52-55
56-61
62-69
60-61
31, 47, 55, 61, 66
64, 65
66
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Dexus 2022 Annual Report Content Elements
D. Risks and opportunities
An integrated report should answer the question:
What are the specific risks and opportunities that
affect the organisation’s ability to create value over
the short, medium and long term, and how is the
organisation dealing with them?
E. Strategy and resource allocation
An integrated report should answer the question:
Where does the organisation want to go and how
does it intend to get there?
F. Performance
An integrated report should answer the question:
To what extent has the organisation achieved its
strategic objectives for the period and what are its
outcomes in terms of effects on the capitals?
Reference
How we create value
Megatrends
Key resources
Key risks
Materiality assessment
Climate resilience
Chair and CEO review
How we create value
Megatrends
Strategy
Key resources
Key risks
Materiality assessment
Case study - Adopting a hybrid working model
Performance:
– People and capabilities
– Customers and communities
– Environment, Climate resilience
Collaborating with our suppliers
Commitments
Chair and CEO review
Materiality assessment
Performance highlight:
– Financial
– Properties
– People and capabilities
– Customers and communities
– Environment, Climate resilience
Customer NPS
Office and Industrial portfolio performance
Collaborating with our suppliers, Modern slavery
Achieving net zero
Transitioning to renewable electricity, Balancing our remaining emissions
Advancing resource efficiency, valuing materials and the circular economy
Climate resilience
Corporate governance principles
Compliance and regulatory risk
Commitments
G. Outlook
An integrated report should answer the question:
What challenges and uncertainties is the
organisation likely to encounter in pursuing its
strategy, and what are the potential implications
for its business model and future performance?
H. Basis of preparation and presentation
An integrated report should answer the question:
How does the organisation determine what matters
to include in the integrated report and how are
such matters quantified or evaluated?
Summary of materiality determination process
Reporting boundary
Summary of significant frameworks and methods
FY22 highlights
Chair and CEO review
How we create value
Megatrends
Key risks
Performance:
– Financial
– People and capabilities
Remuneration report
Key resources
Materiality assessments
Materiality assessment
About this report and report scope
Environment, Climate resilience
Risks and opportunities:
– Megatrends
– Key risks
Materiality assessment
Report scope
FY22 highlights
GRI standards
Key risks
Performance:
– Financial
– Properties
– People and capabilities
– Customers and communities
– Environment, Climate resilience
Page
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14-15
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12-13
14-15
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52-55
56-61
62-69
60
31, 47, 55, 61, 66
6-9
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28-41
42-51
52-55
56-61
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60-61
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66
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IFC, 202
67-69
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Investor information
To: The Board of Directors of Dexus Funds Management Limited
Independent assurance report on the Integrated Reporting Content Elements Index
within the 2022 Annual report for DEXUS Funds Management Limited (DEXUS)
Scope
In accordance with the terms of engagement letter dated 1 July 2022, we were engaged to perform an
independent limited assurance engagement in respect of the Integrated Reporting Content Elements Index
(the “Subject Matter”) presented in the Annual Report for DEXUS Funds Management Limited (DEXUS) for
the period 1 July 2021 to 30 June 2022 (the “Period”). The criteria against which we assessed the Integrated
Reporting Content Element Index is as described within Section 4 of The International Integrated Reporting
Framework (the “Criteria”).
This assurance is focused on whether these Content Elements have been addressed in the Annual Report but
does not extend to assessing the accuracy or validity of any statement made throughout the Annual Report.
The Assurance Criteria has been developed by the International Integrated Reporting Council. This is a
publicly available document and can be found here: https://integratedreporting.org/resource/international-ir-
framework/
Director’s responsibilities
The Directors are responsible for the Integrated Reporting Content Elements Index within the DEXUS 2022
Annual Report and for the preparation of the Integrated Reporting Content Elements Index in accordance with
the Criteria.
Our Independence and Quality control
We have complied with relevant ethical requirements related to assurance engagements, which include
independence and other requirements founded on fundamental principles of integrity, objectivity, professional
competence and due care, confidentiality and professional behaviour.
In accordance with Auditing Standard ASQC 1 Quality Control for Firms that Perform Audits and Reviews of
Financial Reports and Other Financial Information, Other Assurance Engagements and Related Services
Engagements the firm maintains a comprehensive system of quality control including documented policies and
procedures regarding compliance with ethical requirements, professional standards and applicable legal and
regulatory requirements.
