Dexus · ASX:DXS
Dexus — DB RREEF Trust — Investor Presentation (July 2007)
38 slides from Dexus's investor presentation, Jul 3, 2007
Slide 1: DB RREEF Trust Asian Investor Presentation
DB RREEF Trust Asian Investor Presentation 3 & 4 July 2007 Victor Hoog Antink - CEO Ben Lehmann - Fund Manager DB RREEF Funds Management Limited ABN 24 060 920 783 As Responsible Entity www.dbrreef.com
Slide 2: Highlights
Highlights DB RREEF Trust – 7th largest Australian REIT – Top 70 ASX listed entity – Market Cap $5.6bn Integrated real estate platform – One of Australia‘s largest and highest quality portfolios – $8.3bn – Funds under management – $13bn Actively growing by – Acquiring new assets for DB RREEF T
Slide 3: Diversified property group
Diversified property group Australian Office - $3.9bn Australian Industrial - $1.7bn US & European Industrial - $1.7bn Australian Retail - $1.0bn Developments - $2.8bn 3rd Party Funds - $4.3bn Page 3
Slide 4: Financial performance 1H07 – on target
Financial performance 1H07 – on target Delivering income growth Property income $268.1m 5.5% Total distributions $159.6m 5.9% Distributions 5.6 cps 2.8% Maximising portfolio returns Revaluations $359m 4.7% NTA $1.65 7.8% Occupancy 95.7% 0.6% Active capital management Gearing 38.9% All
Slide 5: Share price performance
Share price performance $2.10 Acquisition of French industrial Issued $250m of Acquired portfolio of portfolio for $120m Sale of 50% of Zenith medium term notes 14 German logistics building for $126m properties for Issued $200m of $2.00 A$237.5m medium term notes Reported NPAT of $1.066bn for the $1
Slide 6: Agenda
Agenda 1. Strategy & operating platform 2. Australian REIT market 3. Financial performance 4. Portfolio overviews 5. Outlook 30 The Bond, Sydney NSW Page 6
Slide 7: Delivering on strategy
Delivering on strategy Maximise total returns to 9 DPU increased from 10.5c in FY05 to security holders 11.3c in FY07 Acquiring new assets 9 $1bn acquisitions in last 12 months – Key focus on industrial and office Actively managing the portfolio – Selective disposals 9 $200m disposals in last
Slide 8: Operating platform
Operating platform Deutsche DB RREEF Trust Security Holders Bank 100% 100% 50% 50% Funds, asset & development Direct Property Ownership Developments management Australia International Australian Office Direct ($8.3bn) 3rd Party ($4.3bn) ($6.6bn) ($1.7bn) ($900m) Office US Industrial Australian Indus
Slide 9: Deutsche Bank and RREEF relationship
Deutsche Bank and RREEF relationship Deutsche Bank owns 50% of DRT’s funds management business RREEF is Deutsche Bank’s global property and infrastructure division – Assets under management US$83bn – Number of employees 1,600 – Number of offices 15 RREEF provides access to global property mark
Slide 10: Board and management
Board and management Chris Beare (Chair) Elizabeth Alexander AO Barry Brownjohn Stewart Ewen OAM Andrew Fay * Victor Hoog Antink Charles Leitner Brian Scullin Victor Hoog Antink Chief Executive Officer Ben Lehmann Paul Say Mark Turner Tanya Cox John Easy Fund Manager Head of Corporate Head of Unlist
Slide 11: Portfolio snapshot
Portfolio snapshot DB RREEF - Trust Assets DB RREEF - Total Managed Funds European European Industrial 3% Industrial 3% US Industrial 11% US Industrial 17% Australia & NZ Office 48% Australian Australia & Industrial 17% NZ Office 46% $8.3bn* $13bn Australian Industrial 20% Australian Australian Reta
Slide 12: 2007 transactions – acquisitions $1.4bn & disposals $0.2bn
2007 transactions – acquisitions $1.4bn & disposals $0.2bn Europe Australia/New Zealand DB RREEF Trust DB RREEF Trust Acquisitions $339m Acquisitions $61m Commitments $47m Disposals $170m 3rd party funds Acquisitions $272m Commitments $78m North America DB RREEF Trust Commitments $580m For 12 months
