Portfolio valuation update

Dexus today announced that 170 of its 176¹ assets, comprising 30 office properties and 140 industrial properties have been externally valued as at 30 June 2024. 

The draft external independent valuations have resulted in a total estimated decrease of circa $1.3 billion² or 9.0% on book values across the stabilised portfolio and development assets for the six months to 30 June 2024.

The value of the office portfolio decreased circa 11.3% driven by higher capitalisation rates and discount rates, partially offset by market rental growth. The industrial portfolio decreased by circa 1.2%, with strong rental growth largely offsetting the impact of higher capitalisation rates and discount rates.

Ross Du Vernet, Dexus Group CEO and Managing Director said: “The investment metrics displayed by recent sale activity support a softening in office market valuations. However, as a long term investor, we have confidence in the value of our high quality portfolio through the cycle. There is continued occupier demand for well-located, high quality buildings as seen in our portfolio occupancy.”

The weighted average capitalisation rate across the total stabilised portfolio expanded by circa 42 basis points over the past six months from 5.45% at 31 December 2023 to 5.87% at 30 June 2024. The weighted average capitalisation rate of the office portfolio expanded by circa 48 basis points from 5.53% at 31 December 2023 to 6.01% at 30 June 2024 and the industrial portfolio weighted average capitalisation rate expanded by circa 27 basis points from 5.18% at 31 December 2023 to 5.45% at 30 June 2024.

Valuations will be finalised and details relating to specific individual property valuations will be available in Dexus’s FY24 results which will be released to the Australian Securities Exchange on Tuesday, 20 August 2024.

Authorised by the Board of Dexus Funds Management Limited.