Dexus (ASX: DXS)
ASX release
20 August 2024
2024 Annual Report
Dexus provides its 2024 Annual Report including sustainability reporting. This report should be read in
conjunction with the reports in our 2024 Annual reporting suite. The report will be mailed to Security
holders who have elected to receive a hard copy in late-September 2024.
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
Luke O’Donnell
Senior Manager, Media and Communications
+61 2 9017 1216
+61 412 023 111
luke.odonnell@dexus.com
About Dexus
Dexus (ASX: DXS) is a leading Australasian fully integrated real asset group, managing a high-quality Australasian real
estate and infrastructure portfolio valued at $54.5 billion. The Dexus platform includes the Dexus investment portfolio
and the funds management business. We directly and indirectly own $14.8 billion of office, industrial, retail, healthcare,
infrastructure and alternatives. We manage a further $39.7 billion of investments in our funds management business
which provides third party capital with exposure to quality sector specific and diversified real asset products. The funds
within this business have a strong track record of delivering performance and benefit from Dexus’s capabilities. The
platform’s $16.1 billion real estate development pipeline provides the opportunity to grow both portfolios and enhance
future returns. We believe that the strength and quality of our relationships will always be central to our success and are
deeply connected to our purpose Unlock potential, create tomorrow. Our sustainability approach is focused on the
priority areas where we believe we can make significant impact: Customer Prosperity, Climate Action and Enhancing
Communities. Dexus is supported by more than 37,000 investors from 23 countries. With four decades of expertise in
real estate and infrastructure investment, funds management, asset management and development, we have a proven
track record in capital and risk management and delivering returns for investors. www.dexus.com
Dexus Funds Management Limited ABN 24 060 920 783, AFSL 238163, as Responsible Entity for Dexus (ASX: DXS)
(Dexus Property Trust ARSN 648 526 470 and Dexus Operations Trust ARSN 110 521 223)
Level 30, 50 Bridge Street, Sydney NSW 2000
Annual Report
2024
Unlock potential
Create tomorrow
Dexus is a leading Australasian fully
integrated real asset group, owning
and managing a quality real estate
and infrastructure portfolio.
Unlock potential
Create tomorrow
Our purpose
Our purpose reflects our unique ability to create value for
our people, customers, investors and communities over
the long term.
Contents
Dexus 2024 Annual Reporting suite
Overview
2
FY24 highlights
4
About Dexus
6
Chair & CEO review
Approach
10
How we create value
12
Megatrends
14
Strategy
16
Sustainability
strategy
18
Materiality review
20
Key risks
26
Key resources
28
Key business
activities
Performance 30
Financial
performance
38
Leading cities
52
Thriving people
58
Customer prosperity
62
Climate action
72
Enhancing
communities
76
Sustainability
Foundations
Governance
82
Governance
86
Board of Directors
89
Executive Committee
Directors’
report
90
Directors’ report
90
Remuneration report
Financial
report
122 Financial report
Investor
information
188 Investor information
194 Integrated Reporting
Content Elements
Index
Annual Report
2024
Unlock potential
Create tomorrow
Annual Results Presentation
2024
Financial Statements
2024
Corporate Governance Statement
2024
Management Approach & Procedures
2024
Sustainability Data Pack
2024
Modern Slavery Statement
2024
Key information
Annual
Report
Annual
Results
Presentation
Financial
Statements
Corporate
Governance
Statement
Management
Approach &
Procedures
Sustainability
Data Pack
Modern
Slavery
Statement
Strategy
Financial
performance
Operational
performance
Governance
Risk
People and
communities
Environment and
climate action
Security holder
information
The 2024 report is a consolidated
summary of Dexus’s performance for
the financial year ended 30 June 2024.
It should be read in conjunction with
the reports that comprise the 2024
Annual Reporting Suite available from
www.dexus.com/investor-centre. In this
report, unless otherwise stated, references
to ‘Dexus’ refer to Dexus, the ASX listed
entity. References to ‘Dexus Platform’,
‘the platform’, ‘we’, ‘us’ and ‘our’ refer to
the Dexus ASX listed entity and the funds
management business combined. Any
reference in this report to a ‘year’ relates
to the financial year ended 30 June 2024.
All dollar figures are expressed in Australian
dollars unless otherwise stated. The
Board acknowledges its responsibility
for the 2024 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 2024 board meeting. The
2024 Modern Slavery Statement will be
available later in 2024.
Acknowledgement of country
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 and present.
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 unlock potential and find new
ways to build and expand, as they dream and
innovate to create tomorrow.
About this Report
1
Investor information
Financial report
Directors’ report
Governance
Performance
Approach
Overview
FY24 highlights
Financial
Real assets
People and capabilities
We continued to advance as a real asset
manager, focusing on sustainable value
creation and positive impact.
Focus on delivering
financial performance
and distribution
guidance.
$516.3m
Adjusted Funds From Operations
FY23: $555.0m
48.0 cents
AFFO and Distribution per security
FY23: 51.6 cents
$(1,583.8)m
Statutory net profit/(loss) after tax
FY23: $(752.7)m
32.0%
Pro forma gearing
FY23: 27.9%
Attracting, retaining and
developing an engaged
and capable workforce,
within an inclusive
environment that
delivers on our strategy.
Developing, managing
and transacting real
assets to create a
high‑quality portfolio
across Australasia.
$54.5bn
Dexus Platform portfolio
94.8%
Dexus office portfolio occupancy
$16.1bn
Dexus Platform real estate
development pipeline
96.8%
Dexus industrial portfolio occupancy
61%
Employee engagement score
FY23: 70%
34.2%
Females in senior and executive
management roles
FY23: 38.3%
Dexus 2024 Annual Report
2
Climate action
Customers
Communities
Supporting the prosperity
of our customers through
the investment, design,
development and
management of real assets.
Our products and services
prioritise occupant wellbeing
and drive sustainability
performance.
Enhancing the efficiency and
resilience of our portfolio to
minimise our environmental
footprint and ensure it is
positioned to thrive in a
climate‑affected future.
+44
Customer Net Promoter Score
FY23: +40
5.2 stars
Average NABERS Indoor
Environment rating across the
platform office portfolio
FY23: 4.8 stars
10.0%
Reduction in energy intensity across
the platform’s managed office
portfolio since 2019
100%
of electricity sourced from renewable
sources in FY24 across the platform’s
managed portfolio
23.2%
Reduction in water intensity across
the platform’s managed office
portfolio since 2019
Helping communities around
our assets through inclusive
and accessible design
and placemaking, and
investment in infrastructure
that creates social value.
120 assets
Delivering community activations
across Australasia
>$1.78m
Community contribution value
FY23: >$0.6m
3
Investor information
Financial report
Directors’ report
Governance
Performance
Approach
Overview
About Dexus
De
xus
Pla
tfor
m co
mpo
sitio
n
Perth
Port Hedland
Dexus is a leading Australasian fully integrated
real asset group, managing a high-quality
Australasian real estate and infrastructure
portfolio valued at $54.5 billion.
The Dexus Platform includes the
Dexus listed portfolio and the funds
management business. We directly
and indirectly own $14.8 billion of
office, industrial, retail, healthcare,
infrastructure, alternatives and other.
We manage a further $39.7 billion of
investments in our funds management
business which provides third party
capital with exposure to quality sector
specific and diversified real asset
products. The funds within this business
have a strong track record of delivering
performance and benefit from
Dexus’s capabilities.
The platform’s $16.1 billion real estate
development pipeline provides the
opportunity to grow both portfolios
and enhance future returns.
We believe that the strength and
quality of our relationships will always
be central to our success. We are
deeply connected to our purpose
Unlock potential, create tomorrow.
Our sustainability approach is focused
on the priority areas where we believe
we can make a significant impact:
Customer Prosperity, Climate Action
and Enhancing Communities.
Dexus is listed on the Australian
Securities Exchange (trading code: DXS)
and is supported by more than 37,000
investors from 23 countries. With four
decades of expertise in real estate
and infrastructure investment, funds
management, asset management and
development, we have a proven track
record in capital and risk management
and delivering returns for investors.
Our real asset portfolio
spans key cities across
Australia and New Zealand
* Growth markets and other includes infrastructure, healthcare, alternatives and other.
Industrial
$10.6bn
Office
$20.3bn
4
Wellington
Tauranga
Auckland
Melbourne
Canberra
Townsville
Brisbane
Sydney
Adelaide
Darwin
$14.8bn
Dexus
FY23: $17.4 billion
972
Employees
$54.5bn
Funds under management
FY23: $61.0 billion
$39.7bn
Funds Management
FY23: $43.6 billion
432
Assets
Retail
$9.2bn
Growth
markets
& other*
$14.3bn
$7.0bn
Dexus market capitalisation
at 30 June 2024
5
Investor information
Financial report
Directors’ report
Governance
Performance
Approach
Overview
Chair & CEO review
Dexus is positioned to benefit from
megatrends to generate long-term
investment performance.
Warwick Negus (Left), Chair
and Ross Du Vernet (Right),
Group Chief Executive Officer & Managing Director.
Dexus 2024 Annual Report
6
60
50
40
30
20
10
0
FY13*
FY14*
FY15
FY16
FY17
FY18
FY19
FY20
FY21
FY22
FY23
FY24
48.00
Markets move in cycles, and while
conditions are presently challenging,
we invest for the long term. The
assets we own, manage and develop,
the capabilities we build, and the
relationships we forge with clients and
customers continue to position us well
to deliver superior risk-adjusted returns
for Dexus Security holders and our
capital partners over the long term.
Broader business sentiment continues
to be impacted by prolonged economic
uncertainty, with impacts from higher
interest rates, inflation and geopolitical
risks being felt across the economy and
business sector.
Both capital raising and transaction
volumes have slowed and capitalisation
rates have continued to expand, driving
further declines in valuations across
the real estate sector this year.
The business performed as expected
delivering on distribution guidance
for Security holders and maintaining
operating performance in the owned
and managed portfolios.
Financial and operating result
Dexus achieved AFFO and distributions
of 48.0 cents per security for FY24, in
line with guidance, reflecting a decline
of 7.0% on FY23.
Dexus’s financial result this year was
impacted by lower trading profits,
with AFFO excluding trading profits
up 0.2% on the prior year, in line with
guidance. Portfolio like-for-like income
growth, an increased management
operations contribution driven by
the AMP Capital platform acquisition
and performance fees, were offset by
near-term headwinds to funds under
management, together with a higher
average cost of debt.
Occupancy in our office and industrial
portfolios remained high at 94.8% and
96.8%, respectively, due to the quality
and location of our portfolio, along with
strong rent collections at 99.5%. For our
office portfolio, occupancy exceeded
the average Australian market
occupancy of 86.4%, with average
leasing incentives of 27.9%, below the
market average.
“The assets we own, manage and develop, the capabilities
we build, and the relationships we forge with clients and
customers continue to position us well over the long term.”
Pro forma gearing (look-through) of
32.0%2 sits near the lower end of our
target range of 30–40%. We have
successfully divested $7.4 billion of
Dexus assets over the past five years.
A further circa $2 billion of Dexus assets
are earmarked for divestment over
the next three years which, together
with the completion of committed
developments, will further enhance the
quality of our portfolio while maintaining
a prudent level of gearing.
We actively managed our debt position,
refinancing $1.0 billion of facilities with
tenors of up to 8 years, strengthening the
balance sheet and reducing near-term
debt maturities.
Dexus has $2.5 billion of undrawn cash
and debt facilities and was 92% hedged
on average for FY24. Further details
relating to our financial result can be
found on pages 30–37.
*
Adjusted for the one-for-six security
consolidation completed FY15.
Dexus’s statutory net loss after tax was
$1,583.8 million, primarily driven by fair
valuation losses on investment property.
Real estate sector valuations have
declined further this year in response
to transactional evidence. The portfolio
valuations (including assets held for sale
and developments) have resulted in a
total $1.9 billion or circa 12.9% decrease
on prior book values for the 12 months
to 30 June 2024. The value of the office
portfolio decreased 15.6% on prior book
values driven by higher capitalisation
rates and discount rates, partially offset
by market rental growth. The industrial
portfolio decreased by 3.3% on prior
book values, with strong rental growth
largely offsetting the impact of higher
capitalisation rates and discount rates.
In response to rising bond yields, the
S&P/ASX 200 Property Accumulation
(A-REIT) Index recovered to deliver a
24.6% Total Security holder Return in
FY24. Dexus underperformed the A-REIT
index in FY24 with a (11.2)% Total Security
holder Return, as office assets saw
the highest valuation declines in the
Australian real estate market during the
year. Over the past 10 years, Dexus has
delivered an annual compound return of
5.1%, below the A-REIT index at 8.9% over
the same time period.
As a long-term investor, we have
confidence in the value of our quality
office portfolio through the cycle.
There is ongoing demand to occupy
well-located, high-quality buildings as
seen in our office leasing and portfolio
occupancy. Our industrial portfolio
continues to benefit from sustained
market rent growth across key markets
with low land supply, supported by the
strong customer preference to be in
well-connected logistics hubs.
We undertook a total of $4.9 billion1
of transactions across the platform,
including $3.2 billion on behalf
of a number of funds consisting
predominantly of divestments to
maintain prudent gearing levels and
facilitate redemptions, an important
part of our proposition as a leading
fund manager. We continue to
transition the Dexus portfolio, selectively
divesting assets to enhance portfolio
quality and balance sheet strength,
while providing capacity to fund our
committed developments.
History of Dexus
distribution per security
(Cents per security)
1. Includes $4.2 billion real asset transactions
that exchanged or settled post
30 June 2023 and $0.7 billion of real asset
securities across multiple funds.
2. Adjusted for cash and debt in equity
accounted investments, excludes Dexus’s
share of co-investments in pooled funds.
Pro forma gearing includes committed
transactions post 30 June 2024.
Look‑through gearing at 30 June 2024
was 32.6%. Pro forma look-through
gearing including Dexus’s share of equity
accounted co-investments in pooled funds
was 33.2% at 30 June 2024.
7
Investor information
Financial report
Directors’ report
Governance
Performance
Approach
Overview
Chair & CEO review continued
Our funds are performing well. Of the
funds with benchmarks, 84% by funds
under management outperformed
their benchmark.
Since transitioning to Dexus’s platform,
Dexus Wholesale Shopping Centre
Fund continued to generate strong
performance, outperforming its
benchmark by over 400 basis points in
FY24. Dexus Wholesale Property Fund
outperformed its benchmark across
all time periods.
We harnessed pockets of investor
interest against a soft capital raising
backdrop, successfully raising over
$300 million of equity at first close in
Dexus Real Estate Partnership 2, the
second fund in our opportunity series.
The projects in our $16.1 billion real
estate development pipeline are
expected to deliver attractive long-term
returns. They provide embedded future
value by improving the quality and
growth opportunities of our directly
held investments and those portfolios
managed on behalf of our third party
capital partners. Construction progress
remains on track at our city-shaping
developments, Atlassian Central and
stage 1 of Waterfront Brisbane, which
will be completed in 2027 and 2028
respectively.
Our committed industrial pipeline is
active across multiple development
projects owned by Dexus and its
third party capital partners, of which
the majority have secured leases.
Platform initiatives
1. Integration and immediate priorities
This year we achieved Final Completion
and integration of the AMP Capital
systems, processes and people into
Dexus’s platform. The acquisition has
further expanded and diversified our
funds management business.
Following integration completion,
we turned our focus to three
immediate priorities:
– Refining our strategy
– Refreshing our capital allocation
framework
– Implementing a sector-aligned
operating model to drive investment
outperformance in the next phase
of the investment cycle
Our platform currently has a well-
established presence in office, industrial
and retail, with an emerging presence
in the growth markets of healthcare,
infrastructure and alternatives.
Each of our sector-specific business
units are empowered to develop
bespoke strategies across asset
management, development and
transactions that drive investment
outperformance in their unique
competitive domains, and therefore
for our investors and clients. While the
market backdrop has been challenging,
we see different areas of opportunity in
each of the sectors, which leverage our
portfolios and capabilities, and ability
to create value over the long term.
As we think about the next phase of the
cycle, we have evolved our approach
to capital allocation. Our framework
establishes a clear hierarchy for how
we allocate and manage our capital
to protect downside, promote active
management and drive improved
risk-adjusted returns for Security holders
over the long term.
This framework will guide our long‑term
decisions, and the application is
particularly important in our business
given the diverse opportunity set.
2. Sustainability
As we integrated the AMP Capital
assets onto our platform, we
implemented initiatives across the
expanded portfolio, focusing on
the priority areas where we believe
we can make significant impact:
Customer Prosperity, Climate Action
and Enhancing Communities.
We continued the net zero journey for
the building operations of the assets
we manage across our group property
portfolio. We remain committed to
act to limit global warming to 1.5°C
and delivering on our customers’ and
investors’ desire for strong climate
action and low carbon investments,
and are excited about the opportunities
presented by our city-shaping projects
and industrial developments to reduce
our environmental footprint.
Ensuring a consistent approach in
embedding sustainability across
our portfolio, we developed new
Sustainable Development Standards
for the office, industrial and healthcare
sectors to be applied across all new
developments in FY25. We also ensured
that all asset plans and fund investment
plans include sustainability initiatives
aligned to our Sustainability Strategy
and its priority areas.
Sustainability is embedded in our
strategy, our business and our culture
and we are globally recognised for our
leadership in sustainability. Dexus has
once again been included in the S&P
Global Sustainability Yearbook 2024,
achieving the third highest score of
global REIT peers.
The Dexus Platform was recognised
for its leadership by Global Real Estate
Sustainability Benchmark (GRESB), with
Dexus and five funds achieving 5 star
GRESB ratings for 2023. We were also
recognised by Climateworks as one of
two assessed Australian organisations
that fully met their principals for
credible net zero targets and action.
Our focus on customer has seen us
further strengthen our Net Promoter
Score (NPS) to +44 (FY23: +40), at the
high end of the NPS range of -100
to +100. Our partnership with Black
Dog has contributed to enhancing
communities through delivering mental
health training for the employees of our
customers in our office, industrial and
healthcare assets.
The finalisation of the AMP Capital
acquisition and integration onto the
Dexus platform created an interim
period of uncertainty and impacted
our employee engagement score of
61%. Through this time, we continued
to focus on strategic people initiatives,
providing active support for internal
career planning, development and
learning opportunities for our people.
Our active commitment to inclusion
and diversity across our workforce
has delivered initiatives focused on
LGBTQ+ inclusion and reconciliation
with Aboriginal and Torres Strait
Islander peoples. Australian Workplace
Equality Index recognised our efforts
towards LGBTQ+ inclusion with a Silver
employer status. This year we refreshed
our Reflect Reconciliation Action Plan
to align with our business strategy,
purpose and values.
We recognise we operate in a sector
where there are still many obstacles to
achieving gender equity, and it remains
an ongoing challenge for both our
organisation and the industry.
We reiterate our continued commitment
to gender equity and are committed
to addressing the gender pay gap and
improving the representation of women
across all areas of our business.
3. Governance
Dexus is a trusted custodian of our
investors’ capital with a reputation
for strong corporate governance
and highly regarded sustainability
credentials. We have well established
frameworks, processes and policies that
support our strong governance and
risk management practices. The Board
actively seeks feedback to ensure it
stays connected to the culture of the
organisation and gains deeper insights
into its operations.
Dexus 2024 Annual Report
8
Our Board comprises seven
non-executive directors and one
executive director, and we seek
to maintain Board diversity across
gender, skills and experience.
As part of our Board renewal process,
Penny Bingham-Hall retired from the
Board on 28 March 2024, and we
welcomed Peeyush Gupta AM as
a non‑executive director.
We thank Penny for her significant
contribution and leadership as Chair
of the People and Remuneration
Committee, and as a member of
the Nomination & Governance
Committee and the Board
Sustainability Committee.
During the year the leadership of Dexus
transitioned to Ross Du Vernet who
commenced as Group Chief Executive
Officer & Managing Director on
28 March 2024.
Former CEO, Darren Steinberg, was
instrumental in the growth and evolution
of Dexus over the past 12 years. Under
his leadership, the platform’s total
funds under management increased
to $54.5 billion today, while at the
same time portfolio quality has been
enhanced and diversified into new
sectors including healthcare, alternative
investments and infrastructure.
The Board wishes to thank Darren
for his strong leadership of Dexus and
recognises his contribution in shaping
Dexus as it stands today.
Further details relating to the
Board and our governance
practices can be found on pages
82–89, as well as in the Corporate
Governance Statement available at
www.dexus.com/corporategovernance.
Our strategy
Our purpose Unlock potential, create
tomorrow reflects our unique ability to
create value for our people, customers,
investors and communities over the
long term.
Our vision is to be globally recognised
as Australasia’s leading real asset
manager. We will achieve leadership
by delivering superior risk-adjusted
returns for Dexus Security holders and
our capital partners from owning,
managing, and developing quality
real estate and infrastructure assets.
We manage a diversified real asset
portfolio valued at $54.5 billion of
significant scale across each of our
sectors, geographically focused in
Australia and New Zealand.
Our $14.8 billion Dexus portfolio is
predominantly invested in high‑quality
office and industrial real estate
alongside third party clients.
Our $39.7 billion established funds
management business contributes fees
from third‑party capital across scalable
product strategies.
Our real asset portfolio is underpinned
by strong demand drivers. We are
positioned to benefit from sustained
long-term growth from megatrends
including urbanisation, growth in
pension capital, and social and
demographic change such as
population growth and an ageing
population.
The scale of the real estate and
infrastructure opportunity in Australasia
is significant. We aspire to be known
for our deep local sector experience,
our active management approach and
being an investment partner of choice.
Our people are the key to our success.
The way we operate on a day-to-day
basis is focused on our collective talent,
client mindset, sustainability impact,
trusted governance and constant
evolution. This approach enables
our people to unlock the significant
potential of the Dexus business. Further
details relating to our strategy can be
found on pages 14–15.
Summary and outlook
We have refined our strategy, refreshed
our capital allocation framework and
shifted to a sector aligned operating
model to drive outperformance in the
next phase of the investment cycle.
We have also identified a set of
clear action items to support our
medium term priorities of transitioning
the balance sheet, maximising the
contribution from the funds business
and unlocking our deep sector
expertise.
Our disciplined approach to capital
management has enabled us to
maintain a strong balance sheet
through asset recycling.
We have successfully divested
$7.4 billion of Dexus assets over the
past five years. A further $2 billion
of Dexus assets are earmarked for
divestment over the next three years
which, together with the completion of
committed developments, will further
enhance the quality of our portfolio
while maintaining a prudent level
of gearing.
Our well-located property portfolio
continues to benefit from flight to
quality, and our focus on customer
centricity and sustainable outcomes.
Our diversified funds business has
active client enquiry for new products
and attractive investment opportunities.
As the interest rate outlook becomes
more certain, we expect direct investors
will gain greater confidence to deploy
capital. Markets remain challenging
however, we expect well‑located quality
assets to continue to outperform.
Consistent with our strategy, from
FY25 the distribution policy has been
updated to pay out 80–100% of AFFO,
providing a sustainable source of
capital to invest through the cycle
into return-enhancing investment
opportunities. With a preference to
co-invest alongside capital partners,
we see attractive opportunities in
the industrial, infrastructure and
alternative investment sectors.
Barring unforeseen circumstances, for
the 12 months ending 30 June 20251,
Dexus expects:
– AFFO of circa 44.5–45.5 cents per
security
– Distributions of circa 37.0 cents
per security
On behalf of the Board and
management, we extend our
appreciation to our people across
Australia and New Zealand 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 real asset
investments, and our customers for
their loyalty and commitment across
our real asset portfolio.
Importantly, we thank you, our investors,
for your continued investment in Dexus
and we look forward to continuing to
deliver sustained performance.
Warwick Negus
Chair
Ross Du Vernet
Group Chief Executive Officer &
Managing Director
1. Based on current expectations relating to asset sales, performance fees and trading profits, and subject to no material deterioration
in conditions.
9
Investor information
Financial report
Directors’ report
Governance
Performance
Approach
Overview
O
w
ni
ng
De
ve
lo
pi
ng
Our key
areas of
operation
We create
value
through
our key
business
activities
Page 28
Our value drivers
How we create value
Our values
Rally to achieve together
Build trust through action
Megatrends
Page 12
Megatrends shape our operating environment,
generating both risks and opportunities that impact
how we create value through our business model.
Urbanisation
Growth
in pension
capital
Our purpose
Unlock potential
create tomorrow
Financial
Our financial resources are the pool of
funds available to us for deployment.
–
Financial performance
–
Capital management
–
Corporate governance
Real assets
Our real estate and infrastructure assets
are central to how we create value.
–
Portfolio scale and occupancy
–
Economic contribution
–
Development pipeline
–
Industry collaboration
People and capabilities
Our people’s knowledge and expertise are
key inputs to how we create value.
–
Employee engagement
–
Inclusion and diversity
–
Health, safety and wellbeing
Customers
Our capacity to create value depends on
strong relationships with our customers.
–
Customer experience and engagement
Environment
The efficient use of natural resources and
sound management of environmental risks.
–
Resource efficiency
–
Climate resilience
–
Green buildings
Communities
Our capacity to create value depends on strong
relationships with the communities around our
assets, and our suppliers.
–
Local community engagement
–
Community contribution
Dexus 2024 Annual Report
10
M
an
ag
in
g
Real estate
Infrastructure
The value we create
Unlock the potential of real assets to
create lasting positive impact and a
more sustainable tomorrow.
Priorities:
–
Customer prosperity
–
Climate action
–
Enhancing communities
Our sustainability strategy is underpinned by our
foundational areas
Our sustainability strategy
Page 16
Social and
demographic
change
Sustainability
revolution
Materiality and Risk
Page 18
Identifying and understanding our material
matters and risks is critical in the development
and delivery of our strategy.
Our strategy
Page 14
Deliver superior risk‑adjusted returns
for Dexus security holders and our
capital partners by owning, managing
and developing quality real estate
and infrastructure assets.
Financial performance
–
Distribution per security
–
Adjusted Funds From Operations (AFFO) per security
–
Return on Contributed Equity (ROCE)
Leading cities
–
Scale: value of real assets
–
Customer demand and space use: property
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
Thriving people
–
Employee engagement: Employee
Engagement Score
–
Gender diversity: female representation
in senior and executive management roles
–
Health and safety: workplace safety audit score
Customer prosperity
–
Customer experience: customer Net
Promoter Score
–
Initiatives that enhance occupant health and
wellbeing benchmarked using the NABERS
Indoor Environment performance rating
Climate action
–
Climate resilience: Greenhouse gas
emissions reductions
–
Resource efficiency: energy and water
reductions and waste management
–
Performance ratings: NABERS and
Green Star ratings
Enhancing communities
–
Community engagement: number of assets
delivering activations
–
Community contribution: total value contributed,
hours of employee volunteering
Page 30
Page 38
Page 52
Page 58
Page 62
Page 72
11
Investor information
Financial report
Directors’ report
Governance
Performance
Approach
Overview
Megatrends
Megatrends shape our operating
environment, generating both risks and
opportunities that impact how we create
value through our business model.
Megatrend
Urbanisation
Growth in
pension capital
Description
Sustained population growth in major Australian
cities will underpin demand for infrastructure
and real estate investment. Population growth
and investment tends to be focused around
key transport nodes, driving densification and
the need for vibrant communities, creating
challenges for social equity, the environment,
transport systems and city planning.
Funds under management within pension funds
are expected to increase as populations in
developed nations continue to age. Real estate
and infrastructure sectors are expected to
receive a higher share of capital allocation
and benefit from cross border capital flows.
Connection
to key
resources
Real assets
Environment
Financial
Real assets
Financial
Implications for
our business
model and
how we are
responding
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 expansion of e-commerce businesses
which is driving significant growth in demand
for industrial property. The infrastructure
investments we manage enable us to support
the requirements of the growing populations of
the cities in which we operate. We work closely
with our third party capital partners, public
authorities, real estate consultants, technology
providers and the wider community in
undertaking these activities.
Dexus is a leading Australasian real asset
investment manager. Our funds management
business provides third party capital with
exposure to quality, sector-specific and
diversified real estate and infrastructure
investment products. These funds have a
strong track record of performance and benefit
from leveraging the investment management
capabilities of the overall Dexus platform.
In response to the growth in pension capital
fund flows, we are strengthening our funds
management business by attracting new third
party capital, expanding existing investment
products and by launching new products
where we believe a competitive advantage
can be obtained.
Dexus 2024 Annual Report
12
Since 2019, we have aligned our Annual Report with the
Integrated Reporting Framework to meet increasing market
demands to demonstrate how Dexus leverages sustainability
to create long-term value. The material topics from our
materiality assessment (page 19) inform the ‘value drivers’
within the value creation framework on pages 10–11 and are
aligned to the megatrends identified in the table on this page.
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.
Social and
demographic change
Sustainability
revolution
Australia’s population is growing and changing,
becoming more diverse by culture and age
grouping. The working age population is
reducing in proportion to those of retirement
age and new entrants to the workforce have
different expectations and experience from
prior generations. These trends have significant
implications for how society works, lives and
plays as well as the products and services
required to support these activities.
A growing recognition that environmental,
social and governance (ESG) factors are
also economic issues driving a sustainability
revolution. There are increasing opportunities
for sustainability related investments and,
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 measurement
and reporting.
Real assets
Customers
Communities
People and capabilities
Environment
Financial
Customers
Communities
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.
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 Strategy has been integrated
with the Dexus Strategy and has been
designed to 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 in these surveys.
13
Investor information
Financial report
Directors’ report
Governance
Performance
Approach
Overview
Strategy
WHERE
WE WILL
INVEST
WHAT
WE WILL BE
KNOWN FOR
DEEP LOCAL SECTOR
EXPERTISE
Specialist sector teams with deep
local knowledge and
end-to‑end capability
ACTIVE MANAGEMENT
APPROACH
Access to quality opportunities
and outperformance via active
asset management
INVESTMENT PARTNER OF
CHOICE
Trusted partner and aligned
long-term co-investor for third
party capital
HOW
WE OPERATE
OFFICE
RETAIL
INFRASTRUCTURE
INDUSTRIAL
HEALTH
ALTERNATIVES
Collective
talent
Client
mindset
Sustainability
impact
Trusted
governance
Constant
evolution
KEY
MEASURES
OF SUCCESS
Adjusted Funds
From Operations
Investment
performance
Capital strength
& efficiency
Employee
engagement
Customer
satisfaction
LARGE, GROWING
MARKETS
ABILITY TO ACHIEVE
LEADERSHIP
LEVERAGE MULTI-SECTOR
SKILLSET
OUR
VISION
To be globally recognised as Australasia’s
leading real asset manager
WHY
WE EXIST
To unlock potential
and create tomorrow
HOW
WE WILL
ACHIEVE THIS
By delivering superior risk-adjusted returns for Dexus
Security holders and our capital partners by owning,
managing and developing quality real estate and
infrastructure assets
Dexus 2024 Annual Report
14
In pursuing our vision,
we seek to be known
for our deep local
sector expertise,
active management
approach and for being
the investment partner
of choice.
Our purpose to Unlock potential,
create tomorrow reflects our unique
ability to create value for our people,
customers, investors and communities
over the long term.
Our vision is to be globally recognised
as Australasia’s leading real asset
manager.
We will achieve leadership by delivering
superior risk-adjusted returns for
Dexus Security holders and our capital
partners from owning, managing and
developing quality real estate and
infrastructure assets.
The real estate and infrastructure
opportunity in Australasia is significant.
Underpinned by our focus on driving
performance, we seek to invest in areas
with the following characteristics:
– Large, growing markets, with
– Ability to achieve leadership, which
– Leverage our multi-sector skillset
Our platform currently has a
well‑established presence in office,
industrial and retail, with an emerging
presence in healthcare, infrastructure,
alternatives.
Within these markets, there are three
traits that we want to be known
for which will set us apart over the
long term:
– Deep local sector expertise
– Active management approach
– Investment partner of choice
Building competitive advantage in
these areas will enable us to deliver
superior risk-adjusted returns over the
long term.
Our people are the key to our success.
The way we operate on a day-to-day
basis, or the ‘Dexus Way’, guides how
our teams deliver:
– Collective talent – harnessing the
collective potential and diversity
of our talented people
– Client mindset – addressing evolving
needs of our clients when making
decisions
– Sustainability impact – prioritising
tangible impact aligned with
commercial goals
– Trusted governance – operating
a sound business for all our
stakeholders
– Constant evolution – driving
productivity and innovation by
finding a better way
What sets Dexus apart?
1
Deep local
sector expertise
Our specialist teams
provide deep local
market knowledge and
end-to-end capability.
Each sector team is
focused on executing
bespoke strategies
to deliver investment
outperformance.
2
Active management
approach
We drive outperformance
through-the-cycle by
applying the knowledge
and capabilities of our
platform. We actively
assess performance
and recycle capital with
a view to enhancing
portfolio composition.
3
Investment partner
of choice
We are a trusted
partner and custodian
for a broad range of
third party investors.
Dexus provides long term
alignment by investing
our balance sheet
portfolio alongside our
capital partners.
15
Investor information
Financial report
Directors’ report
Governance
Performance
Approach
Overview
Sustainability Strategy
Dexus’s strategy is underpinned by a commitment
to sustainability principles and performance.
We acknowledge the
impact that ESG and
sustainability-related risks
and opportunities can have
on the value of the assets
we invest in and the financial
success of our business.
Corporate Australia is increasingly
focusing on sustainability issues as the
‘sustainability revolution’ megatrend
gains momentum (see page 13).
Sustainability is a key consideration
for our investors, funds management
clients, customers and communities.
Our Sustainability Strategy
prioritises the creation of value and
sustainability impact.
Adapting our sustainability approach
to changing expectations is important
for managing risk and unlocking future
value. A key guiding principle of our
Sustainability Strategy is to ensure it
prioritises and focuses effort on the
issues that are most material to Dexus
to drive greater impact in a targeted
and effective way. Our Sustainability
Strategy supports the achievement
of Dexus’s Strategy and has been
informed by the results of our latest
materiality review (pages 18–19).
Our Sustainability Strategy aligns with
Dexus’s purpose through its aspiration
to unlock the potential of real assets to
create lasting positive impact and a
more sustainable tomorrow.
The strategy identifies three Priority
Areas for greater focus and investment,
while also recognising the foundational
sustainability activities that uphold the
company’s social licence to operate.
Dexus 2024 Annual Report
16
Dexus 2024 Annual Report
16
Circularity
Health &
Wellbeing
Nature
Human Rights
Indigenous
Engagement
Diversity, Equity
& Inclusion
Governance &
Reporting
Foundations
Climate
Action
Customer
Prosperity
Enhancing
Communities
Priorities
Priority Areas
The Priority Areas that we believe will
create greater sustainability impact
while unlocking increased commercial
value are: Customer Prosperity, Climate
Action and Enhancing Communities.
These priority areas utilise our core
business activities and assets to
elevate the importance of customers,
climate and communities to achieve
sustainability outcomes. They also
provide a balance across economic,
social and environmental sustainability.
Foundations
The Foundations that underpin our
Sustainability Strategy incorporate the
sustainability areas that are important
for our stakeholders. These include
Circularity; Indigenous Engagement;
Health & Wellbeing; Nature; Diversity,
Equality & Inclusion; Human Rights;
and Governance & Reporting. Our
commitment is to meet stakeholder
expectations in these foundational
areas, building a platform for greater
impact and value creation in the
Priority Areas.
Implementing our
Sustainability Strategy
A major focus in FY24 has been to
embed the Sustainability Strategy
across the platform. This included
the development of sustainability
roadmaps for each Priority Area.
These have then been implemented
into our fund’s investment and asset
plans and budgets. Each of the areas
of the strategy are addressed in more
detail in subsequent sections of this
annual report.
Unlock the potential of real assets to create lasting
positive impact and a more sustainable tomorrow
Customer Prosperity
Supporting the prosperity of
our customers through the
investment, design, development
and management of real assets.
Dexus’s products and services aim
to support occupant wellbeing and
sustainability performance.
Priority Areas
Climate Action
Focusing on climate action to
accelerate the transition to a
decarbonised economy, while
also safeguarding and advancing
our people, assets, property and
financial returns.
Enhancing Communities
Helping the communities around
our assets through inclusive and
accessible design and placemaking,
and investment in infrastructure that
creates social value.
17
Investor information
Financial report
Directors’ report
Governance
Performance
Approach
Overview
Materiality review
1
2
3
4
5
The concept of materiality is central
to our approach to sustainability.
Materiality provides the
means to prioritise and focus
on the issues of greatest
importance to our business,
while also helping inform
our stakeholders about how
material sustainability issues
impact our ability to create
value and mitigate risk.
Dexus has completed regular
assessments and reviews of material
topics and key megatrends since 2011.
Comprehensive materiality assessments
are typically conducted every two to
three years, with the most recent being
completed in FY23.
These assessments include a reset
of Dexus’s approach to material
topics through external stakeholder
engagement and internal workshops,
analysis of various inputs (such as
employee surveys and external
research) and external validation.
This process determines the categories
and definitions of material topics, which
are tested each year via materiality
reviews until the next materiality
assessment is conducted.
This year we undertook a materiality
review, with inputs from research and
published reports, investor, customer
and employee surveys, upcoming
regulation (e.g. Australian Sustainability
Reporting Standards), media analysis
for relevant high-profile issues or
incidents.
We also engaged directly with
key internal stakeholders, including
Sustainability, Investor Relations,
Finance, Funds Management, Strategy,
P&C and Risk teams.
While the materiality of some topics
have changed as a result of this
analysis, the top five most material
topics for Dexus remain unchanged.
These are:
– Customer engagement
and experience
– Decarbonisation and circularity
– Economic performance
and resilience
– Asset environmental performance
and optimisation
– Championing a high-performance
workplace culture
Desktop
analysis
Stakeholder
engagement
Consolidation
& prioritisation
Double
materiality
Validation
& finalisation
FY23 Materiality
Assessment
Topics identified,
defined and
categorised in themes
through a review of
internal and external
documentation.
Sustainability topics
discussed with
internal and external
stakeholders to
understand their
relative importance.
Identified topics
consolidated to
discrete sustainability
topics. Topics scored
and ranked according
to a set criteria.
Double materiality
analysis applied to the
sustainability topics.
Topics assessed
to determine the
potential contribution
each could make
to the United
Nations Sustainable
Development
Goals (SDGs).
List of sustainability
topics validated and
prioritised by Dexus
management and the
Board ESG Committee
and represented via
the materiality matrix.
FY24 Materiality
Review
Research and review
of key megatrends
and material topics,
and how they align
with Dexus’s strategic
risks, risk management
activities, operations,
and project initiatives.
Consultation with
internal stakeholders
to review material
topics, informed by
research and analysis.
Topics re-scored and
rankings tested.
Consideration of any
changes to double
materiality of topics.
Validation with
Executive Committee
and the Board
Sustainability
Committee. Materiality
matrix adjusted to
reflect the newly
assessed material
topics. The five most
material topics retained
their rankings.
Materiality assessment and review and process
Dexus 2024 Annual Report
18
Higher
Higher
Importance to stakeholders
Lower
Lower
Importance to Dexus
Environment
Social
Governance
Shareholder
sustainability activism
Responsible
supply chain
Diversity,
inclusion &
belonging
Biodiversity
Placemaking &
place-keeping
Indigenous
engagement
Decarbonisation & circularity
Customer engagement
& experience
Economic performance
& resilience
Championing a
high-performance
workplace culture
Corporate transparency
Corporate advocacy
Technology
& innovation
Community impact
& engagement
Asset environmental
performance &
optimisation
Corporate
governance
Climate resilience
& adaptation
Dexus 2024 Materiality Matrix
Dexus’s most material sustainability topics
Material topic
Sub-topics
Definition
Value drivers
Customer engagement
and experience
–
Customer engagement
and experience
–
Customer attraction
and retention
–
Customer health
and wellbeing
Providing safe and healthy assets and places,
while responding to changing customer needs,
including focus on sustainability goals and
identifying new opportunities.
–
Customer experience
–
Occupancy rates
–
Health, safety & wellbeing
Decarbonisation
and circularity
–
Embodied carbon
–
Electrification
–
Future-fit buildings
–
Materials selection
–
Smart buildings
Supporting the transition to a low carbon economy
through innovation and partnering across the value
chain to accelerate decarbonisation. Incorporates
deployment of renewables, exploring new
opportunities for electrification, and minimisation of
embodied carbon in construction. Consideration of
circular principles in design and construction to build
smart and ‘future-fit’ buildings that offer flexibility
and adaptability of use and de-fit/re-fit processes.
–
Resource efficiency
–
Attractiveness of assets
–
Supply chain focus
Economic performance
and resilience
–
Economic performance
–
Sustainable growth
and investment
–
Market volatility
–
Responsible investment
Delivering returns for investors from high‑quality real
assets through the cycle and over the long term.
–
Financial performance
–
Capital management
–
Corporate governance
–
Portfolio scale and
occupancy
Asset environmental
performance and
optimisation
–
Energy efficiency
–
Waste management
–
Water use efficiency
–
Indoor environment
quality
–
Environmental
management systems
Proactively managing asset performance
and promoting and embracing innovation
solutions to advance resource management,
reduce environmental impacts and improve
asset desirability.
–
Green buildings
–
Resource efficiency
–
Development pipeline
–
Climate resilience
Championing a
high‑performance
workplace culture
–
Talent attraction,
retention and
engagement
–
Employee skills and
development
–
Employee health,
safety and wellbeing
Embracing new opportunities to attract and retain
high calibre talent with a range of skills, experience
and creativity. Building and empowering high
performing teams through career development
opportunities and flexibility in ways of working.
Continuing to prioritise the safety and wellbeing
of employees.
–
Employee engagement
–
Diversity and inclusion
–
Health, safety
and wellbeing
Dexus’s material topics are incorporated into the Enterprise Risk Management processes, including the identification of Key
Risks on pages 20–25 of this report. Dexus reports in accordance with the GRI Standards reporting guidelines. The 2024 GRI
Index provides a comprehensive reference specifying the disclosure of material topics across our 2024 Annual Reporting Suite.
More information on the 2024 GRI Index can be found within the 2024 Sustainability Data Pack.
19
Investor information
Financial report
Directors’ report
Governance
Performance
Approach
Overview
Key risks
Key risks1
Health, safety and wellbeing
Description
The risk of not providing an environment that ensures the safety and wellbeing of
employees, customers, contractors and the community at Dexus-managed
assets or responding to events that have the potential to disrupt business continuity.
Potential
impacts
– Death or injury (physical or psychological)
at Dexus properties
– Loss of broader community confidence
– Costs or sanctions associated with regulatory
response, remediation and/or restoration,
and criminal or civil proceedings
– Inability to sustainably perform or
deliver objectives
– Increased employee turnover or absenteeism
– Reduction in employee wellbeing,
engagement and performance
– Business disruption
Link to key
resources
Real assets
People and capabilities
Customers
Communities
How Dexus is
responding
As a priority, we focus on health, safety and
wellbeing to ensure safety risks arising from
our business are appropriately managed.
To achieve this, we have implemented an
ISO 45001 certified Occupational Health and
Safety Management System to ensure the
effective management of health safety and
wellbeing risks across the portfolio. Assisted
by this system, Dexus is committed to:
– Providing safe and healthy working conditions,
including managing the physical and
psychological health, safety and wellbeing
of workers
– To the extent it is within Dexus’s control,
providing a safe environment for all
customers and other persons entering
Dexus owned and managed assets
and development sites by developing,
managing, monitoring, and implementing
tailored risk management processes
– Ensuring compliance with legislative
and regulatory obligations
– Providing appropriate training, information
and instruction on Dexus Health Safety
and Wellbeing programs
– Actively promoting and developing initiatives,
objectives, and targets to improve Health
Safety and Wellbeing performance
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 Dexus‑managed
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.
We recognise that effective risk management
requires an understanding of risks during all
phases of the investment life cycle.
Dexus 2024 Annual Report
20
Strategic resilience
Investment and financial performance
Inability to deliver the group’s strategic
objectives, generate value and deliver
superior risk‑adjusted performance.
Inability to meet market guidance, achieve the group’s
performance objectives and mitigate factors that may adversely
impact the Dexus portfolio.
– Sustained inflation and recessionary pressures on the
economy which could impact strategic outcomes
– Change in external market conditions
– Loss of broader community confidence
– Reputational damage
– Inability to meet guidance
– Inability to sustainably perform or deliver
investment objectives
– Sustained inflation and recessionary pressures on the
economy which could impact financial performance
– Reduced investor sentiment (equity and debt)
– Loss of broader community confidence
– Reduced credit ratings and availability of debt financing
– Decline in asset valuations
– Reputational damage
Financial
Real assets
Customers
Communities
Dexus’s vision is to be recognised as the leading real asset
investment manager in Australia. Dexus aims to achieve
this through providing superior risk adjusted returns for
investors through investing Dexus balance sheet capital
and managing investments on behalf of its third party
capital partners.
Dexus has processes in place to monitor and manage
strategic outcomes and risks. Its strategy and risk appetite
are approved annually by the Board and reviewed
throughout the year by management and the Board
Risk Committee.
Progress against strategy is subject to regular review
and reporting to the Board and regular sensitivity
analysis undertaken.
We have processes in place to monitor and manage
performance and risks that may impact on performance.
Dexus management is responsible for the consideration,
approval or endorsement, subject to delegated authority,
of material investment decisions.
The Dexus Executive Investment Committee includes the Chief
Executive Officer, Chief Financial Officer, Chief Investment
Officer and other executive representatives who are responsible
for the consideration, approval or endorsement, subject to
delegated authority, of material investment decisions. Detailed
due diligence is undertaken for developments before approval
or endorsement of each investment decision.
Detailed due diligence is undertaken for all investment and
divestment proposals and major capital expenditure before
approval or endorsement of each investment decision. Major
capital projects are monitored by control groups to assess
delivery and performance outcomes. Quarterly monitoring
and review of financial results is reported to the Board.
Financial
Real assets
Effective risk management is critical to
our vision, achieving our strategy and
delivering 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.
Our key risks incorporate insights and
material topics relating to ESG from our
materiality review process, described on
pages 18–19.
1. 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.
21
Investor information
Financial report
Directors’ report
Governance
Performance
Approach
Overview
Key risks continued
Key risks1
Capital management
Development
Description
Inability of the capital structure of the business to
withstand unexpected changes
in equity and debt markets.
The risk of not achieving development objectives
that provide the opportunity to grow Dexus’s
and our third‑party capital partners’ portfolios
and enhance future returns.
Potential
impacts
– Constrained capacity to execute strategy
– Increased cost of funding (equity and debt)
– Fluctuations in interest rates which could
impact the cost of debt
– Fluctuations in foreign exchange rates which
could impact profitability
– Reduced investor sentiment (equity and debt)
– Reduced credit ratings and availability of
debt financing
– Fund mandates negatively impacted
– Leasing outcomes impacting on
completion valuations
– Fluctuations in construction costs
– Negative impacts on supply chain channels
(cost and availability of resources)
– Reputational damage
Link to key
resources
Financial
Real assets
Financial
How Dexus is
responding
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 limits
outlined within the Treasury Policy.
Further information relating to financial
risk management is detailed in Note 14 of
the 2024 Financial Report contained in this
2024 Annual Report.
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.
Dexus 2024 Annual Report
22
Institutional and
retail investors
Cyber and
data security
Compliance
and regulatory
Inability to deliver on strategic
objectives to meet the financial and
non-financial expectations of listed
and unlisted investors.
Inability to access, protect and
maintain systems and respond to
major incidents including data loss,
cyber security threats to or breaches
of information systems.
The risk of not meeting requirements
or expectations of investors and
regulators through governance and
compliance practices.
– Change in strategy and/or
capacity of existing third party
capital partners
– Inability to attract new third party
capital partners
– Loss of confidence in governance
structure and service delivery
– Loss of funds management income
– Reputational damage
– Lack of resilience in Dexus’s response
to cyber security threats
– Impact to Dexus’s customers
and/or investors
– Loss of broader community
confidence
– Data integrity compromised
– Loss or damage to systems or assets
– Sanctions impacting on
business operations
– Reduced investor sentiment
(equity and debt)
– Loss of broader community
confidence
– Increased compliance costs
Real assets
Customers
Communities
Financial
Real assets
Customers
Communities
People and capabilities
People and capabilities
Our funds management model
includes strong governance principles
and processes designed to build
and strengthen relationships with
existing and prospective third party
capital investors.
Our active approach to engagement
across the business enables
employees to understand the interests
of third‑party capital investors
and design strategies to maintain
investor 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, including
financial accounting and operational
systems. Regular reviews of policies
and procedures on information
security are undertaken.
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 to or
breaches of data. We also educate
and train our people on how to best
protect their data.
Additional reviews have been
undertaken in response to the increased
frequency and nature of cyber-attacks
experienced across the broader
Australian corporate landscape.
Mitigation strategies are in place
to address potential cyber security
threats to, or via, our assets.
Our compliance monitoring program
supports our comprehensive compliance
framework 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.
23
Investor information
Financial report
Directors’ report
Governance
Performance
Approach
Overview
Key risks continued
Key risks1
Environmental and
social sustainability
Organisational culture
Description
The risk of not responding to the impacts
of climate change or mitigating negative
social impacts in the communities in which
Dexus operates.
Inability to maintain a respectful, open and
transparent culture which supports diversity
of opinion and values acting honestly,
ethically and with integrity.
Potential
impacts
– Increased costs associated with global
and domestic energy market fluctuations
– Increased challenges and climate transition
impacts in leasing assets due to heightened
customer demand for sustainability and
climate change performance in real 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
– Decreased business performance
– Inappropriate conduct leading to
reputational damage or financial loss
– Reduced investor sentiment (equity and debt)
– Inability to attract and retain talent due to a
perception of poor corporate culture
Link to key
resources
Environment
Customers
Communities
Customers
Communities
People and capabilities
How Dexus is
responding
Dexus implements an ISO 14001 accredited
Environment Management System including an
environment risk assessment and audit program
to identify and assess risks associated with DXS
owned assets and operations, and to monitor that
controls are effectively implemented.
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
the 2024 Annual Reporting Suite.
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.
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 anecdotal and anonymous feedback via
pulse surveys throughout the year. Insights gained
are used to understand our culture and employee
experience, to identify strengths and areas of
opportunity that require additional focus.
Our employee reference groups are empowered
to implement organisational initiatives to build an
inclusive workplace, such as our LGBTQ+ employee
network and the Reconciliation Action Plan Working
Group.
We also invest in our employees’ development and
reward their achievement of sustainable business
outcomes that add value to our stakeholders.
Dexus 2024 Annual Report
24
Talent and capability
Third party supplier
management
Inability to attract and retain the best talent
to deliver business results.
Adverse impact from an external party including
suppliers, vendors, contractors, or service
providers with whom Dexus has outsourced
a service or function.
– Decreased business performance
– Negative impact to customer relationships
– Decline in workforce productivity
– Increased workforce costs
– Loss of corporate knowledge and experience
– Poor employer brand leading to inability to
attract talent
– Unplanned employee turnover and
associated increased costs and time
to resource
– Lack of resilience in Dexus’s third‑party
supplier’s response to cyber security threats
– Impact to Dexus’s customers and/or investors
– Business or operational disruption
– Reputational damage
– Adverse regulatory outcomes
– Modern slavery/Human rights infringements
People and capabilities
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
across the organisation 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 talent and critical roles. External
talent mapping is undertaken for critical roles.
As a part of the employment value proposition,
our people are offered 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 each year.
Dexus acknowledges our responsibility to
ensure that standards relating to people, the
environment and the communities in which
we operate are maintained and continuously
improved throughout our supply chain. Dexus
is committed to working with contractors and
service providers who maintain the highest
ethical, safety and quality standards.
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.
To support the delivery of our environmental,
social and governance commitments and
objectives, we request that all suppliers
engaging with Dexus agree to abide by
the Supplier Code of Conduct.
Financial
Real assets
Customers
Communities
25
Investor information
Financial report
Directors’ report
Governance
Performance
Approach
Overview
Key resources
We rely on our key resources and relationships
to create value now and into the future.
Our key resources and how they are linked to value creation
Our capacity to create value depends on strong
relationships with the communities around our assets.
We support communities around our assets through
inclusive and accessible design and placemaking, and
investment in infrastructure that creates social value.
The efficient use of natural resources and sound
management of environmental risks and opportunities
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.
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, safety and wellbeing at all
levels of our business.
Our real estate and infrastructure assets are central to
how we create value. We actively manage our portfolio
to enhance its potential, while unlocking value through
development to further enhance quality or for higher and
better uses.
Our real asset portfolio is concentrated in Australia
and New Zealand’s major cities, which we contribute to
shaping as leading destinations to live, work and play.
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 investments,
funds management, 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 returns to Dexus investors.
Our capacity to create value depends on strong
relationships with our customers.
We support the prosperity of our customers through the
investment, design, development and management
of real assets. Dexus’s products and services support
occupant wellbeing and sustainability performance.
