Dexus, Stockland warn 'decision aversion' by tenants is dragging on office tower market
The chief executives of two major Australian property players have told investors that the office market is yet to fully recover from the occupancy crisis stemming from the Covid-19 lockdowns.
The nation's largest office landlord Dexus and one of its ASX-listed peers have painted an unsettled picture for commercial property in Australia's central business districts, warning the market is still feeling the after effects of the COVID-19 lockdown era.
Dexus CEO Ross Du Vernet, who took the reins at from former boss Darren Steinberg in March, said he is patiently awaiting “the next stage of the investment cycle” where buyers for premium office properties return and occupants cease dragging their feet on tenancy decisions.
Speaking at the Macquarie Australia Conference, he said the office market was unlikely to stage a full recovery “in an era of elevated rates” and noted that in the meantime there had been a “flight to core”, with buyers flocking to assets with better amenity, facilities and locations.
The absence of core property buyers could also be felt across the full spectrum of the industrial, retail and healthcare property markets, Du Vernet added.
