Half of Centuria's office portfolio drops 5.6% in value

The news: Centuria Office REIT has posted a 5.6% decline in the value of roughly half its portfolio in the second half of 2023.

The numbers: External appraisals on 12 of Centuria's 22 investment properties, 49% of the portfolio by value, reflected a decrease of $124 million on prior book values. The weighted average capitalisation rate of the total portfolio grew from 6% to 6.26% between 30 June and 31 December 2023.

The context: COF's fund manager Grant Nichols said Centuria Office REIT continued to maintain high portfolio occupancy through tenants that included government, ASX-listed and multinational corporation clients. The high interest rate environment has been challenging for real estate funds, after some tough years for office portfolios in the wake of the COVID-19 pandemic. COF will release its first half results on 16 February.