Thank you for standing by, and welcome to the Dexus 2022 annual results briefing conference call. All participants are in a listen-only mode. There will be a presentation followed by a question and answer session. If you wish to ask a question, you will need to press the Star key followed by the number 1 on your telephone keypad. I would now like to hand the conference over to Mr. Darren Steinberg, Chief Executive Officer. Please go ahead. Good morning, everyone, and welcome to our 2022 full year results presentation. As an owner, manager, and developer of property across the country, I'd like to start today's presentation by acknowledging the traditional custodians on the lands on which we operate and pay our respects to their elders past, present, and future. Today, you'll hear from Keir on the financials, Deb on our funds business, Kevin on office, Stewart on industrial, and Ross on investments and our development pipeline. We'll then finish with any questions you may have. We've achieved a lot this year in what has been a complex environment as we continued our strategic journey of becoming a more capital efficient multi-sector real asset platform. During the year, we further progressed our strategic objectives, which include generating resilient income streams and being identified as the real estate investment partner of choice. Our strategy is supported by the size of our balance sheet, access to pools of capital, group development pipeline with committed projects spanning circa 660,000 m², and our commitment to sustainability. The acquisition of AMP Capital's real estate and domestic infrastructure business accelerates our strategy and positions Dexus as a leading real asset manager, underpinned by our best practice governance and risk management framework. Our leadership across ESG is globally recognized. For the third consecutive year, Dexus was the only real estate company to achieve a gold-class distinction in the S&P Global Sustainability Yearbook, retaining our leadership on the Dow Jones Sustainability Index. We delivered on our commitment to achieve net zero emissions by 30th of June 2022 across the group portfolio. This was achieved through continued investment in energy efficiency and transitioning to renewables, with the remainder supported by nature-based carbon offsets. We launched our Reflect Reconciliation Action Plan, which commences our RAP journey through acknowledging and connecting with Australia's First Nations peoples. We remain committed to progressing gender equality across our workforce and are proud to have been named as an employer of choice for gender equality for the fifth year running. I'll now pass you on to Keir to cover the financials. Thanks, Darren, and good morning, everyone. Turning to the composition of the result. Our property portfolio delivered AFFO of AUD 622.6 million. Excluding the impact of rent relief and provisions, office like-for-like income growth was 2.7%. Industrial like-for-like income growth was 3.1%, excluding business parks. Management operations' FFO grew significantly as expected. We enhanced our disclosure this year with a new FFO category reflecting distribution income that Dexus earns on its co-investments in pooled funds such as DHPF and DXI. The trading business delivered AUD 23.4 million of post-tax profits across four projects. The external independent valuations resulted in a total of AUD 926 million or 5.6% increase on prior book values for the twelve months to June 30. Cap rates drove 70% of the valuation uplift for the industrial portfolio, while they drove 55% of the uplift for the office portfolio. Turning to the result in detail. Office property FFO reduced due to divestments, including Grosvenor Place in Sydney, partly offset by fixed rent increases, the acquisition of Capital Square in Perth, and non-recurring income on development impacted properties. Industrial property FFO increased due to the Jandakot Airport acquisition, recently completed developments, and leasing success. FFO from management operations increased significantly in line with the growth in our funds platform. Group corporate costs were up, driven by the addition of APN to the platform and higher insurance costs. Net finance costs were down as a result of the interest reimbursement for the delayed settlement of Grosvenor and interest income from Capital Square. Income from co-investments in pooled funds grew meaningfully, driven by our investments in DXI, DXC, AUHPT, and DHPF. Net other expenses increased, driven by FFO tax expense on the management business. Overall, underlying funds from operations grew substantially on the prior year, up 11.1% on a per security basis. Trading profits were in line with our expectations, and maintenance CapEx and incentives increased compared to the prior year. AFFO and distributions grew by 2.7% per security. This result is pleasing given our initial market guidance for distribution growth of not less than 2%, which was upgraded in the second half to growth of not less than 2.5%. Our distributions continue to be paid out in line with free cash for which AFFO is a proxy. Revaluation uplifts drove a 7.5% increase in NTA to AUD 12.28, which doesn't reflect the embedded value of our funds management business or our development pipeline. Moving to our capital management. At 26.9%, our gearing remains below the 30%-40% target range. Combined with strategic asset recycling, this provides capacity to fund the acquisition of the AMP Capital platform and development opportunities. We have AUD 1.9 billion of cash and undrawn debt facilities. Our percentage of hedged debt averaged 65% in FY 2022, broadly in line with past periods. While lower than FY 2021, material asset sales impacted the comparative period. We remain committed to maintaining prudent hedging positions through economic cycles. The weighted average maturity of our hedge book is 5.9 years, with more than AUD 4 billion of hedging in place for FY 2023. Thank you, and I'll now hand over to Deb. Thanks, Keir, and good morning, everyone. As Darren mentioned, we have successfully continued to deliver on our strategy to grow and diversify our funds management business. Our fund investors benefit from our full service offering with multi-sector capabilities, a strong track record of performance, and