Good morning, everyone, and welcome to the 2024 Annual General Meeting of Dexus Industria REIT. The time is now 10:00 A.M., so we'll get underway. For those whom I have not met, my name is Jennifer Horrigan, and I'm the Chair and Independent Director of Dexus Asset Management Limited, the responsible entity of Industria Trusts One to Four and of Industria Company Number One Limited, which together comprise Dexus Industria REIT. We appreciate that not all security holders can attend in person, particularly when Sydney's threatening a transport strike, and we're very pleased to be able to provide the opportunity for everyone to participate in the meeting through a hybrid meeting format. Before we start the meeting, as a courtesy to everyone present, may I ask our audience in the room to ensure your mobile phones are off or on silent?
In the unlikely event of an emergency, the closest emergency exit is located down the corridor outside of the room next to the main entry lifts. The restrooms are located in the corridor around the corner to the left after you exit the room. I'll table my appointment as Chair of today's meeting and open the meeting. For security holders unable to attend the meeting in person, we welcome you to the meeting via Link Market Services' online meeting platform, which enables you to view the meeting live, vote while the meeting is underway, and also to submit questions.
If you have any questions to put to the meeting today, we suggest that you submit your questions as early as you can, specifying whether the question relates to general business or to a special resolution or to a specific resolution, and these will be addressed at the appropriate time during the meeting. For our security holders joining us today in the room, we ask that you raise your admission card during question times to indicate that you have a question. We will take questions from the floor, followed by questions submitted via the online platform. Note we have not received any calls through our conference call telephone line prior to today's meeting.
For those security holders joining us online, if you are yet to access your voting card to vote on the resolutions for the meeting, you should click the Get a Voting Card button at the top of your screen to register first, which will then enable you to submit your vote at any time during the meeting. If you are a security holder, you will need your security holder number and postal code to register your vote. If you are a proxy holder, please enter the proxy number issued to you by Link Market Services in the Proxy Details section and then click the Submit Details and Vote button. Online voting will close five minutes after the close of the meeting, and the results will be released later today to the ASX.
On behalf of the Board, I would like to start our AGM by acknowledging the traditional custodians of the land on which we are presenting from today, and we pay our respects to their elders past and present. I would also like to welcome any First Nations people who are joining us today. I'm very pleased to introduce my fellow directors and our fund managers. Firstly, Emily Smith, Independent Director, who chairs the DXI Audit and Risk Committee. Danielle Carter, Independent Director. Jonathan Sweeney, Independent Director. Melanie Bourke, an Executive Director who joined the Board on 17th July of this year following Deborah Coakley's departure from Dexus. Melanie is an experienced executive and is also Chief Operating Officer at Dexus. And I'll introduce Gordon Korkie, the Fund Manager of Dexus Industria REIT.
Gordon commenced as Fund Manager on the 1st of February this year following the departure of Alex Abell, who had been our Fund Manager for over seven years. Gordon's appointment followed a rigorous internal and external search, with the Board believing that Gordon's prior experience as the DXI Assistant Fund Manager, in addition to his prior experience with direct property and equity capital markets, makes him the right candidate to steer the fund into the future. I would also like to welcome the DXI Assistant Fund Manager, Sharon McHale, who also joins us today. Finally, I would also like to welcome our Company Secretaries, Brett Cameron, and also Scott Mahony, along with representatives from our lawyers, King & Wood Mallesons, and our auditors from PricewaterhouseCoopers.
As Resolution Four relates to the appointment of KPMG as our new auditor, I would like to acknowledge the work of PwC, who have been highly professional and committed in their work as auditor for DXI, and I'd like to thank them for their service. I now formally call for a poll on all of the resolutions to be put to the meeting today and declare the poll open so you can lodge your votes at any time during the meeting. The agenda for today's AGM will begin with the Chair's address, which will provide an overview of the fund's investment proposition and positioning in the current operating environment. I'll then hand over to Gordon, who will provide more details on DXI's recent achievements and key strategic priorities going forward. We will also provide our investors with the opportunity to ask any questions.
