Darren Steinberg will step down from Dexus after leading the ASX-listed property powerhouse for 11 years. It’s the latest departure in a generational change that has swept across the top ranks of the property sector.
Steinberg’s exit is set for 2024 after the search for his successor – internal or external – is completed. He will stay on until his replacement commences, Dexus said. Strong internal candidates include Dexus’ chief investment officer Ross Du Vernet and its funds management head, Deborah Coakley.
Mr Steinberg’s exit comes during a period of considerable transformation across the commercial property sector, as it grapples with the impact of higher interest rates and uncertain business conditions.
Under Mr Steinberg’s hand, Dexus had already changed course significantly as it emerged from the disruption of the pandemic period. That strategy included diversification of its portfolio, reducing its exposure to office assets, and extending its remit beyond real estate to become a manager of real assets, including infrastructure.
“My decision to step down next year allows time for continuity,” Mr Steinberg said on Wednesday.
“Dexus has a team of experienced and talented people and I will leave knowing that the business is in a strong position to continue to deliver long-term value.
“I am proud of everything we have achieved as a team for our investors, our customers and our people, and am committed to ensuring a smooth transition.”
Among those achievements was Dexus’ takeover of the $4 billion Commonwealth Property Office Fund in 2014, making it the country’s biggest landlord at the time. Two years ago, in a unexpected swoop, Dexus led a buy-out Perth’s Jandakot Airport and its highly valuable industrial estate.
Steered by Steinberg, Dexus last year took control of the bulk of AMP Capital’s $28 billion platform of commercial property and local infrastructure, bringing with it exposure to renewable energy assets. It has also led a strong push into healthcare real estate, an emerging sector tipped for strong growth.
Those moves came as the long shadow of COVID-19 fell over commercial property, with soaring inflation spurring higher rates, which in turn weighed on earnings and portfolio valuations. Dexus’ efforts to diversify proved timely as office assets in particular were hit by weaker demand, exacerbated by the work-from-home trend.
Investor concerns over those valuations have pushed Dexus stock, like many of its peers, to trade at a significant discount to its ascribed portfolio values.
As change sweeps through the sector, the top decks have also cleared. Just last month, fund manager GPT finalised an extended search for a new chief executive to replace outgoing Bob Johnston.
The shake-up in the sector began in earnest two years ago, when Tony Lombardo took over leading Lendlease from Steve McCann.
A former senior Lendlease executive, Tarun Gupta, stepped into the top job at Stockland last year, replacing Mark Steinert, while Scentre Group’s former chief financial officer, Elliott Rusanow, also took over from the long-serving Peter Allen last year to head the owner and operator of Westfield malls.
Another high-profile handover cane earlier this year, as Mirvac’s investment head Campbell Hanan took over as the company’s chief executive from Susan Lloyd-Hurwitz.
The most senior property leaders staying the course are Charter Hall’s David Harrison, who has led the fund manager since 2006 and Greg Goodman, who has been in charge of the industrial giant Goodman Group for 25 years.
The announcement of Mr Steinberg’s departure next year came as the platform handed down a quarterly business update on Wednesday, reaffirming its guidance to deliver distributions of 48 cents per security in the 2024 financial year.
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