Communities
Environment
People and capabilities
Real assets
Financial
Customers
Dexus 2024 Annual Report
26
Page 30
Page 38
Page 52
Page 58
Page 72
Page 62
The value that is created
How we measure value
Engaged local communities in and around our
assets through inclusive and accessible design
and placemaking, and investment in infrastructure
that creates social value.
– Community engagement: number of assets
delivering activations
– Community contribution: total value contributed,
hours of employee volunteering
Accelerating the transition to a decarbonised
economy, while also safeguarding and advancing
our people, assets, property and financial returns.
– Resource efficiency: energy and water reductions
and waste management
– Climate resilience: Greenhouse gas
emissions reductions
– Performance ratings: NABERS and Green Star ratings
An engaged, capable and inclusive workforce,
adopting high-performance ways of working to
deliver on our strategy.
– Employee engagement: Employee
Engagement Score
– Gender diversity: female representation in senior
and executive management roles
– Health and safety: workplace safety audit score
A high-quality portfolio that contributes to economic
prosperity and supports sustainable urban
development across Australasia’s key cities.
– Scale: value of real assets
– Customer demand and space use: property
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
Superior long-term performance for our investors and
third party capital partners, supported by integration
of ESG issues into our business model.
– Distribution per security
– Adjusted Funds From Operations (AFFO) per security
– Return on Contributed Equity (ROCE)
Productive and satisfied customers supported
by high-performing real assets that enhance the
wellbeing of the individuals and communities who
work in and visit our places.
– Customer experience: customer Net Promoter Score
– Initiatives that enhance occupant health and
wellbeing benchmarked using the NABERS Indoor
Environment performance rating
Enhancing communities
Climate action
Thriving people
Leading cities
Financial performance
Customer prosperity
27
Investor information
Financial report
Directors’ report
Governance
Performance
Approach
Overview
Key business activities
Our key business activities
of owning, managing and
developing seek to deliver
superior risk-adjusted
returns from each asset
on the Dexus platform.
We seek to be known for our deep
local sector expertise, our active
management approach and for
being the investment partner of
choice. These traits enable Dexus
to attract third party capital which
provides the opportunity to develop
incremental scale in our target markets
and capacity to invest in evolving
our platform.
Expanding our platform enables
continued investment in our capabilities,
systems and processes. For Dexus
Security holders, this provides the
ability to access enhanced returns
as the business becomes increasingly
capital efficient.
We create value for our stakeholders through
owning, managing and developing quality
real estate and infrastructure assets.
We create value
through our key
business activities
Dexus 2024 Annual Report
28
Our key
areas of
operation
Real estate
Infrastructure
M
a
n
a
gi
n
g
O
w
ni
n
g
D
e
v
el
o
pi
n
g
Owning
Dexus invests its balance sheet capital
directly and indirectly into a portfolio
of high-quality assets (Investment
Portfolio). Dexus’s Investment Portfolio
is the largest driver of financial value for
Dexus Security holders (83%1 of Funds
From Operations (FFO) for the financial
year ended 30 June 2024).
The Investment Portfolio primarily
comprises ownership interests in
high-quality office and industrial
assets and includes interests in third
party funds that are managed by
Dexus. The Investment Portfolio will
become more diversified over time
as we invest alongside partners
into a broader opportunity set.
At 30 June 2024, Dexus’s investment
portfolio was valued at $14.8 billion.
Managing
Dexus manages a $54.5 billion
Australasian real estate and infrastructure
portfolio. This includes the directly held
investments and $39.7 billion of funds
under management on behalf of third
party capital partners.
In our real estate portfolio, we utilise our
management expertise to maximise
value from the assets we manage
across the platform. This active
approach seeks to add value through
leasing to diversify the customer mix
across our real estate portfolio and
capitalise on the stage that we are at in
the cycle. Our in-house project delivery
group assists in effectively managing
downtime and delivering capital works
projects in a timely manner.
Our infrastructure portfolio is supported
by capability and expertise in
managing infrastructure investments
on behalf of third party capital, with
meaningful exposure in transport,
energy, social and health infrastructure.
Our ability to attract key strategic
capital partners is testament to
our experience and leading market
position. We seek to be identified as
the investment partner of choice 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 improve portfolio
quality and enhance future returns
through leveraging our integrated real
asset platform.
At 30 June 2024, the Dexus platform
has a $16.1 billion group real estate
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
capital partners’ strategies and
provides organic growth in assets under
management. Dexus’s share of the
development pipeline is $7.9 billion with
the remaining $8.2 billion spread across
our funds management portfolio.
1. FFO contribution is calculated before net finance costs, group corporate costs and other FFO.
29
Investor information
Financial report
Directors’ report
Governance
Performance
Approach
Overview
Financial
performance
Our prudent and active management
of financial capital underpins the delivery
of returns to investors.
$516.3m
Adjusted Funds
From Operations
FY23: $555.0m
$(1,583.8)m
Statutory net profit/
(loss) after tax
FY23: $(752.7)m
4.0%
Return on
Contributed Equity
48.0 cents
AFFO and Distribution
per security
FY23: 51.6 cents
32.0%
Pro forma gearing1
FY23: 27.9%2
Financial performance
Dexus 2024 Annual Report
30
Our capacity to sustain
financial performance
depends on our ability to
leverage our key resources
to create value, underpinned
by a high standard of
corporate governance.
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.
Where we will invest
Underpinned by our focus on driving
performance, we seek to invest in areas
with the following characteristics:
– Large, growing markets, with
– Ability to achieve leadership, which
– Leverage our multi-sector skillset
Our platform currently has a
well‑established presence in office,
industrial, and retail, with an emerging
presence in healthcare, infrastructure,
alternatives. Within these markets,
there are three traits that we want to
be known for which will set us apart
over the long term:
– Deep local sector expertise
– Active management approach
– Investment partner of choice
Building competitive advantage in
these areas will enable us to deliver
superior risk-adjusted returns for Dexus
Security holders over the long term.
We evolved our capital allocation
framework to establish a holistic
approach to allocating capital across
a broader, more diverse opportunity set.
Our framework establishes a clear
hierarchy for how we allocate and
manage our capital to protect
downside, promote active management
and drive improved risk-adjusted returns
for Security holders over the long term.
Acknowledging the right combination
of capital uses will change through
time, we have designed our framework
to be dynamic, enabling adjustments
based on market conditions, our
growth aspirations and risk appetite.
Consistent with our strategy, from
FY25 the distribution policy has been
updated to pay out 80–100% of AFFO,
providing a sustainable source of
capital to invest through the cycle
into return-enhancing investment
opportunities. With a preference to
co-invest alongside capital partners,
we see attractive opportunities in
the industrial, infrastructure and
alternative investment sectors.
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.
In FY24, the Board and Board Audit Committee was 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 overseeing Dexus’s internal audit program.
Key areas of focus in FY24 included:
– Approving the financial KPIs and
the Group Scorecard
– Approving Dexus’s annual and
half year results materials
– Approving capital management
initiatives
– Overseeing the tender process for
Dexus’s external audit for FY25 with
the intention of appointing KPMG as
statutory auditor subject to Security
holder approval at the 2024 AGM
– Noted the appointment of Dexus’s
core tax advisor and internal auditor
effective from FY25
– Approval of the extension and/or
repricing of $1 billion in bank facilities
with multiple lenders at commercially
attractive terms and conditions
1. Adjusted for cash and debt in equity accounted investments, excludes Dexus’s share of
co-investments in pooled funds. Pro forma gearing includes committed transactions post
30 June 2024. Look-through gearing at 30 June 2024 was 32.6%. Pro forma look-through
gearing including Dexus’s share of equity accounted co-investments in pooled funds was
33.2% at 30 June 2024.
2. Pro forma gearing including proceeds and payments for transactions post 30 June 2023
that settled before 16 August 2023.
Board Focus
31
Investor information
Financial report
Directors’ report
Governance
Performance
Approach
Overview
Group performance
Broader business sentiment continues
to be impacted by prolonged economic
uncertainty, with impacts from higher
interest rates, inflation and geopolitical
risks being felt across the economy
and business sector. Operating in this
environment remains challenging. Both
capital raising and transaction volumes
have slowed and capitalisation rates
have continued to expand, driving
further declines in valuations across the
real estate sector this year.
Dexus delivered AFFO and distributions
of 48.0 cents per security for the
12 months ended 30 June 2024, in
line with guidance.
Dexus delivered a statutory net loss after
tax of $1,583.8 million, compared to a
statutory net loss after tax of $752.7 million
in FY23. This movement was primarily
driven by $1,901.6 million of fair valuation
losses on investment properties as a
result of capitalisation rates softening
across the portfolio, compared to
$1,183.9 million of fair valuation losses
recognised in the prior year. Total portfolio
valuation movements include the impact
of investments classified as debt in
Australian trusts.
The portfolio valuations resulted in
a circa 12.9% decrease on prior book
values for the 12 months to 30 June
2024. These revaluation losses primarily
drove the $1.91 or 17.6% decrease in
net tangible asset (NTA) backing per
security during the year to $8.97 at
30 June 2024.
Operationally, Underlying Funds From
Operations (excluding trading profits)
of $693.1 million was 0.7% above the
prior year, demonstrating resilience.
Key drivers included:
– Total Investments FFO reduced by
$31.8 million driven by divestments,
partly offset by fixed rent increases,
recently completed developments,
higher one‑off income related to the
industrial portfolio and increased
income from co‑investments in
pooled funds
– Management operations FFO
increased significantly by
$30.0 million, reflecting the AMP
Capital acquisition and recognition
of circa $28 million in performance
fees, partly offset by the impact of
divestments, valuation declines and a
lower contribution from development
milestone fees compared to FY23
– Group corporate costs increased by
$17.6 million, primarily due to the AMP
Capital acquisition and inflation,
with cost management initiatives
implemented as part of the refreshed
operating model
– Net finance costs reduced by
$7.1 million, reflecting the impact of
divestments on the average debt
balance, partly offset by the impact
of a higher average cost of debt
– Other FFO expenses reduced by
$17.1 million, driven by lower FFO
tax expense as a result of interest
costs on acquisitions within Dexus
Operations Trust (DXO)
AFFO of $516.3 million was 7.0% lower
than the prior year driven by lower
trading profits, with AFFO excluding
trading profits marginally higher than
the prior year:
– Trading profits of $10.3 million (net
of tax) were $39.9 million below
the prior year, as Dexus chose not
to restock its trading pipeline late
in the cycle
– Maintenance capex and incentives
of $187.1 million were $3.6 million
above the prior year, due to
an increase in lessor works and
the continued impact of higher
incentives flowing through the
portfolio, partially offset by the
impact of divestments
On a per security basis, AFFO and
distributions per security were 48.0 cents,
down 7.0% on the prior year.
We maintained a strong balance sheet
with pro forma gearing (look‑through)1
of 32.0%, towards the lower end of our
target range of 30–40%.
Delivering FY24 Financial performance commitments
FY24 commitment
Status
FY24 progress
Barring unforeseen circumstances for the 12 months
ended 30 June 2024:
– Dexus expects distributions of circa 48.0 cents per
security, below the 51.6 cents per security delivered
in FY23, predominantly driven by lower trading profits
– AFFO excluding trading profits is expected to be
broadly in line with that delivered in FY23
For the 12 months ended 30 June 2024,
Dexus delivered:
– AFFO and distributions of 48.0 cents per security,
in line with guidance
– AFFO excluding trading profits of $506.0 million,
0.2% above that delivered in FY23
Maintain a strong and diversified balance sheet.
Dexus maintained a strong balance sheet with
pro forma gearing (look‑through) at 32.0%, towards
the lower end of our target range of 30–40%, while
maintaining a conservative debt maturity profile
and hedging levels.
Achieved
Not achieved
Progressed
Financial performance continued
Dexus 2024 Annual Report
32
FY25 commitments
Barring unforeseen circumstances,
for the 12 months ending
30 June 20259, Dexus expects
AFFO of circa 44.5–45.5 cents per
security and distributions of circa
37.0 cents per security.
Focus areas
Maintain a strong and diversified
balance sheet.
Valuation movements
Total FY24
Jun 2024
Dec 2023
Office portfolio
($1,790m)
($1,177m)
($614m)
Industrial portfolio
($110m)
($37m)
($73m)
Total portfolio2
($1,902m)
($1,214m)
($687m)
Weighted average capitalisation rate
30 Jun 24
30 Jun 23
Change
Office portfolio
6.05%
5.21%
+84bps
Industrial portfolio
5.45%
4.76%
+69bps
Total portfolio2
5.90%
5.11%
+79bps
We continued to maintain a strong financial position with low gearing and
substantial liquidity.
Key financials
FY24
FY23
Change
Statutory net profit/(loss) after tax ($m)
(1,583.8)
(752.7)
(110.4)%
Funds From Operations (FFO) ($m)
703.4
738.5
(4.8)%
AFFO ($m)
516.3
555.0
(7.0)%
AFFO per security (cents)
48.0
51.6
(7.0)%
Distribution per security (cents)
48.0
51.6
(7.0)%
Net tangible asset backing per security ($)
8.97
10.88
(17.6)%
Return on Contributed Equity (%)
4.0
8.0
(4.0)ppt
Gearing (look‑through)1 (%)
32.03
27.94
4.1ppt
FFO composition
FY24
$m
FY23
$m
Change
%
Office property FFO
554.2
597.6
(7.3)%
Industrial property FFO
140.7
163.5
(13.9)%
Co‑investments in pooled funds5
70.3
35.9
95.8%
Total Investments FFO
765.2
797.0
(4.0)%
Management operations6
142.6
112.6
26.6%
Group corporate
(66.4)
(48.8)
(36.1)%
Net finance costs
(130.1)
(137.2)
5.2%
Other (including tax)7
(18.2)
(35.3)
48.4%
Underlying FFO
693.1
688.3
0.7%
Trading profits (net of tax)
10.3
50.2
(79.5)%
FFO
703.4
738.5
(4.8)%
Maintenance and leasing capex
(187.1)
(183.5)
(2.0)%
Adjusted Funds From Operations (AFFO)
516.3
555.0
(7.0)%
1. Adjusted for cash and debt in equity accounted investments and excludes Dexus’s share of
co‑investments in pooled funds.
2. Valuation movement excludes co‑investments in pooled funds. Includes the impact of
investments classified as debt in Australian trusts, other property revaluation loss of $1.2m and
excludes leased assets and right of use assets revaluation gain of $0.9m.
3. Pro forma gearing includes committed transactions post 30 June 2024. Look-through gearing
at 30 June 2024 was 32.6%. Pro forma look-through gearing including Dexus’s share of equity
accounted co-investments in pooled funds was 33.2% at 30 June 2024.
4. Pro forma gearing including proceeds and payments for transactions post 30 June 2023 that
settled before 16 August 2023.
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 Report.
6. Management operations FFO includes development management fees.
7. Other FFO includes non‑trading related tax expense, directly owned childcare property and
other miscellaneous items.
8. FFO is calculated before net finance costs, group corporate costs and other FFO.
9. Based on current expectations relating to asset sales, performance fees and trading profits,
and subject to no material deterioration in conditions.
83% of FFO from Investments portfolio8
60%
Office
property FFO
16%
Management
operations
15%
Industrial
property FFO
8%
Co-investments
in pooled funds
1%
Trading profits
(net of tax)
33
Investor information
Financial report
Directors’ report
Governance
Performance
Approach
Overview
Statutory profit reconciliation
FY24
$m
FY23
$m
Change
%
Statutory AIFRS net profit/(loss) after tax
(1,583.8)
(752.7)
(110.4)%
Gains from sales of investment property
–
0.6
(100.0)%
Fair value (gain)/loss on investment
property
1,633.6
1,144.9
42.7%
Fair value (gain)/loss of investments at
fair value
302.6
30.2
902.0%
Fair value (gain)/loss on the
mark‑to‑market of derivatives
5.5
67.6
(91.9%)
Incentives amortisation and
rent straight‑line1
161.1
153.6
4.9%
Non‑FFO tax expense/(benefit)
(36.6)
(42.7)
(14.3%)
Share of co‑investment adjustments
114.3
29.8
283.6%
Amortisation and impairment
4.1
62.2
(93.4%)
Other unrealised or one‑off items2
102.6
45.0
128.0%
Funds From Operations (FFO)
703.4
738.5
(4.8)%
Maintenance capital expenditure and
lessor works
(63.3)
(48.5)
30.5%
Cash incentives and leasing costs paid
(44.9)
(52.9)
(15.1)%
Rent free incentives
(78.9)
(82.1)
(3.9)%
Adjusted Funds From Operations (AFFO)3
516.3
555.0
(7.0)%
Distribution
516.3
555.0
(7.0)%
AFFO payout ratio (%)
100.0
100.0
–
Group outlook
Markets move in cycles, and while
conditions are presently challenging,
Dexus invests for the long term. The
assets we own, manage and develop,
the capabilities we build, and the
relationships we forge with clients and
customers will position us well to deliver
superior risk-adjusted returns for Dexus
securityholders and our capital partners
over the long term.
Dexus has successfully divested
$7.4 billion of assets over the past five
years. A further $2 billion of Dexus assets
are earmarked for divestment over
the next three years which, together
with the completion of committed
developments, will further enhance the
quality of our portfolio while maintaining
a prudent level of gearing.
Consistent with our strategy, from
FY25 the distribution policy has been
updated to pay out 80–100% of AFFO,
providing a sustainable source of
capital to invest through the cycle
into return-enhancing investment
opportunities. With a preference to
co-invest alongside capital partners,
we see attractive opportunities in
the industrial, infrastructure and
alternative investment sectors.
Barring unforeseen circumstances, for
the 12 months ending 30 June 20254,
Dexus expects AFFO of circa
44.5–45.5 cents per security and
distributions of circa 37.0 cents
per security.
Financial performance continued
Dexus 2024 Annual Report
34
$150m
$100m
$50m
$0m
FY23
FY24
$112.6m
$142.6m
Funds management
performance
Dexus manages $39.7 billion of funds on
behalf of a diversified mix of investors.
We are the partner of choice for a
deep network of domestic and global
investors. We provide a broad range of
quality investment exposure and invest
alongside our capital partners with a
view to performance over the long term.
Management operations FFO grew
significantly in FY24, reflecting the AMP
Capital acquisition and recognition
of circa $28 million in performance
fees, partially offset by the impact of
valuation declines, divestments and a
lower contribution from development
milestones compared to FY23.
This year we achieved Final Completion
and integration of the AMP Capital
real estate and infrastructure platform
and people. The acquisition has further
expanded and diversified our funds
management business.
Our expanded funds management
platform offers a spectrum of
investment products across real estate
and infrastructure sectors, including
pooled funds, listed funds, joint
ventures or partnerships and real estate
securities funds.
Our diverse capital base includes
domestic and global institutional
investors, as well as a growing presence
of retail and high net worth investors.
Dexus Real Estate Partnership 2
(DREP2), which launched in October
2023, successfully raised more than
$300 million in equity commitments in
its first close from both institutional and
private investors, as well as returning
DREP1 investors. This fund is expected to
be materially larger than DREP1 which
closed with $475 million of equity, circa
90% of which has been committed
across the real estate subsectors,
including credit opportunities.
The funds platform continues to deliver
performance for investors. Of the
funds with a benchmark, 84% by funds
under management outperformed
the respective benchmarks in FY245.
Dexus Wholesale Property Fund
(DWPF) outperformed its benchmark
across all time periods and in FY24
outperformed by circa 200 basis points.
Since transitioning to Dexus’s platform,
Dexus Wholesale Shopping Centre
Fund (DWSF) continued to generate
strong performance, outperforming its
benchmark by over 400 basis points
in FY24.
The platform again achieved
independent recognition across the
institutional and retail investor space.
All offshore real estate clients from the
Peter Lee institutional investor survey
consider Dexus to be either above
average or excellent and circa 90% of
these investors would consider Dexus
for the right opportunity.
Dexus also ranked first on unlisted real
estate relationship strength index for
the third consecutive year by asset
consultants. Dexus was recognised as
a Finalist in the 2023 Zenith Investment
Partners Fund Award in the Real
Asset category. All retail investor
pooled funds are ‘recommended’ by
Lonsec Research and/or Zenith, with
Dexus Core Infrastructure Fund being
upgraded in FY24.
Dexus secured circa $3.2 billion of
transactions across the funds platform
during the year6, the vast majority of
which were divestments on behalf of
a number of funds to maintain strong
gearing levels and facilitate redemption
requests to meet client needs, an
important part of our proposition as a
leading fund manager.
The funds platform continues to
be recognised for its leadership by
Global Real Estate Sustainability
Benchmark (GRESB), with Dexus Office
Partnership and DWPF ranked in the
top 5% of participants globally. Dexus
Healthcare Property Fund (DHPF),
DWPF and Powerco in New Zealand
were also recognised as sector leaders.
In addition, Melbourne Airport (an
infrastructure investment) was awarded
a 2023 ‘Airports Going Green Award’.
1. Including cash, rent free and fit out incentives amortisation.
2. Includes $83.8m transaction costs and one-off significant items (including costs associated with the AMP Capital platform acquisition and
integration and other successful transaction and one-off significant items) and $14.4m of unrealised fair value losses on interest bearing liabilities.
The remaining net $4.4m expense relates to various other items.
3. AFFO is in line with the Property Council of Australia definition.
4. Based on current expectations relating to asset sales, performance fees and trading profits, and subject to no material deterioration
in conditions.
5. Aggregate of individual fund performance against its respective benchmark and performance period. Funds included are DWPF, DWSF, DHPF,
DDIT, CommIF, DXI, DXC and DCIF.
6. Includes $0.7bn of real asset securities across multiple funds.
Management
operations FFO
Funds management
investor location
Funds management
composition
Funds management
allocation
44%
Real estate
wholesale
pooled funds
19%
Real estate
joint ventures
17%
Infrastructure
JV/Mandates
9%
Infrastructure
pooled funds
6%
Real estate
securities
and other
4%
Listed REITS
1%
Infrastructure
retail fund
75%
Australia
25%
Offshore
$10.6bn
Infrastructure
$10.5bn
Office
$8.8bn
Retail
$7.0bn
Industrial
$1.5bn
Healthcare
$0.8bn
Real estate
securities
$0.5bn
Opportunity
35
Investor information
Financial report
Directors’ report
Governance
Performance
Approach
Overview
As a result, our customer base is more
diverse, with an average tenancy
size of 1,200 square metres, and we
have less exposure to large customers
than our peers6. We have proactively
diversified our customer base over
many years, and we continue to
manage our forward lease expiries
within acceptable threshold levels.
Industrial portfolio performance
Dexus manages a high‑quality
$10.6 billion industrial portfolio across
the platform, $3.6 billion of which sits in
the Dexus portfolio.
During the year, we leased 170,500
square metres of industrial space
across 40 transactions, as well as
82,100 square metres of space across
10 industrial developments.
Our industrial portfolio continues
to perform well, albeit with some
moderation as expected following
the very strong run experienced
by industrial markets over the past
three years.
Industrial portfolio effective like‑for‑like
income growth4 softened slightly to
3.9%, impacted by a slight reduction
in portfolio occupancy as a result of
vacancies at select facilities.
Average incentives increased to
16.5% reflecting normalising market
conditions, with incentives lower in
the second half at 13.7%. Net effective
releasing spreads remain strong at
circa 17%.
Financial performance continued
The portfolio is 15.4% under-rented,
benefiting from continued market rent
growth in Dexus’s key markets, and circa
26% of the portfolio is set to access
rental reversion upon expiry by FY26.
Our national and customer centric
industrial portfolio consists of
well‑located, high-quality assets,
and along with our development
capabilities, provide a complete
solution for customers with growth
aspirations and net zero ambitions.
Our strategic focus is on building
long-term relationships with high
value and growing customers. Circa
75% of industrial income is derived
from relationships held directly with
customers rather than third party
logistics operators.
Property market outlook
In office, location remains a key
differentiator for asset performance,
with the Sydney core and Melbourne
eastern core again reporting materially
lower vacancy compared with
their respective CBD averages. The
Brisbane market continues to improve,
benefiting from strong demand and
limited medium‑term supply. Incentives
in Sydney and Melbourne CBDs are
expected to remain elevated in the
near term before vacancy normalises.
While the long‑term fundamentals for
industrial real estate remain sound,
market rent growth slowed in a number
of key markets in the second half of
FY24, reflecting subdued take‑up.
Third party logistics (3PL) providers
have been less active in leasing and
have contributed sublease space to
the market. Vacancy trended higher
during the year, albeit remains below
pre‑COVID levels.
Investment portfolio
We are focused on
maximising the performance
of our investments and
continuing to enhance
our portfolio composition.
Our resilient investment portfolio
maintained high occupancy,
contributing to 83% of FFO in FY241.
Office portfolio performance
Dexus’s high quality portfolio continues
to demonstrate resilience against a
challenging operating environment,
with occupancy of 94.8% and the
average terms of new leases signed
at circa 5.6 years.
Dexus manages a high‑quality
$20.3 billion office portfolio across its
platform, $9.8 billion of which sits in
the Dexus portfolio. During the year, we
leased 160,400 square metres of office
space across 271 transactions, as well
as 8,700 square metres of space across
four office development deals, securing
future income streams.
Despite persistent headwinds, our
office portfolio occupancy reduced
marginally during the year to 94.8%,
however remains well above the wider
market at 86.4%2. Average incentives of
27.9% again outperformed the market,
reflecting the quality and location of
our portfolio. Incentives were lower
than FY23, which was impacted by
some large renewal deals in higher
incentive markets. Incentives in Sydney
and Melbourne CBDs are expected
to remain elevated in the near term
before vacancy normalises.
As expected, effective like-for-like
income growth4 slowed to +0.5%,
reflecting amortisation impacts and
downtime on select vacancies. On a
face basis, excluding amortisation,
like-for-like growth was 2.5%.
The resilience of the office portfolio is
underpinned by its high quality and
heavy weighting to core CBD markets,
where customers want to be. In our
experience, smaller tenancies generate
on average higher returns and present
less volatility and leasing exposure than
larger tenancies. Our scale enables us
to invest in the systems and processes
to service these customers efficiently.
Office portfolio key metrics
94.8%
Occupancy
FY23: 95.9%
4.7 years
WALE
FY23: 4.8 years
160,400sqm
Space leased3
+0.5%
Effective LFL income4
FY23: +5.6%
27.9%
Average incentives3
FY23: 30.0%
Industrial portfolio key metrics
96.8%
Occupancy
FY23: 99.4%
4.3 years
WALE
FY23: 4.8 years
170,500sqm
Space leased5
+3.9%
Effective LFL income4
FY23: +2.4%
16.5%
Average incentives5
FY23: 10.7%
Dexus 2024 Annual Report
36
Source of debt
Drawn
basis
Facilities
basis
Bank facilities
36%
58%
Commercial paper
2%
1%
MTN
21%
14%
USPP
31%
21%
Exchangeable Notes
10%
6%
Bank debt
36%
58%
Debt capital markets
64%
42%
Drawn
Facilities
1. FFO contribution is calculated before net finance costs, group corporate costs and other FFO.
2. Australian CBD average by Property Council Australia at July 2024.
3. Excluding development leasing of 8,700 square metres across 4 transactions.
4. Excluding rent relief measures and provision for expected credit losses.
5. Excluding development leasing of 82,100 square metres across 10 transactions.
6. Less than 5% of Dexus’s office income is represented by Sydney CBD’s largest 25 corporate
tenants.
7. Pro forma gearing includes committed transactions post 30 June 2024. Look-through gearing
at 30 June 2024 was 32.6%. Pro forma look-through gearing including Dexus’s share of equity
accounted co-investments in pooled funds was 33.2% at 30 June 2024.
8. Adjusted for cash and debt in equity accounted investments and excludes Dexus’s share of
co‑investments in pooled funds.
9. Pro forma including proceeds and payments for transactions post 30 June 2023 that settled
before 16 August 2023.
10. Weighted average for the year, inclusive of fees and margins on a drawn basis.
11. Average for the year. Hedged debt (excluding caps) was 75% for the 12 months to 30 June 2024
and 69% for the 12 months to 30 June 2023.
Financial position
– Look‑through net tangible assets decreased by $2,055 million, primarily due to
property devaluations of $1,902 million
– 92% of debt was hedged on average across FY24 providing material protection
against interest rate movements
Look-through net tangible assets
30 Jun 2024
$m
30 Jun 2023
$m
Office investment properties
9,670
12,152
Industrial investment properties
3,187
3,686
Other properties
22
23
Co‑investment assets
1,791
1,452
Borrowings
(4,872)
(5,478)
Other
(147)
(129)
Net tangible assets
9,651
11,706
Total number of securities on issue
1,075,565,246
1,075,565,246
NTA ($ per security)
8.97
10.88
Capital management
We continued to maintain a strong balance sheet with pro forma gearing
(look‑through)7 of 32.0%, toward the lower end of our target range of 30–40%, and
$2.5 billion of cash and undrawn debt facilities.
Dexus executed $1 billion of debt extensions during the year. We have a weighted
average debt maturity of 4.8 years, manageable near-term debt expiries and
remain within all of our debt covenant limits, retaining 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.
Key metrics
30 Jun 2024
30 Jun 2023
Pro forma gearing (look‑through)8 (%)
32.07
27.99
Cost of debt10 (%)
4.1
3.7
Average maturity of debt (years)
4.8
5.1
Hedged debt (incl caps)11 (%)
92
86
S&P/Moody’s credit rating
A‑/A3
A‑/A3
Diversified sources of debt
Co‑investment income
Dexus receives distribution income
from investments in pooled property,
real estate securities and infrastructure
funds. Investments in pooled funds
are predominantly represented by
investments in quality real asset portfolios
across office, healthcare, industrial, retail
and infrastructure sectors.
In FY24, Dexus received $70.3 million
in co‑investment income, an increase
from $35.9 million in FY23. This was
predominantly driven by new investments
in a number of funds in connection with
the AMP Capital platform acquisition.
These investments further diversify
investment earnings and provide
alignment to support fund growth.
Trading performance
Trading is a capability using our
expertise to package investment
properties to generate trading profits.
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, developed, packaged
and sold.
Dexus delivered on its FY24 trading
profit guidance realising $10.3 million
trading profits (post tax), and is
restocking the trading pipeline, with
potential contributions from FY25.
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Financial report
Directors’ report
Governance
Performance
Approach
Overview
Leading cities
How we are
creating
Leading
cities
Dexus is a leading Australasian fully integrated
real asset group, managing a high-quality
real estate and infrastructure portfolio.
94.8%
Dexus office
portfolio occupancy
$54.5bn
Dexus Platform real
asset portfolio
$2.5bn
Gross value added
to the Australian
economy1,2
15,141
Construction jobs
supported1,3
96.8%
Dexus industrial portfolio
occupancy
$16.1bn
Dexus Platform real
estate development
pipeline
Dexus 2024 Annual Report
38
Our real asset portfolio
provides the opportunity
to make a significant
contribution to the prosperity
and liveability of our cities.
Contributing to Leading Cities
The contribution of our real estate and
infrastructure investments and their
potential to create value are closely
linked to the success of Australasia’s
major cities.
Our scale across Australasian cities
means we are well positioned to benefit
from the megatrends of urbanisation
and population growth.
We are playing a leading role in
delivering world-class urban precincts,
helping to shape our cities as desirable
places to live, work and play, while
contributing to job creation and
economic growth.
The assets in our infrastructure
portfolio connect our cities and bring
us together every day. They include
real estate enabled essential services
that underpin the operation of society
such as airports, schools and aged
care facilities.
Sustainability impact is a key principle
that binds the approach across our
teams in the ‘Dexus way’. Our focus
on climate action is embedded in
the operations of our real estate
portfolio and complemented by the
renewable energy investments in our
infrastructure portfolio.
Our Approach to Leading Cities
Our Leading Cities approach involves:
– Developing and managing
world‑class office properties
that deliver customer focused,
sustainable workspaces, and
which enhance the amenity
and vibrancy of CBDs
– Developing high-quality,
well‑connected logistic hubs to
meet the growing demands of
ecommerce business and other
growth industry customers
– Creating vibrant and thriving retail
destinations as part of mixed-use
placemaking that support our
communities and generate social
and economic value
– Contributing to the long-term
viability of cities through investing
in real estate enabled infrastructure
assets that deliver much-needed
services to the community,
including healthcare
– Building strong city partnerships
through collaboration with industry
associations and supporting events
and activations that celebrate
our cities
Board focus
From a real asset perspective, the Board approves acquisitions, divestments
and developments.
In FY24, the Board was involved in:
– Approving the divestment of various
real estate assets including 5 Martin
Place, Sydney and 130 George Street,
Parramatta
– Approving the acquisition of
co-investment stakes
1. REMPLAN is used to model the potential economic benefits associated with Dexus’s
committed developments. REMPLAN is an Input Output model that captures inter-industry
relationships within an economy. The multipliers and jobs data are provided by Urbis.
2. Represents the value added (i.e. economic growth) generated through the Dexus Platform
committed development pipeline. GVA is calculated using the value of the total development
spend across the Dexus Platform in FY24 as a key input.
3. An estimation of all direct and indirect jobs created over the life of the construction phase of
the projects in the Dexus Platform committed development pipeline. This is calculated using
standard industry jobs per square metre benchmarks and regional employment multipliers
for NSW.
39
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Directors’ report
Governance
Performance
Approach
Overview
Leading cities continued
Urbanisation of our cities
Key real asset sectors set to
take advantage of megatrends
Dexus is well placed to capitalise on
the growth and opportunities driven
by urbanisation. The top city centres
across the world are recognised for their
amenity, ease of access, and place
to do business that draw individuals
together 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 more than
65% of our national GDP and are
ranked in the top 20 most liveable
cities globally. CBDs are the engine
room for most of this economic activity,
supporting businesses and jobs.
The ongoing urbanisation
of our cities is expected to
drive demand for services and
amenity across workspace, heath,
social facilities, transport and living.
With Australia’s population expected
to increase by more than 50% over
the next 40 years, Dexus is well
positioned in these sectors to
realise sustained value.
FY24 commitment
Status
FY24 progress
Maintain office portfolio occupancy above the
Property Council of Australia market average.
Dexus office portfolio occupancy of 94.8%
exceeded the Property Council of Australia’s
national occupancy rate of 86.4% at 30 June 2024.
Grow industrial precincts by more than 220,000 square
metres in FY24 to meet the demand for high-quality,
highly accessible logistics facilities across Australia.
Delivered 233,400 square metres of industrial
space in VIC and WA across the platform.
Progress city-shaping precinct projects to improve the
amenity and vibrancy of Australia’s CBDs.
Progressed construction at Atlassian Central, Sydney
and Waterfront Brisbane.
Focus area
Contribute to economic growth through the generation
of employment and contribution to gross value added
from development projects.
Dexus’s platform real estate development pipeline
generated $2.5 billion GVA to the Australian economy
and supported 15,141 construction jobs in FY24.
Delivering FY24 Leading Cities commitments
Our commitments indicate how we will deliver on our value creation outcome of Leading Cities.
Achieved
Not achieved
Progressed
Dexus 2024 Annual Report
40
Delivering city-shaping
projects and well-connected
logistic hubs
Our $16.1 billion platform real estate
development pipeline includes
iconic, irreplaceable towers and
mixed-use precincts in premium
locations in Australian CBDs and
strategically located logistics hubs
that service our customers across
their national footprint.
Many of our projects are being
undertaken in partnership with funds
management capital partners, who
along with our customers, have an
increasing focus on the sustainability
performance of the projects, both
during construction through to the
built form.
Beyond the major CBD precincts,
our strategically located
industrial developments delivered
158,300 square metres of gross
lettable area during the year in
partnership with our funds.
Across the development pipeline, our
ambition is to develop assets that are
fit-for-purpose, high-performing spaces
that support customer prosperity,
enhanced communities and are resilient
to the impacts of climate change.
Our new Sustainable Development
Standards provide a framework
to guide project teams on our
sustainability ambitions across key
ESG themes and principles. These new
standards set the foundation for future
Dexus developments through enhanced
focus on the issues that create positive
impact and value for Dexus and
our stakeholders.
Collaborating with
city partners
We work alongside industry partners
and city stakeholders to evolve the
experience and economies of our CBDs
around Australia by creating vibrant
destinations where people come
together to socialise and collaborate.
Across the year we celebrated our cities
and communities through activations
that supported festivals and events
such as Pride events, Vivid Sydney
and Lunar New Year.
41
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Overview
41
Leading cities continued
Office
The Dexus platform’s
$20.3 billion high‑quality
office portfolio is located
across Australasia’s
major CBDs.
The properties in the platform’s office
portfolio are predominantly located in
the core of Australia’s gateway cities
and include some of the country’s
most iconic buildings. These assets
are held for the long term and leased
to generate resilient income streams
through property cycles.
As an active manager, Dexus is deeply
committed to working with customers to
deliver spaces that engage and inspire,
offering destinations that support
their prosperity. Investing alongside
third‑party capital in the acquisition
and development of city-shaping office
buildings enhances the quality and
value of the Dexus portfolio and those
of its third party capital partners.
One Farrer Place, Sydney
After 30 years, One Farrer Place
remains one of Australia’s most
sought-after buildings. Managed by
Dexus on behalf of co-owners Dexus
(50%) and Australian Prime Property
Fund Commercial (50%), One Farrer
Place continues to attract and retain
Australia’s top-end law firms and
investment banks, including King &
Wood Mallesons (KWM) and Goldman
Sachs, as one of Sydney’s Premium
Grade office buildings.
Located in the core of Sydney’s legal
and financial district, the Governor
Phillip and Governor Macquarie Tower
Complex incorporates 85,000 square
metres of office space across two
towers. An expansive light-filled lobby
unites the two landmark towers and
connects to Raphael Lane, offering a
variety of dining options.
One Farrer’s timeless design celebrates
the historic importance of the site
as the first Government House and
has benefited from ongoing capital
investment to continue the architectural
focus on providing spaces that promote
productivity and collaboration.
In FY23, Dexus renewed KWM for a
further 10 years across 10,500 square
metres, representing the same footprint
as their previous lease. KWM is one
of the building’s original customers,
demonstrating One Farrer’s ongoing
appeal as one of Sydney’s buildings
of choice.
Dexus 2024 Annual Report
42
$20.3bn
Platform office funds
under management
54
Office properties
1.8m sqm
Office space
Waterfront Brisbane
Waterfront Brisbane is a major
city‑shaping project that is
transforming the Eagle Street Pier
and Waterfront Place precinct site to
create a global-standard business
and tourist destination. The $2.5 billion
transformational project aims to
maximise its prime riverside location
through the delivery of two Premium
office towers, expanded public space,
a premier waterfront dining hub and
widening of the riverwalk.
The project team has pioneered
new ways to deliver sustainability
outcomes, embracing circular economy
principles throughout the construction
of the project. To date, the project has
diverted circa 98% or 29,300 tonnes
of deconstruction waste from landfill
through recovery and recycling.
Top Tier law firms, DLA Piper and Allens,
join Deloitte, Minter Ellison, Gadens
and Colliers in the North Tower, with
52% of the tower now committed,
four years ahead of the project’s
scheduled completion in 2028.
Waterfront Brisbane is aiming to
achieve a 6 Star Green Star Design &
As Built, 5.5 star NABERS Energy, 4.5 star
NABERS Water, 4 star NABERS Waste
ratings, WELL Platinum Certification and
Climate Active Carbon Neutral Building.
Waterfront Brisbane is owned by
Dexus (50%) and Dexus Wholesale
Property Fund (50%).
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Overview
Leading cities continued
Industrial
Dexus is one of the largest
industrial managers in
Australia, owning and
managing a $10.6 billion
premium industrial portfolio.
The portfolio is located in key logistics
growth corridors across Australia across
4.0 million square metres of premium
warehouse and logistics space.
The Dexus platform’s industrial portfolio
is strategically located in highly
accessible markets, servicing the strong
customer preference to be located in
well-connected logistics hubs.
Industrial projects prioritise sustainability
and efficiency, with the designs
incorporating flexibility and leveraging
advanced data analytics to meet
customer preferences for sustainable,
efficient space. To support customers’
sustainability journeys, the designs
include battery infrastructure linked to
rooftop solar panels aimed at helping
customers meet their energy efficiency
and carbon emission targets.
ASCEND Industrial Estate
at Jandakot Airport, Perth
ASCEND at Jandakot Airport is one of
Perth’s most well-connected industrial
estates. Part of the Jandakot Airport
precinct, the estate spans 620 hectares
and comprises 55 properties and circa
56 hectares of developable land.
On completion, the remaining
development of ASCEND Industrial
Estate will deliver 263,000 square
metres of premium industrial space.
The estate’s location appeals to
both first mile and last mile industrial
customers due to its proximity to major
road networks and Fremantle Port.
The estate has attracted customers
including Amazon, HelloFresh and
Marley Spoon, supporting them to
grow their national footprint.
As the precinct evolves, customers
continue to benefit from a focus on
energy efficiency, underpinned by Green
Star and carbon neutral principles.
ASCEND at Jandakot Airport is owned
by Dexus (33.4%), Dexus Industria REIT
(33.3%) and Cbus Super (33.3%).
Dexus 2024 Annual Report
44
$10.6bn
Platform industrial funds
under management
210
Industrial properties
4.0m sqm
Industrial space
Circuit.7 at Glendenning,
Sydney
Circuit.7 is a Prime grade industrial
development strategically located
in north-western Sydney, owned by
Dexus Wholesale Property Fund (DWPF).
The site is highly attractive to customers
due to its access to the M7 Motorway
and Power Street and the low supply
of logistics space in the area.
Acquired in 2021, Dexus designed
the estate as a versatile speculative
development with a range of
configurations aimed at attracting
a diverse customer base. The site
comprises eight warehouse and office
units across 27,000 square metres of
premium space.
The estate has attracted strong
demand and achieved higher than
market rents. Practical completion
was achieved in March 2024 with the
estate 100% leased, delivering an
outstanding outcome for DWPF.
45
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Governance
Performance
Approach
Overview
Leading cities continued
Retail
Dexus manages interests
in a diverse retail portfolio
of 23 shopping centres
across Australasia that are
strategically located to take
advantage of population
growth and supporting
infrastructure.
City retail destinations support the
customers in the office portfolio.
In addition, our convenience retail
portfolio includes 100 service stations
incorporating retail.
Dexus utilises its transactions,
development and asset management
capability to deliver thriving
community hubs that drive social
and economic value.
A decentralised retail management
model empowers shopping centres
on the platform to evolve destinations
unique to their communities, providing
engaging experiences for visitors to
the centres.
In the CBDs, Dexus leverages
placemaking expertise to create
vibrant city retail precincts, providing
world class dining, beverage
and entertainment destinations.
These offerings, combined with
customer activations, enhance the
experience for office communities,
residents and CBD visitors.
Indooroopilly Shopping
Centre, Indooroopilly
Indooroopilly Shopping Centre is a
major regional shopping centre situated
in the western suburbs of Brisbane,
providing retail and entertainment
across 117,000 square metres. The
centre is home to more than 240
specialty stores, major retailers and
premium dining outlets, including
David Jones, Myer, Kmart, ALDI, Target,
Coles, Woolworths and Event Cinemas.
The centre features Australia’s first
automall shopping precinct, a
2,400 square metre car experience
destination featuring eight car brands,
servicing and maintenance retail space.
The centre’s management team
provides engaging community
activations to connect the shopping
centre community. Over the year,
the team delivered 55 activations,
including Project Reloved, a unique
activation which sold clothing donated
by Brisbane fashion influencers and
the local community. The proceeds
of the sales were donated to Serving
Our People, a charity that supports
people in need by ‘delivering anything
to anyone in need’. In FY24, more than
12 million people visited the centre.
Indooroopilly is owned by Dexus
Shopping Centre Fund (25%) and
Dexus Wholesale Property Fund (25%).
Dexus 2024 Annual Report
46
$9.2bn
Retail funds under
management
123
Retail properties
1.5m sqm
Retail space
QV, Melbourne
QV Melbourne is a leading shopping
precinct in the heart of Melbourne’s
CBD located at 180–222 Lonsdale
Street. The precinct offers the
quintessential city shopping experience
through a series of interconnected
laneways housing premium fashion,
beauty and lifestyle brands, lively dining
options, unique entertainment options
and convenient CBD parking.
QV Melbourne is a one-stop destination
for CBD office workers, tourists and
Melbourne’s residents. The centre spans
47,000 square metres of prime retail
space, anchored by national retail
chains including Woolworths, Big W,
Dan Murphy’s, Harvey Norman and
Officeworks, and offers entertainment
including ten-pin bowling and karaoke.
In FY24, QV attracted more than
2.1 million visitors to the centre with
custom activations during Melbourne
Fashion Week and Lunar New Year
helping to drive visitation.
QV Melbourne is owned by Dexus
(25%), Dexus Office Partner (25%) and
Victoria Square (50%).
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Leading cities continued
Royal Adelaide Hospital,
South Australia
Royal Adelaide Hospital is one of
the most advanced and sustainable
medical facilities in the world, featuring
40 operating theatres, 800 beds,
treating 85,000 inpatients and
600,000 outpatients each year.
Clinical Services at the hospital are
provided by SA Health, and the hospital
combines clinical services, training and
research facilities to deliver high quality
and complex patient care.
The investment provides exposure
to a premium healthcare asset with
reliable income backed by the South
Australian Government delivered as
a 35-year Public Private Partnership.
The Dexus platform owns 73% of Celsus,
the consortium that manages and
maintains the Royal Adelaide Hospital.
With its majority ownership stake,
Dexus portfolio managers actively
support the management team
leveraging platform expertise
across asset management, financial
services and other core property
services to improve operational
and financial outcomes.
Healthcare
Dexus partners with leading
Australian healthcare
providers to provide
end‑to-end financial and
operational solutions for
private hospital partners and
government through sale
and leasebacks and precinct
development services.
The platform’s portfolio of high-quality
healthcare assets is helping to meet
the demand of a growing and ageing
population and contributing to the
long-term viability of the Australian
healthcare sector.
$1.8bn
Healthcare funds
under management
11
Healthcare properties
0.1m sqm
Healthcare space
Dexus 2024 Annual Report
48
Health
Royal Adelaide Hospital
Royal North Shore Hospital
Victorian Comprehensive
Cancer Centre
Opal Health Care
Transport
Melbourne Airport
Port Hedland
International Airport
Reliance Rail
Launceston Airport
Energy
Powerco New Zealand
Macarthur Wind Farm
Social/Living
Optus Stadium
NSW Schools, SA Schools,
SEQ Schools, VIC Schools
ANU Student
Accommodation
University of Melbourne
Student Accommodation
Sydney University Village
Victorian Desalination Plant
The Dexus Platform’s infrastructure portfolio supports communities to thrive and is
focused around the four pillars of health, transport, energy and social.
Infrastructure
Dexus is uniquely positioned
as a leading Australasian real
estate enabled infrastructure
partner. The platform’s owned
and managed infrastructure
portfolio investments
underpin the fabric of society
through their contribution to
sustainable economic growth.
The Dexus platform infrastructure
portfolio includes 27 world class
assets across every state and
territory in Australia and New Zealand.
Its infrastructure assets are real,
tangible and deliver essential services
to our communities, including hospitals,
airports, rail, energy providers, university
accommodation and schools.
$10.9bn
Platform infrastructure
funds under
management
27
Infrastructure
investments
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Governance
Performance
Approach
Overview
Leading cities continued
Infrastructure continued
Melbourne Airport
Melbourne Airport has one of the
world’s largest airport land holdings
across a 2,741-hectare site, servicing
more than 35 million passengers
annually. Its commercial revenues
are derived from a range of aviation
ground transport, retail and other
property activities.
In FY24, the airport achieved several
milestones, including being named
the Best Airport in Australia and the
Pacific at the 2024 Skytrax World
Airport Awards, setting new records
across international passenger
numbers and export freight volumes
and opening a new $20 million dining
precinct inside Terminal 1.
Dexus manages the largest combined
shareholding in Melbourne Airport
on behalf of its clients and is working
closely with other shareholders and
the management team to unlock
the economic potential of the asset.
This work is focused on delivering a
step change in growth at the airport,
including a third runway, as well as
aeronautical negotiations and funding
strategy, in addition to leveraging the
property adjacent.
Dexus 2024 Annual Report
50
University of Melbourne
The Dexus platform owns and manages
a large portfolio of on-campus student
accommodation with more than 7,000
beds across three out of the top four
Australian universities.
At the University of Melbourne, Dexus
has a 40+ year concession across three
purpose-built student accommodation
(PBSA) residences, offering 1,481 beds to
both domestic and international students.
On campus accommodation continues
to be the preferred accommodation
option for out-of-area students
who benefit from on-site student
welfare support, social engagement
opportunities and security services.
For the universities, partnering with
Dexus delivers modern, integrated and
secure facilities while freeing up capital
to fund other facilities on campus,
academic and research programs and
support the growth of the campuses.
Dexus’s capability in this sector provides
insight to the emerging trends which
are used to improve the experience
for students and inform the capital
strategy for investors.
In FY24, the student accommodation
facilities on the Dexus platform enjoyed
96% occupancy and 58% of students
reapplied from the prior year, a key
indicator of student satisfaction (noting
an industry benchmark of 40%).
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Performance
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Overview
Thriving people
How we are
creating
Thriving
people
We believe our organisational performance
is intrinsically linked to our ability to leverage
the diverse thinking, expertise, experience and
leadership strengths of our people.
61%
Employee
Engagement
98.8%
Safety audit
score across
Dexus workspaces
972
Dexus employees
34.2%
Female representation
in senior management
and executive roles
Dexus 2024 Annual Report
52
Board focus
The knowledge and
expertise of our people
is central to creating value
and successfully delivering
our strategy
Our people are central to implementing
our approach to sustainability 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.
Realising the potential of
an integrated workforce
We recognise that to deliver our
strategic aspirations and optimise
performance, we need scalable and
consistent people practices. Following
completion of the acquisition of
AMP Capital, our focus has been on
harmonising our people practices and
strengthening our core foundations.
In March 2024 we introduced a new
workforce architecture which provides
us with a consistent way to measure the
size, shape and complexity of all the
roles in Dexus.
The structure and standardised role
titles help us maintain consistency
in the way we attract, retain and
reward our employees.
Throughout the year we held a series
of spotlight sessions to embed these
people changes. The sessions were
held for our people leaders and more
widely for all our employees to raise
awareness and improve people’s
understanding of the changes and
their benefits. This was an important
milestone of the integration, as it
signified to our people that we were
moving forward as one organisation.
Evolving our culture
We are a passionate team who strive
to make a difference. Our culture is an
important driver of delivering investment
performance and is underpinned by our
purpose and values.
Our purpose Unlock Potential, Create
Tomorrow captures our unique ability
to expand on what is possible and use
the potential to deliver long‑term value
for our people, customers, investors
and communities.
Our culture is what makes Dexus
capable of realising our purpose. It
guides our behaviours, interactions and
decisions, setting us apart in a dynamic
and competitive landscape. Our culture
is guided by our values Rally to achieve
together and Build trust through action.
Our purpose and values were launched
a year ago representing our evolved
culture, and our focus has been on
embedding this culture. A variety of
channels and initiatives have been used
to do this including all employee forums,
Executive leader updates, in person
events, and a gamification app –
Culture Unlocked. The app was a highly
successful initiative that engaged our
people in an interactive way on our
values and culture, while providing
access to learning, leadership and
wellbeing resources.
We also refreshed our Quarterly
Employee Awards format to introduce
values awards, giving people an
opportunity to recognise their peers
for living our values.
In FY25 we will further embed our culture
into our ways of working and foster
connections with our people.
In FY24, the Board and Board People and Remuneration Committee were involved in:
– Overseeing the finalisation of the
AMP Capital integration process
– Providing input into our new
organisational purpose and values
– Monitoring the organisational
culture and engagement metrics
– Endorsing the Dexus psychosocial
risk action plan
For further details on the Board People and Remuneration Committee’s key
focus areas relating to Director and Executive remuneration during FY24, refer
to the Remuneration Report starting on page 90 and to the 2024 Corporate
Governance Statement available at www.dexus.com.
Our values
Rally to achieve together
Build trust through action
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Governance
Performance
Approach
Overview
Thriving people continued
FY24 commitment
Status
FY24 progress
Continued commitment to gender equity and progress
against our gender diversity targets including to
achievement of gender balance (40:40:20) in senior
management and executive roles by FY25.
Female representation across senior
management and executive roles was 34.2%
at 30 June 2024. We remain committed to
our target and are reviewing our approach to
achieving meaningful long‑term change.
Focus areas
Embed the new values and behaviours into business
operations and ways of working.
Launched a new Dexus purpose and values following
consultation with the Board and a diverse range of
employee groups. Commenced embedding our culture
in an interactive way with our people.
Enhancing our approach to employee wellbeing,
including education and benefits.
Conducted an external review of wellbeing practices
and psychosocial risk and embarked on an action plan
endorsed by the Board and Executive Committee.
Delivering FY24 Thriving People commitments
Fostering an
engaged workforce
An engaged workforce is central
to achieving a cohesive culture.
We listen to our people and curate
inspiring workspaces and experiences
to motivate them to deliver on our
purpose and business strategy.