Following Gordon's address, we will then turn to the formal aspects of the meeting and the series of resolutions outlined in the Notice of Meeting and Explanatory Memorandum sent out to our investors in mid-October. Accordingly, I formally call for a poll on all resolutions to be put to the meeting and declare the polls open so that you can start to lodge your votes. So moving to DXI. The purpose of DXI is to generate strong risk-adjusted returns for investors who are seeking listed industrial real estate exposure. We remain disciplined and focused on continuing to execute this strategy by, one, generating organic income growth from high-quality assets, with DXI's portfolio 89% weighted to well-located industrial assets, up from only 52% five years ago.
Secondly, acting as a reliable custodian of security holders' capital by maintaining a prudent capital structure having regard to the broader macroeconomic environment, including higher interest rates and inflation. DXI was proactive in divesting assets early in the devaluation cycle and recorded look-through gearing of 27.3% at 30th of June 2024, one of the lowest ratios in the AREIT sector. And three, actively managing the portfolio to improve portfolio quality and maximize value, including through the delivery of modern, highly functional warehouses via developments. DXI has delivered more than 94,000 m² of developments in the past two years, which have been sought out by tenants such as Amazon, Marley Spoon, HelloFresh, Timex, and Caddy. These activities are supported by Dexus, an aligned manager with deep real asset capability and more than AUD 54 billion of assets under management, including AUD 11 billion of industrial real estate.
Dexus's capability and depth of expertise provides us with the ability to leverage insights and extract maximum value from our assets and positions DXI to continue to perform strongly throughout the investment cycle. Some highlights from 2024 on ESG initiatives: environmental, social, and governance. ESG has been a focus of ours for many years, and we seek to deliver on commitments that create long-term value for all of our stakeholders. Some highlights for 2024 include maintaining net zero status across the managed portfolio with 100% renewable electricity sourced from controlled assets, integrating sustainability into developments from both a design and construction perspective.
At Mooreb ank, we have been able to crush and reuse concrete with a goal to recycle 80% of construction waste and implementing an operational waste diversion program at BTP, Brisbane Technology Park, which has improved recycling rates by 26%, representing a saving of 100 tons of greenhouse gas emissions. Finally, I would like to thank our security holders for their ongoing support of DXI. I would also like to thank the management team for the results achieved in FY 2024. We will maintain a disciplined approach to capital allocation, and we will continue actively managing the portfolio for the benefit of all our security holders. I will now hand over to Gordon to provide his address.
Thank you, Jennifer, and good morning, everyone. I'm excited to lead DXI into the next phase of growth. I believe the fund offers an attractive proposition for investors. We've prudently managed the balance sheet through the devaluation cycle with one of the lowest gearing ratios in the AREIT sector. Furthermore, we've proactively managed the portfolio to provide investors with a resilient and growing cash flow stream. As markets begin to turn, we are well placed to deliver long-term value to our security holders. Starting with the highlights in FY 2024, where we delivered on our upgraded guidance with FFO of AUD 0.174, up 1.7% on the prior year, reflecting our proven and long-standing active management approach and the resilience of the portfolio to generate a growing income stream.
Leasing momentum continued in the year, with Brisbane Technology Park now close to full occupancy, and we've also achieved releasing spreads of 28.3% across our industrial leasing, which will support future growth. We retained balance sheet strength, with look-through gearing remaining well below the 30%-40% target gearing range, which positions us well amidst a challenging economic environment, but also provides us the flexibility to be opportunistic, whether that's investing into our attractive development pipeline or considering acquisition opportunities. It's been a challenging few years for the commercial real estate sector, and we were deliberate in disposing assets early in the devaluation cycle to unlock the attractive investment opportunities within our development pipeline. Over the past two years, we've divested close to AUD 300 million of assets, with over half of this relating to the divestment of Rhodes Corporate Park in November 2022.