high standards of corporate governance that are externally tested and focused on delivering outcomes in the best interest of our investors. In an ever-changing market, we have been able to provide liquidity to those investors whose strategies have required it, while also raising new equity for pooled and joint venture opportunities. Core to our ability to work with capital is understanding their investment drivers and ensuring we continue high levels of performance across all our funds, successfully outperforming the benchmark or the fund investment strategy year on year. ESG continues to increase in importance as an investment hurdle, and as Darren mentioned earlier, Dexus is a global leader in sustainability, which aligns to our capital partners' ambitions and adds long-term value to the assets under management. Taking a look at the characteristics of our funds management business today. We have a large diversified investor base with established Australian and offshore capital partners. Our diversified product suite includes unlisted institutional pooled funds, institutional joint ventures, listed funds, real estate securities, opportunistic capital, direct unlisted funds across all the major real estate sectors. We have an active investor relations strategy emphasizing broad and deep relationships with capital partners, and our recent market soundings have provided the following insights. Australia remains an attractive place for real estate investment. Investors are actively seeking investment opportunities. However, market uncertainty is causing a more conservative approach to capital deployment. While logistics, high quality office and healthcare are the preferred investments, opportunistic projects across all sectors are of interest. Some highlights for the financial year 2022. All funds and partnerships have performed well, with DWPF continuing to outperform over all time periods, and DHPF and DALT delivering strong one-year returns of 20.4% and 28.9% respectively. We further diversified our investor base during the year with the addition of high net worth capital, family offices, and new institutional investors. We continue to execute the investment strategies of our partners, including undertaking AUD 2.5 billion of acquisitions and AUD 2.2 billion of divestments. These included the acquisition of Jandakot Airport Industrial Precinct for fund partners DXI and Cbus, securing the first four investments for DREP one. We also completed AUD 1.8 billion of asset sales to fulfill the legacy ADPF fund redemption requests. Importantly, we progressed a number of ESG initiatives, with DWPF named as the regional sector leader for GRESB. We look forward to another growth-oriented year ahead, and I'll hand you to Kevin for the office update. Thanks, Deb, and good morning, everyone. Looking at office portfolio performance, FY 2022 was another strong year of leasing activity in an operating environment that continued to present challenges. Occupancy increased from 95.2% to 95.6%, and a weighted average lease expiry increased slightly to 4.7 years. Our portfolio, particularly Sydney, continues to benefit from the flight to quality, with 47% of new deals transacted involving customers upgrading quality of space. Incentives appear to have peaked across our key markets, and we expect them to begin moderating over the next six months. Sydney is showing signs of recovery with positive effective market rent growth over the past two quarters. The latest wave of Omicron, combined with the presence of the seasonal flu virus, has stalled the return to the office, which we expect to pick up again in the coming months. Moving on to our expiry profile. The space we currently have available is concentrated in Melbourne, where we have made progress and are in advanced negotiations with a number of tenants. Expiry levels are below our target threshold maximum of 13% per annum over the next four years. Our diversified tenant base presents limited concentration risk with our top customer, the State of Victoria, representing 3.5% of income, and our top ten tenants combined representing 17.2%. The flight to quality trend is evidence that businesses continue to value the workplace as a lever to attract and retain staff. As business leaders come to understand that flexibility is important in the workplace, they are also starting to see the impact that prolonged working from home is having on productivity, culture, and equitable distribution of work. Our customer feedback is mixed. Many large employers are experiencing falling productivity, while some of the smaller, more agile organizations are reporting the same or better outcomes. Each organization is different, and every individual is different. Workplace models need to consider both going forward. Notwithstanding the evolution of work from home trends, organizations are still leasing space, and were reluctant to reduce their footprint in the majority of transactions we concluded over the year. Further evidence of companies looking to the future within our leasing results include customers utilizing their incentives to invest in fit-out and engage with our strategic workplace team, Six Ideas. Strong interest in our development pipeline with large deals with Atlassian and at Waterfront and 123 Albert Street in Brisbane. Thanks. I'll now hand you over to Stewart, who will take you through industrial. Thanks, KG, and good morning. The performance of our industrial portfolio, where we leased over 700,000 m², including 373,000 m² across our stabilized properties, and a further 330,000 m² of development leasing, which Ross will talk to shortly. Occupancy has hit a four-year high at 98.1%. This was driven by leasing in the core logistics portfolios, with occupancy at 99.6%, excluding the business parks. Effective like-for-like income growth of the core industrial portfolio was 3.1%, excluding the business parks. This result reflects the quality and location of our properties as rising transport costs increasingly favor well-located industrial assets, as well as the consistency and intensity of our leasing efforts. Incentives had declined markedly on last year to 13.5%, and our portfolio delivered a one-year total return of 18.9% to the 13th of June, and excluding the business parks, it was 