Another REIT hit by lower valuations

Oksana Patron

26 June 2023

Dexus Industria REIT has followed the recent pattern of entities affected by asset devaluation and reported a $28.3 million drop for the six months to June, representing a 1.8% decrease on prior book values.

Over the last few weeks two major groups, Charter Hall and Dexus, also announced a drop in their asset valuation by $1.9 billion and $1 billion, respectively.

In the announcement made to the Australian Securities exchange (ASX), Dexus Industria REIT (DXI) said the draft external valuations looked at 91 of its 94 assets, which reflected all assets except those held for sale.

DXI’s fund manager, Alex Abell, commenting on the announcement, said: “Strong industrial rental growth continues to enhance future cash flows, which has largely offset the impact of cap rate expansion across DXI’s $1.4 billion portfolio”.

According to the MSCI Capital Trends report for Q1 2023, the industrial sector recorded the sharpest slowdown in deal volume of the core sectors at -82% year-on-year.

“A correction shouldn’t be too surprising given how hot the transaction market has been in recent years; nevertheless, it indicates that the darling of the property sector is not immune to market turbulence,” the report said.