Dexus

Thank you for standing by and welcome to the DEXIS FY26 results briefing. There will be a presentation followed by a question and answer session. If you wish to ask a question, you will need to press the star key followed by the number 1 on your telephone keypad. I would now like to hand the conference over to Ross DuVernay, Group CEO and Managing Director. Please go ahead.

Well, good morning everyone. We really appreciate you taking the time to join us this morning. I know it's a really busy day with other companies reporting and there's probably a few tired analysts given it's been a busy reporting week. Let's begin today by acknowledging the traditional custodians of the lands and waterways on which we operate and pay our respects to elders past and present. Today you hear from some of the management team who provide you with a full picture of the business and the operating environment. You hear from Keir, our CFO on the financials, Andy on office, Chris on industrial and Michael on funds management. At the conclusion I'll provide a summary and outlook and then we'll open up for some questions. We know DEXIS today, it's a good business. Now you may see DEXIS as an opportunity to buy high quality assets cheaply and in the short term we're looking to capitalise on that ourselves. But DEXIS has all the ingredients to be so much more than that, and unlocking that potential is what we're all about. We have a diverse platform with deep-sec expertise and the ability to create assets. We have long-term and deep relationships with private capital, and we have a balance sheet of serious scale with high-quality assets. Over the past few years, DEXIS has been making a deliberate transition. We've been reshaping our portfolio, improving its quality, becoming more capital efficient and building a more diversified business. All with a very clear ambition to create a more resilient business that can generate sustainable earnings growth over time. Today's results show that we've delivered on what we said we would in FY26 and we continue to make progress on our transition. But I also want to be clear about where we are today and open about the work we have to do. While we have a high-quality investment portfolio, we have further to go in transitioning the balance sheet to be more diversified and more capital efficient. That will improve our ability to generate attractive and sustainable returns for security holders through the cycling. We have a funds management business of scale and significant relationships with clients, but there's work to do to ensure the strategies and products continue to be relevant and deliverable for clients and for us. Specific issues have emerged in the infrastructure funds and mandates that transitioned to DEXAs from AMP, and we're addressing these directly. Our portfolio and deep relationships have created a privileged position when it comes to deal flow, but investing in this market has become more asset specific, and we need to be very selective about the opportunities we go after as we deploy capital alongside third party clients. This is all reflected in a security price that materially understates the value of the underlying investments and value in the platform. And the management team and I are acutely aware of this disconnect, and we are focused on improving it in a sustainable and enduring way. So the question I know you'll all be asking is, what are we doing about it? And the answer is, in short, a lot. As detailed on this slide, in FY26, we delivered solid outcomes in our core business. We delivered on divestment targets. We secured attractive capital growth opportunities. We substantially resolved redemptions across the core real estate platform. And we raised capital from clients twice as much as last year. We're driving hard on the performance of our own investment portfolio, improving occupancy, income and returns from the assets we already own. And we continue to focus on meeting the needs of our fund clients, delivering performance in those strategies and ensuring we bring new opportunities that create long-term value. It shows the resilience in our operating model, the ability to live at this performance while navigating the challenges in infrastructure. We're also putting down the foundations for longer-term growth, with initiatives like the Boral JV, a more than decade-long project which we expect will create the nation's largest logistics precinct. And we're being responsible in how we think about costs and overheads to run the business. And the team will share more on progress and highlights in a moment. Twelve months ago, we set out a series of priorities and action items that will move us towards our goal to reshape the business to deliver more sustainable earnings growth over the longer term. And as you can see on this slide, we've made decent progress. Atlassian Central topped out last month and is on track to complete this year. A rather major project, Waterfront, is experiencing further delays but remains favourably positioned in the country's strongest workplace market, and the commerce remains intact. We've had success attracting capital to products we've created that leverage our capabilities, with DREP2 exceeding its original target by nearly $300 million. The conversion of a Brisbane office to student accommodation asset in DREP that reached PC in June is a good example of what the platform can create. And people are such an important part of our platform. The execution of strategy, the creation of value, the management of risk, the connection with customers, clients, partners, all of this relies on people. We have a great team of passionate experts who thrive in creating and driving value from assets and we continue to invest in them, strengthening the leadership, the skills and the capabilities in the platform. We also continue to actively address fund specific issues. This includes responding directly to the APAC matter, continuing to support our fund investors and ensuring that we embed learnings into the wider business. I'd like to spend a moment on this before I hand over to Keir. This slide sets out the context, the actions we've taken and the next steps. And there's a few things I want to make sure are really clear. DEXIS primarily acts in the fiduciary capacity in these funds. We don't have a direct ownership or control of the underlying assets. Our job is to act in the best interest of investors, our clients, and that's what we're doing. In May, the New South Wales Supreme Court found against the DEXIS block in proceedings in relation to APAC. and the investors are appealing that decision with a court date scheduled in October. Managing this world for our clients is critical and we take it seriously. Pleasingly, our operating model, which is designed around the sectors, and this ensures that we have teams focused on delivering in each part of our business. This is evident in the positive outcomes this year we've achieved across the wider platform. I can understand some of the frustration from security holders regarding the uncertainty. Fund specific decisions will be made by RE boards and trustees, legal processes have a timeline of their own and some conclusions won't be possible until the appealed outcome is known. These are complex matters and it will take time to resolve and we will update you as security holders as decisions are reached. I now hand you over to Pia, sorry our CFO.

Thanks Ross and good morning everyone. Turning to the result in detail. In line with expectations, total AFFO was $484 million, with a distribution of 37 cents per security, reflecting a payout ratio of 82%. Office FFO reduced primarily due to divestments and lower average income-producing occupancy, while industrial FFO increased driven by development completions, higher average physical occupancy and strong releasing spreads. partly offset by divestments. Co-investments in pooled funds increased, driven by DEXIS's investments in DSIT1 and DWSF, as well as higher distributions received from some funds. As expected, FFO from management operations decreased due to lower thumb as a result of divestments, lower management fees and slightly lower performance fees. while active cost management reduced group corporate costs by 6%. Taken together, group corporate and management operation costs have now reduced by more than $30 million since FY24, with the impact of recent initiatives expected to benefit FY27. Finance costs increased due to a higher weighted average cost of debt, partly offset by the impact of divestments. As expected, trading profits were higher with the sale of Brook Hollow, Chester Hill and completion of construction at Preston's. And maintenance capex and leasing decreased for the office portfolio as a result of timing, partially offset by higher incentives across the industrial portfolio. The recovery in property valuations is increasingly being driven by fundamentals. with market rent growth the main contributor this year, partly offset by a marginal expansion in capitalisation rates. Overall, for the 12 months to 30 June, the portfolio increased by 1%. Our office portfolio, which is 95% prime grade and 78% weighted to core CBD markets, increased by 0.6%. and our industrial portfolio, which is 89% weighted to core industrial estates and distribution centres, increased by 2.3%. These outcomes demonstrate the quality of the portfolio and stabilising valuations despite the interest rate environment. Moving to capital management, our balance sheet remains solid, with look-through gearing of 33.4%, which is expected to reduce by around 1.5 percentage points following recently announced divestments, net of circa $490 million of committed development spend over the next 12 months. This provides support to recommence buyback activity. We have been active with refinancing, resulting in a weighted average debt maturity of 4.2 years, $2.5 billion of headroom and manageable near-term debt maturities. 91% of our debt was hedged during the year at an average hedge rate of 3%, providing material interest rate protection. Thank you, and I'll now hand over to Andy.