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Diversified property group Dexus has earmarked growth in funds management, a rise in demand for its alternative asset funds and a return to the office in capital cities to help boost rents as primary engines of growth amid ongoing economic volatility.
During the past six months, the country’s largest office landlord began work on the “city-shaping” Atlassian Central in Sydney that will be the centrepiece for the city’s new $3 billion tech hub.
Despite staff cuts globally in the tech industry, the hub will also house other areas of Atlassian’s business as well as emerging tech-related sectors.
A render of Atlassian’s new headquarters in Sydney.
The ASX-listed trust has a market value of $8.92 billion with $26.3 billion of funds across 19 funds within its diversified funds management business. Its revenue base is about 60 per cent from the office portfolio and 40 per cent in the funds and industrial sector.
The funds management arm will also be boosted by the integration of the former AMP Capital business, which will add $18 billion to the business. Dexus is absorbing about 450 new staff members.
The group upgraded its distribution guidance to between 51¢ to 51.5¢ pre-security. It reported an interim distribution of 28¢ payable on February 28.
Dexus chief executive Darren Steinberg said despite subdued market conditions, it had been an active six months. “We have announced $773 million of balance sheet divestments since the full year 2022 result, recycling capital into higher returning opportunities and maintaining a strong balance sheet,” Steinberg said.
“Within the office portfolio, I have definitely seen the CBD resurgences post-Christmas, particularly the last couple of weeks. It’s been strong, but it’s mainly in the core of the CBD, reflecting the flight to quality buildings by a mixed range of tenants,” Steinberg said after the results briefing.
Dexus manages a $23.5 billion office portfolio, $12.9 billion of which sits in the Dexus portfolio and is 95.6 per cent occupied. Overall, effective like-for-like income growth for the office portfolio has remained positive each financial year over the past 10 years, averaging 2.7 per cent.