Engagement surveys give our people
the opportunity to provide feedback on
their Dexus experience. These surveys
are an important feedback channel
that we employ to help us identify
areas where we excel, as well as areas
where we need to improve. They are
used to inform our people strategy
and initiatives.
In FY23, our two engagement surveys
were conducted before and around the
time of the first completion of the AMP
Capital acquisition. The overall average
engagement score of 70% only reflects
the heritage Dexus employee cohort, as
it was too early for many transitioning
AMP Capital employees to comment
on their overall employee experience
at Dexus.
In FY24, the surveys captured the
employee engagement for our
integrated workforce. The average
overall engagement score of 61%
is reflective of an environment of
significant change. The AMP Capital
acquisition required significant effort
from our people during the year. We
thank our employees for their continued
commitment and engagement in
the organisation.
Achieved
Not achieved
Progressed
Dexus 2024 Annual Report
54
We achieved our highest ever
engagement survey response rate of
90%, indicating the strong desire of
our people to have their voices heard.
Our focus for FY25 will be to use
the feedback and insights from our
engagement surveys to inform further
coordinated action through strategic
people initiatives. This includes
embedding our values and continuing
to actively support internal career
planning, development and learning
opportunities for our people.
Ensuring the safety and
wellbeing of our people
The management of employee
wellbeing is critical to fostering a safe,
healthy and productive workforce.
In FY24, proactive steps were taken
to address Respect@Work legislative
change. We also engaged external
consultants to undertake a detailed
review of our psychosocial risk and
employee practices, with feedback
sourced through a whole of workforce
survey, interviews and focus groups.
The review identified positive practices
regarding our approach to bullying
and harassment. It also identified
opportunities to enhance our approach
to managing workloads, improve the
employee experience and expand
the ways we connect with each other.
Our focus for FY25 will be to further
embed practices and ensure consistent
employee experiences across the
organisation.
We continued to track our progress
on wellbeing through our employee
engagement survey. Manager support
remains strong, with 88% of our people
feeling their manager genuinely cares
about their wellbeing (May 2024), an
increase of 7% from FY23.
Our quarterly Employee Awards
celebrate safe work practices and
this year we expanded the scope of
the awards to also include Wellbeing.
An example of this recognition is the
award presented to a member of
our industrial team who facilitated
a partnership with Healthy Heads in
Trucks & Sheds to deliver a mental
health awareness session and
morning tea with customers at our
industrial estate at Ravenhall, Victoria.
See page 60 to read more about this
community initiative.
In recognition of World Mental Health
Day, we hosted an employee event with
eco-psychologist Mark Mathieson, who
explored the relationship between our
environments, our bodies and mental
health. For R U OK Day?, we facilitated
Executive and Director roundtable
sessions for our people.
We continue to partner with suppliers
and industry associations to upskill
our people and share resources
across key topics relating to health,
safety and wellbeing. For National
Safe Work month, our focus was
“For everyone’s safety, work safely”,
which encouraged individuals to
prioritise safety in the workplace
because all workers have the right to
be safe at work. We held a roadshow
which included training webinars and
a guest speaker promoting a safe
and healthy workplace.
Work, Health, Safety & Environment
training programs were delivered across
all business areas, ensuring our people
remain equipped with the necessary
knowledge and skills to maintain safety
and wellbeing in their workplace. Our
comprehensive workplace health and
safety program was also re-certified
this year under ISO 45001:2018,
confirming our continued and
comprehensive monitoring of health
and safety for our employees and
workplaces.
Supporting our employees
with robust working
arrangements
Flexibility at Dexus provides every
employee with the opportunity to have
a say in when, how, or where their work
is performed. Dexus supports and
encourages flexible work practices
to increase personal wellbeing and
employee engagement, improve
team performance and motivation,
maximise productivity, retain talent,
and encourage an organisational
culture of diversity and inclusion. As
at 30 June 2024, 79% of our people
were using informal flexible and hybrid
work practices. Our engagement
survey results also reported 78% of
employees have found effective
ways to collaborate as a team while
working flexibly.
We continue to support our employees
with caring responsibilities. Nearly 50%
of our people are parents or guardians
of a child aged between 0–17, or act
as a carer for someone. Our parental
leave policy entitlements support
families by providing inclusive parental
leave assistance for employees. As at
30 June 2024, 77% of our people believe
our leave arrangements are sufficient
and flexible to enable the handling
of important caring responsibilities,
and 79% of our people said their
manager supports a combination
of work and care.
Building strength and
resilience through inclusion
We support an inclusive and diverse
workforce that reflects our customers
and communities. Monitoring diversity
is an important step in supporting
an inclusive workplace by providing
insights into progress and areas for
improvement. During the year we
continued to monitor factors such as
cultural background, country of origin,
sexual orientation, gender identity and
age. We also supported initiatives that
celebrate inclusive practices.
Gender diversity
Dexus is committed to gender equality
and creating meaningful long-term
change in gender representation at
all levels and across all areas of our
business, accelerating our pipeline
of talent and closing the pay gap.
Wellbeing was a central focus
for our people in FY24. We
engaged external consultants
to undertake a detailed review
of our psychosocial risk and
employee practices.
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Governance
Performance
Approach
Overview
Thriving people continued
Diversity representation targets are
approved by the Board and progress
is reported to the Board People and
Remuneration Committee and Executive
Committee. Our Board gender diversity
target is at least 33% of non-executive
directorships held by women by
30 June 2025. For the organisation, our
target is 40:40:20 (40% male, 40% female,
20% any gender) for senior management
and executive roles for the same period.
As at 30 June 2024, women represented
57% of Non‑Executive Directors and
34.2% of senior management and
executive roles.
In February 2024, the Workplace Gender
Equality Agency (WGEA) published
the gender pay gaps for private
sector Australian organisations with
100 or more employees. This is the first
time this data was officially released
and seeks to improve transparency,
accountability and motivate action to
accelerate progress on gender equality
in workplaces. The Dexus median total
remuneration pay gap was 29.3% and
median base remuneration pay gap
was 26.4%. Given the acquisition of
the AMP Capital platform during the
WGEA reporting period (1 April 2022
– 31 March 2023), the Dexus results
published this year include a combination
of data for both organisations.
Internal analysis continues to
demonstrate our pay practices are
equitable, irrespective of gender. Our
results show we have an opportunity to
further increase female representation
(especially in more senior and revenue-
generating roles) across our business;
an opportunity that also applies to our
peers across the sector.
We remain committed to both
achieving our gender representation
targets and reducing the gender pay
gap. Achieving meaningful long-term
change requires a multi-faceted
approach and we now have a deeper
understanding of our employee’s
perspectives on gender and inclusion.
In June 2024, we surveyed our people,
inviting ideas on how we can improve
our approach. In FY25 we will use this
data and CEO hosted round table
discussions to review our current people
practices and make changes as
required.
We will also be reviewing our gender
representation targets during the
year with a view of creating alignment
across our workforce cohorts, including
non‑executive directors.
Property Champions of
Change Coalition
Dexus is a member of the Property
Champions of Change Coalition,
and our new CEO Ross Du Vernet
has joined the member community.
The Coalition’s current focus is on
collectively driving gender equality
in the property industry by sharing
learnings and implementing initiatives
to increase the number of women
in leadership roles and to close the
gender pay gap.
As part of the Coalition, Dexus is
piloting the gender equality dashboard,
designed to track and report on key
drivers of the gender pay gap.
Dexus Director Rhoda Phillippo
participated in an all-employee
webinar on International Women’s
Day, where she shared her career
experiences through an interactive
session. This event was one of two
events we held to educate our people
on personal biases in the workplace.
Supporting next generation careers
We are committed to supporting
initiatives that foster and create
pathways for the next generation of
female talent into the property industry.
During the year, Dexus hosted the Girls
in Property initiative in partnership
with the Property Council of Australia
at our Sydney headquarters at Quay
Quarter Tower.
The purpose of this initiative is to
raise awareness of the career paths
available in the property industry and
to encourage a more diverse pipeline
of talent into the sector.
Our long-standing Future Leaders
in Property (FLIP) program continues
to provide high school girls with
exposure to the property industry
to encourage subject selection
and education pathways.
Based on the concept ‘if she can see
it, she can be it’, FLIP provides students
with a unique opportunity to hear from
female leaders involved in Dexus assets
and development projects and to
learn about the broad range of career
paths available in property. This year
we hosted sessions in Sydney and
Brisbane which included an asset tour,
a panel session and a presentation
on construction methodology.
The students gain insight into the full
spectrum of property business activities,
including asset management, facilities
management, leasing, marketing,
development, and construction.
Further details are available at
www.dexus.com/casestudies.
LGBTQ+
In recognition of our commitment and
progress of LGBTQ+ inclusion, Dexus
was awarded Silver Employer by Pride in
Diversity’s Australian Workplace Equality
Index. Led by our LGBTQ+ employee
network TRIBE, we continued to raise
awareness, educate and celebrate
LGBTQ+ inclusion across our workforce
and customer community.
We embed and promote LBGTQ+
inclusion both internally and externally
through employee and customer events
and advising on initiatives across our
developments and assets, including
all gender bathrooms. Throughout the
year, TRIBE hosted internal events to
educate and build awareness around
LGBTQ+ inclusion such as Mardi Gras
and Wear it Purple Day. Our office
property team facilitates customer
initiatives including lobby activations,
lighting up our buildings on inclusion
days of significance and rainbow stairs.
In FY24, we introduced Gender
Affirmation guidelines and resources
for our employees. We continue
to focus on training or people
managers, our People and Culture
team, and all employees to build
awareness of LGBTQ+ and support an
inclusive culture.
Dexus is also a member of external
industry bodies Pride in Diversity
and Building Pride. Our TRIBE network
and allies, actively support and
participate in industry and community
events including the Pride in Practice
Conference, Midsumma, and
Pride in Property events.
Dexus 2024 Annual Report
56
FY25 commitments
Continued commitment to
gender equity and our gender
diversity targets including the
achievement of gender balance
(40:40:20) in senior management
and executive roles by FY25.
Focus areas
Enhance our approach to
employee wellbeing and
psychosocial risk.
Refine our approach to inclusion
and diversity.
Working with Aboriginal and
Torres Strait Islander peoples
The Dexus Reconciliation Action Plan
(RAP) reinforces our commitment to
promoting acknowledgement, respect
and reconciliation with Australia’s First
Nations peoples. The RAP is endorsed
by Reconciliation Australia and
marks an important early step in our
reconciliation journey. The Dexus RAP
was updated this year to align with our
new purpose, values, and priority areas
of impact.
Cultural awareness training was
designed in partnership with PwC
Indigenous Consulting, with 88% of
employees participating in the training
as at 30 June 2024.
The referendum to decide whether to
enact an Aboriginal and Torres Strait
Islander Voice to Parliament was a
prominent issue for all Australians
regardless of their background.
Acknowledging the importance of the
referendum, we supported our people
by providing access to information
and facilitating an all-employee
virtual webinar hosted by the Dexus
RAP Working Group, which provided a
platform for representatives from PwC
Indigenous Consulting to reflect on the
referendum and its potential impacts.
More information on our Reflect
Reconciliation Action Plan is publicly
available at www.dexus.com.
Investing in our people
We continue to support the
development of our people through
initiatives that empower them to thrive.
Lead @ Dexus is a program designed
to instil self‑awareness, motivate and
provide strategies to our people to
improve their leadership skills. In FY24,
we progressed our commitment to
roll out the program to all people
managers as well as new and
emerging leaders.
As at 30 June 2024, 67% of people
managers completed the first module
and 25% completed the second module.
As part of our Grow @ Dexus program,
all employees are provided with
inclusive development opportunities.
This year, we delivered a total of seven
sessions, each designed to enhance
awareness and understanding across
topics, including wellbeing, productivity
and ESG practices.
Our sessions included strategies for
energising the workday, the connection
between mental health and nature (as
explored by an eco-psychologist). We
partnered with Leaders for Good who
explored how different biases can be
recognised, understood and addressed
in the workplace.
Supporting our Sustainability Strategy,
we also hosted Ronni Khan, the
founder of OzHarvest, who shared
her story of creating community
impact while reducing food waste and
minimising the carbon footprint.
The inaugural Dexus Mentoring
Program launched this year, offering
development opportunities for our
people outside of formal training.
Sponsored by our Chief Financial
Officer, the program encourages
connection and provides individual
career guidance through pairing up
mentors with mentees across the
business. The 20 mentees participating
in the program dedicated time and
focus on self-improvement and their
career goals, while the 20 mentors
generously supported them with
their professional development.
Further details are available at
www.dexus.com/casestudies.
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Governance
Performance
Approach
Overview
Customer prosperity
How we are
creating
Customer
prosperity
We support the prosperity of our customers
by investing in, designing, developing and
managing real assets. Our products and
services prioritise occupant wellbeing and
drive sustainability performance.
+44
Customer Net
Promoter Score
6,854
Customers
5.2 stars
NABERS Indoor
Environment average
rating across our
platform’s office portfolio
Dexus 2024 Annual Report
58
Our assets, along with the
places we create in and
around them, can enhance
customer productivity and
promote wellbeing. Our focus
is on delivering exceptional
customer experiences,
unlocking potential to
create tomorrow.
Creating places and
experiences that benefit
our customers
We design and manage our assets
to enhance customer productivity
and satisfaction. We also prioritise
the wellbeing of individuals and
communities who interact with our
spaces – whether they are occupants
or visitors. Our workplaces foster
innovative ways of working, with
the potential to drive employee
engagement, productivity, talent
attraction and retention, and
are aligned with our customers’
own sustainability goals.
Supporting engaged customer
communities in our buildings
We survey our customers each year to
better understand their experiences at
our assets and their evolving business
needs. Our Customer Net Promoter
Score of +44 (out of a range between
–100 to +100) across our office, industrial
and health portfolios, indicates we are
effectively supporting and helping our
customers across our platform. Survey
feedback has identified thematics
such as climate, waste, mental health
and community partnerships as being
important to customers and our
engagement and communication on
these has been well received. We also
continue to see response times as a key
driver of successful collaboration.
More information on environmental
thematics can be found in the Climate
Action and Sustainability Foundations
sections and are considering the
inclusion of additional asset classes
in future.
Customer satisfaction,
wellbeing and productivity
Supporting customer wellbeing
and productivity with
healthy buildings
There is growing awareness of the
role of the built environment in
supporting people’s health and
safety. We measure the operational
performance of our assets via the
NABERS Indoor Environment rating
tool, a well‑established program
to benchmark indoor environment
quality across property portfolios.
Our platform office portfolio has a
weighted-average NABERS Indoor
Environment rating of 5.2 stars. Notable
highlights include 12 of our office assets
achieving a 6 star rating (market
leading performance), up from four
assets last year and 17 of our office
assets achieving a 5.5 star rating
(excellent performance, up from 11
last year).
This year we expanded our WELL
certification program, delivering
evidence-based health and wellbeing
outcomes to our customers through the
WELL Building Institute’s WELL at scale
offering. While WELL certification has
enabled us to define what healthier
buildings look like, WELL at scale
helps us leverage our approach to
customer health and wellbeing across
the platform by scaling certifications
across multiple assets.
Our initial focus is to maintain the
Health and Safety ratings across the
portfolio. All 36 office assets that we
submitted for a WELL Health and
Safety rating in 2023 maintained their
certification. An additional three assets
have been registered under the WELL
at scale program and will be certified
under WELL Health and Safety in the
coming year.
As well as achieving WELL ratings
in existing assets, WELL ratings are
integrated into our development
designs. Waterfront Brisbane and
Atlassian Central, Sydney are under
construction and committed to
delivering WELL certifications.
Board focus
In FY24 the Board and Board Sustainability Committee was involved in:
– Approving Customer Prosperity
as a priority area of the Dexus
Sustainability Strategy
– Overseeing the Customer Prosperity
roadmap, including the development
of flagship programs
– Reviewing and discussing the
annual customer survey results
and associated actions
– Reviewing customer complaints
– Overseeing targets to deliver a
Customer NPS of 40+ and a NABERS
Indoor Environment 5 star office
portfolio average rating by FY25
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Governance
Performance
Approach
Overview
Customer prosperity continued
Achieved
Not achieved
Progressed
FY24 commitment
Status
FY24 progress
Maintain a Customer Net Promoter Score for the
platform office, industrial and health portfolios at or
above +40.
Achieved a Customer Net Promoter Score for the
platform office, industrial and health portfolios of
+44, driven by a focus on customer experience
and engagement programs informed by the 2023
Customer Survey.
Through initiatives that enhance occupant health and
wellbeing, deliver an average 5 star NABERS Indoor
Environment rating across the platform’s office portfolio
by FY25.
On track to achieve FY25 target with 5.2 star portfolio
average NABERS Indoor Environment rating measured
across 91% of our office portfolio in FY24.
Continue to support customer wellbeing by delivering
initiatives such as a WELL health and safety portfolio
certification.
Maintained WELL Health & Safety rating across
36 Dexus owned and managed office assets. We
transitioned to the WELL at scale offering to aggregate
and centralise our delivery of health and wellbeing
initiatives and certifications across the platform.
Delivering FY24 Customer prosperity commitments
Leveraging scale to support
prosperity and mental wellbeing
We recognise the importance of mental
health and the prevalence of mental
health challenges in the workplace,
both for our customers and employees.
We continued our partnership with
Black Dog Institute, Australia’s only
medical research institute that studies
mental health across the lifespan,
with the goal of creating a mentally
healthier world for everyone. Through
this partnership, we provide access
to mental health training to our office,
industrial and healthcare customers.
Four hundred training spaces were
offered to executive leaders, managers
and employees, with 110 customer
groups registering to participate in
the training across Sydney, Melbourne,
Brisbane and Perth, both in person
and online.
This year, we extended our mental
health and wellbeing program to
provide a sector-specific offering
at our industrial assets.
We partnered with Healthy Heads in
Trucks & Sheds (HHTS), a mental health
and wellbeing organisation focused
on prevention and understanding
of mental health issues in the road
transportation and logistics industries.
We partnered with HHTS to offer
our industrial customers access to
mental health resources, including the
Healthy Heads App offering fitness
content, resilience resources and links
for crisis support.
We also hosted a HHTS roadshow at
Dexus Industrial Estate in Truganina,
Victoria, with the aim of fostering
connections and reducing the stigma
of mental health. We partnered with
Coles to host this event at their site and
invited other local customers to attend.
We also partnered with Mates in
Construction to support the health
and wellbeing of our delivery partners’
employees. Mates in Construction
brings together Australia’s building
and construction industry to raise
awareness and funds for suicide
prevention and we have mandated
Mates in Construction resources
across our industrial developments.
Further details are available at
www.dexus.com/casestudies.
Partnerships for recycling success
Waste management is increasingly
important to our customers, and as
a property manager, we have the
capability to influence our customers’
waste management practices.
By introducing circular economy
principles across our assets, we
can significantly reduce the levels
of waste generated across our
portfolio. More information on our
approach to broader circularity and
waste management is included in
Sustainability Foundations.
We continued our partnership with
Planet Ark, offering our customers
programs that support their recycling
initiatives. Batteries 4 Planet Ark
safely collects and recycles batteries,
and Business Recycling Planet Ark
provides an online resource for
workplaces looking to reduce their
waste to landfill. In addition, we offer
customised Planet Ark activations to
improve waste diversion rates, such
as waste sorting competitions, online
trivia competitions, and recycling and
sustainable art displays.
We also partner with Planet Ark to
celebrate our customers’ anniversary
in their Dexus building, gifting a
donation to Planet Ark’s Seedling Bank.
This initiative supports community
groups to restore their natural
landscape, and over the past three
years, our contribution has planted
over 14,500 trees, shrubs and grasses
in communities around Australia.
Dexus 2024 Annual Report
60
Customer experience uplift
through scaled service delivery
We appointed a new concierge and
customer experience services delivery
partner supporting 37 of our office
assets. This collaboration brings
consistency to the service we provide
to our office customers as we continue
to engage and celebrate our building
communities.
As well as offering fitness classes
and lobby activations, we have
celebrated diversity with our customers
throughout the year with activations
including Lunar New Year celebrations
showcasing dragon dancers and lucky
gold envelopes and Mardi Gras where
many of our NSW office assets featured
rainbow signage and celebrations.
Supporting our customers on
their sustainability journey
Increasing renewable
energy uptake
We acknowledge the role we play in
decarbonising our value chain and
continue to support our customers to
increase their renewable energy uptake.
As customers increasingly set their own
decarbonisation goals, we have seen
the addition of new members to our
GreenPower Buyers Group program.
We initiated the group in 2021 to help
our customers overcome the challenges
of decarbonising their energy supply
and to lower costs by working together
to collectively purchase renewable
electricity. Leveraging our scale,
customers receive electricity via our
embedded networks and purchase
renewable electricity in the form of
accredited GreenPower.
Members have now collectively
purchased over 3,300 megawatt‑hours
of renewable electricity and avoided
over 2,200 tonnes of greenhouse gas
emissions since the program’s inception.
Future workspaces
Traditional fitouts can account
for up to 40% of a building’s life
cycle carbon emissions, and are
therefore a significant contributor to
environmental impact. We are looking
‘beyond the base build’ to support our
customers in creating and delivering
the next generation of sustainable
workplace fitouts.
We have developed Greenkey® Fitout
Requirements to help our customers
reduce upfront carbon emissions,
minimise waste, design for longevity,
procure responsibly and use materials
that promote a healthy workplace.
This initiative has been designed to
attach to a fitout brief and integrate
with the workplace design, significantly
reducing the time and cost required to
build in best practice.
The Waterfront Brisbane project is
leading the Greenkey® Fitout initiative,
championing a market‑differentiating
platform that customers can leverage
to contribute to their corporate
sustainability performance and
employee wellbeing. This project
will create a new standard for Dexus
leases that can be scaled across
our portfolio, further increasing
collaboration with customers on
creating a more sustainable tomorrow.
FY25 commitments
Maintain a Customer Net
Promoter Score for the platform
office, industrial and health
portfolios at or above +40.
Deliver on our FY21 target to
achieve an average 5 star NABERS
Indoor Environment rating across
the platform office portfolio by FY25
through initiatives that enhance
occupant health and wellbeing.
Focus areas
Greenkey® customer program
expanded to more parts of
the platform.
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Governance
Performance
Approach
Overview
Climate action
How we are
delivering
on Climate
action
We focus on climate action to accelerate the
transition to a decarbonised economy, while
also safeguarding and advancing our people,
assets and financial returns.
Maintained
Net zero across scope 1 and
2 (and operational scope 3)
emissions across managed
portfolio1
4.9 stars
NABERS Energy average
rating across our
platform office portfolio
4.2 stars
NABERS Water average
rating across our
platform office portfolio
3.5 stars
NABERS Waste average
rating across our
platform office portfolio
Dexus 2024 Annual Report
62
Climate-related risks
and opportunities
Climate-related issues present
risks and opportunities across our
operations, along with potential
strategic opportunities.
Being a leading Australasian real asset
group requires us to understand how
both the physical and transitional risks
of climate change will impact our ability
to create and maintain value.
Prioritising Climate Action positions us to
proactively respond to climate‑related
risks and opportunities and broadly
aligns with the requirements of the
draft Australian Sustainability Reporting
Standards (ASRS).
Dexus welcomes increased transparency
around disclosing climate-related
information in accordance with the
new standards. This aligns with the
global shift towards sustainability
disclosure accelerated by the
launch of the International Financial
Reporting Standard (IFRS) Foundation’s
International Sustainability Standards
Board (ISSB).
Dexus anticipates it will be a
Group 1 entity and is well‑prepared
to respond to the enhanced
disclosure requirements based on our
existing reporting against the Task
Force on Climate‑related Financial
Disclosure (TCFD) recommendations
since 2018 and our comprehensive
reporting on greenhouse gas (GHG)
emissions. Further details are available
in our 2024 Management Approach
and Procedures and Sustainability
Data Pack.
Strategy
As one of our sustainability priority
areas, Climate Action recognises the
central role that real assets must play
in responding to climate change.
Our capacity to create value depends
on our ability to develop and manage
assets that are high performing, resilient
and have a positive impact on the
health of both people and the natural
environment.
Climate Action is focused on
three priorities:
– Decarbonisation: Continuing to
decarbonise our platform, including
our value chain and customers to
mitigate risk and preserve value
– Resilience and adaptation:
Increasing physical and financial
resilience against the impacts
of a changing climate
– Transition investment:
Capitalising on climate-related
opportunities and investments,
while supporting the
climate transition
These are supported by an ongoing
commitment to strong and transparent
governance and reporting around
our strategic goals, implementation
program and initiatives, and
performance against targets.
Our role in delivering these outcomes
is aligned to our ability to directly or
indirectly manage assets.
Managed portfolio: Climate action
activity is owned and driven by Dexus
where we have operational control of
an asset. It includes activity around
energy efficiency and electrification,
climate risk scenario analysis and
development of climate transition
investments.
Portfolio investments: Where
operational control sits with others,
such as customers and investment
partners, we do not directly implement
sustainability programs, but seek to
influence, work with and support the
entity that has operational control in
sustainability delivery. Examples include
programs to support our customers and
investment partners to decarbonise
and increase their climate resilience.
This year we made significant progress
against our FY25 metrics and targets
and anticipate delivering these in the
next 12 months.
Looking beyond FY25, we are exploring
the next phase of Climate Action and
in the next 12 months we will refresh our
Climate Transition Action Plan. This will
see us set new decarbonisation and
efficiency metrics and targets.
Board focus
In FY24, the Board and Board Sustainability Committee was involved in:
– Approving Climate Action as part of
the Dexus Sustainability Strategy
– Overseeing the Climate
Action roadmap, including
flagship programs
– Overseeing the maintenance of
Dexus’s net zero commitment and
transition to net zero emissions
– Overseeing the targets to deliver
10% reductions in energy and
water intensity across its platform
office portfolio by FY25 against a
2019 baseline
– Overseeing progress on Dexus’s
approach to climate resilience
1. In line with Climate Active Carbon Neutral Standard for Organisations, net emissions for
the year ended 30 June 2024 include offsets purchased and allocated for retirement
during the year and up to the date of this report.
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Governance
Performance
Approach
Overview
Climate action continued
FY24 commitment
Status
FY24 progress
Ongoing commitment to reduce energy intensity by
10% across the platform managed office portfolio by
FY25 against a 2019 baseline.
Office energy intensity remains steady at 10.0% below
the 2019 baseline as gains from energy efficiency
activities are balanced by increasing levels of physical
occupancy and influenced by changes to the portfolio
under management.
Ongoing commitment to reduce water intensity by 10%
across the platform managed office portfolio by FY25
against a 2019 baseline.
Office water intensity rose by 15.4% year-on-year
and remains 23.2% below the 2019 baseline as water
management savings are offset by higher levels of
physical occupancy and influenced by changes to the
portfolio under management.
Focus areas
Looking beyond net zero to amplify impact across our
value chain including our 1.5-degree decarbonisation
journey and 2030 goals.
Achieved and maintained net zero1 on scope 1 and 2
(and operational scope 3) emissions for our platform
managed portfolio since FY22. Our decarbonisation
initiatives continue as we amplify impact across our
value chain.
Having achieved 100% sourcing of electricity from
renewable sources in FY22, we aim to maintain this
to 2030 and beyond across the platform’s managed
portfolio as a RE100 signatory.
Maintained sourcing of 100% renewable electricity
purchasing for our platform managed portfolio and
advancing uptake of energy efficiency, electrification,
solar and battery storage.
Delivering FY24 Climate action commitments
Achieved
Not achieved
Progressed
Governance
We take a collaborative approach to managing
climate-related impacts across the platform’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.
Sustainability objectives are integrated
into all Dexus roles through inclusion
in the group scorecard. Sustainability
scorecard measures include
performance on key sustainability
benchmarks and embedding
sustainability and climate action into
fund investment plans and asset plans.
Key activities that supported these
outcomes in FY24 included maintaining
net zero1 across the management
portfolio and continued progress
against commitments to reduce energy
and water intensity by 10% and NABERS
Energy, Water and Waste portfolio
star ratings (see Metrics and Targets
on page 70).
More information on Dexus Platform’s
approach to managing the economic,
environmental and social impacts
related to its business can be found
in the 2024 Management Approach
and Procedures.
We obtain external assurance over selected sustainability performance data, with progress against environmental targets
and other climate metrics being disclosed in the 2024 Management Approach and Procedures and Sustainability Data Pack.
Climate Action governance framework
Our corporate governance framework supports a culture that prioritises sustainability
and addresses climate-related issues at board and management levels
Dexus Board
Oversees all strategic risks including climate change
Board Sustainability Committee
Oversees the platform’s approach to
addressing climate-related issues
Board Risk Committee
Oversees the platform enterprise risk
management practices and key risk register
Executive Committee (ExCo)
Has management oversight and accountability for Dexus’s climate strategy and delivery, and
the Chief Operating Officer is responsible for oversight of the platform’s Sustainability Strategy,
including Climate Action and sustainability reporting. Various ExCo members have accountability
for implementation of climate related matters relevant to their functional areas
Sustainability team
Oversees the platform’s management response and reporting, presenting regularly to the
ExCo and, on a quarterly basis, to the Board Sustainability Committee on the progress
against targets, and to the Board as key topics emerge
1. In line with Climate Active Carbon Neutral
Standard for Organisations, net emissions
for the year ended 30 June 2024 include
offsets purchased and allocated for
retirement during the year and up to the
date of this report.
Dexus 2024 Annual Report
64
Priority
Risk or opportunity
Driver and how
does this affect Dexus
How are we responding
Decarbonisation
Need to reduce GHG emissions to
zero to limit atmospheric carbon.
Increasing stakeholder expectations
and associated income benefits for
decarbonisation across the value
chain (upfront emissions, operational
efficiency and electrification) and
reduced reliance on offsets.
–
Net zero commitment
–
Energy, water, waste efficiency targets
and programs
–
Sourcing 100% electricity from
renewables
–
On-site solar program
–
Greenkey® program
–
Sustainable Development Standards
Opportunity to increase income and/
or occupancy by meeting customer
demands for high performing, carbon
neutral, resilient assets.
Opportunity to support customers’
own decarbonisation goals through
programs and support towards
renewable energy and reducing their
low upfront carbon impacts.
–
Industrial on-site solar
and battery program
–
GreenPower Buyers Group
Resilience and
adaptation
Direct risk to people and property
from the physical impacts of
climate change.
Ensuring that climate risks and
opportunities across our portfolio
are quantified to inform decision-
making to ensure increased physical
and financial resilience.
–
Environment and Sustainable
Procurement Policies
–
Embedding climate risk into
Environmental Management System
(ISO14001)
–
Portfolio and asset climate
risk assessment program
–
Periodic transition risk
and scenario analysis
Indirect risks such as economic,
regulatory or reputational to Dexus
and across its value chain through
climate change.
Transition
investment
Opportunity to invest in projects
and programs that support and
accelerate the transition to a low
carbon economy.
Leveraging real assets capability
to invest in climate transition
opportunities such as renewable
energy, distribution and carbon
credits via nature solutions.
–
Infrastructure renewable
energy investments
–
Supply chain partnerships
Governance
and reporting
Risk of inaction to changing physical,
economic or regulatory conditions.
Enabling effective oversight
and uplifting governance and
reporting in line with emerging
reporting standards.
–
Maintaining strong internal
governance and Board oversight
–
Setting continuous
improvement targets
–
Preparing for incoming ASRS
reporting requirements
–
Strong processes for
preparing market disclosures
–
Embedding alignment within Fund
Investment Plans and Asset Plans
–
Reporting in line with the
TCFD recommendations
Risk of over or under reporting of
environmental claims.
Opportunity to enhance transparency
about our climate issues and our
strategic response and progress on
programs and initiatives.
Within Dexus’s Risk Management Framework, climate is included as a key risk and the sustainability team is responsible
for regularly reviewing climate-related risks and opportunities through scenario analysis. The Property operations and
Development teams are responsible for applying the platform’s risk management framework and environmental management
system to appropriately manage and plan for property-related risks including climate change, with support from the risk and
sustainability teams.
More information on Dexus’s methodology for identifying and prioritising material risks can be found in the Materiality section
of the 2024 Annual Report and our approach to managing these risks can be found in the 2024 Management Approach
and Procedures.
Risks and opportunities
Effective management of climate-related risks and opportunities is guided by Dexus’s Sustainability Strategy
and Climate action priority area. This includes addressing the following key risks and opportunities.
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Directors’ report
Governance
Performance
Approach
Overview
Climate action continued
We continue to decarbonise our platform, including supporting our value chain to mitigate
risk and preserve value.
Repositioning assets and strategies
for energy efficiency and electrification
Targeted decarbonisation program
As we look beyond net zero, we are
driving the next phase of energy
efficiency and electrification through
a targeted decarbonisation program.
We completed decarbonisation
roadmap studies across 23 commercial
assets, which involved asset-level
desktop assessments and audits to
identify energy, water and electrification
opportunities. The roadmaps provide
commercially viable decarbonisation
solutions and include the quantification
of emissions savings, associated return
on investment and future alignment to
NABERS requirements. The results will be
used to understand opportunities and
challenges in expanding electrification
across our platform.
In the coming year, these studies will
support target setting and lifecycle
planning to deliver the best experience
for our customers, optimise energy
performance, reduce costs and
mitigate risks.
Optimising mechanical maintenance
Our continued investment in fault
detection analytics optimises building
operations on a daily basis. This
year we retendered for mechanical
maintenance services to embed
analytics and data driven maintenance.
The new services provide consistency
in approach across the office portfolio,
while delivering operational efficiencies
by eliminating unnecessary scheduled
maintenance activities and enabling
service technicians to focus on
data‑driven insights and actions.
This is supported by a new, centralised
approach to managing our critical
building operational datasets that
will be progressively rolled out in FY25.
Together, these solutions will standardise,
simplify and reduce the cost of bringing
together building metrics, as well as
positioning Dexus at the centre of our
building data ecosystem.
Powered by renewable electricity
Our commitment to procuring 100%
renewable electricity is supported
by our platform approach to energy
efficiency and decarbonisation
initiatives. Our actions to promote
a shift to renewable electricity are
creating demand beyond our own
needs through customer programs
including our GreenPower Buyers
Group and solar rollout. Our positive
action to create a demand base
that is supporting acceleration of the
renewable power industry is delivering
meaningful results.
Dexus is a signatory to RE100 and has
been purchasing renewable electricity
since 2008. We achieved, and have
since maintained, our target of sourcing
100% renewable electricity in FY24 for
our managed portfolio.
Sourcing of renewable energy through
a combination of on-site renewable
energy installations and purchasing
off‑site renewable electricity is
embedded as a standard within
our energy tendering process. Since
2021, we have partnered with energy
providers via long-term agreements
to implement supply-linked renewable
electricity contracts that leverage
procurement advantages from our
buying platform to deliver long-term,
viable and cost‑effective solutions.
Our procurement approach aims to
prioritise offtake based on geographic
location, pairing renewable generation
facilities across the locations were
we operate. We actively track our
voluntary renewable sourcing and can
provide transparency to our customers
on were buildings source electricity.
For our Australian locations, we receive
Large-scale Generation Certificates
(Renewable Energy Certificates
issued and verified by the Australian
Government’s Clean Energy Regulator)
that we retire against our assets on
a quarterly basis. For our managed
New Zealand locations, we procure
unbundled New Zealand Electricity
Certificates, an energy certificate
scheme in the voluntary market.
These are procured on an annual
basis and retired on our behalf.
For more information refer to the
2024 Sustainability Data Pack.
Cost-effective energy supply solutions
Across our industrial portfolio we are
supporting customers’ decarbonisation
goals by partnering to install renewable
energy generation infrastructure.
We expanded our rooftop solar
program with 1.26 MW of large-scale
solar PV installed in FY24 and approvals
are progressing on a further 2.46 MW
across our committed developments.
Our energy generation ambitions
are supported by a leading approach
to energy storage. In an industry first,
Dexus has embedded the installation
of commercial grade storage batteries
linked to rooftop solar panels as a
design standard in all new industrial
facilities.
The first tranche of battery infrastructure
linked to solar panels is scheduled
to be a part of Dexus’s upcoming
industrial projects at Horizon 3023, a
127-hectare master planned industrial
estate in Melbourne’s western growth
corridor, with the first battery build to be
completed by late 2024.
Dexus’s battery infrastructure initiative
forms part of our structured approach
to increasing energy generation
and storage at our assets, which will
simultaneously reduce our customers’
carbon footprint and that of our value
chain, while generating significant
customer cost savings.
More information on this
program can be found at
www.dexus.com/casestudies.
Delivering on Climate action to address key risks and opportunities
Dexus 2024 Annual Report
66
Developments
Recognising increasing customer
and investor focus on upfront carbon
emissions, we launched the Sustainable
Development Standards (the SDS) pilot to
consistently deliver tangible sustainability
outcomes for the spaces we deliver.
The SDS are embedded in our
Development Excellence Method
and have been trialled across office
and industrial projects, prior to its full
integration across the development
portfolio in FY25. The standards set
minimum expectations by sector and
the pilot feedback has been positively
received, particularly highlighting
the benefit of knowledge sharing and
the adoption of lessons learned from
other projects.
Decarbonisation through
supplier collaboration
Dexus is committed to influencing
our supply chain to accelerate their
own decarbonisation journey. Dexus
favourably considers contracting
suppliers who have a net zero target
of 2030 or earlier, that is verifiable by
a recognised reporting standard.
We have strengthened our supply
chain monitoring to include carbon
risk profiling within sustainability
risk analysis. The program has
been applied across 1,179 suppliers,
representing 70% of total supplier
spend, to provide a holistic view of
supplier emissions. It highlighted
the need for greater collaboration
with our suppliers to achieve shared
decarbonisation goals, with seven of
Dexus suppliers currently reporting
GHG emissions or decarbonisation
commitments. As incoming mandatory
climate‑related disclosures place
increased focus on supply chain
transparency, Dexus will continue to
collaborate with suppliers on sharing
emissions data and monitoring progress
against commitments to ensure
accountability and alignment.
Preparing for increased
regulatory reporting
Dexus is preparing for the incoming
Australian Sustainability Reporting
Standards, and will be captured
in the first tranche of reporters
(‘Group 1’). We have a strong
track record of TCFD‑aligned
reporting and comprehensive
reporting on GHG emissions, as
well as disclosing our approach to
managing material sustainability
issues via our Management
Approach and Procedures.
During the year, we assessed our
current disclosures against the
requirements to identify areas
of uplift and have commenced
work to align activities within
climate‑aligned programs and
reporting with the proposed standards.
We are focused on improving our
understanding and reporting on
scope 3 emissions (upfront embodied
carbon, downstream tenancy emissions
and financed emissions). We are also
revisiting our assessment of physical
and transition risk across the platform
to better integrate climate-related
decision making.
This work will lead into the next
iteration of Dexus’s Climate Transition
Action Plan, which will be delivered in
FY25. The Climate Transition Action
Plan will reaffirm Dexus’s strategic
commitment to decarbonisation,
resilience and investment in the
climate transition. It will incorporate
commercial considerations of the cost
and opportunity of action, to enhance
resilience and create value as we
transition to a net-zero economy.
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Governance
Performance
Overview
Approach
Overview
Climate action continued
Delivering on climate action continued
Increasing physical and
financial resilience
Addressing physical risk
We identified 52 locations for
site‑specific risk assessments to
understand risks for the short and
long-term, evaluate how these risks
are currently managed and specific
additional where required to address
them. This year’s focus was on greater
exposure across sectors, visibility
across new precincts and coverage
across risk topics.
Facilities teams and customers were
engaged in site walks to provide a
holistic view of climate vulnerability.
From these assessments we saw:
– Climate zones: Themes were
identified across climate zones
resulting in similar risk identification
dependent on asset typology.
Examples include projected
increases in the frequency
and intensity of storms and
flooding across Brisbane (climate
zone 2), increases in the severity
and frequency of storm activity and
extreme heat in Sydney (climate
zone 5), and increases in heatwave
conditions and hot days across
Melbourne (climate zone 6).
– Asset typology: Themes were
identified across asset typologies,
including façade, rooftop and
general site risk areas for industrial
locations, and façade, HVAC
systems, drainage and basement
risk areas for office locations.
Adaptation plans have been
developed, with short-term activities
being tracked through our in-house
asset risk management program and
supported by capital expenditure.
As our portfolio evolves, we will
incorporate infrastructure assets in a
refreshed view of our climate physical
risk at the portfolio level in FY25. This
will be supported by further integration
of climate action into business
decision making through the financial
quantification of climate-related risk.
Addressing transition risk
Stakeholders expect us to be clear
on how we are addressing climate
risks and opportunities, and how
this is being translated into business
decision making.
In FY25, we will refresh the platform
approach to transition risk, updating
our qualitative and quantitative
climate risk assessment.
Dexus 2024 Annual Report
68
FY25 commitments
Deliver on our FY21 commitment
to reduce energy intensity by 10%
across the platform managed
office portfolio by FY25 against
a 2019 baseline.
Deliver on our FY21 commitment
to reduce water intensity by 10%
across the platform managed
office portfolio by FY25 against
a 2019 baseline.
Continue to maintain net zero on
scope 1 and 2 (and operational
scope 3) emissions for our platform
managed portfolio.
Focus areas
Establish the next iteration of
our Climate Transition Action
Plan to support our 1.5-degree
decarbonisation journey across
our value chain.
Continue to procure 100% of
electricity from renewable sources
across the platform’s managed
portfolio in line with our RE100
signatory commitments.
Capitalising on climate‑
related opportunities
and investments
Managed investments
in climate transition
The energy infrastructure investments
we manage play a role in the energy
transition. Macarthur Wind Farm (MWF)
in southwestern Victoria is a strategic
investment that delivers climate
outcomes. One of the largest wind
farms in the southern hemisphere, MWF
is capable of generating 420 MW of
energy per hour. Energy generated from
the wind farm, which started operating
in 2013, is fully committed until 2038.
Another Dexus managed investment,
Powerco, is the second largest
electricity distribution network in
New Zealand supplying electricity
from largely renewable sources to
customers and supporting New
Zealand’s decarbonisation journey
through electrification1. As a regulated
utility, Powerco benefits from a
well‑established regulatory framework
to deliver stable and predictable
cashflows underpinned by population
growth and electrification demand.
Supporting Joint Venture
partners in accessing
green financing
We continued to support the
establishment of a green debt facility
for a third party capital investor in a
Dexus managed Joint Venture (JV).
The facility incorporates performance
incentives linked to the delivery
of sustainability target outcomes
across the JV.
We are well progressed in meeting
commitments in the green finance
instrument, having identified clear
milestones for emissions reduction
to track against. The JV is well on
the way to achieving its target to
increase installed rooftop solar PV
capacity, with 91% of the solar capacity
target achieved through committed
capacity across its portfolio.
Similarly, all green lease clauses
offered for new and renewable events
were Green Leases and the Green
Star Performance v2 submission is
progressing in line with Green Building
Council of Australia revised timing.
We will continue to support our
joint venture partners as they
access financial products to
support environmentally responsible
initiatives and objectives.
1. Powerco also distributes natural gas.
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Governance
Performance
Approach
Overview
Climate action continued
Topic and goals
Metrics and targets
Impact
Reduce like-for-like
portfolio energy use
and greenhouse gas
emissions and maximise
portfolio energy
efficiency
–
Maintain net zero
greenhouse gas
emissions (t. CO2-e)
across the platform-
managed portfolio1
–
Reduce energy intensity
(MJ/sqm) by 10% across
the platform-managed
office portfolio by FY25
against a FY19 baseline
–
Better utilisation of
natural resources
–
Reduced energy costs
–
Lower greenhouse gas
emissions in buildings
–
Improved resource efficiency
–
Manage transition risks
Target Australian best
practice in building
energy and water
performance
–
NABERS Energy
portfolio star rating
–
NABERS Water portfolio
star rating
–
Reduction in use of energy
and potable water through
better utilisation
–
Reduced resource
management cost
Renewable electricity
Renewable electricity
procurement
–
Maintain sourcing of 100%
renewable electricity for
base building operations
–
Eliminate greenhouse gas
emissions from base building
electricity
–
Manage transition risks
–
Support the acceleration
of the renewable
electricity industry
Scope 3 emissions from waste
Reduce the percentage
of waste sent to
landfill by increasing
recycling activity
–
NABERS Waste portfolio
star rating
–
Reduced volumes of
waste sent to landfill
and associated avoided
greenhouse gas emissions
–
Reduced reliance on
carbon offsets
Energy consumption and greenhouse gas emissions
Resource consumption and efficiency
Metrics and targets
Quantifying emissions and
climate‑related metrics is
an important component in
understanding commitments and
setting goals. Our data collection
system starts in the building and
flows through our data management
systems to provide a holistic view
of performance and progress.
Our focus for the year has been
on standardisation and process
efficiencies to support greater
transparency around sustainability
performance. We have successfully
trialled a new data management
architecture for the collection of
building operational and performance
data. In FY25, we will roll out this
enhanced architecture so Dexus can
use it for reporting and performance.
We will continue our membership of
the Property council of Australia’s
working group on incoming disclosures
to embed a consistent approach to
reporting on climate-related financial
information across the sector.
Progress against
metrics and targets
In 2019 we set a target to achieve
a 70% reduction in scope 1 and 2
emissions by 2030 against our FY18
baseline. This goal was certified by
the Science Based Targets initiative
(SBTi) at that time as being aligned
with a global warming trajectory of
under 1.5°C and we also committed to
reducing customer-related emissions
by 25% over this timeframe. The SBTi
continues to recognise Dexus’s 2030
targets, yet formal recognition of a
long-term commitment to net zero
requires transition to their Corporate
Net‑Zero Standard.
Dexus has not chosen to transition
to the new standard at this point,
however we continue to recognise the
urgency of limiting global warming in
line with 1.5 degrees and our targets
are still based on this trajectory, having
achieved and maintained net zero
on scope 1 and 2 emissions for our
managed portfolio since FY22.
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.
Progress against our metrics and
targets is underpinned by our advocacy
around climate action. Dexus has
pledged to the World Green Building
Council’s Net Zero Carbon Buildings
Commitment and is a member of
RE100, the global corporate leadership
initiative of businesses committed to
100% renewable energy.
Additionally in March 2024, Dexus was
awarded Climate Active carbon neutral
certification across its management
operations and managed portfolio for
the FY23 period. We have also responded
to the Australian Government’s
voluntary Corporate Emissions
Reduction Transparency (CERT) report
for the second year, recognising our
transparency around the maintenance
of a group-wide climate active position
via our reporting on Dexus’s net
emissions position, renewable electricity
use and carbon offset retirement.
Dexus has a strong track record of
setting improvement targets which drive
continuous improvement over the short
to medium term.
The table outlines metrics, goals, and
targets that we use to measure climate
and environmental performance and
the related impacts of our performance.
1. In line with Climate Active Carbon Neutral
Standard for Organisations, net emissions
for the year ended 30 June 2024 include
offsets purchased and allocated for
retirement during the year and up to the
date of this report.
Dexus 2024 Annual Report
70
Climate related financial disclosure reporting
The table below provides an index of Dexus’s climate-related disclosures in accordance with the Taskforce on Climate-related
Financial Disclosures (TCFD) acknowledging its broad alignment to the International Financial Reporting Standard (IFRS)
International Sustainability Standards Board’s (ISSB) S1 General Requirements for Disclosure of Sustainability-related Financial
Information. Alignment with the IFRS ISSB S1 and S2 will be incorporated within FY25 reporting.
TCFD recommendation
Reporting reference
Governance
Disclose the organisation’s governance around climate‑related risks and opportunities:
a) Describe the Board’s oversight of climate-related risks
and opportunities.
– 2024 Integrated Annual Report (page 64)
– Towards Climate Resilience (page 15)
b) Describe the management’s role in assessing and
managing climate-related risks and opportunities.
– 2024 Integrated Annual Report (page 64)
Strategy
Disclose the actual and potential impacts of climate-related risks and opportunities on the organisation’s businesses,
strategy, and financial planning where such information is material:
a) Describe the climate-related risks and opportunities
the organisation has identified over the short, medium
and long term.
– 2024 Integrated Annual Report (page 65)
– Towards Climate Resilience (pages 19–21)
– 2024 Management Approach and Procedures
(pages 17–25)
b) Describe the impact of climate-related risks and
opportunities on the organisation’s businesses,
strategy, and financial planning.
– 2024 Integrated Annual Report (pages 62–71)
– Towards Climate Resilience (pages 9–14, 19–21)
c) Describe the resilience of the organisation’s strategy,
taking into consideration different climate-related
scenarios, including a 2°C or lower scenario.
– Towards Climate Resilience (pages 4–14)
– 2024 Management Approach and Procedures
(pages 17–25)
Risk management
Disclose how the organisation identifies, assesses, and manages climate-related risks:
a) Describe the organisation’s processes for identifying
and assessing climate-related risks.
– 2024 Integrated Annual Report (pages 62–71)
– Towards Climate Resilience (page 16)
– 2024 Management Approach and Procedures
(pages 17–25)
b) Describe the organisation’s processes for managing
climate-related risks.
– 2024 Integrated Annual Report (pages 62–71)
– Towards Climate Resilience (page 16)
– 2024 Management Approach and Procedures
(pages 17–25)
c) Describe how processes for identifying, assessing,
and managing climate-related risks are integrated
into the organisation’s overall risk management.
– 2024 Integrated Annual Report (pages 62–71)
– Towards Climate Resilience (page 16)
– 2024 Management Approach and Procedures
(pages 17–25)
Metrics and targets
Disclose the metrics and targets used to assess and manage relevant climate-related risks and opportunities
where such information is material:
a) Disclose the metrics used by the organisation to assess
climate-related risks and opportunities in line with its
strategy and risk management process.
– 2024 Integrated Annual Report (page 70)
– 2024 Management Approach and Procedures
(pages 17–25)
b) Disclose scope 1, scope 2, and if appropriate, scope 3
greenhouse gas emissions, and the related risks.
– 2024 Sustainability Data Pack (GHG emissions)
c) Describe the targets used by the organisation to
manage climate-related risks and opportunities and
performance against targets.
– 2024 Integrated Annual Report (pages 62–71)
– 2024 Management Approach and Procedures
(pages 17–25)
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Financial report
Directors’ report
Governance
Performance
Approach
Overview
Enhancing communities
How we are
Enhancing
communities
We support communities around our assets
through inclusive and accessible design
and placemaking, and investment in
infrastructure that creates social value.
120
properties delivering
community activations across
Australia and New Zealand
732
hours of employee
volunteering
>$1.78m
contributed to
communities across
Australia and New Zealand
Dexus 2024 Annual Report
72
Board focus
Our ability to create value
and maintain a social
license to operate hinges on
successfully engaging with
local communities in and
around our properties.
As a leading Australasian real asset
group, we are well positioned to
enhance the communities living
in and around our assets. People
visit our properties every day to
work, shop and access important
services. We consider these visitors
our community, and we value the
opportunity to unlock potential to
create a better tomorrow for them.
By achieving this, we also create value
through enhancing the appeal of our
assets and foster trust in Dexus.
Enhancing Communities
roadmap to support a real
and lasting difference
Given our broad reach across Australia
and New Zealand, there are numerous
social causes and organisations
operating in our communities in need of
assistance. Rather than trying to tackle
all social needs, we want to focus our
efforts and resources where, through
leveraging our assets and capabilities,
we can make an impactful and
sustainable difference.
In identifying a social value theme, we
have explored the social issues that
are most prevalent for our communities,
customers and people, alongside the
unique assets, resources and skills we
have available to make a difference.
Our goal is to maximise the value we
offer communities through greater
focus and alignment of efforts across
our portfolio.
In FY24, we identified a proposed social
value theme to focus our community
investments and enable us to continue
to increase our impact at scale across
the platform.
As we continue to develop our
partnership framework, we are
identifying programs and partnerships
aligned to our identified theme.
In addition, we will define an
outcome‑based social value goal
and build a measurement framework
and tool for greater understanding
of the value generated through our
social programs.
Scale of social impact
As part of our Enhancing Communities
roadmap, we have been focused
on how we create a consistent and
scalable approach to community
partnerships across the platform.
Working with existing partners we
have focused on taking existing
programs to deliver them to a wider
audience, across multiple assets. In
addition, this year we have improved
our reporting processes to capture the
scale of social programs and activities
across our portfolio. Combined,
this has led to an increase in overall
community contributions to $1.78 million,
representing more than triple our
investment from the previous year.
In FY24, we improved our social data
reporting by capturing the value of
social programs and activations at our
assets. Valued at over $737,000, these
programs focus on inclusion, connection
and wellbeing. This data positions us
to understand the inputs and social
outcomes being delivered locally.
Connecting people through
social infrastructure
The assets in our social infrastructure
portfolio connect our cities and bring
people together. This includes hospitals,
schools, airports, rolling stock, wind
farms, water treatment plants, student
accommodation and recreational
facilities. Our investment in critical social
infrastructure delivers essential services
and strengthens the fabric of our local
communities.
