2012 Dexus Property Group Sydney Cbd Office Tour
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2012 DEXUS PROPERTY GROUP SYDNEY CBD OFFICE TOUR OCTOBER 2012 CONTENTS DXS OFFICE PORTFOLIO 1 50 CARRINGTON STREET, SYDNEY 6 45 CLARENCE STREET, SYDNEY 10 AUSTRALIA SQUARE, 264-278 GEORGE STREET, SYDNEY 14 NOTES 20 NO. OF PROPERTIES BOOK VALUE NET LETTABLE AREA 30 $4.9bn 623,391 sqm Cover: 50 Carrington Street, Sydney, NSW This page: Sydney CBD looking east All figures are as at 30 September 2012 unless otherwise stated. DXS OFFICE PORTFOLIO OCCUPANCY BY AREA WALE BY INCOME TENANT RETENTION1 96.2% 5 years 72% 1 12 month rolling tenant retention. Year to date tenant retention is 77%. DEXUS PROPERTY GROUP SYDNEY CBD OFFICE TOUR 1 DXS OFFICE PORTFOLIO 201 Elizabeth St 50% owned, externally managed 1 Bligh St 33% owned, 100% managed 1 Bligh St 33% owned by DWPF, 100% managed GMT/GPT 50% owned, 100% managed 2 DEXUS PROPERTY GROUP SYDNEY CBD OFFICE TOUR 44 Market St 100% owned, 100% managed 383–395 Kent St 100% owned, 100% managed 309–321 Kent St 50% owned, 100% managed 83 Clarence St 100% owned by STC, 100% managed One Margaret St 100% owned, 100% managed 45 Clarence St 100% owned, 100% managed 50 Carrington St 100% owned, 100% managed Australia Square Complex 50% owned, externally managed 30 The Bond 100% owned, 100% managed Gateway 100% owned by DWPF, 100% managed DEXUS PROPERTY GROUP SYDNEY CBD OFFICE TOUR 3 DXS OFFICE PORTFOLIO GEOGRAPHICAL WEIGHTING BY VALUE BRISBANE 10% PERTH 9% SYDNEY 63% CANBERRA 2% MELBOURNE 14% AUCKLAND 2% PROPERTY TYPE BY VALUE Premium 37% A-Grade 51% $4.9bn B-Grade 4% Office & business parks 4% Car parks & land 4% SUSTAINABILITY HIGHLIGHTS AVERAGE NABERS ENERGY RATING 4.3 STARS AVERAGE NABERS WATER RATING 3.3 STARS ENERGY CONSUMPTION/INTENSITY WATER CONSUMPTION/INTENSITY GHG EMISSIONS/INTENSITY 700 900 150 140 600 800 qm qm /s 7.6% 130 qm /s es 9.2% /s -e ul 500 700 2 120 es jo CO ga 110 9.3% Litr 400 600 Kg Me 100 300 500 90 FY08 FY09 FY10 FY11 FY12 FY08 FY09 FY10 FY11 FY12 FY08 FY09 FY10 FY11 FY12 33.6% reduction 26.9% reduction 33.6% reduction 4 DEXUS PROPERTY GROUP SYDNEY CBD OFFICE TOUR Sydney Harbour Bridge Sydney Harbour AY W HIGH ELD I F SON ROAD K AD C R HI B WINDM ILL ST REET 1 50 Carrington St 2 44 Market St Observatory Park Circular Quay Light Rail KE Train Station NT STRE ET CAH ILL EXPRESSW AY HICKSON ALFR ED STREET 7 383-395 Kent St 309-321 Kent St R 3 4 OAD EET PITT STR T BRIDGE STREE DISTRIBUTOR TREET RN E S P 8 I 5 One Margaret St 6 45 Clarence St WEST ST T PHILL EE R B 6 SPRING 9 ENT STREET 10 T Royal Botanic Gardens MARG ARET STREE T E ’CONNELL ST CQUARIE STREET A k O H STRE M KENT STREET 5 EET BLIG STR YORK nyard Par y GTON W HUNTER STREE 1 GE STREET STR EET RRIN CA GEOR 30 The Bond TREE T T 7 8 1 Farrer Place Pl ERS KINE S WYNYARD STREE T DXS MARTIN PLACE 4 The Domain T REE EET STREE T R KING T S PHILLIP ST 9 1 Bligh St 10DarlingAustralia Square CLARENCE STREET Harbour SUSSEX IZABETH L E ET MALL STR RE T S EET 3 The Domain PITT 2 MARKET STREET 0 50 100 150 T Hyde Park 201 Elizabeth St KENT STREET 11 Metres (North) STREE AGH TOUR PROPERTIES Cockle TLERE Bay CAS TRE ET DRUITT S PAR K ST REET 11 BATHURST WIL STREET LIAM STREET Hyde Park T (South) REE N ST HARRIS STREET DEXUS PROPERTY GROUP SYDNEY CBD OFFICE TOUR 5 CROW WA L T IVERPOOL ST T TLE STREET REET TREE S E Wentworth Park BOURK O XFORD S TREET GOUL BURN STREET E NU E V A H RT WO H STREET NT E W ET HA Y STREE T ELIZAB OAD R ET LTIMO U e Park STRE Belmor GEORGE TT STREET PI ALBI ON STREE T Sydney Harbour Bridge Sydney Harbour AY W HIGH D ELD I F SON ROA K AD R Barangaroo HIC B WINDM ILL ST REET KE NT STRE Observatory ET Park Circular Quay CAH ILL EXPRESSW AY HICKSON ALFR ED STREET 050100 150200 R OAD Metres 50 CARRINGTON STREET SYDNEY T BRIDGE STREE DISTRIBUTOR TREET RN S EET P I WESTE PHILL PITT STR T EE Royal Botanic Gardens MARGARET STREE T CQUARIE STREET A YORK M ET KENT STREET ’CONNELL STR O STREE k STRE T GTON GE STREET HUNTER STR EET nyard Par RRIN GEOR y A STREE T C ERS KINE W MARTIN PLACE The Domain T STREE T KING STREE PHILLIP Darling H STREET CLARENCE STREET ET Harbour SUSSEX ELIZAB ET MALL STR RE T S EET The office property is a 15-level A-Grade building providing The Domain 50 Carrington Street is a core office property PITT 10,920 square metres of office accommodation and 372 square located in the heart of the Sydney CBD, metres of ground floor retail