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Transcription of Finance News Network Interview with DEXUS Property Group (ASX:DXS) Executive Director of Finance and COO, Craig Mitchell

 

John Treadgold: DEXUS Property Group (ASX:DXS) is a real estate group with more than $17 billion of assets under management. The company invests in property while also managing assets for its partners. I’m John Treadgold and joining me today at the ASX Investor Series in Sydney, is its Executive Director of Finance and Chief Operating Officer, Craig Mitchell. Craig welcome.

 

Craig Mitchell: Thanks John, thanks for having us.

 

John Treadgold: DEXUS leased almost 170,000 square metres across its office portfolio last financial year, and increased its occupancy rate to over 95 per cent. How was this achieved?

 

Craig Mitchell: We had a good year last year; we were up 12 per cent year on year in our leasing. The markets beginning to turn we’re greatly seeing in our premium office space, as major corporates are now starting to make some decisions for the long term. Also the smaller end of the town, we’re seeing business services and IT grow as well.

 

John Treadgold: DEXUS is in the process of selling or has sold a number of properties in Sydney. How does this fit into your current strategy, and is this in part due to the acquisition of the Commonwealth Property Office Fund earlier this year?

 

Craig Mitchell: Yes, so in the last 2.5 years DEXUS has bought and sold over $10 billion worth of properties. We spent a lot of time divesting our US and European portfolio 2.5 years ago, and we’re looking to reposition our portfolio all the time. We’ve an active trading book that we deliver $40 million with the trading profits in FY15. And that includes saving some properties that we bought two years ago for repositioning.

 

John Treadgold: Your Funds from Operations came in at $410 million in 2014. How are you looking for the remainder of the year?

 

Craig Mitchell: Good 2014, our earnings per share were up 7.6 per cent. In FY15, we’ve given guidance of 8.5 per cent on top of that 7.6 per cent and we’re looking on track for that.

 

John Treadgold: The office and industrial markets still have plenty of upside. How will DEXUS manage any downturn?

 

Craig Mitchell: If you look at the lease expiry profile in our portfolio and going out three years, we don’t have any more than one year having 10 per cent expiring in any one year. So we’re constantly looking forward and de-risking our portfolio all the time.

 

John Treadgold: Finally Craig, what would you like to see DEXUS achieve long term?

 

Craig Mitchell: Well in the moment we’re in a really strong position as a real estate company. We’re well on track with our strategy to be the leader and we have offices in Australia. And long term is to continue on that, on that foot. Become a wholesale partner of choice, become the leader in office in Australia, have a very strong capital structure. And ultimately, start to achieve our vision to be globally recognised as Australia’s leading real estate company. That’s our long term vision.

 

John Treadgold: Craig Mitchell, thank you for your update from DEXUS Property Group.

 

Craig Mitchell: Thanks John.

 

Ends