As we further refine our Enhancing
Communities roadmap, we will consider
the role of our social infrastructure
assets, and how they contribute to the
social outcomes we strive to generate.
In FY25, we will explore the potential to
measure the social impact generated
by our social infrastructure assets.
Leveraging development
projects to support
our communities
The platform’s $16.1 billion real estate
development pipeline provides
the opportunity to drive positive
social change, support the needs
of local communities and celebrate
local culture.
As outlined in the Climate Action
section, we launched the Sustainable
Development Standards (SDS) in FY24
to promote consistent application
of our sustainability priorities across
our developments. The SDS includes
a range of requirements focused on
enhancing local communities through
our developments, including social
procurement, universal and inclusive
design, community resilience, culture
and heritage and reconciliation.
More information on our
developments can be found at
www.dexus.com/casestudies.
In FY24 the Board and Board Sustainability Committee was involved in:
– Approving Enhancing Communities
as a priority area of the Dexus
Sustainability Strategy
– Overseeing the Enhancing
Communities roadmap, including
flagship programs and social
value theme
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Governance
Performance
Approach
Overview
Enhancing communities continued
Achieved
Not achieved
Progressed
Focus areas
Status
FY24 progress
Develop a revised community investment approach
as part of the Enhancing Communities priority area
in the new Dexus Sustainability Strategy.
Developed an Enhancing Communities roadmap
with a proposed social value theme and a draft
partnership framework. Reviewed our existing
processes for social data, improving our measurement
coverage and capability.
Delivering FY24 Enhancing communities commitments
Amplifying social impact
through partnerships
We continue to work with community
partners to amplify social impact
across our assets. We maintained
our partnership with major partners
Black Dog Institute and Planet Ark
and more information on these
activities can be found in the
Customer Prosperity section.
Through our partnership with
Cerebral Palsy Alliance (CPA),
our employees and customers
across 37 office and industrial sites
participated in STEPtember and raised
funds, donated goods and packed
hampers and gifts. Over 330 Dexus
customers and employees participated
in the challenge.
In the lead up to Christmas,
Dexus supported Foodbank,
which works with front line charities
to feed vulnerable Australians.
Customers and employees donated
1,600 kilograms of non‑perishable
goods and provided the equivalent
of more than 20,000 meals.
For infrastructure investments where we
do not have operational management
control, we encourage them to prioritise
social impact. Through our investment
in Powerco, 2,925 native trees were
planted in local communities in 2023
as part of the Replant for Tomorrow
initiative.
In addition to working with community
partners, our employees volunteered
732 hours with charities and community
organisations including Our Big Kitchen,
Eat Up Australia, Two Good, Oz Harvest,
Collingwood’s Children Farm, and
Cerebral Palsy Alliance’s STEPtember
and Christmas present wrapping.
More information on our
community partnership events
and initiatives can be found at
www.dexus.com/casestudies.
Delivering meaningful
connections at our assets
Our assets play an important role
within their communities, providing
opportunities to bring people together
and delivering experiences that
are meaningful and engaging for
local residents. 120 assets delivered
community activations across
Australia and New Zealand.
Celebration of diversity
Our asset strategies are focused
on addressing the unique needs of
the local communities and provide
opportunities to connect and celebrate
in a meaningful way. Over the year,
we rolled out culturally diverse
campaigns across our offices and retail
centres that resonated with the local
community, including Ramadan,
Orthodox Easter, Lunar New Year
and Mardi Gras.
Accessible experiences
We aim to create spaces that are
welcoming, inclusive and beneficial for
everyone in the community. Providing
accessible experiences enhances social
value and fosters a sense of belonging.
This year we held ‘Sensitive Santa’
sessions across seven shopping centres,
allowing families to visit during quiet
hours to support their sensory needs.
We saw a 128% increase in attendance
at Macquarie Centre in December 2023
compared to 2022, demonstrating the
importance of providing these types
of services.
Dexus 2024 Annual Report
74
FY25 focus areas
Finalisation of Social Value theme,
community partnership framework
and aligned community partner(s).
Development of group‑wide
social value goal and
measurement framework.
Macquarie Shopping Centre also
launched the Hidden Disabilities
Sunflower program which adopts
the sunflower, a globally recognised
symbol for those living with non‑visible
disabilities, and our concierge,
security and Centre Management
teams have been trained on how
to support customers with invisible
disabilities. By choosing to wear a
Hidden Disabilities Sunflower item,
such as a lanyard, badge or wristband,
customers can discreetly signal
to our team that they may need
assistance during their visit.
Supporting charities
through our operations
Decorative flower auctions and
Christmas gift-wrapping events were
held across our office and retail assets
in support of local charities.
Every week, we auction the decorative
flowers in our office lobbies rather
than sending them to landfill. The
funds raised are donated to our charity
partners, with more than $77,000
donated throughout the year across
26 properties.
Across our retail centres, we raised
over $54,000 through our Christmas
gift‑wrapping charity donations at
six centres. Of note, Indooroopilly
Shopping Centre reported an increase
of almost 90% in donations through
gift wrapping on the previous year.
More information on our community
contributions can be found within
our Sustainability Data Pack.
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Financial report
Directors’ report
Governance
Performance
Approach
Overview
Sustainability Foundations
$3.0m
spent with Supply Nation
certified or registered
companies
Foundational sustainability activities support
our social license and value creation
Second RAP
launched
endorsed by Reconciliation
Australia
3.5 stars
NABERS Waste average
rating across our
platform office portfolio
Dexus 2024 Annual Report
76
FY24 commitment
Status
FY24 progress
Continue to progress the delivery of our Reflect
RAP and set the next Dexus RAP.
We launched our second RAP which was endorsed by
Reconciliation Australia. The new Reflect RAP aligns to
Dexus’s purpose, values, core business and priorities.
Implement EcoVadis supplier verification across
preferred suppliers, targeting coverage of 80%
of preferred supplier spend engaged on the
platform by FY24.
Achieved coverage of 100% of our preferred supplier
spend with EcoVadis supplier verification.
Achieve a 4 star NABERS Waste average rating
across our platform office portfolio by FY25.
Achieved a 3.5 star average as at 30 June 2024.
Delivering FY24 Sustainability
Foundations commitments
Sustainability Foundations
The Foundations that underpin our
Sustainability Strategy incorporate the
sustainability areas that are important
to us and our stakeholders.
The Sustainability Foundations can be
categorised in three areas:
1. Environmental management
(Circularity, Nature)
2. Social performance
(Indigenous Engagement,
Human Rights, Health & Wellbeing,
Diversity, Equality & Inclusion)
3. Governance & Reporting
Our performance in these areas is
outlined in this section. Information on
Dexus’s Diversity, Equality & Inclusion
approach and performance can be
found in the Thriving people section of
the Annual Report on pages 52–57.
Achieved
Not achieved
Progressed
Board focus
In FY24, the Board and Board Sustainability Committee were involved in:
– Overseeing Dexus’s waste target to
deliver a NABERS Waste 4 star office
portfolio average rating by FY25
– Overseeing Dexus’s continued
Indigenous engagement, including
approval of Dexus’s second
Reflect RAP
– Overseeing results of Modern
Slavery audits undertaken by
an external party
– Approving the 2023 Dexus Modern
Slavery Statement, and discussing
actions taken to prevent modern
slavery and overseeing supplier
engagement on modern slavery risk
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Directors’ report
Governance
Performance
Approach
Overview
Sustainability Foundations continued
Environmental management
Circularity
Assets delivering building
performance targets
Our ongoing goal is to embed resource
stewardship into asset operations
and drive asset performance so that
the Dexus Platform portfolio is high
performing, fossil fuel free, resilient and
actively managed with minimal risk.
We continue to enhance how we
plan, budget, implement and monitor
energy, water and waste management
programs to maximise positive
environmental outcomes.
Decarbonisation roadmaps for
23 assets were completed in FY24,
providing a technical view of future
asset energy and water efficiency
potential, which will directly inform
future asset strategies and capital
works plans. Operationally, we
are transitioning to a data-driven
mechanical maintenance regime which
will help service technicians diagnose
and resolve issues that could lead to
excess energy use or water leakages.
In the coming year we will revisit
our virtual engineer analytics
service, which has been successfully
operating since 2016. The goal for
our refreshed approach is to position
assets to consistently achieve their
daily operational potential. We will
do this by combining data-driven
maintenance activities with a value
creation‑based lens to identify and
deliver resource efficiency opportunities
to uplift performance over the
short- to medium-term.
As with energy and water, waste
reduction is a focus and one that
requires a strong partnership
between customers, cleaners,
waste contractors, and Dexus.
Dexus facilities management teams
worked collaboratively with customers
to optimise waste management
practices and increase engagement
on sustainability. Throughout FY24, we
delivered 40 waste engagements with
customers and identified a further 200
opportunities for future engagements.
These efforts have contributed to an
increase in our NABERS Waste office
portfolio average to 3.5 stars in FY24,
up from 3.3 stars in FY23.
Circular economy principles at
Waterfront Brisbane
The Waterfront Brisbane development
is underpinned by circular economy
principles with the goal of maximising
diversion of demolition and construction
waste. To date, 98% or 29,300 tonnes of
material cleared from the site has been
recycled or repurposed.
The Waterfront Brisbane development
team collaborated with partners John
Holland, Rino, Delta Group, Five Mile
Radius and Laura Lane Creatives to
deliver innovative waste management
solutions including repurposing
concrete into new materials for
construction projects, including the
road at Crossbank Estate. The project
team have also repurposed waste
material into new outdoor seating
furniture for the completed Waterfront
Brisbane precinct and recycled vinyl
signage into merchandise.
Nature
We understand the impact our
operations and supply chain can have
on nature and aim to enhance and
manage biodiversity across properties
that we develop and operate.
In addition to biodiversity initiatives
at our assets, we continue to support
local and international carbon projects,
forest preservation, reforestation and
tree planting that deliver carbon
reduction and biodiversity co-benefits.
As part of our partnership with Planet
Ark, all customers on their anniversary
have a donation made by Dexus to
The Seedling Bank on their behalf.
We recognise the importance of the
Taskforce for Nature-related Financial
Disclosure (TNFD) guidelines and aim
to start introducing TNFD aligned
reporting on nature in future disclosures.
More information on Dexus’s carbon
offset procurement can be found in the
2024 Sustainability Data Pack.
Dexus 2024 Annual Report
78
Human Rights
Our supply chain is an extension of
our business and forms part of our
social licence to operate. Our suppliers
play a central role in optimising asset
performance, managing risk and
delivering customer outcomes. Our
capacity to create value depends
on understanding, influencing and
collaborating with suppliers within our
value chain.
Supply chain monitoring and
relationship management
We take a risk-based approach
to understanding and monitoring
human rights and sustainability trends
across our supply chain. This year, we
expanded our partnership with EcoVadis
to provide ESG risk screening across
the breadth of our 1,179 suppliers and
conducted in‑depth supplier specific risk
assessments of 86 key suppliers. The ESG
risk screening tool now applies to 70%
of total supplier spend and 100% of our
preferred suppliers, including monitoring
of human rights and modern slavery, in
excess of our FY24 commitment to verify
80% of preferred supplier spend.
This year, we expanded our program
so 847 suppliers attested to adhering
to Dexus’s Sustainable Procurement
Procedure and Supplier Code of
Conduct, demonstrating the strength
of our supplier selection processes and
ongoing supplier management across
our diverse operations. Leveraging our
ESG risk assessment tool, we focused on
engaging with our suppliers to improve
their sustainability risk management
resulting in an overall ratings improvement
of 4% across the 35 suppliers that were
re-assessed.
Results of the ESG risk screening will be
used to expand the in-depth ESG risk
assessments for greater coverage of
suppliers in FY25. Suppliers also benefit
from access to academy training
materials across the four EcoVadis
pillars of Environmental, Labour &
Human Rights, Ethics and Sustainable
Procurement, with over 90% taking up
access.
Our ESG risk assessed suppliers have
an overall sustainability score 27%
above the EcoVadis global benchmark,
demonstrating strong engagement on
sustainability. In FY24, we introduced new
KPIs with more ambitious sustainability
targets in recognition of the increased
importance of aligning sustainability
objectives across our value chain.
Through the selection, performance
management and re-contracting
process we now favourably consider
suppliers who have a net zero target
of 2030 or earlier and aligned to
a recognised reporting standard,
and suppliers who have an Elevate
Reconciliation Action Plan (RAP).
Our 2023 Modern Slavery Statement
details our approach to managing
modern slavery risks, available at
www.dexus.com/corporategovernance.
Our 2024 Modern Slavery Statement
will be available in December 2024.
Social Performance
Indigenous Engagement
As a leading Australasian real asset
owner and manager, we are uniquely
positioned to collaborate with our
Indigenous partners and enable
connections with our customers and
communities across Australia and
New Zealand.
In FY24, we launched our second
Reconciliation Australia endorsed
Reflect RAP. Our new RAP aligns with our
new purpose, values and core business
and prioritises areas of impact.
The areas that have been
prioritised include:
– Engaging with customers as part of
reconciliation activities and support
for customers reconciliation initiatives
within our assets
– Supporting the Indigenous carbon
industry through purchasing carbon
offsets that are Indigenous-led
– Activating our spaces with First
Nations partners and reconciliation
events across our assets
Key Indigenous Engagement outcomes
and achievements in FY24 include:
– Celebrating Reconciliation Week and
NAIDOC Week with activities across
our assets – including local arts and
crafts, and storytelling sessions in
our shopping centres. A key highlight
for the year involved Quay Quarter
Tower hosting the Legs on the Wall
Indigenous acrobatic performance
– First Nations procurement – in
FY24, we procured $3 million with
First Nations businesses. This is a
reduction on our FY23 First Nations
procurement spend of $7.7 million,
due to supplier organisational
changes outside of our control.
Procurement spend remains a
significant opportunity to support
First Nations employment through
the goods and services we procure,
and we will be looking to expand our
suppler engagement in FY25
– Our first project Reconciliation
Action Plan (RAP) for a development
(Waterfront Brisbane) – While
not a formal RAP endorsed by
Reconciliation Australia, it is the
first time we have developed a
project-specific RAP with a focus
on supporting the needs of local
First Nations peoples through
our developments
– Our ongoing partnership with the
Australian Literacy and Numeracy
Foundation – In addition to a
financial donation, our customers,
communities and employees are
encouraged to support through our
annual Share-A-Book Campaign.
We collected books from customers
and employees across our portfolio
throughout Reconciliation week
and NAIDOC Week to be donated
to First Nations peoples to support
their learning of language and
communications skills
– Indigenous art – We launched
a First Nations Art Program at
25 Martin Place in collaboration
with Boomalli Aboriginal Artists
Co‑operative and the celebrated
artist Dennis Golding. The artist’s
curated series Drawing from Gadigal
is on display over the next 12 months
More information is available in our
Reflect Reconciliation Action Plan is
publicly available at www.dexus.com.
79
Investor information
Financial report
Directors’ report
Governance
Performance
Approach
Overview
Sustainability Foundations continued
Social Performance
continued
Health & Wellbeing
Our Work Health, Safety and Wellbeing
vision is to achieve a workplace where our
people and communities care for each
other, everyone stays safe and well
and the environment is cared for in the
successful operation of our business.
During the year we onboarded 100%
of the AMP Capital portfolio onto our
ISO 45001:2018 accredited workplace
health and safety management
system, ensuring our continued and
comprehensive monitoring of health and
safety for our employees and workplaces
is maintained across the portfolio.
In support of our expanded workforce,
the annual “National Safe Work
Month” campaign in October focused
on upskilling our people on current
risk‑related matters with the theme
“For everyone’s safety, work safely”.
The Dexus Risk team facilitated a risk
roadshow to deliver three training
webinars to over 260 Dexus and
partner personnel across asset,
property, facility, centre and operations
management teams. Topics included
environmental, climate change, hazardous
material, indoor air quality, and property
risk assessment and audit programs.
Additionally, the Dexus Risk
team partnered with emergency
management consultants to deliver
three sector-specific emergency
scenario exercise training sessions with
over 160 participants across Dexus and
its facility management partner teams.
Governance & Reporting
Green Building Certifications
Building certifications are an
important tool to integrate leading
practice into our developments and
operations and to benchmark our
sustainability performance.
Green Star
Dexus maintained its 4 Star Green Star
Performance portfolio certification, with
coverage of 96 properties across the
Dexus Platform office, retail, industrial
and healthcare assets. The platform’s
office portfolio maintained on average a
5 Star Green Star – Performance rating.
Notable achievements include Bayfair
Shopping Centre being the first shopping
centre in New Zealand to achieve a 4 Star
Green Star Performance certified rating.
This accomplishment is a testament to
the continuous management initiatives
and innovative strategies implemented at
the centre to embed sustainability.
We are partnering with the Green
Building Council of Australia (GBCA) as
part of its Early Access Program to trial
and transition to Green Star Performance
version 2 from FY25. We have registered
88 assets from our industrial portfolio to
pilot the new performance tool, which
the GBCA has significantly expanded
and uplifted to adopt an outcome focus.
The update reflects the drive towards
continuous improvements to align with
increasing expectations from customers
and investors on the transition to net
zero and the need to achieve targets in
line with climate science.
From a development perspective, Dexus
assets achieved the following ratings:
– 40 Cloudline Court, Ravenhall
achieved 4 Star Green Star Design &
As Built v 1.3 certified rating
– 525 Boundary Street, Spring Hill
achieved 5 Star Green Star Design &
As Built v 1.3 certified rating
In addition, the following assets in our
development pipeline are registered to
achieve a future Green Star certification
with targeted star ratings as follows:
– Waterfront Brisbane targeting a
6 Star Green Star – Buildings v 1 rating
– Atlassian Central targeting a
6 Star Green Star – As Built v 1.3 rating
– Central Place Sydney targeting a
6 Star Green Star – Buildings v 1 rating
– 82 Momentum Way, Ravenhall
targeting a 4 Star Green Star –
Buildings v 1 rating
– 25 Martin Place, Sydney retail
targeting a 5 Star Green Star –
Design & As Built v 1.3 rating
Further details are available at
www.dexus.com/casestudies.
Dexus 2024 Annual Report
80
NABERS
Dexus has a well-established National
Australian Built Environment Rating System
(NABERS) program to benchmark
energy, water, waste and indoor
environment performance nationally,
using a rating scale from 1 to 6 stars.
The platform’s office portfolio average
NABERS Energy rating remained steady
at 4.9 stars. This was influenced by
ratings uplifts across 5 assets driven
by energy management activities.
During the year, Quay Quarter Tower
was awarded a 5 star NABERS Energy
rating, which will further improve in FY25
as it benefits from full occupancy.
These successes were balanced by a
number of high-performing assets being
divested during the year, and half star
reductions across 8 assets, influenced
by higher physical occupancy as more
workers return to the office.
We have embraced recent and
upcoming changes to the NABERS
Energy rating tool. The introduction
of the Renewable Energy Indicator
this year aligns with our approach for
purchasing renewable electricity and
market-based emissions accounting
and enables us to publicly communicate
our track record of sourcing 100% of
electricity from renewables.
NABERS’ planned 2025 updates
to the emissions factors within its
energy ratings criteria to reflect the
decarbonisation of the grid will, over
time, incentivise landlords to review
their asset’s energy supply mix.
Together, these and other market
signals provide a strong commercial
business case for our asset
decarbonisation and optimisation
programs to drive the next phase of
energy efficiency and electrification.
The platform’s office portfolio average
NABERS Water rating reduced from
4.5 stars to 4.2 stars, as higher water
use associated with increased physical
occupancy is resetting high NABERS
water ratings towards pre‑COVID
levels. This was observed across
23 office assets.
Across NABERS Indoor Environment,
the platform’s office portfolio achieved
a 5.2 star portfolio average NABERS
Indoor Environment (increasing
by 0.4 stars on FY23, with overall
coverage currently at 91% as coverage
has fallen due to the divestment of
office assets during the year.
The platform’s portfolio includes
12 assets that have achieved a 6 star
NABERS Indoor Environment rating,
including Quay Quarter Tower for its
inaugural rating. Overall, the portfolio
recorded an uplift across 22 assets and
is on track to achieve its FY25 target
portfolio average of 5 stars.
This year we made progress towards
our FY25 4 star NABERS waste targets,
with 18 properties recording gains of
0.5 stars or more. By actively engaging
with customers and cleaners, we have
improved awareness of our waste
management system which will help
drive improved recycling performance.
Organics has been a key focus, and at
the QV precinct in Melbourne, we are
partnering with a progressive AgTech
company to collect and transform food
waste from the precinct into protein
and fertiliser using insects in support
of a circular, carbon positive future for
agriculture and the built environment.
FY25 commitments
Continue to implement ESG
risk screening and assessment
programs using EcoVadis,
targeting risk assessments for over
100 key suppliers.
Deliver on our FY21 commitment
to achieve a 4 star NABERS
Waste average rating across the
platform office portfolio by FY25.
Asset type
Energy
Water
Waste
Indoor
Environment
Dexus Platform
office portfolio
4.9 stars
4.2 stars
3.5 stars
84% coverage
5.2 stars
91% coverage
Dexus Platform
retail portfolio
4.7 stars
3.3 stars
NABERS portfolio averages
81
Investor information
Financial report
Directors’ report
Governance
Performance
Approach
Overview
Governance
A high standard of corporate governance
is the foundation for the long-term success
of the platform.
Our Board and Executive 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 Board delegated
committees have overall responsibility
for corporate governance and
are collectively focused on the
long‑term success of the platform.
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 2024 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
and infrastructure markets to create
and manage real asset investments
for its 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 funds
have in place a best practice
corporate governance model that
was established in consultation
with their respective investor base.
These funds have Responsible Entity
Boards that are comprised wholly
or predominantly of non-executive
directors and are independent of the
Dexus Board. 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.
Dexus also acknowledges the
importance of effective corporate
governance practices in relation to its
third party capital partners. 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.
Dexus also manages two other listed
funds, Dexus Convenience Retail
REIT and Dexus Industria REIT, and
applies many of the same governance
arrangements. These funds also benefit
from leveraging Dexus’s funds and
property management expertise to
drive growth and performance.
Royal Adelaide
Hospital
Dexus 2024 Annual Report
82
Governing ESG
Our corporate governance framework
integrates ESG across the breadth and
depth of Dexus. We regularly review and
update our policies and procedures
to ensure our organisation adapts to
shifting risks and opportunities.
The Board Sustainability Committee
considers material environmental and
social issues relevant to the platform
and supports the maintenance of our
position among the leaders in ESG
performance and sustainability impact.
The Board Sustainability Committee
supports the Board in:
– Understanding the expectations
of our key stakeholders
– Understanding how our ability to
create value is impacted by ESG issues
– Monitoring external ESG trends and
understanding associated risks
and opportunities
The Board Sustainability Committee
meets four times a year and during the
year engaged with Dexus management
teams on a range of ESG topics,
including:
– Engagement on and approval of
Dexus’s materiality assessment and
material topics
– Review and setting of Dexus’s
sustainability strategy
– Development and progress against
Customer Prosperity, Climate Action
and Enhancing Communities priority
area roadmaps
– Embedding sustainability into
investment and asset plans
across the portfolio
– Engagement on ESG and evolving
investor and customer expectations,
trends and market context and
evolving competitor landscape
– Strengthening ESG in our supply
chain through extended supply chain
mapping and supplier assessments
– Progressing towards public
sustainability commitments,
including our net zero
emissions target
– Addressing climate risk across
the portfolio
Dexus Board
Sets the corporate standard, establishes effective
governance, oversees business performance and
provides ultimate accountability for the group
Reconciliation Action
Plan Working Group
Responsible for advancing Dexus’s
reconciliation journey with Aboriginal
and Torres Strait Islander peoples
and implementing initiatives
aligned to Dexus’s Reconciliation
Action Plan.
Climate Reporting
Working Group
Responsible for overseeing Dexus’s
transition to meeting mandatory
climate-related financial disclosure
requirements against the Australian
Sustainability Reporting Standards,
as well as oversee implementation
of the approach.
Executive Committee
Oversees the implementation and management of
environmental and social practices and initiatives
throughout Dexus
Sustainability across
the Dexus Platform
Board Sustainability Committee
Oversees the implementation and management of
environmental and social practices and initiatives
throughout Dexus
83
Investor information
Financial report
Directors’ report
Governance
Performance
Approach
Overview
Investor information
Financial report
Directors’ report
Governance
Performance
Approach
Overview
Governance continued
Board of 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 Board is responsible for ensuring
that the fiduciary and statutory
obligations to Security holders and
stakeholders are met, and the various
Board Committees are detailed below.
The Executive Committee are
responsible for ensuring that Dexus’s
group strategy is achieved through
the development and implementation
of effective policies, processes
and procedures, and support and
encourage behaviours that align with
Dexus’s values and risk, compliance &
corporate culture.
Executive sub-committees include
the Capital Markets Committee,
Performance Committee, Investment
Committee, and Infrastructure
Valuations Committee.
Further details relating to the Board
and Board Committee structure
can be found in the Corporate
Governance Statement available at
www.dexus.com/corporategovernance.
The members of the Board of
Directors and the relevant business
and management experience the
Directors bring to the Board is detailed
on pages 85-88 and available at
www.dexus.com.
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 85.
The Board believes that its composition
meets or exceeds the minimum
requirements in each category.
Director
Board
Audit
Committee
Nomination &
Governance
Committee
People &
Remuneration
Committee
Risk &
Compliance
Committee
Sustainability
Committee
Warwick Negus
Ross Du Vernet
Paula Dwyer
Mark Ford
Peeyush Gupta AM
Rhoda Phillippo
The Hon. Nicola Roxon
Elana Rubin AM
The Dexus Board and Board Committee
membership at 30 June 2024
Member
Chair & Member
Dexus 2024 Annual Report
84
Dexus Board skills matrix
Areas of skill, expertise and experience
Leadership and Governance
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.
Strategy
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.
Property and
Infrastructure investment
Experience in and understanding of economic drivers and trends, markets
and customer needs and driving returns from investment in real estate
(including office, industrial, retail and health care) and infrastructure.
Good understanding of the risks and opportunities of larger scale
development projects.
Funds management
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.
Capital management
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 while ensuring appropriate
financial strength and liquidity.
Culture, People and Remuneration
Demonstrated 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.
Sustainability and
Stakeholder engagement
Experience and expertise in sustainability best practice including
understanding of climate change and climate related risks and opportunities.
Good understanding of community and stakeholder engagement, as well
as related governance.
Finance
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.
Risk management
and Compliance
Experience in and understanding of risk management frameworks and
controls; the identification, assessment and management of risks, including
managing compliance across large, complex, regulated financial services
organisations. Includes experience in workplace health and safety and
understanding of cyber and technological risk management.
85
Investor information
Financial report
Directors’ report
Governance
Performance
Approach
Overview
Board of Directors
Warwick Negus
Chair and Independent Director
BBus, MCom, SF Fin
Appointed to the Board on
1 February 2021 as an Independent
Director, Warwick Negus became Chair
of Dexus Funds Management Limited
on 27 October 2022. He is also Chair of
the Board Nomination & Governance
Committee, and a member of the
Board Audit Committee, Board People
& Remuneration Committee, Board Risk
& Compliance Committee and Board
Sustainability Committee.
Warwick is Chair of the Bank of
Queensland and a Non-Executive
Director of 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. Through
his experiences as an executive and a
non-executive director, Warwick brings
expertise in the management and
governance of complex organisations
particularly in the fields of fund
management and finance.
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 Pengana Capital
Group, and a Non-Executive Director
of Washington H. Soul Pattinson
and FINSIA.
Ross Du Vernet
Group Chief Executive Officer
and Executive Director
BBus, MBA
Appointed to the Board on
28 March 2024, Ross Du Vernet is Group
Chief Executive Officer (Group CEO)
of Dexus and an Executive Director of
Dexus Funds Management Limited.
Ross has more than 20 years’
experience investing in real assets
with a background in corporate
transactions, strategy, and funds
management in Australia and abroad.
Ross holds an MBA from MGSM and a
Bachelor of Business (Finance, Banking)
from the University of Technology
Sydney. He has also completed the
Advanced Management Program at
the Wharton School of Business.
Board Focus
The key areas of focus
for the Board and Board
Committees during FY24
are aligned to each of our
key resources.
The Board and Risk and Compliance
Committee oversee the risk
management practices.
Pages 20–25
Risk
The Board and Board Audit Committee
are involved in reviewing and monitoring
financial performance.
Pages 30–37
Financial
The Board is involved in approving
transactions and developments
across the portfolio.
Pages 38–51
Real assets
The Board and Board Sustainability
Committee are involved in reviewing
aspects relating to climate action
and the environment.
Pages 62–71
Climate action
The Board and Board Sustainability
Committee are involved in reviewing
sustainability activities within the
sustainability strategy foundations.
Pages 76–81
Foundations
The Board and Board People and
Remuneration Committee are involved
in aspects relating to employees.
Pages 52–57
People and
capabilities
The Board and Board Sustainability
Committee are involved in reviewing
activities to support the prosperity
of our customers.
Pages 58–61
Customer
prosperity
The Board and Board Sustainability
Committee are involved in reviewing
community related activities within
areas our assets are located.
Pages 72–75
Enhancing
communities
Dexus 2024 Annual Report
86
Paula Dwyer
Independent Director
BCom, FCA, SF Fin, FAICD
Appointed to the Board on
1 February 2023, Paula Dwyer is an
Independent Director of Dexus Funds
Management Limited, and a member
of the Board Audit Committee, Board
Nomination & Governance Committee
and Board People & Remuneration
Committee.
Paula is Chair of Allianz Australia
Limited, Elenium Automation Pty
Limited and Blackmores Limited and
a Non‑Executive Director of AMCIL
Limited and Lion Pty Limited, where
she is Chair of the Audit, Risk and
Compliance committees. She is a
member of the Committee of the
Melbourne Cricket Club.
Paula has been a Non-Executive
Director for over 25 years following
an executive career in investment
banking and funds management.
She has significant experience
across financial services, investment
management, healthcare, energy,
utilities and infrastructure, property
and construction, corporate finance
and mergers & acquisitions. Paula
brings to the board her diverse
leadership experience including in
corporate strategy development
and implementation across a broad
range of industries and in navigating
complex stakeholder relationships.
Previous roles include as Non-Executive
Director of ANZ Banking Group Limited
(where she was Chair of the Audit
Committee), Suncorp Group Limited,
Astro Japan Property Group Limited,
Fosters Group Limited, David Jones
Limited and Promina Group Limited.
Paula was formerly Chair of Tabcorp
Holdings Limited and Healthscope
Limited and Deputy Chair of Leighton
Holdings Limited.
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 Nomination &
Governance Committee and Board Risk
& Compliance Committee.
Mark 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 Kiwi Property Group and
South East Asia Property Company.
Mark previously held senior roles with
Price Waterhouse and Macquarie Bank.
Peeyush Gupta AM
Independent Director
FAICD, MBA (Finance), BA (CompSc)
Appointed to the Board on
24 April 2024, Peeyush Gupta AM is
an Independent Director of Dexus
Funds Management Limited, and
a member of the Board Audit
Committee, Board Nomination &
Governance Committee and Board
Sustainability Committee.
Peeyush is currently a Non-Executive
Director on the boards of Liberty
Group, SBS, Great Southern Bank,
Quintessence Labs, Northern
Territory Aboriginal Investment
Corporation, Institute of Chartered
Accountants, NSW Cancer Council
and The George Institute.
Peeyush has extensive experience
as a non-executive director across
financial services, property, insurance,
government, media, accounting and
technology.
Peeyush was co-founder and inaugural
CEO of IPAC Securities, a pre-eminent
wealth management firm spanning
financial advice and institutional
portfolio management. He was
previously Chair of Charter Hall Long
Wale REIT and Charter Hall Direct
Property Management Ltd and has
previously held executive roles at AXA
and Nathan Funds Management.
Peeyush was awarded a Member of
the Order of Australia in 2019 for service
to business and community through
governance and philanthropic roles.
87
Investor information
Financial report
Directors’ report
Governance
Performance
Approach
Overview
Board of Directors continued
Rhoda Phillippo
Independent Director
MSc (Telecommunications
Business), GAICD
Appointed to the Board on
1 February 2023, Rhoda Phillippo is an
Independent Director of Dexus Funds
Management Limited, Chair of the
Board Risk & Compliance Committee,
and a member of the Board Nomination
& Governance Committee and Board
Sustainability Committee.
Rhoda is a Non-Executive Director
of APA Group (ASX: APA) where she
chairs the Risk Committee and a
Non‑Executive Director of Waveconn
Group Holdings Management Pty Ltd.
Rhoda has been a Non-Executive
Director for over 15 years, following an
extensive executive career leading
operations across infrastructure, energy,
telecommunications and technology
in Australia, New Zealand and the
UK. Her experiences have gained her
deep skills in operational and change
management, mergers & acquisitions,
risk management, technology and
cyber issues.
Previous Board roles include
Non‑Executive Director of Pacific
Hydro, Datacom Group Limited, LINQ,
Vocus Group Limited (ASX: VOC) and
Managing Director of Lumo Energy.
Rhoda also held the role of Chair of
Snapper Services NZ, Chair of Kinetic
IT Pty Limited and Deputy Chair of
Kiwibank NZ.
The Hon. Nicola Roxon
Independent Director
BA/LLB (Hons), GAICD
Appointed to the Board on
1 September 2017, Nicola Roxon is
an Independent Director of Dexus
Funds Management Limited, Chair of
the Board Sustainability Committee,
and a member of the Board Nomination
& Governance Committee and Board
People & Remuneration Committee.
Nicola is the Independent Chair of
large superannuation fund, HESTA, and
of the statutory public health agency,
VicHealth. She is also on the board
of the Murdoch Children’s Research
Institute. She is Chair of the Australian
Institute of Health and Welfare (AIHW).
Trained as an industrial lawyer,
Nicola served in the Commonwealth
Parliament for 15 years including
a period as Minister for Health,
and also as Australia’s first female
Attorney‑General. She was a
Non‑Executive Director of ASX
listed housing company, Lifestyle
Communities.
Nicola’s skill set from more than
20 years’ experience in government
and law provides strong insights
into strategy, public policy and
accountability. Her non-executive
career across not-for-profit, unlisted,
government and listed organisations
in the last decade has allowed her to
develop further expertise in ESG, health,
investor relations and remuneration.
Elana Rubin AM
Independent Director
BA (Hons), MA, SF Fin, FAICD
Appointed to the Board on
28 September 2022, Elana Rubin is
an Independent Director of Dexus
Funds Management Limited and Dexus
Wholesale Property Limited, Chair of
the Board People & Remuneration
Committee, and a member of the
Board Nomination & Governance
Committee and Board Risk &
Compliance Committee.
Elana is Chair of the Australian Business
Growth Fund (ABGF) and Victorian
Managed Insurance Authority, and
a Non-Executive Director of Telstra
Corporation. She is also a director
of several infrastructure, private and
social enterprises, and a member of
the Reserve Bank of Australia.
Elana has been a Non-Executive
Director for over 20 years.
She has extensive experience across
technology, financial services, property,
infrastructure and government sectors.
Her non-executive directorships
have spanned listed, unlisted, private
and government companies.
Previous roles include having served
as Chair of Afterpay, Chair of
AustralianSuper and Chair of WorkSafe
Victoria and as a director of Mirvac
and ME Bank. Elana was formerly a
member of the Federal Government’s
Infrastructure Australia Council and
Climate Change Authority, and a
member of the AICD Victorian Council.
Elana brings a strong investor and
stakeholder focus and understands
the positive role well managed real
assets can play to create stronger
communities. She has been a strong
advocate for the benefits of diversity
in the workplace and building strong
cultures to drive performance.
Elana was awarded a Member of the
Order of Australia in 2021 for services to
corporate governance and community.
Dexus 2024 Annual Report
88
Professional
qualifications
9%
Science
55%
Business/
Commerce
(including
Accounting
& Finance)
27%
Other
9%
Law
Tenure
62%
0–3 years
25%
6–9 years
13%
3–6 years
Gender1
43%
Men
57%
Women
Executive Committee
1. Non-Executive directors only.
The Board has appointed an Executive Committee
(ExCo) comprising Dexus’s most senior executives.
The ExCo is responsible for implementing our strategy,
maintaining our high standards of governance, driving
culture and engagement, achieving objectives, and
ensuring prudent financial and risk management
across the Dexus Platform.
Members of the Executive Committee include:
Ross Du Vernet
Group Chief Executive
Officer & Managing
Director
Keir Barnes
Chief Financial
Officer
Melanie Bourke
Chief Operating
Officer
Jonathan Hedger
Chief Investment
Officer
Marjan van der Burg
Chief People
Officer
Nik Kemp
Executive General
Manager, Growth
Markets, commencing
mid-October 2024
Chris Mackenzie
Executive General
Manager, Industrial
Andy Collins
Executive General
Manager, Office
Board composition
Marco Ettorre
Executive General
Manager, Retail
89
Investor information
Financial report
Directors’ report
Governance
Performance
Approach
Overview
Directors' report
Board focus
The main objective of the Board
People and Remuneration Committee
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 Group Chief Executive Officer
and Managing Director (Group CEO)
– Executive Committee (ExCo)
In FY24, the Board and Board People
and Remuneration Committee also
undertook a range of activities relating
to broader people and remuneration
issues including:
– Appointment of the new Group CEO,
the CEO transition and changes to
Board Committee membership
– Approving performance objectives
and Key Performance Indicators
for the Group CEO, Executive KMP
and other executives
– Approving the Inclusion and Diversity
strategic priorities and targets
– Approving the FY24 Fixed
Remuneration parameters for all
Dexus employees and the FY24 Fixed
Remuneration increase budget
– Engaging with key investors and
proxy advisors following the 2023
Remuneration strike and reviewing the
remuneration framework to ensure it
remains fit-for-purpose
– Monitoring the organisational
culture, employee engagement and
corporate culture metrics
– Reviewing talent development
programs and succession planning
– Approving the Purpose Statement
– Approving the Good Leaver Policy
– Approving an increase in base fee for
the Chair
Dexus 2024 Annual Report
90
Remuneration report
Dear Security holder,
On behalf of the Board, I am pleased to
present the Remuneration Report for the
year ended 30 June 2024.
Against the backdrop of a continued
challenging economic environment,
Dexus has remained focused on
strategic execution, maintaining a
resilient balance sheet through asset
recycling and completing the integration
of the AMP Capital platform across real
estate and infrastructure. In addition,
Dexus’s CEO transitioned during the year
from former CEO Darren Steinberg to
Ross Du Vernet.
Despite the tough market conditions,
acknowledging a higher interest rate
environment and a softening in office
market valuations, Dexus continued
to achieve solid outcomes against
key measures that drive the rewards
under our short and long-term incentive
programs for FY24 including:
– Adjusted Funds from Operations
(AFFO) per security of 48.0 cents per
security. This AFFO performance
enabled us to deliver distributions of
48.0 cents per security to our Security
holders, in line with the guidance
set at the start of the year. In a year
where distribution growth has been
negative, the Board has recognised
the impact to Security holders by
awarding an AFFO outcome at
threshold (for meeting guidance). Our
distributions in FY24 were lower than
FY23 predominantly due to lower
trading profits in FY24. AFFO excluding
trading profits was 0.2% above FY23,
demonstrating resilience despite the
headwinds experienced during the
year from valuation declines and
divestments across the platform,
and a higher average cost of debt
– Occupancy in our office and industrial
portfolios remained high at 94.8%
and 96.8%, respectively, due to active
asset management and the quality
and location of our portfolio, along
with strong rent collections at 99.5%.
For our office portfolio, occupancy
exceeded the average Australian
market occupancy of 86.4%, with
average leasing incentives of 27.9%,
below the market average
– Against a soft capital raising
backdrop, we successfully raised
over $300 million of equity at
first close in Dexus Real Estate
Partnership 2 (DREP2), the second
fund in our opportunity series. Of our
flagship funds, 50% outperformed
their benchmarks
– We secured circa $2.9 billion of
divestments across the funds
platform during the year to maintain
strong gearing levels and facilitate
redemption requests to meet
client needs, an important part
of our proposition as a leading
fund manager
– We continued to selectively
divest assets to enhance portfolio
quality and balance sheet strength,
with circa $0.7 billion of balance
sheet divestments announced since
FY23, bringing total exchanged and
settled divestments to $1.7 billion
since FY23
– We continued to make significant
progress on our sustainability
initiatives, with the key highlights
for the year including delivering net
zero1 and 100% renewable energy
purchasing for our managed portfolio,
and significant progress made on our
FY25 sustainability targets. We have
also received external recognition
for our sustainability leadership,
achieving a Dow Jones Sustainability
Indices (DJSI) score within the top 5%
of peers globally and achieving 5 star
Global Real Estate Sustainability
Benchmark (GRESB) outcomes
across six of our Real Estate funds.
Further, we have embedded the
new sustainability strategy within all
funds and asset plans, and finalised
the new Development Sustainability
Standard which will apply across all
new developments from FY25
– In November 2023, we achieved
Final Completion of the AMP Capital
real estate and infrastructure
equity platform acquisition. The
addition of the AMP Capital platform
allows us to offer a broader set
of investment opportunities and
positions us to realise our vision to be
globally recognised as Australasia’s
leading real asset manager. This
was a complex transaction which
required discipline and innovation to
separately complete and integrate.
While we acknowledge that there
were challenges associated with
such a significant structural change,
impacting our FY24 employee
engagement score (against which
there was no vesting), we expect our
initiatives to have a positive impact
from FY25. I would like to thank all our
employees who worked so hard over
many months on this transaction to
ensure its success and full integration
by 31 March 2024, three-months earlier
than our target completion date
These financial and non-financial
outcomes serve as inputs to the
Board’s decision-making when
assessing the appropriateness of
remuneration outcomes.
2023 AGM ‘first strike’
At the 2023 AGM, Dexus received
a ‘first strike’ against its 2023
Remuneration Report with one proxy
advisor recommending a vote ‘against’.
We engaged with a number of investors
in October 2023 following the release
of that report and in the lead up to the
AGM. At that time, investors primarily
expressed concerns about the level
of FY23 incentive outcomes when
compared to financial performance
and Security holder returns, which were
lower than previous years. The only
structural concern raised by investors
related to the inclusion of strategic
measures in the long-term incentive (LTI)
(with some strategic measures also
included in the short-term incentive (STI)).
Following the AGM, we engaged with key
investors and proxy advisors to better
understand their concerns and reviewed
our remuneration framework to ensure it
remains fit-for-purpose in the context of
Dexus’s broader strategy and operations.
Details of our response to the concerns
raised are set out in section 3.
FY24 remuneration outcomes
While no substantial remuneration
framework changes have taken place
in FY24, following substantial changes in
FY23, we have been particularly mindful
of the feedback received following the
2023 AGM in our disclosures this year
and in considering the appropriateness
of incentive outcomes:
– As Dexus continues to intentionally
place a lower weighting on the STI
relative to our A-REIT peers in favour
of a higher weighting to LTI, our STI
opportunities (in dollar amounts) are
low compared to our ASX 100 A-REIT
peers. Based on Executive Key
Management’s (KMP) performance
against their FY24 scorecards, the
Board has approved an incentive
outcome of 44.8% of maximum for
the former CEO, which is 20% lower
than his FY23 outcome in dollar
terms. Other incentive outcomes are
57.6% for the new Group CEO, 0.0%
for the CE, FM and 60.0% for the CFO,
of maximum. Refer to section 5 for
more detail on performance and
STI outcomes
– For the LTI tranches tested on
1 July 2024, the vesting outcomes for
the second tranche of the FY21 LTI
was 58.7% and the first tranche of the
FY22 LTI was 20.0%. Refer to section 5
for more detail on LTI outcomes
1. In line with Climate Active Carbon Neutral Standard for Organisations, net emissions for the year ended 30 June 2024 include offsets
purchased and allocated for retirement during the year and up to the date of this report.
91
Investor information
Financial report
Directors’ report
Governance
Performance
Approach
Overview
– During the year, we conducted
benchmarking of the remuneration
of our Executive KMP. The fixed
remuneration of our CFO was
identified as being below her
ASX 20–100 market peers.
Accordingly, the Board approved
a 6.25% increase in her fixed
remuneration to bring her to market
median. No other Executive KMP
received a fixed remuneration
increase in FY24 (aside from the new
Group CEO, compared to his fixed
remuneration in his previous role
as CIO)
Dexus commitment to
gender diversity and
closing the gender pay gap
Dexus has a clear commitment to
creating a diverse, equitable and
inclusive workplace that reflects our
customers and communities. Our Board
gender diversity target is at least 33%
of non‑executive directorships held
by women by 30 June 2025. For the
organisation, our target is 40:40:20
(40% male, 40% female, 20% any gender)
for senior management and executive
roles for the same period. As at
30 June 2024, women represented 57.0%
of Non‑Executive Directors and 34.2% of
senior management and executive roles.
We recognise that we operate in a sector
where there are still many obstacles
to achieving gender pay equity, and it
remains an ongoing challenge for both
our organisation and the industry. In line
with this, we remain committed to gender
equity and improving the representation
of women across all areas of our business
to address the findings of the WGEA
gender pay report.
Further detail on the work we are doing
to achieve meaningful long‑term
change is included in the Thriving
People section in this Annual Report.
New Group CEO arrangements
As announced at the 2023 AGM, our
long-standing CEO Darren Steinberg
stepped down during the year.
Following an extensive search, which
included both internal and external
candidates, the Board selected our
CIO, Ross Du Vernet to be Group
CEO. He commenced in that role
on 28 March 2024.
His fixed remuneration was set at
$1.5 million per annum, which is 6% lower
than his predecessor, with a maximum
STI of 100% of fixed remuneration and
a maximum LTI opportunity of 200% of
fixed remuneration. This represents a
change in the weighting of the Group
CEO remuneration mix towards a higher
LTI and lower STI. This aligns the new
Group CEO with Dexus’s remuneration
strategy since FY23 to weight our
Executives’ pay mix to the long-term
and create greater alignment with
Security holder interests.
Changes to remuneration for FY25
At the request of our new Group CEO in
2024, the Board undertook a review of
the executive remuneration framework
to ensure it continues to support
Dexus’s ability to attract and retain
key talent to accelerate our next stage
of growth and become Australasia’s
leading real asset manager.
In order to support our strategy of
delivering superior risk adjusted
returns for our investors, the Board has
approved a new LTI plan for FY25. Under
the new plan, our Executives will be
granted market priced Options which
will only have a value where our security
price increases. The new LTI will be
granted in three equal tranches that will
be tested after three, four and five years
– underpinning our focus on generating
superior returns over the long-term.
The Options will only vest where our
Security holders enjoy a minimum level
of total return (distributions plus security
price growth) over the performance
period. This change also results in the
removal of strategic measures from the
LTI measures, addressing an area of
concern raised by investors regarding
the remuneration structure.
Further detail is provided in section 6.4.
KMP changes
The Board wishes specifically to call
out the strong leadership of Dexus over
the past 12 years by Darren Steinberg.
Dexus has changed significantly
under Darren’s leadership as CEO.
Since joining Dexus in 2012, Darren has
been instrumental in growing Dexus’s
total funds under management from
$12.9 billion to $54.5 billion today,
while at the same time enhancing
portfolio quality, diversifying the
platform including into new sectors
such as healthcare, opportunistic
and infrastructure, and developing
a unique set of capabilities across
the platform.
The Board thanks Darren for his
dedication and vision in growing Dexus
over what is an extraordinarily long
period as CEO of an ASX 100 entity.
The Board wishes Darren all the best
for the future and looks forward to
continuing to achieve Dexus’s strategic
and operational goals as part of its
next chapter under the leadership of
Ross Du Vernet, as our new Group CEO.
Following the end of the financial year,
Deborah Coakley, Chief Executive,
Funds Management, stepped down
from her position to pursue other
opportunities. The Board wishes to
thank Deborah for the important role
that she has played in growing Dexus’s
funds management business and the
diversification of our investor base.
Finally, I would also like to thank Penny
Bingham-Hall for her significant
contribution and leadership as Chair
of the People and Remuneration
Committee until her resignation from
the Board, which became effective
28 March 2024.
The Board reaffirms its ongoing
commitment to ensuring Dexus’s
remuneration framework remains
fit‑for-purpose and is strongly aligned
with Dexus’s long-term strategy and
the interests of our Security holders.
We thank all our team for their
commitment and hard work to bring
our strategy to life and deliver value for
our Security holders.
We welcome your feedback on
our remuneration framework and
look forward to your support at our
2024 AGM.
Yours sincerely
Elana Rubin
Chair – People and Remuneration
Committee
Dexus 2024 Annual Report
92
This Remuneration Report forms part of the Directors’ Report and outlines the
remuneration framework and outcomes for KMP in FY24.
This report has been prepared and audited in accordance with section 308(3C) of the Corporations Act 2001.
Contents
1.
Introduction
2. Remuneration snapshot
3. Our response to the ‘first strike’ at the 2023 AGM
4. Company performance
5. FY24 performance and remuneration outcomes
6. FY24 remuneration framework
7. Executive KMP contractual agreements
8. Remuneration governance
9. NED remuneration
10. Statutory disclosures
1. Introduction
1.1 Key Management Personnel (KMP)
In this report, the KMP comprise the officers outlined below, as those individuals having the authority and responsibility for
planning, directing and controlling the activities of the Group, either directly or indirectly. The Group CEO and other Executives
considered KMP are referred to collectively as ‘Executive KMP’ in this report.
Name
Role
Term
Non-Executive Directors
Warwick Negus
Chair
Full year
Penny Bingham-Hall
Director
Part year – until 28 March 2024
Paula Dwyer
Director
Full year
Mark Ford
Director
Full year
Peeyush Gupta
Director
Part year – from 24 April 2024
Rhoda Phillippo
Director
Full year
The Hon. Nicola Roxon
Director
Full year
Elana Rubin AM
Director
Full year
Executive Director and Executive KMP
Ross Du Vernet
Group Chief Executive Officer
& Managing Director (Group CEO)
Full year – CIO until 27 March 2024,
Group CEO from 28 March 2024
Other Executive KMP
Keir Barnes
Chief Financial Officer (CFO)
Full year
Deborah Coakley1
Chief Executive, Funds Management
(CE, FM)
Full year
Former KMP
Darren Steinberg
Executive Director & Chief Executive
Officer (CEO)
Part year – until 27 March 2024
Kevin George
Executive General Manager,
Office (EGM, Office)
Part year – until 3 July 2023
1. Ms Deborah Coakley stepped down from her role as CE, FM on 17 July 2024.
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Financial report
Directors’ report
Governance
Performance
Approach
Overview
2. Remuneration snapshot
2.1 Link between business strategy and remuneration framework
Our Vision
Our Strategy
Our Remuneration Strategy
To be globally recognised as
Australasia’s leading real asset
manager.
To deliver superior risk-adjusted returns
for Dexus Security holders and our
capital partners by owning, managing
and developing quality real estate
and infrastructure assets.
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
We align reward to our strong risk, high
performance, diverse and inclusive culture
Alignment to
performance
We reward for performance aligned to our business
strategy with an emphasis on equity ownership
Market
competitive
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
Dexus 2024 Annual Report
94
2.3 New Group CEO remuneration package
Ross Du Vernet was appointed as Group CEO on 28 March 2024. Mr Du Vernet’s remuneration package, effective from the date
of his appointment, is weighted more heavily to the LTI than his predecessor to ensure his rewards are aligned with Dexus’s
long-term goals and has a heavier weighting on equity (and less on cash) to ensure that his rewards are aligned to Security
holder interests. As a result, his maximum STI opportunity is the lowest of all the ASX 100 A-REIT CEOs.
His remuneration package at the minimum, target and maximum levels of performance are shown below.
Fixed Remuneration (Cash)
STI (Cash)
STI Deferred (Security Rights)
LTI
$1,500k
100% cash
Group CEO (FY24)
$1,500k
$900k
$1,500k
$300k
57% cash
Minimum
(no STI and LTI)
Target
(target STI and
50% LTI vests)1
Maximum
(maximum STI
and LTI vests)
43% equity
$1,500k
$1,125k
$3,000k
44% cash
56% equity
$375k
1. Target LTI figure of 50% is used as a proxy for indicative purposes only.
2.2 Executive remuneration components
Fixed Remuneration (FR)
Short-Term Incentive (STI)
Long-Term Incentive (LTI)
Purpose
Attract and retain
Executives with
the capability and
experience to deliver
our strategy.
Reward for performance against annual
financial and non-financial, Group and
individual objectives.
Align Executives’ focus with the
long-term business strategy to drive
sustained earnings and Security
holder returns.
Link to
remuneration
principles
Fixed remuneration
should be market
competitive.
The STI is designed in a simple and
transparent manner with a focus on
rewarding annual performance, through an
assessment of financial and non-financial
measures. The STI is only awarded where
Executive behaviour standards align to our
culture and values.
Delivery of part of the award in equity places
an emphasis on equity ownership to align
Executives with Security holder interests.
The LTI provides alignment with
long-term performance and is
delivered wholly in equity to align
with Security holder interests.
We reward sustainable
performance by assessing
performance against financial and
non-financial measures.
