Dexus shares dip on $1.3b decrease in property valuations
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The news: Shares in Dexus dropped after the property investor wrote down the valuations of its office assets amid a softening market.
The numbers: Dexus said external independent valuations have resulted in a reduction of 11.3% in the value of its office portfolio, while its industrial portfolio decreased by 1.2%.
The overall value of its 176-property portfolio decreased by $1.3 billion or 9%, the group said.
Dexus shares were down 1.5% to $6.44 on the news.
The context: The group attributed the lowered valuations to the impact of higher capitalisation and discount rates but said this had been offset by strong rental growth.
Dexus CEO Ross Du Vernet said there had been a softening of recent office market valuations but remained confident of the high value portfolio as a long term investor.
On Wednesday, Dexus outlined writedowns of 30.7 million for its Dexus’ Industria REIT wand 9.6 million for its Convenience Retail REIT.
Most real estate managers have faced a challenging period amid a rapid increase in interest rates that has lifted their cost of debt, affecting their rate of returns and prompting a cut in portfolio valuations.
The source: ASX announcement