24.1%. The portfolio was 6% over-rented at FY 2021. Thanks to strong market rent growth and our leasing efforts, that position has now reversed to under renting of 4%. Strong market rent growth creates the opportunity to grow income by resetting the rents on upcoming lease expiries across approximately one quarter of the portfolio in FY 2023 and FY 2024. Let's have a look more closely at what's driving demand. Industrial take-up remains above long-term average as businesses invest in extra distribution space to cater for last-mile fulfillment. This demand is very broad-based, including medical supplies, supermarkets and groceries, agribusiness, material supporting transport infrastructure, general e-commerce, and retailers investing in last-mile fulfillment. As I mentioned, transport costs have increased materially and now represent up to 50% of an occupant's costs compared to rent, which accounts for circa 5%. This reinforces the importance of having well-located properties, given a strategically located facility can help to contain transport costs far more materially than the impact of rent increases on the bottom line. Dexus's development capability is supporting our customers' growth requirements across Australia and delivers quality new products to the Dexus platform. Thank you, and it's now over to Ross. Thanks, Stewart, and good morning, everyone. It's been a busy period as we continue with our strategy of capital recycling to improve the balance sheet portfolio quality and provide capacity to fund our growth drivers, being the funds and development businesses. As you can see on the slide, at a group level, we were marginally net sellers in FY 2022. For the balance sheet, we acquired AUD 2.5 billion and sold AUD 3.4 billion, which provides capacity to fund the AUD 1.9 billion we committed to the development pipeline during the year. We also transact to improve portfolio quality. The capital recycling activities alone increase the portfolio allocation of Prime by 140 basis points and improve WALE by about 12% or 0.6 years. While conditions for development have been impacted with high funding and construction costs, we still see development as a key driver of growth and a contributor to long-term returns. As many of you know, developments can create value a number of ways. They can be highly profitable in their own right. We've delivered very healthy margins of circa 50% across the industrial projects in FY 2022. Developments can also provide amenity and reshape a precinct where we capture value through adjacent leasing. This is the case at 25 Martin Place, where office space rents have grown about 20% over the re-lease space in FY 2022, and we had a similar experience across the road with the lobby upgrade of 60 Castlereagh Street. Developments can create high-quality new product with stable, clean income streams, like the Australian Bragg Centre with a 20-year WALE. Over the past three years, we've made a concerted effort to grow the industrial development business, and in FY 2022, we've started to see the results with a record amount of completions. As Stuart mentioned, in FY 2022, we delivered circa 330,000 m² of high-quality product at an average yield on cost of 6.3%. We have very strong levels of development leasing, which has seen us increase the completions in FY 2023. Dexus is now positioned to be a key national partner for clients looking to invest in new facilities or to consolidate their real estate relationships with active land banks ready to meet new client briefs in every major national market. The group development pipeline covers circa 2.8 million m² of industrial land to be developed over the next seven years. The balance sheet currently holds about half of this pipeline, with the rest sitting in our funds business. From a capital allocation perspective, the balance sheet currently has circa AUD 1.9 billion committed into the development projects, and this represents just under 15% of the portfolio. At the half year, we provided some guidance around the embedded margins in the development pipeline. While high interest and construction costs have impacted likely margins, the book remains profitable and we continue to activate projects, many of which have long lead times, and we intend to retain a long-term interest in. De-risking projects has also impacted margins. Projects like Atlassian Central are 100% pre-committed with the design and construct contract in place with a tier one builder. Taking current market assumptions and the pipeline is expected to generate development margins in the mid-teens, inclusive of funding costs. The focus for FY 2023 is to continue the momentum in industrial and finalizing the pre-leasing for major projects at Atlassian Central, Waterfront, and 60 Collins Street, where we also expect to commence pre-development works in the next 12-18 months. Turning to trading. Well, the trading book delivered in line with where we guided the market to. AUD 23.4 million of post-tax profits coming from a number of industrial projects. In FY 2023, we expect a larger contribution from the trading book with a healthcare asset and a number of industrial projects being considered for sale. We expect to replenish the book through a combination of opportunities in the existing portfolio as well as new acquisitions, and these will most likely be in JV with the new opportunistic fund, DREP, with which we jointly acquired two projects during the year. Thank you, and I now pass you back to Darren. Thanks, Ross. Our strategy is supported by a fully integrated model of real estate ownership, management, and development that is positioned to capitalize on underlying structural trends. Our capital is invested in a AUD 18 billion high-quality real estate portfolio located in diverse markets, which generates stable core type returns. We believe that high-quality assets will continue to outperform secondary assets in the near term. Our diversified AUD 26 billion funds management business enables capital efficient investment alongside third-party clients, with the platform growing by an average 16% per annum over the past decade. Our AUD 18 billion development business provides embedded future value by improving the quality of the portfolio while providing inventory to grow our third-party relationships. Our