Dexus boasts a high-quality office portfolio, enhanced by the growing trend toward hybrid working. The majority of its office towers are classified as premium or A grade, predominantly situated in the central business districts of major Australian capital cities, with a notable concentration in Sydney. As the demand for quality real estate persists, well-located, high-grade buildings like those in Dexus' portfolio are expected to remain in high demand. Additionally, the industrial portfolio is currently undervalued in terms of rent, positioning Dexus to implement significant price increases upon the expiration of current leases. We anticipate that the funds-management segment will continue to attract investor inflows, thanks to its scale, management expertise, and strong track record. Currently, Dexus is trading significantly below its net tangible assets of AUD 8.81 per security as of December 31, 2024, and offers a fiscal 2025 distribution yield of 5%. This presents a favorable margin of safety for investors as they await recovery.
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