The divestment of Rhodes significantly reduced income risks across the portfolio, particularly given challenging leasing conditions in a suburban office market. Through repaying debt, we've afforded ourselves the ability to redeploy that capital while withstanding the impact of continued devaluation pressures without any distress. We completed almost 44,000 m² of developments at Ascend at Jandakot across three projects in the 12 months to 30 June. An average yield on cost of 5.3% was achieved on these two pre-commitments completed in July 2023, which compares to the 4.4% passing yield on the assets we divested to fund these. The positive spread achieved demonstrates the value we are able to crystallize by recycling capital. Looking forward, we'll continue to remain disciplined when deploying into our development pipeline by targeting yields on cost of 6.25% and above.
The purpose of this slide is to depict how we expect to deliver long-term value to our security holders, with three key priority areas underpinning the fund's strategy. We are focused on driving maximum value out of our assets by executing on asset plans which are refreshed every year and working in close partnership with our tenants. Some good examples of this include investing into our smaller suite strategy at BTP, which has appealed to a broad range of tenants and driving higher occupancy and rents. The installation of 2.5 MW of solar across our network has reduced our carbon footprint while also achieving attractive returns on investment. Our proven and long-standing track record in delivering leasing outcomes above valuation assumptions supports not only NTA growth, while also proactive leasing decisions have de-risked our forward earnings.
Our development pipeline is a core differentiator for the fund as we continue to develop new and modern warehouses. These are sought after by tenants, as we've seen through leasing outcomes. At Ascend at Jandakot, we are targeting pre-commitments, and we are seeing demand across a range of different size requirements. Lastly, we retained a disciplined approach when assessing potential transactions. Our ambition is to become a pure-play industrial REIT, and in line with this, we expect to exit our investment in Brisbane Technology Park over time. Given the structure of the asset, we have the flexibility to divest this asset as a whole or on a piecemeal basis given its spread across 12 assets. We remain focused on driving performance at the asset and assessing any sale in parallel with redeployment opportunities elsewhere.
Given market pressures in recent years, it has been difficult to source acquisition opportunities that meet our return requirements. As markets begin to turn, we are in the fortunate position to have a balance sheet that allows us to act quickly as those opportunities arise, particularly for assets that are well located in growth corridors with favorable demand and supply dynamics, are located in the East Coast to balance out our exposure in Western Australia as we build out our land holdings there, as well as looking for assets that have the potential to add value and be able to reposition. As I mentioned earlier, our development pipeline is a core pillar of the fund that will underpin future growth. The pipeline is valued at AUD 250 million across more than 300,000 m² with projects in Sydney and Jandakot.
We have ample balance sheet capacity to fund our development pipeline with look-through gearing set to remain well below the 30%-40% target range post-funding the committed projects. At Moorebank, we began construction earlier this year as a multi-unit estate across 17,900 m². This project is located in one of Sydney's strongest submarkets and is to be delivered at an attractive yield ranging between 6% and 6.5%. Pleasingly, we've already agreed terms on one lease deal at a record rent for the Southwest Sydney market. The majority of our development exposure is in Jandakot in Western Australia, where we expect to build out just under 290,000 m² over the next five years. At 30 June, we have two active projects valued at AUD 24 million, which is 77% pre-leased.
On our AUD 180 million of uncommitted pipeline, we'll remain disciplined in building out these land holdings with a focus on leasing momentum. We've delivered good progress on completed projects to date, which have been leased to tenants such as Amazon and Marley Spoon, with these developments offering solid ESG credentials such as on-site solar. We are targeting a yield on cost of 6.25% and above. Given the development land is already fully paid, we can achieve incremental yields on cost of 8% and above, which remains comfortably above our marginal cost of debt and is accretive to earnings despite higher cost of debt. It's also important to note that our current NTA does not include any value associated with development profits on our uncommitted projects that we are able to achieve over time.