next phase of growth will be underpinned by the acquisition of the AMP Capital platform. We are working with AMP and third-party stakeholders to achieve the conditions precedent, and the transaction is expected to complete in late September this year. Subject to the final assets under management that transition across, this transaction has the potential to add a further AUD 21 billion to the group portfolio. It will bring with it an expanded product offering, new capabilities in infrastructure, and an enhanced retail platform. As our investor base allocates more capital to real assets, we will provide a complete offering for third-party investors. Post the transaction, we expect the contribution of our funds management and trading businesses to increase from around 12% of earnings to closer to 20% of earnings. We look forward to providing more details on our next strategy day that we intend to hold in 2023. To conclude, Dexus has demonstrated resilience, growing or holding distributions over the past few years despite the impacts of the COVID-19 pandemic. Recycling assets has enabled us to maintain a strong balance sheet, giving us capital to fund our development pipeline and growing funds management business. We anticipate a challenging period over the next two years with rising interest rates, ongoing supply chain disruptions, a global energy crisis, and geopolitical risks contributing to continued economic uncertainty. Higher interest rates are expected to impact our results this year. Based on current expectations regarding interest rates, continued asset sales, and barring unforeseen circumstances, we expect distributions of AUD 0.50-AUD 0.515 per security for the 12 months ended third of June 2023. Below the AUD 0.532 per security distribution delivered in FY 2022. In the year ahead, we will integrate AMP Capital's real estate and domestic infrastructure equity platform. Looking beyond FY 2023, we are set to emerge as one of the leading real asset managers in the Asia-Pacific region, positioned to capitalize on underlying structural trends, and we are confident of continuing to deliver long-term value. Thank you. We'll now take any questions you may have. Thank you. If you wish to ask a question, please press star one on your telephone and wait for your name to be announced. If you wish to cancel your request, please press star two. If you're on a speakerphone, please pick up the handset to ask your question. Your first question comes from Sholto Maconochie with Jefferies. Please go ahead. Your next question comes from [Ronnie Cheng] with Jefferies. Please go ahead. Oh, hi. It's Sholto here. My phone dropped out. I'm back on for the call. Just a couple of questions on the guidance outlook. Can you give us a few assumptions around what are you seeing on asset sales, cost of debt? It seems a bit below expectations for FY23. Okay. Keir, do you wanna talk to that? Sure. There are a number of moving parts when we think about FY23 guidance. In terms of interest rates, we're expecting floating rates in a range between 2.75% and 3.75%. In terms of asset sales, look, over the last few years we've sold circa AUD 1 billion, maybe a touch higher, so it's probably a reasonable guide to how we think about this year. I think the other key piece is just around trading profits. We're indicating somewhere in the order of AUD 50 million-AUD 55 million of post-tax trading profits. That's a bit higher, like almost double on the trading profits is a bit higher, so it just implies that the asset sales and the cost of debt are the biggest driver. 'Cause it's cumulative, you've got the asset sales coming through from 2022 plus more this year. It's just the cost of debt and those asset sales are the biggest drag on your guidance. Does that? Is that a fair comment? Yeah. If we look at it through the last few years during COVID, we've either held or grown our distribution. We're coming off a relatively high base to start with. Interest rates, as Darren said, naturally will have an impact. The interest rates impact takes you to below the bottom end of guidance alone. You know, through that, we've got some earnings contributions through growth in the underlying portfolio and higher trading profits this year. Outside of that, there are a lot of moving parts. As you mentioned, we've got the impact of assets that we've sold to date, the impact of assets that we're expecting we'll sell through the course of FY 2023, and obviously the investment in the AMP Capital platform, which we're expecting will be broadly neutral in 2023, and then accretive from the first full year thereafter. Okay. Thanks. Thanks for the color there. Then just on the leasings. The leasing is quite strong. I think, KG, you were saying the incentives that stabilizer coming down. Is that across all markets, including Melbourne, or is it just Sydney prime premium? Definitely coming down in Sydney and Melbourne probably flat from where it's been. The other markets probably flat. We're not seeing them head north. Definitely coming down in Sydney, though, but the other market's flat. Okay. Just finally touching on the capital side of things. Obviously the vals a bit backward looking for the June number. What are you seeing on the transaction side? You've still got a lot of assets to sell, in terms of demand and any softening in the sort of cap rates implied in the new deals? I think at this stage, it's definitely slower than it was. It's very, very sort of the market has separated. Like, if you've got anything secondary, it's gonna be very, very hard to transact at anywhere near book values. However, we're still seeing very good demand for the better quality product, which is effectively what we would be selling. Is the demand from Asia or intended where the geography was coming from? Still reasonably broad-brushed. I mean, I'm just very thankful that the product we're selling is at the better end of the quality spectrum. I understand this. All right. All right. All right. Thanks very much. Sorry, Ross has just got a bit more color there. There is still a lot of capital out there. I think the question is just pricing, right? We're running an industrial sales process at the moment. We've got, you know, we're happy to sell it in a line or in components. We have more than 50 people