Our responsibilities
Our responsibility is to express a limited assurance conclusion based on the procedures we have performed
and the evidence we have obtained.
Our engagement has been conducted in accordance with the Australian Standard on Assurance
Engagements (ASAE 3000) Assurance Engagements Other Than Audits or Reviews of Historical Financial
Information. That standard requires that we plan and perform this engagement to obtain limited assurance
about whether anything has come to our attention to indicate that the Integrated Reporting Content Elements
Index has not been prepared, in all material respects, in accordance with the Criteria, for the Period. The
procedures we performed were based on our professional judgement and included:
PricewaterhouseCoopers, ABN 52 780 433 757
One International Towers Sydney, Watermans Quay, Barangaroo NSW 2000, GPO BOX 2650 Sydney NSW 2001
T: +61 2 8266 0000, F: +61 2 8266 9999, www.pwc.com.au
Liability limited by a scheme approved under Professional Standards Legislation.
202
Dexus 2022 Annual Report
To: The Board of Directors of Dexus Funds Management Limited
Independent assurance report on the Integrated Reporting Content Elements Index
within the 2022 Annual report for DEXUS Funds Management Limited (DEXUS)
Scope
In accordance with the terms of engagement letter dated 1 July 2022, we were engaged to perform an
independent limited assurance engagement in respect of the Integrated Reporting Content Elements Index
(the “Subject Matter”) presented in the Annual Report for DEXUS Funds Management Limited (DEXUS) for
the period 1 July 2021 to 30 June 2022 (the “Period”). The criteria against which we assessed the Integrated
Reporting Content Element Index is as described within Section 4 of The International Integrated Reporting
Framework (the “Criteria”).
This assurance is focused on whether these Content Elements have been addressed in the Annual Report but
does not extend to assessing the accuracy or validity of any statement made throughout the Annual Report.
The Assurance Criteria has been developed by the International Integrated Reporting Council. This is a
publicly available document and can be found here: https://integratedreporting.org/resource/international-ir-
framework/
Director’s responsibilities
the Criteria.
Our Independence and Quality control
The Directors are responsible for the Integrated Reporting Content Elements Index within the DEXUS 2022
Annual Report and for the preparation of the Integrated Reporting Content Elements Index in accordance with
We have complied with relevant ethical requirements related to assurance engagements, which include
independence and other requirements founded on fundamental principles of integrity, objectivity, professional
competence and due care, confidentiality and professional behaviour.
In accordance with Auditing Standard ASQC 1 Quality Control for Firms that Perform Audits and Reviews of
Financial Reports and Other Financial Information, Other Assurance Engagements and Related Services
Engagements the firm maintains a comprehensive system of quality control including documented policies and
procedures regarding compliance with ethical requirements, professional standards and applicable legal and
regulatory requirements.
Our responsibilities
Our responsibility is to express a limited assurance conclusion based on the procedures we have performed
and the evidence we have obtained.
Our engagement has been conducted in accordance with the Australian Standard on Assurance
Engagements (ASAE 3000) Assurance Engagements Other Than Audits or Reviews of Historical Financial
Information. That standard requires that we plan and perform this engagement to obtain limited assurance
about whether anything has come to our attention to indicate that the Integrated Reporting Content Elements
Index has not been prepared, in all material respects, in accordance with the Criteria, for the Period. The
procedures we performed were based on our professional judgement and included:
PricewaterhouseCoopers, ABN 52 780 433 757
One International Towers Sydney, Watermans Quay, Barangaroo NSW 2000, GPO BOX 2650 Sydney NSW 2001
T: +61 2 8266 0000, F: +61 2 8266 9999, www.pwc.com.au
Liability limited by a scheme approved under Professional Standards Legislation.
● Undertaking enquiries of Management regarding the processes and controls for capturing, collating
and reporting the Subject Matter;
● Reviewing and assessing the appropriateness of the Assurance Criteria;
● Reviewing and assessing the completeness of the Subject Matter;
● Assessing the preparation and presentation of the Subject Matter against the Assurance Criteria;
● Reviewing all references noted in the Subject Matter and confirming the appropriateness of the
references against the Assurance Criteria; and
● Reconciling the sections and page numbers included within the Integrated Reporting Content
Elements Index to the referenced sections of the Annual Report.