RTSR: 40%
ROCE: 40%
Strategic:
20%
FY24
outcomes
Only the CFO received
a fixed remuneration
increase – a 6.25%
increase from $800,000
to $850,000 to bring
her fixed remuneration
to market median
compared to her ASX
and A-REIT peers.
See section 2.3 for
more details on the
new Group CEO’s
remuneration package.
All Executive KMP met the behavioural
gateway and were eligible for an FY24 STI.
The STI outcomes as a percentage
of maximum for the Executive KMP for
FY24 were:
– Former CEO: 44.8%
– New Group CEO: 57.6% (pro-rated as
nine-months CIO and three-months as
Group CEO)
– CE, FM: 0.0%
– CFO: 60.0%
See section 5.1 and 5.2 for more detail.
The following LTI tranches were
tested on 1 July 2024:
– The second tranche of the FY21
LTI vested at 58.7%, against the
AFFO per security performance
and ROCE measures
– The first tranche of the FY22
LTI vested at 20.0%, against
the ATSR, ROCE and strategic
measures
See section 5.5 for more detail.
Minimum security holding requirement
Group CEO: 150% of Fixed Remuneration
Other Executive KMP: 75% of Fixed Remuneration
This requirement is to be met within five years of appointment to the Executive Committee (ExCo).
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Financial report
Directors’ report
Governance
Performance
Approach
Overview
2.4 Other Executive KMP pay mix
Set out below is the remuneration mix for the other full-year Executive KMP at target and maximum below.
Fixed Remuneration (Cash)
STI (Cash)
STI Deferred (Security Rights)
LTI
42%
25%
8%
25%
67% cash
Target remuneration mix
33% equity
31%
23%
8%
38%
54% cash
Maximum remuneration mix
46% equity
2.5 Executive remuneration structure
Our FY24 remuneration structure for Executive KMP is outlined below, including the FY24 remuneration framework changes.
Year One
Year Two
Year Three
Year Four
Fixed remuneration
(FR)
Base Salary,
Superannuation
and Other Benefits.
STI
Assessed against
a scorecard
over 12 months,
subject to meeting
a behavioural
gateway.
Cash
(75%).
STI maximum is
100% of FR for all
Executive KMP.
Deferred Security
Rights (25%)
LTI
Performance Rights tested at end of Year Three
against performance measures (50%).
LTI maximum is 200%
of FR for the new
Group CEO or 120%
of FR for other
Executive KMP.
Performance Rights tested at end of Year Four against performance measures (50%).
Payment/Vesting
Dexus 2024 Annual Report
96
3. Our response to the ‘first strike’ at the 2023 AGM
At the 2023 AGM, more than 70% of the votes cast were in favour of our FY23 Remuneration Report as three out of the four
proxy advisors supported our Remuneration Report. However, some external stakeholders raised concerns, particularly
regarding our FY23 incentive outcomes, resulting in a ‘first strike’ against the Report. Following engagement with stakeholders,
we set out below the key concerns raised with the Board and how we have responded.
Concern
Response
Strategic measures
(20% weighting) in
the LTI are perceived
as ‘day job’ activities
and do not have
quantifiable targets
set, with similarities
between measures
under the STI and LTI
As Dexus’s business model is long-term in nature, the introduction of strategic measures in the LTI
in FY22 aimed to focus Executives on achieving our long-term strategy in a sustainable manner.
As FY24 is the first year in which the strategic measures component is tested, we provide detail on
how these are assessed in section 5.5.
The Board will introduce a new LTI framework in FY25, which includes removing the strategic
measure from FY25.
Below market STI
deferral compared
to large ASX‑listed
companies
Dexus currently defers 25% of the STI award for one year. The Board considered this a fair balance
when remuneration was reweighted in FY23 to reduce the STI opportunity of our Executives and
increase the LTI opportunity.
The AFFO component
paid out for lower
year-on‑year
performance at
the threshold level
Each year, the Board sets AFFO targets relative to distribution guidance, with distributions paid
in line with free cash flow, for which AFFO is a proxy. We believe AFFO remains the most relevant
earnings measure in the STI for our sector through the cycle, as it removes the impact of the gains
and losses from revaluations of our assets.
FY23 distribution guidance (50.0–51.5 cents per security) was lower than FY22, considering
anticipated challenging economic conditions in a rising interest rate environment. Guidance
was then updated at the HY23 result, to 51.0–51.5 cents per security. The final AFFO outcome for
FY23 delivered distributions to Security holders above the top end of the range, at 51.6 cents per
security, resulting in a threshold level of vesting. The Board acknowledges that AFFO was lower in
FY23 and FY24, however the results reflect a solid outcome in challenging economic conditions.
As mentioned in the Chair’s Letter, our lower AFFO result in FY24 was primarily due to lower trading
profits, acknowledging the headwinds facing our properties valuations. AFFO excluding trading
profits was 0.2% higher than FY23.
Perceived misalignment
between STI and LTI
outcomes with Security
holder outcomes
For FY23, the STI outcome was 56.0% of the maximum for the former CEO, and 56.0–66.8% of
maximum for other Executive KMP, representing the lowest STI outcome over the past five-year
period, and reflective of lower returns to Security holders.
In FY23, Dexus distributions to Security holders exceeded guidance. Our performance against
guidance, the relative performance of our Funds against industry benchmarks, our performance
against strategic objectives and the generation of strong return on capital employed
underpinned our STI and LTI outcomes for FY23.
For FY24, the STI outcome as a percentage of maximum was 44.8% for the former CEO, 57.6% for
the new Group CEO, 0.0% for the CE, FM and 60.0% for the CFO.
Key achievements contributing to the FY24 outcome were delivering guidance, fund relative
performance against industry benchmarks, delivering on sustainability initiatives, completing the
integration of AMP Capital and a smooth CEO transition.
Non-financial measures
in the STI may represent
‘day job’ responsibilities
The Board believes it is important to holistically assess our Executives’ performance not
only against financial targets, but also against important non-financial measures relating
to sustainability, our people and, last year, the integration of AMP Capital’s real estate and
infrastructure equity platform. The Board strongly believes that all of these measures support our
long-term success and reflect Dexus’s strategic priorities and organisational values.
The Board reviews and sets out the annual STI scorecard having regard to our organisational and
strategic priorities for the coming year. We set robust targets for all our measures in the STI scorecard.
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Approach
Overview
Distribution and AFFO per security v former CEO’s
STI outcome
Our STI outcome for the former CEO in FY24 was 44.8% of
maximum, acknowledging that Mr Steinberg served in the CEO
role for the majority of the year. All STI outcomes FY20-FY24
relate to former CEO, Mr Steinberg.
STI Outcome
Cents per security
100%
80%
60%
40%
20%
0%
FY20
FY21
FY22
FY23
FY24
75¢
60¢
45¢
15¢
30¢
0¢
Distribution and AFFO
per security
CEO’s STI outcome (% of maximum)
Average ROCE v former CEO’s LTI outcome
Our average LTI outcomes over the past three years have
been lower than historic levels, reflecting our lower ROCE
performance during the COVID impacted years and in a higher
interest rate environment. All LTI outcomes FY20–FY24 relate to
former CEO, Mr Steinberg.
LTI Outcome
Average ROCE p.a.
100%
80%
60%
40%
20%
0%
FY20
FY21
FY22
FY23
FY24
10%
8%
6%
4%
2%
0%
ROCE
CEO’s LTI outcome (% of maximum)
4. Company performance
4.1 Historical performance outcomes
The following table outlines Dexus’s historical financial performance. These results flow into scorecard outcomes for the STI and
LTI vesting results.
Five-year financial performance
FY24
FY23
FY22
FY21
FY20
FFO1
($m)
703.4
738.5
757.6
717.0
730.2
AFFO1
($m)
516.3
555.0
572.2
561.7
550.5
Net Profit/(loss) After Tax (NPAT)
($m)
(1,583.8)
(752.7)
1,615.9
1,138.4
927.7
AFFO per security
(cents)
48.0
51.6
53.2
51.8
50.3
AFFO per security growth
(%)
(7.0)
(3.0)
2.7
3.0
0.0
Distribution per security (DPS)
(cents)
48.0
51.6
53.2
51.8
50.3
ROCE
(%)
4.0
8.0
9.7
8.3
9.0
Dexus’s closing security price
($)
6.48
7.80
8.88
10.67
9.20
NTA per security
($)
8.97
10.88
12.28
11.42
10.86
CEO’s STI outcome (% of maximum)2
(%)
44.8
56.0
94.8
100.0
57.0
1. FFO and AFFO is a non-IFRS measure that is unaudited but derived from audited Financial Statements. Please refer to Note 1 Operating Segments
of the financial statements for the disclosure of the basis of the calculations and adjusted items.
2. FY20–FY24 CEO STI outcomes relate to the STI outcomes of former CEO, Darren Steinberg.
Dexus 2024 Annual Report
98
5. FY24 performance and remuneration outcomes
Despite Dexus’s TSR performance and statutory net loss this year, which is largely the result of unrealised net property
valuation losses each year over the below period Dexus has generated strong cash earnings (as measured by AFFO), on which
distributions are based.
FY14
FY15
FY16
FY17
FY18
FY19
FY20
FY21
FY22
FY23
FY24
9.9%
TSR (%)
15.8%
30.3%
10.1%
7.5%
39.4%
(25.7)%
22.0%
(12.3)%
(6.3)%
(11.2)%
-1,000
-500
0
500
1,000
2,000
1,500
-20
20
0
40
60
80
120
100
DPS (cps)
Statutory NPAT ($m)
AFFO ($m)
Statutory NPAT and AFFO ($m)
DPS (cps)
5.1
Former CEO scorecard performance outcomes
In FY24, Executive KMP were assessed against a mix of Group and role-specific KPIs.
At the end of FY24, 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 an STI award in FY24.
Details on the former CEO’s performance against each measure in his scorecard have been provided below, given he was in
the role for the majority of the year. Further detail relating to Mr Steinberg’s outgoing arrangements is set out in section 7.2.
Measure & Rationale
for Inclusion
Weighting
Outcomes Achieved
Assessment
Threshold
Target
Out-
perform-
ance
Group Financial (60%)
(50%)
(100%)
(125%)
Adjusted Funds from
Operation (AFFO) per
security
Key financial measure to
assess the performance
of our overall business.
40%
Dexus’s AFFO for FY24 was 48.0 cents per
security, which was aligned to the Board
approved distribution guidance of
48.0 cents per security for FY24.
Guidance
Guidance
+7%
Guidance
+5%
Threshold
Funds’ performance vs
benchmark hurdle rate or
investment plan objective
To assess our ability
to deliver competitive
returns against our peers.
20%
Of Dexus’s flagship funds, 50%1 of funds
outperformed benchmarks.
50% of funds
outperform
75%+ of funds
outperform
62.5% of funds
outperform
Threshold
1. Represents the number of funds that outperformed benchmark.
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Measure & Rationale
for Inclusion
Weighting
Outcomes Achieved
Assessment
Threshold
Target
Out-
perform-
ance
Group Non-Financial (20%)
(75%)
(100%)
(125%)
Employee engagement
score
To ensure we provide a
workplace that brings out
the best in our people,
helping them grow and
develop their careers.
10%
Our employee engagement score, noting
that this is the first full year of AMP Capital
contribution, was below the threshold for vesting.
As part of the integration, it was anticipated that
there would be challenges associated with such
significant structural change, hence baseline and
targets were set lower than the prior year.
Having now completed the full integration of
the AMP Capital employees during FY24, senior
management has implemented a number of
initiatives to improve employee engagement that
we expect to have a positive impact in FY25.
63%
70%+
66%
Nil outcome
Sustainability impact
& performance
To ensure we maintain
our market-leading
sustainability credentials
and deliver on the
Group’s sustainability
strategy.
10%
Outcomes for FY24 include:
– Dexus has maintained or improved its position
against the GRESB and DJSI benchmarks. It is
ranked in the top 5% of the DJSI benchmark for
the REIT peer group
– Sustainability Development Standards have
been developed for each sector and will apply
across all new developments from FY25
– All Fund Managers are using the approved
Funds Sustainability Action Plan to inform funds
investment plan updates
Full details of achievements can be found in the
Performance section in this Annual Report.
Retain
leadership
position and
majority of
funds have
sustainability
and real
estate asset
plans
Target plus
exceedance
against
plan
Threshold
plus all
funds have
plans and
Standards
launched
Target
Role-specific (20%)
(75%)
(100%)
(125%)
Demonstrates leadership
of key elements of
Dexus’s FY24 strategy
Supporting sustainable
long-term growth
and value creation for
Security holders through
key deliverables.
20%
Outcomes for FY24 include:
– Completing the successful integration of AMP
Capital by March 2024, three-months ahead
of schedule, including the integration into our
platform and completion of transitional services
– Outgoing and incoming CEO transition
arrangements finalised in a timely manner and
implemented smoothly internally and externally
– Infrastructure FUM achieved above threshold.
However, the Real Estate FUM outcome was
below threshold, impacting the final score of
the former CEO’s role-specific KPIs
Between threshold
and target
Former CEO’s outcome (% of target)
56.0%
Former CEO’s outcome (% of maximum)
44.8%
For the new Group CEO, Ross Du Vernet, Group measures from his CIO scorecard were retained for the full year, however,
role specific KPIs were updated to reflect his transition to the Group CEO role and associated deliverables for the last quarter.
The new Group CEO's full year scorecard outcome was 57.6% of maximum (pro-rated as nine-months CIO and three-months
as Group CEO).
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100
5.2 Other Executive KMP role specific KPI outcomes
While the financial and non-financial measures outlined in relation to the former CEO in section 5.1 apply in most instances
to the other Executive KMP, each role has some variation to role-specific performance measures which have resulted in
differentiated STI outcomes in FY24.
A summary of performance against the additional measures applying to various other KMP is set out below.
Measure
Outcomes
Description of performance outcome
Infrastructure fund
performance vs benchmark
Target
75%1 of Dexus’s infrastructure flagship funds outperformed the
benchmark, which met our target set at the start of the year.
Real Estate fund
performance vs benchmark
Nil
40%1 of Dexus’s real estate flagship funds outperformed their
benchmark. Of the funds that did not outperform benchmark,
the two listed REITs DXI and DXC (40% of real estate flagship
funds) still performed strongly overall and were within the Top
8 A-REIT 300 Index performers during the year. However, the
overall result relative to benchmarks was below the minimum
threshold set at the start of the year, resulting in no vesting
against this measure.
Development metrics
Target
Strong development leasing outcomes have been achieved,
particularly at DWPF's 33 Alfred Street, Sydney and the
Jandakot and Ravenhall Industrial estates held by Dexus and
funds. Opportunities have also been identified which have the
potential to deliver trading profits in FY25.
Finalisation of operating
model changes
Outperform
We successfully implemented our finance operating model
on time and within budget, in line with the AMP Capital
platform integration. We made changes to restructure various
divisions to enhance business partnering and efficiencies in
our business.
1. Represents the number of funds that outperformed benchmark.
5.3 FY24 STI remuneration outcomes
The FY24 performance assessment resulted in the Board awarding the former CEO 44.8% of the maximum STI in FY24, which
is 20% lower than his FY23 outcome in dollar terms ($896,000 vs $1,120,000). The new Group CEO was awarded 57.6% of
maximum and other Executive KMP outcomes were 0.0% and 60.0% of maximum STI. As Ms Coakley stepped down from her
role on 17 July 2024 to pursue another opportunity with a competitor, she was not eligible to receive an FY24 STI under Dexus’s
leaver provisions.
Executive KMP
STI target
% of FR
STI max
% of FR
Actual FY24
STI awarded
$
% of target
STI awarded
% of
maximum
STI
awarded
% of
maximum
STI
forfeited
Ross Du Vernet1
80.0%
100.0%
608,484
72.0%
57.6%
42.4%
Keir Barnes
80.0%
100.0%
510,000
75.0%
60.0%
40.0%
Deborah Coakley2
80.0%
100.0%
0
0.0%
0.0%
100.0%
Former KMP
Darren Steinberg
100.0%
125.0%
896,000
56.0%
44.8%
55.2%
1. As Ross Du Vernet was appointed to the Group CEO role on 28 March 2024, his FY24 STI has been apportioned between the period served in his
Group CEO and CIO roles.
2. In alignment with STI Plan rules, Deborah Coakley received an STI outcome of 0% following her resignation.
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5.4 LTI awards which vested at the beginning of FY24
On 1 July 2023, the second tranche of the FY20 LTI plan and the first tranche of the FY21 LTI plan were eligible for vesting for
participating Executive KMP. Consistent with disclosures in last year’s Report, the LTI vesting outcomes are materially lower
than our pre-COVID LTI outcomes due to the adverse impact of COVID and a higher interest rate environment on AFFO
performance and ROCE performance.
FY20 LTI Vesting Outcome
Results of each performance measure within tranche 2 of the FY20 LTI plan over the four-year performance period were:
Performance measure
Weighting
Minimum
(50% vests)
Maximum
(100% vests)
Group
result
Vesting
outcome
Amount
forfeited
AFFO per security performance
50.0%
3.5%
4.5%
1.1%
0.0%
100.0%
Average ROCE
50.0%
8.5%
9.0%
8.8%
75.0%
25.0%
Vesting outcome
37.5%
62.5%
FY21 LTI Vesting Outcome
For the FY21 LTI, given AFFO performance targets were set lower than historical targets, only 25% of the AFFO performance portion
vests where minimum is achieved. ROCE continues to vest at 50% where minimum is achieved, consistent with prior years.
Results of each performance measure within tranche 1 of the FY21 LTI plan over the three-year performance period were:
Performance measure
Weighting
Minimum
(25% (AFFO)/
50% (ROCE)
vests)
Maximum
(100% vests)
Group
result
Vesting
outcome
Amount
forfeited
AFFO per security performance
50.0%
0.0%
3.0%
1.9%
72.0%
28.0%
Average ROCE
50.0%
7.0%
8.0%
8.6%
100.0%
0.0%
Vesting outcome
86.0%1
14.0%
1. For the former EGM, Office, Mr Kevin George, 50% of his FY21 LTI was subject to a service component and the remaining 50% was assessed against
the evenly weighted measures of AFFO per security performance and ROCE. His LTI outcome for tranche 1 of the FY21 LTI was 93%.
Dexus 2024 Annual Report
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5.5 LTI awards which vest in FY25
On 1 July 2024, the second tranche of the FY21 LTI plan and first tranche of the FY22 LTI plan were eligible for vesting for
participating KMP.
FY21 LTI Vesting Outcome
Results of each performance measure within tranche 2 of the FY21 LTI plan over the four-year performance period were:
Performance measure
Weighting
Minimum
(25% (AFFO)/
50% (ROCE)
vests)
Maximum
(100% vests)
Group
result
Vesting
outcome
Amount
forfeited
AFFO per security growth
50.0%
0.0%
3.0%
0.7%
42.4%
57.6%
Average ROCE
50.0%
7.0%
8.0%
7.5%
75.0%
25.0%
Vesting outcome
58.7%1
41.3%
FY22 LTI Vesting Outcome
Results of each performance measure within tranche 1 of the FY22 LTI plan over the three-year performance period were:
Performance measure
Weighting
Minimum
(50% vests)
Maximum
(100% vests)
Group
result
Vesting
outcome
Amount
forfeited
Average ROCE
40.0%
7.5%
9.0%
7.2%
0.0%
100.0%
ATSR
40.0%
6.0%
9.0%
-10.3%
0.0%
100.0%
Strategic measures
20.0%
N/A
N/A
100.0%
100.0%
0.0%
Vesting outcome
20.0%
80.0%
1. For the former EGM, Office, Mr Kevin George, 50% of his FY21 LTI was subject to a service component and the remaining 50% was assessed against
the evenly weighted measures of AFFO per security performance and ROCE. His LTI outcome for tranche 2 of the FY21 LTI was 73.1%.
Given the LTI awards are granted in equity, the value of the vested awards for tranche 1 of the FY22 LTI are significantly lower
than their grant value, linking executive reward to the Security holder experience. For tranche 1 of the FY22 LTI, the vested
value for each participant was equivalent to 25% of their initial grant value, due to lower vesting outcomes and alignment with
security price performance.
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Performance
Approach
Overview
Following annual progress updates of performance against the strategic focus areas provided below, a detailed formal
assessment, for the end of the first three-year performance period, is now provided. The Board conducted a robust
assessment of management’s performance against strategic targets set at the start of the performance period and based on
these targets, it believes that management has executed on the multi-year targets set. Given the strategic measures comprise
20% of the LTI award, it is noted that this component forms a small portion of the overall FY22 award, with the majority being
assessed against financial measures. The Board note that while the LTI financial measures have not been met, management’s
performance against strategic objectives is positioning Dexus to enhance financial returns to Security holders beyond the
three year measurement period. The Board also note that while LTI strategic measures were met, some non-financial measures
within the STI scorecard were not met this period. The Board have sought to achieve balanced remuneration outcomes that
align with the Security holder experience.
Category
Description
Key achievements
Funds Management
Diversification of
capital partners and
investor base, and
overall growth in Funds
Management.
– Since FY21, funds under management has grown by $12.0 billion or 28.2%
and diversified further in terms of sector exposure and investor type, with
infrastructure being added on to the platform as a result of the AMP
transaction and >6,500 registered unitholders added on to the platform
– Dexus has raised $4.6 billion in new equity through DRPs across its
platform over this period
– Over this period Dexus opened its Singapore office to support the
growth of the funds management business in Asia. This aims to attract
international capital partners to invest in Australasian real assets
– During the period, Dexus successfully completed the acquisitions and
onboarding/integration of the APN Property Group and AMP Capital
funds platforms, both of which materially expanded and diversified the
funds business. These transactions involved substantial time and effort to
complete and integrate
– Following the acquisition of APN Property Group, Dexus established a
$1.3 billion joint venture to acquire Jandakot Airport industrial precinct
alongside Dexus Industria REIT (DXI) and later introduced Cbus Super into
the joint venture. The transaction was transformational for DXI, which was
part of the former APN platform, introducing new investors to its register
and enhancing the quality of its portfolio
– Dexus has successfully closed its first funds in the opportunistic and
infrastructure sectors during the period. During FY22, Dexus secured
the first investments and cornerstone investor for the first fund in its
opportunistic series, DREP1, which had been launched the prior year.
DREP1 raised $475 million of equity with circa 90% committed across the
real estate subsectors, including credit opportunities. Dexus has also
raised over $300 million in equity commitments at first close in DREP2,
which is expected to be materially larger than DREP1. During FY23,
Dexus launched its first infrastructure fund, the Wholesale Airport Fund,
and raised $185 million in equity, above its $130 million target
Transactions
Strategic acquisitions
and divestments of
assets across the Dexus
investment portfolio.
– Since FY21, amidst a challenged transactions market, Dexus has divested
$12.6 billion and acquired $7.6 billion for its platform portfolio, of which the
Dexus investment portfolio accounted for $6.9 billion of divestments and
$3.1 billion of acquisitions
– Major Dexus divestments include office properties located at:
44 Market Street, 1 Margaret Street, 5 Martin Place, 383–395 and
309–321 Kent Street in Sydney, 130 George Street in Parramatta,
8 Nicholson Street in East Melbourne, Axxess Corporate Park in Mount
Waverley, as well as 12 Creek Street in Brisbane. As a result of these
divestments, the quality of Dexus’s investment portfolio has improved,
with the office portfolio weighting to Premium grade assets increasing
from 31% to 55%. The divestments have also enabled balance sheet
strength to be maintained despite the impact of material property
devaluations during the period, with pro forma gearing (look-through) of
32.0% at 30 June 2024 at the lower end of the 30–40% target range
– The divestments undertaken on behalf of fund clients across a number
of funds helped to maintain strong gearing levels despite the impact of
valuation declines during the period, as well as facilitating redemption
requests to meet client needs, an important part of Dexus’s positioning
as a leading fund manager
– As mentioned above, during the period Dexus successfully completed
the strategic corporate acquisitions of the APN Property Group and
AMP Capital funds platforms, both of which materially expanded
and diversified the funds business. It also completed the complex
$1.3 billion acquisition of Jandakot Airport industrial precinct, entering
the WA industrial market and creating a truly national offering for its
industrial customers
Dexus 2024 Annual Report
104
Category
Description
Key achievements
Developments
Progressing the Group
development pipeline.
– Since FY21, Dexus has completed $4.8 billion of developments across the
platform, further enhancing the quality of the platform portfolio
– $1.3 billion developments were completed within the Dexus portfolio,
including 123 Albert Street, Brisbane, which is fully leased, 25 Martin
Place, Sydney and more than $500 million of industrial development
completions
– Dexus continues to progress city shaping developments Atlassian Sydney
and Waterfront Brisbane, as well as 150,400 square metres of industrial
development within its committed pipeline
Sustainability
To be globally
recognised as a
sustainability leader
in our industry.
– External recognition for leadership includes one of only two ASX
companies that fully met Climatework’s principals for credible net zero1
targets and action and being included in the Financial Times and Statista
Asia-Pacific Climate Leaders list for 2024
– Dexus has achieved net zero1 emissions for building operations across the
group’s managed portfolio since FY22, eight years ahead of the original
target of 2030, and transitioned to 100% of electricity sourced from
on-site and off-site renewable sources
– Delivered improvements in sustainability performance of office operating
assets, measured through portfolio average NABERs ratings, with Waste
improving from 2.7 to 3.5 stars and Indoor Environment from 4.7 to 5.2 stars
– Delivered world leading sustainability outcomes in developments with
6 Star Green Star ratings for Horizon 3023, Ravenhall (industrial), Quay
Quarter Tower (office) and North Shore Health Hub (healthcare)
– The Dexus Sustainability strategy has been refreshed and embedded
within all funds and asset plans, and we have finalised the new
Development Sustainability Standard which will apply across all new
developments from FY25
5.6 One-off retention awards vested in FY24
In December 2023, 50% of the one-off retention awards granted to the CIO and CE, FM vested. These awards were granted
in December 2020 to secure our senior leadership talent during a volatile period for the Real Estate sector during COVID and
were successful in doing so during this period. The remaining 50% is due to vest in December 2024 for Ross Du Vernet, subject
to continued service. As Deborah Coakley stepped down from her role on 17 July 2024, her final tranche of the retention award
will be forfeited. No new one-off retention awards have been granted by the Board.
As these awards were granted in equity to provide alignment with Securityholders, the value of the awards vested are lower
than the original grant value, as shown in the table below. This reflects the link between the value of the awards and Security
holder experience.
Allocation
price per
Right
(14 December
2020)
Total value
at grant
date
Security
price at
vesting
date
(14 December
2023)
Total
value at
1st vesting
date
(14 December
2023)
Change
in value
between
grant and
1st vesting
date
Value of
Rights
vested (50%
vested on
14 December
2023)
Ross Du Vernet
$9.77
$1,500,000
$7.70
$1,181,796
(21%)
$590,898
Deborah Coakley
$9.77
$1,500,000
$7.70
$1,181,796
(21%)
$590,898
The one-off retention award granted to the former CEO in 2021 was not due to vest in FY24. See section 7.2 for further details
on his outgoing arrangements.
1. In line with Climate Active Carbon Neutral Standard for Organisations, net emissions for the year ended 30 June 2024 include offsets
purchased and allocated for retirement during the year and up to the date of this report.
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Overview
5.7 Actual remuneration based on performance and service through FY24
These values differ from the Executive statutory remuneration table (provided in section 10.1), which has been prepared in
accordance with statutory requirements and accounting standards. The table below is not measured in accordance with the
Australian Accounting Standards and has been provided to disclose the actual value of remuneration received in FY24.
Incentive awards have been calculated as follows:
– Deferred STI vested – The value of the deferred STI from prior years that vested on 1 July 2023 (being the number of Security
Rights that vested multiplied by the volume weighted average price (VWAP) for the five days prior to the vesting date)
– LTI vested – The value of Performance Rights that vested in relation to the LTI on 1 July 2023 (being the number of
Performance Rights that vested multiplied by the VWAP for the five days prior to the vesting date)
– One-off retention awards vested – The value of Rights vested on 14 December 2023 (being the number of Rights that
vested multiplied by the VWAP for the five days prior to the vesting date)
Executive
KMP
Base
salary
($)
Super-
annuation
benefits
($)
Non
monetary
benefits
($)
STI
cash
payment
($)
Deferred
STI
vested
($)
KTEP1
vested
($)
LTI
vested
($)
One-off
retention
awards
vested
($)
Total
($)
Ross Du
Vernet
1,027,363
27,399
2,244
387,501
204,309
N/A
257,375
569,446
2,475,637
Keir Barnes
822,601
27,399
4,938
336,000
109,509
60,723
N/A
N/A
1,361,170
Deborah
Coakley
872,601
27,399
8,374
350,000
201,090
N/A
244,705
569,446
2,273,615
Former KMP2
Darren
Steinberg3
1,164,412
20,287
11,658
840,000
421,522
N/A
1,098,162
N/A
3,556,041
1. The Key Talent Equity Plan (KTEP) is a mid-term incentive plan, granted to identified Executives before becoming KMP, which aims to retain
individuals identified as key talent and further align them to the interests of Dexus and its investors through an 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.
2. As Kevin George ceased employment as EGM, Office on 3 July 2023, he received salary for one day of work during FY24.
3. Darren Steinberg stepped down from his CEO role on 27 March 2024. His base salary, superannuation benefits and non-monetary benefits have
been pro-rated up to this date.
6. FY24 remuneration framework
6.1 Fixed remuneration strategy
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 ASX20–100 companies
for directly comparable roles, as well as other large ASX A-REIT peers for relevant roles.
In FY24, our CFO received a fixed remuneration increase from $800,000 to $850,000 following a market benchmarking exercise
of her ASX 20–100 peers. This adjustment is in line with our policy of paying market competitive remuneration to our Executives.
Mr Du Vernet’s remuneration was adjusted upon his promotion to the Group CEO role.
The FY24 fixed remuneration levels as at 30 June 2024 for full-year Executive KMP are set out below:
Executive KMP
FY24
contractual
fixed
remuneration
($)
Ross Du Vernet
1,500,000
Keir Barnes
850,000
Deborah Coakley
900,000
Dexus 2024 Annual Report
106
6.2 Short-Term Incentive (STI)
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
aligned to our values
– Setting scorecard measures and targets aligned to our budgets and strategic goals for the financial year
– Mandatory deferral of 25% of each STI award into Security Rights deferred for one year, acting as a retention mechanism
and providing further alignment with Security holder interests
Group/Divisional and
role-specific performance
against financial
and non-financial
performance measures
Individual STI Outcome
(Capped at 100% of
Target)
Fixed Remuneration
STI Target
Group/Divisional
AFFO, Fund performance vs benchmarks, employee
engagement and sustainability targets.
Role-specific
Financial and non-financial measures pertaining
to the individual’s specific role responsibilities.
Cash Annual cash payment (75%)
Equity Deferred Security Rights (25%), deferred for one year
Each Executive KMP is awarded an individual STI outcome between zero and 100% of their target.
Individual STI outcomes are based on a mix of Group/divisional performance measures and individual KPIs, subject to meeting a behavioural gateway.
The target STI opportunity for all Executive KMP is 80% of FR (excluding the former CEO), which is intentionally lower than our ASX 100 A-REIT peers.
The additional terms for 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 which includes no material financial misstatement and no actions
inconsistent with the commercial or ethical standards expected by the Board or our stakeholders.
This seeks to align Executive KMP performance with Dexus’s values and expectations of Executives.
Scorecard assessment
Group/Divisional performance is measured against a scorecard comprising of Group/divisional and
role-specific measures. See section 5.1 and 5.2 for disclosure on FY24 measures.
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
If a participant is classified as a Bad Leaver (i.e. termination for cause, resignation or other
circumstances determined by the Board), all Security Rights will be forfeited and there will be no
entitlement to an STI award for the year in which employment ceases.
Where the participant is a Good Leaver, they will continue to be entitled to their Security Rights
from previous years which will be released at the end of the restriction period and to a pro-rated STI
award for the part of the current financial year they are employed.
The Board may vary the classification of the individual’s leaver status, between cessation of
employment and the release of awards, for example where the individual accepts an offer of
employment with a competitor during the contractual non-compete period or misconduct events
are discovered after cessation of employment.
Malus provisions
The Board has the discretion to adjust STI outcomes upward or downward, including to zero, where:
– There is any misalignment between the Executive KMP’s conduct or 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
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6.3 Long-Term Incentive (LTI)
The LTI plan is aligned to Security holders’ interests in the following ways:
– Encourages Executives to make sustainable business decisions by assessing financial and non-financial performance
– Aligns the financial interests of Executives participating in the LTI Plan with Security holders through exposure to
Dexus Securities
Equity
40% RTSR
40% Average ROCE
20% Strategic
(financial and non-financial)
Individual LTI Outcome
(Capped at 100% of
Opportunity)
Fixed Remuneration
LTI Opportunity
– Performance Rights with
allocation calculated at
Face Value
– 50% three-year Performance Period
– 50% four-year Performance Period
– Subject to behavioural standards
being met, performance hurdles
and continued employment during
the vesting period
Relative Total Security Holder
Return (RTSR)
Average Return on Contributed
Equity (ROCE)
Strategic measures
(financial and non-financial)
Each Executive KMP is allocated an LTI opportunity subject to performance hurdles. The award may vest between 0% 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 new Group CEO is 200% of Fixed Remuneration, and for other Executive KMP is 120% of Fixed Remuneration
(excluding the former CEO).
40%
40%
20%
The additional terms of the LTI plan are outlined below.
Term
Detail
Performance
measures and
vesting schedule
RTSR (40%)
RTSR has been selected to assess our ability to deliver Security holder returns relative to our industry
peers. RTSR is measured by assessing Dexus’s TSR against the TSR of each company in the ASX 200
A-REIT peer group, with distributions considered to be reinvested over the three and four-year
performance periods. Noting a level of correlation between A-REIT peers, the Board considers a
3% per annum return above the index over three and four years to constitute material outperformance
against our A-REIT peers.
Vesting schedule
Performance target
(50% of Rights tested
after three years)
Performance target
(50% of Rights tested
after four years)
Vesting outcome
Below Threshold
Performance
Below the Index
Below the Index
0%
Threshold performance
Equal to the Index
Equal to the Index
50%
Between Threshold
and Outperformance
Between the Index
and Index + 9%
Between the Index
and Index + 12%
Straight-line
pro-rata vesting
Outperformance
Index + 9% or greater
Index + 12% or greater
100%
Dexus 2024 Annual Report
108
Term
Detail
Performance
measures and
vesting schedule
continued
Average ROCE (40%)
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, in
accordance with our risk appetite.
ROCE is measured as simple average ROCE, 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 three and four-year performance periods. The 7–10% ROCE target has been set
within a ‘through the cycle’ range to cover various stages of the property cycle. This aims to increase
consistency and simplify our annual approach to target setting, noting that this range will still be
regularly reviewed by the Board.
Vesting schedule
Performance target
Vesting outcome
Below Threshold Performance
<7% p.a.
0%
Threshold performance
7% p.a.
50%
Between Threshold
and Outperformance
7–10% p.a.
Straight-line pro-rata
vesting
Outperformance
>10% p.a.
100%
Strategic (financial and non-financial) (20%)
Strategic measures continue to comprise a portion of the LTI to ensure management remains focused
on Dexus’s long-term growth ambitions. These measures have been set in relation to the following
areas of focus:
– Funds Management: The diversification of capital partners and investors, and overall growth
in funds management
– Transactions: Strategic acquisitions and divestment of assets across the Dexus investment portfolio
– Developments: Progressing the Group development pipeline
– Sustainability: To be globally recognised as a sustainability leader in our industry
While some of these measures appear to overlap with some of our STI measures, the LTI’s strategic
measures are assessed over a multi-year timeframe in line with our long-term strategy as opposed
to over one year in the STI which is focused on the annual activities that underpin achievement of our
long-term strategy.
From FY25, strategic measures will no longer be part of the LTI.
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
If a participant is classified as a Bad Leaver (i.e. termination for cause, resignation or other
circumstances determined by the Board) all Performance Rights will be forfeited, subject to the Board’s
discretion to determine otherwise.
Where the participant is a Good Leaver, unvested Performance Rights will remain on-foot to be
tested at the end of the original performance period, subject to the Board’s discretion to determine
otherwise. The Board may vary the classification of the individual’s leaver status, between cessation
of employment and the vesting of awards, for example where the individual accepts an offer of
employment with a competitor during the contractual non-compete period or misconduct events are
discovered after cessation of employment.
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 Executive KMP’s performance or conduct, 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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6.4 Changes to FY25 Executive KMP remuneration arrangements
As disclosed in the Chair’s Letter, to support Dexus’s ambition to be globally recognised as Australasia’s leading real asset
manager, changes to our LTI framework will be made in FY25 to align executive reward with our long-term horizons and the
delivery of Security holder returns.
The key changes are:
– Market priced Options will replace the use of Performance Rights. These Options will only have a value to Executives where
our security price is above the exercise price. The Options will be allocated at the fair value of the Options externally
calculated at that time using a recognised Option valuation methodology. The exercise price determination will be
disclosed in the 2024 Notice of Meeting
– The performance period will be extended to up to five years (from up to four years currently) as we seek to align executive
reward to a longer-term horizon. The Options will be eligible to vest in three equal tranches after three, four and five years.
Options may be exercised during the two years following vesting
– The Options will only vest when a performance gateway is met related to minimum level of annual TSR (security price growth
targets plus distributions), to align executive reward with the delivery of Security holder returns
The introduction of a new LTI plan aims to support Dexus’s ability to attract and retain talent from the infrastructure and
investments space to execute its strategy, while only providing rewards where Dexus security price grows over the relevant
performance period.
Further detail will be provided in the resolution to approve the grant of the Group CEO’s LTI in the 2024 Notice of Meeting.
In addition, the CFO’s target STI opportunity will increase from 80% of FR to 90% of FR in FY25, after benchmarking data
indicated that her target STI was at the lower end of her ASX 100 A-REIT peers. The Board has approved this greater STI
opportunity to enhance the competitiveness of her overall remuneration package.
7. Executive KMP contractual agreements
7.1 Terms of Executive KMP service agreements
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.
New Group CEO
Other Executive KMP
Employment
agreement
An ongoing Executive Service Agreement.
An ongoing Executive Service Agreement or
individual contract.
Termination by the
Company or by
Mutual Agreement
Six-month notice period. The Group may choose
to place the Group CEO on leave or make a
payment in lieu of notice at the Board’s discretion.
Three-month notice period. The Group may
choose to place the Executive on leave or make a
payment in lieu of notice at the Board’s discretion.
Resignation by
the Executive
Six-month notice period. The Group may choose
to place the Group CEO on leave or make a
payment in lieu of notice at the Board’s discretion.
Three-month notice period. The Group may
choose to place the Executive on leave or make a
payment in lieu of notice at the Board’s discretion.
Termination by the
Group with Cause
No notice or severance is payable. All unvested incentive awards are forfeited.
Leaver Treatment
of Incentives
If a participant is a Bad Leaver (i.e. termination for cause, resignation or other circumstances
determined by the Board) all Security Rights granted under the STI plan and all unvested Performance
Rights under the LTI plan will be forfeited.
Where the participant is a Good Leaver, they will continue to be entitled to their Security Rights at the
end of the restriction period under the STI plan and any unvested Performance Rights granted under
the LTI plan will remain on-foot to be tested against the applicable performance conditions at the end
of the performance period.
The Board retains overarching discretion to determine an alternate treatment and to vary the
classification of the individual’s leaver status, between cessation of employment and the vesting/
release of awards.
Change of
Control treatment
of Incentives
Currently, in a change of control scenario:
– Unvested LTI Performance Rights would vest and be settled in cash, provided the change of control
event occurs three months or more from the issue date of the Rights. If the change of control event
occurs less than three months from the issue date, all unvested Performance Rights granted in that
three-month period lapse
– For LTI grants from FY24 onwards, any vested but unexercised Performance Rights would be required
to be exercised during a period post-vesting, specified by the Board
– Unvested STI Security Rights would vest and be settled in cash
The rules of the new LTI Option plan are being finalised. Details regarding the treatment on change of
control will be disclosed in the 2024 Notice of AGM.
Dexus 2024 Annual Report
110
7.2 Outgoing arrangements of Darren Steinberg
Darren Steinberg stepped down from his CEO role on 27 March 2024 and no longer held a KMP role after this date, however
he will remain employed with the Group until December 2024 to assist Ross Du Vernet in completing a smooth Group CEO
transition. Given Mr Steinberg ceased employment via termination by mutual agreement, he will continue to be paid during this
period of gardening leave, noting he has a 12-month notice period. The Board considers this to be appropriate to ensure that
Mr Steinberg is not available to be engaged by our competitors during this period.
Any termination benefits provided to Mr Steinberg are to comply with the one times base salary cap limit as defined by the
Corporations Act 2001 (Cth).
As a Good Leaver, he received his statutory entitlements, and the treatment of his on-foot incentive awards are as follows:
– A full-year FY24 STI award will be received given he will be employed until December 2024. This will be received in cash (75%)
and deferred Security Rights (25%). He will not be eligible to receive an FY25 STI award
– Deferred STI Security Rights to remain restricted until the end of the normal restriction period
– Unvested LTI Performance Rights were left on-foot to be tested in the ordinary course. He will not be eligible to receive an
FY25 LTI grant; and
– The one-off Incentive Award granted to Mr Steinberg in June 2021 vested on 1 July2024. This award was designed to:
– Ensure Mr Steinberg continued to lead Dexus through the COVID-19 pandemic and to provide leadership stability over
the three-year period to allow for the eventual CEO succession process to commence
– Reward the CEO for the successful delivery of a number of key strategic initiatives over the three-year period
– The Board has determined that the strategic performance conditions of Mr Steinberg's one-off Incentive Award have been
satisfied, including successfully:
– Navigating the changes to the office market, with office occupancy remaining strong over this period despite the
challenging environment
– Maintaining a leading position in ESG and continuing to make significant progress on sustainability initiatives
– Diversifying our capital partners and investors and achieving overall growth in funds management. Total third party
funds under management has increased by 28.2% and Dexus’s sector exposure has increased to retail, infrastructure and
alternatives over the past three-years
– Completing the strategic acquisition and divestment of assets across the Dexus investment portfolio such as the
successful completion of the AMP Capital and Jandakot acquisitions and the execution of $6.9 billion of balance
sheet divestments
– Progressing the group development pipeline by completing $4.8 billion in developments over the past three years,
including $1.3 billion being completed within the Dexus portfolio
Gardening leave was granted for the period from March 2024 to December 2024. Mr Steinberg will receive his base salary
and entitlements during this leave period, totalling $1,238,840.
7.3 Outgoing arrangements of Kevin George
Kevin George ceased employment with the Company on 3 July 2023 and was determined to be a Good Leaver. He received
his statutory entitlements and his unvested LTI Performance Rights were left on-foot to be tested in the ordinary course. He
was not entitled to an FY24 STI award.
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8. Remuneration governance
The diagram below displays the interaction between the Board, Committees, management and external advisors, when
discussing remuneration strategy, framework and outcomes.
People &
Remuneration
Committee*
Board
Audit
Committee
Risk
Committee
Management
Independent
external
advisors
Board
Approves and has oversight of Dexus’s Remuneration Policy, NED and
Executive KMP remuneration and culture indicators.
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
Proposes Executive appointments, succession plans, policies,
remuneration structures and remuneration outcomes to the PRC for
review and approval or recommendation to the Board.
Independent external advisors
The Board’s independent remuneration advisor, SW Corporate,
was engaged to provide benchmarking data, market practice
information and advice on the remuneration framework in FY24.
SW Corporate did not make any remuneration recommendations
in FY24.
Audit Committee
Reviews the calculation of financial performance incentive plans.
*
Members: Elana Rubin, The Hon. Nicola Roxon, Paula Dwyer and Warwick Negus.
Dexus 2024 Annual Report
112
8.1 People and Remuneration Committee Responsibilities
The People and Remuneration Committee (PRC) is responsible for developing the remuneration strategy, framework and
policies for NEDs, Executive KMP and the Executive Committee (ExCo) 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, other
ExCo members and all other Dexus employees
– Reviewing and approving the Group Scorecard, annual performance objectives and KPIs for the Group CEO, Executive KMP
and other ExCo members
– Recommending to the Board for approval Group CEO, Executive KMP and other ExCo members’ base salary increases and
annual incentive payments
– Reviewing, overseeing and approving aggregate base salary increases and annual incentive payments for all employees
(other than the Group CEO, Executive KMP and other ExCo members)
– Reviewing and recommending to the Board any Director fee changes, including proposals regarding the Directors’ fee cap
– 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 diversity (including beyond gender) 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
8.2 Meetings
The PRC is required to meet at least four times per year. In FY24, the PRC met seven 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.
8.3 Remuneration decision making
For remuneration concerning the Executive KMP, the new Group CEO's input was sought to help guide discussions and provide
input on performance throughout the year. The new Group 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
ExCo members or require a forfeit of unvested Security Rights or Performance Rights issued under the Dexus LTI or STI Plans
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9. 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 2024 remained within the aggregate fee pool of $2,500,000
per annum, which was approved by Security holders at the AGM in October 2017.
9.1 Fee structure
The Board fee structure (inclusive of statutory superannuation contributions) for FY24 is provided below. The only change to
FY24 fees was a 3% increase to the Board Chair fee from $475,000 to $490,000 following a market benchmarking exercise
against the ASX 20-100, to ensure ongoing market competitiveness to the median of our peers.
Chair
($)
Member
($)
Base fees
490,0001
178,500
Risk Committee
35,700
17,850
Audit Committee
35,700
17,850
Nomination Committee2
N/A
N/A
People and Remuneration Committee
35,700
17,850
Sustainability Committee
35,700
17,850
DWPL Board
N/A
50,000
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 FY24.
9.2 Minimum security holding requirement
NEDs are expected to hold the equivalent of 100% of their base fees in Dexus Securities, to be acquired over five years from
their appointment date.
9.3 Security movements
The table below outlines the movement in NED security holdings for FY24.
NED
Number of
Securities held at
1 July 2023
Movement
Number of
Securities held at
30 June 2024
Warwick Negus1
50,000
10,000
60,000
Penny Bingham-Hall2
32,773
–
32,773
Paula Dwyer3
25,000
–
25,000
Mark H Ford4
17,339
–
17,339
Peeyush Gupta5
–
–
–
Rhoda Phillippo6
2,500
7,500
10,000
The Hon. Nicola Roxon7
25,669
–
25,669
Elana Rubin AM8
18,348
9,480
27,828
1. Mr Warwick Negus was appointed to the Chair role on 27 October 2022 and has met the MSR.
2. Ms Penny Bingham-Hall was a Director until 28 March 2024. Her security holding is shown until 28 March 2024.
3. Ms Paula Dwyer was appointed as a Director on 1 February 2023 and has met the MSR.
4. Mr Mark Ford was appointed as Director on 1 November 2016 and has met the MSR.
5. Mr Peeyush Gupta was appointed as a Director on 24 April 2024 and is within the five-year timeframe to meet the MSR. His security holding on the
commencement date is shown.
6. Ms Rhoda Phillippo was appointed as a Director on 1 February 2023 and is within the five-year timeframe to meet the MSR.
7. The Hon. Nicola Roxon was appointed as a Director on 1 September 2017 and has met the MSR.
8. Ms Elana Rubin was appointed as a Director on 28 September 2022 and has met the MSR.
Dexus 2024 Annual Report
114
9.4 NED statutory remuneration
This summary of the benefits received by each NED for the year ended 30 June 2024 is prepared in accordance with the
Australian Accounting Standards.
NED
Year
Short-term
benefits1
($)
Post-
employment
benefits
(super-
annuation)
($)
Other
long-term
benefits
($)
Total
($)
Current
Warwick Negus
FY24
471,734
18,266
–
490,000
FY23
373,074
17,062
–
390,136
Paula Dwyer
FY24
209,054
22,996
–
232,050
FY23
71,346
7,491
–
78,837
Mark Ford
FY24
254,651
27,399
–
282,050
FY23
256,758
25,292
–
282,050
Peeush Gupta1
FY24
32,877
3,616
–
36,493
FY23
–
–
–
–
Rhoda Phillippo
FY24
210,575
5,307
–
215,882
FY23
70,000
7,350
–
77,350
The Hon. Nicola Roxon
FY24
232,050
–
–
232,050
FY23
232,050
–
–
232,050
Elana Rubin AM
FY24
259,918
6,545
–
266,463
FY23
172,624
4,433
–
177,057
Former
Richard Sheppard
FY24
–
–
–
–
FY23
146,333
8,230
–
154,563
Patrick Allaway
FY24
–
–
–
–
FY23
129,231
13,569
–
142,800
Penny Bingham-Hall2
FY24
168,289
5,749
–
174,038
FY23
232,050
–
–
232,050
Tonianne Dwyer
FY24
–
–
–
–
FY23
83,548
8,230
–
91,778
Total
FY24
1,839,148
89,878
–
1,929,026
FY23
1,767,014
91,657
–
1,858,671
1. Mr Peeyush Gupta was appointed as a Director on 24 April 2024. His statutory remuneration is shown from 24 April 2024.
2. Ms Bingham-Hall was a Director until 28 March 2024. Her statutory remuneration is shown until 28 March 2024.
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10. Statutory disclosures
10.1 Statutory remuneration
The total remuneration paid to Executive KMP for FY23 and FY24 is calculated in accordance with the Australian
Accounting Standards.
Short-term benefits
Long-term benefits
Security-based benefits
Executive
KMP
Year
Base
salary
STI
award1
Annual
leave
move-
ment
Non-
mone-
tary
benefits2
Super-
annua-
tion
benefits
Termi-
nation
benefits
Long
service
leave
move-
ment3
Deferred
STI
plan
accrual
LTI plan
accrual
Once-
off
incentive
awards
accrual
Total
%
Perform-
ance-
based
Current
Ross
Du Vernet
FY24 1,027,363
456,363
23,792
2,244
27,399
–
31,207
144,628
517,684
251,251
2,481,931
55.20%
FY23
808,041
387,500
(6,268)
2,128
25,292
–
31,197
199,681
303,437
368,121
2,119,129
59.40%
Keir
Barnes
FY24
822,601
382,500
3,385
4,938
27,399
–
3,329
125,661
186,856
– 1,556,669
44.65%
FY23
774,708
336,000
9,447
9,590
25,292
–
–
135,437
182,512
–
1,472,986
0.00%
Deborah
Coakley4
FY24
872,601
–
(131)
8,374
27,399
–
(354)
63,281
203,169
251,251 1,425,590
36.31%
FY23
808,041
350,000
(11,783)
11,038
25,292
–
26,751
191,684
297,769
368,121
2,066,913
58.42%
Former
Darren
Steinberg5
FY24
1,164,412
672,000
(160)
11,658
20,287
–
(398)
370,456
786,405 1,034,314 4,058,974
70.54%
FY23
1,574,708
840,000
(48,835)
16,741
25,292
–
25,629
416,529
1,031,221
1,031,490
4,912,775
67.56%
Kevin
George6
FY24
2,875
–
(58)
–
8,771
–
(371)
–
–
–
11,217
0.00%
FY23
726,608
502,269
(16,855)
22,378
25,292
759,550
10,652
146,783
497,764
–
2,674,441
42.88%
Total
FY24 3,889,852 1,510,863
26,828
27,214
111,255
–
33,413
704,026
1,694,114
1,536,816 9,534,381
57.12%
FY23 4,692,106
2,415,769
(74,294)
61,875
126,460
759,550
94,229
1,090,114
2,312,703
1,767,732 13,246,244
57.27%
1.
STI award was approved by the Board of Directors on 8 August 2024.
2.
Non-monetary benefits include any car parking, health insurance, relocation costs and FBT.
3.
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.
4.
Deborah Coakley was not considered a good leaver and her unvested deferred STI Security Rights and LTI Performance Rights were forfeited
upon her departure. Accrual related to Deborah Coakley’s Deferred STI plan, LTI plan, and Once-off incentive awards continue to be recognised
at 30 June 2024, as notification of her departure was on 17 July 2024. Accrued expenses remaining in relation to unvested rights after 1 July 2024
will be reversed in FY25.
5.
Darren Steinberg stepped down from his Group CEO role on 27 March 2024 and his remuneration is shown until this date. He was a Good
Leaver under the terms of the STI and LTI plan rules and as such, any unvested deferred STI Security Rights, LTI Performance Rights and
one‑off Performance Rights were left on-foot to vest in the ordinary course. The recognition of the unamortised fair value of unvested rights
was accelerated and fully recognised as at 27 March 2024. In addition to the above, Mr Steinberg is on gardening leave for the remainder of
his 12 months notice period from 27 March 2024 to 11 December 2024, where he will receive his fixed remuneration and other normal employee
entitlements (refer to section 7.2). During the gardening leave period, Mr Steinberg is available to provide reasonable assistance to the Board and
the new Group CEO.
6.