looking at that actively in the VDR at the moment. The, you know, there's a question of price, but I think there is still a lot of capital out there, which is quite encouraging for us. All right. Thanks, Ross. Thanks, team. Cheers. The next question comes from James Druce with CLSA. Please go ahead. Hi, good morning. Just to touch on Sholto's comments around guidance, can you also provide some color around OpEx, like for like growth, occupancy in the office and industrial portfolios, please? Sorry, I missed the first part of the question. OpEx? OpEx. Maintenance CapEx incentives. Sure. Look, I expect the CapEx to be broadly in line with FY 2022. We're still gonna have elevated incentives even though, you know, they seem to be coming off a little bit. We've got a lot of leasing to do, particularly in Melbourne. Expect that to be the same. What was the other part? Like- for- like. Yeah, look, like for like is still gonna be. The leasing spreads could improve half to half, and so we expect continued improvement in those spreads, particularly as incentives come down and like for like is anticipated to be positive, but we're not giving a number on that at this stage. Same for the industrial, very strong. Occupier demand across the markets we operate in. I think we're well-disposed in Western Sydney in particular when the M4 East tunnel comes through via Rozelle. It's gonna drive rents harder. I expect so, like for like, again, no guidance, but expect it to be a positive outcome. Obviously incentives are coming down. I think in Western Sydney, the core logistics portfolios were at 5% or under. Other markets, depends on the product, you know, whether it's logistics or office park, but in the end, it's a downward trend for TO incentives at this stage. Okay. That makes sense. Maybe a follow-up to KG. Looking at the like-for-like growth of 1.7% for office, you've increased occupancy 30-40 basis points over the period. Your FFO increases are something around that 3.8% mark. Does that mean your leasing spreads are sort of negative 15%+ over the period or where do those like-for-like leasing spreads sit? The leasing spreads were -14% overall for the total portfolio. -10% in Sydney. The face spreads were actually +7% for the year, and +10% in Sydney, which is interesting. In terms of the like for like, the back end, the second half was impacted by some one-offs. So we had write-offs, amort write-offs for Victory Offices at 100 Mount Street and Mulberry tenant at 80 Collins Street. So we had the benefit of most of the income during the year, but lease surrenders and amort write-offs laid in the period. Otherwise, I think like for like would have been about 3.8%. Okay. What was the dollar value of those? The impact of that was about one. The impact of that was about 1% to like-for-like. Okay. That's it for me. Thank you. Your next question comes from Richard Jones with JP Morgan. Please go ahead. Oh, thanks. Just a question in relation to the industrial portfolio that's been discussed in the press of about AUD 100 million that you guys are looking to offload. Is that just a kind of recycling process or is there anything specific about the assets that is driving your sell down? Yeah. Ross, do you wanna pick that one up? Yeah. I think we've been pretty clear with the market that we're trying to, you know, put more of our capital invested alongside third party capital, whether it be in funds or JVs. To some extent, these assets are. I won't say they're all on the balance sheet, but they're really the residual part of the industrial portfolio that it doesn't currently sit in funds or is in development inventory. Some of those are trading assets that we wanna sell to, you know, deliver trading profits in FY 2023, and some of those are assets that we think more naturally sit with other third party capital or with other managers. We're working through that process at the moment. You know, we have higher and better uses for that capital. You know, we've got very exciting development pipeline. You would have seen the results, I guess, the opportunity we have just to recycle that capital into the industrial development pipeline, which is enormous in delivering very, very strong returns. For us, it's really just about capital rationing, capital allocation and driving better returns from the capital that we have. Okay. That makes sense. Ross, can you just clarify the book exit yield that you might be getting and then the redevelopment yield on cost on industrial? I think you called out what FY 2022 was, but. Look, I- It's probably premature to be telling you what we wanna sell them 'cause we have a live process. We do have expected yield on costs. I think if you look in the appendices for a lot of those development projects, we have, you know, a range of what we think the yield on cost is, and you can work backwards on what a cap rate is in the current portfolio. We disclosed the vals. That's probably a good place for you to start. I'm happy to have it offline if it's useful. No, that's fair. Just in terms of waterfront, what are the hurdles required to commence that project? I think we're, you know, we'll be having further discussions with the board over the next two to three months. We're having very good progress with the leasing. There'll be some further leasing announced in the next couple of weeks. We're fine-tuning the pricing. It's obviously a complex site. We've got a price that we're comfortable with. We're doing some further fine-tuning there. At this stage, we're reasonably confident that we'll be moving forward. Our capital partner that's with us on that site is also committed to moving forward. Okay. Just one final question, Darren. Just in relation to Collimate, can you just give us any color just on the discussions you're having with the investors? Obviously, there's been some press speculation about other interested parties in some of the mandates. Just maybe discuss how you're going in terms of locking that AUM away and where any risks there are. Yeah. Look, it's going very well. Obviously, there was a lot of noise in the market with regard to AWOF. As you know, before we got involved, that was 100% gone. The final vote was, what, 60% away, but that was one investor that swung at the end. Look- While disappointing strategically, actually