Overall, our development pipeline has the potential to add an additional AUD 15 million of new income over the next five years, which is equivalent to 16% of our income today. In summary, we are well placed to continue delivering long-term value for our investors. We remain focused on enhancing our portfolio to drive organic income growth, diligently pursuing value-enhancing investment opportunities, all the while ensuring that we remain a strong capital position. Our earnings profile is resilient, and our balance sheet provides us great flexibility to perform well regardless of the economic environment. We are pleased to reiterate FY 2025 guidance for FFO for security of AUD 0.178, reflecting growth of 2.3% on the prior year, and distributions of AUD 0.164, which reflects a distribution yield of 6.3% for our investors. Thank you for your ongoing support, and I'll now hand back to Jennifer.
Thank you, Gordon. We now have time for questions before going on to the formal business of the meeting. Firstly, we did receive one question through our registry prior to the meeting, which I'm very happy to address now. I'll read the question as it was submitted. Question: Can we please stop virtue signaling and just get on with business? There should be savings in HR and PR to be had. I'd like to thank the investor for submitting their question. I'm certainly pleased that we have an opportunity to discuss this and to explain our approach on these matters in a little bit more detail. The commitments that DXI makes from an ESG perspective are genuine, have a clear business purpose, and ultimately create long-term value for all our stakeholders.
For example, improving the appeal of our property assets to tenants and investors through ESG initiatives such as rooftop solar and commercial-grade storage leads to lower outgoings, higher net rents, and less downtime. ESG initiatives across the DXI portfolio allow us to attract tenants to our property assets and, importantly, retain tenants across our property assets, evidenced by DXI achieving more than 99% occupancy by income across our assets. So, bottom line, because we are focused on the business, we are focused on ESG. And ESG is also important because such initiatives allow us to attract new ESG-focused investors to our register. Dexus has a long-standing track record as a leader in ESG, and DXI is very fortunate to be able to leverage Dexus's expertise in this area for the benefit of all of our stakeholders, including investors and our tenants. I'll just pause to see if there are any other questions that anyone would like to add from the audience. Are there any questions from the virtual platform?
Chair, there are no questions online.
Okay. Thank you. Given that there are no further questions, I will now continue with the formal business of the meeting. Today's meeting has been convened in accordance with the constitutions of the company and each of the trusts that comprise Dexus Industria REIT and the Corporations Act. And I have been informed by the registry, Link Market Services, that a quorum is present to enable the formal resolutions, the subject of this meeting, to be considered and passed. If you have not already done so, please click the cast vote or cast partial vote button on your screen to register your vote. There are four resolutions, and each must be considered separately. Resolution one is an ordinary resolution and concerns the adoption of the remuneration report of Industria Company Number One Limited for the year ended 30 June 2024.
Under the Corporations Act, a listed company is required at its AGM to put to its shareholders a resolution to approve its remuneration report. Despite the fact that no remuneration is paid by DXI, we have once again complied with these requirements. The remuneration report was included in Dexus Industria REIT's 2024 financial statements, with copies of these available at this meeting and on our website. The remuneration report, as our investors would be aware, is referred to as a nil remuneration report because DXI is externally managed, and Dexus, as the manager of DXI, has paid the remuneration for employees and directors of DXI. The nil remuneration paid by Dexus is confirmed in the remuneration report. The proxies received are detailed on the screen and represent circa 44.9% of issued capital. Are there any questions in relation to Resolution One? Any from the virtual platform?
There are no questions online.
Okay. Thank you. We will now turn to Resolution Two. Resolution Two is an ordinary resolution of the company and seeks the reelection of Jonathan Sweeney as a director of the company. The proxies received are detailed on the slide and represent circa, I'll say, 45% of issued capital. Before we turn to questions relating to this resolution, I would like to invite Jonathan to address the meeting.
Thank you, Jen. Good morning, everyone. It remains an honor to serve on the Dexus Asset Management Board, and I'm delighted to be standing for reelection as a director today. I am a security holder in DXI as well, so there's a nice alignment there. If I'm elected, I look forward to continuing to represent all security holders' interests in working with management and other directors in continuing the success of DXI. I'm an experienced director across listed, unlisted, and full-purpose boards. I've served on listed boards in either an executive or non-executive role since the late 1990s, as well as having served on audit, investment, remuneration, and risk committees. My executive career spanned 32 years in equities and real estate investment management and fiduciary services.