Kevin George was a Good Leaver under the terms of the STI and LTI plan rules and as such, any unvested deferred STI Security Rights and
LTI Performance Rights were left on-foot to vest in the ordinary course. The recognition of the unamortised fair value of unvested rights was
accelerated and fully recognised as at 30 June 2023. There was no deferral component related to the FY23 STI.
Dexus 2024 Annual Report
116
10.2 Deferred STI and LTI awards which vested during FY24
The summary below outlines the number of Rights which vested under the Deferred STI and LTI plans during FY24. The vesting
date for the one-off retention award was 14 December 2023 and all other Rights was 1 July 2023. Deferred STI vested and the
LTI vesting outcomes are in section 5.4.
Executive KMP
Plan name
Grant
date
Tranche
Number of
Rights which
vested1
Market value
at vesting2
($)
Ross Du Vernet
Deferred STI
29.11.21
2
12,382
96,729
16.11.22
1
13,771
107,580
LTI
12.12.19
2
7,847
61,301
22.12.20
1
25,099
196,074
One-off Retention Award
14.12.20
1
76,740
569,446
Keir Barnes
Deferred STI
29.11.21
2
4,550
35,545
16.11.22
1
9,468
73,964
Other3
29.11.21
2
7,773
60,723
Deborah Coakley
Deferred STI
29.11.21
2
11,970
93,510
16.11.22
1
13,771
107,580
LTI
12.12.19
2
7,062
55,169
22.12.20
1
24,262
189,536
One-off Retention Award
14.12.20
1
76,740
569,446
Former KMP
Darren Steinberg
Deferred STI
29.11.21
2
26,416
206,363
16.11.22
1
27,542
215,159
LTI
12.12.19
2
33,481
261,555
22.12.20
1
107,092
836,607
1. All DSTI vested as this is only subject to a service condition and the LTI vesting outcome is detailed in section 5.4. All vested Rights are
exercised immediately.
2. Market value at vesting is the VWAP of DXS Securities for the five-day period before the vesting date.
3. Other refers to the Key Talent Equity Plan (KTEP) plan granted to the Executive before becoming KMP. The 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 an 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.
10.3 Deferred STI in respect of FY23 STI
The below table details the number of Security Rights granted to Executive KMP on 20 December 2023 based on the 2023
performance period.
Executive KMP
Number
of Security
Rights
Granted
Fair
value per
Performance
right
Vesting
Date
Ross Du Vernet
16,308
$7.79
1 July 2024
Keir Barnes
14,141
$7.79
1 July 2024
Deborah Coakley
14,730
$7.79
1 July 2024
Former KMP
Darren Steinberg
35,353
$7.79
1 July 2024
117
Investor information
Financial report
Directors’ report
Governance
Performance
Approach
Overview
10.4 Deferred STI in respect of FY24 STI
The below details the number of Security Rights to be granted to Executive KMP based on performance during FY24 under the
Deferred STI plan, using a VWAP of $6.54.
Executive KMP
Value of
deferred STI
($)
Number
of Security
Rights
Granted
Vesting
Date
Ross Du Vernet
152,121
23,260
1 July 2025
Keir Barnes
127,500
19,495
1 July 2025
Deborah Coakley1
–
–
1 July 2025
Former KMP
Darren Steinberg
224,000
34,251
1 July 2025
1.
Ms Deborah Coakley stepped down from her role as CE, FM on 17 July 2024, and was not eligible for FY24 STI.
10.5 LTI grant with respect to the FY24 LTI
The table below details the number of Performance Rights granted to Executive KMP on 20 December 2023 under the FY24
LTI plan.
Executive KMP
Grant
value as a
% of FR
Performance
measure
Number of
Performance
Rights
granted
VWAP
value per
Performance
Right2
Fair value
Tranche 1
(50%)
Vesting date
1 July 20263
Fair value
Tranche 2
(50%)
Vesting date
1 July 20273
Ross Du Vernet1
120%
ROCE
79,933
7.92
$6.69
$6.30
RTSR
79,933
7.92
$1.14
$1.17
Strategic measures
39,967
7.92
$6.69
$6.30
Keir Barnes
120%
ROCE
51,515
7.92
$6.69
$6.30
RTSR
51,515
7.92
$1.14
$1.17
Strategic measures
25,757
7.92
$6.69
$6.30
Deborah Coakley
120%
ROCE
54,545
7.92
$6.69
$6.30
RTSR
54,545
7.92
$1.14
$1.17
Strategic measures
27,273
7.92
$6.69
$6.30
Former KMP
Darren Steinberg
150%
ROCE
121,212
7.92
$6.69
$6.30
RTSR
121,212
7.92
$1.14
$1.17
Strategic measures
60,606
7.92
$6.69
$6.30
1.
Ross Du Vernet’s LTI grant for the FY24 LTI Plan was received for his time served in the CIO role.
2. VWAP adopted to determine performance right allocation and is based on 10 trading days either side of the first trading day of the new financial year.
3.
Fair value for the LTI reflects the grant date fair value in accordance with AASB 2 Share-based Payment. Valuations were provided by EY under
the Monte Carlo Simulation model.
Dexus 2024 Annual Report
118
10.6 Executive KMP unvested Rights outstanding
The table below shows the number of unvested Rights held by Executive KMP as at 30 June 2024 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. Minimum total value of grant is nil.
Executive KMP
Plan name
Grant date
Vesting
date1
Tranche
Number
of Rights
Maximum
Possible
Value yet
to Vest
Ross Du Vernet
Deferred STI
16.11.22
01.07.24
2
12,959
–
20.12.23
01.07.24
1
16,308
–
LTI
22.12.20
01.07.24
2
29,151
–
29.11.21
01.07.24
1
28,126
–
29.11.21
01.07.25
2
28,125
78,298
16.11.22
01.07.25
1
52,522
106,384
16.11.22
01.07.26
2
52,522
122,933
20.12.23
01.07.26
1
99,917
356,942
20.12.23
01.07.27
2
99,916
355,628
One-off Retention Award
14.12.20
14.12.24
2
76,740
69,580
Keir Barnes
Deferred STI
16.11.22
01.07.24
2
8,909
–
20.12.23
01.07.24
1
14,141
–
LTI
29.11.21
01.07.24
1
19,336
–
29.11.21
01.07.25
2
19,336
53,830
16.11.22
01.07.25
1
52,522
106,384
16.11.22
01.07.26
2
52,522
122,933
20.12.23
01.07.26
1
64,394
230,040
20.12.23
01.07.27
2
64,393
229,000
Deborah Coakley2
Deferred STI
16.11.22
01.07.24
2
12,959
–
20.12.23
01.07.24
1
14,730
–
LTI
22.12.20
01.07.24
2
28,179
–
29.11.21
01.07.24
1
28,126
–
29.11.21
01.07.25
2
28,125
–
16.11.22
01.07.25
1
52,522
–
16.11.22
01.07.26
2
52,522
–
20.12.23
01.07.26
1
68,182
–
20.12.23
01.07.27
2
68,181
–
One-off Retention Award
14.12.20
14.12.24
2
76,740
–
119
Investor information
Financial report
Directors’ report
Governance
Performance
Approach
Overview
Former KMP
Plan name
Grant
date
Vesting
date1
Tranche
Number
of Rights
Maximum
Possible
Value yet
to Vest
Darren Steinberg
Deferred STI
16.11.22
01.07.24
2
25,919
–
20.12.23
01.07.24
1
35,353
–
LTI
22.12.20
01.07.24
2
124,380
–
29.11.21
01.07.24
1
112,503
–
29.11.21
01.07.25
2
112,502
–
16.11.22
01.07.25
1
131,305
–
16.11.22
01.07.26
2
131,305
–
20.12.23
01.07.26
1
151,515
–
20.12.23
01.07.27
2
151,515
–
One-off Retention Award
01.06.21
01.07.24
1
356,335
–
Kevin George
Deferred STI
16.11.22
01.07.24
2
10,658
–
LTI
22.12.20
01.07.24
2
29,151
–
29.11.21
01.07.24
1
26,435
–
29.11.21
01.07.25
2
26,434
–
16.11.22
01.07.25
1
49,364
–
16.11.22
01.07.26
2
49,364
–
1.
All awards are automatically converted to Securities upon vesting hence there is no expiry date.
2.
As Ms Deborah Coakley stepped down from her role as CE, FM, unvested LTI and one-off Retention Awards at this date will be forfeited.
10.7 Equity investments – Security Rights and Performance Rights
The table below outlines the movement in Executive KMP’s Security Rights and Performance Rights for FY24, noting that all
vested Rights are automatically exercised.
Number of Rights
Held at
30 June
2023
Granted
during
the year3
Vested and
exercised
during
the year
Forfeited
during
the year
Held at
30 June
2024
Ross Du Vernet
430,853
218,348
135,839
17,076
496,286
Keir Barnes
173,346
143,998
21,791
Deborah Coakley
426,456
153,254
133,805
15,639
–
295,553
430,266
Former KMP
Darren Steinberg1
1,257,035
342,983
194,531
72,855
1,332,632
Kevin George2
263,072
2,063
58,694
15,035
191,406
1.
As Darren Steinberg stepped down from the CEO role on 27 March 2024, his Security Rights and Performance Rights are shown until this date. The
Number of Rights disclosed on 30 June 2023 did not include Rights related to his one-off Retention Awards of 356,335 but is included in the Number
of Rights held at 30 June 2023.
2.
As Kevin George ceased employment as EGM, Office on 3 July 2023, his Security Rights and Performance Rights are shown until this date.
3.
Grants during the year include performance rights related to dividend equivalent for the Deferred STI plan. These rights immediately vest
when granted.
Dexus 2024 Annual Report
120
10.8 Equity investments – security holdings
The table below outlines the movement in Executive KMP’s security holdings for FY24. All Executive KMP currently meet or are
on-track to meet their minimum security holding requirement within five years from their date of appointment.
Number of Securities
Held at
30 June
2023
Granted
during
the year
Vested and
exercised
during
the year
Acquired/
(disposed)
during
the year
Held at
30 June
2024
Ross Du Vernet
154,413
–
135,839
(39,000)
251,252
Keir Barnes
17,579
–
21,791
–
39,370
Deborah Coakley
152,258
–
133,805
(2,150)
283,913
Former KMP
Darren Steinberg1
1,377,611
–
194,531
–
1,572,142
Kevin George2
69,329
–
58,694
–
128,023
1.
As Darren Steinberg stepped down from the Group CEO role on 27 March 2024, his security holding is shown until this date.
2.
As Kevin George ceased employment as EGM, Office on 3 July 2023, his security holding is shown until this date.
10.9 Loans
No loans were provided to KMP or related parties.
10.10 Other transactions
There were no transactions involving an equity instrument (other than share based payment compensation) to KMP or
related parties.
10.11 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 Group CEO) or the Group 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.
121
Investor information
Financial report
Directors’ report
Governance
Performance
Approach
Overview
Financial report
Contents
123
Directors’ Report
128
Auditor’s Independence Declaration
129
Consolidated Statement of Comprehensive Income
130
Consolidated Statement of Financial Position
131
Consolidated Statement of Changes in Equity
132
Consolidated Statement of Cash Flows
133
Notes to the Consolidated Financial Statements
137
Group performance
137
Note 1 – Operating segments
142
Note 2 – Property revenue and expenses
143
Note 3 – Management fees and other revenue
144
Note 4 – Management operations, corporate and administration expenses
144
Note 5 – Finance costs
144
Note 6 – Taxation
146
Note 7 – Earnings per unit
147
Note 8 – Distributions paid and payable
148
Investments
148
Note 9 – Investment properties
152
Note 10 – Investments accounted for using the equity method
157
Note 11 – Investments accounted for at fair value
158
Note 12 – Inventories
158
Note 13 – Non-current assets classified as held for sale
159
Capital and financial risk management and working capital
159
Note 14 – Capital and financial risk management
167
Note 15 – Interest bearing liabilities
169
Note 16 – Lease liabilities
170
Note 17 – Commitments and contingencies
170
Note 18 – Contributed equity
171
Note 19 – Reserves
172
Note 20 – Working capital
174
Other disclosures
174
Note 21 – Intangible assets
176
Note 22 – Business combination
177
Note 23 – Audit, taxation and transaction service fees
177
Note 24 – Cash flow information
178
Note 25 – Security-based payments
180
Note 26 – Related parties
181
Note 27 – Parent entity disclosures
181
Note 28 – Subsequent events
182
Directors’ Declaration
183
Independent Auditor’s Report
Dexus 2024 Annual Report
122
Directors’ report
123
Investor information
Financial report
Directors’ report
Governance
Performance
Approach
Overview
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 2024. 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
Appointed
Warwick Negus, BBus, MCom, SF Fin
1 February 2021
Penny Bingham-Hall, BA (Industrial Design), SF Fin, FAICD1
10 June 2014
Ross Du Vernet, BBus, MBA
28 March 2024
Paula Dwyer, BCom, FCA, SF Fin, FAICD
1 February 2023
Mark Ford, Dip. Tech (Commerce), CA, FAICD
1 November 2016
Peeyush Gupta AM, BA (CompSc), MBA (Finance), FAICD
24 April 2024
Rhoda Phillippo, MSc (Telecommunications Business), GAICD
1 February 2023
The Hon. Nicola Roxon, BA/LLB (Hons), GAICD
1 September 2017
Elana Rubin AM, BA (Hons), MA, SF Fin, FAICD
28 September 2022
Darren Steinberg, BEc, FAICD, FRICS, FAPI1
1 March 2012
1 Resigned, effective 28 March 2024.
Company Secretaries
The names and details of the Company Secretaries of
DXFM as at 30 June 2024 are as follows:
Brett 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 Dexus
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 over 25
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.
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
and internal audit function. 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.
Dexus 2024 Annual Report
124
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 13 times during the year, of which two were Board Sub-committee and special meetings.
Main meetings
held
Main meetings
attended
Special meetings
held
Special meetings
attended
Warwick Negus
11
11
2
2
Penny Bingham-Hall1
8
8
1
1
Ross Du Vernet2
3
3
—
—
Paula Dwyer
11
11
1
1
Mark Ford
11
11
2
2
Peeyush Gupta AM3
3
3
—
—
Rhoda Phillippo
11
9
1
1
The Hon. Nicola Roxon
11
11
1
1
Elana Rubin AM
11
11
1
1
Darren Steinberg1
8
8
2
2
1 Resigned, effective 28 March 2024.
2 Appointed, effective 28 March 2024.
3 Appointed, effective 24 April 2024.
Board Sub-committee and 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’ attendances at Board Committee meetings of which they were a member
during the year ended 30 June 2024. All Non-Executive Directors have a standing invitation to attend any or all Board
Committee meetings.
Board Audit
Committee
Board Nomination
and Governance
Committee
Board People and
Remuneration
Committee
Board Risk and
Compliance
Committee
Board
Sustainability
Committee
Held
Attended
Held
Attended
Held
Attended
Held
Attended
Held
Attended
Warwick Negus
4
4
3
3
7
7
5
5
4
4
Penny Bingham-Hall1
—
—
2
2
5
5
—
—
3
3
Paula Dwyer
4
4
3
3
1
1
4
4
—
—
Mark Ford
4
4
3
3
—
—
2
2
3
3
Peeyush Gupta AM2
1
1
1
1
—
—
—
—
1
1
Rhoda Phillippo
3
3
3
3
—
—
5
3
1
1
The Hon. Nicola Roxon
—
—
3
3
7
7
—
—
4
4
Elana Rubin AM
—
—
3
3
7
7
5
5
—
—
1 Resigned, effective 28 March 2024.
2 Appointed, effective 24 April 2024.
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
No. of securities
Warwick Negus
60,000
Penny Bingham-Hall1
32,773
Ross Du Vernet2
251,153
Paula Dwyer
25,000
Mark Ford
17,339
Peeyush Gupta AM3
—
Rhoda Phillippo
10,000
The Hon. Nicola Roxon4
25,669
Elana Rubin AM
27,828
Darren Steinberg5
2,904,774
1 Resigned, effective 28 March 2024.
2 Appointed, effective 28 March 2024.
3 Appointed, effective 24 April 2024.
4 Includes interests held directly and through Non-Executive Director (NED) Plan rights.
5 Resigned, effective 28 March 2024. Includes interests held directly and through performance rights (refer to note 25).
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 30 to 37 of the Annual Report and forms part of this Directors’ Report.
125
Investor information
Financial report
Directors’ report
Governance
Performance
Approach
Overview
Remuneration Report
The Remuneration Report is set out on pages 90 to 121 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
Date appointed
Warwick Negus
Pengana Capital Group Limited (Chairman)1
1 June 2017
Bank of Queensland
22 September 2016
Washington H. Soul Pattison and Company Ltd2
1 November 2014
Penny Bingham-Hall3
BlueScope Steel Limited4
29 March 2011
Fortescue Metals Group Ltd
16 November 2016
Ross Du Vernet5
-
-
Paula Dwyer
AMCIL Limited
6 June 2023
ANZ Group Holdings Ltd6
1 April 2012
Mark Ford
Kiwi Property Group Limited7
16 May 2011
Peeyush Gupta AM8
Liberty Group
1 July 2024
Link Administration Holdings Limited9
18 November 2016
Charter Hall Long Wale REIT10
6 June 2016
National Australia Bank Limited11
5 November 2014
Rhoda Phillippo
APA Group
1 June 2020
The Hon. Nicola Roxon
Lifestyle Communities Limited12
1 September 2017
Elana Rubin AM
Telstra Corporation
14 February 2020
Darren Steinberg3
VGI Partners Limited13
12 May 2019
1 Resigned from the Board of Pengana Capital Group Limited, effective 1 April 2023.
2 Resigned from the Board of Washington H. Soul Pattison and Company Ltd, effective 31 December 2022.
3 Resigned from the Board of DXFM, effective 28 March 2024.
4 Resigned from the Board of BlueScope Steel Limited, effective 31 October 2022.
5 Appointed to the Board of DXFM, effective 28 March 2024.
6 Resigned from the Board of ANZ Group, effective 16 December 2021.
7 Resigned from the Board of Kiwi Property Group Limited, effective 28 June 2023 (listed for trading on the New Zealand Stock Exchange).
8 Appointed to the Board of DXFM, effective 24 April 2024.
9 Resigned from the Board of Link Administration Holdings Limited, effective 28 November 2023.
10 Resigned from the Board of Charter Hall Long WALE REIT, effective 24 April 2024.
11 Resigned from the Board of National Australia Bank Limited, effective 15 December 2023.
12 Resigned from the Board of Lifestyle Communities Limited, effective 31 December 2023.
13 Resigned from the Board of VGI Partners Limited, effective 3 June 2022.
Dexus 2024 Annual Report
126
Principal activities
During the year, the principal activities of the Group were
to:
– Own, manage and develop high quality real assets
– Invest in Australian managed funds
– Manage real asset funds on behalf of third party
investors
Significant changes in the nature of the Group’s activities
during the year are detailed below.
Total value of Group assets
The total value of the assets of the Group as at 30 June
2024 was $15,822.4 million (2023: $18,471.7 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
In 2022, Dexus announced the acquisition of the real
estate and domestic infrastructure equity business of
Collimate Capital Limited (Collimate Capital or AMP
Capital) from AMP Limited ("AMP Capital transaction"). The
transaction occurred under a two-stage completion
process. First Completion occurred on 24 March 2023 with
consideration of $175.0 million paid on this date. Final
Completion occurred on 30 November 2023 following the
satisfaction of the condition precedent relating to the
transfer of AMP’s ownership interest in China Life AMP
Asset Management (“CLAMP”) out of entities being
acquired by Dexus under the AMP Capital transaction.
Contingent consideration of $50.0 million was paid on this
date. In connection with the transaction, a co-owner has
taken steps seeking to compulsorily acquire an interest in
a property owned by a Dexus fund. The Dexus platform
intends to defend the action with resolution anticipated
by 30 June 2025.
Matters subsequent to the end of the
financial year
Since the end of the year, 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.
Distributions
Distributions paid or payable by the Group for the year
ended 30 June 2024 were 48.0 cents per security which
amounted to $516.3 million (2023: 51.6 cents per security,
$555.0 million) as outlined in note 8.
DXFM fees
Fees paid or payable by the Group to DXFM are
eliminated on consolidation. Details are outlined in note 26
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 2024 are detailed in note 18 and form part of this
Directors’ Report.
Interests held in the Group by DXFM at the end of the
financial year is nil (2023: 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 25. The Group did not
have any options on issue as at 30 June 2024 (2023: nil).
Environmental regulation
The Board Risk and Compliance Committee and Board
Sustainability Committee oversee the policies, procedures
and systems that have been implemented to ensure the
adequacy of Dexus’s environmental risk management
practices. The Committees are not aware of any material
breaches of the Corporations Act or Regulatory Guide 68.
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.
The Group has implemented systems and processes for
the collection and calculation of the data required. The
Group submitted its 2023 report to the Greenhouse and
Energy Data Officer on 30 October 2023 and will submit its
2024 report by 31 October 2024. During the 12 month
period ending 30 June 2024, 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.
127
Investor information
Financial report
Directors’ report
Governance
Performance
Approach
Overview
Indemnification and insurance (continued)
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
PwC 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 must be rotated every five years unless the Board
grants approval to extend the term for up to a further two
years.
Non-audit services
The Group may decide to employ the Auditor on
assignments, in addition to the statutory audit
engagement, where the Auditor’s expertise and
experience with the Group are important.
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 23.
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; and
– 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 128 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
Consolidated Financial Statements to the nearest
hundred thousand dollars, unless otherwise indicated. All
figures in this Directors' Report and the Consolidated
Financial Statements, except where otherwise stated, are
expressed in Australian dollars.
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
19 August 2024.
Warwick Negus Ross Du Vernet
Chair
Group CEO & Managing Director
19 August 2024
19 August 2024
Auditor’s Independence Declaration
Dexus 2024 Annual Report
128
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.
Auditor’s Independence Declaration
As lead auditor for the audit of Dexus Property Trust for the year ended 30 June 2024, 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 Dexus Property Trust and the entities it controlled during the period.
Marcus Laithwaite
Sydney
Partner
PricewaterhouseCoopers
19 August 2024
Consolidated Statement of Comprehensive Income
For the year ended 30 June 2024
129
Investor information
Financial report
Directors’ report
Governance
Performance
Approach
Overview
2024
2023
Note
$m
$m
Revenue from ordinary activities
Property revenue
2
323.9
416.3
Development revenue
12
135.7
113.8
Management fees and other revenue
3
421.3
307.6
Interest revenue
21.3
10.7
Total revenue from ordinary activities
902.2
848.4
Net fair value gain of foreign currency interest bearing liabilities
—
75.6
Other income
21.7
12.8
Total income
923.9
936.8
Expenses
Property expenses
2
(116.3)
(137.0)
Development costs
12
(117.7)
(61.0)
Management operations, corporate and administration expenses
4
(322.7)
(222.4)
Finance costs
5
(169.3)
(174.1)
Impairment of intangibles
21
—
(60.0)
Impairment of investments accounted for using the equity method
10
(0.7)
(3.2)
Share of net loss of investments accounted for using the equity method
10
(585.6)
(213.4)
Net fair value loss of derivatives
14(c)
(2.7)
(67.6)
Net foreign exchange loss
(0.2)
—
Net fair value loss of investment properties
9
(796.9)
(623.5)
Net fair value loss of investments accounted for at fair value
11
(302.6)
(28.3)
Net fair value loss of foreign currency interest bearing liabilities
(14.4)
—
Transaction costs
(88.3)
(87.8)
Total expenses
(2,517.4)
(1,678.3)
Loss for the year before tax
(1,593.5)
(741.5)
Income tax benefit/(expense)
6(a)
9.7
(11.2)
Loss for the year
(1,583.8)
(752.7)
Other comprehensive (loss)/income:
Items that may be reclassified to profit or loss
Changes in the fair value of cash flow hedges
19
(4.8)
1.7
Changes in the foreign currency basis spread reserve
19
(0.3)
0.2
Exchange differences on translation of foreign operations
19
(0.2)
—
Total comprehensive loss for the year
(1,589.1)
(750.8)
Loss for the year attributable to:
Unitholders of the parent entity
(1,578.9)
(685.2)
Unitholders of other stapled entity (non-controlling interests)
(4.9)
(67.5)
Loss for the year
(1,583.8)
(752.7)
Total comprehensive loss for the year attributable to:
Unitholders of the parent entity
(1,584.0)
(683.3)
Unitholders of other stapled entity (non-controlling interests)
(5.1)
(67.5)
Total comprehensive loss for the year
(1,589.1)
(750.8)
Cents
Cents
Earnings per unit on profit/(loss) attributable to unitholders of the Trust (parent entity)
Basic earnings per unit
7
(146.80)
(63.71)
Diluted earnings per unit
7
(146.80)
(63.71)
Earnings per stapled security on profit/(loss) attributable to stapled security holders
Basic earnings per security
7
(147.25)
(69.98)
Diluted earnings per security
7
(147.25)
(69.98)
The above Consolidated Statement of Comprehensive Income should be read in conjunction with the accompanying notes.
Consolidated Statement of Financial Position
As at 30 June 2024
Dexus 2024 Annual Report
130
2024
2023
Note
$m
$m
Current assets
Cash and cash equivalents
20(a)
54.0
123.9
Receivables
20(b)
218.6
151.8
Non-current assets classified as held for sale
13
104.2
1,354.0
Inventories
12
60.2
30.6
Derivative financial instruments
14(c)
128.5
98.6
Current tax receivable
6(c)
20.1
11.2
Other
20(c)
76.3
103.8
Total current assets
661.9
1,873.9
Non-current assets
Investment properties
9
5,117.9
6,038.1
Plant and equipment
9.9
11.3
Right-of-use assets
82.0
6.5
Investments accounted for using the equity method
10
8,605.5
9,050.0
Investments accounted for at fair value
11
353.6
431.9
Derivative financial instruments
14(c)
321.1
385.5
Deferred tax assets
0.7
—
Intangible assets
21
667.8
670.9
Other
2.0
3.6
Total non-current assets
15,160.5
16,597.8
Total assets
15,822.4
18,471.7
Current liabilities
Payables
20(d)
194.8
197.0
Contingent consideration
22
—
50.0
Interest bearing liabilities
15
163.7
381.8
Lease liabilities
16
11.8
2.1
Derivative financial instruments
14(c)
21.7
32.6
Provisions
20(e)
305.4
311.9
Loans with related parties
26
2.3
21.5
Other
—
68.2
Total current liabilities
699.7
1,065.1
Non-current liabilities
Interest bearing liabilities
15
4,745.9
4,927.9
Lease liabilities
16
80.8
12.5
Derivative financial instruments
14(c)
34.1
53.4
Deferred tax liabilities
6(f)
89.3
117.9
Provisions
20(e)
7.8
10.8
Other
3
—
19.8
Total non-current liabilities
4,957.9
5,142.3
Total liabilities
5,657.6
6,207.4
Net assets
10,164.8
12,264.3
Equity
Equity attributable to unitholders of the Trust (parent entity)
Contributed equity
18
7,048.0
7,048.0
Reserves
19
14.1
19.2
Retained profits
2,914.0
4,969.2
Parent entity unitholders' interest
9,976.1
12,036.4
Equity attributable to unitholders of other stapled entity
Contributed equity
18
107.1
107.1
Reserves
19
(0.3)
36.7
Retained profits
81.9
84.1
Other stapled entity unitholders' interest
188.7
227.9
Total equity
10,164.8
12,264.3
The above Consolidated Statement of Financial Position should be read in conjunction with the accompanying notes.
Consolidated Statement of Changes in Equity
For the year ended 30 June 2024
131
Investor information
Financial report
Directors’ report
Governance
Performance
Approach
Overview
Equity attributable to unitholders of the Trust
(parent entity)
Equity attributable to unitholders of other
stapled entity
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
Opening balance as at
1 July 2022
7,048.0
17.3
6,159.4
13,224.7
107.1
33.8
201.6
342.5
13,567.2
Net profit/(loss) for the
year
—
—
(685.2)
(685.2)
—
—
(67.5)
(67.5)
(752.7)
Other comprehensive
income/(loss) for the
year
19
—
1.9
—
1.9
—
—
—
—
1.9
Total comprehensive
income/(loss) for the
year
—
1.9
(685.2)
(683.3)
—
—
(67.5)
(67.5)
(750.8)
Transactions with
owners in their capacity
as owners
Movement of securities,
net of transaction costs
19
—
—
—
—
—
(7.5)
—
(7.5)
(7.5)
Security-based
payments expense
19
—
—
—
—
—
10.4
—
10.4
10.4
Distributions paid or
provided for
8
—
—
(505.0)
(505.0)
—
—
(50.0)
(50.0)
(555.0)
Total transactions with
owners in their capacity
as owners
—
—
(505.0)
(505.0)
—
2.9
(50.0)
(47.1)
(552.1)
Closing balance as at
30 June 2023
7,048.0
19.2
4,969.2
12,036.4
107.1
36.7
84.1
227.9
12,264.3
Opening balance as at
1 July 2023
7,048.0
19.2
4,969.2
12,036.4
107.1
36.7
84.1
227.9
12,264.3
Net profit/(loss) for the
year
—
—
(1,578.9)
(1,578.9)
—
—
(4.9)
(4.9)
(1,583.8)
Other comprehensive
income/(loss) for the
year
19
—
(5.1)
—
(5.1)
—
(0.2)
—
(0.2)
(5.3)
Total comprehensive
income/(loss) for the
year
—
(5.1)
(1,578.9)
(1,584.0)
—
(0.2)
(4.9)
(5.1)
(1,589.1)
Transfer (from)/to
retained profits
—
—
—
—
—
(42.7)
42.7
—
—
Transactions with
owners in their capacity
as owners
Movement of securities,
net of transaction costs
19
—
—
—
—
—
(11.6)
—
(11.6)
(11.6)
Security-based
payments expense
19
—
—
—
—
—
17.5
—
17.5
17.5
Distributions paid or
provided for
8
—
—
(476.3)
(476.3)
—
—
(40.0)
(40.0)
(516.3)
Total transactions with
owners in their capacity
as owners
—
—
(476.3)
(476.3)
—
5.9
(40.0)
(34.1)
(510.4)
Closing balance as at
30 June 2024
7,048.0
14.1
2,914.0
9,976.1
107.1
(0.3)
81.9
188.7
10,164.8
The above Consolidated Statement of Changes in Equity should be read in conjunction with the accompanying notes.
Consolidated Statement of Cash Flows
For the year ended 30 June 2024
Dexus 2024 Annual Report
132
2024
2023
Note
$m
$m
Cash flows from operating activities
Receipts in the course of operations (inclusive of GST)
882.1
940.1
Payments in the course of operations (inclusive of GST)
(588.7)
(452.8)
Interest received
21.2
10.5
Finance costs paid
(173.1)
(177.0)
Distributions received
533.7
404.0
Income and withholding taxes paid
(28.4)
(56.8)
Proceeds from sale of property classified as inventory and development services
71.5
113.8
Payments for property classified as inventory and development services
(104.8)
(10.9)
Net cash inflow/(outflow) from operating activities
24
613.5
770.9
Cash flows from investing activities
Proceeds from sale of investment properties
1,232.8
688.5
Proceeds from sale of investments accounted for using the equity method
12.8
68.5
Proceeds from sale of investments accounted for at fair value
—
130.1
Payments for capital expenditure on investment properties
(145.7)
(218.8)
Payments for investments accounted for using the equity method
(569.8)
(513.0)
Payments for investments accounted for at fair value
(167.4)
(402.3)
Payments for acquisition of investment properties
—
(134.4)
Proceeds from return of capital from investments accounted for using the equity
method
2.5
—
Payments for plant and equipment
(1.3)
(4.3)
Payments for intangibles
(1.1)
(3.7)
Payment for acquisition of subsidiary, net of cash acquired
(51.8)
(190.4)
Net cash inflow/(outflow) from investing activities
311.0
(579.8)
Cash flows from financing activities
Borrowings provided to related parties
(0.2)
(0.9)
Repayment of loan with related party
—
(33.1)
Proceeds from borrowings
3,660.8
7,811.5
Repayment of borrowings
(4,098.4)
(7,392.5)
Proceeds from loan with related party
—
55.5
Payment of lease liabilities
(4.1)
(3.3)
Purchase of securities for security-based payments plans
(11.6)
(7.5)
Distributions paid to security holders
(540.9)
(572.2)
Net cash inflow/(outflow) from financing activities
(994.4)
(142.5)
Net increase/(decrease) in cash and cash equivalents
(69.9)
48.6
Cash and cash equivalents at the beginning of the year
123.9
75.3
Cash and cash equivalents at the end of the year
54.0
123.9
The above Consolidated Statement of Cash Flows should be read in conjunction with the accompanying notes.
Notes to the Consolidated Financial Statements
133
Investor information
Financial report
Directors’ report
Governance
Performance
Approach
Overview
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
These Consolidated Financial Statements are general
purpose financial statements which have been prepared
in accordance with the requirements of the Constitutions
of the entities within the Group, the Corporations Act
2001, Australian Accounting Standards issued by the
Australian Accounting Standards Board and the
International Financial Reporting Standards adopted by
the International Accounting Standards 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 Group is a for-profit entity for the purpose of
preparing the Consolidated Financial Statements.
The Consolidated Financial Statements have been
prepared on a going concern basis using the historical
cost convention, except for the following which are stated
at their fair value:
– Investment properties;
– Investment properties within equity accounted
investments;
– Investments accounted for at fair value;
– Non-current assets classified as held for sale;
– Derivative financial instruments; and
– Security-based payments.
Significant change from the previous annual
financial report
During the year, the Group completed its acquisition of
Collimate Capital’s real estate and domestic
infrastructure equity business from AMP Limited. Details of
the acquisition are outlined in note 22. 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.
Contingent consideration is classified either as equity or a
financial liability. Amounts classified as a financial liability
are subsequently remeasured at fair value with changes in
fair value recognised in profit or loss.
Where the business combination is achieved in stages, the
acquisition date carrying value of the acquirer’s previously
held equity interest in the acquiree is remeasured at fair
value at the acquisition date. Any gains or losses arising
from such remeasurement are recognised in profit or loss.
After initial recognition, goodwill is measured at cost less
any accumulated impairment losses and is tested for
impairment annually. Where a business combination is
incomplete by the end of the reporting period in which the
combination occurs, the acquirer shall report in its
financial statements provisional amounts for the items for
which the accounting is incomplete. During the
measurement period, the acquirer shall retrospectively
adjust the provisional amounts recognised at the
acquisition date to reflect new information obtained
about facts and circumstances that existed as of the
acquisition date and, if known, would have affected the
measurement of the amounts recognised as of that date.
Dexus 2024 Annual Report
134
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.
In the process of applying the Group’s accounting
policies, management has considered the current
economic environment including the impacts of persistent
inflation and elevated interest rates and the estimates
and assumptions used for the measurement of items such
as:
– Investment properties;
– Investment properties within equity accounted
investments;
– Investments accounted for at fair value;
– Non-current assets classified as held for sale;
– Derivative financial instruments;
– Security-based payments;
– Inventories;
– Intangible assets; and
– Performance fees.
No other key assumptions concerning the future or other
estimation uncertainty at the end of the reporting period
could have a significant risk of causing material
adjustments to the Consolidated Financial Statements.
Net current asset deficiency
As at 30 June 2024, the Group had a net current asset
deficiency of $37.8 million (2023: surplus of $808.8 million).
This is primarily due to interest bearing liabilities of $163.7
million due within 12 months (2023: $381.8 million) and a
distribution provision of $229.2 million (2023: $253.8 million).
Capital risk management is managed holistically through
a centralised treasury function. The Group has in place
both external and internal funding arrangements to
support the cash flow requirements of the Group,
including undrawn facilities of $2,462.0 million
(2023: $2,409.5 million).
In determining the basis of preparation of the
Consolidated Financial Statements, the Directors of the
Responsible Entity have taken into consideration the
unutilised facilities available to the Group. As such, the
Group is a going concern and the Consolidated Financial
Statements have been prepared on that basis.
Accounting standards issued but not yet
effective
Amendments to AASB 101 Presentation of Financial
Statements (AASB 101) apply retrospectively for annual
reporting periods beginning on or after 1 July 2024.
The amendments clarify certain requirements for
determining whether a liability should be classified as
current or non-current, depending on the rights that exist
at the end of the reporting period. The amendments
specify how entities should classify a convertible debt
liability that can be settled by an entity’s own equity
instruments at the option of the counterparty and require
conversion options classified as liabilities to be assessed
when determining the appropriate current and non-
current classification.
The Group is finalising its assessment of the impacts of
these amendments and will adopt the amendments from 1
July 2024. It is expected that the Group’s exchangeable
notes (2024: $462.0 million) will be reclassified from a non-
current liability to a current liability. The reclassification is
not expected to impact the Group’s covenant
calculations.
Climate change
On 26 June 2023, the International Sustainability
Standards Board (ISSB) released new sustainability
standards, IFRS S1 General Requirements for Disclosure of
Sustainability-related Financial Information and IFRS S2
Climate-related Disclosures. Subsequently, the Australian
Accounting Standards Board (AASB) issued Exposure Draft
“Australian Sustainability Reporting Standards –
Disclosure of Climate-related Financial Information” and
on 27 March 2024, the “Treasury Laws Amendment
(Financial Market Infrastructure and Other Measures) Bill
2024” was introduced into Parliament. Under the
proposed Bill, the new reporting requirements will be
mandatory for the year ended 30 June 2026 for the
Group. The Group is continuing to develop its assessment
of the impact of climate change in line with emerging
industry and regulatory guidance on its Consolidated
Financial Statements. Refer to specific considerations
relating to Investment Properties within note 9.
Principles of consolidation
These Consolidated Financial Statements incorporate the
assets, liabilities and results of all subsidiaries as at
30 June 2024.
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 are
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.
135
Investor information
Financial report
Directors’ report
Governance
Performance
Approach
Overview
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,
except for qualifying cash flow hedges, which are
deferred to equity.
On consolidation, the assets, liabilities, income and
expenses of foreign operations are translated into
Australian dollars using the following applicable exchange
rates:
– Income and expenses: Average exchange rate
– Assets and liabilities: Reporting date
– Equity: Historical date
– Reserves: Reporting date
Foreign exchange differences resulting from translation of
foreign operations are initially recognised in the foreign
currency translation reserve and subsequently transferred
to the Consolidated Statement of Comprehensive Income
on disposal of the foreign operation.
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.
Dexus 2024 Annual Report
136
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
Investments
Capital and financial risk
management and working
capital
Other disclosures
1.
Operating segments
9.
Investment properties
14.
Capital and financial risk
management
21.
Intangible assets
2.
Property revenue and
expenses
10.
Investments accounted
for using the equity
method
15.
Interest bearing liabilities
22. Business combination
3.
Management fees and
other revenue
11.
Investments accounted
for at fair value
16.
Lease liabilities
23. Audit, taxation and
transaction service fees
4.
Management operations,
corporate and
administration expenses
12.
Inventories
17.
Commitments and
contingencies
24. Cash flow information
5.
Finance costs
13.
Non-current assets
classified as held for sale
18.
Contributed equity
25. Security-based payments
6.
Taxation
19.
Reserves
26. Related parties
7.
Earnings per unit
20. Working capital
27. Parent entity disclosures
8.
Distributions paid and
payable
28. Subsequent events
Group performance
137
Investor information
Financial report
Directors’ report
Governance
Performance
Approach
Overview
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:
– Operating segments
– Property revenue and expenses
– Management fees and other revenue
– Management operations, corporate and administration expenses
– Finance costs
– Taxation
– Earnings per unit
– 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 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
Description
Office
Domestic office space with any associated retail space; as well as car parks and office
developments owned directly or in joint ventures or partnerships.
Industrial
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 real asset funds and funds
invested in securities.
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 real assets portfolio value of other investments.
Dexus 2024 Annual Report
138
Note 1 Operating segments (continued)
Office
Industrial
30 June 2024
$m
$m
Segment performance measures
Property revenue
623.5
171.1
Property management fees
—
—
Development revenue
—
80.0
Management fee revenue
—
—
Co-investment income
—
—
Total operating segment revenue
623.5
251.1
Property expenses and property management salaries
(199.1)
(39.5)
Management operations expenses
—
—
Development costs
—
(77.6)
Corporate and administration expenses
(15.5)
(5.4)
Incentive amortisation and rent straight line
145.3
15.5
Foreign exchange gains/(losses)
—
—
Interest revenue
—
—
Finance costs
—
—
Rental guarantees, coupon income and other
—
(3.4)
FFO tax expense
—
—
Funds From Operations (FFO)
554.2
140.7
Net fair value gain/(loss) of investment properties
(1,523.2)
(110.1)
Net fair value gain/(loss) of leased assets
—
—
Share of net profit/(loss) of investments accounted for using the equity method
—
—
Net fair value gain/(loss) of investments accounted for at fair value
(267.1)
—
Net fair value gain/(loss) of derivatives
—
—
Net fair value gain/(loss) of interest bearing liabilities
—
—
Transaction costs and other significant items
—
—
Incentive amortisation and rent straight line
(145.3)
(15.5)
Amortisation and impairment of intangible assets
—
—
Rental guarantees, coupon income and other
—
3.4
Distribution income
—
—
Co-investment income
—
—
Non FFO tax benefit
—
—
Net profit/(loss) attributable to stapled security holders
(1,381.4)
18.5
Investment properties
4,339.2
750.1
Equity accounted real estate funds1
5,164.8
2,312.1
Equity accounted real estate security funds1
—
—
Equity accounted inventories
—
—
Equity accounted non-current assets held for sale
—
—
Equity accounted infrastructure funds1
—
—
Investments accounted for at fair value2
97.3
—
Inventories
—
—
Non-current assets held for sale
69.1
35.1
Investments
9,670.4
3,097.3
1 Comprises the Group’s portion of the underlying property, infrastructure assets and other investments accounted for using the equity method.
2 Comprises the carrying value of the Group’s investments accounted for at fair value which consists of interests in Australian trusts, managed property
funds and infrastructure assets.
139
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Directors’ report
Governance
Performance
Approach
Overview
Co-
investments
Property
management
Funds
management
Development
and trading
All other
segments
Eliminations
Total
$m
$m
$m
$m
$m
$m
$m
—
—
—
—
0.5
(4.5)
790.6
—
69.4
—
—
—
—
69.4
—
—
—
55.7
—
—
135.7
—
19.6
240.3
26.1
—
—
286.0
70.3
—
—
—
—
—
70.3
70.3
89.0
240.3
81.8
0.5
(4.5)
1,352.0
—
(27.3)
—
—
—
—
(265.9)
—
(43.6)
(109.0)
(35.1)
—
—
(187.7)
—
—
—
(41.0)
—
—
(118.6)
—
—
—
—
(66.4)
4.5
(82.8)
—
—
—
—
0.3
—
161.1
—
—
—
—
(0.2)
—
(0.2)
—
—
—
—
33.2
—
33.2
—
—
—
—
(163.3)
—
(163.3)
—
—
2.2
—
5.2
—
4.0
—
—
—
(4.4)
(24.0)
—
(28.4)
70.3
18.1
133.5
1.3
(214.7)
—
703.4
—
—
—
—
(1.2)
—
(1,634.5)
—
—
—
—
0.9
—
0.9
(54.6)
—
—
—
—
—
(54.6)
(36.1)
—
—
—
0.6
—
(302.6)
—
—
—
—
(5.5)
—
(5.5)
—
—
—
—
(14.4)
—
(14.4)
—
—
—
—
(83.8)
—
(83.8)
—
—
—
—
(0.3)
—
(161.1)
—
—
—
—
(4.1)
—
(4.1)
—
—
—
—
(7.8)
—
(4.4)
10.6
—
—
—
—
—
10.6
(70.3)
—
—
—
—
—
(70.3)
—
—
—
—
36.6
—
36.6
(80.1)
18.1
133.5
1.3
(293.7)
—
(1,583.8)
—
—
—
—
28.6
—
5,117.9
1,174.5
—
—
—
102.6
—
8,754.0
12.4
—
—
—
—
—
12.4
63.0
—
—
29.8
—
—
92.8
6.8
—
—
—
—
—
6.8
300.5
—
—
—
—
—
300.5
246.4
—
—
—
9.9
—
353.6
—
—
—
60.2
—
—
60.2
—
—
—
—
—
—
104.2
1,803.6
—
—
90.0
141.1
—
14,802.4
Dexus 2024 Annual Report
140
Note 1 Operating segments (continued)
Office
Industrial
30 June 2023
$m
$m
Segment performance measures
Property revenue
670.1
199.5
Property management fees
—
—
Development revenue
—
—
Management fee revenue
—
—
Co-investment income
—
—
Gain on sale of units in investments accounted for using the equity method
—
—
Total operating segment revenue
670.1
199.5
Property expenses and property management salaries
(196.1)
(48.4)
Management operations expenses
—
—
Development costs
—
—
Corporate and administration expenses
(14.1)
(4.7)
Incentive amortisation and rent straight line
137.8
15.9
Foreign exchange gains/(losses)
—
—
Interest revenue
—
—
Finance costs
—
—
Rental guarantees, coupon income and other
(0.1)
1.2
FFO tax expense
—
—
Funds From Operations (FFO)
597.6
163.5
Net fair value gain/(loss) of investment properties
(1,177.8)
(6.6)
Net fair value gain/(loss) of leased assets
—
—
Share of net profit/(loss) of investments accounted for using the equity method
—
—
Net fair value gain/(loss) of investments accounted for at fair value
—
—
Net fair value gain/(loss) of derivatives
—
—
Net fair value gain/(loss) of interest bearing liabilities
—
—
Transaction costs and other significant items
—
—
Incentive amortisation and rent straight line
(137.8)
(15.9)
Amortisation and impairment of intangible assets
—
—
Rental guarantees, coupon income and other
0.1
(1.2)
Distribution income
—
—
Co-investment income
—
—
Non FFO tax expense
—
—
Net profit/(loss) attributable to stapled security holders
(717.9)
139.8
Investment properties
4,927.3
1,080.9
Equity accounted real estate funds1
5,992.0
2,246.6
Equity accounted real estate security funds1
—
—
Equity accounted infrastructure funds1
—
—
Investments accounted for at fair value2
206.8
—
Inventories
—
—
Non-current assets held for sale
1,000.0
354.0
Investments
12,126.1
3,681.5
1 Comprises the Group’s portion of the underlying property assets accounted for using the equity method.
2 Comprises the carrying value of the Group’s investments accounted for at fair value which consists of interests in Australian trusts and managed
property funds.
141
Investor information
Financial report
Directors’ report
Governance
Performance
Approach
Overview
Co-
investments
Property
management
Funds
management
Development
and trading
All other
segments
Eliminations
Total
$m
$m
$m
$m
$m
$m
$m
—
—
—
—
—
(8.6)
861.0
—
52.5
—
—
—
—
52.5
—
—
—
113.8
—
—
113.8
—
38.3
148.8
35.0
—
—
222.1
35.9
—
—
—
—
—
35.9
—
—
—
18.9
—
—
18.9
35.9
90.8
148.8
167.7
—
(8.6)
1,304.2
—
(32.2)
—
—
—
—
(276.7)
—
(48.5)
(57.3)
(26.1)
—
—
(131.9)
—
—
—
(61.0)
—
—
(61.0)
—
—
—
—
(48.8)
8.6
(59.0)
—
—
—
—
(0.1)
—
153.6
—
—
—
—
0.4
—
0.4
—
—
—
—
20.9
—
20.9
—
—
—
—
(158.1)
—
(158.1)
—
—
2.1
—
0.5
—
3.7
—
—
—
(21.5)
(36.1)
—
(57.6)
35.9
10.1
93.6
59.1
(221.3)
—
738.5
—
—
—
—
8.8
—
(1,175.6)
—
—
—
—
0.5
—
0.5
(2.0)
—
—
—
—
—
(2.0)
—
—
—
—
(1.1)
—
(1.1)
—
—
—
—
(67.6)
—
(67.6)
—
—
—
—
75.6
—
75.6
—
—
—
—
(96.2)
—
(96.2)
—
—
—
—
0.1
—
(153.6)
—
—
—
—
(62.2)
—
(62.2)
—
—
—
—
(22.8)
—
(23.9)
8.1
—
—
—
—
—
8.1
(35.9)
—
—
—
—
—
(35.9)
—
—
—
—
42.7
—
42.7
6.1
10.1
93.6
59.1
(343.5)
—
(752.7)
—
—
—
—
29.9
—
6,038.1
1,073.6
—
—
—
62.2
—
9,374.4
12.6
—
—
—
—
—
12.6
136.9
—
—
—
—
—
136.9
225.1
—
—
—
—
—
431.9
—
—
—
30.6
—
—
30.6
16.3
—
—
—
—
—
1,370.3
1,464.5
—
—
30.6
92.1
—
17,394.8
Dexus 2024 Annual Report
142
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 investments accounted for
at fair value, 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, 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
2024
2023
$m
$m
Property lease revenue
694.3
754.3
Property services revenue
96.3
106.7
Property revenue
790.6
861.0
Property management fees
69.4
52.5
Development revenue
135.7
113.8
Management fee revenue
286.0
222.1
Co-investment income
70.3
35.9
Gain on sale of units in investments accounted for using the equity method
—
18.9
Total operating segment revenue
1,352.0
1,304.2
Share of revenue from joint ventures and associates
(507.7)
(466.5)
Interest and other revenue
57.9
10.7
Total revenue from ordinary activities
902.2
848.4
Reconciliation of segment assets to the Consolidated Statement of Financial Position
2024
2023
$m
$m
Investments1, 2
14,802.4
17,394.8
Right-of-use assets
82.0
6.5
Cash and cash equivalents
54.0
123.9
Receivables
218.6
151.8
Intangible assets
667.8
670.9
Derivative financial instruments
449.6
484.1
Plant and equipment
9.9
11.3
Prepayments and other net assets3
(461.9)
(371.6)
Total assets
15,822.4
18,471.7
1 Includes the Group’s portion of investment property, infrastructure assets and other investments accounted for using the equity method and the
Group's investments accounted for at fair value.
2 Includes Co-investments in listed and unlisted real estate, real estate security and infrastructure funds. The principal activity of these funds is to invest
in domestic and global real estate and infrastructure investments. Where the Group is deemed to have significant influence over these funds due to its
ability to influence the decisions made by the Board of the Responsible Entities of these funds, which are wholly owned subsidiaries of the Group, these
investments are accounted for using the equity method. Other investments in this category are accounted for at fair value.
3 Other net 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 and infrastructure asset value which is included in Investments.
Note 2 Property revenue and expenses
Property revenue
Property rental revenue 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 being incentive amortisation calculated 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 in accordance with 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.
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Performance
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Overview
Note 2 Property revenue and expenses (continued)
Property revenue (continued)
2024
2023
$m
$m
Rent and recoverable outgoings
312.9
390.3
Services revenue
39.9
53.3
Incentive amortisation
(71.4)
(83.6)
Other revenue
42.5
56.3
Total property revenue
323.9
416.3
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.
2024
2023
$m
$m
Recoverable outgoings
81.0
104.2
Other non-recoverable property expenses
35.3
32.8
Total property expenses
116.3
137.0
Note 3 Management fees and other revenue
Management fees are brought to account on an accrual basis and, if not received at the end of the reporting period, are
reflected in the Consolidated Statement of Financial Position as a receivable.
2024
2023
$m
$m
Investment management and responsible entity fees
244.5
190.6
Lease review and renewal fees
14.9
13.0
Property management fees
61.1
41.5
Capital works and development management fees
23.0
33.9
Performance and transaction fees
26.5
1.4
Wages recovery and other fees
51.3
27.2
Total management fees and other revenue
421.3
307.6
Performance fees are for performance obligations fulfilled over time and for which consideration is variable. The fees are
determined in accordance with the relevant agreement which stipulates out-performance of a benchmark over a given
period. Performance fee revenue is recognised to the extent that it is highly probable that the amount of variable
consideration recognised will not be significantly reversed when the uncertainty is resolved. Detailed calculations and an
assessment of the risks associated with the recognition of the fee are completed to inform the assessment of the appropriate
revenue to recognise.
As at 30 June 2024, there was no unearned revenue relating to performance fees recorded within non-current liabilities
(2023: $19.3 million).
Critical accounting estimates: input used to measure performance fee
Judgement is required in determining the following significant inputs for recognition of performance fee revenue:
– Estimates of future underlying asset values and income measures compared to benchmark on the final performance fee
calculation date
– The period of time remaining from balance date to the final performance fee calculation date and the degree of
probability that any potential fee may be reversed taking into consideration historical performance, prevailing and
future economic conditions
Dexus 2024 Annual Report
144
Note 4 Management operations, corporate and administration expenses
2024
2023
$m
$m
Audit, taxation, legal and other professional fees
16.3
19.1
Depreciation and amortisation
13.9
8.4
Employee benefits expense
235.5
145.0
Administration expenses and other expenses
57.0
49.9
Total management operations, corporate and administration expenses
322.7
222.4
Note 5 Finance costs
Finance costs include:
– Interest;
– Amortisation or other costs incurred in connection with arrangement of borrowings;
– Finance costs on lease liabilities; and
– Realised gains and losses on interest rate swaps.
