Portfolio valuation update

21 June 2023

Portfolio valuation update

Dexus today announced that 175 of its 182¹ assets, comprising 32 office properties and 143 industrial properties have been externally valued as at 30 June 2023.

The draft external independent valuations have resulted in a total estimated decrease of circa $1.0 billion² or 6.0% on prior book values for the six months to 30 June 2023.

Darren Steinberg, Dexus CEO said: “The value of the office portfolio decreased circa 7.7% on prior book values driven by higher capitalisation rates and discount rates, partially offset by market rental growth. The industrial portfolio decreased by circa 0.2% on prior book values, with strong rental growth largely offsetting the impact of higher capitalisation rates and discount rates.

“We expect well-located quality assets to continue to outperform secondary assets and locations against an uncertain macroeconomic backdrop.”

The weighted average capitalisation rate across the total portfolio expanded by circa 32 basis points over the past six months from 4.80% at 31 December 2022 to 5.12% at 30 June 2023. The weighted average capitalisation rate of the office portfolio expanded by circa 32 basis points from 4.89% at 31 December 2022 to 5.21% at 30 June 2023 and the industrial portfolio weighted average capitalisation rate expanded by circa 31 basis points from 4.46% at 31 December 2022 to 4.77% at 30 June 2023.

Valuations will be finalised and details relating to specific individual property valuations will be available in Dexus’s FY23 results which will be released to the Australian Securities Exchange on Wednesday, 16 August 2023.

Authorised by the Board of Dexus Funds Management Limited.

Footnotes:

1. Including Jandakot Airport, Perth which comprises 55 assets.
2. Includes assets held for sale at 30 June 2023 at sale price.