Slide 13: Growing development activity
Growing development activity Development pipeline with estimated completion value of $2.8bn $3.0bn Total $2.3bn $2.5bn Bligh Street, Sydney $0.6bn $2.0bn $1.5bn Total $1.0bn $0.5bn $1.7bn $0.5bn $0.1bn $0.4bn $0.0bn Charlotte Street, Brisbane Underway Future DRT 3rd Party Phillip Street, Parramatt
Slide 14: Growth in 3rd party FUM – 1H07
Growth in 3rd party FUM – 1H07 1H07 FUM increased by $369m or almost 10% to $4.3bn $4,500 $4,396m $4,400 $4,318m $78m $26m $26m $4,300 $126m $272m $(81m) $ millions $4,200 $369m $4,100 $4,000 $3,949m $3,949m $3,900 FUM Acquisitions Disposals Valuation Capital Other FUM Future 30 June 06 increase E
Slide 15: Agenda
Agenda 1. Strategy & operating platform 2. Australian REIT market 3. Financial performance 4. Portfolio overviews 5. Outlook 30 The Bond, Sydney NSW Page 15
Slide 16: DB RREEF's position in the Australian REIT market
Page 16 Market capitalisation (A$bn) * 10 15 35 0 5 As at 30 June 2007 Westfield Group 34.7 Stockland Macquarie Goodman 11.1 10.7 GPT Group 9.5 Centro Properties 7.2 Listed REITs being privatised or subject to offer Mirvac 5.7 DB RREEF Trust 5.6 Investa Property 4.5 Macquarie Office Multiplex Group
Slide 17: Current market trends in the Australian REIT market
Current market trends in the Australian REIT market Highly Well established, highly securitised market sophisticated market Approximately 70% of Australian investment grade real estate owned by REITs Increasingly Australian REITs actively expanding their international presence global Increas
Slide 18: Agenda
Agenda 1. Strategy & operating platform 2. Australian REIT market 3. Financial performance 4. Portfolio overviews 5. Outlook 30 The Bond, Sydney NSW Page 18
Slide 19: Financial summary
Financial summary Summary DPU (cents) f3 .7% Jun 05 Jun 06 CAGR o 11.3 11.5c 11.0 Total income ($m) 810 1,463 11.0c 10.5 EBIT ($m) 605 1,250 10.5c 10.0c Profit after tax ($m) 396 1,010 2005 2006 2007 Portfolio value ($m) 6,806 7,995 NTA ($) NTA per security ($)1 1.29 1.53 Gearing ratio (%) 39.0 38.3
Slide 20: Disciplined financial management
Disciplined financial management S&P Rating BBB+ Average debt duration 3.1 years Debt hedged 91% Average hedge duration 5.9 years Interest cover 2.9x Weighted average cost of debt 5.70%1 – $1,720m at 6.36% – US$1,159m at 4.69% – €203m at 4.46% Gearing (net of cash) 38.9% 1. Inclusive o
Slide 21: Agenda
Agenda 1. Strategy & operating platform 2. Australian REIT market 3. Financial performance 4. Portfolio overviews 5. Outlook 30 The Bond, Sydney NSW Page 21
Slide 22: Office portfolio
Office portfolio Total asset value $3.9bn NOI (6mths to Dec 06) $125m Number of properties 29 - 24 offices, 5 car parks Occupancy by area 97.3% Average lease duration 6.4 yrs - Approx 15% subject to market reviews annually Premium & A grade 86% Development $900m - estimated value on co
Slide 23: Office – key profit drivers
Office – key profit drivers Australia’s largest manager of high quality office properties – High barriers to entry – Majority of buildings Prime or A class – Vast majority of buildings in major commercial centres Australian office markets experiencing strong growth phase – Strong demand and limi
Slide 24: Office – developments
Office – developments Bligh Street, Sydney - 37,000sqm Stage 1 DA approved Highly contemporary design Energy efficient and sustainable Presenting to potential tenants Stage 2 DA submission in July 2007 Expected completion in 2010/11 Artists impression, Bligh Street, Sydney Page 24
Slide 25: Office – developments (cont.)