Finance costs are expensed as incurred unless they are directly attributable to qualifying assets which are capitalised to the
cost of the asset.
A qualifying asset is an asset under development where the works being carried out to bring it to its intended use or sale are
expected to take a substantial period of time. 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 interest rate.
2024
2023
$m
$m
Interest paid/payable
237.6
194.4
Amount capitalised
(26.7)
(23.7)
Realised (gain)/loss of interest rate derivatives
(62.0)
(29.2)
Finance costs - leases and debt modification
0.9
23.9
Other finance costs
19.5
8.7
Total finance costs
169.3
174.1
The average interest rate used to determine the amount of borrowing costs eligible for capitalisation is 4.04% (2023: 3.70%).
Note 6 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 and previous financial years. DXO is liable for income tax and has formed a tax
consolidated group with its wholly owned and controlled Australian entities. As a consequence, the tax consolidated group is
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.
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.
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Performance
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Overview
Note 6 Taxation (continued)
a. Income tax (expense)/benefit
2024
2023
$m
$m
Current income tax expense
(19.6)
(30.6)
Deferred income tax benefit
29.3
19.4
Total income tax benefit/(expense)
9.7
(11.2)
Deferred income tax expense included in income tax (expense) / benefit comprises:
Increase in deferred tax assets
8.4
3.6
Decrease in deferred tax liabilities
20.9
15.8
Total deferred tax benefit
29.3
19.4
b. Reconciliation of income tax (expense)/benefit to net profit
2024
2023
$m
$m
Loss before income tax
(1,593.5)
(741.5)
Add: loss attributed to entities not subject to tax
1,554.0
692.6
Loss subject to income tax
(39.5)
(48.9)
Prima facie tax expense at the Australian tax rate of 30% (2023: 30%)
11.9
14.7
Tax effect of amounts which are not deductible/(assessable) in calculating taxable income:
(Non-assessable)/non-deductible items
(2.2)
(25.9)
Income tax benefit/(expense)
9.7
(11.2)
c. Current tax assets/liabilities
2024
2023
$m
$m
Increase in current tax assets
8.9
11.2
Decrease in current tax liabilities
—
16.0
Increase in current tax assets
8.9
27.2
d. Deferred tax assets
2024
2023
$m
$m
The balance comprises temporary differences attributable to:
Employee provisions
31.6
26.6
Software expenditure
5.9
9.8
Other
39.7
32.5
Total non-current assets - deferred tax assets
77.2
68.9
Movements:
Opening balance
68.8
42.5
Deferred tax assets arising from business combination
—
22.7
Movement in deferred tax asset arising from temporary differences
8.4
3.6
Closing balance
77.2
68.8
e. Deferred tax liabilities
2024
2023
$m
$m
The balance comprises temporary differences attributable to:
Intangible assets
165.5
166.4
Investment properties
0.2
16.6
Other
0.1
3.7
Total non-current liabilities - deferred tax liabilities
165.8
186.7
Movements
Opening balance
186.7
144.7
Deferred tax liabilities arising from management rights on business combination1
—
57.8
Movement in deferred tax liability arising from temporary differences
(20.9)
(15.8)
Closing balance
165.8
186.7
1 Representing the deferred tax recognised in relation to the acquisition of Collimate Capital’s real estate and domestic infrastructure equity business
from AMP Limited. Refer to note 22 for further details.
Dexus 2024 Annual Report
146
Note 6 Taxation (continued)
f.
Net deferred tax liabilities
2024
2023
$m
$m
Deferred tax assets
77.2
68.8
Deferred tax liabilities
(165.8)
(186.7)
Net deferred tax liabilities1
(88.6)
(117.9)
1 Net deferred tax liabilities of $88.6m is presented in the Consolidated Statement of Financial Position as $89.3m in net deferred tax liabilities related to
Australian entities and net deferred tax assets of $0.7m related to foreign entities.
Note 7 Earnings per unit
Earnings per unit are determined by dividing the net profit or loss 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
2024
2023
$m
$m
Loss attributable to unitholders of the Trust (parent entity) for basic earnings per security
(1,578.9)
(685.2)
Effect on exchange of Exchangeable Notes
(0.3)
22.4
Loss attributable to unitholders of the Trust (parent entity) for diluted earnings per security
(1,579.2)
(662.8)
Loss attributable to stapled security holders for basic earnings per security
(1,583.8)
(752.7)
Effect on exchange of Exchangeable Notes
(0.3)
22.4
Loss attributable to stapled security holders for diluted earnings per security
(1,584.1)
(730.3)
b. Weighted average number of securities used as a denominator
2024
2023
No. of
securities
No. of
securities
Weighted average number of units outstanding used in calculation of basic earnings per
security
1,075,565,246
1,075,565,246
Effect on exchange of Exchangeable Notes
68,498,708
53,412,698
Weighted average number of units outstanding used in calculation of diluted earnings per
unit
1,144,063,954
1,128,977,944
147
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Performance
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Overview
Note 8 Distributions paid and payable
Distributions are recognised when declared.
a. Distribution to security holders
2024
2023
$m
$m
31 December (paid 29 February 2024)
287.1
301.2
30 June (payable 29 August 2024)
229.2
253.8
Total distribution to security holders
516.3
555.0
b. Distribution rate
2024
2023
Cents per
security
Cents per
security
31 December (paid 29 February 2024)
26.7
28.0
30 June (payable 29 August 2024)
21.3
23.6
Total distribution rate
48.0
51.6
c. Franked dividends
2024
2023
$m
$m
Opening balance
154.6
114.3
Income tax paid during the year
28.0
61.7
Franking credits utilised for payment of distribution
(17.1)
(21.4)
Closing balance
165.5
154.6
Investments
Dexus 2024 Annual Report
148
In this section
Investments are used to generate the Group’s performance. The assets are detailed in the following notes:
– Investment properties (note 9): relates to investment properties (including ground leases where relevant), both stabilised
and under development.
– Investments accounted for using the equity method (note 10): provides summarised financial information on the joint
ventures and investments where the Group has significant influence and relates to interests in underlying property,
infrastructure assets and other investments.
– Investments accounted for at fair value (note 11): relates to the fair value of investments in Australian trusts, managed
property funds and equity investments in infrastructure assets.
– Inventories (note 12): relates to the Group’s ownership of office and industrial assets or land held for repositioning,
development and sale.
– Non-current assets classified as held for sale (note 13): relates to investment properties which are expected to be sold
within 12 months of the reporting date and/or contracts have already exchanged.
Note 9 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 measured at fair value.
The basis of valuations of investment properties is fair value, being the estimated 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.
a. Reconciliation
Office
Industrial
Other
2024
2023
Note
$m
$m
$m
$m
$m
Opening balance
4,927.3
1,081.0
29.8
6,038.1
8,295.7
Additions
142.8
2.5
0.4
145.7
218.8
Acquisitions
—
—
—
—
134.4
Transfer from non-current assets classified as held for
sale
13
99.0
—
—
99.0
—
Lease incentives
47.9
2.2
—
50.1
62.5
Amortisation of lease incentives
(70.2)
(4.9)
—
(75.1)
(90.9)
Rent straightlining
(2.6)
(0.7)
0.3
(3.0)
(0.9)
Disposals
—
(174.0)
—
(174.0)
(579.5)
Transfer to non-current assets classified as held for
sale
13
(69.1)
(35.1)
—
(104.2)
(1,354.0)
Transfer (to)/from inventories
12
—
(60.0)
—
(60.0)
(25.7)
Net fair value gain/(loss) of investment properties
(735.9)
(60.9)
(1.9)
(798.7)
(622.3)
Closing balance
4,339.2
750.1
28.6
5,117.9
6,038.1
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 16 for details of the lease liabilities.
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Note 9 Investment properties (continued)
a. Reconciliation (continued)
Disposals
Date
Property Name
Proceeds1
$m
21 November 2023
20 Distribution Drive, Truganina, VIC - Lot EE
16.8
19 December 2023
153 Aldington Road, Kemps Creek, NSW2
137.2
12 June 2024
20 Distribution Drive, Truganina, VIC - Lot DD
8.6
17 June 2024
18 Motorway Circuit, Ormeau, QLD
17.9
1 Excludes transaction costs.
2 49% interest in the trust holding the property was sold to a third party during the year. Remaining 51% interest has been reclassified as an investment
accounted for using the equity method,
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 at least 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 more frequently 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 2024, 170 out of 175 investment properties (including those classified as held for sale) 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. Where appropriate, 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. 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 factored 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 both the RICS Valuation - Global Standards and the
Australian Property Institute’s International Valuation 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 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 consider the impact of sustainability on market valuations, noting that valuers
should reflect markets and not lead them.
Dexus 2024 Annual Report
150
Note 9 Investment properties (continued)
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.
Fair value hierarchy
Range of unobservable inputs
Class of property
Inputs used to measure fair value
2024
2023
Office1
Level 3
Adopted capitalisation rate
4.75% - 7.75%
4.25% - 6.75%
Adopted discount rate
6.00% - 8.50%
5.75% - 8.00%
Adopted terminal yield
4.75% - 8.00%
4.25% - 7.00%
Net market rental (per sqm)
$414 - $1,782
$459 - $1,657
Industrial
Level 3
Adopted capitalisation rate
4.75% - 9.75%
4.00% - 10.00%
Adopted discount rate
6.13% - 10.50%
5.75% - 10.00%
Adopted terminal yield
5.13% - 9.75%
4.25% - 10.25%
Net market rental (per sqm)
$50 - $801
$50 - $765
Leased assets
Level 3
Adopted discount rate
3.51% - 8.92%
3.51% - 8.50%
1 Includes office developments and excludes car parks, retail and other.
Critical accounting estimates: inputs used to measure fair value of investment properties including those held within
investments accounted for using the equity method
Judgement is required in determining the following significant unobservable inputs:
– 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 at inception of the lease.
– 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 the current economic environment on the fair value of investment properties
The elevated levels of economic uncertainty, coupled with a lack of recent comparable transactions in the market, has
created heightened levels of judgment when deriving the fair value of the Group’s investment property portfolio.
Whilst the fair values of investment property can be relied upon at the date of valuation, a higher level of valuation
uncertainty than normal is assumed. A sensitivity analysis has been included in note 9(f), showing indicative movements in
investment property valuations should certain significant unobservable inputs differ by reasonably possible amounts from
those assumed in the valuations.
f.
Sensitivity information
Significant movement in any one of the valuation 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:
Office
Industrial
2024
2023
2024
2023
$m
$m
$m
$m
A decrease of 25 basis points in the adopted capitalisation rate
409.8
550.4
147.2
183.6
An increase of 25 basis points in the adopted capitalisation rate
(377.3)
(500.0)
(134.2)
(165.3)
A decrease of 25 basis points in the adopted discount rate
355.1
456.5
112.7
139.0
An increase of 25 basis points in the adopted discount rate
(330.4)
(421.3)
(105.0)
(128.2)
A decrease of 5% in the net market rental (per sqm)
(475.2)
(546.0)
(153.1)
(165.6)
An increase of 5% in the net market rental (per sqm)
475.2
546.0
153.1
165.6
151
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Performance
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Overview
Note 9 Investment properties (continued)
f. Sensitivity information (continued)
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 would offset the impact to fair value of an increase in the net market
rent. A decrease (tightening) in the adopted capitalisation rate would also offset the impact to fair value of a decrease in the
net market rent. Directionally opposite changes in the net market rent and the adopted capitalisation rate would increase the
impact to fair value.
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 would offset the impact to fair value of a
decrease (tightening) in the adopted terminal yield. A decrease (tightening) in the discount rate would offset the impact to fair
value of an increase (softening) in the adopted terminal yield. Directionally similar changes in the adopted discount rate and
the adopted terminal yield would 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.
Dexus 2024 Annual Report
152
Note 10 Investments accounted for using the equity method
a. Interest in joint ventures and associates
The following investments are accounted for using the equity method of accounting in the Consolidated Financial Statements.
All entities were formed in Australia and their principal activity is either property or infrastructure related investment in Australia
or investment in Australian and global listed real estate and infrastructure investment trusts.
Ownership interest
2024
2023
2024
2023
Name of entity
%
%
$m
$m
Dexus Office Trust Australia (DOTA)
50.0
50.0
1,715.9
2,159.7
Dexus 80C Trust
75.0
75.0
991.4
1,177.1
Dexus Martin Place Trust
50.0
50.0
832.4
919.0
Dexus Australian Logistics Trust (DALT)
51.0
51.0
731.5
730.1
Dexus Australian Logistics Trust No.2 (DALT2)
51.0
51.0
580.7
584.6
Bent Street Trust
33.3
33.3
338.3
378.3
Dexus Wholesale Australian Property Fund (DWAPF)
25.0
18.9
323.4
319.8
Jandakot City Holdings Trust (JCH)
33.4
33.4
318.0
317.8
Dexus 480 Q Holding Trust
50.0
50.0
316.8
357.1
AAIG Holding Trust
49.4
49.4
315.8
326.6
Dexus Industrial Trust Australia (DITA)
50.0
50.0
299.8
301.7
Dexus Healthcare Property Fund (DHPF)1
16.1
16.4
219.8
241.3
Dexus Kings Square Trust
50.0
50.0
211.2
231.5
Dexus Industria REIT (DXI)
17.5
17.5
181.8
193.0
Dexus Australian Logistics Trust No.3 (DALT3)
51.0
51.0
134.5
125.6
Dexus Community Infrastructure Fund (COMMIF)
9.3
5.1
128.1
73.1
Dexus Wholesale Shopping Centre Fund (DWSF)2
5.3
—
123.8
—
Dexus Diversified Infrastructure Trust (DDIT)3
5.1
—
102.7
—
Dexus Eagle Street Pier Trust
50.0
50.0
102.5
53.1
Other4
637.1
560.6
Total assets - investments accounted for using the equity method5
8,605.5
9,050.0
1 In October 2023, DHPF raised equity resulting in a dilution of the Group’s interest from 16.4% to 16.1%.
2 In July 2023, the Group acquired a 5.3% interest in DWSF.
3 In October 2023, DXO acquired a 5.1% interest in DDIT.
4 The Group also has interests in a number of immaterial joint ventures and associates that are accounted for using the equity method.
5 These investments are accounted for using the equity method as a result of the Group having either significant influence over the financial and
operating policy decisions of the associate or joint control over the associate under contractual arrangements requiring unanimous decisions on all
relevant matters.
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. If an indicator of impairment is identified, 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 of disposal) with its carrying amount. Impairment losses of $0.7 million losses were recognised during
the year (2023: impairment losses of $3.2 million were recognised).
c. Summarised financial information for individually material equity accounted investments
The following table provides summarised financial information for the joint ventures and associates accounted for using the
equity method 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.
153
Investor information
Financial report
Directors’ report
Governance
Performance
Approach
Overview
Dexus Office Trust Australia
Dexus 80C Trust
Dexus Martin Place Trust
2024
2023
2024
2023
2024
2023
Statement of Financial Position
$m
$m
$m
$m
$m
$m
Cash and cash equivalents
40.6
32.8
5.0
6.1
8.7
8.6
Other current assets
19.2
16.5
14.7
18.3
3.5
3.0
Non-current assets
3,426.5
4,312.4
1,332.0
1,582.0
1,676.7
1,870.9
Current borrowings
—
—
—
—
—
—
Other current liabilities
(53.1)
(42.3)
(29.9)
(36.9)
(24.0)
(44.6)
Non-current borrowings
—
—
—
—
—
—
Other non-current liabilities
(1.4)
—
—
—
—
—
Net assets
3,431.8
4,319.4
1,321.8
1,569.5
1,664.9
1,837.9
Reconciliation to carrying amounts:
Opening balance
4,319.4
4,816.8
1,569.5
1,651.1
1,837.9
1,985.9
Additions/(redemptions)
56.6
142.1
16.4
18.9
34.9
91.2
Profit/(loss) for the year
(480.9)
(321.1)
(202.6)
(42.9)
(138.1)
(177.3)
Distributions received/receivable
(463.3)
(318.4)
(61.5)
(57.6)
(69.8)
(61.9)
Closing balance
3,431.8
4,319.4
1,321.8
1,569.5
1,664.9
1,837.9
Group's share in $m
1,715.9
2,159.7
991.4
1,177.1
832.4
919.0
Notional goodwill
—
—
—
—
—
—
Group's carrying amount
1,715.9
2,159.7
991.4
1,177.1
832.4
919.0
Statement of Comprehensive Income
Revenue
223.0
226.2
89.2
79.5
94.6
101.2
Interest income
2.7
1.5
0.9
0.7
0.7
0.2
Finance costs
(0.1)
(0.8)
—
—
—
—
Income tax (expense)/benefit
—
—
—
—
—
—
Net profit/(loss)
(480.9)
(321.1)
(202.6)
(42.9)
(138.1)
(177.3)
Total comprehensive income/(loss)
(480.9)
(321.1)
(202.6)
(42.9)
(138.1)
(177.3)
Jandakot City Holdings Trust
Dexus 480 Q Holding Trust
AAIG Holding Trust
2024
2023
2024
2023
2024
2023
Statement of Financial Position
$m
$m
$m
$m
$m
$m
Cash and cash equivalents
18.0
24.2
8.5
2.5
14.5
17.9
Other current assets
2.3
2.0
2.7
1.4
2.3
3.8
Non-current assets
1,459.1
1,443.5
640.2
725.3
1,090.3
1,113.5
Current borrowings
—
—
—
—
—
—
Other current liabilities
(17.5)
(25.0)
(17.8)
(14.9)
(20.0)
(23.5)
Non-current borrowings
(318.7)
(318.7)
—
—
(447.5)
(450.0)
Other non-current liabilities
(190.5)
(174.9)
—
—
—
—
Net assets
952.7
951.1
633.6
714.3
639.6
661.7
Reconciliation to carrying amounts:
Opening balance
951.1
747.8
714.3
764.1
661.7
694.2
Additions/(redemptions)
33.6
173.5
28.5
8.6
—
2.9
Profit/(loss) for the year
21.9
62.0
(68.4)
(14.3)
17.1
3.8
Distributions received/receivable
(53.9)
(32.2)
(40.8)
(44.1)
(39.2)
(39.2)
Closing balance
952.7
951.1
633.6
714.3
639.6
661.7
Group's share in $m
318.0
317.8
316.8
357.1
315.8
326.6
Notional goodwill
—
—
—
—
—
—
Group's carrying amount
318.0
317.8
316.8
357.1
315.8
326.6
Statement of Comprehensive Income
Revenue
98.4
69.8
43.8
49.8
87.9
71.7
Interest income
0.7
0.5
0.2
—
15.5
15.3
Finance costs
(23.5)
(22.7)
—
—
(25.9)
(19.6)
Income tax (expense)/benefit
—
—
—
—
—
—
Net profit/(loss)
21.9
62.0
(68.4)
(14.3)
17.1
3.8
Total comprehensive income/(loss)
21.9
62.0
(68.4)
(14.3)
17.1
3.8
Note 10 Investments accounted for using the equity method (continued)
c. Summarised financial information for individually material joint ventures and associates (continued)
Dexus 2024 Annual Report
154
Dexus Australian Logistics
Trust
Dexus Australian Logistics
Trust No.2
Bent Street Trust
Dexus Wholesale Australian
Property Fund
2024
2023
2024
2023
2024
2023
2024
2023
$m
$m
$m
$m
$m
$m
$m
$m
16.2
18.9
14.6
13.2
6.5
4.8
4.5
4.8
5.9
5.4
4.9
2.8
1.8
1.5
13.5
10.1
1,429.0
1,426.0
1,133.7
1,139.9
1,023.0
1,146.0
1,869.6
2,410.0
—
—
—
—
—
—
—
—
(16.7)
(18.8)
(14.6)
(9.7)
(16.4)
(17.3)
(78.6)
(44.0)
—
—
—
—
—
—
(514.8)
(690.3)
—
—
—
—
—
—
—
—
1,434.4
1,431.5
1,138.6
1,146.2
1,014.9
1,135.0
1,294.2
1,690.6
1,431.5
1,378.6
1,146.2
1,067.2
1,135.0
1,158.9
1,690.6
—
—
—
54.6
70.8
25.4
6.0
(96.3)
1,787.8
49.3
98.5
(30.7)
33.1
(96.7)
17.1
(246.7)
(31.2)
(46.4)
(45.6)
(31.5)
(24.9)
(48.8)
(47.0)
(53.4)
(66.0)
1,434.4
1,431.5
1,138.6
1,146.2
1,014.9
1,135.0
1,294.2
1,690.6
731.5
730.1
580.7
584.6
338.3
378.3
323.4
319.8
—
—
—
—
—
—
—
—
731.5
730.1
580.7
584.6
338.3
378.3
323.4
319.8
78.8
70.4
48.9
41.4
61.8
59.5
164.2
126.6
0.9
0.5
0.4
0.3
0.3
—
0.9
0.4
—
—
—
—
—
—
(40.0)
(27.3)
—
—
—
—
—
—
—
—
49.3
98.5
(30.7)
33.1
(96.7)
17.1
(246.7)
(31.2)
49.3
98.5
(30.7)
33.1
(96.7)
17.1
(246.7)
(31.2)
Dexus Industrial Trust Australia
Dexus Healthcare Property
Fund
Dexus Kings Square Trust
Dexus Industria REIT
2024
2023
2024
2023
2024
2023
2024
2023
$m
$m
$m
$m
$m
$m
$m
$m
7.0
7.4
50.1
77.3
18.3
4.5
4.6
5.7
2.0
2.1
54.2
7.4
0.9
0.8
12.8
104.3
598.3
601.6
1,652.7
1,618.7
410.2
466.0
1,361.1
1,451.8
—
—
—
—
—
—
(0.5)
(0.4)
(7.7)
(7.6)
(74.2)
(32.9)
(7.1)
(8.3)
(29.0)
(34.6)
—
—
(297.5)
(177.0)
—
—
(266.0)
(379.3)
—
—
(21.4)
(22.1)
—
—
(45.1)
(45.8)
599.6
603.5
1,363.9
1,471.4
422.3
463.0
1,037.9
1,101.7
603.5
600.2
1,471.4
1,057.2
463.0
500.7
1,101.7
1,153.5
—
—
25.5
440.0
16.7
2.3
—
—
17.9
23.0
(78.4)
16.1
(28.2)
(11.3)
(11.8)
0.2
(21.8)
(19.7)
(54.6)
(41.9)
(29.2)
(28.7)
(52.0)
(52.0)
599.6
603.5
1,363.9
1,471.4
422.3
463.0
1,037.9
1,101.7
299.8
301.7
219.8
241.3
211.2
231.5
181.8
193.0
—
—
—
—
—
—
—
—
299.8
301.7
219.8
241.3
211.2
231.5
181.8
193.0
28.0
25.2
96.6
55.0
36.4
38.2
85.5
75.1
0.4
0.2
0.8
1.2
—
—
0.3
0.1
—
—
(15.4)
(6.6)
—
—
(12.5)
(16.5)
—
—
—
—
—
—
1.4
2.1
17.9
23.0
(78.4)
16.1
(28.2)
(11.3)
(11.8)
0.2
17.9
23.0
(78.4)
16.1
(28.2)
(11.3)
(11.8)
0.2
155
Investor information
Financial report
Directors’ report
Governance
Performance
Approach
Overview
Note 10 Investments accounted for using the equity method (continued)
c. Summarised financial information for individually material equity accounted investments (continued)
Dexus Australian Logistics
Trust No.3
Dexus Community
Infrastructure Fund
Dexus Wholesale Shopping
Centre Stapled Fund
2024
2023
2024
2023
2024
2023
Statement of Financial Position
$m
$m
$m
$m
$m
$m
Cash and cash equivalents
8.7
1.4
19.0
22.7
18.5
—
Other current assets
1.7
2.1
65.1
61.4
(2.0)
—
Non-current assets
262.4
248.4
1,615.4
1,664.8
2,764.1
—
Current borrowings
—
—
—
—
—
—
Other current liabilities
(8.3)
(5.0)
(194.4)
(187.0)
(70.4)
—
Non-current borrowings
—
—
(130.3)
(131.2)
(394.0)
—
Other non-current liabilities
—
—
—
—
2.5
—
Net assets
264.5
246.9
1,374.8
1,430.7
2,318.7
—
Reconciliation to carrying amounts:
Opening balance
246.9
214.5
1,430.7
—
—
—
Additions/(redemptions)
18.9
37.6
0.9
1,450.0
2,400.3
—
Profit/(loss) for the year
6.8
2.5
29.8
55.4
36.4
—
Distributions received/receivable
(8.1)
(7.7)
(86.6)
(74.7)
(118.0)
—
Closing balance
264.5
246.9
1,374.8
1,430.7
2,318.7
—
Group's share in $m
134.5
125.6
128.1
73.1
123.8
—
Notional goodwill
—
—
—
—
—
—
Group's carrying amount
134.5
125.6
128.1
73.1
123.8
—
Statement of Comprehensive Income
Revenue
13.8
12.2
91.1
98.1
153.0
—
Interest income
0.1
0.1
0.4
0.2
1.2
—
Finance costs
—
—
(5.1)
(3.8)
(35.1)
—
Income tax (expense)/benefit
—
—
(0.3)
(0.3)
(0.4)
—
Net profit/(loss)
6.8
2.5
44.1
55.4
36.4
—
Total comprehensive income/(loss)
6.8
2.5
44.1
55.4
36.4
—
Dexus 2024 Annual Report
156
Dexus Diversified Infrastructure
Trust
Dexus Eagle Street Pier Trust
Other1
Total
2024
2023
2024
2023
2024
2023
2024
2023
$m
$m
$m
$m
$m
$m
$m
$m
57.9
—
1.0
2.5
94.1
68.2
416.3
323.5
2,006.1
—
1.1
2.0
184.8
1,002.9
2,397.5
1,247.8
—
—
216.8
107.8
3,445.2
2,718.0
27,406.3
26,046.6
—
—
(0.5)
(0.5)
(21.6)
(70.2)
(22.6)
(71.1)
(50.2)
—
(12.8)
(4.1)
(109.1)
(103.1)
(851.8)
(659.6)
—
—
—
—
(246.9)
(290.9)
(2,615.7)
(2,437.4)
—
—
(2.8)
(3.2)
(312.3)
(103.7)
(571.0)
(349.7)
2,013.8
—
202.8
104.5
3,034.2
3,221.2
26,159.0
24,100.1
—
—
104.5
77.3
3,221.2
2,398.5
24,100.1
20,266.5
1,960.5
—
106.2
73.8
77.5
1,034.2
4,760.2
5,339.7
123.3
—
(7.9)
(46.6)
(145.4)
(129.3)
(1,233.3)
(462.3)
(70.0)
—
—
—
(119.1)
(82.2)
(1,468.0)
(1,043.8)
2,013.8
—
202.8
104.5
3,034.2
3,221.2
26,159.0
24,100.1
102.7
—
102.5
53.1
636.8
557.3
8,605.2
9,046.7
—
—
—
—
0.3
3.3
0.3
3.3
102.7
—
102.5
53.1
637.1
560.6
8,605.5
9,050.0
134.8
—
—
0.2
173.0
119.0
1,802.8
1,319.1
1.2
—
0.1
—
17.1
3.0
44.8
24.2
(0.1)
—
(0.1)
(0.1)
(15.7)
(28.0)
(173.5)
(125.4)
—
—
—
—
(0.1)
(5.0)
0.6
(3.2)
123.3
—
(7.9)
(46.6)
(145.7)
(129.3)
(1,219.3)
(462.3)
123.3
—
(7.9)
(46.6)
(145.7)
(129.3)
(1,219.3)
(462.3)
1 The Group also has interests in a number of immaterial joint ventures and associates that are accounted for using the equity method.
157
Investor information
Financial report
Directors’ report
Governance
Performance
Approach
Overview
Note 11 Investments accounted for at fair value
The Group’s investments accounted for at fair value consist of interests in Australian trusts, managed property funds and
infrastructure assets. Financial assets are initially recognised at fair value, 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. Financial assets at fair value through profit or loss
2024
2023
$m
$m
Equity investments in Australian managed funds
246.4
225.1
Investments classified as debt in Australian trusts
97.3
206.8
Total financial assets at fair value through profit or loss
343.7
431.9
b. Investment in associates accounted for at fair value
2024
2023
$m
$m
Equity investments in infrastructure assets
9.9
—
Total investments in associates accounted for at fair value
9.9
—
c. Total investments accounted for at fair value
2024
2023
$m
$m
Total financial assets at fair value through profit or loss
343.7
431.9
Total investments in associates accounted for at fair value
9.9
—
Total Investments accounted for at fair value1
353.6
431.9
1 Refer to note 14(b)(iv) for the fair value measurement.
d. Amounts recognised in profit or loss
During the year, the following gains/(losses) were recognised in profit or loss:
2024
2023
$m
$m
Fair value loss on equity investments in Australian managed funds
(36.1)
(1.1)
Fair value loss on investments classified as debt in Australian trusts
(267.1)
(27.2)
Fair value gain on equity investments in infrastructure assets
0.6
—
Total fair value losses on investments accounted for at fair value
(302.6)
(28.3)
e. Equity price risks
The Group is exposed to equity price risk arising from equity investments in Australian managed funds classified as financial
assets 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 $24.6
million (2023: $22.5 million).
f. Valuation risks
The Group is exposed to valuation risk on underlying investment property within investments classified as debt in Australian
trusts that form part of financial assets at fair value through profit or loss. The estimated impact of changes in valuations of
underlying investment property at the end of the reporting period, assuming the adopted capitalisation rate had been 25
basis points lower or higher while all other variables were held constant, would increase/(decrease) net profit by $48.3 million/
($61.9 million) respectively (2023: $77.0 million/($68.9 million)).
The Group is exposed to valuation risk on the equity investments in infrastructure assets classified as investment in associates
accounted for at fair value. The estimated impact of changes in valuations of underlying investments at the end of the
reporting period, assuming the adopted discount rate had been 25 basis points lower or higher while all other variables were
held constant, would increase/(decrease) net profit by $0.2 million/($0.2 million) respectively (2023: N/A).
Dexus 2024 Annual Report
158
Note 12 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, development costs 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. Commencement of development activities occur
immediately after the transfer.
Critical accounting 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.
a. Development properties held for sale
2024
2023
$m
$m
Current assets
Development properties and trading assets
60.2
30.6
Total current assets - inventories
60.2
30.6
b. Reconciliation
2024
2023
Note
$m
$m
Opening balance
30.6
54.4
Transfer from investment properties
9
60.0
25.7
Disposals
(33.8)
(60.4)
Additions
3.4
10.9
Closing balance
60.2
30.6
Note 13 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 2024, the balance relates to 130 George Street, Parramatta NSW and 28 Jones Road, Brooklyn VIC.
At 30 June 2023, the balance related to 20 Distribution Drive (Lot CC), Truganina VIC, 8 Nicholson Street, Melbourne VIC, 84
Lahrs Road, Ormeau QLD, 44 Market Street, Sydney NSW, Axxess Corporate Park, Mount Waverley VIC, 1 Margaret Street,
Sydney NSW and 130 George Street, Parramatta NSW.
Capital and financial risk management
and working capital
159
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Governance
Performance
Approach
Overview
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 14 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) including details of the various derivative financial
instruments entered into by the Group.
The Board of the Responsible Entity 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: Interest bearing liabilities in note 15, Lease liabilities in note 16, and Commitments and contingencies in note 17
– Equity: Contributed equity in note 18 and Reserves in note 19.
Note 20 provides a breakdown of the working capital balances held in the Consolidated Statement of Financial Position.
Note 14 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 Executive Committee and
Capital Markets Committee.
The Board has appointed an Executive 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
Executive Committee.
The Capital Markets Committee is a management committee that is accountable to the Board. It convenes at least four times
per annum 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
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.
2024
2023
$m
$m
Total interest bearing liabilities1,3
4,650.2
5,087.7
Total tangible assets2
14,704.3
17,316.7
Gearing ratio
31.6 %
29.4 %
Gearing ratio (look-through)4
32.6 %
30.3%
1 Total interest bearing liabilities excludes deferred borrowing costs and includes the impact of foreign currency fluctuations of cross-currency interest
rate swaps.
2 Total tangible assets comprise total assets less intangible assets and derivatives.
3 Total borrowings excludes borrowings in equity accounted investments and the Group’s share of co-investments in pooled funds.
4 Adjusted for cash and debt in equity accounted investments and excluding the Group’s share of co-investments in pooled funds. Look-through
gearing including the Group’s share of equity accounted co-investments in pooled funds was 33.9% as at 30 June 2024 (2023: 31.7%).
Dexus 2024 Annual Report
160
Note 14 Capital and financial risk management (continued)
a. Capital risk management (continued)
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 2024 and 2023 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. The
Responsible Entity 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. The Responsible Entity 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.
AFSLs have been issued to the following wholly owned entities:
– Dexus Wholesale Property Limited (DWPL), as the responsible entity for Dexus Wholesale Property Fund (DWPF)
– Dexus Wholesale Management Limited (DWML), as the trustee of third party managed funds
– Dexus Wholesale Funds Limited (DWFL), as the responsible entity for Dexus Healthcare Property Fund (DHPF)
– Dexus Investment Management Limited (DIML), as the responsible entity for Dexus Industrial Fund (DIF)
– Dexus Asset Management Limited (DXAM), as the responsible entity of Dexus Convenience Retail REIT (DXC), Dexus Industria
REIT (DXI) and other third party managed funds
– Dexus RE Limited (DXRE), as the responsible entity for APD Trust, a wholly owned entity
– Dexus Capital Funds Management Limited (DCFM), as the responsible entity of third party managed funds
– Dexus Capital Investment Services Pty Limited (DCIS), as the trustee of third party managed funds
– Dexus Capital Investors Limited (DCIL), as the trustee of third party managed trusts
Certain group entities are subject to capital and liquidity requirements under their respective AFSLs. Refer to note 26 for further
details. All capital requirements were complied with during the year.
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.
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 cash and 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.
161
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Performance
Approach
Overview
Note 14 Capital and financial risk management (continued)
b. Financial risk management (continued)
i. Market risk (continued)
Interest rate risk (continued)
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 interest rate 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 2024, 90% (2023: 84%) of the interest bearing liabilities of the Group were hedged. The average hedged
percentage for the financial year was 92% (2023: 86%).
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:
June 2025
June 2026
June 2027
June 2028
June 2029
$m
$m
$m
$m
$m
A$ fixed rate debt
1,870.0
1,746.7
1,663.3
1,213.3
955.0
A$ interest rate derivatives
2,200.0
2,818.8
2,200.0
1,167.7
200.0
Combined fixed rate debt and
derivatives (A$ equivalent)
4,070.0
4,565.5
3,863.3
2,381.0
1,155.0
Hedge rate (%)
2.05 %
3.08 %
3.10 %
2.81 %
1.79 %
Amounts do not include fixed rate debt that has been swapped to floating rate debt through cross-currency interest rate
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.
2024
2023
(+/-) $m
(+/-) $m
+/- 1% (100 basis points)
5.1
7.0
Total A$ equivalent
5.1
7.0
The movement in interest expense is proportional to the movement in interest rates.
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 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.
2024
2023
(+/-) $m
(+/-) $m
+/- 1% (100 basis points)
70.8
63.7
Total A$ equivalent
70.8
63.7
Sensitivity analysis on fair value of cross-currency interest rate 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 short-term and long-term 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
interest rate swaps. The sensitivity analysis excludes the impact of hedge-accounted cross-currency interest rate swaps.
2024
2023
(+/-) $m
(+/-) $m
+/- 1% (100 basis points)
US$ (A$ equivalent)
0.0
0.0
Total A$ equivalent
0.0
0.0
Dexus 2024 Annual Report
162
Note 14 Capital and financial risk management (continued)
b. Financial risk management (continued)
i.
Market risk (continued)
Foreign currency risk
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 interest rate
swaps to reduce the risk that movements in foreign exchange rates will have an impact on security holder equity and net
tangible assets.
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 risk management through ensuring the Group has sufficient liquid assets, working capital and
borrowings facilities to cover short-term financial obligations; and
– Funding and refinancing liquidity risk 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.
2024
2023
Within
one
year
Between
one and
two years
Between
two and
five years
After
five
years
Within
one
year
Between
one and
two years
Between
two and
five years
After
five
years
$m
$m
$m
$m
$m
$m
$m
$m
Payables
(194.8)
—
—
—
(197.0)
—
—
—
Lease liabilities
(11.8)
(23.9)
(37.9)
(57.6)
(2.1)
(2.3)
(6.4)
(3.8)
Total payables and lease
liabilities
(206.6)
(23.9)
(37.9)
(57.6)
(199.1)
(2.3)
(6.4)
(3.8)
Interest bearing liabilities
Fixed interest rate liabilities
(297.1)
(531.0)
(1,533.3)
(1,612.4)
(525.6)
(293.6)
(1,810.7)
(1,789.8)
Floating interest rate liabilities
(141.5)
(696.3)
(1,119.5)
(403.6)
(121.0)
752.0
(1,045.7)
(405.0)
Total interest bearing liabilities
(438.6)
(1,227.3)
(2,652.8)
(2,016.0)
(646.6)
458.4
(2,856.4)
(2,194.8)
Derivative financial liabilities
Cash receipts
213.9
293.9
752.9
622.0
118.4
228.2
832.2
835.1
Cash payments
(191.8)
(216.0)
(592.2)
(562.5)
(120.8)
(200.8)
(649.4)
(714.7)
Total net derivative financial
instruments1
22.1
77.9
160.7
59.5
(2.4)
27.4
182.8
120.4
1 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
14(c) for fair value of derivatives. Refer to note 17(b) for financial guarantees.
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Performance
Approach
Overview
Note 14 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 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 Responsible Entity’s 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 2024 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 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 2024 is the carrying amounts of the 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 assets and liabilities:
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 net assets of the relevant fund. The unit prices and net asset values are largely driven by the fair
values of investment properties, infrastructure assets and derivatives held by the funds. Recent arm’s length transactions, if
any, are also taken into consideration. The fair value of equity investments in Australian managed funds 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.
Investments classified as debt in Australian trusts are measured at Level 3 using a fair value model.
Equity investments in infrastructure assets are recognised initially at fair value and measured as a Level 3 investment.
Subsequent to initial recognition, infrastructure assets are measured at fair value as determined by an independent valuer,
having appropriate recognised professional qualifications and relevant experience in the nature of the investment being
valued. The valuer applies the 'discounted cash flow method' where management's best estimate of expected future cash
flows are discounted to their present value using a market determined risk adjusted discount rate.
All derivative financial instruments were measured at Level 2 for the periods presented in this report.
All investment properties, infrastructure assets, listed securities and derivatives were appropriately measured at Level 1, 2 or 3,
within investments accounted for using the equity method for the periods presented in this report.
During the year, there were no transfers between Level 1, 2 and 3 fair value measurements.
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.
Dexus 2024 Annual Report
164
Note 14 Capital and financial risk management (continued)
b. Financial risk management (continued)
iv. Fair value (continued)
Material differences are identified only for the following borrowings:
2024
2024
2023
2023
Carrying Amount
Fair value
Carrying Amount
Fair value
Type
Maturity
($m)
($m)
($m)
($m)
USD borrowing
2025-2033
1,534.5
1,544.6
1,586.5
1,619.7
MTN
2026-2039
1,043.8
901.8
1,043.9
874.2
AUD USPP
2028-2039
325.0
308.2
325.0
300.2
Exchangeable note
2028
462.0
486.3
761.8
799.9
Critical accounting estimates: 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.
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 the following types of 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 interest rate swap contracts – the Group uses cross-currency interest rate 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)).
165
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Governance
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Approach
Overview
Note 14 Capital and financial risk management (continued)
c. Derivative financial instruments (continued)
Derivatives are measured at fair value with any changes in fair value recognised either in the Consolidated 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.
Fair value hedge – cross-currency interest rate 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
interest rate 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 interest rate 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
interest rate 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 interest rate 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.
Dexus 2024 Annual Report
166
Note 14 Capital and financial risk management (continued)
c. Derivative financial instruments (continued)
2024
2023
$m
$m
Current assets
Interest rate derivative contracts
60.6
64.7
Cross-currency interest rate swap contracts
67.9
33.9
Total current assets - derivative financial instruments
128.5
98.6
Non-current assets
Interest rate derivative contracts
59.0
105.0
Cross-currency interest rate swap contracts
262.1
280.5
Total non-current assets - derivative financial instruments
321.1
385.5
Current liabilities
Cross-currency interest rate swap contracts
21.7
6.6
Exchangeable note contracts
—
26.0
Total current liabilities - derivative financial instruments
21.7
32.6
Non-current liabilities
Cross-currency interest rate swap contracts
9.8
—
Exchangeable note contracts
24.3
53.4
Total non-current liabilities - derivative financial instruments
34.1
53.4
Net derivative financial instruments
393.8
398.1
The table below details a breakdown of the net fair value gain on derivatives in the Consolidated Statement of
Comprehensive Income.
2024
2023
$m
$m
Net fair value gain/(loss) of derivatives
Cross-currency interest rate swap contracts
13.9
(72.9)
Interest rate derivative contracts
(52.6)
(3.4)
Exchangeable note contracts
36.0
8.7
Total net fair value loss of derivatives
(2.7)
(67.6)
Effects of hedge accounting on the financial position and performance – quantitative information
The following table details the notional principal amounts and remaining terms of the hedging instrument (cross-currency
interest rate swap) at the end of the financial year:
Notional Amount of the Hedging Instrument ($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)
0.8676
0.8660
0.8397
0.7656
Average contracted fixed USD rate
2.2071
2.1684
2.2226
2.0608
Average notional amount
1,256.4
1,131.7
976.6
502.9
Interest rate risk - Cross currency interest rate swap (hedging foreign currency debt)1
Average contracted fixed USD rate
1.6625
1.6639
1.6529
1.6474
Average notional amount
1,256.4
1,131.7
976.6
502.9
1 Cross-currency interest rate swaps totalling 1,090 million (USD notional) have been split into cash flow hedge and fair value hedge relationships.
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Note 14 Capital and financial risk management (continued)
c. Derivative financial instruments (continued)
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.
Cash flow hedges
Fair value hedges
Cross currency
interest rate swaps
Cross currency
interest rate swaps
$m
$m
Current notional principal value of the hedging instrument
1,256.4
1,256.4
Carrying amount of the hedging instrument assets1
14.0
274.6
Cumulative change in fair value of the hedging instrument used for calculating
hedge ineffectiveness
13.7
274.6
Current fair value notional amount of the hedged item
—
(1,534.5)
Cumulative change in value of the hedged item used for calculating hedge
ineffectiveness
(19.0)
(278.1)
Balance in cash flow hedge reserve
(13.7)
—
Hedge ineffectiveness recognised in the Consolidated Statement of
Comprehensive Income 2
—
(0.9)
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.
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
Foreign
exchange risk
$m
Balance at 1 July 2023 (before tax)
19.1
Movement
Gain arising on changes in fair value of hedging instruments during the year
4.4
Changes in fair value of foreign currency basis spread during the year
(1.3)
Transfer out
(Gain) reclassified to profit or loss – hedged item has affected profit or loss
(9.2)
Loss arising on changes in fair value of foreign currency basis spread during the year
1.0
Balance at 30 June 2024 (before tax)
14.0
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 the Consolidated Statement of
Comprehensive Income 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 the Consolidated Statement of
Comprehensive Income. Refer to note 14(c) for further details.
All borrowings with contractual maturities greater than 12 months after reporting date are classified as non-current liabilities.
Dexus 2024 Annual Report
168
Note 15 Interest bearing liabilities (continued)
The following table summarises the Group's financing arrangements:
2024
2023
Note
$m
$m
Current
Unsecured
US senior notes1
a.
163.7
67.1
Exchangeable notes
e.
—
314.7
Total unsecured
163.7
381.8
Total current liabilities - interest bearing liabilities
163.7
381.8
Non-current
Unsecured
US senior notes1
a.
1,695.8
1,844.4
Bank loans
b.
1,471.2
1,545.1
Commercial paper
c.
95.0
77.5
Medium term notes
d.
1,043.8
1,043.9
Exchangeable notes
e.
462.0
447.1
Total unsecured
4,767.8
4,958.0
Deferred borrowing costs
(21.9)
(30.1)
Total non-current liabilities - interest bearing liabilities
4,745.9
4,927.9
Total interest bearing liabilities
4,909.6
5,309.7
1 Includes cumulative fair value adjustments amounting to $111.1 million (2023: $125.6 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
Note
Currency
Security
Maturity Date
Utilised
$m
Facility
Limit
$m
US senior notes (USPP)1
a.
US$
Unsecured
Dec-24 to Nov-32
1,645.6
1,645.6
US senior notes (USPP)
a.
A$
Unsecured
Jun-28 to Oct-38
325.0
325.0
Multi-option revolving credit facilities
b.
Multi
Currency
Unsecured
Sep-25 to May-32
1,468.0
4,100.0
Commercial paper
c.
A$
Unsecured
Dec-25
95.0
100.0
Medium term notes
d.
A$
Unsecured
Nov-25 to Aug-38
1,043.8
1,043.8
Exchangeable notes
e.
A$
Unsecured
Nov-27
462.0
462.0
Total
5,039.4
7,676.4
Bank guarantee facility in place2
(175.0)
Unused at balance date
2,462.0
1 Excludes fair value adjustments recorded in interest bearing liabilities in relation to effective fair value hedges.
2 Includes utilised bank guarantees of $139.7 million (2023: $140.9 million).
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 its assets and ensures that all
senior unsecured debt ranks pari passu.
a. US senior notes (USPP)
This includes a total of US$1,090 million and A$325 million of US senior notes with a weighted average maturity of April 2029.
US$1,090 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$4,100 million of facilities maturing between September 2025 and May 2032 with a weighted average maturity
of June 2028. A$175 million represents bank guarantee facilities available for utilisation for Australian Financial Services
Licences (AFSL) requirements and other business requirements including developments.
c. Commercial paper
This includes a total of A$100 million of Commercial Paper backed by a standby facility maturing in December 2025. 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$1.2 million is the net discount on the issue of these instruments.
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Note 15 Interest bearing liabilities (continued)
e. Exchangeable notes
This includes exchangeable notes with a face value of $500.0 million issued on 24 November 2022 and maturing in November
2027. The notes are exchangeable based on the exchange price (currently $8.84 representing approximately 56.5 million
securities) on the exchange date, at the election of the holder, until 10 days prior to maturity on 24 November 2027. Any
securities issued on exchange will rank equally with existing securities. If the notes are not exchanged, they will be redeemed
on maturity at 104.15% of face value. The notes pay a fixed coupon of 3.5% per annum.
During the year, the Group repaid and cancelled $325.0 million of exchangeable notes that were issued on 19 March 2019. In
March 2024, investors exercised their put option for an aggregate face value of A$323.2 million. On 5 April 2024, the Group
exercised a related call option for early repayment and cancellation of the remaining $1.8 million of exchangeable notes. The
repayments were funded from existing borrowing capacity.
Note 16 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. Instead, the Group recognises the lease payments associated with these leases as an expense
in the Consolidated Statement of Comprehensive Income as incurred 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
– Make good 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 7.06%. 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.
The following table details information relating to leases where the Group is a lessee.
2024
2023
Note
$m
$m
Current
Lease liabilities - ground leases
a.
0.9
0.9
Lease liabilities - other property leases
b.
10.9
1.2
Total current liabilities - lease liabilities
11.8
2.1
Non-current
Lease liabilities - ground leases
a.
5.8
6.5
Lease liabilities - other property leases
b.
75.0
6.0
Total non-current liabilities - lease liabilities
80.8
12.5
Total liabilities - lease liabilities
92.6
14.6
a. Lease liabilities – ground leases
Lease liabilities include ground leases at Parkade, 34-60 Little Collins Street, Melbourne and Waterfront Place, 1 Eagle Street,
Brisbane. Refer to note 9 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. Refer to the Consolidated Statement of
Financial Position for disclosure of the corresponding right-of-use asset.
Dexus 2024 Annual Report
170
Note 17 Commitments and contingencies
a. Commitments
Capital commitments
The following amounts represent capital expenditure as well as committed fit out or cash incentives contracted at the end of
each reporting period but not recognised as liabilities payable:
2024
2023
$m
$m
Investment properties
108.4
128.1
Investments accounted for using the equity method
569.2
446.8
Investments accounted for at fair value
661.6
740.9
Inventories and development management services
51.1
54.1
Non-current assets classified as held for sale
—
—
Total capital commitments
1,390.3
1,369.9
Lease receivable commitments
The future minimum lease payments receivable by the Group are:
2024
2023
$m
$m
Within one year
242.7
360.7
Later than one year but not later than five years
617.6
1,039.2
Later than five years
233.7
479.5
Total lease receivable commitments
1,094.0
1,879.4
b. Contingencies
DPT and DXO are guarantors of A$7,676.4 million (2023: A$8,042.8 million) of interest bearing liabilities (refer to note 15). 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$139.7 million, comprising A$91.2 million held to comply with the terms of the Australian
Financial Services Licences (AFSL) and A$48.5 million largely in respect of developments, with $35.3 million available for other
corporate purposes.
The above guarantees are issued in respect of the Group and represent an additional commitment to those already existing
in interest bearing liabilities on the Consolidated Statement of Financial Position.
Outgoings are excluded from contingencies as they are expensed when incurred.
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 Notes to the Consolidated Financial Statements, which should be brought to the attention of security
holders as at the date of these Consolidated Financial Statements.
Note 18 Contributed equity
2024
2023
No. of
securities
No. of
securities
Opening balance
1,075,565,246
1,075,565,246
Closing balance
1,075,565,246
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.
During the 12 months to 30 June 2024, no Dexus securities were issued or cancelled.
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Note 19 Reserves
2024
2023
$m
$m
Asset revaluation reserve
—
42.7
Cash flow hedge reserve
13.7
18.5
Foreign currency basis spread reserve
0.3
0.6
Security-based payments reserve
20.7
14.9
Treasury securities reserve
(20.7)
(20.8)
Foreign currency translation reserve
(0.2)
—
Total reserves
13.8
55.9
Movements:
Asset revaluation reserve
Opening balance
42.7
42.7
Transfer to retained earnings
(42.7)
—
Closing balance
—
42.7
Cash flow hedge reserve
Opening balance
18.5
16.8
Changes in the fair value of cash flow hedges
(4.8)
1.7
Closing balance
13.7
18.5
Foreign currency basis spread reserve
Opening balance
0.6
0.4
Changes in cost of hedge reserve
(0.3)
0.2
Closing balance
0.3
0.6
Security-based payments reserve
Opening balance
14.9
13.3
Issue of securities to employees
(11.7)
(8.8)
Security-based payments expense
17.5
10.4
Closing balance
20.7
14.9
Treasury securities reserve
Opening balance
(20.8)
(22.1)
Issue of securities to employees
11.7
8.8
Purchase of securities
(11.6)
(7.5)
Closing balance
(20.7)
(20.8)
Foreign currency translation reserve
Opening balance
—
—
Exchange differences on translation of foreign operations
(0.2)
—
Closing balance
(0.2)
—
Nature and purpose of reserves
Asset revaluation reserve
The asset revaluation reserve is used to record the fair value adjustment arising on a business combination.
The balance of this reserve was transferred to retained profits during the year.
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 25
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 DSTI, LTI
and Senior Management Retention Awards. As at 30 June 2024, DXS held 2,900,349 stapled securities which includes 1,657,718
acquired during the year net of 1,302,637 vested during the year (2023: 931,986).
Foreign currency translation reserve
The foreign currency translation reserve is used to record the exchange differences arising from the translation of the financial
operations of foreign subsidiaries.
Dexus 2024 Annual Report
172
Note 20 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.
2024
2023
$m
$m
Rent receivable1
11.3
7.5
Less: provision for expected credit losses
(3.2)
(4.0)
Total rent receivables
8.1
3.5
Distributions receivable
63.9
58.1
Fees receivable
106.5
79.6
Other receivables
40.1
10.6
Total other receivables
210.5
148.3
Total receivables
218.6
151.8
1 Rent receivable includes outgoings recoveries.
The provision for expected credit losses for rent receivables (which includes outgoings recoveries) as at 30 June 2024 was
determined as follows:
$m
Sector
30 June 2024
Office
Industrial
Total
0-30 days1
1.2
0.1
1.3
31-60 days
0.2
—
0.2
61-90 days
0.1
—
0.1
91+ days
1.4
0.2
1.6
Total provision for expected credit losses
2.9
0.3
3.2
1 0-30 days includes deferred rent receivable but not due.
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:
2024
2023
$m
$m
Opening balance
4.0
7.6
Provision recognised/(reversed) in profit or loss during the year
0.1
(3.6)
Receivables written off during the year as uncollectible
(0.9)
—
Closing balance
3.2
4.0
Note 20 Working capital
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Note 20 Working capital (continued)
c. Other current assets
2024
2023
$m
$m
Prepayments
18.1
20.8
Net receivable acquired through business combination1
—
42.7
Other
58.2
40.3
Total other current assets
76.3
103.8
1 Refer to note 22 for details.
d. Payables
2024
2023
$m
$m
Trade creditors
31.1
47.1
Accruals
42.1
43.1
Accrued capital expenditure
53.2
29.6
Prepaid income
14.3
20.5
Accrued interest
37.6
37.2
Other payables
16.5
19.5
Total payables
194.8
197.0
e. Provisions
A provision is recognised when an 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.