I've served as both a CEO and COO of listed entities, and I have a deep understanding of financial markets, governance, fiduciary obligations, and investment management. I currently serve as chair of the BT Funds Board and Perpetual Private Investment Committee, as well as serving on the investment committee of the Noongar Boodja Trust in WA. I'm also a director of the Australian Davis Cup Tennis Foundation, as well as being an executive coach with ECI Partners. My qualifications include a Bachelor of Commerce and Laws, and I'm a CFA Charter holder and a graduate of the AICD Company Directors Course. I hope you will support my election today. Thank you.
Thank you, Jonathan. Are there any questions in relation to Resolution Two? None from the audience? Any from the virtual platform?
There are no questions online.
Thank you. We will now move to Resolution Three. Resolution Three is an ordinary resolution of the company and seeks the election of Melanie Bourke as an executive director of the company. The proxies received are detailed on the slide and represent circa 45% of issued capital. Before we turn to questions relating to this resolution, I will ask Melanie Bourke to present to the meeting.
Thank you, Jen. Good morning, everyone. It's a privilege to be standing for election as a director today. I'm passionate about the real asset sector and its role in investors' portfolios. My executive career spans 20 years across many aspects of real estate investment management, including finance, investor relations, office of the CEO, asset and property management operations, and the people and culture function. I'm committed to strong governance and delivering enhanced outcomes for stakeholders. I'm a qualified chartered accountant who respects the importance of reporting and risk management frameworks. As the Chief Operating Officer at Dexus, I lead a team responsible for supporting business activities across the group. This includes risk, real estate services, procurement, legal, compliance and governance, corporate affairs and external communications, marketing, technology, and sustainability functions, as well as leading the strategic delivery office.
My qualifications include a Master's of Business Administration and a Bachelor of Commerce. I'm a member of the Australian Institute of Company Directors and the Institute of Chartered Accountants in Australia. I'm also a member of Chief Executive Women. If I'm elected to the board, I commit to represent the best interests of all security holders and working with management and the other directors in delivering continued success for DXI. Thank you.
Thank you, Melanie. Are there any questions in relation to Resolution Three? Firstly, from the room, the online platform?
There are no questions online.
Thank you. Very pleased to support the reelection of Jonathan Sweeney and the appointment of Melanie, both hardworking, committed, and very diligent directors on behalf of our investors. We'll now move to Resolution Four, which is the appointment of auditor. Resolution Four is an ordinary resolution and seeks subject to ASIC consent for the current external auditor, PwC, resigning and approval at the AGM to appoint KPMG as the external auditor for DXI. As we mentioned earlier in my address, PwC is the current external auditor of the company and the trusts.
After a competitive tender process, the board resolved to appoint KPMG as the auditor of the company based on the firm's reputation in the market, track record, and technical expertise. ASIC has provided consent to PwC resigning as the external auditor of the company and the trusts. And we're pleased to also welcome representatives from KPMG at our AGM today. The proxies received are detailed on the slide and represent circa 45% of issued capital. Are there any questions in relation to Resolution Four? Firstly, in the room, on the online platform?
There are no questions online.
Thanks, Ro. Okay. Okay, so given that there are no questions, we'll continue through the meeting. Once the votes are collected and counted today, we will announce the final poll results for each resolution to the ASX and have them available on our website after the meeting. Before we conclude the meeting, I just wanted to provide a final opportunity for any questions that any investors would like to ask. Any questions from the floor online?
Chair, there are no questions online.
Okay. Thank you. Given that there are no questions, I will call on the representatives from Link Market Services to circulate the ballot boxes and collect your completed voting cards. For our security holders voting online, I ask that you complete your voting now if you haven't done so already, and remind you that the voting system will close five minutes after I formally declare the meeting closed. Ladies and gentlemen, that ends the formal part of today's meeting. I would like to thank you, our security holders, for your continued support and for attending the meeting today. For those of you who are attending in person, I invite you to join my fellow directors and I alongside members of our senior management team for refreshments. I now formally close the meeting. Thank you.