Australia's Dexus flags $867 mln decline in portfolio valuation (updated)

Dexus

20/06/2024 01:40

(Adds background in paragraph 2, details and shares in
paragraphs 3-9)
       June 20 (Reuters) - Australian real estate firm Dexus
 DXS.AX  said on Thursday the book value of its portfolio
declined by 9%, or A$1.3 billion  ($867.36 million), for the six
months to June according to a draft external independent
valuation.
    The domestic real estate market, particularly office and
retail, has been battling a downturn as the work-from-home trend
and e-commerce constraints pressure valuations, with higher
interest rates also lowering building values and raising debt
costs.
    Shares of Dexus fell as much as 1.8% as of 0007 GMT to hit
their lowest in more than seven months, while the benchmark
index  .AXJO  was largely unchanged.
    The stock had declined nearly 15% this year by Wednesday's
close as the company posted its second-biggest half-yearly loss
since 2008 in February and valuations of its properties slide
further.
    "The investment metrics displayed by recent sale activity
support a softening in office market valuations," said Ross Du
Vernet, Dexus Group CEO and Managing Director.
    "However, as a long-term investor, we have confidence in the
value of our high-quality portfolio through the cycle."
    The draft external independent valuation covered 170 of the
company's 176 assets, Dexus said.
    The valuations of its office portfolio decreased by 11.3%,
while those of the industrial portfolio declined by 1.2%.
    The weighted average capitalisation rate - a metric to
measure return on investment of real estate assets - across the
company's portfolio increased to 5.87% from 5.45% at
December-end.
    
($1 = 1.4988 Australian dollars)

 (Reporting by John Biju in Bengaluru; Editing by Kim Coghill
and Subhranshu Sahu)
 ((John.Biju@thomsonreuters.com;))