The provision for employee benefits also includes the employee incentives schemes which are shown separately in note 25.
2024
2023
$m
$m
Current
Provision for distribution
229.2
253.8
Provision for employee benefits
75.8
57.7
Provision for land tax
0.4
0.4
Total current provisions
305.4
311.9
2024
2023
$m
$m
Non-current
Provision for employee benefits
7.8
10.8
Total non-current provisions
7.8
10.8
2024
2023
$m
$m
Provision for distribution
Opening balance
253.8
271.0
Additional provisions
516.3
555.0
Payment of distributions
(540.9)
(572.2)
Closing balance
229.2
253.8
A provision for distribution has been raised for the period ended 30 June 2024. This distribution is to be paid on 29 August
2024.
Other disclosures
Dexus 2024 Annual Report
174
In this section
This section includes other information that must be disclosed to comply with the Accounting Standards, the Corporations
Act 2001 or the Corporations Regulations.
Note 21 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 subsidiaries of the Group, which entitle the Group to
management fee revenue from both finite life trusts and indefinite life trusts. Those management rights that are deemed to
have a finite useful life held at a value of $5.8 million (2023: $8.7 million) are measured at cost and amortised using the straight
line method over their estimated useful lives of three to five years. Management rights that are deemed to have an indefinite
life are held at a value of $591.6 million (2023: $591.3 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 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 of disposal and value
in use. For the purposes of assessing impairment, management rights 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). Goodwill has been grouped at the lowest level at which the goodwill is monitored, which may
comprise of a number of cash generating units to which the goodwill relates. Impairment charges recorded in relation to
management rights may be reversed at a future point in time to the extent that the recoverable amount exceeds the carrying
amount. Impairment charges recorded in relation to goodwill cannot be reversed.
Where relevant, the value-in-use has been determined using a five-year discounted cash flow model and applying a terminal
multiple in year five. The fair value less costs of disposal has been determined using a five-year discounted cash flow model
and applying a terminal multiple in year five (2023: a three-year discounted cash flow model and applying a terminal growth
rate in year three). Forecasts were based on projected returns in light of current market conditions and hence classified as a
Level 3 fair value.
Key assumptions: management rights
Judgement is required in determining the following key assumptions used to calculate:
Value in use
– Terminal multiple range of 5 to 12 times (2023: 5 to 12 times) has been applied incorporating an appropriate risk premium.
– Cash flows have been discounted at a post-tax rate of 9.0% (2023: 9.0%) based on externally published weighted
average cost of capital for an appropriate peer group plus an appropriate premium for risk.
– An income growth rate range of 3.0% to 5.5% (2023: 3.0% to 5.5%) has been applied to forecast cash flows based on past
performance and management’s estimate of the future cash flows to be derived from the cash generating units.
Fair value less costs of disposal
– A terminal multiple range of 6 to 12 times (2023: terminal growth rate: 0% to 2.5%) has been applied incorporating an
appropriate risk premium.
– Cash flows have been discounted at a post-tax rate range of 8.0% to 11.0% (2023: 8.0% to 11.0%) based on externally
published weighted average cost of capital for an appropriate peer group plus an appropriate premium for risk.
– An income growth rate range of 3.0% to 5.0% has been applied to forecast cash flows based on past performance and
management’s estimate of the future cash flows to be derived from the cash generating units.
175
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Financial report
Directors’ report
Governance
Performance
Approach
Overview
Sensitivity information
A significant movement in any one of the inputs listed in the table above as at the reporting date would result in a change in
the recoverable amount of the Group’s management rights and goodwill.
The estimated impact of a change in certain significant inputs would result in the following impairment of intangibles:
Intangibles
Assumption
2024
2023
Value in use
$m
$m
An increase of 0.25% in the adopted discount rate
(0.4)
—
A decrease of 1x the adopted terminal multiple
(4.6)
(6.3)
A decrease of 1% in the adopted income growth rate
(3.0)
(3.9)
Fair value less costs of disposal
An increase of 0.25% in the adopted discount rate
—
(3.8)
A decrease of 1x the adopted terminal multiple
—
N/A1
A decrease of 1% in the adopted terminal growth rate
N/A1
(16.2)
A decrease of 1% in the adopted income growth rate
—
N/A1
1 The fair value less costs of disposal has been determined using a five-year discounted cash flow model and applying a terminal multiple in year five
(2023: a three-year discounted cash flow model and applying a terminal growth rate in year three).
2024
2023
$m
$m
Management Rights
Opening balance
Dexus Wholesale Property Fund (indefinite useful life)
263.2
261.9
Direct property funds (indefinite useful life)
42.0
42.0
Direct property funds (finite useful life)
0.3
0.7
APN funds (indefinite useful life)
106.0
129.8
APN funds (finite useful life)
0.1
0.1
AMP Capital funds (indefinite useful life)
180.2
—
AMP Capital funds (finite useful life)
8.2
—
Movements
Dexus Wholesale Property Fund (indefinite useful life)1
0.2
1.3
AMP Capital funds (indefinite useful life)2
—
180.2
AMP Capital funds (finite useful life)2
—
8.7
Impairment of management rights
—
(24.1)
Amortisation charge
(2.8)
(0.6)
Closing balance
597.4
600.0
Cost
635.7
635.5
Accumulated amortisation
(9.7)
(6.9)
Accumulated impairment
(28.6)
(28.6)
Total management rights
597.4
600.0
Goodwill
Opening balance
66.5
49.9
Additions3
—
52.5
Impairment
—
(35.9)
Closing balance
66.5
66.5
Cost
107.4
107.4
Accumulated impairment
(40.9)
(40.9)
Total goodwill
66.5
66.5
Software
Opening balance
4.4
3.6
Additions
0.8
2.3
Amortisation charge
(1.3)
(1.5)
Closing balance
3.9
4.4
Cost
5.4
7.7
Accumulated amortisation
(1.5)
(3.3)
Cost - Fully amortised assets written off
(3.1)
(0.1)
Accumulated amortisation - Fully amortised assets written off
3.1
0.1
Total software
3.9
4.4
Total non-current intangible assets
667.8
670.9
1 Dexus has incurred costs to date in connection with Dexus Wholesale Property Limited, a Dexus entity, being appointed as responsible entity of Dexus
ADPF. Dexus may incur further costs, including but not limited to stamp duty and legal costs in relation to the merger of DWPF and Dexus ADPF.
2 Acquired as part of the AMP Capital transaction.
3 The excess between the cash consideration transferred and the fair value of the net identifiable assets acquired as part of the AMP Capital
transaction has been recorded as goodwill.
Note 21 Intangible assets (continued)
Dexus 2024 Annual Report
176
Note 22 Business combination
In 2022, Dexus announced the acquisition of the real estate and domestic infrastructure equity business of Collimate Capital
Limited (Collimate Capital or AMP Capital) from AMP Limited ("AMP Capital transaction"). The transaction occurred under a
two-stage completion process. First Completion occurred on 24 March 2023 with consideration of $175.0 million paid on this
date. Final Completion occurred on 30 November 2023 following the satisfaction of the condition precedent relating to the
transfer of AMP’s ownership interest in China Life AMP Asset Management (“CLAMP”) out of entities being acquired by Dexus
under the AMP Capital transaction. Contingent consideration of $50.0 million was paid and Dexus Capital Investors Limited
(previously known as AMP Capital Investors Limited) became a wholly owned subsidiary of Dexus on this date.
The Group reported provisional fair values on the acquisition of identifiable assets, including management rights, and liabilities
in the consolidated financial statements for the year ending 30 June 2023. Following Final Completion on 30 November 2023,
these fair value assessments were finalised during the year. The amounts recognised in respect of the consideration paid and
the assets and liabilities recognised are set out below.
Purchase consideration
$m
Cash consideration paid - base purchase price
175.0
Working capital adjustments paid
65.6
Contingent consideration paid
50.0
Co-investment stake acquisition consideration paid1
103.0
Total consideration
393.6
1 Dexus acquired associated co-investment stakes in the Dexus Core Property Fund (DCPF), Dexus Wholesale Australian Property Fund (DWAPF) and
Dexus Core Infrastructure Fund (DCIF) from AMP Limited for total cash consideration of $103.0 million.
Identifiable assets and liabilities recognised
$m
Cash and cash equivalents
52.1
Trade and other receivables
93.9
Investments accounted for using the equity method
63.5
Financial assets at fair value through profit & loss
39.3
Intangible assets: management rights1
188.9
Trade and other payables
(3.5)
Current tax liabilities
(0.7)
Provisions
(57.3)
Deferred tax assets
22.7
Deferred tax liabilities
(57.8)
Net identifiable assets acquired
341.1
Goodwill2
52.5
Net assets acquired
393.6
1 Recognised in connection with AMP Capital managed funds, which include both open ended and closed ended funds and mandates.
2 Goodwill is attributable to the people, established business practices and relationships obtained via the acquisition and is not deductible for tax
purposes.
Adjustments to the provisional purchase price allocation
The final fair value for management rights at acquisition was $188.9 million, $6.3 million lower than the provisional fair value,
with a corresponding decrease in deferred tax liabilities of $1.9 million. Other adjustments to the fair value of other net
identifiable assets and liabilities resulted in a net increase to trade and other payables of $0.8 million, a decrease in provisions
of $2.3 million and an increase in deferred tax assets of $5.1 million. As a result of these adjustments, there was a
corresponding decrease in goodwill of $2.2 million, resulting in total goodwill arising on the acquisition of $52.5 million. These
adjustments have been made in the prior year comparatives in accordance with applicable accounting standards.
Payment for the business combination
$m
Cash consideration paid
342.7
Co-investment stake acquisition consideration paid
103.0
Less: Cash and cash equivalents acquired
(52.1)
Net cashflow on acquisition1
393.6
1 Includes $301.1 million in payments for the acquisition of subsidiary, $53.0 million in payments for investments accounted for using the equity method
and $39.5 million in payments for financial assets at fair value through profit or loss.
Acquisition-related costs
Acquisition-related costs of $84.6 million (2023: $81.3 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.
177
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Directors’ report
Governance
Performance
Approach
Overview
Note 22 Business combination (continued)
Acquired receivables
The fair value of trade and other receivables acquired was $93.9 million and reflects the gross contractual amount at the
acquisition date.
Note 23 Audit, taxation and transaction service fees
During the year, the Auditor and its related practices earned the following remuneration:
2024
2023
$'000
$'000
Audit and review services
Auditors of the Group - PwC
Financial statement audit and review services
2,253
2,506
Audit and review fees paid to PwC
2,253
2,506
Assurance services
Auditors of the Group - PwC
Outgoings audits
85
67
Regulatory audit and compliance assurance services
297
238
Sustainability assurance services
242
215
Other assurance services
37
374
Assurance fees paid to PwC
661
894
Total audit, review and assurance fees paid to PwC
2,914
3,400
Other services
Auditors of the Group - PwC
Taxation services
631
424
Other services
45
35
Other services fees paid to PwC
676
459
Total audit, review, assurance and other services fees paid to PwC
3,590
3,859
Note 24 Cash flow information
a. Reconciliation of cash flows from operating activities
Reconciliation of net profit/(loss) for the year to net cash flows from operating activities.
2024
2023
$m
$m
Net loss for the year
(1,583.8)
(752.7)
Capitalised interest
(26.7)
(23.7)
Depreciation and amortisation
13.9
8.4
Amortisation of incentives and straight line income
78.1
91.8
Impairment of intangibles
—
60.0
Net fair value (gain)/loss of investment properties
796.9
623.5
Net fair value (gain)/loss of investments at fair value
302.6
28.3
Share of net (profit)/loss of investments accounted for using the equity
method
585.6
213.4
Net fair value (gain)/loss of derivatives
2.7
67.6
Amortisation of interest bearing liabilities
17.4
12.1
Security-based payments expense
17.5
10.4
Net fair value (gain)/loss of interest bearing liabilities
14.4
(75.6)
Impairment of investments accounted for using the equity method
0.7
3.2
Net foreign exchange (gain)/loss
0.2
(0.3)
Development services revenue non-cash settled
(23.4)
—
Distributions from investments accounted for using the equity method
524.6
404.0
Change in operating assets and liabilities
(107.2)
100.5
Net cash Inflow from operating activities
613.5
770.9
Dexus 2024 Annual Report
178
Note 24 Cash flow information (continued)
b. Net debt reconciliation
Reconciliation of net debt movements:
2024
2023
Interest bearing
liabilities
$m
Interest bearing
liabilities
$m
Opening balance
5,331.2
4,915.4
Changes from financing cash flows
Proceeds from borrowings
3,660.8
7,811.5
Repayment of borrowings
(4,098.4)
(7,392.5)
(Repayment of)/Proceeds from loan with related party
—
(11.6)
Non cash changes
Movement in deferred borrowing costs and other
0.3
(8.4)
Effect of changes in foreign exchange rates
1.3
92.4
Fair value hedge adjustment
14.4
(75.6)
Closing balance
4,909.6
5,331.2
Note 25 Security-based payments
The DXFM Board has approved a grant of performance rights to DXS stapled securities to eligible participants. Awards, via the
DSTI and LTI 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, eligible participants are 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. Market conditions
include Absolute Total Shareholder Return (ATSR) and Relative Total Shareholder Return (RTSR). 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 provision for employee benefits. The total amount to be expensed is determined by reference to the fair value of the
performance rights granted.
Critical accounting estimates: 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.
179
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Governance
Performance
Approach
Overview
Note 25 Security-based payments (continued)
The movement in performance rights is summarised below:
2024
Opening
balance
Granted
Vested
Cancelled
Closing
balance
DSTI Plan
1,122,969
1,066,508
(788,227)
(55,696)
1,345,554
LTI Plan
2,618,389
1,789,063
(360,906)
(189,415)
3,857,131
Retention Awards
663,298
—
(153,481)
—
509,817
Total
4,404,656
2,855,571
(1,302,614)
(245,111)
5,712,502
2023
Opening
balance
Granted
Vested
Cancelled
Closing
balance
DSTI Plan
977,983
791,645
(613,137)
(33,522)
1,122,969
LTI Plan
2,068,962
1,068,306
(318,849)
(200,030)
2,618,389
Retention Awards
663,298
—
—
—
663,298
Total
3,710,243
1,859,951
(931,986)
(233,552)
4,404,656
a. Deferred Short Term Incentive Plan
25% of any award under the Deferred Short Term Incentive (DSTI) Plan for certain participants will be deferred and awarded in
the form of performance rights to DXS securities.
The majority of the performance rights awards will vest one year after grant and some 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. As applicable, 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 weighted average remaining contractual life for DSTI performance rights is 0.53 years (2023: 0.57 years). The weighted
average fair value price of all outstanding DSTI performance rights is $7.81 (2023: $8.52) and the weighted average fair value
price of grants with respect to the year ended 30 June 2024 is $7.51 (2023: $7.51). The total security-based payments expense
recognised during the year ended 30 June 2024 was $7,142,086 (2023: $5,760,646).
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 Long Term Incentive (LTI) Plan, 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 weighted average remaining contractual life for LTI performance rights is 1.51 years (2023: 1.55 years). The weighted
average fair value price of all outstanding LTI performance rights is $5.32 (2023: $6.32) and the weighted average fair value
price of grants with respect to the year ended 30 June 2024 is $4.99 (2023: $4.12). The total security-based payments expense
recognised during the year ended 30 June 2024 was $6,655,389 (2023: $2,786,174).
c. Senior Management Retention Awards
CEO Incentive Award
A once-off CEO incentive award was granted to then CEO Darren Steinberg on 1 June 2021 which vested on 1 July 2024. The
fair value of the performance rights has been recognised over the 3 year vesting period and was fully amortised during the
year.
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 vested in December 2023 and 50% of the rights will vest in December 2024, subject
to participants satisfying employment service conditions and governance and behavioural standards. Consequently, 50% of
the fair value of the rights is amortised over three years and 50% of the rights is amortised over four years from the grant date.
The weighted average remaining contractual life for all senior management retention award is 0.14 years (2023: 0.98 years).
The weighted average fair value price of all outstanding senior management retention award is $8.64 (2023: $8.59). The total
security-based payments expense related to this award recognised during the year ended 30 June 2024 was $1,536,817 (2023:
$1,766,752).
Dexus 2024 Annual Report
180
Note 26 Related parties
Responsible Entity, Trustee and Investment Manager
DXH, a wholly owned subsidiary of DXO, is the parent entity of:
– DXFM, the responsible entity of DPT and DXO, the trustee of Dexus Office Trust Australia and Dexus Australian Logistics
Trust, and the investment manager of Dexus Industrial Trust Australia, Dexus KC Trust, Parangool Pty Ltd and Dexus Core
Property Fund
– DWPL, the responsible entity of DWPF
– DWFL, the responsible entity of DHPF
– DIML, the responsible entity of DIF
– DWML, the trustee of third party managed funds
– DXAM, the responsible entity of DXC, DXI and other third party managed funds
– Dexus RE Limited, the responsible entity of APD Trust
– DCFM, the responsible entity of Dexus Australian Property Fund, Dexus Community Infrastructure Fund, Dexus Core
Infrastructure Fund, Dexus Wholesale Australian Property Fund and Dexus Wholesale Shopping Centre Fund
– DCIS, the trustee of third party managed funds
– Dexus Capital Private Markets NZ Limited, the manager of third party managed funds
– DCIL, the trustee of third party managed trusts and the investment manager of third party managed trusts and portfolios
– DREP Investment Management Pty Limited, the investment manager of the Dexus Real Estate Partnership series
– Dexus Property Services Limited, the investment manager of third party managed funds
Management Fees and other revenue
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. Other entities within the Group are also entitled to receive
property and development management fees and to be reimbursed for administration expenses incurred on behalf of the
Group.
The Group received responsible entity fees, management fees and other related fees from real asset funds managed by
subsidiaries of DXH during the financial year.
Related party transactions
Transactions between the consolidated entity and related parties were made on commercial terms and conditions.
Agreements with third party funds and joint ventures are conducted on normal commercial terms and conditions.
Transactions with related parties
2024
2023
$'000
$'000
Responsible entity (investment management fees)
209,913.4
143,860.4
Property management fee income
61,141.0
52,189.9
Development services revenue (DS), Development management (DM), Project Delivery Group
(PDG), capital expenditure and leasing fee income
89,605.8
47,793.2
Other fund fees and recoveries
70,727.2
16,319.0
Rental expense
4,566.5
1,310.0
2024
2023
$'000
$'000
Responsible entity fees receivable at the end of each reporting year
52,166.0
46,055.4
Property management fees receivable at the end of each reporting year
7,645.8
8,917.2
DS, DM, PDG, capital expenditure, leasing fees and other receivables at the end of each reporting
year
79,389.8
20,969.9
Loans to related parties
—
1,750.2
Loans and payables from related parties
3,417.8
24,559.3
Key management personnel compensation
2024
2023
$'000
$'000
Compensation
Short-term employee benefits
7,294.0
8,862.5
Post employment benefits
234.0
1,071.9
Security-based payments
3,935.0
5,170.5
Total key management personnel compensation
11,463.0
15,104.9
181
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Financial report
Directors’ report
Governance
Performance
Approach
Overview
Note 26 Related parties (continued)
Key management personnel compensation (continued)
In addition, gardening leave was granted for the period from March 2024 to December 2024 for the former CEO, Darren
Steinberg. Mr. Steinberg will receive his base salary and entitlements during this leave period, totalling $1,238,840.
Information regarding remuneration of key management personnel is provided in the Remuneration Report on pages 90 to 121
of the Annual Report. There have been no other transactions with key management personnel during the year.
Note 27 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.
a. Summary financial information
The individual Financial Statements for the parent entity show the following aggregate amounts:
2024
2023
$m
$m
Total current assets
9.4
667.7
Total assets
12,814.2
12,442.1
Total current liabilities
189.8
206.1
Total liabilities
195.9
206.1
Equity
Contributed equity
12,022.4
12,022.4
Reserves
—
—
Retained profit
595.9
213.6
Total equity
12,618.3
12,236.0
Net profit for the year
858.6
485.8
Total comprehensive income for the year
—
485.8
b. Guarantees entered into by the parent entity
There are no guarantees entered into by the parent entity. Refer to note 17 for details of guarantees entered into by the
Group.
c. Contingent liabilities
The parent entity has no contingent liabilities. Refer to note 17 for the Group's contingent liabilities.
d. Capital commitments
The parent entity had no capital commitments as at 30 June 2024 (2023: nil).
e. Going concern
The parent entity is a going concern. Capital risk management for the parent entity is managed holistically as part of the
Group. The Group has unutilised facilities of $2,462.0 million (2023: $2,409.5 million) (refer to note 15) and sufficient working
capital and cash flows in order to fund all of its requirements as at 30 June 2024.
Note 28 Subsequent events
On 26 July 2024, settlement occurred for the disposal of 6 Bellevue Circuit, Greystanes NSW for total consideration of $45.6
million excluding transaction costs.
On 8 August 2024, Dexus exchanged contracts for the disposal of 28 Jones Road, Brooklyn VIC for total consideration of $35.1
million excluding transaction costs.
Since the end of the year, the Directors are not aware of any other matter or circumstance not otherwise dealt within 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.
Directors’ Declaration
Dexus 2024 Annual Report
182
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 129 to 181:
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 2024 and of its performance, as
represented by the results of its operations and 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 Dexus Property Trust will be able to pay its 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 2024.
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.
Warwick Negus
Chair
19 August 2024
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.
Independent auditor’s report
To the stapled security holders of Dexus Property Trust
Report on the audit of the financial report
Our opinion
In our opinion:
The accompanying financial report of Dexus Property Trust (the Trust) and its controlled entities which
includes Dexus Operations Trust (DXO) 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 2024 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 DXO.
The 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 financial report comprises:
•
the Consolidated Statement of Financial Position as at 30 June 2024
•
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, including material accounting policy
information and other explanatory information
•
the Directors’ Declaration.
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 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 Independence Standards) (the
Code) that are relevant to our audit of the financial report in Australia. We have also fulfilled our other
ethical responsibilities in accordance with the Code.
Independent Auditor’s Report
183
Investor information
Financial report
Directors’ report
Governance
Performance
Approach
Overview
Dexus 2024 Annual Report
184
Our audit approach
An audit is designed to provide reasonable assurance about whether the 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 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 financial report as a whole, taking into account the relevant and management structure of the
Group, its accounting processes and controls and the industry in which it operates.
Audit scope
Key audit matters
•
Our audit focused on where the Group made
subjective judgements; for example, significant
accounting estimates involving assumptions and
inherently uncertain future events.
•
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 useful life intangible
assets (management rights and goodwill)
•
These are further described in the Key audit matters
section of our report.
Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our
audit of the financial report for the current period. The key audit matters were addressed in the context of
our audit of the 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 included in investments
accounted for using the equity method (Refer to Notes 9 and 10)
The Group’s investment property portfolio
comprises:
•
Directly held properties included in the
Consolidated Statement of Financial Position as
investment properties.
•
The Group’s share of investment properties
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 9. The value of investment properties is
dependent on the valuation methodology adopted
and the inputs and assumptions in the valuation
models.
To assess the fair value of investment properties, we
performed the following procedures, amongst others:
•
We developed an understanding of the valuation policy
used by the Group in determining the fair value of
investment properties and assessed whether it was in
accordance with Australian Accounting Standards.
•
We developed an understanding of the key control
activities relevant to our audit and assessed whether they
were appropriately designed and implemented.
•
We evaluated whether certain key control activities
relevant to our audit, using a sampling methodology,
were operating effectively throughout the year.
•
We assessed the scope, competence and objectivity of
the internal and external valuation experts used by the
Group to prepare the valuation models at the reporting
date.
185
Investor information
Financial report
Directors’ report
Governance
Performance
Approach
Overview
Key audit matter
How our audit addressed the key audit matter
Significant assumptions in establishing fair value
included the:
•
Capitalisation rate, and
•
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 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 most 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,
given the uncertain economic environment on
investment property valuations.
•
To develop an understanding of prevailing market
conditions and their expected impact on the fair value of
the Group's investment properties, we:
−
read relevant external and PwC Real Estate expert
property market reports, and
−
where appropriate, held discussions with the
Group's internal and external valuation experts.
For a risk-based sample of investment properties:
•
We assessed the valuation methodology against the
requirements of the Australian Accounting Standards.
•
We assessed significant inputs, using a sampling
methodology, to the investment property valuation
reports and agreed the inputs to relevant supporting
documentation. For example, on a sample basis, we
compared the rental income used in the investment
property valuations to the relevant lease agreement.
•
We tested the mathematical accuracy of the relevant
valuation calculations.
•
Where considered necessary, we held discussions with
the valuer of a specific property to develop an
understanding of their relevant processes, judgments
and observations.
•
We assessed the appropriateness of the significant
assumptions, such as the capitalisation rate and discount
rate, including comparing to market data and comparable
transactions.
We assessed the reasonableness of the disclosures against
the requirements of Australian Accounting Standards.
Carrying amount of indefinite useful life intangible assets (management rights and goodwill) (Refer Note 21)
The Group’s indefinite useful life intangible assets
comprise of management rights and goodwill.
The Group performed impairment testing at 30 June
2024 on the indefinite useful life intangible assets by
comparing the recoverable amount of indefinite
useful life intangible assets to their carrying amount.
We considered the carrying amount of indefinite
useful life management rights and goodwill to be a
key audit matter due to the:
•
Financial significance of the balance in the
Consolidated Statement of Financial Position.
•
Degree of estimation uncertainty in determining
the recoverable amount of indefinite useful life
intangible assets.
We performed the following procedures amongst others:
•
For material indefinite useful life management rights and
goodwill, together with PwC valuation experts for
selected CGUs, we assessed the methodologies used in
the Group’s impairment models (the models) against
commonly accepted valuation practice, and the
appropriateness of selected data inputs and significant
assumptions used in the models, with reference to our
knowledge of the Group’s operations and observable
market factors.
•
We evaluated the appropriateness of forecasted cash
flows used in the models and testing the mathematical
accuracy of material underlying calculations.
•
We tested the mathematical accuracy of relevant
impairment model calculations.
•
We evaluated the Group’s historical ability to forecast
future cash flows by comparing a selection of prior year
budgets to reported actual results.
Dexus 2024 Annual Report
186
Key audit matter
How our audit addressed the key audit matter
•
We performed sensitivity analysis by shifting significant
assumptions within a reasonably possible range to
identify higher risk assumptions and CGUs at higher risk
of impairment to determine where to focus further
procedures.
•
We assessed the reasonableness of the disclosures
made in Note 21, including those related to estimation
uncertainty, against the requirements of Australian
Accounting Standards.
Other information
The Directors of Dexus Funds Management Limited (the Directors), the Responsible Entity of the Trust,
are responsible for the other information. The other information comprises the information included in the
annual report for the year ended 30 June 2024, but does not include the financial report and our auditor’s
report thereon.
Our opinion on the financial report does not cover the other information and accordingly we do not
express any form of assurance conclusion thereon through our opinion on the financial report. We have
issued a separate opinion on the remuneration report and a limited assurance conclusion on the
Integrated Reporting Content Elements Index of the Annual Report.
In connection with our audit of the financial report, our responsibility is to read the other information and,
in doing so, consider whether the other information is materially inconsistent with the 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 financial report
The Directors are responsible for the preparation of the financial report in accordance with Australian
Accounting Standards and the Corporations Act 2001, including giving a true and fair view, and for such
internal control as the Directors determine is necessary to enable the preparation of the financial report
that is free from material misstatement, whether due to fraud or error.
In preparing the 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 financial report
Our objectives are to obtain reasonable assurance about whether the 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 financial report.
187
Investor information
Financial report
Directors’ report
Governance
Performance
Approach
Overview
A further description of our responsibilities for the audit of the 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 the Directors’ report for the year ended 30 June
2024.
In our opinion, the remuneration report for the year ended 30 June 2024 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
Marcus Laithwaite
Sydney
Partner
19 August 2024
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 understand the importance our
investors place on ESG topics and
issues for long-term value creation.
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 FY24, senior management
together with the Investor Relations
team held 271 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 one-on-one meetings,
telephone calls, conferences, site visits,
roadshows, investor briefings and
roundtables.
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 our investor relations
and communications activities.
Our Treasury team held presentations
with institutional debt investors in
August 2023 and February 2024. In
addition, the team participated in
the Property Treasurers’ Round Table
and Debt Markets 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.
In FY24 we engaged with investors
to discuss our approach to ESG and
to learn about their priorities and
concerns.
Investor contact method
(by numbers)
25
Group meetings
7
Property tours
2
Roadshows
191
One-on-one meetings
36
Director engagement meetings
10
Conferences & panels
Investor Information
Dexus 2024 Annual Report
188
Security holders
by geography
51%
Australia
18%
North America
5%
Asia
13%
UK
12%
Europe (ex UK)
1%
Rest of world
Investor sustainability
benchmarks
We participate in and are evaluated on
several investor surveys for the purposes
of benchmarking our sustainability
performance, communicating our
environment, social and governance
(ESG) credentials, and understanding
how we can continuously enhance our
approach. We are proud to be leaders
across key sustainability benchmarks
in the industry.
As a result of Dexus’s renewed
Sustainability Strategy, we have
enhanced our focus on the areas where
we can make an impact which align to
our priority areas. Through this process,
we have reduced our focus on some of
the sustainability benchmark surveys
while still prioritising performance in
DJSI and GRESB.
Climateworks
Dexus was recognised as one of only two companies found to
have met all four principles for credible net zero targets and tangible
actions, in the Climateworks Australia assessment of 30 ASX-listed
companies on climate targets and alignment with global climate science.
The four best-practice principles forming part of the criteria by Climateworks were:
– A commitment to net zero emissions by or before 2050
– Medium-term targets that are appropriate and ambitious
– Tangible actions to support achieving the targets
– Commitments that cover all emissions, such as value chain, customer
and financed emissions, not just operational.
This is a strong foundation to build from as Dexus embarks on setting the
next phase of its Climate Transition Action Plan.
GRESB
The platform’s achievements from the Global Real Estate Sustainability Benchmark
(GRESB) include:
– Royal Adelaide Hospital1 (RAH) achieved an exceptional result, ranking 1st for
performance out of 683 infrastructure assets globally. RAH scored 96 out of 100
and has attained a 5 star GRESB rating for 2023.
– Powerco NZ being named an Infrastructure Asset Sector Leader
– Two Dexus unlisted funds were named sector leaders:
– Dexus Healthcare Property Fund was named Global Non-Listed Leader
for Healthcare in the Development Benchmark
– Dexus Wholesale Property Fund was named Regional Sector Leader
for Diversified (Office/Retail) in the Standing Investments Benchmark
– Dexus, Dexus Office Trust, Dexus Office Partnership and Dexus Wholesale
Property Fund ranked in the Top 5% globally out of 1,924 respondents.
DJSI
Dexus was again recognised as a sustainability leader, achieving the third highest
score of global REIT peers in the S&P Global Corporate Sustainability Assessment
(CSA) and being included in the S&P Global Sustainability Yearbook 2024.
MSCI
In November 2023, MSCI rated Dexus an AA Rating in the Morgan Stanley Capital
International (MSCI) ESG Rating 2023, representing industry leadership in managing
the most significant ESG risks and opportunities.
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:
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
into your Security holding at
www.dexus.com/update or by
contacting Link Market Services
on +61 1800 819 675.
Dexus website
www.dexus.com
Other investor tools available:
Online enquiry
www.dexus.com/get-in-touch
Scroll down to the Dexus Listed
Investors 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
www.dexus.com/investor-centre
Notifies investors on key events
and reporting dates.
LinkedIn
We engage with our followers
on LinkedIn.
1. Royal Adelaide Hospital is managed
by Celsus Holdings Pty Ltd, of which
Dexus Community Infrastructure Fund,
Dexus Healthcare Property Fund and
Dexus Core Infrastructure Fund have
a combined 72.79% ownership interest.
189
Investor information
Financial report
Directors’ report
Governance
Performance
Approach
Overview
Link Market Services Limited
Our security registrar Link Market
Services Limited (part of the Link Group)
was acquired by Mitsubishi UFJ Trust &
Banking Corporation (the Trust Bank),
a consolidated subsidiary of Mitsubishi
UFJ Financial Group, Inc. (MUFG), on
16 May 2024. In the coming months,
Link Market Services’ name will change
to MUFG Pension & Market Services.
The registry services they provide
Security holders will continue as normal.
Annual General Meeting
Dexus’s Annual General Meeting will be
held on Wednesday 30 October 2024
commencing at 2.00pm. Dexus will 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.
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 webcast
at www.dexus.com/investor-centre.
Details relating to the meeting and
how it will be conducted will be
provided in the 2024 Notice of Annual
General Meeting to be released in
September 2024.
Distribution payments
Dexus’s payout policy in FY24 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.
Distributions are paid 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 payment, please
visit the investor login facility at
www.dexus.com/update.
AMMA Statement
An Attribution Managed Investment
Trust Member Annual Statement (AMMA)
is sent to Security holders at the end of
August each year.
The AMMA 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.
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 NSW
Office of State Revenue or email
unclaimedmoney@revenue.nsw.gov.au.
2024 Reporting calendar1
2024 Annual General Meeting
30 October 2024
2025 Half year results
19 February 2025
2025 Annual results
20 August 2025
2025 Annual General Meeting
29 October 2025
Distribution calendar1
Period end
31 December 2024
30 June 2025
Ex-distribution date
30 December 2024
27 June 2025
Record date
31 December 2024
30 June 2025
Payment date
27 February 2025
28 August 2025
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.
Key dates
Investor Information continued
Dexus 2024 Annual Report
190
Complaint handling process
Dexus has a complaint handling policy
to ensure that all Security holders
are dealt with fairly, promptly and
consistently. A Complaints Guide
is available at www.dexus.com/
complaints-management.
Any Security holder wishing to lodge
a complaint, can do so verbally
by calling the Dexus Infoline on
+61 1800 819 675 or in writing by email
to dexus@linkmarketservices.com.au.
Contact us directly at:
Complaints Officer
Dexus Funds Management Limited
PO Box R1822
Royal Exchange NSW 1225
Phone: +612 9017 1100
Email: complaints@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:
Dispute Resolutions Officer
Dexus Funds Management Limited
PO Box R1822
Royal Exchange NSW 1225
Email: ir@dexus.com
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
Making contact
If you have any questions regarding
your Security holding or wish to
update your personal or distribution
payment details, please contact Link
Market Services 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
191
Investor information
Financial report
Directors’ report
Governance
Performance
Approach
Overview
Additional information
Top 20 Security holders at 31 July 2024
Rank
Name
Number of
stapled securities
% of issued
capital
1
HSBC Custody Nominees (Australia) Limited
416,159,001
38.69
2
J P Morgan Nominees Australia Pty Limited
221,408,386
20.59
3
Citicorp Nominees Pty Limited
150,273,274
13.97
4
BNP Paribas Nominees Pty Limited
33,658,630
3.13
5
National Nominees Limited
28,102,372
2.61
6
BNP Paribas Nominees Pty Ltd
24,186,509
2.25
7
Citicorp Nominees Pty Limited
12,059,156
1.12
8
HSBC Custody Nominees (Australia) Limited
7,793,580
0.72
9
BNP Paribas Nominees Pty Ltd
5,810,243
0.54
10
Medich Capital Pty Ltd
5,502,012
0.51
11
Medich Foundation Pty Ltd
4,750,000
0.44
12
Charter Hall Wholesale Management Ltd
4,750,000
0.44
13
Artmax Investments Limited
4,060,738
0.38
14
Netwealth Investments Limited
3,334,098
0.31
15
Pacific Custodians Pty Limited Performance Rights Plan Trust
2,864,219
0.27
16
BNP Paribas Nominee (NZ) Ltd
2,757,253
0.26
17
Citicorp Nominees Pty Limited <143212 NMMT Ltd A/C>
2,651,743
0.25
18
HSBC Custody Nominees (Australia) Limited
2,252,455
0.21
19
Charter Hall Wholesale Management Ltd
2,090,000
0.19
20
IOOF Investment Services Limited
1,701,704
0.16
Sub total
936,165,373
87.04
Balance of register
139,399,873
12.96
Total of issued capital
1,075,565,246
100
Substantial holders at 31 July 2024
The names of substantial holders, at 31 July 2024 that have notified the Responsible Entity in accordance with section 671B of
the Corporations Act 2001, are:
Date
Name
Number of
stapled securities
% voting
3 July 2024
State Street Corporation
113,767,112
10.58%
29 February 2024
Blackrock Group
113,001,421
10.50%
28 July 2021
Vanguard Group
109,255,969
10.16%
Class of securities
Dexus has one class of stapled security trading on the ASX with Security holders holding stapled securities at 31 July 2024.
Dexus 2024 Annual Report
192
Spread of securities at 31 July 2023
Range
Securities
%
No. of holders
100,001 and over
962,279,998
89.47
85
50,001 to 100,000
6,218,917
0.58
90
10,001 to 50,000
33,601,703
3.12
1,849
5,001 to 10,000
26,319,663
2.45
3,721
1,001 to 5,000
40,506,873
3.77
16,356
1 to 1,000
6,638,092
0.62
15,186
Total
1,075,565,246
100.00
37,287
At 31 July 2024, the number of security holders holding less than a marketable parcel of 72 Securities ($500) was 980 and they
held a total of 31,930 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 does not have an on-market buy-back program open at the date of this report.
Cost base apportionment
For capital gains tax purposes, the cost base apportionment details for Dexus securities for the 12 months ended
30 June 2024 are:
Date
Dexus Property Trust
Dexus Operations Trust
1 Jul 2023 to 31 Dec 2023
98.19%
1.81%
1 Jan 2024 to 30 Jun 2024
97.97%
2.03%
Historical cost base details are available at www.dexus.com/investor-centre.
193
Investor information
Financial report
Directors’ report
Governance
Performance
Approach
Overview
Integrated Reporting Content Elements Index
Content Elements
Reference
Page
A. Organisational overview and external environment
What does the organisation do and what are the
circumstances under which it operates?
FY24 highlights
2–3
About Dexus
4–5
Chair and CEO review
7–9
How we create value
10–11
Strategy
14–15
Sustainability strategy
16–17
Materiality review
18–19
Key resources
26–27
Key business activities
28–29
Financial performance
30–37
Funds management performance
35
Leading cities
38–51
Thriving people
52–57
Climate action
62–71
Directors’ Report
123–125
External environment
About this Report
1
Chair and CEO review
7–9
How we create value
10–11
Megatrends
12–13
Materiality review
18–19
Key risks
20–25
Customer prosperity
58–61
Climate action
62–71
Enhancing communities
72–75
Sustainability Foundations
76–81
NABERs portfolio ratings
81
Governance
82–84
B. Governance
How does the organisation’s governance
structure support its ability to create value
in the short, medium and long term?
Chair and CEO review
8–9
How we create value
10–11
Materiality review
18–19
Key risks
20–25
Key resources
26–27
Leading cities
38–51
Thriving people
52–57
Customer prosperity
58–61
Climate action
62–71
Enhancing communities
72–75
Sustainability Foundations
77–80
Governance
82–89
Dexus Board skills matrix
85
Board focus areas
31, 39, 53, 59, 63, 73, 77
FY24 commitments and key focus area
33, 57, 61, 69, 75, 81
Sustainability across the Dexus Platform
83
Executive Committee
89
Remuneration report
90–91, 99–100
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?
FY24 highlights
2–3
About Dexus
4–5
Chair and CEO review
6–9
How we create value
10–11
Megatrends
12–13
Strategy
14–15
Sustainability Strategy
16–17
Materiality review
18–19
Key risks
20–25
Key resources
26–27
Key business activities
28–29
Performance:
– Financial performance
30–37
– Leading cities
38–51
– Thriving people
52–57
– Customer prosperity
58–61
– Climate action
62–71
– Enhancing communities
72–75
– Sustainability Foundations
76-81
Climate action: metrics and targets
70
Green star building certifications
80
Sustainability across the Dexus Platform
83
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.
Dexus 2024 Annual Report
194
Content Elements
Reference
Page
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?
How we create value
10–11
Megatrends
12–13
Sustainability priority areas
17
Materiality review
18–19
Key risks
20–25
Key resources
26–27
Financial performance: Group outlook
34
Leading cities: Infrastructure
49
Delivering on climate action: physical and financial resilience
68
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?
Chair and CEO review
6–9
Strategy
14–15
Sustainability strategy
16–17
Materiality review
18–19
Key risks
20–25
Key resources
26–27
Thriving people
52–57
Customer prosperity
58–61
Delivering on climate action: decarbonisation
66
Climate action
62–71
Supply chain monitoring and relationship management
79
FY25 commitments
33, 57, 61, 69, 75, 81
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?
Chair and CEO review
6–9
Materiality review
18–19
Compliance and regulatory risk
23
Performance highlights:
– Financial performance
30, 35–36
– Leading cities
38
– Thriving people
52
– Customer prosperity
58
– Climate action
62
– Enhancing communities
73–75
Human rights
79
Office and Industrial portfolio performance
36
Delivering on climate action
64–68
Corporate governance
64, 82
Sustainability Foundations
76–81
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?
FY24 highlights
2–3
Chair and CEO review
6–9
How we create value
10–11
Megatrends
12–13
Key risks
20–25
Group and property outlook
34, 36
FY25 commitments
33, 57, 61, 69, 75, 81
– Leading cities
38–51
– Thriving people
52-57
Climate action: metrics and targets
70
Sustainability Foundations
76–81
Remuneration report
90–91, 99–100
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?
About Dexus
Cover page
About this report
1
Materiality review
18–19
Key risks
20–25
Key resources
28–29
Climate action
62–71
Remuneration report
90–93
Directors’ Report
123–125
Report scope
197
Summary of materiality determination process
Materiality review
18–19
Key risks
20–25
Governance
82–84
Reporting boundary
Megatrends
12–13
Materiality review
18–19
Key risks
20–25
Directors’ Report
123–125
Report scope
197
Summary of significant frameworks and methods
FY24 highlights
2–3
Materiality review
18–19
Performance highlights:
– Financial performance
30, 35–37
– Leading cities
38–39
– Thriving people
52–54
– Customer prosperity
58–61
– Climate action
62–64
– Enhancing communities
72–74
– Green star building certifications
80
Report scope
197
195
Investor information
Financial report
Directors’ report
Governance
Performance
Approach
Overview
Dexus 2024 Annual Report
196
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.
To the Board of Directors of Dexus Holdings Pty Limited
Independent Limited Assurance Report on the Integrated Reporting
Content Elements Index within the Dexus 2024 Annual Report
The Board of Directors of Dexus Holdings Pty Limited (‘Dexus') engaged us to perform an
independent limited assurance engagement in respect of the Integrated Reporting Content Elements
Index (the ‘Subject Matter‘) located on pages 194 and 195 of the Dexus 2024 Annual Report for the
year ended 30 June 2024.
Subject Matter and Criteria
The criteria used by Dexus to prepare the Subject Matter and which we assessed the Subject Matter
is described in section 4 of the International Integrated Reporting Framework dated January 2021,
developed by the International Integrated Reporting Council (the ‘Criteria’). The criteria requires
disclosure of certain information in an integrated report. The criteria requires disclosure of certain
information in an Integrated report.
The maintenance and integrity of Dexus’ website is the responsibility of management; the work
carried out by us does not involve consideration of these matters and, accordingly, we accept no
responsibility for any changes that may have occurred to the reported Subject Matter or Criteria when
presented on Dexus’ website.
Our assurance conclusion is with respect to the year ended 30 June 2024 and does not extend to
information in respect of earlier periods or to any other information included in, or linked from, the
2024 Annual Report including any images, audio files or videos.
Responsibilities of management
Management is responsible for the preparation of the Subject Matter in accordance with the Criteria.
This responsibility includes:
•
determining appropriate reporting topics and selecting or establishing suitable criteria for
measuring, evaluating and preparing the underlying Subject Matter;
•
ensuring that those criteria are relevant and appropriate to Dexus and the intended users; and
•
designing, implementing and maintaining systems, processes and internal controls over
information relevant to the preparation of the Subject Matter, which is free from material
misstatement, whether due to fraud or error.
Our independence and quality control
We have complied with the ethical requirements of the Accounting Professional and Ethical Standard
Board's APES 110 Code of Ethics for Professional Accountants (including Independence Standards)
relevant to assurance engagements, which are founded on fundamental principles of integrity,
objectivity, professional competence and due care, confidentiality and professional behaviour.
Our firm applies Australian Standard on Quality Management ASQM 1, Quality Management for Firms
that Perform Audits or Reviews of Financial Reports and Other Financial Information, or Other
Assurance or Related Services Engagements, which requires the firm to design, implement and
operate a system of quality management including policies or procedures regarding compliance with
ethical requirements, professional standards and applicable legal and regulatory requirements.
197
Investor information
Financial report
Directors’ report
Governance
Performance
Approach
Overview
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 Subject
Matter has not been prepared, in all material respects, in accordance with the Criteria, for the year
ended 30 June 2024.
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.
In carrying out our limited assurance engagement we:
•
made inquiries of the persons responsible for the Subject Matter regarding the processes and
controls for collecting and reporting the Subject Matter;
•
Reviewing and assessing the appropriateness of the Criteria;
•
Reviewing and assessing the completeness of the Subject Matter;
•
Assessing the preparation and presentation of the Subject Matter against the Criteria;
•
Reviewing all references noted in the Subject Matter and confirming the appropriateness of the
references against the Criteria; and
•
Reconciling the sections and page numbers included within the Subject Matter to the referenced
sections of the Dexus 2024 Annual Report.
This assurance is focused on whether the Subject Matter has been addressed according to the
Criteria in the Dexus 2024 Annual Report but does not extend to assessing the accuracy or validity of
any statement made throughout the Annual Report.
We believe that the evidence we have obtained is sufficient and appropriate to provide a basis for our
conclusion.
Inherent limitations
Inherent limitations exist in all assurance engagements due to the selective testing of the information
being examined. It is therefore 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 Subject Matter with the Criteria, as it is limited primarily to making enquiries of the management
and applying analytical procedures.
Additionally, non-financial data may be subject to more inherent limitations than financial data, given
both its nature and the methods used for determining, calculating and estimating such data. The
precision of different measurement techniques may also vary. The absence of a significant body of
established practice on which to draw to evaluate and measure non-financial information allows for
different, but acceptable, evaluation and measurement techniques that can affect comparability
between entities and over time.
The limited assurance conclusion expressed in this report has been formed on the above basis.
Dexus 2024 Annual Report
198
Our limited assurance conclusion
Based on the procedures we have performed, as described under ‘Our responsibilities’ and the
evidence we have obtained, 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
year ended 30 June 2024.
Use and distribution of our report
We were engaged by the board of directors of Dexus to prepare this independent assurance report
having regard to the criteria specified by the board of directors of Dexus and set out in this report.
This report was prepared solely for Dexus to assist the directors in responding to their governance
responsibilities by obtaining an independent assurance report in connection with the Selected subject
matter.
We accept no duty, responsibility or liability to anyone other than Dexus in connection with this report
or to Dexus for the consequences of using or relying on it for a purpose other than that referred to
above. We make no representation concerning the appropriateness of this report for anyone other
than Dexus and if anyone other than Dexus chooses to use or rely on it they do so at their own risk.
This disclaimer applies to the maximum extent permitted by law and, without limitation, to liability
arising in negligence or under statute and even if we consent to anyone other than Dexus receiving or
using this report.
PricewaterhouseCoopers
Caroline Mara Sydney
Partner
19 August 2024
Date
Announcement
17/07/2024
Changes to Leadership Team
05/07/2024
Change in substantial holding
27/06/2024
Sale of three assets
20/06/2024
Portfolio valuation update
19/06/2024
FY24 estimated distribution details
07/05/2024
March 2024 quarter update
07/05/2024
Macquarie Australia Conference
24/04/2024
Appointment of non-executive director
12/04/2024
Appendix 3H
12/04/2024
Appendix 3G
09/04/2024
Appendix 3H
03/04/2024
Appendix 3Z – Penny Bingham-Hall
02/04/2024
Appendix 3Z – Darren Steinberg
02/04/2024
Appendix 3X – Ross Du Vernet
27/03/2024
Resignation of non-executive director
22/03/2024
Correction to Appendix 3G
22/03/2024
Correction to Appendix 3H
19/03/2024
Exercise of Put Option
19/03/2024
Appendix 3H
04/03/2024
Change in substantial holding
29/12/2024
December 2023 distribution payment
22/02/2024
Appendix 3Y – Rhoda Phillippo
14/02/2024
HY24 Results presentation
14/02/2024
HY24 Appendix 4D and Financial
Statements
14/02/2024
HY24 Results release
14/02/2024
HY24 Distribution details
14/02/2024
HY24 Property synopsis
19/01/2024
Appendix 3G
19/01/2024
Appendix 3G
19/01/2024
Appendix 3Y – Darren Steinberg
19/01/2024
Appendix 3H
02/01/2024
Change in substantial holding
02/01/2024
Ceasing to be a substantial holder
19/12/2023
Appendix 3G
15/12/2023
HY24 estimated distribution details
Date
Announcement
15/12/2023
Portfolio valuation update
11/12/2023
Ross Du Vernet appointed as Dexus CEO
30/11/2023
Dexus achieves final completion of
Collimate Capital acquisition
14/11/2023
Appendix 3Y – Elana Rubin
01/11/2023
2023 Dexus Investor Day
31/10/2023
Appendix 3Y – Warwick Negus
31/10/2023
Appendix 3Y – Rhoda Phillippo
30/10/2023
Condition precedent satisfied for
final completion of Collimate Capital
acquisition
25/10/2023
September 2023 quarter update
25/10/2023
2023 AGM Chair and CEO Address
25/10/2023
Darren Steinberg to step down as
Dexus CEO
25/10/2023
2023 Annual General Meeting results
12/10/2023
Appendix 3G
12/10/2023
Appendix 3H
22/09/2023
2023 Notice of Annual General Meeting
07/09/2023
Appendix 3G
05/09/2023
Appendix 3Y – Darren Steinberg
04/09/2023
Appendix 3H
04/09/2023
Appendix 3G
29/08/2023
Appendix 3Y – Rhoda Phillippo
25/08/2023
Appendix 3Y – Elana Rubin
18/08/2023
Sale of 1 Margaret Street Sydney
16/08/2023
2023 Annual Report
16/08/2023
Appendix 4G and 2024 Corporate
Governance Statement
16/08/2023
2023 Annual Results Presentation
16/08/2023
2023 Sustainability Approach and
Data Pack
16/08/2023
2023 Sustainability data pack (xls)
16/08/2023
2023 Synopsis
16/08/2023
2023 Financial Statements
16/08/2023
2023 Appendix 4E
16/08/2023
2023 Final Distribution details
21/07/2023
Change of address details
Key ASX announcements
199
Investor information
Financial report
Directors’ report
Governance
Performance
Approach
Overview
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
Constituent
Signatory
Dexus 2024 Annual Report
200
Directory
Report scope
This Annual Report has been prepared in accordance with the content elements of the 2021 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 pages 194–195 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.
We have also used the GRI Standards to understand material issues from a stakeholder impact perspective, as disclosed across our 2024 Annual
Reporting Suite, which is prepared in accordance with the GRI Standards: (GRI Content Index available at www.dexus.com/sustainability).
PwC has provided limited assurance over select environmental and social data and methodology, within the 2024 Annual Reporting Suite
covering the 12 months to 30 June 2024 (assurance statement available at www.dexus.com/sustainability). The Annual Report covers financial
performance at all locations. Dexus has applied the principles contained within the National Greenhouse and Energy Reporting Act 2007 (NGERA)
and its associated guidelines in the development of our environmental reporting boundary, which comprises of our corporate operations and
managed property portfolio. Additional information on financial, people, customer, community, supplier and environmental datasets is available at
www.dexus.com/sustainability.
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
Warwick Negus, Chair
Ross Du Vernet, Group CEO & Managing Director
Paula Dwyer
Mark H Ford
Peeyush Gupta AM
Rhoda Phillippo
The Hon. Nicola Roxon
Elana Rubin AM
Secretaries of the Responsible Entity
Brett Cameron
Scott Mahony
Registered office of the Responsible Entity
Level 30, 50 Bridge Street
Sydney NSW 2000
PO Box R1822
Royal Exchange
Sydney NSW 1225
T: +61 2 9017 1100
F: +61 2 9017 1101
E: ir@dexus.com
W: www.dexus.com
Auditor
PricewaterhouseCoopers
Chartered Accountants
One International Towers Sydney
Watermans Quay
Barangaroo NSW 2000
Investor Enquiries
Registry Infoline: +61 1800 819 675
Investor Relations: +612 9017 1330
E: 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
W: linkmarketservices.com.au
E: dexus@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/update
Australian Securities Exchange
ASX Code: DXS
Social media
DXS engages with its followers via LinkedIn
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