financially, it's not a bad thing. It's given us sort of circa AUD 500 million-AUD 700 million more flexibility in our balance sheet, and it's taken any pressure that may have been on us this year as a result of that. The rest of the discussion is going really well. The team is working. This is quite a big integration, as you'd expect. The investor feedback has been very good. Infrastructure funnily enough is going very, very well and from asset consultants and investors, and we've already raised some money, the joint teams in that space, and we're working on some potential acquisitions in that space together with the infrastructure team. Real estate starting to, you know, tighten up a little bit, but as you would expect, it's a competitive market and everyone's had a little go in there. At the moment, as I said, about AUD 21 billion is what we expect. You know, I'd be disappointed if it's not that level, but, you know, what could it be? It might be AUD 18 billion-AUD 20 billion, depending on the final outcome. Integration is going very well. A lot of work being done by the team, and we expect to close that out by the end of September this year. Most of the debt approvals are all coming through. Yeah, we're heading in the right direction and, you know, we're very excited about what we can do with that platform, you know, over the next, you know, three-five years. It's gonna be a great growth engine for us. Okay. Thanks, Darren. Your next question comes from Tom Bodor with UBS. Please go ahead. Good morning, everyone. Just a quick question on the development pipelines. I think if I look across your sort of key development projects, you've got over AUD 10 billion of office developments, and a number of the other REITs have very substantial and growing office pipelines as well. What I'm interested in is how do you think a flight to quality looks for the established portfolio? You know, if a lot of this stuff gets delivered, what do you think will happen to your existing assets? Yeah. Look, I'll talk, then I'll hand over to Kevin. I think one thing we've been really focused on is where we hold our assets, what parts of the city in. I think the pleasing thing, we've always spoken about these city-defining developments we have, they're in the parts of the city that the customers wanna be located in. You know, the tech or central precinct is gonna be the new sort of hotspot. They can work very closely with the universities down there. It's right on the best transport links in the city, and we're getting very good demand down there. As far as the core holdings in Sydney and Melbourne, they're in the right part of the cities where the business is being done and where the clients, i.e. the clients' staff want to be located. They're coming in for the amenity that those sites provide. You know, waterfront, you know, Central, Collins Street, you know, these are the positions that the clients wanna be located in to help attract their staff to come back to the office, and that's where the key focus has been on our pipeline. Kevin. Yeah. I might add that when that term flight to quality is used, I think it's a little misleading in some respects because I've been in office markets for quite a few decades, and I don't know too many organizations when they move into inferior space. I think the concept of flight to quality, yes, it's more prolific in terms of larger organizations moving into new shiny space, particularly when markets reprice off the back of periods of recession and downturns and oversupply. You always get that cascading up into better quality, premium, A-grade, but even B-grade. I look at Australian office markets and 80% of office occupants occupy space in A-grade or less. We've seen numerous examples of organizations upgrading across sectors, and that will probably be more amplified at the better end of the market the next couple of years as incentives remain elevated, and organizations have the opportunity to fund large parts of their capital cost of relocation by way of the incentives available. Okay, thanks very much. Maybe just one for Ross. Related is the development metrics have slightly softened, and I think you mentioned margins in the mid-teens versus previously around that sort of 20% mark. I'd just be interested in what are you seeing on the costs on your feasibilities in the last six or 12 months? Has there been any assumptions on the sort of rental side softening as well? Yeah, it's a common question, Tom. I think, look, costs have grown a lot. We probably see it more, the higher frequency of what we're tendering in the industrial business, we get probably better or more data points there. You know, a multi-unit estate facility probably costs 30%-35% more to build today than it did 12 months ago. A standalone shed's probably 10%. A multi-level product is probably 40% more expensive. Costs have run very hard. Obviously, industrial, you've had offsetting factors of really strong rental growth. That's actually helped us a lot. Obviously we have historical land prices, which have meant, as I sort of reported, you know, very, very strong margins in the development business for the projects we delivered this year of circa 50%. Going forward, I think probably the pleasing thing on the cost side is the cost movements, sort of first half to second half. We've seen probably a real slowdown in construction cost escalations. On the industrial side, sort of second half of the year, escalations were probably only about 10%. So that helps us. On the office side, interestingly, costs have actually been pretty flat. You know, I don't have any data to support this, but I suggest the slowdown in the multilevel residential construction projects has seen a lot of those crews swing into office projects. There really hasn't been a lot of new office activity in terms of projects starting. I think that has helped keep a lid on some of the office costs, and I think it that slowdown in supply is actually also gonna help, I think the office market generally. I know we didn't sort of labor this point in the presentation, but the amount of supply that's gonna be delivered into Sydney over the next couple of years is just basically zero. I think it's like 0.4%. I think that's gonna help us as well. Okay, thanks. On the office