Dexus shares trade flat as property values continues to slide
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The news: Property investor Dexus recorded a 2.1% decrease in the value of its portfolio during the six months to 31 December.
The numbers: Dexus said that 172 of its 176 assets — comprising 29 office properties and 143 industrial properties — were externally valued, resulting in a total devaluation of around $267.6 million.
The value of Dexus' office portfolio decreased 3.2%, driven by higher capitalisation rates and discount rates, partially offset by rental growth.
The company's industrial portfolio increased by 1.4%, with rental growth largely offsetting the impact of higher capitalisation rates and discount rates.
The weighted average capitalisation rate across the portfolio expanded by around 12 basis points over the past six months from 5.9% at 30 June to 6.02% at 31 December.
Dexus shares edged up 0.3% to $6.71 by midday AEDT.
The context: The 2.1% valuation decrease in Dexus' portfolio, follows a 9%, or $1.3 billion, reduction in the six months to June.
What they said: "As a long-term investor, we have confidence in the value of our high-quality portfolio through the cycle," said Dexus group chief executive and managing director Ross Du Vernet.
"Positively, the rate of decline in office valuations has slowed in the six month period, with improving transaction volumes and an increase in interest from institutional buyers."
The source: ASX announcement
