Dexus CEO Ross Du Vernet: interest rates not the only concern

Ross Du Vernet says the labour market remains tough and cost pressures exist, while energy prices are also an issue.

Dexus chief executive Ross Du Vernet

CEO SURVEY 2025: FULL COVERAGE

Economy

How would you rate the momentum of the Australian economy as we head into 2025? Official forecasts have Australia trimming interest rates from the first half of calendar 2025, is that consistent with your view? What are you seeing around inflation in your own business?

We try not to be too precise in predicting rates. Lower rates in 2025 are likely. If we look at our business, the labour market remains tough and cost pressures exist, energy prices are also an issue. In the procurement and construction market, things have certainly been cooling, which is a positive signal.

Outlook

What excites you heading into 2025? Are you likely to increase, hold steady, or trim your investment spend?

Rate cuts will have a big impact on investor confidence and we should see stronger volumes in commercial real estate transactions. We see lots of opportunity in this market to invest and are actively working to deploy capital alongside clients.

Reform

As we move into an election year, in your mind, what’s the single biggest lever that can/should be used to lift Australia’s competitiveness or productivity? This could be across any area from labour market, tax reform, training or other areas to encourage investment.

There is no silver bullet. Labour market reform that looks at mobility and the skills that business and the nation needs five to 10 years from now would be a good start. On the tax side, the various state based taxes and duties that single out foreign capital (which the nation needs) is counter-productive to creating the stable investment environment these long term investors need.

Geopolitics

Will a Donald Trump presidency have a potential impact on your business or sector (tariffs or streamlined regulation)? Does geopolitics drive a bigger part of your decision-making?

This is hard to answer as Trump is hard to predict. We don’t see many direct impacts. Heightened geopolitical risk generally may slow decision making for investors, but Australia’s positive relationship with the US could see it position itself to get a disproportionate share of global capital flows within Asia.

People

Has your organisation’s approach to flexible working – including working from home – evolved during the year. Is this likely to change further into 2025?

Flexibility has long been part of our employment arrangements. We do not have mandates or minimum days. Like many businesses, a lot of our work requires collaboration and the sharing of information and ideas, and our people recognise we do our best work together. In a recent survey, 84 per cent of our employees told us they have found effective ways to collaborate while working flexibly and are happy with the current arrangements. We do not expect our approach to flexibility to change in 2025.

Technology

Where is your organisation along the AI journey – is it in the developmental stage, or are you now using the technology at scale across your business? If so, are benefits matching the promise?

We are at the developmental stage. The use cases aren’t yet clear, but we are trying lots of things and many of our people are embracing it and experimenting with what works for them. We weren’t expecting huge dividends, rather small incremental improvements and gains, which is what we are seeing. It is still early days.