side, is the softening in metrics more on the sort of rental side that your pre-commitment, some of the yields have come in at the lower end of the range now? Well, I think you know, face rents are still growing. I think that's the pleasing thing. If you think about a lot of the pre-leasing we're doing, you know, whether it be in Waterfront or, you know, unsolicited interest coming into projects like 60 Collins Street, people are still prepared to pay record rents for the right product. Part of that is, I guess to sort of Darren and Kevin's points earlier around what is the role the workplace is gonna play in bringing people back, you know, to inspire them, to encourage them to build those cultures, and all the sort of soft benefits that come with a great workplace. You know, office cost is still a very, very small part of the cost of doing business. Labor markets are very tight, and wages are pushing forward. Actually, if you can use your workplace to drive productivity, paying a little bit more rent can make sense. I think businesses are being smart around what sort of footprint they need. Do they need maybe the size footprint that they had before? How can they use that space smarter as well? I think, you know, a lot of the new workplaces are actually driving better density and productivity outcomes as well. In short, face rents are still going up in our developments. Yep. Okay. Okay. That's good. Thank you. Your next question comes from Stuart McLean with Macquarie. Please go ahead. Good morning, and thanks for your time. Two questions on Collimate to start with, please. First one is just on a couple of references to that being a growth engine going forward. Can you just outline the plan there? Secondly, what drives the outcome between being earnings neutral in 2023 to growth and also to being accretive in FY 2024, please? Okay, I'll take the first part, and Keir will take the second one. Look, upon completion, we'll give you a bit more color with regard, and it'll probably be in the quarterly with regard to Collimate. I think when you think about that platform, I'll leave you a couple of thoughts. Think about the platform being the largest on-campus provider of student accommodation in the country. Think about the largest aged care operator in the country. Think about the amount of PPPs that are on that platform. Are they real estate? Are they infrastructure? And how we can work together in healthcare, for example, where we both have capital partners there. And think for the first time, for that business, they never had the same investor relations team, you know, selling the product. There was infrastructure separate to real estate while there's a lot of crossover in the client base. I think it's going to be one of the real eye-opening things that Deb and I have dealt with over the last sort of eight-10 weeks, the amount of clients that didn't even know some of the product that was sitting there. Under that brand, it was quite challenging to raise capital. As I said, we've already raised some capital in one of those infrastructure funds jointly. That's without closing and without rebranding. We're pretty, as I said, it'll take time to do all this, but from 2024 onwards, I'm pretty confident it'll be a strong growth engine for this company and we're excited about getting the guys on board and moving forward with that business. Keir, do you wanna? Sure. I think when you think about that acquisition, so we have bought it at a very attractive price. When we went into that transaction, we were aware that they operate with lower margins than what we do, and so we think there is scope for margin improvement, in time. The acquisition, whilst it's not significant, in terms of dollar values, it is a reasonable integration project. You know, there's a lot of people there. We're coming onto our platform, integrating systems and processes and the like. So we're very mindful that we want to take the time to work through that and do it in a very considered and orderly fashion. Once we're in that position, we think there is scope for margin expansion. I think to Darren's point, a lot of that we do anticipate will come through growth in the platform, which, you know, for various reasons, they haven't been able to experience for the last few years. Just to follow up there. With regards to the margin expansion, that's being driven by additional income as opposed to Dexus's driving margins on what was acquired, is the first part of that question. I think, well, as I said, we'll give you greater color, but there's obvious synergies when you bring together two organizations of this at this kind of scale. Okay. Thank you. Coming through. That's great. Thank you. Next question, just on some upcoming office expiries, obviously KG and just 80 Collins Street is 1.2% and 44 Market Street, 1% there. Just wondering if you could give an update on expectations for those two expiries, please. Yeah. We're well advanced with some good leasing. In fact, Melbourne in the last 12 months transacted about 31,000 of office deals or coming off a pretty average inquiry year. We had good transaction activity, and I think that momentum is gonna continue. As I said in my remarks earlier. We've got a fair amount under offer at the moment that we're working through. Big challenge, but, you know, we're confident we can deal with it, a big part of it over the course of the next 12 months. Great. Thank you. Thanks for your time. Your next question comes from Alex Prineas with Morningstar. Please go ahead. Thank you. Good morning. Just on slides 68 and 69, there's a supply outlook there for the office market, and, as you mentioned, looks pretty reasonable for the next couple of years, particularly in Sydney. There is a lot of mooted supply that could get committed. I'd be interested in your views on, you know, how likely or how rational is the broader office sector at the moment in terms of, yeah, will the broader industry only kind of commit to those projects if they meet the pre-commitment or are there risks there? Yeah. Good. Look, it's a good question. I think in light of where current financing is, I think lenders will be very hesitant to lend to speculative development at this point. Yeah, obviously, construction costs, if you haven't locked in your costs like we