Dexus (ASX: DXS) secured a $3.1 billion pipeline of acquisition opportunities over the past financial year, however lacklustre revaluations hit the property group's profit margin.
Net profits dropped 25.9 per cent to hit $1.28 billion which was primarily due to lowered net revaluation gains on Dexus' investments.
In FY19 the company posted $773.1 million in net revaluation gains, whereas in FY18 the result was closer to $1.2 billion.
Despite the dip, CEO Darren Steinberg says Dexus is in a flexible position buoyed by a strong record of acquisitions.
"We entered the year with a clear strategy and readiness to respond to both market opportunities and challenges," he says.
"Our focus on maintaining a leading position in the Australian property market has been achieved through the performance of our property portfolio, selective acquisitions with future value-add, growth in our funds management business and the delivery of trading profits."
Ove the past year, Dexus increased its exposure in traditionally tightly held CBD markets through several purchases and developments.
These included a future development site a 60 and 52 Collins Street (Melbourne), a large-scale mixed-use development at 80 Collins Street (Melbourne), the remaining 50 per cent interest in Sydney's MLC Centre and three properties adjacent to 56 Pitt Street (Sydney).
"A consequence of our scale means that we are continually reviewing acquisition opportunities and seeking properties where we can add value," says Steinberg.
Group funds from operations increased 4.3 per cent to $681.5 million during FY19 and Steinberg says the company is on track to continuing this momentum.
"We are well positioned for continued success despite increased economic uncertainty," he says.
"We have high portfolio occupancy with fixed rental increases, limited supply in our core markets and the Australian office yield spread to bonds remains attractive from a global perspective."Never miss a news update, subscribe here. Follow us on Facebook, LinkedIn, Instagram and Twitter.
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