Aussie commercial property market not crashing despite price falls - Morningstar

GPT

06/10/2022 22:42

** Morningstar expects further price falls in Australian
property with interest rate hikes still on the cards, but says
market is holding up compared to "doomsday fears" that prevail
in listed markets
    ** Australia's real estate sub-index  .AXRE  is down over
26% YTD
    ** Morningstar says Dexus  DXS.AX  and GPT Group  GPT.AX 
are trading at 35% discounts to their net tangible assets
    ** Says pricing of real estate investment trusts (REITs)
implies commercial property crash, but adds recent transaction
activity shows that while market in weaker, it is not crashing
    ** It says Charter Hall Group  CHC.AX , like other property
fund managers, faces risks from increased competition, and
falling property valuations due to rising interest rates and
rental pressures
    ** Says, however, that market may be factoring in too much
bad news, as CHC has structural growth opportunities
    ** Retains fare value estimate for CHC at A$15.85
    ** Fair value estimates for DXS and GPT unchanged at A$10.80
and 5.40, respectively
 (Reporting by Harish Sridharan in Bengaluru)
 ((harish.sridharan@thomsonreuters.com))