Business Description:
Dexus Property Group (DXS, formerly DB RREEF Trust) is a major Australian property owner, developer and manager. It owns an internationally diversified portfolio of mostly office and industrial properties, with over three-quarters by value in Australia/NZ and the majority of the remainder in the US.

Strategy Analysis:
Dexus Property Group (DXS) develops, owns and manages property. It owns a high quality portfolio of domestic industrial and office properties and industrial properties in the US and Europe. Post the global financial crisis, focus is on selling non-core assets, managing its cost structure and leasing current developments to reduce overall risk. Non-core assets to be sold include the European portfolio. Non-core US assets have been sold and the current strategy to reinvest in west coast markets is under review. DXS may decide to exit the US altogether. The general strategy is to create value through acquisitions mostly in Australia; redeveloping properties or undertaking new developments where value adding opportunities exist; expanding the direct property portfolio, especially in the industrial and commercial sectors; improving the profitability of its funds management business through the active management of its cost structure, retaining financial flexibility and capacity for active capital management. Dexus Property Group reported NPAT of $553.01m for the year ended 30 June 2011. Key drivers of this result include: fair value adjustments to property assets during the period of $182.0m, compared to a loss of $235.6m in 2010; and unrealised net fair value gain on derivatives totalling $44.2m (2010: loss of $57.6m) primarily as a results of higher market interest rates. Revenues from ordinary activities were $684.65m, down 4.4% from last year. Basic and Diluted EPS was 11.44 cents compared to 0.66 cents last year. Net operating cash flow was $239.34m compared to $340.17m last year. The final dividend declared was 2.59 cents, taking the full year dividend to 5.18 cents compared with 5.10 cents last year.