have in places like Waterfront, you know, as Ross said, it's coming off, but it probably won't come off for at least another 12-18 months. I think it's unlikely you're gonna see a lot of speculative development at this point. It's always been one of our fears over the last few years where money's been cheap, that you'll see more than what we saw. Look, I think it's unlikely. Ross or Kevin, you've got a view? In terms of location as well, I think what gives us confidence about our pipeline is the location. I think as Darren made some comments on, we have generally, we think, the best product in its category in each of the markets, whether it be sort of the tech product here, around Central or sort of super prime product on Collins Street in Melbourne. I think for the right product, we think the tenants will come, the tenants therefore justify us starting those projects. You know, I think that's. I sort of come back to more of the tenant side as opposed to, you know, Darren's comments around the financing. I think anyone is gonna want some confidence that the tenants are prepared to pay an economic rent to get a project up. Yeah, I think I'll just add. I think the developments that have long-term capital, so the develop-to-hold scenarios are more likely to get up with the right level of pre-commitment. I think those that are potentially looking to develop and trade, they're gonna be more challenged in the current environment. Yeah, I think if you've got a project, you've locked away a cost base that's reasonable and you've got the right sort of tenant covenant and coverage to get going, those projects will start. That said, I don't think as many in that pipeline will get going in the near term as some might have expected. Okay. Thank you very much. Your next question comes from Louise Sandberg with Bank of America. Please go ahead. Morning, guys. Just a quick question. Forgive me if I misunderstood, but you said you'll be net sellers of assets for probably another year, and then you also have negative re-leasing spreads in office. Should we expect office NPI to be flat to down for the next year or two before the new developments come on? I might just clarify the net seller comment. I think we said we were net sellers in the FY 2022, and I think some of Keir's remarks, she said in the guidance that we had assumed some asset sales, but we are essentially recycling capital into development projects. I wouldn't read into that we're trying to get shorter the market. I think we still. It's about reallocation of capital into higher returning opportunities and the right type of products that we think are gonna generate really good returns long term. Yeah. Right. Most of the new developments are not, you know, finished till. No, they won't. Yeah, 2026, 2027. In the next few years, that's a headwind to NPI growth. There's capitalization of interest on project costs, which will progressively increase over time. I think the way I think about it, we've been divesting assets for a number of years and reallocating that capital into other sources. To Ross's point, part of it is coming through developments. Some of the industrial developments will come online earlier. The city shaping projects will take a little bit longer. You do have capitalized interest, though, during that period. I think the other place, though, that we've been deploying capital is really through the funds management business and the co-investments in pooled funds that go alongside that. You've seen in our result this year, a much more significant contribution, both from the management business and from those co-investments. We would expect that that would continue to grow again in 2023 and beyond. Yes. Makes sense. In terms of the Collimate platform growth, what's the plan for reinvestment of that? Is it mostly for acquisition or co-development or co-investment in the development? I think it'll be led by the opportunities that we see in front of us, so we can't really give you more color on that. That's cool. Thanks so much. Once again, if you wish to ask a question, please press star one on your telephone. Your next question comes from Simon Chan with Morgan Stanley. Please go ahead. Hi. Good morning, guys. I just have one question. Wondering how, in terms of capital allocation. What have you guys thought about the buyback? I mean, Ross's comment before was about, you know, pipeline generating development margins in the mid-teens. Your stock's trading at, you know, 20% discount to NTA. I mean, if you do a buyback now, you'll get a more than mid-teens return straight away. It's an absolute no-brainer if you're shortsighted about what you're trying to do. We're trying to create a business here for the next five-10 years. Over the next, you know, two-three years, a buyback's obviously a no-brainer. However, you know, for us, we run this business for the buy and hold investor that's here for the long term, as we all are as executives. The right thing right now is to allocate it to some of these developments that we've been talking about today. It's not off the table. If we sell more than we anticipate, we get good prices, there's nothing to say a buyback won't be on. As you know, we've used it many times over the last 10 years, when it's been appropriate. The problem's always been when we do it is actually getting it at scale. Yeah, it's not off the table, but not right now. Yeah. Obviously, they're not mutually exclusive, but there is some critical elements to the timing, getting these projects going. You know, we have been working on these projects for a long period of time, and we have fund clients invested alongside us. Ensuring that we see those projects committed, the consequences financially of maybe not starting some of those projects could be quite adverse. They're not, as I say, they're not mutually exclusive in the medium term, but in the short term, you know, getting those projects going given that they are economic, makes a lot of sense. Yeah. Thanks, Darren. Darren. Thanks, Ross. There are no further questions at this time. I'll now hand back to Mr. Steinberg for closing remarks. Thanks everyone for joining us this morning, and we look forward to catching up with many of you over the coming days and weeks to talk about the results in more detail. Thank you.