space. The property features a flexible floor plate design with the ability to occupy part of a with strong repositioning potential where we MARKET STREET floor or two contiguous and interconnecting floors. will be able to demonstrate our real estate 50 Carrington is located within the core precinct of the Sydney T Hyde Park expertise to drive enhanced performance. CBD overlooking Wynyard Park, approximately 100 metres from Cockle Martin Place. (North) STREE DEXUS acquiredBay 50 Carrington Street, Sydney for $58.5 million The property has been acquired off-market from the Retail (excluding acquisition costs) or $5,180 per square metre and Employees Superannuation Trust (REST) and is expected to AGH represents an acquisition capitalisation rate of 8.0%. settle on 30 November 2012. In line with our investment criteria, 50 Carrington Street TLERE provided a cost effective way of getting access to a high quality property, where the cost of acquisition plus repositioning is well CAS TRE ET below replacement cost. DRUITT S PAR K ST REET H ARRIS STREET BATHURST WIL LIAM STREET 6 DEXUS PROPERTY GROUP SYDNEY CBD OFFICE TOUR STREET EET R KENT STREET T S WA LEGE T L TLE STREET T Hyde Park CO (South) REE N ST CROW L IVERPOOL ST T REET TREE S E OURK Sydney target list B OXFORD S TREET GOUL DEXUS BURN STREET E NU E V A H Buy Premium Grade property RT WO H STREET NT E W ET Buy A-Grade property HA Y STREE T ELIZAB Development buy-in Reposition OAD Knockdown and Redevelopment R ET LTIMO U e Park STRE or Light Rail ORGE Belm GE TT STREET PI ALBI Train Station ON STREET Proposed Metro Station Artist’s impression of proposed entrance PROPERTY DETAILS AT 16 AUGUST 2012 LEASE EXPIRY BY INCOME AT 16 AUGUST 2012 Acquisition price excluding costs (A$m) 58.5 Acquisition rate ($ per sqm) 5,180 Net lettable area (sqm) 11,292 Initial yield (%) 5.2 35% Cap rate (%) 8.0 Target IRR1 (%) 11.2 Occupancy by area (%) 61.3 21% Occupancy by income (%) 62.3 14% Weighted lease term by income (years) 2.2 12% NABERS Energy rating 3.0 8% 3% 3% 2% Major tenants Wham 22% 2% REST 22% 0% 0% KANNFINCH 20% + Y16 Y19 FY13 FY14 FY15 F FY17 FY18 F FY20 FY21 Ownership DXS 100% FY22 vailable A 1 Three year project IRR. DEXUS PROPERTY GROUP SYDNEY CBD OFFICE TOUR 7 50 CARRINGTON STREET, SYDNEY Key achievements since exchange Corporate Responsibilty and Sustainability Since exchange of contracts to acquire the property we 50 Carrington Street provides us with an opportunity to acquire have developed and commenced our leasing marketing a well located boutique property and demonstrate our capabilities strategy and we have commenced capital works in line to add value in repositioning the property and enhancing the with our repositioning strategy. property’s energy and water sustainability initiatives. We anticipate having our new base building display floors We have developed a strategic improvement plan to upgrade 90% complete before settlement on 30 November 2012 and the building to a 4.5 star NABERS Energy rating through several we will be able to immediately launch the new 50 Carrington initiatives including replacing the central plant equipment, Street from 1 December 2012. installing variable speed drive controls and lighting upgrades. A $5.3 million capital expenditure program plan includes: As a result of these upgrade works, we are targeting over n upgrading the lobby and entrance experience of the property 200,000 kilowatt hours of energy savings per annum, equivalent to approximately $45,000 per annum. n significant mechanical plant to provide on floor comfort for tenants and improve the NABERS rating to 4.5 stars n upgrade works to lift cars Tenancy profile n significant refurbishment changes to the base building floors and amenity Level 13 Wham We believe the newly refurbished floors will attract solid Level 12 Wham demand from target niche groups looking for modern and Level 11 Australian Computer Society unique building accommodation rather than the more traditional office style often found in the Sydney CBD. Level 10 REST The façade glass2 in the low rise floors will be replaced to Level 9 KANNFINCH provide 30% more natural daylight to penetrate the floors and Level 8 O’Connell Leasing TPD Nominees further improve tenants’ experience at 50 Carrington Street. We have commenced a proactive leasing campaign and have Level 7 REST been actively talking to tenants regarding upcoming lease Level 6 ADMA Vacant expires.