The procedures performed in a limited assurance engagement vary in nature and timing from, and are less in
extent than for, a reasonable assurance engagement and consequently the level of assurance obtained in a
limited assurance engagement is substantially lower than the assurance that would have been obtained had a
reasonable assurance engagement been performed. Accordingly, we do not express a reasonable assurance
opinion.
We believe that the evidence we have obtained is sufficient and appropriate to provide a basis for our
conclusion.
Use of report
This report was prepared for the Board of Directors of DEXUS. We disclaim any assumption of responsibility
for any reliance on this report to any persons or users other than the Board of Directors of DEXUS, or for any
purpose other than that for which it was prepared.
Inherent limitations
Because of the inherent limitations due to the selective testing of the information being examined, it is possible
that fraud, error or non-compliance may occur and not be detected. A limited assurance engagement is not
designed to detect all instances of non-compliance of the Integrated Reporting Content Elements Index with
the Criteria, as it is limited primarily to making enquiries, of the Directors, and applying analytical procedures.
The limited assurance conclusion expressed in this report has been formed on the above basis.
Conclusion
Based on our review, which is not an audit, nothing has come to our attention that causes us to believe that
the Subject Matter has not been prepared, in all material respects, in accordance with the Criteria for the
period 1 July 2021 to 30 June 2022.
PricewaterhouseCoopers
Caroline Mara
Partner
Sydney
16 August 2022
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203
Investor information
Key ASX announcements
17 August 2021
2021 Appendix 4E – Results for
announcement to the market
10 December 2021
New investor secured for Dexus
Australian Logistics Trust
17 August 2021
2021 Annual Results Release
17 December 2021
Strong investment demand supports
industrial valuation uplift
17 August 2021
2021 Annual Report
17 August 2021
2021 Annual Results Presentation
17 August 2021
2021 Property Synopsis
17 August 2021
2021 Final distribution details
17 December 2021
Notice of Distribution Appendix 3A
23 December 2021
Sale of 309-321 Kent Street, Sydney
23 December 2021
Sale of 140 & 150 George Street,
Parramatta
17 August 2021
2021 Financial Statements
14 January 2022
Appendix 3G - Notification of Issue,
Conversion or Payment up of
Unquoted Equity Securities
17 August 2021
2021 Sustainability Report
17 August 2021
2021 Modern Slavery Statement
17 August 2021
2021 Appendix 4G and Corporate
Governance Statement
17 August 2021
Appendix 3Y - Darren Steinberg
30 August 2021
30 June 2021 distribution payment
01 September 2021
Changes to Group Management
Committee
01 February 2022
New partner secured for
Jandakot Airport, Perth
15 February 2022
HY22 Results release
15 February 2022
HY22 Appendix 4D and
Financial Statements
15 February 2022
HY22 Distribution details
15 February 2022
HY22 Results presentation
22 September 2021
2021 Notice of Annual General Meeting
15 February 2022
HY22 Property synopsis
23 September 2021
Dexus expands industrial platform
with $1.5 billion of acquisitions and
developments
08 October 2021
Securities trading policy update
18 October 2021
Withdrawal of Resolution 4 for the
2021 Annual General Meeting
21 February 2022
Settlement of 201 Miller Street,
North Sydney
23 February 2022
Sale of 12 Creek Street, Brisbane
23 March 2022
Atlassian development update
31 March 2022
Settlement of 12 Creek Street, Brisbane
19 October 2021
2021 AGM Chair and CEO address
01 April 2022
Final settlement of Jandakot joint venture
19 October 2021
2021 Annual General Meeting results
19 April 2022
Response to market speculation
19 October 2021
September 2021 quarterly update -
Platform expansion in line with strategy
27 April 2022
Dexus agrees to acquire Collimate
real estate and domestic infrastructure
equity business
22 October 2021
Appendix 3C - Notification of buy back
28 October 2021
Response to media speculation
regarding potential divestments
02 May 2022
Settlement of 309-321 Kent Street, Sydney
03 May 2022
2022 Macquarie Australia Conference
01 November 2021
Initial settlement of Jandakot Airport,
Perth
03 May 2022
March 2022 quarter update - Continuing
to deliver on strategic initiatives
23 November 2021
Appendix 3Y - Darren Steinberg
10 May 2022
Appendix 3Y - Warwick Negus
23 November 2021
Appendix 3G – Notification of Issue,
Conversion or Payment up of Unquoted
Equity Securities
13 May 2022
Appendix 3Y - Warwick Negus
23 May 2022
Appendix 3Y - Mark Ford
24 November 2021
Sale of 383 Kent Street, Sydney
21 June 2022
Notice of Distribution Appendix 3A
02 December 2021
Settlement of Grosvenor Place, Sydney
21 June 2022
Portfolio valuation update
03 December 2021
Sale of 201 Miller Street, North Sydney
204
Dexus 2022 Annual Report Our memberships and affiliations
Dexus holds memberships and affiliations with key industry bodies
that are relevant to its investments and operations.