Office – developments (cont.) Presenting to potential tenants Albert Street, Brisbane – 41,000sqm DA lodged Artists impression, Albert Street, Brisbane Qld Phillip Street, Parramatta – 20,400sqm DA achieved Victoria Cross, North Sydney – 5,000sqm DA achieved Artists impression, Phillip Stree
Slide 26: Industrial portfolio
Industrial portfolio Total asset value $3.4bn – Australia (41 properties) $1.7bn – USA (93 properties) $1.4bn – Europe (22 properties) $339m NOI (6 months to Dec 06) $115m Occupancy (by area) – Australia 95.7% – US 94.1% – Europe 92.2% Average lease duration – Australia 4.8yrs – US 3.3yrs –
Slide 27: Industrial – key profit drivers
Industrial – key profit drivers Large, diversified quality portfolios - largely in Australia and US – Benefiting from cap rate compression and strong sector fundamentals Leveraging the RREEF global platform to grow international portfolio in US and Europe through acquisitions Strong growth exp
Slide 28: Industrial – developments underway
Industrial – developments underway Australia Building area Cost Due sqm ($m) Laverton North, Victoria 53,000 33 Q3 07 Pound Road West Dandenong, Victoria 4,965 10 Q1 08 Total 57,965 43 USA Building Cost Due area sf ($m) Turnpike Distribution Centre, Miami Fl 268,119 32 Q2 07 Atlantic Corporate Park,
Slide 29: Industrial - greenfield pipeline
Industrial - greenfield pipeline Property Estimated value on completion ($m) Australia Laverton North, Victoria 400 144 Wicks Road, North Ryde1, 200 New South Wales 3 Brookhollow Ave, Baulkham Hills, 100 New South Wales Axxess Corporate Park, Mt Waverley, 55 Victoria USA 2 sites, Tx and Va 70 Total
Slide 30: Industrial – international acquisitions
Industrial – international acquisitions Property Cost Due ($m) Germany Düsseldorf* 26 Q2 07 Whirlpool Investment Program (to total $600m) Orlando, Fl* 31 Q2 07 Toronto, Canada 80 Q2 08 Denver, Colorado 21 Q1 09 Other site selection (well advanced) 158 * Completed Page 30
Slide 31: Retail portfolio
Retail portfolio Total asset value $1.0b NOI (6 months to Dec 06) $28m Number of properties 6 Occupancy 99.7% Average lease duration 5.3yrs Refurbishment projects – Two projects under development $190m* * Represents a 50% interest in the developments Westfield Mount Druitt, NSW Page 31
Slide 32: Retail - key profit drivers
Retail - key profit drivers High quality of portfolio - strong income streams Co-owned and managed by Westfield Redevelopment opportunities – North Lakes, Queensland - $90m North Lakes, QLD – 52,833 sqm on completion – Majors – Coles, Safeway, K-mart, Target, Aldi – Opening – 2Q08 – Plenty Val
Slide 33: 3rd party funds
3rd party funds FUM $4.3bn DWPF $1.9bn Private client mandates $2.3bn Syndicates $192m Funds performance Exceeding benchmark Development pipeline $0.7bn on 8 projects Acquisitions & commitments $272 million (last 12 months) Gateway Complex, Sydney NSW Page 33
Slide 34: 3rd party funds – strong investment performance
3rd party funds – strong investment performance All 3 unlisted funds and mandates (DWPF, AXA and STC) outperformed Performance at 31 Dec 06 benchmarks 25% 10 assets were acquired in 2007 18.4% 19.3% 20% Current buy mandates 13.9% 15.8% 15% 10% 5% 0% 1 Year 3 Years Benchmark Unlisted Page 34
Slide 35: Agenda
Agenda 1. Strategy & operating platform 2. Australian REIT market 3. Financial performance 4. Portfolio overviews 5. Outlook 30 The Bond, Sydney NSW Page 35
Slide 36: Outlook
Outlook Solid portfolio performance Increased portfolio income, occupancy and value Increasing acquisitions Over $1 billion committed this year Increasing development pipeline Over $2.8 billion Increased distribution for 2007 11.3 cents per stapled security Page 36
Slide 37: Highlights
Highlights DB RREEF Trust – 7th largest Australian REIT – Top 70 ASX listed entity – Market Cap $5.6bn Integrated real estate platform – One of Australia‘s largest and highest quality portfolios – $8.3bn – Funds under management – $13bn Actively growing by – Acquiring new assets for DB RREEF T
Slide 38: Important Information
Important Information This presentation is issued by DB RREEF Funds Management Limited (DRFM) in its capacity as responsible entity of DRT. It is not an offer of securities for subscription or sale and is not financial product advice. Information in this presentation including, without limitation, a