Abacus flags drawdown after portfolio valuation

The news: Property revaluations have wiped 6.5% from the book value of more than a third of Abacus Group's investment property portfolio.

The numbers: Abacus announced the value of seven properties representing 37% of its total portfolio by number have sunk by $140 million on prior book values over six months. The remaining 12 investment properties were internally valued.

The weighted average capitalisation for Abacus's investment property portfolio grew 37 basis points to 6.1%, by 42 basis points for its office property portfolio to 6% and the retail portfolio by 21 basis points to 6.4%. ABG shares were up 1.7% to $1.215 by 3:00pm AEDT.

The context: Commercial property valuations have faced headwinds in 2023 due to higher finance costs and the falling value of office buildings post-pandemic. The higher cost of credit is expected to persist into 2024, as the Reserve Bank continues its fight against inflation.