Dexus upbeat on office market growth in Sydney, Melbourne

Dexus upbeat on office market growth in Sydney, Melbourne
Dexus upbeat on office market growth in Sydney, Melbourne

Property group Dexus posted a modest 0.3 percent rise in net profit after tax for the financial year ended June 30, although the group expects strong performance in the office markets of Sydney and Melbourne.

The group said it had a positive outlook for the office markets in Sydney and Melbourne due to an increase in business confidence and full-time employment growth. Overall, Dexus is optimistic about the Australian economic outlook.

Dexus chief executive Darren Steinberg said the group takes a long term view and its strategy of office ownership and funds management had paid off.

“We have a positive outlook for FY18 with guidance for distribution per security growth of 4.0-4.5%,” he said.

Dexus said its distribution per security grew 4.5% during the year, while funds from operations rose 1.1% from the previous year to $617.7 million.

Net profit after tax was $1,264.2 million, up just 0.3% on FY16.

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Dexus upbeat on office market growth in Sydney, Melbourne

It raised $500 million via an institutional placement to partly fund the acquisition of MLC Centre, Sydney, 100 Harris Street, Pyrmont and 90 Mills Road, Braeside.

In the office space, work has begun on 100 Mount Street, North Sydney and 105 Phillip Street, Parramatta. 

It also completed 125,600 sqm of industrial development leasing.

Steinberg said Brisbane and Perth have turned the corner, but the recovery in Perth will take time and depend on the performance of the local economy. 

“We expect to see further support for real estate values into FY18 as a result of the strength of property fundamentals in Sydney and Melbourne combined with persistent investment demand from global and local players attracted to the stable returns from quality well leased properties.”

The group will continue to focus on Australia's major cities.

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Dexus upbeat on office market growth in Sydney, Melbourne

“Our market guidance for the 12 months ending 30 June 2018 is to deliver distribution per security growth of 4.0-4.5%,” said Steinberg. 

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Dexus upbeat on office market growth in Sydney, Melbourne

Dexus manages an Australian property portfolio valued at $24.9 billion. The group owns or manages 21 Sydney CBD and CBD fringe assets valued at $8.7 billion.

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DEXUS Property Group Financial Results

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