Dexus’s industry memberships ensure that its views are represented on advocacy, on policy and legislation.
The benefits of collaborating with industry peers include strategic partnerships, research, professional development
and networking opportunities.
Dexus regularly reviews these memberships for relevance to its business and alignment with its corporate values.
Current Dexus corporate memberships and commitments include:
Member
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Investor information
Registered office of the
Responsible Entity
Level 25, Australia Square
264 George Street
Sydney NSW 2000
PO Box R1822
Royal Exchange
Sydney NSW 1225
Phone: +61 2 9017 1100
Fax: +61 2 9017 1101
Email: ir@dexus.com
Website: www.dexus.com
Auditors
PricewaterhouseCoopers
Chartered Accountants
One International Towers Sydney
Watermans Quay
Barangaroo NSW 2000
Investor Enquiries
Registry Infoline: +61 1800 819 675
Investor Relations: +61 2 9017 1330
Email: dexus@linkmarketservices.com.au
Security Registry
Link Market Services Limited
Level 12, 680 George Street
Sydney NSW 2000
Locked Bag A14
Sydney South NSW 1235
Website: linkmarketservices.com.au
Open Monday to Friday between
8.30am and 5.30pm (Sydney time).
For enquiries regarding security
holdings, contact the security registry,
or access security holding details at
www.dexus.com/investor-centre
Australian Securities Exchange
ASX Code: DXS
Social media
Dexus engages with its followers
via LinkedIn
We have also used the GRI Standards
to understand material issues from
a stakeholder impact perspective,
as disclosed across our 2022 Annual
Reporting Suite, which is prepared in
accordance with the GRI Standards:
Core option (GRI Content Index and
is provided in our 2022 Sustainability
Report). PwC has provided limited
assurance over select environmental
and social data, within the annual
reporting suite covering the 12 months
to 30 June 2022 (assurance statement
provided in our 2022 Sustainability
Report).
The Annual Report covers financial
performance at all locations.
Environmental data only includes
properties under the group’s
operational control as defined
under the National Greenhouse and
Energy Reporting System (NGER Act).
Additional information on financial,
people, customer, community, supplier
and environmental datasets is provided
in our 2022 Sustainability Report.
Directory
Dexus Property Trust
ARSN 648 526 470
Dexus Operations Trust
ARSN 110 521 223
Responsible Entity
Dexus Funds Management Limited
ABN 24 060 920 783
AFSL 238163
Directors of the Responsible Entity
W Richard Sheppard, Chair
Patrick Allaway
Penny Bingham-Hall
Tonianne Dwyer
Mark H Ford
Warwick Negus
The Hon. Nicola Roxon
Darren J Steinberg, CEO
Secretaries of the Responsible Entity
Brett Cameron
Scott Mahony
Report Scope
This Annual Report has been prepared
in accordance with the content
elements of the 2022 International
Framework, which we use to identify
material issues from an enterprise value
perspective and clearly articulate
how we deliver sustained value for all
stakeholders. An index is provided on
page 200-201 of this report.
PwC has been engaged to provide
limited assurance as to whether
Content Elements of the Integrated
Reporting Framework have been
addressed in the report as described in
this Index. This assurance is focused on
whether these Content Elements have
been included in this report but does
not extend to assessing the accuracy
or validity of any statement made
throughout this report.
206
Dexus 2022 Annual Report dexus.com